The Trouble With Money

DriftingByTheStorm

The Trouble With Money

Very interesting article.

inlet13

Good article. Keep postin' em.

usamamasan1

Money is not important until you run out of it. As for the article, I suggest you turn some money into a bug out bag, guns, ammo, food, seeds, water...
For starters. Just as an insurance policy.

Woot

DriftingByTheStorm

inlet13 wrote:

Good article. Keep postin' em.

lol.
unfortunately i don't find that many "good" articles to post.
but thanks.
i gotta give credit to TurdFerguson for that one. TFMetalsReport.com ...
he gets a LOT of shit shoved in his face, and if its a good read,
he posts it for everyone.
Of all the gold\metals blogs, i think Turd's is the most interesting,
but then again, i'm a firm adherent of technical analysis as i believe in the short term it has more of an affect on price than fundamentals. If fundamdentals had more relevance in the short term, gold would not be under $2000\oz.

Jeanwah

Good article and I agree with the author. Natural resources drive capitalism and once those natural resources are gone, a world shift will happen. I've been thinking this for years, and the article pretty much reiterates that. Anyone preoccupied with money and getting rich should wake up, assess their consumption, read articles like this and realize there certainly is an end to capitalism as we know it. Trends can't continue spiking when the natural resources aren't endless. I liked the last part of the article:

Times of great upheaval offer a gift -- the chance to really sit down and rethink things. Certain fundamental questions can arise, such as Do I have the right job? and What should my kids study in college? and Should we really have increased total derivatives by $100 trillion after the financial crisis erupted in 2008?

When faced with the sort of predicament we currently find ourselves in, even more existential questions might dominate our thinking, such as Is there more to life than working hard, buying stuff, taking on debt, and getting older? or even What's the meaning of life? The primary narrative telling us that we are supposed to work hard, consume harder, and keep ourselves centered on the treadmill that we seem to have been born upon is beginning to unravel.

It's a mark of maturity to use a moment of crisis as an opportunity to engage in introspection and as a springboard for personal (or societal) growth and development. Unfortunately, there are virtually no signs that either our dominant culture or our leadership is that mature.

So our opportunity here is to really question ourselves and our actions, hold them up to the bright light of day, and decide what needs to change, what we should keep, and what new things we might start doing.

inlet13

Jeanwah wrote:

Good article and I agree with the author. Natural resources drive capitalism and once those natural resources are gone, a world shift will happen. I've been thinking this for years, and the article pretty much reiterates that. Anyone preoccupied with money and getting rich should wake up, assess their consumption, read articles like this and realize there certainly is an end to capitalism as we know it. Trends can't continue spiking when the natural resources aren't endless. I liked the last part of the article:

Times of great upheaval offer a gift -- the chance to really sit down and rethink things. Certain fundamental questions can arise, such as Do I have the right job? and What should my kids study in college? and Should we really have increased total derivatives by $100 trillion after the financial crisis erupted in 2008?

When faced with the sort of predicament we currently find ourselves in, even more existential questions might dominate our thinking, such as Is there more to life than working hard, buying stuff, taking on debt, and getting older? or even What's the meaning of life? The primary narrative telling us that we are supposed to work hard, consume harder, and keep ourselves centered on the treadmill that we seem to have been born upon is beginning to unravel.

It's a mark of maturity to use a moment of crisis as an opportunity to engage in introspection and as a springboard for personal (or societal) growth and development. Unfortunately, there are virtually no signs that either our dominant culture or our leadership is that mature.

So our opportunity here is to really question ourselves and our actions, hold them up to the bright light of day, and decide what needs to change, what we should keep, and what new things we might start doing.

Sorry to butt in, as I stated, I also enjoyed the article...

...but on the oil front, interestingly, I kinda disagree. Let me explain... I do believe natural resources are without a doubt scarce. And he's probably right that they are more scarce - now - that emerging economies (China, India) are gaining steam (both literally and figuratively). In other words, total demand for oil has increased dramatically. But, has supply decreased? Not sure on that one, I'd argue probably not (but, don't have the data on hand to be sure, I would think if it's decreased it hasn't decreased much). Also, he talks about "quality".. has the quality of oil really gotten worse? Not sure on that either. Personally, I don't really think so. But, maybe I'm misunderstanding him.

