DrumBeat: August 17, 2006
Posted by threadbot on August 17, 2006 - 9:10am
Topic: Miscellaneous
US suffers world's first climate change exodus
WASHINGTON (AFP) - The first mass exodus of people fleeing the disastrous effects of climate change is not happening in low-lying Pacific islands but in the world's richest country, a US study said."The first massive movement of climate refugees has been that of people away from the Gulf Coast of the United States," said the Earth Policy Institute, which has warned for years that climate change demands action now.
Institute president Lester Brown said that about a quarter of a million people who fled the devastating impact of Hurricane Katrina a year ago must now be classed as "refugees".
"Interestingly, the country to suffer the most damage from a hurricane is also primarily responsible for global warming," he said.
Russian Pipeline Monopoly Warns Lithuanian Refinery of Long Shutoff
‘Powerless’ India eyes energy booster from neighbours
Sino-Cuba energy relations raise concern in Washington
Tom Whipple on Rethinking America's Cars.
Interior Department to Open Alaska Wetlands to Oil Drilling
Matthew Herbert's latest masterpiece sounds off against the oil industry...Speaking of which, your latest album, "Scale," is a statement against the oil companies and our relentless pursuit of fossil fuels. It's a timely subject, but one that the world has been struggling with for quite a while. What made you decide to pursue this topic at this particular moment?
Personally, it was part of my research for "Plat du Jour," my previous record, which was all about the food industry. I've been reading about oil for a long time but went a little further and realized the biggest consumer of oil is the food industry. We associate oil with cars and high prices in our gas tanks, but actually it's the entire structure of our civilization in the West. I've always been aware of it, but it wasn't until "Plat du Jour" that I realized quite how entirely we rely on it. Then reading further, it seemed we may have actually reached "peak oil," in which case we've got quite a big adjustment immediately ahead of us.
Barclays is pleased to announce the latest addition to the iPath Exchange Traded Note (ETN) commodities family. The iPathSM Goldman Sachs Crude Oil Total Return Index ETN began trading on the New York Stock Exchange under the symbol > "> OIL> "> on August 16.
Looks like Tom Whipple reads TOD. and your posts. This is from his Aug. 16th article now on the Energy Bulletin.
"Anyone who studies peak oil for very long soon learns that oil-for-export is going to dry up a lot faster than oil-for-domestic-consumption and those countries that import most or all of their motor fuel are going to have problems very soon."
Meanwhile, demand is exploding. Russian car sales are up by double digit percentages. A GM executive recently said that the only thing limiting car sales to the Middle East was limited transport capacity.
In regard to a different matter, doesn't it seem like we are seeing a little bit of an "Empire Stikes Back" pattern, i.e, it seems like there is a lot of anti-Peak Oil stuff out there. The auto/housing/finance and the media groups don't intend to go quietly into to the night.
Yesterday, The Economist called for the privatization of the national oil companies (NOCs). Let's think about that for a second. Now, aside from the outrageous arrogance of this and despite the fact that The Economist is a One Trick Pony -- what were they going to do, praise state-ownership? -- the bottom line is that the NOCs are guilty. Of what? Not pumping the oil fast enough, not investing enough money to produce more crude for export.
Their position strikes me as insane, the logic of unsustainable growth stretched to its absolute limit.
I wouldn't be surprised to see it happen, despite (or even because of) the stupidity of it.
The government is always short on cash, so there are plans to sell 49% in an IPO.
The debate is if only the trains should be privatized, or the whole company, including railway stations and tracks.
The CEO lobbies that the whole company should be privatized. However, in the last 20 years, about 50 billion dollars have been invested into high-speed tracks and stations by the tax payers. Compared to that number, revenues and profits are tiny.
The CEO and the union think that the 49% of the company should be sold for 2 billion dollars, so that there is a suitable ROI.
I would call that piratization. Hopefully, the parliament is smart to reject such ideas.
That's what the Iraq war is trying to achieve, and the message is that the guzzling superpower should do more of that.
IMO, we are in a temporary period of stability, before another drop in available net oil exports--and another round of bidding for declining exports.
I fail to see how we can expect to see rising net export capacity when the EIA is reporting falling production among the top exporters, and we have concurrent reports of rapidly rising consumption in most of the exporting countries.
