Daily Digest

Daily Digest - June 13

Sunday, June 13, 2010, 11:02 AM
  • Global Banking: The Bank for International Settlements
  • The BIS: The Bankers' Money-Launderer
  • Showdown Looms Over China's Currency at G-20
  • Uncertainty Restores Glitter to an Old Refuge, Gold
  • World Oil Consumption (Graph)
  • The Ahab Parallax: ‘Moby Dick’ and the Spill
  • Fledgling Biodiesel Industry Fights To Survive
  • Making Sense of the Financial Crisis in the Era of Peak Oil
  • In Gulf disaster, echoes and lessons of Alaska's Exxon Valdez spill 

Economy

Global Banking: The Bank for International Settlements (Claire H.)

Who controls global monetary affairs? The BIS! Based in Basle, Switzerland, the BIS is central bank to central banks. The BIS has greater immunity than a sovereign nation, is accountable to no one, runs global monetary affairs and is privately owned. This is a must-read report to understand the globalization process.

The BIS: The Bankers' Money-Launderer (Claire H.)

If the Mafia were ever to find a genie-in-a-bottle, and thus obtain the mandatory “three wishes”, there could be considerable debate over how it would choose to expend two of those wishes. However, it is an absolute certainty that one of the wishes would be used to invent a perfect “money-launderer” - an entity who could “launder” infinite amounts of their ill-gotten gains, with absolute secrecy and discretion.

Showdown Looms Over China's Currency at G-20 (Nickbert)

Escalating rhetoric from U.S. Treasury Secretary Timothy Geithner and senators such as Charles Schumer (D., N.Y.) Thursday was echoed Friday by Lorenzo Bini-Smaghi, a key member of the European Central Bank's policy-setting council, who blamed "the rigidity of the Chinese monetary regime" for slowing down the recovery in the developed world. The U.S. and Europe should jointly pressure China for reform, he urged.

Uncertainty Restores Glitter to an Old Refuge, Gold (joemanc)

Now, individual investors are following their example around the world. The United States Mint is running short of gold coins, and the South African mint increased Krugerrand production by 50 percent late last month, to its highest level in 25 years, on brisk European demand.

Energy

World Oil Consumption (Graph) (Davos)

Oil consumption from around the world- US: 18.6 million barrels per day; Asia Pacific: 25.9 million barrels per day.

The Ahab Parallax: ‘Moby Dick’ and the Spill (jdargis)

In the weeks since the rig explosion, parallels between that disaster and the proto-Modernist one imagined by Melville more than a century and a half ago have sometimes been striking — and painfully illuminating as the spill becomes a daily reminder of the limitations, even now, of man’s ability to harness nature for his needs.

Fledgling Biodiesel Industry Fights To Survive (joemanc)

It's an industrial-strength irony — used restaurant fryer oil is valuable enough for environmentalist early-adopters to steal it from outdoor tanks to power their cars, but the companies that collect it and process it can't charge enough to make a profit.

Only two Connecticut companies produce biodiesel fuel commercially. Biodiesel, which has long generated interest in alternative-energy circles, is made from vegetable oil rather than petroleum, and can be used anywhere regular diesel is used — in vehicles' diesel engines or in home heating oil tanks.

Making Sense of the Financial Crisis in the Era of Peak Oil (littlefeatfan)

A recording of Stoneleigh from The Automatic Earth, speaking at the Transition Network Conference on 12th June 2010.

Environment

In Gulf disaster, echoes and lessons of Alaska's Exxon Valdez spill (Nickbert)

Charles Wohlforth, now an author of books on the environment, was a reporter who covered the Exxon Valdez spill using a boat purchased for the story by the Anchorage Daily News. Wohlforth said the boat was an essential tool to get the story independently of Exxon's and the federal government's public relations apparatus, which tried to hide the extent of the damage. "It's been really disturbing to watch BP's behavior be so similar to what Exxon's was in terms of downplaying stuff and creating their own reality, saying there is no subsurface oil, trying to hide how much is leaking. All this stuff is amazingly similar to the Exxon Valdez playbook, and the government is playing right into it," Wohlforth said.

