Quote Originally Posted by Sanlmar View Post
Quote Originally Posted by Kalam View Post

This seems like one of those things people say without really thinking very hard about how things could have actually gone differently, and been much worse. Who knows how shitty the world would be right now if we hadn't gotten involved in the ME and created the petro dollar. The first half of the 20th century was pretty brutal, and all else being equal the 70 years since have been relatively quiet and prosperous and peaceful. Maybe we should be giving ourselves a pat on the back for that, and not just assuming everything wrong in the world, especially the Middle East, is our fault and would have been better if we hadn't gotten involved.
As I said, the petrodollar is of particular interest to me. I think we have different understanding of what the term “petrodollar” means.

I promise I will engage you in this discussion.
I love the petrodollar so much I want to write the epic post it deserves. I think you and I had a moment Kalam and I don’t want to let the fire extinguish.

The petrodollar was just a construct negotiated with the Saudi’s in like ‘73 by Kissinger and the Nixon crew after we decoupled the dollar from gold.

The story goes that the US (Kissinger) told the Shah (CIA’s boy) to raise the price of oil 4x. The Shah wanted to know why. The US needed a vehicle large enough to back the dollar.

We could now just print dollars to pay for oil - others could not. Treasuries were god to store dollars until other counties needed to buy oil. We had willing US bond buyers.

The price of oil stayed pretty stable for 30 years. We could print dollars (treasuries) at will. When the oil price rose the Fed would raise rates to keep things in parity. The world could rely on the stable dollar and that coupling. Oil rose in a huge way outside of acceptable bands (Yom Kippur War mid 70’s) and Volker raised rates in a way that pained Americans (AND JIMMY CARTER - see how things have converged in a lovely fashion?) but it was important to maintain the integrity of the dollar WORLDWIDE.

When we had our little banking troubles in 2008 we didn’t tend to the dollar worldwide and instead focused on saving America. The petrodollar’s death was hinted at.

I expected to write a sentence or two but it all comes tumbling out.

Oil will always be available to anyone who wants to pay for it. Peak energy is in the rear view mirror and demand by China, India and even the producers is rising.

Recently, for reasons that include Binden’s economic sanctions and the realization any country can get sanctioned too, there is a practical move by oil importers (China yuan) to seek to pay for oil in other currencies. They can sell their treasuries now.

Again, all oil producing nations (scumbags or not) will sell to whoever can pay. Don’t need to go to war in the Middle East unless YOU want to be the driller. Standard Oil a name from the past