Anyway, for anyone who extends this scarcity to fear absent oil, I disagree that that fear is warranted. In fact, I think there may be more oil produced now then there ever has been (in other words, supply is probably near record high, if not at record high). Oil is created from the earth. There's not a fixed supply. It's constantly being renewed, albeit at a snail's pace. Like all resources, it is scarce, but there's loads of undiscovered oil. The problem is extraction. And technology is finding ways around that. For example, shale drilling may not have existed 20 or so years ago.

Long story short - when people use fear tactics regarding scarcity of natural resources, they are typically wrong when it's played out. Oil running out has been predicted for decades, even centuries... and has been wrong over and over. They are typically wrong because they discount "technology" and what it can do. We have no idea what technology will be able to do 20-50 years from now with regards to energy. We also have no real idea how much oil is in the ground. Look up Thomas Malthus... he argued similar stuff regarding food and population growth, and how population increases would result in starvation 100s of years ago, so population would go right back to where it was... and was wrong. Oil will be in the ground 10 years from now, it will be in the ground 20 years from now and it will be in the ground 50 years from now... no question about it. Will there be shortages at times because the technology isn't quite there or other reasons? Absolutely. But, it will be down there waiting.

Jeanwah

You're fixated on the wrong part of the equation Inlet.

Start thinking big picture. Look at the graphs in the article and it's projected direction. Think about the increasing population issues (just getting more and more crowded). More people to rely on the same old fossil fuels. Have you not the capability of thinking forward here? This is not about oil or how much we have left (and if you think it's really renewing it's own supply - enough to make a difference - you really are kidding yourself), it's about the projected future and getting away from being obsessed with money and consumption. Did you not read the same article I did in the original post? Or did you glaze over only the parts you're interested in? Read the last part again, the part I quoted above.

brianlux

Thanks for posting this! Excellent article.

Here's something interesting. Look at this section:

"It is this last part, the oil story, which has almost entirely eluded the intellectual grasp of our monetary and fiscal masters. I don't blame them, as mastery of the physical sciences is not a requirement of any classical economics departments in any of the universities that churn out our PhD economists.

This is very strange, when you think about it, because economics is entirely rooted in the process of extracting and converting natural wealth into material wealth. Without the primary inputs of the earth, there would be NO secondary or tertiary wealth for us to divvy up (via a money-driven rationing process) or develop exotic derivative products around. Economics should be the study of energy and resource flows as well as money."

James Howard Kunstler made this same point in his book The Long Emergency in 2005. Here we are 7 years later and at last someone else (besides Richard Heinberg and a few others) are starting to talk about it.

inlet13

Jeanwah wrote:

You're fixated on the wrong part of the equation Inlet. .

How so?

Jeanwah wrote:

Start thinking big picture. Look at the graphs in the article and it's projected direction. .

I am thinking big picture, thank you.

I know the graphs in the article, and I get the projected direction all too well. There are many things within the article I agreed with. I enjoyed it.

Jeanwah wrote:

Think about the increasing population issues (just getting more and more crowded). .

First, roughly 95% of the US is uninhabited. Second, I disagree with those obsessively concerned with population growth. They tend to be naive - and have been proven so in history. The point I am making is resources aren't necessarily fixed, but even if they were, extraction or how technology impacts the use of the resources matters.

Jeanwah wrote:

More people to rely on the same old fossil fuels. Have you not the capability of thinking forward here? .

I have the ability to think forward, but thanks for the third or forth condescending remark in this response. I understand more people rely on fossil fuels. In fact, I spelled that out in my response to you. Demand is up because emerging economies are "emerging". Do we not want them to emerge?

Jeanwah wrote:

This is not about oil or how much we have left (and if you think it's really renewing it's own supply - enough to make a difference - you really are kidding yourself), it's about the projected future and getting away from being obsessed with money and consumption. .

Well, I know "the article" is not all about that. I took what "you" said as being more about oil, etc.

