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Restructuring the Global Economy

Discussions about the economic and financial ramifications of PEAK OIL

Re: Restructuring the Global Economy

Unread postby shakespear1 » Thu 24 Jan 2008, 08:35:24

Hihiii :-)

What happened to the 24 hr. function?

Now I have to look down lists to find the latest posts. :-(
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Re: Restructuring the Global Economy

Unread postby MrBill » Thu 24 Jan 2008, 09:10:40

$this->bbcode_second_pass_quote('shakespear1', 'H')ihiii :-)

What happened to the 24 hr. function?

Now I have to look down lists to find the latest posts. :-(


Dunno? I do not usually use it. I am kinda exiled here to Depletion Economics, so I rarely venture out much. Maybe I should not be so timid? ; - )

So anyway today's Headline of Day has to be on Reuters at the moment.

IEA says US very concerned about oil price.

IEA says big consumers concerned by oil price.


But apparently not concerned enough to change their consumption habits, raise fuel standards or keep the US dollar stable? ; - )
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Re: Restructuring the Global Economy

Unread postby shakespear1 » Thu 24 Jan 2008, 10:52:35

Last night I watched a documetry on the island of Nauru. I've read about this but the visual brought home the message better.

Lots ofdiscarded consumer goods rusting on one end of the island (costly at the time they were bought on the island), no worry about tomorrow attitude, some corruption and friendly foreign experts who advised how to invest their money.

Then came the end to cheap guano which stopped the flow of fabulous money to the islanders.

Next came borrowing to stay on the same plane of consumerism. But when the loans could no longer be paid off by what the island had invest all over the world the Magic Story ended.

Now they have power shortages, high food costs and no land which previously could be used to produce their own. :-)
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Re: Restructuring the Global Economy

Unread postby MrBill » Thu 24 Jan 2008, 12:31:38

Each and every economic decision has a real consequence. That is why it is sad that the Left pretends economics do not matter. The Right selectively uses pseudo-economic arguments to justify their political expediency. And the voter just wants something for nothing. The bankers just arbitrage between economic reality and political fantasy.

Climate change and resource depletion - specifically post peak oil decline - would not be nearly as scary to contemplate if we would have followed sound economic policies, fiscal conservatism and sustainable development practices. But we did not and here we are!

The blame game is just heating up. Everyone is going to blame the market economy, but the real causes were living beyond our means in every sense - environmentally and economically - poor leadership and an entitlement society! ; - )
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Re: Restructuring the Global Economy

Unread postby dohboi » Tue 19 Feb 2008, 15:22:47

Nicely put, but don't you think elements of the market economy are part of what encouraged (and still encourage) us to live beyond our means? Do you think the millions of ads that we all see over a lifetime have had no effect on our consumption patterns?

I'm not letting anyone off the hook. Certainly not individuals or the gov. But I'm also not willing to let "the market," corporations, and financial institutions off the hook either. There's plenty of blame to go around, and all can take their healthy share.
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Re: Restructuring the Global Economy

Unread postby MrBill » Wed 20 Feb 2008, 04:57:13

$this->bbcode_second_pass_quote('dohboi', 'N')icely put, but don't you think elements of the market economy are part of what encouraged (and still encourage) us to live beyond our means? Do you think the millions of ads that we all see over a lifetime have had no effect on our consumption patterns?

I'm not letting anyone off the hook. Certainly not individuals or the gov. But I'm also not willing to let "the market," corporations, and financial institutions off the hook either. There's plenty of blame to go around, and all can take their healthy share.


Yes, each and every corporation wants you to buy their product and not someone else's. So the most important words you will ever learn is how to say, 'no, thank you'.

When I see the rich and the beautiful 'wanna bes' and their conspicuous consumption I do not envy their wealth, but I pity them. Not for what they can buy, but for what they buy, and the fact that they need that stuff to feel good about themselves or to think they are better than others. It is really pathetic.
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Re: Restructuring the Global Economy

Unread postby dohboi » Sun 02 Mar 2008, 16:44:36

Of course, dear MrBill (not dante), individuals have responsibilities to say no. But keep in mind that more is spent every year in the US on advertisement than on all of higher education. In other words, the US economy places a higher value on getting people to buy than on getting people to think.

As to one of your earlier posts:$this->bbcode_second_pass_quote('', '
')
"I am not trying to be rude, but of course this is over simplification in the first place. Locally made goods compete with imports including the costs of transport.

