"It’s not an oil crisis, it’s a dollar crisis"

episkey, great point and nice link! Robert Bryce really puts things in perspective:

"In 2007, out of the 32 industrialized countries surveyed by the International Energy Agency, only one (Mexico) had cheaper gasoline than the United States...

(Gasoline is also cheap compared with other essential fuels. A Starbucks venti latte costs the equivalent of $23 per gallon, while Budweiser beer runs $11 per gallon.)...

The simple truth is that Americans are going to have to get used to more expensive gasoline. And while they may continue grumbling at the pump, they need to accept the fact that even at $3.50 or $4 per gallon, the fuel they are buying is still a bargain."

Yes, Yes, Yes,
I'll shall buy this book...
Perhaps on one of my excursions to your Mall...
I still have room in my rented storage unit...............
To save it, for when I have time to read it....................

How sad....
Consumers no longer being able to consume. (Insert sarcastic laugh)

This man paints a very grim portrait of Americas money. The most unfortunate truth about what he writes is the fact that most of it will in inevitably come to pass.

"It is unfortunate that the Supreme Court, in its ruling this week that U.S. currency is unfair to the blind, did not make the next logical step and declare it unfair to everyone who buys gasoline."

Unfortunately for Mr. Schiff, it wasn't the Supreme Court that made that ruling. It was a federal appeals court.

As for the rest of his assertion that we the spoiled masses are to truly be at fault for the downturn in our economy, he is again in error. There were plenty of things that happened behind the scenes that engineered our current problem. Deals made between lenders and legislators, deals made between lenders and realtors, deals made between lenders and merchants, and so on and so forth.

It could also be said that there was a metaphorical gun put to our heads after 9/11, when the public push was to spend like there's no tomorrow, "or else the terrorists win".

In short, we didn't just stumble into this problem. We were guided to this point by those who valued blood and treasure more than anything else. And yes, we the unwashed masses do need to worry about our own house of cards right now, but it is not helping to have someone like Mr. Schriff stand there smirking like he witnessed a schoolyard bully trip his hapless victim.

The historical success or America's economy and it's political experiment in democracy was in no small part due to the freedom and work ethic and rule of law that we all enjoyed. However, the unprecedented increase in complexity of our society, the massive division of labor, and the rise of the middle class were also made possible only with the help of a tremendous throughput of matter and energy. It is this flow of matter and energy, and only this flow, that has made it possible for society to exist so far from equilibrium.

See:
http://en.wikipedia.org/wiki/Dissipative_system
http://nobelprize.org/nobel_prizes/chemistry/laureates/1977/prigogine-lecture.pdf

Historically, this matter and energy has come from the following sources:

1. Initially, the frontier provided seemingly limitless resources to exploit. Soon, however, growth occupied all corners of the interior and the frontier became exhausted.

2. Then, to maintain the flow of matter and energy, the economy turned to exploitation of external resources in the form of neocolonialism. But as third world nations became better able to protect themselves, and as non-renewable resources became increasingly scarce for everyone, exploitation of those nations became increasingly difficult if not impossible.

3. The final victim is that group of people completely and utterly unable to defend themselves: future generations. This generation has borrowed inveterately to maintain its consumption. Since what is being borrowed is consumed, there is nothing left to repay the debt. Once life begins to eat its children, there can be nothing left.

4. The final stage is being seen now, where our last vestiges of integrity are thrown out the window and our very institutions are dismantled for every last drop of succulence that can be squeezed out. There isn't a pot of money that isn't being ransacked or a guardian that isn't being perverted in this sick endgame. Never mind the dry husks left all over our moral and political landscape. Why bother to save them when they will pass away soon enough anyway?

Given these facts it is inevitable that our wealth and power will shrink a lot. An economy based on consumption will have to adapt to having less. And a smaller throughput of matter and energy inevitably means a simpler societal structure. So, prepare yourself and your family for the coming neofeudalism. The smart rich people are, but they are preparing to be the lords not the serfs.

The only question in my mind is:

Will we we demand unabated consumption as our birthright and devolve into bigger and bigger wars over less and less resources, exhausting our resources all the faster and poisoning our planet to boot?

Or will we adapt peacefully and spin down our consumption with humility and grace, perhaps turning our progress inward toward evolving the human soul?

I hope with all my heart we take the second way!

Please help make it be the second way!

