Drumbeat: May 20, 2010
Posted by Leanan on May 20, 2010 - 10:26am
It tolls for thee: Flexibility on highway funding would make all the difference
The building and repairing of roads in America is paid for by a federal petrol tax, which replenishes the highway trust fund. Current transport revenues are too puny to cover existing commitments, to say nothing of new initiatives. Only congressional infusions of money from general revenues have prevented the trust fund from going into the red (see chart). Because people are driving less, and cars are more efficient, the petrol tax is not the money-spinner it used to be. But uncertainty, fears about climate change and environmental disasters have not improved the appetite for a rise in the tax rate. It has stayed at 18.4 cents per gallon since 1993. Mr Obama ruled out a petrol-tax increase almost from the beginning of his presidency, saying it would threaten recovery. The administration recently opposed a carbon fee on fuels in a draft Senate climate bill for similar reasons.
China to keep Iran projects on track
BEIJING — China's biggest oil company is pressing ahead with oil-and-gas projects in Iran valued at billions of dollars, its top executive said, highlighting Beijing's strong economic ties to Tehran even as China has signed onto a U.S.-led sanctions effort against Iran.
FUJAIRAH, United Arab Emirates—An oil tanker named Front Page, chartered by Royal Dutch Shell PLC, left this port on March 17 and reported it was going to another U.A.E. port, then on to Saudi Arabia, ship-tracking data show.But the tracking information reveals that Front Page also made an unreported stop—to the coast of Iran. There it loaded Iranian oil, according to records obtained by oil traders and shipping sources.
The incident, some oil-industry experts say, is an example of how some companies these days are hiding their business dealings with Iran, even when they are perfectly legal because they aren't subject to any sanctions.
What is The Right Price of Oil?
The big question now is, what is the right price of Oil. Fadel Gheit, a Senior analyst at Oppenheimer had opined in March that any price of Oil above $60 is a result of speculation. Mukesh Ambani, of Reliance while addressing fellow refiners at Mumbai last week had asked them to be ready for oil prices between $80 to $100 during the year to come.The fair price of oil is highly debatable. It will however have to be both sustainable for the producers as well as cost effective for the buyers. The range of $65 to $70 looks the likely price that will balance the interest of both groups as it leaves a healthy profit margin of $15 to $20 billion for big producers like Saudi Arabia and drives gasoline prices to a comfort zone for energy guzzling nations like US and China.
Why gasoline prices haven’t fallen
The price of crude oil has fallen 19 per cent in the past two weeks but prices at the gas pump in Ontario have barely budged. Why?It depends who you ask.
Everyone agrees the two don’t always rise and fall in tandem, at least not in the short term.
But that’s where the agreement ends.
What's next for the oil spill?
The Gulf of Mexico oil spill is entering a new phase, one month after the explosion that touched off the disaster. It's finally sinking in among environmental experts, policymakers and the general public that this spill is unlike any other. The impact will be felt hundreds of miles away from the deep-sea leak, for years after it's been stopped.
U.S. judge delays Chevron subpoena for "Crude" film
NEW YORK (Reuters) - A U.S. filmmaker has 10 more days to decide whether to comply with a subpoena ordering that he give Chevron Corp raw footage of a documentary on the 17-year-old legal fight over oil pollution in the Amazon rainforest in Ecuador, a judge ruled on Thursday.
Why everyone will soon love "clean coal"
(Fortune) -- The one green technology that politicians of all parties seem able to rally around is "clean coal." Coal generates about half of America's electricity -- a quickly rising figure -- and a third of its carbon dioxide emissions. The chance of replacing it with solar or wind in anyone's lifetime is tiny -- and besides, solar and wind companies aren't exactly the same caliber of donor as the coal industry when it comes to Capitol Hill.So it's not surprising that a technology promising to remove the carbon dioxide from coal-burning emissions and store it deep underground has gained powerful backers, including President Obama and Secretary of Energy Steven Chu. There's only problem with it: So far it's just a theory that is being tested.
One of the consequences of Europe's financial mess that hasn't gotten a lot of attention is that shares of companies in the once red-hot solar sector have gotten absolutely pummeled.
How Would You Spend Your Daily 100 watts?
The vast majority of us send money to the local utility for electricity every month. What if we invested that same sum in our own power generation? It's called "owning the means of production" in a quasi-Marxist perspective, "self-sufficiency" in another context, and "Yankee ingenuity"--a concept which has almost been lost in our self-indulgent, entitlement culture which looks to sell-your-soul-to-the-Devil "financial innovations" as the "solution" to our problems.
Arizona threatens to cut off LA electricity supply
Arizona could cut off electricity supplies to Los Angeles in protest at an economic boycott over the state's controversial immigration law.Los Angeles receives about 25 per cent of its power from Arizona, meaning a quarter of America's second largest city could be plunged into darkness.
Politicians in the city voted last week to impose a boycott on Arizona which will affect about $8 million (£5.3 million) worth of contracts with the state. City officials will also stop travelling to Arizona.
In response an Arizona utility commissioner raised the prospect of the state's utility companies cutting Los Angeles off.
Stuart Staniford: Singularity > Climate Change > Peak Oil > Financial Crisis
While lying awake late at night worrying about what kind of world my children will inherit, I find it helpful to come up with schemas for the most obvious and inevitable of the large societal problems. It makes them seem slightly more manageable to place them in order of importance, or time. Further, being clear on what are the biggest and most important problems is an essential prerequisite to thinking about solutions: these problems all interact, and solutions to the smaller of them may not be radical enough to address the larger of them.In this post, I would like to argue for the above ordering of problems. I mean the '>' symbol in two senses: "A > B" meaning both "The main impact of A will fall later in time than the main impact of B", and also "A is a more serious and fundamental threat to humanity than B". While a full explication of the arguments would occupy a number of books, today you are going to have to make do with a single measly blog post, albeit longer than usual.
As Oil Spreads, BP Says it Underestimated Flow
(CBS/ AP) BP conceded Thursday that more oil than it estimated is gushing into the Gulf of Mexico as heavy crude washed into Louisiana's wetlands for the first time, feeding worries and uncertainty about the massive month-long spill.Mark Proegler, a spokesman for oil giant BP PLC, said a mile-long tube inserted into a leaking pipe over the weekend is now capturing 210,000 gallons a day - the total amount the company and the Coast Guard have estimated is gushing into the sea - but some is still escaping. He would not say how much.
Gulf oil spill: Obama's regulatory response falls short
Before April 20, most Americans had probably never heard of the Minerals Management Service, the federal agency that oversees oil and gas production in federal waters. Now, with oil from the Deepwater Horizon blowout closing wildlife refuges and fishing grounds in the Gulf of Mexico, the MMS is facing tough questions about its role in the disaster. Its cursory environmental review minimized the prospects of a large spill, and it failed to demand that BP have a realistic response plan in place before drilling.
Afghans choke over loss of nuts
HERAT - Mullah Samandar finds it hard to control his emotions as he swings his ax at the trunk of a pistachio tree."When I cut down pistachio trees, I cry and my tears don’t stop," the 55-year-old said, explaining that he had no other way to provide his family with fuel. "Times are hard and I do not have a job, a salary or any opportunity to find a job. We are even forced to eat plants we gather on the mountains."
Kjell Aleklett: Agriculture as provider of both food and fuel
A database of global agricultural primary production has been constructed and used to estimate its energy content. The portion of crops available for food and biofuel after postharvest losses was evaluated. The basic conditions for agriculture and plant growth were studied, to ensure sustainable scenarios. The net energy contents for the world and EU27 was found to be 7200-9300 and 430 TWh respectively, to be compared with food requirements of 7100 and 530 TWh. Clearly, very little, or nothing, remains for biofuel from agricultural primary crops. However, by using residues and bioorganic waste, it was found that biofuel production could theoretically replace one fourth of the global consumption of fossil fuels for transport. The expansion potential for global agriculture is limited by availability of land, water and energy. A future decrease in supply of fossil energy and ongoing land degradation will thus cause difficulties for increased biofuel production from agriculture.
Botswana fear food shortage during World Cup
The World Cup due to kick off in June in South Africa has brought excitement for many African countries but for Botswana it may prove to be difficult times.Many in Botswana are scared that as the whistle blows at the FIFA World Cup it will also mean shortage on many of the foodstuffs and electricity which the country imports from South Africa.
The food situation is of grave concern in part of the Sahel, notably in Niger
In 2009, agricultural production has been seriously affected in parts of the Sahel following late onset of rains, prolonged dry spells and significant pest infestations. The eastern and central parts of the Subregion were most affected with cereal outputs estimated to have declined by 30 percent in Niger, 17 percent in Burkina Faso and 11 percent in Chad, compared to 2008. Although favourable growing conditions boosted cereal output in most of the western part, irregular rains led to a 24 percent drop in cereal production in Mauritania.In addition to the decline in cereal production, pastures were seriously affected in the pastoral and agropastoral zones of Sahel. For instance, biomass production in pastoral areas of Niger in 2009 was estimated to be 62 percent below domestic requirements. This deficit is three times as severe as in the previous year.
John Michael Greer: Garlic, chainsaws, and Victory Gardens
Warren Johnson’s Muddling Toward Frugality has fallen into the limbo our cultural memory reserves for failed prophecies; neither he nor, to be fair to him, anybody else in the sustainability movement of the Seventies had any idea that the collective response of most industrial nations to the approach of the limits to growth would turn out to be a thirty-year vacation from sanity in which short-term political gimmicks and the wildly extravagant drawdown of irreplaceable resources would be widely mistaken for permanent solutions.That put paid to Johnson’s hope that simple, day by day adjustments to dwindling energy and resource supplies would cushion the transition from an economy of abundance to one of frugality. His strategy, though, still has some things going for it that no other available approach can match: It can still be applied this late in the game; if it’s done with enough enthusiasm or desperation, and with a clear sense of the nature of our predicament, it could still get a fair number of us through the mess ahead; and it certainly offers better odds than sitting on our hands and waiting for the ship to sink, which under one pretense or another is the other option open to us right now.
Utah Officials Seek to Block Onshore Drilling Changes
Utah officials launched a two-pronged attack Wednesday on the Interior Department's newly unveiled reforms for onshore oil and gas leasing.Sen. Bob Bennett introduced legislation in Congress that would block the increased red tape under the changes, which the Utah Republican warned would drive the nation's energy production "into a ditch."
Conoco German Refinery Shutdown to Last Weeks After Fire Damage
(Bloomberg) -- ConocoPhillips’s biggest European refinery will be closed for weeks of repairs and inspections after fire damage at the plant this month, two people familiar with the situation said.
Henry Groppe: Time to Go Long Natural Gas
Henry Groppe, a Texas petroleum analyst with a long track record of betting against the herd, believes natural gas will double by the end of summer 2010.He's arguing that shale wells are depleting rapidly, and that there is a real shortage of gas "which will become apparent this summer in dramatic fashion," according to The Globe and Mail. "Gas inventories are about to get a lot tighter... new supplies are overstated, and prices are headed north of $8 by the end of summer.”
Kuwait Airways incurs big loss in 2009: chairman
KUWAIT CITY — State-owned Kuwait Airways incurred a 55 million dinar (189 million dollar) loss last year due to stiff competition and high fuel prices, its chairman said in comments published on Thursday.Al-Qabas newspaper quoted Hamad al-Falah as saying that 65 million dollars were lost due to stiff competition in the local market and 20 million dollars due to higher fuel prices.
BP Rebuts Atlantis Allegations
BP rebutted allegations that its Atlantis platform in the Gulf of Mexico operated with incomplete and inaccurate engineering documents.Responding to claims that flawed or missing documentation posed a threat to safe operation of the platform, recently made in various news programs and print media, BP said it had thoroughly investigated these claims when they were first made by a former contract worker in 2009 and found them to be without substance.
