Oracle 1990, vs Sunpower 2009, history repeating

[Sharky]

Re: Oracle 1990, vs Sunpower 2009, history repeating

I envy you your new life out there. Sounds like a very peaceful, civilized place to live.

Moving was one of the most difficult things I've ever done, but it has also been one of the most rewarding. Definitely not for everyone, though.

We actually considered San Diego. My father and his parents and grandparents lived there for a long time. My wife and I love the weather there. But there were just too many other issues. We went on a vacation to NZ, loved it, and made the leap to move here instead.

I reached similar conclusions, and also moved. But I was a year later, and a move too short, just from California to Texas.

If you're going to stay in the US, I can understand choosing Texas. I like aspects of the politics there (including things like no zoning laws), although it's a bit too arid for us.

Sometimes I wish now I had moved sooner, and further ... say to New Zealand.

I learned a bunch of interesting things about NZ after moving here that I didn't know before. Fortunately, most of them have been on the positive side. It almost seems like they intentionally keep a low profile, not wanting others to know how good they have it. It's not perfect of course, but then no place is. They do speak English, which is nice, and the legal and social systems are close enough to the US that we're comfortable and don't make too many embarrassing mistakes.

A few examples of things I found surprising: there are no capital gains taxes. No estate taxes. Minuscule property taxes. No taxes on the ownership or transfer of gold. They have a relatively relaxed legal system: gambling and prostitution are legal, contracts are short (4 pages to buy a house). 4M people in a country that's about 70% the size of Japan or 60% of California, that produces enough food for 40M. Only 1M people on the entire (much larger) south island. They have the 10th longest coastline in the world; longer than China and about 75% of the US.

[Guest]

Re: Oracle 1990, vs Sunpower 2009, history repeating

there are no capital gains taxes. No estate taxes. Minuscule property taxes. No taxes on the ownership or transfer of gold. They have a relatively relaxed legal system: gambling and prostitution are legal, contracts are short (4 pages to buy a house). 4M people in a country that's about 70% the size of Japan or 60% of California, that produces enough food for 40M. Only 1M people on the entire (much larger) south island. They have the 10th longest coastline in the world; longer than China and about 75% of the US.

Argh! You're killing me. Pythonic Cow, we have not yet reached sufficient escape velocity. We just gots to try harder.

ERIC BURDON & THE ANIMALS (We Gotta Get Out of This Place)

[media][/media]

In this dirty old part of the city
Where the sun refused to shine
People tell me there ain't no use in tryin'

Now my girl you're so young and pretty
And one thing I know is true
You'll be dead before your time is due, I know

Watch my daddy in bed a-dyin'
Watched his hair been turnin' grey
He's been workin' and slavin' his life away
Oh yes I know it

We gotta get out of this place
If it's the last thing we ever do
We gotta get out of this place
'cause girl, there's a better life for me and you

[ThePythonicCow]

Re: Oracle 1990, vs Sunpower 2009, history repeating

If you're going to stay in the US, I can understand choosing Texas. I like aspects of the politics there (including things like no zoning laws), although it's a bit too arid for us.

Yeah - I like driving down the street, right in the middle of town, and in one 10 acre lot seeing some fine new homes, and in the next some big old ugly cement factory, with a cell tower and a water tower between them.

Around the Denton area, north of Dallas - Fort Worth, there seems to be plenty of water, perhaps thanks to some lakes created by Army Corps of Engineering work in some past decade. And I suspect that the folks along the Gulf of Mexico, such as in Houston, could do with less humidity.

But, yes, there are some vast expanses of rather arid land out here, and the summers get hot. The air conditioner companies are at no risk of a serious drop in business.

[ThePythonicCow]

Re: Oracle 1990, vs Sunpower 2009, history repeating

We gotta get out of this place

That was my favorite song, years ago, growing up in a small town in upstate New York. When I turned 18, I got me a bus ticket and headed west.

[nero3]

Re: Oracle 1990, vs Sunpower 2009, history repeating

Just curious why you say "6 years"?

Just to clarify my point. I think that should be the longest before some oil price shock hit, I assume it will be whenever the global economy starts to recover.

