Wednesday, June 3, 2009

My View on Where the Economy is Going

Just a few random thoughts on the economy. There is now all this talk of the recession ending this year, "green shoots" (, etc. I find it hard to buy any of this. Take California's financial woes. They're the 9th largest economy in the world (, and they're asking the federal government for TARP money, after their attempts at budgetary reform failed last week. Does that sound like a recovery is just around the corner?

Also, look at the price of oil, which is heading to $70 a barrel (assuming it isn't there already). I notice that the price of oil rises and falls depending on whether the stock market rises or declines. What should terrify all of you, assuming that Peak Oil ( is already here, is that if the economy does recover (or when it does), the price of oil will inevitably rise as a result of increased production, and the recovery will be halted as a result. So, in a PO future, I see the world economy in a continous rut, with an occasional false recovery that will have no clothes as a result of peak oil. There very well might not be enough oil left to sustain a strong recovery. I know this sounds scary, but just calling it as I see it. Please take my observations on the economy with a strong pinch of salt, as I am far from an economist. But entertain them just the same.

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