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Page added on September 30, 2015

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Peak Oil Will Cause Transition Into a Slow Growth Economy.

Why do we measure our success with those little bits of paper money? For that matter, how does one measure wealth? Do you measure them in investments? Tangible assets or resources? I ask these questions because it seems the people who run the central banks and our government seems to think otherwise. They run the country with the belief that when they run out of money, they print more and this somehow creates more resources. How sustainable can this be?

Chris Martenson from Peak Prosperity points out that “any fourth grader will tell you, a finite system will not yield unlimited resources. But that perspective is not shared by those controlling the printing presses. And so they print and print and print, yet remain flummoxed when supply (and increasingly, demand for that matter) does not increase the way they expect. Is this any way to run an economy? Or a finite planet for that matter?”

He interviews energy and environmental expert and author Kurt Cobb who warns that our current economic policy suffers from a fatal degree of magical thinking: sufficient new resources will emerge if the price is high enough.

I think you put your finger on it: people who run our central banks and run our government policy think that money manufactures resources. If we just put enough money out there, it will call forth the resources. There is a little bit of truth to that, because very cheap finance made it possible for us to lift this $100 barrel oil out of the shale formations of North Dakota, Texas, and other places. That is not endless, and the high price puts pressure on the economy. I think this is where we are going to have problems.

We cannot sustain those high prices in the long run. We have structured an economy for cheap energy and that is not what we have. It has resulted in a slowdown that I think is the beginning of that transformation from a high growth economy to a low growth economy. In fact, we probably already began that in 2008.



5 Comments on "Peak Oil Will Cause Transition Into a Slow Growth Economy."

  1. ghung on Wed, 30th Sep 2015 4:29 pm 

    Will Cause Transition Into a Slow Growth Economy?”

    Will cause? Since we got there about 2008, maybe the title should be “Peak Everything Will Cause Global Contraction”. Since it’s clear that humanity has outgrown their planet, humanity has two choices:

    1. Find another planet

    2. Go on a big diet

    Which seems more likely?

  2. BobInget on Wed, 30th Sep 2015 5:59 pm 

    All planets are in line for serious oil shortages, higher prices, due to starkly diminished US and Mid East production and inelastic demand.

    Factor political/military actualities.

    Russia, Iran, Iraq, Venezuela, Nigeria are in the process of overthrowing Saudi Arabia’s
    OPEC , military and religious dominance.

    Today, Russian aircraft bombed Saudi proxy HQ
    in Syria. While no so called analysts are making the crude oil connection, I am.
    History will show today as THE Syrian proxy war turning into a direct confrontation.

    Oh yeah, higher oil prices, absent US and Canadian production, tens of thousands of oil workers made redundant, are already hurting our economy.

  3. BC on Wed, 30th Sep 2015 6:56 pm 

    Yes siree, Bob.

    https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=1Zr0

    https://www.youtube.com/watch?v=gWttL4gs078

    Tejas is already in recession, y’all. It’s fixin’ to look bad, but will the Tejas awl bust go nationwide? 😀

  4. makati1 on Wed, 30th Sep 2015 9:11 pm 

    Well said, all.

  5. BobInget on Thu, 1st Oct 2015 8:49 am 

    http://www.livecharts.co.uk/MarketCharts/crude.php

    No one comes on stage to ring a bell ‘at the low’.
    The end of Q3 marked the worst year for crude
    ever. This, when climate, economic, and geopolitical indicators were mixed.
    I do admit, BC’s rearview mirror is flawless.

    Now,
    tighten your ball joints we are in for a choppy Q 4.

    Some may recall in January I called for $200 oil inter-day high with a year end close around $140.

    Things will pick up in Texas and North Dakota, of that I’m certain.

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