Time for More Q&A

Adam Taggart
By Adam Taggart on Mon, Feb 24, 2014 - 2:45pm

In our recent survey, many of you have asked for Chris and me to increase the frequency of our reader Q&A podcasts.

Easily done :)

Please use the Comments section below to submit the question(s) you'd like us to address most. We'll tackle them in one of our next upcoming podcasts.

cheers,
Adam

17 Comments

kevinoman0221's picture
kevinoman0221
Status: Silver Member (Offline)
Joined: Sep 25 2008
Posts: 144
A magic genie makes Chris

A magic genie makes Chris "Supreme Dictator of the World" - What are the biggest 2-3 things you'd have society start doing, and the biggest 2-3 you'd have society stop doing? Beyond "having an honest discussion" - more tangible actions?

Phaedrus the younger's picture
Phaedrus the younger
Status: Bronze Member (Offline)
Joined: Aug 21 2013
Posts: 68
How did you start your local resiliency group?

Chris,  in your essay on the Post Carbon Institute, you talked about the local group you are a part of that share a view of local and personal resiliency.   How did you find the members of your group and how did you start the conversation when you first approached them?

aggrivated's picture
aggrivated
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 542
I second Question # 2

I am in an urban area with a strong neighborhood association (a voluntary one with $15/yr fees, not a HOA).  About 50% of the 1 square mile historic neighborhood participates in the association. There is a newsletter by email to keep neighbors up on activities, crime reports, adverse or favorable plans for the ares, meetings, etc.  There are also area representatives.  All of the members I know that participate, are primarily interested in keeping things safe, keeping up property values, and using the association as a way to gain clout with the city government for various causes that arise in the area. Do you see such an organization as a vehicle for building a core community building resiliency?  If so, how would you suggest approaching things to avoid raising the ire of those with other agendas in the group?

Oliveoilguy's picture
Oliveoilguy
Status: Platinum Member (Offline)
Joined: Jun 29 2012
Posts: 578
Allocation

How are you Adam and you Chris allocated percentage wise in the categories of Real Estate (Buildings and Land), Real Goods (tractors, cars, stored food, ammo) , Precious Metals, Cash, Equities, and Bonds. 

 

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Limits to Growth. (A Model)

What to do when all of society is in the grip of a psychosis?

What is blindly obvious to a balanced brain is profoundly mysterious to those with only one functioning hemisphere. They plead for an explanation- a comforting narrative.

I like to use this video as a diagnostic tool. It instantly reveals the crippled. The one-brained insist on trying to analyze that which is obvious.

.

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 654
Specific, concrete SUGGESTIONS

For many months now, I have been asking for our PPCommunity to assist neophytes, like me and others, to build up a SET OF TARGETS.  There have been very GENERAL categories proposed but hardly any SUGGESTIONS on specific stocks, bonds, energy and transportation or water companies.  Not that I want anyone to tell me exactly what to purchase, but at least some more specific guidance.  Rickards today states:

1) energy stocks, 2) transportation stocks, 3) land, 4) precious metals, and 5) fine art (for the wealthy, of course)

This is all good and generally agrees with what the PPwebsite has suggested. But there are thousands of companies out there--who has the time and effort to analyze many of them.  And can one even trust the subscribed-paid lists that are for sale--there always seems to be some vested interest??

As for me, the following, in miners, has SO FAR reaped a solid gain, always with trailing stops.

ABX, AG, EXK, GG, HMY, MUX, PAAS, SA, SSRI, while NEM has been VERY negative.

I'd like to get some good oil and transportation stocks.  Any SUGGESTIONS out there?

Oh, MGPHF, graphene possibilities, has been fairly successful. (Roger's recommendation)

I've got land in the Catskills and in Costa Rica: please pay a virtual visit: www.AwarenessCenters.com and I could be of assistance for anyone looking to diversify land-wise internationally.  Ken

 

ppetersen's picture
ppetersen
Status: Member (Offline)
Joined: Oct 17 2012
Posts: 1
Precious Metals Allocation

When you suggest having a certain percentage of your portfolio allocated to precious metals, are you referring to physical bullion exclusively? Or would that percentage include such things as precious metals based funds, ETF's, and mining stocks?

