By Chris Martenson: The Looming Energy Shock

I have a lot of time for Chris Martenson. He’s well grounded in science and has a lot of integrity. My only criticism of late is his recent campaign to blame central banks which I suspect is a marketing strategy to increase subscriptions because blaming bankers sells better than blaming thermodynamics, overshoot, and inherited denial.

Chris is predicting that within 3 years we will either have an economic collapse that temporarily masks the underlying energy problem, or we will have oil shortages and a price shock that will trigger a credit crisis like 2008 but worse. He backs these predictions with the correct data, in my opinion.

I independently came to roughly the same conclusion, although I would add a 3rd possibility given rising stresses around the world: a major war.

I think the 3 possible outcomes are roughly equal in probability, although given the deceleration in credit growth apparent from the following graph, an economic collapse has the lead by a nose.

global-debt-2017-06-29_21-27-57

energy-and-economy-10-4-2016

oil-investments-global-2017-06-29

 

There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs.

Due to a massive reduction in capital spending in the global oil business over 2014-2016 and continuing into 2017, the world will soon find less oil coming out of the ground beginning somewhere between 2018-2020.

Because oil is the lifeblood of today’s economy, if there’s less oil to go around, price shocks are inevitable. It’s very likely we’ll see prices climb back over $100 per barrel. Possibly well over.

The only way to avoid such a supply driven price-shock is if the world economy collapses first, dragging demand downwards.

Not exactly a great “solution” to hope for.

https://www.peakprosperity.com/blog/109505/looming-energy-shock

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