The primary function of economists
is to make astrologers look good.
Hat Dance : At peak production in 2004, Mexico consumed 51% of their oil at home and exported 1.9 million barrels a day (mbd). In 2006 exports were down to 1.7 mbd and just over 1.5 mbd for 2007. Pemex is expected to 'approach zero net oil exports' by 2014. Saudi Arabia has already replaced Mexico as our #2 source of oil and banking capital.
No Child Left : Currently here are 2,232 people in the world who were sentenced to life in prison while still minors. Only 2,225 of them are Americans in American jails - sentenced to life without the possibility of parole. Seven poor souls elsewhere must have done something really bad.
Foreign Policy : What do you think people are going to want the government to do when the oil runs out? Not now. Then. Now they'll say 'alternative energy' or 'reduce dependence on foreign oil.' But then. Ask them when their cars stop, when there's no gas or electricity for heat and light in their homes. When they go hungry. They won't want to ask the government then. They'll just want the army to get it for them!
Cash Crop : Afghans are teaching Iraqi farmers how to produce opium in the fertile parts of Diyala province, once famous for its oranges and pomegranates. Opium is spreading rapidly across Iraq as farmers find they can no longer make a living growing traditional crops. Another surge.
Weight Watchers : Some OPEC members' internal oil consumption has been growing very rapidly. If their consumption only grows 3% annually, they will need to increase OPEC production by a million barrels a year just for themselves. If they don't find a 'new' million barrels a year, guess where they are going to get it.
Wild Blue Yonder : Our military is so pooped and spread so thin that it could respond to a new threat only with massive air power, probably involving "limited nuclear operations."
High Water Mark : Some companies insure the AAA status of bonds, putting lipstick (AAA ratings) on pigs (shaky municipal and private bonds). This lets pension funds and such buy these 'AAA' bonds. If the insurers fail, the bonds revert to whatever level risk they actually are. Bankruptcy of the two of the largest firms is all but certain. This will cause $2.4 trillion in debt to be downgraded, resulting in losses of over $200 billion. Compare that to the harm caused by $100 billion in sub-prime losses.
Power Play : There are power shortages from southern China to Vietnam and west across the Indian subcontinent to Africa. Parts of Bangladesh, India, Nepal, Pakistan, Iran, Iraq, and places in central and southern Africa, Central and South America have shortages daily. These range from minor inconveniences to places where the economy is shutting down. The rich have outbid the poor. 'Twas ever so.
Taxation : The high price of oil is a tax collected by the oil industry and the Gulf kingdoms to fund our multi-trillion dollar debt. Bush visited the Middle East to assure the Saudis and friends that there would be no backlash to their investing in Citibank, Merrill Lynch, etc. 'Bailing out' sounds so much better than 'buying out'.
Hints : Canadian diplomats are attending "torture awareness workshops" designed to teach them how to tell if Canadian citizens they visit in foreign jails have been tortured. The seminar also lists those countries where torture is likely to be encountered: Afghanistan, China, Iran, Israel, Syria, and the United States.