DrumBeat: January 12, 2008

Iraqi oil output increases in December

Iraq's average oil output rose again in December, marking a roughly 30 percent increase since the start of 2007, the country's oil ministry said Saturday.

The average output last month reached 2.475 million barrels per day, according to figures released by the State Oil Marketing Company. In January 2007, output was 1.9 million barrels.

Oil Industry Defends Stance on 'Hot Fuel'

An attorney for the oil industry said Friday that it isn't fraudulent to sell "hot fuel" because it is legal to sell gasoline and diesel in the U.S. that's not adjusted for temperature.

That argument was made in a Kansas City, Kan., federal courtroom as the industry sought to quash more than 40 lawsuits seeking damages for consumers who have bought fuel hotter than the 60-degree industry standard. The hearing at U.S. District Court in Kansas City, Kan., was to hear arguments about the oil industry's motion to dismiss the suits.

The Economic Outlook

NEWSWEEK: Is it surprising to you that oil has reached $100 per barrel at a time when demand in the United Sates—the world's biggest consumer of oil—is slowing?

Henry Paulson: Oil has been at a level that has seemed high for some time. I think what is noteworthy is that the economy has done as well as it has. We're using oil more efficiently, and it has a smaller overall impact on our growth. A big part of the oil story has to do with global demand and another part is the underinvestment in a number of the countries that have essentially nationalized oil production and are not managing resources efficiently.

Aid And The Unraveling Of Pakistan

Democracy suffered a string of setbacks in 2007, many thanks to oil. Gushing oil revenues helped Vladimir Putin consolidate authoritarian rule in Russia, Hugo Chávez expand populism in Venezuela and Mahmoud Ahmadinejad confront the West. All the while, an analogous force was at work in Pakistan. For more than 50 years, Pakistan has reaped its own unearned manna, which has filled its coffers and kept its fragile state afloat. In this case, however, the money didn't come from the ground, but from massive military and other forms of aid, largely from the United States, China and Saudi Arabia. Yet while the source may be different, the impact of all this cash on Pakistan has been just as destructive as oil wealth elsewhere: bloating the military and creating a culture of violent instability, in which assassinations like that of Benazir Bhutto are sadly inevitable.

Telecommuting a bust for those left in office

Telecommuting may boost morale, and cut stress, but it can have the opposite effect on those left behind in the office, according to a new study.

When a number of their co-workers toil away from the office by using computers, cell-phones or other electronic equipment, those who do not telecommute are more likely to be dissatisfied with their job and leave the company, said Timothy Golden, a management professor at Rensselaer Polytechnic Institute.

Foreign investors ride in to rescue Citi

Saudi billionaire-Prince Alwaleed bin Talal and a team of Chinese investors may ride to embattled Citigroup's rescue, according to a report from The Wall Street Journal.

Chinese investors, including China Development Bank, will reportedly contribute around $2 billion. It was not known how much would be invested by Prince Alwaleed, but the Journal calculated that his stake in the bank would likely remain under 5 percent, but that even a 1 percent stake would be a vote of confidence.

Kazakh Government Ready to Cancel Kashagan Deal

Kazakhstan's Energy and Natural Resources Ministry is examining the possibility of severing the North Caspian project production-sharing agreement (PSA) with the international Agip KCO consortium led by Eni SpA.

Underwater oil discovery to transform Brazil into a major exporter

While some of the world's largest oil producers, including Mexico and Iran, are struggling to remain exporters, Brazil is moving in the opposite direction. A huge underwater oil field discovered late last year has the potential to transform South America's largest country into a sizable exporter and win it a seat at the table of the world's oil cartel.

The new oil, along with refining projects under way by Petrobras, the national oil company, could eventually make Brazil a larger exporter of gasoline as well, adding to supplies in the United States and other countries where it is all but impossible to build new refineries.

Don’t Worry The Price Per Barrel Is $100!

What that suggests also is there is a new hardnosed approach to development dominated not just by higher oil prices but higher prices generally that states are prepared to live with regardless of the social damage it may create in different parts of the world because it is not simply a question of supply-and-demand as there is no global shortage of oil that is leading to higher prices.

Nigerian Group MEND Raises Alarms with Tanker Blast

The attack signals a sharp escalation in violence against the energy industry in Nigeria by the Movement for the Emancipation of the Niger Delta, which has waged a two-year campaign in Nigeria's crude-producing region to rest more control of the area's oil resources.

MEND's claim, if true, that it got help from militants working for oil companies and from Nigeria's military and secret service would raise a huge problem for companies like Royal Dutch Shell PLC (RDSB.LN), Exxon Mobil Corp. (XOM) and other firms in operating in Nigeria, the world's 11th biggest oil producer. MEND made its claims to the media in a statement.

China defends economic ties to Sudan, says development is key to achieving Darfur peace

A Chinese special envoy described the true cause of conflict in Darfur as internal competition over resources, saying Thursday that activists should not try to shame Beijing into dropping its support for a Sudanese government accused of carrying out genocide.

Good, not so bad news from Iraq oil

Iraq ended a deadly year by steadily increasing oil production, but about $1.4 billion in revenue was taken by the still booming black market.

Around 21.5 million barrels of oil were reported pumped but not accounted for in exports, storage facilities or refineries, according to the global energy information firm Platts.

Toward A Post-Oil Community

There are some puzzling aspects to the fact that it is hard to put together a cohesive group in terms of dealing with future issues. While politicians, business leaders, and the news media all have coherent, cohesive social groupings, the sort of people who intend to navigate the Dark Ages are scattered to the four winds. Obviously something more is needed, some concept of community, even if "doomers" can be as factional as Marxists.

Yet we should not despair about the apparent lack of control. In the fifth century it was the Romans who were disciplined and organized, but it was the barbarians who won. The Internet was purposely designed as a decentralized network that could withstand nuclear attack. Today’s highly centralized cities can be defeated by a half a dozen terrorists. Decentralization will allow future communities to survive.

3-wheeled Aptera aspires to car-pool lane

The Aptera, with a range of 190 miles between charges, is intended to sell for around $30,000.

It's an example of how high gas prices are encouraging entrepreneurs to give the car business a try. From electric high-performance roadsters to low-speed runabouts, start-ups are trying to take advantage of interest in alternative technologies.

Russia Environment Watchdog Head Resigns

The head of Russia's environmental regulating agency, Sergey Sai, has tendered his resignation, a person close to the government said Friday.

...Sai's possible resignation opens the way for his deputy Oleg Mitvol, a man known for his repeated regulatory threats against foreign resource companies.

N.H.: Pushes Adoption of Energy Policy

New Hampshire's political leaders are getting behind a 10-state regional effort to cut greenhouse gas emissions to preserve the state's climate and way of life.

Gov. John Lynch told a House committee Thursday that New Hampshire will benefit environmentally and economically if it approves the Regional Greenhouse Gas Initiative known as RGGI.

The Pros and Cons of 8 Green Fuels

After years of talk, rising oil prices—combined with global-warming concerns and a disdain for foreign oil—have finally set the stage for breakthroughs in alternative fuels. To see how the hottest new technologies stack up, click on each fuel for a rundown of its attributes and flaws, or click on the topics on the left to see how various fuels compare.

Challenging the myths of energy security

The global oil market is not falling apart. Despite the move towards greater government control, oil is still traded in a globally integrated, highly liquid market. Accessing this market requires no diplomatic or military capacity. The world economy does face a mid-term risk of liquid fuel scarcity and a short-term risk of oil supply disruption, but there is nothing we are ill-equipped to deal with. The answer to the first is higher taxes on oil, tougher fuel-economy standards and increased spending on alternative technologies. As for the higher risk of supply disruption, a new wave of investment is needed in emergency storage, a move the US has already embarked on.

Expose on New ‘Cold War’ over Resources

A new book, “The New Cold War: The Battle for Natural Resources” (“Der neue Kalte Krieg. Kampf um die Rohstoffe” in German) speaks of a new global conflict over energy resources.

The authors, who are reporters at Germany’s leading weekly magazine Der Spiegel, say energy superpowers use underdeveloped countries as proxies, letting them fight under their influence to the latter’s detriment. Energy superpowers are not countries with abundant resources, but those that can decide energy supplies. Underdeveloped countries with rich resources do not benefit from their resources, as their corrupt authoritarian governments collude with powerful countries and allow their people to starve.

The authors call this “the curse of natural resources.”

Uzbek Gas Hike Leaves Neighbours In The Cold

The economies of Central Asia’s two poorest states are reeling after Uzbekistan raises the price of gas again.

Pakistan: PM urges people to participate in energy conservation efforts

Caretaker Prime Minister Mohammedmian Soomro has appealed to the nation to participate in national energy conservation efforts to help confront the challenge of energy shortage.

It is the need of the hour, as we have to share national resources justly and keep up the pace of economic progress, he told a meeting he chaired to review the energy situation in Pakistan and examine measures for the conservation of electricity, gas and fuel.

UK: Average family faces £500 fuel surcharge for long-haul holidays

Families flying abroad face paying a fuel surcharge of more than £500 as airlines hike their prices again.

The latest increases are the result of rocketing oil prices and a chronic shortage of aviation fuel.

Keep your utilities from getting disconnected

Mainers who find it hard to make ends meet have new protections from disconnection of lights and electric heat this winter, according to state Rep. George Hogan (D -Old Orchard Beach).

“Many of us have read reports of the hardships families are facing in the wake of both record oil prices and an early start to winter weather,” said Hogan. “These new rules will help to make sure people aren’t put into a dangerous situation.”

Assistance program overbooked as fuel prices soar

Penquis is receiving urgent calls from people who have run out of oil and do not have money to buy more.

"What we’re finding, too, especially for the emergency money, is that a lot of the people we’ve served this month are people who have already received their fuel assistance [LIHEAP] money and have gone through it," Giosia said.

UK: Energy solution is in the balance

Britain has a major energy crisis looming and tough decisions are needed that balance cost and supply with environmental considerations.

Energy panel changes tune on mandatory control of energy

In an about-face, the California Energy Commission plans to give customers final control over the energy-saving thermostats that are to be required in new homes, Claudia Chandler, the commission's assistant executive director, said Friday.

Can The Internet Save The Planet?

Solar arrays and wind farms grab all the green technology attention, but the Internet is quietly providing ways to save energy.

Rising development costs push up oil futures curve

NEW YORK (Reuters) - Rising costs for oil companies are driving up prices for crude oil futures through 2016, keeping supplies struggling to match growing oil demand outside the United States.

..."The hopes for a flood of supply in the next several years appear unlikely to happen, particularly when looking at rising demand from the emerging-market economies," said John Kilduff, senior vice president of MF Global.

Factoring in $100 oil

A barrel of oil costs nearly $100 after trading for little more than half that price early last year. Profits in the energy industry are soaring, right?

Not at all. The best guess of analysts studied by Thomson Financial is that earnings for U.S. energy companies grew by just 6 percent last year. Estimates for companies elsewhere are harder to find, but Citigroup, citing external sources, expects 5 percent earnings growth for 2007 for the sector globally.

Economist Predicts $150 Oil: Political Peak Oil Setting In?

Rubin argues that costly delays will continue to mark the development of newly tapped oil reserves, like oil sands, oil shale and new deep-water deposits. He argues that violence is likely to disrupt supply, or spark fears enough to drive up the cost. And he argues that extreme weather will interrupt the flow of oil from important regions.

In other words, a combination of scenarios that a Peak Oil analyst would embrace – namely, moving toward reserves that are expensive to exploit because the cheap and easy crude is being depleted – and confounding political and environment circumstances that upset the flow of the remaining cheap stuff. We call that political peak oil. Rubin, it should be noted, embraces the peak oil theory, and believes we've already hit the peak.

Air conditioner census to combat power cuts in Argentina

The government announced an air conditioner census, house by house, since record sales have been blamed for part of the problem.

Basically the voluntary program calls for changing the traditional light bulbs for the low consumption units, moderating the use of air conditioners and restrictions to street and roads illumination, all of which theoretically should help the county save between 8 and 14% electricity consumption.

Energy crisis in Dagestan leads to road-blocking

APA cited Russian sources as saying protesters blocked major roads on Shamil Avenue, demanding electricity and water.

They called for resignation of Dagestan President, Makhachgala Mayor and prosecutor general. Police and special troops have been sent to protest sites.

UK's coal output falls to pre-industrial levels

Coal production in Britain has fallen to its lowest level since the industrial revolution, according to data from the Office for National Statistics.

The ONS's index of production showed that the coal industry recorded its worst ever reading in October, at 42.9 (with 2003 representing the base index level of 100). Annual production is set to fall below 15 million tonnes, a level last seen 200 years ago. Production peaked in 1913 at 287 million tons. The ONS said that UK electricity generators have been turning to coal as the price of natural gas has climbed even more steeply, but that demand has been met by imports from Russia, Australia and elsewhere. Foreign coal accounts for two thirds of UK consumption.

What's the role for coal in Iowa?

Harvesting every cornstalk from the approximately 280,000 acres of corn in Marshall and Black Hawk County would supply only a very small percentage of the feedstock for these plants. That's a huge pile of cornstalks with relative little energy value. What about transportation and storage costs? What about the loss of soil fertility, reduced crop productivity and increased soil erosion? If corn-stalk residue is a viable energy source, the conversion will most likely be at the farm or local level, not at a monstrous power plant.

See this 42-page peak oil analysis – Wow!

Chris Skrebowski, Trustee of the Oil Depletion Analysis Centre and Editor of Petroleum Review, Energy Institute, London, has written a 42-page peak oil analysis entitled “Megaprojects update: Just how close to Peak Oil are we?” [PDF]

Much of the arguments are similar to those presented by Matt Simmons, founder and chairman of the world's largest energy investment banking company, Simmons & Co. International (see interview on RI). But some of the charts, like the one below, show some interesting numbers.

(This is Chris' presentation from the ASPO conference in Houston.)

High oil prices? You ain’t seen nothing yet

“Sadly, the United States of America, the world’s most advanced economy, has no fuel gauge of any sort to indicate when our useable spare supply of crude oil and (refined) products is nearing empty. And the stock data of the USA is the best published oil data of any country,” Simmons said.

“None of this would be alarming if ‘peak oil’ was decades away. But, this is a fool’s dream.”

Nigerian fuel tanker blast kills at least 30

PORT HARCOURT, Nigeria (AFP) - At least 30 people were killed and shops and vehicles destroyed Saturday when a fuel tanker exploded in Port Harcourt, the hub of Nigeria's multi-billion-dollar oil industry and a target of attacks by militants.

Nigeria: Oil Splits Two Ijaw Communities

In the beginning prior to the sixties, the people of Odimodi and Ogulagha communities, both oil-rich Ijaw towns in Burutu local government area of Delta state banqueted together. Their young men and women walked down the aisle, they shared the same cultural heritage and time-honored values.

That was before the coming of oil, but, since 1968, 40 years to be specific, when oil companies, starting with the Shell Petroleum Development Company (SPDC) stepped into their shores with the establishment of the Forcados Terminal and other facilities, as well as the Nigeria Agip Oil Company (NAOC) with its flow station and other installations, the five-letter word, peace, had fled from the two communities. It has been claims and counter claims, squabbles, hostilities and bloodshed. For Odimodi, which, in Ijaw language, means pond of fishes, it has been nothing but pond of troubles.

Russia LUKOIL sees net profit rising 7 pct in 2007

Russia's second largest oil producer LUKOIL expects its net profit to reach $8 billion in 2007, a 7 percent rise from the previous year, the company's chief executive Vagit Alekperov said on Saturday.

Iranians urged to conserve gas despite cold snap

"The second wave of cold weather has arrived, there is a desperate need to consume less natural gas," Oil Minister Gholamhossein Nozari said on state television.

The minister said gas production had risen to a record level of 460 million cubic metres per day, up from around 450 million cubic metres, the figure cited by an official in recent days.

China imports record 163 mln tons of crude oil in 2007

China's crude oil imports rose 12.4 percent in 2007 over the previous year to a new record of 163.17 million tonnes, according to customs figure.

Crude oil imports for 2006 was 138.8 million tonnes, representing an increase of 16.9 percent from the previous year. The exports, however, fell 38.7 percent year-on-year to 3.89 million tonnes last year, according to the General Administration of Customs.

Venezuelan oil reserves will be world's largest by 2009

Venezuelan President Hugo Chavez has said that by the end of 2009, the country will have 313 billion barrels of certified oil reserves, the largest in the world, Spanish news agency EFE reported on Saturday.

Chavez told lawmakers on Friday that the country's oil reserves stand at 100 billion barrels, including 20 billion "certified in the last two years through a strict international process".

Saudi cannot be launchpad for Iran attack

A leading Saudi newspaper on Saturday ruled out any attempt by the United States to use the oil-rich Gulf kingdom as a launchpad for a possible war on Iran over Teheran’s disputed nuclear programme.

Two days before a visit to Saudi Arabia by US President George W. Bush, the pro-government daily Al Riyadh said: ‘We refuse to be used to launch wars or tensions with Iran.

California Seeks Thermostat Control

SAN FRANCISCO — The conceit in the 1960s show “The Outer Limits” was that outside forces had taken control of your television set.

Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or down through a radio-controlled device that will be required in new or substantially modified houses and buildings to manage electricity shortages.

Thai government to import palm oil

Thailand plans to import 60,000 tons of palm oil this month, either from Malaysia or Indonesia, to ease a domestic shortage of the commodity, which is used both for cooking oil and as bio-fuel, news reports said Saturday.

Yangyong Phuangrach, director-general of the Internal Trade Department, said the imports were necessary as a short-term measure to ease a domestic shortage, The Nation newspaper reported.

Scientists to discuss how global warming affects diseases

Global warming in Europe could mean a host of potentially fatal diseases become more prevalent, a leading scientist warned Friday ahead of a major conference on the subject.

ADB to help SE Asia find ways to cut greenhouse gases

The Asian Development Bank said Friday it will conduct a yearlong study on what six Southeast Asian countries can do to cut their greenhouse gas emissions.

The 900,000 dollar study, funded by Britain, will estimate the costs of reducing the emissions and look at ways Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam can work together to mitigate the impact of climate change, the Manila-based bank said in a statement.

Science chief: greens hurting climate fight

The scientist credited as being the first to convince Tony Blair of the urgency of the climate crisis has accused green activists of being Luddites who risk setting back the fight against global warming.

In an interview with the Guardian today Sir David King, who stepped down last month after seven years as the government's chief scientific adviser, says any approach that does not focus on technological solutions to climate change - including nuclear power - is one of "utter hopelessness".

ELM in Action: Keeping the home team supplied with energy
Oil Ministry ready to weather frost
TEHRAN (PIN) – Iran’s Interior Minister Mostafa Purmohammadi said that Oil Ministry was prepared to meet domestic household gas need during the new period of freezing weather.

On Jan. 8, Iran stopped all natural gas exports to Turkey as worsening weather boosted domestic demand, forcing Ankara to use as much as a third of its stored fuel.

The following day, Turkey halted the flow of Azeri gas to Greece because of the suspension of gas supplies from Iran.

Adding to Turkish anxieties, Russia, Turkey’s other main supplier of natural gas, also reduced exports, citing severe weather.

Energy-poor Turkey imports almost all its natural gas from Russia and Iran, which powers half of its power generating stations. As Turkey’s economy has expanded, gas consumption has risen accordingly. This winter’s usage has soared to as much as 140 million cu m, a 17-percent increase over the previous year.

As with the Ukraine dispute of two years ago, all of this started with Turkmenistan's attempt to get higher prices from Iran for its natural gas. One wonders about the relative roles in this "shortage" of the cold winter and some of the countries using the situation to their advantage. Russia, for instance, is happy to take that gas that would normally be delivered to Greece and Turkey on long-ago negotiated contracts, and sell for a higher price.

Steve LeVine, author
The Oil and the Glory

An economist would expect to see available natural gas supplies auctioned off to the highest bidders. Regardless of the reason for the supply/demand imbalance, that is not what happened. There was pretty much an instantaneous middle finger response to the importers. The exporters literally elected to keep the home fires burning.

A year or two ago, we saw the same thing in Europe when countries on the Continent declined to export all of the natural gas to UK that the UK wanted, leading to vastly higher prices in UK than on the Continent, which again violated economists' delicate sensibilities.

"An economist would expect to see..."

Hmmm...I thought most economists expect to see, on occasion, what they would call market failures caused by politics. History would include, for example, the 1973 Nixon soybean embargo, the 1975 Ford grain embargo, the 1980 Carter grain embargo, another embargo when bread was hitting $1 a loaf or maybe it was one of those, and countless other such events in many places. I can't imagine why anyone is shocked...

