Use access key #2 to skip to page content.

Are We Running Out of Resources?

Recs

40

February 28, 2011 – Comments (22)

A good, short explanation of the economic myth that we are running out of resoures, focusing on copper and oil.

David in Qatar 

22 Comments – Post Your Own

#1) On February 28, 2011 at 9:23 PM, valunvesthere (< 20) wrote:

Approximately ¾ of the world is water and ¼ is land. Alot of the oceans underneath is undiscovered.

At present GASSES & OIL is the only resources being explored and retrieved from the great depths of oceans with our present technology (room for improvment). We don't have technology to explore and retrieve mineral deposits beneath the oceans although there may be abundance there.

Alot of the land on the world is uninhabitable deserts, mountains, polar caps and etc. which may be rich in minerals.

Valunvesthere

Report this comment
#2) On February 28, 2011 at 10:00 PM, Valyooo (99.33) wrote:

This was the most helpful video on this topic I have ever seen, yet it was so simple.  I would give it 20 recs if I could.

Report this comment
#3) On February 28, 2011 at 10:16 PM, binve (< 20) wrote:

Fantastic video David! Just awesome. Simple and straightforward. Thanks for sharing!

Report this comment
#4) On February 28, 2011 at 10:22 PM, Diagoras (89.19) wrote:

Thanks for posting this video. By the way, have you ever heard of the Simon-Ehrlich wager (Wikipedia)? Julian Simon (author of The Ultimate Resource) had bet Paul Ehrlich (Malthusian statist/ecologist) that the prices of several natural resources (chosen by Ehrlich) would fall in inflation-adjusted terms. Ehrlich lost by a considerable margin (three of the five commodities fell in nominal terms, and all fell in inflation-adjusted terms).

Of course, Ehrlich then won a MacArthur Fellowship. It's funny how he wasn't completely discredited by his book The Population Bomb where he claimed that the worldwide death rate would skyrocket and population would collapse in Malthusian catastrophe during the 1970s. 

Report this comment
#5) On February 28, 2011 at 10:24 PM, Valyooo (99.33) wrote:

Diagoras?

How is the ultimate resource?  I am debating getting it from my library but I have a long list to read, is it worth the read?

Report this comment
#6) On February 28, 2011 at 10:25 PM, Valyooo (99.33) wrote:

Also, I think the more important question than if we will run out of resources, is how much more can the earth use of its sink sources before we have ridiculous environmental damage?

Report this comment
#7) On February 28, 2011 at 10:27 PM, topsecret10 (< 20) wrote:

  We will run out of PHOSPHATE (to grow food) before we run out of anything else....  without food, what else matters ?  http://www.resourceinvestor.com/News/2010/10/Pages/Peak-Phosphate-Spells-End-of-Cheap-Food.aspx

Report this comment
#8) On February 28, 2011 at 10:30 PM, topsecret10 (< 20) wrote:

http://phosphorusfutures.net/peak-phosphorus

Report this comment
#9) On February 28, 2011 at 10:45 PM, Diagoras (89.19) wrote:

@Valyoo: I must admit that I have not read The Ultimate Resource yet, although I have read other works by Julian Simon, and he seems to be a good author. I have read about the basic argumentsof The Ultimate Resource, and his reasoning for his arguments is quite strong. Still, I think I'll get the book if only for all of the empirical examples he includes regarding specific resources and situations.

Report this comment
#10) On February 28, 2011 at 11:00 PM, alstry (34.93) wrote:

Up until now we have not run out of resources......

Through current times, there has been on a relatlvely small percentage of the world's population consuming resources.

Now, BILLIONS and BILLIONS more want to consume too.....especially as they become producers.

It is amazing how so many get lulled into extrapolating history into the future without appreciating  the changes and the law of compound numbers.

But the Titanic could never sink either....and the Twin Tower were each designed to withstand a direct impact from a 707......

Report this comment
#11) On February 28, 2011 at 11:36 PM, checklist34 (99.69) wrote:

rec, thats what I'm talking about!  But that won't ever make headlines or a good scream-fest on zerohedge...  so thats probably one of the few times it'll get posted.

cool vid

Report this comment
#12) On February 28, 2011 at 11:37 PM, ChrisGraley (29.63) wrote:

(clap, clap, clap.) Why is it that common sense on this topic has been ignored enough to where simply restating it is groundbreaking?

Now all that being said, we will eventually run out of oil. In fact I believe that we have hit peak oil.  Oil takes so long to create and is used so quickly by the world that I think that green substitutes will soon be cost effective.

Add to this the fact that Saudi Arabia is lying about their proven reserves and I think we will be caught unprepared, but will rebound quickly.

This will probably be a good thing for the world in the short term.

When transportation costs exceed labor costs, trade imbalances will melt away. 

Countries with other resources will see growth and countries that import necessities will see pain. 

The countries that see pain will need to concentrate on feeding their population over increasing their exports. The countries that are devoloped to the point exporting inflation will need to concentrate on training people to manufacture things domestically again. Pollution will drop. Domestic happiness will be greater all over the world and war mongering will be too expensive to pull off for a while.

People will be free because governments will need their populations to be happy and productive.

All of this will be a short period of time, because the world will find a good substitute for gasoline and the increased global competion will  eventually cause countries to exploit their populations again.

Please root for a quick depletion of oil because it will force the countries that exploit us to depend on us for at least a short period of time.

People that taste pure freedom tend to choke when governments try to force sacrifice again.

Some of you are old enough to remember when you were more free than you are now.

If you were like me, you were too busy to trying to succeed to notice the slow erosion of your freedom until it was too late to do anything about it.