Please send article submissions to: [email protected]

28 Comments

idoctor's picture
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Re: Daily Digest - June 13

IMHO this is worth the complete watch.

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Re: Daily Digest - June 13

Thank you, idoctor,

The Hayek-book is very strongly recommended, in case someone here happens not yet to have read it.

There is condensed cartoon-version of the central premise available from http://mises.org/books/trts/ - in my view, it's a bit too condensed, but still a fun read.

-S

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Re: Daily Digest - June 13

That was a great episode.  Watched it that day and laughed that "The Road to Serfdom" was #1 on Amazon the next day.  I like the direction that Beck seems to be going.

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Re: Daily Digest - June 13

I like the direction that Beck seems to be going.

+1.....same here....I use to think he was too far out there LOL.

There is condensed cartoon-version of the central premise available from http://mises.org/books/trts/ -

Thank you simentt for the link!!

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Re: Daily Digest - June 13

idoctor,

The very book that Beck is talking of is ready to read online, here ...

The Road to Serfdom, by F.A. Hayek

[quote=]

Wikipedia Review

The Road to Serfdom is a book written by Friedrich von Hayek (recipient of the Nobel Memorial Prize in Economic Sciences in 1974) which transformed the landscape of political thought in the 20th century, shifting the terms of debate for millions of people across the political spectrum.The Road to Serfdom is among the most influential and popular expositions of classical liberalism and libertarianism.

The title refers to economic and political policies which the author believes to invariably lead to the socio-economic condition known as "serfdom."

More can be found here : -

Important films, books or internet pages we all should study

~ VF ~

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Re: Daily Digest - June 13

Regarding the gulf disaster and lessons of exxon valdez`s spill.

No surprise according to this: 

BP played central role in Exxon Valdez disaster

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Re: Daily Digest - June 13

Many individuals across the political spectrum agree that unfunded social programs, among other things, are looking like they're going drive economies around the world off a cliff.  What always amazes me is that conservatives like Glenn Beck and others don't see the liabilities inherent in the opposite extreme, unfettered "freedom", which is not always good when exercised by pirates and thieves, (eg Wall Street, etc).   Freedom is what we're looking at on the 24/7 videostream from the bottom of the Gulf, etc.   Some conservatives prefer to make up stories that are consistent with their view that all problems are caused by the government, instead of the much more complex reality that pits freedom against bad actors that have to be controlled by laws and police as has been true since civilization began.   When the bad actors and elite control the gov't and try to placate the masses with social programs while they rip off the system, where is the real problem?  IMHO, the gov't doesn't really represent ordinary Americans, and I agree with many conservative ideas, but would identify myself more as a progressive than conservative.   No black and white worldview holds the key.

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Maybe oil is actually a 'renewable resource'?...

 

In the 1950's, Soviet geologists published the abiogenic origin hypothesis, proposing that oil is formed from carbon-bearing fluids that originate deep within the earth that are pushed toward the mantle where it collects in porous pockets.  American Thomas Gold in the late 1990’s held that oil is “a primordial syrup continually manufactured by the Earth under ultra-hot conditions and tremendous pressures.  As this substance migrates toward the surface, it is attacked by bacteria, making it appear to have an organic origin dating back to the dinosaurs”.  He cited the discovery of thermophile bacteria found living in the extreme temperatures of hot springs and hydrothermal vents at the bottom of the ocean as evidence for the presence of biomarkers in petroleum. 

 

Gold attempted to find more proof for his theory by drilling in the Gulf of Mexico. Using 4-D time-lapsed images of one oil field, they noticed a deep fault in the bottom corner of the computer scan that was gushing hot oil into the field from a source further below.  Drilling into the fault, they first hit a pocked of natural gas so pressurized that “it scared us” (witnesses on the BP oil rig said they experienced abnormal pressures just before methane gas surged up the drill pipe, engulfed the platform, and exploded).   But Gold ran out of time and money before actually tapping into oil in one of these fissures.

