[SoothSayer]

The current news indicates that several countries are selling off dollars and replacing them with Euros etc.

This is already impacting the dollar's value.

Would a dollar devaluation force the USA to import less oil?

If so, then perhaps that's what's going to happen: other countries will try to ensure their oil supplies for a little longer by trimming down Consumer #1 - the USA.

A sudden "lack of confidence" announcement by China could trigger the dollar devaluation the rest of the world might think it needs.

(China has so many dollars in its pocket that a devaluation might be worthwhile - as long as the US couldn't play in the oil markets any more)

This could all happen quite quickly - the confirmation of a major Euro oil bourse plus negative comments about the dollar from a few big players could create a "tipping point".

Is this a valid scenario - or does the world economy not work like that?

[PolestaR]

$this->bbcode_second_pass_quote('SoothSayer', 'T')he current news indicates that several countries are selling off dollars and replacing them with Euros etc.

This is already impacting the dollar's value.

Would a dollar devaluation force the USA to import less oil?

If so, then perhaps that's what's going to happen: other countries will try to ensure their oil supplies for a little longer by trimming down Consumer #1 - the USA.

A sudden "lack of confidence" announcement by China could trigger the dollar devaluation the rest of the world might think it needs.

(China has so many dollars in its pocket that a devaluation might be worthwhile - as long as the US couldn't play in the oil markets any more)

This could all happen quite quickly - the confirmation of a major Euro oil bourse plus negative comments about the dollar from a few big players could create a "tipping point".

Is this a valid scenario - or does the world economy not work like that?

[pea-jay]

Something intentional probably would trigger an unwelcome reaction on part of the US. On the other hand a scenario that sees a run on the dollar by private side investors (both US and foreign) probably would escape scrutiny. Personally I'd like to see a combination mild dollar run followed by a housing bubble collapse and general US recession which spreads globally. Preferably a series of events that would drive the oil demand well the oil supply. It's a better scenario than an oil panic triggered by the revelation that there is no more surplus oil is left and none will be forthcoming.

Right now I think there still is probably several million barrels per day of consumption that could be cut without serious detriment to a functioning economy/civilization.

[Shiraz]

this analysis is severely oversimplified.

USA is by far and away the largest buyer of Chinese exports, and the Chinese economy is scarily dependant upon export income.

Any imagined future where the USA, as you say, "shits itself", necessarily implies real serious concerns about Chinese growth and the stability of the global economy.

Trying to imagine what might happen if you switch off the two engines of world economic growth (USA, China) is a mugs game, but I'll be a mug, and say very bad recession, if not depression.

[seldom_seen]

$this->bbcode_second_pass_quote('SoothSayer', 'W')ould a US $ collapse delay PO for the rest of the world

[PolestaR]

$this->bbcode_second_pass_quote('Shiraz', 't')his analysis is severely oversimplified.

USA is by far and away the largest buyer of Chinese exports, and the Chinese economy is scarily dependant upon export income.

Any imagined future where the USA, as you say, "shits itself", necessarily implies real serious concerns about Chinese growth and the stability of the global economy.

Trying to imagine what might happen if you switch off the two engines of world economic growth (USA, China) is a mugs game, but I'll be a mug, and say very bad recession, if not depression.

[The_Virginian]

"If so, then perhaps that's what's going to happen: other countries will try to ensure their oil supplies for a little longer by trimming down Consumer #1 - the USA.

A sudden "lack of confidence" announcement by China could trigger the dollar devaluation the rest of the world might think it needs."

Nah,

It's the USA that's causing the devaluation by printing trillions every couple of monthes...not publishing M3, not balancing budgets, not caring about trade surpluses, and pushing up the cost of oil with the I-wacky war....and now persistant prattle on Persia, posibly pre-emptively.

[Shiraz]

$this->bbcode_second_pass_quote('', 'I') didn't say it is likely to happen like that, only that if the USA goes down into a recession but no one else does, then it will awake the snake. Obviously you can see this?

[bbadwolf]

I think you lads may be missing something significant here.

My initial thesis is this. The price of oil MUST remain high to stimulate the required investment to sustain oil output. The minute we have a recession, which will reduce demand, the price of oil will drop and many projects that looked profitable will have to be dropped. Wealth levels will drop all over the world and just when we find ourselves needing to expand again, the lower (and shrinking) energy profit coupled with the damage to our wealth levels (real wealth, not money) will prohibit the (again real) investment needed to restart those projects.

Thus, once the decline starts, it will feed itself. We grew this big as a result of easy oil and that's in serious decline. We won't do much growing on the much more difficult oil that remains. If we take the perspective that ultimately getting the most possible oil is the best route, then the best we can possibly do is maintain the plateau as long as possible by keeping those prices up as high as can be managed without our economies collapsing. Of course, the higher we climb, the farther we fall when it comes apart, so getting the most possible oil is quite likely not in our best interests in the long run.

Once the decline starts, it will be as if nature has declared war on us. Everything will seem to conspire to push us further down. Some regions will do better than others but nobody's going to get away without getting their ass seriously kicked.

