Archive for the ‘A View From the Peak’ Category

Ponderings on finance, BP, and various other topical matters…

Tuesday, June 15th, 2010

There’s been a few interesting financial stories in case you’ve forgotten that the world is teetering on the edge of some major changes / failures in the currency mechanisms we have come to take for granted as being both stable and real. While the mechanics of the BP spill and attempts to fix it prove riveting reading, it’s worth a look stepping back from the live ROV footage to check out what the rest of the world is doing in the meantime.

So without further fuss, here’s a few tidbits to chew on while you contemplate where to put your retirement or kid’s college fund money…

Money, Capital, Credit, and Bubbles… and what really does happen to Capitalism when growth fails?

I don’t want to get too far into this matter here, but this first article I think really demonstrates a point I’ve come to believe explains our use of money much better than anything else can. In other words, it shows the largely illusory nature of what we believe to be a fixed thing, money, cash, banking, flow of funds, etc.

Bloomberg, Currency Collapse May Stimulate Economic Expansion, BIS Says – June 14

Currency collapses tend to spur a resumption of economic growth rather than fueling a decline in gross domestic product, according to the Bank for International Settlements.

The positive effects of a weaker currency on GDP, including making local products cheaper than imported goods, may outweigh the negative ones, such as rising inflation. Currency collapses occur when the annual exchange rate drops by about 22 percent, according to the BIS, which identified 79 such episodes, “more commonly in Africa than in Asia or Latin America,” since 1960, Tovar said.

I don’t know about you, but to me this is just weird. It’s like, we’ve created a house built on air, and when we don’t like how high or low our house is, we lower or raise it by huffing and puffing a bit (ie, deflation/inflation of money supply). Again, this is weird. I get the strong feeling I am looking at the Emperor’s New Clothes, ie, there’s actually nothing there at all in that entire global flow of funds, balance of payments, etc.

But I’ve had a sneaking suspicion for a while now that since all this finance stuff is actually just an abstraction, at some point, if the game looks like it’s about to blowup, they might just change the rules of the game. That can look a lot of ways, but it will probably have to happen more or less in relative harmony with the other major players in the first world. In other words, if everyone owes everyone so much money they can’t possibly pay it off, maybe it’s just time to start over. They won’t say this of course. And China will certainly continue on its global buying spree before those dollars lose their value.

My guess is the above story is a trial balloon for some re-evaluation of values. That certainly won’t help you any, but it might stretch this global financial collapse story out a bit longer than it should have run.

And while that story unfolds, hovering around the most elevated parts of the economic stratosphere, there’s a few guys who more or less thought they had a handle on the entire financial game, and thought they could surf any wave that came. Not a bad assumption, by the way, given past performance. I know most of these guys understand that money, capital, is primarily a tool to achieve one’s goals, but especially with Soros lately, it looks like he’s actually getting a bit worried, or confused.

Bloomberg, Soros Says ‘We Have Just Entered Act II’ of Crisis (Update2) – June 10

Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.
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How to really fix the problem of deep water drilling? Stop consuming it

Saturday, June 5th, 2010

If you don’t like the cost of deep water drilling, if you don’t like what you are seeing on your TVs, if you are shocked by the massive environmental costs of this BP Deepwater Horizon blowout, then push your representatives to establish far more powerful regulations on it. And by all means, do your part as well, stop driving so much. Less demand translates directly to less need to do deep water drilling. At least for now.

The real problem, of course, is that most currently producing large fields are in a state of decline, forcing oil companies to go offshore to get new sources of oil. Drill baby Drill simply allows a tiny bit more high risk offshore drilling to take place. Remember, initial estimates of the recoverable reserves in the Macondo reservoir (the one that is spewing out oil into the Gulf of Mexico now, that is) put them at about 50 million barrels. That’s 2.5 days supply for the USA, give or take, or about 0.6 days supply for the planet.

