Oh.... My...... G-d..... "Obama Rolls out plan to cut Oil Imports."
G-d is cutting Oil imports, not President Obama, or any future president for that matter.
Now that Peak Oil Exports has been fully embraced by an American administration... well, you gotta admire how they are taking credit for an ineluctable outcome.
My hat is off to the President for this one... he just one-upped President Clinton in the "Slick" category.
Ok... Just kidding. If I were working as one of his political operatives, this is pretty much the tack I would take. Might as well take credit for something that is going to happen anyway, selling the policy response as being a good thing, and hope to h*ll it gets me through the next election when gas is $5 per gallon.
Most of the reasoning contained in the speech was actually reasonably sound - all except for the actual, practical responses. Still, we are getting there.
Oh, and one last thing Mr. President. Imports will likely be down by 2/3 over the next decade... not 1/3.
Wednesday, March 30, 2011
Not Thinking Things Through
I think our political class has a striking gap in its education/training. For the most part, they don't play chess. And I mean that sincerely. Chess teaches you to think about outcomes, intentional and unintentional. Something that is sorely lacking in our policies and politics.
(I grew up in a "chess house" (and ping pong, too). My father and my 4 older brothers would play endless tournaments. To give an idea of our enthusiasm for the game my mother knitted a large chess board and my father built a table around it. Some hard shopping was done to acquire the proper seats that were going to have to withstand our boisterous brand of brotherly chess. Brother number 3, who reads here often so I gotta be nice, and my father were the house champs.)
Here we are in 2011, having come closer to abandoning our Constitution to Marshall Law because of bad economic policy than at anytime time in our history, including times where we faced an opposing army. And what is our Left-leaning administration planning as a response? They are going to get rid of Fannie Mae & Freddie Mac (and its the right thing to do), 2 of the crown Jewels of that paradigm of Progressivism, President Franklin Delano Roosevelt. Turns out that subsidizing home ownership nearly ended the Republic. Social Security, the other crown jewel of that administration, is squarely on the block as we speak with a Federal government shut down possibly in the offing. (Medicare came later, during the Great Society Horse Sh#! came later with LBJ... the brainiac that gave us Viet Nam.)
There are no actions without unintended consequences.
The women's movement creates political opportunities for Hillary and financial opportunities for Oprah... and has caused 55 million abortions, outrageous divorce rates, a population of men who absolutely refuse to marry and others that will only do so with a 95 page pre-nuptial agreement.... and millions and millions of boomer aged women with no savings or husband to share the burden's of life with.... and yes, I realize it is more complicated than that.. but suffice it to say, with a full recognition that correlation does not imply causation, that boomer women, now 50 to 65, are in far, FAR worse financial shape than their mother's were. I respectfully submit that a great deal of that can be laid at the feet of the responses, both intended and unintended, of the "women's movement". And PLEASE! I do not say that there were not some important positive outcomes that came with that movement. We are playing chess here, and in chess one must SURVIVE the opening and mid game in order to win the end game.
Social Security and property taxes combined to make it impossible for the average person to save for their old age. If the data-point in the Susanna Wilson article, that the average Boomer American has about $25,000 in retirement savings, isn't it time to turn down the rhetoric and break out the spreadsheet/calculator/pencil & napkin? Do you want to shout down the opposition or have a rational co-examination of the facts? Well, real median household income in the U.S. is just over $50,000 per year. Social Security seizes 16% of that, and property taxes another 7% or so. Sales taxes consume another 2 or 3%... I have not gotten to income taxes yet! (And I know that at this point out come's the "tax the rich then!" crowd. I just can't respond to their silly and uninformed position. Yes, income taxes will have to rise somewhat... but there is not as much slack there as these people think.) Demographics are killing us! We were able to get away with this silly construct as long as population grew... the moment it stops - POW! Had the folks running the train set played chess growing up this would not be so hard for them to put their arms around.
Drug use! The U.S. has filled up its prisons far beyond the point of being defensible. What do we have to show for it? Is the drug problem cured? NAFC. Have we created a prison culture and gangs that perpetuate a culture of crime? You bet. You know all those men in prison? Well, they have children. And those children are growing up in poverty stricken homes dependent on government assistance. Talk about the gift that keeps on giving (for law enforcement and the justice system, that is)!!!
Speaking of those children... I'd be remiss if I didn't point out the unintended consequences of Aid to Families with Dependent children, or whatever they call it these days. 90% of African American children will receive food assistance at some point in their childhood. Over 70% are born to single mothers. This wasn't the case BEFORE the civil rights era... so what happened? As in everything I mentioned above... the GOVERNMENT happened. The government incentivized an entire culture to self-destruct. Not to worry, the government has a plan to fix it... all it takes is more money. Will it work? Has any government program worked out in the long run? Let's take a look, shall we...? Farm subsidies, the national income tax, the War on Drugs, Subsidizing the mortgage/housing market (Fannie Mae), subsidizing healthcare for the elderly (Medicare), forcing individuals to save while holding their money (lol!!!!) for safe keeping (Social Security), family law (an explosion of wealthy divorce lawyers and poor families and 55 million unborn killed)... I gotta stop here or I am going to blow a f*&^ing gasket.
I am starting to think that the end of Oil might just be a fantastic blessing. I might change the name of my blog from the "American Energy Crisis" to the "American Energy Crisis Is The Solution". In my view of the world and American chess board, it is difficult to see how the outcomes of the end of Oil could be any worse than the path we have chosen.
