The Way of the Investment Class
An investment advisor/blogger (I believe) had this to say about Peak Oil:
The Last Word on Peak OilI posted the whole thing because it articulates a last gasp attempt at preserving the status quo, with a hefty set of blinders applied. The Stalwart desperately wants to use his standard line of reasoning on all things economic, but can't seem to pull the trigger and at least try to grasp the obvious. The whole post reads: I just don't want to know.
The title of this post is fecetious because I've never had anything to say about Peak Oil. I don't understand it, and somehow I don't see it being worthwhile to put in the effort to be informed, as I still imagine I won't understand it. If you wanna start looking into it, start here.
I only bring this up because a commenter on my earlier post said this:
The long downtrend is consistent with the peak oil theory. From the peak (whenever that is), this graph will continue as a mirror image with generally rising prices.
Two thoughts crossed my mind upon reading this: 1) Peak Oil theory better include the historical decline in the price of oil. After all, it's already happened, and it's pretty bad if a theory can't even correctly state the past. 2) If indeed the commenter is correct, and the rise in oil prices will be a mirror of the past, then we're not seeing the upward leg yet, as this latest sharp run doesn't look anything like the long slow decline (with occasional upward shocks) over the past 80 years.
And that's my last word (for now) on Peak Oil.
I seem to recall losing my shirt via the all-too-similar ignorance gambit on several investments of mine. Won't make that mistake again.
I saw a related post by the always interesting Barry Ritholz at the Pig Picture. He showed the same NYT graph:
Much like the commenter at The Stalwart's blog, I added essentially the same dime-store analysis:
Invert that plot and show Gallons/Dollar and you will see Peak Oil written all over it.
The peak in Peak Oil occurs at maximum global production which equates to inflation-corrected cheapest per volume delivered. This is essentially Gallons/Dollar. If it keeps going, we are seeing the backside of the peak, no two ways about it