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Nov
11

Does anyone actually think that this is going to end well?

Does anyone actually think that this is going to end well?

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Spot The Start Of The End Of The Keynesian Dream | ZeroHedge
Presented with little comment, but while there are numerous reasons for elevated oil prices (from short-term supply disruptions, middle-east tensions, and emerging-market demand) it appears something …

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7 comments

  1. Dana Blankenhorn says:

    The problem is not with Keynes, but with our dependence on fossil fuels. To quote from the article — "the potential for infinite supply of fiat currency clashes with the 'finite' supply of hard assets (crude oil in this case)"

    There is no energy crisis. The Sun shines, the wind blows, the tides roll, the crops grow and we live on a molten rock. This is an engineering problem. http://www.danablankenhorn.com 

    If you won't do it for profit, do it for the planet.

  2. Chris George says:

    +Dana Blankenhorn Our entire civilization was captured by those who profit from the bonanza of hydrocarbons. We cannot address the engineering problems without first finding the political will to change this one simple fact. We keep expecting the market to solve this for us. But government intervention has pretty much assured that the market will never get the pricing right.

    We did nothing to mitigate global heating. We will do nothing to mitigate the depletion of hydrocarbons until it is far too late. All of the renewable energy infrastructure is capital/oil intensive. We have maybe another 5 years of billionaires and Barbie dolls left before the reality of this asserts itself. Given our complete lack of preparation for a meaningful transition, I am not hopeful about the outcome.

  3. Dana Blankenhorn says:

    +Chris George I don't disagree with you on the need to change policy. But I remain hopeful. 

    We have made enormous progress over the last five years despite all the oil industry opposition. The demand curve is bending downward, because we're using more of the cheapest form of renewable energy — conservation.

    Wind energy has doubled. New biofuels plants are coming online, and algae systems are already showing a profit selling chemical feedstocks. Most important, solar panel costs are approaching the 50 cent/watt mark, so they can sell for $1/watt. At that point you can get cheaper energy by putting solar panels on a roof than by buying it from the power company, in most places. 

    NatGas may suck next to solar, but it sure beats coal. We have a glut of it, right now. There are tremendous opportunities for profit in just getting what we're finding to market, in building that infrastructure. 

    I know. We'd do even better with a carbon tax. Keep pushing for it. All I do is cover renewable energy as part of my living, and from here things are looking up.

  4. Rick Willis says:

    +Dana Blankenhorn it's good hearing all is not doom & gloom as some (well, actually many) would have us believe. There are those who believe (or at least act like) oil will never run out, those who believe the supply will dry up next week. Thankfully, there are some like us that believes the truth lies somewhere in the middle.

    I here no one championing fuel (hydrogen) from water lately? http://www.americanenergyindependence.com/hydrogen.aspx

  5. Dana Blankenhorn says:

    +Rick Willis The problem with hydrogen, right now, is the round trip cost. You lose too much electricity going from water to hydrogen, and don't get enough back in going from water to hydrogen, for it to work as anything other than back-up power. 

    Hydrogen is a fuel of abundance, however, and abundance is coming. It's not rocket science — that's a pun because our rockets use liquid hydrogen and liquid oxygen, producing a contrail of water as they go up to the sky. It's the only fuel with the bang per kilogram needed to get us into space. Always has been.

  6. graham mewburn says:

    http://www.oil-price.net/
    the above is a good site for comparing the WTI and the Brent
    also the graphs enable one to view 1 month
    1 Q, 1 Y & 5 years
    it seems that the price of crude is trending down over the last 9 months
    that may mean the economy is cooling
    reports of Europeans selling their children
    because they are not able to feed them
    and others ending their lives because the bank is going to take their home
    does not inspire confidence in the future.
    as this spreads to other countries
    it will make it even more difficult to re-ignite the global economy

  7. Fjord Lynn says:

    I follow the Baltic Dry Index as a leading indicator, but there are some problems with using it. The main reason for the divergence in 2009 Q1 is thatbefore the bubble popped, these companies had ordered the construction of more ships for their fleets, using the assumption that the existing demand would continue into the future. These ships take up to 4 years to create and they are ordered and paid for up front. Basically, once they are ordered, the order can't be backed out. So ship inventory has been dumping into a pool of low demand, causing the BDI to fall regardless of oil price.

    You can still use the BDI for a glimpse at world demand though, by using short timeframes where the effect of new shipping inventory is less likely to be seen. This is a pretty good page for tracking it:
    http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

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