"It is indeed a singular thing that people wish to pass laws to nullify the disagreeable consequences that the law of responsibility entails. Will they never realize that they do not eliminate these consequences but merely pass them along to other people? The result is one injustice the more and one moral the less." – Frederic Bastiat
Before I get onto Oil...
We bought an Irish Dexter Bull to be our new herd sire (BTW, I have added a new job description to add to my very varied bio - "Cattleman". Kinda catchy, don't you think?)
I have been considering miniature cattle for a while. In researching, I found the Dexter's are about the same size as the Miniature cattle breeds, but are not miniaturized. This is how they were developed over the years in Ireland and Scotland. They are said not to need any shelter (all cattle need shade), are entirely grass fed and require ZERO grain, and a 600 pound cow will still provide over 2 gallons of milk per day on a grass only diet.
I can tell you that a family of 5 just cannot eat an entire full sized bovine in a year, so the smaller size makes sense on that account as well as being easier on the fencing. Fence repair just ain't that much fun.
I name all of our farm animals from people in my past, and have granted the name "Johnny O'Donnell", Johnny O for short to this bull after my ski and surf partner of my youth. Here he is laying next to our family milk cow, Bonnie. As you can see, he is about 2/3 her size and weight - and Bonnie is a small cow as American bovine go.
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Siad another way... by MY estimate, Oil is less than 12% from a price that would begin to bring the economy down again, hard (which would also mean that energy demand would decline, bringing pressure on prices... so this is not advice to go long Oil here). $80 WTI used to be the price that the U.S. economy could simply not withstand... but its is MY opinion that with the recent decrease in Oil imports the price will have to go up by a commensurate amount to have the same effect. We shall see.
Me? I am long Exxon and Nat Gas, but not Oil (at the moment).
I just checked the futures market... Oil is now over $81 for the front month, and over $82 for November and December delivery. That these prices are even possible given the state of the economy and unemployment and with the US$ above 80 on the Dollar Index is indicative of the reality of the U.S. Oil import paradigm. Evidently, that paradigm's elasticity is being sorely tested... why else $81 Oil and high inventories? Clearly, the U.S. is no longer the Axe in the price of Oil.
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Read this excellent article on the state of Social Programs for the non-working population in Israel.
Note to American Left: Its not a race thing. Its not a social class thing. No country can withstand a growing population of tax receivers and a declining percentage of tax payers.
Note to American Right: No country can withstand the military costs associated with empire.
15 comments:
Sounds like the understanding of why the price of oil will never exceed $100, $200, $300 etc. for any length of time (6 months about)is starting to be realized. The price of oil goes up, the economy gets bashed down cause industry can't afford the oil, people lose their jobs, so demand for oil drops, and then oil prices drop. Oil price, like several other products, is self-regulating. Too high price translates into a price drop, eventually. The answer to high prices is high prices. The oil industry is too big to be sustained by a handful of dictator armies and nothing else.
The good news is, we have been given several years to find alternative ways to get around the uses of oil. The deflationary depression we are now in has killed demand so much (and China is about to turn into another "Japan" -- The Chinese economy has all the indications of becoming very sick) that peak oil is now going to take years to come to fruition.
Bur:
There is one more moving part you must consider.
Volume.
Volume X Price = impact.
As the volume declines price can rise and maintain equilibrium... its just that that takes TIME. Since I see the time line of 2005 to 2020 of Oil availability to the U.S. decline from 20.8 to 8 million BPD, I think it will be a slow, torturous grind.
Of course, I could be wrong... Saudi Arabia could go into a brisk decline, and Iraq could meet their wildest expectations... if I knew what was going to happen exactly I'd have better things to do than Blog.... but I don't... so here I am...
I just bought a share of 2 Dexters, both due to deliver in April. We had several families who wanted raw milk but we had trouble accessing it. We had one family with the space, one with the money 3 with the skills and all withing walking (all right-biking)distance. We also found someone who had Dexters but wanted out of the cow business. A workable agreement was reached and we will be getting milk by spring. They are such dandy l;ittle cows. I will only have to milk 3 times a week which works.
Bur,
This is peak oil. Peak oil does not mean $400 per barrel oil and lines at the gas pumps. It means declining oil production year over year. Whether there is none to buy or we are too poor to buy it makes little difference. The current economic collapse is in part due to declining oil availability and high price. What do you think it will look like? Shootout at the Exxon Station? I don't see any good news here, just more unemployment and poverty. None of us is immune.
Regards,
Coal Guy
I have to second what Coal Guy says because what Bur said is what I hear all too often from Peak Oil critics.
