Guest Post: Energy Independence - The Big Lie

Tyler Durden's picture

Submitted by Jim Quinn of The Burning Platform

Energy Independence: The Big Lie

 

 PRICE OF A BARREL OF OIL 1978 – $14.00

“We are the generation that will win the war on the energy problem and in that process, rebuild the unity and confidence of America.” - President Jimmy Carter, 1979

“We have it in our power to act right here, right now. I propose $6 billion in tax cuts and research and developments to encourage innovation, renewable energy, fuel-efficient cars, and energy-efficient homes.” - President Bill Clinton, 1998

“I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela. I think that’s about a realistic time frame…That’s why I’ve focused on putting resources into solar, wind, biodiesel, geothermal. These have been priorities of mine since I got to the Senate, and it is absolutely critical that we develop a high fuel efficient car that’s built not in Japan and not in South Korea, but built here in the United States of America.” - President Barack Obama, 2008

“We don’t have to wait on OPEC anymore. We don’t have to let them hold us hostage. America’s got the energy. Let’s have American energy independence.”- Rick Perry, CNN Debate, October 18

“We must become independent from foreign sources of oil. This will mean a combination of efforts related to conservation and efficiency measures, developing alternative sources of energy like biodiesel, ethanol, nuclear, and coal gasification, and finding more domestic sources of oil such as in ANWR or the Outer Continental Shelf (OCS).”Mitt Romney  

PRICE OF A BARREL OF BRENT OIL 2011 – $114.00


It is too bad that our 255 million cars can’t run on hot air. American presidents have propagated the Big Lie of energy independence for the last three decades. The Democrats have lied about green energy solutions and the Republicans have lied about domestic sources saving the day. These deceitful politicians put the country at risk as they misinform and mislead the non-thinking American public. They have been declaring our energy independence for 30 years, but we import three times as much oil today as we did in the early 1980’s. The CPI has gone up 350% since 1978, but the price of a barrel of oil has risen 800% over the same time frame. Today, I hear the same mindless fabrications from politicians and pundits about our ability to become energy independent. Any critical thinking analysis of the hard facts reveals that the United States will grow increasingly dependent upon other countries to supply our energy needs from a dwindling and harder to access supply of oil and natural gas. The fantasy world of plug in cars, corn driven vehicles and solar energy running our manufacturing plants is a castle in the sky flight of imagination. The linear thinking academic crowd believes a technological miracle will save us, when it is evident technology fails without infinite quantities of cheap oil.

I know the chart below requires some time to grasp, but I’m sure the average American can take five minutes away from watching Jersey Shore, Dancing with the Stars, or the latest update of the Kardashian saga to understand why the propaganda about energy independence is nothing but falsehoods. You have U.S. energy demand by sector on the right and the energy source by fuel on the left. Total U.S. energy use is nearly 100 quadrillion Btu. In physical energy terms, 1 quad represents 172 million barrels of oil (8 to 9 days of U.S. oil use), 50 million tons of coal (enough to generate about 2% of annual U.S. electricity use), or 1 trillion cubic feet of natural gas (about 4% of annual U.S. natural gas use).  

Please note that 37% of our energy source is petroleum, which supplies 95% of the energy for our transportation sector. That means your car and the millions of 18 wheelers that deliver your food to your grocery stores and electronic gadgets to your Best Buy. You can’t fill up your SUV with coal, natural gas, nuclear energy or sunshine. Without the 7 billion barrels of oil we use every year, our just in time mall centric suburban sprawl society would come to a grinding halt. There is no substitute for cheap plentiful oil anywhere in sight. The government sponsored ethanol boondoggle has already driven food prices higher, while requiring more energy to produce than it generates. Only a government “solution” could raise food prices, reduce gas mileage, and bankrupt hundreds of companies in an effort to reduce our dependence on oil. Natural gas as a transportation fuel supplies 2% of our needs. The cost to retro-fit 160,000 service stations across the country to supply natural gas as a fuel for the non-existent natural gas automobiles would be a fool’s errand and take at least a decade to implement.   

