[alokin]

Back to the thread topic: it's just that people can't believe that we were living in exceptional times and these times may come to an end. Through most of man kinds history there was lots of evil, poverty, hunger and war in each and every generation. Only after the WW2 we had a long period of relatively stability and wealth and only in most parts of the Western world. Why some of you guys think that this period of prosperity is eternal? It's just a blink in history. I cannot believe that the economy goes back to normal with this depth level created in this country.

Maybe the economy will not collapse tomorrow or next week, but "the long emergency" is still a good description. And remember the wolf finally came when chicken little cried.

[Specop_007]

$this->bbcode_second_pass_quote('MrBill', '
')I have certainly researched it enough to know that you cannot double your money every eight months in a bear market. Unless you're short selling and using leverage. Or you plowed all your money into OTM options. Then, yes, you can lose everything.

If you are well diversified in stocks, bonds and mutual funds then you're not doubling your money every eight months. Not you. Not Jim Rogers. Not Warren Buffet. Not T. Boone Pickens. Not this year.


I am sure Jim Rogers made a lot being short Frannie, but that is another story.

[MrBill]

With great risk comes great rewards, but then eventually the averages catch-up to you. I just do not believe anyone that says they doubled their money in eight months. On one position? Or on all positions? On all your capital? Or only part of it? Once? Twice? Exactly how many times have you doubled your money? But certainly not by having a diverse portfolio of stocks and bonds in the past eight months. I have bought stocks that have doubled. I have bought options that have doubled. But those a part of my portfolio and do not represent my whole portfolio. I do not know about you, but I have had six figure losses, so I have learned that investments can be risky. And after some twenty some years in the game I have a healthy respect for those risks. Right now is the worst I have ever seen. If you're not worried you're probably not really in it, but dabbling with money you can afford to lose. Its no skin off my butt. Good luck.

[Specop_007]

$this->bbcode_second_pass_quote('MrBill', 'W')ith great risk comes great rewards, but then eventually the averages catch-up to you. I just do not believe anyone that says they doubled their money in eight months. On one position? Or on all positions? On all your capital? Or only part of it? Once? Twice? Exactly how many times have you doubled your money? But certainly not by having a diverse portfolio of stocks and bonds in the past eight months. I have bought stocks that have doubled. I have bought options that have doubled. But those a part of my portfolio and do not represent my whole portfolio. I do not know about you, but I have had six figure losses, so I have learned that investments can be risky. And after some twenty some years in the game I have a healthy respect for those risks. Right now is the worst I have ever seen. If you're not worried you're probably not really in it, but dabbling with money you can afford to lose. Its no skin off my butt. Good luck.

[Specop_007]

MrBill your posts have generally impressed me so rather then argue our investment positions and strategies let me ask you this.

What do you think Peak Oil really means? What do you think is going to happen in the next few years?

[MrBill]

Yes, you're right. Big losses scare me because I have taken big losses. Those are opportunity costs. They impact my future financial security and restrict my choices to deal with post peak oil resource depletion. I am equally afraid of endemic inflation and systemic deflation. I am wary of the social chaos that accompanies economic collapse. I am not paralyzed with fear. I have survived a lot of emerging market crises. But I respect risk. I do not gamble. I plan for the future. An unkown and uncertain future. I believe we are living through History. This is our Great Depression.

[Specop_007]

I agree. I think most all of us can agree things are going to "get worse" in the future. I think theres a great amount of disagreement on just how bad it will be.
Like you I am not paralyzed by fear either. In fact I find the turmoil and future uncertainties but assured downward trends to be quite liberating.

But let me ask you this, if nothing else then as a theoretical question.

If some wise man with a crystal ball said that in the next few years only those of extreme wealth would realyl come out ahead and that the average individual (Say net worth under 3 million) was going to be in almost identical straights as the broke guy on the street corner what would you do with your money? Would you piss it away on women and wine? Would you invest aggressively trying to get over "The Hump" that differentiates the well to do from the fallen when the economy crashes? Would you stay the course of conservative investing hoping for a humble retirement?

based on what you've said I'm of the opinion you think that things will generally be "ok". The ideas of worst case scenario, 5 billion people dying to get to a sustainable population, dont concern you. It seems you dismiss the worst case scenario's as impractical or improbable and are assuming that there will be a slow lifting of the bar that defines middle class but as a whole things wont be catastrophic? Am I correct?

[MrBill]

$this->bbcode_second_pass_quote('Specop_007', 'M')rBill your posts have generally impressed me so rather then argue our investment positions and strategies let me ask you this.

What do you think Peak Oil really means? What do you think is going to happen in the next few years?

[jdmartin]

Mr. Bill, that is quite possibly the best post I have ever read on this board. Bravo!!!

$this->bbcode_second_pass_quote('MrBill', '
')Post peak oil resource depletion will play out over many decades. First stage is high real prices for energy and regional shortages. The second stage are wider shortages and petroluem not available at any price due to scarcity and hoarding. This will not play out uniformly from region to region or nation to nation, but will impact some earlier than others. But no one will escape the consequences.