News from the Gulf Spill: Exxon good, BP bad
One of the most stunning outcomes of the now month-long oil spill in the Gulf of Mexico is the utter reversal of corporate images it has generated. At once, Exxon -- for two decades tarred as the callous, greedy and dirty culprit in the Valdez oil spill in Alaska -- is regarded in expert circles as the squeaky clean, state-of-the-art, cutting-edge model of safe, environmentally friendly oil drilling. And BP -- which spent tens of millions of dollars under former CEO John Brown successfully branding itself as the green, publicly interested conscience of the industry -- is now the poster child of the devil-may-care, dollar-grubbing, environmentally and labor unfriendly oil company.
Rush to find crude on land since gulf oil spill
Occidental Petroleum Corp., the oil explorer that pumps enough crude to fill a supertanker every four days, is leading a rush to find crude on land as BP Plc's Gulf of Mexico disaster spurs tougher offshore-drilling rules.Occidental on Wednesday doubled its estimate for a discovery near Bakersfield to the equivalent of as much as 500 million barrels of oil, which would have a value of more than $34 billion at current prices. The Los Angeles company bucked the oil-industry migration to deep-sea drilling during the past decade and focused on onshore fields from California to Texas to Abu Dhabi.
Electric Car Projects Have the Most Buzz for Green Investors
Investors' bullishness over the electric car business is showing no signs of abating. On Wednesday, a startup electric carmaker CODA Automotive said it has bagged $58 million in venture capital for the launch of its first vehicle.
Americans Want Better Fuel Economy -- but Keep Buying SUVs
As the economy continues to improve, Americans are hitting dealer showrooms once again in search of new cars and trucks. With average gas prices hovering just shy of a lofty $3 a gallon, it would seem a safe bet that most new cars moving off dealer lots are fuel sippers. But recent data suggests that as the economy revs up, new-car buyers are less interested in fuel-efficient vehicles.
Monbiot: What's not to like about high-speed rail? The case simply hasn't been made
The 2007 report shows that even if everyone flying between London and Manchester switched to the train, the savings wouldn't compensate for the extra emissions a new line would cause. "There is no potential carbon benefit in building a new line on the London to Manchester route over the 60-year appraisal period." A switch from plane to train could even increase emissions. Unless the landing slots at present used by domestic flights are withdrawn by the government, they are likely to be used instead for international flights. The government has no plan for reducing total airport space.
Why Wal-Mart's sales should have everyone worried
So who are you supposed to believe? In this case, Bentonville. When Wal-Mart, an economic bellwether, notes that customers can't afford the gas to get to the stores and that they're increasingly using food stamps when they get there, things are bad.
Saudi mulls renewables targets in its pursuit of power
During a busy week for renewable energy in the MENA region, Saudi Arabia said it hoped to meet up to 10 per cent of its power demand from renewable sources by 2020, Abu Dhabi and Jordan made progress on solar projects, and Morocco was reportedly close to awarding a wind-power contract.Saudi Arabia was studying wind, geothermal and solar energy potential, Ahmad al Khowaiter, the director of new business evaluation for the state petroleum company Saudi Aramco told reporters on Tuesday in Manama, Bahrain.
"The proposed target is between 7 [and] 10 per cent of peak electricity generated by renewables by 2020, most likely solar. That represents roughly 5 gigawatts (gw) by 2020," he said. "Can we achieve that? It's feasible."
Under a business as usual scenario, the kingdom could supply as much as 6 million barrels per day of oil to its domestic market by 2030 - about the same volume as it currently exports - Mr al Khowaiter added.
That would imply a roughly three-fold increase in Saudi domestic oil consumption, in line with another Saudi official's projection that the kingdom's requirements for installed power capacity would nearly triple to 121gw by 2032 from 46gw.
KAUST boasts Saudi's largest solar installation
“This project demonstrates that the development of alternatives to traditional fossil fuel has taken on a new urgency, even in oil-rich countries like Saudi Arabia,” said Conergy Asia Pacific and Middle East head Marc Lohoff.“For the first time, clean power is flowing into the national grid. This is a historical event for us in Saudi Arabia,” said NSS MD Abdulhadi Al-Mureeh.
Recession calls for small-scale green schemes
(Reuters) - Recession and cheaper fossil fuels threaten green energy, but small players can develop a niche, even in capital-intensive wind, said British-based Novusmodus, one of the newest renewable funds.
Can a renewable revolution prevent an energy crisis
Some remain unconvinced renewables can prevent an energy crisis, but European work suggests a brave new alternative for tomorrow’s power.
When the Maiers built their “dream house” on 100 acres of land that had been in the family for 40 years, being in the heating and air conditioning business, the couple decided to make their house as ecologically friendly as they could.The result has been a plethora of stored energy on their property. All of it comes from nature. The Maiers have so much energy to spare, their only utility bill last month was $3.98.
“I was just as surprised as anyone when I got the bill in the mail,” Henry said. “I called the electric company to ask about it and the man on the other end actually said, ‘Yeah, that’s got to be a mistake’ and he looked up my account and said, ‘Nope, that’s right. It’s four dollars.’ Then he told me not only that but when my account caught up, I had a credit of hundreds of dollars.”
Russia says Iran reactor will start up in August
(Reuters) - A reactor being built by Russia at Iran's Bushehr nuclear power plant is scheduled to begin operating in August, the head of Russia's state nuclear corporation told journalists on Thursday.
Russia expects Iran to hand over uranium swap proposals: FM
Iran was expected to send uranium fuel exchange proposals to the International Atomic Energy Agency (IAEA) soon, Russian Foreign Minister Sergei Lavrov said Thursday."Italy and we want to see Iran clearly honor its commitments and send an official written appeal to the IAEA as soon as possible, so that a fuel exchange procedure may be agreed upon," Lavrov said at a press conference held in Rome.
Uranium's aglow with nuclear plants set to multiply
TOKYO (MarketWatch) -- Uranium prices have dropped about 70% from their highs in 2007, but with Asia's drive for nuclear power going strong, and expected only to strengthen further, there's plenty of opportunity for prices to return to higher ground.Uranium spot prices are at around $41 per pound, having registered a steep decline from a 2007 high of $136, according to industry sources.
Amir Mikhail: Wind Industry Engineering Leader
One notion that came from his research was the idea that greater geographic diversity of wind resources can help improve grid stability by increasing the size of electricity balancing areas. One problem with today's grid is its highly balkanized nature, Mikhail says. Enlarging balancing areas to encompass larger amounts of wind generating resources makes sense. "I am talking about hundreds of thousands of megawatts of wind capacity," he says. At present some 2 percent of U.S. electrical load is supplied by wind. The geographic diversity models Mikhail worked on 35 years ago become crucial as wind penetration levels reach 20 to 30 percent of total generating capacity. Mikhail's earlier models have been reconfirmed by the Department of Energy's 20 percent by 2020 study, which indicates wind can supply 20 percent of U.S. demand by 2020. Such levels are emerging in places like Texas and the upper Midwest.
AP INVESTIGATION: Oil self-regulates around globe
STOCKHOLM — The U.S. government is not alone in ceding responsibility to the oil industry for the design of key safety features on offshore rigs, a trend coming under scrutiny worldwide following the deadly blowout in the Gulf of Mexico.Across the globe, industry-driven regulation is the norm, not the exception — and critics are calling for a re-examination of a system that puts crucial safety decisions into the hands of corporations motivated by profit.
Arctic oil spill cleanup research cancelled
Federal government plans to perform a controlled oil spill in the High Arctic have been cancelled this year because the scientist spearheading the project is working on the massive spill in the Gulf of Mexico.The Department of Fisheries and Oceans planned to dump 1,200 litres of oil in Barrow Strait, Wellington Channel and Lancaster Sound in August to test spill dispersion methods.
Did Deepwater methane hydrates cause the BP Gulf explosion?
The vast deepwater methane hydrate deposits of the Gulf of Mexico are an open secret in big energy circles. They represent the most tantalizing new frontier of unconventional energy — a potential source of hydrocarbon fuel thought to be twice as large as all the petroleum deposits ever known.For the oil and gas industry, the substances are also known to be the primary hazard when drilling for deepwater oil.
Greenpeace gives BP a makeover
Greenpeace activists today rebranded BP, scaling the supermajor's London headquarters and unfurling a flag showing the company's logo smothered in oil, emblazoned with the words "British Polluters".
EPA informs BP to use less toxic chemicals to break up oil spill
The Environmental Protection Agency informed BP officials late Wednesday that the company has 24 hours to choose a less toxic form of chemical dispersants to break up its oil spill in the Gulf of Mexico, according to government sources familiar with the decision, and must apply the new form of dispersants within 72 hours of submitting the list of alternatives.The move is significant, because it suggests federal officials are now concerned that the unprecedented use of chemical dispersants could pose a significant threat to the Gulf of Mexico's marine life. BP has been using two forms of dispersants, Corexit 9500A and Corexit 9527A, and so far has applied 600,000 gallons on the surface and 55,000 underwater.
The trillionth tonne meme gets some traction
Essentially, the problem boils down to an estimate of how much anthropogenic carbon the atmosphere can absorb before the Earth warms more than 2 °C, a number that turns out to be close to a trillion tonnes. We've already emitted a little over half that much, so we have to figure out how to budget the remaining 500 gigatonnes.
Aspen Institute and national geographic announce the 2010 Aspen Environment Forum, July 25-28
The Aspen Institute and National Geographic announce that registration is open to the public for the 2010 Aspen Environment Forum. From July 25-28, 2010, on the Institute's signature campus in Aspen, Colo., more than 400 high-level speakers and committed voices from a wide range of perspectives - business, government, academia, and non-governmental organizations - will explore how to work together to develop bridges to long-term, equitable sustainability across a variety of interconnected issues, including energy, environmental conservation, and climate change adaptation/management. Notable speakers confirmed to date include EPA Administrator Lisa Jackson; National Geographic Explorer-in-Residence Sylvia Earle; Mohan Munasinghe, vice chair of the UN Intergovernmental Panel on Climate Change; Brookings Institution President Strobe Talbott; Former Austin, TX Mayor Will Wynn; author Jeff Goodell; Monterey Bay Aquarium Research Institute Senior Scientist James Barry; Smart Power President Brian Keane; Post Carbon Institute Founder Richard Heinberg; Heidi Cullen, director of science communications for Climate Central; Ocean Voyages Institute's Doug Woodring; and Moscow State Institute of International Relations Professor Vladimir Golitsyn, among many others.
Greek Crisis and Euro Fall Snare Clean-Energy Stocks
(Bloomberg) -- As Europe grapples with the fallout from Greece’s economic woes, at least one unexpected corner of the economy is suffering: renewable energy companies.That’s because few wind, solar, and other green power installations would be profitable without subsidies, and as governments across Europe curb spending in response to the Greek crisis, those funds are being cut back, Bloomberg BusinessWeek reports in its May 24 issue.
Crude Oil Futures Decline as Tumbling Euro Damps Hedging Appeal
(Bloomberg) -- Crude oil fell in New York as the euro tumbled against the dollar, undermining the attraction of commodities for hedging against inflation.Oil slipped in tandem with equities on concern that European governments are divided on how to contain financial turmoil in the wake of the sovereign debt crisis. Yesterday crude halted a six-day losing streak after stockpiles in the U.S. increased less than analysts forecast last week and supplies of distillate fuel unexpectedly declined.
“It’s currency speculation that’s driving the oil market right now,” said Robert Montefusco, a Sucden Financial broker in London. “With the euro in trouble, banks are selling any rallies in the currency and oil and metals are tracking that. At some stage, OPEC will step in to address oversupply.”
