Tuesday, April 21, 2009

Can New Star Trek Movie Live up to the Review?

I was primarily interested in this review (copied below) of the newest Star Trek movie because A) as a young kid in the 60's I was a big fan of the original Star Trek (up to the second season, anyway), and B) I recently watched "Alias" for the first time on dvd, and the first season of writing with creator J.J. Abrams running the show was impressive -- he has an excellent sense of storytelling. (Season 2 of Alias isn't bad, but less good, season 3 and 4 - watchable, if contrived, and season 5 is so bad the show deserved to die a grisly death by then; Abrams left around season 3 after too much network meddling.)

Abram's is heavily involved in the new Star Trek movie. So, though I thought most of the Star Trek movies were junk ("Wrath of Khan" was relatively good) I wondered if the newest might be worth seeing. This is coming from a guy that now goes to less than one movie a year because I'm so fed up with sensory overload from too much CG and sensory underload from too much trashy storytelling.

So... though I am *always* deeply suspicious of reviews (most are worthless, aren't they? The reviewer is either on the take for the studio, or hates everything, including the movie and himself), this is easily the most glowing review I've *ever* read of a movie. Get a load of this:

One of the most refreshing – and surprising -- aspects is how elitist it is.

Throughout, there is great emphasis on the fact that the crew members are not everymen.

Each is a talented individual who has knuckled down to serious training and passing rigorous exams with the highest honours.

It is one of the few movies I have seen in recent years which has celebrated intellectual endeavour, the informed weighing up of risks, the taking of responsibility. It is, well nigh uniquely in modern Hollywood, grown-up.

Never read anything like this in a review. Ever. Is this guy an Ayn Rand fan? Read "The Romantic Manifesto", and you'll know what I'm talking about. We shall see if the movie lives up to the review...


Out of this world! The Mail's film critic gives his verdict on the new Star Trek movie


By Chris Tookey
Last updated at 12:12 PM on 21st April 2009

Star Trek (certificate TBA)

The entertainment business thrives on surprises, as has been proven once again by the sudden elevation to stardom of Susan Boyle on Britain’s Got Talent.

And there has been no bigger surprise for me this year than this movie.

Like many people, I yawned at the thought of yet another attempt to breathe life into a series that seemed finished, after the pompous, pointless and all too aptly named Star Trek: Nemesis in 2002.


Young cast: 1. Anton Yelchin (Chekov) 2. Chris Pine (Kirk) 3. Simon Pegg (Scotty) 4. Karl Urban (McCoy) 5. John Cho (Sulu) and 6. Zoe Saldana (Uhura)

The original cast had long gone, and the ideas had dried up. Why try to reanimate a corpse?

The short answer is that J.J. Abrams had come up with a tremendous idea, inspired no doubt by the success of Batman Begins and Casino Royale, both of which had reinvigorated tired franchises by recasting and going back to basics.

The result is not only by far the best of the 11 Star Trek movies, it must rank as the outstanding prequel of all time.

For those too young to remember the original TV series and its spin-off movies, or (like me) unconvinced that they were in all respects works of untrammelled genius, the movie ticks all the boxes as regards big set pieces.

walter koenig william shatner james doohan deforest kelley
george takei Nichelle Nichols

The original cast (L-R): 1. Walter Koenig 2. William Shatner 3. James Doohan 4. Deforest Kelly 5. George Takei and 6. Nichelle Nichols

We see space battles, planets sucked into black holes, chases, space aliens. Stupendous special effects and a magnificent score by Michael Giacchino make it a treat for the eyes and ears.

The picture moves at a terrific pace, and is a satisfying tale of good versus evil, with Eric Bana a highly hissable villain.

He’s the Romulan Nero, bent on avenging the destruction of his planet by blowing up first Vulcan, and then Earth.

The Australian actor is virtually unrecognisable in the role, and confirms my suspicion that, though he struggles to carry a movie as a leading man (proved most notably in Hulk), he is a first-rate character actor.

Star Trek

Star Trek

Like all the best villains, Nero is driven by a belief that he is in the right, and makes a fearsome adversary.

The script feels remarkably fresh, no small achievement in itself, and takes an ingenious turn with the introduction of a time travel theme, and a highly effective reappearance of 78-year-old Leonard Nimoy, who was of course the original Spock and brings considerable dignity and grace to his scenes, which are far more than cameos.

This is space opera on a mythic scale, and it’s stirring stuff.

The immense grandeur of the imagery bodes well for anyone who chooses, in the wake of this movie’s inevitable success, to go back into the history of the franchise, and marry some of its better script ideas to 21st century technology.

Star Trek

Freefall: Olsen, Sulu and Kirk plummet towards the ground... but will they all survive?

After the artistic disappointment of George Lucas’s Star Wars prequels, with its terrible dialogue and worse acting, this movie really does promise a creative re-birth of science fiction adventure.

The revelation for many will be the way the screenplay honours the original characters created by Gene Roddenberry in the sixties, and gives them a moving and satisfying back-story.

Rightly, it centres on the initial dislike and rivalry, followed by respect and friendship, of the all-American, Hell-raising space rookie James Tiberius Kirk (played with real dash and charisma by Chris Pine), and the austere, apparently unemotional half-human, half-Vulcan Spock (a remarkably subtle and touching performance by Zachary Quinto).

We also get to see the formation of the rest of the crew of the USS Enterprise, and they’re all splendidly played with real affection and understanding of the TV originals.

A dramatic moment for Kirk in the film which will also feature spectacular skydiving from space sequences

A dramatic moment for Kirk in the film, which also features spectacular skydiving from space sequences

Karl Urban captures the virile loyalty and determination of the ship’s Medical Officer Leonard “Bones” McCoy.

The attractive Zoe Saldana is strong and sympathetic as the language expert, Uhura.

Simon Pegg provides late comic relief as Scotty, who becomes the chief engineer. Other, minor members of the crew also get their chance to shine.

Fans of the original series will not be disappointed. Throughout, there’s just the right degree of reverence for the original, coupled with an attractive ability to poke fun at it.

