Thursday, March 26, 2009

Peak Oil Financial Planning: High Oil Prices and Inflation Loom

"Financier sees oil shock from credit crunch," By Christopher Johnson
Reuters, March 26, 2009

"The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices," says energy investment banker Matthew Simmons. "We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner." (Continued here)

Thus, in addition to the dollar losing value from "printing dollars" to pay for bailouts the dollar will weaken from inflation brought on by high oil prices. This will bring about tighter credit and reduced investment in oil production and ageing/corroding oil production infrastructure.

Soon, governments will have to subsidize oil production and the unemployed, as well as heating oil and natural gas for heating their homes.

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