Lately, maybe it’s due to Social Media Fatigue (or just a busy life), I find a need to have an emotional connection with a subject or topic before I want to write something about it.

Reading my RSS Feeds this morning, I found much that was interesting but few things that I had anything to say about - in the past I might have written posts about those things - but if I don’t have that emotional response and connect … is there any point? No, I don’t think there is a point.

So there were a lot of posts I could have written that about other posts that I didn’t even up writing - but this one about 9/11-Why 9/11 is still with us, I have an emotional connection to (didn’t Paul Cezanne, my favorite artist, once say something about Art is based on an emotional response to your subject - if you don’t have emotion - there is no Art).

I agree with John Evans fully and living in NYC and having experienced 9/11, pretty much first hand (though not as dramatically as some) I see, in his posts, a trail of thought like the smoke pume from a crashing plane that is taking down the world financial system - not so much due to the event of 9/11, but the consequences resulting from of it.

John lays the groundwork for our present economic problems on Alan Greenspan’s door (see Wall Street, Run Amok) - where they belong - along with Neocon’s who used 9/11 (in my opinion):

……. Consider the credit crunch. Joseph Stiglitz’s book The Three Trillion Dollar War (reviewed here) argues persuasively that Alan Greenspan’s policy of holding interest rates below optimal levels, for longer than anyone deemed necessary, was aimed at masking the enormous cost of the Iraq war on the American economy. The war was a result of 9/11.

Combined with rising house prices, the loose policy opened the way to a splurge of mortgage lending to the U.S. trailer-park poor, the sub-prime end of the market, and the rather guilty repackaging of it into faux Triple-A assets, which were sold on around the world. From those actions, we now have global economic turmoil hanging over us again.

A chain of events was started and I frequently wrote about Sub-Prime Mortgage Meltdown last year and this year. Lately, there’s not much of a point as we’re in the Sub-Prime meltdown now and it’s now taking a course of it’s own. However, what John Evans says next is more scary:

History comes down to us in a highly condensed form in which major events seem to follow each other in rapid succession. In reality they are interspersed by long periods of calm, even small recoveries and bursts of optimism. The underlying trend is still downward though, with much poison yet to unwind in a collapsing spiral of self-reinforcing declines.

…..As for commodity and food prices, the fighting in the Middle East drove up the price of oil, now heading to $120 a barrel, which has had a knock-on effect in all other markets, especially food.

…..In an inflationary environment, merchants tend to hoard their stocks in warehouses, betting on higher prices down the line. It’s a one-way bet right now, so a lot of the world’s grain output is locked away, pushing up prices at an even greater rate and shoving millions into hunger. Those positions will unravel quickly though at the first sign of a price peak, when dealers will dump their stocks on the world food markets. Prices will then drop sharply, revealing the real danger to the world — deflation and slump.

Let’s fast forward to Paul Krugman’s post the other day in Thoughts on oil and quoted the whole post, below:

I was searching for other stuff and ran across a 2004 Marc Faber piece that seems remarkably prescient. It contains one extremely interesting calculation:

Remember also, that if China’s per capita oil consumption went to the level of Mexico’s per capita consumption China would consume 24 million barrels of oil daily, which would be close to 30% of global production. And since it is most unlikely that current total global oil production of 80 million barrels per day can be increased much - in fact, it may begin to decline because no major oil field has been discovered since 1965 - I expect that prices will increase further in future - possibly far more than anyone is now expecting.

I just hope that Faber was wrong about this:

And, in the case that oil prices were to rise in real terms to their 1980s highs - well over US$ 100 - then the foundation for World War Three would be laid …

I took a look at the 2004 Mark Faber post and here’s what stood out to me:

…But, what is important to understand is that whereas the 1970 oil price increases were coming from a supply shock, which was driven by OPEC cutting its production all the while large production excess capacities existed, the current oil bull market is purely a function of increased demand coming principally from Asia at a time global oil production has practically no spare capacity which could lead to much higher production than the current 80 million barrels per day.

In other words, there’s no OPEC Sheik’s to appease this time - we’re at capacity now - we can’t produce more oil, yet more is needed - driving up prices to and past 120.00 USD per barrel

….oil consumption in Asia will, in my opinion, double in the next ten to 15 years from currently 20 million barrels per day to around 40 million barrels per day.

Remember also, that if China’s per capita oil consumption went to the level of Mexico’s per capita consumption China would consume 24 million barrels of oil daily, which would be close to 30% of global production. And since it is most unlikely that current total global oil production of 80 million barrels per day can be increased much - in fact, it may begin to decline because no major oil field has been discovered since 1965 - I expect that prices will increase further in future - possibly far more than anyone is now expecting.

So there we have it - no meaningful decrease in the price of a barrel of oil - probably, ever - because there’s no one to negotiate with.

It’s not about OPEC, it’s about us, human beings, and our consumption of energy. Then the WW3 prediction comes in

…..However, if I am right that in future oil prices could rise much further than is generally expected, geopolitical tension would likely increase dramatically, as countries such as the US and China would increasingly become concerned about adequate supplies.

And, in the case that oil prices were to rise in real terms to their 1980s highs - well over US$ 100 - then the foundation for World War Three would be laid and most certainly begin to weigh heavily on equity prices for which I cannot share the prevailing widespread optimism anyway. Financial stocks have begun to weaken and this is an indication that something is not quite right!

Now, John Evans put this all on the trail of 9/11, but I’d be more likely to say that 9/11 was probably, in it’s warped creators, an attempt to forestall what has happened - but it backfired.

My guess is 9/11 was really an used by Neocons to try to annex Iraq’s oil, fragment and then unify the middle east and take control of the oil - driving prices down (so they thought) - except, now prices can’t go down (without getting rid of a lot of the consumption for energy) because it’s based on supply and demand. Much of this problem, that we have now, was made worse by 9/11, because now we don’t even have much of Iraq’s oil and Iran is stronger than ever.

I don’t know, but does anyone want to suggest what comes next? Do we find a way out of this fix or not? Is there a role for Social Media in driving our awareness to cut down on consumption of energy - or it it past that already - in other words, is it too late?

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