"Sweden has slashed its holding of dollars in the latest sign that central banks across the world are starting to shun US paper. Traders were already skittish after warnings from Bundesbank chief Axel Weber that financial markets were at risk of "significant negative consequences" from a possible slide in the dollar and a sharp rise in US bond prices as capital inflows dried up. The Swedish move follows comments over the last month from officials in Saudi Arabia, Kuwait, and Qatar hinting at a partial switch of their dollar-heavy reserves into euros."

Not understood by the American peoples, and who are facing the unprecedented rise of oil, gold, silver, cooper…and the thousands of associated products dependent upon these commodities, are that these rises have more to do with their Dollars collapse than the actual world prices of these commodities themselves.

Likewise being kept from the American peoples are that the recent rises in their Stock Markets have been fueled only by the their average citizens through their pension scheme called 401-K’s, as their largest institutional investors and trans-national corporations, along with their nations elite citizens, have long abandoned the American markets for those of Europe, Asia and Brazil leaving these American citizens to bear the brunt of this collapse.

As a nation of 300 million people the American people consume 20 Million Barrels of oil a day compared to China’s use of 6.5 Million Barrels a day for a population of 1.3 billion, yet one of the United States most complete reports, "Life After the Oil Crash: "Deal With Reality or Reality Will Deal With You", which is required reading for every Russian school child, remains virtually unknown to the people of the nation to be most effected by these events, and which is worth remembering now:

"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global "Peak Oil."

Dick Cheney made the following statement in late 1999:

"By some estimates, there will be an average of two-percent annual growth in global oil demand over the years ahead, along with, conservatively, a three-percent natural decline in production from existing reserves."

That means by 2010 we will need on the order of an additional 50 million barrels a day.

To put Cheney’s statement in perspective, remember that the oil producing nations of the world are currently pumping at full capacity but are struggling to produce much more than 84 million barrels per day. Cheney’s statement was a tacit admission of the severity and imminence of Peak Oil as the possibility of the world raising its production by such a huge amount is borderline ridiculous.

A report commissioned by Cheney and released in April 2001 was no less disturbing:

"The most significant difference between now and a decade ago is the extraordinarily rapid erosion of spare capacities at critical segments of energy chains. Today, shortfalls appear to be endemic. Among the most extraordinary of these losses of spare capacity is in the oil arena."

Not surprisingly, George W. Bush has echoed Dick Cheney’s sentiments. In May 2001, Bush stated, "What people need to hear loud and clear is that we’re running out of energy in America."

A handful of people believe oil is actually a renewable resource continually produced by an "abiotic" process deep in the Earth. As emotionally appealing as this theory may be, it ignores most common sense and all scientific fact. While many of the people who believe in this theory consider themselves "mavericks,"respected geologists consider them crackpots.

Moreover, the oil companies don't give this theory the slightest bit of credence even though they are more motivated than anybody to find an unlimited source of oil as each company's shareholder value is based largely on how much oil it holds in reserve. Any oil company who wants to make a ridiculous amount of money (which means all of them) could simply find this unlimited source of oil but refuse to bring it to the market. Their stock value would skyrocket as a result of the huge find while they could simultaneously maintain artificial scarcity by not bringing it to the market.

Even if the maverick/crackpot theories of "unlimited oil" are true, they aren't doing us much good out here in the real world as production is declining in pretty much every nation outside the Middle East.

It certainly isn't doing us any good here in the United States. Our domestic oil production peaked in October 1970 at 10 million barrels per day. It has since declined a little bit each year and now stands at about 5 million barrels per day. This is despite the fact that the US oil exploration companies have more money, more muscle, and more motivation to find oil than anybody other than God. If oil is a renewable resource, why isn't it renewing itself here in the good ole' US of A?

Furthermore, if oil fields really do refill themselves, why aren't advocates of the abiotic oil theory hiring themselves out to independent oil exploration firms? They could becoming fabulously wealthy by helping these firms locate and profit from the magically refilling fields. Perhaps the reason abiotic-oil advocates aren't hiring themselves out to oil companies is because the abiotic-oil theory is little more than clever oil company propaganda. Journalist Paula Hay explains:

"If millions of people got the picture that Peak Oil is imminent, they would surely begin to take steps to protect themselves and their families—to powerdown—and decline would be slowed as a result of all those peoples’ aggregate actions. It would be a classic market response to new information. Big Oil cannot allow this to happen if it intends to keep its profits sky-high. If people believe that oil is abundant forever; that they are being screwed by Big Oil; and that the government will step in any moment to save them, they have no incentive to powerdown.

