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Is fast crash likely? Pt. 9

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Is fast crash likely? Pt. 9

Unread postby evilgenius » Sun 11 Feb 2018, 12:32:39

Or, maybe, the problems taking place lately in the markets have more to do with a calcified approach toward US Government spending that insists that the country needs the huge military it has, or an even bigger one. I'm always amused to see how people who need things like healthcare are told they can go and die in a ditch while money spent on violence is never questioned. The government needs to sell bonds to finance this worldview. To sell those bonds they have to offer higher interest rates.

This thread is full of interesting speculation regarding paradigm shifts. I'll add another one, that military dominance is close to redefinition. I'll put it this way, what use is that huge military when equal or greater force projection can be gotten with forty or so hypersonic(space plane) drones that can drop into a country from half way across the globe and completely destroy an enemy's air defenses in minutes? I don't suppose those drones will cost nearly as much as what it takes to accomplish that same thing costs now, nor as much as the F-35 based future that the Navy wants.
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Re: Is fast crash likely? Pt. 9

Unread postby onlooker » Sun 11 Feb 2018, 14:33:41

But higher interest rates will crush the markets. And with that confidence. And that could be utterly disasterous for a world which now needs and requires prodigious amouns of lending to stay afloat and attain the illusion of growth. It also needs confidence to avert a chain reaction meltdown in all that Debt that sloshing around ie. 233 Trillion or so. If Short and his Etp is even remotely correct we are headed for a financial cataclysm. As that would mean that any manner of attempting to prop up the System would crash headlong into realities which couldd not be hidden or ignored. Principally, that the world is bankrupt and that growth as we have known it in modern times is NOT returning.
The Big Economic Plunge is approaching
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Re: Is fast crash likely? Pt. 9

Unread postby vtsnowedin » Sun 11 Feb 2018, 15:43:56

onlooker wrote:But higher interest rates will crush the markets. And with that confidence. And that could be utterly disasterous for a world which now needs and requires prodigious amouns of lending to stay afloat and attain the illusion of growth. It also needs confidence to avert a chain reaction meltdown in all that Debt that sloshing around ie. 233 Trillion or so. If Short and his Etp is even remotely correct we are headed for a financial cataclysm. As that would mean that any manner of attempting to prop up the System would crash headlong into realities which couldd not be hidden or ignored. Principally, that the world is bankrupt and that growth as we have known it in modern times is NOT returning.

Interest rates have been kept artificially low for years and a return to normal rates will not cause a catastrophe. That the world is bankrupt is a fiction as for every borrower ,private or government, there is a lender and if the borrowers don't pay the lenders will seize the collateral and be the new owner of the worlds assets.
But of course if you believe oil will go to below $20 by 2020 you can believe most anything.
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Re: Is fast crash likely? Pt. 9

Unread postby BahamasEd » Sun 11 Feb 2018, 16:04:01

Interest rates have been kept artificially low for years and a return to normal rates will not cause a catastrophe. That the world is bankrupt is a fiction as for every borrower ,private or government, there is a lender and if the borrowers don't pay the lenders will seize the collateral and be the new owner of the worlds assets.


That's a statement that's so wrong!

what asset can you seize that backs a student loan? ($1.48 trillion)
what asset can you seize that backs a credit card debt? ($953 billion)
who pays the loss when the asset seized is worth less then the loaned amount plus the cost of seizing and reselling?
Government debt is by definition unsecured.
The total energy cost of producing and delivering a gallon of gasoline to the end consumer must be less than the energy in a gallon of gasoline for it to be commercially viable.
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Re: Is fast crash likely? Pt. 9

Unread postby vtsnowedin » Sun 11 Feb 2018, 16:21:30

BahamasEd wrote:
Interest rates have been kept artificially low for years and a return to normal rates will not cause a catastrophe. That the world is bankrupt is a fiction as for every borrower ,private or government, there is a lender and if the borrowers don't pay the lenders will seize the collateral and be the new owner of the worlds assets.


That's a statement that's so wrong!

what asset can you seize that backs a student loan? ($1.48 trillion)

You attach ten percent of their income for as long as it takes.
what asset can you seize that backs a credit card debt? ($953 billion)

A bit tougher but cut off all their credit until they pay up and payments will come in.

who pays the loss when the asset seized is worth less then the loaned amount plus the cost of seizing and reselling?
The stupid banker that didn't require sufficient down payment to prevent that possibility.
Government debt is by definition unsecured.

