Peak Oil is You
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Page added on March 1, 2015
Oil and Money
Talking about the “concentration of wealth” is only part of the ”what’s wrong” story. The main part of the story is (1) OVERPOPULATION and (2) the decline in most natural RESOURCES.
The world’s POPULATION is 7.2 billion — three times what it was in 1950. According to the UN, the population will rise by at least 1 to 3 billion more in the next few years.
(Even here in Canada the same increase is found – Canada’s population has tripled since 1950. Yet so often I can’t get through the day without encountering someone informing me that Canada is in great danger from ”depopulation” – leading to the ”proof” that we must maintain the highest per-capita immigration rate among the leading industrialized countries.)
RESOURCES — the big one is oil (petroleum). Everything in modern civilization is based on oil. We use 30 billion barrels a year. By about 2030 production will be down to about half that. (We’re just running OUT.) That means there will be roughly half of everything else – for example, food.
Alternative energy is a complete failure, and always will be, for reasons I have explained in very clear numbers.
And all of THOSE THINGS are the problem. Politicians are just clowns, dancing on the surface of the problem.
As Jay Hanson has often said, the problem of oil decline is a problem of energy, not a problem of money. Money is only a symbol, and it only vaguely reflects the material world. Oil production and oil prices only roughly match each other, and in any case the ups of downs of production – or the ups and downs of prices – tell us very little about the long-term trends.
Blaming politicians for our economic problems is ridiculous. It’s just not true that politicians are our mothers and fathers, no matter how deeply we may have that Freudian thought embedded in our unconscious minds. Besides, we elected them, so we can only blame ourselves. We always get the government we deserve. We always get the WORLD we deserve. We have no one but ourselves to blame if we sit in on the couch, with our jaws hanging down, every time we flick on the television set and imbibe the day’s worth of government-sponsored disinformation.
Yes, it’s true that 1 percent of the world has nearly 50 percent of the world’s wealth. But the converse (?) is equally true — that if all the world’s wealth were evenly distributed then every adult would be living on only about $6,000 a year.
And then there are people who worry about whether we’ll be facing disastrous INFLATION or DEFLATION, and how one prepares for such a things. Well, for one thing, the words are misused. Think of ”inflate” in terms of balloons, for example. The words ”inflation” and ”deflation” actually refer to the government’s increase or decrease in the money supply – how much is ”printed,” so to speak. But what the average person means is ”increase” or ”decrease” in the price of goods – not quite the same thing.
However, with that above correction – either way, you can’t win. If there’s a long period of decreased prices, as happened from 1929 to 1939, during that same period there is also (after the initial crash occasioned by uncontrolled speculation) a closing of businesses and a layoff of employees. People who are laid off don’t have money to spend. So prices go down. But if you have very little money, the low prices won’t help you much.
Conversely, if there’s a long period of higher prices, then you’re still in trouble, because the prices will be higher than your budget can handle.
It used to be the case that we suffered (?) from wage-price spirals. So-called greedy unions demanded more pay, which meant retailers could jack up the prices, and so on. Those were the good old days. Nowadays we have ”stagflation” – a stagnant economy (less hiring, less pay, etc.) coupled with higher prices. Simple and straightforward, yes? I didn’t think so.
So then we’re told to invest in gold and silver. One question – if there’s any trouble at all, the banks lock their doors, and since you keep those metals in the bank (well, OK, an old sock is a maybe, but not a big one), then how are you going to get through the doors?
Next question – when you hop off a freight train near a hobo jungle, and come across a dozen people crouched around a camp fire, each waiting for a meager cupful of stew from the pot hanging over the fire, what are the chances that someone will be willing to take your bag of gold in place of a cup of stew?
Things are happening already. I’m amazed at how many clothing stores have sales these days, with lots of clothes at half price. I guess the sales are partly because business is bad — in fact, I hardly see any customers.
I’m also amazed at how many stores here in Kingston, Ontario are just plain GOING OUT OF BUSINESS. The “fashionista” area in Kingston is Princess Street — the equivalent of Rue Ste Catherine in Montreal, though much smaller. But here in Kingston I see endless signs saying “For Lease” — meaning “empty, closed down.” Sometimes there are six or seven empty stores in a row.
