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[Trillions of dollars and untold gallons of American blood (due in no small part to insane rules of engagement) is “peanuts” to you?

You are one sick silicone sister.]

Point and sputter is a great debate tactic. It means not having to justify your position. What we’ve always said about WWII is that an ounce of prevention would have saved us the need for a pound of cure. The pound of cure needed during WWII, with respect to the US, was 400K GI dead and 2 years of economic output spent on the war. In today’s terms, $40T was spent on WWII. If you include all the other junk leftists have put in (disability pensions, suicides from Dear John letters to individual soldiers, and so on) then the total tab would have been over $100T. So, just over 1% of WWII’s casualties and dollar expenses are, relatively-speaking, peanuts. We are evaluating this the way policy-makers should, not weeping widows or orphans. Peace has a cost. We are paying the cost in Afghanistan and Iraq.

[By the way, please educate yourself on the petrodollar - how it came into being, why it is important, and the situation we face today.]

I’ve been reading about the petrodollar, and impending disaster for decades. It’s the biggest load of hooey I’ve read. It was my first impression back when I needed to show proof of ID to buy alcohol, and it’s my impression today, when no one asks any more. The dreary reality is that oil prices in dollars have an inverse relationship to the dollar’s value in the major currencies. In other words, when the dollar’s value in other currencies falls, the dollar price of oil rises. And vice versa. That’s not just true of oil - it’s true of every commodity we buy. Trust me - we’re not getting over. The people who think we are - chiefly a mix of our enemies, leftists and some number of paleos, don’t understand micro-economics.

We have the largest economy in the world. That has been true for 100 years. As someone who was once on one side of a foreign exchange desk, with daily trade amounts in the hundreds of millions of dollars, I can tell you that customers don’t care what currency they trade in, as long as the bid-ask spread (transaction cost) is the smallest it can be. And for currencies, one side of the transaction was invariably the dollar. If transaction costs involving the USD had increased vs JPY, DEM, FRF or GBP, they would have done that other side in those currencies.

The total value of worldwide annual production at $60 per barrel is $60/barrel x 80m barrels/day x 365 days/year = $1.752T. The sum total revenues of the top 5 US companies by revenues is $2.2T. The combined revenues of the top 500 US companies are $12.1T. It’s the real economy that’s providing the dollar’s liquidity. Oil producers are merely piggy-backing on it because it’s convenient.

Apple really does sell over $100b of products to foreign countries. Microsoft’s Windows really is the world’s operating system of choice on desktops, and Intel’s Pentium chips and AMD’s Ryzen chips really do dominate those computers. On top of which Qualcomm really does make the guts of smartphones and phone switches alike. That’s not even getting into the pharmaceuticals, where Gilead has made the first drug ever to permanently cure Hepatitis C at a cost over $50K per course of treatment, which is still cheaper than the previous drugs, which merely dealt with the symptoms, but had to be taken forever, vs Gilead’s one treatment and cured.

As long as we are a huge economy and leaders on the technological frontier, the dollar will have huge transaction volumes and continue to be the reserve currency for foreign countries. Once we falter, some other currency will take over that function. And it won’t be particularly noteworthy. The British pound used to be the world reserve currency. That’s no longer the case. Does Britain, with its per capita output of $40K (vs Germany’s $40K, Japan’s $38K and our $59K) seem like it’s a disaster zone?

The bottom line is that if Robert Fisk, the Guardian’s favorite left-wing journalist, is talking about the “petrodollar”, you know there’s something not quite right about the concept. Take it from someone who has literally spent tens of thousands of hours thinking about the financial markets.

https://en.wikipedia.org/wiki/Angus_Maddison_statistics_of_the_ten_largest_economies_by_GDP_(PPP)
https://foreignpolicy.com/2009/10/07/debunking-the-dumping-the-dollar-conspiracy/