Hiding in Plain Sight …


It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

                — Henry Ford

 


Q: How would you describe the economy?

A: It is a system that allows a select few to borrow immense fortunes. The rest of us … you, me, everyone else … repay the debts.

Q: That’s it?

A: That’s it.

 

 
The face of Peak Oil. [1]

We are in the middle of a crisis that has been ongoing for almost five years now: the managers demand the economic system be bailed out. Of whom do they make demands? Entrepreneurs? Innovators? The finest minds of a generation?

A: Pensioners.

The economies must become more productive which means increasing the efficiency of output. Consequently, pensioners are called upon to sacrifice their retirements in the UK, Greece, Ireland, Portugal, in the US … in cities and states pensions everywhere are under attack.

Why not more machines? If machines are productive, wouldn’t deploying more machines solve the economic problems around the world rather than deploying pensioners? Technology is supposed to save us but the raiding of pensions insists otherwise: the scraping of the bottom of the barrel in real time. It’s an admission that technology won’t work, from the people who are in a position to know.

What happens after the retirements are pilfered? Who knows? Nobody has a plan.

The world is shocked to discover a shortage of capital, not for investments but to prop sagging balance sheets. Who could have guessed as capital has been shoveled into the furnaces of ‘development’ for decades? Only economists and bureaucrats believe that we never run out of inputs.

 

China’s Biggest Banks Are Squeezed for Capital

Neil Gough (NY Times)

China’s banks are among the biggest and most profitable financial institutions in the world. But the state-backed banks are also starved for capital after an aggressive lending spree that was encouraged by the government.

 

Maybe they are profitable and maybe not. “Starved for capital,” suggests not. The operating idea is that capital is money rather than material inputs. These inputs are mispriced so that the money-equations used by industrialists add up to something ‘positive’. Cheating works until it doesn’t any more: substituting debt for unaffordable inputs doesn’t produce anything. Debt isn’t capital and self-delusion isn’t capitalism. Maybe we should call our economic system ‘Delusionism’ and be done with it.

 

Within the last year, seven of the biggest Chinese banks tapped the markets for 323.8 billion renminbi ($51.4 billion ) in new funds, according to Citigroup estimates. Several financial firms are expected to raise another $17.7 billion in the next few months, with China’s fifth-biggest lender, the Bank of Communications, accounting for $9 billion.

Banks around the world have been tapping investors for new funds as they struggle with slumping share prices and waning profits. But Chinese firms have maintained that their profit growth is strong and their balance sheets are solid, raising red flags among some analysts about the banks’ persistent capital needs.

 

Chinese bankers and business tycoons, each more corrupt than the last: raise that Red Flag high! The Chinese need capital because so many are stealing it and removing themselves overseas.

 

The problem is that paying out high dividends blows holes in their base capital. Thus, banks need to continue tapping the markets for fresh funds, often diluting minority shareholders by issuing new shares. The finance ministry, the banks’ ultimate controlling shareholder, always buys in, keeping its stakes topped up.

 

Somebody at the bottom always takes it in the neck. Today, it’s the minority shareholders, tomorrow it will be the junior bondholders or the pensioners or the schoolchildren forced to eat radioactive school lunches. This is part of an ongoing process, not a new feature within delusionism. It was invisible when everyone was busy getting rich: now that the abuses are visible it can only be on account that fewer are getting rich. The endgame heaves into view.

 

The amount of cash that is churned in the process is staggering. In 2010, China’s five biggest banks (the Big Four plus the Bank of Communications) paid more than 144 billion renminbi in dividends and raised more than 199 billion renminbi on the capital markets, according to GaveKal.

“This is the nonsense of it,” says Fraser Howie, a managing director at CLSA Asia-Pacific Markets, who is based in Singapore and is a co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.” “There’s an awful lot of money just going round and round from one pocket to another, giving the appearance of strength when it’s really not there.”

 

Fraser Howie cannot see what is under his nose. What else is he missing? How about Peak Oil? The owners of industrial enterprises borrow (steal) their fortunes and oblige the rest of us to repay the loans. The lending-go-round is the reason for industrial economies, their purpose in the first place. “Money just going round and round from one pocket to another,” is the theatrical production that is collateral for the loans. More appearances of strength means more loans — and bigger fortunes — for the owners. The churning of the bank funds is a feature, not a bug: modern finance villainy hiding in plain sight!

The public must accept the process at face value otherwise loans to ‘entrepreneurs’ could not be justified. There would be nobody able to commit to debt-service. As it is, the public has over-bought, the cost of fuel crowds out debt service. The solution is to chop off pensions with a samurai sword.

It’s not just Chinese banks that are starved for capital and it is not just banks. The world is capital constrained.

 

Europe’s Capital Flight Betrays Currency’s Fragility

(Bloomberg)

The euro area’s financial troubles appear to be flaring up again, as this week’s gyrations in the Spanish bond market show. In reality, they never went away. And judging from the flood of money moving across borders in the region, Europeans are increasingly losing faith that the currency union will hold together at all.