(I grew up in a "chess house" (and ping pong, too). My father and my 4 older brothers would play endless tournaments. To give an idea of our enthusiasm for the game my mother knitted a large chess board and my father built a table around it. Some hard shopping was done to acquire the proper seats that were going to have to withstand our boisterous brand of brotherly chess. Brother number 3, who reads here often so I gotta be nice, and my father were the house champs.)
Here we are in 2011, having come closer to abandoning our Constitution to Marshall Law because of bad economic policy than at anytime time in our history, including times where we faced an opposing army. And what is our Left-leaning administration planning as a response? They are going to get rid of Fannie Mae & Freddie Mac (and its the right thing to do), 2 of the crown Jewels of that paradigm of Progressivism, President Franklin Delano Roosevelt. Turns out that subsidizing home ownership nearly ended the Republic. Social Security, the other crown jewel of that administration, is squarely on the block as we speak with a Federal government shut down possibly in the offing. (Medicare came later, during the Great Society Horse Sh#! came later with LBJ... the brainiac that gave us Viet Nam.)
There are no actions without unintended consequences.
The women's movement creates political opportunities for Hillary and financial opportunities for Oprah... and has caused 55 million abortions, outrageous divorce rates, a population of men who absolutely refuse to marry and others that will only do so with a 95 page pre-nuptial agreement.... and millions and millions of boomer aged women with no savings or husband to share the burden's of life with.... and yes, I realize it is more complicated than that.. but suffice it to say, with a full recognition that correlation does not imply causation, that boomer women, now 50 to 65, are in far, FAR worse financial shape than their mother's were. I respectfully submit that a great deal of that can be laid at the feet of the responses, both intended and unintended, of the "women's movement". And PLEASE! I do not say that there were not some important positive outcomes that came with that movement. We are playing chess here, and in chess one must SURVIVE the opening and mid game in order to win the end game.
Social Security and property taxes combined to make it impossible for the average person to save for their old age. If the data-point in the Susanna Wilson article, that the average Boomer American has about $25,000 in retirement savings, isn't it time to turn down the rhetoric and break out the spreadsheet/calculator/pencil & napkin? Do you want to shout down the opposition or have a rational co-examination of the facts? Well, real median household income in the U.S. is just over $50,000 per year. Social Security seizes 16% of that, and property taxes another 7% or so. Sales taxes consume another 2 or 3%... I have not gotten to income taxes yet! (And I know that at this point out come's the "tax the rich then!" crowd. I just can't respond to their silly and uninformed position. Yes, income taxes will have to rise somewhat... but there is not as much slack there as these people think.) Demographics are killing us! We were able to get away with this silly construct as long as population grew... the moment it stops - POW! Had the folks running the train set played chess growing up this would not be so hard for them to put their arms around.
Drug use! The U.S. has filled up its prisons far beyond the point of being defensible. What do we have to show for it? Is the drug problem cured? NAFC. Have we created a prison culture and gangs that perpetuate a culture of crime? You bet. You know all those men in prison? Well, they have children. And those children are growing up in poverty stricken homes dependent on government assistance. Talk about the gift that keeps on giving (for law enforcement and the justice system, that is)!!!
Speaking of those children... I'd be remiss if I didn't point out the unintended consequences of Aid to Families with Dependent children, or whatever they call it these days. 90% of African American children will receive food assistance at some point in their childhood. Over 70% are born to single mothers. This wasn't the case BEFORE the civil rights era... so what happened? As in everything I mentioned above... the GOVERNMENT happened. The government incentivized an entire culture to self-destruct. Not to worry, the government has a plan to fix it... all it takes is more money. Will it work? Has any government program worked out in the long run? Let's take a look, shall we...? Farm subsidies, the national income tax, the War on Drugs, Subsidizing the mortgage/housing market (Fannie Mae), subsidizing healthcare for the elderly (Medicare), forcing individuals to save while holding their money (lol!!!!) for safe keeping (Social Security), family law (an explosion of wealthy divorce lawyers and poor families and 55 million unborn killed)... I gotta stop here or I am going to blow a f*&^ing gasket.
I am starting to think that the end of Oil might just be a fantastic blessing. I might change the name of my blog from the "American Energy Crisis" to the "American Energy Crisis Is The Solution". In my view of the world and American chess board, it is difficult to see how the outcomes of the end of Oil could be any worse than the path we have chosen.
Tuesday, March 29, 2011
The Beauty of Spreadsheets
I have been a stockbroker, investment banker, and money manager. I have no training in "Financial Planning".
That said, anybody with a few minutes and some minor math skills can work out their financial future nearly down to the last $. I say this because I got a couple of phone calls from female friends that took exception to my last post. To anybody that was offended, or took issue, I say:
"Its nothing personal. Its just business."
Open a spread sheet. Enter your age at A1, and then add a year down the vertical boxes B1, C1.... in the next set of vertical boxes list your anticipated income per year.... in the next set of boxes list the amount of savings you anticipate being able to achieve out of that year's income.
Now... Do yourself a HUGE favor and spare yourself the "magic of compounding" sh#! you get from brokers and financial planners, and add 30% per decade (for after tax interest or returns, and to keep this worst case) and break it up by decade adding the previous decades 30% to your savings at the beginning of the new decade (this saves calculating (1 + 1/n) to the n and so you can see it by year).