Raise the cost of transport fuels and you will shift SOME production locally where feasible. Cut the supply of transport fuels and you will shift more. But long distance transport will also shift from truck to rail and water transport as well.

Just in time delivery will be replaced by central distribution at railhead or lake head. This drives up inventory costs, but lowers transport fuel consumption.

However, in terms of local production, today, in the face of higher prices, but no shortages of transport fuel, and you literally have more energy being consumed to drive to the local grocery store than food being shipped in tightly packed containers to your local grocery store.

And it may cost more energy to heat your potatoes using an electric stove versus heating the water in an electric kettle first than all the energy needed to produce the food in the first place.

Yes, we can save energy, but not by growing bananas in N. Canada or by raising sheep in the desert just because they are closer to market.

Goods should be manufactured efficiently where they are cheapest including the cost of transport. Availability of transport fuel will dictate where that is. Not governments."


In spit of snark's praise, this is not one of your better posts (and most of your posts are, IMHO, tops).

Growing bananas in N. Canada??? Is anyone anywhere advocating this?? If so, please cite. This is way beyond straw man--maybe straw whale?

And how about walking or biking to your local food store. Is that still going to expend more energy than the 1500 or so mile trip the average food items travels between farm and food shelf in the US?

The idea of relocalization is not that we can reconstruct our exact life style and get everything we now import locally. No one (besides those trying to deride the concept) has claimed such a thing that I know of. Even though no political leaders seem to have the guts to say it, any hope of a livable future is going to involve some adjustments in how we live. In many ways these could be enhancements--walking to a farmers market to do your shopping involves many more chances for interactions with others, interactions that can counter the chronic isolation and alienation pervasive in the US. See Bill McKibben's recent works for more details.

Relocalization obviously involves a change in what we consume and how often and when we consume it. The idea that we can get anything in the world whenever we want it was never a good one. Yes, distribution systems are going to change, and total relocalization is doubtless both undesirable and unlikely to occur. The idea is to move toward getting more of what we need locally, and reconsidering what we merely want that cannot be gotten locally.

This obviously gets into larger issues than can be developed here, and I don't hold you responsible for knowing all the nuances of the latest thinking in the relocalization movement.

But please don't assume that all urging for more localized economies are complete and utter idiots who want to grow bananas in N. Canada and drive Hummers to Whole Foods to buy them. As you point out, rising energy prices are going to lead to some more localization anyway. It's time to think about that transition more systematically, and it is way past time to re-think our I-can-have-any-thing-I-want-from-anywhere-anytime economy.
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Re: Restructuring the Global Economy

Unread postby MrBill » Mon 03 Mar 2008, 10:01:30

I had to edit your above post as it was credited wrongly to dante. Thanks.
dohboi wrote:
$this->bbcode_second_pass_quote('', 'G')rowing bananas in N. Canada??? Is anyone anywhere advocating this?? If so, please cite. This is way beyond straw man--maybe straw whale?


Well, inappropriate production decisions based on a mispricing and misallocation of resources happens all the time. Rice grown in the US southwest and exported to Asia for example. The Economist uses the example of raising sheep in NZ, and then shipping the lamb in tightly packed containers versus trying to raise sheep in a northern clime closer to market, but with an unsuitable climate.

This particular example was from a TV documentary I recently saw called Bananas in the Arctic. It was not about growing bananas in the Arctic, naturally, but about getting them there.

Edmonton, Alberta, to the farthest communities in N. Canada where people do actually live. They need fresh fruit in winter, too. It was a documentary about supply chain management, but also about the economics of shipping fresh food long distances.

You may ride to the local grocery store on your bike if you want. I happen to walk. Luckily, I have have two supermarkets, two bakeries, a butcher and five grocery stores within a 5-minute radius of my apartment. However, others DO drive. And the point being that if they drive to the supermarket on average of twice per week as extra trips in their car then likely they have used more petroleum per ounce of food than those tightly packed containers that make their way from banana plantations across the ocean, unto a railcar for the trip to Edmonton and then another three day truck ride up to those northern communities.

Which by the way are looking for oil & gas and the mines & minerals that enable your soccer mom to get to the supermarket in the first place. The cost those communities pay for fresh fruit in winter includes all those transportation costs. Growing locally outside of artificially heated greenhouses is not an option. Rail is not an option either. Not enough people.

