A financial system in which the face value flow of funds was vastly greater than the face value flow of goods traded is a bubble. The “bailout”, or payment of vast sums of ordinary people’s money to bankers to keep this crazed system going, could never make it sane.
Allowing bad banks to go to the wall was not just possible, it was essential. Instead the poor are in deep hock simply to maintain the lifestyles of awesome consumption led by the political and financial elites. That is the immediate cause of the services cuts and tax increases sweeping the Western world. The fact this is no solution at all to funny money explains why trillions were wiped off world stock markets last week. The explanation is simple; those trillions never existed in the first place.
There is some quite good analysis of the current situation by Will Hutton . But while his analysis of the problems is basically correct, he demands a radical solution and then proposes a sticking plaster. Reducing the stock of debt by deliberate inflation is not going to solve the problem for a decade, and is predicated on making part of the situation still worse by creating yet more, even more worthless, fictitious money.
Britain is not immune to this at all. UK debt is about 410% of GDP – worse than Italy. Crazed right wing ideologues believe that, as in the UK there is a much higher ratio of private sector to public sector debt, this does not matter. That is nonsense. It might have some validity if that private debt related to the purchase of capital machinery for manufacture, but actually the vast majority of it is related to consumption, and of course most of all to sustaining a housing market inflated to ludicrous prices. Much of the rest relates to credit card funded holidays in Ibiza.
A total collapse of the UK housing market is one of the necessary and highly desirable outcomes of the current crisis. The really radical action that is needed is a repudiation of debt by governments and by ordinary people.
Government could have paid individuals and companies their full bank deposits, and let the bad banks collapse, for less than a quarter of the cost of the bailout. That approach is needed now, with government repudiating debt while guaranteeing individual deposits as the banks fall. We should then make new banking institutions based on the financing of actual trade and investment projects, not on speculation in derivatives. There will be awful dislocation effects, but less extreme than the suffering over the next thirty years of everybody working for the bankers.
Governments, of course, will not be that radical. But people with time will see that they have been duped; a (in one sense) fortuitous series of events has done more in this last five years to improve the vision of the blinkered masses as to the true nature of their masters, than anything in the preceding six decades. I would dearly like to see a repudiation of private debt, with neighbourhood solidarity in physical resistance to throwing people on the streets, to bailiffs and to essential service cut-offs.
I think there is a serious possibility that this will not sound as improbable in a few years time as it does today.
Tom Welsh, I was thinking similarly about my few assets. But a house is a house. And that is it’s value. It cannot be confused with price (that is, my house is worth xxx) because that is the considered market value at a given time. But it is still just a house. Savings are a worry, and you and me are likely to suffer, because we saved when money had value. With a crash, or the failing of a bank, what little money we saved becomes worthless. It has happened before. Lots of people who could see this coming have invested in gold. But gold is only gold. It has a few uses like trinkets, electronic-circuits and book-lettering, but you cannot eat it. It only has real intrinsic value while people believe it has. It’s a confidence thing again. You can’t print gold (well not yet) but a few years back nobody would have believed that diamonds could be synthetically produced. There are things that money and gold cannot buy. They are the important things. Cheer up.
Craig, it was planned to be this way, there is a reason behind all that is happening!. I think it is inextricably linked to the running out of global resource.
“The new European energy model out to 2030, by Jérôme Defaix”
http://www.leap2020.eu/MAP3-July2011-Contents_a6877.html
No wish to feed the troll but suffice to say his slur about the veracity of the Holocaust is outrageous and hurtful both personally and to the relatives of those who died. I realise what his bullying agenda is about of course – to squelch and squash any mention of Israel.
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Interesting that he answers to both handles.
I’ve noticed the link to my last post does not work. For some reason it posts two spaces in the link that are not there in the original. They appear as squares in the link on the www line. These can be removed and it then plays all right. Don’t know why!
http://www.youtube.com/watch?v=b3-vwYJiD8g&feature=player_embedded#at=88
It is worth watching though.
