Thursday, December 31, 2015

"The collapse in the price of oil is a challenge to the old world order."

The West will be hoping that the existing Gulf regimes aren’t replaced by something worse, while also hoping that the collapse in the price of oil will reduce flows of cash to extremist Wahhabi and Salafist groups around the world. If radical Islamist terror groups end up being the biggest losers, the collapse in the oil price could yet end up achieving more than sanctions or Western military intervention ever could; but a successful uprising in somewhere like Saudi could also risk turning a bad situation into a catastrophe. . .
As for Scotland, the nationalist electorate will eventually have to wake up to the new reality of a world awash with oil. The SNP’s plans for independence didn’t even come close to adding up even when the price of Brent crude was over $100 last year.
At current prices and with output sliding, an independent Scotland that sought to retain the NHS and the welfare state would face immediate bankruptcy.
Forget about politics and slick campaigns: if anything keeps the UK together over the next few years, it will be cheap oil and the latest, abject failure of Malthusianism, one of the most wrong-headed ideologies of the past 200 years.


Anonymous said...

Time to face it. Oil really is everywhere all over the planet. The Saudis have known it for a very long time, so have their buttboy American dhimmis. The only way to keep the dhimmi status alive was to convince people that ....wait for it..... drilling for oil was killing the planet. Global warming. Ahem.

Enough is enough. The American model of using oil to lubricate the economic engine, rather than the muslim model of oil BEING the engine, has once again proven to be the right way to go.

Now, lets put our drills in the ground, on the white house lawn if need be, and tell the muslims to go ahead and eat their oil.

Sorry about their luck.

Anonymous said...

Oh, this writer is good! He tries demonizing the Malthusian/Fabian Socialist/Darwinian/Globalist plans and mindset by using Malthusian/Fabian Socialist/Darwinian/Globalist arguments.According to him we're all going to limit ourselves in the area of childbirth to conform to the "Brave New World" scenario of Aldous Huxley (Brother of UNESCO head Julian Huxley). And he cleverly sneaks in the idea that GMO's, (although he never uses that term, but certainly alludes to it) and chemical fertilizers are the great saviors in feeding mankind; forgetting to mention that they change genetics far into the future (like maybe forever) and feed plants through chemicals that end up offering absolutely no nutritional value at all. Eating the food packaging might offer the same nutrition as the product itself. And then he champions Globalism while beating the daylights out of nationalism by using the example of Scotland, because, he says, they would go bankrupt from their socialist policies if they went independent from the UK. That right there proves that socialism keeps you locked into a serfdom that the people don't want but now have no way of escaping! Like a heroin dealer keeping someone locked in their basement, shooting them up with heroin everyday for two weeks, and then saying the guy could have left anytime he wanted to - if he wasn't addicted to heroin.-- By this point I've forgotten other nuances of this writers brainwashing techniques, but I will go back and read him again; if for no reason other than a good laugh.. And BTW: Does anyone else see through this guys smoke-screen, or is it only me?

Chiu ChunLing said...

"At the same time, the slowdown in China has reduced demand for energy."

The slowdown isn't just in China. While it is true that improved technology can increase exploitable energy supplies, this only happens when the price is increasing over the long-term. The dramatic collapse of oil is partly attributable to improved extraction technology, which by itself should only have caused prices to stabilize at a reduced rate of increase. The rest of the collapse is the result of reduced real demand, which has fallen far below levels on which the investment in new technology was predicated.

It isn't just oil that is collapsing dramatically, but nearly all raw materials. This cannot be the result of improved extraction technology in so many divergent fields at once without affecting manufactured goods even more dramatically (a general technology improvement would affect goods subject to more processing multiple times, rather than only at extraction). That raw materials are dropping in price while consumer goods increase in price can only mean that the manufacturing capacity is not growing in line with demand for goods or supply of materials.

And, looking at the numbers for manufacturing, we can see this is obviously true. Raw materials have seen increases in supply due to improved technology, but the drop in demand has been far greater. In essence, the real economy has already collapsed and the only people making money anymore are the ones involved in conjuring it into virtual existence by lending us what they never actually had.

Historically, this kind of situation always ends badly.