Photo owned by maveric2003 (cc)What caused the latest world economic crisis? Toxic Credit products? Sub-Prime Mortgages, Galway races tent, ninja morgages, Massive bonuses to executives? No none of these were the cause of the latest crisis they were simply the cliffs we were pushed off. But they were not the push that sent us over the edge. No the cause of the crisis was Richard Arens. So who is Richard Arens?

Back in January Richard Arens became the first guy to buy oil over 100 dollars a barrel. In July oil hit $147 dollars a barrel. If we look back over the progression of the credit crisis we see that it got serious around that time. Oil caused a decrease in economic growth in America, this meant that large jobs cuts were feared. This then fed into fears that sub-prime mortgages might in fact not be very stable. Then people looked closely at the state of the banks and found that they were in fact all incense fucked.

So since then all the talk of political talking heads has been about the need to cleanse the system of all the finaciall problems. Offereing massive bailouts, nationalisation and guarantees. But little has been talked about what pushed this all off.

Now the sub-prime mortgage problems have been around since Richard Arens did his $100 oil deal but the economic effects of increasing price of oil have brought the edifice down. This really shows the world how vulnerable we are to energy prices.

So what can the Irish government do to solve this? Well first off probably not a lot. This crisis started in America and what ever we did we probably would be in trouble anyway countries without our massive construction boom are also bailing out banks but the amount of exposure we could of have is off course debatable.

Once the financial systems are “cleansed” and after a few years we will again return to normality. That of course depends on energy. For an economy to boom one of the required items is cheap and readily available energy. And although oil is slipped at the moment to around $90 it is unlikely to stay that low in the event of a new boom. Especially since Brazil, China and India are joining the party. So that means that to rejuvenate the economy we need to be looking at the energy solution.

Our first boom had much to do with our low taxation making Ireland a good cheap place to do business. However now that is no longer the case, other countries are cheaper and just as good as us. So we need to make ourselves cheap in another fashion and in a world of high energy prices. There is clearly one way to do that. And that is cheap energy.

To do this we need to look at Nuclear energy and renewable energy and we need to start now. Alas I think talk of corporate salaries and ninja mortgages will dominate for the foreseeable future.