One thing about all this gloom and doom:
I think it is, or at least maybe an opportunity?
Maybe, just maybe, they’ll realize that pouring oil on new roads will drive the price of oil back up and choke off any possibility of an economic recovery. The IEA report is clearly ignored but I think that it, like the law of gravity, can only be ignored for just so long.
Anyway, perhaps our new economy can be based on sustainable living and energy and it already seems that we no longer will be 25% of the population that consumes 75% of the resources.
In 2003 my family downsized. We went from 4,000 sq. feet to 1,800 sq feet. My career changed. We drive used cars, and if we can’t buy it we don’t. Bottom line, we learned that being a servant to debt and fixing plastic stuff from China didn’t bring happiness.
I hope the flight to our destination isn’t that bumpy and I hope the idiots in charge wake up and steer us to the right airport. Maybe along the way they can destroy our dollar and wipe out the insane debt they racked up over the past 30 years. One thing is certain, a stall is a stall. In flying, when that stick shaker makes you put down the USA today you know that you have to get the wings unstalled. Hopefully this economic stall will wake em up.
People’s first interpretation to cutting back seems to be that it will be a reduction in the standard of living. I’ve been arguing that it can actually be an improvement.
One of my top goals now is actually removing junk from my house and simplifying my life, so that I can save time and money to do the things I really want to.
ThinkOutOfTheBox: Thank you for your thoughtful reply. I had not seen that website before, thanks for letting me know about it.
First - this is an amazing community. Thank you again Chris and everyone who is putting so much thought and effort into making our world work in the be here now and future.
Second - a friend sent me the link to http://sharonastyk.com/ this morning. What are the chances of that - two browser windows open with the same reference? No, I’m not really asking anyone to do the math.
Third - there’s a lot to be thankful for but I’d remind anyone who can to put good health on their list. I know there’s some other old hippies on this site but I haven’t seen much discussion about ageing population issues. A new forum topic perhaps?
When we first met Chris a few years ago, and he helped us knit together a lot of the observations we were making about this civilization. Namely that this path our society/economic system is on fairly clearly unsustainable. Only the details of how it will change were/are a mystery.
We made some decisions a couple of years ago based on this probability: simplifying our lifestyle, getting out of all debt, and moving to the family farm. But its still terrifying to watch it all playing out, its like watching a slow motion train wreck! If the rest of the world suddenly dissappeared, we’d actually be ok on the farm. But what we fear, unfortunately, is our fellow citizens. Scared, cold, hungry people - who are armed, historically are not much fun to be around. But I refuse to raise my children in a paranoid armed encampment. So our best security is helping people.
If the grocery stores get empty, we can help feed a lot of other people. And we hope that in turn they will help protect us if things take a violent/chaotic turn in the United States. And I believe that the best security for all of us is not to hide behind locked doors, but to help each other out as things transition. Extend helping hands, shovels, flashlights and food to our fellow citizens.
Every problem has a gift in its hands, and if our civilization COULD somehow continue developing, consuming and speeding up at the rate we have been for the last 100 years. Can you imagine what a cesspool this planet would be in another 50-100 years? (The movie "Idiocracy" - is not a great piece of film, but it is a cute satirical look at what things might be like down the road if we could keep our civilization on the same clip its been on). Slowing down, rediscovering community, family and the world might be a pretty worthwhile result of this change.
But the change over will be hard, and possibly terrifying at points. So lets extend hands to each other, and adapt!
Couldn’t agree more…
Start a Transition town http://www.transitionculture.org/ slash http://relocalize.net/ by far your best form of ‘defense’ in a changing world, because frankly, WTSHTF, we’ll all be on our own, the government and multinationals have no idea how to cope with this crash, they’re all wallowing in the their own $%^!T
Mike
Hello Mike:
I’d go so far as to say that they are exacerbating it.
Take care
cat233
"I have my own copious notes on the CC, but have always wanted a transcript. After reading Greg’s post (#2) wondering if there is a transcript of the CC available? "
Not that I know of, I sent my friend this link on PO…
http://www.lifeaftertheoilcrash.net/
Greg
Greg,
Thank you for the link.
