Thursday, September 12, 2019

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. )
( today's related Amazon link click HERE )
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13 comments:

  1. Wall Street Journal recently reported that 90% of the fracking folks are not even meeting their costs - aka they are losing money. Lenders are getting very reluctant to lend them more money. You can expect to see fracking input crash. The bubble has burst.

    Now they could make money if the prices went up, but we know what that does to the economy.

    The silver lining is that demand for oil has leveled off. Some view this as a sign that it means that our economy is slowly stagnating, but probably at least some of it is due to a shift to more information technology.

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    1. Black Cat Dude! You're still here! Love ya, bro.

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  2. Terrible investment referral, Sir.
    Freeze dried yak spleens are yesterdays option. No matter how many yak spleens, you have stored, they do not provide a reliable income stream.
    In order to ensure financial security in today's troubled world, it is critical to invest in either Yak Spleen futures, or our new Yak Spleen index fund.

    ***Past performance is no guarantee of future earnings.

    *** For the conservative investor most concerned with preserving capital, The Yak Spleen Diversified fund may be an option. From time to time, this fund may invest outside it's core holdings of Yak Spleens, and diversify into warthog livers,unicorn appendix, blowfish pituitary glands and other carefully chosen organ meats.

    so on a serious note- Inflation is , as far as I can tell, the universal brick through the window all governments in debt resort to, usually a little at first and Zimbabwe at the end. NGFZ (Never Go Full Zimbabwe)**NGFV either.

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    1. Not sure why, but I have a feeling the Greenback will make the Continental look fiscally conservative. Now, excuse me, I have a hankering for a snack of blowfish gland.

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  3. Back at the junk land and the day after I got there the van wouldn't start. 15 mile bike ride to town, one hill I can't climb except on foot pushing. No part store in town. 20 miles farther to a part store, and my ass is on fire. Not happy and no way I'm pedaling anymore except home. Library lady lets me Amazon order on her computer, because no getting on the internet or borrowing books without a library card. Can't get a card without a address which you can't get without a habitable structure. Ordered a fuel pump and filter and a 66cc 2 stroke bicycle motor kit. I paid the lady cash and when she got the order she drove my packages out to my land. Van still won't start, but I rode the bike 75 mile round trip to get more parts and think it will be running soon. The bike ran well at 25 to 30 mph, but the chain slipped off one time, easy fix. One gallon of gas lasted about 110 miles. Overall I'm happy to have the back up for van problems.

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    1. Whenever I'm having a bad day, I'll just tell myself, hey, you could be Demented Guy. Then I'll feel better. 110 MPG? You are three quarters of the way there licking our descent into an oil scarce future. Good on you.

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    2. I do believe that there is a way to have packages sent directly to, either the post office, or a UPS style store.

      Didn’t you already have the 66cc 2 stroke motor mounted on your bike Demented Guy? I guess it must have failed. That’s the main reason I went with the Staton drive. It will soon be mounted, and I’m looking forward to having it. Currently I have to drive my mother’s full size, gas guzzling, V8 pick up, to my side gig, 3.5 miles away at my relatives house (Yes, I know it’s close, but it’s hot as f _ _k where I live right now). But I use almost no gas, being as close as it is. But my mother drives it 20 miles away to get feed for her horses, runs it low, then accuses me of never putting any gas in it. I’m looking forward to getting away from that situation.

      I do still have my 86 Jeep Cherokee, but it hasn’t been driven/registered in years. Technically I suppose that you can say that I’ve been car-less for many years now.

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    3. Family. One word that could write books.

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    4. Demented Guy - There are "amazon lockers" at 7-11 stores but you're probably 100s of miles from one of those. Indeed, you need an ally who's on-grid to get things for you, I've been there trust me.

      Your post reminds me of why I hate, hate, hate cars at a deep gut level. As my family went from middle class to the bottom end of poor, there was always that accursed dream of having a running car, with the end result that food money was spent on this or that car, that only seemed to run long enough to make the sale and then we were stuck with it. More food money got spent on parts that never seemed to fix the damned thing.

      I absolutely loathe the idea of being dependent on any motor vehicle and I think it's well to hoard bikes and bike parts if you can.

      It gets a bit better as in, you toughen up as you ride more.

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    5. Anonymous and anyone else reading - the curse of bike riders in the US it seems, part of the culture I guess, is to think you're in the damn Tour de France and try to ride as fast as you can.

      Slow. Down. Pace. Yourself.

      You can ride at 7MPH which will feel slow as hell and not even raise a sweat, and well, you'll travel 7 whole miles, hell to walk, in an hour. Your 3.5 miles in 1/2 hour. It feels really weird at first but learn to just poop along, and you'll be surprised how soon you'll find yourself at your destination and not sweaty etc.

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    6. I respect all of you that are working hard to be self-sufficient and independent for the hard times ahead.

      You are better than the zombie pansies that this degenerate society has created.

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    7. AC-thank goodness I have one minion with me on hating cars. I find 9 mph a nice cruising speed, no sweating. But that is just picking nits. Whatever is comfortable to each.

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  4. I had a 49cc 2 stroke on a beach cruiser. It was shaking the cheap bike apart at 20 mph.I gave it to a nephew when I got the van running. I bought a better bike at a garage sale. A Surly long haul trucker. It has fenders and racks and is top quality. Just didn't get around to getting it motorized before I needed it. The new bike rides like a dream at 25 to 30 mph. Next time I get paid I will order a backup, but my nephews is still running strong.

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