Crude Diverges Most From Dollar in Three Months
(Bloomberg) -- Oil prices are diverging from the dollar by the most in three months as investors dump commodities for the safety of the U.S. currency.
Gasoline Breaks Support, Heads to $1.8716: Technical Analysis
(Bloomberg) -- Gasoline futures are poised to reach $1.8716 a gallon by the end of May after falling below a key support level yesterday, according to technical analysis by Infinitytrading.com.
Petrobras May Delay Share Sale Should Crisis Deepen
(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-run oil producer, would consider delaying plans to sell as much as $25 billion of shares should global equity markets worsen, Chief Executive Officer Jose Sergio Gabrielli said.
Michael Ruppert on Peak Oil, Collapse and Other Bedtime Fun
Michael "Collapse" Ruppert is back with a new talk on peak oil, societal end-games, and the like. Worth watching, especially if you have latent eschatological leanings that you'd like to explore.
Peak oil crisis just ain’t sexy enough
Your grandmother passing away at a ripe old age from general ailments will never make the headlines. A person in their prime, stricken by a nasty disease or a fatal accident is always good, newsworthy material. This seems to be a simple formula, which rules in all fields and areas of information, knowledge and behaviour. The rule’s like this: the expected is known and therefore not worth knowing more about; the unexpected is exactly that and therefore worth finding more about because each case may be slightly different. Furthermore, this information may prove useful for your survival — if you learn about something to be avoided or be careful about.The question of why climate change is sexy and peak oil is not, is an interesting one. You may all have your own ideas, but today I’ll put down what I think the difference is. I believe the answer lies in the above observation about newsworthiness.
The Perfect Storm: Six Trends Converging on Collapse
There are dark clouds gathering on the horizon. They are the clouds of six hugely troubling global trends, climate change being just one of the six. Individually, each of these trends is a potential civilization buster. Collectively, they are converging to form the perfect storm--a storm of such magnitude that it will dwarf anything that mankind has ever seen. If we are unsuccessful in our attempts to calm this storm, without a doubt it will destroy life as we know it on Planet Earth!
Future of refinery raised by investors
YORK — For the last six months the Yorktown refinery has struggled to turn a profit. Now investors of the parent company Western Refining are wondering about the future of the refinery.
PetroChina to Buy Parent’s Overseas Assets to Expand
(Bloomberg) -- PetroChina Co., Asia’s biggest company by market value, plans to buy assets from its state- controlled parent to expand its overseas oil and gas reserves and supply the world’s fastest-growing major economy.
U.S., Mexico Seek Oil Moratorium Near Gulf Border
(Bloomberg) -- The U.S. and Mexico are seeking a moratorium on oil production near the Western Gap of the Gulf of Mexico, where the two nations share a maritime border.
Arctic Drilling Proposal Advanced Amid Concern
A proposal to drill for oil in the Arctic Ocean as early as this summer received initial permits from the Minerals Management Service office in Alaska at the same time federal auditors were questioning the office about its environmental review process.The approvals also came after many of the agency’s most experienced scientists had left, frustrated that their concerns over environmental threats from drilling had been ignored.
Gazprom Neft May Spin Off, Hold IPO for Oilfield Service Units
(Bloomberg) -- Gazprom Neft, the oil arm of Russia’s state-run gas company, may spin off its oilfield service units or sell stock in an initial public offering, following divestitures by two of the country’s largest crude producers.Gazprom Neft hired Deutsche Bank AG as an adviser while aiming to make a decision within a year, the oil unit of Moscow- based OAO Gazprom said today in an e-mailed statement.
ONGC Gains as Gas Price to Add $1 Billion in Revenue
(Bloomberg) -- Oil & Natural Gas Corp., India’s biggest explorer, rose the most in a year after Chairman R.S. Sharma said higher gas prices will add 50 billion rupees ($1 billion) in revenue and curb losses from its aging fields.
National Grid Plans $4.6 Billion Rights Offer; Shares Slide
(Bloomberg) -- National Grid Plc, the operator of the U.K.’s power and gas networks, plans to raise 3.2 billion pounds ($4.6 billion) through a rights issue to fund a five-year investment program while maintaining its credit ratings.
Louisiana shore sees heavy oil as BP prepares plug
VENICE, La (Reuters) – Heavy oil from the Gulf of Mexico spill threatened Louisiana marshlands on Thursday after washing ashore for the first time since a BP-operated rig exploded a month ago, sparking ecological disaster.Calling it a "day that we have all been fearing," Louisiana Governor Bobby Jindal said on Wednesday that heavy oil -- not simply tar balls or sheen -- had entered the state's prized wetlands.
"It's already here but we know more is coming," he said.
Atlantic states keep wary eye on spill
Communities as far north as North Carolina are preparing to deal with potential oil from the Gulf of Mexico spill as it drifts into an ocean current that could take it around Florida and up the Atlantic coast.
BP Moves Closer to ‘Top Kill’ of Leaking Oil Well
(Bloomberg) -- BP Plc took steps toward attempting to cap its leaking well in the Gulf of Mexico yesterday as it increased the amount of crude it is capturing and thick oil began to appear in Louisiana’s wetlands.
Senator wants oil revenue to aid states
WASHINGTON (UPI) -- U.S. Sen. Mary Landrieu, D-La., said she will submit legislation to get more oil revenue sent immediately to Gulf Coast states staggered by a huge oil spill.Landrieu said she wants nearly 40 percent of oil revenue the U.S. government collects from leases in the Gulf Coast region to be funneled immediately to the states affected by the hundreds of thousands of gallons of oil spewing daily into the Gulf of Mexico since an oil rig exploded April 20 and sank, CNN reported Thursday. Under existing rules, some of the money wouldn't reach the states until 2017.
Seven shocking ways to visualize the Gulf oil spill
You've probably been saturated by coverage of the BP Gulf Oil Spill. This overwhelming event has given us so many moving reports. The gushing, burning, and flowing of this spill and the people and animals it is affecting offer us some impactful visuals. We've gathered together the best photos, videos, graphics, and apps inspired by the Gulf Oil Spill here.
Hurricane season may make spill worse
As hurricane season looms, forecasters, scientists and residents along the Gulf Coast worry that a major storm could make the oil spill worse.The National Oceanic and Atmospheric Administration says a hurricane, or a succession of them, may bring oil up from the depths of the Gulf of Mexico and then push it ashore. Forecasters say a season with multiple storms could send oil farther inland and spread it as far as Cape Hatteras, N.C.
Scientists Fault U.S. Response in Assessing Gulf Oil Spill
Tensions between the Obama administration and the scientific community over the gulf oil spill are escalating, with prominent oceanographers accusing the government of failing to conduct an adequate scientific analysis of the damage and of allowing BP to obscure the spill’s true scope.
Lawmakers to urge BP to idle its Atlantis rig
NEW YORK (Reuters) – A group of lawmakers will recommend BP be ordered to idle its Atlantis oil and gas platform in the U.S. Gulf of Mexico until federal regulators can prove the region's second biggest rig is operating safely.More than 20 Democratic lawmakers signed a letter on Wednesday with language that urges the Minerals Management Service to shut down Atlantis, which pumps up to 200,000 barrels per day of crude, pending a safety probe. The letter, given to Reuters, will be delivered to Interior Secretary Ken Salazar early Thursday, congressional staff said.
Inventors say BP ignoring oil spill ideas
NEW ORLEANS - A suggestion box or publicity stunt? BP has received thousands of ideas from the public on how to stop the Gulf of Mexico oil spill, but some inventors are complaining that their efforts are getting ignored.
Thomas L. Friedman: Obama and the Oil Spill
No, the gulf oil spill is not Obama’s Katrina. It’s his 9/11 — and it is disappointing to see him making the same mistake George W. Bush made with his 9/11. Sept. 11, 2001, was one of those rare seismic events that create the possibility to energize the country to do something really important and lasting that is too hard to do in normal times.
For 15 years, Kevin Costner has been overseeing the construction of oil separation machines to prepare for the possibility of another disaster of the magnitude of the 1989 Exxon Valdez spill.Does this evoke his tagline from “Field of Dreams?” It seems that Mr. Costner, the 55-year-old actor, environmental activist and fisherman, was ready for the current spill in the gulf.
Mining Tax ‘Contagion’ Set to Spread From Australia
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A Battery That Stores Wind Juice
Mountaintop wind turbines produce most of their energy at night, when electricity demand and prices are low. That limits revenue and makes it hard for utility companies to meet state goals for high percentages of renewable energy.Batteries could solve the problem, but they have always been too expensive. Still, a small New Jersey company, Grid Storage Technologies of Newark, plans to install two batteries on the grid late this year that would store bulk amounts of energy.
NEC to Invest 100 Billion Yen in Energy, Batteries
(Bloomberg) -- NEC Corp. said investments in its energy business will reach $1.1 billion over the next eight years, as Japan’s biggest maker of personal computers aims to reinvent itself after a decade-long slide in sales.
One Moos and One Hums, but They Could Help Power Google
America’s dairy farmers could soon find themselves in the computer business, with the manure from their cows possibly powering the vast data centers of companies like Google and Microsoft. While not immediately intuitive, the idea plays on two trends: the building of computing centers in more rural locales, and dairy farmers’ efforts to deal with cattle waste by turning it into fuel.
The mob descended on Chris Wimmer's farm on a rainy Saturday bearing pitchforks and shovels. They went to work quickly, relocating a compost pile, digging weeds and hauling fencing.The Jefferson County Crop Mob, a group of mostly urban volunteers, spends one Saturday a month sweating for small-scale farmers such as Wimmer. In return, they learn about the food they consume and tips about organic and sustainable farming.
"It's like farming 101," says Derek Bryant, 38. He and Jamie Drake, 34, tackled the compost heap, shoveling the muck into new storage bins. He works for a commercial construction company and she's an interior designer, but their dream is to turn land that's been in his family for seven generations into a sustainable farm.
Organic Feed? Birds Say No Thanks
Birds may prefer conventionally grown seed over organic seed, according to a new study in the Journal of the Science of Food and Agriculture. Wild birds visiting more than 30 gardens across the north of England consciously chose to stick with conventional seed after eating both varieties, said Ailsa McKenzie, the study’s lead author and a research associate at the School of Biology at Newcastle University.So did captive birds, she said. But this preference apparently has nothing to do with taste. In analyzing the chemical, nutritional and physical properties of the two types of seed, Dr. McKenzie said, scientists found only one significant difference between them: protein level.
Report grades cruise lines on environmental impacts
The second annual report card grading cruise lines on their environmental impacts is out today from Friends of the Earth, and Disney Cruise Line gets props for "most improved." Though in general, the San Francisco-based environmental group says the results of its review of 11 major cruise lines and 113 ships "aren't pretty."
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The ice is melting so fast in Greenland that the giant island is rising noticeably as the weight is lifted. In some spots, the land is rising 1 inch per year.
U.S. Science Body Urges Action on Climate
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National Academy of Sciences urges strong action to cut greenhouse gases
The academy, calling it 'the most comprehensive report ever on climate change,' suggests taxing carbon emissions. The papers also raise the possibility that global warming might make it necessary to shift vulnerable populations away from coasts.
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Link up top: The Perfect Storm: Six Trends Converging on Collapse is an extremely good article. Six trends that will lead to collapse, all converging at the same time. They will lead us to the end of the world as we know it. But they missed one!
Before the end of the world as we know it
They missed the global financial collapse. That is what is crashing the stock market today and even causing the oil market to nose dive. The world has a debt crisis that will not go away. Eventually, as it becomes very obvious that the this enermous debt will never be repaid, the economy of the entire world must collapse.
But not to worry. After the collapse of the end of the world as we know it, something much better will replace it.
