Wednesday, July 23, 2008

The Brink

It seems to me that we are on the edge. Not of an abyss, but a long rocky slope. Now an abyss is the worst case, as society plummets to anarchy. But as I see it now, we are looking at a grid-up, slow slide. I have taken a tumble down such a slope while mountain-biking, and as you slide and tumble those boulders you bounce off hurt.

Looks like society, our "civilization" will be doing the same thing. Sometimes falling faster, sometimes a hard crash as it impacts a checkpoint along the slope. These checkpoints could be mass riots, famine, disease outbreaks, war, alien invasion, or the worst - Jeb Bush running for the Presidency!

The market looks to me like it's correcting itself a little bit. Oil is dropping in price some, but that is because we are driving less, and not burning it for home heating fuel. I expect oil to stabilize at about $115 a barrel unless a hurricane wipes out some oil rigs in the gulf, or a refinery.

So if it's one thing I know from living up here in the Northeast my whole life is just how bad it gets financially when the weather gets cold. As a kid we couldn't afford oil so we heated the whole house with wood. in '77-'78 we went through eleven cords of wood. For those of you unfamiliar with the measurement, a cord is 4' logs, piled 4' high and 8' long. That's when I learned to use a chainsaw, and how to split wood. I split all 11 cords myself.

So for those in the northern half of the US, they are feeling a financial crunch from keeping their AC running, taking vacations, etc. When Old Man Winter comes around, these family's will be in deep kimchi. Right now, home heating fuel is up from $3.54 a gallon to $4.95. Most people I know spent about $3k to heat their homes last winter, this year that would be $4200! After the rough summer months, many, many families wouldn't be able to heat their homes this year. That means more families on welfare, food stamps, and most importantly - losing their homes.

Winter is a slow time for real estate, so the banks will have to carry the foreclosed homes longer, or take more of a loss to dump them quickly. I would have to say that November and December will be the months to watch, unless something big happens sooner. When the gas and diesel prices cut back on food in the grocery stores, I expect to see food riots out here on the east cost. Up here in the Northeast we rely on all our food staples to be trucked in from the Midwest, or shipped to us via bulk container. Once these riots start, I expect things to unravel rather quickly.

Then again, The FedGov could stop wearing their asses for hats, and we might get out of this without a major crisis. I am a gambling man, but I'm not dumb enough to play those odds. Store food, spend what money you get wisely, arm yourself, and try to find friends who you can count on.


PKS said...

I think you're absolutely right, we're heading for a long steady decline.

For the last 100 years or so, most of the prosperity gains in industrialized societies has been a result of cheap, easy, energy, all of it (or virtually all) based on cheap hydrocarbon fuels.

Well, oil production, it would seem, has peaked at 85 million barrels per day. Non-conventional oils like bitumen/tar sands aren't gonna save us, look at Canada for an example - current tar sands production of 3 million barrels per day, optimistically might get that up to 4 or 5 by 2020.

Consider this: what happens to a net oil importing and net food exporting country if all of a sudden, they have trouble importing oil?

Your average farm consumes at least one calorie of hydrocarbons for every calorie of food it produces. So we're in a very real sense, eating oil.

I wonder if a survivalist in the USA should give serious thought to moving to a country that is self-sufficient on oil and food?

That's what I like about living in Canada - We're a net exporter of both, and that's not likely to change. So being this close to the USA is like having a SHTF early-warning system. For example, the day I hear even a whisper of gasoline/diesel rationing south of the border, that's the day I make sure I have a decent rife, pistol, and 5000 rounds of ammo each, and a year's worth of food.

riverwalker said...

We're getting hit from all directions. My only question is which one will be the straw that breaks the consumers back.