[Micki]

A possible scenario that has been growing in the back of my head would delay PO and allow strong currency based countries to keep the party running a bit longer.
Anybody care to sanity check it?

First of all Iran and/or other coutries allow oil purchase in Euro's and/or other non-US dollar currencies.

US dollar breaks down over a medium to long term period. Euro gains strength and EU currency nations gradually take over US role as the worlds consumer of cheap imports.
[/list]Oil demand destruction sets in in the US. As a result oil will seem expensive to holders of US$ but can be kept cheap/stable for holders of strong currency i.e. Euro.
[list]As a result of the demand destruction PO date is delayed.

This transformation would probably have to happen over a few years and result in a global recession, but the sacrifice of the US economy and emergence of EU as a major importer/consumer would bring back some status quo to the rest of the world. (and start building new new twin deficits etc. within the consumer nations)
So EU, Russia, OPEC nations, China and strong currency nations (hopefully Australia!) should all come out quite OK.

If we exclude an all-happy outcome, isn't it more likely that Russia, China, EU and most other countries would try to work toward such a scenario rather than a global melt down?

[TorrKing]

Thought about that too, I think the US will go down quite soon after PO. Other economies may be a little more robust. If USA suddenly can't afford much oil, then that massive demand destruction may slow things down for a while.

But really, I think the world is willing to go down with the US. It sure seems that way now.

Torjus Gaaren

[Doly]

$this->bbcode_second_pass_quote('Micki', '
')If we exclude an all-happy outcome, isn't it more likely that Russia, China, EU and most other countries would try to work toward such a scenario rather than a global melt down?

[Bolinbrooke]

My understanding is that the US accounts for approx 40% of the world economy. They have tied the world up to a point that they cannot be excluded the way you propose. The amount of trade the US is involved in gives them plenty of foreign currency to by goods and services even if no one will except US dollars.

Further reasons why this would not work is that the US is the top 1,2 or 3 trading partner of most developed and developing countries in the world. No goverment in its right mind would stop selling to one of its best customers due to the domestic pain this would cause.

[peaker_2005]

$this->bbcode_second_pass_quote('Bolinbrooke', 'M')y understanding is that the US accounts for approx 40% of the world economy. They have tied the world up to a point that they cannot be excluded the way you propose. The amount of trade the US is involved in gives them plenty of foreign currency to by goods and services even if no one will except US dollars.

Further reasons why this would not work is that the US is the top 1,2 or 3 trading partner of most developed and developing countries in the world. No goverment in its right mind would stop selling to one of its best customers due to the domestic pain this would cause.

[jaws]

There's certainly going to be a sobering up in the rest of the world after a U.S. crash, but that doesn't mean we couldn't go on without them. A lot of overcapacity would be uncovered, there would be some quick layoffs, and then the path of industrialization in Asia would continue and the U.S. would be forgotten.

[dub_scratch]

The US, or North America for that matter, is horribly energy inefficient. The US gets $1,300 of GDP per barrel of oil where wealthy Western Europe gets about $2,000. This difference is largely due to the way we have built our cities, based on ugly sprawl and car dependency.

It is my opinion that Europe will be the best place to be in a post cheap oil future. As Europe rids itself from their own scourge of cars, the people will find an infrastructure left to help then carry on in relative prosperity. In the US, there is no such infrastructure other than car dependant sprawl that cannot all be sufficiently converted to run on an energy starved regime. The psychology of previous investment-- as Kunstler calls it-- will compel many to make the futile attempt of preserving sprawlburbia with alternate car fleets and massive subsidies by the government. This failure of a project will further impoverish the US because of the tremendous costs that such a futile attempt will entail. Many of the few who do still have wealth in the US will move themselves and their assets to places like Europe where the lifestyle is better because of their infrastructure. This will further impoverish the US, perhaps narrowing the economic gap she has with her neighbor to the south, Mexico.

The US is going to be the tragic economic basket case of the 21st century simply because it chose sprawl and car dependency when it had so much affluence in the 20th century.

[threadbear]

$this->bbcode_second_pass_quote('jaws', 'T')here's certainly going to be a sobering up in the rest of the world after a U.S. crash, but that doesn't mean we couldn't go on without them. A lot of overcapacity would be uncovered, there would be some quick layoffs, and then the path of industrialization in Asia would continue and the U.S. would be forgotten.

[gnm]

rest of world : Too bad about that massive economic collapse and susequent civil war/destabilization of your country, we're just gonna go on about our buisness ok? btw, what did you spend all that money on if you weren't making trains and windfarms?

