That's how much money the U.S. is paying annually for the Oil it imports at today's rate and price.
At our peak of Oil imports back in 2006 - 12.5 million bpd, given today's price that number would have been $397 BILLION. Same price, far less imports.
See how the Oil import decline is going to fix our trade deficit?
Here is something else to think about...
If the U.S. does not run a trade deficit... the mirror image is some other country is no longer running a trade surplus... and that means they won't have any US$'s to lend us... which means either we will save enough to fund our deficits, or we will engage in perpetual quantitative easing (yes, I know that it is really "qualitative" easing, but that's not how its known in the media).
The question of the moment is just how high an Oil price can the U.S. economy and the industrialized West withstand? Is it the price per barrel? The % of GDP? Or the physics of declining ability to do "work" (as that word is defined in physics)? Does the difference in unemployment since the U.S. was last importing 12.5 million bpd and now with our 9.5 million bpd in imports, change the equation?
And why is the stock market screaming ahead with $87 per barrel Oil and 4% 10 year bond yields? Housing prices have only declined further over the past 12 months, yet the financial sector, along with retail (RETAIL!), is leading the charge (you might recall that the banks still have this stuff on their books marked-to-fantasy). Maybe things were that over sold... maybe I am just sour grapes... maybe...but I don't think the laws of physics or economics have been repealed.
---------------------------------------------
Our politics just keeps getting weirder and weirder. Our national psyche is - to use a technical term - FUBAR. All f*&^ed up. We hate. We're angry. An episode of Nancy Grace is indicative enough of the sorry state of affairs... night after night of who cheated on who... WHO CARES? Well... Somebody does. Call them the Sex Police.
We have Tea Bagger's, Civil Righter's, Feminazi's... and militant gays, christians, jews, muslims...fatso's ... good grief, what next? Militant Boy Scouts? Maybe terrorist elderly?
"This is the duty of our generation as we enter the twenty-first century — solidarity with the weak, the persecuted, the lonely, the sick, and those in despair. It is expressed by the desire to give a noble and humanizing meaning to a community in which all members will define themselves not by their own identity but by that of others." - Elie Wiesel
I used to live in the same building in New York as Mr. Wiesel for a year or so. In New York you see celebrities fairly often, but when you would ride in the elevator with Elie Wiesel you feel his weight and his history on you... I never said more than "good morning" or "good evening" to the man, but as far as I could tell, and given his passion, I never felt a sense of anger - at least not in the way that the cigarette smoking skin head that seemed to want to kill me for not driving fast enough on I40 the other day.
I watched it rain last night. My 3 year old son and I sat on the front porch and watched the clouds and winds gather in an incredible display of nature's power and fury - it was breathtaking... We must have watched nature's fireworks for a couple of hours from our warm and dry vantage point, and when I went to bed I wasn't even remotely concerned about who Tiger slept with... I wasn't angry with Nancy Pelosi... but I was impressed with the show right outside our front door.
I have no idea what it means... but I do think we are being made angry by our media addiction. And some how, I don't think its good for us.
40 comments:
With no shortage (yet) of oil/gasoline and no shortage (yet) of food, and credit still available to the top 20%, we can continue the denial (a perfectly legitimate human condition) indefinitely. But the long term problems haven't gone away. We are awash in debt worldwide (both private and public) and future obligations continue to mount (too many old people in too many rich countries). The most recent opinion piece on peak oil said it best at the end ... "Enjoy it while it lasts."
They cannot figure out who is buying all this company stock, except for the one entity that has the credit available .. the Fed, who loans it to whichever financial institution asks for it. The financials have been trading shares between each other and bidding up the price. No one else has any money to invest .. the retail investor is sitting this one out, the pension funds, the institutional funds, the company insiders are all selling .. no one else has the kind of capital to cause the runup in the international stock markets (the Nikkei is up around 50% in 18 months!)
It is a old-fashioned "pump and dump," where the insiders ride the market up and, at some point, get out, leaving the losses to the suckers who got in at the end.
The last article I saw about what oil price starts to strangle the economy was $80-100/barrel (at least, short term). I guess we are gonna find out in they are right.
