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Hermit
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Re:knock knock Hermit
« Reply #15 on: 2008-05-30 11:04:42 » |
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[duxua] ...but I need to ask: how many of "the most ardent libertarians", whom you also call socialists (knowing I'm sure that this ticks libertarians off), do you actually know?
[hermit] This article Isn't libertarian socialism an oxymoron? might apply. The following quotation might show why.Webster's New International Dictionary defines a libertarian as "one who holds to the doctrine of free will; also, one who upholds the principles of liberty, esp. individual liberty of thought and action." As we discussed earlier (see section B.1, for example), capitalism denies liberty of thought and action within the workplace (unless one is the boss, of course). Therefore, real libertarian ideas must be based on workers self-management, i.e. workers must control and manage the work they do, determining where and how they do it and what happens to the fruit of their labour, which in turn means the elimination of wage labour. The elimination of wage labour is the common theme of socialism (in theory at least, anarchist argue that state socialism does not eliminate wage labour, rather it universalises it). Or, to use Proudhon's words, the "abolition of the proletariat." [Selected Writings of Pierre-Joseph Proudhon, p. 179] It implies a classless and anti-authoritarian (i.e. libertarian) society in which people manage their own affairs, either as individuals or as part of a group (depending on the situation). In other words, it implies self-management in all aspects of life -- including work. It has always struck anarchists as somewhat strange and paradoxical (to say the least) that a system of "natural" liberty (Adam Smith's term, misappropriated by supporters of capitalism) involves the vast majority having to sell that liberty in order to survive.
According to the American Heritage Dictionary "socialism" is "a social system in which the producers possess both political power and the means of producing and distributing goods." This definition fits neatly with the implications of the word "libertarian" indicated above. In fact, it shows that socialism is necessarily libertarian, not statist. For if the state owns the workplace, then the producers do not, and so they will not be at liberty to manage their own work but will instead be subject to the state as the boss. Moreover, replacing the capitalist owning class by state officials in no way eliminates wage labour; in fact it makes it worse in many cases. Therefore "socialists" who argue for nationalisation of the means of production are not socialists (which means that the Soviet Union and the other 'socialist" countries are not socialist nor are parties which advocate nationalisation socialist).
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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duxua
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Re:knock knock Hermit
« Reply #16 on: 2008-05-30 17:37:23 » |
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[Hermit 14] Have you taken any recognized economics courses? I seem to be having some trouble communicating with you and am wondering if I am pitching at the wrong level?
I have an answer for you: you are pitching at the wrong level.
At this point, I've recognized what seems to be one of your favorite argumentative strategy, which is to denigrate any sources quoted by anyone who disagrees with you, so I'm not sure that there is much for me to gain in even trying to present my credentials to you.
[Hermit 14] I'm sorry. While I read this years ago, this may be the root of your communication problem. According to the vast majority of Economists, von Mises was not an Economist, he was a right-wing crank. Let me quote an article you may find helpful (...)
*My* communication problem uh? Tell you what, your quote wasn't very useful. It basically said that the Austrian school isn't popular and therefore can be disregarded. At least the author you quoted had the civility to remain polite, whereas you seem to continue to enjoy name calling.
One of the reasons why a reference to Mises was appropriate in this situation is precisely because Mises approaches economics from an unorthodox perspective. Instead of the traditional micro/macro, market equilibrium, &c that you'll find in other texts, Mises tries to demonstrate how economics stems from purposeful action. Even if you reject his conclusions (and I do disagree with Mises on a large number of points), the first 100 pages of Human Action remain very eye opening and relevant to the discussion we were having. They would even be relevant to the proposals of your openbarter friends.
[Hermit 14] This also may be a reason for regarding articles relating to Economics at Wikipedia with more than the usual degree of skepticism, if only because Wikipedia has apparently attracted many Libertarian editors.
So you don't like Wikipedia either? Let's see now... I'm pretty sure Wikipedia's articles are subjected to more critiques and reviews than www.huppi.com/kangaroo. I'm also quite certain that there are more post-graduate economists working at the Mises Institute than at shadowstats.com. Should we also compare the distribution of Hayek's "Road to Serfdom" to "The Long Emergency"?
I don't think your sources are adding-up very well so far. Do you still maintain that Sweden doesn't have a national debt? Did you get that from one of your superior, non-biased, authoritative sources, like a Michael Moore movie?
