Monday, February 27, 2012

The Energy Debate (Patzek/Hofmeister)

I watched this debate with interest.

Nothing we have not heard before... but skip to about 45.33 minutes into the video, and listen to Hofmeister's Federal power grab necessary to "solve" the problem.

I am just sick listening to that.

Thanks John, we don't have enough trouble with our Federal Government  as it is... we need to give them ANOTHER agency and more authority so that they can "help" us not inconvenience The Powers That Be.

Now Drop f%$^^ing dead.

Sunday, February 26, 2012

Crime and (Tax) Punishment

Violent crime has been declining, in absolute terms, in the U.S. for over 20 years. I emphasize "absolute terms" because that this is happening during a time when the population increased by 25%. Ergo, the crime rate has been plunging.

Given that, WTF is up with the staggering increase in police budgets? Armored personal carriers? SWAT teams? Canine units? Helicopters, GPS tracking, drones... what's next? Submarines?

The police will try to argue that it was something they did, some policing tactic or strategy... and of course it was no such thing (feel free to correct me with data). Technology forced changes in behavior, not the police.

The police will argue that we need to keep beefing up those budgets to protect "property"... or until ALL violence is ended... ROFL!!

Ever report a property crime to the police? In no particular hurry an officer might come to you and issue you a police report... often, they won't even do that. You will have to go to the police station to fill out a report that is really a formality for your insurance company. When they do come, there is no investigation or finger print collection (unless it is burglary, et al).

If anybody did a time/motion study of "law enforcement" they will find that essentially all of the payroll resources are spent on traffic issues. Not that this is not important, it is, but the increase in police budgets is overwhelming and in many localities far too heavy handed. A perfect example is the use of 911 for domestic arguments absent violence as the number 1 source of all 911 calls. (What's that all about?)

The federal government is using grants to local law enforcement as a means to stimulate the economy. The unintended consequences of that politically expedient strategy should be plain to see.


For the homesteader in you:

This is a Surge brand belly milker milking my Jersey, Naomi. A milk cow is the most economically and nutritionally productive component on a family farm/homestead. After hand milking, a milker is just an unbelievable convenience:

I just hung these hams today after 4 weeks in salt. Because they had been completely skinned, 4 weeks should be enough. With skin on, 6 to 7 weeks is more like it. After the salt, just wash them good with a hose and hang for a couple days "naked" (if it is still cold enough that flies are not apparent) and then cover with a cheese cloth bag (or you can make a bag out of an old t-shirt or pillow case) and leave for 4 to 6 more weeks in a dry, cool, dark place. My neighbor likes to leave his for 1 year... I don't have the patience:

Thursday, February 23, 2012

The U.S. (and much of the West) Caught Between a Rock and a Hard Place

The U.S. Federal Reserve Bank initiated a temporary "zero interest rate policy" ("ZIRP") nearly 4 years ago. Last quarter, the Fed announced that they would keep rates low until 2014. Not to worry, in 2013  the Fed will announce ZIRP until 2015, and so on, and so on, for now on.

The Fed will never tighten monetary policy again (well, not in my working lifetime).

In dropping rates to essentially zero, and twisting and shouting (and printing and buying) on the long end of the curve, the Fed has destroyed the returns of savers. Not just dear old Mom & Dad... every pension in the system buys bonds - and they are getting zippity-do-dah for a return. But the Federal Government's fiscal policy of deficit spending over a TRILLION$ per year was done in concert with the Fed's ZIRP, and now they are stuck. If the Fed tries to raise rates, the stock market will get killed, and if the long end of the bond curve responds upward the Fed will have caused the U.S. Treasury into cardiac arrest. The Government cannot afford a 200 basis point increase in interest rates on the debt they have. For the sake of argument, et us pretend that all of the U.S. debt was floating rate... On $15 Trillion, a 200 basis point increase would mean a $300 PER YEAR increase in the deficit for interest alone - and that's on top of 2011's $454B in interest expense.

Got that?

Now that's not how it would work out... because the U.S. government's debt is NOT floating rate... what would happen is the bond market would get killed, the stock market would get killed, the banking system would get killed, the pension system gets killed either way...

So the Fed ain't tightening monetary policy, ever again. And that is not hyperbole. Because the Fed does not survive the Keynesian endgame. Somebody else, the market, the central planners, the whoever... might tighten monetary policy... but it won't be the Fed.

Oil Prices

Oil prices, even WTI, set a record for any January - EVER. Unless something drastic happens, average Oil prices for February, even in the pipeline screwed up WTI, will set a new record. While WTI is $108, Brent is over $124 per barrel... in Euro's, the price of Oil has never been higher.

It would appear, given Oil and Gold, that the world's central banks have been able to overwhelm deflation in credit... though the bond market has not confirmed that.

Peak Oil is about to be back in the media spotlight... after all, if 2008 was just a bubble.... bubbles do not reflate that fast.

Wednesday, February 22, 2012

When "Education" became a Liability

The education/student loan time bomb I have mentioned over the years is coming closer and closer to actual detonation.

A fellow I met here on the blog sent me this link today.

I am BEYOND thrilled that this is coming into the national discussion. Paying $85,000 (for a state university) or $200,000 (for a private university) for a degree that could have been had for free at the public library and the internet... or for a couple hundred $$ in used books.

Counseling? My 88 year old mother would do it for free... and far better than the kids coming out of school.

Early childhood education? Are you freaking kidding me? "Teaching" kindergarten does not require 4 years of training. 4 years of medication, maybe... but not 4 years of overpriced "training".

You paid $80,000 to $200,000 for "training" in Social Work? Art Appreciation? Women's Studies? WTF!!!!!!????? Are you rich? If you not, you have rocks in your head.

