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Comment by mercy_dude | Hacker News Reader

Despite all the rhetoric from the leadership, US has no incentives to retire oil and gas. To maintain the monopoly of USD as reserve currency (and be able to print money forever), US needs to make sure oil is settled in USD with Middle Eastern dictatorships being the proxy doing the enforcement. Absent of oil, as US is not a net producer country anymore, there is no reason for other countries to hold USD as much.

Thus I am a long term bullish on oil and gas. I think oil will go back to 120 level pretty soon in next 2-3yrs.

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This is an outdated view. The petrodollar is likely less important than than the debt dollar. Countries have vast debts in dollars which achieves the same effect of pulling the dollars into international trade.

The dollar as a reserve currency is very old. The world is changing around it. Thinking of it as a thing that has to be protected at all costs is very misguided.

The entire US economy is dependent on its world reserve currency status. If this happened the US would likely completely collapse.

The stagflation of the 70s was a start of this process but the petrodollar put a stop to it. The US is way more dependent on it now than it was then.

I believe that scenario totally depends upon OPEC's ability to keep prices artificially high by limiting production of its vast supplies of oil.

I remember a few short years ago when fracking was dominating the news about oil supply all the talk from the Middle East producers were about just that...limiting production in order to "break the backs" of all the American wildcat frackers,

I guess with a President in office who seems to want prices to go through the roof, its much easier for them to do just that.

How would limiting OPEC production hurt the US Oil Fracking industry? If anything, that would cause an increase in oil prices, making US Fracking more profitable and viable...

I've wondering about this very thing.

Asked another way: What's the renewable energy replacement for petrodollars?

Probably some sort of Chinese style loan program. You better build those solar and wind farms on loan in yuan or USD (supplied by the Chinese) or we are going to sanction your ass.

Honestly for me the idea of adopting a single countries' currency as the currency used for world trade doesn't make any sense. At some point your country won't have a significant share of world GDP to have influence over the rest of the world economy.

If you are going to adopt a global "currency" you would go for the bancor but I personally don't think there is going to be one global currency. There'll be one for each continent and it's the EU that is going to adopt an EU bancor as the first economic block because the euro is dysfunctional and cannot be maintained as it is.

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