Cat
http://www.moneyandmarkets.com/gala-issue-biggest-sea-change-of-our-lifetime-3-28912
Very interest article about deflation… but the author has a diffent opinion on the US dollar and Gold than Chris
This article was titled "Miners becoming less energy-efficient". What it REALLY means, and something the author either does not know or does not understand, is that this is an ominous sign we are hitting the wall very quickly now, because if energy intensity in the mining sector is increasing at 3.7% pa, then resources will either become very expensive very quickly… or they will become unavailable if the deflationary trend continues.
Mike.
Article from: The Advertiser <http://www.news.com.au/adelaidenow/>
CATHY ALEXANDER
December 23, 2008 12:55pm
FRESH data shows the mining industry is becoming a worse greenhouse gas
polluter with each passing year.
Mining companies are heading in the wrong direction on climate change,
using more energy and becoming less energy-efficient.
The industry more than doubled its energy use over the 15 years to 2006.
And the amount of energy used per unit of output - called energy
intensity - has been increasing by 3.7 per cent a year.
<MORE>
Steve,
Thanks for the post. I read through the article but I’m unconvinced. If you have defaults crashing backwards through the system (which we do) then we are in a period of deflation (which I agree with) and Chris has suggested the same.
https://peakprosperity.com/blog/deflation-still-winning-day/8596 on November 11 2008 (can it really be so long ago?)
But the article you quote doesn’t consider the Fed purchasing assets using the thin air of electronic money creation (they don’t generally have to worry about physical money printing). They have limitless power to fight deflation if that is what they choose to do and they made this announcement to do so:
https://peakprosperity.com/blog/fed-cuts-rate-less-025-promises-flood-world-money/10297
During a period of deflation I would be concerned with debt defaults - we can move our money around trying to keep it safe from the musical chairs of disappearing money and hope we are wise/lucky. Personally I’d rather turn the money into something tangible. Chris has made comments about gold (amongst other things) and I prefer farmland (though that clearly isn’t an easy strategy because farmland simply isn’t money-like), but as an alternative anything that can allow us to be entrepreneurial/sustainable is an extremely good use for our funds. Basically converting money into something that can provide ongoing future benefit is the way to go - such as a small dwelling debt free, or making investments to cut energy costs through energy efficiency or renewable energy sources, or buying equipment to process/store your own food, take up gardening, raise livestock, etc.consider: http://sharonastyk.com/resources2/victory-gardens2/ If everyone just sticks their savings in gold or US dollars we can all just sit and stare at each other but we will have arrested the types of changes in the economy that we actually need to have happen (live sustainably / be entrepreneurial / encourage sustainable farming and local processing of food, provide local services to / trade with each other, etc.).
If we want a sustainable economy to form then we need to take action towards creating that new economy. Believe me, the very action of doing this will create the new sustainable economy we so desperately need. Every step you take will cause the economy to evolve in that direction you’ve chosen. [By the way, I’m taking the idea of the economy being a function of evolution under similar principles that the scientific approach to evolution in life is understood - please see the book The Origin of Wealth - Evolution, Complexity, and the Radical Remaking of Economics by Eric D. Beinhocker] Consider the evolution that the economy has experienced from the individually small, but magnified on a large scale profound, that two other readers have mentioned in the last few days:
<a 0=“href=/comment/9589#comment-9589"” rel=“nofollow”>https://peakprosperity.com/comment/9589#comment-9589 (last long comment - 7 steps)
<a 0=“href=/comment/9980#comment-9980"” rel=“nofollow”>https://peakprosperity.com/comment/9980#comment-9980 (which is on this thread above)
Here’s my take on the US dollar - view it as a train station and imagine assets being travellers choosing from a variety of destinations. As financial affairs are being rebalanced all over the world the travellers(assets) are being converted into the central train station - the world’s reserve currency - US dollars. In this case the value of the US dollar would rise as the train station would be crowded with demand. This effect might be temporary like travellers considering new destinations they might perceive to be of better value - foreign currencies, real estate, paying down debt, etc.
