Podcast

Gregor Macdonald: What the End of Cheap Oil Means

We better get smart about using our remaining fossil BTUs
Saturday, January 19, 2013, 6:09 PM

On the heels of Chris' recent report clarifying the global net energy predicament, he and PeakProsperity.com contributing editor Gregor Macdonald sit down to talk in depth about the broken relationship between energy costs and economic growth.

For much of the twentieth century, the developed world saw a steady march upwards in wages and living standards, due primarily to huge quantities of cheap, high-yielding liquid hydrocarbon. As we find ourselves bumping along the plateau of Peak Oil's apex, suddenly we find that "growth" is a lot harder to come by.

Of course, if you follow the news today, this is not the story you are hearing. Talk of an energy bonanza and imminent energy independence (in the U.S.) are everywhere, thanks to gas fracking and tight oil production. What is missing from the headlines is the cost side of the equation and a blindness towards future demand. 

For certain, shale gas will be a boon for the U.S. and some other countries. But very little is transported these days by gas, and there are no mega-sized infrastructure projects underway to change that anytime soon. Extraction of new tight oil plays is increasing production, but not by enough to offset other field declines elsewhere in the world, and not at the prices we were used to over the past century. The era of cheap oil is over, and these higher permanent prices act as a boot on the throat of economic growth. Hence the mired global economy we have been experiencing in recent years.

Rather than fooling ourselves with fanciful "energy independence" pablum, we should be looking hard at what kind of future we want to have now that oil is no longer cheap. And we should be asking ourselves in regards to the remaining fossil fuels we're extracting: How can we put these non-renewable BTUs to their best use, before they become expensive, too?

I think the main conversation we are not having is that wages are very unlikely to ever return to a relationship to energy costs that would make the United States economy into a happy economic story once again. In other words, this whole idea that we will restore that unique relationship of high wages and low energy prices -- that is what we are not dealing with. So by telling ourselves the story that we are producing more energy, you can clearly see the cultural impulse there. The cultural impulse is there is to suggest "See? There is a chance, there is a chance we can get the energy cost down again and then there is a chance that that wages will come up again. That relationship got very skewed and kicked into a nasty bad place over the past decade. That is very much a way of thinking about what our economic story is, why we had the crisis, and why this supposed emergence from the crisis that we have been plodding our way through the past several years, why it feels so dis-satisfactory, why it feels so insufficient in many respects. 

This goes back to the Industrial Revolution. What caused a revolution in British wages? The appearance of coal in the British economy. Why is that? Because not only did you have human workers making stuff, but also, now you had coal helping you make stuff. Coal was the slave labor that you did not have to feed or shelter or clothe or house. And you could get coal to work for you and you could work for you, and you put it all together and it becomes high wages, and you get to pocket those high wages.

So this is the dream that we once enjoyed, here in the States with our cheap oil and our high wages. And since oil became less cheap, the wages have stagnated, and I just do not see how we are ever going to get back to that relationship again. Maybe we will talk about this; I do have some hope that we could stabilize the relationship in a future world, which is more weighted towards the power grid in which some manufacturing returns to the United States. But I think the main thing is – you asked the question, what is the main thing we are avoiding? We are avoiding the very painful prospect  – likelihood – that we will not be able to return to high wages, low prices, cheap energy.

As you point out, one of the cruel things that we left in the wake of our higher rate of growth and our cheap energy era and our high wage era was the debt. We left a tremendous amount of debt. Of course there is the public debt, but I really think what has been governing the economy in the post-crisis era has been the intractable nature of the private debt. We have both done work on charting the course of the private debt and I am sure we would agree that there has been some deleveraging that has occurred, but it is not nearly the amount of deleveraging that the media either thinks or wishes has occurred.

When you compare private debt levels to assets in the United States, yes, we are off the peak, but we are only back to 2006 levels. Most of the people I know were worried about debt levels in 2006. So to “deleverage” back to 2006 levels is not an achievement.

This promise of greater energy supply is obviously dangling out the prospect that somehow that will translate into cheaper prices and that the debt can be serviced and possible extinguished or deleveraged. But as we are finding the process is grindingly slow, and that is a big reason why the economy is grindingly slow and just does not seem to make much progress.

These things can work for a short period in the short term, and that is what we have been doing in the last five to seven years. We have been adding either expensive or marginal sources to the liquid fuel supply, as you know. This process can be thought of as one where the older more cheap oil is continually swapped out for the more expensive, unconventional, more expensive oil, and that makes for some sort of new risks when it comes to how the global economy may slow or speed up and what it may do to oil prices.

Because what I think we are going to find, especially in resource plays like the tight oil resource plays: if price goes below what it is costing these companies to extract this oil, it is actually going to be quite easy for these companies to simply stop drilling; to just stop adding additional wells. Because if you look at the actual mechanics by which wells are currently being added, they are added on a highly discretionary basis. They go in, they produce a lot of oil for a short period of time, and then they go into steep decline.

I think what people do not understand is that the Bakken is not like a traditional oil field where you are developing the whole field at one time; you are really just sticking little pin pricks into the topography of the western Dakotas. It is not like a tar sands operation, in which you sink all of the steel in the ground first over a five- to six-year engineering project and then you try to get paid back for the steel that you sunk in the ground. This is more of an inch-by-inch incremental project in the Bakken.

So what it looks to me is if price goes below sufficient levels – and I currently put that if price goes below $80-$75 a barrel for any length of time – we will just lose supply much more quickly. I just do not think the market or the economy or Wall Street has gotten its head around the fact that a good chunk of our supply now is ready to go offline at the moment that price drops. And that is probably why price has been so sustainably high, because the global futures market for oil realizes that oil that you see now costs a lot more so it is not going to willing to sell you oil two years from now at $70 or $75 a barrel. It knows that the only way that $70 or $75 a barrel oil is available two years from now is if we are back into a deep recession. I mean a deep recession.

Click the play button below to listen to Chris' interview with Gregor Macdonald (48m:43s):

Transcript: 

Chris Martenson:  Welcome to another Peak Prosperity podcast, I am your host, Chris Martenson, and today I am speaking with a name familiar with PeakProsperity.com readers, Gregor Macdonald, who joins me to talk about energy, specifically net energy, what is left over after you have expended the effort to obtain it. And we are going to talk about a lot of the recent reports that have just been coming out from the IEA, the EIA, from BP, from CitiGroup, from all these groups saying that we have apparently unlocked a new energy resource and we are headed into a new age of energy abundance.

We really need to talk about that, because guess what – the devil is in the details. I think we both happen to believe that current data supports the view that the economic model based on ever-increasing quantities of fossil liquid fuels is coming to an end, whether we want it to or not. We are going to discuss the whys of that, the implications of it and what model or models are likely to replace it.

So Gregor, I am really glad to finally have you on as a podcast guest.

Gregor Macdonald:  Hey, it is great to talk with you from my home here in Portland, Oregon. As some of our readers may know, you and I used to be neighbors in Western Massachusetts, and I certainly miss many aspects of Western Massachusetts, but I just love being here in Portland. And besides, I have you holding down the fort there back in Western Mass anyway, so – good to talk with you today.

Chris Martenson:  I miss Portland, I lived there for three years of my life in the southwest district over near Lewis and Clark College; loved living there. You can grow anything there, and I loved that. As an early inept gardener, that was a great place to get started.

Gregor Macdonald:  It is a wonderful place. We have not started growing yet, but you get the bountifulness of local agriculture through all the local farmers’ markets here, so that has been quite a nice aspect of our life here since we arrived.

Chris Martenson:  I am jealous of that part of it.

Now, here we are in 2013. I would love you to give our listeners, many of whom have been reading your work on our site for some time now, just a little bit of a background on how you developed your expertise on the energy markets.

Gregor Macdonald:  Yes, so when I returned to the United States at the beginning of the last decade – 1999, 2000 – I started trading and investing for myself in the stock market, and I did the typical route where I used shares of common stock. I also used stock options, and I spent several years outside of the country at that point, both in London, England and in Wellington, New Zealand. I had returned with a fresh interest in currencies and different currencies, and also different cultural perspectives on value.

I guess through some of that international experience, I also go very interested in oil, because you may recall this was during the period of time when oil went into its all-time historic low. It was down around fourteen, fifteen dollars a barrel, and there were many declarations that oil would be cheap for a decade. There was the famous Economist cover, “just drowning in oil” I think was the famous cover, and when I returned to the States I was fascinated with the relationship with the dollar and oil – and that was all I knew, Chris. I just thought the dollar is so strong for a country that does not produce much oil and here is oil that is a miracle substance, which is so cheap. And of course, at that time everyone was in love with technology stocks, Intel, Juniper Network, and so forth.

So I started trading for my own account. And what I realized quickly, as every trader realized, all you are really doing is information arbitrage when you are trading. You are basically trying to gather just a little bit more knowledge for yourself than the market knows about, and trading out ahead of that, and seeing if you can exploit that knowledge. And I found that it was astonishingly easy to start to gather knowledge about energy and the energy sector because it was a sector that no one was interested in. I mean, everyone was very wrapped up in technology.

So as I moved into my time where I was trading and also beginning to write about the economy just for myself, not for any sort of publication, I began to realize there was this whole universe of information about global energy markets. You could get free data from governments about what global oil production was, and you could get all sorts of historical data about prices, and you could research companies and find out how much oil they were sitting on. And I just felt like I was bounding through a garden of delights of all this wonderful information. I would look at the prices and the markets, and I would think to myself, my gosh, very little of this is reflected in prices. So that was a very exciting time for me, that 2000 to 2005, 2006 period, because that is really when oil began to go through its price revolution. And everyone was baffled, thought it could not happen, thought it was the strangest thing they had ever seen in their life.

Oil at thirty dollars a barrel, what are you talking about? I remember seeing people come on Bloomberg Television and CNBC in 2003 and 2004 and all sort of old veteran analysts saying gosh, if oil ever got to forty dollars a barrel which we do not think it will the big companies will pump so much oil they will just knock oil back down to thirty or twenty five dollars a barrel. So it was really my international experience and then coming back to the States and taking an interest in what seemed like a boring, lifeless, uninteresting area that got me down the rabbit hole, if you will, of becoming an energy researcher.

There is more I could say about this, because what comes after this period is my discovery that there was even more data and more information out there that could be had for free, that people were not paying attention to. And I guess what surprises me today, Chris, is that even today, ten, twelve years later after this experience, there is still a lot of data and information out there that people are not using that could be useful. A lot of it is free; it can be difficult to access, but there continues to be a mismatch between what the media says about what is happening in energy or what the market says about what is happening with energy and what is in fact happening. So I am surprised that the information arbitrage opportunity still has not completely gone away.

Chris Martenson:  It is interesting hearing you say that. I remember back, too, when oil hit forty dollars a barrel, very famously – I think it was Greenspan at the time – said it is transiently just going to be at forty, meaning he thought it would just transiently stick at forty for a bit and then go back down again. It was the expectations of a wide range of people who were not looking at the base data the way you were, the way I was. The base data was clearly saying that there were huge new entrants on the demand side that supplies were becoming deeper, trickier, more remote, and less fruitful than prior discoveries. So there were a variety of things pushing on this story.

And Greenspan was proved to be right; oil did transient right through forty and never looked back and never touched it again. And here we are with world oil at $110 a barrel, and I will have to say that that is sending a pretty important price signal – to me, at least. It is just simply saying the cheap dot-com oil is over. And yet we have these extraordinary new sets of reports coming out.

I love that you mention in reference the dot-com pieces, because as I push through these reports, I am starting to get that uncomfortable feeling I had when I was reading about the dot-com stories in the heyday and also the housing bubble. There is a certain mentality that takes over, and it is dominated by seeing similar phraseology, similar straight-line ruler extrapolations of current trends forever into the future. A dropping of the guard, a lack of skepticism, the wholesale adoption of the most rosy articulations of the narrative.

And so this is in the IEA reports that came out, the EIA, CitiGroup, now most recently BP. They have all released these reports that just pick on one aspect of this, the tight oil – this is what people are calling shale oil, and we are more correctly going to start referring to it as tight oil to hopefully differentiate it from oil shale so we can avoid that confusion – this tight oil sits in a variety of rock structures; the Bakken is one example of that, Eagle Ford is another. All of these reports have just basically ramped up its production from here to somewhere between three and as high as six million barrels per day, in the case of the BP report, and then it just magically stays there as a permanent feature of the future. What are your views on this?

Gregor Macdonald:  Well, in the menu of logical fallacies, one of my favorites is the fallacy of composition, and that is, we all engage in a little fallacy of composition. We wake up in the morning, we stretch our arms, we get out, we look out the window of our own neighborhood and everything seems peaceful and harmonious, and we say well, if it is peaceful and harmonious on my little street here, it must be peaceful and harmonious everywhere. And of course that is not the case.

