Some thoughts in response....
>>>>More dollars won't be chasing the same number of goods, because the indebtedness of the American consumer is at a all time high.
(How do you get a horse that is quenched to drink more.)<<<<<

The central bank can loan an infinite amount of money into existence, as long as they are not worried about what it will buy.

>>>>It all comes down to a matter of confidence. The American consumer will eventually sense the fear of recession and tighten there belts.( They have already started)<<<

Agreed, and when the citizens lose confidence in the future purchasing power of the money, they will get rid of it as fast as it comes into their hands. Being willing to pay anything for stuff that is seen as more able to hold its tradeable value for longer.

>>>>I like this analogy from George Ure, "In the economy, as debt builds up, the economy has to move faster and faster to stay even. Debt load, like ice loading, causes a lack of lift. Beyond certain limits, debt is to the economy, what ice is to a wing. The Fed's moves are designed to keep the wing flying.

Debt is continuing to build up on the economic wing, and we're losing lift!<<<<

Yes and what crashes is the purchasing value of the currency.


>>>>Can some one out there tell me why Japan has been in a deflationary recession, eeven though over the last few years the goverment has gone into a massive credit expansion?<<<<

As I understand it, it is because the Japanese people save a huge proportion of what they earn, in their mattresses, or in the government post office bank. It means the government has to fund all sorts of projects to create vehicles in which the people's savings can be invested, even at practically no interest rate. Also, the Japanese trade surplus with the US (primarily) allows them to invest the US$ balance they get in US asset markets.

The Japanese people have obviously not lost confidence in their currrency. maybe this is because it is tied so closely to the US$, which is still perceived as strong.

Hope this is some help. These are just my opinions, I'm no expert.

Goldfan

As a confirmed lurker, I lacked a password when your contest inspired me to participate. It just arrived, so in the hope my entries are still eligible, I humbly offer:

Fed-Wipes
Greenspasms
Shamplasters
DebtRags

http://home.hiwaay.net/~becraft/mcfadden.html Since I've seen no replies to this link, which was posted yesterday, I can only assume, it's length (24 pgs.) is consuming peoples time, or it might be considered boring. (circa 1934) Perhaps, however, the saying still applies,-----Ignorance IS bliss!!!!!!!

My instant replay on your (many thanks) Japan posts, suggest that the "Recession" in Japan is suffered by the predatory "wealth transfer" folks, whereas the people who actually produce something are doing OK. In order to draw any comparison analysis for looking at the US- boomerama, it would help to know what was the percentage of investment participation in their stock market at its peak.

I am amazed. I think I should organise a poverty tour - providing we could get adequate police protection as we tour some of the areas. And we don't don't need to travel too far from Manhatten, for some pretty bad places. (please see the section on New York in the stats). Do you remember the cabby's comment to Eddie Murphy when he dropped him off
in Queens (NY), after asking to be taken to a poor area of NY (I forget the movie) -"How shitty do you want it"

But there are people living in cardboard boxes (literally) in most of the large cites

What makes it so bad in America, is that it exists alongside, comparitively, such contrasting wealth. But America is not alone, as I have said, in the western world, it is just that the way it is projected by media - we don't, and apparently some Americans don't, expect such things to exist.

What I am talking about is people with no means of support, except begging, no home, no job, sleeping rough - in doorways, cardboard boxes.........I mean, how much futher down the ladder can you go.

What makes it different in the US from these other countries you mention is that the balance is different there is a greater percentage of poverty, larger populations, and the infrastructure reflects it.

My first trip to Hollywood, California, just walking down the Boulevard, I was accosted about four times for handouts.

I haven't the time to go into this further and put forward a more explicit paper. But glance through the folowing stats
especially the part at the bottom - how America stacks up

Thanks for the polite way you ask for explanation


One limited measure of the growth in homelessness is the increase in the number of shelter beds over time. A 1991 study examined homelessness "rates" (the number of shelter beds in a city divided by the city's population) in 182 U.S. cities with populations over 100,000. The study found that homelessness rates tripled between 1981 and 1989 for the 182 cities as a group (Burt, 1997).
A 1997 review of research conducted over the past decade (1987-1997) in 11 communities and 4 states found that shelter capacity more than doubled in nine communities and three states during that time period (National Coalition for the Homeless, 1997). In two communities and two states, shelter capacity tripled over the decade.

These numbers are useful for measuring the growth in demand for shelter beds (and the resources made available to respond to that growth) over time. They indicate a dramatic increase in homelessness in the United States over the past two decades.


Recent studies suggest that the United States generates homelessness at a much higher rate than previously thought. Our task in ending homelessness is thus more important now than ever

Poverty's Effect on Children
Unfortunately, not all America's poor have been so fortunate. According to figures released by the U.S. Census Bureau in September 1996, 13.8% of Americans live in poverty. Many more are on the borderline. Poverty affects all ages, but an astonishing 48% percent of its victims are children:

About 15 million children -- one out of every four -- live below the official poverty line.

22% of Americans under the age of 18 -- and 25% under age 12 -- are hungry or at the risk of being hungry.

Everyday 2,660 children are born into poverty; 27 die because of it.

