Hmm why is that? There are CBD businesses that are countercyclical: accountants, receivers, lawyers, debt collectors. There are CBD businesses that are largely immune to economic conditions: electricity retailers, government workers, cigarette and alcohol sellers. The CBD is a big and varied place.
csiro report $8 L Petrol affect on RE
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Hmm why is that? There are CBD businesses that are countercyclical: accountants, receivers, lawyers, debt collectors. There are CBD businesses that are largely immune to economic conditions: electricity retailers, government workers, cigarette and alcohol sellers. The CBD is a big and varied place.
In a peak oil caused depression it's back to basics. There will be massive unemployment in the cities, as what do all the finance dudes, bankers, lawyers, accountants, real estate agents etc do?
In the bush there will be an undersupply of workers. People will be needed for the biodiesel plants, the vege gardens, the farms, collecting fire wood, abbator workers, etc.
I will be employing a Macquarie bank exectutive chipping weeds out of my barley crop so that I can malt it and turn it into beer.
Hey, I'm only half serious here, but just giving you lot something to think about.
See ya's.
In the bush there will be an undersupply of workers. People will be needed for the biodiesel plants, the vege gardens, the farms, collecting fire wood, abbator workers, etc.
I will be employing a Macquarie bank exectutive chipping weeds out of my barley crop so that I can malt it and turn it into beer.
Hey, I'm only half serious here,
but just giving you lot something to think about.See ya's.
The lawyers and accountants will be doing insolvency work, corporate restructures, energy and mining. The finance dudes will be financing new oil and gas exploration, gas fired generation, hotrocks and wind farms. The real estate agents will be selling high density infill development along light rapid transit built by construction workers and powered by new coal fired electricity plants.
If anything remote areas are more vulnerable to peak oil. As you know food production costs are a function of energy costs. Sure food prices will sky rocket but so will input prices - it will be tricky to juggle.
So I dont agree with your analysis. I have deliberately chosen a portfolio that is partially driven by rising oil prices though. If petrol goes to $8 a litre there will be some people that become very wealthy as a result. Keep in mind the money doesnt dissapear - it just goes into someone elses pocket.
Worse case scenario for me is petrol drops to 50 cents per litre.... If peak oil hits in a really big way I will move to the Middle East and work for an oil company.
If anything remote areas are more vulnerable to peak oil. As you know food production costs are a function of energy costs. Sure food prices will sky rocket but so will input prices - it will be tricky to juggle.
So I dont agree with your analysis
. I have deliberately chosen a portfolio that is partially driven by rising oil prices though. If petrol goes to $8 a litre there will be some people that become very wealthy as a result. Keep in mind the money doesnt dissapear - it just goes into someone elses pocket.Worse case scenario for me is petrol drops to 50 cents per litre.... If peak oil hits in a really big way I will move to the Middle East and work for an oil company.
I think with the increase in population, I suspect that the demand will keep the house prices steady if we hit $8 per litre in petrol.
The other thing is technology is moving at a rapid rate in terms of telecommunications that for a lot of things we probably don't need to travel as often.
Offices are moving to the outer suburbs as well. Look at the business districts in say Melbourne's outer south east - plenty of them or at least plenty of satellite offices where workers can go to, log in and work closer to home. How many of us can log in and work from home now days?
Hi-speed video-conferencing such as Cisco's TelePresence and HP's Halo technologies allows people to collaborate face to face in real time from pretty much anywhere in the world so the need for expensive international/interstate travelling becomes less and less.
Business's and industries will accommodate, I guess we did when petrol and transport was cheap, and I'm sure we will when it becomes expensive.
The other thing is technology is moving at a rapid rate in terms of telecommunications that for a lot of things we probably don't need to travel as often.
Offices are moving to the outer suburbs as well. Look at the business districts in say Melbourne's outer south east - plenty of them or at least plenty of satellite offices where workers can go to, log in and work closer to home. How many of us can log in and work from home now days?
Hi-speed video-conferencing such as Cisco's TelePresence and HP's Halo technologies allows people to collaborate face to face in real time from pretty much anywhere in the world so the need for expensive international/interstate travelling becomes less and less.
Business's and industries will accommodate, I guess we did when petrol and transport was cheap, and I'm sure we will when it becomes expensive.
The lawyers and accountants will be doing insolvency work, corporate restructures, energy and mining. The finance dudes will be financing new oil and gas exploration, gas fired generation, hotrocks and wind farms. The real estate agents will be selling high density infill development along light rapid transit built by construction workers and powered by new coal fired electricity plants.