Anybody really think that half of the private colleges in America will even be in business in 20 years? The same thing that happened to the banks and mortgage companies during the unwind of the housing bubble will happen to these schools during the unwind of the "education" (snicker) bubble. Then, to add insult to injury, the American energy situation is going to drive stakes through the heart of whatever it was you planned to do for a living once you get finished being taken, sorry... "educated"... (if your folks have $200k to blow on a history degree, ask them for a $200k house and go get a library card. Not needing to make the mortgage every month will leave you lots of time to indulge in intellectual pursuits).

Why, in the 21st Century, does anyone need to travel anywhere to hear a lecture? To submit papers, take tests, exchange ideas? Really?!.. The cost/benefit analysis has failed the customer/student. So much of this needs to be "thought anew", but don't count on any new thinking coming out of the university-industrial complex.

Better yet, think for yourself. If you are going to pay $100k plus for an education, make you sure you get some training in marketable skills. Math, Science, Engineering, Accounting, Technology, etc... you know, the STEM fields. Wasting time (economically speaking) is ok for the wealthy, but if you are going to college to "move the peanut forward" (economically speaking) wasting precious time and resources on feel good affirmation will only dig the hole you are trying to climb out of a little deeper.

Tuesday, February 21, 2012

Peak Oil Revisited

I remember when I became "Peak Oil" aware. It was 2004, and somehow I had come into possession of Ken Deffeyes book "Hubbert's Peak" (actually, it was a few years before that... but I don't think it was called "Peak Oil, then). A couple years later he followed with "Beyond Oil". I began telling the story to clients and prospects at my stock brokerage business. Some guys started a blog called "The Oil Drum". I started a blog called "Mentatt" (my buddy, the Mad Scientist thought it was slang for "Meant That"... actually, it came from Frank Herbert's sci-fi classic "Dune), which I later renamed The American Energy Crisis.

Back then, "Peaknics" were enthused about the West's coming economic disaster. It is ever so much fun to brow beat the establishment while you still have a job, equity in your home, and a career with a future. 5 years of economic stagnation, lousy employment prospects, and flat world wide oil production (and declining oil consumption in the OECD)... and its just not that much fun anymore. The "Peaknics" faded. "The Tea Party" and "Occupy" took over... though neither one really knew what was at the bottom, or the root cause, of their anger: Oil (and credit).

In 2005 you were smart. A thinker with a vision. Now? Gil Scot-Heron's "The Revolution will not be Televised" comes to mind. For the already established that did not lose their jobs or businesses, so far this has been no big deal... for the graduating classes (high school, college, grad) since 2008, real estate agents, stock brokers and investment bankers, banks, mortgage companies, retail mall operators, etc... this has been an unmitigated disaster (and granted... this has been more about credit contraction than Oil... but that train is rolling down the tracks).

And you ain't seen nothing yet.

The first 5 years of this "adjustment period" were merely a pain in the @$$ in the OECD and industrialized West. The next 10 or 15 years or so is where the rubber meets the road. So far the decline rate for Oil consumption in the OECD has only been 2% per year or so... what will the economy look like with a 4/6/8/10% annual decline rate?

2% is slow-drip-water-torture. 10% is light-your-hair-on-fire-and-run-around-the-room torture.

At some point, Oil imports into the OECD are going to see those kinds of declines... and not that far off.

And blaming politicians for not "doing something" about this? Pointless. Energy descent is going to happen... "conservation" (lol!!) is going to happen (one way or another)... and the economic consequences are going to happen... to Democrats and Republicans alike. I wouldn't put much stock in the folks in government being much help to The People. They will be too busy seeing to themselves.


Our farm seems to be working out well. Here are some ideas for any homesteaders out there:

This was our fall and winter chicken run. It is about 1/8 of an acre. This is more than enough for a family of 5 for sweet corn (not corn flour corn... we grow that on the other side of the farm), beans, and squash (which we grow together). As you can see, the chickens have eaten every blade of grass down to the dirt, and then scratched up all of the roots. They have cleared the ground of weed seeds, too. Their manure is too hot (in Nitrogen) for most stuff, but not corn. Corn LOVES chicken manure. We plant the beens and squash about 4 to 6 weeks after the corn. This is my 4th year moving the chickens around to where I plan to plant my sweet corn.

180 degrees and up the hill is our "goat run". This is "reclaimed" front yard, about 1 acre. This area can support about 8 goats 7 months per year. In winter I feed them round-bale hay (about 1 per month - $22) and a little corn (for about 5 months). We eat a few goats per year and sell a few. They cover their feed expense, and save me from having to mow this area. Besides, I love to eat cabrito/chevon (goat meat) and soup.

In the winter, I keep the horses in this corral. It is about an acre in size. They eat 3 round bales per month (1500 pounds each) for 5 months. 10 to 12 tons of horse manure (the urine is the primary nitrogen source) on an acre leaves the ground plenty fertile. The horses get moved to the pastures and I plant the lower half (as it slopes I want to avoid erosion. I throw down some clover seed on the top half to hold the soil and keep the bees happy) of the corral with corn/pumpkins/peas/something or other. This year it will be field corn for corn flour.

Here in Tennessee garlic and onions are planted in the fall. Garlic did very well this year, onions were not great (but enough). Just in case, I planted some onion sets today. When I harvest the garlic in mid-Spring, the bed will be planted with sweet bell peppers. The beds to the right are covered in clear plastic because they are "baking" too-fresh manure for this spring. If you keep it wet and covered the manure will compost completely in about 2 or 3 months, rather than a full year.

This is the winter hog-yard, between 1/3 and 1/2 acre. They clear the area of everything, then I move them to the back and plant this with potatoes, both sweet and white. Also melons, pumpkins and sunflowers, and peas. Whatever we don't harvest won't go to waste... I turn the hogs back in here in the late fall. They find whatever potatoes we missed (and its a bunch), and are delighted to  cleanup rotten mellons & pumpkins right down to the roots. We slaughter 3 hogs per year, and make our own sausage (breakfast and Italian) and bacon. (My kids thought we were kidding when we told them the stuff they got at IHOP was "bacon" on a recent trip to Florida).