Oops! I'm afraid I've been criticizing your sources without actually addressing any relevant point. Shame on me, but that seems to be the cornerstone of your argumentation style.
[Hermit 14] So may I suggest that you study some mainstream economics before criticising the economic comprehension of others, but please complete "The Long Emergency" first.
You can suggest anything you want. You sure seem to have a plan for all of us don't you? "I suggest this" "Please complete that" "Don't criticize me but let me criticize you".
So here I am, trying to have a dialogue with someone who advocates the destruction of cities and the reduction of 3/4 of the world population. This same person mockingly rejects a school of economics that is over 100 years old, but promotes some totally new online barter system. And then Mr.Hermit goes around thinking he can call people fools, cranks, and uneducated!?
At least I gave you the benefit of the doubt on your theories. I even purchased the book you suggested out of honest interest as to what would cause a seemingly intelligent person to think that we are so close to an imminent disaster.
Having given you my sources (which you even claim to have read), I would have thought we could at least agree on what I mean when I employ simple terms like value, scarcity, markets, and exchanges. Instead, you carry-on making up your own definitions and then proceed to challenge me on them!
But I'm afraid I've had it trying to understand your incomplete sentences, non-sequitur rants, incorrect facts, and flip-flop statements about whether or not we are running out of oil.
I found the principles of the CoV to be exciting. I liked the virtues and sins. I am passionately interested in memetics, evolution, rational thinking, etc. I even read the BBS for some time before I started posting, but now I personally understand what happened to the likes of Ophis and Bass. This board has sadly been taken over by you Hermit. I hope you enjoy it.
Maybe we'll chat again one day. Hopefully when you've learned to think through your ideas and get to the point you're trying to make instead of confusing your readers to death with your long rants.
[Hermit 14] Please don't <snip>
<snip>
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Blunderov
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Re:knock knock Hermit
« Reply #17 on: 2008-05-31 05:13:03 » |
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Quote from: duxua on 2008-05-30 17:37:23
<snip>now I personally understand what happened to the likes of Ophis and Bass. </snip> |
[Blunderov] Good. I'm glad that's settled then. They didn't seem to fit in either.
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Hermit
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Re:knock knock Hermit
« Reply #18 on: 2008-06-01 11:02:14 » |
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I could respond to much of your vituperative mischaracterization. If you are leaving, there seems little point.
Good-bye.
Hermit
PS Had you ever considered a position at an AM Radio station?
PPS I don't dislike Wikipedia at all. I have made contributions to it and make extensive use of it. I also regard it skeptically - as it does too. Currently most of its economics articles are rated as "entry-level" and the discussion pages reflect similar concerns to mine.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Hermit
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Re:knock knock Hermit
« Reply #19 on: 2008-06-02 02:52:22 » |
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Afterword:
If I remember correctly, Bass survived years of robust corrections, but vanished from the CoV rather suddenly, when the discovery of some rather rampant and blatant identity theft, of both Virians and of the users of other forums, for use both here and on other forums, was exposed. Of course, this may merely have been coincidence. Bass always had a fairly thick skin and an array of excuses for himself. Then too, his last post to the CoV suggests that he may have committed suicide or become a baptifundipentacostalist5TM.
Again, if I recall correctly, Ophis did not seem to have any significant issues with the CoV - or the CoV with him. His most recent posts quite correctly did not indicate anything that would indicate that he saw himself as unwelcome.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Hermit
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Re:knock knock Hermit
« Reply #20 on: 2008-06-21 15:41:59 » |
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Bodman: Insufficient oil production behind prices
Source: Associated Press
Authors: Sebastian Abbot (Associated Press Writer)
Dated: 2008-06-21
Dateline: Jiddah, Saudi Arabia
The U.S. energy secretary said Saturday that insufficient oil production, not financial speculation, was driving soaring crude prices.
Secretary Samuel Bodman's comments on the eve of an energy summit in the Saudi port city of Jiddah set the stage for a showdown between the U.S. and conference host Saudi Arabia, which has largely blamed speculation in the oil markets for record prices.
The U.S. and many other Western nations have put increasing pressure on Saudi Arabia, the world's top oil exporter, to increase production. Saudi officials have been hesitant to do so, arguing that the market is not suffering from a shortage of supply.
Bodman disputed that assertion Saturday, saying oil production has not kept pace with growing demand, especially from developing countries like China and India.
"Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices," Bodman told reporters. "There is no evidence that we can find that speculators are driving futures prices" for oil.
He said commodities markets have experienced a huge influx of money from financial investors in recent years, but they have been following the market upward rather than driving the increase in the price of oil, which closed near $135 on Friday.
Saudi Arabia called the unusual meeting in Jiddah between oil producing and consuming nations as a way to show that it was not deaf to international cries that high oil prices have caused social and economic turmoil.
Saudi assistant oil minister, Prince Abdulaziz bin Salman, told a news conference that the delegates were "congregating to achieve results" and to try to draw "a collective way forward for how to attend to this situation."
"This situation as we see it today as it exists needs everybody's attention simply because it no longer is a luxury to talk about it or ... to keep bouncing back and forth blame," he added.
Abdulaziz said the decision of the kingdom to hold the meeting comes from a feeling of "enough is enough ... Let's sit as professionals committed to bringing remedies to this situation."
Abdulaziz reiterated that the kingdom is ready to meet demand from its customers and that it seeks stable oil prices.
He said it would be "wrong" to judge the success of the meeting by prices that oil registers the day after.
Many countries around the world have experienced social unrest by populations angry that rising fuel prices have driven significant increases in the cost of food and other basic goods.
The Gulf nation also has become increasingly concerned that record oil prices could hinder growth in the U.S. and other major industrialized economies, potentially leading to a decline in oil demand and a sharp drop-off in prices.
Saudi Arabia announced in May that it had increased oil production by 300,000 barrels per day and is expected to announce an additional increase of at least 200,000 barrels in Jiddah. Saudi officials have yet to officially confirm the latter increase, but the production jump did little to stem the run up in prices.
Bodman said that every 1 percent increase in the demand for oil requires a 20 percent rise in price to balance the market. Demand in China, India and the Middle East has been soaring in recent years as the countries consume more energy to fuel economic growth.
Rising demand in the developing world has coincided with historically low levels of spare oil production capacity, which fell below 2 million barrels per day among OPEC countries in May for the first time since the third quarter of 2006, according to the International Energy Agency.
Bodman made clear that the responsibility for reducing oil prices did not simply fall on the shoulders of producing nations, saying consuming countries must increase energy efficiency and invest in the development of alternative fuels. But he saved his strongest words for oil producers like Saudi Arabia, who he said must step up long-term investment in production and spare capacity.
"The incentive (for investing) is simply reasonable prices so that we're not faced with having to drop everything and race to Jiddah for a meeting that was called on a week's notice," said Bodman.
Saudi Arabia is completing a $50 billion plan to increase capacity to 12.5 million barrels a day from around 10.7 million barrels currently but has signaled it would not go beyond that. The kingdom currently produces about 9.5 million barrels per day.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Fritz
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Re:knock knock Hermit
« Reply #21 on: 2008-06-26 23:32:31 » |
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Split the difference ?
Fritz
PS Experience tells me I will have lesson coming 
Source:More Oil Production Cut Prices?
Author: Sebastian Abbot , Associated Press Writers
Date: Tue Jan 15, 2008 2:28 PM EST
CAIRO — Would oil prices really fall if Saudi Arabia and other OPEC countries raised their production as President Bush proposed Tuesday? Some questions and answers about prices at the pump:
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Q: Saudi Arabia has the world's largest oil reserves. But how much can it really ramp up production in the short-term?
A: Analysts say Saudi Arabia has the capability to boost production by up to nearly 2 million barrels per day, although the Saudis are leery of a major increase. Although a production increase would likely reduce prices in the short run, there are other factors driving up prices — including increased demand in booming economies such as China and India.
Q: Is OPEC likely to boost production?
A: That's uncertain. Members of the Organization of Petroleum Exporting Countries blame rising prices on oil speculators rather than tight supply. OPEC decided to boost production by 500,000 barrels per day at its September meeting, but the increase did little to counter rising prices.
Q: Is increased demand for oil — and not supply — the key factor driving oil prices now?
A: Yes. Many analysts believe that economic growth in developing countries has helped produce a spike in oil prices even though there have been no supply shortages.
Q: How have financial market speculators affected oil prices?
A: Hedge funds and other financial institutions have been buying and selling oil contracts in an attempt to generate profits. Many oil producers, including Saudi Arabia, blame this for the rise, saying that traders are buying more oil on speculation that the price will continue to go up.