Remember, you can't break the laws of thermodynamics, so the end result of both routes is the same: We will have less. But how will we have less?

Peace,
BentFranklin

Very good read - and great comments too. I've always felt that economics and finance are one big shell game. We may as well call it "hide the debt." Could it be that the game is up and we'll be forced into fiscal responsibility at long last?

The dollar is weak, of course it's going to cost more for gas... when you have a system that runs on the dollar, this is what happens... and don't forget the bill for Iraq!

Peak oil deals not just with falling oil supply (it is not about oil running out, make that distinction), it is also about increased demand. So yes, this is still peak oil. This dude is a dumb shitte pissant, studied too much neo-classical economics.

I would tell him to read some ecological economics, and stop wearing a suit and tie. Pissant.

XVX for life, R.A.S.H. 'til death.

OIL is getting OUT of CONTROL! its gonna tare this world apart.

The price of gasoline is absurd. It seems to me that the oil companies are just being greedy. Eventually the high price of gas is going to wipe out the middle class of America out all together.

Americans should pay as much for gasoline as those in most European countries.

$4,00 /gallon and people are whining? They should pay at least $5.

In fact if that had been the case for at least 10 years demand today would not be so astronomically high.

American are not entitled to cheap gasoline.

@currentkid.... it's spelled "tear." people said the same things back in 1973 and 1983. it didn't "tare the world apart then, either. -- back to your crib.

you guys, aside from hawkmang and one or two others, are hilarious.

why is oil so expensive? because "you" got Congress to make offshore drilling illegal for American companies. so additional supplies which could have ameliorated the rise of prices in the face of increasing world consumption aren't coming to market and can't for another ten or twenty years, at the least.

play with this idea for a while... http://www.plusaf.com/gasprice2.htm

and now you blame excessive consumption by the "rest of us" as if the first cause never existed. YOU wanted this, now you've got it, and you're trying to avoid any responsibility for it. sorry, but i'm calling you on it.

yes, our government has debased and inflated our currency out of all realms of sanity. you asked for this, too, by asking them to be the guarantor of last resort for many things that could be handled in many other ways. you pay sugar growers inflated prices for sugar, which the government buys, then sells at a loss [to YOU] while other countries could have delivered it to you at EVEN LOWER prices. because you mistakenly believe that "saving small farmers" is more important than sucking money out of EVERYONE'S pocket to support A FEW YOU LIKE.

capitalism = turbulence, and you've gotten your government to try to eliminate it from a system which does so much better WITH the turbulence than without.

you rag on banks and other "big business thieves" when YOUR government, demanded by YOU and YOUR VOTES, made states' usury laws illegal just before the "mortgage meltdown."

YOU demanded subsidies to increase production of biofuels with NO VIEW to the future or any imagination that the Law of Unintended Consequences, AGAIN, would create famine and starvation to some of the world's poorest people as a result.

and now you blame everyone but YOURSELVES for the results.

@stardate, fuel "costs" more in Europe because they charge MUCH higher taxes per litre there than YOU will LET YOUR governments add on to the price per gallon HERE!

the most popular presidential candidates float absurd ideas like the "gas tax holiday" to give the low-price "candy" to your diabetic body. and you love them all the more for it!

@Bertelsen, it isn't greed, its simple economics, which most of you seem to think really don't work well, but after your tinkering with them, you also can't understand that the results YOU want and get are ALWAYS, in the long run, worse "for the masses" than you ever imagined....

AND YOUR SOLUTION IS ALWAYS: MORE TINKERING.

if the "mortgage crises" had run its path without ANY government intervention, it would have been over by now. companies would have gone out of business, but YOU think that that, TOO is bad, and should be prevented. that's not so, but it doesn't fit your beliefs, so life will go on as it has for decades, if not centuries, bouncing from one mistake to another while people like YOU try to rein in and control things which work better with FEWER, if any, controls.

YOU'LL never let THAT happen. you know better. your beliefs are stronger than any facts anyone can put in front of you.

you decry the defects of the "free market" when YOU'VE NEVER SEEN ONE. you've never lived under ANY "free market economy" and the odds you never will, because when ANYTHING seems to go wrong, YOU add more and more controls and regulations to FIX things that shouldn't be fixed.

you'll never learn, and you'll NEVER believe me.

Wow. Interesting and clearly stated -- i feel like it's the first time I've read a simple explanation of the Big Picture. Makes me want to buy the book, if it's more of the same...

