DrumBeat: December 6, 2007
Posted by Leanan on December 6, 2007 - 9:54am
Topic: Miscellaneous
House approves energy bill, new fuel standards
The House approved the first increase in federal automobile fuel efficiency requirements in three decades Thursday as part of an energy bill that also repeals billions of dollars oil company tax breaks and encourages use of renewable fuels.The bill, passed by a vote of 235-181, faces a certain filibuster in the Senate and a veto threat from the White House.
Ready for America to reach its oil peak?
The price of oil affects far more than our daily commutes. Our entire consumer economy is built on the idea that oil will be relatively inexpensive and infinitely available.A reliable and affordable supply of oil makes globalization possible. Department stores, for example, wouldn't be able to fill its shelves with consumer goods made for less in overseas factories if not for the ability to ship these products inexpensively. Within our own borders, food is cheap and plentiful in large part because oil is. One reason we've built bigger houses — the average house size has doubled since the 1950s — is because we can afford to heat and cool them.
OPEC sent wrong message to oil market
The Organization of Petroleum Exporting Countries decided at its extraordinary general meeting in Abu Dhabi on Wednesday not to raise oil production.But this move may have sent a wrong message to the oil market.
Inflation worries hit Venezuela
After nearly four years of economic growth fed by record oil prices, inflation is beginning to eat away at Venezuela's economy despite efforts by President Hugo Chavez's government to put a cap on swiftly rising prices.
$3 gas is here to stay - analysts
Prices at the pump have dipped recently as the busy driving season came to a close. But analysts predict higher prices next year.
Analysis: Big Oil to sign Iraq deals soon
Big Oil's big dreams are close to coming true as Iraq's Oil Ministry prepares deals for the country's largest oil fields with terms that aren't necessarily what companies were hoping for but considered a foot in the door of the world's most promising oil sector.
Energy Driving Long-Term Growth Prospects In African Market
The African arms market, traditionally recognized for its low value and opaque business environment, may represent tomorrow's growth market for the global defense industry, according to Forecast International's "Africa Market Overview" report. Driven by changing geopolitical environments and enabled by hydrocarbon-derived wealth, select African nations are attempting to recapitalize their military and security forces in a way that potentially creates major opportunities for western defense enterprises.
Paradigm shift: There seem to be few, if any, large, easy-to-produce oil fields left. None have been found in 40 years. This means the new oil will increasingly need to come from places like Alaska's huge heavy oil reserves which are estimated to contain 100 billion barrels (five times the size of Prudhoe Bay). World prices for oil going forward will prove heavy oil economically viable, and indeed essential.
My real problem is simply that in my 48 years I've lived through so many pack-panic attacks over nothing that I won't fall so easily for the next.Your parents or grandparents may know what I mean. Go ask if they remember all those plagues we were told would surely smite us if we didn't sign some cheque, praise some god, or vote for some politician.
Ask if they remember scares like the nuclear winter, DDT, mega-famines, global cooling, acid rain, Repetitive Strain Injury, bird flu, the millennium bug, SARS, toxic PVC, poisonous breast implants, the end of oil, death by fluoride, the Chernobyl doom, the BSE beef that would eat your brains, and other oldies and mouldies.
Satellite images cloud Saudi oil decline theory
Satellite images may scuttle theories that the world's biggest oil field in Saudi Arabia is in decline, Bernstein Research said on Wednesday.A jump in drilling activity in recent years at the giant Ghawar oil field has raised concerns Saudi Arabia is struggling to maintain oil output and has fueled "peak oil" theories that global production is poised for a collapse.
But satellite images show that much of the rise in drilling activity has centered on two major expansion developments by state oil firm Saudi Aramco, instead of on keeping older parts of the field producing with enhanced recovery techniques, Bernstein said in a research note.
Shell North Sea Rig Remains Shut After Power Failure Last Week
Royal Dutch Shell Plc said its Cormorant Alpha oil platform in the North Sea remained shut more than a week after a power failure.Production was stopped Nov. 27 as a precaution after two generators failed. The platform remains closed today, Jack Page, an Aberdeen, Scotland-based spokesman for Shell, said in a telephone interview.