    

The green energy Nazis despise coal and nuclear power, which account for 31% of our energy supply. They want to phase coal out. They aren’t too fond of fracking either, so there goes another 23% of our supply. You might be able to make out that itsy bitsy green circle with the 7% of our supply from renewable energy. And more than half of that energy is supplied by hydro power. Less than 2% of our energy needs are met by solar and wind. For some perspective, we need to use the equivalent of 17 billion barrels of oil per year to run our society and solar and wind supplies the equivalent energy of about 300 million barrels of that total. I think our green energy dreams will come up just a smidgen short of meeting our demands. Nothing can replace oil as the lifeblood of our culture and there is no domestic supply source which will eliminate or even reduce our dependence upon the 10 million barrels per day we import from foreign countries. There are some hard truths that are purposefully ignored by those who want to mislead the public about the grim consequences of peak cheap oil:

  • The earth is finite. The amount of oil within the crust of the earth is finite. As we drain 32 billion barrels of oil from the earth every year, there is less remaining within the earth. We have drained the cheapest and easiest to reach 1.4 trillion barrels from the earth since the mid 1800s. The remaining recoverable 1.4 trillion barrels will be expensive and hard to reach.
  • The United States has about 2% of the world’s proven oil and gas reserves, but consumes 22% of the world’s oil production and 27% of the world’s natural gas production.
  • Demand for oil will continue to rise no matter what the United States does, as the developing world consumption far outstrips U.S. consumption. Oil is fungible and will be sold to the highest bidder.
  • The concept of energy returned on energy invested (EROEI) is beyond the grasp of politicians and drill, drill, drill pundits. EROEI is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource. When the EROEI of a resource is less than or equal to one, that energy source becomes an “energy sink”, and can no longer be used as a primary source of energy. Once it requires 1.1 barrels of oil to obtain a barrel of oil, the gig is up.
  • There is a negative feedback loop that revolves around oil supply, oil price and economic growth. As demand continues to rise and supply is more difficult to access, prices will rise. Since oil is an essential ingredient in every aspect of our lives, once the price reaches $120 to $150 a barrel economic growth goes into reverse. Demand crashes and investment in new sources of energy dries up. Rinse and repeat.

Finite World

World oil production peaked in 2005 has been flat since then, despite a continuous stream of promises from Saudi Arabia that they are on the verge of increasing production. The chart below from the U.S. Energy Information Administration propagates the standard fabrications about energy supplies. Even though worldwide oil production has clearly peaked, the oil industry PR whores and government agencies continue to project substantial production growth in the future. The mainstream media trots out Daniel Yergin whenever it wants to calm the masses, despite his track record of being 100% wrong 100% of the time. The brilliance of his July, 2005 Op-Ed shines through:

“Prices around $60 a barrel, driven by high demand growth, are fueling the fear of imminent shortage — that the world is going to begin running out of oil in five or 10 years. This shortage, it is argued, will be amplified by the substantial and growing demand from two giants: China and India. There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day — from 85 million barrels per day to 101 million barrels a day — a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.”

Oil production capacity has not grown by one barrel since Yergin wrote this propaganda piece. This is despite the fact that prices have almost doubled, which should have spurred production. The current energy independence false storyline – the Bakken Formation – has gone from production of 10,000 barrels per day in 2003 to 400,000 barrels per day now, while the hundreds of millions invested in developing the Canadian tar sands have increased production by 50% since 2005. Despite these substantial increases in output, worldwide production has remained flat as existing wells deplete at the same rate that new production is brought online.

 

The facts are there is approximately 1.4 trillion barrels of recoverable oil left in the crust of the earth. We currently suck 32 billion barrels per year out of the earth. This means we have 44 years of oil left, at current consumption levels. But we know demand is growing from the developing world. Taking this fact into consideration, we have between 35 and 40 years worth of recoverable oil left on the planet. That is not a long time. Additionally, the last 1.4 trillion barrels will much more difficult and costly to extract than the first 1.4 trillion barrels. The remaining oil is miles under the ocean floor, trapped in shale and tar sands, and in the arctic. Despite these hard facts, governmental agencies and politicians continue to paint a rosy picture about our energy future. I watched in stunned amazement last week as five bozos on the McLaughlin Group news program unanimously proclaimed the U.S. would become a net exporter of oil in the coming decade. Do these supposedly intelligent people not understand the basic economics of supply, demand and price?  

It seems the governmental organizations always paint the future in the most optimistic terms, despite all facts pointing to a contrary outcome. The EIA predicts with a straight face that oil production will rise to 110 million barrels per day, while the price of a barrel of oil remains in the current $100 to $125 per barrel range. Non-OPEC production has been in decline since 2004, but the EIA miraculously predicts a 15% increase in production over the next 25 years. OPEC production has been flat since 2005, but the EIA is confident their 50 year old oil fields will ramp up production by 25% in the next 25 years. Does the EIA consider whether OPEC even wants to increase production? It would appear that constrained supply and higher prices would be quite beneficial to the OPEC countries. And then of course there is the unconventional oil that is supposed to increase from 4 million barrels per day to 13 million barrels per day, a mere 325% increase with no upward impact on prices. These guys would make a BLS government drone blush with the utter ridiculousness of their predictions.