Just as our masters are away on their well earned summer hols, sunning themselves, all hell breaks lose in north London and there seems very little the over-worked police force could do about it. And none of this could have been forseen and prevented or so it seems. However with all the massive cuts in police force spending on the cards, could this tardyness in getting the riot squads out of bed or the pub on a saturday night be something of a wake-up call to Cameron and Clegg, if you cut us down, the towns and cities are gonna burn big time.
“No wish to feed the troll but suffice to say his slur about the veracity of the Holocaust is outrageous and hurtful both personally and to the relatives of those who died. I realise what his bullying agenda is about of course – to squelch and squash any mention of Israel.”
I can’t wait for Angrysoba to read this one!
You cite with glee that Atzmon fascist, and I point out that he’s a Holocaust denier who blames Jews for what happened in WWII, and now you try to turn it around.
Do you know how hurtful your sources have been to the survivors of the Holocaust? If I point it out, then I’m doing the right thing.
Orwellian,
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Re: Tarsands: “It’s at best a return of 2.5 to 1.”
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Well the ratio’s still positive! And according to Wikipedia, the ratio is actually 5 or 6. And there are continual improvements in the technology.
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As for “Production rates will never get above 3 or 4 million barrels a day.”
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Well, that’s all that’s currently planned for, but if we can produce 3 or 4 million barrels a day, there’s no reason why we cannot double it or quadruple it or multiply by ten. It’s just expensive — production cost around $50.00 per barrel, versus $2 or $3 in Iraq.
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and when you say “US consumption of liquid fuels is about 20 million barrels a day,” remember that the US is still the World’s third largest producer (7.8 million bpd), so they don’t need anything like 20 million bpd from Canada (they get one million bpd from Venezuela, and similar amounts from Mexico, Saudi and West Africa).
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Also, US consumption is now down to about 18,690,000 bpd (CIA Fact book) and falling.
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When you say “tar sands are totally unsustainable” you are correct. But they are sustainable for a 100 years or so. In fact Canada and Venezuela could supply the entire world for about 100 years. So no, there is no energy crisis now. Just expensive energy reflecting the fact that the most of the cheap stuff that just gushes from the ground when you drill a short well has been used.
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So sorry to disappoint you, but there is no energy crisis. The real problem, if we have one, is that there’s so much readily accessible hydrocarbon energy available, we may eventually asphyxiate ourselves on the fumes.
Canspeccy
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I’m sorry, but you’re very ill informed. Tar sands are not scaleable as you imply. Remember that the gas required for the process comes from Canada. Explain how they will increase that and carry on supplying gas to the US? By the way I have seen figures as low as 1.5 to 1 for return on Tar Sands, when all the inputs are taken into account. Who is going to be able to afford to pay for this expansion? What about the infrastructure and processing facilities to increase production 2x or 10x ? Don’t forget the energy input and money to do that – it’s not just ‘expensive’. And that’s not to mention the environmental impact. Venezuela will have similar problems to Canada, neither will ever supply daily production on the scale of Saudi Arabia.
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No energy crisis? The fact that energy prices are going beyond the affordability of many countries and causing skyrocketing food prices due to the dependence on petroleum of our modern agricultural system is crisis enough. This was the catalyst for the unrest in the Middle East. Also, there are power shortages all over the world, especially in those countries that do most of the manufacturing. China for instance simply cannot get enough coal. I’m sorry, to disappoint YOU, but there really is an energy crisis unfolding. At the moment it is mostly a price crisis as we traverse the bumpy plateau, but shortages will occur soon enough. They already are doing so in non-western countries.
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It is true that US consumption has stagnated and may be falling, but this has more than been made up for by the increasing demand in other countries and by the worldwide population increase (230,000 a day I believe). Hence Saudi Arabia selling more oil to China for instance.
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By the way, our modern civilisation apparently needs a return of at least 10 to 1 in order to sustain it. Nothing personal, but I’ve heard all these arguments before, and they do not stand up to scrutiny. You didn’t mention Net Energy once and you still aren’t considering the fact that much of this production is becoming unaffordable. You admitted yourself that it was ‘expensive’. Well exactly.
