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Are we on the edge of the abyss? (merged)

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Are we on the edge of the abyss? (merged)

Unread postby stu » Thu 13 Oct 2005, 09:44:19

If you follow the writings of regular PO commentators then you might have noticed that a couple of them have recently starting predicting that the beginning of the end has begun or is about to start.

If you go to From The Wilderness you'll see that Michael Ruppert has written a highly personal piece in order to appeal for funds.

From the Wilderness
$this->bbcode_second_pass_quote('', ' ')I will be as brief and business-like as possible. Time is a precious commodity for all of us. There are two emergency priorities facing me.

FIRST, I must relocate FTW out of Los Angeles to a semi-rural, sustainable area as quickly as possible – by next January at the latest. Once relocated, FTW can take advantage of a number of options to expand our services to our readers at a critical moment. Those options are not available to us in our present location. Many of you know the general area where I want to move us but I cannot disclose it here for a number of reasons. It’s in the Pacific Northwest. We know where we want to go and friends are waiting for us there.

SECOND We need enough cash to duplicate my new video Denial Stops Here and release it as quickly as possible. It must be released by October 18th so time is short. If you have liked what we’ve done for eight years, and if you liked Truth and Lies, then it is imperative that you help us reach an even wider audience so that more people can begin to prepare for the collapse which is just now beginning. This DVD is many times better than The Truth and Lies of 9/11 and capable of reaching and influencing a much wider audience. People are listening.

It is definitely a DVD the Bush Administration and Wall Street do not want released.

I am not asking for loans. For reasons described below, you will see why we are having such a challenging time. I am taking my own advice and refusing to go further in debt because that, in itself, might prove to be a deadly anchor. Given what we have been facing I cannot guarantee that we would be able to repay any loans anyway. But at this point in human history, guarantees of any sort are hard to come by.

$this->bbcode_second_pass_quote('', 'W')e’re running on fumes at FTW and we have been forced to reach out for help again

$this->bbcode_second_pass_quote('', 'I')t’s not just me that has to move. We have four staff members with families and we need to secure office space in our selected community before leaving here.
If you read FTW regularly, and if you have read Crossing the Rubicon you understand how critical it is that we get out of Los Angeles now. You know that – before this descending curtain of repression and collapse sinks any lower – we must release our new DVD. There is no more time.

James Howard Kunstler is also speaking in the same kind of language on his blog.
$this->bbcode_second_pass_quote('', 'S')ome band-aids have been applied to our oil and natural gas supply injuries and the bleeding seems to have stopped. But the truth is that our energy supplies are badly compromised and at the worst time of the year -- just as we slide into the home heating season. Here in the northeast, we have barely had to turn on the furnaces yet, but that will change in a week or two.
In the background of this scene, the global oil production peak lurks -- meaning that there does not seem to be any surplus production capacity anywhere in the world, including OPEC's big gun, Saudi Arabia. So all we have here in America is a temporary appearance of normality. When the furnaces go on, the WalMart aisles will be empty. If there is any reduction in car trips, it will be because Americans are making fewer visits to the Big Box stores. There will also be fewer trips out to visit the model homes in the new subdivisions.

$this->bbcode_second_pass_quote('', 'O')il prices may hang back in the low 60s for a little while -- a combination of less driving, relief over the refinery situation in Houston, and some financial monkeyshines like shorting in the markets (perhaps by government-connected entities seeking to soften up futures prices). But the basic fact is that global oil supply and global demand are now so close that any loss of crude inputs anywhere is going to result in both spot shortages and higher prices. Right now, the supply crunch is being borne by third world countries. The catch there is that some of these third world countries are also oil-producing countries, like Indonesia and Nigeria, and the latter is in the process of falling into social anarchy, which will further impact the global supply. In any case, I don't expect oil prices in America to lay low for long. By Christmas, gasoline pump prices will have joined home heating prices in a vicious pincer around the neck of the non-rich classes.
$this->bbcode_second_pass_quote('', 'T')ake a good look at America around you now, because when we emerge from the winter of 2005 - 6, we're going to be another country. The reality-oblivious nation of mall hounds, bargain shoppers, happy motorists, Nascar fans, Red State war hawks, and born-again Krispy Kremers is headed into a werewolf-like transformation that will reveal to all the tragic monster we have become.
$this->bbcode_second_pass_quote('', 'T')hese serious problems on-the-ground are going to affect the more ephemeral elements floating around in the financial ether: the value of the dollar, the hazard in hedge funds, the credibility of institutions. By October, the hurricane season will be ending and the stock market crash season will be underway. It is hard to imagine that companies like WalMart really believe they will keep their profits up when their customers are paying twice as much as they did a year ago to heat their houses and fill their gas tanks.

