Oil Depletion Likely Without Technology

59 Comments on "Oil Depletion Likely Without Technology"

ghung on Wed, 7th Oct 2015 7:43 am 



Oil depletion assured with or without technology.

Hello on Wed, 7th Oct 2015 7:46 am 



There you have it, doomers.

A little bit of advanced tech and oil supplies grow by x6.

makati1 on Wed, 7th Oct 2015 7:49 am 



The oil pimps have spoken!

Invest now! Get that cash out from under your mattress and give it to us. We need it to keep our high standard of living going for another month. LMAO.

shortonoil on Wed, 7th Oct 2015 7:53 am 



without new drilling techniques to exploit our reserve of nearly 650 billion barrels of crude oil,

If you can’t get it out of the ground, they are not reserves – they are resources – by definition!

“A report released by market research firm Lux Research says advanced oil drilling technologies could increase the world’s oil supplies sixfold in the coming years to 10.2 trillion barrels.”

There is not one single estimate from anyone, anywhere, that there are 10.2 Gb of liquid hydrocarbons on the planet. They must be planning on drilling on Mars. Lux Research needs to get their BS meter adjusted. This article is passed the absurd point, and into the downright stupid level.

Davy on Wed, 7th Oct 2015 8:02 am 



Hello, with the right amount of money I can turn my farm into high end Dude Ranch. Does that mean I can make money? We have the technology to put a Mercedes in every garage but will that bring a return to society?

We know we have the technology what we can’t figure out is how to use it and produce a return. What is worse is we are unable to figure out how to use technology without destroying ourselves.

Hello on Wed, 7th Oct 2015 8:10 am 



Davy: That is of course a valid point you’re making. But why would you think one can’t make money from expensive oil?

ghung on Wed, 7th Oct 2015 8:17 am 



Hello asks; “But why would you think one can’t make money from expensive oil?”

If it costs me $2 per pound to grow beans I can only sell for $1 per pound, I can’t make money. Do I need to explain that in detail?

Rodster on Wed, 7th Oct 2015 8:18 am 



“But why would you think one can’t make money from expensive oil?”

The global economy is collapsing and because of that peoples wages are declining while prices continue to rise. Wages are at mid 1970’s levels where a household could be supported by a one wage earner.

Because of that the price of oil becomes to be unaffordable for the average consumer which makes up the bulk of those purchases. Every time you increase the price of oil, the prices of everything that’s built around it begins to rising i.e. food prices, UPS delivery etc.

That’s why oil prices are beginning to spike then crash, spike then crash. That says that oil is priced too high for the average consumer and eCONomy and priced WAY TOO low for the producers.

Davy on Wed, 7th Oct 2015 8:19 am 



Hello, I can’t help it if you cannot connect the dots. Read Rockman on a company and its ability to make money on expensive oil. Some can and some can’t.

Look at the energy junk bond market to get a macro answer to your question. Excessive debt generally means you have yet to make money. In this case it will likely indicate a fleecing rarely seen in human history.

Hello on Wed, 7th Oct 2015 8:44 am 



Thank for the explanations from ghung, Rodster and Davy.

They all make sense when looking at the situation superficially.

But once one digs a bit deeper, it gets complicated. You all fail to recognize that the oil industrial complex is part of the economy. And not surprisingly the oil industry likes HIGH oil prices to thrive.

rockman on Wed, 7th Oct 2015 8:57 am 



Time will tell what can and can’t be improved in Iran. I’ve seen areas where once modern extraction practices are deployed a huge profit can be made…even at prices much lower than the current. Whether such opportunities exist in Iran or whether deals and be structured remains to be seen. But I once saw an operator take field in Venezuela from 300 bopd to 40,000 bopd in just a few years using decades old technology. And that was when the inflation adjusted price of oil was less than it is today. I don’t know if Iranian production methods are that antiquated or not. I’m netting about $400,000 per month from a well that is costing me $7,500/month for state of the art production equipment. Probably about an extra $200,000/month revenue above the older technology. Not a bad investment IMHO. Imagine doing that to 1,000 Iranian wells. Don’t know if they have that potential…don’t know that they don’t either.

