News & Analysis
Is the Age of the PetroDollar Over?
U.S. to Overtake Saudi Arabia, Russia as World's Top Energy Producer ... Oil derricks like this one ... are part of a shale oil boom that has helped put the United States on track to overtake Saudi Arabia as the world's leading oil producer. In an indication of how "fracking" is reshaping the global energy picture, the International Energy Agency today projected that the United States will overtake Saudi Arabia as the world's largest oil producer by 2017 ... – National Geographic
Dominant Social Theme: What a surprise. The US has oil!
Free-Market Analysis: For some ten years now, we've been writing that Peak Oil was a power elite dominant social theme and that the idea of oil scarcity was fraud.
Well ... surprise, surprise. Turns out the West – particularly the US – is just brimming with oil. Of course, this is no surprise to us. Heck, we think oil is abiotic, at least partially, cast up by geological processes. If we had to guess, we'd say oil is one of the most plentiful resources on the planet. It ranks right up there with food and water.
That's right. Food and water are plentiful, too! But it's power elite propaganda – their damnable efforts to scare people into thinking that the basic building blocks of life are scarce – that takes its toll on people's certainty and comprehension of the truth. Mission accomplished. Here's more from the article:
Within just three years, the United States will unseat Russia as the largest producer of natural gas. Both results would have been unthinkable even a few short years ago, but the future geography of supply has shifted dramatically due to what IEA calls America's "energy renaissance." The revival can be credited to controversial technologies such as hydraulic fracturing of shale and deepwater production that have enabled the industry to tap into abundant, unconventional sources of natural gas and oil. As a result, new energy frontiers have opened in Pennsylvania and North Dakota. (Related: " Natural Gas Stirs Hope and Fear in Pennsylvania")
The bottom line for the United States is fulfillment of a goal that eluded seven presidents over nearly four decades: energy independence. The U.S., which imports 20 percent of its total energy now, will become largely self-sufficient by 2035, concluded the IEA's annual World Energy Outlook, often viewed as the bible of the industry.
Add in Canada, which has its own unconventional production boom in Alberta's oil sands, and the continent is set to be a net oil exporter by 2030. (Related Quiz: "What You Don't Know About World Energy") "North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world," said Maria van der Hoeven, executive director of the IEA, a Paris-based organization charged with maintaining global energy security. It all has happened so swiftly that world governments have not yet adjusted to the new realities, observers say ...
According to IEA, by 2020, America's oil production will reach 11.1 million barrels per day, up from 8.1 million in 2011. Saudi Arabia's production, meanwhile, will decline from 11.1 million to 10.6 million barrels per day. By 2025, IEA projects, U.S. production will slip back to 10.9 million barrels per day, but Saudi Arabia's will have increased to only 10.8 million barrels per day.
The article goes on to say that the picture on natural gas "is even more dramatic." (But we knew that.) One of the Forbes brothers of publishing fame recently estimated there was enough oil and gas in the US to last 1,000 years. A far cry from the doomsday wails emanating from the Peak Oil choir.
As a publication that deals with elite dominant social theme, the Daily Bell has a larger question: Is Saudi Arabia being phased out as a prime accomplice of Western Money Power? A deal made back in 1971 between the US and the Saud family cemented the petrodollar, as you know. It surely went something like this:
US: We promise not to kill you if you are willing to accept ONLY dollars for oil.
Saud family (in unison): Yes, Great Satan. Absolutely.
As an added bonus, the Sauds got to spread fundamentalist Islam via Wahhabism around the Middle East. This was preparatory to a religious war that the West wants to encourage.
Which brings us back to our main point. The Middle East is going up in flames thanks to the undermining of secular democracies by the CIA and US State Department. It is possible that the powers-that-be anticipate further destabilization in the Middle East and are shifting the gravity of oil production westward.
This would have the added benefit of blunting China's and Russia's moves to trade their own currencies for oil instead of dollars. But most importantly, it seems to us that the petro-dollar itself could be diminished. This plays into the larger idea that the power elite behind what we call "directed history" is now apparently trying to set up some sort of global currency.