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 654
Keith Scharfer: Oil and Gas??

Has anyone here had experience with this analyst?  FYI

Our exciting list of OGIB presenters and the reasons why you need to hear their presentations and meet with management face-to-face are as follows:

  1. RDX TECHNOLOGIES – RDX-TSXV—I’m just finishing an entirely new report on this Company.  Their new franchise model for turning waste water into low cost energy is working NOW—this quarter. I hope to have my report out before their next corporate update.

  2. MADALENA VENTURES – MVN-TSXV—Argentina is the “Comeback Kid” of 2014.  The Vaca Muerta shale play looks to be the only one on earth right now more prolific than the Bakken. (Read that sentence again please).  CEO Kevin Shaw has also done a great job at improving flow rates and reducing paybacks at the Canadian Ostracod play.

  3. CANAMAX ENERGY (formerly Petroforte)—CAC-TSXV—come meet Harry Knutson directly, and understand why I bought 2 million shares of this stock! My largest position by far.

  4. MANITOK ENERGY—MEI-TSX—CEO Massimo Geremia is back with increased production, a great new play, yet trades at a lower valuation than last year—AND his wells pay out in 8-10 months. It’s the only stock I bought during tax loss season in December 2013.

  5. ENTREC—ENT-TSX—one of the top LNG service prospects, with the largest crane operator on the northwest coast of Canada.  CFO Jason Vandenberg is presenting.

  6. IONA ENERGY—INA-TSXv—is trading at just over 1x cash flow.  It’s a deep value play with guaranteed huge cash flows.

  7. HIGH NORTH RESOURCES—HN-TSXV—High North is developing a large Montney oil play beside Long Run Exploration (LRE-TSX), which has wells with a one year payout. 

  8. ENTERPRISEE-TSX – Enterprise’s stock is hitting new highs right now because of strong organic growth. It has higher profit margins than average, and now growth is soaring. Two of their four divisions are incredible cash cows right now—and you will learn why this will happen for the next several YEARS.

Just asking.  Ken

HughK's picture
HughK
Status: Platinum Member (Offline)
Joined: Mar 6 2012
Posts: 761
Inflation and deflation

Dear Adam, Chris, and all,

I would be grateful to hear more about the inflation versus deflation debate.  Specifically, in what ways are both of these trends likely to manifest in the next few years?  

Do you agree with Gail the Actuary's analysis that financial limits will tend to be more deflationary, and that we are likely to see lower real oil prices even as we slide down the right hand side of Hubbert's peak? (See my post on this, which I have copied below.)  How have assessments such as Charles Hughes Smith call on higher commodity prices panned out so far?  Chris and Gregor also discussed inflation and deflation in this Off the Cuff conversation.

Thanks,

Hugh

 

This post is from the thread following PP's interview with Gail the Actuary

Thanks for an outstanding conversation! It has been hard to keep up with all of the great articles and podcasts being shared at PP recently, and it was certainly very engaging to hear from Gail Tverberg.

I have a question about oil prices.

In her recent blog article, What's Ahead? Lower Oil Prices, Despite Higher Extraction Costs, Tverberg sees real oil prices going down due to a number of negative feedback loops including:

1. Wages stagnate as oil prices rise, tending to slow economic growth

2.  Consumers cut back on discretionary spending b/c of higher cost of food and oil, leading to more layoffs and recession

3. Higher oil and food prices together with stagnating wages lead to cutbacks in spending for new cars and homes, falling prices for new homes, defaults on home and car loans, and banks in need of bailouts.

4.  Cutbacks in consumer debt combined with flat wages appear to have led to the decline in spending that precipitated the July 2008 drop in oil prices.  Consumer debt still remains depressed.

5.  Even after high oil prices have been in place for several years, many governments find themselves trapped by the need for deficit spending and ultra-low interest rates to cover up problems with stagnant wages and inadequate demand for homes and cars at 'normal' interest rates.