Children and families are the fastest growing group in the homeless population, representing 40%.

Poverty in New York City

Domestic poverty knows no geographical barriers, but it is especially widespread here in New York City. The latest study released in 1995 by the Citizens Committee for Children of New York reveals that New York children fare worse in virtually every category than their counterparts at the state and national level. This includes low birth weight, infant mortality, violence-related deaths, abuse and neglect, education, and job preparedness.

Life for New York City children is getting worse:

25% of New Yorkers are children.


762,000 children live in poverty.

181 babies are born into poverty each day.

10,000 children are homeless. This number has doubled since 1988.

In addition to these sad statistics, many New York City children read and do math below grade level. An estimated 38.9% of the city's school children will graduate high school, compared to 68.8% for all American students.



How the USA Stacks Up
Among the 21 most affluent nations, the United States has the highest percentage of poor children. In fact, our rate is twice that of the country next in line.

Furthermore, the September 1996 welfare reform bill cut $60 billion in aid to poor families within a period of six years. It is estimated that this will throw one million more children into poverty. Sadly, even though we are the richest industrialized nation, we are the stingiest with aid to our own children.

Prospects for Their Future
Too many young Americans go to bed with empty stomachs. They wake up to seemingly hopeless futures: school problems, unemployment, welfare, gangs, drugs, and crime. Children of poverty are more likely to suffer young and violent deaths.

Mentally and physically malnourished for the first five years of their lives, they are unable to keep up in class. One national study projects that almost a million children who will have started school in September 1996, will encounter serious problems. Many will drop out or finish high school functionally illiterate.

I think that Mountain Top's post #47498 is civil, however, subject to attack, as this appears to be Pandagolds modus opperandi. I am fully aware that all of the Knights at this round table are more than capable of defending themselves, but I have a brother like Pandagold. He has the inate ability to get belligerent at any hint of anything that he thinks, says or does may be called into question. He also has the ability to P*** O** the Pope, just by saying good morning. Maybe this is why I now open myself up to attack.

I apologize for taking up so much bandwidth, but felt that these three posts should be posted in their entirety, as one of the complaints from Pandagold is that things are taken out of context. I defy anyone to come to the conclusion that DaveC is anything other than civil with his response.

Pandagold, I have been trying to figure you out for some time now, and the only thing that I can come up with is that you are arrogantly snide. Go to Wyoming or some other western state, get some sun and wind on that ornery hide of yours and toughen up your skin.

Even though I am on a rant, and realize that I may suffer banishment from this forum, I will still be blunt. You are blatantly incorrect concerning the poor in this country versus the poor in the rest of the world. You remember my mention of my brother? He is poor, and homeless. Guess why? It is because this is the way he choses to live his life. Most of the homeless in this country have drinking, drug, or psychological problems.They are also generally misfits of society. They can not or will not abide by societies rules. Help is there for anyone that wishes it.

This is the last sentence of your post #47491 - "So PLEASE! I do not mind fair comment or disagreement if it has some merit and suggested in the right manner"

Surley you jest?



Pandagold post #47477
I very much agree with what you say. America is a mixed bag of tricks. There exists some of the worst poverty in the world, and, on the other end of the spectrum, most of the extreme 'rich'

In California more riches are lavished by some on their pooches in one week, than a 'human-bean' has to live on for a whole year in some third world countries.

Unfortunately this sort of crap gets projected to the world.
Rarely is the more poverty side acknowledged by media ie the 'carboard cities' that abound. If ever we glimpse 'the other side of the tracks' it is usually in some 1920's era
setting, as though it only existed in the past.



I also know that most of this high living is on debt - a debt made possible by the rest of the world keep accepting these green iou's'.

Other parts of the western world are also enjoying a higher standard than they would if some of these 'banana republics'
got a little better deal than at present.

I have travelled far and wide, and not on one of these - 'It's Tuesday so it must be Paris' trips. So I know the score.

I know that we can never have an ideal world, and most people accept that, it is just that things have now become a bit skewed, don't you think. It is when you get extreme excesses and a diminishing cushion in between that the real problems start.

And that is where we are at. At least, that is how I see it.

I appreciate, and fully understand your comment.


DaveC post#47487
"There exists some of the worst poverty in the world" in the US?

I have travelled the world, and especially the USA, and I do not believe this to be true.

All you have to do is go down to Mexico and you will see life like nothing you can find in America.

At least not yet.


Pandagold post#47491:
You must pour though my postings with one thing in mind, not to understand the essence of what I write - incidentally
in this case acknowledging a comment from an American who was pointing out to me what I was acknowledging here (see the post to which this refers), but your objective appears to be finding one piece, take it out of context and try and score a point.

Never mind you having been to Mexico - where have you been in America? At least, if you live in a cardboard box in Mexico, you are reasonably warm - try it in Chicago, or New York, or Detroit, yes and London, in January.

There is also much more family togetherness in many of these countries which helps to make poverty more bearable.
When you have nothing in the US - man YOU HAVE NOTHING.

If you don't care for my postings, and can't see them in context and identify the essence,then pass them over PLEASE!