We're not sure how all this will play out (feedbacks solicited!) but we note this story (excerpted above) has appeared in one of the elite's primary US mouthpieces, National Geographic. We look for these sorts of turning points as a publication that covers dominant social themes.
Again, we're not certain what it portends. But a lot of elite memes are in flux these days (some thanks to what we call the Internet Reformation) and Peak Oil and the petro-dollar could be among them.
Conclusion: Often the import of these shifts is not apparent right away. You have to analyze the promotions on an ongoing basis to see what's really taking place. But if we're correct, there will be lots more to come on this front – with requisite investment opportunities, as well, for those who follow along closely.
Posted by Danny B on 11/17/12 07:07 PM
Good article on the petro dollar.
Posted by Wrusssr on 11/17/12 02:58 AM
Another accurate article, DB. On all points, IMO.
The banker-generated global depression set-up World War II and their own central banks funded all participants as well as America's industry via their Wall Street confederates; the U.S. supplying the war machinery, provisions, and munitions for the allies in return for payments in gold.
By one count, some 70% (+) of the world's gold wound up in America after WWII.
Following Bretton Woods, the US dollar-immune to inflation and then referred to as 'good as gold'-was printed and exported worldwide to be used to grab war-weary nations by the economic short hairs. This, some have argued, was the beginning by the bankers' to launch world monetary, resource, and economic consolidation.
A few decades later, the world's vaults were bulging with dollars; the US having sent/spent more dollars abroad than at home.
Today, analysts pretty much agree that outside the US, of the savings, or reserves, of all other countries-in gold and all currencies-that 66% of this total wealth is in US dollars.
In 1971 several countries, including France, simultaneously tried to sell portions of their dollars back to the US for gold.
Visions of dollar-laden airplanes showing up in America to exchange for gold probably danced in banker heads.
The U.S. gold window slammed shut in 1971.
A default of sorts.
The bankers now had to find a way for the rest of the world to believe in the dollar's strength.
Their solution was the 'petrodollar.' It would be the only 'authorized' medium of exchange for oil; the international banking cabal having 'convinced' Saudi Arabia and OPEC to sell oil for dollars only.
All other countries had to keep dollars in their vaults to buy oil. This enabled the US to buy oil inflation-free.
Oil replaced gold as the dollar's foundation.
The fed owned the dollar's printing presses and allowed the government to keep its import tariffs up. The London bankers, relying still, on the U.S. military in case anyone got out of line globally.
More vaults were built worldwide to hold US dollars.
Until the last decade when the bankers decided-strategically-to divvy up America's pie.
So the euro was established in late 1999 with themselves in charge of that, too.
A few months after the euro was launched, Saddam's Iraq announced it would sell oil in euros -breaking the OPEC 'agreement.'
Iran , Russia , Venezuela , and Libya all began talking openly of switching to euros for oil. Libya talked openly of selling it for gold.
The world's reserve currency was under attack. What's a 'free' market to do?
Unbeknownst to Americans, war preparations to invade Iraq had begun years prior.
Iraq began selling oil in euros in 2000.
9/11 occurred in 2001.
In 2002, Iraq began exchanging petrodollars for euros.
In 2003 the U.S. invaded Iraq; bombing and irradiating the country with ordinance made with depleted uranium.
The world watched as the 'petro-wars' got underway.
The US secured Iraq's oil ministry records and buildings-the only government buildings in Baghdad not bombed-first.
Wolfowitz dismantled Iraq's infrastructure, made 100 on-the-spot decrees for the 'victor' that included. (1) all prior oil contracts null and void, (2) that only genetically modified seeds could now be planted by Iraqi farmers, and (3) that Iraq's central bank would be turned over to London bankers.
The first sale of Iraqi oil that followed was in petrodollars.
In early 2003, Hugo Chavez, President of Venezuela, talked openly of selling half of its oil in euros (the U.S. was purchasing the other half)
On April 12, 2003, US-supported business leaders in Venezuela and some generals there attempted a coup.
The coup failed.
Iran opened its own oil bourse in 2011 and began selling oil through its global trading center in euros.
Bad news for the dollar and banks holding them.
