Repairing the World's Financial System by ProQuest


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									                                                 What is clear is that oil importers            account deficit prints money like
Data Box: Producing, Con-                     like the United States need an en-                this, maybe the currency will be
suming, and Exporting Oil                     tirely new energy paradigm, for no                dumped. It would be better, there-
                                              amount of domestic drilling can even              fore, if everyone does [stimulus
   The United States is both the leading
                                              begin to offset these trends.                     spending] at once. But in a deflation-
consumer of oil in the world and the lead-                                                      ary situation, I think the United
                                              Chris Nelder is an energy journalist and the      States, perhaps a bit less the United
ing importer, even though it is also the
                                              author of Profit from the Peak — The End of Oil
world’s third-largest oil producer.                                                             Kingdom, can get away with sub-
                                              and the Greatest Investment Event of the Cen-
   As the following statistics from the En-   tury. He regularly consults with media on en-     stantial increases in domestic liquid-
ergy Information Administration show,         ergy, maintains a blog at,    ity, because I don’t think other coun-
many of the world’s top oil producers are     and writes regularly for Energy and Capital,      tries would dump U.S. currency, as
also top consumers (e.g., United States, He may be con-          doing so would destroy their own
China, Russia, and Saudi Arabia). Energy      tacted at A more
                                              extensive treatment of this subject may be
                                                                                                competitiveness. It would force them
analyst Chris Nelder warns that, if produc-
                                              seen at         to destroy their own money supply.”
ers reserve more oil for domestic con-
sumption, there will be less available for
                                              /oil-export-crisis/712.                              Protecting the patient (namely the
export. Note that China, the number-five                                                        global economy) from the side effects
producer and number-two consumer, is                                                            of the cure (stimulus spending)
not even among the top 15 oil-exporting                                                         means understanding the true pa-
countries.            — Cynthia G. Wagner     Repairing the World’s                             thology of the illness. One of the
Top World Oil Producers 2006                  Financial System                                  most significant — but least re-

(thousand barrels per day)
                                                                                                marked-upon — contributing factors
Rank    Country       Production                  n a recent poll, 60% of U.S. respon-          in the current financial crisis, says
 1      Saudi Arabia 10,665                       dents said they believed an immi-             Wolf, was the pervasive belief that
 2      Russia         9,677                      nent economic depression was                  the United States could be both con-
 3      United States 8,330                   “likely.” Retirement accounts lost                sumer of the world’s goods and bor-
 4      Iran           4,148                  more than $2 trillion in value over               rower of the world’s money.
 5      China          3,845                  the past year, and as of November                    Small, export-driven countries lent
 6      Mexico         3,707
 7      Canada         3,288
                                              2008, the Dow Jones Industrial Aver-              large sums to U.S. consumers
 8      UAE            2,945                  age was down more than 30% from                   through Wall Street, financing credit-
 9      Venezuela      2,803                  its apex in the fall of 2007.                     card loans and subprime mortgages.
10      Norway         2,786                     The causes of the current financial            But the developing-nation govern-
                                              crisis are numerous and complex,                  ments in question were less willing
Top World Oil Consumers 2006
(thousand barrels per day)
                                              says Martin Wolf, chief economics                 to accept direct investment from Wall
Rank    Country       Consumption             commentator of the Financial Times                Street in their own economies, fear-
 1      United States 20,687                  and author of the recently released               ing that U.S. investors would pull
 2      China          7,201                  book Fixing Glob
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