Nigerian naira hits new high at 117.95 vs dollar
The Nigerian naira rose to a new high of 117.95 to the dollar on the interbank market on Thursday from 118.40 on Tuesday on the central bank's support and huge dollar inflows from oil majors, traders said.
Six places in the world where climate change could cause political turmoil
From Nepal to Nigeria, Indonesia to the Arctic Circle, a warmer world poses different problems.
Saudi Arabia's climate stance mocked by green groups
- Saudi Arabia again received a drubbing from green groups on Wednesday who labelled the oil-rich nation "fossil of the day" at UN climate talks for its stance on global warming.Ben Wikler, from green group Avaaz, said they chose Saudi Arabia for the gong -- given out every day at a key climate conference underway in Bali, Indonesia -- for "complaining about an unfair focus on carbon."
House ready to vote on big energy bill
House Democratic leaders are optimistic that they can pass an energy bill that would repeal billions of dollars in oil industry tax breaks and for the first time in decades require a major increase in automobile fuel economy.Details on a tax package totaling nearly $21 billion, about two-thirds of it on the major oil companies, was completed late Wednesday, clearing the way for a vote Thursday on the energy package.
UK road hauliers threaten to blockade refineries
Members of Transaction 2007 will meet on Thursday night to discuss launching a protest against rising UK fuel prices including the possibility of blockading oil refineries and petrol stations, the truckers' action group said.
Vietnam faces power shortage in December
Vietnam's electricity supply may fall well short of needs in December, due to technical problems at a gas-fired power plant and a shortage of water for hydroelectric dams, an official said Thursday.
Maryland must deal with tight power supplies
Maryland faces a critical shortage of electric capacity that could lead to rolling blackouts by 2011 or 2012, utility regulators told state legislators this week.The state faces a potential energy crisis because consumers use more power than the state generates and the transmission lines are highly congested, making it difficult to bring more power in from elsewhere, the Maryland Public Service Commission said in a report to the General Assembly.
Delegations call for $1b for emergency heating funds
While New Hampshire and Maine got the first dose of cold winter weather this week, many in both states' congressional delegations are seeking a $1 billion emergency increase in home heating aid for low income residents.
A Holistic Solution to the IT Energy Crisis
According to the Environmental Protection Agency, nearly two percent of all electrical power consumed in the U.S. in 2006 was used by IT data centers -- an amount about equal to the electricity used by five percent of total U.S. households. And that number is growing. In a recent white paper for IDC, Jed Scaramella writes that for every dollar in server spending today, companies spend $.50 on power and cooling, and it is expected to rise to $.70 by 2010. The same report predicts that by 2012, 40 percent of an enterprise's technology budget will be consumed by energy costs.
Saudi Aramco raises prices of crude to US
Saudi Aramco, the world's largest state oil company, raised its official selling prices for crude shipments to the US in January, the first increase since July.
China: Oil crisis eases, diesel supplies increase
SHANGHAI'S fuel crisis has eased with daily supplies increasing, the city's main provider said yesterday.Sinopec said drivers should not encounter problems filling their tanks at its 500 city outlets as it had increased diesel supply to 8,000 tons this month, up from 6,000 last month.
Steaks and cricket, starvation and poverty: diary of a surreal week in Zimbabwe
Surprisingly, you can still rent cars. Maps of Harare are unobtainable, however, as there is no paper left to print them on. I rely on memory to find the safe suburban guest house where I plan to stay, the capital's hotels being infested with government informers. I arrive to find it has no electricity and not a drop of water.I also need cash, but it is in desperately short supply. The Government cannot print enough to cope with inflation.
