Sabbath eve, April 29, 2011
I woke last night from a troubled dream into a troubled reality. Martin told me one of our pastures is toast and we will need to start feeding hay or move the cows. The pond from which they drink is also precariously low.
Hay is scarce, driving the price up. I have hay. Conventional wisdom says I should make money by selling the cows and selling the hay also. Once it starts raining, I could then take the money I receive and buy replacement animals.
However, this is the third drought since 2006. Cattle numbers are lower nationwide than they have been since the 1950’s. I live in the largest cow/calf producing region in the land. The dollar continues to devalue when measured against integral goods and services. So what happens if the cow I sell today for a thousand bucks costs five thousand dollars to replace a year or so from now? Or ten thousand dollars…
Worse yet: if everyone follows conventional wisdom, we kill all the cows in Texas.
The whole state is in a drought.
You can’t create a cow from a dollar bill. Doing so requires another cow and a bull.
So, maybe there are no cows to be bought at any price, or the numbers get so low it will take decades to replace them.
A man shouldn’t eat his seed corn. I suppose we shouldn't kill off all our breeding stock either.
Speaking of corn: There will be none in South Texas if it’s not planted under irrigation. Almost no corn is irrigated in these parts. We have cows but no grass. Cattle in feed-lots but little corn in storage and none on the way, chickens, both for meat and eggs, also requiring imported grains delivered by fossil powered transport.
Diesel hovers around $4 a gallon.
The weather forecast says we have a chance for rain a week from now. It’s been saying the same thing since February and we have not had a single drop this month. A hundredth of an inch last month and none this month. Fronts blow through dry and retreat dry. North of us I hear of floods and tornadoes. If we have to dodge flood waters and tornadoes to get a rain, I’d just as soon stay dry.
I see the Fed and their fucking minions in the major banks and fellow disinformation disseminators doing all they can to manipulate the price of precious metals and commodities to the low side. They will lose this battle. Stores of dollars rest in the treasuries of foreign countries. The owners of these dollars have begun to sweat. How long will it be until they release the flood in a fateful attempt to garnish at least some value from what will turn out to be worthless IOU’s?
I try not to think about this too much because it makes me want to grab Ben Bernanke by the throat and choke the living shit out of his ass. While that’s probably what he deserves, it harms me to walk around angry. And he is just one of many that believe the lies they conjure. His own will eat his kind once they realize they’ve been had.
A quick fuck you very much to Tim Geithner while I'm on the subject.
Meanwhile, the garden blossoms. I am blessed to have irrigation water. I harvested about a thousand pounds of onions this week. Potatoes and green beans are ready. Pinto beans are well formed, black-eyed peas, cucumbers on the way. Yellow and Zucchini squash have begun to produce more than we can possibly consume. Hogs get the excess and grow fat. We have large green tomatoes on the vines and have begun to harvest the first peppers. Sweet corn tassels. I set out sweet potato slips yesterday.
The cows keep giving milk; Leah continues making cheese and canning produce. I water, cultivate the soil and wait.
I suppose it could be worse.
Friday, April 29, 2011
Sunday, April 24, 2011
Watch out below
Zerohedge announces that China is about to dump $2 trillion.
I suspect this marks the beginning of dollar devaluation like we've never before seen or experienced.
Echoes of Argentina's hyperinflationary collapse and the fall of the Mexican Peso during the 80's...
I suspect this marks the beginning of dollar devaluation like we've never before seen or experienced.
Echoes of Argentina's hyperinflationary collapse and the fall of the Mexican Peso during the 80's...
Friday, April 8, 2011
Drought
Sabbath eve, April 8, 2011. I’ve avoided typing the dreaded D-word for fear that somehow what I wrote would come true. It has come anyway. We’re in a drought. I hear people saying this is the worst drought since the 30’s…
Bullshit, I say. Maybe the size and scope is larger, but it was a damn sight dryer in ’06 and ’08 in my locality than it is now. However, this one’s not yet done with us.
