Jeff Rubin....Oil $225 by 2012 (Good Vid)

[Jay]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

So, are carbon taxes about Climate Change or about Peak Oil?

They are about Green Imperialism. "Climate change" is the tool to get the public invested in the idea. Cheap oil is the forcing function, we rode the last cheap credit, globalization horse as far is it would go. Now the trick is to put her away in the barn hot and wet and take the new green horse out for a spin without civil unrest domestically and internationally. The carbon tax is the new Opium War.

[dbarberic]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

So, are carbon taxes about Climate Change or about Peak Oil? Or maybe Climate Change is the politicaly correct name for Peak Oil?

This idea has been discussed for awhile on the Peak Oil specific message boards. The more and more I dig into the details and arguments for Global Warming/Climate Change, the more I am convinced that it is indeed a "sales" tool to get the consumption of all energy down using a politically palatable message.

With the gazillions being spent on national security analysis by the major developed countries, it is inconceivable that the highest levels of military and government are not aware of the impending oil crunch situation. Look at what they do, not what is being said (Air force is testing synthetic jet fuel, Army is setting up solar at bases and testing hybrid transport vehicles, etc).

If you are the government of a 1st world country, how do you tell the citizens that conventional oil has peaked, energy prices will be continuously increasing, and consequently just about everything you eat, touch, use, and consume will be increasing in price? How do you explain to your citizens that your country's GDP has probably also peaked and that your children will probably never have the same opportunities that you had?

It is much easier to convince the public that there is an environmental crisis and to do their part to fix it, they must consume less. The irony is that a carbon tax is basically a tax on anything consuming hydrocarbon-based energy. What a perfect way to get people to consume less of all types of energy which coincidencly is required to wind-down the use of oil to keep overall price low and maximize remaining resource life while the world attempts to transition off.

[ThePythonicCow]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

They are about Green Imperialism. "Climate change" is the tool to get the public invested in the idea. Cheap oil is the forcing function, we rode the last cheap credit, globalization horse as far is it would go. Now the trick is to put her away in the barn hot and wet and take the new green horse out for a spin without civil unrest domestically and internationally. The carbon tax is the new Opium War.

Some nice turns of phrasing there.

I suspect there will be modest amounts of civil unrest, and of gas lines. Fuel shortages, riots and empty grocery store shelves are excellent tools for getting the populations attention and steering them in a different direction, just as a 2x4 board can be a useful tool in steering a mule.

But basically I agree with your statement.

This does present a quandary to me. Until now, I had been annoyed by the carbon tax proposal, as it seemed to be justified primarily by (1) the Anthropomorphic Global Warming (AGW) claims, which I found to be fraudulent to the core, and (2) a move to a world-wide tax, useful as part of a world-wide monetary system, for which I harbor much distrust in the currently envisioned forms.

Well, I still find AGW to be a fraud, but with your pithy comment and Rubin's lecture, I can view the carbon tax proposals as at least making some sort of geopolitical sense, even if only as another manifestation of arrogant imperialism. Since I am on the arrogant imperialist team , this leaves me now undecided on the carbon tax proposal.

Also while I consider a world-wide monetary system a desirable and even necessary part of our future, I harbor deep distrust of the current gang of Oligarchs steering us in that direction, and would give my right arm (even my life if it would make the difference) to see the formation of such world-wide systems guided by principles of separation and limitation of government powers and a deep and abiding respect for human liberty.

[ggirod]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Nice call on the oil price, but as for carbon tax, doesn't make sense as the US is not well known for it's green initiatives. The US burns a lot of coal. Isn't Buffett buying into coal transport for Burlington?

I am sure coal pays a lot of bills for the trains right now but given higher costs for diesel fuel trains offer order of magnitude improvements in transportation costs compared to trucks. Trucks may become the short haul last 50 miles of the transport system while trains and ships handle the heavy lifting. Finally, as the economy becomes more centralized in this country because of transportation costs, internal transportation will be much more significant than it is today when transport is frequently just finished goods for distribution and raw materials for export.

[Jay]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Some nice turns of phrasing there.

I suspect there will be modest amounts of civil unrest, and of gas lines. Fuel shortages, riots and empty grocery store shelves are excellent tools for getting the populations attention and steering them in a different direction, just as a 2x4 board can be a useful tool in steering a mule.

But basically I agree with your statement.

I think the vast increase in US domestic security and in a managed fear puffed up by the media is partially an attempt to mitigate a disorganized transition towards a new economy. It is also acts as a demonstration to any group or country that might have a geopolitical viewpoint outside of imperialist policies. The US means business and has safety measures in place which are designed to quell domestic unrest from a black swan event, planned by others or unforeseen. This helps give the US leverage in talks, even if there is a small chance those contingencies actually fail if needed. I do not discount the possibility that domestically more forceful actions may occur in order to implement desirable policy, especialy as the economy continues to crumble. I also believe that those contingencies are not actively sought by anyone in power in the US, but maybe I am being naive.

Well, I still find AGW to be a fraud, but with your pithy comment and Rubin's lecture, I can view the carbon tax proposals as at least making some sort of geopolitical sense, even if only as another manifestation of arrogant imperialism. Since I am on the arrogant imperialist team , this leaves me now undecided on the carbon tax proposal.

