Monday, August 06, 2007

Let them eat cake.

The first thing that caught my eye today was this, on the Oil Drum:

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DrumBeat: August 6, 2007

Posted by Leanan on August 6, 2007 - 9:02am
Topic: Miscellaneous

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Peak Oil is Here

The world’s most respected journal of economics has now officially acknowledged the advent of peak oil, validating (finally!) what we’ve been saying for years.

In a July 19 article, the venerable Economist cut straight to the point:

“The world is consuming more oil than it is producing.” --The Economist, July 14-20 print edition.

...Some observers such as Kenneth S. Deffeyes, Matthew Simmons, and James Howard Kunstler believe that because of the high dependence of most modern industrial transport, agricultural and industrial systems on inexpensive oil, the post-peak production decline and possible resulting severe price increases will have negative implications for the global economy.

Talk about understatement!

There's more… (2562 words) | Comments (68) | Permalink | Without comments

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I don't need to click the "there's more" link to know what the article surely says. Many of you may know, too, But for the sake of John Lott and many other head-stuck-in-the-sand globalists out there, let me tell you.

Peak Oil means that we CANNOT produce enough oil, either due to technological limits or due to accessibility limits, to meet our needs. Saudi Arabia, Mexico - all of the places that usually sell oil to America are pumping as fast as they can and are still showing net losses of production in the 6% range annually for the past two years, and that figure is expected to get worse.

There have been articles recently that Mexico's production figures are going to crash through the floor long before earlier predictions had hoped - and Saudi Arabia is pumping so much salt water into their oil fields to try and flush out more product that some geologists have speculated they could erode away the rock and cause unpredictable widespread sinkholes and other ugly surprises. Growing economies such as India and China who aren't stupid enough to gut their manufacturing base can outbid us EASILY for the available oil production. They have REAL wealth, not just worthless paper money. (I hope you don't think the two are one and the same, as Lott seems to.)

So what happens then?

Well, class, they get the oil and gasoline, and we don't - that's what happens. Their factories and cars keep running, our cars sit in the driveway rusting for lack of affordable fuel - or because the government needs it and simply allocates it all for themselves, which is a very high probability. They military has to have gas - you don't. It's that simple. Whatever the US buys will go for military and government purposes, and MAYBE fire, police, and ambulances if we're lucky. And if the oil companies decline to sell it to the government at a reasonable affordable price - well, class, guess why you don't hear any ringing denunciations of the president of Venezuela coming from our government? It's a viable option, and one they will not be afraid to take if need be (and need will be, sooner or later).

What does that mean for all you saps out there in suburbia?

Well, Lott and his cronies think "the market" can pull a few billion years worth of stored solar energy out of its collective posterior. They think technology and energy are interchangeable, apparently not having had any physics classes in their globalization curriculum. They think ethanol or biomass or hydrogen will produce enough BTU's to equal that of petroleum. But anyone who thinks that is an idiot. You would have to use every square inch of arable land in this country to grow enough biomass to run all the private automobiles - not even counting commercial vehicles. (And where, exactly, is food going to grow in that case?)

In real life, peak oil means you're going to have to walk to work, and walk to get your groceries, and walk to get your groceries back home, and walk to school, and walk to the pharmacy - since most towns and cities have made no effort whatsoever to put in the electric trolleys and streetcars you will need in all your neighborhoods, much less insisted on the nuclear power and solar collectors and wind turbines to make it all run. (Don't take my word for it, either - suburbia is dead and just doesn't realize it yet.)

What?

What do you mean, that's five miles away to the nearest big box shopping center?

Ok, well, so what? Deal with it. It's not my fault you moved to a place with no neighborhood grocery.

And it's certainly not my fault you bought a house that's not even in the same county where you work. You did that to yourself.