For anyone who grew up with Star Trek, there’s terrific resonance in the first time Kirk sits in the captain’s seat on the USS Enterprise – and is abruptly ordered out of it – and satisfaction in watching the various characters and ingredients drop into place. It’s an emotional experience.

New beginning: Fans will see the birth of Kirk in the prequel

New beginning: Fans will see the birth of Kirk in the prequel

One of the most refreshing – and surprising - aspects is how elitist it is.

Throughout, there is great emphasis on the fact that the crew members are not everymen.

Each is a talented individual who has knuckled down to serious training and passing rigorous exams with the highest honours.

It is one of the few movies I have seen in recent years which has celebrated intellectual endeavour, the informed weighing up of risks, the taking of responsibility. It is, well nigh uniquely in modern Hollywood, grown-up.

It’s easy to remember which of the original Star Trek movies were good.

The even-numbered ones were all fun, with numbers VI and VIII the best of the lot, until they reached Star Trek X, which was dreadful. The odd-numbered ones were pretty boring.

Hold on: Starfleet cadet Kirk hangs on to the platform after his skydive

Hold on: Starfleet cadet Kirk hangs on to the platform after his skydive

At its worst, the franchise got bogged down in impenetrable jargon and pretentious ideas ponderously expressed.

It started way back in 1966, and by the time the films came along in 1979, many of the original cast were long in the tooth.

When Lieutenant Uhura performed the dance of the seven veils in Star Trek V: The Final Frontier (1989), she looked as though she was taking part in a glamorous granny competition, and some male members of the cast acted as though they had been semi-embalmed by a negligent mortician.

Twenty years on, I predict that we are about to see an explosion of interest in the original series.

And, on this evidence, a young and dynamic cast of actors are set to boldly go where no other movie series has gone before: into a new series of Star Trek stories with a prodigious new lease of life. Welcome back, you Trekkers.

Verdict: A new beginning for the Star Trek franchise


Tuesday, April 14, 2009

We, the Living

Near the end of Ayn Rand's epic novel Atlas Shrugged, the wife of steel tycoon Hank Rearden confronts the heroine Dagny Taggart in her office of the Taggart Transcontinental railroad, to blackmail Dagny with the threat of her affair with Rearden. Lillian, the arch-Leftist, brags that it was she who told the government of the affair so that the government could force Rearden into giving up the magnum opus of his career --"Rearden Metal", a remarkable substitute for steel with vastly superior properties and enormous value.
The goal of Lillian's blackmail was to force Dagny to appear on a broadcast show so that the government could use her as a propaganda tool to convey support for the government's policies -- a scenario not unlike recent meetings between bankers from around the country and Obama and Geithner.
At this point in the novel, the government has enacted the dreaded "Directive 10-289", an order paralyzing the country with wage and price controls, criminalization (up to death) for anyone quitting their jobs, and requiring all private property to be "donated" to the government by means of "Gift Certificates", in the name of the greater public good. The purpose of this cheap propaganda tool is to dupe the public into believing that all private enterprises have signed over their property voluntarily. Lillian relates the events leading to Rearden's signature:

"Consider what that signature meant to him. Rearden Metal was his greatest achievement, the summation of the best in his life, the final symbol of his pride.... Rearden Metal was more than an achievement to him, it was the symbol of his ability to achieve, of his independence, of his struggle, of his rise. It was his property, his by right--and you know what rights mean to a man as strict as he, and what property means to a man as possessive. He would have gladly died to defend it, rather than surrender it to the men he despised. This is what it meant to him--and this is what he gave up. You will be glad to know that he gave it up for your sake, Miss Taggart. For the sake of your reputation and your honor. He signed the Gift Certificate surrendering Rearden Metal--under the threat that the adultery he was carrying on with you would be exposed to the eyes of the world...." (page 789 of the Signet paperback edition)

The cashing-in for Lillian is her revelation of betrayal of her husband:

"It was I," said Lillian softly, "who informed the bureaucrats about my husband's adultery."

Dagny noticed the first flicker of feeling in Lillian's lifeless eyes: it resembled pleasure, but so distantly that it looked like sunlight reflected from the dead surface of the moon to the stagnant water of a swamp; it flickered for an instant and went.

"It was I," said Lillian, "who took Rearden Metal away from him... You can't buy your way out of it, with those dollars which you're able to make and I'm not. There's no profit you can offer me--I'm devoid of greed."

I was re-reading this and an epiphany struck me: "Those dollars which you're able to make and I'm not..."
Only a person who suffers self-doubt about their own worthiness to exist would say this -- their capacity and ability to take actions to support and promote their own life and happiness.
This metaphysical self-doubt would drive them to hate and despise those who are efficacious and capable of existing. The dollar-makers would be a terrible affront to the self-doubters, and the hatred and resentment would eat at them and drive them to embrace moral ideals that rationalize their hatred -- because a moral sanction would be necessary for them to face a mirror each morning and survive each day.
With a twisted sanction that they are the only ones worthy of existence, not the dollar-makers, they would achieve a grotesque moral inversion: by virtue of their incompetence, the persons who feel least qualified to exist would come to believe they are the ones most qualified to exist. The mere existence of the dollar-making and dollar-earning producers would create a lust in the hearts of these metaphysical incompetents to destroy those who are most qualified to exist -- the ones who want to live, who take actions to live, who use their minds to succeed at living.
There you have, I think, a key genesis for the motives of many among the Left. The ideals that protect them (they think) are the rationalization provided by an ethic of self-sacrifice and belief in the god-like omniscience of an omnipotent government. With that, they can justify their need to hate anyone who has ever loved living, anyone who works for their own self-interest, anyone who was ever willing to earn their right to happiness rather than just having it given to them from the Big Rock Candy Mountain of government booty.
I've run through my mind the many people I've known over my life, directly or indirectly who illustrate this observation -- from people I have known who despised me for my dedication to rationality and objectivity and conviction in the value of my life and my desire to never sacrifice it -- to people like protesters I've seen who shout down any opposing points of view and use force or violence to get their way -- to teachers (like some I've known) who attempt to brainwash their students with irrational ideas and punish them with bad grades for dissenting opinion -- to politicians who embrace the ideas of those teachers and use them to justify passing laws enslaving others with endless taxes, regulations, "guidelines", "standards" and commandments to obey -- to judges (like too many on the Federal bench or on the Supreme Court) who abandon founding Constitutional guidance, individual rights, and the principles of reason and objective jurisprudence to support those laws in either direct decisions, or indirectly via hair-splitting nuance or outright cowardice to confront an evil.
I think of that, and then think some more: my observation is not only true, it offers practical insight. Its a window into the souls of those haters of the dollar-earners, into how they came to hate me and those like me. I can see how, as a child (in body or spirit), when confronted with their own self-doubts, rather than confronting them with an upright posture, an intransigent mind and a shred of courage, they put their heads down and decided to reject existence in favor of their whims, and chose power-lust as their means of controlling existence, rather than thinking.
They chose to slink off and become jackals, rather than walk as men.
This is the kind of people who are now running our country.
As the government hurtles towards total control of the economy and the destruction of all wealth and individual liberty, we, the living who produce, should never grant them that sanction.