But as far as strawman and straw whale arguments go this is a pretty good one:
$this->bbcode_second_pass_quote('', ' ') But please don't assume that all urging for more localized economies are complete and utter idiots who want to grow bananas in N. Canada and drive Hummers to Whole Foods to buy them. As you point out, rising energy prices are going to lead to some more localization anyway. It's time to think about that transition more systematically, and it is way past time to re-think our I-can-have-any-thing-I-want-from-anywhere-anytime economy.


As you say, I see a role for localization where it makes economical sense, and I rarely call anyone an utter idiot to their face. I think so far as my motto goes I am the first to advocate that we-cannot-have-any-thing-we-want-from-anywhere-anytime economy! All costs have to be accounted for - accurately and honestly! ; - )
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Re: Restructuring the Global Economy

Unread postby dohboi » Mon 03 Mar 2008, 19:12:53

Sorry about the error, Mr Bill. :oops:

I guess we're ultimately in agreement, though I am not sure it is going to be very easy to account for all costs honestly and accurately in most situations.
Last edited by dohboi on Tue 04 Mar 2008, 17:31:37, edited 1 time in total.
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Re: Restructuring the Global Economy

Unread postby MrBill » Tue 04 Mar 2008, 06:56:58

Yes, this whole debate about post peak oil resource depletion hinges on getting people to listen to us; make lifestyle changes; prepare for a powerdown; and all before its too late. But in order to convince them that 'this time it is different' we have to be careful to use good, convincing arguments, backed up by hard data, and not fall into the trap of fear mongering. That's not easy. People do not want to be told that the only life they know must end sooner rather than later! ; - )
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Re: Restructuring the Global Economy

Unread postby dohboi » Tue 04 Mar 2008, 17:20:11

Nicely put. I do want to further discuss your statement above:

"Edmonton, Alberta, to the farthest communities in N. Canada where people do actually live. They need fresh fruit in winter, too."

Need? Obviously moderns living in these regions have come to expect that our fossil fuel driven economy will deliver them fresh bananas from the Guatemala or the Congo or wherever to have in their cereal every morning, in their lunch boxes every noon, and in their chocolate sundaes every evening. Isn't this the very definition of an "I-can-have-any-thing-I-want-from-anywhere-anytime economy"?

Is this expectation a need? A right? Didn't folks live up in those parts before fresh fruit was available to them year round? What if they just had fresh fruit on special occasions? Didn't people used to give oranges for Christmas because it was strange and unusual to get fresh fruit in the middle of winter?

I just think that what not long ago was viewed as a great luxury or and impossibility has now, because of the magic of fossil fuel powered transport, come to be seen as a "need." We have very quickly completely lost touch with what every other age has recognized as reasonable expectations. We are so far inside these (by any historical measure) bizarre and extreme set of expectations, that it can be difficult to remember just what I weird world ff has wrought.

Of course, politicians and hucksters (for example most economists) will say either that there is no problem or that we can create a system just like the one we have now but using other sources of energy. I am skeptical of such claims, to say the least, and I had the impression that you were too (even if you aren't a confirmed doomer).
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Re: Restructuring the Global Economy

Unread postby LoneSnark » Tue 04 Mar 2008, 20:08:32

It would not be the same as the current system, but it is not inconceivable for high speed rail (50mpg) to get some fruits to such regions. Their selection will fall markedly, but bananas were making their way to Europe back in the days of sailing ships. Many other fruits and vegetables can handle similar prolonged shipping times thanks to modern genetic manipulation, especially with the aid of refrigeration.
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Re: Restructuring the Global Economy

Unread postby MrBill » Wed 05 Mar 2008, 04:33:18

Yes, they NEED fresh fruit. It is a need not a RIGHT. They are willing and able to pay for it. Period. I am saying that the fruit is shipped in the most cost and energy effective manner. It uses less energy than your average dickhead living in suburbia that commutes up to 70 miles to work AND then drives to the grocery store twice per week to buy bananas.

Are you suggesting that workers living in Northern Canada, and enduring 6-months of winter to explore for natural gas and oil as well as mine minerals, some how have less of a right to fresh produce in winter?

It is one semi-tractor trailer that is tightly packed and makes the round trip once per week. In the ocean that is our energy waste that is a tiny drop. And that is the problem that I have with localization crowd. They rationalize their own energy use while preaching to others without even bothering to get their facts straight in the first place.

