Sunday, December 21, 2014

There Are More Idols Than Ever

Today, the idea of idol worship feels ancient and remote to many people. Thus, the Second Commandment, "You shall have no other gods," doesn't seem applicable in modern society. But the opposite is true. We have more false gods than ever -- art, education, fame, money, to name just a few. Over the past century the worship of false gods has led to massive evil; Communism and Nazism are just two examples. On a personal level, the worship of false gods leads to unhappiness.



By Dennis Prager and originally published at prageruniversity.com
Let's discuss the Second Commandment according to the oldest, that is the Jewish, enumeration of the Ten Commandments. In Christian tradition it is the First Commandment. The most common translation begins: "You shall have no other gods before me." The commandment then goes on to prohibit both making idols and worshiping idols.

Most people, when they think of this commandment understandably think that it only prohibits the worship of idols and the worship of gods such as the ancient pagan gods of rain, of fertility, all the other nature gods and chief gods such as the Roman Jupiter, and the Greek Zeus. However, there is a major problem with this understanding of the commandment. Since no one today worships these gods, let alone worships idols made of stone, most people think that this commandment is irrelevant to modern life. The irony, however, is that this commandment is not only relevant to modern life, it is in many ways the mother of all the other commandments.

Why is it so relevant today? Because today we have as many false gods as the ancients did. And why it is the mother of all the other commandments? Because if we identify false gods and avoid worshipping them, we will eliminate one of the greatest barriers to a good world -- false gods. So, let's begin by defining a false god. The point of biblical monotheism is that there is only one God and that only this God, the Creator of the universe who demands that we keep these Ten Commandments, is to be worshipped. Why? First, because one God means one human race. Only if we all have the same Creator, or Father, as it were, are we are all brothers and sisters. Second, having the same parent also means that no person or group is intrinsically more valuable than any other. And third, one God means one moral standard for all people. If God declares murder wrong, it is wrong for everyone, and you can't go to another god for another moral standard.

When anything else is worshipped, bad things result. Not only things that can obviously lead to evil such as the worship of power, or race, or money, or flag. But also things that are almost always seen as quite beautiful -- such as art, or education or even love. Yes, any of these often wonderful things, when worshipped, can lead to terrible results.

Take art. Many of the cruelest humans in history loved beautiful music and art. But, as a music lover, I learned early in life the sad fact that great music can be used to inspire people to follow evil just as much as it can be used to inspire people to do good. The great Hollywood director Stanley Kubrick vividly made this point in his classic 1971 film, A Clockwork Orange. In it, men rape and murder while classical music plays in the background.

Take education. We all recognize how important education can be -- from preparing people to be able to find work to understanding the world. But education in and of itself, divorced from the higher ends of God and goodness, can lead, and often has, led to great evil. Many of the best-educated people in Germany supported Hitler and the Nazis. And almost all of the Western world's supporters of the genocidal regimes of Stalin in the Soviet Union and Mao in China were highly educated. There is nothing about a Ph.D. that guarantees a person will be wiser, kinder, or more ethical than someone with only a high school education.

The same holds true even of love. Love, of course, is so often beautiful. But it, too, can lead to evil. In the twentieth century people who put love of country above love of God and goodness often committed terrible evil. 

And here's a test for you: Imagine that the pet you love and a stranger -- a person you don't know and therefore could not possibly love -- are drowning. Do you first try to save your pet or the stranger? Well, if love is an end in itself, you save your pet. But if you hold human life as a higher value than love, you won't follow love.

This Commandment made the ethical revolution of the Bible and of the Ten Commandments -- what is known as ethical monotheism -- possible. Worship the God of the Ten Commandments and you will make a good world. Worship a false god -- no matter how noble sounding -- and you will end up with a world of cruelty.

I'm Dennis Prager.