Saturday, April 11, 2009

The Next Phase in Obama's Rush Towards Unilateral Disarmament

First Obama announces in Prague his goal of unilateral nuclear disarmament.

Now, as part of arms control negotiations, he is nominating someone who wants the U.S. to eliminate our *conventional* arms, as well.

More facts and entertaining analysis below this news story to determine if this is just a simple left-wing agenda or something more.


Obama nominee favors combining strategic, conventional arms

The Obama administration’s nominee to be assistant secretary of state for verification said last week confirmed that she favors lumping U.S. conventional weapons with U.S. nuclear arms, a position critics say could lead to international restrictions and controls on conventional weapons.

Rose Gottemoeller, the nominee, told the Senate Foreign Relations Committee March 26.

Gottemoeller was asked by Sen. Jim Demint about an article in the publication Arms Control Today she had written advocating the combining of conventional and nuclear arms.

She stated that while her views outside government do not necessarily reflect what she will do inside she admitted that “we would not be paying any particular price at the negotiating table if we should count conventional weapons of that kind as nuclear.”

Critics of arms control say that combining conventional long-range strike weapons with nuclear arms could lead to agreements that restrict one of the most strategic weapons in the U.S. arsenal and plans for long-range conventional ballistic and cruise missiles that can be used against terrorists or arms proliferation targets.

Gottemoeller also testified at the hearing that the Obama administration plans a new round of arms talks with Russia on strategic arms. “If confirmed as assistant secretary, as part of my responsibilities, again, … I would head up the START follow-on negotiations on behalf of the United States government,” she said, noting that she will also seek to resolve problems with the Conventional Forces in Europe Treaty.

The Obama administration is planning to re-launch Cold War-style arms negotiations with Moscow as part of its focus on diplomacy.

--- end of story ---

Here's something Rose Gottemoeller wrote directly relevant to this story: http://www.carnegie.ru/en/pubs/media/78982.htm
It discusses her desire to reduce/eliminate conventional forces.
Who is she? Often background research turns up damning evidence:


Rose Gottemoeller Senior Associate Russia and Eurasia Program

Rose Gottemoeller is assistant secretary of state for verification and compliance. Gottemoeller was director of the Carnegie Moscow Center from 2006 to 2008 and from 2000 to 2005, she served as a senior associate of the Carnegie Endowment in Washington, D.C.

Formerly deputy undersecretary for defense nuclear nonproliferation in the U.S. Department of Energy, she began her work at the Endowment in 2000.

Previously, she served as the department’s assistant secretary for nonproliferation and national security, with responsibility for all nonproliferation cooperation with Russia and the Newly Independent States. She first joined the department in November 1997 as director of the Office of Nonproliferation and National Security.

Prior to the Energy Department, Gottemoeller served for three years as deputy director of the International Institute for Strategic Studies in London. From 1993 to 1994, she served on the National Security Council in the White House as director for Russia, Ukraine, and Eurasia Affairs, with responsibility for denuclearization in Ukraine, Kazakhstan, and Belarus. Previously, she was a social scientist at RAND and a Council on Foreign Relations International affairs fellow. She has taught on Soviet military policy at Georgetown University, and is currently teaching on Russian security in Eurasia, also at Georgetown University.

--- end of bio #1 ---

Looks kinda like Rosa Klebb, doesn't she? Remember "From Russia, With Love"?

Rose speaks Russian and worked in Moscow for years till this new post. In 2002, she wrote an article for the LA Times (http://articles.latimes.com/2002/sep/13/opinion/oe-gott13) objecting to increased visa screening and emphasizing the importance of foreign technical exchange programs, etc, especially those pertaining to people involved in chem-bio warfare, which could be legit or not. My red flags are waving....

Ms. Rose Gottemoeller
Moscow Center Director
Carnegie Endowment for International Peace
16/2 Tverskaya St.
Moscow 125009
Telephone: 7.495.935.8904
Email Address: rose.gottemoeller@carnegie.ru
website: www.ceip.org
A specialist on defense and nuclear issues in Russia and the other former Soviet states, Gottemoeller’s research focuses on issues of nuclear security and stability, non-proliferation, and arms control. Prior to joining the Carnegie Endowment in October 2000, Gottemoeller was deputy undersecretary for nuclear nonproliferation in the U.S. Department of Energy. As the department’s assistant secretary for nonproliferation and national security, she oversaw for all nonproliferation cooperation with Russia and the Newly Independent States.

--- end of bio #2 ---

Ton of stuff on her here http://www.carnegie.ru/en/search/advsearch.asp?search=Rose%20Gottemoeller&searchCatalogue=0&cP=2
She also leans heavily against the idea that Iran is a threat. http://www.carnegie.ru/en/pubs/media/73634.htm, loves Medvedev, and is content to let North Korea be whatever the hell it is -- rogue state, most despotic regime on the planet, nuclear arms proliferator and world's largest counterfeiting operation in U.S. dollars. Except the U.S. Treasury, of course.

