A scary strategic problem - no oil
- Thread starter redleafjumper
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daftandbarmy
Army.ca Dinosaur
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"The big losers are countries that not only have to import oil but also are heavily industrialized relative to their economy." Hmmmm.... who would that be I wonder?
THE GEOPOLITICS OF $130 OIL
By George Friedman
Oil prices have risen dramatically over the past year. When they passed $100 a barrel, they hit new heights, expressed in dollars adjusted for inflation. As they passed $120 a barrel, they clearly began to have global impact. Recently, we have seen startling rises in the price of food, particularly grains. Apart from higher prices, there have been disruptions in the availability of food as governments limit food exports and as hoarding increases in anticipation of even higher prices.
Oil and food differ from other commodities in that they are indispensable for the functioning of society. Food obviously is the more immediately essential. Food shortages can trigger social and political instability with startling swiftness. It does not take long to starve to death. Oil has a less-immediate -- but perhaps broader -- impact. Everything, including growing and marketing food, depends on energy; and oil is the world's primary source of energy, particularly in transportation. Oil and grains -- where the shortages hit hardest -- are not merely strategic commodities. They are geopolitical commodities. All nations require them, and a shift in the price or availability of either triggers shifts in relationships within and among nations.
It is not altogether clear to us why oil and grains have behaved as they have. The question for us is what impact this generalized rise in commodity prices -- particularly energy and food -- will have on the international system. We understand that it is possible that the price of both will plunge. There is certainly a speculative element in both. Nevertheless, based on the realities of supply conditions, we do not expect the price of either to fall to levels that existed in 2003. We will proceed in this analysis on the assumption that these prices will fluctuate, but that they will remain dramatically higher than prices were from the 1980s to the mid-2000s.
If that assumption is true and we continue to see elevated commodity prices, perhaps rising substantially higher than they are now, then it seems to us that we have entered a new geopolitical era. Since the end of World War II, we have lived in three geopolitical regimes, broadly understood:
· The Cold War between the United States and the Soviet Union, in which the focus was on the military balance between those two countries, particularly on the nuclear balance. During this period, all countries, in some way or another, defined their behavior in terms of the U.S.-Soviet competition.
· The period from the fall of the Berlin Wall until 9/11, when the primary focus of the world was on economic development. This was the period in which former communist countries redefined themselves, East and Southeast Asian economies surged and collapsed, and China grew dramatically. It was a period in which politico-military power was secondary and economic power primary.
· The period from 9/11 until today that has been defined in terms of the increasing complexity of the U.S.-jihadist war -- a reality that supplanted the second phase and redefined the international system dramatically.
With the U.S.-jihadist war in either a stalemate or a long-term evolution, its impact on the international system is diminishing. First, it has lost its dynamism. The conflict is no longer drawing other countries into it. Second, it is becoming an endemic reality rather than an urgent crisis. The international system has accommodated itself to the conflict, and its claims on that system are lessening.
The surge in commodity prices -- particularly oil -- has superseded the U.S.-jihadist war, much as the war superseded the period in which economic issues dominated the global system. This does not mean that the U.S.-jihadist war will not continue to rage, any more than 9/11 abolished economic issues. Rather, it means that a new dynamic has inserted itself into the international system and is in the process of transforming it.
It is a cliche that money and power are linked. It is nevertheless true. Economic power creates political and military power, just as political and military power can create economic power. The rise in the price of oil is triggering shifts in economic power that are in turn creating changes in the international order. This was not apparent until now because of three reasons. First, oil prices had not risen to the level where they had geopolitical impact. The system was ignoring higher prices. Second, they had not been joined in crisis condition by grain prices. Third, the permanence of higher prices had not been clear. When $70-a-barrel oil seemed impermanent, and likely to fall below $50, oil was viewed very differently than it was at $130, where a decline to $100 would be dramatic and a fall to $70 beyond the calculation of most. As oil passed $120 a barrel, the international system, in our view, started to reshape itself in what will be a long-term process.
Obviously, the winners in this game are those who export oil, and the losers are those who import it. The victory is not only economic but political as well. The ability to control where exports go and where they don't go transforms into political power. The ability to export in a seller's market not only increases wealth but also increases the ability to coerce, if that is desired.
The game is somewhat more complex than this. The real winners are countries that can export and generate cash in excess of what they need domestically. So countries such as Venezuela, Indonesia and Nigeria might benefit from higher prices, but they absorb all the wealth that is transferred to them. Countries such as Saudi Arabia do not need to use so much of their wealth for domestic needs. They control huge and increasing pools of cash that they can use for everything from achieving domestic political stability to influencing regional governments and the global economic system. Indeed, the entire Arabian Peninsula is in this position.
