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The Peak Oil Crisis: A $4 Trillion Hole

Consumption

Last week reporters at the Wall Street Journal sat down and did some arithmetic. They looked at how much oil was selling for in the spring of 2014 (over $100 a barrel); looked at what it is selling for today (under $50); and concluded that if prices stay low for the next three years, the global oil industry and the countries it finances will be out $4.4 trillion in revenues. As these oil companies, nationalized and publically traded, will be producing roughly the same amount of oil in the next few years, the $4 trillion will have to come mostly out of profits or capital expenditures.

This is where the problem for the future of the world’s oil supply comes in. The big oil companies, especially those that export much of their production, have been doing quite well in recent years. National oil companies have earned vast profits for their political masters. Publically traded ones have developed a tradition of paying out good dividends which they are loathe to cut.

This leaves mostly capital expenditures on exploring for and producing more oil in coming years to take a dive as part of the $4 trillion revenue hit. Even if oil prices of $50 a barrel or less do not continue for the next three years, this still works out to a revenue drop of $1.5 trillion a year or about three times the planned capital expenditures of some 500 oil companies recently surveyed.

The International Energy Agency just came out with a new forecast saying that while current oil prices have the demand for oil products increasing rapidly, there is still so much over-production that the oil glut is expected to last for another year or more before supply/demand comes back into balance. The return of Iran to unfettered production would not help matters.

In looking at the next five years there are several trends or major issues that are likely to impact the supply and demand for oil. First is the recent price collapse that no longer makes it profitable to start projects to produce new oil, most of which now comes from deepwater, tar sands, or shale oil fields and is far more expensive to produce than “conventional” oil. As a result, investment in new oil production projects has dropped substantially in the last year and is likely to fall further.

On the demand side of the equation China is the biggest unknown. For the last 30 years the Chinese have enjoyed unprecedented economic growth, but recently the “world’s factory” has not been doing as well. Its government has been thrashing around wildly trying to stimulate growth and fend off a collapse in its stock market. Some believe China is a huge economic bubble that is about to collapse taking much of the world with it, and obviously reducing its ever-increasing demand for more oil.

The other 800-pound gorilla looming out there is climate change. Except for the drought in California and the storm that flooded New York a few years back, much of America and China for that matter has not been hurt badly enough by anomalous weather to reach an agreement that stopping climate change is the number one priority of all of us. Reports of “feels like” 159°F coming out the Middle East this summer have little impact on those convinced that climate change is a hoax. Should the effects of climate change worsen in the near future to the point that “do something before life on earth becomes impossible” becomes the majority perception of the issue, consumption of fossil fuels could be severely restricted. Although not widely appreciated, there do seem to be viable alternatives to fossil fuels waiting to be exploited.

The violence in the Middle East has grown worse in recent years. Although oil production in some areas has been restricted by geopolitics and violence, most of the oil continues to be produced. It is useless to talk about the next five years in the Middle East; however, we should keep in mind that there are at least a half dozen confrontations going on in the region that could morph into situations where oil production becomes more restricted.

When we net this all together, what do we have? Conventional wisdom currently says that oil prices are likely to be closer to $50 a barrel than to $100 for the next year or more. Capital spending on new production to offset declining production from existing oilfields is likely to drop still further leaving us in the situation where depletion may exceed the oil coming from new wells or fields. This is the argument that those who believe that we are at or near the all-time peak of world oil production about now are using.

The International Energy Agency says that the demand for the cheaper oil is rising rapidly, that production of shale oil currently is falling and the rest of world’s production is relatively static so we should be seeing oil prices rising again by 2017. This is where the turning point in the history of oil production could occur. In recent history rising prices have led oil producers to increase drilling for new oil production again. However the next time around, as mentioned above, there are new factors that may come into play. Will China be increasing its demand for oil in another two years? Will the Middle East still be exporting as much oil, and producing oil given the turmoil and the need to increase air conditioning? Will the world have decided the time has come to clamp down seriously on carbon emissions?

If global oil production does reach some kind of a peak this year and is lower in 2016, can it recover to reach new highs in the years following? Anything from inadequate investment stemming from persistently low oil prices to a major conflict in the Middle East could keep production from rebounding to new all-time highs. We are living in interesting times and just could see peak oil before we realize it.