I am not anti -American, or anti any other country in this small world of ours. I have a son who is a US citizen by birth, and married to a US citizen. I also lived there many years and have friends all over the country. I travelled it in my job from North to South, East to West. I have seen the best, and the worst. I took US history at school in great depth.

So PLEASE! I do not mind fair comment or disagreement if it has some merit and suggested in the right manner

Mike

Those statistics are not mine. I suggest you read them and digest.

That was not the first brush with Dave C.

You condemn yourself with your words.

You probably chose to miss this in your reposts so I will reprint it for you


How the USA Stacks Up
Among the 21 most affluent nations, the United States has the highest percentage of poor children. In fact, our rate is twice that of the country next in line.

Furthermore, the September 1996 welfare reform bill cut $60 billion in aid to poor families within a period of six years. It is estimated that this will throw one million more children into poverty. Sadly, even though we are the richest industrialized nation, we are the stingiest with aid to our own children.

Prospects for Their Future
Too many young Americans go to bed with empty stomachs. They wake up to seemingly hopeless futures: school problems, unemployment, welfare, gangs, drugs, and crime. Children of poverty are more likely to suffer young and violent deaths.

Mentally and physically malnourished for the first five years of their lives, they are unable to keep up in class. One national study projects that almost a million children who will have started school in September 1996, will encounter serious problems. Many will drop out or finish high school functionally illiterate.

You also chose to avoid how I thanked Mountain Top for his courteous comments.

I would love to hear what your brother has to say about you

hello goldfan, thankyou for your ideas,

You say, "The central bank can loan an infinite amount of money into existence, as long as they are not worried about what it will buy".
But what happens if the consumer and corporations who are already deeply indebted, decide to pay off loans rather then borrow more.

You say, "when the citizens lose confidence in the future purchasing power of the money, they will get rid of it as fast as it comes into their hands. Being willing to pay anything for stuff that is seen as more able to hold its tradeable value for longer."
That is an assumption which may or maynot play out. What happens if there is asset deflation caused by a credit crunch? I think the public would rather be holding dollars under that scenario.

I am not sure my logic is sound, but as i see it if people are in debt, then they dont have any money to buy hard assets.

Thank you for your interesting post! We're seriously looking into purchasing a tiny farm (4.5 acres) here in Northern Virginia, and I want to make it pay for itself in every way. We plan to landscape with nut trees and plant an orchard on one of the pastures. The house itself (a Depression-era cottage) gets its water from rainwater cisterns! I plan to set my nine-year-old to experimenting with different gardening styles (hydroponics, greenhouse, etc.). Not only will it be a fun change from our energy-hog house in town, but in the event of a breakdown in society, it will be a place to escape to.

It was exciting to read your post about hydroponics. Last summer I was paying $3.98 for hydroponic basil plants from Fresh Fields, and they only provided enough basil for a meal or two! So I'd like to be able to garden and get them for free.

Black Blade, Hydroman's right; your posts are amazing.

I tried to answer your question the best way I could, given I have little time. I tried to support it with some statistics.

I thanked you for the courteous manner in which you responded to my posting.

Now if my posting offended you, as Boxman says, then please tell me. I will then extend to you an apology, and will make that my last posting on this forum.

It rests with you
Pandagold

Thank you for your help with my PC problem. It is a fairly new PC (Pentium 3) and it does have windows 98.

Excuse my ignorance but what is the 'OS' you refer to?

A Farmette is a little slice of heaven. I'm on 10 acres
myself. Have a large Gogher Turtle that lives under my
air conditioner unit. Deer,fox,armadillos,possums,monkey
squirrels,quail,raccoon, visit often.

Plenty of edibles growing. Best part of day is pulling
back down in driveway.

The Eagle has landed
Lady liberty has been properly fondled and tucked away, to awaken at the dawn of the new age.

Have you tied these 'ponics in with "envelope" frame designs?

BTW 'ponics were already frequent inhabitants of sci-fi stories way back in the early fifties

Sir;
I was most assuredly not offended nor did I intend to offend. It seemed an opportunity to gain insight from one who has been in a position to see those things which I have not. Please do not leave this forum. I am sure that their are others besides me who can benefit from your postings. I am new on this board so it is entirely possible that the way my questions to you were worded did not convey that it was information I sought and in no wise questioned what you had said.

