The Real Game

It's all about the dollar. There's arguments that the Iranian oil bourse, going live with a new oil exchange based on a currency other than the dollar, i.e. the euro, is a pipe dream of undermining U.S. currency hegemony in the world, but then again, we (Bush & Cheney & their fellow Republicans) have done it all ourselves.

To the point that seven (7) countries are considering abandoning the dollar.

But if the world runs on oil, then problem with destabilization of the dollar can have wide-ranging effects. Sure, Ahmadinejad and Chavez have their own political agendas to push, but you never want anybody calling your currency, "a worthless piece of paper."

Writing off a column by economist Paul Krugman, European economist Richard Baldwin writes:

The only reason to predict a sudden dollar plunge is if we believe today's capital flows are driven by investor myopia. That the markets are due for what Krugman calls a 'Wile E. Coyote' moment – a reference to the Warner Brothers’ cartoon where a greedy, shortsighted coyote chases a roadrunner off a cliff but doesn’t start falling until he looks down and realizes he’s left solid ground. Up until this 'Wile E. Coyote' moment, his belief that he’s on solid ground prevents him from falling. For investors in dollars, the 'Wile E. Coyote' moment comes when they realise that their expectations are inconsistent with any feasible adjustment path.

In this instance, "double bubble" isn't a flavor-packed alternative to Bazooka Joe.