As a practical matter, nuclear energy as a solution to the West's declining petroleum supplies is a dead issue, at least in my lifetime. The time frame for substantial declines in petroleum availability is short and it is upon us... and the time frame for a nuclear answer to that problem is long and any attempt to ameliorate petroleum's decline with nuclear power has been put on hold indefinitely.
Indefinitely.
In reality, nuclear power was the only energy source that had any chance whatsoever of cushioning the energy shock. Now, that cushion is gone.
Take a moment and wrap your mind around that. Let it wander where it will. The are a great many permutations of outcomes to come from this.
--------------------------------------------
It would seem that with cross boarder forces entering Bahrain that Pioneer's analysis has been borne out in the short term. I must say that I had not even considered that this could happen... I need to give it some thought.
-----------------------------------------
On an entirely different subject... and please don't take this out of context...
I don't watch T.V. for the most part, and I (almost) NEVER watch news (propaganda) channels as there is enough news to be had on the Web absent the commercial pitch (well, at least I can ignore and click away from the commercial pitch online). I have to question how healthy it is for people to be bombarded with the misery one can find in the world - earthquakes in Haiti and Japan, Tsunami's in Indonesia and Japan, wolves eating children in India, Shark attacks in Egypt, car crashes, murders, rapes, child molestations... while I don't watch T.V., that is not true for the rest of my family, and I watch the impact this rolling disaster menu has on them... not to mention the voyeur "news" media, who couldn't possibly care less about anything - except ratings and the rate that they can sell advertising time for for hooking us into events that are beyond our ability to control or influence but that do effect us quite negatively.
It would seem that tuning into disasters on T.V. is not helpful for the victims or the individual watching. If unaffected individual want to do something, it seem to be better to turn off the T.V. and do something to prepare for the day when you and yours are confronted by the unthinkable.
Yours for a better world,
Greg
Monday, March 14, 2011
Sunday, March 13, 2011
Nuclear Who?
Somehow, I think the future of nuclear power isn't what is was a couple days ago... and I hope that I don't turn on my computer tomorrow and find that the worst has happened at that Japanese nuclear plant.
This is not impersonal for us: my wife is Japanese and her parents and 3 siblings live there.... but I'll spare you the platitudes. The really amazing thing to consider is what is happening all around us regarding failures caused by complexity.
There are 2 ways of looking (so far) at the nuclear plants in Japan:
1: Nuclear power is simply too dangerous irrespective of the outcome in Japan.
2: A 9.0 earthquake and tsunami proved that containment systems were sufficient in a worse case scenario (if that proves to be the case here).
I know this is anathema to many, but this disaster might just prove nuclear technology is capable of handling surreal disaster inputs - and it will definitely yield tons of data on what can be improved.
This is not impersonal for us: my wife is Japanese and her parents and 3 siblings live there.... but I'll spare you the platitudes. The really amazing thing to consider is what is happening all around us regarding failures caused by complexity.
There are 2 ways of looking (so far) at the nuclear plants in Japan:
1: Nuclear power is simply too dangerous irrespective of the outcome in Japan.
2: A 9.0 earthquake and tsunami proved that containment systems were sufficient in a worse case scenario (if that proves to be the case here).
I know this is anathema to many, but this disaster might just prove nuclear technology is capable of handling surreal disaster inputs - and it will definitely yield tons of data on what can be improved.
Thursday, March 10, 2011
Saudi Arabia's Catch 22
By now we have all heard reports of security forces firing on demonstrating citizens in the Kingdom of Saudi Arabia ("KSA").
KSA is in a very precarious situation: They cannot survive $50 Oil internally and they will lose their international support and sponsorship should Oil rise to, say, $150 (pulling both numbers out from my hat). If Oil prices were to collapse again, as they did in 2008 - 2009, The House of Saud would be without the Oil revenue they rely on to placate the masses... it then follows that they will endeavor to avoid this outcome at all costs. Given that, isn't it quite possible that they could error on the side of overly constricting output? Could this error lead to $150 or even $200 oil for an extended period of time? Sure it could. Wouldn't that have profound political and economic outcomes here in the West and the U.S. in particular? YOU BET.
