Economic Optimism? Yes, I’ll Take That Bet

[groovedaddy]

Five years ago, Matthew R. Simmons and I bet $5,000. It was a wager about the future of energy supplies — a Malthusian pessimist versus a Cornucopian optimist — and now the day of reckoning is nigh: Jan. 1, 2011.

The bet was occasioned by a cover article in August 2005 in The New York Times Magazine titled “The Breaking Point.” It featured predictions of soaring oil prices from Mr. Simmons, who was a member of the Council on Foreign Relations, the head of a Houston investment bank specializing in the energy industry, and the author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.”

I called Mr. Simmons to discuss a bet. To his credit — and unlike some other Malthusians — he was eager to back his predictions with cash. He expected the price of oil, then about $65 a barrel, to more than triple in the next five years, even after adjusting for inflation. He offered to bet $5,000 that the average price of oil over the course of 2010 would be at least $200 a barrel in 2005 dollars.

I took him up on it, not because I knew much about Saudi oil production or the other “peak oil” arguments that global production was headed downward. I was just following a rule learned from a mentor and a friend, the economist Julian L. Simon.

http://www.nytimes.com/2010/12/28/science/28tierney.html?nl=todaysheadlines&emc=a210

[geckosfeet]

1. Me too.

Economic Optimism? Yes, I’ll Take That Bet

You can always make news with doomsday predictions, but you can usually make money betting against them.

[dmallind]

2. at least somebody got a doomer to put their money where their mouth is

I keep trying, but so far no DU doomers have had the courage of their convictions like Simmons had. Of course the fact that he is apparently now short $5000 dollars (which of course were supposed to be useless to some on DU by now as we reverted to a barter system based on food and ammunition ;)) may further reduce my chances of fleecing some clueless sheep of his ilk.