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Friday, June 9, 2017

trade trouble


TRADE TROUBLE

Let’s just say that for the sake of argument, the PetroDollar collapse is a bit more gradual than I envision.  I’ll be the first to admit that I can be a bit too paranoid at times.  Yes, in the end I’ll be right and everyone else will be wrong, what with their 300 year long collapse and their 200 year long Fracking Oil, but I acknowledge that while I’m not timing the actual collapse I do try to time the duration of events unrolling and that might not be the smartest thing to do.  We might see our global trade position take a huge whack upside the head but it might not be as instantaneous as I am worried about.  Might, being the operative word here.  So, let’s try to wargame out the elimination of most rather than all of the global trade we depend on.  The Pentagon itself is dependent on 80% of its components being supplied by fuzzy foreigners.  Eighty.  Friggin.  Percent.  And these guys are supposed to be thinking strategically? 

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Before I go on a tirade over the imbeciles running our military ( oh, gee, look, Congress mandating that all the uniforms the military wears must be from domestic companies.  But don’t worry about those computer chips that comes from China which runs, well, everything ), let’s just say that the military actually is doing better than the rest of us for the most part, the Military Industrial Complex being about it for the domestic factories still running anymore.  And, again, we travel back to yesteryear during the Great Rice Shortage not even a decade ago ( like New Orleans with its still ruined neighborhoods, some examples just simply must remain poster children you keep returning to ) to see how trade disruptions treat you the consumer.  Because we are ALL consumers, no mater how far along with “self sufficiency” and stockpiling you are.  How many months was it before you could buy rice?  If Japan had not dipped into its strategic reserves, it would have lasted even longer, and those reserves were more economic than military and won’t be repeated as Japan is still hamstrung by Fukishima.

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Now, granted, rice ( and other food crisis such as when Russia withheld wheat from trade during the droughts ) is more indicative of population and food production and climate  issues ( which are only getting worse, despite reprieves ) but it also highlights how easy it is for trade to be completely shut down when only some of the supply system is disrupted.  After Fuki, it was half a year before flash memory was again freely available.  And that was after Japan had already outsourced manufacturing to other areas.  Other items are far too centralized, such as one city in China churning out 90%+ of the globes underwear.  Granted, we can all pull our gross, stained, elastic stretched whitey tighties out of the rag pile and have something to wear over our private parts ( Seinfeld reference “there’s just a thin layer of gabardine between him and us!” ) if need be, and I don’t envision a communist plot to deny us the clothing to contain our precious bodily fluids, but what else do you need to know about how vulnerable everything we need is to disruption?

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The UK was on wartime rationing during the fifties ( for those who refuse to remember historical dates due to overpaid public school teachers being more retarded than the drop-outs they encourage, WWII ended in 1945.  And, no, Spastic Sam, I don’t hold public educators in any high esteem in any general way.  There are always a few good ones, but the industry as a whole are full of scumbags, asshats, lazy whores and douches ), long after there were any U-Boats to be concerned with.  They had allowed themselves to become far too dependent on imports to feed themselves.  Given their economic condition, and the state of their colonies, is it any wonder they still couldn’t get enough trade years later ( of course, I wouldn’t put it past us Yanks to lend a hand in their misery, if we were holding them hostage for Cold War bases )?  And you know where I’m going with this.  Oil feeds us.  We are more vulnerable than Britain ever was after the war.

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So, let’s say that we lose thirty percent of our oil imports.  And that is being generous as far as optimism goes.  At the same time the fracking oil wells are losing production.  It wouldn’t be alarmist to assume a drastic fall in our oil from 18 million a day to twelve.  We had already gone from twenty to eighteen, the result of gasoline consumption taking a big squishy as unemployment shot up.  How do you expect to do any of the following: drive to your job.  Drive to go to entertain yourself.  Find any shoes or clothing.  Find a thrift store open.  Keep your job.  Find any car parts.  Buy any lumber to cover your windows that were broken in the riots.  It doesn’t take our economy going from 18 million barrels of oil per day to ONLY domestic sources of eight to disrupt our economy.  We could be seeing relative law and order and government functionality and still experience widespread trade disruption.  Sure, the lights would stay on ( until spare parts couldn’t be delivered ) as well as the Internet, perhaps, but what of your other daily activities?

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Retail stores would mostly all close.  Mail order stores  have the same suppliers.  The Post Office could deliver far less, less of the time.  Inflation would be jacked up to pay the bills.  Unemployment would be phenomenal.  We JUST had near trade disruption when a container shipper went bankrupt and suddenly the financial clearing house they used almost didn’t extend the credit to allow them to dock or unload ( it would have had knock on effects ).  I’d be stocking up on everything you can be mitigate some of the effects of the above.  It is never a bad idea, anyway, as quality falls as prices rise.

END

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8 comments:

  1. Like everyone else, I've been looking for a start date of The End.
    The SDR supposed to start 2018.
    Oil gets tight starting 2020.
    TEOTWAWKI starting 2030.
    Sorta....

    Dunno but every day we get is another day to enjoy. And prep. We are on the Titanic and we are all going to die one day. It is what it is.

    ReplyDelete
    Replies
    1. The Olduvai Theory says oil in 2030 is at the same amount of production as 1930, so assuming 2020 getting tight fits in with that plus the fracking fields going dry the same time. My best guess is we don't get to the end of Trumps first term.

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    2. The start date is a bit of a catch-22. You'll know it has started when you are too busy surviving today and tomorrow to think about the fact taht the collapse has started.

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    3. very good one.
      I think started back during the fuel price spikes of 2007. But maybe it was 1977....
      Although the over all trend since then has been downward, the yo-yo ups and downs seem to hide it very well from most of the people riding this roller-coaster of an economy and civilization.
      Remember when UPS was adding fuel surcharges to make deliveries? Sure they have done away with them (for now) but the actual cost of shipping is still up as compared to what it was immediately prior to that fuel price spike.
      Watch for another fuel price spike - that will give us our next peak and crash, as it destroys demand and starts another 'recession' (like we ever got out of the last one) we will have another bounce back - the pundits will say were going even higher than before (but we wont be, or at least not for long).
      The pundits and PTB will look at the 'indicators' and try to pump them up to prevent collapse. Which is kind of like trying to inflate a tire with a blow out - and judging the pressure of the ingoing air to judge when you have put in enough...

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    4. I can't remember the last hike, I want to say 2008/09. I seem to remember $4.50 gasoline for the longest time. I could be fuzzy though.

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  2. Daniel's math coincides with 2020
    Coincidence?

    ReplyDelete

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