Say Anything Blog

James Haven, brother of Angelina Jolie, and son of John Voight spills his guts:

Haven describes as “one of the saddest things in my life.”

“Try to imagine. You go to Beverly Hills High, one of the wealthiest high schools in the nation. Even the cheapest car that anyone has is brand new,” he resentfully recalls. “All my friends are well off. I have a movie-star father and no car. It was debilitating. I did not go to the prom because I felt uncomfortable that Dad would have to drive me. It’s an embarrassing thing.”

This made LOL!

From Paul Van Eeden:

Zhou was quoted as saying: “… many people say that foreign exchange reserves in China are large enough. We do not intend to go further and accumulate reserves.”

China’s vast and rapidly growing foreign exchange reserves accumulate because China does not sell the surplus US dollars that it receives from its trade surplus with the United States into foreign exchange markets, but buys US debt with them instead. Under normal circumstances China would have sold its surplus US dollars and not accumulated such a vast foreign exchange reserve; however, the United States’ trade deficit is so large that if China, Japan and Europe were to sell their trade dollars into foreign exchange markets the dollar exchange rate would collapse.

Last year the Organization for Economic Co-operation and Development (OECD) determined that the dollar had to fall by 35% to 50% in order to balance the US current account gap. My calculations of the dollar’s over-valuation based on the gold price also suggest that the dollar has to fall by about 35%.

China does not have to sell any of its existing dollar reserves to precipitate a decline in the dollar—all it has to do is stop accumulating dollars. The current US trade deficit with that country alone is running over $20 billion per month, and that is not an insignificant amount. If China stopped accumulating foreign reserves those dollars would be sold and I expect that when that happens, the dollar will fall.

Other Asian countries that helped prop up the dollar by accumulating foreign reserves may follow China and start selling their surplus trade dollars as well.

The ramifications are that there will subsequently be less demand for US Treasuries and agency debt. That will push US interest rates higher regardless of what the Fed says, and higher interest rates will be detrimental to US economic growth and US equities. One would expect that higher US interest rates would be positive for the dollar, but with surplus trade dollars hitting foreign exchange markets we can expect to see the dollar fall in tandem with rising interest rates.

Dale Wetzel reports:

Gov. John Hoeven wanted the Legislature to boost North Dakota’s general fund spending by 24 percent. So far, for its majority Republicans, that was just a place to start the bidding. 

When lawmakers return to the Capitol on Wednesday after a midsession break, they’ll have to find a way to reconcile some of the mammoth spending increases and tax cuts that wriggled through the House and Senate in the session’s first 32 days.

So far, the two chambers have endorsed proposals that would boost state general fund spending to $2.68 billion over two years, which is an increase of almost $692 million, or 34.8 percent, from current spending levels. Hoeven’s budget proposal suggested a mere $2.47 billion.

Lawmakers have also approved tax cuts, exemptions and other breaks that would reduce state general fund revenue collections by $201 million over two years, including a sales tax exemption for heating fuels, an income tax cut for married couples, tax reductions for pull tabs and bingo cards, and an overhaul of state oil taxes.

This is insanity! The taxpayers paid in $500 million too much and the legislature comes in with $692 million.  I haven’t seen too much legislation that is impresive on the spending side or the tax cut side.  Where has this money been diverted to?  I guess mostly to existing government programs that are always in dire need of something! Whatever.

There are two choices for the state; spend the excess tax revenue or return it to the taxpayer. I think the surplus should be returned to those who paid it.  After all it is their money in the first place. However with our modern complex tax system, where everything is taxed, at different rates and levels I don’t see a “fair” way to return the excess tax revenue to those who paid without losing a large percentage of it figuring out who gets what, and how much.

So the debate should and I think already has shifted to “What are we going to spend the money on?” Every state agency has asked for an increase to their budgets, or money for deferred maintenance or improvement projects. 

Many of these requests are probably warranted, but in these “boom times” I think ND is creating a budget that it cannot maintain in the future.

What I would like to seen done with the state surplus is a proposal that would benefit all the residents of North Dakota.  A proposal where it doesn’t matter if you own your own house, or rent an apartment, and it doesn’t matter if you have 10 kids or none, or if you make a million dollars or none. What kind of proposal could that be?

I would like to invest the surplus in wind energy production.  It’s no secret that our appetite for energy is growing and our means of production are diminishing.  North Dakota could be the leader in energy production and the main supplier of electricity for the rest of the nation, and export some to Canada as well. North Dakota ranks first in the union for wind energy production potential.  Electricity is the future in clean energy. 

So what’s the problem?  The problem is infrastructure. North Dakota doesn’t have enough of it.  Once electricity is created it has to be used, or it has to be transported where it can be used.  The state needs to build the infrastructure where it is possible to send mass quantities of electricity out of state.  Curently if we do produce it we are limited to the amount that can be sent out.

Secondly the state needs to partner with a company like MDU where farmers (who never have enough money) can generate electricity with a wind turbine on their land and sell it to MDU, which in turn can sell it to their customers or new customers.  The legislature should be working on a program where the number of wind turbines vastly increases.  Whether that is in tax breaks, subsidies, I am not sure. 

If the state can jumpstart this industry, it will add high paying jobs, and tax revenue for the state.  With the new tax revenue is when the legislature should consider some more appropriate program budget increases and additional tax breaks for ND residents.

This is a quote from Peter Shiff’s weekly column.

