[zoidberg]

Well? They're in Iraq, guarding Saudi Arabia, guaranteeing free traffic in the Persian gulf. If high oil prices devastates their economy do they fold; ie withdraw or use their control over gulf oil to sabotage other economies. That is if their declining dollar restricts their imports from there anyways why not devastate Europe, China's and Japan's economy by smashing or allowing to be smashed Mid-east oil facilities?

For the record I'd do the smashing in few years if/when Saudi exports start collapsing. The oil price in US dollars cant be that far from permanently damaging their economy.

But I'll add that I believe the US will fold because its leaders are essentially cowards, ie "chickenhawks"

[Viper]

I would say that in today's world, there is no such thing as an "American" economy. Americans can buy interests in foreign commercial interests, and foreigners can buy in to US corporations. Even in cases of closed countries, you can always buy in to their currency. Hurt a company in the US and you're just as likely to hurt the wealth of some guy in France as an American citizen. Are resources becoming more expensive? Sure, but it's happening to everyone everywhere. Hence truckers striking in Europe. It's why countries that subsidize fuel are having to lower their subsidies. Even countries like KSA will want to lower their internal consumption because they can always use some more food and more toys from the far east.

So... the entire world economy is going to find ways to shift away from petroleum energy. In the meanwhile, as the price of fuel goes up, uses for energy will be reevaluated for their productivity and less important uses for energy will probably be dropped. On the other hand, prices of stuff we want to do with energy will inflate till they cover the cost of whatever alternative form of energy is used to power them. Peak Oil is by no means "the end" of energy, just a reevaluation of its worth. I'm not saying this is going to be completely painless (I'd really hate to be a guy who builds SUVs right now or a person who lives on $2 a day.), but it isn't the end of civilization either.

What all this means is that if the US wasn't in there guarding KSA right now, then China would be there. And it China wasn't there, Russia would be, France, the UK, etc. Point is, the overwhelming majority of the people who have paying jobs with retirement accounts in this world all have an interest in the uninterrupted flow of oil from the middle east. Some times they disagree on how to accomplish that (as in the case of Iran), but overall I would say their goals are the same and pretty much interchangable.

[zoidberg]

So what does the national US leadership do? If their problems are more likely to be spread over other nationalities then arent they more likely to spread them?

If other nations are more than willing to step up to the guardian role what incentive does the US have to stay there? Is this an all-in argument?

The only glue seems to be that US interests are in the long run the same as other great powers. This assumes that a dramatic collapse in US power is going to lead to rational and compromising leadership, as opposed to fanatical and angry leadership. It also assumes that American losses to mideast oil are equal to other great power's losses, which isnt supported by the numbers, ie who imports how much from whom.

[Viper]

But none of this is just the US's problem. If the price of a barrel goes up for me here in the US, then the price of a barrel goes up for some guy in Romania. There's a little fudge factor in there for transporting the stuff, but the cost of transport is directly tied to the price of the stuff being transported, so it's a fixed percentage of the product. The real value of oil to economies, just like the real value of money to economies is in the flow of the stuff, not in its possession. So its not the US alone that is all in. The entire first world is all in and on the same side.

I think that there's a general misconception that being in Iraq "because" of oil is equal to being in Iraq "to get" the oil. The US is not in Iraq to collect oil. The US is in Iraq because being in Iraq serves US strategic interests. Those interests are what they are in part because there is oil in the ME, but its a much bigger issue than trying to secure supplies for itself. The US is in Iraq because being in Iraq means that the US has surrounded Iran. The US views Iran's geopolitical ambitions as a threat to the continued flow of oil, and they didn't feel like dealing with Saddam anymore after what happened in Kuwait. The US military doesn't project power for the sake of the economy(it's way too expensive for that). It projects power because it is always trying to find ways in which to give the American government leverage. It's their job. Same thing goes for pretty much every other army in the world.

[wisconsin_cur]

Of course one is no fool or coward to fold when circumstances call for it. False bravado is as much a vice as cowardice.

I say fold only because I believe it is the smartest... most strategic way out of the present and into the future.

[vetusfirma]

Of course one is no fool or coward to fold when circumstances call for it. False bravado is as much a vice as cowardice.

I say fold only because I believe it is the smartest... most strategic way out of the present and into the future.

Ok, fold away. You won't mind if I take a different path?

[wisconsin_cur]

Of course one is no fool or coward to fold when circumstances call for it. False bravado is as much a vice as cowardice.

I say fold only because I believe it is the smartest... most strategic way out of the present and into the future.

Ok, fold away. You won't mind if I take a different path?

As the OP dealt with Saudi Arabia and foreign policy I don't quite see how we could take different paths?

I do not expect to "win" the debate, I expect we (as a nation) will go all in. I just do not think it is wise.

Personally, of course, my preparations are "all in" but they are not tied to a successful foreign policy "bet." In fact, my personal preparations assume some bets going bad.

[vetusfirma]

What all this means is that if the US wasn't in there guarding KSA right now, then China would be there. And it China wasn't there, Russia would be, France, the UK, etc.

Don't forget the UK IS in there, Afghanistan, and Iraq, Along with you guys. Been with you from the start.

100% correct about China. But for the Iraq war, Saddam would be selling oil to China, for weapons, as is happening in parts of Africa right now.

