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Friday, February 26, 2016

oil economy lies 4


OIL ECONOMY LIES 4

Lie #3: The US dollar is the currency other flee to.

It is something that is written so often it brings to mind Nazi propaganda ( if you repeat a lie often enough… ).  The dollar is a safe haven.  The dollar is fundamentally sound.  The dollar is always preferred over other currencies.  The dollar rebounded today after foreign stock market crashes.  Back before Peak Oil, or the housing bubble bust or Lehman Brothers, back when you could actually realistically pretend the economy was still on life support rather than a corpse being injected with more formaldehyde to stave off decomposition, I read a small piece stating that all the worlds gold and all the worlds reported oil reserves ( which, remember, are usually inflated numbers ) combined together at current prices were worth less than the current US national debt.  If one can agree that you can’t really recognize a store of wealth as desirable as those two, gold being real money since the start of national governments and the Agricultural Age, and oil being the energy source that is responsible for all economic growth but more importantly all our products helping us survive such as fertilizers for crops and heat for our homes in winter, than can’t we agree that those two stores of wealth are the only indicators there are?  And that if that is the case then our debt is larger than all the wealth left on the globe.  And then it follows that any economy with more debt than can ever be repaid is sick and will not last. 

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But that isn’t the worse past.  Our debt has been paid ( the interest on our debt, NEVER the principle ) and increased not by any economic activity as we don’t manufacture or create as much as skim and steal from others, but by that magic Petro-Dollar.  I’m sure you are all pretty tired of hearing about that by now, but it is imperative to your survival to understand that while the Derivatives Bubble Of A Quadrillion Dollars is a very scary near future problem ( perhaps even starting as I write this and only viewed in hindsight, it only takes a few re-insurers failing to make good on paying off loses measured in the less than one percentile that will give us 2008 Redux ), scary enough that it will cause a global Depression immediately and impair trade and stability, from the point of view of the man on the street nothing is going to be more devastating than the world waking up one morning and deciding that the US can pack sand and they don’t want our worthless Greenbacks anymore ( just remember, a Greenback was a Lincoln wartime currency unbacked by gold and the term originally derisive ).  We’ve been subsidizing our debt and inflation by exporting it for 45 years now, while at the same time we’ve increased the oil we need to import to survive.  We only pump five million barrels a day ( not including the soon to be shut down fracking oil ) and use up to twenty and that math does not add up.  The death of the Petro-Dollar is the death of imports, including all that oil. 

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In short, the Dollar is only a company chit for future oil production, which was the only thing making it attractive to foreigners ( and here, by Dollar, I mean Treasury Bills.  They are the trading currency for oil, not the actual dollar paper currency ).  Once those chits become counterfeit, once the buyers or producers of oil decide they want another way to trade oil, the dollar is instantly worthless and not fit for TP ( remember that unplayable debt? ).  And as we speak, more and more countries are safely bypassing the dollar for oil trading.  Iran just announced as such, one in a long line.  Russia just opened an Oil Exchange using their own currency.  China and Russia have bypassed the dollar for future trade agreements.  Less than two decades ago, Iraq tried to decouple from the dollar and we invaded them.  Libya tried to talk up a gold currency and we did the same ( although I believe that was secondary and there was more than meets the eye there ).  Now, we can’t say “boo” when others announce goodbye to the dollar ( one wonders if the Iranians either have nukes or if there are Russians in country to guarantee their safety, to assure this, or if we simple are that powerless now ).  It is already happening, the barn door is opened and the horses are stampeding.  Forget the global stock market meltdown, this is far more serious.  There is absolutely no guarantee that we have years of this before the world as a whole rejects the petrodollar.  It could happen any time.  Gird your loins, yo!

Series continues next week.

END

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24 comments:

  1. While all fiat currencies fail. I see the dollar standing NOT in present form but as the currency of the united nations . Don't get me wrong I think FRN's will die and be replaced with a world dollar. It will benefit the mega rich and end all nations from currency manipulations. I see the future control falling to bankers, corporation's, and a hidden elite. It saves them the expense of keeping nations on life support.

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    1. The UN does not have power to back up governance. I can't see any world government if only because you need an energy surplus to centralize.

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    2. James, you are thinking logically. I don't think it will stop them from trying. Regional curreny anyone? How about the Amerio as a N American combine currency. And OBTW, nothing will be printed. Cash won't exist.

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    3. The UN has almost zero power without the US backing it (US military might, US weapons and troops) I don't see it doing much of anything but bickering among itself and all nations members that are part of it.

      As the saying goes a committee can't get anything done...

      The UN (since the 1960's) has been this socialist wet dream that hasn't done much. All members are too motivated by self interest to allow it to make any critical decisions that effect them.

      As far as a world currency, who knows, I tend not to worry about things I can't change.

      Chuck Findlay

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    4. I never could see the point of the UN. If it were a US proxy, the commies wouldn't have vetos, if it were a backdoor world govt. it would have more funding and power.

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    5. Robert-you of course are correct. The idiots in DC are capable of anything. But keep your paper $-the black market will use them.

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    6. You really think paper dollars will be good after our rulers force us cashless? How long? I'm really hung up on this one.

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    7. I think, pre-collapse but post-cash outlawed, the black market is going to need something for currency. As a lot are saving $ currency, why would they suddenly opt for gold or foreign currency? It isn't 100% guaranteed of course but I think the odds are very good greenbacks will still be taken by them. Good for guns and ammo, if it comes to that. Of course, if enough rebel against digital only then we have civil war and the Chinese might arm certain groups and then the dollar might not be accepted so readily. A lot of variables. I'd say, if you have your several months wages in paper dollar savings, you should be able to still get rid of it soon after the switch over. Any more than that, you are really gambling. Too long after that, same thing. If it happens, get the crap out from under the mattress, sell it on the black market to get rid of it, even at a big loss. The end of the Petro-Dollar makes this tricky as a long term gamble. As does the question of how quick before all control is lost by the feds due to gasoline shortages that follow.

