William Davison

High Gold Prices: It's the Oil, Stupid

So you buy Gold which pushes up the price and then the miners mine more Gold out the ground using lots of energy and then you take that gold and put it in vaults back underground again. That's a Zero sum game as far as humanity is concerned.

Buffett 1998 "Anyone watching from Mars would be scratching their head."

It just makes Peak Oil problems worse, we waste capital and energy instead of using it to develop new energy sources and we have been warned before on this.

"So Midas, king of Lydia, swelled at first with pride when he found he could transform everything he touched to gold; but when he beheld his food grow rigid and his drink harden into golden ice then he understood that this gift was a bane and in his loathing for gold, cursed his prayer" (Claudian, In Rufinem)."

Energy Impoverishment: Heading Back to Coal?

25 years is a remarkably short time to complete energy transition, it took almost a 100 years last time, so I assume your only talking about partial transition, as I suspect we will still be using Oil for Air transport and many of our trucks in 30 years time if not longer. Then there are fertilisers and plastics to consider. We cannot replace all our oil infrastructure in 25 years, the Alaska oil pipe line over 30 years old now, you cannot simply write off decades of investment within 25 years.

California - And by Extension the U.S. - Headed for Permanently Smaller Economy

Re robert.b.fe...: "Wind power is not viable unless oil is aproaching $200 a barrel" that is not right. The figures I have seen in the past would suggest no more $100 a barrel would be needed to make Wind viable and that is without a smart grid.

As for "Drilling off shore and in ANWR", great! so what do you when they their used up, like the North Sea which took less than 30 years to Peak! Your children may be very glad you did not drill those area's, its going to very difficult to replace all the uses of oil in the next 30 years, you should leave some for the next generation. I am sure when oil goes back over $100 they will drill anyway and it will ease the pain but its not a long term solution.

Saudis are not stupid, they know the faster you drill the more valuable their Oil becomes.

The Nigerian Delta, Oil Actors and the Global Oil Landscape

Well may be there are outside forces at play as oilbullbear says, but MEND have a issues that should of been address years ago, the people of the Niger delta appear to have experienced some the worst environmental costs of oil industry anywhere and few of the benefits. Environmental campaigners have complained for year about the situation in the Niger delta.

And please explain to me why, when we are being told to do our bit to cut carbon admissions, Western Oil companies are still flaring gas, its outrageous. What a waste!

The Global Oil Scam: 50 Times Bigger than Madoff

"There is NO shortage of oil. OPEC alone has 6-7 Million barrels a day of spare capacity"

OK then just invade the middle east and take their oil then. Sorry you tried that already, why do good men have to die for Neo cons and their addiction to cheap oil. I supported the Iraq war but I will not support any future attempt by US neo cons to take other peoples oil, your on your own mate. The Saudis can sell THEIR OIL at what ever price they choose and good luck to them, they have the good sense to conserve their oil, while you wasted yours.

George Soros: The Guru Outlook

Because he does not have sex with his relatives.

On Oct 29 09:29 AM p church wrote:

> If Soros is so smart, why is he a liberal?

The Shallowest Generation

I find some the comments about Obama a bit odd re the Fed deficit. Both Regan and Bush have increased deficits and I think Nixon did as well. As an outsider (UK) the Republicans presidents seem to have problem with balancing budgets. Giving away Tax cuts that have not been earned through reductions in spending or GDP growth appear to be a characteristic of Republican presidents.

I was going to say in UK and Europe right wing parties usually reduce deficit and left wing ones increase them, but thinking about it there plenty of example of right wing parties in Europe allowing deficits to mushroom. Right wing governments have a poor record of reducing deficits when compared to their rhetoric.

Natural Gas: Unlimited Demand in the Long Term

The other factor about Natural Gas is it works well in combination with Wind Power, as NG electricity can powered up fast when wind speeds fall, where as you cannot do this with Coal quickly or efficiently and Nuclear is always on (or suddenly off). Also NG power stations are cheap to build, 30%+ cheaper than Coal. This appears to be happening in the UK already, with NG capacity of around 50% and a planned 20% wind. This combination is a quickest Carbon reduction fix, as NG produces almost half the C02 of Coal and both Wind and NG can be built quickly where as Nuclear can take 10 years and there are going to be major bottlenecks in build the ones already planned. When planning new capacity I suspect Wind/NG this is going to be favoured option in the next 10 years, in the US, Europe and increasingly in China and India. In theory a Wind/NG combination could cut C02 by 2/3 for every Coal plant it replaces.

High Gold Prices: It's the Oil, Stupid

"williamdav: but if there is a true currency crisis, will the paper assets you mention make it through to the other side?"

Well my answer to that is the rule of law, even in Germany's Weimar republic, as far as I know the stocks survived and big industrial companies remained. The USA and UK have shaped the world for the last 250 years or so and its guiding principle has been the rule of Law and respect for property rights. Remember despite George Washington leading a rebellion against the Crown, Barrings of London continued to act as his bankers. Where do keep you keep your gold, under your bed, I suspect you have a bit paper and if my assets are paper assets then so are yours. Remember Silver holdings were banned in US in 1930's.