It looks like Kunstler and Ruppert have decided to lay it all on the line and predict an economic collapse this winter. If the summer of 2006 comes along with no major signs of a collapse then how much credibility do people think they will have?

These are interesting times for doomers.
"The age of excess is over. The age of entropy has begun"
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Re: Are we on the edge of the abyss?

Unread postby Aaron » Thu 13 Oct 2005, 10:02:03

$this->bbcode_second_pass_quote('', 'A')s world population has doubled and as the global economy has expanded sevenfold over the last half-century, our claims on the earth have become excessive. We are asking more of the earth than it can give on an ongoing basis, creating a bubble economy.


$this->bbcode_second_pass_quote('', 'T')he world is moving into uncharted territory as human demands override the sustainable yield of natural systems. The risk is that people will lose confidence in the capacity of their governments to cope with such problems, leading to social breakdown. The shift to anarchy is already evident in countries such as Somalia, Afghanistan, and the Democratic Republic of the Congo.


$this->bbcode_second_pass_quote('', 'I')n sum, no one knows exactly the extent of our excessive claims on the earth in this bubble economy. The most sophisticated effort to calculate this, the one by Mathis Wackernagel and his team, estimates that in 1999 our claims on the earth exceeded its regenerative capacity by 20 percent. If this overdraft is rising 1 percent a year, as seems likely, then by 2003 it was 24 percent. As we consume the earth's natural capital, the earth's capacity to sustain us is decreasing. We are a species out of control, setting in motion processes we do not understand with consequences that we cannot foresee.


Brown
The problem is, of course, that not only is economics bankrupt, but it has always been nothing more than politics in disguise... economics is a form of brain damage.

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Re: Are we on the edge of the abyss?

Unread postby duke3522 » Thu 13 Oct 2005, 10:03:05

Are we about to fall off a cliff? Probably not. Are we on the edge of a long downward slide for our standard of living? Hell yes!!! The standard of living for most in the west is about to enter a period of rapid decline.

This Christmas season will be very telling. A big drop in retail will signal the beginnings of a great recession akin to the early 1980’s.
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Re: Are we on the edge of the abyss?

Unread postby khebab » Thu 13 Oct 2005, 10:09:21

I don't think that our situation is that bad (yet). A lot of projects are coming online this year and next year with at least 2-2.5 mbpd of new supply. The refinery capacity has been reduced by Katrina and Rita but it's temporary and should be back in the coming weeks. A lot of people have been predicting oil at $70 and beyond because of the hurricanes but prices are now stable around $65. Ruppert has already warned us of an imminent economic collapse last year and nothing happened. My guess is that we will pass this winter just fine.
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Re: Are we on the edge of the abyss?

Unread postby stu » Thu 13 Oct 2005, 10:27:34

$this->bbcode_second_pass_quote('khebab', 'I') don't think that our situation is that bad (yet). A lot of projects are coming online this year and next year with at least 2-2.5 mbpd of new supply. The refinery capacity has been reduced by Katrina and Rita but it's temporary and should be back in the coming weeks. A lot of people have been predicting oil at $70 and beyond because of the hurricanes but prices are now stable around $65. Ruppert has already warned us of an imminent economic collapse last year and nothing happened. My guess is that we will pass this winter just fine.


From what I've read it appears that if the US consumer stops spending then the US economy goes into recession. This is more likely if we have a cold winter and considering that bills look set to rise this winter that is a possibility.

What I still have yet to work out is how a slowdown in consumer spending will crash the economy. As far as I can see see the only way that the economy will collapse is if there is a huge sell-off of the dollar. Can somebody explain to me how that is linked to US consumer spending?
"The age of excess is over. The age of entropy has begun"
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Re: Are we on the edge of the abyss?

