A peek at the peak oil problem
By The Mogambo Guru // Asia Times Online
There are a few people who ask me to rebut the argument that oil will go down in price, thanks to a slowing world economy and the increased use of alternative energy resources and the "fact" that the world has zillions of barrels of oil still waiting to be pumped. By now, my response is automatic; "Oil go down in demand or price? What a load of hooey! You're a stupid freaking moron!" To which they always bizarrely reply, "Oh, yeah? Well, screw you!"
For proof of my Bold Mogambo Assertion (BMA), I present Matt Simmons, author of the book Twilight in the Desert, being interviewed by Jim Puplava at the Financial Sense Newshour. Mr Simmons says, "Crude oil supply peaked in the spring of 2005, and it's now about a million barrels a day lower than it was at that peak."
There! There it is! This is the reference to peak oil that I was looking for! It is the perfect bit of delicious data allowing me to modify my answer about peak oil by saying, "Oil go down in demand or price? What a load of hooey! Peak supply occurred in 2005, which you don't know because you're a stupid freaking moron!"
Originally, I had wanted to animate my little PowerPoint presentation to show the cumulative long-term effects of peak oil, meaning that the amount of oil pumped out of the ground will be going down, faster and faster, which is bad news when demand is going up, faster and faster, and over 10 years or 20 years or 50 years or so, the cumulative exponential change in each of them resulted in a crossover price that was so frightening that I went freaking bananas about how oil priced at those insane levels means that we are all freaking doomed!
Mr Simmons is apparently not interested in my clumsy, amateurish analysis or my hysterical conclusion, but implies that I am right about this price thing when he says, "I think the starting place is to realize how unbelievably important the use of modern energy, oil and gas and electricity, is; and two, how ridiculously priced it still is."
How ridiculous? By way of answer, he warns us to not to "fall into a financial funk when the price doubles, because it needs to double or triple".
I think it was important to notice that he did not warn us not to "fall into a fit of hysterical outrage and spontaneously form into large, drunken mobs, marching on Washington, DC to take over the Federal Reserve and put it into the Capable Hands Of The Mogambo (CHOTM), a man who knows exactly how to efficiently fire people ("Scram!"), because he has been fired so many times, and whose qualifications to be chairman of the Federal Reserve come from also being a man who knows how to live within his budget because he never has any money, since he is too stupid to ever get a job and too disinterested and lazy to even try getting one, so holding the money supply constant, like the Founding Fathers wanted, through complete inaction comes completely naturally to him!
However, this is not about another one of my psychotic episodes concerning world domination in a Reign Of Mogambo Terror (ROMT), but instead about "the race for energy in the Arctic" and how the Russians have recently claimed the North Pole as theirs, which is supposed to be significant because they "casually said 25% of the world's reserves are in the Arctic".
I, of course, immediately swallowed it hook, line and sinker, but Mr Puplava was skeptical, and said, "Where do they get that figure?" Mr Simmons replied, "They read it from somebody." Hahahaha!
He goes on to say, "I mean, it doesn't make any sense. We haven't discovered any oil and gas in the Arctic. But if you're modeling and you're trying to look, you can't really say Arizona and Nevada because we've proven there isn't any oil there. So you pick an area we haven't ever been to because therefore there's no way to prove that it's not there." Hahaha!
This amazing "no way to prove it's not there" thing is kind of coincidental, as I am getting ready for my appearance at this year's Silver Summit in Coeur d'Alene, Idaho, next week, which is always my last appearance for the year, as I usually spend the rest of the calendar year volunteering to appear at parties as an educational attraction, dressed either as a jovial Halloween monster in October reminding everyone that "The inflation of the American government and its lackey, the corrupt Federal Reserve, is going to rip the guts out of you and your stupid little family by killing your money and wealth by creating too much money and credit!", or appearing as a festive turkey at family gatherings on Thanksgiving where I helpfully explain "The inflation of the American government and its lackey, the corrupt Federal Reserve, is going to chop your head off and then cook and eat the miserable carcasses of you and your stupid little family by killing your money and wealth by creating too much money!", or as a jolly Santa Claus in December where I make a present of the advice, "The inflation of the American government and its lackey, the corrupt Federal Reserve, is going steal all of your Christmas presents and then use the ribbons to strangle to death you and your stupid little family by killing your money and wealth by creating too much money and credit!"
So you can see it is also my last chance this year to visit Wallace, Idaho, which is famous for a legal ruling of an infamous EPA (Environmental Protection Agency) argument, subsequently called "probalism," that is defined as, "If a negative can't be disproven, it must be true."
The quick-thinking David Bond, of silverminers.com, immediately recognized the enormity of this astonishing precedent and cleverly seized advantage of it by having it declared that Wallace, Idaho, is the exact center of the entire universe! And thanks to the EPA and their new "probalism", since nobody can prove it isn't, then it is! Hahaha!
I plan to register a couple of new truisms at Wallace, that Wonderful Place Where Facts Are Certified, namely that The Mogambo is "The One True Love-Child Of Elvis Presley" and also that "Everybody Owes Me A Living", probably by appearing on talk shows (Host: "So what is it like to be the One True Love-Child of Elvis, where hordes of panting, lusting, good-looking babes who are so mentally ill that they make headlines around the world clamoring after you because of the official genes of Elvis Presley that you officially carry within your Lusty Mogambo Loins [LML]?" Mogambo: "It's fine").
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
Republished with permission from The Daily Reckoning. Copyright 2007, The Daily Reckoning.