I could game this out in scenario after scenario... but I think you get the idea. KSA simply cannot allow another price collapse to unfold... and given the (to my mind) certainty of what would happen as a result, a price collapse does not seem to be in the best interests of the Oil importers, either - $100 is better than $300. TPTB in the KSA simply must be looking at what happened to oil prices following the the 2008 price spike and dirtying their underwear with visions of hangmen's nooses and executioner's axes dancing in their heads. ( My brother recently quiped that they "can go out like the English monarchy or the French monarchy". My sense is that that is not far from what they must be thinking about as I write this.)
This is not to say that the price of Oil could come in, and hard, if China's soft landing fails to materialize. Looking at cooper prices these last couple of weeks leaves me more than somewhat concerned about what is going on over there... far more so than their "surprise" trade deficit. Actually, the trade deficit and the copper price decline should be mutually exclusive events (to my mind).... we shall have to wait for more data... if the price decline for copper is the winning data point, one can't help but become completely freaked about the price of the overall commodity complex... even Oil.
The House of Saud has been sleeping under the Sword of Damocles for quite some time. It appears to me that the thread holding that sword aloft is coming undone.
This is truly a fascinating time to be a thinking person.
-------------------------------------------
I think the great commodity run is done. I know I have alluded and hinted it was there at year end... so sue me. A couple of months off does not make my analysis incorrect. You can stick a fork in it. Copper is leading the way - the correlation between copper and the precious metals is well over 90%. Inflation? NAFC - maybe you THINK you are seeing inflation in commodity prices... let me know when you see it in housing and labor prices or in bank lending... my bet is your vision will be a great deal worse and your hair quite a bit more grey (too late for me, there just ain't much black hair left) before you see ANY of those things... but if you do see it, by all means, point it out to me... cause I must be freaking blind.
Bonds and high dividend paying stocks are where its at in my humble opinion. I know that the guys over at The Daily Reckoning believe housing has bottomed and the precious metals are a long way from the top... I reject housing out of hand, and I will trust in copper more than anything else to lead me out of temptation regarding precious metals. ESPECIALLY if Oil goes up big (and smushes China's and Europe's economy in addition to ours) because of supply issues (which will only lead to demand destruction the likes of which will be absolutely do wonders for the prices of bonds from issuers able to fulfill their obligations).
Of course, there are flies in this ointment, too. Grain prices are ALL about the weather and growing conditions this year (I know some people blame food/grain prices on Bernake... but if that were the case the grain markets would be in contango - not backwardation) but if the crop is good... look for prices to go down like a rock in a pond... at least when compared to the front month prices - that's what backwardation looks like as a practical matter. The better risk/reward play (unless you can predict long term weather patterns) is elsewhere.
KSA is in a very precarious situation: They cannot survive $50 Oil internally and they will lose their international support and sponsorship should Oil rise to, say, $150 (pulling both numbers out from my hat). If Oil prices were to collapse again, as they did in 2008 - 2009, The House of Saud would be without the Oil revenue they rely on to placate the masses... it then follows that they will endeavor to avoid this outcome at all costs. Given that, isn't it quite possible that they could error on the side of overly constricting output? Could this error lead to $150 or even $200 oil for an extended period of time? Sure it could. Wouldn't that have profound political and economic outcomes here in the West and the U.S. in particular? YOU BET.
I could game this out in scenario after scenario... but I think you get the idea. KSA simply cannot allow another price collapse to unfold... and given the (to my mind) certainty of what would happen as a result, a price collapse does not seem to be in the best interests of the Oil importers, either - $100 is better than $300. TPTB in the KSA simply must be looking at what happened to oil prices following the the 2008 price spike and dirtying their underwear with visions of hangmen's nooses and executioner's axes dancing in their heads. ( My brother recently quiped that they "can go out like the English monarchy or the French monarchy". My sense is that that is not far from what they must be thinking about as I write this.)
