COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, December 18, 2006

The insanity of the US energy policy. Consequences coming home.

On September 11, 2001, the United States should have learned a lesson in vulnerability. There was the obvious lesson in domestic security. There was a lesson in banking. The decrease in the "float" in your check book is a result of dispersed check cashing techniques using electronic imagery. The countries banking system was dispersed to reduce vulnerability.

There was one more obvious vulnerability and that was in the importation and use of petroleum. It is simply bewildering to me that this vulnerability has been tolerated.

Is there anyone left standing that believes the energy security of the United States of America has been improved by this administration and the Democratic and Republican members of Congress. Read this and ask yourself,"Is this the best we can do?"

US deficit heading towards record
BBC

High oil costs have been boosting the cost of products such as petrol
The US current account deficit has kept widening, signalling that the world's largest economy is still having to foot a massive bill for energy imports.
The deficit was $225.6bn in the three months to the end of September, up from a revised $217.1bn in the previous quarter, the Commerce Department said.

That pushed the total for the first nine months of the year to $655.9bn, well on course for an annual record.

The deficit's size has raised concerns about the state of the US economy.

Long way

Critics of President George W Bush have argued that the US has not done enough to protect its workers, or pressure China into changing its trading practices, which have been heavily blamed for the size of the trade deficit.

However, while the figures so far this year have been worrying, there has been a dip in oil prices in recent months and a slide in the value of the dollar, both of which may bode well for the size of the deficit in the fourth quarter and beyond.

"The bottom line is that the deficit should start improving now, but there is a long, long, way to go before it gets down to a sustainable level," Capital Economics said.

"Reaching that kind of level will require not only a marked moderation in import growth, but a substantial depreciation in the dollar as well."

Analysts look at the current account deficit because it shows the value of goods, services and investments that flow in and out of the US.

As a result, it is a good gauge of domestic and foreign demand, and highlights the amount of money the US is going to have to borrow to bridge the deficit between what it imports and exports.

In the third quarter, the balance of payments gap was worth 6.8% of total US gross domestic product (GDP).

Higher oil prices have affected inflation and import costs worldwide, and their impact on the US could be seen in the goods deficit, which was $8bn higher at $218.6bn. Imports were $480.7bn, compared to exports of $262.1bn.

The shortfall in investment flows rose to a record of $3.8bn, signalling that an increasing number of US assets are in foreign hands.


13 comments:

  1. The US assets in foreign hands are physically where?

    I recall the uproar when Rockefeller Center was bought by some Japanese
    In the mid-90’s, the Japanese owners realized that they had paid too much for their interest in the center and a battle ensued over its mortgage with David Rockefeller, then the patriarch of the family, whose younger generation had forced the sale to get more money, eventually regaining control. ..."

    Much of the early development of the American West was done with the money of Englishmen. They lost their shirts, for the most part.
    Lincoln County NM the most famous example of it.

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  2. Allen and his story? Is Allen a postal worker?

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  3. AFP through bretbart:

    "The Iranian government said it has ordered the central bank to transform the state's dollar-denominated assets held abroad into euros and use the European currency for foreign transactions.
    "The government has ordered the central bank to replace the dollar with the euro to limit the problems of the executive organs in commercial transactions," government spokesman Gholam Hossein Elham told reporters Monday.



    "We will also employ this change for Iranian assets (in dollars) held abroad."

    The move comes amid mounting pressure from the United States for the UN Security Council to agree sanctions against Iran over its controversial nuclear programme.

    Elham added that Iran's budget would in future be calculated according to euros.

    "Until now the budget has been calculated according to revenues in dollars but this calculation will now change."

    If memory serves me right the US got the Saudis to sell all their oil for dollars back in the 80's. That meant paper for oil. If Iran succeeds in making the switch the Russians will follow. It is quite complicated to determine if it is a good thing or not because of the size of US dollar assets and the euro could reverse course and burn those holding them. It does emphasize another complication in our energy policies.

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  4. DR makes a good point. Ultimately any holder of US dollars has to buy something from the US. If it is real estate, that cannot be exported. Those who own US real estate will find their property values going up. The same if they decided to buy US equities. The stock market would rise. It would more than likely cause inflation in the US.

