[smallpoxgirl]

$this->bbcode_second_pass_quote('joeltrout', 'S')o you don't think the fact that millions of people borrowed more money then they could pay back is a problem?

[joeltrout]

$this->bbcode_second_pass_quote('smallpoxgirl', '
')
I agree that the oil prices of the last few years created the insolvency we're now facing, but really this problem has been building for decades. Probably since the oil crises of the 70's.

[smallpoxgirl]

$this->bbcode_second_pass_quote('joeltrout', 'I') just don't see how you correlate the yearly double-digit percentage increase in home prices during the housing booms and oil prices. Housing markets saw 20%+ increases for several years in places like California, Florida, Arizona, and Nevada.

I believe that housing prices becoming unaffordable was the reason people had to stretch themselves financially and mortgage lenders were willing to "cut corners".

[joeltrout]

$this->bbcode_second_pass_quote('smallpoxgirl', ' ')energy costs eating up the 5% margin in their monthly budget and forcing them into default.

[kublikhan]

$this->bbcode_second_pass_quote('joeltrout', 'I') appreciate your posts though I do disagree with the foundation of the credit issues.
I wish more people would have posted and shared their comments but I think most people disagreed with the title. If they believed this was the beginning of oil shutting down our way of life then I think most people here would have been actively posting their comments. I just don't think they believe that.

[smallpoxgirl]

$this->bbcode_second_pass_quote('kublikhan', 'I') agree with you that our current financial mess was not caused by peak oil. Yes, I think higher energy prices can slow down growth or cause a recession. However it seems some want to ignore the fact that other things can throw an economy out of wack as well. Things such as banks writing off half a trillion in bad debt, which because of leverage multiplies into several trillion dollars removed from the economy. That financial mess would have still happened if we had 200 years of oil left.

[threadbear]

The problems with the sub-prime market and the fallout have almost NOTHING to do with rising oil prices. They are paralleling concerns, that dovetail, when investors rush into commodities as a safe haven, and drive prices up.

Today, after the Bear Stearns debacle, commodities slipped, including oil, likely due to the perception that demand will weaken across the board. It is likely more accepted, at this point, that the American recession translates into an international slowdown.

[eastbay]

$this->bbcode_second_pass_quote('smallpoxgirl', ' ')No one wanted to be the next Carter.

[lexicon]

$this->bbcode_second_pass_quote('centralstump', '')$this->bbcode_second_pass_quote('lexicon', 'F')und managers have already poured an estimated $200 billion into commodities across the board, as a hedge against the explosive growth of the world’s money supply

[threadbear]

The structured investment instruments and over the counter derivative schemes began when oil was under 30.00 per barrel. It's tempting to view this problem through the macro lens of oil depletion, but it would have happened anyway. The run up in oil price has been welcomed politically, because much of it ends up right back in the banks of developed nations, where it's funneled into more derivative schemes.

[jdmartin]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('joeltrout', 'I') just don't see how you correlate the yearly double-digit percentage increase in home prices during the housing booms and oil prices. Housing markets saw 20%+ increases for several years in places like California, Florida, Arizona, and Nevada.

I believe that housing prices becoming unaffordable was the reason people had to stretch themselves financially and mortgage lenders were willing to "cut corners".

[joeltrout]

$this->bbcode_second_pass_quote('jdmartin', '
')
The housing run was specifically engineered by federal policy to camaflouge the fact that Americans were now door greeters for 7 bucks an hour instead of machinists at 20 bucks an hour. The construction boom gave lots of people jobs that otherwise would have been attempting to suck off the government teat, one that had run dry of milk. The "global economy" siphoned off real economic production by industrialized nations and attempted to compensate by creating "new" industries, industries that had no intrinsic value other than pushing around invisible piles of money - finance, retail, etc. Nation-building efforts - home construction, realtors, Home Depot - allowed us to keep up the fascade for a few more years that we really were wealthy and had real jobs. Of course, once the Pyramid ran out of suckers at the bottom - after all, how many door greeters making 7 bucks an hour can afford a $350k home? - the entire system comes crashing down. Which is where we're at now. The economy is not coming back, never coming back, the way it was, and the only real hope for recovery in my opinion is a retrenchment into localized production and allocation of wealth. The question is will people make it happen, or will we go ape-shit first?

[smallpoxgirl]

$this->bbcode_second_pass_quote('threadbear', 'T')he structured investment instruments and over the counter derivative schemes began when oil was under 30.00 per barrel. It's tempting to view this problem through the macro lens of oil depletion, but it would have happened anyway. The run up in oil price has been welcomed politically, because much of it ends up right back in the banks of developed nations, where it's funneled into more derivative schemes.

