Wednesday, December 31, 2008

Prost!

Today is the last day of 2008. I believe history will look back at this year as the last year of the Golden Age. Or maybe that was 2007.

Last night, I spent some time surfing the internet, reading predictions for the year to come. And those who 'get it' are predicting that 2009 will be the year when our house of cards comes tumbling down. I thought we had more time. I thought we had years still -- I wasn't sure I would even live to see it. I thought wrong.

Howard Kunstler has published his predictions and if they are anywhere near as accurate as his predictions for 2008, 2009 is going to be a rough year -- one of many to come:

A consensus in the blogosphere says that the stock markets will rebound strongly during the first Obama months. This is possible just on the basis of pure "animal spirits," but the Obama Bounce will occur against a background of continued dismal business and financial news. It will appear to defy that news. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year. Meanwhile, jobs will vanish by the millions and companies will go bankrupt by the thousands, especially in the so-called service sector, and in all the suppliers of such, along with the landlords in all the malls and strip malls. The desolation will mount quickly and will be obvious in the empty storefronts and trash-filled parking lagoons. In the event, two things will become increasingly clear to the nation: that the consumer economy is dead, and that there is no more available credit of the kind that Americans are in the habit of enjoying.

We'll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything.
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as many other people have noted, the recent plunge in oil prices strongly implies future supply destruction, since so many planned oil projects have been suspended or cancelled because they are economic losers at $40-a-barrel (or even $70). Even projects well underway, such as Canadian tar sand production, have been scaled back or shut down because they don't make sense at current prices. Some of these other newer projects will now never get underway -- they have missed their window of opportunity with so much capital leaving the system -- and so the hope of offsetting very-near-future depletions in old giant oil fields looks dimmer and dimmer.Those depletions are very serious. For instance, Mexico's super-giant Cantarell oil field, the second-largest ever discovered after Saudi Arabia's Ghawar field, has shown a 30 percent depletion rate in the past year alone. (Pemex had forecast a 15 percent rate entering the year.) Cantarell provides over 60 percent of Mexico's total production, and Mexico is America's third largest source of imports -- just after Saudi Arabia (#2) and Canada (#1). Obviously, Mexico soon will lose its ability to export oil, and as that occurs, America is going to feel more than pinch -- more like a two-by-four upside the head. In short, remorseless depletion is underway and we are less likely now than even a year ago, to make up for it.

At some point, then, demand, even if slightly lower, will catch up with declining supply. My prediction for 2009 is that we will see two things occur, possibly at the same time: a resumption of rising prices, and spot shortages. I say this because the global economic fiasco is sure to produce geopolitical friction, and inasmuch as America has to import almost three-quarters of the oil we use, the prospect for trouble is great.
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I'll only venture to guess that we could see the start of serious inflation sometime in 2009. To some extent, all currencies are now free-falling together, some at slightly faster rates than others, but the situation of the US dollar is so grotesquely dire, and our structural imbalances so monumental, that it is hard to imagine that our currency will not win the international race to the bottom. Gold resumed its movement upward against the dollar a week before Christmas, and that may be an early sign. The government -- and anyone badly in debt -- benefits much more from inflation than deflation, so every effort will be made to avert the latter. The trouble lies in the government's dumb incapacity to control dangerous things that it sets in motion, so that an inflationary campaign to avoid compressive deflation can so easily lead to a fiasco of super or hyper inflation -- the kind that kills governments and turns societies into murderous monsters. I'll forecast the that the US dollar is worth 40 percent of its current value by next Christmas.

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The big theme for 2009 economically will be contraction. The end of the cheap energy era will announce itself as the end of conventional "growth" and the shrinking back of activity, wealth, and populations. Contraction will come as a great shock to a world of conventionally programmed economists. They will toil and sweat to account for it, and they will probably be wrong. Unfortunately, this contraction will do its work in unpleasant ways, driving down standards of living, shearing away hopes and expectations for a particular life of comfort, and introducing disorder to so many of the systems we have depended on for so long. People will starve, lose their homes, lose incomes and status, and lose the security of living in peaceful societies. It will become clear that the Long Emergency is underway.

My hope for the year, at least for my own society, is that we will transition away from being a nation of complacent, distracted, over-fed clowns, to become a purposeful and responsible people willing to put their shoulders to the wheel to get some things done. My motto for the new year: "no more crybabies!"

Even the more upbeat Rob Hopkins thinks we have turned the corner:

Thank you so much for all your support, comments and hard work during 2008, the year that, I think, will go down in history as the point when the Great Unravelling really began, and when the seeds of the Great Turning began to grow with phenomenal speed. What an extraordinary time to be alive. Sharon Astyk has made her predictions for 2009, my only prediction to add is that by the end of 2009, very few people, especially those in positions of authority, will still be talking about “when things get back to normal”.