So all we have to worry about is what happens between total collapse of the world as we know it and the "something else" that will replace the old world as we knew it. Somehow I am not optimistic.
Ron P.
Even the most prolific writers of collapse seem to underestimate the ramifications of the "bottleneck".
IMO if we don't manage that phase at least to some degree then there won't be a bottle...just neck.
Well, if I were to see a silver lining in the collapse of our financial system it would be that going forward, it isn't likely that every Tom, Dick and Harriet is going to carry a little plastic card in their hip pocket that allows them to plunder the planet at will, with the promise of paying for it later.
But, maybe I'm just fooling myself ...
I had an odd thought----we know that sovereign countries holding debt denominated in their own currencies can't "default", they can always print their way out of debt. Done excessively, inflation is the result. The US may be forced to this route.
But what happens if a group of sovereign nations all own paper of other sovereigns? Is there a level of interconnectedness at which, even tho the debt is all denominated in the "home" nations currency, that instability results?
I am not sure what you are asking, Marku. I think the answer has to depend on how much paper is printed. And yes, it could create instability, especially if the nation doing the printing is a major player in the world markets.
Right now we seem to be entering a new phase of the finanical collapse, and it is showing up as a deflationary depression. When we hit the bottom of that part of the cycle, hyper inflation seems likely. Sort of a finanical yo-yo, you might say... and 'round the world' is an apt phrase is that analogy.
Consider: the U.S. is wildly in debt, with bills and notes outstanding to various investors, including other soverign nations. In a deflationary economy, as prices drop and wages drop, so do tax revenues from every source. Debt remains denominated in dollars, at a fixed amount. When the bottom of the deflation is reached (or perhaps in order to set a bottom) those printing presses will be going wild. Inflation will be insane. The holders of US debt will start out celebrating, as the dollar increases in value. Later on, not so much.
How about nickle coffee, ten cents a gallon for gasoline, and a new car for less than a grand? Not bad, if you are still making today's wages. But at $1 per hour, not so good. And, if it will be a scarey, wild ride down, the rush up will be explosive! And, our economy's BOP is about as good as BP's in the GOM.
Craig
How the global oil watchdog failed its mission (1/3)
Act I – An Inconvenient Reality
"12 years ago, the International Energy Agency (IEA) discovered that Peak Oil would threaten the prosperity and stability of our societies. Yes, they knew it. While some IEA officials tried to inform the world about this game-changing event, it appears that others had different priorities…"
http://petrole.blog.lemonde.fr/2010/05/18/how-the-global-oil-watchdog-fa...
Denninger is confused. He states in this article: The Roof Is On Fire that:
Bold caps his. He states that worldwide governments have simply borrowed money, not printed it. This is of course true. The last country, to my knowledge, to just print currency in order to finance the government was Germany in the 1920s. The US has NEVER done that! The US only prints currency, (greenbacks) on order from the central banks, usually to replace old currency that has worn out.
Something needs to be explained here! What needs to be explained is what is meant by the term "printing money". When Ron Paul, Peter Schiff or anyone else talks about "printing money", they are not talking about printing currency, they are talking about printing the debt. The U.S. can simply create bonds, notes or bills, out of thin air. They then sell these debt instruments for real money.
That is what is meant by "printing press money", and not the printing of greenbacks. I am shocked that Denninger does not realize this. But then this misconception is a common mistake made by people who hear the term "printing money" over and over again.
Ron P.
Denniger is probably a little confused, yes, for I think there is more than a roof on fire.
The Dow, after just two hours of trading, is down 266 points (2.55%) and sliding towards the 10,000 mark and below. It's another day on the roller-coaster. The markets aren't happy as mentioned above.
Yes, more than the roof is on fire. See the six other things listed above that are adding to the collapse pressure.
When I wrote that Germany was the last nation, to my knowledge, just to willy nilly print currency I completely forgot about Zimbabwe. They did it far more recently. When any government does that massive inflation is the result and it happens very quickly.
Money that is brought into existence with debt instruments takes much longer to cause massive inflation. If they are paid back then they do not cause any inflation at all but there is absolutely no hope that the world's debt will ever be paid back. Massive inflation will eventually be the result just as surely as if the money was simply printed as currency.
Ron P.
Alternately, we could all opt out of the cash economy and not have to worry about hyperinflation. Not saying it would be painless, but we always have choices.
I hear this over and over by some idealistic people. Actually it is impossibility except in a very primitive world. The hunter-gatherer societies obviously had no currency nor did the early agricultural societies. But eventually, if any kind of trade between different groups were to be successful some kind of currency had to be invented. Shells were tried by some ancient cultures and on the Island of Yap huge round Rai Stones as currency.
Currency was invented because barter trade was so cumbersome and often very impractical. Suppose you had an excessive amount of apples but no shoes. But the cobbler had all the apples he needed. Your apples would simply rot.
It is very easy for one to sit in his or her armchair and imagine a world where everyone simply swapped what he had an excess of for what he had a dearth of. But practically, in any very large population, it would be an impossible nightmare.
Right now almost no one could just "opt out" as you put it. Try paying your water bill with chickens, or buying clothes or shoes, with a basket of tomatoes. If you are dependent on modern medicine for your survival, try trading turnips for insulin, or whatever medicine you need. Just "opt out" and see how long it is before you start hurting real bad.
Ron P.
Hey Darwinian-
I was wanting to get a thinker's opinion on my novice way of representing debt and currency in terms my feeble mind could understand.
There are two ways to fund a business enterprise- debt and equity. If I make debt enterprise = debt government than check.... must pay debt holder vig on debt and set term and yield...check.
If I make equity enterprise= government currency than the more shares I issue of equity the more it dilutes enterprise owner and the "book value" of each is (Assets-Liabilities)/outstanding shares.
So the value of currency like the value of a stock share should somewhat relate to the Net Worth of the Entity. Assets- Liabilities.
It is pretty easy to see where the Earth's Assets and Liabilities lie.
Thanks
FF
Damn! I never thought of it like that. However... When you issue new shares of a corporation the "book value" of all other standing shares only decline if you do not invest the money you received for those shares in new assets. If the value of those new assets exactly equal the money received for the new shares issued then there is no dilution of the book value of each share.
However suppose the money received from that new issue is used to pay bonuses for management, or to pay for early retirement for employees, or used for absolutely anything that does not add to the tangible assets of the company, then they merely dilute the value of all other shares outstanding.
So... if you use the money received from a bond issue to build roads, or dams for electrification, or for anything that adds to the value of the country, then the value of existing currency would not be diluted... theoretically anyway. But if a bond issue is used to bail out banks, pay for early retirement of the citizens, build armies, build bombs just to be blown up, or planes or ships or pay people who produce absolutely nothing, then the value of every outstanding dollar is diluted by the amount of every new dollar created.
I would say we are now doing far more diluting than building.
Ron P.
Yes I can agree with what you say.
Thanks
FF
Dollars as "shares" is a very good way of looking at it.
Now you've got it. It could be misunderstood when people say we are printing money that we are simply putting ink to paper, but what they really mean is we are issuing debt for no other reason than to create liquidity for the aversion of disaster. In essence, this is printing money because the issued debt does not go to anything of material value.
In other words, I got a new credit card so I could pay my existing credit card debt.
Sometimes I think those purchasing this recent U.S. debt in treasury and bonds is choosing between the rock and the hard place. They are choosing the hard place because they know what the rock is and the hard place may be just slightly uncomfortable sandstone.
It has always been hard for me to grasp the debt/money thing. Say I borrow $100,000 to buy a house. The bank creates this money which is a debt that theoretically must be paid off. While it is in circulation, it creates a temporary rise in the money supply. When it is paid off, the bank 'retires' the debt and the money disappears. It seems there are two ways for this debt to stay in the economy. One is if the debt is defaulted on because then the debt is never 'retired' and the money stays in circulation. The other way is for the Fed to 'monetize' the debt which does more or less the same thing by creating money sort of as a debt that will never be paid off.
The US has been on a decades long binge creating debt and keeping sort of an artificial inflation going with this debt money. Now the massive debt is unwinding and dollars are disappearing at a horrendous rate, hence the deflationary situation we are in now. I can see, at some point, hitting bottom and beginning an inflationary spiral based on the Fed frantically monetizing everything in sight. But who knows if/when this might happen?
This make any sense?
All right, I'll try again -- sans the profanity.
I'm no armchair idealist. I merely find it useful to remind myself that "the system" is largely a human construct and that alternate "systems" are possible. And worrying about paying your water bill with chickens is silly because if things get as bad as you seem to think they will -- and you'll get no argument from me -- you won't be getting a water bill.
True there are alternate systems but all of them use some form of currency other than barter. Barter only works on a local level and not for things or services by large organizations or that serve a large number of people.
Of course this is true. When everything has collapsed then no currency will have any value. Most of us will die then. But that was not your point. Your contention was that: "Alternately, we could all opt out of the cash economy". No we could not! We could not buy our medicine, pay our bills or do anything else that requires currency. Opting out of the currency driven world is not a option. When we can no longer use currency it will not be an option, it will be the end of the world as we know it and as I said above, most of us will die.
Ron P.
I stand by what I said. The system is collapsing. If you, or anyone else hopes to have a chance of surviving the bottleneck, you'd better get your fanny to work on an alternate economy.
Getting off your fanny and getting to work will definitely increase your chance of being among the survivors, but not if you spend your time and energy trying to change the economy to some different system. That will be a total waste of your time and energy.
You could find yourself a place in the hills, or some other isolated place, get some like minded people to build near you, for protection. Learn how to farm, blacksmith and the other trades that will help your community to survive.
But you will need money, a lot of money. You will need to buy your place, have a well dug, build yourself a house and barn, etc. etc. And then when the economy collapses, when your remaining money becomes worthless, you will have a chance, not a guarantee by any means, but a chance of being among the survivors.
And... if you are lucky enough to be among the survivors, and if you wish to trade with neighboring communities, you will need to invent some form of currency, like gold, silver, or something that has utility like iron. Or jewelry might work.
Ron P.
something that has utility like iron
What about irony? Does that have utility? Its got Iron right in the word.
I, also, doubt that we will get completely away from any kind of currency, but certainly, in earlier times in many places much of what we do today with money was done then with barter in some form. My great grand father was a rural physician. We have his accounts book, and pay is often in chickens, pigs, service...
Priest -
I'm sure the PPT will pull out a last minute rescue - say somewhere around 3:30pm EDT...
I predict the market will be up something like 37.10 at the close. Just watch it start to claw its way back as it always does. Except when they have "computer" problems and it drops 1000.
As if the market sham means anything to anyone besides the insiders anymore...
Catskill
Hey Catskill,
Your friendly Canuck priest here. How are things down under?
As of 21.20 Greenwich Mean Time or 16.20 (4:20 p.m.) EST, the Dow is behind by 376 points or -3.6%, only 68 points above the 10,000 threshold.
I think the central banks, including the Federal Reserve and US Treasury, are reaching limits on their capacity to reverse slides.
Avalanches are difficult beasts to contain. Best to stand well out of the way.
Should be interesting to see what happens tomorrow.
Cheers!
It's ugly. I wouldn't be surprised if there's a bounce back tomorrow, but all in all...I'm glad I'm out of the market.
Yeah, this may turn around. Trading volume is way up in the closing minute, which means a bunch of people are buying as well as selling. Day to day fluctuations in stock seem just bewildering to me, just like short term fluctuations in oil prices. I'm pretty much out of the market, too.
"It's ugly"
Not to me.
Only sign post that might catch the attention of those I most care about, who all remain clenched in denial's grip.
hey there friendly neighbor to the north...
you're kind of splitting hairs now - my prediction only missed by a decimal point and I had the wrong sign :)
I would say that falls solidly within the average accuracy range for economic predictions these days...