Previously, almost all the world's oil was sold on either the NYMEX, New York Mercantile Exchange, or the IPE, London's International Petroleum Exchange.
A logical buy for Europe and its euros which bought 70% of Iran 's oil. And Russia, which sells 66% of its oil to Europe. China, India, Japan, Chavez; all thumbs up.
Perhaps the Middle East thing is not about oil per se, but about what's left of the dollar.
If there is a 'surgical' deja-vu strike on Iran's 'weapons of mass destruction', don't bet against a certain oil exchange not being bombed.
Countries, meanwhile, look for places to unload dollars.
Problem: There are no buyers because everyone else is trying to unload dollars. And five percent of the world's dollars, some say, is about all the U.S. can accept without walking the financial plank. Same problem for other economies.
So what will happen? Financial chaos, probably.
Ummm, let's see. Looking at the situation as it is now, a few chips on a banker re-run of a 1929 might not be a bad bet.
World seems pushed toward the new currency thing and world 'government' run by unelected bankers; them riding in to 'rescue' the world from the financial miseries they so deftly set in motion again. Fits their one world agenda and appointed government with themselves in charge while a huge portion of cash-strapped, bleary-eyed, humanity looks on.
Big Banking: It's a wonderful occupation if you don't mind trashing, stealing, inflicting misery on people for gain.
China has been buying gold and silver like a drunk sailor over the past few years and, some think, is the number one holder of gold in the world now.
Russia is traveling down that same road. Along with 150 central banks the London bankers own in the world's strategic nations that control the currencies in those nations; including the U.S.
But, not to worry. Helicopter Ben said gold isn't money.
Can the U.S. find a way to pay for-account for-every dollar stuffed in the world's vaults?
Only the Shadow knows.
Bombing Iran could backfire and bring Iran openly into war and resurrect Iraq's Shiite majority squarely behind theirs. A Shiite-squared war, so to speak.
And a Shiite draw would unite the second and third largest oilfields in the Middle East.
Have you noticed what, at this point, appears to be the beginnings of a Mexican stand-off in Syria?
World problems like these swim in the heads of humane bankers. It's their aphrodisiac and serotonin rush; a titillating game-especially when you control all the dollars and information doled to the public.
The puppets await their string-tugs.
The bankers appear to wrestle with their dilemma.
An Iranian Oil Bourse hums in the Persian Gulf.
Is this exciting or what?
The Proposed Iranian Oil Bourse (Krassimir Petrov, Jan 2006)
Click to view link
Petrodollar Became the Essential Basis for the US Economic Hegemoney in the 1970s. (Bulent Gokay, Keele University, May 2006)
Click to view link
Iran Opens Oil Bourse
Iran Opens Oil Bourse - Harbinger of Trouble for New York and ...
Why the Dollar Bubble is about to burst (Steve Masterson, London, May 2006)
Click to view link
Oil Currency and the war on Iraq (Cóilín Nunan, Scotland, Dec 2004)
Click to view link
Posted by memewatchers.com on 11/15/12 03:22 PM
Could be western monetary power is starting to panic at how fast the economy is collasping and has decided to cut open the mattress to get at their emergency stash. We will know the s--t has really hit the fan if we start reading about the US opening the pipelines from Alaska. They are saving that for themselves after the real collaspe.
As to Saudi and company getting left behind, well I am sure everyone knew that was the plan from the beginning. The puppeteers are cutting the strings one puppet at a time in the middle east.
The petrodollar has always been meant to fail as the world currency, and from recent memes in the news (Obama and Gore) it looks like they are trying to resurrect their currency of choice Carbon Currency. These guys are stubborn.
Reply from The Daily Bell
The puppeteers are cutting the strings one puppet at a time in the middle east.
This is our perception as well ... Even Jordan, perhaps ...
Posted by speedygonzales on 11/15/12 09:28 AM
Reason why the Roman Empire fell - Barbarian Knowledge of Roman Military Tactics.
1700 hundred yers later, with great thanks to internet reformation-in 10 years turned system of elites upside down, Barbarians learned tactix of The Empire of The City and they attack on the same platform from outside and inside empire. American economy stands on cheap gas at pump, compare to EU for example. If the price of gas will double, as is in EU, economy will colapse. Just attacking Iran EU and US will fell down due oil crisis. So. If elites used emergency plan-domestic oil-to save their status quo it is sign of the times.