Q: Does a weak U.S. dollar impact oil prices?
A: Oil is priced in dollars on the world market and analysts say the falling value of the U.S. currency has contributed to rising prices. Assuming the value of a barrel of oil is fixed, as the dollar declines, the price of oil must increase to make up for lost value.
Q: Just how big an impact are oil prices having on America's economy?
A: Higher oil prices increase shipping and other costs. However, experts point out that a widely predicted slowdown in the U.S. economy will ultimately push down oil prices.
Q: Does political upheaval in places like Iran and Iraq have any real impact on oil prices?
A: There is very little excess production capacity in the world oil market now. That means events like the Jan. 6 confrontation between U.S. and Iranian ships in the Persian Gulf can drive up prices by raising fears of a disruption in supplies.
Q: When will OPEC consider any increase in production?
A: OPEC next meets Feb. 1 in Vienna, Austria, to consider increasing output. Many analysts believe a production increase is unlikely given the slowing U.S. economy and the normal decrease in demand as winter ends in the U.S. and Europe.
© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Hermit
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Re:knock knock Hermit
« Reply #22 on: 2008-06-26 23:54:31 » |
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[Fritz] PS Experience tells me I will have lesson coming
[Hermit] Not much of a lesson I fear.[1] The article is horribly out of date.
[2] Saudi Arabia is already past peak and while they regard their output as a state secret, it is well known that they are already pumping far more salt-water than oil out of the ground. They are definitely no longer swing producers. Russia passed them in 1983/1984 (and has peaked in turn). I strongly doubt that the Saudis can sustain increased pumping rates even if they could bleed from reserve stock. If they could, they almost certainly would have earlier when the cost of oil was shown to be a major driver for the fall in the dollar late last year (Don't forget that Saudi Arabia's national trust is (stupidly!) a major investors in US bonds. This means that as the dollar collapses so too, their investment looks less and less secure. Which doesn't promote stability amongst their royals.)
[3] OPEC seems to have changed its mind since this release. Chakib Khelil the President of OPEC said in an interview with France 24 that the price was not really caused by speculation, but rather a function of the intersection of dollar weakness and increasing demand - and that he expected a price of $170 before the end of summer, with it coming off that before the end of the year, and unlikely to reach $200 "this year."
Kindest Regards
Hermit
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Fritz
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Re:knock knock Hermit
« Reply #23 on: 2008-06-27 23:31:38 » |
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Hermit your point is acknowledged; but I’m still not comfortable with this as a straight supply issue yet. Possibly my conspiracy module is protesting to much but history seems to have money at the root cause. And the market is as gamey as it gets as far as I can grasp.
The post in most ways confirm your take, but still hedge with doubt.
If Alberta gets muzzles by the climate lobby soon, I think it will be the turning point for North America and then I would concede Supply rules. ( as you point out, more silliness in the middle east with Iran would trip to supply governing as well)
Cheers
Fritz
PS You realize there might be a queue forming to see if Hermit might get it wrong just once 
Source: Stock funds slip in oil-slicked quarter
Author: Jonathan Burton, MarketWatch
Date: 6:45 p.m. EDT June 27, 2008
<snip> But Brad Sorenson, director of sector research at Charles Schwab & Co., has a less rosy view on energy stocks. "There's not a lot of fundamental justification for oil to be at $140 a barrel," he said. "There's a speculative element that's driven prices up, and there's a good chance of a pullback that will be sharp and quick. We're recommending that investors take profits."<snip>
[Fritz]Sorry, the link is too complex to post in its entirety
Source:The Wall Street Journal
Author: Phil Izzo
Secondary Sources: Oil Speculation, Fed, China, Stimulus
Date: June 27, 2008, 10:52 am
A roundup of economic news from around the Web.
• Oil Speculation: In the New York Times, Paul Krugman continues to argue against those blaming speculation for the rise in oil prices. “Suffice it to say that some economists, myself included, make much of the fact that the usual telltale signs of a speculative price boom are missing. But other economists argue, in effect, that absence of evidence isn’t solid evidence of absence. What about those who argue that speculative excess is the only way to explain the speed with which oil prices have risen? Well, I have two words for them: iron ore. You see, iron ore isn’t traded on a global exchange; its price is set in direct deals between producers and consumers. So there’s no easy way to speculate on ore prices. Yet the price of iron ore, like that of oil, has surged over the past year. In particular, the price Chinese steel makers pay to Australian mines has just jumped 96 percent. This suggests that growing demand from emerging economies, not speculation, is the real story behind rising prices of raw materials, oil included.” Krugman provides much of the backstory on his blog.
