Peak Oil and the Credit Crunch

Image - Western civilisation atop the oil donkey. We are too fat and the donkey getting too old. Both fall together.




Excellent story below with some interesting facts and opinions.





http://www.ipsnews.net/news.asp?idnews=47229



Q&A: "The Global Crisis Is Really About a 140-dollar Barrel of Oil"
Chris Arsenault interviews economist JEFF RUBIN

Jeff Rubin

Credit:Chris Arsenault/IPS

VANCOUVER, Jun 15 (IPS) - Sitting in the restaurant of Vancouver’s posh Fairmount Waterfront Hotel, the former chief economist for one of Canada’s largest banks doesn’t seem like the typical apocalyptic peak oil theorist.

But in his new book, "Why Your World is About to Get a Whole Lot Smaller", Jeff Rubin argues that globalisation, fuelled by cheap oil, is finished. In the book, Rubin contends the current global recession is a result of expensive oil, rather than subprime mortgages in the U.S.

Frequently ranked as Canada’s top economist, Rubin predicts that one barrel of oil will cost 225 dollars by 2012. Other analysts consider that number outlandish; the conservative National Post newspaper, where he was frequently quoted as an economic expert before leaving his job at CIBC World Markets, accuses him of "anti-materialism" and "Big oil paranoia."

But in 2000, Rubin correctly predicted that oil would top 50 dollars per barrel by 2005. And, in 2005 he got it right again, forecasting prices would top 100 dollars per barrel in 2007.

Rubin sat down with IPS at his hotel after giving a lunch address to the Vancouver Board of Trade.

IPS: If Iraq’s security situation improves, and its cheap oil comes back online for export, could that stop your prediction of 225 dollars per barrel by 2012?

Jeff Rubin: Not even close. Nor would it stop the prediction that exports from OPEC (the Organisation of Petroleum Exporting Countries), instead of growing, are likely to fall by about one to one and a half million barrels per day over the next four or five years.

It’s not just about depletion [of OPEC oil fields], though depletion is playing a key role. It is also about the explosive growth of oil consumption in OPEC countries themselves. This is the reason why exports have not grown from OPEC in the last five years; they are in effect cannibalising their own exports.

IPS: If the world economy can function with oil at 140 dollars a barrel, are there not huge reserves of unconventional petroleum - oil shale in Utah, heavy oil in Venezuela’s Orinoco belt and deep offshore deposits - that become viable to exploit?

JR: What happened to the world economy when oil hit 140 dollars? Is this deepest recession in the post-war period really about the U.S. subprime mortgage market? Or is it about 140-dollar a barrel oil? I’d argue it is about a 140-dollar barrel of oil.

What blew up Jeff Rubin’s bonus last year? That was about [subprime mortgages in] Cleveland. But blowing up Jeff Rubin’s bonus and blowing up global GDP are two very different gigs.

IPS: At what point does the price of oil make export-driven globalisation untenable?

JR: The model as we know it peaked in 2007. If we measure globalisation by the percentage of world GDP that is an export or an import, 2007 will mark the peak of a past age.

You are going to see less and less container ships. All of those containers are about one thing: a wage arc. Moving your factory from someplace where you pay folks 30 bucks an hour to somewhere where you pay folks 30 bucks a week is great, if it’s just about wages.

But what moves those container ships is oil. At 150-200 dollars per barrel, the wage arc becomes pennywise and a pound foolish because what you save on a wage bill you more than spend on bunker fuel.

IPS: Some analysts estimate that 25 percent of the world’s hydrocarbons are located in the Arctic and will soon be open to exploitation due to, ironically, global warming.

JR: The stuff in the Arctic is a drop in the bucket. You are losing sight of what the Cambridge Energy Research Associates and Exxon don’t tell you about. They hold big press conferences to talk about ‘oh we just discovered the Jack Field - 10,000 feet under the hurricane ravaged waters of the Gulf of Mexico, isn’t that fantastic’.

They don’t hold press conferences [to announce] ‘see this field here? It has been producing for 50 years. It’s about to run dry.’

Every year we lose four million barrels a day [of production due to depletion]. Over the next five years, we are going to have to find 20 million barrels a day of new production, just so that we can [continue to] consume what we consume today.

