Part 1: Why you should care what Jeff Rubin thinks - Win an autographed copy of his bestseller too
Did you get a chance to read Jeff Rubin's book: "Why your world is about to get a whole lot smaller: oil and the end of globalization"? If not, you should run out and get it today. It's a great read. His book has been on Maclean's Best Seller non-fiction list for 11 weeks now!
Jeff was the Chief Economist at CIBC World Markets for almost 20 years. He was one of the first economists to accurately predict soaring oil prices back in 2000 and is now one of the world's most sought-after energy experts. He's a true Canadian with amazing vision!
I had the pleasure of spending some time on the phone with Jeff a little while back to discuss his book. I will share our conversation in a series of 3 blog posts, starting with this one.
We are also giving away 3 autographed books, one for each part of the series. All you have to do to be eligible is leave a comment, sharing your thoughts about this issue: If you are concerned or encouraged, agree or disagree, etc. We will randomly select a winner and send you your copy. The deadline for part 1 (this post) is next Sunday, August 16th).
Isabelle: Your book is about how rising oil prices are about to transform our way of life, into something completely different. Something closer to what our grandparents probably lived...
Jeff: That's pretty accurate. We are going to see even higher oil prices, and at the end of the day there's not a whole lot we can do to prevent that. However, there is a lot we can do to make sure that when we see these higher oil prices, they don't have the same kind of devastating impact that they've had on our economy and our lives in the past. And that's about making changes in the way we live, and changes in the way we organize our economy so that we end up using less energy and in particular less oil.
And the single most important thing that we're going to do is go back to the idea of a local economy as opposed to a global economy. A global economy is where we produce something at one end of the world and sell it at another end of the world. But no matter what mode of transport we use (air, boat, train, truck) we're all burning oil. And as oil gets more expensive, distance starts to cost money. It doesn't matter if the wage rate is a lot cheaper in China, because in everything from steel to food the cost of moving things is going to be more important than the difference in the wage rate.
So a lot of things we thought were gone forever, like farms and steel mills, are soon going to be coming back because it's not going to be economic to buy our food or buy our steel from China. At the same time, everything that we now will make for ourselves will cost us a lot more money than we're used to. So we'll get back a lot of high-paying manufacturing jobs, but we'll be able to buy less with our wages because things will cost more.
We will tend to live more in the cities then in the suburbs because we won't be able to afford to commute 40 miles back and forth to work. And as people leave the suburbs, and food prices continue to rise, then ultimately many of those sub-divisions will be returned to the farm lands that they were 30 or 40 years ago.
Isabelle: What is the timeline on that?
Jeff: I think we will see triple digit oil prices again within 12 months. And when we do, I think we're going to start seeing some of these things happen very, very quickly. Because these things are not going to happen because people necessarily chose to live their lives this way, these things are going to happen because the economic reality of triple-digit oil prices are going to leave people with no choice but to change their way of living.
Stay tuned for Part 2...
In the meantime, tell us what you think about Jeff's theory by next Sunday, August 16th. We will then randomly select a winner who will receive an autographed copy of "Why your world is about to get a whole lot smaller."