Is also known, that Venezuela alone has more oil than Saudi Arabia and there is lots of oil in Africa and Madagascar as well.
Reason why the Roman Empire fell - Failing Economy.Unemployment of the Working Classes.Slave Labor. Constant Wars and Heavy Military Spending.The 'Mob' and the cost of the 'Games'.Decline in Ethics and Values.Natural Click to view linkristianity.
Click to view link
This is a sign, that establishment is in serious troubles.
Posted by Joe on 11/15/12 05:10 AM
I heard about the huge untapped energy resources in North America about 15 years ago. This was known decades ago by the PTB. Oil prices cannot be allowed to fall by over supply, artificial scarcity builds up the power of the ruling elites. They indirectly own Saudi, Iraq and nearly all of the oil producers... the oil cartel. The money cartel and the oil cartel are one.
Posted by finninsweden on 11/15/12 01:28 AM
"This would have the added benefit of blunting China's and Russia's moves to trade their own currencies for oil instead of dollars."
Well, if that is true,then one must conclude that the elites in east and west are not in bed together? I mean this is the one question I have been asking myself many times,and if I have understood The Daily Bell correctly,this has been your take also. (That the elites in east and west do cooperate) Or am I wrong?
Reply from The Daily Bell
It gets harder and harder to write for this audience. Yes on its surface this would seem to be a contradiction. But what we didn't go into was that all of this - geopolitical and monetary tensions - are in a sense orchestrated from what we can tell. Thus US moves to counteract China and Russia are necessary to what we call "directed history." They are part of a larger pageant and are necessary drivers of the bigger performance. Remember, "all the world's a stage ...."
Posted by DarbyJie on 11/14/12 09:54 PM
Posted by W.Palmer on 11/14/12 09:17 PM
All this oil, all this gas. All this talk about CO2 and greenhouse gasses and Global Warming. What are they going to do with all this stuff if the "hair shirts" wont let us burn it.
I think we must ready ourselves now for some "official" dissemblance on the problems that have been ingrained about a warming planet due to mans use of fossil fuels... . And all these Carbon Credits that have been dutifully paid to stop the ice melting? Has the ice stopped melting now? I am sure it will.
And there is the yearly bun fest of "Global Warmists", people who meet to agree on agreements to agree on agreements to agree. Maybe now they will agree on agreements to agree, and agree on all agreements.
What a relief...
Posted by laceja on 11/14/12 05:05 PM
About 60 years or so ago, the Saudis were fearsome folks. The pictures of an Arab "terrorist" cutting off the head of an American used to be everyday practice in Saudi Arabia. The "Old King" was a blood thirsty warrior, who conquered all the other tribes of the peninsula. He unceremoniously whacked off the heads of all, who disagreed with him. But, after WWII, the US started figured out the "old King" was also very lazy. That's when the first oil deal was struck with the Saudis. The idea was to use the vanity of old King Saud to enslave him and his people. Basically, the PTB of the middle east took the bait. By flooding them with easy money, the "royal family" became soft and compliant, which has allowed the west to pit one against the other. Of course, it didn't hurt that Israel was created, so all the Muslims would have something to pin their anger on.
Unfortunately, a few, like Saddam Hussein and the Khomeini, proved to have egos equal to the PTB in the west. Enter the need to create as much chaos in the middle east as possible. The PTB of the west are no match for the PTB of the middle east, so the only solution is to have them start shooting at each other... Or, at least make it look that way.
The net of it is, even the PTB of the west need to have energy to support their plan. But, they would very much like to have "just enough" and not so much that we all become truly independent. It's kind of a conundrum for them. Give us all too much cheap energy and we will become successful, again. If we start becoming too successful, we will begin to demand more of that freedom they've so successfully removed from our individual rights. Global warming provides a good way for them to limit the amount, or at least raise the cost to prohibitively high levels, so we don't get too energetic, so to speak.
Anyway, that's my perspective.