BP spokesman Jon Pack said it’s still possible there will be oil produced in the area. The reservoir may have held about 50 million barrels of crude, he said. www.businessweek.com

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BP Blowout video footage

Tuesday, June 1st, 2010

You can check out what BP is putting out in video and other media a their Gulf of Mexico Response section of their site (see left navigation bar for various formats available, video, image, etc). For video feeds and other video, check out their Response in Video section.

Here’s a site with multiple live camera shots from different sources, deepwaterbp.com. Same site, their wall of ROV videos (takes a long time to load, click on any video to see it full size, esc to return).

Some of these are I think windows media, not sure, some are flash.

The Stages of Denial – Adjusting to Peak Oil

Monday, May 31st, 2010

Does your head begin to whir? What about that vast pool of oil spreading at hundreds of square miles per day as I type in the Gulf of Mexico? As Dmitri Orlov reminds us, again, the phases of denial go like this:

1. denial—”We are not lost! The ski lodge is just over the next ridge, or the next, or the next…”
2. anger—”We are wasting time! Shut up and keep trotting!”
3. bargaining—”The map must be wrong; either that or someone has dynamited the giant boulder that should be right there…”
4. depression—”We’ll never get there! We’re all going to die out here!” and
5. acceptance—”We are not lost; we are right here, wherever it is. We better find some shelter and start a campfire before it gets dark and cold.”

If you need this made explicit:

1. We’re not running out of oil, we can get plenty from Deepwater, Oil Sands, and assorted other strange sources that are riskier to use than anything we’ve developed before, in one way or another. If those pesky environmentalists would just let us produce all the energy that American ingenuity is capable of, then we’d have no problems at all. Damned liberals.

2. Drill baby Drill, teach those bad Arabs that we don’t need them (ignore that we can only produce, at our currently depressed US consumption of about 19 or 20 million barrels per day (bpd), roughly 50% of our current requirements.) Open Arctic sources to drilling, anything, just so we don’t have to change. Sure, we can vote for change, but forget about actual change, that’s too difficult. Damned neo-cons, damned liberals (pick which, or both).

3. We’re in this now: once we apply the right technologies, and fix the broken oil thing in the Gulf, well then, it will all be OK, and we can commence drilling, driving, and consuming cheap plastic garbage shipped in from China.
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Big Problem – How to Change?

Monday, May 24th, 2010

Sadly, both you and I know perfectly well that the US / Euro citizen is addicted to their lifestyle, considers it natural and normal, and won’t change it until they are forced to. And the corporations have taken on so much power that it’s terrifying to watch how scared politicians are of upsetting them. Since both the population as a whole, and the corporations that profit from consumption and growth behaviors, will resist change at every significant level, there’s just not much room to see real change happening, though I’m sure we’ll hear new candidates pop up, as Obama did, spouting the words, while of course failing totally to engage in the required deeds.

But as the article Barack Hoover Obama – By Ken Silverstein (Harper’s Magazine) put it so well, there’s no real option, since there is no real power promoting the change that we actually need.

And when individuals refuse to modify their own behaviors, and insist on driving, maintaining a car-centric life (and I admit, it’s not easy living without a car in much of the United States), it’s hard to see just where changes will come from. Especially given the massive power and entrenched corporate interests of the growth based economic system we are forced to see as our only option for the future.

It will be a while longer before you read a speech like Roosevelt gave about the banksters before he was elected:

For out of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital – all undreamed of by the Fathers – the whole structure of modern life was impressed into this royal service.

There was no place among this royalty for our many thousands of small-businessmen and merchants who sought to make a worthy use of the American system of initiative and profit. They were no more free than the worker or the farmer. Even honest and progressive-minded men of wealth, aware of their obligation to their generation, could never know just where they fitted into this dynastic scheme of things.

It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over government itself. They created a new despotism and wrapped it in the robes of legal sanction. In its service new mercenaries sought to regiment the people, their labor, and their property. And as a result the average man once more confronts the problem that faced the Minute Man.

