oil's well that ends...
Oct. 29th, 2007 09:42 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chelidonOil sets new record above $93 (subhed: Decision by Mexico's Pemex to suspend a fifth of its oil production due to a storm pushes crude to a new intraday record.)
At this point, every little thing causes oil prices to skyrocket, then settle down higher than before. Some of that is speculation, much of that is the fact that demand keeps rising, while supply has plateaued (i.e, "Peak Oil). Don't even think about what would (and at some point, will) happen if there was a real actual major supply disruption or crisis, such as an invasion of Iran or other Mideast war.
Eight years ago, oil was around $12-13/barrel. After a brief spike up to to then shocking levels of $35/barrel, by the time of 9/11, about 5 years ago, oil was somewhere around $24/barrel. It'll cross $100 soon. Even ignoring all the very real Peak Oil issues and constraints in both supply and refining capacity, even if the "real" oil price remains constant (which it won't), oil will still keep getting more expensive to those of us in the U.S. because oil is generally priced in dollars, and the dollar is falling, and continues to fall, against other major currencies (as well it should, given the huge debt load Bush and Co have incurred by spending hundreds of billions of dollars we don't have on the Iraq war while simultaneously cutting taxes for the wealthy). In fact, the historical pricing of oil in dollars is one of the flimsy supports still holding the dollar's value artificially high. Should major oil-producing countries start to price oil in a healthier currency -- say, Euros, the dollar will likely plummet, and at some point thereafter, the foreign countries (like, oh, China) holding massive amounts of U.S. debt, may well bail out (you do not want to hold debt based on a falling currency, because then your entire investment becomes worth only a fraction of what you paid for it). At that point, things get really, really ugly here (the wee little sub-prime mortgage crisis is nothing compared to a crisis based on the entire U.S. national debt financing scheme).
To-do list:
1. become more energy-efficient and self-sufficient
2. Pay off personal debts wherever possible
3. Build useful skills
4. know where your food and water comes from, invest in local and low-energy alternatives (keep your local farmers happy!)
5. kick the bums out and get a hopefully somewhat less utterly insane government, who if not able to make things better, will at least stop making them worse at every turn
6. hope for the best
7. plan for an uncertain future
Probably all good ideas in general, but even better ideas now.
At this point, every little thing causes oil prices to skyrocket, then settle down higher than before. Some of that is speculation, much of that is the fact that demand keeps rising, while supply has plateaued (i.e, "Peak Oil). Don't even think about what would (and at some point, will) happen if there was a real actual major supply disruption or crisis, such as an invasion of Iran or other Mideast war.
Eight years ago, oil was around $12-13/barrel. After a brief spike up to to then shocking levels of $35/barrel, by the time of 9/11, about 5 years ago, oil was somewhere around $24/barrel. It'll cross $100 soon. Even ignoring all the very real Peak Oil issues and constraints in both supply and refining capacity, even if the "real" oil price remains constant (which it won't), oil will still keep getting more expensive to those of us in the U.S. because oil is generally priced in dollars, and the dollar is falling, and continues to fall, against other major currencies (as well it should, given the huge debt load Bush and Co have incurred by spending hundreds of billions of dollars we don't have on the Iraq war while simultaneously cutting taxes for the wealthy). In fact, the historical pricing of oil in dollars is one of the flimsy supports still holding the dollar's value artificially high. Should major oil-producing countries start to price oil in a healthier currency -- say, Euros, the dollar will likely plummet, and at some point thereafter, the foreign countries (like, oh, China) holding massive amounts of U.S. debt, may well bail out (you do not want to hold debt based on a falling currency, because then your entire investment becomes worth only a fraction of what you paid for it). At that point, things get really, really ugly here (the wee little sub-prime mortgage crisis is nothing compared to a crisis based on the entire U.S. national debt financing scheme).
To-do list:
1. become more energy-efficient and self-sufficient
2. Pay off personal debts wherever possible
3. Build useful skills
4. know where your food and water comes from, invest in local and low-energy alternatives (keep your local farmers happy!)
5. kick the bums out and get a hopefully somewhat less utterly insane government, who if not able to make things better, will at least stop making them worse at every turn
6. hope for the best
7. plan for an uncertain future
Probably all good ideas in general, but even better ideas now.
