on up

In regards to the current conversation about the recent rise in price at the pump and what we can do about it James Howard Kunstler says,

In any case, all this wishing and lying is about to collide with price volatility to make the American voting public absolutely batshit crazy with dread and anger. That, of course, will only prompt more lying, whopper-spinning, and grievance-flogging in the political arena. It will be nearly impossible for the public to evaluate reality.

I was going to start with a bit about oil and gasoline but, Stuart Staniford has done a great job over at Early Warning so I’m just going to let you go and have a look.  I will reproduce a couple of his excellent images here and quote him as saying, “You can see that there's a very strong relationship over time. Technically, 97% of the variance of the price of gas is explained by the price of oil.”

 

More...

Speaking of oil, the noise about Iran continues to ramp up.  In response to the new economic sanctions,

Iran has stopped selling crude to British and French companies, the oil ministry said on Sunday, in a retaliatory measure against fresh EU sanctions on the Islamic state’s lifeblood, oil.

“Exporting crude to British and French companies has been stopped … we will sell our oil to new customers,” spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.    More… 

And then there’s the less reported planned Iranian action surrounding oil trades in something other than the US dollar.


"Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west."  - source  Will that really happen?  Will it be allowed to happen? 

Not surprising to see the cost of oil up at above $108/barrel in late February 2012.  Which means higher gas prices if you read above.  Of course if we’ll just elect Newt then he’ll bring the cost of gas down to $2.50/gallon.  ;-)


And with the price of oil/gas going up and fear of economic catastrophe pulsing through the American psyche the price of gold has also jumped.  Warren B has this to say,

"Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B? 

Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B."

http://www.berkshirehathaway.com/letters/2011ltr.pdf (pdf warning)

On a not complete unrelated note my boss just walked into my office and asked me where to buy a cow; not beef but a live cow for her to raise and later process for food.  Which leads us into funnier territory with this excellent video.

Lastly something a little personal.  Two weeks ago I crashed my bike, my first real cycling accident.

Fortunately that image makes the whole thing look way worse than it really was.  After the crashI walked 100 yards home with only a few bruises.  My 1979 steel frame Trek is quite beat up however and so it was with great anticipation that I ordered my first ever brand new road bike!  I have a great commuter and a mountain bike slash long haul set up but this will be my first new road bike ever.  It's being built this week by my LBS.

I’m competing in a race in May and between the crash and the race now seems like the time to invest in this Giant Defy 2.  It’s an entry level road bike but quite fancy by my standards.  Report forthcoming.   

Aaron

household energy update

It's been a few months since I updated our household energy use.  The first chart if natural gas which we use for domestic hot water, cooking and sometimes heating our home.  We're entering into our forth calender year of tracking this data.  You'll see January is down considerably from last year which was down remarkable from the year before.  In Jan 2012 we had 4 extra days in our billing cycle compared to the previous year but the average local temperature was 9 degrees warmer.  Still I was impressed because we are primarily heating our home with wood so the outdoor temperature shouldn't have had that big of an effect in terms of reduced NG use. 

Here's our electricity use.  After using slightly more in October 2011 than in October of 2010 we saw decreases in November, December and January.  December reduction was probably primarily due to my wife's more judicious use of Christmas tree lights.  Hopefully by June, July and August- our three high use months- we'll have our new HVAC system in place.  Also we will likely have a new clothes dryer by then.  We dried clothes much more out on the line last year than in the past and that will continue but we will continue to sometimes dry inside and we have quite an old machine. 

 

success!?!

An recent incident involving the closed circuit television security system in Britain provides an example of how more complexity won't necessarily lead to safer streets or even tighter control by the authorities.  The law of diminishing returns is in effect here as are more and greater problems facing people trying to work with more complex systems. 

The operator [of a British security camera] directed the officer, who was on foot patrol, as he followed the "suspect" on camera last month, telling his colleague on the ground that he was "hot on his heels"... But he failed to realise that it was actually the plain-clothed officer he was watching on the screen.

In other words the camera operator had the officer on the ground chasing himself.  more.

Breaking news: Rick Santorum wins in 3 states GOP primary contests last night, trouncing Romney!  Of course it's all just more media hype because,

Officially, a total of zero delegates will be awarded after Tuesday's contests. The Minnesota caucuses are the first step in a long process to assign delegates; the same is true in Colorado. Missouri's primary has been described as simply a "beauty contest," since the state's delegates will only be awarded after the March 17 caucuses.

