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Drumbeat: August 20, 2009
Posted by Leanan on August 20, 2009 - 9:51am
Oil Producers Off Canada’s East Coast Brace for Hurricane Bill
(Bloomberg) -- Suncor Energy Inc., Husky Energy Inc. and other energy producers are bracing for a blast from Hurricane Bill as the storm churns on a course that may take it through oilfields off Canada’s east coast.“Weather is part of our game, so we’re always monitoring,” said Nancy Wicks, a spokesman for Calgary-based Suncor. “This one, in particular, we’ll be tracking the storm and conditions as part of our day-to-day operations.”
Peak Oil: The Threat of Resource Nationalism
The conclusion is inescapable: if an "oil crisis" occurs, it will be the result of massive government incompetence, not market failure. Sadly, there's nothing new about that.
Lester R. Brown: Throwing Out The Throwaway Economy
The throwaway economy is on a collision course with the earth’s geological limits. Aside from running out of landfills near cities, the world is also fast running out of the cheap oil that is used to manufacture and transport throwaway products. Perhaps more fundamentally, there is not enough readily accessible lead, tin, copper, iron ore, or bauxite to sustain the throwaway economy beyond another generation or two. Assuming an annual 2-percent growth in extraction, U.S. Geological Survey data on economically recoverable reserves show the world has 17 years of reserves remaining for lead, 19 years for tin, 25 years for copper, 54 years for iron ore, and 68 years for bauxite.
The irony is that Canada and America are now more indebted than ever, and the guys with the factories and the primary jobs are holding a lot of the mortgage. We may delude ourselves for weeks or months at a time borrowing and spending more money and pretending nothing’s changed, but it has. Inexorably. For at least the next decade or two, billions of tax dollars a year will flow east, just as those containers of manufactured goods float west.This will happen as we enter a period of peak oil, as ever-rising demand outstrips new capacity. A barrel could be $200, easily, by 2015. In fact, that should be a fascinating year. The leading edge of the largely-pensionless Boomers will be raiding their meagre RRSPs and dumping their houses as they move towards seventy. And we should be in the critical last period of the climate change debate. That’s the part where we have to teach kids about frogs, warblers and the arctic fox in history class.
Running Out Fossil Fuels: A Cause For Glee?
Indeed, it does seem that the Earth will run out of oil, natural gas and coal much more quickly than was, originally, anticipated by researchers keeping track of overall expenditure of these resources. At the same time, others warn that any expectation of nuclear power taking over as an effective substitute is both unrealistic and, potentially, ruinous.On other grounds, ethanol can't work either [3]. Meanwhile, wind, solar and hydro provisions won't be sufficient in and by themselves. In addition, what sort of work will people - the billions making their livings in industries related to airlines, cruise lines, mechanized workshops and factories producing oil based products such as plastic items and fertilizers -- do since their jobs are dependent on the use of huge amounts of petroleum? Yes, what will they all do once it all but disappears?
Nigeria oil rights grab 'illegal'
Nigeria's high court has ruled that its country's government illegally revoked exploration licences granted to a South Korean oil consortium.
Obama team planning to wind down 'clunkers' program
WASHINGTON — The Obama administration is developing plans to wind down the popular cash for clunkers program and could announce by Friday when the incentives will no longer be available.Transportation Secretary Ray LaHood said Wednesday the department would announce within 48 hours how it intends to discontinue the program that offers car buyers rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models. Department officials met with car dealer trade groups on Wednesday to discuss how the program will eventually end and respond to complaints over a backlog of rebate payments to dealers.
Saudi eyeing first nuclear reactor
Saudi Arabia is working on plans for its first nuclear power plant, a newspaper reported on Thursday.The King Abdulaziz City for Science and Technology in Riyadh is currently working on the project, according to the Saudi minister of water and electricity, Abdullah Al Hosain.
Smart is only minicar rated good in roof crush tests
The smallest car has the strongest roof in its class when it comes to rollover accidents, says the Insurance Institute for Highway Safety.Smart Fortwo has the most crush-resistent roof and the Chevrolet Aveo has the weakest among 2009 micro and minicars. The Smart earns the highest rating of good compared with acceptable for the Honda Fit, Hyundai Accent, Mini Cooper, and Toyota Yaris. The Aveo is rated marginal, the institute said.
The Peak Oil Crisis: More Disruptive Technology?
Yet another potentially disruptive technology has been announced. This time a small company, Joule Biotechnologies, up in Cambridge MA says it has developed a process to produce hydrocarbon based fuels from carbon dioxide and water. As with any too-good-to-be-true announcement skeptics abound - just on general principles.The process is centered on a "photobioreactor" (think a solar panel with liquid inside) which contains brackish water and a still secret microorganism that has been genetically engineered to absorb carbon dioxide and excrete hydrocarbons when subjected to sunlight.
Green energy hit by 'faceless Nimbys'
The closure of the Vestas plant on the Isle of Wight saw workers stage an 18-day sit-in that gained worldwide attention at the very time the government announced a new vision for energy to reduce the UK's carbon footprint.Some workers said the government should have rescued the plant like it saved failing banks.
But Vestas' vice president Peter Kruse has a clear idea who is responsible for the lack of a viable UK renewable energy market.
"You have some of the best onshore sites on the planet but they are strong, the faceless Nimbys [not in my back yards]," he told The Report.
Study of 16 developing countries shows climate change could deepen poverty
WEST LAFAYETTE, Ind. - Urban workers could suffer most from climate change as the cost of food drives them into poverty, according to a new study that quantifies the effects of climate on the world's poor populations.A team led by Purdue University researchers examined the potential economic influence of adverse climate events, such as heat waves, drought and heavy rains, on those in 16 developing countries. Urban workers in Bangladesh, Mexico and Zambia were found to be the most at risk.
"Extreme weather affects agricultural productivity and can raise the price of staple foods, such as grains, that are important to poor households in developing countries," said Noah Diffenbaugh, the associate professor of earth and atmospheric sciences and interim director of Purdue's Climate Change Research Center who co-led the study. "Studies have shown global warming will likely increase the frequency and intensity of heat waves, drought and floods in many areas. It is important to understand which socioeconomic groups and countries could see changes in poverty rates in order to make informed policy decisions."
The 2008 Oil Price “Bubble” [PDF]
A longer-run danger for the world economy, independent of the speculation argument, is that oil capacity expansion has slowed in 2009, and both national and multinational oil companies are postponing plans to develop new fields and expand existing ones. Even though there is currently a serious push for greater fuel economy and development of alternative sources of energy, it is unlikely that these new technologies will make a significant dent in the demand for oil over the next few years. The International Energy Agency, for example, based on IMF projections of world growth, forecasts world demand for oil to rise by about 0.6 percent a year from 2010 on, reaching 89 mbd by 2014. If supply does not keep up and provide the additional 3 mbd needed by 2014, a serious imbalance between future demand and supply in the world oil market would emerge. A major joint effort on the part of both producers and consumers to correct this potential imbalance, possibly along the lines proposed by Prime Minister Brown and President Sarkozy, involving both capacity expansion and conservation, will be needed over the next few years. Absent such an agreement, and if there is no brake to speculation, a repeat of 2008 could easily occur with spot oil prices soaring above their long-term equilibrium level. Whether this is a high-probability scenario or only a “tail” risk is a matter of judgment, but the signs are there. Unless appropriate policy actions are taken to bring the oil market into long-term balance, and to limit speculation, it may well be that the $147 a barrel hit in 2008 was not just a once-in-a-lifetime event but rather a harbinger of things to come.
The not-so-bullish case for energy prices
The bullish case for oil has been fairly well established by the likes of Goldman Sachs, Barclays, Merrill Lynch at al.But, as it turns out, there’s a convincing bearish case to be made too — and the man putting it forward most recently is Edward Morse, director of economic research at LCM Commodities.
In a piece published in the latest edition of Foreign Affairs Magazine Morse makes the key point that oil only went to $147 per barrel in 2008 because of the coincidental convergence of a number of supply-related circumstances unlikely to be repeated any time soon.
Secretary Clinton to announces further on energy help : Holbrooke
ISLAMABAD (APP): US Special Representative to Pakistan, Richard Holbrooke has said that US has already started talks with Pakistan government and energy experts to determine energy crisis. “Secretary Hillary clinton will be here in six weeks, and at that time she would announce further announcement”, he said while talking to a private TV channel.He said that it is big decision that US is to focus on energy needs of Pakistan.“We dramatically increase our economic aid, focus on energy and addition support to efforts in swat and FATA”, he said.
Nepal: Govt preparing to import more electricity from India
Talking briefly to national news agency RSS on his way to Kathmandu Thursday, he said that the government is sensitive to end energy crisis.We have been looking for every possible ways to develop energy, he said.
"But ending the current energy crisis immediately is impossible for now."
If there were any doubt that the spectre of the 1980s energy crisis has returned to haunt the Maltese islands with a vengeance, this summer’s spate of power failures should surely have convinced even the most diehard of sceptics.The most recent power cut, occurring last Sunday, called to mind that most memorable of quotes by Enemalta chairman Alex Tranter, who said after the July 16 outage that the corporation was not in a position to guarantee that such an event would not recur in future.
Offshore Drilling Debated: Feasibility Study Expected in Coming Days
A group of elected officials, business representatives and environmental advocates agreed on little Wednesday at a lively meeting about offshore energy production except that it is a timely issue to discuss.
Drilling Ordeals Said to Delay Geothermal Project
The Obama administration’s first major test of geothermal energy as a significant alternative to fossil fuels has fallen seriously behind schedule, several federal scientists said this week, even as the project is under review because of the earthquakes it could generate in Northern California....The scientists who told of delays in the project spoke only on the condition that they not be identified, in order to preserve their access to company progress reports. The scientists said that after nearly two months of the highly expensive drilling, the rig had reached depths of less than 4,000 feet. The original schedule called for it to reach a final depth of 12,000 feet, or 2.3 miles, after no more than 50 days of drilling, according to company officials.
The problems are particularly surprising given that the drilling essentially started at 3,200 feet, at the bottom of an older hole at the site, north of San Francisco at a place called the Geysers.
Miasolé; Layoffs Raise Questions About Technology
News of Miasolé layoffs has raised questions about the company's manufacturing technology and reminded investors about the difficulty of producing thin films."Evidently, they've run into some technical difficulties that preclude production," said Paul Maycock, president of solar-electric consulting and research firm Photovoltaic Energy Systems. "It's very difficult to make thin film."
Join in the fight against soft despotism
Consider a frightening idea for the future being promoted by Thomas Homer-Dixon, who holds the CIGI Chair of Global Systems at the Balsillie School of International Affairs right here in Waterloo. Writing in The Globe and Mail earlier this month, Homer-Dixon appears to have cast-off his trademark gloomy outlook to promote a new form of soft green despotism. He wants the federal government to implement a program of “green credits” in which people earn points, like Air Miles, whenever they do something approved of by Homer-Dixon. If you walk to the store, or turn off the lights when you leave the room, or water your plants from a rain barrel, or use your clothes dryer sparingly, the government would reward you with credits. These could be turned in for tax reductions.How to keep track of all this activity? No problem, your household appliances (and perhaps BlackBerrys) would send all the necessary information back to a central government computer which would monitor every last sliver of data on your life, allowing “a fine-grained and constantly updated picture of people’s behaviour.”