I rather enjoy days like this - listening to CNBC cheerleaders desperately trying to pump some life into an economy that has already endured hours of CPR...
A slightly flustered astrologer couldn't have said it any better my friend. Mind you, astrology and market watchers are kindred spirits these days - both base their prognostications on observable phenomenon then present findings derived from conjecture and speculation.
Btw, how are the Friday markets doing in your neck of the wood? Or is it still too early in the day to get a read on the Asia and Oceanic markets? Maybe a bellwether of things to come in Europe and America (although not always a foolproof and accurate predictor).
Commodity currencies like the Aussie dollar and the Canadian loonie are experiencing downward slides against the US greenback along with gold. A lot of volatility out there.
Keep us posted.
Cheers!
"A slightly flustered astrologer couldn't have said it any better my friend."
Funny, John Kenneth Galbraith once famously quipped "The reason economists make predictions is to make astrology look respectable."
'Quantitative easing' (http://en.wikipedia.org/wiki/Quantitative_easing ) is a form of 'printing money', in the sense that the central bank buys up existing financial assets, such as bonds, by creating new (electronic) money ex nihilo.
This form of 'printing money' has been carried out by the Bank of Japan in recent decades, and more recently by the Bank of England.
Apparently, some of the interventions carried out during the financial crisis by the Federal Reserve and the European Central Bank may also amount to quantitative easing.
It is true that the Federal Reserve Bank has been creating a lot of money by buying assets by just writing checks. However, the private financial system has been busy destroying money by writing down assets. Its not clear what the balance is, but with 20% of the working age population unemployed or under employed, any extra money is not creating inflation. When, and if, the economy improves, the Fed can sell assets and sop up the extra money. As a side issue, the Fed is making money (profits) hand over fist and passing it to the treasury. The result is that the projected deficit has shrunk about $200B over the last year. This is not good, but the Gov't has its hands tied by the tight money crowd.
Yes. There's no official M3 any more, but ShadowStats' M3 shows the money supply actually shrinking.
Thanks Leanan. I'll chase that link down so I can follow M3 in the future.
Correction to my comment. Only about $50B of the reduction in the deficit is from Federal Reserve profits. The remaining $150B is from faster than expected bailout repayments.
Does anybody have a firm grasp about what M3 is and how/why it expands/contracts and what if any effect it has on inflation/deflation? I sure don't.
Hi Darwinian,
There is a rat in this woodpile of monetary theory someplace;I can't quite put my foot on it, but the theory of money has never QUITE made real sense to me;there is always something circular in the arguments, it seems to me.
Just WHERE do the folks who buy these bonds or debt interests get the enormous sums of "real money" they use to buy the bonds?Just WHERE does this "real money"originate, step by step?
Just WHOSE money is it, anyway?
Now if I were a god, and could mount a little demon on the shoulder of every human being with a good hot cattle prod, I do believe I could MAKE all the economic activity that takes place, TAKE PLACE.No money needed.
Make the circle close,somebody, with no loose ends hanging out.
I have read all the standard explainations of fractional reserve banking and so forth, but I still smell the rat;my conclusion is that the circle does not, cannot, close, and that it is impossible for a banking system or a currency to be stable over a long period of time.
So for instance the Saudi royal family owns let us say (a random guess) fifty billion of US treasuries.
Surely the members of the family who have been educated at Harvard and Oxford in history or science or engineering must realize that the bonds are , in the long run, worthless or nearly so.(I will allow the new minted economists a pass.)
So they must have figured out that they have ownership of something that has worked very well for them for a few decades, but that in the end, the ownership will have been temporary as a practical matter.
Somehow I doubt if any financial instrument of any sort has a useful life of more than fifty to a hundred years.Changing circumstances by then will have rendered it obsolete or non existent or reduced it to a small fraction of its original value.
The almighty dollar that everybody trusts as the last safe bastion in the world bought a soft drink for a nickel when I was a kid.
Think about it, folks.
I believe the Chinese are getting rid of as many dollars as they can, consistent with not crashing the market for dollars, for the very reason you point out-the debts can NEVER be repaid.
Sometime fairly soon,this year or next or maybe ten years down the road, the people holding the debt are going to make a mad dash for any sort of concrete goods;iron ore, coal , oil in the ground, farm land, scrap metals, even ordinary real estate, perhaps.
I suppose I have moved into the doomer camp.
Whatever gave you the idea that "enormous sums" were required to buy bonds. You can buy a $25 savings bond. Don't know what they are going for today but when I was in service they were about $18 dollars, maturing in 10 years if I remember correctly. They still sell $25 dollar bonds.
The term "real money" is just a figure of speech. I use it to indicate currency that you can spend to buy real products with, like hamburger or gasoline. As to a step by step discription of where it comes from. I suggest you go here: ChrisMartenson.com and click on "Click here to watch the Crash Course". All your questions as to where money originates will be answered.
And I don't believe a word of that. Think about it. What would you use INSTEAD of money? Eggs? Pigs? Turnips? You would need a medium of exchange accepted by anyone and everyone. No barter commodity except perhaps gold or silver fits that bill. And in that case the gold or silver would be the money!
No, no, no, they are not worthless UNLESS the economy collapses. And in that case everything is crap, nothing matters. Of course those bonds could, in the event of runaway inflation, could be worth a lot less. But that is a chance they are willing to take. All oil exporters combined hold 229.5 billion in us debt instruments.
China held, in March, 895.2 billion, up from 877.5 billion in February. In March of 2009 China held 767.9 billion in US debe instruments so they are increasing their holdings, not decreasing them.
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
The largst holders of US debt instruments are the Fed and other US institutions such as banks and mutual funds and the public. Combined they hold about 2.5 trillion.
Ron P.
Well , lets see;the enormous sums must be coming from somewhere because the bonds are sold in erormous quantities.I will guess that twenty five dollar bonds are an exceedingly small fraction of the total, this is big biz, not your grandmother stashing dollar bills.
You yourself occasionally chide people about using langauge PRECISELY, but I will cut you some slack just this once.;)
Nevertheless:
Who , who ,who has enough actual currency or cash , which as I undertsand this matter, does not exist in the requisite quantities, to buy billions of dollars worth of bods , day after day, which are never redeemed, but only rolled over?
The holders of the bonds are either smart enough to knw that eventually default is inevitable, or they are idiots.Hence I postulate that they know they must either lose the money, or find someway of getting rid of the bonds, over the long term.They need a sucker with enough dough to unload before the crisis hits.
Where and who is the sucker?The circle will not close, the checks will eventually fail to clear, somebody is going to be left holding the bag.I believe the bankers and economists-the ones of them with brains-believe the same thing.
You are mistaken-a rarity indeed !-when you say that nothing has value if the economy collapses;MONEY may lose its value, 100 percent totally, unless it is in the form of precious metals, but tangible resources such as iron ore,coal, timber, farm land,clean water, apple trees,houses suitably located, and cows will be very valuable indeed, and whoever can hold onto them will be the new masters of the universe. I intend to hold onto my little farm with all the help I can muster and all the firepower I can put my hands on.
Now as to not believing a god running an army of demons, one on every shoulder in the world, equipped with a cattle prod, would be able to make each and every person do exactly what he does now;You are simply dodging the question, which is completely out of character for you.
Furthermore you have apparently never been in contact with the business end of a cattle prod.Perhaps if we substitute Larry Nivens (of sci fi fame) juice box, and make everybody a pleasure addict , and control thier behavior this way, the analogy might be better.
The point is that people do things, but that money is not strictly necessary to the doing of them.A cattle prod applied to a reluctant cows butt, or a man's, will ensure a very fast reaction.I will run from a cattle prod until I collapse, but I will not do that for any amount of money.
If money has absolutely no INTRINSIC value, the bonds are worthless in and of themselves, but still have value so long as somebody will accept them for real physical goods.
But if they can never be redeemed, then the economy does not have to necessarily collapse;only the issuer of any particular bond needs to turn turtle to destroy the value of that bond.You seem to be saying yourself that the debts represented by the bonds can never be redeemed, hence it APPEARS TO ME that the bonds will eventually become worthless; a loss of confidence is possible,and simple probability theory informs us that the possible will become reality sooner or later.
Put another way, govts and societies and civilizations fall;I am simply saying that existing debts will be by some means or another extinguished every fifty to one hundred years;I don't think our current banking system has a life expectancy any longer than that, and I think that the map of the world will look very different in fifty to a hundred years than it does today.
Confederate States of America bonds are collectible, but not redeemable.
Now as to China increasing her holdings of bonds-this is a paradoxical situation indeed .As I see it, they have no choice in the matter, given the status quo;they don't want an immediate collapse, and fear to stop buying the bonds as for this reason.As long as the current situation holds, thier relative power is increasing.When tshtf,the bonds they are holding will be worthless;but they will have improved thier position nevertheless.
And they will be even better off to the extent they get rid of incoming bonds in exchange for physical goods.Think of it this way-I might be in a position where I have to keep allowing a customer to owe me a little more every month on a long term debt, but I might still be turning a profit on his business every month, if he is paying close to his actual due bill for the current month.If I sell you merchandise that costs me a thousand for eleven hundred and you pay a thousand fifty and I add fifty to your tab, I'm still ahead for the month.No matter what.If I eventually manage to collect the fifty, so much the better, if not, no big deal.
My situation will be improved even more if I can find a sucker who will trade me hard goods for your questionable ious.The world is apparently overflowing with such suckers, but to be honest, most of them probably are in real need of the money.Too bad for them they are going to get stiffed before too long.
And if you are the US, and I am China, it may be that when the shtf, but war has not broken out, I can come in and buy up some of your collective physical assets for next to nothing , paying with these same bonds, if I can find sellers dumb enough to take them.
But I am not trying to PROVE ANYTHING;I am trying to get a good grip on that slippery rat in the woodpile, the flaw in the theory.
I know the world monetary system is not sustainable,but I don't know PRECISELY WHY.The explainations I hear seem to be missing a crucial key fact or two.I'm like a cop listening to a lot of people saying things that sound reasonable, but somebody is lying to me, and I know it.
What I'm looking for I cannot describe coherently until after I have found it.
Mac, just got up and read your post, after breakfast. You posted a little late but I will try to answer what I can though you appear to ramble a little.
I take strong exception to that accusation. I NEVER dodge a question. You simply stated, to the effect, that if you were God you could figure out a way to do away with money. I assumed you meant you could make society run without money. I had no idea you meant you could make everyone act as if they were slaves. Yes, of course slaves will work without money.
Would you work for the phone company if they did not pay you? Or if they paid you in pigs or chickens, stuff that they got in payment? That is just dumb Mac. A system could not operate without some means of currency to pay debts. What would you use to build a house? What would you use if you did not have enough chickens or eggs to trade? How would you borrow? What would you borrow?
But your little demon could make slaves of everyone. Well yes, of course slaves work for nothing. But if you did not mean slaves then you must explain what you would pay people with. Only slaves work for nothing and even then you must feed, house and cloth them. But a normal society must have sommon common currency that everyone will accept for payment of debt, goods and services!
Edit: After being accused of dodging the question I keep reading your post over and over and have picked out the most absurd sentence of all. You could make all activity that takes place now, TAKE PLACE, No money needed! That is totally absurd! You could not! Banks lending money for buying cars or building homes is economic activity. That is economic activity that takes place. What would they lend? Would they lend eggs or turnips? What would they demand in repayment? Your little demon economy is absolutely impossible, short of everyone being slaves.
As far as those "enormous sums" go, I was simply explaining that such sums are not necessarily enormous. The largest holders of US debt did not buy them with enormous sums. But it should be obvious where the Fed, the single largest holder of US debt, gets those enormous sums. Next comes banks, their enormous sums comes from their depositors. Next comes mutual funds, their enormous sums comes from their small investors. And next comes nations like Japan and China. Their enormous sums come from their huge export balance. Then comes the oil exporters. Their enormous sums come from their sale of oil. Does that answer your question? I think it should be obvious if you just think about it for a minute.