OK, Done? That number at the bottom, after 40 years of work (assuming you started seriously working and saving at 25 and stopped at 65) is what you have to live on in your old age - no more, no less.
Whatever societal influences that keep you from accumulating a sufficient number to keep you from eating dog food or being homeless really are to be considered as bad for you, in the long run, as heroine.
(And look, I am talking "Joe Six-pack" here. I have friends I have met over the years in Boca Raton that have been rich and bust and rich and bust more times Carter has liver pills. They are like cockroaches, and I mean this in a nice way, in that you just can't kill them. One minute they are scraping the bottom of dumpsters, and the next they pull up in a new Bentley, complete with a new wife, kids, and a McMansion down the street from their last wife. These guys are amazing; but they have skills and chutzpuh most folks just were not blessed (or cursed, depending how you look at it) with.)
Now, see that number on the bottom? Through in a couple of divorces and moves and it is ALL GONE. You're broke, the kids are in debt for education, the family is best described as a "domestic disaster"... and it was all self-inflicted.
Just don't buy the Bullsh#!. That's all you gotta do. Stay away from the Politically Correct and get out the Spreadsheet. Life boils down to some very simple math.
That said, anybody with a few minutes and some minor math skills can work out their financial future nearly down to the last $. I say this because I got a couple of phone calls from female friends that took exception to my last post. To anybody that was offended, or took issue, I say:
"Its nothing personal. Its just business."
Open a spread sheet. Enter your age at A1, and then add a year down the vertical boxes B1, C1.... in the next set of vertical boxes list your anticipated income per year.... in the next set of boxes list the amount of savings you anticipate being able to achieve out of that year's income.
Now... Do yourself a HUGE favor and spare yourself the "magic of compounding" sh#! you get from brokers and financial planners, and add 30% per decade (for after tax interest or returns, and to keep this worst case) and break it up by decade adding the previous decades 30% to your savings at the beginning of the new decade (this saves calculating (1 + 1/n) to the n and so you can see it by year).
OK, Done? That number at the bottom, after 40 years of work (assuming you started seriously working and saving at 25 and stopped at 65) is what you have to live on in your old age - no more, no less.
Whatever societal influences that keep you from accumulating a sufficient number to keep you from eating dog food or being homeless really are to be considered as bad for you, in the long run, as heroine.
(And look, I am talking "Joe Six-pack" here. I have friends I have met over the years in Boca Raton that have been rich and bust and rich and bust more times Carter has liver pills. They are like cockroaches, and I mean this in a nice way, in that you just can't kill them. One minute they are scraping the bottom of dumpsters, and the next they pull up in a new Bentley, complete with a new wife, kids, and a McMansion down the street from their last wife. These guys are amazing; but they have skills and chutzpuh most folks just were not blessed (or cursed, depending how you look at it) with.)
Now, see that number on the bottom? Through in a couple of divorces and moves and it is ALL GONE. You're broke, the kids are in debt for education, the family is best described as a "domestic disaster"... and it was all self-inflicted.
Just don't buy the Bullsh#!. That's all you gotta do. Stay away from the Politically Correct and get out the Spreadsheet. Life boils down to some very simple math.
Monday, March 28, 2011
The Sad, Unintended Consequences of the "Women's Movement"
The Women's Movement had some positive outcomes. We hear about those outcomes everyday in stories planted in the media. This Movement also had some terrible unintended consequences.
I wonder who planted this story? (Remember, "Jeffers Media Theory" states that no article or story makes its way into the media by accident... it is bought and paid for by special interests.) Whoever it was, me thinks they were making a different point than the one I received.... For every Oprah or Hillary there are 100 million women that are going to wind up like the subject of this article.
Read that article. Then read it again. And Again.
Please allow me to translate:
This 70-year-old, destitute woman, Susanna Wilson, no doubt influenced by the Women's Movement, twice divorced/rejected family - except when it suited her, as in when she inherited a debt free home from her non-feminist mother and "patriarch" father... something Susanna is only too willing to take advantage of with no thought for the future of HER own daughter. After all, Susanna is considering a "reverse mortgage", a financial instrument that will consume ALL of the equity in her home (given enough time), leaving her own daughter nothing.... despite the fact that the home was a family asset, not an asset that came about due to Ms. Wilson's efforts and belief system. In fact, it is Ms. Wilson's f*&^ed up belief system that is causing the family home to be removed from the family's resources. Way to go, Susanna!
Allow me to sum it up:
Susanna's traditional, non-college educated parents, lived within their means, sacrificed immediate gratification so that they could be able to provide some level of security for their issue (Susanna). Susanna, Berkley educated, feminist, artist, free spirit... made no compromises (divorced twice), made no sacrifices (moved around, played hard, and saved not). The article does not mention anything about the relationship between good ol' Susanna and her daughter, other than to say the daughter is "unable to help" Susanna financially. My bet is the relationship ain't so hot in any event.
Remember "Broke Ass Grouch"? (Please read the original because the links and quotes work better there than here where I simply copied and pasted). I had this to say in my January 28, 2011 Post about some of the nasty, unintended consequences of the Women's Movement:
-----------------------------
The story from Broke-Ass Grouch that I linked to recently has been rolling around my mind ever since I first read it. Broke-Ass ("BA") is intelligent, witty, insightful, and brutally honest... with a glaring exception: BA assigns blame to the wrong people.