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Try these sites:
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http://www.energybulletin.net
http://www.theoildrum.com
http://richardheinberg.com/
http://www.postcarbon.org/
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I won’t be adding any further replies to this debate, because quite frankly, I don’t have to. The evidence speaks for itself.
[…]The Canadians are also said to have set up a special lobbying team in London and identified Shell and BP – two big tar sands investors – as “like-minded allies” in the struggle to have tar sands accepted.
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Shell’s chief executive, Peter Voser, made clear last week at the company’s half yearly financial results that tar sands was one of the key areas of the business that was delivering production growth -both now and more in future. BP has also made no secret of its determination to pursue its interests in Alberta.
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But FoEE is angry because it believes the Canadians are deliberately marketing tar sands as an environmentally friendly product by making references to initiatives – such as carbon capture and storage – to reduce the CO2 emissions. During the Gulf of Mexico oil spill, the Canadian government spoke out about the safer operations in Alberta while the country’s democratic credentials have been compared with less savoury regimes where oil is extracted, argues FoEE.
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“The overriding message is that Canada is not exporting dirty oil, but clean energy. One of the dirtiest fuels on the planet is being sold as clean, stable and secure.”
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The Canadian government was contacted by the Guardian but did not comment.
http://www.guardian.co.uk/environment/2011/aug/04/canada-tar-sands-lobbying
Hello folks,
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I’ve just discovered a problem with my e-mail settings that was preventing me receiving via one of my addresses. I see that I have some catching up to do! My apologies to anyone who has sent to me and not received a reply. For some reason I have not yet determined, the e-mails just did not come through, and did not give me any indication that anything was wrong. Sorry folks.
Hi Clark
You probably never altered the settings. I’ve been experiencing this stuff for years. You might try to click on the NewAmericanow link I’ve posted twice already. Amazingly, at least on my computer, the link posts two spaces, that is, squares, that are not there on the original www line. Perhaps the computer geeks could help with this.
http://www.youtube.com/watch?v=b3-vwYJiD8g&feature=player_embedded#at=88
If this works it is because I took a different approach.
Off topic. ‘Pot calling the kettle black’ time. And it’s Breaking News from the BBC.
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Saudi Arabia withdraws its Ambassador to Syria.
http://www.bbc.co.uk/news/world-middle-east-14439303
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Libya Mk II is starting off. Then Israel joins in v Lebanon, again, and on and on we go.
John Goss, it’s OK, I know when I altered the settings. I’m hassling with Thunderbird to correct matters.
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Yes, the your YouTube link is rather strange. Your second link works fine. The first has hidden character tokens within it, percent E2 percent 80 and percent 88, between “wat” and “ch”.
Aren’t all these wars going to run into hydrocarbon supply problems? Isn’t this Mad Max on a mega scale?
A refreshing analysis which acknowledges the undoubted hardships that would follow repudiation but balances them with the awfull prospect of working for bankers and traders into infinity. When they talk about a cashless society they mean electronic transfers for those lucky enough to have disposable income and food stamps for the rest of us. The Indignados in Spain have shown that demonstrating is only part of a fightback that must be backed up with defensive action against the collection agency thugs used in reposessions. The last time I remember such action in this country was during the anti-Poll Tax campaign some twenty odd years ago now so it has happened here before and could be repeated. A timely piece, Craig.
Clark, I copied the Youtube link from a Facebook post. It’s baffled me too.
From tar sands to Tottenham. Sorry off topic again.
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What do you make of this? I was listening to Mark Duggan’s brother being interviewed on Sky earlier today. He said that Mark Duggan was not the man portrayed by the media. I was going to send a link to the Sky video of this interview but it has been taken off.?? The brother is a decent moderate sounding sort of man, obviously grief stricken but wanting answers. He emphasized that his parents had not been given any information by the police in what had happened. He was adamant that his brother was not a gangster and would not have used a gun.
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This is from the Guardian.
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Initial ballistics tests on the bullet that lodged in a police officer’s radio when Mark Duggan died on Thursday night show it was a police issue bullet, the Guardian understands.
