Where is the US economy headed?

Comparing Japanese savings rates to -anyone's- is kind of silly. They save for cultural reasons, not economic ones. ;p

If you're going to bring up the Japanese banking industry, well, that's what people are talking about when they talk about weaknesses in the Japanese economy. A lot of that 5.6 trillion in assets is in the form of collateral on bad loans that is being put on the books at old (pre-bubble, usually) valuations, and isn't worth nearly that on the open market. This leads to capital starvation for new firms and slows down the economy, yadda yadda. We had a similar problem with the S&L crisis, but we bit the bullet, cut out the bad banks, and poured some money in to keep the system going. Japan hasn't managed to reform its banking system yet... 'cos, even they're better off than China in that respect.

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Japan has been working on those bad loans, and their economy is still the second largest in the world. They also own a good percentage of our government bonds. If that's trouble, I wish I had some of those.

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cyclops, here is the information on ANWR.

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/summary.html

The above says there is a 95% probability of 5.7 billion barrels, a 5% probability of 16 billion, and a mean of 10.3 billion barrels, which could translate into 600,000 to 1.9 million barrels per day at peak production. Production would last decades at some level, and would serve to replace and compliment the declining production of the North Slope.

You will notice that environmental groups or opponents always quote the 95% probability, but anyone that understands oil exploration and statistics knows there is an excellent chance for significantly more reserves and higher production rates.

The following link shows we currently produce only about 7.7 million barrels daily of the 19.7 consumed. Domestic production is projected to decline unless more reserves can be discovered and brought online. Even if we fail to increase production, ANWR could be a crucial piece of the puzzle in terms of maintaining as much domestic production as possible, which has huge impacts upon our national security, trade deficit, etc. At current domestic production levels, just 1 million barrels per day would constitute more than 13% of our entire domestic production, from just one geographic region. And if it turned out to be 1.5 million barrels, it would amount to almost 20% of all domestic production.

Obviously, this is no small potatoes, and is not trivial, miniscule, or meaningless, as the treehuggers persist in telling us. Anyone that understands oil reserves knows this is one major resource being ignored to our own detriment.

http://www.our-energy.com/oil_en.html

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cicerone imposter wrote:

Japan has been working on those bad loans, and their economy is still the second largest in the world. They also own a good percentage of our government bonds. If that's trouble, I wish I had some of those.

Granted, they've got several advantages as well. A big one is the whole social equality thing - the population's virtually homogeneous, after all, the traditional aristocracy bit it over a hundred years ago, and we ripped out a lot of what was left of the class system after '45. Definitely one of the twentieth century's success stories, a couple of decades notwithstanding.

At the same time, there's a bunch of downsides - take gender relations, which are still worse in Japan than they -ever- were here. Don't ever ask a Japanese woman about subway gropers - she will have stories and she will tell you about them, aargh.

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okie wrote:

cyclops, here is the information on ANWR.

http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/arctic_national_wildlife_refuge/html/summary.html

The above says there is a 95% probability of 5.7 billion barrels, a 5% probability of 16 billion, and a mean of 10.3 billion barrels, which could translate into 600,000 to 1.9 million barrels per day at peak production. Production would last decades at some level, and would serve to replace and compliment the declining production of the North Slope.

You will notice that environmental groups or opponents always quote the 95% probability, but anyone that understands oil exploration and statistics knows there is an excellent chance for significantly more reserves and higher production rates.

The following link shows we currently produce only about 7.7 million barrels daily of the 19.7 consumed. Domestic production is projected to decline unless more reserves can be discovered and brought online. Even if we fail to increase production, ANWR could be a crucial piece of the puzzle in terms of maintaining as much domestic production as possible, which has huge impacts upon our national security, trade deficit, etc. At current domestic production levels, just 1 million barrels per day would constitute more than 13% of our entire domestic production, from just one geographic region. And if it turned out to be 1.5 million barrels, it would amount to almost 20% of all domestic production.

Obviously, this is no small potatoes, and is not trivial, miniscule, or meaningless, as the treehuggers persist in telling us. Anyone that understands oil reserves knows this is one major resource being ignored to our own detriment.

http://www.our-energy.com/oil_en.html

So, there's only enough oil in ANWR to last us for a whole 1.36 years. I understand that it doesn't all come out at once, but we're talking about 10.3 billion barrels and the US uses 7.56 billion / year.

Your're right, ANWR is our savior.

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So more than 10% of our domestic production for 30 years is just not worth fooling with? Its a waste of time to point out the fallacy of your side's talking points, but suffice it to say you are not thinking very logically. And if you did not buy any foreign oil for more than a year, can you fathom the positive effects upon our trade deficit and many other things? So even your own argument is not logical.

