Crazy stuff.
Probably in response to the civil war in Libya and the blowing up of the refinery in Baiji, Iraq today by Al Qaeda.
There’s no way the price can stay that high without cooking the recovering world economy.
We are going to see more and more of these oil shocks in the future.
The growth of China. Every $ of GDP growth in China uses 2X as much energy as the same growth in the US. Cheap labor is very expensive energy wise and we are paying for that.
Refusal to deal with Climate Change. The world’s climate is getting increasingly volatile, and effects are being seen in harvests of basic stables. The price of wheat has risen 3X recently. This has hit 3rd World countries very hard and has probably done more to lead to the Arab revolutions than any other factor. A 3X increase in the prices of staples while elites wallow in billions is too bitter of a pill to swallow. These revolutions in turn are driving up the cost of oil.
Refusing to move off oil. We have trillions to bail out banksters, but not one red cent to move off oil. Nuts.
Refusal to allow bankrupt ultra-wealthy people to actually go bankrupt, like everyone else does when they make bad bets on this or that economic activity and eat all their savings. Who among the rest of us gets bailed out when we go bankrupt? Only the rich. Only the rich can go bankrupt all they want and get bailed out every time. These has left the ultra-rich with a tremendous amount of money to gamble away in the financial casinos. In particular, they are gambling on derivatives involving staples such as wheat and rice.
This has been one of the main factors driving up the costs of these staples. One would think that in a rational world, the ultra-rich would not be permitted to drive up the prices of basic human staple foods by gambling on them in the derivatives casinos of London.
So what’s the viable alternative right now that is as easily accessible and easy to produce as light, sweet crude? When it comes to the amount of energy you get for the amount of energy it takes to extract and produce it for the market, there’s just nothing that comes close to it. I don’t see us going off of oil anytime soon. The price would have to go up and stay up in order to make alternates economically viable for producers. But what always happens? Gas prices rocket up, everyone goes nuts and starts calling for alternate energy, then prices go back down for awhile and people shut up. Rinse, repeat every few years. Then even if we get people into electric cars, the drain that puts on lithium reserves(most of which are in Bolivia) is going to send the price of batteries up for everything.
I think there’s only 3 long term solutions. 1) A viable way to collect solar energy for all of our energy needs. The sun produces more energy in one second than humans have spend in our entire history, and it will continue doing so for 10 billion more years at least. Can’t ask for a better power source. Unfortunately the technology to capture it is pitiful. 2) Reduce the world population. You would need like 7 earths to produce enough resources for the entire global population to live at American standards of living. In the best case scenario you might need 3 earths. There’s just too many fucking people. Period. Or 3) Use what we have more efficiently. No more big houses with 3 car garages in suburbs and one way commutes to work. We start building American cities like Japanese cities. Dense and vertical with people using public transit to get around. No more of this burning a gallon of gas to run to the store for a gallon of milk like we do in America.
The solution may be a combination of all 3.
good points tulio. I’m a big fan of number 3
“3) Use what we have more efficiently. No more big houses with 3 car garages in suburbs and one way commutes to work. We start building American cities like Japanese cities. Dense and vertical with people using public transit to get around.”
I’d agree with that. The problem is really bad in St. Louis. If you have no car in St. Louis, then you can literally do nothing, and it’s getting worse. In the recent census, St. Louis city lost 8% of it’s populace and 25% of it’s school age populace. Outlying counties to the northwest saw gains of over 30% in their population. These people literally have to drive 1 hour plus into St. Louis City and county every morning. The city school system is horrible in St. Louis. They only people who live in the city are poor blacks, whtie yuppies, post child rearing age white people, and homos. (THAT IS NOT AN EXAGGERATION OR A JOKE!) No one with kids want them to go to city schools and the catholic schools which were the alternative in the past are too expensive now. The other problem is that everytime that there is some develpment in the city, blacks bitch about “gentrification”. It happened just a few years ago when it had been revealed that a developer had been buying up property in wasteland north st. louis where there are more vacant lots and abandoned houses than there are occupied houses. Shortly after the revelation to the public a housing development nearby was torched. It’s a damn shame what has happened to this city in the past 50 years. When my mother was growing up it was a great place to live. Now it a shithole surrounded by a bunch of droll suburbs.
“Every $ of GDP growth in China uses 2X as much energy as the same growth in the US. Cheap labor is very expensive energy wise and we are paying for that.”
There are a few things I want to point out- most of China’s industry is coal powered so it won’t affect fuel prices as much. They do of course use oil to ship, but oil consumption in China is less than one half of America’s with more than four times the population. It’s industry that is energy intensive, and China’s doesn’t really stand out in that regard.
Second, natural resources and other assets do not translate meaningfully into GDP. In America we have hundreds of thousands of people sitting around in their offices creating nothing but economic bubbles and wealth transfers to the top 1%. Their salaries are “GDP” but they create no wealth, only destabilize the economy and engage in financial games with far more losers than winners.
Third, China is serious about renewable energy. America’s biggest activity was to actively try to kill innovation in China and stifle investment in renewables. If China wants clean energy it’s a “trade cheat”, if they don’t they’re an environmental menace.
If you really get into the details you’ll find more and more that China is somewhat good and the US is overwhelmingly evil in terms of environment, equality, etc.
Not embracing alternative fuels make no sense on any level. Why is this so hard for the average person to see?
http://www.cracked.com/article_19048_6-important-things-you-didnt-know-were-running-out-of_p2.html
There’s no way the price can stay that high without cooking the recovering world economy.
A few people are becoming very rich as we speak. they could care less about the recovering world economy as long as they “get theirs”.
There is a bit of balance that has to be played. They want to keep oil as high as they can without taking the global economy. Once the economy tanks and demand goes down, then they’ve hit the point of diminishing returns where raising prices reduces their profitability. And if it stays high for too long, then it becomes economically viable to invest in alternative energy and build more public transit which the oil industry obviously doesn’t want. So they do have parameters to work between.
There is a dance to this, a hypnotic lulling. Prices rise, they fall a little, stabilize, rise, fall a little, stabilize, and the net effect is obviously an increase over time. I paid $3.756/gallon at the cheapest place for the crappiest grade at a really cheap scumbucket ghetto station tonight. It’s so sly.
robert This has hit 3rd World countries very hard and has probably done more to lead to the Arab revolutions than any other factor.
It’s the number one reason and expect more from other third and second world countries.
Rob, why no new posts? You’re blog is getting stagnant.
Sorry, man, I’m really tired these days. Sleeping a lot.
*your