We will plant over an acre of "garden" beside the raised bed vegetable garden. Gardening is the easy part... preserving it all is a lot of work and not as much fun. We dry some, freeze some, and can some.

Monday, February 20, 2012


I have been noodling the Iran/Israel thing. I cannot envision that any Israeli prime minister would be willing to chance a nuclear armed Iran. I read with interest an article today in which the writer asserted that no Israeli prime minister wants to go down in history as the guy under whose watch Iran became a nuclear power. I think a valid point. Ergo, I think Israel will, at some point in the relatively near future, attack Iran. After all, what would be the point of Israel, "a safe place for Jews", to exist if it were to allow a neighbor sworn to destroy it a nuclear weapon? Rather than "a safe place for Jews" Israel would become a concentration point for their annihilation. This cannot be acceptable to Israel or the Diaspora.

I do not think the U.S. will be involved... but I do think that the Israelis know that the U.S. cannot afford to have an Israeli attack result in Gulf shipping to be shut down or for the Israelis to suffer a strategic defeat. So, even though I don't think BHO wants anything to do with an Iran confrontation before the election... I think the Israeli's know they hold the cards. The U.S. can't stop Israel, and the U.S. can't let Israel fail.  When Israel acts, the U.S. will be forced to act.

I am not talking about what I want to happen or hope will happen... I am talking about what I think is most likely TO happen (I said "most likely"- not "definitely"). I also have no idea about the soundness of this adventure, the odds of success, the costs, or the unintended consequences. My sense is that much of this is unknowable, but it seems that the chances for an interruption in Oil supplies out of the region are very high. And I think that this is going to happen.

We are all in the Risk Management business now.

Sunday, February 19, 2012


While this winter was extremely mild, last year was a pain in the backside... 2 ice storms knocked out electric and heat for several days each time.

We have half a dozen kerosene lamps like this:

And a single 10,000 BTU kerosene radiant space heater kept the entire house more than comfortable (its a small house, and this is Tennessee - not New England.

For the lamps, get wick holders sized for 1" to 1.5" wicks. The wider the wick, the more light (and heat... don't underestimate the heat generated by those lamps. One lamp would keep a large bedroom very comfortable). I estimate that 1 gallon of Kerosene will provide 70 to 100 hours of light. We have 6 lamps and another 6 hurricane lanterns for outside and barn use (these have .75" wicks... the widest I have found. Get the big reservoir lanterns by Dietz. Don't bother with the cheap .375" wick jobbies you see in the camping section of the big box stores... not worth a good fart).

Candles just don't cut it.

We also have Coleman propane lanterns and 10' conversion hoses so we can hook them to 5 gallon propane tanks. The Amish folks I buy my livestock feed from use these in their house. They have a home built lamp table that has the propane tank built into it and the table is on wheels so it can be rolled to where the light is needed. I prefer the kerosene lamps... but they are not as bright as the propane lamps.

I keep 2, 55 gallon drums filled with Kerosene on hand, plus 4, 5 gallon containers. The drums are plastic, not metal. I do not worry about expansion and contraction caused by temperature swings when they are full.  Also, metal will corrode from the outside, and one day your kerosene will be all over the floor of your storage area. We rotate but always keep a full inventory. Here in Tennessee and with a small house, that would get us through a heating season and a year's lighting. We learned a hard lesson during Hurricane Katrina... Tennessee is that the end of the pipeline, and our county literally ran out of fuel for a couple weeks with diesel being the biggest problem.  I also installed an additional 1,000 gallon propane tank that just sits there as backup, and a fuel tank to hold some diesel for the tractor (and truck in an emergency).

Saturday, February 18, 2012

"For Women Under 30, Most Births Occur Outside Marriage"

"For Women Under 30, Most Births Occur Outside Marriage".

A fascinating statistic, even if the only thing really and truly accurate about the article IS the title.

Still, it is useful for discussion purposes... especially when taking on the Childless-Elitist-Liberals that are exiting the World, stage left, for their own poor reproductive history.

Once largely limited to poor women and minorities, motherhood without marriage has settled deeply into middle America. The fastest growth in the last two decades has occurred among white women in their 20s who have some college education but no four-year degree, according to Child Trends, a Washington research group that analyzed government data.
Well, the big lie here is the lie of omission. Roughly 1/3 of women college graduates leave their childbearing years childless, and that unfortunate statistic amplifies the relative incidence in the non-college grad truncate. You see, "fastest growth" was not in absolute births, but fastest growing percentage... well, if the other (college grad) truncate (there are only 2 here.... college grad women and non-college grad women) birthrate declines... the other truncate could quite possibly have had fewer births than their historical average, and still be the "faster growing". Of course, that's was not explained nor even mentioned... after all this is the NYT and they are playing to their audience - highly educated, but for the most part innumerate, middle aged and just plain aged Liberals with either 0 or 1 child (the binary ode of Liberalism, and the equation that assures their end in the very near future) (and when I say these people are "innumerate" I am not trying to be insulting nor am I alleging these people cannot run a calculator or even perform some simple algebra... they can. What they do not seem to be able to do is make the connections between the numbers... if they could, they would have seen the silliness of the assertions and conclusions (and confusions) of this article from a mile away).

Among mothers of all ages, a majority — 59 percent in 2009 — are married when they have children. But the surge of births outside marriage among younger women — nearly two-thirds of children in the United States are born to mothers under 30 — is both a symbol of the transforming family and a hint of coming generational change.
While it is fair to say that a generational change is under way, I don't think the article emphasizes the critical point - 2/3 of of children are born to mother's under 30 - and the data point they really don't want to stir up: That 90% of children are born to women 34 and younger. What is up with the 30 cut off? 34 is  far better for our purposes here, because the births after that are the 3rd and 4th births of mommy-mommies, or the first births of the petri-dish mommies... and they are only 10% of births.