Jeanwah wrote:

Did you not read the same article I did in the original post? Or did you glaze over only the parts you're interested in? Read the last part again, the part I quoted above.

Yes, I read the article. I was primarily responding to your interpretation of it (for example when you said "once natural resources are gone" , hence why I quoted you. I basically said.... "they won't be gone".

As for the portion of the article you quoted in your response ... I pretty much agree with that. It was your words, in your post, and small portions of the article itself on oil, that I had a bit of disagreement with.

inlet13

brianlux wrote:

Thanks for posting this! Excellent article.

Here's something interesting. Look at this section:

"It is this last part, the oil story, which has almost entirely eluded the intellectual grasp of our monetary and fiscal masters. I don't blame them, as mastery of the physical sciences is not a requirement of any classical economics departments in any of the universities that churn out our PhD economists.

This is very strange, when you think about it, because economics is entirely rooted in the process of extracting and converting natural wealth into material wealth. Without the primary inputs of the earth, there would be NO secondary or tertiary wealth for us to divvy up (via a money-driven rationing process) or develop exotic derivative products around. Economics should be the study of energy and resource flows as well as money."

James Howard Kunstler made this same point in his book The Long Emergency in 2005. Here we are 7 years later and at last someone else (besides Richard Heinberg and a few others) are starting to talk about it.

Couple things: First, I don't think PhD economists are churned out. ha ha. There's not that many of them.

Second, economics does study energy and resource flows. One of my friends wrote his dissertation on oil, for example. Economics is the study of scarcity. So, of course, that includes resources. This was one of the issues I had with the article - he's just wrong about that.

DriftingByTheStorm

Inlet13:

I too have been very skeptical of "peak oil" but pretty much ALL the charts show that oil production HAS infact PEAKED. A lot of local\national charts actually show production declines. Either you have to believe there is a conspiracy to suppress production (it is true that EPA regulations have a large portion of US production facilities currently going offline for being out of date) or you are forced to reconcile that production has started to flatten out.

IMHO, the only reason oil prices are not MUCH higher right now is because the global economy itself has flattened and turned down since 2008. Hence, oil demand is essentially suppressed.

As far as quality of oil goes, I believe he is talking about new-online wells are producing stuff like shale-oil which is of lower grade. Also not related to quality, but the deeper we have to drill, the more energy is actually used per unit of energy recovered.

Look at these!
Some global, lots of local\national ... ALL down or at least flat:











DIRECTLY TO THE AUTHORS POINT (LOSING CORRELATION GDP-to-OIL):






HERE IS A HOOT AN A HOLLAR FROM THE COMBINED EYE-In-TRIANGLE FORCES OF BP \ CITI:
note that though the REAL trends are FLAT TO DOWN, BP\CITI ***PREDICTS*** UP TRENDS EVERYWHERE???


A DAMNING SIGN HERE, Even at HIGHEST PRICES EVER, OPEC ***CAN NOT*** RAISE PRODUCTION!!!


Okay, i think that's enough for one day.

inlet13

DriftingByTheStorm wrote:

Inlet13:

I too have been very skeptical of "peak oil" but pretty much ALL the charts show that oil production HAS infact PEAKED. A lot of local\national charts actually show production declines. Either you have to believe there is a conspiracy to suppress production (it is true that EPA regulations have a large portion of US production facilities currently going offline for being out of date) or you are forced to reconcile that production has started to flatten out.

Couple things - Please acknowledge the first couple:

1) There's a distinction between peak oil and "running out of oil".

2) Oil production is often a function of the price of oil, so it's often the case that they won't drill until the price increases beyond a particular point. This is particularly true with shale drilling.

3) Oil production is not equivalent to the supply of oil. Lots of elements impact production... regulation is a big one.

4) Further, demand is a function of the price. As prices increase, quantity demanded falls back. Eventually supply and production will respond. (On this note - recent price rises, in my opinion, are a function of emerging market demand and global central bank printing)

5) The Global Recession isn't really highlighted in any of those charts. Out of the ridiculous amount of charts, there were about three that were most relevant. For example, the World Oil Production - that one, would certainly be relevant... if it were actually filled in. Why'd they stop at 2007? Why'd they start at 2002? On the US production chart - everyone knows that's a function of regulation - so that completely explains that one. On World Oil and GDP - There's been a number of situations where there's been decoupling in this chart. Further, the world recession is not evident here because, once again, the data is cut off.

