In my last column I wrote that humanity is in transition from one Age to another and that the global financial collapse is a painful part of that transition.  This occurs during any major historical transition period.  In addition I wrote:

“There are four words that keep coming back to me as I view the landscape of what lies ahead in 2009 and beyond.  They are contraction, cleansing, reorganization and transformation.  It is these four words to keep in mind as you read the forecasts here and look around you”

I repeat that because most of the economic predictions below are about contraction and cleansing.  However I am not a pessimist as I believe that we are in a process of reorganization that can lead to transformation.  Please keep that in mind as you read on.

The U.S. economy has been in a recession for close to a year, with the fourth quarter being one of the worst quarters on record.  During this fourth quarter the global economy joined the U.S.  When all the numbers come in for this quarter they will show a major contraction probably in the range of 4-7%.  In a column in mid-October, I wrote:

“We will witness one of the worst holiday retail seasons in history on a year to year comparison basis.  People who feel that they have no control over the performance of their investments will realize that the only control they have is in the area of spending which they will …

The year 2008 will obviously go down as one of the most eventful years in recent history.  It was the year that Barack Obama was elected President of the United States.  It was the year that the Internet replaced print and TV as the driving force in a presidential election. It was the beginning of the end of 15 years of divisive cultural politics in America.

2008 was the year of the worst economic collapse since the Great Depression.  This collapse was the first one since the beginning of the new global economy and thus showed how humanity and all of its nation states are financially interconnected in a historically unprecedented way.  This global financial collapse is historically significant for several reasons.  First it did show that money and finance knows no national boundaries, and that nation states can no longer individually deal with major financial crises.  Second it is the start of the process to cleanse the global and particularly U.S economy from over leveraged, debt oriented mindless growth and consumption that has been a result of the mindless support of unlimited growth without thought of personal, national and global consequences.  Third it represents a clear albeit disruptive and painful part of the transition that humanity is now making from one age, the Information Age, to the new age, the Shift Age.

2008 was the year when people around the world, and most strikingly Americans, make a sudden and profound switch from consumption, debt and spending to, thrift, saving and shedding …

This is not a column about Cole Porter, the great Broadway composer who wrote the wonderful song “Night and Day”.  This column is about climate change and the urgent need for humanity to dramatically alter its’ energy equation.

At a recent global climate change summit in Poland, John Kerry, the ranking U.S. representative told the world community that the difference  on the issue of climate change between the incoming Obama administration and the soon to be history Bush administration will be like “night and day”.  He emphasized the commitment that Obama will have for facing global warming, creating alternative and renewable energy businesses and working closing with nations of the world in this area.  He compared that to the horrendous, head in the sand, petroleum loyal and anti science Bush administration and promised the world that America is ready to again join the rest of the world in facing these key issues.

There is no doubt that Kerry’s words will be proven to be true.  It is hard to imagine a less committed administration in the area of alternative energy, and all the complexities of the climate change issue than the Bush administration.  History will not be kind to the Bush administration in the area of energy and climate change.  In the next 15 years the global transportation, construction, production and land use market sectors will undergo incredible transformation.  There is more change in front of us for the next 15-20 years in these areas than in the last 50 years.

Historians in …

In the last column here, I suggested that any bailout of the Big Three include alternative energy metrics against which the three companies compete for better loan repayment terms.  In the week since that column was published there has been much discussion about whether America can afford to allow its’ auto industry to go down the tubes.  This implies that the Big Three represent the totality of America’s automotive production.

Of course there are the U.S. based factories of the German and Japanese manufacturers, which, while they produce cars here, are controlled and largely owned by other countries.  These factories have nothing to do with the Big Three except they are producing cars here but are making a profit.  Even beyond these companies, I would like to suggest is that the future of the automotive industry in the U.S. may well lie largely outside the Big Three.

In the early part of the 20^th century there were initially dozens of companies that produced automobiles.  Up until Henry Ford created mass production, Americans purchased cars from numerous producers that supplied limited scale but provided a great variety of internal combustion engine vehicles.  The history of the automobile business through the 20^th century is essentially one of consolidation so that by the last decade there were three standing.  During this last decade these three companies were exclusively focused on selling big vehicles with internal combustion engines that produced big profits. Prisoners of legacy thinking, all three of these companies were content to enter this …

Recently, people have been asking me a lot of questions about the fluctuating price of oil

“What is the price of oil going to be?”  “Was the recent price spike of $147 a barrel an all-time high that we won’t see again?”  And “Will the global economic slowdown drive the price of oil back down below $100?”

These are just some of the questions I have been asked in recent weeks.  The reason of course, as long time regular readers of this blog know, is that I have been consistently accurate in my predictions about the price of oil.   In 2006 I predicted $125 barrel oil in 2008 and $137 in 2009.  In the past year I predicted that oil would have a near term trading range of $95 – 135 per barrel but that while there would be little downward pressure below $95, there are many scenarios that would provide upward pressure above $135.  All of this price predictions flow from my view that we have entered the time …