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Charles High Smith Explains To Chris Martenson Why The Status Quo Is Unsustainable

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Mon, 12/06/2010 - 16:01 | 783043 MnMark
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How do we know that "peak oil" isn't "certain" in the same way that civilizational meltdown because of the Y2K problem was "certain" at the time?

Mon, 12/06/2010 - 16:25 | 783108 Internet Tough Guy
Internet Tough Guy's picture

Because there is "evidence". Look at oil production of every known reserve; they are all in decline.

What is your position on "gravity"? Are you sold on it?

Mon, 12/06/2010 - 17:07 | 783306 Biosci
Biosci's picture

And who was "certain" about a Y2K meltdown?  The biggest risk most rational people could see was maybe getting an electric bill that was for 100 years' usage instead of one month's.

On a separate note, shouldn't the earth's gravity decrease as we take those long chain hydrocarbons from beneath us, break them up, and shoot them into the air above us?

Tue, 12/07/2010 - 05:48 | 784897 Dabale arroz a ...
Dabale arroz a la zorra el abad's picture

No, as long as the resulting gases do not escape the atmosphere. Even if they did, we should burn a lot of it. Earth's mass: 5.9736 × 10^24 kg. So just for a 0,1% decrease in gravity, just 5.9736 × 10^21 kg of oil should be burnt and escape the atmosphere. That results in more or less 8,6 × 10^17 barrels. Say we consume 85 million barrels per day, at a constant rate that would mean more or less 10^11 days, that is, approx. 273 million years consuming oil. Since I don't think we will sustain this rate even 5 years (or never i f we already passed peak oil), I would't worry about that...

Yes, I have too much free time ;)

By the way, did you already contribute to the bank run?

Thu, 12/09/2010 - 01:06 | 791539 Bicycle Repairman
Bicycle Repairman's picture

"Look at oil production of every known reserve; they are all in decline."

And how is it we know?  Who told us?  Is it in their interest to tell us the truth?  Can we verify what they say? How do unknown reserves become known reserves?  Who makes that happen?  What are their motivations?

Thu, 12/09/2010 - 01:07 | 791546 Bicycle Repairman
Bicycle Repairman's picture

Who creates the evidence? 

What is the connection between gravity and peak oil?

Mon, 12/06/2010 - 16:32 | 783135 Citxmech
Citxmech's picture

Our ability to extract oil is either limited or it's unlimited.  If it's limited - peak oil is a certainty.  To argue that peak oil might not happen, is to argue that we will never reach a structural limit to our ability to pull oil out of the ground.

Mon, 12/06/2010 - 17:00 | 783271 Herd Redirectio...
Herd Redirection Committee's picture

There is still a big difference between being able to maintain current production levels and a rapid decline in production levels from here.  Yes, things will change, but we will see the increasing use of: trains, blimps, zeppelins, bicycles.

And a decrease in distance the average product spends in transit.  Where substitutes for oil are possible they will be sought.  We will increasingly use natural gas to make plastics, etc.

Charles is a great writer, although we all know having respect for someone does not mean being in complete agreement with them:  "That would give those holding dollars a golden opportunity to transform paper into real assets" 

Charles,  I think you want to transform  paper into real assets now, and then transfer asset classes once this 'golden opportunity' arises!  I think he is underestimating the derivatives timebomb, the proverbial Sword of Damacles, most of which is interest rate swaps, and CDS, so if interest rates go up those who have been profiting from swaps (Wall St banks!) will stand to lose a lot of money.

Since the Wall St banks run the Fed it is highly unlikely they would play Russian Roulette with 6 bullets.

Any way, Charles is right on the money with his comments about the media, they are at risk of extinction!

It is right in line with our latest PsychoNews story, Funny Money, Manic Markets & Obsolete Media


"Senator Bernie Sanders from Vermont delivered an amazing speech in the Senate on December 2nd that was right on the money in regards to the problems America (and by extension, the world) faces.

To quote:

"There is a war going on, and I'm not referring to the war in Iraq and Afghanistan"

"Against the disappearing and shrinking middle class of this country."

"Their [billionaires/Oligarchy] greed has no end"

"[there seems to be] very little concern for the people if it gets in the way of accumulating more and more power"

"top 1% of all earners earn 23% of all the income in this country"

"Exxon made $19 billion last year and paid $0 in taxes.  They got a refund..."
(12 minutes into video)

Sounds like Senator Bernie Sanders has been reading PsychoNews!"

