malco

Don't waste your time on the cattle. My experience in other areas is that 99% of humanity will follow the herd whatever you tell them, the dumb monkeys. Humans are pitifully wired to cling in groups. Tragic but true. So far as starvation goes, it will happen in the Third World before it happens in the industrialised economies, for the simple reason that we are richer and can out bid poorer countries. Half the world lives on less then $5 a day. Incredible but true. As George Orwell once commented, the poor are invisible.

Look what you can buy in London for £11.5K: http://www.eigroup.co.uk/auctioneers/templ...c8&l=474871 Why? It looks a nice big house. There must be a catch as big as the Forth Road Bridge to suppress the price to that level. Is it something to do with restrictions on use? At that price I would accept having to scuffle on my hands and knees at all times to live in a nice big house in London.

Ah, we have a baby on the forum tonight. Has to use those words he just learned in the nursery toilets today. Too bad he hasn't a clue how to invest.

You don't buy on a high, you buy in the dips you muppet. Best of all you buy before the crowd because you foresee that Peak Oil makes a gold rush a certainty, since Peak Oil seals the doom of fiat currencies. Whether they go out the window in 5 years' or 10 years' is neither here nor there. They are doomed. Be glad that gold has pulled back. I guess it will fall below $750 and will stay there for a while. That will look cheap in 5 years' time.

Answering in the same order: No, I think interest rates are fairly low today; No I do not predict them to be lower in the future, not for any length of time at least; Yes I predict them to be higher in the future; inflation will be higher so interest rates will have to go up; The fair rate of interest on a maortage is the prevailing rate, since "fair" can only mean a balance of all interested parties that negotiate the rate. There is no intrinsically "fair" interest rate. People should not have to mortgage themselves to get a house. I bought my first house in 1988 for £28,000 from a couple who had paid £500 for it in 1965, and they paid off the loan in a couple of years. It has not always been necessary to indenture yourself to get a house. It is only decades of asset inflation that has brought about the current situation. The current situation suits the powers-that-be because competition and fixation with housebuying keeps the Fatted Masses from uniting to face down the banks, the corporations and the landowners. Let Thatcherism prevail!

Britain isn't that bad. Most other countries are worse, with their authoritarian state bureaucracies hung-over from the various revolutions, fascism and/or and the Nazi occupation. Sad but true. Most Continental countries still have proper police, mind you. Again, sad but true.

What? Your own funeral?

I would not be especially concerned about importing LNG, as we are a relatively rich country and there are large stranded gas supplies in the ME that otherwise are not a lot of use to those sitting on them. I expect they will be as eager to take our money as we will be to take their gas. We've managed to get oil supplies from them for the last 40 years after all, with only a few hiccups, most if not all of which could have been avoided by more competent diplomacy. Likewise Russia was exporting gas as the Soviet Union back in the 1980s for the same reason as today - they love to take our money. It is far better to be energy independent than dependent on imports. Britain will still be better off than countries like France, Germany and Italy that have almost no fossil fuel resources to speak of. The main worry with the LNG is the ships themselves, which are extreme hazards and require the utmost care in navigation. So far no LNG tanker has ever been in a serious collision, but it is bound to happen sooner or later. Most probably it will be in the Malacca Strait, through which all tankers to the Far East must pass. A serious collision there would knock the world economy into recession due to disruption of vital trade to Japan, China, Korea and Taiwan. I too am setting up a little emergency corner following a blackot in Edinburgh last Thursday that reminded me of how much we should appreciate electricity and how little we do. I will buy candles and lanterns, some dried and canned foods against the next time it happens, or there is a Fuel Blockade and the stores get emptied by panic buying. This kind of thing is bound to get more and more common as energy prices rocket, our currency sinks, unemployment goes up and the Fatted Masses get nasty as they lose their toys one by one. I am exceedingly glad that I am an experienced cyclist and have no qualms about cycling 15 to 20 miles in my daily rounds. This will be a big advantage in the years to come, as most folk nowadays cannot contamplate the idea of cycling on the roads. Get yourself a good touring bike and equip it well, and take your National Proficiency.