Of course, if an economist is thinking prescriptively, he or she might be right about Europe. By embargoing, Continental countries kept their prices artificially low, reducing both supply and efficiency incentives within their borders. This was not just a mere violation of delicate sensibilities - since EU countries incessantly preach from the very highest of high horses about burning less hydrocarbons, it was more than a tad hypocritical. Not that it was any more hypocritical than jetting tens of thousands of tourists and hangers-on to world jamborees to tell everyone else to stop consuming. Not that hypocrisy is the least bit unusual in this wicked world. Not at all...

My favorite forward looking statement, by the Economist Magazine, in August, 2006:

Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields, so will be able to pump at the present rate for about 70 years even if it never discovers another drop of oil.

It was remarkable that the Economist would make a 70 year projection without even considering the effect on net exports of increasing domestic Saudi consumption. Based on EIA data, Saudi Arabia showed a +5.7%/year increase in consumption from 2005 to 2006. At this rate, the long term net export decline rate (2005 to 2030) would be about -10%/year--assuming flat production at 11 mbpd (total liquids), with no decline. The year to year net export decline rate would start out slowly and accelerate with time. For what it's worth, at +5.7%year, the Saudis would be consuming 108 mbpd in 2075, which seems “somewhat” unlikely, since this is about 40% more than current total world liquids production.

In any case, what is interesting about the Turkey, Russia, Iran situation is that Turkey--a richer country (based on most recent Nationmaster data)--is being forced to reduce consumption by two poorer countries, Russia and Iran.

I wonder how this will play out for the US versus poorer oil exporters.

WT said,
"Based on EIA data, Saudi Arabia showed a +5.7%/year increase in consumption from 2005 to 2006. At this rate, the long term net export decline rate (2005 to 2030) would be about -10%/year--assuming flat production at 11 mbpd (total liquids), with no decline. The year to year net export decline rate would start out slowly and accelerate with time. For what it's worth, at +5.7%year, the Saudis would be consuming 108 mbpd in 2075, which seems “somewhat” unlikely, since this is about 40% more than current total world liquids production.

"somewhat unlikely" is an understatement. Has there ever been a case of a nation increasing it's oil consumption 5.7% per year compounded for 70 years running? I think it would be exceptional indeed!

Look a the long view of U.S. growth in petroleum consumption:

And we are supposedly one of the worst of the "oil hogs" in the world.

The other issue is how do we define Saudi consumption? If they retain crude oil for their growing home petrochemical industry and sell the finished goods to the world deriving from that industry, they are still meeting global petroleum demand.

It is also to be remembered that Saudi consumption is starting from a relatively low base of consumption compared to the largest consuming economies (the United States, China, Japan and the EU)

The more shocking part of the Economist quote to me was "Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields..."

Do they have the statistics to back that up? Where and how large are these 70 other fields that are supposedly lying in wait to be exploited?

More proof to me that we know almost nothing about Saudi Arabian oil reserves.


If memory serves, US consumption increased at about +4%/year from 1949 to 1979.

As I have previously noted, in addition to being at about the same mathematical stage of depletion at which Texas started declining, Saudi Arabia now, like Texas in the Seventies, is responding to higher oil prices with a sharp increase in drilling activity--and lower crude oil production (relative to 2005).

It's convenient for some to paint this as a UK vs Europe politics thing, but there is more to it than that.

Typically continental utilities have different operating regulations to UK companies, the continental ones must guarantee supply for longer and keep so many days supply in reserve, unlike the UK. Since UK utilities were deregulated and thrown open to "free market", our reserves are run down while the utilities make more profit. Naturally when our utilities ask the Europeans to provide gas from reserves which we failed to keep, we get a firm non.

The UK is at the end of a long supply chain, and the primary issue of availability of supply which should be addressed by government gets buried by cheap politics.

steve, I appreciate your 'on the ground' experience added to TOD. Thank you.

Your claim is simply hilarious. Evil Russians shipping gas to Greece and Turkey under emergency conditions, what a crime! When you show that the current export disruption is engineered by Russia then come back and act like some sort of expert rather than a professional russophobe. The current export crisis affecting Turkey and Greece is created by unusually cold temperatures and hence increased consumption in *Iran* which lacks the slack to offset the 5 mcm/day cut in imports from Turkmenistan (note the small amount of gas involved). In addition, Turkmenistan exported 50 bcm to Russia in 2007 and of this 42.5 bcm was directed to Ukraine and not merely resold by Russia to the EU as you implicitly assert every chance you get.

The common thread in your claims is that Russia takes cheap Turkmen gas and resells it for a profit. This is pure unadultarated drivel. Why would Russia pay for gas it can export from its own production? Clearly the profit on its own exports is much higher. That it choses to ship Turkmen gas to Ukraine and other subsidized markets is quite legitimate, nothing morally or legally is forcing it to subsidize these markets all by itself. It is also fully appropriate for Turkmenistan to keep raising its prices until they reach Russian export to the EU levels and higher.

According to


the Turkmen exports were fully severed and 23 mcm/day is involved and not 5 mcm/day as claimed by


Anyway, Uzbekistan also cut its exports due to weather. But I suppose Russia is responsible for the weather since the cold comes from Siberia!

Americans going deeper into debt to pay their food and energy bills?

Some Debt Trends Are Good. This Isn’t One of Them.
Published: January 12, 2008

AMERICAN credit card debt is growing at the fastest rate in years, a fact that may signal coming trouble for the banks that issue them.

The Federal Reserve reported this week that the amount of revolving consumer credit that is outstanding hit $937.5 billion in November, seasonally adjusted, up 7.4 percent from a year earlier.

The annual growth rate has now been over 7 percent for three months running, the first such stretch since 2001, when a recession was driving up borrowing by hard-pressed consumers. . . .

. . . The holiday sales data indicated that consumers cut back in late 2007. But the consumer credit numbers would seem to indicate that they wound up further in debt anyway. Those are not good signs for the economy as 2008 begins.

Rather suddenly, not that it's primary season, Bush and Congress are making noises about a stimulus package. But, but, they've been spending more than the income from tax collections, etc., for decades. Looks like the U.S. "economy" is addicted to deficit spending.

E. Swanson

Well, yes, and a difference from the past is that something has changed. Every time they do a stimulus package - a.k.a. on the 'internets' a 'helicopter drop' - the dollar will tank some more and the psychologically all-important gasoline and diesel dollar prices will leap. Decades ago, the oil-import share was not yet enough to really close this nasty little feedback loop. The upcoming multi-trillion-dollar election-year giveaway of free mega-houses to irresponsible borrowers, who wished on stars and will have their dreams come true, will surely further 'stimulate' the loop.

"irresponsible borrowers" ??

That's the Rush Limbaugh meme. I think there is more problem here than a few desperate blue-collar workers and single moms who greedily thought they could improve their situations.

How about the felonious -- not to mention greedy -- white collar criminals who sold them this mess?

American workers are victims in the sense that their pensions will lose value because the trustees bought the garbage paper from the investment banks. Unions, states, etc. They sold their people out for trinkets, golf club memberships and visits to the dollar ballet.

The sub prime people that entered into the liar mortgages are co conspirators with the brokers, they well understood how each was going to make his money for nothing. They didn't think the music would stop.

The government policy of forcing banks to give loans to sub prime people or "expanding the home ownership experience" is what started the whole mess.

It forced many working people into more expensive housing in order to gain access to halfway safe schools for their children. For the most part, middle class people didn't move into upscale neighborhoods to make a buck, they just saw the degeneration of their old neighborhoods and wanted their children safe.

Government policy started the whole ball rolling and then all sorts of opportunists took advantage, but the root of the problem was left wing government policy to force banks to lend to people financially unfit to be home owners.

Note: I'm not a US citizen.

Could you give a precise reference to the government acts that forced banks to lend to unfit people? My understanding is that the major driver was the individuals wanting the loans and an inappropriate incentive structure for those doing the selling: mortgage brokers/bank staff make their monthly quota/qualify for a bonus based on how many mortgages they sell and don't get penalised for how many default after two years, with similar incentives applying to those higher up the food chain into CDOs, etc.

Certainly in the UK most of the problems have centred around incentives encouraging inappropriate selling behaviour (eg, encouraging people to fake NINJA mortgage applications). This isn't to excuse the individuals engaging in either stupid long term planning or even outright fraud, but to point out that if you give workers an incentive not to detect lies (and maybe encourage them), well, guess what? They will tend not to detect the lies. I keep waiting to see anything in the financial news about any company restructuring their bonus programs to encourage long-term goals, but I haven't seen anything yet and I don't really expect to.

The program was called HOPE, something like Home Ownership Participation for Everyone.

If you Google it there are many pages of references.

This is what started the massive lowering of lending standards, first to make unfit people qualify, and then little by little the standards were lowered for everyone. 

Just one LINK to get the feel of it, goes way back if you want to study it.

I should add to clarify.

Your understanding is correct for the most part if you just look at what happened at the end of the cycle.

What started the cycle is the lowering of standards.

That's how everything goes to hell. Look at the school system. Once anything goes away from a pure meritocracy and standards are lowered for one segment of the population, it is human nature to follow the path of least effort and pretty soon everything works to the lower standard.

This is why countries like Germany work much better, citizenship is determined by the status of the parents or mother and not by place of birth or geographic accident, and if immigrants or minorities want to live there they damn well comply with German standards. It works just as well in the military here. No one gets a break, comply with high standards, leave or be kicked out.

Your understanding of Germany is not quite correct, though the framework has been in flux for a number of years now. In part, because of how ineptly many of the challenges have been handled.

If you can prove that your parents/grandparents were ethnic German, you can become a German citizen. Which is why in my region, Russian is often heard among teenagers, because a lot of Aussiedler live here. Their citzenship had nothing to do with 'place of birth or geographic accident,' nor does it have anything with if they 'want to live there they damn well comply with German standards.' In another words, in the name of 'Germanness,' ten of thousands of people who speak no German and have no connection with Germany except that this is the place they were able to escape to after the end of the Soviet Union now live here, often supported by German taxpayers.

Ironically, many of those taxpayers are second or third generation Turkish workers, who in the past had little right to become German citizens, though they were born in Germany, were schooled in Germany, work in Germany, and pay taxes in Germany. In the mid 1990s, something like 110,000 of these Turkish-Germans applied for citizenship - something around 10,000 were approved during that same time. You may draw your own conclusions why such a low percentage of often German schooled and German born Turkish citizens were not fit for German citizenship, especially in light of the fact that according to general German belief, Turkish-Germans have no interest in German citizenship.

I can give a hint, though. It is very hard in Germany to change your name, unlike in the U.S. (If you convert to Islam, you can pretty much forget changing your name, for example.) However, I do know people who have had that happen, without any problem at all - it was when they lost their 'false' Czech name for a proper German one.

Broadly speaking, Germany is not a model for the U.S., and there is little here to emulate - edit - in terms of immigration. What is sad is watching yet another part of the Constitution die, as so many Americans (who themselves are only American citizens generally because they were born in the U.S.) now reject the idea that children born on American soil are American citizens - since that has been the only requirement for determining who is a true American citizen since the founding of the United States. Parentage had nothing to do with it, unless you live outside of the U.S., where it is possible to have a second birth certificate provided by the State Department, proving a child's citizenship to the satisfaction of the United States. (Though technically, they can never become president - just like all the children born overseas of parents serving in the U.S. military.)

As a side note - if my Germany born children do not live in the U.S. as adults (five years, I believe), and in turn have children born outside of the U.S., those children will not be American citizens. American citizenship is based on shared values and was never intended to be hereditary. It is a truly revolutionary idea, and much like the absolute rejection of torture by anyone serving their nation, something which has faded over time. Sic transit gloria.


My wife is an Aussiedler. My kids speak all three languages and have two passports US/German and could probably get Russian passports. In turbulent times when entire civilizations could collpase forward looking survival techniques and not backward looking setnimental values are needed for the individual. Not to be to cynical mind you, both my parents are naturalized immigrated US citizens and I have two passports. The Aussiedler have an interesting history:


Nach Beginn des Krieges wurden mehr als 1.200.000 Russlanddeutsche entsprechend dem Erlass des Obersten Sowjets vom 28. August 1941 innerhalb weniger Wochen unter dem Vorwurf der Kollaboration mit Deutschland aus den europäischen Teilen der Sowjetunion nach Osten – vorwiegend Sibirien, Kasachstan und in den Ural deportiert.

Familien wurden auseinandergerissen, die Menschen wurden mit Viehwaggons transportiert und irgendwo in den Steppen Kasachstans ‚abgekippt’, wo sie sich Erdhütten gruben und mit Entsetzen dem bevorstehenden Winter entgegensahen. Wieder andere wurden Kolchosen zugewiesen und mussten dort nach Überlebensmöglichkeiten suchen, die man den ‚Faschisten’ eigentlich gar nicht zubilligte. Gleichzeitig wurden ihre staatsbürgerlichen Rechte aberkannt und ihr Eigentum bis auf ein geringes Handgepäck eingezogen. Die meisten von ihnen – im Alter zwischen 14 und 60 Jahren – mussten in Arbeitslagern unter unmenschlichen Bedingungen arbeiten. Mehrere Hunderttausend – die nicht ermittelte Zahl schwankt um 700.000 – starben in dieser Zeit vor allem an schlechten Arbeits-, Lebens- oder medizinischen Bedingungen.

Tod und Verbannung [Bearbeiten]

Die Deutschen wurden der Sonderverwaltung (Kommandantur) unterstellt und praktisch zu rechtlosen Arbeitssklaven, die dann im Herbst 1941 zusammen mit deutschen Kriegsgefangenen, darunter auch Zivilisten, in die sogenannte Trudarmee(von "труд" für "Arbeit") gesteckt wurden. Unter militärischer Knute mussten sogar 15-jährige bei minimaler Ernährung und bei mörderischer Kälte Schwerstarbeit z.B. im Wald, beim Eisenbahnbau oder unter Tage verrichten. Schätzungen zufolge hat etwa jeder dritte der etwa einer Million Russlanddeutschen diese Zeit nicht überlebt.

So Stalin deported to Siberia/Kazhakstan 1.2 million German people (they lived with their own culture in villages,nonintegrated with quaint dialectts by this time not understood anymore in Germany) and 700,000 died in bitterest winter.

My wife's father's family were taken to Germany in cattle cars from Nazi occupied Ukraine (her Dad was 4 years old and the winter was bitter) by the nazis and her grandfather had to become an SS soldier which guaranteed Gulag and death after the war in Russia.

In Russia they were Germans and here they are Russians is the standard complaint. My wife as mixed blood later generation never suspected discrimination there however.

The recent controversy using young Turkish criminals as an excuse to get votes by Roland Koch in Hessen is very much a Nazi tactic although technically speaking lots of what they are saying is good in principle about a harder line to protect the population.

However when they eliminate so many judges and police over several years and favor only the rich, letting the poor(unlucky born - 6:1 rich go to Gymnasium compared to those with non higher educated parents) wallow in 3rd class schools without any hope for the future or of any job and then suggests just before elctions that the criminal foreign youth be shot against the wall. He is fishing for NPD voters and SPDs Struck is right to respond to Koch's (CDU) apology request that "He can go screw himself". Struck's had quipped that Koch was happy that an old man was beaten half to death by foreign youth so Koch could make a right wing campaign issue out of it as he is falling behind in the polls for this month's regional Hessen elections.

We agree that the rules are in flux, and you are basically conceding what I mentioned.

You just don't happen to agree with the policy.

Blood is much thicker then a piece of paper.

That some Turks were given citizenship is  due to the "flux" which really is a loosening of standards due to globalist influence. Give it time and see what happens to places like the UK and France when things get tight, they are going to have a huge 5th column problem just like the US.
Are you in Germany because you know they will do much better when TSHTF because of past policy? While trying to argue the opposite? LOL

One half of my family comes from Prussia, where in the East depending on the day of the week it was Königsberg or Kaliningrad. The point is that their blood is German and that is why they were given citizenship.

Those darn left wing Republicans.
That darn lefty George W. Bush.

To paleo-conservatives and some other factions on the Right Mr. Bush does not act like a conservative. He has expanded entitlements (e.g. the Medicare drug entitlement), signed big pork barrel bills into law, and done other things with spending that put him in very sharp contrast to arch spending cutter Gerald Ford (who achieved a record in terms of vetoed spending bills). Also, the Iraq war misadventure is not a conservative undertaking. It is reckless.

I could go on. But the point is that just because someone is an elected Democrat or an elected Republican that doesn't mean that standard labels fit them.

This is called the "Two Santa Claus" policy in Republican leadership circles. If the Democrats can impose a social security tax to give money to old poor people, the Republicans can give subsidized mortgages to young middle class people so they can buy a house and get in on the mortgage deduction.
Look at where the money goes and try to figure out how poor people can get in on the benefits and subsidys. From the national parks to the ROTC programs, how many welfare mommies or welfare kiddies benefit?
It's been a long, long, time since welfare mostly went to poor people. That was when it was a county function paid for by local taxpayers who would give the local county selectmen what for if they handed out money to undeserving poor, or to any middle class people at all.
Bob Dole talked about finding out that his grandparents were on welfare when he had to sign their welfare application as a county district attorney. No signature, no welfare. Nowadays we have farm subsidies that would have kept them of welfare entirely by making their hardscrabble little dirt farm so valuable that they could have retired to Florida.

My comment that began this was a reply to musashi, who wanted to make some claim about the subprime crisis et sequelae being caused by leftist housing policy.
Sorry. The Republicans and Mr Bush and paleo neo schizo cons OWN the current recession/depression.

Without using the same terms, I generally agree. The apex of the problem is subprime ARMs. I read (somewhere ?) that a couple of billion were issued when GWB was sworn in and this ballooned to a bit over a half trillion on his watch. Roughly 4+ years ago the subprime ARMs began to decline in volume and were down to a trickle of new issues 2 years ago.

This one is clearly and squarely on GWBs watch. 99.6%

Securitization of mortgages (slice and dice 10% tranches of mortgages) was well under way at the end of Clinton's administration but it came to totally dominate & control the mortgage market under GWB. Assign 80% to GWB and 20% to Bill might be fair.


Yes, irresponsible borrowers. That does not excuse the irresponsibility of the banks and mortgage brokers, but the borrowers were still irresponsible themselves.

When loans were approved with little or no equity participation, the borrowers had no risk, but of course... the lenders didn't either since they securitized the paper and re-sold it.

No one can tell us senior management in this arrangement is blameless. They took huge fees for developing this business model (and gave themselves huge bonuses). The CEO at Countrywide "earned" something like $120 million in 2006. In 2007 Countrywide is broke. Where is this CEO now? On vacation in Bermuda? The same behavior was demonstrated by management at Bear Stearns, Citi, Morgan Stanley, Merrill, etc... These guys are well educated, privileged, upper class crooks. They should be in work rehabilitation assignments in the neighborhoods they destroyed... not retired or fired. Their ill gotten rewards need to be returned.

But my real issue is this: Where was the NYT or the Wall Street Journal during all of this shameful business?

Where was the crack financial analysis that supposedly permeates their business pages?

Did those reporters and editors resign in disgrace because they were silent? Why do they remain silent in the face of this immense scandal?

There's a lot of housecleaning to do...

I think a lot of people are starting to get a good clear look at just how corrupt the USA has become.

That is a very incisive question. And the same thing happened with the original Ponzi scheme, by Charles Ponzi himself. None of the major papers would touch the story, and the few reporters who tried were reportedly hounded into silence. Except for one embattled Federal Bank Examiner, the government was silent as well.

Until it all fell apart, of course, and then all the fine folks were all over each other and themselves pointing fingers.

I think everyone, even those who should know better, always holds out hope for perpetual motion.

Even if we know it goes against all the laws of nature there is still a part of us that thinks, maybe this time it's different.

Does thermodynamics apply to economics too?

Does thermodynamics apply to economics too?

That is basically what Tainter's The Collapse of Complex Societies is all about.

Economics applies to people, somewhat idealized, but alive and active. Alive and active implies metabolism --- food energy in and mechanical and nerve pulse energy out. Thermodynamics applies, but not in a way that has been worked out in any detail.

Thanks leanan - I have read that link before but I guess I need to get the book.

Sure, the borrowers had some responsibility. But it was not the unqualified borrowers that blew up the system. It was the slicers and dicers that repackaged the loans at below real cost. If there were unqualified borrowers, that should have been easy to determine from the loan applications - no job, no equity, no nothing - DOH! It's not at all the borrower's fault that their loans got repackaged and resold in such a way as to cause the meltdown.

