Red Rose Petals

For some reason, this incident from my past keeps welling up from my memory. It happened at a time when my life was made up nearly all of hopes and dreams, having very little substance to maintain and care for.
Working for a delivery company, I was walking down an urban street looking for an address. My eyes were diverted by a vision of spilled blood at my feet. However, looking down, I saw that there were just several fresh red rose petals fallen on the sidewalk.
As I walked on further, I spied two men in coveralls attempting to raise a tall ladder. One was holding the feet to the ground, while the other was walking it up from the other end. Though it was an extension ladder, maybe 24 feet, it lacked a rope through the pulley to raise it properly so they had to do it the hard way.
The man from the top came in closer and closer. The to went up, 10 feet, 15 feet, 20 feet, as he approached his comrade rung by rung. At about 70 degrees, the top of the ladder began to sway from side to side. He struggled to control it. Then suddenly he realized that he could not, for the weight above him had far more leverage than he did. He ducked quickly to get out from under. The top of the ladder swung out and rested for just a second against the wires suspended along the street by telephone poles. Then it came crashing down, down, down to the sidewalk below.
Only then, the man at the feet, let go of the ladder and fell back on his back and started gasping spasmodically. Belatedly we realized what might have happened to him. The workman who had been at the head end, ran to the first townhouse door to knock frantically. His partner lay there, jerking erratically.
Remembering my goodly training from my boy scout days, I began to do what I saw I must do. The man soon stopped breathing or moving. So I put aside my customary persona and proceeded methodically to deliver mouth-to-mouth resuscitation. When I delivered two or three good lungfuls, he started hopefully to breath again heavily. His breaths came fast and deep. But each breath was shallower than the last. After five or six, he came to a rest again.
I began again. This time I went a little more slowly, deliberately. Although small on the outside, all my internal cavities have unusual capacity and strength. I could give him good, rich air. This time I delivered three or four breaths to him. Then he gasped and began panting heavily again. Again, his quick breaths faded gradually back to stillness.
Very distantly I could hear his partner panickly pleading for help on a phone.
A third time I began to deliver breath to this person seeming to fight for his life. This time I gave him three, four, five good draughts and then he began, again, on his own. His efforts were a good bit weaker this time and I was prepared when they faded away yet again. This pattern went on, and on, it seemed for a lifetime, at least for 15 minutes. Each time, it took more breaths from me to get him started. Each time, his breathing was weaker when it came. Each time, the period where he was still grew longer.
Finally I heard an ambulance pull up on the street and paramedics jump out. From behind me a man said, in a slightly bored and disgusted tone, “That’s enough.”
I pulled back and rose to my knees. From there I could see that the man had completely wet his pants. I gathered from the paramedic’s tone that he thought the situation hopeless, the man gone. For just a minute I waited to see if anyone wanted anything from me, if there was anything to do. In silence, then, I got up and padded quietly away.
For awhile I reflected on the thought that “In the boy scouts, they don’t tell you that you can do everything right, you can do everything you know how to do, and still the patient will die.” I struggled all afternoon with what I was to feel about this happening, what I was to learn, what was gained, what was lost. Basically there wasn’t any change in my routine. I found the address where my package was supposed to be delivered and dropped it off. Nothing else happened that day.

We had a pretty good rally in the markets for the last two weeks. Some people are already talking about the bottom being in. But I’m older now, and more aware of the unmistakable odor …

Cushing, OK

I count seven large tanks here with no vegetation around them,
meaning that they could have been built recently.
but that's my inexpert opinion ...

Big Ugly Chart

I received this chart from a fellow independent investor
a week ago (he asked me to post it for you all.)



My own opinion remains that we are headed for "0".