IPS: Even if you are correct that supplies of cheap oil are dwindling, couldn’t increased efficiency make up for shortfalls in production?

JR: We think that efficiency leads to conservation but history has shown that is not what happens.

The average engine today is 30 percent more efficient than the engines produced before the OPEC oil shocks [of the 1970s]. Yet, the average [North American] vehicle consumes just as much gasoline in the course of a year.

Back in the 1970s, we [North Americans] used to drive about 9,000 miles a year, now we drive 12,000. Back in the 1970s, we weren’t living in the far-flung suburbs. All those gains in efficiency have led us to, ever more efficiently, consume more and more oil.

IPS: What do you think is a bigger threat, peak oil or peak water?

JR: Peak water is a whole other ballgame. But let me tell you a place where peak oil and peak water intersect: the Canadian oil sands. To produce one barrel of synthetic oil, you have to burn 1,400 cubic feet of natural gas, schlep two tonnes of sand [and] pollute 250 gallons of water.

Just like carbon emissions, water is free. If you are an oil sands operator and you pollute 250 gallons of water, it is costless.

(END/2009)

Peak Oil, The Credit Crunch and Immigration Reversal

You can always tell a delusional idiot, for them reality is less important than ideology.

The primary example of this is immigration.

The credit crunch has destroyed totally the entire basis for immigration - and in fact has now led to the point where we must begin deporting economic migrants voluntarily or by enforced means.

Peak Oil will also ensure the same process must begin - but the idiot politicians are so tied up by political correctness that they are unable to articulate this simple economic, social and political reality.

Only the BNP will save this country - only the BNP will save our people - as only the BNP will begin the process of immigration reversal VOLUNTARILY without the crisis point being reached if nothing is done.

If the crisis point is reached then social and civil unrest will erupt that will make the Greek riots look tame in comparison.

Rome has fallen - the elite may still be in denial in their ivory towers, but out on the streets the revolution has already begun.


http://www.lifeaftertheoilcrash.net/Archives2008/KunstlerDecember15ChangeYouWontBelieve.html


Change You Won't Believe

By James Howard Kunstler for ClusterFuck Nation

The peak oil story has not been nullified by the scramble to unload every asset for cash -- including whomping gobs of oil contracts -- during this desperate season of bank liquidation. The main implication of the peak oil story is that we won't be able to generate the kind of economic growth that defined our way of life for decades because the primary energy resources needed for it will be contracting.

Just as global oil production peaked, our economy evolved into a morbid hypertrophy, and the chief manifestation of it was the suburban sprawl-building fiesta that has now climaxed in the real estate bust. By the early 21st century, when so much American manufacturing had been swapped out to Asia, there was no business left except sprawl-building -- a manifold tragedy which wrecked the banks that financed it, and left the ordinary people mortgaged to it with ruinous liabilities.

That economy is now in its death throes. The "normality" it represents to so many Americans is gone and can't be brought back, no matter how wistfully we watch it recede. Even so, it was obviously not good for the country. The terrain of North America has been left scarred by unlovable objects and baleful futureless vistas that, from now on, will shed whatever pecuniary value they once had. It represents the physical counterpart to the financial mess that has been left to the young generations to clean up -- and the job will take a very long time.

We have to, so to speak, get to place mentally where we can face the kinds of change that are now necessary and unavoidable. We're not there yet. It's not clear whether the elected new national leadership knows just how severe the required changes will really be. Surely the public would be shocked to grasp what's in store. Probably the worst thing we can do now would be to mount a campaign to stay where we are, lost in raptures of happy motoring and blue-light-special shopping.

The economy we're evolving into will be un-global, necessarily local and regional, and austere. It won't support even our current population. This being the case, the political fallout is also liable to be severe. For one thing, we'll have to put aside our sentimental fantasies about immigration. This is almost impossible to imagine, since that narrative is especially potent among the Democratic Party members who are coming in to run things. A tough immigration policy is exactly the kind of difficult change we have to face. This is no longer the 19th century. The narrative has to change.

