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The disastrous effects of $250 oil

General discussions of the systemic, societal and civilisational effects of depletion.

Re: The disastrous effects of $250 oil

Postby thuja » Wed 18 Jun 2008, 22:24:18

$this->bbcode_second_pass_quote('Heineken', '')$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('ColossalContrarian', 'w')e're a lot more dependent on oil now than we were during ww2. you can't even fathom the impact $10 gas would have on the US economy.
I was referring to disastrous as in no food, no housing, no clothing, no heat, no light, no medicine, nothing. $10 gas will be real, real tough, but not disastrous.


When the supermarket shelves are stripped because of breakdown of the interstate trucking system, where will you get your food from, VMarc?

So many of us believe that disaster happens only to others, or far in the past or far in the future. This is to be expected.


I think we have a few more stopgaps before starvation in the streets occurs in the First World. I think a few outbreaks of rioting and bloodshed will lead to governmental allocation of energy resources towards essential tasks such as...providing food to the masses.

Even our paltry 6 mb/d that the US produces would be enough to keep the emergency lights on.

I'm not painting anything rosy- but I am seriously doubting the trucking strike that leads to 200 million US deaths within a week. Just don't think we're going there...yet.
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Re: The disastrous effects of $250 oil

Postby ColossalContrarian » Thu 19 Jun 2008, 00:30:18

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('ColossalContrarian', 'w')e're a lot more dependent on oil now than we were during ww2. you can't even fathom the impact $10 gas would have on the US economy.
I was referring to disastrous as in no food, no housing, no clothing, no heat, no light, no medicine, nothing. $10 gas will be real, real tough, but not disastrous.


Ohh... I thought you were talking about WWII's 6 year impact in the US, what country were your grandparents in?
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Re: The disastrous effects of $250 oil

Postby VMarcHart » Thu 19 Jun 2008, 08:47:04

$this->bbcode_second_pass_quote('Heineken', 'W')hen the supermarket shelves are stripped because of breakdown of the interstate trucking system, where will you get your food from, VMarc?
Hi, Heineken. The shelves will not be empty at $250/bbl; it will be expensive as heck, we won't find all 25 assortements of peanut butter, but we'll buy food. That's not disastrous. That's the rich American cry-baby having a wake-up call.
$this->bbcode_second_pass_quote('Heineken', 'S')o many of us believe disaster happens only to others, or far in the past or far in the future. This is to be expected.
Not this redneck, my friend.
$this->bbcode_second_pass_quote('ColossalContrarian', 'O')hh... I thought you were talking about WWII's 6 year impact in the US.
Colossal, please, apart from Pearl Habor, a few blackouts, and the Japanese taken to camps, WWII in the US was a walk in the park. Think 6 years down the trenches without housing, food, shoes, doctors, entretainment, nothing. That's disaster. $250/bbl or $10/gas means some people will cancel their satellite TV and others comforts. That's it and that's not a disaster ... yet.
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Re: The disastrous effects of $250 oil

Postby Heineken » Thu 19 Jun 2008, 08:58:38

I think we have to have our disasters FIRST, VMarc. THEN we may have some options, for a stripped-down population.

It is just not in our nature to do the heavy-duty preventive medicine that's needed. Because it tastes bad.

Since we react rather than pro-act, disaster is unavoidable.

I think you underestimate the monstrous consequences of $10 gasoline (and $13 diesel?) for a society that has evolved around cheap fuel for over a century. That, too, is human nature.

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Re: The disastrous effects of $250 oil

Postby ColossalContrarian » Thu 19 Jun 2008, 09:04:55

VMarkHart, I understand what you mean but I’m only pointing out how you’re playing down $10 gasoline, ~$250 oil. We really don’t know what $250 oil = in gas terms but we do know that $120ish oil is causing airlines to go out of business and truckers to strike because of fuel costs. People are cutting back and the fat is being trimmed. We won’t see the full effects of $120ish oil for another two years, until it’s fully worked through the system. Until the farmer’s fertilizer cost go up along with our food costs.

People make the mistake of thinking the transition is overnight. It’s not, it’s disastrous a number of years out, which in human terms is a long time but in civilization terms it’s not too long. Then there are the people going without food in Africa and other parts of the world. For them, $120ish oil IS disastrous.

The police force in a few counties over from mine (suburb of Denver, CO) is stopping nightly patrols to save fuel. This is with only $4 gas! Imagine doubling that. No police patrol at night, only responding to calls. I’ll see if I can find a link but it was in last Sunday’s Denver Post.