6.  Rising prices of oil have contributed to long term inflation.  If oil prices start falling, this tends to create the opposite problem-deflation.  Once oil price deflation starts it may lead to a self-reinforcing debt-default cycle.  (Source)

If I understand Tverberg correctly, she is taking the deflation side of the classic question of whether our current economic predicament will manifest as basically inflationary or deflationary.  An image of a contracting, deflationary economy seems consistent with an industrial contraction due to fossil fuel depletion.

On the other hand, while he may not be completely in the inflationary camp, Charles Hughes Smith, in Get Ready for Rising Commodity Prices, argues that oil prices will tend to rise simply due to the hot money effect of QE.  

On a more general level, it's hard to see how supply constraints do not lead to higher prices, since this is how supply and demand tend to work, all else equal.  This is all the more compelling when one considers the massive amount of energy contained in every barrel of conventional crude (~25,000 hours of human work).  How on earth could the oil price not be bid up very high indeed when each barrel supplies so much energy?

So, it's hard for me to accept Tverberg's position that oil prices will tend to go down from here, but I feel in no way sure that they will rise, as her arguments for deflation seem solid.

If I have to put my foot in one camp or the other, I would cheat and keep my feet in both by saying that stagflation will be the dynamic of the future, and that while commodity prices - certainly including oil - will rise, the economy as a whole will contract.  Along this line of thinking, as long as all-in EROI of oil doesn't fall below the critical tipping point (10:1? 5:1? 3:1, as depicted on the graph? 2.5:1?  2:1?), then oil prices should continue to rise, but maybe after that they will fall as oil simply recedes from being the leading energy source for our global industrial civilization to being much less important.  Here is Figure 15.3 of the book version of Chris' Crash Course. 

It seems to me that oil prices will continue to rise until the global net energy return of oil has slid a little further down the steep edge on the right side of the graph, but I don't know how far.  Also, it seems that in some parts of the world, such as Saudi Arabia, they will be producing and using oil for much longer than most of the rest of the world will, so perhaps as transport costs rise, our global use of oil will become more heterogeneous, with places like KSA, Russia, and Canada using significant amounts of oil for far longer than places like Japan or Spain.

But, in the end, I'm really stumped by the question of whether or not real oil prices will go higher or lower, especially after reading Tverberg's article and hearing this podcast.

A few weeks ago, in one of my classes, we posited some conditions under which a belief in limits to growth due to peak-oil-related issues would be proven wrong.  In other words, what type of evidence would falsify the hypothesis about future limits to growth due to fossil fuel depletion?  The answers we came up with were 1.)  if the real price of oil fell for a sustained period of time  2.)  if the EROI on fossil fuel projects started to level off or even increase, instead of falling  3.) if real economic growth increased for a sustained period of time despite higher oil prices and falling EROI on oil

But, Tverberg - who clearly believes in a future constrained by limits to growth - sees oil prices falling. So, now we might have to take a second look at the conditions under which peak oil theory and its ramifications for limits to growth would be falsified.  

Cheers,

Hugh

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1208
Increased probability of economic "hard landing"?

The economies and financial systems of the US, Japan, China, and the EU have been propped up and juiced by extraordinary measures for so long that I feel there's now a higher probability that the eventual reversion to smaller, simpler systems will be more abrupt and severe than the longer stair-step process that many of us have been expecting. What warning signs of a severe "hard landing" are you concerned about and watching for, and do you also feel that the probability of such an outcome has risen in the last few years?

Thanks!

- Nickbert

colleensc's picture
colleensc
Status: Bronze Member (Offline)
Joined: Jan 7 2014
Posts: 42
Yes, I see this everywhere I look as well...

