Bellyache

My belly's starting to hurt again.

Like it did an the end of 2004. As oil prices were beginning to push ever higher and the real estate bubble was becoming quite apparent for anyone with eyes in their heads. Markets were "recovering" as easy money, debt and deficite spending filled the books - while the troops were coming home from neither Afganistan nor Iraq.

Collapse was imminent.

Of course my timing was way off. For the momentum of the situation was only starting to kick in. My recommendation to sell excess real estate was mildly disregarded by family and friends who had no reason not to ride the continuing incoming tide of liquidity. I was reacting to the data blips by seeing the impending crack in the dikes.

The flood came instead three and a half years later - not good timing for a market prophet wannabe.

At the same time, I was actually an observer from the highlands, I must admit. We bought our house in partially deflated Munich - while watching the bubble inflate in "the rest" of the world. Not because we played the market right but because our landlords were selling and were not planning on waiting for higher prices.

And since housing was hardly touched in the 2008/09 crises and has certainly appreciated since then in Germany, our timing could not have been much better.

But back to my bellyache. Collapse did not come in 2004/5 like my bellyache suggested it would. Instead, I was years off. Rising money supply meant rising markets and only in the second or third step resulted in a bursting bubble.

And so it is again, I'm afraid.

Money supply is beginning to speed up. I'll see if I can get a chart in on that.
[Edit (March 5th):



Thanks Gordon Harms.
I'll try to update that in a while, so that you can see what the situation is like right now..]

Now, I wouldn't necessarily suggest buying something like real estate, at least not in the suburbs, as an investment, simply because it's hard to get rid of it once the market turns sour. At the same time, cash is not necessarily king, for it might just take a couple of years before deflation begins rearing its ugly head again.

For the central bankers have opened the floodgates to reflate the world's economies. Quantitative Easing. Trying to get the jobs back. And filling up the containers shipped to and fro China.

Gold keeps rising.
And oil.
And anything else that can't multiply when money=debt is doing the same.
Like stocks for a while too.
Or better yet: Start planning your IPO Now. Or better, just sell the company and get out!
Because: 2015 cash will once again be king.

That is, if my belly has anything to say about things.

2012 is probably not the end, at least not for the bulls surfing the tide of liquidity.

Planets ahoi!

Out of the most recent planetary search and research reports – resulting from the Kepler outer space observatory data – are emerging quite exciting findings.

The first indications are that we are going to find quite a lot of planets in every possible star system (binary, etc..) out there. This is, of course, what we’ve hoped to find but what hasn’t been confirmed til now.

What is a surprise is that there may be 10x as many planets between the stars as in orbit around the stars! Statistically speaking this may seem to be a lot. For there would then be around 90 planets (at least as large as Pluto) between our solar system (let’s call it "Solaria" for simplicities sake) and halfway to the closest stars, meaning within a radius of ca. 2.5 light years from us. There might also be a brown dwarf (failed star) or two (or at least a couple of super Jupiters), probably with their own planets, which haven’t been discovered either, dethroning Alpha Centauri as the closest stellar object.

Like I said, it might seem like an enormous amount of spherical potential out there.

Now for the sobriety: Just think of using one of these planets on the way to Bernhard’s Star or to Alpha Centauri. What are the actual chances that there be anything useful somewhere between here and there?

Well, not much higher than 0%.

But even if one of those objects is useful – a superearth with an icy surface e.g. – it could mean a lot for interstellar space exploration as a relay station or as a permanent base. Only, we have to find it first, which will certainly prove to be like looking for the proverbial needle in the haystack.

The second quite positive piece of news is the discovery of a particular planet, a super earth mostly made of water: GJ1214b. In itself great news, but even better is that it’s only 40 light years away: Exploration is possible!

Which brings us back to colonizing planets. Moon? Mars? Venus? What's next?

Let’s start with the Uninhabitable here on Earth first.

