Oil is the new gold

[whatsnext]

Ok so I'm probaby late on this idea, but I have not seen it presented this way.

Money was backed by gold and silver throughout history. We dropped gold/silver for fiat and went to a reserve currency(went full fledged empire) and basicly issued the terms on the petro exchange. Pegging (need better word) our dollar to the purchase of oil. Therefore making our dollar as good as oil exchange.

So that means gold took the backseat to a newer product that could do way more than being rare and pretty. Oil is the most important revolutionary wonder product in the history of mankind. Electricty produced by natural phenom is sweet but oil is way more reliable, and made the products that make that juice.

So to get a gold standard we have to lose the petrodollar.

I think this constitutes a tread if not carry on.

Any thoughts

[aristobolus]

Ok so I'm probaby late on this idea, but I have not seen it presented this way.

Money was backed by gold and silver throughout history. We dropped gold/silver for fiat and went to a reserve currency(went full fledged empire) and basicly issued the terms on the petro exchange. Pegging (need better word) our dollar to the purchase of oil. Therefore making our dollar as good as oil exchange.

So that means gold took the backseat to a newer product that could do way more than being rare and pretty. Oil is the most important revolutionary wonder product in the history of mankind. Electricty produced by natural phenom is sweet but oil is way more reliable, and made the products that make that juice.

So to get a gold standard we have to lose the petrodollar.

I think this constitutes a tread if not carry on.

Any thoughts

Thus to say that FRN's are "just paper" is not exactly correct. They are backed by OIL. As long as the dollar is THE MEANS OF EXCHANGE for it, the former has great value pragmatically. That is why the Chinese bought up our notes; to purchase OIL. Same with Japan.

In light of this, the following article is alarming: http://www.cnsnews.com/news/article/nbc ... -obama-adm

[frugalcanuck]

The FRNs are not backed by oil. Oil rich countries have agreed to sell oil for FRNs. If the oil rich countries decide to not accept FRNs then they dont have to. The ramifications would be bad for them.. ie US created / instigated civil unrest or the forced attempt at democracy that will over-throw the current leader. If you are trying to make the case that the US$ is backed by oil, dive a little deeper into the rabbit hole and it could be argued that the FRN is backed by military force, go a little deeper and it could be argued it is backed by the dredded T word.

I for one believe FRNs are just paper. Backed by the agreement of others to accept them in exchange for goods and service. If it is illegal not to accept FRNs as payment then it could be argued FRNs are backed by the US legal system.

[aristobolus]

I know that they are not literally backed by oil; one cannot take a FRN note and redeem it for such and such amount of oil. But mere "paper" does not serve as a medium of exchange for our planet at his time. Federal Reserve notes serve that purpose.

But this seems to be coming to a close. If and when our (or more properly "their" since the Federal Reserve does not belong to the U.S. citizens) dollar no longer serves this purpose- then it may become worthless paper. Now if one thinks this is an inevitability, I can see why one would designate it as if it were paper.

[aristobolus]

If you are trying to make the case that the US$ is backed by oil, dive a little deeper into the rabbit hole and it could be argued that the FRN is backed by military force, go a little deeper and it could be argued it is backed by the dredded T word.

Agreed. The military force has protected the Saudis, Kuwait, etc.; and has punished those who went against this Pax Americana (Iraq under Sadaam, etc.).

[Sheikh_yer_Bu'Tay]

If you are trying to make the case that the US$ is backed by oil, dive a little deeper into the rabbit hole and it could be argued that the FRN is backed by military force, go a little deeper and it could be argued it is backed by the dredded T word.

Agreed. The military force has protected the Saudis, Kuwait, etc.; and has punished those who went against this Pax Americana (Iraq under Sadaam, etc.).

First off, I don't what the dredded T word is. Someone fill me in

It has been postulated that Saddam's greatest mistake was to stop accepting FRN's for his oil. Supposedly, that was the day Saddam signed his own death warrant.

[Sheikh_yer_Bu'Tay]

Thus to say that FRN's are "just paper" is not exactly correct. They are backed by OIL. As long as the dollar is THE MEANS OF EXCHANGE for it, the former has great value pragmatically. That is why the Chinese bought up our notes; to purchase OIL. Same with Japan.

