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[hit_ny]

How much of an effect is this movement going to have ?

This crisis is an opportunity for President Obama to lead the U.S. in a new direction; one that values economic growth, but protects the well-being of the public before the bank accounts of the world's financial elite.

But, so far, the policies proposed by the Obama administration to deal with the crisis look too much like the Bush-Paulson bailouts.

Obama Told Us To Speak Out, But Is He Listening?

[rjm]

Debt is the problem. They think more debt is the solution. The insanity is mind boggling.

[bob]

During the last global recession the IMF forced austerity measures on the East Asian tigers which devastated their economies.

In Argentina, the economy was destroyed as well as the government. The way they got out was to default on the debt and stimulate internal spending.

During the depression the unemployment rate was 25%. The New Deal spending dropped that to around 12%. After re-election in 1936 Roosevelt at the urging of bankers tried reducing spending. There was an immediate result of another round of recession.

The final end to the depression came about because of the massive debt financed public spending program known as WWII.

This is the reason there are NO developed countries trying to use the medicine of austerity to get themselves out of this problem.

[hit_ny]

Cpl of interesting interviews with Bill Moyers

The Grieder one & The Kevin Black one

Leaving aside the extra public debt to paid down the line.

They both seem to express a lack of confidence as to whether this problem will be solved. They seem to think its just reshuffling the same people & institutions. That this could occur again in the future. That not enough is being done to stem the systemic risk inherent in the system.

I like the comparison with the FAA, whenever an accident occurs and everything is done to ensure the same does not repeat but wonder whether that makes sense in the financial world.

[rjm]

During the last global recession the IMF forced austerity measures on the East Asian tigers which devastated their economies.

In Argentina, the economy was destroyed as well as the government. The way they got out was to default on the debt and stimulate internal spending.

During the depression the unemployment rate was 25%. The New Deal spending dropped that to around 12%. After re-election in 1936 Roosevelt at the urging of bankers tried reducing spending. There was an immediate result of another round of recession.

The final end to the depression came about because of the massive debt financed public spending program known as WWII.

This is the reason there are NO developed countries trying to use the medicine of austerity to get themselves out of this problem.

Your 30's depression history is accurate but I don't think we have a good understanding of why WWII ended the depression.

My theory is that:
1) Oil was abundant and we were in steep usage rampup thus our physical labor (productivity) was leveraged up with energy.
2) Women went to work thus increasing household incomes and consumption.
3) War destroyed stuff which needed to be re-purchased from the US (the only remaining healthy developed country).
4) Switch to $US reserve currency may also have something to do with it.

I'm still trying to better understand this. It's important that we have an accurate understanding because today's circumstances are much different and may require much different solutions.

[Matt]

3) War destroyed stuff which needed to be re-purchased from the US (the only remaining healthy developed country).

I think that's an important distinction.  After World War II, we were the industrial engine of the world.  Today our largest export is treasury bills.

However, borrowing money to invest (stimulus) can be the right thing to do if the return on investment (GDP growth, tax revenue growth, etc.) exceeds the interest paid on the money.  Or even if it simply exceeds the loss (unemployment, manufacturing, etc.) that would be incurred without the stimulus. 

The key is to make sure we're investing in things that will have a long-term, recurring return.  I would say we have some work to do on this front.  Our biggest government outlays are entitlements to the elderly and military spending; neither of which are particularly fruitful for long term growth.  Some of the current stimulus efforts are also a bit circumspect, although I'm trying to give the latest go-round the benefit of the doubt.

The good news is that it's one of the cheapest times in history for the government to borrow money:
http://finance.yahoo.com/echarts?s=^TNX#chart2:symbol=^tnx;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

[benn600]

I would personally really like to see the national debt greatly reduced.  The government and people should learn to work within their available funds more and stop using credit for everything.  I was appalled to hear that a big amount of growth in business is directly related to credit availability.  I suppose it can be good in some cases but it worries me when it gets out of control.

[rjm]

The good news is that it's one of the cheapest times in history for the government to borrow money:
http://finance.yahoo.com/echarts?s=^TNX#chart2:symbol=^tnx;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Yes but they are selling mostly short term debt. When rates rise due to inflation and/or default risk fears the US is going to be in a world of hurt.

I can't remember if I've already provided this link, but here is the best information you will find on the planet to understand our situation. Watch his Crash Course video from start to finish. You won't regret your investment of time.

http://www.chrismartenson.com/

[hit_ny]

Yes but they are selling mostly short term debt. When rates rise due to inflation and/or default risk fears the US is going to be in a world of hurt.

US credit rating is still AAA assuming rating agencies have any credibilty left

If default risk increases, yes, then the interest rate to be paid back will rise. But consider that current public debt is ~80% of total GDP. Public debt is the only thing to worry about, private debt is larger but its not relevant here. Japan's public debt-to-GDP  is almost 2x.

Now what's that rule of thumb about getting a mortgage, that the total borrowed cannot exceed 3x income. If it applies on a country wide scale, that means problems begin when public debt is nearing 3x GDP. That will happen only if they keep on issuing huge $trill stimulus plans for the next decade. 

But thats not the plan

Watch his Crash Course video from start to finish. You won't regret your investment of time.

http://www.chrismartenson.com/.

Martenson means well but there are several factual errors in his presentation.

[bob]

Referring to programs for the elderly as "entitlement" is misleading (deliberately on the part of some people I believe).

I pay into those programs every week! IF there is problem with a shortage of funding for social security in 2042 (it would still be able to meet 80% of expenditures under the most pessimistic assumptions), it can be solved in a a couple of simple ways. One progressive, by raising the cap, one regressive, like Reagan did, increasing the tax rate.

Medicare is more problematic. A good start would be the restructuring of the part D benefit (interpreted by me as kickbacks to the drug and insurance companies for campaign contributions) to make it more like the way the VA does it (volume purchases with negotiated prices).

[rjm]

Now what's that rule of thumb about getting a mortgage, that the total borrowed cannot exceed 3x income. If it applies on a country wide scale, that means problems begin when public debt is nearing 3x GDP. That will happen only if they keep on issuing huge $trill stimulus plans for the next decade. 

But thats not the plan

Martenson means well but there are several factual errors in his presentation.

mmm, my understanding is that total debt plus unfunded liabilities far exceeds 3x GDP.

I would be very interested to know what facts you think Martenson was wrong on. I am in truth seeking mode.

[hit_ny]

Referring to programs for the elderly as "entitlement" is misleading (deliberately on the part of some people I believe).

There is a lot of misleading info out there as there is very little accountability.

In today’s television news market, the cable network and its stars are like the financiers they cover — media short-sellers trading shamelessly on publicity, good or bad, so long as it drives up ratings. There isn’t enough regulation on Wall Street, and there’s hardly any accountability on cable news: it’s a 24-hour star system where opinions — and showmanship — matter more than facts.

mmm, my understanding is that total debt plus unfunded liabilities far exceeds 3x GDP.

