[DantesPeak]

Seems like the Chinese realize that the US financial system is a house of cards. But let's not forget that it is the Chinese, at least up until today, that supported the dollar more than any other country. After today it is forever changes.

See my comments in the Current Events forum for more about the renminbi revaluation:


China Revalues Yuan

[Petrodollar]

Dantes Peak,
I agree that the weighting of the dollar is the principle issue that I am interested in, as it could have a major impact. The Chinese may do a 33/33/33% split, dollar/euro/yen, but that's just a guess at the moment based on nuanced statements over the past year.

One note, it is the Japanese, not the Chinese, who have lent the most support to the US dollar (going back to Oct 1987 when the US stock exchange took a percipitious dive...). I think Japan is currently sitting on top of $800+ billion in US assets, T-bills and other dollar denominated assets, with China in 2nd place around $650 billion (these figures are from early 2005, and may have changed slightly this spring/summer. - total of $1.5+ Trillion...scary)

Anyhow, the Japanese basically sort of saved the dollar and provided a steady slide before and after the 2003 Iraq War, by doubling their holdings of US paper - but - in 2004 they "cried Uncle," and now Japan Inc simply does not have enough capital or risk tolerance to keep proping it up. China has stepped into the fray slightly, but as can be seen with yesterday's re-valuation, even they too can only withstand so much risk...

(I should note that the EU and even Canada has dumped much of their dollars..seems that Japan, the EU/ECB, BIS and IMF have all rendered rather scathing criticism for the GWB administration's "economic" & tax policies from 2002-2005. We can now add China to that list - albeit they are much more subtle by delinking/divorcing themselves from the yuan-dollar marriage.)

Well, I need to work on that 500 word editorial, but it likely takes 5,000 words to fully articulate the various movements re currency and energy issues...

[wilburke_gst1]

I have bought the book, I'm only half-way through the text, but I can already make the following recommendation:

Buy this book!

I've spent the past year devouring every book on Peak Oil I can get my hands on and relentlessly plowing through the massive amounts of web information, but I find that I am learning something new on practically every page. This is the next "must read", covering a subject that has needed such a serious analysis. Kudos, William Clark.

[wilburke]

As to the above quote, I didn't realize I wasn't properly logged in. I now take full responsibility for praising Mr. Clark's book.

[Petrodollar]

wilburke,
Wow, thank you very much for the kind words regarding my book. It pleases me greatly that you have apparently "devoured" every book on Peak Oil that you can find, and yet, still found my humble book informative.

Naturally, I welcome comments and crtiques regarding Petrodollar Warfare, and thus I have a question for you: What particular information or chapter did you find most interesting? I'm quite curious.

Thanks again for the very kind remarks, and I hope you find the 2nd half of the book as interesting as the 1st half...

[EnviroEngr]

$this->bbcode_second_pass_quote('Petrodollar', 'D')antesPeak,
<snip>

BTW, I think this board is going to ask me to write an editorial, etc. (They seem to be quite interested in hearing more about my research)

[Petrodollar]

Enviro Eng,
Well, I attempted to write a 500 word essay, but unfortunately I am not gifted enough to condense my thesis that succintly (while including info regarding current events).

So, I took a 3,000 word essay I wrote at the beginning of Aug 05, and condensed it down to about 1,500 words. Is that length acceptable? Please advise, thanks!
-William

[EnviroEngr]

$this->bbcode_second_pass_quote('Petrodollar', 'E')nviro Eng,
Well, I attempted to write a 500 word essay, but unfortunately I am not gifted enough to condense my thesis that succintly (while including info regarding current events).

So, I took a 3,000 word essay I wrote at the beginning of Aug 05, and condensed it down to about 1,500 words. Is that length acceptable? Please advise, thanks!
-William

[EnviroEngr]

Petro,

I think we're nearing the Ready mark with posting editorials. Haven't seen anything yet by way of email...

--- and, have book - will read. Thanks.