The system does not collapse "right now" because those who hold the debt still have FAITH! They still believe the debt will be paid. The system will not collapse until it becomes obvious that the debt will not be repaid.
Ron P.
I NEVER dodge a question.
Ok - what is the name of the economic system the US of A actually is under?
Bonus question:
What is the name of the economic system various governmental agencies claim the US of A operates under?
Hi Darwinian,
I 'm not actually out to jerk your chian, or to make a fool of myself either.;)
What I'm trying to say is that we accept the necessity of the existenece of money, but we so far as I can find out, nobody has actually PROVEN the necessity.Three might be other ways of organizing a society, or an economy, and having an omnipotent god with demons with cattle prods keeping everything moving is simply a fast cheap way of postulating an example.
Of course I know the basic theory of fractional reserve banking, and who the big players are, and if asked who they are,my list would have been essentially the same as yours.
The question I am really trying to ask, now that I am myself awake,is whether the economists and bankers themselves actually have any theory or proof that a monetary system can be long lived and stable.They certainly seem to be maintaining publicly that they do have such proof.
Personally I conclude that the banking system MUST INEVITABLY collapse eventually as the basic conditions that made it possible for it to come into being cease to exist and new conditions arise.
Can any banker or economist make a good case for the opposition?THIS is my question.
Then I have no idea what other proof you would require. It would be impossible to have any kind of debt based economy without money. What would bankers lend for home buying? What would they lend to people who wish to start a small business? If there were no such thing as money the economy would obviouslycollapse. All you have to do is think about it for one minute. There could be no commerce whatsoever if there were no generally accepted medium of exchange.
To me that is proof! If not you then I am at a loss for words as to what you would regard as proof.
I have no idea what you are driving at. I don't really think that question has ever come up. There is not a monetary system, there is only the monetary system. The monetary system is independent of any type of government. Communism has the same monetary system as capitalism. That is they have a denominated currency which they require everyone in their country, kingdom or empire to accept. That is all a monetary system is, a common currency that everyone in the country, or whatever, is required to accept.
The monetary system has nothing to do with the stability of the system. It is just a common currency, nothing more. There are only tow types of systems as far as money is concerned. There is the system that uses money and there is the barter system. That is the only two. If there is a failure it will be the failure of capitalism, or the debt based system, or the failure of communism, or of the dictatorship or whatever. If there is a failure it will not be the monetary system that causes the failure. The only alternative, the barter system, could cause a failure because there would be no common medium of exchange.
Money is money and nothing more. The system may fail because of the way people use money but not because they use money instead of the barter system.
You seem to have a problem with the debt based system. But you are calling it a monetary system and that is too broad a term. A system that outlawed debt could still be a monetary system.
So your question may be "is our debt based system doomed to failure?" It may be but not because of the reasons you seem to believe. There is nothing that I know of build into the our debt based system that says it MUST fail. At least I cannot think of one. Perhaps you can.
Ron P.
Dang! It's getting kinda crowded in here, used to be you could at least stretch out with bumping into somebody ;^)
perhaps we could ask for a partial refund and an upgrade; we were here first!
There is a rat in this woodpile of monetary theory someplace
The rat is the 'economic system you are claimed to be operating under as defined in basic Economic Textbooks' is not the economic system you are operating under.
I've asked - 'what is the name of the system we are under' and rarely do I get a straight answer from "the explainers". I'm guessing Darwininan will not come up with an answer either.
The people who think the system is flawed - now they have names/definitions.
As for the rat - perhaps this was the rat you are looking for?
http://news.yahoo.com/s/ap/20100521/ap_on_re_us/us_obama_rodent
This 2003 article is what started me reading about this stuff: http://www.freerepublic.com/focus/news/1053684/posts
Hi Ron:
People need to learn more about the Federal Reserve. It is not just the government that 'prints' money, it is more the Fed.
This is not a Federal agency; it is a private corporaiton, owned by the banks, and run by the banks, for the banks.
Here is an excellent look at the Fed:
http://www.lust-for-life.org/Lust-For-Life/InterviewWithGEdwardGriffin/I...
Enjoy!
Craig
And that is concept that the American people don't quite seem to be able to grasp.
The Federal Reserve.
They're not federal, and they have no reserves.
The treasury can not force the Fed to buy securities, however the Fed selects a target interest rate so as to meet certain goals.
When the government issues more debt, the negative effects on the economy ( as the money is spent ), it tends to create the NEED for a target that requires quantitative easing to attain. The central bank buys the securities, not because the treasury forces it to, but because it's own goals require a target that is generally met by the bank buying treasuries with money created ex nihilo.
That is, given the reasoning behind how the Fed funds rate is selected, issuing securities IS printing money, albeit indirectly. Only if the economy grows sufficiently to make the debt unimportant relative to GDP can it be sustained.
If the money obtained from the sale of securities is spent wisely then it contributes to sufficient growth that the debt can be repayed without crushing taxes. If not, then quantitative easing is necessary to make up the difference.
If the money were just printed and spent without issuing debt, then there is inflation unless the supply of goods that money chases increases enough to offset it ( maybe because the money was spent wisely by the government )
This is what happens if the government spends more than it takes in as taxes whether debt is issued or not. The alternative to these options is for the government not to run a deficit.
So now Greenland, underneath all that ice, is rising an inch a year and could start rising faster.
My question has been: If some areas under the ice started out rather flat but are now rising even slightly, wouldn't this change in slope mean that you now have the ice sliding down hill, further accelerating the ice loss? That is, is this a kind of positive feedback for ice loss?
Greenland is a big place. roughly 1000 miles across.
Water flows down hill, but increasing the incline by one inch in 500 miles is err...
Indeed, but it is rising an inch every year, soon to be two inches. The average slope of the Mississippi river is only a few inches per mile.
The difference between a marble on a flat table and a marble on even a slightly tilted table is pretty major for the marble.
The difference between a marble on a flat table and a marble on even a slightly tilted table is pretty major for the marble
Naw, the marble is fine (as defined by its existence as a marble). Now the sudden stop that makes the marble glass shards is what will make a major difference for the marble.
The sudden stop is what will be the issue for people.
A few inches per mile would take a few thousands years at one inch a year.
Parts of the UK are still rising after the last ice age. In places the coast has risen several metres since waterside features like castles were built in the middle ages.
Crustal rebound.
This happens very, very slowly.
Another geographic area rebounding from the retreat of the ice sheets is the Great Lakes region of the U.S. and Canada. The Great Lakes are only about 12,000 years old; very young geologically speaking. They are draining faster and faster as the ground rises. If there is no return of the ice sheets, in a few thousand years they will be a whole lot smaller than they are now.
Same holds true for Hudson Bay.
http://www.unavco.org/research_science/science_highlights/glacial_reboun...
Incidentally, owing to glacial rebound, Canada is rising while the United States is sinking.
You are rigth. Thsi is why some region of the world will experience a decrease of sea height instead on an increase. However, in the present discussion scientist and observe an increase in the speed of the glacial rebound, which has a different interpretation as a simple glacial rebound. Geophysicists are not THAT stupid.
Hudson Bay has risen over 300 metres (1000 feet) since the end of the last ice age, and still has about 150 metres (500 feet) to go before it reaches isostatic equilibrium. It's currently rising at about 1 metre (3 feet) per century. Eventually it will disappear, or at least turn into a much smaller freshwater lake.
Northern Scotland is rising at about 0.6 metres (2 feet) per century, while southern England is sinking at about 0.3 metres (1 foot) per century. The whole island is tilting and dumping the English into the sea.
My Scots/Irish cousins will throw a big party when they are finally floating away.
Yes, that's the point. Crustal rebound usually happens very slowly, usually less than a centimeter per year.
http://en.wikipedia.org/wiki/Post-glacial_rebound
But this is happening an inch per year, soon to be two--many times the average.
Water on even a slight slope behave very differently, of course, than water on a flat area.
I'm not saying that I know that this rise represents part of any significant feedback--just asking if it could--and I see no arguments yet that convince me it could not.
Much of Scandinavia in Europe is also rebounding. Maximum rate currently is about 11 mm/year. Lake Mälaren, near Stockholm, was a bay of the Baltic Sea until about 1200 CE when rebound began to cut it off, transforming it into a fresh-water lake. The Gulf of Bothnia, between Sweden and Finland, is also predicted to eventually be cut off from the Baltic.
I'd think more likely the reverse. The greatest melting is at low altitudes, close to sea level, which is around the edges, and this would tend to make the isostatic rebound greater around the coast. That in turn would reduce the slope.
But ice flow is much more complex than just flowing downhill. The rate of flow depends on the slope of the surface of the ice, and on the temperature distribution within the ice sheet.
I haven't been able to find quickly any figures on pre-industrial coastal emergence in Greenland, but other areas which were formerly glaciated are still rising 10,000 years after the ice melted.
The rate of rebound of one inch per year sounds far too large for the short term result of (so far) minor melting. One published paper (http://pubs.aina.ucalgary.ca/arctic/Arctic31-4-415.pdf) shows a maximum of about 20m rebound in 1000 years (an average of 0.4 inches per year) after almost total loss of an ice sheet. The evidence for the reported value is not discussed in the quoted article, nor in any of the links in that article.
Thanks for these point, lrd. On reflection, I think if it has any positive feedback effect, it will be quite local since the rising is happening near the coast. The net result for the larger sheet will probably be a negative feedback, but only a slight one over those vast distances.
And, as you say, there are many other elements in this dynamic process.
The rates struck me, too, as much higher than other reported rebound rates. That's what got me thinking about some kind of feedback mechanism.
Could something else be going on here?
I found thje quoted rate pretty astonishing. However rebound ought to occur through more than one mode. Consider the problem of adding(subtracting) a unit mass to point on the crust. What is the response of the surface height as a function of time and distance? In the shortest time scale (comparable to the sound travel time though the relevant material) you would get an elastic response (like pushing on a spring). You also get slow response due to the plastic flow of the upper mantle. The later is what we have commonly thought of as post glacial rebound, and it has a time response of roughly ten thousand years. The former elastic response should happen in less than a minute. So I suspect we are seeing the near instantaneous elastic response. The slower elastic response will take thousands of years. It would be nice to see a graph of these things.
An analogy would be to drop a coin onto a waterbed, which is filled with molasses rather than water. You will get a small indentation in the cover. It depresses just enough that the elastic stresses in the plastic covering balance out the weight of the coin. You have also transmitted some stress to the molasses, which will induce a nearly imperceptable flow of molasses away from the coin. But you might have to wait hours or days before you see the effect of molasses flow.
Thanks for the distinction.
The rate of rebound sounds too large to me as well. We have abundant data on isostatic rebound of the crust in North America and Scandanavia after the end of the last glaciation. Now it could be that the rebound rate is much faster initially, but mantle geodynamics is not my field.
I suspect that the something was misreported, as often happens in these cases. I'll wait to see the results in journal or something like EOS from the American Geophysical Union (AGU).
http://www.google.com/search?hl=en&q=dow+jones&aq=0&oq=dow+&aqi=g10
Have you guys seen the Dow is down today by another 233 today?! I thought it had finally flattened out and was headed back up, but sure glad I didn't bet on it by investing. That stock market unraveling is cause for concern. Remember last time it did this all hell broke loose in 08.
I get the impression simply borrowing more money to solve problems like the debt situation with southern EU club med countries, isn't satisfying investors any longer. They are starting to need sound fiscal policies - wow! To what do we owe this honor?!