The flows are tough to quantify, but they can be estimated by parsing the balance sheets of euro-area central banks. When money moves from one country to another, the central bank of the receiving sovereign must lend an offsetting amount to its counterpart in the source country — a mechanism that keeps the currency union’s accounts in balance. The Bank of Spain, for example, ends up owing the Bundesbank when Spanish depositors move their euros to German banks. By looking at the changes in such cross-border claims, we can figure out how much money is leaving which euro nation and where it’s going.

 

Figure 1: Surprisingly, there is still capital in Greece and Ireland remaining to flee. Perhaps the last capital out the door in these countries will please turn out the lights.

 

This analysis suggests that capital flight is happening on a scale unprecedented in the euro era — mainly from Spain and Italy to Germany, the Netherlands and Luxembourg. In March alone, about 65 billion euros left Spain for other euro- zone countries.

The idea that Europe’s current incremental approach has the advantage of saving money is an illusion, and not just because the disintegration of the currency union could trigger a global financial meltdown. As the capital flight figures demonstrate, the stricken nations of the euro area are bleeding private money and becoming increasingly dependent on taxpayers. In all, the debts of struggling banks and sovereigns to official creditors such as the EU, the ECB and national central banks now exceed 2 trillion euros, much of which would be lost if the debtor nations dropped out of the currency union.

 

What isn’t mentioned is the flight out of euros into other currencies or assets such as US equities. Wait until the euros start flowing out of France. Bloomberg will have to draw a much larger chart.

 

 
What have you … done for your car, today? [2]

Resource nationalism should be giving more billionaires reason to pause. The game has instantly become much more interesting:

 

Argentine government to pay Repsol ‘zero pesos’ for YPF seizure as Spanish oil company issues legal warning

Fiona Govan (Telegraph, UK)

Spain’s Repsol has threatened legal action against any company that attempts to invest in YPF following its expropriation by Argentina last week as the government expressed determination to “pay nothing at all” in compensation to the Spanish oil company.

The move would discourage external partners from providing the investment YPF needs to exploit vast shale oil deposits discovered within the Latin American country and is the latest attempt by Repsol to fight back against the illegal seizure of its subsidiary.

“We reserve the right to take legal action against any party investing in the YPF and its assets following the unlawful expropriation of the company,” Kristian Rix, a spokesman for Repsol in Madrid, told the Daily Telegraph on Monday.

The Spanish energy company believes billions of dollars are required to develop Argentina’s prospects including at least €25bn a year over the next decade to exploit the Vaca Muerta shale discovery made last year.

 

Resource colonialism on a foundation of paper promises and graft will prove to be worthless as the distances to overcome are too great and leverage of the colonialists insufficient. The Argentine example is appropriate for the various biofuel plantations landgrabbed in Africa and elsewhere by the Saudis, Chinese and others. When the locals decide the renege on the contracts and expropriate the ‘goods’ there will be nothing the ‘New colonialists’ — and their Blackwater-esque goons — can do about it.

Hiding in plain sight: peak oil.

Nobody mentions that the reason for the Greek economic unraveling and that of the Eurozone is caused by peak oil. The blame is fixed on Greece’s debt exceeding it GDP by a few percentage points. Ditto the other countries under siege around the world.

 

 

Figure 2: Chart by Jon Stewart/the Bonddad: Greece borrowed euros hand over fist for ten years to import fuel that increased in price 600% since the beginning of the euro. All the other countries in Europe (except Norway and Denmark) did the same thing. Why did the price increase from $20 per barrel to $120? Because of diminishing supply relative to exploding demand. Meanwhile, Greece earned absolutely nothing from burning/wasting the fuel. Greece also has little in the way of non-fuel output to pay for imports: it’s ‘Uncompetitive’.

The Greeks were conned into believing that they could live like Americans. That they could borrow as do other large debtors at very low cost. That they had exorbitant privilege and could roll over their debts as they came due just like other ‘reserve currency’ states. They believed they could monetize pyramiding debt the way the Japanese and other large debtors do.

They would have been able to do so if the Eurozone was a country instead of a Ponzi scheme with the euro a sub-prime mortgage, if the industrial economy wasn’t a debtonomy and capitalism a delusion. Greece gulped the Kool Aid and ignored its own absence of real output and the structural deficiencies of the EU. Greece’s lenders did the same thing: once these lenders got cold feet and strangled cash flow the credit Greece depended on was cut off.

No credit and fuel is cut off, the Greek cash flow diminishes further, there is less output in a vicious, self-amplifying cycle. The outcome of peak oil process is Greece, destitute.

It’s also Ireland, Spain, Belgium, France … and Syria. Those who believe that the endgame of peak oil is Mad Max are wrong. The outcome for the unlucky is ten- times worse. The movie warriors did not have armor or heavy artillery and the willingness to turn it loose on civilians.


[1] Unidentified cinematographer, ‘The Character Humongous from the film, Road Warrior’.


[2] Unidentified photographer, ‘Syrian armor on the streets of Homs’.

49 thoughts on “Hiding in Plain Sight …

  1. jb

    Wow, an amazing post with so many great links; thank you.

