Daily Digest 6/8 - The Day The Dollar Died, The "Solution" Is Collapse, Factors Affecting The Price Of Oil

• The Day The Dollar Died
• Europe At A Crucial Crossroad
• Charles Hugh Smith: The "Solution" Is Collapse
• Healthy Behaviors And Where The Money Goes
• The Coming Catastrophe in Government Bonds and Bond Funds
• Factors Affecting The Price Of Oil
• Nord Stream: Russia's Natural Gas Link to the West
• Environmental benefit of biofuels is overestimated, new study reveals

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

The Day The Dollar Died (Phil H.)

Europe At A Crucial Crossroad (David B.)

We all know what happened to Europe (and the world) the last time a German leader tried to impose “unity” on all of Europe. The principal difference between the failed efforts of The Third Reich, and the more promising efforts of Merkel’s Fourth Reich is that while Hitler used tanks and bombs Merkel relies upon bonds and debts. Her message to Europe’s debtor-nations is no less authoritarian than Hitler’s (and almost as menacing): agree to this forced-marriage (under Franco-Prussian rule) or we will bankrupt you by cutting off further access to credit.

Charles Hugh Smith: The "Solution" Is Collapse (Thomas C.)

It won't become painful to borrow from our grandkids for quite some time, and it will probably not become progressively painful, either, because we will suppress the pain with superlow interest rates and other trickery. The pain will more likely be of the sudden, unexpected, "this can't be happening to me" heart-attack sort: the free-money machine will unexpectedly grind to a halt in some sort of easily predictable but always-in-the-future crisis.

Healthy Behaviors And Where The Money Goes (VeganD)

The Bipartisan Policy Center report Lots to Lose: How America’s Health and Obesity Crisis Threatens our Economic Future offers several recommendations for improving nutrition and physical activity in the US. In addition to recommendations for schools and childcare providers (start encouraging physical activity at an early age, and require 60 minutes of physical activity during each school day), it has several recommendations for communities. One acknowledges that local government funds are tight, but suggests partnerships to increase the use of limited spaces for play and exercise:

The Coming Catastrophe in Government Bonds and Bond Funds (David B.)

Ten years are no better, in fact, if you caught a segment I did here a few months ago, I talked about a German bond auction that actually cost the investor a few cents per bond to own. They lost money on them.

Factors Affecting The Price Of Oil (OPA)

How much of the recent moves in oil prices can be explained by changing perceptions of global economic activity? One way I thought to get an impression of this was to look at the extent to which recent oil price movements are mirrored in other commodities. I was able to assemble a quick data set on spot prices for copper, corn, palladium, platinum, soybeans, and wheat, and calculated the principal component of the weekly percentage changes in these 6 commodity prices over January 2005 to September 2011. The value of this principal component for any particular week in fact turns out to be pretty close to the average change across the 6 commodity prices for that week. I'm a big believer in using parameters that are a priori plausible values in preference to over-fitting a given sample, and the principal components analysis suggests that a simple average would be an excellent summary statistic to use for these purposes.

Nord Stream: Russia's Natural Gas Link to the West (OPA)

The 759 mile-long Nord Stream subsea offshore natural gas pipeline, from Vyborg in the Russian Federation’s Karelia to Greifswald in Germany has been laid along the bottom of the Baltic. Nord Stream is owned and operated by Nord Stream AG. Nord Stream’s first pipeline leg was laid in May 2011 and inaugurated on 8 November 2011, with a second parallel line to be laid in 2011–2012. After the commissioning of the second line at the end of 2012 the Nord Stream pipeline will be transporting 55 billion cubic meters of gas per year to Europe.

Environmental benefit of biofuels is overestimated, new study reveals (Jeff B.)

Since results of the LCAs have been widely utilized, Searchinger and Smith conclude that the overall development and research of alternative fuels has been heading in the wrong direction. "The best opportunity to make beneficial biofuels is to use waste material or to focus on relatively wet but highly degraded land," notes Dr. Smith. If bioenergy crops are produced on degraded land, less GHGs will be emitted and more will be stored. There are additional benefits: this method will not compete with crop production for food, textiles, and other products.

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