Here's something juicy from 1999 (http://www.frontpagemag.com/articles/Read.aspx?GUID=50430890-309C-4E16-9C3A-5B92A4D4C164):
In fact, the current national-security crisis may be said to have begun when President Clinton appointed an anti-military, environmental leftist Hazel O’Leary to be Secretary of Energy in charge of the nation’s nuclear-weapons labs. O’Leary promptly surrounded herself with other political leftists (including a "Marxist-Feminist") and anti-nuclear activists, appointing them as assistant secretaries with responsibility for the nuclear labs. In one of her first acts, O’Leary declassified eleven million pages of reports on 204 U.S. nuclear tests, a move she described as an action to safeguard the environment and as a protest against a "bomb-building culture." Having made America’s nuclear-weapons secrets available to adversary powers, O’Leary then took steps to relax security precautions at the labs under her control.
She appointed Rose Gottemoeller, a former Clinton National Security Council staffer with extreme anti-nuclear views, to be director in charge of national-security issues. Gottemoeller had been previously nominated to fill the post—long-vacant in the Clinton Administration—of Assistant Secretary of Defense for International Security Policy. But her appointment was successfully blocked by congressional Republicans because of her radical disarmament views. The Clinton response to her rejection on security grounds was to appoint her to be in charge of security for the nation’s nuclear-weapons labs.
I know someone very well who had intimate connection with security for the nuclear weapons labs during the Clinton years, who told me how bad it was, with Russian, Chinese, North Korean, more Chinese, Libyan, more Russian and every other nationality on the planet having almost free-reign in those labs. My acqaintence had a LOT of very derogatory things to say about Hazel O'Leary at the time, and tried to do something about the flood of intelligence being given outright to foreign countries. A list of something like 1000 of these foreign nationals was presented to the head of security for Dept. of Energy, who refused to do anything about it and told my acquaintence, "drop it". Maybe my acquaintence knows Rose first-hand.

You know me. Commies doing dead-drops under every Bush. Most of Rose's writings display a strong sympathy for Russia -- she writes like she works for them -- but her writing is weak and mushy, like a career left-wing civil servant and stolid Democrat who comes from Dearborn, Michigan who wants good relations with the enemy. I candidly admit, I dunno if I can place her as a well-positioned double agent. For sure, the wishy-washy writing is consistent circumstantially (if you're really important to the enemy you don't do anything too revealing, but just enough to give you plausible deniability), but I can't construct a good conspiracy theory about her from the little I find on the web (hell, she could even be CIA -- she works in Moscow in an area that the spooks are closely involved in -- arms control and verification).

If I had to put my money on anything, it wouldn't be much more than a plugged nickel on "well-intentioned fool", but I'll hold back a fiver for something more. The evidence is likely coming before the year is out. (Her goal is a major arms reduction treaty by the end of the year.)

But this column can't leave you with such a wishy washy answer. We have a committment to inflaming the masses. I'm firmly of the conviction that the evidence is overwhelming that Obama is an ideologically committed communist working in concert with foreign powers and dedicated to bringing down the United States as a superpower, so the best I can offer is this --
1.) Obama nominated her;
2.) he nominated her for a post that can critically affect the future security of the country;
3.) and Rose has got a long history with the Russians.
As Auric Goldfinger would say, Once is happenstance, Twice is coincidence, Three times is enemy action. Sometimes it's a deep cover mole, sometimes it's just happenstance, but in this case, dangerous either way.

Monday, April 6, 2009

The Juggernaut of the Apocalypse

"The U.S. government and the Federal Reserve have spent, lent or committed *more* than $10 trillion to stem the economic downturn since the financial crisis began. Fed Chairman Ben Bernanke said in a speech Friday that he expects the gradual resumption of sustainable economic growth is coming."

>>Okay, that is what Benny said on Friday. Never mind anything he ‘thinks’ will happen – it’s basic, $10 Trillion Dollars to ‘save’ the economy will drive us into hyper-inflation once the deflationary trend reverses... the donuts who are running Washington and Europe figure they can head off inflation at the pass – letting it run up to five or six percent before reigning it in. This will not work, the numbers are just too big and the game to sophisticated. It would be like handing the keys to a Formula One car to a retarded teenager who claims to have glanced at a blueprint for making a soap-box car. And while on the way to the F1 car, he is handed a fifth of Scotch. No way Benny, Timmy and the Bumbler will be able to ‘reign in inflation’. If we get real lucky, we might catch a hard landing at 12 to 15%...but I’m not holding my breath. I just hope we don’t turn into the United States of Zimbabwe.

This is from a friend today, responding to a news item. He's right, of course.

What I don't understand is how Helicopter Ben and the rest of the whirlybirds in DC can delude themselves into thinking that they can "control" the rate of inflation. If you dump $10T into the economy (I never, ever, thought I would routinely be using "T" for quantities of money) and if the existing money in circulation is $10T, then prices *have* to double (at least) given enough time. No matter how long it takes, they have to double.

Of course, the actual dollars in "circulation" depends on which measure of total dollars you are talking about. Wiki says

  • M0: currency (notes and coins) in circulation and in bank vaults, plus reserves which commercial banks hold in their accounts with the central bank (minimum reserves and excess reserves)....
  • M1: currency in circulation + checkable deposits ... + traveler's checks. M1 represents the assets that strictly conform to the definition of money: assets that can be used to pay for a good or service or to repay debt. ...
  • M2: M1 + savings deposits, time deposits less than $100,000 and money market deposit accounts for individuals. M2 represents money and "close substitutes" for money.[9] M2 is a key economic indicator used to forecast inflation.[10]
  • M3: M2 + large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets.[11] M3 is no longer published or revealed to the public by the US central bank.[12]

I love that part about M3 no longer being revealed to the public. There must be a reason. The same article shows

For my purposes, I think M3 is the appropriate measure of the total money suppy -- about $10T, which matches my assumption.

So, *if* you add $10T to the money supply and double the money in circulation according to the M3 measure, prices *must* at least double not too long afterwards, when that money is fully dispersed into the economy via loans. If it takes (let's assume) 2 years for this to happen, I'd give it one more year for the dust to settle and prices across the board to have doubled.

Now... to expand on my last post (see www.robbservations.blogspot.com), what "rates" of inflation give you a doubling of prices in 3 years? Lessee... 1.2 x 1.3 x 1.3 = 2. Or maybe 1.1 x 1.3 x 1.4 = 2. I like that one. 10%, 30% and 40%.