Saturday, December 20, 2014

Fed and Congress Signal Trouble, Putin Defends Russia, ISIS War


Cuba-Proped-600-LI (2)By Greg Hunter’s USAWatchdog.com 
My top story is the economy, and I think the Fed and Congress just signaled that something is seriously wrong, and it’s going to get worse.  First off, the Federal Reserve just came out and said that it was going to be “patient” when normalizing the monetary policy.  I know Wall Street is jubilant and the stock market spiked on the news, but I think this is really ominous, and it is nothing to be celebrated.  To me, that means don’t expect the Fed to raise interest rates anytime soon because the economy is much worse than what they are telling you.  Why else would Fed Head Janet Yellen come out and say the Fed was going to keep the easy money policies for a“considerable time.”  If we did have a so called “recovery,” wouldn’t you be raising rates and pulling back on the juice?  I think the Fed knows the economy will continue to sink, and if it lets off the money printing gasoline, the whole thing tanks.  Economist John Williams says, “The great dollar calamity nears.”  We are constantly told that the economy is in a so-called “recovery,” and yet, a large percentage of young people in their 20’s and 30’s are forced to live at home.  Also, you don’t have a strong economy with nearly 93 million no longer counted in the work force.  I think the Fed is scared and also knows the Christmas spending numbers are going to be the first big sign that the U.S. economy has a big problem.
The second big warning sign came from Congress, last week, in the form of gutting the Dodd-Frank law that restricted derivative trading and the use of depositor money for Wall Street gamblers.  Now, bankers can use depositor money and if or when it blows up, depositors and taxpayers will be on the hook for billions or even trillions of bad bets by the big banks.  Former Assistant Treasury Secretary Paul Craig Roberts was on this week, and he thinks the trouble may come from the oil derivatives. You know you got a problem when the main stream media highlights bonds taking a hit because of a plunge in oil prices.  You know there is massive leverage in the oil shale sector, and bonds backing that industry are tanking.  They are not coming back until the price of oil comes back up.  Why else would big banks like JP Morgan and Citigroup be pushing this bailout to Congress?  The big banks likely have some very bad bets and are going to need another massive bailout.  I think Congress gave a big tipoff by packing this depositor and taxpayer rip-off in the spending bill that President Obama just signed into law.  You know it was a bad deal for Main Street when Democratic Senator Elizabeth Warren votes against it with the likes of Republican Senator Ted Cruz.  They are polar opposites, but not on this issue.  About 40 Senators voted against it from both parties, but it was not enough.
Falling oil prices may be a joy at the pump here, but for Russia it is a nightmare.  There is talk of China bailing out Russia.  There are rumors of bank runs in Russia despite a new 17% interest rate.  Russia’s currency, the ruble, has had its buying power cut in half in a matter of months.  It is crystal clear the U.S. and Russia are at economic war, and Vladimir Putin gave a speech this week to essentially say the Russian Bear is not going to roll over.  There is talk of increased sanctions on Russia by the United States, but an unintended consequence is the sanctions that are hurting Russia are also hurting Europe.  This adds to the economic volatility and probability of a black swan that could come out of Europe in the form of an economic calamity.  It they go down, we will too.  The U.S. Congress has also just voted to send weapons to Ukraine.  They are calling it “lethal aid,” and it may be lethal to Ukrainians as this is going to further ratchet up the conflict in that part of the world.  It looks like the next move will be Russia’s, and who knows what a not-so-wounded bear will do.  The U.S. should expect some payback and it might wreck an already teetering economy here in the U.S.
I don’t have much on the internet hack of Sony.  I think it is a side story, and it may be a test of how weak the internet security really is here in America.  I also think reopening relations with Cuba was a very bad deal because the U.S. did not get much in return.  Democrats like Senator Robert Menendez say it “vindicates the brutal behavior” of the Cuban government.  Republican Senator Marco Rubio says President Obama “betrayed” Cubans fighting for freedom.  Maybe President Obama did this to break up the relationship Cuba has with Russia.  Who knows, but the two Cuban Americans in the Senate from both sides of the aisle think it was a bad deal for a variety of reasons.
Join Greg Hunter as he analyzes these stories and more in the Weekly News Wrap-Up.