I have been reading the posts on this board for some months now. I do not believe America's current economic condition has been characterized as stagflation by many participants.
Classical economists (Marx, von Mises, Keynes) never really had much to say about stagflation. I suspect that they did not believe this condition was possible. The last time there was much public discussion about the phenomenon was during the 'Seventies.
Central bank monetary policy is a blunt instrument. The bank can either increase the rate of monetary growth, reduce the growth rate, or turn the rate negative. Efforts to
"Channel" credit availability only create opportunities for arbitrage. The basic rule for the bank is simple: during recession, accelerate monetary growth. In boom times, reduce
the rate. In inflationary times, set the growth rate to negative.
But today, there is evidence of both recession and inflation. The Fed is on the horns of a dilemna. Any clear monetary policy will produce a large destructive result. This is stagflation.
I am aware of only four episodes of stagflation in America in the last one hundred years. The first was the 1929 - 1930 era. The second was the 1973 - 1974 era, the third was the 1980 - 1981 era, and the last one is now.
The first aspect of stagflation is the confusion it produces everywhere - in the central bank, in the major banks, among pension fund managers, and with the general public.
The second aspect of stagflation is that it follows hard on the heels of some major error of judgment in the capital markets. The 1929 error is a classic, but major errors were made in the "Favorite Fifty" stock market of 1973, and last year's dot-com and telecom mania. The 1980 - 1981 error was the real estate / second mortgage mania.
Political responses to alleviate the condition of stagflation have varied. The 1929 - 1930 response was the classical conservative Republican formula: cut government spending, increase taxes (preferably to foreigners), and wait. The intent was to reduce the cost of capital to Wall Street, allowing banks to work out the bad loans. The wealth preserved by the richer half of the population would, it was hoped, trickle down to the poorer half.
The 1973 - 1974 and 1980 - 1981 eras saw the liberal, Democratic approach: use price controls, increase government spending, use credit allocation controls, and raise interest
rates. The intent was to allocate purchasing power to the poorer half of the population. Money would flow to the richer half through the natural course of events.
Today's approach is as yet unformulated, largely because of the equal division of power between Democrats and Republicans. Since both parties want to keep Wall Street happy, I believe whatever produces the most income for investment bankers will be the policy adopted: easy money, and a lot of debt restructures.
The conclusion to all periods of stagflation is the same - all the quick, easy nostrums fail, and the nation experieces a nasty recession, at best.

The effects on gold are mixed. The 1933 financial collapse did wonders for gold, provided the owners of gold turned scofflaw. The 1980 - 1981 period's effects on gold's price are well known here. However, the modern era of uncontrolled gold prices began in January 1975. During the course of that year, the price of gold dropped in half, from $200/oz. to
$100 /oz.

Pandagold, I have reread my post, and I can not find the statement where I said anything about offending Mountain Top. I only said that his post was subject to attack. Somehow, I seriously doubt that he was offended. Seems to me it's you that gets offended easily.

Sorry, I don't talk politics much anymore, as it is difficult in the extreme to have either side understand the other. I will say this though, when it comes to poverty statistics in this country, all forms of aid are conviently left out, and only raw income numbers are used. I have read in the past as to the staggering number of the "poor" have telephones, color televisions, cars, homes, air conditioning, and of course the "children" must always be mentioned. Starvation is, for all practical purposes, nonexistant. I guess that the government has not figured out how to get any of that 1.8 trillion dollars in tax money to the needy.

You also stated, in your last post; ""You probably chose to miss this in your reposts so I will reprint it for you"

and


"You also chose to avoid how I thanked Mountain Top for his courteous comments.""

Sorry, I had already sent my post before I had read yours. I doubt that I would have said anything, even had I read it, as it is irrelevant and unworthy of response.

And this:

"I would love to hear what your brother has to say about you""

As I said earlier, you are arrogantly snide.

This is the United States of America, the most giving country this world has ever known. We not only take care of our citizens that are in true need, but we are always to be counted on throughout the world whenever disaster strikes. We may not ask for help from outside whenever disaster strikes here, but it would be refreshing to at least get an occasional offer.

Well, enough of this drivel, back to lurking. This means that I am done with the banter. Just had to get you off of my chest.

Mike

Hello Grand Lady of this Castle Keep - always a treat to see your presence amongst the boyz. A hearty congratulation on your aquisition of the other "real" wealth.

Hydro is great for when the sun is too short, or the soil too poor, but nothing beats good organic dirt mixed by hand with a green manure of compost, and ole sol driving those seedlings to yield. Do to limited water availability my wife and I installed a hose type drip irrigation system for our herb and veggy garden, as well as our fruit trees. Works fantastic with great conservation of water, no leaf or fruit damage from over-head spray, and can be easily put on a timing system when away.

Hydroman is right in his analysis of what and why hydro can help to save mama earth. [I'd like to know what Sir Peter is refering to with his "envelope" frame design?]

Sorry if this is off topic, but without Wolavka to remind us that grain is golden, and even Sir FOA indicating his preference for home grown herbs, I guess we're in line, no?

Salutations
IronHead

The Hobbits are wondering if the P.O. proof package arrived the second time ? As I was coated in LEAD, it may have been slow in transport, BUT, all other packages have been acknowledged as having been recieved by the Goldhearts.
<;-)

NOW, if I could only learn to spell ANGRIT correctly !
<;-(

Sir Beesting - Akemashte Omedeto! Your comments on Japan today brought back memories of a time I hope we avoid here in the US when our bubble really starts to vaporize, but I doubt it will be much different, particularly the real estate (GSE - Fanny Freddy) debacle ready to unwind. Thank you for putting Ironhead in the same sentence with a true American hero, one Andrew (Stonewall) Jackson - whom I put up with another great, Teddy Roosevelt.