 

That brings us to this editorial by a person professed to be an ‘ex’ Peak Oil believer: 

http://www.financialsense.com/editorials/engdahl/2010/0610.html

 

Not sure about your, but I could sleep better at night believing that Peak Oil is just another story cooked up by political and economic powers to justify higher prices for petroleum.  And based on recent revelations in the ‘evidence’ behind global warming/climate change, we’ve seen that the scientific community will readily adopt the elite globalist agenda and work quickly to ostracize opponents of accepted theories.

 

Could the BP oil spill be a good news/bad news scenario?... an environmental disaster that reveals that oil is actually a renewable resource?  Boy, I sure hope so!

 

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Re: Daily Digest - June 13

JDM2,

Certainly anyone with an open mind and an awareness of how much scientific knowledge taken for granted today was once considered way out there would have to, at the very least, leave the door open a crack to the idea of abiotic oil.

However, there is a huge difference between abiotic and renewable, and the ubiquitous linkage of the two is a logical curiosity. For example, why couldn't a finite amount of oil have been produced abiotically, just like, apparently, a finite amount has been produced biotically?

Furthermore, even if oil is produced abiotically and is renewable, it would need to be replenished at a significant enough rate to offset consumption rates.

So, for me, at this point, the abiotic theory falls cleanly into the hope category.

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The Party's Over ~ by Richard Heinberg ...

Hi Jdm2,

Click on this book cover. Both the book and the film you'll find are proving to be both thought provoking and grounding :-

My Best,

~ VF ~

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Re: Daily Digest - June 13

I, for one, did not like Glen's show about Hayek. It has a smell of propoganda. Hayek Is much deeper than Glen presented it. For example, he understood well that market economy is based on the observance of moral principles. Take away these principles, and the system will fall, which we experience right now. It does not mean that the socialism is good, only that having functioning market economy requires a bit (or rather much) more than just a small governemnt.

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Re: Daily Digest - June 13

As for abiotic oil, or the idea that we have enormous amounts of oil that are not biological in origin, I offer this chicken and egg proposition:

If oil where not abiotic, then where did the carbon come from for the species to develop?  It does seem that there are a lot of oil seeps deep in the ocean.  If you don't doubt that oil seeps are everywhere in the ocean, you can find oil washed up on shore in California near Pt Reyes, and the closest offshore field is in Santa Barbara, several hundred miles away.  It does seem that oil seeps attract animals and plants into them, witness La Brea.  I could see where old tar pits might fool a geologist into confusing the chicken for the egg.

Geologists have never traced seeps down to their origins and depths.  It does seem that many oil fields have new discovery when the same area is drilled, deeper, then deeper again.  This is what happened in the Kern fields.  The higher reservoirs depleted, deeper wells were dug and lo and behold more oil.

I for one could imagine that there are thousands of years of oil with reasonable conservation practices.

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Re: Daily Digest - June 13

IMO, Beck is not good for the movement.  He may be great for the R or Tea Party, but he's horrible for the needed changes to society.  And as has been stated, his show is PURE PROPAGANDA!  Because it's propaganda that some here agree with, doesn't make it any less of such.  And in my discussions, he's been a boon to tptb and their agenda.  Because of this.....His show makes me sick to watch or listen.

But, to each their own.  But for those that love him and his show please remember, he's on FOX.  Which is MSM at it's worst.  Because it's R leaning doesn't make it any better than MSNBC or CNN, they're all the same.  And there's NO WAY that if he were seen as a threat to tptb he's still be on the air.  It's as easy as that!

 

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Re: Daily Digest - June 13

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World Oil Consumption Graphic

Thanks for the link to this graphic, Davos.  Its a great snapshot of what's happening with oil consumption currently and what use has looked like historically.

One of the things I thought was most interesting that I hadn't realized before, was the big dip in oil consumption in the 1980's that coincided on the front end with the onset of the early 80's recession.   It looks like it took 9 full years (1980-1988) before world consumption was higher than the 1979 level, which I found surprising.  