If this sounds “very Orwellian,” do not fear. Homer-Dixon has anticipated your concerns; and dismissed them. The whole program would be entirely voluntary. “No one would be coerced to join,” he says soothingly. Riiiiight.
If Homer-Dixon’s plan were ever to become reality – and the current trend towards micro-regulation and soft despotism suggests it isn’t so far off the map as can be dismissed out of hand – it would be voluntary for about as long as the region’s water restrictions were temporary.
UBC agricultural programs give food for thought
What would you do if you went to the store and discovered it was clean out of imported vegetables? And not just for that day or that week, but for the foreseeable future?“It could literally happen next week,” Chris Thoreau, a fourth-year agroecology undergraduate student at UBC, told the Georgia Straight by phone. “It really could.”
China losing out in low-carbon economy bonanza
BEIJING (Reuters) - China might be the world's biggest generator of carbon credits, but its sclerotic financial sector is still holding the market back, the head of the country's pioneering CO2 exchange said. P> Carbon offsets are a brand-new commodity and China's clean energy sector has generated more than half of the total credits now being sold under a United Nations-backed trading scheme.
John Michael Greer: Betting on the Rust Belt
...Yet it’s only in the imaginations of believers in linear progress that such shifts are permanent. America is learning the hard way, as Britain did a century ago and Spain a century and a half before that, that the sheer economic burden of maintaining a global military presence is quite capable of pushing even the richest nation into bankruptcy. The Asian industrial powers that once churned out consumer goods for American stores are calmly retooling, using the billions we send them each year, to produce goods to meet the desires of their own newly prosperous people. Meanwhile the age of cheap abundant energy that made 20th century-style globalism possible in the first place is coming to an end around us. The economic model that built California’s past prosperity, in other words, is done enough to poke with a fork.As far as I can tell, very few people on the west coast – or anywhere else – have begun to think through the implications of that troubling fact. I wonder, for example, how many states within driving range of California have drawn up plans to deal with the massive influx of economic refugees that will likely follow once California’s relatively lavish entitlement programs are slashed to the bone or shut down completely. I wonder whether any of the other west coast states, for that matter, have faced up to the possibility that the import-driven gravy train they’ve been riding for the last half century may just have run off the rails. If that’s the case – if Los Angeles, San Francisco, Portland and Seattle play the same role in coming decades that towns such as Pittsburgh, Cleveland, Buffalo and Gary played in the recent past – some of the most basic assumptions of American social geography are headed for the dumpster.
Canada has a tidy arrangement with the U.S. - but for how long? - Current trade relationship suits us, but there may come a day when the American appetite for our resources might exceed what we consider to be in our best interests
The fact is that Americans increasingly depend on Canada's bounty.The two countries have been upgrading North American transit and electricity corridors and installing new pipeline infrastructure, to share resources.
The U.S. experienced peak oil way back in 1970. That was the year its oil production began declining.
Canada funnels more than half the 3.4 million barrels of oil it produces daily to the U.S. And provides 82 per cent of all U.S. natural gas imports. And sells a third of its hydroelectricity to U.S. markets. And supplies a third of the uranium used in U.S. nuclear power plants.
Hedge Fund Bets Millions Natural Gas Price Will Rise, FT Says
(Bloomberg) -- A hedge fund, whose name isn't disclosed, has placed a large bet that natural gas prices will triple by the Northern Hemisphere winter just as the price of the commodity slides to a seven-year low, the Financial Times reported, which cited New York Mercantile Exchange traders.
China Repeats U.S. Energy Policy Mistakes
The natural gas pipeline grid in the United States combined with abundant natural gas supply is the most strategic energy, economic, and industrial advantage the U.S. holds over every other country on Earth – including and especially China.
Oil prices hover above $72 a barrel
Trader and analyst Stephen Schork also suggested oil soon could go up to $75 — and beyond."It's do-or-die for the bears," he wrote in his Schork Report. "If they are going to defend the range, than it will have to be here. If they fail, the path to $75, $80, $85 etc will be wide open."
Oil May Pass 2009 High as Contract Expires: Technical Analysis
(Bloomberg) -- Crude oil futures in New York may rise to the highest this year after the September contract expires today, setting a platform for further gains, according to technical analysis from Petromatrix GmbH.
India May Let Airlines Import Jet Fuel, Economic Times Says
(Bloomberg) -- India’s government may allow airlines to import jet fuel, a move that may allow them to lower costs, the Economic Times reported, citing a government official it didn’t name.
Sinopec to Shed ‘Victim’ Tag on Surge in Profit
(Bloomberg) -- China Petroleum & Chemical Corp. may post a sevenfold surge in second-quarter profit after the government increased fuel prices and the nation’s economic recovery spurred a rebound in demand.Net income at Asia’s biggest refiner, also known as Sinopec, may rise to 15.8 billion yuan ($2.3 billion) from 2.2 billion yuan a year earlier, according to the median of four analysts’ estimates compiled by Bloomberg News. Profit at PetroChina Co., the world’s most valuable company and the country’s second- largest refiner, may climb 28 percent to 31.54 billion yuan.
The gain contrasts with earnings declines at Exxon Mobil Corp. and Royal Dutch Shell Plc after the global recession cut U.S. and European consumption. China has adjusted fuel tariffs five times this year, compared with twice in 2008, to reflect changes in crude prices and assure refiners a profit. Sinopec, the best performer on the Bloomberg World Oil & Gas Index, ended at least four years of refining losses as oil costs fell.
Essar May Start Gas Output From Coal Beds This Year
(Bloomberg) -- Essar Oil Ltd., operator of India’s second-largest non-state refiner, may start production of natural gas from coal seams in the eastern state of West Bengal by the end of this year, an official said.The area has gas reserves of 2.2 trillion cubic feet and may produce 2.5 million cubic meters a day of the cleaner- burning fuel at the peak rate in three years, Shishir Agrawal, chief executive officer of Essar Exploration & Production India Ltd., said in an interview. The reserves are equal to 19 percent of the deposits in KG-D6, India’s biggest gas field operated by Reliance Industries Ltd.
Norway to Fund Establishment of Ugandan Oil Bodies
(Bloomberg) -- Norway will give Uganda a grant of 80 million kroner ($13.2 million) to fund the establishment of institutions to manage the East African nation’s nascent oil industry, the Ugandan Treasury said.The funding will be spread across five years and will focus on revenue and environmental management, Keith Muhakanizi, deputy secretary to the Treasury, said in an advertisement published today in the Kampala-based Daily Monitor newspaper.
Nine Crew May Be Trapped in Tanker in Malacca Strait
(Bloomberg) -- Nine remaining crew members of a stricken oil-product tanker were missing and may be trapped after a collision with a bulk carrier in the Straits of Malacca, a Malaysian official said. A fire on the vessel was put out.Thick smoke may have prevented the crew leaving the Formosaproduct Brick, a 70,000-deadweight ton Liberian-flagged vessel loaded with naphtha, said Faridah Shuib, a spokeswoman for the Malaysian Maritime Enforcement Agency.
Japan's Chubu finds tiny radioactive leak
TOKYO (Reuters) - Japan's Chubu Electric Power Co (9502.T) said on Thursday a tiny amount of radioactive iodine had leaked from a nuclear power plant that was shut after a magnitude 6.5 quake last week, but it added that the leak posed no danger to the public.
Russian dam disaster: 17 dead, 58 still missing
CHERYOMUSHKY, Russia (AFP) – The death toll from the catastrophic flood that engulfed Russia's biggest hydroelectric power station rose to 17 Thursday but 58 people were still reported missing, officials said.
Aluminum chief seeks energy after Russian accident
MOSCOW – The head of the world's top aluminum producer visited Russia's largest hydroelectric plant on Wednesday to discuss how his Siberian factories will get enough energy after an accident crippled the power plant and killed at least 14 workers.
GM Cancels ‘Hideous’ Buick SUV After Would-Be Customers Twitter
(Bloomberg) -- General Motors Co. said it canceled plans for a Buick sport-utility vehicle announced Aug. 6 after potential customers said in person and online that the model lacked luxury touches they expect of the brand....The plug-in hybrid technology that was to be used for the Buick SUV will be applied to another vehicle that Detroit-based GM will discuss soon, Stephens wrote. GM had said it would begin selling the plug-in hybrid version in 2011, after the gasoline- only model began sales in late 2010.
Tomorrow's leaders on today's pressing environment issues (video)
Our World 2.0 recently interviewed young leaders from countries in the global south about the pressing global issues of climate change, peak oil and food security.We were keen to listen to viewpoints of those living in at-risk countries like Nepal, Rwanda, Egypt, Burkina Faso and others, so often under-reported in the international media, and under-represented in international institutions and global discussions.
Second skin: why wearing nettles is the next big thing
It's all very well making clothes, as I've done, out of imported fabrics and materials, but with climate change and peak oil looming, we will soon have to start using local materials.
Deep-fried locust, anyone? Insects may be the answer to our looming food crisis
Insects are plentiful, multiply and grow to adulthood rapidly and require little food to sustain them. They are the perfect source of protein. As countries in the west and developing world wake up to the looming threat of food shortages, it's time that governments seriously considered an alternative source of protein. Could insects provide food security for the coming centuries?
Federal study shows mercury in fish widespread
WASHINGTON – No fish can escape mercury pollution. That's the take-home message from a federal study of mercury contamination released Wednesday that tested fish from nearly 300 streams across the country.The toxic substance was found in every fish sampled, a finding that underscores how widespread mercury pollution has become.
India foresees sharp rise in its nuclear power
NEW DELHI (AFP) – India, whose nuclear pariah status ended last year, could obtain 50 percent of its power from atomic energy by 2050, the country's nuclear chief said in an interview published Wednesday.India, which emerged from decades of nuclear isolation in 2008 when it signed a civilian technology supply agreement with the United States, now gets less than three percent of its energy needs from atomic power.
Denver airport plans solar power for its fuel farm
DENVER – Denver International Airport wants to build a $7 million solar electric-generating system to power its fuel storage and distribution system.Airport officials said Wednesday they will ask the City Council for approval to sign a contract with two companies to develop the 1.6-megawatt project on about 9 acres north of the airfield.
Japan Power Bills to Swell as Utilities Pass on Solar Costs
(Bloomberg) -- Japanese businesses stand to pay as much as 9 billion yen ($95 million) more in monthly electricity bills under a new plan to encourage solar-power generation.Starting in November, the government will compel utilities to buy surplus solar power generated by households and factories and pay twice the regular rate as an incentive for installing solar panels. The country’s 10 regional power producers, led by Tokyo Electric Power Co., will be allowed to pass on the increased costs to customers starting in April, according to a trade ministry report distributed today.
