by Tom Whipple
…Oil of course, is the life blood of modern economies. Without increasing amounts of it there can be little or no economic growth until substitutes are found in quantity, and if it is withdrawn there will be economic contraction. One of numerous and ill-understood issues in our economic future is the relation of oil –production, consumption and price — to our economic downturn. The interrelation is a complex one.
…Particularly here in the U.S. the economy simply cannot function without a certain amount of transportation fuel or economic activity will take another major hit. Demand for oil in North America, Europe, and oil producing states is likely to continue at a fairly high level until either it is no longer available or prices become absurdly high in relation to incomes. It is clear the future is going to become a very complicated place with all kinds of forces pushing in all sorts of directions.