Here are my Top 10 links from around the Internet at 10 to 1 pm, brought to you in association with New Zealand Mint for your reading pleasure.
I welcome your additions and comments below, or please send suggestions for Friday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.
I'll pop any surplus suggestions I get into the comment stream.
1. From Celtic Tiger to Celtic Chimera in a few short years - Former US banking regulator Bill Black has been a trenchant independent critic of central banks and banking regulators through the crisis. He's well worth reading.
Now he has taken a close look in BusinessInsider at the Irish banking and economic debacle.
He makes some equally pungent points about the European Union and the Euro Zone's longevity.
He suggests the Euro zone and its banking system is contributing to systemic "accounting control fraud."
It's a good independent analysis of the Irish problem and what it means for global economy.
He has a good go at the German banks.
The nation whose banks have large, unrecognized losses on debt among each of the PIIGS is Germany. German banks acted like drunken “Girls Gone Wild” as soon as they were approached by a foreign borrower. Germany's Bank Gone Wild were hooked on yield – for a trivial increase in yield, without any meaningful due diligence, they made massive unsecured loans to many of the most fraudulent borrowers throughout Europe.
Borrowers engaged in control fraud have two great attractions for bankers gone wild – they typically report extreme profitability (which makes them appear to be creditworthy to the credulous) and they are willing to promise to pay higher interest rates).
Their promises, of course, have all the reliability of the producers' of “Girls Gone Wild” promises that the girls will be able to launch a film career if they shed their clothes. Where were the German banking regulators? They seem to have believed that “What happens in Vegas (Dublin) stays in Vegas (Dublin).” Instead, their German banks came back from their riotous holidays in the PIIGS with BTDs (bank transmitted diseases).
The German banks' regulators continue to let them hide the embarrassing losses they picked up on holiday, but that cover up will collapse if any of the PIIGS default. The PIIGS will default if the EU does not bail them out, so there will be a bail out even though the German taxpayers hate to fund bailouts.
2. Japan's ageing problem - The Economist has a groovy chart showing Japan's ageing population and mades this conclusion.
FOR about 50 years after the second world war the combination of Japan’s fast-growing labour force and the rising productivity of its famously industrious workers created a growth miracle. Within two generations the number of people of working age increased by 37m and Japan went from ruins to the world’s second-largest economy. In the next 40 years that process will go into reverse.
The working-age population will shrink so quickly that by 2050 it will be smaller than it was in 1950, and four out of ten Japanese will be over 65.
Unless Japan’s productivity rises faster than its workforce declines, which seems unlikely, its economy will shrink.
3. 'Peak Oil? Not a chance' - Clifford Krauss at The New York Times reports a variety of specialists saying there is no Peak in Peak Oil and we should all relax a bit.
Energy experts now predict decades of residential and commercial power at reasonable prices. Simply put, the world of energy has once again been turned upside down.
“Oil and gas will continue to be pillars for global energy supply for decades to come,” said James Burkhard, a managing director of IHS CERA, an energy consulting firm. “The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years.”
The outlook, based on long-term trends barely visible five years ago, now appears to promise large supplies of oil and gas from multiple new sources for decades into the future. The same high prices that inspired dire fear in the first place helped to resolve them. High oil and gas prices produced a wave of investment and drilling, and technological innovation has unlocked oceans of new resources.
Oil and gas from ocean bottoms, the Arctic and shale rock fields are quickly replacing tired fields in places like Mexico, Alaska and the North Sea.
4. Banks are good sometimes - The Daily Mail reports a pensioner in Britain who distrusted banks so much he put 80,000 pounds of life savings either under the bed or in his car. One day he left the bag with the cash on top of the car roof and drove off... It's a painful story.
The man from Southend, Essex, was in tears as he told how he'd saved £2,000 a year all his working life to ensure he could support himself in his retirement. For many years he stashed the money under his bed, but when his guard dog died, aged 12, he decided it would be safer to keep the money in his car.
He had bundled £10,000 wads of notes into eight small plastic bags, placed inside another plastic bag and then a blue drawstring bag.
He said: 'My car is never more than 10ft away from me when I am work so I can keep an eye on it. That morning I went to work at about 6.20am and didn't realise I had lost it until noon. 'I went home and checked my bedroom in case I had left it there. 'Then I realised I must have put it on the roof of my car. If not, I may put it down as I got in the car, but either way it was gone.'
He added: 'I'm gutted. I have worked all my life and have never been on benefits or asked anyone else for a penny. I don't have a (company) pension so this was all I had.
5. 'Cramer goes nuts' - I haven't seen this before and it's old, but it's worth watching. It's Jim Cramer commenting/ranting on CNBC at the time that Bear Stearns was melting down in 2008. A tad frightening, if a little old. It takes you right back. HT Rob via email.
6. 'Smell the fear' - UK Independent Party Leader and European Parliament member Nigel Farage delivered this Euro-hostile rant to the faces of Europe's leaders in the European parliament. It has a certain edge to it. HT Gertraud via email.
7. 'Short term thinking' - William White, the former chief economist at the Bank for Institutional Settlements, blames 'short termism' and a focus on 'flows' rather than 'stocks' for the credit crisis. White even mentions New Zealand as one of the savings culprits. HT Ed Harrison at Credit Writedowns.
In essence, White was saying: "it’s the debt, stupid." When aggregate debt levels build up across business cycles, economists focused on managing within business cycles miss the key ingredient that leads to systemic crisis. It should be expected that politicians or private sector participants worried about the day-to-day exhibit short-termism.
But White says it is particularly troubling that economists and their models exhibit the same tendency because it means there is no long-term oriented systemic counterweight guiding the economy.
This short-termism that White refers to is what I call the asset-based economic model. And, quite frankly, it works – especially when interest rates are declining as they have over the past quarter century. The problem, however, is that you reach a critical state when the accumulation of debt and the misallocation of resources is so large that the same old policies just don’t work anymore. And that’s when the next crisis occurs.
