Oil & The Economy Collide

“There are too many ugly balance sheets,” warns one energy industry analyst, adding simply that “the group is not positioned for this downturn.” While the mainstream media continues to chant the happy-clappy side of lower oil prices, spewing various statistics about how the down-side of low oil prices is contained and the huge colossal massive tax cut means everything is awesome for America, the data – and now actions – do not bear this out.” – Zero Hedge

We all knew oil was an Achilles Hell. We all knew the economy was an Achilles Heel. Funny how we now see the two colliding. The currency war is really starting to come out of the shadows now.

Greenspan: Economic Problems Stem from Discounting the Future

I have been definitely doing that – discounting the future. Early in the talk he points to taxes & entitlements as leading causes of this global consensus, but I think it runs deeper. I suspect a fellow like Alan Greenspan would never say exactly he thinks at an on-the-record talk at a Council on Foreign Relations talk, so I’m sure there’s more.

I doubt he’d go down the rabbit holes I like to visit, but I’ll take a stab at it. I think the leading causes of uncertainty come from:

  1. East/West divide and the threat of world war. While war can be profitable for some, it’s not for most. As the BRICS rise they threaten the West’s hegemony. The US has deployed military assets globally. The BRICS continue to strengthen by leveraging production based economies. The timing and outcome of this tug-of-war is anyone’s guess.
  2. Centralization of power and the closing of free markets. As the rich get richer they naturally gain more power and control over the game… exactly like the Monopoly board game. At the end of that game there are only two players left and one quickly bankrupts the other – while all the loosing players just watch the last two try and destroy each other. That’s where we are today in the real world.
  3. Lack of global governance standards. I don’t think we need a world government, I think we need global governance standards so that all people can play on a level field. Right now we play on rocky mesa with the people on top holding all the cards but still needing the resources below the mesa. Globalization has given the people at the foot of the cliffs a view of the top, and they want that life too. Instead of going to war on a global scale we could choose to adopt a set of standards that restores fairness to the people of the world. I’m not describing communism or socialism; I’m describing rules that helps restore balance between the powerful and the powerless.

So to eliminate uncertainty we somehow need to prevent a global war, decentralize power, and establish global governance standards that allow the nations of the world retain their sovereignty while reducing the chances of future conflicts. To be blunt, uncertainty can be eliminated by positioning the world for peace and prosperity.

Until then we should discount the future. For the rich that might mean hedging bets through diversification – for the rest of us that might mean stockpiling bullets, beans, bandaids, and yes, bunkers.

Gazprom Begins Accepting Payment For Oil In Ruble, Yuan

The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan” – Zero Hedge

What worries me most about this Zero Hedge headline is that most Americans have no idea what this means, not to mention the impact on the value of the U.S. Dollar. If they knew… they’d be buying tangibles with cash and not new cars and luxury items on credit. Historic times we live in.

From Lloyd’s Blog: Getting Out of the Stock Market

Alternative housing guru and publisher Lloyd Kahn posted this on this blog. Food for thought.

“A friend of mine from college told me recently that he sold all his stocks, has the money in cash, and is thinking of getting FDIC-backed Ally Bank CDs.

I cut out these headlines from today’s New York Times business pages.” –  Lloyd’s Blog: Getting Out of the Stock Market.

It does make one wonder – how the heck is this mess is going to turn out. I suspect we’ll have to wait until after the (s)election side show is over before anything is really allowed to correct itself.

The Saga of the Debtors Prison Continues – More Bad News from Zillow

This bubble burst is one lesson I will never forget. Today I got my monthly report from Zillow in my email inbox. It brought more bad news. On the positive side I can already see some good indications coming in from elsewhere that say the economy is beginning to turn around. It just doesn’t look like it by looking at my home’s recently reported value.

Below is a screen shot of a report on Zillow.com for the Sacramento, California housing market. Looks pretty bad. You can also read the full report.