Like it or lump it, were all (USA UK & a few others) in it over there for the long haul, ar as least as long as the KSA wants us there. Thats the REAL price of oil.

Gasmon

I agree with one exception. I don't think we will leave the gulf just because we are told to by a king, emir, or the president of some tribe. If its in the best interest of the American people to be in the gulf, we will be and should be, there.

[Pops]

If one has the most Aces they don't fold from weakness; but perhaps from good strategy regarding the next hand.

Hopefully we'll learn a little better strategy sometime soon and keep the aces in the silos.

The US still has the most aces and will for quite a while.

[zoidberg]

If one has the most Aces they don't fold from weakness; but perhaps from good strategy regarding the next hand.

Hopefully we'll learn a little better strategy sometime soon and keep the aces in the silos.

The US still has the most aces and will for quite a while.

Are you inferring the US's best card is their nuke capability? I was thinking along the lines of their conventional military superiority which I was assuming is going to deteriorate along with their economic power. Thats why I was thinking they were going to be forced to use or lose it, and soon. If you dont accept that they're going to go with whats best for the OECD nations.

[Pops]

Are you inferring the US's best card is their nuke capability?

Your analogy was a poker hand - all-in or fold; in that case we do have the aces.

Unfortunately that is the way the game has been played the last seven years.

I'd offer a 2-deck canasta or a gin game as a better comparison:

The US still has the most aces but can lay down some deuces to affect the actions of the other players.

[skeptik]

why not devastate Europe, China's and Japan's economy by smashing or allowing to be smashed Mid-east oil facilities?

Because that would be the dumbest thing imaginable as far as the US economy is concerned. It all connects. The name of the game is globalisation. Where do you think Intel makes its chips these days?

http://www.technewsworld.com/story/56510.html

The entire premise of this thread is rather dumb. Foreign policy cannot be reduced to a simple binary choice of fold or all in. Real life is bit more complicated than that and the required responses more subtle and finessed, despite the American publics (and it's Presidents!) preference for a simplisitic binary good guy/bad guy, fold/all in view of the world.

[zoidberg]

why not devastate Europe, China's and Japan's economy by smashing or allowing to be smashed Mid-east oil facilities?

Because that would be the dumbest thing imaginable as far as the US economy is concerned. It all connects. The name of the game is globalisation. Where do you think Intel makes its chips these days?

http://www.technewsworld.com/story/56510.html

The entire premise of this thread is rather dumb. Foreign policy cannot be reduced to a simple binary choice of fold or all in. Real life is bit more complicated than that and the required responses more subtle and finessed, despite the American publics (and it's Presidents!) preference for a simplisitic binary good guy/bad guy, fold/all in view of the world.

<shrug> It is rather simplistic. I feel the choice boils it down to the essentials. The US can either accept decline gracefully and pull back(fold) or use its temporary military advantages to extend its dominance over the best, last oil supplies and move to neutralize threats to its control(all in). The US cant partially move to neutralize Iran; Iran has been quite clear an attack will be met with their full capabilities. Even the fully inadequate attempts to impose sanctions against them shows that they're fully willing to damage other economies, even those of their allies to purse their goals, and that things like sanctions are largely ineffective, little more than maintaining the status quo. And status quo to the US means a death by a thousands cuts and sure defeat. Nobody really believes more of the same ideas like the "surge" will change their strategic situation one ioata. Its just something the Bushies like because it shoves the big decisions to the next administration. I am influenced by Nixon's madman strategy. I realize it was only for psychological purposes, but I dont know if its been entirely dropped or entirely a show. Maybe I've been psy-oped myself, but it seems entirely more plausible the worse things get for the US. I dont know who Bush supporters will support in a true national emergency, but I have low expectations.

In a post peak world globalisation shrinks. International trade will exist of course, but its relative importance to the economy will fall dramatically. It becomes worse than a zero sum game. There will less every year, for the forseeable future. This is the essence of the die-off scenario; a probable consequence of peak, do you agree? If you dont then yes, this is dumb.

If however, you acknowledge die off as a significant possibility, then the great powers must move to ensure they get as much as possible of the resources left, or else they face something worse than invasion, or relative decline,...they face complete dissolution as their economies collapse and political control evaporates. They will become failed states and will not reform, if ever, until a new equilibrium is reached. Do you need to know about carrying capacity?

Globalisation is already feeling a some strangulation as transport costs are imposing de facto tariff barriers on everyone by everyone for everything.

[Nickel]

But none of this is just the US's problem. If the price of a barrel goes up for me here in the US, then the price of a barrel goes up for some guy in Romania.

If the price goes up because the US dollar (in which petroleum is denominated) is losing value relative to other currencies -- in particular, the euro -- then no, it actually doesn't automatically go up for everyone else: except in terms of US dollars. But since their currency appreciates, all it means is it costs them less of their own to cover the difference. Consider: did your Big Mac soar in price for you in US$ when the Mexican peso fell through the floor a generation ago? That sandwich got a lot more expensive on one side of the Rio Grande, but not both.

This is why a lot of the Gulf States are looking at depegging and different quarters of OPEC keep suggesting pricing oil in other currencies. They're getting really tired of selling oil for a dollar today that's worth only 80 or 90¢ a year later.