This, too, is disingenuous: "Among mothers of all ages, a majority — 59 percent in 2009 — are married when they have children." If just 10% of women who have a child out of wedlock before 30 subsequently marry and have a child or children... see why there are 3 kinds of lies? Mine, yours, and statistics?

Here's where it gets good:

One group still largely resists the trend: college graduates, who overwhelmingly marry before having children. That is turning family structure into a new class divide, with the economic and social rewards of marriage increasingly reserved for people with the most education.
Yes, college graduates overwhelming marry before having their only child... when they have children (child), which is only 2/3 of the time (it is over 90% for the other truncate)... and here is where it gets rich... Educated men have eschewed marrying women that cannot make a living on their own because of the penalties they have suffered at the hands of our outrageous divorce laws. A male professional making $300k per year might have taken on a woman of lower social and educational standing in generations past... no more. These men won't even marry a woman with student loans! Nope, there are a great many fewer suckers out there for the divorce bar to sink its teeth into... educated men now prefer to put off marriage, marrying only other professionals/educated women that can make a living... and even then doing so only with the benefit of a 95 page pre-nuptial agreement... and the great unintended consequence of this is that the women in the non-grad truncate, who still wish to have children, now have even less leverage than they had when marriage was "unfair" to women prior to the Feminist lobby. But they still have children.

And back to the 1/3 of college grads leaving their childbearing years childless... this is likely not by choice... fertility goes down like a rock in a pond for women in their early 30's... right about the time these women have established a career after under grad and grad school. In fact, if one wanted their family line to end with their daughters, there is no better strategy (short of murder) than to send them off to college.

“Marriage has become a luxury good,” said Frank Furstenberg, a sociologist at the University of Pennsylvania.

Sorry, Frank... marriage is fast becoming an obsolete good, not a luxury good, and the only guys who are willing to step into the maw are those with a bride that can make a living.

The shift is affecting children’s lives. Researchers have consistently found that children born outside marriage face elevated risks of falling into poverty, failing in school or suffering emotional and behavioral problems.

Wow! You don't say!  This comes squarely under the "No Shit, Sherlock" rubric. But who cares about children? This is ALL about empowering women!

The forces rearranging the family are as diverse as globalization and the pill. Liberal analysts argue that shrinking paychecks have thinned the ranks of marriageable men, while conservatives often say that the sexual revolution reduced the incentive to wed and that safety net programs discourage marriage.
Liberal analysts argued that? Where, exactly? No doubt some Feminazi suffering from Borderline Personality Disorder (but that's from the department of redundancy department, isn't it?).  I would have had a field day with that assertion. Much as I despise the Right, they got it goin' on here.

Here in Lorain, a blue-collar town west of Cleveland where the decline of the married two-parent family has been especially steep, dozens of interviews with young parents suggest that both sides have a point. 
Over the past generation, Lorain lost most of two steel mills, a shipyard and a Ford factory, diminishing the supply of jobs that let blue-collar workers raise middle-class families. More women went to work, making marriage less of a financial necessity for them. Living together became routine, and single motherhood lost the stigma that once sent couples rushing to the altar. Women here often describe marriage as a sign of having arrived rather than a way to get there. 
Meanwhile, children happen. 
Amber Strader, 27, was in an on-and-off relationship with a clerk at Sears a few years ago when she found herself pregnant. A former nursing student who now tends bar, Ms. Strader said her boyfriend was so dependent that she had to buy his cigarettes. Marrying him never entered her mind. “It was like living with another kid,” she said. 
When a second child, with a new boyfriend, followed three years later — her birth control failed, she said — her boyfriend, a part-time house painter, was reluctant to wed.
Other than the "Meanwhile, children happen" thing this was pretty much a waste of copy space and designed to take the reader's mind of the silly assertion above that Liberal's made about thinning paychecks... except one thing. The last line, about how her boy-friend was reluctant to wed.

Reluctant? If men are not BEATEN to the alter, they do not go. And even then, the bride ain't going to be a bride unless she has an education and can make a living. All men knows what happens to men in divorce court when the wife has no marketable skills. Courts don't impoverish them... they impoverish the man. All markets react rationally over time... and the market for grooms reacted rationally.

 Ms. Strader likes the idea of marriage; she keeps her parents’ wedding photo on her kitchen wall and says her boyfriend is a good father. But for now marriage is beyond her reach.
“I’d like to do it, but I just don’t see it happening right now,” she said. “Most of my friends say it’s just a piece of paper, and it doesn’t work out anyway.”
Doesn't work out anyway? Really? Why would it? Absent a pre-nup, women married to men of wealth have overwhelming incentive to get paid and not fulfill obligations - there simply is no other gig like this in the entire, freaking world. And if the groom ain't making enough? No reason to stay with this bum, he let me down. Almost 75% of divorce filings are files by women because of the disastrous incentives of our peculiar family laws.

The recent rise in single motherhood has set off few alarms, unlike in past eras. When Daniel Patrick Moynihan, then a top Labor Department official and later a United States senator from New York, reported in 1965 that a quarter of black children were born outside marriage — and warned of a “tangle of pathology” — he set off a bitter debate.

 And boy was ol' Danny Boy Moynihan right...

A Whimper?

Peak Oil consumption appears to be here for the West. Jeffrey Brown should take a bow (while I cue the theme from "The Godfather").

That this has happened before any measurable decline in the production (looks like 6 years of flat production to me) in Crude & Condensate (the stuff we use for transportation fuels) leaves me wondering: What happens when production decline takes place?

A rate of change of 2 or 3% is what we have been experiencing... what might 6% to 8% feel like?  Somewhat different, I should imagine. Even the present 2% or 3% will compromise the Financial System over time.