 

The picture below is an excellent representation of how the easy to access oil and gas of the earth have been tapped. They were close to the surface. The remaining oil and gas is deeper and trapped within shale and sand. The new technology for extracting gas from shale has concerns regarding whether fracking and disposal of waste water can be done safely, especially near highly populated areas. The relationship between fracking and earthquakes could also prove to be problematic. The wells also have rapid decline rates. Add a mile of ocean to the picture below and you have some really expensive to access oil and potential for disaster, as witnessed with the Deep Water Horizon.

 

The EIA projects natural gas supply to grow by 10% between now and 2035 due to a 300% increase in shale gas supply. It seems the EIA believes the fantasy of 8 Saudi Arabia’s in the Bakken formation of North Dakota and decades of gas within the Marcellus Shale. These fantasies have been peddled by the natural gas industry in order to get support for their fracking efforts. This false storyline is damaging to the long-term planning that should be taking place now to alleviate the energy scarcity that is our future. In 2006 the EIA reported the possibility of 500 billion barrels of oil in the Bakken formation, based on guesswork. The U.S. Geological Survey has since scaled this back ever so slightly to 3.65 billion barrels, which is six months of U.S. consumption. The deceptions peddled regarding Marcellus shale are also colliding with reality. The U.S. Geological Survey recently produced an estimate of Marcellus Shale resources, which will cause the EIA to reduce its estimate of shale gas reserves for the Marcellus Shale by 80%. The price of natural gas is currently $3.54 MMBtu, down from $13 a few years ago. Extracting natural gas from shale has high capital costs of land, drilling and completion. It is not economically feasible below $6 MMBtu.

 

Based on the known facts and a realistic view of the future, there will be less supply of oil and natural gas as time goes on. We can already see the impact of these facts today. Even though Europe and the U.S. are in recession, the price of oil continues to rise. The developing world continues to demand more oil and the supply is stagnant. Stunts like withdrawing oil from the Strategic Reserve are foolish and politically motivated. Is the world then running out of oil then? No, but any increase in future global oil production will be modestly incremental and production could be thrown off course by any number of possible events, from an Israeli attack on Iran to (another, but successful this time) al Qaida attack on Saudi Arabia’s Abqaiq oil refinery. Any forecast regarding future oil production and prices isn’t worth the paper it is written on unless consideration to wars, revolutions and terrorism are factored into the equation.

We Don’t Matter

Americans like to think we are the center of the universe. Those who propagate the misinformation about U.S. energy independence are clearly math challenged. The total proven oil reserves in the world total 1.4 trillion barrels and the United States has 22 billion barrels of that total, or 1.6% of the world’s oil. The U.S. burns 7 billion barrels per year, so we have enough oil to survive for three whole years. The U.S. consumes 22% of the world’s oil despite having 4.5% of the world’s population and less than 2% of the world’s oil. Do these facts lead you to the conclusion the United States will be exporting oil in the near future?

 

When you hear the pundits breathtakingly describe our vast natural gas resources you would think we are the dominant player in this market. Not quite. The United States has 4% of the world’s natural gas reserves. Predictably we consume 22% of the world’s natural gas. Russia controls 25% of the world’s natural gas reserves, with the Middle East countries controlling 40% of the world’s reserves. The pundits can hype our “vast” supplies of natural gas, but the facts clearly reveal it is nothing but hype.

  

The U.S. is consuming less oil than it was in 2005. U.S. consumption is not the crucial factor in determining the price of oil today and our consumption will matter even less in the future. Emerging market countries, led by China and India, will be the driving force in oil demand in the coming decades. According to the IEA, “Non-OECD [emerging markets] account for 90% of population growth, 70% of the increase in economic output and 90% of energy demand growth over the period from 2010 to 2035.”

 

This demand is being driven by the growth in vehicles in emerging markets. The U.S. market has reached a saturation point, but China, India and the rest of the world are just beginning their love affairs with the automobile. The accumulation of facts regarding both supply and demand should even convince the most brainless CNBC talking head that the price of oil will continue to rise. The 2008 peak price of $145 per barrel will not hold. The tried and true American method of ignoring problems until they reach crisis proportions will bite us in the ass once again.

 

Slippery Road Ahead

The concept of EROI is incomprehensible to the peak oil deniers. When Larry Kudlow or one of the other drill, drill, drill morons proclaims the vast amount of oil in North Dakota shale and in Alberta, Canada tar sands, they completely ignore the concept of EROI. Some estimates conclude there are 5 trillion barrels of oil left in the earth. But, only 1.4 trillion barrels are considered recoverable. This is because the other 3.6 trillion barrels would require the expenditure of more energy to retrieve than they can deliver. Therefore, it is not practical to extract. When oil was originally discovered, it took on average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. and about ten for one in Saudi Arabia.