    Secretary LaHood’s comments are just….unbelievable. Listen to the students snicker and laugh in the background; they know he’s a fool (or a liar). He’s headed for the private sector soon; I’ll bet he’s interviewing with BP.

    From the US.news link, first sentence: “The pension cuts that public workers in New York will face are just the latest in a litany of retirement benefit reductions instituted by financially strapped states across the country, even as the economy flickers back to life.”

    Flickers back to life? I am starting to see this doublespeak more often – ‘things are horrible, but looking better!’ Absolutely ridiculous nonsense from the mainstream media.

    This from the NY Times pension story: “The cuts would be up to 55 percent of each retiree’s benefits.”

    What? They’re losing more than half of their pensions? How do you budget for this on a personal level at 65? I wonder how many will sell their cars, boats and ATVs and buy pitchforks.

    Steve said: “Those who believe that the endgame of peak oil is Mad Max are wrong. (hehee, that’s me!) The outcome for the unlucky is ten- times worse.”

    And to think that I actually contemplated writing back and apologizing for losing my cool the other day. Methinks Steve = Humongous with a Samurai.

    Jb

    1. p01

      Let’s not forget how anyone under 50 will react when they finally realize all they’ll get is a negative pension.

      1. jb

        p01:

        I’m 44 and I have completely given up on the myth of retirement. It’s really quite liberating, not worrying about saving money we don’t have.

        I had coffee with a friend of mine on Monday. We’ve met at work over 12 years ago and have kept in touch since I left. She just quit (the old company is ready to fold) and took a much less glamorous job elsewhere but, she said, it had a nice retirement package. When she told me it was all tied to the markets, I just wished her the best.

        Jb

      2. p01

        I’m 42 and getting younger by the day :-)
        I’ve given up also on the retirement myth, long ago, even before the financial crisis, because it stank of Ponzi every time it was mentioned even in polite conversations.
        However, the amount of “negative pension” will be inversely correlated with age, hence the willingness to use those pitchforks you mentioned.
        Teaser:
        http://news.nationalpost.com/2012/04/26/montreal-police-and-protesters-rage-through-the-night-as-tuition-march-turns-violent/

      3. steve from virginia Post author

        LaHood was indeed on the spot. Official (unspoken) policy is to never mention peak oil or to say anything other than the supplies are infinite.

        Did you know the US is on the way to becoming energy independent? A major exporter? To exceed Saudi Arabia’s daily crude output?

        Tomorrow … always tomorrow.

  2. Reverse Engineer

    Best in a while Steve. I’ll cross post this one.

    Minor point to quibble on at the end. The Mad Max meme comes AFTER the big hardware of the industrial era is all at the bottom of Davey Jones locker. In fact they are out of fuel also an powering on pig farts. So what is going on now isn’t worse than Mad Max. It’s the precursor to Mad Max.

    RE

  3. Pingback: Hiding in Plain Sight … | Doomstead Diner

  4. The Dork of Cork

    Sweet Jesus…..

    The Irish CSO transport 2009 /10 onmibus was published today…..

    I knew bits & pieces of data but to see it all together is something else.

    Here are a few nuggets of info…
    Interesting passenger data on the Cork /Dublin air route for 2009 / 2010 now that we know Ryanairs dynamism cannot beat the laws of thermodynamics.
    Y 2009 :335,647 arrivals & departures
    Y2010 :168,423 arrivals & departures.

    The Cork to Dublin train has maintained and /or slightly increased numbers based on the back of this (its the most profitable train route in the country)
    But with a positive money supply it should be booming.
    The only other public transport route getting back to 2007 levels is the Dublin LUAS tram line (red) & Limerick buses….the final section of the LUAS (Green line) was built to a housing nirvana that never was…….
    Y2007 R.L. passenger numbers :15.825 million
    Y2009 :13.633 Million
    Y2010 :15.606 Million

    The Green line is recovering a bit But Dublin & Cork busses have collapsed.
    Dublin bus passenger numbers :Y2007 : 147.532 million
    Y2010 : 118.976 million

    Cork city : Y2007 :12.6 Million
    Y2010 : 9.4 Million wow !!

    Limerick Bus travel is improving for some reason perhaps because many of the poor bastards can’t afford cars now. (Limerick is the poorest of irish cities)
    Limerick city : Y2007 : 3.5 million
    Y2010 : 3.4 million

    Road freight declines is off the scale of course but i have mentioned that before…

    1. steve from virginia Post author

      Thanks for the figures, DOC. It will be interesting to see how these numbers play out over time.

      1. The Dork of Cork

        @Steve
        Check out the international passenger flight data in the transport omnibus.
        http://www.cso.ie
        They are devastating.

        One of the few growth routes that I can see is the Dublin / Frankfurt air route……
        It was out of the Dublin airport top ten in 2009
        But in 2010 it crept in at number 10 at 430,593
        in 2011 it was at number 8 at 439,065.

        On a bi – monthly basis the max passengers was at 2010M 07 :46,745
        & 2010M 08 : 47,603
        This contrasts with 42,333 & 40,899 during those summer months in 2009
        47,007 & 46,603 in 2011.