The big losers are countries that not only have to import oil but also are heavily industrialized relative to their economy. Countries in which service makes up a larger sector than manufacturing obviously use less oil for critical economic functions than do countries that are heavily manufacturing-oriented. Certainly, consumers in countries such as the United States are hurt by rising prices. And these countries' economies might slow. But higher oil prices simply do not have the same impact that they do on countries that both are primarily manufacturing-oriented and have a consumer base driving cars.
East Asia has been most affected by the combination of sustained high oil prices and disruptions in the food supply. Japan, which imports all of its oil and remains heavily industrialized (along with South Korea), is obviously affected. But the most immediately affected is China, where shortages of diesel fuel have been reported. China's miracle -- rapid industrialization -- has now met its Achilles' heel: high energy prices.
China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.
Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China's reserves could shrink with remarkable speed, leaving their financial system -- already overloaded with nonperforming loans -- vulnerable. If they take the cap off, they face potential domestic unrest.
The Chinese dilemma is present throughout Asia. But just as Asia is the big loser because of long-term high oil prices coupled with food disruptions, Russia is the big winner. Russia is an exporter of natural gas and oil. It also could be a massive exporter of grains if prices were attractive enough and if it had the infrastructure (crop failures in Russia are a thing of the past). Russia has been very careful, under Vladimir Putin, not to assume that energy prices will remain high and has taken advantage of high prices to accumulate substantial foreign currency reserves. That puts them in a doubly-strong position. Economically, they are becoming major players in global acquisitions. Politically, countries that have become dependent on Russian energy exports -- and this includes a good part of Europe -- are vulnerable, precisely because the Russians are in a surplus-cash position. They could tweak energy availability, hurting the Europeans badly, if they chose. They will not need to. The Europeans, aware of what could happen, will tread lightly in order to ensure that it doesn't happen.
As we have already said, the biggest winners are the countries of the Arabian Peninsula. Although somewhat strained, these countries never really suffered during the period of low oil prices. They have now more than rebalanced their financial system and are making the most of it. This is a time when they absolutely do not want anything disrupting the flow of oil from their region. Closing the Strait of Hormuz, for example, would be disastrous to them. We therefore see the Saudis, in particular, taking steps to stabilize the region. This includes supporting Israeli-Syrian peace talks, using influence with Sunnis in Iraq to confront al Qaeda, making certain that Shiites in Saudi Arabia profit from the boom. (Other Gulf countries are doing the same with their Shiites. This is designed to remove one of Iran's levers in the region: a rising of Shiites in the Arabian Peninsula.) In addition, the Saudis are using their economic power to re-establish the relationship they had with the United States before 9/11. With the financial institutions in the United States in disarray, the Arabian Peninsula can be very helpful.
China is in an increasingly insular and defensive position. The tension is palpable, particularly in Central Asia, which Russia has traditionally dominated and where China is becoming increasingly active in making energy investments. The Russians are becoming more assertive, using their economic position to improve their geopolitical position in the region. The Saudis are using their money to try to stabilize the region. With oil above $120 a barrel, the last thing they need is a war disrupting their ability to sell. They do not want to see the Iranians mining the Strait of Hormuz or the Americans trying to blockade Iran.
The Iranians themselves are facing problems. Despite being the world's fifth-largest oil exporter, Iran also is the world's second-largest gasoline importer, taking in roughly 40 percent of its annual demand. Because of the type of oil they have, and because they have neglected their oil industry over the last 30 years, their ability to participate in the bonanza is severely limited. It is obvious that there is now internal political tension between the president and the religious leadership over the status of the economy. Put differently, Iranians are asking how they got into this situation.
Suddenly, the regional dynamics have changed. The Saudi royal family is secure against any threats. They can buy peace on the Peninsula. The high price of oil makes even Iraqis think that it might be time to pump more oil rather than fight. Certainly the Iranians, Saudis and Kuwaitis are thinking of ways of getting into the action, and all have the means and geography to benefit from an Iraqi oil renaissance. The war in Iraq did not begin over oil -- a point we have made many times -- but it might well be brought under control because of oil.
For the United States, the situation is largely a push. The United States is an oil importer, but its relative vulnerability to high energy prices is nothing like it was in 1973, during the Arab oil embargo. De-industrialization has clearly had its upside. At the same time, the United States is a food exporter, along with Canada, Australia, Argentina and others. Higher grain prices help the United States. The shifts will not change the status of the United States, but they might create a new dynamic in the Gulf region that could change the framework of the Iraqi war.