Nobody in this thread is talking zombie hords. I imagine sky rocketing crime and armed citizens in my worst case scenario. I really don’t think I’m that far off either but one thing I know is that it won’t happen overnight, give it a couple years and then let it drag out for a decade and a half or so. That to me is Disastrous
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Re: The disastrous effects of $250 oil

Postby Fredrik » Thu 19 Jun 2008, 09:23:53

$this->bbcode_second_pass_quote('Heineken', 'U')nfortunately, the $250 oil prospect cannot be viewed in isolation. Remember, it will be accompanied by "peak everything"---topsoil, fresh water, coal, uranium, metal ores, timber, you name it.


Declining oil production will certainly increase the need for these resources and their price, but it doesn't mean that they all start to physically run out immediately. For example, rising energy prices will make uranium mining profitable in many places where the reserves haven't justified mining at current prices. Mining will be more expensive but probably lucrative with all those jobless people willing to work for low wages.

Besides, economic collapse will reduce the demand for many resources. And think of all the reusable material in millions of abandoned cars & other vehicles... that would deserve a thread of its own.

An aside note:
$this->bbcode_second_pass_quote('Heineken', 'P')lus there's the little item of global warming to contend with, the impact of which will be exaggerated at your latitude. Perhaps you won't be so forest-rich after bark beetles and conflagrations take a crack at your forests.


You're right that northern latitudes that will warm faster, and it will increase plant/tree pests and fires, but increased temperatures and CO2 content in air will also accelerate tree growth in the north, and benefit more energy-intensive hardwoods. The net effect for following decades remains to be seen.

$this->bbcode_second_pass_quote('Heineken', 'I') know this thread is about $250 oil, but we need always to keep the other problems in mind, because they will hugely exacerbate the negative impacts of that pricey oil. Analyses that focus on energy costs all by themselves are pretty meaningless.


Agreed.
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Re: The disastrous effects of $250 oil

Postby VMarcHart » Thu 19 Jun 2008, 10:15:39

$this->bbcode_second_pass_quote('Heineken', 'I') think you underestimate the monstrous consequences of $10 gasoline (and $13 diesel?) for a society that has evolved around cheap fuel for over a century.
Not at all. I'm very aware of the possible scenarios and am bracing for the worst. But please look back at prices when you joined in Sept '04. http://tonto.eia.doe.gov/dnav/pet/hist/mg_rt_usm.htm. It was $1.87. It has more than doubled since then, and people were already crying disaster if it hit $3. Well, alas it did, it even passed $4, but where are the riots, the empty shelves, the disasters?

I'm not saying $10 gas will be honky-dory, nor am I in denial, but our definitions of disaster are different. No one born and/or raised in the US after the Great Depression has seen prolonged disaster. We've seen difficult times, gas rationing, hurricanes, inclement weather, but no disaster. If by the 4th, it gets to $20, then we're talking. But that's unlikely, barring Bush's plans for Iran, of course.
$this->bbcode_second_pass_quote('Heineken', 'W')elcome to the site.
Thanks!
$this->bbcode_second_pass_quote('ColossalContrarian', '.')..$120ish oil is causing airlines to go out of business and truckers to strike because of fuel costs. People are cutting back and the fat is being trimmed.
People are learning to take vacation near or at their own homes --like the old days--, and buying less Twinkies. Life is a bitch, isn't it?
$this->bbcode_second_pass_quote('ColossalContrarian', 'W')e won’t see the full effects of $120ish oil for another two years, until it’s fully worked through the system. Until the farmer’s fertilizer cost go up along with our food costs.
We'll learn, I guess.
$this->bbcode_second_pass_quote('ColossalContrarian', 'T')hen there are the people going without food in Africa and other parts of the world. For them, $120ish oil IS disastrous.That's a good example of disaster, but they were already dying when oil was $20/bbl.
$this->bbcode_second_pass_quote('ColossalContrarian', 'T')he police force in a few counties over from mine (suburb of Denver, CO) is stopping nightly patrols to save fuel. This is with only $4 gas! Imagine doubling that. No police patrol at night, only responding to calls. I’ll see if I can find a link but it was in last Sunday’s Denver Post.That's interesting. I'd love to hear more about what you find.
$this->bbcode_second_pass_quote('ColossalContrarian', 'N')obody in this thread is talking zombie hords. I imagine sky rocketing crime and armed citizens in my worst case scenario. I really don’t think I’m that far off either but one thing I know is that it won’t happen overnight, give it a couple years and then let it drag out for a decade and a half or so. That to me is DisastrousThere are several threads about this topic, and that indeed will be a disaster, but I doubt it will happen at $10 gas, especially, if it happens gradually over the next 2-3 years.
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Re: The disastrous effects of $250 oil

Postby sterlingtrader » Thu 19 Jun 2008, 11:06:30

I have been reading the site for some time now. Lurking, learning trying to make some sense of what the future holds for us. I have to confess that I am becoming a doomer.