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okie wrote:

So more than 10% of our domestic production for 30 years is just not worth fooling with? Its a waste of time to point out the fallacy of your side's talking points, but suffice it to say you are not thinking very logically. And if you did not buy any foreign oil for more than a year, can you fathom the positive effects upon our trade deficit and many other things? So even your own argument is not logical.

No, it isn't worth fooling with. It is a trivial amount. It will have no major impact on any US industry or our prices of oil or gasoline. Also, as our demand keeps rising - and according to your business model of encouraging the profligate waste of oil as gasoline, this is going to happen - it won't ever match up to the increased demand. The only way to solve our oil problems is to decrease demand.

Not to mention the fact that the oil doesn't just go away. Why not keep it until there are REAL oil shortages, and it's one of the few reserves left?

Cycloptichorn

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Avatar, Yes, Japan is a success story no matter how one wishes to look at it. They are the size of California with no raw materials, but have succeeded economically by improving quality over quantity.

You mention that Japan has social problems; name me one developed country that doesn't.

Japan is one of the most discriminatory countries, and their class system is still alive and well; before any child of a wealthy family can get married, they do a background check on the prospective family to make sure they "belong" in the same class.

Most homes in Japan are tiny compared to western-style homes, and the "big" cities are all over-crowded with people and vehicles. No thanks.

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Cycloptichorn wrote:

okie wrote:
So more than 10% of our domestic production for 30 years is just not worth fooling with? Its a waste of time to point out the fallacy of your side's talking points, but suffice it to say you are not thinking very logically. And if you did not buy any foreign oil for more than a year, can you fathom the positive effects upon our trade deficit and many other things? So even your own argument is not logical.

No, it isn't worth fooling with. It is a trivial amount. It will have no major impact on any US industry or our prices of oil or gasoline. Also, as our demand keeps rising - and according to your business model of encouraging the profligate waste of oil as gasoline, this is going to happen - it won't ever match up to the increased demand. The only way to solve our oil problems is to decrease demand.

Not to mention the fact that the oil doesn't just go away. Why not keep it until there are REAL oil shortages, and it's one of the few reserves left?

Cycloptichorn

Thats a dumb post, cyclops, absolutely dumb. One big reason for not voting for your politicians that think this way. And unfortunately it is part of the reason we are in the fix we are in. The only possible silver lining in the cloud is that the reserve might be used later when needed worse, but by then, it could be too late to help ourselves much.

As I said before, this only demonstates the arrogance and stupidity of our current policy of shooting ourselves in the foot, because the Democrats are all too darn good to drill a few oil wells to produce our own oil. Your party continues to run the country into the ground if they keep getting elected.

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Quote:

Thats a dumb post, cyclops, absolutely dumb.

Why?

No matter how many wells we drill, eventually they ALL will go dry. That's not a good long term solution, and adding more capacity isn't even much of a short-term solution.

You do realize that the current gas problems do not reflect a shortage of oil, but a shortage of refineries - which the oil companies refuse to build more of?

You do realize that much of the oil we drill domestically in Alaska, we sell to China?

Please explain in more detail why it is 'dumb' to want to find a true long-term solution, instead of a short term one, which we know will fail, and will muck up a wildlife refuge to boot.

Cycloptichorn

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okie wrote:

So more than 10% of our domestic production for 30 years is just not worth fooling with? Its a waste of time to point out the fallacy of your side's talking points, but suffice it to say you are not thinking very logically. And if you did not buy any foreign oil for more than a year, can you fathom the positive effects upon our trade deficit and many other things? So even your own argument is not logical.

The fallacy of my arguments.

You said the mean amount of oil in ANWR was 10.3 billion barrells. That means that if we were able to take ALL of the oil out at once, we'd have 10.3 billion barrells of oil.

The US uses 7.56 billion barrells of oil per year.

10.3 divided by 7.56 = 1.36 years.

THE FACT is that there is only enough oil in ANWR to last the US 1.36 years at our current usage (which is going up by the way).

There is no fallacy there, the facts are plain as day if you choose to see them.

By comparison, the highest estimates state that the US has 29.3 gigabarrells. The middle east has 733.9 gigabarrells. The world has 1650 gigabarrells. So, at most the US currently holds 1.7% of the remaining world supply of oil. What a fun future.

Source:
http://www.eia.doe.gov/emeu/international/reserves.html

And in addition, the oil we would get out of ANWR isn't FREE. It's not like that oil would be given away to the refinaries and the American people. We're still going to be paying something for it. I wouldn't be surprised if we'd be paying the SAME amount since it'd be traded on the commodity markets like the rest of the worlds oil. So how is that a good deal.

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Americans have been spoiled by low taxes on fuel; most countries have been paying over US$5/gallon for many years (probably over a decade), and I'm still elated that we're still paying under $4/gallon even today with higher oil prices.