But please don’t let a lack of information hold us back from speculating. LOL.

BobInget on Wed, 7th Oct 2015 9:09 am 



Unlike crude oil itself, the newest ‘technology’ can be recycled on the next well and the next till it becomes ‘the old tech’ and leases for less each year.

Around 1924 it was thought we we were running out of oil.

Remember when Howard Hughes was the richest man in the world? This wastebasket-size piece of equipment is the reason. It costs $3,500, weighs 78 pounds, and can turn up to a hundred times a minute. It’s called a tricone rotary rock drill bit and is used to drill oil wells. It’s made by the Hughes Tool Company, of Houston.

This bit’s ancestor, the two-cone rotary rock drill bit, was invented by Howard Robard Hughes, Sr., an Iowa boy who drifted to southeast Texas in the wake of the Spindletop discovery and started a drilling company in 1902 in partnership with a man named Walter Sharp. Like everyone who drilled for oil, Hughes had trouble getting holes through underground rock formations, because the drill bit then in use—a flat, sharp-edged piece of metal called a fishtail, which scraped its way through the rock—wore down too quickly. In 1906 he began experimenting with the idea of a bit consisting of two toothy, rotating steel cones that would pulverize the rock. He first tested his bit at Goose Creek in 1908, patented it in 1909, and immediately quit the drilling business and started the Sharp-Hughes Tool Company.

In 1912 Sharp died and Hughes bought up his interest in the company. In 1924, 54 years old and with 75 patents to his name, Howard Senior dropped dead at the office, and Howard Junior, his only child, dashing and 18, inherited the company. Legend has it that Howard Junior actually visited the Hughes Tool office only once in his life; the company listed his title as “owner.”

– See more at: http://www.texasmonthly.com/the-culture/texas-primer-the-hughes-drill-bit/#sthash.FQQUvAfD.dpuf

James Tipper on Wed, 7th Oct 2015 9:12 am 



“A report released by market research firm Lux Research says advanced oil drilling technologies could increase the world’s oil supplies sixfold in the coming years to 10.2 trillion barrels.”

HAHAHAHHAHA, where? It reminds me of another saying, outrageous claims require outrageous evidence.

“However, oil and trade embargoes against Tehran have led to constraints in crude extraction technologies in the past few years.”

I’d like to see that, even before the harsh sanction it’s pretty clear they peaked in the 1970’s. Here’s an actual graph (http://archive.transitionedinburghsouth.org.uk/blog/iranian-oil-production-decline-after-2010) detailing the situation. Not to mention they are running into the Export-Land model, they’re exports are going down as home consumption is rising.

@shortonoil

Lol, I love your comments

Rodster on Wed, 7th Oct 2015 9:37 am 



“You all fail to recognize that the oil industrial complex is part of the economy. And not surprisingly the oil industry likes HIGH oil prices to thrive.”

You are correct in your observation and here’s why we are up shit’s creek without a paddle.

1) Oil built the complex industrial society we live in today. Oil has allowed and made possible everything we take for granted. Chile can ship and sell lemons to Florida while Florida is known the world over for it’s citrus. CHEAP and affordable oil makes globalization possible. So now we are living in an interconnected world and eCONomy based on CHEAP OIL products and services. Raise the price of oil and BAM things start to slowdown and break.

2) Oil prices need to be high because as shortonoil and others like Gail Tverberg have said that if the price of oil is TOO LOW, producers become burdened with debt and interest payments and eventually close shop. Prices also need to be HIGH not only for producers but for the respective governments as well because that oil is typically sold on the market at a profit and taxed by the governments accordingly. That’s why Russia who’s a major oil producer is HURTING real bad and has SLOWED their eCONomy way down.

In China 60% of commodity producers can’t afford interest payments in the next 12 months.

BobInget on Wed, 7th Oct 2015 9:38 am 



Inventories, an unexpected rise last week’
I believe, because refinery use is less then 90%
Imports slightly lower, gasoline consumption higher weather is playing a major role.