A man was discovered in his home fours years after killing himself.  His house had been foreclosed upon. 

"David Carter reportedly used a 9mm Smith & Wesson handgun to shoot himself in the head some four years ago, shortly after quitting his job and telling neighbors that he was moving to New Mexico. That was in 2007."  more.

The article says his neighbors had taken to mowing his lawn.  One item in the article that caught my attention was the fact that his body wasn't discovered until a local government real estate worker was checking on the property because the county was taking ownership in light of unpaid taxes. 

I know my county is dealing with the issue of owning more properties because of similar circumstances, minus the 4 year old dead body.  My county doesn't want the added tax-payer expense of maintaining these properties.  Here's a problem that could be an excellent opportunity for someone or some group that could figure out a constructive way to address the issue of unwanted properties like these. 

Lastly an article about natural gas availability in Europe.  Many parts of the continent are dealing with extremely cold weather.  Russian gas supplier Gazprom has reduced NG exports because as Russian Prime Minister Vladimír Putin explains, "it is more important for the company to first supply the Russian market."  more

We saw plenty of this when food prices spiked in 2008, countries limiting or banning the export of resources, in that case food in this case natural gas.  My guess is we'll see more of this as resource constraints tighten in the future.

backstream

backstream jan 2012

First an update on the Baltic Dry Index, the measure of international shipping demand I mentioned in the last post.  It hit a 25 year low last week, breaking down past a mark reached in the wake of the 2008 economic debacle.

There are varies reasons given to explain this but one I found particularly interesting is that, "shipping companies have also been deliberately slowing down their journeys to save fuel, with trips from China to the US going now taking around 50% longer than they were early in 2011"  source.

There has been plenty of talk in the past about peak oil meaning "the end" of globalization and international shipping.  Of course some goods were shipped around the world even before petroleum was harnessed as a transportation fuel and will likely continue to be shipped well into the future.  My point here is that the way this plays out in the short term is scenarios like this, slower transport to save fuel, not complete and sudden collapse of the international shipping system. 

This article is just one of several recently published that point towards the increased likelihood of an Israeli/Iranian war that could drag the US into another armed conflict in the Middle East.  But wait, aren't we already at war with Iran?  Stuart Staniford puts it this way.

And the series of explosions and assassinations in Iran has been getting longer and more blatant.  At some point, the pretense that this is not a war becomes unsustainable, and once people stop feeling the need to pretend, things could worsen quickly.  more

And the fact that this is a US presidential election year complicates the matter.

Speaking of which is anyone else thinking of voting for Mitt just so we can continue to be treated to high level gaffs like his recent comment that he doesn't care about the poor?  The US could suffer under his leadership but think about the entertainment value of Saturday Night Live under a Romney regime.  And no moon colonies as the 51st state!

I've decide to make fun of a few groups of people in 2012 partly as a way of testing whether or not shame still works as a motivator in the US.  And partly because it helps me to continue to feel sane.

The first group I'm targeting is people that park cars on sidewalks.  No longer content with domination of the asphalt, recently people in my community have take to mounting (more on that term as it relates to this issue coming soon) the curb and parking their vehicles on that 4 foot strip of concrete formerly used only by pedestrians to try and avoid getting run over.  I think this phenomenon says a lot about the current mental state of people in my community and maybe throughout our nation.

What I need from you good and loyal readers are name suggestions for my new blog featuring pictures I take of sidewalk parking.  Please leave suggestions in the comments section below.  Winner gets a T Shirt of course.

Here's a teaser.  I took this last week. It is a code enforcement officer working for my local police department who stopped to investigate a  food truck set up in a vacant lot.  No doubt the officer thought the truck was operating without proper papers.  He is seen here on his cell phone, gun on hip.  Hours later however the food truck was still serving hotdogs and so I assume it was in fact a legal operation and the officer went away discouraged.

Notice that it wasn't enough for the cop to merely pull over to the side of the road and investigate. He had to get all CHiPs and drive up onto the sidewalk, completely blocking it.  Turns out he was the only person violating the law at this particular time and place.

More once I get a snazzy name for the new blog.

Aaron