        Now many of these people are summer tourist passengers but why is Frankfurt perhaps one of the few growth destinations for Dublin airport during this multi year period? ….Germany is not your typical holiday destination.
        Are all those CBers flying back & forth during those hot summer months ?

        September and October of 2011 was also showed record numbers 41,592 40,279
        This contrasts with 2010 figures of 41,295 & 38,640
        Also 2009 figures of 35,850 & 34,043

        They are impressive growth figures when you contrast these numbers with the collapse of passenger numbers to almost all other destinations during this multiyear period.

        It perhaps paints a picture of financial engineers flying to keep their ship of credit afloat as the physical world sinks around them.

      2. The Dork of Cork

        Total passenger numbers ( Irish airports)
        Y2005 : 25,812,314
        Y2007 : 31,504,102
        Y2010 : 23,697,577…..

        http://www.iaa.ie
        (go to flight statistics)
        Monthly , 4 year , 10 year.
        Cork airport is down 8% in March relative to March 2011.

        As for why the Green Luas tram line is not as succesful as the Red luas line.
        A must see as it explains so much of Ireland now.(a suburban wasteland)
        http://www.youtube.com/watch?v=EPAf7W58Fi4

        The redline has however been extended to a new terminus at Saggart in 2011
        en.wikipedia.org/wiki/Saggart
        – Irelands fastest growing town so therefore passenger figures are probally much improved over the already impressive 2010 figures.
        Saggart Y2006 : pop 868
        Y2011 :pop 2,144 (147%)

      3. enicar333

        I enjoyed the pictures of Ireland – and would like to meet the young Blonde Lassie.

        Thanks, Dork!

        Why Does Milwaukee Need a Streetcar?

        “The numbers:

        It will cost $64.6 million to build the first segment of the project.
        $54.9 million in federal transit aid will pay for most of the construction.
        $9.7 million in tax incremental financing will cover the rest.
        The projected $2.65 million annual operation cost is expected to be covered by fares, sponsorships and parking revenue.

        None of this includes the cost of moving utility lines downtown. Utilities say that could cost $55 million. City officials say it is working with utilities to minimize the cost but that utilities should pay the rest; utilities think the city should pay.

        The state Public Service Commission is considering the issue. If it decides that utilities must pay, those businesses (and their customers) will have to absorb those costs. If the PSC rules that the city must pay, Milwaukee (and its taxpayers) will need to find more funding.

        The Metropolitan Milwaukee Association of Commerce has joined the fray. AT&T, which projects $10 million in relocation costs, suggests the line be rerouted. Time Warner Cable says its cost would be several million dollars.”

        DEBTONOMY!!

  5. Sandor

    “I think Nicole Foss hits the target: the idea is to maintain what passes for ‘confidence’ in finance. I don’t know if confidence is the right word. A lot of finance relies on predictability. Whatever the case, there is a lot of theater.”

    This applies to all human culture. Hence the CB’s demand for price stability above all else. Most of the theater revolves around hypnosis. Panic must be avoided at all costs. This is why shouting fire in a crowded theater is a crime. It breaks the spell.

    The system we’ve got is tremendously flawed, but it’s an outgrowth of historical attempts to deal with human herding instincts, while keeping territorial resource wars at an acceptable minimum. Hyperinflation is a political event. Anything, even perpetual stagnation, is preferable for most to the threat of rapid systemic destabilization and civil war. We do not want tanks in the streets. We do not want to live in a Syria, Libya, Afghanistan, Sudan. All measures of financial repression, pension fund raiding and debt monetization must be viewed in this light.

    ‘Down-cycling’ is the best option available for the advanced industrial economies at this point. But stability is bought at a very high price. As the risks are spread out across every segment of society, we all pay for everyone else’s decisions. Actionable awareness (intelligence) is dulled without the appropriate pain response. We keep our hand on the flame and watch as our skin burns, because we no longer feel anything… Moral hazard, aka methadone maintenance monetary policy is status quo. The pusher and the junkie need one another.

    Between here and real responsibility, where one is not protected from one’s errors, is a field of human devastation. Few of us are presently equipped to deal with such a possibility. It is easy enough to point out what’s wrong. Any criticism is a validation. It is quite difficult to acknowledge one’s dependence on the collective destiny and be willing to accept a level of responsibility for the deception and fraud necessary to maintain the status quo.

    Anyway, thanks to Steve and all the commenters here. Co-education helps

  6. RobM

    Steve, would you please consider a post on interest rates?

    The questions:
    1) Why are rates low? and
    2) What might cause rates to rise?
    seem like trivial questions yet the more I think about it the less I am sure of the answers.

    For example, are rates low because:

    a) CBs want low rates and buy treasuries any time rates threaten to rise;
    b) big private money predicts deflation and is happy to hold treasuries at 0%;
    c) it’s possible to make a profit on almost any new venture and therefore banks are comfortable loaning at very low rates (I’m being facetious of course);
    d) the majority have figured out stocks are in a bubble and are selling equities and buying bonds;
    e) low rates are an illusion because banks have no credit worthy customer and do not lend;

    1. steve from virginia Post author

      Interest rates is a very large subject that is hard to distill into an Internet article: Keynes wrote a book about them.