Summary of Weekly Petroleum Data for the Week Ending October 2, 2015
U.S. crude oil refinery inputs averaged about 15.6 million barrels per day during the
week ending October 2, 2015, 403,000 barrels per day less than the previous week’s
average. Refineries operated at 87.5% of their operable capacity last week. Gasoline
production decreased last week, averaging 9.3 million barrels per day. Distillate fuel
production increased last week, averaging about 5.1 million barrels per day.

U.S. crude oil imports averaged about 7.1 million barrels per day last week, down by
486,000 barrels per day from the previous week. Over the last four weeks, crude oil
imports averaged over 7.2 million barrels per day, 3.3% below the same four-week period
last year. Total motor gasoline imports (including both finished gasoline and gasoline
blending components) last week averaged 543,000 barrels per day. Distillate fuel imports
averaged 111,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
Reserve) increased by 3.1 million barrels from the previous week. At 461.0 million
barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at
least the last 80 years.

Total motor gasoline inventories increased by 1.9 million barrels
last week, and are above the upper limit of the average range. Finished gasoline
inventories decreased while blending components inventories increased last week.

Distillate fuel inventories decreased by 2.5 million barrels last week but are in the middle
of the average range for this time of year. Propane/propylene inventories rose 1.6 million
barrels last week and are well above the upper limit of the average range. Total
commercial petroleum inventories increased by 2.3 million barrels last week.

Total products supplied over the last four-week period averaged 19.3 million barrels per
day, down by 0.3% from the same period last year. Over the last four weeks, motor
gasoline product supplied averaged 9.0 million barrels per day, up by 4.0% from the
same period last year. Distillate fuel product supplied averaged over 3.9 million barrels
per day over the last four weeks, up by 3.7% from the same period last year. Jet fuel
product supplied is up 6.9% compared to the same four-week period last year.

I believe 6.9% increase over last year’s jet fuel
consumption is a bullish sign. (I had expected double digit rise)

kanon on Wed, 7th Oct 2015 9:50 am 



I think there is a connection here between the US rapprochement with Iran and the shale oil decline. Now Iran lays the groundwork for bringing in new technology and where do you suppose they will get it?

rockman on Wed, 7th Oct 2015 9:51 am 



“And not surprisingly the oil industry likes HIGH oil prices to thrive.” Actually not. I can’t prove it but if given the choice of a lower but stable oil prices and the wild fluctuations we’ve seen over the last 45 years comes would have done much better with stability. Just consider the bloodshed being seen today. Not a problem if you cashed up during the boom. But if you’re still deeply invested in the oil patch life has become a nightmare. “Thriving” for a few years during high oil prices doesn’t tend to make up for the misery brought on during the low price busts.

Booms and busts are great ways to make a huge profit…if you get the timing right. A great many don’t.

rockman on Wed, 7th Oct 2015 9:56 am 



kanon – Iran has access to all the tech they’ll ever need without any help from US companies. BTW big service companies, like Halliburton and Schlumberger, aren’t really US companies per se. All the big boys have overseas operations that can get the job done without tapping anyone in the US. All the tech Iran will ever need is available by writing a check to someone. And that someone doesn’t need to be a US company. The US doesn’t own patents on any oil patch technology…companies do. And most of them operate internatonally.

kanon on Wed, 7th Oct 2015 10:24 am 



rockman — definitely good points. Yes, money answers a lot of questions. Still, I think there is some relationship, even if only removing the inconvenience of sanctions or as part of a larger political strategy. Iran can get the technology from anywhere, but they may want it to come from visible, politically connected US firms. Then again, maybe not.

rockman on Wed, 7th Oct 2015 10:38 am 



kanon – True. OTOH China has duplicated every technology developed by US companies because they ignore patents. And given that China might gladly finance any new activity in Iran and provide services much cheaper then any other company it’s not difficult to see such a relationship developing with Iran.

That’s exactly what China has done in Iraq. China had so much business in Iraq they actually built their own airfield there to handle the personnel and hardware logistics.