Total US petroleum imports are up year over year, but three-fourths of the 2006 weekly import numbers (four week running average) are below the 12/30/05 number, while oil prices have been trading in a range of 15% to 30% higher than late 2005. The two uptrend price cycles this year correspond to import declines. IMO, refiners had to bid the price up to keep the petroleum coming.
Right now, the US, China and Europe are primarily bidding against regions like Africa. Soon, the US, China and Europe will primarily be bidding against each other.
How convenient that this has all happened right before we head into the fall elections...but then again...I am a bit of a conspiracy theorist...so this does not surprise me.
Mix a little terrorism in with some good economic news....perfect for re-election.
Look for surpressed prices until Dec/Jan.
You see this in some of the warmongering discussion of Venezuela -- the fact that they are not producing at a rate that certain industry experts think they ought to be is literally almost used a case for war.
Them bastards aint pumpin' our oil fast enough!!
The WSJ basically makes this argument. The Economist hints at it. It runs very deep in certain schools of political thinking: that all resources really are ours (well, "the market's" -- but same diff in the end), and that means they should be under the control of multi-national corporations (because nobody else can exploit them efficiently).
See, for instance, this video game. It's a low culture manifestation but shows how pervasive this thinking is:
http://www.mercs2.com/
And related story:
Venezuela lawmakers blast video game
CARACAS, Venezuela (AP) -- A U.S. company's video game simulating an invasion of Venezuela is supposed to hit the shelves next year, but it's already raising the ire of lawmakers loyal to President Hugo Chavez.
...
Pandemic describes Mercenaries 2: World in Flames as "an explosive open-world action game" in which "a power-hungry tyrant messes with Venezuela's oil supply, sparking an invasion that turns the country into a war zone." The company says players take on the role of well-armed mercenaries.
...
Lawmaker Gabriela Ramirez said "Mercenaries 2" gives a false vision of Chavez as a tyrant and Venezuela as being on the verge of chaos. She said the game could be banned under a proposed law aimed at protecting Venezuelan children from violent video games.
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It will be interesting if oil really spikes and we start looking for someone to blame. That someone will quite likely be Chavez.
"If we had those extra 2m barrels a day this oil shock wouldn't be happening! Let's get 'em!!"
If we invaded Venezuela would Catholic and Protestant militias start fighting each other.
Bush! Stop making enemies!
I can't tell if you're joking or not. I kinda hope so.
Hispanic is a term invented by the US Census so we can be more racist. Latino is more proper and more accurate.
<rant>
And maybe I just don't watch enough Fox and CNN..I have a hard time understanding why bombing civilians and shooting drones is legitimate warfare while fighting foreign invaders with an improvised explosive device set off by a cell phone is terrorism. Terrorism is an inflamatory word, and I resent this use of the term. If you would like to use an inflamitory term, then look in a mirror and use the term "racist".
When you are oppressed you use the available tools.
Probably the most important peak tool.
The standard definitions of inflation and deflation simply rule out something like crossflation, because they refer to the "level of prices". So, if some of the prices go up and some down, and the monetary supply is constant, then the level of prices is constant. So, deflation and inflation cannot happen at the same time.
Crossflation should not be defined as inflation and deflation at the same time.
In our context crossflation might be defined as rising commodity or energy prices and sinking equity prices happening at the same time.
People would need to spend more on energy and food, while their houses and shares lose value. Demand for most other goods would decline, prices of these goods sink. Suppliers of these other goods would lay off staff, some go bankrupt.
Some consumers will be unable to pay the energy bills and will go bankrupt. They lose their houses, but the banks will sit on a pile of foul credits.
That, in the end, could result in banks going bankrupt, and we are back in 1929.
Seems to be an interesting concept.
This is what I've been throwing around in my head for a while now. Im wishy washy when it comes to inflation or deflation, but I lean more towards inflation due to our massive debt. I don't think we're going to declare bankrupcy to the other nations for fear of the unknown, although I would like to see what would happen. So next is inflation to destroy the debt. I could see a mild deflation, followed by inflation as we struggle to service debt.
I think the key to much of this may be housing, specifically the next two years as ARMS reset. Fannie Mae could be the weak link, but again I think the gov't would try it's hardest to prop this up. At some point there is only so much life support that remains effective.
Tate,
Where was the original "nugget"? Would be curious to read it.
If commodity and energy prices are going up, that pretty much assures that we'd be in an inflationary environment. My question is whether you can have rising commodity prices against the backdrop of US economic slowdown, given that we consume about 30% of the world's extracted resources.