I had this to say in my November 28, 2007 Post:

An Apocalypse NOT!

I get a decent amount of email from the “doom and gloom” folks asking me when I think the “collapse” takes place. Collapse? What collapse?

The decline in oil availability will be a slow, grinding process (in my opinion) that will not fit nicely in a 2 hour movie, 3 minute pop hit, or 15 second political sound bite mindset. I hope I can disabuse the doomers that visit here that they need some kind of bomb shelter. Although I fully appreciate your point of view, my commentary is directed toward how one might direct the investments that they have worked so hard for. I sincerely believe that the U.S. oil supply situation will have profound effects on our financial and real estate markets and currency over the next 5 years, but I do not think this will happen on a Tuesday afternoon. Nor do I believe that we will descend into anarchy. Are not resource wars (starting with Iraq), and the prospect of hyperinflation, and stagnant or declining GDP enough? Well, at least I hope they are.

My issue is this: Why should you work so hard only to pour your investment dollars into a leaking bucket? You would have been better off spending those shekels on vacations, expensive wine, and song. (Actually, that sort of appeals to me.) Some might find that pecuniary, but those that do probably did not spend a career doggedly pursuing some level of financial independence. Actually, I am quite sure that on some level the tied dye set is HOPING for a collapse. Teach those yuppie pricks a lesson.

I know that a lot of the peak oil blogsphere is filled with disaster scenarios, but I sincerely doubt this is the most likely outcome. That argument that we will experience immanent agricultural disaster due to declining energy inputs is just not that likely. The markets are efficient enough to redistribute those inputs away from Suzie-Cuzie’s trip to the mall and into the farmer’s tank and fertilizer bin. Yes, food is going to get much more expensive, and yes, this will fall disproportionately on the poor. But the aggregate AMOUNT of food available to Americans is not the problem, but rather how to pay for assistance to the poor.

This is not to say that our agricultural exports won’t decline and harm others. I sadly think that is a rather likely outcome. Those of you that have been following my blog know that I have great concerns in this area. Wheat and corn production will become an increasingly expensive proposition, and that will negatively affect aggregate crop production, just look at wheat inventories, and in turn available exports and domestic meat production, but the lesson of history is that people will be “incentivized” to produce some of their own food. As an avid gardener, I can tell you that a simple kitchen garden can overwhelm your ability to consume all that is produced at harvest time, the surplus of which can certainly be preserved. It will not be necessary to produce ALL of our own food (at least not for 20 or 30 years, all bets are off at that point in the oil production curve) just enough to bring the marginal scarcity food cost down to an affordable level.

I get email from one dour fellow who tells me that we have lost all of the knowledge to do this. What knowledge, gardening? Get a grip, and join my garden club. You would be impressed with what these folks know.

As my friend FireAngel from likes to point out, if India can feed over 1 billion people with less arable land and far less fossil fuel imports, North America certainly can feed its population.

There is also some slack for the economy in the wasteful way in which we use oil. FireAngel recently pointed out that driving around in circles does not increase GDP.

If it were going to be Armageddon, what would be the point of investing? Better to blow it all on a trip around the world.

No, the Apocalypse won’t be arriving anytime soon, but a paradigm shift is, in my opinion, underway as I write this. In this paradigm shift, there will be winners and there will be losers. Not much different than our current reality. It is the INSISTING that things be a certain way that will get you into trouble. Flexibility and adaptability will go a long way in the environment I foresee.

No, it won’t be business as usual. We are likely to be a whole lot less mobile, live in smaller homes, and consume less frilly BS. We won’t be commuting as far, be more involved in our communities and our children’s lives, and we even might all have a new hobby – gardening. But I ask you: Is that really Armageddon?

End of Post

Clearly, my estimate (in other posts) that total availability of Oil to the U.S. in 2020 would be 8 to 12 million barrels per day in 2020 looks a bit aggressive... perhaps 12.5 to 15.5 million bpd? Then again, maybe Iraq comes in in Spades and things are not so dour... or perhaps not.

This may feel like a whimper to some of us... but I think that that is completely subjective as it appears to me that a "collapse" has already begun for some... for a fortunate minority, said "collapse" won't be happening in their lifetimes. Life is not fair.

Given the attack on the system by The Tea Party and the Occupy folks, my bet is that the current system of rationing fuel solely by price will become untenable/unacceptable. It will be hard to justify allowing Fat Cats fuel for their private jet while people freeze in Northern Maine. I am curious to see how that works out... and it might convulse for a while, but in the end I think (hope?) the beast starves to death.

More soon.

Friday, February 17, 2012

Peak Oil is Here for the OECD

Peak Oil consumption appears to have hit the OECD nations, with consumption down 10% over the past 5 years.

Still, the decline rate is somewhat better than many expected. Ethanol in the U.S., along with increased domestic production, softened the blow somewhat in that country. Europe, for a number of reasons, did not experience a decline, point to point, during the period.

Ethanol is a one off and the increased Oil production both domestically and in Canada are not going to grow at the same level... so if the rate of change remains the same, in 2017 U.S. domestic consumption could very well be below 16 million barrels per day, down 25% in 10 years, peak to trough (and it could be more and it could be less).

That's bad... but it could be a great deal worse. The U.S. trucking model for the distribution of goods will  have to get a great deal more efficient and expensive... but at least it will still be functioning. The volume/tonnage will be lower obviously, but the necessities will still get through.  There is a point though where that simply won't be the case. The U.S. is a BIG place, and big rig trucking is a simple equation - 4 miles per gallon. 1 less gallon of diesel supply = 4 fewer truck miles.

Of course there will be adjustments. Homes in the Northeast, for instance, can be converted to Natural Gas heating from heating oil, and heating oil is close enough to diesel... but that number just isn't that big. No, the adjustments will come in the form of fewer consumer and capital goods being trucked around. Perhaps railroads or waterway shipping will make up for some of it.

