The real wild-card in the raging global growth scenario is energy. Oil is headed up with other commodity prices. Yet despite the rising cost of energy, the stock market doesn’t seem to miss a beat, and no one seems to doubt there will enough cheap energy to keep the six billion people of the planet in ever-more-abundant conditions.
We write this, of course, from the air-conditioned confines of a house on the eastern plains of Colorado while the hot summer sun beats down on the brown grass at 40 degrees Celsius at five in the afternoon on a Sunday. It’s about this time of the week that we often wonder if the whole world isn’t in for the rudest energy shock of anyone’s lifetime.
Last week we suggested smaller, self-contained but free-trading island-like city states would thrive in a more fractured world. But several readers correctly pointed out that a general decline in cheap energy would also be accompanied by a general decline in respect for borders. Could Dubai keep out Iran? Could Singapore keep out Indonesia?
Idle speculation. Meanwhile, the markets move ahead, pricing in as best they can the things we don’t and can’t know. The melt up continues. And in Fremantle this week, a bunch of politicians will continue an Australian debate that began during the last energy crisis. We wonder if they will do anything sensible about developing Australia’s rich uranium endowment. Probably not.
Even though there’s money in it, politicians don’t want to get too far out in front of the public on expanding uranium mining. The public – most of it – is blissfully unaware that the world is on the doorstep of a structural change in the way it gets (and how much it pays) for energy. That will change soon enough.
In the Australian today, Nigel Wilson writes that delegates to the Australian Uranium Conference, “are also expected to hear from Canadian analyst Jim Mustard of Haywood Securities that Australia’s uranium exploration companies tend to lag their peers in nations such as Canada, the US and African countries such as Namibia and Niger – all of which have a regulatory environment in which new mines can be developed mainly because local interest is still focused on domestic production, not on the global nuclear power market.”
The Daily Reckoning Australia