8. 'Just like Enron' - Bethany McLean, the reporter who broke the Enron story, writes at Slate that the US government's accounts are just like Enron's...
Start with the most basic problem: accounting. At the heart of Enron's artifice were accounting tricks that served to mask the true amount of debt the company had by keeping it off the company's financial statements. This had the effect of making Enron look far healthier than it was. At the time Enron went bankrupt, it had $38 billion in debt—only about $12 billion of which was reflected on its balance sheet.
The federal government is similarly able to keep its biggest debt liabilities off the books: Social Security and Medicare.
The vast payouts these two programs will need to make in coming years aren't reflected on the government's balance sheet. The government argues that's proper because the terms of the payout can be changed. (Really? See paragraph one.) David Walker, who served as comptroller general from 1998 to 2008, puts the liability at $45 trillion to $50 trillion. "They don't combine them, they don't add them up to show how serious the problem is," he said on The Daily Show.
John Williams of the Web site Shadow Stats said that if you added up the present value of all the government's liabilities, the annual deficit in 2008 was $5.1 trillion, versus the official number of $455 billion.
9. The swagger is returning to Wall St's spending habits - The WSJ's Dealbook reports here.
“Wall Street is back spending as much if not more than before,” said the New York cosmetic surgeon Dr. Francesca J. Fusco, whose business is booming again after a difficult few years.
Christie’s auction house says investors from the financial world who fell out of the bidding market during the 2008 credit crisis are “pouring” back in.
And here's a video of what a 23 year old investment banking analyst does for fun. "Models and bottles." He thinks its important to arrive with some arm candy...
10. Totally irrelevant but uplifiting video - Buskers sing 'Stand by Me'. The sound quality is spectacular.
Stand By Me | Playing For Change | Song Around The World from Concord Music Group on Vimeo.
67 Comments
HIS has been a laughing stock for quite a few years.....
http://www.youtube.com/watch?v=FR86-9MGqZ0&feature=related
regards
So in piece 7 we see that economists are into shortermism......these same morons of economists from HIS see decades of cheapish plentiful energy in piece 3.....no such thing as peak oil etc...of course none of them are geologists or engineers.
One thing they do get right though is,
The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years.”
So OK and I agree there is no readily vailable replacement and as Robert Hirsh said in 2005
http://www.youtube.com/watch?v=FR86-9MGqZ0&feature=related
To replace oil we need 20 years, 20 years to build the alternative infrastructure even if we had the "energy bit" that is the input to this infrastructure while keeping the old fossil oil infrastruture going....
http://www.youtube.com/watch?v=489IEnzg6GU
I just wish I wasnt in the same test tube as these cretins....
Hitler saves Ireland
Great link. Will include in Today's Top 10.
Loved your comment too about the accountants and real jobs over here.
http://www.interest.co.nz/rural-news/farm-sales-slowest-years
cheers
Bernard
Ireland v Iceland.
"while the IMF is demanding that Ireland cut minimum wages and reduce unemployment benefits, its mission to Iceland praised the “focus on preserving Iceland’s valued Nordic social welfare model.”
What’s going on here? In a nutshell, Ireland has been orthodox and responsible — guaranteeing all debts, engaging in savage austerity to try to pay for the cost of those guarantees, and, of course, staying on the euro. Iceland has been heterodox: capital controls, large devaluation, and a lot of debt restructuring — notice that wonderful line from the IMF, above, about how “private sector bankruptcies have led to a marked decline in external debt”. Bankrupting yourself to recovery! Seriously.
And guess what: heterodoxy is working a whole lot better than orthodoxy."
http://krugman.blogs.nytimes.com/2010/11/24/lands-of-ice-and-ire/
Ireland was doing MOST things right, the thing they were doing wrong was setting off a housing bubble by running a fringe land supply racket, same as California, same as NZ.
It almost hardly matters what ELSE you do, if you do the land regulation wrong, you will stuff your economy. End of story.
Oh yes, it's a symptom of "running out of land".
In Japan, Britain, Ireland, and NZ; alike. No differences there. We've all got housing bubbles because we're all equally "running out of land".
BAH. I hope not too many people are falling for that nonsense.
Even in the case of Japan, I have unearthed academic papers explaining that "lack of land", as a cause of their housing bubble, was nothing but a myth.
nothing to do with todays 10@--- a bit of a fine and don,t do it again---lashed with a feather
http://www.stuff.co.nz/timaru-herald/news/4389081/SCF-auditor-fined-and-censured
Brian Cowen
Save up those flippant responses till after you have read this response to that Kraus piece please.
http://www.postcarbon.org/blog-post/185293-there-will-be-fuel-an-open
Rarely is the public treated to such inaccurate, misleading and unhelpful “journalism” as in “There will be fuel” by New York Times correspondent, Clifford Krauss (New York Times, November 17, 2010) , even in this era of political spin and smoke and mirrors surrounding energy.
....
By J. David Hughes
David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including 32 years with the Geological Survey of Canada as a scientist and research manager. He developed the National Coal Inventory to determine the availability and environmental constraints associated with Canada’s coal resources. As Team Leader for Unconventional Gas on the Canadian Gas Potential Committee, he coordinated the recent publication of a comprehensive assessment of Canada’s unconventional natural gas potential. Over the past decade, he has researched, published and lectured widely on global energy and sustainability issues in North America and internationally. He is a board member of the Association for the Study of Peak Oil and Gas – Canada and is a Fellow of the Post Carbon Institute.
It'sd not only 'tribe' that you're 'less'.
Nobody said it was 'the end of everything'. We said it was time to adapt, before the time to do so ran out.
What your ridiculous typecasting does (I've just returned from delivering a 27-million dollar yacht back from the Pacific, have spent a pleasant day running an 'outdoor-education' programme, come home to a 5-year-old super-efficient house on 60 mortgage-free acres, running water and mountain views - Amish? Luddite?) is show that you are insecure, I suspect underwritten by fear.
That's common now - there are more and more who are starting to realise that the goal-posts have shifted permanently. Smartest first, of course.