Forecasts have been calling for rain a week from now for 3 months. Time after time systems break down. Fronts blow through dry with wind and driving dust. Afterwards heat returns from the south, sucking moisture from cracking ground. Tender grass sprang up but now dessicates as fast as it once appeared. A late frost adds insult to injury scorching young corn and milo plants struggling against a relentless wind. A couple more weeks of this and the crops will be gone, aside from miniscule areas where farmers can irrigate. With high energy costs, irrigation water is far from free.
Corn prices skyrocket in tandem with the price of oil. Parts, supplies and fertilizer also go up by the day. Cattle prices also continue to climb. I am told U.S. cattle numbers are lower than any time since the 1950’s. Feedlot managers fear a sudden collapse, nonetheless. How can people pay $10 or $11 a pound for a steak at the grocery store?
I read that almost 60 billion dollars spent into the economy last year should have gone instead to pay mortgages, but banks don’t repossess properties because the Fed will take them at full face value as collateral for interest free loans through the overnight window. Foreclosing would force banks to mark the notes to market. So maybe that’s how people keep buying $4 gas and $10 steaks. They’re squatting in their houses. And that’s also how the banks keep operating with shit for assets.
The Fed has become the largest holder of American Treasuries, surpassing both Japan and China. All bought with dollars hallucinated out of thin air.
Gold and silver continue to climb in value against the dollar. I bought a small amount of silver back when it was $19 an ounce, about a year ago. Today it sells for over $40 an ounce. We can take comfort from the fact Bernanke says there’s little or no inflation…
The Middle East and much of the rest of the world is in turmoil. While high food prices represent an inconvenience to most Americans who spend less than 10% of earnings to feed themselves, these same price increases are deadly to people already spending half of what they earn to eat. And that remains the case for one out of two people sucking air on this planet at the moment.
Meanwhile we continue turning our dwindling supply of corn into ethanol. We drive like hell and fly when we damn well please.
According to Shadowstats, the real unemployment rate in America continues to be 22%.
At least we aren’t being swamped by tsunamis or fried by a smoldering nuclear power plant.
Bullshit, I say. Maybe the size and scope is larger, but it was a damn sight dryer in ’06 and ’08 in my locality than it is now. However, this one’s not yet done with us.
Forecasts have been calling for rain a week from now for 3 months. Time after time systems break down. Fronts blow through dry with wind and driving dust. Afterwards heat returns from the south, sucking moisture from cracking ground. Tender grass sprang up but now dessicates as fast as it once appeared. A late frost adds insult to injury scorching young corn and milo plants struggling against a relentless wind. A couple more weeks of this and the crops will be gone, aside from miniscule areas where farmers can irrigate. With high energy costs, irrigation water is far from free.
Corn prices skyrocket in tandem with the price of oil. Parts, supplies and fertilizer also go up by the day. Cattle prices also continue to climb. I am told U.S. cattle numbers are lower than any time since the 1950’s. Feedlot managers fear a sudden collapse, nonetheless. How can people pay $10 or $11 a pound for a steak at the grocery store?
I read that almost 60 billion dollars spent into the economy last year should have gone instead to pay mortgages, but banks don’t repossess properties because the Fed will take them at full face value as collateral for interest free loans through the overnight window. Foreclosing would force banks to mark the notes to market. So maybe that’s how people keep buying $4 gas and $10 steaks. They’re squatting in their houses. And that’s also how the banks keep operating with shit for assets.
The Fed has become the largest holder of American Treasuries, surpassing both Japan and China. All bought with dollars hallucinated out of thin air.
Gold and silver continue to climb in value against the dollar. I bought a small amount of silver back when it was $19 an ounce, about a year ago. Today it sells for over $40 an ounce. We can take comfort from the fact Bernanke says there’s little or no inflation…
The Middle East and much of the rest of the world is in turmoil. While high food prices represent an inconvenience to most Americans who spend less than 10% of earnings to feed themselves, these same price increases are deadly to people already spending half of what they earn to eat. And that remains the case for one out of two people sucking air on this planet at the moment.
Meanwhile we continue turning our dwindling supply of corn into ethanol. We drive like hell and fly when we damn well please.
According to Shadowstats, the real unemployment rate in America continues to be 22%.
At least we aren’t being swamped by tsunamis or fried by a smoldering nuclear power plant.