On net, there's a ton of variables at play here. Recessions, emerging markets, central banks, regulations, discovery, spills, etc. all impact oil production. Personally, I don't buy the undertones to the Peak Oil concept, which (admittedly hints at running out of oil, but does so in a clever manner where they can never be wrong... peaks come and go in trend lines). But, regardless, it's fundamentally not the same as saying we're running out due to the forementioned. Lack of technology could provide support for peaks in oil production and falls, when the reality is history will look back on that portion of time as being prior to the advent of a new technology. Or in other cases, it could be looked back upon as a recessionary period, so production slowed. That sort of thing. Also, who knows if we would really need to "peak" oil production again given new efficiencies. But, would we run out? I say no. I do think there are and will certainly be situations in which oil extraction is not keeping pace with what should be "supplied". The reason is: the two are not the same. To me, the supply of oil is underneath the ground. In conclusion, despite the potential for oil supplied on the market to be low from time to time, I do not believe that oil will ever run out. In fact, I'm certain oil will never run out. Like I said earlier, there will always be oil below the ground.

DriftingByTheStorm

inlet13 wrote:

Couple things - Please acknowledge the first couple:

sure thing, boss.

inlet13 wrote:

1) There's a distinction between peak oil and "running out of oil".

Sure. But in a world based on GROWTH, running out of oil GROWTH is "akin" to running out of oil. What happens when we run out of economic growth? Also economic growth being tied almost intrinsically to oil demand, see here, you can bank on
a. oil price spiking high after prolonged flattened production
b. "problems" arising between countries, since flattening-declining production = a fight over who gets that oil so they can continue to grow

inlet13 wrote:

[2) Oil production is often a function of the price of oil, so it's often the case that they won't drill until the price increases beyond a particular point. This is particularly true with shale drilling.

Sure, but look at the last chart i posted, the OPEC one. You can actually SEE your point. Sharp OPEC production decline to match sharp price decline. Production increases to follow price rise. But LOOK AT CURRENT. Highest prices EVER RECORDED and yet production has stalled flat. ???????????????

inlet13 wrote:

3) Oil production is not equivalent to the supply of oil. Lots of elements impact production... regulation is a big one.

Absolutely, but there is no GLOBAL regulation (yet) and see the above point, even the biggest motivator of all (sky high price) can't seemingly lift production further.

inlet13 wrote:

4) Further, demand is a function of the price. As prices increase, quantity demanded falls back. Eventually supply and production will respond. (On this note - recent price rises, in my opinion, are a function of emerging market demand and global central bank printing)

sure. but at this point we start entering fairly abstract economic theory. Especially since "oil price" is affected by quantity and velocity of money themselves. This is something i have been arguing over several commodities with a literal-genius friend of mine. He keeps saying metals are in a bubble & Russia is "propping up" the price of oil. I keep telling him NOTHING is "overpriced" if you think MONEY ITSELF is "overpriced". In other words, your assertion is true, but it is hard to even peg what the actual "price" of oil IS, given that the quantity of money keeps increasing like a logarithmic function. I know you are thinking this isn't really relevant to your "simple" assertion here (which is a true one) but look at it like this. If the quantity of money keeps increasing, yet the velocity of money is slowing to (at least partially) off set inflation ... then the players CLOSEST TO THAT MONEY (large international banks, oil companies, etc) are at a serious advantage. What i'm saying is, the price of oil may have increased, but the quantity of money has increased MORE, and the players in the oil game are VERY CLOSE to that money, and therefore consider that price increase offset by their ability to access that "parked" pool of money that is referenced in the OP article. This would tend to somewhat negate the "high price suppresses demand" functionality you are implying (but this is all so abstract\fuzzy\difficult to prove as to nearly be irrelevant)

inlet13 wrote:

5) The Global Recession isn't really highlighted in any of those charts. Out of the ridiculous amount of charts, there were about three that were most relevant. For example, the World Oil Production - that one, would certainly be relevant... if it were actually filled in. Why'd they stop at 2007? Why'd they start at 2002? On the US production chart - everyone knows that's a function of regulation - so that completely explains that one. On World Oil and GDP - There's been a number of situations where there's been decoupling in this chart. Further, the world recession is not evident here because, once again, the data is cut off.

