Mar 252012
 
 March 25, 2012  Posted by at 11:18 am Finance

 

Hey guys,

 

Again apologies for the hiatus in posting from both Nicole and yours truly. It's been a crazy time lately, with 3-4 scheduled events daily, followed by not enough sleep and early buses, cars and speaking engagements. For the past 4 years, and certainly the past 2 when Nicole started developing her lecture tours, TAE for me meant 10+ hours a day 7 days a week on average of reading and writing. 

 

Australia and New Zealand have been the first time that was no longer possible. The lectures take a lot of time, obviously, and besides that, it's not as if we can afford to get satellite based internet access or anything like that, so we depend on available access and available time, which at times are simply not there. Ashvin's doing a great job in the meantime filling in the holes, but he can't do it all by himself either; he's finding out now what I did every single day since we founded TAE.

 

But that doesn’t mean we don't follow the news. We have active discussions behind the scenes about what goes on. 

 

There are those who feel that the Israel-Iran-SWIFT-Strait of Hormuz news is the most important thread out there. And I'm sorry, but I do not. I still see it as a hyped up piece of war mongering, and not much different today from what it was when Hormuz became a daily news feature right after 9/11. A lot of chest thumping and sabre rattling, but I don't see America going all-out war games with Iran. Not just yet.

 

China, Russia, the Arab world, none of them would look kindly upon such an endeavor. They all might feel they would need to get actively involved. I don't know any more than you do what goes on behind closed doors, but I don't see it at this point. Not with Obama as the incumbent president. After the November elections, if he gets re-elected, yeah, perhaps; at least by then there'll be a platform, a stage, to proceed. But not right now, while the Santorums and Romneys of the land are allowed to roam freely out there.

 

Of course, if any of them would be the next POTUS, anything goes. Either of them have expressed such far out of left (or right, if you will) field opinions, your bet is as good as mine as to what comes next. Still, don't be fooled into thinking any POTUS has any real say. US Presidents are bought and sold and marketed like so many flavors of detergent. The decision to go to war or not is not made in the Oval Office, but in places where visibility is a no-no.

 

Then again, as I said, I don't think Obama as a wartime president is marketable to the US population at large at this point in time. Sure, they could go in tomorrow morning, and I’ll have to eat my words, my socks and my underwear. All I can do for now is to try and feel and understand what could be going on in the heads of those behind the curtains. A risky thing to do for sure, but I'll do it anyway, since there are far too many loud war is here voices out there for my taste. 

 

And that sends the same jittery signals down my spine that the gold bugs do. Too many voices declaring the same made up hypothetical truth at the same time, how can that ever be a good thing? Financial markets never go the way that a too large consensus thinks they will; so why would anything else? We face a huge politica-industria-financia-media machina out there that tries to make us believe things are what they are not. 

 

That is why there is a TAE in the first place. If you got the truth from those guys off the bat, we wouldn't have to re-interpret it for you. But we all know you don't get that truth; Woodward and Bernstein have turned into George Orwell. 

 

How anyone can believe there is an economic recovery going on out there is beyond me; I really truly and simply don't get it. And it's starting to irritate me hugely. I don't want to name names here yet, but I see people writing on the web who just follow whatever direction the wind seems to blow from, without any critical neuron or opinion of their own. And that irks me. A lot. 

 

Look, if we would be witnessing a true recovery right now, this would be proof that you can you can get out of problems caused by too much debt, with more debt.

 

Because that is all that has happened over the past few years. Mind you, issuing additional debt MIGHT work, but only if you would see phenomenal economic growth numbers. Well, they ain’t there. Not in the US, not in Europe, not even in China. Note: phenomenal would be 8%, and preferably more than that. We're looking at 1.5% max, and negative for much of Europe, and that's if and when we choose to believe official government numbers. 

 

In short: the only reason the S&P briefly went over 1400 recently is that the financial world swallowed up your taxpayer dollars, and those of your kids and grandkids. Not because there's anything at all in the economy that's moving upwards.

 

In fact, I'd say: are you FCUKING kidding? BHP Billiton reports plateauing Chinese iron ore demand, and media only shift their focus once they report it? We've been saying for years that China must fall, simply because its money comes from western economies which have no way to go but down. 

 

There are still voices out there, believe it or not, that claim domestic consumption will save the Chinese economy. But domestic consumption is hardly rising, if at all. Just not going to happen. Forget it.

 

I never talk about things that involve violence and related matters on the site, just as Nicole doesn’t incorporate them into her lectures. The reason is not that we never think about such things, but that if we do address them, before you know it the entire focus goes to them, and exclusively so. It's not a matter of not speaking the truth, it's about trying to get your message across.