To my mind, and stay with me a moment while I piss off a number of special interest groups, BA was the victim of the university/industrial complex and the Feminist Marriage/Divorce Industrial complex. Herewith, BA in her own words:
Now, to be fair, Broke-Ass Grouch is neither Mexican nor was she poor until three years ago. Like many of you good-doers, Broke-Ass was raised by middle-class intellectuals to be a middle-class intellectual, and graduated from a snooty liberal arts college. Also, like many of you, she spent her career working at high-status, low-paying, terminally insecure work.
To be fair, BA's first critical error - spending the present day value of $200k on a Liberal Arts college undergrad degree In English Literature - was made as a teenager. Having been a teenager myself I can sympathize endlessly. The family resources that went into an English Degree from Bennigton College could not have been more ill spent. Let's give BA a Mulligan for that critical error... and let us learn a lesson. If you are not rich, say liquid-after-tax net worth of $5mm+... don't let the University/Industrial complex extort a fortune for an education that could be had for a library card... $200k for an engineering degree from MIT might well be worth it; $100k for an engineering degree from Georgia Tech is most definitely worth it... knowing your Faust and Thoreau, et al? Not so much. Still, BA can turn a phrase. Somehow, I think she would have been better off with a mortgage free house and a State University degree than the Lit Degree from Bennington. Just saying.
More from BA:
Broke-Ass Grouch, like many in America, found herself abruptly cashless. Like many of the heretofore liberal elite, she had been trained exclusively in a non-essential trade (writing for a living), and thus had no marketable value in the general economy. Having lived a life of unexamined comfort and self-satisfaction, Broke-Ass now found herself with never more than $37.68 in the bank, and three little children to support (though she did count herself extravagantly lucky that her two older children's father sent them to private school, and that her 12-year-old used minivan hadn't collapsed in vapors -- yet). She began to see the primacy of McDonald's Dollar Meal and rifling through the bargain bins at Walmart, searching for tube socks and jeans made by 7-year-olds in Bangladesh for a dime a day.
Hmmm. Presumably BA had a husband or partner that was at some point supporting her and her children... but somehow her husband extracted himself from supporting her while still supporting his/her children. BA does not comment much on this. I wonder why? I can only speculate, but my sense is that BA had a good thing and did not do everything within her power to protect and nurture it. Maybe BA resented the Patriarchy aspects of marriage that exist when the man is the primary provider. Maybe BA was not the loving partner she could have been. Who knows? Maybe BA prefers lonely poverty to a middle class existence as somebody's "wife"? Look, for all I know the older children's father is a No-Goodnic... that just happens to send his children to private school. And maybe he left BA for some young Tart in spite of BA's tremendous efforts to welcome him home from work everyday with the warmth of a family dinner as well as the incredible warmth BA generated in the marriage bed.
Maybe a lot of things... but I smell Feminist ideology on her writings, background, and college experience... while correlation does not imply causation, that ideology DOES NOT CORRELATE with a happy family life and long term marriage, if I may make use of understatement.
Plus, she still wanted her children to know the virtues of the liberal arts phenomenology -- the unalloyed pleasures of reading, thinking, investigating, experimenting -- even though said phenomenology had dumped her by the side of the road in middle age and left her for dead.
BA seems to recognize where she is... I merely submit that BA blames the wrong forces that put her there. For mother's of young children, the disintegration of a marriage is usually an unmitigated disaster (to say nothing of its effects on the children). Why no emphasis on imploring mothers to protect themselves and their family other than by divorce court? Our society has defined the proper role of a husband... it is there for all to see in our literature and media reports... when was the last time you saw the Media present a mother's roll in the family? It is always one of "choice". Stay at home mom, working mom.... whatever (and BULLSH*T). None of us has much of a choice about most things, and the propaganda that we do has led many to a life of therapy and Prozak.
Happiness is self-inflicted. Unfortunately, all too often, so is misery. So much of the misery of people who never miss a warm meal and always sleep in warm, clean bed comes from the culture wars and propaganda efforts of the special interest groups. We ALLOW these groups to deceive us - or WE DO NOT. We make that choice. The University/Industrial complex is only too willing to leave you as an indentured servant for the rest of your life... the Marriage/Divorce Industrial complex is only too willing to suck up vast amounts of resources that would otherwise be available to the FAMILY. It is up to us as individuals.
So what's this got to do with energy? Nothing. This is a lesson in family financial planning... and a brutal one, at that. I daresay something along these lines should be part of a Liberal Arts education.
------------------------------------
Susanna Wilson's story and Broke-Ass Grouch's story are hardly unique. This is where the vast, vast majority of women who cannot hold their marriages and families together will wind up... only it will be much, much worse in an energy constrained future. Young women would be well served to steer clear, far and wide, of the "sisters" and their silly movements. Their movement is DEAD anyway.
How dare I say that? Simple. You can't win a multi generational political war/debate/argument by aborting babies or not having them (look, I did not write the rules of demographics... I merely point them out). Hispanics now number 1 in 6 Americans. They are Catholic!!! And Catholics just aren't big on abortion. And they are going to re-write feminist history, right out of the history books. Bye!
In the long-term battle between the Women's Movement and the Church... my money's on the Church.
And look, I am not terribly religious... though I am very much Pro-Life... I am just calling 'em like I see 'em.
