First, the fact is the shitty economy has decreased our need for gasoline and diesel fuel. So it makes sense that the refineries--which were running over 100% of capacity at the economic peak of 2007--now produce an excess of fuel.
Second, it makes sense that the high price of gasoline has also kept demand down.
Third, the stupidity of adding ethanol to gasoline--I don't think that's as big a factor as the article wants us to believe, as "gasohol" has been available as a rule for a couple of decades now. Most gas stations (at least around here) offer nothing but E10, be it low-, medium-, or high-test.
"E85"? I don't know how much E85 sells around here. None of the gas stations I frequent has even one E85 pump. I know of one chain that sells it in this area, and the nearest station to the bunker in that chain that I know of is not less than six miles away.
Gasoline use is down 10% from the high point in 2007 and the US now produces more gasoline than it needs.
...so why the hell isn't gasoline cheaper than it is?
Look: oil companies make about $0.10 to $0.15 of profit per gallon on gasoline and diesel regardless of the retail price. Most of the cost of a gallon of fuel comes from refining, shipping, and taxes--taxes are the largest single chunk of gasoline's retail price--and there is precious little wiggle room.
Well, here's the interesting point: in 2007 we had to import refined fuels from Europe and other places, because we couldn't make our own. It is just possible that--despite our present surplus--we are still perilously close to the 100% capacity figure; and if that's the case, gasoline doesn't get any cheaper.
I'm pretty sure that demand has to fall farther before we'll see much of a change in prices.
The best idea to benefit the American consumer would be to emplace an export restriction on refined petroleum products--a simple tariff would do. Make it here, keep it here; that would force oil companies either to lower the price or reduce production.
Either way is good: if prices are lower, energy is cheaper. If they reduce production, we reduce our dependence on foreign oil, because all that gasoline that they're currently exporting means importing foreign oil.
...but Europe is not fixed, and if it blows up the market for gasoline will go to hell anyway.
* * *
Speaking of Europe it seems that the "solution" is to rewrite the treaty that created the Eurozone. Now all the countries will have to make sure their budgets adhere to a set of guidelines and rules.
President Nicolas Sarkozy and Chancellor Angela Merkel said their proposal included automatic penalties for governments that fail to keep their deficits under control, and an early launch of a permanent bailout fund for euro states in distress."We need to go fast." Sure, three months for an agreement and six to make it the law of the continent is fast...for government.
They said they wanted treaty change to be agreed in March and ratified after France wraps up presidential and legislative elections in June. "We need to go fast," Sarkozy said.
Italy, the biggest euro zone nation in trouble, offered a glimmer of hope that the bloc could halt a crisis that is threatening the survival of the common currency. Its borrowing costs tumbled after its new technocrat government announced an austerity program.
The big problem comes in when you realize that it is just possible they may not have six months.
It's been a week since some financial guru in Europe predicted the end of the euro "within 10 days" if something wasn't done, something drastic. I don't know if he meant ten sequential days or ten business days; but ten business days means they've got until Dec 13 to get their shit together.
Italy is following the same curve Greece followed. They've introduced austerity measures and all the markets said, "Hooray! Italy is fixed!"
...exactly the way they said, "Hooray! Greece is fixed!" about a year ago. A year later Greece is still not fixed, and even if the eurozone manages to keep Greece from dragging the entire continent under I fail to see how they can possibly prevent Italy from taking them down.
But if they manage to keep Italy from sucking them into the void, there are still Ireland, Portugal, and Spain to worry about.
The United States has decided to help by dropping its lending rates to European governments and banks. We're funneling our money into that nascent black hole, all in a desperate attempt to stave off a financial crisis that will end the socialist programs of all the Western governments simply because the cost curve for any socialist program is always an asymptote...and we hit the vertical part of the curve in 2008.
