John Sloan ‘Sunday’
The Association for the Study of Peak Oil (and Gas)(ASPO) is having its World Conference in Washington, DC in a day or two (I can’t remember …). There is a very complete lineup of peak oil speakers,
a short list of whom can be found here. Of course I will be there asking for opinions and interviews which will wind up on this blog!
Speaking about Peak Oil at the ASPO World Conference is an exercise in ‘Preaching to the Choir’. Everyone attending acknowledges that peak oil in any and all iterations is real and happening, has already happened or will do so in a very short time. In this way the whole Peak Oil issue is moot. Whether some believe that the outcome will be higher prices for fuel or – like ‘Yours Truly’ – lower prices, the real outcome is simple.
There will be shortages.
Relatively speaking, there are already shortages. We are running out: ‘We’ being the collective ‘Homo industrialis‘ which has made itself dependent on an uninterrupted and increasing stream of supply of fuel at rock- bottom prices. The American Way, the Babbitry- version of American Exceptionalism that has become the model for the world’s development is the irresistible force meeting the immovable object of ‘No Gas Today’ … or tomorrow(s), either.
Despite all that exceptionalism shortages will be here to stay. They will feed on each other since ‘Shortage’ is relative. The transitory advantages that some countries have over others will not matter as time passes. At some point there will be no petroleum available for ‘fun stuff’.
Horreurs!
Another interesting aspect of ASPO which I cannot wait to over- analyze is the social buzz that will emerge from this meeting. First of all, such gatherings are a lot of fun! Participants get to (finally) meet people they have been corresponding with for years, will be able to question these same people as well as network. Individuals of like minds socializing is both reaffirming and pleasurable.
This will be the most sobering/depressing gathering imaginable. How do you confront the end of your world? At the same time, the only strategy that ensures a positive outcome is cooperation/networking/reaffirmation. All must pitch in together to prevent the most vulnerable – not those whom you would most expect – from unbalancing the entire tentative adventure. We have to create a new culture from almost- scratch.
The most vulnerable are those most invested in the current state of affairs, they have the most to lose. There is nothing scarier than an enraged mob of heavily armed Cadillac dealers!
At the same time, in our ‘One- Eyed King’ world that is unfolding, the conference participants are poised to become the new Elite. Does it matter? These are good questions for the conferees.
Another question is whether the academic tilt of the peak oil ‘community’ gets in the way of that community communicating effectively? Peak Oil is a cultural phenomenon as much as an economic one. The weight of current culture is borne by its ground- level participants who drive to work in big vehicles on sclerotic highways from inefficient suburban mega- houses (that they cannot pay for) toward (tentative) jobs in glass or concrete boxes surrounded by acres of free parking. These people believe – as they must – that they are positively participating in a cultural narrative that is both large enough to contain them and has some metaphysical ‘place’ or future to get to. What does the ‘Acadame’ have to say to these people, particularly as their world shudders at the edge of the peak oil abyss?
Is the academic approach a defense mechanism adopted by peak oil ‘theorists’ to forestall the sort of emotional over- reaction that is a natural consequence of the culturally destructive nature of peak oil itself?
Another question is, ‘the end of WHICH world?’ Keep in mind that a large percentage of the human race has never encountered a flush toilet or a light switch. Peak Oil? What’s that? Life for these people post- peak is likely to be indistinguishable from pre- peak. The problem is that part of the human experience is likely to have a large number of ‘additions’, Does the peak oil community have any way to address this issue besides more charts and graphs?
In the face of Peak Oil, the triviata of inflation/deflation, the ongoing collapse in real estate world- wide, the disintegration of institutions are just that, trivial. All are part of the commercial culture that emerged to enable more and more waste. The culture itself – in all of its Warholian manifestations – is running out of gas. More than the breakdown of a political scheme, the end of a culture leaves a void not easily addressed. It is no wonder that the post- peak issues are widely ignored.
It’s one thing to sex- up an electric golf cart, but another to imagine a world where speed itself is obsolete. This is an imagination issue. Academics and scientists are ill- equipped to manage such a transition. So are the ‘culture sources’ of today; advertising managers and marketing directors. How does one sell ‘Less’?
What is rock and roll (or rap, for that matter) without hot rods, mansions (Mc or otherwise) and other energy- wasting goods? It’s hard to pose with ‘bling’ in front of a mule! The American Culture is about the triumph of leisure over the moral supremacy of work. The superseding culture- to- come will require a lot more hard, physical labor. In the future, we ‘are all Mexicans, now’. Ours is a ‘Car Culture’ where comfort and ease can be easily categorized as something else. Kick in the door – by cutting off the gas – and the whole rotten (infra)structure collapses.
It’s already started, this is what is amazing that so few are paying attention!
What will emerge from the carcass of Warholian modernism? Who knows! It could be anything. There is a strong Jeffersonian tradition of independent entrepreneurs who love the earth and would become the structure (without the infra) of a new, agrarian America. I call this the New Back to the Soil Movement. This is a nation of farmers, a nation of towns that provide the services that farmers requires, a nation turned away from the consumption of plastic nonsense imported from the far East.
