strong dollar 3

STRONG DOLLAR 3

I know none of you want to hear my blather about Peak Oil. We are far from running out of oil, you proclaim vigorously as you perform your 'Murica First jig, vapeing on the weak fumes of fracking fuel forever. But it doesn't matter if there is still oil in the ground after this country Balkanizes and we are wearing rat pelts and throwing broken FLIR scopes at each other as missile weapons. What matters is the lack of GROWTH in oil production and its economic effects. In case you shoved the memo up your ass as a suppository, we've already experienced that.

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I won't rehash history from long ago, bring up Arab Oil embargoes over Israeli shenanigans, mention Factory Flight or even bring up our failed Color Revolution over in Russia which quickly closed off the Siberian taps ( cause for the Tech Wreck? Not sure, but an interesting question ). Just looking at it from the failed real estate bubble, after global oil production peaked ( CONVENTIONAL oil, the stuff with the good net energy, not the Fake Fuel of ethanol or shale or similar weak ass crap ) in 2005, we have been economically humped from the lack of growth in the oil supply for over a dozen years.

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Wait. You don't actually believe the hype and BS from the government and lapdog media over our supposed recovery, do you? Perhaps you need to stay over at Rawles site, where nothing really bad ever happens if you have an inaccurate but overpowered semi-auto battle rifle and lots of freeze dried Yak spleen. It is a Safe Place over there. Just keep buying regular products stamped “Double Top Secret Survivalist Version” for a nice quadruple mark-up and you will be safe ( Canadian Prepper is the video version of the philosophy ).

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All this crap you are buying? Even the deluxe low cost version I point you towards? ALL manufactured/mined/produced courtesy of surplus oil. That cheap wheat? At mining cost silver? War surplus weapons at one weeks wages ( that used to be the WWII bolt action rifles which are alas nearly all gone. You'll probably have to settle for a Vietnam War era surplus technology AR )? None of that would be available to you without gushing oceans of oil. But NOT just oil. The economic system we based on all that surplus of oil. Which MUST be growing at all times ( our previous recessions and Depressions, if not manipulated into being, were created by a supply growth disruption ).

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This is super simple stuff. Refer back to The Crash Course ( one of the best ten dollar purchases I ever made, buying the CD-ROM. You can get it free online, HERE ). I take no credit for this-it was all thanks to Chris who made the simple observation that growth was built into our system because of the need to pay interest. I was just embarrassed to have not “gotten” it, even after reading libraries worth of economics books in my youth. That is how much the energy in economics is ignored.

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If oil production has slowed, to exclude its growth, or contracted, what does this do to the economy? Remember, ALL economic activity today is petroleum based. Even your centuries old hobby of cobbling or coopering or Stone Age weapons relies on oil to supply or inform you. The economy slows or decreases in lockstep with oil production. Fracking Fuel is NOT the same as conventional petroleum, not in net energy return terms. It doesn't matter how many barrels of oil we are pumping out of the ground, what matters is how many barrels of oil or oil equivalent it took to pump them out.

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Peak Oil turned out not to be about running out, but about the amount we needed to keep our economy running. If we were pumping 80 million barrels a day, and then production started decreasing and we now saw 72, we aren't JUST faced with a necessary cut of ten percent ( “we'll just be more efficient!” ) in use. We aren't increasing production. How can the interest be paid back? A recession was when oil was 80 MBPD and the next year it was still 80, rather than 80.1. Get it? We don't JUST need oil, we need MORE oil, all the time.

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But we haven't had more, we've only had an increase in decreased net energy fuels, and a decrease in higher net energy fuel, leaving us with a high production count but a decreasing real amount, in British Thermal Unit's delivered AFTER production. Declining net energy. Since oil is the economy, this is economic contraction. It is the REAL Great Depression, not the banker manipulated one ninety years ago.

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It is, quite simply, the economy being the first thing to suffer as oil production declines. And we are all at the economies mercy, one of the primary jobs of the 1929 Depression being the change of independent citizens into bank dependent wage slaves. THAT is what your crippled demon spawn East Coast Blue Blood Gott Damn Yankee FDR helped to facilitate, yoking citizens to the bankers control. All those middle class slobs who labored in the factories all their lives, even at Union wages ( Unions don't increase consumer prices as much as force the owners and bankers to share in the profits ), were the first to feel the economic effects.

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The real estate bubble wasn't really about overvalued real estate. It was about the bankers transferring that wealth through derivatives ( Goldman BallSaks hijacked the entire Greek economy through their use-having learned much from the Orange County experiment in the 90's ). For decades, in order to escape the effects of inflation, workers put their assets into housing. That ended suddenly, and trillions were transferred to the bankers. It wasn't JUST a scam, or a heist. It was the bankers surviving as growth contracted.

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So, before I veer down that rabbit hole that takes a week of articles, let us move forward under the assumption oil IS the economy and the lack of growth in oil means economic contraction. And add in that our economy only prospered rather than crashed after 1971 because of Saudi oil. It has been known that Saudi Arabia damaged its fields through overproduction, being a swing producer. This was known since the turn of the century, close enough to the forty year mark that ALL conventional oil wells follow in their production cycle ( as opposed to the FOUR year mark, maximum, of fracking wells ).

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Our economy is already contracting along with conventional oil supply. Now what happens when we lose more Saudi production? Which has been decreasing, by the way. I won't even account for Saudi domestic consumption. Just production. And again, it isn't about the oil so much as the economic effects of the oil. The PetroDollar was free oil and free debt. The PetroDollar system is in serious trouble. It will be a Seneca collapse, once the tripping point of nonparticipants is reached. Boom. Fuzzy foreigner little brown people are no longer financing our government spending.

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Now what happens? Government reducing spending? Ha! Aren't you just the cutest unemployed comedian. No, genius, it is called inflation. You are currently blinded and bedazzled by the illusion of a strong dollar. Which portends massive inflation. We've had plenty of inflation since the PetroDollar was instituted. I mean, hello!, inflation beyond that same percentage of oil production growth is just extra hookers and blow for the bankers. Like you would pass that up. But it wasn't unreasonable unmanageable inflation. It wasn't massive inflation. Cinch up your panties, folks. It's ahcomen.

( .Y. )

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