Wednesday, May 28, 2008

Global Warming and the Socialist Agenda

They tried communism by brute force in the Soviet Union and China. It didn't pan out. They watered it down and called it socialism in Europe. Again, it didn't work out. So how do you go about getting control of the world's people and resources if you can't do it by brute force or by promoting a "duty to the state"?

The latest attempt? Global warming. We must put control of the worlds resources in the hands of the much more enlightened global power brokers for the good of the planet. How can you not be in favor of the planet? Only the UN can tell us how to properly use carbon or not. To deny them this authority would be suicide. Right?

It's been working pretty well, but there's a fly in the ointment: reality. The past year has shown one of the biggest declines in global temperatures in the past 20 years. This clearly displays what many have been pounding the table about the whole time. The science behind man-made global warming is pure bunk. It shows the immensity of how much we don't know about our climate system and what makes it do what it does. The facts have been with us the whole time, but the agenda came first. Facts be damned.

Meanwhile there's an actual real threat of global cooling. Why? Global warming trends have always lead to increased commerce and prosperity. Global cooling trends have always lead to increased misery. I don't know which way the climate will turn, but I know that if we end up in a cooling trend and the powers that be have created a situation where we don't have enough energy to stay warm because we were told that looking for more would destroy the planet...they're going to have some 'splainin' to do.

We got duped again. Will we learn from this one? It's hard to say. Communism isn't dead, just badly injured. The forces working against individual freedom seem to make a comeback every decade or so. We seem to buy every scenerio they come with, whether it be global warming, global cooling, acid rain, the Great Depression of 1999, running out of landfill space in 1980, running out of commodities at the same time, overpopulation was supposed to lead to global starvation decades ago...

As a species we seem to be gullible, naive and easily manipulated. Somehow we've managed to keep from totally screwing ourselves so far. I hope our luck holds out.

Friday, May 16, 2008

US to cancel orders to fill Strategic Oil Reserve

The move by the US to stop making purchases to fill the US strategic oil reserve in July could have been much more strategic. They missed an opportunity in the explanation.

The amount of oil involved in relation to the total US consumption may not be big enough to move the markets, but a well crafted statement might have. They should issued a statement that purchasing oil reserves at these levels no longer makes sense. This could have been coupled with the announcement of say... Defense Department contracts with companies like Amyris and others to produce other, more reliable sources of fuel.

The notion that the US government has concluded that $130/barrel oil is too much to pay and that we will find a work-around instead would cause speculators and investors to stand up and take notice.

Tuesday, May 13, 2008

Does Increased Spending Equal a Healthy Economy?

Millions of Americans are about to receive stimulus checks from the government intended to spur the economy by encouraging more spending. But does moving money around really make the economy healthier? Not necessarily.

Economic systems are designed to enable the efficient flow of resources throughout a society. In the case of free-market capitalism, this is done through the cumulative effect of billions of decisions made every day by freely associating individuals. But, every decision comes with a cost - an opportunity cost. That means, making one decision eliminates the possibility of another. When you spend your last dollar on one thing, it's no longer available to be spent on another.

In the 1990's we experienced a huge run up in the stock markets. The internet was all the rage. Many took advantage of this by founding companies related to the internet. Some of these were of great value and indeed added to the quality of life for all Americans. However, many went something like this: A group of individuals enticed investors with grandiouse plans and visions of the future. Investers ate it up and the founders were suddenly awash in cash. They used much of it to give themselves and their compadres huge salaries, bonuses and perks. Meanwhile, the business model failed miserably. Eventually, the investors lost their shirts and the founders walked away multi-millionaires. A lot of cash moved around and produced...nothing.

Another good example is the "Pet Rock" craze of the 1970's. A clever individual marketed a small rock in a box with some holes in it. It caught on like wild fire. What was the cost? Well, you've got to keep in mind that money represents human resources, both on the part of the producer and the buyer. When you spend money on something, you're committing a portion of your past or future labor to that product. Every million dollars that was spent on Pet Rocks represented over 100,000 man hours that were devoted to the production of rocks in a box as opposed to something else. Again a lot of money moving around, a lot of time consumed, to produce...nothing.

A healthy, efficient economy is not just about quantity. It's also about quality. The individual is key in a free-market economy. We should not attempt to eliminate free choice regarding spending practices, but it would be helpful if individuals were more aware of the dynamics at work when they make a purchase. You cast a vote with every dime you spend. You're asking the producer to make more of the same. Your spending not only your cash, but your time, your labor. When you make a purchasing decision, consider the opportunity cost. Consider the value of directing more time, more resources to what you are about to buy. Is it worth 4 hours of your workday? Is there something else that might be a better value?

