Oil Production Has Surpassed the Tip of the Bell Curve

Saudi Arabia at one point represented 25% of the world's oil production.  They still claim to have mass amounts of untapped oil reserves and to have that 25% margin, which keeps them at the forefront of OPEC.  However, other actions in the region have proven otherwise, causing skeptics like me to uncover the real truth of where we stand as a global community in the face of unsustainable oil production, using Saudi Arabia as an example.

The oil scare of the 1970s gave us a small glimpse of what we are going to be faced with as oil scarcity increases.  When OPEC members retaliated in the most effective way possible in the 1970s, by pulling back oil sales to the U.S., utter chaos broke out all over the country.  Oil was so scarce that there were lines for miles at gas stations that had little gas to begin with, and they charged a fortune for it just to break even.  Not only did the price of gas increase, most everything went up significantly as we all know that most products are made from oil.  Again, it was utter chaos.  Eventually we began to cope with the chaos at least at the gas stations, assigning specific days and times for gas eligibility via license plate numbers.  Sounds like one aspect of a civil solution for a temporarily chaotic situation, but what if the situation is no longer temporary?

One of the most blatantly obvious signs that oil has been tapped to its capacity in a region is when that oil producing country starts drilling offshore.  Offshore drilling is significantly more expensive than onshore drilling and requires an astonishing amount of energy to drill and transport.  Going back to Saudi Arabia, they may be the leading oil producer at present, but a significant amount of that energy goes straight back into their oil production because they have begun to drill offshore.  There comes a point when drilling is completely useless, when the costs surpass the profits.  That time has nearly arrived and now it is not a question of profitability, it is now a question of sustaining a global oil-dependent economy.  Our addiction to oil has faced us with the realization that it's time to kick the habit because we can no longer afford it.

As offshore drilling further proves the case that oil production is on the decline, solutions should be brought forth in order to better handle the issue we similarly faced in the 1970s.  However, hardly any alternative energy production projects have taken place that can compensate for the loss in oil.  The U.S. alone has so much land mass that the alternative energy production possibilities are endless.  The most promising alternative energy sources are distinctively wind and solar.  Other propositions like clean coal, tidal, and geothermal are not sustainable nor can they produce an amount of energy to overcompensate for the amount of emissions and costs to distribute the energy to an entire population.  Clean coal is insufficient because its function is to filter the emissions of coal to remove CO2 from being released into the air.  However, these filters are disposed by burying them into the earth only to have that CO2 displaced and available to emit at a later date as it surfaces. Not to mention the danger of coal mining and mistreatment of workers, coal all around is a very lousy solution.  Tidal is not sufficient because there are only so many cities along the coastline, it's expensive to build, and it's expensive and difficult to transport the energy to the inland cities.  Lastly, geothermal on paper is a fantastic alternative and is what some Northern California cities actually currently use, however building and implementing a facility to produce geothermal energy is extremely expensive and timely to the point where a cheaper and more efficient solution would have to come into play.

What very few people understand is that when energy is produced from a natural source, most of the energy is only available right away at the location it was produced.  For example, an argument I have heard for years is that a nine square mile solar panel development in the Mojave Desert would provide enough energy to fuel the entire nation.  This technically is true but is unfeasible because of the costs and amount of energy lost when attempting to distribute that energy to far away cities, therefore California would be getting most of the energy produced from the source at the cheapest price.

For the U.S., energy production power needs to be withheld by each state.  Each state must weigh the options of wind and solar energy and develop a proper proportion of the two energy production strategies that would produce the most cost-effective results to accommodate their state.  It seems so simple, yet implementation of this is at a snails pace. Lobbyists anyone?  If any of my readers have the opportunity to invest any time soon, I highly recommend alternative energy!  It will contribute significantly to the well being of America's energy dependence and the return on investment is sure to be great as alternative energy will be in high demand as oil prices rise.

Central Banking, Fiat Money and Our Future

I must begin my blog with what I feel is the biggest and most influential aspect to our global economy: central banking and their distribution of fiat money. The average person has no idea what fiat money is, and what it means to a civil society.  Fiat, by definition, is "an arbitrary decree or pronouncement, esp. by a person or group of persons having absolute authority to enforce it: The king ruled by fiat." (http://dictionary.reference.com/browse/fiat).  That definition alone should be raising your eyebrows.  What does fiat money mean to us?  Fiat money is essentially a fake decree of currency declared as legal tender by a government.  It's not real.  It is a number on a computer or a a piece of paper and we decide to call it cash and give it value.  Can you eat cash?  Can you physically use it to build a house?  No.  Therefore, it has literally zero value other than what the federal reserve says it has.  While reading this, let's keep in the back of our minds who currently and have always run the Federal Reserve: a board of insanely rich Anglo-American men.    

The concept of fiat money directly stems from central banking, the most specific reason the English left England and came to what is now the United States.  We continued to resist central banking following the mass immigration, as the Central Bank of England kept pressuring the colonies to bank under their centrality.  Central banking to the immigrating English was the root to all the evil that the state imposed on it's society and essentially broke the camels back when it extended England's oppressive hand too far.  The most controversial and detrimental aspect to central banking is how it withholds so much monopolistic power in fiscal policy yet does not answer to anyone within government, granting it with too much power.  However, one thing led to another and the powerful influence in favor of central banking ultimately prevailed via a couple different central banks throughout the 1800s, I won't bore you with the details.