      – Part of interest rates is their use in managing the First Law: that is, the costs of managing any surplus increase along with it until they exceed it. Interest rates are the means to confound the first law: the cost of borrowed funds decrease as amount borrowed increases. Large firms and governments are able to borrow at minuscule rates where as smaller firms and individuals are burdened with much higher rates. This ‘rate skew’ gives a money-cost advantage to the larger over the smaller: the understanding being the borrower ‘properly manages’ his own repayment obligations, that is, presses these obligations onto others.

      What this means is that only do individuals carry their own debt burdens but must also shoulder the debt burdens of billionaires.

      – The other part of the interest rate idea is the willingness of creditors to lend with the cost determined by supply-and-demand. Differences between willingness of different lenders to different groups sets arbitrage opportunities which is the basis of most finance trading: ‘playing the spread’.

      For instance, the spread between what the central banks charge for credit versus what finance can gain by re-lending these funds. The idea is to provide income for finance and increase its capital. The effects are contradictory. If there are more lenders than borrowers the rates must decline and the spread vanish and banks are emptied of capital. If there more borrowers than lenders the rates increase to the point where there borrowers cannot afford to borrow at all.

      – Another, large issue is the interest rate cost OF money vis. energy costs IN money. Mr. Snark sez if you have to ask you cannot afford it, even @ 0.25%.
      :)

      1. RobM

        Thanks Steve.

        Let me try a different angle. Do you think rates are low because of CB actions, or because big private money expects deflation, or some other force? In other words, who/what is actually in control of rates?

      2. steve from virginia Post author

        In general, the market for credit determines rates. The central banks defend certain (short term) rates but cannot override the market directive.

        Private finance is constrained by creditworthiness of borrowers and demand. The various interest rate, lending and currency markets have their own dynamics. There are speculative attacks on currency pegs, for instance. These dynamics effect rates and as the markets become larger and more computerized, the more uncertain the rates can become.

        Money worth is determined in the retail energy markets (de-facto hard currency): the central bankers attempt to become relevant by holding short-term rates @ zero (by lending at very low cost to the govt). High money-cost of petroleum inputs cannot be canceled out by low money-cost of money. What the borrowed money is spent on does not provide a return: even at zero-percent the money is too expensive.

        This is big reason why the world economy is in (some say fatal) trouble: the cost of an input has greater economic importance than cost of borrowing. This leaves little incentive for firms to borrow. If firms borrow it is for loan-sharking and operating ponzi schemes which can ‘pay’ the high costs.

        Keep in mind, the real fuel costs (relative to other goods and services) will relentlessly increase, even if the nominal costs decline. You might see 10¢ gasoline but nobody will be able to afford it.

      3. RobM

        Thanks, I get what you are saying. What I don’t get is why big private money is willing to lend at low rates. I mean even a peak oil denier has got to be able to see the sky high dangers of our debt bubble. The risk of debt default (even without peak oil) would seem to require a big risk premium on interest rates. Yet it’s not happening. Very strange.

      4. steve from virginia Post author

        The rate depends on the amount that is borrowed more than anything else. Poor people/businesses don’t borrow $100m. Lending to Coca Cola and other blue chip companies is considered the same as lending to the Treasury (as is owning their stock).

        To the market, there is no ‘bubble’ and risks appear to be very low. Repayment is not an issue with finance debts only fees. Remember, nobody is lending anything real, just numbers on a screen. Some other entity will always come up with more numbers on a screen … they aren’t millions of lead weights that have to be shifted around.

        The risk of default at finance levels is considered insignificant. With sovereigns (with organic credit denominated in their national currency) there is almost zero risk: the government can always print money to retire the debt (remember, central banks don’t).

        http://ftalphaville.ft.com/blog/2012/04/28/978811/you-will-buy-more-govvies-or-else/

        In 2008 the risk was in the shadow banking ambit where nobody knew who was solvent and who had large contingent liabilities. The effect was felt in the repo and commercial paper markets. The demand for loans quickly outstripped available supply ($trillions!) and rates became unaffordable. There was a run out of all financial assets. Both the Fed and the Treasury had to make explicit guarantees or short-term funding would have disappeared. As it was, the credit freeze lasted until the end of the year.

        Most in lending markets and banks deny peak oil, believing that the world is experiencing an ordinary — if large — contraction. There is a lot more of course, but only amateurs believe there is a real crisis.

  7. The Dork of Cork

    @enicar.
    Well , the LUAS lines of Dublin are still the most successful transport projects in the state…despite the fact the ticket costs are much higher then a typical french tram.

