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.
What will you cut back on to compensate for higher energy prices?
Travel
29%
[ 94 ]
Eating out/Entertainment
27%
[ 89 ]
Groceries
0%
[ 2 ]
Purchases of capital goods
10%
[ 33 ]
Tech Toys: Cell phones, cable TV, etc.
23%
[ 77 ]
Investments
3%
[ 10 ]
Recreation
5%
[ 18 ]
Total Votes : 323
Author
Message
sparky Tar Sands
Joined: Apr 09, 2007 Posts: 98
Posted: Fri Mar 21, 2008 3:21 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
.A farmer who go broke is a farmer who borrowed, as Mr bill said
" But what the genuine farmer cannot afford to do is to pay those inflated prices if long-term he has to generate enough of a return on that land to pay back his or her credit using only income generated from the farm. So in the short-term he may be out bid. "
while farming will easily outbid the city folk for oil products they can't out-bib them for cheap credit. I'm not quite sure why
but the price differential between urban land and farm land is a good indicator , it's probably around 50 / 1 , being re-zoned is for the land owner like winning the lottery, a belt of vegetable producers around the big cities was a common feature until the age of oil AKA... the transportation revolution
It made distance a lesser factor than labor price .
An Australian ( ? ) saying
the fastest way to loose a fortune is gambling ,
the nicest is women
the surest is farming .
Posted: Sat May 10, 2008 4:03 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
I am a confirmed peak oil believer and I watch every day as the oil price climbs and wonder if this is the beginning of it. Ofcourse it could fall back and the true beginning of the peak oil event may not start for another 10 years.That is what is so fascinating. How will you know when it is really kicking off? What will be the signs? And then what should we do when it starts to get ahead of the game.Getting a smaller car is obvious. But what about the impact on international travel costs.How soon does it become uneconomical to buy Chinese goods for instance How soon does imported food dry up.Will the value of my money slowly decline or will it crash. What can the individual do?
Joined: Dec 27, 2004 Posts: 11345 Location: Village of Idiots
Posted: Sat May 10, 2008 6:14 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
4tangent wrote:
What can the individual do?
See the Planning Forum! Which is more like the Taking Action Forum. _________________ "...powerdown so soft and fluffy you'll think you're living in a pillow..." - jboogy
Posted: Wed May 21, 2008 4:08 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
Unfortunately I will be requiring transatlantic flights (NY to UK) until spring 2012. I'll find a way, by hook or by crook, to make it work. _________________ Only a city man would carry a bag of iron instead of a bag of rice.
-Ling Tan, from the movie Dragon Seed, 1944 (more wisdom from Turner Classic Movies)
thanks for the pics.
I've never seen a maple syrup farm before.
Revi wrote:
I think that the backyard garden and chickens will make a comeback too. Call it a hobby farm, but I'll call it food.
http://www.microecofarming.com/
I'm too lazy to do yard work and I'm a city slicker. I might not be eating the 3,000 mile caesar salad post PO but I should be able to afford the 3,000 mile beans and rice! There are people who live in the 3rd world today in cities and even they can afford to buy food shipped in from long distances.....so there's no reason why somebody in the 1st world would ever literally must have a garden, but it wouldn't hurt.
However one thing is for certain, there will be a lot more home cooking using raw ingredients instead of pre-packaged foods.
Posted: Sun May 25, 2008 6:56 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
I was just wondering if there is a list here on what jobs will fall first compared which ones will go lasst. I deliver beer and liquor for a local supplier. I think mine will be ok for a while because people want to drink, the majority of the customers I deliver to are in poor depressed areas already. what are you opinions are on alternate fuel like hydrogen or ethanol?
Posted: Thu May 29, 2008 4:08 am Post subject: Re: The Near Term Economic Effects of Peak Oil
As the economic noose of post peak oil resource depletion and climate change tightens one can only wonder whether we will also witness a peak aid giving and a peak international cooperation coinciding with that fall in economic activity with lower living standards for the vast majority as well.
Quote:
The editorial also accused the international community of being stingy, noting that the United Nations' $201 million "flash appeal" was still a long way from being full nearly four weeks after the disaster, which left 134,000 dead or missing.