This is not to say that the price of Oil could come in, and hard, if China's soft landing fails to materialize. Looking at cooper prices these last couple of weeks leaves me more than somewhat concerned about what is going on over there... far more so than their "surprise" trade deficit. Actually, the trade deficit and the copper price decline should be mutually exclusive events (to my mind).... we shall have to wait for more data... if the price decline for copper is the winning data point, one can't help but become completely freaked about the price of the overall commodity complex... even Oil.
The House of Saud has been sleeping under the Sword of Damocles for quite some time. It appears to me that the thread holding that sword aloft is coming undone.
This is truly a fascinating time to be a thinking person.
-------------------------------------------
I think the great commodity run is done. I know I have alluded and hinted it was there at year end... so sue me. A couple of months off does not make my analysis incorrect. You can stick a fork in it. Copper is leading the way - the correlation between copper and the precious metals is well over 90%. Inflation? NAFC - maybe you THINK you are seeing inflation in commodity prices... let me know when you see it in housing and labor prices or in bank lending... my bet is your vision will be a great deal worse and your hair quite a bit more grey (too late for me, there just ain't much black hair left) before you see ANY of those things... but if you do see it, by all means, point it out to me... cause I must be freaking blind.
Bonds and high dividend paying stocks are where its at in my humble opinion. I know that the guys over at The Daily Reckoning believe housing has bottomed and the precious metals are a long way from the top... I reject housing out of hand, and I will trust in copper more than anything else to lead me out of temptation regarding precious metals. ESPECIALLY if Oil goes up big (and smushes China's and Europe's economy in addition to ours) because of supply issues (which will only lead to demand destruction the likes of which will be absolutely do wonders for the prices of bonds from issuers able to fulfill their obligations).
Of course, there are flies in this ointment, too. Grain prices are ALL about the weather and growing conditions this year (I know some people blame food/grain prices on Bernake... but if that were the case the grain markets would be in contango - not backwardation) but if the crop is good... look for prices to go down like a rock in a pond... at least when compared to the front month prices - that's what backwardation looks like as a practical matter. The better risk/reward play (unless you can predict long term weather patterns) is elsewhere.
Wednesday, March 9, 2011
Down On The Farm
This is my year to get my homestead where I have always wanted it.
First things first: upon arriving we set out to provision our pantry with a year's worth of food. Done.
Wilbur IV made the ultimate sacrifice and is now in the freezer. Then it was time to lay out the Hog Yard. We will have 4 breeding sows and a boar this year. Ms. Piggy has already put 2 litters on the ground - 9 in August and 8 several days ago. Her piglets have now grown to breeding age, and we will keep 3 plus Ms. Piggy. I plan to plant out over an acre and a half of corn, beans, and pumpkins that will be primarily next Fall's finishing feed for this years piglets. The hogs will harvest it themselves, and when its gone... deh-deh-deh- DUH....
It would appear that our 4 cows are bred - and that our Dexter bull has been doing the right thing. We are looking forward to having farm fresh milk again. We lost nearly half of our goats over the winter to a parasitic infection that seems to be going around Tennessee. Still, I plan to fence an acre of sloping pasture to hold them next winter as I don't think the wetness associated with our bottom land in winter helped. The market price for goats this year is double what it was 4 years ago. The egg incubator is full - 270 eggs of which at least 200 will hatch, and perhaps 140 will make it to adulthood.
I built 8, 4' x 8' by 12" deep cedar wood raised beds for the garden along with 1, 24' x 4' x 8" cinderblock assembled raised bed. This year I am adopting the "square foot gardening" schematic for most vegetables but corn, beans, melons, and potatoes are still going in the field.
I will share some photos over the coming days. Let Saudi Arabia blow up - I'm prepared.
First things first: upon arriving we set out to provision our pantry with a year's worth of food. Done.