Down 376 points at end of day. Crashing down to 6,000 within weeks.
What is going to stop it at 6,000?
Craig
I am surprised, actually, that it took this long before it started heading back down. The bull market that has been in effect for well over a year was based upon the assumption that spending and lending trillions of dollars would surely yield an economic recovery. The market zoomed back up by pricing in the anticipated future recovery. Well, the future is here, and it does not appear that the so called recovery is not quite what was being expected as the market kept rising.
That is my operating premise,anyway, going forward. The analysts will point to a lot of recent phenomena to explain the latest downturn but I feel that the market was headed downward anyway as soon as participants woke up from their fantasy dream of magic growth.
But, of course, I could be wrong. FWIW. And I will probably end up rueing the day when I got substantially out.
The front page story about the afgan tree loss is perhaps the saddest and most frightening thing I have read in a while.
I'm sure we all talk a big game until our children are hungry or cold.
Locusts indeed.
Here's a child's garden of deforestation stories to lull you to sleep.
Who said one death is a tragedy, one million is a statistic?
I think what made that story so sad was it was about a person who was doing the cutting, to keep his family warm. The other links were more general, more big picture.
Don'get me wrong, I see what's happening.
Since I'm typing...is anybody else just numb? It seems the past 30 days have been just horrible news on so many fronts. I've been reading and researching for years, this "step down" just feels different. Closer to home. I'm a 37 year old man; I didn't think a picture of a little crab covered in oil would effect me so much. But it did.
I believe it was Uncle Joe (Stalin). He had a fascination with numbers. When someone pointed out to him that, although the Soviets had a lot more tanks going into a big battle, the German tanks were of higher quality, his response was "sometimes quantity has a quality all its own".
Stalin said it somewhere along the line, literally , but he was not the first.
Yes, I've gone numb today too. The Michael Ruppert video in today's Drum Beat really got to me. I'm not yet anywhere near ready for collapse -- I'm seriously considering cancelling my summer vacation to work full time on prepping.
From the article:
Not all is lost. It shouldn't be too much longer before the Taliban defeats the US/NATO and its puppet government of drug-dealing, foreign-aid stealing thugs.
The problem here is that the US is in their country and we could stop the losses. We could pay them not to grow drug crops, which they grow to live off of something besides dirt. We could bring in fuel for them so that they don't have to cut their cash crops to heat their homes.
All this seems so simple, we could be making friends instead of letting them wither away. Sure some of their brothers might still want us dead, but feeding and clothing, and bringing in energy sources for the well being of the people will trump it all in the end.
Or am I just naive?
The article about crop losses in Africa is not good either.
While on one hand we can just blaim population for the problems. Population does not always explain famine.
I think we are starting to see the news spelling out the tipping point toward a crash in our food systems globally. Without instant news we might have gone several months before seeing the results.
On a positive note, there is a bigger local food presence here in North Little Rock, a store opened up a few days ago that sells local produce and products, It was started by the people running the local CSA.
Charles,
BioWebScape designs for a better fed and housed future.
Leanan - Thanks for the Mike Ruppert link up top. You are the best! I never would have been aware of it otherwise. I've been reading Mike since the early FTW days and still do (and will continue to do so if Collapse net has reasonable free content). I know people think he's either a nut case or prescient but in any case he is always worth a read or in this case, watch.
Todd
Collapsenet is going to be subscriber only for $10 per month. That's my understanding.
SD,
Ya, that was my understanding too. If that's really the case - so long Mike.
Todd
Great future ! Says zoologist - banker who ruined Northern Rock
Doomsayers Beware, a Bright Future Beckons
http://www.nytimes.com/2010/05/18/science/18tier.html?ref=science
http://en.wikipedia.org/wiki/Matt_Ridley
"He is the son and heir of Viscount Ridley, whose family estate is Blagdon Hall, near Cramlington, Northumberland. "
"Ridley was non-executive chairman of the UK bank Northern Rock from 2004 to 2007, in the period leading up to the bank's near-collapse."
Ridley basically inherited Northern Rock, or a good chunk of it. It was nationalized after stupendous losses and the first bank run in the UK in over a century.
He had the education appropriate for his parasitic class, went on to manage The Economist -the discredited rag that sells 80% of his newsprint abroad and languishes on the British newsstands.
He's written some books of popular science, I have read some of them like the Red Queen. He recooks biological ideas and presents them in well-padded books -the Red Queen would have been a good book, had it been half the size. I bought it before the collapse of his bank, and even at the time it struck me as strange the emphasis he put on parasitism ...
According to this kind of people if you are (you believe you are) good at something you are good at anything, so he published a book that starts with the Phoenicians and moves on to the future. A unified theory of history that is going to leave
Toynbee and Fukuyama of End of History fame lying in the dust at the feet of this failed British banker.
http://en.wikipedia.org/wiki/The_End_of_History_and_the_Last_Man
I am shocked and disappointed. This is the same Matt Ridley that I have come to know and love. I read Genome, The Red Queen and my favorite, Nature via Nurture. How could such a brilliant man, who wrote such great books, write something so downright stupid.
NO, NO, NO! The reason that economic growth has accelerated so in the past two centuries is because we found a cheap and very abundant source of energy, coal, oil and natural gas. Each of us was handed many "energy slaves" and we used these energy slaves to create great wonders, the railroad, the automobile, planes, and great ships. We used this fossil energy to multiply our food production many fold. All the wonders of the modern world come to us via cheap and abundant fossil fuel.
I feel like crying.
Ron P.
But Ridley is right. The fact that these energy slaves are not sustainable is orthogonal to his argument. I would not claim that this enslavement was smart or wise, because of the transitory nature of the gains, but it was cleverness geatly aided by better communication of ideas that allowed it. The fact that the unsustainability of the model means it won't have a happy ending doesn't change that.
Really now? Did you even bother to read the article. He made no such claim. In fact he argues the exact opposite!
But if we don't stifle innovation and trade, and don't do stupid things like enforcing restrictions like carbon tariffs, then we can just get bigger and better. He does not argue that the current model is unsustainable. He argues that everything will get better because of technological progress.
Ron P.
Someone already quoted Dr. Venkman recently on TOD: "cats living with dogs..."
Of course, since top down management will be tried before we hit bottom, readers of Ridley will be certain it was us doomers who made everything go boom.
Craig
That Ridley guy is a cornupocian on steroids!
You would have thought that his presiding over the ridiculously ambitious expansion of Northern Rock would have have taught him what can happen when you move beyond your competence. All copies of his book should be stickered "by the man who ruined Northern Rock". He obviously is not embarrassed by the billions spent by taxpayers sorting out the results of his over-inflated ego.
Oil is down 4.35 today! Wow!!
http://www.oil-price.net/
Stocks dropped a lot today, too. I don't know if Denninger is correct and the roof is on fire, but clearly people are afraid that it is.
It came back. The June contract, which expired today, closed down $1.86 at $68.01. The Dow closed down 376 points at 10,068 or down 3.6 percent. The NASDAQ closed down 4.11 percent and the S&P 500 was down 3.9 percent. All averages closed at the very low of the day.
Ron P.
Yes, I noticed that although the stock market stayed down, oil price rebounded late.
I just caught a conversation on CNBC where a guest was saying there is now some worry by investors about China. He said, they are trying to cool their real estate market, but he said historicially attempts to do that have failed.
So, the markets might not be dropping just because of the EU, but also because of concern over China. Why do I have this gut feeling we are on the edge of another precipice?
I don't trust the Chinese economy. I still suspect things are not going nearly as well over there as many think.
I dunno if we're on the edge of a cliff, but a lot of the more pessimistic talking heads predicted it would get ugly in April or May.
Earl, we're like Wiley Coyote who overshot the edge of the cliff! Only, we were running after BAU instead of a roadrunner.
We all know what happens next.
Craig
We all know what happens next.
We need to look down. And even then we can't fall 'till we hold up a sign that says 'oh no!'
So as long as we don't look down, its all good. Look at how long the Dow went sideways.
RE: Arizona threatens to cut off LA Electricity Supply
Really Leanan, I am surprised you fell for that one. Just political grandstanding over the controversy surrounding Arizona's new "Immigration Law."
The member of the Arizona Corporation Commission who made this statement, Gary Pierce, was acting on his own, not as a member of or on behalf of the Corporation Commission.
Further, The ACC has no power in the matter anyway, they only regulate electric rates within Arizona and cannot force any utility to sell or not sell electricity to anyone (at least not for arbitrary reasons such as this)...
And even further, in an ironic twist, the owners of the Palo Verde Nuclear Generating Station, where a goodly portion of the electricity in question comes from (there are other sources), includes the City of Los Angeles, Southern California Edison, and the Southern California Public Power Authority.
This has gotten some good mileage in the MSM, and Gary Pierce is getting his 15 minutes out of the immigration law debacle, but I did not expect to see this drivel on the Oil Drum.
I thought it was kind of funny. Maybe LA could retaliate by saying no more movies or TV for Arizona?
Well said, cosmoflanker. Pierce is grandstanding for the upcoming election and pandering to the lowest common denominator. One only need glance at the comments on the story at the Arizona Republic's website to understand how generally shallow is the understanding of regional energy economics and policy in the Southwest.
You can also see from the other comment here how reactionary thinking is so easily tempted by hyperbole such as Pierce's statements.
My dear Rate Crimes,
I was entirely joking. As if the city of LA could ever prevent Hollywood moguls from extracting their profits wherever they might find them. (Their current boycott is entirely limited to city contracts with Arizona-based companies, hardly a large economic impact.) If I ever suggest California turn off its spigot of Merlot and Pinot Grigio when another state refuses to send us their foie gras, you'll know that I'm kidding, too.
Taomom, I knew you were joking. In fact I was going to reply to "no more TV or movies for Arizona" with a "Promise? Pretty please?" ;-)
You also further demonstrated the current silly situation of "tit-for-tat" going on.
Rate, I also thank you for your comment and for providing the link to the Republic story (realized I should have done that).
I understand the civil liberties issue and am not very happy that Arizona has passed this law on theoritical grounds;what can happen to an innocent Hispanic can also happen another day to a Black , or a Jew, or an Irishman.
But I am VERY HAPPY about it on practical grounds.
One of my sisters is taking my dear old daddy to Canada this summer, and because somebody spelled his name wrong eighty two years ago, Almighty Uncle Sam has had us jumping thru hoops for four months trying to get a passport for a man who has lived in the same house for sixty years.
I recently had to pay a lawyer two hundred bucks to personally pick up a copy of my birth certificate (in order to quickly replace a lost wallet with my drivers liscense in it) and put it in the overnight mail, or drive three hundred miles one way to Richmond to get it myself. An affadavit from the circuit court judge, and/or the sheriff, who both know me personally, was not admissable as evidence of my identity.
The funny thing is, they would have accepted a utility bill and a tax bill as proof of identity at the Commonwealth vital statistics office.The lawyer had no proof at all , just the "in case of emergency" power of attorney I left with him many years ago.
It seems as if there is a double standard in effect , and American citizens are the victims.
And we wonder why the tea partiers are so successful?
Uncle Sam can't get his sxxt together where illegals the border with impunity by the tens of thousands annually.
I am glad because it will FORCE the federal govt and the public to pay a little way overdue attention in several respects to the overall situation of our country.
Incidentally this is ONE PROBLEM that rests SQUARELY on the shoulders of the liberal faction of American politicians.
I have some Mexican nieghbors, and they are fine hardworking people, no doubt about it.I would rather have them as nieghbors than any of the well to do types retiring here, who are too socially refined for the most part to speak to farmers and factory laborers.
But there is also no doubt about the fact that they are adding immensely to the unemployment problem among the many millions of poorly educated long term local people who will never get a high tech job.
