So How Do You Feel About $225 a Barrel?

According to a new study by Canadian banking institution CIBC, the price of oil will double by 2012. The CIBC can hardly be shrugged off as some wingnut “end of civilization” group with an anti-capitalist agenda. One thing Canada does extremely well is play-it-safe banking and economic forecasting.

I remember when oil was edging up towards 60 bucks a barrel we had economic experts assuring us that 100 dollar a barrel oil was “unthinkable” and an “economic impossibility”. Every time it would drop a few dollars after a surge, those same economists would say “See? Nothing to worry about”. Yet here we are, on a curve with no theoretical upper limit. Yes, a lot of that price surge is panic-based speculation. A japanese tanker gets attacked in the Persian gulf in the morning, and by lunchtime, the price of gas in Los Angeles has shot up. But justified or not, we unfortunately operate under an economic system that recognizes blind herd panic as a legitimate market force, so that becomes part of the “real” cost of oil in any case.

I have to wonder what those economists who insisted that oil could never, even theoretically, go over $100.00 a barrel have to say for themselves now, or if they’ve simply rewritten history and edited out their incorrect assumptions, now remembering a version in which they fervently warned us that oil would inevitably break 100 bucks. It occurs to me that one of the genuine symptoms of a terminally decadent society is the tendency to confuse what we wish to be true with reality – only at a dangerously high institutional and professional level.  

“We are not seeing any signs of concern in the supply chain that would cause us to limit the sales of any items.”

Really? Because the media seems hell-bent on creating the impression that if I walk into a supermarket today, I’ll be faced with empty shelves and issued a government ration card. But that’s silly: when has the mainstream media ever helped foster a climate of irrational panic-mongering?