The new narrative has to be about a managed contraction -- and by "managed" I mean a way that does not produce civil violence, starvation, and public health disasters. One of the telltale signs to look for will be whether the Obama administration bandies around the word "growth." If you hear them use it, it will indicate that they don't understand the kind of change we face.

It is hugely ironic that the US automobile industry is collapsing at this very moment, and the ongoing debate about whether to "rescue" it or not is an obvious kabuki theater exercise because this industry is hopeless. It is headed into bankruptcy with one hundred percent certainty. The only thing in question is whether the news of its death will spoil the Christmas of those who draw a paycheck from it, or those whose hopes for an easy retirement are vested in it. But American political-economy being very Santa Claus oriented for recent generations, the gesture will be made. A single leaky little lifeboat will be lowered and the chiefs of the Big Three will be invited to go for a brief little row, and then they will sink, glug, glug, glug, while the rusty old Titanic of the car industry slides diagonally into the deep behind them, against a sickening greenish-orange sunset backdrop of the morbid economy.

A key concept of the economy to come is that size matters -- everything organized at the giant scale will suffer dysfunction and failure. Giant companies, giant governments, giant institutions will all get into trouble. This, unfortunately, doesn't bode so well for the Obama team and it is salient reason why they must not mount a campaign to keep things the way they are and support enterprises that have to be let go, including many of the government's own operations. The best thing Mr. Obama can do is act as a wise counselor companion-in-chief to a people who now have to leave a lot behind in order to move forward into a plausible future. He seems well-suited to this task in sensibility and intelligence. The task will surely include a degree of pretense that he is holding some familiar things together and propping up some touchstones of the comfortable life. But the truth is we are all going to the same unfamiliar new territory.

The economy we're moving into will have to be one of real work, producing real things of value, at a scale consistent with energy resource reality. I'm convinced that farming will come much closer to the center of economic life, as the death of petro-agribusiness makes food production a matter of life and death in America -- as opposed to the disaster of metabolic entertainment it is now. Reorganizing the landscape itself for this finer-scaled new type of farming is a task fraught with political peril (land ownership questions being historically one of the main reasons that societies fall into revolution). The public is completely unprepared for this kind of change. We still think that "the path to success" is based on getting a college degree certifying people for a lifetime of sitting in an office cubicle. This is so far from the approaching reality that it will be eventually viewed as a sick joke -- like those old 1912 lithographs of mega-cities with Zeppelins plying the air between Everest-size skyscrapers.

The crucial element in the transformation underway will be emotion. The American experience for a few generations has produced an adult population with very childish instincts, increasingly worse each decade. For instance, the desperate power fantasies among the younger tattooed lumpenproles -- those with next-to-zero real economic power -- suggest a certain unappetizing playing-out of resource competition when the supply of Cheez Doodles and Pepsi starts to dwindle. But even the heretofore gainfully employed middle classes are pretty lost in fantasies at least of comfort an convenience. For years now, I have wondered how their sense of grievance and resentment will be expressed when the supermarket shelves run bare and the cardboard signs get taped over the local gas pump and the cable TV gets cut off for non-payment. You wonder, to put it bluntly, how far gone we really are.

Obama - the capitalist stooge

There is nothing more stupid than the public in a 'democracy' where the media is owned by corporations and is able to get politicians elected to power.

In the farsical 'democracy' of America in order to get elected into power you must be able to demonstrate the following ;

1) You are a puppet of the bankers who can be bribed with political donations to your campaign.

2) That you can and will spend hundreds of millions of dollars on advertising with the corporate media to ensure you get elected.

3) That you insert your tongue firmly up the arse of AIPAC and demonstrate that you are a stooge of the Israeli lobby groups and that you will put the interests of Israel before those of the US.

If you dont do all three - then you aint gonna get elected.

Obama has done all three which is therefore proof that he AINT GONNA CHANGE A THING and that its business as usual for the crooks that run America.

The new boss is the same as the old boss.

The new boss may have a slightly raised melanin content than the old boss, but the new boss is as much a whore as the old boss was.

Obama is still in the pockets of the same scumbags that controlled Bush - so he aint gonna change a thing.

The bankers, Aipac and the media will still control America - so there aint gonna be no change you dumb shits.

