Where "first object of government" (highest priority) was "the faculties" of acquiring property. ^[4]

Where the struggle of classes and passions (e.g., religious conflict) was replaced with the struggle of interests in the economic sphere.

Where the political system was extremely resistant to change.

Where political power was reserved for a white male minority while projecting the illusion of self-government to the majority.  Madison scholar Richard K. Matthews explains:

"By consciously denying virtually all but a handful of citizens any role in a governmental structure that, by design, was to be run by an elite of superior ability (who nonetheless would have to check and balance each other), Madison left [economic struggle] as the prime avenue for humanity to search for meaning." ^[5]

Nowadays, the terms "democracy" and "market economy" are often used interchangeably.  Political decisions in a market economy are stunningly simple: one dollar, one vote.  In short, the market economy serves as a stealth political system to foster rational thought, universal values based on calculation, and world peace based on self-interest.  The market economy succeeds because it satisfies our hunter/gatherer genetic drives for dominance, sex, food, and material possessions.

One hundred years ago, fundamentally defective economic theories led to two world wars with millions killed.  Today, the same defective economic theories are taught to students all over the world and are leading to a new generation of world wars with billions killed.

America will soon lose the stability the framers worked so hard to create because it is becoming wholly dependent upon inherently unstable (authoritarian) oil-producing Muslim nations like Indonesia.  It happened twenty-five years ago when OPEC quadrupled world oil prices and plunged America into "stagflation".  Fortunately, the non-OPEC producers still had a HUGE unexploited oil cushion to fall back on and simply pumped central bankers out of their economic crisis.

But that was 1973 and this is 1999 -- twenty-five years later the oil cushion is gone.  Muslim nations will soon control virtually all of the worldÕs oil exports.  Since neither capital nor labor can create energy, the next round of energy-shortage-induced stagflation will leave central bankers helpless and they will seek military solutions to their economic problems.

It's the best-kept secret in Washington, Whitehall, Brussels, and Jerusalem, but it's just a matter of time until word hits the street...

ENERGY SOURCES

Energy and Resource Quality Hall, Cleveland, and Kaufmann, 1992

By definition, energy "sources" must produce more energy than they consume, otherwise they are called "sinks". [6]

The market economy burns energy to make money -- there is no substitute for energy.  Although the economy treats energy just like any other resource, itÕs not like any other resource.  Available energy is the precondition for all resources -- including energy resources.

The key to understanding energy issues is to look at the "energy price" of energy.  Energy "sources" that consume more energy than they produce are called "sinks" and are worthless as sources of energy.  This thermodynamic law applies no matter how high the "money price" of energy goes.

The market economy receives almost 80 percent of its energy subsidies from nonrenewable fossil sources: oil, gas, and coal.  They are called "nonrenewable" because, for all practical purposes, they're not being made any more.  The reason they are called "fossil" is because they were "produced" by nature from dead plants and animals over several hundred million years.

In the 1950s, oil producers discovered about fifty barrels of oil for every barrel invested in drilling and pumping.  Today, the figure is only about five for one.  Sometime around 2005, that figure will become one for one.  In other words, even if the price of oil reaches $500 a barrel, it wouldn't make energy sense to look for new oil in the United States after 2005 because it would consume more energy than it would recover.

The increasing energy cost of oil sets up a positive feedback loop: since oil is used directly or indirectly in everything, as the energy costs of oil increase, the energy costs of everything else increase too -- including other forms of energy.  For example, oil provides about 50% of the fuel used in coal extraction.^[7]

Immutable energy laws tell us that a growing economy must eventually consume more energy than it can buy.  When America spends more-than-one unit of energy to produce enough goods and services to buy one unit of energy, it will be physically impossible to cover the overhead (money is irrelevant).  At that point, America's economic machine is "out of gas".  Forever!

EUR OIL

For many years, geologists and petroleum engineers have published estimates of how much oil can be recovered from any given basin.  This is known as "Estimated Ultimately Recoverable" (or EUR) oil.  Remarkably, estimates of total worldwide EUR oil have varied little over the past half century! ^[8]

Forty years ago, geologist M. King Hubbert developed a method for projecting future oil production and predicted that oil production in the lower 48 states would peak about 1970.  This prediction has proved to be remarkably accurate.  Both total and peak yields have risen slightly compared to Hubbert's original estimate, but the timing of the peak and the general downward trend of production were correct.  Hubbert showed that oil production begins to peak and starts to decline when approximately half of the EUR oil has been recovered.

IHS Energy Group (formerly Petroconsultants) is the world's leading provider of data and analysis for oil exploration and production.  The company maintains its headquarters at a custom-built communications center in Geneva.  It also has offices in London, Houston, Calgary, Sydney, Perth, Singapore and Hong Kong and a global information network.  The backbone of the company is a staff of 300, embracing numerous nationalities, cultures and professions, specializing in petroleum geology, geophysics, petroleum engineering, economics, political science, petroleum legislation, cartography, computer science and information technology. ^[9]

In 1995, Petroconsultants published a report for oil industry insiders ($32,000 per copy) titled WORLD OIL SUPPLY 1930-2050 which concluded that world oil production could peak as soon as the year 2000 and decline to half that level by 2025.  Large and permanent increases in oil prices are predicted after the year 2000. ^[10]

NO OIL?  NO ECONOMY!

