# The world is going broke



## easylikesunday (8 September 2010)

Interesting... 

http://www.youtube.com/watch?v=m6FNYvC4uyM


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## c-unit (13 September 2010)

Yep. This is what happens when you have a system of paper money that isn't backed by anything real. Central banks around the world printing money is equivalent to hidden taxation (through inflation) and theft - stealing purchasing power from those who have earnt it.

'Tis what happens when governments and regulatory authorities interfere with market forces 

To me, the real problem is peoples misconceived fear of deflation. Deflation is actually a healthy thing, and reflects increasing productivity and economic capacity. Inflation is unhealthy, reflects loss of purchasing power and encourages consumption over investment.


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## nioka (13 September 2010)

Of course it is. The pyramid selling program relying on growth through lending that is out of proportion to actual production will see to that.


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## Slipperz (13 September 2010)

Glad I'm in good company


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## easylikesunday (14 September 2010)

Peter Schiff, who features in the video I posted above made several predictions in 06/07 about the current recession.

Check out this video as he talks about whats ended up happening. He is basically 100% accurate, all the while the "expert economists" laugh at his claims..

http://www.youtube.com/watch?v=2I0QN-FYkpw

BTW, how do you embed videos?


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## Smurf1976 (15 September 2010)

We have a financial "industry" growing way out of proportion to real production in the economy. If that were in a human or animal, it would be commonly referred to as cancer.


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## Agentm (15 September 2010)




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## explod (15 September 2010)

And our wonderful US of A is leading the way.   Following extract from Dan Norcini.  For the entire article go to JSminsite on the following link:-

http://jsmineset.com/



> The funny money has made its way into the commodity sector driving food prices to unseemly high levels once again just as what happened in 2008. Corn is now within spitting distance of $5.00, wheat is more than $7.00, soybeans are over $10, sugar is over $0.24/pound, cotton is closing in on $1.00, coffee is up near $2.00 pound wholesale ( a 13 year high), cattle are just shy of $1.00/pound, bellies are trading over $1.50/pound for fresh product. In short, the consumer is on the verge of watching his or her’s disposal income decimated by high food prices at the very time that a record number of Americans are on food stamps and are either unemployed or underemployed.
> 
> I shudder to say it but based on what I can see of the price action across the commodity sector today, an evil has now been loosed upon the land that portends the eventual ruin of the middle class.
> 
> ...


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## nioka (15 September 2010)

Smurf1976 said:


> We have a financial "industry" growing way out of proportion to real production in the economy. If that were in a human or animal, it would be commonly referred to as cancer.




That is the way I think of the finance industry. "A cancer on the productive side of the world." 

There is a tendancy for discussion on the cost of maintaining the aged section of the population. What is the real cost to society of maintaining such a large portion of the overpaid section that is not productive?. In that section I include myself. The profit I am making through trading in shares is out of proportion to the effort and investment these last three years. In my case at least I pay my way in my old age and some of my profit has gone/is going to help some not so fortunate.

The stock market is manipulated by vested financial interests that rely on constant turnover to milk the system. Today is promoted as a "down" day after three "up" days for no real reason. A couple of "down" days will trigger stop losses and cause a third. Then they will come out with some "good" news and promote buying again. The trading will create charts on stocks that traders will use and say "I told you so". So after a period the charts will do their own promotion of up and down days and give the turnover that the brokers want. All the time being unproductive and a burden on those that are producing something of value.


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## Smurf1976 (16 September 2010)

nioka said:


> What is the real cost to society of maintaining such a large portion of the overpaid section that is not productive?



It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.

100 years ago it was engineering, science and so on. Medical breakthroughs, mass adoption of cars, electricity, aviation etc. Now it's all about the charts, with anything else that happens to occur being viewed in the context of how it relates to trading and finance, rather than the reverse.

The energy industry is a classic example. Electricity these days is all about trading, with actual power stations and transmission lines merely the means of facilitating that trading. And we've built quite a few new lines at huge cost, and a few power stations as well, that are "needed" for no reason other than to facilitate that "trading". The lights would still be on if they hadn't been built, but the "market" wouldn't operate nicely without them and so they were built. There's a cost in all of that - and you're paying it with every power bill, as is every business that actually produces something of real value. Just one of the many "taxes" we're all paying in order to facilitate the financial markets.