I wonder for just how long, that many jobs will even exist at the point of $250 oil. The people at the bottom of the wage scale are having to work multiple days now just to fill up a gas tank and eat.

At what point does the pay for police officers, teachers, firemen, and so many other essential infrastructure jobs become too low to even show up. This will be the breakdown.

I would like to compliment you all for sharing your views, as this is the most informative message board I have ever visited.
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Re: The disastrous effects of $250 oil

Postby VMarcHart » Thu 19 Jun 2008, 11:18:57

Welcome to the site, Sterling.

$this->bbcode_second_pass_quote('sterlingtrader', 'I') have to confess that I am becoming a doomer.
Take it easy. It's not going to happen overnight.
$this->bbcode_second_pass_quote('sterlingtrader', 'I') wonder for just how long, that many jobs will even exist at the point of $250 oil. The people at the bottom of the wage scale are having to work multiple days now just to fill up a gas tank and eat.
Don't discount the folks at the top of the scale; they too will have to adjust. I'm not at the top, but am already adjusting.
$this->bbcode_second_pass_quote('sterlingtrader', 'I') would like to compliment you all for sharing your views, as this is the most informative message board I have ever visited.
You are too kind.
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Re: The disastrous effects of $250 oil

Postby Heineken » Thu 19 Jun 2008, 13:07:14

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('Heineken', 'I') think you underestimate the monstrous consequences of $10 gasoline (and $13 diesel?) for a society that has evolved around cheap fuel for over a century.
Not at all. I'm very aware of the possible scenarios and am bracing for the worst. But please look back at prices when you joined in Sept '04. http://tonto.eia.doe.gov/dnav/pet/hist/mg_rt_usm.htm. It was $1.87. It has more than doubled since then, and people were already crying disaster if it hit $3. Well, alas it did, it even passed $4, but where are the riots, the empty shelves, the disasters


When I joined PO.com, and for several years thereafter, much of the discussion centered around the timing of Peak Oil, or whether Peak Oil would occur at all. Many people argued vigorously and skillfully that the peak was decades away. Now they're silent, just like most of their brethren the global-warming deniers.

Not many sensible people cried disaster if gasoline hit $3. I certainly didn't expect disaster at that level. Just the beginnings of heavy friction, which we've seen.

Doublings are exponential. 2 becomes 4 becomes 8 becomes 16 becomes 32 etc. Any system that is changing exponentially is a system that will soon be out of control.

Our civilization has great resilience and adaptability, we like to think, but I believe, as I've always believed and will always believe, that there are thresholds beyond which you get major breakdown. $10 gas this year, next year, or maybe the year after that would probably be such a threshold.

Where these thresholds precisely lie is of course a subject for debate. But I would caution you not to extend them out too far, since this is the normal human tendency, and must therefore be guarded against. We are great at deceiving ourselves.

Just remember that the impacts of $4 are still working themselves through the system. We haven't seen the full impact of that price yet, not nearly.
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Re: The disastrous effects of $250 oil

Postby ColossalContrarian » Thu 19 Jun 2008, 20:14:31

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('ColossalContrarian', ']')The police force in a few counties over from mine (suburb of Denver, CO) is stopping nightly patrols to save fuel. This is with only $4 gas! Imagine doubling that. No police patrol at night, only responding to calls. I’ll see if I can find a link but it was in last Sunday’s Denver Post.
That's interesting. I'd love to hear more about what you find.


Found the article: Some Colorado sheriffs to cease regular patrols


As far as $10gas/$250 oil being disastrous I guess it depends on your definition of disastrous. My WAG is $10 oil being comparable to the great depression in terms of unemployment and GDP. What would you say it’s comparable to?

Of course we may have this soon anyway due the current economic environment. The question then becomes: is what we’re experiencing now related to $70 oil?
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Re: The disastrous effects of $250 oil

Postby nobodypanic » Thu 19 Jun 2008, 21:08:56

$this->bbcode_second_pass_quote('sterlingtrader', 'I') have been reading the site for some time now. Lurking, learning trying to make some sense of what the future holds for us. I have to confess that I am becoming a doomer.

I wonder for just how long, that many jobs will even exist at the point of $250 oil. The people at the bottom of the wage scale are having to work multiple days now just to fill up a gas tank and eat.

At what point does the pay for police officers, teachers, firemen, and so many other essential infrastructure jobs become too low to even show up. This will be the breakdown.