People, get some perspective. We are being manipulated by the neo-con agenda, that's all.

This peter punkin eater schiff crackhead guy is full of misinformation.

Someone, some group is attempting to take us over without firing a shot - and it has been enabled by the Busheney gang. In fact, they are profiting from it.

The dollar going down and all that, supply and demand, China's increased consumption. It's all BS. You guys need to question everything. Don't accept anything just because claimed "authorities" on the subject say it and represent statistics as absolute facts.

It's BS!

Look at the trajectory of things. Look at what's been happening - very obviously since the Busheney gang stole the 2000 election. Why would you think this isn't some part of the "extended plan"????????

mccain is part of it, and he'll change his colors like the lizard he is in an attempt to fool you.

We need to overwhelmingly vote OBAMA! Give Obama an agenda like get profiteering by the oil companies under control.

it's no different than what Enron did, these people have just figured out a way to do it more discretely with oil now. Say thank you Mr. Bush for being the traitor your grandfather was.

Give Obama the mandate to clean up government and corruption, to return our country back to an honorable, moral America. Out with the lairs and manipulators.

Oh boy, long post by plusaf with lots of silliness. Let's obfuscate his view a bit.

What an interesting fantasy world you live in plusaf, where all the world's economic ills are caused by government incompetence and populist demand. Not that I'm going to convince you of anything, because despite your complaints about the inflexibility of others, you seem awfully inflexible yourself.

Sorry buddy, but I haven't done anything. I don't know why you keep saying "YOU" when most people haven't had any part in what you're describing. We live in a Republic, we only barely have control over what Congress votes in. So you can ease up on that, since by your own logic you're equally as responsible.

Isn't it convenient that you can ignore the fact that America consumes 50% of the world's oil? But nahhh, all that stuff about overconsumption is overblown. And even though all the models for Peak Oil have all come true right down to the dot, it's obviously not the result of a completely unrealistic reliance on a finite resource. The first trillion tons of oil was consumed from 1850 - 1970, the second trillion was used between 1970-now.

The mortgage crisis would be over by now? Uhh, what controls made such a massive difference? Those lenders are all fucked and so are those people. Free market or not, it's a huge hole in the economy. What aspect of a free market would makes that crisis "over?"

And just like a communist, a free market advocate is willing to ignore basic common sense and simple historical fact to get their point across. Get real, there's no such thing as a free market. It's an illusion, and the world got over it a long time ago. Why? Because there's no practical difference. When you "free" the market, you're just giving control over to different hands. Namely, private hands. Your precious free markets destroy themselves, they create monopolies and power relationships that no one could possibly overcome. Hence the entire struggle of the U.S. from 1870-1940 to overcome basic market inequities. You know, like trusts, minimum wage and child labor. Those were the good old days.

You sit and argue for "free markets" when you know that a truly free market cannot ever possibly exist. Why? Because basic regulation is needed at some point. You can sit there with your thumb up your ass about the issue, but I guarantee you appreciate the FDA ensuring there isn't fucking opium in your food or drugs. Oh no, what a terrible restriction.

The bottom line is this, your argument is a labelist one. "The market" is an _arbitration_. Like "the government" or "human rights," we fucking made these things up. They don't actually _exist_, They're an ideological platform for the legitimate use and extension of authority and power for certain groups. So when you open up markets, you're just allowing power to express itself in different ways. In this case, that ideology encourages those with capital to rely on their complete self-interest and gives them the power to do so very effectively. And self-interest isn't exactly the most productive force in human nature.

That's why our government was founded on checks and balances, because ALL power needs a check of some kind. That includes the power of private industry.

So stop pretending like you're the master of economics, when it is in fact one of the most indeterminate fields of study that there is. Because really, no one has a really good idea of these things work exactly.

Economics is as predictable as climatology. Evidence is difficult to accurately collect and the mechanics are too enormously complex to make simple precise judgments with any certainty.

And that's exactly the point I want to make. Perceive these things _inductively_, _not deductively_. You're as much in the dark as anyone.

But apparently you're right and I'll never believe you great messiah. These vast assumptions which you call facts will never phase an ignorant plebeian such as myself.

Part 1.........................