• Fed Watch: Writing for the Economist’s View blog, Tim Duy says the Fed is in something of an untenable position. “In theory, the best outcome is to find is a sweet spot that allows global growth outside of the US to decelerate while avoiding a free fall in the Dollar. In the absence of such equilibrium, the US economy can hobble along only as long as the following three conditions hold: 1. The Federal Reserve can maintain easy monetary policy. 2. The US government can sustain repeated fiscal stimulus measures. 3. China and the rest of the dollar bloc continue to be willing to accumulate US assets, primarily the Treasury debt needed for fiscal stimulus. When these conditions no longer hold – such as the Fed needs to tighten to counter energy inflation, or the demand for US debt drops sharply – then I suspect the US economic environment will shift decisively toward higher inflation or significant recession. Or both.”
• Chinese Inflows: The Economist says that China is being flooded by the biggest wave of speculative capital ever to hit an emerging economy. “It is one thing to deduce how much money is coming in. It is another to work out where it is going and how it gets past China’s strict capital controls. The stockmarket, which continues to plunge, is no home for hot money. Some has gone into property. The lion’s share is in bog-standard bank deposits. An interest rate of just over 4% on yuan deposits compared with 2% on dollars, combined with an expected appreciation in the yuan, offers a seemingly risk-free profit for those who can get money into China.”
• How I Spent My Stimulus: Barry Ritholtz points us to a site that asks users to post how they spent their stimulus checks. One example: “I put my $600 to releasing a music album. Here are some sample lyrics from it: ‘they’re paying off the taxpayer hive acceptin Chinese financed rebate bribes buyin Chinese TVs to put in their lives national debt, we’re just getting behind lowest in savings, people still slaving all time productive to give to their cravings not me see, I’m droppin’ baggage hip-hop is my stimulus package’ The money went to an American company for the printing/replication. I hope to sell enough CDs and mp3s to buy a new television.”
http://blogs.wsj.com/economics/2008/06/27/secondary-sources-oil-speculation-fed-china-stimulus/trackback/
Source:Does No One Remember the Pain of the '70s?
Author: John Fout
Date: 06/27/08 - 10:25
Both presidential nominees -- Sen. John McCain (R., Ariz.) and Sen. Barack Obama (D., Ill.) -- joined the call to crack down on oil speculation in recent days. But government intervention could lead to worse problems in the oil markets if executed incorrectly.
McCain said in a speech about energy last week in Houston:
We all know that some people on Wall Street are not above gaming the system. When you have enough speculators betting on the rising price of oil, that itself can cause oil prices to keep on rising. And while a few reckless speculators are counting their paper profits, most Americans are coming up on the short end -- using more and more of their hard-earned paychecks to buy gas for the truck, tractor, or family car.
He would reform the futures market to increase transparency similar to the way stocks trade on the New York Stock Exchange (NYX - Cramer's Take - Stockpickr) and Nasdaq (NDAQ - Cramer's Take - Stockpickr). McCain didn't specify whether he planned to take any action against speculators above and beyond those that the Justice Department has under way. The McCain campaign did not respond to email requests for information for this article.
On Sunday, the Obama campaign released a detailed plan for rooting out speculation:
For the past years, our energy policy in this country has been simply to let the special interests have their way -- opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon. My plan fully closes the Enron loophole and restores common-sense regulation as part of my broader plan to ease the burden for struggling families today while investing in a better future.
His four-point plan includes: 1) closing the "Enron loophole" 2) ensuring that U.S. energy futures trade on a regulated market 3) working with other countries to coordinate regulation, and 4) having the Federal Trade Commission and Justice Department investigate market abuses.
Does no one remember the 1970s?
The Enron loophole arose from a provision introduced in the Commodities Futures Modernization Act of 2000 by former Sen. Phil Gramm -- an adviser to McCain's campaign -- which basically banned a single traded future. This prevents the Commodities Futures Trading Commission (CFTC) from investigating trading in the oil markets because so many occur as part of unregulated swaps.