FCNP



91 Comments on "The Peak Oil Crisis: A $4 Trillion Hole"

  1. JuanP on Sat, 22nd Aug 2015 12:05 pm 

    I don’t think interests can be raised right now with the economy the way it is. I believe they will keep talking about raising them, of course, but I just don’t see it happening any time soon. It would just accelerate the ongoing global economic bust. But I admit that I thought the 2008 crisis was the beginning of the end and didn’t imagine QE and ZIRP would keep things running until now, so I may be wrong again.

  2. BobInget on Sat, 22nd Aug 2015 12:31 pm 

    Shorting markets ain’t hard when a person has inside information, Rockman.

    Canadian’s are selling conventional and oil sands product for USD’s. Canadians pay for materials wages, royalties in loonies. CAD closed Friday $1.3184. It’s easy to ask Canada to stop shipping crude to the US. Killing Keystone (XL) sent that message clearly.

    Canada’s “Energy East” pipeline, when put inservice will make Canada oil independent.
    In doing so, Rockman will gets his wish. The world’s largest economy will then be dependent on our great Allie, Saudi Arabia.

    I keep pounding the table about how the US will sooner then later, lose Venezuelan imports.
    (China debt service)
    Since no one is listening, my pounding makes no sound.

    As Saudi Arabia childishly wastes its only
    resource on weapons that became obsolete
    before delivery.
    KSA is trying to Wal-Mart out Iran and US shale producers, in doing so, SA shortens lives of all its fields by overproduction. (Not to mention shortening millions of Yemeni Lives, That Matter!)

    Mexico, a net oil importer, Canada remains, until ‘Energy East’ pipeline completes, North America’s main oil resource.

    The Obama Administration showed ‘our’ cards to the public for an instant one Friday night when it
    approved Arctic drilling by Shell Oil. Drilling was approved in the world’s most environmentally sensitive region because the Administration
    is painfully aware of the true supply situation.

    Keep in mind, America’s shadow government,
    guys who decide which countries we bomb or in the old days, go to war to ‘defend’, always made up of unelected ‘Men From Exxon’.

    ‘Advising’ DoD and DoE hardly begins to cover the power of Exxon, 2015 market value, 356.5 B.
    (BP and Shell are foreign)
    Chevron: 197.4 B : 76 Billion, OXY: 56 B
    EOG one of the largest shale expert drillers has a market value of 50 billion dollars. These numbers
    are after debt.

    Yes, even a Democrat Administration who professes to believe in AGW permitted Shell to
    Arctic drill because of the profound need to supply America with more then 20.5 million barrels every friggin day.

    If the world’s military requires less oil today then at the hight of Afghanistan and Iraq, it’s because
    war itself has changed . So called ‘go fast’ fighter aircraft are being replaced by tens of thousands of drones. I’ll go so far as to ‘blame’ any oil surpluses on military drones. (A US drone killed the number two IS leader just a few days ago).
    One F/16 mission will burn more fuel then the average American driver uses in 20 years.
    Drones consume fuel about the same rate as a family car.
    America still makes tanks. Most new, never used tanks are shrink wrapped and stored for a dozen years then sent to be dismantled.
    All US aircraft carriers and submarines are nuclear powered.

    While drones use less fuel. Each fighting drone requires hundreds of technical assistants 24/7. Signals from a drone in Syria or Pakistan or Yemen or Somalia or sixty other countries. http://droneswatch.org/about/
    bounce around the planet from aircraft to land station to satellite to underwater cable to under land fiber to operational HQ’s.

    If commercial aircraft are to go pilotless, airlines will need even more personnel to baby sit each flight.

    What I’m saying, we are in an historic transitional period where robots replace some humans doing dangerous, boring repetitive labor.

    Many African, Asian, South America countries never made it to the hard wired telephone stage. Instead the developing world hop scotched directly to cell phones with internet connect.
    WE can’t even begin to calculate how much oil
    in being saved daily by wireless. Its a lot.

    Say what you want about Uber and the coming driverless electric car movement. Instead of driving around for hours looking for a parking spot we can today summon a ride by smart phone. If you share driverless cars like some places share bikes, personal transport fuel consumption will fall even more.