The Future. Shades of the Past - Changing the Structure of Society
The Long Emergency! James Howard Kunstler (2005) has written about our possible recovery from the threat of the suburbia syndrome. The American dream following the second world war was to escape from the city, hence creating urban sprawl. The strategy? Concentration of services, Long commutes to work. Bigger, centralized schools and hospitals. All based on abundant and cheap oil. The author contends this cannot continue as oil supplies diminish. The future societal organization will have to be a return to our origins. Smaller self contained communities, i.e. towns and villages surrounded by rural lands to minimize shipping distances for delivery of food to consumers. People will have to live within walking or cycling distance from facilities. Shades of Schumacher's "Small is Beautiful" of 3 or 4 decades ago.
So BP is finally returning to Canada's black hell. Welcome back, stout British Petroleum. Eight years after you shunned our tarry oil deposits for the watery, more profitable Russian stuff, your desperate need for oil has brought you back to Alberta, batting your eyelashes and fanning yourself with $10bn in cash.
BP to spend up to $1.5 billion on refinery upgrades
Russia's third largest oil firm, TNK-BP, will invest up to $1.5 billion on refinery upgrades over the next five years to meet growing demand for high-quality products in Russia and abroad, an executive said.
Chevron sees 2008 spending up 15 percent
Chevron Corp, the second-largest U.S. oil and gas company, said on Thursday it expects its capital spending to rise by about 15 percent as the company works to bring several large-scale oil and gas projects online in a high cost environment.
A government-backed proposal to build a nuclear power plant in Albania has made Iran envious, the Italians interested, and the Greeks worried. But for many Albanians, the initiative is just the latest piece of rhetoric from a political class that seems unable to solve the puzzle of a deep energy crisis.
Energy meet is discussion on VY future
It was supposed to be a meeting to discuss the future of Vermont's energy supply. Instead, it turned into a pro and con discussion over the fate of Vermont Yankee nuclear power plant.
John Michael Greer: Solvitur Ambulando
First, a great many of the proposals on the table just now have surprisingly little to do with the problems they claim to solve. Not long ago, for example, I read a lively and well-written essay arguing that the best way to bring humanity into harmony with the environment was for nations worldwide to embrace socialism. We can leave aside, for the moment, the fact that this is about as likely just now as a resumption of the Crimean War; the point at issue here is that it doesn’t solve the problem it claims to address. On the theoretical plane, shifting ownership of the modes of production does not affect how those modes interact with the ecosystem. On the historical plane, socialist countries have had at least as bad a track record when it comes to the environment as capitalist countries. Instead of finding a solution to the problem it described, in other words, the essay simply tried to identify a new problem that can be used to promote the author’s preferred solution.
Panelists discuss climate changes, peak oil
"Kill your lawn."That was one of the recommendations from a panel discussion based around peak oil and climate change held Wednesday night at the First United Methodist Church.
On January 1, 2007, Angola became the 12th member of the Organization of Petroleum Exporting Countries (OPEC). As an OPEC member, Angola will have to pay $2 million per year in membership fees and might be restricted by OPEC quotas on oil production. Angola is the second largest oil producer in Sub-Saharan Africa behind Nigeria.
New Zealand: Need for Cross Party Commission on Peak Oil
The Maori Party has today reiterated the call it made on 4 September 2005 to establish a cross-party parliamentary commission on peak oil.“Right at this moment in London an All Party Parliamentary Group on Peak Oil and Gas and the All Party Parliamentary Climate Change Group are meeting to focus on the interaction between oil depletion and climate change and whether a combined solution can be developed” said Hone Harawira, Climate Change Spokesperson for the Maori Party.
New Zealand: Mortgages, rents and exports bear cost of oil
New Zealand’s very high dependence on imported oil for the transport sector makes our economy particularly vulnerable to the ever increasing price of oil. And, as global oil demand continues to reach the limits of global supply, oil prices will only continue to increase. The Government and the Reserve Bank are still in denial about peak oil.
