Who is the Real Enemy?

A reader recently emailed:

I heard recently on the radio that some people believe that the radical Muslims will try to ruin our economy by getting oil up to 300 dollars a barrel.  Have you heard anything about this?”

I don’t think radical Muslims have the power to do anything like that. Sure, a terrorist act can cause a temporary increase in oil prices, but the effect will be temporary and not near the magnitude you mentioned. The Muslim countries can influence the price of oil, if they all work together, because they control most of the oil production. But the Muslims for the most part are moderates who are as interested in keeping the dollar intact as we are, because they are getting the money=power anyway because they own the oil that everyone needs including China and India. The radicals are just too small and insignificant to bring about anything like what you mentioned. However, that won’t prevent many Americans from using them as scapegoats as this crisis continues to worsen. You can count on the politicians to use all sorts of scapegoats to get the attention away from the real guilty parties.
Oil prices will continue to go higher and higher. Yes, $200 and eventually even $300 oil is in our future. But it will probably have little or nothing to do with radical Muslims. Oil prices will continue to climb, but it will be due to the supply and demand fundamentals.
Back in 1956 geologists M. King Hubbert predicted that oil production in the U.S. would peak in the 1970’s. At the time the US was the world’s largest oil exporter and people thought Hubbert was crazy. Well, guess what happened in the 1970’s…Hubbert was right! Today, the US is the world’s biggest oil importer! Then, in about 1995 several analysts used Hubbert’s methods and predicted that world oil production would peak between 2004 and 2008. Again they were right! At a time when demand is growing (aided to a large extent by demand from developing economies such as China, India and Russia), world oil production is irreversibly declining.
The math is simple: Increasing demand and decreasing supply means higher prices. And the impending crisis will ultimately be far greater than almost anyone can imagine – some are even predicting a large depopulation of the Earth is in our future – as famine strikes as energy dependent agriculture suffers resulting in soaring food prices.
For those of us in the US, the problem will be compounded by a continually declining dollar, making energy prices even more acute for us than for those with currencies that are not declining as fast as the dollar. Add to that the foolishness of our politicians, who in their myopic idiocy have accelerated the decline of the dollar, and come up with such stupid ideas as burning our food (subsidizing ethanol production from corn) in a foolhardy attempt to help keep the tanks of our SUV’s full, while our grocery prices skyrocket. (In short, don’t expect the people who got you into a fix to be able to get you out of the fix.)
In any crisis, people will look for scapegoats. Wars over resources will be inevitable, many being  started under the guise that it is somehow “their” fault. Don’t fall victim to the propaganda. It is simply supply and demand. How can you protect yourself? Buy precious metals, which in dire economic times will increase in value as the dollar collapses and inflation soars out of control.
Getting back to your question: Even it that were true about the radical Muslims, it would be but one drop in the bucket, because no one could do more damage to our economy than that already done by our congressmen – a 9 trillion dollar national debt, and 55+ trillion in unfunded liabilities, all because they stole the money that should have gone toward the social security “trust” fund. Our economy is irreversible headed toward collapse, with the total collapse of the dollar inevitable. That type of damage could only be done to ourselves by ourselves. In my opinion, there is no need for excessive fear over radical Muslims. The people to fear are in Washington, because as this crisis continues to unfold, they will continue to find scapegoats (which will lead to more wars – like Iraq) and reasons to curtail our freedoms, all under the guise of protecting us, as they slowly but surely dismantle the Constitution and build a larger Central Government. The thing I fear most is big government=socialism, and the kind of totalitarianism that Americans will be all too willing to tolerate and embrace when the crisis reaches its peak. I fear those in Washington far more than I fear anyone abroad.







