This past week the G8 met in L’Aquila, Italy to discuss the global economy but also climate change and reducing carbon emissions. According to the Telegraph, Gordon Brown warned “that sharp and unpredictable rises in oil prices risk “choking off” the global economy and pushing the world into a second recession.”
That last statement is one with which Jeff Rubin would concur 100%. When oil prices get too high, Rubin argues, they trigger recessions. If you’ve been following my articles this week, especially my review of Jeff Rubin’s book Why Your World Is About To Get A Whole Lot Smaller, he, you’ll know that Rubin thinks oil is the basic engine of the world economy in more ways that one. Basically, the oil prices that the oil companies need in order to bother scraping through the Canadian oil sands are in the $90+ range – yet that is already getting to be a range too high for what the rest of the economy needs in order to continue going about its daily business of shipping food and goods around the world. Already, fuel costs eat up at least 50% of what it costs to send a transoceanic shipper from one side of the Pacific to the other. If the price gets much higher, goods will simply stop shipping.
As reported in the Telegraph, “British officials are particularly concerned about oil prices, which have fluctuated wildly in recent months. Having fallen to $33 a barrel in December, oil is now back above $60, and some analysts predict big rises ahead…”We have to ensure the oil market does not get ahead of itself and choke off the global economy,” said a British official.”
Is Peak Oil For Real? Is the World’s Oil Supply Declining?
While we’ll never completely run out of oil, we will run out of the kind that’s easy and profitable enough to get at. I wrote quite a bit this week about the world’s oil situation – check some of it out if you haven’t yet:
Why Your World Is About To Get A Whole Lot Smaller
10 Fast Facts About The World’s Declining Oil Supply
Where the U.S. Gets Its Oil (can you guess the top 5 countries oil is imported from?)
The OPEC Oil Consumption Cycle and the Dangers of Cheap Energy
Turning Oil Into Water: The Middle Eastern Resource Accident Waiting to Happen?
Finally, I’ll leave you with some other great articles from other personal finance blogs I read. Also I just want to say that as I’m away for the next week, articles will be a bit more sporadic, so don’t be surprised if you see no updates for a couple of days. Don’t go away though, I’ll have some guest postings on here as well as an article or two of my own. Thanks for sticking around! And especially thanks to my new subscribers – it’s great to see the support! Please send me an email or DM me on Twitter to say hi. It’s great to hear from my readers. Have a good weekend, everyone!
How To Organize Your Garage – You can always find some really practical, specific advice at Million Dollar Journey. Don’t let the garage become your home’s “junk drawer.”
Seven Secret Places To Hide Cash In Your Home - Frugal Dad has a great list here, but don’t worry – he’s kept the most secret place to himself:) There are some great ideas in this list. Just be sure not to copy them exactly, but expand on them to find ones that will work for you.
ETFs: How Much Is Too Much? – Thicken My Wallet has a great post looking at how many ETFs is too many for your portfolio.
What Is A Sovereign Wealth Fund? – The Weakonomist explains this very interesting investment entity. Important to know about these guys, so if you don’t think you could explain it, better check this out.Related Posts
- The OPEC Oil Consumption Cycle and the Dangers of Cheap, Subsidized Energy
- Oil Down to $45 - And What It Means (Dec 2008)
- Remaining Problems That Could Cause A Second Stock Market Crash in 2010-2011
- Turning Oil Into Water: The Middle Eastern Resource Accident Waiting To Happen?
- Confidence in the Greenback - Are we Reaching A Tipping Point?