BC on Wed, 7th Oct 2015 11:42 am 



https://app.box.com/s/8f0rm31psk7thwtd5j3gwgrtx8acmo8t

https://app.box.com/s/ys8ijadj4b57nb95ka0b3ilph38ga7fm

https://app.box.com/s/x61sqtg4c3vp1ubo67k8715ulapw35me

https://app.box.com/s/894h3w9iool3d07cnadqa21tmg89xu8n

Oil is “cheaper”, but it still ain’t “cheap” WRT to the economy’s capacity to grow at current oil prices and supply.

https://app.box.com/s/s0wyvm4xh7kvd4fxcwyxx3mfevtf8yub

And US oil is still being depleted per capita at a steady, log-linear rate (falling 50% per capita by no later than the early 2020s).

https://app.box.com/s/dt2c8mz6vgrq11q8p8i5tbkn3oqlckcb

https://app.box.com/s/6aju2cctaq9wxck2y6xwxdfbqidq95op

https://app.box.com/s/u3icgvx6wbcddnijynhx257dshzm1dyr

Rigs are contracting with the oil cycle, and production will eventually follow.

Plantagenet on Wed, 7th Oct 2015 11:48 am 



Rock has it exactly right. China was already doing business with Iran during the “sanctions” period. No doubt they will build on their relationships to provide Iran with technology and cash as needed in exchange for long term oil contracts—-just as they’ve been doing in Iraq and Venezuela.

Cheers!

Hello on Wed, 7th Oct 2015 11:50 am 



rockman:

“I can’t prove it but if given the choice of a lower but stable oil prices and the wild fluctuations …..”

Yes. We know that. But that’s not part of the discussion. I’m sure you would pick high and stable oil prices over low and stable, wouldn’t you?

Just like the old saying goes:

I’d rather be rich and healthy than poor and sick….

Hello on Wed, 7th Oct 2015 11:54 am 



Rodstar:

There was a time in 2005 to 2008 when all doomers predicted HIGH oil prices to be the result of scarcity.

And since this didn’t work out too well, doomers now are saying LOW oil prices is a sign of scarcity.

Luckily we can sum it up neatly:
You guys are pathetic!

Rodster on Wed, 7th Oct 2015 12:04 pm 



“Rodstar:

There was a time in 2005 to 2008 when all doomers predicted HIGH oil prices to be the result of scarcity.

And since this didn’t work out too well, doomers now are saying LOW oil prices is a sign of scarcity.

Luckily we can sum it up neatly:
You guys are pathetic!”

You need reading glasses or a class in reading comprehension. Where did I say anything about SCARCITY?

I said and it’s a fact that HIGH OIL PRICES causes the global economy to slow and collapse. If you look at oil prices to the buildup of the 2008 collapse it’s EASY for a 5th grader to say Oh..oh. Scooby Doo could be heard saying Ruh Roh.

What you are seeing at play is industrial civilization collapsing and don’t give me the Doomer Shit, because history is littered with high tech civilizations collapsing such as the Romans.

We built a highly complex globalized interconnected system which includes monetary, financial, banking, food distribution, delivery distribution and a globalized just in time delivery mechanism where you can order an iPad, have it built in China and delivered in 2 days to anywhere FedEx delivers in the US.

Get a clue and i’ll put it in caps. CHEAP, AFFORDABLE, LOW HANGING FRUIT FOSSIL FUELS MADE THIS “ALL POSSIBLE”.

Now did I use the word scarcity in any of the above? The answer is NO!

GregT on Wed, 7th Oct 2015 12:08 pm 



“when all doomers predicted HIGH oil prices to be the result of scarcity.”

In February of 1999 WTI was trading at $11.99/bbl. Today, WTI is trading at $44.40/ bbl. Almost 400% higher. Prices are HIGH right now, not LOW.

You are the one who is pathetic Hello. You aren’t even willing to be truthful.

http://www.indexmundi.com/commodities/?commodity=crude-oil-west-texas-intermediate&months=360

Hello on Wed, 7th Oct 2015 12:16 pm 



I’m sorry Rodstar, but you’re wrong.

You said HIGH OIL PRICES causes the global economy to slow.

This is incorrect.
It is the CHANGE in oil price to cause the global economy to slow.