Peak Oil means exactly that...a peak in conventional oil production. PO says nothing about what the price is before, during, and after the peak. PO says nothing about the social condition that precedes and follows PO.
Whether PO occurs at 50 or 500 dollars a barrel matters not.
It is a decline in availability that implies a decline in affordability. What the decline in affordability means isn't something that Hubbert got caught up in, me thinks.
People looking for outrageous gas prices and long lines at the gas station before declaring PO will miss PO.
The only time we had large gas lines at gas stations was when Nixon put price controls on things and before Carter and Reagan removed those controls. Lines had little to do with PO then and they won't tell us anything about PO now (unless govt. brings back price controls, that is.)
BTW Greg, I'll be interested in hearing how managing your bull turns out.
Bulls scare the daylights out of me, but maybe Dexter bulls aren't as mean as more dairy-oriented bulls.
Most people see peak oil the way they want to see it: oil becoming scarce, and prices rising to the moon, because there is no immediate alternative. It is usually the hyperventilating gold & gun bugs who desperately want a "societal collapse," and are using peak oil to get the downfall they so much want (they think). COLLAPSE!! MANIA!! STARVATION!! PANIC!! GUNS!! GUNS!! :)
What I think will happen in the short term is ERRATIC prices, with oil not available in some places at ANY price. But with enough time to adjust, which will allow people to move to more advantageous places (like cities, where you have buses & trains, and can walk,) we can cut this disaster off at the knees. Yeah, oil is nice to have -- it is great stuff, but we can realistically use half of what we are using now with some changes in behavior. Plus, to fill in gaps, we have realistic alternatives (ethanol, electricity, etc.) And, most importantly, we will have TIME to make those changes.
The levels of oil in storage are still way above the 5-year averages, and where they have been for the last 60 years.
Hey Kathy:
"Great minds think alike"?
Anyway... I never had a bull before. I used to use my neighbor's bull, but they sold him. Next year's calves will all be half dexter, since it takes another year for reproductive maturity, I guess this bull will get at least 2 breeding seasons in here on our farm.
I always keep my eye out for livestock at the end of summer... people that don't want to feed for the winter will make you a good deal, and that was the case here (I hope... if my cows are not bred next year, it will have been a very bad deal).
Perhaps in a 3 or 4 years I will have a nice herd of primary Dexter crosses.
And I hear you on the milking thing. I don't mind milking everyday, but you need to have back up for when you are away from home.
Thankfully, we have some neighbors that very much want the milk so they don't mind filling in for me. Thankfully our cow Bonnie is Broke Broke for milking. She would let the Fedex guy milk her.
How did you come to decide on Dexters? Did you test for Chondro or PHA? Anything else you can add?
On the raw milk thing... we home pasteurize. To do so or not is a personal choice BUT I think that young families with pregnant women or young children are taking a large and unnecessary risk. There is NO research to support the claim that raw milk is any less nutritious (feel free to correct me... never did the research myself...). I will tell you we did one experiment here on the farm...
If you do NOT pasteurize your milk it will not last 3 days (72 hours0 in the fridge. If you do, it will make 5
The Dexter was an excellent choice from what I have read. I started researching the small sized cattle last year and came to the choice of Dexters myself. Just need to finish fence repairs or replacement before I add in cattle.
There is a dexter place not far from me that I have visited and they say the bulls are pretty gentle. Having worked in a good sized stock barn for a bit as a teenager I am somewhat nervous around some bulls myself. Especially angus ones. The dex bull they have will try and lick visitors through the fence and wants you to rub his head if that says anything about them as a whole.
PP:
I am with you on having serious respect and caution when dealing with large bulls. Even small bulls. Heck, even billie goats.
Still, smaller IS safer. And I don't care about looks... my calves will be dehorned.
My Grandpa when showing us what not to do with a bull wrapped the rope around his hand and said never do this. Low and behold that 700 pound steer dragged his ass around the property for 2 or 3 minutes. Needless to say that he had pulled his shoulder out of socket and was sore for months.
Over here a lot of smallholders are going for the Devon Reds http://www.redrubydevon.co.uk/
because they give both good beef and good milk, live on poorer soil, tame to handle and not to big.
They still hurt when they stand on your foot though! :-(
Apparently the Founding Fathers chose to take them to America, so presumably you still have them over there?
We have seen three year over year annual oil price declines since 1997, down to $14 in 1998, $26 in 2001 and $62 in 2009. Note that each successive annual price decline was about twice the previous decline.
If this pattern holds, the next year over year decline will bring us down to the $120 range.
Meanwhile, the average price to date for 2010 exceeds all prior annual prices except for 2008, when we hit $100.
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