Friday, December 19, 2014

The Implosion Of American Culture

By JC Collins and originally published at philosophyofmetrics.com
It was widely expressed by the mainstream media of the time that the collapse of the Soviet Union and the fall of the Berlin Wall could not have been predicted. In hindsight, the stagnation and drop in oil prices should have been the obvious signs that a dramatic change was coming. And when the USSR began to borrow from western banks, the fix was in.
Western banks is something of a misnomer, as no bank, or conglomerate of banking interests, can exist separate and independent of the larger international banking structure which has been built throughout the the 20th Century. Stagnate growth and the deflationary oil prices which began in 1986 acted as fine toothed methods of transferring wealth from the social trust within the Soviet Union, forcing banks within the USSR to borrow from western banks, which was in fact an exchange of assets amongst financial institutions.
The inevitable policy shifts towards “perestroika” were obvious and planned well in advance.  The agricultural crisis within the country was designed to parallel the mass movement towards “glasnost”, or openness.
When we consider the larger mandates of the CSI, Cultural and Socioeconomic Interception, the same machinations as “perestroika” and ‘glasnost” can be observed in the social fragmentation and devolution of the American middle class. Where the Soviet Union enacted policies which instigated the CSI changes within the country, it will be Americas lack of enacting policy change which will precipitate the implosion of its culture.
See post The First False Flags for a further understanding of what is meant by the term CSI, or Cultural and Socioeconomic Interception.
To understand what this means we must consider the expansion of American culture around the globe since 1944, which was the year the USD became the primary reserve currency used in global trade. As use of the dollar increased, so did the acceptance of western culture.  Everything from McDonald’s burgers to Hollywood creations were exported around the world.
Like the second crucifixion of the etheric double, America has followed the Soviet Union down the path of re-engineering its ideological culture. Russia has no more moved towards democracy than America has moved towards Communism.  Both have shifted towards a new socialist middle ground where centralization has woven the macro economic system tighter around a supra-sovereign statehood.
The Cold War was the dialectic conditioning of the whole world.
Over the last few years we have begun to see once stable American institutions and companies begin to struggle.  McDonalds growth has begun to slow and Sears, along with other big box stores, have been closing.  Even legendary director Steven Spielberg has suggested that Hollywood will “implode” soon.
As use of the dollar levels off and begins to recede into the blend of multilateral currencies, the culture that grew up around it will also recede and implode back into the place from where it originated.
This implosion of culture can be seen in the recent racial and political divide which has been given focus in the riots and protests across the country.  The media is doing its part to push the CSI engineering into the homes and minds of the disorganized masses.  Many speculate that the riots have failed to spread as desired, but I reckon that they were extremely successful in that they leveled up the tension and pre-prejudice for a continuation of the slow motion implosion and transition to the international mindset collective.
The Black Friday madness is blown larger for maximum effect and the greed of America is the subconscious message which is being implanted in minds around the world.  This message is trended throughout mainstream media, alternative media, and social media.
The other side of this CSI engineering is instability. Both greed and instability have now begun to feed from the tail of the other as American culture descends into the unknown bounds of ignorance. Political leaders and the political process has become so degraded that even Americans themselves are now looking towards figures like Russia’s Putin for inspiration. This is no doubt by design as it slowly dawns on the American people that they have become the “isolated” contagion from which the rest of the world is attempting to vaccinate itself against.
Yet, nowhere are the masses being informed and educated about the reality of economics and politics, let alone about the decay of culture and self.  The media is proactively avoiding any meaningful truth and facts about the state of existence for the majority of the population. What is obvious subconsciously is ignored consciously in everyday thoughts and actions.