Mon, 12/06/2010 - 18:19 | 783637 trav7777
trav7777's picture

Blimps?  ROTFL.  Helium peaked in 2002

Thu, 12/09/2010 - 01:11 | 791553 Bicycle Repairman
Bicycle Repairman's picture

Really?  Do you have a source for this?

Thu, 12/09/2010 - 01:10 | 791550 Bicycle Repairman
Bicycle Repairman's picture

So what is the total amount of oil in the earth? 

Mon, 12/06/2010 - 16:06 | 783064 ReallySparky
ReallySparky's picture

"CHS:   Can I please have a softball question instead?"


      Who do you think you are? Ben Bernake?  This is not 60 Minutes.


Mon, 12/06/2010 - 19:22 | 783880 IslandMan
IslandMan's picture

RS, can't you see he was trying to be amusing ?  It was his way of saying, well, that's a difficult question.

Mon, 12/06/2010 - 16:09 | 783072 flacorps
flacorps's picture

Peak oil is indeed scary.  But it is made less so by possibilities of fusion in tokamaks and polywells, (and yes, perhaps even in palladium lattices in near room temperature cells), nuclear power from thorium; fuel from corn, cane and slime as well as ammonia and natural gas; wind, solar, hydroelectric, geothermal, tidal, coal (which we still have plenty of), and of course oil which we just haven't found yet.

Mon, 12/06/2010 - 16:33 | 783136 Blindweb
Blindweb's picture

look into Energy Return on Energy Invested

Thu, 12/09/2010 - 01:13 | 791557 Bicycle Repairman
Bicycle Repairman's picture

Do you know what the EROI for a uranium or thorium reactor is?

Mon, 12/06/2010 - 18:20 | 783641 trav7777
trav7777's picture

fusion...lol.  Still 10 years away.  And we're not looking all that hard.

See, the gov is cutting science to the bone while they spend on blowing shit up in faraway places and on Xray machines for airports.

Mon, 12/06/2010 - 19:37 | 783915 StarvingLion
StarvingLion's picture

Just another 10 years...hurry everyone, the world needs at least another 233 million aspiring physicists to get 50K in student loans to be payed off workin the fields by hand when its too costly to run tractors.

Thu, 12/09/2010 - 01:17 | 791566 Bicycle Repairman
Bicycle Repairman's picture

"And we're not looking all that hard."

Given Peak Oil and the need for American energy independence I find your statement hard to believe.  Do important people doubt Peak Oil?

Mon, 12/06/2010 - 19:25 | 783892 IslandMan
IslandMan's picture

Exactly !  But you forgot to mention the breeding of unicorns for the harvesting of their carbon-rich horns.

Mon, 12/06/2010 - 16:11 | 783080 wiskeyrunner
wiskeyrunner's picture

It's about time for the end of day ramp up into the close. followed by the overnight rise in the index futures.

Mon, 12/06/2010 - 16:15 | 783087 jdrose1985
jdrose1985's picture

Great read.


Since I know about small business from experience, then it's obvious to me that small business is being strangled and will not be hiring millions of new workers.

It's terrible out here. If you're relying on "consumers" to make a living, you're scared shitless right about now. Essentially the only growth I'm having right now is from people who have more money than they know what to do with. If you don't provide a vital service and you can't find these sort of people then you can pretty much kiss all your assets which are dependant upon infinite inflation goodbye.

Mon, 12/06/2010 - 16:19 | 783102 sagerxx
sagerxx's picture

Second that.  My wife & I own 2 small bizzes (high-end personal services) and although we were fairly okay until this past Summer, we're now hanging on by our fingernails.  Our customer base has slowly eroded and new business is very, very slow to appear.  I can say that we won't be creating any new jobs in the foreseeable.


Mon, 12/06/2010 - 16:20 | 783105 I am more equal...
I am more equal than others's picture

Peak oil?  How about peak M2 or M3.  We lived in a closed system.  Price is meaningless - value is everything.  Necessity is the mother of invention.  Peak oil will resolve itself through invention and market actions of higher price making other things - yet found - more financially feasible.  Peak money - dumping more into a closed system - will end bad for those who cannot own things of value - i.e., silver, gold. 

Mon, 12/06/2010 - 16:40 | 783156 Blindweb
Blindweb's picture

Except invention (R&D) takes energy.  Peak oil was in 2006.  Research will be cut as more energy must be diverted to maintain society.  The only possibility is for energy consumption to be slashed immediately to free up more energy for invention, i.e., we have to get back ahead the energy curve. 

Mon, 12/06/2010 - 18:21 | 783646 trav7777
trav7777's picture

shit...so if oil will just "resolve itself" why won't something we can conjure at will, M2, resolve itself as well?