But if, in year 3, the rate is 40% inflation, it damn sure ain't gonna be 5% in year 4. The maroons in the Fed (as Bugs Bunny would say about this Loony Tune) will drive up interest rates frantically starting in year 1 to stop this juggernaut, while totally ignoring Robb's Law of Conservation of Money (prices = total money in circulation divided by total goods).

So if the Fed is charging 0.25% interest right now for short term loans to banks (the so-called "discount rate"), I'd guess they'll attempt to tamp down inflation with 3.5% by end of year 1 of the inflation (end of 2009), in the cautious hope (not expectation -- they have no clue at all what they are doing) that it will "slow things down".

When that doesn't work, the Fed will be a little more desperate and a little less cautious and try 7% in year 2. Ain't gonna help.

Then, realizing they're having no effect at all, even though the economy is doing a swan dive into a toilet bowl after every Fed announcement of a "rate hike", the Feds will try 14% in year 3 (2011). And when THAT doesn't work (if we aren't all dead from starvation), in year 4 they will throw off the shackles of sheer stupidity and go for broke like shysters at a bad credit card company -- 28%.

Meanwhile, the only thing working in their favor will be massive declines in demand as the economy dies a gurgling death, offset by massive declines in supply as businesses are pushed to extinction. Accelerating the juggernaut of this apocalypse will be higher and higher taxes on everyone because there damn sure will a determined effort to cut NO government programs, except maybe the most important one of all, national defense. (Protecting us will be a luxury, you see, as evidenced by Obumbler's avowed goal of unilateral disarmament, announced in Prague yesterday -- another post.)

The only thing that will probably save us is a massive terrorist attack on the Treasury Department, made possible by the defense cuts. Then we'll all be forced onto a gold standard because the printing presses will no longer exist.

Sunday, April 5, 2009

The Dollar, The Feds, and the Bottom of the Barrel

Someone just sent me this video (http://www.youtube.com/watch?v=YDEe0Ai6lTM), which came from a graph I circulated a month or two ago, showing the rate of government money-printing going up like nothing ever seen in history. Note that the source is the Federal Reserve. (Look closely at the blue line -- it's vertical in 2009.)

Someone else asked me the other week why this graph is so devastating -- why printing a lot of money causes inflation. I answered, if you had a pile of goods and another pile of $1000 in bills which represented those goods, and you doubled the amount of dollars representing those goods, what would have to happen to the price of those goods? They'd go up. And if the pile of goods was the entire world? My friend got it.

In a real economy inflation doesn't start up instantaneously when you double the pile of dollars because it takes time for them to enter the system -- initially they're held by banks who must lend the money out to people, but surely as dumping a large tank of water into an under-sized swimming pool, the effect will ripple through and sunbathers will drown.

But how fast will this occur? If the Fed doubles the number of dollars, and prices must eventually double, what rate of inflation will get us there?

For instance, at 20% per year inflation, what power of 1.2 equals 2.0? 1.2 x 1.2 x 1.2 x 1.2 = 2.0736, if the inflation rate was uniform over 4 years. If inflation built up gradually, it could be 1.06 x 1.1 x 1.5 x 1.7 = 1.982. That is, 6%, 10%, 50%, 70%.

But you can be sure that as inflation heats up the Feds will try to do something to control it.

For awhile they don't want to, of course -- they are *counting* on inflation to effectively reduce the national debt by devaluing the currency. If it takes twice as many dollars to represent the same goods, the value of a dollar becomes 1/2 what it used to be, and the national debt is 1/2 what it used to be. This is another way the Feds rob us. When you're talking a national debt of 10's of trillions of dollars, however, it becomes a big deal. A trillion here, a trillion there, and pretty soon you're talking some real money. It's the cheapest thing they can do to effectively shuck debt in a short time.

Someone has to pay for that, of course -- everyone who owns T-bills and money market funds, everyone who holds debt at fixed interest rates, or variable rates that lag the inflation. A lot of individuals and companies and most of the countries of the world.

Even the people who have borrowed will lose. Initially, they might appear to be getting a good deal in the largest wealth-redistribution scheme in history. But their paychecks won't keep up (if they keep a paycheck, that is) and the decline in economic output will eliminate enormous numbers of goods and services that benefited them. It will be the good fortune awarded a hobo. (As a well-known humanitarian of the 1930s remarked after returning from Soviet Russia, "It was so wonderful to see them all so equally shabby!")

But inflation is ultimately seriously destructive. It is *not* a good thing for the government to reduce its debt by printing money. All they are doing, you see, is stealing the same sum of money through a back door that doesn't require us to pay more taxes. If they manufacture a crisis that scares the bejeezus out of our behinds so that we give them the authority to print whatever they want, it's effectively like doubling our taxes.

I'm not suggesting the real crisis was intentionally manufactured -- at least, beyond the intentions that created the Fed, expanded lending to unqualified borrowers, increased regulations on business (like putting a straightjacket on every automobile driver to reduce accidents), fired CEOs at the whim of government auto-rats, nationalized industries, ad infinitum -- but in presenting the case to Congress they wanted to make the crisis look as dire as possible to get the authority they needed. Both Bush and Obama did exactly this with Tarp1, Tarp 2 , the Stimulus Bill, the G20 Summit last week, and stay tuned (same Bat time, same Batty channel). The result is the same.

If you can see that doubling the taxes of the entire country in one move would be catastrophically destructive to the economy, you can see the effect of doubling the amount of dollars in circulation and devaluing the currency.

I may be understating the problem a bit, however. That graph showing the number of dollars in circulation to be doubling doesn't mean prices must double. There is some leveraging effect. Banks lend, borrowers spend. I think I'm correct in saying that doubling the amount of dollars multiplies the price of the goods by more than 2. How much I'm not sure, but at a wild guess (pick your own number greater than 2), I'd say the leverage is at least 2X.

You can check this approximately by comparing growth in the monetary base with inflation of the dollar, but beware -- not only are government inflation indices like the CPI wildly deceptive, they don't factor in more efficient production from things like new technologies. Most people don't realize that in fully laissez capitalism, prices decline. Every year, for most goods.