Me, I don't usually throw invective around unless I'm well wound up - usually I resort to fact, science, logic. Things like that.
Your approach is (in my opinion) one of having a faith in a creed.
Usually a sign of weakness, that need for a prop. Sometimes it's religion, sometimes belonging to a rule-bound outfit like the Army, sometimes alcohol, sometimes drugs, and - it seems - sometimes believing in anything which will make your life better tomorrow.
None of which alters the reality that we are a fossil-fuel based society which, running at full-noise, ran into the limits of 'rate of supply', and therefore (lacking a suitable/developed/viable/timely alternative) is in trouble.
It's showed up as unserviceable debt, in fiscal terms, but that's only the voltage reading, that's not the state of the batteries.
Be very clear, I wouldn't swap my life for yours. Ever.
I've worked out what is coming, and won't miss a beat.
Usually a sign of weakness, that need for a prop. Sometimes it's religion, sometimes belonging to a rule-bound outfit like the Army, sometimes alcohol, sometimes drugs, and - it seems - sometimes believing in anything which will make your life better tomorrow
Goodness me. No, I just said peak oil and peak everything misses the point of market led human ingenuity: thus, yes, my homes are well insulated, efficient, etc, also, because it makes sense, but:
I've worked out what is coming
You see, then you go all Revelations and lose me completely.
The only thing you need worry about is Keynesian economics, Nanny Statistism, and possibly those scanners in US airports. Oh, and David Cunliffe, of course.
Truly.
I suspect he thinks he's more intelligent than he is.
If I've got it right, he comes from a religious background (I think enough to be evangelical - stroke - missionary), though I stand to be corrected.
If he carries that baggage, don't expect miracles......
Yes, Brownlee doesn't strike me as a sharp stone. He did reply to my Peak Oil letter with enough detail to show that he'd read and understood it, though. And someone commissioned that Clint Smith report, which he has obviously read. So too will Cunliffe, of course.
So both of them should understand EROEI. If they 'get' the ramifications, they'll be quiet about 'growth'. You can expect the alt-spin word-du-jour.......
vibrant.
Sounds good, means diddly-squat.
bit like 'intelligent design'. :)
Yeah, market-led human ingenuity will fix everything. It found cures for various cancers and the common cold just like that. Except oh wait, it didn't. Wanting something, needing something, pouring effort and research into something, are no guarantee that it'll work, let alone work within a viable timeframe. You're putting a level of certainty on it that isn't underpinned by evidence, which is by definition irrational and faith-based.
And for hellsakes, try to get past this ridiculous black-and-white, absolutist thinking and get your head around the idea of a continuum or grey area. It isn't a choice between the current wealthy Western lifestyle and living like the Amish. That's a false dichotomy - there's a whole range of options in between the extremes, and if you genuinely don't understand that then there's something faulty in your thought processes.
I think thats pretty obvious (thought process).
Problem is of course he's based his entire life on a set of extremist Libertarian beliefs that have no foundations to speak of and can only survive as parasites on a host society, which now is now going to shrink. So really he has no where to go without rejecting his fundimentalism I dont think he can.
Cant figure out if he does get it but is in total denial/rejection or if he simply cant and never will......
regards
Libertarian decision-making, from Atlas Shrugged:
“What do you go by?” [Jim asked.]
“Judgment.”
“Well, whose judgment did you take?”
“Mine.”
“But whom did you consult about it?”
“Nobody.”
“Then what on earth do you know about Rearden Metal?”
“That it’s the greatest thing ever put on the market.”
“Why?”
“Because it’s tougher than steel, cheaper than steel and will outlast any hunk of metal in existence.”
“But who says so?”
“Jim, I studied engineering in college. When I see things, I see them.”
Don't bother with evidence, data, the scientific method, long-term testing, or confirmation of results. Just decide what you want to be true then arrogantly declare it so.
If any people are acting like an arrogant medieval church that appeals to its own authority at the expense of objectivity and scientific method, it is today's hopelessly compromised bunch of leftist utopians who infest the "science" profession.
I'm with "Tribeless" on this.
Powerdownkiwi referred to "The Lorax" the other day, I only just noticed it.
I enjoyed that little fairy tale and still do, in a way, as witty child's level reading. But it does not resemble reality anywhere in the world except perhaps certain "planned economies". Did the rubber industry chop down the world's last rubber tree in Malaysia with a sickening thwack? Did the musical instrument industry do that with the last Sitka Spruce tree in Alaska? Did the health industry do that with the last Alternifolia Meleleuca tree in Australia?
I could go on, but anyone with a shred of intelligence will get the point.
The most numerous species in the world today, are the ones that humanity USES THE MOST OF. Some libertarian wits always suggest that if you want to "save" something, like the Kiwi, we should farm it and eat it.
As for "peak oil". It suits the profit gougers of the oil industry very nicely if they get all this free-to-air justification of everlasting price rises courtesy of the chicken littles. George Reisman makes the point more than once, that no-one is as much an enemy of "the human mind", as environmentalists who do not accept the capacity of technology and ingenuity and the free market as it has been abundantly demonstrated by now. Not even animist religion, or the Papacy, or Islam, or 6000 year creationism, is as much an enemy of "the human mind".
Half a century ago, the entire Nazi war machine adapted in mere months do do without oil. More recently, the Aparthieders in South Africa did the same. Humanity has been there, done that already.
ersatz oil lost.
EROEI.
I supposy you think we'd be better without a fishing quota too?
Oh no, that's right, you'd farm them. Everywhere.
You'd have to, to feed the 40 million, delivering it by foot.
No wonder some folk have to believe in the loaves and the fishes.......
Ah, now fish, apart from the scope there IS for "fish farms", are an interesting example of something that we CAN'T expect private property rights and free markets to "solve", other than by creating markets via quotas. We can sell rights to the sea bed for shellfish farming and for resources beneath it, but those pesky fish do like to swim wherever they will.
