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ozzy43's Comments Stream Stats
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Oil Prices Finally Changing Consumer Behavior
Anyone who wants to buy into the social model made famous primarily by the Scandinavian countries should first read:
www.timbro.se/bokhande...
'Better' is a highly subjective word - Holland's residents pay for their 'better' laws by accepting less liberty, vastly higher taxation, etc. Fine by me, but please don't presume that the tradeoffs you find acceptable are right or will work for every country in the world. I would welcome an end to the calamitous war on drugs here, and I would welcome an end to the misbegotten war on Iraq, among innumerable other 'wars' we declare on everything from illiteracy to teen pregnancy, but as for more State control - you can keep it, thanks very much. The State here has proven unworthy of that sort of trust - no matter who has held office. And in fact the greater the power of the State in a militarized nation like the US - UNlike Holland - the greater the probability that the military will be used to advance political agendas. Again, no thanks. Vast State empowerment is what got us into this mess in the first place, compliments of some other US presidents you probably think highly of: FDR, Truman and LBJ.
How the U.S. Financial Crisis Resembles Japan’s 'Lost Decade' - And How to Play it
You may want to check out the Heroes Act of 2008 - signed by Bush June 17, 2008. The exit tax is now the law of the land - you can still leave freely (though DHS has proposed changing that too - you'll need permission to leave the country before long), but you no longer can take your money with you. At least, not very much of it.
How the U.S. Financial Crisis Resembles Japan’s 'Lost Decade' - And How to Play it
Just what do you think the credit crunch is? Where do you think money comes from anyway? The vast majority of it is created out of thin air when loans are made. Credit crunch = massively fewer loans = mass money contraction.
How the U.S. Financial Crisis Resembles Japan’s 'Lost Decade' - And How to Play it
Well, that certainly would be a first. In the last 150 years of our history, I think that happened once...no wait, was mistaken. Never did. They were all politicians just like the idiots there now.
Trying to tie this cataclysm on one political party is grotesquely absurd, and completely misses the point to boot. As the author makes clear, this scenario was *decades* in development and both parties (which in the end represent precisely the same thing - Statism) bought into it and played along. Their friends are not getting hurt, just we taxpaying peons.
Fantastic article - those who do not remember the past are indeed doomed to repeat it, as Santayana said. And Americans as a people have zero sense of history, or of how directly it impacts them. Which of course is why we've consistently voted for imbeciles from both sides of the aisle, and which is why America deserves what it's about to get, sad to say.
The Oil Bubble Will Meet the Same Fate as Tech, Housing
Try tracking oil in gold prices, which is still not ideal, but is certainly better than using dollars, which are constantly manipulated by the Fed. Using that basis, the analysis looks quite different.
Another flaw is exemplified by this statement:
"gasoline shortages don’t exist and new oil is plentiful"
No evidence is given for this astonishing assertion. The US uses about 20M barrels per day - ~25% of the global total - and when pressed (begged) by the President of the US, the Saudi's - the only exporter in the world with (at least alleged) spare capacity - can only manage to squeak out an extra 200k - 500k barrels per day (and the world expects the Saudi's to generate an extra 10M barrels per day or so in the next decade??). That's plentiful? Have the Saudi's discovered a new Ghawar that I didn't hear about? Doubtful. Thus, there are very real concerns about supply going forward, and 'plentiful' is not the right word to use here.
The market is not based on whether or not there are gas shortages NOW - it's a leading indicator. Priced into oil is the uncertainty about supply and demand in the FUTURE. This analysis seems to miss this point utterly.
Further, there is a major difference between oil and housing on the one hand, and tech stocks on the other: houses and tech companies are not finite, non-renewable resources. Oil is. The same rules do not apply. How is it that so many self-styled 'oil analysts' miss this most fundamental, basic, incontrovertibly vital point?!?!
Oil prices will certainly correct from time to time, but until the uncertainty about long term sustainability of oil supply is directly addressed (and the utter lack of transparency from OPEC and the psychosis emanating from Russia are not encouraging), it's seems foolhardy to assert that high oil prices are a 'bubble', and it seems likely the uptrend, or at the very least a sideways action, will continue. In other words, concrete facts about supply will be required to drive the price trend down. No such facts are in sight at the moment, despite the speculation about demand destruction - speculation does not equal fact.
Confirmatory Bias and Oil Investing
The article author's bias becomes apparent with this statement:
"Investors ...ignore a permanent increase."
A "permanent" increase? That would seem to be an admission of belief in the abiotic origin of oil; i.e. the notion that oil is not a finite, non-renewable resource but is in fact infinite. This is even more of a fringe belief - by far - then peak oil!
The essay appears to be a work in over-generalization. This is just as fallacious a logical approach as confirmation bias, of course. Rather ironic.
A final comment: this statement: "Every other week there is news about some labor strife in Nigeria" certainly appears to qualify as confirmation bias in its own right under one of the definitions the author himself provides: "...the tendency to give greater weight to information that is supportive of existing beliefs or opinions than to information that runs counter to them. This does not necessarily mean completely ignoring the counter indicative information but means being less receptive to it..."
Bombs blowing up oil pipelines = labor strife?
Doubly ironic.
17-Year-High Cost-of-Living Surge Worries Bernanke, Too
Is Gold an Effective Hedge Against the Dollar?
Yes, U.S. Gas Use Dropped; But So Did Production
Are there publicly available articles or studies which present evidence for this view? Most of the analysis of this question I have seen indicates that all of this exploration and development will, at best, only partially offset the *decline* (e.g. www.theoildrum.com/nod...), and I have not seen any logic and fact based articles which make the case that an actual net *increase* in domestic production can ever be expected again. Would be interesting in examining any such.
