In 1956 Hubbert predicted the US oil peak would be sometime between 1969 and 1971. For this he was ridiculed and laughed off the face of the earth (almost). Turned out the US oil peak was in 1970. This is something the drill-baby-drill, it's all the environmentalists' fault, ditto heads don't know anything about.
Next in 1974 Hubbert predicted the world oil peak to happen about 1998. However he DID say that if OPEC were to restrict the supply, then the peak would be delayed by 10-15 years which would put it at 2008-2013, or exactly right. Here is what Hubbert's prediction (to scale by MBPD) looks like overlayed onto a reasonably close estimate of the actual global oil peak which started in 2005 and has continued as a plateau up to now.
OK, now is anyone willing to make a bet that Hubbert's THIRD prophecy is wrong? Didn't think so. Here it is:
Hubbert said, "The third curve (on the left) is simply the mathematical curve for exponential growth. No physical quantity can follow this curve for more than a brief period of time. However, a sum of money, being of a nonphysical nature and growing according to the rules of compound interest at a fixed interest rate, can follow that curve indefinitely...Our principle constraints are cultural...we have evolved a culture so heavily dependent upon the continuance of exponential growth for its stability that it is incapable of reckoning with problems of non-growth...it behooves us...to begin a serious examination of the...cultural adjustments necessary...before unmanageable crises arise..."
Ok, anyone see any cultural crisis happening? Yeah, what about a worldwide uprising of the 99% against the 1%? What does this have to do with Hubbert's Third Prophecy? EVERYTHING!
Here is a graph of total US debt in all sectors up to end of 2009:
Here is same curve overlayed with same time scale on global oil peak:
Looks kinda like Hubbert's graph above doesn't it? That's because it is. Debt can continue to increase indefinitely, while oil can't. And since our entire money system is based on debt with interest attached there is no way to escape it. All money is debt because we have allowed banks and the fed to create all our money through interest-bearing loans by using the fractional reserve system. The details are unimportant, the main point is that our money supply is created by interest-bearing loans of banks and the fed. Therefore, the economy must always grow in order to pay back the interest. When the economy can't grow anymore...collapse.
Here is what has happened to US debt over the last several years:
2008 US Debt:GDP ratio = 350%
2009 4Q US Debt:GDP ratio = 425%
2011: US Debt:GDP ratio = 475%?
Debt has continued to grow because we don't have a real economy anymore, we have a fictitious funny-money phantom economy of mostly financial speculation. Here is what happened in 2008:
...Since debt represents ultimately a claim on real assets, debt cannot continue forever if growth of the real resource based economy has stopped. This is Hubbert's Third Prophecy: When economic growth cannot continue due to the lack of affordable oil, then we will have a cultural crisis. Well here we are folks. The solution of the powers that be? Create more funny money through the fed's "quantitative easing program". The solution of the Keynesian economists? Take on more government debt through interest bearing loans by selling Treasury bonds to the fed, China, and other parties (stimulus). The solution of the right-wing "deficit hawks"? Cut government (social) spending to the bone to "cut the deficit" which they created through monstrous military spending, and tax cuts to themselves. Guess what. None of these are going to work. The solution is structural in the monetary system itself. When all money is debt, there is always interest to pay and growth is required.