And if that weren't bad enough, scientists the world over are saying that global warming is happening much faster than anyone thought possible. If we don't act now to curb emissions drastically, we will leave future generations a cooked planet:

Climate change is happening more rapidly than anyone thought possible, the German government’s expert, Hans Joachim Schellnhuber, warned in an interview. . . Schellnhuber warns that previous predictions about climate change and its catastrophic effects were too cautious and optimistic.

“In nearly all areas, the developments are occurring more quickly than it has been assumed up until now,” Schellnhuber told the Saarbruecker Zeitung newspaper in an interview published Monday, Dec. 29. “We are on our way to a destabilization of the world climate that has advanced much further than most people or their governments realize.”

This isn’t news to top climate scientists around the world (see Hadley Center: “Catastrophic” 5-7°C warming by 2100 on current emissions path) or even to top climate scientists in this country (see US Geological Survey stunner: Sea-level rise in 2100 will likely “substantially exceed” IPCC projections, SW faces “permanent drying”) and certainly not to people who follow the scientific literature, like Climate Progress readers (see Study: Water-vapor feedback is “strong and positive,” so we face “warming of several degrees Celsius”).

"For the Arctic, the global warming which has already occurred of 0.8 degrees Celsius has already stepped over the line, Schellnhuber said. If Greenland’s ice cap ice melts completely, water levels will rise by seven meters (23 feet).

“The current coastline will no longer exist, and that includes in Germany,” he said.

In order to stop global warming, global CO2 emissions would need to be halved by 2050. For industrial countries, that would mean a decrease of 80 to 90 percent. By 2020, this process has to be well underway."

As an antidote for all the pessimism, I do recommend Rob Hopkins. Rob offers a vision of how life could be -- happier, cleaner, more connected, more resilient -- but only if we begin now to design our descent from energy -- if we are proactive instead of reactive. So here's to a proactive new year -- Prost!

Sunday, December 7, 2008

The Story of Stuff

Annie Leonard's twenty minute film, The Story of Stuff, says what I've been trying to say but much more comprehensively and articulately than I ever could. One of the points she brought home quite well is that the true cost of an item is not paid by its purchaser.

I was thinking about this the other day. I was walking to work and I wanted to listen to the news so I popped into this Radio Shack to buy a radio. I found this cute little green radio for 4 dollars and 99 cents. I was standing there in line to buy this radio and I wondering how $4.99 could possibly capture the costs of making this radio and getting it to my hands. The metal was probably mined in South Africa, the petroleum was probably drilled in Iraq, the plastics were probably produced in China, and maybe the whole thing was assembled by some 15 year old in a maquiladora in Mexico. $4.99 wouldn’t even pay the rent for the shelf space it occupied until I came along, let alone part of the staff guy’s salary that helped me pick it out, or the multiple ocean cruises and truck rides pieces of this radio went on. That’s how I realized, I didn’t pay for the radio.

So, who did pay?

Well, these people paid with the loss of their natural resource base. These people paid with the loss of their clean air, with increasing asthma and cancer rates. Kids in the Congo paid with their future—30% of the kids in parts of the Congo now have had to drop out of school to mine coltan, a metal we need for our disposable electronics. These people even paid, by having to cover their own health insurance. All along this system, people pitched in so I could get this radio for $4.99. And none of these contributions are recorded in any accounts book. That is what I mean by the company owners externalize the true costs of production.


So how do we rectify this injustice? And if we do rectify this injustice, how would that affect our economy?

The second question is easier to answer than the first. If the price tags of goods on the shelf were to reflect their true cost to the earth, to the environment, and to the humans involved in their production, consumption would plummet. We would be forced to do as previous generations have done. We would have to plan and save and budget our hard-earned money before we made a major purchase. We wouldn't throw things away while they still had use in them. We would reuse, repair, and do without. We would take better care of our possessions and pass them down from generation to generation. We would be faced with 'hard times' and find that hard times weren't so hard after all.

The question remains -- how to get there. The public isn't going to clamour for higher prices. The government isn't going to force them upon unwilling voters. And corporations are the source of the inequity to begin with. Those who pay the real price -- the earth, the environment, the poor, the unborn generations -- are without voice.

I am but one person. I cannot change the world, but I can change myself. I can buy only that which I really need and when I do buy, buy that which is locally made whenever possible. I may not succeed in changing my bad habits overnight, but I can begin.

Friday, December 5, 2008

These are a Few of My Favorite Things

Too good not to share!

Old Fat Naked Women at The Righteous Mothers. Now you can eat those Christmas cookies with a clear conscience. You are not expanding your waist line, you are increasing your politicial clout!

And Playing for Change

Part of what is right with this world!!