[OilsNotWell]

Just a thought I had recently in answer to the question: "What actually would govt's do to combat extremely high oil prices?"

If we see stagflation, what is the expected economic response?

What would the response be to worldwide recession, then depression?

Perhaps world governments, the UN, andor the IEA will demand a global conference (ala the Kyoto Treaty), with the US perhaps reluctantly participating? (Seems to me their response has been: control the oil first and foremost)

Will they take a look at, and enact, the Uppsala Protocol?

[Leanan]

I don't think there would be wage and price controls. That is widely considered an experiment that failed.

And I don't think the U.S. would suddenly grow more international-minded. I think it will be "every country for itself."

I do think we may enact rationing. Of gas and food. Of course, that just means there will be a black market.

[OilsNotWell]

That's what I was afraid of. I heard recently more countries talking about "energy security". Security is a very loaded term, in political circles, and usually implies an enforcement or militaristic aspect or threat of force if their needs are not satisfied.

Doom and gloom, I know, but every country in it for themselves leads to all-out conflict and energy wars (more so than now!).

I keep thinking about the lessons of Easter Island.

And Noah. They are parables for us now.

Oh, how I wish I would have learned about Peak Oil sooner so I could have more time to build my ark!

[Jack]

I don't expect wage and price controls; rather, I expect considerable inflation that is substantially underreported by the fed. Rationing of food and fuel is a possibility, though I'm none too sure that will occur either.

What I do expect is for unemployment to spread and underemployment to become endemic. This will lead to calls for economic stimulus, which will probably mean inflationary fed policies and more tax cuts - which means larger budget deficits.

We may see calls for WPA style work projects, demands for retraining programs, and (perhaps) trade tariffs to protect domestic jobs.

I'd be very surprised if any sort of agreement were reached. China has to grow its economy to maintain domestic order; on the other hand, the U.S. candidate that advocates subordinating U.S. economic interests to global concerns is not likely to be elected, IMHO. Other nations will proceed likewise.

[mainster]

Check out www.financialsense.com, they have a very sound analysis of all the elements making up the "perfect financial storm" in the near future.
Seems there will be stagflation, that is deflation of all debt based items (real estate, paper markets, derivatives!!!). Expect banks to fail bigtime (think argentina).

Expect all raw materials and basic items u need to survive to soar (inflation) while all the luxury items u can live without will collapse completely in value... Lots of unnecessary pure consumer industries will disappear, but plenty of new jobs...

Expect a return to gladiator fights and a slavery... seems the US leaders have been preparing for all this the past 50 years (think 1984 G.Orwell).

"The Total Policestate" will be necessary to control the people when the shit hits... so all the leaders will be able to stay in control and turn the people into debt slaves living on rations. Ofcourse their land and most belongings will be seized by the banks (confiscated byt the elite), since they will be unable to pay their debt (due to massive deflation!). The housing boom the past 50 years is basically a debt trap to slavery.
We were warned of all this in the 1800 by people like T.Jefferson, but people will never learn from history. "Hey, we are much more clever today"... Guess not! Human nature always stays the same (it's in our genes stupid!)

A true return to the dark ages, 99% living as serfs for their masters, but not as gradual as was the case with the fall of the roman empire. Our civ. is much more unbalanced. "The higher you... the harder you fall"

Only reason slavery was ever abolished was become sufficient excess energy became available to end it. Nothing to do with "humanism" or other such ideals... Get the hell out when chip implants become mandatory "for your security"

"Those who give up their liberty for the promise of security deserve neither" (T.Jefferson)

Amazing how few Americans (and people in general) understand this simple truth. The sheep are simple too stupid

Not easy to escape The Matrix, brainwashed from cradle to grave...
Will we ever have our Neo?

[gg3]

Jack's post above makes sense to me.

Mainster, you lost me when you started talking about gladiators.

[Guest]

You can expect the complete devaluation of all currencies and replaced with a credit system tied to a national id. Credits will get issued to you via a world depletion apparatus. You can expect these things within 10 years, hopefully sooner. You people amaze me in your ability to worry about the wrong things. I thought this forum wanted to discuss energy geopolitics?