You see, CHANGE means uncertain times. Uncertain times are poison for long time investments, leading to a SLOW down in economic activity.

Give me STABLE $300 oil and I can give a humming economy with happiness for everybody.

GregT on Wed, 7th Oct 2015 12:20 pm 



“Give me STABLE $300 oil and I can give a humming economy with happiness for everybody.”

That must be some really good glue you’ve been huffing. Even at $44/bbl oil, our economies can still not recover from the global financial crisis.

We need oil in or around the $25/bbl range. You’re a fool Hello.

Hello on Wed, 7th Oct 2015 12:22 pm 



GregT:

Are you sure?

I just read an article regarding oil price. Many a company is complaining that oil prices are LOW.

And there comes along you telling me it’s HIGH?

This is too complicated. Or might it be you grasping for straws to defend doom?

Hello on Wed, 7th Oct 2015 12:25 pm 



Thank you GregT for calling me a fool. It take that as a compliment. It was a pleasure to exchange ideas with you. I’m sure we will cross keyboards again.

Is it HIGH or is it LOW. hmm……

ghung on Wed, 7th Oct 2015 12:26 pm 



Jeez, Hello, $100+ oil meant the global economy paid $trillions more for the oil it needed to run on; $trillions diverted from other productive endeavours, or from debt accumulation. Think that didn’t have a slowing effect on many sectors?

apneaman on Wed, 7th Oct 2015 12:29 pm 



Hello, if you’re going to reference an article provide the link or shut the fuck up.

GregT on Wed, 7th Oct 2015 12:31 pm 



Hello,

$44/bbl oil is too high for global economic recovery, and too low for many oil companies to turn a profit. If you can’t figure out what this means, there is no point in trying to explain it to you. It really isn’t that difficult to understand.

Hello on Wed, 7th Oct 2015 12:31 pm 



ghung. Your argument is of course valid.

BUT, it’s only valid if we remove the oil industrial complex from the economy. Like if we had to pay $trillions to buy oil from the Klingons.

However that is not the case. The $trillions spent went into OUR economy. It paid handsomely for thousand and thousands of companies and employees in the supply chain of oil extraction.

Again validating my point. HIGH oil prices have no impact on the economy.

Hello on Wed, 7th Oct 2015 12:33 pm 



I’m sorry ape. There’s no article needed. Unlike the generic doomer I don’t need to parrot articles. I’m simply using a little bit of high school logic.

And ape, please watch your language. It makes you dummer than you already are.

Davy on Wed, 7th Oct 2015 12:34 pm 



Hello, your doomer review is not fully accurate. Many talked about increased volatility destroying the economy. Many spoke about high prices sure but many knew what high prices would do and that it would lead to low prices. That played out I might add in 07 as all of us are aware of. Most higher level doomers understand the meaning of a goldilocks range for oil prices.

GregT on Wed, 7th Oct 2015 12:39 pm 



“I’m simply using a little bit of high school logic.”

Maybe that’s where the problem lies. This isn’t high school anymore Hello. This is the real world.

GregT on Wed, 7th Oct 2015 12:40 pm 



“And ape, please watch your language. It makes you dummer than you already are.”

Judging from both of your contributions here, I would be willing to wager that Apnea’s IQ is approaching twice the level of yours.

Rodster on Wed, 7th Oct 2015 1:04 pm 



“I’m sorry Rodstar, but you’re wrong.
You said HIGH OIL PRICES causes the global economy to slow.
This is incorrect.
It is the CHANGE in oil price to cause the global economy to slow.
You see, CHANGE means uncertain times. Uncertain times are poison for long time investments, leading to a SLOW down in economic activity.
Give me STABLE $300 oil and I can give a humming economy with happiness for everybody.”

$300 barrel of oil and a humming economy!!!

Wow, I have no response to your stupidity. There are too many financial experts who say just the opposite. Thank god, you’re not an expert but I suspect you are somehow related to Paul Krugman.

BC on Wed, 7th Oct 2015 1:06 pm 



Hello, see my post above. Oil is not “cheap”.

I invite you to spend additional time and intellectual capacity and energy to actually understand Peak Oil and the implications for LTG.