Cutting of reserve requirements, eliminating walls between financial industries and banks, destroying abilities of states to regulate (eg it's much easier to own one Congress than all the states) - those are not the borrower's responsibility either.

cfm in Gray, ME

I agree. What broke the system was securitization. Once lenders started selling the mortgages, they stopped caring who they loaned money to. They weren't going to hold the mortgages, so the borrower just had to make payments for 30 days or so till they could unload the mortgage and wash their hands of it. Borrowers didn't invent "no doc" loans and "liar" loans. The loan process, from start to finish, is under the control of the lenders.

Exactly as forecast.


Sudden Worsening

The rate that customers repaid loans worsened ``quite suddenly'' in December, causing American Express to change its 2008 estimates, Chief Financial Officer Daniel Henry said yesterday in a conference call. The weakness was isolated in the U.S. consumer, not in other countries or in business spenders, he said.

Henry told analysts in October that the company's ``affluent and high-spending'' cardholders sheltered the company from the problems of borrowers with the riskiest credit histories.

American Express has declined 26 percent in the last 12 months, compared with the 1.6 percent retreat of the S&P 500 Index. Today's drop was the worst since Sept. 17, 2001, six days after the terrorist attacks on New York and Washington.

Part of the housing mess was giving mortgages to under quilified and illegals.Then within 60 days were given heloc's upto 125% of the mortgage.BAC was big on giving bank credit to illegals.I wonder how many have funneled that cash back to Mexico to buy a house down there and let the one in the US go BK.Now the same thing imo will happen to the credit cards gave the illegal easy fruit to pick.Half dozen credit cards run them up buying stuff and have one clean card to get back home.Isn't America great!! The bankers had an open house and they lost the house.

and taxpayers will be expected to pony up.

Looks like China and the middle east will be our new bankers.

Ah, now it is clear, all our troubles are the result of:
Sub-prime borrowing immigrant teenage welfare mothers on drugs.
Why didn't I think of that?

You forgot the gender identity issue - at least some of them are lesbians, too.

Bill Clinton & The Vampire Lesbians of Sodom.

I feel kind of lucky in that I have contacts thru my work with high earners and those just barely getting by in life.Part of the housing thing was for a tax deduction two different individuals said point blank I'm getting into this house for almost nothing down and if I lose it so what I was renting before. But now I have almost no tax liability because the whole house payment is a deduction.I didn't say anything about the people you described.I've work with and for illegals and they are no dummies.This stuff with housing is just starting.

Teenage Immigrant Welfare Mothers on Drugs


It's been five years since we had a raise in pay
And they disallowed my business lunches today
Somebody must have changed the rules of the game
So we've found a convenient scapegoat we can blame

It's those teenage immigrant welfare mothers on drugs
(They're too lazy to work)
Teenage immigrant welfare mothers on drugs
(They're stealing our jobs)

Somebody ran this country deep into debt
I called up Congress, but nobody's called back yet
Sometimes I get so mad I can't think straight
We're looking for relief and it feels so great to hate

All those teenage immigrant welfare mothers on drugs
(They're on the Dole)
Teenage immigrant welfare mothers on drugs
(They're speaking espanol)

Who's to blame for the things we're so angry about?
Who's to blame for uprisings, downsizings, and the drought?
Who's to blame for the end of the good old days?
Who's to blame for that backwards-cap-wearing craze?

It's those teenage immigrant welfare mothers on drugs
(Let's build a thousand-mile fence)
Teenage immigrant welfare mothers on drugs
(It's just common sense)
Teenage immigrant welfare mothers on drugs
(Like the Berlin Wall)
Teenage immigrant welfare mothers on drugs
(Land mines and all!)
Teenage immigrant welfare mothers on drugs

Then within 60 days were given heloc's upto 125% of the mortgage.

Worse than that. That 125% LTV (loan to value) was not based upon a conservative appraisal, but on a wildly optimistic estimate, based mostly on a few recent neighborhood sales, all financed by -- yep, loosey goosey mortgages. If competent appraisals had been done, I'd bet that some of these people were at 150-200% LTV BEFORE the recent slide in home values.

Umm.. any statistics to back up your nonsense about illegals? Any idea if illegals are actually in arrears on payments?
I really hate bigotry and scapegoating. It leads to violence and other inhumanity, and distracts us from the real problems and responsibilities. Soo easy to scapegoat though. And so tempting. And a real cheap cop-out for so many.

Just do a search on illegal alien credit cards BAC is handing them out without a Social security number.I know of illegal workers that claim 4-5 kids and not even married and work at the job 11 months or so and move on.

I guess you couldn't answer my question. I know about the credit cards, and I have seen no evidence that they default more than anyone else. And I think your claim about the mortgage issue is ridiculous beyond belief. I have probably met 15 people in foreclosure in the last 3 months. Generally middle to lower middle class whites so far. Some asian, all as legal as you and me (I will assume you are). Are you aware of a single foreclosure in an illegal?

peakearl,Greed and common sense don't play on the same field.I can't make you do the research your comments are as typical as that of peak oil doubters just stick around and learn.

I have probably met ...

Perhaps some sample selection bias ?

How likely are you to have met an illegal alien that was in foreclosure, and he or she would have informed you of this fact ?



Illegals do manage to get mortgages. The banking industry doesn't check for the most part. This is a complaint in immigration restrictionist circles. But I haven't come across numbers on whether illegal Hispanics or legal Hispanics are more likely to default on mortgages.

We don't know what percentage of those in arrears are illegals. But we know that blacks and Hispanics are most of the sub-prime mortgage holders. We also know that they are large portions of those in arrears. This leads to articles in the NY Times and other liberal media places with people quoted about how this is not fair (and I agree these poor people are too ignorant to judge the terms of mortgage contracts). So the disproportionate numbers of blacks and Hispanics getting foreclosed on are acknowledged by liberal media sources.

But we know that blacks and Hispanics are most of the sub-prime mortgage holders.

We do?

Minorities are more likely to hold subprime mortgages, but that doesn't mean they are the majority.

Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners [PDF]

However, while the negative impact of foreclosures falls disproportionately on communities of color, the problem is not confined to any one group. In absolute terms, white homeowners received three times as many higher-cost mortgages, and therefore will experience a significant number of foreclosures as well.


But that report does not say what that "three times" is in reference to. Are they saying that whites got 75% of all subprime mortgages? That seems very unlikely given table 12 which show 52% of mortgages to blacks being subprime versus 40% to Hispanics and 19% to whites. We'd need to know the total number of mortgages granted to blacks, whites, and Hispanics to do the calculations.

I've previously read a Reuters article a couple of months ago that motivated my original statement. But I can't find it again. Here is another source of numbers:

The study, sponsored by Richmond, Va.-based mortgage insurer Genworth Financial, concluded that 48 percent of home loans given to blacks and nearly 42 percent of loans given to Hispanics last year met the government's definition of ``high-cost ``loans. That compares with 18 percent for whites and more than 24 percent for the overall population.

These numbers below combined with those above suggest that whites get less than half of all subprime mortgages. The key sentence: More than half of these new homeowning households are minorities.

The distribution of this added homeownership looks promising as well. More than half of these new homeowning households are minorities. While numbers of white homeowners did advance slightly more than 4 million, blacks gained 1.2 million, Hispanics 1.9 million, and the residual "other" category, including Asians and those reporting other races, 1.6 million. Nearly half of all black and Hispanic households now own their own home. These homeownership rates are still well below those of whites but are catching up. With respect to household income, the data also show homeownership rates increasing on both sides of the income distribution.

So if more than half of new home owners are minorities then that suggests more than half of all new mortgages are to minorities. Some of them are Asian. But if that number is not real large then the overrepresentation of blacks and Hispanics among subprime mortgage holders strongly suggests that my original contention is correct.

Look up jefferson county Colorado and and the mortgage fraud from straw buyers mostly illegals.Get 5-10 k kicked back to you and never move in the house.Do a little search on home mortgages for illegal aliens.Japan had a housing bubble twenty yrs ago without the fraud and home prices fell for 16 yrs,

But we know that blacks and Hispanics are most of the sub-prime mortgage holders.

Not even a moment's consideration for white trash?


Originally lsited by Matt at LATOC, a hysterical satire of white trash and the housing bubble.


It can start with a W also, just a question of percentages.

yes many have probably missed that opportunity: run up the card debt, store the cash and seek bankruptcy protection. but realistically what could a person with no public record assets do ? $100k ? .....probably not worth 7 yrs bad credit*.

* same penalty as for breaking a mirror, 7 yrs bad luck

Isn't that because the housing ATM is defunct now?

Don't Taze me, Bro! 8D


New Hampshire to Recount Ballots in Light of Controversy
By Kim Zetter EmailJanuary 11, 2008 | 4:37:15 PMCategories: E-Voting, Election '08

Both Republican and Democratic candidates have asked the state of New Hampshire to conduct a hand recount of all primary ballots statewide, citing internet rumors about vote discrepancies and voting machine fraud in the primary results.

My guess is that it won't make a difference. The results will be the same, and those crying fraud will still be convinced that there's some kind of cover-up.


Nothing has changed since 121200.

But start looking abroad at World Opinion articles on
the state of our elections.

From AP...
CLEVELAND (AP) - Two county election workers were sentenced Tuesday to 18 months in prison for rigging a recount of 2004 presidential election ballots so they could avoid a longer, detailed review.

Jacqueline Maiden, 60, a Cuyahoga County election coordinator who was the board's third-highest ranking employee, and ballot manager Kathleen Dreamer, 40, each were convicted of a felony count of negligent misconduct of an elections employee.

The above happened last year and I hadn't heard it.

Sure give away.

Not one word on the NH recount from any MSM.

Do I have a point? That would be nice, eh?

If the US is not electing representatives, but they are being chosen for us,
that would explain many frustrations here at TOD on why
our Gov't is not responding to PO crisis.

Ohio is a different story from NH. Ohio, IMO, is crooked as a dog's hind leg. Home of "Big Jim" Traficant. And "Coingate." So many Ohio politicians have gone to jail they ran out of jails.

It was ridiculous that people in Cleveland had to wait 12 hours in line to vote, while people in the ritzy suburbs waited only a few minutes. That alone probably swung the election. No need to rig the counts. Just make sure there aren't enough voting machines in the precincts likely to vote against your candidates.


I don't have a horse to grind in this dog fight.

And Kucinich has walked into a trap.


But there's a reason why DC has basically a 20% approval
rating while nothing is changing.

Like Dylan said, “Money doesn’t talk, it swears.”

I live in a town of 700 in New Hampshire. I know my neighbors, and I know the folks who run the shire town (county seat in the rest of the world), a big city of 27000.

Perhaps Governor Lynch will have one of the ANG's black helicopters deliver a batch of tinfoil hats to these folks.

Hello Live Free or Die Person.

The $$$ quote:

"Anything Of Value Should Be Auditable"

How will you even know your system is broken?

Key words: Chain Custody transparency ballot inventory

I'm with you on this. The fact is Obama got roughly what the polls said he would, and Clinton got a slight surge in votes which actually largely came at the expense of Edwards and Richardson.

Obama lost votes in machine counted areas vs. hand counted areas, big, medium, and small towns.
We do it two ways here. We recount the ballots by hand to verify the ballots were counted correctly, and we verify that the people that voted in New Hampshire actually lived there. Want to bet that a lot of people that live in Massachusetts and New York with high state income taxes are officially living in New Hampshire? So what if it's illegal voting by rich people instead of illegal voting by poor people, it's still fraud.
Wait till they find out how many wealthy New Yorkers are officially Florida residents and voted for Bush in 2000 and 2004. Cell phones and credit cards are pretty good locators these days.

I had a "light bulb" moment this morning with the following result.


Solvency allows Credit. Without solvency no credit. Deflation is the result as no cash money (= short term liquidity) is available.

As society has overcommitted its resources, overbuilt its infrastructure, due to the concept of exponential growth, insolvency must result. We are stretched too thin due to overpopulation and overbuild in infrastructure with the expectation of additional resources always becoming available. The original loan from the customer in the housing game just blowing up is similar to the PO drama globally. One barrel of oil or a $100,000 housing loan is leveraged 10 times, 100 times, 1000 times in fantasy ways by the financial community/banking system in terms like the barrel of oil in building our infrastructure, which when the oil amount stops increasing or in the case of the housing bubble the customer base for new credits stops increasing the pyramid/ponzi scheme collpases.

In this way we can see that, despite the obvious price spiral for basic goods due to increasing resources scarcity, that PO and Peak Everything, is in no way inflationary, despite the intuitive notion of "higher prices = inflation" but rather resources scarcity is highly deflationary just as a credit crunch takes money out of the system. If oil is credit/solvency( a promise of future liqidity=higher oil flow rates or higher cashs flows) then PO or peak credit is a systemic crisis leading to a societal deflationary spiral where no one has sufficient resources(=cash=energy units currently available) to make purchase/achieve work in the physical sense.

Deflation(not inflation) /Global depression is the end result, regardless of USD 10/gallon at the pump.

Basic resource price inflation is at root a deflationary phenomenon as it is actually caused by a reduction of total energy supply (= money supply in the sense of M3) being current oil flows being produced or to be resonably expected in the future .

I give credit to the Austrian school of economics and Mish Shedlock for his thoughtful and repeated analysis in this direction in the economic sense. I am certainly quite thickheaded but the message is finally beginning to get through. As incorrectly Bernanke, Greenspan and even Roubini think that interest rate reducitons can save the economy even the Believers in the Austrian school are still falsely dependent on the fictional concept of money diconnected form the underlying resources such as oil, coal, NatGas, wood, food without which money would be worthless. The only solution lies in a powering down of the economy to sustainalbe levels to a zero sum economy. Exponential growth of population and resource use must be eliminated if we are to survive.

Additionally I would like to say that stagflation due to exogenous shock, i.e. political or geological withholding of resources, as in the 70s oil shock or as in the current situation, is a misnomer(misunderstood in yesterday's post by Nouriel Roubini). The so-called phenomenon of Stagflation, a simultaneous increase in accounting unit prices due to resource shortages, has been misunderstood and interpereted purely in monetary terms and is seen as a recessionary development with simultaneous price increases. It is actually a resource based deflationary spiral which could be perfectly modeled in terms of the TOD post from last week http://www.theoildrum.com/node/3412 that modeled the economy in terms of energy inputs and not financial inputs or fiat/faith based currency. If economists had used this type of theory proposed on TOD they would not have invented such nonsensical terms as stagflation but would have immediately understood the underlying phenomenon and treated the underlying cause(resource/oil/energy base contraction = "money" contraction) and not merely the symptom, i.e. prices in terms of arbitrary accounting units, i.e. Dollars.

Certainly the 70s are not repeating now exactly but a similar phenomenon is taking place. The parallels are many in terms of energy scarcity, high gold prices, unemployment growth, price increases except that the consumer has become completely addicted to credit/energy(10 USD of credit in order create 1 USD of growth, negative saviongs rate, manufacturing base eliminated, all economic statisitics ca. 50% accurate= double the unemployment, inflation rate and halve the growth rate to find reality) to create personal value and is living in expectation of ever more, although with reduced satisfaction for each unit of value, i.e. the population has bought into the exponential growth paradigm of the post war economists, hook, line and sinker. Previous economic thought was more common sense based/less mathematically abstract and did not presume the concept of an entirely cash based society. Prewar people had gardens and friends/family to do services such as child care, etc. Now even friendship has a Dollar value which can be discounted into the future.The belief system ( I value my religious sentiment too much to sully this superstition with that precious word) that has developed around the ever growing cheap energy based Post WWII industrial technological economy is magical in basis and is at an end. The 70s were a test run. We did not get it. Ronald Reagan's "Morning in America" expansion was allowed by "Smoke and Mirrors"'(thank you G.H.W. Bush) of fast resource drawdown and debt buildup and the disciplined savings rate and moral values/cautions of the older generation plus the resource of a well trained ambitious baby boomer generation in their best years and of course due to the discovery of massive oil deposits in North Sea/Norht Slope and taking advantage the low hanging fruit of massive efficiency gains such as switching to NatGas electric generation and switching manufacturing over to coal based Chinese factories and extreme cheap labour cources abroad and becoming a low energy intensive (per dollar unit GDP base) service economy. Now that PO is a permanent and not temporary phenomnenon (no 70s head fake this time) and the previously productive baby boomers are retiring and the Chinese /Asian cheap work forces are exhausted in terms of manpower (now inflation is imported to us from China) along with their energy supplies depleting(cheap coal) and the savings minded GI/Silent generation are almost gone along with their common sense wisdom about the value of human relationships over money based relationships as well as the Peaking of the local NatGas and coal supplies so now we can expect the big resource based deflationary crash.

If stock markets reflect investors' expectations for the discounted present value of future earnings by public companies, and if in fact the energy won't be there to create the earnings in the first place, perhaps the markets are not properly discounting future earnings.

BTW, good discussion with Marc Faber on Hour Two on Financial Sense. Faber is cautious about energy short term, bullish long term.

IMO, the big picture is that food & energy were deflationary industries in an overall inflationary environment from about 1980 to 2000. Food & energy are now inflationary industries in an emerging deflationary environment. Regarding Peak Oil & deflationary trends (I realize the monetary purists have continuing objections to my terminology below):

ELP Plan (April, 2007)

I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices.

Your advice is probably very good for the individual and, in fact, I personally try to practice frugality wherever possible, especially when it comes to energy. Not so much when it comes to food. In addition, if I ever move, it will be to a downsized house. Not that my house is all that large now.

As a general prescription, however, wouldn't mass behavior of this sort lead to a downward spiral of recession and, eventually, depression? Due to the fact that the prevailing view right now says we are headed for a recession, the Fed and the administration are feverishly looking fr ways to pump up consumption, the key driver for the maintenance and increase of GDP.

Given the continuing depression resulting from your prescription, we would reach a new lower level of economic activity and incomes which would require further frugality and so on. At some point, I guess, we will reach some sort of equilibrium, one characterized by significantly lower levels of income than we have now.

The Powers That Be define a healthy economy as one which is continually growing fueled by insane levels of consumption, resource destruction, and debt. From their perspective,all this debt is good news, a sign that the consumer is still in the grip of the philosophy that no amount of consumption is equated with excess.

What you are proposing is clearly un American and will never be voluntarily adopted by more than a tiny minority of the population, perhaps a few of your close relatives and some of us who frequent TOD.

The trick is for someone to articulate a theory of frugal consumption combined with economic sustainability. How do we avoid exhausting the remaining resources of the planet,combat global warming, and still have a reasonably adequate level of incomes without engaging in a destructive and miserable downward economic spiral? Hint: I think sharing would be included here somewhere.

From the ELP article:

Two responses, from recent years, are illustrative.

First, the West Texan. After outlining my plan, a friend of mine from West Texas thought about it for a moment and then said, “But if we stop borrowing and spending, what will happen to the economy?”

Second, the Dallas socialite. Again after outlining my plan, this lady said, “You’re not from Dallas, are you?” I replied that I was not. To which she said, “No one raised in Dallas would ever talk about living below their means.”

So, living below one’s means, at least in years past, was somehow considered vaguely un-American and socially unacceptable.

However, recently people who have followed some version of the ELP plan, either because of my recommendations, or based on their own evaluation of the present environment, have had considerable reasons to be glad that they voluntarily downsized. So far, I have not heard any regrets from anyone who downsized.

Or, turn it around. Does anyone now wish that they had bought a large SUV and large suburban McMansion--all with 100% financing--on January 1, 2006?

Finally, if we are wrong about Peak Oil, and if you followed the ELP plan, you will have less--or no--debt, more money in the bank, and a lower stress way of life.

If we are right about the ELM--and so far we have been--a depression is a "when" event, not an "if" event. As the recent US debt numbers indicate, the members of the Yerginite Community are in the vast majority. So, perhaps the best thing to do is to use the Yerginites' belief in virtually unlimited energy as a profit opportunity.

You are correct, of course, that as a prescription for the individual, your plan makes perfect sense and I try to follow that plan to the extent possible. Right now and maybe for the foreseeable future, cash is king. Those who have some cash should probably keep it. Who knows? They might be able to pay cash for their next downsized house in a year or two. Further, we may have run out of tools to pump up the economy. Greenspanning the problem may have outlived its ability to keep us out a recession.

The good news is, all those engineers and scientists that HO is looking for, will soon all be on the streets looking for work after the layoffs.

What happens to money in the bank when the banks go bust and FDIC is overwhelmed?

I have pulled out of the stock market -- it's never been anything but a casino for me, and unlike all my friends and acquaintances who "always break even" when they go to Las Vegas "for fun" -- and who always seem to make huge profits on stocks, or say they do, I always lose.

I have no debt (except the remains of a mortgage) and I own my own business, debt free. Kids are all on their own. I have a few $$ in the bank, and now I am getting old.