It can't continue. None of it--the "Great Society", deficit spending, Keynesian economics, social security, Medi$care, the feather-bedded "safety net", ObamaCare--none of it can continue because there is simply not enough money in the world to pay for it all. Not when we've spent the last 46 years paying for it by borrowing money.
While we're at it, DOOM!
Europe faces ten years of recession even if they avoid a financial collapse.
See, here's the problem: when you take out a loan, you are basically spending money you will earn tomorrow, or next week, or next year. Because you have spent that money, you don't have that money available for whatever you might wish to spend it on had you not taken out that loan; you must pay the loan back.
So, if I make $100 per week and decide to borrow $50 to buy some gewgaw that costs $150, I'll only have $50 left to spend out of next week's paycheck. I won't have $100 next week because I spent $50 of it this week.
If I borrow $50 a week for a year and spend $150 per week--even though I only make $100 per week--at the end of the year I'll be $2,600 in the hole plus interest. I can pay that loan back by cutting my spending back to $50 per week, and paying $50 per week to whomever loaned me the money; but my standard of living will decline while I pay back the money. I was living high on the hog for a year, spending 150% of my income, but thanks to that spending spree I've got to impose AUSTERITY on myself to pay back the money I owe. And because of the interest--however favorable the rate might be!--I will have to live under this austerity longer than I lived high on the hog. Depending on how much I can cut out of my weekly spending to repay the debt, of course, because that 50% figure is highly unrealistic; that would let me pay off most of the debt in a year. 20% or even 10% would probably be more realistic but you get to a point of diminishing returns that artificially extends the term of the loan.
Like with a credit card: if you pay the minimum payment every month it'll take you three years to pay it off, and at a typical revolving rate of 18% you're going to pay a lot of interest. (And the interest is compounded monthly, by the way.)
So that last link suggests that a collapse of the Eurozone is inevitable:
Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected....and the financial collapse will follow tout suite.
* * *
My plans for my money? I've been advised to pull the money out of the bank (at least some of it) and buy hard assets. It's not a bad idea; but I don't actually expect things to go so far to pot that the dollar will be worthless.
I'm betting on "Great Depression 2.0", to be honest. Unemployment will be about twice what it is right now and there may be times when the groceries stop moving, but if there's much civil unrest most of it will happen in the big cities (where most of the "welfare class" lives).
Is it going to suck? Most egregiously. Is it going to be the end of the world as we know it? If your world consists of "gummint s'posed to take care o' me!" then yes, it will. (These are the people who will riot.)
But if you have so much as a shred of self-sufficiency--if you've taken a few basic precautions and have thought about how you'll do things if you're out of electricity and money for a few weeks--I think you'll be fine.
It will be much better for all of us if Europe manages to avert a major catastrophe, but I don't see how they can...and even if they do, there are still a host of other similar problems all over the world. The crooks and their cronies have been running things to their benefit for far too long, and the result is going to be bad, one way or another.
* * *
Huge cache of old records found on Wake Island. It's all Air Force property, so don't think you're going to be able to score a bargain.
* * *
Wake me when you find a planet that's not 2.4 times the size of Earth. Oh boy! It's an earthlike world in a habitable zone around a sunlike star! It'll only have a surface gravity that's 2.4 times that of Earth's! Wear your workout clothes!
I can't get excited about this; I just can't. They don't know how dense the planet is; they don't know its mass--but c'mon, could a rocky world have a low enough density that it could have even an approximate 1G surface gravity when it's 2.4 times the size of Earth?
By the way--if the planet is 2.4 Earth diameters it'll actually be fourteen times the mass, now that I think of it. (Pesky "volume of a sphere" equation is 4/3 times pi times the radius cubed....) So if it's a rocky sphere with a skim of air atop the rock, the thing will have a surface gravity of some 13.81G and it'll be completely uninhabitable except for SUPERMAN!!!
And if it's a rocky planet of one Earth diameter with an extra-thick atmosphere it'll still be uninhabitable because, well, look at Venus.
...which is why I can't get excited by this.