I see the confluence of fossil fuel depletion, climate change and population growth as causing maximum economic and environmental strain between 2030 and 2050. As many others here have pointed out we simply do not have a scalable alternative that can replace our dependence on fossil fuels, especially petroleum, in place by then.

Although I see peak oil as mainly as liquid fuel problem as so much of our current infrastructure is dependent on the automobile and truck transport it is also a stationary fuel problem as well as even though stationary power is more suitable for alternatives all that infrastructure still depends on transport fuel to build and service it. For example, even though trains can run on bio-diesel and electric they are still made of and run on metal that needs to be mined and transported as well.

However, we are also dealing with widespread natural resource depletion at the same time, but with less energy and/or more expensive energy with which to address these other problems associated with soil erosion and salination; destruction of wild fish stocks and marine habitat loss; deforestation; depletion of aquifiers and shortages of fresh water; lack of irrigation and neglect of farm infrastructure; and the other side effects of both climate change and population growth. And if those problems are not bad enough we currently lack any sort of global consensus on these problems, how to address them nor are we likely to get one before it is too late.

Given a lack of an alternative that is scalable I believe large portions of our current infrastructure will have to be abandoned at a huge economic, social and political cost. This should come as no surprize to us. Anything which is unsustainable must by its nature end at some point. We are clearly consuming over and above any sustainable path. Only that which can be run on renewable energy such as hydro, wind, wave, solar, geo, nuclear, etc. as well in the transition period by our remaining supplies of coal and natural gas will be salvaged or maintained.

In some cases this will mean a huge dislocation between where people live, work and produce now, and how power is brought to them, to where they will need to live, work and produce in the future, near some source of renewable energy. The economic and social costs to make that transition will be larger than any single outlay in History. Fortunately, that transition generates economic growth and wealth as well as destroys it. This will be a reallocation of wealth. But also probably an era of permanently lower living standards for many. Especially, if our new sources of alternative energy have a lower EROEI and/or we have less total energy then in our current energy mix including petroleum and other fossil fuels.

So probably that is where I part company with many posters is not on the geological reality of peak oil, but on its timing and its likely economic, social and political costs. Although I believe I am realistic about those issues I understand that I may be unjustifiably more optimistic than some other posters. But partially that is because I believe in answers. If there is no solution to help mitigate the effects of post peak oil resource depletion then it is a waste of time, energy and emotions to worry about it any more than I should lay awake at night and worry about large comets hitting the earth.

[MrBill]

Thanks. I am under a lot of pressure at the moment. Markets are crazy. I think I will have to refrain from posting until things settle down again somewhat. Good luck.

[Eppo]

$this->bbcode_second_pass_quote('MrBill', 'T')hanks. I am under a lot of pressure at the moment. Markets are crazy. I think I will have to refrain from posting until things settle down again somewhat. Good luck.

[vision-master]

$this->bbcode_second_pass_quote('', 'S')ept. 17 (Bloomberg) -- American International Group Inc. former Chief Executive Officer Maurice ``Hank'' Greenberg saw the value of the AIG stake he controls shrink by about $2.4 billion this week as the insurer collapsed.

[Heineken]

I agree; Mr. Bill did a good summary there of the "soft landing" argument.

I believe that we'll have a harder fall than that, though.

Where Bill speaks of "permanently lower living standards," I speak of dieoff (partial dieoff, that is). Those lower (much lower) living standards will be fatal to many, and shorten the lives of many more.

[smiley]

$this->bbcode_second_pass_quote('specop007', 'I')f some wise man with a crystal ball said that in the next few years only those of extreme wealth would realyl come out ahead and that the average individual (Say net worth under 3 million) was going to be in almost identical straights as the broke guy on the street corner what would you do with your money? Would you piss it away on women and wine? Would you invest aggressively trying to get over "The Hump" that differentiates the well to do from the fallen when the economy crashes? Would you stay the course of conservative investing hoping for a humble retirement?

[vision-master]

$this->bbcode_second_pass_quote('smiley', '')$this->bbcode_second_pass_quote('specop007', 'I')f some wise man with a crystal ball said that in the next few years only those of extreme wealth would realyl come out ahead and that the average individual (Say net worth under 3 million) was going to be in almost identical straights as the broke guy on the street corner what would you do with your money? Would you piss it away on women and wine? Would you invest aggressively trying to get over "The Hump" that differentiates the well to do from the fallen when the economy crashes? Would you stay the course of conservative investing hoping for a humble retirement?

[MrBill]

As my religious studies professor once told me, and he was a minister, "there is always room for the top ten percent." An unlikely source for such advice, but I took it to heart none the less.

[smiley]

$this->bbcode_second_pass_quote('', 'U')pper middle class, huh? With debt up the ying yang. You call that stable? NOT!