On May 16 President Bush met with King Abdullah of Saudi Arabia. He appears to have collided with the Saudi Princes’ decision to initiate political peaking of the world’s oil production. See here for a description of political peaking, and here for King Abdullah’s announcement that they will begin additional projects to increase their oil production — in effect initiating political peaking.
Bush asked them to substantially increase oil production. They said no. Here is the post-meeting annoucement, almost meaningless — except for what it does not say.
For an analysis of the consequences we turn to the always interesting Dennis Gartman, writing The Gartman Letter (19 May 2008) — Excerpt:
However, of much greater concern to us is the material “loss of face” that President Bush has caused the United States to suffer in his ill-advised trip to Saudi Arabia, where he embarrassingly pleaded with the Saudis to increase oil production. They refused, and we think with very real justification.
The President broke the very first rule of good lawyering: Never ask a question to which you do not know the answer; and if you must ask such a question, be certain that the answer you hope to get is the answer you do indeed get. He asked the wrong question, and he got the worst possible answer. In the process, he has diminished the US all too publicly.
We have taken this President to task for many things in the past, perhaps the most open of which was his support of steel protection several years ago. Too, we’ve taken him to task for his refusal to veto legislation that clearly should have been vetoed. This, however, is the most serious violation of our trust in the Bush Administration.
We are, after all, the United States of America. This is the most powerful nation the world has ever seen. We do not bend before foreign powers and ask for their help, but we have now, and we were and are utterly embarrassed by that fact. In one futile gesture, Mr. Bush has put the US dollar’s position as the world’s reserve currency at risk, for reserve currency status mandates that the reserve currency nation bow to no one.
So long as Great Britain ruled the seas and was the most powerful nation on earth, Sterling was the world’s reserve currency. Her mantle passed to the shoulders of the United States after the World Wars. The mantle now is in jeopardy of moving again, but to whom we are not quite certain.
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For more information about Peak Oil
- When will global oil production peak? Here is the answer! (1 November 2008)
- The most dangerous form of Peak Oil (8 April 2008)
- The world changed last week, with no headlines to mark the news (25 April 2008)
- Peak Oil Doomsters debunked, end of civilization called off (8 May 2008)
Here is an archive of my articles about Peak Oil.
Here are other resources about Peak Oil.