But that doesn't stop the inexorable march of depletion. It seems that whatever we thought was normal in 2007 won't be so normal in 2017, 2022, or 2027, which is only 15 years away. Somewhere in the middle of those years, the folks selling us the oil in the first place may decide that it is not in their best interest to keep selling that oil as fast as possible; or perhaps production declines accelerate... the point is is that it appears Peak Oil consumption has hit the U.S. and there isn't much we can do about it. We must  make personal, policy, and economic adjustments. Some will make better decisions than others, and the government's capacities will likely be much diminished... for what its worth, I view that outcome as very, very good news.

Thursday, February 16, 2012

Shred Soon

Read this jackass and his self-seving Bull Sh#! I will strip to bark off this and shred it shortly, but I am tired and pillow is calling...

Tuesday, February 14, 2012

The Good News

While I may bitch loudly and often, I see a great deal of promise for America's future. I have come around to thinking that it is precisely the overdone silliness of the Central Planning jackasses that will eventually restore our freedoms as Americans.

Ever watch the movie "BraveHeart"? There is a line in that movie that goes something like this... The "Babe" says to the "Hero" - "Peace is made in such ways..." to which our hero replies "Slaves are made in such ways".

Many Americans seem to have sussed out the things that have enslaved them: Student loans, mortgage debt, political policies at all levels, ridiculous family law, competitive materialism... young people seem to be rejecting most of this, with the exception of student loans, with which many are still stifling their lives... but you can really see it in the housing market. While the Fed/Bernake/Goldman and the rest of the resident anti-Christ are busy trying to reflate that market it appears that they have run out of suckers... and that's a good thing

The increase in total credit engineered by the Fed and TPTB over the past 40 years has not worked out for The People, if I may make use of understatement. Perhaps unwinding that circumstance will.

Things have changed. Nominally, the U.S. economy has "grown". Anecdotally, I doubt much of that growth. Immigration and fertility are down, and in the past the biggest component of economic "growth" was population growth. This is a critical issue... while this circumstance will throw a wrench into future tax assumptions and demolish our ability to fund the military and social programs I see this as a very, very good thing. "Slaves are made in such ways"... as is obesity, depression, addiction... America's people, for the most part were not unsatisfied with the "direction" the country was taking until the 1970's (with the glaring exception of the  really, really stupid war mongering of Korea and Viet Nam). What brought the dissatisfaction? I assert that the addiction to Oil, T.V., and the market's return to labor equilibrium with the rest of the world.  While the boomers and X'ers might bemoan whatever it is they bemoan... the circumstances they viewed as "normal" (when there is truly no such thing) are not the normal of young people today... and these people will eventually get on with it... and these young people were not born into families from America's Left, who forgot what happens to those that do not replace themselves... they die out... won't be long now... bye-bye...

Gasoline availability per capita is down well over 14% since 2005 (please see my previous post for California gasoline consumption and then add in the 1.1% increase per year in population per year. While the U.S. Census Bureau believes that the U.S. population will hit 420mm in 2050, I think those folks need to take their fingers out of their nose...) and the price reflects the market's role in rationing that declining resource by price.

U.S. grain production has tilted heavily to corn due to ethanol's now firm entrenchment in the liquid transportation fuel market...  But we have run out of corn acres, or at least I assert that we have... why else would corn farm land have quadrupled in the past decade? (Here's the wheat production chart.) The U.S. now consumes nearly 1/2 of its corn crop in ethanol production... it is extremely unlikely that ethanol can claim much more, unless Americans prefer transport fuels to meat, milk, and eggs... and the price of food stuffs relative to The People's ability to afford them is already quite high, even if, as a percentage of income, food costs are near historical lows... the big change during the past 40 years? The percentage of FICA and property taxes of total income confiscated was just too much of John Q. Public's income for him to be able to feed his kids AND his parents (via Social Security and Medicare). If you doubt this... please explain the "temporary" payroll tax cut... which will never be undone.

So what is the "Good News"?

The Good News is this: The People can no longer fund the government's power grab of The People's freedoms... We cannot fund the government's military, security, and social program apparatus... this is a beautiful thing, though the media will spend every waking minute convincing you otherwise. Time will heal these wounds (with you or without you), and we, The People, can get back to making our own decisions about the way we want to live our lives - accepting both the rewards and consequences that come from being a "Free People"....  what does it mean to be "free"? We have seen the Left's and the Right's version...

For our purposes here... Free to succeed and fail (however you define that). Free to educate our children as we see fit (and this will be helped by being forced to think for ourselves, rather than being told what to think by the NEA and the $200k Liberal Arts colleges... $1 Trillion in student loans, with over half in default/deferment gives you a pretty good idea of the negative cost/benefit analysis there). Free to engage in contracts of our own making (rather than the one-size-fits-the-local-divorce-attornies-just-right Bull Sh#! we have now). Free to accept the freedom of others. (“If you are not free to choose wrongly and irresponsibly, you are not free at all” - Jacob Hornberger.) Free from a majority that rejects the Rights of the political minority (rather than the silly way we tend to identify "minority" now) so enumerated in the Bill of Rights. Free to reject the materialism and consumerism that gave the government the opportunity to enslave us in the first place.

Recapturing these freedoms without violence will only be had by starving the beast... Oil and the popping of the credit bubble have set that in motion. The incredible coincidence of the decline in the fertility rate makes a resource disaster far less likely... especially when matched with a (so far) modest rate of change in the decline in Oil supply.

(Please see the 5th graph down at my friend Stuart Staniford's excellent blog. Crude and condensate, the stuff we make transportation fuels out of, has seen no growth in production in spite of large price incentives. While it is true that there is a long capital investment cycle... it ain't this long. Of course, there has been a large increase in NGPL's... that's nice for the petro-chemical industry, but it doesn't do a thing for transportation fuel... well, except for propane vehicles... and ethanol's 2 million bpd might, MIGHT, have a million bpd left to go... and then again, it might not. Peak Oil is here... and even if the inevitable decline in production is not... that decline in availability is here for the U.S.)

