LifeItself

On Friday, 06 May, 2011, Professor David Summers posted on OilPrice.com an oddly emotional article,  A Look at the Serious Energy Shortages in India and Pakistan . Dr. Summers correctly points out that severe shortages of coal supply in India and Pakistan will not be quenched by imports from Australia, because China will outcompete anyone for the same coal imports. From our analysis it follows that China's coal production will be difficult or impossible to maintain at the current high level. And China's coal demand is skyrocketing despite attempts to reign in coal burning by their most inefficient industrial enterprises. Dr. Summers then goes on to say that the folks like Tad Patzek and Dave Rutledge have it wrong anyway, when they talk about the global peak of coal production and inability to satisfy demand that follows.   Well, here we are: Too much demand worldwide, and not enough supply. The coal price goes up, way up, and still not enough supply.  How does o...

Click on the image to see the full size version. Sources: World Settlement Bank , World Bank As an earth scientist, I deal with real resources, such as water, oil, natural gas or coal, and I am bewildered by the figure above. It shows that the sum of goods and services produced on the Earth, or the World Gross Domestic Product (GDP), is as large as credit default swaps, and 10 times less than the total face value of all financial derivatives, including the credit default swaps.  Therefore, in the global casino we have created, bets on all things in the world have exceeded the value of what we actually produce 10-fold.  So if only 10 percent of these bets went wrong, an equivalent of world's GDP would be wiped out.  And our clueless politicians are piddling with a couple of billions of dollars here and there.  Or our hapless Treasury is talking about controlling the "core" inflation. A credit default swap (CDS) is a form of insurance that protects a lender ...