Is waiting to happen, according to financial analysts.
Just saw Matthew Simmons, energy sector investment banker and Chairman of Simmons & Co., on CNBC's Fast Money talking about yet another record price for a barrel of oil.
Here's a representative quote:
"We're wasting so much time going on a witch hunt, trying to figure out who got the prices so high. What we ought to be doing is our homework for what we didn't learn in the last decade, the fact that we were giving oil away. It's still cheap. It's going to go higher.
It might go way higher."
Simmons' main point is that oil is not going to be going down, barring a major reorganization of the world's economy (whether through sound planning or, um, "natural causes"). What might happen at $300 oil, or $500 oil? Hard to tell, but the outlook isn't good for us First World conspicuous consumers. And what about a serious, even if temporary, disruption in world supply?
"If we have a shortage, we'll have a run on the banks so fast your eyes will spin. This is basically where everyone tops up their tank.
And we haven't run out of oil, but we could run out of usable diesel and gasoline.
Then we would have the Great American Disaster, because then within the week you've run out of food."
Let's just say that jaws dropped and time slowed down, even on the Fast Money set. The funniest thing -- actually the only funny thing -- on this video (they talk banking collapses too) is watching the camera pan from face to face, and the expressions on all these high-dollar traders listening to a fairly plausible doomsday scenario coming from one of their own is just priceless.
Actually, the best line I've read on the peak oil phenomenon comes from Ken Deffeyes, longtime Shell Oil research scientist and Princeton professor, and author of Beyond Oil: The View from Hubbert's Peak:
What do we do? First – admit that there is a problem. Several analysts are still in the initial denial stage: Jad Mouawad, Michael Lynch, Daniel Yergin, and ExxonMobil. You can cheer up a little by looking at www.CafePress.com. They sell 273 different items indexed under "peak oil." However, you may not want to carry a book bag that reads, "When you say 'cannibal' you make it sound like something bad."