The counterargument to an staflationary scenario is: ok, we might have inflation if basic materials and energy start to run and housing at least stabilizes; but if housing continues it's slo-mo implosion, that is simply too big a piece of the economic pie not to seriously affect demand for most commodities. If the US is an anchor to world economy, then global demand has to slow and you'll see easing in commodity pricing, slack labor, along with decreasing asset values (maybe) -- hardly an environment conducive to inflation.
Another factor, is a possibly ongoing erosion in the US$. That would certainly be inflationary. It's tough to game. I wish I had a few supercomputers to run a model...
A steep decline in petroleum production--either for geological or political reasons--would seem to be stagflationary for sure. It would guarentee recession or worse and still drive inflation. I been reading this sight quite a while though, and I haven't seen much to convince me we're facing a steep and immediate decline.
I think we will have monetary inflation - meaning that the supply of money will continue to be increased by the Federal Reserve. In terms of price inflation I think asset prices, ie houses, will fall (deflation) whereas the cost of living will increase (inflation). I don't see these two outcomes as mutually exclusive. We have just come out of a period where assets prices have soared and consumer price inflation has been low - primarilly due to low cost manufacturing in China. We will likely to see that trend reverse.
To keep talking about inflation we've got to agree what it is. Let me point a few things out. Inflation described above is not based on MS increases. Unless there is some mathematical proof that price level increases and MS increases are equal, I dont think they are the same thing necessarily.
I was taught that the FED doesn't "set" FF rates per se, they engage in FOMC and they contract the MS to increase the FF rate. Sounds logical, but that's more difficult than it has to be. For 16 straight meetings the FED increased borrowing rates. Yet the corresponding MS measurements were all rising at the same time as interest rates rising. Is that not a complete contradiction of what I've been taught? If the whole point to raising rates is a reduction in the MS, then why would our MS be increasing in the face of increasing FF rates?
The whole lag time of 18-24 mos is bunk, since the FED instantaneously resets these rates as the NY FED trading desk. So if tomorrow they raise the rates, then that MUST mean they are selling bonds to suck up the cash TODAY, right NOW. So wouldn't next months money measurement correspondingly drop? You would think, but that's not what has been happening.
Wouldn't it be far easier for the FED to just "set" the FF rate at 25bp higher each time without doing anything, but announcing it? I only realized this after my class was finished, so I was unable to quiz my proff. If we stick to using this MS inflation increases, then we're talking about 8% inflation as we speak. Doesn't sound near as good as 3-4%.
http://www.theoildrum.com/?op=search&offset=0&old_count=30&type=comment&topic=&s ection=drumbeat&string=ponzi+scheme&search=Search&count=50"
If you didn't feel like engaging with a question it would have been polite to either ignore it or say so. Your half baked attempts to reference the world - as if your knowledge and opinion is naturally the only correct one - is...well, I'll use "amusing," for now.
You mean to tell me you didn't see the part of my post which read, "too many words too little time." I already told you a day ago I didn't feel like engaging this question, so why throw out some smart ass question unless you wanted a smart ass answer? Oh and where in the five sentences above do I attempt to reference the world?
contects=context
I don't really agree with the idea that capitalism is a ponzi scheme. I think statements like that are trite, but otherwise of no usefull value whatsoever. Capitalism is not a perfect system, and in fact it certainly has a lot of issues, but the roots of the problems we face today are not a result of capitalism, it's a result of our own lack of forethought and planning.
It's like when people say capitalism is bad because people borrow and spend their way into debt. Capitalism allowed them to do that, but it didn't cause them to do that. Blaming a system is just a way of passing the blame along.
Instead of equating inflation/deflation with prices do remember that....
Inflation = expansion of money and credit
Deflation = contraction of money and credit
Here are some sites that make an interesting case for deflation:
http://www.mises.org/fullstory.aspx?control=1583
(a little old but still good)
http://globaleconomicanalysis.blogspot.com/
(he often writes on inflation/deflation and includes peak oil in his analysis, see his Aug 11 article)
Also all his deflation articles are linked here:
http://tinyurl.com/g8od6
http://news.goldseek.com/RickAckerman/1093824441.php
(does the inflation/deflation debate)
http://www.jasmts.com/reports.php?page=econwinter
(ties it to historical Kondratieff periods)
http://www.safehaven.com/
(lots of guest articles, sometimes on inflation/deflation)