Need an economist on money creation?

[Eclipse Now]

Hi all,

I've been googling and I just can't seem to find any FREE 'economics 101' podcasts that explain the basics.

 

I remember reading a depletionist / Malthusian claim that society was addicted to growth and Western economic systems HAD to have growth because the money was being created so fast... otherwise catastrophic inflation would ensue. This was not just crazy hippie stuff, but Phd math's types writing for the CSIRO in Australia. See the essay Debt as the driver of economic growth and excessive consumption; (about 6 page PDF from memory), his argument shorter.

 

I just watched some videos on money creation over here as well.

The Crash Course | Chris Martenson

 

Here there's a whole free book on the thing.

Feasta - The Ecology of Money

 

But I honestly can't make heads or tails of monetary policy which is supposed to combat this stuff. My economics mate says that money creation is neutral to whether or not an economy expands or shrinks, but the guys above seem to imply that money creation DEMANDS a growing economy or 'bad things happen'.

 

Is there anyone out there that can explain this, to me, a non-economist, in a way I can understand... or at least put me onto a podcast series that might help? (I've tried to read about this stuff at Wikipedia but my eyes go... :coffee_n_pc: )

[Nitack]

Your friend is right, currency production and economic growth are not tied together. However, in an economy like the US where the dollar is tied to the economy, the relative strength of the currency unit IS tied to economic growth.

 

I suppose the points that the individuals in the article were trying to make was this: If you intend to keep your currency stable, and you are printing more currency, then your economy must grow at the same rate you print currency.

 

There are quite a lot of reasons why you want the relative strength of your currency to remain stable. I won't get into them now, but when you hear stories about wheel barrels of money being needed to buy one loaf of bread, that is the gist of it.

[questor]

Here is some good information...

 

How does Fed ‘inject’ money into the system? - Answer desk - MSNBC.com

[Eclipse Now]

Your friend is right, currency production and economic growth are not tied together. However, in an economy like the US where the dollar is tied to the economy, the relative strength of the currency unit IS tied to economic growth.

 

I suppose the points that the individuals in the article were trying to make was this: If you intend to keep your currency stable, and you are printing more currency, then your economy must grow at the same rate you print currency.

 

There are quite a lot of reasons why you want the relative strength of your currency to remain stable. I won't get into them now, but when you hear stories about wheel barrels of money being needed to buy one loaf of bread, that is the gist of it.

 

That basically sounds like the argument in the references above —*that it's our money creations system that creates an overall imperative for growth that DEMANDS politicians encourage American and Australian population growth and consumption growth —*or else the wheelbarrows come out! :coffee_n_pc:

[Buffy]

I've hesitated to post on this one because you've used such loaded terms in describing the issue that you're after. "Malthusian" is rarely used as anything but an epithet among conservative economists!

 

Its a complex situation, but rarely is there the "severity" of problems indicated by your adjectives unless any of the policies--and *any* of them can be misused--are not taken in balance but are considered gospel truth. As an example, not raising taxes when they're needed--whether to fund foolish social services or foolish wars of opportunity--is usually a bad idea, and is one of the main sources of the effect that you're hinting at.

 

Governments can affect "inflationary pressure" in one of two ways:

• Lowering interest rates on government loan instruments--mostly providing liquidity to banks who turn around and loan money based on the fact that they can get higher rates from borrowers--fuels growth because it lowers the cost of borrowing. If this happens, the economy will overheat, increasing demand for labor and resources beyond the supply, thus raising their costs and thus raising inflation and reducing the value of the currency.
  
• Government spending money that is not supplied either by loans that are actually funded or by increased taxes. This is what is happening in spades in Zimbabwe where the government merely prints money as needed and inflation is running so high that prices change on an hourly basis. No stable government ever does this, BUT borrowing money with abandon can achieve at least part of this "goal" because people lose faith in your currency if your GDP does not grow as fast as you are borrowing funds. The US has managed to get by on borrowing because the economy is so robust and strong, but as that economy has faltered over the last 18 months or so, the value of the dollar to most other currencies--especially the Euro--has dropped dramatically, resulting in at least part of the inflation of oil prices because oil is dollar-denominated.
  

The fact is that these techniques must be intelligently balanced to maintain a *steady* growth rate in the economy. China is very successful right now, but their growth rate is far higher than average and has resulted in inflationary pressure on the Yuan (which is artificially tied to the dollar, much to the chagrin of most other countries, although to the benefit of the US), but all economists consider this situation to be unsustainable, ultimately resulting in a burst of inflationary effects that will be detrimental to the Chinese economy.

