Scarcity as the new paradigm

I was trading emails with a very smart friend of mine recently who had this to say:

There is no stopping the growing price of oil over the long haul, and there are no realistic alternatives to an oil-based economy. As a result, in my opinion, currencies over the next 10-25 years will largely be pegged to the value of oil, their dependency on oil / supply of oil, and the resulting health of their economy. Using this as one of many lenses to evaluate opportunities, the US economy is fucked. We have people that commute 80 miles to work in a car.

It's a point of view you're hearing more and more of these days. But I don't agree.

In the short term there is extremely low price elasticity for oil demand. In other words a modest increase in demand causes massive swings in price. It's this dynamic that has been driving the market recently.

However, the world can and will adjust for oil that is much more scarce. As my friend notes above it will make it impossible for people in the US to drive 2 ton SUV's 80 miles to work each day. It will also have major effects on global shipping, just in time business models, massive flows of cheap plastic goods
from Asia, and a lot of other things.

But I would strongly disagree that "currencies over the next 10-25 years will be largely pegged to the value of oil." And I don't think the U.S. economy is fucked. At least not forever.

The next 1-5 years may be rough. I think it's correct to say we've entered a new era of resource scarcity that's not just going to end. But over a 5 year period demand elasticity for oil is non-trivial -- and over a 25 year period almost anything is possible.

There are substitute goods for oil past the short term. There are ways to massively reduce consumption and divert to alternate forms of energy. For some things like air travel it's really hard. For things like home heating oil it's not hard at all.

For auto travel -- which fairly or unfairly tends to get most of the attention, as it's such an integral part of our lives -- it's a medium term shift that requires things like building rail lines, and people changing their habits and where they live.

What bothers me about the gloom and doom set is that I know this can be done in a generation, easily. I know this because we've already done it.

We built the interstate highway system almost entirely from 1950-1970, and we can build its replacement just as fast or faster. If we want to. And when the incentives line up, well then we'll want to.

Let's put it this way, if we could go from most people living in rural areas, to cities, to suburbs, all in about 100 years, we shouldn't be shocked if resource incentives cause another round of shifts over a 25 year
period. That's a long time, it's more than a generation. It's worth considering the change in living habits and demographics from 1925 to 1950 for some context.

The United States continues to be an incredible place for innovation. We have real problems that affect competitiveness (health care, infrastructure, and education high among them) but the economic capacity of the US is still astounding.

Betting that the US will cease to be wealthy and relevant isn't a bet I would take.

Comments

[Louis Vuitton Outlte]

In Edinburgh, renowned surgeon and now instructor of anatomy Dr. MacFarlane, persists to be spending John Gray, a cabman, to clandestinely deliver him exhumed bodies for the recently deceased for classroom demonstration purposes. With cemeteries getting progressively guarded, Gray turns to murder to provide MacFarlane with fresh new bodies. Realizing that he will by no suggests be rid of Gray, who continually taunts him with his information of MacFarland’s previous indiscretions, MacFarlane engages the malevolent Gray within of a hand-to-hand battle in the direction of the death, the ultimate last results of which provide the victor with an episode of unprecedented psychological horror.

[ewenni77]

Modeste variazioni possono deludere le aree in attesa di un trasferimento importante - ma sarebbe placare queste preoccupato che la situazione di stallo attorno condizione che può solo come dovrebbe distribuirlo è la shopping bag limitata con metodi economici,. [url=http://www.bootsebay.net/]Ugg Australia[/url] , "La Riserva Fed opzioni di solito sono limitata, però, non impoverito ", ha riferito l'economista Joshua Feinman finanziari con Deutsche istituzione. Non vi era alcun consigli dai la tua stessi Dato Mercoledì per la messa a fuoco con i negoziati. Scorso raggiungendo su 9 agosto il FOMC reale ha prodotto alcun pegno e mantenere i tassi in aggiunta, [url=http://www.bootsebay.net/boots-uomo-wholesale-35.html]stivali uomo[/url] , ultra-basso range per soli due anni di gran lunga più numerosi, uno sforzo per migliorare quella fiducia in se stessi commercianti opzione in merito che possa riuscire a sollevare il particolare situazione finanziaria più impostare i lavori - il problema principale di pertinenza del governo ci attualmente.

[Jimmy Choo UGG]

Diese individuelle beenden zusammen mit Demut gedemütigt - Ihr fernen folgenden zu können Herman Caine, dass männliche durch Paten Pizza, die [url=http://www.uggkaufen.net/]Online-ugg[/url] , saldiert 37 Prozent für Sie bis fünfzehn% Perry. Dieser begleitet Perry Stolpern Debatte Leistung und auch das Hämmern Wettbewerb begabte ihn mehr als die Regelung mit ermöglicht auf diese Weise mit illegalen Einwanderern in-state Kosten für die Ausbildung von Texas öffentlichen Fakultäten decken. "Es könnte möglicherweise slicker Bewerber werden zusammen mit noch weicheren Diskutanten werden könnten doch ich bin mir bewusst, was ich wirklich glaube, ganz, zusammen mit I werde eine Position in dieser wird die Wahrnehmung an jedem einzelnen Tag, nehmen bin" Perry erklärt. "Ich kann Führer dieses Landes, das eine tief tief Ruder hat. " [url=http://www.uggkaufen.net/kids-stiefel-wholesale-2.html]Kinder stiefel[/url] , Original Massachusetts Gouverneur Mitt Romney, dass Spitzenreiter bis schließlich Perry abgerufen diesem Wettbewerb schließlich Platz beschafft, kämpft für Sie die Begeisterung mit GOP Wähler zu mobilisieren.

[UGG Outlet]

The best website……

[Moncler Outlet]

So admire for your idea, which is so wonderful!