Thank God we found a substitute for oil this year just in time. I wonder if this theory also works for money as many people this Christmas will have to find a substitute for that.

Maybe everything is not lightness.
But, on the other hand, in the brief window that oil prices were high (2004-2008), every major auto manufacturer designed and began initial production on much higher mpg models, including the GM Volt, a true PHEV (40 miles on charge). The Ford Fusion recently obtained 53 mpg in a test by a fair LA Times auto critic.
The increase in alternative fuel research and development was dramatic as well, if less promising. Palm oil is competitive at $50 a barrel, and new hybrids bring much higher yields.
Oil was cheap for decades, then became expensive for three or four years. Now, it is cheap again, and may go down to $10. Yet, in that small window of less than four years, many large adaptations were forthcoming. World fossil oil demand had all but flatlined even before the recession.
Hard to imagine oil prices will revive for several years. Hard to imagine demand will revive for five to 10 years. This global recession looks bad.
Japan's oil demand, for example, is falling to levels not seen since the 1960s, due to conservation efforts and the recession. That's four decades of flat to down crude oil demand, but economic growth.
There is a likely scenario ahead, no great but not doom: Due to global recession and conservation, world fossil oil demand does not recover for 10 years or so. But, by then, Europe and Japan are deep into hybrids and PHEVs, and maybe even the USA. Maybe even China (where PHEVs are almost coming off production lines already).
Demand for fossil oil never recovers. 2007-2008 was the era of Peak Demand. We make progress in the business of improving the life of man, step by step, as we have done for centuries.
The price mechanism will play a large part in making this scenario a reality.

Pick one up for me, too, while you're out - it will help the economy.

Forget the TV. I'm going to have a tea ceremony with - and by - myself.

Aren't most LCD's made in Korea?
Sony has to source them from LG or Samsung.

Denninger http://market-ticker.denninger.net/had an interesting post a day or so ago titled We are all Madoff.

Not quite so rantish as usual, and really made a point IMO and also addressed Mr. Mikuni's views just below that post.

In spite of this, or maybe because of it, I say Merry Christmas to all.

Bob

Well, see!! Obviously, exports went down because importing countries found substitutes. The U.S.A. has found a substitute for oil; it's called a depression.

Note that at the end of 1998, Indonesia's annual net export rate was only down by 9% from 1996, but they had exported 44% of their post-2004 cumulative net exports.

We are seeing similar (estimated) numbers for Mexico. Their 2006 production was down by 16% from 2004, but I estimate that they had already exported, by the end of 2006, close to half of their post-2004 cumulative net exports

And I have no doubt you could do this with any number of post peak countries, including the U.S.

Notice that Mr. Tierney (See: Science Adviser’s Unsustainable Bet) did not talk about production/export numbers?

And this is because for Mr. Tierney and all those who believe in "the free market" price is the determiner of reality, not supply or demand. Ever notice that the economists classic supply and demand chart shows both as a range? And it is only price that is solved for?

If I start from the belief in Santa Claus, I do not try to explain gravity, I explain why reindeer aren't limited by it.

Oil is a commodity, and commodity prices are always volatile. It is quite possible to be absolutely right about the long term trend for a commodity and still lose your shirt in the short term. . . Fortunately Mr. Simmons was wise enough to only make a token bet.

Didn't you hear? Santa himself is looking to Congress to bail his operations out. (Seems that transition to high tech toys is causing problems with the elves). You can find the hearings on you tube. I'd include a link, but I'm at work and you tube is blocked.

Hope his flux capacitor doesn't run out of juice before he finishes his rounds. John

There's going to come a day, not too far in the future, when we'll all be hoping and praying that Santa leaves us a big lump of coal in our stockings because that's the only way we'll get cheap fossil fuels.

TS

I'm more inclined to think that Japan is actually speaking obliquely to China. The forgiveness of debt policy wouldn't work without China's complicity, which is unlikely to be forthcoming. I think this may have been an opening gambit to enter public discussion about the prospect of default and its potential impact on major US debt holding nations.

Just my theory, though.

Sharon

"We know that the US economy is going down the tubes and that the US dollar and US treasury securities will soon be worthless. Most countries in your situation would simply default, and then creditors like we Japanese would then have to write off our holdings of US currency and treasuries.

Exactly. How anyone could have been advising others to pile into treasuries and cash is beyond me. U.S. debt levels are phenomenally huge. It is not hard to see that it will never be paid back. Most American politicians probably don't realize this. But I can't say the same for their Japanese and Chinese counterparts.

At some point, a creditor nation is going to say 'no more'. It's inevitable.