Which are ?

I would be very interested to know what facts you think Martenson was wrong on. I am in truth seeking mode.

Chapter 2 talks about Peak Oil.

Chapter 5 says

What’s going to happen when 100% of our surplus money or energy is being used to simply grow? The result is going to be stagnant prosperity.

There is no limit to how much money can be created so long as a govt. keeps its eye on GDP growth and if its able to pay back, there won't be any issues. That money is "backed" by all the goods and services in the economy; that money has value because the public may exchange it for valued goods and services in the economy.

Energy is dependent on how much is found, peak oil is bogus. Dwindling resources can be better managed.

The increases in Oil prices last year were mostly due to speculation on the futures markets due to fear of an Iranian invasion and the consequences. Now, that fear has abated and in addition, with the credit crisis, the demand for oil dropped, way down.  In fact OPEC is now trying to reduce oil production as they fear the price might drop even further. That takes care of one of Martenson's 'E's namely Energy.

Chapter 6

dollars are the liability of the Federal Reserve, a private entity entrusted to manage the US money supply and empowered by the Federal Reserve Act of 1913 to perform this function.

Fed is not a private entity, its an 'independent' entity. 9 times out of 10 whenever you see the Fed described thus, there is something amiss with the rest.

By the early 1990’s, the (Yugoslav) government had used up all its own hard currency reserves, and they proceeded to loot the private accounts of citizens.

If there are no reserves left to back up the printing press then all hell will break lose and it did. So even tho fiat money is not redeemable for some valuable commodity it must be backed up with other assets, be they gold or other fiat currencies. This is a crucial point.

we can safely state that inflationary money regimes impose a penalty on savers.

Absolutely!, if you have an irresponsible govt, coercing a central bank to keep on printing money. Which is why a central bank must be 'independent' if it is to be successful.

Chapter 8

we can formulate a truly profound statement, which is that at a minimum, each year enough new money must be loaned into existence to cover the interest payments on all of the past outstanding debt. A corollary of this is that the amount of debt in the system will always exceed the amount of money.

But in Chapter 7 he said

Money is loaned into existence. Conversely, when loans are paid back, money ‘disappears.’

Debt increases yearly but don't forget some of it also gets settled. The money is used to increase GDP so more services & goods can be produced which requires even more money in loans, which allows the creation of new debt. Otherwise the system grinds to a halt and no one has any confidence, very much like the subprime crisis.

perpetual expansion is a requirement of modern banking

Would rephrase as perpetual expansion is a requirement in any economy that desires to grow.

Chapter 9

In 1933, newly-elected President Franklin D. Roosevelt decided to counter the falling money supply in a most drastic manner. To accomplish this he confiscated all privately-held gold and immediately devalued the US dollar.

Aka Executive Order 6102

Confiscation, from the Latin confiscatio 'joining to the fiscus, i.e. transfer to the treasury' is a legal seizure without compensation by a government or other public authority.

But EO 6102 was more like a forced sale, the govt. did pay for the gold, not confiscate as implied. Furthermore...

Order 6102 specifically exempted "customary use in industry, profession or art"--a provision that covered artists, jewelers, dentists, and electricians among others. The order further permitted any person to own up to $100 in gold coins (a face value equivalent to five troy ounces of Gold).

Our most recent trillion dollars? That was created in the last four-and-a-half-months. My questions to you are, “What will it be like to live here when our nation is creating a trillion dollars every four weeks? How about every four days? Every four hours? Four minutes? Where does it stop, if not in hyperinflation and the destruction of the dollar, and, by extension, our nation?”

So long as the US is capable of meeting short term debt, so long as the economy continues to grow. Face it trillion dollars in the last 4 months in stumulus packages is due to the recent crisis. Once that passes and it will like evey other recession prior, things will cool down. Trillion dollars every 4 hours or less is veering into fantasy territory.

Yes, 100 years ago trillion in 4 months would be fantasy as well but consider the GDP difference since then and the increased spending power it brought along with it. Again, so long as the economy is growing it does not matter what the debt is.

Chapter 10

Can you imagine what it would be like to live in a world where you could earn a thousand dollars, put it in a coffee can in the backyard, and your great- great grandchildren could dig it up and enjoy the same benefits from that thousand dollars as you would have 111 years previously? The country was on a silver and gold standard during this period and advanced tremendously while enjoying near-perfect price stability during times of peace.

Wonder what was the GDP growth in the country during this time. if a dollar in 1665 was the same as a dollar in 1776 ?

Unless we know how the economy grew, its hard to come to any conclusion. Note he has said "advanced tremendously" but failed to give any figure.

I'll stop at this point and see your replies

[rjm]

Thanks for responding.

I find it both fascinating and frightening that 2 intelligent people can have completlely different understandings of critical facts that we must agree and act on soon to avoid a collapse of civilization as we know it.

Which are ?

Big unfunded liabilities that I am aware of include social security, bank deposit insurance, and bailout loans.

Chapter 2 talks about Peak Oil.

Chapter 5 says
There is no limit to how much money can be created so long as a govt. keeps its eye on GDP growth and if its able to pay back, there won't be any issues. That money is "backed" by all the goods and services in the economy; that money has value because the public may exchange it for valued goods and services in the economy.

Energy is dependent on how much is found, peak oil is bogus. Dwindling resources can be better managed.

The increases in Oil prices last year were mostly due to speculation on the futures markets due to fear of an Iranian invasion and the consequences. Now, that fear has abated and in addition, with the credit crisis, the demand for oil dropped, way down.  In fact OPEC is now trying to reduce oil production as they fear the price might drop even further. That takes care of one of Martenson's 'E's namely Energy.

GDP is roughly proportional to energy use. If energy supplies are not constrained then you are correct. I believe that our total energy supply peaked about 2 years ago and has been bumping along a plateau. I expect total available energy to begin to decline at about 6-9% per year starting within 3 years. If I am correct then no further GDP growth will be possible and the U.S.'s current stimulus strategy will leverage (i.e. make worse) the hardship on our horizon.

Chapter 6

Fed is not a private entity, its an 'independent' entity. 9 times out of 10 whenever you see the Fed described thus, there is something amiss with the rest.
If there are no reserves left to back up the printing press then all hell will break lose and it did. So even tho fiat money is not redeemable for some valuable commodity it must be backed up with other assets, be they gold or other fiat currencies. This is a crucial point.
Absolutely!, if you have an irresponsible govt, coercing a central bank to keep on printing money. Which is why a central bank must be 'independent' if it is to be successful.