 

Note however that this is entirely due to a *successful* economy where consumption is actually *suppressed*. Its a wonderful counterexample to the loaded and negative verbiage in your original post.

 

In the US and Australia, we should be happy that the Chinese are doing these stupid things to their currency because in the short-term its allowing us to avoid pain. But in the long term its going to be ugly for everyone....

 

 

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs,

Buffy

[Eclipse Now]

This argument about money creation is not talking about bad policy, but bad design. They are not talking about bad use of the tools, but that the very tools themselves are broken. As the Financial Sense University says,

A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.

 

FSU Editorial: "How Debt Money Goes Broke" by Steven Lachance 12/12/2005

 

Or as Scientist (not economist) Chris Martenson states:

 

Consider these data:

 

* Money supply growth has gone parabolic. It took us from 1620 until 1974 to create the first $1 trillion of US money stock. Every road, factory, bridge, school, factory, and house built, every unit of economic transaction that ever took place over those first 350 years required the creation of $1 trillion in money stock. But it only took 10 months [edit: 2006 data] to create the most recent $1 trillion and I don't recall seeing an entire continent's worth of factories, schools or bridges built during that time. [Edit: that figure is now an astonishing 4.5 months as of March 2008]

* Household debt has doubled in only 6 years. Think about that for a minute.

* Total credit market debt (that's everything) was about $5 trillion in 1975, has increased by $5 trillion in just 2 years, and now stands at over $51 trillion.

* The wealth gap between the super-wealthy and everybody else is widening at a furious pace.

 

What's going on here? Could it be that the US economy is so robust that it requires monetary & credit growth to double every 6-7 years? Are US households expecting a huge surge in wages to be able to pay off all that debt? Are wealthy people really that much more productive than the rest of us? If not, then what's going on?

 

The key to understanding this situation was snuck in a few paragraphs ago; every single dollar in circulation is loaned into existence by a bank, with interest.

 

That little statement contains the entire mystery. If all money in circulation is loaned into existence it means that if every loan were paid back, all our money would disappear. As improbable as that may sound to you, it is precisely correct although some of you are going to consider this proof that I could have saved a lot in tuition costs if I had simply drunk all that beer at home.

 

But with a little investigation you would readily discover that literally every single dollar in every single bank account can be traced back to a bank loan somewhere. For one person to have money in a bank account requires someone else to owe a similar sized debt to a bank somewhere else.

 

But if all money is loaned into existence, with interest, how does the interest get paid? Where does the money for that come from?

 

If you guessed "from additional loans" you are a winner! Said another way, for interest to be paid, the money supply must expand. Which means that next year there's going to be more money in circulation requiring a larger set of loans to pay off a larger set of interest charges and so on, etc., etc., etc. With every passing year the money supply must expand by an amount at least equal to the interest charges due on all the past money that was borrowed (into existence) or else severe stress will show up within our banking system. In other words, our monetary system is a textbook example of a compounding (or exponential) function.

 

Yeast in a vat of sugar water, lemming populations, and algal blooms are natural examples of exponential functions. Plotted on graph paper they start out slowly, begin to rise more quickly and then, suddenly, the line on the paper goes almost straight up threatening to shoot off the paper and ruin your new desk surface. Fortunately, before this happens, the line always reverses somewhat violently back to the downside. Unfortunately this means that our monetary system has no natural analog upon which we can model a happy ending.

 

The End of Money | Chris Martenson

[Nitack]

Here is an interesting thought in this topic. Our currency is valued based on the strength of our economy. I don't believe our debt is taken into account though when those valuations are made. The US economy had a GDP of $13.8 Trillion in 2007. The national debt is $9.5 trillion. Shouldn't our debt devalue our currency? After all, it is kind of like having a mortgage on a home. If you owe 90% of the value of your home you should only be calculating 10% of your homes value to determine your net worth.

[modest]

Here is an interesting thought in this topic. Our currency is valued based on the strength of our economy.

 

Isn't it based on a lot more than that? If the strength of a country's economy stays constant yet the political leadership becomes unstable then currency would loose value (as an example).

 

I don't believe our debt is taken into account though when those valuations are made.

 

I would think it is. I don't know exactly how the foreign exchange works, but I'm rather sure it's ultimately people's perception that sets the value and people can take into consideration anything that changes their perception.

 

Am I way off base here?