But note that most of us won’t take the extra time to understand Peak Oil and its implications because the implications don’t fit the longstanding memes based on perpetual growth of population, resource consumption per capita, profits, etc., and it’s so much easier to internalize what we want to be true and then continue to act on those beliefs.

Try this if you have not already done so:

http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

ghung on Wed, 7th Oct 2015 1:07 pm 



Hello said; “However that is not the case. The $trillions spent went into OUR economy.”

You think that money was redistributed equally throughout the economy? You think Joe Cubicle, who was paying a lot more for his daily commute, benefited from higher oil prices? Think the Pizza delivery guy was getting bigger tips? You think the few who made a killing from high oil prices were spending it back into the economy in such a way as to offset higher costs for everyone? Do you think that declining net energy per dollar spent comes back in the form of fairy dust for all?

Sure. That’s why we added $trillions to the public debt, needed ZIRP, QE, and bailouts. Equitable distribution of capital flows.

apneaman on Wed, 7th Oct 2015 1:12 pm 



Hello, you’re the one parroting. I’m providing citation not “I read an article and it said, fill in the blank” I knew a guy who knew a guy who said his cousin knew a guy who heard another guy say that his sisters bosses granddads financial advisor said oil will be free next month. Word!

BC on Wed, 7th Oct 2015 1:12 pm 



@GregT: $44/bbl oil is too high for global economic recovery, and too low for many oil companies to turn a profit. If you can’t figure out what this means, there is no point in trying to explain it to you. It really isn’t that difficult to understand.

Check. 🙂

rockman on Wed, 7th Oct 2015 1:20 pm 



Hello – Is English a second language for you or did you just not pay attention to what I posted? LOL. I didn’t say high and stable prices…I said lower stable prices. I take it you’re not aware of the devastation inflicted on the oil patch as a result of the oil price spike of the late 70’s. Even worse then what we just went thru: the rig count boomed twice as high (4,500) as we just experienced and yet had NO MEANINGFUL INCREASE in production. Easy enough to understand: pull up the rig count graph and look at it next to the US oil production rate. IOW over 30 years ago if someone was paying attention they would have gotten a strong hint about the PO patch we were on even back then. We certainly understood PO that long ago even though we called it the “reserve replacement problem”. Again: twice as many rigs drilling and no big increase in oil production. And those high oil prices were a good thing for the oil patch???

What was the damage? Have you ever heard of Texaco, Gulf Oil, Getty Oil, Tenneco…and many dozens of other companies? Do you know how the name ExxonMobil came about? The demise of those companies were the aftermath of the boom in oil prices more than3 decades ago. The oil patch has NEVER PROSPERED LONG TERM from high oil prices. It has NEVER PROSPERED LONG TERM from high NG prices. Do you have a short term memory problem: in 2008 NG prices were heading north of $10/mcf. Fantastic times to say the least. I was under contract to Devon when they signed 18 long term drilling contracts to chase NG in the Haynesville Shale. And then NG prices collapsed and Devon cancelled 14 of those rigs contracts and paid $40 million in penalties for doing so. But that’s nothing compared to the $300 million in penalties BP will pay to cancel long term contracts for two rigs in the Gulf of Mexico.

And as shorty so often points out consider the $trillions in debt the oil patch took out to chase the unconventional reservoirs with much of it to never be repaid. Add up all the hyped numbers tossed out by the shale groupies and start subtracting the $’s spent and the money borrowed: it should be easy to understand the deep wound generated as a result of companies drilling like mad men AS A RESULT OF HIGH FOSSIL FUEL PRICES.

Had oil stayed at $30 to $40 per bbls you would see neither the huge debt load we have today nor the hundreds of companies that are quickly disappearing thru bankruptcies and takeovers. The net: these last 8 years or so of high oil/NG have led to devastation in the US oil patch.

rockman on Wed, 7th Oct 2015 1:22 pm 



Or put into fewer words: there is no such thing as “stable high oil prices”. Never has been…never will be.

GregT on Wed, 7th Oct 2015 1:31 pm 



Thanks for the link BC!

http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf

Read the report Hello, you might actually learn something.

marmico on Wed, 7th Oct 2015 1:40 pm 



Oil is not “cheap”.