Tom Whipple - The Peak Oil Crisis: Decision at Abu Dhabi
For those of you who came in late, it might be useful to recall that 35 years ago marginal world oil production (and therefore prices) was controlled by the Texas Railroad Commission. In those days, most oil production in the U.S. was hauled off by trains so by mandating how much could be moved the Commissioners could effectively control the price by preventing over production. This, of course, was based on the premise that plenty of oil was available to pump so that if you wanted the price to go down you simply pumped more. In the early 1970’s, however, production in Texas and the U.S. as a whole went into decline so the Commission could no longer lower prices by shipping more oil.
Oil: Desperate search for the scarce commodity
I don’t know if hundred-year history of the oil cycle is over. There is always a “this time it’s different” ideology at the peak. But then again, sometimes, it is different.
China plans subsidies for oil companies
China will give subsidies to oil refiners to help offset the gap between high international crude oil prices and controlled domestic fuel prices, state media reported Wednesday.The companies will receive rebates and will be exempt from paying oil import duties, the official Xinhua News Agency reported, citing the National Development and Reform Commission.
Malaysia: Far-reaching effects of high oil prices
RAISING fuel surcharges is becoming a norm for some global airlines and it should be no surprise if the two local carriers decide to follow suit to offset rising operating cost as a result of higher crude oil prices.
The most expensive cities to buy gas in the U.S.
Drivers in San Francisco enjoy views of the Golden Gate Bridge, with scenic stretches of the Pacific Coast Highway to the south and the rural shoreline to the north.And they pay for it at the pump.
Oil drops as US fuel supplies rise
Oil prices dropped below $87 a barrel Thursday to their lowest levels in six weeks after an overnight report showed an increase in U.S. supplies of gasoline and distillates, as well as of crude at a key Midwestern terminal. |
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Nigeria Has 900,000 Barrels a Day of Oil Halted, Minister Says
Nigeria, Africa's biggest oil producer, has halted about 900,000 barrels a day of crude output as a result of unrest in the Niger Delta and oilfield closures, the nation's minister of state for petroleum said.The figure includes about 500,000 barrels a day shut in by militant attacks in the Niger Delta and another 400,000 barrels a day halted by ``technical disruptions,'' H. Odein Ajumogobia said today by telephone.
US under pressure at climate conference
American climate negotiators refused to back down in their opposition to mandatory cuts in greenhouse gas emissions Thursday, even as a U.S. Senate panel endorsed sharp reductions in pollution blamed for global warming.
Use of such scare talk to scare up tough actions by adults on greenhouse emissions must be more measured. Youth cannot be traumatized for a global cause.
Australian PM distances himself from big emissions cuts by 2020
Australian Prime Minister Kevin Rudd on Thursday denied his government would support deep carbon emission cuts for developing nations by 2020 aimed at curbing global warming.Rudd said Australia remained opposed to the binding cuts of between 25 and 40 percent in the next 12 years, despite reports that Australian officials had publicly embraced the plan at a major UN climate change conference in Bali.
Climate change bill heads for full Senate
Legislation aimed at fighting climate change by capping greenhouse gas emissions was approved on Wednesday by a Senate committee and is headed for debate in the full Senate.
What if everyone believes in global warmism only because everyone believes in global warmism?
Their insight has been fruitful and multiplied: "Availability cascade" has been coined for the way a proposition can become irresistible simply by the media repeating it; "informational cascade" for the tendency to replace our beliefs with the crowd's beliefs; and "reputational cascade" for the rational incentive to do so.
Scientists demand swift climate action at Bali meet
Climate scientists from around the world urged delegates at U.N.-led talks in Bali on Thursday to make deeper and swifter cuts to greenhouse emissions to prevent dangerous global warming.In a declaration, more than 200 scientists said governments had a window of only 10-15 years for global emissions to peak and decline, and that the ultimate goal should be at least a 50 percent reduction in climate-warming emissions by 2050.
For Those Without Enough to Worry About
Israel Prepares to invade Gaza
http://www.time.com/time/world/article/0,8599,1691071,00.html
Alan
Well, they better be careful in their invasion or they won't be able to travel to the UK.
http://news.bbc.co.uk/2/hi/middle_east/7130594.stm
Well since it's looking like this is shaping up to be a tinhat thursday...