[julianj]

This is a bit odd - I posted the below material about a week ago, but it never appeared, (or perhaps got lost in the server upgrade) so here it is again:

I have been reading Clark's work for some time and it is excellent.

So I'm pleased to have him in our community. Welcome!

Firstly, I think someone should post a reader review on Amazon.com,

when I last looked the book didn't have any, poor thing....



Secondly, could anyone advise me of a bookshop that doesn't charge a large amount of shipping for the US>UK? I tried Amazon, and the costs were too high, but I want to get this book asap. William, when's it out in the UK?

[Petrodollar_gst1]

julianj,

Thanks for the kind words. The book is not yet avialable in the UK, so you will have to buy from amazon.com, or directly from the publisher. Here's the link if interested: http://www.newsociety.com/bookid/3877

There are now 2 reviews on amazon.com, but the most thorough and detailed review was recently found on an unexpected website: Palestine Chronicle. Jim Miles does their book reviews, and I am grateful for his kind words re Petrodollar Warfare. I corrected one minor sentence in the 9th paragraph (my edit is in brackets [ ]). Anyhow, here's the full review for those interested in my little magnum opus:

http://new.palestinechronicle.com/story ... 0523163568


Petrodollar Warfare: Book Review

"As an explanation of economic forces around the globe today, Clark’s writing is clear and effective.."

Petrodollar Warfare – Oil, Iraq and the Future of the Dollar, William R. Clark. New Society Publishers, Gabriola Island, Canada. 2005. 265 p.

Reviewed by Jim Miles
PalestineChronicle.com

The average consumer of oil, if they read the newspapers, will understand that the world’s oil supply is currently being processed at peak capacity and that current infrastructures are running full out to meet the demand. The main common complaint is the seemingly excessive amount of taxes that the consumer pays on top of the actual costs of the oil – but the real costs of the oil, in massive U.S. military subsidies to grab and protect the global oil resources, would have us paying much more at the pump than we do now if that cost were passed on to the consumer (instead of being gobbled up by the enormous American debt). It can only get worse and it will get worse in potentially cataclysmic ways if the Untied States continues its unilateralist hegemonic attempts to control the oil supply but more importantly, to control the value of the American dollar as the World Reserve Currency.

That seems a long way from the local gas station but the connection is direct: I never believed the war in Iraq was about WMD’s or chemical weapons or al-Qaida connections; it never was about Hussein being a despotic ruler or about providing democracy to Iraq and the Middle East (a perverse reverse domino affect); and somehow I could never believe that it was about oil either. Whether a despot or not, the U.S. would be willing to buy the oil from anyone who wanted to sell it to them, and despot or not, a government would be willing to sell it to the highest bidder or to a previously signed contractor. William Clark’s excellent book Petrodollar Warfare highlights that the real problem is the American dollar.

Not just the dollar, but the American economy as a whole is in trouble. As an explanation of economic forces around the globe today, Clark’s writing is clear and effective. He uses only the basic graphs and statistics needed to support the underlying themes. Those themes are several. First is the concept of Peak Oil, a period in which the oil fields globally are all producing at their maximum output – a situation I would suggest we are entering as of now. Next is his discussion of the amazing indebtedness of the American economy and how frail the support for the dollar is in domestic terms (manufacturing, job losses, personal debt) and international terms (foreign debt, imports of manufactured consumer goods, Chinese and Japanese holdings of American treasury bills). Thirdly the U.S. is governed by neo-Straussian followers who believe fully in the concept of global domination and the control of the “vulgar masses”. The media in the U.S., now reduced to five major corporate conglomerates is strongly criticized as it has lost its ability to work independently and think critically about U.S. policies and actions. These all come together in Iraq, a country that was doomed to be invaded anyway, but made it all the more worthwhile by abandoning the petrodollar to price its oil supplies and to price oil with the new euro.