I would like to compliment you all for sharing your views, as this is the most informative message board I have ever visited.

i think you've almost got it, except... don't discount those at the bottom of the wage scale; the breakdown will start with them. after all, when they can't get to work, who is going to load/unload food and other consumer goods, stock the shelves, fill orders, ring up your groceries, and all the countless but hardly noticed other things that make the system function.

although certainly not a perfect analogy, i am of the opinion that the system is more closely analogous to a chain than we think: it's only as strong as its weaker links.
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Re: The disastrous effects of $250 oil

Postby MrBean » Fri 20 Jun 2008, 07:44:00

$this->bbcode_second_pass_quote('hope_full', 'S')urely there's a formula of some kind to determine cost of gas (per gallon) based on prevailing cost per barrel? For instance, if oil is $250 a barrel, what is it per gallon?


Simple rule of thumb stolen from another thread is oil barrel cost/40+1$= gas gallon cost. Meaning about 7,25 bucks a gallon at $250 a barrel.

[/quote]
And my bigger question, has the $140 a barrel oil hit the pumps yet? Is $4.00 a gallon reflecting the recent increases? And if NOT, how long does it take for the jump in price per barrel to be reflected at the pump?[/quote]

The formula would give 4,5 bucks per gallon for 140 barrel.
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Re: The disastrous effects of $250 oil

Postby CrudeAwakening » Fri 20 Jun 2008, 19:20:56

One of the consequences of living in a society as complex as our own is that our mutual interdependencies are, to a large extent, hidden from our immediate awareness.

It is only when the links in the chain that form the base of the pyramid of complexity begin to break, that we become truly, viscerally, aware of the extent to which we rely on others for our survival.

The division of labour and its attendant specialization of skills may be a boon in times of economic growth and abundance, but it renders us supremely vulnerable to more difficult times. Ask yourself how well you would cope if you were forced to barter to support yourself. If you are unable to feed yourself, what can you offer someone else in return for food? It's a sobering thought.

At $250 oil, I expect to see significant structural unemployment, as service industries become gutted, with enormous pressure on government coffers to provide assistance, and a declining tax base from which to draw as economic recession bites hard. The pressure to print money may become irresistible, and we know where that leads.
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Re: The disastrous effects of $250 oil

Postby VMarcHart » Sat 21 Jun 2008, 08:59:25

$this->bbcode_second_pass_quote('Heineken', 'W')here these thresholds precisely lie is of course a subject for debate.
True, and hence our cordial chit-chat.
$this->bbcode_second_pass_quote('Heineken', 'B')ut I would caution you not to extend them out too far, since this is the normal human tendency, and must therefore be guarded against. We are great at deceiving ourselves.
Agreed. I'm mentally and financially preparing myself to the fact $250/bbl or $10/gas will be tough as heck, but not disastrous. If gas is $10 this year, then we're hosed, but then, I doubt. I think and hope it's 2 years out, and by then, you and I and other people will have adapted a little. If it hits $20 by the end of next year, then yes, it's disastrous.
$this->bbcode_second_pass_quote('ColossalContrarian', 'A')s far as $10gas/$250 oil being disastrous I guess it depends on your definition of disastrous.
I already did; 6 years down in a trench, bombs and bullets flying overhead, without food, water, doctors, shoes, etc. Or in modern times terms, Bahgdad since the invasion. That's a disaster. We have lots of fat to cut, ie, exquisite varieties at the stores, infinite clothing accessories, numerous recreation activities, etc, etc. You don't seem shallow at all, but you don't think not having 350 channels is disaster, do you?
$this->bbcode_second_pass_quote('ColossalContrarian', 'M')y WAG is $10 oil being comparable to the great depression in terms of unemployment and GDP. What would you say it’s comparable to?
I owe you a proper response; I don't know what WAG is. Assuming it's a breaking-point, no. It will be the GD all over again if it hits $30 by year end. $10 will be the end of my favorite peanut butter, that's it. Big deal.
$this->bbcode_second_pass_quote('ColossalContrarian', 'F')ound the article: Some Colorado sheriffs to cease regular patrolsThanks! Interesting no one is mentioning walking the beat. We're so accustomed to depend on oil.
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Re: The disastrous effects of $250 oil

Postby ColossalContrarian » Sat 21 Jun 2008, 10:34:17

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('ColossalContrarian', 'A')s far as $10gas/$250 oil being disastrous I guess it depends on your definition of disastrous.
I already did; 6 years down in a trench, bombs and bullets flying overhead, without food, water, doctors, shoes, etc. Or in modern times terms, Bahgdad since the invasion. That's a disaster. We have lots of fat to cut, ie, exquisite varieties at the stores, infinite clothing accessories, numerous recreation activities, etc, etc. You don't seem shallow at all, but you don't think not having 350 channels is disaster, do you?


