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Old 06-06-2012, 02:54 PM   #21
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Still the second cheapest liquid.
At its current price locally, gasoline is pretty much interchangeable with milk -- except that I wouldn't drink gas or put milk in my fuel tank...
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Old 06-06-2012, 03:03 PM   #22
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I wish I could say that I don't find this assessment of U.S. debt and market machinations credible. The author certainly has an impressive background. Makes Nassim Teleb (Black Swan) look like Norman Vincent Peale. Thoughts?

Collapse At Hand |
Working for Reagan and being on the wrong side of the Laffer curve are not impressive credentials in my opinion.

Before the sky falls completely let's look at what was said.

" A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign."

The rise in interest rates will only come when more prosperous times cause the return of inflation. A gradual increase increase in interest rates will cause bonds to decrease, not collapse. Flair for the dramatic.

"The question is: when is sooner or later? The purpose of this article is to examine that question."

When is sooner or later? Precious minutes of my life were wasted wading through all of his doomy drivel about the various financial crises with which we are familiar. How are they connected to each other? How do they answer the "sooner or later" question? They aren't and they don't.

Freshman English F for you.
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Old 06-06-2012, 03:08 PM   #23
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At its current price locally, gasoline is pretty much interchangeable with milk -- except that I wouldn't drink gas or put milk in my fuel tank...
I was thinking of crude. Bet you wouldn't put a straw in that one either.
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Old 06-06-2012, 04:59 PM   #24
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Charles Dickens said of the United States that if its citizens were to be believed America ‘always is depressed, and always is stagnated, and always is at an alarming crisis, and never was otherwise.’

Nothing to see here folks, move along.
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Old 06-06-2012, 07:40 PM   #25
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Working for Reagan and being on the wrong side of the Laffer curve are not impressive credentials in my opinion.

Before the sky falls completely let's look at what was said.

" A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign."

The rise in interest rates will only come when more prosperous times cause the return of inflation. A gradual increase increase in interest rates will cause bonds to decrease, not collapse. Flair for the dramatic.

"The question is: when is sooner or later? The purpose of this article is to examine that question."

When is sooner or later? Precious minutes of my life were wasted wading through all of his doomy drivel about the various financial crises with which we are familiar. How are they connected to each other? How do they answer the "sooner or later" question? They aren't and they don't.

Freshman English F for you.
Yeah I tend to agree with you after reading more about this guy's background and also finding out that he's been doing the same sky-is-falling dance for decades. He has some impressive credentials but his steadfast advocacy of supply-side economics alone ought to raise some red flags.

Since I'm invested in the Permanent Portfolio which has half of its assets in Treasuries and a quarter in gold I shared the article with one of the leading proponents of that approach. His comments on the Roberts article may be of interest to some:

http://crawlingroad.com/blog/2012/06...ates-and-gold/
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Old 06-08-2012, 03:14 AM   #26
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Collapse at hand is the best article I've read since Peter Schiff's latest book. Now I know why gold has been lagging. Uncle Sam was meddling with it.

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What is one to do to protect his/her assets, investments, etc., buy gold, stock up on canned goods and ammunition ?
Non-paper assets are better: Gold, a duplex that you can rent out (pay for it with cash). The best paper assets are dividend paying stocks.
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Old 06-08-2012, 06:57 AM   #27
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Couple points I would like to comment on. Interest rates are being held too low at this point. However, what would happen if the 10 year goes from 1.5% to 4% assuming 1.5% over inflation, and this happened over say 18 months or 2 year time frame. If it happened overnight problems, but gradually what is wrong with 4% money? It will cost us more in carry costs but don't we all know this already? Now if we don't start on a plan to reduce the debt I suspect we would have a real hard time borrowing at reasonable rates. Bottom line, I believe we will have to suffer to pay back or pay down the debt we have but don't see any chance we colapse as a country over this problem.

2nd point I'd like to make is that before you can begin to figure out what will happen, you need to take a careful inventory of all the problems and how they interact. I haven't seen a good review of the mistakes made by all involved. There were banks, investors, our governments, the realestate bubble, people (the 99%) had too much debt, people borrowed to buy homes they couldn't afford, and other issues that all came to climax at the same time. Mr Roberts takes the easy way out and seems to have blamed the banks and the fed for all the problems and doesn't look at actions by the others that contributed to the colapse of '09. If your city water main is broken and you buy a new filter for the ice maker you didn't fix your problem even though you don't get brown ice cubes. You have to understand what the problem is before you can fix it.
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Old 06-08-2012, 07:32 AM   #28
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Again, (just an example) by now we were supposed to be riding bicycles and reading by candlelight because 'all the oil would be gone'....and suddenly we start finding new oil fields and new methodologies to access huge, previously untappable stockpiles.
Well, to be fair, nobody ever said we'd be humming along like usual, with $1.25/gal gas, then suddenly all the pumps would permanently run dry.

They're not finding "new methodologies" to access those previously untapped stockpiles. They always knew how to tap them. The problem was that with oil at $30/barrel, it wasn't economical. But with oil at $100/barrel, suddenly it becomes profitable to employ those expensive techniques.

The reality is, we have run out of "easily accessible" oil. We've now resorted to harvesting the more difficult oil, deep beneath the ocean in the Arctic, and buried in sand in Canada. Oil that we always knew was there, but didn't make sense to chase when we could simply push a straw into the dirt anywhere in Texas and come up with hundreds of thousands of barrels of the stuff.