If anything remote areas are more vulnerable to peak oil. As you know food production costs are a function of energy costs. Sure food prices will sky rocket but so will input prices - it will be tricky to juggle. So I dont agree with your analysis
I did say depression, not recession.
We must have different ideas of what constitutes what.
If a 'peak oil' depression hits us, you head to the CBD, and I'll head to a remote area, and we will soon find out who the winner is. In fact, maybe I wouldn't, as I wouldn't hear from you.
I wouldn't go to the Middle East either. When the oil runs out it will be hell on earth.
The arab oil man said,....
"My grandfather rode a camel.
My father drove a toyota.
I drive a Rolls Royce.
My son flys a learjet.
My grandson will ride a camel".
I'm not a doom and gloomer either. I'm still heavily invested into energy and resource shares. I'm just able to see what the worst case scenario means.
And however bad it could be, it will be a lot worse everywhere else in the world as Australia is a net energy and net food exporter.
See ya's.
Let me get this straight. We are going to have a depression because world energy prices are going up 500%. But as you point out we are one of the worlds biggest energy exporters.
Austrlia has more to gain from peak oil than just about anywhere in the world. For those working in the energy export industries (or servicing those industries, for example providing housing for miners) there is the opportunity to become very wealthy from peak oil.
And guess where all the mining / oil and gas executives live. The General Managers. The CFO. The accountants. HSE. IT support. Queensland Rail managers. Owners of the Dalrymple Bay Coal Terminal. They dont live at site thats for sure - they live in the CBD.
We arent going back to the horse and cart days. We are past that. We have something like 400 years worth of coal in the ground in Queensland and no oil shortage will change that fact. It will just make coal prices triple. Again.
Austrlia has more to gain from peak oil than just about anywhere in the world. For those working in the energy export industries (or servicing those industries, for example providing housing for miners) there is the opportunity to become very wealthy from peak oil.
And guess where all the mining / oil and gas executives live. The General Managers. The CFO. The accountants. HSE. IT support. Queensland Rail managers. Owners of the Dalrymple Bay Coal Terminal. They dont live at site thats for sure - they live in the CBD.
We arent going back to the horse and cart days. We are past that. We have something like 400 years worth of coal in the ground in Queensland and no oil shortage will change that fact. It will just make coal prices triple. Again.
Hi TC,
Well that's obvious. A Macquarie Bank expert would not know how to/be able to, work hard enough on the land. You'd never employ them in the first place.
bye
PS. $8 a litre is above my $500 brl thread. As the major car makers are already shocked at sales with current prices, and are scrambling to have electric/hybrid products available, $8 a litre is fantasy land. If we don't have major general inflation in the next decade, there is every chance that petrol prices will be at or below todays price.
bye
,
Well that's obvious. A Macquarie Bank expert would not know how to/be able to, work hard enough on the land. You'd never employ them in the first place.
bye
PS. $8 a litre is above my $500 brl thread. As the major car makers are already shocked at sales with current prices, and are scrambling to have electric/hybrid products available, $8 a litre is fantasy land. If we don't have major general inflation in the next decade, there is every chance that petrol prices will be at or below todays price.
bye
8$ a liter in 10 years time as a worst case scenario is really quite conservative. At a current price of $1.50 and prices doubling every 7 years (I know, old school) we will be looking at $4.00 per liter just from inflation. If that's the worst case then who gives a rats ****. On the basis that oil has doubled over the last 2 years, then over ten it should increase by 2^5 times which is 32 times and so it should be $48 per liter. Obviously, the guys at CSIRO are much better at maths than I, thank god.
Mike.
Mike.
I predict there will be a massive increase in moped use. If you have travelled anywhere overseas like Bali, or Rome, you will know they use them in their thousands. loaded up to the gills in any asian country. Most trips around Melb are one person in car and could be done on a motor scooter. Just recently got my motorbike license (am over 60) I only did it for fun because I had wanted one since I was 16. But of the 16 that went through our group in the one day course, I was the only women, and all the guys chose motor scooters to learn on (my guy only guy on motorbike) and they all said it was because of the fuel price. One guy had big gas guzzling 4wd said he couldnt afford to run around town all week
Great post HG.