All I can see for the future of the economy is something like Argentina, where the middle class got vaporized, and people like me will be out in the cold. Even if I own property free and clear, the government will eventually get it because I won't be able to afford the property taxes!

So, my solution is to find, create, support social networks of local people with different skills. I am assuming that re-localization will be the long-term result of the kind of energy collapse everyone seems to be talking about. Small republics could form, or perhaps, ultimately giant medieval-like baronies. But that's a long time into an uncertain future.

Looking at future property tax liability is one consideration when looking for a lifeboat property. Having a revenue source that will continue generating revenue no matter what happens in the future should be a centerpiece in the design of your lifeboat. Mine are electricity generation, timber products, food production, and limited biofuel production. Demand for these items will always exist. I advocate accumulating cash in a basket of currencies and keeping it in a fire-proof vault on your property. Other items of intrinsic value that can be stored for long periods, such as NPK, and easily locked-up should also be accumulated. For me, a cash buffer consisting of ten years worth of property tax payments is to be reserved for that use alone. I don't favor accumulating large amounts of gold, etc., because you can't pay your taxes in gold and who's going to have enough cash to buy your gold when you need to sell it? I also think it worthwhile to become your own bank in an escalating manner going forward. The idea of my electronic "cash" being wiped-away--however likely--is unacceptable.

Thinking through ALL the considerations and planning for them is essential for a functioning lifeboat.

karlof1,reports from Argentina after their crash tell of home invasions for the purpose of torturing the residents until they revealed the location of their cash hoard. I'll suggest that small towns will need a local bank regardless of how the 'money center' banks end up. That local bank would ideally provide safe deposit boxes, very conservative local loans, and would operate with a very conservative reserves ratio (50%?). If relocallization does occur, honest bankers, just like physicians and veternarians, will still be valued members of a community.

Errol in Miami

I don't doubt banks will still exist, especially one's specifically established for local currencies (for most of US history, all banknotes were supplied by local banks). Defending home invaders is one consideration I've noted and am already trained for--ex-army and martial arts. The key in my mind is a functional community in reasonable proximity to a larger urban market like the county seat--specifically the small village of Alsea, which is between Corvallis and Newport, Oregon, although I now reside in Yachats. There's room here and good people with similar aims and multiple skill-sets. And the resource base is excellent.

Your local Vigilance Committee will take care of that stuff if the government does not.

Yes, if you are essentially all on your own, you against the world, you have already lost. Community defense is the way to go.

Vigilance Committees or DIY Militias are a last resort. Hopefully the local authorities can be persuaded of the need for a civilian "police auxiliary" under their authority and control. Definitely some advantages to organizing under the wing of the local police force.

Maricopa county does it right - large sheriff's posse, psych test before applicants are allowed, one third get rejected, and they do much to keep order there. Every county will have one and if the sheriff is bad ... well ... lots of angry vets from Iraq will be handy to deal with such problems.

I've started watching HBO's Deadwood - a fine glimpse of life after the oil crash, methinks.

Will that include doctors willing to treat you in exchange for buying them a few drinks at the local saloon?

Note how the local businessmen all chip in for smallpox vaccine for the entire town when "plague" threatens Deadwood. It was just good business sense. Today, they would opt to save themselves and to hell with everyone else. Everyone else is riff-raff and expendable. There's always room for newcomers to take their places and get fleeced.

reports from Argentina after their crash tell of home invasions for the purpose of torturing the residents until they revealed the location of their cash hoard

Which suggests that it would be a good idea to maintain a small cash hoard (different from the main stash) that one can quickly give up to the bad guys to placate them, if worst comes to worst. Sort of like an updated "mugging money". (How I DO love not living in a big city any more!)

do you have a fixed amount of property tax for the next ten years?

No, property tax is not fixed Y/Y as I'm sure you know. Here in Oregon, Proposition 50, similar to CA's Prop 13, limits appraisal appreciation. The discussion about this is long and can be read in full here, http://www.oregon.gov/DOR/PTD/property.shtml

The key for my purposes is that future increases can be anticipated, thus a cash reserve to pay the tax can be established and easily managed. For the process to change, another ballot initiative to modify the state constitution would need to be passed--a very unlikely event in my opinion.

This points to the need for governments to plan for tax revenue shortfalls against increasing costs as the Peak Oil economic period takes hold. I would be interested to hear what WELL has done on this issue.

I can think of some ways to spend money in preparation that will put you in a better position:

1) Extremely insulate your house. You can spend thousands or tens of thousands of dollars/pounds/Euros on this.

2) Install a ground source heat pump.

3) Buy an electric scooter.

3) Get enough solar paneling that you can recharge your scooter and run enough of a heat pump during the day to prevent your pipes from freezing in the winter.

In other words, reduce your need for energy and increase your ability to generate energy.

'Where Are the Customers' Yachts?

The title of this 1955 book is based on the question asked by a visitor to Wall Street upon seeing the yachts owned by the various titans of the brokerage industry. Throughout, the author, Fred Schwed, does an effective job of both educating and entertaining; the following excerpts should give you an idea of his excellent sense of insight and humor:

'Your average Wall Streeter, faced with nothing profitable to do, does nothing for only a brief time. Then, suddenly and hysterically, he does something which turns out to be extremely unprofitable. He is not a lazy man.

For one thing, customers have an unfortunate habit of asking about the financial future. Now if you do someone the signal honor of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult of all answers — "I don't know."

There was always a scattering of bears, "aginners" by temperament, who spent their business days having their ears knocked off. Many of them, bowing to a force which finally seemed cosmic, switched to being bulls at a sadly late period in the era. The remainder who were still short at the time of the crash covered too soon (as who wouldn't?). Then, after prices had gone inconceivably lower, they took their profits and bought stocks (as who wouldn't?). In due course of time, if they bought on margin, they went to "the Cleaners," that mythical establishment to which their brother speculators had repaired some time earlier. "The Cleaners" was not one of those exclusive clubs; by 1932, everybody who had ever tried speculation had been admitted to membership.'


The FDIC is backed by the Fed Govt. They will cut every tree in America to print enough money to pay all the depositors, if that is what it takes. Of course, that money will be next to worthless, but you WILL get it back.

The problem with no growth is that there is no way to accumulate "savings" and nothing to invest in anyway. So, you go back to a loner medieval lifestyle of susistance living (growing/raising/hunting your food and making your own clothing), leaving nothing for your children when you die. One way to live better (and to have "growth" in your little world) is to "own" some serfs that do all of their work and all of yours, so now you have some of their manual labor contributing to your well being - building you a nicer house, e.g. But, damn, then you are starting the whole "growth" nonsense again! Even if you became skilled enough to get more food than you need, and you barter some of the excess for something else that you want, you will be employing the very growth principles that you now deride (you want to acquire more than you yourself can provide).

So, I guess the ideal no-growth strategy is that every human becomes like a wandering water buffalo, just live in a warm climate, by a stream, under a banana tree, and catch them as they fall. When you die, maybe (if someone can keep records) you can pass on your living spot to your child. I am sure all of this will happen in my lifetime, as I am only 66, and most of the people on this site seem to heading in that direction. I guess that I could get a head start and move to Costa Rica and try to find my banana tree. (I will save you the trouble of the first posted reply - "Please go ahead and do that.")

Unfortunately, I think that to focus on eliminating/slowing down growth is unproductive. It would appear to me that population control/reduction is what is needed.

Growth is just fine so long as its driven by renewable energy. Some places have it, some don't. Some will get developed, some won't.

Thats my story and I'm stickin' to it.

Growth is just fine so long as its driven by renewable energy. Some places have it, some don't. Some will get developed, some won't.

Pull up some maps of the US. Draw a north-south line at about 96 degrees west longitude, and compare (a) which side of the line has renewable resources (wind, solar, geothermal, plenty of opportunity for pumped-hydro storage) and (b) which has the bulk of the population. Perhaps I've lived "out West" too long, and I know I'm in a minority, but I can fairly easily envision the day when the western half of those maps says "Our renewable energy resources can power (a more efficient version of) the American dream, if we didn't have to share with you folks back East." With a variety of possible outcomes.

I'm more inclined to draw a line along 36 degrees to 39 degrees north, with everything south of there being a burn line right down to the storm surge line from the last hurricane. I think your north to south line is a bit far west - plenty to do clear up to about -88 west from what I'm hearing of wind projects.

The US East can build nukes and offshore wind towers. The US East pretty much needs to do the same things that England is doing.

The west can build lots of wind and solar if the east will pay for it. Sort of like how all those dams in the west got built by eastern taxpayers back in the thirties and after.

do the same things that England is doing.

How hard is it to do nothing and piss away the future? Get with it!

Growth is just fine so long as its driven by renewable energy.

Errr... "growth" consumes resources. Unless you are somehow closing the consumption loop, growth consumes known limited things like Phosporous.

Stranded wind to make Ammonia for crops still won't address humans passing the P in Pee into sewers.

I read this and I'm getting an image of you going out with your underwear on over your pants because you have trouble grasping the order in which things should occur.

NPK is a problem and right now I am solving for the largest term in the equation, N. Once that is done to my satisfaction I've already got some ideas about how to handle PK. If the "soil" be as fertile as it is for nitrogen fertilizer production I might get to knock the cover off the ball twice in a row.

I read this and I'm getting an image of you going out with your underwear on over your pants because you have trouble grasping the order in which things should occ

Perhaps you should stop looking in the mirror before you post. Projecting your issues on others makes for a poor post.

NPK is a problem and right now I am solving for the largest term in the equation, N.

Oh really? So, with all the N needed, the 'problem' will be solved?

What problem is that? Plant growth in an energy constrained future? (To quote you - you only care about the lights being on and bellies being full around *YOU*) Or somehow taking electrical energy and 'freezing' is in some portable form that can be used away from the generation site/used at a later date?

The major issue is potable water for the plants WRT the present agricultural system. Having water effects EVERYONE in ag, even the local CSA who uses composting to add NPK to his valley soil.

Your idea:
1) Does nothing to address the potable water issue - the 10,000+ years to recharge the water table (if ever)
2) Does not address the short term (but beyond YOUR lifetime) P shortage.

But hey! Your idea only has to help you, given your stated criteria of the people around you having a full belly and lights on, why should the plan consider the long term?

Once that is done to my satisfaction

Is that metric as low as 'I have a full belly and lights'?

I've already got some ideas about how to handle PK.

And does this magical idea address Na in P and K metabolic salts? Because if you have an effective, low energy, renewable idea - NASA has some grant money for you!

If the "soil" be as fertile as it is for nitrogen fertilizer production I might get to knock the cover off the ball twice in a row.

So your plan is to keep the present 'microbe dead' "soil" going?

Yes, but just remember today all we really need to focus on is getting through the first half of the 21st century, you can't solve all of times problems at once.
Maybe I'm just a naive technologist, but as I see it. If the decline in oil production is not excessively sudden, I would expect several projects to at least prevent a depression, even if a recession is inevitable. The problem is that oil is running out, not even fossil fuels in general are yet. Coal to liquid, ethanol, biodiesel, LNG and increases in efficiency would hopefully be able to provide relief in liquids supply for a while. That would keep things going for a while.
Also, you know governments are not going to allow the market to run away in prices. We have a democracy, not an anarchy, libertarian ideologies will be rejected as soon as people see the market failing. What's going to happen is government carefully monitoring and if necessary controlling development of alternative energy development to sure it's speedy. And price regulations and rationing will be introduced. And people will accept it because they'll see it as something being done to help a scary situation, these things have historically been tolerated in war time. Governments will keep the market from running away, and rationing will very quickly motivate people to invest in energy sources that aren't... rationed.
Then you'd move onto renewables and nuclear fission as the century progressed. And there's still a very large coal supply still in the ground, I'm afraid the climate will have to take a back seat to making sure civilisation survives peak oil.
If a technology like nuclear fusion is finally figured out, growth will be able to continue into the 22nd century for a long as food capacity and raw materials exists. Looking out several centuries further, if you have functioning nanotechnology you'll be able to recycle any materials your economy is using. Assuming we get to like the 25th century in good state, and we actually figure out how to get all this fantasy sci fi technology working, like nanotechnology and fusion, a lot more will be able to be done with fewer resources, growth could continue for thousands of years. Eventually you want to get to space if you run out of resources on this planet.... Anyway, I'm just trying to make a point that there is no reason to see the end of growth as something that is inevitable, it's an infinite universe after all. ;)
It would be foolish to make no efforts to keep the energy party going, for now it benefits people immensely. The object is to delay the need to achieve a sustainable level of growth for as long as possible, for the longer we delay that, the better the technological state will be, which will provide for a better standard of living at a sustainable level. For fast technological development, you need growth.
Best case is that our industrial society makes it through the 21st century finally with the technology to obtain large amounts of energy with low impact and high sustainability. Renewables and nuclear fusion would be the energy of the 22nd century. Unless we want to have dramatically lower living standards, we have to keep the economy functioning by whatever means for much of the 21st century until nuclear fusion gets off the ground....
As I see it, this would be the only outcome worthy of the struggle the 21st century will be.

A better solution, by several metrics


And this does not require that I'm afraid the climate will have to take a back seat to making sure civilisation survives peak oil.

Since Global Warming is a greater threat to civilization and the failure of complex systems than is Peak Oil, the "Boil the Planet" option is N O T a good long term choice, Thus no Coal to Liquids, and a phase out of coal.

You are VERY much going down the wrong path !

No new technology required BTW (any that develops will, of course, be useful, unless it is cheaper CTL, tar sands or oil shale).

Best Hopes for the Best Economic Policy = Best Environmental Policy = Best Energy Policy = Best National Defense Policy, which my work with the Millennium Institute shows,


I think if your economy is collapsing from peak oil, the planet suddenly becomes a secondary priority. It would be nice to stop climate change, but generally people will put their family first, and demand that any energy that will work, be used.
This is just a lump of rock without humanity anyway, climate change is a big problem because it will flood cities and affect farming land creating food storages, but I think that pales in comparison to the die off in a worst case peak oil scenario, so to worry about the climate will be secondary when you have billions of people you need to save.
The most important priority is to ensure civilisation survives. And the problem is that we'll be faced with a huge task of phasing out oil from the economy at exactly the same time that climate change will need to be dealt with, and you'll have a harder time dealing with both due to economic troubles, hence you'll put survival first and burn whatever fossil fuels still remain.

You have a couple of points wrong.

The crop failures and infrastructure disruption from GW will have a greater impact than post-Peak Oil. Evac Atlanta, Phoenix, Las Vegas, Los Angeles on short notice would be extremely disruptive ! Add multi-year crop failures to the mix.

And teh solution to post-Peka Oil is *NOT* (as shown by the T21 model) to burn more coal. That gives out to, and is subject to disruption.

The BEST economic policy is a combination of a maximum push for renewables coupled with a maximum push for electrified transportation, Transit Orientated Development and bicycles.

Your instinctive rush for coal is a trap that will lead to the destruction of civilization from both energy shortages and climate change.

Is not "either/or" PO or GW, it is either PO & GW solved together *OR* neither solved ! And a Rush to Coal will solve neither !


It seems to me that although GW is a massive problem, it doesn't threaten to bring down civilisation.
You can still have a functioning economy stuck in the middle of GW.
Of course electrified transportation is inevitable. Future forms of energy would be nuclear and renewables, and they are both electric sources of energy, remaining oil and ethanol and coal to liquid will have to be used to replace oil in the short term however, to avoid economic implosion, meaning that co2 likely won't be able to cut down for a while, is basically what I'm saying.
Because, unless we make a huge push right now, for nuclear and renewables which is what we should be doing but likely won't, we're going to be so desperate as to have to turn to coal.
So I agree with you in principle, but I think that by the time we actually start taking the problems seriously, it'll be so late that we won't be able to tackle more than one of the problems.

Tackling "one of our problems" carries with the highest risk of a failure of civilization. Going forward to "Peak Coal" with Coal-To-Liquids carries with it economic collapse AND severe GW.

You instincts are simply, and provably wrong. Coal-to-Liquids is a trap. If we ramp up on CTL (and tar sands) as proposed by the Hirsch Report, they have low EROEI and the easy to get coal quickly depletes during the 20 years we madly build CTL plants. The coal that is left by 2050 or so takes more effort and energy to mine and the EROEI via CTL to support BAU simply does NOT work !

The SAME level of effort, devoted to renewable energy, electrifying our freight railroads, building Urban Rail and promoting bicycles will save our civilization.

As I said before, it is either "Fix GW & PO together" or "solve neither PO & GW".

And you are wrong about climate change being the lesser risk. Think Dust Bowl squared, massive relocation of populations and destruction of economic infrastructure combined with a decade of crop failures.

Do you really think our civilization as we known it could survive that ?


What I meant was coal to liquid would be a temporary measure to keep existing infrastructure running at acceptable costs... while you bring alternatives online like electrics powered by nuclear energy and renewables.
So by say 2025 you'd be reducing co2, but not significantly before that. This is all I really meant.

BTW I live in Australia, we've been hit by a drought this decade which is likely caused by global warming. It has increased food costs as it cut crop production in half and ruined the cotton industry and caused water supply issues resulting in the proposed construction of water recycling and desalination plants (powered by coal unfortunately, lots of public opposition to nuclear energy). Yet the economy is barely affected at all and is actually booming due to the mining industries growth.

What you are seeing now is only the beginning of global warming. Some climate models are now showing we could be dangerously close to a tipping point and, in the worst case, the planet could become unable to support human life at all. That's what's potentially at stake here. Peak Oil could actually turn out to be the thing that saves the planet. How ironic is that?

Any solution which doesn't include control of population numbers is, at best, a temporary solution.

Unfortunately world population growth control will come eventually - but in the form of hunger.

Generally what has worked in the past is television and social security payments. People stop having children as soon as you let them stop having children. People like having children sort of like having pets. Two pets is as many as most people really want.
At least it is in every country in the world where people aren't paid to have children like Saudi Arabia.

From a post I did on how Africa's population is going to double or more in about the next 50 years you will see there are still places where people have lots of children:

11 countries have fertility above 6 babies per woman and 9 of them are in Africa. Some Panglossians argue that the problem of human population growth will be solved naturally by declining fertility. Well, maybe in Japan and South Korea. But the top two high fertility countries in the world have seen their fertility rise from 2000 to 2007. Mali rose from 6.89 to 7.38. Niger rose from 7.16 to 7.37. They aren't alone. 5th place Afghanistan rose from 5.87 to 6.64 and 7th place Burundi rose from 6.25 to 6.48. This is a huge tragedy for our environment.

You can save even without growth. You can't invest, but you can still save. Indeed, that is how people used to buy things. They saved for them, rather than borrow.

One way to live better (and to have "growth" in your little world) is to "own" some serfs that do all of their work and all of yours, so now you have some of their manual labor contributing to your well being - building you a nicer house, e.g. But, damn, then you are starting the whole "growth" nonsense again!

No, you aren't. There's a limit to how far you can carry the serf system. No-growth economies can't afford to carry many people who do not produce. That is why charging interest was seen as a sin unto murder in the ancient world. Why Islam allows commerce but forbids charging interest. Why Jesus overturned the tables of the "money-changers." Interest was seen as "unearned wealth." It was wealth gained without actually producing anything, and a steady-state economy just can't afford that.

Unfortunately, I think that to focus on eliminating/slowing down growth is unproductive. It would appear to me that population control/reduction is what is needed.

Don't you see the contradiction there? Lack of population growth is seen as a serious social problem in Europe and Japan. Why? Because they need more people to feed into the economic growth pyramid scheme. More workers, more customers, more investors. You are not going to get people on board with population reduction unless you convince them that economic growth is a bad thing.

It was wealth gained without actually producing anything, and a steady-state economy just can't afford that.

You've hammered on this a bit and the importance of it is just starting to sink in to me. I've been familiar with the term 'usury' for a long time, but have never thought about the context in which it existed and how it's different from where we are now.

I've always had an independent streak and one of the ways in which to develop that streak was the to become energy independent.

What are the consequences to a steady-state economy filled with independent producers - producing primarily for themselves and not for others except by 'accident' ?

What are the consequences to a steady-state economy filled with independent producers - producing primarily for themselves and not for others except by 'accident'?

The problem with a steady-state economy is how you remain steady-state. Population growth is a problem. You can't keep subdividing the farm among the kids. Eventually, the pieces will be too small to support a family. Hence the common "primogeniture" laws.

Don't you see the contradiction there? Lack of population growth is seen as a serious social problem in Europe and Japan. Why? Because they need more people to feed into the economic growth pyramid scheme.

I believe it's also seen as a problem in developed nations because the social welfare programs are under strain as the proportion of retirees increases and people live longer.

