The author argues that the policy response to the economic difficulties will be to create a general rise in the price level to reduce the burden of the existing debt on households, businesses and governmental entities. As prices, and especially wages, rise, domestic spending will recover and unemployment will be reduced, although this process could take several decades.
Very significant inflation will likely be necessary to prevent an even more severe drop in employment and output in the economy given the magnitude of the shock to the economy created by continued declines in global oil production. As of this writing in mid-2012 global production of crude oil has not surpassed the 2005-2008 levels despite sustained high prices. International and sovereign-owned oil companies have had seven years now to respond to high prices with increased exploration, drilling and production. The results have been less than encouraging, to say the least..
Dramatic changes in the economy as a result of Peak Oil will alter the approach that would optimally be taken by investors and those wishing to preserve savings. The issues of asset allocation and sector weighting are explored together with alternative investments in commodities and real estate.
It often seems that different crises are competing to devastate civilisation. This book argues that financial meltdown, dwindling oil reserves, terrorism and food shortages need to be considered as part of the same ailing system.
Most accounts of our contemporary global crises such as climate change, or the threat of terrorism, focus on one area, or another, to the exclusion of others. Nafeez Mosaddeq Ahmed argues that the unwillingness of experts to look outside their own fields explains why there is so much disagreement and misunderstanding about particular crises. This book attempts to investigate all of these crises, not as isolated events, but as trends and processes that belong to a single global system. We are therefore not dealing with a ‘clash of civilisations’, as Huntington argued. Rather, we are dealing with a fundamental crisis of civilisation itself.
This book provides a stark warning of the consequences of failing to take a broad view of the problems facing the world and shows how catastrophe can be avoided.
In two earlier books, Hubbert’s Peak (2001) and Beyond Oil (2005), the geologist Kenneth S. Deffeyes laid out his rationale for concluding that world oil production would continue to follow a bell-shaped curve, with the smoothed-out peak somewhere in the middle of the first decade of this millennium–in keeping with the projections of his former colleague, the pioneering petroleum geologist M. King Hubbert.
Deffeyes sees no reason to deviate from that prediction, despite the ensuing global recession and the extreme volatility in oil prices associated with it. In his view, the continued depletion of existing oil fields, compounded by shortsighted cutbacks in many exploration-and-development projects, virtually assures that the mid-decade peak in global oil production will never be surpassed.
In When Oil Peaked, he revisits his original forecasts, examines the arguments that were made both for and against them, adds some new supporting material to his overall case, and applies the same mode of analysis to a number of other finite gifts from the Earth: mineral resources that may be also in shorter supply than «flat-Earth» prognosticators would have us believe.