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Wow-someone admiring Henry "Lucifer" Kissinger? It doesn't get more evil than that. The petrodollar system is good for the privately owned and controlled Federal Reserve and their assortment of favorite banks and nationless corporations. Americans are being left behind. Kissinger is only good for inflated military budgets, invading sovereign nations and murdering innocents by the Millions.
I agree concerning the poll, this is not a yes or no situation. Oil prices this low over a long period will undermine the dollar. As the reserve currency used in the international oil trade, the dollar is indirectly backed by oil, where higher oil prices (but not too high) creates demand for the dollar. OPEC countries that use the petrodollar system for military protection, such as Saudi Arabia, invest some of their profits back into the US economy by buying debt securities and other US products. From the Saudi point of view, the military protection angle is the only thing keeping them in the game, they sell most of their oil to China, the Saudi's don't really have any money to invest in the US anymore while prices are low, and those US securities have not been paying off like they used to, which is related to the '08 crash and US budget deficit problems.
Back in the Desert Storm days when the US bought most of Saudi Oil, the US did give Saudi Arabia military protection from Saddam, and the Saudi's kept the price of oil low for some 10 years afterwards, in appreciation for those efforts by George HW Bush. Now with the Iranian situation and Obama, you have to believe the Saudi's are doing some hard thinking, and OPEC follows the lead of Saudi Arabia for the most part. At this point, the only thing keeping the whole system from unraveling is US military power, protection from the US if Iran goes to war with the Saudi's.
The petrodollar system is brilliant from the US perspective, it works much better than the old Bretton Woods gold backed system did, as it gives more advantage to the US economy. The system was invented by some of the most brilliant minds of the modern era, Dr.Henry Kissinger and Richard Nixon. The system is very resilient, having survived the massive inflation of the late 70's, and massive budget deficits of the Reagan, Bush2 and Obama administrations. But the system can only take so much abuse, we have to STOP borrowing money and balance the budget at home, and make the dollar strong. The massive OMNI-BUS (or whatever that monster was called) spending bill passed by congress in December was dumb, we should not be spending like that while we are still borrowing money.
When GM and Chrysler looked like they might fail in 2008, the same people with so much concern about the oil industry said "let the auto manufacturers fail." I remember it like it was yesterday. In fact, they WANTED it to fail so that the UAW could be busted. There was no concern about the workers, who were accused of being overpaid.
My grandfather was a retiree of GM and I grew up in Michigan so ya, I get it to an extent. However GM and Chrysler weren't directly tied to economic growth or slow down like oil. One of the top reasons contributing to the drops in stocks is the price of oil. Global economic instability doesn't really benefit anyone in the long run.
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But now, we're all supposed to be bleeding hearts for oilfield workers.
I don't expect anyone's heart to bleed for me. I do wish consumers would see past the tip of their noses to realize that prolonged oil prices typically lead to larger market crashes and an unstable economy. I don't want to see anyone paying exorbitant prices at the pump but I'd also like American energy to remain on the market and not get buried by the Saudi's.
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I hate to see anyone lose their jobs, but something tells me that 90% of those guys are right leaning so SURELY they believe in the free market and wouldn't dream of the government stepping in to grant a floor price on a barrel of oil. That would be socialism and government meddling....something they normally hate.
Right?
I'm a socialist. Also, one of the big players in oil is massively socialist (Statoil). I'm sure your statistic is entirely made up and I'm also sure that many of them don't entirely understand the concept of socialism. Either way it doesn't really matter. What's best for everyone is a stable market that is affordable at the pump and still profitable at the well. It's doable but not likely to happen.
I don't get it. People are acting as if the oil companies were dropping duffel bags of money off at their houses during the boom.
I don't complain when oil prices are too high, but like any normal consumer, why should I WANT to pay more in order to protect one industry?
No way.
Solely from the perspective of you as a consumer, you shouldn't. But as shocking as this may sound, everything is not all about you.
There are millions of people that are employed in this industry and the extremely fast decline in prices has been engineered by the Saudis to wipe out a substantial segment of this industry all so that the Saudis can have more control over it. These kinds of rapid and extreme swings in oil prices are extremely disruptive and harmful to many people. And that is a bad thing, even if it is not directly impactful on you personally.
Solely from the perspective of you as a consumer, you shouldn't. But as shocking as this may sound, everything is not all about you.
There are millions of people that are employed in this industry and the extremely fast decline in prices has been engineered by the Saudis to wipe out a substantial segment of this industry all so that the Saudis can have more control over it. These kinds of rapid and extreme swings in oil prices are extremely disruptive and harmful to many people. And that is a bad thing, even if it is not directly impactful on you personally.
The Saudi's aren't producing more oil now than when it was $140 a barrel. Our government is more responsible for the wild swings than the Saudi's.
now if people really looked at the price of gasoline, and saw how much of each gallon is tax, they would stop hounding oil companies for making a small profit and start blaming the state and federal government for the taxes paid on each gallon of gasoline.
I can remember when about 1/3 of the price of gasoline was taxes. Now federal taxes about 10%. Add local taxes still below 20%. Time to raise the tax and rebuild roads? Politically impossible. Plus vehicles running on alternate fuel don't pay it. Note in some countries it's over 50%.
When the price was first dropping Saudi officials didn't even hide that they were trying to remove American oil from the market.
Which doesn't change what I said. It's not up to the Saudi's to protect our businesses. They are not pumping more than when oil was at $140.
The problem is the wild swings which had little to do with the fundamentals of the markets. Oil needs removed as a financial commodity. Only end users should be bidding on it just like it was for years where the prices remained relatively stable.
Which doesn't change what I said. It's not up to the Saudi's to protect our businesses. They are not pumping more than when oil was at $140.
The problem is the wild swings which had little to do with the fundamentals of the markets. Oil needs removed as a financial commodity. Only end users should be bidding on it just like it was for years where the prices remained relatively stable.
This chart clearly shows that Saudi Arabia has in fact ramped up production throughout the price drop.
This article clearly shows that they're doing so because they want to remove American oil from the markets. This also points out that they upped their production over when the price of oil was higher.
Are end users willing to pay the amount needed to make drilling oil in the US profitable for those who do the drilling? Most experts agree that a $65-$70 a barrel price would make drilling worthwhile in the US, it would obviously lead to an increase in the price at the pump but it wouldn't be nearly as bad as it once had been. I'm all for a stable market, but I'm also for utilizing our own resources instead of supporting Saudi Arabia.
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