China Sneaks In The Back Door

Interestingly, China owns a large portion of the US Governments debt, and if it wanted, it could crush the US economy in a single blow by calling back all of its debt. While this would be a very irrational and unlikely move for China to do, it still is a threat, and indirectly questions the sovereignty of the Bush administrations economic policy. Though, China likely would refrain from doing this, mainly because the crash of the US economy would result in a global economic catastrophe, it seems rather questionable that the USA is not interfering with China’s global pursuit for oil. Perhaps we are beginning to see how much China influences America’s economic interests. In the near future, those who control the resources will be the global super powers. Likewise, as you can see, rarely is the US Army engaged in a war where there are no natural resources, such as Afghanistan, Iraq, Venezuela, and potentially Iran. It seems that China is scouring the globe for Oil reserves in geographic locations where oil production has peaked or is about to peak. Russian oil fields are close to peak production, and if it wasn’t for the Albertan oil sands, Alberta is very close as well. Peak oil occurs when supply reaches the peak of its bell curve in correlation to demand. After that point, the costs of extracting oil increase at an increasing rate while the production stays the same and/or decreases at a decreasing rate. Either way, the costs of building the infrastructure are very large and thus the profit margins begin to shrink rapidly to the point where it isn’t a worthy investment to bother developing. In either instances, look for China, and possibly India, to begin to purchase Oil conglomerates at an increasing rate. Perhaps the Bush administration feels it’s more important to secure the reserves in the Middle East rather than to invest heavily for oil in the north where supplies are diminishing. Either way, it’s interesting to see Countries racing to secure energy interests, for this truly wouldn’t mean there is a impending energy shortage upon us…or would it? -mkwb http://www.iht.com/articles/2005/02/01/business/yukos.html