Phase I could take two different directions. If it happens as a natural evolutionary process it will cause disruptions, inconveniences, and significant lifestyle changes, but not a catastrophe. There will be lines at the gas pumps, maybe even gas coupons to more fairly allocate supply; less travel by auto and planes, fewer long commutes, more relocation closer to cities, a huge reliance on mass transit and high-speed rail. It will be a difficult and painful experience but a manageable one. In the long run, it might be the best thing that can happen to America; and, it just might be the only way to save America.
However, if as this dramatic change gets underway, the reaction by the nations of the world is to do whatever is necessary to guarantee a steady supply oil, and the specter of war rears its ugly head, then terrible things could happen. In that event, there will be a world crisis of monumental proportions as reason and rationality will be replaced by brutal military actions.
Phase II -- The end of globalization?
What effect will all of this turmoil have on the element of world commerce referred to as globalization, generally defined as "the process of increasing the connectivity and interdependence of the world's markets and businesses"? Globalization and oil work hand-in-hand in fueling world commerce. However when Peak Oil becomes a reality it will have a very major, negative impact on trade between nations and this could completely cripple the globalization movement.
Globalization has proven to be the best friend and benefactor that U.S. transnational corporations have ever had. It has allowed them to utilize dirt cheap labor of foreign nations to substantially reduce operating costs and to dramatically increase profits. But, at the same time, it has become the enemy of the American people, in particular a workforce that is slowly but surely being decimated.
If this impending crisis results in globalization being replaced by a system of regionalization, then it may be a blessing in disguise. Why? Well, because America has proven that it cannot compete with the world under globalization; it has lost its manufacturing industry because the labor rates in China and overseas competitors are simply unbeatable; and that is basically an irreversible condition.
If globalization is unable to function effectively under these conditions and is replaced by regionalization of commerce, U.S. corporations will be in a state of panic trying to figure out how to survive without a massive overseas labor force -- but they will eventually get the message that they must begin to, once again, utilize the American workforce or die.
This could be the opportunity for America to rebuild its entire manufacturing industry, utilizing its workforce and to, hopefully, develop new industries to produce alternate sources of energy.
An onrushing tidal wave, growing in intensity and force -- an energy tsunami -- is headed directly for America. And it's a lot closer than we think.
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