As I understand it, the proposal is that the price of oil would be denominated in gold rather than in US dollars as currently. Transactions would be reflected in changes in account balances, rather than any physical transfer of gold, any more than actual currency is moved in dollar transactions. The intention is to insulate the price from fluctuations in currency exchange rates.
As the OPEC countries' incomes are spent or invested at about the same rate as it comes in, there would not be any significant physical transfer of gold.
If OPEC demanded gold there would probably be a few 'democratic' coups and 'revolutions' in various OPEC countries, after which they would decide it wasn't such a good idea. Of course this only matters after 1971. Before 1971 the dollar was as good as gold.
If OPEC demanded gold there would probably be a few 'democratic' coups and 'revolutions' in various OPEC countries, after which they would decide it wasn't such a good idea. Of course this only matters after 1971. Before 1971 the dollar was as good as gold.
I don't know. That's the short answer.I've seen a couple of articles where this has been suggested, but of course not seriously proposed. I'd imagine its close to ASB, but a discussion point nonetheless.
Would an Organisation of Gold Exporting Countries OGEC be formed?
What about other effects?
I know this borders on being ASB. But what if the United States and Canada
formed the Organization of Grain Exporting Countries, (OGEC), in response to the Arab Oil Embargo, and threatened to cut off all food if OPEC didn't lower the price of oil?
Or Nixon and Carter as POTUS.Our crude reserves are second only to the Saudis, and we are the largest energy exporter to the US. If you want a ban on Canadian wheat exports, you cannot have Trudeau as PM, which is quite feasible.