Something bothered me every time our dear one eyed leader blamed the global financial markets....
If indeed oil, and not subprime mortgages, lies at the heart of our current economic malaise, we may be sicker than we know. If the U.S. Treasury Department writes a big enough cheque, Washington can bail out Wall Street and all those troubled financial institutions across America whose bank vaults reek of rotting mortgage-backed assets. And if the Federal Reserve Board cranks up money supply enough, it can reflate the economy and even resuscitate depressed home prices. But there can be no energy bailout.
So £40m for Low carbon building programme and £300m for car scrappage... hmmmm
In August 2008, when oil prices peaked, Americans drove 15 billion miles fewer than the previous August, the largest drop since the government started collecting data in 1942. That kind of collapse in demand is part of the reason for the decline in prices. But there are plenty of drivers elsewhere in the world who are more than happy to drive those miles and burn that oil.
from here perhaps the real reason why copenhagen will be doomed
DominicJ wrote:The shit started hitting the fan in mid 2006
I would say 1973.
DominicJ wrote:
The foundations for this crisis (and the oil price spike) were lain when Greenspan declared himself god.
I must have missed his Congressional testimony where he stood up, donned the white robes and started casting people into Hell on the spot. I think the foundations for the current recession and accompanying housing issues in the US started in 1968 with the removal of Fanny Mae from the federal budget.
The price spike in oil in 2008 was more a consequence of Jimmy Carter, who made certain multi nationals would develop the resources of others to avoid his tax schemes. Once they did so, and the NOC's repossessed those resources, the die was cast for inefficient management and poor reinvestment strategies, which of course naturally lead to constraints in the system which, once noticed by the financial whizzes who brought us CDO's, led to last summers price spike.
Interesting RGR
I would have thought that the lack of opportunities at home and the increasing world demand led to the multi nationals expanding in other areas. I agree that the NOCs that now hold 80% of the worlds oil have no hope of proper management of their resources. Mexico is just one example. After finally realising the depletion rates will make them a net importer that have signed contracts for the development of their deep water fields but it will take years before these projects start producing
Peak aware economist Jeff Rubin has been arguing that oil price was the main cause of the recession not the financial collapse for some time.
He also said that because the cause was oil and not the financial collapse that economic recovery would ensue this year, after demand and the price of oil fell.
DominicJ wrote:The shit started hitting the fan in mid 2006
I would say 1973.
I remember my father, on the ferry to France in summer 1973, saying that this (life, not the prospect of a continental holiday) was as good as it could get. How right he was!
We had a lovely holiday BTW, except my dad got a bit fed up of people commenting on his likeness to Richard Nixon.