What has happened is that there is new oil production in the United States, and of course, the United States happens to be a country which is the center of global media. So we have a fallacy of composition story here, which is simply that because the United States has temporarily reversed a long, multi-decade decline in its own oil production by accessing new oil resources, that somehow we can build this story up to apply it to the rest of the world.

Let me just say two brief things about this. It was always known that the U.S. had other oil resources that were more expensive and could be extracted. California offshore oil has been there for a number of decades, ready to be extracted if anyone wanted to take the risk – the environmental risk – or undertake the costs. It is not shocking that we would development some new extraction techniques to get into this tight oil here in the United States.

What it has not changed, however, is the hole. It does not really knock the trajectory of global oil production much in any particular direction because we are really just looking at currently a worldwide increase of a little bit more than 1.5% of global oil production after being trapped around the ceiling since 2004, 2005. We have seen a slight increase of global oil production. 

But here is the funny thing, Chris: It is not because of United States oil. I mean, this is the cruel joke; the United States sits within non-OPEC production, and then OPEC has its production, and non-OPEC has its production. Yes, the United States has increased its oil production, but the rest of non-OPEC has continued to see declines. So when we look at the recent uptick in worldwide oil production over the last ten to twelve months, is it because of non-OPEC in this new oil coming out of the United States? No, it is not. It is because OPEC finally has managed to increase a little bit of its production. Many countries in non-OPEC continue to struggle just massively with oil declines in their production or just stagnation.

So again, this is a wonderful economic story for the people of North Dakota and other tight oil regions, but it has not changed the whole. So, fallacy of composition, media can push that story for as long as they can or until people figure this one out. There is one way for people to figure out the fallacy of composition, and that is the fact that the price of oil is not going down.

Chris Martenson:  There is that stubborn little factoid that sits out there, and even with this recent worldwide bump up in oil, it is fairly minor as I look at it. So the world since 2004 – if you use that as a reference point, or 2005 – bumping along in a ban between seventy-two and seventy six million barrels per day, it is about a 5% band. And that is with all of these recent advances in U.S. tight oil production that is with worldwide capital spending in 2012 being a little over $600 billion on new oil exploration and production projects.

It is an extraordinary rate of spend; it is the highest ever, of course, and when you are spending a little over a half trillion to basically nudge along at a 5% band, I think this should be sending warning signals to anybody who just looks at the date, even at that macro level. There are many details we could go into and take it all the way to the field-by-field basis, but when you are spending more than a half trillion to bump along in a band, what should we take from that?

Gregor Macdonald:  I think your recent essay shows that we have doubled the global spend on extraction and production – have I got that correct – in the past ten years?

Chris Martenson:  Yes.

Gregor Macdonald:  And then, of course, the oil price itself went through a price revolution in which you could say it really quadrupled. I think the right place to begin this is $25 a barrel, and we have now successfully repriced to an average of $100 a barrel. Many people said that repricing could never happen; they are now silent. Many people said that if it did happen it would be given back; they, too, have fallen silent on that prediction. What is clear is that the repricing not only took place but it has been maintained and kept; we are not going back to cheap oil.

So we have had this extraordinary price revolution in the commodity itself, we have had tremendous cost inflation, and for all of that we have maybe an extra one and a half percent of supply if you use seventy four million barrels a day, I think we are currently producing seventy-five and a half million barrels a day. We were trapped at that ceiling of seventy-four million a day for about seven years, and we have just poked our head above that, but again, this is recent poking above that level. So even to the layman it should be obvious that the nature of this resource known as oil has undergone a very dramatic phase transition and it is not a surprise.

We are a century into the oil age, and we are in the back half of global resources. The easy oil was extracted first, and that is always the case with any sort of natural resource. So this current state of media stories – even this week the release of the BP outlook, which again you and I talked about – is echoing this story of plenty. I just chuckle because even some of these glowing reports you get down in to the details and they say oh, by the way, as optimistic as we are about all these new resources that are coming online, there are really not going to change to trajectory of the existing declines from the existing fields. So within the body of some of these reports, you do get some refreshing sobriety, some acknowledgement that between now and 2020 what we end up net in terms of gains – we can be all excited about tight oil, but what do we wind up in terms of a net gain in global oil production? Maybe not much.

Chris Martenson:  It was interesting, also, in that report I wrote that all these recent forecasts – the BP one you are mentioning goes out to 2030 – and yes, we might get six million barrels per day coming out of tight oil if all goes according to plan. And then we have to hold that up again, the 4-5% decline rate in existing fields, which translates into roughly forty to fifty million barrels per day of lost production out of those between here and 2030. And now we just have to wave our thumbs around and go maybe six million on the plus side, we are offsetting that again against this forty, fifty million barrel decline on the other side.

And this is exactly where most, I think, I would say – rational predictors of the Peak Oil phase had been saying, like Colin Campbell was talking about this a long time ago – that you do not just hit a peak and fall off; the world is probably going to bump along a plateau. A lot of data is really consistent with the idea that we are bumping along a plateau. Yes, there is this extraordinarily stuff going on with new technologies and it is really quite amazing.

But the part I really want to talk to you about those is that the details are really where the story resides, and yet to get to the details you have to break the components apart and look at them. And as you and I have talked about in the past, they are actually – they being most of these major reports – are starting to lump things back together. There are two big buckets of that. The first one I want to talk about, because this one got the most airplay, is that the U.S. is going to surpass Saudi Arabia in oil output potentially by 2020. What do we have to believe –this involved lumping of sorts that I think we have to tease back apart – what is getting lumped in there?

Gregor Macdonald:  This is taking any sort of energy source that could vaguely be regarded as a liquid and throwing it into the same container and saying look what we have built here. So currently, while it is true that Saudi Arabia probably produces some natural gas liquids, really the best comparison on an energy basis when looking at these two global oil producers, the United States and Saudi Arabia, is just to look at the production of crude oil – fine, crude oil from conventional production, crude oil from unconventional production. But at least restrict the comparison to crude oil, because each barrel of crude oil has about 5.7 million BTU, you can think of that as roughly six gigajoules of energy, but each barrel of natural gas liquids only has two thirds of that amount in energy, call that four gigajoules of energy. So the United States has seen extraordinary growth in natural gas liquids.

This is known as “obfuscation by complexity” when you basically take many different types of substances or take many complex factors and lump them all together just to come up with some sort of headline number. And I think for the United States to “achieve” a headline of becoming a greater liquids producer than Saudi Arabia by 2020, you have to add up all our oil and you have to add up all the natural gas liquids, which I mentioned only have two thirds of the energy content, e-content.

And then you start throwing in things like biofuels. It is hard to evaluate the energy content of biofuels because, of course, they are really just energy inputs from other sources. But your original feedstock, which is generally corn, has so little energy content compared to a comparable unit of a fossil fuel that it is almost hard to compare. It is almost hard to see, it is almost a microscopic element of energy content, so it is quite silly or disingenuous or whatever you want to call it to lump all this together.

The bottom line, Chris, is the U.S. is not close now, nor is it likely to become Saudi Arabia in oil production. And again, that is fine. Add all the unconventional production; we do not have to accept that out if it is oil, it is oil, even if it costs more to extract it; just make that the comparison. Fortunately the public does not understand this complexity, so they get fed a story that is just composed of the headlines.

Chris Martenson:  It is startling to me that we have to then try to decompose these things, because the story of oil for me has always been a story of transportation fuels. That is why I personally care about oil, because we live in a global just-in-time society. Our economy, any economy, is highly dependent on transporting things from point A to point B, and if we could transport things from point A to point B with these natural plant gas liquids, which would be things like ethane and propane and butane, pentane, these are useful substances. And from a manufacturing or industrial standpoint, you can get as excited as you want to about those, because they are important feedstocks for plastics, fertilizers, and five hundred thousand consumer goods. But what they are not useful for is putting into fuel tanks and driving around with them.

So in this story, the United States still imports an extraordinary amount of transportation fuel, and then, yes, we have been drilling these wells and we have been getting a lot of these natural plant gas liquids, which are, again, nice. But to lump them in [together] is to have batteries and ice cream in your house and just say this is how many calories I have in my house. They are not really comparable forms of energy or sources of energy, so I have been confused by that lumping.

And so here it is important to say really what do we have? We have some important industrial feedstocks. That is a different story than saying we are about to surpass Saudi Arabia who principally just pumps out transportation liquid fuels in the form of all their different grades of petroleum they have. So that was my first confusion as to why we were suddenly comparing what felt to me a little bit like apples and oranges.

Gregor Macdonald:  Yes, and I think the American public must be feeling fairly confused at this point, because it has been treated to a storyline over the past 12 to 15 months about an increase in U.S. production and how bountiful and how wonderful it is, but this increase in production never translates into lower gasoline prices. Meanwhile, since the peak of 2005, 2006, 2007, of oil consumption here in the United States, Americans have taken off at least ten if not twelve and possibly even fourteen percent of their consumption of oil, and we have seen a similar decline in consumption of oil in Europe. This is the way the grim reaper of price basically frees up supply to send it to a different part of the world where the higher-priced oil can be afforded because we have been essentially operating in a zero sum game.

So this increased production of liquids in the United States and natural gas liquids has actually had some benefits in terms of our manufacturing. We continue to see some feel-good stories about either the return of manufacturing to the United States or the retention of existing manufacturing in the United States because we have cheap electricity and we have some good-priced chemical feedstocks for the chemical and other industrial activities. That is all good, but none of this has changed the trajectory of what is happening in U.S. automobile transportation, which of course is such a big part of American culture and the American economic story since WWI and that has been such a huge part of our identity and our economic growth and our consumption rates. This little bounty of tight oil is not really changing that at all.

Chris Martenson:  The fallacy of composition is extended out; there is this remarkable dropping of context that I have seen where the idea that because the United States is going to produce more of its own oil that this somehow is isolated from the fact that the United States is still a global member of a global supply chain that exists out there. And even if we are only importing 10% of our oil at some point in the future – which we will never get to; we are at about 40% – if we can get that in half by 20% I think that would be a surprise. But even if we got there, we are still importing a fifth of our oil, and that oil of course is competed for on an international stage. And when we cast our eyes over to India and China in particular, their share, their desire to increase their consumption, has been just breathtaking over the past ten years. And not just for oil but for all forms of energy.

It is a startling sort of a trajectory, and I think we have to be willing to suspend a certain amount of skepticism, as it were, in order to have the energy story be as rosy as it has been painted going forward. We have to believe that China and India are going to curtail their consumption by some means other than price rationing. And we have to believe that the United States is going to be able to reinvigorate itself economically with lower energy consumption in the form of oil, which we do not have any real good data for that in the data series so far, but we have to believe that that is going to be true. And we have to believe that the recent experience in our first probes of tight oil is going to continue to be just as successful going forward. Meaning that we have not accidentally hit all the good sweet spots early and there is plenty of acreage and we do not run out of sweet spots or acreage or capital in this story.

So all of these things have to be true. So for a minute let us suspend all the disbeliefs you and I might have, even if all that is true. What are we not doing, as a nation, with this story, even if we have all this energy abundance out there? Should we not be thinking about other things like, someday oil and fossil fuels have to run out because they are finite resources? Is there some massive reconfiguration of our energy landscape or infrastructure, our operating business, that we would have to get to? I know you have written about this with respect to the electrical grid, but what is it that we are not having as a conversation with these stories about how abundant we seem to be?

Gregor Macdonald:  I think the main conversation we are not having, Chris, is that wages are very unlikely to ever return to a relationship to energy costs that would make the United States economy into a happy economic story once again. In other words, this whole idea that we will restore that unique relationship of high wages and low energy prices, that is what we are not dealing with. So by telling ourselves the story that we are producing more energy, you can clearly see the cultural impulse there. The cultural impulse is there is to suggest see, there is a chance, there is a chance we can get the energy cost down again and then there is a chance that that wages will come up again. That relationship got very skewed and kicked into a nasty bad place over the past decade. That is very much a way of thinking about what our economic story is, why we had the crisis, and why this supposed emergence from the crisis. That we have been plodding our way through the past several years, why it feels so dissatisfactory, why it feels so insufficient in many respects. So I think that is what we are not dealing with – we are not dealing with both variables because, as you and I know, widely available and cheap energy almost always appears with high wages, for obvious reasons.

This goes back to the Industrial Revolution. What caused a revolution in British wages? The appearance of coal in the British economy. Why is that? Because not only did you have human workers making stuff, but also, now you had coal helping you make stuff. Coal was the slave labor that you did not have to feed or shelter or clothe or house. And you could get coal to work for you and you could work for you, and you put it all together and it becomes high wages, and you get to pocket those high wages.