This is far from an exhaustive examination of the global shifts caused by rising oil and grain prices. Our point is this: High oil prices can increase as well as decrease stability. In Iraq -- but not in Afghanistan -- the war has already been regionally overshadowed by high oil prices. Oil-exporting countries are in a moneymaking mode, and even the Iranians are trying to figure out how to get into the action; it's hard to see how they can without the participation of the Western oil majors -- and this requires burying the hatchet with the United States. Groups such as al Qaeda and Hezbollah are decidedly secondary to these considerations.
We are very early in this process, and these are just our opening thoughts. But in our view, a wire has been tripped, and the world is refocusing on high commodity prices. As always in geopolitics, issues from the last generation linger, but they are no longer the focus. Last week there was talk of Strategic Arms Reduction Treaty (START) talks between the United States and Russia -- a fossil from the Cold War. These things never go away. But history moves on. It seems to us that history is moving.
This article can be forwarded or reposted but must be attributed to Stratfor.
Copyright 2008 Strategic Forecasting, Inc.
THE GEOPOLITICS OF $130 OIL
By George Friedman
Oil prices have risen dramatically over the past year. When they passed $100 a barrel, they hit new heights, expressed in dollars adjusted for inflation. As they passed $120 a barrel, they clearly began to have global impact. Recently, we have seen startling rises in the price of food, particularly grains. Apart from higher prices, there have been disruptions in the availability of food as governments limit food exports and as hoarding increases in anticipation of even higher prices.
Oil and food differ from other commodities in that they are indispensable for the functioning of society. Food obviously is the more immediately essential. Food shortages can trigger social and political instability with startling swiftness. It does not take long to starve to death. Oil has a less-immediate -- but perhaps broader -- impact. Everything, including growing and marketing food, depends on energy; and oil is the world's primary source of energy, particularly in transportation. Oil and grains -- where the shortages hit hardest -- are not merely strategic commodities. They are geopolitical commodities. All nations require them, and a shift in the price or availability of either triggers shifts in relationships within and among nations.
It is not altogether clear to us why oil and grains have behaved as they have. The question for us is what impact this generalized rise in commodity prices -- particularly energy and food -- will have on the international system. We understand that it is possible that the price of both will plunge. There is certainly a speculative element in both. Nevertheless, based on the realities of supply conditions, we do not expect the price of either to fall to levels that existed in 2003. We will proceed in this analysis on the assumption that these prices will fluctuate, but that they will remain dramatically higher than prices were from the 1980s to the mid-2000s.
If that assumption is true and we continue to see elevated commodity prices, perhaps rising substantially higher than they are now, then it seems to us that we have entered a new geopolitical era. Since the end of World War II, we have lived in three geopolitical regimes, broadly understood:
· The Cold War between the United States and the Soviet Union, in which the focus was on the military balance between those two countries, particularly on the nuclear balance. During this period, all countries, in some way or another, defined their behavior in terms of the U.S.-Soviet competition.
· The period from the fall of the Berlin Wall until 9/11, when the primary focus of the world was on economic development. This was the period in which former communist countries redefined themselves, East and Southeast Asian economies surged and collapsed, and China grew dramatically. It was a period in which politico-military power was secondary and economic power primary.
· The period from 9/11 until today that has been defined in terms of the increasing complexity of the U.S.-jihadist war -- a reality that supplanted the second phase and redefined the international system dramatically.
With the U.S.-jihadist war in either a stalemate or a long-term evolution, its impact on the international system is diminishing. First, it has lost its dynamism. The conflict is no longer drawing other countries into it. Second, it is becoming an endemic reality rather than an urgent crisis. The international system has accommodated itself to the conflict, and its claims on that system are lessening.
The surge in commodity prices -- particularly oil -- has superseded the U.S.-jihadist war, much as the war superseded the period in which economic issues dominated the global system. This does not mean that the U.S.-jihadist war will not continue to rage, any more than 9/11 abolished economic issues. Rather, it means that a new dynamic has inserted itself into the international system and is in the process of transforming it.
