How bad a crash are people expecting?

TylerJC · Guest

This effects all planing decisions. I've looked at the site and most people believe one of these.
#1Total immediate collapse: riots, looting, and all that "good" stuff Sad

.
#2A moderate soft landing where everyone works together to create peace in the future, with a few looters. The looters eventually stop or die off.
I don't think either are likely.

I think the third kind of crash is the most likely. The wealthy and anyone else who knows about this will prepare for the worst and hope for a soft landing. If the world was only made up of these people, we wouldn't have a problem in the first place. The biggest concern is what happens to everyone else and what does The Government do.

In the most likely scenario, the government realizes there is a problem. This happens the year of peak oil. It's too late to do any long term planing for The People. The unprepared will listen to what the government tells them. Cut back on consumption. Ok, we do that. Cut more consumption and join the army. Ok, we do that. Join the army, fight in Saudi Arabia, oh, and cut consumption. Each step becomes harder and harder to do. More and more people lose everything and join the ranks of the underclass. Remember, a 3% decline in a year isn't that much. But when you add that up after 5 years, we're in tough shape. The soft landing that the government desperately wants begins to become a bumpy ride.

5 years later. What was once an orderly transition becomes a bit less orderly. Food shipments start slowing down. The cities become dangerous. (At this point, the suburbs are mostly empty). Inflation is rampant. The government has to pay the bills somehow. However, the situation still isn't in total anarchy yet. In most countries, there is a depression going on and people believe it will end shortly. After this point, I'm completely guessing.

Hope fades as time passes. Currency is totally worthless at this point. This is roughly year 15 (post peak). The government has a lot less power now. They can keep a general check on invaders from other countries but the wars in the Middle East ended horribly. Most of the oil supplies were useless or destroyed because of fighting. Federal government collapses do to a lack of a communication/transportation system.

I believe what happens next is a return to the soft landing and an end of the need for oil. We return to a medieval type existence. Local lords give protection to the people in exchange for labor. Warriors protect the lords in exchange for gold/land/whatever. There aren't really any serfs, but no one wants to leave the protective confines of the Lord's land. Think of a bunch of small empires. That doesn't sound too terrible, does it? We could eventually build back up to a 1850's style of living; powered by wind and water, not coal and oil.

If anyone has any thoughts on my scenario, I'd be interested to hear them.

One extra thing, the empires might try to capture eachother so that one would have all of the good farmland. This might cause some problems, but none that can't be solved by joining the strongest empire :D .

jato · Posted: Sun Sep 12, 2004 2:22 am Post subject:

In general terms, this is how I see it happening:

http://wolf.readinglitho.co.uk/mainpages/whattodo.html

Not much different from your idea.

I believe in a hard crash... fast or slow.
_________________
"Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz

Guest

Most of the people here are paranoid/pathetic.

Facts:

1. The oil will not dissappear after the peak like cut with a knife.
It will just become expensive. There will be oil long after we
kick the bucket and hug the flowers.

2. There are many more non-renewable energy sources that will
bridge the gap to renewable.

3. Renewables are viable options.

Results:

Governments will build a bunch of coal and nuke plants.
Major fuel efficiency laws will be passed.
Alaska will be drilled like a piece of swiss cheese.
(All environmentalists opposing that will be called subversive terrorists,
sabotajeurs or whatever, and sent to Alaska and Siberia to drill)

Major investments in renewables will be made.

Eventually most of the energy needs will be bridged from hydrocarbon to renewables.

Oil will be used only for synthetics, and meanwhile renewable sources of synthetics will be developed, most probably a result of microbial cultures, genetic engineering, nanotechnologies, etc.

It will be difficult, but no gloom and doom. Sorry to piss on your parade. Go get a university degree, get a stable job, and save money for the hard times. No need to dig a bunker, buy a gun and stock biscuits, unless this really turns you on. And take that picture with your favorite rifle off the wall, makes you look really stupid. If you really want to shoot, go to the army.

Cheers,

jato · Posted: Sun Sep 12, 2004 3:00 am Post subject:

TylerJC · Guest

Let's say you are right. Renewables become economically viable. The price of oil effects the price of solar power. Oil is used to make the plastics that are used for the solar panels. Basically, the "low" cost of solar power today is a direct result of the relatively cheap cost of oil.

Coal and nuclear. Sounds like a good bridge from oil to renewable. If you increased the use of these two sources, where would the coal and uranium come from? These two resources have a production peak of their own. Also coal mining trucks use oil. Nuclear plants require lots of plastics. Coal is cheap only because diesel fuel for the trucks and equipment is cheap.

