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Wednesday Open Thread (and News Dump)
Posted by Prof. Goose on March 29, 2006 - 1:31pm
For all you do, this thread's for you!
“It's difficult to get a man to understand something if his salary depends on him not understanding it.”
—Upton Sinclair
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Global warming is suddenly really...er...hot.
http://gristmill.grist.org/story/2006/3/29/122054/644
Chevrolet has a site up where you can design your own commercial for the Chevy Tahoe. Environmentalists and peak oilers have been adding their own text.
Re: Watching the Import Numbers
Last week, average daily oil imports into the US rebounded slightly to 10.1 mbpd, but the average for March, 2006 (9.9 mbpd) was down about 4% from the average for March, 2005 (10.3 mbpd).
There is always the possibility of statistical variations, but the concerns that Khebab and I have about net export capacity are based on the Hubbert Linearization (HL) method--which accurately predicted 99% of the post-1970 cumulative Lower 48 oil production. Therefore, if the HL method is screaming problems ahead for net export capacity, and if average daily imports into the US for March are down about 4%, year over year, I think that we need to sit up and take notice.
I predict explosive increases in oil prices.
The "Export Land" Model:
A critical point to keep in mind is that an exporter can only export what is left after domestic consumption is satisfied. Consider a simple example, a country producing 2.0 mbpd, consuming 1.0 mbpd and therefore exporting 1.0 mbpd. Let's assume a 25% drop in production over a six year period (which we have seen in the North Sea, which by the way peaked at 52% of Qt) and let's assume a 10% increase in domestic consumption. Production would be 1.5 mbpd. Consumption would be 1.1 mbpd. Net exports would be production (1.5 mbpd) less consumption (1.1 mbpd) = 0.4 mbpd. Therefore, because of a 25% drop in production and because of a 10% increase in domestic consumption, net oil exports from our hypothetical net exporter dropped by 60%, from 1.0 mbpd to 0.4 mbpd, over a six year period.
Note that car sales in Russia are up 15% year over year.
No one knows for sure because no one tracks inventories on the basis of quality, but the price spread between light, sweet and heavy, sour is certainly suggesting a falling light sweet supply.
I thought that is was generally accepted thet we passed "Peak Light Sweet Oil" in either 2000/2001 (statistical tie) or 2004 (depending upon how "light" is Light).
So today, increasing heavy and/or sour crude, decreasing light sweey crude. Question is, are heavy/sour increases larger or smaller than light sweet decreases ?
Yesterday oil rose because of the drop of gasoline inventories (by 5 mln.barrels), even though the oil inventories are on the rise again (by 2 mln.barrels).
http://www.bloomberg.com/news/markets/energy.html
Second, and more importantly - worldwide there is a shortage of capacity, capable of processing heavy/sour crude. And a lot of refineries are upgrading now. It is possible that a lot of the piled up sour/heavy crude is simply waiting for somebody who is able to process it.
The result of both things is that oil inventories would rise, but there will be shortage on finished products.
IMPORTS go down:
DEMAND goes up:
STOCKPILES go down:
What more do you need?
The more important question I was trying to answer is why gasoline production and imports are dropping even though oil stocks are on all times high? The relation between sour/heavy and light sweet crude could be the answer.
Now that's an explanation.
The last few weeks of threads about oil prices and futures markets has got me thinking about what I should do when we have the next oil spike. At what price point should I start thinking about increasing my food/supply reserves. Here's my general breakdown for the cost of a barrel of oil (assuming I wake up tomorrow and there has been a terrorist attack that knocks out supply for an unknown amount of time but probably at least 1 month) :
$100-Go to Costco on the way home. Increase food supply by one month.
$150-Go to Costco on the way to work. Buy non-perishables. Go back on the way home to get frozen stuff if it seems necessary.
$200-Go straight to Costco; buy everything we can get our hands on.
Am I overreacting? Will $200/barrel cripple the economy? Seems like that would be about $6/gal gasoline?
If I am wrong, you will have less debt, with a lower stress lifestyle and you will have more money in the bank. If I am right, you will at least be better prepared.
George Ure, over at Urban Survival, has PDF essay that you can purchase for $10 on "How to live on $10,000 or less per year." (I have nothing to do with his website/publishing efforts, and I'm sure there's tons of similar stuff out there). George's #1 recommendation is to arrange your life so that you can get by without a car.
But when the hurricanes come, FEMA will not be there to move you out in time. Curses!
And I keep a car for evac, but drive only ~180 miles/month.
In the richer European countries it is the American lifestyle everyone wants. Bigger houses and bigger cars and increased enegry use. In our lane every adult has a car. Houses are getting bigger too. Bathrooms and kitchens are growing bigger. As people get richer they spend more and more. A rough rule of thumb is that people seem to buy the biggest house and the biggest car, they can possibly afford. They seem to believe that providence has granted them a life of luxury and hapiness, which is somehow their birthright, because our civilization is morally superior to all others.
http://www.sbs.com.au/whatson/index.php3?progdate=01:04:2006
(Scroll down to 2013 - La Fin Du Petrole.)
And April Fool jokes only work up to noon, I have always been told. After that it is on the jokester.
However, a wonderful, BBC TV edition of Panorama with Richard Dimbley, one April 1st over 40 years ago (at 7.30 no less) showed "The annual spaghetti harvest in Italy" with people pulling spaghetti off trees.
In common with half of Britain, I and my parents murmured, "I never know spaghetti grew on trees".
I'll be watching.
I haven't been able to sleep tonight. We had a company retreat, and the big boss told us that the future is bright and all the firms he knows are extremely busy. When asked to suggest hopes for the firm, most wanted more high-style design projects while I just hoped we would be agile enough to adapt to changing realities. People were somewhat receptive last year, but I think they've decided it was all about Katrina/Rita.
The disconnect between what I see locally and what I read here is really driving me nuts. No one seems able to explain how this economy seems to chug along in the face of rising fuel prices, massive job losses in the hinterlands, ridiculously overpriced housing and a debt bubble. But it does.
I think the latest energybulletin post is worth discussing:
http://energybulletin.net/14442.html
Basically points out that Peakoil Doomers should rightfully be seen as the 'ghost of Xmas future' and not as the Grim Reaper incarnate; that only a full disclosure of possible Peakoil ramifications can be the best motivation to generate historic political and social change.
I heartily agree with this author's assessment of looking at the worst, then encouraging the best. It is much too easy to continue the habits of the easy-motoring status quo, the need to develop a constant awareness that civilization is only three meals deep is, by far, the best way to achieve Powerdown.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
I am a'feared we are the victims of our own success...we have had far too many "a'feared periods in the recent past, all of whch came to nothing and made those concerned folks like chicken littles ....
The biggest most influentual segment of the population are the baby boomers...it is their money, their votes, and their decisions in the corporate world that direct America's energy and direction. This is why 20 year olds become exasperated watching the news...there are still more news reports about boomer icons, and more commercials for the Geritol crowd than real news....(would you have watched the news or cared about "current events in 1970 if all the news had been about WWII (the boomers still view Vietnam and Watergate as "only yesterday") and the icons discussed were Benny Goodman and the Glenn Miller Orchastra (you still see more features about surviving Beatles and the remainder of the Kennedy clan than about current figures...heck, Jackie O. is gone but still gets big press!
Now on energy, the boomers still see the 1970's energy crisis as "only yesterday". They well remember when the "predictions of immediate doom" were all the rage. The crisis was HERE, NOW, and there was NO WAY OUT!!
opps.
Instead the 1980's and 1990's were the boom years of a century. How sad are the ones who were a'feared, and kept their money in safe places like bonds and CD's when right at the moment the catastrophe was UPON US in 1982, the stock market took off. They saw their friends building gigantic new homes, and buying boats and SUV's, while they lived in small insulated basement houses, still driving their Diesel Rabbit pickup truck because CATASTROPHE WAS JUST AROUND THE CORNER.