"Why Islam allows commerce but forbids charging interest." I don't know the history of how it arrived in this position, but modern islamic "loans" don't necessarily require the lender to be "productive" beyond providing capital. What they require is that an investor essentially becomes a "partner" in the business venture, so that they do not receive repayments if the business fails. (In contrast, in a conventional loan the lender can try and recoup payments and interest from any other income/assets.)

Encouraging development such as buying productive assets (which may well not be growth in a future world) is why I don't think it would be a good thing for all banking to collapse. Clearly loans for buying productive assets like horses, or a forge, etc, is very different from buying a bigger McMansion "because you want one".

I don't know the history of how it arrived in this position, but modern islamic "loans" don't necessarily require the lender to be "productive" beyond providing capital.

Yes, they have found ways around it. The economy is different now, and attitudes toward interest have changed. Among Jews, Christians, and Muslims.

My point is that there was a reason for the historic prohibition on interest among all three religions We no longer understand it. It seems as quaint as the prohibition on mixed fibers in the Old Testament. But there was a reason.

Simple reason. Money does not create money. Money is sterile and has no generative power. Growth and reproduction is biological and sanctioned and regulated by God.
That money should have generative power unto itself is an unthinkable notion before the modern era.
And many are still wary, suspicious.

Interest was seen as "unearned wealth." It was wealth gained without actually producing anything, and a steady-state economy just can't afford that.

This is interesting, Leanan, but I'm not sure I'd go that far. It may have been perceived as unearned wealth, but that's not true because the lender had to

a) defer consumption. Can't spend what you've loaned out.

b) put capital at risk. There's always a chance you won't get your money back or that the collateral won't cover your losses.

So the lender collecting interest is definitely doing something worth compensation. He's getting paid for his consumption defering and his risk bearing.

So what is the money changer producing?

Well, back then a farmer as now could find himself with land but without the means to work it. (Maybe his ox died) If he doesn't have savings (no deferred consumption) he must seek out the evil money changer who is going to insist he gets paid for his efforts. The farmer buys an ox, raises a crop and pays principle with interest.

The trouble comes when this doesn't work out. Say the crop fails and the lender gets the farm. Then the lender gets associated with the plight and ruin of a farmer who may have been so desperate he agreed to bad terms in the first place.

Essentially interest earning makes sense within a 'steady-state' economy because you still need to shuffle resources within it. You need somebody willing to forgo consumption so that capital can be accumulated and made available to those who need it.

I would add another reason why I think money lenders were hated.


You have one guy who shares his stuff all around in order to win friends and influence people.

And you have another guy, a rather nit picky tightwad who accumulates a hoard and lends it out at interest.

Who is more popular? Who is more likely to take flak during hard times? Who has scape-goat written all over him?

The other thing they did in "the olden days" was the community that would benefite from the production of the the farmer, factory, etc. would pool funds to get things started.

Must of really pissed off the banks.

Also, those who have enough money to loan out are not defering consumption inless you are talking about a 36" flatscreen for the bathroom.

Lastly the concept of putting your money to work for you is sucking on the teat of society IMO. If your money is making money then your money should get to eat. Not you.

In the US and most other nations, both methods occur.

For instance, the government runs a pool that is dipped into for many purposes including promoting new projects. And, of course, there is plenty of interest-charging.

a) defer consumption. Can't spend what you've loaned out.

But that holds true if you let your neighbor borrow a loaf of bread or a bottle of wine. You don't expect them to return more than they borrowed.

b) put capital at risk. There's always a chance you won't get your money back or that the collateral won't cover your losses.

And the chances were much higher in a steady-state economy. People only borrowed when they were truly desperate. That was another reason why charging interest was seen as a bad thing. It was seen as taking advantage of the helpless.

Well, back then a farmer as now could find himself with land but without the means to work it. (Maybe his ox died) If he doesn't have savings (no deferred consumption) he must seek out the evil money changer who is going to insist he gets paid for his efforts. The farmer buys an ox, raises a crop and pays principle with interest.

More likely, the farmer can never repay the loan no matter how well the crops grow - even without interest. That is likely the reason cows are sacred in India. Even if your children are starving to death, you can't even think about eating your plow animals.

But that holds true if you let your neighbor borrow a loaf of bread or a bottle of wine. You don't expect them to return more than they borrowed.

Yes, but they are people you know. Also, the amount is small and the deferral is not for a long time.. Getting paid for deferred consumption makes sense when the amounts are larger, the time is longer or the dude you are lending to is not a friend or neighbour you necessarily like.

Truth be told you are getting something back when you loan a bottle of wine to your neighbour. Good will. Which may be useful for you in future.

People only borrowed when they were truly desperate. That was another reason why charging interest was seen as a bad thing. It was seen as taking advantage of the helpless.

Yes, I think it's possible that predatory lending (and the social fallout) was a problem that those societies could not cope with so they banned it completely.

More likely, the farmer can never repay the loan no matter..

Perhaps, but loans would make sense sometimes. It's not the case that nobody had any crop surplus to pay interest with. (They paid taxes after all).

I can easily see how in the ancient world, the negative social realities involved with money lending could greatly outweigh advantages in a 'steady state' economy. It require regulatory sophistication.

But, don't you think that in a hypothetical modern steady-state economy, highly regulated as it would likely be to prevent true predation, loaning at interest would still make sense?

I agree that it would be less common.

The reasons that Judaic religions like Christianity and Islam banned loans with interest was that if the farmer didn't get his farm back, then his children didn't inheirit the farm. So when the latest neighboring army came to visit, the landless people would just start walking away.
After your son was killed, your daughter was raped and rendered infertile, and your livestock killed and eaten or driven off, you still had no children to inheirit the farm and the landless people got it anyway. Or worked as laborers if the conquering neighbor decided to keep your territory instead of just raiding as a way to feed young men during a crop failure.
They called it a jubilee year, when all mortgages were deemed paid off and the family got the land back and essentially reinrolled in the village militia. About every 49th year or something.

Yes, but they are people you know.

That was the generally the case with borrowing money, too, in the ancient world.

Truth be told you are getting something back when you loan a bottle of wine to your neighbour. Good will. Which may be useful for you in future.

Yup. That is the "bank" that has been used for most of human history. We have a very keen sense of what we owe others, and what they owe us.

Perhaps, but loans would make sense sometimes. It's not the case that nobody had any crop surplus to pay interest with. (They paid taxes after all).

I'm not even talking about interest. Paying back even just the principle was difficult. They weren't going to do it in one year.

But, don't you think that in a hypothetical modern steady-state economy, highly regulated as it would likely be to prevent true predation, loaning at interest would still make sense?

No. Paying interest is not sustainable.

I think we'll eventually go back to the way we used to do things. Borrowing will be mostly from family, and only when absolutely necessary. People will pool their money in community groups rather than borrow from banks. They still do this in some countries. Sort of a primitive credit union. Everyone donates a certain amount of money into the pool, and a winner is chosen by lottery. The winner may use the money any way they like, but it's usually for something like starting a business, buying a house, or paying for a wedding.

I'll take a look at the article. It's from before my time. :-)

But another good argument for the likelihood of paying interest continuing in a steady-state economy is that they had to pass laws against it and enforce them in ancient Christian lands. And it still happened quite a bit anyway. ie. It didn't fade out from lack of purpose. Instead, they tried to stamp it out and failed despite all the laws and constant preaching against it.

My understanding is that lending at interest was common in ancient China.


Another link re China that mentions usury.

But another good argument for the likelihood of paying interest continuing in a steady-state economy is that they had to pass laws against it and enforce them in ancient Christian lands.

They had to pass laws against murder, too. Yes, some people will always try to charge interest. Loan sharks, if you will.

I've seen that article. IMO, it supports my point.

But the need for capital in the initial post-medieval movement toward globalism pressured the prohibitions on lending money.

It was globalism that made the benefits of interest outweigh the drawbacks. Access to new resources allowed growth, which made it possible to repay interest.

They had to pass laws against murder, too. Yes, some people will always try to charge interest. Loan sharks, if you will.

But it goes way beyond that. The medieval Christian lands, while forbidding it, also found ways to allow it. Their solution was to allow the Jews to do it.

And the Jews didn't waste away from lack of business!

We were well on the way toward globalization in the Middle Ages.

If we define globalization so loosely then we are in a bit of a pickle.

Because, before the middle ages, we have no Christian nations (except Rome ), no Muslim nations. We are eliminating our examples from upthread.

One thing we can say for sure. During the Middle Ages there were very substantial periods of decline and stagnation and the Jews continued to do a lively business.

Edit: well there were Christian nations, but not many 'civilized' ones.

I'm not talking about nations. The prohibitions against usury date from before the Middle Ages. IMO, religion was not the source. Religion merely reflects the economy of the times, it doesn't create it.

It ain't about the economics. It's metaphysics. It's about good and evil. Spelled out in too many encyclicals to keep arguing about it.

I disagree. What can I say, I'm a moral relativist.

And you are talking about a religious doctrine - usury - that existed at a time when such things as moral relativism were not discussed.

One more time. Money is sterile. Money cannot beget money. Generative power is in the biological realm.

If money is observed to generate new money, as in usury, the available explanation is that Satan did it. Best to leave any such dealings to the Jews.

All the amazing interpretations above are based on a rearward projection of a world just like ours except for a usury/no usury switch. And a reluctance to read history

Religion merely reflects the economy of the times, it doesn't create it.

Not in all cases. For example, the conversion to Christianity had a profound impact on the violence of the Viking culture.


Because St. Olaf speared the troublesome ones?

I think the argument that charging of interest was done only by social outliers who were viewed as being as evil as murders needs to somehow explain the fact that medieval European trading cities would invite Jews to the city in order to have bankers who could loan money at interest. The Christian businessmen could not loan at interest, but they saw the activity as a necessary part of a function trading center. What did they know about their situation that we do not?

One thing that they did NOT know was our modern concept of risk as an economic manifestation of numerical probability. I suppose one could argue that they 'knew' they needed money lenders without knowing why. But I find that unsatisfying.

I think it was a way of adjusting to the changing economy, which was becoming increasingly global. Just as Muslims find ways around the usury prohibition now.

Interesting stuff.

Though I don't understand how he could have spent "hundreds of dollars" each month in restaurants, when he hardly ever ate out.

"spent "hundreds of dollars" each month"

It depends on where ya go. I can fill my belly for $6 with pita and fries, or still be hungry at $90 for a set of food at the melting pot.

Other places are even more expensive.

Actually, from my perspective living in Germany, lack of population growth in Europe or Japan is seen as a much bigger threat to Europe's or Japan's future in American eyes, than it is in German eyes, at least.

The distinction between threat and problems is critical. Certainly a non-growing population brings challenges and unforeseen problems, many of which could be easily enough solved by simply having more children, and thus pushing those problems onto following generations. As the typical American answer to any problem seems to be let someone else deal with it, other societies finding other answers would then call into question basic American assumptions, or lead to Americans having to change how they live.

Which is why other societies learning how to successfully handle neutral population growth seems to be a road to the hell that is Eurabia, the favored fever dream of so many people who also believe that feminazis are lurking under their beds, having replaced the communists.

A small secret from history - population growth has a much larger connection to war than it does any thing resembling economic growth. When the French raise their birth rate, they aren't doing it merely for benevolent economic reasons - the French are also ensuring an ample supply of soldiers, since unlike Germany or Japan, the French still feel a military can pay off.

A number of Germans, however, have spent decades trying to understand how not to need large numbers of soldiers, and as the awareness of how old men require young soldiers for their dreams of glory and death is quite strong, any attempt to raise population growth rapidly runs against the fact that Germany has already tried that, at the hands of a political ideology that cared nothing about free markets or corporate profits. An ideology that worshipped power, not money.

I like the build back in Eastern Germany, tearing down apartmetn blocks and so on, letting whole areas just go back to nature, whole rural areas with no children and only old people. If one defines the problem as being how to keep the soical welfare state and consumption growth going then the populaiton decline is a problem but if it is PO/resource shortages and environenmtal destruction then populaiton decline is the solution.

I take it that "Eurabia" and "Feminazi" are standard American Neocon right wing phraseology. I avoid such chatrooms/websites. Interesting where people find and invent bogeymen though.

The French are purposely encouraging population growth due to the German wars and the populaiton in Germany surpassing theirs, making them weaker. Starting with year 800 or so the dominance in Europe swung back and forth between French and Germans over the centuries depending on such things as population and organization. France is trying to get back the upper hand as German population shrinks and theirs grows. Maybe in 50 years. It reminds me of Norhtern Ireland pop. stats a little as strategy to get independence. The German guilt complex has prevented any direct govt. policy promoting population growth.

In America with little history of conquest pop. growth is generally seen naively in terms of a general egoistic self satisfaction of human individual needs and not as a strategy for reconquest/domination (France) or guilt complex(Germany). The Russians regainde their prewar population first in 1970. According to generational/cyclical theory such naive focus on good times and growth as in America ends inevitably in war as growth eats up resources and forces expansion or civil war, famine, etc. when the resources run out.

Unfortunately, I think that to focus on eliminating/slowing down growth is unproductive. It would appear to me that population control/reduction is what is needed.

There is a logical contradiction lurking here. If we allow growth ad-infinitum and only concentrate on population reduction, we would have to keep reducing the population at the same rate we allowed growth. Obviously this leads to infinitely small population and infinitely extended growth.

A 'steady state' economy would likely have growth some places, steady-state some places and shrinkage in some places. Over a period of time, it would have to average the overall 'steady-state' to be indefinitely sustainable.

At what level do we become steady state? Sustainability is not possible at the current level of consumption, extraction, and production. Do we cut the economy in half?2/3? And what do we say to China and India, for example. Does each country reach the same steady state in terms of GDP? And who polices the steady state?

Let's face it. The only steady state or declining state that will occur will be because of collapse, not because of any voluntary action on the part of governments and individuals. We will continue growth until we go over the edge or can't breathe, whichever comes first.

Nobody knows for sure. My inference from various facts and figures posted on TOD over the past few months is that the US has a renewable resource base that could only sustain the present population at around 25% of present per capita GDP. Even that may very well be too high of an estimate.

We can hope for a soft landing that levels out there, but I'm not sure exactly how we would make that happen.

We have enough wind/hydro/geo, nuclear plants built and solar we could quickly build to run this country for a lot more than only 25% of the present population.
Solar is the only quick emergency ramp up that we can build. Nuclear light water as an intermediate step to gas cooled fast burners. Coal to be phased out as quickly as gas cooled fast burners are ramped in over the next ten years.
If you are thinking wood instead of nuclear and coal, then we will truly have to start living five families to a house and use body heat and superinsulation to keep us going. You can't use wood heat if we are turning the trees and corn into biofuels.

Solar is the only quick emergency ramp up that we can build.

Not really. $5/watt and only works in part of the country. Wind is $1/watt and has a quite large footprint. I'm not saying no to solar and in fact I'm quite excited to see that this Nanosolar thing might actually work, but I think your statement is incorrect.

Concentrated photovoltaic is the fastest emergency rampup, not the cheapest long term supply.
Wind is cheaper but you have to have more large cranes, more large filament winding equipment, more forging and machining ability for large gearboxes, etc. Those are just the easiest to establish bottlenecks.
In general we have had experience in ramping up production of new industries in WWI and WWII. The first year nothing, the second year a trickle, the third year enough, the fourth year more than enough.
We should build at least as much windpower as hydropower. We should build at least as much nuclear as coal power. We should start now because it will take five years to make any kind of impact and ten years before we can start shutting down the coal burning plants.

Both your comment and SCT's ignore the fact that low temperature solar thermal can provide an enormous amount of energy to end users. As Amory Lovins pointed out decades ago, the end use is the most important consideration, not the supply. The only way to approach the future is to match the end use with the source and hot water or building heating needs can be supplied directly by solar thermal. There's absolutely no supporting logic to use PV to heat air or water when the temperatures required are only a little above 100 F. To think in such terms is to perpetuate the ignorance of thermodynamics we so often see in the general population.

E. Swanson

Good point. I was just talking about electricity.
Have you considered just building a triple pane greenhouse over the houses in the northern states and just taking down the windows every summer? Grow oranges and other subtropical crops in North Dakota?
Yeah, insulation and ground heat pumps are the way to go for warmth, water table cooling doesn't hurt if it's available, and photovoltaic is only for electricity to run the pumps.

Don't be silly, of course it is possible to have savings (aka a surplus) in a zero-growth economy. Just consume a little less, and what is left over is your savings. Throw one less log in the fire. Save back a few beans and make the soup a bit less thick. Use a pinch less flour in the bread dough. Mend the socks yet once more instead of replacing them. Such trivial little savings, accumulated day after day, eventually yield an investable surplus.

Remember "David Copperfield"?

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Now, of course, it sounds silly. How can spending a mere six pence more than you make result in misery? Just put it on plastic!

The trick is for someone to articulate a theory of frugal consumption combined with economic sustainability

such a theory was precisely articulated by Lao Zi (or Lao-tsu) in very few words.

now Lao Zi is the Chinese philosopher 6 century B.C. not as the interviewer of Marc Faber (the one WT mentioned in the above posting) stated as 6 century Chinese Poet - what a joke! - and it is interesting to see how meanings can be twisted through translations:

Lao Zi: those who know, don't talk, those who talk, don't know.
Lao-tsu via Faber: those with knowledge, don't predict, those who predict, don't have knowledge.

now look who is talking...

tstreet: yes, a gradually increasing adoption of ELP by the public would lead to a gradual decline in economic activity.

The sad fact of the matter is that due to peaking of energy and other resources, the US material standard of living MUST decline. That is not optional. What is optional is whether that decline is gradual and controlled, via ELP, or more socially disruptive due to BAU right up to a deflationary crash.

Futher, I will suggest that ELP provides at least have the illusion of free will, which is much easier to stomach emotionally than riots and breadlines.

Errol in Miami

I would definitely count on riots and breadlines. No politician will ever promise the people a declining standard of living. We will be told we can have it all and even those who seriously believe we should do something about resource depletion and global warming, like AL Gore, will continue to promise us we can have it all.

And btw, it clearly doesn't matter who gets elected. Another election. More Kabuki.

Republican or Democrat are simple bacterial mats grown on an icky substrate of Corporatocracy at this point. The whole mass is attached to the surface of the earth - leading terms of the equation describing its trajectory are economic collapse, peak oil, and climate change. There is no other ideology at this point, except for that espoused in the kabuki tstreet notes above.

Forgive my ignorance, but what does ELP stand for? After a few weeks of lurking and soaking in the collective expertise, this is one commonly-used TOD acronym that still escapes me.

Economize, Localize, and Produce.

"Economize, Localize, Produce" - WT's brainchild

Eat Lots of Produce?

Re; Inflation

WT please read my response late in the discussion.



I think it quite likely that there is still way too much of an optiimistic bias factored in.


ELP should refer LaoZi as the origin and then you may find ELP is not as complete. -_O

'Perhaps the markets are not properly discounting future earnings'

WT, that is the most prescient sentance that I have read on this board today...Which brings us to the next obvious question...Why are the markets not properly discounting future earnings? Perhaps its because none of the players have seen these circumstances in credit markets before and they believe that if the Fed continues to cut rates that the problems with credit and liquidity will solve themselves...I do not believe that Fed actions will work. The players will soon lose faith that 'things will continue to get better...that there will be continual expansion'...fear is beginning to set in, faith will be lost, the house of cards will fall.

...snip...'The battle in financial markets is currently between reflation and deflation. THE REASON REFLATION IS NOT WINNING IS BECAUSE THE FEDERAL RESERVE IS POWERLESS TO MAKE BAD DEBT GOOD. The Fed can only provide liquidity, and then hope that liquidity spawns credit creation. The market is fighting this by taking that liquidity and using it to deflate, pay down debt'...snip... (caps mine)

'A Debt Crisis Reduces Access to Credit...

... And so we begin to see credit availability in other areas dry up. Sallie Mae (SLM) said recently it would cut back on lending to students due to a combination of credit market turmoil and changes to federal law'...snip...


'The "Real" Fed Model

The LA Times back in December took a look at auto loans. What is astonishing is how clearly the Fed's credit paradigm has been adopted by the auto loan segment.

The length of the average automobile loan hit five years, four months in October, up more than six months from 2002, according to data from the Federal Reserve. And nearly 45% of loans written today are for longer than six years, the Times noted.

Meanwhile, the amount of money drivers owe on their cars increased more than 10% in the past year. The Times article reports that today's average car owner owes $4,221 more than the vehicle is worth at the time it's sold.

