Jeff Rubin's Contributions

On the same day the Obama Administration put the kibosh on the Keystone XL pipeline, two engineering contracts totaling $12.2 billion were awarded to two U.S. companies for work in the Alberta oil sands. One included a $750 million contract to a Chicago-based company for work on Exxon’s huge Kearl Oil Sands project, one of the largest it has anywhere in the world.

As that option is politically rejected, bond yields on Italian and Spanish debt will once again rise to thresholds their governments simply can’t afford to pay. Unless the European Central Bank is going to engage its own form of quantitative easing and start printing billions of euros to buy up long dated Italian and Spanish bonds, the end is in sight for the European Monetary Union as we know it.

Record low interest rates and record high debt levels are a marriage that history tells us won’t last long. This is a lesson European bondholders have already learned. And it is one that will likely unfold in the U.S. Treasuries market, the supposedly safe haven from the panic gripping European bond markets these days.

Facing growing political and environmental opposition in the U.S. to the proposed Keystone XL pipeline, Canada’s landlocked options for exporting its oil have never appeared more costly.

What U.S. presidents seeking re-election fear most is the wrath of a rising misery index. And nothing brings more misery to the world’s largest oil consuming economy than high oil prices.

Heading down to Washington to speak at the Association for Peak Oil-USA‘s Truth in Energy conference on Nov. 2, I sense a general malaise within the peak oil movement.

You might have thought things had changed in world financial markets since the U.S. subprime mortgage disaster. After all, we were told at the time that if taxpayers didn’t open their wallets and bail out the banks, we could face a complete meltdown of the global financial system and an economic fate rivaling the Great Depression.

The more you hear about the extraordinary efforts that governments around the world are taking to promote economic growth, the less confident you can be in the result.

When virtually every global financial institution is exposed to one other in today’s world of free flowing capital markets, where do you hide when bankrupt borrowers like Greece default?

It is getting harder and harder to see where tomorrow’s global growth will be coming from. Job creation in the U.S. has come to a screeching halt. Growth in the Eurozone has done the same. And a still irradiating Japanese economy continues to stagnate, while an emerging energy crisis has suddenly sparked plans to start off-shoring manufacturing.

It is not that difficult to discover who is the most concerned about Standard & Poor’s recent downgrade of the United States’ coveted AAA credit rating.

Japanese Prime Minister Naoto Kan was recently quoted as seeing the country as a nuclear-free nation. But unlike similar pronouncements from Germany, which pledges to be nuclear-free by 2022, Japan may become nuclear free literally within a year.

Even though the world economy is drowning in government debt, borrowing rates remained chained to record low rate setting by the G7 central banks.

The International Energy Agency may not have a solution but no one can accuse them of no longer understanding the gravity of the problem.

Just why did the United States and the International Energy Agency decide to release 60 million barrels of oil next month from their strategic petroleum reserves?

The relationship between energy and global economic growth has never been more clear than in BP’s World Energy Statistical Review for 2010. No sooner had the global economy shook off the shackles from the last recession than energy demand exploded.

However the cold war being fought between Saudi Arabia and Iran plays out at this week’s OPEC meetings, oil consumers shouldn’t take any subsequent pledges of increased cartel production too seriously.

What’s more important to world oil demand- gasoline prices in the U.S. that are nearly $4 a gallon, or power rationing in China?

Why has Global Sticks , a manufacturer of wooden ice cream sticks, moving from Dalian, China to Thunder Bay, Ontario?

Higher prices are supposed to encourage more world supply. It’s standard textbook economics. But what happens when instead of export-oriented global firms, it’s governments that control supply. They may not respond to price signals the same way as profit maximizing companies. n fact, they may respond in the exact opposite way.