Yes, it brings up questions on just how far the American way of life, and Westernized nations for that matter, will fall. If implemented and effectively enforced, it could have the potential to be a tax on developing nations and actually spur a fresh American production economy, ironically. In a world of expensive energy, standards of living will likely be stretched thin regardless.

Also while I consider a world-wide monetary system a desirable and even necessary part of our future, I harbor deep distrust of the current gang of Oligarchs steering us in that direction, and would give my right arm (even my life if it would make the difference) to see the formation of such world-wide systems guided by principles of separation and limitation of government powers and a deep and abiding respect for human liberty.

Anyone contemplating a global currency needs the entire world economy to be weak enough to accept the currency, but strong enough to keep the system together once mandated. That means keeping some semblance of order in the Western world, so standards of living can't drop too much or the sheep might actually start barking. They might even bare teeth. I have the temptation to start talking about nukes here but I'll leave it alone. In addition to liberty, transparency would also be great, however I think anyone contemplating such a system has had enough of what they likely see as mob rule and only a select few will be allowed to see behind the curtain. They will be rich and powerful as hell; I hope they are nice.

[ThePythonicCow]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

I also believe that those contingencies are not actively sought by anyone in power in the US, but maybe I am being naive.

Not sought perhaps, but presumed inevitable. Eisenhower was not seeking to kill American GI's on the beaches of Normandy, but he knew with certainty that many would die if he ordered the attack, and he knew he had to so order.

Anyone contemplating a global currency needs the entire world economy to be weak enough to accept the currency, but strong enough to keep the system together once mandated.

My working hypothesis is that we're being moved toward a world monetary system that uses some new BIS/IMF meta-currency as the world's reserve currency replacing the dollar in that role, while preserving the existing regional or national currencies for day to day use. The new meta-currency will be exchanged between central banks to manage currency exchange rates. Treasuries and banks will be regulated by this international agency. Some sort of tax, perhaps on energy or carbon, will fund that agency and (more importantly) justify it's having pervasive enforcement powers (think of the IRS on steroids.) Oh, and there will be some irregularities in the triggering events and the enabling legal decrees for this new regime which will entertain conspiracy nuts such as myself for decades . Interpol will gain its street-cred by taking down some major financial crook for evading this international tax.

U.S. domestic dollar denominated contracts, debt, wages, taxes, ... will not necessarily be repriced or re-denominated out of dollars by some force majeure, but (1) the foreign exchange rate of the dollar will suck big time, and (2) much dollar denominated debt (foreign and domestic) and even more dollar denominated derivatives will default, destroying many U.S. banks and wiping out much savings. The balance sheets of surviving individuals and institutions will be far more conservative. "Paper" gold (COMEX, GLD and such) will separate from physical gold prior to the transition, with paper gold getting flushed and real gold along with interest rates doing a moon shot across the transition. But on the other side of the transition, real gold and interest rates will enter another long term decline, as the new world reserve meta-currency builds up momentum for its inevitable Minsky moments, decades into the future.

All major long term U.S. pension and medical plans including Social Security and Medicare will become (at best) means tested (you get less, and you only get that if you can prove you're desperate.) As Brits learned to live smaller, dingier, more crowded and more regulated lives in the twentieth century, so would the Americans in the twenty-first century.

Energy would cost more forcing a major deglobalization of trade and commerce, as Jeff Rubin expects.

They will be rich and powerful as hell; I hope they are nice.

Yeah - here's hoping .

[SamAdams]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

From what I understand Rubin is talking about:
1. Oil will go to triple digits and this will hurt global supply chains. This alone will cause Chinese stuff to lose market share here.
2. A US/North American Carbon tax/trade/tariff scheme will further erode Chinese market share.
3. The lack of an export market will cause China to stop buying UST.

For arguments sake, if you are in the US and don't believe in climate change under those scenarios - why support carbon schemes? Is the idea to spur alternative technologies or just create domestic job growth because of the competitive edge of US efficiency?

If you support for technology innovation - would an artificially higher energy price really accelerate alternative technologies in any meaningful way than just real higher prices? You are trying to create alternative technologies to avoid higher energy prices by creating higher energy prices? The logic seems circular. Another words we can wait for energy prices to get higher artificially or we can wait until they in fact become higher - but why is it important to accelerate using artificially high prices? What's the hurry? Might acceleration be worse for innovation than a more gradual increase since these are input costs for business? This question might not be unknowable since the prices are unpredictable but I am not convinced of the need to rush to artificially inflate prices unless you think we need to act on climate change now. Perhaps those supporting carbon trading despite their non-belief in climate change are calling for energy rationing so that *those in need* get energy cheaper? I guess I'm confused.

Or if you are in support for domestic job growth - why do it this way? Who cares what the other countries are doing regarding Carbon? Just impose a huge tax on all imports? That will support domestic industry? Of course consumers could get hit hard and the artificial government supports might come back to bite us in the ass but I'm not sure why you'd support the carbon schemes if you don't support the AGW thesis.

Second I'm curious, under the scenario Rubin describes what would happen to the dollar and gold relationship? Once China stops buying UST aren't we in the US f-ed?