The current situation is extraordinarily complex but it
doesnít hurt to take different cuts through history.
From the time of the Industrial Revolution the base
energy source turning our "wheels of industry" has consistently
reduced in price, albeit with the occasional hic-up.
According to M. A. Adelmanís estimate (in the early
sixties), the total cost per barrel of oil from the Middle East was 4 to 10
cents against $1.56 for American oil. (Petroleum Press Service, May 1966)
Since the US oil industry kept going and didnít just
fold, this means the oil companies profited greatly from the Middle East
margin, investing in every conceivable oil consuming technology. This is the
dynamic that shaped the last fifty years of the 20th century, punctuated by
recessions that have always followed oil price hikes.
The good side of this observation is that the whole
make-money-by-burning-oil equation means that there is an incredible amount
of waste in the productive system that can be profitably eliminated, if
The bad thing is that, just as no-one seems to have
noticed that there is a limited supply of oil on this Earth, no-one will
have noticed that there is a clear link between the economy and burning oil.
And so the whole house of cards built on the holy dollar
will likely collapse.
Then we will descend into absolute misery ó the die off
that some expect.
It neednít happen but it probably will.
GWB hasnít noticed apparently, that you need oil to
fight wars... or that it is plainly stupid to fight wars in countries that
you import the stuff from.
The US went into WWII as the worldís major supplier of
oil. Now, as he apparently is piously going to take us all like lambs into
the next war, the US is the major importer of oil. He doesnít see the
significance of this change.
He hasnít noticed that President Ford pulled the US out
of Vietnam in 1975 after the cost of prosecuting the war went through the
roof due to the quadrupling of the oil price, which concurrently induced
If the US is unable to prevent the high-jacking of planes
on its own soil and their transformation at low cost into extremely
destructive weapons, pray tell how is it going to be able to prevent the
blowing up of oil wells, in Iraq or in Libya or Nigeria or Saudi Arabia. It
will take considerably more intelligence than is currently on display.
Without in any way deprecating American entrepreneurship
and ingenuity, its power stems from its command of money and what money can
buy. Take away what drives the money making machine and what have you got,
impotence, and a serious survival problem.
Against all current wisdom, those who survive now with
relatively little money will be much better off than those who absolutely
depend on it, those of us (in the "Free world") whose invisible
article of faith is: