Of course the airlines will always be viable. Their main problem is too much competition. We will never go back to the horse and buggy or even the train.
Also I expect oil will drop far lower than $100. Few if any developing countries can afford $100 and demand will continue to drop.
Soph---Yes time scale makes a difference. However, the long term has no meaning. Everything we use has a limite but people (science) find something else (usually better). The cost of something in the future is not important (its always cheaper).
PJW---USO is oil and DUG is oil producers. Its like gold and gold mines. The mines usually go up first and down first. Same with oil. Oil producers will go down before oil. Producers look to the future (or they are soon out of business).
Ramrod --You are right but remember few people study how markets and capitalism works. Our colleges are a disgrace.
yes it is different this time. People never learn. Oil is evil. All Chinese make 50k a year and can afford oil at any price. During a bubble people will find a 1000 reasons why it will never go down.
Andy You cant extrapolate oil production or needs. These are both dependent on the price. As the price goes up, the demand goes down and production will go down. You need to study how the market works.
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You are right you are not a liberal but instead a socialist. The oil companies ARE doing their job. Back in the early 1970s the gov controled the oil price and there was no oil to be had. Keep the gov out.
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Also I expect oil will drop far lower than $100. Few if any developing countries can afford $100 and demand will continue to drop.
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There is only one source of energy which can replace oil and we already have it. Nuclear
Wind was great in the 1600s but can not produce enough energy for our needs. Sun is no better.
Is Oil a Bubble? Part One [View article]
PJW---USO is oil and DUG is oil producers. Its like gold and gold mines. The mines usually go up first and down first. Same with oil. Oil producers will go down before oil. Producers look to the future (or they are soon out of business).
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yes it is different this time. People never learn. Oil is evil. All Chinese make 50k a year and can afford oil at any price. During a bubble people will find a 1000 reasons why it will never go down.
Is Oil a Bubble? Part One [View article]
Is Oil a Bubble? Part One [View article]
Very good paper Kahn. No matter how many times bubbles happen. Pleople always say its "different this time".
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