[BigTex]

$this->bbcode_second_pass_quote('eastbay', '')$this->bbcode_second_pass_quote('smallpoxgirl', ' ')No one wanted to be the next Carter.

[jdmartin]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('jdmartin', '
')
The housing run was specifically engineered by federal policy to camaflouge the fact that Americans were now door greeters for 7 bucks an hour instead of machinists at 20 bucks an hour. The construction boom gave lots of people jobs that otherwise would have been attempting to suck off the government teat, one that had run dry of milk. The "global economy" siphoned off real economic production by industrialized nations and attempted to compensate by creating "new" industries, industries that had no intrinsic value other than pushing around invisible piles of money - finance, retail, etc. Nation-building efforts - home construction, realtors, Home Depot - allowed us to keep up the fascade for a few more years that we really were wealthy and had real jobs. Of course, once the Pyramid ran out of suckers at the bottom - after all, how many door greeters making 7 bucks an hour can afford a $350k home? - the entire system comes crashing down. Which is where we're at now. The economy is not coming back, never coming back, the way it was, and the only real hope for recovery in my opinion is a retrenchment into localized production and allocation of wealth. The question is will people make it happen, or will we go ape-shit first?

[threadbear]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('threadbear', 'T')he structured investment instruments and over the counter derivative schemes began when oil was under 30.00 per barrel. It's tempting to view this problem through the macro lens of oil depletion, but it would have happened anyway. The run up in oil price has been welcomed politically, because much of it ends up right back in the banks of developed nations, where it's funneled into more derivative schemes.

[Chuckmak]

$this->bbcode_second_pass_quote('smallpoxgirl', 'I') just think that on a fundamental psychological level we had this gestalt shift with the election of Ronald Regan. Carter tried to acclimate us to the idea that our standard of living was going to decline and we were going to have to live a simpler life to be within our energy supply. With the 1980 election, we decided almost unanimously that we'd rather just pretend everything was fine and carry on. All throughout our economic system, everyone has been using various debt structures to conceal the stagnation of our economy. We've been mortgaging off America one brick at a time to buy another day worth of imported gasoline. Obviously the multitudinous and increasingly bizarre debt structures are ultimately an economic death trap. The reason those things were devised though, IMHO, was to allow us to ignore for a few more days, the cold hard facts of life. Everyone knew they'd better come up with a better answer than "Live within your means and put on a sweater." No one wanted to be the next Carter.

[Gandalf_the_White]

Just wanted to see if we could get a think thread going here on a possible scenario.

Lately it has been my perception that we might see an oil price superspike this summer signalling the arrival of 'practical peak oil.'

Here are a few terms (use your own terms if you wish)

Peak Oil - [geologic peak oil] 2005? historical moment at which physical global production in barrels per day is higher than it will ever be after that, roughly corresponds to mid-point of a gaussian curve.

Net Oil - [thermodynamic peak oil] 2004? Point at which energy content of daily production is the highest it will ever be

Per Capita Energy Peak - [lifestyle peak oil] global1970? point at which per capita energy consumption is the highest it will ever be

Geo-political Peak Oil - 1940? point at which scarcity begins driving international relations

Economic Peak Oil - 2008? point at which the markets universally accept that oil will now be more scarce with every successive year as a result of supply demand issues (there could be phases to this.)

My understanding of dynamical systems is pretty good, even into the areas of stochastic processes. It has occured to me after learning more about the Great Depression that once we see economic peak oil a price superspike could emerge. Timing is everything but the superspike would basically be an overshoot on price caused by re-enforcing feedback loops, sort of like a run on the bank in a time of fear. After the price spike to somewhere around $250 a barrel (a guess, the level at which major demand destruction sets in) it will settle again in to a range somewhere around $130 to $150 per barrel.

Let's talk about this and the terms and concepts, how do they fit into the dynamics of this issue we call Peak Oil?

Are the dates right?

What does it mean to nations, states, and individuals?

How likely is the price superspike scenario and are we seeing it emerge right now?

[misterno]

One giant hurricane in Gulf of Mexico and oil will be $150 in a week

That is all I can say.

[Mquinon3]

I think we might see the spike. Utilization rates are extremely low right now. Lowest since Katrina hit the Gullf. As we head full swing into driving season and utilization picks up to meet demand and oil prices are too high for refiners we will see what's up. Refiners don't want to produce as much because of refining margins so gasoline prices are higher along with oil prices. Or refiners produce more but raise prices to cover costs so gaosline and oil are higher as well. That's how I have been seeing it with the coming summer. Let alone Hurricane season. Imagine if we have at least 1 storm come through the gulf again like katrina then it will get really ugly.