Well i agree with you there. Wish i could have found more 2011\2012 charts, but they are few and far between. Not much else to comment on here, cuz we don't have the data readily available.
Here is a 2012current chart showing demand is still plenty high, though. And here is one showing my previous point that Oil Price shown as a function of Money Supply makes it apparent that rising prices are better thought of as "side-effect" of dollar devaluation, and not as some "real" economic phenomenon.

Here, I'LL GIVE YOU THIS, i think this is actually to YOUR POINT
somewhat current global oil to gdp shows GDP tapered along with production. Sort of to your point, yes?

inlet13 wrote:

On net,

Only an economist would say "on net"

inlet13 wrote:

there's a ton of variables at play here. Recessions, emerging markets, central banks, regulations, discovery, spills, etc. all impact oil production. Personally, I don't buy the undertones to the Peak Oil concept, which (admittedly hints at running out of oil, but does so in a clever manner where they can never be wrong... peaks come and go in trend lines). But, regardless, it's fundamentally not the same as saying we're running out due to the forementioned. Lack of technology could provide support for peaks in oil production and falls, when the reality is history will look back on that portion of time as being prior to the advent of a new technology. Or in other cases, it could be looked back upon as a recessionary period, so production slowed. That sort of thing. I do think there are and will certainly be situations in which oil extraction is not keeping pace with what should be "supplied". The reason is: the two are not the same. To me, the supply of oil is underneath the ground. In conclusion, despite the potential for oil supplied on the market to be low from time to time, I do not believe that oil will ever run out. In fact, I'm certain oil will never run out. Like I said earlier, there will always be oil below the ground.

I mean, i agree with your "tons of variables" portion of this. The rest seems to be your own personal speculation as to the availability of oil and the inability to scientifically prove causation between supply (in the ground) and production.

Here is one follow up question though,
if you believe we will "never run out" (direct quote from you), what is your theory on oil origins?
Do you discount the dinosaur=oil paradigm? (i'll be honest, i'm half way there myself)
If so, what is your proposed understanding of oil creation? Are you a supporter of abiotic\abiogenic oil? I'll admit i'm intrigued. But if this is the case. The current paradigm and the players in it have SUCH AN INCREDIBLE vested interest in "debunking" this theory, that it seems impossible to get the "straight dirt" on whether it is pure bullshit or not.

???

brianlux

Question- doesn't it seem obvious that if we have to go to such great and expensive lengths to extract oil such a tar sand production and deep sea oil wells like Horizon that peak oil is, in fact, a reality? Peak oil denial makes sense only in that we've relied on that cheap and (once) easy to extract source of energy for a hundred years and we just don't know how to deal with getting on without it. But we'll learn. We'll have to.

DriftingByTheStorm

brianlux wrote:

Question- doesn't it seem obvious that if we have to go to such great and expensive lengths to extract oil such a tar sand production and deep sea oil wells like Horizon that peak oil is, in fact, a reality? Peak oil denial makes sense only in that we've relied on that cheap and (once) easy to extract source of energy for a hundred years and we just don't know how to deal with getting on without it. But we'll learn. We'll have to.

I don't know about "obvious" but it does seem to be indicative, yes.
Also, as much as i love charts (of anything, really) that OPEC chart seems pretty damning.
If the highest prices in history can't get OPEC to up production, it must mean SOMEthing.

inlet13

Worth reading - has loads of up-to-date charts in the pdf link attached

http://www.theregister.co.uk/2012/02/23 ... citigroup/

inlet13

Another semi-interesting, yet very bland article on why we won't ever run out of oil:

http://economics.about.com/cs/macroeconomics/a/run_out_of_oil.htm

DriftingByTheStorm

inlet13 wrote:

Worth reading - has loads of up-to-date charts in the pdf link attached

http://www.theregister.co.uk/2012/02/23 ... citigroup/

Ok i read the article and gave a cursory look at the PDF.