Take Obama's latest supporter Colin Powell.

This is the man who lied in the UN about the WMD in Iraq and who drivelled the most disgusting lie in history when he said Iraq had weapons that could hit the West in 45 minutes.

It was Colin Powell who was the architect and sponsor and propagandist for the Iraq War, he was the little Drummer Boy banging his drum in the media and the UN for WAR, WAR, WAR, BABY !

Yet now he endorses Obama, the supposed anti-war candidate.

That is a bit like having Dracula as a supporter of the Anti-Vampire Party.

I wonder if its because 'e is blak innit', that Obama gets his vote.

So much for whites having to vote for non-white candidates in order to demonstrate their anti-racist credentials, yet when a black candidate comes along Oprah, Powell ( a republican) all become supporters of the Black candidate.

Kinda reminds you of the O J Simpson murder trial dont it, when all the blacks in the US were saying ' he is innocent' and the whites knew he was guilty.

What a shame for the blacks in the US that OJ went and wrote a book boasting about how he did the murders in order to profit from it.

The fact that Obama is crowing about having powell support him is a sure sign the guy is an idiot.

If he truly was against the war then he would say ' On your bike Powell, you were the main propagandist and exponent of the war, having you on board with us is like having having OJ Simpson run a campaign against domestic violence '.

Yet the supposed anti-war Obama wants Powells support - which just goes to show that Obama has no principles and is just another opportunist self serving politician.

No doubt the media will not point out that the anti-war Obama having the person responsible for propagandising the Iraq War on board with him is an act unparalleled hypocrisy , staggering in its breathtaking chutzpah.

Thats the joy of having a corporate media - little things such as exposing the bullshit of politicians is hidden to make sure they retain credibility with the morons and lemmings who vote for them.

The other issue of Obama is who funds him.

Obama is supposed to be for the working man, so why is he being funded by the bankers who have destroyed the American economy and who have put millions of working people into homelessness and poverty ?

Obama boasts about raising 160 million dollars in a week for his campaign - that demonstrates to me the man is a sick, evil and twisted bastard.

If he had any sense of decency he would donate that money to the poor of America, so that people could get hospital treatments and stay in their homes instead of using it to pay for TV adverts and enrich the same scumbag corporate media who promote him.

The bankers give millions to Obama as the media promote him as a candidate who can win the election, Obama then pays the corporate scum media millions of dollars for advertising and they then promote him as a candidate to win the election thereby guaranteeing that he will get more millions in donations to be given straight back to the media for more adverts.

Its a circle of iniquity and corruption that is evil.

YOU HAVE GOT TO BE AN IDIOT IF YOU CANT SEE THIS IS THE BIGGEST SCAM IN HISTORY !

I wonder if that snivelling sack of shit Michael Moore will do a documentary about how Obama, the bankers and the media are all whores making money of the American public. I doubt it.

Barack Obama’s top campaign contributor is the international Finance firm of Goldman Sachs led by Larry Blankfein.

Three-fourths of John McCain’s top 20 contributors are New York international bankers, including Goldman Sachs.

Both Obama and McCain have benefited from over 2 million dollars of donations from the same banks which are now being subsidised by the US government.

The tax payers give billions of dollars to the banks and then the bankers give millions to Obama to get him elected into office.

We all know that Obama will protect those who fund him now - and that this oney is how such politicians are bought and paid for.


If Obama had a single shred of decency he would give that 160 million dollars to the poor of America instead of using it to subsidise the corporate media.

If he had a single human aspect to his soul he should give all the money donated to him from the bankers straight to the charities in America that help the homeless - but he wont,

thats because he is just another political whore master son of a bitch scumbag.

Instead Obama will get elected because of the bankers money and he wil lick their hands for his reign as supinely as a dog licks the hand of his master.

Obama is a stooge - McCain is a stooge.

America deserves all it gets.

The People Come Before The Banks

Image - White female slave being sold in 18th century Islamic slave market.













Throughout history the forms of slavery have evolved.

First man enslaved man.

Then man enslaved the animals.

Then man created mchines to become his slaves, and now man is the slave of the machines he created.

We have created a so called 'free society' where men are less free than any time in human history.