Peter Zeihan, vice president of analysis at Stratfor (a leading publisher of online geopolitical intelligence), warned against drawing any parallel to the Enron scandal. "Enron made markets on things that didn't exist," he said. "The oil market is not like Enron. Oil trades in the real world with lots of capital behind it."
Clearly, the government failed to take action against Enron's illegal activities. While government regulation of speculators sounds like a good idea, oil and commodity markets are distinctly different from the bond and stock markets. Politicians need to proceed carefully, or every American could face ugly consequences.
The 1970s offer an excellent lesson for today. The 1970s disaster began when President Richard Nixon and Congress instituted price controls in an effort to mitigate soaring prices. This backfired dramatically. Shortages quickly sprang up, and Americans lined up around the block to fill their gas tanks.
President Jimmy Carter phased out some of those controls. Unfortunately, he couldn't resist the lure of taxing oil companies for windfall profit. None of these actions improved the price of petroleum.
Before politicians jump the gun, they need to determine whether greedy speculators really are forcing up oil prices today.
They aren't, if you listen to energy experts like Tom Wallin, president of Energy Intelligence, a firm that specializes in energy analysis. He wrote via email:
"I think there is a fundamental misunderstanding about the role of speculators in the recent run up in oil prices. I believe that they are playing a role but it is not because they are greedy speculators but because of the structure of the market."
Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution, said: "These are hedge funds and investment banks who utilize the futures market in order to hedge versus inflation," he continued: "People's opinion I respect see the inflation hedge causing a $10 to $15 per barrel premium in the market."
Wallin agreed there's a small premium in the market. "If we could wave a magic wand and eliminate the distortions caused by speculation, we might see oil prices decline -- perhaps by 10% or so -- but that would not solve the basic problem," he said.
Oil prices remain high for reasons of supply and demand. Ebinger has experience working in Asia and suggests that demand has been underreported there. "Demand is accelerating through the roof," he said. "India alone has high demand for diesel fuel to power diesel generators because of an inconsistent electricity grid. Statistics lag behind the reality by 18-20 months."
Zeihan predicts that politicians in Washington will mettle with the markets because of bi-partisan support for action. In fact, Rep. John Dingell (D., Mich.) issued a letter last week demanding information on contracts and trading behaviors from the CFTC for the House Energy and Commerce Committee. The letter stated: "It is fair to ask whether large inflows from commodity index investors are distorting energy prices and undermine the price discovery function, and whether the CFTC has the data to help answer this question."
Ebinger warned against those who "too easily use criticism of the CFTC as a scapegoat." He commented Congress has to be careful not to limit use of contracts only for airlines and trucking industries. He agreed with Obama's position, and possibly McCain's, on closing the Enron loophole: "It makes sense." But he continued saying: "We have to let the markets operate, even if they remain behind the curve. Eventually the price will come into line as it did in the 1980s"
Zeihan asked the question: "Will Congress get it right?" He expressed concerns that an improper modification could lead to another market blow up similar to the subprime catastrophe. Wallin also wonders if intervention won't have unintended consequences:
As for the CFTC, if they try to ban speculation I think it will reappear in other forms. It will either go offshore, to London or some other jurisdiction. This would be bad for the Wall Street firms that advise the CFTC and that have plenty of political influence elsewhere as well... if they banned speculation, we would go back to the something like the oil markets of the 1970s, which were more opaque and inefficient than what we have now.
Inefficiency and a reliance on small, physical spot market would not lower the price of oil, just as it didn't in the 1970s. For example, back then, the fall of the Shah in Iran caused hysteria in the markets. The Middle East remains unstable today with the U.S. and Israel threatening to bomb Iran if they further attempts to operate nuclear reactors.
According to Ebinger: "We need a concerted national energy policy, and it cannot change every four years. Change has to include every available energy solution as part of the mix."
This sounds like excellent advice for the candidates and Congress, not chasing after so-called "greedy speculators."
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Where there is the necessary technical skill to move mountains, there is no need for the faith that moves mountains -anon-
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Hermit
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Re:knock knock Hermit
« Reply #24 on: 2008-06-28 12:26:55 » |
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[Fritz] If Alberta gets muzzles by the climate lobby soon, I think it will be the turning point for North America and then I would concede Supply rules.