The chart below clearly shows the sources of energy which have the highest energy return for energy invested. I don’t think I’ve heard Obama or the Republican candidates calling for a national investment in hydro-power even though it is hugely efficient. The dreams of the green energy crowd are shattered by the fact that biodiesel, ethanol and solar require as much energy to create as they produce. Tar sands and shale oil aren’t much more energy efficient. It’s too bad Obama and his minions hate dirty coal, because has the best return on energy invested among all the practical sources.   

 File:EROI - Ratio of Energy Returned on Energy Invested - USA.svg

Worse than the peak oil deniers are those who pretend that oil isn’t really that important to our society. They declare that technology will save the day, when in reality technology can’t function without oil. Without plentiful cheap oil our technologically driven civilization crashes. We are addicted to oil. Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each.  You might be interested in a partial list of products that require petroleum to be produced.

Solvents Diesel fuel Motor Oil Bearing Grease
Ink Floor Wax Ballpoint Pens Football Cleats
Upholstery Sweaters Boats Insecticides
Bicycle Tires Sports Car Bodies Nail Polish Fishing lures
Dresses Tires Golf Bags Perfumes
Cassettes Dishwasher parts Tool Boxes Shoe Polish
Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape
CD Player Faucet Washers Antiseptics Clothesline
Curtains Food Preservatives Basketballs Soap
Vitamin Capsules Antihistamines Purses Shoes
Dashboards Cortisone Deodorant Footballs
Putty Dyes Panty Hose Refrigerant
Percolators Life Jackets Rubbing Alcohol Linings
Skis TV Cabinets Shag Rugs Electrician’s Tape
Tool Racks Car Battery Cases Epoxy Paint
Mops Slacks Insect Repellent Oil Filters
Umbrellas Yarn Fertilizers Hair Coloring
Roofing Toilet Seats Fishing Rods Lipstick
Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber
Speakers Plastic Wood Electric Blankets Glycerin
Tennis Rackets Rubber Cement Fishing Boots Dice
Nylon Rope Candles Trash Bags House Paint
Water Pipes Hand Lotion Roller Skates Surf Boards
Shampoo Wheels Paint Rollers Shower Curtains
Guitar Strings Luggage Aspirin Safety Glasses
Antifreeze Football Helmets Awnings Eyeglasses
Clothes Toothbrushes Ice Chests Footballs
Combs CD’s & DVD’s Paint Brushes Detergents
Vaporizers Balloons Sun Glasses Tents
Heart Valves Crayons Parachutes Telephones
Enamel Pillows Dishes Cameras
Anesthetics Artificial Turf Artificial limbs Bandages
Dentures Model Cars Folding Doors Hair Curlers
Cold cream Movie film Soft Contact lenses Drinking Cups
Fan Belts Car Enamel Shaving Cream Ammonia
Refrigerators Golf Balls Toothpaste Gasoline

 

The propaganda blared at the impressionable willfully ignorant American public has worked wonders. The vast majority of Americans have no clue they have entered a world of energy scarcity, a world where the average person is poorer and barely able to afford the basic necessities of life. This is borne out in the vehicles sales statistics reported every month. There have been 10.5 million passenger vehicles sold through the first 10 months of 2011. In addition to the fact they are “purchased” using 95% debt and financed over seven years, the vast majority are low mileage vehicles getting less than 20 mpg. Only 1.8 small energy efficient vehicles have been sold versus 6.1 million SUVs, pickup trucks and large luxury automobiles. Americans have the freedom to buy any vehicle they choose. They also have the freedom to not think and ignore the facts about the certainty of higher prices at the pump. By choosing a 20 mpg vehicle over a 40 mpg vehicle, they’ve sealed their fate. How could the average soccer mom get by without a Yukon or Excursion to shuttle Biff and Buffy to their games? Have you ever tried to navigate a soccer field parking lot in a hybrid? The horror!

The American public has been lulled back into a sense of security as gas prices have receded from $4.00 a gallon back to $3.40 a gallon. This lull will be short lived. Oil prices have surged by 15% in the last two months, even as the world economy heads into recession. The link between high oil prices and economic growth are undeniable, even though the deceitful pundits on CNBC will tell you otherwise. Ten out of eleven recessions since World War II were associated with oil price spikes. Gail Tverberg sums up the dilemma of energy scarcity for the average American:

“High-priced oil tends to choke economies because high oil prices are associated with high food prices (because oil products are used in food growing and transport), and people’s salaries do not rise to offset this rise in food and oil prices. People have to eat and to commute to their jobs, so they cut back on other expenditures. This leads to recession. Recession leads to lower oil consumption, since people without jobs can’t buy very much of anything, oil products included. In some sense, the reduction in oil extraction is due to reduced demand, because citizens cannot afford the high-priced oil that is available.”