-chiz

Quandary

From time to time I have puzzled with this. The right wing in this society,
the business class, the so-called "conservatives", oppose abortion.
Why? Thinking people, intellectuals, "liberals" wonder if its
just part of their sense that they have the priviledge, the right, and the
obligation to impose their will and their point of view on others
who have less money and power than they do. But the inconsistency
has still puzzled me.
After all, its the right wing who are so enamoured of sending
our young men (and women) off to foreign lands for the purposes of
tearing down buildings and factories, maiming and raping and killing
and generally disrupting the citzenry, and obsconding with whatever
loot can be taken. In the process a certain percentage of our own
die prematurely or sustain permanent damage. Its the right wing
who create jobs for policemen, judges, and lawyers by locking
up and ruining the productivity of individuals who happen to be in too-
close proximity to a common weed which happens to have medicinal
properties far superior than the far-more-expensive prescriptions
to be obtained in system establishments at considerable cost.
What is the point?
Certainly some of them must be aware that the planet earth
is undergoing severe strain and incurring alarming damage from
the press of the sheer mass of humanity and the institutions which
maintain us. All of the basic systems which nature operates here
appear to be under siege and threaten to collapse or take major
deviation.
Certainly some of them must be aware that the majority of
women desiring abortions, if forced to bear their young,
will most likely raise their children to vote for liberals.
At least a few of them must supect that there is not
enough available oil gas or food even to sustain the current
world population and the consequences will be dire,
politically and economically.
Its funny, for a minute, to say that for them , "Human rights
begin at conception ... and end at birth." But that's no answer.
Why do they think that we need more people?

While I was writing my piece on Ponzi schemes and
capitalism, it suddenly struck me what the answer to this
quandary is. Its really quite simple, once the basic nature
of our economic system is revealed. You remember I pointed
out that capitalism can only survive when there is a reasonable
prospect for growth, for an increase in the quantity and
velocity of financial transactions.
So, obviously, they need more people. Not, of course,
because they love them or care one whit about them. They need
ever-more people so that their own lifestyle can be sustained.
Its survival.

Its not going to work anymore, folks. The game is over.
We are on to you.
Good-bye.

Electric Cars

Here's a starter on electric cars:
http://europe.theoildrum.com/node/5104

I have no concrete figures or studies on this, but a strong suspicion
based on the actions of Detroit, as much as anything:

An internal combustion engine encapsulates between 1000 and 6000
small explosions per minute. Over the years, automotive designers
have succeeded in developing designs which control and distribute
the ensuing vibration, heat, and exhaust, minimizing the damage.
Nevertheless, they have built into the consuming public the expectation
that the average automobile will only last for, maybe 6 years,
maybe 150,000 miles.

Contrast this with electric motor systems, which contain no explosions,
create little heat, and create very little vibration:
in virtually all the devices I have owned which employ electric motors,
the electric motors don't fail.
I had a band saw that I cut firewood with until one of the wheels fell off.
I have drills and sanders that last forever
unless an axle breaks or a bearing fails (and I can't find a replacement).
I have scavenged many an old washer or dryer, worn out and left on the curb for dead, for the motor, to put to some new use in my shop.

The key thing about electric cars is that they are likely to last
for decades. I am convinced that this is precisely why
Detroit has successfully suppressed their research, design and manufacture for the last 100 years,
and why they will take hold, now.
The savings to the consumer in depreciation costs will far outway
fuel costs (although the fuel, going forward, will also be cheaper.)

got coal??????

Ponzi Revisited

After the Bernie Madoff exposure, I was tasked with explaining to my Ethiopian companions what a “Ponzi scheme” is, how it begins, proceeds, and ends. One of the points I made is that Madoff began with high and honorable intentions, and then first discovered how a single number could be slightly adjusted to improve his credentials, improve his stature, improve the trust and faith and capital people gave him, without being observed by anyone, and then his road proceeded down that direction to its final terminus. Then I trotted out the familiar graph of a triangle operation which works just fine until it reaches the point where it is no longer possible to continue to add a larger and larger base at the bottom, at which point everything goes to hell.