So this is the dream that we once enjoyed, here in the States with our cheap oil and our high wages. And since oil became less cheap, the wages have stagnated, and I just do not see how we are ever going to get back to that relationship again. Maybe we will talk about this; I do have some hope that we could stabilize the relationship in a future world, which is more weighted towards the power grid in which some manufacturing returns to the United States. But I think the main thing is – you asked the question, what is the main thing we are avoiding? We are avoiding the very painful prospect  – likelihood – that we will not be able to return to high wages, low prices, cheap energy.

Chris Martenson:  There is a third piece in that, which for me is that around the type of economic and financial systems we put in play around those high wages/cheap energy landscape that you have articulated, and that is debts that are constantly increasing at really profound rates. Much faster than underlying economy taken as a total, when we take the articulation of the economy being GDP and we discount that a little bit because  there is a lot of financial trickery in there and raw statistical fudgery. So if we say the true productive economy is sitting under there, we are piling extraordinary amounts of debt on top of the productive economy, which itself is a derivative of cheap energy. So when I look at this, the articulation that I think is the subtext behind all of these reports trying to say listen, there is abundant energy and we can just get back to how things were, I totally understand why people would naturally and intuitively and thankfully flock to that message saying this means A, we do not have to change and B, we can get back to how things used to be and we want rising wages, easy lifestyles, we want all of that. If we can get back to that, I understand why naturally people would want to go there.

The risk however, being articulated in this podcast, is maybe we cannot, and we should at least start allowing a little bit of daylight into the conversation to say what if $90 a barrel oil is what we need in order to viably prosecute these shale plays? And $90 a barrel oil is not compatible with the old way of racking up debts faster and faster and everybody being able to share in those spoils. We would detect that in the form of higher wages generally across the middle class. That narrative is really breaking down, and so I see many of these reports as sort of last-gasp efforts to convince ourselves that we are not an aging starlet when we look in the mirror; we are actually still pretty attractive.

Gregor Macdonald:  Yes, as you point out, one of the cruel things that we left in the wake of our higher rate of growth and our cheap energy era and our high wage era was the debt. We left a tremendous amount of debt, and of course, there is the public debt. But I really think what has been governing the economy in the post-crisis era has been the intractable nature of the private debt, and I am sure we have both done work on charting the course of the private debt. I am sure we would agree that there has been some deleveraging that has occurred, but it is not nearly the amount of deleveraging that the media either thinks or wishes has occurred.

Really, when you compare private debt levels to assets in the United States, yes, we are off the peak, but we are only back to 2006 levels. I remember living in 2006 and did not know what it was like to live in 2007 or 2010 or 2012 and I was worried about debt levels in 2006 and most of the people I know were worried about debt levels in 2006. So to “deleverage” back to 2006 levels if you have been around for ten years, it is not an achievement.

Again, just as you are saying, this promise of greater energy supply is obviously dangling out the prospect that somehow that will translate into cheaper prices and that the debt can be serviced and possible extinguished or deleveraged. But as we are finding the process is grindingly slow, and because it is grindingly slow, that is a big reason why the economy is grindingly slow and just does not seem to make much progress.

Chris Martenson:  My prediction is, it will continue to struggle along, at least by using old tricks and conventional measures, because the net energy story is really the story here that needs to be told. Because it is not like the net energy story immediately shifts, but is it is a rather complicated interplay where two things are happening. We are depleting the guar fields and the other major conventional finds, which had extraordinary net energy returns, and into that mix of slowly diminishing conventional oil, we are starting to pump in more and more of this unconventional oil, like the tar sands. All you have to do is look at a tar sands operation to understand it is not remotely comparable to a conventional oil field, and we are getting net energy returns of three to one, five to one, depending on who is doing the counting of that.

And it is my supposition or my theory that we just cannot possibly enjoy the same dynamics and interplays between these other variables – which are ever-increasing debt levels at far faster rates than economic growth, with these uneven distributions across the global landscape in terms of who is producing, who is consuming goods, energy, all of those pieces, money – and start feeding in these lower net energy sources and expect things to work quite right. It would be a little bit like taking your Ferrari, which has a very special fuel blend it requires, and slowly starting to put a little bit of kerosene in with your highly refined, high-pentane mix. It just does not seem like it is going to work quite right.

Gregor Macdonald:  These things can work for a short period in the short term, and that is what we have been doing in the last five to seven years. We have been adding either expensive or marginal sources to the liquid fuel supply, as you know. This process can be thought of as one where the older more cheap oil is continually swapped out for the more expensive, unconventional, more expensive oil, and that makes for some sort of new risks when it comes to how the global economy may slow or speed up and what it may do to oil prices.

Because what I think we are going to find, especially in resource plays like the tight oil resource plays – some of my recent research and discussions with colleagues about the tight oil plays is, if price goes below what it is costing these companies to extract this oil. It is actually going to be quite easy for these companies to simply stop drilling, just stop adding additional wells. Because if you look at the actual mechanics by which wells are currently being added, they are added on a highly discretionary basis. They go in, they produce a lot of oil for a short period of time, and then they go into steep decline.

I think what people do not understand is that the Bakken is not like a traditional oil field where you are developing the whole field at one time; you are really just sticking little pin pricks into the topography of the western Dakotas. It is not like a tar sands operation, in which you sink all of the steel in the ground first over a five- to six-year engineering project and then you try to get paid back for the steel that you sunk in the ground. This is more of an inch-by-inch incremental project in the Bakken.

So what it looks to me, Chris, is if price goes below sufficient levels – and I currently put that if price goes below eighty to seventy five dollars a barrel for any length of time – we will just lose supply much more quickly. I just do not think the market or the economy or Wall Street has gotten its head around the fact that a good chunk of our supply now is ready to go offline at the moment that price drops. And that is probably why price has been so sustainably high, because the global futures makes for oil realizes that oil that you see now costs a lot more so it is not going to willing to sell you oil two years from now at $70 or $75 a barrel. It knows that the only way that $70 or $75 a barrel oil is available two years from now is if we are back into a deep recession. I mean a deep recession, not a mild recession as we have seen already; these little mild recession fluctuations do not drop the price of oil anymore either, do they.

Chris Martenson:  No, but I think when you are printing $85 billion a month out of one central bank out of many, it is hard to get prices to give you good signals. But low signals is certainly not something they are well suited for in that environment. 

As we look forward, then, as you look forward what do you see playing out in the oil space if the marginal cost of new production is supporting the price of oil and it would take a monster recession to dent that? Are you basically forecasting steady oil prices and rising, or where do you see this going?

Gregor Macdonald:  My general view is that every year that goes by now, the bottom for oil prices gets sturdier and sturdier, and so we have reached a point where the bottom for oil prices is very sturdy. And you would need at the very least a combination of an increase in supply with a pronounced drop-off in demand in order to get prices down below $80 a barrel just for six months. I do think that we are always at risk for that happening; if we go into recession, you could see that as the first response to entering a new recession. And again, this would just go on for six to nine months.

On the upside, there are some problems with getting oil to all-time new higher prices soon, because again, the economy remains either stressed or restrained, however you want to think about that. It is probably some combination of both, because the world is in energy transition and it is still in the process of trying to digest the oil shock which has occurred over the past decade. And it is going to take more years to digest that oil shock, and the economy is not ready to see oil reprice a second time as it did the first time, to, say, levels at $150 a barrel or $200 a barrel.

Global economy is not ready for that, so we are in this perma-restraint. I think the base case is we are restrained, and we are stressed, and we are plodding along incrementally in the economy, and the downside risk is limited and the upside risk is limited, barring a new economic shock which sends the global economy downward. When the global economy would be ready to reprice oil to a much higher price, we would have to somehow go back into some higher rate of growth, which I just do not see is possible right now, as you and I have discussed – too much debt levels. Even this transition to the global power grid, which I have been writing about, it, is encouraging, but it is not the kind of thing that gives you that fast-rate economy.

I have said this many times, and I know you agree with this, Chris, that the Oil Age, that Liquid BTU Age, that was the sexy, fast economy age that is what gives you that hyper economy. Not just a robust, strong economy, but just a really fast-moving economy. Transitioning to the power grid is sustainable but just does not give you the kinds of abilities to accelerate and have big high rates of growth that the world enjoyed in the last century.

Chris Martenson:  Interesting. So restrained and stressed, it sounds like we are stuck in a band for a period of time until something else comes along. For a while, I thought the international community would have to recognize Peak Oil as a real thing. Of course, it’s extraordinary talk lately in the press that the theory of Peak Oil is dead and all sorts of other crazy talk as if marginal increases in supply somehow got you around the idea of depletion of a finite resource. I never understood how you could just depose those, but there they are fully juxtaposed in modern press. Do you see a point in time when the international community will say hey, wait a minute, this is real, depletion is an actual fact of life and we are now going to have to figure out how to manage this! Is that an open conversation you ever think we are having? Because we already know governments and militaries have had this conversation, but as a culture, nationally, globally, do we get there?

Gregor Macdonald:  We are already failing at having the conversation about slow growth. Rob Arnott, who is an institutional investor in southern California, Jeremy Grantham, another institutional investor, they are talking about a decade of 1% growth. That message has been treated with hostility, with disdain, with haughty dismissal, has not been laughed at, but people are angry about it. Robert Gordon at Northwestern University looking at several hundred years of industrial revolution and growth in the West, again, not happily received.

So when you ask me, will the culture accept Peak Oil? I think the culture – maybe its intuitive powers – may be more prescient and more spot-on than we might give it credit for. I think the culture absolutely understands that Peak Oil equals either the end of fast growth or the end of growth or the beginning of a stage of sluggish stagnant growth, and I think the culture knows this grudgingly but just does not want to know it consciously, and that would be the psychological therapeutic interpretation.

So it is going to be ready to accept both of these concepts at the same time, when it is ready and we see some encouragement that there is some more marginal acceptance of these things, Chris. I have spent a lot of time on the Internet over the last decade, and what I see now in the comment sections of mainstream publications, the Wall Street Journal, and the New York Times, people have never heard of – they understand that we have probably moved into an era of slow growth, that it is probably because oil is no longer cheap. Yes, there are new sources of energy supply; yes, we will use those new sources of energy supply; but they just will not give us the price and power type of combination that oil gave us, and that is pretty obviously what that spells for the long-run growth rate of the economy.

Chris Martenson:  From your lips to the rest of the world’s ears. I note that the finance world has not quite gotten its pricing ideas around slow growth and what that would really entail. We are still pricing our assets as if rapid resumption of high growth is in the cards, and if it is not, that is where I think we will see some fairly significant repricing events as we go forward.

So with that – I think you just did a great articulation and summary before – so we are out of time and I am going to close with that. But Gregor, this has been just wonderful. Thank you so much for your time today.

Gregor Macdonald:  It was great to chat with you, Chris, and I will speak with you soon.

Chris Martenson:  Fantastic. I sure hope so.

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62 Comments

Nate's picture
Nate
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classic quote

Chris Martenson wrote:

But to lump [hydrocarbons together is like having] batteries and ice cream in your house and just say this is how many calories I have in my house.

SingleSpeak's picture
SingleSpeak
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Wages in Relation to Energy Costs

Gregor mentions wages never being able to return to the high levels they reached in relation to energy costs. IMO, this is something that really needs to be understood, especially in states like California, where I live.

As I investigated other communities that might be a bit more rural than where I currently live, I noticed that the largest employer in each city that I investigated was either the local school district, the military, or the city government itself.

Realizing that such a large percentage of the population are not relying on free market forces, helps explain why we are broke/broken. They have come to expect contracts that give them wages and benefits that refect the cheap energy days. They are doing the same amount of work as they used to do, so they expect the wages and benefits to continue to grow as they have become accustomed.

Unfortunately, as Gregor points out, the real driver of the production that generated the real wealth in our economy was cheap energy. The government job-pay was temporarily sustained because the private sector managed to produce so much at such a low cost. As the price of oil bites into the economy, the private sector feels the effects immediately through less business to their store, or office, or trade, while the public sector, in general, keeps living the same life they always have. 

Eventually, the gap will be closed as the wealth of the private sector recalibrates and forces it's servants to quit living like kings, but it's going to be very messy, especially with so many living off the gravy train.

SS 

 

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westcoastjan
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great discussion (again)

It seems to me that the overall mentality we are seeing similiar to a pinball machine mentality, with thoughts bouncing around between the first four stages of grief in a non-linerar fashion. The MSM does an admirable job of taking us into brief moods of denial, anger, bargaining and depression with their many conflicting examples of information and propaganda such as this new concept of energy independence. Since most people will be much more inclined to believe in a happy outcome than a negative one, these lies are not being challenged. Many people don't know what to believe anymore, and thus are not yet ready to move on to the final stage of acceptance, which will precipitate the behavioural changes that we so need to see. It will stay like this as long as people take what is being reported in the MSM at face value, and do not allow their curiosity to rise to the surface to question things for themselves.

