The World is Running Out of Oil, Part 3,276

It's hard to imagine, but with stories like this coming out more and more, I can see the day coming when people will be incredulous that educated people once foresaw a day--almost always about 10 years into the future--when the world runs out of oil.

Not likely:

A recent report by the U.S. Government Accountability Office estimated that if half of the oil bound up in the rock of the Green River Formation could be recovered it would be "equal to the entire world's proven oil reserves."

Both the GAO and private industry estimate the amount of oil recoverable to be 3 trillion barrels.

"In the past 100 years — in all of human history -- we have consumed 1 trillion barrels of oil. There are several times that much here," said Roger Day, vice president for operations for American Shale Oil (AMSO).

Bleeding Heart Libertarian

I guess my agreement with this article puts me firmly in the "bleeding heart libertarian" camp, though I'm not very keen on politics or political labels:

Still, some people worry that the Chinese economy will “overtake” the American economy. On its face, that’s like worrying that the Fairfax, Virginia, economy will “overtake” the Falls Church, Virginia economy. But part of the issue here is that people don’t understand the difference between cutting-edge and catch-up growth.

File Under "No Kidding!"

In a good article explaining why there's so much Chinese investment flowing into housing, I found this funny:

Therefore, housing is special because it is much more concrete than other investments.

I like Yichuan Wang's writing style!

End of Cheap China: Exhibit 1

Elsewhere I've blogged about the end of cheap China. Here's an example of this trend, the first of many I expect:

Etched into the base of Google's new wireless home media player that was introduced on Wednesday is its most intriguing feature. On the underside of the Nexus Q is a simple inscription: “Designed and Manufactured in the U.S.A.”

Stay tuned.

Fewer Kids = Economic Decline

Just a few years ago, overpopulation was the greatest "threat" to humanity. What changed?

Demographics.

That's the stark conclusion from James Stock and Mark Watson in this fascinating, and occasionally depressing, new paper. In fact, they say, the future is now. For the last few years, we've weathered the beginning of what demographers have called the grey tsunami. "Most of the slow recovery [in today's job market] is attributable to a long-term slowdown in trend employment growth," Stock and Watson write.

The authors blame two demographic demons for our uncertain future: (1) the plateau in the female labor force participation rate, and (2) the aging of the U.S. workforce. Their underlying logic is that without continued growth in female workers or a significant boost in population, employment and GDP growth will slow, leaving us vulnerable to recessions with "steeper declines and slower recoveries." In such a future, jobless recoveries will be the only recoveries we know.

Turning to Imports

The BBC is reporting this as being caused by a surge in energy prices, but my sense is that it's simply part of a greater general trend: after decades of running trade surpluses, China will go on an importing spree that will last many years.

Side note: every time I see a prediction that China's demand for raw materials is about to collapse, I wait for something like this right around the corner:

According to the trade figures released over the weekend, crude oil shipments hit a record-high of 5.95m barrels per day. China's imports of copper and iron ore also rose during the month.

One last point: if China really does become a voracious importer, expect the complaints to be almost as loud as the complaints against China's exporting. It's irrational, but you can expect to hear things like "China is driving up prices for everything." Just the exact mirror complaint of "China is selling everything too cheaply for us to compete," but the complainers will never see their own irony.

Africa's Singapore?

Go Rwanda!

Yet Rwanda has one huge advantage: the rule of law. No African country has done more to curb corruption. Ministers have been jailed for it. Transparency International, a watchdog, reckons Rwanda is less graft-ridden than Greece or Italy (though companies owned by the ruling party play an outsized role in the economy). “I have never paid a bribe and I don’t know anyone who has had to pay a bribe,” says Josh Ruxin, one of the owners of Heaven, a restaurant in Kigali, the capital.

China's Next Superfast Train?

Even though this article is really about the slowdown in spending on China's rail upgrade, this is the most interesting part to me:

For those craving even faster speeds, CSR Corp, China’s biggest trainmaker, has unveiled a supertrain (pictured above) said to be inspired by the shape of an ancient Chinese sword. It should slice through the air at 500kph.

C'mon, baby!

Big Mac Index

Next semester I'll be teaching International Marketing and Transnational Management classes.

There's no way students will escape these classes without knowing about the Big Mac Index.

Eat to learn.