Originally Posted by some_guy282

A note on oil prices of the recent past, since $50 was feared by the OP three years ago.

Many people (mainly economists) keep saying "If oil prices rise to price X, it will ruin the economy." Starting six or seven years ago, that price was $40 a barrel. Then it was $45, $50, $55, $65, $75... Each time they said prices would never get that high, and if they did it would cause a recession. They've also been continuously predicting oil will go back to "the good old days" of $40 a barrel. It hasn't happened.

I think Simmons mentions it in the above interview, but oil is still unbelievably cheap. At $65 a barrel it translates to 10 cents a cup. How much do people pay for coffee again?? There has been a lot of *****ing and moaning and hand wringing with all the price increases over the years with gasoline, but no one is changing their behavior. That's due to the inelastic nature of oil demand. In the '73 oil crisis prices quadrupled. That was caused by a shortfall in supply of about 7%. I think we're getting about 5% of our oil from Mexico right now, and soon that could be gone. I think in a crunch prices will easily push beyond $100 a barrel before it finally gets high enough to cause a recession and kill demand.

Of course, when the prices collapse there will be a large number of idiots on TV saying "See? At least the price of oil is down and we don't have to worry about that anymore..." And then when the economy kicks up again the prices will come right back with them, until global decline rates get so large prices remain high no matter what the economy is doing.

I've been following Peak Oil closely for three years now (why I ride a bike) and we're right on track for disaster.