Chapter 8
But in Chapter 7 he said
Debt increases yearly but don't forget some of it also gets settled. The money is used to increase GDP so more services & goods can be produced which requires even more money in loans, which allows the creation of new debt. Otherwise the system grinds to a halt and no one has any confidence, very much like the subprime crisis.
Would rephrase as perpetual expansion is a requirement in any economy that desires to grow.

I think you share the same views as the vast majority of the world's economists and leaders. I think they are fundamentally wrong on 2 key points. Exponential growth is not possible in perpetuity because we live on a fixed size sphere. And monetary policy is at the core of all of our economic problems over the last 200 years (see mises.org for further information).

Chapter 9
Aka Executive Order 6102

Confiscation, from the Latin confiscatio 'joining to the fiscus, i.e. transfer to the treasury' is a legal seizure without compensation by a government or other public authority.

But EO 6102 was more like a forced sale, the govt. did pay for the gold, not confiscate as implied. Furthermore...

You are technically correct. I think forcing the sale of an asset one day and then increasing the price of the asset the next day is the same as confiscation.

So long as the US is capable of meeting short term debt, so long as the economy continues to grow. Face it trillion dollars in the last 4 months in stumulus packages is due to the recent crisis. Once that passes and it will like evey other recession prior, things will cool down. Trillion dollars every 4 hours or less is veering into fantasy territory.

Yes, 100 years ago trillion in 4 months would be fantasy as well but consider the GDP difference since then and the increased spending power it brought along with it. Again, so long as the economy is growing it does not matter what the debt is.

I hope you are right but I fear you are wrong and I think you will learn a very very painful lesson within 24 months.

[KingSparta]

Put Jean Garofalo In-Charge

[hit_ny]

Big unfunded liabilities that I am aware of include social security, bank deposit insurance, and bailout loans.

Martenson does talk about these later on, tho social security,medicare etc are the only ones i think he mentions, if you want me to continue with the rest of his presentation, will do so.

I'm not too aware why bank deposit insurance matters here.

Bailout loans end up as public debt which will be accounted for.

GDP is roughly proportional to energy use. If energy supplies are not constrained then you are correct. I believe that our total energy supply peaked about 2 years ago and has been bumping along a plateau. I expect total available energy to begin to decline at about 6-9% per year starting within 3 years. If I am correct then no further GDP growth will be possible and the U.S.'s current stimulus strategy will leverage (i.e. make worse) the hardship on our horizon.

I don't believe they are, at least not within our lifetimes. The peak oil thing keeps coming up and goes away. So either we don't really know how much is left or there has not been an active investigation into alternative sources. I don't mean solar, wind here, just the sources that would be more expensive to extract. The reason that has not happened is it has not been worth it since there was enough already at cheap rates.

The middle east has proven reserves for at least another 100 years (if not longer). What about developments that make deeper off-shore drilling feasible. Canada's always bragging about its tar sands and making it look like its bigger than whats in the middle east. Care to put a figure on how much untapped oil there is under the oceans

I think you share the same views as the vast majority of the world's economists and leaders. I think they are fundamentally wrong on 2 key points.

Trying to be a pragmatist, to understand what the current system is and how it got where it is. Most of my reading is constrained to reputable magazines or papers on this subject. The people that get paid for their product as opposed to  those that teach.

Now if there were a conflict of interest in what the majority of the world's economists or leaders were speaking off you would be right. Actually leave out the leaders, they are the biggest liars, what about those economists tho

Is there a conflict of interest in what they are saying ?

Quite a few did warn beforehand about the current crisis.

And monetary policy is at the core of all of our economic problems over the last 200 years (see mises.org for further information).

Well, thats the Austrian school for you

I've seen some of the literature on the mises site and a lot of it is interesting but in the end, i'm looking for correlation with the real world.

How popular is mises on college campuses ? Does it form part of the curriculum. What use would it be in a world that does not work the way they deem it should be. Sure it explains things here & there but its not what the current system is about is it.

One of my pet quibbles is their obsession with gold. If money isn't backed by gold its somehow worthless. absolutely true, and if a govt. is irresponsible with  a fiat system, that will defnitely happen. But what about the majority of the world which DOES have responsible central banks etc.  How worthless is their currency ?

They also don't like fractional banking either but its not profitable to run a bank without it. Any bank that did not do it would go out of businesses to rivals that DID do it.  In short the Austrian school is advocating for monetary reform. All fine & good. But it needs buy in from the powers that be. And if it were in their interest it would have happened already. Finance & banking is the fuel that the economy runs on.

Exponential growth is not possible in perpetuity because we live on a fixed size sphere.

Assuming oil is not a problem for the short term, I'd say its possible so long as GDP growth is possible. Does not have to be exponential. If we develop alternative sources of energy ie fusion, within the next 50 years who's to say where that limit is

I hope you are right but I fear you are wrong and I think you will learn a very very painful lesson within 24 months.

What's your reason ?

Everytime some one tells me this it has the same affect as a fortune cookie telling me the contrary 

[rjm]

Martenson does talk about these later on, tho social security,medicare etc are the only ones i think he mentions, if you want me to continue with the rest of his presentation, will do so.

I've had the rare and fortunate opportunity over the last 2 years to study almost full-time world affairs, economics, human behavior, and history. I've read many many authors with many conflicting perspectives and I can say with authority that Chris Martenson is one of a very small number of thinkers in the world that understands most of the major economic and biophysical forces at play today.

So yes, if you want to understand what is going on I recommend you complete Chris Martenson's Crash Course. Other thinkers worth your time include Jason Bradford, Albert Bartlett, Saul Griffith, David Holmgren, and Richard Heinberg.

fyi: Jim Puplava of the Financial Sense Newshour did an excellent one hour interview with Chris Martenson today. You can get the podcast here: http://www.financialsense.com/fsn/main.html

I'm not too aware why bank deposit insurance matters here.

Bailout loans end up as public debt which will be accounted for.

There is a high probability that several more large financial institutions will fail. If this occurs the US government will be on the hook to pay deposit insurance and will lose money loaned via bail outs. The point is that when looking at government debt it is important to include all liabilities, not just the amount borrowed to fund daily operations.

I don't believe they are, at least not within our lifetimes. The peak oil thing keeps coming up and goes away. So either we don't really know how much is left or there has not been an active investigation into alternative sources. I don't mean solar, wind here, just the sources that would be more expensive to extract. The reason that has not happened is it has not been worth it since there was enough already at cheap rates.

The middle east has proven reserves for at least another 100 years (if not longer). What about developments that make deeper off-shore drilling feasible. Canada's always bragging about its tar sands and making it look like its bigger than whats in the middle east. Care to put a figure on how much untapped oil there is under the oceans

You views align with those of the majority and it is understandable given the poor information provided by our governments and mass media, and given the market price swings that can easily be interpreted as false alarms that imply there is no problem.

