>I was just assuming, perhaps wrongly, that if, say oil were no longer invoiced
>in dollars and ME countries no longer recycled their current account surpluses
>in US instruments, that could crimp Americans' styles seriously. Do you think
>that if the US were no longer clearly dominant power in the ME that oil prices
>and supplies wouldn't be seriously changed or disturbed? No short or medium
>term volatility?
There's a war premium in oil prices right now, but I don't think that it matters much for pricing who "controls" the oil. It's a global and mostly competitive market where prices are set by spot and futures traders. I think Chomsky is right that the U.S. is hot to "control" the oil for strategic reasons - for leverage over Japan and the EU, mainly. If oil were quoted in a basket of dollars, euros, and yen, it might have an effect on our economy, but not a major one. And an important reason it's quoted in dollars now is that this is the biggest market, and the best place to invest the cash.
Doug