Oil Spikes, Double Dips and Dilapidated Dollars

Forbes ^ | Bill Flax

[billflax]

To understand whether our recovery is in jeopardy, we must first grasp what prospers us, why economies recede and then what rejuvenates them.

There is a natural symphony to the market. Everyone seeks the best available outcome. Our unlimited desires are tempered by scarcity, yet we all strive to get what we can while wanting still more. Price signals orchestrate this perpetual friction between buyers and sellers into a concert of mutual satisfaction.

Wealth creation emanates from the value sellers add for which buyers are willing to pay, but buyers ensure efficient utilization of resources by insisting on lower prices. The more freely prices may move and the more certain the scale, the better the invisible hand can conduct a harmonious improvement in living standards for all.

A recession occurs when our aggregate output veers off tempo from society’s wants. GDP represents a basket of goods and services. If our demands shift dramatically or discord renders existing production unprofitable, the economy must correct. A recession is the process by which producers are redirected back into concert with what consumers now request, as can be produced profitably.

[familyop]

Over 43 billion barrels at stake (well, now burning at the stake) in Libya.

[familyop]

"Capital chases the choicest ideas in pursuit of profit. Where capital flows, jobs follow and growth renews."

It flows to East Asia and other "developing" countries. ;-)

[familyop]

Well, because no one else has commented, yet, I’ll say that you wrote a good piece, all in all. Your commentary on causes and effects in regards to oil prices is unusually honest and well written.

[The Magical Mischief Tour]

It seems to me were at a point we have two choices.

One is to invade, seize and forcefully take the oil we need.

Or to throw our money into a Manhattan Project level development of an viable alternative energy, whatever that might be.

[cableguymn]

I chose option 3. DRILL BABY DRILL!

Lots of domestic oil sources.. we don’t need to invade anyone.

[USFRIENDINVICTORIA]

What about shutting down the largest source of your imported oil — oil produced by a friendly neighbour, with a supply guaranteed by a trade deal? Oil that's sold at a discount to world price. Of course, I'm referring to oil from Canada's oil sands — which international (mainly U.S.) envirofascists, and politicians of a certain ideological bent, want to shut down.

[USFRIENDINVICTORIA]

What about shutting down the largest source of your imported oil — oil produced by a friendly neighbour, with a supply guaranteed by a trade deal? Oil that's sold at a discount to world price. Of course, I'm referring to oil from Canada's oil sands — which international (mainly U.S.) envirofascists, and politicians of a certain ideological bent, want to shut down.

[familyop]

"One is to invade, seize and forcefully take the oil we need.

Or to throw our money into a Manhattan Project level development of an viable alternative energy, whatever that might be."

Agreed. We need to deregulate for all (even families in rural areas--repealing zoning regs., for example). That would also allow many to live closer to their work (right on it, in many cases). De-emphasize mandatory licenses and degrees a little (alternatives, e.g., testing, technical). American ingenuity was good, and education (self) should be a personal, lifetime pursuit for many of us. The Internet is quite a resource for information and is getting better. And stop the subsidies, of course. I'm building and modifying some alternative energy designs without any kind of money from government, and anyone can spew data for others after doing so.

[familyop]

"What about shutting down the largest source of your imported oil..."

Our FRiend in BC is right, Magical. Republican Governor Arnold and others in California were getting with eastern Canadians years ago to try to shut the tar sands oil work down. So have some of our northeastern trade interests. There's enough oil in Alberta to keep us all moving for a very long time, with no overseas freight fuel needed to get some of it here (as it is with freight fuel needed to get it here from the Middle East).