In light of this, the following article is alarming: http://www.cnsnews.com/news/article/nbc ... -obama-adm

Yes, it is VERY alarming! Emperor O's social engineering on a global scale has pissed off the wrong guys this time. If the House of Saud dumps the FRN for a basket of Russian and Chinese currencies, the easy life we have here in America is over.

[Market Harmony]

USD is the world currency and oil is the world's biggest commonly needed commodity. The US is the largest consumer of oil, so it is natural that oil will be mostly traded in USD. But because of some actions taken by Kissinger in the 70's, we enjoy the status of arm twisting oil producing nations into taking dollars for oil. It's a vicious cycle that I understand but cannot explain in a short post, but you can learn about it if you follow the links from searches of key words.

So, USD and oil have a tightly connected relationship when it comes to world commerce. But, to say that oil is the new gold might not be the best statement, as oil is missing some key characteristics of money: easily transportable, divisible, and identifiable. Oil, according the the experts, is a diminishing resource. As a new form of "money" oil is bad. But, because of this characteristic, it gives a certain advantage to whomever enjoys world currency status.

[whatsnext]

I'm thinking oil has transcended money. The empire was the catalyst.

The empires M runs on oil and the its sheeps work. Before empire it was gold that feed the beast, but now money is not money anymore it is just and act of the empires stability.

Oil provides power and does not need to be seen as money, but is a suitable power source to create and drive the motives of the empires force. Something more than greed but just a will to protect itself and basicly have some fun while on top. To make great story it would seem.

Silver/gold manipulated down b/c they are not necessary right now. Oil manipulated down(for the longest time anyway) to show power and get the job done.

EDIT----------

We are a fire civilization, think prometheus. Oil allowed us to surpass the boiler, like boilers surpassed the campfire.

Well if oil is not peaked but just subdued, what makes people think silver is going extinct?

We are not going to see that oil so how does that help?

[Treetop]

I know I wont convince anyone here. But i have family who lived in saudi arabia. His job was to mp NEW oil fields, for future drilling. According to him wells from when they first drilled in saudi arabia are still the same ones producing. In addition they drilled many more then currently in use, and capped them and they have sat for decades. He told me just those all ready capped could supply the entire world for decades or more.

I asked him about peak oil, and he said he cant speak for other areas, but in saudi arabia this just doesnt exist. In his words they have enough to make the entire sky black enough to walk in.

Ive related this on other forums, and so I dont expect anyone to believe me, but knowing what I do its hard not to say anything. People will ask me, well then why dont they sell more of it? etc. If you look at saudis actions it makes sense though. As more people join opec, they always lower their output by the amount that the new countries put in. the country is run by a royal family. they have all the cash they could ever spend in their lifetimes. So time is of no concern. long term they know they will sit on top of the pile. they have excessive reserves in cash.

so if this is true, then our secret government folks, and the like know this as well as my uncle.

So again i dont expect to convince anyone, but oil is very likely not the market it appears to be. I also wonder if oil goes up and the tar sands and the like become profitable, and we invest into those for our country, will the saudi simply release the flood gates? and ensure oil is below the level that those are profitable? I would guess so......

[frugalcanuck]

The T word is an ism and it starts with t_rr_r. If it is true that there is decades worth of oil left then thats great. The issues we are told we are facing right now will be delayed a few decades. The problem is the issues are still there because oil as we know it is finite. Our way of life will have to change one day.

[Treetop]

The T word is an ism and it starts with t_rr_r. If it is true that there is decades worth of oil left then thats great. The issues we are told we are facing right now will be delayed a few decades. The problem is the issues are still there because oil as we know it is finite. Our way of life will have to change one day.

and if my uncle is right and Ive no reason to doubt him, who wants saudi royalty to own the worlds wealth anyway????

[frugalcanuck]

Im not saying anyone is right or wrong. I believe your uncle is telling the truth. I dont believe there are oil shortages at the moment due to lack of oil. I do believe oil gets used and we use it faster than it is created. That being said one day there will be a shortage if our way of life lasts that long. I didnt ask for the saudi royal family to own the oil fields. Someone / corporation is going to own them and I know its not going to be me. Just imagine what it would be like if Enron owned the oil fields. Whoever has it is going to use it to their advantage.