No Slack in the System

The sudden, but temporary loss of the Prudhoe Bay oil transit lines reveal just how tight the just-in-time delivery chain really is. What won’t be temporary (count on it) is the corresponding price hike we are already seeing (in less then 24 hours).

We all know high prices are here to stay, what we don’t know is how high will it go? Far, far higher according to some analyst. $78 for a barrel of oil will seem cheap when it’s $200 a barrel.

The world’s infrastructure is already creaking towards a dangerous collapse as increased demands are maxing out capacity. The electrical grid shutdowns collapsed just when the summer heat hit its peaks. Now oil, already in extreme demand shuts down the largest US oil field.

Worse, the reports are that Saudia Arabia has overproduced it’s largest fields with water-injection and are now in steep decline, overreporting a million barrels a day. This black vapor isn’t making it to market and investors are not fooled for long.

These are dangerous trends that herald the coming of the antichrist – oh, wait… wrong channel. These are dangerous trends that herald the future that awaits us. Our supply lines are stretched to the breaking point – and ARE breaking down. The ability to continue to overproduce from a scorched earth is becoming extremely untenable.

The fact is – the senselessness of our situation should have everyone extremely alarmed. But the message is still not getting through. Overproduction of renewable and non-renewable resources can only result in total collapse. The diminishing returns already being experienced worldwide should be all the evidence anyone would need, but apparently, even this is still not enough.

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