In his column yesterday, Paul Krugman - whose column Spot really likes, by the way, at least most of the time - said there were three competing views of the current economic situation:
- The current run up in oil prices, and hence everything else, is just fueled by speculation. The bubble will burst and things will settle down.
- Fundamentals are at play here: increased demand from China and India, etc., but we'll drill more and plant more and everything will be fine.
- Jeebus Christmas! We're running out of stuff!
Krugman says that his view is somewhere between 2 and 3 above. Spot thinks this is the most alarmist that Krugman has ever been. People like James Kunstler, writing about the Peak Oil phenomenon in The Long Emergency, have been saying for some time that we're in the number 3 scenario.
Remember not so many months ago when it was the consensus opinion of "leading" economists that it was unlikely that the US would even go into recession in 2008? The paradigm seems to be shifting, and fairly quickly.
Oh Spot, that's such a dated thing to say!