    The second phase of the Luas green line was a failure because it was used by the property industry to inflate values on property yet to be built…the system itself works fine
    The red line carried 15.6 ~ million passengers and the Green line 12~ million passengers a week in 2010…this is higher then most French tram town lines but no way near as high as Paris trams. If you want to see real money being spent look at the Paris public transport system.
    http://www.rail.co/…/barton-willmore-to-advise-on-17bn-french-railway-pr...
    and thats just the new outer orbital railway system.
    As for the Trams……
    Line one…(extensions planned) 29.3~ million passenger a year (2006)
    Line two (building a extension 2012) 19.9 million 2006)
    Line three(14.5 Km extension 2012) 30~ million
    Line four (tram -train) 10.6 million
    Of course trams in Paris is only a secondary service intended to service suburban areas outside of the Metros & urban rails catchment.
    But lines 5 ,6 & 7 are being built regardless
    fr.wikipedia.org/wiki/Ligne_5_du_tramway_d’Île-de-France
    fr.wikipedia.org/wiki/Ligne_6_du_tramway_d’Île-de-France …..however both of these lines will use the unreliable & tested rubber tyre on rail concept !….. (industrial lobbying is alive and well in France)

    fr.wikipedia.org/wiki/Ligne_7_du_tramway_d’Île-de-France (convential rail trams)
    fr.wikipedia.org/wiki/Ligne_8_du_tramway_d’Île-de-France

    Other projects will probally be built
    fr.wikipedia.org/wiki/Tramway_Antony_-_Clamart

    http://www.stif.info/les…/tramway/…/tramway-porte-choisy-orly-4399.html

    The scale of the Paris public transport investment is truely immense.
    And of course the Paris Metro is famous… with two further extensions to open this year.
    en.wikipedia.org/wiki/Paris_Métro

  8. enicar333

    Here in Racine and the surrounding area there is a steady demand for CNC machinists, albeit, most are non-union and pay is lower than in the past. One can expect to start at between $10 – $15/hr.

    My cry of “Williston OR Bust” has been put on hold- as Tuesday I interview for one of the coveted positions in Gateway’s CNC Bootcamp. The school has a placement rate of almost 100% and there are employers already waiting to hire graduates.

    Wednesday, I toured Pioneer Products and saw many of the parts for industrial society being machined: bell housings for Dodge Ram Pickups, Transmission housings for Chevy Camaros and Corvettes, stacks of recently rejected castings for the Dodge Viper transmission (foundry problems), covers for Catepillar diesel engines and filter mounts for single mount oil filters and dual mount diesel filters (emission purposes). There was also a casting that was machined for a Delta-Hawk diesel airplane engine – which Racine has pinned it’s hopes on!

    My buddy has just purchased a 1974 Dodge Dart Sport with a 1969 340 engine in it, and this weekend I am installing a new Capacitive Discharge Ignition in it and tuning it for maximum fuel burning and horsepower.

    I continue to stay “on the wagon” and train with free weights and ride my bicycle, for that fateful day when, Post Peak, I must meet RE for “trial by ordeal” and survival of the fittest!!

    Can we hold off on the peak oil for another year or two?

    1. Mr. Roboto

      Peak Oil (at least for the coveted “light sweet crude”) arrived over six years ago. I do hope that the terminal decline of world oil production (the proverbial cliff) can be held off for a while so that my kidneys might first recover from what Losartan did to them.

      Good for you staying off the sauce. That stuff is pure poison. I would have advised smoking some weed if you want to alter your states, but then I remembered you will almost certainly be pee-tested for those things you mentioned that you have coming up. :-D If you have that tobacco monkey on your back, I hope you’ll consider quitting. Can you even imagine having to go cold turkey the day you can’t get ciggies anymore from the neighborhood Stop & Go?

    2. Reverse Engineer

      “I continue to stay “on the wagon” and train with free weights and ride my bicycle, for that fateful day when, Post Peak, I must meet RE for “trial by ordeal” and survival of the fittest!! “-EC

      In that case, I suggest you supplement the weight training and aerobics with some skill training with a Sling and Atlatl :-) Bone up on your firemaking techniques, and study those Wild Edible Plants reference manuals. If you are really hard core, get some good rocks and start knapping your first hand axe.

      See you on the Other Side of the Zero Point :-) If you see a low energy world coming down the pipe here, get serious with your training regimen. Feel free to train for operating a CNC, but CYA by training also for the Full Primitive.

      RE
      http://www.doomsteaddiner.org

      1. jb

        enicar333: Good luck at the interview! A job as a CNC machinist sounds like a good idea to me. Go for it!

        Jb

  9. The Dork of Cork

    If you want to know where the Greek ,Iberian , Irish ,Italian ? money is going…
    Estimated costs of Paris Public transport projects
    Tram train north phase 1 : 473 million
    phase 2 : 52 million
    Tram train west : 320 million
    Tram train Massey : 433 million
    Tram train T 4 extension : 243 million

    the new T Zen dedicated bus ways which will probally become tramways withen the next decade.
    http://www.youtube.com/watch?v=3fzPCLIh9RA

    Notice how empty to place is of traffic ..not a good investment me thinks ..although when / if passenger numbers increase they will probally stick down rails

    The French might even beat the Irish record of 105 billion spent on buildings & stuff over 3 years …. but this time with money spent on public transport.

    The peripheries function now is to channel capital to the core….. and thats it baby.