The line backed by the full faith and credit of the government should be changed to "backed by the full ability of the tax payers to pay."
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Re: Is fast crash likely? Pt. 9

Unread postby pessimisticoptimist » Sun 11 Feb 2018, 20:22:12

So you don't believe in bankruptcy VT?
You are also assuming that there will plenty of work available that allows for repayment.
In a shrinking economy that will not be so easy.
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Re: Is fast crash likely? Pt. 9

Unread postby AdamB » Sun 11 Feb 2018, 20:41:08

asg70 wrote:Ah, Gail Tverberg. Such a compelling appeal to authority.


About as far from the truth as it gets, but ralfy fell for the LATOC gibberish, so he is a sucker for anything, usually the more looney tunes the better.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 9

Unread postby AdamB » Sun 11 Feb 2018, 20:47:57

Yoshua wrote:Another prophet, White frm chief economist at BIS:

"All the market indicators right now look very similar to what we saw before the Lehman crisis"

Only this time the debt to GDP ratio is worse and the net energy from oil production is lower. The stock market started to fall apart after oil prices hit only 66 USD.


A) Things always look similar to <fill in the blank>, for people who wanting to claim a window into the future.
B) Net energy didn't matter before, it still doesn't.
C) The stock market didn't fall apart because of oil prices.

Anything else you want to remain permanently uneducated on, and D), is this a habit of yours only in web forums, or do you do things like this in real life as well?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 9

Unread postby Outcast_Searcher » Sun 11 Feb 2018, 22:58:00

AdamB wrote:
Yoshua wrote: The stock market started to fall apart after oil prices hit only 66 USD.


C) The stock market didn't fall apart because of oil prices.

Anything else you want to remain permanently uneducated on, and D), is this a habit of yours only in web forums, or do you do things like this in real life as well?

The stock market didn't "fall apart" (or at least not so far). It had a quick 10% or so correction, which is pretty commonplace, and not at all surprising after the massive largely uninterrupted gains the past couple years.

...

And even if we have a recession (no real sign of that yet in the short term) and the stock market falls roughly 40% or so in total, so what? (At that point, it might begin to look like the beginning of a long term buying opportunity, depending on what things look like at that point).

So much fishing for short term good reasons for doom. It's like these people (fast crash doomers) have nothing productive to do.
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Re: Is fast crash likely? Pt. 9

Unread postby Yoshua » Mon 12 Feb 2018, 02:51:05

The economy couldn't handle 66 USD oil. But just keep on counting those barrels, nevermind how much energy it takes to produce them.
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Re: Is fast crash likely? Pt. 9

Unread postby onlooker » Mon 12 Feb 2018, 03:54:01

Yoshua wrote:The economy couldn't handle 66 USD oil. But just keep on counting those barrels, nevermind how much energy it takes to produce them.

Net energy didn't matter before, it still doesn't.


They think Net Energy doesn't matter and that 233 trillion dollars in DEBT doesn't either. And that Wall St still has connection to Main St.
I wonder if they also believe in Santa Claus and the Easter bunny :lol: :lol: :lol:
The Big Economic Plunge is approaching
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Re: Is fast crash likely? Pt. 9

Unread postby Cog » Mon 12 Feb 2018, 06:25:50

Much like you believe in sub $40/bbl oil this year onlooker. Santa won't be bringing you that gift. Tick-Tock.
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Re: Is fast crash likely? Pt. 9

Unread postby vtsnowedin » Mon 12 Feb 2018, 07:01:45

pessimisticoptimist wrote:So you don't believe in bankruptcy VT?
You are also assuming that there will plenty of work available that allows for repayment.
In a shrinking economy that will not be so easy.

Bankruptcy is real enough but default rates are a fraction of the total. It is the total and sudden worldwide collapse people keep predicting I find extremely unlikely.
As to the availability of work, what job that needs doing today won't need to be done after a recession? The crops won't grow themselves and the roads will still need paving etc.
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Re: Is fast crash likely? Pt. 9

Unread postby Cog » Mon 12 Feb 2018, 09:02:23

Doomers are of the belief that everyone just quits working and huddle down at home and wait to starve.
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Re: Is fast crash likely? Pt. 9

Unread postby asg70 » Mon 12 Feb 2018, 10:05:27

Yoshua wrote:The economy couldn't handle 66 USD oil. But just keep on counting those barrels, nevermind how much energy it takes to produce them.


