Phoenix and Las Vegas, located in two of the most arid spots in the world, would be impossible without cheap oil. It took cheap energy to make the massive water projects and interstate highway system economically feasible, never mind universal air conditioning. And now the cheap oil is gone, with no replacement except nuclear that will come near replacing it- and even nuclear does not have the versatility and portability of oil.

As we head down the slope of permanent depletion, these cities will become substantially unlivable, and things like good farmland, regular rainfall, and easy access to water transport will become important once more. I predict that the desert cities will start to disinvest and depopulate rapidly within 15 years, along with the outer suburbs of my city (Chicago) and other large metroplexes; and that places like St. Louis, Memphis, Detroit, Cincinnati, Cleveland, and other medium and small midwestern and eastern burgs will be attractive. They will be even more attractive if they give up their cargo-cultish fixation on dying, obsolete old industries, such as the Detroit auto industry, and grapple with the fact that all of that is completely over and never coming back and that they need to rebuild their economies on a new template.

Don’t bet on any of the major trends of the post-WW2 era continuing, for they are all predicated on prodigious waste of resources and reckless debt creation.

But in all seriousness, those are some scary statistics. I’m almost afraid to be in Socal for the Option ARM fallout… although in a way it’s almost fascinating to watch it unfurl like an impending car accident.