"oil is traded in US dollars and that is one of the main things that is keeping the USD from collapsing" - Not really. It may be a contributing factor, but the main thing is the stability of US economy, politics and trade. "This explains why we have made so little progress in finding true alternatives to oil" - not really, it doesn't explain that at all. We had little progress because truly financially viable alternatives weren't found (fusion, cheap solar), and because progressive left froze the best known alternative's development - nuclear power - for theological reasons.

"So how are we going to let market forces take over?" - we haven't let market forces truly play in energy sector in... well, ever (at least since FDR or even Hoover). Even in USA, never mind the rest of the world.

Our economy is in the toilet. Without the support given to the value of the USD by oil trading and of course being the world's reserve currency, it would be worthless. The market cannot find viable solutions so long as the government is manipulating it to such a degree. Even currently nonviable options may become viable without government manipulation through the formation of new processes.

"Our economy is in the toilet" - while true, our economy is in a MUCH MUCH nicer toilet than that of majority of other countries (Japan, EU, China, Russia all have major structural issues).

That's wishful thinking. Our economy is larger so it has taken longer for it to collapse, but we're on the edge of a very deep chasm. Want to talk structural issues? The US government bailed out its financial sector and then increased its monetary base, injected said increase into the banking industry, and then the banking industry used that injection to "pay back" the loans.

Very well. Would you like to compare that to the banking sector in China (please be prepared to cite experts... I am). Or the overreliance of Russian economy on price of HCF?

Here is a graph showing the increase in the monetary base: research.stlouisfed.org/fred2/series/AMBSL We saw an increase from about $860B to over $4T in about six years.

I was asking about China and Russia. I'm not, if you notice, arguing that US economy is great.

If you want to argue about China and other nations being worse then it is on you to support that claim. Quite frankly, the state of other economies isn't going to really stop this one from collapsing. It's on our financial condition, but if you want to drag the conversation in that direction by making such an assertion, you need to back it up.

US treasury rates. Case closed. Everyone else prefers to invest here.

First, I thought you said you are ready to cite expert opinion? You haven't provided a damn citation yet. Here's another for me: cnbc.com/id/101625105 While China IS buying US debt, most others are dumping it. In addition, how much more debt do you think the nation can handle before the bubble bursts? The US spent and printed its way out of the last recession and there's nothing left. We have no buffer for the next one that's coming, and it will come.

@dvk while there was certainly a vocal anti-nuke crowd, it was hardly a majority. There was a lot more to the downturn of nuclear energy in the US than your 'theological progressives' 21stcenturysciencetech.com/articles/spring01/nuclear_power.html

@DVK I would be considered left, center or right depending on the topic (two-party, one-axis system really is pointless); I'm certainly ok with nuclear power provided we actually design the things properly. I'm still waiting for the much safer fusion reactors (magnetic/laser/polywell) to become available. Either way, it still requires hydrogen cell infrastructure or hypothetical next-gen batteries to usefully replace fossil fuels.

Politicoid, your question title is missing a word. Should be "How can we ever free ourselves from oil when government currency is so dependent on it?" Or similar. Otherwise it isn't clear the question's concern is the petrodollar's co-dependence with the global reserve currency and each country's balance of trade.

@Politicoid - the question isn't about who's buying/dumping as individuals. The question is that (1) on the overall, more is bought all the time and (2) Significantly MORE importantly, a lot more and with lower rates is bought that is bought of European, Russian or Chinese debt, sovereign or not. That means the buyers in aggregate trust an investment in US economy more than into others'. The absolute facts surrounding US economy alone aren't relevant to what I was noting, only comparison to other economies. Stop fightng the strawman.

@Politicoid - for the cites on Chinese banking structural issues: Thoughts from the Frontline by Mauldin. He covered it repeatedly in the last 5 years. (for comparison: he predicted US economy's issues due to mortgage boom BEFORE 2008). It's fairly accessible even to non-economists/finance types, for financial writing.

@LateralFractal - Whether you as individual oppose or not is irrelevant. 99%+ of organizing and drive to stop it was from progressive/left quarters. Might make for an interesting question on the site actually. The people riding the 3MI scare did NOT in any way, shape or form cared about technological nuances of reactor safety or magnitude of actual danger.

@DVK Yes, I'm entirely unsympathetic with emos of both classical left and right persuasion, be they bleating about Gaia or Yahweh. Still I suggest some recognition that most problems with (fission) nuclear power are not ideological. Tree huggers didn't emote the Fukushima plant into meltdown.

@lateral but tree huggers took a very specifically engineering issues unique to fuckushima and convinced the sheer please that they are relevant to all nuclear.

@LateralFractal Currency is only one aspect of government dependence and the one which ended up being discussed in this thread. Note that I included more than just the USD in the question itself. 75% of the world's oil production is undertaken by government run companies. That's massive profits for government.

@DVK The question is whether or not the US can continue to print fake money, driving down the value of its currency and driving people into poverty. The answer is no, regardless of how bad the rest of the world is.