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PeakTrader said...

The U.S. is forced to employ more resources for commodities that required fewer resources before.

However, it was inevitable.

Advances in technology alone will not replace oil depletion fast enough.

Even adding slower economic growth and slower population growth, world oil production will likely fall over the next 10 years.

We'll need to run much faster just to stay in place, which the charts are beginning to reflect.

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The "misunderestimated" president not only freed the Iraqi people, he had the vision to free-up a huge amount of cheap oil:

IMF skeptical of Iraq oil targets
Mar 28, 2011

The IMF said infrastructure constraints were likely to prevent Iraq from boosting production from 2.5 million barrels a day now to its goal of 13 million barrels a day by 2017.

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Iraq’s oil production capacity is forecast to increase sharply over next five years
20 December 2011

Crude oil production capacity in Iraq is set to increase by 1.87 million barrels per day (mb/d) between 2010 and 2016, according to the International Energy Agency’s latest Oil Market Report (OMR).

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PeakTrader said...

And those concerned about costs, I've explained before how the "world order" is structured to where the U.S. can consume up to $800 billion a year more than produce in exchange for U.S. military protection.

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The World’s Reserve Currency
October 3, 2007

A reserve currency is money that’s held by many countries as their foreign exchange reserves.

It’s also the currency that’s typically used to price commodities, such as oil and gold, that are traded between countries.

A country whose currency is the predominant reserve currency benefits tremendously.

In the case of the dollar, the U.S. benefits from the increased demand for the dollar that the reserve currency status creates.

Other countries give the U.S. valuable goods in exchange for dollars issued by the Federal Reserve.

They also lend the dollars they’ve accumulated back to the U.S. at low interest rates.

Most significantly, the U.S. benefits from importing these goods and exporting its inflation to other countries in the form of depreciating dollars.

http://moneygirl.quickanddirtytips.com/money-currency.aspx

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The Chinese aren't too happy with the "world order:"

U.S. has plundered world wealth with dollar: China paper
Oct 24, 2008

Plunder: to rob of goods or valuables by open force, as in war; despoil, or fleece; to take wrongfully, as by pillage, robbery, or fraud; loot.

BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said.

"The grim reality has led people, amidst the panic, to realize that the United States has used the U.S. dollar's hegemony to plunder the world's wealth," said the commentator, Shi Jianxun, a professor at Shanghai's Tongji University.

Shi, who has before been strident in his criticism of the U.S., said other countries had lost vast amounts of wealth because of the financial crisis, while Washington's sole concern had been protecting its own interests.

Shi suggested that all trade between Europe and Asia should be settled in euros, pounds, yen and yuan, though he did not explain how the Chinese currency could play such a role since it is not convertible on the capital account.

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PeakTrader said...

It's hard to believe most Americans want four more years of this, even if the country could afford it.