We began to work on this book in late 2006. At the time, we felt that the problem of petrodollars was not receiving sufficient attention, a short presentation by Saleh Nsouli of the International Monetary Fund (IMF) on “petrodollar recycling and global imbalances” in March 2006 notwithstanding. Discussion of global trade and financial imbalances and the sustainability of the Dollar-centered international financial system were still mainly concerned with accumulated reserves in Asia, especially China. As we show in this book, both groups who thought that the system was sustainable for another decade and those who thought that it wasn't seemed to ignore the role of petrodollars in accelerating systemic instability.

As we started to work on the book project, we discovered a bigger problem yet: the literatures on energy markets, financial markets, and Middle-East geopolitics were highly compartmentalized, with few notable exceptions that are cited in this book. Our focus therefore turned to integrating all three domains of investigation and showing that all three spheres integrate to perpetuate, and potentially to amplify, a cycle that we were witnessing for the second time in our own lifetimes. We were both struck by the remarkable similarities between the events that we were observing in 2006–7 and those that we had earlier witnessed in 1979–80, and reached the conclusion that we are likely to see a steep spike in oil prices followed by a crash and severe global recession.