Australia targets 20% renewable energy by 2020
SYDNEY (AFP) – Australia on Thursday passed a clean energy law requiring the country to produce 20 percent of its power from renewable sources by 2020 in move that could draw billions of dollars of green investment.The Australian senate passed the government-sponsored bill just days after parliament rejected further-reaching but controversial legislation aimed at slashing carbon emissions.
Many miners think climate change is hurting industry
A new survey suggests that while nearly half of people in the mining industry think climate change is already affecting their operations, people in the field are much more likely to hold that belief than executives in head offices."There's a bit of a disconnect between those who are more involved in the day-to-day operation of mines versus those who are in senior levels," says Dale Marshall, who oversaw the research for the David Suzuki Foundation.
Global pact to push China to low-carbon economy: Blair
BEIJING (AFP) – China's efforts to build a low-carbon economy would accelerate if world powers agree to a "practical" global climate change pact later this year, former British prime minister Tony Blair said Thursday.
Thanks to global warming, EU gets new border with Switzerland
EUOBSERVER / BRUSSELS - The European Union's border with the mountainous country in the middle of its territory, Switzerland, has shifted as a result of global warming and retreating glaciers.The Swiss Parliament on Wednesday (19 August) passed legislation moving its border with Italy up to 150 metres in some areas into its Latin neighbour's territory.
..."When the boundary coincides with the ridge of a glacier, it must follow the progressive changes of the natural ridge line. In case of complete melting of the glacier, the boundary should coincide with the height of land or crest of the emerging rock surface."
Is global warming killing people?
Researchers believe that global warming is already responsible for some 150,000 deaths each year around the world, and fear that the number may well double by 2030 even if we start getting serious about emissions reductions today.
Lower temperatures grist for global warming debate
WASHINGTON — Has Earth's fever broken?Official government measurements show that the world's temperature has cooled a bit since reaching its most recent peak in 1998.
That's given global warming skeptics new ammunition to attack the prevailing theory of climate change. The skeptics argue that the current stretch of slightly cooler temperatures means that costly measures to limit carbon dioxide emissions are ill-founded and unnecessary.
How psychology can help the planet stay cool
This month, an American Psychological Association (APA) task force released a report highlighting these and other psychological barriers standing in the way of action. But don't despair. The report also points to strategies that could be used to convince us to play our part. Sourced from psychological experiments, we review tricks that could be deployed by companies or organisations to encourage climate-friendly behaviour.
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Very interesting Electric Grid map on NPR today.
www.npr.org/templates/story/story.php?storyId=110997398
Take a few minutes to browse thru it. Very educational.
It is, but it's not new today. I posted that link on Monday, and it may have been up before then.
Obama has reduced the projected deficit this year by taking out $250 billion that was reserved for bank failures. The new estimate involves a calculated judgment that financial markets have sufficiently stabilized and the administration will not have to go back to the U.S. Congress to ask for additional money to bail out more banks.
Good luck on that assumption!
Guaranty Bank, an Austin-based savings institution with $13.5 billion in assets, is expected to be seized by the FDIC by the end of the week. According to multiple reports late Wednesday. The commercial banks are just now starting to fail, and there will be many more to follow.
The FDIC is now out of funds. When the panic sets in, the FDIC will not be able to cover the runs on the banks. Go for gold now.
not having much faith in the banks, are you?
by following your advice, people would become a part of the "great run on the banks"
i'm not implying that if every american would keep their savings (haha) in the banks, it would end up ok. i'm just uderlining that maximizing personal profit would end up in destroying the whole system, but that's nothing new.
Agreed...no one should read any truth into that attempt at green shooting.
The Obama Admin is off the rails in many areas IMHO.
We Need RTC-II - NOW
Here's another bit of information, which isn't surprising to those who have followed the real estate bust.
Mortgage delinquencies hit record high in Q2
Many of those newly unemployed workers aren't going to be able to keep on paying for the expensive houses they bought when they had jobs and were living beyond their means!
E. Swanson
If banks have 20:1 ratio of leverage, then pretty much most of them are underwater w/respect to the residential mortgage.
If other part of their operations are in similar position -- like commercial real estate, then pretty much the second crash is coming. Unless, they can make up with all the fees they charge the depositors.
The credit card companies are already raising fees. Here's an example of the latest.
E. Swanson
Why so much grief about cc fees? What is the BIG deal? If someone has a card, and they are getting charged fees they dont't like, change companies. There are many companies that don't. It's really that simple. Or get rid of the card altogether.
(I can hear the whining start already...."but we NEED our credit card to do business/live")
If someone is so strapped they can't afford $30.00 a year in fees, they are wayyy too far along on the Debt Slave train to worry about it and might as well walk away from the card company now. Do it. .
Most people dig their own holes, then cry bloody murder when they get dirt kicked in them.
"Oh, ya, I can pay for that new house on 110% of what I earn, I'll just get a cash advance on my card" ,,,,,,,gimmeabreak....
What grief? BD just made an observation. You're the one freaking out about it.
Please try to be more civil, and less antagonistic. Generate light, not heat.
No, not Freaking out about it at all.
The "light" I think people should see, is when the knuckleheads burn their credit cards and do themselves a favor. I have none, and never will. "A fool and his money, are soon parted".
Just an observation.
Maybe it you didn't intend it...but your posts often come across as if you're about to have an aneurysm. Tone it down, that's all I'm asking. Not everyone who possesses a credit card is a "knucklehead."
I think it's a subconcious effect of the ALL_CAPS username. It feels like shouting before TZ even says anything.
Thanks. You are completely free to share your opinion....IMHO, yes, anyone that has a credit card is a knucklehead. They are supporting the very financial monster that will eat their children. One of the few ways to kill the monster is cut off it's food supply. Your criminal government will not cut off it's head, although it should, by dragging the Wallslum Millionnaires to jail. ASAP
We got along just fine for a few thousand years with out them. They are a perfect modern example of what has happened to the U.S. culture, an extension of the "eat all the Buffalo, cause their free". Very little attention paid to the long term effects. Now, the chickens come home to roost and everybody is complaining about the poop on the porch.
I walk the talk...
My hero!
But doesn't your arm get a bit sore from patting yourself on the back?
I have and use a credit card often and I am not a knucklehead, I pay no fees and I pay no interest and with EFT it is easy to settle. The convienience of internet purchases alone makes it worth while. It could be said that those without a credit card to use on the internet are lacking but to each his own.
What Lynford said. Also, for large purchases, credit cards are much safer than debit cards or carrying large amounts of cash.
What WaterWeasel said. Also, I have three credit cards and have NEVER paid any interest on anything I have bought with them. In fact, I get a rebate back on the fuel I purchase with one of the cards.
The convenience is undeniable but TZ is correct that even if the consumer doesn't carry a balance and pay interest the merchant is paying a fee to the card issuer for the use of the account. It perpetuates the cyber money fraud and also you are subject to the system going down.
Always have enough cash to be able to operate independent of the communication system.
I've had at least two, sometimes 3, credit cards for over 30 years. I have probably not paid a total of $10 in interest or, ever, a fee of any kind.
They are very useful for buying stuff on line, for traveling and for buying things like gasoline which I like to keep close track of.
I don't have much respect for people actually letting a balance run up and paying those hideous interest rates.
Jobless claims in "surprise" rise -
Initial filings jump "unexpectedly" to 576,000 in latest week, a continuing sign of labor market weakness. Continuing claims also increase.
Do people actually believe that the recession is over.......
Or, is it just government propaganda to spur the economy?
I thought that this morning, listening to the CNBC hairdos go on about how they expected the employment report to show evidence of the improving economy. Why? The "good" earnings news is basically because companies have cut expenses...fired workers.
I think they are trying to talk the economy up because there really is this "we have nothing to fear but fear" attitude. If we can only get the consumer spending again, all will be well.
But the consumer doesn't have anything to spend. No matter how optimistic you are, you can't spend money if you don't have any and you can't get credit.
Also, just out -
More than 9% of mortgage holders are behind on their home loans, one third more than a year ago.
If these 9% go to foreclosure, that will be about 5 million more homes going on the market, or banks will be stuck with them.
Its a vicious cycle. No credit, no purchases, no jobs, no money, prices going down, banks closing down.
When unemployment gets back to 5% then we can talk about a recovery....maybe.....
And I've heard that over a third are "under water"--owe more principle than their houses are worth. And didn't I hear that inflation is now "negative," in other words we've entered the deflation zone/spiral.
You heard this from some guy? At the bar?
Sorry. Heard it on the radio the other day, but was just too damned lazy to double check. Thank heaven's dez is around to keep on my tail. Who needs a mom around with dezzy here to ride our sorry butts? ;-}
OK, here it is:
http://www.npr.org/templates/story/story.php?storyId=111605677
My daughter and son-in-law have stopped making their mortgage payments -after consulting a lawyer-because their mortgage is severely 'upside down'. (Los Angeles area) They have a friend who stopped payments on his mortgage a year ago and still no action from the bank. The banks are afraid to foreclose because it would mean these assets would have to be 'marked to market' making it obvious the banks are insolvent. In a way, this is a type of jubilee.
I don't know why the bank is not foreclosing, perhaps just to keep their foreclosures low and make their books look a little better. But they would not "have to be 'marked to market'". That banking rule was relaxed, relaxed completely out of existance. In Defense Of Mark-To-Market
That is one of the problems that many people are complaining about. The houses are still showing on the bank's books at the purchase price. These are "assets" that don't really exist, or more correctly assets that are shown at a greatly inflated price from their true price.
Ron P.
Also: If / when the bank takes over a foreclosed (or other circumstances) house or appartement, it becomes liable for property taxes, co-op payments, insurance (most often) maintaining it, complying with all local/state/fed regs. This might involve draining and disinfecting swimming pools, mowing grass, trimming hedges, repairing pipes, checking the roof, sending a rep to meetings, complying with anti-pollution and safety (fire) laws, energy rules, evicting squatters, etc. Big trouble and big bucks which the banks are not equipped to deal with.
That is, provided the house actually ends up by having one clear owner. ;) Heh.
I guess they're not the only ones.
From Denninger:
Growth works well in reverse. The same kinds of virtuous cycles that propel asset price inflation work equally well driving asset values south.
Nobody should be surprised.
It's not just the mainstream media that hasn't gotten a grip. Most blogging economists are still promoting growth as if it is simply a natural outcome of the sun coming up in the morning. Those who aren't predicting growth are in favor of it and promote tactics that support it.
A lot of economists I respect a lot are in this category; Michael Pettis, Nouriel Roubini, John Taylor, Thomas Hoenig (who should replace Bernanke), William Hutt, Doug Noland; some of these guys are financial analysts, not economists, per se. Some of the other finance bloggers such as Calculated Risk, Mish, Denninger, 'Tyler Durden', Robert Reich, Krugman are also pro- growth, many acknowledge deflation.
I'm not sure about Ilargi and Stoneleigh. They certainly acknowledge deflation as does James Hamilton. Anti- growth is hard to find. Growth isn't a drug anymore, it's 'medicine'.