1. "Peak oil is dead" is a huge misnomer. All they seem to have REALLY said is that the "peak" has been DELAYED by shale-oil \ hydrolic "fracking"

North Dakota ... yeah, i noticed too in researching the graphs i posted that ND was essentially the ONE exception. So they are balls-to-the-wall "fracking" in ND.

A lot of serious minds have a lot of serious concerns about "fracking", so i don't look at that as a "great" "alternative" to conventional drilling ...

... but hey, you still have illustrated a point, which is essentially ... the world, still trying to grow, and still desperate for oil, which in CONVENTIONAL forms DOES seem to be in limited\limiting supply ... has turned to WHATEVER alternatives it can find, and at whatever financial and environmental costs ...

i fail to see how that really "proves" peak oil is "dead".

Also, i fail to take ANY research done by Citi on its face with out reading the implicit propaganda between the lines in ANYthing a company like Citi has to publish. Citi is a Rockefeller company, and you should expect their data to support the notion of "business as usual" for the globe.

But I take your point ... peak-oil has been DELAYED, just like a US Debt Default keeps getting DELAYED.
But that doesn't mean the fundamentals have changed.
If they had, we wouldn't (as Brianlux so concisely pointed out) be relying on Deep-Water Rigs, Shale Oil and Fracking to begin with. We'd just stick one more straw in the ground and start sucking. But we aren't. Why?
Yeah.

EDIT: sorry i was too dumb to realize shale & fracking are actually 1 and the same

DriftingByTheStorm

Oil Shale by the Numbers: Dirty Fuels Won’t Solve America’s Energy Crisis - NRDC

Shale gas not the answer – it’s a dangerous distraction - WWF

Dirty Fuels: Oil Shale - Sierra Club

Hey.
If you can post CitiBank Propaganda, I can post counter-propaganda. right?


Oh ... and ...

The Guardian wrote:

The EPA constructed two deep monitoring wells to sample aquifer water, which confirmed the presence of compounds from fracking and found that drinking water wells were "below established health and safety standards".

- The Guardian

inlet13

DriftingByTheStorm wrote:

sure thing, boss.

Sure. But in a world based on GROWTH, running out of oil GROWTH is "akin" to running out of oil. What happens when we run out of economic growth? Also economic growth being tied almost intrinsically to oil demand, see here, you can bank on
a. oil price spiking high after prolonged flattened production
b. "problems" arising between countries, since flattening-declining production = a fight over who gets that oil so they can continue to grow

Sure, growth is important if the subject in question is “needed”. I think there’s so many variables to even just the use of oil down the road, that we have no clue and simply speculating that oil will always be needed in this exact form for these exact means is – probably incorrect. Could "known" supply be depleted more so at certain times? Yes. But, are we sure how much oil there actual is out there? Nope.

So, further, I don’t think growth of oil is necessarily depleting. I think oil is constantly being formed. In fact, I think most people have varied theories on how oil is formed, but the typical constant is it’s being formed, but takes a long, long time to form. So, if this is true... we will never really run out.

So, from my perspective, we don’t know for certain how much oil is even there. We have no clue. Some may try to model and speculate, but they are speculations – nothing more. We just don’t know. North Dakota probably wouldn’t have been thought of as an oil producing Mecca a few years ago. Now it is. Peak Oil doesn’t explain that… in fact, it falls flat on its face when new locales like North Dakota are brought up. New findings of oil can’t happen under that thought process because - They know all. ha ha.. I think it’s hysterical to be honest. They aren’t 100% even sure how oil is created –there’s debate on that! Yet, they know how much it out there? Give me a break.

DriftingByTheStorm wrote:

Sure, but look at the last chart i posted, the OPEC one. You can actually SEE your point. Sharp OPEC production decline to match sharp price decline. Production increases to follow price rise. But LOOK AT CURRENT. Highest prices EVER RECORDED and yet production has stalled flat. ???????????????

