By using the rule of 70, you can quickly figure out how long it takes your money to double. There were a couple of situations that brought this up to me lately, and I think it applies to oil.
You take the number 70, divide a percentage number into it, and that gives you the doubling time. So, a 7%CD at the bank doubles your money in ten years, a 3.5% cd at the bank doubles in 20 years, and a 10% CD doubles in 7 years. Pretty simple, no? Also, take your doubling time, add one dollar to that number, and that was where you made the majority of the return on your investment, no matter how long it had been invested. It's the last doubling time plus one dollar.
If you start with ten dollars and invest at 10%, then you double every seven years. At the end of 70 years, your money had doubled ten times. It's all in the last seven years plus one day that you made the majority of the money, even though the vast majority of the time the money was invested was not in the last doubling time. Make sense?
At the end of 63 years, the vast majority of the time, you end up with $10,240. But, only seven years later, it's up to 20,480. Leave your money in for another day or two to make it up to $20,481 and it's easy to see that you made the MAJORITY of the gains on your position in the last doubling time.
Now let's look at half-lives. In my pharmacology book (I'm studying nursing right now) drugs have a half-life. Your liver and kidneys break down drugs circulating in your system at a steady pace. There is a fairly well-known half life to drugs. My book happened to mention that after five half-lives, there is about 3% of the original amount of the drug in the patient's body.
It took me a minute to draw the connection, but there it was.
Five halflives until it's pretty much not affecting the body anymore.
Let's see what the halflife of oil is given various depletion rates.
At 8%, the halflife of oil is 8.75 years.
At 5%, the halflife of oil is 14 years.
At 3%, it's 23.3 years.
At 2%, we're looking at 35 years.
Let's marinate in this one for a moment. If we can agree that the majority of the gain on the way up is made at the final doubling time plus one day, then I would imagine that we can agree that the majority of the loss occurs in the first half-life plus one day. We lose more on the first half-life than we will lose for the rest of eternity.
Take a look at those time spans again. Do we see 50 years on any of them? No, we do not. If you are under 30, then it is likely that you will see the first half-life of oil come and then you will see it go. What does that mean?
It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.
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Doubling times and half-lives
Doubling times and half-lives
by Ayoob » Mon 17 Jul 2006, 02:03:22
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Re: Doubling times and half-lives
by Tanada » Thu 19 Jul 2007, 18:17:08
You make an excellent point, the first halving is going to be the most traumatic event western Civilization has ever experienced.
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: Doubling times and half-lives
by Twilight » Sat 21 Jul 2007, 10:58:41
Thought-provoking, and yes, I would expect the first halving to be the most destructive. Thereafter, there would simply be progressively less to destroy. Since it takes time for changes in prevailing conditions to translate into distress, I would expect the worst to build up gradually over that period.
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Re: Doubling times and half-lives
by MonteQuest » Sun 22 Jul 2007, 02:47:00
$this->bbcode_second_pass_quote('Ayoob', 'I')t means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.
"The greatest shortcoming of the human race is our inability to understand the exponential function."
Every day I read articles that assert we have nothing to worry about as the decline of oil will be slow and gradual....
What a wake up call that is coming.
A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
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Re: Doubling times and half-lives
by jboogy » Sun 22 Jul 2007, 03:09:25
The maths a little beyond me but I get your point .I agree that it 's going to be the initial shock that's gonna mess us up the most,especially here in u.s.,america is totally and completely unprepared,were a relatively young country that's known very little in the way of suffering. the last time there was anything that could remotely be described as hardship was the depression,and that was a long time ago.this country is truly skipping down the primrose path with extra dark rose-colored shades.most people here have absolutely no frame of referance or historical perspective with which to even comprehend the possibility ,let alone the consequences ,of life without cheap abundant energy.A small part of me is looking forward to some of the more priveledged youth in this country getting a merciless education about what life is and can be like. Is this wicked of me? 
Perhaps the population would be less swayed to socialism if we had fewer examples of socialism from our "Free Market Capitalists". -----fiddler dave
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Re: Doubling times and half-lives
by Tanada » Tue 24 Feb 2009, 07:48:56
$this->bbcode_second_pass_quote('Ayoob', '
')By using the rule of 70, you can quickly figure out how long it takes your money to double. There were a couple of situations that brought this up to me lately, and I think it applies to oil.