You do not really need a real discussion of currency in the future. It has no place either way. Either the apparatus wins and we become its credit slaves or the forces of light win and no one will ever think to use money in that way again.

[Aaron]

$this->bbcode_second_pass_quote('', ' ')apparatus wins and we become its credit slaves

[gg3]

Stagflation. Sluggish growth plus high rates of unemployment and inflation. Seems to me this is a classic resource-scarcity-driven dynamic: key resource (oil) becomes scarce, driving prices up and growth down; consumption declines, unemployment results, but the resource scarcity holds prices on an upward track despite the reduction in consumer demand which should (ha, "should") drive prices down.

IMHO the cure for most economic woes is the Jeffersonian market of small-holders. In any crisis situation, small units have less inertia and so are more nimble and adaptable, which provides a built-in feedback mechanism to dampen out extreme swings.

What the US government is most likely to do is ration the scarce resource (initially oil, mostly in the form of gasoline), institute some kind of tax incentives for hiring new employees, and loosen up the restrictions on unemployment compensation. This tends to work if there is an upper limit to the parameter of the scarcity, i.e. if you can break through an OPEC-style collusion among producers.

However in the present case there is not an upper limit to the parameters of scarcity, i.e. oil will become more relatively scarce (supply plateau, demand growth) each year. So the stagflation becomes truly a chronic (rather than acute) condition.

At that point you have an increasingly disaffected majority, so there comes a need for distributional reforms: the pie is shrinking, hungry people tend to revolt, so to preserve stability you have to fix the hunger from "somewhere." The "somewhere" is likely to be those sectors of the population that are not disaffected and are a numerical minority. Therefore the rational step is an increase in taxation of the upper strata, to fund various public sector employment programs.

Then comes the point at which the "balance of resentment" shifts, as the lower 90% are at least minimally secure (i.e. fed & housed), and the upper 10% is feeling expropriated. This is the point at which I would expect some kind of economics-based politics to become a dominant factor, much as it does in parts of the third world. On one side, those who seek to protect the interests of the lower 90%; and on the other side, those who seek to protect the interests of the upper 10%.

This dynamic inevitably becomes more and more rancorous unless the fundamental causes of scarcity are solved. And there we run into the key debating points here on this board: Can humans take steps to overcome energy scarcity? Can humans take steps to reduce their population to a level consistent with carrying capacity so they are not fighting over a shrinking pie? Tune in next week....

[Jack]

Ahh, but gg3 - there is another option, I believe. The top 10% can choose to emigrate along with their money. You'll notice that corporations are going offshore, but I hear rumors that a number of wealthy people are quietly moving their assets beyond the reach of U.S. taxes.

Besides, folks who give hundreds of thousands of dollars to candidates might possibly expect more than good government for their generous donations.

[Permanently_Baffled]

Jack where are they going to emigrate to with there money? I suspect a lot of countries will be taxing the upper income income earners a lot more than the 'free market' USA. Redistribution of income will in a lot of cases be the only way countries can stop a lot of people turning into the anarchic mobs we all fear.

[Jack]

$this->bbcode_second_pass_quote('Permanently_Baffled', 'J')ack where are they going to emigrate to with there money? I suspect a lot of countries will be taxing the upper income income earners a lot more than the 'free market' USA. Redistribution of income will in a lot of cases be the only way countries can stop a lot of people turning into the anarchic mobs we all fear.

[TommyJefferson]

$this->bbcode_second_pass_quote('mainster', '"')The Total Policestate" will be necessary to control the people when the shit hits... so all the leaders will be able to stay in control and turn the people into debt slaves living on rations.

[Doly]

$this->bbcode_second_pass_quote('TommyJefferson', '
')Think, hurricane Katrina on a national scale. The vast majority of people reverted to libertarian community. They helped their neighbors. They carried guns peacefully. They worked together to clear debris so private power companies could get crews in with bucket trucks. They brought water to the elderly widow down the street with 20 cats.

The real problems were in metro New Orleans where the government descended to "help" people already crippled by government "assistance".