 

~modest

[Eclipse Now]

Wiki on US public debt

Debt held by the public is all federal debt held by states, corporations, individuals, and foreign governments, but does not include intragovernmental debt obligations or debt held for Social Security. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.[1]

 

As of April 2008, the total U.S. federal debt was approximately $9.5 trillion[2], about $31,600 per capita (that is, per U.S. resident). Of this amount, debt held by the public was roughly $5.3 trillion.[3] If, in addition, unfunded Medicaid, Social Security, Medicare, etc. promises are added, this figure rises to a total of $59.1 trillion.[4] In 2007, the public debt was 36.9 percent of GDP [5], with a total debt of 65.5 percent of GDP.[6] The CIA ranked the total percentage as 26th in the world.[7]

 

It is important to differentiate between public debt and external debt. The former is the amount owed by the government to its creditors, whether they are nationals or foreigners. The latter is the debt of all sectors of the economy (public and private), owed to foreigners. In the U.S., foreign ownership of the public debt is a significant part of the nation's external debt (see also below). The Bureau of the Public Debt, a division of the United States Department of the Treasury, calculates the amount of money owed by the national government on a daily basis.[8][9][10][11]

 

The total debt has increased over $500 billion each year since FY 2003, considering both budgeted and non-budgeted spending.[12] The annual US budget deficit declined from $318 billion in 2005 to $162 billion in 2007, but is estimated to increase to $410 billion in 2008.[13] Annual deficits add to the debt. The Congressional Budget Office projects an annual budget surplus by 2012. However, this estimate is based on current law, which assumes sizable tax reductions will expire in 2010.[14] When the U.S. Government has a surplus, it may pay down its outstanding debt by paying back the principal of the outstanding bonds redeemed for payment while not issuing new bonds. The U.S. Government could also purchase its own outstanding securities on the open market if it was searching for a way to use a surplus to reduce outstanding debt that was not due for redemption in a given year.[15][16]

[Buffy]

Financial markets are ruthlessly efficient. No one should underestimate the ability of arbitragers to rapidly snuff out any imbalances in the system. Bubbles do occur like the recent real estate bubble and the previous high tech and tulip bubbles, but even then, the market only allows these to exist because *short term* profits are still available to be exploited.

 

A country's debt is most certainly taken into account when valuing its currency, but in spite of what you've been told, *debt is not inherently bad*. It can be risky to be sure, but taken in moderation, it is a sure way to increase *wealth* as measured by the growth in output of an economy. *That's* why the dollar does not crash in spite of that mind-bogglingly large amount of debt: people see the American economy as the largest (and therefore unlikely to crash), most consistent in steady and above average growth, having tremendous resources both in physical as well as intellectual property, and thus a "safe" bet to take all that leverage (a fancy euphemism for debt) and turn it into more of the same unstoppable economic juggernaut that its been for the last century.

 

In other words, for arbitragers, betting *against* the dollar is suicide in the long run.

 

In the last 4 years though, the Bush administration has been guilty of "talking down the dollar" in an effort to increase trade, but this has angered many of our key international economic (although certainly not *political*) partners who thankfully peg their commodities or currencies to the dollar, like the Petroleum Exporting countries and the Chinese. When the real estate bubble burst at the same time that the oil market went nuts, we got slammed because the government should have long ago started the effort to strengthen the dollar by raising interest rates (if we pay more for those loans, more people buy dollars!), and working to deflate the real estate bubble (also in need of higher interest rates and regulatory pressure).

 

Ooops!

 

So to reiterate: you can't call debt "bad": it has an essential role in creating growing economies. But when you start saying royally stupid things like "Deficits don't matter," then all heck breaks loose...

 

Like they say, "moderation in all things"....

 

The Middle East, with two-thirds of the world’s oil and lowest cost, is still where the prize ultimately lies, :)

Buffy

[Eclipse Now]

We're talking at cross purposes and seem to be having completely different conversations. You're talking about the history of the perception of the US dollar verses other currencies.

 

I'm talking about the future viability of any currency system in any nation that requires exponential economic growth on a finite planet. I'm talking about the fact that our money system loans money into existence with interest —*and therefore ALWAYS assumes that the future will be bigger and better than today —*otherwise all that interest means extra money that's got nothing backing it.