Look at computers -- in 1985, a desk-sized Apple "Lisa" computer with a 20 Mega-byte hard drive was $10,000. Today, what can you get it for?

Looking at that graph above, it shows 200 billion in 1982, a year I remember so fondly as the high point of Jimmy Carter's reign of incompetence. In 2008, it was about 850 billion. That's a growth of 4.25. In 1982, engineering salaries in my field averaged about $30k. Today, more like $130k. So maybe I'm wrong, but I won't bet a plugged C-note on it. Today I have to work many more hours and most families are two-income to break even. It's so much more complicated than looking at a Consumer Price Index that compares the price of bread and gasoline between now and then.

Inflation doesn't just stop. It becomes built into business contracts, government policy and people's expectations, and generally takes as long to decline as it took to build up. So the costs goes way out into the future.

As inflation heats up many businesses also fail -- running a business in a climate of variable hyper-inflation is like running in high winds on a high-wire made of sewing thread. Risk and failure multiplies enormously. The number of goods falls (increases prices), more people go out of work (less demand for goods), government raises taxes (they never lay people off), etc.

The effective rate of inflation, after factoring in that lost "opportunity cost" caused by government interference in markets could look more like 10% 20% 40% 30% 50% 20% 100% 40% 70%.... forever. Until government gives up the printing press, which they will only do in the form of replacing the dollar with the American Peso -- the next step beyond the printing press is the shell game of a new currency.

There will be many factors pulling prices up and down to modify those rates of inflation. It's just too damned complicated for anyone to keep track of or fully predict, beyond the general principle that printing money is ultimately destructive of wealth. But of course, the Feds think they know better. On that you can bet the bottom of your dollar.


P.S.: I sometimes use terms that people have forgotten the meaning of. For instance, "Same Bat Time, Same Bat Channel" was always used in previews to the old "Batman" TV show, a farcical dramedy from the 1960's mocking an out-of-shape superhero in tights and cape battling villains like the Riddler with over-the-top statements and exotic gadgetry that doesn't work in reality. There's the U.S. Government for you.

My term "plugged C-note" comes from the term, a "plugged nickel'. When coins were made of precious metals, to "plug" a coin meant to remove its center and replace the missing part with a worthless metal like lead or tin. Thus you held onto your gold or silver because a "plugged nickel" allows you to put fake money into a vending machine (for instance) to get goods you don't deserve. In the age of printed money, plugging a C-note, as I've coined the term, means getting candy from the vending machine of the U.S. economy by putting a bullet in every taxpayer with a printing press. A similar effect.

Wednesday, April 1, 2009

Et tu SciAm?

This is a great article copied below, and if you can't tell from the editor's comments at the beginning, the Left-Wing hacks at Scientific American are kicking itself for commissioning it. They have the gall to practically beg for critics cause they don't like the message. The article well survives this slimy back-stabbing, and illustrates the hubris of the self-anointed philosopher-kings (especially in government) who believe they are so smart they can decide they know enough to tell everyone else when the sky is falling and what rock the rest of us have to crawl under -- how much energy we can use and what car we can drive and what kind of light bulb we can buy and how many watts of power we can consume each day and how we must live our lives to the nth rectal probe degree.

Kern River Oil Field was discovered in 1899, and initially it was thought that only 10 percent of its heavy, viscous crude could be recovered. In 1942, after more than four decades of modest production, the field was estimated to still hold 54 million barrels of recoverable oil. As pointed out in 1995 by Morris Adelman, professor emeritus at the Massachusetts Institute of Technology and one of the few remaining energy gurus, “in the next forty-four years, it produced not 54 million barrels but 736 million barrels, and it had another 970 million barrels remaining.” But even this estimate was wrong. In November 2007 U.S. oil giant Chevron announced that cumulative production had reached two billion barrels. Today, Kern River still puts out more than 80,000 barrels per day, and Chevron reckons that the remaining reserves are about 480 million barrels.

To sum up: the experts initially though this oilfield would yield a few million barrels of oil, at most. After 110 years, it looks to yield 2.5 BILLION barrels. And I bet it beats that estimate. You can never underestimate the power of human ingenuity when left free to express itself. (Can you imagine Energy Department policy in 1899 warning us of a few years reserves and we would all have to stick to horses and whale oil?)

...Although in the early 1970s the major oil companies controlled around 80 percent of global oil reserves, today more than 90 percent of the world’s oil and 80 percent of the world’s natural gas is under the direct control of producing countries, through their national oil companies. The current wave of resource nationalism can only worsen this situation...

...By 2030 more than 50 percent of the known oil will be recoverable. Also, by that time the amount of known oil will have grown significantly, and a larger portion of unconventional oils will be commonly produced, bringing the total amount of recoverable reserves to something between 4,500 billion to 5,000 billion barrels of oil. What’s more, a significant part of “new reserves” will not come from new discoveries, but from a new ability to better exploit what we already have.

To be sure, by 2030 we will have consumed another 650 billion to 700 billion barrels of our reserves, for a total of around 1,600 billion barrels used up from the 4,500 billion to 5,000 billion figure. Yet, if my estimates are correct, we will have oil for the rest of the 21st Century.


April 1, 2009

Squeezing More Oil Out of the Ground

Amid warnings of a possible peak for oil production, new technologies offer options to extract every last possible drop

By Leonardo Maugeri

On 20 dry, flat square miles of California’s Central Valley, more than 8,000 horseheads—as old-fashioned oilmen call them—slowly rise and fall as they suck oil from underground. Glittering pipelines crossing the whole area reveal that the place is not merely a relic of the past. But even to an expert’s eyes, Kern River Oil Field betrays no hint of the miracle that has enabled it to survive decades of dire predictions.

Kern River Oil Field was discovered in 1899, and initially it was thought that only 10 percent of its heavy, viscous crude could be recovered. In 1942, after more than four decades of modest production, the field was estimated to still hold 54 million barrels of recoverable oil. As pointed out in 1995 by Morris Adelman, professor emeritus at the Massachusetts Institute of Technology and one of the few remaining energy gurus, “in the next forty-four years, it produced not 54 million barrels but 736 million barrels, and it had another 970 million barrels remaining.” But even this estimate was wrong. In November 2007 U.S. oil giant Chevron announced that cumulative production had reached two billion barrels. Today, Kern River still puts out more than 80,000 barrels per day, and Chevron reckons that the remaining reserves are about 480 million barrels.

