VHeadline guest commentarist Andrew McKillop writes: We can note that only about 10 years ago, 'New Economists' could still proclaim oil and gold as Sunset Commodities. Resource depletion, let alone climate change never featured in the stock of Adam Smith slogans from about 1760 -- reworked as wildly intelligent one-liners by leading edge 'New Economic intellectuals' for a decade or two.

As they claimed (and a few survivors still claim), if we run out of something someplace, and maybe ruin the environment doing so, we can move somewhere else and practice exactly the same slash and burn -- the Earth is big.

All you need is market freedom, a few Ponzi schemes, public and political tolerance of this anarchic way of running the economy, and rejuvenated capitalism will deliver, especially those old-time commodities like oil, metals or even food, which we hardly need any more, even if the Chinese and Indians haven't yet found this out.

Periodically, this eccentric and fact-free belief in 'permanent abundance' of all primary products surfaces in official print, for example the December 10, 2008 report of the World Bank: Global Economic Prospects 2009. This report not only claims that mineral resources like oil, gas, and the metals will remain 'abundant,' but so also will food commodities. Making sure not to join up the dots by explaining the thermodynamic reality that only cheap energy can beat resource depletion, the World Bank likes to imagine windmills and solar collectors (last year it was biofuels) can get us out of any problem. To be sure, the Bank adds, we might perhaps have a temporary crisis or two like the present !

Taking gold, no underground industrial-scale gold mine on earth now operates at less than 3.5 kilometres depth, on orebodies with a clarke (richness) of better than a few grams per ton.  World gold production is almost each and every year behind demand and consumption. If there is a sudden upsurge in demand because the US dollar is given Obama-style benign neglect, after 8 years of Bush-style benign neglect, gold prices can only go North in a very, very serious way.

As for cheap oil which has returned, briefly, to signal that all asset classes are in deflationary rout at this moment (Q4 2008) the ASPO 7 conference in Barcelona, Spain (October 2008) provided sobering and very coherent, convergent data on probable future supply trends. By 2010 it is likely the 'Peak Oil plateau' of around 89 Mbd (including about 1.4 Mbd "well-to-wheel" losses in production, transport, storage) will break. Usual press estimates of world total oil production (ranging around 87–88 Mbd) do not include the loss factor -- some of which is counted, and some not. The impacts of this annual 'injection' of around 70 million tonnes of crude and products into the world's oceans and land ecosystems of course does not concern excited oil price forecasters, but current oil demand of about 87.5 Mbd leads to production needs likely exceeding 88.5 Mbd. ASPO estimates, and a few oil industry heavyweights like the CEO of Total Oil SA, place the short-term sustainable maximum for total production at no more than about 90 Mbd.

After the Peak Oil plateau, from 2010, we will move into the post-plateau down-slope in world oil availability. Average annual long-term loss will likely run at about 4% by volume, and about 6% annual for export volumes, specially due to<