[Ayoob]

By using the rule of 70, you can quickly figure out how long it takes your money to double. There were a couple of situations that brought this up to me lately, and I think it applies to oil.

You take the number 70, divide a percentage number into it, and that gives you the doubling time. So, a 7%CD at the bank doubles your money in ten years, a 3.5% cd at the bank doubles in 20 years, and a 10% CD doubles in 7 years. Pretty simple, no? Also, take your doubling time, add one dollar to that number, and that was where you made the majority of the return on your investment, no matter how long it had been invested. It's the last doubling time plus one dollar.

If you start with ten dollars and invest at 10%, then you double every seven years. At the end of 70 years, your money had doubled ten times. It's all in the last seven years plus one day that you made the majority of the money, even though the vast majority of the time the money was invested was not in the last doubling time. Make sense?

At the end of 63 years, the vast majority of the time, you end up with $10,240. But, only seven years later, it's up to 20,480. Leave your money in for another day or two to make it up to $20,481 and it's easy to see that you made the MAJORITY of the gains on your position in the last doubling time.

Now let's look at half-lives. In my pharmacology book (I'm studying nursing right now) drugs have a half-life. Your liver and kidneys break down drugs circulating in your system at a steady pace. There is a fairly well-known half life to drugs. My book happened to mention that after five half-lives, there is about 3% of the original amount of the drug in the patient's body.

It took me a minute to draw the connection, but there it was.

Five halflives until it's pretty much not affecting the body anymore.

Let's see what the halflife of oil is given various depletion rates.

At 8%, the halflife of oil is 8.75 years.
At 5%, the halflife of oil is 14 years.
At 3%, it's 23.3 years.
At 2%, we're looking at 35 years.

Let's marinate in this one for a moment. If we can agree that the majority of the gain on the way up is made at the final doubling time plus one day, then I would imagine that we can agree that the majority of the loss occurs in the first half-life plus one day. We lose more on the first half-life than we will lose for the rest of eternity.

Take a look at those time spans again. Do we see 50 years on any of them? No, we do not. If you are under 30, then it is likely that you will see the first half-life of oil come and then you will see it go. What does that mean?

It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.

[Tanada]

You make an excellent point, the first halving is going to be the most traumatic event western Civilization has ever experienced.

[Twilight]

Thought-provoking, and yes, I would expect the first halving to be the most destructive. Thereafter, there would simply be progressively less to destroy. Since it takes time for changes in prevailing conditions to translate into distress, I would expect the worst to build up gradually over that period.

[MonteQuest]

It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.

"The greatest shortcoming of the human race is our inability to understand the exponential function."

Every day I read articles that assert we have nothing to worry about as the decline of oil will be slow and gradual....

What a wake up call that is coming.

[jboogy]

The maths a little beyond me but I get your point .I agree that it 's going to be the initial shock that's gonna mess us up the most,especially here in u.s.,america is totally and completely unprepared,were a relatively young country that's known very little in the way of suffering. the last time there was anything that could remotely be described as hardship was the depression,and that was a long time ago.this country is truly skipping down the primrose path with extra dark rose-colored shades.most people here have absolutely no frame of referance or historical perspective with which to even comprehend the possibility ,let alone the consequences ,of life without cheap abundant energy.A small part of me is looking forward to some of the more priveledged youth in this country getting a merciless education about what life is and can be like. Is this wicked of me?

[Tanada]

By using the rule of 70, you can quickly figure out how long it takes your money to double. There were a couple of situations that brought this up to me lately, and I think it applies to oil.

You take the number 70, divide a percentage number into it, and that gives you the doubling time. So, a 7% CD at the bank doubles your money in ten years, a 3.5% cd at the bank doubles in 20 years, and a 10% CD doubles in 7 years. Pretty simple, no? Also, take your doubling time, add one dollar to that number, and that was where you made the majority of the return on your investment, no matter how long it had been invested. It's the last doubling time plus one dollar.

If you start with ten dollars and invest at 10%, then you double every seven years. At the end of 70 years, your money had doubled ten times. It's all in the last seven years plus one day that you made the majority of the money, even though the vast majority of the time the money was invested was not in the last doubling time. Make sense?

At the end of 63 years, the vast majority of the time, you end up with $10,240. But, only seven years later, it's up to 20,480. Leave your money in for another day or two to make it up to $20,481 and it's easy to see that you made the MAJORITY of the gains on your position in the last doubling time.

Now let's look at half-lives. In my pharmacology book (I'm studying nursing right now) drugs have a half-life. Your liver and kidneys break down drugs circulating in your system at a steady pace. There is a fairly well-known half life to drugs. My book happened to mention that after five half-lives, there is about 3% of the original amount of the drug in the patient's body.

It took me a minute to draw the connection, but there it was.

Five halflives until it's pretty much not affecting the body anymore.

Let's see what the halflife of oil is given various depletion rates.

At 8%, the halflife of oil is 8.75 years.
At 5%, the halflife of oil is 14 years.
At 3%, it's 23.3 years.
At 2%, we're looking at 35 years.