@Saladin, thank you for agreeing with my statement:
"you decry the defects of the "free market" when YOU'VE NEVER SEEN ONE. you've never lived under ANY "free market economy" and the odds you never will, because when ANYTHING seems to go wrong, YOU add more and more controls and regulations to FIX things that shouldn't be fixed. " when you said "Get real, there's no such thing as a free market. It's an illusion, and the world got over it a long time ago. Why? Because there's no practical difference. When you "free" the market, you're just giving control over to different hands. Namely, private hands. Your precious free markets destroy themselves, they create monopolies and power relationships that no one could possibly overcome."

every monopoly was enabled by government regulations or controls OR LACK thereof, perpetrated upon those poor folks.. and us... by them that we elected.

your obfuscation is an accurate term....

all of the administrations i've lived under, from about Eisenhower on, [other than the shit-pile FDR started, with "Social Insecurity", was implemented by people who voted for these morons over the past 60+ years i've been watching the circus. if YOU doesn't include everone here who voted for them, [including ME!] how the frack did they get in office? transsubstantiation?!

WE THE PEOPLE voted every one of those imbeciles into office. i have railed against the lack of logic of people who HAVE voted them in, all the way back to Nixon and Humphrey. as the saying went back then, "Nixon would sell his own grandmother.... but Humphrey [very liberal economics, btw] WOULD GIVE HER AWAY.]

so we use 50% of the world's oil? right now there are people fighting and begging to get INTO our country, not out... and many more just plain sneaking in. THAT'S a sure sign we're a bad place to be, right?

if you could read any of the stats on the mortgage "crisis" you might learn that before it even peaked, several hundred BILLION dollars were flowing towards bailing out [and buying out] the companies who were in such "desperate trouble" that the gumblement "had to step in." the whole mass of underwater mortgages amounted to a fraction of one percent of the GNP, yet you and the mass media made it look as if it were 50% of EVERYTHING and needed immediate help! .......... as usual.

and while my thumb is, i assure you, NOT up my ass, perhaps you'd like to take your HEAD out of yours before you say things like "You sit and argue for "free markets" when you know that a truly free market cannot ever possibly exist. Why? Because basic regulation is needed at some point. "

Part 2.............

when you START from the position that "regulation is needed" it's all downhill from there. if anything you're regulating gets the tiniest bit off track, you give it MORE regulation. in engineering, that's usually the sign of "positive feedback" in a system, and virtually all of the time, positive feedback into a system results in uncontrolled oscillations of increasing magnitude, and eventual total loss of the system...

to which your answer is, of course, "MORE REGULATION."

which you can't see.

as for opium in my medicine, does the gumblement HAVE TO BE the ONLY trusted way to do that? wouldn't your baby Ralph Nader just love to oversee the controls on drugs to keep the impurities out? i'd think you'd LOVE to have his PRIVATE organization doing a better job than we have now!!! why not?

after all, our own paternalistic and wonderful FDA has not approved a whole bunch of drugs which have been available to millions of other people in many other countries around the world for years or more!
you want to perpetuate fewer cures for diseases? ok, maybe that's part of YOUR grand plan, but i can still think it's stupid.

sure, the chinese have created sick people and dead pets in the US, and have sprayed lead-based paints onto our kids' toys..... just like your ancestors in the Old West sold "snake oil" which probably killed more than it cured. that's part of growing up. quite a few chinese committed suicide as a result of crackdowns based on their "shortcuts." you want them to jump from the 18th century to the 21st overnight? well, we didn't either, and tons of furniture in the US had lead paint, maybe even up til around your first birthday.

you talk about economics as an unpredictable system. i completely agree.

yet "you" seem to be more than willing to believe in people who claim to be able to "run that machine" better than anyone else. again, if it doesn't work with THESE controls, ADD MORE controls.... you destroy the logic your own arguments are built on.