It is a large picture, sometimes difficult to grasp, and is not easily represented in neoconservative terms of black and white, “with us or against us”, good and evil. There are far too many nuances to make it an easy straightforward argument, but the summation is clear, “The beginning of the 21st century will either be a disastrous period of oil related military and economic warfare, or an unprecedented and noble effort at international cooperation.” That seems fairly black and white, but the route there is not.

The introduction is quite clear about the war in Iraq, as it is “to prop up the US’ declining economic status as the sole superpower…for both macroeconomic and geostrategic considerations.” Further, it is “about retaining the dollar as the world’s reserve currency, and it is also about securing its continued use as a mechanism for effortless US credit expansion and global supremacy.” Another factor is the “message to OPEC and other oil producers: Do not transition from the petrodollar to a petroeuro system.”

In simpler terms, the dollar is supported by its use as the pricing mechanism for oil, similar to the previous standard when gold was used as the pricing asset. Every country needs oil, therefore every country needs the American dollar. If that were to change, the dollar would (and is) losing value to the euro, which, as demonstrated by Clark, is becoming the de facto world currency. As the dollar grows weaker, countries may wish to divest their reserves, essentially selling them off at lower and lower prices. As the U.S. no longer has a strong manufacturing base to support the economy (thanks to globalization) and must rely on consumptive consumerism to support the economy, the selling off of the dollar would be disastrous for the economy. There is more complexity to it than that, but Bush’s exhortation to Americans to keep shopping and keep flying after 9/11 reveals more truth than he probably wished.

It is a web of deceit and lies. There is a war against “terror”, an endless war that is conveniently located in the major oil producing area of the world. The media support the arguments of the government unquestioningly, and when revealed to be false, proceed on to the next unquestioned reason. Britain has not used the euro and is thus tied to the American dollar, explaining a bit of Blair’s enthusiasm for the war. The American government is ideologically controlled by a handful of people – Bush, Cheney, Perle, Feith, Bolton, Wolfowitz, (formerly), Rove – none with military experience but firm in their belief of military dominance.

It is a web of complex geopolitical manoeuvring. China and Japan hold the American debt and could easily send a dangerous signal to the Americans if they decided to sell off their investment. The Chinese Yuan is “becoming a de facto convertible currency the Asian Pacific economies” and “eventually the demographic and economic trends in Asia should create a consumer base that will eclipse the American consumer base.” The Saudis are working in concert with the Americans to provide mutual stability for the dollar. Iran has signalled that it will be moving to the euro and starting a competing bourse for oil sales. Russia has been invited to consider the euro as its pricing base for its oil sales, most of which go to Europe anyway. Although not dwelt upon, the “Israeli-Palestinian conflict, the central flashpoint for all Middle Eastern affairs, facilitates anti-American sentiments and potentially facilitates the recruitment of al-Qaeda members.” The home of the euro, the European economic union, now consisting of twenty-five countries, is economically more stable than the U.S.

The solutions to the problems all make common sense, but common sense is somewhat lacking in the current American political mainstream. Energy consumption is obviously a target and Clark suggests converting the majority of the military budget into a budget for remaking a rail based transit system throughout America. Primarily he advocates [disavowing-WC] the preventative war doctrine, [while-WC] promoting fiscal discipline, international energy projects, “real wealth creation” through “manufacturing and production”, energy allocation agreements with other countries as oil runs out, and global monetary reform to hopefully prevent the catastrophe of a major U.S. recession when the euro gains ascendance.

It is not a pretty picture, but it offers hope as well as calamity. While the U.S. may continue the course, it can be defeated economically if not militarily – a dangerous route to go but perhaps a necessity – a fine balancing act between military or economic global cataclysm. The hope is that there is room for change but that change must occur soon, as we are entering the Peak Oil period and the people of the world do not wish to live in a perpetual state of fear promulgated by a group of narrow minded, ignorant high priests, “we must not allow our government to cynically use the “war on terror” to frighten the citizenry in order to gain our complicity for more unprovoked oil-related warfare.”

