Originally Posted by brewer12345
Already got that covered: Iraq has, what, the third largest proven oil reserves in the world, right?
Well yes but it isn't enough.
M2 is $7.5 trillion.
Iraq has resevers 112 billion barrels of oil
Each barrel makes 19 gallons of gas.
Wholesale price of gas is roughly $2.50 gallon
Total value of Iraq gas (not oil) ~$5.3 trillion, so we are short a couple of trillion.
So in order to have Bush dollars backed by gasoline, we need to invade another oil country. I think Canada would be easiest, but Saudi would probably allow us to maintain gas backed Bush bucks for many decades.
I am also ignoring the cost of pumping, and refining the Iraq oil. But it is an interesting exercise for the Ron Paulites of the world who want to see a return to the gold standard, to get an idea about just how impossible pegging the dollar to a fixed asset is.