Wednesday, April 6, 2011
Monday, April 4, 2011
Blowing green smoke
James Howard Kunslter's weekly rant. Now might be a good time to invest in a couple of good draft mares. Not for short term gain, but for long term survival. I'm copying and pasting the whole thing. Hope I don't get sued.
By James Howard Kunstler
on April 4, 2011 9:43 AM
"We also have Secretary Steven Chu, my Energy Secretary. Where is Steven? There he is over there."
- President Obama at Georgetown U last week
Blame Steven Chu, then, because when it comes to America's energy predicament, the president has been woefully misinformed. Mr. Obama pawned off a roster of notions and proposals already product-tested in the public meme-o-sphere. Almost everyone of these ideas is inconsistent with reality, based on faulty premises, or represents some kind of magical thinking. What they have in common is that they're ideas the public wants to hear, whether they are truthful or not, because we don't want to change the way we live.
The central idea in Mr. Obama's speech is that we will reduce our oil imports by one-third in a decade. This is a gross distortion of reality. The truth is that our oil imports will be reduced automatically, whether we like it or not. The process is already underway. The nations that export oil to us are using much more of their own oil even while their supplies have passed peak production and entered depletion. Countries like Saudi Arabia, Venezuela, and Mexico have some of the highest population growth-rates in the world. They sell gasoline to their own people for less than a dollar a gallon. At the same time China and India are driving more cars and importing a lot more of the world's declining supply. (China has perhaps the equivalent of a four-year supply of its own oil in the ground, and India has next-to-zero oil of its own).
One meme circulating around the Web these days is that the USA has the equivalent of "three Saudi Arabias" in the shale oil fields of North Dakota, Colorado, Wyoming, and Montana. That is not true. A lot of this magical thinking focuses on the Bakken fields of Dakota. We're currently producing less than 400,000 barrels a day out of Bakken and the projected maximum ten years from now is around 800,000. We use 20 million barrels a day in the US running suburbia, Wal Mart, and the US military. By the way, Bakken shale oil requires extensive rock fracturing operations - "fracking" - which means a lot of horizontal drilling, which means a lot of steel pipe. It is not just a matter of sticking a steel straw in the ground like we did in Texas in 1932.
Note: much of the shale "oil" in other western states is not actually oil. It is kerogen, an organic precursor to oil, in effect organic polymers that have not been subjected to enough heat and pressure to turn into oil. If you want to turn it into oil, you have to cook it - which takes energy! That's after the mining operation to scoop it out of the ground. That takes energy too. Or, you can send machinery into the ground and cook it in place. That takes energy, too. We are not going to get oil out of there anytime soon - and perhaps never.
The "drill drill drill" gang is under the impression that North America has vast unexplored regions where oil is just begging to be discovered. This is not true. The New York Times reported after Obama's speech - in a disgracefully dumb story by Clifford Krauss - that the eastern Gulf of Mexico and Atlantic Coast contain 3.8 billion barrels of oil. Really? Hello! The US uses over 7 billion barrels of oil every year. Does the Arctic National Wildlife refuge contain between 4 and 11 billion barrels (US gov estimate)? Great, that averages out to about a year or so of US supply. And I'm not even against drilling there, only against the idea that it represents a meaningful "solution" to our problem.
Meanwhile, the old standby Alaskan oil fields at Prudhoe Bay are depleting so remorselessly that there may not be enough flow in a year or so to move the oil through the famous pipeline.
How about Canada's tar sands? Well, first of all, they belong to Canada, not us, unless we want to change that - and that could be politically messy. The tar sands will never produce more than 3 million barrels a day. The operations are already too huge, costly, and damaging to the northern watershed. Canada is our number one source of imported oil, but China would also like to buy Canadian oil. Are we planning to invoke the Monroe Doctrine to prevent Canada from selling its oil to parties outside the Western Hemisphere? That could be messy, too.
Mr. Obama returned to the popular theme of bio-fuels. Our initial venture into this area was the ethanol fiasco which, predictably, took more energy to make than it produced, and had disastrous effects (still does) on corn commodity prices - in effect stealing from the food supply in order to drive to the Wal Mart. The next venture will apparently be in algae. We'll discover (once again) that what works as a science project doesn't scale to run millions of cars.