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## nioka (16 September 2010)

Smurf1976 said:


> It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.




You make a valid point. It is an angle that I had not given much attention. The more I think about it the more I understand the importance. Half my neices,nephews and grandkids suddenly became a bigger loss to society than I had previously thought. This topic is bound to get some lively family discussions in the near future.


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## explod (16 September 2010)

nioka said:


> You make a valid point. It is an angle that I had not given much attention. The more I think about it the more I understand the importance. Half my neices,nephews and grandkids suddenly became a bigger loss to society than I had previously thought. This topic is bound to get some lively family discussions in the near future.




It was encapsulated in the works of Karl Marx.   

The trouble is that no one has ever wanted to believe there would be limitations one day.  That day is getting very close in my view.


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## nioka (16 September 2010)

explod said:


> It was encapsulated in the works of Karl Marx.




Suddenly there becomes a worrying angle although Marx must have been right on the odd occasion.


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## explod (16 September 2010)

nioka said:


> Suddenly there becomes a worrying angle although Marx must have been right on the odd occasion.




He was misrepresented, misinterpreted and never well understood.   His tenet was *socialism* not *communism*.  Keynes consumerism created the distortions.

I have experienced socialism working very well during my time in Sweeden.  That experience changed my outlook a great deal.   Interesting too that their economy and currency is currently one of the strongest.   Engineering expertise is second to none and in spite of the cold they love life.


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## Smurf1976 (16 September 2010)

explod said:


> The trouble is that no one has ever wanted to believe there would be limitations one day.  That day is getting very close in my view.



Totally agreed there.

If you don't think there's a limit, to anything, that just means that you haven't either found or calculated it yet.


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## Tanaka (16 September 2010)

The US government has produced 4 surplus budgets in the last 40 years...  :shake: ...China hasn't seen a deficit in over 16 years! I'll let you guys draw the conclusions.


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## Sunder (17 September 2010)

Smurf1976 said:


> It's not just the financial cost. Think of how many very smart people, with well above average intelligence, spend their days shuffling money around for no net gain to society. If it wasn't for the financial cancer, these people would be top doctors, engineers etc doing all sorts of wonderful things from which we would all ultimately benefit in some way.




That's not entirely true. Efficient markets are required to ensure efficient allocation of labour. It's necessary for someone in London to connect an Australian coffee maker with a Brazillian coffee grower in an efficient way - say through commodity markets, rather than have individual representatives from each buyer go over there to face cartels, or buying cartels like Woolworths force lower prices off starving farmers.

Likewise, if China can produce widgets cheaper than Korea, then the finance people can make sure China gets more capital and raw materials than Korea through forex, capital markets and commodity markets. 

However, there can be too much of a good thing, when self-reinforcing speculation distort prices, and misdirects labour efforts.

We are in a period of "too much of a good thing".


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## nioka (17 September 2010)

explod said:


> He was misrepresented, misinterpreted and never well understood.   His tenet was *socialism* not *communism*.  Keynes consumerism created the distortions..




I'm not a socialist. I believe in  benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance. 

Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.


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## prawn_86 (17 September 2010)

nioka said:


> I'm not a socialist. I believe in  benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance.
> 
> Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.




I agree. A capitalist system with basic rights (education, health etc) provided by the gov is my ideal model.

Personally i am one of those who do not contribute to society in a meaningful way. I simply move money from one place to the other with no real net gain. Pays well though


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## explod (17 September 2010)

nioka said:


> I'm not a socialist. I believe in  benevolent capitalist system. A system where you are rewarded for effort and enterprise but fairly rewarded. The current system is out of balance.
> 
> Lets face it we are not all equal. Some have more "brains" than others, some have talent some do not, some have brawn. Everyone should have equal opportunity, the rest is up to them.




Sweeden as my example allows for the talented and hard working to prosper more and there is indeed an entrepreneurial wealthy class, my Rotarian hosts were certainly part of that.  A basic difference is that the essentials to basic survival are state run.  E.g water, power, education and health care.  They have for example 2 years of compulsory military training where discipline and skills are the focus.