I am not quite sure why you think the lights will go out. It is true that we have two separate problems: 1) our oil and gas fields are in steep decline. We now have to import more and more fossil fuel. This is not widely known by the public, but it will have serious implications for the £ (along with collapsing property prices). I believe that the shameful way out that will be taken by either party will be to join the Euro, if Euroland is stupid enough to have us. However, there is no question of this leading in itself to shortages, because for the time being we can afford to import oil and LNG and in fact there is considerable investment going on to extend the gas distribution network for this purpose. Likewise the connector to Europe can be expanded so that we can import Russian gas. At a price. 2) Our nuclear plant are ageing and will have to be decommissioned soon (not sure about exact years). There are no solid plans to replace them. We can burn more coal, but that runs against the environment, or we can burn more gas, but that will be expensive. We can also expand what we import from France, provided that the French continue to have spare generation capacity. These two problems are not being addressed by Blair/Brown, probably for the reason already given, they are slow issues, not known about or easy to communicate to the public without sounding inept, and they require potentially unpopular measures. New Labour never does anything that requires fortitude. If there are blackouts or gas shortages it will be due to mismanagement rather than the problems being insoluble. I have to foresee a similar decline in living standard for the UK, via declining £, that has happened to the US, and for the same reason, people in a hollow economy spending beyond their means and an imaginary housing market allowing it all. What I cannot grasp is why the £ has stayed so strong for so long. I doubt it will last.

Ahem, you need to bear in mind that "science" is today a vast bureaucracy, and thus exhibits the successes and flaws typical of large formally organised and authoritarian structures. For a start, what gets researched is a function of what gets money, since very few scientists have the private wealth to fund their own work. In the days of the French or English gentleman "amateur" this was not the case; the volume of science was small but at least those involved could concentrate on what they wanted. The steam turbine came about in this way, and so did the fuel cell and much early astronomy. Anyway, in the real world the young academic will be idealist, but it will presently dawn on them that they will only flourish within the system if they play by its rules. So the majority of researchers do that. A few exceptional ones have the guts to do what they like and to say what they like, but often they get hampered in their careers by spitefulness from their peers. For instance, AJP Taylor was never promoted as an academic due to his outspokenness. Another warning sign is when the only voices of dissent are retired people - who have nothing to lose so they can afford to speak out. Criticisms of the Stock Market by British businessmen fall into this category, although it is outside the science debate. I have not been deeply involved in climate science, but I have been involved in the "sciences" of road safety and injury prevention. I have seen enough there of the behaviour of supposedly dispassionate researchers, making selective use of evidence and in some cases lying by omission to defend their professional positions, to convince me that academic researchers are not trustworthy to reveal a truth that would put them at risk. It may be that the truth would be embarrassing to the body granting the funding (drug A is not actually all that effective, Ritolen is I believe a recent example of this) or unpopular to their senior peers who have built careers on a set range of premises. Very few will break these rules of discretion, and those that do usually end up excluded from mainstream academic work. You say that academics are not motivated by money. That is generally true, they are motivated by vanity - they want to believe they know best, and when someone comes along, especially someone without a PhD, and shows that they do not know what they are talking about, they close ranks and shrill in chorus to cover the dissent. Academics can be frighteningly childish, considering the responsibility that society extends to them. In the case of the IPCC, I don't take it seriously for two reasons: 1) their scenarios are based on projections of fossil fuel consumption that nobody, not even the wildest optimist, would give credence to. Proper analysis based on likely fossil fuel supplies show that we can burn all the oil and gas we can get our hands on and it is not likely that this will harm the climate too much. The big question mark is coal - if we start getting back to a big-time coal economy, we are in deep trouble. This has been pointed out repeatedly to the IPCC by knowledgeable energy experts for at least the last 7 years, and the IPCC has consistently ignored them. 2) factually, temperature changes have led changes in levels of CO2, not vice versa. This is never emphasised by the IPCC, Al Gore or anyone I am aware of other than the physicist Jay Hanson (whom I do take seriosly because he has the guts to come out and admit what the facts actually show). In the historical record, it is temperature change that has (probably) caused a change in CO2 levels, or at any rate created conditions leading to increased CO2. So can the reverse causation happen? Jay Hanson believes it is much too great a risk to put that question to the test with the climate of our planet at stake. I agree with him. We will be pushing CO2 levels beyond the range seen in millions of years. Anything could happen. It's like juggling with loaded revolvers - just not a risk we should be taking.

I am surprised fuel prices are not higher, given the price of oil. There is no "scam" behind the basic reason for the price rise. The prices will go on rising until a significant amount of people have to cut their driving. This is known as "demand destruction". Reason? Global oil production is peaking and it looks like it is beginning to go into decline. This is evident in production data produced by the IEA and the EIA. Peak Oil is not an oil company scam. Western oil companies only control a small percentage of global oil production now. The national oil companies are pumping for all they are worth. Who wouldn't with oil prices so high? If you want an education in fuel supplies and why prices are going higher, I would recommend the site of Matt Simmons, energy investment banker: http://www.simmonsco-intl.com/research.aspx?Type=msspeeches I will not say more. It is up to you to educate or delude yourselves as you will. Nobody is going to warn you about Peak Oil, though.