Also, it seems evident that even if an increase could be achieved via new fields, this could only happen many years from now since it takes a decade or more to bring enough wells online to reach high levels of production. Does this author contend that oil prices will fall sooner than that, or is his timeline for falling oil prices several years out, as would seem supportable IF such an increase could be achieved?
Or is the assertion here that we'll be able to reverse the decline in existing fields? And if that's it, are there articles or studies which are based on evidence of this?
Why $140/Barrel Crude is Unsustainable
"The basic economic principle, which has stood the test of time and applies to this day, is that supply rises in response to prices..."
I think this ignores the fundamental fact that oil is non-renewable and finite, unlike most other products. If the supply of pencils runs low relative to demand, prices rise, and more pencils will no doubt be manufactured to meet the demand and to reduce prices over time. But oil cannot be manufactured like pencils. And most of the credible petrol geologists (which excludes the Russian 'abiotic oil' camp) are telling us that further exploration and drilling cannot even offset the depletion of existing wells, let alone add to top line supply numbers.
So the only way that this article and its author can be right, long term, is if the peak oil geologists are wrong. Hauling out an overly simplistic economics adage is not compelling. Solid evidence that the peak oil engineers and geologists are wrong would be - yet despite an intensive search for such, I have been unable to find such evidence.
Remember that an heretofore truthful adage like the one which undergirds this article's argument is obviated and becomes false when a fundamentally new paradigm replaces the old. If the peakers are right and we are at, near, or even past peak oil, then a new paradigm is upon us. And if that's the case, then I suspect that at some point, what happens to one's position in oil (or any other virtual, non-physical investment for that matter) will be the least of one's worries.
Renewable Energy: The Next Economic Boom
"...by 2050, power consumption is likely to have risen to 30 terawatts."
This should have said, 'based on current trends, demand for power is projected to rise to 30 TW'. The fact is, as any petroleum geologist will tell you (except for a few crazies in the Soviet Union who maintain oil is abiotic in its origins - and if you believe them I have some oceanfront property here in Phoenix I'll sell you), oil is a finite and non-renewable resource, and as many of these self-same geologists are now saying, we're past, at, or very near, the peak for oil. Which does not mean that oil is going away, but that cheap, easy to get to oil is going away. Current plans call for the Saudis to double or triple their output by dozens of millions of barrels per day to meet future demands - but they can barely seem to squeeze half a million extra out these days.
The point is this: all of the renewables depend on fossil fuels - whether for the mining or farming or extraction or manufacturing operations, as well as transport. Try generating hydrogen, mining - and then extracting oil from - tar sands, or manufacturing a solar cell array or a wind turbine (and then transporting any of it) - without cheap fossil fuels. There is no renewable form of energy (or energy storage) that can be swapped in for fossil fuels in the short term span of time geologists say we have - it would take decades and we don't have decades to replace this fundamental - foundational - piece of infrastructure, upon which everything else runs and depends.
It is a statement of fact to assert that power consumption cannot grow beyond power supply. Therefore whatever the power consumption will be in 2050 will most assuredly depend utterly on the supplies and types of energy which are available to be harnessed. Oxen and horses for much of the world, most probably. I doubt it will amount to 30 terawatts.
But if it helps you sleep at night, by all means feel free to believe that oil is an infinitely renewable resource. And get back to me about that property in Phoenix while you're at it...
Dow-Gold Ratio: Very Different 'Bull' Markets
So you can choose your startpoints and endpoints to make any argument you like concerning past and present values, but massive inflation = increase in gold's dollar value.
Not all Metals are Created Equal (Part I)
An Energy Policy That Makes Sense, Revisited
The most important counter arguments to the abiotic theory involve various biomarkers which have been found in all samples of all the oil and gas accumulations found to date. The prevailing view among geologists and petroleum engineers is that this evidence "provides irrefutable proof that 99.99999% of all the oil and gas accumulations found up to now in the planet earth have a biologic origin." In this process, oil is generated from kerogen by pyrolysis. While, Thomas Gold hypothesized that bacteria exist deep within the Earth's crust, and are the source of the biomarkers, these bacteria have not been found, the natural abiogenic formation of high-carbon hydrocarbons has not been demonstrated, and evidence for the biotic origin of petroleum is abundant.
This can only loosely be classified as a theory (speculation would be a better term, or untested hypothesis), and it is one without any evidence whatsoever, whereas the standard view of petroleum biogenesis - which the vast majority of geologists hold - offers innumerable proofs. To hold the two up as peers is disingenuous to put it politely. It is yet another exercise in fantasy, intended to allow the holder of such a view avoid dealing with the unpleasant reality of peak oil.
An Energy Policy That Makes Sense, Revisited
Government is NOT an agent of the people - it is NOT "an institution of social service" or even "an amiable, though often inefficient, organization for achieving social ends" (Rothbard) - it is, by and large, as Albert Jay Nock put it, "a distributor of economic advantage, an arbiter of exploitation", or even more damning, in Rothbard's view "it is the systematization of the predatory process over a given territory. ...The State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively 'peaceful' the lifeline of the parasitic caste in society."
This is the entity to which you wish to turn for solutions? It will never be what you think it is, and therefore will never behave as you wish and hope for it to behave. Because this would be precisely contrary to its very raison d'etre. You are assuming a grizzly bear is a cute stuffed teddy bear. That's a lethal mistake.
Therefore, your proposal is at its core, fatally flawed.