Below is a snapshot of my home, local market, and the national market. As you can see the Sacramento area has been hit very hard. My take is that this is what happens when McMansions go up like mushrooms and then the roof figuratively caves-in.


I’m no economist but while we see positive trends in consumer confidence and in other areas I don’t expect to see any real economic rebound until all our homes get a little less upside down. Too many Americans feel like they are stuck in debtors prisons. When people begin to feel less stuck I’m certain that overall consumer confidence will rebound and spending will return.

While this is sad for the rest of America, (more spending means more debt), it will have a positive side effect for those of us that are looking to downsize. We will be able to make our move, literally. Until then we sit patiently paying the piper for our past presumed prosperity.

(Sorry… I couldn’t help the allure of an awkward alliteration.)

My letter to those who banned The Story of Stuff

Below is my letter to the school administrators who banned The Story of Stuff. Please write a letter too. Read the call to action that inspired this letter.


The evidence is overwhelming and pollution and the economy are not partisan issues. No matter what personal or political beliefs each of us holds dear we’re forced to face these challenges together. We’re stronger together.

Humanity is consuming natural resources at an increasingly rate. Waste of all kinds is being produced at alarming rates. Pollution is spiraling out of control around the globe as nations require more energy and consume more natural resources to produce more consumer goods. But lets not focus on mother nature for a minute and instead turn to the immediate impact on humanity.

The economic meltdown was triggered by an over-extension of credit at every level. The abundance of credit fueled an artificial increase in the economy, like air filling a balloon. When the balloon popped, banks stopped lending money and corporations began to fail because the margin they had built their business on had disappeared. This collapse triggered repercussions throughout our economy. But all this should go without saying, we all know what happened.

The underlying problem seems to be that the American dream has shifted from real freedom to one built on visible material wealth. Borrowing money has become the norm. Mortgages, auto loans, and credit debt seem perfectly natural today and it’s almost unheard of that someone actually owns their home and is debt free. Over consumption has destroyed freedom through its reliance on debt. The majority essentially live an existence of voluntary indentured servitude simply because there’s no obvious alternative.

The Story of Stuff tells this story and quite clearly shows how consuming at an unsustainable level steals our freedom. The film is not about eliminating commerce but simply encourages us to do a better job of living within our personal and planetary means. By labeling The Story of Stuff propaganda and banning it from your school you are in effect condemning your students to a life of debt, not to mention a world filled with trash and a future full of trouble.

Please reverse your decision and give your students a chance. The Story of Stuff is not propaganda. It is a lesson in protecting freedom and our future.

Michael Janzen


I dreamt there were solar panels on every roof

Imagine a world connected by a decentralized power grid. If we began installing grid-tied solar panels on every roof now we might just win the race to peak oil too.

The infrastructure is already set-up except for a place to store the extra power… oh yeah electric cars! We could store all that spare electricity in our cars. Imagine an world with millions of electric cars running around. Things would be a lot quieter and yes we’d need to look both ways before we cross the street.

The truth is that electric cars and range-extended electric cars will be hitting the roads in 2010. Hopefully their arrival will coincide with an economic recovery so the companies building them will succeed.

I can dream right? :-)

Economic Victory Garden Planted

Our side yard had turned into a weed patch in the last couple years… we’ve been a bit busy with Katie and adjusting to being new parents. But this spring it seemed like the right time to get the garden going again. It took some hauling, cleaning, digging, and finally planting but now the our economic victory garden is in the ground.

What’s an economic victory garden? I like to think that it’s hope; hope that by becoming more self-sufficient we’ll be able to get through these tough times with fewer bruises.

They can be any size because they are really more about making positive progress. So even if all you have is a sunny kitchen window you can still have a nice little economic victory garden.

I will finish installing the drip irrigation as I have time over the next few days. I’d also like to replace some of our high maintenance ornamental trees with fruit trees too but I better focus on the dozen projects I’m working on first before adding another. Here’s how it looks with our first few plants. I’ll post more photos as things progress. Photo credit to Julia :-)