Yet most people keep living in their dreamland. The politicians tell them that the economy is booming, and that pretty soon we’ll all be flying around in tiny private helicopters — remember those images from the 1950s? But people believe everything they’re told.
It’s the same in Germany. My friends there, even people with high-status jobs, are chopping their expenses, cutting down on everything. And by the time they’ve paid for taxes, pension, insurance, etc., there’s hardly enough left over to buy food.
There are endless debates about ”stocking up.” I’d say good-quality hiking boots for a start. Any clothes in general, especially for winter. Any kind of hand tools — from kitchen to carpentry to gardening. If you have a gun permit, ammunition will be of great practical value and a sure investment. If you don’t have a gun permit, get one (or find the nearest legal equivalent to guns, and become an expert on that). Books will be usable and will make good trade items, though not paperbacks (because they fall apart). According to Richard C. Duncan, the first highly visible lurch in the Big Collapse will be serious failures of electricity. So look for anything that can replace your electric and electronic gadgets. Think hard, back to about 1970, when students were literally burying slide rules in the schoolyards, as they symbolically welcomed the coming Space Age. Or the Atomic Age. Or whatever Age it was supposed to be.
20 Comments on "Oil and Money"
Makati1 on Sun, 1st Mar 2015 9:16 pm
Good advice. Signs of the times…
“…every adult would be living on only about $6,000 a year.”
So what? You can live quite well on $6K/yr. Most of 7 billion humans manage to do so. Some on as little as $1K/yr each. After all, that is $24k/yr for a family of 4. About today’s living standards in most countries, excluding the top 10%.
Perk Earl on Mon, 2nd Mar 2015 2:42 am
6k a yr.?
On average our expenses for two months is 8k and this past two months it was 11.4k due to unexpected dental and truck repairs. Generally we have to make over a 100k a year to pay bills and have what’s needed to pay unexpected bills, travel and a week’s vacation somewhere. But to get ahead we need north of 100, like 125-150k a year, to get solar, pay down the mortgage more than regular mtg. payments, make other improvements or take a vacation that is over 3k miles by jet, have a rental car and stay in a decent VRBO with AC.
I don’t know what we’ll do when shtf. Just hoping before that happens to pay off the mortgage, get off the grid and stuff away tons of food and other needed items. But I’m sure whatever money or silver we are able to save will dwindle fast post collapse.
peakyeast on Mon, 2nd Mar 2015 4:12 am
I live exceptionally cheap compared to the average citizen in my country.
Our minimum expenses per year (3 people):
1. About 3000$ in food. – Can be cut by maybe 50% if cheapest intake of nutrients is considered.
2. About 3000$ for car, insurance, house taxation and so forth. Cannot be reduced further without losing vital conveniences / services.
So 6k a year AFTER taxes could be possible, but then there must be no expenses for doctors, medicine or anything else.
There is also the local pricing to be considered: Denmark is very expensive in many way – food is on average 30% over EU levels. So the 6000$ would last much longer in say philipines.
Makati1 on Mon, 2nd Mar 2015 5:40 am
Peaky, I can give you an idea of prices here in Makati, the financial/business district of Manila.
Rent for a one bedroom condo for 3 with water, security, maintenance and a nice commons with a pool, gym and playground on the 8th floor: $ 570/mo.
(Two bedrooms would add about $120/mo.)
Electric including cooking, fridge and A/C: $ 160/mo. (No heating ever.)
Food for 3 on an American diet: $350/mo.
Doctors/specialists are equal to the US and cost $12-$15 per visit, total.
Dentists are $12 per visit (root canal w/crown is about $150 each, total)
Men’s haircuts: $ 1.25 and better than I got in the US for 10 times the amount.
Public transport is plentiful and cheap so no car needed. We can go from our condo to the farm for $5 each way in an air conditioned bus with movies. It is ~80 miles+ each way. Driving a car would cost at least $80 round trip at $ .50/mile. I can hire a car and driver to go there and stay over-night for less than that.
Movies: $ 4.50 and we see the new ones before they are out in the US.
Cost of living is one of the reasons I like it here. Even factoring in the $1,250 to $1,400 it costs to go round trip to the US each year, it is still cheaper than living in the US. (Yes, my ticket this year cost $1,243 round trip to PA from Manila.)