I would think shrinkage is just as normal as is growth. Mebbe I'm missing something 'cause I'm not an ekonimist.
BTW, the most depressing blogger right now is Desdemona Despair.
Some idiot blogger wrote the recession will be over in 24 months. I think it was Roubini. Roubini becoming a bull is a turning point, a capitulation. I commented that the recession will last a little longer ... maybe it will be over in 24,000 months.
Or, 24 million months, except the humans aren't likely to be around that long.
BTW, the one blogger who never fails to raise my spirits is Sharon Astyk's; Cassaubon's Book.
There are some economists who are anti-growth. De-growth, I think they call it. Most seem to be European. Like this guy.
Serge Latouche. Thanks, he's a new one for me, very good! He reads like, 'un- economic growth via Herman Daly.
The mainstream is a long way away; the image of 'gthe cast of economic totalitarianism' is apt.
The credit/debt issue is the key - the "consumer" has been spending beyond their means for some time. The happy talk is supposed to get them to take on more debt, ignoring the fact that their access to credit is now severely limited. But not zero I guess, so if you can convince them maybe they'll run up the credit card for one more run at the cliff. This apparently qualifies as a "plan".
We can go back to 1958 days and pay for our houses with "cash".
Back in 1958, a new brick 3 bedroom home was just $11,000!
Stop all credit, all mortgages, no more car loans, etc.
Then watch all the businesses dry up.
Yes, Yes, yes.
If we want to get living costs back in line with incomes we must stop inflating the costs with credit purchases.
That is the first step anyway but globalization was the cause of the rise of consumer credit so I guess that means living standards will "globalize" as well.
OUCH.
How would it make business dry up? People are intending to pay for those thing they bought, aren't they? Wouldn't they buy them anyway? Maybe not today, but next year, or the year after.
The only people that benefit from high house prices are bankers. Well, and real estate agents. All the income going to interest could instead be going to other goods and services. You could send your kids to college without them incurring high debts. You could have one partner stay home and raise the kids. The horror.
People staying home to cook meals! People having cars and other goods fixed instead of trading them in! People buying smaller homes!
The horror , the horror!
Sounds like you are describing my childhood.
Maybe we should have an old fashion Jewish Jubilee. After wiping out all debt, giving house to people who live in them, and empty house to the homeless. Maybe we could rebuild from there.
BTW, This is mostly a joke, but it is better than the current administrations plans.
You may be joking, but Denninger argues that jubilee is what we need now.
In fact, that's his answer to the peak oil question. He admits that you cannot have infinite growth on a finite world. But suggesting anything other than free market capitalism is a banning offense. So what's the solution? Jubilee. A reset that wipes out the past growth and lets everyone start again.
jubilee via inflation is the most likely outcome. Get out of dollars and dollar based paper assets, stay away from variable interest debt, and invest in tangble useful goods.
I'm betting the opposite. I think we're headed for deflation. I'm mostly in cash, and not stocking up on tangible goods, because I think they will be much cheaper in the future.
I hope you are right, I am in US Treasuries. I am betting on a significant bump before jubilee. Timing is everything.
The price of energy alone should keep some pressure on prices across the board but the enormous capacity to produce globally can't be ignored.
Seems like exchange rates will play a role in the prices of imports but that is another games between China and America.
Lot of stuff going on and that makes it tough to call.
There isn't going to be any jubilee. People own those houses that are to be given away for free. There would be a war, instead.
Better would be a second currency; this idea was run up the flagpole in a Wall Street Journal editorial last year, I thought it was pretty radical and out of the box but it is a really good only way out of the corner we've painted ourselves into. One currency is indeed limiting, especially since we've used multiples in the past. We've had scrip, specie (gold and silver coins), greenbacks (also scrip), banknotes and bullion- backing. Often at the same time. (Greenbacks by Abe Lincoln.)
There are many different kinds of gold plans, for instance. I am not suggesting a gold- backed or specie approach, but a 'hard' currency to float 'hard' assets at the same time dumping the crap into the dollar arena. It's is predatory enough to be appealing.
A clue as to the means of effecting this is to look @ how the Treasury treated GM and Chrysler bond- holders. 20 cents on the dollar, take it or leave it!
Most of our debt is held by US citizens, so figure it out. We repudiate debt to ourselves while paying the Chinese by swapping dollars for the 'Niewe Dollar'. All that is missing is the President getting on TV and giving America the finger!
The economy is being pulled in opposite directions right now. There are both deflationary pressures and inflationary pressures. Right now the deflationary pressures are winning but their victory will be short lived. Eventually inflation will win the day. If it doesn't then we are home free because we have found a new way for the government to pay for everything, just print more money.
But I don't believe in such a free lunch. Eventually printing the debt and making it bigger and bigger will have to cause inflation, massive inflation.
Ron P.
I agree. We only disagree on the timing. I think it may be decades before we have to pay the piper. And as Stoneleigh puts it, by then inflation will be the least of our worries.
Deflation, or not deflation, that is the question. Tis obviously nobler to be into cash rather than bonds and stocks, but is it better than purchasing durable goods now?
We'll have to watch how things turn out. Everyone place your bets, spin the wheel, the ball is about to drop...
Actually I don't think that is the question. It's both: Have We Reached an Inflection Point in Economics History?
It is not obvious to me how it turns out, with respect to multiple claims on assets--there is person currently occupying a building (perhaps a renter), the supposed property owner, and many layers of loans. There is also the state government who collects taxes on the property, and is likely behind on them as well.
I could see a scenario where the property goes back to the state, and it starts reassigning to who it chooses. If people are to move more into rural settings and start doing more manual gardening/ farming, there will need to be some change in property ownership rules--most people could never afford property on their own.
I am not convinced this would work out well, though, regardless of how it is done. There are going to be a lot of folks unhappy about losing what was rightfully theirs. And food produced from a number of small plots (with inadequate training, fertilizer, water, and seed) is likely to decrease greatly from the amount when agriculture was mass produced with lots of fossil fuel inputs.
Wouldn't happen anyway. If the state starts reassigning property, it will just be to further enrich their corporate donor pals.
The only path to a non-corporate economy at this point, at least in the US, leads through RevolutionVille. And it won't be a quiet ride.
If this happened in Arkansas, the state would take the property for back taxes, and in about 3 years, sell it in an open auction, no reserve.
Any surplus would go to pay down the loans.
The jubilee is the most rational way to correct this, but thats' why it is doomed. Like single-payer healthcare we won't see this huge problem get addressed until the equivalent of a nuclear bomb hits the financial system. I think the bomb is there buried in all those loans just waiting to explode...
If you are correct then the best thing to do is borrow your butt off and buy anything.
If that proves to be the best move it will destroy the fabric of this country due to the gross unfairness of rewarding the most worthless reckless people over the prudent and intelligent ones.
We will never recover as a Nation because the door to the ultimate moral hazard will have been thrown open like the lid of Pandora's Box.
A more rational solution is to give EVERY citizen an equal amount of fresh fiat.
That would still cause enormous upheaval but at least it doesn't favor one over another.
It in effect devalues the dollar and it does it by getting money into the economy.
Anything that is unfair will cause a revolt.
Are you kidding? Unfair? Our entire economic system is based on unfair ownership of wealth. Americans are so psyched about their supposed opportunity to get rich they are willing to vote for the very politicians that make sure they don't ever have a chance.
I agree that American style capitalism is played out. It worked great when there where vast unexploited lands and resources. Anyone not satisfied working as a wage slave in the East could just pack up and move West stick a flag in the ground and start their own enterprise.
Now it is mostly claimed and anyone born into or migrating to the "Last Frontier" is relegated to sell their time to survive.
I am speaking specifically to this one problem in isolation of unpayable debt.
I am convinced that the system as we know it now is at the end of it's functional life and something entirely different needs to be put in place.
It has descended into a land of con men and swindlers and that has to be the mark of the end.
Yes, that is a sensible idea. In a circumscribed environment a Jubilee is the right answer. Scratch the debt and start over.
The problem is that it is a global world. Through many instruments the US owes mountains of money to other countries. And to powerful stock-holders, financial entities, amongst themselves so to speak. As everyone knows.
The US is not going to default, have the IMF (under US control more or less) come in and make stringent demands, to cut fed/state spending on health care, education, roads, so that the debts can be paid off ...even if slowly.
So no Jubilee.
on this topic, see for ex. Michael Hudson on the relevance of the plight and present reactions of Iceland and Latvia. Innaresting, promise.
http://www.counterpunch.org/hudson08182009.html
Local, internal debt forgiveness, or help to pay, is still a possibility. (E.g as for housing.) The Obama admin has ostensibly very weakly followed this path, more as political frill than anything else, with little impact or success as far as I can see. Americans simply do not like having to pay for deadbeats (say.) The supposed moral imperative of personal success at the expense (or for the benefit!) of others is unassailable. This all might work in times of energy expansion and economic growth, with unwinding the picture changes.
According to Max Keiser (maxkeiser.com) there is about a 25% chance that in the next 6 -9 months the US will have to "reschedule" the currency. The way he describes it, there will be a bank holiday for, say a week. And then the international creditors will force the devaluation of the dollar by as much as 50%. The banks reopen and presto! Everything thing in America has doubled in price.
I've been wondering about the inflationary aspect ot the TARP bailouts for some time now. The fact that there has been little, if any inflationary impact from creation of trillions of dollars. Is it deliberate demand destruction that is holding off inflation? How long can this state of affairs last? Will the end result be what Max predicts? Given the state of things I don't see how either massive inflation or a direct currency rescheduling is avoidable.
The reason the bailouts haven't caused inflation is because they are dwarfed by the wealth that has disappeared with collapse of the housing bubble. It's just sucked into the black hole of debt faster than Bernanke's helicopters can deliver it.
As for a bank holiday...they did that during the Great Depression. It caused a lot of consternation, but it didn't cause inflation.
LEAP2020 has been predicting something like that, too, but it looks like they're wrong. (They predicted it would happen in July, I believe.)
In the long run, they may be right, but I think their timing is wrong. Perhaps by decades.
The answer you gave for the lack of inflationary pressure is the conventional one. I would argue that the wealth that disappeared in the collapse of the housing bubble was of a special illusionary nature in the form of credit default swaps and wall street created side bets. Ultimately, there has to be some impact on the value of the currency when trillions of "assets" evaporate and then dollars are created and thrown into the void to simply prop up wall street balance sheets.
The scenario of the bank holiday is this; The TARP is realized to be not nearly enough to prop up the wall street banks and they come for more. But before the treasury can decide how much to give to Bernanke the international bond holders (China, India, Russia, etc.) start getting nervous and start to sell their US treasury holdings (They are preparing for this event right now IMHO). This causes a huge influx of US dollars to flow back to the US from overseas which is the impetus for the bank holiday. The bank holiday doesn't cause anything. The bank holiday is the stop gap to avoid the utter collapse of the economy. It buys the treasury time to re-schedule the currecy to avoid free-fall.
