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Page added on September 29, 2009

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Jeff Rubin warns of imminent rise in oil prices to triple digits

Jeff Rubin, a former Bay Street economist, spoke Thursday on why he believes imminent triple-digit oil prices are going to reverse the tides of globalization. The talk stemmed from his new book, Why Your World is About to Get a Whole Lot Smaller.

Rubin’s main point was that the upcoming irreversibly high oil prices will make transportation extremely expensive and render a global economy impossible. The result, he argued, will be the re-emergence of local economies.

“In a world of triple-digit oil prices, there’s no avocado salad in Toronto and Montreal during the winter, because the cost of flying in the avocados is going to make that avocado salad more expensive than a steak sandwich,” he said.

Rubin offered several explanations as to why oil prices will soon rise significantly. First, he said that today’s most important oil sources, like the Athabasca Oil Sands in northeastern Alberta, are far more expensive to use than prior supplies. Another problem, he said, is that prices in oil-producing countries like Saudi Arabia and Venezuela allow unhindered consumption. Finally, cheap cars in India and China, such as the $2,200 Tata Nano, are adding to the existing explosion in world oil demand that undermines consumer cutbacks on oil use in the United States and Canada.

“Every person who gets a Tata gets a straw to start sucking at a world gasoline supply that has not grown in the last four years. The more that they suck, the less that we suck, and what we do suck and slurp up costs us increasingly more,” said Rubin.

For these three reasons, Rubin argued, oil will soon be scarce and priced incredibly high. Contrary to mainstream opinion, Rubin also claimed that oil prices, and not sub-prime mortgages, caused the current global recession.

McGill Tribune

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