BTW: It was 88F and sunny here today.
rockman on Mon, 2nd Mar 2015 6:42 am
M – “So what? You can live quite well on $6K/yr.” OK but how’s is going to pay those folks $6k/yr: someone who risks their money to start up a business if they’re only going to make $6k/yr. Folks will buy stocks and bonds to finance companies and make a meager return on those investments?
I know it’s an old joke but it’s still relevant: Everyone who gets a paycheck signed by someone who isn’t very well off raise your hand. A good reason there’s a concentration of wealth: the world is supported by business worth 100’s of $TRILLION collectively…how many low income people do you know that own a company worth $millions?
We can debate till the cows come home how much the employers of the world should make from their ownership of world’s businesses. But you can’t change the reality that the poor don’t own the source of income for billions of the planet. Thus there will always be a huge gap between the two categories. Even many entrepreneurs that produce on their products wouldn’t earn anything if their products weren’t bought by the distribution and retail sales companies.
Davy on Mon, 2nd Mar 2015 7:13 am
Mak, you are always bragging on the P’s like the 100MIL in the space of Arizona does not factor. You fail to realize when BAU dies the food imports stop. The AG inputs stop. All those factories making Barbie dolls stop and those people have nothing to do. The P’s is rank 170 out of 172 on the global environmental index. AGW is slated to hit the P’s the worst of any country. Typhoons will ravage the P’s with no rebuilding to happen. I see nothing smart about the place. In fact I would call it a location with no future. After the crash of BAU and massive die off the place may be a refuge if AGW does not make it inhabitable.
Davy on Mon, 2nd Mar 2015 7:21 am
Article said “According to Richard C. Duncan, the first highly visible lurch in the Big Collapse will be serious failures of electricity”.
I have mentioned this numerous times. The grid will destabilize as our foundational commodity oil depletes. This is a very important indicator of a collapsing BAU. If this happens slowly over time in a bumpy descent you will realize the important of your small scale AltE system if you have one. A grid that just stops suddenly on the other hand is going to likely be a mad-max-athon. Lights are highly important for night productivity. We can live without so many electrical gadgets but lights are difficult to live without and candles burn up. Think about this. A small system that only runs lights or can charge batteries to run lights is going to be a priceless system to have in a unreliable grid.
Davy on Mon, 2nd Mar 2015 7:33 am
Mak said – “So what? You can live quite well on $6K/yr. Most of 7 billion humans manage to do so. Some on as little as $1K/yr each. After all, that is $24k/yr for a family of 4. About today’s living standards in most countries, excluding the top 10%.”
Mak is so full of cat piss. How did we get to 7BIL people except with a system of BAU driven by a globalism of development? Tell me how everyone on $6/yr is going to make that happen? No, BAU globalism is a product of ever increasing technology and development from a concentration of capital and technology increasing wealth and growth. The population of 7BIL is completely reliant on BAU and BaU’s foundational commodity oil “PERIOD”.
So when you hear the Makster hoot and crow about how the west overconsumes and the east can make it on $6K/yr you have to sniker. The reality of the situation the world is in overshoot with consumption and population. Asia is in both conditions and accelerating the destruction of their sustainability and resilience by destructive development, useless export driven industrialization, and dangerous mega urbanization. The west is in consumption overshoot but at least the population is in broad based decline. The rich west also has the mega urban areas with no future but they can depopulate into the countryside far better than the vastly larger Asian populations.
marko on Mon, 2nd Mar 2015 7:43 am
We always get the government we deserve
Excellent article
GregT on Mon, 2nd Mar 2015 8:55 am
“We always get the government we deserve”
When one considers the fact that the average IQ in NA is 97, it shouldn’t come as much of a surprise as to why our governments are so inept.
Also a very good reason why democracies will never work.
Kenz300 on Mon, 2nd Mar 2015 9:48 am
The least educated people have the most children…
The poorest people have the most children………
conversely
The most educated people have the least children……..
