Wednesday, July 28, 2010

oil down economics

OIL DOWN ECONOMICS


I know that you all tune in every day not just for my groundbreaking pearls of wisdom as I faithfully regurgitate the same handful of core ideas over and over again, not only for the vast entertainment value of my caustic whit, but also because you idolize me and want to be just like me. You protest at the silliness of my primitive lifestyle, living in a barely insulated tin box in the high desert ( High Desert: A Journey of Survival and Hope ), purposefully ignoring my grand strategy of avoiding the vast sewage pond of humanity by hiding in the Great Basin center, but secretly, deep down, you are insanely jealous that I’ve found peace and contentment in my semi-solitude and my success at minimizing my desire for money. So, when I throw you a bone by describing my latest seemingly mundane activity, you clandestinely cheer and blush with envy. Don’t worry, your shameful obsession is safe with me. Here it is- I’ve just ordered two doomer fiction books. “One” by C. Williams ( One ) and “American Apocalypse II” ( American Apocalypse II - Refuge ). Once received and quickly read, I shall review them for you, my loyal minions. AAII is quite expensive at $15, a normally shamefully exploitive high price for a paperback. But I loved the first one even if it was Militia porn rather than doomer escapism, so I am more than ready to take a chance laying down that kind of coin. All so you may safeguard your hard earned money as you await my verdict. I don’t know about the other one, but it looked pretty interesting.

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Why all the noise and flash about the WikiLinks Afghan War documents? I thought I heard they were all non-Top Secret. You can be sure there is a story behind the story. Distracting us from the nuclear Iran attack, shifting attention from the continual Gulf oil leak, something. Pay no attention to the squawking. Noise makers, so you don’t hear the assassin creeping up behind you.

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You should go over to

http://americanenergycrisis.blogspot.com/

and read Monday’s article. We don’t agree on the collapse, but what he says here makes a lot of sense. In effect, slow collapse. At least until 2020 at which point the oil decline might be too deep to make an accurate prediction. He isn’t calling for an indefinite slow collapse, but does distrust all our doomer talk about a sudden “wake up the next morning to a Mad Max ( The Road Warrior / Mad Max Beyond Thunderdome (Double Feature) ) world”. Which really should be an amusement park. Mad Max World. See Max eat dog food. See gay bike riders slay innocent civilians. See evil hockey mask dude act like the new Genghis. Anyway, his article got me thinking perhaps I should elaborate on my sudden collapse thoughts. Again. As one minion stated, it is a slow collapse. Until it isn’t. My analogy is not the staircase down but the gentle river sloping down until the sudden waterfall. Not because I like the idea of a sudden collapse ( part of me does, conflicted between wanna-be warrior lust and the desire for luxury ) or because I’ve read too much doomer fiction ( I have ), but because no other explanation makes sense as to why every other civilization collapse ( David Eagleman: Six Easy Steps to Avert the Collapse of Civilization ) in history has left no solid records. I contend that the collapse was so bad that everything was destroyed except myths. I would love to be wrong, but I certainly ain’t going to bet my life on it.

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Now, as important as it is to know whether the collapse will be sudden or slow is- your strategy of incremental stockpiling and a thirty year mortgage would be useless in a sudden collapse and selling the wife and kids to move out into the wilderness fully stockpiled would be silly in a slow collapse- to some degree it might not matter too much. If we have another ten years of 7/10ths of a percent oil import decrease a month ahead of us ( as has been the case for the last three plus years ), it follows that the economic pain ahead of us will make the last few years look like the height of the Internet Bubble ( The Internet Bubble: Inside the Overvalued World of High-Tech Stocks--And What You Need to Know to Avoid the Coming Shakeout ). You lose your job, your home, your paper wealth. Everyone still eats, which is only accomplished by a combination of home gardening, ballooning Food Stamp use and cutting off food exports ( plus rationing petroleum to give fuel to the ag sector ). But everything else is going to hell. In real terms, Social Security buys less and less every month. Socialized medicine is rationed to give time for the terminals to die off without wasting resources. Hyper-inflation ( 1923 GERMANY HYPER INFLATION 100.000.000 / 100 Millions Mark very fine ) at Zimbabwe levels means food is given to the poor in pounds per coupon rather than dollar amounts. One non-critical industry after another ( airlines, travel ) is bankrupt. Local government services such as road repair and parks are abandoned. Civil servants are fired before retirement. Retired civil servants see the same worthless checks as old people. One after another overseas military installations are recalled/mouthballed. And that is all just if our oil keeps declining.

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If the derivatives ( All About Derivatives (All About Series) ) bubble explodes ( and why wouldn’t it, with a quadrillion dollars of Monopoly money? ), that pain is global. If anyone can cushion ( not prevent, just cushion ) the impact it might be China, since they can pretty much override free markets at whim. They will have the infrastructure to actually garrison Asia and strip resources to the homeland. I’m sure there are easily other black swans, from sunspot hyperactivity to tipping point in the weather or exploding incidences of plant disease. So, no, none of this is the collapse ( Collapse ). Yet. But your ability to stay in the money economy is ended. You will, if we are all lucky, still get the Roman bread and circuses to keep you alive and distracted. Free channels of digital TV ( will rooftop antennas be the next government giveaway as legions can no longer afford cable? ) and government cheese ( American cheese, with plenty of Frankenfood soy oil- and apropos to nothing, did you know Henry Ford was a big fan of soy beans substituting for dairy and such? ). You can’t decide where you live. Where to work, if you still work. Will you be forced into government concentration camps if you are homeless? How will you be able to continue to prep if you have no job or house?

