by jtmorgan61 » Sat 30 Jul 2005, 17:32:58
$this->bbcode_second_pass_quote('', 'T')he scenario on my webpage involves the following:
1. Reource wars
2. Financial collapse
The scenario I see in real life is:
1. Oil war in Iraq, probably more to come.
2. Slow motion collapse of the economy as evidenced by what is going on in the automotive and airline industries.
I remember something about a $200 price superspike, panic in the streets, and an analysis of why each individual energy source couldn't instantly take up all of the energy production.
Are we likely to see another war? Dubya's popularity has crashed. The public has finally seen through his promises. We're running out of money, and we're running out of friends.
Who are we going to fight with? Saudi Arabia is our bitch. Iran is too big to fight, and they are opening up to foreign investment. Who are we going to fight with? China needs us as badly as we need them, economically. India is pretty close to us. Russia is in too much chaos to launch a major offensive and they have plenty of oil. I'd be shocked if we got into a war with an EU country.
About the only scenario I envision is that we take on Syria. That's a small country. The much bigger Iraq boondoggle hasn't stopped our economy.
On the economics side, the problem with US major airlines and car factories is that they are being outcompeted.
The airlines are being outcompeted by smaller, local carriers. Those companies are making money. The bigger companies were losing money when oil was cheap.
The american car companies are being outcompeted by foreign companies making more reliable, better handling cars. They were also in trouble when oil was cheap. To the extent that they're in more trouble now, it's because people are gradually no longer buying SUVs and trucks because gas has gotten expensive. Foreign car companies are still quite profitable.
In any market economy, someone is going to hit bottom. If oil increases in price another $20, maybe a few more of these dinosaurs will go down than would have otherwise. The remaining companies will continue to innovate and pass on the very modest increases in price due to oil to the consumer (e.g. jet fuel costs are 15% of airline costs. If oil prices hit $120/barrel tomorrow, then we'd see a $300 ticket jump to $345).