I assume the situation will be different today regarding how long it is before the 2007 consumption peak is surpassed, because developing countries including China, India, Brazil and the middle east oil producers themselves are much larger oil consumers and ramping at a much higher rate than they were then.  But seeing that '80's period and then looking at the period after 2007 did make me wonder whether we may be surprised to find that we have more time than we would expect before the high impact/panic phase of peak oil, since the combination of recessionary growth slack and potential for marginal improvements in efficiency may keep global demand, oil prices and rapid negative economic feedback at a lower level for longer than we might think possible.   Tough to predict the future correctly, but the graphic does tell a story about the past - the world apparently had no net growth in consumption over 9 years and, as we know, the world kind of got by during that time.  Knowing we've just had a big recession and will likely at least have years of slow growth or worse ahead, a chart reader might be forgiven for imagining the possibility of a long dip on the right side of the graph after 2007 going forward as well as in the 1980's.  Just a thought.

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Re: Daily Digest - June 13
LogansRun wrote:

IMO, Beck is not good for the movement.  He may be great for the R or Tea Party, but he's horrible for the needed changes to society.  And as has been stated, his show is PURE PROPAGANDA!  Because it's propaganda that some here agree with, doesn't make it any less of such.  And in my discussions, he's been a boon to tptb and their agenda.  Because of this.....His show makes me sick to watch or listen.

But, to each their own.  But for those that love him and his show please remember, he's on FOX.  Which is MSM at it's worst.  Because it's R leaning doesn't make it any better than MSNBC or CNN, they're all the same.  And there's NO WAY that if he were seen as a threat to tptb he's still be on the air.  It's as easy as that!

 

+++++11111

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Re: Daily Digest - June 13

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

Quote:

Abiogenic petroleum origin is an alternative hypothesis to the prevailing theory of biological petroleum origin. Most popular in the Soviet Union between the 1950s and 1980s, the abiogenic hypothesis has little support among contemporary petroleum geologists, who argue that abiogenic petroleum does not exist in significant amounts on earth and that there is no indication that an application of the hypothesis is or has ever been of commercial value.[1]

The abiogenic hypothesis argues that petroleum was formed from deep carbon deposits, perhaps dating to the formation of the Earth. The presence of methane on Saturn's moon Titan is cited as evidence supporting the formation of hydrocarbons without biology. Supporters of the abiogenic hypothesis suggest that a great deal more petroleum exists on Earth than commonly thought, and that petroleum may originate from carbon-bearing fluids that migrate upward from the mantle.

Although the abiogenic hypothesis was accepted by some geologists in the former Soviet Union, most geologists now consider the biogenic formation of petroleum scientifically supported.[1] Although evidence exists for abiogenic formation of methane and hydrocarbon gases within the Earth,[2][3] studies indicate they are not produced in commercially significant quantities (i.e. a median abiogenic hydrocarbon content in extracted hydrocarbon gases of 0.02%).[4] The abiogenic origin of petroleum has also recently been reviewed in detail by Glasby, who raises a number of objections, including that there is no direct evidence to date of abiogenic petroleum (liquid crude oil and long-chain hydrocarbon compounds).[1] 

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Re: Daily Digest - June 13
kelvinator wrote:

When the bad actors and elite control the gov't and try to placate the masses with social programs while they rip off the system, where is the real problem?

That right there is the problem with government and the part that progressives seem to miss.  That all humans will look out for their own self interest and when you give someone power over others you end up where we are today.  The best bet is to minimize government and any government you have to keep it at the local level, that way any bad government you can at least have the oppportunity to flee to another area.  It used to be you could change states, now with most power at the federal level you have to flee countries, with a push to global, what you have to find a new planet?

So, while you may not like that greed drives everything, too bad, thats nature.  You probably can't change that fact so accept that the best we can hope for is to keep the effects minimized.  I guess what really drives me nuts about progressives or conservatives is that they insist their way is the right way and everyone else is just stupid and needs to be controlled.  I believe no one probably has the optimum answer and that it is always changing and would like to see as much diversity in govenrnment as possible.