President Andrew Jackson was a maverick most of his political career, advocating against central banking for the same reasons a lot of the English did.  He never supported fiat money and advocated for the use of "hard" currency, currency that is backed up by gold and silver which holds something of value and induces security within a currency.  However, economic recessions created instability and panicked Americans looking for a solution, and that solution was central banking.  The Federal Reserve Act was passed in 1913 by Woodrow Wilson and the dollar was backed by gold and silver, at least having one thing parallel with Jackson's banking theory.

Since that year, the dollar has literally devalued 96%.  Yup, the dollar now only withholds 4% of its value.  This devaluation went on a speeding train when Nixon removed the gold standard in the 1960s, raising the question that he deemed valid, "If we can have as much money as we want in the market, why not?  More wealth for everyone!"  What a rookie mistake (among many during his administration) and since this move the dollar has been on a suicide mission as more and more money is pumped into our markets, making the dollar weaker and weaker as induction persists. 

So, as the theme of this blog persists, what does this have to do with the global economy?  More importantly, what doesn't it have to do with global economy?  The history of central banking has risen awareness of its potential detriment.  The Federal Reserve, while it does conduct actions with the federal government, essentially tells all of the world how many dollars will circulate in the global economy thus depicting its value.  As (once) the most powerful and successful economies in the world, many countries pegged their currency to the dollar and reaped incredible benefits from that for a long time due to intricate and different economical factors, as seen with China and the yuan.  Now, the dollar is so weak and getting exponentially weaker that no country wants to be pegged to it otherwise their currency will be joining the dollar on this suicide mission.  Now, this action is reaping incredible benefits.  The Wallstreet Journal reports that the Chinese yuan is on an increased value rampage against other major currencies, reported in their December 19th article China Yuan Likely to Rise Vs Major Currencies in 2011-Report (http://online.wsj.com/article/BT-CO-20101219-703900.html).


What does this crash of the dollar potentially mean for the future of the global economy?  A one world currency for a one world economy.  Exchange rates, inflation, value, etc. all make having multiple currencies in the market that much more confusing and insecure.  This was the basis for the progressive idea in the formation of the European Union which induced one currency between now 26 countries, the euro.  What has this enticed the U.S. to dabble with?  A North American Union between Mexico, the U.S., and Canada with a common currency called the 'amero', the sister currency to the euro.   In other words, think of NAFTA on steroids.  To learn more about the amero, please refer to the book The Case for the Amero by Canadian economist, Herbert Grubel.  

It has been reported that the amero is already in print at the Denver Mint, yet has been hidden from public awareness.  Is it possible that this devaluation of the dollar could have been foreseen if not planned, in order to lay the foundation for a North American Union?  I have heard mixed opinions on this issue myself, and have yet to come to a decisive conclusion.  I am forever skeptical, though, of the Federal Reserve and their actions.  I will thoroughly research their intentions with the dollar so I can come to a conclusion of what this means for the future of America.  I beg each and every one of you readers to keep this knowledge I have conveyed to you in the back of your minds every single day, and make connections where you see fit whether it comes from a news source, presidential administrations, laws, etc.  NAFTA eradicated tariffs between the U.S. and Mexico which created tremendous economic opportunities for many U.S. businesses.  An NAU would only create more economic opportunities that span farther than just the Mexican-American border.  Consolidating economies also gives North America as a whole, rather than independent countries, a stronger presence in the global economy which was the main motivator for the EU in order to compete with the U.S. on a global scale.  If indeed the NAU is in our future, it would be advisable to prepare for such a change not only economically, but socially and politically.    


Want to make a difference?  Vote to audit the Federal Reserve! http://www.ronpaul.com/legislation/audit-the-federal-reserve-hr-1207/

Current Event: North Korea vs. South Korea's Provocation

North Korea has recently threatened a retaliation to South Korea's military drill on its Yeonpyeong island Monday, December 13th.  While this seems irrelevant to us Americans, it is far from that thanks to the increased interdependence that is globalization.  Heightened security in any region effects stock markets across the globe, as war typically involves a significant budget to be spent in the private and public sectors.  


As fear and potential retaliatory actions progress, so does the defense sector.  The United States alone plans on spending $743 billion on defense in 2015, which is a slow down in the budget when compared to previous years.  This represents 3.2% of GDP, which is a lot.  (http://www.defenseindustrydaily.com/Grant-Thorton-US-Defense-Budget-Outlook-for-2011-and-Beyond-06470/).  To get a better perspective, The United States has promised to dedicate .7% of GDP towards the Millennium Development Goals in order to contribute to the eradication of extreme poverty (those earning less than $1 a day), and has failed to meet that .7% goal literally every single year.  Military budgets in any given country overshadow all other aspects of a budget and are extravagant to say the least, and tend to overcompensate the private sector which results in a major impact in the global economy.

Recently since the tension has risen between North and South Korea, Asian stock markets were mostly lower.  This reflects a hit regarding South Korea's military drill, prompting fears of retaliation from their counterparts, North Korea.  This can pose as an opportunity for the private sector specializing in defense as they see another potential client in their near future via this confrontation.  At the same time when Asian markets dropped, Europe's stock market rose.  Possibly a connection?  Could be.  Only time will tell what this provocation by South Korea will really result in.  In the mean time the money-hungry, private defense sectors will be licking their chops at the opportunity to do business with either side, if not both.