Moderate inflation is a great way to wipe out your debts as their held in your own currency, as the Fed and the Bank of England knows. You only need 7% inflation a year to halve the value of your debts in 10 years as the Chinese are about to find out. The trick here I think is not to hold Fiat currencies in cash or Bonds once the inflation starts. I use to have gold and silver like you, but there are other assets that can hold their value. And Gold pays no dividend or interest, so your counting on speculative gains. Nothing has a fixed value, be it Fiat currencies, gold, land or companies, they all change in relation to each other.

International Energy Association: Forced to Eat Their Optimistic Data on Future Oil Supply?

If current field depletion is 6% a year as the IEA has forecast and current conventional crude production is about 72mbd, then your 18.3mbd new supply is wiped out in 5 years and your 25mbd in 7 years.

On Nov 11 01:37 PM OilFinder wrote:

> The IEA is not being pessimistic on future oil supply.

> Subtotal is now 18.3 million barrels/day in new supply by 2020.<br/>
>
> I could go on with more examples. Reaching 20 million barrels/day
> by 2020 would be easy. I might even get to 25 million barrels/day,
> especially if we make some reasonable assumptions about new discoveries off the coast of Brazil and Angola.*.

World Series of Crude Oil: Winner Decides Winter Gasoline Prices

"The economy and realization that demand of fuel had been going down was due to the price of gasoline spiking up to $4.50 and diesel at $5 per gallon. It exceeded what customers were willing to pay."

Well you will get use to $5, $6 and even $7, we have in Europe a long time ago. As there are no really good alternatives.

Too Big to Fail: Now It Gets Interesting

The banks will have break themselves up and it could even be good for their stock holders. If the bankers carry on as before, they would be showing an amazing contempt for the tax payer and democracy. What ever Alice in Wonderland world they inhabit, this is one mad hatter's tea party that's going to end.

When Vince Cable the Liberal Democrats Shadow Chancellor of the Exchequer first proposed this it reject out of hand by many City Bankers, but now I think it would very difficult for Conservatives to maintain creditability by opposing this now the Governor of the Bank of England has made this speech.

The Dogma of Low Interest Rates Is Wrong

Deflation is very dangerous it increase peoples and companies debts, that is what happened in the US in 1930's. Where as the UK came off the gold standard and did not experience the a deep depression like the US, for example UK car production only fell in 1 year of the 1930's.

You quote Milton Friedman, you don't appear to have never read his analysis of the depression, pointing out that US money supply shrank by 1/3 up to 1933. His solution was QE, rather that spending stimulus that Keynes argued for. Friedman is almost the father of QE, that is where the Fed got the idea from.

Keynes also argued that lowering interest rates to near zero would have increasingly little effect and he appears, looking at the Japanese experience to be right.


On Oct 07 12:49 PM Harry Long wrote:

> You start out with an illogical statement, which is the source of
> your troubles.
>
> Think clearly: deflation is not the enemy of the economy. Deflation
> benefits savers by making their savings more valuable. Deflation
> hurts those who borrow by making their borrowings more difficult
> to repay.
>
> Inflation hurts savers by making their savings less valuable. Inflation
> helps borrowers by making their borrowings cheaper to repay.
>
> As Milton Friedman recollected of du Pont's famous adage "we do not
> have to be gracious at all to inconsistent logic or absurd reasoning.
> Bad logicians have committed more involuntary crimes than bad men
> have done intentionally."

Brazil: Policy Changes Signaling New Era of Oil Production Underway

Re CaptKorn's "next oil". Well that is the problem, there is nothing as good as Oil when comes to transport, the nearest is NG. NG Peaked in the North Sea in 2000 and probably everywhere else except Russia and Iran in the next 20 years. Even T.Boone Pickens sees NG as transition fuel to something else. EV is limited in its application to relativity small vehicles with limited range. Hydrogen like EV is not primary energy source and is costly to produce and distribute.

If alternatives have not developed in Europe where petrol and diesel are nearly $7.00 a US gallon, it trends to suggest there are no cheap alternatives just around the corner.

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

He is right EV are not that practical in the short term, even the Prius is little better than the latest European diesels like VW Polo blue motion in economy. The US could just use more diesels, like in Europe where most large family cars are diesels now. Even in the UK where diesel is a $1.60+ a litre, the Prius only really makes sense if you live in a city and do a lot stop/start driving, they are great as Taxis in cities, but too expensive compared to Diesels otherwise. NG is a rather bulky for a small car, good for trucks, but the NG infrastructure is just not there at the moment.

I think America is trying to look for tech miracles, so they can continue to drive big cars & trucks, rather than take the low hanging fruit of smaller cars, diesels, more public transport or live, shop, work closer together. I have a friend in London that does not own a car and cycles to work, in some parts of the US that would define you as loser. Well may be Americans should try getting out of their cars more, my friend is a partner in a law firm and earned over a million dollars last year.