This is a follow-up to the extensive Peak Oil (but more broadly peak energy) discussion that I started on the Life After the Oil Crash (LATOC) forum on 25 January 2010. If you want to consult the content of that extensive discussion up to 17 October 2010 you can do it on the LATOC forum section where it is currently (4 November 2010) still archived or more simply by clicking on the following hyperlink:
http://www.doom101.com/resources/ThePeakOilDiveHasBegun.html
The owner of LATOC decided to unexpectedly shut down the entire LATOC discussion forum on or around 19 October 2010. Although I have a great deal of respect for the original peak oil work done by the LATOC owner, this was in my view an unfortunate decision. In particular because it stopped, dead in its tracks, the very useful discussion, pooling of information and original research that was going on the LATOC forum.
After the LATOC closure, it took some time for some of the key participants in my “Peak Oil Dive Has Begun (Chronicles of the final plunge)” thread to regroup. One of them, Dr. Doom, was kind enough to offer his new web page as a host for my continuing discussion thread and strongly encouraged the restarting of the related research effort. I thank him for his initiative and for his support.
Since my last post on the above mentioned thread (on LATOC on 15 October 2010) important things have taken place and international events are unfolding rapidly. I do not have the time to comment on all of them but I would like to mention a few:
1) President Obama and the Democrats have lost control of the House of Representatives of Congress on 2 November 2010. There is no doubt that Main Street is not happy about Obama’s performance (since the beginning of his term in January 2009) and about the current state of the US economy. His financial regulatory reform package adopted only during the Summer of 2010 is pathetic. Not only does it not solve any of the fundamental problems related to the economy and to the financial industry but nobody appears to be held responsible for any of the decisions that led to the financial debacle that publicly started in August 2007 with the subprime market freezing. “Banksters” continue to collect and keep their indecent bonuses and those responsible for the debacle still hold key decision making jobs at the highest level of the pyramid of authority… For those who have the time, go and see the recently released film “Inside Job” (narrated by Matt Damon). It will help you to understand how bad some things now are in terms of simple conflicts of interests…
2) Yesterday (3 November 2010) the US Fed has publicly informed the world that it will shortly be initiating another round of “quantitative easing” (essentially a money printing exercise) of about 600 billion $US… Essentially buying US Treasury Bonds to try to keep interests low and attempt to prevent the default of the US government who has to pay interest on its now 12 trillion $US or so of outstanding debt (excluding the long term liabilities associated with the social security and medicare programs…). The $US 700 billion or so economic stimulus program voted early on in the Obama administration is now spent and the result is an economy that is still essentially flat on its back with official unemployment at about 10% and a housing market continuing to implode under the weight of “more or less legal” massive foreclosures by the banks… Since Congress is now much less likely to vote another economic stimulus package (the yearly deficit of the US government is now reaching about $US 1500 billions) and since the ongoing currency war with the Chinese is taking a new turn, the US Fed is putting in place a mechanism whereby it can essentially ensure that somebody will still be buying US Treasury Bonds if the Chinese decided that they had enough… Needless to say that we are here walking on thinner and thinner ice by the day in terms of international credibility. When the central bank of the country, whose currency is the main international reserve currency of the world, starts to ”create” out of thin air money to buy the debt of its own government, we are rapidly leaving the world of economic rationality to enter the one of magic… The US stock market is for now “enthusiastic” about this news but this type of “conservative” management by the US Fed could simply end up in disaster not so far down the line (the US Fed balance sheet is already loaded with more than 2.5 trillion $US a significant part of which can only be conservatively qualified as “financial shit”). How long before the holders of US dollars start heading for the exits?
3) On 11-12 November 2010 the G20 Heads of States will next meet. The international credibility of the G20 “consensus decision” to refrain from protectionist measures and currency war has been badly shot up since its ”modern” recreation in October-November 2008. A global currency and trade war is ongoing (something similar took place a few years after 1929…) and China and the US are looking as if, step by step, they are positioning themselves for what could be “a final great embrace”… The recently proposed US mediation in the Japan-China conflict related to a few islands (sitting on top of important gas reservoirs) has been rebuffed by China even after the US and Japan had mentioned that they were currently linked by a military defense treaty… Tensions are therefore building up rapidly within the system. All wars have an underlying serious economic cause.
4) The price of oil has increased rapidly and is now standing at close to $US 87 /barrel after the Saudi oil minister publicly said on 2 November 2010 that he was happy with oil below $US 90/barrel…
5) Looking now at the fundamental causes of humanity’s current collective problem, it is interesting to note that Charles Hall recently made a very interesting presentation on the key net energy issue during the “7th Advance in Energy Studies Conference” in Barcelona. For those interested, the Oil Drum has a few recent posts in that regard. One of his key observations is that the EROEIs – at the point of delivery - of gas and oil used by the US have now declined so much, that coal may be what is actually currently running the US economy. In other words, the net energy added by all the other types of energy on a delivery basis may be presently insignificant… If that is true, this is one hell of a bombshell!
The declining global net energy curve is a key factor that we should closely look into during the continuing discussion on this thread. Properly interpreting the data related to the net energy curve of all the key international players could likely provide us with an instrument to ”see into the future”… and prepare for what may be coming.
The pooling of experience gathered in terms of practical preparation by all those participating in this discussion thread will also be important. We are not all living at the same place or in the same type of environment. Pooling data about preparation and localization would no doubt help every one of us in taking related decisions that might turn out – as events unfold - to be “life saving”.
JB