Saturday, January 29, 2005

The Perfect Storm

Yesterday, over lunch, I found myself saying something I have not been able to say out loud. And after I said it, I saw the truth of it in the eyes of my lunch guest.

We were talking about the future and how there are some major drivers that are beginning to come together in what might be characterized as a perfect storm.

Most of us know this term because of the 1991 storm that was labeled the "perfect storm" by the National Weather Service. The storm sank the swordfishing boat Andrea Gail, whose story became the basis for the best-selling novel "The Perfect Storm" by Sebastian Junger. The resulting movie impressed me mostly with its terrific giant wave scenes. The storm was actually a "storm within a storm" and it ultimately became a true "extratropical hurricane" that became famous in meteorological circles for many reasons, including the oddity that it was never officially named.

These major policy drivers I speak of are Climate Change, Peak Oil, and the Collapse of the Dollar. They make for a different kind of Perfect Storm, but no less ferocious or dangerous.

Instead of the Collapse of the Dollar, I could use a "very irresponsible government in Washington". I say irresponsible because this government pays attention only to what it believes and says, not the facts or the realities of the event or issue. Some have referred to this government as the worst in American History and they may be right. There is some pretty good competition though.

So we have three very large, very ill timed events coming together.

All three are somewhat undeniable.

And, they all are remarkably and profoundly interrelated.

First, there is Climate Change, which, to quote the Republican Senator from Maine, is a environmental timb bomb for the entire planet. But, climate change payouts by insurance companies are already beginning to add up. This puts pressure on the Financial Markets.

So, it is not just a time bomb for the environment, it is a financial time bomb.

And then there is the issue of Peak Oil. Two years ago, Peak Oil was on the lips of crack pots and the terminally negative. Now, the issue is appearing in M I T's Technology Review this month. Books such as the End of Oil, and the Party is Over have brought the Hubbert Curve to the front burner of many a board room and policy meeting.

Peak Oil means permanently high oil prices as resource depletion begins to work its way into the mature oil fields of the mid east and the rest of the world. Few would believe that the great North Sea Field, seemingly just discovered, is now past its prime, but it is true. The United States saw the peak in its oil fields in 1973, just as Hubbert predicted. We use 84 million barrels a day in the world and some say that 84 to 90 million is all the world can produce.

Couple this limit with growing demand from China and India and you have a perilous intersection of supply and demand curves.

Then, there is the decline of the dollar. After President Clinton left office, you could buy a Euro for 84 cents. Today, you need a $1.30 something to buy a Euro. That means the dollar is worth 62% of what is was worth four years ago. That means the Dow Jones Average from the perspective of an European is actually at 6470 not 10,400.

To compound the issue, you have the unique relationship of the dollar to the price of oil. Oil is traded in dollars. It's been that way since World War II. Oil is the largest commodity traded in the world. Therefore, in order to buy oil, you must have dollars. This makes the dollar a valuable thing. When the dollar goes down, oil prices go down for everyone whose currency is going up against it.

So, just like the stock market is actually down, the real price of oil is actually less. Oil at 50 dollars a barrel to a European is actually more like 31 dollar oil. And that is the price that OPEC has pegged as their price target.

Part of the reason the dollar is collapsing is the resumption of historically high deficits coming from the government of the geographic state of the United States since the end of the Clinton administration. A substantial part of these deficits come from the Tax deferment policies of the Bush Administration. (Tax relief for the wealthy is actually just tax deferment and redistribution of future burden.) Much of the rest is military spending.

So a weak dollar makes oil cheaper for Europeans and Japanese, therefore sending the wrong pricing signals that oil is about to become more and more valuable because of the supply demand curve intersection.

Meantime, the world spends its time worrying about how to get more oil when they should be concentrating on how to quit using oil and coal completely.

At the same time, the most powerful military force in the world is in the hands of a bunch of oil and gas gizzards from Texas who can't tell their assets from a hole in the ground.

The result is a big bad storm.

A Perfect Storm.

So what happens?

The most powerful military force in the world will make up a bunch of goofy reasons to put a huge military force in the region where 2/3 s of the World's remaining oil remains. They will croon about democracy and freedom, but they really just want the oil.

Meanwhile, their currency is collapsing and the World hates them.

They get bogged down, and they need more troops.

Some geographic states, who are not that sympathetic,

secretly help the neighbor nations.

The Worst Government in American History seemingly gets re-elected.

Then they get cocky.

They can do no wrong.

It reminds me of the story of the German General with his girlfriend.

He tells the girlfriend, who really knows nothing about geopolitics,

that the Fuhrer is going to invade Russia.

He proudly shows her the invasion map.

The girlfriend looks at the map and at the scope of the task.

And then looks at the General, just a little confused.

She asks,

Mein General, has the Fuhrer seen this map?

Humankind saw 15 million deaths in the

War to End all Wars.

We experienced 55 million deaths in

World War II.

How many deaths might come from

World War III?

In the meantime,

Everyone is worried about Social Security.

So am I.


Anonymous Anonymous said...

the links in this post are great. they tell the same story.

10:01 AM  
Anonymous Anonymous said...

Jeeeesusss. makes me want to move right now quick.

10:09 AM  
Blogger oZ said...

Many who say they worship Jesus are actually looking for the end time and the third world war. if you google it, you will see their anticipation.

