Riot Police

There had been discussions in length on many news article on how will this economic crisis play out, will it be the beginning of massive social unrest and political instability or worse?…Global Conflict?

I had been warning the world ever since my first post on my very first energy crisis blog but I am not really happy to say the “I told you so” to the world.

This economic crisis have many fronts and currently the finger is  pointing to the greed of bankers that caused the sub prime credit crisis in the first place however I kindly beg you to look at the bigger picture.

Let’s ask some relevant questions.

Why the debt driven economy by printing money by the U.S. Government to exchange for Government Bonds aka fiat money system NO LONGER WORKS anymore?

Why can’t the world remains status quo anymore and since when did it start to really go down hill?

Is it when the first sub prime mortgages goes public on how bad it really was?
Is it the first bank to go under, namely the Lehman Brothers?
Is it when Madoff finally declared that it’s all a Ponzi Scam instead of “investment basket”.

Riot Fire

I believe it goes way back…back to the day when economist declare that oil does not runs out and it will be cheap always…and starts to blur illusions into economic reality, to convince politician that only “growth” to their GDP is the best for all man kind.

Politician thinks that money drives the economy and standard of living but how wrong are they…it’s the abundance of fossil fuels that mother nature is giving us humans a brief moment of industrial revolution & surge of modern technologies that gave us automated factories, faster computer chips, longer human lifespan against diseases, ATM, Internet banking, WIFI, Youtube, Climate Cool oil based clothes, iPhones, roads and everything in front of you comes with easily accessible fossil fuels directly or indirectly.

The world simply printed money and exchange for something finite such as Crude Oil & Natural Gas.

Now I will tell you when it truly the REAL breaking point….it is when WTI Light Crude hits the $147 dollars per barrel!!

When President Bush went to Saudi Arabia to beg King Abdullah, the Saudi ruler to open the oil supply tap wider when $127 a barrel…he was rejected outright.

That’s is when the sub prime market began to self destruct and the ripple spread to credit market and all the rest of the banking sectors, then due to massive unemployment and shrinking purchasing power of the consumers…thousands of manufacturing in China got affected so does the rest of the world imports and exports got nuked.

Now, with the vicious cycle of diminishing markets comes OPEC cutting the supply of the very substance that the world depends on modern day living…namely crude oil.

It’s understandably that the oil industry is getting the serious lack of investments and profit to expand the oil production or even maintain current level of oil “production” to service the world at a extremely cheap price of oil.

The risk is that the oil industry may turn to substandard equipments and man power to cut cost risking irreversible damages to oil fields around the world causing less and less oil reserve to be pumped out of the oil wells regardless of locations.

Non-Conventional oil such as Tar sands, deep sea oil wells, Oil shale, or any other non-conventional fossil fuels come at a much higher cost than conventional easy to get low sulfur light crude oil hence more likely to be hit more severely by the economic crisis that might affect future “oil supply”.

Refineries now simply do more maintenance and refine less oil regardless of steady increasing demand of petrol by consumers so that the gasoline remains at current prices or even higher despite the lower price of crude oil.

Many countries are stock piling up more oil in preparation of the inevitable of oil shortages when the demand heats up not due to economic recovery but the actual basic needs by the population for all the oil based products we humans depends on daily.

Everything will come crumbling down with OPEC & Non-Opec Oil producing countries unable to reverse previous production figures due to the fact that they can’t do it IN THE BEGINNING OF THE CRISIS.

WHY?

The one word to describe the situation is PEAK OIL.

The very foundation of human modern civilization depends on this fuel and peak oil means the global “production” of oil finally peak in speed of production due to natural declines in oil oil wells and less new mega oil discovery over the pas 40 years…and most of us just blames the bankers.

Maybe we should blame them for giving their personal “estimates” and “economic predictions” base on 10 years or 20 years market figures…not knowing that the problems of PEAK OIL that only happens once in the global scale…and no real precendent to “predict”.

The closest to PEAK OIL is during the 1973 OIL Crisis when OPEC embargo oil to America causing a oil shortages paniking the population into conservation, yes…for America who was the number one oil exporters in the 1950s to suffer PEAK OIL production in the country and became a NET OIL Importer

It is inevitable and as more and more demand on growing population of modern car drivers & demand of petrol chemical products such as plastic goods goes into the market…MORE oil is required.

USA had now acquired the world number one oil IMPORTER title and China is fast catching up…which is a worrying trend.

Riot

However, as nature comes as no surprise comes and destroy the demand naturally by economic destruction by a simple  sub prime crisis…which now you know is actually belongs to the energy crisis category instead.

Seriously, we humans cannot plan ahead far enough into the future until the disaster really strikes but there are many individuals such as you who read other people’s ideas and can make their own decisions about what the future holds…such as ANARCHY & Chaos can decide now to prepare for a post oil world…where people can really be self sufficient and no longer dependent on oil.

Do your due diligence to research on PEAK OIL and make your own conclusions and decisions, my views on the economic crisis is almost directly linked to the energy crisis is my own personal opinions and should not be use for any investment guide or directions towards any investments.

Be prepared or be sorry.

Note: All photos are taken from Flickr under the Creative Commons licensing.