Mr. Obama told the nation that we have a 100 year supply of natural gas. (The moronic Larry Kudlow of CNBC told his audience it was 300 years). Neither of them knows what he is talking about (and evidently Energy Secretary Chu doesn't either). So far, proven reserves of shale gas amount to about a 4 to 6 year US supply at current rates, and total natural gas reserves - including conventional gas, the kind that doesn't require fracking - amounts to about a 12 year supply. The idea that we are going to ramp up an entire natural gas fueling system for America's tractor-trailer trucks is an absurdity.
Ditto the notion that we are going to electrify the US auto fleet.
Here's something to chew on: we run about 250 million cars in the USA. Let's say we ramped up an electric vehicle fleet of 10 million cars - which, by the way, is a purely hypothetical and wildly optimistic number. Do you think it might be a political problem if 10 million lucky Americans get to drive electric cars while everybody else either pays through the nose for gasoline, or can't even afford to own a car anymore?
There are a few things you can state categorically about the US energy predicament and the national conversation we're having about it - including the leaders of that conversation in government, business, and the media. One is that we are blowing a lot of green smoke up our collective ass. None of these schemes is going to work as advertised. The disappointment over them will be massive and probably lead to awful political consequences.
Another is that we are ignoring the most obvious intelligent responses to this predicament, namely, shifting our focus to walkable communities and public transit, especially rebuilding the American passenger railroad system - without which, I assure you, we will be most regrettably screwed ten years from now. Mr. Obama had one throwaway line in his speech about public transit and nothing whatever about walkable neighborhoods.
The reason for this obvious idiocy is that it's all about the cars. That's all we care about in the USA, the cars. We can't get over the cars. We can't talk about anything except how we'll find magical new ways to run all the cars. This is a very tragic sort of stupidity and if we don't change our thinking about it, from the highest level on down, history is going to treat us very cruelly.
A special shout-out here to The New York Times, whose abysmal reporting on these issues, once again, is due to their reliance on a single source: the IHS-CERA group, Cambridge Energy Research Associates, the paid public relations auxiliary of the oil industry, led by that mendacious sack of shit Daniel Yergin, whore-in-chief.
________________________________________________
My books are available at all the usual places.
By James Howard Kunstler
on April 4, 2011 9:43 AM
"We also have Secretary Steven Chu, my Energy Secretary. Where is Steven? There he is over there."
- President Obama at Georgetown U last week
Blame Steven Chu, then, because when it comes to America's energy predicament, the president has been woefully misinformed. Mr. Obama pawned off a roster of notions and proposals already product-tested in the public meme-o-sphere. Almost everyone of these ideas is inconsistent with reality, based on faulty premises, or represents some kind of magical thinking. What they have in common is that they're ideas the public wants to hear, whether they are truthful or not, because we don't want to change the way we live.
The central idea in Mr. Obama's speech is that we will reduce our oil imports by one-third in a decade. This is a gross distortion of reality. The truth is that our oil imports will be reduced automatically, whether we like it or not. The process is already underway. The nations that export oil to us are using much more of their own oil even while their supplies have passed peak production and entered depletion. Countries like Saudi Arabia, Venezuela, and Mexico have some of the highest population growth-rates in the world. They sell gasoline to their own people for less than a dollar a gallon. At the same time China and India are driving more cars and importing a lot more of the world's declining supply. (China has perhaps the equivalent of a four-year supply of its own oil in the ground, and India has next-to-zero oil of its own).
One meme circulating around the Web these days is that the USA has the equivalent of "three Saudi Arabias" in the shale oil fields of North Dakota, Colorado, Wyoming, and Montana. That is not true. A lot of this magical thinking focuses on the Bakken fields of Dakota. We're currently producing less than 400,000 barrels a day out of Bakken and the projected maximum ten years from now is around 800,000. We use 20 million barrels a day in the US running suburbia, Wal Mart, and the US military. By the way, Bakken shale oil requires extensive rock fracturing operations - "fracking" - which means a lot of horizontal drilling, which means a lot of steel pipe. It is not just a matter of sticking a steel straw in the ground like we did in Texas in 1932.
Note: much of the shale "oil" in other western states is not actually oil. It is kerogen, an organic precursor to oil, in effect organic polymers that have not been subjected to enough heat and pressure to turn into oil. If you want to turn it into oil, you have to cook it - which takes energy! That's after the mining operation to scoop it out of the ground. That takes energy too. Or, you can send machinery into the ground and cook it in place. That takes energy, too. We are not going to get oil out of there anytime soon - and perhaps never.
The "drill drill drill" gang is under the impression that North America has vast unexplored regions where oil is just begging to be discovered. This is not true. The New York Times reported after Obama's speech - in a disgracefully dumb story by Clifford Krauss - that the eastern Gulf of Mexico and Atlantic Coast contain 3.8 billion barrels of oil. Really? Hello! The US uses over 7 billion barrels of oil every year. Does the Arctic National Wildlife refuge contain between 4 and 11 billion barrels (US gov estimate)? Great, that averages out to about a year or so of US supply. And I'm not even against drilling there, only against the idea that it represents a meaningful "solution" to our problem.
Meanwhile, the old standby Alaskan oil fields at Prudhoe Bay are depleting so remorselessly that there may not be enough flow in a year or so to move the oil through the famous pipeline.
How about Canada's tar sands? Well, first of all, they belong to Canada, not us, unless we want to change that - and that could be politically messy. The tar sands will never produce more than 3 million barrels a day. The operations are already too huge, costly, and damaging to the northern watershed. Canada is our number one source of imported oil, but China would also like to buy Canadian oil. Are we planning to invoke the Monroe Doctrine to prevent Canada from selling its oil to parties outside the Western Hemisphere? That could be messy, too.
Mr. Obama returned to the popular theme of bio-fuels. Our initial venture into this area was the ethanol fiasco which, predictably, took more energy to make than it produced, and had disastrous effects (still does) on corn commodity prices - in effect stealing from the food supply in order to drive to the Wal Mart. The next venture will apparently be in algae. We'll discover (once again) that what works as a science project doesn't scale to run millions of cars.
Mr. Obama told the nation that we have a 100 year supply of natural gas. (The moronic Larry Kudlow of CNBC told his audience it was 300 years). Neither of them knows what he is talking about (and evidently Energy Secretary Chu doesn't either). So far, proven reserves of shale gas amount to about a 4 to 6 year US supply at current rates, and total natural gas reserves - including conventional gas, the kind that doesn't require fracking - amounts to about a 12 year supply. The idea that we are going to ramp up an entire natural gas fueling system for America's tractor-trailer trucks is an absurdity.
Ditto the notion that we are going to electrify the US auto fleet.
Here's something to chew on: we run about 250 million cars in the USA. Let's say we ramped up an electric vehicle fleet of 10 million cars - which, by the way, is a purely hypothetical and wildly optimistic number. Do you think it might be a political problem if 10 million lucky Americans get to drive electric cars while everybody else either pays through the nose for gasoline, or can't even afford to own a car anymore?
There are a few things you can state categorically about the US energy predicament and the national conversation we're having about it - including the leaders of that conversation in government, business, and the media. One is that we are blowing a lot of green smoke up our collective ass. None of these schemes is going to work as advertised. The disappointment over them will be massive and probably lead to awful political consequences.
Another is that we are ignoring the most obvious intelligent responses to this predicament, namely, shifting our focus to walkable communities and public transit, especially rebuilding the American passenger railroad system - without which, I assure you, we will be most regrettably screwed ten years from now. Mr. Obama had one throwaway line in his speech about public transit and nothing whatever about walkable neighborhoods.
The reason for this obvious idiocy is that it's all about the cars. That's all we care about in the USA, the cars. We can't get over the cars. We can't talk about anything except how we'll find magical new ways to run all the cars. This is a very tragic sort of stupidity and if we don't change our thinking about it, from the highest level on down, history is going to treat us very cruelly.
A special shout-out here to The New York Times, whose abysmal reporting on these issues, once again, is due to their reliance on a single source: the IHS-CERA group, Cambridge Energy Research Associates, the paid public relations auxiliary of the oil industry, led by that mendacious sack of shit Daniel Yergin, whore-in-chief.
________________________________________________
My books are available at all the usual places.
Friday, April 1, 2011
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