But don’t worry. The rising oil and food prices will only impact the 99% in the U.S. and the poorest dregs across the globe that spend 70% of their income on food. The 1% will be just fine as they will bet on higher oil prices, therefore further enriching themselves while the peasants starve. The market for caviar, champagne, NYC penthouses, and summer mansions in the Hamptons will remain robust.

There is no escape from the ravages of higher priced oil. There is plenty of oil left in the ground. But, the remaining oil is difficult, slow and expensive to extract. Oil prices will rise because they have to. Without higher prices, who would make the huge capital investment required to extract the remaining oil? Once oil prices reach the $120 to $150 per barrel range our economy chokes and heads into recession. We are trapped in an endless feedback loop of doom. The false storyline of renewable energy saving the day is put to rest by Gail Tverberg:

“Renewables such as wind, solar PV, cellulosic ethanol, and biogas could more accurately be called “fossil fuel extenders” because they cannot exist apart from fossil fuels. Fossil fuels are required to make wind turbines and other devices, to transport the equipment, to make needed repairs, and to maintain the transport and electrical systems used by these fuels (such as maintaining transmission lines, running-back up power plants, and paving roads). If we lose fossil fuels, we can expect to lose the use of renewables, with a few exceptions, such as trees cut down locally, and burned for heat, and solar thermal used to heat hot water in containers on roofs.”

Predictably, the politicians and intellectual elite do the exact opposite of what needs to be done. We need to prepare our society to become more local. Without cheap plentiful oil our transportation system breaks down. Our 3.9 million miles of road networks will become a monument to stupidity as Obama and Congress want to spend hundreds of billions on road infrastructure that will slowly become obsolete. The crumbling infrastructure is already the result of government failure, as the money that should have been spent maintaining our roads, bridges and water systems was spent on train museums, turtle crossings, teaching South African men how to wash their genitalia, studies on the mating habits of ferrets, and thousands of other worthless Keynesian pork programs. If our society acted in a far sighted manner, we would be creating communities that could sustain themselves with local produce, local merchants, bike paths, walkable destinations, local light rail commuting, and local energy sources. The most logical energy source for the U.S. in an oil scarce scenario is electricity, since we have a substantial supply of coal and natural gas for the foreseeable future and the ability to build small nuclear power plants. The Fukushima disaster is likely to kill nuclear as an option until it is too late. The electrical grid should be the number one priority of our leaders, as it would be our only hope in an oil scarce world. Instead, our leaders will plow borrowed money into ethanol, solar, and shale oil drilling, guaranteeing a disastrous scenario for our country.

The United States is a country built upon the four C’s: Crude, Cars, Credit, and Consumption. They are intertwined and can’t exist without crude as the crucial ingredient. As the amount of crude available declines and the price rises, the other three C’s will breakdown. Our warped consumer driven economy collapses without the input of cheap plentiful oil. Those at the top levels of government realize this fact. It is not a coincidence that the War on Terror is the current cover story to keep our troops in the Middle East. It is not a coincidence the uncooperative rulers (Hussein, Gaddafi) of the countries with the 5th and 9th largest oil reserves on the planet have been dispatched. It is not a coincidence the saber rattling grows louder regarding the Iranian regime, as they sit atop 155 billion barrels of oil, the 4th largest reserves in the world. It should also be noted the troops leaving Iraq immediately began occupying Kuwait, owner of the 6th largest oil reserves on the planet. Oil under the South China Sea and in the arctic is being hotly pursued by the major world players. China and Russia are supporting Iran in their showdown with Israel and the U.S. As the world depletes the remaining oil, conflict and war are inevitable. The term Energy Independence will carry a different meaning than the one spouted by mindless politicians as the oil runs low.

And as things fell apart
Nobody paid much attention

Nothing but Flowers – The Talking Heads

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pods's picture

I agree that it will be repriced.  And things will start anew.

Ask the Romans what happened when they suffered a collapse.  It doesn't have to be pretty.

I do not think that the collapse will be as bad as the Roman collapse, but it sure as hell is not going to be a positive step for liberty.  Some type of new supra-national currency is probably in the works.  

And as long as it is another debt based system it will have the exact same outcome that it must have.  Only the timing will change.

pods

AGuy's picture

Your assuming no Global Nuclear war happens. Its unlikely people and gov'ts will simply accept fate without a fight to take the last remain resources for themselves.

I also worry about a major global pandemic, As energy become expensive it will lead to malnutrition, especially in the developing world. This increases the chances of a major regional panademic that spreads globally. Consider that a few minor pandemics started in Africa when the price of oil was near $140, as supply chains in Africa began to fail because Africa was priced out of oil. Fortunately Oil prices crashed and supply chains in Africa were restored before the issue became critical.

Much of the "Factories" will not operate without access to global supply chains. consider that a factory sources materials and parts from thousands of miles away. Very rarely is there a factory that can operate (or even improvise) on local aquired materials.