No worries, California will no longer have a decent electricity supply anyway, after they collapse from the financial burdens. Even the Governator cannot save that state from falling.
California has no room to criticize Arizona on anything.
I heard that from a woman checker at Safeway, that Walmart is making most of its food sales money from people buying food with food stamps. From what I could see most were buying beer. Can people buy beer with food stamps?
No. You are not allowed to buy alcohol with food stamps.
Correct. But you swap the stamps for cash and buy your beer that way. Been a while but my kin told me the going exchange rate was around $.40 to .50 on the dollar. But I suspect that drops on a Saturday night. My kin can also get you good deals on electronics they "found" in a dumpster....any buyers?
You can't swap stamps any more. There are no stamps. You get a card with a magnetic strip and a PIN, just like a debit card.
Having had a tennet on 'food stamps' how you do the trade is you go in, buy the stuff they want on your card, then hand off the merchandise for the FRNs. His other "trick" - buy meat, make it into jerky and sell it at the bar.
Glad to hear they developed a better system leanan. Suppose they could still barter but not very liquid. Been quit a few years since I've spoken to my siblings. I suppose they're just still into the "resale" business.
Found in a dumpster - that's a good one. With my kin, the story was "it fell off the back of a truck".
Sign me up for a new HDTV.
Well that sucks. Beer is bread.
You can't buy energy drinks on food stamps either, or toilet paper, or dish soap, or hand soap, and especially not beer or smokes.
You can buy all those things with cash or credit.
There is a bit of an underground economy for some people on Food stamps, not all of them, just some of them. People will buy food and trade it for housing, car repairs, and the above items, from people who have more money.
The reason that food stamps have gone from paper to plastic is first the ease at getting them to the people, but also to stem the flow of the paper stamps into the cashless economy. Trading paper food stamps for anything and everything. Also the fact that with the paper stamps you could get coin change back and with that buy things you couldn't with the stamps themselves.
Now the pennies are still on the plastic card.
If you don't buy the right kinds of food products, and eat healthy, you can still run out of food stamps before the end of the month. Though it is a federal program it is administered by the states, so some states you get more per month than in others.
And with the estimated 40 million people on food stamps, there will be bound to be problems for more years to come. I know some people who tend to be to proud to take the hand out of food stamps and are going hungry rather than going to the food stamp office and getting help. I also know of the local food banks running out of food faster than in the past.
Generally speaking a lot of people are becoming the Have Nots. Something that has not been talked about a lot, but will get worse over time.
Charles,
BioWebScape designs for a better fed and housed future.
Yes. I've no doubt some trading still goes on. (When I was in school, I had a friend who used to try to trade her free lunch token for cash, so she could buy a candy bar instead.)
But the EBT card has really put a damper on the abuses, at least from what I can see. Buying a candy bar with a high denomination stamp, and getting cash back as change. Buying an expensive item, like a shrimp platter or a box of lobster, then claiming it was bad and demanding a refund. There were cases where people had bought houses using food stamps.
How are you supposed to stay healthy and part of society without soap or toilet paper?
As the government likes to point out, food stamps aren't meant to be anyone's sole means of support. For food or anything else. They're a supplement - to help you out, not to provide all your needs.
However, as has been discussed here before, many people get along just fine without soap, shampoo, or toilet paper. They use water to clean.
And many people, including some members of the TOD staff, have actually found that it's better not to use soap. Soap and shampoo dry out your skin, which causes oil overproduction. They also leave residue on your skin, which causes bacterial growth and odor. Many find that if they wash with water alone, as humans did for most of the history of our species, they look and smell perfectly clean, and even have skin problems disappear.
Soap was a major breakthrough for people, because it reduced bacterial infections and the spread of viruses.
http://www.betterhealth.vic.gov.au/bhcv2/bhcarticles.nsf/pages/Handwashing_why_it's_important?open
Handwashing - why it's important: Summary - Washing hands properly after using the toilet, changing nappies, handling animals and before and after handling food helps prevent the spread of various forms of gastroenteritis, some of which can cause serious health problems. Use soap and warm running water and wash hands for at least 10 seconds. Liquid soap
is best.
http://www.straightdope.com/columns/read/1935/whats-more-important-in-cl...
In his recent book, Eat, Drink and Be Merry, Dr. Dean Edell talks a bit about washing up. He says, "The one universal and most important preventive in the spread of infectious disease is washing your hands."
I'm sure they use soap to wash their hands. Just not their hair and entire bodies daily.
I was reading one of those advice columns, where a woman was concerned because her elderly mother-in-law sometimes went days without bathing. She looked well-groomed, and smelled clean, but the fact that she did not bathe daily caused the columnist to suggest she might be senile.
That really cracked me up. A lot of people that age grew up before indoor plumbing, when you only took a bath on Saturday night. I doubt the woman was senile. She was just used to living in a lower-energy world.
FWIW I used to have a bit of eczema on my face and a recurring case of 'ringworm'. Both disappeared when I started showering once every other day instead of daily. I think the natural skin oils are a valuable 1st defense against a lot of diseases.
LOL. There are two things I like to tell people when I'm in a mood to shock them: First, I don't shower every day; in fact, once a week should be enough. (That's pushing it, but you can all imagine how people react.) Second, and I'm being perfectly honest here, I have never ever used any kind of deodorant in my life.
This is a good way to kill off any unpleasant conversation, as most people are left speechless.
Wow... this stuff all runs together. Food stamps, sovereign debt, very interconnected!
So, the sovereign goes bvroke, food stamps are out. Hungry people find things in the dumpsters, and use them to buy beer. Then they get drunk, and have a little block party? Or will it be worse than that?
I am looking for a recent article I read stating that the recent increase in sales and profits at Wal-Mart was mostly from gasoline sales (gas prices up as oil rises, stay up as oil drops). All of the numbers we are seeing in the MSM seem to be cooked very thoroughly.
How fast do you think we go into the toilet? Weeks? Months?
Craig
no.
I passed by a horrible traffic jam this afternoon. Car crash, I figured, seeing the ambulance lights. As I got closer, I realized it was a bicyclist, hit by an SUV. The bike looked like a pancake, flattened and broken in pieces. Apparently, he or she was riding in the fast lane, against traffic.
The sad thing is, there's a bike lane on that road. On the other side, the slower side.
Deliberate suicide?
As opposed to what, accidental suicide?
Not a very good choice of words on my part, for sure!
However I was thinking along the lines of premeditation and a consequent decision to deliberately ride head on into traffic, knowing full well what the consequences of such an act would be.
As opposed to perhaps to taking a huge risk and expecting to survive.
I believe it would be acceptable to say, describe someone riding a motorcycle down the highway at 100 mph dodging in and out of traffic as "suicidal", though the rider himself, may not think he is in any danger...
I didn't see the victim - he or she was already in the ambulance - but given where it happened, I'm afraid it may have been a kid who just didn't know any better.
That sounds horrible, but this one was worse...
http://www.cbc.ca/canada/montreal/story/2010/05/14/quebec-cycling-accide...
Six cyclists struck by one vehicle, three dead.
There is a (gravel) cycle lane not 30' from the road, but these were triathletes training and they ride the asphalt.
Unfortunately, as more people are cycling, I expect to see more of this.
The statistics are that as the number of people cycling increases, the number of cycling fatalities stays flat or decreases. Certainly true in New Orleans. So the death rate/cyclist drops.
So do *NOT* expect more accidents.
People that commute to work by bike live 10 years longer than those that do not. +12 years cardiovascular (plus slightly smaller cancer risk), -2 years accidents.
Alan
i had avoided posting on the oil conundrum sensing it is a complete waste of time. TPTB, vested interests, conspriracy theories, etc.
well, i am disgusted, completely disgusted. BP,deep water horizon, the federal goobermint, in short western civilization's dramatic fail. it wont be long now folks. stick a fork in our collective buttocks and turn us over, we is done.
here is the gist of it.
you wont hear or read the truth, just the evidence.
the man enslaved to wealth can never be honest.
there is no limit to human greed and folly.
yup, nothing to see here. move along.
how many lies am i supposed to believe?
even the trolls and industry shills have disappeared. too much even for them.
this is the big one boys and girls.
next stop titan, a moon of saturn. it has lakes of methane.
it is our destiny to destroy more than one world before we do ourselves in.
kill this planet and at least one other. i say even more. better hope the interplanetary police
slap us down.
i am ashamed to be human. count me out of the genus and class of homo sapiens.
i often wonder who or what will dig up our fossils?
what lame a$$ed rehash will JHK have on his monday blog?
too busy flying the friendly skies and happy motoring i bet.
no tramp steamer for him and certainly no rail. fly and drive whilst he bemoans the state of affairs. cant be a nazi pundit without being contradictory.
i notice gaz-o-leen has dropped a whole 4 cents a gallon on it way below 2 bucks a gallon.
HAH-HAH-HAH!
bring death to you all. PRAISE BE TO ZARDOZ!
ava-TAR
soylent green
the road warrior
Aah, humbaba, you're back!
"Have you reduced your life style today?"
President Zapatero of Spain, has reduced our lifestyle 5%, that's salaries of the public workers' and pensions, social perks.
Now he's going to shave off people with capital more than 1 million euros.
ZP must have read you,
"Have you reduced the lifestyle of others today?"
I'm adding my post on 'paper money' at the bottom here to try to respond to the many questions raised.
Analysis of the workings of the Federal Reserve and other central banks can be confusing. I have actually worked in a major Wall Street trading room and dealt with the Federal Reserve, so I think I know a thing or two about this, but probably someone here will say otherwise.
None the less, it may be best to think of money, as least from the Fed in terms of the 'money base'. Up until two years or so ago, the money base was almost exactly equal to the amount of real paper money in circulation. So it was very accurate to say that the actions of the Fed directly resulted in 'printing money'. In the last two to three years, actions of the Fed have caused 'money' to pile up within banks. This exta money in the banks is technically known as free bank reserves, or you may just call them excess reserves. The main point being is because the banks have not used this money for various reasons, it has not yet become 'paper money'. However it would still be correct to say that the Fed has 'printed' up these reserves, it's just that the banks prefer to hold this money in electronic form within their banks.
So both the deflationists and inflationists talking about money are correct in some aspects. And indeed, the money supply held by individuals and businesses has been steady to falling. Thus it has been argued that the Fed is ineffective. But that would be skipping over some important points - the most important being that the Fed added $1.25 trillion to the financial system. That is real money, and mostly being held in the form of Treasury bills (mostly not counted in the money supply). So one can not just look at the money supply and say the sky is falling.
Despite what you have heard about the $1 trillion Euro bailout, the ECB has only 'printed' up $100 billion in new money, and the Fed only $25 billion. The failure to get the $1 trillion in new money as promised out into the financial system has caused a bit of a panic. But it is too soon to call the Euro bailout a failure, despite all that has happened the last two weeks.
The UB Post (Ulaanbaatar) has published an interview with the former president of the Central Bank of Mongolia, Chuluunbat. Some interesting things here:
I'm not sure what he says about international practices applies very widely, to put it mildly...
Some huge mining projects are now underway in Mongolia, and for some reason many Mongols think this means that the country is about to get rich quickly. The Daily Telegraph had an article about this a while back:
http://www.telegraph.co.uk/finance/newsbysector/industry/7578932/Mining-...
Meanwhile the vast majority of the population is very poor. Can anyone think of an example of a poor country where massive foreign investment actually made life better for the have-nots? I don't think that is very likely to happen in Mongolia. A corrupt elite tends to act like a vampire squid and suck all the wealth to itself and away from the general population.
I would post the link to the piece in the UB Post, but I can't access it right now. The home page is
ubpost.mongolnews.mn
Edit: Here's the link:
http://ubpost.mongolnews.mn/index.php?option=com_content&task=view&id=4863