[Hermit] Alberta is a pipedream. Even if the ecoaware will likely be blamed for it not reaching its alleged "potential" - ever. Which they likely will be. Tar sand is not oil. It has to be strip mined (which uses lots of oil), separated by flotation on water (which pollutes the water), and then cracked to produce an oil substitute. In-ground conversion has been proposed, but so far the energy required has been greater than the energy required by strip mining, although in tests it has been supplied from natural gas and in theory could be supplied by nuclear power.
[Hermit] The reality is that Canada does not have:- the gas left to implement any of the extraction systems advocated for the tar sands without ceasing gas exports.
- sufficient gas to extract a significant fraction of the tar sands even if they stop pumping natural gas southwards (which the US would likely regard as an act of war).
- Sufficient water to implement any of the extraction systems advocated for the tar sands without ceasing water exports (which the US would again likely regard as an act of war).
[Hermit] In addition there is a major challenge that the extraction and processing of the tar sands to create the equivalent of a low grade crude will in the most optimistic scenario increase CO2 emissions some 5 times over harvesting the equivalent energy from oil.
[Hermit] Finally there is the fact that if the process were actually energy positive the tar sands could be extracted using a small percentage of the fuel produced by it - so the fact that it will use huge amounts of gas points to sleight of hand. Most likely the attainable energy numbers are hopelessly exaggerated and the process should really be viewed economically and ecologically as an inefficient way to convert joules from gas into low grade oil. Say to yourself twenty times, tar is not oil. Tar sands have proved more far more expensive to mine than coal (the energy density is far lower) and the extraction and cracking required to convert it into useable fuel has turned out to be more complex and expensive than coil-to-oil. The effective production ratio has been two barrels of oil consumed in production per barrel of oil produced. Which is why beneficiating coal with Hydrogen from gas as part of a liquification plant would probably be a better use of increasingly scarce resources even though we know (from South Africa's long experience with it) that the attainable cost of energy from coal liquification is horribly dependent on the cost of input energy. There the cost before taxes and interest of fuel produced through liquification seemed to remain about 25% higher than the cost of fuel produced from crude oil over a remarkably wide variation in cost per barrel. I see no reason whatsoever to think that Canada is ever going to do better than this with tar sands.
[John Fout (cited by Fritz)] The 1970s offer an excellent lesson for today. The 1970s disaster began when President Richard Nixon and Congress instituted price controls in an effort to mitigate soaring prices. This backfired dramatically. Shortages quickly sprang up, and Americans lined up around the block to fill their gas tanks.
President Jimmy Carter phased out some of those controls. Unfortunately, he couldn't resist the lure of taxing oil companies for windfall profit. None of these actions improved the price of petroleum.
[Hermit] Poor Carter, probably the smartest recent President, is blamed for a lot of things which were the direct result of Congressional incompetence, situational issues, treason (think Iran) and structural problems. Here is another example. Windfall taxes don't change the market, they change where investment is directed. More fundamentally, Presidents don't raise taxes, the house does.
[Hermit] What is fascinating to me is how the Republicans, having seen how Carter (and the Democrats) were screwed on performance factors, simply changed the way they were calculated and have had a free ride ever since despite the fact that if factors were calculated as they were in Carter's time, the miserable performance of the Republicans, including the sainted Reagan, would be put into their abysmal perspective.
[Fritz] You realize there might be a queue forming to see if Hermit might get it wrong just once
[Hermit] As I rely more on accounting than on accounts, I don't think I am going to be proved wrong anytime soon.
[Hermit] I see no actual information to make me suspect that my analysis is incorrect. The fact that many people with a limited comprehension of economics, even some economists, have blamed "speculation" (Jewish bankers and moneylenders were already being blamed for price increases in the 900s (even though they had gold based economies)) since before economics was invented does not validate these assertions. Regulating the market would help only if all producers and consumers were subject to the same regulations - which of course they are not, or in an environment which is decoupled from global costs, which of course is not true of either the producers or consumers.
