Dollar Rejection is Why America Ramped Up Oil and Gas Production – Rob Kirby

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Macroeconomic analyst Rob Kirby thinks the dollar shortage and liquidity crisis has something to do with the booming oil and natural gas industry. Kirby points out, “America is producing an awful lot of energy, but they are not making money doing it. What is it that would make them want to do that? That’s when I started thinking about the rest of the world or the rest of the story. The rest of the story goes something like this: Venezuela used to sell all of its oil in dollars. Russia used to sell all of its oil in dollars. Iran used to sell all of its oil in dollars. Iraq used to sell all of its oil in dollars, and up until very recently, Saudi Arabia used to sell all of its crude oil in dollars, but I believe they are now selling some of their oil in currency other than dollars. So, we have many millions of barrels of oil that were formerly transacted in dollars, and these barrels of oil are now being priced in other currencies.  The dollars that used to buy that oil are now looking for a home, and they didn’t have a home. So, America had to create a home for those dollars, which is why America has ramped up their crude oil production. In the 2004 time period, America’s oil production bottomed out at 4 million barrels a day, and now it is producing 12 1/2 million barrels a day making it the world’s largest producer of crude oil. These barrels America is producing are all being sold for dollars. They needed a place or a home for those dollars. Let’s just say the dollars that were left over when Venezuela, Iran and Russia stopped selling their oil for dollars created a spill on the floor, and they needed a sponge to soak them up. That’s why American crude oil has gone up dramatically, and that’s why American oil production is forecasted to grow even though they are taking losses on every barrel they are producing.

Kirby goes on to say, “Global dollar rejection is why America had to ramp up American oil production to begin with and global dollar rejection is accelerating. This is not going to stop. So, America is going to need to produce more and more dollars to soak more oil priced in dollars that America will produce at a loss. . . . Creating all this extra oil and pricing it in dollars makes the dollar look strong. Nobody producing these incremental barrels are making a penny. They are all hemorrhaging cash. The fact that all these dollars that are going into som