oilprice | The characteristic
feeling of the post-2008 world has been one of anxiety. Occasionally,
that anxiety breaks out into fear as it did in the last two weeks when
stock markets around the world swooned and middle class and wealthy
investors had a sudden visitation from Pan, the god from whose name we
get the word "panic." Pan's appearance is yet another reminder that the
relative stability of the globe from the end of World War II right up
until 2008 is over. We are in uncharted waters.
Here is the crux of the matter as expressed in a piece which I wrote last year:
The relentless, if zigzag, rise in financial markets for the past 150
years has been sustained by cheap fossil fuels and a benign climate. We
cannot count on either from here on out....
Another thing we cannot necessarily count on is the remarkable
geopolitical stability that the world experienced for two long stretches
during the fossil fuel age. The first one lasted from the end of the
Napoleonic Wars in 1815 to the beginning of World War I in 1914
(interrupted only by the brief Franco-Prussian War). The second lasted
from the end of World War II in 1945 until now.
Following the withdrawal of U.S. military forces from Iraq, the
Middle East has experienced increasing chaos devolving into a civil war
in Syria; the rapid success of forces calling themselves the Islamic
State of Iraq and Syria which are busily reshaping the borders of those
two countries; and now the renewed chaos in Libya. We must add to this
the Russian-Ukranian conflict. It is no accident that all of these
conflicts are related to oil and natural gas.