    Total tram train : 1.521 billion

    RER E : 3700 million
    RER B Nord : 548 million (including trains)
    RER C : 370 million
    RER D : 270 million (?)
    Branch of D : 320 million (?)

    Total RER : 5.208 Billion (?)

    Metro
    Line 4 extension : 439 Million (?)
    Line 8 extension : 83 M
    line 11 extension : 960 M (including rolling stock)
    Line 12 extension :392 M
    Add. stations : 33 M
    line 14 extension:1,343 M
    Grand P. express:5,100M

    Total metro 8.35 Billion (?)

    Tramways.
    Line 1 extension : 164 million
    Line 1 Colombes : 172 million
    line 1 Noisey le sec : 425 million (?)
    Line 2 bezons ext. : 276 million
    Line 3 extension : 246 million
    Line 5 :215 million
    Line 6 : 392 million (?)
    Line 7 (phase 1) : 361 million
    line 7 (phase 2) : 230 million
    Line 8 : 287 million
    Tram Porte de Choisy – Orly :225 million (?)
    Antony tram : 225 million
    Tzen 1 + 12 vehicles Phase 1 : 86 million
    Tzen 1 Phase 2 : 64 million
    Tzen 2 : 174 million
    Tzen 3 : 191 million
    Tzen 4 : 108 million
    Tzen 5 : 12 million (?)

    And Ireland cannot build a Heavy tram for Cork ?
    We are being used….
    The French know something and they ain’t telling us.

  10. The Dork of Cork

    Tzen 1 + 12 vehicles Phase 1 : 86 million
    Tzen 1 Phase 2 : 64 million
    Tzen 2 : 174 million
    Tzen 3 : 191 million
    Tzen 4 : 108 million
    Tzen 5 : 12 million (?)

    1. steve from virginia Post author

      The Irish still don’t have a real government. Until energy reality is faced head on with eyes open there will be a string of ever-more hapless unreal governments … until inevitable bankruptcy.

      Not just Eire, all the rest of them including US and China/Japan.

  11. The Dork of Cork

    @Steve
    Ireland was & is a Large estate.
    They (Guberments) were always agents for the owners whoring on the continent ,although some administrations were slightly more competent then others.
    Ireland is nothing like Greece…….. the Greeks could go Postal anytime now.

    I was in Kent railway station (Cork city) today… the place was so quiet….. yet still the traffic drones around the city although with less intensity now.
    The decision to come out of the Sterling Zone in 1979 has been catostrophic for Hibernias domestic economy – it has been held together by European fiscal transfers & multinational scraps ever since.

    Hibernia was always the dirtiest slut in Europe …willing to do anything for a piece of silver
    We were probally slightly better off getting raped by John Bull to be honest…. the simple Paddy bloke could send Londons bounties / scraps back to the Home & hearth in the 60s & 70s.
    Now we are in a pure extraction phase.
    Its similar to what happened during the 19th century .. when Dublin ceased being a capital the rent silver was spent in England …..and was never recycled….causing the money supply to fall and fall and fall.

  12. The Dork of Cork

    26 April 2012
    “The number of rail passenger journeys across Great Britain has reached record levels according to new statistics published today by the Office of Rail Regulation (ORR).
    The figures detail passenger rail journeys taking place within Great Britain from 1995-96 up to latest data for 2010-11, looking at travel within and between 11 government office regions (GORs) – East of England, East Midlands, London, North East, North West, Scotland, South East, South West, Wales, West Midlands and Yorkshire and Humber.

    The 2010-11 figures show that:
    •1.16 bn rail journeys took place in Great Britain – up 8.9% from 2009-10. 769.8 million rail journeys took place within individual GORs (an increase of 10.3% compared with 2009-10) and there were 393.3 million rail journeys between GORs (up 6.3% from 2009-10).
    •The total number of rail journeys for England was 1.05 bn – up 9.4% on 2009-10.
    •The total number of rail journeys for Scotland was 85.9 million – up 4.4% on 2009-10. 78.5 million rail journeys took place within Scotland (an increase of 3.7% compared with 2009-10) and there were 7.4 million rail journeys between Scotland and other GORs (up 11.7% from 2009-10).
    •The total number of rail journeys for Wales rose to 27.3 million – up 4.7% from 2009-10. 18.7 million rail journeys took place within Wales (an increase of 3.8% on 2009-10) and there were 8.6 million rail journeys between Wales and other GORs (up 6.8% from 2009-10).
    •London had more rail journeys than any other government region and 60.7% of all rail journeys in Great Britain started and/or ended in London. There were 706.3 million journeys involving London, an 11.7% increase on the previous year. There were 371.7 million journeys made within London (a 17.3% increase on 2009-10) and there were 334.5 million journeys made between London and other GORs (a 6.1% increase on the previous year).”

