The markets probably teach all of us some lessons every day. Take the lesson of supply and demand. If demand drops then supply increases. With this, costs come down thus increasing demand. And so on. As teachings describe it to us.

Let’s look at oil. Since 2008 the price of oil has dropped then stagnated. Contrarily to this the supply continues to increase. Are people getting smarter and switching to renewable energy? Well no. Demand for oil continues to climb at 0.7% each year. Simply put the oil producers want their profits now. That is, they keep increasing supply with the expectation that demand will follow their lead. This doesn’t really follow the teachings.

With oil (and coal and natural gas) being non-renewable energy sources then eventually producers will have no more supplies to sell. This also challenges the teachings. That is, even if demand increases or remains the same. Even if prices go astronomical. There will be no supply to balance it. At whatever cost. What do the markets teach us about this?
Pioneering Spirit

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