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EROI < 1:5 => collaps of modern civilisation!

Discuss research and forecasts regarding hydrocarbon depletion.

Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Sat 10 Nov 2018, 14:56:18

onlooker wrote:Yep, they're is no where to go. It really is now pick your poison time. Not continue raising the funds rate or prime rate, slow the rapid devaluation of currencies and the balloning of the stock market assets bubble and let Deflation and Recession set in.
Continue raising the rate, allow the Lending/Debt bonaza to continue, let the Market continue its irrational exuberance. Then at some point when investors sense the jig is up, the bulls will run for the exist and it will all explode and collapse similar to 2008 only much worse.
.

Sorry misspoke.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Sat 10 Nov 2018, 15:00:24

Similar but worse. The words of a doomer. This time is different. Etc.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby shortonoil » Sat 10 Nov 2018, 16:19:34

Sorry misspoke.


Why misspoken? It sums up the situation. The Devil, or the Deep Blue Sea. Once capital flows into the US (that are now being generated from extraordinarily high oil prices, and rising interest rates) start to slow the US is going to be facing the liquidity catastrophe of all time. The only reason that the developed economies are still afloat is because of those capital inflows. Around 2021 when the Benefit/ Cost ratio of oil hits 1 they are going to stop. Then it will be "Nellie, bar the door".

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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Sat 10 Nov 2018, 16:22:41

So you have pushed doom out for three more years? I guess you embarrassing yourself over the ETP prediction has caused you to be more cautious. Or the sales of your energy doomer pamphlet isn't going well for you. Smart move. Always put doom out as far as you can and still scare the rubes. By the time the doom doesn't happen you can skip town with the money.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby shortonoil » Sat 10 Nov 2018, 17:18:50

Similar but worse. The words of a doomer. This time is different. Etc.


"Similar but worse. The words of a doomer. This time is different."

Similar but worse. The words of a knuckle head!
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Sat 10 Nov 2018, 19:41:48

Have you paid off your wager yet shorty?
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby shortonoil » Sun 11 Nov 2018, 07:45:11

Have you paid off your wager yet shorty?


"Have you paid off your wager yet?"

Similar but worse. The words of a knuckle head.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Yoshua » Sun 11 Nov 2018, 08:41:00

Someone said that: The next global financial crisis starts in the Emerging Markets and then spreads to housing and autos and then to financials and banks and then the stock and bond markets collapses.

It looks as if we are on the path of a major collapse. The whole construction seems to be shaky right now.

The EROI from oil, natgas and coal is probably so low now that an intervention by the central banks might not even help anymore?
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Sun 11 Nov 2018, 08:55:12

Path of collapse
Brink of a precipice
Staring into the abyss
This time is different

Got to admit you doomers have a flair for the dramatic. Unfortunately for you, your predictions always miss the mark.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Ibon » Sun 11 Nov 2018, 09:57:55

Cog wrote:Path of collapse
Brink of a precipice
Staring into the abyss
This time is different

Got to admit you doomers have a flair for the dramatic. Unfortunately for you, your predictions always miss the mark.



There are times I agree with Cog.... they are rare, but this is one of them!
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby shortonoil » Sun 11 Nov 2018, 12:52:35

The EROI from oil, natgas and coal is probably so low now that an intervention by the central banks might not even help anymore?


The world has $199 trillion in LIBOR-Dollar denominated debt, and 82% of it is due by 2021. The EU now has a 0.2% growth rate, and China is witnessing a real estate bust, and now has a current account deficit. Over that same two year period world GDP will shrink by 3.2% just from the decline in Petroleum's Benefit/ Cost Multiplier. Just a 10% default rate on that $199 trillion would bring about the greatest depression the world has seen since Rome was sacked. At this point the central banks would be helpless to do a thing without generating hyperinflation around the globe. Hyperinflation puts the world in the same situation as Venezuela; dog stew becomes the fare of the day.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Sun 11 Nov 2018, 13:19:47

"At this point the central banks would be helpless to do a thing without generating hyperinflation around the globe. Hyperinflation puts the world in the same situation as Venezuela; dog stew becomes the fare of the day."
Precisely. We would have so much currency especially dollars going after less goods and services. Translating to massive currency hyperinflation. And beyond all the current problems we have the oil rapidly losing its net usefullness to society.
And I didn't know all that debt was due in 2021. To say the Perfect Storm is brewing is an understatement.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Yoshua » Sun 11 Nov 2018, 13:29:13

Oman minister said that the markets are over supplied and that a 1 million bbl cut would be a good start.

Saudia Arabia will cut exports and production by 500K bbl in December.

The global economy is slowing down...and rising oil prices won't ignite the economy...and falling oil prices will bankrupt the oil producers...

And then there's this minor problem with excess debt...
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Sun 11 Nov 2018, 18:18:36

If the world is over-supplied it makes sense to cut production. Get back in that $70-80/bbl range which I believe is a sweet spot for profits without harming economic growth.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby shortonoil » Sun 11 Nov 2018, 19:46:33

Here is another graph showing the Benefit to Cost ratio. The points are calculated the same way as in the post on the previous page (chart 225) . Here I use a multiplier calculated by dividing the Social Benefit per barrel by the Social Cost per barrel. The curve produced is actually a "shewed logistic curve", but the fit is with a power function. Shewed logistic curves have to be calculated point by point; there are no explicit mathematical functions to describe them. The curve shown is a short cut, but the fit is pretty good.

The Multiplier is a handy devise to describe what is taking place. Thanks to the comments of Yoshua, and onlooker I'm attempting to simplify the data delivered.

Image

The Benefit Cost Multiplier (BCM) has fallen from 31.65 in 1960 to 1.42 in 2017. Somewhere between a BCM of 1.42 and 1.00 petroleum will have lost so much of its value to the economy that the economy will shut down. That will most likely be preceded by a monetary financial crisis of previously unknown severity. That assumes that the monetary/ financial markets are much less rigid than the petroleum market. The financial markets will be down for a long, long time. That will be after the HYG ETF's have blown up. HY is now the most shorted, ever in its history!! After that the bond market will jump 200 bps in the first week. It will be, "The shot heard around the world"!

I didn't customize the screen fit, so depending on the size of your screen you may have to adjust it to see the right hand side. For those still taking the blue pill, something is going to be unplugging you in the foreseeable future.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby asg70 » Mon 12 Nov 2018, 00:34:47

Once a doomer always a doomer.

PAY UP, short. PAY.....UP, while dollars still are worth something.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby Cog » Mon 12 Nov 2018, 04:39:08

It's pretty likely if shorty has followed his own doomer investing advice he is flat busted broke. Living down in a van by the river.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby godq3 » Mon 12 Nov 2018, 08:52:20

^^ Calling someone a doomer is a compliment for this person. Not being a doomer is stupid, and shows that a person doesn't know how our world functions.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby GHung » Mon 12 Nov 2018, 10:34:14

godq3 wrote:^^ Calling someone a doomer is a compliment for this person. Not being a doomer is stupid, and shows that a person doesn't know how our world functions.


Yep. Not sure if it's a sick need to brand and belittle others, or a cowardly attempt to make reality go away. I guess those things go hand-in-hand when people desperately try to hold on to their carefully constructed narratives. These guys would be better off hiding under their beds.
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Re: EROI < 1:5 => collaps of modern civilisation!

Unread postby onlooker » Mon 12 Nov 2018, 10:43:43

What is happening is us "doomers" are looking more and more like the realists in these arguments. So,being called a Realist is for sure a compliment
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