If you really want to have a positive impact on the economy, don't just spend. Spend well.

Friday, May 9, 2008

Could Seawater Solve the Energy Problem?

John Kanzius' discovery that one can burn seawater by exposing it to radio waves didn't pan out as an instant source of cheap energy. As it turns out, it takes more energy to produce the radio waves than you get from burning the hydrogen that comes off the seawater.

But, another company is making waves with a different product for processing seawater. Energy Recovery Engineering manufactures a device called a PX Pressure Exchanger that recovers energy previously wasted during the process of desalinization - converting seawater to fresh water. This device has helped to bring the cost of desalinization of seawater way down. So much so, they now calculate that it would be cheaper for California to desalinate seawater than to have fresh water pumped in from Colorado, as they're currently doing.

What does this have to do with energy? Well, by producing fresh water closer to home you eliminate the need to pump it across vast distances, which uses energy. You also eliminate the need to maintain miles and miles of pipeline, which also uses energy. If this is done on a large scale, it could have a big impact on energy consumption. Consider back in the late 70's, early 80's when a 10% drop in energy consumption in the US lead to a freefall in the oil market.

Advances in desalinization could upset the apple cart in more than just the fresh water market. Plentiful, inexhaustible, affordable supplies of fresh water on both coasts and the gulf could have a major impact on both energy and water.

Stay tuned.

Tuesday, May 6, 2008

The Peak Oil Prophecy - Is It Coming True?

I did a post almost a year ago in which I laid out my prediction of what the end of the surge in oil prices will look like: "Change wont be gradual. I don't know when, but relatively soon, the oil market is going to fall hard. Here's what to look for preceding the event. Mechanisms will be created allowing average consumers to purchase oil and gas futures fairly easily. Brokers and trading houses will run constant commercials advising everyone to "get in now" before it's too late. The price of oil will go insanely high, then suddenly, the bottom will fall out. The same folks who bought into the Y2K scare and loaded up on any stock that had the word "intenet" attached to it just before the bubble burst will be left holding the bag."

Today oil hit a new all time high, car companies are now offering what amount to gas futures to consumers as an incentive to buy cars. That is, you get a card good for $2.99 per gallon gasoline for the next three years. If the promotion is successful, now that the model is in place, no doubt other companies will begin to offer fixed rate per gallon gas cards, for a premium. As the bubble reaches its bursting point, somebody has to take the fall. Guess who. How much will your $2.99/gallon card be worth when the rest of the country's paying $2.15?

If you want to save money on gas, drive less, get a better car, fix your bike. When the players start offering you futures contracts or a "hot" stock lead, run, don't walk to the exits.

Sunday, May 4, 2008

Microsoft is to Yahoo as Apple is to Google?

Microsoft and Yahoo are in talks once again about a possible merger of the two giants into an internet behemoth. The proposed merger brings to mind another intriguing what if: What if Apple and Google were also to join forces?

The Reverend Wright sparked a lot of controversy over the past few weeks. One of his outrageous assertions was that African Americans are naturally more creative (right brained) and visually oriented, and European Americans are more logical and object oriented (left brained). He's half right. Some people are indeed more creative and visual, while others are more analytical. However, given that these differences exist within my own family, I'm pretty sure it has nothing to do with skin pigmentation. Further the mode in which the brain operates can vary from time to time within the same person. Some people can switch from creative to analytical mode on the fly as the situation warrants.

What does this have to do with the merger possibilities above? Well, Microsoft is known for dominance in the Office suite of applications. They excel at creating the analytical tools of business. Yahoo is also in this camp. They are perceived as a leader in providing news and financial information. Apple and Google are more "right brained" in their offerings. Apple has long been a favorite among graphic designers and has become the leader in music retail. Google has a vision of organizing the entire world's information and making it accessible to everyone. Google emphasizes ease of use, making its instructions very visually appealing and intuitive. Google and Apple are also going head to head in the further development of mobile software applications.

The two internet mega-entities that would result from the above hypothesis would not necessarily be redundant. They could be the "left brain" and "right brain" facilitators of the world's information database. The technical expertise of a Microsoft/Yahoo could be a great compliment to the creative genius of an Apple/Google. They could even provide access to the same information, but in different venues and styles. The same user might choose one or the other on a particular day or session depending on what they were working on.

In any case the task of harnessing the world's information and providing the tools to access, analyze, reconfigure and represent it is still in its infancy. It will never be "done" because each new configuration of data provides new bits of data to consider. There is definitely room for two powerhouses in the industry at this time and potential for many more. The beauty of the exponential growth of data and information is that the more the database grows, the more individual entities have to go "vertical". That is, focusing on a niche rather than trying to contain it all.