Each run up in oil causes us to use less and use it more efficiently. The price that causes a recession will get higher each time. On the other hand, each time we climb out of the recession, it will be to a lower peak than the time before.
Unless the government gets stupider than it already is, and institutes price controls or rationing, there will never be "shortage" of oil. It will always be there at the pump, just too expensive for most of us to buy.
There is lots of money around, and people are saving it. 83% of us are still employed and packing it away. Those who have lost their houses have a big increase in disposable income. They are glad to be out from under and they are saving and spending. Those who have stopped paying their mortgages ( as Greg pointed out to us ) also have a lot of new disposable income, too. My wife and I are packing the max into our retirement and saving more besides, as are millions of others.
There is plenty of money around.
The market is rising because there is no other game in town, until equities tank ( not to long from now, I'm afraid ). Most people think there will be significant inflation a few years out. Long term rates are beginning to rise, but are still too low to cover the inflation risk or depress the stock market, in my opinion. Short term rates are nowhere, so as long as stocks are climbing, everybody's in. It is a classic bubble. In a few months or so, someone will proclaim strong general recovery has begun. That's the time to bail out. A spike in the price of oil will cause another recession, just like a few years ago.
It seems to me that the next run up in oil may pop China's bubble. That could create a few year's grace in oil supplies again.
Regards,
Coal Guy
I think the net issuance of t-bills is the linchpin of our trade deficit woes. Without them those dollars would have to go to real goods and services on the return trip. Even if they went to fund debt it would not harm the prudent. When my neighbor borrows money for some damn fool reason it, “neither picks my pocket nor breaks my leg,” to use a Jeffersonian locution. Only when the national government borrows money do I have to pay for it; either thru higher taxes or currency debasement. What do I get for my money? They are resurfacing a perfectly good interstate just down the street; broken window fallacy. My taxes are funding bankster bonuses. Don’t forget all the essential harassment services…
At least it’s almost tornado season nothing quite like sitting on the porch watching the thunderstorms roll in, it really can’t be beat.
I want to pick up on the idea that the news is literally driving us crazy. Like the saying goes "a little knowledge is a dangerous thing." I do think that both parties try to take advantage of the news cycle. When a event happens they try to formulate a populists response that the most citizens will grab hold of. This has been done since the founding of this country. Just got done reading a patriots history of the united states and was literally flabbergasted at the amount of vitriol betweens the party's that have dominated different eras(dems, repubs, wigs, radical repubs). It was very interesting that the first liberals were republicans that fought back against the party because of the corruption and payouts to political allies. Whole groups of federal employs fired and replaced after every election if the party switched for 60 yrs. The liberal republicans thought it was important to give back voting rights to southern states and bring the nation back together. The reconstruction after the war was of the worst sort. Kind of of like no bid contracts given out to military contractors. It seems strange that I was literally completely ignorant to so much of our history. This book brings a lot of things together. I do think that if you look at history we are right in line with political partisanship of the past. But something more insidious is happening now. The people with the most power a literally taking are birthright. The will leave are children homeless and destitute. The tea party's may not be perfect, but I know a lot of people involved and they can see that if we keep going down this path we will have no room to move. Is this the culmination of the greatest country in history. Who knows? We will find out soon enough.