THE LAST TIME, THE A'FEARED WERE THE LOSERS. Their friends and families, including their sons and daughters in their formative years, saw it, and felt sad for them.
And the sons and daughters of America said, not me. I ain't going to live like that. I am going to live, buy and enjoy, and not miss the boat like the semi-hippie "a'feared" set who are now on the edge of old age and retirement, having missed the greatest known boom in world history, and have nothing.
The truth is, the wolf may finally be here. This may be the delayed catastrophe so long predicted. But after the 1970's so called "catastrophe", the Cold War so called "catastrophe", the Y2K so called "catastrophe", the current terrorist post 9/11 "catastrophe", the global warming "catastrophe", and now, the "Peak Oil" catastrophe", the Peak Oil issue is just one catastrophist theory in the cafateria of doom scenarios. And it suffers in the boomers mind from the "been there, done that" stigma (remember, even in ripe old age, the boomers always something new, not a '70's redux...)
So when the Peak Oilers shout, "BE A'FEARED", the mass weight of the population shout back, "YOU BE A'FEARED, I'M LIVING AND BETTING ON THE FUTURE, BECAUSE IT'S WHERE I WILL SPEND THE REST OF MY LIFE, NOT IN THE 1970'S DARKNESS I GREW UP IN."
The sad part is, evidence is starting to favor the Peakers. But they are, as the writer Virginia Woolf said not too long before she gave up and walked into a river with stones in her pockets, "shouting with our face pressed against a closed door."
partially correct.
1982 gas rabbit. http://www.prosefights.org/msd/msd.htm
but still at that time we were driving gas-guzzling [10-12 mpg for 33 years, about 265k miles] 1972 3/4 ton 4x4 f250.
http://www.prosefights.org/sellford/sellford.htm
white ford was sold in the fall of 2005 for $6,400 to an herb farmer.
white ford was bought new in lewiston, ID in 1972 for $4,050.
reason i got into rabbits, grey and green [http://mywebpages.comcast.net/bpayne37/green/green.htm],
was to save gas money commuting to sandia labs after the 1980 gas crunch.
senior citizen did both the 1973 and 1980 gas crunches.
this time i think that IT is for real. too real.
green revolution may be overthrown by peak oil.
i just finished rototilling my garden.
later ... with senior luck, from the class of '56
http://www.prosefights.org/shattuck/shattuck.htm
"He said that he had been around since the 1950s, and that then people tried to use fear of nuclear waste to get people to change, in the 60s it was fear of chemical pollution, in the 70s it was the fear of nuclear power, in the 80s nuclear bombs and so on... . All of those positions tried to terrify people into change and none of them really worked."
As it see it, far from "none of them really working," all of those fears were addressed and acted upon. Fears of nuclear waste lead to pretty much the end of the nuclear industry in the US. Fear of chemical pollution, initiated by "Silent Spring" pretty much kicked off the modern environmental movement, fear of nuclear weapons lead to many arms control treaties.
The trouble with the fear motivates action approach is that, more often than not, the fear-driven action is the wrong action.
The nuclear fear HAS created some irrational reactions on both sides, but are you sure it's actually a paralysis from finding a 'suitable plan to deal with the waste', or is it a state of denial by nuclear proponents and desperate energy-doomers that no suitable waste plan has emerged despite extensive efforts, and that we might have to admit that this power-source is, in fact, "To Expensive to Meter" ?
Is there anything else currently 'on the shelf' that does what wind and solar already do, which is to completely recover their invested energy and continue to produce power for some 4 to 5 times that span? (Even afer a couple decades, PV panels are likely to still offer some 50% of their original ratings) How much Solar capacity could you generate in the time and costs of building a single reactor and fueling it for 25 years?
I totally agree with your final statement about Fear-based-decisions. But I think the other problem that comes out of the tendency towards Nuclear energy reminds me of the admonition against foodshopping when you're hungry. The eyes get bigger than the stomachs, and we don't pick healthy foods, just stuff we can glut ourselves on, as if that's a real solution to our hunger.
Nuclear waste can be vitrified (incorporated in glass), and, if one want's to 'gild the lily', encase the glass in stainless steel and buried in a stable geological formation.
Nuclear waste can also be recycled and all trans-uranics reused as fuel. But uranium has been too cheap to make this economically viable.
Technically, problem solved.
Politically is another story.
Emission of massive (alpha, beta, neutron) particles leads the material to recoil, driving it into and through its surroundings: High-level waste migrates through and out of its containment.
The claim of a "stable geologic formation" reeks with hubris. Perhaps you'd like to 'splain all that water inside the salt domes in Nevada? Our moment's eyeblink into planetary history is only enough to show us that our geology is in flux, in unpredictably punctuated ways.
http://www.ocrwm.doe.gov/factsheets/doeymp0010.shtml
Yeah, but what about all the oil and natural gas we don't have because the formations weren't tight?
Dilute the waste in the glass if need be (perhaps with a pure glass outer shell). Any embrittlement issues disappear between just waiting for the more than mildly radioactive stuff to decay and dilution so that any microstructure cracks are trivial.
"Salt Domes' in Nevada ?? You are ignorant of geology.
Max case (I would argue less time) we need only contain waste for 250,000 years; a mere eyeblink in geological time. Finding a stable formation for 250,000 years is easy (except for political, unreasonable fears)
A little water leaching through depository is, quite frankly, no big deal. Time to interaction with human beings is VERY long, Pl is a CHEMICAL riak (a bit worse than beryllium as a carcigen) not a radioactive one, and the metal and common compounds (oxide, sulphide, nitride) are not water soluble).
The biggest issue is future generations coming back and mining the waste for valuable metals (waste is VERY high grade platinum group metal ore for example, as well as a source of uranium, etc.)
Except for the mining issue (hence the plan to make the waster recoverable), only a political issue driven by unreasonable fears.
I agree with you there is plenty of available geology from a structural sense. Everyone wants to use nuclear energy but nobody wants the waste in their back yard. It would be political suicide for a politician to allow it. Why not drop the vitrified waste in a subduction zone off the coast. It would plow under the tectonic plates? Either that or just store it in pools until recycling is feasible.
Letting the shorter half life/more radioactive isotopes decay for several decades (a century ?) is probably the best first step in any solution. Less radioactive used fuel if one choses to recycle makes it easier/cheaper to process. Less radioactive heat and resulting material degradation if one buries whole, or dissolves waste in glass or some other medium (ceramic, metal, etc.)
While sheet-mulching for this Summer's vegetable beds, I found this fascinating, frightening article from the March 15th Wall Street Journal:
"As Utilities Seek More Coal, Railroads Struggle To Deliver"
A confluence of various issues. Lack of rail capacity (Kunstler) *
Consolidation of rail industry (Corporate mergers and monopolies) * Coal displaced by consumer goods(!) as cargo (Overconsumption) * Coal is not fungible (Stuart?) * Wall street likes tight capacity --> higher prices (Corporate capitalism?) * Flooding damaged tracks, adding to problem (Climate change?) * 100 more coal burning plants in the works as nat. gas fades!! (End-of-the-world AWKI) * And...Conrad Burns greasing the rails!Ultimately, I'm afraid this helps confirm that yes, the American Way of Life IS non-negotiable! We will not change until we really really really HAVE TO.
The drought has also impacted hydroelectric and nuclear power plants.
"They can't make up for years of underinvestment within a single year. Now they're playing catch-up," said Richard Price, managing director of Westminster Securities Corp. in St. Louis, Mo.
Both railroads are expanding capacity on all Powder River Basin routes, according to the companies. And both have instituted aggressive hiring plans nationwide to run more trains while at the same time making up for a retiring work force.
"They're putting significant capital in rolling stock and training crews," Price said.
