http://money.cnn.com/2015/10/25/inv...diarabiacashopecmiddleeast512pStoryMoneyPhoto Looks like the Saudi Princes will have to downgrade to Honda's soon.
Yeah, the Arab ´princes´ always crack me up when they try to sound like businessmen. They really are no different than a lottery ticket winner, only they are multi-generational winners and each generation gets further removed from understanding real economics. Or a better analogy, they are like professional sports players who for a brief period of time make a lot of money, but most lose it as soon as the faucet gets turned off. They have had 50 years now of huge amounts of easy money coming their way, but they have not built any type of other industry or alternatives besides oil. A few of the countries have tried to make themselves tourist destinations, but that is largely by just wasting huge amounts of money. If you look at the USA, it is like the difference between Pittsburgh and Cleveland/Detroit. Pittsburgh got the memo pretty early that Steel and Automotive was fading quickly and built up alternative industries. Cleveland and Detroit never did anything outside their automotive roots and are now economic ghost towns. I spent a lot of time in Kuwait City and Riyadh, and those cities have nothing going on except luxury spending.
This will be used a political tool to bring about a regime change in Saudi Arabia. There have been rumors that a grandson of Saud wants King Salman to step down. He won't but when the country goes bankrupt maybe his failure would prompt the others to call for his resignation. Chaos would ensue. How would the economic meltdown in the gulf affect the world?
I am waiting for that. Since some 10 years ago when the alternative energy came to fore, I was always on the lookout for some successful venture. Unfortunately, the solar panels are not that good yet and even the wind power is not reliable. But when that happens that countries would shift their energy supplies from those nuclear power suppliers or other alternative sources, the oil-producing countries will go bankrupt. That will be a great jubilation for us who are always dependent on oil for their industries.
Oil will still be the dominant energy source for at least one century. All oil producing nations still have a little time to invest their oil money so they won't go bankrupt when they no longer make as much as they used to from oil. http://www.nysun.com/business/oil-will-dominate-for-next-100-years-predicts/47017/ At Shell, where he is a manager in the company's Fuel Technology Group, Mr. Macias is in charge of investigating which fuels will replace gasoline and developing ways to make them cheaper . . . Fossil fuels will dominate the transportation world for the next 100 years," Mr. Macias told the International Motor Press Association, "Shell's an open-minded company, but as long as the demand is there, we're going to refine oil and gas until anything else becomes more cost effective.
I don't want to see any viable industry or well-run company driven into bankruptcy or otherwise hurt unnecessarily - and in things like oil/gas, financials, and other things that our leftist big govt hates, that usually will only happen when govt themselves gets too involved and creates problems - then comes in again to "solve" those problems with even more govt the way they love to do in the financial sector. Or when industries like oil/gas/coal are demonized and attacked by govt regs and heavy fines so that a competing industry their buddies are in can try to take the space over.
I think it is necessary to have multiple sources of energy, otherwise it creates a monopoly like situation and cartels as you see with the OPEC. It is much like de-beers setting prices of diamonds. That has nothing to do with the cost of extraction plus reasonable profits, but squeezing as much as one can.