In the final analysis on Oil supplies - and hence the U.S. economy - its all about the rate of change. As for the politics and economics of it all... Political upheavals sometimes lead to very positive outcomes, and in this regard I am rather more optimistic for America.

Friday, February 10, 2012

California Gasoline Consumption

There are a lot of posts out on the Web about gasoline consumption in Q4, 2011. The data from the Government regarding Vehicle Miles Traveled, and California's gasoline tax receipts are probably better, more accurate, and more truthful.

Quarterly Peak Consumption was Q3 2005 - 4,067,963,214.  Q3 2011 gasoline consumption - 3,727,070,122, which was slightly lower than the 2009 Q3 in the midst of the Great Recession.

2005 was the peak year - 15,937,855,020. 2011 consumption will certainly come in lower than 2010's  consumption of 14,868,892,787.

Keep in mind that U.S. gasoline "supply" increased by nearly 10% with the development of corn ethanol.  Said another way, absent ethanol, the supply/consumption of gasoline decline would have been closer to (just under) 4% than (just under) 2%. But ethanol was a one off... there is no 880,000 bpd increase in ethanol available to the market over the next 6 or 7 years as there was in the previous 6 or 7. That does not assure an increase in the decline rate... but it certainly increases the likelihood.

If Peak Oil has not hit the world, it sure seems to have hit California's gasoline supply... and California is home to 1 out of every 8 Americans... likely a large enough sampling to be applied to the U.S. as a whole.

This is not the only thing wrong with the U.S. (and the other industrialized nations) economy... but its a biggee.

Thursday, February 9, 2012

An Important Article

This is an important article.

I am going to take the writer to task just a bit... not a lot... I am not going to beat the snot out of him or strip the bark off of him... after all, he is trying...

As a practical matter, we can’t solve educational problems, health care costs, government spending or economic competitiveness so long as a chunk of our population is locked in an underclass. Historically, “underclass” has often been considered to be a euphemism for race, but increasingly it includes elements of the white working class as well.

Actually, you can solve all of those things even if 20% of your population is struggling... provided that a nation does not criminalize things like drug use... but so far, so good even if not entirely true.

That’s the backdrop for the uproar over Charles Murray’s latest book, “Coming Apart.” Murray critically examines family breakdown among working-class whites and the decline in what he sees as traditional values of diligence.
Not finished with the book yet, but boy is this an understatement.

Liberals have mostly denounced the book, and I, too, disagree with important parts of it. But he’s right to highlight social dimensions of the crisis among low-skilled white workers.

Seems the book's author has correctly identified the cause and effect of Liberal interference with the family and the individual via the government and the New York Times writer takes exception? Wow! Now there's a surprise.

My touchstone is my beloved hometown of Yamhill, Ore., population about 925 on a good day. We Americans think of our rural American heartland as a lovely pastoral backdrop, but these days some marginally employed white families in places like Yamhill seem to be replicating the pathologies that have devastated many African-American families over the last generation or two.
Holy Smokes! And Hallelujah, to boot!! If you have read any of my stuff I have pointed out over and over... there are really only 2 outcomes (with varying degrees of intensity) to the Black/White race card: Black America is in bad shape: 90 % of black children will need food assistance from the government in their life times, 70%+ are born out of wedlock (a nice way of saying they are born and raised in a fatherless home), 1 in 7 black men are convicted felons... I'll spare you the rest of the data... So here's the deal:

Either Black America's values and sensibilities change positively... or the values and sensibilities of the poor and working class members of other groups will change negatively. Is that really so hard to accept? The New York Times is using the term "pathologies" to describe what is going on in African-American homes, for pete's sake!
One scourge has been drug abuse. In rural America, it’s not heroin but methamphetamine; it has shattered lives in Yamhill and left many with criminal records that make it harder to find good jobs. With parents in jail, kids are raised on the fly.
I have been living in rural America 50% of the year for the past 6 years. One long walk thru the local Walmart tells the score; Rural America is a disaster area. People do not look well here, when I compare them to my neighbors in New York City and Palm Beach County (Fl). Tattoos of tears on their faces and flames on their necks, the ravages of smoking and crysstal meth on their teeth, body weight so out of control that many have difficulty navigating the curb in front of Walmart and whose only wardrobe option is those stretchy pants worn in an effort to contain yards of loose flesh - and those stretchy pants are holding on for dear life. (The USDA has its share of blame here... but that's for another post).

Then there’s the eclipse of traditional family patterns. Among white American women with only a high school education, 44 percent of births are out of wedlock, up from 6 percent in 1970, according to Murray.
And there it is. Between the Feminist attack on marriage and the welfare attack on the family/father any one with a set of eyeballs can see which way the tide is flowing.

Liberals sometimes feel that it is narrow-minded to favor traditional marriage. Over time, my reporting on poverty has led me to disagree: Solid marriages have a huge beneficial impact on the lives of the poor (more so than in the lives of the middle class, who have more cushion when things go wrong).
What??!! Solid marriage and family life is more beneficial to poor people than the middle class? I won't even go into the definitions... Solid marriages and families have a "huge beneficial impact" on everyone.

One study of low-income delinquent young men in Boston found that one of the factors that had the greatest impact in turning them away from crime was marrying women they cared about. As Steven Pinker notes in his recent book, “The Better Angels of Our Nature”: “The idea that young men are civilized by women and marriage may seem as corny as Kansas in August, but it has become a commonplace of modern criminology.”
Thanks for the study, dude... but I don't think that one is much of a mystery... and marriage's civilizing effect on young men goes far beyond criminology... income, savings, net worth, ability to feed, care, and educate the children... I could fill pages here.

