People Get Ready (there's a train a-comin')

[GliderGuider]

People Get Ready

The broad American public voted for "change" but they thought that meant a "changing of the guard." Out with the feckless Bush; in with the charismatic Obama... and may this American life now continue just as it ever was. The change actually coming will be much more than they bargained for, namely our transition from a wealthy society to a hardship society. The sharp break is a product of our years-long failure to reckon with the energy realities of our time. We're still confused about that, but it's hard, otherwise, to ignore the massive disappearance of capital, asset values, livelihoods, domiciles, comforts, and necessities.

The price of oil is suddenly down to an astounding $40-odd per barrel. Those of us studying the Peak Oil story have said that the "bumpy plateau" years of peak production would be expressed in tremendous price volatility, and for exactly the reasons now evident -- that the high-price phase would mangle advanced economies, that they would fall back in paralysis, then respond anew to oil price collapses by straggling up again, only to be crushed again when a resumption in demand for oil drove the price back up.

What was not so generally anticipated was the wholesale destruction of global finance in the first phase of this period. This has now occurred so comprehensively that we know the banking business will never be the same again. It has also accelerated other plot-lines in the story. One affects the global oil industry itself: a lack of capital to go forward with the new oil projects that were designed to mitigate the present depletions in old oil fields. The result of this quandary is as likely to be oil shortages in 2009 as much as an extremely sharp snap-back in oil prices. The oil markets themselves are changing in the face of financial disruption. Between pirates lurking off the Horn of Africa, and a shortage in letters-of-credit that enable the shipping of anything for delivery between nations, the allocation system is impaired. This affects poorer nations the most, and when they don't get their oil shipments, conditions in these nations get worse. People lose incomes. Ethnic strife ramps up. All this will make it harder to move oil from the places where it is produced to the importing countries.

(More at the link)

Kunstler has been right about the general shape of this clusterfuck for a long time. And he's being proven righter every day.

[grasswire]

1. Just get on board

Thanks for reminding me of that righteous song this morning. Thanks!

[kristopher]

2. " What was not so generally anticipated was the wholesale destruction of global finance in the first

Yeah, don't let the fact that the current problems ahave nothing to do with "peak oil" but instead are due to unregulated oil speculators and an unrelated mortgage credit meltdown get in the way of your delusions...

[lutherj]

3. In the same piece Kunstler predicts hyperinflation:

"So much artificially-generated pixel "money" is being pumped into the system now that it will eventually overtake the quantity of capital currently vanishing in the form of exposed securities swindles, unwinding bad debt, and imploded worthless counter-party contracts. The pixel money will express itself as super or hyper inflation, lagging from 6 to 18 months from the time it was actually introduced in the form of bailouts."


Here's an interesting photo-essay of what hyperinflation looks like in Zimbabwe:
http://www.boncherry.com/blog/2008/10/26/global-crisis-this-is-the-real-crisis/

We may get a short reprieve when the new administration comes in, but I think the economy is going to crash hard. In my opinion, the bailouts are ultimately useless. If it didn't have such heartbreaking ramifications for everyday people in the real world, the spectacle of these stuffed-suit capitalists trying to redeem their souls by throwing all this meaningless paper at each other would be hilarious. In my opinion though, we should be doing the opposite of bailing out these financial institutions. I think we should shut down the entire credit industry. Tell them to turn off the lights, lock the doors, and go home - it's done. We tell everyone that debts are written off, that everyone owns the home they are living in, and we find homes for the homeless. Most of corporate culture would collapse, the monetary system would collapse. We start a massive public works program where everyone is involved in re-localizing our economy, rebuilding our communities, and transitioning to a sustainable lifestyle. We might even be able to lower our carbon output enough to mitigate climate change.