The wealthiest people have the fewest children……………
Hhhhhhhmmmmmmm seems to be a trend here………
Apneaman on Mon, 2nd Mar 2015 10:19 am
The most educated people use 80% of the worlds resources. Obviously you are not all that educated Kenz or if you are you are not using it. It has been known for some time that the wealthy nations use the majority of the worlds resources and therefore are the most responsible for the eco destruction. Your eco footprint is probably equivalent to a african town you self important little prick. Still not over yourself eh?
Perk Earl on Mon, 2nd Mar 2015 1:56 pm
“Rent for a one bedroom condo for 3 with water, security, maintenance and a nice commons with a pool, gym and playground on the 8th floor: $ 570/mo.”
Thanks for the info. regarding expenses in your part of the Philippines. Great price on housing and other expenses. Will keep that in mind – who knows if I will need to play that card later on. Only trouble I’d have is the temperature. Not very good in warm, humid weather unfortunately.
apneaman on Mon, 2nd Mar 2015 4:55 pm
Canada’s population has tripled since 1950. That’s right. We are now up to a whopping 35 million people in the second biggest country in the world. Climate change will bring plenty of people here in the next decade or two. The American South West and Mexico will be depopulated. Every thing is going to change soon.
Did climate change help spark the Syrian war?
http://phys.org/news/2015-03-climate-syrian-war.html#inlRlv
Makati1 on Mon, 2nd Mar 2015 6:56 pm
Perk, temps here range from 70s at night to upper 80s during the day. If you are out, you don’t notice the humidity. There is always a breeze going through open windows.
If you live in the Baguio area north in the mountains, it is about 5-10F cooler most of the time and less humidity. Probably cheaper costs also. I have only visited there twice, but it is very nice. That is the Summer Capital of the Ps where a lot of Filipinos go in the summer to ‘cool off’. They also have a retirement plan for those who want to retire here. Check it out here, if interested.
http://www.pra.gov.ph/
Go Speed Racer. on Mon, 2nd Mar 2015 11:31 pm
Kenz is right.
Sleep Apneaman
is wrong.
GregT on Mon, 2nd Mar 2015 11:52 pm
Go Speed Racer,
Please do expand on your ‘argument’, because from my understanding of our situation, Apnea is entirely correct. I would love to hear your view on how you believe that he is wrong.
apneaman on Tue, 3rd Mar 2015 12:20 am
Hey speed racer, do you know who works for almost nothing so you can have your computer, smart phone, tablet, etc? It’s that big population of baby makers you and kenz like to blame so you don’t have to look at your giant eco-foot print. This goes for most of your consumer goods you feel so entitled to. If all the middle class white folk disappeared tomorrow that would reduce the majority of environmental destruction on this planet. Oh and the solar panel mining and manufacturing is about as toxic as it comes.
http://thecnnfreedomproject.blogs.cnn.com/2013/06/26/child-miners-face-death-for-tech/
http://news.nationalgeographic.com/news/energy/2014/11/141111-solar-panel-manufacturing-sustainability-ranking/
BobInget on Tue, 3rd Mar 2015 10:19 am
Apneaman never missis his nail.
In reference to our lead article.
(for rent!)
On line shopping, replacing bricks and mortar. Sears, “Where America Shops”, too late with serious, aggressive, on line presence. When Sears goes bankrupt it won’t mean America’s economy collapsed. When someday Amazon or Netflix are replaced by newer technology it won’t mean they or FaceBook or Twitter or Salon or Huffington Post did not, in their day exert novel changes on how we buy clothes,
see movies, get our news, communicate.
Even here on these pages we see the same
screen and actual names persistently.
What we should be doing is encouraging
mass movements instead of chatting up
discontent or doing a 21st century versions
of stocking back-yard fall-out shelters.
Thoughts:
When the minimum wage is one dollar an hour,
(Nicaragua) almost everyone lives on $6,000
dollars a year. In Haiti there is NO minimum wage. In Honduras men fill pot-holes with dirt or garbage, surviving on tips begged from passing motorists. Venezuelan Oil workers,
ones that haven’t exited to Alberta have lowest pay in the Hemisphere.
Low pay, high inflation, good news for Canadian oil companies and Canada.
Bad news for Venezuela.
Kenz300 on Tue, 3rd Mar 2015 12:12 pm
Every additional child a family has leaves a smaller amount of resources for each child……..
They keep cutting up the pie into smaller pieces until the family starves to death…….