[DantesPeak]

Losing a couple million barrels a day would probably precipitate it. .

I'm not so sure. We've already lost 1 Mb/d and havent even seriously begun to cut back. I'm pretty sure the US could drop another 2M b/d simply by trimming fat (excess, inefficient driving mainly).

The much touted drop in oil demand largely concerns mostly non-transportation uses of oil - such as heavy fuel oil, lube oil, asphalt, etc. The drop in transportation fuel use to date is not much more than 1%, and it took a huge rise in the retail price just to get it to drop that much.

I'm willing to predict that transportation products (gasoline + distillate) use will soon exceed last year's levels as the Midwest harvest season gets into full swing.

Just a 2 million bpd drop in transportation fuel use would probably depress the economy about 10%. I hate to think what happens after that. While you might call that trimming the fact energy wise, the millions of Americans losing their jobs then will call it a depression.

[MadScientist]

I agree with your assessment Dante, but frankly that 10% of the economy is fluffy service oriented crap that really has to go anyway. There's just no way we can maintain this fast food luxury economy of oversized everything.

The writing is on the wall, the signs are evident. Anyone too shortsighted, distracted, stupid, or unfortunate to adapt to current events will lose their American lifestyle and start living like mexican_01.

[ROCKMAN]

MS,

I also agree with you and Dante. We have a lot of energy "fat". But, while we all might agree that there is a big slice of disposable industries out there, we're still left with dealing with the consequences. Whether we loose 15 million steel and auto jobs or 15 million fast food and Starbuck jobs it's still has the potential to be a big unemployment surge. In a sense, loosing these low end jobs will be more difficult to deal with then more skilled workers who could more easily re-assimulate themselves into the work place. This will sound harsh but what are you going to do with millions of relatively uneducated folks with no real skills. You're not going to put them to work building solar panels or wind turbines. We can blame them for not preparing themselves better but that doesn’t change the impact they’ll have on the social safety net system. It also won’t matter whether anyone agrees with the idea of the rest of society supporting them or not. Unless we ship them off to camps they’re going to be living along side of us daily. Even a relatively slow collapse will be too fast to redirect these folks to a more productive path. Whether we retrain, support or lock them up they’ll still require a good bit of our resources. While I do find it amusing to listen to the doomers ramble on about the roving bands of zombies, this seldom discussed group of PODP’s (PO Displaced Persons for those who remember their WWII history) may be one of the most significant issues.

It would be one thing to blow away some creep trying to take your stuff in a PO world. That’s an easy calculation. But what do you do with millions of PODP’s that are sucking a big chunk of our remaining resources out of the system: shoot them too? Or let them suffer/starve? If it’s the latter choice we each should buy a few more cases of ammo.

[Roccland]

But what do you do with millions of PODP’s that are sucking a big chunk of our remaining resources out of the system: shoot them too? Or let them suffer/starve? If it’s the latter choice we each should buy a few more cases of ammo.

One mirrors and models what the rich are doing...arctic seed vaults, ranches in paraguay, weather mountain...

[ROCKMAN]

True roc but then I was focusing on the 90%+ of us who don't have the hacienda in Paraguay. We're the ones who'll be stuck dealing with the unemployable mass.

Note to self: check out real estate values in Paraguay.

[Roccland]

True roc but then I was focusing on the 90%+ of us who don't have the hacienda in Paraguay. We're the ones who'll be stuck dealing with the unemployable mass.

Note to self: check out real estate values in Paraguay.

Someone has to die...right?

[MadScientist]

This will sound harsh but what are you going to do with millions of relatively uneducated folks with no real skills.

A) move back in with their boomer parents. this will add to demand destruction and bring families back together. Living with your parents needs to become cool again.
B) Go on welfare. this will shorten the lifespan of the WAWKI. until that day, the welfare check will get more and more subsistence level.
C) labor job. you're right, they wont be building hightech renewables. They'll be doing low energy labor for bologna sandwiches and mac n cheese. Remember we are in a collapsing energy world, not expanding energy world.
D) join the military. see B

and we're only talkin about 10%. What about 30%? What about boomers who wanna retire but cant? What about kids who cant afford college?

In some ways the people who are losing their jobs now are better off. They'll have more time to adjust before TSHTF.

[vision-master]

B) Go on welfare. this will shorten the lifespan of the WAWKI. until that day, the welfare check will get more and more subsistence level.

Cash assistance $197 Month!

[ROCKMAN]

Oddly enough MS I'm with the "let it happen sooner" camp for one simple reason: I'm 58 yo with an 8 yo adopted daughter. I would rather see TSHTF soon while I'm still watching over her and can help direct her life in a sustainable way. All of her relatives are up in years so she won't have any family when she's in her late 20's or 30's. Hopefully by that age the economy is well into adjustment.

[patience]

MadScientist,

Re: "...relics of the oil age".
Yup, sure are. I guess that's my point, that those things aren't viable anymore, so in order to have any kind of flourishing economy, even at a much lower level, requires a whole new paradigm. What we have had is gone, period.

