Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (21215)	7/6/2009 10:21:44 PM
From: carranza2	Respond to of 71431

Thanks, will check Orlov.

To: gregor_us who wrote (21215)	7/15/2009 8:36:06 PM
From: NOW	Respond to of 71431

he seems really quite brilliant: turns most things you think you know upside down

To: gregor_us who wrote (21215)	7/24/2009 9:20:25 AM
From: carranza2	3 Recommendations Read Replies (1) \| Respond to of 71431

Orlov was intriguing but unconvincing. I think his particular experience may have led him to a faulty analogy between collapse in the USSR and the USA. He forgets that the energy infrastructure in the USSR was collapsing at a time when no alternatives were available. The fact that the USSR was able, post-collapse, to ramp up its energy production suggests that its collapse was not inevitable but more a function of mismanagement than true energy scarcity. The US has readily available alternatives e.g., coal and NG, and the means to make them available. I don't think these were options for the USSR. The key to the USSR's problems was mismanagement, IMO. If we do have an energy collapse similar to that of the Soviets, yes, his dire scenario is credible. However, I don't think this is a particularly novel insight.

To: gregor_us who wrote (21215)	7/24/2009 5:03:43 PM
From: axial	Respond to of 71431

Each form of energy is comprised of two different equations comprised of a shifting internal dynamic, a changing external dynamic, and their relationships to each other: the raw cost of a kilojoule. For purposes of discussion, we try to simplify, especially on the 'net where most people want a "sight bite", and not much more. Even the best in-depth analysis is only an approximation of a situation at a moment in time. How many old analyses have we read, where the reality turned out to be different than the forecast? Orlov's analysis is thoughtful but incomplete, IMO. Most rational commentators accept the theory of Peak Oil: if we're not exactly "there", we're close. Many have sensibly noted that Peak Oil is only important as a cost, when known alternatives exist: it's been Cheap Oil, but it won't be, any more. From that, it follows logically that we get into adaptive responses, even while fossil fuels still exist; we start trading the cost of a kilojoule between alternatives: solar; fossil variants like natural gas, coal and crude; nuclear; wind; tidal, and so on. In practice that means the equations become even more complex, as energy costs rise. Complexity and opacity defeats anything but best-guess analysis. Personally, my response to complexity (now that we're entering the stage of adaptive response) is to reduce the matter to the cost of a kilojoule: that's what mankind will be dealing with as various forms of energy compete, into the future. Those that have, will get: those whose economic health is strongest will be able to support the added cost of energy, over the next century. In the end, no one will escape the need to produce alt energy. Shifting events will introduce short-term deviations; for instance, recent discoveries and expansion of natural gas reserves will alleviate some US energy problems for a decade, but not much longer: not by themselves. The predatory effect of Enron-type financial practices is raising the cost of crude to end-users; this sword cuts both ways. High costs promote demand destruction but also impair true adaptation, by making it more expensive. Long-run it's subtractive tax, in that excessive costs are not recycled into productive output in energy or industry. This is typical of recent financial "innovations" with destructive effects at a critical time. The kilojoule has a global price. Nuclear has a price range per megawatt; so does solar, wind, and crude; they will all compete. If all buyers are in a deflationary environment, their ability to buy is relative, as it is in an inflationary environment. What will be the effect of either 'flation on the cost of a kilojoule? Inflation/deflation will have a serial effect in the adaptive phase: economic impairment means poorer adaptation, which means faster economic degradation. In the long run, what matters is a nation's ability to adapt. That will have a cost, and those nations that can pay it will survive, but not without some pain. For heating, cooling, and motive power, the kilojoule is essential. If money is the water of life, energy is the fire. All three are tied together inextricably. Those nations that can't pay the cost of adaptation, and the emerging cost of a kilojoule will fail. Jim