reanalyst, running out of cheap oil is a big problem, and should have been planned for by our leaders. Peak oil has been known about for decades, yet they are short sighted and don’t put money into alternative energy or drilling our own oil. If oil gets to $200/barrel as Dr. Leeb suggests, he says our economy will collapse, and it is one crisis that we cannot monetize out of. You see the problems already created by rising oil prices, and it will only get worse.
If we get our own oil, but have to pay $200/barrel to extract it, then it is basically going to cause an economic collapse. Have you read any books about oil supply and rising demand from China and India?
I stand by my point that as long as we cannot produce the goods and services we need for our own people, and have to take on debt to maintain our lifestyle, we are not a superpower, but a debtor nation.
Becoming a superpower once again means paying off the debts and creating products that the world wants to buy from us, so we are net exporters.
For now, we are getting weaker by the day. I think the next superpower could be Europe, Chindia, or Russia. They are more productive and export more than they consume.
But time will tell. I am concerned about the dollar falling 20% over the last few years. When I went to Germany in 2000, 1 dollar was 1 euro. Now you need $1.20 to buy one euro. Our dollar is getting weaker. So doesn’t that make us a weaker power?
This is an economics discussion, and in this regard, we are turning into losers. Who has the political will to change it?
Rich was guessing the Fed will inflate itself out of this mess. Why not do the right thing? To become truly strong, let the excesses correct. The politicians are too short sighted. They worry only about the next election. If they were long sighted, they would have kept Carter’s programs for alternative energy, planned for the SS and Medicare crisis, cut back spending to pay off the deficit.
