If you don’t know who Jeff Rubin is, he was formerly the chief economist for the CIBC and he always had some interesting views on the the Canadian economy and the world economy. He was recently on the Hour with George Stromboulopoulos (OK I am a couple weeks behind, it was in in May!) and had some very interesting viewpoints on where the world is heading and what will happen with oil prices.
The link to the video is here, Jeff Rubin on The Hour
Some of the key observations I took from this was the shrinking of our world if (or more accurately when) oil prices get back to triple digits and how it will effect globalization. I would love to hear some of your thoughts as well.
I especially liked how he talked about cheap oil disappearing, which has been something we have talked about for ages. I can personally guarantee we will never run out of oil, it’s just not how the economy works. Once the price reaches a certain point it just becomes unfeasible to produce it and we move to the next most cost effective method. At that point the $200 or $300 or possibly $500 a barrel oil sits in the ground, never to be used.
I just started reading Rubin’s book last night and he’s making some interesting points. In the introduction, he states “if you want to grow the economy, you need to burn more energy” Hmmm, I thought, its not just the gas we put in our cars but the trains, planes, ships, factories…our jobs that depend not just on oil, but on cheap oil.
He continues to state that the oil depletion poses a great threat to the global economy. Everything in our economy, dare I say our way of life, is based on cheap oil. Speaking of which, he says that is why globalization is going to grind to a halt because, “In the global economy, no one thinks about distance in miles – they think in dollars.”
Its easy to follow his argument that the world is going to get smaller. Maybe, but one thing is for certain, the world is changing.