The level of aid stands in stark contrast to the 2004 Indian Ocean tsunami, when outside governments promised $2 billion within a week of the disaster.
"Myanmar needs about $11 billion. The pledging amounted to over $150 million, less than the $201 million mentioned by U.N. Secretary-General Ban Ki-moon as emergency aid," it said, adding a thinly veiled swipe at arch-enemy the United States.
Yes, wouldn't Myanmar's corrupt Generals love to get their greedy hands on $11 billion worth of foreign aid. With no strings attached or monitoring on how it is doled out naturally. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Surging oil prices are beginning to cut into the profits of a wide range of American businesses, pushing many to raise prices and maneuver aggressively to offset the rising cost of merchandise made from petroleum.
Airlines, package shippers and car owners are no longer the only ones being squeezed by the ever-mounting price of oil, which shot up almost $11 a barrel on Friday alone, to $138.54, a record.
Companies that make hard goods using raw materials derived from oil, like tires, toiletries, plastic packaging and computer screens, are watching their costs skyrocket, and they find themselves forced into unpleasant choices: Should they raise prices, shift to less costly procedures, cut workers, or all three?
The Goodyear Tire and Rubber Company is trying to adapt. Its raw material of choice now is natural rubber rather than synthetic rubber, made from oil. To sustain profits, it is making more high-end tires for consumers willing to pay upwards of $100 to replace each tire on their cars.
These steps have not been enough, however, particularly now that the cost of natural rubber is also rising sharply, along with that of many other commodities. So Goodyear has raised the prices of its tires by 15 percent in just four months.
“Our strategy is to raise prices and improve the mix to offset the cost of raw materials,” said Keith Price, a Goodyear spokesman. “No one has predicted how long we can continue to do that.”
The sense that many companies may be hitting a wall is palpable. Corporate profits peaked last spring and have shrunk since then, Moody’s Economy.com reports, drawing on Commerce Department data.
good article... I recommend the remainder of it as well. Companies seem to have transitioned into a state where they expect price inflation to continue into the future.
Posted: Sun Jun 08, 2008 12:15 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
The choices of what to do without are urban choices. Living in the wilds away from a large urban center, there is no travel or vacation because who would milk the goats were I not here or feed the guineas or the goat guard dog? With the nearest restaurant 50 miles round trip, that was once a week and now probably once a month due to gas prices so I guess eating out is my giving up.
As to population, those that can survive the long hours of work required to feed themselves will be needed. Do the statistics on numbers of people needed to produce food before big John Deere and artifical pesticides, fertilizers, and herbicides. I spend many hours pulling weeds, composting, caring for insectivore poultry, collecting cattle manure, mulching the garden from the barn litter, and I am usually always dead tired at the end of the workday. I fall asleep watching the weather reports in the hopes of some rain. I spend a lot of time reading how to do all this and I have not even begun to store up in a non-refrigerated food supply method, i.e., canning or root cellaring (even if I could dig out the boulders required to build one).
The problem is not too many people, but too many people doing the wrong things with no structure to get those people doing the right things, like retrofitting agriculture large scale to small scale. Those of us trying are overwhelmed with the volume of work and the lack of anyone who wants to do it, hence immigration farm laborers because all you urbanites want to sit around discussing things instead of picking up the manure forks and getting to work.
But you can tell times are 'a changing when one of the investment stations allowed a "real" farmer to discuss what to invest in (with smug sneers by the New York investment experts). The "real" farmer recommendation--would you believe Monsanto? How's that for being totally, completely out of touch with reality? Monsanto means dieoff, which is okay with me. Anybody who invests in Monsanto should die off and leave the earth to those who will take care of it.
Posted: Sat Jun 14, 2008 6:20 am Post subject: Re: The Near Term Economic Effects of Peak Oil
hayseed,
"..Too many people doing the wrong things..."
Agreed. I think this will sort itself out, as things change, but it will be messy.
I deal with farmers in my repair business. Few, if any I know, truly understand the problems we have now, and none have solutions in mind, except for reacting to cost/price pressures. Even the oldest farmers, who started long before chemical farming, don't understand PO and its' implication, although they may be doing some of the right things for the wrong reasons. That is, they are reverting to old ways to save money, such as crop rotations and away from monoculture. But they don't have a clue about PO, and are blaming politicians, oil companies, or whatever.
