by
Adam Taggart
Energy
by
Gregor Macdonald
Executive Summary
- How to cut household exposure to oil prices
- Spending is shifting from road to rail transport. You need to get out in front of this.
- How to take advantage of the energy arbitrage that rail transport will offer in future years
- Important case studies of what's to come
- The big change ahead (and the argument for optimism)
If you have not yet read Part I: Getting On The Train, available free to all readers, please click here to read it first.
Portland, Oregon is a city well known internationally for its commitment to sustainability. Over the years, the downtown area has been wisely restored into a very pedestrian-friendly streetscape. And while Portland continues to have problems – mainly a weak economy that could benefit from greater diversification – the city continues to attract people from all over the world who are looking for a better place to ride out some of the problems now facing developed economies.
Over the past year, since moving to Portland myself, I've had a chance to do some accounting of how much I've reduced my own exposure to oil. Let me first say that getting oil out of the household budget was not my only reason for moving to Portland. However, as someone who started looking at these issues 10-15 years ago, the prospect of greatly reducing my oil consumption was a key factor in my decision to relocate.
Now, while it's true that reduced oil consumption is more common for everybody living here in Portland, the other important element (and this will seem obvious) is that living in other cities and regions typically means a greatly increased exposure to oil. So while the cost of food, medical care, and many goods is just as expensive here in Portland as elsewhere, it is now rather sobering to consider the burden of high oil prices in other regions from my new vantage point – especially given that oil has found a new equilibrium price around $100 a barrel.
By moving to Portland, we completely shifted the core of our energy consumption to natural gas and also electricity, which in the Pacific Northwest is largely sourced through hydropower. Electricity rates in the Pacific Northwest are either the lowest or among the lowest in the United States. Also, because of the rich offerings in public transportation choices, we were able to drop one of two cars. But there's more…
Reducing Your Exposure to Oil Prices
PREVIEW by Gregor MacdonaldExecutive Summary
- How to cut household exposure to oil prices
- Spending is shifting from road to rail transport. You need to get out in front of this.
- How to take advantage of the energy arbitrage that rail transport will offer in future years
- Important case studies of what's to come
- The big change ahead (and the argument for optimism)
If you have not yet read Part I: Getting On The Train, available free to all readers, please click here to read it first.
Portland, Oregon is a city well known internationally for its commitment to sustainability. Over the years, the downtown area has been wisely restored into a very pedestrian-friendly streetscape. And while Portland continues to have problems – mainly a weak economy that could benefit from greater diversification – the city continues to attract people from all over the world who are looking for a better place to ride out some of the problems now facing developed economies.
Over the past year, since moving to Portland myself, I've had a chance to do some accounting of how much I've reduced my own exposure to oil. Let me first say that getting oil out of the household budget was not my only reason for moving to Portland. However, as someone who started looking at these issues 10-15 years ago, the prospect of greatly reducing my oil consumption was a key factor in my decision to relocate.
Now, while it's true that reduced oil consumption is more common for everybody living here in Portland, the other important element (and this will seem obvious) is that living in other cities and regions typically means a greatly increased exposure to oil. So while the cost of food, medical care, and many goods is just as expensive here in Portland as elsewhere, it is now rather sobering to consider the burden of high oil prices in other regions from my new vantage point – especially given that oil has found a new equilibrium price around $100 a barrel.
By moving to Portland, we completely shifted the core of our energy consumption to natural gas and also electricity, which in the Pacific Northwest is largely sourced through hydropower. Electricity rates in the Pacific Northwest are either the lowest or among the lowest in the United States. Also, because of the rich offerings in public transportation choices, we were able to drop one of two cars. But there's more…
by
JW
by
Chris Martenson
Executive Summary
- Adapting our behavior is a must at this point. We really don't have the option not to.
- The number of claims on real wealth is increasing. How much of the "real wealth" do you own?
- Our economy is now truly a confidence-based system. What will be the fallout when that confidence falters?
- What are the key knowns & unknowns we need to be addressing now?
If you have not yet read Part I: In a Bad Spot, available free to all readers, please click here to read it first.
What is completely unknown at this point is what will happen to our very complex and interwoven financial system when it finally comes to grips with the idea that old-style growth is never coming back. One worrisome idea is that it will experience something akin to cardiac arrest and simply break down one day.
Maybe this will happen, maybe not. I will note that the degree to which the central banks have set themselves up as the ultimate saviors of the system has both an upside and a downside, and it is the downside that worries me the most at this point.