I could provide a book's worth of reasons on why we have an imminent energy problem but I would only be repeating high quality information that is available from many sources such as www.theoildrum.com. Instead I will try to convince you with common sense and everyday observations:

- As proof that peak oil is a fact and not just one of many competing theories it is instructive to review US history. Early in the last century the US was the world's largest producer of oil and the world's largest exporter of oil. US production has been in decline since the early 80's and the US is now the world's largest importer of oil. Why? Because US oil fields were finite and depleted over time. The majority of high quality low cost oil comes from so called "giant" fields in the Middle East, Mexico and a few other places. Most of these giant fields are getting old and some, such as those in Mexico, are already in rapid decline. We are finding new oil but it is just barely keeping up with the decline in existing well production. Data suggests we will cross the threshold into permanent decline in a few years. My guess is within 3 years.  For more information get the latest report by the International Energy Agency. They are the official world authority and until last year were predicting we had nothing to worry about for decades. Last year they did an abrupt about face and using politically correct words are now saying we have a crisis. It's mind boggling that the mass media has not reported more on this seminal report.

- Last year we observed oil prices climb to $150+ a barrel. If you study the data over this period you will see that world production did not increase in response to the high price. Why? Because production was already operating at maximum capacity.

- We are now in an economic depression. Conventional wisdom would suggest that oil prices should be falling due to depressed demand. Instead we are seeing a slow steady rise in oil prices. Why? Because demand is slightly larger than supply, and supply is constrained at this price.

With regard to alternate energy and the scale of the investments that will be required to replace fossil energy there is no better summary than a talk given by Saul Griffith here:
http://fora.tv/media/rss/Long_Now_Podcasts/podcast-2009-01-16-griffith.mp3

Trying to be a pragmatist, to understand what the current system is and how it got where it is. Most of my reading is constrained to reputable magazines or papers on this subject. The people that get paid for their product as opposed to  those that teach.

Now if there were a conflict of interest in what the majority of the world's economists or leaders were speaking off you would be right. Actually leave out the leaders, they are the biggest liars, what about those economists tho

Is there a conflict of interest in what they are saying ?

Quite a few did warn beforehand about the current crisis.

Unfortunately, the most inaccurate sources of information also happen to be the most popular. These would include CNN, MSNBC, The Economist, The New York Times, etc. In addition, our universities are teaching economic theories that are only valid in a world of unconstrained resources, and this assumption is no longer true.

Improved public understanding of some very complex topics such as exponential growth, energy, monetary system, and debt is critical because until the populace gets educated there is little chance that our leadership will do the right things.

You are correct that some economic thinkers did predict a problem. These would include Peter Schiff, Warren Brussee, Richard Martin, Karl Denninger, Nouriel Roubini, and Mike Shedlock. Unfortunately none of these people have a broad enough view to understand the complete picture. Chris Martenson is one of the very few that does.

Well, thats the Austrian school for you

I've seen some of the literature on the mises site and a lot of it is interesting but in the end, i'm looking for correlation with the real world.

How popular is mises on college campuses ? Does it form part of the curriculum. What use would it be in a world that does not work the way they deem it should be. Sure it explains things here & there but its not what the current system is about is it.

One of my pet quibbles is their obsession with gold. If money isn't backed by gold its somehow worthless. absolutely true, and if a govt. is irresponsible with  a fiat system, that will defnitely happen. But what about the majority of the world which DOES have responsible central banks etc.  How worthless is their currency ?

They also don't like fractional banking either but its not profitable to run a bank without it. Any bank that did not do it would go out of businesses to rivals that DID do it.  In short the Austrian school is advocating for monetary reform. All fine & good. But it needs buy in from the powers that be. And if it were in their interest it would have happened already. Finance & banking is the fuel that the economy runs on.

You make excellent points. You are correct that there is no need to back money with a commodity if the central bank acts responsibly. And you are correct that the design of our current system is a reality and has served us very well over the last 60 years. What has changed is that a fundamental assumption baked into the design of our current financial system is no longer valid, namely that year over year exponential growth is no longer possible.

Assuming oil is not a problem for the short term, I'd say its possible so long as GDP growth is possible. Does not have to be exponential. If we develop alternative sources of energy ie fusion, within the next 50 years who's to say where that limit is

Oil is a central problem as discussed above. However we are also bumping up against other physical constraints including global warming, fresh water, species extinction, and collapsing fisheries.

Having said that, I do believe that with abundant energy we can solve almost any problem. For example, you can desalinate sea water with lots of energy. You are correct to hope for a breakthrough in fusion because it appears to be the only possible silver bullet solution given the constraints of physics and biology. And you are correct that fusion is at least 50 years away given my review of fusion research around the world. The problem is that we do not have 50 years. We don't even have 10 years to solve the impending energy problem.

It's worth noting that it takes energy to produce energy. For example, imagine the diesel fuel consumed by machines used to mine, concentrate, and ship uranium. Or imagine the energy consumed to produce, fabricate, and ship the steel used in a windmill. If we leave things too long, and we may have already crossed that threshold, it won't be physically possible to create an alternate energy solution.

Humans have a genetic disposition to optimism, faith in leaders and technology, and for most, belief in a god looking out for them. The reality forgotten by many is that we are governed by the laws of physics and biology. Our species is now bumping up against these physical constraints.

What's your reason ?

Our current economic problems were caused by us living well beyond our means as manifested by excess private and public debt. Simultaneous to this, physical laws are lowering the ceiling of our "means". Either of these forces in isolation would be a very big deal. Together they represent a threat to civilization as we know it. A very big painful correction is on the near horizon, followed by a further slow steady decline in wealth as we currently define it.

And just to complete the picture, our leaders are trying to solve a problem rooted in excess debt with more debt. Where will we be if they succeed? And what will our capacity be to invest the 10's of trillions required for alternate energy?

Everytime some one tells me this it has the same affect as a fortune cookie telling me the contrary 

I can understand why you feel this way. All I can suggest is that you should not listen to the talking heads. Do your own research of the facts and then draw your own conclusions.

[hit_ny]

So yes, if you want to understand what is going on I recommend you complete Chris Martenson's Crash Course.

Oh, I have

I meant whether you were still interested to hear my critiques of the remainder ?

Other thinkers worth your time include Jason Bradford, Albert Bartlett, Saul Griffith, David Holmgren, and Richard Heinberg.

noted.

fyi: Jim Puplava of the Financial Sense Newshour did an excellent one hour interview with Chris Martenson today. You can get the podcast here: http://www.financialsense.com/fsn/main.html

will check out.

There is a high probability that several more large financial institutions will fail. If this occurs the US government will be on the hook to pay deposit insurance and will lose money loaned via bail outs.