Tinhat Tuesday has a better ring but this will do.
Hey how about WAG Wednesday?
Here goes;
Iraq. I believe the PTB can turn the level of violence up or down to suit their needs.
My WAG is that through years of sanctions, political coups, massive bombing, trumped up wars, money/bribes, a wide variety of destabilization activities (creating civil war, etc.) we are pretty close to getting the Middle East to a place where we can effectively manage it.
Or so thinks TPTB
I also believe that for the most part the leaders of the rest of the world don’t really have a problem with this. Well, maybe China but…
The one sore spot - IRAN
Cheers
Global WARMISM? What, believing scientific data is now a religion? Oh come on!
On the other hand, the author does have a point in that many people believe global warming to be true simply because other people do, or may not even really believe it to be true but simply agree because it's the popular thing to do.
After all, how many people do you know that go to church even though they don't consider themselves "religious?" How many people have you met that automatically assume you're Chrisitan because THEY are? Is believing global warming a religion? Certainly not. However, people can be easily swayed by others if they have no reason to stay with their current position, be it emotion, or fact.
~Durandal (www.wtdwtshtf.com)
Yeah, that's the latest tactic. They have lost on the science, so now they try and describe it as a religion of some sort. Either that or insist that it will be too expensive to try and do anything about so we should learn to live with it (I guess in a way restating Lomborg's writings).
Doesn't surprise me to see this sort of writing on the pages of the Urinal.
Its really absurd. The reason that people accept Global Warming is because there is a body of science that lies at its core. Yes, its not complete, and there is plenty of room for improvement, but it is now compelling enough for action.
On the other side of fence is not simply healthy scepticism - its largely manufactured denial. The same old lies get trotted out. The same quibbling around the edges and the same people whose allegiances are bought and sold.
Now, applying the precautionary principle to something as vital to the only planet we have to live on, means that we have to move to protect it as quickly as possible. The concern that this will result in a more constricted economy and a potentially less free society is probably valid. We may not be able to fly across the planet on a whim or drive every day everywhere in the largest vehicle possible. We may not be able to consume & discard hydrocarbons derived products in the same quantities. There may be uprisings from the formerly well-off's.
This is going to be a tough transition but it is possible to do minimizing the bloodshed. It will take education, understanding and sensible government that looks out past the next election.
"Have your cake and eat it too" has always been good politics.
The recent work at the Millennium Institute shows that the Best Economic Policy is a combination of the Best Environmental Policies in an oil constrained world. A FAR easier sell !
Best Hopes for that draft of a Peer Reviewed paper that I am working on,
Alan
The smooth operating of the western political systems will be interrupted by scarcity (energy, food, etc) - there is no doubt about that. Peak oil will solve many of the AGW issues unless we dive headlong into coal although I doubt that we could possibly mine the volumes of coal required to make up increasing shortfalls in oil production.
What will require a supreme effort will be curbs prior to the full impacts of AGW. How will citizens react to severe curbs on their ability to consume hydrocarbons is the question. Rationing based on carbon usage is probably how we will have to do it. The problem that will arise is when we see how small our carbon budgets will be. And will the rich be subject to the same carbon budget as the poor? I imagine that a future carbon black market will quickly spring into being where the plastic bags, shrinkwrap and the other little necessities of modern life will be traded at great prices.
Its going to be interesting.
Hmmmmm!!!
Last night I attended a meeting in the UK Parliament. Jeremy Leggett (Solar Century),Martyn Williams (FOE)and Chris Vernon from The Oil Drum Europe were presenting.
http://www.appgopo.org.uk/index.php
While waiting for the meeting to start I was discussing the climate change article that I was reading in the FT with the people sitting next to me.
Basically, to avoid irreversable catastrophic change the challenge is to reduce CO2 emissions to about 20% of 1990 levels by 2050 - because the emissions are cumulative we have to start reducing emissions now otherwise the challenge will be to get to the 80% reduction by an even earlier date.