The "running out of oil" is already happening. That's why oil is no longer $30/barrel. In a few more years, $100/barrel will look wistfully nostalgic. At some point in the future, it will pass $200/barrel, and we'll be going after even more risky stores of the stuff. But make no mistake, it's happening. Deepwater Horizon created a huge mess and perfectly illustrates the risk of chasing after ever more inaccessible caches of oil to quench our thirst. Eventually, we'll be unable to resist carving up our sacred cows, and we'll drill in national parks. It's inevitable.

But like I said, it's not going to be some sort of "binary switch" where everything is going along as normal, then suddenly we run out. It's a gradual progression, and the signs are already visible, from the increasingly risky drilling locations, to the escalating price and the proliferation of hybrid vehicles. THIS is what running out of oil looks like - not some dramatic cutoff.
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Old 06-08-2012, 07:51 AM   #29
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Instead all we are doing is paying $4.30 /gal for our plentiful gas.

Ha
That's you all on the left coast. It's $3.05/gal and dropping around here.
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Old 06-08-2012, 01:57 PM   #30
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That article compared to this one, which says debt is falling (vs. GDP, anyway).

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Everyone knows America has too much debt. What they don’t know is that things are getting better, not worse.
U.S. debt load falling at fastest pace since 1950s - Rex Nutting - MarketWatch

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Old 06-08-2012, 02:08 PM   #31
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Well, to be fair, nobody ever said we'd be humming along like usual, with $1.25/gal gas, then suddenly all the pumps would permanently run dry.

They're not finding "new methodologies" to access those previously untapped stockpiles. They always knew how to tap them. The problem was that with oil at $30/barrel, it wasn't economical. But with oil at $100/barrel, suddenly it becomes profitable to employ those expensive techniques.

The reality is, we have run out of "easily accessible" oil. We've now resorted to harvesting the more difficult oil, deep beneath the ocean in the Arctic, and buried in sand in Canada. Oil that we always knew was there, but didn't make sense to chase when we could simply push a straw into the dirt anywhere in Texas and come up with hundreds of thousands of barrels of the stuff.

The "running out of oil" is already happening. That's why oil is no longer $30/barrel. In a few more years, $100/barrel will look wistfully nostalgic. At some point in the future, it will pass $200/barrel, and we'll be going after even more risky stores of the stuff. But make no mistake, it's happening. Deepwater Horizon created a huge mess and perfectly illustrates the risk of chasing after ever more inaccessible caches of oil to quench our thirst. Eventually, we'll be unable to resist carving up our sacred cows, and we'll drill in national parks. It's inevitable.

But like I said, it's not going to be some sort of "binary switch" where everything is going along as normal, then suddenly we run out. It's a gradual progression, and the signs are already visible, from the increasingly risky drilling locations, to the escalating price and the proliferation of hybrid vehicles. THIS is what running out of oil looks like - not some dramatic cutoff.
Agreed on all your points.

MY point was a little more subtle: that despite all the doom and gloomers over the centuries, we always find a way to get around whatever is supposed to be 'the end of life as we know it'. It's never as bad as they say it is going to be and sometimes neven happens at all (Global Cooling circa1975).

Not to be provacative, but to my point, but the Deep Water Horizon (yes it was a horrible tragedy) was supposed to end all marine life in the Gulf for the next hundred years and render the entire Gulf inhospitable to humans.
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Old 06-09-2012, 11:55 AM   #32
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The reason I don't worry about civilization collapse is because it usually takes a couple of generations to "happen". That's beyond my lifespan and well beyond my sphere of influence.

Now, some communicable disease wiping out 10% of the human population? That could happen in a very short time period and cause a devastating effect that takes over a generation to recover.

My philosphy - live life to the fullest now, because you don't know what the future will bring - or even if you will be around to "enjoy" it. Along with this philosophy is my deliberate choice not to spend much time worrying about possible grim outcomes, as that robs joy from the precious here and now.

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Old 06-09-2012, 09:36 PM   #33
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It's interesting how many "expert" books, articles, video segments there are about all things political, economic, investing that go to great lengths to describe how bad things are - only to end with a lame or no credible solution.
I've read several 200-300 page books lately describing how we got into this mess, that ended with solutions that even the author gave long odds for whatever reason. The link is another example, the solution in the last paragraph is laughable.
The author's mission was complete as soon as someone bought the book. Most people want to read about the problem and then argue about why the solution will never work. The author really has no incentive to actually solve the problem, especially if they're planning to make a career out of it write a sequel.

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But if we continue to treat a finite, nonrenewable resource as essentially limitless, production increases aside it's still not exactly a "warm fuzzy".
Gee, I wasn't aware that we'd found it all yet, let alone figured out how to extract it.

I wonder how gasoline inflation compares to the overall CPI. Of course we'd have to add in "hedonic adjustments" like removing lead while adding detergents & ethanol, as well as today's higher average vehicle MPG.
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Old 06-11-2012, 02:54 AM   #34
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I could not have said it better.
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My philosphy - live life to the fullest now, because you don't know what the future will bring - or even if you will be around to "enjoy" it. Along with this philosophy is my deliberate choice not to spend much time worrying about possible grim outcomes, as that robs joy from the precious here and now.
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