|
"I'm lost here. If oil producing nations refuse to take dollars for their product, what is it that you think will happen??? "
First off, again, let's not confuse the issues. Iran and Venezuela could just as easily say outright "We refuse to sell oil to you" but that could lead to escalations like war, or trade embargoes, or naval blockades. So instead they say "we refuse to take dollars" and force US buyers to play currency exchange games and lose a percent on the trade. BFD.
But as to what I think will happen? I know what is going to happen, the only question for the past fifty years has been WHEN it will happen. The US will begin investing in synthetic fuels and alternate fuel sources. When will this happen? When either oil in the ground runs out, or oil costs hit $5/gallon for the refined fuel product--at which point existing synfuel processes become eocnomically viable. And make no mistake, the only reason OPEN doesn't charge enough to force $5/gallon pump prices, is because they know the same thing. Make it worthwhile to build fuel instead of shipping it in, and they'll kill the goose that's laying the golden egg.
As an economic decision, it pays for us to keep buying fuel stocks from them. As a LONG TERM economic decision, it probably pays for us to abandon them NOW and ramp up our own independent energy production. You'd need some fancy analysis to guestimate the exact price point. Tell them to go pound sand, and let the Chinese exhaust the rest of the petro stocks. Because no matter how you slice it--they will be gone, and then whatever alternatives we have, will be the new petroleum that someone else "must" buy.
While the endgame is being played out, I'll bet you see $5/gallon pump prices in the US for about a year, followed by a massive investment in synfuels, followed by a price DROP back to $4, which forces those plants into bankruptcy. At which point someone buys 'em up cheap...and the game is on again. The Saudis are masters at long-term gaming.
It would be real handy to have a couple of billion in unredeemed US dollars under the mattress when the time comes to snap up those bankruptcy assets, the synfuel plants, the coal mines, the garbage and offal rights. (Which are the alternate feed stocks for synfuels.)
|