Tuesday, January 25, 2011

Advance Oztrailier Fair (or pretty reasonable, anyway)

For those of you who have the misfortune to not be Australian, today is Australia Day. It is the day when our nation pats itself on the back for being the best place on Earth, full of the best people, who are full of themselves. By mid-afternoon, a good percentage of the population will also be full of alcohol, which is supposed to indicate some kind of macho male superiority in the males: I do not know what it indicates in the females. Sitting in front of the telly, watching our favourite sports, eating fatty food and drinking high-carb beverages, we congratulate ourselves on being a land of bronzed and fit pioneers who can ride horses, raise cattle and shear sheep.

It is all hogwash, of course. Australia is about the most urbanised country on the face of the planet. The number who really can ride horses, raise cattle or shear sheep is vanishingly small. In fact, the fraction of the population having any knowledge of important survival skills, like gardening and how to wear an Akubra hat, would scarcely rate a slice on a pie-chart of national aptitudes. We can all drive cars, however, because the distances involved in getting anywhere interesting from anywhere else make walking or cycling the pastimes of the lunatic fringe.

Our recent tragic floods have galvanised those involved into great acts of generosity, supporting each other with what we Okkers term 'Mateship'. Now, mateship is a vague catch-all phrase covering anything considered noble in the spirit of humanity. Give a stranger $100 in normal times and you are suspected of being a deviant, but give a stranger $100 now and you are regarded as a Good Bloke (or Blokette: mateship is not gender-specific).

As is the way of human nature, there are some who are taking unfair advantage of all the handouts and generosity, but we speak of them, if at all, in the most scathing terms, as Bludgers. The Bludger is the lowest form of life: lower than the cockroach, lower even than pond slime. The Bludger is too lazy to expend effort to get ahead and prefers to sit back while others do all the work. This is not the same thing as the Battler, a person who has little and is doing it hard, but (at least in this version) is nobly uncomplaining. The difference between the Bludger and the Battler is that the Battler enjoys the dignity of being seen to be deserving of a helping hand. Battlers do their best with what they have, in spite of whatever handicaps stand in their way. Bludgers just expect others to take care of them and constantly have their hands out, wanting something for nothing.

Australia Day is all about honouring The Mate, sanctifying The Battler and trying to stifle The Bludger. The trouble is, each of us is partly all of these things. The times ahead will be interesting, for the effect they have on the relative proportions each of these national traits come to occupy in the body politic. When energy becomes fearsomely expensive, bludging may become unprofitable. It will become a case of "work or starve" for most of the population and the few who are able to be carried by the labours of the many will have to justify their existence, in ways and degrees unheard of at present. Even mateship may become unfashionable, in a society where getting enough food for myself and my family could be a higher priority than looking after the battlers.

Nobility of spirit may be the luxury of an affluent society. The Battler may be the eventual winner in our game of survival, where a willingness to work will be more important than the mere possession of labour-saving technologies. An axe will be more valuable than a pen; a horse-drawn buggy will have more value than a fossil-fuelled vehicle. An understanding of the seasons will pay better than a specialisation as a banker; knowledge of soil fertility will feed more mouths than having a thousand followers on Twitter. Wearing out the knees of your jeans will become more socially acceptable than wearing out the seat of your best trousers. Washing clothes using river stones will be more affordable than stone-washed denim.

As we celebrate Australia Day, I wonder how many more there will be before the crash. Carry on drinking folks, carry on over-eating, carry on being life's spectators. As for me, I have to go out and weed the garden.

Wednesday, January 12, 2011

A small sample of what is to come?

Here in Queensland, Australia, we are in the midst of the worst flood crisis in recorded history. Lives have been lost. Billions of dollars will be needed to replace and repair the damage to property and infrastructure. The city of Brisbane, population two million, has a drowned CBD and thousands of inundated homes today. In Ipswich, near Brisbane, the Bremer River rose 19.5 meters, or 64 feet in American money and flooded huge areas.

Out here in rural Queensland, flood waters have devastated many towns and isolated others. My home town has been cut off for days and supplies are running out. Milk, bread, flour, all the basic essentials have disappeared from the shelves of our four supermarkets. Empty shelves, empty bakeries, many shops closed. By some miracle, the electricity is still on and broadband is still available.