On Tuesday of this week we learned that in 2006 Americans racked up a record $763.6 Billion trade deficit, and that two Australian mining firms, Rio Tinto and BHP Billiton, were each contemplating $40 billion bids for U.S. aluminum giant Alcoa.  Not only did Wall Street and the media fail to grasp the negative significance of each story, but they also failed to see the strong connection between the two.

By running huge trade deficits, Americans are literally selling cows to buy milk.  Alcoa is just the latest heifer headed for the auction block.  In other words, because we do not trade enough domestically manufactured consumer goods for those we import, we are making up the difference with our assets instead.  To the extent that foreigners are tiring of buying more Treasuries and mortgage-backed securities, they are casting their eyes on industrial assets.  Last year’s trade deficit alone provided foreigners with enough dollars to buy twenty Alcoa’s.

Many Americas do not see the downside of such a transfer.  In fact, they might even see it as a benefit, as shares of Alcoa would likely rise sharply.  However, in exchange for losing one of the world’s preeminent mining companies to Australia, Americans would only be compensated by the return of their paper dollars. Future profits that would have been earned by Americans will now be earned by Australians instead.

We have seen this type of action in the past the UAE trying to buy some east coast ports and the Chinese trying to buy an oil company.  If the government steps in and stops this sale from going through like the others foreign governments will no longer be as willing to hold our dollars let alone extend the 2 billion dollars that we require daily to keep our economy going.

hey Rob -

I have taken some shots at the Dakota Beacon because I don’t agree with some most of the content it contains.  However someone or some people in Bismarck (I don’t know who) is defacing the cover of January issues in pen with slogans like “For close minded right wing kooks” or something like that is what I heard.

This is wrong, and I would like to see it stop.  There are a lot of publications available for free in the area that people such as yourself work hard to put out and I don’t want to see this practice escalate.  I am asking for post on your main page to hopefully reach the purpertraitor(s) to get them to stop.  I have spoken against the Beacon Publication both on your site and Steve Cates site, so I would like to show the people out there that most of us that attach the publication, do so in forums like this but not in the manner I described above.

Can we work together on this?

Troy Pineri

Here is a new strategy proposed by D. Quinn:

The investment I’d like to propose to you is a simple one and an obvious one,

though, to the best of my knowledge, no one else in the world has thought of it. Here it is: Legalize drugs temporarily --for three years, let’s say. You frame a law that has a self-destruct clause written into it. In other words, you don’t end the war on drugs, you just declare a three-year truce and see what happens.

This strategy would, I believe, offer the best of both sides of the argument. In three years, the international drug trade would have dried up and blown away. The kingpins of the trade would still be there --they’re billionaires, after all. But all the hundreds of thousands of low-level links would have been forced to seek other forms of occupation. Similarly, in three years, the growers around the world who currently supply our appetite for drugs would have been forced into other activities.

So: we have three years to study the effects of legalizing drugs. Does the problem get worse, get better, or stay the same? If the problem seems to be getting better, all we have to do is extend the truce for three more years. If the problem gets worse, we don’t have to do anything: at the end of the three years, the truce lapses automatically.

And note this: the investment made in this plan wouldn’t represent a total loss even if we ultimately decided to let the truce lapse. This is because we’d be able to resume the war on drugs on a more favorable footing than we have right now. If we decided to let the truce lapse, then of course drug manufacture in this country would cease . . . but it would take some considerable time to restart it elsewhere in the world. The international drug trade would have to be reinvented almost from scratch --and this time we’d be ready for it.

In the Whiskey & Gunpowder newsletter we read that the energy density of ethanol is less than petroleum, as

“The standard, accepted measurement of energy density for ethanol is 26.8 megajoules per kilogram. This clearly compares unfavorably with the energy density of gasoline at 45 megajoules per kilogram.”

So, you get a lot less energy per unit of weight.  Worse, “The energy return on energy investment (EROEI) of ethanol” is “break-even at best”, because oil just gets pumped out of the ground at minimal energy expense.

“So will the U.S. really wind up running its motorized culture on corn-based ethanol? According to Cornell researcher David Pimental, if the entire U.S. grain crop were converted to ethanol, it would satisfy about 15% of U.S. automotive fuel needs. The answer is no.”

But that doesn’t mean we won’t try, as seemingly evidenced by Bloomberg when they report that the price of corn has surged to a 10-year high, “sparking rallies for soybeans and wheat, after the U.S. forecast the smallest global supplies in 29 years as record demand for ethanol uses up more of the crop.”

Contrary to popular opinion, Charles Darwin did not originate the idea of evolution. By the middle of the 19th century, the mere fact of evolution had been around for a long time, and most thinkers of the time were perfectly content to leave it at that. The absence of a theory to explain evolutionary change didn’t trouble them, wasn’t experienced as a pressure, as it was by Darwin. He knew there had to be some intelligible mechanism or dynamic that would account for it, and this is what he went looking for--with well known results. In his Origin of Species, he wasn’t announcing the fact of evolution, he was trying to make sense of the fact.

In my mid-twenties I began to feel a similar sort of pressure. The modern Age of Anxiety was just being born under the shadows of rampant population growth, global environmental destruction, and the ever-present possibility of nuclear holocaust. I was surprised that most people seemed perfectly reconciled to these things, as if to say, Well, what else would you expect?

Ted Kaczynski , the Unabomber, seemed to think he was saying something terribly original in his 1995 diatribe blaming it all on the Industrial Revolution, but this was just the conventional wisdom of 1962. To my mind, blaming all our problems on the Industrial Revolution is like blaming Hamlet’s downfall on his fencing match with Laertes. To understand why Hamlet ended up badly, you can’t just look at the last ten minutes of his story, you have to go right back to the beginning of it, and I felt a pressure to do the same with us.