Unread postby Grimnir » Thu 13 Oct 2005, 12:07:46

If nothing happens this winter, I will still respect their opinions but no longer pay attention to their predictions.

On the other hand, I got pretty annoyed with Ruppert last year after he kept predicting that the Plame scandal was going to blow up on Bush before the election and it not only failed to blow up, but basically failed to do anything at all. But just look what's happened now... Sometimes people just have trouble getting the timing right. Things usually take longer to unfold than one would expect, and then everything happens at once.
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Re: Are we on the edge of the abyss?

Unread postby Pops » Thu 13 Oct 2005, 13:29:32

It seems funny how someone predicting the end is still living in LA.

Of course if you read the rest of the article (or whatever it should be called) he’s shouting fire but it sounds to me like his house is the one smoking.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: Are we on the edge of the abyss?

Unread postby PhilBiker » Thu 13 Oct 2005, 13:30:38

I don't like these two guys being lumped together. Ruppert is a nutjob who exploits and profits from the impending energy problems and Kunstler is an intelligent social critic and new urbanist who wants us to find a better way. Read Kunstler's paragraph from his October 5 speech at PetroCollapse New York Conference:$this->bbcode_second_pass_quote('', 'T')he last thing that this group needs is to get sidetracked in paranoid conspiracy politics, such as the idea that Dick Cheney orchestrated the World Trade Center attacks, which I regard as just another form of make-believe.
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Re: Are we on the edge of the abyss?

Unread postby pilferage » Thu 13 Oct 2005, 13:58:52

$this->bbcode_second_pass_quote('', 'I') don't like these two guys being lumped together.
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Re: Are we on the edge of the abyss?

Unread postby seahorse2 » Thu 13 Oct 2005, 14:23:04

Kehab,

There may be more oil on the way, but I'm not sure how much good it will do, bc the world has a refinery shortage problem unrelated to the hurricanes. I started two threads on this in the peak oil discussion forum, one is called "peak refinery = peak oil" and the other is "refinery shortage - ICF".

However, we can all appreciate that an economic downturn can be caused by things unrelated to oil. So, even if we have plenty of oil, the U.S. and the world could experience an economic downturn (80s stock market crash, 2001 recession both recent examples).

Stu asks a good question about the relationship between consumer spending and a dollar crash. I'm not an economist, but would venture to guess that consumer spending is the "gauge" by which most people judge the present and future of U.S. economic strength. If the consumer quits, it would be a signal that all else will sink, an economic/political domino effect, and maybe as much psychological as anything else. If the U.S. consumer quits buying foriegn goods, in particular Chinese goods, the Chinese tank as well.

If there were a serious recession or depression, then I'm not sure why foriegn central banks would by U.S. treasuries. Its my understanding that foriegn central banks, namely china and japan, buy vast amounts of U.S. treasuries to support the U.S. consumer benge, basically, massive bond buying means massive credit available in the U.S. which keeps interest rates low and lots of credit floating on the market. So, if the U.S. consumer is unable to keep the buying binge going, foriegn central banks have no reason to buy U.S. treasuries, thus, the dollar tanks. The end result of all this would be deflation, hyperinflation, stagflation, no one knows, but its hotly debated.

I may be wrong, but that's my very basic understanding of the consumer link to the dollar.
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Re: Are we on the edge of the abyss?

Unread postby rogerhb » Thu 13 Oct 2005, 16:19:49

$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?


Yes, it's abysmal.
"Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken
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Re: Are we on the edge of the abyss?

Unread postby stu » Fri 14 Oct 2005, 08:54:26

In the time that I 've learnred about PO there are only two possibilities of an economic collpase that I can think of.

The first is the long drawn out collapse. Prices rise, consumers cut back on spending, first the leisure indusstry goes under followed by small retail companies. Then as unemployment rises people miss their mortgage payments and loan repayments which then helps to collapse the banking system.

The other is the fast process whereby the dollar collapses and we enter a second great depression.

Considering I hardly study economics that goes to show you what I know. :roll:
"The age of excess is over. The age of entropy has begun"
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Re: Are we on the edge of the abyss?

