BEGIN:VCALENDAR VERSION:2.0 PRODID:-//CiviCRM//NONSGML CiviEvent iCal//EN X-WR-TIMEZONE:America/Chicago METHOD:PUBLISH BEGIN:VEVENT UID:CiviCRM_EventID_2678_d3319be4f90071e87b81b1178ed41494@www.hgs.org SUMMARY:HGS February General Lunch DESCRIPTION:Monetary Pivot Points in the History of the US Dol lar\, Their Effects on Oil Prices\, and the Curren t Monetary Pivot\n \n Speaker: Bill DeMis\n \n &nb sp\;Wednesday\, February 18\, 2026\n \n 11:30 am & ndash\; 1 pm\n \n Total Energies (1201 Louisiana S t\, Houston\, TX 77002)\n \n Directions: Security pre-registration is required - attendees will rece ive a link to security video one day in advance.&n bsp\; Street parking\, paid garage parking\, and v alet are available. \; \n \n Cost: $30 Members \, $35 Non-members\, $25 Students\n \n PLEASE REGI STER EARLY DUE TO SECURITY AT TOTAL\n \n REFISTRAT ION CLOSES ON MONDAY FEBRUARY 16\, 2026 \;\n \ n  \;\n \n Abstract\n \n After supply and dema nd\, the single most important control on global o il prices is the value of the US dollar (e.g.\, De Mis\, 1996\, 2000\, 2021). When oil price behavior \, and the desires of the people who set the price of oil\, are viewed through an historical retrosp ective that focuses on monetary pivot points\, &ld quo\;geopolitical events&rdquo\; play a surprising ly insignificant role and there is no evidence tha t oil price rises cause inflation. \n \n Three maj or pivot points in the value of the US dollar have affected oil prices. These pivot points occurred in 1944\, 1971\, and 1985. Today&rsquo\;s unsustai nable monetary and fiscal excesses of the US gover nment show the US is now in a monetary pivot at le ast as profound as the collapse of the Bretton Woo ds Accord. \n \n The Bretton Woods Accord in 1944 was the major monetary pivot point of the 20th cen tury. The agreement pegged the US dollar to gold a nd made the US dollar exchangeable for gold for fo reign central banks. The Bretton Woods Accord made the US dollar the reserve currency of the world.\ n \n The second monetary pivot point was the aband onment of the Bretton Woods Accord on August 15\, 1971. Bretton Woods demise was caused by the US Fe deral Reserve printing too many greenbacks to fund the war in Vietnam and President Johnson&rsquo\;s Great Society programs. \; Quitting Bretton W oods led to a 21% devaluation in the dollar in 18 months (DeMis\, 2000). Oil supply and demand were tight\, therefore international oil producers made up for the cumulative effects of 8 years of infla tion and back-to-back dollar devaluations by incre asing nominal oil prices four-fold in four years s tarting in 1973 (ibid\, 2021). \n \n The &ldquo\;o il prices shocks&rdquo\; of the 1970s were complet ely foreseeable as an adjustment to depreciations in the dollar after the collapse of Bretton Woods. But oil price rises could only occur after three conditions were met: 1) the price of gold rose thr ee-fold to $100/oz\; 2) there was orgy of Federal Reserve money-printing and government deficit spen ding\; 3) oil supply became tight (DeMis\, 2021).\ n \n The third pivot point was the Plaza Accord in 1985 where the signature countries agreed to deva lue the dollar to cure trade imbalances (DeMis\, 2 019). The greenback fell 35% in seven years. Inter national oil producers took extreme cuts in purcha sing power but could not offset losses by increasi ng their nominal prices because of over-supply fro m the North Slope and North Sea (DeMis\, 2016).\n \n By the early 2000s\, supply and demand came bac k into balance. Major producers were able to raise oil prices to regain purchasing power lost from t he third pivot point. Nominal oil prices increased fourfold in four years (2004-2008). Tellingly\, t he only news headline about surging oil prices and inflation were to ask\, &ldquo\;Where is the infl ation?&rdquo\; Certainly by 2008 the US had de-ind ustrialized its economy and was consuming less oil per unit of Gross Domestic Product. But not even this change explains the lack of inflation in the face of a four-fold rise in oil prices. The domina nt explanation is that the money supply was not gr owing faster than the economy (DeMis\, 2021). \n \ n The shale revolution brought on the equivalent o f a &ldquo\;Saudia Arabia&rdquo\; of oil productio n and a &ldquo\;Saudi Arabia&rdquo\; of gas produc tion in the US. Changes in value of the US dollar have been essentially meaningless to OPEC (DeMis\, 2023).\n \n Today\, US debt to GDP is 120%\, as h igh as at the end of World War II. The US recovere d financially after WW II by growing GDP and infla ting the debt away (DeMis\, 2023). By 1962\, the e conomy grew by 75% in real terms (meaning correcte d for inflation) and cumulatively inflation was by 45% by 1957. Today\, the US has both a massive tr ade deficit and an aging population which makes it impossible to grow the US GDP like after WW II.