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The problems with energy transitions and the US system

Sunday, May 23rd, 2010

Sometimes someone puts things into nice, clear, simple terms, that are basically just.. .well, true. Here’s a good article from SeekingAlpha.com, Energy Transition: The Intractability of the Built Environment:

If the solution to a problem is unsufficiently scaled to the size of the problem, then at best we can say it’s a token solution. And token solutions are what the US has been trying out for 40 years, on the matter of energy. 8 billion for High Speed Rail? Sorry, but the restoration of rail in this country is an 800 billion dollar project and that would be just for the first wave. Adoption of electric vehicles, as part of some cultural need to maintain US car culture? Sure, at realistic adoption rates you might be running mostly on EVs in 150-200 years. Switch the powergrid to 100% renewable resources like Wind and Solar in ten years? Not likely. But maybe if you are willing to withdraw the entirety of US armed services from overseas, devote the entire military budget for 10 years, and match that workforce with highly skilled workers from the private sector, then maybe you can make a dent by 2020.

When a politician tells you they want to solve for climate change while investing heavily in automobiles and highways, rest assured that is decidedly unserious. When former politicians claim you can have an all renewable powergrid in ten years, that is not helping anyone. When academics tell you that we can be operating in an all renewable world by 2030, but have nothing in their model to account for the energy needed to build that new world, that is simply not good enough. Nota bene: nearly all energy transition plans and especially plans to transition to alternative energy depend on economic growth. All those models assume there will be a sufficient inventory of growth that can be redirected to a different energy architecture. As you contemplate this, also realize that to construct a lower carbon-emitting future poses a question: what is the energy source that will be used, to conduct energy transition?

“When a politician tells you they want to solve for climate change while investing heavily in automobiles and highways, rest assured that is decidedly unserious.” Yes, indeed. Decidedly not serious is exactly how I would put our current response to global warming, soon to be declining global oil supplies, coal extraction, etc.
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Fela Anikulapo Kuti – Government Magic… Authority Stealing

Friday, May 14th, 2010

Since world governments are entering into some purely metaphysical states, that are essentially exposing our modern world for the illusion it is, I thought it would be refreshing to take a look back at how an outsider from the process saw all this, some decades ago, Fela Kuti.

Government magic indeed. Debt magic. Credit card magic. Bond magic. Corporate magic. Isn’t it time to start looking for the wizard behind the curtain, pull them back a bit, and expose him for who he really is?

This is (youtube version) the verse that made me think a bit:

Chorus: Government magic.
Fela: dem go da baru (borrow) everything;
Chorus: Government magic.
Fela: dem go turn green into white
Chorus: Government magic.

Indeed… dem dey baru everything… but who is lending?

Or this, from Authority Stealing:

Armed robber him need gun
Authority man him need pen
Authority man in charge of money
Him no need gun, him need pen
Pen got power gun no get
If gun steal eighty thousand naira
Pen go steal two billion naira

Are we actually different at this stage? Borrowing from our futures to pay off bankers who are receiving record bonuses almost yearly? Time to switch magics, there are better ways forward, a magic that benefits only the magician is not a good magic, go back as far as you want, the only worthwhile magics benefit the community.

Unknown Soldier

— Fela Anikulapo Kuti

Fela: Make you no go when you hear.
Just wait there, make I tell you something

Chorus: Fela you go come again

Fela: I never come again. I stay for far away.
Make you wait till I reach where I dey go
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Orlov on Collapse – Thoughts

Thursday, February 25th, 2010

Orlov wrote a nice article, The Five Stages of Collapse about what he sees as the general tendency of collapsing societies, based on what he saw when the USSR failed. Orlov is delightfully witty in a dark sort of way.

I think he may be making a slight mistake though in thinking that the US collapse is going to look like the USSR collapse, which is what he wrote about mainly, the countries are very different in terms of the cultures, politics, social systems.