It is a cliche that money and power are linked. It is nevertheless true. Economic power creates political and military power, just as political and military power can create economic power. The rise in the price of oil is triggering shifts in economic power that are in turn creating changes in the international order. This was not apparent until now because of three reasons. First, oil prices had not risen to the level where they had geopolitical impact. The system was ignoring higher prices. Second, they had not been joined in crisis condition by grain prices. Third, the permanence of higher prices had not been clear. When $70-a-barrel oil seemed impermanent, and likely to fall below $50, oil was viewed very differently than it was at $130, where a decline to $100 would be dramatic and a fall to $70 beyond the calculation of most. As oil passed $120 a barrel, the international system, in our view, started to reshape itself in what will be a long-term process.
Obviously, the winners in this game are those who export oil, and the losers are those who import it. The victory is not only economic but political as well. The ability to control where exports go and where they don't go transforms into political power. The ability to export in a seller's market not only increases wealth but also increases the ability to coerce, if that is desired.
The game is somewhat more complex than this. The real winners are countries that can export and generate cash in excess of what they need domestically. So countries such as Venezuela, Indonesia and Nigeria might benefit from higher prices, but they absorb all the wealth that is transferred to them. Countries such as Saudi Arabia do not need to use so much of their wealth for domestic needs. They control huge and increasing pools of cash that they can use for everything from achieving domestic political stability to influencing regional governments and the global economic system. Indeed, the entire Arabian Peninsula is in this position.
The big losers are countries that not only have to import oil but also are heavily industrialized relative to their economy. Countries in which service makes up a larger sector than manufacturing obviously use less oil for critical economic functions than do countries that are heavily manufacturing-oriented. Certainly, consumers in countries such as the United States are hurt by rising prices. And these countries' economies might slow. But higher oil prices simply do not have the same impact that they do on countries that both are primarily manufacturing-oriented and have a consumer base driving cars.
East Asia has been most affected by the combination of sustained high oil prices and disruptions in the food supply. Japan, which imports all of its oil and remains heavily industrialized (along with South Korea), is obviously affected. But the most immediately affected is China, where shortages of diesel fuel have been reported. China's miracle -- rapid industrialization -- has now met its Achilles' heel: high energy prices.
China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.
Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China's reserves could shrink with remarkable speed, leaving their financial system -- already overloaded with nonperforming loans -- vulnerable. If they take the cap off, they face potential domestic unrest.
The Chinese dilemma is present throughout Asia. But just as Asia is the big loser because of long-term high oil prices coupled with food disruptions, Russia is the big winner. Russia is an exporter of natural gas and oil. It also could be a massive exporter of grains if prices were attractive enough and if it had the infrastructure (crop failures in Russia are a thing of the past). Russia has been very careful, under Vladimir Putin, not to assume that energy prices will remain high and has taken advantage of high prices to accumulate substantial foreign currency reserves. That puts them in a doubly-strong position. Economically, they are becoming major players in global acquisitions. Politically, countries that have become dependent on Russian energy exports -- and this includes a good part of Europe -- are vulnerable, precisely because the Russians are in a surplus-cash position. They could tweak energy availability, hurting the Europeans badly, if they chose. They will not need to. The Europeans, aware of what could happen, will tread lightly in order to ensure that it doesn't happen.
As we have already said, the biggest winners are the countries of the Arabian Peninsula. Although somewhat strained, these countries never really suffered during the period of low oil prices. They have now more than rebalanced their financial system and are making the most of it. This is a time when they absolutely do not want anything disrupting the flow of oil from their region. Closing the Strait of Hormuz, for example, would be disastrous to them. We therefore see the Saudis, in particular, taking steps to stabilize the region. This includes supporting Israeli-Syrian peace talks, using influence with Sunnis in Iraq to confront al Qaeda, making certain that Shiites in Saudi Arabia profit from the boom. (Other Gulf countries are doing the same with their Shiites. This is designed to remove one of Iran's levers in the region: a rising of Shiites in the Arabian Peninsula.) In addition, the Saudis are using their economic power to re-establish the relationship they had with the United States before 9/11. With the financial institutions in the United States in disarray, the Arabian Peninsula can be very helpful.
China is in an increasingly insular and defensive position. The tension is palpable, particularly in Central Asia, which Russia has traditionally dominated and where China is becoming increasingly active in making energy investments. The Russians are becoming more assertive, using their economic position to improve their geopolitical position in the region. The Saudis are using their money to try to stabilize the region. With oil above $120 a barrel, the last thing they need is a war disrupting their ability to sell. They do not want to see the Iranians mining the Strait of Hormuz or the Americans trying to blockade Iran.
The Iranians themselves are facing problems. Despite being the world's fifth-largest oil exporter, Iran also is the world's second-largest gasoline importer, taking in roughly 40 percent of its annual demand. Because of the type of oil they have, and because they have neglected their oil industry over the last 30 years, their ability to participate in the bonanza is severely limited. It is obvious that there is now internal political tension between the president and the religious leadership over the status of the economy. Put differently, Iranians are asking how they got into this situation.