You just go ahead and start waving the "peak oil caused the market correction of 2018!" flag for the next 10 years...as BAU continues apace. I mean, since the "peak oil caused the credit crisis" meme worked so well for the previous 10, why mess with a winning talking-point?

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“If and when the oil price skewers for 6 months or more substantially above the MAP, then I will concede the Etp is inherently flawed"
--Onlooker, 1/1/2018
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Re: Is fast crash likely? Pt. 9

Unread postby dirtyharry » Mon 12 Feb 2018, 11:27:18

vtsnowedin wrote:
BahamasEd wrote:
Interest rates have been kept artificially low for years and a return to normal rates will not cause a catastrophe. That the world is bankrupt is a fiction as for every borrower ,private or government, there is a lender and if the borrowers don't pay the lenders will seize the collateral and be the new owner of the worlds assets.


That's a statement that's so wrong!

what asset can you seize that backs a student loan? ($1.48 trillion)

You attach ten percent of their income for as long as it takes.
what asset can you seize that backs a credit card debt? ($953 billion)

A bit tougher but cut off all their credit until they pay up and payments will come in.

who pays the loss when the asset seized is worth less then the loaned amount plus the cost of seizing and reselling?
The stupid banker that didn't require sufficient down payment to prevent that possibility.
Government debt is by definition unsecured.

The line backed by the full faith and credit of the government should be changed to "backed by the full ability of the tax payers to pay."


If only pigs could fly .Keep dreaming .
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Re: Is fast crash likely? Pt. 9

Unread postby Yoshua » Mon 12 Feb 2018, 12:44:54

Another prophet, Peter Schiff: "But they [the Fed] can’t tell the truth that it’s really a bubble, and if we raise rates, we’re gonna prick it."

"Trump is going to get blamed when the economy tanks because the media has already decided that they are on the side of socialism. When all of this happens, prepare for the free market (which we don’t have) to be blamed and prepare for the tax cuts to be blamed.  This will pave the way for Communism."

For a capitalism the worst nightmare is communism...but we all on this site of course know that this will end in an apocalypse.

:)
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Re: Is fast crash likely? Pt. 9

Unread postby Yoshua » Mon 12 Feb 2018, 15:17:28

I'm not the smartest atom on this block. I make a lot of mistakes.

I for example now understand that it's possible to have an EROI of 100:1 even if only 80% of the energy content in a barrel is turned into liquid fuels, if it takes only 1% of the energy content of the liquid fuels to produce them and the side products.

I guess we all agree that it takes energy to produce petroleum, but we don't agree on how much energy it takes to produce the close to 100 mmbpd today.

But to say that it doesn't matter how much energy it takes to produce those barrels is just fucking dumb.
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Re: Is fast crash likely? Pt. 9

Unread postby asg70 » Mon 12 Feb 2018, 15:56:35

Yoshua wrote:But to say that it doesn't matter how much energy it takes to produce those barrels is just fucking dumb.


It does matter, but reel proof of thermodynamics in the end is whether BAU continues apace. The entire economy is a pyramid that sits on top of natural resources. We're continuing to eat up those resources way faster than the rate of replenishment, which is not good, but we have not reached the point where we hit rock bottom and store shelves start going empty. Therefore the system, extractive as it may be, unsustainable as it may be, right NOW, TODAY (a concept doomers struggle mightily with) is still net positive, regardless of what the monetary system says as far as debt, GDP, etc... goes.
“If and when the oil price skewers for 6 months or more substantially above the MAP, then I will concede the Etp is inherently flawed"
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Re: Is fast crash likely? Pt. 9

Unread postby Outcast_Searcher » Mon 12 Feb 2018, 18:20:19

Yoshua wrote:
I guess we all agree that it takes energy to produce petroleum, but we don't agree on how much energy it takes to produce the close to 100 mmbpd today.

But to say that it doesn't matter how much energy it takes to produce those barrels is just fucking dumb.

And saying it takes about 9 times more energy today to produce a barrel of oil than it took in the 60's, by ignoring five decades of inflation in the cost of a BTU of energy, as shortonoil does in his ETP paper is what, intelligent?

It is an indisputable fact that overall, in both the US and the global economy, that the energy intensity of the economy is decreasing per dollar of GDP.

https://www.eia.gov/todayinenergy/detail.php?id=27032

So case closed on the idea that the cost of energy is REMOTELY ruinous to the modern economy, regardless of whatever numbers short makes up or whatever wild claims he makes in the ETP.
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