Our transition out of our fossil fuel dependency is a painful loss that will not be easily overcome. I suspect the transition will be anything but in linear fashion, with plenty and anger and denial thrown in along the way. We are still a good distance away from final acceptance of the fact that what once was is no more.

Jan

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Chris and Gregor you have it right...

...These BP and Harvard studies are misleading and counter productive. Saying natural gas liquids and implying they are gasoline is like saying salt water is fresh water. You can drink both but one makes you sick and you die, and the other gives you life.

The only thing I am truly confused about is that I know these reports came up with the right numbers but why they are fudging them to fit a mold is baffling.

BOB

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Another Take on Wages

Another thing to keep in mind about wages in the US is that from the beginning of the industrial revolution, capital has faced a labor shortage. We've lived on a continent with such vast resources in material and energy that it was possible to produce just about anything we desired at a low price even though real wages continued to rise in the face of massive immigration. That relationship ended in the 1970's. With the advent of the cheap computer in the form of the integrated circuit and the desire to outsource touch labor, Americans have had to work more, save less, and incur more debt just to stay more or less even in their standard of living. Now at the end of the cheap oil era, the increasing debt has come due and unpayable. It's not possible to work enough hours at current wage levels to recoup what is owed against the attempt to keep the living standard intact. And as labor is the source of all wealth, its lower value relative to energy has pretty much excluded borrow to grow as a viable strategy for capital accumulation. The fact that we have a capitalist system to produce wealth only makes the problem worse because those who own capital seek to valorize that capital for their own benefit. Enterprises that would benefit society as a whole are ignored in favor of profit centers. This goes hand in glove with capitalisms refusal to appropriately price risk. "Social unrest and degradation is someone else's problem," says the capitalist. There are plenty of things worth doing that would generate wages for workers, it's just that there is no profit in it.

If we as a society were interested in raising the material living standard, reducing violence, improving the standard of health, etc., there are some steps we could take in that direction. But almost by definition, they are not attractive to the capitalists as there is very little profit potential in them. Here's a short list:

1. Universal healthcare. By removing the profit incentive from medicine, it will be a lot cheaper to deliver healthcare to the masses of people. There will also be several added benefits. A healthier workforce is a more productive workforce. Removing the fear of financial disaster from seeking medical treatment will go a long way in reducing the overall stress level among those who can only marginally afford insurance now. Disease prevention can come to the fore. Under our current system, disease is how the system realizes a profit. There is no profit potential behind preventing disease. Universal healthcare also sends a message that you need not suffer in isolation. Society as a whole cares enough about you that you needn't suffer for lack of money.

2. Convert our ground transport system to electrified rail. Along with this would be a refitting of our infrastructure to make it compatible with rail transit. This world be a massive undertaking that could pay trillions of dollars in wages. The returns would be substantial. Reduced CO2 emissions, lower rates of transport fatalities, reduced stress during travel or commuting to work, lower costs per ton/mile, less suburban sprawl, lower costs per passenger mile. Unfortunately, a lot of our infrastructure is centered around automobile transit. There would have to be a lot of zoning changes and rethinking of how we arrange our city-scapes. That alone would guarantee plenty of jobs for decades to come. Of course, society as a whole benefits, not the individual investor.

3. Overhaul the industrial agricultural model toward a lower energy regime. Reduce chemical inputs and make agriculture more local. There would also have to be a greater demand for labor as fossil energy inputs decline. As the the fossil energy cost for agricultural products is driven lower, there might be dislocations among more agriculturally remote areas. Other models for growing food would become competitive, such as permaculture or local public and private gardens.

As Macdonald pointed out, high energy costs force lower growth rates, maybe we should take this as a good thing. It might be the forcing function that gets us off the treadmill of "borrow to grow". Instead of issuing debt, the system of finance could be transformed into a system of issuing value. Without the burden of profit and interest, there might be more for all. Instead of endless growth our goals might be geared more towards higher efficiency, less waste, equitable distribution, and happier people.

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Denial

Well done interview, good discussion.  DurangoKid makes a lot of good points, but it seems clear to me at the moment that denial is still gripping the nation and most of the rest of the world.  As those in the transition movement make clear (and I agree with them) our quality of life can improve even as material standards subside.  The question is, how does this conversation get into the mainstream so that the myriad of solutions in the offing can be tried and fine tuned?  I have a feeling that by the time the discussion gets to  the mainstream and Washington the deal will have already been done, and the  population will have done the hard work on their own inspite of, not because of centralized political/media structures.

It seems to me that change always comes from the bottom up, from the fringes to the center. Our only hope is the creative imagination of ourselves and our local citizens sharing there own personal transitions till an alternative economy emerges with some sort of critical mass from the wreckage of the current mess.  As a result, my own preferce would be to see more effort focused not prognosticating how best to survive and prosper in the collapsing economy, but on how we practically build a new economoy step by step. How do we take this brilliant insight and interview to the next step.  Not just prepping to survive, but creating something new?  This is a subtle, but I think important distinction.

I am getting a feeling that the next turn of the crank is not far away and will be nastier than anything we have seen to date.

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DurangoKid,

...you have this right. Yet, we haven't even begun. Amazing isn't it?

We will have a labor shortage as we move forward because Oil will see to that.

Debt can't be serviced so will be defaulted, and this event must happen before we can move forward. I would imagine then that market forces will take hold and the lower wage will determine where housing costs finally settle. We have built many more millions of homes than is needed so housing is priced at the levels the lower wage can afford it. I still think we go when housing is finally settled. It hasn't.

With regards to an electrical and transportation build what is so great is it will be balanced through all corners of the economy and will benefit everyone. So why this isn't on the drawing board yet is a puzzle. Every politician should be in favor of something that would be a build in every part of their district. So again is confusing to me. 

Truly if anything is a build and they will come is electric and mass transportation. Then again if the narrative as was presented by BP and the Harvard study will only slow the process rather than start the planning process. 

Nice essay (D) Kid

BOB

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Marxism alive and well.

Another thing to keep in mind about wages in the US is that from the beginning of the industrial revolution, capital has faced a labor shortage. We've lived on a continent with such vast resources in material and energy that it was possible to produce just about anything we desired at a low price even though real wages continued to rise in the face of massive immigration. That relationship ended in the 1970's. With the advent of the cheap computer in the form of the integrated circuit and the desire to outsource touch labor, Americans have had to work more, save less, and incur more debt just to stay more or less even in their standard of living. Now at the end of the cheap oil era, the increasing debt has come due and unpayable. It's not possible to work enough hours at current wage levels to recoup what is owed against the attempt to keep the living standard intact. And as labor is the source of all wealth, its lower value relative to energy has pretty much excluded borrow to grow as a viable strategy for capital accumulation. The fact that we have a capitalist system to produce wealth only makes the problem worse because those who own capital seek to valorize that capital for their own benefit. Enterprises that would benefit society as a whole are ignored in favor of profit centers. This goes hand in glove with capitalisms refusal to appropriately price risk. "Social unrest and degradation is someone else's problem," says the capitalist. There are plenty of things worth doing that would generate wages for workers, it's just that there is no profit in it.

Durango, you've pretty much given a small summary of Das Kapital (of couse there's a LOT more). Interestingly, most people haven't actually read Marx because they dismiss him as the architect of communism, when in fact it was actually Lenin. Marx had very little to say about what would come after the collapse of capitalism, but ge did give probably the most rigorous critique of capitalism ever. He saw what Smith and Ricardo couldn't see...that eventually the acquiring of resources and capital would eventually fall into the hands of a few large corporation (small ones being absorbed) and that the notion that the government would be a neutralizing force against this monopoly would be "wishful thinking." Marx saw value and wealth as energy, and the surplus "value" that wasn't paid to the actual worker was pocketed as "profit." What's amazing is how prophetic he really was in describing the booms and busts of business cycles, continual unemployment as the response to rising wages, and eventually what may be what we are predicting... collapse. 

What I also see in Marx's writing that is possibly happening now is the coflict between the economic base or foundation and the superstructure that is supposed to mirror it and support it. The two are not mirroring each other and we may be experiencing the "shift"  (or collapse) to a new economic foundation. 

Thank You

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AkGrannyWGrit
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Obfuscation by Complexity

My favorite term "obfuscation by complexity" how many people are busy putting food on the table and dealing with the minutia of life so they scan the headlines. They are "fed a story composed by the headlines". When I was growing up a lie by omission was still a lie or we would say they are trying to feed us pond slime.

Also liked "fallacy of composition" the way things are in our life or where we live are a certain way so it's probably the same elsewhere. Unfortunately, it isn't so, there are a lot of people suffering in far away places we just don't pay attention.

Yeah, I feel so much better, you see Mr. & Mrs. Middle America isn't dump we are just being fed a slimy green lie called "obfuscation by complexity".

AK Granny

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ao
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DurangoKid wrote: 1.

DurangoKid wrote:

1. Universal healthcare. By removing the profit incentive from medicine, it will be a lot cheaper to deliver healthcare to the masses of people. There will also be several added benefits. A healthier workforce is a more productive workforce. Removing the fear of financial disaster from seeking medical treatment will go a long way in reducing the overall stress level among those who can only marginally afford insurance now. Disease prevention can come to the fore. Under our current system, disease is how the system realizes a profit. There is no profit potential behind preventing disease. Universal healthcare also sends a message that you need not suffer in isolation. Society as a whole cares enough about you that you needn't suffer for lack of money.

How does one remove the profit incentive from medicine?  I happen to have a perspective very different from the mainstream and from yours as well about "healthcare" but I'm interested in hearing your ideas.

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AkGrannyWGrit
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Quote

The rich mans dog gets more in the way of vacinnation, medicine and medical care than do the workers upon whom the rich mans wealth is built.
Samora Machel

I find that those who are pro profit in medicine often have not experienced living without insurance or have not lived with the fear that a medical crisis would/could mean financial ruin, bankruptcy and poverty. Have not watched a grown child refuse to go to the doctor or be denied medication due to lack of coverage. Perspective is relative, when we are able to walk in anothers path it can change. I applaud you for asking, I hope your perspective will be enriched.

AK Granny

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Chris and Gregor, I follow and understand Peak Oil...

...about as closely as you can (laymen) and, what is always lost between the two sides of this argument is the argument of when it will be the "Rule" of the day, and how we can quickly make adjustments. It will be from this realization moment that we will finally move towards a priority list of things that must get done first. So until this moment in time occurs we must wait as kicking the can down the road even further will just be the spineless response from our politicians (to be fair what option do they have). They too have to have cover and until Peak Oil is mainstream around the world they just won't do anything.

Erik T. in a recent thread does a nice job of taking everyone else's research and binding it together in a nice essay using the original thinkers (from both sides of the Pay wall) numbers, and to his credit he doesn't butcher the research or come too strong with his opinion. I don't always agree with his sudden and 'extreme pain' (relative to your pain tolerence) conclusions however, as I still believe we transition just a little slower on the down slide than is sometimes intimated (what do I know though, then again what do you?).

I can imagine that Chris is ever thankful for Erik's input here at PP because Erik is front and center with regards to so many issues. He's a foreign correspondent at FNH and does a commodities wrap up. In addition to having such adventures as world traveler extraordinaire, food critic, and his valiant attempts at military foreign policy reactions admitting himself that he is not an expert at anything. Like us, he is a laymen trying to figure things out. So, like everyone here at PP he is a valued contributor. We are all just trying to figure everything out. Some for financial gains and some to just survive or are just learning and researching, which is the greatness of this PP site. What I appreciate about PP is that the check books and bank accounts for the most part are left at home and we all are on the same page. Like baseball players on their respective teams. 

None of us are expert because the Data is incomplete in so many areas. I mean really, how can you put any numbers together without a full accounting of what Saudi Arabia has in the ground. How can you even predict with some certainty any numbers when the above ground issues are so skewed. For instance: If Iraq was running at normal levels and Iran and Nigeria then the supply side of the equation would be so much different.

If we used natural gas for our own consumption then this would absolutely effect near term prices of Oil. What the numbers do show is that production has not risen ever higher in spite of the high costs of Oil and that is a tell that we have hit a plateau. We also know that depletion every year is about 5% and so to stay even we must replace this lost depletion and it appears that we are (?). However, to get to 100 million barrels of Oil each and every day and it has never been done is just crazy thinking in a 15 to 20 year time frame.