Suddenly, the regional dynamics have changed. The Saudi royal family is secure against any threats. They can buy peace on the Peninsula. The high price of oil makes even Iraqis think that it might be time to pump more oil rather than fight. Certainly the Iranians, Saudis and Kuwaitis are thinking of ways of getting into the action, and all have the means and geography to benefit from an Iraqi oil renaissance. The war in Iraq did not begin over oil -- a point we have made many times -- but it might well be brought under control because of oil.
For the United States, the situation is largely a push. The United States is an oil importer, but its relative vulnerability to high energy prices is nothing like it was in 1973, during the Arab oil embargo. De-industrialization has clearly had its upside. At the same time, the United States is a food exporter, along with Canada, Australia, Argentina and others. Higher grain prices help the United States. The shifts will not change the status of the United States, but they might create a new dynamic in the Gulf region that could change the framework of the Iraqi war.
This is far from an exhaustive examination of the global shifts caused by rising oil and grain prices. Our point is this: High oil prices can increase as well as decrease stability. In Iraq -- but not in Afghanistan -- the war has already been regionally overshadowed by high oil prices. Oil-exporting countries are in a moneymaking mode, and even the Iranians are trying to figure out how to get into the action; it's hard to see how they can without the participation of the Western oil majors -- and this requires burying the hatchet with the United States. Groups such as al Qaeda and Hezbollah are decidedly secondary to these considerations.
We are very early in this process, and these are just our opening thoughts. But in our view, a wire has been tripped, and the world is refocusing on high commodity prices. As always in geopolitics, issues from the last generation linger, but they are no longer the focus. Last week there was talk of Strategic Arms Reduction Treaty (START) talks between the United States and Russia -- a fossil from the Cold War. These things never go away. But history moves on. It seems to us that history is moving.
This article can be forwarded or reposted but must be attributed to Stratfor.
Copyright 2008 Strategic Forecasting, Inc.
- Reaction score
- 35
- Points
- 560
The long awaited commercial use of waste cellulose to make ethanol comes closer to reality. Using things like corn stalks, sawdust and other "leftovers" makes sense, it does not impact on food supplies, and most of this stuff gets dumped in the landfill otherwise. The key is how much energy is needed to break down the cellulose so fermentation can begin, ethanol from waste might still be a boondoggle in terms of energy inputs/energy output.
If the ethanol can be used to power the farm economy (particularly as raw material for fertilizer and pesticides that are currently petrolium based), then this would probably have a bigger payoff than simply using it as fuel (since ethenol is actually a low energy fuel to begin with).
http://www.technologyreview.com/Energy/20828/?nlid=1099
If the ethanol can be used to power the farm economy (particularly as raw material for fertilizer and pesticides that are currently petrolium based), then this would probably have a bigger payoff than simply using it as fuel (since ethenol is actually a low energy fuel to begin with).
http://www.technologyreview.com/Energy/20828/?nlid=1099
- Reaction score
- 8,295
- Points
- 1,160
Thucydides - I am still no fan.
It is going to take a lot to convince me that we can find a hyper-efficient process to convert low grade energy supplies into higher grade energy supplies that are still of less energy carrying content than supplies that currently exist in the ground (natural gas, oil, coal, nuclear). Those materials are the result of processes that may or may not be efficient but have the advantage of incredible lengths of time, operating under conditions of temperature and pressure that are highly energetic themselves and hard to reproduce ...... and that were not subject to environmental controls. Whoever put them where he or she did, did a lousy job of containment.
As to the Stratfor article:
I think he has got the underlying premise wrong.
The Cold War was a period of balance between two competing powers. Prices went up and down. Wars and oil crises came and went. Military conflict was more common than economic conflict but that was probably because the "Communists" fundamentally failed to understand economics - or at best chose to ignore economics as an aberration.
Since the Fall of the Wall in 1989 even the Russians, or at least Vladimir Putin, has discovered that there is more clout in the Market Place than the Battle Field. America's strength through World War 1 and 2 as well as the Cold War, was based on its economic strength. It outproduced its competitors in both war and peace and established the Dollar as the world's currency. However, in doing so it lost control of that currency. It could now be played by speculators - as George Soros did with the UK Pound. And if a private individual can make the Pound vulnerable how likely is it that a foreign government could make the Dollar vulnerable.
