You all have "friends" who pass along warning screeds. Y'know, the kind that in very large type yell, "THIS IS IMPORTANT. Pass this along to everyone you know!!!!" Like lemmings, they do.
A reader passed along a screed, but with a more thoughtful attitude. He wrote, "I was sent the following, if you care to read it. I wondered if it was correct but might be limited in content and reasoning." It was taken from the Georgia Strait, a left-wing free weekly published in Vancouver. The author, Braun Mcash, starts off like this:
Let's imagine that one morning you awake to find that gasoline is $10 a litre at the pumps. The Canadian dollar is worth half the U.S. dollar, which itself has been seriously devalued against other currencies.
These sorts of "explanations" usually make their false assumption in the very first sentence, and then go downhill from there.
In this screed's first sentence, the false assumption is that gas could $10/l (unlikely), which means the price of oil is $700/barrel (also unlikely). Even if that were to happen, the conclusion of the first sentence is wrong. This is what would happen instead:
- The Canadian dollar thrives on strong commodity markets. The Canadian dollar would be stronger, because we are the world's largest exporter of oil to the US.
- Alternative energy sources would have long kicked in, because they would now be cheaper than paying $500 for a tank of gas (on my Toyota Corolla).
- With increased use of alternative energy, the price of oil would come down as demand for it decreases.
A second problem in the first sentence is the writer's assumption that this will occur soon: "one morning you awake" -- ie, there was no warning of the price jumping from $1 to $10/l. In the marketplace, prices don't change by 10x, unles the government causes it to happen. The $10/l price is unlikely, because there are too many oil reserves -- anywhere from 100 to 300 years at current consumption levels. And as the price goes up, difficult-to-extract areas like the oil sands become ever more profitable to exploit.
Just because the US economy "is in terrible shape" doesn't mean that the end of the world is neigh. Japan has had a terrible economy for 15 years now; its currency is not seriously devalued.
People who write these sorts of things are either frightened by change or are in need of a scapegoat. Change creates new opportunities; bad times might even teach our spoiled children the real meaning of life, and I would welcome that.