Still, using some of Charles H. Smiths suggestions it can be managed but we should start now in managing this. It isn't solvable except "to get off Oil before it gets off us". I know this that we can conserve Oil at a far greater pace than we are with some simple low hanging fruit adjustments. 

I think the human spirit is such that we can manage what fuels are available and make better use without the system completely disintegrating. Charles H. Smith has many positive reactions to our plight and I think Charles is locked in too, and he doesn't get nearly enough credit for his outlook on the future. He does by me however because visually it is easy to see how right he is.

A little story: When I was a kid we walked and rode our bikes. I would cover all my needs for what was probably a 10 to 15 mile diameter of turf (mostly a mile or two in either direction). I just needed to get to three different play grounds to have days filled with nothing but playing ball. If I ventured further it was a 3 block walk to catch a bus to the downtown area and walk from my bus to the downtown area for shopping or other visual wonders. Many times I just walked from the bus stop to the ball park. The adults would do the same to get to their work places. They took a bus and 1 car was enough. I only drove in a car when we went to church (seldom drove there) and for the Sunday family drive. It is manageable Folks especially if you are making arrangements to live in a walkable community that has all your needs within easy transportation distances or access to main thorough fairs to go long distance to a ball game or downtown area. My point mainly is that a bus can take 50 or so Folks, on schedule, at an extreme savings to you using your car, gasoline, maintenance, insurance, etc...4 to a car is not the norm now but I still think it will go without a hitch if you have to walk or ride your bike to work especially when it rains, snows or is as cold as it is today in my part of the planet. Hell, the soccer Mom's have already made this adjustment in my neck of the woods. Every day I see a different Mom taking other Mom's kids to and fro school, practices and other functions. We will just transition nicely if given a relatively short amount of time to network. Leave it to Mom and get out of the way.

We'll eventually figure things out and having stores, and alternate and redundant systems has always been a good idea. Chris talks Resilience and Preparations and I absolutely agree with this basic concept.

Regards

BOB 

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Labor Shortage?

It is difficult to see a labor shortage developing in the future irrespective of the level of production of fossil fuels so long as those sources of energy are replaced.  I premise this statement on the compounding of knowledge and the consequent rapid growth in the capabilities of robots.  Furthermore, the intermediate technology of 3D printing is evolving at breakneck speed, and will before long enable the production of many items without leaving the home.

This labor-reduction track is complemented by the continued growth in global population.  While there may be a blip in time where there are localized labor shortages as individual societies catch up to the 21st century, the very act of catching up will make labor redundant.  Labor shortages are hard to envision absent either a population crash or an energy crash.  There's no indication that either will happen and there certainly will be no knowledge crash nor will we suddenly develop a craving for high labor input products at higher prices to functionally and aesthetically better products made by our robot slaves or our software-driven replicators.

We need a new model for the distribution of wealth and physical products, a model that more closely maps to the distribution of knowledge for in the future wealth and physical products will become increasingly the concretization of knowledge and not of labor.

Communism is dead. Capitalism is moribund.  A new system will arise or we will enter a new Dark Age.

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Moribund?

Theres nothing wrong with capitalism....its the best, and only way for a buyer and seller to leave a transaction happy and content.  The issue is inflation - a fractional reserve system relying on credit and money printing is the root of whats wrong.  A balanced budget doesn't allow for example - boomers/silents to take from the now and send the bill to the future.  You need what you need and wants are just that.  A barter enconomy is a notch above lawlessness.  Add a unit of exchange and you've got capitalism.  Isn't it odd the same year the federal reserve was created (a private bank though I'm sure you know...) the federal income tax was established?

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a point that Grego missed

Excellent presentaion by Grego and Chris giving the link between energy, the economy, and production and wages(labor). What I rarely see mentioned is the latest ominous portent out there in the aligator pit:Robotic labor. The sequence as laid out by Gregor was hand labor to energy assisted labor, but labor still done by hands. The next obvious step in the chain that Marx commented on was concentration of wealth into fewer and fewer hands...............and eventually NO HANDS. Robots have the potential to accelerate that change. Until I researched how widespread robotic labor(AKA machine slave labor) has become, I did not see the negative potential to our society. I covered this subject in a recent blog and I hope Chris and Gregor and some of the extremely bright folks who have commented here will look at this final chapter of "Whatever happened to the jobs? and why aren't they coming back?". The jobs are starting to come back as slave labor jobs. My energy blog raises this issue at length. cal48.com.

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I don't know, Oil does so much labor that it only...

...stands to reason that we rely on labor as an energy source in the future. I get the robotics thing too but a problem solving physical force can only gain momentum also are just a thought. Time will tell.

Right now I am focused on the economy as that appears next up on our troubled radar screen. Take a look:

http://www.hussmanfunds.com/wmc/wmc130122.htm

http://www.zerohedge.com/news/2013-01-22/january-richmond-fed-plunges-quadruple-dips-posting-biggest-miss-expectations-2009

http://globaleconomicanalysis.blogspot.com/2013/01/meet-baxter-robot-out-to-get-your.html

If fundamentals ever matter any more then these two reports are arguments that something is NOT right yet the market keeps trudging upward. It did in 2008 until it didn't.

Regards

BOB

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What is different these days?

RJE wrote:

Right now I am focused on the economy as that appears next up on our troubled radar screen. Take a look:

http://www.hussmanfunds.com/wmc/wmc130122.htm

Hussman provided the chart below. Note that from 1983 to late 1985, oil prices were about the same as the present price in 2012 dollars, but the S&P more than doubled during this period. That suggests to me that it is not oil prices that are slowing the economy. When Saudi Arabia gave up on curtailing production to support the high oil price, it collapse to about the equivalent of a present $40 per barrel. That did contribute to to the continued rise of the S&P into the late 90s.

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Stan, I see that too but Debt is so maxed out in...

...today's economy, and wages are contracting with unemployment and gamesmanship by business owners with the hours worked per laborer to manage the benefits paid to laborers. Oil today is most certainly having an effect on discretionary spending and ability to pay other bills. I think in some measure that the avoidance of paying ones mortgage (that is under water and not an investment positive) or the long process of actually evicting homeowners from their homes is playing an important role in our economy staying afloat (bankers playing games to prop the mortgage price as their being propped by the Fed). I think with this next Recession, and Mr. Hussman believes we are in one since June that housing and employment are due to take another hit, and more Folks will initiate the process to foreclose and bankrupt their debts that comparing this to the 82-85 period are two different data driven circumstances. It's not like money is sloshing about as M2 money is falling as the consumer and business hoard their cash because no one is really in need of any more credit. Capex is at best not happening, and bankers more restrictive. Growth itself is a fading reality as Oil will see to that so what event finally triggers a massive Deflationary correction? The consumer is getting slammed, wages are falling, facing higher food and energy costs and higher taxes for the medical entitlements, higher Soc. Sec tax as that bit of stimulus has ended, and bailing out our countries own maxed out credit cards.

I am NOT an economist, and most all my thoughts are because of conclusion made reading the Hussman's, Martenson's, Mish's, Smith's, Janjuah's, Grantham's, Chanos, and the like. 

If you pile on more debt to my own debt ridden household balance sheet then the least resistant and less painful solution is to just bankrupt all of this away, work with the banks on mitigating a new mortgage payment that is hundreds of dollars a month from your mortgage payment and lose nothing. Never pay that second mortgage as they will not get those funds. I believe that option is being considered by more and more Folks who realize they can live their lives with less stress and halve their costs to maintain their family and some semblance of their standard of living. I know what used to be considered a moral issue is now easily rationalized away as the bankers and the Fed have shown it no longer is an issue. Eat or be eaten is the game now.

I think these time are more 1929 until 1945 than 82-85 is my real short answer. Desperate times call for desperate measures. I think we live in desperate times.

Respectfully Given

BOB

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Home Nuclear Option

Bob, I agree. I think more and more people will take the bankruptcy route as their real wages contine to fall. I'm not sure it's full-on desperation yet, but it sure isn't looking good for the future. Interestingly, the hedgefunds have been buying up large amounts of homes in the past four years basically forecasting a boom in the rental market. I have been hearing from many friends in NYC that are renting that there is a lot of activity in the rental market right now. Many tenants are being given noticed with the owner's explanation being that "I can't afford to subsidize you anymore." I also agree that growth is fading in real terms and leveraged value in the financial sector is fueling what's left. It will be interesting to see how this shakes out. I'm with you, nobody knows, and capitalism is all good and wonderful as long as some part of the economy is forever growing (Hansen back in the late 60s turned the population argument on its head in defense of "mature" capitalism) but more and more the only thing that's left is the forever-growing money supply.

Thank You

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Couple of points

First, good summary from both Chris and Gregor.

Re "will the nation accept the limits to oil?": I've already seen online folks who say "yes, we need to move off oil", but they dismiss any potential difficulties of it, and tout their favorite drop-in substitute.  I suspect that this will be the next "official fantasy", and may lead to something like a major push for nukes, coal-to-liquids, or whatever, totally ignoring the real limitations that make such a substitution impossible.

Re the floor and ceiling of oil prices: what concerns me is that, for one reason or another, the floor will rise and/or the ceiling will come down.  If this is a possibility, it seems to me that the consequences when the two meet (essentially, when the cost of production is greater than the market can bear) could be a relatively sudden collapse.  Thoughts on this?

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Be careful of the collectivists

Sorry, but 10 thumbs up for this comment?  Really! I may need to re-examine what people say on these forums if this is the sort of logic approved of.  I don't want to sound too dismissive because everyone is entitled to his or her opinion.  But to me, some of what you're advocating teeters on failed policies of collectivism thought up many years ago and still clung to by Ivy League type elites even after many attempts and miserable failures (see USSR for prime example).

you write "Universal healthcare. By removing the profit incentive from medicine, it will be a lot cheaper to deliver healthcare to the masses of people".  Cheaper, maybe? who really knows though?  What incentive is there for cutting edge healthcare if there is no profit involved?  Our system has many flaws, cost being the biggest, but there is a reason that "wealthy people" from around the globe travel here for medical care.  Without profit motives I would bet an ounce of gold that the quality & response of the healthcare system would be drastically worse.  You also speculate to curing ills of individuals without any formula or evidence.  This is the same sort of logic Socialists dream of  when trying to build their utopia.  It has only worked in the minds of those on college campuses, not so much in the real world.

You also refer to our system as a "capitalist system".  I don't know if you follow the same markets and policy coming out of DC that I do, but we are very far from having laissez faire capitalism in this country.  I would say we have a brand of corporatism that has taken over our finacial systems & markets.

I don't disagree too much with points 2 and 3.  However, I would much rather see private capital come in and build railways.  Not sure if you've seen Amtrak's balance sheet in the last 20 or so years? 

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US health care

Sorry Jcat, health care in the US is the most expensive in the world by a considerable margin, and in terms of health treatment results, ranks somewhere around 37th, mostly behind nations with some form of socialized medicine.

http://www.nejm.org/doi/full/10.1056/NEJMp0910064

Quote:
Despite the claim by many in the U.S. health policy community that international comparison is not useful because of the uniqueness of the United States, the rankings have figured prominently in many arenas. It is hard to ignore that in 2006, the United States was number 1 in terms of health care spending per capita but ranked 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality, and 36th for life expectancy.3 These facts have fueled a question now being discussed in academic circles, as well as by government and the public: Why do we spend so much to get so little?

Doug

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Universal HC

jcat 3022,

I'm surprised you would be surprised at the popularity of universal health care. The WHO rates the US behind all other developed countries, not to mention it is proven that it works in all those countries. Wealthy people may come to the U.S. for some types of health care, but they also may come because we ration care to the wealthy first. I also don't think most people in the healthcare profession go into the field primarily for the money. I think you underestimate them and their dedication to improving care for the sake of improving the quality of life. I've heard your particular argument over and over regarding profit in health care, but it just doesn't hold up considering we have 38 other countries to point to that have UHC and provide better care for all. What I see is that money has corrupted health care as much as it has the financial sector. I would support universal health care (real universal health care, not Obamacare) because it would remove the insurance companies (might as well throw the legal system in there as well), which would in turn reduce administrative costs significantly and put the control of care back into the hands of those who should have it - the doctors and nurses.

I agree we don't live in a free market capitalism, but we haven't for a long time. That capitalism where the consumer is king has been gone for at least 50 years. As far as corruption, I think the level of corruption has risen because of the increased constraints we are hitting in regard to energy and the environment, not to mention the lack of accountability for financial irresponsibility and fraud. 

Thank You

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not all collectivists

jcat 3022, welcome.