Its the very big money people (multinational or monopoly levels) who do not like a more equatible system and of course they have the lobby power over governments in a system like ours and the clout to unduly control the mass media philosophy too.


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## nioka (17 September 2010)

explod said:


> A basic difference is that the essentials to basic survival are state run.  E.g water, power, education and health care.  .




The problem we face in Australia is that even the Labor parliament are hell bound on selling all public assets. Electricity is going. Roads are becoming toll roads. Water rights being sold to overseas investors is going to come back to haunt us one day. Hospitals are underfunded and aged care is a disgrace.

The only socialists are the greens and they are the "close down everything" party. If they get any more power then learn how to starve in a grass hut. You certainly wouldnt be able to live off the land as it would be all protected and locked up.


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## wayneL (17 September 2010)

Explod

You are suffering cognitive dissonance. 

Sweden is a mixed economy, not a socialist economy.


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## explod (17 September 2010)

wayneL said:


> Explod
> 
> You are suffering cognitive dissonance.
> 
> Sweden is a mixed economy, not a socialist economy.




Run on socialist lines but few want to conceed that, they would soon scream communists if we tried to nationalise the utilities here.   

But even if as you say *"mixed",* it is a far cry from our own road down the Thatcher path.  Love her great line, "business will regulate itself as people are basically honest"

Ho Ho Ho B *Ho*

But I do suffer from dyslexia, is it something like that?  But often unsure of the right way.


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## Smurf1976 (17 September 2010)

Sunder said:


> That's not entirely true. Efficient markets are required to ensure efficient allocation of labour. It's necessary for someone in London to connect an Australian coffee maker with a Brazillian coffee grower in an efficient way - say through commodity markets, rather than have individual representatives from each buyer go over there to face cartels, or buying cartels like Woolworths force lower prices off starving farmers.
> 
> Likewise, if China can produce widgets cheaper than Korea, then the finance people can make sure China gets more capital and raw materials than Korea through forex, capital markets and commodity markets.
> 
> ...



Indeed. The financial markets do have a valid role in facilitating business. But when the market itself becomes the dominant focus of just about everything then that's going way too far. 

Witness the decline of bees and the Russian drought as examples. Media reports mention that they might have an impact on prices, followed by comment from some trader or broker. No mention anywhere that humans might starve or, if bees disappear, become extinct altogether.

It's equally ridiculous when a rise in unemployment, a bad thing, is seen as "good" and sends markets up because it might lead to central banks printing a few more $ out of thin air. Personally, I fail to see how evidence of a faltering economy is "good" for business whether or not it is good for the markets.

Nothing wrong with markets per se. But they aren't the meaning of life...


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## explod (17 September 2010)

Smurf1976 said:


> It's equally ridiculous when a rise in unemployment, a bad thing, is seen as "good" and sends markets up because it might lead to central banks printing a few more $ out of thin air. Personally, I fail to see how evidence of a faltering economy is "good" for business whether or not it is good for the markets.




Well its stops the wondering, any real news removes the uncertainty so is positive if someone says so.   Sentiment does the rest, its time to party because its all over anyway.


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## wayneL (17 September 2010)

explod said:


> Run on socialist lines but few want to conceed that, they would soon scream communists if we tried to nationalise the utilities here.
> 
> But even if as you say *"mixed",* it is a far cry from our own road down the Thatcher path.  Love her great line, "business will regulate itself as people are basically honest"
> 
> ...




Thatcher had faults, but it should never be forgotten that the conservatives under Thatcher pulled the UK from being the sick man of Europe to a thriving modern economy, with a normal business cycle...

...only to have the Labour heathen take it back to the sick man of Europe again.


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## explod (17 September 2010)

wayneL said:


> Thatcher had faults, but it should never be forgotten that the conservatives under Thatcher pulled the UK from being the sick man of Europe to a thriving modern economy, with a normal business cycle...
> 
> ...only to have the Labour heathen take it back to the sick man of Europe again.