There are only a few ways for the US to avoid a scenario like this. One is for the Obama administration to actually say no to wall street. I don't see this happening. They could also do what the US does best, start a war. This is very likely........ unless we go broke first.
I don't get how a "reschedule" of the currency fixes anything as stated, prices double but money supply doesn't. Wont everyone just be even more broke and defaults increase exponentially?
The "reschedule" of the currency would be accompanied by other events. If prices double, workers would get pay raises of maybe 50%. Savers would lose. House prices would rise allowing bankers to sell the repossessed houses at profit. When the banks reopen, there would probably be rules limiting the amount of cash that can be withdrawn, say, to $500 / month, while credit card purchases could continue up to the limit of the cards. The average American would not be allowed to purchase foreign currency or precious metals. Basically the only way an average person could get his money out of the bank would be to spend it as opposed to invest it in something safer than a bank.
Think of how a bank holiday combined with a currency revaluation would help Wall Street titans at the expense of everyone else and then you will understand how it will go down.
Disagree. This wasn't just paper. It made its way into the real economy. People who had no money bought houses because of it. They used credit cards and HELOCs to buy furniture and appliances and tools and shrubbery and lawnmowers for those houses. That generated jobs for real estate agents, mortgage brokers, construction workers, Home Depot clerks, landscapers, etc. It had a real effect on the economy.
Not so with the bank bailout money. That goes to improve the bottom line of banks who are in way over their heads anyway. Nobody gets to spend it. It doesn't generate any jobs.
Even if no one get's to spend it (The TARP money) and "create jobs" as you say. Are not the dollars still marked down on some treasury balance sheet somewhere? If not, if the treasury has truly created this TARP money "out of thin air" with no accounting whatsoever, and no actual effect on the "real" economy then I would expect that this would cause the international bond holders even greater consternation, because they would have to look at their dollar denominated assets as completely intangible. Complete rubbish actually.
The inflation I speak of will follow the defaltion we are experiencing (And are not through with) now. It comes when these "dollars" come flying back home so to speak. Maybe you're right, this could be years away. But we certainly have something close to a perfect economic storm brewing.
That is definitely an issue. However, it's not clear what would happen. China has already made its displeasure clear, but they are not selling their dollars. We may be accommodating them, or trying. Obama is suddenly concerned with the deficit. And some have suggested that the bank bailout was meant to bail out foreign investors, specifically the Chinese.
China is as stuck as we are. They know they can't bail out of dollars without hurting themselves as much or more than us. I think they may be willing to do it, but they think of it as the nuclear option. The very last resort. What they want is for the pain to be shared equally. They are willing to take some of the losses, but they want us to take some, too.
China will not suddenly do anything. When they decide to act, they will act very slowly. And they have already started doing that:
China cuts holding of U.S. Treasury securities
Three percent in one month! I take it all back. That is not very slow at all. If they keep that rate up.... But of course they wont. They will, in my opinion, keep reducing their holdings but more likely in the range of one to one and one half percent per month. They will just let their bonds and bills mature and not renew them. That way they can reduce their holdings without getting nasty about it.
Ron P.
I've read that Stan Goff refered to the current (Actually this was fully two + years ago) global economic drama as a "High stakes game of international economic chicken," which is about as good as description as I've heard. Indeed China, being the biggest bond holder, is reluctant to cause their best customer (The US) to go broke. Of course even that statement is a gross generalisation in describing the economic relationship of the PRC and the US. The moves that China is making now, however, as darwinian points out are fairly ominous especially given the events of the last 9 months or so.
I don't see it as all that ominous. China clearly does want an alternative to the dollar...but it's also clear that they haven't found one. They see US treasuries as a safe haven. I think it's going to take quite some time for that to erode.
China's holdings of US treasuries are still up 7% since the start of the year. Small compared to the 52% increase last year, but hardly a sign that they're running for the exits.
Hi,Darwinian,
I have commented several times over the last couple of months that the Chinese are buying up massive amounts of non interest bearing scrap metal,etc,and paying for it in dollars for TWO reasons-to get rid of as many dollars as they can and to stay ahead of the commodity inflation that seems inevitable ,and perhaps sooner than later.
And as to why the feds havrn't generated any price inflation with the printng yet,I think there are two reasons.
One is that thelongest day of the year is in June,but the hottest days are in late July and August.Give it time-how long I don't pretend to know.
The other is that maybe they are still warming up.I'm sure there are enough programmers handy to add a few zeros as necessary later on.
Not so with the bank bailout money. That goes to improve the bottom line of banks who are in way over their heads anyway. Nobody gets to spend it. It doesn't generate any jobs.
Right. The money was shunted in to provide minimal debt payment and augment ‘reserves’ on the books, as well as, of course, to reassure. And, supposedly to prevent a financial meltdown. It was presented, in part, as a stimulus for the economy, but it was no such thing. The sums printed or paid out are actually quite small as compared to liabilities, I’d love to be able to detail that, but can’t, attribute it to gut feeling.
The scandal is that observers are muddling around in the dark, it is impossible to construct a reasonable overview, even estimative. Transparency? You bet! For the little corners that are revealed.
I see that Roubini, whose name seems oddly scarce around TOD of late, thinks Bernanke is doing a great job. What gives?
Why does everyone think that money matters?
Do we have the resources? Do we have the ability to get those resources? The answer to both is yes.
The Nation in control is the Nation that is in control militarily.
You are right about the war. History has always evolved this way.
The other thing with the bailout money is that it is just sitting in piles and not moving through the economy.
The real key is that the vast majority of people aren't getting there hands on any money because of the very limited economic opportunities.
If things get really desperate and the government starts sending "rebate" checks to every citizen than watch out.
As far as bank holidays go why would they bother?
With the financial system being essentially a colossal fraud why not just hit a few more key strokes and make it seem all better?
I guess the only real problem is if people do indeed go to the banks and demand physical cash...........which isn't in the vaults and hasn't been for a long time.
Just thinking out loud a little.
The days of the dollar are limited.
At some point the value of the dollar will go way down.
Like what happened in Mexico in the 1980s.
Dollar was equal to 13 pesos, and then 10,000 pesos!
Now it will be 13 dollars to the 1 peso!
One Caveat. PAX Americana.
I am too lazy to research but did they revalue the peso?
Like a reverse split?
The Mexican Peso has been floating since 1995. Before that it was pegged to the dollar but the peg was constantly slipping, creating one crisis after another. So they just removed the peg and let the Peso float meaning they cannot "devalue" or "revalue" the Peso. It is just allowed to seek its on level.
What is the Mexican peso (MXN)?
Ron P.
There are a lot of internet rumors. One is the US will have a bank holiday and the US will 'devalue' the dollar during this holiday.
The dollar is being devalued all by itself without any holidays. Why the holiday?
A better reason is that a lot of banks will fail and the FDIC doesn't have the staff to deal with all of them at one time.
Bank shutdowns are complex; many banks are state regulated or regulated by overlapping Federal agencies. A lot of ducks have to be herded into a row in order for the FDIC to be named 'receiver' and allow them to resolve the failure. All of this takes staff with a high level of expertise. Closing all the banks to allow some of them to be merged into others might be efficient.
Another scurrilous internet rumor (shut up Denninger) is the FDIC is running out of money. Good grief, where does that nonsense come from? The FDIC is an agency of the US government. If they need money, they will get some. As much as they need. If the FDIC needs to close all of America's banks, it will get the money from Congress to do so.
The hazard of all this is that this action would prompt depositors to shift their accounts out of banks or overseas or even out of money altogether.
Believe me, the US government does not want to see the price of oil go any higher. (It's destroying the economy as it is, right now.) Keeping cash in banks is the best what to keep 'hard' money prices stable.
As for devaluation; davalued against what, exactly? Currencies are valued against other currencies. The dollar is used to buy other moneys, usually by businesses in trade, but also by central banks, private banks and speculators. Currencies go up and down in value for little reason. Right now, the dollar is down because a lot of people think the economy is going to grow and investors believe developing countries (Brazil, UAE) have better growth potential than the US. Also, there is a dollar carry trade, which has US lenders AND borrowers financing growth in countries with higher yields, such as New Zealand or Australia. None of these are fundamental and can change overnight. If the dollar is 'down' (say ... compared to the Euro) it only takes a bit of news or a bank failure and all will dump Euros or Australian dollars and rush back into US dollars.
Believe me, if things get so scary dollarwise, the Treasury will make Fannie Mae walk the plank and start the credit crisis again.
The real devaluation issue; not dollars to another currency but dollars to oil. A devaluation against ... say, Yen ... is meaningless. A larger fiat devaluation would raise - perhaps double - crude prices. The US economy would crash and everyone would race back into dollars and the devaluation would be in vain.
2 cents.
The bold parts are exactly what Denninger said.
Steve from Virginia:
Todays busines section of the NYT has a story of how the FDIC is "taking extraoardinary steps" to "keep the fund that makes depositors whole from being drained." Not what I would call an "internet rumor." The article quotes a chief equity analyst as saying "When you have this many bad loans at these banks, there are no easy fixes.
Also, asking the question: "davalued against what, exactly?" (sic) Is not a real question. It's something you say before you launch into a speech about currency speculation. Unfortunately most of your speech is gross oversimplification. You said: "Currencies go up and down in value for little reason." Wow! what a whopper!
I'm sure there are alot of speculators in currency markets who love that you to maintain this absurdity in hopes of it catching on. No sense in having the general public look into the messy details of our completely gamed and manipulated economic system.
Right you are. They are suppose to go up and down because of capital flows but the whole system is a manipulated mess that not even the manipulators have a handle on.
A huge game of financial chicken.
1000-1 back in 1993
In the medium term the value of the debt is unsustainable, and some sort of default is inevitable. This can either take the form of inflation thereby reducing the amount of debt in relative terms to what our resources are, or outright national bankruptcy. My bet is by inflation because in the end no one will actually have to declare bankruptcy.
In Russia and other countries, people prefered using American dollars to their own currency.
But now we may go in reverse, and could you imagine using another countries currency here in the US?
So far peak oil has been hammering the entire world. The Ruble increases in value when the price of oil is high and decreases when it is low. One will have to know how to navigate the volatility of foreign currency exchanges.
The U.S. government is making happy talk because it is desperate to make Obama's promise that his stimulus bill would cause a recovery in fourth quarter 2009, come true.
I don't think there will be any "spurring" of the economy, but they might succeed in holding off another level of panic and discontent for a while. Did anyone see the story about the guys openly carrying rifles outside of the town hall meetings?
"The indicators suggest that the recession is bottoming out, and that economic activity will likely begin recovering soon," said Ken Goldstein, economist at The Conference Board, in a prepared statement.
What is Ken Goldstein smoking?
The only thing bottoming out is the first barrel.
He did not realize it is sitting on top of 3 more.
1. Commercial Real Estate loan defaults
2. Worthless Dollar
3. US Govt bankruptcy
In a few more years, 2009 will be remembered as the last "good" year.
The media has been nothing but propaganda for ever.
That is why the internet is our last hope.
