FedUpUSA

Archive for March 3rd, 2012

The European Central Bank is pumping money into the European banking system trying to head off a collapse. But worse is that China and the Bank of England are doing the same thing. One U.,S. presidential candidate, agrees in general saying, “Borrowing is OK”.

We are so fooked here in this country by our willful blindness….

Last year, Kirk Dorius and I travelled to London to participate in the kickoff of the Weinberg Foundation, an advocacy group for thorium energy.  I am pleased to announce with them the formation of an “All-Party Parliamentary Group” or APPG that contains members of both the House of Commons and House of Lords, to consider the potential of thorium as an energy source.

In a word, “Duh.”

Here’s the thing folks, when you boil it all down — thorium is a no-brainer when it comes to a nuclear fuel and fuel cycle, assuming you want power and not bombs.  It also is the enabling pathway to petroleum independence without changing the consuming end of the pipeline.

Many “green” evangelists are all ga-ga over electric cars.  But they forget that while chargers are quite efficient (~80-85%) and electric motors are too (~85% for the best of what we can offer today) the fact remains that batteries have a crap energy density (meaning the amount of energy the contain per unit of both mass and volume is poor), they have a poor energy acceptance rate (how quickly you can charge said battery, requiring hours .vs. minutes to fill a fuel tank) and in addition they simply shift where the energy production takes place (to the coal plant behind the undesirable neighbor’s house.)  In other words they simply move the exhaust pipe instead of getting rid of it.

Indeed when you stack the inefficiencies electric cars don’t look so good.  A typical gasoline or diesel car is somewhere around 30% efficient end-to-end (that is, the number of BTUs of energy that go into the fuel tank .vs. the amount of energy that actually moves the car.)  The rest is lost as heat in some form or fashion, whether out the tailpipe, rejected by the radiator or as friction somewhere in the middle.

But neither do electric cars.  When we stack efficiencies we see the problem quite quickly:

30% (conventional nuclear or coal) to 50% (combined-cycle such as natural gas) at origin. 90% efficiency in transmission (transformers, loss on the electrical line, etc) 85% efficient (battery charger) 80% efficient (battery itself, assuming 50% charge state — much less at 85%+ of full charge, perhaps as little as 50%) 85% motor, controller and gearing (in the car) ===== 15.6 – 26% end-to-end

Oops; that’s no better and if you start with 30% gross at the generating end it’s actually worse!

So the argument for “energy efficiency” doesn’t work in favor of electric.

Why does this mean we should use thorium?

Simple — thorium reactors can be run not on pellets of fuel as conventional reactors using water as both a moderator and coolant, but rather with the fuel dispersed in a molten salt used as the working fluid and a fixed moderator in the reactor chamber.

This is a huge win for a number of reasons:

• The reactor runs at much higher temperatures. Typical operating temperatures are in the 550-650 Celsius range as opposed to water-cooled reactors which are limited by the critical point (374 Celsius); beyond that temperature irrespective of pressure water does not remain liquid.  This means that the heat of vaporization is zero, which in turn limits the useful working temperature of the coolant.  The other problem with water is that to approach the critical temperature requires containment at extraordinary pressures; 217 atmospheres to be exact (over 3,100 psi!)
• LFTR reactors run at normal atmospheric pressure.  A big part of the danger with conventional reactors comes from the properties of water at high temperature.  In order to keep it liquid you must hold it under extraordinary pressure.  Everything is much more difficult from an engineering perspective and any failure of that pressurized state is catastrophic as the water instantly flash-boils to all steam, resulting in the reactor having no coolant!  This is also why a conventional reactor requires uninterrupted power all the time; you cannot allow the coolant temperature to go over the critical point and since the fuel produces decay heat after shutdown you therefore must provide continual coolant flow until that heat is extracted.  The failure of that continual flow is what led to the Fukushima disaster.  LFTRs do not suffer from this problem as they do not operate under high pressure.  If all power is lost at a LFTR plant the coolant containing the fuel can be allowed to drain by gravity into tanks where, with no moderator present, the reaction stops and it simply cools over time on its own.  This passive safety was tested and proved effective in the United States in the test plant operated at Oak Ridge some 40+ years ago!
• You can use the higher process heat level, up to 650C, to directly convert any carbon source to liquid hydrocarbons.  Coal happens to be a convenient source of both thorium and carbon, but in point of fact carbon can come from any source — including atmospheric CO2. The Germans figured out how to turn coal into liquid synfuel during WWII and we have refined that process since then.
• Reprocessing is continuous and online in form; the reaction products are thus nearly all consumed over time, producing a waste footprint that is a tiny fraction of conventional nuclear plants.  Conventional uranium-fuel-cycle reactors only have ~5% of the fuel material in the reactor that is actually fissile; the rest is bombarded over time.  Some turns into plutonium that can then be reprocessed and burned up, but a large amount of the remainder winds up as highly-radioactive byproducts that are dangerous for enormous lengths of time.  A commercial LFTR would be built with “online” reprocessing to separate out the neutron poisons (specifically Xenon) and introduce more thorium as the fuel is consumed.  The result is that most of the reaction byproducts remain in the reactor until they are reduced to less hazardous (or non-hazardous) elements and compounds; the decay heat released in this process also is harvested to produce useful energy instead of being dispersed in big cooling pools.

This is not necessarily a “cheap” oil replacement, but “cheap” is relative.  Can we produce $20/bbl equivalent oil products with this technology?  No.  Can we match $100/bbl oil?  Probably, and that’s the point — we can both produce electricity and 100% independent liquid hydrocarbons to fuel our buses, trucks and cars.

In addition we would be using a far safer technology than we use today for nuclear power.

I highlighted this alternative in Leverage for a specific reason — behind every unit of GDP is a unit of energy.  If we are to ever rationalize our federal government spending on all things, including most-particularly our military, we must become energy independent.

We proved that these reactors can work in the 1950s and 60s at Oak Ridge.  This is not “pie in the sky” technology or the subject of science fiction.  It is a matter of science fact that we can, if we’re willing, exploit to resolve our domestic energy requirements.

It appears that Britain is going to join China and India in heading down this road, leaving America behind.

We cannot afford to be left behind.

The unemployment rate in the eurozone is now 10.7 percent.  That is the highest the unemployment rate has been since the introduction of the euro.  The unemployment rate in the eurozone never got any higher than 10.2 percent during the last recession.  This is very troubling news.  It was just recently announced that the eurozone has entered another recession, and already the unemployment rate is hitting new record highs.  So how bad are things going to get in the months to come?  The truth is that the problems for Europe are just starting.  The European sovereign debt crisis continues to get worse, and another major global financial crisis is going to be here way too soon.  The EU as a whole has a larger population, a larger banking system and more Fortune 500 companies than the United States does.  When the financial system of Europe crashes, the entire world is going to feel it.

Some of the unemployment numbers coming out of Europe are absolutely staggering.

Unemployment in Spain is 19.9 percent.

Unemployment in Greece is 23.3 percent.

And when you look at youth unemployment the numbers are far worse.

The unemployment rate for workers under the age of 25 is 48.1 percent in Greece and 49.9 percent in Spain.

If you look carefully at the photos of the austerity riots happening in Spain and in Greece you will notice that the vast majority of the protesters are young people.

Instead of getting better, the unemployment numbers in Europe just keep getting worse.  Many analysts were shocked by these new numbers.  The following is from a CNN article….

“This is appalling,” said Carl Weinberg, chief economist at High Frequency Economics, highlighting that the unemployment rate following the collapse of Lehman Brothers peaked at 10.2%.

Appalling indeed.

The frightening thing is that we haven’t even had a major financial crisis in Europe yet.  So far, the powers that be have been able to keep Greece from defaulting and have been able to keep major banks all over Europe from collapsing.