You did digest it, albiet slowly.

Are you willing to swallow poison a second time?

The best thing about the reshuffle of the deck is that you get another chance to rethink the cards.

Are you going to allow the same things to happen twice?

Are you in love enough with history to hope that it repeats?

Both sides seem to want you to trade your freedom for something. When you get it back, will you trade it as easily the next time?

There will also be peak water for a short time and that may give us a 3rd time to pick freedom over the safety of a government that robs us by exploiting our fears.

In so many countries, people traded their freedom for something. All the revolts that you are seeing in Africa and the Middle East right now are people upset about not getting what they traded their freedom for.

It will happen here too, but not for a while. Hopefully it will happen when we are trying to rebuild our manufacturing base because we can't afford the transportation costs of imports from countries that exploit labor. Politicians without escape plans are much more accomodating.

I've said it so many times and hopefully people are listening. Absolute power still corrupts absolutely. Power will peak before oil and water does. 

 

Report this comment
#13) On February 28, 2011 at 11:54 PM, whereaminow (< 20) wrote:

I'm glad everyone liked the video. If I come across more, I'll be sure to share them.

David in Qatar 

Report this comment
#14) On March 01, 2011 at 12:24 AM, JakilaTheHun (99.93) wrote:

Great explanation. 

Of course, this is also the reason why I'm considering betting against copper right now.  Once prices become high enough (and stay there for a reasonable period), all that happens is that new supply is opened up. 

I don't expect oil to stay over $100/barrel for too long, either, as there is an abundance of North American oil; the only reason we haven't extracted it yet is because the costs are high enough so that it's not necessarily profitable when oil is at $50 - $60/barrel.  If oil stays above $90/barrel for a few years, I imagine the North American supply will increase. 

 

This video also provides the basic backdrop as to why I don't believe commodities are a good investment right now.  The manufacturers of end-products are always trying to find ways to lower costs via substitutes or decreasing the need for higher-cost inputs. 

Report this comment
#15) On March 01, 2011 at 12:35 AM, Valyooo (99.33) wrote:

Jakila,

Are you sure about that $90/barrel figure?  I thought the wildcatters needed oil at like $100-$110 minimum before they start drilling?

Report this comment
#16) On March 01, 2011 at 12:57 AM, dbjella (< 20) wrote:

There drilling oil like crazy in ND.  I am not sure what the $ figure needs to be, but they have been drilling for years.  If people want jobs, then they need to travel to ND.  

As a kid, I use to laugh at the parched land and acres and acres of nothing.  Not laughing now.

Report this comment
#17) On March 01, 2011 at 1:52 AM, awallejr (85.46) wrote:

Except the lesson learned is well maybe we won't run out soon, but it will keep getting more expensive to find the stuff.  And then we will run out, unless alternatives are incentivized.

Report this comment
#18) On March 01, 2011 at 2:00 AM, JakilaTheHun (99.93) wrote:

Are you sure about that $90/barrel figure?  I thought the wildcatters needed oil at like $100-$110 minimum before they start drilling?

It all depends on the particular oil deposit.  I'm sure there are some deposits where it is $100 - $110.  I've heard figures ranging from $80 - $100, generally. XMFSmashy could probably give you dmuch more reliable information than I could.  I only have an idea about the general ranges.

Report this comment
#19) On March 01, 2011 at 2:17 AM, Valyooo (99.33) wrote:

Thanks for the tip, I will start reading through his blogs for relevant information.

Also, do you still like DFS?  I haven't ran through their numbers yet but I love using them in real life, and they seem to have a lot of growth left since a lot of people don't use them yet.

Report this comment
#20) On March 01, 2011 at 2:30 AM, Valyooo (99.33) wrote:

Another good blog by Horwitz

http://www.youtube.com/watch?v=i4oxBudRGVg

Report this comment
#21) On March 01, 2011 at 8:18 AM, MoneyWorksforMe (< 20) wrote:

Although I agree with the Mr. Horwitz that new supply gets opened up as prices increase and history tells us that there have often been supply concerns that were later found to be overdone, I would strongly caution the line of thinking that, "there will always be more supply somewhere else..." There is no doubt in my mind that human exploitation is far outpacing the growth of natural resources...There is a reason why these are called finite resources.

Mr. Horwitz is right about history, but at some point, in the not-too-distant future, people will be in search of a particular commodity as prices skyrocket,and there will be nothing left...As he mentioned, but did not--in my opinion--stress enough, we need to be looking feverishly for alternatives, man-made or natural... 

It's also important to remember that if all the easily accessible areas have been depleted, prices will become permanently elevated as companies have to work harder in terms of exploration and extraction of new deposits to keep up with demand...

 

Report this comment
#22) On March 01, 2011 at 8:35 AM, PeteysTired (< 20) wrote:

Except the lesson learned is well maybe we won't run out soon, but it will keep getting more expensive to find the stuff.  And then we will run out, unless alternatives are incentivized.

I think the point of the video is that the market needs profits as an incentive and "they" will seek new sources of supply or come up with alternatives.

As he mentioned, but did not--in my opinion--stress enough, we need to be looking feverishly for alternatives, man-made or natural... 

Why do you think we are not looking for alternatives?  Isn't this what the green movement is?  Or is there some other resource you are referring to?  To me, once oil reaches a certain dollar value, then the market will either use less or find alternatives.  Who knows?  Maybe we may be driving in electric/propane cars. 

What  is the level of population the world can support?  Not sure on that one, because here in the US we incent people to have children and we encourage immigration.

Report this comment

Featured Broker Partners


Advertisement