The point I keep driving is (as well as posters before me) that "trimming fat" means less economic activity. Less economic activity in a heavily service industry dependant economy equals less jobs. I agree that there won't be trenches with bullets flying and a war like enviroment -in the US at least but elsewhere? You can count on it!

$this->bbcode_second_pass_quote('VMarcHart', '
')$this->bbcode_second_pass_quote('ColossalContrarian', 'M')y WAG is $10 oil being comparable to the great depression in terms of unemployment and GDP. What would you say it’s comparable to?
I owe you a proper response; I don't know what WAG is.


WAG = wild a$$ guess

$this->bbcode_second_pass_quote('VMarcHart', '
')$this->bbcode_second_pass_quote('ColossalContrarian', 'F')ound the article: Some Colorado sheriffs to cease regular patrolsThanks! Interesting no one is mentioning walking the beat. We're so accustomed to depend on oil.

Great observation! The distance might be kinda large but even bike and horse mounted patrols could help in that aspect.
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Re: The disastrous effects of $250 oil

Postby Ludi » Sat 21 Jun 2008, 10:43:47

$this->bbcode_second_pass_quote('ColossalContrarian', '
')The point I keep driving is (as well as posters before me) that "trimming fat" means less economic activity.


Powering down means overall less economic activity. To powerdown we will all need to work less for money. That doesn't mean we won't still have plenty to do providing for our basic needs such as water, food, shelter, and clothing. We just might not get paid for our work, nor have money to spend on things.

A painful adjustment. 8O
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Re: The disastrous effects of $250 oil

Postby VMarcHart » Sat 21 Jun 2008, 14:58:13

$this->bbcode_second_pass_quote('ColossalContrarian', 'T')he point I keep driving is "trimming fat" means less economic activity in a heavily service industry dependant economy equals less jobs.
Agreed, trimming fat will slow the economy, but will not be disastrous; it will be tough as heck.
$this->bbcode_second_pass_quote('ColossalContrarian', '')$this->bbcode_second_pass_quote('VMarcHart', 'I')nteresting no one is mentioning walking the beat. We're so accustomed to depend on oil.
Great observation! The distance might be kinda large but even bike and horse mounted patrols could help in that aspect.
Not mentioning keeping the force in shape.
$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('ColossalContrarian', 'T')he point I keep driving is (as well as posters before me) that "trimming fat" means less economic activity.
Powering down means overall less economic activity. To powerdown we will all need to work less for money. That doesn't mean we won't still have plenty to do providing for our basic needs such as water, food, shelter, and clothing. We just might not get paid for our work, nor have money to spend on things. A painful adjustment. 8OThat's about it. No disaster. Let's go to work, folks. Old school.
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Re: The disastrous effects of $250 oil

Postby Milret2 » Sat 21 Jun 2008, 15:34:22

ColossalContrarian wrote >>Great observation! The distance might be kinda large but even bike and horse mounted patrols could help in that aspect.<<

I live in a small college town on the coast of central California and noticed, for the first time ever here, a cop with sidearm riding on a bicycle down one of the town main streets. Of course i suppose that might have been partly due to the police department here getting a 26% raise just a few days ago.
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Re: The disastrous effects of $250 oil

Postby Heineken » Sat 21 Jun 2008, 16:23:14

$this->bbcode_second_pass_quote('CrudeAwakening', 'O')ne of the consequences of living in a society as complex as our own is that our mutual interdependencies are, to a large extent, hidden from our immediate awareness.

It is only when the links in the chain that form the base of the pyramid of complexity begin to break, that we become truly, viscerally, aware of the extent to which we rely on others for our survival.

The division of labour and its attendant specialization of skills may be a boon in times of economic growth and abundance, but it renders us supremely vulnerable to more difficult times. Ask yourself how well you would cope if you were forced to barter to support yourself. If you are unable to feed yourself, what can you offer someone else in return for food? It's a sobering thought.

At $250 oil, I expect to see significant structural unemployment, as service industries become gutted, with enormous pressure on government coffers to provide assistance, and a declining tax base from which to draw as economic recession bites hard. The pressure to print money may become irresistible, and we know where that leads.


Excellent, important post.

We must hammer away at reminding people of all the fantastically complex, crucial interrelationships and interdependencies that are balanced on cheap oil like an elephant on the head of a pin.

These relationships evolved, step by quickening step, over a period of a century or more.

$250 oil would be accompanied by an unraveling the likes of which the world's never seen.
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