I can NOT DECUCE from watching economic swings over 40 years or more and manage, somehow, to see that the things which were done to the economy inevitably created the opposite effect they were intended to have?!

can't you?!

yet you continue to believe that all businesses are out to screw the individual and that all individuals need protection from them. and especially, bigger = worse.

i don't want anyone to consider me any kind of messiah. messiahs tend to have their lives cut short by people who don't share their beliefs. the track record has been really shitty, for say, 2000+ years or so, right?

and Part 3.........

if i can get one or two people to question their beliefs and open their minds to alternative explanations to those they've had injected into their minds for ten or twenty or thirty or forty years, and maybe a few come to realize that the logic they've been following for so long isn't infallible, then i'll be very happy.

if nobody believes me and nobody ever changes their mind, it won't bother me at all. i've worked in industry for some large companies, and probably hundreds of people there, too, didn't listen to my views or "see things my way." and while i can't prove we would have been more successful following some of my ideas, none of them can prove we were better off by not trying them, either.

and, along the way, i've found maybe a few dozen... maybe even a hundred folks... who think that my logic is "spot on" and encourage me to tell even more people my views.

so, if you're not one of them, i really don't give a rat's butt. maybe someone else is.... and i've even found a few here at current.com.

current.com, to me, is basically an Al Gore offspring, populated largely by his followers and people whose beliefs fall in similar ranges. there are tons of agreement with his side here, and maybe a few ounces of support for my views here... look at the votes. it's obvious.

but i love the debate and the challenge. and the name-calling.

and maybe some day, a very nice monument willl be put up for me, and it will say, "Damn! He WAS right, after all!"

hell, if i pre-pay it, my tombstone could say exactly that!

thanks for your "input."

read one of my favorite sources here.....

http://search.forbes.com/search/colArchiveSearch?author=Fisher

and some of the best REAL economic analysis i've ever seen is here....

http://www.wallstreetdigest.com/investors/index.php

though you've got to pay for a subscription to see the real meat... i excerpt some parts occasionally on my plusaf.com website....

you won't read that, either... :)))))))))))))))))))))))

"We can look for scapegoats all we want but the simply fact is Americans are going to have to get used to a much lower standard of living. "

For real? No thanks.

the penny and nickel are worth more melted down as scrap. way to go W!

Sooooo you're unable to address anything I've said? You're just going to ignore half of it and continue to use a labelist argument?

Errrm, explain to me how government controls cause and sustain monopolies and why that doesn't happen in European countries. It doesn't seem to make any sense to me.

Once again, you've lumped me into a group of people that I'm not a part of. I didn't vote for any of those people and even if I did I'm not responsible for their actions because I have no control over them. But you failed to address that logic, because your "blame the victim" mentality doesn't actually hold much ground.

And I see that our energy expenditure was rather shocking to you, because after I said it you assumed it was a good thing. Yeah, people do come here because we use all that energy, it makes us fat and happy. Doesn't mean that it's SANE or not wasteful. It's not as if the more people that believe something the more correct it is.

And while you may not be a fan of Social Security (which is ok, I'm not the socialist government control goonie you're thinking I am), I'd like you to answer me this question. How much money do you make? Because a lot of people in this country make jack shit and are never able to retire without it. Especially my generation, thanks a lot for fucking us over, since by your logic it's the peoples' fault.

You're IT'S ALL DOWNHILL FROM THERE argument is actually a slippery slope fallacy, quite a literal one actually and I thought that was kinda funny. And well, yes, the government IS the only one that can regulate what goes into your food and medicine. What else but the justice system can hold corporations accountable? Unless you consider mass insurrection typical market behavior. That's like arguing that the government isn't the only one who can run the police or the army. Well yeah, but what force is stopping them from doing whatever they want? Once again, a fact you ignored in my post. Along with all the basic labor laws.

You also ignored my checks and balances argument among others, because there is one uncomfortable thing you don't to admit. And that is, totally free markets have very serious repercussions for people because they are an unchecked power. I don't think the founding fathers ever intended for there to be any unchecked power.

And since you're making all these assumptions about me let me make this clear. I'm not some crazy left-wing Gore acolyte that thinks that corporations are totally evil and that they should all be forced to get permits to take craps. I understand very well that a command or socialist economy also runs into very serious problems. I understand that regulation can fuck up the economy sometimes.

I am not an economic "liberal" or "conservative." In my opinion, neither of them work better. They just have different effects on society. I believe the government needs to fluctuate between those two positions to keep things in balance.

But use some common sense man, too far in EITHER direction has seriously terrible consequences. Ones that I know you're not willing to overlook because I know there are certain restrictions you agree with, even begrudgingly so.

So while I applaud your efforts to open people's eyes to different viewpoints, I don't appreciate you perpetuating fantasy.

@Saladin... [and anyone else who's curious...]
see my responses in http://www.plusaf.com/current.doc

it wouldn't have been polite to put it all here... too much screen space.

enjoy!

thanks for the questions!