Posted by Danny B on 11/14/12 04:23 PM
Dear Bell, I found some interesting information regarding our exorbitant privilege.
"It appears that earnings rose almost fourteen-fold while costs rose six-fold. Thus 'real' earnings increased despite the depreciating dollar. Here is a chart of real household income, courtesy of Click to view link."
"Here we see income disparity at work. Lower-income workers saw their real (adjusted) earnings rise by about 20%, middle-class employees registered gains of around 40%, while the top 20% realized gains of about 70%. The top 5% has seen real income almost double."
The article makes an interesting claim that America has done pretty well in spite of all the dollar printing.
Click to view link
Posted by Hugo_de_Groot on 11/14/12 02:57 PM
Here is proof that the USA paid (partially) gold for oil. They were called golddisks to not make it look monetary.
'In the 1950's, numismatists were puzzled by these 'discs' until-in 1957 - the story emerged in The Numismatist. Aramco, required to pay royalties and other payments in gold to the Saudi government, could not obtain the gold at the monetary price fixed by the United States so the U. S. government specifically began to mint the 'discs' - actually bullion in coin form for these payments. In 1945, for example, the mint turned out 91,210 large discs worth $20, and, in 1947,121,364 small discs worth $5, according to The Numismatist.'
Click to view link
It was Kissinger who brokered the deal with the Saudi to form the petro dollar. The Europeans wanted to reprice gold. From Kissinger - Ender minutes back then.
'Mr. Enders: It's against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings-about 11 billion-a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We've been trying to get away from that into a system in which we can control-'
The USA didnt. So went to create the petrol dollar.
'Mr. Enders: Yes. The Arabs have shown no great interest in gold.
Secretary Kissinger: We could stick them with a lot of gold.'
Click to view link
There it seems mr Enders was quite wrong. Here a piece on how the SA monetary system works and why gold is important for them.
Click to view link
Part of the reason why the ECB marks their gold to market unlike the USA.
Posted by dimitri on 11/14/12 02:16 PM
Environmentalists are going to be tested good and hard. An Oil Addicts Anonymous chapter is not likely to form in your neighborhood over several generations to come. National Geographic will continue disseminating beautiful images of the oil industry's depredations over the entire planet.
Posted by mava on 11/14/12 01:45 PM
DB: You are reading my mind! I was just wondering the same thing yesterday as I was listening to the news.
My first thought would be that no, they can't prevent anyone else in oil exports from helping to advance their currency, and besides, this production is going to be for the US.
I think to answer this riddle we have to look a bit into the future. This is when the dollar is collapsing and the oil producers demand more and more of the dollars to pay for the oil, or even demand to pay in other currencies. This, of course, the US will not be able to do. If it tries, this will be a repeat of the Weimar situation.
So, first things first, where are we going to get the oil?
-This is why the government had been aggressively pushing all the green initiatives.
-The oil has to be supplied by domestic production, - we wouldn't be able to afford any imports if we had to actually pay for them.
Thus, this sudden emphasis on domestic oil is simply a preparation for post-collapse years.
But, it is still a question of whether the US be able to support it's own economy on domestic oil. Early reports of glorious victories are not the same as cold hard facts. US may end up not being able to fully supply itself, despite the proclamations.
I have posted before with regards to the master plan, which answers the question of why is US involved in all the conflicts, - to try to make sure that whoever is the future puppet, he goes along with demanding dollars for the oil. If this is not insured, then the US will be (inflating) printing dollars only for the domestic economy, and that is going to be felt, big time.
Conclusion: This domestic production would ruin the petrodollar, and with it, it would mean the end of the American largess. Thus, the only place for this is in a "Plan B", where the petrodollar is finished anyway, and now it is a question of simply survival.
Posted by Hugh on 11/14/12 01:25 PM
The extent to which money power will go to suppress "free energy" or nearly free alternative energy technologies that are in various stages of developement or already in the pipeline makes me shudder.
Competing cabal factions may already be at war over the control and implementation (how to stick a meter on it; ask Tesla about that aspect) of these inovations. The internet reformation may prevent money power from getting ahead of the curve on this revelation.
Click to view link