By the way, before wire fencing was invented, keeping livestock within boundaries on an efficient scale was a big problem for humanity. (Maybe we'll be able to fence the seas one day?)
So you concede that private property rights and free markets ARE the solution for most of these situations other than vexed ones like the fishies in the deep blue sea?
A lot of the problem with the cost of extracting coal and other resources, is that the environmental religion decrees that we are not to disturb "valuable" land forms. This needs to be overturned on the grounds that it imposes a religious value on everyone, at needless expense. This is not science at all. Or any other objective measure.
I'd sign a petition to preserve Mt Cook and Milford Sound, and any other landform on its particular merits. But "landforms" for their own sake, is a religious issue, not a scientific or economic one. This is paganism, earth-mother worship.
no - I merely point out that if you rape a resource, it depletes.
Fact.
I have no problem with folk first creating the resource (growing trees for timber for example) but I do if they deplete a resource (soil quality, oil for trucks) in the process.
t's called, oddly enough, sustainability. By definition, the alternative is unsustainable.
I'm into truths, not beliefs.
There's quite a difference.
no - I merely point out that if you rape a resource, it depletes.
Fact.
I have no problem with folk first creating the resource (growing trees for timber for example) but I do if they deplete a resource (soil quality, oil for trucks) in the process.
It's called, oddly enough, sustainability. By definition, the alternative is unsustainable.
I'm into truths, not beliefs.
There's quite a difference.
If only it were that easy. Aquaculture is grossly inefficient and often consumes more fish than it actually produces, in the form of fishmeal feed. The meal is made from critters like krill which are one of the underpinnings of the entire ocean food web, undeclarable catch that fishers want to conceal, off-quota species, all of which are essential in supporting wild fisheries. Raise herbivorous species such as abalone and you hit the same problem. In South Africa they turned to aquaculture to replace catastrophically depleted wild fisheries, and even at current farming levels are close to depleting seaweed faster than it can regenerate.
Hello, hello, wot's all this then, Hickey and Pellet challenging the 'status quo':
Tomorrow, Friday 27th in Auckland, starts 6.00pm. (There must be a Happy Hour, surley.)
Why the challenge:
http://www.mea.org.nz/documents/874-meactive_november_2010.pdf.
"The table [hit the link] shows that New Zealand’s exchange rate is 25 percent overvalued against the US dollar, the highest of the countries included. The table also shows that it is not solely a US dollar depreciation story with the Euro only 5.7 percent overvalued and even the Australian dollar was only 17.5 percent overvalued.
So far we have seen some cost cutting and minimal tax reform from the Government. This has been helpful but when the tradeable economy has seen n growth in five years more effective measures are required. Policy changes around tax balance, monetary policy and innovation are needed to stimulate the turnaround.
The Government’s advisors need to be more forthright in their advice. The 2025 Taskforce has been focused more on explaining differences between Australia and New Zealand than coming up with solutions. Government departments such as the Treasury and the Reserve Bank also need to be more forthright with their recommendations.
The tax balance was hotly contested in the Tax Working Group’s report with a Land Tax being one option and Don Brash has mentioned before that a variable excise tax could be used to quell domestic inflation. These are the sort of ideas that need discussion, not offhand dismissal. Imbalances in the economy will continue and significant investment in export growth is unlikely while the exchange rate is a policy loose end."
Plus, the S&P news, plus RB's and Treasury's SWG submissions, plus, .... and ..... plus ..... it might be PIGSNZ sooner than many would like to acknowledge.
Give those 'world best practice' TINAs hell guys.
TA'RA, Les.
RE:2 - my immediate thought was : this is hokum.
Surely you have to relate the 'shrinking economy' to the aforementioned shrinking populace. What's the per-capita?
Without doing that, the article (if such a twitter can be so described) is meaningless.
Good to look down the list of comments - only one got it, but at least someone did.
I could give you a few paragraphs of Colin Clark on the effects of population decline on economies, but you wouldn't understand it. It is about as bad as running out of resources would be if that ever happened. Catastrophic economic crash is almost certain, through the massive dislocations that occur in saving and consumption and investment.
like that shyte about Japan yesterday - not bothering to mention wealth-per-head?
Or investigating what wealth is in the first place?
People take 'the economy' the way folk of yesteryear took 'the bible'.
as gospel.
Big mistake.
Any farmer will tell you that if you crowd a paddock with stock, you end up with no paddock. Then you end up with no stock.
"Go forth and multiply" was a bad instruction.
Believe.
What absurd nonsense. Do you know anything about population levels, economic activities, and land use?
Do you know how much land per person a hunter gatherer society needs?
Have you got any idea, from authorised econometric works like Colin Clark's and Julian Simon's, just how LITTLE we have yet utilised the earth's surface?
How can you claim what is an "optimum" population level for the earth, without being a Nazi? I have discussed the morals of this before and you do not accept them. You WOULD do evil to prevent a perceived evil. This is wrong.
Here is how wealth is created. The resources of nature, acted upon by human labour and ingenuity, and the resulting production traded between "specialists"; human ingenuity discovering new resources and new uses for them; AND human ingenuity discovering more efficient ways to utilise resources.
Do you have a better definition?
"Money" is merely the convenient medium of exchange. The philosopher Rudolf Steiner said, and I agree, that "money" SHOULD be called something that people relate to "nature units", because otherwise, people forget what "wealth" IS. (And they sure have). Everything that money "buys" or has bought, is "wealth" that has been created according to the above definition. What changes, is the ratio of "value" of one thing to another as progress occurs.
Generally, natural resources have steadily got cheaper relative to what a human can exchange their labour for.
"........until we went through peak energy flow.
which underwrites everything that happens.
after which all bets were off......."
Sure, even if no-one is betting, I just still say that the free market is the way to handle it. Not a rerun of Bolshevism and mass murder. If people die because resources ran out, well it was going to happen sooner or later anyway, wasn't it? We are no more morally guilty of those deaths than we are of other acts of nature like earthquakes. But deaths here and now to merely and allegedly draw out the death spiral of humanity, we WOULD be responsible for.