Sir Peter Asher - Agree completely; that at what level was the average "Yoshiro" on the street participating at the height of the Japan apex, as well as what was the derivative /fund arena, a contributor to their market largesse and subsequent demise? I doubt that the equity derivative book was nearly what we've got set up here today. However, all the charts I've seen sure do draw some scary parallels, to what the final outcome might be. And I've got the same "feeling" in my bones that I did in Japan in '89.

Really enjoyed the badminton match betwix you and Sir Goldfan over the weekend - felt like I was watching a version of speed chess economics. Hey, what's that envelope frame system about? Any links? TIA

Sir Tree in the Forest - Ahh.... regarding your comment about "Japanese women making the best wives"...Ahh....I could really unleash a major faux pas with that one. Suffice to say, that may wife is the best I could ever hope for, and she just happens to be Japanese.....wheeeew....(hope that came across ok?)

On the subject of two wheelers: Remember, this life aint practice.....And.. "The more I know about women, the more I love my motorcyle".....Oh Oh....there's that faux pas!! Just in Jest folks!!

Tree - A Ride, get you one again!!

Salutations
IronHead

With regard to the behaviour of the Japanese....

It seems to me that we cannot derive much instruction from the situation in which the Japanese currently find themselves, which may be of use in predicting how the American people will react to the problems ahead.
This, because the Japanese culture is so different from the American.

I would refer those interested, to Ruth Benedict's most interesting investigation of Japanese culture contained in her book, "The Chrysanthemum and the Sword".

This book, as I recall, was made possible by the interest the U.S. Government had, during WWII, of acquiring some insight into the motivation of the Japanese. That is, a "know your enemy" interest.

Again, as I recall, Benedict shows that the Japanese, at the time of her investigations, early 40's, were then a very highly unified people, completely identified with their Authorities, incarnated in the Emperor. Individualism was not, and perhaps still is not, considered a quality but rather a defect. Conformity to the accepted behaviour was a paramount value. Perhaps this is still the case, and what is accepted behaviour in Japan, is to accumulate paper money or paper money accounts.

To accumulate gold, would not appear to be an accepted pattern of behaviour. (Does anyone have information regarding the legality or illegality of gold purchases by Japanese?)

The Japanese were in the 40's, and perhaps they still are today, a people who did not wish to behave in inappropriate manner. Such behaviour was considered highly shameful, and perhaps this has not changed that much since WWII. That would explain why the Japanese are saving and saving, in a situation where we in the West would long ago have begun getting rid of cash and bidding up prices of things to the moon. Their behaviour is not our behaviour pattern.

The thought has struck me, that the final outcome of this Japanese persistence in accepted patterns of behaviour, will be a TOTAL DISASTER for Japanese culture, because eventually, the Japanese will lose, with the purchasing power of their accumulated bank balances, all faith in their Authorities. And when that happens, all hell is going to break lose in Japan together with the loss of confidence in everything that Japan stands for.

Hey, does anyone know about the National Republican Congressional Committee, in Washington DC? And the Business Advisory Council?

(I know, I know, I'm a dummy in civic matters.)

If anyone knows something about this organization, and committee, I'd be grateful for any info.

National Republican Congressional Committee - provides financial and political support to Republicans running for the House of US Representatives.

I'm going back in to see what else I can find out. (!!!)

Beowulf #47421

In answer to your question about uranium producers, there are some still around. Cameco (CCJ) engages in the exploration for and the development, mining, refining and conversion of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. It also explores for, develops, mines and sells gold. Cameco is still in the uranium mining business. Another interesting company that I had stock in is Usec (USU). They are the world leader in the sale of uranium fuel enrichment services for commercial nuclear power plants. Uranium enrichment is a critical step in transforming uranium into fuel for nuclear reactors to produce electricity. I know that recently there has been a lot of discussion about implementation of a national nuclear power generating program. This will be a tough sell, even if a lot of people are inconvenienced with rolling blackouts, etc. There have been a lot of scare tactics over the years, and with nuclear breakdowns such as Three mile Island in Pennsylvania where the containment safeguards prevented disaster and with the outright disaster of Chernobyl in the Soviet Union where there were few safeguards, as well as propaganda films such as "China Syndrome", it does not appear that nuclear power will come to a town near you anytime soon. Unfortunately, there is still significant opposition to nuclear power in the US. Japan and France have been able to mitigate their power needs with several nuclear power generating facilities. Who knows, perhaps someday nuclear fusion will become a viable option. As it is, Duke Energy (DUK) has been buying nuclear power plants over the last few years. An expanded nuclear program would go a long way to achieving some independence from foreign oil. BTW, my youngest brother is a nuclear physicist who got his start as a nuclear engineer in the Navy and has since went on to get his Ph.D. in Nuclear Physics. He currently works at the DOE. As far as solar panels are concerned, they have come down in price and could probably become more cost effective for homeowners if electricity prices continue higher. The old solar panels were not of high quality and required some maintenance. However, I understand that some manufacturers have come a long way to improve their product. Astropower (APWR) has enjoyed a resurgence of sales and a higher stock valuation as well. Unfortunately it does not address the issue of power for many of the heaviest users in industry. Personal solar power units could definitely help and if prices are lowered, it could convince more people of the benefits.