I've not heard this view before. I'm under the impression that the worst has past, that we are now on the long slow road up. You are saying that that first infusion of $700 billion was not enough. They know it and okayed a trillion or so more. I think this will take care of any more problems. That is i assume if you are only referring to the US. However there wil be more problems in other smaller countries.

The point is that when looking at government debt it is important to include all liabilities, not just the amount borrowed to fund daily operations.

Yes, but in the end all want to know how much is owed at any point in time.

Liabilities & debts are always there. What matters is the confidence lenders have in the client to loan more. I think if the lenders start to have second thoughts because these liabilities are too much thats the point where problems begin.

Normally what happens is a country's credit rating goes down and that means higher interest to be paid on loans. There are countries out there getting by just fine with worse ratings than AAA

I could provide a book's worth of reasons on why we have an imminent energy problem but I would only be repeating high quality information that is available from many sources such as www.theoildrum.com.

noted

US production has been in decline since the early 80's and the US is now the world's largest importer of oil. Why? Because US oil fields were finite and depleted over time.

Not really, its instructive you mentioned the 80s, as the 80s wore on the price of oil dropped precipitously where it was more cost effective to have it refined abroad. It was $15 to the barrel by the end of the 80s. That was the biggest reason why refinery spending slowed down and consequently production in the US declined. It remained low till the early 2000s. In hindsight that was not a bad move, saved billions

The majority of high quality low cost oil comes from so called "giant" fields in the Middle East, Mexico and a few other places. Most of these giant fields are getting old and some, such as those in Mexico, are already in rapid decline. We are finding new oil but it is just barely keeping up with the decline in existing well production.

Iran & Iraq are not up to speed yet. Saudi & Kuwait can ramp up even more if needed. The biggest gains to be had will come from there. Did i even mention Russia

Realise that its not in their best interest to do so as oversupply hurts them. So only when oil prices rise & stay that way do they act, because again thats not good for them either because it increases the incentive to develop alternative means.

I have never heard anyone in the middle east worry that the day oil would run out is soon approaching. The day the US decides the middle east is not worth spending resources to maintain a presence, is the day your statment will be irrefutable.

For more information get the latest report by the International Energy Agency. They are the official world authority and until last year were predicting we had nothing to worry about for decades. Last year they did an abrupt about face and using politically correct words are now saying we have a crisis. It's mind boggling that the mass media has not reported more on this seminal report.

Will do so. The media usually follows the big ticket items, if they did not think it was worth talking about then that tells me this might not be as bad as it seems. Afterall bad news sells very well. Then again they do have codes of ethics that might have prevented them from saying anything until it was more certain.

Last year we observed oil prices climb to $150+ a barrel. If you study the data over this period you will see that world production did not increase in response to the high price. Why? Because production was already operating at maximum capacity.

No,  i think it was just a bubble. You said many ppl were predicting the coming crash. Well it would also have been apparent to speculators in the real estate market that the gains to be had would diminish so they shifted to the oil futures market. And create a bubble they did. At the time why did an analyst at Goldman predict oil would reach $200 because his firm was also a big player in said market and stood to profit handsomely if more ppl believed the same.

We are now in an economic depression. Conventional wisdom would suggest that oil prices should be falling due to depressed demand. Instead we are seeing a slow steady rise in oil prices. Why? Because demand is slightly larger than supply, and supply is constrained at this price.

Expect it to stablise at $65-$75. Few have enough spare money to play with the markets for the time being

With regard to alternate energy and the scale of the investments that will be required to replace fossil energy there is no better summary than a talk given by Saul Griffith here:
http://fora.tv/media/rss/Long_Now_Podcasts/podcast-2009-01-16-griffith.mp3

Noted

Unfortunately, the most inaccurate sources of information also happen to be the most popular. These would include CNN, MSNBC, The Economist, The New York Times, etc. In addition, our universities are teaching economic theories that are only valid in a world of unconstrained resources, and this assumption is no longer true.

I don't bother with CNN or MSNBC, instead preferring to read from newspapers of the web. You get far more information in the same time frame than you could listening. I'd include the WSJ & the FT in there as well. TV is too beholden to ratings and is only good for breaking news. These publications are more specialised in their respective fields, they depend on their credibilty to survive. Isn't it fair to say they would be better sources than more general newspapers ?

You are correct that some economic thinkers did predict a problem. These would include Peter Schiff, Warren Brussee, Richard Martin, Karl Denninger, Nouriel Roubini, and Mike Shedlock. Unfortunately none of these people have a broad enough view to understand the complete picture. Chris Martenson is one of the very few that does.

You left out Krugman, the only one incidentally to get a nobel.

What has changed is that a fundamental assumption baked into the design of our current financial system is no longer valid, namely that year over year exponential growth is no longer possible.

No longer possible -- in the short term. The world's economies are a bit tired right now. Once they heal maybe in the next several years, we should back to the good ol same old

You are correct to hope for a breakthrough in fusion because it appears to be the only possible silver bullet solution given the constraints of physics and biology. And you are correct that fusion is at least 50 years away given my review of fusion research around the world.

 
There is a major fusion project coming online in the US this year or the next i believe and the euro's are working on the same thing to materialise sometime in 2015.

It's worth noting that it takes energy to produce energy. For example, imagine the diesel fuel consumed by machines used to mine, concentrate, and ship uranium. Or imagine the energy consumed to produce, fabricate, and ship the steel used in a windmill. If we leave things too long, and we may have already crossed that threshold, it won't be physically possible to create an alternate energy solution.

All true if the premise that energy is running out is well founded. I still have my doubts about it.

Humans have a genetic disposition to optimism, faith in leaders and technology, and for most, belief in a god looking out for them.

In the finance market, being positive can make a world of difference. i think what FDR said back in 1933 is very pertinent right now

"The only thing we have to fear is fear itself"

I trust the current depression will not be as bad as the one of his era. That of course provided the world does not shrink into a protectionist model. That will certainly prolong & exacerbate the current depression, just like it did back then.

And just to complete the picture, our leaders are trying to solve a problem rooted in excess debt with more debt.

True. its counter-intuitive, how can more credit solve a problem that by itself was caused by too much credit

Where will we be if they succeed? And what will our capacity be to invest the 10's of trillions required for alternate energy?
I can understand why you feel this way. All I can suggest is that you should not listen to the talking heads. Do your own research of the facts and then draw your own conclusions.

All down to the strong long term fundamentals of a country, the US will fare better in this regard than Japan did. You are right about the talking heads, not worth the time, what about the ones that write

If you look at the breadth of opinon on this subject right now, the bulk is of the chicken little variety. So how does one sift the wheat from the chaff here ?