The beginning of our story isn’t difficult to find. Every schoolchild learns that our story began about 10,000 years ago with the Agricultural Revolution. This isn’t the beginning of the human story, but it’s certainly the beginning of our story, for it was from this beginning that all the wonders and horrors of our civilization grew.

Everyone is vaguely aware that there have been two ways of looking at the Agricultural Revolution within our culture, two contradictory stories about its significance. According to the standard version--the version taught in our schools--humans had been around for a long time, three or four million years , living a miserable and shiftless sort of life for most of that time, accomplishing nothing and getting nowhere. But then about 10,000 years ago it finally dawned on folks living in the Fertile Crescent that they didn’t have to live like beavers and buzzards, making do with whatever food happened to come along; they could cultivate their own food and thus control their own destiny and well being. Agriculture made it possible for them to give up the nomadic life for the life of farming villagers. Village life encouraged occupational specialization and the advancement of technology on all fronts. Before long, villages became towns, and towns became cities, kingdoms, and empires. Trade connections, elaborate social and economic systems, and literacy soon followed, and there we went. All these advances were based on--and impossible without--agriculture, manifestly humanity’s greatest blessing.

The other story, a much older one, is tucked away in a different corner of our cultural heritage. It too is set in the Fertile Crescent and tells a tale of the birth of agriculture, but in this telling agriculture isn’t represented as a blessing but rather as a terrible punishment for a crime whose exact nature has always profoundly puzzled us. I’m referring, of course, to the story told in the third chapter of Genesis, the Fall of Adam.

Both these stories are known to virtually everyone who grows up in our culture, including every historian, philosopher, theologian, and anthropologist. But like most thinkers of the mid-19th century, who were content with the mere fact of evolution and felt no pressure to explain it, our historians, philosophers, theologians, and anthropologists seem perfectly content to live with these two contradictory stories. The conflict is manifest but, for them, demands no explanation.

For me, it did. As evolution demanded of Darwin a theory that would make sense of it, the story in Genesis demanded of me a theory that would make sense of it.

There have traditionally been two approaches to Adam’s crime and punishment . The text tells us Adam was invited to partake of every tree in the garden of Eden except one, mysteriously called the tree of the knowledge of good and evil. As we know, Adam succumbed to the temptation to sample this fruit. In one approach, the crime is viewed as simple disobedience, in which case the interdiction of the knowledge of good and evil seems entirely arbitrary. God might just as well have interdicted the knowledge of war and peace or the knowledge of pride and prejudice. The point was simply to forbid Adam something in order to test his loyalty. Under this approach, Adam’s punishment--banishment from Eden to live by the sweat of his brow as a farmer--was just a spanking; it doesn’t “fit the crime” in any particular way. He would have received this punishment no matter what test he had failed.

The second approach tries to make some connection between Adam’s crime and his punishment. Under this approach, Eden is viewed as a metaphor for the state of innocence, which is lost when Adam gains the knowledge of good and evil. This makes sense, but only if the knowledge of good and evil is understood as a metaphor for knowledge that destroys innocence. So, with roughly equivalent metaphors at either end, the story is reduced to a banal tautology: Adam lost his innocence by gaining knowledge that destroyed his innocence.

The story of the Fall is coupled with a second that is equally famous and equally baffling, that of Cain and Abel. As conventionally understood, these two brothers were literal individuals, the elder, Cain, a tiller of the soil, and the younger, Abel, a herder. The improbability that two members of the same family would embrace antithetical lifestyles should tip us off to the fact that these were not individuals but emblematic figures, just as Adam was (Adam merely being the Hebrew word for Man).

If we understand these as emblematic figures, then the story begins to make sense. The firstborn of agriculture was indeed the tiller of the soil, as Cain was said to be the firstborn of Adam. This is an undoubted historical fact. The domestication of plants is a process that begins the day you plant your first seed, but the domestication of animals takes generations. So the herder Abel was indeed the second-born--by centuries, if not millennia (another reason to be skeptical of the notion that Cain and Abel were literally second-generation brothers).

A further reason for skepticism on this point is the fact that the ancient farmers and herders of the Near East occupied adjacent but distinctly different regions. Farming was the occupation of the Caucasian inhabitants of the Fertile Crescent. Herding was the occupation of the Semitic inhabitants of the Arabian peninsula to the south.

Another piece of background that needs to be understood is that in very ancient times farmers and herders had radically different lifestyles. Farmers were by the very nature of their work settled villagers; but herders (by the very nature of their work) were nomads, just as many present-day herding peoples are. The herding lifestyle was in fact closer to the hunting-gathering lifestyle than it was to the farming lifestyle.

As the farming peoples of the north expanded, it was inevitable that they would confront their Semitic herding neighbors to the south, perhaps below what is now Iraq--with the predictable result. As they have done from the beginning to the present moment, the tillers of the soil needed more land to put to the plow, and as they’ve done from the beginning to the present moment, they took it.

As the Semites saw it (and it is of course their version of the story that we have), the tiller of the soil Cain was watering his fields with the blood of Abel the herder.

The fact that the version we have is the Semitic version explains the central mystery of the story, which is why God rejected Cain’s gift but accepted Abel’s. Naturally, this is the way the Semites would see it. In essence, the story says, “God is on our side. God loves us and the way we live but hates the tillers of the soil and the way they live.”