Commodity prices aren't going up, any more than oil went up in 1973. The dollar is going down, as it did in 1973. The world used to work on the gold standard, which was abolished by governments, and the Dollar became the defacto trading standard for governments. In the "real world" though there is still a gold standard operating. The ratio between gold and oil doesn't change nearly as much as the ratios of Dollar vs Oil or Gold.
My sense is that since the end of the Cold War Governments have eschewed military conflict and decided, along with many private players, to take on the US hegemony where it hurts.... in the pocketbook. And because that is not seen as being as threatening as military conflict many "Allies" and citizens of friendly countries feel quite free to take on the Mighty and Evil Dollar, especially since it represents the interests of those Robber Barons at Exxon, Conoco......
Meanwhile, low level military/police actions continue as they always have, and continue as a drain on those countries engaged in them..... thus exacerbating their problems and leaving those on the sidelines in a continually strengthening position while the others drain their treasuries.
The current war is not being fought over the Treaty of Westphalia. It is being fought over Bretton Woods. The internationalists have found a vehicle that permeates physical boundaries and that armies are valueless against.
It is going to take a lot to convince me that we can find a hyper-efficient process to convert low grade energy supplies into higher grade energy supplies that are still of less energy carrying content than supplies that currently exist in the ground (natural gas, oil, coal, nuclear). Those materials are the result of processes that may or may not be efficient but have the advantage of incredible lengths of time, operating under conditions of temperature and pressure that are highly energetic themselves and hard to reproduce ...... and that were not subject to environmental controls. Whoever put them where he or she did, did a lousy job of containment.
As to the Stratfor article:
I think he has got the underlying premise wrong.
The Cold War was a period of balance between two competing powers. Prices went up and down. Wars and oil crises came and went. Military conflict was more common than economic conflict but that was probably because the "Communists" fundamentally failed to understand economics - or at best chose to ignore economics as an aberration.
Since the Fall of the Wall in 1989 even the Russians, or at least Vladimir Putin, has discovered that there is more clout in the Market Place than the Battle Field. America's strength through World War 1 and 2 as well as the Cold War, was based on its economic strength. It outproduced its competitors in both war and peace and established the Dollar as the world's currency. However, in doing so it lost control of that currency. It could now be played by speculators - as George Soros did with the UK Pound. And if a private individual can make the Pound vulnerable how likely is it that a foreign government could make the Dollar vulnerable.
Commodity prices aren't going up, any more than oil went up in 1973. The dollar is going down, as it did in 1973. The world used to work on the gold standard, which was abolished by governments, and the Dollar became the defacto trading standard for governments. In the "real world" though there is still a gold standard operating. The ratio between gold and oil doesn't change nearly as much as the ratios of Dollar vs Oil or Gold.
My sense is that since the end of the Cold War Governments have eschewed military conflict and decided, along with many private players, to take on the US hegemony where it hurts.... in the pocketbook. And because that is not seen as being as threatening as military conflict many "Allies" and citizens of friendly countries feel quite free to take on the Mighty and Evil Dollar, especially since it represents the interests of those Robber Barons at Exxon, Conoco......
Meanwhile, low level military/police actions continue as they always have, and continue as a drain on those countries engaged in them..... thus exacerbating their problems and leaving those on the sidelines in a continually strengthening position while the others drain their treasuries.
The current war is not being fought over the Treaty of Westphalia. It is being fought over Bretton Woods. The internationalists have found a vehicle that permeates physical boundaries and that armies are valueless against.
- Reaction score
- 35
- Points
- 560
Kirkhill, I agree that ethanol is not the answer, but if there is a process that can eliminate waste (sawdust, agricultural wastes etc.) and produce a useful product at the same time, then it is worth looking into. Ethanol can be used for lots of other purposes besides burning it in engines and boilers (I am thinking of a use right now! ;D).
WRT your point about the premise of the war, I am in agreement up to a point, but what is the cause and what is the effect? Is the disruption of the international order a deliberate attempt to target the West in an asymmetric manner or is a result of the dysfunctional nature of socialist economics we have adopted causing the disruption? (I would say a bit of "a" and a bit of "b".....). Given the rather primitive economic levers that many of the supposed enemies have, it is easy to see the effect is more of Lilliputians trying to tie down Gulliver with thousands of threads than a coordinated attack, although it is dangerous if it gets out of hand.
Our cultural strength is that "we" still have the entrepreneurial energy to go in all kinds of unexpected directions, frustrating dictators, mad mullahs and "progressives"; our non-military line of defense.