Chevron began to achieve its miracle in the 1960s by injecting steam into the ground, a novel technology at the time. Later, a new breed of exploration and drilling tools—along with steady steam injection—turned the field into a sort of oil cornucopia. Yet, Kern River is not an isolated case. Most of the world’s oilfields have revived over time. New exploration methods have revealed more of the Earth’s secrets. And leaps in extraction technology have led to tapping oil in once-inaccessible areas and in places where drilling was once uneconomic. In a way, technology is the real cornucopia.

All That You Can't Leave Behind

At a time when the world increasingly fears an approaching peak and subsequent decline in oil production (even if the current economic crisis has temporarily obscured this view), it may be surprising to learn that most of the planet’s known resources are left unexploited in the ground, and that even more still wait to be discovered.

In 2008, just before the economic meltdown that slashed oil consumption, the world consumed around 30 billion barrels of oil per year, or roughly 85 million barrels per day, with the U.S. leading the rush with more than 21 million barrels consumed every day. Our planet’s proven oil reserves are estimated at between 1.1 trillion and 1.3 trillion barrels, more than the amount we have consumed so far, which is less than one trillion barrels.

These 2.3 trillion barrels are only a slice of the Earth’s original petroleum deposits, which the U.S. Geological Survey estimates to be around seven trillion to nine trillion barrels. But with today’s technology, know-how and prices, only part of that oil can be recovered economically and is thus classified as a proven reserve.

The world’s average oil recovery rate today is around 35 percent. That means that about two thirds of the original oil remains underground; that resource is rarely mentioned in the debate on the future of oil. And there is more.

First, proven reserves are only estimates and not fixed numbers. The definition of what can be recovered economically changes as technology develops and as the price of crude goes up. That’s why most oilfields have produced much more than the initial estimates of their reserves assumed, and even more than the initial estimates of their total content. Second, these data do not include unconventional oils, such as ultra-heavy oils, tar sands and bituminous schist, which together are at least as abundant as conventional oil. Finally, only one third of the sedimentary basins of our planet—the geological formations that may contain oil—have been thoroughly explored with modern technologies.

Even a mature oil country such as the U.S., whose oil production has been declining since the 1970s, still holds huge volumes of unexploited oil under its surface. According to a recent report by the National Petroleum Council (NPC), of the 582 billion barrels of known oil, 208 billion already have been produced or proven, leaving 374 billion barrels underground. What’s more, all this oil is only a fraction of the country’s total original amount, which the NPC estimates at more than a trillion (1,124 billion). Meanwhile, U.S. proven oil reserves are 29 billion barrels, and the country’s annual production is about three billion barrels, less than half of the seven billion barrels it consumes every year.

Thus, a country or a company may increase its reserves of black gold even without tapping new areas and frontiers, if it is capable of recovering more oil from known fields. Still, that does not mean that it is easy.

A Rocky Start

Contrary to common belief, oil is not held in great underground lakes or caves. If you could “see” an oil reservoir, you would only notice a rocky structure, in which there seems to be no room for oil. But beyond the reach of the human eye, a world of often-invisible pores and microfractures entrap minuscule droplets of oil, together with water and natural gas.

Nature created these formations over millions of years. It started when huge deposits of vegetation and dead microorganisms piled up at the bottom of ancient seas, decomposed and got buried under successive layers of rock. High temperatures and pressures then slowly transformed the organic sediments into today’s oil and gas.

When such a reservoir is drilled, it is a bit like uncorking a champagne bottle. Freed from its ancient rocky prison, the reservoir’s internal pressure pushes oil to the surface (along with stones, mud and other debris). The process goes on until the pressure peters out. From then on, recovery must be assisted.

About one third of the oil in a reservoir is “immobile oil,” isolated drops trapped by strong forces within the pores of the rock. The remaining two thirds, though mobile, will not necessarily flow into the wells. In fact, usually about half of the mobile oil is stuck inside the reservoir because of geological barriers or low permeability. The situation is even worse when the oil is not a light liquid, but a heavy, viscous molasses-like substance. In that case, only a limited amount of it may be recovered through conventional technologies.

I Drink Your Milkshake

In the past, oilmen generally recognized that the development of a reservoir entailed three subsequent stages. First, they exploited the internal pressure of the oilfield. This early phase was referred to as primary recovery and usually yielded between 10 and 15 percent of the total oil in place. Secondary recovery consisted of injecting natural gas and water into the reservoir. The reason for the use of water is not obvious at first, but is quite simple. Because oil is lighter than water, oil will be uplifted when water is injected in the reservoir, just as pouring water in a glass filled with olive oil would push the oil upward. The first and second recovery stages could bring the recovery rate to between 20 and 40 percent, for good-quality reservoirs. Beyond that, textbooks indicated a third stage—tertiary recovery—based on the application of thermal, mechanical, chemical or biological processes.

One of the most important developments so far has been the horizontal well, a dramatic breakthrough compared with the traditional vertical drilling used since the inception of the oil industry. Commercially adopted in the 1980s, this technique is particularly suitable for reservoirs where oil and natural gas occupy thin, horizontal strata, or in sections where vertical drilling can no longer be useful. With their flexible “L” shapes, horizontal wells can change direction and penetrate a reservoir horizontally, thus “assaulting” virgin sections of a reservoir.

The revolution in exploration, computing and drilling tools has also allowed for going deeper and deeper into the oceans to push the frontiers of oil search.

Developed after World War II, offshore technologies seemed to have reached their most daunting milestone in the 1970s, when they were essential to the development of North Sea oil. At that time, production came from fields that lay below 300 to 600 feet of water and 3,000 feet under the seabed. But in the last few years, the industry has succeeded in striking oil at depths below 10,000 feet of water and 20,000 feet below the seabed—as it occurred in the Gulf of Mexico and the Brazilian offshore.