4 Responses to “Who is the Real Enemy?”

  1. 1 Aimee June 3, 2008 at 3:57 pm

    Please. People need to stop blaming muslim people for the oil crisis. Ignorance isn’t a good thing. People need to know what really is going on. They’re being fed lies. Please, don’t allow this continue. The prices are getting tooooooo crazy. We’re almost at the peak. Have you seen what oilheat users have gone through? Crazy. I think the best option for them right now, is to switch to bioheat. Green is the biggest thing right now, so why not go green with oil. Current oilheat users can use a B5 blend and reduce emissions, eliminate greenhouse gases, and most important of all help conserve 400 MILLION gallons of oil. Working for NORA, I have been able to research many heating alternatives, but bioheat always tends to stick out as a huge help to existing users. Here’s a link with more info: http://oilheatamerica . com/index.mv?screen=bioheat

  2. 2 survivalist June 4, 2008 at 9:39 am

    “The prices are getting tooooooo crazy.”

    I’ll have to disagree with that statement. Although they are higher than what we are used to here in America, Gasoline is cheap at $4 a gallon. You will see that double, then double again, and then you will say, “Wish gas prices were $4 again! Wow, were we lucky back then and we didn’t even know it.”

    I agree with you that alternatives are the answer (along with conservation.) We will have to pursue all alternatives, which will become more economically feasible as oil prices continue to climb. One good thing about rising oil prices: It makes alternatives, many of which are much more environmentally friendly, more economical. The free market will eventually fill in the gap. But in the meantime, perhaps for another 50 years or so, we will suffer and the world as we know it will change.

    The problem is, we use oil for over 90% of our energy needs. And at the present time there just aren’t adequate alternatives that can make a significant difference in the immediate future. So we are in for soaring energy prices for a long time to come. Yes, peak oil has come and gone, but the oil isn’t gone, THE CHEAP OIL IS GONE! And unfortunately, we have become dependent on CHEAP OIL, for most of our energy needs, including agricultural production. So soaring food prices are also in our future, and much of the world will not be able to afford those higher prices.

    Bioheat is eventually one of our solutions, along with wind, solar, nuclear, etc. But let’s see you fly an airplane with bioheat. There are simply no adequate alternatives for cheap oil, at the present time. The changeover is going to be long and painful.

  3. 3 dkalense June 15, 2008 at 7:30 am

    I agree the Peak Oil Plateau is the fundamental factor in the price of oil. This plateau of supply with continued high demand will insure higher prices for oil in the years to come. Of itself, however, Peak Oil is not a problem which cannot be overcome by the Western Capitalist Democracies. As prices rise, demand will decrease for oil (very high oil prices will create recession in the West which will sharply cut demand) and alternatives will become a more pressing issue with technology producing solutions which are economically viable. Also, there is every reason to expect very high oil prices to motivate the Chinese to develop an infrastructure which works around oil rather than through it (as was done through it in the West during the years of cheap oil). In short, when Peak Oil reaches a given threshold, the problem will be solved by technology.
    But in the immediate future, there is a period to transit with very high danger. Western Capitalist Ideology has steadily advanced since the inception of the industrial revolution in the nineteenth century. All challenges to its eventual world dominance have steadily been overcome through two world wars and many smaller wars. The pattern of capitalism/democracy has had a steady, seemingly irrevocable march, but now it faces two major challenges for the coming period. China represents a new model of true state sponsered Capitalism, which is a sort of experiment in how far can a free market can develope with a behemeth state firmly exercising total political control— and also ultimate economic control- a very different model from that which has triumphed in the West. The other, smaller challenge, yet one which threatens severe disruption in world trade, and has the capacity to delay the benefits of a world- wide economic order of free trade and free markets- is radical Islamic Fundamentalism (perfectly personified in the person and character of Osama Bin Laden).
    For many years to come, Saudi Arabia will be the key to stable economies in the Western Societies. Time is needed to develop technological alternatives to the western dependence on middle eastern oil. This is where the very real threat of Islamic Fundamentalists lies. The ruling house of Saud in the Kingdom of Saudi Arabia has been characterized as essentially a creation of western oil companies in concert with western governments. This Royal Family is Bin Laden’s real target. In a way, the whole current struggle with Islamic terrorism can be characterized as a kind of Saudi Arabian civil war, with the US propping up the house of Saud, in the midst of a population who more readily identifies with the Al-Qaeda (the Foundation) which seeks to create a powerful Islamic Caliphate (worldwide Islamic community ruled by the Shari’a (Islamic law). If a successful revolution in Saudi Arabia could be realized by Al-Qaeda, then yes, an oil price spike like never before seen could occur which might provide the greatest challenge in the history of Western Capitalism. This is the reason for the present investment of the United States in the ‘war on terror’ and its investment in Saudi Arabian ‘defense.’ Though this ‘war on terror’ is an asymetric struggle, it is one fraught with great dangers… this is a struggle the west cannot afford to lose, because time is needed to free our world of one hundred years of oil dependence. If this struggle is won by the West, only China remains in the way of a world economic order, and there can be every hope the Chinese will join us rather than oppose us. dkalense.