The problem
Railroad delivery fell 20 million tons short of commitments between Powder River Basin coal producers and the utilities they served in some 35 states in 2005. And although coal production and rail delivery are expected to reach record levels this year, rail delivery is expected to again fall short by 20 million tons.
Rail expansion efforts are simply outpaced by the growing demand for Powder River Basin coal, according to those in the industry.
Price said it's a dilemma of logistics: Neither the producers nor the utilities want to slow train traffic in order to make way for expansion work.
http://www.ble.org/pr/news/headline.asp?id=15774
A classic example of the "cost of complexity." Building new infrastructure is easy compared to expanding existing. Once the infrastructure gets built, we get dependent on it.
and all of the energy that goes into heating all buildings, and our homes, much of which is unoccupied
Hey, we don't have to heat the whole cave. Only the part we are sitting in.
there may be a BIG PROBLEM [waste] transporting and burning all of the coal [global warming] from wyoming to electric power stations.
We hope to visit powder river basin and triple tracked
train system [with digital and analog cameras with notebook with wireless connectivity to internet] on way back to my 50TH!
http://www.prosefights.org/shattuck/shattuck.htm
They reduced track mercilessly, and when volume picked up, they could not handle it. But instead of declinign business they could not handle, they signed up and then screwed some major customers.
They are putting back double track between Los Angeles and El Paso, at 50 miles/year !
They had a parallel track from Yuma to Phoenix to somewhere east of Phoenix. (This could have taken load off LA-El Paso for a few hundred miles AND served the massive metroplex of Phoenix from East & West). They abandoned Yuma -PHX segment and run Phoenix bound frieght (like Asian imports, CA fruits & veggies) from West to East south of Phoenix to middle of desert and then loop back west towards Phoenix. Adds several hundred miles to route and congestion on tracks.
Needless to say, most Asian imports and fruits & veggies for the 4+ million in Phoenix are trucked in.
Here's a taste from the introduction:
It's worth a read. I invite your comments.
Making A Living On The Farm
With respect to energy:
A telling figure is how much money is made from these products after they leave the farm. For example, this document makes the case that agri-business (corporations that buy from and sell to farmers) represents 12% of US GDP, yet producers represent less than 1%. Moreover, that gap has been widening for the last 40 years.
I know several farmers that net about $35k per year off about 6 acres. That's far from a fortune, but their per-acre profit is many many times what they would get from, say, growing corn. There's really nothing special about their operations other than that they are selling directly to consumers and that they deal as little as possible with agri-business companies. So, there is room for profitable small farms.
From the Energy Bulletin article that Khebab and I coauthored:
Proposal: Replace the Payroll Tax with an Energy Tax
Some have argued that the suburbs are dead; the suburbanites just don't know it yet. It's probably more accurate to say that the suburban commutes are dead; the suburban commuters just don't know it yet.
We recommend that the United States abolish the payroll tax (Social Security + Medicare tax) and replace it with either a liquid transportation (petroleum) fuel tax or an overall (nonrenewable) energy tax.
The majority of American households pay more in the payroll tax than in the income tax. This would be a tax cut for most households and it would a massive tax increase on those who are profligate in their use of energy. No matter where one lives, the cost of goods would go up, but if you lived close to where you work, your effective tax rate would go down. Of course, those who persisted in long commutes would pay the price.
There would of course be very powerful forces opposed to this idea--the housing industry; auto industry; airlines; trucking--the list goes on. But the fates of these industries are sealed. It's not a question of if they will contract; it's just a question of when. The sooner it happens, and the sooner these industries start emphasizing energy efficiency, the better off we all will be.
A high gasoline tax does not necessarily equate to a lower standard of living. Norway, with the highest gasoline tax in the world, has the highest standard of living in the world, perhaps partly because their car ownership per 1,000 people is about half of what it is in the US.
There would be some other benefits. As we turned to walking, biking and mass transit, our health would improve. There is pretty much a linear correlation between obesity rates and total miles driven (here in the US, we are the world champs in both categories). In addition, since this is in effect a consumption tax, everyone who now avoids paying Social Security taxes would no longer be able to avoid paying them.
However, the primary reason for implementing the proposal is that it would cause an immediate and massive across the board push for greater energy efficiency and it would unleash enormous free market forces against profligate energy use.
Of all the oil-rich nations, it has used its endowment quite wisely and has avoided the 'oil curse'.
It has progressive ideas regarding civil society and yet at the same time has maintained social and familial cohesion. It has not forgotten its roots such as fishing and the role this particularly difficult harvesting method plays in northern waters and has played in Norwegian society over the last millenia.
It is also endowed with access to the potential of Hydro Power, wind power, tidal / wave power like no other modern industrialised nation on the planet
Now Norway is looking for ways forward beyond oil. It is directing wealth towards this goal. It is helped by consensual politics, an ordered and civil society and a very high degree of quality education. It is not perfect and does suffer some social problems. But Norway is pretty well placed to find a route through. Norways biggest challenge (IMO) is not peak oil. I think Norway's biggest challenge may be Global Warming. An obvious impact would be fishing, but then the possible loss of the Atlantic Conveyor could be very dramatic on much of Norwegian climate and then society.
But generally speaking, they are in good shape: rich, intelligent, socially and environmentally active and forward thinking... Watch this space: Any Nation that can get a away with calling a UK Environment Minister a Dritsekk has my vote.
Norway is a special, rather than general case. Perhaps it will get through Ragnarok better than most.
I think the greatest of these faults was mentioned early in the evening; "They steal our fish !"
This is an issue that Icelanders TWICE went to war against the Royal Navy over; and the only nation to ever best them !
Iceland has a VERY different take on social cohesion (think hybrid between Texans & Danes) than the Norwegians, but they will do OK.
They have survived three nuclear wars in their history (massive volcanic explosions with fallout that poisons all with fluorine afterwards), they will survive Peak Oil.
Something's going on. Price goes up to U, there's a little profit taking, price goes down to D. Prices goes up to U1, where U1 > U. Profit taking lowers price to D1 where D1 > D. And over and over. At least that's my take on it. And the primetime driving season isn't even here yet.
Go to TFC Commodity Charts and look at the weekly chart. For some reason, they won't let me link it in here. Folks, we're headed toward $70 for sure sometime soon.
And I'll add that the displayed upward zig zag can not possibly reflect reactions to Nigeria, Iran, or other geopolitical events which in and of themselves follow no such pattern.
http://www.peakoil.com/fortopic1071-1740.html
But yeah, $70 doesn't seem at all unreasonable.
I'm just trying to understand what's going on just like everybody else.
This shows the market's own expectations about the most likely path of future oil prices. It shows a peak in Spring 07 of about $3 above today's prices, followed by a drop. Of course there is no guarantee the market will be right, but then, the same could be said for other predictions. At least the market is putting money behind its opinions.
Just curious and want to take a look-see.
http://www.theoildrum.com/story/2006/3/23/31547/4509
What this graph is telling me is that they are betting for a near term rise, peaking in the spring which not coincidentally is the time when rafineries are booking oil for the summer driving season.
From there on the "market" has no clue what wll happen, just like all of us - therefore the futures starts to follow the normal backwardation line.
Leanan, your price graph above looks exactly like Stuart's production graph. The recent common judgement on his graph is that it represents a plateau/peak/slide. The yellow, green, red lines here are highly misleading.
The question is, if there is no demand, why is that oil being produced and where is it going? I believe the answer is strategic reserves. US, Japan, Europe, and China have all been making noises about increasign their reserves. The price of a commodity is dictated by how much the last customer is willing to pay. And right now that last customer is socking the oil away fro a rainy day.
We've seen a $60 support develop for oil over the last couple of months. That's because somebody has decided that it's worth filling up the rserves at that price point. In the same period we have seen the futures prices also settle at $60.
