Friday, Mar 06, 2009
One possible bad-case scenario (warning: contains x-rated bear porn)
The Oil Drum: An Adverse Scenario
Skip past the oil stuff at the top, down to the financial bit:- "With all of the debt defaults, some sort of debt jubilee may be necessary. The problem with a debt jubilee is that there would be many too many claimants for many of the world's assets. The debts that are cancelled are likely to cross country borders, making for international disputes. Furthermore, countries may want to retaliate for a loss of one of their overseas investments by grabbing a business located in its own country that has overseas owners. In not very long, relationships among countries are likely to deteriorate, and international trade will be at much lower levels than in the past. War may even break out."
Posted by drewster @ 12:21 AM (450 views) Add Comment
2 Comments
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1. quiet guy said...
drewster,
"It is not too hard to envision a situation where the worldwide banking system collapses, and it is necessary to start over, perhaps almost from scratch, with new currencies and new international treaties."
You weren't kidding. This is real bear food.
"As the result of such changes, there is at least the possibility that the world's financial system may function at only a minimal level, and world oil production will take place at only a very low level."
I know it's not in the Uber bear league but I have noticed that diesel has remained consistently higher priced than petrol for some time. My understanding is that the diesel refining capacity is significantly lower than petrol's hence the higher price (happy to be wrong about this - I don't keep an eye on The Oil Drum). This personal experience with diesel prices does fit in with the gist of the article in a very limited way.
"In such an environment, international businesses will find it virtually impossible to survive. Businesses are likely become much smaller and more local."
Kunstler would approve. Few others would though. The debt machines will do its best to continue whatever the consequences.
2. penbat1 said...
It is one thing to have a long inpenetrable heavy duty technical analysis of future oil production levels but how does that translate to future oil prices i want to know.