Regarding the DB weblink: "Deep-fried locust, anyone? Insects may be the answer to our looming food crisis"
Campbell's Cream of Cockroach Soup is a sure-fire bet to be a global best seller.
Bob Shaw in Phx,Az Are Huamsn Smarter than Yeast?
Wait till testing for heavy metals is completed. They'll probably make fish look like organic vegetables.
How about wasp and yellow jacket recipes? More this year than I can stand.
In China they are already serving starfish, scorpions, and sparrows in local street markets. The Chinese stock market has been crashing for a couple weeks now.
Iceland crashed earlier this year due to massive government deficit spending. Foreign workers once employed to do their dirty work have left the country. Skilled native Icelanders were going to the continent in search of jobs.
That's a bit of misdirection. The economy of Iceland crashed due to massive dumb investments by their banking sector.
http://www.amazon.com/Man-Eating-Bugs-Science-Insects/dp/1580080227/ref=...
Check this out if you're interested in entomophagy.
I'm wondering if LocustFeast(tm) will eventually be rechristened Soylent Red or Soylent Blue.
I actually think there is a possibility of this catching on! Who could have predicted a couple of decades ago how Americans would be eating sushi ! Have you ever eaten Ama ebi (sweet shrimp)? It's our family favorite. The shrimp heads come out deep fried - antennae, eyes, legs and all! It is delicious. If I can eat THAT, just pass the soy sauce and wasabi, the grasshopper looks pretty tame in comparison. :-))
Greer's "Betting on the Rust Belt" article linked in the DrumBeat is a very good companion to the Sharon Astyk's article posted yesterday.
Transistioning to a new economy (including both small-scale and regional manufacturing) is a quest I've put my heart (and wallet) into through my business ventures.
I thinks Greer's vision of the future is the "least bad" of a lot of pretty dismal possibilities that we often discuss here.
*I'm a life-long resident of the portion of the Rust Belt that stretches from northern Indiana to middle Missouri
Huh, so he's relocated to MD. And just as Transition Town was starting up in Ashland. Working on a novel, too: Star's Reach.
Fed up by expense, smokers grow own tobacco
I don't smoke cigarettes anymore but I do require a certain amount of "recreational" marijuana. The problem is all of the medicinal marijuana dispensaries in CA are draining all of the best varieties. My long-time supplier has been unable to find anything decent without going to the dispensaries himself and that is at a cost of up to $80 for a 1/8 ounce.(ouch!)
I've resisted getting a "medical marijuana" card but that might be the only option and at least then I can grow my own legally.
Joe
Wonderful, Leanan! You can also make your own 'paper' for it from maize, from the dried leaves around the corncobs. The Spanish name for that is 'chala'. Cut them to size with scissors when they are still wet, and hang them to dry. To use, pick one, wet it with your tongue, cut off a thin strip (to use as a cigar ring! that's the original), then roll the cigar, tie the strip around with a knot.
To this day these prepared leaves are sold in Brazil, in packets and exported to neighboring countries. A nice little earner.
A way to prepare tobacco (tabaco de naco) is to just roll the leaves very tightly, soak them in molasses and make a kind of rope, hung to dry. You cut it with a sharp knife, as needed and roll in the chala leaves.
I've smoked it myself. Never did me any harm.
Future Health Care plan in the US - (After the gov't goes broke) -
1. 1st aid kit
2. 2 sharp kitchen knives
3. Good bottle of whiskey
4. A bullet to chew on
5. Home made cigarette to smoke after
Add to that:
6. Shovel, pine boards, saw, hammer, nails.
I thought this might catch on. My corn did pretty poorly this year, so I think I will try tobacco next year. Good practice before shortages hit, and I think it would sell real well at the farmers market. I wonder if the raw leaves would be taxed or is it just the finished cigars & cigarettes?
I've though about making pipes as well, from tree burls/roots or clay - I have a small kiln. Guys on eBay often sell heaps of broken clay pipes excavated from the Thames - they were so common they're used as an archaeological benchmark. Lots of smoking in Kunstler's novel - it was nigh ubiquitous in the Americas pre-Columbus, tech varying from elaborate carved pipes down to heaping dirt over some smoldering tobacco, sticking a tube into the result, and inhaling until you saw stars.
Seedman.com has both the raw material and a book on growing/curing/etc. Not surprised his business is through the roof.
If tobacco becomes popular then booze should be like gold to silver.
I don't know anything about making shine but I may have to look into it.
I guess it would take a decent amount of potatoes or whatever but it seems if the Russians did/do it so can any collapsed society.
Check out The Alaskan Bootlegger's Bible. Haven't really explored what can be done in the way of these vices, but it's a funny book chock full of recipes for dandelion wine etc. Should be enough for your clientele to drown their sorrows.
Did anyone catch the story about the Libyan terrorist released today? It's obvious that he was released because Britain wants access to that oil. Its obvious to a thinking person that 75% of the military and diplomatic decisions we make are directly related to oil and other resources.
It is also obvious that the guy was framed when he was originally convicted.
The best evidence is that the bomb was placed by Palestinian extremists under direction by Iran, in the months after the US accidentally blew up an Iranian civil airliner. By the year 2000, Iran had a relatively moderate pro western president, and Libya desperately wanted to upgrade its oil industry, almost as much as US/European oil companies wanted the oil. However, Libya was off-limits because of sanctions, and the west didn't want rock the boat with the new Iranian president, so they cut a deal Gadhafi.
Two people were arrested on paper thin id evidence. One was acquitted. The guy was a secret service operative, but he was a minion and he had nothing to do with the bomb.
RalphW
I think your reply just goes to show that there is far more depth to any news story than the headline itself yet so many people are prepared to say -and sometimes do- so many awful things without knowing the full truth it frightens me. Of course we can never know the full truth but I guess that is the nature of the beast.
Nick.
Also at the time there were UK hostages in the Lebanon, who were released shortly after the arrests. The US needed Iranian acquiescence for the first Iraq war.
I need two factoids for a White Paper I am writing.
UK North Sea production is declining at about what % per year ? -7 %
And as Russia in 2007. Production was up 1.x%, domestic consumption up 6% and exports down -1.x%.
I looked for the year and exact percentages but had trouble finding them.
Sorry, but this is a massive paper (14 pages so far). Decent chance of having an impact.
Best Hopes,
Alan
If you click on a specific country, this EIA website has production, consumption & net export data through 2008:
http://tonto.eia.doe.gov/country/index.cfm
BTW, Russia is showing a huge decline in NG exports, something like 50% down for the first six months of 2009, versus same period last year. Obviously lower demand is a big factor, but what is puzzling is that Norway's NG exports showed almost no change from July, 2008 to July, 2009.
http://www.norwaypost.no/content/view/22400/1/
UK peak oil year was 1999, at 2.91 million bpd. According to the IEA's Oil Market Report last month, UK oil production this year will average 1.5, and next year 1.32 million bpd, which works out at approximately 7% annual decline rate over the 10- or 11-year period. Decline looks like continuing at much the same rate, from what I know of upcoming developments.
UK gas is more complicated: decline was very steep 2003-2007, but may be flattening out a bit. There could even be a slight rebound next decade when the West of Shetland gas fields come onstream. But oil is twice as important as gas, in total UK revenue terms, and that seems unlikely to change.
Russia in 2007. Production was up 2.1% (491mt), exports up 4.0% (258mt).
Refining up 3.8% (229mt)
Since when was coal a renewable?
"As previously announced, electricity from coal gas will earn rewards under the RET, although it is not renewable."
Renewable energy deal gets green light (The Age, 19 August 2009)
It's an efficiency play. Coal gas can be burned in a combined cycle plant for a 15% improvement over conventional pulverized coal. If it's done right you can remove virtually all of the impurities as well (alas, not carbon).
As you say, it is not renewable. More like a compromise to get the coal lobby on board. I would be surprised to see any plants of this type built; very few have gotten off the ground in the U.S.
Why not just extract part of the energy from the coal.
If you heat coal in the absence of air you produce hydrogen with the carbon residue left behind as coke, bury the coke and you have sequestered the carbon, burn the hydrogen and you have clean energy.
This is how all town gas (hydrogen) was produced in the UK up until the 1970s when we switched to North Sea gas (methane) - in those days we burned the coke as well which was clearly much too efficient and not a good idea.
You've got that process a bit wrong. All gassification processes I know of involving coal depend on the carbon in coal ripping oxygen from water molecules at high temperature, resulting in output streams of H2 + CO (+ CO2 perhaps). No residue of coke, and no way to "return" the CO or CO2 to the coal bed.
The process is an above ground one, pyrolysis, the important bit is no oxygen is involved, I can assure you a lot of coke is produced, it was cheap low grade fuel back in the 1950s for the USA as well as the UK - your gas supplier knows how to do it if they are forced to and any hydrocarbon source can be used, not just coal - I think a lot of coke is still used in the steel and electricty industries etc , we just need to stop burning the coke, keep it away from oxygen.
http://www.wastereports.com/information_sheets/Pyrolysis%20and%20Gasific...
http://en.wikipedia.org/wiki/Coal_gas
http://en.wikipedia.org/wiki/Gasification
xeroid -
The 'coal gas' you are referring to is actually a mixture of carbon monoxide, hydrogen, and methane (plus small amounts of CO2, nitrogen, and sulfur compounds). While the composition can vary, hydrogen and methane are the predominant components. It typically has a heating value that is a little more than half that of natural gas on a BTU/cubic ft basis.
We could be seeing more of this in the future. However, it might have to be cleaned up to a greater extent than originally done in order to meet air pollution standards, particularly if high-sulfur coal is used.
Why should we refrain from burning perfectly good coke just so we can go to the expense and bother of mining MORE coal to burn it it's place?
Coal (and fossil fuels in general) shouldn't be burned - it should be converted to coke then buried, only burn the hydrogen - the Earth can't stand burning accelerating amounts of fossil fuel.
I did realise it's an efficiency play and a pay off to big coal.
It's just that RET is suppose to be about building product volume to help foster R&D and economies of scale within the renewables sector.
Re: China Repeats U.S. Energy Policy Mistakes!
A Chinese oil addiction might be useful on the global warming front. Helping China wean itself from an oil addiction may be a big leaver for getting China to the table and into a WORKING International Climate Change Agreement.
The way things stand at the moment, Copenhagen or any other foreseeable climate change conference has no chance of achieving a working agreement.
Did anyone else find the article on US dependence on Canada interesting?
"The problem concerns retaining economic and political power in the face of decreasing self-sufficiency in natural resources and raw materials."
The US will have to expend more and more financial and military power to keep the empire in line. At some point places like Canada are sure to rebel, just as the US did from the British empire long ago.
A I've said elsewhere, the Import-Land Model (=US consuming 1/4 of world oil and 44% of world petrol with 4% of world population) is even more important than the ELM.
What will happen to the other major importers of oil as supplies dry up?
I wouldn't worry about a Canadian rebellion as long as Albertans stay as enamored of the USA as they currently are.