Of course deregulation, stimulas and tax relief to the big players to burn does do it.  You only have to take a look at the 20 year dow and line it up with the fundamental shifts of monetary policies to see why.   I'm just saying the illness is now so terminal that no  amount of the usual medicine is going to help anymore.   Notice gold and silver rising around the clock at the moment, a bad sign.


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## Smurf1976 (17 September 2010)

wayneL said:


> Thatcher had faults, but it should never be forgotten that the conservatives under Thatcher pulled the UK from being the sick man of Europe to a thriving modern economy, with a normal business cycle...
> 
> ...only to have the Labour heathen take it back to the sick man of Europe again.



How much of that was really due to Thatcher? And how much was due to having a fortune coming in from the North Sea oil and gas boom?

Time will tell how well the UK economy does as North Sea oil and gas production declines. I doubt they're going to do overly well however as a country almost totally dependent on imported energy, a situation which in itself is part of the Thatcher legacy (ie shut down the coal industry and halt the growth of nuclear).

I don't doubt that some good did occur in those years, but I do think the energy boom which coincided has lead to an overstating of the gains elsewhere in the economy.


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## wayneL (17 September 2010)

explod said:


> Of course deregulation, stimulas and tax relief to the big players to burn does do it.  You only have to take a look at the 20 year dow and line it up with the fundamental shifts of monetary policies to see why.   I'm just saying the illness is now so terminal that no  amount of the usual medicine is going to help anymore.   Notice gold and silver rising around the clock at the moment, a bad sign.




But that is nothing to do with Thatcher. The damage in anglo saxon economies was in subverting the business cycle starting in 2001, after Thatcher was finished.


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## Smurf1976 (17 September 2010)

explod said:


> Well its stops the wondering, any real news removes the uncertainty so is positive if someone says so.   Sentiment does the rest, its time to party because its all over anyway.



I understand what you are saying, but it is a sad reflection on society's obsession with paper wealth that rising unemployment is often seen as "good" by many people these days.


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## explod (17 September 2010)

wayneL said:


> But that is nothing to do with Thatcher. The damage in anglo saxon economies was in subverting the business cycle starting in 2001, after Thatcher was finished.




She did I admit preside over some great things, least of which was the fall of the ion curtain.

But she did advocate too much faith in the good of human nature.

Thats almost as naive as you slot me.


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## wayneL (17 September 2010)

Smurf1976 said:


> How much of that was really due to Thatcher? And how much was due to having a fortune coming in from the North Sea oil and gas boom?
> 
> Time will tell how well the UK economy does as North Sea oil and gas production declines. I doubt they're going to do overly well however as a country almost totally dependent on imported energy, a situation which in itself is part of the Thatcher legacy (ie shut down the coal industry and halt the growth of nuclear).
> 
> I don't doubt that some good did occur in those years, but I do think the energy boom which coincided has lead to an overstating of the gains elsewhere in the economy.




Every little helps. But many economies have something to underpin their success; what matters is how it is capitalized on.

e.g. China has always had the resources it has, however it is only a change of policy by the central (no longer truly communist... or even socialist) government which has made the difference over recent years.


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## explod (17 September 2010)

Smurf1976 said:


> I understand what you are saying, but it is a sad reflection on society's obsession with paper wealth that rising unemployment is often seen as "good" by many people these days.




Could not agree more smurf, it is dog eat dog and every man for himself.

My obsession on the forums is to be a devils advocate so that we may all learn to think of others.  It goes with being a Grandfather, we may not be able to change the world at all but we must all keep trying


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## Peak Debt (17 September 2010)

Going broke, absolutely, the world runs on credit. Peak debt here we come.

Peak everything really............ oil, water, food, minerals, population

The world needs a major change of direction to get through this

I fear we'll wait until its too late and then learn the hard way.


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## Julia (17 September 2010)

explod said:


> My obsession on the forums is to be a devils advocate so that we may all learn to think of others.  It goes with being a Grandfather, we may not be able to change the world at all but we must all keep trying



I understand your idealistic approach, explod, but respectfully suggest at times it reduces your capacity to realistically appreciate what may and may not be achieved.

Just curious:  has this philosophy always been yours, even when you were a policeman, or has it evolved amongst the epiphany of having grandchildren?