Wilbur IV made the ultimate sacrifice and is now in the freezer. Then it was time to lay out the Hog Yard. We will have 4 breeding sows and a boar this year. Ms. Piggy has already put 2 litters on the ground - 9 in August and 8 several days ago. Her piglets have now grown to breeding age, and we will keep 3 plus Ms. Piggy. I plan to plant out over an acre and a half of corn, beans, and pumpkins that will be primarily next Fall's finishing feed for this years piglets. The hogs will harvest it themselves, and when its gone... deh-deh-deh- DUH....
It would appear that our 4 cows are bred - and that our Dexter bull has been doing the right thing. We are looking forward to having farm fresh milk again. We lost nearly half of our goats over the winter to a parasitic infection that seems to be going around Tennessee. Still, I plan to fence an acre of sloping pasture to hold them next winter as I don't think the wetness associated with our bottom land in winter helped. The market price for goats this year is double what it was 4 years ago. The egg incubator is full - 270 eggs of which at least 200 will hatch, and perhaps 140 will make it to adulthood.
I built 8, 4' x 8' by 12" deep cedar wood raised beds for the garden along with 1, 24' x 4' x 8" cinderblock assembled raised bed. This year I am adopting the "square foot gardening" schematic for most vegetables but corn, beans, melons, and potatoes are still going in the field.
I will share some photos over the coming days. Let Saudi Arabia blow up - I'm prepared.
Sunday, March 6, 2011
We have BECOME the Philistines...
Please read this article about the insider trading trial of Raj Rajaratnam. Notice anything? He is spending $20 million + on his legal defense. Think about that for a minute. That means that no one, except the top 1/100 of 1% can afford to defend themselves against a criminal accusation by the U.S. Federal Government. So what's the difference between the U.S. or China or the Former U.S.S.R.? The charade of a trial?
Our government has run amok. Look at our expenditures. Look at our deficits. Look at our prison population. Look at the number of foreign civilians and conscripts we kill in military conflicts.
Now read this. The government has really outdone itself here. The U.S. Federal Government has indicted an American citizen for distributing reading material on jury nullification near the New York Federal Court House.
Now have a gander at this. The U.S. Federal Government is providing what are essentially military TANKS to local police departments. I can't be the only American that finds this disconcerting....
--------------------------------------------
If you were to look up Borderline Personality Disorder in the proverbial dictionary, you would find the picture of one Ms. Rahna Reiko Rizzuto, she of "Hiroshima in the Morning" fame and a conscript of Feminist Publishing, Inc. (that's the real name of her publisher).
I gotta tell you, we have crossed some strange f*&^ing boundary with this attempt by the FemiNazi goon squad to do I'm not really sure what.
A friend of mine from my childhood that I have become reacquainted with on FaceBook posted this youtube piece ostensibly about how advertising is committing violence against women.
As I watched I realized that I was viewing a recruiting video for a fringe religion/cult and their call for Jihad. I look at those young, impressionable women in the viewing audience.... I see bright 18 to 22 year old undergrads being drawn into a life of misery, loneliness, anger... even rage. Granted, Jean Kilbourne's contribution to the discussion about addiction, alcoholism, and smoking is commendable. Her thinly veiled hatred of men is not.
Our government has run amok. Look at our expenditures. Look at our deficits. Look at our prison population. Look at the number of foreign civilians and conscripts we kill in military conflicts.
Now read this. The government has really outdone itself here. The U.S. Federal Government has indicted an American citizen for distributing reading material on jury nullification near the New York Federal Court House.
Now have a gander at this. The U.S. Federal Government is providing what are essentially military TANKS to local police departments. I can't be the only American that finds this disconcerting....
--------------------------------------------
If you were to look up Borderline Personality Disorder in the proverbial dictionary, you would find the picture of one Ms. Rahna Reiko Rizzuto, she of "Hiroshima in the Morning" fame and a conscript of Feminist Publishing, Inc. (that's the real name of her publisher).
I gotta tell you, we have crossed some strange f*&^ing boundary with this attempt by the FemiNazi goon squad to do I'm not really sure what.