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  5. DR,

    US Energy policy is absolutely insane... we have more than enough to cover our own needs, except for the fact that we have too many folks insisting on keeping us from developing those Western coal reserves, drilling in ANWAR, etc... Considering our present circumstances (GWoT), I tend to favor the Manhattan Project idea for energy, to occur simultaneously with full development of our current resources...

    However...

    I reckon I'm a bit like Joe Buzz when it comes to a knowledge of economics, minus the home brewing apparatus... but I do recall the brouhaha over "the Japanese buying everything over here." I also recall wondering what the big deal was, since it wasn't like they would be able to dig up the land and haul it to Japan if things went sour.

    I simply keep my fingers crossed that our wealthy class will remain large, active and forever willing to spend that spare $ 2000 on the latest newfangled gadget in sufficient numbers to bring that little goodie as quickly to commodity status as possible.

    Recall the voyage of the VCR from a $ 4000 suitcase-sized behemoth to a higher quality $ 60 book-sized device that high schoolers can afford with lawn mowing money.

    I may never get rich, but as long as trends such as the VCR Curve continue, at least I'll be able to live like I am.

    If we can get our govt off its collective @ss, maybe I can live in relatively safety as well.

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  6. At least someone cares.

    Costa Rica Puntarenas land for sale
    Land for sale near the beach in Punta Morales. It is only 2 kilometers from the beach and is 70% plane land and has forest.
    Punta Morales is near San José and among all Central Pacific zone ( Puntarenas ) is developping for tourism. You can build an hotel or a villas or condos project in this 21 acres land ( 84,200 sq meters ) with a great front of 57 meters to public road ...
    The Price
    The owner is living in San José and does not have plans to develop there, so the price is very good
    $ 125,000 USD .

    It is not beachfront but it is what ever it is. An idea of what rufus's 100 acres of Central American countryside is valued at.

    $6,000 USD per acre. A mile and a half from the beach.

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  7. Desert Rat said, "The US assets in foreign hands are physically where?"

    Mexifornia.

    2164th wrote, "If memory serves me right the US got the Saudis to sell all their oil for dollars back in the 80's. That meant paper for oil. If Iran succeeds in making the switch the Russians will follow."

    If Saudi Arabia switches to Euros, we should pull our aircraft carriers out of the North Arabian Sea and tell them to rely on the French ones.

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  8. Anonymous said...

    re: Is Allen a postal worker?

    Nope.

    Are you a sanitary engineer, Norton?

    Oh, its not my "story". It is America's story. We blog commenters juggle geopolitics while the American political elites continue to produce "Colonels" Murphy.

    Unless, the public gets its head around the gravity of the Murphy scandal and takes action, say by contacting Congressional delegations, Iran, the Horn, the KSA etc etc etc will go no better. Given the reception to the Murphy story, I expect things to go from bad to worse.

    Anon, its just a matter of priorities. At the moment, in my opinion, the cart is before the horse or, you might say, the head is up the ass.

    Have a nice day.

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  9. WC,

    re: "If Saudi Arabia switches to Euros, we should pull our aircraft carriers out of the North Arabian Sea and tell them to rely on the French ones."

    Nothing like muscular foreign policy.

    "Oh, what sad times are these when passing ruffians can say `ni' at will to old ladies. ... There is a pestilence upon this land, nothing is sacred. Even those who arrange and design shrubberies are under considerable economic stress at this period in history."

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  10. Allen:
    The problem with little interest in the Murphy story is that it's a common crime type story. We expect that the authorities will take the appropriate action and the fake JAG will get his just rewards. What is more disturbing is the fact that he was able to get away with it for so long.

    One thing to remember though is that there were lawyers before there was a Bar Association.

    What's more disturbing to me is the military's attitude toward Christian chaplains. Tiger at Observanda has been all over that.

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  11. Allen quoted, "Oh, what sad times are these when passing ruffians can say 'ni' at will to old ladies. ... There is a pestilence upon this land, nothing is sacred. Even those who arrange and design shrubberies are under considerable economic stress at this period in history."

    Brave Sir Allen ran away, bravely ran away away. When danger reared his ugly head, he bravely turned his tail and fled. Yes, brave Sir Allen turned about, he turned his tail, he chickened out. Bravely taking to his feet, he beat a very brave retreat. A brave retreat by Sir Allen.

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