Peak Oil: A Crude Awakening

Ask most people, and they’ll probably tell you global warming is our greatest global obstacle. Some will even say something like terrorism or illegal immigration. Frankly, I thought I was pretty damn clever spotting the global credit bubble, and believed it to be the greatest global crisis we’d face in our lifetimes (i.e., something on order of five times larger than the S&L crisis). Even if I’m right about that number, I’m far from being right about the significance of the event.

I rented a movie this weekend, A Crude Awakening (2006), from Netflix. You have to see it; it changed my thinking in 90 minutes.
I had previously read about “Peak Oil,” but nothing put it together as persuasively as this movie. The magnitude and consequences of a global oil crisis are staggering, imminent and unavoidable.

For anyone who does watch it or who has seen it, I’d really like to know your thoughts on the following: When the world can no longer fulfill our global oil demand (sometime between now and 10 years from now), do we get massive price inflation or deflation of assets and commodities (or will it be different for one versus the other)?

Don’t be too quick to answer; it’s trickier than you might think.

Scottsdale