 

But, regardless, I‘ve privately been saying for a long time that I don't see how China can escape a full blown civil war in the next decade. I just don't see it. The largest human mass migration in history, by far, only to be met by a huge drop in demand for trinkets and other great value boosters from your main export markets. And when the migration tries to go in reverse, they find their birthplaces too polluted to grow food or even drink the water. Look, France has a reputation for protests. But France is just cute and cuddly compared to China, where there are no holds to bar.

 

Did that get me banned now?

 

Don't know if you guys followed this, but China has an obligatory change of leadership coming up later this year. And it's musical chair time. Their high council/politburo/give it a name is about as murky as opaque will go, which allows for a lot of infighting. Makes you think of similar battles under Mao, and the Gang of Four, the Cultural Revolution, Wikipedia them all if you're not familiar, all of which were responsible for millions of deaths and multiples of utterly miserable lives. 

 

Maybe when you have that many people, an individual life starts to appear less important?

 

Add to that that much of China's economic miracle is based on made-up numbers to start with, plus tons of local buro chiefs trying to look better than they really are through accounting tricks and fake gains, where loans are used for appearances, even if they come from an underground loanshark network that squeezes everyone for years to come just to look good today. 

 

China is a powderkeg if ever you've seen one. The economies where Nicole and I are traveling right now, Australia and New Zealand, voluntarily declare themselves highly dependent on Chinese growth. Well, Beijing itself predicts 7.5% growth now, far below the 9-10%+ of the past years. China’s iron ore demand is flat, not growing, as per BHP Billiton. And those numbers about rising oil demand therefore require a lot of scrutiny too. 7.5% may look great, but it's quite simply not if and when all else is based on much higher numbers. 

 

US and EU oil/gasoline demand, or refinery output, give it a name, is way down, like anywhere between 5% or a multiple of that. China's oil demand must have been hit too in view of other data like the iron ore ones mentioned above. And in the face of that oil prices are near record highs? Excuse me? Looks like demand is not up. And no, supply is not down either. So? Stuart Staniford had a post up on TheOilDrum recently that puts a lot of peak oil assumptions in question, so much so that I intend to write a re-definition of the entire principle in the light of the unfolding financial crisis, as in: Peak Oil: Not in Your Lifetime. If only I had the time to do the research.

 

And of course Greece is still up there, and Spain, which might be the next big target for the bond markets. 

 

Look, nothing has been solved, no matter what they try and make you think. And we will be back here in full force as soon as we can. Meanwhile, we are finally making some inroads with city councils and the like; tentatively, for sure, but then, we are the biggest potential threat these people have ever seen to their cushy jobs, it takes a brave mind to open up to what endangers any person's very own hard fought position. And we understand that. But it still must be done.

 

So anyway, I’ll try and do more of these stream of unconsciousness type reports; they are for now the best we can do, but hey, that's not too bad, I hope.

 

Nicole is as we speak reviewing the latest versions of the 4 part DVD series we are producing, Finance, Energy, Preparation, and Conversations. It's not like we're not present, it's just that we are shifting towards what will hopefully be better ways of doing what we feel needs to be done. And lectures, wherever they take place, are an integral part of that. So we do them. And enjoy the traveling, meeting people, all of it, while we do it. 

 

More to follow as we go along …..

 

 

 

 

 

 

 

Home Forums Christchurch, China and Peak Oil

This topic contains 0 replies, has 0 voices, and was last updated by  Raúl Ilargi Meijer 7 years, 5 months ago.

Viewing 15 posts - 1 through 15 (of 15 total)
  • Author
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  • #8580

      Hey guys,   Again apologies for the hiatus in posting from both Nicole and yours truly. It's been a crazy time lately, with 3-4 schedu
    [See the full post at: Christchurch, China and Peak Oil]

    #2011

    FrankRichards
    Participant

    Ilargi,

    Are you referring to Stuart Staniford’s TOD article about January production numbers?

    I admit to being surprised that C&C rose at all. However, a production rise of 1.5% over four years, with the price of Brent staying over $90 since mid 2009 seems a rather weak basis for questioning the whole peak oil concept. Note that ‘peak Oil’ does not need to mean ‘big kablooey a la 08 financial meltdown’. It can perfectly well be what I think we are seeing now, which is production being maintained only at prices high enough to be a drag on the real economy.

    C&C plateaued, and price started up, in ’05 almost 7 years ago. Even with the crunch in 08-09, if there was oil out there that could be produced for less than say $65/bbl it would be coming online by now. It is obviously not.

    #2016

    davefairtex
    Participant

    Illargi –

    I would like to know which Stuart Staniford post you were referring to. Do you have a link you could provide?