In 1965, Daniel Patrick Moynihan released a famous report warning of a crisis in African-American family structures, and many liberals at the time accused him of something close to racism. In retrospect, Moynihan was right to sound the alarms. 
Today, I fear we’re facing a crisis in which a chunk of working-class America risks being calcified into an underclass, marked by drugs, despair, family decline, high incarceration rates and a diminishing role of jobs and education as escalators of upward mobility. We need a national conversation about these dimensions of poverty, and maybe Murray can help trigger it. I fear that liberals are too quick to think of inequality as basically about taxes. Yes, our tax system is a disgrace, but poverty is so much deeper and more complex than that.
Liberals back in '65 were so incensed with Moynihan's report that many pointedly told him to wipe himself with it... unfortunately, their intellectual offspring are alive and well... and just as wrong. The problem with the underclass is because of tax unfairness? LOLOLOLOLOLOLOLOLOLOLOLOLOLHAHAHAHAHAHAHAHAHAHAHAHAAHAHAHA!

Sorry. That got away from me. HERE COMES THE KICKER:

Where Murray is profoundly wrong, I think, is to blame liberal social policies for the pathologies he examines. Yes, I’ve seen disability programs encourage some people to drop out of the labor force. But there were far greater forces at work, such as the decline in good union jobs.
Murray is profoundly wrong in pointing out the 100% correlation between those Liberal policies and the "pathologies" of the African American community? No, correlation does not imply causation... but we have enough evidence to draw a firm conclusion here. The problem is that the Left absolutely refuses to have their policies measured... and that which is not measured is not managed... and if it is not managed, then we are merely wasting money and making things worse. But it makes Liberals feel better... so we got that going for us.

There aren’t ideal solutions, but some evidence suggests that we need more social policy, not less. Early childhood education can support kids being raised by struggling single parents. Treating drug offenders is far cheaper than incarcerating them.
Can you imagine this? "Hey, we have failed miserably... what we need is to do more of what has f***ed everything up." Is that amazing? These people love "studies" as long as the study confirms what they want. When it does not, the answer is "we just didn't do enough". Any wonder about the state of the American Body Politic?

So let’s get real. A crisis is developing in the white working class, a byproduct of growing income inequality in America. The pathologies are achingly real. But the solution isn’t finger-wagging, or averting our eyes — but opportunity.
This is simply stunning in its FOSness. Yes, we should get real. We need to understand that it was Liberal policies that destroyed the African-American family, that those policies (with help from the Feminist attack on marriage) are now spreading those "pathologies" to working class and poor whites, as well as our hispanics and asian communities. Nice job, folks. Simply outstanding.

How do you people sleep at night?

Tuesday, February 7, 2012

To Wade Through the B.S. Americans Must Put Their Boots On

The Superbowl just set a new record for destroying a full day in the life of a human being. Over 1/3 of Americans stopped living their own lives in order to watch a bunch of other folks live theirs.

Isn't that what T.V. is all about?

Look, I love sports... playing them and coaching kids that like to play them, that is.

T.V. is the anti-Christ.

Concerned about your weight/diet? By the age of 65, Americans will have spent 9 full years (24/7) of their lives in front of the T.V.

Worse we BELIEVE what we are told by those in charge of programing T.V.! Here's an idea. Go to Sports Authority, or Dicks... pick up a softball bat and glove, go home, take the bat to the T.V. and go outside and play with the kids or grandkids (wrestling/running shoes, golf clubs, or tennis racquets will work in a pinch).


I was thrilled to see this book getting so much publicity - even though I think the assertion is completely FOS.

I am THRILLED that women like Tiger Mom and the Franco-phile Mama in the above link are doing what needs to be done: Calling out American Women on Motherhood.

We have spent enough time (to little effect) bashing dead-beat dads (even thought the vast majority of actual dead beat dads are incarcerated with no opportunity to be anything else)... think I am out of bounds? Let me ask you something... If you are reading this you are a highly educated thinking person (if I do say so myself).... so how many dead beat dads, out of ALL the dads you know, do you know of?

Irrespective of the media... "deadbeat dads" primarily come from bottom wrung of our society and from the prison population. Of course, there are exceptions... but they are few. Statistically, when Dad has custody, the proportion of dead beat moms is double that of dads.


Sometimes you have to stand back in AWE... in Shock and AWE... of the bald propaganda let lose on unsuspecting T.V. watching consumers. Anybody really think that this "study" and its publication with the New York Times is just something that happened? Just a coincidence?



Know what's wrong with America? It ain't it the politicians - IT'S US. I dare newbies to read this and actually take the time to understand the implications.

And let me define "Us". "Us" are those that identify with the falsehoods of Feminism, Racism, Liberalism (see Feminism) and their effects on the family (my favorite spin is this horse sh#! "safety net" talk... the Left doesn't give a rat's ass for those truly in need - KIDS... they do care about eldrly voters, though... deny this? Then take me to task so I can school you on the numbers when following the money). Demographics do not lie. There was no such thing as the "Me" generation. There WAS (IS) the "Me" political association of those that resented their responsibilities to their families... and the outcome?

Obese, drug addled, latch-key kids/young adults (and middle aged women) that can't find their ass with both hands reduced to "occupying" tents and wasting the best years of their lives going into debt for an education in playground supervision.

But at least McDonalds' sales and profits continue to set new records growing at 3X to 4X background GDP...

Hey... Mom's too empowered... and Dad's too cowed... to do any parenting. Feed the family? Let McDonald's do it... I am too empowered by the very Corporations that my political affiliation professes to despise... Educate the family? Let the nice people with the NEA handle that. Save for a rainy day? NAFC... what's that "safety net" for, anyway. Take care of myself? Nah... healthcare is a "Right".

And that's the way it is... or was... stand by, the fix is coming.