Worse case scenario or most likely?

There are two aspects to this book, or perhaps I should say two parts. Part one is a warning about the energy crisis to come. Leeb feels that unless we do something quickly in terms of building an infrastructure for a new source of energy not based on fossil fuels and certainly not based on oil, which is at or near its half-life, we may face the collapse of civilization. That's the worse case scenario. Part two is advice to investors on where they should put their money as the oil patch runs dry.

In a sense this is an update of The Oil Factor: Protect Yourself--and Profit--from the Coming Energy Crisis (2005) which Leeb wrote with Donna Leeb. The message is the same although his projected price of oil has gone up from $100 a barrel to $200 a barrel. With oil topping $65 a barrel in the interim, it looks as though Leeb may very well be right in his prognosis.

I did not note this in my review of The Oil Factor, but Leeb's PhD is in psychology. He edits a newsletter "The Complete Investor" and is obviously an expert on matters financial. I think the combination of hard-headed economic insight that he brings to the subject and his understanding of human psychology, especially the psychology of the herd, is part of what makes this and his previous book so interesting and valuable. Furthermore, Leeb is an unusually lucid writer (with help here from Glen Strathy). His clear prose makes the pages turn easily and he leaves no doubt about where he stands on the energy issues.

However, where he stands politically is deliberately unclear. He makes a point of not getting political in this book. Although it must be the case that he has little patience with the energy policies of the present administration, he never really directly says anything bad about George W. Bush, at least not by name or title. However, a question like this from page 38 gives us a hint: "Why do societies not replace shortsighted, closed-minded leaders with others who are willing to make tough decisions for the greater good?" On page 62 he makes this comment: "...we believe the coming oil crisis will be the biggest test our civilization has ever faced, thanks to a shortsighted leadership that has taken few steps to prevent it."

Leeb believes that bad decisions made by our leaders both governmental and corporate stem from what he calls "groupthink"; that is, the human propensity to go along with the majority opinion. He recalls some rather infamous psychological experiments that show people will actually inflict torture on others if they think that's what an authority figure wants, or will disbelieve their eyes if their eyes go against the majority opinion. His central message is that we have to look at the facts and see the long run if we are going to make the transistion from an oil rich economy to an economy without oil.

He believes it can be done, but that it will be difficult. It estimates that the cost of retooling our energy infrastructure to live without oil will cost in the neighborhood of one trillion dollars. He calls this an investment on the scale of the cost of World War II (p. 141), and he believes it is just as necessary. He warns that the coming oil shortage could lead to nuclear war as the various countries become desperate for energy. (p. 128)

His investment choices are much the same as in "The Oil Factor": buy energy stocks, buy gold, and prepare for double-digit inflation, perhaps on the scale of what we had in the seventies and early eighties. I did a quick check of six specific stocks he recommended (MMM, KO, INTC, PG, TXN, and GE) and three are up and three down since the book was published. Gold however is up 20% and the oil company stocks up almost as much.

Bottom line: very much worth reading and digesting and comparing to other points of view.

--Dennis Littrell, author of “The World Is Not as We Think It Is”

Brief overview and insights on the important of energy and its replacement that covers its important to economy, investment and personal contribution and planning.

The author's overall conclusions are spot-on, but like most financial advice books, this ship has already sailed. He spends some time recommending that everyone go back to 2004-2005 and read and follow the advice in his first book. I found this both amusing and frustrating.

Best read for anyone who wants to know how to survive in this economy.

not a good prognosis if things don't change in regards to leadership and their priorities

I read this a few years ago and it has some profound impacts. He also mentions how international policy will change and how some of our stubbornness won't change.

Good read, but a little sketchy on the details. Sometimes he seemed to contradict himself (inflation vs. deflation), and at times was a little too extreme in his outlook.

This is the strangest investment book I've ever read. The authors spend about 170 pages (out of 196) explaining why the economy may collapse. The premise is that Peak Oil Theory is correct, that the supply of cheap oil is dwindling, and as a result, society as we know it may change drastically.

The weird part is that after each gloom-and-doom scenario they paint, the authors provide a glimpse of hope. For example, they mention that the shortage of cheap oil may cause a new age of barbarism and lawlessness that will result in a lot of people being killed as a relatively small number of strong clever people take what they need to survive... but we'll show you how to profit from it!

It's not quite humorous, but it comes close. The investment advice seems solid. After they spend 170 pages explaining how they were right about the price of oil (predicting further that it could hit $100 by the end of the decade, which of course it has) and how energy affects everything and which historical trends to learn from, and so on, I'm inclined to trust their advice.

So when society crumbles and we all go back to living a pastoral existence on an Amish-style farm near a small town, I'll be able to sleep on a huge pile of hundred dollar bills.

International reads are hard to come by in Beijing, picked this up in the Singapore airport recently. It seems promising...

Pretty interesting to read this over 5 years after it was written and realize his hypothesis about oil (at least over $100 a barrel) has happened.

Overall - thought provoking.

Great book for outlining what's currently happening with oil prices. This guy predicted it coming for the last 10 years. The book was written in 2006 when oil was $30 a barrel.

The subtitle of this book is "How You Can Thrive When Oil Costs $200 a Barrel." Leeb, who holds PhDs in economics, math, and psychology, presents a bleak but believable picture of a world in which oil is no longer available to the average person. He discusses the world's depleting oil supplies, the world-wide dependence on oil, and the consequences of not pursuing a replacement power source. It is a pretty frightening scenario. This books was written in 2005, and his prediction of skyrocketing oil costs was validated by last summer's spikes. His discussion of "group think" in regards to both the environment and economics was especially interesting to me. The book includes an appendix of tips for investing in what is sure to be a changing world. While I don't have either the science or the economic background to totally understand all he said, there was plenty here to make me think and re-evaluate my views.