Young ladies: Don't waste your lives joining the side of the slaughtered. Don't let what has happened to Broke-Ass Grouch and Susanna Wilson happen to you. You are NOT special. You are one link in a chain of family that has stretch back eons and should go on eons more. Take responsibility and you will reap the rewards of family, security, a sense of belonging among other things... OR... take Broke-Ass and Susanna Wilson's path to resentment, anger, and poverty.
Sunday, March 27, 2011
Japan Powering Down?
Read this front page story on The Wall Street Journal's web site: "Powering Down for the Long Term".
Holy SMOKES!!!!!! You like apples? How do you like them apples??!!
Think about it. The fact that the world's preeminent capitalist media operation is talking about a permanent end of energy consumption growth in the world's 2nd/3rd largest economy means simply this:
The U.S. and China are next. Come on... Is the U.S. or China special? If not, then how far behind Japan is the permanent end of energy consumption growth for the other 2 of 3? Not very long at all.
While the U.S. might not be as efficient in its uses of energy, and therefore might tolerate the first round of "forced efficiency" reasonably well, this is not true of China, India, Japan, and the other large population but low per capita energy consumers (compared to the U.S.). Ergo, these nations will likely be willing to bid the price of energy much higher... with all of that outcome's concomitant effects on the U.S. as the world's largest Oil importer (as well as a nation that has come to rely on cheap Natural Gas... something the continuance of which I think must be questioned vigorously).
This is big stuff. Richard Heinlein, author of "Power Down", should be doing a victory lap right about now. Hat tip to Rich.
Holy SMOKES!!!!!! You like apples? How do you like them apples??!!
Think about it. The fact that the world's preeminent capitalist media operation is talking about a permanent end of energy consumption growth in the world's 2nd/3rd largest economy means simply this:
The U.S. and China are next. Come on... Is the U.S. or China special? If not, then how far behind Japan is the permanent end of energy consumption growth for the other 2 of 3? Not very long at all.
While the U.S. might not be as efficient in its uses of energy, and therefore might tolerate the first round of "forced efficiency" reasonably well, this is not true of China, India, Japan, and the other large population but low per capita energy consumers (compared to the U.S.). Ergo, these nations will likely be willing to bid the price of energy much higher... with all of that outcome's concomitant effects on the U.S. as the world's largest Oil importer (as well as a nation that has come to rely on cheap Natural Gas... something the continuance of which I think must be questioned vigorously).
This is big stuff. Richard Heinlein, author of "Power Down", should be doing a victory lap right about now. Hat tip to Rich.
Friday, March 25, 2011
Why We/NATO are in Libya
Most of the current leaders of the Western industrialized nations will not survive their next election if Oil is over $100 per barrel and NONE of them would survive $130 Oil.
And that's why we are bombing Libya.
This is Sarkozy's war. Without it, he was toast. France led the U.K., the U.S. and NATO into this clusterf***.
Rwanda, the Congo, North Korea et al, do not warrant a single bomb despite millions of deaths! Yet Libya does...
This is what Peak Oil looks like politically. For now.
And that's why we are bombing Libya.
This is Sarkozy's war. Without it, he was toast. France led the U.K., the U.S. and NATO into this clusterf***.
Rwanda, the Congo, North Korea et al, do not warrant a single bomb despite millions of deaths! Yet Libya does...
This is what Peak Oil looks like politically. For now.
Its not the Nuclear Reactors we need to worry about... Its the Nuclear Waste
Nuclear Power has proven to be incredibly safe and effective. To be convenient and carbonless.
Under no circumstance is Nuclear Power "clean". The simple fact is this:
The United States has put off its nuclear waste problem for 4 decades, and we are now simply a disaster waiting to happen. While it might be 1 in 10,000 that the Indian Point Power Plant will experience any kind of catastrophic outcome in any given year (and I doubt that probability calculation greatly), the odds that America will suffer a significant crisis due to its unattended nuclear waste approaches the proverbial "sure thing".
Get googling. Read.
How did this come to pass? Given Medicare, Social Security, the Federal Budget Deficit, etc... I think that's a f&%$&*ing dumb question. Our governments - federal and local - are dominated by wordsmiths (lawyers), not engineers, mechanics, mathematicians, and scientists. As our society's complexities have grown exponentially, the ability of the people minding the store to understand the critical issues facing that complexity has not grown to meet our needs.
I hope to good heavens that the American people come around to the real Nuclear issue - and it isn't earthquakes or tsunamis.
More soon.
Under no circumstance is Nuclear Power "clean". The simple fact is this:
The United States has put off its nuclear waste problem for 4 decades, and we are now simply a disaster waiting to happen. While it might be 1 in 10,000 that the Indian Point Power Plant will experience any kind of catastrophic outcome in any given year (and I doubt that probability calculation greatly), the odds that America will suffer a significant crisis due to its unattended nuclear waste approaches the proverbial "sure thing".
Get googling. Read.
How did this come to pass? Given Medicare, Social Security, the Federal Budget Deficit, etc... I think that's a f&%$&*ing dumb question. Our governments - federal and local - are dominated by wordsmiths (lawyers), not engineers, mechanics, mathematicians, and scientists. As our society's complexities have grown exponentially, the ability of the people minding the store to understand the critical issues facing that complexity has not grown to meet our needs.
I hope to good heavens that the American people come around to the real Nuclear issue - and it isn't earthquakes or tsunamis.
More soon.