And hey, not everyone here is a collectivist. Not hardly. We have everything from strict constitutionalists, libertarians, socialists, conservatives, gun control advocates, NRA members, climate change advocates, climate change deniers, and many more. I happen to be on the opposite side of that issue from Durangokid, as I think power corrupts and more power centralized equals more corruption. I'm a states rights kind of gal.

.

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broken and perverted

Doug wrote:

Sorry Jcat, health care in the US is the most expensive in the world by a considerable margin, and in terms of health treatment results, ranks somewhere around 37th, mostly behind nations with some form of socialized medicine.

http://www.nejm.org/doi/full/10.1056/NEJMp0910064

Quote:
Despite the claim by many in the U.S. health policy community that international comparison is not useful because of the uniqueness of the United States, the rankings have figured prominently in many arenas. It is hard to ignore that in 2006, the United States was number 1 in terms of health care spending per capita but ranked 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality, and 36th for life expectancy.3 These facts have fueled a question now being discussed in academic circles, as well as by government and the public: Why do we spend so much to get so little?

Doug

... largely because the two most powerful lobbies in the country, insurance companies and pharmaceutical companies, essentially control the system.  When William McGuire, former CEO of UnitedHealthcare, received one out of every 700 US healthcare dollars in remuneration, do you understand where the money has gone?  And under Obamacare, it will get even worse.  One of the unstated goals of Obamacare is to drive private healthcare practitioners out of business.  They will almost all eventually be driven into being corporate slaves for large healthcare corporation/insurance conglomerates and bureaucratic lackeys for the government.  It's coming.

On the flipside, we don't have healthcare in America.  We have sickness care.  Healthcare in America is broken and neither Obamacare nor universal healthcare built upon the present paradigm will solve the problem.  And I simply don't see a new paradigm ever being officially instituted with our present political and corporate structure.  Instead, it will develop as an underground movement, in bottom up fashion.

I could write for hours on this but just don't have the time ... partly due to factors stated above.

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ao wrote: DurangoKid

ao wrote:

DurangoKid wrote:

1. Universal healthcare. By removing the profit incentive from medicine, it will be a lot cheaper to deliver healthcare to the masses of people. There will also be several added benefits. A healthier workforce is a more productive workforce. Removing the fear of financial disaster from seeking medical treatment will go a long way in reducing the overall stress level among those who can only marginally afford insurance now. Disease prevention can come to the fore. Under our current system, disease is how the system realizes a profit. There is no profit potential behind preventing disease. Universal healthcare also sends a message that you need not suffer in isolation. Society as a whole cares enough about you that you needn't suffer for lack of money.

How does one remove the profit incentive from medicine?  I happen to have a perspective very different from the mainstream and from yours as well about "healthcare" but I'm interested in hearing your ideas.

Still waiting for an answer.  Any takers?

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Wendy S. Delmater wrote: jcat

Wendy S. Delmater wrote:

jcat 3022, welcome.

And hey, not everyone here is a collectivist. Not hardly. We have everything from strict constitutionalists, libertarians, socialists, conservatives, gun control advocates, NRA members, climate change advocates, climate change deniers, and many more. I happen to be on the opposite side of that issue from Durangokid, as I think power corrupts and more power centralized equals more corruption. I'm a states rights kind of gal.

.

Yes.

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Skeptic is a better term

Wendy,

While it was certainly not a central point of your post (to which I gave a thumbs up) the use of the term denier for folks skeptical of impending climate catastrophe is offensive.The term climate “denier” is a deliberate attempt to hijack the historical fact and relevance of the holocaust in order to prevent scientific debate. Scientists and journalists that use the term should hang their heads in shame.

What does a “denier” deny? Certainly not Climate Change: nor global warming since the late 19th century: nor the likelihood of human influence on temperatures. What, then? A “denier” denies certainty on a complex and still young scientific subject. A “denier” questions assumptions about the near irrelevance of solar, oceanic and other non-anthropogenic influences on temperature. A “denier” prefers evidence to model projections. A “denier” tests alarming predictions against actual observations. In short, many “deniers” exhibit the symptoms of being genuine seekers after scientific truth.

Call us skeptics, even in a disapproving way, but never deniers.

Stan

 

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Hi Wendy, Thank you for the

Hi Wendy,

Thank you for the introduction.  I agree with sentiments re: states rights.  As a Ron Paul liberty loving liberatarian (say that 5 times fast!) I get very concerned when I see the ideas of Marx and collectivists of his ilk get dangled in front of a population that is always looking to blame and figure out an easy solution to our deep rooted problems.  I'm in the opinion that all forms of collectivism are at their very core evil, and need to be refuted and sent the way of the dinosaurs.  That includes some sort of state run healthcare system.

Re: Obamacare, it is not that.  It is more of a fascist sort of system written by the insurance & pharmaceutical companies to benefit them the most.  I agree with a poster that most (not all) enter the healthcare profession to help people.  That is noble, but at the end of the day accountabilty needs to take priority.  I'm not sure how a non-profit system ever can compete with one based on profits when it comes to accountability.  There has to be a desire to achieve other then telling people you work in medicine. 

My solution to the healthcare problems and costs are to let the free markets to what they do best.  Dictate price & quality.  Allow companies to compete for business like they do in other sectors of the economy & that in essence will drive costs down.

Also Re: the posts about quality of care and costs.  There is some useful information in the links.  And yes, our system is very expense compared to others.  But our system has 300+ million participants.  How could we ever compete with a country like New Zealand that only has a population of 4.4 million?  It is a simple numbers game.  More people means more problems and higher costs.  Our diet and exercise is certanily not helping the cause.

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AO said:"One of the unstated

AO said:

"One of the unstated goals of Obamacare is to drive private healthcare practitioners out of business.  They will almost all eventually be driven into being corporate slaves for large healthcare corporation/insurance conglomerates and bureaucraticlackeys for the government.  It's coming."

http://www.washingtontimes.com/news/2012/jul/23/doctors-are-leaving-thei...

I did a search and found numerous articles citing the electronic record (which can be very expensive and time consumng) as a key feature, along with drop in reimbursements.  When I went on my own full time,  some insurance reimbursements dropped thirty percent (yes 30).  The corporate practices and hospitals get higher fee scales than private practitioners. That is a big drop.which one can made up for by increasing hours but there is a limit to that equation.  In mental health the corporate group practices don't really want too many therapists and psychiatrists from what I have seen.  I am seeing almost every friend who practices medicine extricating themselves in some way (going into administration, taking sabbatical to work in free clinics with fewer regulations, going part time) if they can possibly afford it. People think it is just about the money for physicians and while it can be, autonomy, pride in the work and a real sense of purpose and desire to help others is still there. Corporatisms kill that and no doubt that hurts quality of care too.

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Realist not Marxist

I try to be careful not to put labels on people. Marx even said before he died "I am not a Marxist." lol Although Libertarian, Independent, Democrat, Republican, Green, Marxist, etc. all have valid and beneficial viewpoints, in my opinion none of them are comprehensive. I think if we are going to move into a new era that recognizes limits, then we have to transcend these view points and acknowledge what they have to offer as well as take away. I think people around the world are beginning to recognizing this. I also see the word "sheeple" posted often. I think this is a mistake. I believe most people understand the predicament of our global limits (getting back to Gregor and Chris), they  are not in denial, but just don't necessarily know how to react, or they feel trapped in the limits of their own situations. I constantly remind myself of Ellul's (the guy who coined "think globablly, act locally") quote regarding propaganda...(I'm paraphrasing) "those who think they are too smart to be propagandized, are in fact, the most propagandized."

Ao, I would like to hear your views on healthcare. I see the inherent problems of both private and public options. One of the many inherent fundamental flaws I see in the private system (our current system) is that the consumer/patient (i.e. the individual that is supposed to be driving demand) is automatically put at a disadvantage by being sick while trying to make a decision on appropriate care. Obviously I'm generalizing for the sake of being brief, but when someone is feeling sick, the immediate response is "I need to relieve the pain/defect/sickness." This puts a time and emotional limit on their ability to shop for the best care at the lowest price. This is one of the fundamental reasons why a "free market" design can't be applied to healthcare. Twenty years ago when I was studying healthcare economics, the statistic was that 80% of people who were experiencing acute symptoms did not seek a second opinion, let alone a third or fourth. It's not surprising the insurance companies would capitalize on this flaw to their benefit. I think this is what Durango was implying by profit incentive. The biggest profits comes in the areas of insurance and, as you point out, pharmaceuticals right now. To give another example is how the pharmaceuticals are also gaming the system, often to the detriment of the patient. I'm sure you are all too aware of the most recent studies on the 2nd generation neuroleptics and the marketing of the narrative of the "chemical imbalance." It's sad and often immoral what we are doing to our teenager's brains.

I would like to hear your view since you are in the trenches.

Thank You

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VeganD

I put our family on a budget of 36K and we've kept it. This was to prove I could quit private practice and assume the "agrarian" lifestyle we subsidised with an off farm Optometric practice. So far were doing well. There is notta lotta running kids around.

robie,husband,father,farmer,optometrist

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inside look at "health" care

VeganD wrote:

I did a search and found numerous articles citing the electronic record (which can be very expensive and time consumng) as a key feature, along with drop in reimbursements.  When I went on my own full time,  some insurance reimbursements dropped thirty percent (yes 30).  The corporate practices and hospitals get higher fee scales than private practitioners. That is a big drop.which one can made up for by increasing hours but there is a limit to that equation.  In mental health the corporate group practices don't really want too many therapists and psychiatrists from what I have seen.  I am seeing almost every friend who practices medicine extricating themselves in some way (going into administration, taking sabbatical to work in free clinics with fewer regulations, going part time) if they can possibly afford it. People think it is just about the money for physicians and while it can be, autonomy, pride in the work and a real sense of purpose and desire to help others is still there. Corporatisms kill that and no doubt that hurts quality of care too.

You are exactly right.

The electronic medical records that you cited are just one reason.  There is obviously both a good side and a bad side to EMRs.  HIPAA regulations, which we are told (i.e. the surface agenda) are designed for the purpose of privacy and portability of your records, do serve those purposes .... to some extent.  But your records were actually more private when they were just in your health care practitioner's office.  Now that they are routinely passed over the Internet, anyone can intercept them.  If hackers can hack into the Pentagon, they can certainly illegally access your records. 

But worse than the hackers is the government having access to all your records (i.e. the hidden agenda).  ALL this information is being gathered and stored, permanently, and can be used against you just as easily as it can be used for you.

http://www.groundzeromedia.org/flavor-of-the-weak/

When we get into mandatory DNA testing (which will be coming, for your health and safety, of course <sarcasm>) as well as mandatory chipping (which will be coming, first on a voluntary basis, of course), the situation will become much more serious, in fact, downright ominous.  This information will be used in rationing care, making decisions as to whether end of life planning should be initiated and all care (except palliative care) terminated, applying insurance surcharges for higher risk individuals (for those that carry the genetic markers for diabetes, for example), explaining why you don't qualify for anything from gun ownership to a driver's license to a loan because of your lack of mental or physical health (but actually to surreptitiously coerce, threaten, or apply opunishment to you), etc.

Medicine has adopted the evidence-based orientation, big time, hook, line, and sinker.  On the surface, it all sounds very logical, rational, and reasonable.  One should have evidence for what one does.  There should be scientific research to justify treatments protocols and therapies and there should be algorithms that guide assessment and treatment.  However, one of the dark sides to this orientation is that for treatment to be evidence based, it generally must be something that is already being done.  And often, the so-called hard scientific evidence is skewed by the opinions, beliefs, prejudices, and jealousies of the health care researcher and/or practitioner (climate change controversy, anyone?).  So if someone develops a new, more advanced method of treatment that goes against the prevailing paradigm, such treatment is labelled "experimental", will not be reimbursed, and is often vilified and denigrated by the less talented and unenlightened establishment .  In many ways, innovation is being stifled, not promoted ... UNLESS, and this is a big unless, it adds to the power, wealth, and control of the establishment.  If it gives control and health independence back to the masses at no or low cost, it will likely be ignored, squelched. or vigorously opposed.

The government is imposing more and more bureaucratic burdens upon health care practitioners in terms of required documentation and testing which require more and more time of the practtioner and take more time away from them treating patients.  And to add insult to injury, the practitioners are having their reimbursement cut, often drastically.  When your doctor asks you (in person or on a form), do you have a gun in your house, he's not asking because he's particularly interested in receiving an answer which will help him treat you better.  He's asking because the government is mandating that he ask.  It's simply cross confirmation of gun ownership which can be access by the government through your medical records. 

