In Mexico on Monday, U.S. Treasury Secretary Henry Paulson once again threatened oil-rich nations that if they don’t produce more oil, the global economy will be screwed (Reuters):
In my judgment, it’s got a very real risk of prolonging this economic slowdown, but this is not a situation that avails itself to a quick fix….
We call on oil producers everywhere to open up for investment…and then obviously this is about developing alternative sources of energy, new technologies.
Paulson’s right about the “no quick fix.” Other than a global economic collapse–which, at these oil prices, is probably on the way–the only answer is long-term investment. Jawboning certainly won’t do it: Iran has tried to talk down oil prices, Saudi Arabia’s false promises won’t do it. Everyone can talk, but no one, it seems, can just magically pump more.
Meanwhile, $140 oil is certainly stimulating in investment in alternative energy. First Solar (FSLR) is worth $23 billion.
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