Thursday, March 24, 2011
Saudi Arabia making up for Libya?
Is the KSA making up for the lost exports from Libya? U.S. Oil imports over the past 4 weeks say no.
----------------------------------------------
Copper reversed course, and Gold and Silver are making new highs. Not sure what to make of it all... I do like Platinum, though.... for whatever that's worth.
----------------------------------------------
Anybody that claims that people don't game ANY and EVERY entitlement program should read this. The demand for free money, or free services, will always be unlimited.
----------------------------------------------
Spring duty on the homestead has been a bit overwhelming. Chasing kids, both mine and the goats', fencing, feeding, starting seeds, digging garden beds... not a lot of time left over for blogging - and absolutely NO NEED to contrive exercise routines at a "fitness club".
Welcome to the Post-Peak Oil world. No bells rang (though not a few bombs have been dropped). First, employment fell... it humbled people, and the people adapted (except those that won't; nature will see to them). The story is unfolding, and will continue unfolding for the next human lifetime. Between here and there, the life of an individual living in the industrial West is going to change fairly dramatically. For most, it may well unfold slowly enough to make adjustments for on the way. For others, not so much. Still, I think this is a time to enjoy... as there are no true "do overs" in person's life.
Over the last four weeks, crude oil imports have averaged nearly 8.5 million barrels per day, 393 thousand barrels per day below the same four-week period last year.Seems there is good reason, given Oil inelasticity, for the surge in prices over the past month or so.
----------------------------------------------
Copper reversed course, and Gold and Silver are making new highs. Not sure what to make of it all... I do like Platinum, though.... for whatever that's worth.
----------------------------------------------
Anybody that claims that people don't game ANY and EVERY entitlement program should read this. The demand for free money, or free services, will always be unlimited.
----------------------------------------------
Spring duty on the homestead has been a bit overwhelming. Chasing kids, both mine and the goats', fencing, feeding, starting seeds, digging garden beds... not a lot of time left over for blogging - and absolutely NO NEED to contrive exercise routines at a "fitness club".
Welcome to the Post-Peak Oil world. No bells rang (though not a few bombs have been dropped). First, employment fell... it humbled people, and the people adapted (except those that won't; nature will see to them). The story is unfolding, and will continue unfolding for the next human lifetime. Between here and there, the life of an individual living in the industrial West is going to change fairly dramatically. For most, it may well unfold slowly enough to make adjustments for on the way. For others, not so much. Still, I think this is a time to enjoy... as there are no true "do overs" in person's life.
Friday, March 18, 2011
The MENA Catch 22
What's the U.N. and the Western powers going to do? Demand individual rights for Libyans but not for Saudis? Or is Totalitarianism OK for Saudi Arabia but not for Libya?
This has just opened a whole other can of worms for the West.
Good luck, fellas.
This has just opened a whole other can of worms for the West.
Good luck, fellas.
Thursday, March 17, 2011
Mega Cities, Cont...
The give and take among thinking people on very complicated social outcomes requires all of us to be willing to evolve our beliefs and opinions. Not a few of the people commenting here have turned my head around... and not a few times, either. One has to be willing to evolve...
I have been noodling ChrisinGa's comments in my previous post. One of his lines really got my attention:
"Resources will be drawn into cities along the way." That line went on, over and over again in my mind all day... "along the way"... My sense is that Chris is right, only he puts the "along the way" well into the future, and I am starting to believe (not finished thinking about it, but wanted to expand the discussion) that his "Resources will be drawn into cities along the way" has likely been going on for some time, may well continue for some time, but is closer to the end than the beginning.
Look at the U.S. banking center, New York. The only thing keeping the lights on in New York is the Federal Reserve. The Fed has engineered an environment whereby the big New York banks and hedge funds can borrow money for nearly ZERO and take the proceeds and buy long maturity bonds. The Fed has telegraphed every move to this crew along the way, and these folks are printing money.
That does not mean that that strategy won't end badly... I think it will... but it does comport with Chris' idea about resources being drawn in. The money these banks/funds are making on the spread is coming from somewhere... the gain is somebody's loss.
My view of Mega Cities as technological islands that need to import everything ALSO comports with Chris' view AND my assertion that this is already well under way. The resources HAVE been being drawn into the large cities, and I would assert that the tipping point for the failure of that phenomenon is not that far in the future for the mega-cities in the nations importing the most Oil.
I have been noodling ChrisinGa's comments in my previous post. One of his lines really got my attention:
I guess I will just have to disagree with all of you. We already see today suburbia contracting back into the core of the cities today. We already see the highway system, its bridges, and drainage systems falling apart.
Resources will be drawn into the cities all along the way. Sure large scale farming will receive resources. Most especially those along rail lines and those that are drawn into what was once suburbia. And we are also likely to see manufacturing come back to the states.
There is no doubt that there will be a process the transforms us from what we are today to what we will be. But I can assure you with the vast majority of the population in the cities that with the exception of farming rural America will get the short end of the stick in nearly every category first.
"Resources will be drawn into cities along the way." That line went on, over and over again in my mind all day... "along the way"... My sense is that Chris is right, only he puts the "along the way" well into the future, and I am starting to believe (not finished thinking about it, but wanted to expand the discussion) that his "Resources will be drawn into cities along the way" has likely been going on for some time, may well continue for some time, but is closer to the end than the beginning.
