Tuesday, May 6, 2008

Peak Oil - The Perfect Storm

Dire predictions in the autumn of 2007 had economies suffering with sustained $120 / barrel prices in the 2010 to 2012 time frame. We are now at sustained $120 / barrel oil with $200 / barrel oil coming fast, probably in the next quarter. Experts last year were predicting peak-oil to be around 2015. New data proves peak-oil happened in 2006. That means world production is now on the down-side of the curve, and that is permanent. We'll continue to produce oil, it's just gonna cost more to do it.

Peak-oil as the downfall of modern civilization is a theory mostly put forward by leftists and globalists. So if they are wrong, expect a global collapse of oil prices, which might send a few futures and forex people off their roofs, but I'll be able to drive places again, so it's a wash.

I generally have faith in the market to correct itself because people like to live nice lives and so they'll do what is best for them, which in the long run helps everyone. But I have serious reservations that anyone is actually paying enough attention to what is happening. People need to get hit in the head with something before they put a helmet on. Gentle taps to the skull don't have the same effect. If people were paying attention, things would be changing as quickly as if someone had knocked down two iconic office towers in New York City. Oh wait, that happened already...

Crap, now I'm really nervous.

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