>I just encountered two articles at my library that strengthens my
>belief that we are beginning to see the end of cheap oil NOW from how
>we've always known it.
Good article with some interesting points, but I feel the need to quibble
a bit.
The problem is that oil _is_ cheap, even at $50 a barrel because while a
barrel of oil is real, the dollar is not.
The "oil crisis" of the '70s was triggered by Nixon's decision to remove
the dollar's gold backing and OPEC's rational response to his decision.
Now, we're facing a similar situation. The world is being flooded with
dollar denominated debt, a tidal wave which is going to affect the dollar
denominated "value" of all commodities.
People talk about "fifty dollar a barrel oil" as if "fifty dollars" means
something. It doesn't. Each dollar is just a drop in a vast sea of
unsupported, unredeemable debt, and as foreign investors start to catch on,
the dollar is going to continue to fall in value. In short, it isn't so
much a matter of the cost of oil going up, but rather the value of the
dollar going down.
Walt
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