So, the proposed interim target is a 30% reduction of CO2 by 2020 (with the added complication that we will have almost no nuclear by then!) We also need to grow the economy so we would expect primary energy use to grow 25% or so by 2020 if the IEA are to be believed.
The scale of investment in alternatives required was a shock to the climate change people - especially when I pointed out we wouldn't even meet the UK Kyoto challenge.
The words 'task' and 'impossible' come to my mind!
When Chris put up a chart showing the 'Russian' solution I could take no more, and left the meeting as I had probably seen the only solution that would do the trick. I was in Russia when they tried it ... not good!
The UK government are not prepared to plan including the effects of imminent peaking of oil and gas since, if word got out that they are even considering such a thing, the public would panic ... so, party on, it's official!
So how do we "fix" this then? Does this not show that it is physcially impossible to achieve CO2 cuts in the long run, save what PO will do to us?
Richard Wakefield
No. Not necessarily.
Nature has a way - in the very long run - if all else fails!
It works for all other species so I expect it will work for humans too - if we are not as clever as we think we are.
Because of the timing of the various FF peaks it seems we can burn all the conventional oil and all the natural gas that we can persuade to come out of the ground and still not double the CO2 levels from the pre-industrial era - now, you have to have faith that the politically run IPCC data is correct and that it is a safe or even desireable thing to do! - but you can't burn the coal.
So, the big question is, how do we stop people burning the coal?
And that is it! We are not as clever as we think we are. We think we can "fix" climate change, willing to spend tens of billions, when in fact we have no idea what the future will do to us. We have become so arrogant that we now think we are the gods of the planet. That's because of what we have done so far. Everyone is comfortable in the notion that anything thrown at us we can fix. Movies re-enforce this (eg Armageddon and Deep Impact, etc). The good guys always win scenario.
Your first point, however, is the correct one. In the end Nature will have it's say. We are a temporary blip.
Richard Wakefield
In the end Nature will have it's say. We are a temporary blip.
Perhaps this explains your policy preferences. It matters very little if the "blip" is a little shorter or a little longer. But what DOES matter (and is of more immediate importance), is if your monthly electric bill might increase by a couple of dollars or not.
It is just a matter of perspective and values.
Alan
Why?
So far, for most of my long life, it just does!
Because, sadly, people only vote for politicians that propose growth. Our modern OECD economies know no other way.
People only work for companies that grow.
The world population grows - in our world (that is, in reality, completely abnormal) exponential growth of almost everything is the paradigm - it's completely unsustainable eventually (hopefully not too soon) so enjoy it while you can.
Probably, like me, you enjoy a quality of lifestyle unimagined by your forebears (and that goes right back to the first cell that ever evolved, as life is continuous) - a thought that seems extremely improbable but is actually true for most people.
If you want to know what the opposite of growth is like? - try Zimbabwe!
So we can support a growing population. Which we need to grow the Economy. Which we need to support a growing population. Which we need to grow the economy. Which we need to support a growing population...
Does anyone alse see how utterly ludicrous this is?
We don't. We ban the construction of new Coal-fired power stations, and the repair of major elements of existing ones (like boilers). With bans in place, Generator companies will be forced to a) leave the market, or b) invest in cleaner technologies, such as Solar PV, Concentrating Solar Thermal, Nuclear, etc.
Convincing our various governments to implement the ban (especially in countries like Australia, where Coal exports support tens of thousands of workers) will be the hard part.
It is true that the economy needs to grow if the population grows. But it must continue to grow even if the population is static!
Here's why: Our monetary system is created by debt. That is money is created from debt. Video explaining the concept. http://youtube.com/watch?v=vVkFb26u9g8
What does this mean? Here is a micro example that scales to our fractional reserve banking system. Let's say that there is 10 dollars in the world because you borrowed 10 dollars from me the banker. So you have 10 dollars worth of debt but 10 dollars in hand that you spend on a pair of shoes. The owner of the shoe store then buys a chair from a furniture store that you are employed at and you receive a 1 dollar as a wage.