Everything is fine, yes?

Thu, 12/09/2010 - 01:20 | 791572 Bicycle Repairman
Bicycle Repairman's picture

Perhaps many of our intractable problems are not technological, but economic, or politcal in nature.

Mon, 12/06/2010 - 18:33 | 783690 Biosci
Biosci's picture

We absolutely do not live in a closed system.  Closed systems are willed into existence to make the mathematics tractable.  The only thing even closely approximating a closed system on a human-detectable scale of spacetime is the solar system. 

Mon, 12/06/2010 - 16:21 | 783109 Francis Dollarhyde
Francis Dollarhyde's picture

Because it already happened. Even the IEA admits it now.


We've been stuck on a plateau since 2004. ~74m barrels/day. It's like a balloon, bumping along the ceiling. Every time demand goes up, so does the price, until enough demand gets priced out of the market that it can be satisfied with 74 million barrels per day. 5 years this has been going on.

Mon, 12/06/2010 - 18:31 | 783684 trav7777
trav7777's picture

but...but...I got banned from TF for suggesting that oil might be able to peak!  You mean to tell me douchinger was wrong???  But...he has his own website!!!!!11

I also was told that "they" would just "figure something out."  THEY better fuckin get to it, because my SUV is empty.

Thu, 12/09/2010 - 01:26 | 791585 Bicycle Repairman
Bicycle Repairman's picture

If oil prodution peaked in 2006, then why doesn't the market price of oil, natural gas and other energy sources reflect this fact?

Does the IEA know about what goes on in every country?

Mon, 12/06/2010 - 16:23 | 783115 DollarMenu
DollarMenu's picture

Mr. Smith claims that he has no connection to wealth or power.

I don't know about the wealth part, but as to power, he needs no connection.

His self-generated truth is power enough.


Mon, 12/06/2010 - 19:44 | 783940 StarvingLion
StarvingLion's picture

Charlie is fucking brilliant.  He's another "expert predictor" who is obviously so good that he needs to have a FUCKING DONATION button on his website.  Imagine that. 

Thu, 12/09/2010 - 01:30 | 791593 Bicycle Repairman
Bicycle Repairman's picture

What is Mr Smith's background?

Mon, 12/06/2010 - 16:25 | 783119 Miles Kendig
Miles Kendig's picture

The hymn always sounds sweet when it is sung from the same hymnal one sings from ...  The simple fact is that more and more folks are singing from the same hymnal

Mon, 12/06/2010 - 16:45 | 783191 Blindweb
Blindweb's picture

Excellent overall but...

The guy clearly doesn't understand evolution.  Evolution doesn't mean to get better, it means to adapt to changing circumstances.  Yes we will adapt, but  living standards and life expectancies will fall dramatically.  People adapted to the Dark Ages too.    

Mon, 12/06/2010 - 17:55 | 783535 Seer
Seer's picture

"Evolution doesn't mean to get better, it means to adapt to changing circumstances."

OK, what's better, dead-end (death), or continued existence?  I'd say that "getting better" means pushing out the evolutionary dead-end.

Thu, 12/09/2010 - 01:33 | 791598 Bicycle Repairman
Bicycle Repairman's picture

"I'd say that "getting better" means pushing out the evolutionary dead-end."

I don't understand what you are saying here.  Can you elaborate?

Fri, 12/10/2010 - 00:19 | 794834 DiverCity
DiverCity's picture

It's a typical mistake by those who, as you say, don't understand Darwinian evolution.  It's a mistake also made, however, by those who do.  The mistake is to believe that human evolution and evolution generally are on a progressive, upward arc.  It's a teleological view, if you will.  Richard Dawkins and Daniel Dennett of all people routinely make the same error.

Mon, 12/06/2010 - 16:46 | 783192 Nacho.Libre
Nacho.Libre's picture

I read his book, survival +.  It was, for the most part, pretty good.  It took me a while to read it, though, because he kept using the word "simulacra" or "simulacrum" every other sentence and it irritated me so badly I had to read it in spurts and then put it down for a few days and then take it up again. There was another word that was also very overused, but it escapes me right now, probably my subconscious trying to protect me.

Mon, 12/06/2010 - 17:50 | 783512 string
string's picture

Hahahahahaha... I'm going thru that process currently.

Mon, 12/06/2010 - 16:50 | 783193 BennyBoy
BennyBoy's picture

Money creation explained by cartoon video:



Or watch a Phd in economics create $30B and send it via email to an overseas country.



