Will Fracking Sink the Dollar and Bring on Global Currency?
By Staff News & Analysis - May 14, 2013

US shale energy creates global oil 'supply shock' … Booming oil production in North America brought on by the shale energy revolution has created a global "supply shock" that is reshaping the industry, the International Energy Agency said on Tuesday. Shale's inexorable rise could see the US cross over from being the world's leading importer of oil to a net exporter within the next few years. – Telegraph

Dominant Social Theme: This stuff works and ain't capitalism great?

Free-Market Analysis: We're puzzling about why fracking has been applied now by the industry when the basics of fracking have been fairly well understood since the 1940s.

We have an idea, and it is borne out of our analysis of dominant social themes … and a tip of the hat to feedbacker Hugo de Groot.

Let us set it up and then ask a larger question.

The globalist agenda evidently and obviously includes the creation of a world currency and from what we can tell, the central banking economy has been placed at the disposal of this venture.

Through endless booms and terrible busts, central banks utilize the awesome power of money creation to further centralize industrial and political power. The end result is to be a single global currency issued by a single central bank on behalf of a single economic and political system.

Perhaps the biggest sticking point to world government is the kind of money that is to be used. The IMF has suggested its SDRs and attempts are being made to broaden SDRs' utility. A state-run gold standard has also been floated.

Standing in the way of all this is the dollar itself, still the "strongest of the weakest" and the one currency that the rest of the world has to hold because Saudi Arabia will only accept dollars for oil.

Of course, the Saudis didn't decide this on their own. They were "helped" by Henry Kissinger, who flew over to Saudi Arabia in 1972 and "explained" the concept of the petrodollar.

Not surprisingly, the Saudis agreed.

The world has run on the petrodollar ever since but in the 21st century we are seeing considerable efforts to destabilize the petrodollar, mostly from the BRICs. This is a bit odd since the West emplaced its central banking system IN the BRICs. Brazil, India, Russia and especially China all received considerable help implementing their central banking economies.

And now they are using their economies to undermine the dominance of the dollar via various currency swap arrangements, etc.

We are supposed to believe a new era of dollar hostility has swept over the world. But we remember the Bush administration and how it worked hard to debase the dollar through war and vast new social programs.

The Bush administration began the downward spiral of the dollar. And then the BRICs – the systems of which had been created by the West – began to help the process along.

And now there is fracking.

Suddenly, the rest of the world has discovered what has been evident all along to free-market thinkers – that there is plenty of oil and abundant natural gas.

So far, the fracking revolution has been aimed mostly at the US but, in fact, fracking can be applied around the world. Here is more from the article excerpted above:

US shale oil will help meet most of the world's new oil needs in the next five years, even if demand rises from a pick-up in the global economy, said the agency in its five-year outlook for the oil market.

The "steeper than expected" rise in supply from North America constitutes a "game changer", said Maria van der Hoeven, IEA executive director, as she contrasted it with stalling oil production in some traditional export markets such as Iran.

"North America has set off a supply shock that is sending ripples throughout the world," she said.

We won't go into the dozens of articles we have written over the years predicting just this very thing – that Peak Oil was just another phony concept created by the same globalist think tanks that have brought us global warming and other scarcity memes.

But here is the crux issue brought to us courtesy of Pacific Standard magazine:

The Deluge … Rapidly advancing technologies are opening up astonishing sources of oil and gas all over the world. We are entering a new era of fossil fuels that is reshaping global economics and politics—and the planet …

Right now, the map of who sells and who buys oil and natural gas is being radically redrawn. Just a few years ago, imported oil made up nearly two-thirds of the United States' annual consumption; now it's less than half. Within a decade, the U.S. is expected to overtake Saudi Arabia and Russia to regain its title as the world's top energy producer.

Countries that have never had an energy industry worth mentioning are on the brink of becoming major players, while established fossil fuel powerhouses are facing challenges to their dominance. We are witnessing a shift that heralds major new opportunities—and dangers—for individual nations, international politics and economics, and the planet.

Larger question: You see where all this is leading?

Bear in mind that fracking technologies have been around since the 1940s and then ask why it is suddenly being applied now around the world.

If oil is, in fact, suddenly plentiful again then there will be far less reason to hold dollars to buy Saudi oil. The whole basis of the dollar reserve system will be gradually undermined.

And even if what we have sketched out above is mere coincidence, the conclusions might still be the same: The petrodollar is in trouble and the fracking revolution may aggravate its illnesses considerably.

The economic system we have lived under for close to a century is ending. What comes next is unclear, especially given the difficulties that what we call the Internet Reformation is causing the powers-that-be.

After Thoughts

But if this analysis is correct, we would bet whatever comes next will tend to support even more globalism and even a global currency.