My twitter feed had an entry from Tim O'Reilly - a prominent figure in the technical trade book publishing industry. He had a link to a presentation by a Canadian economist named Jeff Rubin. I have to say this is the most fascinating economics presentation I've heard in years. He happens to have a very folksy style that has been likened as a cross between Foster Brooks and John Wayne. But it's what he actually says that makes you pay rapt attention.
Briefly he postulates:
- Oil will cost over $100-200/barrel in the next 10-15 months because of demand by OPEC countries
- We have plenty of oil in many places, but the cost of extraction is very high e.g. oil shale, undersea etc.
- $200/bbl oil means $7/gal gas
- This means Distance costs money disrupting the global trading economy of the past 30 years.
The tile of his book is: Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization
He theorizes that we will see a return of industry to our shores by market forces.
Video and a bit more thoughts after the jump
Here is a presentation that was linked in the twitter message:
If what he says is true then we are headed for another economic shock on these shores and unless this administration is prepared to "spin" this as an opportunity and implement the needed investments, this could put the country back in the hands of the crazy republicans.
What do you think?