My simple response to this – look at the axis. Double y-axis charts can fool a lot of people. Look at the red lines peak. Then look at the black line peak. After the peak both fall bad… but, then recover close to the peak again.
Regardless, there’s so many other variables that could explain this anyway. I mean the chart doesn’t exactly link in the 70s or 80s. ha ha.

DriftingByTheStorm wrote:

Absolutely, but there is no GLOBAL regulation (yet) and see the above point, even the biggest motivator of all (sky high price) can't seemingly lift production further.

What I meant is… bans on off-shore drilling. Spills changing what’s allowed… that sort of thing.

DriftingByTheStorm wrote:

sure. but at this point we start entering fairly abstract economic theory. Especially since "oil price" is affected by quantity and velocity of money themselves. This is something i have been arguing over several commodities with a literal-genius friend of mine. He keeps saying metals are in a bubble & Russia is "propping up" the price of oil. I keep telling him NOTHING is "overpriced" if you think MONEY ITSELF is "overpriced". In other words, your assertion is true, but it is hard to even peg what the actual "price" of oil IS, given that the quantity of money keeps increasing like a logarithmic function. I know you are thinking this isn't really relevant to your "simple" assertion here (which is a true one) but look at it like this. If the quantity of money keeps increasing, yet the velocity of money is slowing to (at least partially) off set inflation ... then the players CLOSEST TO THAT MONEY (large international banks, oil companies, etc) are at a serious advantage. What i'm saying is, the price of oil may have increased, but the quantity of money has increased MORE, and the players in the oil game are VERY CLOSE to that money, and therefore consider that price increase offset by their ability to access that "parked" pool of money that is referenced in the OP article. This would tend to somewhat negate the "high price suppresses demand" functionality you are implying (but this is all so abstract\fuzzy\difficult to prove as to nearly be irrelevant)

No offense, but the entire problem is one of fairly abstract economic theory. This is a scare good. It's availability is dictated by what we know. Economics = the study of scarcity. Modeling availability would be an econometric model most likely. You ended with “so abstract/fuzzy/difficult to prove”… in my opinion, the entire subject of trying to pretend we know how much oil is out there or what could covert oil in the future is as you said “difficult to prove as to nearly be irrelevant”. … in other words, this subject is kinda silly. Doomsdayers can’t predict this stuff. They can say they can, but they can’t in reality.

DriftingByTheStorm wrote:

Well i agree with you there. Wish i could have found more 2011\2012 charts, but they are few and far between. Not much else to comment on here, cuz we don't have the data readily available.
Here is a 2012current chart showing demand is still plenty high, though. And here is one showing my previous point that Oil Price shown as a function of Money Supply makes it apparent that rising prices are better thought of as "side-effect" of dollar devaluation, and not as some "real" economic phenomenon.

Here, I'LL GIVE YOU THIS, i think this is actually to YOUR POINT
somewhat current global oil to gdp shows GDP tapered along with production. Sort of to your point, yes?

My point is not just that oil market tracks the global economy, it’s part of it. My point is there’s a ton of variables and that’s a big one. So, my point is contained simply in that one aspect. It’s contained in a bunch.
Basically, my point is we won’t run out of oil. It’s a scarce good, but we won’t run out. When people provide what they say is proof we will… I chuckle a bit to myself, then I try to respond, that their point doesn’t prove their forecast. It’s a prediction… and there’s a ton of endogenous variables not included in their forecast… like technology, for example.

DriftingByTheStorm wrote:

Only an economist would say "on net"

ha ha... true.

DriftingByTheStorm wrote:

I mean, i agree with your "tons of variables" portion of this. The rest seems to be your own personal speculation as to the availability of oil and the inability to scientifically prove causation between supply (in the ground) and production.

Right. But, I don’t think it’s “personal speculation”. I think those who try to say they know for certain how much oil is out there – are personally speculating. Moreover, then trying to act like they know when it will run out… that’s just, pardon my French, asinine because they have no clue what will happen with technology and other variables.