Most of the price volatility recently had been driven by political considerations. The headlines say Nigeria, but the real driver is Iran. Prices started their slide back to $60 right after the remarkably non-confrontational State of the Union speech. Now they are running back up because there is a concern that the US Administration was biting their tongue only to promote more favorable wording from the Chinese and Russians at the Security Council.
So far, Global growth does not appear to have been affected by oil prices or availability. When economic growth starts to become constrained in the US or China by oil availability then the paradigm will change completely. This can happen pre Peak or post Peak. When it does that last barrel of oil will be bid on by 2 consumers who need it to get to work or run their factory. Then, $60 will be a sweet memory.
Once demand outstrips supply, a whole different set of customers will be driving price. That will cause both price rises and volatility.
Too little, too late?
My 9-year old son watched a litle of TEOS when I had it on, but after a short while, he got up and said, "This is too depressing. I'm going to go play with my cars."
Say the economy falls hard due to any reason (Peak Oil, Housing Bubble etc.)If enough people fail to make their mortgage payments, due to loss of jobs, what can the lenders really do? Assuming they can still afford to hire people to come and confiscate everyones home, the masses of people would surely override the lenders and ultimately just stay in their residence. Obviously I'm not including other factors like resource availability and/or transportation costs to and from your home. However, do you feel there is any reason to sell your house based on the fear of a failing economy?
Thanks
You have mentioned the bankers nightmare that dare not speak its name:
If you owe the bank £5000 , you have a problem. If you owe the bank £50 million, the bank has a problem
If two pensioners default on their council tax and go to prison, they have a problem. If 200 000 pensioners default, the Government has a problem.
Nobody can say for certain what would happen. If a few million (or even tens of millions) households default on debts, then all bets are off. The logical thing to do (IMO)
Is to try and stabilise the collapsing system to avoid social chaos. 1) Nationalise the banks and take on the debt. 2) Suddenly you no longer own, you are now renting from the Government. 3) The last thing anybody needs is a a very pissed off and de-housed population, with no hope, and possible access to guns and ammo (USA) or paving slabs and cobble stones (Europe)
IMHO, if you still have a big debt to pay-off, then yes. The idea is to have a positive net worth in bad times and to be flexible. I would not count on the masses of debtors beating off their well heeled creditors.
Surely you jest.
"They" presumably refers to the Federal Reserve System and other central banks. The last time the Fed tightened up in response to cascading financial collapses was . . . the Great Depression. At that time, a theory (or model) called the "real bills doctrine" ruled. This theory was wrong, but it was the conventional wisdom, and so while deflation ravaged the world, the Fed tightened the money supply, or to be more precise, stood by while the money supply collapsed from a huge series of bank failures.
IMO central bankers will not make that mistake again. There is no limit whatsoever to the amount by which the Fed can increase the amount of credit in the system. (Yes, I know about the infamous "liquidity trap," but it is rather easy to avoid that one.)
Given the choice between another Great Depression and the politically popular course of action to inflate away everybody's debt, which direction do you think the Fed will take? Don't you think students would love to get out from under their excessive student loans? Homeowners with mortgages greater than the market value of their homes see their debt melt away? Deeply leveraged corporations see their bonds as a negligible liability? And what a delight for maxed out consumers to be able to pay off their credit cards for the price of a few postage stamps!
Never underestimate the superior political power of debtors.
1. Collapse of real estate from prices that were overinflated perhaps ten times as much as U.S. real estate is overinflated now.
2. Pressure from the bureaucrats who run Japan to deny the problem, cover up insovency of banks and corporations.
3. Starting from a position of low interest rates that made it essentially impossible to lower real rates of interest at all.
4. Most important difference: The Japanese were (and are) savers. By way of contrast, Americans (Consumers, corporations, federal government) are all addicted to increasing doses of debt. Borrowing comes as naturally to Americans now as saving does to the Japanese: It is a whole different mindset. So long as Americans are given the opportunity to borrow more, they will . . . and as expectations shift to accelerating inflation they will have a huge added incentive to borrow ever more.
Thus, I think it is very likely that the Fed's perception that it can stave off deflation--no matter what--is very likely to be correct.
But as a caution I must return to my Yogi (Berra): "Predictions are hard to make, especially about the future."
Americans are already convinced that they will be able to repay with inflated dollars. The apparent criteria for Joe / Jill Six Pack when deciding to take on debt is whether they can service the debt in the present. Never mind the teaser rate, the balloon payments, the price to be paid for skipping a payment etc. They are in effect "all in."
Then there is the question of whether [even if the marks are willing to increase borrowings] the banks are going to willingly lend into a deteriorating envirnoment at an expanding rate. Bankers may not have a death wish after all.
Also by Yogi [I think] -- "it ain't over till it's over." :-)
Quite so. And in that case they buy mass quantities of Treasury bills, thereby lending to the U.S. government and monetizing the debt.
Unlike Japan, US is the position to dump its inflation on the other countries and they do not have much choice but to accept it. Of course to a certain extent... therefore I am giving a biggest chance for stagflation - the middle road. You still get a foreign financing but you are still printing like hell and old debt melts. The catch is that this can evolve in both other extremes , dependant on factors which at least for me is impossible to predict...
In the U.S., we seem to have no problem creating ever expanding deficits; when all else fails, have a big war, because that always will do the trick--as World War II got the U.S. out of the Great Depression. (Contrary to popular belief, the New Deal was not very effective, and we still had double digit unemployment in 1940 in the U.S.)
"Japan's government debt is extremely high, especially considering the fact that the data exclude likely future liabilities stemming from an ageing population and possible requirements of the financial system. Nevertheless, an offsetting factor is the degree to which the Bank of Japan has already monetised the debt."
http://www.bis.org/publ/work161.pdf
IMO Japan is in good shape: Their people live longer than Americans; most electricity is from nuclear generating plants; their schools are good; unlike the U.S. it does not have the drain of a big military on the economy; and as elderly rice farmers retire some progress might be made on their agricultural policy.
In terms of dealing with low birth rates and an aging population, I think Japan has problems but seems to be dealing with them at least as well as any European country I can think of. Note that Japan leads the world in the design and production of robots, which is an enlightened way to deal with possible labor shortages.
Finally, the paucity of lawyers in Japan makes it far more possible to implement constructive changes than is the case in the U.S. In conclusion, Japan probably will come through tough economic and financial times in good shape--and probably in considerably better shape than the U.S.
It all depends what type of bad times lie ahead. In some scenarious Japan can be an a really big trouble, not last because it is so much tied with the US.
According to this article:
http://www.wanttoknow.info/usmilitaryspending
Japan is the second biggest military spender in the world with 5% of the world total. But both Britain and France are very close 3rd and 4th with 4% each, while both of them have less than a half of the Japan population and GDP.
Overal Japan is definately not defenseless but is obviously not a significant military power too. Anyway in a hypothetical stand-off with nuclear China or Russia I would not bet on them.
Don, maybe there is a limit. Credit based monetary expansion implies willing borrowers. Who [other than J.P. Morgan or some other front] takes on massive debts when the ability to service existing debt is doubtful?
Helicopter drops? Try to get oil producers to sell oil for dollars after it is determined that this is what is occurring.
What would otherwise pass for sound monetary policy may be the only action open to Ben & Company.
2. Businesses will borrow if they can, because to be in business you have to be an optimist. Thus, even with inventory piling up and factories idle, some businesses will borrow bigtime, especially if they get tax breaks thereby from investing in energy exploration, energy saving devices, or whatever.
3. Uncle Sam has no limit whatsoever on his abiltiy to borrow, if the Fed obligingly buys the new debt. That is called monetizing the debt; it has happened before and is likely to happen again. Some say it is already happening, but my reading of the data does not confirm that interpretation. Again, if the Fed decides to do this, there is NO LIMIT WHATSOEVER as to how fast or how far it goes.
True up till now [see your quote from Yogi]. This rubber band is wound very tightly already.