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## trainspotter (17 September 2010)

Peak Debt said:


> Going broke, absolutely, the world runs on credit. Peak debt here we come.
> 
> Peak everything really............ oil, water, food, minerals, population
> 
> ...




Jump off the cliff now and avoid the rush before it is too late!


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## explod (17 September 2010)

Julia said:


> I understand your idealistic approach, explod, but respectfully suggest at times it reduces your capacity to realistically appreciate what may and may not be achieved.
> 
> Just curious:  has this philosophy always been yours, even when you were a policeman, or has it evolved amongst the epiphany of having grandchildren?




Since my own childhood.  In fact as a cop I was a round peg in a square hole and was pleased when I took early age retirment.  Having said that I was a good cop and part of hugely successful community policing progammes that did help people at the grass roots.  Pity they lost that on the arrival of Kennett.

Idealism be damned Julia, the world is much worse than you imagine and can assure you I have been there.  Not sure that you understand me at all.

Must get that gobbledygook thread going, never seems to be time for proper exaplanations.


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## Garpal Gumnut (20 September 2010)

I've got some very nice tulips for sale if anyone would like to buy some, before they go broke.

At least with a tulip, one can admire its beauty.

Money is just common coin, grubby notes or numbers on a screen.

$1000 for one. $3000 for two. Come one , come all.

gg


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## doogie_goes_off (21 September 2010)

Peak Oil - I disagree
Peak Agriculture - I disagree
Peak Minerals - I disagree
Peak Population - Nowhere near it yet

Peak pessimism - agreed
Peak Scepticism of Peaks - not a chance

There are positives:
Peak Recycling
Peak Standard of Living
Peak Employment
Peak Migrant Magnet

Don't peek into the future too early or we'll peak too early


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## Sdajii (21 September 2010)

doogie_goes_off said:


> Peak Oil - I disagree
> Peak Agriculture - I disagree
> Peak Minerals - I disagree
> Peak Population - Nowhere near it yet
> ...




I disagree with you about peak oil, agriculture and population - I think we're close to those three... not sure about minerals, but anyway, even if you're right, this makes no sense.

Assuming we're not at peak oil, peak soil, etc, how can we be at peak recycling and how could that be a good thing? How the heck can peak standard of living and employment be good things? Wouldn't they be incredibly bad things?


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## disarray (21 September 2010)

pics help .....


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## BrightGreenGlow (21 September 2010)

I Believe we are over populated all over the world and in Australia too. Give the Earth a chance to catch up! If you believe in the NWO and one world government then you could rise issues like Wars, Disease and Fluoridated water.

If we weren't at peak oil or close why did America go to Iraq?

The population is still increase exponentially. This is a big problem I believe.


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## doogie_goes_off (21 September 2010)

Sdaji - I think you misunderstood the intent of my post.

Humans will find a way to increase mineral extraction, agricultural production and find large sources of offshore oil. Consequently we continue to grow our population which has not peaked (unfortunately). The carrying capacity of the planet can not easily be measured so maybe we already have too many people, but I don't have time to argue this mother of all questions.

Popular science leads us to think we are in a downward spiral. Is the glass half full or half empty? - are we slowly recovering from years of bad decision making or are we making more bad decisions?

A high standard of living (including access to education and access to conserved areas etc) means we identify better with the environment as we have more spare time to think about it IMHO.

As Australians we are spoilt by employment levels and hence the migration magnetism. What we have on our side is a small population, hence the skills shortage and a demand for people like you and me.

Recycling - the reason I threw this in is that our wasteful habits as a race are problematic and this is one solution for keeeping the human race sustained. If we reuse and recycle the things we consume we lessen our impact.

So, I was just being the devils advocate and if you take it all too seriously then you may have peaked too early, there is plenty more that can be done in a practical sense.


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## Smurf1976 (21 September 2010)

doogie_goes_off said:


> Peak Oil - I disagree



Given that it has actually happened in around two thirds of all significant oil producing countries, you seem incredibly optimistic there to me.

Time will tell - if oil ever goes above $100 per barrel (2010 $) then we can pretty much say that it's no longer a plentiful, cheap resource. Whether we've peaked or not, oil is a problem if it gets expensive.


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