[Culturechat] Re: Forbes Article & an interview for the Anti-Kunstler Crowd
WesTexas@aol.com
WesTexas@aol.com
Mon, 24 Jan 2005 12:54:50 EST
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Following is a link to the Forbes article. I also included the summary that
was posted on the Energy Bulletin website. FYI--in this week's (1/24/05)
Barron's, Felix Zualuf, who was pretty accurate regarding 2004 oil prices,
makes a prediction similar to Stephen Leeb's.
By the way, for the Anti-Kunstler crowd (at least those who get U.S.
television), I think that John Stossel has an interview with Jim Kunstler (I assume
regarding New Urbanism) on ABC's 20/20 Friday night (1/28/05). I am pretty
sure that Stossel has a viewpoint opposite from Kunstler.
On the other hand, American are clearly voting with their dollars regarding
New Urbanism, even in the Sunbelt. CNBC had a story this morning on a large,
and very popular, New Urbanism project in Los Angeles. Here in the Dallas
area, New Urbanism projects are selling and renting like crazy. The Dallas
Morning News has a good article today (1/24/05) on the Mockingbird Station
project. In addition to the twenty-somethings, these projects are increasingly
popular with retired and soon to be retired people, so that they can get away
from being so dependent on cars.
Also, the Drudge Report this weekend had a link to a Daily Telegraph article
regarding the British government's view of a possible American attack on Iran:
http://dailytelegraph.news.com.au/story.jsp?sectionid=1274&storyid=2552224
Forbes Article:
http://www.energybulletin.net/3978.html
Published on Wednesday, January 12, 2005 by Forbes
Prophets of doom: the coming oil crisis
by Dan Ackman
The world economy has gotten fairly comfortable with oil at $45 a barrel. But
how will it react to paying $100 a barrel three years from now? Or $150 in
five years?
That's what the future holds according to Stephen Leeb, president of Leeb
Capital Management and author of The Oil Factor (Warner Books 2004). The result,
Leeb says, will be double digit inflation--if we're lucky. If we're not, it
will be a severe depression. We asked Leeb to explain the gilding of black gold.
You say the price of oil will rise much higher than it already has. Why?
"The problem we have is that there are 2.3 billion people in Chindia," Leeb
says, using shorthand for a combined China and India. "Today, China and India
use the energy-equivalent of 5.5 barrels of oil per person per year, while rich
nations use 39. No matter how rosy your thinking is as to the global supply
of oil, there is no way there is going to be enough to satisfy the demands of
an extra 2.3 billion people coming online."
As China and India become rich nations, the demand for oil could grow at 6%
per year, compared to 2% recently. Currently, the world has almost no excess
supply. The planet is operating at anywhere from 95% to 99% capacity, Leen says.
"There is no margin for error." The only way the system can respond is
continued price increases.
How bad will it get?
At the end of 1999, oil was trading for around $10 a barrel. Since then, it
has risen by about 29% per year. Simply extending the trend line means that oil
will be at $100 a
barrel in about three years and at $160 in five years, Leeb says. If prices
rise the way they have in the last year, the resulting levels will be even
higher, and that's without any major geopolitical crisis in the Persian Gulf or
anywhere else. "It's not a heroic position," Leeb says. "But I don't know how
you avoid it."
What will the result be?
We'll see historically high inflation of 11% to 15%, according to Leeb.
"That's not even so unusual," Leeb says. He notes that the U.S. has had bouts of
inflation at that level during the two world wars and in the 1970s at the tail
end of Vietnam.
"We're kind of overdue," he says.
Economically, the U.S. is already on a kind of war footing, with the war on
terror, Iraq, massive military spending and a shortage of a key commodity,
specifically oil.
"I hope I'm wrong," he says. "I've never wanted to look more like an idiot
than I do right now. But I don't see it."
When and why will it bottom out?
"I don't see it bottoming out soon," he says. " I think it's a decade- or
generation-long problem. A depression would stop it. But as long as the Federal
Reserve keeps real interest rates negative, that can be avoided."
The better outcome may be that "as energy prices continue to rise, we'll
organize a worldwide effort to develop alternative energies," Leeb says. "Maybe
that will even bring the world together."
