The Dark Years

U.S. Economy: Nothing to Be Optimistic About

I think you are right on. I wish I were as articulate in dealing with the issues of peak oil, food, and water as you are. These are the drivers of the future. There are really no solutions for the vast majority of us, including myself as I live in ground zero, (Orange County California) of the most pronounced problems resultant from these phenomena. You cannot just walk away from family, and your assets of years of hard work and saving, but that does not mean you cannot recognize the peril.

2010 Economic Trends: Paths of Least Resistance

Yes, I agree that energy production (almost exclusively oil based) is the driver of continued economic expansion that is in collision with the world's finite limits to provide the basic necessities of life for an ever expanding population. The real inconvenient truth is the advent of peak affordable energy, clean potable water, and adequate food production. It is refreshing to see this commentator address the issue as it seems to be a form of investing heresy to deal with the reality of the future that his convincing math shows is imminent.

If nothing else we should all concentrate on thinking about how we can deal these peak phenomena that will be effecting our children, and generations beyond. To hide from anything of such monumental consequence and pretend it is not really there, or simply ignore it, is unconscionable. In my own shorter term investments I trade the trends, but continue to buy physical gold on the dips as I want to leave my family something which has the prospect of having some useful store of value in an uncertain future. What are you doing?



On 2010 Jan 01 06:35 AM perceptions_now wrote:

> The Greatest Story Never Told
>
> It is being said that economic recovery is at hand and we will shortly
> return to "normal" rates of Growth.
>
> That said, we should consider what "Normal, Exponential Growth" means
> over time.
>
> As an example, a 3% growth, means that "consumption" of Global resources
> will double after only 24 years.
>
> Alternatively, if we use 10% as the economic growth rate, then "consumption"
> of Global resources will double after only 7 years.
>
> A prime example of the dilemma we face is Energy!
>
> Even at 3% growth, Oil production would need to rise from 85 mbd
> (Million Barrels a Day) to around 170 mbd by 2034. At 10% growth,
> Oil production would need to rise to around 300 mbd (Million Barrels
> a Day) by 2034
>
> The reality is that Global production has been stuck on a plateau
> around 85 mbd since 2005, it shows little signs of rising above that
> level, but there are signs that production has actually commenced
> a long term Decline.
>
> Given where we are in "the cycle", there are two major things we
> can not afford -
> 1) A continuation of "Exponential Economic Growth!
> 2) A continuation of "Exponential Population Growth!
>
> By the way, for those interested in "hockey", the Population graph
> shown in the above link does look like a "hockey stick".
>
> Exponential Growth Link -
> www.businessinsider.co...#
> economies-are-growing-...
>
> Related Links -
> Dr. Albert A.Bartlett - Arithmetic, Population, and Energy
> www.youtube.com/view_p... D2AA54&search_...
> tic%2C+Population+and+...
> The Crash Course - Chris Martenson
> www.chrismartenson.com...
>
> Unlike the bible, this story is not a matter of faith?
> Unlike Climate Change, it is not complicated or subject to tricky
> e-mails?
> This is basic maths!
>
> Why do we never hear this story?
> Ask your Economists & Politicians!

Why I'm (Cautiously) Optimistic About the Future

So many optimists with "faith" and "hope" for a bright future based on the expectation that America (and the rest of the world) can innovate out of the looming reality of peak cheap (read affordable) energy, primarily oil. Your thoughts about the future are uplifting, bright, cheerful, and yes, really optimistic, but you do not temper them with other views of a darker prospect. All that is necessary to unhinge everything is a supply disruption of oil, say a modest 5% due to recognized depletion in world production, or perhaps a "Black Swan" event causing a 15% supply reduction overnight.

As an astute investor I am sure to take into account the reality that we have a mere 300 million citizens', yet consume nearly 20% of the daily supply of oil and we are in competition with the rest of the world for that product. China's thirst for energy (coal and oil) is growing, and China has the financial clout to secure what it needs without regard or deference to America. Surely this gives you pause, and must inflict your soul with just a bit of pessimism.

I do not see how America, or the world can innovate out of the problem as everything is so connected to oil, and the supply of which is the driver for our economy. If one is disrupted, so is the other, and the time lines to deal with the problem are short, while the solutions unless applied soon and in mass will take many years we do not have. So I guess I am a pessimist and seek to do what I can with my investments to bolster the prospects for my family, and other generations on down the line. That means a simpler life style, smaller more energy efficient homes, less reliance on oil based transportation systems, and stashing away at least some money in physical gold. What's in your wallet?

The Truth Behind the U.S Government's Stealth Stimulus Plan

Your post is appreciated for it's originality of thought. Seeking Alpha is a wonderful form for contemplating investing strategies based on personal evaluation of analysis and your insights are always appreciated. Normally investors rely on the media talking heads, periodical pundits, and guru newsletters to grasp the complexities of forecasting how and where to place bets in the greater economic pool. Those voices in the wilderness of non compensated, sponsored, or biased information always give me pause to think, and think again what is the most logical way to move forward.

Yes, the great reckoning is coming as the stealth stimulus flickers out and the country approaches default on the back of bank failures, and grossly inflated housing prices. Our problem, my problem, and likely everyone's problem is complacency. We all go along hoping (and some praying) that somehow, someway, the government will solve this crisis. I am not optimistic that will happen and so articles like this help me decide what to do, when to do it, and how to get it done. For the present I will continue to hold what I own (rental real estate largely not under mortgage burden, but significantly depreciated from 2006) and live with lower rents and a more frugal life style. I will buy physical gold as a hedge against further dollar down drafts and keep to cash, except in my retirement accounts that have already fallen on average about half of their acquisition cost even though they are invested in hard commodity firms like coal, oil, and natural gas (ugh) I will pay no attention to Cramer, talking heads, nor news letter gurus, however will seek my own council and those of others here in Seeking Alpha.