Abiotic oil propaganda, coupled with finger-pointing at the oil industry, is a perfect ruse to ensure people don’t start powering down. Peak Oil is not the oil industry’s propaganda. Abiotic oil is the oil industry’s propaganda."

Global oil discovery peaked in 1962 and has declined to virtually nothing in the past few years. We now consume 6 barrels of oil for every barrel we find.

According to an October 2004 New York Times article entitled "Top Oil Groups Fail to Recoup Exploration Costs:"

". . . the top-10 oil groups spent about $8bn combined on exploration last year, but this only led to commercial discoveries with a net present value of slightly less than $4bn. The previous two years show similar, though less dramatic, shortfalls."

In other words, significant new oil discoveries are so scarce that looking for them is a monetary loser. Consequently, many major oil companies now find themselves unable to replace their rapidly depleting reserves.

The good news is that we have a massive amount of untapped "non conventional" oil located in the oil sands up in Canada.

The bad news is that, unlike conventional sources of oil, oil derived from these oil sands is extremely financially and energetically intensive to extract. Whereas conventional oil has enjoyed a rate of "energy return on energy invested" (EROEI) of about 30 to 1, the oil sands rate of return hovers around 1.5 to 1.

This means that we would have to expend 20 times as much energy to generate the same amount of oil from the oil sands as we do from conventional sources of oil.

Where to find such a huge amount of capital is largely a moot point because, even with massive improvements in extraction technology, the oil sands in Canada are projected to only produce a paltry 2.2 million barrels per day by 2015. This doesn't even account for any unexpected production decreases or cost overruns, both of which have been endemic to many of the oil sands projects.

More optimistic reports anticipate 4 million barrels per day of oil coming from the oil sands by 2020. Even if the optimists are correct, 4 million barrels per day much oil when you consider our colossal and ever-growing demand in conjunction with the small amount of time we have left before the global peak:

1. We currently need 83.5 million barrels per day.

2. We are projected to need 120 million barrels per day by 2020.

Some people believe that no new refineries have been built due to the efforts of environmentalists. This belief is silly when one considers how much money and political influence the oil industry has compared to the environmental movement. You really think Ronald Reagan and George H. Bush were going to let a bunch of pesky environmentalists get in the way of oil refineries being built if the oil companies had wanted to build them?

The real reason no new refineries have been built for almost 30 years is simple: any oil company that wants to stay profitable isn't going to invest in new refineries when they know there is going to be less and less oil to refine.

The huge reserves of oil shale in the American west suffer from similar problems. While Shell Oil has an experimental oil shale program, even Steve Mut - the CEO of their Unconventional Resources Unit - has sounded less than optimistic when questioned about the ability of oil shale to soften the coming crash. According to journalist Stuart Staniford's coverage of a recent conference on Peak Oil:

"In response to questions, Steve guesstimated that oil shale production would still be pretty negligible by 2015, but might, if things go really well, get to 5mbpd by 2030."

Disinterested observers are even less optimistic about oil shale. Geologist Dr. Walter Youngquist points out:

"The average citizen . . . is led to believe that the United States really has no oil supply problem when oil shales hold "recoverable oil" equal to "more than 64 percent of the world's total proven crude oil reserves." Presumably the United States could tap into this great oil reserve at any time.

This is not true at all. All attempts to get this "oil" out of shale have failed economically. Furthermore, the "oil" (and, it is not oil as is crude oil, but this is not stated) may be recoverable but the net energy recovered may not equal the energy used to recover it. If oil is "recovered" but at a net energy loss, the operation is a failure. This means any attempt to replace conventional oil with oil shale will actually make our situation worse as the project will consume more energy than it will produce, regardless of how high the price goes."