Let's marinate in this one for a moment. If we can agree that the majority of the gain on the way up is made at the final doubling time plus one day, then I would imagine that we can agree that the majority of the loss occurs in the first half-life plus one day. We lose more on the first half-life than we will lose for the rest of eternity.

Take a look at those time spans again. Do we see 50 years on any of them? No, we do not. If you are under 30, then it is likely that you will see the first half-life of oil come and then you will see it go. What does that mean?

It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.

[truecougarblue]

Well put, Ayoob. Another tool in my debate belt.

[PenultimateManStanding]

The presumption of the OP is that we are talking about a continuous function. There is a distinct possibility that we won't have a continuous half-life situation. It may in fact be much worse than that and quite a discontinuity. Decision makers at the top are showing ever increasing signs of panic. A half-life situation modeled on radioactive decay may not turn out to be the best model. Of course, the radioactive decay model may show up at some point. . .

[Kristen]

It's hard to know what willl happen. There's so many conflicting viewpoints.

[Ivan_M]

i agree with PMS. the halflife model of decay works if you assume that production will remain at the maximum output possible all the way down the curve. for that assumption to work you have to believe that people will behave rationally and responsibly.

that makes it a very bad assumption.

[Kristen]

i agree with PMS. the halflife model of decay works if you assume that production will remain at the maximum output possible all the way down the curve. for that assumption to work you have to believe that people will behave rationally and responsibly.

that makes it a very bad assumption.

Well luckily they're cutting down production.

[Tanada]

i agree with PMS. the halflife model of decay works if you assume that production will remain at the maximum output possible all the way down the curve. for that assumption to work you have to believe that people will behave rationally and responsibly.

that makes it a very bad assumption.

This also means that the scary halflife model is the best case scenario.

Excellent point, and a rather terrifying one at that.

[jupiters_release]

i agree with PMS. the halflife model of decay works if you assume that production will remain at the maximum output possible all the way down the curve. for that assumption to work you have to believe that people will behave rationally and responsibly.

that makes it a very bad assumption.

This also means that the scary halflife model is the best case scenario.

Excellent point, and a rather terrifying one at that.

Since grocery stores and gas stations will be defunct long before the first halflife, the scariest question is at what point between today and the conservative estimate of 8.75 years will insurmountable feedback cause TStopermanentlyHTF? Can it even go beyond another 3 years at 8%, considering that's only around 67 mbpd? Honestly I'm surprised we can still buy food and gas right now.

[PenultimateManStanding]

Honestly I'm surprised we can still buy food and gas right now.

As you know, JR, since you joined about a year after me which was quite a while ago, my contention has been all along that we are not going to have some long drawn out centuries long decline like Rome. Basically I'm just agreeing with Matt Savinar and other thoughtful people who have concluded that the moment we stop growing it all falls apart. I think this is the reason that TPTB are not letting the banks fail at all costs in spite of observers who say we have to let them fail and pick up the pieces afterward. I'm not an expert, but from what I've been able to gather it isn't going to work.

[kpeavey]

The arithmetic is right. The greatest gain and loss is in the first halving time and the last doubling time. Translating the arithmetic to reality is a little more fuzzy.

A global free market economy requires growth. Economic growth requires growth in energy production and resource consumption. Regardless of the rate of decline, once energy production or resource consumption rates stop growing, the whole economic system MUST fail.

Extend this argument to include the fact that it is the global free market economy which provides the goods and services (food, heat, shelter, medicines, transportation, defense, law and order) necessary for the survival of billions of people.

It means that the majority of the damage to our economy and our way of life, and of the supply chain that brings goods and services to us, will happen in the first half-life.

Makes perfect sense to me.

[PenultimateManStanding]

Makes perfect sense to me.

You've been here longer than I have by a month. It was all theoretical back then. I first got the sense of "OK this is it!" in August 2007. Suddenly we started getting alarming news. Since then it just keeps getting worse.

[kpeavey]

I'm moving north in 2 days to help put together a peak oil resistant, self-sufficient, sustainable farm.

[jupiters_release]

Honestly I'm surprised we can still buy food and gas right now.

As you know, JR, since you joined about a year after me which was quite a while ago, my contention has been all along that we are not going to have some long drawn out centuries long decline like Rome. Basically I'm just agreeing with Matt Savinar and other thoughtful people who have concluded that the moment we stop growing it all falls apart. I think this is the reason that TPTB are not letting the banks fail at all costs in spite of observers who say we have to let them fail and pick up the pieces afterward. I'm not an expert, but from what I've been able to gather it isn't going to work.

I think the banks were meant to fail, derivatives were a wealth expropriation scheme and these 'futile bailouts' are to further consolidate the position of their ultimate beneficiary(obviously not the banks themselves). These dead banks are just being gamed as an excuse to continue the fraud contrary to the public relations story we see in the media. My favorite is even common here on this forum - "black hole" - trillions of dollars simply disappear, no one actually receives the money. A sophisticated three-card monty, the money-card gets slipped into outer space.

[Ayoob]

How did you guys dig this one up from the grave? This was from three years ago!