I suppose this is where humanist reasoning versus God belief comes to a head. The humanist really has no sense of responsibility at all; it is actually possible to be noble in death-dealing. It is actually possible to be noble in throwing over man's capacity for ingenuity and adaption, in favour of "planning" for "who" lives and who dies - just like the Bolsheviks and and other examples of "enlightenment" utopians.
What happened the other day when I suggested some obvious scientific flaws in Darwinism? All I got was "straw men arguments", "don't understand biology", etc. BS. I know too much for you guys comfort, that's all. I've seen too many of you guys totally owned in debates on this subject; all your favourite "scientists" can do is appeal to their own authority. But Mr Hickey's forum is not the place. Note that even David Farrar had the decency to admit on Kiwiblog that he had a new respect for Gordon Copeland after he heard him debate at Vic Uni. (This after months of atheistic mockery of Copeland). Most people just haven't heard a debate at all, that's all, they've been filled with completely non-scientific fantasizing at school and never questioned it.
"Science" is now riddled with leftist charlatans whose entire objective always was political, just as the media, teaching, the legal profession, and the clergy are riddled with such people.
RE 3 - spin it is.
Even then, it acknowledges less oil in 2035 (81mbpd) than now) and acknolwdges demand increase of 36%, or a shortfall of 30 mbpd. The 'alternatives' suggested (coal 'dips', etc, add up to no increase).
That spiel is in face of this graph - which is in dispite by no-one:
http://planetforlife.com/oilcrisis/oilsituation.html
Just your standard Gaussian, and given it's global and over decades, hard to see a sustained 36% increase...........
There wont be..........
What someone should do is take the IEA's undiscovered oil assumption and plot it on that graph....bet it looks ludricous.
Time to move on and consider what that graph means and what can be done.....for instance what is the US going to use to buy oil off the middle east?
It has nothing, its broke with debt, it has no useful manufacturing.....except some nice weapons, so its options are sell them (and Saudi will only want so many), or use them and occupy the countries, its chances of success in either case are negligable, but it sure could cause a huge mess in the mean time.
NZ has excess food, one of the few OECD / developed countries to do so....only while we have only 4 million of course....how do we fend off the hungry?
and hungry there will be....not enough oil and gas == hungry billions....
Japan is concerned that it only produces 36% of its own food, yet its farmers are very highly subsidised.....where does it go for food? tuna and whale jump to mind....
regards
the latest IEA World Energy Outlook has been examined in a more in depth and measured fashion by Chris Martenson
The New York times piece by Klaus has been sliced and diced by Sharon Astyk
and for an examination of the implications of the IEA projection that every year, starting now the OECD including New Zealand will have to use LESS oil for transport see the NZ blog .. oilshockhorrorprobe
Re 3.
try this:
http://earlywarn.blogspot.com/2010/11/new-york-times-still-parotting-ce…
an excerpt:
"I guess the thing that bothers me is this: the piece reads to me as deeply and intentionally deceptive, while being skillfully crafted to avoid saying anything verifiably untrue. The constant mixing of oil and gas as though the two situations are the same. The cherry picked and misleading comparisons".
and:
"I have no idea what motivates the New York Times to publish this kind of dishonest propaganda masquerading as journalism, but it is extremely unhelpful".
BTw....
"Hinting that it might possibly be a good idea to move these renewable dreams to the drawing board after the advent of Peak Oil is akin to playing tunes on a sinking ship; at best, you are providing a captivating diversion."
http://www.energybulletin.net/stories/2010-11-24/its-official-economy-s…
Another titanic moment......
regards
"Tomorrow’s [economic] expansion was collateral for today’s debt."
~ Colin Campbell
and of course the debt has gone sour.......so meantime the Pollies are forecasting 3 to 6% annual growth because thats the magic number they need to get them and us out of the doggy doo doo tahst up to our eye balls.
Meanwhile in the real world 1% more GDP growth == 1% more oil used...if in the mean time that growth in oil is only 0.5% thats a GDP growth thats negative when you look at inflation....
Whats staggering is that who uses the most oil...and what those %s mean in mbpd lost to others to get them that %....
So for some economies to grow at 3 to 6% and thats say the developed world or developing ones like China, then 5% of what they use means in mbpd other countries % drops by a mind blowing blowing amount. In effect to feed the developed world's need for growth to pay back its debt and for China to keep growing many other countries have to use or buy NO oil what so ever. The implications are they simply have to cease to exist in economic terms. No imports, no exports and internally go back to the dark ages....and even then its not enough....So what countries are those? Pakistan say? who just happen to have a few nukes....
And this assumes there is 0.5% oil supply growth, when in fact you take out the fantasy of the as yet un-discovered oil thats a drop per year of 3%.....
So what has NZ got to not make us another Pakistan?
EB has a great para,
"I want to draw your attention to the green circles that I placed on there. Yes, you are reading that right. To balance everything out, the IEA has modeled the OECD as actually decreasing its consumption of coal and oil by significant amounts (that's what a negative 'incremental demand' requires: a decrease in current consumption). The difference is made up from a mix of renewables, biomass, nuclear, and natural gas.
Never has such a thing happened in the entire industrial history of the OECD. Never. "
http://www.energybulletin.net/stories/2010-11-24/its-official-economy-s…
So NZ is part of the OECD, a poor cousin....so maybe its no oil for us....keeping what we have in the ground looks a very good idea at the moment.
regards
Europe is getting messy, must be putting pressure on our interest rates.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/815829…
but if you are taking your $ out of EU, out of the USA, out of Japan, where's left? Im not saying your wrong, but Im not convinced you are right........
Sure looks bad,
"German plans to push for bondholder haircuts in Europe as soon as next year have triggered a surge in default risk on European bank debt and set off further flight from Spanish, Portuguese and Irish bonds."
Haircuts....yeah right.........run rabbit run........
regards
Billy - you must not have read earlier discussions here .
