WI OPEC demanded gold?

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?
 
It might be a good idea on their behalf; cause when oil goes, how many currencies will go. Gold is always good to fall back on. As far as what if; if I were the one making that decision, I'd tell them to stuff it. I'd keep the gold, cause it will last much longer than their oil.
 
The problem with such a demand besides the obvious political blow-back is that it'd almost certainly artificially inflate the price of gold thus squeezing the profit margin on crude even harder something which most of OPEC can't really afford.
 
It seems the previous posters read the title not the post...

Anyways, no. The biggest global producers of gold are (in no particular order) South Africa, Russia, Australia, the United States, China, Indonesia, and Peru. Possibly some other states were prominent earlier, but at least the US, Australia, and South Africa have been prominent gold producers throughout the century. Clearly, getting these three countries to agree to restrict exports is not just pushing ASB--it's way, way beyond. And once Soviet gold production ramps up...well, the USSR didn't join OPEC, so why would they join OGEC?
 
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.
 
Historically the price of gol in TOz has been 20:1 the price of oil in bbl. But now that's out of whack, gold is about $1100 and oil is about $80 so either gold should go up to $1600 or oil down to $55. Perhaps the price of gold is being kept low to keep the price of oil reasonable.

If payment was in gold transfers then only those with gold to transfer would be able to pay, so gold price would rise and gold supply would expand. But of course there is only so much gold to go around so I'd imagine that oil consumption would drop, and non-oil alternatives would appear quite attractive.
 
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.

I fully agree. Gold would become even more like a currency. The gold price would likely be more volatile, and increased interest and turnaround in gold might also increase the gold price.

Considering an OGEC, as said above, many of the main producers will have no great interest in this. Furthermore, oil may be cheaper than gold, but oil is necessary for transportation, energy, chemical industries... probably any country producing gold will be happy to export it for oil. Quite likely, many gold-producing countries will nationalize gold production and use the national treasure to support the economy by oil subventions payed for by nationalized 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.

The articles I read were from 2004 and 2008, we're talking about very recent events. Maybe this should go into FH.
 
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.


Are you trying to imply something by those quotes? ;)
 

Blair152

Banned
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 don't know. That's the short answer.
 

Blair152

Banned
WI the United States and Canada founded the Organzation of Grain Exporting Countries?

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?
 
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.
 
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?


<gasp> Threaten to cut off their food supply? America would be denounced six ways from Sunday if we tried that. After all, when the other guy embargos, there's always a good reason, but when America does it, it's for evil reasons (I'm being sarcastic here, but it's partially true).
 
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