11:03 AM  
Anonymous Anonymous said...

anyone who knows the scriptures can see that these are the end times. the return of the Jews, the European Union, the corruption of society, the acceptance of bazarre life styles, even the painting of bodies.

3:28 PM  
Blogger oZ said...

OK OK OK. I can't and I won't wish for millions to die so I can take a ride on the rapture train. I think that there are different ways for the world to end. For example, this system of greed and corporate dominance could be transformed into a system that is a great deal more advanced and fair and sustainable. Remember, the Lord said he would destroy Ninevah and then he changed his mind because they changed their ways. We shouldn't forget the lessons of Jonah.
Now that said, thanks for your comments.

9:41 PM  
Blogger Urban Denizen #512 said...

IN passing, Post One (to followed by the more salient Post Two)

I find it ironic that most of the comments and corresponding responses from OZ regard a subject altogether tangential to the subject of the post. Nevertheless, as the caveat suggests, I'll comment on the tangent only to respond to the premise in post two.

The study of "end times" has been at the center of pop culture for the better part of twenty years, reaching its apex with the publication of the "Left Behind" Series. Said study is known as eschatology in seminary and academic circles. Twenty years ago, a young budding seminary or religious studies student would be hard pressed to find a specialized eschatology class in the seminary curriculum, but now, all serious religious teaching institutions devote at least a semester to it, to the point that the same young, budding pastors and church leaders build a career on it, not unlike Tim LeHaye.

Most if not all of the varying eschatological worldviews derive from the interpretation of three core texts in the Bible: The Book of Daniel (old tradition,) Matthew 24 (the new tradition,) and Revelation (an extension of the new tradition.) This being said, as in most academic circles, some scholars take great liberties in trying to be different by "discovering" books and or passages in The Bible that they proclaim as the eschatalogical "missing link." Scholars and religious charletons also rely heavily on texts like Kaballah to "answer" escatological questions.

The formulation of interpretation is known as one's hermeneutic, which literally translates as "his interpretation," from the Greek. There are roughly 5 "accepted" escatological worldviews within Judeo-Christian thought, though literally hundreds of interpretations--varying hermeneutics--exist. The difference in said worldviews usually regards sequence of events and the sequence by which "certain figures" are introduced to the world stage. (I've read hermeneutical-->eschatological essays proclaiming Jimmy Carter as the anti-christ. So as not to discredit the more serious escatological scholars, ideas not unlike Cater as anti-christ are eschewed.) And believe it or not, these accepted worldviews do not [always] correspond to a particular denomination. In fact, one need only contact the Young Family (ie Ed Young, Sr. of Second Baptist Church in Houston, Texas and his sons) to realize the escatological divisions within families, within denominations. Why do these divisions exist? The answer is two-fold.

Goethe once wrote, "Translations are like viewing a tapestry... from behind." I understood this all to well when, in not understaning German, I attempted to read every translation of Rlke's "The Panther." To date, there are approximately 200 translations of Rilke's immortal verse. The quotation speaks for itself: any translation, any worldview, is subject to encapsulation into mere words, and these words do not communicate or realize the full point very satisfactorily. On top of this, Christianity is a very personal, very subjective religious study/faith. So long as one maintains a personal faith and belief that Jesus is the Christ, the Bible bolsters and encourages the individual pursuit of religious study, because afterall, God made you with "something in mind" to best equip you personally with the making and subsequent understanding, and in the case of eschatology to best equip you with understanding the ending.

But christianity and God has a funny way of throwing sevens once you get a little intellectual momentum--a pocketful of chips, because all in all, according to the same book from which one derives their eschatological worldview, no one can or will ever know when The End will occur. To this end (pun intended,) in my mind, regardless if I believe the precepts of the Judeo-Christian tradition, eschatology is an exercise in futility and better left to the ambitious science fiction writer within the good Pastor.

And to be bring everything full circle, incorporating the premise of Oz's post, these issues and challenges awaiting us, day to day, are inspirational in so far as we can and will do something about them, just like the innovative promethean figures before us, because the alternative is no charge to even wake from our beds each day.

Take Heart, oh ye of little Faith.

8:05 AM  
Blogger oZ said...

At the risk of fanning these flames, Bill Moyer spoke about this very issue over the weekend. I read the piece on

Thanks SG for your insightful comments.

9:47 AM  
Blogger Urban Denizen #512 said...

Funny thing happened to the web site this morning...

I was checking out for "for sale items" and noticed that the humble folks managing the site posted a headliner hyperlink atop the page titled "Peak Oil." The hyperlink connects you with google search results on "Peak Oil."

As a bit of context, was started by, you guessed it, Craig. He is a resident of San Francisco, and more or less an all-around great guy who firmly believes in the free market that is the internet. He also is an advocate of alternative fuel sources, and I understand he invests a considerable amount of his money in promoting said sources.

The hyperlinik is posted amongst caveats regarding purchasing scams, and the like. It is evident ole Craig and the good people that work for are aware that the current administration is pushing the biggest scam in the world.

Keep talking. Keep discussing. Like ripples across the pond, the conscious digital world is beginning to make waves.

9:23 AM  
Anonymous Anonymous said...

the right wing is now talking about a perfect storm of strategic interests, economic, and environmental concerns, and has called for a Set America Free iniative. Check out the Institute for the Analysis of Global Security Web page. Also check out Committee for the present danger, and the Hudson Institute.

2:39 PM  
Anonymous Anonymous said...

this is a great post. I love the has he seen this map line.

10:15 AM  

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