 

The tricky thing about exponential growth is that you don't see it till it's too late. Imagine human beings are in a bottle. We have plenty of sustainable growth medium in the bottle, but cannot use more outside the bottle. Say it takes a minute to 'double' the number of human beings in the bottle. The bottle is 'full' at midnight. At what point is the bottle 1/8 full? 1/4 full? 1/2 full? The answers?

1/8 full = 11:57

1/4 full = 11:58

1/2 full = 11:59

FULL = 12:00

 

Who, when they were looking around the 'bottle' of planet earth, would think there was a problem when 7/8th's of the planet's resources are still available?

 

What I'm trying to do is imagine an economic model that allows for when the earth is 'full' —*whenever that is. (I don't want to get off track and discuss when it will be 'full' —*but just the hypothesis).

 

When I quote the data below, I'm actually not interested in the state of the US economy —*but the exponential debt trends that it represents as a test case for fiat currencies with interest built into the system. Interest DEMANDs that the future be bigger than today. What happens when it simply physically can't?

 

 

* Money supply growth has gone parabolic. It took us from 1620 until 1974 to create the first $1 trillion of US money stock. Every road, factory, bridge, school, factory, and house built, every unit of economic transaction that ever took place over those first 350 years required the creation of $1 trillion in money stock. But it only took 10 months [edit: 2006 data] to create the most recent $1 trillion and I don't recall seeing an entire continent's worth of factories, schools or bridges built during that time. [Edit: that figure is now an astonishing 4.5 months as of March 2008]

* Household debt has doubled in only 6 years. Think about that for a minute.

* Total credit market debt (that's everything) was about $5 trillion in 1975, has increased by $5 trillion in just 2 years, and now stands at over $51 trillion.

* The wealth gap between the super-wealthy and everybody else is widening at a furious pace.

[Buffy]

We're talking at cross purposes and seem to be having completely different conversations. You're talking about the history of the perception of the US dollar verses other currencies.

 

I'm talking about the future viability of any currency system in any nation that requires exponential economic growth on a finite planet.

No actually we're talking about the same thing, its really just an issue of understanding basic mathematics and the fact that the Malthusian view of "limited resources" has always been trumped by technological advances and changes in human behavior.

 

200 years ago, Thomas Malthus basically argued that population grows geometrically while food can only grow arithmetically, and therefore we were even back then on the brink of extinction.

 

Then the Industrial Revolution came along and had two effects: technology dramatically improved the productivity of food production, and the growth of a more complex society based on automation rather than raw labor meant that average family size dropped dramatically. Today in most Western countries there is *negative* population growth, and growth is only sustained through immigration from countries that are still only in their early phases of industrialization. India's population growth rates have begun to slow, and China with its one-child-per-family policy has almost instantaneously put the brakes on growth.

 

Today, no one talks about population outstripping food supply, but Malthusianism continues with new appeals to different sets of limited resources such as oil.

 

While of course it would be foolish to say that we can procreate like crazy and technology will always save us, there is still clearly a range of "smart growth" that's quite clearly sustainable unless by some miracle technological advancement stops in its tracks. Not that it never will: the Middle Ages were great proof of that, but Rome's fall was not due to the *inherent* nature of geometric progression, only due to foolish politicians letting the growth go out of balance with progress!

 

And that's the *correct* part of your argument: in the US today, rapid growth in debt is a concern, but *not* simply because its "geometric," its that it is not being *controlled* and *balanced*. This is why most rational economists recognize that overall GDP growth for most countries should remain at 2-4% per year: if they "overheat"--like China--there are horrific consequences down the road when resources--even easily "renewable" ones like labor lag demand.

 

But if you keep the demand and supply in balance, then all that debt makes it so much easier to fund the technological investment that gets you to more abundant resources and relieve the pressure.

 

The last point here is that its important *not to fear geometric growth*!

 

Here's a simple exercise: get a piece of graph paper and draw a graph of [imath]y=x^2[/imath] with the range on the x-axis going from 0 to 10. Now take a separate piece of graph paper and graph the same function but label the x-axis 0 to 100 in the same space as the first graph. Now lay one on top of each other. You'll note they're the same. And yet the *entire* first graph is that very flat section at the left end of the second graph.

 

Not so scary anymore I hope.

 

The point here is that you can get scared about debt growing at a geometric rate until you think about the fact that the economy is growing along at about the same rate. You should still punish the politicians who have a cavalier attitude about the relationship between the two, but it's really not as *inherently* scary as you make it sound.