\n \n Another monetary pivot point is now upon us. I nterest payments on the US debt are $1.1 trillion per year\, greater than the entire US miliary budg et. More ominously\, two-thirds of US debt is shor t-term and it will need be re-financed within the next two to four years\, most likely at higher rat es. Meantime\, the US continues to deficit spend a t an annual rate of $1.8 trillion per year\, there by further increasing the debt load and the intere st payments. The only condition left is for supply -demand to become tight before oil prices surge li ke they did in the 1970s. \n \n Financial pundits are speculating about a hypothetical &ldquo\;Mar-a -Lago Accord&rdquo\; wherein the US will swap US t reasury and bond debt for a new\, no-yield\, ultra -long-term bond. This is a sovereign default in al l but name. Other pundits suggest a major devaluat ion of the dollar. \; \; Whatever the solu tion to the current deficit and monetary crisis\, changes will have to be dramatic and will not be p leasant. \n \n Today\, cumulative inflationary pre ssures suggest oil prices need to be about $250/bb l for international producers to regain their purc hasing power parity - if they continue to use the US dollars. Oil&rsquo\;s revaluation to a higher p rice will probably occur when supply becomes tight \, but might be precipitated solely by the current monetary pivot point if this pivot becomes extrem e enough.\n \n References\n \n DeMis\, W. D.\, 199 6\, History of US dollar exchange rates and the re al value of oil: American Association of Petroleum Geologists Bulletin\, v. 80\, p. A35&ndash\;A36\; AAPG Search and Discovery Article #91019 \n \n De Mis\, W. D.\, 2000\, Historical analysis of real g lobal price of oil: Implications for future \; prices: American Association of Petroleum Geologis ts\; AAPG Search and Discovery Articles #90914 and #70037.\n \n DeMis\, W.D.\, 2016\, Real Global Pr ice of oil in the unconventional era: American Ass ociation of Petroleum Geologists Search and Discov ery Article #90266\, AAPG Pacific Section and Rock y Mountain Section Joint Meeting\, Las Vegas\, Nev ada\, October 2-5\, 2016\n \n DeMis\, W. D.\, 2019 \, Historical analysis of the real global price of oil: Houston Geological Society Bulletin\, v. 61\ , no. 7\, pg. 51&ndash\;63.\n \n DeMis\, W. D.\, 2 021\, History suggests nominal oil prices could ri se to $200 a barrel in near future: American Assoc iation of Petroleum Geologists/Society of Economic Geophysicists IMAGE Convention Abstract (Author&r squo\;s note: AAPG has not yet posted this abstrac t to its Search and Discovery website\, making pro per citation impossible at present.)\n \n DeMis\, W.\, 2023\, The Coming Commodity Super Cycle: GeoG ulf Transactions\, v. 72\, p. 37&ndash\;79\, AAPG Search and Discovery Article #11375\n \n  \;\n \n  \;\n \n Bio:\n \n William (Bill) DeMis\n \n \n \n  \;\n \n William (Bill) DeMis is the President of Rochelle Court\, LLC\, an oil-and-gas consultancy located in Cyprus\, Texas. He is an a ngel investor in a major domestic start-up company that is drilling some deep and potentially signif icant wildcats for natural gas in the onshore Gulf Coast. Bill likes to look at outside prospects an d he generates his own prospects for fun and\, rar ely\, for profit. \; \; \n \n Bill has bee n employed as a work-a-day prospecting geologist f or most of his 35 years\, but he has also held man agement positions including: Exploration Manager a t Marathon Oil\, Exploration Vice President at Rox anna Oil\, and Senior Vice President and Chief Geo logist at Goldman Sachs. \n \n Bill has received t wo Best Paper Awards from the AAPG for his analysi s of the effects of US dollar exchange-rate variat ions on the value of oil on global markets\, in 19 96 and 2000. \; This talk on Monetary Pivot Po ints is an outgrowth of that work from the 1990s. Bill also won &ldquo\;best paper&rdquo\; awards fr om Rocky Mountain Associations of Geologists and f rom the GCAGS.\n \n Bill is an associate trustee o f the AAPG foundation. He currently serves as the Foreman of the AAPG House of Delegates and is on t he Board of Directors of the Houston Geological So ciety. CATEGORIES:General Lunch CALSCALE:GREGORIAN DTSTAMP;VALUE=DATE-TIME:20260218T113000 DTSTART;VALUE=DATE-TIME:20260218T113000 DTEND;VALUE=DATE-TIME:20260218T130000 LOCATION:Total Energies\n 1201 Louisiana St\n Houston\, TX 77002\n United States\n URL:https://www.hgs.org/civicrm/event/info?reset=1&id=2678 END:VEVENT END:VCALENDAR