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The Guardian’s crime correspondent, Sandra Laville, reports:
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The revelation will fuel the fury in Tottenham about the killing of Mark Duggan by armed officers.
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It also undermines suggestions that there was an exchange of fire between Duggan and the police before he died.
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The bullet which was found lodged in the radio of one of the officers at the scene is still undergoing forensic tests. But reliable sources have said the first ballistics examinations suggested it was a police issue bullet.
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These are very distinct as the Metropolitan Police uses dum dum type hollowed out bullets designed not to pass through an object.
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The early suggestion from the IPCC was that the Met officers had returned fire after someone in the minicab opened fire. But the result of the ballistics early test suggests both shots fired came from the police.
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http://www.guardian.co.uk/uk/blog/2011/aug/07/tottenham-riots-police-duggan-live#block-44
PS Shaun Hall, Duggan’s brother, said that the family did not condone violence. As I type, they are showing the interview with Enda Brady again!
Someone had the nous to put the interview on You Tube.
http://www.youtube.com/watch?v=DRQ-UQ9JdJg
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Some nice racist comments accompany it sadly.
The people who really wield power are more concerned with retaining power than real solutions. Any solution that involves a weakening of their power base isn’t a solution that will be considered or adopted. It really is that simple. Forget the capitalism/communism and left/right nonsense. It’s just a tiny minority screwing the majority no matter what the label they operate under. It’s all about corruption and unrepresentative government.
Our democracy isn’t fit for purpose and needs a major overhaul. People waking up to this crap and really changing it is what I would call the ‘big society’. We are going to be stuck in this manure until we break free from their grip. All of this talk is good, but pointless unless there is a path we can all follow to help realise some real solutions. It won’t happen through the party political system that exists now. That is for certain. It we formed a party now and got plenty of popular support it still wouldn’t happen. The road to power would be blocked somehow. A violent revolution wouldn’t solve much in the long run either I don’t think. The only way out is enough people waking up to reality and bringing about peaceful change through independent candidates. People need to say ‘**** off, we don’t trust you and we don’t want you any more’. Until we get such a democratic foundation we won’t get anywhere meaningful. And even with such a loose plan, they would still bring out all the stops to prevent it happening. Craig knows first hand the tricks they can pull, but they would find it terribly awkward to derail a national movement of independent candidates riding a wave of popular support. Only one person has engaged with what I am saying so far. I would like some more feedback please, even if it’s to say my ideas are lacking somehow.
Canspeccy,
The US remains a massive net importer of natural gas. Shale gas has not turned it into a net exporter although it has helped. Shale gas isn’t profitable at current US wholesale prices either.
I’m a simple chap, and in simple terms this crisis can be summed up as follows.
We’ve recently witnessed the largest successful bank heist in human history.
The perpetrators, far from being punished, are now, very generously, allowing us to borrow the money they stole. In fact obliging us to borrow – or lose the homes, etc we thought we were already paying for.
A few days ago, in another topic, I suggested the violence was not very far away.
It seems to have started…
Orwellian:
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You keep informing me that I am ill-informed while demonstrating your apparent blithe ignorance.
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You say: “Tar sands are not scaleable as you imply. Remember that the gas required for the process comes from Canada. Explain how they will increase that and carry on supplying gas to the US.”
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The short answer is that the US may not be requiring Canadian natural gas in the future. They have shale gas reserves to supply domestic demand for 90 years. Prices of gas are much lower in America than in Europe and the Americans are looking to export the stuff.
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And, according to a November 30, 2010, Congressional Research Services report entitled “U.S. Fossil Fuel Resources”, America’s combined recoverable oil, natural gas, and coal endowment is the largest on Earth. America’s recoverable resources are far larger than those of Saudi Arabia (3rd), China (4th), and Canada (6th) combined. And, according to the Senators, that’s not including “America’s immense oil shale and methane hydrates deposits.”
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Mary, you are not specific about the evils of BP’s rather small investment in tar sands. The carbon emissions are certainly undesirable, but if you consider the alternatives, e.g., coal, emissions per usable unit of energy are much lower.
