Cheap Oil
Wednesday, June 29th, 2011
My first installment of why I believe the economy will continue to flounder for foreseeable future has to do with oil prices. I don’t expect this post to come as a surprise to anyone, especially in light of recent trends, but the cost of oil will hold the U.S. economy hostage for the next decade, possible longer, because:
- almost everything we surround ourselves with in our daily lives is impacted by oil in one way or another (Charles Hugh Smith put together an interesting list) and
- we, as country, have no real solutions to a post, or reduced, oil dependent society.
The reality is that, as a limited resource facing increased competition, not to mention greedy speculators, oil prices can only increase. Sure, there may be some fluctuations but $5.00+ for a gallon of gas is inevitable; my prediction is that we are less than a year away.
A friend who follows the energy markets believes it would be entrepreneurial of the U.S. to allow more drilling in Alaska. To me, the greatest entrepreneurial opportunities exist in developing alternatives to an overly oil dependent society…might just boost economy too.
