I'm Back III... Economics...

Rather loosely...

As I write this, the oil price is breaking records again - Nymex at $53.31, Brent at $49.68 (dated) and $49.71. Is this Peak Oil? I don't think so - it's close, given that there aren't many untapped capacities, but not yet, Peak Oil will be when demand outstrips production even without the combination of hurricanes and sabotage in a number of supplier countries. And when that happens, I'd expect prices to exceed the inflation-corrected record of 81.30.

Meanwhile, the latest US jobs data shows moderate growth, with last month's figure downward revised. (link to the official data.) Since the US population grows by roughly 280,000 every month (calculated from US Census Bureau data), and the increase in the working-age population should be about the half of this (140,000), from June on the absolute job growth doesn't make up for population growth. On a longer timescale, Bush is some 0,8 million below his January 2001 figure, while population went up some 11 million; that is, Bush is 6,3 million jobs short of just keeping up with population growth.

Meanwhile, the Bush government shot another own goal by bringing the issue of EU state loans for Airbus before the WTO (abadoning an 1992 agreement thereby): the EU retorted within an hour by bringing the issue of US subsidies for Boeing (either from Washington state or through federal government agencies like NASA et al) before the WTO - they must have awaited the US step. (In both cases some $3.4 billion is said to be the sum.) It is rumoured the reason was not elections, but that Boeing panicked upon rumours that Airbus would start the project of an A350 to directly rival the 7E7.

The interesting observation to make is how Japan became an inofficial subcontractor of US government policies. I lately noted (not in this bog) that when the US finally withdrew its $18 million special support for Islam Karimow's Usbekistan, Japan cruised up with a preferential loan of $120 million. And I didn't fail to notice that unlike at least one player in most Asian hubs, no Japanese airline ordered Airbus's A380 so far, while Boeign's new 7E7 program was started thanks to a single, but massive order of fifty planes from a Japanese airline. Now articles say Japanese industry would contribute a sizable portion of the 7E7 project, with subsidies from that government too (the EU wants to speak about this at the WTO, too).