And guess what else? Since Lott and his idiot friends have arranged for your food to be shipped an average of 1500 miles to your grocery store, the price of your groceries is going to shoot through the roof, since somebody has to pay for all that hyper-expensive gasoline to ship you your food from at least three states away, if not from halfway around the world. So you have a choice, you can buy food, or you can buy gasoline to get to work and shopping. Pick one.

I predict an immediate bicycle shortage, and a shortage of baskets and totes for them, too. Even the price of pedestrian drag-along wheeled shopping bags will probably quadruple overnight. So good luck with that - if you haven't got some already you're probably not going to be able to get them. Maybe you can rig up your kid's little red wagon. What? Don't have one of those either? Gee, you're screwed.

And let's not forget old aunt margaret or your elderly parents, who can't even drag those wheeled shopping bags. Not only are you going to have to get your supplies, but theirs too. Yep, that means they'll probably have to move in with you - just like in the old days, before people dumped their elderly relatives into holding pens so they wouldn't be a nuisance to you while you waited for them to die. I'll bet you're looking forward to that, aren't you? And your unwed younger sister and her kids, too - don't forget you'll have to squeeze them in somewhere, since there's no way in heck that government welfare is going to keep up with the cost of food and gasoline.

The good thing is that suddenly locally made items will be way, way cheaper than imports - while they last. The bad thing is that most of the stuff we use everyday isn't made locally or even in the US anymore. Too bad. Since your great "service industry" job doesn't pay you a living wage even before gas went through the roof, I have no idea how you're going to afford to live now. Continuing to try and live on credit cards isn't very smart. Most likely you'll have to do some economic triage - you know, getting rid of all that stuff you don't really need to live on, like internet, phone service, cable/satellite, lawn service, laundry service, dry cleaning, sports, music, movies, television, maid service, etc. What? That's what you do for a living? Ooooooh, that's too bad. People who can hardly afford food certainly can't afford to hire other people to do their chores for them, nor can they afford expensive entertainment. So much for your "service industry" job - I guess you're out of luck.

My 13 year old son is watching the news and some CEO-guy on Fox just said that "the mortgage crisis is just about over with," at which point my son says, "Mom, did you hear that? This guy is crazy." Even my second-youngest child knows that this guy is lying through his teeth to try and prop up the stock market and keep people trapped in their corporate fantasy land of unlimited consumption of goods but no living wages with which to buy things.

That's how those poor buggars who got fooled into taking out those ARM's got trapped. Less than half of the flaky adjustable-rate mortgages have reset so far - "we're not even half way there," my son shouts to the TV. Too bad the only honest people in this world are idealistic 13 year old youths - if you believe people like Lott and this CEO-guy, you're in big trouble. Look how far out of whack the home value chart is (over there on the right side of my blog) - home prices will have to fall some 40% more to reach a reasonable level compared to historic norms. We are nowhere near out of the real estate crisis yet.

But wait, it gets worse. What happens to your suburban property that is miles away from groceries and jobs when you can't afford the gasoline necessarily to live there? Think you're going to be able to sell your house? Ha! You and all the millions of other geniuses who bought out there? If you think the real estate market is flooded with foreclosures now (up over 100% from last year), you just wait. You haven't seen anything yet.

And while you're over there in the charts, look at the affordability chart (prices to income ratio). See where we are now in 2007 - the WTF zone? How much more abuse can your budget take? Because a lot more abuse is coming, class. A great deal more.

But hey, Lott says you can just get a second wally-world job, or maybe a third, since you may already have two - how you're going to GET there he has no idea. And look, Lott says we have the best health care in the world, so when you have a heart attack from the debt, poverty, and stress you can look longingly at the rich people, the CEOs who can actually afford medical care, as you're dying - that or you can go bankrupt trying to stay alive and lose your home, too, since you have no insurance at either of your "service" jobs - pick one.

I am nursing a very evil thought that it would be nice to see Lott lose his job and be stuck working at Meijers, right about the time that gasoline hits $10 a gallon. Let him eat cake.

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