And you are right, things are far more complex and there is far less causality in most things than we realize, so how come you can paint conservatives into such a nice neat little evil capitalistic, environment hating bunch?

kelvinator wrote:

What always amazes me is that conservatives like Glenn Beck and others don't see the liabilities inherent in the opposite extreme, unfettered "freedom", which is not always good when exercised by pirates and thieves, (eg Wall Street, etc).   Freedom is what we're looking at on the 24/7 videostream from the bottom of the Gulf, etc.

I'm also really curious how your can possibly view what we have seen recently as "un-fethered freedom".  What we have seen is when you have massive distortions in the free market thru regulation and the biggest distortion through our fiat money system in the dollar standard.  I think so many things have been maninpulated for so long it's impossible to know what the outcome would be without all the distortions.

Here is one interesting take on government involvement in the spill:  You Really Want the Government Drilling for Oil?

 

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Re: Daily Digest - June 13

 

Along the same vein, I think an important book to read is Naomi Wolf's "The End of America: Letter of Warning to a Young Patriot".

Below is article from a few years ago that describes the issue in a few paragraphs per point.

Fascist America, in 10 easy steps

http://www.guardian.co.uk/world/2007/apr/24/usa.comment

1. Invoke a terrifying internal and external enemy.
2. Create secret prisons where torture takes place.
3. Develop a thug caste or paramilitary force not answerable to citizens.
4. Set up an internal surveillance system.
5. Harass citizens' groups.
6. Engage in arbitrary detention and release.
7. Target key individuals.
8. Control the press.
9. Treat all political dissidents as traitors.
10. Suspend the rule of law.

The video of a speech she gave is long, but to me, was very interesting.

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Link to same video as above:

It's interesting that Naomi Wolf is considered to be more on the left and a feminist to boot (The Beauty Myth: How Images of Beauty Are Used Against Women), but she clearly recognizes the same dangers against civil liberties, sunshine on laws, and honest discourse that libertarians and other freedom lovers across the spectrum recognize.

Poet

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Fledgling Biodiesel Industry

I work for a maker of diesel common rail fuel injection systems and can tell you bio diesel is the kiss of death to modern high pressure injectors.   I've seen the field returns. Unfortunately bio diesel tends to quickly form deposits on all the components, which in short periods of time can cause the fine tolerance gaps to be filled/clogged and will cause the sliding surfaces to seize up and stop working.   Eventually you will have to replace the injectors, which might cost you around $300 per cylinder just for the injector.     Our injectors have clearances on moving parts between 2 and 4 micro meters.   It does not take much then to fill this gap and seize the injector valve or the nozzle needle.    The problem is noticed after the vehicle has been turned off for a while.   Some trucks are equipped with duel fuel systems so that before the truck is parked the system is flushed out with normal diesel fuel.  Many times this system is forgotten and the vehicle is left to sit with the bio diesel in the system. 

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Re: Daily Digest - June 13

Scott:

How about those old buses that are converted to run on bio-diesel? I know of a guy in Connecticut who has an old bus that runs exclusively on bio-diesel. Been running that way for at least 2 years now. Are old engines okay?

Poet

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U.S. Identifies Vast Riches of Minerals in Afghanistan

U.S. Identifies Vast Riches of Minerals in Afghanistan

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_intersti...

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Re: U.S. Identifies Vast Riches of Minerals in Afghanistan

Well hot dang!!

So now it's not only the oil pipeline and the opium but minerals to boot!

Maybe they could hide the opium inside some copper nuggets before they ship it out.

Nah the mainstream media already admitted the US military is aiding in the opium production so there's no need to hide that anymore.

I bet you Pat Tillman's folks wished they'd fessed up much earlier.

That would have saved him from being blown away to shut him up.

gregroberts wrote:

U.S. Identifies Vast Riches of Minerals in Afghanistan

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_intersti...

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Re: U.S. Identifies Vast Riches of Minerals in Afghanistan
gregroberts wrote:

U.S. Identifies Vast Riches of Minerals in Afghanistan

WASHINGTON — The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_intersti...

Well, if history repeats itself, then likely we're gonna see China's mining companies come in and cut deals like their oil companies did with Iraq's government. That's of course assuming that all the problems (corruption, bribery, warlords, fighting, tribal conflicts environmental issues) mentioned in the article are overcome.