This is because a society of Debt Slaves and a Wage Slaves is far easier to control than a society of free citizens.

The aim of forcing people into debt and dependence on credit is to keep them under control.

The media condition individuals into becoming slaves to False Needs, in other words to buy the endless crap of consumerism, in order for them to be kept under control.

The government needs it citizens dependent on debt in order to keep them quiet and under control.

The corporations that donate to the political parties require the media to condition people into buying their rubbish in order to make the profits to subsidise the political parties that getinto government and to pay for the advertising in the newspapers that promote their rubbish - it is a nexus of greed and corruption that depends on the public being slaves to their masters at all times.

The report below reveals just how much money the average family has to spend in order just to afford a home in their own country, and this is scandalous.

The fact that most working families will never be able to buy a home in their own country is proof that this nation has abandoned its people.

Hundreds of thousands of families are also now facing eviction due to the credit crunch - and this demands radical action.

Emergency legislation must be passed through Parliament allowing families to apply to the courts and suspend eviction proceedings and renegotiate their mortgage payments if they are facing eviction.

All families must be guaranteed a home in their own country, and if this requires the government invest in massive new council home building schemes then this must be undertaken - even if it requires the seizure of land owned by the large supermarkets and foreign coporations to get the land to do that.

Families must NEVER be evicted from their homes just to keep the fat cat parasite bankers in luxury - the people come before the banks.










http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/10/nmortgages210.xml



Couples on average wage struggle to buy homes
By Laura Clout
Last Updated: 10:01am BST 10/07/2008



Couples on average earnings now have to set aside two-thirds of their income to cover the costs of buying a home, new figures suggest.

If both were earning the average wage, they would have to save two-thirds of their take-home pay of £44,000 to cover the costs of buying a home.

A decade ago, couples on average earnings could have had to set aside just a fifth of their joint income to cover these costs.

advertisementCouples with a combined take-home pay of £27,500 or less would have to save more than a year's salary to cover a deposit, stamp duty and solicitors fees on the average first-time home, according to figures from the Royal Institute of Chartered Surveyors (RICS).

David Stubbs, senior economist at the RICS said the situation was likely to worsen.

"Access to the housing market has deteriorated as the credit crunch has taken hold of the mortgage lender sector.

"The picture does not look improving in the latter part of 2008 and first-time buyers will find their path to home ownership increasingly blocked."

RICS said the increasing difficulties faced first-time buyers were being driven by the huge deposits mortgage lenders now required, as well as the high level of stamp duty people had to pay.

Income for people in the lowest quarter of earnings has increased by an average of just 3.5 per cent a year since 1996, while house prices in Great Britain have soared at an average rate of 10.3 per cent.

However, the research found that affordability problems had eased slightly for people who were able to buy their own home.

It said a couple on the bottom quarter of earnings would now have to spend 34.5 per cent of their take-home pay on mortgage repayments, down from 37.2 per cent during the first three months of the year and a record high of 46.5 per cent at the end of 1989.

The improvement in affordability has been caused by a combination of falling house prices and the larger deposits people are putting down, leading to them having smaller mortgages.

London is still the most difficult place for people on low earnings to get on to the property ladder, with couples in the capital needing to save 133 per cent of their annual take-home pay.

The North East is the most accessible region, with couples needing to save 72.9 per cent of their annual income to buy a home.

Libertarian Alliance Banking Proposals

Very interesting proposals below from the Libertarian Alliance - but wrong in parts as the US Federal Bank and Bank of England are not government banks, they are private banks who create money for their own enrichment. The Bank of England is independent, not a government bank.

http://www.save-a-patriot.org/files/view/frcourt.html

What we should do is create a Bank Of Britain which is based on the gold standard - in other words its deposits are assured by gold deposits. At the same time we can then use that bank to subsidise the credit unions we want our people to use to replace the control of the private banks and also to subsidise the public works projects we propose.

That way we create a bank we control totally whilst allowing the private banking system to destroy itself.





