Interesting article supporting your earlier claim.
http://www.lifeaftertheoilcrash.net/
I have not read the article in its entirety, but I must say that as I read it I got both scared and, at the same time, incredibly motivated by an expanding opportunity that may be heading our way.
Can you imagine the amount of resources that would become available for alternative energy sources if people could no longer run their automobiles or data centers due to an energy crisis. I believe a crisis of this sort may very well bring economic hardship, but at the same time, a massive re-allocation of capital. Capital investment can fuel huge economic growth.
You mentioned Black Tuesday in our conversation the other day in a comparison of what would happen with an oil peak. This historical crisis was the product of mass speculation and irresponsible lending to individuals investing in the stock market (most of which is now illegal). At least in the tech sector, I would say, that the market is far less speculative than it was during the .com's. Prices are based more on earnings than in most times of economic prosperity in the field. In a comparison with the Great Depression, an energy crisis might very well become a World War II.
The area where I see some of the most speculative pricing is in the oil industry itself. Prices are high in anticipation of a shortage to come; not one that is already here.
The one area I am more fearful than any other is real estate. The irresponsible lending of banks does echo something of a 1929 crash. Mortgage brokers have been preying on the irresponsible lending tendencies of those wanting to keep up with the Jones, and the banks have been playing along. That has already started to fall apart, as is evident with the write down's of huge amounts of loans. These incidents have lead to the recent firings of several CEOs (Citigroup for one, who's CEO lost 8 billion dollars within a year.)
I'm going to post this on my blog at the risk of looking like an idiot so I get some other perspectives. Kanda is my economic advisor and can tear me apart - which I encourage him to do. You hear that kanda. Move this conversation to http://briancochran.blogspot.com
Subscribe to:
Post Comments (Atom)
1 comment:
You found a good article; I'd read that one a while ago and then forgot about it. www.theoildrum.com is a good place for other discussions.
Peak Oil is one of those things that sounds like a crazy conspiracy theory, but the more you think about it, it all makes sense. To me it kinda feels like entering the Matrix. If you look at the rise of modern industrial society, cheap hydrocarbons have been the prime driver of wealth by supplying cheap and ample energy. That era is now over. What we are talking about is no less than an epochal shift in the story of human civilization. Like you said, it is fucking scary. But nobody is talking about it.
The key part of that article is that this means way more than higher gas prices. Our agricultural, technological, medical and financial systems are all integrally wrapped up in cheap hydrocarbons. How will they operate without cheap energy?
From my perspective as a planner, the United States is in a terrible position to deal with Peak Oil. Over the last 50 years we have built a system that is wholly dependent on driving long distances to shop and work and live. Our food is shipped an average of 1500 miles. None of our goods are manufactured in the United States. We have built a system that is totally dependent on cheap energy. Europe is in a much better position to deal with this. They have saved their local farmers. They have kept up with mass transportation.
I reallyt think that Peak Oil will be The Issue of our time. Its criminal that no politicians or other leaders are talking about it; but as the article points out, that would result in a panic that would end investment in our oil-based economy.
Ok, enough ranting. I've got to drive three hours back to Rifle. Hey, you got to use it while we still got it.
Post a Comment