$100 oil anyone?

Ghandi 2 wrote: Well that's the problem, IVNORD, not that there's no oil, that it will become extremely expensive to produce because we have to drill down so deep. And the economy would die with $300 oil.   It is true that oil often is much less affected by price increases and instead other things are affected, but if your gas was cheaper, people would switch to your brand and stop using Exxon.

_popupControl();   The Russian experiment showed that it was as profitable to pump oil from the deep wells as from normal ones. THe drilling was more expensive, but final cost of production was averaged down quite nicely. Of course, because of the higher initial costs that oil was more expensive but marginally so.  They stopped drilling deep wells only because there's no need to do so now - there's still enough oil.

IVNORD wrote: _popupControl(); The price of oil touched the $100 mark yesterday and briefly crossed it again today. Just 9 years ago, in December 1998, it hit its multi-year low of $10.35. In April 2003 after the war began, it was as low as $25.   Just curious how people feel about it.   (In case you don't care a tiny bit, it will affect the price of CDs you buy too)

Equality 7-2521 wrote: IVNORD wrote: _popupControl(); The price of oil touched the $100 mark yesterday and briefly crossed it again today. Just 9 years ago, in December 1998, it hit its multi-year low of $10.35. In April 2003 after the war began, it was as low as $25.   Just curious how people feel about it.   (In case you don't care a tiny bit, it will affect the price of CDs you buy too)   I don't mean to take this offtrack as this has nothing to do with oil, but IVNORD what's your opinion on a gold/silver backed currency vs what we have in place now?

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Don't be so modest. It's absolutely on-topic. If we had a stable currency, this $100 thread wouldn't exist.

 

The gold standard is heavily promoted by the Austrian school and the libertarians (Ron Paul talks about it too). To date I haven't heard or read about a single viable explanation how a monetary system based on the gold standard could be successfully implemented in a modern economy.

 

The gold standard is impossible unfortunately. Having been a currency of choice for as long as human civilization exists, gold cannot satisfy global economy requirements. The gold standard gradually but noticeably deteriorated for the past 200 years. Here's a simple math. MOney is a means of economic exchange. There must be enough money to buy/sell all goods/services produced, i.e. the money supply should be adequate. Let's assume US production of gold is 1,000 tons annually (I don't know the exact number). It means that the government can print only so much money (assume 1 ton of gold is an equivalent of $1M). It would be fine if the economy grew at a steady pace of $1B a year. When the growth is explosive as it was in the mid- late-90s, $1B may not be enough. Lets assume you manufacture PCs at $1,000 each. So $1B would be enough to sell 1M PCss. If the demand for pcs is higher, you would love to produce more of them to satisfy the demand, but then your increased production, say 1,5M Pcs, should be sold at the same total price of $1B as there's no more additional money in the system. It means that you would have to reduce the unit price to get rid of your inventory. It's called deflation. No sound business model can use the work-more-get-less principal. It's an extremely simlified explanation, of course, it's much more complex.

 

So the gold standard would be a drag on the economy. THat's why the strict adherence to gold has been abandoned way too often. HIstory shows that people could find a way around it at all times, be that ancient Rome, the United States from its independence to this day, or West European welfare states.

 

With that in mind, I am a proponent of a stable currency thru fiscal discipline and responsibility, which in its pure form is practically impossible, although some restriction to free use of the money printing press should be in place as it was in the early- mid-80s.

Slartibartfast wrote:  Actually it's the hydrogen fuel cell technology that still needs a lot of work.

I don't think fuel cells are the way to go.  I'd rather see continued development in ultra-capacitors so our cars can be completely electric, yet be able to travel fairly long distances.  Furthermore, make electric power cheap and green through use of nuclear primarily and supplement with solar, wind, hydro in areas where it's appropriate.  Save oil for plastics and other uses, as you noted.

Does anyone know if the rumored Gull Island oil field in Alaska really has as much oil in it as the entire Saudi Arabia field? Or is this just another conspiracy theory?

USGS only seems to have info on Prudhoe Bay and ANWR, which seems to suggest Gull Island is just nonsense. But I'm still curious if anyone out there knows anything about it.

Slartibartfast wrote: