Global economic situation for liveaboard cruising yachties

[Tcubed]

I believe what we need is a huge shift in our perception of our world.

If oil were to go to say, $1000 a barrel tomorrow I think we'd see some

real change overnight.

That 's right.

Cars would all be electric by the end of the year!

No they wouldn't.
Electricity prices would skyrocket, and you got to charge an electric car somewhere.
It's going to take a while to phase out fossil fuel generated electricity , even in best case scenarios.

If a barrel went to a 1000 $ overnight, what would happen is instant resurgence of bicycles, pedestrians, even horses.

You would also see pandemonium break out; food riots, lootings, collapse of industry, etc.
I do not doubt that eventually we will see 1000$/barrel oil, but it will be a gradual (though bumpy as hell) increase. Despite it being relatively gradual it will still be a very harsh test of humanity's ability to adapt quickly.

Electric cars nowadays is almost exactly the same thing as a gasoline car. The only difference is where the fossil fuels are getting burned.

Only once we are generating all our electricity using sustainable methods will the electric car be something truly laudable.

[Submarine Tom]

"No they wouldn't."

Of course they would because the incentive would be there.

Oil will reach $1000 eventually but it will be "Death by a million cuts".

Change will still be slow and oil will become even more elitist than it

already is. I think an interpalnetary war would bring us around a little.

Tom

[masalai]

But finite resources ALSO apply to money, and the endless production of "notes of exchange" (fiat money) is also a finite resource of constraint as excessive creation diminishes implied value in a valueless product...

TTT, I really appreciated your post 1768 but jeff ordained "You must spread some Reputation around before giving it to Tcubed again."
Boston, I was asked the question, and guess they were trying to drown me into shutting up leak too fast for that and just got drunk....
Subbie, I feel sheeple (humanity generally) is too stupid to make/implement any long term planning just do your own thing and survive in isolated peace if you can, but by all means make lots of noise before you go into comfortable seclusion....

http://www.gata.org/node/7947 "Russia cuts gold sale estimates, may sell only domestically" - - Yes - no - yes - no - some - domestically.... feeling out the market
http://www.gata.org/node/7946 "Morgan Chase may have a job for him when he gets out" - Thieves join thieves
http://www.theenergyreport.com/ bookmark this for your own regular reading - also comes as an email alert...
http://www.caseyresearch.com/displayGsd.php from Ed Steer "Russian Finance Minister Raise Gold Sale Issue Again" and do not forget the tail end links and snippets - good stuff
http://www.caseyresearch.com/displayCdd.php?id=262 "What Really Goes on When the House Convenes" The lead image should go in "Boat Jokes" - Talk about "pontificating penises"... The rest is worthy of a read too....

[Tcubed]

Of course they would because the incentive would be there.

Please explain the incentive part if the energy to charge the car is still coming from fossil fuel burning.

I'm going to presume for the moment that you mean that since in US (And Canada?) most electricity is actually generated by burning oil's close cousin, coal. So if a barrrel goes to 1000$ and coal stays the same , then yes the plug in car would become much cheaper.
However as all fossil fuels become increasingly scarce - and therefore more expensive- the electric car will only make sense if charging off of sustainably generated electricity as previously said.
_____________
And the thing with the hydrogen car;
A hydrogen car is an electric car.
No difference there.
The only difference is in how the energy is stored, one is a battery, the other is a fuel cell. Pros and cons that are interesting to discuss in maybe another thread.
Both require some external energy source for charging.

[masalai]

Because of
1) coal miners will up the price because of energy demand... Mining for coal is marginal now and a profit boost will be quickly implemented
2) The electric grid in USA and possibly Canada is ANCIENT and will fail if any more pressure is placed on the system, with catastrophic consequences...
3) Generating capacity is over-stressed as it is.... and to build new capacity is a 10 to 20 year process... Add the cost of major feeder/distribution power grid systems/controls...
4) Even to make/convert cars to efficiently use electricity will take about 10 years, and using what money (print it) as it will be valueless all too soon...
5) build smaller lighter designs for personal transport? Who How Where - - NO CHANCE - in the foreseeable future - the home tinkerer may have a chance if he/she can get parts...
6) Hydrogen??? WTF
The smaller 4 cylinder 4 stroke carburettor petrol engines vehicles may be able to use "producer gas" from Bostons' wood-chip supply, but there again trees will quickly become a rarity...
Equatorial/temperate regions not needing domestic heating/cooling may survive with PV solar panels and batteries for domestic survival with significantly reduced electric/electronic appliance demand... The biggest factor will be in the household to produce its own fresh food and make and store preserves (seal-able glass jars) of the surplus AND potable (drinkable) water as well as to irrigate the vegie gardens....

http://www.elliottwave.com/ezine/ind...ne_102909.html - of interest to some? book mark the link or subscribe as I may not post often...


Does anyone have any info on how the US Treasury auction went (Thursday NY time)

[masalai]

The Daily Reckining Australia has this, in part from its email service http://www.dailyreckoning.com.au/subscribe-dr/
""" From Dan Denning at Old Thalassa:
--The big story in markets today is going to be the US GDP number. It was up 3.5% in the third quarter, according to the U.S. Ministry of Commerce. We predict that everyone is going to use it to claim that the recovery is upon us and that stock markets did not get too far ahead of themselves after all. That's just what happened overnight in the States. And stocks rallied smartly.

--Don't believe the hype, though. The big problems in the economy—too much debt, too much leverage, too much government—are still there. They didn't go anywhere overnight. We'd suggest that getting sucked back into stocks now because of the US GDP figure is a very bad idea.

--Of course we could be wrong. Maybe stocks will go up another 20% from here. Or 30%. Or 50%. But it's not likely. It's more likely that the recession is over, but that the Depression has just begun.

--It's begun because what the US GDP numbers actually show is a private sector in full retreat as its income shrinks, its assets fall in value, and the cost of servicing debt rises. Into that terrible breach the public sector has stepped, armed with an arsenal of inefficient and stupid programs that give the illusion of economic activity but actually prevent the economy from liquidating excess capacity and bad debt (the two conditions required for a real recovery).

--So we're sorry to have to ruin your Friday making this point. But there are actually a couple of points we have to make with regard to US GDP to show that its effects on the Aussie market are not as benign as you might think. Just the opposite really.

--The GDP figures presage a massive increase in government spending in America and elsewhere. This debt binge is driving the public sector ever closer to its own reckoning with Ponzi Finance—where new debt barely covers the cost of interest and principal payments on old debt.

--But again, why so serious? Shouldn't we celebrate? U.S. GDP has contracted each of the last four quarters. We are not going to rain on the parade by trying to prove that it didn't grow. But the real question is whether the GDP figures show that the economy is recovering, or whether a quarter or two of government intervention can give the economy a healthy looking flush, while concealing the disease that is eating away at its insides.

--It all depends on what kind of recession we had. In a garden variety recession, businesses build up too much capacity in anticipation of consumer demand that never materialises or suddenly vanishes. Think of the U.S. housing boom. Its seeds were sown when homebuilders built way too many units in places like Nevada, California, and Florida.

--They failed to realise that soaring demand for these units was driven by the supply of cheap credit. When the credit dried up, so did the demand. And the homebuilders were left a massive over-supply of housing. The ones that survived had to liquidate inventory (land as well) at bargain prices.

--Excess productive capacity is exactly what gets liquidated in a normal recession. Inefficient producers of goods and services get booted from the marketplace. Inventories are worked down until they are in line with a lower level of demand. And then, maybe, the economy starts a new cycle.

--But what we have here, dear reader, is not a garden variety recession. While it's true that there is a huge amount of excess capacity in the world economy (hence wage deflation in the West), there is also another, more serious problem: too much private and household debt. That is what makes this, as others have written before, a balance sheet recession.

--You get a balance sheet recession when households and businesses must reduce the amount of debt they have. They "must" do this because cash flows aren't robust enough to service accumulated debt AND send little Timmy to private school (in the case of households). People have to cut back until expenses are less than income.

--Or (in the case of a business), they must cut back because the cash flow isn't robust enough to cover the interest and principal payments on existing debt AND finance the operating expenses of the business. Businesses have to shift back to investing in capital goods and new growth, rather than speculating in financial assets and paper wealth.

--There is no escaping a generation of accumulated debt. When the cost of debt begins to consume most of your free cash flow, well, sooner or later you have no free cash flow. There's nothing left. You're spending every last dollar maintaining your household, paying your mortgage, and putting gas in the car. This doesn't leave room for much else—unless someone gives you money to spend (aha!).

--For the last four quarters, American households have been reducing debt in order to get their financial house back in order. They are no longer borrowing against the equity in their house (because that equity is vanishing or has vanished) or spending their capital gains in stocks on a new TV (because those capital gains are smaller too). Instead, they have been de-leveraging.

--Did all that really change in just one short quarter? No. What happened in the last quarter is that the U.S. government gave people money, albeit indirectly. The Commerce Department reported that real personal consumption expenditures increased 3.4% in the quarter. They had declined by nearly one percent in the second quarter. So people spent money.

--But whose money, and on what?

--According to the Commerce Department, "Durable goods increased 22.3%, in contrast to a decrease of 5.6% in the second quarter. The third-quarter increase largely reflected motor vehicle purchases under the Consumer Assistance to Recycle and Save Act of 2009 (popularly called, 'Cash for Clunkers' Program)."

--All up, the Feds tells us that (see page seven) the "Cash for Clunkers" program added about 1.66% to third quarter GDP. Keep in mind that in September, car sales fell 40% from August levels. Either the program will have to be extended, or it's shot its one-time stimulus bolt. But what a bolt it was!

--Unless we're mistaken, however, about half the GDP growth came from one government program that's expiring and stopped working in September. Chuck in another half a percentage point due to the tax credit for new house buyers (sound familiar?), and another half point from the 7.9% increase in government spending—and you get your 3.5% GDP growth.

--That's it, then? The government pours billions of dollars into the real economy and trillions into the financial sector to support bankers, and all we get is more cars and more houses bought by people with credit provided by a government that doesn't have any? That's a recovery? That's the tipping point?

--Excuse our scepticism. It's not like household balance sheets improved that much in the last three months. In the very same glowing press release that announced the 3.5% growth, we learn that people had less disposable income in September, despite the rosy growth number. --"Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent." --That sounds like households—when they are not spending government money on houses and cars—are still cutting back. They're cutting back because there's no wage growth in the economy and no job growth. But there is still a lot of debt! --"What destroys individuals, ruins families, and fells nations is debt—or rather the inability to service debt, and the cultural ramifications that follow," writes Victor Davis Hanson. Attitudes to debt are both private and collective. And they tell you something about the people you are, or are becoming.

--Take classical Greece. Hanson writes that, "The difference between the 5th century BC and late 4th century BC Athens is debt-and not caused just by military expenditures or war; the claims on Athenian entitlements grew by the 350s, even as forced liturgies on the productive classes increased, even as the treasury emptied.

--"At Rome by the mid-3rd century AD the state was essentially bribing its own citizens to behave by expanding the bread and circuses dole, while tax avoidance became an art form, while the Roman state tried everything from price controls to inflating the coinage to meet services and pay public debts."

--Speaking of Rome, Barack Obama's pick to run America's National Endowent for the arts has recently said that, "Barack Obama is the most powerful writer since Julius Caesar." If that's the case, we suggest a new slogan to replace "Hope and Change" for the President: We came, we saw, we spent!

--- and from---

Eric Fry, checking in from Laguna Beach, California...
Your Daily Reckoning editors spent most of their waking hours yesterday traveling from one place to another...and only a small amount of their time watching the stock market fall.

While Bill Bonner muddied his Gucci loafers in the Andes, Joel Bowman jetted from Taipei to Sydney and Eric Fry (that's me) completed his reverse-commute from The Daily Reckoning's headquarters in Baltimore, Maryland to its outpost in Laguna Beach, California.

Collectively, therefore, your editors spent very little time trying to determine the "whys" and "wherefores" of yesterday's selloff. But don't be dismayed; they spent lots of time examining the "whys" and "wherefores" of yesterday's selloff...in advance of the fact. They've been wondering for weeks when the long-running rally on Wall Street might finally succumb to reality.

In other words, the unfolding correction is long overdue.

The economy has never been as robust as the resurgent stock market has been implying; and the resurgent stock market has never been as fundamentally valid as CNBC has been declaring. From all outward appearances - and most inward appearances - the economy still stinks, even though the stench may have dissipated somewhat. And yet, the S&P 500 Index has soared 60% off the March lows.

We aren't complaining about this "gift horse," but that doesn't mean we would stake our retirement on the stud fees this horse would provide. In fact, we'd imagine that this ol' codger wouldn't survive more than one or two rolls in the hay. It is not a virile, young stallion. It is a glue horse. The S&P sells for about 140 times ACTUAL earnings. Sure, next year's earnings will be better, but probably not good enough to justify current prices...at least that's our guess.

Happily, US stocks are not the only game in town. In today's column, Chris Mayer, editor of Mayer's Special Situations, lays out a VERY compelling case for investing in the emerging markets. The thought is not an original one, but the rationale is. Please check out Chris' column below...

[Editor's Note: Bill Bonner & Lila Rajiva's new book, Mobs, Messiahs and Markets, is now available in Australia from The Educated Investor. Order here for a 15% discount.] """

[Submarine Tom]

Could you all make your posts a little longer?

[hoytedow]

Originally Posted by Tcubed

That 's right.

No they wouldn't.
Electricity prices would skyrocket, and you got to charge an electric car somewhere.
It's going to take a while to phase out fossil fuel generated electricity , even in best case scenarios.

If a barrel went to a 1000 $ overnight, what would happen is instant resurgence of bicycles, pedestrians, even horses.

You would also see pandemonium break out; food riots, lootings, collapse of industry, etc.
I do not doubt that eventually we will see 1000$/barrel oil, but it will be a gradual (though bumpy as hell) increase. Despite it being relatively gradual it will still be a very harsh test of humanity's ability to adapt quickly.

Electric cars nowadays is almost exactly the same thing as a gasoline car. The only difference is where the fossil fuels are getting burned.