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My point is that even if the collapse of civilization might be ten years away, your economic ability to prepare for it will very quickly be erased as the economic collapse ( HOMEWARD surviving the global economic collapse ) readjusts your life. Even if the collapse isn’t sudden, your shopping will cease soon. Be prepared now, with Less Than The Best. Wheat, bolt guns, junk land. A $25 corn grinder rather than a $300 super deluxe unit. Surplus guns rather than wiz bang semi’s ( also apropos to little, the local ads are selling “self loading” guns in order, one imagines, to avoid the “semi-auto” evil stigma ). You already know the drill. Prep now with Better Than Nothing rather than waiting for the best that never becomes affordable or available.
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9 comments:

I am Stan said...

"Government cheese",sounds disgusting!

BUCK SEXTON said...

Well crap! Ya'know, I take your advice and rush to prepare! And now you say I have ten years till SHTF.

The Iran thing is being mishandled in the same way JFK pussed out with Cuba. In both cases they wait till the missile system is fully operational, till they take a stand.

It just occurred to me Obama is like JFK!

A responsible administration would have launched an assault as soon as nuclear tests and or construction began.....End the eminent threat before its a threat.

Bellen said...

I don't know why I read you every day.It's not your pearls of wisdom or your caustic wit, not your regurgitation of core ideas so it must be that you give me something to think about - rather uncommon in today's world.

Now, I will admit I am envious of your living situation altho I would want something a little more substantial but still, like you, away from most everybody, rules & regs, government and improvements. In the meantime I will have to be content living where I do, keeping to myself, providing as much as I can for myself and making sure I'm not caught unawares by financial, gov't or weather catastrophes.

Anonymous said...

Jim,

Good point on the 2020 being to far to predict,I thought the same when I read it at TAEC. You notice Jeffers did not want to even go there. He knows the doomers/preppers are right it just about calling the timing. Remember once the cat is out of the bag,hoarding starts and oh boy wont that be something, at every level of society. Hell even the homeless under bridges will beating each other over cardboard boxes. The way I see it, wheat,corn, rice, pasta all have a shelf life beyond 2020. Fear not your plans are not in vain.

Lastly, 2020 is not solid as the contraction starts in ernest wars for the oil will ( Iran,NK, Vens.)will put even more pressure on the imports. I beleive once peak oil is past and is received by most countries ( not nessecarily citizens )all bets are off.


Peace

James m Dakin said...

I'm not sure we have ten years. It made sense in the stated article. My article went on that assumption- IF we have ten years before the collapse, you have less time to prepare anyway. I know you were being sarcastic, I'm just putting this out there to avoid misunderstanding. Cheers.

russell1200 said...

I read you because you are entertainingly obnoxious, funny and often intelligent.

There was a link on one of the finance posts on something like 300,000 municipal employees throughout the country likely to be laid off due to tax shortages in the coming year or so.

The derivative situation is insane. The interest rate swaps are the biggest pile of money and probably have the closest linkage to the real economy. The stories don't get much play, but a number of companies have gambled on them and gone under: and that is just the small fry.

I read American Apocalypse II in its online version. I had read the first in hardcopy. I won't prejudice or plot-spoil by saying more.

I am interested in what you think of "One", I am not at all into zombie or zombie-like (or vampire) fiction. But a well written book is still a well written book.

I think I was arguing with you earlier on slow versus long collapse, but it appears that our beliefs are closer on that one than I thought. One item I would consider to add to your scenario will be that there will be a collapse in much of the outlying communities. You are going to get a very rural (farming) community and a very urban community because the small to medium size cities and large towns will not function without gasoline to get around: they are too spread out. Fer Fal mentioned the ghost towns in Argentina that came about when railroad service to them went away. Our situation is different, but not that different.

The internet is about the only countervailing force to this that I can think of.

Anonymous said...

I'm glad to see you enjoyed American Apocalypse like me. Kind of scary I enjoy the same crap as you. No wonder I keep coming back for more.
It's good you are supporting that author by purchasing his books. But ironically, he is a blogger also, and his book is available free on his web blog. Besides free on the blog, you can also read the daily comments his readers provided as he wrote the book online, which is good stuff too. Books III and IV are also free there.
Happy reading.
VA guy

http://theamericanapocalypse.blogspot.com/

Suburban Survivalist said...

One? Unless you're into zombies, probably not going to be a huge fan of that book.

http://suburbansurvivalist.wordpress.com/2010/07/07/book-review-%E2%80%93-one/

Buffalo Survival said...

Best way to deal with them there Iranians by my reckonin is to fire a missile at em every time they open their muslim mouths. And if they complain just fire a few more at em. Maybe they'll get the idea after half of the country is destroyed or so. Course that won't be happenin because Obammy Muhammed Hussein Kennedy Lincoln Obama is one of them of the mujahadeen persuasion.