PARIS (ResourceInvestor.com) -- It has been another week of crude oil records as the Nymex breached $103 per barrel and event Brent crude topped $100.
One of the reasons is that the Wal-Mart economy of the world, bargain basement U.S., has once again seen its currency rupture a little bit more. Stacking high and selling your countrymen cheap, either out on to the streets due to defaulted mortgages or on the fields of imperial war around the world is not really working as an economic plan for U.S. power.
The fall of the dollar was one of the factors - alongside Hugo Chavez and ExxonMobil’s arguments and Turkish incursions into Iraq - that popped crude oil into new territories. When an economy under performs, as the bloated, heavily-subsidised U.S. economy has done for decades, eventually something has to give.
The same thing happened in Japan, so long trumpeted as the great free market post-war miracle it was in fact an economy propped up on falsehoods. So much so that it entered a long period when its bankers sought to bail it out by making its currency so cheap to lend that anyone cold come and pick up some yen, basically for free. The famous yen carry trade.
Of course in the end all this did was pull other currencies down with it. Fast forward a little and the same has happened to the dollar. Now we are seeing the possibility that it is so devalued, the U.S. is having to be propped up by Mitt Romney’s degenerate Europeans, satanic Arabs and scheming Chinese, purchasing every U.S. asset there is to buy. Far from being the economic powerhouse of the world the U.S. has become a fire sale for those nasty socialists and Muslim folk.
The idea that anything can truly be free is an idea gaining currency amongst the Heath Robinson economics crew. The editor in chief of Wired magazine, Chris Anderson, is bringing a new book out called “Free: Why $0.00 is the future of business” spouting the newest set of nonsense tied to infinite growth.
“In 1954, at the dawn of nuclear power, Lewis Strauss, head of the Atomic Energy Commission, promised that we were entering an age when electricity would be "too cheap to meter." Needless to say, that didn't happen, mostly because the risks of nuclear energy hugely increased its costs. But what if he'd been right? What if electricity had in fact become virtually free? The answer is that everything electricity touched — which is to say just about everything — would have been transformed,” he writes.
This should be a clue to tear up the manuscript and think again. Energy is not only not free it is getting more expensive, and it will likely continue to do so over the years. Either due to supply, demand, peak oil, peak gas or peak nuke.
Electricity will continue to be created by gas, coal and oil. To build enough nuclear power stations to fuel the demand for energy would use up the world’s uranium and then some. But in the world of air conditioned corporations, replete with their hard line political (not economic) ideology of free markets, even a square wheel would roll uphill.
Advertising revenues from free products will not build industrial economies. Industrial economies will not run on click-throughs, page views or hits. Energy and most centrally oil are only going to be cheapened by economic collapse.
What Anderson should note is that the dollar’s fall - and its effect on oil’s rise - are not ‘free’ or anything like it. Instead this is a race to the bottom by economies run by delusional right wingers - and the gooey black stuff that powers them will never be free.