Defining Peak Oil

"There’s nothing new under the sun," saith Qohelith. And although we sure don’t feel this way nowadays, especially in talking about gene technology, i-pad and co and other cybernetics, there’s one discussion that hasn’t changed in the last 100 years – even if the vocabulary is new and exciting.

But let’s start in modern times. For the Peak Oil movement, the modern way of looking at oil production and depletion had its 55th aniversary 2011, commemorating the M. King Hubbert’s speech before the American Petroleum Institute where he made the prediction that the United States was about a decade away from reaching its peak in oil production. This event is generally seen as occurring in 1971 as especially Texan production began its first stumbling act. 1981, as oil prices were pushing all time highs, a second but lower peak occurred as Prudhoe Bay came on line. Boy, were those good years for an oil producer.

Now, going back to Qoheleth:
Hubbert was a Technocrat who, of course, looked for technical solutions for our everyday problems. Even back then oil defined America’s energy paradigm, so Hubbert’s solution was on the energy track, coaxing the Powers that Be to turn full fledged to atomic energy. Well, yes, since then the energy discussion has been pretty much framed.

In the 1980s, our high school discussion with our catholic ethics teacher followed these lines: Oil, nuclear, solar. Btw, Thomas Edison was convinced (ca. 1930) that our future would be solar. He did, however, get a couple of things wrong, like direct current vs. alternating. In the last 30 years, the only thing new (again, "old") in the discussion is the addition of wind to the mix. Meaning, today we discuss passionately oil, wind, solar and nuclear. The lines may fuzz a bit til something like Fukushima happens, when suddenly Germany, with the most secured nuclear reactors in the world and with much less plate-techtonic risk than most countries in the world, outlaws domestic atomic energy.

Go figure.

Anyway, the lines regarding oil are fuzzing up again especially in the U.S. because of various tight-oil (and gas, of course) plays that are incredible local phenomena but show hardly any influence in the larger scheme of things. Oil is staying quite stubbornly around $100 a barrel, making quite a few smaller formations profitable. At the same time, discussion turns back to Mid-East politics and again to the topic of peak oil. Since the term is as ambiguous as the science of climatology (yes, I love to talk about the weather just like the next guy), and since I will be referring to it time and again, I’ll side up here with Chris Nelder and his definition:

I feel compelled to, once again, try to set the record [about peak oil] straight.
"Peak oil" refers to the maximum rate of production of regular crude oil. Period. It’s a number.
It is not a theory.
It does not mean "running out of oil."
It is not the moral equivalent of Malthusianism.
It is not a political movement, or a religion.
It’s not a dessert topping. It is not a floor wax.

It is not about oil reserves (oil that has been proved to exist and to be producible at a profit), or resources (oil that may exist in the ground, irrespective of its potential to be produced profitably). Those quantities do play a role in estimating the peak, but do not determine it in any way.
"Peak oil" is not the same as "the end of cheap oil," although the latter is also true. Price is not a proxy for production.

"Unconventional" liquids such as biofuels, natural gas liquids, synthetic oil made from bitumen in tar sands or from kerogen in shales, and liquids made from coal or natural gas are not regular crude oil, nor are they equivalent to crude on several important counts. When you’re talking about unconventional liquids, you are not talking about oil, and lumping them in with oil does not increase the volume of oil. That’s why it’s called "peak oil" and not "peak liquid fuels."
This is why I insist on the term "tar sands." They contain not oil, but bitumen, a low-grade hydrocarbon which is a tar-like solid at room temperature, and must be upgraded with substantial inputs of energy to turn it into a synthetic oil. Calling them "oil sands" is nothing but a PR stunt.

etc.. (http://www.smartplanet.com/blog/energy-futurist/the-politics-of-peak-oil/326)

If anyone wants to talk to me about oil, prices, energy and markets, they need to know what I’m referring to when I talk about peak.