"Businesses will borrow if they can, because to be in business you have to be an optimist. Thus, even with inventory piling up and factories idle, some businesses will borrow bigtime, especially if they get tax breaks thereby from investing in energy exploration, energy saving devices, or whatever."
Some businesses -- "yes". However, the investment in property plant and equipment in this cycle has been very subdued. Corporations have been much more inclined to making acquisitions and to buying back their own stock [manipulating the price for the benefit of the top managment's stock option enhanced compensation packagess] than to spending just because they can.
Uncle Sam has no limit whatsoever on his abiltiy to borrow, if the Fed obligingly buys the new debt. That is called monetizing the debt..."
No argument from me on the existence of the mechanism, but when / if this detected and understoof, the game is over. Americans can be forced to accept dollars by legal tender laws. What power does Uncle Sam have over the rest of the world. [Comparable to the situation in the scene from Blazing Saddles where the Cleavon Little character holds off an angry mob by threatening himself with his own gun.]
The question that bothers me, is that the biggest borrowers - the government, Fanny Mae & Freddy Mac etc. can not declare bankrupcy - it will ruin the whole purpose. If they don't and we do not see a rolling wave of cascading bankrupcies we will exit the recession with even bigger debt than we entered it... and the problem may become even worse. Then what? Rely on the economic growth in a resource constraint world to repay those 30 trillion or so?...
What are they going to do? Invade us to steal the gold at Fort Knox?
What Enron Don fails to mention is that uppity foreign investors already have concerns about exactly this scenario and how it may play out.
I have already reduced my exposure to US dollar assets by getting rid of my American $2.00 bill. The recent willingness of the Chinese to overpay for oil properties indicates a desire to convert some portion of their dollar holdings into real assets. They can overpay now or watch their currency holdings depreciate later; the Chinese are smart spendthrifts. I earlier posted a link on the Asian Development Bank cautioning its member states in regard to the risks associated with overexposure to the US dollar.
At the moment the US is exporting dollars to Iraq, to the petro states and to China. RussFag reported here last week that Russia is overrun with dollars and they do not want any more.
When people do not want your money then you have to pay them more to take it. The rate of interest rises. This has a number of unpleasant effects. All of those folks with interest only variable rate mortgages suddenly find themselves unable to service their debt. Liquidity dries up and lenders become much more stringent. Enron Don suggests that at this point the state can just print more money. But that will make those dumb foreigners even more reluctant to hold dollars - unless you compensate them with even higher rates.
Ultimately, debt service consumes a greater proportion of every dollar you earn. Your discretionary income must therefore fall. As your consumption falls, producer incomes fall. Layoffs occur. Busineses fail. At the national level the same effect takes place. More of the nation's tax dollars are sent overseas to creditor nations. But us dumb folks out here cannot understand why we would want these strange pieces of paper which are declining in value day by day. You want us to trade our scarce energy resources for your worthless scrip? Why should we do that when we can export our oil to China and buy export goods that Americans can no longer afford?
If there is one consistent element that runs through every TOD thread it is the fact that a modern industrial economy cannot be quickly weaned from its diet of oil. Hirsch thinks 15 to 20 years will be required. But for that 15 to 20 year period how are you going to pay for the fuel that you need? How will you pay for it when your dollar only holds 25% of its present value? Worthless paper remains worthless paper even when you double, or quadruple, the quantity. And remember, during this same time frame you have significant numbers of the population attempting to retire on Social Security. Regan increased the Payroll Tax in order to ensure funding for these retirees. You have thrown that money away. When countries go to war they typically increase taxes to pay the costs. Yours is the first country to go to war and give the rich a generous tax break. Love that equality of opportunity.
Your government has lied to you in each of the past four budgets. You accepted the lies. A free and democratic people gets exactly the government that it deserves.
And if you don't like what you have read, please remember that I am just a dumb know-nothing foreigner. I do hope you enjoy your future.
The costs of extreme inflation are extreme, but the costs of another Great Depression are far greater. My guess is that the Fed and the Treasury will pick the lesser of two evils.
Forgive me if I missed this point somewhere in the thread. I often read the beginnings of stuff, have a thought I can't contain, and either reply too early in the thread, or skip quickly ahead to see if the issue was resolved.
So, I didn't see it on casual inspection.
Please relate to everybody here what the metaphor/allegory is behind The Wizard of Oz. Deflation, I believe, is the key. I read this analysis in an economics text years ago. I keep the text handy, so I can relate it if you've forgotten the details, or if this is some new theory. I don't mean to put you on the spot, I just have always been impressed by your take on things. I have always felt this story crucial to understanding American culture.
The "OZ" in "Wizard of Oz" refers to the abbreviation for an ounce of gold. The tin man was the worker, the straw man the farmer, and so on.
The point of it all is that monetary policy has been controversial for a long time. When more silver was minted into dollars (beginning I think in 1896) and gold was discovered and mined in large quantities in Alaska at the end of the nineteenth century, the money supply did indeed expand a lot and stimulate the economy . . . right up to the Panic of 1907, which was so bad that the Powers that Were decided, "Enough already with the Panics!" and created the Federal Reserve System in 1913.
Otherwise it depends - if it is the house you live in and you have not paid some ridiculous price for it I don't think it is worthed to worry that much. You can compare the price to rent and the mortgage - if your payment is twice (or more) as the rent for similar houses in your area, obviously there is something wrong in the picture.
If you have a second house and wait to profit from the housing bubble, I think it is about time to sell it. They just raised the interest rates yesterday, and made it pretty clear that the raises will continue.
If we get rampant Inflation you want to be in debt up to your eyeballs owing 1mill and a few weeks latter only having to pay back a few $1000 in real terms would be a good deal.
If we get deflation the opposite is true you want no debt and money in the bank.....
My feeling is we are going to get inflation as the goverment prints money in an attempt to "revive" a failing economy..
My current position is no debt atho i do have some inflation hedges in place.... If i was braver i would be borrowing a truck load of money....
Deflation - 20%
Stagflation (high IR & high inflation) - 60%
Hyperinflation - 20%
It would be also interesting to see what are the other people's bets. Of course timing is critical, but IMO it is a little more than a guesswork - could start tomorrow, could be in 20 years.
As all those scenarious are killing for the economy I think one should concentrate on preserving his/her wealth rather than profiting. My most probable scenarios are pro-inflational therefore I think invensting in things with internal value like real estate is always a good idea - but only if I don't go too deep in debt. Because even with only 20% probability the deflation scenario will have most devastaing results if you are short on cash. Otherwise if you are in that age a proper education would be the best investment IMO.
The thing is, both sides make sense. Damn you people.
And to go along with this thought, my favorite Darwin quote (which I also posted several days ago on a different thread), "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."
IBM is an example of a big, strong company that managed to adapt somewhat to change and has succeeded. They are now mainly a service-oriented company instead of a manufacturer.
That's why I invest more in mid-size companies that are not the major players in a particular sector. They are not necessarily stuck in their ways and don't rely mainly on their "brand" name to save the day. These companies are more "adaptable" to changing environments.
I think it is too early to digest who will fare better... small countries tend to be poor on natural resources and this may make them attach to bigger ones that can crash real hard.
If I were to choose a country to go to after PO, it would be some country with good mass transit, good social cohesion and a safety net, and pragmatic government. All scandinavian countries are good candidates IMO, but some countries in Eastern Europe are also not a bad choice.
Population and GDP per capita from CIA world factbook 2005
Sweden 9,001,774 $29,600
Norway 4,593,041 $42,400
Iceland 296,737 $34,600
And since there seem to be a nordic theme
Finland 5,223,442 $30,300
Denmark 5,432,335 $33,500
And to get something to compare with
Germany 82,431,390 $29,700
Uk 60,441,457 $30,900
USA 295,734,134 $41,800
Canada 33,098,932 $32,900
I regard the nordic countries to be small exept Iceland that is tiny. But most of them are fairly large in km2 and natural resources.
