Talk about gems! This one deserves full circulation!
Quote:
Infrastructure, as with everything, should be built on an as-needed basis. Not on a stimulus-needed basis. As a stimulus, it is just more mis-allocation of resources.
How is it that a land with incredible wealth can be a basket case? (I'm thinking, "Africa.")
How is it that a country with no natural resources can be one of the richest and advanced countries in the world? (I'm thinking, Japan.... in spite of their Lost Decade)
How is it that circa 1910 the U.S. & Argentina had similar GDPs and now Argentina is a basket case and the U.S. is at risk of 'rapid and sudden' collapse?
The deciding factor is the-side-of-finance a government puts itself in. Debt payers put themselves in a bad situation.
Failed nations have this in common: crushing debt.
The debt to GDP ratio is simple arithmetic: debt divided by GDP. Since 2007 the US debt has grown and the GDP has shrank. It is going to get a lot worse.
Note that in the chart, the ratio skyrockets after 1929. That was mainly because of a collapsing GDP in the denominator. (Of course, FDR's spending made things worse!).
The ratio is much worse today that it was in 2007. And in 2007, when things were going 'so swell,' it was much worse than 1929 or at the height of the Great Depression.
Montagon is probably right, who ever that is,
Quote:
"U.S., faces 'rapid and sudden' collapse: Montagon"
Joined: Jan 2007 Gender: Male Posts: 271 Karma: 16
Re: Oil Depletion & Collapse of the American Dream « Reply #76 on Jan 17, 2009, 1:31am »
PS
Quote:
Infrastructure, as with everything, should be built on an as-needed basis. Not on a stimulus-needed basis. As a stimulus, it is just more mis-allocation of resources.
Yes! That is a real gem!!
One of the marvels of the New Deal was Timberline Lodge on Oregon's highest mountain, Mt. Hood. It was built,...... at the timberline. Uphill from the lodge is snow, and downhill are Douglas Fir trees. It is awe inspiring.
The trouble is, at the time it was built nobody needed an edifice out in the middle of nowhere on top of a mountain.
It was soup-line time. People wished for a chicken in every pot, not a lodge in the clouds.
I will bet that Timberline Lodge was a white elephant for the first 20 years of its existence.
Quote:
Infrastructure, as with everything, should be built on an as-needed basis. Not on a stimulus-needed basis. As a stimulus, it is just more mis-allocation of resources.
We’ve been told for months on end that there has been demand destruction. When you see the official final numbers for the year you will see that in the three largest economies, the United States, Europe and Japan, there was indeed demand destruction. However, if you look to the bottom a new record was set for the total for the year. I have told you for four years that the emerging Asian nations are now the engine that lead the world economic train. The proof of that statement is in the fact that not only did they make up the loss of consumption from the three biggest economies; they took the world to a new record. I did not predict the decline in price that occurred, however the fundamentals will rule in the end. This is the statement that proves that the electronic media has misled us once again:
Saudi Arabia's historical crude oil production indicates a peak of 9.6 million barrels/day in 2005. In 2008, crude production was 9.3 mbd. In 2009 it is forecast to be 8.1 mbd followed by an increase in 2010 to 8.5 mbd. Unfortunately, after 2010 a steady decline is forecast. ... The recent KSA production falls are probably a combination of field decline and voluntary cuts. The green line in the chart below shows the annualised depletion rate of remaining oil reserves, sometimes referred to as the extraction rate. In July 2008, the depletion rate was above 5%/year implying that KSA's 9.7 million barrels/day (mbd) production in July 2008 was probably at its maximum capacity. Depletion rates should be less than 5% for good reservoir management of large fields. ... The declining production forecast scenario after 2010 is much less than the forecasts made by the International Energy Agency, US Energy Information Administration, and Cambridge Energy Research Associates. The main reason for this difference is that these three energy organizations accept Saudi Aramco's unaudited oil reserves numbers. Matt Simmons has been deeply concerned about the true reserves and production capacity of KSA for years. "Once Saudi Arabia reaches peak oil, so will the world". Matt Simmons is right as the KSA 2005 peak for crude oil production probably occurred in the same year as the peak of world crude oil production.
The chart is Saudi Arabia's production chart. It shows how production was cut for the 1973 Yom Kippur War and ramped up to counter the Iranian Crisis of 1980, and (drum roll) how much Saudi Arabia is capable of cutting. In 1984 North Slope and North Sea came on line. The chart shows Saudi Arabia cutting production by ~66% over a period of 4 years.
More than anything, this chart demonstrates that Saudi Arabia is a swing producer and really contributes a lot to some kind of world production stability and price stability.
On a chart of world oil production I would like to see a superimposed chart of prices. Then one more chart superimposed of price times production.
The inflating money supply has really done us a dis-service in that price signals have been obfuscated.
It would be fascinating to see a chart of oil prices superimposed
The average oil price should stay below $US 80/barrel for the remainder of the year as average demand is forecast to be only slightly greater than supply from July 2009 to December 2009. Furthermore, OPEC is unlikely to cut supply further which reduces the upward pressure on oil prices. Some recent evidence of increased demand is shown by US crude oil stocks dropping from a recent peak of 26.2 days at the end of April down to 25.5 days in early May. However, oil prices could exceed $100 in late 2010 as world liquids production drops further. High volatility of future oil prices is also expected due partly to delays in investment causing future oil capacity additions to decline sharply to 2012.
Brazil's Santos Basin Oil Prospects Lose A Little Luster
By Jeff Fick, Of DOW JONES NEWSWIRES
RIO DE JANEIRO -(Dow Jones)- Brazil's fast-track to oil powerhouse hit another speed bump Monday, with the second high-profile dry well in as many months in the country's most promising crude patch, contrasting starkly with official claims of "zero risk" for the new oil frontier.
BG Group PLC (BG.LN) said preliminary tests at the Corcovado-2 prospect failed to confirm the presence of hydrocarbons, despite signs of natural gas. That followed July's announcement by Exxon Mobil Corp. (XOM) and Hess Corp. (HES) of a dry well at the Guarani prospect.
Comment: These dry holes are deep! Like 21,000' deep. I thought deep wells produced gas and shallow wells produced oil....
The article goes on to discuss how Brazilian legislation aims to shift development costs to Petrobras.
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