Tuesday, May 27, 2008

The obvious place to invade is Venezuela: but an oil-related invasion would impose an additional requirement: to keep the environmentalists away!

The obvious place to invade is Venezuela (even if current estimates of Venezuelan and Saudi reserves are wrong and there is in reality more oil in Saudi Arabia that could be unlocked if ExxonMobil and the boys were given free rein, the Saudis are nominally our allies, so an invasion would be considered unsporting by world opinion.) Since the 1.8 trillion barrels of Venezuelan oil deposits consist largely of the Orinoco tar sands, a Venezuelan oil-related invasion would impose an additional requirement: to keep the environmentalists away in order that reserves could be exploited with maximum efficiency.
For those who feel that invasion-for-oil is altogether too Bismarckian in its implications, there are other alternatives. The most effective would be to use the interest-rate weapon, reversing the damage caused by the cuts since September and ideally going a little further, to fight the resulting consumer price inflation. A series of small interest rate rises would not be effective, because it would enable speculators to adjust. (The 0.25% rate rises in 2004-06, all 17 of them, we now know were completely ineffective in quelling housing speculation as they allowed the speculating frog to bask in the gradually warming interest rate water, rather than being forced by a sudden temperature rise to jump out of the saucepan.)"

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