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<HTML><FONT FACE=3Darial,helvetica><HTML><FONT COLOR=3D"#000000" FACE=3D"Gen=
eva" FAMILY=3D"SANSSERIF" SIZE=3D"2">Following is a link to the Forbes artic=
le. I also included the summary that was posted on the Energy Bulleti=
n website. FYI--in this week's (1/24/05) Barron's, Felix Zualuf=
, who was pretty accurate regarding 2004 oil prices, makes a prediction simi=
lar to Stephen Leeb's. <BR>
<BR>
By the way, for the Anti-Kunstler crowd (at least those who get U.S. televis=
ion), I think that John Stossel has an interview with Jim Kunstler (I assume=
regarding New Urbanism) on ABC's 20/20 Friday night (1/28/05). =20=
I am pretty sure that Stossel has a viewpoint opposite from Kunstler. =
<BR>
<BR>
On the other hand, American are clearly voting with their dollars regarding=20=
New Urbanism, even in the Sunbelt. CNBC had a story this mornin=
g on a large, and very popular, New Urbanism project in Los Angeles. =20=
Here in the Dallas area, New Urbanism projects are selling and renting like=20=
crazy. The Dallas Morning News has a good article today (1/24/05) on=20=
the Mockingbird Station project. In addition to the twenty-some=
things, these projects are increasingly popular with retired and soon to be=20=
retired people, so that they can get away from being so dependent on cars.&n=
bsp; <BR>
<BR>
Also, the Drudge Report this weekend had a link to a Daily Telegraph article=
regarding the British government's view of a possible American attack on Ir=
an: <BR>
<BR>
http://dailytelegraph.news.com.au/story.jsp?sectionid=3D1274&storyid=3D2=
552224<BR>
<BR>
Forbes Article:<BR>
<BR>
http://www.energybulletin.net/3978.html<BR>
<BR>
</FONT><FONT COLOR=3D"#000000" FACE=3D"Lucida Grande" LANG=3D"0" SIZE=3D"3">=
Published on Wednesday, January 12, 2005 by Forbes<BR>
Prophets of doom: the coming oil crisis<BR>
<BR>
by Dan Ackman<BR>
<BR>
The world economy has gotten fairly comfortable with oil at $45 a barrel. Bu=
t how will it react to paying $100 a barrel three years from now? Or $150 in=
five years?<BR>
<BR>
That's what the future holds according to Stephen Leeb, president of Leeb Ca=
pital Management and author of The Oil Factor (Warner Books 2004). The resul=
t, Leeb says, will be double digit inflation--if we're lucky. If we're not,=20=
it will be a severe depression. We asked Leeb to explain the gilding of blac=
k gold.<BR>
<BR>
You say the price of oil will rise much higher than it already has. Why?<BR>
<BR>
"The problem we have is that there are 2.3 billion people in Chindia," Leeb=20=
says, using shorthand for a combined China and India. "Today, China and Indi=
a use the energy-equivalent of 5.5 barrels of oil per person per year, while=
rich nations use 39. No matter how rosy your thinking is as to the global s=
upply of oil, there is no way there is going to be enough to satisfy the dem=
ands of an extra 2.3 billion people coming online."<BR>
<BR>
As China and India become rich nations, the demand for oil could grow at 6%=20=
per year, compared to 2% recently. Currently, the world has almost no excess=
supply. The planet is operating at anywhere from 95% to 99% capacity, Leen=20=
says. "There is no margin for error." The only way the system can respond is=
continued price increases.<BR>
<BR>
How bad will it get?<BR>
<BR>
At the end of 1999, oil was trading for around $10 a barrel. Since then, it=20=
has risen by about 29% per year. Simply extending the trend line means that=20=
oil will be at $100 a <BR>
barrel in about three years and at $160 in five years, Leeb says. If prices=20=
rise the way they have in the last year, the resulting levels will be even h=
igher, and that's without any major geopolitical crisis in the Persian Gulf=20=
or anywhere else. "It's not a heroic position," Leeb says. "But I don't know=
how you avoid it."<BR>
<BR>
What will the result be?<BR>
<BR>
We'll see historically high inflation of 11% to 15%, according to Leeb. "Tha=
t's not even so unusual," Leeb says. He notes that the U.S. has had bouts of=
inflation at that level during the two world wars and in the 1970s at the t=
ail end of Vietnam.<BR>
<BR>
"We're kind of overdue," he says.<BR>
<BR>
Economically, the U.S. is already on a kind of war footing, with the war on=20=
terror, Iraq, massive military spending and a shortage of a key commodity, s=
pecifically oil.<BR>
<BR>
"I hope I'm wrong," he says. "I've never wanted to look more like an idiot t=
han I do right now. But I don't see it."<BR>
<BR>
When and why will it bottom out?<BR>
<BR>
"I don't see it bottoming out soon," he says. " I think it's a decade- or ge=
neration-long problem. A depression would stop it. But as long as the Federa=
l Reserve keeps real interest rates negative, that can be avoided."<BR>
<BR>
The better outcome may be that "as energy prices continue to rise, we'll org=
anize a worldwide effort to develop alternative energies," Leeb says. "Maybe=
that will even bring the world together."<BR>
<BR>
</FONT><FONT COLOR=3D"#000000" FACE=3D"Geneva" FAMILY=3D"SANSSERIF" SIZE=3D"=
2"></FONT></HTML>
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