With these provisional understandings in place, I was ready to offer a theory about the first part of the story, the Fall of Adam. What the Semitic authors knew was only the present fact that their brothers from the north were encroaching on them in a murderous way. They hadn’t been physically present in the Fertile Crescent to witness the actual birth of agriculture, and in fact this was an event that had occurred hundreds of years earlier. In their story of the Fall, they were reconstructing an ancient event, not reporting a recent one. All that was clear to them was that some strange development had saddled their brothers to the north with a laborious lifestyle and had turned them into murderers, and this had to be a moral or spiritual catastrophe of some kind.

What they observed about their brothers to the north was this peculiarity. They seemed to have the strange idea that they knew how to run the world as well as God. This is what marks them as our cultural ancestors. As we go about our business of running the world, we have no doubt that we’re doing as good a job as God, if not better. Obviously God put a lot of creatures in the world that are quite superfluous and even pernicious, and we’re quite at liberty to get rid of them. We know where the rivers should run, where the swamps should be drained, where the forests should be razed, where the mountains should be leveled, where the plains should be scoured, where the rain should fall. To us, it’s perfectly obvious that we have this knowledge.

In fact, to the authors of the stories in Genesis, it looked as if their brothers to the north had the bizarre idea that they had eaten at God’s own tree of wisdom and had gained the very knowledge God uses to rule the world. And what knowledge is this? It’s a knowledge that only God is competent to use, the knowledge that every single action God might take--no matter what it is, no matter how large or small--is good for one but evil for another. If a fox is stalking a pheasant, it’s in the hands of God whether she will catch the pheasant or the pheasant will escape. If God gives the fox the pheasant, then this is good for the fox but evil for the pheasant. If God allows the pheasant to escape, then this is good for the pheasant but evil for the fox. There’s no outcome that can be good for both. The same is true in every area of the world’s governance. If God allows the valley to be flooded, then this is good for some but evil for others. If God holds back the flood then this too will be good for some but evil for others.

Decisions of this kind are clearly at the very root of what it means to rule the world, and the wisdom to make them cannot possibly belong to any mere creature, for any creature making such decisions would inevitably say, “I will make every choice so that it’s good for me but evil for all others.” And of course this is precisely how the agriculturalist operates, saying, “If I scour this plain to plant food for myself, then this will be evil for all the creatures that inhabit the plain, but it’ll be good for me. If I raze this forest to plant food for myself, then this will be evil for all the creatures that inhabit the forest, but it’ll be good for me.”

What the authors of the stories in Genesis perceived was that their brothers to the north had taken into their own hands the rule of the world; they had usurped the role of God. Those who let God run the world and take the food that he’s planted for them have an easy life. But those who want to run the world themselves must necessarily plant their own food, must necessarily make their living by the sweat of the brow. As this makes plain, agriculture was not the crime itself but rather the result of the crime, the punishment that must inevitably follow such a crime. It was wielding the knowledge of good and evil that had turned their brothers in the north into farmers--and into murderers.

But these were not the only consequences to be expected from Adam’s act. The fruit of the tree of the knowledge of good and evil is harmless to God but poison to Man. It seemed to these authors that usurping God’s role in the world would be the very death of Man.

And so it seemed to me when I finally worked all this out in the late 1970s. This investigation of the stories in Genesis was not, for me, an exercise in biblical exegesis. I’d gone looking for a way to understand how in the world we’d brought ourselves face to face with death in such a relatively short period of time--10,000 years, a mere eyeblink in the lifespan of our species--and had found it in an ancient story that we long ago adopted as our own and that remained stubbornly mysterious to us as long as we insisted on reading it as if it were our own. When examined from a point of view not our own, however, it ceased to be mysterious and delivered up a meaning that not only would have made sense to a beleaguered herding people 8,000 years ago but that would also make sense to the beleaguered people of the late twentieth century.

As far as I was concerned, the authors of this story had gotten it right. In spite of the terrible mess we’ve made of it, we do think we can run the world, and if we continue to think this, it is going to be the death of us.

In case it isn’t evident, I should add that of course my reading of Genesis is only a theory. This is what creationists say of evolution, that it’s “only a theory, it hasn’t been proved,” as though this in itself is grounds for dismissal. This misrepresents the point of formulating a theory, which is to make sense of the evidence. So far, Darwin’s theory remains the very best way we’ve found to make sense of the evidence, and my own theory has to be evaluated in the same way. Does it make sense of the evidence--the stories themselves--and does it make more sense than any other theory?

This is an excerpt of a speech delivered October 18, 2000, as a Fleming Lecture in Religion, Southwestern University, Georgetown, Texas by Daniel Quinn

Peter Schiff writes in his latest newsletter.

My guess is that Bernanke and Paulson kowtowed to America’s biggest supplier and largest lender, and pleaded for them to keep the goods and credit flowing.  Although it didn’t take place in Macy’s window, the affair may qualify as the “mother of all butt kissings.”

The last thing that Paulson and Bernanke want is for the world to recognize the financial precipice upon which the U.S. economy now teeters, and China’s unique ability to push it over the edge.

It is absurd to imagine that they would actually demand that China revalue its currency.  Think about what such a request actually implies.  It means that Americans would pay higher prices for the goods they buy and higher interest rates on the money they borrow.  Does anyone really believe that American politicians are in China to demand higher prices and higher interest rates for American consumers?…

Think about today’s unchanged reading on November CPI, or Wednesday’s 1% gain in November retail sales.  What would happen to the CPI and retail sales if both prices and interest rates surged?  The biggest factor boosting retail sales was the 6.5% gain in consumer electronics.  Does anyone want to guess where most of that stuff was made, or how it was paid for?  How many big screen TVs could Americans “afford” to buy on credit if both prices and interest rates went up by 25% or more?  As usual, the media interpreted the recent retail sales figures as evidence of a strengthening U.S. economy.  Nothing could be further from the truth.  Such sales merely reflect the strength of the economies that produced the goods in the first place, not the economy of the nation that went deeper into debt to consume them.

Ironically, during the very week that Paulson and Bernanke were trying to convince the Chinese to keep buying dollars, Alan Greenspan was making a good case why the rest of us should sell.  The former Fed chairman, adding his voice to that of his predecessor Paul Volcker, predicted that the dollar’s recent slide would continue for years to come and cautioned that it would be foolish for anyone to keep all of their money in just one currency. 

From my perspective it would be foolish for anyone to keep any money in U.S. dollars.  If the Chinese come to their senses and pull all that American wool out of their eyes, then look out below.

I found this crazy story today. 

A Maryland native who was fired from a police chief job in Larimore, North Dakota, says racism was a key reason he was dismissed....Larimore residents complained earlier that he was too aggressive in handing out tickets. He was fired after about four-and-one-half months....A Grand Forks man is facing an attempted murder charge of ramming Jones’ patrol car.

Jeez.. He was so aggressive at handing out tickets that people were conspiring to kill him?  How many tickets is aggressive?  I am guessing that Larimore doesn’t have a large population, and handing out excessive tickets was the only thing he could do to fill his time?

Rep Bartlett of Maryland gave this testimony before congress on March 14, 2005. Read the whole thing here.

...the 1940s and the 1950s when a scientist by the name of M. King Hubbert, a geologist, was working for the Shell Oil Company. He was watching the discovery and the exploitation and final exhaustion of individual oil fields. He noticed that every oil field followed a very typical pattern. It was a little slow getting the oil out at first, and then it came very quickly and reached a maximum, and then it tailed off as it became more difficult to get the oil out of the ground.

This followed a bell curve. Here is one of those bell curves. Now, bell curves are very familiar in science, and in life, for that matter. If we look at people and how tall they are, we will have a few people down around 4 1/2 or 5 feet and some up to 7 1/2 feet; but the big mass fall in the middle, clustered around 5 1/2 to 6 feet.

Looking at a yield of corn, a few farmers may get 50 bushels per acre, some may get 300, but the big mass today it is somewhere around 200 bushels per acre for corn.

Hubbert noticed when the bell curve reached its peak, about half of the oil had been exhausted from the field. Being a scientist, he theorized if you added up a lot of little bell curves, you would get one big bell curve, and if he could know the amount of reserves of oil in the United States, and he was doing this in the 1940s and early 1950s, and could project how much more might be found, he could then predict when the United States would peak in its oil production.

Doing this analysis, he concluded that we would peak in our oil production in 1970. This curve is what is known as Hubbert’s Curve. The peak of the curve is what is known as Hubbert’s Peak. Sometimes this is called the ``great rollover’’ because when you get to the top, you roll over and start down the other side. It is frequently called ``peak oil.’’ So peak oil for the United States occurred in 1970, and it is true that every year since then we have pumped less oil and found less oil. The big blue squares here are the actual and Members see they deviated a little from the theoretical as M. King Hubbert predicted, but not all that much.

At the bottom, see the difference the big field in Alaska made, and see what that made in the down slope, that never increased production in our country. It just meant that we were not going down quite as fast. You can see that here on the curve. Notice that the Alaska oil production was not the typical bell curve. It should have been, but a couple of things meant it could not be. One was it could not flow at all until we had a 4-foot pipeline. So the fields were developed and they were waiting; then we got the pipeline on board, and it was filled with oil and oil started to flow, and Members see the rapid increase here. It could not flow any faster than through that 4-foot pipe, and so it levels off at the top. We have pumped probably three-fourths of the oil in Prudhoe Bay.

Many people would like to open up ANWR. ANWR has considerably less oil than Prudhoe Bay, so the contribution will be significantly less. I want to note on this chart we also have the red curve, which is the theoretical curve for the former Soviet Union. It is a nice bell curve, peaking a little higher, they have more reserves than we do, and later because we entered the industrial age with vigor before the Soviet Union was quite there. Notice what happened when they came apart; notice how precipitously it fell here. After they got things organized, the fall stopped and now they are producing more oil. As a matter of fact, we might see a little upsurge in this; but the general trend is still going to be down.

On the next chart, and we have here the same Hubbert Curve, but the abscissa is a little too long and the ordinate a little too compressed, so it is not the sharp peak that we saw before. That is the curve we saw before. It shows the Texas component, and it shows the rest of the United States; and it also shows some natural gas liquids. We learned how to extract those a little later. So if you were plotting that as a bell curve, it would peak about here. It is little and then it is much, and then it tails off.

This is the contribution of Alaska, and you can see this not going to be our salvation to pump ANWR because ANWR contains probably not even half as much as Prudhoe Bay. And notice the small contribution that Alaska made. And that is not a bell curve for the reason I mentioned before because we had to develop the fields and they waited for the pipeline, and then it would surge through the pipeline when it was developed. So you do not see the tail getting greater and tailing off.

This is gulf oil. Remember the hullabaloo about the big finds of gulf oil that were going to solve our problem? That is what it did. There never was a moment in time between the big Alaska oil find and all of the pumping discovery and pumping in the gulf, there never was a moment in time when it decreased the fall in our country. The peak occurred, as you see here, about 1970.

The red curve here shows the actual discovery of oil. Notice that that peaked. There was a big find here that distorted the curve a little but if you rounded that off, you would have the typical bell curve. It started somewhere back here off the chart, then it peaks, and then it is downhill and it tails off. These are the discoveries. The last find there is simply an extrapolation. We have no idea where it is going.

We are, by the way, very good at finding oil now. We use 3D seismic detection techniques. The world has drilled, I think, about 5 million oil wells and I think we have drilled about 3 million of them in this country, so we have a pretty good idea of where oil is.

We held a couple of hearings and had the world experts in. Surprisingly from the most pessimistic to the most optimistic, there was not much deviation in what the estimate is as to what the known reserves are out there. It is about 1,000 gigabarrels. That sounds like an awful lot of oil. But when you divide into that the amount of oil which we use, about 20 million barrels a day, and the amount of oil the rest of the world uses, about 60 million barrels a day, as a matter of fact, the total now is a bit over the 80 million that those two add up to. About 83 1/2 , I think. If you divide that into the 1,000 gigabarrels, you come out at about 40 years of oil remaining in the world. That is pretty good. Because up until the Carter years, during the Carter years, in every decade we used as much oil as had been used in all of previous history. Let me repeat that, because that is startling. In every decade, we used as much oil as had been used in all of previous history. The reason for that, of course, was that we were on the upward side of this bell curve. The bell curve for usage, only part of it is shown on this chart. That is the green one down here, the bell curve for usage. Notice that we are out here now about 2005. Where is it going? The Energy Information Agency says that we are going to keep on using more oil. This green line just going up and up and up is a projection of the Energy Information Agency. But that cannot be true. That cannot be true for a couple of reasons. We peaked in our discovery of oil way back here in the late sixties, about 1970. In our country it peaked much earlier than that, by the way. But the world is following several years behind us. And the area under this red curve must be the same as the area under the green curve. You cannot pump any more oil than you have found, quite obviously. If you have not found it, you cannot pump it. If you were to extend this on out where they have extended their green line, even if it turned down right there at the end of that green line, the area under the green curve is going to be very much larger than the area under the red curve. That just cannot be. We will see in some subsequent charts that we probably have reached peak oil.

Let me mention that M. King Hubbert looked at the world situation. He was joined by another scientist, Colin Campbell, who is still alive, an American citizen who lives in Scotland. Using M. King Hubbert’s predictive techniques, oil was predicted to reach a maximum in about 1995, without perturbations. But there were some perturbations. One of the perturbations was 1973, the Arab oil embargo. Other perturbations were the oil price shocks and a worldwide recession that reduced the demand for oil. And so the peak that might have occurred in 1995 will occur later. How much later? That is what we are looking at this evening. There is a lot of evidence that suggests that if not now, then very quickly we should see world production of oil peak.

What are the consequences? What are the consequences of this depletion? The remaining oil is harder to get. It requires greater energy investment, resulting in a lower return on energy invested. That is the energy-profit ratio, which is decreasing. When we started out, you put in one unit of energy and you could get 30 out. Then that fell off, and then we found a few more fields and we got really good at extracting oil with better techniques. It looked for a little while like it was going up, but look what happened. It falls off to where it would have come anyhow if this curve had simply gone down. This is an inevitable consequence of pumping a field.

Lower profits are not the only concern. When more energy is required to extract it than is contained in the recovered oil, that is, when this ratio is less than 1, notice, we are over there at about 1984, we have got to get now another 20 years, I am not quite sure where we are now when you plot that day. We are getting very close to the unit it takes as much energy to get the oil out as you get out of the oil. It may still seem profitable from a monetary perspective, but when you are using more energy to get oil out of the ground than you are getting out of the oil, then clearly you need to leave it there when we reach that point. I mentioned the bump there was caused by a few more discoveries and particularly by increased efficiency in pumping the oil.

What is the current U.S. status? We have only 2 percent, between 2 and 3 percent, not really known for certain, but approximately 2 percent of the known reserves of oil. We use 25 percent of the world’s oil. By the way, we have about 8 percent of the world production. What that means is if we have only 2 percent of the reserves and 8 percent of the production, that means we are real good at pumping oil, does it not? That means we are pumping our reserves at roughly four times faster than the rest of the world. That means that this 2 percent will not stay 2 percent by and by because we are so good at pumping oil, we are going to be down to 1 percent of the known reserves in the world and we will still be using about 25 percent of the world’s oil. We are now importing about two-thirds of that. At the Arab oil embargo we imported about one-third of that. So we are now importing, relatively, two times more oil, actual quantity much more than that, but relatively about two times more oil.

Chart 6 shows us that more drilling just will not

solve the problem. This is a very interesting chart. This shows the difference between the amount of oil that you are finding and the amount of oil that you are pumping. Notice from 1960 on until about 1980, declining for sure, but every year except for one we found more oil than we pumped. The yellow line up here is drilling. You remember the Reagan administration and all the emphasis on drilling because we knew that we were approaching this flipover point where we were going to be pumping more oil than we found and so there was a rationale that if you just give them a profit motive and you have the right incentives, tax and regulatory incentives and so forth, they will go out and they will dig more wells and they will find more oil. Sure as heck they went out and dug more wells. But did they find any more oil? As a matter of fact, in 1982, more oil was used in looking for oil than the oil they found in 1982. Pretty consistently for every year after 1982, we have used more oil than we found. Today worldwide we are pumping at least six barrels of oil for every barrel that we find.