You take the number 70, divide a percentage number into it, and that gives you the doubling time. So, a 7% CD at the bank doubles your money in ten years, a 3.5% cd at the bank doubles in 20 years, and a 10% CD doubles in 7 years. Pretty simple, no? Also, take your doubling time, add one dollar to that number, and that was where you made the majority of the return on your investment, no matter how long it had been invested. It's the last doubling time plus one dollar.
If you start with ten dollars and invest at 10%, then you double every seven years. At the end of 70 years, your money had doubled ten times. It's all in the last seven years plus one day that you made the majority of the money, even though the vast majority of the time the money was invested was not in the last doubling time. Make sense?
At the end of 63 years, the vast majority of the time, you end up with $10,240. But, only seven years later, it's up to 20,480. Leave your money in for another day or two to make it up to $20,481 and it's easy to see that you made the MAJORITY of the gains on your position in the last doubling time.
Now let's look at half-lives. In my pharmacology book (I'm studying nursing right now) drugs have a half-life. Your liver and kidneys break down drugs circulating in your system at a steady pace. There is a fairly well-known half life to drugs. My book happened to mention that after five half-lives, there is about 3% of the original amount of the drug in the patient's body.
It took me a minute to draw the connection, but there it was.
Five halflives until it's pretty much not affecting the body anymore.
Let's see what the halflife of oil is given various depletion rates.
At 8%, the halflife of oil is 8.75 years.
At 5%, the halflife of oil is 14 years.
At 3%, it's 23.3 years.
At 2%, we're looking at 35 years.
Let's marinate in this one for a moment. If we can agree that the majority of the gain on the way up is made at the final doubling time plus one day, then I would imagine that we can agree that the majority of the loss occurs in the first half-life plus one day. We lose more on the first half-life than we will lose for the rest of eternity.
Take a look at those time spans again. Do we see 50 years on any of them? No, we do not. If you are under 30, then it is likely that you will see the first half-life of oil come and then you will see it go. What does that mean?
It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.
')By using the rule of 70, you can quickly figure out how long it takes your money to double. There were a couple of situations that brought this up to me lately, and I think it applies to oil.
You take the number 70, divide a percentage number into it, and that gives you the doubling time. So, a 7% CD at the bank doubles your money in ten years, a 3.5% cd at the bank doubles in 20 years, and a 10% CD doubles in 7 years. Pretty simple, no? Also, take your doubling time, add one dollar to that number, and that was where you made the majority of the return on your investment, no matter how long it had been invested. It's the last doubling time plus one dollar.
If you start with ten dollars and invest at 10%, then you double every seven years. At the end of 70 years, your money had doubled ten times. It's all in the last seven years plus one day that you made the majority of the money, even though the vast majority of the time the money was invested was not in the last doubling time. Make sense?
At the end of 63 years, the vast majority of the time, you end up with $10,240. But, only seven years later, it's up to 20,480. Leave your money in for another day or two to make it up to $20,481 and it's easy to see that you made the MAJORITY of the gains on your position in the last doubling time.
Now let's look at half-lives. In my pharmacology book (I'm studying nursing right now) drugs have a half-life. Your liver and kidneys break down drugs circulating in your system at a steady pace. There is a fairly well-known half life to drugs. My book happened to mention that after five half-lives, there is about 3% of the original amount of the drug in the patient's body.
It took me a minute to draw the connection, but there it was.
Five halflives until it's pretty much not affecting the body anymore.
Let's see what the halflife of oil is given various depletion rates.
At 8%, the halflife of oil is 8.75 years.
At 5%, the halflife of oil is 14 years.
At 3%, it's 23.3 years.
At 2%, we're looking at 35 years.
Let's marinate in this one for a moment. If we can agree that the majority of the gain on the way up is made at the final doubling time plus one day, then I would imagine that we can agree that the majority of the loss occurs in the first half-life plus one day. We lose more on the first half-life than we will lose for the rest of eternity.
Take a look at those time spans again. Do we see 50 years on any of them? No, we do not. If you are under 30, then it is likely that you will see the first half-life of oil come and then you will see it go. What does that mean?
It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
- Tanada
- Site Admin
- Posts: 17094
- Joined: Thu 28 Apr 2005, 03:00:00
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