The only thing that I see, that could prevent it from happening is this:

From 1982, the US had high real interest rates that attracted lots of foreign investment. That kept the dollar very strong and commodities weak in a self reinforcing dynamic. Other countries, who was dependent on strong commodity prices blew up, their currencies devalued. From 1971-1980 the CRB index increased, quite similar to the increase from 1998 (a second bottom in 2001), to a peak in 2008, it's not 1:1 on the dow gold, but in commodities it was pretty close. When you get to that 1:1 ratio, the tide can shift from hard assets into paper assets. The US stock market could get a boost from increased profit margins from the collapse in commodity prices if credit starts to flow, the dollar strengthen, and let' say, China and other emerging countries blew up, eroding the demand for crude. That would give the US stock market a great ride to the famous: Dow 36000. However, I suspect that such an event is years, and years into the future, if ever. It seems more likely that the dollar is more vulnurable to a devaluation, and a new trend where long term interest rates starts to increase due to the Obama efforts to stimulate the economy, leaving commodity producers and demand, strong, even growing, with emerging market's going strong as the US bond market no longer suck up foreign investment, while the dow kind of recover to 9000-11000 before stagflation becomes a problem.

[Sharky]

Re: Oracle 1990, vs Sunpower 2009, history repeating

Just to clarify my point. I think that should be the longest before some oil price shock hit, I assume it will be whenever the global economy starts to recover.

I guess the assumption here is that supply destruction will pace the economic contraction, and that depletion won't happen faster than supply destruction. I suppose that's a reasonable baseline scenario.

However, things like a new regional war or political unrest (even in Mexico), unexpectedly-high depletion (2.5% per month at Cantarell) or even as-predicted population growth could pretty easily throw a wrench in that model.

[nero3]

Re: Oracle 1990, vs Sunpower 2009, history repeating

I guess the assumption here is that supply destruction will pace the economic contraction, and that depletion won't happen faster than supply destruction. I suppose that's a reasonable baseline scenario.

However, things like a new regional war or political unrest (even in Mexico), unexpectedly-high depletion (2.5% per month at Cantarell) or even as-predicted population growth could pretty easily throw a wrench in that model.

It's a very unstable situation in crude. Supply and demand are going down at the same time. I think 35 dollars this time, was like 8 dollars in 1998, fear levels in the market was certainly similar. Oil went back up, back then to far above the peak level before the asian crisis, I assume because of the money printed, and rate reductions to solve the LTCM problem. If something similar would happen now, oil would have to go 200-230 dollars in early 2010. However, such a sudden change seems a little to much, but that's what's happened after 1998.

http://finance.yahoo.com/echarts?s=N...urce=undefined

They are quite connected to the performance of the shanghai index, and are inversely connected to US treasury bonds. If the the Chinese are able to pull it off, they will keep consuming, the dry bulk story is actually mostly about domestic demand in China.


The other emerging countries had good stock market's, from 2003 and on, but the Chinese market lagged, and got started following the hot money inflow from 2005, when they let the RMB get stronger. If the Chinese market goes back up, I think the consumption habits, learned during 2007, and around the Olympics could come back.

[c1ue]

Re: Oracle 1990, vs Sunpower 2009, history repeating

Score another point for Nero3 (this one was an easy slam dunk shot). C1ue is digging his heels in here. (grumbling to himself: there is no peak oil, what's this idiot talking about?! Peak oil? What a crock!? There is no peak oil! there is no ... oh forget it. )

There is likely peak oil at some point in the future, but it is still not clear to me that it is in the next decade.

For one thing, the largely straight line approximations being made by the various 'peak oil' proponent organizations never actually happen.

For example: how would the complete reorganization of the LA/SD area of Southern California affect overall US oil demand?

There is no other area with as much sprawl, road infrastructure investment, water trucking, etc etc as this entire region.

In scenarios where oil hence gasoline become prohibitively expensive, it is quite likely that there are major structural changes in this entire region - and that these changes can be very rapid.

Another example is Russia. I doubt anyone can argue that Russia uses its energy efficiently. A longer period of medium to low energy prices might serve to reduce its exports, or might serve to prompt the nation to be more efficient in its internal usage so as to maximize its energy exports.

