Perfect Storm Brewing, by Sebastian Ronin, April, 2008

As at April 18, 2008 a barrel of crude on the New York Mercantile Exchange closed at $116.69 US. This most recent price increase was being attributed by analysts to rebel instability in Nigeria. A Nigerian rebel group has claimed responsibility for sabotaging a pipeline run by a Royal Dutch Shell PLC joint venture. Rebel instability now joins financial hedging by the investment community as the factors contributing to the rise of oil prices, courtesy of the corporate media.

For all that can be said about the international investment community, especially the insiders and market makers, it cannot be said that these individuals are stupid, within the accepted guidelines and "rationale" of their game. They well know about Peak Oil, its consequences, and that a barrel of crude is likely destined for $200, possibly by year's end. The investment maxim, "Invest when there's blood in the streets," has never carried more weight nor been more applicable on a global scale.

Notwithstanding the existing pressures on the world financial system, the "stool" to be kicked out from beneath the condemned will likely come in the form of the global investment community twigging on the fact that, relative to Peak Oil, all listed companies on the world's exchanges are grossly over-valued. Market equilibrium, contentious at the best of times, is further skewed by the taking of unparalleled short positions. In turn, global P/E's collapse accordingly precipitating pressures for a massive sell-off. The only conundrum is, who in their right mind is going to buy? The fragile glue of rube investor confidence which keeps the whole shell game going evaporates. The psychological meltdown precedes the physical meltdown. The scenario for a type of stock market cannibalism on the world's exchanges is unprecedented. Programmed and institutionalized greed indicate that the global investment beast will feed on its own belly.

Coupled with the rise of oil prices is a 40 per cent average rise in food costs worldwide since mid-2007. Food riots in Haiti, Egypt and Ivory Coast with soldiers guarding fields and warehouses is a portent of things to come. The carrying capacity of the planet minus oil is likely around 3 billion, which insinuates a human cull of around 4-5 billion by century's end. It is all energy related. It is all to do with living in the era of Post-Peak Oil. In this era of irreversible energy decline (supply) coupled with exponential population growth (demand) the industrial world as we have known it begins its collapse. The situation is simply non-sustainable, on a scale to place the empty platitudes and policies of liberal and greenish politicians, and their governmental mandarins, to a position of well-intentioned and self-serving finger painting.

It is a perfect storm brewing.