Tuesday, June 10, 2008

The Oracle has spoken

We used to have a joke in the real estate biz. I'm sure you've heard some version of it. You know, the one that goes, "And if you believe that...I've got some great parcels on the bottom of the ocean that you would be interested in!"

Of course that was only ridiculous BEFORE the invention of offshore drilling and the sale of blocks for millions of dollars. Suddenly that property on the bottom of the ocean had a decent value! Makes you wanna rethink a few things doesn't it?

So, now, in 2008, the Oracle has spoken. And the question pops up again. If you believe that, I've got some parcels on the bottom of the sea for you!

The Oracle in this case is none other than Allen Greenspan himself. AKA- "The Pied Piper." Actually, I've never met the man or heard him speak and do not claim to be any kind of expert on Mr. G. himself. I have great respect for "successful" persons of all flavors and he certainly deserves some high level of respect for his life accomplishments. However....

"The Age of Turbulence," Greenspan's new release, is fascinating to say the least. And there are a myriad of interesting topics and statements made in the book that could be the subjects of many a blog post. But the interesting one I chose to discuss today is found on page 442.

"None of the tight balance between supply and demand is due to any shortage of oil in the ground." So there you have it. The Oracle has spoken.

Now, if you believe that....

This may be the biggest misunderstanding related to geology that I have ever encountered. What planet has this guy been living on? The oil companies have been killing themselves for years trying to find some more boomer fields with easy to get, high grade, go-go juice. And it hasn't happened. Overall, exploration has been pretty disappointing. The whole idea of Peak Oil is that there IS a shortage of oil in the ground. That shortage is a natural result of the geology of Planet Ocean and the natural processes that created, deposited and preserved the oil we have become so dependent on. If there wasn't a shortage, we would still have $3.00 per barrel oil like we used to! Soon, it will be $300.00!

Did you notice that Mr. Bush went to Saudi twice recently? Mr. Hillary even scoffed at him and complained that Dubya shouldn't be "begging" the Saudis. Hmmm. Why not? We are in big trouble. Maybe we should have sent them a better fruitcake in that Christmas gift basket, uh, I mean that Ramadan Gift basket.

I wasn't able to do a complete concordance on The Age of Turbulence, but I fanned the pages pretty good a few times in the bookstore and I am fairly certain that the term "Peak Oil" does not appear in the book at all. It does not show up in the index anyway. If you find it, please send me a comment with the page number.

Isn't that odd? Peak Oil is considered a fairly serious issue. It may be the defining issue of the 21st century. Yet the entire concept is prominently absent from the most recent work of one of the "architects" of the current global economy. Hmmm. What's that smell?

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