Chart 7 shows that worldwide discoveries are repeating the U.S. pattern. This is a rough bell curve. You find a big find of oil and it is going to make a spike. This is average for 5 years. If you look at it on a year for year, it is really up and down as you find big reservoirs of oil. But generally it starts low and it goes up and it comes down. It follows roughly a bell curve. I would not pay too much attention to the figures on the ordinate here, because the area under this curve must equal just a little bit over 2,000 gigabarrels of oil. If I visually sum the area under this curve, it is going to equal something more, not frightfully more but something more than 2,000 gigabarrels of oil which from other sources we know ought to be the total amount of oil under the sun. Notice that we are tailing off to something very low. It is unlikely that we are going to find big additional finds in the future. Again, we are very good at that. We have dug about 5 million wells worldwide. We have done a whole lot more than that explorations with detonations and seismic and 3D and computers and we are very good at looking at the kind of geology where you might find oil. There is just no real expectation that there are going to be big additional fields of oil found out there. This dropoff in discovery is really in spite of very improved technology for finding oil.

Chart 8. This is a very interesting chart. It has nothing to do with time, because on the abscissa here, we have the number of wells that are drilled, the cumulative oil caps, and on the ordinate, we have the amount of oil that was found. For any relatively big field, here we are talking about 50 gigabarrels. Remember, there are about 2,000 gigabarrels worldwide, so this is a meaningful part of the world reserves of oil. We see that that goes up and up and then it tails off. You cannot find what is not there. No matter how many more wells you drill, you are not going to find oil that is not there. The same pattern should be apparent on a world scale.

Chart 9. This is a very interesting chart. It is a little too busy, but let me try to explain what is there. The oil companies for reasons of pricing and regulations and so forth have had the habit through the years of underreporting initially how much oil they found. Then later when it was appropriate to their license to produce more oil, they would report additional oil. They never found any additional oil, they simply reported oil they had found previously. By the way, you may have noted that three times in the last roughly 3 weeks, oil companies have admitted that their estimates of the reserves were exaggerated and have downscaled the reserves that they said were there. If you took the original reporting of the reserves, you might be able to construct a curve, a straight line curve which said we are just getting more and more. But if you backdated that to the actual discoveries, then you get this curve. This curve is asymtoting at a bit over 2,000 gigabarrels, which is about what the world’s experts say had been there. We have now pumped about half of that. We have about 1,000 gigabarrels remaining.

Americans need a real change in fiscal leadership.  Something not seen in this country for at least 30 years or so.

“Last week, China’s pool of reserves passed the $1 trillion mark, making it the largest lake of money in the world.... Now, China will just go on buying the things she needs to continue her expansion – mining companies, oil fields, farm products...or maybe farms themselves.

Let’s see...hmmmm...an acre of farmland in Kansas, US sells from $550 to $1,265. We’ll say $1,000, so we can do the math in our heads. With a trillion dollars in your pocket, you could buy a pretty big spread in the heartland – say, one billion acres, right? Kansas only has 52.36 million acres. So, the Chinese could buy the entire state and still have $947.64 billion left over – enough to buy all the farmland in Nebraska, Iowa, South Dakota, North Dakota, Missouri, Arkansas, Louisiana, Colorado, New Mexico, Montana, Wyoming, Oklahoma and probably Texas too.

Well, isn’t that special,” American economists could say. “The foreigners know America has the most dynamic, most successful economy in the whole dang world. Yes, we spend more than we make. But the money comes back to us finally. It just shows what a great economy we have. The foreigners want a piece of it.”

And day by day, at the rate of $80 million per hour, the foreigners get a few more pieces of it. And now China, if she chose, could trade her pieces of US paper for a piece of land the size of the Louisiana Purchase. Or she could buy stocks...or Treasury bonds. The total capitalization of the entire 30 Dow stocks is only about $3 trillion. So, she could buy a third of the Dow, or a controlling interest in every one of them.

Wouldn’t that be nice! Eventually, we’ll all be able to go to work in Chinese-owned factories...or sell our internal organs to Chinese doctors. What a great economy!

But here we would like to pause...draw breath...and vent our admiration for this great flim-flam. No doubt that Americans have a model of democratic capitalism that is the envy of the entire world. It functions beautifully – in theory. But in practice, it has reached a stage in its cycle where only the rich seem to make money, while the poor and middle classes actually lose it...”

This article was found here.

I don’t know who to give credit to

Mr. Sense had been with us for many years.
No one knows for sure how old he was since his birth records were long ago lost in bureaucratic red tape.

He will be remembered as having cultivated such value lessons as knowing when to come in out of the rain, why the early bird gets the worm and that life isn’t always fair.

Common Sense lived by simple, sound financial policies (don’t spend more than you earn) and reliable Parenting strategies (adults, not kids, are in charge).

His health began to rapidly deteriorate when well intentioned but overbearing regulations were set in place.

Reports of a six-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.

Mr. Sense declined even further when schools were required to get parental consent to administer aspirin to a student; but, could not inform the parents when a student became pregnant and wanted to have an abortion.

Finally, Common Sense lost the will to live as the Ten Commandments became contraband; churches became businesses; and criminals received better treatment than their victims.

Common Sense finally gave up the ghost after a woman failed to realize that a steaming cup of coffee was hot, she spilled a bit in her lap, and was awarded a huge financial settlement.