Now you begin to pay the bank back a dollar at a time. We begin to see the problem if you pay off your debt there will be no money in the system
What's worse if the bank is charging you interest (10 %) it becomes impossible to pay back 11 dollars of debt with only 10 dollars in circulation.
If the economy doesn't grow it collapses. It has to grow to pay interest on the current debt in circulation.
It seems like this scenario has to be wrong because it's so insane. And it is.
Here is another example of growth. A painter makes a painting he wants to sell. He has no money. Does the painting have any value? No, not until it is sold. So someone comes along and buys the painting for $1000. Now the painter has $1000 in cash and the buyer has a painting worth $1000. This means that the economy just grew in wealth by $1000. We now have $2000 of wealth here.
So the buyer then want's to borrow $1000 from the bank. He uses the painting as collateral. The bank creates the $1000 in his account from nothing (all the bank is required to have on deposit is a small fraction of what they lend out). The bank can do that because the item has a monitary value. So the creation of the money for the item is correct. Once paid back the money is "destroyed". Well, that's how it's supposed to work.
So now we have $3000 in wealth from that one painting and the initial $1000 the buyer had.
This is fiat money creation. The money is created to give a monetary value to goods that are created or manufactured that have intrinsic value. (bartering shows this)
This is why we went off the gold standard because other things have value than just gold. If you want a gold standard, then why not a plantium standard, or a microchip standard? Just as arbitratry. Gold has no more intrinsic value than anything else. Only a percieved value, just like everything else.
Richard Wakefield
Someone needs to read up on history.
gold has value due to two reasons.
1. it's pretty
and
2. it was rare and hard to acquire.
a gold/rare mineral standard is good because it sets ACTUAL physical limits on a system that normally has none. to create money in such a system one must have the same amount of gold/ rare mineral that what ever denomination you use.
a fiat system doesn't have this needed limit and always fails because the people who run it always succumb to the temptation of just making more to cover the debt.
or to put it even more simply rarity = value. thats why the artist's painting has value it's one of a kind. thats why gold has value, it's rare. in a fiat system money is not rare it's virtually limitless and because of this it always fails because it's value will always reach 0. the dollar has been crashing since we got off the gold standard it's just been so gentle a decline no one has noticed.
So, with a fixed amount of gold, how does the painting get value? As things are made that has value, the amount of gold would have be spread thinner to cover it (butter spead too thin), hence the value of gold would increase. How is that any different that the fiat money creation? And note, that fiat money creation is only because of goods which have value are created. I've discussed this at length with my brother-in-law in an attempt to understand how this works. He's VP of a government agency that overlooks banks and trust companies. His job is to make sure they follow the rules. Though, that said, he has been VERY busy the last few months on this whole debt issue.
The point is, as people create wealth through the creation of objects, is that not wealth creation period? Money is nothing more than a unit of measurement? There is certainly far less money, the float, around than the value of all goods, severices, bank acounts, stocks, etc.
Having a gold standard will also be skewed to the countries that have the largest gold extraction and mineral deposits regardless of all else in the country. Is that fair?
I would think the reason for getting off gold (which included the ability of anyone to own gold) was brought about by reasons that make sence, at least at that time.
That's not to say what we have is perfect, far from it. It's that there is no perfect system when people's two emotions are involved -- fear and greed. These two is what sets the value of anything. So the flaw is not the system, but those who practice the system.
Richard Wakefield
I keep seeing this over and over, and I must keep correcting it over and over.
It is NOT necessary for an economy to be growing for interest to be charged and repaid.
Let's say we have a sustainable, zero-growth economy. You and I each bring in $1000 per year, every year, which covers our living costs. You want to borrow $100 from me. I have tightened my belt and done without some things to save up that $100. Now, you are going to have to tighten your belt and do without some more things to repay me that $100 plus an extra $10 interest. Note that this is a ZERO-SUM TRANSACTION. There is no reason for either the money supply or the economy to have grown for it to happen. All that was needed was for different people to make different allocations of their available resources depending upon different priorities.
