"Step back a second and realize in 1999, oil was at ten dollars a barrel. Today, as we sit here, its about $120.00 a barrel... a twelve-fold increase in cost that has not stopped anyone from using it." -- Dr. Stephen Leeb.
Welcome to a Big Picture edition of TotalPicture Radio, this is Peter Clayton reporting. I'm delighted to have back on the program Dr. Stephen Leeb, Chairman of TCI Enterprises, President, Chairman of Investment Committee of Leeb Capital Management, and Senior Editor of The Complete Investor. We interviewed Dr. Leeb in 2006 regarding his book, 'The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel', In the book, Dr. Leeb asserts that the U.S. economy is standing on the brink of the biggest crisis in its history.
A prior TPR interview with Stephen Leeb (The Coming Economic Collapse) remains one of the most popular we've ever done. As the fast-growing economies of China and India push global demand for oil beyond production capacity, Americans will experience a permanent energy shortfall far worse than the one in the 1970s.
Questions we asked
- Stephen, oil continues to flirt with the $100/bl benchmark. What is your prognosis for 2008?
- A number of people have written about the psychological impact of $100/bl oil. And then you think about who is producing oil - Venezuela - Iran - Russia...
- On your complete investor website (www.completeinvestor.com) the lead article is titled "Ethanol is a Farce" – can you elaborate?
- This is not a pretty picture -- $100/bl oil, the sub-prime mess, the dollar sinking to all-time lows, the Fed cutting interest rates... what's keeping this economy going?
- Let's talk about one of your favorite topics... Chindia. Give us an update on China and India, and how their increasing consumption of oil will impact everyone else.
- What advice would you give the presidential candidates?
Back to the Complete Investor. You write; "In the next one to four years, half the earth's oil will be gone. And IF we were to keep sucking it up at the present rate, every drop would vanish by about 2029.
About the book
The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a BarrelAvailable on Amazon
Backed by meticulous research and analysis, Stephen exposes the psychological "groupthink" that has caused leaders in government, Wall Street, the oil industry, and academia to ignore the approaching crisis, until now when it is almost too late. He debunks the myth that petroleum supplies are limitless, and reveals the truth about an alternative energy source that is fast becoming cheaper than oil.
"The problem we have is that there are 2.3 billion people in Chindia," Leeb says, using shorthand for a combined China and India. "Today, China and India use the energy-equivalent of 5.5 barrels of oil per person per year, while rich nations use 39. No matter how rosy your thinking is as to the global supply of oil, there is no way there is going to be enough to satisfy the demands of an extra 2.3 billion people coming online."
As China and India become rich nations, the demand for oil could grow at 6% per year, compared to 2% recently. Currently, the world has almost no excess supply. The planet is operating at anywhere from 95% to 99% capacity, Stephen says. "There is no margin for error." The only way the system can respond is continued price increases.
About Stephen Leeb
Stephen Leeb, Ph.D President, Chairman of the Investment Committee
As Leeb Capital Management, Inc.'s Investment Committee Chairman, Dr. Leeb has developed a systematic approach in evaluating market trends over his 25+ years of investment experience. His team of investment professionals combine knowledge of macro-economic trends, current market conditions and detailed fundamental research about the specific companies that they follow. They apply this knowledge to guide the Investment Committee's decisions regarding which stocks are placed in portfolios under the Firm's management. Stephen Leeb is responsible for coordinating the macro-economic analysis and his fundamental research focuses on the energy, materials, industrials, and healthcare sectors.
Stephen Leeb is the author of six books. The latest, The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel, published in February 2006, outlines the biggest challenges facing the American economy, and the steps individuals and governments can take to forestall them. Timer Digest has rated Dr. Leeb among the top market timers for both stocks and bonds several times over the past decade, and Dr. Leeb's The Complete Investor newsletter has earned an award for Editorial Excellence for 2004 and 2005 by the Newsletter & Electronic Publishers Association. Prior to founding The Complete Investor, Dr. Leeb was the longtime editor of the widely acclaimed Personal Finance financial newsletter, in which his investment advice at one point reached over 120,000 subscribers twice per month. Dr. Leeb received his bachelor's degree in Economics from the University of Pennsylvania's Wharton School of Business. He then earned his master's degree in Mathematics and Ph.D. in Psychology from the University of Illinois.
About Peter Clayton
Peter Clayton, Producer/Host, is an award-winning producer/director of radio, television, documentary, video, interactive and Web-based media who has created breakthrough media for a wide array of Fortune 100 clients.