Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Thu Oct 18, 2007 4:05 pm Post subject: Re: I think I can do this ...
BobWallace wrote:
We can't deal with a 4% contraction?
That's just silly beyond silly.
First, little of our electricity comes from oil.
Second, we can conserve way, way, way more than 4% with a bit of car pooling and walking that block to the minimart.
Get a grip.
It's bad enough when someone takes a nasty tone, but when they do it while making such a blatantly uninformed argument...
It doesn't appear that you recognize that we're not talking a one-time reduction of 4%, but year after year. That means that after only ten years we are talking 40% less than the starting point.
Likewise the 4% reduction each year is not to be made only by the end-consumer who now must deal with 4% less gasoline in his tank. Instead, each step along the path is dealing with that decrease -- which becomes additive of course.
for example -- the resource extraction people increase their prices to counter their increased fuel/energy expenses. So, the manufacturers then doubly increase their prices to compensate for both the increased fuel costs AND the increased raw materials cost. Then the distributors trebly increase their prices, to account for the increased raw materials AND increased manufacturing costs not to mention their own increased energy costs. Then the retailers increase THEIR prices yet a fourth step, et cetera et cetera ad collapseum.
Rinse and repeat the next year, and the next, and the next.
Now, as soon as these increases hit a weak part of the infrastructure...
BOOM.
"Get a grip" indeed... _________________ "It's not that hard times are coming, it's that soft times are going."
Posted: Fri Oct 19, 2007 10:44 am Post subject: Re: I think I can do this ...
Auntie_Cipation wrote:
BobWallace wrote:
We can't deal with a 4% contraction?
That's just silly beyond silly.
First, little of our electricity comes from oil.
Second, we can conserve way, way, way more than 4% with a bit of car pooling and walking that block to the minimart.
Get a grip.
It's bad enough when someone takes a nasty tone, but when they do it while making such a blatantly uninformed argument...
It doesn't appear that you recognize that we're not talking a one-time reduction of 4%, but year after year. That means that after only ten years we are talking 40% less than the starting point.
Likewise the 4% reduction each year is not to be made only by the end-consumer who now must deal with 4% less gasoline in his tank. Instead, each step along the path is dealing with that decrease -- which becomes additive of course.
for example -- the resource extraction people increase their prices to counter their increased fuel/energy expenses. So, the manufacturers then doubly increase their prices to compensate for both the increased fuel costs AND the increased raw materials cost. Then the distributors trebly increase their prices, to account for the increased raw materials AND increased manufacturing costs not to mention their own increased energy costs. Then the retailers increase THEIR prices yet a fourth step, et cetera et cetera ad collapseum.
Rinse and repeat the next year, and the next, and the next.
Now, as soon as these increases hit a weak part of the infrastructure...
BOOM.
"Get a grip" indeed...
Boom indeed!
My problem with this uniform number crunching is just that. It is uniform. Depletion will not affect all economies evenly. More importantly, it will not affect all minds evenly. The problem with Americans is that they truly believe in that their society is justified in prolonging its existence. They believe if they are on top, no one needs worry about Hitler or Stalin types anymore. Finally, they believe (rightly so) that their military is damn near unstoppable.
How will American's react when they find out preserving their world requires them to forcibly take from the rest of the world?
How will the people in emerging markets react when they are looking down the muzzle of an M-16 and being told they can't have any of the oil?
There are two emerging markets I would focus on. How will Russia and China react to a U.S. grab for the Middle East? Judging from recent pictures of Putin standing with Ahmadinejad, I would assume America will have an enemy. The sabre-rattling has already begun.
I suspect this will end up in World War LONG before we have to do any annual compounding. As we all know, a World War between the U.S. and Russia is M.A.D.
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