Cheap Gas - The Rise of the Machines
Gasoline could hit $6 per gallon by summer as predicted by some energy analysts if there is a hurricane to shut-in wells in the Gulf of Mexico. Six-dollar gas is one minor disaster away from reality.
Donald Trump is telling interviewers that he will have a "come to Jesus" meeting with OPEC and the Saudis to tell them the game is up and the US will have its cheap oil now "or else."
The implication is that it is still 1965. A couple of large nation states control global markets, and money is something you save in a bank to buy stuff with. Stocks and bonds are kept in a metal box under the bed, and a mob sweaty traders yelling at each other in New York are setting prices for the world based on how fast they can make a trade.
Even President Obama is getting in the game by saying that he will appoint yet another committee to investigate pricing of oil. He publicly announced new oil drilling leases in the Gulf of Mexico, while the GOP is again spinning up the "Drill Baby, Drill" calliope for a roll down hometown Main Street. I hope they do not frighten the horses with that contraption!
Money has always been imaginary and just a symbol for the information contained in a promise for trading goods and services in some market somewhere. It is only a measure of aggregate wealth in the society that facilitates the exchange of goods and services. If a nation was poor or had a financial collapse their money was worth less than the rich neighbor next door. In the late 20th century America and its dollar were the rich neighbor next door and the banker that set the benchmark value of money around the world.
In the last century an American dollar was worth the same everywhere. It was "fungible". Every dollar was the same as every other dollar anywhere else, and they were all interchangeable with each other. That value was set and maintained by the American market so many nations could agree to use dollars to trade for goods and services more reliably.
What fast computers, the Internet, and Internet search have done is to disintermediate information. There are no more middlemen between users of information and information. Newspapers, television, movies, music, books, magazines, and everything else that are information have been disintermediated to the extent that control by the middlemen is gone. A global pool of consumers of the news and entertainment information sets the price of that information at the lowest point through the constant auction happening when the consumer uses the information on a free, or nominally priced website or service, that is itself supported by advertising. Money is just information and this auction pricing has happened to money and what it buys also.Continued on the next page