Yet, how has the auto loan industry responded? By extending loans further and allowing consumers to roll old loans into new loans with longer terms to avoid the shock of an increase in the monthly debt service obligation. The net result is that drivers are in many cases paying a loan on two or more cars simultaneously.

"From the point of view of those who sell cars and car loans, long-term loans are good for business and good for buyers," the Times says.

No, actually, it's not. Like the car buyers, the car loan lenders in this case are also borrowing from their future. Eventually, these loans have to be repaid; these people will eventually reach the end of their borrowing capabilities. By delaying the day of reckoning, the auto loan sellers are simply adopting the same model of liquidity expansion as the Fed. They too, like the Fed, will ultimately meet a wall of resistance.'


River - Actually I am going to ask a serious question. Really, and I am not trying to inflamatory. And, it only has to do with economics - of which I have very limited knowledge - 15 hours.

My question relates to the moment before Hitler seized power in Germany in 1932. Germany had no wealth, no national reserve, no positive trade balance, and was economically cut off from the rest of the world, which was in the starting stages of the Great Depression. I remember the "guns or butter" taught in economics 101. Now my question - in six years, how in the hell did Hitler get all of the money to build a war machine equal to none (including the US) by 1938 (only 6 years), have no unemployment, have everyone making lots of money, buying new houses, buying cars (built the Autoban)etc.? He was enormously popular, not because of his politics, but because the German people were in a huge depression from 1918 until 1932, and in 6 short years, they probably had about the highest standard of living in the world. The 1936 Olympics were the first "country 'showcase'" Olympics ever.

So, when I look at where the US is today, and the "subprime" mess (trivial in comparison, in my opinion), it seems fairly presumptive to think that this country cannot be saved by printing money. And, I say that out a gut feeling that printing money is what Hitler did. I never have read where he raised taxes on a destitute nation (war reparations were so onerous that the country was bankrupt) to get money for the military. In fact, that is why after WWII, we had the Marshall Plan that gave money to Germany to rebuild - the idea being that "reparations" yielded a Hitler.

Didn't he disenfranchise a segment of the population and take their businesses, their houses, their bank accounts... as a last resort, even their lives?

maybe he stopped reparations, took back the occupied ruhr with its coal and iron ore mines, made a centralized command type economy(with the insdustrialists in charge) and went on a war footing. Draw down of resources, coal and iron ore, makes for a fast built war machine. France for example is low on coal so uses nukes. WWII would not have been possible from France's side as aggressor. America could still do it or China as they have massive coal if they want a linear military buildup and forget the consumer society setup during a future Great Depression befoer coal depletion in say next 20 years.

printing money is what Hitler did

quite the opposite.

Hitler printed money. He ignored the convention that you had to balance your books and just fired up the printing presses..

Here is the problem but.....

Germany had lots of resources and the population was sitting on there asses. Printing money worked fantastic people started producing and buying stuff. Hitler in many ways is responsible for the way our modern economy's are managed.

Now we have resource depletion and a population thats thinks it busy. The opposite to Hitlers problem of 1932. printing money this time is going to do something very different....

He forced people to "save" money to pay for his army and air force and navy. He used that army and air force and navy to extort and steal money from the rest of Europe until 1944 when his armies were forced mostly back into his own country. In 1945 he defaulted on his debts in the ashes of Berlin.

in six years, how in the hell did Hitler get all of the money

Snarky answers:

Germany wasn't using REAL money - gold.

From a US Congressman!

JBunt, The rise of the third reich is a very complex story, too long to relate in a post.

If you are interested in 'how Hitler did it' I suggest you read 'The Rise and Fall of the Third Reich' by William L Shirer. It is quite a tome but worth the effort if you are a history buff. Meanwhile, you have some misconceptions about how well the 'workers' fared under the Nazis. There were no McMansions, almost no private ownership of autos, only subsistance wages after all the deductions were removed from ones pay, they did not have the higest standard of living in the world, they had no right to complain, no raises, nor the right to change jobs. The 1936 Olympics were financed by the huge industrialists of Germany, the same ones that financed the rise of the Nazi party when Hitler cut a secret deal with them to bust the unions. The real secret to the rebound of the German economy can be laid at the feet of one Dr. Schacht, a brilliant economist and deal maker extrodinaire.

I sometimes wonder where our Dr Schacht is, or, where is our Putin?

Economics, Ministry of: Pgs 259-62, 310, 320, 497, 759. I will quote (and paraphrase) a few passages from pages 259-62:

'The foundation of Hitlers success in the first years rested not only on his triumphs in foreign affairs, which brought so many bloodless conquests, but on Germany's economic recovery, which in party circles and even among some economists abroad was hailed as a miracle. And indeed it might have seemed so to a good many people. Unemployment was reduced from 6M in 1932 to less than a million four years later. National production rose 102% from 1932-37. The wheels of industry were humming and everyone was as busy as a bee.'

(paraphrasing) Hitler was ignorant of economics and detested the subject. Dr. Schacht was running the economy and he put people back to work by greatly expanded public works and stimulation of private enterprise. GOVERNMENT CREDIT was furnished by the creation of special unemployment bills, and tax relief was generously given to firms which raised their capital expendituires and increased employment.

But the real basis of Germany's recovery was rearmament, to which the Nazi regime directed the energies of business and labor-as well as of the generals-from 1934 on. The whole German economy came to be known in Nazi parlance as Wehrwirtschaft, or, war economy, and it was deliberately designed to function not only in time of war but during the peace that led to war. General Ludendorf, in his book 'Der Total Kreig', stressed mobilization of the German economy on the same totalitarian basis as every thing else in order to prepare for total war. (This was not a new concept for in Prussia during the 18th-19th centuries seven fifths of the entire economy was spent on the military and the entire Prussian economy was not used for the peoples welfare but as an instrument for the military.)

Dr. Schacht was a very brilliant and efficient economist. Hitler chose well then stepped aside and let Schacht go to work. 'Schacht explained to Hitler that "it was necessary to use the printing presses" until March 16, 1935, when Hitler announced conscription for an army of 36 divisions.' (this was a tiny army compared to Russias minumum of 380 divisions-though this is not well known even now and was not known by Hitler at the time). 'Schacht also pointed out with some glee that the funds confiscated from the enemies of the state (mostly Jews) and others taken from blocked foreign accounts had helped pay for Hitlers guns.'

'All of Schachts admitted wizadry in finance was put to work to pay for getting the Third Reich ready for war. Printing banknotes was merely one of his devices. He manipulated the currency with such legerdemain that at one time it was estimated by foreign economists to have 237 different values. He negotiated amaxingly profitable (for Germany) barter deals with dozens of countries and to the astonishment of orthodox economists successfully demonstrated that the more you owed a country the more business you did with it. His creation of credit in a country that had little liquid capital and almost no financial reserves was the work of genius, or-as some said-a master manipulator.'...snip...

'In 1936 Germany went to a 'four year plan' and Schacht was replaced by Goering (who knew about as much about economics as Hitler and, imo, replacing Schacht was the first disasterous mistake Hitler made).' The four year plan was to make Germany self sufficient for war time and giant factories were built for the production of everything. All industry was buried under mountains of red tape and innumerable regulations. The businessmen, who had welcomed Hitlers regime to destroy the trade unions, had become mere cogs in a war machine. The businessmen that thought they could control Hitler were mistaken and greatly disallusioned. Fitz Thyssen, one of the earliest and biggest contributors to the party fled Germany at the outbreak of the war. Thyssen recognized that the 'Nazi regime has ruined German industry' and to all he met abroad he exclaimed 'what a fool I was.'

Other points of interest:

Labor had no rights and were to 'be faithful to their employers'.

Wages were set by employers and Hitler stated that 'wages are not to be raised except solely by an increase in performance'. Since most workers were paid on piece work a wage increase would come only by working faster and longer hours.

A sober study of the offical statistics revealed that the much maligned capitalists , not the workers, benefited most from Nazi policies.

Labor became bound to their jobs by the state. The peasant was bound to his land by the 'hereditary farm law'.

'Tied down by so many controls at wages little above the subsistence level, the German workers, like the Roman proletariat, were providd with circuses by their rulers to divert attention from their miseratle state. 'We had to divert the attention of the masses from material to moral values', Dr ley once explained. 'It is more important to feed the souls of men than their stomachs.'

In summation, 'The Rise and Fall' is a wonderful and very entertaining history. If one can get a copy it is well worth the time to read it. There are so many fascinating stories, like how Hitler swindled the German working people with the Volkswagen ownership plan. The workers of the Third Reich, probably the most technically skilled and trained in the world, and definitely some of the hardest workers, were glad to have jobs again after having only the freedom to starve under the republic and ornerous reparations, jobs and food will trump politics every time.

River - That is one of the problems with getting old. I read the book in 1962, but I have forgotten most of it, including the economic history. In fact, I went into the Army in 1962, and I just left the book behind, which I no longer have. But, to some extent I believe that that there may be a relevant point: if smart people are in charge (like Schacht), printing money in the right amounts and at the right times can bail a country out of an economic problem [combined with other intelligent economic actions (although not necessarily moral actions)]. And, it also in some way calls into question the economics 101 preachings of guns versus butter - i.e., you cannot have both. In 1938, for some reason, the majority of the German people had both.

It was especially surprising the way all the capitalist controlled countries gave vast amounts of low interest rate, no payments for several years, no documents, etc, loans to a country that seemed based on the idea of using the money to build up a large army and attacking Russia.
Then again, maybe not so surprising.

Future earnings post-peak: What types of industries do not need much energy to do what they do?

What sorts of products will people buy more of post-peak?

For example, sail boats will become more popular.

Also, scooters will become more popular.

I would expect higher sales of winter coats too - unless people migrate south away from areas where they can't afford to heat.

I Got What America Needs Right Here

By Jimmy Carter
January 9, 2008 | Issue 44•02

Sometimes I'm a little stupid, maybe, a little slow in the head, so I'm wondering if you can help me get something straight.


LMAO you'll luv it.

A semi dead Jimmy Carter would be a thousand times better than a very live and kicking George Bush. Jimmy Carter, loathed, despised, and humiliated all these years, could run circles around most of the current crop. Yes, we need change, but much of that would be satisfied by going back to the future. America couldn't handle the truth when Carter was President and can't handle the truth now. No one ever lost an election by offering a free lunch.

I survived the 1970's. It was a horrible decade and Jimmy Carter was a horrible president.

I disagree. It was a dynamic decade, alright, and some people interpret that as "horrible". Carter was a good president, as far as he was allowed to be. WRT energy issues, he was miles beyond any other politician at the time.

Jimmy Carter was the best president since Eisenhower IMO. Told the truth for the most part and didn't kill many people. I judge a president by how many people are killed during his watch. It's hard to avoid killing a few, but the mass slaughter of LBJ, Nixon, and Bush II make them among the worst. Also, it was Jimmy Carter that appointed Paul Volker to head the Federal Reserve. Volker cured the rampant inflation of the 1970's by high interest rates and a severe recession. The credit is given to the first president with alzheimer's though. Fortunately Reagan had Nancy to tell him what to say and make sure he kept his hair dyed. Carter has made the best use of time since he left office of any president in history IMO.

WE need someone with the cahones of a Volker right now.

John Quncy Adams would give Carter a run for the money as best ex-president.

Have you read Secrets of the Temple by William Greider?
Shows Volker in action, and is the best history of the Fed.

No, Looks interestng by the comments on Amazon, and could change my view on Volker. I'm looking for a book to read right now so I'll look into it. Thanx.

here is something fairly recent by the same author, I'll see if I can find a link to the temple.

The Divine Right of Capital

practical, I so agree. Both Carter and Volker understood leadership, as oposed to pandering and posturing.

Reagan wasn't president when he was president. He wouldn't have seen the inside of the white house except on a tour if he didn't take the head of the CIA to be his VP. George Bush Sr. Who were the people around him? Same of the same names we have today.

Cheney wasn't the first VP to use his power in the background.

You were probably that lone 'Young Republican' on campus they gave a closet to for an office. Because you were viewed as sub-human by the majority of those around, you have developed a life long hatred for those that despised you and 'want to see them pay'. For everyone else the '70's were a wonderful time, full of hope for a better future. Unfortunately, TPTB reasserted themselves in the '80's and turned the planet into the hellhole it is today. Proud of yourself?

LOL - that's sort of what came to my mind, but I think I gave a kinder, gentler response - LOL

You are describing the campus milieu that created Karl Rove, the (powerful) Young Republicans and the Federalist Society.

Why was that such a successful project?
I could answer my own question, but it scares me.

Are you suggesting that we should have "mainstreamed" those jerks? Ewwww.

I thought they mainstreamed themselves. And won.

Yes, the 70s were the last decade of hope. Misery? Definitely not.

For a substantial fraction of the people in Rust Belt states the 1970s were horrible. Huge rates of unemployment.

Carter: Energy price controls and lines at gas stations and all that stupid stuff. Oh, and sanctimony.

You lived thru a different 1970s than I did. In Rust Belt states lots of our fathers got laid off. Factory and construction work plummeted. We went thru one recession after another. Stagflation. Gas lines. Alternate days to buy gas. Gas stations closed. Car performance went down along with quality. Plus, we got to hear Jimmy Carter preach to us about our malaise.

Then came disco music.

I graduated from high school in 1976.

I was encouraged at the time by President Carter's vision for the energy future of the USA. I was glad that we had a President who was willing to simply tell it like it is and lay out very practical plans.

The future looked bright with lots of jobs in the emerging renewable energy field.

When Reagan came along with his anti-communist fear-mongering and phony "Morning in America crap, I was confused at first, but then recognized it for the fascism it was.

I think I read Bertram Gross "Friendly Fascism" when it came out in 1980. American fascism has had US politics in its grip since Reagan.

No vision for peace. The Fascist vision is for perpetual war.

Hope, prosperity, and especially equality are not acceptable to the authoritarian personality. The 60's and 70's were disturbing and frightening to established power.

So they decided to put the world back in order.

If you are the OldHippie then you will remember these guys.

Here's an exchange between representatives of both sides of the struggle you mentioned and the lesson learned as you said.

Leary "...During the Sixties an undeclared civil war took place and the right side won."

"Yeah, my side," says Liddy. "And we're not about to let it happen again."

THAT'S when the start of the control of all media to a few companies became an objective of the people who Liddy was talking about.

quote from;

Ghosts of Tim Leary and Hunter Thompson


'America couldn't handle the truth when Carter was President and can't handle the truth now.'...How unfortunately true those words are.

'The Curse of Unreality
by J. R. Nyquist
Weekly Column Published: 01.11.2008

Six years ago, in her magnificent running commentary on life in Washington, D.C., Meg Greenfield wrote, "What is overtaking Washington is what has overtaken so many sectors of American society: an all but total weakening of the authority of those who used to wield it...." She also explained that image-making had replaced authority with a "new, atomized life ... unmoored from reality...." This "virtual politics" is carried on by candidates whose real qualities are hidden. What we see is a simulated, camera-ready leader who struts onto the national stage.

According to pollsters the American people have certain expectations. Influenced by television, the culture is obsessed with imagery. A candidate needs a certain look. It is necessary for him to mouth the shallow half-truths of the hour. Vital political energy is spent on fabricated political positions, so that the public is diverted by an unreal parade while grave dangers remain unacknowledged. Real debate, real issues, real problems cannot be discussed let alone solved because the "actors" running for office have rehearsed a performance that has nothing to do with the dangers that confront us and everything to do with feeding our hunger for fantasy, for easy answers and slick solutions.

Greenfield thought that the political process in the United States was headed for a grand disconnect. "Virtual life," she wrote, "is one prolonged encounter not between the public person and his colleagues or constituents but between the public person's image and the image's supposed audience 'out there.'"

Madness necessarily follows from the interaction of the image-man and his imaginary "public." You see, the public is an unreal monster. It is the job of pollsters to describe its mood at any given moment, but their descriptions shift as the monster continually changes its mind (though it really doesn't have a mind). There is nothing stable, nothing fixed, nothing steady in this monster. And yet, today's successful presidential candidate owes his ratings to the fact that he tells this monster what it wants to hear'...snip...

It will be worth your time to read the remainder of this column...


Look at the financial world as a hot air balloon.

The Propane tanks are the energy. Turn them on and the financial/commerce world starts to "Inflate", the balloon when filled rises and expands.

When the energy in the system (propane tanks) run out. The financial/commerce world will "Deflate".

Total Energy in the system to use = Total Work/Motion/activity in the system.

Lower one side of the equation, you automatically lower the other.

But the principals on the debts don't co operate by lowering as well. You want to go into such a contraction in the least leveraged position, which the US is not. A debt service problem of massive proportions, probably requiring that odious concept of government make work. This time let's have a solar project, not another war.


2008-01-11 — wallstreetexaminer.com

In effect BAC paid $4 billion to assume $194 billion in liabilities, and $209 billion in fictitious capital. I do not expect the rubber to ever meet the road on this deal. I would guess CFC true value as this plays out at negative $50 billion.

Half of this post was written before the takeover was announced as a done deal -- very prescient and impressive work by Russ Winter.

original article


The R word turns into the D word (which will never be uttered)
as we ration free energy to failed status quo entities.

Unfortunately for your analogy, propane is heavier than air, and your filled balloon will sink rather than rise.

Propane is used, in this situation, to create Hot Air. Something we have a plethora of in D.C anyway...

I think you're supposed to ignite the propane.

Yeah, I'm sure I saw that in a Bruce Willis movie once.

I've used that same analogy before, only, with a bit more realistic construct.

The economy is like a hot air balloon, in that energy is required to keep it aloft. However, there are more and more people added to the "basket" every year, therefore, the balloon must be continually enlarged. That implies that the flow of energy required to keep the thing in the air continually increases, as business as usual means building the balloon the same old way. If the balloon were to be rebuilt with more insulation (i.e., using various conservation improvements), then less energy would be needed to keep it flying. However, that would mean jettisoning the old, inefficient sections of the balloon as the newer, more efficient parts were added. And, the process would need to happen faster than business as usual, to reduce the energy needed to keep the old sections aloft.

But, we know that the energy (oil, that is) is going to be in short supply relatively soon. Thus, we had better get our act together or the balloon will crash long before the conservation and renewable efforts begin to dominate. That was the obvious situation 32 years ago, after the OPEC Oil Embargo. Then, Reagan was elected and killed the solar industry and the Saudi's flooded the market with crude and I about gave up.

E. Swanson

I had a similar (but no wear near as articulate) bling moment.

Warning; Very general. I take a lot of liberties.

A trolls attempt at the big picture.

So we start out as hunter gatherers where everyone had a direct, hands on part in providing the necessities of the community and therefore had a connection with nature and the resource base.

Developed Ag. and started putting up (locking up) the surplus, freeing up some to pursue other things of value to trade for their share of food.

Got more efficient at producing freeing up more people and allowing the population to grow. Established a gold based monetary system to facilitate increased trade.

Industrialization and the introduction of fossil fuels allows for a smaller portion of the population to be involved in producing the necessities while at the same time the population as a whole grew exponentially (sugar dumped on the petrie dish of yeast). Gold-based monetary system is not able to keep up with the growth so naturally, system switches to oil-based monetary system.

Then industrial agricultural society where only 2% of the population is responsible for the production of food leaving the other 98% clueless about nature and the resource base. Oil-based monetary system deemed still too slow to meet the demand (wtf?) so all regulations are tossed out and DEBT-based monetary system goes on a tear.

Fossil fuel supplies, which have been by far the #1 driver of the bulk of population growth, growth of the monetary base, basically all growth, ceases to grow.

Debt proves to be inadequate in taking over for FFs as a source of value, energy, or anything remotely life sustaining therefore debt-based monetary system ceases to grow.

Natural resources across the board, in addition to the natural environment in general, show signs of being unable to support growth.

All economic activities and the people dependant on the expansion of the monetary base, particularly the debt –base monetary system, IMO a huge % of the population, ceases to provide any benefit to society yet still continue to consume and in fact because this faction has benefited the most from the recent expansion of the debt-based monetary system, they tend to over consume, relative to the median.

A pretty strong case for deflation (and for lining up bankers, speculators, traders, financial advisors, etc. against the wall? Kidding:-)


The majority of financial activity, and most likely all big business going forward has the net effect of simply SUCKING the life out of less well off.

In other words Business as usual.


Sadly I think it is a far less radical statement than it might appear to many people (most people in the US) but MOST big business today has morphed into operations that such the life and resources out of the less well off.

