veritasophia
Recycles dryer sheets
- Joined
- Apr 12, 2006
- Messages
- 84
The world's countries are currently dependent on oil for continued economic growth. Could this over reliance on a single resource cause the collapse of today's economy? (ie. oil depletion = another great depression?)
It is estimated that at the current rate of consumption, known world oil reserves will be spent in less than 50 years. Prices will probably rise as scarcity becomes more apparent (supply curve shifts left). Does that mean oil is a good investment?
On the other hand, rising oil prices may increase funding for research into alternative energy sources. Consequently, demand for these alternatives should rise, causing a great increase in the value of these industries' stock (demand shifts right). Are these good investments?
I am asking these questions because it seems to me that following simple supply and demand logic, the upward direction of these investments is very clear (unless the world economy does indeed go into a depression). Anything wrong with this reasoning?
It is estimated that at the current rate of consumption, known world oil reserves will be spent in less than 50 years. Prices will probably rise as scarcity becomes more apparent (supply curve shifts left). Does that mean oil is a good investment?
On the other hand, rising oil prices may increase funding for research into alternative energy sources. Consequently, demand for these alternatives should rise, causing a great increase in the value of these industries' stock (demand shifts right). Are these good investments?
I am asking these questions because it seems to me that following simple supply and demand logic, the upward direction of these investments is very clear (unless the world economy does indeed go into a depression). Anything wrong with this reasoning?