[rjm]

Not really, its instructive you mentioned the 80s, as the 80s wore on the price of oil dropped precipitously where it was more cost effective to have it refined abroad. It was $15 to the barrel by the end of the 80s. That was the biggest reason why refinery spending slowed down and consequently production in the US declined. It remained low till the early 2000s. In hindsight that was not a bad move, saved billions

I was not talking about price or refinery capacity. I was talking about conventional oil produced from wells. The US's production has been declining for a long time due to geophysical depletion. Other countries are starting to follow. For example, today Mexico is the US's 3rd largest supplier. Their production is falling so fast that they will probably stop exporting in about 3 years. Russis's production also appears to be falling.
 
I do not have any data on Iran & Iraq. You may be right that they can increase output. This might explain the billions being spent on occupying Iraq.

Matt Simmons wrote a book debunking the Saudi's ability to increase output.

The media usually follows the big ticket items, if they did not think it was worth talking about then that tells me this might not be as bad as it seems. Afterall bad news sells very well. Then again they do have codes of ethics that might have prevented them from saying anything until it was more certain.

My observation is that the media frequently misses the really important stories. For example, US social security solvency is known to be a long term problem but was expected to remain in surplus for another decade or two. About 2 weeks ago new data suggests social security will be in deficit as early as 2011. This is huge news that barely got any press.

Expect it to stablise at $65-$75. Few have enough spare money to play with the markets for the time being

I disagree. It won't take more than a few years to see which of us is correct.

I don't bother with CNN or MSNBC, instead preferring to read from newspapers of the web. You get far more information in the same time frame than you could listening. I'd include the WSJ & the FT in there as well. TV is too beholden to ratings and is only good for breaking news. These publications are more specialised in their respective fields, they depend on their credibilty to survive. Isn't it fair to say they would be better sources than more general newspapers ?

I do not read the WSJ & FT so cannot comment. I try to find smart people that think independently and then follow their blogs.

 
There is a major fusion project coming online in the US this year or the next i believe and the euro's are working on the same thing to materialise sometime in 2015.

My reading suggests that the projects will be operational in the time frame you suggest, however they will produce net negative energy and it will be a very long time, if ever, before they achieve large scale net positive energy. The technical problems are immense. Imagine trying to contain a piece of the sun in a bottle.

In the finance market, being positive can make a world of difference. i think what FDR said back in 1933 is very pertinent right now

Yes, there is significant froth on top of all markets that is driven by emotional attitude. But underlying all markets are the physical forces of supply, demand, and the wealth production necessary to consume goods and repay debt.

I trust the current depression will not be as bad as the one of his era. That of course provided the world does not shrink into a protectionist model. That will certainly prolong & exacerbate the current depression, just like it did back then.

I admire and envy your optimism. And I really hope you are correct. I am certain that we are in the eye of a storm that will prove to be the worst in the brief history of our species.

So how does one sift the wheat from the chaff here ?

Study key data and trends. Trust yourself.

Perhaps we should end this thread now? I think we understand each other's views. It's been a pleasure debating with you.

[hit_ny]

Perhaps we should end this thread now?

Umm, lets leave the oil bit out for now and go into the rest of what he said.

Talk about these future liabilities

You did mention earlier about potential bank collapses, so lets see the results of the stress tests to be published on May 4.

Chapter 12

The pure debt obligations of the US Government as of April 2008 stand at 9 trillion, 444 billion dollars and change. This is only the debt. Once we add in the liabilities of the US government, chiefly Medicare and Social Security, we get a number five to eight times larger than this. The total debt in the US now stands at over $48 trillion.

He has used estimates upto the year 2080, discounted to today, from this document to arrive at the $48 trillion figure.

The document states

Since these estimates are not liabilities, and therefore do not impact either an entity’s current assets or liabilities, they are considered ‘off-balance sheet’ items; according to Federal accounting standards.

The total debt includes intra-governmental debt, which includes amounts owed to the Social Security Trust Funds (about $2.2 trillion in FY 2007) and Civil Service Retirement Funds. By August 2008, the total debt was $9.6 trillion.

If you look at the long term budget issues, only then, if current trends in entitlement programs spending continue at the present rate, that by 2030-2040 the revenue generated by the government will not be able to handle the expenses. The govt. in a sense will be insolvent only after that point and not right now as he states. If nothing changes, then Yes it will happen but that is 20 years from now, they are already aware of this (since 2007) and for sure will be forced to deal with it.

Chapter 16

Mentions the article written by Kevin Phillips for Harpers Magazine, which states that the major economic indicators:
- Consumer Price Index (CPI) from which inflation is inferred
- Unemployment figures
- Gross Domestic Product (GDP)

..have been manipulated 

See the rebuttal in the nytimes about this article.

Chapter 18

Mentions the Bingham Canyon Open Pit Copper Mine, saying we are expending a lot of energy to mine copper compared to what was easily available lying around a hundred years earlier. Trying to make the point that minerals are becoming more scarce and therefore expensive to mine as time goes on.

See what the wiki says..

The success of Utah Copper in mining the huge but low-grade porphyry copper type orebody at Bingham Canyon revolutionized the copper industry, and set the pattern for the large open-pit porphyry copper mines that today dominate the copper industry worldwide.

So yes concentration of copper is less in this mine but the methods employed still make it profitable, not only in the US but worldwide.

Then he talks about how anthracite coal production has dropped since the 1990s implying that its running out. But wiki says..

From the late 1800s until the 1950s, anthracite was the most popular fuel for heating homes and other buildings in the northern United States, until it was supplanted first by oil burning systems and more recently by natural gas systems as well.

This tells me the demand for anthracite has been supplanted by oil & natural gas. So if the demand is not there then its production will also be reduced. Not that there isn't much of it left. Another reason is that burning coal is more polluting than the other alternatives.

Then he talks about how Uranium is another dwindling resource. Wiki says...

Current economic uranium resources will last for over 100 years at current consumption rates, while it is expected there is twice that amount awaiting discovery. With reprocessing and recycling, the reserves are good for thousands of years.

That's the third 'E' or Environment down

I feel Chris Martenson is genuinely trying to educate people. He is 'relatively' less conspiracy oriented or attention seeking than others i've read.

However he is placing too much weight on Peak Oil, Mineral depletion and extrapolating future entitlement costs into the national debt. Also more time must be spent into understanding why those key economic indicators were tweaked. Not for political reasons but in the interests of transparency. If fuel & food have volatile prices then it effects the overal indices and skews them.

[rjm]

Sorry for the delay in responding but I have a good green excuse. I spent the last week doing volunteer work building a 30'x60' greenhouse at a community farm.

I think I understand your views on the economy. I clearly believe that the debt problem is much worse than you do. But in a way the difference of opinion is somewhat moot because of the energy issue.  Sorry... we can't ignore energy in these discussions because energy is everything.