And the only significant source of wealth that I can see for the future US is in agriculture. Maybe we can put some out of work mortgage writers out in the fields with a hoe?

[roccman]

MadScientist,

Re: "...relics of the oil age".
Yup, sure are. I guess that's my point, that those things aren't viable anymore, so in order to have any kind of flourishing economy, even at a much lower level, requires a whole new paradigm. What we have had is gone, period.

And the only significant source of wealth that I can see for the future US is in agriculture. Maybe we can put some out of work mortgage writers out in the fields with a hoe?

Mortgage guys have spent the last 10 years in the field with these hoes:



Guess you were thinking something more along these lines...eh?

[ROCKMAN]

I hope you're right about the rural up tick patience. I've helped my ex set up on a small patch of land in the country near her kin. My 8 yo wants to be a vet. Hopefully in 15 or 20 years there will be a lot more daught animals and cattle working. And next spring I'll be teaching her how to hunt turkeys. An additional skill to be valued in the future perhaps.

[patience]

ROCKMAN,

I wouldn't bet that agriculture will be a bountiful life, but it's the only game in town that I can see, unless we can come up with another way to sell debt to other countries.

[ROCKMAN]

My kid won't make much of a living farming two acres. It's just more the idea of not being trapped in a big city infrastructure that's cannot sustain itself. It also doesn't hurt that she lives in the middle of the Texas oil patch with her mom working for a company building drilling rigs.

She's already tending some lemon bushes I planted for her. She has her biz plan: the boy next door will harvest, squeeze and make the lemonade. She'll sell it and pocket the profit. I've trained her well, eh?

[BigTex]

So the plan is for her to take lemons and make lemonade?

That's probably a little optimistic for this crowd.

[ROCKMAN]

Perhaps Tex. But my plan also includes giving her a 20 guage next spring and having her make me turkey salad sandwiches. A man should plan for his old age, shouldn't he?

[vision-master]

Elvis to this? Next you will be hanging in "out of this World".

[shortonoil]

China starts imploding - boasting $

Beijing swells dollar reserves through stealth "During the first half of this year, about 67,000 small and medium-sized companies went bankrupt throughout China, leaving more than 20m people out of work," said the National Development and Reform Commission. "Bankruptcies of textile and spinning companies have numbered more than 10,000. Two thirds are on the brink of bankruptcy."

Telegraph


China is hitting the energy wall! It will become know as the largest mis-allocation of resources in the history of civilization. China’s gargantuan growth was based on a Ponzi scheme of unprecedented magnitude. Once China quits growing, it collapses. Once China collapses the insolvent Western economies will soon follow!

A vast supply of dollars, that will need repatriating, will flood back into a US economy hamstrung with a broken credit market. Those dollars will be demanding resources that we do not have!

[threadbear]

---India is withdrawing hot air from the global economic bubble, too. Oh, Chindian consumer, wherefore art thou?

Wall Street Journal:

They were wrong, as both large and small retailers are discovering. For some, the forecast retail boom that promised jobs for Indians and a new market for global retail giants is already a bust.

"I was an eternal optimist; now I have become a realist," says Kishore Biyani, chairman of Pantaloon Retail India Ltd., India's largest retailer by sales, which has revamped its expansion plans as it discovered more about Indian consumers. "Everybody has miscalculated."

http://online.wsj.com/article/SB1219697 ... lenews_wsj

[shortonoil]

Credit crisis II
A world financial Armageddon?
by Christopher Laird, PrudentSquirrel.com

Whether it’s the Chinese Central Bank (BOC), the Fed, the ECB, and then all the other world financial institutions of every type, insurance companies, gigantic retirement funds, other banks, you name it, the present losses of capital to the world financial system is pervasive worldwide.

Nobody will escape the wrath of this deleveraging, and that is why I call it Credit Crisis II. Credit Crisis I was only the preliminary round…Credit Crisis II is characterized by the realization that the gigantic losses of capital cannot be purged from the financial system, even with big public bailouts. And that this deleveraging cannot be stopped. There are too many interlinkages. And, without writing a book on this, the next victim when Credit Crisis II unfolds, will be massive world currency instability. This will make any of the banking and currency crises we have seen since WW2 look like child’s play. It is not clear when Credit Crisis II begins but it is threatening already.

Laird

Laird is saying that the world’s financial system is now leveraged 60:1, and just F&F have $2 trillion in bad debt (probably more). He is saying it is costing the CB $100 billion a week to keep the whole system from unraveling, at some point they will have to stop and the situation is getting worse not better.

“The question now becomes, what happens when these two central banks finally decide they have to let go? You are not going to tell me they are going to keep infusing a combined $50 to $100 billion worth of financial bailouts each week forever? This massive temporary lending certainly has to end at some point.”

But, but, but .... it's contained!