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  2. Or, the other possibility is that the psychos are going to continue their pattern and go to war against anyone who rejects dollars for oil, only this time the other side has nukes, so this will be Armageddon.

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    1. It can't be ruled out. One just hopes otherwise. I can't see us surviving that, unless no one escalates. Nuclear winter, yo.

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    2. With the newest generation of Dial-a-Yield tactical tiny & "clean" bombs (low fallout when airburst) we may see some more uses of them outside of Yemen. There are targets that need a bigger bomb than the 1000 pounder barely deliverable by an FB-111 or a couple of 500's under the wing of an F-16 or A-10. They really need about 10 tons of TNT bomb, but 200 tons would be fine (as long as it's clean)but there is no possibility of sending dozens of B-52's. The problem with latest-gen atomic bombs is that they cost a FORTUNE each. Strategic nukes are pretty-guaranteed to produce losses to the target/enemy higher than the cost of building the weapon if you can get it to a built-up area or a military formation. The little bombs might be several times the cost of the building they might destroy.

      Doesn't everyone understand the economics of nuclear weapons, or just those of us who were curious kids in the 1970's?

      pdxr13

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    3. I don't think the military or the politicians are concerned with the economics of weapons. Not really. Not with multi-billion duds canceled after all is said and done. Not with ongoing occupations for unclear gains.

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    4. I think massive gamma/x-ray devices like neutron bombs from low earth orbit or super high altitude may is the direction that will be taken by those handful of nations with the technology and finances to fund it. Kill the enemy but leave their infrastructure mostly intact. Do it from high enough that air defense weapons and early warning systems are ineffective.
      And - if you are TPTB, get a couple of nations to use them in a nice big war and you manage to deal with the whole overpopulation problem, without loosing to much infrastructure, and with pre planning, much less risk to yourselves than any modestly virulent biological or chemical weapons.

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    5. Wouldn't this have already been done if viable? Like, while there is still oil to grab?

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    6. The fact they haven't is the biggest piece of evidence I have to my 'factions of PTB' theory. If there is one 'good ol' boys club of PTB they would have done this or some other similar thing. If there are competing clubs, each club will want a certain level of man power for their servants and, more importantly, cannon fodder - for fighting as proxies between the factions. Eventually the factions are going to coalesce into a handful and either agree to use the weapons against the overpopulation problem, or choose to use the weapons against each other and the other sides population (an empty china/east asia would be a HUGE boon to Russia and India and the USA, an empty India area would be a boon to China and Russia, etc, etc.
      I think all the illnesses in the third world countries are part of an experiment to effectively and untraceably depopulate those regions to allow for new colonization (like what the Europeans did to the American Native Tribes). The 'clean' orbital nukes are expensive, unreliable, and quite traceable - for now. But give weapon development enough time and $$$ and we will see them.

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    7. I think depopulation isn't far away, and natural. Wouldn't planning to ride that wave safely be a cheaper, better investment?

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  3. I don't think the military or the politicians are concerned about anything outside their own interest. The military wants their expensive toys that go boom to kill people and break things. Politicians want power over people and to keep their cushy jobs.

    Both will sell all of us down the road and kill anyone that gits in their way. They all are scum of the Earth.


    Chuck Findlay

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    1. All power positions attract scum of the earth. But, be se to vote in case that ever changes!

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    2. I didn't vote last time, don't think I'm going to do it this time. I'm getting fed up with trying to do the right thing and have it go no place. I've worked hard, done the right thing my whole life (as most of us have) and the country goes farther down the hole every day. The system is rigged and it's not going to change back.

      With 1/2 the population on government handouts and going up every day. I see it getting much worst as time goes on.

      As long as politicians can buy votes and power promising free handouts the system is going to keep going the wrong direction.

      I'm starting to agree with the Going-Galt idea and dropping out and doing and going my own way and keeping my interaction at a minimum.

      Sad to think this way, but at some point you just get tired of pushing the bolder up the hill only to have it roll back down over you. I think I read that if you add up all taxes and fees we pay (lets be honest, we don't pay, they take it at the point of a gun.) 74% of our income to government. Going-Galt starts to make sense...

      Chuck Findlay

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    3. Going Galt not only denies the Beast, it is a good survivalist strategy. A 2-fer win.

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    4. Short but excellent clip James (3:00) by George Carlin, on the truth behind the real rulers of the country. I know I'm preaching to the choir here, but I thought you might enjoy it none the less.

      Nobody cares about you (George Carlin)

      https://www.youtube.com/watch?v=Yi6XV8yBFoU

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    5. Completely agree with you Jim. Going Galt as best as you can (having an off grid domicile is a great start, raising your own food as much as practical, and being as "green" as possible, is also good. You have to pull in income to pay property taxes and for those things that don't make sense to provide yourself (clothes, medical care, etc.).

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    6. Carlin was ahead of his time and more relivent now.

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  4. you still have that hair? (from an old reader who has been busy getting screwed--and not in a pleasant way, yo!)

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I must moderate-trust me. You don't want to see what happens otherwise. Sometimes it takes awhile to respond as I only check two or three times a day. No N-Bombs, nothing to get me libeled. Otherwise, have at it. If you criticize me, make sure to praise my hair first.