05/27/10 Paris, France – Oil is still spilling into the Gulf of Mexico at an unknown rate.
“Plug the damn hole,” says the nation’s chief executive to his aides. Why does he bother? His aides don’t know anything about plugging oil leaks under the ocean. And those people who do know something about it have been unable to fix the leak.
Mr. Obama is not only America’s president. He also presides over the biggest single user of oil in the world – the US military. The pentagon uses twice as much oil as the entire nation of Ireland. It sends soldiers in oil-burning airplanes to places of no apparent importance where they drive around in oil-burning machines for no apparent reason.
Naturally, oil becomes not just another commodity, but a strategic commodity…worth fighting for. Then, foreign wars use up the oil they were expected to protect.
But geopolitics is far beyond our understanding…and even farther out of our range of interest. We will just observe that the law of diminishing returns applies to just about everything. The farther offshore the roughnecks go…the deeper the sea and the higher the waves…the more the costs, the greater the risks and the lower the marginal returns. The return from Deepwater Horizon must be starkly negative…
The farther afield US armies go, too, the greater the costs, the higher the risks, and the lower the marginal returns.
“Why not just buy oil on the open market?”
Well, it’s clear you don’t know anything about geopolitics either, dear reader…don’t you know that our enemies might try to cut us off from vital oil supplies? That’s why Germany and Japan lost WWII! We were able to cut of their fuel…
“But weren’t Germany and Japan fighting for access to oil? Didn’t their politicians say they had to invade Poland…and the Philippines…to protect their vital supplies?”
No…they were aggressors. They were bad people…
“But if they hadn’t been the aggressors they wouldn’t have been bad people, right?”
That’s right…
“Then, we wouldn’t have cut off their access to oil!”
Oh, never mind. You’ll never understand geopolitics, will you?
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Oil is not alone or that decisive in WW II.
The decisive factor is the abundant resources of the alliance forces; in term of manpower, material and the great atmosphere.
Relentless carpet bombing on Germany, the 2 A-bomb dropped on Hiroshima and Nagasaki tellingly sapped the axis of all their remaining strength.
Do you agree?
the germans made the first mass produced fighter jets at the end of wwII. they had a 2-1 kill rate over allied fighters. They used immense amounts of fuel compared to allied fighters and the germans couldn’t hold up the needed supply to fuel them.
… so yes, fuel was a vital decider.
how much money did you make today harry??
It is not a matter of making how much money. More importantly, it is the story of the inflammable fiat money with its inherent property of extreme low boiling point – it vaporises easier than gasoline.
Germany found out the hard way that you can’t take over the world with a population of 80 million. Same for Japan. When they ran out of men the war was over. All America’s involvement did was speed up the process by a couple of years. Russia had the Germans stopped by the winter of ’42-summer of ’43. Nobody has fought for MY freedom since the war of 1812. Sorry but all you veterans have been sold a lie.
And I might add we’re finding the same thing out with a population of 300 mil.
to War Monger – do some research into what kind of fuel the Germans were using… it was gas made from coal, very expensive, they wanted oil to make cheap gas
War is a stupid and, with the benefit of enough hindsight, a funny thing at the same time. Winners become loosers and loosers become winners.
Hi Biggest Fan,
In time of war, not only fuel, everyting is in shortage due to war destruction and redeployment of productive workforce in the frontline – scarcity in food, clothings, shelter, medicine – you name it. Fuel is important in the warring states, so do all materials from A to Z.
Agree?
Hi
It is truly “lost & then found”. You have really enlightened me with just a few plain words. I feel proud of you.
Hitler should have carried out a research of the “made in Rusia refrigerator”. The extreme coldness, even a polar bear has to wear a sweater. It was the failure of his cousin, Napolean, who did not give him a good description of the bitterness.
That was one of the decisive factor, Germany lost the game. It was fair. Do not blame the referee.