Here is my 2 cents for what its worth. The only way I can see oil being the cause of a great depression by its self is if there is a huge spike in price due to geo- political or military consequences. For instance what if Al Qaeda actually got their hands on a nuke and managed to nuke Saudi Arabia’s largest oil field.
It appears we have hit or will soon experience peak oil. When peak oil hits us there will not be a dramatic plunge in oil production but will be a decline never less causing a steady rise in prices which will help to facilitate investment in development of alternative energy sources. At that point the demand for oil in developed countries will start to decline. Developing countries will continue to use more oil due to the fact that they will most likely have to make upgrades or capital expenditures to use the new energy sources. It will be like the use of coal, which is used more by developing countries than developed countries.
Do You See a Pattern Here?
By any measure, the late 1990s was a time of extraordinary growth and prosperity in much of the world - and yet, the global financial system still managed to lurch through six crises: Mexico in 1995; Thailand, Indonesia, and South Korea in 1997 and 1998; Russia in 1998; and Brazil from 1998 to 1999. The Indonesian crisis was especially severe: The country's quarterly real GDP plummeted 18.9 percent, and its currency fell into a hole 526 percent deep. Each of these upheavals spread to most parts of the globe, destabilizing currencies, knocking gaping holes in bank balance sheets and, in many cases, causing a wave of bankruptcies. The fact that each country recovered and the global economy roared on again is testament not to good financial management but to good luck.
Originally posted by Gools
Has anyone developed a method to use the Tesla coil for energy needs? Is that what UFO’s are using? They way they move makes me think they are using the earths magnetic field or an energy source such as the Tesla coil. Sorry I got of post but I couldn’t resist.
Originally posted by Romeo
The US and the global economy is currently held aloft on a foundation of cheap money, borrowed at nearly 0% interest as leverage to support asset prices of dubious value.
If the cost of borrowing this money increases the whole thing falls apart.
An oil shock, inflation a USD crisis, increasing budget deficits etc etc pulls the foundations from this highly leveraged economy. IT IS NOT A MATTER OF "IF" but a matter of WHEN. Hedge funds, property funds, retail stockmarket players will all rush for the door.
Timing is always difficult. I've been playing this game for many years and no way is a nanotech boom or similar going to make this a soft landing.
maybe this year, maybe next. Personally my current model has it happening just prior to the "proposed" US presidential election a/w a conflict with NK. I think Bush will try and deal with it before he's removed from office and may even use the conflict to delay/suspend the election.
Either way, the last bit aside, the deck of cards will fall and YOU DO NOT WANT TO BE IN DEBT AND YOU NEED TO HAVE AN INCOME> GET ON WITH IT!!!!!
Cheers. Romeo, the happy gambler.
Prices surged three percent on Wednesday after a U.S. government report showed a fifth fall in as many weeks in heating oil inventories at a time when stocks would normally be building.
Heating oil supplies are also running low in other key demand countries, such as Germany and Japan.
"The recent rise in oil prices has thus been large enough to constitute a significant shock to the economic system," said U.S. Federal Reserve Board Gov. Ben Bernanke in a speech on Thursday.
WHAT IS TO COME
It is my belief that we are now embarked on a journey that will take us into a hyperinflationary depression. There may be brief deflationary spurts that punctuate this journey along the way, but an examination of history leads me to conclude hyperinflation is much more likely than deflation. Unlike the U.S. economy during the 1930s or Japan in the 1990s, the U.S. economy is no longer self sufficient in capital, manufacturing, and energy. And unlike the 1930s, our currency is no longer backed by gold. The U.S. is now the world’s largest debtor nation versus the world’s largest creditor nation as we were in the 30’s. We are no longer self sufficient in energy as we were during the last depression. We import 60 percent of our energy needs, a percentage that is growing each decade. We must also compete with other nations for the world’s last remaining barrels of oil as we enter into the twilight of the oil age. During the 30’s the U.S. created the Texas Railroad Commission to regulate oil and prop up prices because of the abundance of oil in this country. In contrast to the 1930s, U.S. oil and natural gas production decline each year. This forces the U.S. to import more of its energy needs, energy we pay for with dollars. When the world no longer accepts those dollars as payment, the full impact of inflation will hit home.
I would like to end with a quote from Jens O. Parsson’s book “Dying of Money.” It perhaps explains best where we are today and where we are headed.
“Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular general prosperity, all in the midst of temporarily stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the latter effects, but the latter effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock markets, rising taxes, still larger government deficits, and still roaring money expansion, now accompanied by soaring prices and ineffectiveness of al traditional remedies. Everyone pays and no one benefits. That is the full cycle of every inflation.”