 

I cannot understand how all the players who's every day life is dependent on knowing what I know, are even in this market. I know I have shook my head on many days staying with my plan that is on a couple of years now, just knowing the fundamentals and reversions to mean does still apply historically. My question: How can 4 Trillion dollars leave China and land in the Caymans', and not bring that country down? Certainly that represents a cash withdrawal large enough to cause severe damage to China's economy. I keep thinking that represents in fractional terms 40 Trillion, doesn't it? That's a lot of Trillions, yes? Plus, China cash is in the Canadian housing markets, the US and gosh knows where. How are they keeping that economy up? Geez, I could use many more stats on China and I just think that miracle is ready to go Kaboom! But, I digress.

C

 

Dick.Ferris's picture
Dick.Ferris
Status: Member (Offline)
Joined: Dec 21 2011
Posts: 4
Farm investment cooperatives with pre tax funds

Discuss potential investment opportunities or concepts related to cooperative farm land ownership using IRA pre tax funds...

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Online)
Joined: May 26 2009
Posts: 3072
More questions?

Good questions submitted so far.

Any others folks would like to put into the consideration set?

Hotrod's picture
Hotrod
Status: Silver Member (Offline)
Joined: Apr 20 2009
Posts: 183
Investing

Hello Adam,

 

Thanks for this opportunity to ask questions.

My question is of more of a general nature.  Is it harder to turn a dollar now than it has been for decades?  Several of my business associates were lamenting the fact that it is nigh onto impossible to invest in any area that is productive and profitable  for the longer term anymore. It seems that we now live in a giant casino and that if you don't have access to large amounts of capital and/or inside knowledge you are out of luck.  Your thoughts are appreciated.

PdeB's picture
PdeB
Status: Bronze Member (Offline)
Joined: Dec 29 2009
Posts: 39
A world worth living and emotional resiliency

Hopefully it's not too late to get in on this latest Q&A. I have two related questions:

 

1)  Who are the people you turn to for inspiration with envisioning a future worth living as well as building community toward it? (same question I asked back in 2012 but I thought it would be interesting to hear if any people or resources stand out two years later)

 

2) Loved the emotional resiliency piece "Life Is What We Make of It" that Chris did back in December and I'm looking forward to the second installment (as well to follow-on pieces in the same vein). Given that you have stated PP will be providing more space to this topic, I'd love to hear more about your plans.

 

Thanks!

Paul

hydrodog's picture
hydrodog
Status: Member (Offline)
Joined: Apr 14 2008
Posts: 22
Like your direct questions....



take this into consideration ... stocks are paper and even in the best of times you are buying in to management and a corrupt market system.... Now that things are getting worse wouldn't it be best to try and preserve wealth with real things instead putting faith into others ....

Waterdog14's picture
Waterdog14
Status: Silver Member (Offline)
Joined: Jan 18 2014
Posts: 127
Are community capital (local microvesting) strategies too risky?

Chris, Adam, et al.,

Do currency-based local investment strategies make sense today? Examples include local-vesting, micro-finance, SlowMoney.org, and various community capital groups.

The reason I ask is that I've started one of these groups with three other members of my small city. We've set up a B-corp for-profit public-benefit corporation for community finance. The point is to provide a place for investors to park their money, other than Wall Street, earn a moderately low yield, and provide capital for sustainable agriculture, local food processing (which we sorely lack), and other local businesses. However, when I read the Peak Prosperity posts, I question whether any US currency-based investing is a smart idea.

I saw one post in which Chris commented on how he might be comfortable with a small percentage of local investments. Personally, I'm comfortable with the risk, but don't want to lead my community down a dangerous path if the economy truly "heads south" and the borrowers in the community are unable to repay the low-interest loans. I want to be fearless, proactive, and resilient, but not stupid or reckless.

Do you think that, if the economy craters, my community will be better off with our dollars loaned amongst ourselves? Or should we steer clear of all lending and borrowing?

I'm hoping you'll suggest that community capital lending is a good idea, and that setting it up is worth all the effort. One of our first big projects is to raise investment capital to process our local grass-fed beef & lamb & rabbits here in Colorado, instead of shipping our for live animals hundreds of miles The need is real, the concept is good, but the US dollar scares me. Your thoughts?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments