$this->bbcode_second_pass_quote('americandream', 'I')s that a systemic contraction (fundamental) or a political event (cyclical) though? We will never know with energy (as that is the basis of much of how we pontificate here) as that sector is a mystery reserves wise. We can trying looking at objective price but who is going to or is able and willing to?
So in the final analysis it is my speculation versus yours. That said, there is clearly energy capacity in the system with fracking and shale so I think it is reasonable to assume that we are in another cycle.
PeakOil is You
Has the Great Contraction Begun?
Re: Has the Great Contraction Begun?
by sjn » Mon 07 Mar 2016, 18:23:09
Assuming fracking and shale actually produce significant usable net-energy, rather than just Entropy in the form of atmospheric Methane plumes, Earthquakes and toxified aquifers.
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Re: Has the Great Contraction Begun?
by Outcast_Searcher » Mon 07 Mar 2016, 18:25:02
$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('dolanbaker', 'I') was responding to the cost reduction, rather than the volume drop.
Farmers are not going to produce more than they can sell, otherwise it goes to waste,
Farmers are not going to produce more than they can sell, otherwise it goes to waste,
So in those last two years (2014--2105) that agriculture production dropped, the planet added 160 million people. Yet demand/supply is down because fuel is cheap? Folks, do we see a problem yet? No. oh well.
But when it's ALL bad all the time, you lose credibility. If prices were up, that would be a sign of doom (as was commonly discussed a couple of years-ish ago on this site). The talk would be of widespread starvation since food is unaffordable, etc.
The simple point is is the cost of transportation is down due to cheap energy, that's good for the global economy. But I know - that's way too optimistic and obvious a point to let stand, so you need to find a way to preach doom.
Have at it. Just don't expect objective folks to be impressed.
Now, if we have widespread and lasting stories about meaningful shortages of food, then you may have a point. OTOH, we'd see food futures prices sharply rising in reaction.
I just looked at futures charts for corn, wheat, soybeans, cattle, and hogs. What I see is a consistent pattern of relatively depressed futures prices -- apparently the investment world does NOT see any sort of food supply crisis, at least in the short term.
But let me guess. The MSM makes all the futures numbers up if they disagree with your intuition, right?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Has the Great Contraction Begun?
by americandream » Mon 07 Mar 2016, 19:04:12
$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('americandream', 'I')s that a systemic contraction (fundamental) or a political event (cyclical) though? We will never know with energy (as that is the basis of much of how we pontificate here) as that sector is a mystery reserves wise. We can trying looking at objective price but who is going to or is able and willing to?
What kind of cyclical (or otherwise) political event do you have in mind that would explain a simultaneous contraction in food prices and production at the same time that human population growth and demand is increasing? $this->bbcode_second_pass_quote('americandream', 'S')o in the final analysis it is my speculation versus yours. That said, there is clearly energy capacity in the system with fracking and shale so I think it is reasonable to assume that we are in another cycle.
Energy capacity (otherwise known as reserves) have collapsed at $40/barrel. And shale production is down.
I am not going to argue with you. I only want facts. I can analyse the markets using numbers, numbers that are measurable and drive price. What do you have? Where are your numbers for reserves...I mean pure calculation, not somebodies best guess. Nobody knows what the Saudi reserves are and that is my point. With these stonge age clowns holding the keys to our global energy needs, all we can do at best is surmise. But we know that non conventional oil has spooked the Saudis and they want them gone. Why? As non conventionals render the Saudis surplus to needs and removeable. The Russians know this, are as much pawns in all of this as are we, and this skewed market sends out just the sort of signals the Saudis want to breed fear and dependence.
As for commodity collapse, especially in the food sector, just how hard is it to work out that removing big commodity importers such as Libya and Iraq (both of which are close to failed nation status) is going to have ripple effect.
In a nutshell, we have no real idea as to what is going on and Trump is correct. We need to take stock. But it is evident that the Saudis are skewing the global market with their mischief making if the fate of shale is anything to go by. Does that mean that shale is too costly and needs to be taken out. Who is to say as we have no idea what reserves are. Thus in the meantime, given that we are driving blind in traffic that shares the road with a bunch of stone age gangsters, insurance would seem sensible and timely, even if mothballed for the duration.
