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Peak oil could lead to a partial or complete failure of markets, a conceivable alternative would be government rationing: German Think Tank.

September 17, 2010 (Hamsayeh.Net) - German government and military officials predict dire consequences after peak oil phenomenon hits our global economy in which case oil shortage will result in destruction of modern society.

The study concludes that no place on earth is immune if and when oil reaches its peak production yet still short of fulfilling the global requirements.

In this new study – confirmed by German Magazine for its authenticity – by the Bundeswehr Transformation Centre, a rather bleak future awaits humanity once the oil reaches peak output. The study predicts seven catastrophic consequences in the form of chain reactions, namely:   

1 - Oil will determine power – …oil-producing nations …[grow to]… in some cases even global leading powers.”

2 - Increasing importance of oil exporters – “…a more aggressive assertion of national interests on the part of the oil-producing nations.”

3 - Politics in place of the market – …a supply crisis would roll back the liberalization of the energy market. “The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts…”

4 - Market failures – “…Shortages in the supply of vital goods could arise” as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry…

5 - Relapse into planned economy – …peak oil could lead to a “partial or complete failure of markets,” says the study. “A conceivable alternative would be government rationing…”

6 - Global chain reaction – “…likely that a large number of states will not be in a position to make the necessary investments in time,” or with “sufficient magnitude…”

7 - Crisis of political legitimacy – …the population could perceive the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government…”

The above failures are just a small part of the whole bizarre picture. Leading economists and environmentalists know that a breakdown in oil supply would permanently wipe out what’ we know as modern industrial world. Post World War II global economic system, which is the American way of mass assembling and manufacturing of automobiles, depend almost entirely on burning gasoline. What is being witnessed today in the form of global recession is directly related to peak oil crisis, i.e. there isn’t enough oil and gas to kick start the economy again. At the current global oil production, any excess oil is simply absorbed by rising economies of East Asia and India.

Post World War II global economic system, which is the American way of mass assembling and  manufacturing of automobiles, depend almost entirely on burning gasoline.

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