These are all effects which a single brush stroke of Peak Oil Supply fails to consider - and so I relegate this concept to the same bin as the CO2 = man made global warming. A nifty idea, but BS.

[Guest]

Re: Oracle 1990, vs Sunpower 2009, history repeating

For one thing, the largely straight line approximations being made by the various 'peak oil' proponent organizations never actually happen .... .... and so I relegate this concept to the same bin as the CO2 = man made global warming. A nifty idea, but BS.

C1ue - Don't be surprised, but I completely agree with your first point. Straight line approximations are of course most highly probable to be flat wrong. That's also why I think a "straight line approximation" of when the USD must disintegrate is a treacherous assumption.

Lot of people here seem to be leaning towards the straight line USD disintegration at least implicitly in their arguments here at iTulip recently - and you have raised a very good point applicable to that argument as well.

Is it possible other currencies will just refuse to give the USD the opportunity to stage a proper disintegration? Why could you not see global currencies building up a pressure of implied future inflation which can stay submerged for several years before the "gas" erupts visibly? It could erupt stealthily - in commodities, in equities, or in pokemon collector cards before it shows up in traditional hyperinflation or very high inflation full spectrum, and even then it could erupt in multiple currencies, giving USD an unclear inflationary progression in any currency index.

So your linear Peak Oil is bunk seems 100% true. You also argue that by combining this with future "large efficiencies" in energy consumption in metro LA and "the country of Russia" this will mitigate hydrocarbons consumption in excess of incremental demand from Bric nations and so forth. They may not realise sufficient savings in consumption to exceed the

And please don't take my joking around remark above as any disrespect C1ue. I was just applying a gentle ribbing to your former positions and I regret this was not entirely apparent. Unlike some people here, I don't identify to much with positions I take where the position reflects my personal honor being at stake or anything like that. I'm perfectly willing to dig up arguments which agree or substantiate your own views and add those for examination.

You want me to go and dig up some arguments that support your view? I have some work to do this afternoon, but in principle I have no problem with that. This is something more people here should be pleased to do anyway, no? I think your skepticism on highly constrained global oil production only has another couple of years of room here C1ue before these developments start crowding in. It does look like a big trend global supply / demand trend is closing in on that front.

[xela]

Re: Oracle 1990, vs Sunpower 2009, history repeating

For example: how would the complete reorganization of the LA/SD area of Southern California affect overall US oil demand?

This is not what Peak Oil deals with, or how in the world would oil production be in the least affected by this? Ditto the other points.

Peak Oil in a nutshell "just" referes to the point in time we reach maximum production of crude & condensate worldwide, downhill from there with no means to revert the decline, and worsened by the fact producers increase their own demand over time, thus even less exports.
IMO, the very fact cannot reasonably be argued against, remains the big unknown of when that point in time will be or was.. to end this on a not so doomy note

[c1ue]

Re: Oracle 1990, vs Sunpower 2009, history repeating

Lukester,

Fair enough - I tend to take what's written as serious even when perhaps I should not.

As for the dollar going down - one big difference between oil and the dollar is that oil is not specifically being acted on one way or the other.

By and large oil supply and demand is a function of the market. While its dollar link does disturb the equation, nonetheless I still believe that oil is still a commodity like any other and will have its ups and downs as demand*efficiency battles with supply*price.

The dollar, on the other hand, doesn't have a supply/demand characteristic. There is supply, there is demand, but this supply/demand is a second order derivative from what is actually demanded/supplied.

In addition the dollar has its owner - the US - specifically trying to weaken it. And I personally have zero doubt on the US' ability to do so - whatever counterforces might have existing before are now plowed under by the ongoing recession/depression.

Will the eventual goal be reached in a straight line? Probably not. But then again, whether the goal can be achieved is 100% in the power of the US government.

[ThePythonicCow]

Re: Oracle 1990, vs Sunpower 2009, history repeating

... one big difference between oil and the dollar is that oil is not specifically being acted on one way or the other.

Hah ... us proud members of the Secret Tin Foil Hat Conspiracy Club would beg to differ with you on that one .