Enlighten the people, generally, and tyranny and oppressions of body and mind will vanish like spirits at the dawn of day. Thomas Jefferson, letter to Dupont de Nemours, April 24, 1816
To me this is what is happening. The people are awaking to the fact that liberty is leaving and being replaced by a soft tyranny. So I support the tea party’s as the people’s movement for now. Hopefully some of the more important Ideas with integrate into republican platform(lower taxation, cutting size of government, federalism, and other generally conservative ideas). The libertarian wing of the party needs to grow also. So sick of stationing are troops on every God forsaken place in the world. The Democrats for all purposes are Fabian Socialists. The slow tide of history is on their side they believe. I don’t mean to indict all democrats voters or politicians, but it is obvious the party is no more. The Looney left have played their cards well. The republicans have a lot of problems. Mostly being to damn aligned to the left. If we went back thirty yrs bush would have been a Democrat. Look at the crap he did. I do believe if people researched their own beliefs 60 percent or more would be libertarian, so we do have hope. As the system slow because of the boundaries that geology is placing on us the people will either go completely ape shit(like the French revolution) or batten down the hatches and let the worlds once again ring true
“we hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable right, that among these are life, liberty and the pursuit of happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any form of Government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new Government, laying its foundation on such principles and in such form, as to them shall seem most likely to effect there safety and happiness…..but when a long train of abuses and usurpations, pursuing invariably the same objects evinces a design to reduce them to absolute despotism, it is their right, it is their duty, to throw off such government.” Declaration of Independence
We are, so far, seeing, post-1997, a cyclical pattern of higher highs and higher lows in crude oil prices:
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=A
The progression in recent annual lows, where we have seen year over year declines in annual oil prices, is perhaps even more interesting than the progression in annual highs. Here are three recent (post-1997) annual declines in US crude prices (note that the lows after 1998 approximately doubled each time):
1998: $14
2001: $26
2009: $62
The ratio from temporary peak to prior trough is pretty interesting too. Here are the ratios between discrete annual peaks and prior troughs:
2000/1998 Ratio: 2.1
2008/2001 Ratio: 3.8
Note that the ratio almost doubled.
A 7.0 future ratio given the 2009 trough of $62 would suggest a future peak of $434. As Matt Simmons has noted, many consumers pay (for refined product) the equivalent of $300 plus per barrel.
Greg,
A minor correction. The annual peak of US net oil imports of 12.5 mbpd was in 2005:
http://tonto.eia.doe.gov/country/img/charts/US_net_imports_large.png
West Texas
do you think it can really go that high. I can't see much function with gas at 12 dollars a gallon or you just pointing out the mathematical ratio inherent in the numbers.
"Each run up in oil causes us to use less and use it more efficiently. The price that causes a recession will get higher each time. On the other hand, each time we climb out of the recession, it will be to a lower peak than the time before. " - pretty much the way I see it.
Bur:
The word "shortage" is an abstract, and I purposely avoid its usage - at least as much as possible. Hard numbers are of better use in analysis.
Re; Equities
Equities WERE cheap. I thought they deserved to be cheap because I thought the Oil import declines would have done more damage to the U.S. economy. But I missed some things, in hindsight.
1. Half the earnings of the S&P come from overseas.
2. Ethanol production is approaching 900k bpd
3. Natural Gas prices collapsed and supplies were abundant.
4. I underestimated the impact of the stimulus on the equity market.
Just goes to show you. Forecasting is failure prone. You gotta be willing to be wrong, eat your words, and take the other side of the trade... or at least cover and not lose any more.
We have allowed the media to become our defacto community and get our emotion from that community. If all you watch is MTV, then you believe that sex,drugs and music are reality. If you watch soap operas, you believe that those lives are real and worth losing sleep over. If you watch Nancy Grace, you believe that her anger is real and well founded and mistake her ignorance for the religion of the just. People who are hanging on by threads can escape into a world with a 22 minute happy ending. I fear the anger is dangerous. It leads us to believe that there is an all right and all wrong, good guy,bad guy solution out there. If people believe that they have been done wrong, they will look, not in the mirror but at the screen where some talking head will tell them what to do.
Kathy i do agree with you. You are just making the case to shut off the T.V.(I just watch the news for 1 every day, Wifes orders)This is why the founder were so impressed with the idea of teaching history. A long term prespective is what we are lacking now. The fast pace with which everything moves now causes most people to tune out the important for the mundane.
Hey greg have you looked the mini-cows. I hae been looking into getting a few. Eat about 1/3 less than typical cow and are half the weight. Anyone with info would be helpful.
Dextred1,
One point to keep in mind is the total cost of driving a car. A recent study put the total cost of driving a new Civic at about 50¢ per mile. Let's assume that the non-fuel costs are about 40¢ per mile, and let's assume 12,000 miles per year, with an average of 30 mpg (400 gallons per year).