From this engineered ignorance the surprise of a “fall of the Berlin Wall moment” will emerge and crawl across the face of the western man.
The spread of greed is apparent and now the deeper injection of instability will continue to build on the economic CSI which began in 2008.  Central banks around the world and the Bank for International Settlements have already begun to implant the meme that they can no longer provide liquidity in the next crisis.  See the post The Enlargement of the Dialectic Collapse.
Across the globe the message is being promoted that America is holding up the much needed reform of the international monetary system, reforms which will “prevent and strengthen the global economy against future liquidity and credit shocks as well as exchange rate instability”.
In November of 2010 the G20 countries along with the International Monetary Fund agreed to reforming the international system.  These reforms have been held up in the US Congress since and the message is being sent that the rest of the world is becoming impatient and tired of the American games.
It is beginning to look likely that the the IMF Reforms were never meant to be passed and enacted as written back in 2010. As such, the IMF along with the BRICS countries and other G20 members, have devised methods of bypassing America and implementing and even broader reform of the institution.  This Plan B implementation will build on the meme of “American greed and instability” in order to create acceptance of a reformed system which has stripped the US of its veto power on the IMF Executive Board, as well double the actual quota commitment from member countries.
Reader Matt McBride has provided a link which explains in great detail the Plan B components and how they will likely be implemented in the coming months.  I would strongly encourage all readers to study the material and fully understand it as the world stands on the threshold of change.
We are also likely to see some drama in Congress as both political parties attempt to agree on a fiscal budget for 2015. The government shutdown which happened last year has planted the CSI seed for what comes next.  It is being proposed that the Democrats will include the 2010 IMF Reforms in the 2015 Fiscal Bill.  But will the Republicans approve or continue to delay and push the world into the throes of financial collapse?
With the recent drop in oil prices and the inevitable fragmentation of OPEC, the instability theme is being built on so when the time comes the acceptance of oil and other commodities being denominated in SDR’s will not be challenged.  See post The End of OPEC for further reading on the transition of energy markets and the trend of banks exiting the commodities markets.
Now that Saudi Arabian interests have been secured through Chinese bonds, the fragmentation of old “dollar based” structures such as OPEC can begin. Everywhere a dollar based institution has been established will see change as the system transitions and the multilateral emerges.
By July, 2015, the renminbi will be added to the SDR basket composition and from that moment SDR bonds will begin to re-liquify the international financial system. See post Renminbi 人民币 and the Alternative IMF Reforms.
The current deflation of commodities will be temporary and the new SDR commodities exchange will “correct” the imbalances in the system caused by American greed and the USD instability.
As the QE policies of central banks handled the exchange of low liquidity bonds from charter banks back to the balance sheets of the central banks themselves, the SDR bond system will orchestrate a sort of QE in reverse as the central banks exchange the low liquidity assets on their balance sheets for SDR assets, which will be considered high liquidity assets.
The complete machinations of this multilateral transition is obscured to the disorganized masses through complete misdirection and propaganda of American privilege and greatness.  Such will be the surprise when the implosion of American culture reaches a tipping point where the multilateral financial system is fully enacted on the ruins of western CSI engineered ignorance.
They will say no one saw it coming.  But there are those of us across the internet, on blogs just like this one, who have seen it coming and have been talking about it for a long time.  The exact details of every point of transition and interception is not easily discerned, but the overall macro trend is clear and there are a few moments of sudden adjustments coming.  The sad reality is that the disorganized masses will remain ignorant to the whole process as they become consumed with television news drama that hides the structural truth behind the engineered cultural implosion of the American identity. – JC