Another critical factor is how critical industries adapt when energy gets rationed or access becomes unreliable. Farms depend on Oil and infrastructure to harvest, process and transport food. If the supply chain is disrupted for a period of time, it may collapse the system that prevents any hope of restart (cascade effect). Oil supplies disrupt food production, loss of food production disrupts the supply chain needed to bring fuel to the farms, Population centers destabilize shutting down the grid, interstate commernce, imports, etc.

Perhaps some systems will restart, but it would require a major reduction in the population (80 to 90% depopulation) to restore balance on supply\demand with out access to cheap and reliable source of energy and access to global imports (of finished and non-finished good - parts, tools, electronic components, chemicals and other raw materials)

css1971's picture

BTW, when someone defaults, the money does not change hands, it goes poof. 

The debt goes poof. The credit has already been spent into the economy. It's why defaults are inflationary, and self limiting.

We should encourage them.

Catchy slogan: "Can't pay, Don't pay! Can't pay, Won't pay!"

 

pods's picture

So home prices are rising due to all the defaults?

pods

tmosley's picture

Does the economy consist only of homes?

Or were people encouraged to take on excess debt and spend the money on other things, placing that currency into permanent circulation?

epwpixieq-1's picture

Some GDP vs real wealth story:

I had a pain back for some time. I went to several MDs in the US. They took pictures, gave me drugs and I payed over $1000 dollars of medical bills, and still no improvement. Clearly I had it enough!

This summer on my annual vacation to Eastern Europe, visiting my home country. I went to local generational medical person, no medical degree, but A LOT of knowledge about the human body and herbal medicine. For about 10 minutes with some herbal cream and right pressure on my back, the pain was gone! And now 5 months after that no pain at all!!!! The price? Actually the local person did not want to take any money!!! I barely was able put the equivalent of $25 on the table in the house. This, in the local currency, is one day high salary wage.

Now how is that for higher and higher GDP. Clearly the GDP of USA went up with $1000, but no useful work/solution to the problem was performed,not to speak about the waste of my time. Only paper transfer.. Cheaper paper -> more transfers -> higher GDP -> less useful / problem solving work.

Everything is relevant! A person can leave without any money, but if they have useful skills they can create real wealth, and all the people around them will be wealthier.

pods's picture

Buy an inversion table and strengthen your core.  And stay the hell away from any and all western medical experts on back problems.

Also raise your omega 3 to omega 6 fat intake ratio.  Omega 3s are a wonderful anti-inflamatory.  High levels of omega 6s will raise your arachadonic acid levels, which adds to the inflamation, pain, and sciatica.

Also, systemic enzyme therapy can help with healing.

pods

Cathartes Aura's picture

your story highlights the "medical profession" ponzi in amrka - the "professionals" have huge debts for their educations, and the letters after their names invoke reverence in their patients, who will continue to feed the ever-increasing costs of keeping the "professionals" in their hospital ivory tower hierarchy - no one can truly be healed, else how would the ponzi be maintained? once "trust" is invested in the mythical system, then the patient must continue to worship at the altar, irrespective of continuing ill-health, a "life" maintained with copious amounts of pills and whatnot, which also feeds the Big Pharma corporations invested in ill health. . .there's a reason the basics for sustaining life - food, water, breathable air - are all toxic in amrka. . .

or one can learn to understand how the body "works" and wants to maintain "health" and then treat it accordingly - as Pods contributes here. . .

really appreciated reading your post.

Bicycle Repairman's picture

You've summed up our corrupt healthcare system quite nicely.

aerojet's picture

The waste is not to your employer, that's why.  Nobody gives a shit how long you sit in traffic or how much fuel you have to waste to get to your shitty job.  Until the American public puts its colletive foot down about a lot of things, nothing will change.

Bicycle Repairman's picture

Much of our transportation is pure waste.  Part of putting your foot down is living where you don't need to drive so much.  I agree with Kunstler that the suburban build up in America was a huge mistake.

doggings's picture

Well over 50% of jobs could be done more efficiently from home. We will never wake up to this, it will only happen when it is forced upon us because nobody can afford to drive anymore.

the government will catch on to this and tax people into playing along. happened in the UK, loads work from home now.

Dr. Acula's picture

I wish I had food independence.

I'm always buying food from Safeway and they NEVER buy food from me.

In my house, it's all about the four F's: Frankfurters, Fishsticks, Fudgesicles, and Fava Beans.

 

NotApplicable's picture

To be fair though, I've never purchased software from my food producers.

The only people with food independence are farmers. But still, they have energy dependence, machinery dependence, clothing dependence...

The idea that one should be independent (or can be) is to go back to peasant living, where one provides for most of their own necesities. Only through mature, stable economies can the living standards of the masses rise due to the wealth effect we all receive through division of labor.