DriftingByTheStorm wrote:

Here is one follow up question though,
if you believe we will "never run out" (direct quote from you), what is your theory on oil origins?
Do you discount the dinosaur=oil paradigm? (i'll be honest, i'm half way there myself)
If so, what is your proposed understanding of oil creation? Are you a supporter of abiotic\abiogenic oil? I'll admit i'm intrigued. But if this is the case. The current paradigm and the players in it have SUCH AN INCREDIBLE vested interest in "debunking" this theory, that it seems impossible to get the "straight dirt" on whether it is pure bullshit or not.

???

Origin of oil – I think it’s formed – probably over a long period of time. There are a variety of theories on this. I don’t know exactly how. Science isn’t certain either. But, who knows how far down into earth’s core oil goes, for example. Who knows what technology would be able to find as far as that conceptual idea goes. Do we really have any concept of all the places in which we could tap for oil? That’s kinda where I am with this. There’s tons of angles to dismiss Peak Oil. Mine is simply my own.

inlet13

DriftingByTheStorm wrote:

inlet13 wrote:

Worth reading - has loads of up-to-date charts in the pdf link attached

http://www.theregister.co.uk/2012/02/23 ... citigroup/

Ok i read the article and gave a cursory look at the PDF.

1. "Peak oil is dead" is a huge misnomer. All they seem to have REALLY said is that the "peak" has been DELAYED by shale-oil \ hydrolic "fracking"

North Dakota ... yeah, i noticed too in researching the graphs i posted that ND was essentially the ONE exception. So they are balls-to-the-wall "fracking" in ND.

A lot of serious minds have a lot of serious concerns about "fracking", so i don't look at that as a "great" "alternative" to conventional drilling ...

... but hey, you still have illustrated a point, which is essentially ... the world, still trying to grow, and still desperate for oil, which in CONVENTIONAL forms DOES seem to be in limited\limiting supply ... has turned to WHATEVER alternatives it can find, and at whatever financial and environmental costs ...

i fail to see how that really "proves" peak oil is "dead".

It proves that technology can change the game. It proves that sources of oil, that we may not conceive as sources in the present, may be discovered down the line. At the bottom of the Peak Oil Theory is the premise we're running out of oil. But, this proves new sources are being discovered. Peak Oil doesn't take into account technological advancement and it assumes we know everything. Those two aspects, with the North Dakota example in mind, pretty much shows how absurd it is to believe with no doubt that "we'll run out".

I'm certain we will never run out of oil. Like all products, we'll have shortages. Like all products, we'll have price increases. But, we won't run out.

inlet13

DriftingByTheStorm wrote:

If you can post CitiBank Propaganda...

Look at the sources of the data within the charts - it's not really Citibank. For example, is the IEA good enough?

No offense to you or anyone else here, I understand sources matter with "opinions". But, with data, ummm... probably as much. Picking and choosing data put forward by different sources, seems kinda silly.

Next thing I know... I'm going to be called a "Peak Oil denier". ha ha.

DriftingByTheStorm

inlet13 wrote:

DriftingByTheStorm wrote:

If you can post CitiBank Propaganda...

Look at the sources of the data within the charts - it's not really Citibank. For example, is the IEA good enough?

No offense to you or anyone else here, I understand sources matter with "opinions". But, with data, ummm... probably as much. Picking and choosing data put forward by different sources, seems kinda silly.

Next thing I know... I'm going to be called a "Peak Oil denier". ha ha.

PEAK OIL DENIER!

brianlux

DriftingByTheStorm wrote:

brianlux wrote:

Question- doesn't it seem obvious that if we have to go to such great and expensive lengths to extract oil such a tar sand production and deep sea oil wells like Horizon that peak oil is, in fact, a reality? Peak oil denial makes sense only in that we've relied on that cheap and (once) easy to extract source of energy for a hundred years and we just don't know how to deal with getting on without it. But we'll learn. We'll have to.

I don't know about "obvious" but it does seem to be indicative, yes.
Also, as much as i love charts (of anything, really) that OPEC chart seems pretty damning.
If the highest prices in history can't get OPEC to up production, it must mean SOMEthing.

Yes, "indicative" is a much better word here. Thanks!