I think a big part of this is not understanding the whole wisdom-of-crowds type thinking. Effectively corporations become machines made up of a collection of different people's thoughts and actions but few people really seem to understand the programming. And the programming is actually simpler and has little to do with the company's stated goals. In reality the one requirement is to return interest on debt. Much investment in companies may not appear to be debt but ultimately in the way that all of our money is effectively debt based it is. And any return to investors is really paying interest on the initial debt that created the investment money in the first place. As money is merely a proxy for resources that means sucking up resources and spitting them out at those who started with most resources in the first place (and therefore had the capital to issue the initial debt).

Not really radical thinking. In fact many here probably think what I have put there to be so obvious as to be unhelpful, and certainly my ability to spell it out clearly leaves something to be desired. But the point is most people wander around oblivious to this and are surprised or shocked when the net result is corporations that are sociopathic actors in the affairs of men.

nice. I posted this to my hard drive under my initial posting. thiseliminates the economist gobbledygook jargon.

Thanks surfer - I forwarded yours to a few folks I know who couldn't hear my version but opened up with me upon reading what you pecked out.


I am certainly quite thickheaded but the message is finally beginning to get through.

I also am thickheaded and rather slow on the uptake. I'm beginning to understand the import of the phrase 'credit contraction'. One thing puzzles me though. I can understand why loose credit is temporarily inflationary. It is temporary because all those dollars are debt encumbered dollars (DED). And when the loans are called in, in a society wide aggregate way, the DED's disappear and the amount of $$ in the economy drops, possibly rather sharply.

The thing that puzzles me is the notion that debt defaults are considered deflationary. I can see that debt defaults leading to contraction of credit would be deflationary. But it seems that a debt default is really the only way of getting non-DED's into the economy. If the bank loans me $1000 and I default on the loan and the end result is that the loan is 'forgiven' then there is $1000 more non-DED in the economy, i.e. an inflationary situation.

While I don't think there is any (at least overt) way it would happen, it seems the most effective way the Fed could inflate the economy would be to make tons of loans and then forgive them. This would be effectively a 'helicopter drop' of money on the economy. Otherwise they are pushing on the proverbial string.

If the bank loans me $1000 and I default on the loan and the end result is that the loan is 'forgiven' then there is $1000 more non-DED in the economy, i.e. an inflationary situation

As I understand it, the $1000 becomes a loss on the banks books which effectively cancels out the $1000 which contracts the amount of money in existence. It also means the bank has to reduce any further loans to some degree. If a bank loans out $100 for every $1 it actually has, then a $1000 loss could theoretically reduce lending by $100,000 causing a credit contraction.

The overall reduction in the money supply due to losses and reduced credit availability cause deflation. Less money is available to repay loans and interest, or to buy goods causing further defaults and reductions in the price of goods and services. For example companies will sell inventory and individuals will sell whatever they can to raise cash causing a glut of goods which overwhelms demand forcing down prices.

As for the Fed, it is a bank, it cannot give away money without destroying itself, just as with any other bank. It is powerless if no one wants to borrow money. This is why the big banks are looking to China, Singapore and the Middle East for capital to cover their losses. The Fed cannot or will not give them the capital they need so desperately.

The Fed cannot or will not give them the capital they need so desperately.

The Fed can give away money. While they have never done this, it within their charter. Calling the Fed a bank is a misnomer. The Fed can literally create money out of thin air by making an electronic transfer into someone's account. They can electronically transfer any amount to any entitiy. This money literally can be created out of thin air.

The thing to understand is that the Fed cannot lose money on loans that are created from thin air. However, they never do this (give money away) because it is highly inflationary.

It is commonly believed that the Fed needs to have collateral to make a loan to a bank. But that is not true. The collateral can simply be a promise to pay.

The Fed has extraordinary powers to create money. In addition to making loans to banks, they can purchase US Government T Bills. These purchases are made with electronic transfers into Government Bank Accounts. These purchases are made from money that does not exist. The electronic transfers create money out of thin air.

This is why I am leary of deflation. While we are going to see trillions of dollars evaporate from losses over the next few years, this does not guarantee deflation. The Fed can always print money. As much as they desire. What will they do? I don't think anyone knows.

My guess is that we get inflation in energy and food prices, but deflation is most of everything else. I think overall, we will have deflation (as far as prices go). But the argument for hyperinflation is just as good a guess.


surfer, you are quite correct: decine in available exosomatic energy will always result in a decline in exosomatic activity (the 'economy'). There is no way around a decline in the US material standard of living.

Errol in Miami

RE: Californis Seeks Thermostst Control

The PCT (Programmable Communicating Thermostat) is a good idea if this helps utilities lower peak usage and avoid system shutdowns. If this PCT is coupled with a serious energy efficiency upgrade on a house to house basis, a brief shutdown of heating and cooling systems will have little effect on indoor temperatures.

I think I'd like a thermostat with a tiny arbitrage computer that switches me to the supplier with the best 'deal', now that we have deregulation.

That's what the Californians need.

If we are to conserve energy in this country and encourage people to use less, the utilities have to adopt an "increasing block rate structure". Those who use more energy pay increasingly higher rates, those who use less pay less per unit of energy.


Best hopes for rail systems that are not like this...



Yikes. The technical details are hopelessly garbled, but I can only marvel at the incompetence and stupidity of the designers and the reckless cheapskate approach of the managers of the signaling and control system. Considering that European countries overflow with petty tyrannical laws prescribing every minute detail of life down to when and how to sweep the basement steps, I wonder how this could happen.

I still don't know about all this rail stuff, though. Europe and Japan are packed wall-to-wall with people to a degree absolutely incomprehensible to most Americans outside New York City. By the same token, Europeans and Japanese come over here, gawk at the vast wide open spaces even east of the Mississippi (!), take bazillions of pix, and say over and over again in an awed whisper that they had no idea.

That changes everything: Alan might, for example, have one concept of a dining car, but many in North America would have an entirely different and much more automotive concept.

Don't forget, that system may well go back to communist days. The Soviets had the same "this quarter's quota" mentality that destroyed American industry.

I think we should have low hopes for light rail. See this page at Figure 1: Motorised Travel (passenger-kms per capita per annum) in 2003 where it compares many European countries for public transport use. In spite of gasoline prices more than double that of the United States at least 90% of passenger miles traveled on the ground in Europe are done by car.

Most people will shift to diesel cars, electric cars, and scooters before shifting to light rail.

"Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or down through a radio-controlled device that will be required in new or substantially modified houses and buildings to manage electricity shortages."

Is anyone else as disturbed by this idea as I am? Governments are notorious for underestimating the effects of heat on the population. You should read about the 1995 Chicago heat wave that killed 600 people. Some of the beauracrats first found out about the bodies piling up in the morgue when they were being interviewed by reporters! You would think governments would learn lessons from these case studies but no; 35,000 people died in the European heat wave of 2003.

Now these people are going to take control over our thermostats in a state where, in some places, the temperature routinely goes over 110 degrees fahrenheit during the summer?! Their incompetence is only surpassed by their arrogance. They help you just enough so that you are dependent on them, and then they make you suffer for your helplessness.

Each of us is on our own; the way out of the energy crisis is not through collective action. Collectivism only distributes the pain to the unaware. Everyone reading this better start figuring out your own solutions otherwise your f*cked.

Keithster, I was in Chicago during that heat wave, and the deaths were not attributable to the government and your comparison is misplaced. Most of the people were elderly shut ins. An old man died right down the block from me. If anything the insular nature of today’s large cities, where no one knows, wants to know, or even gives a damn about their neighbors is largely to blame. So what was the government to do in this case? They had cooling centers such as libraries open 24 hours a day for those that need them. If a person is old shut in with no working phone or caring relatives it is hard to see how the government could have made a difference. It was sometimes days before these people were discovered, usually by a postal worker noticing odor and flies in the windows. This never would have happened in the Chicago of 1960 when everyone knew his neighbors and cared about them. In fact back then the precinct captain would have been walking the neighborhood to see if everyone was all right. You bash collectivism (I do agree collectivism has many faults), but it is individualism, in this case the lack of concern about one’s neighbors, that killed people.

Which would you rather have, some air conditioning or no air conditioning during those hot months in the desert (i.e., Southern California)? If the electrical system goes into overload, it will be shutdown. Maybe all those folks shouldn't be living in the desert in the first place. Maybe the arrogant ones are those who moved into the desert and expected that they would be the only folks there, then complained when the next wave of immigrants arrived (and the one after that, and the one after that). Besides, those heat waves you mention were unusual and might be the result of AGW from using all that fossil energy to make electricity and drive cars around places like LA, in which case, things can be expected to get worse.

E. Swanson

Based just on what little I've read on the web my understanding is that the proposed thermostat would allow the minimum set point for the Aircon. to be set by radio. If thats the core of it then could it not be spoofed by something as simple as warming the thermostat i.e. putting a floor lamp with a 150 watt bulb or something right next to it to make it think the house is warmer than it in fact is? or hot wiring the control wires from the thermo. to the aircon. with a simple "override" switch?

Could it be that someone in gov't actually thought this half baked idea through and thats why they now seem to be taking the position that the radio command will have a user bypass?

There was a user by-pass all along. Only if the grid was at the breaking point would the user bypass be bypassed. IOW, if the alternative was rolling blackouts.

Yes, it could easily be bypassed. But I think most people wouldn't bother. Probably most people wouldn't even be home during peak usage. Their aircons are keeping empty homes cool, for the benefit of the cat, or so the homeowners don't have to be hot and uncomfortable for half an hour when they get home.

And even if they are home, I think most people want to help. There are always a few selfish jerks, but most people will comply when the power company asks them to conserve.

And yet somehow I still see this as yet another of a bazillion ever-more-creepy big-brother intrusions eminently worthy of listing on Matt Savinar's site. And it's for the mere purpose of making it easier for corrupt politicians to drive the grid further into the mud by surrendering abjectly to selfish NIMBY and BANANA jerks who still demand an exploding population so that they can have dirt-cheap sun-dried tomatoes and nearly-free lawn service, but fiercely oppose every attempt to provide proper, reliable infrastructure to support that population. Without the creepy controls, they'd have to tell the NIMBYs to stuff it, and just build the infrastructure - which IMO is what they ought to be doing anyway.

This NIMBY and BANANA line is about as useful as Reagan's Welfare Queens in Caddys. Too easy a group to despise, which doesn't actually exist 'as such'.. Limousine Liberals, Joe Sixpack etc..

That said, the Big Brother intrusions are, I agree, devices borne out of fear and desperation to control a crashing system without offending anyone.

Real ID and the RF Animal Tags are the ones on my mind this week.


"Some states have signed written agreements saying they will comply with the requirements of the Real ID Act, but 17 states have passed legislation or resolutions specifically objecting to the requirements. AP has more."

The intelligent control of the system is a very beneficial thing - you participate, or you pay an increased rate - say 25%. The system modulates energy usage - gone during the day? Your house is allowed to warm - just set your return time. Business during the day? The AC is set to end an hour or so before close. We can squeeze 10% of our the system right away just by actions like this, which a few folks are doing now on their own.

The same principle applies to power line capacity. This varies based on the ambient temperature and wind speed but we consistently run our power grid at maybe 90% of capacity to avoid line sag issues. If we had a thermometer/anemometer on top of ever fourth power pole we'd expand our total transmission capability around 10% - this comes up in the wind trade journals - its a big issue when systems are saturated.

This is one of those funny ones... where I cannot disagree in principle with this basic idea. I think it is fine, and has some merit... but what I think this has the effect of is one more step in the acceptance of systems of control in the home and society.

This is a society that has been so groomed and conditioned to social controls and - well I might as well say it instead of alluding to it - outright acceptance of a fascist state existence, that I see little likelihood of preventing the slide into an out and out fascist state over this next 5-10 years.

So I see things like this as necessary and sensible, but in the environment we live in I suspect they have the effect of further conditioning us to accept things that we'll regret in the future. All because people in this country are incapable of taking their fair share and leaving for others.

It's like the ID card - this whole illegal immigrants debate is being used to quietly push through a national biometric ID card, which is being masterfully held back from the degree of national media coverage it should be getting, largely because the Republicans are the ones pushing it through and Republican supporters are traditionally the ones that shout loudest about this, so it's easier to keep the complaints quiet - and you KNOW that means we are in for a show-me-your-papers future. Never in history have the tools for oppression been put in place and then NOT been used.

It's like the ID card


Listen to this interview with Aaron Russo.
Watch he says about biochips, electonic money and his conversation with Rockefeller. Electronic Money only.

Bumber sticker seen in the future
"Only Terrorists and Drug Dealers Use Cash"


The big brother aspect of radio control set point of a thermostat is, to me, bizarre. And is also a foolish waste of money because it is easily circumvented by the occupant(s) of the dwelling.

To get the air conditioning to go on, put a gentle heat source under the thermostat (an incandescent bulb or hot rocks from the garden).

To get the furnace to go on, put a bag of ice cubes or other chilled objects above the thermostat.

This works by forcing the thermometer inside the thermostat to give a false reading of the room temperature. It will work even if the big brother control is via telemetry of the temperature or as described in the news item via adjusting the local set point.

The only people who will not be able to use this technique are people who are too old or infirm to get ice cubes from the refrigerator or move a floor lamp to stand near the thermostat. Are there enough such people to make the control mechanism a success at reducing electric grid load? Do we really want to place such a burden on the old and infirm?

I can disagree in principle with the basic idea because it is unimplementable.

Disagree. Of course it's easy to get around it. But most people won't. One, most people want to cooperate. Especially if the alternative is an unplanned blackout. Those who do not cooperate are often those who are too lazy to change their thermostats, or aren't even at home to do it.

In any case, the reset can be overridden manually, without resorting to hot rocks or ice cubes. Turning the dial will suffice.

I'll betcha a lot of us will use a jumper clip. ;)

People will curse it, some will circumvent, many will know how to circumvent if needed, but mostly its a good thing. The electrical grid is a community resource and if I can plug in a little widget and make it better for all why wouldn't I do it? There are a lot of surveillance nation type things to be worried about, but this isn't one of them, and they need to extend the principle to power line capacity management, too.

I want to restate my original objection the the PCT (programmable communicating thermostat). The proposed adjusting of the set point in a thermostat is a very complicated way to achieve load reduction. Being complicated it will have complicated failure modes. The State Commission intends to write specifications for interfaces between parts of the system that will enable equipment built by different suppliers to inter-operate. The stated goal of commission staff is to design the system in such a way that it can support, in the future, additional functions that have not yet been discussed. Design for future expansion adds to the complexity. Complexity adds to the expense.

Most of the objections to my suggestion that it will be a waste of money amount to hoping that people will not circumvent it. I think the Commission should try getting people to buy into some more simple system before committing to this expensive and complicate one. I think that, as it stands now, the most likely result of this initiative will be massive unintended consequences that kill the initiative. But I can't foresee what specifically will kill it because it is too complicated to analyze intelligently.

Also the design is changing. When I first read about PCT, there was no user over-ride switch. Now there is one. This happened in the space of a few days. I cannot believe that the ramifications of this design change were fully thought through during the short time between the initial public response to the initial announcement and the public announcement of the inclusion of an over-ride switch.

California is different from France. In Southern California and in the Central Valley, summer temperature are very high every summer. France, and Europe generally, were caught by surprise by very unusual weather. They did not have enough reserve capacity for a rare event. High summer temperatures are not a rare event in California. Trying to run electric grid (a complex networked system) so close to a known failure mode is very risky. Adding another, as yet undesigned, complex network of CPT to 'fix' the problem is foolish in the extreme.

Just my $.02

Is anyone else as disturbed by this idea as I am?

And? (1/2 a year away and this is what brings you back?)

blah blah blah over 110 degree blah blah figuring out your own solutions

How about moving away from the 110 deg temp? Or hey, learning to live with heat and, well, your eventual death.

And? (1/2 a year away and this is what brings you back?)

His alter ego got bloodied again on drumbeat yesterday.

Eric, you still remember me? I am touched. I don't remember you though. See you in another six months.

I am touched.

Yes. We know. That's why you are remembered.

I'll bet that no movie star (like Streisand) whose houses are measured in acres rather than square feet will EVER have get one!

The very high level of ‘excess’ elderly deaths in France, in the heat wave of August 2003, was due to:

1) The fact that is was August, when *everyone* in France takes vacations, families and medical personnel all off elsewhere, leaving the elderly alone, no neighbors, emergency services understaffed or downright non existent, phones ringing into the ether...

2) The practice, in homes for the elderly, of relying on psychotropic medication, some of which affect body temperature regulation adversely, which can be handled when many staff are present, to provide blankets, extra heat, or fans, ice, etc. This factor is not mentioned by the French Gvmt, but known to all professionals. France is possibly the highest per capita consumer of psychotropic drugs, with the over 50’s being biggest users. Sorry no numbers. It would take 5 pages of references, most in French, and many of them contradictory.

The lack of efficient cooling/heating mechanisms in buildings. Of course, as not needed before, the fact that they were missing was a surprise, and the authorities (those present!) could not supply what was needed in the short time. In fact they couldn’t even provide the necessary low temps for the morgues, sorry to be gruesome.

So we see a lack of community, seasonal to be sure, but unplanned for, and reliance on drugs to get ppl thru, in a particular situation (French culture since 1936.)

I'm often the guy who gets blamed for bringing this issue up with a post on AmericanThinker.com here:


I think the question is, do the customers really want something like this? Or do they want the grid to serve them?

The peaks they hope to shave aren't that expensive. I'm figuring maybe $1,000 in natural gas fuel per GW/hr. I can see the problem with about 5 GW of gas turbine capacity. That covers about 20 hours a year or so. Simple, inefficient gas turbines aren't that expensive either, especially if they did not require catalytic converters and full pollution gear.

The people of California have spoken loud and clear that the state and the power authorities reaching into one's home is unacceptable.

The issue now shifts to the Public Utilities Commission which will try to make us a deal we can't refuse. They'll subidize remote control thermostat users by charging non-users so much they will rethink their objections. There is not good way to allocate costs since this has features of a negawatt scheme.

Of course, my suggestion is 5 to 10 GW of new nuclear power to add to the 4.5 GW we already have (minimum system load is 20 GW). That would displace a lot of gas ALL the time and surplus the same gs-fired capacity. We'll have to pay capacity payments to cover the mortgages on the peakers, of course, but peakers are relatively cheap.

Alaskan oil production was expected to decline 4% in fiscal 2008.

A key to further energy development on the North Slope might be the 36 billion barrels of heavy oil in place.


The world used about 31 billion barrels of oil/liquids per year.

The world used 1 billion barrels of oil/liquids in less than 12 days.

From the above link on UK coal:

Foreign coal accounts for two thirds of UK consumption.

Kinda gives a new meaning to the old phrase; "Carrying coals to Newcastle". They probably are.

Ron Patterson

Good thing we allowed Thatcher to smash the coal miner's unions and shut down "unprofitable" mining operations because Venezuelan coal was so much cheaper, despite the fact that much of the shutting down meant putting mines in a situation that the coal in them would NEVER be retreivable in the future and wasting a huge resource.

As Shelley once said (sadly the TV show not the poet) about Britain: "We're a 700 mile long lump of coal floating in a sea of oil with seven hundred years of trading experience. No wonder we're screwed economically"

Sadly the UK's obsession with having a special relationship with the US (which they honestly don't realise is not a two way street - the narcissism of a small nation's relationship with a bigger nation) and it's obsession with snubbing the Europeans and the EU (despite the fact that the reasons the EU now has far higher standards of living than the US in almost every area measurable is largely down to the collective measures of the EU - those damned "bureaucrats in Brussels"), mean that we'll respond to this sort of thing the same way the US has with its decline in domestic oil production.

The faster the UK realizes it isn't the US, and actually has more in common with its neighbours, the better. I don't hold out too much hope.

This is the biggest bunch of garbage I have ever read. What do we have in common with our neibours. Unemployment that never falls much below 10%, beauracratic totalitarianism, economic stgnation, a ruling elite contemptuous of its people,a worship of bizzare philosophers. The US has its faults but at least it's 3000 miles away.

you are very wrong if you think you have more in common with the US than with your European neighbours... that is one of these stupid conceits that Britain is stuck in and seems incapable of escaping from - it is a myth

unemployment in the US is only lower than that 10% figure because they pull the numbers out of their ass over here - it isn't REALLY 5% unemployment... Europe once was less viable for dynamic economic businesses but it is the US that has fallen into an economic stagnation with growth figures being indicative of little of true value

as to a ruling elite contemptuous of its people - you honestly think that situation is worse in Europe than in the US? you clearly know little about US politics other than the media image of it... as to a worship of bizarre philosophers, at least Europeans learn philosophy, it is far healthier than the kind of worship you get in the US megachurches

i am glad you responded because you are a clear example of the point i was making - you get a bunch of idiots in the UK that romanticise about some ideal of a US relationship, or worse, the the UK is still viable as a player on the world stage alone, when in fact the only viable route for the UK to go is a closer relationship with the rest of Europe, which if it actually put the effort into it'd see that Britain can have just as much success steering Europe as France or Germany


Americans try to do our part to make it a two-way street; Britain and its people are held in very high regard here. British Prime Ministers, right and left, are accorded a great deal of respect, in public or private, as are British soldiers. There is an appreciation that many of our traditions, including the right to a jury trial and relatively low levels of government corruption, derive from the British. We even maintain some traditions that have disappeared in Britain, like the right to bear arms.