In 1964 Joe Sixpack earned $2.53 per hour, leaded gasoline cost $0.31 per gallon and the average fuel efficiency (AFE) of a car was ~14 miles per gallon (mpg).

Fifty years later in 2014 Joe earned $20.60 per hour, unleaded gasoline cost $3.50 per gallon and the AFE was ~24 mpg.

1964 Joe travelled 114 miles per hour worked. 2014 Joe travelled 141 miles or 24% further per hour worked.

Of course, 2015 year to date gasoline is substantially more affordable than 2014 and 2015 Joe will be able to travel ~200 miles per hour worked.

BC on Wed, 7th Oct 2015 1:47 pm 



ghung, right.

https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=23JB

$3 trillion of the $3.4 trillion printed by the Fed went to bank reserves held at Fed banks.

http://tinyurl.com/nzuzqca

During the same period, the US gov’t has borrowed $8 trillion from the public and accumulated an additional $1 trillion in intra-gov’t liabilities.

http://usawatchdog.com/financial-system-will-collapse-just-a-matter-of-when-laurence-kotlikoff/

At the growth of debt at the average interest rates, the future value of outstanding liabilities by the 2030s will be in excess of $200 trillion vs. nominal GDP at the post-2007 trend rate at $26 trillion.

Without the incremental borrowing in excess of the trend for the deficit through 2007, the US nominal GDP would be 20-25% smaller today and the U rate at 20-25% (not counting underemployment).

That implies federal liabilities of $640,000 per capita (equivalent to 15 years’ worth of the average working-class annual wages today) at today’s population and $575,000 per capita in 2030 at the trend rate of population growth.

But the cumulative liabilities are at $1.4 million per working American today, which is equivalent to ~32 years’ worth of working-class Americans’ average annual wages today.

IOW, the US gov’t’s future liabilities, including debt service, have a future claim equivalent to 32 years’ worth of the average earned incomes of the bottom 80-90% of Americans.

These numbers appear surreal and impossible, but it’s sixth- or seventh-grade math.

Ross Perot ran for president more than 20 years ago in part to address the fiscal issues and to attempt to prevent the outcome that is now a mathematical certainty.

Without outright debt forgiveness, asset deflation, and a “normalization” of labor share of GDP to returns vs. financial capital’s share, the gloom-and-doom outcome is a virtual certainty. But this means dramatic cuts in pension and benefit payouts, as well as payments for SS, SSDI, SSI, Medicare, Medicaid, etc.

It is not at all curious or surprising why any of us would want to “know” (and internalize) this information or contemplate it for long, as it is downright discouraging, if not depressing.

Hello on Wed, 7th Oct 2015 1:52 pm 



Thank you rockman for your assessment.

And you’re correct in your statement that English is in fact a second language for me.

Your history lesson regarding oil is certainly interesting. (do you remember standard oil? *smile*) Unfortunately you mix in subjects not under discussion.

The struggles of the oil companies in the 70s was a result of cheaper available oil from the ME. If ME oil was not available for import, the companies would have flourished on much higher oil prices.

Please do not confuse RISING and FALLING prices with HIGH and LOW. Those are 2 different things.

Please also do not confuse the banking gambling investment casinos that lead much often to companies troubles with actual oil resource restrictions.

You also said
“there’s no such thing as stable high oil prices”

That is a strange statement to make. Because a previous poster lectured me that oil at $44 is still high.
So we had about 10 years of high oil stable oil prices.

Hello on Wed, 7th Oct 2015 2:11 pm 



BC.

You certainly make good point and all those very large numbers are intimidating on first sight.

But it’s important to go a little bit beyond the fiscal understanding of your average house wife.

And once you do that, things don’t look that dire anymore.

Did you realize that debt forgiveness is practices right now by means of inflation?

But it’s strange that you would bring up the FED and money printing and debt forgiveness, when we were actually talking about only one simple thing. A solid working economy at $300 oil.

Could it be that you’re at a loss of arguments and in need of obfuscations?