Agriculture/gardening,
traditional cities and towns (with sanitation and services), less transport infrastructure and more nature, more art and artistry, the end of economies of scale and industrialization … bits and pieces that have survived the destructive impulses of ‘progress’ still exist as models. What we consider to be civilization is made up of the these ‘artifacts’. It can’t be that bad, if only because our grandparents lived with them and without ‘consumption’. People ask what the future will bring and I tell them, “Tuscany, if we are lucky and smart”. Maybe not for us but for our grandchildren.
If not, it’s a Mad Max race to the bottom worldwide.
Your Golden Shoes Day
Izabella Kaminska
Courtesy of some friendly city brokers, comes the following observation about spot gold price movements on Tuesdays:
We are increasingly interested by the move on Gold every Tuesday. I have grabbed the gold price chart from Bloomberg and the steps up in the price are noticeable. Almost without exception, the gold price has spiked $20ish every Tuesday for the past few weeks. Analysis shows an average move of 0.22% with a standard deviation of 0.49% on an average daily gold performance histogram. The Tuesday average is 0.75%.
And here’s the chart — via Bloomberg:
Which is interesting, since FT Alphaville has already noted some strangely formulaic action in gold prices before.
I’ve mentioned on this site previously that the Federal Reserve and other central banks are pimping gold with the mind to reducing the relative value of dollars/currency. The tiny gold market requires little buying to move. This is in contrast to the US equity markets which cost more to push ever- onward.
Got to give Planet Bernanke credit for trying. Too bad he’s pushing on a string … or is it too bad? If the Fed pushes forever – at a rate of $200 billion per month – the Fed itself becomes less relevant than it is now. Welcome to the USSR, which had a ‘market’ … sort of.
When one entity becomes the entire market the idea itself of markets disappears. What, then discovers value? The answer is fiat of the government/establishment, which exists to serve those who have purchased its favors. We live at the point of market disappearance. The alternative is for the Fed to allow ‘market forces’ to set prices of assets that the Fed currently supports.
Where do you think those prices would fall to if left to chance? The Fed is certainly voting with its feet about the economy, favoring finance’s fiefdoms at the expense of a productive economy that – in the US – does not exist any longer. If the US had a productive economy and a healthy demand for credit, cutting interest rates a few points would have brought about a real recovery.
Cutting rates, adding cash to finance (with trickle- down hopes) and pimping assets with Permanent Open Market Operations have accomplished exactly nothing. Is there better evidence that something besides insufficient credit is behind our malaise? There is very little demand for credit. Businesses borrow to invest. ‘Investments’ return zilch because ‘other’ costs to businesses are too high. These costs include fuel costs along with ‘rebound’ costs. Businesses which shipped high wage American jobs overseas – as a hedge against high energy costs – shipped their customers overseas at the same time. The brilliant ‘solution’ to the decline in demand was to substitute credit cards for the high wages. This was a bad strategy from start to finish.
What besides overpriced houses does the US ‘craft’ any more?
The answer is little or nothing.
RE; Insanity, here’s Bob Herbert of the New York Times teeing off on Congressional Republican John Boehner:
Mr. Boehner is the minority leader in the House and would most likely become speaker if the Republicans win control in next month’s elections. He has stopped funneling corporate money to his colleagues on the House floor. (It is now illegal.) But nothing else has changed, except that his already outsized influence-peddling has grown. The amount of democracy-destroying money that manages to make its way into the sleazy environs of what is now known as Boehner Land has increased to a staggering degree.
The Times’s Eric Lipton,
in an article last month, noted that Mr. Boehner “maintains especially tight ties with a circle of lobbyists and former aides representing some of the nation’s biggest businesses, including Goldman Sachs, Google, Citigroup, R.J. Reynolds, MillerCoors and UPS.
“They have contributed hundreds of thousands of dollars to his campaigns, provided him with rides on their corporate jets, socialized with him at luxury golf resorts and waterfront bashes and are now leading fund-raising efforts for his Boehner for Speaker campaign, which is soliciting checks of up to $37,800 each, the maximum allowed.”
The hack who once handed out checks on the House floor is now a coddled, gilded flunky of the nation’s big-time corporate elite.
I always wondered what Boehner’s campaign promised supporters; “Cans of spray tan for all!”
Meanwhile I am wondering if the yen is becoming a proxy of sort for the yuan as that currency is (still) fixed relative to the dollar. China is Japan’s number two trading partner – much of Tokyo’s industrial output is assembled in China for sale in China – and the trade seems to be a matter of China exporting deflation to Japan along with the US doing the same thing. As Japan’s commerce withers and its economy deflates its currency rises (the Iron Law, again). Perhaps the FX market is pricing yuan appreciation into the yen?
The Bank of Japan (BOJ) is buying dollars like a madman – and the People’s Bank of China is also ‘intervening’. Is China selling dollars to Japan or crowding the dollar market? Whatever the BOJ is doing, it’s not working. It can’t as the real, physical economy drives ‘money’ value, not the other way ’round.
This is the front month yen courtesy TFC Charts:
To a large degree the BOJ has painted itself into a corner. Japan relies on the yen carry trade as a key element of its finance strategy. They are losing the carry business to the Americans who have Planet Bernanke while the BOJ has ‘Joe Somebody Else’. What is likely and ironic is the onrushing currency volatility will kill the carry trades. Why not? What is unsustainable – like a cheap yen – will not be sustained.
Just a thought …