We had a recent proposal from Medicare to have a 17 page uptake form.  Truly, if one took the time to fill this all out, there'd be virtually no time left for treatment.  If this form was all about your medical history, present medical problems, signs and symptoms, etc., the requirement for this documentation would be more acceptable (although 17 pages is still overly long and unnnecessary).  But there were proposed questions about your ethnic, cultural, religious, social, psychological, sexual, etc., history, for example, that often have little to do with your present problem (versus other more specific and content rich information) and often, quite frankly, are none of the healthcare practitioner's business. 

We have co-payments now that are up to 50%!  That's not insurance,  That's a fraudulent misrepresentation of something else that has been passed off to employers and/or the patient as insurance.  The only ones who are benefitting from this situation are the powerful insurors and the politicians they have in their pockets. 

If you think all these changes in healthcare are about cutting costs, think again.  I can recall an incident where a hospital employed healthcare practitioner coerced a former patient of mine to use hospital services rather than mine because the practitioner was financially aligned with the hospital (a relationship which, by the way, he had not revealed to the patient).  The hospital's charges were THREE TIMES my charges.  And the result was unsatisfactory.  The patient wound up sueing the practitioner and the hospital, successfully I may add and rightfully so I may add.  He ultimately came to see me and we resolved his problem in a relatively short period of time at a fraction of the expense he incurred at the hospital.  It's all about power, control, and money.

In my own case, we have new G-codes that we have to document, quantitative functional testing that we have to do, and assignment of disability rankings (which, often, are impossible to do in an accurate, objective, fair, and truthful manner).  To learn how to do this requires money for webinars, courses, publications, etc. to say nothing of time lost ... a lot of time lost.  And for this, if the present law doesn't change, we will get a 33% pay cut as of April 1.  Quite frankly, it will drive a fair percentage of practices in my specialty out of business.  I love what I do and I am one of the best at what I do but, quite frankly, all this nonsense is driving me towards an early retirement from my chosen field.   

Healthcare and insurance is but another tool by which you will be controlled more and more, tighter and tigher.  And because of a multitude of changes in the world, it will be harder and harder for you to stay healthy and resist the tide of this change ... which is exactly what TPTB want.

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gillbilly wrote: Ao, I would

gillbilly wrote:

Ao, I would like to hear your views on healthcare. I see the inherent problems of both private and public options. One of the many inherent fundamental flaws I see in the private system (our current system) is that the consumer/patient (i.e. the individual that is supposed to be driving demand) is automatically put at a disadvantage by being sick while trying to make a decision on appropriate care. Obviously I'm generalizing for the sake of being brief, but when someone is feeling sick, the immediate response is "I need to relieve the pain/defect/sickness." This puts a time and emotional limit on their ability to shop for the best care at the lowest price. This is one of the fundamental reasons why a "free market" design can't be applied to healthcare. Twenty years ago when I was studying healthcare economics, the statistic was that 80% of people who were experiencing acute symptoms did not seek a second opinion, let alone a third or fourth. It's not surprising the insurance companies would capitalize on this flaw to their benefit. I think this is what Durango was implying by profit incentive. The biggest profits comes in the areas of insurance and, as you point out, pharmaceuticals right now. To give another example is how the pharmaceuticals are also gaming the system, often to the detriment of the patient. I'm sure you are all too aware of the most recent studies on the 2nd generation neuroleptics and the marketing of the narrative of the "chemical imbalance." It's sad and often immoral what we are doing to our teenager's brains.

I would like to hear your view since you are in the trenches.

Thank You

Gillbilly,

I didn't see your post before I posted (or at least, attempted to post) an affirmation of VeganD's comment that would also, in part, respond to your request.  Like a number of other recent posts, it has been censored and is awaiting a verdict.  Quite frankly, I'm dismayed by the lack of communication from the moderators with me on this issue and I'm ready to move off this site like so many other fine posters of the past have done.   

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inside look at "health" care

You are exactly right.

The electronic medical records that you cited are just one reason.  There is obviously both a good side and a bad side to EMRs.  HIPAA regulations, which we are told (i.e. the surface agenda) are designed for the purpose of privacy and portability of your records, do serve those purposes .... to some extent.  But your records were actually more private when they were just in your health care practitioner's office.  Now that they are passed over the Internet, anyone can intercept them.  If hackers can hack into the Pentagon, surely they can illegally access your records. 

But worse than the hackers is the government having access to all your records (i.e. the hidden agenda).  ALL this information is being gathered and stored, permanently, and can be used against you just as easily as it can be used for you.

http://www.groundzeromedia.org/flavor-of-the-weak/

When we get into mandatory DNA testing (which will be coming, for your health and safety, of course <sarcasm>) as well as mandatory chipping (which will be coming, first on a voluntary basis, of course), the situation will become much more serious, even ominous.  This information will be used in rationing care, making decisions as to whether end of life planning should be initiated and all care (except palliative care) terminated, applying insurance surcharges for higher risk individuals (for those that carry the genetic markers for diabetes, for example), explaining why you don't qualify for anything from gun ownership to a driver's license to a loan because of your lack of mental or physical health (but actually to surreptitiously coerce, threaten, or apply opunishment), etc.

Medicine has adopted the evidence-based orientation, big time, hook, line, and sinker.  On the surface, it all sounds very logical, rational, and reasonable.  One should have evidence for what one does.  There should be scientific research to justify treatments protocols and therapies and there should be algorithms that guide assessment and treatment.  However, one of the dark sides to this orientation is that for treatment to be evidence based, it generally must be something that is already being done.  And often, the so-called hard scientific evidence is skewed by the opinions, beliefs, prejudices, and jealousies of the health care researcher and/or practitioner (climate change controversy, anyone?).  So if someone develops a new, more advanced method of treatment that goes against the prevailing paradigm, such treatment is labelled "experimental", will not be reimbursed, and is often vilified and denigrated by the less talented and unenlightened establishment .  In many ways, innovation is being stifled, not promoted ... UNLESS, and this is a big unless, it adds to the power, wealth, and control of the establishment.  If it gives control and health independence back to the masses at no or low cost, it will likely be ignored, squelched. or vigorously opposed.

The government is imposing more and more bureaucratic burdens upon health care practitioners in terms of required documentation and testing which require more and more time of the practtioner and take more time away from them treating patients.  And to add insult to injury, the practitioners are having their reimbursement cut, often drastically.  When your doctor asks you (in person or on a form), do you have a gun in your house, he's not asking because he's particularly interested in receiving an answer which will help him treat you better.  He's asking because the government is mandating that he ask.  It's simply cross confirmation of gun ownership which can be access by the government through your medical records. 

We had a recent proposal from Medicare to have a 17 page uptake form.  Truly, if one took the time to fill this all out, there'd be virtually no time left for treatment.  If this form was all about your medical history, present medical problems, signs and symptoms, etc., the requirement for this documentation would be more acceptable (although 17 pages is still overly long and unnnecessary).  But there are questions about your ethnic, cultural, religious, social, psychological, sexual, etc., history, for example, that often have little to do with your present problem (versus other more specific and content rich information) and often, quite frankly, are none of the healthcare practitioner's business. 

We have co-payments now that are up to 50%!  That's not insurance,  That's a fraudulent misrepresentation of something else that has been passed off to employers and/or the patient as insurance.  The only ones who are benefitting from this situation are the powerful insurors and the politicians they have in their pockets. 

If you think all these changes in healthcare are about cutting costs, think again.  I can recall an incident where a hospital employed healthcare practitioner coerced a former patient of mine to use hospital services rather than mine because the practitioner was financially aligned with the hospital (a relationship which, by the way, he had not revealed to the patient).  The hospital's charges were THREE TIMES my charges.  And the result was unsatisfactory.  The patient wound up sueing the practitioner and the hospital, successfully I may add and rightfully so I may add.  He ultimately came to see me and we resolved his problem in a relatively short period of time at a fraction of the expense he incurred at the hospital.  It's all about power, control, and money.

In my own case, we have new G-codes that we have to document, quantitative functional testing that we have to do, and assignment of disability rankings (which, often, are impossible to do in an accurate, objective, fair, and truthful manner).  And for this, if the present law doesn't change, we will get a 33% pay cut as of April 1.  Quite frankly, it will drive a fair percentage of practices in my specialty out of business.  I love what I do and I am one of the best at what I do but, quite frankly, all this nonsense is driving me towards an early retirement from my chosen field.   

Healthcare and insurance is but another tool by which you will be controlled more and more, tighter and tigher.  And because of a multitude of changes in the world, it will be harder and harder for you to stay healthy and resist the tide of this change ... which is exactly what they want.

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what gives

Blocked the first time, came through the second.  Will one of the mods please contact me and discuss the situation.  Thanks.

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Community Supported Medicine

ao,

Thanks for describing some of your frustrations. It is happening everywhere. You shouldn't feel special.

I'm wondering if there is any movement in the medical community to have a system similar to CSA (community supported agriculture) where you buy shares and receive periodic boxes of food. Since health care is used on an "as needed" basis, I don't know how this would work. Do you have any thoughts on this? Would this be a way to subvert the centralizing government requirements? Can this model survive/thrive after a global collapse?

Grover

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Theoretical vs Actual

....has taken on new meaning.  Reality seems to be becoming more Orwellian week by week, month by month.  It's hard to tell what is real and what is not.  Reality based political discussions are hard to even have these days, if even possible, missinformation and propaganda are so thick that it is hard to tell which end is up any more.  At this point the old political terms have become completely meaningless.  When it becomes difficult to get agreement on the underlying basis of reality, how can the discussion move forward from there?  It seems that decades of concentrated energy sources have created concentrated wealth, power and corruption beyond most of our imaginations.

That is why I have come down on the need to rescale our lives.  I seriously doubt that if I were involved with any of the posters on this site on a personal level that I would have any issues with their trustworthyness, honesty, sense of fair play, or determination to do the right thing regardless of their political sentiments expressed.  Be they marxist, libertarian, capitalist, socialist, what have you.  What is critical is that we continue to build community and commit to one another to work this thing through.  The innumeralbe options that we have today make it all to easy to take and ball and go home, but I would advocate resisting that temptation.

This is not to say that we shouldn't challenge ideas that we disagree with, but think about what are the real implications of that disagreement and do they really make a difference in our daily lives.  There is a certian intensity that things can take on when fear predominates because of the tenuous state the world is in, but the truth will out and we will have the pleasure of dealing with the consequences of those actions, comments on a web blog will not change that.  We will all be suffering from the errors of previous generations and our neighbors, but it is important to remember that they will suffer from ours.

Just read an article about persistant herbicides picloram and clopyralid.  So now getting manure from a friend could be a problem because they could be supplementing animal feeding from commercial sources.  It seems that everything is now needs to be rescaled so that we can return to our own sense of basic human values, a look in the eye, shake of a hand and what we can touch with our own two hands.  Those basic values transcend political persuasions  and are the foundations upon which we need to build our new communities.  They are a salve against corrosive politics and corruption that dominate our modern national life.

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ao and all

Thanks for taking the time to share ao, I found it very insightful.  Since a huge part of living in a peak prosperity environment would be good health it would be of benefit to get more information on the health care system.  For instance, I have heard that our health care will experience some negative consequence from Obamacare but don't have information on how. Have also heard that our costs are going up?  Part of the 3 E's is economy and medical costs are a big part of most peoples budget.  Would like to get more info, any suggestions for educational websites or perhaps more insight ao?  Some of what you reference is quite scary, think I need to learn more about this topic as well.

Thoughts?

AK Granny

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other healthcare models

Grover wrote:

I'm wondering if there is any movement in the medical community to have a system similar to CSA (community supported agriculture) where you buy shares and receive periodic boxes of food. Since health care is used on an "as needed" basis, I don't know how this would work. Do you have any thoughts on this? Would this be a way to subvert the centralizing government requirements? Can this model survive/thrive after a global collapse?

Grover

Thanks Grover.  I've considered the concept you mentioned and may possibly do something along those lines in the future.  Some are already doing it, with mixed results.  There are pros and cons. 

http://en.wikipedia.org/wiki/Concierge_medicine

Considering the recent flu epidemic, one of the cons is that for family practitioners and internists, they can easily get overwhelmed.  How do they serve all their patients and keep them happy and healthy without becoming extremely overworked themselves, having their immune systems depressed as a consequence, coming down with the same illness, and then failing to help ANY of their patients? 

Another big problem is the system over-utilizers, the ones who run to the doctor for any little problem (actual, exaggerated, or imagined) who are more fear driven than average and less self reliant than average.  Individuals of this psychology and physiology are ones that contribute to the escalation of healthcare costs for all the rest of us.  Then there is the opposite end of the spectrum, the under-utilizers, usually male.  They wait until they are so sick or so disabled that the problem is much more serious, more difficult to treat, more expensive to treat, and sometimes irreversible, and then that winds up costing us all a lot more. 