If we can increase our energy use, then our economy can grow. And if our economy can grow, then a debt problem can eventually be overcome. If I'm right that the debt problem is more serious than you think, then it means it will take longer for us to exit this depression, but regardless of the time, we will eventually exit to prosperity.

If on the other hand, we cannot increase our energy use (which I believe to be a fact) then we will never return to prosperity as we knew it, and every additional dollar of debt makes our situation worse.

Here is a great article that explains what I'm trying to say much better than I ever could.
http://www.energybulletin.net/node/48731

See the rebuttal in the nytimes about this article.

This was a good article. Thanks. Made me feel a little better about the stat manipulation.

The success of Utah Copper in mining the huge but low-grade porphyry copper type orebody at Bingham Canyon revolutionized the copper industry, and set the pattern for the large open-pit porphyry copper mines that today dominate the copper industry worldwide.

It's truly amazing what we can do with lots of cheap diesel. So the wiki article is correct if you assume abundant energy going forward.

This tells me the demand for anthracite has been supplanted by oil & natural gas. So if the demand is not there then its production will also be reduced. Not that there isn't much of it left. Another reason is that burning coal is more polluting than the other alternatives.

I'm not a coal expert but my reading suggests there are different grades of coal. The good stuff has more BTUs per pound. There is no shortage of coal but we are running low on the good stuff.

Current economic uranium resources will last for over 100 years at current consumption rates, while it is expected there is twice that amount awaiting discovery. With reprocessing and recycling, the reserves are good for thousands of years.

You are smart to be looking at this since nuclear is our only hope if you are also concerned about anthropogenic global warming. I also did some research on uranium reserves about a year ago. I found the data to be very murky and I do not know what the truth is. Part of the problem is that current reactors are being supplied with fuel from disassembled atomic bombs. So the current demand for new uranium is low, hence its not easy to assess reserves.

[)p(]

Does not have to be exponential. If we develop alternative sources of energy ie fusion, within the next 50 years who's to say where that limit is

Why not? Growth upon growth how can that not be exponential?
Much worse is that sustained growth in real good en services in our current system needs an ever disproportionally larger growth in financial terms to "support" it...that is imho the root of the problem and I as an economist don't really see any alternatives...Marx was one of the first to see and analyse the problem brilliantly but he had no real developed alternative...and that has been the case since...

peter

[rjm]

I respect Jim Rogers. Here is a recent interview worth reading.
http://jimrogers-investments.blogspot.com/2009/04/interview-with-time-magazine-28-april.html

[rjm]

Another article well worth your time:
http://www.theoildrum.com/node/5230#more

The discussion that follows the article is also very interesting.

[bob]

You might want to check out:

Steady-state economics / Herman E. Daly.
Washington, D.C. : Island Press, c1991.

Daly is a professor at the University of Maryland’s School of Public Policy, a former senior economist at the World Bank, working on environmental economics, and the winner of numerous international awards, including the Honorary Right Livelihood Award, which has been described as an “alternative Nobel Prize.”

There is a good overview of the book at:
http://www.adbusters.org/magazine/81/steady_state_economy.html

From V.B. Price in the New Mexico Independent:
Adbusters magazine’s current issue — “The Big Ideas of 2009″ — has awarded the great spokesman of steady state economics, Herman Daly, the Man of the Year award for 2008. Since the 1970s, Daly has been attacking orthodox economics for its “critical flaw,” failing “to take into account how economic processes consume resources and generate wastes.” Daly sees orthodox economic activity, Adbusters wrote, as a “growing sub-set, of a non-growing planet.”

Daly wrote that “current economic growth has uncoupled itself from the world and has become irrelevant. Worse, it has become a blind guide.”

Another nice quote sourced from wikipedia:
“If you’ve eaten poison, you must get rid of the substances that are making you ill. Let us then, apply the stomach pump to the doctrines of economic growth that we have been force-fed for decades.”

[rjm]

You might want to check out:

Steady-state economics / Herman E. Daly.
Washington, D.C. : Island Press, c1991.

Great article. Thanks for the tip. Here is another:
http://www.theoildrum.com/node/3941

[KingSparta]

You are smart to be looking at this since nuclear is our only hope

I think Not

Renewable Resources Are Better, Wind, Solar, Hydro Electric, Thermo Electric.

If you wanted to you could Harness The The Tides, Wave Motion Of The Oceans

One Thing You Could Also Harness Is The Magnetic Forces And Rotation Of The Earth.

Doing So Does Not Pollute The Earth.

[rjm]

I think Not

Renewable Resources Are Better, Wind, Solar, Hydro Electric, Thermo Electric.

If you wanted to you could Harness The The Tides, Wave Motion Of The Oceans

One Thing You Could Also Harness Is The Magnetic Forces And Rotation Of The Earth.

Doing So Does Not Pollute The Earth.

I used to share your views until I studied the underlying physics and costs of renewables. Renewables can and will be an important part of our future however they will never come close to replacing our current level of energy consumption.

Here are two exceptional talks on the energy potential and costs of renewables. Unlike most renewable discussions, these talks are filled with facts. I'd be interested to know if your views remain unchanged after listening to these.

David MacKay - Sustainable Energy Without the Hot Air – 12-Mar-2008
http://mediaplayer.group.cam.ac.uk/component/option,com_mediadb/task,play/idstr,CU-CSF-Lectures_2008-12_David_MacKay/vv,-1/Itemid,42

Saul Griffith – Climate Change Recalculated – 16-Jan-2009
http://fora.tv/media/rss/Long_Now_Podcasts/podcast-2009-01-16-griffith.mp3

[hit_ny]

Other thinkers worth your time include Jason Bradford, Albert Bartlett, Saul Griffith, David Holmgren, and Richard Heinberg.

Bartlett gives a very good performance in his lecture on exponentials. Far better than the crash course as he junks what some ppl in high positions have said in many 'reputable' publications. We wuz lied to

http://www.youtube.com/watch?v=F-QA2rkpBSY

with its own catch phrase

"The greatest shortcoming of the human race is our inability to understand the exponential function."

I do have a quibble with one thing he says tho.

Is the US less democratic today than it was 100 years ago or even from 1776 onwards mainly because the same number of representatives have to represent a lot more people nowadays compared to in the past ?

He makes the argument that democracy is getting diluted as a result  of a larger poopulation ?

On the other hand its fair to say Bartlett has pretty much killed all my arguments about not having to worry about resource depletion in the future and all that entails. No conspiracy freak here 

Clearly as oil prices continue to inevitably rise there goes the growth rates that we all depend on.

So what do we do ?

I guess this is where the last bit of the crash course comes in. But thats just on an individual level, but what happens to entire nations in this case ?

China will have to become more democratic sooner than we think.

[rjm]

He makes the argument that democracy is getting diluted as a result  of a larger poopulation ?