There are reasons why it is a problem. EROEI, lead-time, and realities of those alternatives.
EROEI is Energy Return on Energy Invested - or 'energy profit'. We used to get coal from 20 feet down, and oil under pressure at the surface. Now it's 2 km in, and deep-water as in the Gulf of Mexico. We cherry-picked the best/easiest first. Less energy profit per the volume extracted from here on, a process which can only, mathematically, worsen.
Lead-time - we've exponentially grown the infrastructure, and the population, on the back of growing the oil supply. All society is based on it, plastics, roads, fertiliser, food, processing - everything. So you have to replace that energy flow, at that max rate, to just maintain. We have a clear yardstick, then, of what is required.
We also have a clear handle on depletion rates, declining quality rates, and the increasing internal-consumption rates of the likes of Saudi Arabia (Indonesia and the UK, for instance, went from 'net exporters', to 'net inporters', rapidly).
Solar? yes, it's the origin of all energy - oil, coal, hydro, wind - and direct is best. The lead-time to convert? Jimmy Carter had solar panels on the White-House roof. He knew where it was going. Selfishness, ignorance and short-term thinking took them off. We're 30 years too late, and short of the copper and the rare earths required by current technology.
Wind - mostly too intermittent - but OK for NZ, as the hydro lakes are exellent storage batteries.
Waves? No. I've a mate doing his thesis on that, and it isn't a goer. Technically.
Hydrogen - is a vector, a battery, not a source. You need to create it, and that currently cost more energy that it returns.
Nuclear? yep, sure. If it replaced oil, then you'd get about 40 years, current rates of usage, current resources. A breathing-space, at the end of which you've just got another set of obsolete technolgy......
Powerdown - efficiencies - is the best card to play.
cheers - but solar doesn't have to be Voltaic (despite me running my house on one most of the time).
You can always focus on a boiler, and spin a generator..... I use a Gentle-Annie motor with my pelton-wheel - it's bullet-proof, cheap and easy. No reason why one couldn't hook up to a steam-turbine......
stay posted..... :)
Powering down, and efficiencies of the kind that I do indeed respect you for, will certainly be incentivised by the normal working of the free market. Currently the biggest obstacle to people being able to live the way you do, is urban planning. The whole model is wrong. As resource prices and energy prices rise, it is LOW density living AND working that will be "most viable". It is the inner city that will be unviable, especially the "wealth consuming jobs" that are concentrated there.
"will certainly be incentivised by the normal working of the free market".
That's an oxymoron.
"As resource prices and energy prices rise, it is LOW density living AND working that will be "most viable". It is the inner city that will be unviable, especially the "wealth consuming jobs" that are concentrated there".
I absolutely agree, but we have gone past half=empty in the tank. You have more folk than ever before using it. You dont have the lead-time to build an appropriate infrastructure anymore - perhaps when I first started discussing this (1975-6) there was time. Now you can just optimise - and retro-fitting the existing infrastructure is the best card to play.
Seriously, how you can accept the need to powerdown, while advocating growing forever, beats me.
It's another oxymoron, surely?
Powerdownkiwi, believe me, I like agreeing much more than I like arguing. I have always suspected that there is quite a lot of detail we do agree on; what we disagree on is the big political questions. I say "let it happen"; we will certainly power down as there is incentive to do so. I see the main obstacle to this, as "big government", assumptions re the sustainability of "wealth consumption", especially by the public sector, and misguided urban planning. You see the crisis as one of failed "capitalism"; I see it as one of failed statism.
And I see further encroachments of statism IN THE NAME of "resource efficiency", as worsening the problem, not improving it. For example, the assumption that imposed trends towards monocentric urban form and high density living and rail transport (in opposition to every "market" force) are "the solution"; when the biggest problem by far is the sheer imbalance of "wealth consuming" to "wealth creating" jobs in the economy. And the biggest concentration of wealth consuming jobs, is the inner city.
I see growth and powering down (per capita), as mutual, not exclusive. Kuznets curves. I also see technological gain as potentially exponential, while growth has never remained exponential for long. Maybe we are at the point now where growth will taper off at its own level. I just have no faith at all in grand plans imposed by scientific people who themselves lack faith in "the market". I am quite happy to go on record and say "this will fail", not that being proved right will be an enjoyable experience.
I fully believe that if the urban planners were not in the way, we would have long since seen far more mixed uses of land, a lot more dispersion of jobs and homes, and a lot more people living like you do, and making their livelihoods without ever going near a CBD let alone commuting into it daily. And the land on which everybody could choose to live as efficiently as possible, would be CHEAP. People's decisions of location, home type, energy consumption, travel, etc, need to be influenced MAINLY BY THE COST OF ENERGY. Bubble-inflated land prices, make LAND PRICES the main influence on these decisions, instead of energy prices.
Sure, energy prices reflect via the free market, into "price premiums" for efficiently located property; but "time" and "taste" count too. But "bubble value" does not reflect ANYTHING that is of ANY USE relating to "efficiency inputs". Bubble inflated land prices result in more people living in INEFFICIENT locations because "that is all they can afford". The land price component of their decision, because it is so much higher than it should be, "crowds out" the other inputs like travel cost and time.
The more I have studied the various connections in urban economics, the more clearly I see all of it. "Median multiples" are one measure of "income" related to "land prices"; land prices always WERE determined by people's INCOMES; when land was used for purposes of increased wealth generation, the price of land went up, but so did everyone's incomes. "Ricardian Rent" is GOOD "rent", which lasts and grows. Speculative bubble gains are BAD "rent" which ultimately is destroyed, taking "wealth" with it in its destruction. This represents resources used for nothing, somewhere in the chain of wealth creation. Plus, the normal efficiency with which the market allocates "land" to its most efficient use, is broken while the prices remain inflated.
I am only trying to explain all this because I think you and some others on here are bright enought to get it, and become allies in getting this message accross. This is the kind of thing only normally discussed between academics.