It depends on whether the importers have anything physical to exchange for the oil - IMO the USA has had a good run exchanging paper IOUs of IOUs for oil. But this is unlikely to be sustainable for very much longer and when US$ debt is no longer accepted it will ease every other oil importer's problems a bit. I'm not sure I would want to be an exporter to the US of anything at that point though.
As a Canadian I find some of this discussion and the following comments challenging, but must acknowledge the underlying truths as stated. The only point I would raise in re-direct is that economically, culturally and in many other ways Canada is PART OF the United States of North America. It simply has no rights within the union such as voting or other legal rights, a slave state if you will. Discussions of rebellion if involving military action are nonsense, never going to happen. As pointed out above, the factional divisions of interests in Canada are exactly the same ones as in the US and in any call to rebelion would align with their counterpart factions in the US rather than together against the US. US rebellion from Britain was supported by a) an ocean of isolation which took weeks to cross, meaning local factions were kept sufficiently isolated to be controlled. No such luxury for Canada b) Powerful alies willing to help financially, diplomatically and militarily (mainly France). What potential powerful ally would be insane enough to help Canada rebel?
I would liken Canada to Rome's Latin allies on the Italian peninsula. Not quite Roman, but very much integrated into the apparatus of the empire.
Just to expand a bit on the "slave state" statement, for proof I would offer a) When the lumber market falls off, no US lumber mill suffers until all Canadian mills are seriously hurt or shut down (see $3 billion in tarrifs imposed on lumber by US despite specific ban in NAFTA and winning of case in WTO, US ban of Can beef exports due to 1 case of bovine spongiform even though everyone knows that all the deer and antelope across northern US have the same condition and the case publicised is very likely simply evidence of better monitoring for the condition in Canada, all steel mills in Canada must shut down before any US mill suffered, etc. etc.) b) ditto pulp and paper c) In the "US" emergency aid package to GM, of the $70 billion total Canadian govts contributed 20% but get no say in the process, which US average joe's consider "their" bailout.
The list is endless.... US congress continually deliberately bows to US corporate lobbys from their constituent states and pass laws which damage long-established Canadian trade interests local and abroad (see reactor sales to China - Canada built 2 new ones at Quinshan which started up on-time and on budget in 2003-4, yet mysteriously then next reactor contracts went to US construction companies. Foreign "aid"? Ford motor company took Ford Canada private in order that they would not need to publish financial results separately for it and to avoid Cdn taxes by not having to declare any profits here - huge futile lawsuits from Cdn shareholders.) with impunity, as Canada is powerless to respond, being incapable of surviving a trade war.
If that gives any Yanks the impression that there's a huge amount of pent-up resentment (to put it politely) among most Cdns, good, that's the correct impression. We wish you'd go and be "allies" with the Aussies a bit more, until they too discover how things work.
Well,lengould,there are some of us in Australia who know how things work.We started out as a British colony and we still are,just not British.Try China,Japan,US and so on,ad nauseum.
Australia has certain advantages because it has no land borders,but,like Canada,it is run by a crawling species of the oligarchical family who can't/won't think outside the square and have no concept of history let alone the ability to learn any lessons from it.
Hey Lengould how come the Ground Beef at my grocery stores sez product of the U.S./Canada? you're being a bit harsh here. Pretty much everyone county wise put the kibosh on Canadian Beef after your cows went mad. We are the number 1 market for your feeder cattle and if the cattle are under 30 months, or have their spinal columns removed if older than 30 but less than 36 months then they can process your cattle. Our beef has the same restrictions in most of S.A., Europe and Asia if we don't have a total ban for export to those countries.
I am married to a Canadian (sorta) her Dad is now a naturalized merikan. The rest of the clan all still live in Canada. Our get togethers are always a most jovial time. The country that wins the cribbage tournie has supreme bragging rights. Appreciate your comments and don't find a lot if anything to take issue with. I certainly wish to honor your and Canada's sovranty and with an attitude like yours that's easy to do. Hopefully the rest of the numbskulls down here think like wise.
Thanks to all, and especially to len, for insight on my question. Resentments eventually have some kind of impact, and Canada is by no means alone in its resentment against US hegemony.
The article Canada has a tidy arrangement with the U.S. -- but for how long? is very closely related to what I was saying in a post last week: World Oil Exports; US Oil Imports; and a Few Thoughts on Canada
A lot of Canadians would be more than happy to sell their oil to someone other than the United States. In fact, they are already making arrangements to ship oil to the West Coast by rail:
http://network.nationalpost.com/np/blogs/francis/archive/2009/04/09/cn-s...
http://network.nationalpost.com/np/blogs/francis/archive/2009/04/15/oils...
I sometimes wonder the emphasis on the problems of Oil Sands oil is an attempt to get Americans to decide they don't want Canadian oil. That makes it even easier to sell Oil Sands oil abroad, hopefully at a better price. It also reduces the tie to the US. Canada is more transparent than some other sellers of oil, making it easier to attack.
Re: 'Denver Airport Plans Solar Power for Its Fuel Farm'
Perhaps I have my Irony Meter on too fine a setting this morning, but am I the only one who thinks it just a bit surreal to use solar power to pump tens (or perhaps even hundreds) of thousands of gallons per day of fossil fuel so it can be consumed in jet planes taking people on long trips that are often unnecessary?
I guess it's just part of everybody jumping on the current 'green' bandwagon. I put this in the same category as GM coming out with an electric Hummer. Or the DOD coming out with a more fuel-efficiency Abrams tank (perhaps one that gets 1.4 miles per gallon instead of 1.3). Technically, all are improvements, but all completely miss the point.
It is funny, but the acres of solar panels that you drive by to the terminal sure look cool. It is one of the most accessible large installations, seen my millions each year. It can't hurt and just the eyes and "mind space" of all those visitors might be worth something.
And those panels will probably last longer than the jetfuel.. they'll get reassigned.
I agree--even though the current array is *almost* enough to power the people mover system inside the terminal (including the light rail), it's better than nothing. I'm fundamentally skeptical about solar PV as a faciliator of a broader transition, and I recognize the irony pointed out above, but the simple fact is that these panels will be generating for decades, and I'd rather see my tax dollars spent on this than the cash for clunkers program (or many, many other government programs).
A grid-tied 1 megawatt system deployed to the roof of every elementary school in the state would be even better...
I watched this video three times and I still am amazed at the conclusions that some of the talking heads came to.
Foreclosures Dip Slightly in Q2
But foreclosures did not dip. According to the charts they showed both prime and subprime foreclosures increased. Prime foreclosures showed a speedup in foreclosures and supbrime showed a slowing of the rate of increase but still an increase in florclousure rate.
The question was asked "will the housing market return to the rates of appreciation that we saw in 2004?" "Of course it will" was the answer. "The average appreciation rate is 4 to 6 percent and that is a healthy rate. Only Dean Baker made any sense when he reminded them that for one hundred years the average appreciation rate was the same as the rate of inflation.
But it was generally agreed that the housing market will not recover until the unemployment rate recovers. That was expected to be sometime next year and the housing market recovering about a year after that. All in all this is a really good video in spite of a few flaws.
Ron P.
I am of the understanding that banks have been purposely sitting on a lot of foreclosures in order to keep them off the books, that when the piper plays the rate of foreclosure will explode, any thoughts?
Yes, I tend to agree with you. See ET's post above:
Eventually the foreclosures will have to be made. And as I pointed out to ET, the Financial Accounting Standards Board no longer requites banks to mark to market. That is they can hold foreclosed property at the assessed value at the time of the loan rather than the true market value which may be fifty percent below the original loan value.
One reason they could be doing this is that they expect the market to recover soon. I would advise them not to hold their breath.
All this will really do is assure that another big bust will happen in the future.
Ron P.
I think part of it could be to give people time to work things out, get federal aid, etc.
Some of the talking heads are expecting foreclosures to pick up because people are giving up on the government bailout for homeowners, or are finding out they don't qualify.
This is a common tactic. If you want to report good news, and are having trouble finding some, just take another derivative. Eventually it will sound good.
Graph of the Day: Change in Poverty Due to Climate Change in 16 Developing Nations
Wow. (In my imaginary world) I was really betting against ng falling below $3. I was wrong and I think it is because the economy is much worse than the DOW would have us believe.
Natural Gas Dives Below $3, 1st Time Since 2002, on Supply Glut
I am in the same boat as you, really shocked. I expected crude to rally, and nat gas to ride on the back of it, at least a little. Not even close!
According to EIA, nat gas for electricity through May 09 is down 4% (trailing 12-month basis), and industrial gas demand is down 7%.
Comparing the first five months of 09 to 08, electric sector demand for gas is basically the same. This indicates that nat gas displacing coal is offsetting lower electricity demand (sure enough: coal is off 5% on a 12-month trailing basis and 11% Jan-May). Now the kicker: industrial gas demand for the same period is down 13%. Add in new shale plays and LNG that can't be turned away, and that's a whole lot of natural gas looking for a home.
The demand trend for the year does not look promising, either. It looks like these percentage gaps for 2009 will grow rather than shrink.
Re: 'Secretary Clinton to Announce Further on Energy Aid Help' (to Pakistan)
Oh that's just great!
Iraq is a total mess that slips back in sectarian chaos the moment the US turns its back.
The current US involvement in Afghanistan is taking on a trajectory that is increasingly reminiscent of the start of our major build-up in Vietnam circa 1965. Afghanistan is liable to be to Obama what Vietnam was to LBJ.
Since Obama took office, we are quite visibly trying to increase our presence and influence in Pakistan, with the proposed building of a 'green zone' type complex in (I think) Islamabad. And now it looks like we are going to try to help them with their energy problem. What is the US going to do, give Pakistan umpteen billion in aid so that they can buy oil and/or upgrade their energy infrastructure? I guess the problem of Americans getting squeezed by high energy prices is not the concern of the State Department but rather some other government agency. Does anyone here believe that the right hand of the US government knows what the left hand is doing?
I am convinced that the true energy policy of the people who really pull the strings in the US is to so thoroughly dominate the major oil-producing regions of the world such that we will be able to maintain a steady flow of oil to the West regardless if others have to go without. The corollary to this is that we need to be able to deny said oil to our rivals, such as China. While Pakistan is a net energy consumer, it fits in perfectly with this strategy because it is the only Islamic country with nuclear weapons that if shared with other countries in the region would put a big crimp in our ability to intimidate and occupy.
All of the above has really worked out fine so far, hasn't it?
Oh, I forgot another one: the US is also setting up something like seven bases in Colombia, ostensibly to aid them in the war on drugs but more realistically to put pressure on Venezuela with the hope of eventually installing a more US-friendly (read that as US oil company-friendly) government.
This folly will only grow and grow. And the more it fails, the more folly we will heap upon it.
I was reading this today about Afghanistan:
Who is funding the Afghan Taliban? You don’t want to know
http://blogs.reuters.com/global/2009/08/13/who-is-funding-the-afghan-tal...