MachoMan's picture

Of course, the division of labor also gets perverted, eventually spawning financial alchemists.

Quadlet's picture

Christina Romer: The Fed Must Do MORE, Not Less

jcaz's picture

Since no one ever did less than Christina Romer, I appreciate her expertice on the subject......

Cruel Aid's picture

Romer told O in her last report with the administration, that you can not get more money by raising taxes. Boom... Mmm bye bye!

She is a conflicted Dem. She did a lot by leaving the scene of the crime.

shano's picture

In that graph mentioning all the consumer products produced with oil---all of them can be replaced by Industrial Hemp.  Every single use plastic in any sector from medical waste to lighters and plastic bottles.  The real crime is that the oil-tree pulp-cotton monopolies lobby against any changes in the law.  We should be demanding legalization.

 

It would create new products and new jobs in every industry than now uses oil for production.  This new industry would cause much less pollution, some products would last longer (paper and fabric are stronger when made from hemp), and using hemp in crop rotation actually improves the top soil.

samsara's picture

BS

Yes, you can produce them with hemp.  Pick ONE. 

You will never replace the VOLUME of material needed.   Unless it comes out of a Unicorn's butt. 

Oracle of Kypseli's picture

Those who need to get high pay attention.

Hemp is good. You can also smoke it. You don't need designer drugs.

American Sucker's picture

You can't grow hemp without using oil, and you can't grow hemp without displacing food products.  Modern agriculture is entirely dependent on oil, and there is precious little arable land left for growing much of anything.

clawfoot tub's picture

"You can't grow hemp without using oil"

Wrong.

"and you can't grow hemp without displacing food products."

Wrong.

"Modern agriculture is entirely dependent on oil"

The poison you can't possbily classify as food is.

"and there is precious little arable land left for growing much of anything."

Wrong.

 

Financial_Guardian_Angel's picture

You are a waste of oxygen. You have been smoking too much hemp. Got anything to back up your "Wrongs"?

clawfoot tub's picture

Always looking for a handout or just on this discussion? Do some independent research, it might inspire you in other ways.

tmosley's picture

To start with, hemp grows in ditches on its own.  There is a reason it is called "weed".

When not grown for its THC, it grows very densly and quickly with no care needed, even in the crappiest of soils.  Plenty of semiarid land that could be used for it.  The irrigation systems here in west Texas are circular, and leave big gaps where other things that don't need much water could be grown.  I'm sure they would love to have such a low maintenence crop available to plant there, especially given that it will reseed itself.

Please note that I have never used marijuana, and never plan to.  It should be legal, though.

blu's picture

The NWO Illuminti don't want us to discover abiotic oil! Or energy from water! Or the hydrogen economy! Or zero-point energy!

People keep telling me there are gas mines on Uranus. Why don't we go to Uranus? How hard would it be?

Solutions abound. All this peak oil hocus-pocus is chicken little.

/sarc

Yeah sarc. What the hell, you thought I was serious? Now I'm seriously depressed.

Dr. Acula's picture

>Now I'm seriously depressed.

That's odd. Because if I had special knowledge that a commodity was going to run out, I would buy futures to help preserve it for a time in the future when it will be urgently needed. I could then reap financial gains as a reward for my shrewdness and for speeding the economy to equillibrium. The gains would be especially large if I succeeded in proving other speculators to be wrong.

 

blu's picture

Okay. I see I was wrong. I was only slightly depress when I wrote that.

But now I am really seriously depressed 4 realz.

Dr. Acula's picture

Do not fear, groundling.

FYI the Sun emits 3.8x10^25 watts of energy.

The Earth absorbs 174x10^15 watts of solar energy.

So the Sun generates enough power to run about 218,390,804 Earths. 

Carlyle Groupie's picture

We need a Sun tax to cool things off a bit.

Dr. No's picture

An interesting factoid which has no practical application.

Citxmech's picture

I concur. Ringworld ain't gonna happen, let alone a Dyson Sphere.

buckethead's picture

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Flakmeister's picture

Nice factoid... what does it prove and what is your point?

samsara's picture

Notice the chart of "Proven Reserves"?   Notice the Saudi's claiming 260?

Did your background reading remind you that they have been using that same figure since before 1990?   With all the oil they have pumped in the last 20 years,  their stated 'Proven Reserves"  never changes?

Peak Oil Ya'll.

And Peak Lies

Peak Oil  = End Of Growth

Period

Rusty.Shackleford's picture

Right on, except for peak lies, as this drags out the lying and bullshit will sky rocket

blu's picture

End of growth? Listen, that's not even a serious concern.