In any case, at $12 per gallon, the annual fuel cost would be $4,800 and the non-fuel costs at 40¢ per mile would also be $4,800, so the total per mile costs would be 80¢ per mile at $434 oil versus about 50¢ per mile at about $80 oil.
So, based on the foregoing, a five fold plus increase in oil prices would only cause a 60% increase in per mile costs.
Kathy:
"We have allowed the media to become our defacto community and get our emotion from that community"
BINGO! I can't think of a better description with words.
I don't watch TV... but my wife and kids do. If I walk by and even HEAR Nancy Grace or any of the other miscreant talking heads I break out in hives.
I enjoy a documentary, or a good movie, but if I have to deal with advertisements or the other silly BS, I tune out immediately.
Dextred1:
My next project (I have too many now) is miniature cattle. I have a full sized milk cow that needs to be bred, and 2 steers... A side for the freezer and the others will be go elsewhere.
I want a dual purpose miniature breed - perhaps mini jerseys. Small cattle are easier on your pastures... especially in winter.
Ok that makes sense. I would think that this would lead to much smaller and cheaper cars. I have two dump trucks and 4 pieces of heavy machinery. This would probably cause most of my work to be out of the price range for the customers that I work for. I mostly do driveways and patios and 90% of the jobs I get are slim profit margin variety. It literally cost 10o dollars a day for fuel on a close job. I have no pricing power because of economic situation. People might adjust, but hundreds of thousands of small family businesses will go out of business. I am just lucky every piece of equipment is paided off. Just checked the yellowbook and about 2/3 of my competitors are no longer advertising. Deflation is the song of the day.
They seem to be a good investment compared the larger breeds. I only have 5 acres so need a small breed. Only problem is buying the first few. Price range is very high compared to the free or low cost full size breeds. Once you get them breeding you are all good.
Great post, you are becoming quite relaxed in your (older) age.
You growing some trees on that farm as well as livestock? : p
One of my favorite quotes is "nature never hurries and yet everything is accomplished".
If you prefer "abudant" to "no shortage," that's fine by me. :)
There is no way the $200+ per barrel costs will stick. I've heard Matt Simmons and his "Oil is 10 cents a cup .. it's CHEAP " speech three dozen times. He also said in March of '09 there was going to be a shock to the oil system within a year. Didn't happen. We can't be right all the time. :)
I do know that the world economy will never support, in its current form, gasoline/diesel prices over $5 for long. We are NOT Europe (where it is the equivalent of $10/gallon). Europe is tiny, and has lots of railroads. The U.S. has lots of land to cover, especially the dopes who bought houses in the middle of nowhere and have to drive all day.
The solution to high prices is high prices.
If oil/gasoline/diesel/heating oil/natural gas prices get too high, people can't affrd them and demand is reduced from the population and the economy. When demand drops, you don't need as much oil product, and so prices drop because the oil product businesses need cash coming in for their fixed costs. There is a natural ceiling to energy prices. You may suffer, but if you have no choice ....
When the summer is over, we'll see how fast gasoline prices drop. Given supply is "abundant" (better Jeffers word), my guess is they'll drop plenty. If not, we'll know we have a oil supply situation starting to emerge.
Bur
Us "dopes" that don't live in town have more freedom, land and the best part guns. As Hank Williams Jr said
"I live back in the woods, you see
A woman and the kids, and the dogs and me
I got a shotgun rifle and a 4-wheel drive
And a country boy can survive
Country folks can survive
I can plow a field all day long
I can catch catfish from dusk till dawn
We make our own whiskey and our own smoke too
Ain’t too many things these ole boys can’t do
We grow good ole tomatoes and homemade wine
And a country boy can survive
Country folks can survive"
(done every thing one list but grow my own smoke):)
No if you are talking about the mcmansions around these towns, they will have trouble paying for them. The great thing about the sustem is that if you can't afford the house it gets forclosed someone else buys it. The great thing is they get it for 50% or 60%percent off the old price. This keeps debt payments down which in turn gives you more money to drive to town. The thing is that most of these "dopes" are by food supplys. Also dont have to let their kids grow up in some s**thole of a town with drugs, gangs and general lack in the meaning of life. Let Knuslter keep the righteous indignation at other people that do excalty what he does{live in the same small towns he blasts as suburban wastelands}. I live outside of Ann Arbor which is a commuter town for Detroit and the suburbs and I have been to Detroit 100 times or more. It Sucks, It is already dead. My Grandpa drove food to the national guards during the riots. That is when all my family moved from. Detroit to Redford, to canton then to Dexter and Chealsea. I have seen this process play out. You are descibing Detroit and you won't want to live there. The don't even patrol half of the streets because of lack of money.
