As more people speculate about the potential timeframe for oil supplies to run out, I wonder when the us govt will start to think more about protecting our oil with money rather than guns.
On a purely economic basis buying oil would be a far better invesment. if we had spent the 500 billion on buying iraqi and other oil supplies at the 35 per barrel range in 2003, we would actually have made rather than burned a fortune.
Even today, as many worry about the falling dollar and long term rise in oil prices it would seem like a shrewd invesmtent to stockpile massive oil quatities or possibly just purchase very long term call options. This would be a perfect hedge against our own currency inflation.
What if the US govt actually borrowed a trillion dollars and purchased 10 billion barrels of oil (or possibly bought out oil companies with huge reserves)? This could be an awesome move as a) we’d owe a fixed amt in dollars which would reduce in real world terms with inflation, b) build a real strategic oil reserve and c) be a potential massive windfall to the US treasury as oil goes to 150 or higher due to long term supply constraints and the dollar value deflates in world terms.
What I really wonder is why china wouldn’t pursue this strategy with its massive foreign currency reserves.
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