Mon, 12/06/2010 - 17:03 | 783284 6 String
6 String's picture

As interest rates rise and the stock market rolls over along with corporate profits, then another $10 trillion or so of bond and stock equity will evaporate. Given a decline of $20 trillion, then the Fed's expansion of its balance sheet by $2 trillion doesn't seem so mighty or irresistible.

For another 12 trillion to be lost by equity declines and bond losses, 80% of the value would have to get wiped out from here (there is only 15 trillion in stock and bonds in household net worth collectively).

If this type of decline happened, the U.S. would have to default on its debt obligations because there would be too little in tax revenues to service Government obligations, without printing endless amounts more of the greenback. The plunge police simply won't allow this kind of decline to happen only because they cannot.

Goldman will eventually be right, 4 trillion more: QE3, 4, 5, etc. We're well on our way torward hyperinflation.

Mon, 12/06/2010 - 17:14 | 783325 flattrader
flattrader's picture

In one of Smith's essays featured here in ZH he was quick to blame homeowners (a blanket assertion) for the foreclosure crisis along with corrupt origninators, lenders and servicers in one of his high and mighty moralistic rants about the US and everyone in it (execpt him I suppose) being complicit in the national kleptocracy.

It's as though he completely ignored the testimony of any number of robosigner and origninators who indicated they out and out lied to mortgage applicants about the terms and conditions of their mortgages...and of course he NEVER addressed the issue of wide-scale predatory lending.

We're all to blame-We're all bad...except for him.

He's the the worse kind of self righteous "intellectual".

Thu, 12/09/2010 - 01:46 | 791627 Bicycle Repairman
Bicycle Repairman's picture

Certainly there are people who did not participate in the scandal in any manner or form.  Yet as taxpayers we will all be called to account.  This is immoral.

Mon, 12/06/2010 - 17:14 | 783343 What_Me_Worry
What_Me_Worry's picture

He is so close to understanding how this will play out.  He certainly is lost when he thinks the purchasing power of the FRN is going to skyrocket in the years to come.  Apparently, he has never heard of the ben bernank.

US management will not change in 2012, at least not to those who aren't puppets of the oligarchs.  The candidates who run in 2012 will pander to those who agree with his ideas, though.

As long as the bread is plentiful and the circus is free, then the US will be allowed to continue burning in quiet indignation.

In closing, silver.

Mon, 12/06/2010 - 17:17 | 783364 Bearster
Bearster's picture

"I'd like to see a private, asset-based global currency arise..."

Ever heard of gold?

Mon, 12/06/2010 - 17:17 | 783365 Rockfish
Rockfish's picture

I wanted to post this on ZH this as good a place. New batch of suckers found. That haow i take it. 


Mon, 12/06/2010 - 17:48 | 783435 CulturalEngineer
CulturalEngineer's picture

Don't want to be a nag but I'm convinced the Commons-dedicated Account* IS a central innovation necessary as part of a necessary path through the current dying paradigm.

*A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution... which for fundamental reasons of scale must allow a viable micro-transaction (think x-box points for action in the Commons).

Not strictly because of the networked citizen lobbying capability provided by enabling the micro-transaction enablement... (there's a lot more power than might be apparent at first if you could press a few keys and give say 25 cents in support of some proposition or another... the $4 billion on the last election works out to about 65 cents a week per registered voter!)

But rather because of the nature of the voluntary, opt-in, distributed network that arises from that...

THIS ultimately trans-national, neutral network forms the basis for direct, peer-to-peer empowered association. And ultimately it's constituents, its owners will define that Commons... (for instance, wouldn't it make sense for there to be a button say to give 10 cents when you like an article here? no requirement... but a small enough and easy enough transaction that voluntary participation could change the entire dynamic of online publishing... speech IS a part of the Commons isn't it?)

P.S. I'm no idiot (maybe a little naive but not an idiot), I know that a goal for this network to ultimately be Commons-owned (and yet also profitable) poses some complications for investors... and this must be accommodated. But both the final ownership and for-profit structure are actually elements in its design for both best chance of success and, in fact as a counter-balance to private concentrations of power.... an important element.

LinkedIn http://www.linkedin.com/in/culturalengineer

Demo & FAQ http://www.chagora.com

Political Fundraising: Act Blue, Facebook and the Missing Network Imperative


It's a civilization fundamental for scaled speech and association.

Mon, 12/06/2010 - 21:15 | 784222 blunderdog
blunderdog's picture

You've probably got it covered, but just in case you missed it, read Stephenson's Snow Crash.

Do NOT follow this link or you will be banned from the site!