I don't think Thatcher broke the coal union because of a special relationship with the United States. I think she broke it in order to prevent unions from stifling British economic growth.

As for cheaper imported coal: It really was cheaper. Britain saved a lot by importing. Deep old underground mines really were more costly to extract from.

Shutting down and future retrievability: The mines were built in the first place. They could be built again. The technology for doing so is far more advanced and automated than it was 50-100 years ago.

Brussels versus US: I suspect the British people are better off governing themselves than being governed by people in other countries.

I think she broke it in order to prevent unions from stifling British economic growth.

Oh pleeeeze. She broke the unions so her class could make more money. Economic growth is meaningless - what people care about is the "more" and who gets the "more". And it wouldn't have worked if she didn't get the Falklands war to turn the unions unpatriots.

cfm in Gray, ME

A little something to watch while you chop onions for your soup.

Good for a few yuks


Robert Zubrin: Energy Victory

World-renowned engineer and best-selling Colorado author Robert Zubrin will discuss and sign his new book Energy Victory: Winning the War on Terror by Breaking Free of Oil. In this compelling argument for a new direction in U.S. energy policy, Zubrin lays out a bold plan for breaking the economic stranglehold that the OPEC oil cartel has on our country and the world -

Also a great talk on Iran - Israel tensions


Trita Parsi discusses Israel, Iran and the United States.

With talk of the Iranian nuclear threat heating up, tension between Iran and Israel is dangerously high and the risk of a war involving the United States looms. To Trita Parsi, efforts to defuse those tensions have failed because the real roots of the hostility between Iran and Israel have eluded Washington policymakers. Drawing on his extensive personal interviews with key policy players in all three countries, Dr. Parsi examines the strategic and geopolitical tensions feeding the growing conflict between Iran and Israel.

I love all these ideas about using the War on Terror positioning to get impetus behind a change.

However I suspect they are wildly misplaced. People REALLY wish to fight the GWOT (though not in person) not for the reasons they state to pollsters, but because they want to maintain their happy motoring shopaholic tv-numbed lifestyles. I think that if presented with the options honestly, including the kind of sacrifices in lifestyle necessary to maintain a low-energy (low oil-import) country, people will reject them and go back to the old US-European default mode of action - which usually involves killing those who look and act differently and taking their resources.

I doubt a critical mass of people have sufficient critical thinking skills to figure out that these changes will be forced upon us eventually anyway so it is better to make them sooner while you still have some small degree of control over events.

I think that if presented with the options honestly, including the kind of sacrifices in lifestyle necessary to maintain a low-energy (low oil-import) country, people will reject them and go back to the old US-European default mode of action - which usually involves killing those who look and act differently and taking their resources.

After reading that, I couldn't help doing the 3 Days of the Condor movie bit again.

From the movie

Turner (Robert Redford): "Do we have plans to invade the Middle East ?"

Higgins (Cliff Robertson): " Are you crazy?"

Turner: " Am I?"

Higgins: "Look, Turner…"

Turner: "Do we have plans?"

Higgins: "No. Absolutely not. We have games. That's all. We play games. What if? How many men? What would it take? Is there a cheaper way to destabilize a régime? That's what we're paid to do."

Turner: "Go on. So Atwood just took the game too seriously. He was really going to do it, wasn't he?”

Higgins: "It was a renegade operation. Atwood knew 54-12 would never authorize it. There was no way, not with the heat on the Company.”

Turner: "What if there hadn't been any heat? Supposing I hadn't stumbled on a plan? Say nobody had?"

Higgins: "Different ball game. The fact is there was nothing wrong with the plan. Oh, the plan was alright. The plan would have worked."

Turner: "Boy, what is it with you people? You think not getting caught in a lie is the same thing as telling the truth?"

Higgins: "No. It's simple economics. Today it's oil, right? In 10 or 15 years - food, Plutonium. And maybe even sooner. Now what do you think the people are gonna want us to do then?

Turner : " Ask them."

Higgins: "Not now - then. Ask them when they're running out. Ask them when there's no heat in their homes and they're cold. Ask them when their engines stop. Ask them when people who've never known hunger start going hungry. Do you want to know something? They won't want us to ask them. They'll just want us to get it for them."

Not now - then. Ask them when...

Hmmm. Maybe the plan was to not let us know until it was too late, until the choices provided only would lead to one path?


Default mode of killing and taking resources: There aren't enough resources to take.

There's a classic British leftist attitude where the world is seen primarily in terms of some group of colonialists or capitalists (or a mixture thereof) screwing over some other ethnic group, race, or class to get rich. Well, most wealth is created by designing, engineering, managing, working hard. Most wealth in the West came from constructive work that was done in Western countries, not via colonial exploitation.

Your cynicism and ideology is not realism. It is just blinding negativism that prevents you from more accurately understanding the world.

capitalists (or a mixture thereof) screwing over some other ethnic group, race, or class to get rich. Well, most wealth is created by designing, engineering, managing, working hard.

If the above is true, why are engineers and tool and die people paid less than salesmen and wall street traders?

Being pretty sure we're headed for a hard fast crash I tend to see warning signs everywhere. I am sure this is unhealthy, and I over-reach but there we go.

Anyway, last night in House did anyone else notice a huge block of ads just not there - instead the rotating Fox logo for the bulk of the ad break before returning to the show. Now, I suppose this could be a technical hitch at the cable end - failing to insert an ad block so just getting a backup logo. But this stuff is largely computerized nowadays. So I have to wonder if a large block of ads went unsold.

If so I see that as a much bigger economic indicator than most press releases coming out of Washington worthies.

So I have to wonder if a large block of ads went unsold.

I doubt it. They have other things they could run. Ads for their own TV shows. Public service announcements. Must have been a technical glitch. Or someone asleep at the switch.

3-wheeled Aptera aspires to car-pool lane

Have you ever wondered why there are so many 3 wheel electrics? They can be licensed as motorcycles and as such don't need to comply with the safety features that are required on regular cars. The only way you can get a 4 wheel vehicle without all the safety features is to get an LSV (Low Speed Vehilce) where the speed is limited to 25 mph.

Not much logic here.

Ah, yes, those wonderful "safety features"...sure am glad our folks in gov have spent all my tax money trying to make the world of the Superslab safe for all the 95%er idiots. Why is it that the number one killer of males between 16 and 20 is Auto deaths? (Maybe a good thing, it improves the species) A simple lowering of the National speed limit to max 60 mph would be a better solution (at least partial) to a large number of problems....Nixon did the 55....Do we think this is coming back? I do, and soon.

Having been an owner of a large number of "bikes", (25 exactly)that ran on everything from gas, to methanol, to nitromethane, and (yes a battery one too, I built as a 10 year old), I have to say the "two wheels up front" version of the Trike style transport is the way to go. If a suitable battery powered one was put together today, I'd buy it in a heart beat to commute the 45 miles I have, one way.

The World turns, with or without U.S.

Try this one....... http://autos.groups.yahoo.com/group/ApterasSuperMPGElectricTyp-1e/

or .....http://www.electric-cycle.com/html/photo_gallery.html

The Aptera strikes me as especially fragile and unsuited for a world where roads are no longer maintained properly - and neither are vehicles. Also, it is of no utility for other than transporting people. Overall the design shows all of the compromises required in trying to build an EV, and then some. Take a look at the abuse a typical vehicle takes in today's (Western) world of generally well maintained roadways, and then try to picture the Aptera after a few years.

One problem with 3 wheels is that you have a much better chance of hitting any obstruction in the road.

If you're a typical Austin driver, don'tcha just hate it when you have to pull over your hummer to clean one of those things out of the wheel well?

I think there's also an advantage in that a 3 wheel car with the single wheel in the rear has better aerodynamics than a 4 wheel car. I've wanted to experiment with such a vehicle for years, but haven't had the time or motivation. Back in the early 1980's, I modified a motorcycle with a complete fairing that achieved about 235 mpg at 55 mph and much of that was due to the lower drag on the rear, I suspect. Similar vehicles managed 325 mpg on a closed race course.

You may be driving a 3-wheeler sooner than you think...

E. Swanson

I want one of these:


I want the truck version, with a bank of Shell SQ-85 solar panels mounted on the roof to keep it charged.

Seems to me like a great "old fogie" vehicle - good for the market, church, theater, and go see friends.

Hardhat, I've had my Zap Xebra PK for a few days now, but was able to testdrive it for a few days before buying it.

So far, I really like it. Yahoo has a Zap Xebra owners group online -- plenty of discussion and photos there.

I went from pedaling my tools and supplies (for 7+ years) to driving the Zap Xebra PK. The time was right for me to make this change, and I'm glad of it at this time.

I hope to put a solar array on my garage to make it my charging station for the truck and for my electric tools.

Off topic, but relevant to TEOTWAWKI. I live in a rural area in a state that deregulated phone service. The phone company just notified us that they are no longer obligated to provide service. Basically they said we can use the phone and they will bill us until it breaks. Then they will not fix it, and we are out of luck. There is no other phone service available here. We are in a hilly area and can not get cell reception at the house, tho it is available elsewhere in the county. The phone is our only internet access and is also necessary for satellite TV reception. So, we are facing a future of no phone, no 911 service, no internet and no
TV except what we can get on antenna. It will be very isolated and scary--I didn't expect it quite so soon.

I plan to contact my legislators, but I doubt there is anything they can do, since the legislation left the phone company with no obligation to provide service. Any suggestions?

Stop whining and get a Satellite Phone...or learn how to make Smoke Signals..


Where are you?


DOCSIS over the air is your only hope now. I got a call today soliciting me for CTO or principle engineer for an effort intended to do just that. There are apparently large amounts of federal dollars ... at least for the moment ... available to do such things. I won't be taking on any long term debt but if they'll accept me without interfering with the stuff I'm doing over at Stranded Wind I do believe I'll take them up on the offer.

http://wildblue.com is Docsis and thanks to my little kilowatt meter the modems draws less than 20 watts. An APC 650 will run it on battery for just shy of 24 hours.

DOCSIS over the air isn't cheap but its the right thing. Unlicensed just stinks unless you flat own all of the high ground and have the willingness to spank when it is indicated. I used to keep a pair of Adtran Tracers handy ... 101% usage of either the upper or lower half of the 2.4GHz band. Don't want to do a little frequency coordination? Lets run these gadgets off the inverter in my car for a bit, then we'll have that conversation again.


That is the problem with deregulation/privatization. Companies will cherry-pick the profitable markets. Leaving those who are in unprofitable markets - generally the rural ones - out in the cold. This is why I don't like the idea of privatizing the post office.

I love the service I get from my rural postal worker. In Chicago I had the worst mail delivery in the country. Rural carrier is considered the best job in the USPS, and even current USPS carriers have to test to get on. Even though you provide your own vehicle, the waiting list is long. That will surely end with privatization.

In Chicago I had the worst mail delivery in the country.


The U.S. Postal Service has warned some businesses and residents in a Milwaukee neighborhood near Marquette University that it may halt mail delivery because of high crime rates in the area.

Even the U.S. Postal Service has admitted that Chicago is the worst service in the nation. There were stories a few years ago about bags of mail showing up under viaducts on fire, in garbage cans, in the car trunks of postal workers, and in their homes. I had to call three times to get my mail forwarded to my present address.



This is true. Private civil engineering/photogrammetry companies are constantly nibbling at the edges of state run mapping/engineering
trying to privatize these functions. Having spent 15 years in the private sector followed by 11 years working for a state DOT, i have seen first hand what happens when $ is the only concern and executives
make decisions based on the effect on their year end bonuses.....

Exactly. I foresaw this when they passed the law, but we were assured we would have "plenty of options." I agree. Mail delivery is probably next.

UPS was the first and for months the ONLY reliable shipper into post-Katrina New Orleans. FedEx about 1.5 months after UPS (from memory), then DHL.

The Postal workers have picketed several times in frustration over the lack of resources that USPS HQ refuses to give them to deliver the mail in New Orleans. Since the US Constitution list just a handful of services that the Federal Gov't is responsible for (Foreign Policy, national defense, coining money, navigable waterways, and delivering the mail), I can say that GWB is failing in his fundamental constitutional duty.

Best Hopes for 373 more days,


Google "Iridium"


And you can get internet access HERE

Thanks for the suggestion.

I think this is an area any and all of us should try to have some idea of where to turn to.. I have chewed on it, but not settled yet.

My family has some woodland which has no Grid,Phone or Cable access, and I've been playing with the alternative possibilities for Voice and for Internet connections.

1. ShortWave Radio adding PacketRadio features for the computer links.

2. Citizen's Band - not great range..

3. Satellite ($$$ ?!)

4. Articles lately mentioned a protocol being setup for 3rd world which allows any Packet-transciever to act as a Node or a Booster, to let the connectivity be carried by the users..

5. Microwave, using focused transceiver, hi-gain antenna.. targeting ? nearest source, cell tower, satellite?

Ultimately, isolation is a mixed blessing.. or maybe you could call it a mixed curse?

Don't know what satellite service you have, but I have DirecTV and a phone is not necessary. They may say it is, but it's not. They may want a number to associate with the account, but again, it's not necessary for service.

Heh, just noticed the new collapse subthread feature. Nice work superG.

Wow that is nice.
How about a user option in our settings to allow us to collapse threads once they get more than a certain number in depth?
That would greatly shorten some of these Drumbeats.
In my case I would collapse anything over level 3 or 4 since I rarely find anything useful and it just takes a lot of time to wade thru.

A new thread about collapse? :-)

If the US gets hit with a large cut in oil supplies we are toast.

We are aware that oil production will be approx 0bbls/day in 50 yrs or so at present consumption, and that includes the powerdown phase that will destroy our civilization.

We all know this but don't want to follow the logic of what that means.

From here on out oil production will go down and civilization will collapse and population will be cut by approx 4 billion. By 2060 this will be an ugly world.

So we can all go down the drain together or some of us can survive and have a chance to make a sustainable world.

First thing some country is going to do is get control of all the oil in the ME. Oh, guess that's what we are trying to do!

Then use whatever means to ensure our supply at the cost of everyone else, the world be dammed! ( that will be next)

Whoever uses the most force to control resourced in the future will last the longest and have a chance to perpetuate civilization.

I fully expect China to try the above in the near future. Imagine 200 million chinese marching over to the ME and just taking it over. Who could stop them? They have nukes to back them up.

Maybe China will be the only civilization around 100yrs from now??

Thermo-gene collision folks. Someone is going to try this.

If the US gets hit with a large cut in oil supplies we are toast.

Well, if the US citizens reacted in a non-violent way, nope.

Korg said,
"Imagine 200 million chinese marching over to the ME and just taking it over. Who could stop them? They have nukes to back them up."

And what the prize for such a venture be....first a war with 1 billion Muslims, and then the wreckage of a once great oil producing region lying in ashes producing nothing as the Arabs would practice "scorched Earth" retreat.

We know this from experience. Iraq attempted to burn Kuwait's oil production facilities to nothing in one of the more horrific environmental crimes of the century in their retreat. What would that look like in all the major Persian Gulf nations at once, as Saudi Arabia, Iran, Iraq, Kuwait, UAE, Qatar, Oman, etc, went up in flames?

The one thing that kept the Americans from considering such a venture against Saudi Arabia in the 1970's was that the Saudi's made it clear they would blast Saudi oil facilities rather than lose them.

Oh, there are a few nations between the Persian Gulf and China who might object....India comes to mind....

"Maybe China will be the only civilization around 100yrs from now??" Maybe. Who can really know?
But the Americans have now claimed so many "bogeymen" that it is hard to take any claim of such "superiority" of the adversary very seriously.

When I was a child, the U.S.S.R. were the "ten foot tall giants". Then it was OPEC. Then it was Japan. Then it was the newly formed European Community. Now it's China's turn. All these nations were said to be able to walk on water and defy all normal limits at the time they became the Americans favorite "whipping boy". I have posted before my belief that China is hugely overrated and have enough "issues" to deal with to keep them busy for some time to come. The products they sell are NOT world class, they have never addressed ethnic and humanitarian issues, they are reliant on customers who may turn out not to be able to continue to waste money on the low quality goods they sell (the U.S. being the biggest) and have a 1 billion person competitor in Souther Asia to deal with in India. They also, of course, need energy.

If I had to take China's circumstances or the United States', I would choose to attempt to deal with the problems facing the U.S, which are much less daunting.


Good points, Roger.

The answer to Keithster's 'what would stop them?' question was an old one-liner..

'An army marches on its stomach.'

Who (or Hu) is supposed to back a supply line like this?


The EIA's recent STEO report: http://tonto.eia.doe.gov/cfapps/STEO_Query/steotables.cfm?periodType=Mon...

... shows an 86.38 mbpd world liquids production in December 2007. If this figure is correct, it seems to establish a pretty strong trend in increased production. Interestingly, despite the solid increase in production, the EIA is showing a December average world demand at 88.59 mbpd.

Solid recent increases in world supply fail to keep up with month on month increases in world demand. So stock draw downs continue for the moment.

Of course, these are the 'all liquids' numbers, right?

The C&C numbers are far less encouraging, and those fuels that make up the difference are costing the industry a good chunk OF that C&C (and coal, another 'shining C', and NG, too) to be produced.

Black Swan takes Red Queen. Check, mate!

It is the all liquids number...

You'd think there was some kind of positive EROI these new liquids. If not, I'd expect them to soar and plummet pretty quick.

I'll try to find the C+C number for December. Likely someone here has it at their finger tips.

OK, I know what the Red Queen stands for. But Black Swan?

Not sure if this has been posted -
CNN video of a 150mpg plug-in hybrid powered by AFS Trinity Power corp.:


That's fantastic! I hope they fast track it.

For my part, I don't find plugging in a car to be a major problem. If I can get 150 mpg, then give me the plug!

This is the way I think any keeping of the car industry should go... stop making new cars and retro fit existing cars. Do we really think that it will be possible to create an entirely new (or modified) auto industry whose purpose is to continue with the BAU model given what we know about the energy and resource situations?

I'm amazed at how much time and effort is going into keeping BAU puffed up. I mean, did you listen to what the reporter said ..."one draw back is that you have to plug it in." Who said that is a drawback?

Today on Sunday Morning (CBS) there was a brief segment on the TATA car in India. Not one word mentioned about how more cars in that nation will be another nail in the energy coffin. Follow the money. Somebody is getting rich at the expense of a lot of people. Regarding transportation, nothing new ought to be pursued without the public good being the first and most important outcome.

Hello TODers,

Unforeseen 98.9% production decline?

01/12/2008 04:39 PM

Belarus Government imposes restrictions on oil, potash and table salt production in 2008

According to the Ministry of Statistics, in January-November 2007 some 1.613 million tonnes of oil were extracted, which is 98.9% less that on the same time 2006.
Reads to me as if they are trying to apply the brakes just before going off the cliff. Does anyone know much about Belarus oil-extraction methods that could have led to such a drastic production shortfall last year?

Also, why cut potash and table salt production? I would think that with the postPeak need for NPK for plant growth, and table salt for long-term food preservation: Belarus would rather stockpile these vital goods now while they still have the energy to mine and process them.

Maybe their strategy is to turn NPK and salt into currency? Recall that the origin of the word 'salary' developed when Roman troops were paid with salt--it was the coin of the realm as long as you could keep it safe from the rain.

Thxs for any informed replies.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

The Engrish there is not so good - they ordered a 1.1% decrease in oil extraction, presumably to preserve supplies.

I think the site said they increased their production of potash. The potash supple bottlenecks and reductions make potash production more profitable.

Brought up at po.com too: Toyota Prius sales pass Ford Explorer! We're more excited over there. 31,000 sales in Dec - vs 1,390,000 total sales for cars...three of the hybrid models are SUVs, too.

Nowegian oil production dropping rapidly

According to an article published in Jan of 2008, the average daily production for 2007 was just above 2.6 million bod including NGL's.


According to the EIA the average daily production for 2006 was "2,840.8 thousand barrels per day, of which 83% was crude oil. (estimated)"

That is an 8% drop in production in one year.

Khebab's projection for Norway is a decline rate of -9%/year to -13%/year. The most recent annual data show that Norway is the third largest net exporter.