In defense of b-schools, I think it is the people who go to them that are the problem, rather than what gets taught there. After a disappointing and frustrating five years working in manufacturing industry I entered a famous MBA programme about 15 years ago. The content was excellent, it truly widened my insular engineer's mind and has enormously boosted my abilities inside and outside of work. Interestingly, I never worked in Britain after finishing the course, because my encounters with British manufacturing companies showed them to be parochial and completely out of phase with what an MBA with technical knowledge might be able to do. So I worked abroad for a famous Swiss company, made plenty, liked the fact that in Switzerland you get respected for technical competence and it is R&D types who make the shift into management and sales. This means that the technical sales staff of a Swiss or German company are deeply knowledgeable, and in adition they will probably have studied business as part of trainng in sales. It is much easier to teach an engineer to be a businessman than the other way around. However, not many people from my sort of background were on the course. Mostly they were prima-donna types from banking and management consulting. They weren't interested in anything beyond themselves (with rare exceptions). They came from the alienated world of finance and they went back there. They made a mint in the City or at McKinsey & Co, but whether they really did more than gamble and strut about fanning their vanities, I don't think so. There are plenty of B-school academics who are aware of the problem of short-term pressure on cash flow crowding out long-term research. I did an excellent course at Columbia B-School, where I was exchanged, on how US companies had lost out in fields like video cassette recorders and MRI scanners because of the failure of US industry to achieve long-term projects. The Japanese were prepared to wait for decades for the pay-off from VCRs. The technology went back almost to WW2, but it was not until the late '70s that they became consumer items. Of course, we British are nowhere in sight. There linger a few exceptions like Rolls-Royce, but for the most part our manufaturing has gone to foreign hands or just gone. Not because of MBAs, but because of the complacent incompetence and nepotism of the house-trained management who ran them. When a pal of mine went to British Leyland in the mid 1980s, he was one of the first graduate engineers in the place. That was at a time when the wonderful house-trained management were putting out Itals and Metros. It is a caricature to say in-house managers will be better than those brought in with fresh ideas from the outside. Building a team is about getting the right mix and getting rid of wasters, cowards and yes men. Another problem in Britain is that the best people generally did not go into manufacturing unless they pursued some special interest. You can have an MBA and also understand "real" wealth creation, and how it is distinguished from the asset inflation of the City of the last 25 years.

Interesting. I wonder if the financial world has finally picked up on the Peak Oil story, especially after Sadad al-Husseini made the astonishing admission last week that 300 billion barrels of claimed reserves in the Middle East are actually phoney. That really hit me like a blow when I read that coming from somneone of his stature. The gold bull is finally getting some attention in the pleb papers like Metro. Peak Oil is still not. I remember when I was a kid I felt sad to have missed something as exciting as WW2. Now it looks like I'm going to live through something at least as epoch-making.

Cheeseandbeans, I won't answer your post in detail, I can see now that you are a fool

I think you will find that the development of trade and money are intimately linked, if you look into the history of commerce. The first currency known was glass beads used in the Middle East associated with the very earliest metals industries. Ores and the fuels to smelt the ores were rarely in the same place, you see, so trade routes had to develop to bring one to the other and that meant developing some means of holding value to balance the transaction during WIP. Oil prices have been a strong factor in causing recessions and stagflation. There will always be multifarious factors, as I pointed out in my original post I don't expect the world ever to reach a geological peak in oil production. This is the main reason that CERA does not buy into the Peak Oil theory. If you look at consumer goods markets in the 1950s versus today, you will find that the distance to market was limited compared to today. For instance, in the 1950s it would have been uncommon to see a foreign made car in Britain. One of the delights of travel in Europe up until the early 1980s was that the cars were different in different countries, reflecting the national character. This variety has unfortunately vanished with "the Global Village". The same may be said of most consumer goods. The point is that production today is by global corporations that fine-tune their operation by extreme specialisation of different functions in many different countries to exploit comparative advantage (or labour arbitrage, some would argue). They have no home market, rather, they have no home at all, they compete in all countries, usually against the same competitors. Globalisation in essence means encountering the same companies throughout the world, producing and selling. This is completely in contrast to the Fifties, when you encountered different companies in different countries and all of them had a home national market, to which their products were specifically tailored. There was of course some import and export of goods in the Fifties, but this was peripheral relative to the central drive to compete in the national market. As an example, I can still recall how extremely rare it was to see a Japanese car in Britain in the early 1970s. I can still recall specific instances of seeing early, ugly Toyotas and the odd Mazdas. Then we got into the 1980s and it became a torrent and our companies were going out of business. Modern business is extremely dependent on a robust international banking system to enable these disossiated operations to take place (as well as cheap energy to allow for all the shifting of goods between production centres). Yet both the financial system and the energy supply are now in question. I'd worry about the financial system more than oil. Durch might be able to say more about that point.