But there are quite a few signs that the “moment of reckoning” for Europe is rapidly approaching….

-The European Central Bank announced on Tuesday that it would no longer take Greek bonds as collateral from European banks. That is a really bad sign.

-Major European banks are revealing unexpectedly huge losses on Greek debt.  The following is from a Reuters article….

The scars of Greece’s debt crisis were laid bare in heavy losses from a string of European banks on Thursday, and bosses warned the region’s precarious finances would continue to threaten economic growth and earnings.

From France to Germany, Britain to Belgium, four of the region’s biggest banks lined up to reveal they lost more than 8 billion euros (6.8 million pounds) last year from their Greek bonds holdings.

“We are in the worst economic crisis since 1929,” Credit Agricole chief executive Jean-Paul Chifflet said.

-The International Swaps and Derivatives Association has ruled that the Greek debt deal will not trigger payouts on credit default swaps.  This is going to make it less likely that private bondholders will voluntarily agree to the debt deal.

This ruling is also seriously shaking confidence in credit default swaps.  After all, they are supposed to be “insurance” in case something happens.  But if they aren’t going to pay out when you need them, what good are they?

-Voters in Germany are sick and tired of pouring money into a black hole.  One recent opinion poll in Germany showed that Germans are overwhelmingly against more bailouts for Greece.

Some German politicians are becoming very open about their feelings for Greece.  For example, Interior Minister Hans-Peter Friedrich said the following in a recent interview with Der Spiegel….

“Greece’s chances to regenerate itself and become competitive are surely greater outside the monetary union than if it remains in the euro area.” He added that he did not support a forced exit. “I’m not talking about throwing Greece out, but rather about creating incentives for an exit that they can’t pass up.”

-In Greece, news publications are openly portraying German Chancellor Angela Merkel as Hitler.  Far left political parties that oppose the bailouts are surging in the polls and anger and frustration are reaching unprecedented levels.

The following is from a recent article in The Guardian….

There is a growing animosity towards Germany on the streets of Athens. Angela Merkel bears most of the hostility with one of Greece’s newspapers last week mocking the chancellor up as a Nazi on its front page.

Niki Fidaki, 40, says Greeks are angry at Germany and the troika’s demands for higher taxes and public services cuts. “People can’t afford to pay the tax. My pay has gone down, but my taxes have gone up. But, I’m a lucky one – half of my friends don’t have jobs. Greeks hate that they are asking us to pay all the time when we don’t have the money. Families have no work, they have kids to look after but no money to pay for anything.”

As I have written about before, Greece is already going through a devastating economic depression.  The people of Greece are not in the mood to be pushed much further.

The eurozone is a powder keg that could explode at any time.

So why is the U.S. economy doing so much better than the European economy right now?

Well, a big reason is because we haven’t seen any austerity in the United States yet.

Barack Obama is funding our false prosperity by borrowing 150 million dollars an hour from our children and our grandchildren.

Of course all of this reckless borrowing is going to make the eventual collapse of our financial system far worse, but right now Americans don’t seem to care.  The only thing the mainstream media seems to care about is that some of our economic numbers are getting slightly better.

The sad thing is that our government is spending a lot of this money on some of the most stupid things that you could possibly imagine.

Did you know that the Obama administration just spent $750,000 on a brand new soccer field for detainees held at Guantanamo Bay?

I wish I had a $750,000 soccer field to play on.

I would love that.

Look, when the federal government quits stealing more than a trillion dollars a year from future generations things are going to look a whole lot different in this country.

So pay attention to what is going on in Europe.

That is where we are headed eventually.

The Economic Collapse

The world is changing and few people understand the implications. Old rules and guidelines which worked for generations no longer apply. Profound changes, termed “discontinuities” by the late Peter Drucker, have obsoleted them. For those accustomed to linear change, there is a  new normal. Mr. Drucker described a discontinuity as a change so profound that normal extrapolation of the past would produce misleading forecasts.