    As for the immediate transitional period, it’s tough going. Remember, we are still ruled by oil companies unwilling to seed market share to ANY alternatives. That includes fuels.
    Generals in the past, always fought the last war.
    That’s changing.
    Just like market ‘corrections’ like last week’s
    built on fear alone, we are not headed to the junk-yard of history, just a recycling station.

  3. Apneaman on Sat, 22nd Aug 2015 12:35 pm 

    planty, you went all the way to India and back on your self professed cultural anthropological tour and all you can tell us about that ancient and storied culture is that their GDP is booming and they all want cars? You’re a genuine Margaret Mead in the making.

  4. Apneaman on Sat, 22nd Aug 2015 12:49 pm 

    planty clings to the glut meme like a scared child clings to a teddy bear after the lights go out while half assed muttering self reassurances. Monsters aren’t real – it’s only a glut – monsters aren’t real – it’s only a glut -monsters aren’t real – it’s only a glut …………..Mommy!!

  5. waltz on Sat, 22nd Aug 2015 12:55 pm 

    “To accomplish its present balance sheet explosion they have needed to buy up a good sized portion of the world’s sovereign debt.”

    Purchasing sovereign debt is not the only way that CBs can increase liquidity. The could back all forms of debt from the open market, equity, real estate and even bypass the purchase step altogether and ctrl –p directly into bank accounts , (to corporations and/or average Joe)

    “In essence the world’s CBs are rapidly running out of liquid assets to acquire”. Not relevant when you have a printing press.

    Ultimately in comes down to ‘faith in fiat’ from the masses but I think that the sheeple are becoming MORE dependent on their faith in CBs not less. (see Jim Cramer’s recent yelling)

    Unfortunately I think we have a whole lot more printing before the faith in faith cliff arrives. Uncharted waters though, grab the popcorn!

  6. waltz on Sat, 22nd Aug 2015 1:02 pm 

    Version with spell check n:

    “To accomplish its present balance sheet explosion they have needed to buy up a good sized portion of the world’s sovereign debt.”

    Purchasing sovereign debt is not the only way that CBs can increase liquidity. They could all forms of debt from the open market and also equity, real estate or even bypass the purchase step altogether and ctrl –p directly into bank accounts , (to corporations and/or average Joe)

    “In essence the world’s CBs are rapidly running out of liquid assets to acquire”. Not relevant when you have a printing press.

    Ultimately it comes down to ‘faith in fiat’ from the masses but I think that the sheeple are becoming MORE dependent on their faith in CBs not less. (see Jim Cramer’s recent yelling)

    Unfortunately I think we have a whole lot more printing before the faith in fiat cliff arrives. Uncharted waters though, grab the popcorn!

  7. BobInget on Sat, 22nd Aug 2015 1:38 pm 

    Juan, It’s important to understand Saudi Arabia
    posing as a monarchy, is by any definition a Fascist State.
    The enemy of the hour, IS, is a self proclaimed Fascist movement in cleric’s robes.

    The former Soviet Union, Russia, has been tracking right for decades. Putin talks like a Fascist, deploys Russia’s military like a Fascist,
    hangs on to popularity (cult of the personality)
    like a typical European Right Wing pretender to democracy.

    I don’t trust articles like the one Juan linked.
    Keep in mind, Russia, under Putin, is determined to expand Russia oil markets. (I hate to state the obvious) If Russia is to replace Saudi Arabia
    as the world’s ‘swing producer’ it won’t be a bloodless coup. While truly democratic nations
    rarely if ever, go to war with each other, Fascism sees no such moral restrictions.

    Free Floating yuan doesn’t portend the end of USD supremacy this year or any year this decade. As usual, it’s all about oil. For ten years China has been rounding up all the oil it can grab
    for domestic consumption. Russia OTOH, wants to control oil and gas and flip it for profits.
    New technologies threaten old, established methods. Ask yourself, where did most ‘earth changing’ technological ‘discoveries’ come from?
    All, from democratic nations. Russians can’t make decent consumer products. The Saudis don’t even aspire to. China is making great progress but China didn’t invent Twitter.

    so there

  8. BobInget on Sat, 22nd Aug 2015 1:53 pm 

    Just read shortonoil’s glut definition. The best bit of writing a person may read all day.

