Oil is the largest single commodity traded on the international market. This international oil trade has always been in US dollars. These petrodollars create a high demand on the international currency market for dollars and helps support the value of the dollar.
If the USA should convert to another energy source, the international trade in oil would decline and so would the demand for dollars on the currency market. As the US international trade deficit widens, which also lowers demand for dollars, combined with a possible declining international oil trade, a situation could arise which would make the bottom fall out of the value of the dollar.
Our dependency on oil goes far beyond the need for energy. How can the USA convert to another energy source and still maintain a strong currency?
2007-02-22 01:34:56 · 5 answers · asked by .... . .-.. .-.. --- 4 in Politics & Government ➔ Politics
I think yes, they have the money and it is their best interest to block any attempt at an alternative energy source.
2007-02-22 01:42:23 · answer #1 · answered by Anonymous · 2⤊ 1⤋
I don't think getting rid of oil dependence will harm the economy--since we would be sending less cash overseas, I think the value of the dollar would be strengthened. Of course this would depend on whether the alternative energy methods had close to the cost-effectiveness of oil. For all the problems oil has caused the US, it is still the cheapest way to boil water for electricity and is still the powerhouse of american industry.
Right now, the most efficient solar power generators (which look like the best bet in the future of sustainable energy) are not sustainable in an economic sense--it would take more than their estimated life spans to pay for themselves. That said, the technology is moving forward quickly, and if it doesn't hit the snags it did in the 1980's, we could see solar power taking off as the preferred method of power generation for new plants in the next decade. Since the stations would probably be based in the US, and are even likely to be built by the US, this would shift the trade deficit in the favor of the US while reducing dependence on foreign oil.
2007-02-22 01:47:39 · answer #2 · answered by wayfaroutthere 7 · 2⤊ 0⤋
There is a growing movement of future corporate power that is building and expanding the alternative fuel base, as we speak. Last year there were 105 alternative fuel plants in the US, and within the next two years that number is expected to triple. As they expand in numbers the availability of alternative fuel will become more readily available, and thus will make their use a viable option. Big Oil dropped the ball by not grabbing this idea, signing on with the food industry and agricultural sector, so that they could offer alternative fuels at their own pumps. If they don't sign on, they will fall before the power of the purse.
2007-02-22 01:42:54 · answer #3 · answered by sjsosullivan 5 · 1⤊ 0⤋
THINK! petro-anything only matters to OPEC members. Ask Hugo.
US & UK at least have oil resources. Hint hint: the rest of Europe doesn't.
FOCUS: if you wanted to discuss US energy sources or resources and energy dependency those are other issues.
2007-02-22 01:48:13 · answer #4 · answered by Anonymous · 1⤊ 0⤋
No.
The reason for the invasions of Afghanistan, Iraq, and soon, Iran is to prevent petrodollars becoming petroEuros, which is the intent of OPEC.
The US dollar and US economy are fading indominance. These wars of occupation and acquisition are a desperate attempt to cling to power.
.
2007-02-22 01:40:42 · answer #5 · answered by Anonymous · 1⤊ 2⤋