The most profound change the world faces is the future role of government in relationship to its citizens. Here are a few of the unsettled issues:

• Are citizens going to allow government to continue to grow at the expense of the productive sectors around the world?
• Can economies prosper as government becomes a larger section of the economy?
• Does government work for the people or has this relationship been inverted?
• Once government has reached a certain level of power over citizens, is it possible for people to ever reduce its control and power?
• Will what appears to be inevitable sovereign bankruptcies destroy economies, welfare states and societies themselves?

Short of the disruptions associated with a World War, there has never been as much uncertainty regarding the future. For the US, isolated by geography from most wars, the current situation has no comparable other than the Civil War. What is happening is not understood by the masses. For them, this crisis is another economic problem, just another recession albeit one that is harsher and longer than previous ones. For them, it will eventually pass like all others.

The reality is that this crisis is less an economic crisis than a political crisis. In raw terms, we are at a crossroads between freedom and slavery. Are the elites going to enslave the producers? That is the critical question, and this issue is also the causal factor behind what is perceived as just another economic crisis.

Sadly, many citizens do not recognize what is at risk. If it were merely the standard of living for the next generation, this crisis would be serious but not fatal. That is trivial compared to the risks to freedom and the future of civilization and peaceful coexistence itself.  Social cooperation, innovation, liberty and progress are in play. If government suppresses its citizens, the world will enter another dark ages in terms of economy, peace and humanity.

Government, the so-called custodian of civilization, precipitated the economic crisis as a result of their desire to control everything economic and personal. Nowhere is this more apparent than their favoritism to financial institutions who reciprocate favors back to the political class.

As economic conditions worsen, government ratchets up its efforts to control and dominate individuals, information and outcomes. We are in uncharted territory, at least for the modern, developed world.

The force that created the crisis is unwilling to admit error or relinquish control. Despite deteriorating economic and social conditions, government appears determined to exploit these conditions to obtain more if not total control over its citizens. In poker parlance, government has gone “all in.”

The alternatives are clear. That State can be dismantled or it will assume total control. We can descend into the totalitarianism that plagued most of mankind for much of  history or we can once again become masters of the government. There is no other outcome! It is one or the other.

Monty Pelerin – Economic Noise

Well, no, that would be a bit arrogant — Dave has been talking about this stuff for a long time.  But it is rare to see something like this in print:

Stockman suggests you’d be a fool to hold anything but cash now, and maybe a few bars of gold. He thinks the Federal Reserve’s efforts to ease the pain from the collapse of our “national leveraged buyout” – his term for decades of reckless, debt-fueled spending by government, families and companies – is pumping stock and bond markets to dangerous heights.

Uh, not just dangerous heights, unsustainble ones.

But where Dave doesn’t go, and should, is that it is in fact the government that provides most of the fuel for these games via deficit spending.  Without it there would be none of the “official distortion” as there’d be nothing to engage in it with.

So let’s point the finger where it really belongs, shall we?  It’s not just a problem with banks, or The Fed.  No, the real rot lies in Congress, which loves to make political promises to spend money they don’t have, and then egg people on in blowing bubbles to cover up their malfeasance.

The problem is that all compound growth functions eventually terminate.  They must, becasue it is physically impossible to have compound growth in a finite place on an indefinite basis.  Yet nobody ever asks “but what about the groth ends?” when people talk about 3% inflation, 4% GDP growth, or the roughly 3% spread between debt and GDP accumulation over the last 50 years, just like nobody said “what happens when the 10% growth in house prices stops?”

The answer to that, if you’ve loaded up on leverage, is always the same:

Read the rest — it’s good — but don’t point fingers just at the private sector.

But for the government — either in its refusal to prosecute frauds or its intentional overspending — none of these games would be possible.

The head of the snake resides between Constitution and Independence Avenues, both words that have become utterly foreign to the viperous traitors within.