Your computer uses more energy per year than their fresh fruit! ; - )
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Re: Restructuring the Global Economy

Unread postby mos6507 » Wed 05 Mar 2008, 06:51:22

$this->bbcode_second_pass_quote('MrBill', 'Y')es, this whole debate about post peak oil resource depletion hinges on getting people to listen to us


The thing is, I vacillate between wanting to spread the word and not wanting to place myself in a position of ridicule. Frankly, it takes too much energy to sit someone down and give them the speech, and nobody seems to have enough of an attention span to hear it all. They just want to make a knee-jerk dismissal.
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Re: Restructuring the Global Economy

Unread postby MrBill » Wed 05 Mar 2008, 09:19:01

$this->bbcode_second_pass_quote('mos6507', '')$this->bbcode_second_pass_quote('MrBill', 'Y')es, this whole debate about post peak oil resource depletion hinges on getting people to listen to us


The thing is, I vacillate between wanting to spread the word and not wanting to place myself in a position of ridicule. Frankly, it takes too much energy to sit someone down and give them the speech, and nobody seems to have enough of an attention span to hear it all. They just want to make a knee-jerk dismissal.


Yes, it is a little like being a JW and getting the door slammed in your face everytime you try to convert a new soul! ; - )

Ultimately though it will be higher prices - for everything - that will get everyman's attention. Then they will be asking, why?

The proper public policy solution to mitigating the effects of peak oil decline will, however, depend on addressing the correct underlying problem and not its symptoms.

Windfall taxes on resource companies, for example, and paying consumers subsidies, another, are just some examples of getting public policy wrong, while addressing the symptoms - high prices and affordability issues - rather than focussing on reducing energy consumption; encouraging the switching to alteratives where available and economical; and abandoning that infrastructure that will no longer function in the face of energy shortages.
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Re: Restructuring the Global Economy

Unread postby dohboi » Wed 05 Mar 2008, 14:12:22

Fresh fruit is neither a need nor a right.

That being said, I was not suggesting that all such shipments would completely stop. I said they would become more of a luxury item during seasons when they weren't locally available, as they had been before ff powered transit went into hyper drive in the second half of the last century.

And I am not depriving anyone of anything I won't go without myself. I live in Minnesota--not as far north as Canada, but a long way from fresh fruits in the winter. You can get a lot of great canned and dried vegetables through the winter, and we do buy bananas some in the winter, but we are cutting back.

Obviously if you just talk about fresh fruits, sure, not a lot of energy in the big scheme of things. But shouldn't we be looking at every place we can reasonably scale back from the wildly luxurious living we've grown accustomed to during the oil age? Where do you most see the need to cut back?

Granted, as this discussion shows, exactly what is and what is not reasonable (and when and for whom) is going to be a much contested issues. Somehow we got off on a fruit tangent, and maybe you can convince me that's not a place we should cut back on.

But do you really think we can make a transition as dramatic as that from the oil age to the post peak age without a ripple in our daily lives? What changes do you think will or should come to our lifestyles?

(We get our electricity from wind, by the way, but of course you are right that the net sucks up huge amounts of energy.)

And I second (or third) moss's point about the difficulty in getting po issues and consequences across, even to the "converted" sometimes :roll:
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Re: Restructuring the Global Economy

Unread postby MrBill » Thu 06 Mar 2008, 04:40:44

I have wrote this before, but I think it is worth repeating...

Physical Reality > Economic Consequences > Social Reaction > Political Response > Feedback Loop > New Reality > Etc.

We have to remember that once petroleum goes into terminal decline that lifestyles will change whether we like it or not. But I am less concerned about that 'physical reality' then I am very affraid of the social reaction and political responses to the economic consequences.

Given time people tend to adapt to a new reality, but in the short-term their perception is reality. I can have a plan to mitigate the effects of post peak oil resource depletion, but it all goes out the window if there are riots and social unrest as well as thieves that tear down the existing infrastructure for the price of scrap metal.

And that eventuality is all too real. Witness riots in Kenya - a once stable middle income country - where mobs were ripping up railway tracks in political protest. Yes, they were making a point, but it is a little bit like cutting off your nose to spite your face. They are destroying infrastructure that takes time, energy and money to replace and in the meantime is completely unusable.

I am not more than 30 minutes away from chaos in this area of the world. I would not know it looking out the window today, but tonight I will fly to Lebanon and then it is right there. Lebanon, Syria, Israel, Palestine, etc. Absolutely senseless violence no matter what your political views are. But they make themselves poorer by continually tearing-up and destroying their infrastructure. If I engage in scenario planning about post peak oil resource depletion then that kind of social unrest and anger has to be part of the calculation.