Tedw #47370

Thankyou, I do hope you're referring to PETA (People Eating Tasty Animals). ;-)


ORO #47388

I understand where you're coming from with regard to the Alaska Initiative. I think that government involvement is inevitable. My point was that if there is going to be any effort to explore and produce NG and oil from Alaska, or anywhere else for that matter, then they had better get off their duffs and get to it. I think that it's already too late to avert a severe energy shortfall no matter what. I would suspect that the government would auction leases in ANWR as they do now in the Gulf Region. Anytime there is a way to profit from something, the FEDs will be there with both hands held out.

Hydroman #47505

Interesting post. Some of the best tasting tomatoes that I had other than vine ripened tomatoes, were hydroponic tomatoes. You simply can't find any decent tomatoes at a supermarket. I used to subscribe to "Mother Earth News" a few years ago. They had some good ideas on self-sufficiency. I'm not even sure if the magazine is still published but I enjoyed reading how many people were able to become self-reliant.
View Yesterday's Discussion.

http://pub38.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=2371.topicBlack Blade: I found this on another site. It is a good synopsis that demonstrates the problems in Kalifornia are far ranging. They are far from being "out of the woods" as far as energy needs are concerned. The lower NG prices today are based on the assumption that there will be warmer weather. The point missed by most everyone is that Kalifornia and many other parts of the country will be sucking up energy this summer. Not to mention that virtually all new power plants are NG-fired. That alone will further stress the NG supply. Next winter could be a disaster in the making.



California's power grid and transmission lines also must be upgraded to meet the state's rising energy needs, according to analyses

By Rick Jurgens TIMES STAFF WRITER

Even with new generation plants under construction and passage of a $10 billion plan to finance electricity purchases, California's "deregulated" energy market still is likely to be visited by power shortages and their familiar companions, rolling blackouts and higher prices.

That's because the state's power grid remains vulnerable to summer days that are too hot, winter nights that are too cold and weather patterns that deliver too little snow and rainfall to fill the reservoirs that supply water to Western hydroelectric plants. And California's network of transmission lines that move electrons from region to region also needs an expensive upgrade.

That's the view of the state's restructured electricity industry that emerges from studies by analysts, including some from the California Energy Commission, a state agency that monitors the energy markets and issues power plant permits. In the brave new world of electricity, problems defy obvious explanations -- too many computers, for example -- and easy solutions.

With the passage of a 1996 law, California set out to dismantle an electric industry legal framework first established in 1912, one in which regulated monopolies generated, transmitted and distributed power. The new system relies on private power generators to make profit-driven decisions about operations and whether to invest in new plants or upgrade existing ones.

Restructuring promised a more efficient, more innovative and less costly electricity system. But the promised benefits came with risks to the nation's most populous state and the world's sixth-largest economy. Already the changed system has threatened the budgets of residential users, raised operating costs for industry and chilled the state's business climate.

"Electric reliability in Western countries is the hallmark of the economy," said Doug Stevenson, a Boston consultant who worked in Ukraine in 1995 and 1996 as that country tried to upgrade its electricity system and end its reliance on the dangerous Chernobyl nuclear plant.

"When you lose reliability of electricity, you lose much more than a few minutes (of work) on your computer."

'Deep trouble' in summer

Things still look grim in the near term. "We are in deep trouble this summer," said Severin Borenstein, director of the Energy Institute at UC-Berkeley. Expected peak demands for electricity will be 50 percent higher than those that have recently pushed the state into daily Stage 3 alerts. In Stage 3 alerts, total generating capacity exceeds expected peak demand by less than 1.5 percent.

The Energy Commission expects there to be enough power for peak demands during the hot summer months, when air conditioners soak up electricity. The commission estimates that about 50,000 megawatts of generating capacity will be available to the California Independent System Operator's grid, while peak demand will be 47,000 megawatts to 50,000 megawatts, depending on the weather.

So far this winter, the weather gods have not been kind to West Coast electricity users dependent on the region's hydroelectric dams to help meet summer peak demands.

"The Columbia River Basin (is) snow-starved," said John Harrison, spokesman for Northwest Power Supply Council in Portland, Ore. "We are worried about having enough power to meet our own needs, let alone have a surplus" of power to send to California, he said.

Reservoirs are near the lowest levels in 60 years, and some of the stored water will be released to support the salmon and steelhead migrations, which begin in mid-April, he said.

Higher electricity prices and dry reservoirs in Oregon and other hydropower-reliant neighboring states that historically have exported power to California won't put them in a generous mood if power runs short, Borenstein said. "We are the ones who are going to eat the shortage," he said.

New generating capacity won't end the crunch right away. "California's energy crisis, absent mild summer and winter weather, likely will not go away until 2003," said Michael Schaal of Energy Venture Analysis in Arlington, Va.

But Karen Griffin, the Energy Commission's electricity analysis manager, said existing hydroelectric capacity should be available to meet peak demand on the summer's hottest days, as long as water is conserved by relying on other generators on non-peak days. Still, power will get to California only if generators and wholesalers sell it here, she said.

Market power

In 2000, rising prices sparked criticism of the new California markets, where wholesalers sell electricity to utilities. Generators and traders were accused of withholding electricity, using "market power" to force up prices.