In order to maintain the economy at a flat rate, nonoil energy production will have to increase by 3% a year. I don't really see this happening. If we want economic growth, we have to increase this by more than 3% a year and that is almost impossible. The current economic system will crash if it can't get enough energy.

One more thing, debt. America has more debt than it could ever pay off, even if we had strong economic growth (which ain't gonna happen). As we slide into energy-price-hike caused recession, the government will be starved for cash. They will either print more money (circa 1979) or try to tax their way out of bankruptcy (circa 1933). Neither will work. You can't print money forever without it turning into "money" (circa 1922 Germany). And tax hikes on that scale will impoverish the people or cause open revolt.

tdrive · Heavy Crude Joined: Jul 11, 2004 Posts: 350

jato · Posted: Sun Sep 12, 2004 1:15 pm Post subject:

MarkR · Posted: Sun Sep 12, 2004 2:10 pm Post subject:

Smé@gol · Guest

I am a french teenager so please forgive me if a make mistakes.

tdrive · Heavy Crude Joined: Jul 11, 2004 Posts: 350

Barbara · Posted: Sun Sep 12, 2004 4:32 pm Post subject:

Peak Uranium: 2025 (at current consuption rates)

Sme@gol:
welcome! Glad to find another European! Smile

_________________
**no english mothertongue**
--------
Objects in the rear view mirror
are closer than they appear.

MonteQuest · Posted: Sun Sep 12, 2004 4:35 pm Post subject:

jato · Posted: Sun Sep 12, 2004 4:57 pm Post subject:

tdrive · Heavy Crude Joined: Jul 11, 2004 Posts: 350

Jack · Dark Lord Joined: Aug 11, 2004 Posts: 4957

TylerJC, I've been enjoying a discussion with MonteQuest on another thread, and your points have triggered a further thought.

I think that we need to adjust our scenarios for a variety of venues. In areas that regard the digging stick as the height of technology, life won't change much. They live at a bare subsistence level today, they will tomorrow.

The more affluent developed countries - the U.S. and Europe, for example - will, in my opinion, come closer to your preferred scenario, but over a longer time period. I'd guess it would be about 25 years due to conservation and use of coal. The environment will probably be an early casualty, with atmospheric carbon levels higher than we may wish to think about.

Within the U.S. - I claim no knowledge of Europe, though I'd love to learn more - we presently are developing two distinct underclasses. One is inner-city, often Black, and frequently lacking in any viable opportunity. The other is Hispanic, with a subset unable to speak English and no particular desire to integrate into the greater society. A reference for these comments is "Who Are We" by Huntington. As the U.S. economic situation worsens, I expect the various groups to be in conflict. Then again, there are today some places in various cities that I wouldn't care to go. Frankly, there are places even the police avoid. So I anticipate that those areas will expand as matters get tougher.

The affluent classes in the U.S. will do reasonably well. This weekend, one subdivision sold 5 houses in the just under $2 million dollar price range - and this was in San Antonio, Texas, where a great many people raise families on $24,000 per year or less. Let me add some emphasis - those houses went from no offers to legitimate offers to purchase by qualified buyers in one weekend. So the people who bought the houses mentioned above will cope well enough. There will be a modicum of bread and circuses - along with ever more pervasive police - to control the unemployed and underemployed. I suspect the pattern will be broadly replicated.

A third group are the developing countries such as India and China. I suspect they'll experience the hard crash first, and how they react will be fascinating. Dangerous too, I imagine. Mexico has oil, so it may be in better shape than many other developing nations - and, perhaps, will serve to halt those further south in coming to the U.S.

So, with all due respect to MonteQuest - I think a hard landing will occur, just not in the U.S. or Europe. A softer, but not necessarily truly soft, landing will happen in the U.S.

We'll probably see more wars, more climate change, and a great deal more facism.

Finally, the large players are not yet of the opinion that Peak Oil is here. Please take a look at
http://quotes.ino.com/exchanges/?r=NYMEX_CL and scroll down to the December, 2009 contract. The price isn't very high for 5 year forward contracts. Since large players (producers, industry) often hedge their positions, it seems likely that they are completely sincere in their opinions. After all, they lose lots of money if they're wrong.

So, as I say, I believe we have a bit more time to go. Or, perhaps, an historic opportunity to go long crude Laughing