"......Unless Japan’s productivity rises faster than its workforce declines, which seems unlikely, its economy will shrink......"
No society in history with non-replacement birthrates, has ever survived. It is unlikely to be different in the modern economy, for economic reasons apart from the difficulty of 1 grandchild trying to support 2 parents and 4 grandparents as well as any offspring of their own.
Plese leave 'modern economy' out of it.
It's an obfuscating argument - did you read the Astyk piece?
Yes, controlling a population descent won'r be easy, but better to attempt it, than to emulate an algal bloom.
Aging healthily might be one key - at 56, I can still run a marathon, bike the 25km to Dunedin (over a 1200 ft hill), swim 2-4 km at a time - we're better understanding of physiology and nutrition that previous generations.....
And it depends on your definition of 'support'. Again, don't think of it in terms of 'the modern economy'. Putting Granny in a relocatable granny-flat so she can tend your vegie garden, or entertain the kids while you do, is hardly the end of the world. Ping ot on to someone else when she's gone.
Hey, Powerdownkiwi, "aging healthily" is part of our problem. In most parts of the world, it is called "reduced mortality". That is the main reason for the population increases in those parts of the world where population has increased.
For you, it is eating and exercising healthily. For them, it was nutrition, hygiene, water, and basic pharmaceuticals. Electricity helps too, and more floor space per person in their homes.
Whose responsibility is it to obligingly stop living so long, so "the planet" can be saved? Why not you, just as much as them?
You say: "...........controlling a population descent won't be easy, but better to attempt it, than to emulate an algal bloom........"
It's funny, you talk as if the Japanese and the Italians and the Spanish and the Russians and so on, are undergoing a "controlled" population descent, making an "attempt" to reduce population. It has been entirely a matter of free will all along as far as I knew. (The Chinese "one child policy" is a different matter).
I have no problem with that; but what these people are going to have to "attempt", if they do manage to feed themselves and pay their medical bills, is to retain their own democratic freedoms, and even their own sovereignty within their borders. That is partly what I meant by no society in history surviving with birth rates this low. Running a viable defence force is going to be impossible when your "grey power" voting bloc is 60% of the population, not that there is going to be the money there for it even if Democracy has not survived that long.
World Wars have a nasty habit of following depressions in which defence spending got cut; and population decline IS a "depression causer" of itself.
yes, it's an interesting piece of Boolean algebra.
What you do wrng, though, is approach it from a pre-concieved (ha) mind-set.
For instance, nobody gets their tits in a tangle about evolution, if they're not set on a religious doctrine. If you're not religious, you're the first such I'll have ever encountered.
Same with HughP - he wants cheap land for developers. so searches for just the stuff that might support it. Limits to growth are just 'Malthusian" - (a very scientific rebuttl).
Today, you claim that no society survives a declining birthrate.
Who told you birthrate was the problem?
All species find the opposite sex attractive, and reproduce at replacement rates - else they wouldn't be here.
So, apart from the current exercise (afluent societies and contraception) all other population declines were driven by something else. Pandemic, crop pestilence/failure, lack of wood, water, war (usually over one of the above).
Birthrate is never the underlying cause, but it will follow - less folk left to procreate following whatever.
Why did you jump to that as the driver?
Why not start with a clean slate, and examine all the possibilities?
Phil, you want to read Gareth Morgan's "Health Cheque" as aging healthily is indeed a massive issue - and a way to signficantly reduced our ever burgeoning health costs.
Additionally, he discussed end-of-life CARE as opposed to end-of-life TREATMENT. Presently we treat too many of the symptoms of natural aging at great cost - without any requisite improvement in the elderly persons quality of life in the final years (indeed in many cases prolonging their misery awaiting for the inevitable).
pdk is right - we need desperately to discuss these types of moral/ethical issues associated with aging. And you are right, we also need to openly discuss the real problem of low birth rates.
"Whose responsibility is it to obligingly stop living so long"
Nature will do it for us....the alternative is we try and manage that population reduction....personally I dont think that will happen.....we will algae bloom, in fact around us is exactly that, so within this decade there has to be considerable grief.....I cant see any other option.....
In terms of low birth rates, that as a species doesnt matter....its a problem for a declining nation....others will take its place....
regards
"Nature will do it for us".
I have NO PROBLEM with that.
As I have been trying to explain, "we try and manage"; IS an immoral course on our part if it involves coercion against people's will. But when "nature does it", via famine or disease or whatever, we are no more "responsible" than when an earthquake or tsunami does it. Even if some people THINK it would have been MORE "moral" to inflict certain harm earlier to prevent perceived harm later. Is it moral to torture terrorists to save citizens from future attacks?
".....In terms of low birth rates, that as a species doesnt matter....its a problem for a declining nation....others will take its place...."
AGREE. What, then, do you think about leaving resources in the ground? Who will get them?
Are the "others" who will "get them" likely to have our scruples about "the planet?
Great article discussing William White.
".......This short-termism that White refers to is what I call the asset-based economic model. And, quite frankly, it works – especially when interest rates are declining as they have over the past quarter century. The problem, however, is that you reach a critical state when the accumulation of debt and the misallocation of resources is so large that the same old policies just don’t work anymore. And that’s when the next crisis occurs......"
AMEN to that. "Misallocation of resources".
Nothing is quite so bad at doing that, as government spending either taxed or printed money. But tax policies and subsidies and regulations frequently also result in misallocation of resources. Sinking money into a bubble in the value of something non productive, is the ultimate lunacy. We could have built an awful lot of efficient infrastructure with the $30 billion to $60 billion of bubble debt we are now in. But all we have got for our money is "air" - that is the nature of a bubble. The assets might not have resumed their true value yet, but they will.
"But tax policies and subsidies and regulations frequently also result in mis-allocation of resources."