I have, in the past, tried to highlight this effect by giving examples of the cost of "setting up house" thirty or fourty years ago compared with today and the difference in fixed-dollar terms is much greater than than most could imagine. Years ago appliances hardly outlasted their repayment terms (ordinary folk could not pay cash!) so it was hard to get out of the debt trap, especially as women were discouraged from working by law, pay and convention. Those monthly payments would go a long way towards paying off a mortgage today.Are you a Jim Puplava reader?
I don't think there will be a depression. Just speculating 'what if'. I hope your right. I think you will be too. There won't be no rotten depression. Just letting my imagination run a bit.
In the worst case scenario though, I'm assuming trade embargos. The US has the grain and not much oil, the Middle East has the oil and not much grain and they both hate each other. China will be in the middle looking to scavenge the scraps. Resource wars. The devastation of Africa as it self implodes through starvation and genocide. Things can snowball out of control, just like what seems to be happening with the credit crisis.
The CEO's might all live in the CBD, but I bet you that most have a rural place somewhere too.
See ya's.
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You keep saying that we have all this coal and gas but I seriously doubt your sources are correct. I would like you to watch this series of videos and then re-test your hypothesis.
http://www.youtube.com/watch?v=F-QA2rkpBSY&feature=related
Someone dismissed it as being "long term" but is generally speaking of one life-time.
Australia is a big net importer of petroleum so there will not be as many wealthy people here as you may think. I cannot find a good oil/gas company to invest in because none are replacing their reserves as they are depleted. Don't be so dismissive of TC's concerns. He is well read on the subject.
I don't really agree that fuel prices are a zero sum game. Sure some people will get rich from $8 petrol, but not many. To 90% of the population it will be like a massive new tax. And worse, besides a few oil producing Australian companies, it will be a tax on economic growth. I suppose Australian coal, gas, uranium producers are doing fine. That's some compensation. Invest into the winners? That's what I've been trying to do.
I reckon most of the money does indeed disappear.
See ya's.
Who wants to chip in for me to import a few of http://www.teslamotors.com/
What a nice looking car (insert drooling here). I'd like a red one please!
At one cent a mile...that's pretty good value.But how long before we can really run electric cars in Oz? Tis easier in the USA where towns are closer together and one actually could recharge every 220 miles (354 klms)...even if it does take 2 hours.
I'm thinking of the practicalities here in Oz, comparing my economical Honda CRX with a Telsa, say on a trip from Cairns to Townsville:
Distance Cairns to Townsville = 348 klms
Honda Driving Time = 4 hours
Time to fill up the Honda = 5 mins
Time to fill up the Telsa = 2 hours (might do this the night before)
Honda fuel tank = 45 litres (or 495 klms)
At say 11 klms/litre & $1.50/litre, cost = $47.45 for the trip.
Telsa fuel tank = 354 klms/tank
At say 1 cent/1.6 klms = $2.21 for the trip
Mmmm..... very cheap to run!
But I'd have to wait 2 hours before I could go anywhere else.
______________________________________________________
Current value of Honda = $10K (approx)
Current value of Telsa = $109K (approx)
Honda does about 15K klms pa = $2045 pa in fuel
Telsta would do same 15K klms pa = $93.75 pa in fuel
So: $99K/($2045-$93.75) = 50.7367 years for the Telsa to pay itself off in fuel savings. Gosh...that's a long time. Hope we don't run out of oil before then.
PS Hope I've done the sums right...I'm sure someone will check my number crunching for me.
I downloaded and watched the video you linked - but only the first one because its a massive bandwidth hog ! It took me about half an hour to download on this crappy ADSL line.
Australian electricity demand grows at about 2 - 3% per annum. Assuming 3% thats a doubling of electricity demand every 25 years. But alumina production alone consumes 10% (or more) of our demand for electricity. (source: http://www.uic.com.au/nip37.htm).
If you shut down the alumina producers and other very high energy intensity industries (like we have stopped growing rice because its a water intensive industry) and let high prices or mandatory standards (banning incandescent bulbs, implementing green building standards) drive conservation behaviour in other sectors we could probably reduce our demand for electricity by 30%.
Given that most of Australia's power stations are designed to only run during peak hours (high ramp rates and high marginal costs of production) a 30% reduction in demand would see a massive fall in electricity prices with the result that the really big baseload power stations like Loy Yang would start to shut down.
Basically what I am saying is if we really wanted to we could drastically reduce electricity demand and drive down domestic electricity prices. Many power stations owners (Babcock & Brown Power) would go under in the process. Other government owned generators (NSW) would lose money hand over fist. But we don't have any particular motivation to do that.
So I am not really sure what sort of point you are trying to make.
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