If you haven’t read up on Jeffrey Brown’s (aka Westexas on The Oil Drum) Export Land Model, please do so. This will be one of, if not the most important factors affecting the price of oil, and therefore the world economy over the next decade.
CNBC had economist Jeffrey Rubin on one of it’s live shows this week to discuss future energy prices, and it’s obvious that he both gave them an answer they didn’t care for, nor one they could easily refute.
Watch and learn:
Oil prices will bounce around, but the general trend is up, at least until the price gets high enough to initiate serious demand destruction across the world. I doubt any of us will celebrate $50 oil when we’re unemployed & scrambling to secure the basic necessities of life.
Mr. Rubin talks of $100 oil as a given, but I think he’s soft-pedaling this a bit. We’re going to hit $100 oil without a problem just from the dollar continuing to lose value. $150 oil, anyone? This is another sign of growing recognition that we have problems looming with energy. For most folks, the stories in the mass media are usually about issues with spot shortages or seasonal price spikes. The stories concerning long-range, permanent increases in energy prices are usually limited to economics or political media. How long this remains to be the case, we’ll see.
If you’re an American, the prospects for coming years aren’t that great. The dollar will likely continue to fall to historic low levels, energy & food prices will continue to increase, we’ll be stuck in a seemingly endless war in the Middle East that solves little (other than to enrich military contractors at our expense), and the Iron Triangle will continue to insist that things are going great.
The main idea is to keep the current game going as long as possible. As long as we continue to buy stuff we don’t really need and rack up more & more debt, those nations whose manufacturing bases has grown by selling to the USA will continue to feel they have little choice but to keep on buying US bonds, and everyone gets one more quarter of party time… that’s really where we’re at these days. There are no serious long-term fixes being planned, folks. It’s almost as if the powers that be are either oblivious to these looming problems, or they have decided for one reason or another that running into the wall is the best path forward. We have so much invested in our current way of life (both psychologically and monetarily) that I don’t know for sure which it is.