Peak Oil Social Economic Political Financial Impacts – Colin J Campbell

…A debate rages as to the precise date of peak oil production, but in general it is undeniable that the Second Half of the Oil Age now dawns. The high oil prices, combined with the extreme distortion of the financial system, has led to what may prove to be the World

The precise timing of the next crash cannot be forecast, but on balance is more likely to be counted in terms of months rather than years. Amongst other things, it spells the end of the role of the dollar both in oil trade and as a world reserve currency. The Middle East countries have already announced plans to trade oil in a new currency they are jointly creating, as well as the Euro, Yen and Rouble. Even Latin America proposes breaking the power of the dollar with a new regional currency called the Alba, backed by Bolivia, Venezuela, Ecuador and Nicaragua. Iran has announced plans to open its own trading bourse, as has Moscow. As this builds momentum, countries with massive dollar reserves, such as China, are likely to begin to unload their holdings. China is particularly vulnerable as its economic prosperity came, so to speak, at five minutes to midnight. Its deserts encroach and water tables fall, making it increasingly difficult to feed its excessive population. It has insufficient domestic energy to support its economy, explaining why it is currently scouring the world for oil rights. It has also artificially held down its exchange rate to encourage overseas trade. In short, it operates in an insupportable environment, which itself speaks of growing tensions with its minorities.

As the world economic depression builds momentum there are likely to be growing tensions in many countries with increasing outbreaks of rioting and violence from hungry people feeling themselves to have been in some way defrauded. The first signs of this new condition have already been experienced from Athens to Mumbai. In once gentle London, there is now a toll of stabbings in gang warfare, in part reflecting ethnic tensions resulting from the previous influx of cheap immigrant labour to fuel the past prosperity.

How the United States will react remains a key issue. It may attack Iran in a last effort to support its global hegemony or it may try to withdraw from international engagements with minimal loss of face, recognising that the Second Half of the Oil Age will be very different from the First Half as economic contraction takes the place of expansion, opening a new world order.

Schull Campus (PDF)