Thursday, December 18, 2014

Cronyism And Ensuring American Taxpayers Bailout The Finance Industry During The Next Crash


Nostradamus-like spending bill will ensure big banks never fail with your money



Originally published at mybudget360.com
Do you smell what is in the air?  Pine trees?  No.  Something with a more pungent smell.  There is a wonderful whiff of cronyism floating around Washington D.C.  In the latest government kabuki theater there was some interesting items being passed.  There were major protections given to banks should trillions of dollars in derivatives blow up during the next market correction.  While the public is enjoying a few dollars off in gasoline prices so they can spend more money they don’t have during this holiday season, the latest government/banking spending bill was passed by slim margins but puts the taxpayer on the hook for trillions of dollars of risky derivative bets.  Great timing given the energy markets are imploding so we know some hedge funds are taking it in the shorts and will likely come to D.C. hat in hand to cash in on those generous campaign donations.  Central banks have done very little to help US households because incomes simply are not keeping up in the face of inflation.  The latest bill is something to behold.
Minority Report of finance bills
What is so blatant about the latest bill is that it practically says that next time banks implode via derivative bets that taxpayers will be on the hook.  The last time we were told that too big to fail banks needed all the help in the world because they would take the economy down with it.  Of course the public did not want this but the spin media made it seem like the public was on board.  They never were.  Yet this was done during the actual correction.  This time, acting like Nostradamus the financial industry is basically writing in provisions to protect itself for future transgressions.  Like writing a note to your spouse that you apologize for all future mistakes and this piece of paper absolves you from all acts.
This should be no surprise given that the FIRE industry is backing both Republicans and Democrats equally:
funding
“(WaPo ) on average, members of Congress who voted yes received $322,000 from those industries. Those who voted no? $162,000.”
Those that think money in politics buys little influence are either naïve or simply are ignoring the facts.  It is clear that money is controlling our government to the point of cronyism.  And of all those previous bailouts?  How have they helped American families?
spending-middle-class
The cost of housing, healthcare, and college tuition are soaring yet incomes are stagnant.  Of course inflation occurs because too much money (debt) is flowing into the system.  Big banks and investors ended up buying many single family homes and converting them into rentals and pushing rents up.  Prices are also up but many families never recovered after the Great Recession hit.  The stock market went up but thanks to hot money.  Spending and income are not looking so hot:
wages-health-debt2-14
If you look at wages/earnings minus healthcare costs we are actually in recession territory.  And since very few Americans actually own stocks, the recent mega run in the stock market has done little for regular families.
But what is certain is that the recent spending bill that was passed is laden with future gifts to Wall Street banks when the inevitable correction hits.  Influence peddling in Washington isn’t anything new but the blatant nature of this bill is.  These are trillion dollar bets that will likely go bad and a bill was now passed to make it easier for taxpayer bailouts when things inevitably correct.  This will come from Americans that are struggling planning for their retirement and have very little in savings.  If you need any more proof that the 2014 election was a joke, look no further.  We are basically swapping jerseys on the same players here.  Get your wallets ready for the inevitable future bailouts that you will not vote on once again.  Our government should represent the voters but in this case, they represent their biggest donors.  And what the donors want isn’t necessarily what is best for American families.  In fact, it is the direct opposite in many cases.