  9. Apneaman on Sat, 22nd Aug 2015 1:56 pm 

    Sure Bob and when the great democratic astronauts need a ride to the space station they all have to go hat in hand to the Russians cause they are so great. You’re living in the past Bob. The only isms left are corporatism and authoritarianism – don’t be fooled by the gilded cage. Who gives a fuck about twitter (e-gossiping and mud slinging) or all the other useless E-abstracts. If Twitter is all you got left Bob then truly what a fucking sad state America has become. Take a look, most of this list of fun facts is about the good ole USA.

    Fun Facts

    http://hipcrime.blogspot.ca/2015/08/fun-facts.html

  10. Apneaman on Sat, 22nd Aug 2015 2:03 pm 

    What democracy? If anything goes your way it is only because it coincides with the interests of the elite.

    The influence of elites, interest groups and average voters on American politics

    “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence,” the scholars conclude, providing “substantial support” for the theories of economic-elite domination and biased pluralism.”

    http://journalistsresource.org/studies/politics/finance-lobbying/the-influence-of-elites-interest-groups-and-average-voters-on-american-politics

    Testing Theories of American Politics:
    Elites, Interest Groups, and Average
    Citizens

    http://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf

  11. Davy on Sat, 22nd Aug 2015 2:34 pm 

    Waltz said “Purchasing sovereign debt is not the only way that CBs can increase liquidity.” The next step Waltz is bundles of real money (you know what I mean paper money) real in the sense you can put it in your hands not like the digital liquidity they have toyed with now for several years. This money is likely going to be given directly to the sheeples. This will keep them off the streets. I am not sure what TPTB are going to do when real goods are no longer available and the money is useless.

  12. waltz on Sat, 22nd Aug 2015 3:06 pm 

    “The next step Waltz is bundles of real money (you know what I mean paper money) real in the sense you can put it in your hands not like the digital liquidity”

    Now I think they will go the other way, move away from physical cash, even outlaw it, a ‘war on cash’. Capital controls and negative interest traps require money in the system, i.e. 1s and 0s in banks. Physical cash sidesteps these desperate measures.

    Of course, as this deflationary tsunami comes assure physical cash will be the best financial defense for anyone / everyone. 3-6 months worth at home…..

  13. Truth Has A Liberal Bias on Sat, 22nd Aug 2015 3:28 pm 

    Once October hits and the loans made to and the bonds bought from LTO players go tits-up you’ll see a lot of money made by those who bet against those loans and bonds in the naked credit default swap market. It’s not a conspiracy. It’s the approved use of a financial instrument. That’s how the game is played. If KSA knew they had plans to drop the price of oil for a year or two it’s not a far stretch to think they decided to make a few bucks on Wall Street. KSA is not losing money. They’re are still selling their oil for money that it costs to produce it. They are just not making as much money as they would if the price was higher. They are spending more on their budgets than they earn in income but who isn’t? And it’s not the first time KSA has run budget deficits. In a competition between KSA, a low cost producer sitting on lots of savings, and LTO players, high cost producers sitting on lots and lots of debt, it’s not hard to see who the winner will be. Incidentally KSA decided to pull the rug out from under LTO players just before they were suspected to be peaking in production. Anyone who thinks the KSA elite is fumbling around in the dark is naive. They cultivate an image of austere religious conviction and old-timey ways, but they are far from stupid. As usual America is gonna get played. The USA has been winning at a rigged game for a longtime. And those who have a long history of winning at rigged competitions get stupid and lazy. A quick glimpse at the 17 or so candidates USA has running for President will confirm that to anyone with eyes to see.

  14. apneaman on Sat, 22nd Aug 2015 3:33 pm 

    No way will we ever see a cashless society. The bankster would lose out if that was to happen and so would their bought and paid for political puppets. The drug money alone is more than enough, but who really knows how much money from varied interests they wash? Do some research on underground economies that are all cash. If you instituted a cashless society it would crash the global economy overnight. Also, the internet could not handle the extra traffic and the build out to handle it would be too costly.