Common Sense was preceded in death by his parents, Truth and Trust, his wife, Discretion; his daughter, Responsibility; and his son, Reason.

He is survived by two stepbrothers; My Rights and Ima Whiner.

Not many attended his funeral because so few realized he was gone.

If you still remember him, pass this on; if not, join the majority and do nothing

Here is an excerpt from Lester Brown’s recent article

..."The growing myth that corn is a cure-all for our energy woes is leading us toward a potentially dangerous global fight for food.  While crop-based ethanol -the latest craze in alternative energy - promises a guilt-free way to keep our gas tanks full, the reality is that overuse of our agricultural resources could have consequences even more drastic than, say, being deprived of our SUVs. It could leave much of the world hungry. 

We are facing an epic competition between the 800 million motorists who want to protect their mobility and the two billion poorest people in the world who simply want to survive. In effect, supermarkets and service stations are now competing for the same resources.

This year cars, not people, will claim most of the increase in world grain consumption. The problem is simple: It takes a whole lot of agricultural produce to create a modest amount of automotive fuel. The grain required to fill a 25-gallon SUV gas tank with ethanol, for instance, could feed one person for a year. If today’s entire U.S. grain harvest were converted into fuel for cars, it would still satisfy less than one-sixth of U.S. demand.

The U.S. Department of Agriculture reports that world grain consumption will increase by 20 million tons this year, roughly 1%. Of that, 14 million tons will be used to fuel cars in the U.S., leaving only six million tons to cover the world’s growing food needs.

Already commodity prices are rising. Sugar prices have doubled over the past 18 months (driven in part by Brazil’s use of sugar cane for fuel), and world corn and wheat prices are up one-fourth so far this year.

For the world’s poorest people, many of whom spend half or more of their income on food, rising grain prices can quickly become life threatening.

Once stimulated solely by government subsidies, biofuel production is now being driven largely by the runaway price of oil. Many food commodities, including corn, wheat, rice, soybeans, and sugar cane, can be converted into fuel; thus the food and energy economies are beginning to merge.

The market is setting the price for farm commodities at their oil-equivalent value. As the price of oil climbs, so will the price of food.

In some U.S. Cornbelt states, ethanol distilleries are taking over the corn supply. In Iowa, 25 ethanol plants are operating, four are under construction, and another 26 are planned.

Iowa State University economist Bob Wisner observes that if all those plants are built, distilleries would use the entire Iowa corn harvest.  In South Dakota, ethanol distilleries are already claiming over half that state’s crop. 

The key to lessening demand for grain is to commercialize ethanol production from cellulosic materials such as switchgrass or poplar trees, a prospect that is at least five years away.

Malaysia, the leading exporter of palm oil, is emerging as the biofuel leader in Asia. But after approving 32 biodiesel refineries within the past 15 months, it recently suspended further licensing while it assesses the adequacy of its palm oil supplies. Fast-rising global demand for palm oil for both food and biodiesel purposes, coupled with rising domestic needs, has the government concerned that there will not be enough to go around"…

Here is what Dr. Allan Thornhill has to say:

“between the years 1967 and 1997 the annual global population growth rage declined from 2.07% to 1.33%. That’s nearly a 40% reduction in only 30 years! Good for us! However, note that nearly the SAME NUMBER of people were added last year as were added in 1968, a year when the growth rate was nearly 40% faster than it is now...huh?



With a population of 4 billion (it was a little less than that in 1967), a 2.07% growth rate gives you a net addition of about 82 million people per year. At this rate, it would only take 24 years to add another 2 billion people to the human population. Race forward 24 years (or 30 years if we want to compare 1967 and 1997) and note that sure enough, you are have a human population of 6 billion (in 1999), but it is ONLY growing at a rate of 1.33% per annum (there’s that 40% reduction in growth rate)! Don’t get too excited, however… Do the math and you will note that we are still adding about 80 million people per year, suggesting it will only take another 24 years to add another 2 billion people to the population. This is an example of what we call lag time--like a fully-loaded ocean liner, these very large population sizes have momentum of their own that resist change in speed or direction, even when you have taken your foot off the accelerator (which we have not done yet).



How long does it take to slow this ship? Even at our current *decreasing* growth rates (that is, even if we continue to slow the growth rate to less that 1.33% per year), our population will increase by 2 billion people in under 25 years. With a population of 8 billion we would have to drop our growth rate to 1% per year just to maintain the current rate of number of individuals being added each year (about 80 million) in above scenario. In other words, with 8 billion people (in say, the year 2024) we would need to lower our net growth rate to 1% per year to add ONLY an additional 80 million people per year to our population. That’s only a 33% reduction of growth rate from 25 years earlier, so that should be easy, yes?



Let’s say we are can continue to do the amazing and reduce our populations growth rate by 40% each 25 years, when do we reach a population size where we are adding a minimal number of individuals each year, or, even reach zero population growth (ZPG, where there is no net increase in numbers of humans per year)? In other words, when does the ship come to a stop and just float? The current slowing rate (40% per 25 years) puts us at about 12-13 billion people in 150 years—at that point we will only be adding about 8 million added per year (an order of magnitude fewer than this year, or next year). Note that this is NOT ZPG, however, but it is a lot closer than we are now!

There is no reason to believe that we cannot decrease the population growth rate even faster than 40% per 25 years or 1.6% per year (that would be slowing the acceleration faster than we are slowing the acceleration now) and if so, we can hope that the population growth rate will slow to zero (no net growth) within the next 100 years. Even so, the global human population will be 10-12 billion people, twice what it is today.”