There are more people living on earth right now than have ever existed in the history of the human race. Fact. We went from 2 billions to over 7 billions (as of a few days ago) in just over one generation.

Of those 7 billion, probably 5 billion were fed, clothed, housed, medicated, heated, cooled and transported via oil. Not coal or switchgrass or cow dung -- oil. Without cheap oil a big chunk of those 5 billion will not have enough food, clothing, housing, medicine, heating, cooling and transportation to survive.

We could divert our last oil reserves into creating a sustainable world that might (maybe) support 7 billions. But we won't. Because we (the western world and the halls of industrial power) do not give a flying fuck about that because they can't monetize it using their current set of financial and exploitative instruments.

So, game over for a bunch of us.

No way out. No escape. No hope at all.

End of growth. Yeah. End of something.

 

Dr. Acula's picture

Actually the world is full of unused lands, unused resources, idle factories, and material factors of production waiting to be turned into economic goods.

Life would be much easier if there were closer to 70 billion people rather than only 7 billion.

 

blu's picture

Umm ... I'm sure you're right.

LawsofPhysics's picture

You need to read up on how the nitrogen cycle, the phosphorus cycle, the sulfur cycle, and the carbon cycle work.  In order for life to exist those cycles must turn these elements through various oxidation states (plants can only use nitrogen in the NO3 and NH3 forms) and it takes ENERGY to turn those cycles.  

The population got to 7 billion thanks to the Haber Bosch process and burning tons of fossil fuels to make fertilizer (ammonia and nitrates).  Even though some plants will associate with diazotrophic bacteria (legumes), if you don't turn those plants back into the soil, you still need to add the reduced nitrogen from somewhere.  Sorry, if we were to rely on only Mother Nature to turn the nitrogen cycle, we go back under a billion pretty quick, but the phosphorus cycle and the fresh (clean) water issue may become more of a problem before we run out of coal or oil to burn to drive the Haber Bosch process.  Hope you don't invest on bullshit, do your homework and good luck.  Turn off the power or water flow to California and let me know how all those folks in L.A. county alone do once their food spoils.

 

It all about energy and the FLUX of energy into manipulating these cycles etc. in order to provide enough food FAST.  FLUX is the real issue, many of us have systems to cycle these nutrients in our greenhouses etc.  and we are living off the food we grow.  But we are small in number and the realative area, clean water and good soil we use is still significant (about ten acres for my family).  I could probably be more efficient with my composting etc, but the math is what it is.  Best to avoid urban areas just the same.

Dr. Acula's picture

Whatever, Malthus.

Is liposuction a solution for my obese child?

http://www.beautynova.com/blog/?p=79

 

LawsofPhysics's picture

Gee, what a well thought, research-backed by experts and peer-reviewed response - NOT.

Shit, Tom has a better response than you.  At least Tom wants the free markets to take care of this.

 

hey phucknut, there are people who spend there whole lives identifying and developing solutions, there are real experts, and you don't do them any credit.  Let the shit crash and burn and let those solutions come to light.  The REAL ones will find support, people are funny like that when it comes to survival.

Dr. Acula's picture

>At least Tom wants the free markets to take care of this.

Yes, the market will solve this - if it is allowed to operate unhampered.

The government-funded experts trying to save the world 100 years from now with socialist policies and subsidies and wealth transfers and fiascos like Solyndra aren't part of this solution. Socialist indoctrination in government-run biology classes isn't part of the solution. Trying to control how large a dump a person is allowed to take (http://mises.org/daily/3997) won't save the planet.

 

blu's picture

You lost them at "oxidation states"

Okay people, homework assignment: To understand why 50% of the human population are probably going to die of starvation before the year 2040, study up to understand the background to everything that comment contains.

As a bonus, you'll have a good start on a graduate degree in Biology. The only down side is nobody will invite you to their parties anymore.

Dr. Acula's picture

"To understand why 50% of the human population are probably going to die of starvation before the year 2040"

Knowledge of biology alone does not qualify one to make apodictic eschatological proclamations involving the future scarcity of economic goods like energy, fertilizer, or food.

This is rather the domain of the speculators who risk their own fortunes: people who specialize in forecasting unknowable, future market conditions and factors like consumer demand, human ingenuity and technology, and the prices of factors of production.

 

LawsofPhysics's picture

nor does using big words or a philisophical argument against math and the laws of physics, which really don't give a shit and will win in the end.

I think we do agree on one point.  End the fucking manipulation and the government lobbies that are crushing real innovation by picking the winners and losers for us.  Let irresponsible acts and those who commit them accept the consequences of their actions, period.  The current system is not good for real innovation.  In any case, crash the fucking system already so we can find out precisely what the "value" of everyone's labor really is.

Bicycle Repairman's picture

If you are saying that our biggest problems are political, not economic or technical, then I agree.