A peek at the peak oil
problem By The Mogambo Guru
There are a few people who ask me to rebut
the argument that oil will go down in price,
thanks to a slowing world economy and the
increased use of alternative energy resources and
the "fact" that the world has zillions of barrels
of oil still waiting to be pumped. By now, my
response is automatic; "Oil go down in demand or
price? What a load of hooey! You're a stupid
freaking moron!" To which they always bizarrely
reply, "Oh, yeah? Well, screw you!"
For
proof of my Bold Mogambo Assertion (BMA), I
present Matt
Simmons, author of the book
Twilight in the Desert, being interviewed
by Jim Puplava at the Financial Sense Newshour. Mr
Simmons says, "Crude oil supply peaked in the
spring of 2005, and it's now about a million
barrels a day lower than it was at that peak."
There! There it is! This is the reference
to peak oil that I was looking for! It is the
perfect bit of delicious data allowing me to
modify my answer about peak oil by saying, "Oil go
down in demand or price? What a load of hooey!
Peak supply occurred in 2005, which you don't know
because you're a stupid freaking moron!"
Originally, I had wanted to animate my
little PowerPoint presentation to show the
cumulative long-term effects of peak oil, meaning
that the amount of oil pumped out of the ground
will be going down, faster and faster, which is
bad news when demand is going up, faster and
faster, and over 10 years or 20 years or 50 years
or so, the cumulative exponential change in each
of them resulted in a crossover price that was so
frightening that I went freaking bananas about how
oil priced at those insane levels means that we
are all freaking doomed!
Mr Simmons is
apparently not interested in my clumsy, amateurish
analysis or my hysterical conclusion, but implies
that I am right about this price thing when he
says, "I think the starting place is to realize
how unbelievably important the use of modern
energy, oil and gas and electricity, is; and two,
how ridiculously priced it still is."
How
ridiculous? By way of answer, he warns us to not
to "fall into a financial funk when the price
doubles, because it needs to double or triple".
I think it was important to notice that he
did not warn us not to "fall into a fit of
hysterical outrage and spontaneously form into
large, drunken mobs, marching on Washington, DC to
take over the Federal Reserve and put it into the
Capable Hands Of The Mogambo (CHOTM), a man who
knows exactly how to efficiently fire people
("Scram!"), because he has been fired so many
times, and whose qualifications to be chairman of
the Federal Reserve come from also being a man who
knows how to live within his budget because he
never has any money, since he is too stupid to
ever get a job and too disinterested and lazy to
even try getting one, so holding the money supply
constant, like the Founding Fathers wanted,
through complete inaction comes completely
naturally to him!
However, this is not
about another one of my psychotic episodes
concerning world domination in a Reign Of Mogambo
Terror (ROMT), but instead about "the race for
energy in the Arctic" and how the Russians have
recently claimed the North Pole as theirs, which
is supposed to be significant because they
"casually said 25% of the world's reserves are in
the Arctic".
I, of course, immediately
swallowed it hook, line and sinker, but Mr Puplava
was skeptical, and said, "Where do they get that
figure?" Mr Simmons replied, "They read it from
somebody." Hahahaha!
He goes on to say, "I
mean, it doesn't make any sense. We haven't
discovered any oil and gas in the Arctic. But if
you're modeling and you're trying to look, you
can't really say Arizona and Nevada because we've
proven there isn't any oil there. So you pick an
area we haven't ever been to because therefore
there's no way to prove that it's not there."
Hahaha!
This amazing "no way to prove it's
not there" thing is kind of coincidental, as I am
getting ready for my appearance at this year's
Silver Summit in Coeur d'Alene, Idaho, next week,
which is always my last appearance for the year,
as I usually spend the rest of the calendar year
volunteering to appear at parties as an
educational attraction, dressed either as a jovial
Halloween monster in October reminding everyone
that "The inflation of the American government and
its lackey, the corrupt Federal Reserve, is going
to rip the guts out of you and your stupid little
family by killing your money and wealth by
creating too much money and credit!", or appearing
as a festive turkey at family gatherings on
Thanksgiving where I helpfully explain "The
inflation of the American government and its
lackey, the corrupt Federal Reserve, is going to
chop your head off and then cook and eat the
miserable carcasses of you and your stupid little
family by killing your money and wealth by
creating too much money!", or as a jolly Santa
Claus in December where I make a present of the
advice, "The inflation of the American government
and its lackey, the corrupt Federal Reserve, is
going steal all of your Christmas presents and
then use the ribbons to strangle to death you and
your stupid little family by killing your money
and wealth by creating too much money and credit!"
So you can see it is also my last chance
this year to visit Wallace, Idaho, which is famous
for a legal ruling of an infamous EPA
(Environmental Protection Agency) argument,
subsequently called "probalism," that is defined
as, "If a negative can't be disproven, it must be
true."
The quick-thinking David Bond, of
silverminers.com, immediately recognized the
enormity of this astonishing precedent and
cleverly seized advantage of it by having it
declared that Wallace, Idaho, is the exact center
of the entire universe! And thanks to the EPA and
their new "probalism", since nobody can prove it
isn't, then it is! Hahaha!
I plan to
register a couple of new truisms at Wallace, that
Wonderful Place Where Facts Are Certified, namely
that The Mogambo is "The One True Love-Child Of
Elvis Presley" and also that "Everybody Owes Me A
Living", probably by appearing on talk shows
(Host: "So what is it like to be the One True
Love-Child of Elvis, where hordes of panting,
lusting, good-looking babes who are so mentally
ill that they make headlines around the world
clamoring after you because of the official genes
of Elvis Presley that you officially carry within
your Lusty Mogambo Loins [LML]?" Mogambo: "It's
fine").
Richard Daughty is
general partner and COO for Smith Consultant
Group, serving the financial and medical
communities, and the editor of The Mogambo Guru
economic newsletter - an avocational exercise to
heap disrespect on those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2007, The Daily
Reckoning.
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