1800s Financier Jay Gould Quote heavily parsed out: I will simply finance methods so that half the people start killing the other half and vice versa. It should be highly profitable and great fun to watch from afar. Privatize the profits, socialize the costs. Let MPP run free so that very minimal trickle-down occurs, but make sure to skim off a percentage so that wealth accumulation continues to flood-up to those elite few. From massive wars to machete' moshpits to even selling wood for brain-bashing clubs: there is wealth to be made by arming both sides and demanding very high prices for essential water and food.
NYT: States Shed Reinsurance and "Run Naked" Through Storm Risks
This is utterly insane. For those of you doomers looking for a credible fast crash scenario, here it is: The big one on the San Andreas, plus a Cat 4 or 5 punching its way up the ship canal to downtown Houston.
A completely bankrupt and non-functioning CA and TX. That should just about do it.
They're all NUTS!! Completely NUTS!!!
Yes. Desperate. Nuts.
Hmmm ... insurance can only pay out if there is enough money in the fund - it will be interesting to see how the PTB cope with the FDIC running already out of funds - these are not normal times!
I think insurance for major disasters could be an unsustainable post peak oil scam like banking and pensions since they all store their reserves in things like real estate, stocks and bonds which must have economic growth to work. In a major disaster I wouldn't assume that there are an adequate number of buyers to convert the reserves to the required cash.
What do you think will happen when the general public finds out the FDIC is out of money?
Will they withdraw from the banks, or hope and pray?
If the bank does not have but 10% of deposits on hand, the gov't will not be able to cover it.
Someone is not going to get their money out..........
FDIC has 500 billion dollar credit line with the treasury. No source off top of head.
Why the FDIC won’t run out of money, Reuters Blog, Felix Salmon
Congress Raises FDIC Limits, The Wall Street Journal, May 21, 2009:
Other sources indicate the borrowing limit is $500 billion.
Depends.
If they have concluded that the risk of the reinsurer reneging on their obligations is greater than the risks being insured against it is perfectly rational.
Doubly so if it helps the current budget.
WSJ (via Google): Reluctant Shoppers Hold Back Recovery (or see today's The Automatic Earth)
We talked about this some on yesterday's DB. People don't have a lot (or any) discretionary money left to spend. Furthermore, most of what the stores have on offer these days is just cheap Chinese crap that few people really need. So most people are just staying home. The best way to save money at the stores is not to walk into them in the first place.
(Anecdotal supporting evidence: I help out my aging parents with grocery shopping each week. They like to shop at a Super WalMart; I otherwise wouldn't set foot in the place, but I'm not going to argue, so that's where I take them. I have been noticing that it hasn't seemed all that crowded, and that most people don't have much besides the usual groceries and HBA stuff in their carts. Maybe once in a while you'll see a cart with one or two non-consumable things. I never, ever see a cart piled high with "stuff" these days. People just are not out on buying sprees any more, at least from what I can tell.)
I don't see this changing anytime soon (or ever, really) - certainly not in time for this holiday season. The real tsunami of retail shutdowns starts in earnest this January.
I don't shop at Walmart but there is one near where I live and it is (or was) a convenient place to get large amounts of green chili roasted. Last year we had our homegrown Mirasols roasted in their big gas & electric roasters for $5 per bag. This year, after standing in line for half an hour, we were told that the employees had been ordered to not roast chilis unless they had been purchased at Walmart. One more reason why I hate Walmart and won't shop there.
Don't you live in New Mexico? C'mon, spell it right! (chile)
:)
Forbes: Life Without Frivolities
Zogby survey, confirming that people really are cutting back, but that this might not just be a short term phenomenon but rather an long term trend. (Yes, it is.)
"Cheap is the new chic."
I'm not so sure. I expect that if people ever start to feel secure again they will be happy to take on debt and over indulge in whatever is their fancy.
It will be a long term trend, most probably because that sense of security will not return for a generation.
I think this only applies in a BAU scenario. If the Greater Depression is followed by another boom like we had after WWII.
I don't think that's going to happen. People won't get that sense of security again, and even if they did, it would be much harder to borrow than it has been in the lives of most people alive today.
Carbon credits. Builing a better future for our children. LOL.
http://www.telegraph.co.uk/finance/markets/6057263/Seven-arrests-in-susp...
Marco.
Study: Plants stressed by climate change may make things worse
http://lfpress.ca/newsstand/News/CanadaWorld/2009/08/17/10487956.html
Greer: "...how many states within driving range of California have drawn up plans to deal with the massive influx of economic refugees that will likely follow once California’s relatively lavish entitlement programs are slashed to the bone or shut down completely[?]"
I can't speak for Oregon and Washington, but would point out that the Interior West states (a) have never had particularly generous programs and (b) have been making cuts, just not with the same publicity that California draws. Anyone who thinks moving from LA to any of Phoenix, Las Vegas, Salt Lake City, Boise, or Denver will get them generous public assistance is in for a rude surprise. The Governor of Colorado, the state with which I am the most familiar, announced cuts in mental health and programs for the disabled this week. By the most recent estimate, when the General Assembly reconvenes in January, they will be looking to cut another $800M or so out of the state budget.
Monsanto to Charge as Much as 42% More for New Seeds
http://www.bloomberg.com/apps/news?pid=20601103&sid=aLW8VZBkP3PA
World sets ocean temperature record
http://news.yahoo.com/s/ap/20090820/ap_on_sc/us_sci_warm_oceans;_ylt=At4...
Hello Jmygann,
Thxs for the info. This should greatly help disarm those who still argue that Climate Change is not happening, but my guess is that we will see global fisheries and coral reef habitats collapse into widespread extinction before they finally admit they were wrong:
-------------------------
Breaking heat records in water is more ominous as a sign of global warming than breaking temperature marks on land, because water takes longer to heat up and does not cool off as easily as land.
"This warm water we're seeing doesn't just disappear next year; it'll be around for a long time," said climate scientist Andrew Weaver of the University of Victoria in British Columbia. It takes five times more energy to warm water than land.
The warmer water "affects weather on the land," Weaver said. "This is another yet really important indicator of the change that's occurring."
Georgia Institute of Technology atmospheric science professor Judith Curry said water is warming in more places than usual, something that has not been seen in more than 50 years.
--------------------------
Alas, my friend, but those who are still arguing are in no way interested in the real world. This data will have zero impact on their yammerings. I am really coming to believe that "we" are in no way smarter than yeast. For some values of "we", that is.
I wonder how many children and grandchildren, that sprang from the loins of these yammering fools, are now starting to yell at them to STFU?
IMO, since deniers are batsh*t crazy and dead-set against changing their dead-heading viewpoints-- I dead-reckon they should be more than happy to wear a tiny, dead bat [from White Nose Syndrome] as part of their daily fashion attire. There is now plentiful dead-weight tons of bats to fulfill this coming fashion trend.
Beats wearing a big, rotten, really stinking fish strapped to one's chest as they go about boasting how we can easily ignore CC and vastly elevated extinction rates for their belief that a Garden Of Eden lies directly ahead.
I miss my bats. Seriously, here in New England our lovely bats are being hammered by this white-nose thing, and the increase in mosquitoes is obvious to everyone. And I just plain miss them flittering about on these otherwise perfect buggy bat evenings.
Year by year, we lose another link in the chain. I have a file on my computer called "things lost". I don't see a solution. I am full of sorrow. We will eat the planet. I am simply bearing witness at this point. I don't think there is anything to be done about it. This thing is going to play itself out.
(And yes, I am an ecologist.)
It`s the 2nd Law of Thermodynamics at work....we`re all reducing the gradients available, since nature hates a gradient. The bats are just collateral damage and eventually it`s our turn.
I don`t like it either.
But it`s the law and it governs all matter and we`re made of matter so we follow along.
Good idea, but I believe that an albatross is traditional.
Maybe back in ye olden days when those birds were plentiful:
http://www.conservationinstitute.org/education/albatrossextinction.htm
----------------------
Albatross Extinction
Estimated extinction time: near future.
In 1996, just three albatross species were threatened, but today all 21 species are at risk of extinction...
---------------------
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10...
-----------------------
Sea mammal protection bill scrapped [July 30,'09]
A draft law that could have increased protection for albatross, dolphins and seals failed yesterday when National MPs voted not to support it...
-----------------------
Dr. David Suzuki: "We are on a suicidal path...We are in the 59th minute..."
EDIT: A simple rule is required for all politicians that continue to kowtow to their special interests: for every 100 known species that go extinct they self-chop off a digit. My guess is most will be waving fingerless stumps in the air long before they come up for re-election.
Regarding the Lester Brown essay, up top ("Throwing Out The Throwaway Economy"):
I am skeptical of the following statement:
I think it may be impossible to "recycle everything" without unlimited affordable energy. And because of this, many of the limits (in resources, and sinks) will still be reached. Brown's hyperbole therefore isn't really very constructive, in that all you have to do is add enough time to the equation and we're still going to be in trouble.
Brown writes of the immediate "throwaways" such as shopping bags, but really everything humans manufacture eventually becomes trash. You have only to visit a busy landfill to see this. Also, most recycling processes produce their own (often toxic) trash as well. Just consider "recycling" a car. What happens to the paint, plastics, exotic alloys, etc.?
I think instead we must move towards some kind of agreement on a collective and significant reduction of the total material throughput, while at the same time mandating that manufactured items always include in their purchase price the cost of eventual recycling.
I agree with the general thrust of your proposal, but faster action will occur if all toxic wastes are forcibly stored on the personal property of bankers, politicians, and executive tycoons. As posted before: if the topdog of a chemical company won't drink the final 'clear water' output of his factories recycled wastes, something is wrong. If a politician and his family won't drink the water plus swim in their pool filled with water from his legislative district's sewage disposal plant, something is wrong.
I think Brown realizes that resources are limited.
And I think as resource limits start to bite, we will naturally move to recycling everything. As this article about Edo period Japan describes.
Note that an important part of their ability to maintain a sustainable economy was a stable population.
Regarding The Peak Oil Crisis: More Disruptive Technology?, the article is a bit vague on the details of the processes. Here is the equally vague press release that started it: Joule Biotechnologies Introduces Revolutionary Process for Producing Renewable Transportation Fuels, July 27, 2009.
Here is some much needed criticism:
Joule Biotechnologies’ Mysterious Biofuel Promises, WSJ Blogs, July 27, 2009.
Joule Biotechnologies announces new biofuel jargon, scant details, Scientific American, July 27, 2009.
What exactly is the brackish water they use? It is neither fresh water nor sea water, and a lot of it would be needed to scale up production. Given the volume of water needed I do not see how large numbers of these bioreactors could be located in a desert as they claim.
Where do the nutrients come from to feed the organisms or plants?
Can the organisms or plants survive outside of the bioreactor and thereby cause environmental problems?
Does Joule's claim of producing "more than 20,000 gallons of renewable ethanol or hydrocarbons per acre annually," require concentrated carbon dioxide making the process dependent on flue stack emissions from burning fossil fuels? If so, the process may not survive carbon regulations and the depletion of fossil fuels.
Too often secrecy underpins a scam.