11/11/2009

Review of Game Over: How You Can Prosper in a Shattered Economy (Hardcover)

The Game Leeb writes about is whether or not alternative energy systems can be developed before there is painful economic collapse."Game Over" refers to a world where the easily extractable energy and mineral resources are gone (peak commodities) and we haven't developed the alternative technologies to maintain our society in the absence of low cost oil.Leeb outlines how energy and other resource limitations have come to dominate global economics.He explains the familiar concept of peak oil, and introduces the concept of absolute peak oil, the point where the energy cost of oil production just matches the energy extracted. Further Leeb goes on to describe how the extraction of minerals, water and even food are coupled to energy production.Leeb is concerned with the problems of building out of the most common alternative energy systems to a large scale.

Much of this book is recycled material found in Leeb's earlier work
The Oil Factor: Protect Yourself and Profit from the Coming Energy Crisiswhich made a more technical presentation of most of the economic ideas in the first few chapters.As in the The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel this book is written for a more general audience, but unlike his other books which are mainly directed at individual investors, the first three sections of Game Over are directed to the broader questions of how our complex and technological society can deal with resource limitations, which have been magnified by rapid economic development of Asia.Only the last section of the book is directed to investment choices for individuals.

One weak spot in the book is a chapter on the costs of complexity, which comes off as a bit of a political rant against the costs of having bad regulations and archaic ownership systems that make it difficult to move to solutions to the Energy supply problems. He might have added some material about how the demand for safety, adds to energy costs over time, as in pollution controls and automotive safety features making cars less efficient.

For a book emphasising alternatives to oil, Leeb says surprisingly little about global warming. He seems to underestimate the size of US coal reserves and so doesn't discuss the CO2 production problem. My suspicion is that when things get tough, concerns about our ecological commons will be swamped by immediate and local economic concerns.Another item almost entirely left out of the discussion is population control.In a world where change is driven by the billions in the third world expanding their consumption patterns, it seems Leeb is implying its already too late to do anything about overpopulation.

Leeb's investment advice has been fantastic.My interpretation of his oil price indicator was a market sell signal in late 2007. A big question right now is how long will the deflationary fears and trends last. This book's advice is based on the premise that the pain of deflation is so threatening to government revenues that inflation will be manufactured to keep the housing market from collapsing.His advice is premised on the view that the stimulation needed to solve the short term problems(thanks George) will flip us into a world of inflation that will make the 70's look like a cakewalk. Leeb paints a very nasty and depressing picture of our economic future. The rapid consumer growth in Asia has pushed up the Malthusian day of reckoning that much closer.Leeb's depressing picture may well prove prophetic unless we see some tremendously clever improvements in our industrial, land use, trade and energy policies combined with some timely technical advances in energy development.

Ignore Leeb's warnings at your own peril.



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