I think the much bigger threat to democracy is gross ignorance by the majority of basic science and biophysical constraints.

So what do we do ?

There is no great answer. I am buying a farm in a location that I hope will be least impacted by global warming and angry mobs.

[hit_ny]

I think the much bigger threat to democracy is gross ignorance by the majority of basic science and biophysical constraints.

That's always been the case  tho, thing is it did not matter then but it will in the future ?

I am buying a farm in a location that I hope will be least impacted by global warming and angry mobs.

Hmm, so you expect this to happen within the next 30 -50 years then ?

[rjm]

Hmm, so you expect this to happen within the next 30 -50 years then ?

Angry mobs are probably no more than 5 years away.

Global warming is happening now. Only question is how much more warming. Consensus is that we need to stabilize at 350 ppm CO2 to limit warming to 2 degrees (which results in a changed but liveable planet). I see no chance that we can or will achieve this goal. We cannot afford the technology fixes and the majority will not accept the required dramatic changes in lifestyle.

[hit_ny]

What will these mobs be in search of and why only  5 years away ?

[rjm]

What will these mobs be in search of and why only  5 years away ?

Employment, affordable food and energy costs, lower taxes, and someone to blame.

[KingSparta]

I Bought A New Coffee Brewer.

It Is The Platinum Brewing System From Keurig.

They Have Sold 1.3 Million Since This Past January

I Am Stimulating The Economy  

[rjm]

Worth reading for an understanding of our rubik's cube:

http://www.financialsense.com/editorials/mckillop/2009/0930.html

As you are reading this, ask yourself what happens if we do not return to strong economic growth?

We really really should have kept some cookies in the cupboard during the good times of the last 20 years.

[hit_ny]

Historically, peak-oil thinking gains attention during times when markets are tight and prices are rising, stoking fears of a permanent shortage. In 2007 and 2008, the belief system built around peak oil helped drive prices to $147.27. (It was actually the fifth time that the world had supposedly "run out" of oil. The first such episode was in the 1880s; the last instance before this most recent time was in the 1970s.)

There's a lot more variables to the oil story than just the supply side of things as this article illustrates.

[KingSparta]

I was thinking during the election Obama can't screw things up too much in 4 years, I now have my doubts.

Obama really scares me, the future looks bleak.

I do not expect Obama to be re-elected.

[Mr ChriZ]

He's still seen as doing good from where we're looking I think.  The future looks bleak for everyone at the moment.  I think it's a difficult time for any countries leader.  No ones doing well, and as a result everyone blames the guys at the top, regardless of whether they had any possible time / power to actually influence world events.  Sadly no one blames themselves...

[KingSparta]

He's still seen as doing good from where we're looking I think.

The recent us polls indicate otherwise.

http://www.gallup.com/poll/113980/Gallup-Daily-Obama-Job-Approval.aspx

I think his dip in popularity is because of health care, with much confusion about it on both sides.

[rjm]

Just found this high quality 8 minute video on peak oil...

http://www.youtube.com/watch?v=jDIYgG0gSiY

[hit_ny]

"The whale oil business ran out of customers before it ran out of whale oil !"

If this guy gets his way could the same happen with the oil business ?

"We only get out 1/3 of the oil in a well before having to move on to another one" says this guy, implication being technology will help in the future provided, its nutured.

I still continue to doubt whether the effects of peak oil will ever be felt within our lifetimes

[rjm]

I still continue to doubt whether the effects of peak oil will ever be felt within our lifetimes

I hope you are right but I am pretty sure you are wrong. It won't take more than a few years to determine which of us is correct.

http://permaculture.org.au/2009/11/11/world-energy-outlook-2009-report-released-as-senior-iea-employees-blow-whistle/#more-1976

[hit_ny]

Do you have any critiques for what Lovins has to say and more specifically wrt to his book ?

All i found was this. I was sold on better efficiency until Jevons was mentioned. But he denies Jevons applies in an interview

It won't take more than a few years to determine which of us is correct.

How does one test for peak oil ?

You said...

I expect total available energy to begin to decline at about 6-9% per year starting within 3 years. If I am correct then no further GDP growth will be possible

So US GDP and by extension every other would remain flat from 2012 onwards and decline into the future. Going by this list one expects TOTAL global growth to be approaching zero.

So how long to wait till its unambigous, 5 years (2017), 10 years  (2022), later ?

It would have been more clear if the economic crisis had not occurred as that in itself is already a huge dampner. Already some country's rates in that list are not flat but negative ie UK & S.Korea.

[JimH]

I agree with rjm about peak oil.  We've seen the peak.

However, I think the U.S. economy is going to come roaring back.  Just a gut feel.  I understand that it may not seem logical.  Both people and the businesses that employ them are going to work smarter.  And the goofy Internet investing period is mostly behind us.  Money will flow into businesses that know how to make money. [citation needed]

[KingSparta]

[citation needed]

You Have Been Using Too Much Wikipedia

[JimH]

Guilty as charged.

[hit_ny]

I agree with rjm about peak oil.  We've seen the peak.

However, I think the U.S. economy is going to come roaring back.  Just a gut feel.  I understand that it may not seem logical.  Both people and the businesses that employ them are going to work smarter.  And the goofy Internet investing period is mostly behind us.  Money will flow into businesses that know how to make money. [citation needed]

Lovins says the last time attention was paid to oil in the US (because prices were so high), during 77-85, the economy grew by 27% whilst oil consumption dropped by 17% and oil imports dropped to half, in effect crashing the price because everyone had to cut back.



How is that possible if more energy is required to grow the economy

[KingSparta]

How is that possible if more energy is required to grow the economy

Because companies were creative, terminating management, reducing costs in how things are produced, and labor.

making everything more efficient.

Kind of like they are doing now, so they can stay in business.

[bob]

Also there was a huge increase in energy efficiency both in oil use (CAFE) and electricity use. Appliances got way more efficient. There were minimal standards put into place. I remember reading once, I think it was in the late 80's or early 90's about how basic appliance, like fridges, were so much more efficient in the US than the UK for example.

It's been a long time since there were any really large electrical generating plants coming on line here but the economy has grown a lot in the same period of time.

[KingSparta]

Recently I Was At A Larger Factory "Quickie" They Make Mops And Other Cleaning Items.

I Asked Him If The Recession Has Hit There Business, He Said Recently They Have Seen A Large Decrease Of Orders. You Could Probably make a connection there that business that they serve are not over this Recession like the white house would make you to believe.

The Business i am in has not seem to have been hit by the Recession (At Least Not Yet), We Have Broken All Sales Records this year, and my branch will see over 4 million by December 31st

Listening to: 'Under The Milky Way' from 'Under The Milky Way' by 'The Church' on Media Center 14