Tuesday, September 4, 2012
$100/bl. Oil: The Death Knell for Industrial Societies?
I'm sure I've talked about this at least once since I started this blog, but it always bears repeating: when the price of a barrel of oil reaches a certain point, such as $100, the economy begins to stagger and loses whatever momentum it had. The really bad news is that when the crash happened back in '08, the economy was overheating from the effects of the real estate bubble. But this time, the economy is already in a severely weakened state and people are already hurting. If oil keeps climbing until the economy as a whole faces a similar crisis to '08, I believe that it will dawn on more people that there will be no recovery, that the way things have been for the past 5 years will be, as they call it, the "new normal" with things only deteroiating over time. My theory, is that the economy will weaken due to high oil prices, and so, oil prices will go down for a time. But, as things improve and there is talk of an economic "recovery", oil will slowly shoot back up, until we find ourselves in the same situation, where we're struggling to maintain economic growth while the lifeblood of industrial society becomes more and more valuable. In the meantime, everyday living will become more tenuous and strained.
I have discussed this with people over the years, and have met my share of naysayers, but I still believe the economic crash back in 2008 had a lot to do with the rising costs of oil. Yes, the shenangians and the illegal activities on Wall Street played a key part as well, but the oil situation at that time does not seem to have been given its due in media or elsewhere.