Look at the U.S. banking center, New York. The only thing keeping the lights on in New York is the Federal Reserve. The Fed has engineered an environment whereby the big New York banks and hedge funds can borrow money for nearly ZERO and take the proceeds and buy long maturity bonds. The Fed has telegraphed every move to this crew along the way, and these folks are printing money.
That does not mean that that strategy won't end badly... I think it will... but it does comport with Chris' idea about resources being drawn in. The money these banks/funds are making on the spread is coming from somewhere... the gain is somebody's loss.
My view of Mega Cities as technological islands that need to import everything ALSO comports with Chris' view AND my assertion that this is already well under way. The resources HAVE been being drawn into the large cities, and I would assert that the tipping point for the failure of that phenomenon is not that far in the future for the mega-cities in the nations importing the most Oil.
Wednesday, March 16, 2011
Mega Cities
I can't help but think things out in terms of financial outcomes. When I began writing this blog it was to forewarn clients, family, and friends about what was - at the time - the coming collision of the housing crash and Oil price surge and what it was likely to do to their life savings.
Now, using that framework I want to expand on my thought that "mega cities" will become "uninhabitable" in an energy constrained world.
First, one must accept the assumption - that serious energy constrainment (I know, the word is not in the dictionary... but I like the way it sounds) is coming, at least in how industrial age energy is currently defined. If you reject this, then you will reject the rest of my assertions.
"Amateurs talk strategy. Professionals talk logistics." - unknown
Mega-cities: New York, Sao Paulo, Tokyo, L.A. et al are technological islands - they must import everything. Think about that for a minute. These regions have supply chain infrastructure/liabilities that are completely reliant on the smooth functioning of myriad other systems: commuting and transportation systems to bring workers in, maintenance systems, worker healthcare systems, food distribution systems... now take a look at what is happening in Tokyo right now. Somewhat unaffected directly by the earthquake and tsunami their distribution system has failed miserably.
My parents-in-law live near Osaka another couple hundred miles further than Tokyo from the disaster... and they have empty stores and rolling blackouts. The only difference is this: In a world wide energy constrained system, one like Japan is experiencing now, the cavalry is NOT coming because the cavalry is energy constrained, too. So, here you are on this energy constrained technological island (not Japan, ALL mega-cities are "technological islands) that requires the importation of everything AND it requires the exportation of all of the stuff previously imported (though in a somewhat different form): Refuse and sewage.
My assertion is pretty simple, really. Mega-cities will not be able to logistically support their populations with food, water, and other supplies, and will be unable to process the refuse and sewage during a period of serious energy constrainment... and the outcome would unfold at lightening speed... and, this will have seriously negative effects on property values and employment, and hence banking, within these mega-cities. These cities will depopulate, and will do so long before the "roving bands of looters" scenario unfolds (not that people won't take what they need... they will simply run out of stuff to take and with food imports into the technological island falling will need to find better ways to spend their time).
The economic strains coming from all of this would be profound. Why spend your life working to acquire assets that will, by mathematical necessity, become nearly worthless? You'd be far better doing just about anything else. 20 million people living on a postage stamp piece of land is not a well considered living situation as currently constructed here in the U.S. in the absence of energy inputs in order to provision them.
My friend the Mad Scientist has reminded me often that India has triple the population and roughly the same land area, and that is true (of course, India does not have the U.S. need for space heating). I did not say we couldn't live with what we have... I said that the mega-cities would depopulate and the property prices would decline dramatically with all of that outcome's effects on banking. Americans will have a very hard time adjusting to an Indian standard of living.
If you accept my analysis so far... why would you send your offspring to be educated, at great expense in years and treasure, in a field that will require him/her to live in a mega city in order to make a living? Why pay big bucks to live in squalor? Wouldn't you be better off educating them in something very practical (engineering, dentistry, plumbing.... one of my buddies in Florida is a Dentist of sorts... he reads my stuff and recently told me that his son is going to be studying engineering in undergrad, and credits me somewhat. I was thrilled to hear it, and even more thrilled to here that his son wants to go to dental school after engineering college) acquiring productive farm land (I know I have been beating this drum for years... and farm prices are up BIG... but my bet is that they are a far better investment than a liberal arts degree from a "progressive" leaning college), opening a family business, and getting acclimated to your new life? Why would you continue to pay the mortgage on a condo that will be bird nesting grounds? Or live in a home with a property tax bill that is draining the life from you? Why would you buy an expensive automobile?
The population flight to the mega cities of the past 100 years was a flight towards the energy importing, technological islands I mentioned above. As the energy available for import into these regions declines, so will the pull that these regions have exerted on the population. The events unfolding in Japan will put nuclear on hold, long enough, to demolish the attempt to cushion the energy blow from Oil - not that I necessarily agree that doing so is a good idea; or not - long enough that my scenario, I think, is the most likely scenario to unfold.
Lastly, the rules seem to change every f$&**!! day. These are the rules as I see them given the latest data. If the data changes, I will change my mind.
Now, using that framework I want to expand on my thought that "mega cities" will become "uninhabitable" in an energy constrained world.
First, one must accept the assumption - that serious energy constrainment (I know, the word is not in the dictionary... but I like the way it sounds) is coming, at least in how industrial age energy is currently defined. If you reject this, then you will reject the rest of my assertions.