Farms + hungry people = no rest for people thinking their "guns" are gonna protect them or their farms. If I'm hungry, and a few million people are hungry too, and Farmer Brown is growing rutabegas for his family, we go to Farmer Brown's farm, kill Farmer Brown and his family, and take the rutabegas. People who think guns will protect them are deluding themselves. I can get guns too. We have 300 million guns in the U.S. I'll take my chances in inner Chicago. :)
Good comments on here thanks all I enjoyed them.
As for the half sized or mini cattle they eat less, can put more per acre, actually dress out to more overall percentage used and cost just as much per head as a full sized cow.
Or at least around here they are.
I been looking at the Dexter breed as it reportedly gives excellent milk (ok don't milk the bull like Bureacrat would) Joke BTW, and also produce top quality meat.
I am hoping to start with a few this fall maybe.
The reason I disagree with you is because even if the wheels fall off people still get up the next day. They might be much poorer, more hungry and maybe mad. You are telling me that people that were to lazy to provide for themselves are going to take action and go get food. Yeah right. Even if they did the food production then would plummet and everyone would starve. In stressful situtions people do not work together. Not to mention that my point was that Detroit is the future. That is what the best city’s will look like. That is what Chicago will look like. I have a friend from the west we can go visit I am sure you would love it. Bars on windows and literally sleeps with a loaded gun. It is not a matter of black or white but what shade of gray. It will be a slow decline I hope. When people hear that farmers are shooting people for stealing food. I think they will notice this real quick. As for you in the city's Soylent Green anyone!!!
Bur,
If it gets that bad, which I do not think it will, then much of the horde will be dead before they get here.
They will be armed and hungry and that will make them dangerous. Unfortunately, some with food would be killed and their stuff pillaged.
However, a town like mine, and there are thousands of them, will be better prepared and banded together. Most likely by the time a horde gets here it will be armed but starved and we would be able to defend ourselves.
If it gets so bad that we are fighting amongst ourselves here then I'd rather be dead anyway.
I think that beyond increased crime, there will certainly NOT be hordes of city folks attacking farms such as the old 70's film "Deadly Harvest".
Crime rates will go up in the city and the country as times get tougher. This City vs. The Country argument has been played out many times, there are pro's and Cons to both places and ultimately its a choice between jobs/convenience and setting/freedoms. Clearly, if things ever get horrible as some suggest--neither setting will be good.
If lowering our trade deficit means, our economy shrinking then I don't really see sending less paper abroad as really that good a thing for the US. Sending people entertainment and our paper money hasn't been that bad a deal as we ate up the Lion's share of the cheap oil in previous decades--but like many families instead of being more frugal as a nation, we squandered it on mostly shit we don't need--at interest.
Still awash in energy ...
SAN FRANCISCO (MarketWatch) -- Oil futures accelerated its losses following an inventory report that showed a larger-than-expected increase in crude inventories. The Energy Information Administration reported Wednesday an increase in crude-oil stockpiles by 2 million barrels in the week ending April 2, while analysts polled by Platts expected an increase of 1.5 million barrels. Crude oil for May delivery lost 40 cents to $86.44 a barrel, modestly adding to earlier losses following the report. The EIA also reported a decrease in gasoline inventories by 2.5 million, while analysts had projected a decline of 1 million barrels. The agency reported an increase in distillates, which include heating oil and diesel, by 1.1 million barrels, while analysts expected a drop of 1.5 million barrels
Just a pedantic note about European fuel prices. I've seen the "$10/US gallon" figure bandied about on occasion, but in fact it's not (quite) at that level and I don't think it ever has been. $10/US gallon is terribly, terribly expensive. That would be £1.73/litre, or EU1.97/litre.