And although I’m basically with the crowd of "Thanksgiving day 2005", the chart says we’ve reached not a peak but a plateau:



Source: http://gregor.us/wp-content/uploads/2012/01/Global-Average-Annual-Crude-Oil-Production-2001-2011.png

And thanks to Gregor Macdonald who is going to end up getting his little chart shown everywhere, just because he's capable of putting an excel chart together.

Top of the mornin’ to you.

Potential Energy (musings on a siberian-cold day)

When we talk about potential energy we usually think of water at the top of a waterfall or – far less beautiful but much more supportive of our energy paradigm – water behind a damm. The higher the water level, the higher the potential energy. It’s easy to figure out how much energy (kinetic) will be released once water is allowed to flow out of the bottom of the damm – usually to drive a turbine to make electricity: mass of the water (m) times the gravity (g) times the height (h) of the water (E=mgh or E=9.81m/s2 x gh).

A liter of water at the top of a tree (25 meters) without atmospheric friction:
E = 1kg x 9.81m/s2 x 25m
E = 245.25 Joules or (if one liter fell per second) 245 Watts.

Or better: A coffee mug sits on the edge of the counter and has a perfectly calculable potential energy: weight times height times gravity. The cup is bumped and falls off the edge; energy is released. The expended energy destroys the cup, or (if you’re lucky) work will have to be done to restore the potential energy: The cup needs to be picked up. I assume the glass splinters will have to be swept up as well (again, work) in order to work against the forces of entropy.

Looking at the world with the eyes of potential energy, there are enormous forces to be released. We’re all ready to fall off a cliff – we flatlanders just know that there’s an end/edge to the world out there to fall off of!

If I were to fall to the middle of the earth, my energy would be:
77kg (I knew you were curious!) x 6,800,000 meters x 9.81m/s2
= 5.14terrajoules

That is, if the earth (i.e. the earth’s gravity) were a point and gravity were the same all the way to the middle as "out here" (where all the earth is to one side of (below) me). Even if we were to get 2/3rds out of the fall (not talking on the level of efficiencies or friction yet, just gravitational forces) it’s still 3.4TJ.

Five of me would have to fall per second to get to the 16Terawatts needed to run the modern world. Not that much, is it!? Assuming, of course, that the middle of the earth would never get full of me. (Or is that "mes"?)

The problem is that we tend to consider potential energy only in the realm of gravity. The principle, however, can be applied to every sort of energy: Atoms have an enormous potential before we split them. Molecules have an enormous potential before they’re oxidized, while the air and oceans have an enormous potential due to pressure making the helium (lighter than "air") or gas bubbles rise.

In my opinion, however, the greatest – or at least most harvestable – potential lies in heat, the very thing we see now as Enemy Nr. 1 resulting from CO2 emissions.

Heat is seen in physics as the waste element of physical processes. Once dispersed, it’s dead.
The End.
Game over.
Maybe its last service will be bringing your environment up to a cosy 22°C before it radiates out into the night air. And then is gone forever.

Well..

Even on the coldest day in southern Germany this year at -15°C (in the night it was colder), there’s more than plenty of heat around. Water will freeze, but Ammonia e.g. will boil! In Kelvin (degrees C above absolute zero), that’s still plus 258°! There’s enough heat in one liter of ice at that temperature, for instance, to melt 4 liters or to boil 0.5 liters at their phase-change points.

Or the other way around:
16Terrajoules will take 15.000 kilograms (= liters when liquid) or 15m3 of this cold ice to reach absolute zero. Meaning, 15 cubic meters of water frozen (i.e. 15,000kg) and 15°C below Zero cold per second would be enough to power all of mankind’s present energy needs.

Well, how much steam changing its phase to liquid, all within a range of 1° ? Looking above at the fact that the heat would boil 0,5 liters, we see that steam has double the energy that we used above, meaning 7,500kg of steam (its "weight" after it turns to liquid) would power the world’s energy needs! If, of course, it could be converted 100%.