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The downside to the tar sands are (a) contamination of some water ways, which must certainly be prevented in future, as it will be. Water use per barrel of recovered bitumen has been reduced by a factor of 5 or 6 and most waste water is now recycled; and (b) some dead ducks. I am sorry about the ducks, but remember coal mining in China — one customer for Canadian tar sands oil — kills hundreds and even thousands of men annually. (Wikipedia reports that in 2006 “During 2006, 4,749 Chinese coal miners were killed in thousands of blasts, floods, and other accidents). I’d rather see dead ducks than dead Chinese miners.
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And remember that Fukushima, by some estimates, will cause a million premature deaths due to cancer. So of the alternatives to conventional oil, tar sands looks good, although shale gas, which appears to be vastly abundant may be better in some applications, and conservation is certainly the best. So if you don’t like tar sands, just cancel your holiday in Malaga or Majorca, or wherever, cycle to work, and keep the thermostat down in the winter.
And Mary, what do you really know about tar sands? You mention BP
Oops, sorry Mary, that last line should have been deleted.
Anon said: “The US remains a massive net importer of natural gas.”
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Not so massive in fact.
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4.,3 trillion cubic feet in 2005, 3.7 trillion cubic feet in 2010, of which 90% is from Canada.
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US natural gas imports account for about one sixth of total consumption.
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Canadian exports account for about one quarter of Canadian production, and output is expected to remain stable or increase slightly in the foreseeable future.
4,186,281 4,607,582 3,984,101 3,751,360 3,740,757
Mary, even the Socialist Workers’ Party has denounced Gilad Atzmon and even published an apology for giving an interview to him:
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Using him as an authority on the protests in Israel looks clueless at best.
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http://socialistworker.org/2010/07/15/no-place-for-atzmon-at-sw
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Editor’s note: On July 13, SocialistWorker.org published an interview with jazz musician and anti-Zionist writer Gilad Atzmon. After the interview’s publication, we learned of many allegations that Atzmon has made not just highly inflammatory, but anti-Semitic statements about Jews, be they supporters or opponents of the state of Israel–and that he has associations with deniers of the Nazi Holocaust of the Jews. The evidence for these serious charges is damning.
Canspeccy: And remember that Fukushima, by some estimates, will cause a million premature deaths due to cancer.
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And where were these estimates extracted from?
Uranus?
Cansspeccy,
You seem unaware that your “not so massive” still makes the US the third largest net importer of natural gas in the world. And anyway your original claim that the US is now a net exporter was garbage as you now at least admit.
Many in the industry don’t believe the shale gas propaganda – see leaked internal EIA emails amongst other things. The US is currently producing ita known sweet-spot reserves of $8/ MMBTU gas and selling it for about £4. The huge decline rates of these wells also mean they have to keep drilling non-stop to make up for the earlier wells decline.
The US might have a decade of relatively abundant gas supplies but not 100 years.
Can Speccy What do I know about 1)shale oil and about BP. 1) Quite a lot actually from reading and absorbing facts from articles such as these. http://dissidentvoice.org/search/?cx=004699754223191941067%3Adjkep-0myaa&cof=FORID%3A11&ie=UTF-8&q=shale+oil&sa=Search#1650
2) Also quite a lot. My late husband worked for one of their subsidiaries in Africa and had some tales to tell. Do you remember their antics in the Gulf of Mexico? I hear that Tony Hayward has moved on to join the billionaires’ club, his recent appearances in court notwithstanding. There has been no justice for those affected and no real punishment for the great damage to the environment that BP caused.
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8619253/Leaked-videos-show-former-BP-boss-Tony-Hayward-grilled-by-US-lawyers-over-Gulf-of-Mexico-oil-spill.html
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I will leave Angry hanging in the air (not literally) as far be it from me to explain the workings of the Socialist Worker Party’s politics and whom they approve of or not.
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“And where were these estimates extracted from?
Uranus?”
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http://karlgrossman.blogspot.com/2011/04/downplaying-deadly-dangers-in-japan-and.html