Money is just a management tool, it has no "real" value. So little in fact that the vast majority of it does not truly exist except as numbers in the bank computers. "Real" wealth is stuff, resources or things made from them. The biggest failure of economics is to equate money to wealth. When the recession begins, we will see the printing of money while material wealth (standard of living) declines. No amount of money replaces "real" investment.

Thus, if we truly are at the plateau, the next serious recession will mark the end of cumulative growth and the beginning of what is likely to be a bumpy decline.

On the other hand, if you folk to the south of me do something REALLY stupid like invade another Middle Eastern country, I suspect that will kill off any chance of a reasonable decline in favor of a rather more abrupt collapse. Without finding a way to deliver a better profit ratio on energy invested, growth will become "quaint".

Hydrogen fusion??? It could happen! But the odds are as bad as the lottery. Still, it's the only thing I'm aware of that stands a chance of improving the energy profit ratio enough to prevent "civilization's" return to a much earlier age.

(sorry for such a long post)
bbad

[neocone]

http://www.cluborlov.com/ClubOrlov/Conf ... index.html

Send to me by someone advocating for the secession of California.

One thing will be sure... when that happens I will stay clear of San Diego where the fighting for the federal military bases will rage on. It will be Yugoslavia on a larger scale!!!

[rdberg1957]

The clunky Soviet economy based on state owned enterprises is inefficient and is less volatile than our capitalist system. Capitalism is great when the resources are plenty and production is overheating. The reason FDR pushed the New Deal was to mitigate against the downturns inevitable in capitalism. Republicans then and now have screamed bloody murder about having any kind of safety net. The greatest beneficiaries of capitalism defend it most strongly to their own detriment.

The cities that have public transit and are investing heavily are most positioned to survive save resource concerns. Salt Lake City residents have voted to increase taxes to dramatically add to their light rail system. However, I would guess Salt Lake may run into other problems when the US collapses.

Orlov's general proposition that all empires collapse eventually is uncontestable. Whether the collapse is brutal or gradual depends on many factors which may accompany decreased resources. Rome had problems with the black plague which snuffed out its resurgence in the 6th century. His case for the US being more vulnerable than the Soviet empire is quite strong, particularly as we are all vulnerable to losing our homes.

[gg3]

Re. Rdberg1957 "His case for the US being more vulnerable than the Soviet empire is quite strong, particularly as we are all vulnerable to losing our homes."

Right on target.

When people can stay put, they often find a way to get by. When they're being evicted and foreclosed and generally shuffled like passive cards in a deck, forget about gardens, about cooperation among neighbors, about relocalized business activity: it all goes down the toilet.

In the 1930s depression, one of the gross ironies was the existence of streets full of boarded-up houses (foreclosures and evictions) right next to large masses of people living in the streets. In Oakland CA, a sizeable number lived in large concrete sewer pipes that were stacked at a dock.

Now to those conditions (no washing or showers or sanitation), add a new strain of flu or something similar. Might even turn out to be a solution to overpopulation. Hmm, look on the bright side, eh?

[JustinFrankl]

$this->bbcode_second_pass_quote('', 'S')o if somebody comes to you and says "I want to make a boondoggle that runs on hydrogen" – by all means encourage him! It's not as good as a boondoggle that burns money directly, but it's a step in the right direction.

[virgincrude]

Orlov has/had (haven't checked if you can still get it free) a three part article on www.Fromthewilderness last year which is called Post-Soviet Lessons for a Post American Century. Covers all this and should be compulsory reading for all Peak oil aware US citizens

[gg3]

I've read a bunch of Orlov's stuff, I'll second or third the recommendation. Smart guy, lots of good insights.

Hmm. The literary criticism of doomsday. "Orlov is an insightful writer with a solid grasp of literal exposition and a delightful use of anecdote and metaphor..." right. Feels like critiquing a artistic photography exhibit full of X-rays of people with inoperable tumors.

[NeoPeasant]

$this->bbcode_second_pass_quote('rdberg1957', ' ')The cities that have public transit and are investing heavily are most positioned to survive save resource concerns. Salt Lake City residents have voted to increase taxes to dramatically add to their light rail system. However, I would guess Salt Lake may run into other problems when the US collapses.

[Fredrik]

$this->bbcode_second_pass_quote('gg3', 'W')hen people can stay put, they often find a way to get by. When they're being evicted and foreclosed and generally shuffled like passive cards in a deck, forget about gardens, about cooperation among neighbors, about relocalized business activity: it all goes down the toilet.

[grabby]

I agree, slavery is in the near future, with your hours and work schedule set by the government.

Get out of debt NOW!
Those with large mortgages, sell now!

When your house value drops below your purchase price , then they have you as a secondary slave already.
This is happening top thousands even as we speak.

I wonder WHY they JUST changed the bankruptcy laws?
Ever wonder that?

Indentured servitude.

An option would be a trade on mortgagesfor one you can pay off. Anyone in a mortgage now is in trouble.

[Doly]

$this->bbcode_second_pass_quote('grabby', 'I') agree, slavery is in the near future, with your hours and work schedule set by the government.