    #2018
    #2021

    Jack
    Member

    People in Canada are rushing to buy condominiums in the USA.
    $ 200.000 property selling for $50,000

    #2026

    Jack
    Member

    I was listening to Max Keiser and these are quotes for Chris Cook

    Soaring Oil price & weakening US economy-On the Edge with Max Keiser-03-23-2012
    https://www.youtube.com/watch?v=mMNO6LGEBiM&feature=player_embedded
    independant energy analyst
    there is a massive amount of capital in paper oil
    speculators are about to spike this buble
    pricing mechanism is disfuntional
    price manipulated
    managed decline or literally collapse
    before the end of the second quarter of this year

    #2027

    Jack
    Member

    I was listening to Max Keiser and these are quotes for Chris Cook

    Soaring Oil price & weakening US economy-On the Edge with Max Keiser-03-23-2012
    https://www.youtube.com/watch?v=mMNO6LGEBiM&feature=player_embedded
    independant energy analyst
    there is a massive amount of capital in paper oil
    speculators are about to spike this buble
    pricing mechanism is disfuntional
    price manipulated
    managed decline or literally collapse
    before the end of the second quarter of this year

    #2028

    Jack
    Member

    I was listening to Max Keiser and these are quotes for Chris Cook

    Soaring Oil price & weakening US economy-On the Edge with Max Keiser-03-23-2012

    https://www.youtube.com/watch?v=mMNO6LGEBiM&feature=player_embedded

    independant energy analyst
    there is a massive amount of capital in paper oil
    speculators are about to spike this buble
    pricing mechanism is disfuntional
    price manipulated
    managed decline or literally collapse
    before the end of the second quarter of this year

    #2030

    Jack
    Member

    I was listening to Max Keiser and these are quotes for Chris Cook

    Soaring Oil price & weakening US economy-On the Edge with Max Keiser-03-23-2012

    independant energy analyst
    there is a massive amount of capital in paper oil
    speculators are about to spike this buble
    pricing mechanism is disfuntional
    price manipulated
    managed decline or literally collapse
    before the end of the second quarter of this year

    #2031

    FrankRichards
    Participant

    Jack,

    That’s (major price decline in next 120 days) been the claim from the same crew since early 2010. It’s really time to revisit the analysis rather than just saying the same thing over and over.

    Also, while I don’t doubt the price of paper oil can be manipulated, I question whether it could be jacked up for this long if there was physical supply available. The Arabs might go along, but Venezuela, Iran, Mexico, Ecuador, Colombia, UK…The list of countries is long, of cargoes, short. Even Russia appears to be pumping flat out.

    #2042

    davefairtex
    Participant

    From reading the Staniford post, “all liquids” production is definitely rising, while Crude + Condensate is not.

    We all know that barrels of oil are not created equal from the EREOI perspective. We don’t have a chart for it, but I believe that Peak Cheap Oil is here now.

    Oops, I should probably wait for your article to start commenting!

    #2044

    ben
    Member

    peak oil?

    josh posted this chart two ways at the Undertow on 3/20

    #2045

    Golden Oxen
    Participant

    Jittery signals down your spine from the gold bugs. Sorry to give you the jitters Ilargi, we are only trying to practice what you preach. Moving in with the Intuit just isn’t a solution for many of us, and doesn’t seem like a wise idea from the latest AE posting. Why you berate the people who are trying in some fashion to hide from the credit horrors you describe so well is bewildering. Perhaps if you parted with some of your fiat tissue paper and purchased some of the shiny yellow you might be able to relax when the gold bugs are chanting credit collapse, currency controls, phoney government statistics, hyperinflation, bank closings, peak oil etc, the entire litany of cacaphonous sounds. Who knows,you might even get bitten by the gold bug.

    #2096

    ralfy
    Participant

    Oil production has not been able to catch up with demand, which is why other sources of energy, including biofuels, has been used:

    https://www.economist.com/blogs/dailychart/2011/06/oil-production-and-consumption

    and in terms of biofuels likely contributing to higher food prices.

    Thus, what should not be happening in our lifetimes took place five years ago. And if you consider per capita oil production, that likely peaked in 1979:

    https://www.jayhanson.us/page224.htm

    Meanwhile, world oil demand is still going up:

    https://omrpublic.iea.org/world/wb_wodem.pdf

    probably with demand destruction in OECD countries now being offset by oil demand for necessities in non-OECD countries.

    Given that, it is possible that demand destruction and more economic problems will affect OECD countries, with large amounts of money supply vaporizing, but smaller quantities of money either injected into BRIC and emerging markets or from forex reserves will be used to buy resources (including oil) for necessities.

    Given that, we face a combination of a credit crunch and a resource crunch.

    And then there’s climate change….

    #2099

    “….. they are for now the best we can do, but hey, that’s not too bad, I hope.”

    They are excellent! Thank you.

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