Peak Oil is not an election issue in Sweden but it seems to slowly be recognized as a problem. The current left wing government who do not do an especially good job has started to talk about peak oil but it is not a big election issue.
Representatives for my own party who is the biggest opposition party that for decades has been the major advocate of a car based society has recently started to state that there will be no shrinking of the substantial investments in railways but an increase in road investment by about a billion $ of which much will be used for maintainance. This is actually a quite ok policy change but it has been fairly silent since this isent a big election issue, yet...
Two weeks ago I got an opportunity to ask our party leader and next prime minister in Sweden, Fredrik Reifeldt, one public question on a large party meeting. I asked him if we would tax biomass fuels with more then sales tax when they start to overtake fossil fuels and thus displace those large tax incommes. He said no and added that the problem use to be how to subsidize them to not die out but that problem is passing and it would be dumb to hinder them with taxation.
The public hearings held by the current government seems to indicate that getting fossil fuels to be a neglible part of the transportation fuel use and replaced in manny technical uses would take about 20 years. This seems realistic to me and should more or less also apply to Finland and Norway. Two decades of repowering and better efficiency, lots of work but doable. Peak oil could locally be a solved problem about 10 years before my retirement, feels ok! Especially if we also build more nuclear/wind/hydro/combined heat and power electricity production capacity and attract some nice power hungry high tech industries who need a stable grid in a stable region.
Say, I wonder how much a ticket to Vilnius or Stockholm is these days?
I would prefer goals like finishing the planned and visionised railway uppgrades and new railway lines by 2025 instead of 2030 and ASAP establish several parallell distribution networks for different biofuels including biofule production. One mixable with gasolene, one mixable with diesel, biogas mixable with natural gas and plenty of charging outlets for plug-in hybrids and electrical cars is my favorite. Then the free market makes most of the work wich helps with the timing so the bulk of it is not made a few years early or late. And we must make the local free market work better by making our government more efficient and making it easier to start new companies.
I have not traveled much in the Baltic countries but I recognice a lot of the culture in Estonia.
Stagflation (high IR & high inflation) - 60%
Hyperinflation - 20%"
I would rate the prospect of a stagflationay environment a good bit lower. This scenario is the sweet spot amongst many bad outcomes in that it allows debts to be reduced to serviceable levels without outright defaults and with a currency that can still function as a medium of exchange. As leveraged as most of the world is, any deflation risks much higher credit defaults. Higher inflation risks a loss of faith in the currency.
BTW, if you are not highly leveraged, a deflation may be less of a problem than it might appear. If you receive fewer dollars, but the dollars you receive have the same purchasing power, [absent debt] have you actually lost anything?
I kind of expect Don Sailorman to chime in with a more benign scenario, but from my perspective, the cure to monetarism run amuk [spelling?] is not to be found in further monetary shenanigans.
But I don't really believe it, unfortunately. I trust the ability of governments to cheat savers, investors and whoever, that they are receiving a growth in their wealth, while it is exactly the opposite. They had almost a century to learn how to play this game, and I think now they know how to do it right.
The only argument against inflation you provide is the destabilisation of the currency. But tell me isn't this the very same thing that US has been doing for decades, and especially in recent years? I can bet all my (constantly melting) savings that the true real interest rate in every of the last 5 years was negative (not that official real IR, the other one - the real real one :). In spite of that, last time I checked the USD was alive and well... a little shabby, but alive. And they are going to prop it up even if they have to go to wars for that.
The Fed has never followed a strictly monetarist policy, and I see no likelihood whatsoever that it will do so in the future.
He is probably right, but we cannot do an experiment to rerun history, and so there is no way we can be sure that this prescription would have prevented the horrible disease.
I still expect history to rank Greenie right up there with John Law in terms of outcomes. Given that this is a peak oil forumn, I suspect that it may be hard to sort out precisely why things are going to / probably will turn out badly, ... but I hope Greenie lives long enough to get the "credit" he deserves [picture villagers with pitchforks and torches.]
Since I have already asked you if you are the real Jubal Harshaw, did you by any chance wisper in R.A. Heinlein's ear something about the concept of the purely mathematica; fiat money scheme [British usage -- nonpejorative] as set forth in Beyond this Horizon?
Before you beat up too much on Alan Greenspan, recall that he is one individual, and although he always voted last, his was only one vote. Furthermore, you have to give him credit for
- using his credibility to stop a financial panic before it got started in Oct. 1987
- jawboning against large and increasing federal deficits
- being influential in preventing domino effects during various crises over the past decade
- using all his influence to achieve some reform in the funding of Social security
- achieving a considerable increase in the transparancy of Fed actions
It is unfair and wrong to blame Greenspan for bad tax and spending policy by presidencts and Congress; that is fiscal policy, and his balliwick is monetary policy. The monetary policy of the Fed is constrained by the fiscal policy of the executive and legislative branches of government. Within these constraints, I think he did as well as anybody else could have done, and probably better than most anybody else could have done.Just as it is a huge mistake to blame everything on the president, it is a huge mistake to blame everything on the Chairman of the Fed.
What do I think? I think we should abolish the Fed and try monetarism, as Milton Friedman suggested. This might work. It might not, but it is worth a try: To my way of thinking the arguments against monetarism are not convincing.
Going back to precious metals as a basis for money is a dumb idea.
In my own science-fiction future history series, the unit of money is the Everclear, based on the value of one liter of 190 proof potable alcohol, and currency is essentially warehouse receipts for same. Talk about liquid assets;-)
Booze also tends to embolden and break down inhibitions be those inhibitions in regard to sex or enterpise. Drunks rush in where ... :-)
Your reference to the Rolling Stones" is to my limited mind a little more obscure. Are you planning to write space opera to supplement your income or perhaps sell used bicyles? [GRIN!]
Gold is indeed a barbarous [spelling?] relic, but it used to place limits on the central bankers ... and "yes" public politicians -- my apologies for invoking a term coined by Ferdinand Lundberg -- I'll try not to go there again.
My opinion and only my opinion is that Nixon killed the dollar, but thiry three {?] years later that reality is not widely recognized. I suppose without the circulation of gold coins, the gold exchange standard really didn't mean a lot to the man in the street.
Objectively, [and IMO} gold is for most part the ultimate excerse in wasted effort except that it may provide a store of value and a basis for rebuilding after what is likely to be the financial equivalent of a train wreck if / when the Fed starts to monetize anything and everything. Not to put words in your mouth, but you seem to believe this will occur.
BTW, there has been quite a pop in the metals market over the last few years including another jolt today. Any thoughts on whether we are looking at peak copper [produstion], silver [overall availability -- production other than as a by product peaked a long time ago] etc. or is this just another normal commodity cycle?
For what it is worth, my opinion is that gold is very much overpriced compared to silver and has been for a long time.
Copper is a commodity where there are so many uncertainties of both supply and demand that I would not dream of trying to own it in the form of stocks or commodity futures. However, having a few hundred pounds of copper tubing around might be handy in case one plans on going into the distilling business. Moonshining has a long tradition in the U.S., but of course Sailorman never ever positively does not condone or recommend or advocate anything illegal. And quote me on that;-)
Since the most important, and most lasting, "outcome" of John Law's "innovative" financial program was the founding of New Orleans, history has a quite favorable ranking of Mr. Law's efforts :-)
Perhaps the Source of the "Law of Unintended Consequences" :-P
A gratuitous remark for which I have no qualifiactions to make: New Orleans is still enevitable. The only questions is how much New Orleans.
I have been looking for an opportunity to complement you on your well though out advocacy of rail transport. Seems like a no brainer to me. Long haul freight screams for investment. Urban and suburban rail seems like an investment that is almost guaranteed to pay off in terms of future quality of life even if present value analysis [based on a static analysis] is not as sexy as long haul freight.