Moreover, new technologies have enabled geologists to see what lies beneath layers of underground salt, which are unevenly distributed beneath the seabed and sometimes thicker than 15,000 feet. Similar to frozen waters, salt formations represented a formidable obstacle because they blurred the seismic waves used in exploration, making it impossible to reconstruct an accurate image of the underground. The removal of this obstacle has led to at least three major ultra-deep offshore discoveries: Thunder Horse and Jack in the Gulf of Mexico and Tupi in Brazil. These areas are what people in the field call “elephants”—fields holding more than one billion barrels of oil and natural gas.

Wringing Out Every Drop

Although wells have gone farther and deeper than ever before, technologies have evolved to get more oil out of the rock, using heat, gas injection, chemical processes and even microbes.

Steam injection, among the oldest heat-based methods, was decisive in the revival of the Kern River Oil Field back in the early 1960s. The basic principle of this technology is that the injected steam heats the overlying formation, allowing oil to move, so that it becomes recoverable. In simpler words, it is like heating crystallized honey to get it into a liquid, less viscous form.

To this day, Kern River’s steam injection represents the largest project of this kind in the world. A variant of steam-assisted recovery has been applied to tar sand deposits in Alberta that are too deep to be surface-mined.

Another heat-based process that has been field-tested is burning a fraction of the reservoir’s hydrocarbons. The fire generates heat and carbon dioxide, both of which make oil less viscous. At the same time, the fire itself breaks the larger and heavier molecules of oil, once again making it mobile.

Another technique involves the injection at high pressure of gases such as carbon dioxide (CO2) or nitrogen into the reservoir. In simple terms, these gases mix with oil, reducing both its viscosity and the forces that trap oil into its prison. CO2 can also be injected simply to restore or maintain the reservoir’s pressure.

In the U.S., CO2 has been applied to oil recovery since the 1970s, and is in use in about 100 ongoing projects, with a dedicated pipeline network of more than 2,500 kilometres. The know-how accumulated in CO2 injection has opened the way for carbon capture and sequestration, a promising technique for storing this greenhouse gas in the subsoil for hundreds of years. The first commercial carbon capture and sequestration project has been active in Sleipner, Norway, since 1996, and is storing 1.5 million tonnes of CO2 per year. A small step, considering that human activity alone is estimated to eject into the atmosphere around 50 billion tonnes of carbon dioxide every year.

Ironically, however, one of the main problems in using CO2 for oil recovery is its scarcity. Capturing the gas from large power station smokestacks or volcanoes is not cheap, and the cost of capturing it from smaller sources such as cars or even most industrial plants is prohibitive. Another hurdle is transportation, which can be too costly if the oil fields are in remote regions.

Another method to help recovery is to use chemistry. Chemicals can mix with trapped oil and make it less viscous, so that it can flow toward the well. Although the chemistry terminology can be quite esoteric, these chemicals all work based on the same principle, which is similar to how layers of soap molecules can engulf fatty substances and help remove grease from your hands. The most successful chemical process so far has been applied in China, where the national oil company PetroChina has injected a polymer substance in its Daqing oilfield since the mid 1990s. The technique is credited for helping get out an extra 10 percent of the reservoir’s oil. A variation on this process employs a caustic solution to generate the soap-like materials from components present within the oil itself, thereby lowering the overall cost.

Microbial enhanced oil recovery is still in its infancy, with experiments being conducted the U.S., Mexico, Norway, Venezuela and Trinidad. This technology consists of pumping considerable amounts of specialized microbes into the reservoir, together with nutrients and in some cases also oxygen. The microbes grow in the interface between the oil and the rock, helping to release the oil. The revolution underway in genetic engineering opens up the possibility of modifying bacteria and other microorganisms to make them more efficient at breaking up the heavier and more viscous oil molecules so as to make them mobile.

A New Era Ahead?

Technological breakthroughs in the oil industry have always been the result of very long, drawn-out processes. Horizontal drilling was first tested in the 1930s, and some of the more advanced recovery methods have existed at least since the 1950s. For most of the industry’s history, however, oil has been overabundant, so its price has been too low to justify significant and costly innovations. A new era is coming, and not only because oil prices are historically high—even after a dramatic plunge that slashed them from $147 per barrel in July 2008 to around $45. Other more important factors are at work.

First of all, many of the largest and most productive oil basins in the world are approaching what I call technological maturity: their production limits using conventional technology. These basins include reservoirs from Persian Gulf countries, Mexico, Venezuela and Russia that started producing oil in the 1930s, ’40s and ’50s. For these fields to keep producing in the future, new technologies will be required.

The second factor is the limited opportunities for new exploration and development for Western oil companies. Although in the early 1970s the major oil companies controlled around 80 percent of global oil reserves, today more than 90 percent of the world’s oil and 80 percent of the world’s natural gas is under the direct control of producing countries, through their national oil companies. The current wave of resource nationalism can only worsen this situation, because several important producers are already able to manage the development of their “easy” oil on their own, having attained an adequate level of technical and management skills. Recovering more oil from mature oilfields and discovering it in new, daunting frontiers is the only way to open up new growth opportunities in an otherwise shrinking world for Western oil companies.

Easy oil is probably running out because it was the first to be discovered and burned. But it wasn’t so “easy” when it was discovered. By the same token, the difficult oil of today will be tomorrow’s easy oil, thanks to the learning curve of technology expertise. Overall, “difficult oil” exploitation will be the survival and even prosperity key for many Western oil companies in a world that will be increasingly dominated by national oil companies.

It will take time, but I dare to make a prediction. By 2030 more than 50 percent of the known oil will be recoverable. Also, by that time the amount of known oil will have grown significantly, and a larger portion of unconventional oils will be commonly produced, bringing the total amount of recoverable reserves to something between 4,500 billion to 5,000 billion barrels of oil. What’s more, a significant part of “new reserves” will not come from new discoveries, but from a new ability to better exploit what we already have.

To be sure, by 2030 we will have consumed another 650 billion to 700 billion barrels of our reserves, for a total of around 1,600 billion barrels used up from the 4,500 billion to 5,000 billion figure. Yet, if my estimates are correct, we will have oil for the rest of the 21st Century. The real problem will be how to use that oil without wasting it through unacceptable consumption habits such as we have done so far, and—above all—without endangering the environment and climate of our planet.