Indeed, bad tax policies, subs and regs certianly do.....but there are also good ones, however the USA would seem a classic example of pork barrel politics, where we have the worst of both worlds......in terms of a rational market, efficient market, free market etc its pretty obvious from the last 30 years that this also doesnt work....so the balance has to be somewhere in the middle....
regards
I hadn't read THIS before, but its author is clearly a soul mate of mine.
http://dynamist.com/tfaie/index.html
"Today we have greater wealth, health, opportunity, and choice than at any time in history - the fruits of human ingenuity, curiosity, and perseverance. Yet a chorus of intellectuals and politicians loudly laments our condition. Technology, they say, enslaves us. Economic change makes us insecure. Popular culture coarsens and brutalizes us. Consumerism despoils the environment. The future, they say, is dangerously out of control, and unless we rein in these forces of change and guide them closely, we risk disaster.
In The Future and Its Enemies, Virginia Postrel explodes this myth, embarking on a bold exploration of how progress really occurs. In areas of endeavor ranging from fashion to fisheries, from movies to medicine, from contact lenses to computers, she shows how and why unplanned, open-ended trial and error - not conformity to one central vision - is the key to human betterment. Thus, the true enemies of humanity's future are those who insist on prescribing outcomes in advance, circumventing the process of competition and experiment in favor of their own preconceptions and prejudices.
Postrel argues that these conflicting views of progress, rather than the traditional left and right, increasingly define our political and cultural debate. On one side, she identifies a collection of strange bedfellows: Pat Buchanan and Ralph Nader standing shoulder to shoulder against international trade; "right-wing" nativists and "left-wing" environmentalists opposing immigration; traditionalists and technocrats denouncing Wal-Mart, biotechnology, the Internet, and suburban "sprawl." Some prefer a pre-industrial past, while others envision a bureaucratically engineered future, but all share a devotion to what she calls "stasis," a controlled, uniform society that changes only with permission from some central authority.
On the other side is an emerging coalition in support of what Postrel calls "dynamism": an open-ended society where creativity and enterprise, operating under predictable rules, generate progress in unpredictable ways. Dynamists are united not by a single political agenda but by an appreciation for such complex evolutionary processes as scientific inquiry, market competition, artistic development, and technological invention. Entrepreneurs and artists, scientists and legal theorists, cultural analysts and computer programmers, dynamists are, says Postrel, "the party of life."
The Future and Its Enemies is a vigorous manifesto for the dynamist world view, as well as a penetrating analysis of how our beliefs about personal knowledge, nature, virtue, and even the relation between work and play shape the way we run our businesses, make public policy, and search for truth and beauty. Controversial and provocative, Virginia Postrel's thesis heralds a fundamental shift in the way we view politics, culture, and society as we face an unknown—and thus invigorating—future."
From Matthew Hooton in the NBR: (Not online, unfortunately)
"According to their own rhetoric, and that of the foreign environmental lobbyists who dictate it, the Green Party believes that the next century, and perhaps even the next decade, will be characterised by severe global turmoil. Climate change, they say, will cause mass migration unprecedented in human history, as hundreds of millions leave equatorial regions for the north and south. The seas will rise, creating refugees not just from small island states like the Maldives and Kiribati but causing havoc in China and India, with their vast coastal populations. According to the UN, Indonesia, with its 80,000km coastline, 17,000 islands and 240 million inhabitants, will be the country worst affected by rising sea levels, threatening regional security. Everyone will suffer unpredictable and extreme weather. “Peak food” will be upon us, with Sue Kedgley foreseeing “a new era of tightening food supplies, rising food prices, food scarcity, panic buying, long food queues and political instability.”Food rationing, she said in 2008, was already underway in US, as was rationing of rice in Auckland.
Pressure on other natural resources also risks global catastrophe. When China runs out of energy resources, it’s likely to march. In an effort to help, the Greens’ population policy welcomes “climate change refugees” but also demands that any effects on New Zealand’s environment, society and culture be limited. Their new MP, Kennedy Graham, tells us that, with a population of 4.1 million, New Zealand is already part of the global population problem. The global population, he says, must be “drastically reduced.” If the Green Party really believes all this, then it must surely also believe that New Zealand’s territorial integrity is at risk, not some time later in the century, but imminently. New Zealand is already capable of producing at least 20 times our own food needs. Our exclusive economic zone (EEZ) is 15 times our land mass and the world’s fifth largest, while the quota management system means New Zealand can expect to maintain our fisheries stocks long after others have devastated theirs. Back on land, New Zealand’s coal reserves are greater per capita, in terms of their energy potential, than Saudi Arabia’s oil. Total mineral reserves may exceed $10 trillion, which we’ve largely decided to leave in the ground. How splendid that when everyone else has dug up and burned their coal, New Zealand’s reserves will still be in the ground, waiting......."
Well, either the Greens are right, or Philbest the rejector of evolution is right.
Ummmmmm let me think.
Sorry, PB.
Your fault is to first establish what you want to hear, then only listen for it.
Clearly, you never defended a PhD.
Hooten lobbies for mining, last I heard. Brownlees son works for him, last I heard.
Kerr lobbies too, as does Hugh P.
What's the old thing about fleas, down, lying and dogs again?
Try facts, from first principles. You're capable of it - why the ducking and weaving?
I'm actually impressed. I thought the Greens were going socialist, in serch of votes. It's impressive that they're sticking to truths.
And what I smell from you, old son, is fear.
Yep, I do fear; as I have said, I fear that Naziism and Bolshevism were just curtain-raisers on what post-enlightenment humanity is capable of.
I am 100% certain that your utopian ideas to allegedly forestall the problems you see advancing, will be very much worse than just letting nature and the free market take its course. The number of survivors would be higher and the human condition very much more advanced, under the latter.
It is incredible just how a certain type of mind is incapable of deriving moral lessons or even objective lessons from experiences like 20th Century Communism. You detest the chaos of free markets, and love planning on the grand scale. Which makes you a bed-fellow of..........?
You're quite old, I assume. I haven't heard that kind of stuff for a generation or so.
Really, though, the clear difference is the shouldering of responsibility (me) and the denying of there being anything to be responsible for .
It's got nothing to do with 'isms' of any kind.
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