 

Are there limits to the resources on the Earth? Sure, but you know what our technology is doing? In energy, we're heading straight toward getting the majority of our energy from the sun in one form or another (solar cells, solar heating, wind, tides, hydro, etc.). We're spending far more time recycling rather than mining resources. We're working on sustainable approaches to farming and (finally, just before the fish "run out") fishing.

 

And by industrializing the third world we're bringing population growth rates down to a level that even Malthus would think are sustainable!

 

I personally am very thankful for Malthus' effect on economics in showing the need for sensible growth, but at the same time, he has generated an unending stream of "Chicken Little's" who are forever predicting the end of the world as we know it.

 

Its never going to be easy, but if we're smart we might last as long as the dinosaurs.

 

Of course in 10 billion years we all get burned to a crisp when the Sun goes nova, so if you really *want* to be a pessimist, that's the ultimate answer. :)

 

Conservation may be a sign of personal virtue but it is not a sufficient basis for a sound, comprehensive energy policy, :phones:

Buffy

[Eclipse Now]

Thanks for that detailed reply, and there is much there that I agree with. In terms of the Malthusian argument itself, I've been following the 'peak oil' debate for 4 years now, before it became mainstream, so I'm quite aware of the oil = agricultural collapse = dieoff.com arguments.

 

 

I became so concerned about these matters a few years ago I started campaigning about it. This is no small feat when I actually come from a humanities background, not a technical background. I think the dieoff argument above is an extreme scenario only possible if we are REALLY stupid and nuke each other over oil. But the risks are there.

 

The overwhelming argument I've heard is that this is the lifetime of 'peak everything'. All concentrated metal ores, concentrated conventional fossil fuels and concentrated non-renewable resources vanish in the lifetimes of babies born today if we keep increasing them at today's rates of consumption. (Actually, some of these models assume concentrated iron ore bodies runs out at only 2% growth pa, and I think the world average today is 10%!)

 

This is all very interesting, and yet I'm also watching increasing deployment of renewable energy, using renewable materials, nano-tech on the way, etc. It's the ultimate race!

 

But the question was what to do when we DO 'fill the earth' whenever that is and whatever it looks like. Aren't we just postponing that question discussing a history of previous Malthusian prophecies? How are we going to structure our finances in a 'steady state' economy?

[Buffy]

But the question was what to do when we DO 'fill the earth' whenever that is and whatever it looks like. Aren't we just postponing that question discussing a history of previous Malthusian prophecies?

Its certainly a race, but in my mind the question of what we do when we "fill the Earth" is moot.

 

The thing to realize about *any* of these resources is that we'll never actually "run out." We'll never suddenly wake up one morning and there's no oil. As I heard one economist try to explain it, you may have to scrape harder and harder to get the last drop of milk from your cereal bowl, but there will always be some there. You have to realize that its not "running out" that forces the change, its the steady--and usually *slow*--increase in the price of getting the resource that causes the development of alternatives.

 

Sure it may be fantastical--and obviously expensive--to talk about "mining" hydrogen from Jupiter, but its *not* a fantasy.

 

So my view is that its not about "what do we do when we run out of everything" its "what do we do to stay ahead of the resource depletion curve?"

 

In my mind "running out" is so far in the future that contemplating it is indeed counting the number of angels that dance on the head of a pin. Its certainly not going to happen in my lifetime and not my daughter's or her kids when they come along. Wasting time on figuring out the running out part just takes away from useful brain cycles spent figuring out what we do *now*, and that's *not* going to be easy...

 

Pollution is nothing but the resources we are not harvesting. We allow them to disperse because we've been ignorant of their value, :hihi:

Buffy

[Eclipse Now]

Pollution is nothing but the resources we are not harvesting. We allow them to disperse because we've been ignorant of their value,

I agree with that one! Very "Cradle to Cradle" in the design sense.

 

However, I have to disagree on the 'not running out' thing. I understand that cost increases around the peak and then decline of resources. What do you think will happen to the American economy when oil 'suddenly' costs $300 a barrel in about 5 years... rationing during 10? The crisis hits not at the end of a resource's lifespan, but about half way when the conventional 'easy' reserves run out and the rest of the resource is non-conventional, not as densely packed, concentrated, and easy to extract. The rate of extraction peaks. The oil/metal/mineral in question can no longer meet demand. Prices rise... substitution for new products occurs, use of the product scales back... and industries transform or die.

 

What about this, based on 2% growth in consumption run from USGS reserves data?

