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By now, almost everyone is familiar with the concept of “peak oil”. This notion, which has been accepted as fact by many, has two components to it.
First of all, we have new supply fundamentals which demonstrate conclusively that any increases in supply cannot be maintained due to the permanent inability of the petroleum industry to find and develop new sources for crude as fast as current reserves are depleted.
The second component of the “peak oil” model is a demand “curve” which projects large increases in demand which are totally above the upper parameters of supply. In other words, barring some currently unforeseeable miracle, we will be forced (through dramatically rising prices) to curb our demand – or else we will “fuel” (pardon the pun) even more extreme prices.
More recently, some “gold bugs” have been quietly discussing their own paradigm for the future: “peak gold”. The first component of this model already equates to the current realities of the oil market: global gold producers are unable to increase supply – despite a greater than tripling of the price of gold this decade