NEWS RELEASE FROM THE LIBERTARIAN ALLIANCE

In Association with the Libertarian International
Release Date: Friday 4th April 2008
Release Time: Immediate

Contact Details:
Dr Sean Gabb on 07956 472 199 or via sean@libertarian.co.uk
For other contact and link details, see the foot of this message
Release url: http://www.libertarian.co.uk/news/nr065.htm

Statement by the Libertarian Alliance on the Financial Crisis: Time to
Return to Gold

The Libertarian Alliance, the radical free market and civil liberties
policy institute, today issues the following statement on the present run
of crises in the financial markets. This statement is prompted by the
various calls made for closer regulation of the financial sector.
Libertarian Alliance Director, Dr Sean Gabb, says:

"The world may or may not be on the edge of financial collapse. But the
present run of banking crises is only the latest consequence of the
ending of the gold standard. Since 1914, and more particularly since
1971, the ability of governments to create unlimited amounts of fiat
money has led to bubble after bubble, each one larger than before.
Financial markets have become little more than casinos. Immense resources
have been diverted into the promotion and management of speculation. All
other economic activity has been subordinated to and therefore distorted
by such speculation.

"The latest set of problems, brought on by fooling lending on property in
America, is not a failure of the free market system. It is ultimately the
effect of government monetary policies. The answer does not lie in some
new set of regulations, which may prevent the next speculative frenzy.
The true answer lies in the return to a more sensible and more honest set
of monetary arrangements.

"We mean by this the return to a fully convertible gold standard.

"The Libertarian Alliance calls on the British Government to do the
following:

* To order the conversion of all foreign currency reserves held by in the
Bank of England into gold;

* To sell every reasonably marketable asset of the British State, to
convert the proceeds into gold, and to lodge these at the Bank of England;

* To revalue the Pound, so that all claims on the Bank of England were
equal to the gold reserve of the Bank of England:

* To impose on the Bank of England a legal obligation to pay all claims
on it in gold, on demand and without limit:

* To impose on the Bank of England an obligation to do all within its
ability, and nothing other than this, to maintain the new parity between
the Pound and gold:

* To impose on all deposit receivers operating in the United Kingdom
(unless explicitly exempted by contract) to pay all claims on them in
gold, on demand and without limit;

* To make the directors or, if they are without the jurisdiction, the
most senior management of all deposit receivers in the United Kingdom
personally responsible for any failure to make such payments:

* To impress on any foreign government or central bank that might choose
to fix a parity against the Pound that no assistance whatever would be
given to maintain such a parity.

"We note that these measures would bring about first a severe devaluation
of the Pound, and then a credit squeeze that deflated the value of real
and financial assets. But this is what we seem already to be facing. A
return to the gold standard would provide us with a stable financial
system, and would tend to protect us against future bubbles, and would
abolish the need for intrusive financial regulation.

"We also note that a fully convertible gold standard would make all money
laundering laws unenforceable, and would severely limit the ability of
the British State to finance its activities by the unlimited sale of
bonds to the banking system. We would unreservedly welcome both these
effects.

"We look forward to a Britain, and preferably a world, in which fiat
money has become as unusual as state ownership of telephone networks, and
in which paper and electronic money is a rare substitute for gold and
silver and copper coins."
END OF COPY
Note(s) to Editors

Dr Sean Gabb is the Director of the Libertarian Alliance. His latest
book, Cultural Revolution, Culture War: How Conservatives Lost England,
and How to Get It Back, may be downloaded for free from
http://tinyurl.com/34e2o3. It may also be bought. His other books are
available from Hampden Press at http://www.hampdenpress.co.uk.
He can be contacted for further comment on 07956 472 199 or by email at
sean@libertarian.co.uk

Extended Contact Details:

The Libertarian Alliance is Britain's most radical free market and civil
liberties policy institute. It has published over 700 articles, pamphlets
and books in support of freedom and against statism in all its forms.
These are freely available at http://www.libertarian.co.uk

Our postal address is

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Associated Organisations

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organisation to the Libertarian Alliance. Its mission is to coordinate
various initiatives in the defence of individual liberty throughout the
world.

Sean Gabb's personal website - http://www.seangabb.co.uk - contains about
a million words of writings on themes interesting to libertarians and
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Hampden Press - http://www.hampdenpress.co.uk.- the publishing house of
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