Wednesday, December 17, 2014

14 Facts That Prove That The Number Of Children Living In Poverty This Christmas Is At A Record High


Children - Public DomainBy By Michael Snyder and originally published at theeconomiccollapseblog.com
Did you know that 65 percent of all children in the United States live in a home that receives aid from the federal government?  We live at a time when child poverty in America is exploding.  Yes, the U.S. economy is experiencing a temporary bubble of false stability for the moment, but even during this period of false stability the gap between the wealthy and the poor continues to rapidly expand and the middle class is being systematically destroyed.  And sadly, this is having a disproportionate impact on children.  This is happening for a couple of reasons.  First of all, poorer households tend to have more children than wealthier households.  Secondly, most people tend to have children when they are in their young adult years, and right now young adults are being absolutely hammered by this economy.  As a result, things just continue to get even worse for children living in this country.  Here are 14 facts that show that the number of children in America living in poverty this Christmas is at an all-time record high…
#1 The National Center for Children in Poverty says that 45 percent of all U.S. children belong to low income families.
#2 According to a Census Bureau report that was released just this week, 65 percent of all children in America are living in a home that receives some form of aid from the federal government…
“Almost two-thirds (65 percent) of children,” said the Census Bureau, “lived in households that participated in at least one or more of the following government aid programs: Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Medicaid, and the National School Lunch Program.”
#3 According to a report recently released by UNICEF, almost one-third of all children in this country “live in households with an income below 60 percent of the national median income”.
#4 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.
#5 An astounding 45 percent of all African-American children in America live in areas of “concentrated poverty”.
#6 40.9 percent of all children in the United States that are living with only one parent are living in poverty.
#7 These days, a lot of single mothers are really, really struggling to survive.  A decade ago, the number of women in America that had jobs outnumbered the number of women in America on food stamps by more than a 2 to 1 margin.  But now the number of women in America on food stamps actually exceeds the total number of women that have jobs.
#8 It is hard to believe, but right now 49 million Americans are dealing with food insecurity.
#9 According to a report that was released last month by the National Center on Family Homelessness, the number of homeless children in the United States has reached a new all-time high of 2.5 million.
#10 There are more than half a million homeless children in the state of California alone.
#11 One recent survey found that about 22 percent of all Americans have had to turn to a church food panty for assistance.
#12 This year, almost one out of every five households in the United States will go through the holiday season on food stamps.
#13 One of the primary reasons why kids are suffering so much is because their parents are simply not making enough money.  This is especially true for parents of young children.  For example, check out the following numbers from the Atlantic
Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care.
These numbers come from an analysis of the Census Current Population Survey by Konrad Mugglestone, an economist with Young Invincibles.
In retail, wholesale, leisure, and hospitality—which together employ more than one quarter of this age group—real wages have fallen more than 10 percent since 2007. To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twentysomethings pass into their thirties, they are earning less than their older peers did before the recession.
#14 Overall, the quality of the jobs in America continues to decline.  At this point, most Americans do not bring home enough income to support a middle class lifestyle for their families.  Below I have shared an excerpt from an article that I published a while back
The following are some statistics about wages in the U.S. from a Social Security Administration report that was recently released
-39 percent of American workers made less than $20,000 last year.
-52 percent of American workers made less than $30,000 last year.
-63 percent of American workers made less than $40,000 last year.
-72 percent of American workers made less than $50,000 last year.
In addition to all of these numbers, there is also a lot of anecdotal evidence that families with children are really struggling right now.
For example, McDonald’s has traditionally been a place where poor and middle class families have taken their children for a cheap meal.  But the restaurant chain just released the worst sales numbers that we have seen in more than a decade.
And the really bad news is that this is just the beginning of the economic pain for families with children.  The U.S. economy is in a bubble period right now, and the authorities have been trying with all of their might to keep the bubble inflated.
Just imagine a bodybuilder that is pressing with all of his might to do one more rep on the bench press.  That is essentially where we are at.  In a recent piece, Brian Pretti summarized some of the extraordinary measures that global central banks have taken to keep the economic bubble inflated…
Since early 2009, central banks globally have printedmore than $13 trillion. In addition, governments across the planet have increased their borrowings at historic proportions (the US just crossed $18T – another new high!), all in an effort to stimulate economies and avoid deflationary pressures. Total US Federal debt has more than doubled in five years, an increase of $9.5 trillion and counting.
Despite all of these efforts, the best that we have achieved is economic stagnation.
And now it is becoming clear that the overwhelming deflationary forces around the globe are starting to win the battle.  The central banks have used up their ammunition and they still have not turned things around.  In fact, as Ambrose Evans-Pritchard so eloquently put it recently, what we see all around us is “evidence of a 1930s-style depression, albeit one that is still contained”…
What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56pc of global GDP is currently supported by zero interest rates, and so are 83pc of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another.
These are astonishing figures, evidence of a 1930s-style depression, albeit one that is still contained. Nobody knows what will happen as the Fed tries to break out of the stimulus trap, including Fed officials themselves.
But will it still be contained once the next major financial crash strikes?
As I discussed yesterday, there has never been a time when conditions have been more ideal for a financial crisis since the last one happened in 2008.
So as bad as things are for the children of America right now, they are only going to get worse.
In the years ahead may we all have great compassion for these victims of our incredibly foolish economic mistakes.

