Everybody is talking about oil, the economy, all that, but the biggest problem is going to be water:

I’ve been around the world twice. I’ve seen many cities, societies, [and] nations that disappeared because the water disappeared. China has a huge water problem. In Northern China, they’re running out of water. They know this and they’re working on it, big time. But if they don’t solve it, or if they don’t solve it in time, then China – as you put it – has failed.

By the way, Northern India has the same problem, only worse. Many places have it now. Water is becoming a huge problem worldwide. The same is true in the Southwestern United States. You know, you may have Arizona going to war with California. Some sections of Nevada, Colorado …they’re desperate there.

So it’s not just China – but water’s the main thing that worries me about China.
Jim Rogers, MoneyMorning.com

And that’s all over, this problem is the least talked about issue of all the big problems facing us. The longer we try to avoid the inevitable readjustments we will need to make as a global civilization, the worse the outcome is going to be.

(more…)

Interesting article, Deflation In A Fiat Regime?, brought up some recent articles by Doug Noland of PrudentBear.com

• Setting the Backdrop for Stage Two
• The Meaning of Stage II

Update: Noland’s April 25, 2008 column:

I am at this point more convinced than ever that only a severe crisis will instigate the necessary adjustment to the distorted and imbalanced U.S. and global economies. One is then left with the disconcerting view that Stage II will lead our authorities to exhaust all policy measures in a futile attempt to sustain the unsustainable. The obvious question: how long does the lead up Crisis Stage II last? I would today guess a number of months, although I wouldn’t at all be surprised if it was rather short. What will be the impetus for Crisis Stage II? A spike in interest rates, a run from U.S. Treasury and agency debt, a disorderly drop in the dollar, another bout of derivative and Credit market implosion, or acute global financial tumult should be considered leading candidates based on Stage II ramifications. Or it could easily be something completely unexpected, perhaps even war.

From Noland’s April 18, 2008 column:

With crude hitting a record $117 today, there is every reason to expect that newly created global liquidity will further inflate energy, food, and commodity prices generally. The Goldman Sachs Commodities index has gained 21% already this year. But when it comes to Monetary Instability, our financial markets might just prove the unappreciated wildcard. When the Fed and Washington radically altered the rules of U.S. finance last month, they placed in jeopardy huge positions that had been put in place to hedge against and profit from systemic crisis. With the end of “Stage one” arises a major short squeeze in the Credit, equities, and derivatives markets. And when it comes to contemplating the scope and ramifications of today’s “hedging” activities, we’re clearly in Uncharted Waters. It is not beyond reason that a disorderly unwind of “bearish” Credit market positions could incite a mini bout of liquidity, speculation, and Credit excess that exacerbates Global Monetary Instability – while Setting the Backdrop for Stage Two of the Crisis.

Check out the latest Al Gore talk on the climate crisis, taking into account the latest Ice cap melts and the Climate Code Red warnings:

Well, the news keeps pouring on. Yesterday’s reports of the Saudi King wanting to keep future finds for posterity got a rise out of the market.

And it’s not hard to see why:

Mexico’s state-run oil company said Monday that oil production fell 7.8 percent to 2.91 million barrels a day in the first quarter as current reserves dwindle.
[…]
Pemex also said Monday that oil exports had dropped 12.5 percent in the first quarter, mostly due to falling production and port closures caused by bad weather in February.
BusinessWeek.com

Mexico is one of the top 3 suppliers to the USA, if you’re not keeping track. I’m assuming this is a yearly averaged drop, not an actual 12.5% drop.

Meanwhile, crude futures today rose to $119.90

US crude oil hit an all-time peak of $119.90, boosted by supply worries from key producers Russia and Nigeria and a jump in demand last month from China, the second-largest energy consumer after the US.
Gulf Daily News

Are you getting worried yet? You should be. Take a look at what the Wall Street Journal put on their front page today:

But the [massive new oil Khurais field revitalization] project also illustrates a darker point: Even in Saudi Arabia, home to more than a quarter of the world’s known recoverable reserves, the age of cheap and easily pumped oil is over.

Got it? Is that clear enough? This is the core premise of all peak oil discussions: the age of cheap and easily pumped oil is OVER.

(more…)

Not satisfied with the peak oil sources? Then how about the current king of Saudi Arabia?

From the April 21 (pdf) ASPO newletter (Newsletter Archives).

Well worth a read, see an HTML version on evworld.com if you prefer that format.

Saudi King Abdullah drops quiet bombshell; U.S. media sleep through it

Saudi Arabia’s King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world’s top exporter for future generations…

Saudi Arabia’s King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world’s top exporter for future generations…

The King’s remarks seem to confirm a statement made last year by Saudi oil minister Ali al-Naimi who, when asked “How high can your production go?” replied, “We’ll get to 12.5 million barrels a day and then we’ll see.”

If the Saudi announcement was a bombshell, American nearly newspapers ignored it. We decided to canvass experts we respect to see what they thought. Excerpts follow:

(more…)