    How a big US bank laundered billions from Mexico’s murderous drug gangs

    http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs

  15. waltz on Sat, 22nd Aug 2015 3:36 pm 

    “Incidentally KSA decided to pull the rug out from under LTO players just before they were suspected to be peaking in production.”

    No rugs were pulled. They just decided that they were no longer going to sacrifice market share in order to be the swing producer on the margin. Sure, KSA played their hand well by not blinking in light of falling prices but LTO was a flash in the pan, oil patch retirement party, with or without the saudis.

  16. waltz on Sat, 22nd Aug 2015 3:55 pm 

    “No way will we ever see a cashless society”

    A dangerous assertion.

    Many governments are moving that way now and trial balloons are being floated left and right. The Greeks and Cypriots know a bit about cash restrictions. Heck you try walking into a CHASE branch in the US and asking for $5k cash…. anyone would think you are the next shoebomber.

    Now I argee that congress needs its cash for hookers and blow and it would be a devil to implement BUT the big banks have a nasty habit of getting their way. Negative interest and forced bail ins will be too deliciously tempting for the big boys when things get rough….. Never say never.

  17. Plantagenet on Sat, 22nd Aug 2015 4:10 pm 

    Short didn’t define an oil glut. He/she/it defined what a MEME is.

    The price of oil isn’t falling because of a meme.

    The price of oil is falling because there is a supply overhang due to record oil production from KSA and TOS while global GDP is simultaneously slowing, ie an oil glut.

    Traders see the oil glut and the price of oil falls on the spot market.

    Get it now?

  18. apneaman on Sat, 22nd Aug 2015 4:22 pm 

    No monocrop plant, no one gets it except you, the MSM headline writers and the rest of the corn crop. Corny denial – the worlds #1 monocrop.

  19. Plantagenet on Sat, 22nd Aug 2015 4:33 pm 

    The only people in “denial” are those folks posting here and disputing the reality of a global oil glut. KSA is pumping oil at near record levels. U.S. is also at near record levels.

    When oil production exceeds demand for a period of time, the oil market reacts to the oil glut by cutting the price of oil.

    That’s how markets work

    Cheers

  20. Plantagenet on Sat, 22nd Aug 2015 4:40 pm 

    Liberal bias has come up with a conspiracy theory blaming the Saudis for pumping too much oil. But liberal bias is too biased to see that Russia, Canada , the USA, Norway, Nigeria, Venezeula, etc etc are also all pumping full out.

    Yes, the Saudis are helping produce the oil glut —- but so is every other oil producer on the planet.

    CHEERS!

  21. Davy on Sat, 22nd Aug 2015 5:03 pm 

    Sorry, Planter, I have been telling you for months about the demand destruction going on all the while you were crowing supply overhang (planter glut). You have been so happy faced about growth recently especially China. Even today you crowed “INDIA 8% growth”. https://www.youtube.com/watch?v=oooQG9wllI0

    Now, it is undeniable just look around at the carnage in China, EM’s, commodities, and even the equity markets. How do you spell demand destruction Planter? You were too busy being glut meme’d that you didn’t see the demand destruction burning all around you.

  22. Davy on Sat, 22nd Aug 2015 5:09 pm 

    “The Seven Year Glitch” – Has The Time Come

    http://www.zerohedge.com/news/2015-08-22/seven-year-glitch-has-time-come

  23. Plantagenet on Sat, 22nd Aug 2015 5:25 pm 

    Davy

    I’m traveling in India now, not China. They are two different countries.

    Try to keep up

    Cheers!

  24. BobInget on Sat, 22nd Aug 2015 5:29 pm 

    Recon, from now on I’ll leave humor to professionals’.

  25. apneaman on Sat, 22nd Aug 2015 5:56 pm 

    The Dry Weather That’s Hitting The Tar Sands Industry Is ‘A Preview Of The Future,’ Scientist Says

    “Dozens of tar sands developers in Alberta’s tar sands have been suspended from taking water — needed for their operations — out of local rivers, after a low flow advisory was issued.
    The Alberta Energy Regulator (AER) suspended 73 licenses to temporarily divert water (TDLs) from the Athabasca, Peace, and Wabasca rivers on July 24, after unusually dry weather caused water to fall to at or below healthy maintenance levels. Now, scientists are saying this could become a regular issue for Alberta’s tar sands industry.
    Tar sands mining is a type of surface mining in which the top layer of organic matter — trees and plants — is scrapped off, and heavy crude oil is filtered from the sand and clay below. Three barrels of water are needed for every barrel of oil extracted from the tar sands, according to Friends of the Earth.”

    http://thinkprogress.org/climate/2015/08/21/3693873/alberta-drought-affecting-tar-sands-operators/

  26. apneaman on Sat, 22nd Aug 2015 6:06 pm 

    planty mono crop, don’t forget to do your deep breathing exercises while visiting China.