But in the world of strategy 'incrementalism' is a bad word. Death by a thousand small steps. Some people will say, "every little bit helps", but really this is like pissing on a forest fire.

We can all do our part by cutting back and reducing our own consumption, but we are kidding ourselves that it makes a real difference whether we turn off the lights when we leave the room or not.

As an aside we are having water shortages here in Cyprus at the moment. I got a flyer in the mail from the local water board telling me twenty ways that I could save water. All fine and good, but the reason behind the water shortage is over-building, swimming pools, hotels, tourists, and, of course, 94% of the water goes towards agriculture!

So I am all for localization, but what posters need to do is buy land and start growing their own food. Then they can find out for themselves what the economics look like. I for one cannot afford to buy land at $2000 an acre - plus machinery and other inputs like fertilizer and energy - to grow vegetables. Nevermind that canning and preserving food takes yet other inputs - salt, sugar, glass, metal, energy - that I cannot grow locally.

And I am not fooling myself that riding my bike to the local farmer's market is going to make any difference what so ever, so long as 'everyone else' drives to the supermarket twice per week. It is great exercise. It is worth doing. I might enjoy it. But I should not kid myself that I am saving the planet. It is the flipside of corporate greenery. Consumers thinking that they are making a difference through their small, token efforts. That are completely overwhelmed by 700 out of every 1000 adults owning their own car. And another 30 million autos being produced each and every year.

But just like we are all part of the problem, we all need to be part of the solution. Through Rotary International we are sponsoring prizes for environmental projects. It is all part of raising awareness of the problems. It may be too little, too late, but you do what you can. Death despite good intentions! ; - )
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Re: Restructuring the Global Economy

Unread postby dohboi » Thu 06 Mar 2008, 15:35:39

Nicely put again. I also certainly don't think anything I am personally doing or not doing is saving the planet. I have a smidgen of land that we grow some food on, but we are also in partnership with a local farmer.

Again, I do these things more to help my kid make a connection with the land that sustains her than to save the planet or as part of a survival strategy. As you say so well, our best laid plans are as likely as not going to get swept away by chaos triggered by the wrenching dislocations of the economic collapse we see starting to unfold before us.

Best wishes to all as life continues to be more interesting.
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Re: Restructuring the Global Economy

Unread postby MrBill » Tue 11 Mar 2008, 11:53:51

Thanks for not attacking my faulty post. I was away for a few days and agonized over it. Not my best post ever for sure. Of course, we all have to do whatever is in our power to do even if alone we cannot change the world by ourselves per se. Cheers.
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Re: Restructuring the Global Economy

Unread postby MrBill » Wed 28 May 2008, 06:29:07

Restructuring the Global Economy a la Chavez

$this->bbcode_second_pass_quote('', ' ')Chavez's policies have weighed heavily on PDVSA, which accounts for 90 percent of the value of the nation's exports. As he taps the company's petrodollar revenue to pay for social programs, less is spent on exploration, production and refining.

Both production and revenue are falling, even as world oil prices soar beyond $125 a barrel. As of April, Venezuela's oil output had declined to 2.32 million barrels a day from 2.77 million barrels in February 2005, according to Bloomberg estimates. Last year, PDVSA's revenue dropped 3 percent to $96.2 billion.

`Egregious'

PDVSA shows signs of being cash starved. As of April, the company was demanding payment by customers within eight days, down from its normal 30 days.

``The extent to which PDVSA is being used now is egregious,'' Aberdeen's Gutierrez says. ``It's the golden goose that's paying for everything.''

Amid the growing imbalances, Venezuelans are finding ways to take advantage of the government's elaborate system of controls. Black markets are burgeoning. One ploy involves exploiting the gap between the parallel, unofficial exchange rate and the official rate of 2.15 bolivars to the dollar.

As the parallel rate plunged to as low as 6.6 bolivars per dollar last year, crafty Venezuelans started exploiting a regulation that allows them to spend $5,000 a year each on their credit cards while abroad. They fly to Curacao, about 75 kilometers (47 miles) off the coast of Venezuela in the Netherlands Antilles. There, they can use a credit card to buy $5,000 in casino chips billed at the official exchange rate, cash in the chips for dollars and return home to sell the dollars on the parallel market.


source: Chavez Price Controls Mean Record Oil Fails to Prevent Shortage
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