So, I see the biggest problem being to correct the thinking of the general public, and farmers in particular, so they can make decisions based on the facts. Hard to do with so much misinformation out there. I try, and even have some credibility with my customers, but I don't get very far. Everyone is fixated on the symptoms (high prices for ag inputs), and can't see past them. _________________ Local fix-it guy..
Posted: Wed Jun 25, 2008 8:55 am Post subject: Re: The Near Term Economic Effects of Peak Oil
Price spirals as feedback loops start to re-inforce one another starting with higher energy prices.
Quote:
"The commodity boom is itself a part of the demand for steel," Thurtell said. "Demand for steel to build Mideast refineries is astounding."
The sharp rise in iron ore prices continued to ripple through Asia on Tuesday. Nippon Steel denied a Japanese press report that said it had agreed to pay BHP Billiton double the amount in its previous contract.
ArcelorMittal, the world's largest steel maker, in May said it was raising prices in Europe as production costs had risen by as much as $500 a ton. The company, which is aiming to control costs by obtaining control over the majority of its iron ore production, signed a deal in April with the Brazilian miner Vale under which it would pay 87 percent more for iron ore from that company.
ArcelorMittal said the price of coking coal had risen 550 percent since 2005, while iron ore prices had climbed 360 percent, even as market prices for steel rose less than 200 percent. Prices for scrap iron have risen 220 percent, putting the cost of the raw material above the price of finished steel in some contracts. That development puts great pressure on steel producers to renegotiate existing contracts to a level at which they can at least break even.
Posted: Thu Jun 26, 2008 10:47 am Post subject: Re: The Near Term Economic Effects of Peak Oil
Yup, the core of the predictions made here over the last few
years is playing out like the script from a play now (save for
the carnivorous zombie herds) and the trolling and heckling
deniers are mighty scarce. But before folks tackle sensible
living arrangements they are going to have to crash into
reality about 10 consecutive times before they abandon
the mindless convenience they have enjoyed for so long.
Just as those who put their money on petroleum prices
made out like bandits over the past two years, the next
thing is to position our personal lives as much as possible
in positions that are overlooked but will be crucial as
what Albert Bates calls "The Great Change" rolls forward.
Consuming less is the only way to counter this trend,
and it does not come natural to 'Mericans at all.
Posted: Thu Jun 26, 2008 9:22 pm Post subject: Re: The Near Term Economic Effects of Peak Oil
>>>>>>MonteQuest
The end of cheap fossil fuels is going to have some dire repercussions. I'm not sure how accurate mine might be, but it sure is a place to start a discussion. Let's try to focus on the near-term effects. We are seeing some of them already in inflation and rising interest rates. And let's assume we don't have a Murphy's Law event right away to start a domino effect that leads to chaos, ok?<<<<<<<<
I think it will go like this:
Reduced consumer spending
Unemployment
Further Reduced consumer spending
Soaring energy prices are forcing Procter & Gamble to rethink how it distributes its products, with the world’s biggest consumer goods company shifting manufacturing sites closer to consumers to cut its transport bill.
Keith Harrison, head of global supply at P&G, the maker of Tide detergent, Crest toothpaste and Pampers, said the era of high oil prices was forcing P&G to change.
“A lot of our supply chain design work was really developed and implemented in the 1980s and 1990s, when our capital spending was fairly high as a cost of capacity and oil was 10 bucks a barrel,” said Mr Harrison in an interview with the Financial Times.
“I could say that the supply chain design is now upside down. The environment has changed. Transportation cost is going to create an even more distributed sourcing network than we would have had otherwise.”
Earlier this year, P&G launched a comprehensive review of the design of its entire supply operations in response to rising energy costs and its increasingly global expansion.
“We’ve kicked off a study that really asks: what is our business going to look like in 2015?” he said.
Posted: Fri Jun 27, 2008 2:59 am Post subject: Re: The Near Term Economic Effects of Peak Oil
I guess the Tide has turned against their old supply chain. But they cannot Pamper their old suppliers as it looks like we are on the Crest of permanently higher energy prices now. Procter should not Gamble that the situation will be any better in 2015. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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