Today, £1.25/litre for diesel might be seen in smaller towns or motorway service stations. £1.18-1.20/litre is more likely in populous areas. Google says that "1.25 british pounds per litre in dollars per us gallon" is ~$7.22.
(I found some Europewide prices here: http://www.theaa.com/motoring_advice/fuel/. Looks you don't even pay $10/US gallon for petrol in Norway.)
I doubt $10/US gallon would go down any better in Europe than it would in the US... people weren't even happy when it was $5/US gallon...
Hmm, looks like I fluffed one of my mental calculations... in fact it might have been close to $9.50/US gallon in the UK in mid-2008! So maybe $10/US gallon has been the case in the past, then. More of an outlier than the general rule, though.
Some recent comments by Jeff Rubin:
http://www.theglobeandmail.com/blogs/jeff-rubins-smaller-world/looking-for-oil-demand-in-all-the-wrong-places/article1494934/
Looking for oil demand in all the wrong places
"Exactly why oil traders and speculators think the (US inventory) data has anything to do with the state of world oil demand is beyond me. I suppose, like Pavlov’s dog, they’re only doing what they’re trained to do. But their training comes from a world that no longer exists.
"While the U.S. oil inventories data pertains to the largest oil-consuming nation on the planet, it is no more indicative of world demand than U.S. oil production numbers are indicative of world supply. Both are in terminal and irreversible decline."
@Dextred1
"I can't see much function with gas at 12 dollars a gallon or you just pointing out the mathematical ratio inherent in the numbers."
Europe seems to be doing ok. Granted we're talking apples to oranges in relation to how the U.S. economy and geography is made up but people adapt. See bureaucrat's comment on April 6, 2010 @ 12:54PM
"People might adjust, but hundreds of thousands of small family businesses will go out of business."
In the short run we agree but I think in the long run things would start to pick up. One of the options we have been kicking around whenever we have 'free time' is to buy a press and try out some of the stuff like Dan McAmoil has been doing. If you really believe in peak oil and your business is that dependent on fuel why aren't you looking at viable (IOW realistic) alternative now? My business is not dependent on oil being that cheap and I could live without it here on the farm although it would be difficult but doable.
@Greg
"I enjoy a documentary, or a good movie, but if I have to deal with advertisements or the other silly BS, I tune out immediately."
Documentary...like 300 ;)
"Small cattle are easier on your pastures... especially in winter."
Indeed, we currently have goats, sheep, chickens and turkeys at our casa. We only run smaller animals for a few reasons but your above quote was one.
@bureaucrat
"If I'm hungry, and a few million people are hungry too, and Farmer Brown is growing rutabegas for his family, we go to Farmer Brown's farm, kill Farmer Brown and his family, and take the rutabegas."
Maybe people like you but I think situations like Katrina show many people will just sit around and wait and feed off the small subset of people in the city. 'Hey I know those Mormon's keep food stockpiled and one lives down the street.'
Peak Oil-famous Colin Campbell no longer believes in the "peak oil price surge" (from Reuters) -- what I've been saying for months ...
BALLYDEHOB, Ireland -- The economic shock of global recession has led a prime exponent of the theory conventional oil output has peaked to shift his view of the consequences, but he still thinks the world has to go green.
Retired petroleum geologist Colin Campbell, who worked for major oil companies as well as smaller firms, has long been associated with the belief the world's oil supplies are dwindling.
He does not waver from that and dismisses the argument of the so-called optimists that technology will manage to keep eking out more and more oil to keep pace with rising demand.
What has changed is his opinion of the price impact and implications for fuel consumption after the spike of July 2008 to nearly $150 a barrel was followed by world economic recession, a deep drop in fuel use and a crash in oil futures to just above $30 in December 2008.
"I have changed my point of view about future prices," said Campbell, who used to think the peak in conventional oil production, which he believes happened in 2005, would lead to a relentless price surge.
Instead, the record rally led to a peak in demand in the developed world.