I checked around, and my house payment is about half of the rents around here. I live in energy-boom western Colorado. There's a major housing shortage here.
Certainly. If you can't afford the payments, or think you might not be able to, selling could be the right thing to do. For people who get in over their heads, home ownership destroys wealth, it doesn't build it. You'd be better off renting than defaulting.
If everyone defaults, maybe the bank will just walk away...but are you sure you can hold out until your neighbors are all in the same situation you are? What if you're the first in your neighborhood to be foreclosed on?
There's also the issue of where your house is. If you have a home in the city or along a commuter line, that would probably be a better situation than a exurban McMansion. Selling could at least give you the option of moving somewhere more sustainable.
I don't expect them to go bancrupt, because this would mean the death of the US financial system & economy for that matter. The government will keep pouring liquidity in them, there could be a virtual war between the millions of defaulted debtors and these agencies but they must hold on because the alternatives are harsh.
Indonesians Slam Exxon Mobil Takeover of Key Oil Field
Also FWIW, there is a podcast of Kevin Phillips interviewed by Grover Norquist on the "After Words" program here:
http://www.c-span.org/podcast/
Actually they make it easy to use the standard podcast tools, but don't give a straight mp3 link for download ... let's see if this works:
http://podcast.rbn.com/cspan/cspan/download/podaudio/arc_btv032506_4.mp3
I think Grover asks some pretty dumb questions (he's like "if the government cuts my taxes why should I care what else happens?") ... but maybe that's just me.
I am part way through the book, and so far so good. I think the subtitle of the book says it all: "The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century". Following in line with his previous books ("Wealth and Democracy" and "American Dynasty"), it is another searing indictment of the current state of our Union. To see him talk about peak oil, ASPO, Hubbert's Peak, etc. is another one of those signs that it is OK for this to be discussed in the open by those in power. I think it has similar ramifications as the NYT editorial that came out recently (it was discussed here at TOD a while back).
It seems like everyday I'm adding a book to my to-buy list from watching the show.
Barkely, Paul W.
Economic Growth and Environmental Decay: The Solution Becomes the Problem. Harcourt Brace Jovanovich 1972
I see on amazon.com this book is for sale used for $0.09, which just goes to show that price sometimes has nothing whatsoever to do with value. This is the book that I had my freshmen students read during the first two weeks of class; it is an elegant short readable and nonpolemic discussion of economic growth and how it is linked to environmental decay. Though published more than thirty years ago, I do not know of any other book that so clearly discusses these issues.
Hardin, Garett
EXPLORING NEW ETHICS FOR SURVIVAL: The Voyage of the Spaceship Beagle. Penguin Books 1973
This book contains the original "Tragedy of the Commons" as an appendix. I'll use the lazy man's way and quote from the back page: "This unusual and important book combines an ingenious appraisal of what man must do in order to survive on earth with the imaginary story of a spaceship's fantastic journey. Garrett Hardin sees the source of the current ecological crisis in the excessive demands that too many individuals make on limited resources. His unique approach covers population control, pollution control, agricultural reforms, and the problems of private property as it shows what far-reaching changes we must bring about in politics, economics, and ethics."
To this comment I'll add my own: If you want to understand how we got into the mess we are now in and what we need to do to deal with Peak Oil and related issues, this book is as important as any ever published. In other words, I put it on an equal basis with Jared Diamond's COLLAPSE and also with whichever book is your favorite.
The following citiation is to an updated version of the book
book I used in the seventies:
Daly, Herman E. (Editor) and Kenneth N. Townsend (Editor)
VALUING THE EARTH: Economics, Ecology, Ethics.
This book includes some of the most cited articles in the field; you do not have to be an economist to understand any of them, but for a couple of articles some classes in economics are a big help.
In addition I assigned readings from the following books,
Cook, Earl
MAN, ENERGY, SOCIETY
Keynes, John Maynard
ESSAYS IN PERSUASION
This book contains the famous "Economic Possibilities for our Grandchildren" essay which explains that economic growth is merely a temporary means needed to solve the problem of scarcity, and that by the year 2030 prosperous societies should have no further need of economic growth to provide decent lives for all.
Sahlins, Marshall
STONE AGE ECONOMICS: The Original Affluent Society
The first part of this book is the best, wherein anthropologist Sahlins makes the case that for many stone age societies there was abundant food and leisure. People felt no economic "wants" beyond the most basic things because they were nomads and could accumulate no more than they could carry in their hands--including babies and toddlers.
Some anthropologists have questioned Sahlin's conclusions, and my own are that while many hunting and gathering societies did approximate the Garden of Eden story that Sahlins tells, some others did not. Because nobody was taking notes thirty thousand years ago, nobody really knows, but early contacts with stone-age tribes such as the San (also known by other names) suggests that Sahlins probably was essentially correct at least in a large number of cases.
BTW, Environmental Economics was the most fun and the most life-transforming class I ever taught, and despite a long reading list, essay tests and fairly hard grading, almost nobody flunked or dropped out. Students in the seventies generally got very excited and stimulated by a discussion of these issues, and some went on to careers as environmental chemists or limnologists.
I wonder, how many TOD readers have ever taken a class in environmental economics? And what impact did the class have on you?
I took a lot of environmental-type classes in the 1970s and early '80s at the University of Colorado.
I read a lot of stuff, but the writers I remember most are Hardin, Amory Lovins and Wendell Berry, the Kentucky farmer-poet who actually wrote some pretty interesting things about economics. And, actually, I think Edward Abbey had some good ideas about industrial versus environmental economics.
I've lived all my life on a small farm, so I've constantly thought about the environment and economics around me. To not do so would mean bankruptcy.
I did not see Roy Rappaport's "Pigs for the Ancestors", which was a big one in the '70's. Fascinating too.
-pop
BTW, my copy of MAN, ENERGY, SOCIETY by Earl Cook is a collector's item now, it seems: Some dude in UK wants $177.50 or something like that for the only one for sale at the great Amazon. However, I would not sell my copy for three times that amount, because it has good stuff and references in it that I've been able to find nowhere else. Because Cook was a Texas A & M prof, my guess is that they have one or more copies in their library. It is an example of a brilliant book that never found a market, because the publisher, W.H. Freeman & Co. gambled in the mid seventies that engergy would be a Big University Topic--and they lost.
Please read the two linked articles below. Why should I be depressed alone? How does nuclear war affect peak?
http://www.foreignaffairs.org/20060301faessay85204-p0/keir-a-lieber-daryl-g-press/the-rise-of-u-s-nuclear-primacy.html
http://www.foreignaffairs.org/20060301faessay85204-p0/keir-a-lieber-daryl-g-press/the-rise-of-u-s-nuclear-primacy.html
http://news.ft.com/cms/s/7e478c3e-bec0-11da-b10f-0000779e2340.html
I can't copy them, because the ends are truncated. Try reposting with auto format on.
http://www.foreignaffairs.org/20060301faessay85204/keir-a-lieber-daryl-g-press/the-rise-of-u-s-nucle ar-primacy.html
http://news.ft.com/cms/s/7e478c3e-bec0-11da-b10f-0000779e2340.html
They work in preview -- which is what I should have checked.
Gee, maybe nuclear winter would offset global warming.
Even if the US first strike is overwhelming, we do not know where all the Russian mobile missile launchers are, nor can it be gauranteed that we will be able to track the movement of all Russian missile subs at all times. Just one Russian missile sub could wipe out most of the East Coast urban areas.
If you will recall, sometime in the 1990s the Russians almost went to their version of Defcon 1 when the Norwegians tested a missile and forgot to notify the Russians that they were doing so.
Then of course, there is the question of these mythical Russian 'suitcase nukes' which may or may not exist; but if I had to bet on it, I'd bet that they do.
