Thursday, November 10, 2011

More evidence for a major recession in 2012

During November 2009 I wrote a blog posting offering my opinion -based on oil supply limitations and economic growth projections- that we would be facing another major economic downturn in 2010 or 2011. Over the past 2 years, we have not seen the hoped-for economic recovery, but we haven't exactly seen another major downturn either.

About a month ago, I reviewed the latest IEA data and made a guess that the next major recession would occur in 2012 - once again based on projected oil supply and demand predictions. Here is one more article that supports this possibility.

Unfortunately, I can't see any way to avoid the current climate of economic uncertainty as long as Canada and the US remain completely dependent on easy access to low priced supplies of oil and gas to fuel economic growth. As soon as the economies begin to grow, the growth is stifled by an immediate rise in oil prices - which in turn causes price increases for everything from agriculture to transportation.

There is no way to escape this trap until the US and Canadian governments are willing to make major investments to improve the energy efficiency of buildings and transportation systems and in the expansion of alternative energy generation and the corresponding infrastructure. And as long as our elected officials insist on serving and promoting the demands of the oil companies - I don't see any hope.

BBC News - Oil prices are in 'danger zone', warns the IEA

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