The primary resources of energy for a long time has been oil and it has fueled significant technical breakthroughs in the 20th and 21st centuries . It has become essential in many industries thanks to its high energy density, adaptability and portability. International trade has been facilitated by globalization which is backed by a global merchant fleet powered by oil-driven turbines .
The Peak Oil Challenge
Conventional oil production peaked in 2007 . There are concerns that the world may have even passed the overall peak oil point in November 2018 . Projections based on global oil reserves indicate that oil availability may decrease by half within the next 25 years . This decline in oil supply will have far-reaching consequences like a reduction in maritime traffic and increased costs for goods that are imported .
Looking for Alternatives for Maritime Force
The problem of finding alternative energy sources to move big cargo ships that can carry up to 400,000 tons of cargo emerges with the predicted drop in oil supply . Although some possibilities like gas and biofuels are taken into account they come with their own drawbacks and trade-offs. Some of the drawbacks include resource competitiveness and environmental issues.
Nuclear Power and the Feasibility Challenge
Another possible solution is generating electricity directly on ships by means of nuclear reactors. This approach is currently utilized in aircraft carriers, submarines and icebreakers. However this option is less viable owing to the logistical and practical hardships of supplying tens of thousands of vessels with their own nuclear power plants and training a large number of nuclear engineers .
Consequences of Declining Oil Production
A sharp decline in oil production will lead to deglobalization which will result in supply disruptions and inflationary pressures . Rising extraction costs and falling oil production contribute to increasing inflation which ultimately impacts global trade and the economy . Global debt also amplifies these hardships as it is heavily tied to energy.
The Fiat System and Inflation
The fiat monetary system’s dependence on interest bearing debt is its inherent economic flaw. The system requires an ongoing increase in debt which creates a ponzi-like structure . However due to the practical challenges of increasing output and delivering goods at the same rate as debt hoards inflation is close to double digits on an annual basis. Oil powered equipment increases production which is necessary to maintain the standard of living .
Considerations for Investment
Traditional investment choices including fiat cash, stock market equities and debt instruments are seen as less promising in this fading inflationary environment . The ability to borrow money is impacted by rising energy and food prices which also make real estate investments less appealing . For individuals who are looking to safeguard their assets in an uncertain world Bitcoin presents itself as a good option .
