Jim Kunstler is in top form in this week's dispatch from his popular blog, in which he holds the NY Times to account for their unacceptable denial over oil prices that are poised to surpass the all-time high set in 1980 in real terms.
Quoting Times business reporter Michael Grynbaum, who wrote, "many are at a loss as to what keeps driving the price" of oil, Kunstler chides the paper for failing to notice the obvious reason - "the demand line has crossed the supply line" - and for ignoring the analysts who are actually paying attention to this underlying supply crisis.
Kunstler then details a list of market trends in play:
Hoarding of oil futures by international investors eager to replace steadily weakening dollar-denominated assets with tangible, valuable assets;
Oil producing countries that continue to increase domestic consumption even as production goes into decline, causing exports to decline faster than production rates;
Robust instability in the global finance system;
Grain scarcity and declining food production;
Oil industry nationalism, in which most remaining oil supplies are controlled by national companies willing to negotiate long-term supply contracts with favoured clients;
Chronic underinvestment in extracting and refining equipment combined with aging skilled workers; and
Regional political instability, as in the Middle East and Nigeria.
Finally, he notes the "pervasive cluelessness" of the mainstream newsmedia themselves as yet another driving force and symptom of a political system that has gone out of whack and can no longer respond meaningfully to credible threats.
The USA, with a domestic economy running entirely on sprawl development and automobility, "could not find itself in a less favorable position among all these forces roiling the scene. It certainly can't afford to continue its pathetic pose of cluelessness."Unfortunately, no one in the US political mainstream (or the Canadian political mainstream, for that matter) is even talking about these issues, let alone addressing them meaningfully.
Here in Hamilton, we continue to stack the deck in favour of an increasingly absurd airport development project, continue to build big box developments in the middle of nowhere, celebrate the quarter-billion dollar construction of an eight kilometre highway to feed sprawl on prime farmland, and focus all our economic development energy on a planning model with very poor long-term prospects.
Why do we continue to ignore the obvious?
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