    Ooops there goes another one.

    China explosion: Fires at Shandong chemical plant

    http://www.bbc.com/news/world-asia-china-34029202

  27. JuanP on Sat, 22nd Aug 2015 7:29 pm 

    Bob, I only posted the article because it was mostly about oil. I don’t necessarily agree with the political parts of it, but it had some good points about the importance of oil prices and production costs which I considered worth reading. I assume that the smart readers will select the useful info contained in it and understand that some parts of it are nothing more than political opinions.

    As a rule, I tend to disregard all political and religious opinions as worthless, including my own.

  28. Truth Has A Liberal Bias on Sat, 22nd Aug 2015 7:33 pm 

    Lol look at Plabt. Telling everybody what I can and cannot see.

    Fuck off you troll. You have no input of any value. Just the same blah blah bullshit day after fucking day. If ever see your face I’m gonna shave your half your head and boot you in the mouth. Punk mother fucker.

  29. Makati1 on Sat, 22nd Aug 2015 8:27 pm 

    Apneaman, you save me from having to rebut some of the asinine comments on here. Thanks!

    A lot of proof that Americans are totally dumbed down and brainwashed about reality in the comments from many here. A few of us old guys still remember how free America was in our youth and morn the loss.

  30. Truth Has A Liberal Bias on Sat, 22nd Aug 2015 8:30 pm 

    when plant posts at 525pm on saturday it is about 3AM Sunday in India. So plant would have us believe he is India, awake at 3AM local time, and trolling on PeakOil.com

    Plant you’re a fucking goof. Get a fucking life.

  31. apneaman on Sat, 22nd Aug 2015 10:28 pm 

    In downturn, frackers turn to toilet water in drought-prone Texas

    http://eaglefordtexas.com/news/id/156325/in-downturn-frackers-turn-to-toilet-water-in-drought-prone-texas/

  32. Plantagenet on Sat, 22nd Aug 2015 10:45 pm 

    Liberal bias

    It’s easy to see you’ve never travelled. Have you never heard of time zones or jet lag? When you fly to the other side of the planet you are 10-12 hours off your normal time zone. OF COURSE you wake up at 3am—– your body thinks its 3 pm. I was up from 3-4 and then got back to sleep. Any other dumb questions?

    Jeez you are a dope.

    Hahahahahaha

  33. fat lady on Sat, 22nd Aug 2015 10:50 pm 

    Plant,next time blow it out your ass.

  34. apneaman on Sat, 22nd Aug 2015 11:12 pm 

    Mono crop plant, maybe it’s not the jet lag maybe it’s something in the air in China. Don’t worry it will be good for ya planty – put a protective layer on your lungs to help protect you from the wildfire smoke when you get back to Alaska. If you get home soon enough planty you will be able to celebrate the new all time record for acres burned in Alaska. Plant a tree in China planty, you know, to help offset the massive carbon footprint of your jetsetting…………………………………………………………………………………………………………..

    Berkeley Earth’s scientific director, Richard Muller, says breathing Beijing’s air is the equivalent of smoking almost 40 cigarettes a day

    http://www.economist.com/news/china/21661053-new-study-suggests-air-pollution-even-worse-thought-mapping-invisible-scourge?fsrc=scn/tw/te/pe/ed/mappingtheinvisiblescourge

  35. Plantagenet on Sat, 22nd Aug 2015 11:26 pm 

    @apneaman. I’m not in china. I’m in Amritsar India just now.

