How will peak oil and the degradation of the dollar affect a recovery that isn't happening?
I'm not sure what we can look at currently to construct any happy outcome for the dollar.
That's it, plain and simple.
No Dollar Strength from this "Recovery"
Unemployment - Nov '08: 6.6% / Oct '09: 9.8% (up 50%)
Deficit - Nov '08: $450 billion / Oct '09: $1.5 trillion (up 300%)
- now ad peak oil to value of goods.
Peak oil is a fact, maybe delayed by new finds and/or new tech, but still a fact.
Depletion now exceeds discoveries, even from Brazil and Baaken. Peak oil was 2007 at 85 million barrels per day. That will never be exceeded.Prices subsequently fell because of demand destruction. Now that prices are increasing again, demand will be suppressed again.
This is a very unstable price plateau.
The question is what amount of oil is adequate to maintain civilization until a replacement for oil is found.
Coal is plentiful enough to support the base load throughout the world.
But how will transportation be supported?
Demand for transportation is elastic; it is a function of the value of goods transported.
As oil prices fluctuate, transportation will follow.
This is the new area of study, how will this new economics work?
Will the believers in global warming destroy us with cap & trade as we slide into a new ice age?
We are using it faster than it is being replaced even if there is a magic oil pump in the innards of the earth.
The decline of available oil and the continuing rise in price is a result. Substitution of alternate forms of energy will also string this out as will the tactics of those selling oil to delay destroying demand.
The analogy with oil suppliers as drug pushers seems appropriate.