the day after - part three

The United States annual 700 hundred billion dollar Military budget has long been a cipher and a certainty. The U.S. manages to fund a space program on 2 percent of that. The dollars are real, and they are glazed over North America proper as evenly as possible to ensure every voter, in every district, has a stake in the continuation of this boon.

It is likely that in the coming years this budget will be cut back out of bankrupt necessity. One wonders if there is time to shift the focus of national defense in the short term. It is now apparent, as highlighted by both Obama and McCain, that energy independence is a national security issue.

Consider a shift in manufacturing from missiles to wind turbines. At roughly 1000 dollars per Kilowatt, what would we get for 100 billion of national security investment in wind? Approximately one hundred million kilowatt hours of electricity. This is just napkin math, change the numbers and change the outcome. Certainly, these same dollars could be directed to build ten nuclear plants. But if this national security wind manufacturing was sustained year by year, at the level noted above, eventually the entire 2.3 trillion kilowatts of North American electricity production could be replaced – in this case over twenty years.

Had we started 8 years ago, we’d be half way to clean energy and energy independence.

This is really a thought experiment, but it is a major concern that as liquidity has been sucked out of the market, the possibility for new ideas and new directions is heavily constrained, making it vastly easier to “predict” the future. Less scenarios to account for. The scenario being run – where taxpayers bail out banks – is one of real cash vanishing from the economy.

The return (it is hoped) are dribbles of credit. Well, hooray. Peak oil is unfolding, folks, and the U.S. (one of many countries now with a similar plan) just spent 700 billion + 250 billion so that banks can continue to extend credit.

Current United States investment in alternative energy is the period at the end of this sentence, and investment in the military is everything else on this page.

So Americans, call your senator, congress critter, and presidential candidate of choice and let them know that energy independence is a national security issue and we have the technology.

the day after - part two

Surveying the wreckage, with martini in hand, or better yet, a slice of apple pie, one might be inclined to flip out.

A fair response, but it is time to change ones mind. Turn it, twist it, and then re-program. This might involve hitting a television in the face with a sledgehammer. Many of the constrained energy scenarios – and responses to same – are the identical response needed for a depression. This upcoming depression will segue directly into a constrained energy environment.

The crisis demands an industry to engage in on a national scale, a hoover dam, something to turn the focus of the age from money to people. More on this – much more – tomorrow.

For now, food for thought.

Where will one get your consumables, if there is limited supply at the grocery store at the grocery store, or the bread line?
Grow as much of your own as possible, and chicken eggs are an excellent source of protein.

Where will one live if jobless?
Planning now might keep you out of a tent. Pooling resources with other humans is always a good bet.

If the whole world is going bankrupt, why not me?
Take this idea with a grain of salt: The common refrain one sees on the media to “pay down your credit card” is absolutely correct in normal times. These are not normal times and paying banks with interest might not be the best use of your cash RIGHT NOW. Let's watch how the emergency develops.

Neighbors never moved in, the pool next door is fetid – can one grow food over there?
Move out of Arizona and California exurbia while it is still possible. Get to water.

the day after - part one

The financial conflagration gathers strength – touched off by the mortgage crisis as a dynamite primer, but exploding on account of unsupportable shady investment practices. Lacking steady dribbles of cash to cover the heavily leveraged, endless trillions of speculative credit/money, the game ends. Various billion dollar bailouts are a drop in the bucket – not even addressing mortgages that have already failed. Much less all the tea in Iceland.

The big tent of speculation is in greater part hot air, and removing a few supports of real cash here and there has started the whole bit of tatty cloth fluttering towards the ground. The carnival is defunct.

This crisis follows fast on the heels of record high oil prices, which have then been hammered back down by the economic conditions. This has long been predicted by peak oil analysts, although usually as a progression of high oil prices directly causing the economic downturn. While oil prices are a contributor to the recessionary economy, the financial crisis is not directly rooted in oil prices, but the effect will be the same.

Tom Whipple and Steve Andrews comment:
In recent months US and world oil consumption have been dropping due to high prices and the worsening economic funk. Whereas in recent years worldwide demand for oil increased by about 1.5 million b/d every year, that number will shrink to a few hundred thousand b/d annual increase for 2008. If the economic situation gets much worse, demand for oil probably will go into actual decline.
If, as seems likely, the omnibus financial bailout does little good and the world goes into a prolonged recession, then we probably are on the peak/plateau of world oil production right now. Demand will drop, production will be slowed, and new multi-billion dollar oil projects that are not already well underway will be delayed or cancelled due to lack of demand or capital to pay for them.

The stock market had been resonating on the border of non linear for a while now, swinging back and forth with a marked lack of rhythm or reason, preparing for the now apparent state shift. But the market is just a sick canary, and there is no reason to expect the financial system will be stitched back together barring perhaps one possible "fix" – global, concerted inflation to spread the capital shortfall around and get things moving for the big boys. Of course, this "fix" would turn the middle class standard of living into a Zimbabwean delight.

Tomorrow, how to change your life.