While there are other books written on the topic of oil and the oil economy, and several are referenced by Clark, Petrodollar Warfare serves as an excellent source of information about the American global position economically and militarily, and the realization that it is very thinly spread. This has been one of the more interesting and comprehensive reads of the year and the ideas within it need to be understood by the major players in the world, hopefully to take positive ameliorative action. At the same time, the average reader can gain good insights into the workings of the global economy without getting tied up in economic or political jargon and wishful thinking. In sum, a must read for everyone.


Copyright © 2003 palestinechronicle.com. All trademarks and copyrights on this page are owned by their respective owners.

[Petrodollar]

I was not logged into the forum with the prior post, but obviously, it is I, Mr. Petrodollar, who posted the above review.

BTW, I emailed an 1,800 word essay to the admins of this forum yesterday as an editorial, and I think they will publish it shortly...

[CARVER]

Clark,

I would like to know what your view is on the situation of the Iranian Oil Bourse (IOB) and the Dubai Mercantile Exchange (DME). Both are expected to begin trading in the first half of 2006. Is this a coincidence, or is the DME a reaction to the IOB? It will trade ME sour crude oil futures, however I guess the contracts will be traded in US$? I haven't read about the DME anywhere so I'm guessing it's not a big deal, but I thought you might be able to tell me?

Thanks, I'm waiting for your book to be delivered (should be any day now), looking forward to reading it.

[Petrodollar]

CARVER,
Quite honestly, I do not know enough about the DME to make any worthwhile analysis. It is the Iranian bourse that should impact global oil trades, and I have commented extensively on that issue. (in fact, I won my 2nd Project Censored award for writing about it last year.)

http://usa.mediamonitors.net/content/view/full/17450

Anyhow, I hope you find my book informative.

[shakespear1]

Clark

I would only argue that the following is not true even if they read the newspaper.

$this->bbcode_second_pass_quote('', 'T')he average consumer of oil, if they read the newspapers, will understand that the world’s oil supply is currently being processed at peak capacity and that current infrastructures are running full out to meet the demand.

[EnviroEngr]

$this->bbcode_second_pass_quote('Petrodollar', 'I') was not logged into the forum with the prior post, but obviously, it is I, Mr. Petrodollar, who posted the above review.

BTW, I emailed an 1,800 word essay to the admins of this forum yesterday as an editorial, and I think they will publish it shortly...

[julianj]

I've read the book and I think it is excellent. It looks at peak from a different ( and nasty) view: not geology, but geopolitics and economics.

I can't recommend it enough - some of the topics were not new to me,but I think that's because of Clark's earlier work.

The last part of the book is a plea for a saner, multilateral, non-international-law-breaking USA to confront its (and the world's)problems with diplomacy/compromise rather than force. It was nice to read it, and gave me a brief flash of hope,like sunshine through a skylight, but then I came back to reality and realised that the Whitehouse Whackos are gonna take it to the max.

[rkerver]

I have started a new topic at Geopolitices
Boston Globe "Foreign policy realism" with Condolezza Rice
$this->bbcode_second_pass_quote('', '[')color=darkblue]
Foreign policy realism

October 9, 2005

QUIETLY, THE Bush administration is abandoning many premises and practices that defined its first-term conduct of foreign policy. On one issue after another, President Bush has permitted Secretary of State Condoleezza Rice to navigate the slow-turning ship of state away from the unilateralist course set by doctrinal neoconservatives during the first term and back toward a multilateral pragmatism like that of Rice's first mentor, former national security adviser Brent Scowcroft, and his mentor, Henry Kissinger...
[size=24][/color]

[MrBill]

plug, plug, plug....

$this->bbcode_second_pass_quote('', 'O')ne note, it is the Japanese, not the Chinese, who have lent the most support to the US dollar (going back to Oct 1987 when the US stock exchange took a percipitious dive...). I think Japan is currently sitting on top of $800+ billion in US assets, T-bills and other dollar denominated assets, with China in 2nd place around $650 billion (these figures are from early 2005, and may have changed slightly this spring/summer. - total of $1.5+ Trillion...scary)