No, it is insanity to think that the US could start a nuclear war and not suffer tens of millions of casualties and untold physical destruction. Yet, it is even more scary to think that there are people in the government who entertain such possibilities.
Nuclear weapons need constant service to remain operational. The rockets the guidance everything. The warheads are especially dependent. When I got out of the service in 2001 the last threat brief I saw for russian nukes said as many as 90% were not usable due to lack of preventive maintenence. Human intelligence comes from...Humans...so this number could easily be flawed. However I suspect its probably fairly accurate if not worse. Russia never funded the military properly and mass produced the cheapest possible weapons.
Second I think a lot of $400 hammers and $250 toilet seats bought more starwars gear than the public will ever know. I bet money we know where ALL russia's warheads are simply because the fear of a rogue general selling a nuke to the terrorists is so high. Lots of nerds in little rooms translating and examining pictures.
Third in the off chance they get a few of the ground (their birds are not pre-fueled the have to be put on alert fueled and primed) we do have limited missile defense.
I don't know: I still don't find what you say very reassuring re nuclear war with the Rooskies. If what you say is true, that 90% of Russian nuclear warheads are not operable, that still leaves 10%. And 10% of, what, 2,000 warhead (?) is 200. Maybe you don't think so, but 200 nuclear warheads is something I have a lot of respect for.
Furthermore, I very seriously doubt we know where all of Russia's warheads are. (It's not even clear that the Russia I don't have a lot of confidence that we know all that much at all.
And as far as our Star Wars missile defense is concerned, my only comment is: You gotta be joking!
I really don't see how you can be so cavalier about a nuclear exchange with Russia.
errata:
A chunk of my post somehow got deleted. Sorry. It should read as follows:
I don't know: I still don't find what you say very reassuring re nuclear war with the Rooskies. If what you say is true, that 90% of Russian nuclear warheads are not operable, that still leaves 10%. And 10% of, what, 2,000 warhead (?) is 200. Maybe you don't think so, but 200 nuclear warheads is something I have a lot of respect for.
Furthermore, I very seriously doubt we know where all of Russia's warheads are. (It's not even clear that the Russians do.) Judging by the great intel job we did on Iraq's WMDs, and the fact that we were almost totally blindsided by Pakistan's nuclear program, I don't have a hell of lot of confidence that we know all that much at all.
And as far as our Star Wars missile defense is concerned, my only comment is: You gotta be joking!
I really don't see how you can be so cavalier about a nuclear exchange with Russia.
Ultimately it does not matter. You can win the PO battle that is doable, we can cure HIV and cancer. We can create cold fusion. New technology is always possible. To uninvent is impossible.... So don't worry there is nothing we can do about nukes devote time and energy to something else. If nukes do go off near you JUMP! the archeologists will see your shadow high on the wall and say "ancient man could fly" I worry about all sorts of things but nuclear holocaust is not one. High ranking military guys on all sides control them and thaey are selected for such positions on stability. They have kids nobody wants a nuclear war. Anyway the real threat is a lost or misplaced soviet nuke being sold to terrorist and set off in chicago or san fran. But nothing you can do.....
Another consideration is this: there are probably a number of countries or other organisations who have already thought about such an eventuality.
Knowing that they cannot defend against or massively respond "in kind" to such a strike, these folks may have thought of some fairly effective assymetrical responses.
There are oilfields and power stations and population centers and a whole variety of important targets to hit. There are ways to strike many smaller targets and have a big impact.
Again, the notion of a massive "nucular" strike seems like the sort of obscenity that only a mad Apocolyptophile would consider -- on its own merits. But add to this the possibility of blowback --ecological and assymetrical warfare -- and it seems like we would just retire that idea permanently.
Then again, I really don't know what the ICBM situation of Pakistan. I'm guessing they don't have missiles that could reach us. A more likely scenario is that while this is going down, India and Pakistan say whatev and take out each other.
Meanwhile, Australia is down there like, "WTF, Mate?"
Never underestimate the power of pure spite as a reason for going to war.
History is replete with examples of countries going to war for all sorts of stupid and petty reasons.
And never overestimate the power of rationality as a reason for not going to war. When a nation is gripped by war fever, logic and common sense has little if any effect.
This is why I think one of the greatest miracles modern times is that during the 40+ years of the Cold War the US and USSR managed not to nuke each other.
I loved the "f**king kangaroos!".
http://f0rked.com/flash/v=endofworld
-pop
The US has Pre-emptive Strike as its defense policy. As a sovereign nation they have no reason to disclose the conditions under which they implement this policy.
Basically the US has declared its right to attack any nation, at any time, on any whim of its own choosing.
This is an example of democratic friendship. Of course if they happen to occupy your country and you decide to fight back then you are in really deep doodoo. And if the whole mis-adventure goes against them, they are probably going to blame it all on your former head of state.
The Marx Brothers took the same material and worked into a very funny movie.
the US not only declared it, it did it.
-pop
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/29/AR2006032902057.html
No mention in the above of the need to present this initiative to Congress. Probaby didn't trust them.
on the dollars expected fall
http://www.forbes.com/business/feeds/afx/2006/03/28/afx2625991.html
Boycotts, blogs and apocalyptic jihad
http://www.janes.com/security/international_security/news/jiaa/jiaa060328_1_n.shtml
and honestly , so glad we have no vegan discussion tonite ...
http://www.adnki.com/index_2Level_English.php?cat=Terrorism&loid=8.0.281390501&par=
"Riyadh, 29 March (AKI) - Saudi security forces have thwarted a terrorist attack on Saudi Arabia's largest oil refinery Abqaiq, the second in two months, according to media reports. The Kuwaiti news agency KUNA and the Iraqi Radio Nawa report that police discovered two car bombs in the area. Local daily al-Riyadh reports that Saudi police on Tuesday carried out house searches in the al-Mantar area of Abqaib, where some employees of Saudi oil giant Aramco live, arms and explosive were discovered in one of the homes and one man was arrested. Reports say that the vehicles to be used in the attack bore the company logo."
I keep a calendar, neatly laided out on an excel spreadsheet. Dates. Price of oil. Events. I make notes. It's pretty simple.
East Coast farewell tour starts tomorrow. The Fat Lady (TFL) is more than willing to meet TDM posters in the Atlanta area the first week of April. TFL has had a very good first quarter investing in energy stocks, and will buy lunch for TOD folk who can carry on reasonably intelligent conversations. E-Mail me at JBAndrsn@yahoo.com.
http://www.donalfagan.com/html/pellet_stove.html
The little mat in front of the stove is the cat's spot for after my wife shoos him off the couch.
For the reason (pellet availability) you bring up at your link's end, we're going for good 'ol fashioned wood. Our current front-runner for a wood heat is a masonry stove. For energy efficient homes, they make a lot of sense, especially if one has a woodlot on site.
IMHO, corn stoves are strong evidence for misplaced subsidies.
We're also replacing the NG furnace with an Alaska wood pellet/rice coal furnace. We should be able to use the same ductwork. If that works out well, we'll sell the St. Croix and get the floor space back. Then the cat can sit by a floor grate.
A big masonry hearth for cold climates is an old idea worth revisiting. You can make it part of a trombe wall, and let the sun heat it up, too.
They CANNOT reinstitute the draft here. The armed forces are having a heck of problem recruiting. Solution: double digit unemployment.
Inflation is inevitable at some point, but so is drastically reduced economic activity and high unemployment. This is when things start to get really ugly. In Germany things occurred in a different order: first there was runaway inflation and economic collapse, then came the "savior" who through war preparations got their (and our -- DS is right about that) economy going again. Our "saviors" have launched war in good (relatively) times. But they cannot continue it without bad times, which I'm sure they'll get. Our real suffering has yet to commence I'm afraid.
as for future trends, which all readers here are familiar with Fasharaki said:
We've been telling other countries they should build railroads, not highways, for decades. Meanwhile, we dig up our own train tracks.