The other day I came across this essay and it brought me to review an old discussion from a new vantage point:
http://www.theoildrum.com/node/5121
Roger K makes the point that “Many people have claimed (I am one of them) that our current economic system requires constant growth for healthy functioning”. This statement, juxtaposed with the exposition above, brought me to realize afresh how much trouble our economic system is in and how deep are the root causes.

People who know me are aware that I have been an extremely successful investor, concentrating on energy for the last decade, and widely read in fundamentals. In brief, I have been telling and writing for anyone who would listen that the concept of “peak oil” is based on production levels, not total worldwide available reserves, and that it is not a theory but a fact, the peak having been achieved in May of 2005, and the current “financial crisis” by damping down demand and restricting access to capital, has accelerated the decline.
The ethanol debacle and the simple information that nitrogen fertilizer is manufactured from natural gas, led me to examine the worldwide food production and supply as well. The numbers suggest that natural gas production has not yet peaked but that a peak is inevitable and probably lies within a small number of years. Less gas definitely means, less food. And less food, quite logically, leads one to the inescapable conclusion of less people.

I considered the economic history of the USA, bastion of capitalism. Recent among civilizations, a few rogues, thieves and misfits, determined either to make profit or to force their world to adapt to their theocratic fantasies, settled in a land which embedded the best farmland and forestry in the world, as well as the most coal and iron ore and oil and mineral resources. They quickly set about the business of exterminating the sparse people who called the land home, and importing slave labor to do their dirty work. Within several generations, these people became rich and powerful in the world, and they attributed their wealth to their religion, their political system, their economic philosophy, and their own general superiority. Certainly one key to their success has been the constant influx of new immigrants, who determined that climbing on to the bottom of this pyramid was to be preferred over staying where they originated.

I considered technology in my lifetime. I went to school during the “race to the moon”.
At first focused on the fiction that mankind could spread to other planets and star systems throughout the galaxy, the unintended side effects were unpredicted advances in calculator machines and methods, among other inventions. My career spanned the advent and growth of the Internet, a technology which first threatened to bring common language and democracy to the entire planet, much as the Tower of Babel had in its day. I have since watched as the corporate world attempts to divide and conquer are relentlessly bringing it to its knees.

One of the fundamental tenets which make capitalism function is the value of providing one’s assets for another person or corporation to use, in the anticipation that both parties will benefit financially. Obviously there are trillions of such transactions, each with its particular circumstances. But the aggregate of all of them, works. Clearly, it can only work when there is long-term growth. Again, over 400 years the population has steadily increased, the infrastructure has steadily increased, the assets and the consumption have steadily increased. The culture has a built-in expectation of economic growth. You have to believe that your own income is going to increase in order to justify most loans.

However, there is a growing awareness, at least among the better educated of the populace, that this growth cannot continue forever, that there are limits, and that some of those limits may be at hand. The limitation of availability of oil is a huge consideration. The use of oil for energy has increased man’s efficiency by a factor of some 34,000 from the days where anything he accomplished was done by his own sweat. If oil production can no longer grow that puts a tremendous governor on the economic machine. Another limit is the amount of food that the planet can produce. There are not a lot more rivers to dam or forests to clear and plow. There are constant increasing threats to modern agriculture as the diversity of crops has diminished, from diseases and parasites adapting genetic resistance to our best methods of controlling them. Maybe the most critical limit to future growth is the availability of potable water. Because of the permanent nature of our residences, transportation systems and workplaces, the threat of any sort of major climate change also could also cause economic contraction.

In short, the society at large is coming to the overall conclusion that general growth has gone just about as far as it can go.

And what does that do to capitalism as an economic system? If a lot of people begin to believe that hoarding food, water, oil, and other basic resources is more likely to be to their advantage than loaning or investing resources in the mechanics of creating more, doesn’t that become a self-fulfilling prophesy? If people stop investing, then what?

For this reason I believe that capitalism as an economic system has come to its final end. Much as Wiley Coyote, chasing Road Runner, would still spin his legs after he ran off the cliff, our day-to-day operations continue. But you know, one of these days, we are destined to look down. And its still an awfully long drop.