Only once we are generating all our electricity using sustainable methods will the electric car be something truly laudable.

I knew if I read your postings long enough, you would say something I agree with. Bueno!

[masalai]

Oh TTT, you credibility is ruined

Submarine Tom "Hi" - I cannot do the Japanese character for "yes" - I think that may be the brevity you seek?

http://www.moneymorning.com.au/ I enjoy this little free email service, lots of "spam" but easily avoidable of you can think laterally and the stories are full of poking cheeky fun at the main stream media cretins, but some objected, so subscribe if you like something with a touch of spice from down-under... I have not looked around the website carefully so what I read may only be available by email... (less spam too)...

http://www.gata.org/node/7948 "Hugo Salinas Price: It's time to end World War II" also in someone else's link too....
http://www.gata.org/node/7949 "A bit late, Barrick (Gold, not Obummer) aims for 'full leverage' to gold price"
http://www.gata.org/node/7950 "Antal Fekete explains free coinage of gold -- to New Zealanders" --- --- He may need a translation to baaa baaaa baaa language sent in duplicate

[masalai]

Does anyone have any info on how the US Treasury auction went (Thursday NY time)

All over the mass-hysteria news in OZ, how the USA is saved by some witchcraft worked by the fraud squad (The FED and Associates) - WTF - I guess the answer will be felt on Monday when reality hits... All Gold has been seized and a new currency issued "The Super dollar", and the second coming will be scheduled, and all the dignitaries and film and other stars will be present expecting to be blessed

[Boston]

T while I agree that just burning a different fossil fuel is hardly the answer it is possible, although industry will fight it the whole way, to controll emissions far more efficiently at the power plant than in each individuals car. Basically even a coal fired plant can be cleaner to produce a similar energy than a car, even if its still burning dirty coal.

thing is electricity is all around us and its clean,er
depending on how you generate it
the technology to use it exists now and its cheap
the chevy volt being a good example of a car that uses twenty year old technology and still outperforms most hybrids today with all there tecno crap included

B

[Boston]

what Im starting to look into now is where to plan to build
Im getting quite a pile of lumber ready
white oak, teak, cherry, I need poplar and more of everything
I should start looking for cheep land near a launch point before this pile gets expensive to ship out of here
I'm just a poor carpenter so it needs to be cheap cheap
I just want a small cabin and a boat house to come home to but Im sure I cant afford it to actually be right on the water
I want an inland water way with access to the ocean
have been thinking of something along the Columbia river basin in the pacific northwest. Other than the death trap of the Columbia bar it would give me access to Seattle and the inside passage

anyone live along the columbia river in here

[Submarine Tom]

Tcubed (who should actually be 3T unless you are multiplying with yourself)

What I said was "If we can't learn to stop burning fossil fuels".

Coal is still a fossil fuel. Here in Canada (my home), we are fortunate to

have a fair supply of hydro generated electricity and public pressure is

slowing coal fired generators.

Enjoy the ride!

Tom

[masalai]

http://www.caseyresearch.com/displayGsd.php "Russia Cuts Gold Sale Estimates, May Sell Only Domestically" was covered yesterday from GATA - is economic news not happening I dont expect "economic" sources to comment on Motherhood statements by the President - except to ask, "what has he been instructed to say for what forthcoming disaster that all will blame him for"..... The US$ value of gold went up by US$15 in the 24 hours, but where is the comment on the Treasury auction of Thursday As usual the Gold price was generally UNMOVED to slightly down in AU$ terms because of the onward and continuing devaluing of the US$....

[masalai]

http://financialsense.com/Experts/ewave/2009/1030.html -- -- More pain to come with the major decline imminent...
http://financialsense.com/editorials...2009/1030.html -- -- A history lesson on money and its evolution (or should that be devolution)
http://financialsense.com/stormwatch...2009/1030.html "The Executive Branch and the Roots of Order"
http://financialsense.com/fsu/editor...2009/1030.html "Fairy Tale Antidotes - - Springboard for Garnering Gains"
http://financialsense.com/fsu/editor...2009/1030.html "Hair of the Dog"
http://financialsense.com/fsu/editor...2009/1030.html "Gold: Cause For Alarm"
http://financialsense.com/fsu/editor...2009/1030.html "Our Enemy the State - - A Tribute to Mr. Raymond Crotty 1925-1994 - - Economics Lecturer Trinity College Dublin, Ireland."
http://financialsense.com/fsu/editor...2009/1030.html "Stimulus Nation" -- -- On reading the title, all I could think of was the "masturbating lizard" Joke http://www.boatdesign.net/forums/ope...14472-205.html post#3065 - The thought of everyone "doing their duty for the country" in a mass masturbatory exercise....... Actually the essay is probably quite serious but any semblance of sanity after that joke is nigh impossible....