drposhmoney

Will the World's Central Banks Successfully Fight Inflation?

The figure quoted for US oil consumption is for 2005 (20 mbpd), while the figure for China is for 2007 (7 mbpd) [factbook.com]. We know that China grew approx. 14% last year, and is currently assumed to grow at 10% for the next few years. Now, even if Chinese oil consumption rises equal to growth (it's usually higher), China's oil consumption will double within 6 years to 14 mbpd (1.1 ^ (6+1) * 7). There is not enough 'cheap' oil (light sweet crude) left in the world to supply this demand! Consequently, there is going to be an inflationary catastrophe in the manufacturing capitol of the world (China), which will induce an inflationary catastrophe in the developed world, and cause starvation in the 3rd world. The G7 central banks are simply going to lose control, and there will be a new world order, because nobody is going to be able to stop China growing at 10%, running inflation at 10-15% and buying as much oil as it wants. God knows how high the oil price is going to go!