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Why political correctness fails – Why what we know ‘for sure’ is wrong

Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows: There is a right way to think and a right way to talk, and also a right set of things to think and talk about. Secularism is taken for granted. Environmentalism is a sacred cause. Issues of identity—principally the holy trinity of race, gender, and sexuality—occupy the center of concern. There are other beliefs that go with this religion of success: Wind and solar will save us. Electric cars will make transportation possible indefinitely. Our world […]

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Why Oil Prices Can’t Bounce Very High; Expect Deflation Instead

Economists have given us a model of how prices and quantities of goods are supposed to interact. Figure 1. From Wikipedia: The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product. Unfortunately, this model is woefully inadequate. It sort of works, until it doesn’t. If there is too little a product, higher prices […]

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The Next Financial Crisis Is Not Far Away

Recently, a Spanish group called “Ecologist in Action” asked me to give them a presentation on what kind of financial crisis we should expect. They wanted to know when it would be and how it would take place. The answer I had for the group is that we should expect financial collapse quite soon–perhaps as soon as the next few months. Our problem is energy related, but not in the way that most Peak Oil groups describe the problem. It is much more related to the election of President Trump and to the Brexit vote. I have talked about this […]

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Falling Interest Rates Have Postponed “Peak Oil”

Falling interest rates have huge power. My background is as an actuary, so I am very much aware of the great power of interest rates. But a lot of people are not aware of this power, including, I suspect, some of the people making today’s decisions to raise interest rates. Similar people want to sell securities now being held by the Federal Reserve and by other central banks. This would further ramp up interest rates. With high interest rates, practically nothing that is bought using credit is affordable. This is frightening. Another group of people who don’t understand the power […]

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The Economy Is Like a Circus

The economy is like a circus. It comes to town, and eventually it leaves town. We get paid in tickets to this circus. As long as the circus stays in town, we can use our tickets. Once the circus leaves town, we are pretty much out of luck.1 The reason the circus stays in town is because the economy stays in sufficient balance that the economy can go on. This is much like the way many other self-organized systems function. For example, our bodies continue to function as long as there are suitable balances in many different areas (oxygen, food, […]

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The “Wind and Solar Will Save Us” Delusion

The “Wind and Solar Will Save Us” story is based on a long list of misunderstandings and apples to oranges comparisons. Somehow, people seem to believe that our economy of 7.5 billion people can get along with a very short list of energy supplies. This short list will not include fossil fuels. Some would exclude nuclear, as well. Without these energy types, we find ourselves with a short list of types of energy — what BP calls Hydroelectric, Geobiomass (geothermal, wood, wood waste, and other miscellaneous types; also liquid fuels from plants), Wind, and Solar. Unfortunately, a transition to such […]

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EROEI Calculations for Solar PV Are Misleading

The Energy Returned on Energy Invested (EROEI) concept is very frequently used in energy studies. In fact, many readers seem to think, “Of course, EROEI is what we should be looking at when comparing different types of energy. What else is important?” Unfortunately, the closer to the discussions of researchers a person gets, the more problems a person discovers. People who work with EROEI regularly say, “EROEI is a tool, but it is a blunt tool. An EROEI of 100 is good compared to an EROEI of 10. For small differences, it is not so clear.” Because of the idiosyncrasies […]

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What has gone wrong with oil prices, debt, and GDP growth?

Our economy is a mystery to almost everyone, including economists. Let me explain the way I see the situation: (1) The big thing that pulls the economy forward is the time-shifting nature of debt and debt-like instruments. If we want any kind of specialization, we need some sort of long-term obligation that will make that specialization worthwhile. If one hunter-gatherer specializes in finding flints that will start fires, that hunter-gatherer needs some sort of guarantee that others, who are finding food, will share some of their food with him, so that the group, as a whole, can prosper. Others, who […]

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How Researchers Could Miss the Real Energy Story

I have been telling a fairly different energy story from most energy researchers. How could I possibly be correct? What have other researchers been missing? The “standard” approach is to start from the amount of resources that we have of a particular type, for example, oil in the ground, and see how far these resources will go. Growing development of technology seems to allow increasing amounts of these resources to be extracted. Thus, limits seem to be farther and farther in the distance, especially if a person starts out with an optimistic bias. It is easy to get this optimistic bias, […]

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Why energy prices are ultimately headed lower; what the IMF missed

We have been hearing a great deal about IMF concerns recently, after the release of its October 2016 World Economic Outlook and its Annual Meeting October 7-9. The concerns mentioned include the following: Too much growth in debt, with China particularly mentioned as a problem World economic growth seems to have slowed on a long-term basis Central bank intervention required to produce artificially low interest rates, to produce even this low growth Global international trade is no longer growing rapidly Economic stagnation could lead to protectionist calls These issues are very much related to issues that I have been writing about: […]

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