The coincidence of oil and financial crises can be traced back historically to the time of the industrial revolution. Our story begins, more modestly, with the dramatic increase in crude-oil prices in 1973 – an episode that continues to live as a vivid memory in Western and Middle-Eastern imaginations alike. For the former, this memory serves as a constant reminder of Western economies' vulnerability to market and geopolitical forces, especially in the Middle East. For the latter, it feeds nostalgic yearning for the moment when the Organization of Petroleum Exporting Countries (OPEC) cartel's market and political power reached its zenith.

As the world continues to struggle with the task of containing the economic, financial, and geopolitical ramifications of the financial crisis of 2007–9, it is important to recognize this and the previous 1970s crisis, as well as a number of others, as phases of a larger ongoing cycle. To paraphrase Mark Twain, rumors of the death of the business cycle – as well as the energy-price cycle, the financial boom-and-bust cycle, and the cycle of Middle-East geopolitical turmoil – have all been greatly exaggerated. In this book, we study the interaction of the global business cycle with these closely related energy-price, financial, and geopolitical cycles. We show that this super cycle is endogenous and self-perpetuating.

Like the human ego, this cycle is most dangerous when we assume that we have tamed or killed it.