A friend of mine from my childhood that I have become reacquainted with on FaceBook posted this youtube piece ostensibly about how advertising is committing violence against women.
As I watched I realized that I was viewing a recruiting video for a fringe religion/cult and their call for Jihad. I look at those young, impressionable women in the viewing audience.... I see bright 18 to 22 year old undergrads being drawn into a life of misery, loneliness, anger... even rage. Granted, Jean Kilbourne's contribution to the discussion about addiction, alcoholism, and smoking is commendable. Her thinly veiled hatred of men is not.
Friday, March 4, 2011
We're here
Oil continues to roll.
"Peak Oil" is soooooo passe... and past tense. The phrase itself is now firmly entrenched in the popular lexicon, if not in government and banking's. The implications of the issue are just so overwhelming that even the vast majority of highly intelligent and well educated adults just doesn't know how to address it. Believe me, they would if they could - but that would mean coming to grips with ALL of this phenomenon's implications.
I am speaking about people my age, of a certain age if you will, with offspring that are now young adults. Our issue need our guidance and direction at this critical juncture... and where, and how, are we directing them? In a direction that takes no account of what the absolute certainty of what Peak Oil means.
The new generation of young adults will need the same things that every new generation has needed: A home, skills to make a living, and skills to operate a family unit and within a community. Yet my generation is still pointing our young into educational endeavors that will yield no practical skills but will leave them with debts sufficient to prevent them from acquiring a debt free home BEFORE they reach a certain age (just ask any 60 something person who still has mortgage debt AND a 5 figure property tax bill how his financial health is affecting their physical health).
To be fair, "Peak Oil" likely times well with "Peak People"... and in a Peak People scenario, some folks by mathematical necessity must remain childless and houseless.... but we are talking micro solutions here (you guys know how I feel about macro solutions)... and if you want grandchildren (and I really do), this is a time to pay close attention to your personal forecasting models.
Family businesses and family farms et al, are going to matter a great deal in the financial planning of the future. Financial assets? Beautiful now but could be quite ugly later. The small family business might well be today's "ugly duckling". For middle class millionaires spending $200k on an undergraduate degree in liberal arts, irrespective of prestigious the institution, might well echo painfully for a couple of generations. A modest, debt free home will "echo in eternity", as will practical skills in everyday life. Engineer, dentist, leather worker, horticulturist? Mazul Tov! Sensitivity coach, journalist (rofl!), english prof (really rofl!), political activist (really, really ROFL!!!)? Oy. "And from that you make a living?'
We're "here", and we've been here for 3 years + or -. Things will evolve just the way they do, and at the pace they do... this will present great opportunities and great challenges, and the beer will still be cold, and waves will roll in, and life will always be good - even hard times... hard times are better than no times, if you catch my drift.
Oh, and one last thing... given the future for transportation fuels, if you want to have any kind of relationship with your adult children and their children you gotta think long and hard about just how far away from the family compound the college they attend is. My wife came hear from Asia as an exchange student... and now her parents have to travel 9,000 miles to see their daughter and their grandchildren. How much longer do you think that model will work?
"Peak Oil" is soooooo passe... and past tense. The phrase itself is now firmly entrenched in the popular lexicon, if not in government and banking's. The implications of the issue are just so overwhelming that even the vast majority of highly intelligent and well educated adults just doesn't know how to address it. Believe me, they would if they could - but that would mean coming to grips with ALL of this phenomenon's implications.
I am speaking about people my age, of a certain age if you will, with offspring that are now young adults. Our issue need our guidance and direction at this critical juncture... and where, and how, are we directing them? In a direction that takes no account of what the absolute certainty of what Peak Oil means.
The new generation of young adults will need the same things that every new generation has needed: A home, skills to make a living, and skills to operate a family unit and within a community. Yet my generation is still pointing our young into educational endeavors that will yield no practical skills but will leave them with debts sufficient to prevent them from acquiring a debt free home BEFORE they reach a certain age (just ask any 60 something person who still has mortgage debt AND a 5 figure property tax bill how his financial health is affecting their physical health).