    You and liberal bias and anyone else who is confused should figure this stuff out. China and India are completely different countries —- different location, different flags, different languages, different history and ethnicity

    That’s why travel is so great — you get a visceral first hand understanding if the world. Remember when I was in gibralter last Xmas and reported at the beginning of the oil glut that oil tankers were storing oil there. I was doubted but a couple of weeks later the MSM reported on it and all the doubters had to est humble pie

    Ok—- im off to see the Golden Temple of the Sikhs. You have a great day too

    CHEERS!

  36. Makati1 on Sat, 22nd Aug 2015 11:39 pm 

    Perhaps Plant is like my partner who can be up at 4 AM making noodles and surfing the internet?

  37. apneaman on Sun, 23rd Aug 2015 12:25 am 

    Ok planty. In a couple of hours I’m off to hook up with a FWB I met on Plenty of Fish and we are going to lick each other silly – have a great day.

  38. Boat on Sun, 23rd Aug 2015 10:06 am 

    apaman,
    You found a good link, WTG. Grey water should always be used as a first resort if possible. Smarter regulations and tech. The future.

  39. shortonoil on Sun, 23rd Aug 2015 10:23 am 

    Purchasing sovereign debt is not the only way that CBs can increase liquidity. They could all forms of debt from the open market and also equity, real estate or even bypass the purchase step altogether and ctrl –p directly into bank accounts , (to corporations and/or average Joe)”

    Now, how exactly do you monetize a piece of Real Estate? The mortgage can be monetized, but the actual property can not. The title is held by someone else. The banks need “liquid assets” to print money. They print a dollar, and buy some asset, which is a debt, to back it up. We use a debt backed fiat currency. You are also forgetting that the CB’s are mostly privately owned banks. Every dollar that they issue is a liability against them; if there isn’t an asset to counter balance it, they go broke. It has been estimated that the CB’s are already leveraged out 50 to 100 to 1. If you think that the owners of those banks are going to bankrupt themselves to keep gas in your F-250 you are delusional. After the “liquid assets” are gone, the only other alternative is to confiscate hard assets like property. The government then has to nationalize your house, and you are instantly turned into a property less pauper!

    Your belief that the CB’s are omnipotent is misplaced. They have definite limitations, and we are rapidly approaching them!

  40. waltz on Sun, 23rd Aug 2015 12:10 pm 

    “Now, how exactly do you monetize a piece of Real Estate?. The title is held by someone else. “

    Central Banks can and do monetize ANYTHING. Print from thin air and purchase in open market. Boom. Done.

    “The banks need “liquid assets” to print money. “

    Flat wrong. CBs, any bank for that matter could use toe nail clippings as collateral, infinitely hypothecate, pull fiat from then air and purchase anything when and where they like. Standard Fractional reserve banking.

    “You are also forgetting that the CB’s are mostly privately owned banks. “

    Trust me, I did not forget.

    “Every dollar that they issue is a liability against them; if there isn’t an asset to counter balance it, they go broke. “

    All Central banks and major banks are ARLEADY ‘broke’ on a mark to market basis. You can NEVER go broke broke with a printing press however.

    “It has been estimated that the CB’s are already leveraged out 50 to 100 to 1. If you think that the owners of those banks are going to bankrupt themselves to keep gas in your F-250 you are delusional.“

    You do not fully understand how fiat currencies work if you think a CB can go broke in its own currency. It is impossible. Not sure why you feel the need to straw man me into a delusion box here.

    “After the “liquid assets” are gone, the only other alternative is to confiscate hard assets like property.”

    NOPE flat out wrong, infinite alternatives, anything/ everything can be purchased with thin air money and stashed on a balance sheet, including Yosemite National Park. Tell the greeks that hard assets can’t be monetized as the banks stash islands and historical monuments in escrow….

    “The government then has to nationalize your house, and you are instantly turned into a property less pauper!”

    What has the government to do with this? The FED is a corporation with the major banks as shareholders (at least that is the consensus, though it is all clandestine). The “government” is a branch of the FED, and is frequently monetized by big bank donations (from thin air)

    “Your belief that the CB’s are omnipotent is misplaced. They have definite limitations, and we are rapidly approaching them!”

    There is ONLY ONE LIMITATION to central banks, one.

    Faith in fiat. The sheeple either have that faith or they do not. As long as the sheeple maintain that faith then the CBs are essentially omnipotent.

    Faith is the only game in town

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