 

What will the world be like when we have run out of copper or steel? The average building today relies upon a great quantity of these resources for its construction. Faced with these facts, we can easily imagine a future in which industry has completely re-engineered its handling of material resources. After all, there seems to be no other choice.

1Brown, Lester, Plan B 2.0, New York: W. W. Norton, 2006. p. 109

 

Or read this New Scientist article.

We need to be careful distinguishing between 'reserves' and 'resources'.

 

Reserves are what is economically extractable with today's technology. Resources are all the 'stuff' that is there, but may not be extractable at a cheap enough price to meet the large volume of demand.

 

Mining hydrogen from Jupiter is not a reserve, it's a fantasy resource for now. I am talking about the end of all 'conventional reserves' of non-renewable minerals and metals —*and I'm afraid that unless a Star Trek 'Replicator' arrives in your daughter's lifetime, then it probably is going to happen. A similar idea is flow rates to meet demand. All the Tar Sands and unconventional oil sources in the world are not going to stop 'peak oil' because they simply cannot be extracted fast enough. I'm shocked and amazed that Canada can do 1 million barrels a day from Tar Sands... that's AMAZING! AND they are talking about scaling it up to maybe 3 MILLION barrels of oil a day by 2015! That's utterly GOBSMACKING! Wow!

 

But the problem is that world demand for is expected to increase by at least 1mbd / year after 2010. Even tar sands amazing growth will pale into insignificance compared to the rising demand from India and China and of course the west's 2% exponential growth rate. Alternative, non-conventional gluggy foul high sulfur oil is simply not going to flow as fast as the conventional stuff, nor will it sell for the same cheap price. The age of cheap oil is over — the age of sweet oil is turning sour. It's just a fact. It doesn't mean the end of the world, the end of humanity or even the dieoff graph above, but it does mean huge changes starting within the next decade or so. They could be overwhelmingly positive changes if the world got cracking in the right direction. I doubt it. Democracy is too short sighted. I've briefed politicians on the scientific credibility of peak oil —*it's now pretty much mainstream science in Australia and about 50% of Aussie geologists believe we are already at peak oil right now... and will see the permanent decline soon. But the politicians are simply terrified of the idea of even mentioning the 2 words 'peak oil'. Our ABC has run a number of specials on peak oil, I've spoken with politicians about this, I know that every politician in Australia has had the data explained to them by experts... but they do nothing. :hihi:

 

Catalyst: Real Oil Crisis - ABC TV Science

Four Corners Broadband Edition: Peak Oil

Crude - the incredible journey of oil - Broadband edition - ABC Science

 

So, back to the question I forgot to include in my post above (but edited in afterwards).

 

How are we going to structure our finances in a 'steady state' economy?

[Buffy]

Three simple words: Follow The Money.

 

T.Boone Pickens is rich. And he's a smart guy (unlike a lot of politicians who were born with a silver oil well in their mouths!). And he doesn't want the world economy to melt down because even with all his dough, he's gonna have a rough ride.

 

So what's he doin'? PickensPlan that's what.

 

Can we do a massive conversion to non-oil in a decade? There are practical plans, maybe even plans you could consider modest, to do it possibly in my lifetime.

 

I bring up the Jupiter/Hydrogen source because while it may not be reasonable in the next hundred years, I'd say that given man's history in the last hundred it would be foolish to say it won't be done in the next 500!

 

We're arguing guesses here and I'd say we were in violent agreement.

 

I'd just always say that time spent assuming the worst case and no ability to do anything is time wasted!

 

You know, it's at times like this, when I'm stuck in a Vogon airlock with a man from Betelgeuse, about to die of asphyxiation in deep space, that I really wish I'd listened to what my mother told me when I was young, :hihi:

Buffy

[Eclipse Now]

You know, it's at times like this, when I'm stuck in a Vogon airlock with a man from Betelgeuse, about to die of asphyxiation in deep space, that I really wish I'd listened to what my mother told me when I was young,

 

I've forgotten the quote.... all I can remember is something of the Vogon poetry. "Ode to a lump of green putty I found under my armpit one midsummer morning".

 

PS: I happen to love the Pickens plan as it gives the USA a bit more time to adapt to the shock of peak oil... but don't forget North American natural gas has already pretty much peaked. If you adopted the Pickens plan with a "war time economy" emergency budget, it's still not sustainable. You'll get some years of transport out of gas, but not a lot.

 

I guess I'm looking for a renewable civilisation running on renewable energy using renewable materials. Maybe nano-tech holds the keys. We'll see. Interesting times hey?