To be fair, "Peak Oil" likely times well with "Peak People"... and in a Peak People scenario, some folks by mathematical necessity must remain childless and houseless.... but we are talking micro solutions here (you guys know how I feel about macro solutions)... and if you want grandchildren (and I really do), this is a time to pay close attention to your personal forecasting models.
Family businesses and family farms et al, are going to matter a great deal in the financial planning of the future. Financial assets? Beautiful now but could be quite ugly later. The small family business might well be today's "ugly duckling". For middle class millionaires spending $200k on an undergraduate degree in liberal arts, irrespective of prestigious the institution, might well echo painfully for a couple of generations. A modest, debt free home will "echo in eternity", as will practical skills in everyday life. Engineer, dentist, leather worker, horticulturist? Mazul Tov! Sensitivity coach, journalist (rofl!), english prof (really rofl!), political activist (really, really ROFL!!!)? Oy. "And from that you make a living?'
We're "here", and we've been here for 3 years + or -. Things will evolve just the way they do, and at the pace they do... this will present great opportunities and great challenges, and the beer will still be cold, and waves will roll in, and life will always be good - even hard times... hard times are better than no times, if you catch my drift.
Oh, and one last thing... given the future for transportation fuels, if you want to have any kind of relationship with your adult children and their children you gotta think long and hard about just how far away from the family compound the college they attend is. My wife came hear from Asia as an exchange student... and now her parents have to travel 9,000 miles to see their daughter and their grandchildren. How much longer do you think that model will work?
Tuesday, March 1, 2011
No More War for Oil
I hope to good G-d that the U.S. does not involve itself in another War for Oil.
I want to doubt that this administration would be that daft... I hope and pray.
The end of America's addiction to Oil is at hand. You can see it from here. Maybe its not what we had in mind.... but there it is.
The public relations machines are cranking full tilt. There is little to no truth anywhere in the media - a lot of guessing, a lot of lying, and a lot of hoping... or more accurately, "wishcasting" is cropping up everywhere in the media. The facts are this. Oil went from $10 to well over $100 over the period 1999 - 2008. After Oil's subsequent crash (along with everything else) the pitch was that that episode in the price of Oil was a once in a lifetime event, a matter of speculation, a "bubble". Jump cut nearly 3 years hence: The MENA are awakening to the facts of their demographics, inability to grow food, and declining natural resources... and the average price of crude oil on the world markets is well in excess of $100.
In the past I mentioned that the oil for food trade will be interesting to watch to see how it balances out. I think that that is now coming to an inflection point. The impacts on employment, tax collection, the deficits (federal, trade, California!), social security/medicare/medicaide/food stamps et al are going to be on the order of "Shock and Awe".
The last thing we need is to waste more treasure, and worse - American lives - on another War for Oil.
I want to doubt that this administration would be that daft... I hope and pray.
The end of America's addiction to Oil is at hand. You can see it from here. Maybe its not what we had in mind.... but there it is.
The public relations machines are cranking full tilt. There is little to no truth anywhere in the media - a lot of guessing, a lot of lying, and a lot of hoping... or more accurately, "wishcasting" is cropping up everywhere in the media. The facts are this. Oil went from $10 to well over $100 over the period 1999 - 2008. After Oil's subsequent crash (along with everything else) the pitch was that that episode in the price of Oil was a once in a lifetime event, a matter of speculation, a "bubble". Jump cut nearly 3 years hence: The MENA are awakening to the facts of their demographics, inability to grow food, and declining natural resources... and the average price of crude oil on the world markets is well in excess of $100.
In the past I mentioned that the oil for food trade will be interesting to watch to see how it balances out. I think that that is now coming to an inflection point. The impacts on employment, tax collection, the deficits (federal, trade, California!), social security/medicare/medicaide/food stamps et al are going to be on the order of "Shock and Awe".
The last thing we need is to waste more treasure, and worse - American lives - on another War for Oil.
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