World Recovery Is in the Hands of OPEC

Tony:

You are spot on in your precise observation. The real problem is that the world is dealing with a realization that Peak Cheap Oil is upon us. America is the most profligate user, and with our 300 million population we use about twenty or so percent of the entire daily world supply. Our competition for what remains is in large measure is China (and others) with six billion or so people. Accepting and acknowledging the realities of pending crisis like Peak Cheap Oil, Potable Water, and Peak Food Production will help ease our transition from a Super Power to a more humble lower tier player.


On Oct 26 04:10 PM Tony Daltorio wrote:

> This article is so wrong in so many ways.....
>
> 1) Even considering the use of military force to seize oil assets
> around the world is why Americans have become more & more unpopular
> globally.
>
> 2) The problem isn't OPEC or "speculators" - it's end of cheap oil,
> the rise of the emerging world, and vast overconsumption by the United
> States.
>
> 3) I'm so sick of hearing about the bubble in commodities. There
> are TWO bubbles right now - the US Treasury and stock markets.<br/>
>
> 4) Finally, there is no comparison between the rampant speculation
> going on in stocks right now as compared to the minor speculation
> in commodities. It's like comparing the light of the sun to the light
> of one firefly.

Dow 10,000: Show Me the (Real) Money

Mr. Ambrose Evans Pritchard has it right. A contingency plan is wise and prudent, especially in today's uncertain times.

Everyone is fixated on the direction of markets, housing costs, unemployment, and related indicators of depression or a move back to growth and a return to normal times. Generally speaking the giant in the room and under the rug is ignored and that is of course Peak Affordable Oil and Peak Potable Water. Assuming that you are not in denial that these realities are upon us, and given the gravity of the situation we all would be wise to follow this persons example. Think about a world where oil, the driver of our economy jumps to $500 per barrel due to world depletion and inability to replace sufficient oil at an affordable price to meet increasing demand. There is nothing out there that can match the value of oil and it's related products based on "energy in as to energy expended". The prospect for an "oil shock" like Saudi Arabia admitting their store of the product is in terminal decline would be very disruptive for the entire world, and especially so for the US with its profligate use of around twenty percent of of the world's output.

So having some gold in your portfolio, and your pocket make sense as well as holding the tools for a more self sufficient type of life style.

Jim Rogers on the Next 10 Years

In the mid term China, India, Brazil, etc are on the assent as economic steam engines. The US burdened by massive debt and a faltering economy is on the downhill slide. The world is in deep trouble as only a few brave souls speak about the realities of peak cheap oil, peak water, peak food production, and the impact those very real events will have on our lifestyles, populations, and economic well being. That is very real over the long term. I would expect that in the next ten years it will be a very different world.

For those who do not know, or have not considered one fact is that about 85 to 87 mbpd of oil are consumed worldwide every day, and we, right here in the United States use about 20 to 25 percent of that oil. As BIC countries grow they will consume more and will pay more than we can for the product. Remember we have only about 300 million people so something has to give.

Wall Street Breakfast: Must-Know News

I have no sympathy for the Fuld's of the world, and I think the comment about not knowing "what it is like on the 31st floor unless you have been there" is absurd. Contrast if you will the difficulties of being on the ground in combat as a platoon leader who gets paid fifty grand a year at best with any of the Wall Street wonders who earn in the millions, sometimes in a week or two. Americans, and I think most people anywhere resent excessive compensation for jobs that many of the little people could do. That people like Fuld have great economic success is largely due to "right place, right time", old boy associations, insider club, controlled, compliant boards, etc.and so on. The point is that if you can walk away with ten, fifteen, or fifty million for a couple of years of being in the "hot seat" there is no other compensation due you in the form of sympathy or understanding by anyone for how hard the job actually is.

10 Signs of a Recession

A valuable, thought based opinion from "wildhawk" of which Seeking Alpha needs more. Less of the political opinions filled with rage and loathing from both sides would be useful.

Seeking Alpha ought to be more or less dedicated to discourse about intelligent and productive investing ideas and thoughts. While it is true that political views are part and parcel of the investing scene and whom the next resident of the White House is will have a lasting effect on the economy many of the views offered are "talk radio" inspired. Seeking Alpha ought to limit, and or temper in an editorial fashion a good portion of the discourse to maintain creditability.

That having been said I offer this thought of my own. The essential problem of the economy, the debt/credit crisis, housing declines, the sinking dollar, etc., stems from one thing alone, and that is the advent of PEAK OIL. This is not a Republican or Democrat thing, nor is it Detroit's fault. It is OUR fault as a nation that has used energy, cheap energy in a profligate manner (along with the rest of the world) since the beginning of the eighteenth century. We are about five percent of the worlds' population and we use fully twenty five percent of the oil produced to run our economy. With world oil production peaking and then declining within the next few years the world economy will suffer along with the US significantly. Our investing and other thoughts should be focused on cooperative solutions to mitigate the biggest problem humanity has faced. If all of us, Republicans, Democrats, Right, Left, Conservative, Liberal, Evangelical, radio talk show host, or otherwise continue being so divided and unwilling to compromise we are doomed to a radically changed future.