  4. 4 survivalist June 16, 2008 at 7:55 am

    “In short, when Peak Oil reaches a given threshold, the problem will be solved by technology.”

    That’s what I call the “Magic Wand” solution. Technology will wave a magic wand, and instantly all the infrastructure will be in place for us to change our society over from oil to new energy sources.

    I have often said that technology will ultimately provide many of the solutions, but the whole problem is in the timing. Anyone who has been at the gas pump recently knows that the problems of peak oil are with us right now. And this is just the beginning of the birth pangs. It will get much worse before technology will have time to fill in the gaps. Oil expert Zapata George just last week made the prediction that within 36 months we will experience gasoline rationing in the U.S.

    The problem is: CHEAP oil is gone, and it will take years for technology to solve the problems resulting from our withdrawal from cheap oil – and we don’t have years! So in the meantime, things are going to be tough for most of us, and many people around the world will suffer the ultimate cost.

    It takes at least 10 years to build a new nuclear plant, and that assumes that you already have the permit in hand. In some cases it can take 10 years or more just to get the permit, and our government is certainly showing no insight into the matter, nor any inclination to help solve this problem. In fact, if past actions are any indication of what we can expect from the government, then most of what the government will do will actually make the problem worse. Deciding to subsidize ethanol production from corn (burning our food in order to support the sale of gas-guzzeling SUV’s) is a perfect example of the kind of “solutions” that we can expect from our government! Or the “let’s tax the American oil companies” solution, while everyone knows that taxing something makes the price go up, not down.

    Even when a new oil field is discovered, it can take years before that new oil comes online. And that ignores the fact that there has not been a major new oil discovery in years. Oil production has “peaked” worldwide remember. We are on the downward side of that slope.

    Here’s just one example of what I am talking about when I speak about building a new infrastructue:

    Back in the late 1980’s, after years of discussion and debate, the city of St. Louis decided to build a light rail (Metro) system. It took 10 years just to build the first line, giving us one line that ran East and West. Then it took ANOTHER ten years to build the second line. Wow! Now we have two lines in St. Louis – one that runs East and West, and one that runs North and South! But that is not nearly enough to make a significant difference in the city’s traffic, (although admittedly it’s a start.) Most people in the city are still way too far from a Metro line for it to make any difference in their lives. It has been estimated that it will take another 50 years before St. Louis will have a Metro system that can actually make a significant difference to the traffic flow! Many of us won’t even be alive in another 50 years!

    Many people thing that solar and wind power will solve our problems. Perhaps some day they will make a significant contribution. But due to the huge lag effects, unfortunately that won’t be in our life times. The technology is not there yet and it will take years of additional research and development for these to come online to any significant degree. Then it could take decades to build the new infrastructure needed for a new technology.

    The point is, the technologies that might have the potential to help solve our energy crisis (most of which are still on the drawing boards) will, under the best of circumstances, take decades to make a significant difference, and we don’t have decades! So in the years to come, for the remainder of the lives of most of us who are adults today, the problems of peak oil are going to be with us, and things are going to get much worse before they get better.

    It may sound like I’m a pessimist. But that is far from the truth. I am a realist. I know that ignoring a problem will not make it go away. The best defense is to look the problem square in the face and prepare ourselves for what we see coming. The government and the media has ignored and minimalized our problems for far too long. This is because politicians know that they are more likely to get re-elected when things are going well. And the news media can sell more advertising when people are consuming, which they do when they feel good about things. It is time that people get off the drug and take a look at reality. That is the purpose of this blog – to help people take just one step in that direction.

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