The British newspaper The Independent reported today that Gulf oil producers were negotiating with Russia, China, Japan and France to replace the dollar in pricing oil with a basket of currencies. According to the Wall Street Journal, Arab oil officials have denied the story, but even the possibility of such a talk weakens the dollar and renews fears about its continued viability as an international reserve currency. In fact, today a United Nations official called for a new global reserve currency to replace the dollar and end our “privilege” to run up huge deficits. We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar.
All of this is a result of our out-of-control debt. This is why we need to rein in spending, and this is also why we need energy independence. A weakened dollar means higher commodity prices. This will make it more difficult to pay our bills – including the bill to import oil.
In his book Architects of Ruin, Peter Schweizer points out that the Obama administration is focusing primarily on “green energy," while ignoring our need to develop our domestic conventional energy resources. We’re ignoring the looming crisis caused by our dependence on foreign oil. Because we’re dependent on foreign nations for our oil, we’re also at their mercy if they decide to dump the dollar as their trade currency. We can’t allow ourselves to be so vulnerable to the whims of foreign nations. That’s why we must develop our own domestic supplies of oil and gas.
Though the chant of “Drill, baby, drill” was much derided, it expressed the need to confront this issue head-on before it reaches a crisis point.
Bottom line: let’s stop digging ourselves into debt and start drilling for energy independence.
- Sarah Palin