Gasoline will continue to be supplied as long as there is demand - at least during my lifetime. Our government's failure to require fuel efficiency in our vehicles, slower speed limits, and other fuel saving actions are all at fault.

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As it stands, US crude oil is sold at about $58/barrel, vs an OPEC average of $62. (http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm)

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Over the 30 years it would take to siphon that oil we'd save 41.2 billion dollars. The trade deficit in 2005 was 710 billion. The entire ANWR savings we'd gain per year would reduce our trade deficit by 0.19%.

You're right OKIE, huge gains in our trade deficit.

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maporsche wrote:

As it stands, US crude oil is sold at about $58/barrel, vs an OPEC average of $62. (http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm)

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Over the 30 years it would take to siphon that oil we'd save 41.2 billion dollars. The trade deficit in 2005 was 710 billion. The entire ANWR savings we'd gain per year would reduce our trade deficit by 0.19%.

You're right OKIE, huge gains in our trade deficit.

No; the price of oil is not based upon current supply, but projections of the future supply. It doesn't scale logically at all, unfortunately.

Cycloptichorn

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Some analysts have predicted $70 to over $100 per barrel oil in the near future. $4 per barrel savings doesn't make sense.

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Cycloptichorn wrote:

maporsche wrote:
As it stands, US crude oil is sold at about $58/barrel, vs an OPEC average of $62. (http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm)

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Over the 30 years it would take to siphon that oil we'd save 41.2 billion dollars. The trade deficit in 2005 was 710 billion. The entire ANWR savings we'd gain per year would reduce our trade deficit by 0.19%.

You're right OKIE, huge gains in our trade deficit.

No; the price of oil is not based upon current supply, but projections of the future supply. It doesn't scale logically at all, unfortunately.

Cycloptichorn

I didn't provide futures prices, I provided spot prices defined as: "The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased "on the spot" at current market rates. "

The spot price for oil is $58 in the USA. $62 in OPEC averages.

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maporsche wrote:

Cycloptichorn wrote:
maporsche wrote:
As it stands, US crude oil is sold at about $58/barrel, vs an OPEC average of $62. (http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm)

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Over the 30 years it would take to siphon that oil we'd save 41.2 billion dollars. The trade deficit in 2005 was 710 billion. The entire ANWR savings we'd gain per year would reduce our trade deficit by 0.19%.

You're right OKIE, huge gains in our trade deficit.

No; the price of oil is not based upon current supply, but projections of the future supply. It doesn't scale logically at all, unfortunately.

Cycloptichorn

I didn't provide futures prices, I provided spot prices defined as: "The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased "on the spot" at current market rates. "

The spot price for oil is $58 in the USA. $62 in OPEC averages.

Yeah, I know. My point is that the price doesn't scale easily, so statements like:

Quote:

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Aren't accurate in the real-world pricing situation.

Cycloptichorn

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Cycloptichorn wrote:

maporsche wrote:
Cycloptichorn wrote:
maporsche wrote:
As it stands, US crude oil is sold at about $58/barrel, vs an OPEC average of $62. (http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm)

This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Over the 30 years it would take to siphon that oil we'd save 41.2 billion dollars. The trade deficit in 2005 was 710 billion. The entire ANWR savings we'd gain per year would reduce our trade deficit by 0.19%.

You're right OKIE, huge gains in our trade deficit.

No; the price of oil is not based upon current supply, but projections of the future supply. It doesn't scale logically at all, unfortunately.

Cycloptichorn

I didn't provide futures prices, I provided spot prices defined as: "The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased "on the spot" at current market rates. "

The spot price for oil is $58 in the USA. $62 in OPEC averages.

Yeah, I know. My point is that the price doesn't scale easily, so statements like:

Quote:
This means that if we drilled ANWR we'd save $4 / barrel of oil or 7%.

Aren't accurate in the real-world pricing situation.

Cycloptichorn

I see what you're saying, but regardless, ANWR isn't going to increase the worlds supply of oil by 50% and the overall price/barrel isn't going to drop to $20, and even if it does, then the US price/barrel will still only be a few dollars cheaper, which in the scheme of things is a drop in the bucket.

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Here's a graph on oil spot prices. It isn't fixed from one period to another, and there's no telling which way it swings from day to day.

http://img.photobucket.com/albums/v97/imposter222/aoilspot.gif

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Cycloptichorn wrote:

You do realize that the current gas problems do not reflect a shortage of oil, but a shortage of refineries - which the oil companies refuse to build more of?

Cycloptichorn

Refuse to build or can't get permits to build? NIMBY in action?

BTW. the new head of my little burg's bus system sent up a couple of trial balloons during the past month. UVA students and staff can ride public transport for "free." UVA will kick in money to the city to compensate.
And then this week, he proposed making the system free for everyone. There would be an increased rate at the municipal parking garages for those who choose to drive.

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Where is the US economy headed?

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