Energy, Careers and Gold:
Good Morning Middle America, your King of Simple News is on the air.
I’m taking a few days off for a camping trip with our kids and grandkids. I hope to reinvigorate my remaining brain cells and be back on the air Monday.
Have a great week-end and remember, it ain’t over till it’s over and we’re gonna win.
U.S. News: I’ve read recently that during his eight years in office, and even with control of Congress, George Bush has not increased the production of oil in the U.S. Some believe that there is a conspiracy for holding the price of oil up to benefit Mr. Bush’s “Big Oil” friends. Now there is a conspiracy that has legs…about two inches long.
The current Bush presidency didn’t increase domestic production for the same reason that the administrations of Richard Nixon, Gerald Ford, Jimmy Carter, Ronald Reagan, George H.W. Bush, and William Jefferson Clinton didn’t increase production….WE REACHED PEAK OIL IN 1970!!!
Don’t get me wrong, I wouldn’t want a little thing like the truth to get in the way of a perfectly good conspiracy; otherwise we would have to take some sort of action to prevent total chaos. And that would go completely against our current form of planning which is best described as “crisis management.”
I also read a statement recently that said ethanol could solve all of our energy problems and make us totally energy independent for ever and ever. Another said that maybe when we start drilling in the Gulf of Mexico, we might find enough oil to last us hundreds of years.
To these folks I say this, “Do the people at the asylum know that you’re out?”
If all of the corn in the United States were used to produce ethanol, it would provide approximately 7% of the fuel consumed in autos alone. NO FOOD JUST FUEL!
Is ethanol a new concept? Those old boys down in Tennessee have known how to make corn burn with a blue flame for some time now, it’s not a new concept, just a ridiculous concept that is creating massive subsidies for the anointed few. You now get to pay for fuel at the pump and at the grocery checkout .
We have known about peak oil since 1949 when M. King Hubbert said, “The fossil fuel era will be of a very short duration.” Yet suddenly, it has become the news that can’t be so. I have friends in nearly every sector of the oil biz, and not one of them believes this nonsense about huge new finds and cheap oil coming back.
So what’s a body to do? Certainly waiting for the fecal matter to come into contact with the whirling apparatus does not seem a wise choice.
On the subject of where we go from here, I promised to say something about gold. I’m not a “buy gold and hold,” guy. I’m also not an expert on the subject, but Mikeronomics leads me to this belief; gold is not a standard for currency and therefore has no set redemption value. The value of gold is simply based on belief or perception.
I have over the years found that belief standards are subject to change. Antiques quickly come to mind. During periods of economic prosperity, disposable or discretionary income is plentiful and antiques become precious heirlooms of considerable value. During periods of economic decline, a person’s perceived value wanes and antiques become old junk.
Gold has very little industrial value and is primarily hoarded. I have said many times that a hungry man would trade a pound of gold for a sack of potatoes.
As far as the world going back on the gold standard? Don’t hold your breath.
The American dollar is certainly in trouble and likely to get worse, as our leaders continue the promise of growth as the all-curing elixir. Nothing could be further from the truth, but like the ethanol example, what does truth have to do with anything?
But is gold the hedge against the dollar that those who sell gold promote it to be? I remember antique dealers saying that “Antiques are better than money in the bank.” What they really meant was; better for them to have your money than for you to have it in the bank.
The U.S. will always have an economy that provides necessities, real goods and vital services. It will be the massive fringe sectors of our economy, the non-essentials, which will continue to fail as we fall deeper into recession.
Consider your current occupation. Is it necessary and somewhat sustainable? If the answer is “Are you kidding?” maybe this is a good time to reconsider your career.
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The best use of gold at this time is as a point of reference ; a barometer. As the price of gold rises, the value of your dollar goes equally in the other direction. As the price of gold falls, your dollars rises in value equally. This gives everyone a really good idea of the monetary value contained in you wallet or pocket at this time.
Regarding our country’s economic policy; if we allow the exponential function to play out on it’s own, neither the dollar or gold will have any value what so ever. But if that happens, this trivial issue will be so unimportant as to have never existed. -bb
Billy B,
While gold may be some indicator of dollar value,
my fear is that gold will skyrocket from speculation as it has done in the past without any substance to back it….just like the dollar!
We spend billions and billions of $$$$$ in resources such as fuel and machinery to extract gold, laying waste to stream beds and leveling mountains, after which it is reburied in another place and guarded. Hmmm.
Just a question.. When the dollar is losing it’s value, is there another substance that might be used for barter in place of dollars?? Something that might have a more stable value, and not be subject to the whim of the u.s. government ?? I’ve heard that the Euro is becoming more in demand for drug, and weapon black market trades.. I consider those unregulated markets.. True free markets.. WmA..
“The multitudes remained plunged in ignorance of the simplest economic facts,
and their leaders, seeking their votes, did not dare to undeceive them.”
— Winston Churchill
“When we view the range of creative information that is offered to the public we cannot wonder that people are confused. We may wish that we could have rapid growth of the rate of consumption and have the reserves of U.S. coal and oil last for a large number of years, but very simple calculations are all that is needed to prove that these two goals are incompatible. At this critical time in our nation’s history we need to shift our faith to calculations (arithmetic) based on factual data and give up our belief in Walt Disney’s First Law: “Wishing will make it so.”
And this was written in 1978 by Dr. Albert Bartlett. -bb
Willy,
The Massai tribe in Africa considers the person with the most cattle to be the wealthiest. Their culture is built around the cattle who provide the nourishment, leather etc. that sustain life as they know it.
Their system makes far more sense to me than the value that we place on gold. I’m not saying we will ever lose our belief that gold is valuable, but the possibility certainly exists.
On the other hand, the value of food, shelter, fuel, clothing, farm equipment, livestock, will never be called to question. I prefer to have the latter mentioned in comparison to gold. One is real value, the other is a perceived value.
At some time, we will have to totally rethink our monetary system as M. King Hubbert and others suggested so many years ago.
Billy B,
Your comment from Albert Bartlett regarding the “creative information” that people receive reminds me of a current local campaign.
I am watching a local election where I know both candidates. One is spinning information that people want to hear, the other is a proven successful farmer and businessman, who is telling it like it really is.
These both happen to be Republicans and are going tooth and tong in the primary. I am backing the businessman who is a truth teller and solid citizen. His competitor runs more lies than truths or “creative information.” I’m hopeful that my guy wins as we need him badly in these times.
The point is that you can’t depend on sound bites or nasty political ads for your information. It’s important to spend a little time on research.