Tuesday, December 16, 2014

The Oil-Drenched Black Swan, Part 4: The Head-Fake Disruption Ahead

By Charles Hugh Smith and originally published at oftwominds.com  
Add these factors up and we conclude there is no visible price limit on oil after supply falters.

I've been discussing the concept of an Oil Head-Fake since 2008, most recently inThe Oil Head-Fake: The Illusion that Lower Oil Prices Are Positive (September 29, 2014)
Oil: One Last Head-Fake? (May 9, 2008)

This process is far from orderly, as the low prices destabilize oil-dependent governments and regions. Geopolitical turmoil is only half the story; the immense mountain of debt that's been built on the collateral of oil collapses as cash-starved borrowers default on bonds and loans. This meltdown of oil-based debt then destabilizes an increasingly fragile global financial system.
The basic idea is straightforward: as global demand slackens, oil producers are incapable of reducing supply due to their dependence on oil revenues. This leads to oversupply which further depresses prices, to the point that marginal wells are shut off and costly exploration-development projects are shelved.

Supply can be turned off easily enough, but it can't be expanded as easily. Costly deepwater wells that were shelved in the price bust can be restarted, but it takes many years to bring these hyper-expensive projects online.

Meanwhile, existing production declines without constant injections of capital and expertise. Contrary to popular conception that oil flows for decades without having to do anything other than poke a hole in the ground, oil fields need huge investments of capital to maintain high production: carbon dioxide or water must be injected into the wells, and so on.
So even if fields are kept online through the price bust, their production will decline as capital spending dries up.
The end result of the price bust is impaired supply: impaired by depletion, impaired by reduced investment, impaired by the collapse of oil-based debt.

Even if demand only remains constant, the price of oil will rise as supply falls. And with several billion people aspiring to the energy-intensive middle-class lifestyle of the developed world, we can anticipate global demand rising even if it stagnates in the developed world.

The price drop is a head-fake: it doesn't usher in a new era of permanently cheap oil. Rather, it unleashes dynamics that impair supply on multiple levels: geophysical, geopolitical, demographic and financial.

When supply cannot be jacked up to meet demand, prices will rise. As I have noted before, demand is somewhat elastic in the developed world--business meetings can be done online, vacations can be postponed, car pools can reduce single-driver trips, and so on.

In the developing world, the entrepreneur who uses his motorcycle to earn his livelihood doesn't have an alternative; if the price of a liter of fuel doubles, he has no choice but to pay it.
In other words, as the number of people who depend on oil rises, the elasticity of demand declines accordingly. Higher prices may not reduce demand in the way conventional economic models expect.

The oil-exporting nations have introduced another disruptive dynamic: fuel subsidies for their domestic markets. These fuel subsidies are political bribes to the citizenry chafing under the poverty and powerlessness of life in oil-financed kleptocracies.

Simple supply and demand dictates the destabilizing result of these generous subsidies: the cheap fuel is squandered and demand soars. Many of the nations that heavily subsidize fuel are facing the evaporation of their oil exports as domestic demand absorbs more of their total production.

This dynamic will force kleptocracies into a double-bind: if they end the subsidies, they face destabilizing domestic unrest. If they continue the subsidies, they lose their oil exports and income needed to service their debt, fund their welfare states and armed forces.
Either way, the kleptocracies implode, and in the resulting turmoil capital investment in their oil production will plummet, further reducing supply.

Add these factors up and we conclude there is no visible price limit on oil after supply falters. If I need two liters of petrol to make money for food today, I will pay whatever it takes. $200/barrel oil is no impediment because I need those few liters to earn my livelihood.

When oil prices move high enough that alternatives are clearly bargains, then demand will face headwinds. But all the alternatives require capital, and if not capital, then credit, and that is precisely what will be impaired by the collapse of the global credit engine as the oil head-fake and various asset bubbles implode.