One of the most important aspects of energy is its "quality".  Different kinds of fuel have different qualities. For example, coal contains more energy per pound than wood, which makes coal more efficient to store and transport than wood.  Oil has a higher energy content per unit weight and burns at a higher temperature than coal; it is easier to transport, and can be used in internal combustion engines.  A diesel locomotive uses only one-fifth the energy of a coal-powered steam engine to pull the same train.

Oil is the highest quality energy we use, making up about 38 percent of the world energy supply.  No other energy source equals oilÕs intrinsic qualities of extractability, transportability, versatility and cost.  The qualities that enabled oil to take over from coal as the front-line energy source in the industrialized world in the middle of this century are as relevant today as they were then.  Oil's many advantages provide 1.3 to 2.45 times more economic value per kilocalorie than coal. ^[11]

Studies show that nothing can replace oil:  "A recent review of the future prospects of all alternatives has been published.  The summary conclusion reached is that there is no known complete substitute for petroleum in its many and varied uses."^[12]  For example, when the oil's gone, food production will drop to a fraction of todayÕs numbers: "If the fertilizers, partial irrigation [in part provided by oil energy], and pesticides were withdrawn, corn yields, for example, would drop from 130 bushels per acre to about 30 bushels." ^[13]

RICHARD DUNCAN: IT'S THE EXPORTS, STUPID!

In 1997, Richard Duncan developed a new model to forecast oil production called the NUMERATE-EMPIRIC MODEL.^[14]  In the course of his research, Duncan discovered that Muslim nations would soon control market economies because they will control virtually all of the oil export market.  In a 1997 letter to President Clinton and Senator Jessie Helms, Duncan warned:

"What if tomorrow Palestinian leader Yasir Arafat met with representatives from each of the 19 Muslim petroleum exporting countries and proposed an entirely new organization called the 'Alliance of Muslim Petroleum Exporting Nations' -- 'AMPEC' for short?

"This proposal alone could cause World stock markets to fall 50% in one day.  And crucially, it could ignite both (1) a World Petroleum War, and (2) a World Holy War (called a 'Jihad' by Muslims).  I view an 'AMPEC shock' as looming likely because powerful Muslim forces are pushing Mr. Arafat (and others) further every day."

Senator Helms replied that America's oil dependence had become a threat to national security:  "The Commerce Department recently released a report which found that U.S. dependence on foreign oil has become a threat to national security.  The government should not have allowed its national security to be placed in such a vulnerable position."

...President Clinton was apparently too busy to reply...

Duncan is certainly right!  Who can forget the headlines of 1979:  "Shah flees Iran ... Ayatollah Khomeini returns from exile ... 63 Americans taken hostage in Iran ... many states initiate gas rationing programs ... ABC begins nightly report with 'The Iran Crisis: America Held Hostage' ... OPEC oil price increase tops 50 percent ..."

Although the names and faces will change, we will certainly see a rerun of 1979 because all Muslim countries are "authoritarian" political systems and therefore, inherently unstable:

"Only a handful of the more than four dozen predominantly Muslim countries have made significant strides toward establishing democratic systems.  Among this handful -- including Albania, Bangladesh, Jordan, Kyrgyzstan, Lebanon, Mali, Pakistan, and Turkey -- not one has yet achieved full, stable, or secure democracy.  And the largest single regional bloc holding out against the global trend toward political pluralism comprises the Muslim countries of the Middle East and North Africa." ^[15]

OIL EXPORT POTENTIAL

A nation's oil "export potential" is determined by subtracting its oil consumption from its oil production.  For example, in 1998 Saudi Arabia produced 9,230 Kb/day and consumed 1,240 Kb/day.  Thus, the Saudi export potential is 7,999 Kb/day.  (No other country is even close to the Saudi's export potential!)  We can make a very rough estimate of Muslim exports by considering the exports of Muslim regions for 1998, as follows:

Most Muslim oil-exporting nations are experiencing serious cash flow problems and social unrest (e.g., Saudi Arabia) because of the failing "oil welfare" approach they've taken with their citizens.  However, these nations have a HUGE "savings account" in the form of oil reserves.  The Middle East alone has 64 percent of the world's proved oil reserves.  Add to that 9 percent (i.e., the FSU Muslim republics, 1.7 percent;  Muslim African nations, 6.7 percent;  Indonesia, Malaysia, and Brunei, 1 percent) and the Muslim nations have roughly 73 percent of the total world's proved oil reserves. (See BP Amoco 1999.  Of note: The data is from the oil industry itself.) Now that's money in the oily bank account, and the Muslims hold the checkbook.  It's just a matter of time until domestic unrest forces Muslim nations to coordinate their efforts and solve their cash flow problems for decades to come.

By 2010, Muslim nations could control 60 percent of the world's oil production and, more importantly, 95 percent of the world's oil exports.  In short, the Muslim exporting nations have Western economies by the throat.

THAT GIANT SUCKING SOUND

The United States is physically unable to produce enough oil domestically to keep its economy alive and is forced to rely on imports.  In 1998, the United States imported 53 percent of its oil needs.  This deficit is growing -- and will continue to grow until the economy collapses exactly like it did twenty-five years ago.  What's utterly amazing is that even though these data are available for everyone to see on the BP Amoco web site -- and in every major library for non-surfers -- there's nobody in the Oval Office who seems to know how to search the web (or the library)?  Even our "environmentalist VP" -- who claims to have "invented" the Internet -- is apparently unable (or unwilling) to access BP's database.