But, like I said, this is potential energy, so we don’t need to worry about such things as efficiencies, frictions, etc... Let’s stay in our ivory tower for now;-)

With this example, I’ve already demonstrated how much potential energy is in the warm (or cold) world around us. Besides, this type of potential energy is not so theoretical as a man standing on solid ground waiting to fall to the middle of the earth. We use it in everyday life all over the place – in our refrigerators, air conditioners and electric heat pumps. Only – of course these processes are energy eaters or "sinks" on the one side while providing a bit of useful energy (usually heat or cold) on the other.

With these theoretical thoughts in the back of my head, I’ve been working on a method (which I am in the process of patenting) to combine 2 different potential energies to evoke mechanical energy – which is directly convertable into electrical energy. Or think of it this way: like one hand washing the other, one potential is another energy’s kinetic and vice versa.

You’re more than welcome to check my math. And, yes, I’ll keep you posted!

Island Builders

Before I try to deal with the second restraint that our civilization is facing, I’d like to talk about space. Not how much I love it (and would much rather work for NASA or for Elon Musk than for my present employer) nor about the question of whether we should go to Mars or not – a question which will certainly come up later. What confounds me is:

Where are we on the space time line?

50 years ago, the space race had just begun and Kennedy made his famous speech about choosing to go to the moon. Not even a decade later (now that's a race!) this choice had already become reality. Mankind had made the giant leap.

But 43 years after Niel Armstrong made his one small step, we don’t seem to be even one milimeter further in physical space exploration.

Why not?

Well, mostly because there’s nothing "out there" that we actually need. Vacuum. Space dust. Deuterium we could mine out on the moon as a fuel for fusion – IF we ever figure out fusion in a box. But (Space) 2001 and 2010 have come and gone without any resemblance to A.C. Clark’s books of the same name being apparent.

Where are the spinning space stations making centrifigal "gravity" for its earthly inhabitants?
When will we be finally able to book a trip to the moon?
And what are we going to do "out there" once we get there?

Colonize?

Well, getting out there has hardly changed the last 50 years. Chemical propolsion with an expanding gas being shot out the tail of a rocket while the rocket and payload experience an equal and opposite reaction – up through the atmosphere and into space. At least coming back to earth began working like using an airplane, btw still a 1970s’ technology, while the space shuttle was in commission.

But what now?

We still don’t have a better way to get off the planet than throwing stuff out the tail of a rocket. Without an existential goal (no, tourism just won’t do it, I fear), or an extremely cheap way of getting out there, we’re pretty much stuck on earth.

But let’s not give up on space. At the same time, we need to admit that we won’t be getting past drone probes being sent on scientific missions any time soon. At least we're finding out now a bunch about what's out there.

And let’s forget trying to put anyone on Mars for a good while. Instead:

Let’s colonize the Earth!

Its desserts, its high seas, its atmosphere, its (sometimes quite deep) underground. I’ll admit that this may sound rather boring, but it has a huge number of challenges that need to be solved, helping us with the task of colonizing much less hospitable worlds "out there". And we'll finally be making Jules Verne’s visions a bit of reality.

Why search for the new world when the old one has hardly been colonized/explored? Why not try (instead of building a space station) to build an "atmosphere" station at 30km, where this part of the world can be explored? And, of course, work on its self-sustaining characterics, planning missions that may someday be months and years from home?

Maybe it will end up being mankind’s first small step to moving to the atmospheric appartments of the Jetsons and let nature grow back onto the fruitful plains and forests we have been turning into suburbs and parking lots?

And in comparison to some of NASA’s manned missions, it is most certainly doable: constructable, reachable and somewhat affordable - we don't need to reach a speed of 7miles/second to reach it. Maybe it will end up even being profitable. A room with a view might just attract a new type of convention visitor.

And then, after getting these settlements going and having perfectioned transportation up 30-100km in the sky, then we can worry about building space elevators into the uninhabitable reaches of the Moon and Mars.

Island building -- somewhat closer to home.