US: Well we spent most of it on the best military hardware that money can buy. Oh and nukes. Lots of nukes! ICBM's, backpack portable mortars, submarine launched, you name it! Too bad all of those are now in the hand of various desparate former states/regions... Oh some of us would like free food shipments, oil, that sort of thing...

rest of world:
!

-G

[lakeweb]

$this->bbcode_second_pass_quote('jaws', 'T')here's certainly going to be a sobering up in the rest of the world after a U.S. crash, but that doesn't mean we couldn't go on without them. A lot of overcapacity would be uncovered, there would be some quick layoffs, and then the path of industrialization in Asia would continue and the U.S. would be forgotten.

[DesertBear2]

$this->bbcode_second_pass_quote('Bolinbrooke', 'M')y understanding is that the US accounts for approx 40% of the world economy. They have tied the world up to a point that they cannot be excluded the way you propose.

[jdmartin]

This is a no brainer, really.

If the US goes down, and I mean REALLY goes down (i.e. no economy, rioting, etc), then the rest of the world is coming with us.

Why? Because we remade the rest of the world in our image. After WW2 we were the only reasonable economy standing. We made sure that we remade the rest of the world to become economically interdependent on us and to some extent each other. We led the way in teaching people how to become mass consumers of things. The idea that's being floated here is that other countries around the world can replace us as massive consumers, and hence we are simply another populous 3rd world country while the rest of the world continues to enjoy its wealth without us.

If things can string along and continue on their same path for another 50 or 60 years, that might in fact be possible. As Americans, we are allowing our government to export our standard of living to other countries. Thus, where 20 years ago 100 Chinese equalled 1 American, maybe now its 25 Chinese equal 1 American. If, eventually, enough replacement takes place, then your scenario is entirely plausible (this is of course excepting the fact that we've got all kinds of doomsday weapons to wrought horror upon the rest of the world at the end of the day). I, however, don't think we'll get that far. For one thing, I don't think that replacement can happen fast enough in other countries to absorb the losses in the US as energy prices continue to climb. We consume 25% of the world's oil here in the US, every day. No country on earth can take up the slack if we cut even 25% out of that figure, at least not today. The vast majority of the world's economy is predicated on buying, selling, or infrastructuring something around the US. We are the world's ultimate consumers, and until enough countries can replace us satisfactory that other countries can voluntarily go elsewhere, when we go, everyone comes with us.

[spudbuddy]

JDMartin wrote:

[Why? Because we remade the rest of the world in our image]

Excellent point.
International monetary games are being played with rules invented about 800 years ago...perfected largely during the heyday of the British Empire (remember that one?) and carried on vigorously by American corporate bodies of non-citizenship.
Let's make this perfectly clear.
In the party to come, does one think that the big money (whoever has it) will care a rat's ass about the declining fortunes of wherever it is that they declare their citizenship?
Switzerland is not the only bank formerly disguised as a soveriegn nation hiding the fiscal secrets of the big boys. Piggy banks abound in interesting and exotic locales.

I'm making this point largely because I believe the issue isn't going to be a simple ratio comparison of cause and effect between various nationalities or regions of the world, based on how well they can weather energy depletion.
The wealth it would ultimately take to fix the machine is being ever more vigorously sucked and stored.
If an American corporation can disengage from any national identity (except for advertising purposes) and thereby any social responsibility, than any corporation flying any "flag" can do the same.

I do admit that much of western Europe looks tantalizingly capable of weathering the storm, based on its infrastructure, compact development and lack of sprawl. That's fine as far as it goes.

However, I fail to see how and why an energy-starved world couldn't just as easily retreat into regional economies, self-supporting and serving, based simply on the costs of moving people and things around.
We will never be able to import bauxite or grain via blackberries, cell phones, IPods, laptops, or scanners. All the IT in the world can't do that.
Teleportation is as much science fiction as time travel is.

Thus, the "globalized" market eventually becomes the extinct dinosaur it will one day be.
(camel caravans anyone? Where's the next Marco Polo?)
Trade winds could take on an exciting new and and fabulously romantic meaning.

Mercantilism, in its final glorious big bang, will play the game furiously until it can no longer do so. That any nation on earth will ultimately win this superbowl is a good fantasy for sports fans, I suppose, but the rules of the game are inexorable and absolute. (the real meaning of PO?)
Who cares what convulsions and constipations abound in the glorious case of "trots" to come? It's a short interval, perhaps 2 or 3 decades at most, after which an entire new set of rules will be required for humankind's survival. They will barely resemble anything we're looking at now.

In summary:
Although America did not invent the game, it raised the stakes- and just as no other team will ever top the accomplishments of the "damned Yankees" no other "nation" will ever top it. Not by today's rules (and those are the only rules in play at the moment.)