Further problems with oil shale have been documented by economist Professor James Hamilton who writes:

"A recent Rand study concluded it will be at least 12 years before oil shale reaches the production growth phase. And that is a technological assessment, not a reference to the environmental review process. If it takes 15 years to get an oil refinery built and approved, despite well known technology and well understood environmental issues, viewing oil shale as something that could make major contributions to world energy supplies in the immediate future seems highly unrealistic."

The global financial system is entirely dependent on a constantly increasing supply of oil and natural gas. The relationship between the supply of oil and natural gas and the workings of the global financial system is arguably the key issue to understanding and dealing with Peak Oil, far more important than alternative sources of energy, energy conservation, or the development of new technologies, all of which are discussed in detail on page two of this site.

Dr. Colin Campbell presents an understandable model of this complex (and often difficult to explain) relationship:

"It is becoming evident that the financial and investment community begins to accept the reality of Peak Oil, which ends the first half of the age of oil. They accept that banks created capital during this epoch by lending more than they had on deposit, being confident that tomorrow’s expansion, fuelled by cheap oil-based energy, was adequate collateral for today’s debt.

The decline of oil, the principal driver of economic growth, undermines the validity of that collateral which in turn erodes the valuation of most entities quoted on Stock Exchanges. The investment community however faces a dilemma. It desires to protect its own fortunes and those of its privileged clients while at the same time is reluctant to take action that might itself trigger the meltdown. It is a closely knit community so that it is hard for one to move without the others becoming aware of his actions.

The scene is set for the Second Great Depression, but the conservatism and outdated mindset of institutional investors, together with the momentum of the massive flows of institutional money they are required to place, may help to diminish the sense of panic that a vision of reality might impose. On the other hand, the very momentum of the flow may cause a greater deluge when the foundations of the dam finally crumble. It is a situation without precedent."

Commentator Robert Wise explains the connection between energy and money as follows:

"It's not physics, but it's true: money equals energy. Real, liquid wealth represents usable energy. It can be exchanged for fuel, for work, or for something built by the work of humans or fuel-powered machines. Real cost reflects the energy cost of doing something; real value reflects the energy expended to build something.

Nearly all the work done in the world economy -- all the manufacturing, construction, and transportation -- is done with energy derived from fuel. The actual work done by human muscle power is miniscule by comparison. And, the lion's share of that fuel comes from oil and natural gas, the primary sources of the world's wealth."

In October 2005, the normally conservative London Times acknowledged that the world's wealth may soon evaporate as we enter a technological and economic "Dark Age." In an article entitled "Waiting for the Lights to Go Out" Times reporter Bryan Appleyard wrote the following:

"Oil is running out; the climate is changing at a potentially catastrophic rate; wars over scarce resources are brewing; finally, most shocking of all, we don't seem to be having enough ideas about how to fix any of these things.

Almost daily, new evidence is emerging that progress can no longer be taken for granted, that a new Dark Age is lying in wait for ourselves and our children. . . . growth may be coming to an end. Since our entire financial order — interest rates, pension funds, insurance, stock markets — is predicated on growth, the social and economic consequences may be cataclysmic."

Even today the American President has again warned his people of the harder times to come, and as we can read as reported by the AFP News Service in their article titled "Bush warns of 'tough summer' with higher petrol prices", and which says:

"US President George W. Bush has warned rising oil prices will mean a "tough summer" for US consumers as the high cost of gasoline (petrol) showed signs of becoming a big political issue. But even as more Americans expressed discontent over the price of filling up their gas tanks, Bush suggested there was little his government could do in the short term about the problem."

From all the signs coming from the United States today it appears that this latest warning from their President, and which echoes his warning to them in 2001, remains completely unknown to the America masses.

But what will soon await these people is the complete collapse of their economy, massive food shortages, riots and insurrections in their largest cities, and the reasons for their final descent into a Fascist Police State will only at that time become known to them in all its brutal reality. And in that day when their cries reach beyond their closed borders, and which they will not even be able to escape from, who will be left in the world to hear their pleas?

The answer is simple…A world the people of the United States have long ignored to their peril and ultimate destruction.

© April 23, 2006 EU and US all rights reserved.

[Ed. Note: The United States government actively seeks to find, and silence, any and all opinions about the United States except those coming from authorized government and/or affiliated sources, of which we are not one. No interviews are granted and very little personal information is given about our contributors to protect their safety.]