"Peak oil drives prices up in the first place. It has its own mechanism. We're sort of at peak demand right now," Campbell told Reuters from his home in the village of Ballydehob, West Cork. "I think presently the price limit is about $100."
Re: Campbell
I suspect that he is focusing too much on the US and other OECD Countries, but in any case time will tell.
Re: Abundant crude oil inventories*
(*Approximately five days of supply in excess of MOL)
If and when we hit an average annual oil price of $200, I expect that we will have also have a few days of supply of crude oil in excess of MOL, because a price level of $200 was necessary to balance supply & demand.
The question is why is it necessary to have an annual oil price to date for 2010 that is higher than all previous annual oil prices, except for 2010, in order to balance supply & demand?
BTW, Mark Mills, one of the co-authors of "The Bottomless Well," has changed his tune about Peak Oil:
http://www.forbes.com/2010/04/05/transocean-schlumberger-crude-oil-intelligent-investing-mark-mills.html
In 2005, they argued that our total energy consumption will increase forever. At some distant point, conventional + unconventional oil production would hit a plateau, but we would easily and seamlessly transition to other forms of energy.
Yeah .... horses. :)
You guys and your MZB's. It doesn't matter, does it? If they come, I'm a middle aged lady with some special needs kids and I'm headed for the soup pot. So this means what to me? I should run to the city and stop growing food and quit having any fun? Not a chance! I drink really good wine that I make and sleep in when the snow falls and make love in the afternoon and catch fireflies with the kids. You guys really need to get a clue. I'm not meaning to be rude but the focus on the hoards is a distraction from the reality of what a decline in energy really means to people.
There are several possible realities when things change. On one end, you could have the 1970s, where the worst we had to deal with was inflation, oil embargoes, disco and long hair. At the other end, we have had civilizations disappear (Empires from the Romans to the British, and someday our own wil end too).
Anything could happen when you've pushed the limit in so many areas (extremely high debt, peaks in everything, lots of older people demanding benefits, etc.) I personally think that if the supermarkets and gas stations stay open (and tomorrow they will), you won't have Armageddon.
But the gun thing is silly, cause you can be sitting on top of Walton mountain with your machine guns and gold, and you are no more safer or provided for than inner city people. We are all stuck in this together.
Bur,
You may believe what you wish about who is safer. I believe I am safer in the country surrounded by like-minded people who I've know for 40 years.
Kathy,
I agree with you. I don't think there will be a horde. If there is then I have to protect my family as best I can.
If it gets so bad that neighbor is shooting neighbor I would rather be dead than fighting. There's no peace in it.
Either way, I'm not preparing for horde. It's a waste of resources for me.
I don't think we will ever have roaming gangs. I think the more likely case is that many starve and others die from simple medical problems. Life is hard. I think more likely we end up like some 3rd world rat trap. Crony capitalism with a sprinkle of the magic social programs to keep the people placated.
I do truly think you underestimate the necessity of weapons though. The truth is that the threat of being shot is a very complex feeling. I was held up at gun point once and I got to say you don't know what to do. I think most will go the other way. By the way bur You ever shot a deer with a sling shot? I have not. Hell they are hard to hit with a slug. :)
Kathy:
I am with you. We are big on "afternoon delight" around here, enjoy a glass of wine with every evening meal, and never, ever miss desert!
The U.S. is in much better shape than most other industrial countries to handle this. Land and water ARE in abundance, just not where the population is at the moment... that will change of its own accord.
Its a transition. One can make the transition easily, or with great difficulty. Peak Oil is an ECONOMIC issue. Food is the real issue. The economy is going to contract over the next 10 years, perhaps very briskly. If you can work your way around that - problem solved. The rest is just life.
With this on my mind, another "UK petrol is $X/gal" mention. $9.13/gallon, it says right here:
http://www.marketwatch.com/story/uk-election-record-gas-prices-could-be-issue-2010-04-09?siteid=rss&rss=1
Except at the prices stated, it's more like $8.37/Imperial gallon, and $6.98/US gallon.
The take-home lesson is I suppose to run the calculations yourself any time you see any non-metric units and/or currency conversion...
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