While all the trillions of dollars of intervention have stabilized the system, which I consider to be a good thing, the downside is that the central banks have placed themselves in a position where they had better succeed. If not? Then we discover just how important confidence is to a monetary system built, owned, and operated on trust. My guess is "very."
If We’re Ever Going to Take Control of Our Destiny, the Time is Now
PREVIEW by Chris MartensonExecutive Summary
- Adapting our behavior is a must at this point. We really don't have the option not to.
- The number of claims on real wealth is increasing. How much of the "real wealth" do you own?
- Our economy is now truly a confidence-based system. What will be the fallout when that confidence falters?
- What are the key knowns & unknowns we need to be addressing now?
If you have not yet read Part I: In a Bad Spot, available free to all readers, please click here to read it first.
What is completely unknown at this point is what will happen to our very complex and interwoven financial system when it finally comes to grips with the idea that old-style growth is never coming back. One worrisome idea is that it will experience something akin to cardiac arrest and simply break down one day.
Maybe this will happen, maybe not. I will note that the degree to which the central banks have set themselves up as the ultimate saviors of the system has both an upside and a downside, and it is the downside that worries me the most at this point.
While all the trillions of dollars of intervention have stabilized the system, which I consider to be a good thing, the downside is that the central banks have placed themselves in a position where they had better succeed. If not? Then we discover just how important confidence is to a monetary system built, owned, and operated on trust. My guess is "very."
by
Adam Taggart
by
JW
by
Gregor Macdonald
Executive Summary
- Why pressures to the downside have less impact when the global economy is weak
- Why oil's new floor is $80
- The 'upside risk' story for oil prices
- Why prices will march up to the $150-175 range over the next 2-4 years (with increasing sensitivity to spikes of over $200+ per barrel)
If you have not yet read Part I: The Repricing of Oil, available free to all readers, please click here to read it first.
I encourage others to read the entire recent paper on Nominal GDP (NGDP) Targeting by Michael Woodford (recently delivered at Jackson Hole) or to simply read its coverage, either by Joe Weisenthal at Business Insider or Paul Krugman at the New York Times. In short, I take the appearance of the Woodford paper (link opens to PDF) as the inevitable next-step solution to the problem of unpayable debt and scarce resources. By loudly and flagrantly voicing a policy pursuit of inflation, Nominal GDP Targeting (which has been discussed for some time in economic circles) would be the next iteration of behavioral prodding in Western economies.
More importantly, the growing acceptance of NGDP targeting in policy circles simplifies the battle that began a decade ago: the struggle to counter emerging scarcity of natural resources with the provision of greater and greater amounts of cheap credit. Within the contours of this battle lies the answer as to whether oil’s next major move is downward, in a deflationary collapse, as global demand vanishes in a new economic crisis; or whether oil’s next major move is higher, as the five billion people in the developing world pull the OECD along in a new expansion.
Modeling the next move in oil prices is, of course, a very different task than it was ten years ago…
The March to $200+ Oil
PREVIEW by Gregor MacdonaldExecutive Summary
- Why pressures to the downside have less impact when the global economy is weak
- Why oil's new floor is $80
- The 'upside risk' story for oil prices
- Why prices will march up to the $150-175 range over the next 2-4 years (with increasing sensitivity to spikes of over $200+ per barrel)
If you have not yet read Part I: The Repricing of Oil, available free to all readers, please click here to read it first.
I encourage others to read the entire recent paper on Nominal GDP (NGDP) Targeting by Michael Woodford (recently delivered at Jackson Hole) or to simply read its coverage, either by Joe Weisenthal at Business Insider or Paul Krugman at the New York Times. In short, I take the appearance of the Woodford paper (link opens to PDF) as the inevitable next-step solution to the problem of unpayable debt and scarce resources. By loudly and flagrantly voicing a policy pursuit of inflation, Nominal GDP Targeting (which has been discussed for some time in economic circles) would be the next iteration of behavioral prodding in Western economies.
More importantly, the growing acceptance of NGDP targeting in policy circles simplifies the battle that began a decade ago: the struggle to counter emerging scarcity of natural resources with the provision of greater and greater amounts of cheap credit. Within the contours of this battle lies the answer as to whether oil’s next major move is downward, in a deflationary collapse, as global demand vanishes in a new economic crisis; or whether oil’s next major move is higher, as the five billion people in the developing world pull the OECD along in a new expansion.
Modeling the next move in oil prices is, of course, a very different task than it was ten years ago…
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