[Hermit] My accounting can be validated as follows. The US uses about 20 Mbl/day or 6-7Gbl/year increasing by about 2% annually, produces some 11 Mbl/day decreasing by about 1% annually and has proved reserves of about 20Gbl (or only 4 years of supply were imports to cease). The U.S. uses some 60% of all the oil that is pumped in the world. Primary suppliers are; Canada, Saudi Arabia, Venezuela and Mexico all at about 1.5 Mbl/day (and Mexico declining rapidly). Global oil demand is increasing at about 6%/year, with the US, India and China being responsible for most of that. Since Bush took office, the US has acted to reduce global oil availability by about 2Mbl/day (Iraq and Africa) or about 2.5% of global production, and US production has declined by 8% (or around 4% of global supply) while global demand has increased by 6% per year (2% attributable to the US). Demand increases and supply reductions can be normalized using a simple arithmetic "shortfall" datum. As I have previously explained, the cost inelasticity of oil results in the cost increasing by about 20% for every 1% increase in demand. As anyone who can do arithmetic can validate, this is quite sufficient to account for all but around $15 of the increase in the cost of oil ($20 to $140/bl) in the same period (nearly 8 years). So all the effects of speculation likely is included in that unexplained $15 (less than 10% of the total) which must also include perceived security risks, refining capacity shortfalls, pipeline closures, changes in reserve intakes, etc. as well as estimation and rounding errors. Which is why I discount speculation as a significant factor in the oil price.
[Hermit] Measuring the price of oil in constant dollars (by using the 1%:20% ratio above) means that the the effect of the collapsing value of the dollar can be discounted in the above. Unfortunately, measuring the value of the dollar against a basket of currencies against oil shows the fact that the dollar is in freefall with the inflation rate in excess of 20% per year. And so far only about 1/3 of the settlement dollars "defrosted" by the US goverment's actions negating the value of the dollar as a settlement vehicle (e.g. through financial sanctions against Iran as well as through unrestrained inflation to pay for its military excesses) have been liquidated - at a time when the US cannot afford to redeem them.
Kindest Regards
Hermit
PS Again I recommend reading Kunstlers "The Long Emergency" as these issues are reasonably well covered there.
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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Re:knock knock Hermit
« Reply #25 on: 2009-11-12 16:27:42 » |
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Key oil figures were distorted by US pressure, says whistleblower
Exclusive: Watchdog's estimates of reserves inflated says top official
Source: The Guardian
Authors: Terry Macalister
Dated: 2009-11-09
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.
In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.
Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.
"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.
A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.
The IEA acknowledges the importance of its own figures, boasting on its website: "The IEA governments and industry from all across the globe have come to rely on the World Energy Outlook to provide a consistent basis on which they can formulate policies and design business plans."
The British government, among others, always uses the IEA statistics rather than any of its own to argue that there is little threat to long-term oil supplies.
The IEA said tonight that peak oil critics had often wrongly questioned the accuracy of its figures. A spokesman said it was unable to comment ahead of the 2009 report being released tomorrow.
John Hemming, the MP who chairs the all-party parliamentary group on peak oil and gas, said the revelations confirmed his suspicions that the IEA underplayed how quickly the world was running out and this had profound implications for British government energy policy.
He said he had also been contacted by some IEA officials unhappy with its lack of independent scepticism over predictions. "Reliance on IEA reports has been used to justify claims that oil and gas supplies will not peak before 2030. It is clear now that this will not be the case and the IEA figures cannot be relied on," said Hemming.
"This all gives an importance to the Copenhagen [climate change] talks and an urgent need for the UK to move faster towards a more sustainable [lower carbon] economy if it is to avoid severe economic dislocation," he added.
The IEA was established in 1974 after the oil crisis in an attempt to try to safeguard energy supplies to the west. The World Energy Outlook is produced annually under the control of the IEA's chief economist, Fatih Birol, who has defended the projections from earlier outside attack. Peak oil critics have often questioned the IEA figures.
But now IEA sources who have contacted the Guardian say that Birol has increasingly been facing questions about the figures inside the organisation.
Matt Simmons, a respected oil industry expert, has long questioned the decline rates and oil statistics provided by Saudi Arabia on its own fields. He has raised questions about whether peak oil is much closer than many have accepted.
A report by the UK Energy Research Centre (UKERC) last month said worldwide production of conventionally extracted oil could "peak" and go into terminal decline before 2020 – but that the government was not facing up to the risk. Steve Sorrell, chief author of the report, said forecasts suggesting oil production will not peak before 2030 were "at best optimistic and at worst implausible".
But as far back as 2004 there have been people making similar warnings. Colin Campbell, a former executive with Total of France told a conference: "If the real [oil reserve] figures were to come out there would be panic on the stock markets … in the end that would suit no one."
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With or without religion, you would have good people doing good things and evil people doing evil things. But for good people to do evil things, that takes religion. - Steven Weinberg, 1999
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