Note well, however, what was missing from this transaction: fractional reserve banking. I could only lend out money that I had actually saved. It is fractional reserve banking that inflates the money supply. A sustainable, zero-growth economy must have a stable money supply, which means that it must not have fractional reserve banking.
One final note: Some people claim that in a sustainable, zero-growth economy there would be no interest charged, but this is clearly wrong. In a sustainable, zero-growth economy, waste would be the cardinal sin. All assets would have to be used as efficiently and optimally as possible. This means that every asset -- including spare money available for investment -- would have to have a rental value. Assets without rental value that are available for "free" would inevitably be misused and wasted. A zero-growth economy would not be able to make up for the waste, resulting in a continually contracting economy.
How does this work, no growth, if people create goods that they can sell? Soon as a new item is created and sold, the growth in over all wealth has gone up has it not? If I grow a crop of wheat this year, and increase my output the following year is that not wealth growth? Soon as you add a new person on the planet, doesn't the economy have to grow?
Richard Wakefield
Increase = growth, sustainable means zero growth, means no increases.
Sustainable means that approximately the same size wheat crops are produced year after year, and those (plus other food crops) are just sufficient to support a non-growing population. New goods that are created, e.g. baskets, pretty much just replace the existing inventory as they wear out, with the old ones being recycled into compost to grow the materials for the new one. A closed circle, in other words.
Of course people buy and sell and trade, but it is a zero-sum game. Any one person's net gain would have to come at one or more other people's net loss. The only exception would be that to the extent that people have surpluses of different items in excess of their most pressing needs, the marginal utility for each person can be increased by trading those items that they have in surplus for other people's surplus that they don't have enough of; this would be a non-zero-sum transaction, but in a sustainable society at carrying capacity, there just wouldn't be room for an ever-increasing amount of it. There would really only be room for significant inequalities between people to the extent that the population was kept below the carrying capacity. If the population is right at carrying capacity, then inequalities mean that some people starve and die. Whether or not that happens, or is allowed to happen, is up to the population of that society, I guess.
I AGREE but we DO have a fractional reserve banking system that has an unstable money supply, therefore we need to INCREASE our current growth under the current WORLD banking system.
Or in other words, we need to continue to increase growth in order to continue to increase growth.
Except that we don't need to continue to increase growth. Indeed, given a global society that is either already past or very close to overshoot, increased growth is just what we don't need.
What's the Russian solution?
I don't have the chart - but, basically, the USSR collapsed economically and politically - and it had the desired effect - look at charts of USSR oil production as an example and you will see it - production of everything dropped by 35% or so!
I don't know how to put up a graph that shows this, somebody else may be able to help.
Oh okay, I just didn't know which "solution" was presented (Stalin's purges, etc). Thanks!
If cancer cells could vote...?
www.tripledistilledscarconol.info
The rep from COSEIA, the Colorado solar industries people frames it this way. We need to choose abundance over scarcity. Reliance on fossil fuels is being condemned to scarcity, relying on conservation and renewables is relying on abundance.
Ultimately, if the environment goes down the tubes, the economy goes down the tubes. We are dependent upon the environment for whatever wealth we have. Kill the goose, lose the eggs. I don't know if we can continue our current growth path, but it probably needs to be sold that way.
Personally, the need to grow is just a function of our collective illusion that growth is necessary for happiness and well being. It may be the other way around.
I think growth can be good at times and bad at other times. When a population has the resources and space to grow, then that is good for the population. When resources and space become limited, then bad things happen to the population if they try to maintain that growth.
We are really no different than any other organism in the world that is coming up to its sustainable limits of growth. Are we smart enough to recognize it and act accordingly before bad things happen?
Don't answer that...it was rhetorical.
The essence of capitalism is that it produces goods and services to sell at a profit. Part of that profit then becomes capital, which must (what else are you going to do with it) be invested to produce more goods and services to make more profit and capital. Ad infinitum. The capitalists are trapped in that kind of a system because of competition. All capitalists must try to grow because, if they don't other capitalists will, and put them out of b