Poet

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Re: Daily Digest - June 13

rhare-

At least we agree that it's complex - not a black and white situation.  There may be a lot we agree on.  I've worked in all kinds of environments - consulted for big corps, even consulted for the Federal Home Loan Bank a few decades ago before the S&L crisis, (wow - what a window into quasi gov't inefficiency and how private interests - the banks- influenced public policy), been a key exec in small but booming tech businesses and run my own company with and without employees for the better part of two decades and now have had my own investment business helping people  dodge the pitfalls of wall street for many years.   My personal experience is that it's just not useful to talk about having  complete faith in an imaginary free market, any more than having complete faith in government.   Even the libertarian Greenspan admitted that his lifelong view that markets are self regulating was proven wrong by the crash.  It seems it's just complicated and not easy to create a world that works.   And I don't actually mean to paint conservatives (or corporate types) as just evil at all - after all, I have my own corporation - as I said, I agree with a mix of conservative and progressive ideas - People and countries need to run balanced budgets and be as free as they can be without harming others.  People also need to organize to assure the rights and welfare of those who are not the financial and political elite - it seems to me that people are also motivated by concern about others in addition to greed and self-interest.   A structure that supports one with out the other won't work.  Anyway, all these are general thoughts.   Having been in business and free enterprise my whole adult life, I find the recent gospel that simplistically idealizes free enterprise as the solution and government as the problem to be completely inaccurate, just as the reverse would be.  It gives us a system in which companies like Lehman Brothers and other huge companies commit massive fraud for years, but their executives retire with millions and face few consequences for their crimes - mainstream media, controlled by big money, doesn't even cover the real story.  Instead, many people greatly damaged by real theft by real people blame only the government.   Starting with Reagan, then Clinton, and onward, people were sold a bill of goods by the rich that the government should not defend the interests of the people, that corporate enterprise alone would serve their best interests and the wealth of corporations would trickle down on them - and what a great shower it's been, eh?  Soon after, we get the S&L rip off - virtually an organized crime hit, if you read the details in Inside Job - I think one of the Bush senior's sons was in on the scam, then we get Bob Rubin, Larry Summers, Greenspan with Clinton and the rest with their deregulating set up for rip offs around the Dot Bomb and then the Housing Scam and Credit Crisis.   Grease the skids for the elite and massively market the idea that the gov't should take the rap, making it impossible for people to collaborate to defend their interests via a government of, by and for the people...brilliant.  oh well, sorry to go on.  Anyway, I agree it's complicated and hard to work out, and maybe we should just leave it at that.

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Bio Diesel

That old bus probably has an old inline pump, operating at a lot lower pressure and as such does not have the tight tolerances of a common rail system.    I do not have direct experience with the older products but I believe they are much robuster to bio fuels.   Of course the seals in the pump must be laid out for those fuels as well.   Bio compatible radial pumps had different seal sets for them.   The inline pump probably has a maximum of 1200-1400 psi and the common rail now have greater than 28000 psi.   Our newest truck system has 32,340 psi injection pressure.  The tighter clearances are needed to keep the pressure from bleeding away over the gaps in the moving parts.   The bigger the gap the more losses the system has. 

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Re: Daily Digest - June 13

Kelviniator,

Sorry, been getting away from all this for a few days - helps the sanity.  Anyway,  I don't disagree with any of your observations that many of these companies like Lehman, etc have commited fraud, theft, etc.  But I still think you are missing the reason these were able to do so at all.  1) Fiat money being lent at low low rates to the favored and 2) Government interferrence in the markets through regulations that favors those well connected.  It's not that I have a giant faith in the free market, it's that I have an overwhelming faith that anything government becomes involved with will be screwed up and we have lots of examples.  I also don't believe that it was the deregulating (really should read added regulation that favors the big guys and squeezes out competition), but rather the lax monetary policy of the Fed that was the primary fuel for most of the booms/busts we have seen.  With a sound currency you simply could never have had these shinanigans since money would have been more valuable.  In addition, I don't want my right trampled on in the name of protecting me.  I would prefer freedom in the wild over the safety of prison.

 

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