Then there is the question of computing costs and the potential for cost overruns.  Certainly, actuarial studies would be needed that would compute risk based on psychological and physiological profiles with the patient being charged accordingly.  Generating that information is obviously much easier said than done.

What we need is a whole new system ... one that starts with education from an early age in health self awareness, self maintenance, and self treatment.  This concept may not go over well though with some patients who are not of that personality type nor with some healthcare practitioners who are the type to encourage patient dependence more than independence and reliance more than self-knowledge and competence in self care.  What is ultimately needed is a system that encourages, motivates, and rewards personal responsibility on the part of the patient.

A system that has to spend inordinate amounts of money for an individual who overeats, smokes, drinks, indulges in high risk activities, etc. without that person experiencing the direct financial consequences of their actions will never work well over the long term.  For example, if someone slips on ice on their front porch, falls and injures themselves, I don't think many of us would have a problem helping them out financially.  But when someone knowingly participates in an activity like extreme skiing and gets dinged up, is it fair for the rest of the population to have to carry them financially?  Even more so with activities such as smoking.  I don't have all the answers but like in so many other areas, early and comprehensive education is a very good start.  Totalitarian societies indoctrine children so as to have more influence and control over them as adults.  Why not start with positive "brainwashing" (i.e. education) to make unhealthy living unpopular, uncool, and unsexy.  Marketing, advertising, and propaganda work in other areas.  Why not apply it to the common good?   

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Cancer and its cure.

Speaking of alternative medicine here is something you can try at home if you get cancer.

(this is going to make big pharma unhappy)

http://vimeo.com/channels/418298/54542349

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AkGrannyWGrit wrote: Thanks

AkGrannyWGrit wrote:

Thanks for taking the time to share ao, I found it very insightful.  Since a huge part of living in a peak prosperity environment would be good health it would be of benefit to get more information on the health care system.  For instance, I have heard that our health care will experience some negative consequence from Obamacare but don't have information on how. Have also heard that our costs are going up?  Part of the 3 E's is economy and medical costs are a big part of most peoples budget.  Would like to get more info, any suggestions for educational websites or perhaps more insight ao?  Some of what you reference is quite scary, think I need to learn more about this topic as well.

Thoughts?

AK Granny

Granny,

Obamacare will have negative consequences and costs will go up.  Remember the saying, "Be careful what you wish for" because it will come to fruition with Obamacare for many.  Information sources are so diverse and piecemeal on this subject that, offhand, I don't have any good recommendations for you.  From what I gather, Obamacare is 2,000 pages long and Medicare law is 50,000 pages long.  Good luck keeping up on that.  I know I can't.  In the healthcare professions, we're just scrambling from one CMS transmittal to another, trying to keep our heads above water as new bureaucratic policies are instituted, rethought, revised, and reinstituted ... again and again.  The point is to keep everyone off balance ... and it's working.  Some of what I reference is not yet fact but my expectation of where we are going, given past and present trends, if that is any consolation to you.

The best thing to do is to learn as much as possible about taking care of yourself starting with nutrition, nutriceuticals and herbals, exercise, meditation, stress reduction, and overall psychological/spiritual health.  You going to want to become as independent of the system as possible and build your immune system health as much as possible. 

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couldn't agree more

Ao,

Very true, I think your advice now applies to all aspects of our lives now

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boosting the immune system

AkGrannyWGrit wrote:

Thanks for taking the time to share ao, I found it very insightful.  Since a huge part of living in a peak prosperity environment would be good health it would be of benefit to get more information on the health care system.  For instance, I have heard that our health care will experience some negative consequence from Obamacare but don't have information on how. Have also heard that our costs are going up?  Part of the 3 E's is economy and medical costs are a big part of most peoples budget.  Would like to get more info, any suggestions for educational websites or perhaps more insight ao?  Some of what you reference is quite scary, think I need to learn more about this topic as well.

Thoughts?

AK Granny

Granny,

I wanted to give you and others something a little more actionable.  Here's a book by Joel Fuhrman called Super Immunity.  Do the Look Inside on Amazon and scroll down to page 6 to give you just one peak at what you can do for your health.

http://www.amazon.com/Super-Immunity-Essential-Nutrition-Boosting/dp/0062080636/ref=sr_1_1?s=books&ie=UTF8&qid=1359294752&sr=1-1&keywords=super+immunity+joel+fuhrman#_

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Thanks ao

The book looks really interesting, am going to get a couple of them and share with the kids. I appreciate your feedback and sound advice. It appears that the magic really is exercise and a healthy diet. Always open to sage advice should you think of anything else:)

Arthur, enjoyed the video you posted, it makes perfect sense but there is no profit in curing cancer.

Thanks for sharing.

AK Granny

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I contend that the medical field inspite of all...

...the rhetoric going on here has still in spite of ourselves been very successful in prolonging life even with immune systems so depressed you would have thought we all would have died already. Fear and stress is what makes you sick and that is that. IMHO

Moderation in everything is still the best plan.

Twinkies were introduced in the 1930's and yet we live 18 years and rising longer than when Twinkies were invented. Fast foods and preservatives are common fair still today and for the last 50 years.

I think in 1930 that we walked more, rode bikes more, did physical labor as the norm and generally lived better and more nutritious lives. I don't believe we had chemical preservatives or even had the environmental issues we face today. So, just look at these simple facts, and tell me how the hell we went wrong and are such a foolish race?

What it will come down to is what do we want to pay for? I believe Obamacare is here to stay so we raise the Social Security age to 72 for half benefits and 78 for full benefits then. What's the big deal.

Antibiotics are the true measure of our success not immune system strengthening (although I will never argue that a balanced diet, exercise and quiet are good things). Anti rejection drugs for implants are the sure miracle as a life saving drug.

The simple 81mg aspirin is the best medicine anyone over the age of 40 can take each and every day.

Now, if we are talking financial problems as a country then the fact that we live beyond the age of 65 is what ales us all today, and that we should have had a scalable Social Security plan through the years because it was never suppose to pay off in the first place. That and the fact we let abled bodied Men and Women live off the working classes labor without doing something for those supporting their transition to employment. Put these Folks to work cutting grass, helping at community parks and taking basic English and math classes. Do something with them so that they get off the lamb as soon as possible. Any flipping burger job should be filled by anyone receiving welfare. That simple. Hey, I love these Folks, and I love them enough to care that they contribute and feel good about themselves as Men and Women.

Really, these Folks are doubling and tripling up in some paces, and are living a helluva lot larger lives than some here even know. Plus they hit all the "clubs" for free food and clothing. People really do donate cloths that are way nicer than what these Folks have ever warn so why not raid the nearest Salvation Army! Turkey, Ham and day old bread! That's some good grub Folks. Hey, a little secret, some lower middle class Folks live pretty good out there. Trust me, been there done that  back in the 70's and the way I was raised got me out of that system. I will say though it is easier to game that system and live large should that be where I have to go again. 

http://www.infoplease.com/ipa/A0005148.html

No comments necessary.

Peace

BOB

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Prolonging life

Prolonging life is fine as long as there is quality to it.  I don't want or need to live a hundred plus years.  Eighty-six to ninety seems to be a good life span.  Beyond that the body just starts to break down.  Yes, I know some will argue that bio-technology may well allow us to live well beyond that 86 to 90 year lifespan, but so what if it does if my friends and loved ones have pre-deceased me?  It's a sad, lonely existence, to be old, alone, dependent and waiting, warehoused in some senior living facility.  

When I can't grow my own food, enjoy the simple pleasures of daily life or take care of my own personal needs I would choose to exercise my right to self-determination and exit stage left.  It's certainly a discussion I've had with the love of my life as well as colleagues as we have shared our fears about what is to come for those who are younger and by that I mean less than age 60.

As the healthcare industry starts to implode on itself we may well see the lifespan of the younger generations shrink again.  Most notably among those who just simply can not afford to pay for it or by virtue of the lack of access to trained professionals as those in the baby boomer generation retire.  There are simply not enough people entering the medical professions to replace those that will retire let alone deal with the cohort that will be demanding access to care that they have paid into for the past 40 years of their working lives.  

Antibiotics are a wonderful tool when used appropriately.  Unfortunately, their use has been abused in the commodity meat industry as well as in healthcare.  To that end we now have a growing list of antibiotic resistant bacteria, MRSA (Methicillin-resistant Staphylocccous aureus), E.coli, Salmonella, and Campylobacter, not to mention Tuberculosis.

I'm officially stepping off my soap box for now.

Lynne

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Lynne, I'm with you. For me

Lynne, I'm with you. For me our truly better days are getting some years past our prime now, and life without my Lady or friends and family isn't as interesting to me without them so what is the point. It takes twice the effort now to accomplish what was easily done not 5 years ago. Living life is still supreme and I do just as much but more time on each task is now necessary.I am relatively young but then we all see ourselves as 30 something, and the reality is we are now the Grandpa's and Grandma's. You know, those people, the ones who require the boy scouts to help them across the street so they can earn their badges. LOL Where has time gone? I could walk literally all day, from sun up to sun down any golf course in Michigan or anywhere for that matter, day after day, and NOT get tired. Just come home, shower and head off to a family function and drink and dance all night long. I did this until about 50 years old, and then things started to happen and it took its toll. From here I will not elaborate but to say I still enjoy every minute of every day.

Sincerely

BOB

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Thanks Ao

This gives a good snapshot of what you have to deal with.  I'm sure you could write a book. In regard to administrative costs, I also remember back 20 yrs that the estimates of cost reductions from cutting out the insurance companies would be around 50%, mostly by standardizing forms (administrative). One thing I thought of that feeds into this conversation is systematic "lock-in." It's why as much as I like the idea of UHC (who wouldn't, it recognizes the value and potential of every human being), I'm not sure it would be possible in this country. Maybe 20-30 years ago before the healthcare field became completely corporatized. There are too many industries that rely on the healthcare system remaining what it is. The financial banking system is the same. So I agree, it comes down to money and power. Anyone who watched the "Untouchables" video received that message at the end when Breuer admitted he couldn't go after corporation X because it would have too much of an economic ripple effect. Our systems are so complex now, with structural corruption built in, that it appears we can't make any major changes to them without major collapses of other systems that are derivatives. Any computer program can tell you that system/network lock-in is real and holds major consequences well into the future.

Bob, I agree that the medical field has done a great job prolonging life, but there are those overwhelming costs that come up for instance when elderly parents have to be put into care facilities just to keep them alive. The costs can often wipe out the wealth of the parents as well as the wealth of their children. Can anyone say redistribution of wealth?

Thank You

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Gillbilly,

I have had in the last 6 years well over $300,000 dollars worth of surgeries. One to save my eye and a recent surgery for that too, and we'll see. I had neck surgery with the plates and screws. I had nasal reconstruction, and surgery for a herniated umbilicus. I spent 3 days in the hospital and everything else was same day, outpatient care and time for operating room expense. The system is broken for sure. The bills for this and that were outrageous and none of the care given was for life threatening surgery. My out of pocket expense wasn't noticed.

Getting old will be expensive and I just don't know how the system will ever pay for what is coming down the pike.

If just antibiotics were available, one 81mg aspirin taken every day by everyone 40 and over, and better care given to ones physical conditioning, and diet then life expectancy would probably still be in the 70's. I do not believe any one surgery has given me an extra day on this planet but it has given me quality of life.

I would not have done any surgery's if I didn't have the means to do so (my wife's hospital benefits plan took care of the bills). It should be this way are my quiet thoughts. The eye would have had to be removed and the eye tended to so I would have had to pay for that or society, and society wouldn't have issue with this I don't believe but the others were not life threatening and therefore should have been a payment I made, and not provided by all of you Folks.

I think the solutions are there but WE WERE PROMISED, we PAID FOR THE SERVICES, and the ones who have done all the promising are out of sight and hiding in their little dungeons in Washington. Working very hard themselves to bleed the system as hard as they can before they walk out of that place with wealth beyond their dreams and protected themselves by the laws they make. Take insider trading laws for instance... I'll stop there as it is enough of what is wrong in Washington.

Medical care should be ability to pay but the system has to be fare too, and it is not. We have paid into this care system all of our working lives and it has been squandered so now we fix it. Get it right and hopefully this is done in a way that doesn't blow the system to hell in the process because what's the point of that.

So many major issues confront us and when we stop one leak here another will spring up there and this party goes on for a bit longer, a lot longer than we think actually. If we ever do figure this beast out.

I really hate saying this but I want a Depression just so we move off of center and actually start doing something to fix things. We need a very rude awakening, and those responsible for this mess must be made to pay if you have to claw back for generations all that has been stolen. That isn't going to happen though. So death by a thousand cuts and Chinese water torture until the end then.

Respectfully

BOB

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