    Something very dramatic is happening to transport activity in Great Britain me thinks.
    Why do you think is happening ?
    Could it be their Monetary policey ?
    More evidence….. The UK has bought 28% of the EUs Buses during the first quarter of 2012 !!!
    “COMMERCIAL VEHICLES: registrations down 9.6% in first quarter
    Brussels, 27/04/2012 – In March, new commercial vehicle registrations dropped by 11.8%, totaling 184,235 units in the EU*. With the exception of Germany (+0.3%), all other significant markets shrank, from -7.0% in the UK to -11.2% in France, -22.1% in Spain and -45.4% in Italy. Over the first quarter of 2012, demand was down 9.6%, compared to the same quarter a year earlier. Downturn prevailed across countries as new registrations fell by 1.0% in Germany, 5.8% in France, 8.9% in the UK, 22.6% in Spain and 36.1% in Italy. In total, the EU* recorded 451,244 new commercial vehicles.”

    However something very strange is happening to the Bus & coach market.. particularly in the UK with it showing another very strong month.

    “In March, buses and coaches were the only segment to post growth (+17.9%), sustained by the strong demand in the UK (+86.7%) and Germany (+22.6%). From January to March, the UK (+70.1%) and Germany (+18.8%) remained the largest markets, followed by France (-11.5%). In total, 7,779 new vehicles were registered in the EU*, or 6.2% more than in the same period last year.”

    Since only both the UK & Germany are operating withen a more optimal monetary envoirment I think we are seeing tentative effective good substitution withen this area (people are dumping their cars for buses)

    The UK accounted for 28%+ of all bus regs in the EU so far !!! (Jan – March) at 2,192 vehicles….. this contrasts with Germany at 1,231 and Spain at 450.

    1. steve from virginia Post author

      It will get much, much worse in Egypt. The bottom is Somalia, where all the failed states finally wind up.

      BTW, jp: there are/were tanks in Cairo on the streets! Just not firing artillery … yet.

      A subtext in Egypt is the struggle between the military and the Islamists. The military will probably not allow the Muslim Brotherhood to gain power in the country, yet the Brotherhood is the strongest and best-organized political force in Egypt. Fighting is a possibility as an Islamist government would not receive US military aid, which is the gravy train for the military bosses.

      I did comment … over @ real news

      1. jb

        Automobiles are the modern ‘biblical plague of locusts on a much more immense scale.’

        Nice; I gave it a ‘Like.’ The title of this post is truly apropos.

        Yes, yes, I meant the tanks haven’t opened fire yet. Anyway, a civil war between the military and the Islamists seems a plausible outcome. The middle east becomes a cauldron of proxy wars and failed states, humanitarian crisises, and a breeding ground for the paramilitary. It is where western foreign policy goes to die.

        Contracts and lines of credit will be broken leaving shelves empty. The international loans that escape mahogany paneled conference rooms come at an ever higher a price. It isn’t enough to crush them; we must sow salt in their fields. Refugees by the millions result in the closing of borders in Northern Europe. Nationalism will spread like the bubonic plague.

        Jb

      2. RobM

        Check out Egypt’s population growth over the last 20 years. That’s just as big a problem as energy. Or maybe they are the same problems since maximizing entropy is the sole purpose of life.

  13. The Dork of Cork

    Well from here It looks like Ireland will be the next Greece.
    Our domestic demand could be nearly halved before the year is out me thinks.
    Y2007 Q4 (Peak) : 43,689 million (peak)
    Y2011 Q4 : 29,891 million
    We have a debate about the fiscal treaty referendum that never quite gets to the core of the apple.
    Our finance minister threatened the nation today that we will have more austerity (i.e. throwing people under the bus to sustain unsustainable bank credit activities) while a domestic banker threatened us with the IMF bogeyman.
    Nobody asks what have bankers got to do with money ? the coin of the realm under these circumstances.
    Its the duty of the exchequer to print notes now …. its got nothing to do with banks or the IMF or the ECB.
    Its their duty to maintain the money supply.

    Its hard to escape the conclusion that this sod is inherently a evil place.

    http://www.youtube.com/watch?v=j5ptS9q3X8s

    1. steve from virginia Post author

      The people don’t understand, they are afraid of losing without realizing there is nothing left to lose.

      The whole system of credit, industry, captive government(s) is corrupt.

  14. The Dork of Cork

    Yes it is becoming quite unbelivable even for me (before this I thought I was a cynic !!)
    Looking at new Provisional Irish energy balance figures and……
    The Total Primary Energy Supply for the country appears to have taken a major dive for Y2011.
    These are based on provisional data that is open to major revision I suspect but they are dramatic numbers none the less.
    TPES (inc non energy) : Y2010 : 15,155 KTOE
    TPES (excl. non energy) : Y2010 : 14,829 KTOE

    TPES (inc non energy) : Y2011 : 14,174 KTOE
    TPES (excl non energy) : Y2011 : 13,892 KTOE

    So we seemed to have lost 1 MTOe in one year !!
    If our Euro energy import was down for Y2011 this might even be considered good news but it was not – it was a record !

    We are back to Y2000 TPES despite a much higher population and car numbers !!

    There are things they can do…. besides issue domestic currency
    This is the next Luas Green line Bridge.
    http://www.youtube.com/watch?v=jv4lkswxpZM

    The only problem with the above possible future investment is that the goverment would gift the commons to a private company and yet be expected to pay interest for the privallage ……
    Its a sick world out there Steve.

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