"Amateurs talk strategy. Professionals talk logistics." - unknown
Mega-cities: New York, Sao Paulo, Tokyo, L.A. et al are technological islands - they must import everything. Think about that for a minute. These regions have supply chain infrastructure/liabilities that are completely reliant on the smooth functioning of myriad other systems: commuting and transportation systems to bring workers in, maintenance systems, worker healthcare systems, food distribution systems... now take a look at what is happening in Tokyo right now. Somewhat unaffected directly by the earthquake and tsunami their distribution system has failed miserably.
My parents-in-law live near Osaka another couple hundred miles further than Tokyo from the disaster... and they have empty stores and rolling blackouts. The only difference is this: In a world wide energy constrained system, one like Japan is experiencing now, the cavalry is NOT coming because the cavalry is energy constrained, too. So, here you are on this energy constrained technological island (not Japan, ALL mega-cities are "technological islands) that requires the importation of everything AND it requires the exportation of all of the stuff previously imported (though in a somewhat different form): Refuse and sewage.
My assertion is pretty simple, really. Mega-cities will not be able to logistically support their populations with food, water, and other supplies, and will be unable to process the refuse and sewage during a period of serious energy constrainment... and the outcome would unfold at lightening speed... and, this will have seriously negative effects on property values and employment, and hence banking, within these mega-cities. These cities will depopulate, and will do so long before the "roving bands of looters" scenario unfolds (not that people won't take what they need... they will simply run out of stuff to take and with food imports into the technological island falling will need to find better ways to spend their time).
The economic strains coming from all of this would be profound. Why spend your life working to acquire assets that will, by mathematical necessity, become nearly worthless? You'd be far better doing just about anything else. 20 million people living on a postage stamp piece of land is not a well considered living situation as currently constructed here in the U.S. in the absence of energy inputs in order to provision them.
My friend the Mad Scientist has reminded me often that India has triple the population and roughly the same land area, and that is true (of course, India does not have the U.S. need for space heating). I did not say we couldn't live with what we have... I said that the mega-cities would depopulate and the property prices would decline dramatically with all of that outcome's effects on banking. Americans will have a very hard time adjusting to an Indian standard of living.
If you accept my analysis so far... why would you send your offspring to be educated, at great expense in years and treasure, in a field that will require him/her to live in a mega city in order to make a living? Why pay big bucks to live in squalor? Wouldn't you be better off educating them in something very practical (engineering, dentistry, plumbing.... one of my buddies in Florida is a Dentist of sorts... he reads my stuff and recently told me that his son is going to be studying engineering in undergrad, and credits me somewhat. I was thrilled to hear it, and even more thrilled to here that his son wants to go to dental school after engineering college) acquiring productive farm land (I know I have been beating this drum for years... and farm prices are up BIG... but my bet is that they are a far better investment than a liberal arts degree from a "progressive" leaning college), opening a family business, and getting acclimated to your new life? Why would you continue to pay the mortgage on a condo that will be bird nesting grounds? Or live in a home with a property tax bill that is draining the life from you? Why would you buy an expensive automobile?
The population flight to the mega cities of the past 100 years was a flight towards the energy importing, technological islands I mentioned above. As the energy available for import into these regions declines, so will the pull that these regions have exerted on the population. The events unfolding in Japan will put nuclear on hold, long enough, to demolish the attempt to cushion the energy blow from Oil - not that I necessarily agree that doing so is a good idea; or not - long enough that my scenario, I think, is the most likely scenario to unfold.
Lastly, the rules seem to change every f$&**!! day. These are the rules as I see them given the latest data. If the data changes, I will change my mind.
Tuesday, March 15, 2011
"Millions in Japan freeze without heat, electricity"
"Millions in Japan freeze without heat, electricity".
Fast forward that to 2018 and fill in Chicago or Green Bay; Boston or New York City; Philadelphia or Cleveland.
The simple fact is this: We here in the U.S. are seeing our future circumstances now, in Japan. The nuclear mirage is over.
The energy crisis is far more than being inconvenienced by slightly higher gasoline prices (Gasoline makes for a very poor heating fuel, btw. And when crude is cracked the primary output is 1 part diesel and 2 parts gasoline, with lesser amounts of other useful stuff). We cannot shift gasoline production over to heating fuel. That just ain't the way things work.
The U.S. will need to shift HARD to Nat Gas heating, and it really won't have as much time as we might think.
Moreover, you know that debate on the Web about whether City or Country living is best in an energy constrained world? I think we have our answer (although defining "city" is an issue). Mega cities will be uninhabitable. Period.
Fast forward that to 2018 and fill in Chicago or Green Bay; Boston or New York City; Philadelphia or Cleveland.
The simple fact is this: We here in the U.S. are seeing our future circumstances now, in Japan. The nuclear mirage is over.
The energy crisis is far more than being inconvenienced by slightly higher gasoline prices (Gasoline makes for a very poor heating fuel, btw. And when crude is cracked the primary output is 1 part diesel and 2 parts gasoline, with lesser amounts of other useful stuff). We cannot shift gasoline production over to heating fuel. That just ain't the way things work.
The U.S. will need to shift HARD to Nat Gas heating, and it really won't have as much time as we might think.
Moreover, you know that debate on the Web about whether City or Country living is best in an energy constrained world? I think we have our answer (although defining "city" is an issue). Mega cities will be uninhabitable. Period.
Monday, March 14, 2011
So much for the Nuclear Solution....
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
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
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.
Subscribe to:
Posts (Atom)