But what is not different is the fundamental requirement of our system for raw materials and resources, and the serious lunacy of believing in debt fueled and funded ‘growth’, which was supposed to replace growth based on resource exploitation, ie, manufacturing . Sadly trying to restore debt fueled growth is the method Obama is trying to keep floating, like the Bush group before him (oh, if the banks would just lend again everything would be ok…).

When growth stops in a system based on Capital and debt, ie, a system requiring growth to survive, that system will not have a neat elegant wind-down, that much you can be absolutely certain about. But I think one major difference is found in the respective histories of the US and Russia.

Russia has always been fond of oligarchs, with basically unlimited power, whether czars, Putin, Stalin, or Lenin.

The US has at least some checks and balances, and people have a certain expectation that they won’t get totally screwed by the system. Not to idealize our political process in any way, but we do have a system that, although damaged severely by corporatism, can be altered, and we have political documents, which if we follow them, are actually all the tools we need. But the people need to be really pissed off before this happens, and ready to support a party that is willing to cut off corporatism and its perks.

Canary in the Coal Mine – Airlines

Sunday, June 21st, 2009

Just a quick note, keeping in mind that we live in an allegedly globalized world, which will allegedly prove more efficient etc. That’s all nonsense of course, globalization is all about corporations moving responsibilities and liabilities (such as environmental concerns, labor costs, and so on) to where they can generate the highest short term rates of return while generating the greatest possible social disruption and global destruction in the process.

So it strikes me, what is the first thing to go when this system starts to crack due to rising resource costs and peaked production levels of key resources, like oil? Airlines, of course. So it’s not surprising to see, after a disastrous last year, that World’s airlines in fight for survival (with 9 billion US dollars in losses this past year).

Faced with their biggest crisis in history, airlines from throughout the world gathered in Kuala Lumpur to take stock and swap survival strategies.

“Numbers can tell powerful stories,” International Air Transport Association director-general Giovanni Bisignani told his audience of 500 airline representatives at their annual summit.

Airlines are expected to collectively lose US$9 billion (NZ$14b) this year as falling demand, lower yields, broken consumer confidence and the swine flu pandemic threaten to wipe out US$80b in revenue.

Those losses will come on top of last year’s US$10.4b deficit thanks to the double hit from record high fuel prices and the collapse of the world economy.

“The ground shifted and our industry was shaken,” Mr Bisignani says.

Airlines are in survival mode and in desperate need of help to see them through the crisis and allow them to emerge with a business model that delivers a financially sustainable future.

Yep. Can you say: (re)nationalized airlines? In fact, can you say: the only countries that will have any chance of controlling the bumpy downhill slide are going to be the ones where the state controls resource allocation and pricing? Watch the ‘free market’, one of the greatest pieces of nonsense ever generated as a concept in human history, start to show more and more how pathetically unable it is to actually do anything other than serve as an excuse to funnel more money to the hands of those who control it.

The Kogi Message to Little Brother

Wednesday, May 6th, 2009

This one is depressing, mainly because the Kogi people, like other native peoples I’ve heard or read, realize the problem is not at all complicated: we have violated the fundamental conditions for life continuing on the planet earth. Well, it’s also depressing because this was done in around 1990, when the early warning signs were becoming very clear to these people, who had watched the natural world for centuries, millenia probably. Now of course everything is worse, and growing increasingly bad by the month almost now.

Watch this if you don’t watch anything else. (Google Video Page)

What I really have to agree with is them calling us ‘little brother’. We are so completely arrogantly twisted in our views that we think our own ways, which are destroying the planet incredibly quickly, have anything to teach of value.

More film at nationalgeographic.com :: Keepers of the World (long flash video)

Personally, I’m getting tired of hearing people who are unwilling to engage in fundamental changes in our modern way of life talk about solutions etc when it’s those very ways of life that are the problem (you know, hybrids, wind power, high tech solar voltaic… all just ways to consume and destroy a little bit more before it all fails completely).

I’ll add a few of the better quotes from the first video, but I wanted to get this one posted first.