Talk:Petrodollar recycling

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[edit] Faulty Premise

I disagree with the premise presented in the secong paragraph of this article:

To acquire these dollars, Japan must sell goods and services to the U.S. economy. The Japanese build a Honda to sell to the U.S. The U.S. federal reserve prints a certain amount of dollars and gives these to the Japanese in exchange for the Honda. The Japanese buy oil from Saudi Arabia using these dollars. The Saudis take the dollars and reinvest them in the Federal Reserve Bank of the U.S., and from then on they will only be used as a reserve currency. Therefore, all the U.S. had to do to acquire a Honda, was to print dollars. In essence, it has its very own money tree. The result of this is that the total debt of the United States is somewhere in the region of $8.4 trillion and increasing by $80 million per hour.

Honda does not sell products to the U.S. economy -- it sells to individual consumers. These consumers exchanged hours of labor, financial risk, or other appreciable capital (represented by U.S. dollars) to Honda for their product. 131.6.84.67 15:50, 30 January 2007 (UTC)