* * *
"It's got to be dark matter! Nothing else makes sense and we have concensus! that it's dark matter! So this guy's a total loon!" Vox Day encapusulates a story about a theory that allows for the observed speed of galactic rotation while eliminating the need for dark matter.
We need dark matter to explain why galaxies don't behave the way we expect them to.
Problem #1: we assume that the distribution of mass in galaxies is uniform. Why? How can we be sure that it's not? And even if the mass is evenly distributed how does the gravitational pull integrate? No one has ever answered these questions when talking about the need for dark matter, as far as I know.
Problem #2: not long ago some guys figured out that the Milky Way galaxy is thicker than we thought it was. How does this affect the need for dark matter to hold it together?
Problem #3: we can see that the distribution of galaxies in the universe is not uniform.
Problem #4: if we assume the existence of dark matter, galaxies then become so massive that we then need dark energy to explain why the universe is expanding the way it does.
Look: the Earth's mass is evenly distributed within it, isn't it? There aren't huge voids in the middle of the planet, nor is there any super-dense central mass, yet we--standing on the surface at the equator--whip around it at 1,000 miles an hour without noticing any decrease in gravity (due to centrifugal force). That's because if you integrate gravity across the sphere, it resolves to a center of gravity that is a mathematical point. No matter where you are on the planet, there's a 1G pull right towards the center of the Earth.
(There are minor variations all over the world. The mass and density of Earth is not perfectly uniform. Neither, I suspect, is the galaxy's. The variations in Earth's gravity are miniscule compared to the magnitude of the primary vector, anyway.)
Our models assume that--because 99% of the mass of the galaxy is not concentrated at its center--we must have some other matter we can't see to make everything work correctly.
But a star at the edge of the galaxy is not sitting in the middle of the mass; it's at the edge...and the other stars exert gravity on it. Hold up your hand, fingers together, palm flat, and imagine it's the galaxy. Take a look at the end of your middle finger and say there's a star there.
How much mass is pulling it towards the center of your hand?
* * *
Education bubble is now bursting. Included in today's post because of the following:
The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we'll have more middle class people.This is exactly so.
But homeownership and college aren't causes of middle-class status, they're markers for possessing the kinds of traits -- self-discipline, the ability to defer gratification, etc. -- that let you enter, and stay in, the middle class.
Subsidizing the markers doesn't produce the traits; if anything, it undermines them. One might as well try to promote basketball skills by distributing expensive sneakers.
More goodness, and I agree with this 100%:
For higher education, the solution is more value for less money. Student loans, if they are to continue, should be made dischargeable in bankruptcy after five years -- but with the school that received the money on the hook for all or part of the unpaid balance.This means the end of schools such as my alma mater, DeVry "university", but that's not entirely a bad thing.
DeVry is a for-profit school; if I had not been a stupid kid I might have understood what that meant. They've got some good accreditation and people who graduate in their useful programs end up with solid knowledge, but the problem is that they are more focused on getting the money than education.
Take me, for example. I came out of that place with a degree and I know what I'm about. I learned enough there that I could write technical documentation on avionics--detailed circuit theories, starting only with schematics, explaining what the circuit did and how it worked. I'm good with electronics and can do just about any technical job involving computers and electronics that's out there. I could not have managed that without the education I got.
...but the degree is worthless. It doesn't get me hired, and even when I manage to get my foot in the door I am constantly having to demonstrate that I'm not an uneducated boob who took a few correspondence courses. (I actually had a boss--a totally clueless one, to be sure--ask me if I'd gone to a correspondence school. I'd been working for him as a contractor for nine months at that point, too.)
The situation that I'm in now--if that last quotation were how the law works, I'd be a lot better off than I am.
* * *
I'm going to be at the church a total of five days this week.
Sun: worship service
Mon: choir practice
Tue: Bible study
Wed: choir practice
Thu: therapy appt.
...about ready to ask for my own set of keys, here....