Many observers saw evidence of such withholding in the loudly ringing cash registers of power suppliers to the ISO grid, where most California power flows. Total wholesale revenue for 2000 rose 276 percent, to $28 billion, from $7.4 billion in 1999 -- even as total consumption rose only 5 percent. Spot market prices reached $4,000 per megawatt/hour, far above the 1999 average price of $33..

An investigation by the Federal Energy Regulatory Commission, which oversees wholesale power markets, concluded that rising fuel and environmental costs, scarce supply, defective market rules and "some attempted exercise of market power" were all factors in summer price spikes. A follow-up study issued Friday found no evidence "inherently suggestive of a pattern of withholding" in November and December.

Borenstein said the market needs firm price caps to prevent future price surges. Such caps can be set high enough to avoid discouraging new investment, he said.

But a FERC staff report issued Friday said price caps would interfere with market operations and could be implemented only after "time-consuming and contentious" proceedings.

Supply and demand

Some observers say California's booming high technology economy caused the recent crisis. For example, Matthew White, a Stanford professor and utilities expert, said there was plenty of generating capacity as recently as 1996 and that the current crunch came after "dramatic and largely unanticipated growth in electricity demand."

But Energy Commission analysts say that electricity demand in the past year hasn't exceeded forecasts. "Current 'unexpected growth in energy use' from all sources was actually anticipated and foretold as long ago as 1988," a commission release said in December. Spokeswoman Claudia Chandler said that tracing the current crisis back to high tech users is an "urban myth."

In 2000, electricity consumption grew 4 percent, only about half of the 8 percent rate in 1984, which was the highest in the past 20 years, according to the Energy Commission. Industrial usage was up only 2 percent last year, half of the 4 percent increase in use by residential customers. The 2000 peak demand of 53,300 megawatts was below the 1998 peak of 54,700 megawatts and within the range of forecasts, the commission said.

Still, power plants weren't built to meet the growing demand. Only about 1,000 megawatts of additional capacity came on line in California in the past decade.

No single culprit holds the smoking gun of responsibility for the lack of investment in new generators. The state's sagging economy during the mid-1990s discouraged new investment. More popular scapegoats, especially for power developers and conservatives, include the state's strict environmental standards and a permit process that takes longer than that in other states.

But Borenstein said that since 1996, when the restructuring law passed, a bigger factor has been uncertainty about what rules would govern electricity competition.

At last, new power plants are coming. Including six plants already under construction, nine plants with 6,300 megawatts of new capacity have been approved and are scheduled to be on line by the end of 2003. Permit applications have been filed for another 12 plants with 7,600 megawatts, although that includes some upgrades of existing capacity.

Calpine Corp. of San Jose expects to open two new 500-megawatt plants, including the Los Medanos facility in Pittsburg, as early as the beginning of July, said Bill Highlander, a company spokesman.

The company remains "bullish" on California, where it eventually hopes to own at least 8,000 megawatts of generating capacity, although it would like to see the permit approval process shortened, he said.

All in all, the Energy Commission sees relief coming. "If 11 large power plants are put into service between 2001 and 2003, there would be more generation available than load growth requires over most of the ensuing decade," a February 2000 study concluded.

But commission analysts worry about a boom-and-bust cycle, in which high electricity prices attract surges of investment, then resulting excess capacity drives down prices and discourages any new investment.

"Future generation resource additions will not occur in a smooth, even pattern, but will more likely occur in a cyclical pattern, resulting in periods of excess and lean generation capacity," according to the February 2000 study.

But after years of stagnation, California's electricity developers don't see much near-term danger of overbuilding. All the approved capacity would increase in-state generating capacity by only 13 percent.

New power plants alone won't cure the state's electricity ills. Avoiding a power crisis in a restructured market will require investment in new transmission lines that can be used to send electricity throughout California and the West as demand rises and falls in different regions.

Limited capacity on the Path 15 line connecting Northern and Southern California has contributed to recent shortages here, and a 1996 outage on lines connecting California to the Northwest caused major problems. Public Utility Commission President Loretta Lynch estimated that new transmission lines will cost at least $1 billion in California, and she said it isn't clear where that money will come from.

Lower reserve margins

One likely side effect of restructuring is a long-term loss of operating reserves -- generating capacity that can be fired up when there are unexpected increases in demand or reductions in supply.

"Reserves will be lower in a competitive market as compared to a regulated market because of economic pressure to use resources more efficiently," the February 2000 Energy Commission study warned.

Reserves protect the power grid against damage that can occur almost instantly if total electricity load exceeds the power generated. A gradual increase in load beyond capacity causes a brownout that damages electric motors, such as refrigerators, and electronic equipment, such as computers, White said. A sudden loss of generation triggers circuit breakers throughout the grid, causing widespread blackouts that are costly and time-consuming to restore.

Chandler, the Energy Commission spokeswoman, noted that the cost of plants to provide reserves has historically been borne by ratepayers.