Unread postby Grimnir » Fri 14 Oct 2005, 15:33:00

I don't think the two are being lumped together; rather, what I at least am saying is--hey look, these two guys with totally different approaches and totally different ideas about how the world works have both concluded that energy issues are going to bring society down, and have both converged on winter 05/06 as the time when it will begin.
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Re: Are we on the edge of the abyss?

Unread postby PenultimateManStanding » Fri 14 Oct 2005, 16:06:55

$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?


Yes, it's abysmal.
8O A cataclysmic cataclysm. Horrendous Horrors. Disastrous disasters. Calamatous Calamities. A messed up mess. Catastrophic Catastrophies.
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Re: Are we on the edge of the abyss?

Unread postby RonMN » Fri 14 Oct 2005, 16:49:48

I have a slightly tougher time with the idea of a slow crash. As people watch the stock market descend...they just wont stay put forever (like a bank run, it becomes a self fulfilling prophecy) They will start selling stocks until it's a panic sell-off.

Or...once we hit a moderate to heavy recession...it will be difficult to continue to service the national debt...if they raise taxes they will hurt the economy (and thus their tax base) even more...only 2 options after that are either default, or print the dollars (which will cause hyperinflation).

IMHO it all comes down to how fast people wake up to where we're headed. It's hard for me to imagine that people will just sit & watch their stocks (401Ks) take a 10% hit year after year without end (and that's what it would take for a slow crash senario to occur).

Keep in mind i am no financial expert, this is only my opinions.
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Re: Are we on the edge of the abyss?

Unread postby rogerhb » Fri 14 Oct 2005, 17:50:18

$this->bbcode_second_pass_quote('PenultimateManStanding', '')$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?


Yes, it's abysmal.
8O A cataclysmic cataclysm. Horrendous Horrors. Disastrous disasters. Calamatous Calamities. A messed up mess. Catastrophic Catastrophies.


Hopeless hopelessness. Terrible terrors....

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"Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken
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Re: Are we on the edge of the abyss?

Unread postby PenultimateManStanding » Fri 14 Oct 2005, 18:47:12

$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('PenultimateManStanding', '')$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?


Yes, it's abysmal.
8O A cataclysmic cataclysm. Horrendous Horrors. Disastrous disasters. Calamatous Calamities. A messed up mess. Catastrophic Catastrophies.


Hopeless hopelessness. Terrible terrors....

Fubar


Dire Doom, Fateful Fate
Cannibal Hoards that Pound the Gate

Deadly Death, Fearsome Fear
Woeful Woe and Tearsome Tears

The Finish Comes as We Await
The End of this Our Stately State.
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Re: Are we on the edge of the abyss?

Unread postby bruin » Fri 14 Oct 2005, 19:08:09

I just read FTW. He's not moving out of town because he thinks the PO roving gangs of violence is coming. He's moving because he is broke.

Some office manager stole from him as well as others. Sounds like a real mess over there. He's even thinking of selling his car to make payments. In LA, that's a big deal.
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Re: Are we on the edge of the abyss?

Unread postby BabyPeanut » Fri 14 Oct 2005, 20:06:55

$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?

Who means "we"?

There is a growing list of countries that are either on the edge or over it. Zimbabwe, Yemen, Indonesia, Iraq, Nicaragua stand out but there's fuel protests all around the world now.
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Re: Are we on the edge of the abyss?

Unread postby stu » Sun 16 Oct 2005, 22:04:59

$this->bbcode_second_pass_quote('BabyPeanut', '')$this->bbcode_second_pass_quote('', 'A')re we on the edge of the abyss?

Who means "we"?

There is a growing list of countries that are either on the edge or over it. Zimbabwe, Yemen, Indonesia, Iraq, Nicaragua stand out but there's fuel protests all around the world now.


"We" as in humanity in general.

If Kunstler and Ruppert are going to predict a collapse this winter then the consequences will bring down the US economy which I guess helps to bring the global trade market to it's knees.

I've never read business news on the scale that I read it now. The only way seems to be down.

Kunstlers comments about the US consumer being strangled by high energy prices will come true I believe, but will the impact be enough to bring down the economy?
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