Petroleum products are running out, because of panic buying. How do I know it is panic buying? Because, with all the roads closed, there is nowhere to go! Queues were long at all the pumps yesterday and 'Sold Out' signs were starting to appear.

What does this tell us?

For one thing, it tells us that scarcities will be made worse by hoarding and panics. For another, it tells us that communities have become utterly dependent upon reliable shipping and road transport to function normally for more than three days. Thirdly, it makes us realise how valuable our larder and fuel supplies become, which makes them attractive targets for those who face doing without.

In case you were concerned, we are doing OK. The freezer is full, the pantry is full and we have electricity. For now. If we are prudent, our supplies could last us a month, although losing electricity would be a big hit to our fortunes. But it does give us furiously to think. We are better off than many, because we had just completed our monthly shopping, but it is only by luck that we are this well prepared.

We are not prepared for totally doing without liquid fuels or electricity for more than a few days. We are not prepared to be self-sufficient for long periods. Like most people, we are not prepared for a permanent change to our expectations of life's essentials being in bountiful and cheap supply.

This current crisis will soon be over and people will become complacent once again. Until next time. Until the big one hits. Until the coming crash.

Philosophy prospers with a dry bed and a full stomach.

Wednesday, January 5, 2011

Will we fall off a cliff, or stumble down a slope?

This morning, the oil price reported at www.oilprices.com.au is $90.47, with the range for the twelve months being $66.50 - $90.47. It doesn't really matter which currency we use, or the oil market we watch, because it is the long term trend which tells the story. Oil is at historically high prices and there are no economic indicators which seem likely to place downward pressure on the market. The slow-down in the world wide economy is acting as a mild brake on consumption in some countries, but in the developing economies of China and India, the foot is still firmly on the gas pedal.

We know the age of cheap crude oil is over. We know demand is increasing. Therefore, we know that prices will continue to rise. That means the price of fuel for cars, trucks, aeroplanes, ships and tractors will continue to rise. The cost of generating electricity and heating the home will rise, where they are dependent upon oil. Railway locomotives will cost more to run, whether they are diesel or electric, so rail freight and passenger transport prices must rise. The cost of growing or mining primary products, transporting raw materials, manufacturing goods, transporting these to shops and even hauling them home is going to rise, with the rising price of oil multiplying the problem at every level.

As consumers, we will have to demand higher wages, in order to pay the increased price of everything we consume, which will, in turn, force prices up. Those dependent on welfare, or on fixed incomes, have been the first to suffer, as their ability to survive is steadily whittled away. In many cases, their incomes are increased each year in line with the official inflation rate, but this chapter of Dr. Chris Martenson's 'Crash Course' should make it clear that the official figures do not necessarily reflect reality. If Dr. Martenson is right, the poor, the weak, the huddled masses are being officially victimised. How does that make you feel? Remember what mass poverty did in revolutionary France, in revolutionary Russia, in Germany after the First World War. If you are not concerned about this, you are probably part of the problem.

We are in a time when the prosperous middle classes of developed economies are suffering from the US housing bubble and the global financial crisis. World economies are dependent upon these middle classes to consume the goods and services which contribute to growth. When they stop buying, the whole structure of international finance starts to crumble. We have seen this happening before our eyes in our nightly news and financial pages, but have we realised the full implications?

I think not. I think most of us are happy to stick our heads in the sand and trust that "they" will sort it out. The trouble is, "they" have lost control. "They" can only meet debt by going further into debt, adding fuel to the fire. "They" can only oil the wheels of commerce by printing more money, effectively devaluing every dollar you already own. If it were possible to get out of debt by borrowing more money, everyone would be doing it and many have tried to do it by using one credit card to pay another. It doesn't work for families and it doesn't work for countries. Sooner or later, no more credit will be available and debts will have to be repaid. When there is nothing in the piggy bank, the borrower will default and the value of the debt will evaporate.

This is the real danger we face: the collapse of wealth. The rising cost and increasing scarcity of crude oil is important to the equation, but oil will not be our downfall. Insupportable debt is what will write the epitaph to Western greed.

When it happens, it will either happen suddenly, with catastrophic results, or it will be a slow decay from robust youth to feeble old age. Personally, I expect debt defaults to start as a trickle and turn into an avalanche, which will cause the relatively rapid destruction of the world we have thought was stable and have taken for granted.

Where will you be when the avalanche comes?

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