"With all the privatization of the generators, what entity will absorb the cost of this insurance policy?" she asked. As a regulated monopoly, the reserve margin -- the proportion of extra generating capacity available over peak demand -- in the California grid typically ranged from 15 to 20 percent, according to the Energy Commission. But commission analysts project that private investors will aim for a reserve margin of 7 percent.

Borenstein said the physical grid can be protected with reserve margins that low, but Schaal said a margin of as much as 18 to 20 percent might be needed to prevent price gouging.

"Declining reserve margins have opened the door, at least to some degree, to manipulation of the power markets," he said.

Restructuring payoff

Restructuring advocates promised a more efficient electricity system with lower costs. Maybe those promises will be kept, but not without some pain.

"Regulated investor-owned utilities in the United States have done a reasonable job of efficiently generating power, given their portfolio of generating assets," said Borenstein and James Bushnell, another UC-Berkeley professor, in a 2000 paper. "The prospects for short-run efficiency gains on the supply side of this industry are quite modest."

But the pre-restructuring utility rates reflected the costs of running expensive nuclear and alternate-fuel generating facilities built by utilities with the approval of state regulators. "What is 'broke' in this industry is the process that produced those poor investment decisions," said Borenstein and Bushnell.

And once the financial mess is cleared up and a functioning market system is put in place, a restructured electricity system could be made reliable, said Griffin of the Energy Commission: "Physically, it's a solvable problem."

Hi Panda,
OS refers to the Operating System (Win98 in your case)

On the poverty issue, "poverty" really needs a tighter definition, yes?
One can't compare a "poor" (say) Chinaman with a poor American as there are different forces at work in each case. The "real" difference is more a question of degree of contentment with their "lot".
The poor American is indeed the poorer as he watches the world pass him by at first hand, while the financially poorer China (oblivious to a large extent of his plight) goes about life in ignorant bliss.

One more thing - Why is it that, in the 100 odd years since "Britannia ruled the Waves", Brits have not outgrown their Superiority Complex?
Not meant personally ol' bean.... and DO keep posting.

The superstate is history, says sceptic at EU's heart

The scholar making waves in Brussels talks to
Ambrose Evans-Pritchard

TEN years ago, Frits Bolkestein was the pin-up boy of
Holland's Euro-sceptic movement, reviled by the Left for
his Thatcherite views.

Now this polyglot Greek scholar, mathematician and oil
man holds one of the most powerful jobs in Brussels -
single market commissioner. And he is starting to send
shockwaves through the system. Not content to press for the
privatisation of everything from post offices to pensions,
he is calling this week for an end to the idea of tax
harmonisation in the European Union.

He says the EU should stop meddling in matters best left to
the nation states, such as social affairs, culture and
education, if it wants to salvage its credibility and avoid a
populist backlash. For good measure, he adds that French
pre-eminence in Brussels is finished.

In an interview with The Telegraph, he said Britain's
Euro-sceptics were out of date in thinking that the EU
system was rigged against the Anglo-Saxons, or that it was
moving towards a federal superstate. However, he
acknowledged that there was still "a danger of a creeping
process, of more and more things becoming the subject of
legislation in Brussels".

He said: "Federalism is something we should forget about,
because it is not going to happen. When we enlarge in
Eastern Europe, we will absorb the union states which
have vivid and sad recollections of supra-national rule
from Moscow. They have regained their sovereignty and
their independence.

"The thought that they would voluntarily subsume their
national identities in a European federation is an illusion.
The Poles are not going to like that. Nor the Czechs." Mr
Bolkestein said the Franco-German axis was breaking
down as Berlin found its own voice and embraced,
unsteadily, perhaps, the free market, pulling away from a
western neighbour still in thrall to the outdated concepts of
state control.

What was emerging instead was a radically different
Europe that resembled the "concert of powers" of the 19th
century where Britain could play its old role of power
broker. He said: "We're facing a period of shifting
alliances, and that enables Britain to lend its support to
whichever party would serve British interests best."

But he cautioned that this should not be confused with a
return to Splendid Isolation, where Britain intervened only
to prevent the emergence of any single, dominating power
on the Continent. Mr Bolkestein said that role was now
played by the United States.

While Mr Bolkestein admits that the European Central
Bank, as well as the European Court of Justice, has a
"federal" character, he says that it does not follow
automatically that the euro will force further moves
towards federal integration.

He argues that Economic and Monetary Union can be made
to function along the lines of the gold standard between
1870 and 1914 when the major powers were locked
together successfully in a single currency system without
having to surrender political control.

Mr Bolkestein became embroiled in European politics in
1991, as leader of the Dutch Liberal Party, when Brussels
tried to ban tobacco advertising. "Tobacco was a legal
product, and the union was subsidising Greek tobacco
farmers," he said. "I started to ask myself why on earth was
the union trying to ban advertising. I felt this was a matter
for the member states."

He said that in the old days the European "system" was one
of ever-closer union, and the acquisition of ever-greater
powers, by a process of stealth. "We decide on something,
leave it lying around, and wait and see what happens. If no
one kicks up a fuss, we continue step by step until there is
no more turning back."

That game must be ended, said Mr Bolkestein. If it is not
stopped, the EU will lose its legitimacy and "implode" the
next time it runs into a crisis.