WRT your point about the premise of the war, I am in agreement up to a point, but what is the cause and what is the effect? Is the disruption of the international order a deliberate attempt to target the West in an asymmetric manner or is a result of the dysfunctional nature of socialist economics we have adopted causing the disruption? (I would say a bit of "a" and a bit of "b".....). Given the rather primitive economic levers that many of the supposed enemies have, it is easy to see the effect is more of Lilliputians trying to tie down Gulliver with thousands of threads than a coordinated attack, although it is dangerous if it gets out of hand.
Our cultural strength is that "we" still have the entrepreneurial energy to go in all kinds of unexpected directions, frustrating dictators, mad mullahs and "progressives"; our non-military line of defense.
- Reaction score
- 8,295
- Points
- 1,160
Ethanol is always a welcome addition to my internal economy.
I agree with you on cause and effect. I don't think there is a direct causality but I do think that there are those who choose to use the economy to their own strategic advantage. Much in the same manner that you might choose to anchor a position's flank on a swamp. You didn't create the swamp. You can't control the swamp. But you can use the swamp to your tactical advantage and you can modify the swamp by channelling water and building causeways and you can enhance the effect of the swamp with barbed wire, mines and fire positions.
There is, in my opinion, a strong body of people that yearn for order and that believe if only one person or group, with whom they agree, were in charge then they could live a peaceful life and never have to struggle again. (Perversely they seem to live for struggle). These people are generally of the socialist religion, which is authoritarian in nature and internationalist by proclivity - believing that religion and nationalism are the causes of conflict. (But this is old ground for us).
The point is, as George was driven to wonder about Fifth Columnists, that there are in fact ideological Fifth Columnists in all societies. They work with like-minded individuals across and through borders to bring about the change that they desire.
Many of them believe the US must be restrained, that individuality is a disease, that the US dollar must be destroyed and that no war can be allowed to be seen as being successful. The latter is particularly true of the stooges that invested so much of themselves in creating the political defeat of the US in Vietnam.
Imagine the internal conflicts they would have if, as earnest American youngsters they had struggled to decide to defeat the US in Vietnam because they had been conditioned to believe they were doing good by preventing they evil of war, only to discover that there are greater evils and that their efforts had made the world they hoped to improve a worse place......And now, no longer young with the opportunity to "fix" things they are like John Knox who signed all his letters "With one foot in the grave" and have to face the fact that their opportunity is behind them. That must be a disconcerting, if not frightening thought.
Hard to admit a lifetime of being wrong.
Those people cannot allow the US to be seen to win a counter-insurgency war in Iraq and Afghanistan, just as they couldn't allow it to be seen that dominoes did indeed fall in South East Asia. To allow those realities to be perceived would be to admit that they were wrong and that they created misery for untold millions.
I agree with you on cause and effect. I don't think there is a direct causality but I do think that there are those who choose to use the economy to their own strategic advantage. Much in the same manner that you might choose to anchor a position's flank on a swamp. You didn't create the swamp. You can't control the swamp. But you can use the swamp to your tactical advantage and you can modify the swamp by channelling water and building causeways and you can enhance the effect of the swamp with barbed wire, mines and fire positions.
There is, in my opinion, a strong body of people that yearn for order and that believe if only one person or group, with whom they agree, were in charge then they could live a peaceful life and never have to struggle again. (Perversely they seem to live for struggle). These people are generally of the socialist religion, which is authoritarian in nature and internationalist by proclivity - believing that religion and nationalism are the causes of conflict. (But this is old ground for us).
The point is, as George was driven to wonder about Fifth Columnists, that there are in fact ideological Fifth Columnists in all societies. They work with like-minded individuals across and through borders to bring about the change that they desire.
Many of them believe the US must be restrained, that individuality is a disease, that the US dollar must be destroyed and that no war can be allowed to be seen as being successful. The latter is particularly true of the stooges that invested so much of themselves in creating the political defeat of the US in Vietnam.
Imagine the internal conflicts they would have if, as earnest American youngsters they had struggled to decide to defeat the US in Vietnam because they had been conditioned to believe they were doing good by preventing they evil of war, only to discover that there are greater evils and that their efforts had made the world they hoped to improve a worse place......And now, no longer young with the opportunity to "fix" things they are like John Knox who signed all his letters "With one foot in the grave" and have to face the fact that their opportunity is behind them. That must be a disconcerting, if not frightening thought.
Hard to admit a lifetime of being wrong.
Those people cannot allow the US to be seen to win a counter-insurgency war in Iraq and Afghanistan, just as they couldn't allow it to be seen that dominoes did indeed fall in South East Asia. To allow those realities to be perceived would be to admit that they were wrong and that they created misery for untold millions.
If I had more time, I'd find the article that relates to this.....will find it later on.
HOWEVER.....anybody heard of a concept called "overunity" engines?? "overunity generators"?? Basically, the concept of "overunity" is an engine/generator that produces more power than it consumes, in theory providing an unlimited source of power.
An Australian inventor (who's name I will find later, when I find some related articles) -- invented an Electromagnetic Overunity Engine, that could generate power indefinately.
It had no moving parts that caused friction. Essentially, it was powered by 2 oppositely charged magnets, that could keep the engine running indefinately. Quite a genius design, I'll post more when I'm not at work.
HOWEVER.....anybody heard of a concept called "overunity" engines?? "overunity generators"?? Basically, the concept of "overunity" is an engine/generator that produces more power than it consumes, in theory providing an unlimited source of power.
An Australian inventor (who's name I will find later, when I find some related articles) -- invented an Electromagnetic Overunity Engine, that could generate power indefinately.
It had no moving parts that caused friction. Essentially, it was powered by 2 oppositely charged magnets, that could keep the engine running indefinately. Quite a genius design, I'll post more when I'm not at work.
Bert
Sr. Member
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muskrat89 said:
I remember decades ago a geography teacher of mine discussing oil as a finite resource.
Easy to get to oil would be gone by 2030-ish so he said. In the early 1990s, I read
something by Gwynne Dyer speculating the impact of if and when each Chinese or East
Indian family are able to buy a car. The impacts of pollution and supply/demand of oil
all had consequences in a growing global economy.
These issues may not have been something the average Canadian would think about over the
years but the consequences and even the timing of things would have been known
by various means.
"Taxing the damn thing" to me is just the thing a government would do if it were
dealing with the price of oil and the consequences of pollution as a crisis.
Completely side-swiped by global demand and peak oil. You'd think the government
would have some foresight, investigate the alternatives, and shown a bit of
leadership. Or is market place driven solutions and taxes better?
I applaud the initiatives of the Californian government and the "hydrogen highway"
concept as an example. At least that government is providing a direction of
sorts and involved in possible solutions.
- Reaction score
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Like famine, energy crisis can also be self induced by uncaring or incompetent governments. Ontario will be heading down the same road soon:
http://www.dailymail.co.uk/news/article-1025586/FUEL-CRISIS-Forget-warnings-panic-pumps-Thanks-decades-government-neglect-Britain-set-lose-nearly-half-electricity-years.html#
http://www.dailymail.co.uk/news/article-1025586/FUEL-CRISIS-Forget-warnings-panic-pumps-Thanks-decades-government-neglect-Britain-set-lose-nearly-half-electricity-years.html#
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It is everywhere- it is just oil companies have been forbidden to look for it in places like most of the North American continental shelf (Around the Queen Charlottes is supposed to be especially juicy- it apparently seeps from the ground naturally in Haida Gwaii- wouldn't drilling for it sort being like cleaning it up >
)
)
George Wallace
Army.ca Dinosaur
- Reaction score
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- Points
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SeaKingTacco said:It is everywhere- it is just oil companies have been forbidden to look for it in places like most of the North American continental shelf (Around the Queen Charlottes is supposed to be especially juicy- it apparently seeps from the ground naturally in Haida Gwaii- wouldn't drilling for it sort being like cleaning it up >
Of course, that would relieve pressure on the Continental Plates and Vancouver Island and California would slide under the ocean. >
George Wallace
Army.ca Dinosaur
- Reaction score
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TCBF said:- So, what's the downside?
None. It would make your trip to that sandy ocean beach a much shorter drive. ;D
- Reaction score
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I was just thinking if countries might declare war on us for our tar sands. I highly suggest civilians of today to join the reserves to get training and be prepared for what may be an inevitable event.
A
aesop081
Guest
Duke_The_Patriot said:
We're doing a good job as it is selling the stuff at a discounted rate.......no need to invade us for it.
Hum, yeah........ok
- Reaction score
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Ottawa kills two birds with one stone. This system was proposed by a number of candidates during the last municipal election here in London; alas they were not elected and our "progressive" city council seems to believe that clear plastic garbage bags and intrusive inspections of the contents (plus the blue and green boxes) is the way to go... :
http://www.technologyreview.com/Energy/21029/?nlid=1184
http://www.technologyreview.com/Energy/21029/?nlid=1184
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