muses of the moment

November 13, 2009

Seems we are past peak oil

Filed under: 401K and IRAs, DOW and S&P500, Economic Crisis, Long term investing, Peak Energy, The Financial Crisis — totallygroovygirlfriday @ 9:42 am

Chris Martenson had a post this week about the recent UK article about peak oil. This is the first hard evidence that global oil production is overstated, as many have suspected.

Click here for the post.

From a financial perspective, the most important portion of the post:

If this is true, and if it needs to be confirmed, it means that all models of stocks and bonds that rely on long-term cash flow models are wrong.  It means that our primary assumption of petroleum fueled growth is wrong.

Make sure you are factoring in this possibility to your investments, savings, income, and overall life.

I believe that even if this is true, you will never hear about it. The rising (probably parabolic future oil prices) will be blamed on the global economic crisis and not peak oil.

Peak oil is a long, long term decline, but it is a decline just the same. Oil will continue to become more and more expensive and it will require more investment and energy to get less out of the ground. At some point it will not be worth the effort.

This problem goes beyond this K-wave winter cycle.

Side musing: And here is another wrinkle in future oil/energy prices from zerohedge (.) com. More dark pools and scams.

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