Until two or three years ago we were still hearing conventional "wisdom", loudly and widely proclaimed, that confidently asserted that the industrialized world in general and the United States in particular were nowhere near as dependent upon crude oil as in the past. Hence the influence of "black gold" in the economic, diplomatic, geopolitical and military spheres was greatly discounted. And quite a number of much-respected sources of financial and geopolitical analysis and forecasting were led to make fools of themselves by trumpeting such unfounded speculation, palming it off as "intelligent commentary" and "strategic analysis".
The truth is, we have already entered an entirely new geopolitical era in which black gold already rules as king in all those spheres (economic, diplomatic, geopolitical, military).
The new era also is one in which the heretofore unquestioned global dominance of the United States in the diplomatic, geopolitical, military and economic spheres is no longer taken for granted by the world at large, and is no longer assured. It is the opening phase of the transition from the unipolar world order of the last superpower to the multipolar world order, in which other centers of power gain strength at the expense of US power and dominance. And black gold is rapidly becoming the central focus, as all the industrialized players on the geopolitical chessboard decide how to position themselves to preserve, and enhance, their power.
So rather than seeing the influence of black gold wane, we are witnessing the tremendous increase of its influence, to an extent unforeseen by all but a relatively few careful observers of geopolitics and global economics. The dramatic increase in the global power of black gold is already having enormous implications and repercussions throughout the world, and these will rapidly increase in weight and number. It is therefore vital to understand those implications and repercussions. It is the intent of this analysis to provide the fundamental understanding that is required.
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By all the evidence, and in the face of the sustained decline of the US dollar, OPEC and Russia have already established a de facto peg to the euro for black gold, and they are keeping upward pressure on the price of crude oil so as to maintain their profits in the face of a declining dollar, which they are paid for their product. This is becoming fairly widely known. When the dollar decline gets even steeper with the rise of inflation, the abandonment of petro-dollars in favor of petro-euros will be a "natural" step for oil producers. Such abandonment of the US dollar in the international transactions for black gold, when it finally comes, will deal a terrific blow to the already weak dollar, as well as to the US economy.
But there is another important exit from the US dollar in the works. Japan, China, India and others, who have been buying huge amounts of US debt, and thereby financing the US deficit, are becoming concerned that their holdings of such debt are putting their enormous reserves at risk. They are sending signals that an exit strategy from the dollar is in the making.