Eroding confidence in the US dollar from rampant money creation may precipitate an exit from the train station that might be less than orderly.
The saving grace in all of this (for now)? Since the entire world economy has been structured using the US dollar as the reserve currency there isn’t an easy/short term answer for alternative destinations for these US dollars to leave the train station.
But I wouldn’t wait and rely on easy answers. Any plan you devise takes time to implement. Don’t wait. Start planning / acting now. First mover advantage. Make the economy evolve the way you want the world to be.
All the best,
James
Hi James, thanks for you in-put. Where I stand, is that no-one, not even Chris, know for sure 100 perent what will happen in the future. What we do know is that there are major assets deflation and the fed is printing, trying to inflate out of the crisis. We do not know if the FED will be able to achieve what they trying to do. I think is best to wait for some signal in the future market (commodities) and currencies.
Its does not rally matter if you buy Gold at $700 or $1000, if Chris theory come to fruit, GOLD will be well over $2000. I rather wait to buy it higher and have a better chance of being correct. The signal in the market is that there are still major deflation… Oil, cooper, all the metals is trading at the low or near the low. If there are major deflation, I am pretty sure GOLD will not go any where quick! Remember all commodities is price is the US dollar, therefore if the dollar will have major drop, most commodities should stablize first and move up! This week soft commoodities (soy, wheat and corn) is trying to break out. This is just my take of the current crisis.
Have a safe and happy holidays season!
Steve
Good thoughts, Steve…I think the same way! I have been preparing to up my oil and gold holdings but keep seeing them fall. Better to wait for some of the signals you mention.
Cheers.
SG
I know the IEA study leans toward bullish, and I know there is a contango BUT and this is a big but but, I think, China could implode…I’m sure if the dollar tanks first that would be different…my 2 cents
Hi Davos!
Hey, I thought I read on a thread somewhere here that you had been able to downsize home stuff a bit. How did you get your spouse/family onboard?
My wife still thinks we’re all nuts.
Happy Holidays!
SG
Hello CapeSurvivor SG:
Happy Holidays. My career came to an end. It was sink or swim. In 5 years we moved 4 times, built our house (litteraly all by ourselves, did everything but foundation, sheetrock and roof shingles) sub-divided and sold off land we had purchased and my wife started her own business, which I now help with since the house is done.
It was hell, but we made it!
Take care
[quote=SteveLam]
Hi James, thanks for you in-put. Where I stand, is that no-one, not even Chris, know for sure 100 perent what will happen in the future. What we do know is that there are major assets deflation and the fed is printing, trying to inflate out of the crisis. We do not know if the FED will be able to achieve what they trying to do. [/quote]
Thanks Steve,
You’re right - not only can anyone know 100% about the future but it isn’t even possible. Referring to Nassim Taleb’s book The Black Swan if you were to take 1000 equivalent realities (exact same people, intentions, etc. in the world today) and set each of these in motion in simulation you would find that just from pure randomness there would be a wide variety of outcomes. Thus the future is a collection of infinite possibilities - of which only one will occur. The Black Swan is an excellent book for an understanding of risk and probabilities - and a scathing assault on traditional economics.
Referring again to the book The Origin of Wealth again (p. 185) - the overall economy likely emerges from three factors: people’s behaviour, institutions (Federal Reserve is our primary focus here) and factors impact the economy from outside (such as 911). Since the outside factors are Black Swans, although unknowable we can do our best to identify them so that they aren’t Black Swans anymore and Chris has woven together the effects of many of these, then our task is to focus on human behaviour and institutions. Fortunately some of these factors have predictability so we can come up with a range of probable future outcomes.
Regarding gold I’d encourage everyone to become a subsciber to get Chris’ thoughts. But there is a larger message here that we are trying to communicate to a larger audience and I’d encourage everyone here to become a subscriber to help support this initiative.
Happy holidays everyone!
James