The Oil Drum

I remember when petrol first reached 20 cents per litre in Australia. 1979. I was only a kid at the time, so people must have been complaining pretty loudly for me to remember it.

People have this tendancy to think that what they see in front of their faces everyday is normal. But "normal" changes all the time.

A column mentioning the report -- back when oil was around $40 a barrel -- was met with a barrage of testy e-mails. The basic reaction was that commodity prices were already a bubble that soon would burst. Oil at $100 was seen by most as fanciful. Yet 3 1/2 years later, oil is well above that level and climbing

People have an idea of "normal" based on their experiences during the last decade or two. Anything that doesn't fit with that limited experience is "fanciful" or impossible. I always think it is funny how economists talk about "the post-war period" as if we legislated away chaos in 1945, and any return to the instability of prior errors is so unlikely it is not worth discussing.

If you are willing to go back even a hundred years in shaping your worldview, you have to admit that anything is possible,the rules can change completely in the space of a year and turn the world upside down, and people don't like to think about that.