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what's new, eh? ...
.Peak
Oil Depletion
Tracking of Projections for
Regular Conventional Oil ...
Colin Campbell drawn from Retirement for 2010 update
Quarterly Production
for the Top 7 Nations
World
Production Records ~ 2010 setting new Annual Record ~ new
Quarterly Record set in Q1 ~ Monthly Record poised for January
the
Gas Pump
~
USA Gasoline Price Components & Crack Spread
~ New Car Sales poised to Collapse in Q1 upon $3.42/gallon ($92/barrel)
Barrel Meter Compared to Recognized Long-Term
Crude Oil Price Forecasts ~
EIA raises 2035 target to $224/barrel
Barrel Meter ~ $92/barrel
Oil ($3.42/gal pump) in 2011Q1 Could Decimate USA New Car Sales
(again) ~ View our 1-yr, 5-yr, 10-Yr & 25-Yr Price Targets
June
Update of our
Peak Oil Depletion Scenarios Presentation:
19-Model
Tier-1 Avg indicates
Peak Oil Target is
94-mbd
in
2024
June
Update
of Freddy Hutter's Peak Scenario
2200
Model:
Catastrophic Supply Decline Starts in 2051 (Peak: 102-mbd
in 2030)
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Scroll down for this
month's newest TrendLines charts ... or click "what's new"
links to go to direct to topic desired, or visit our major
category venues above... |
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what's new, eh?
...
.Climate
change , Economics & Politics
econ
Canadian Recession
Meter
infers
7.8% GDP
in Q2, but StatCan says May was only 4%
econ
USA
Recession Meter
infers
-2.4% GDP
by October (Q3) & Double-Dip
econ
~ Monthly update of TrendLines
Realty Bubble Monitor:
Australia
$150,000,
UK
£88,000,
Canada
$80,000 &
USA
$6,000
poli
MP
Riding Projection
for the
2012
Canadian Federal Election
poli
Seat Projection
for August 2010 Australian Election
econ
Global Scene:
Q2
GDP is
3.5%
~ Trade up 18% from 2009 low ~ no G20 nations in Recession
econ
USA Debt Meter
~ National Debt to inspire Bond Vigilante Crisis in
2019
econ
USA
REAL
Unemployment Rate
stubbornly slides to
16.5%
in June from
17.4%
high in October
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Scroll down for this month's TrendLines
charts ~ click graph for more background or topic venue
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click chart for 60-yr graph, expanded
discussion & more Canadian, USA &
Int'l macro economics... |
July 30th
~
Economic data released by StatCan today reveals Canada enjoyed a
4.0% Real GDP annualized growth rate in the 90-days ending May,
down from 6.2% in January, 5.9% in March (Q1) & 4.8% in April. The
May
figure is far below the comparable 7.5% figure inferred by the
TrendLines Recession Meter and its analysis of leading indicator
data. Our forward looking Index projects an even higher growth
rate of 7.8% in June (Q2).
StatCan's
pessimism continues a divergence between the two metrics that
commenced in March. TrendLines has been projecting a downturn
since
December, but the StatCan version seem to us slightly
premature. We expect some upward revisions to bring GDP more
in line with our interpretation of recent economic activity.
By measure of our economic activity
Index, it would appear on first glance Canada's $62 billion Economic
Action Plan, proposed in January 2009, should have been pared by
half. On the other hand, with the Unemployment Rate stubbornly
at 7.9% (after a high of 8.7%), the excess stimulus is a welcome aid in
getting the Rate
back to the pre-Recession low of 5.3% in 2007. In the absence
of Inflation, Bank of Canada has been tolerant of this quest for
full employment. Pleasantly surprising tax revenues and
royalties resulted in the annual Federal Gov't Deficit being $47 billion ... $7
billion less than forecast.
The projected drop in growth rate to
2.3% GDP, as early as September, is mostly attributable to
consequences of a
probable American
double-dip. Resumption of 2.7% rate norms could
take 'til 2012Q2. Contributing factors
taking a toll on vulnerable sectors
will include
higher petroleum costs,
a near-par Canadian Dollar, waning
Keynesian spending &
an imminent $80,000
correction to residential real estate prices.
If long-term American business cycle
trends hold to form, both economies should trough again in 2017Q3.
Whether this shall be a soft or hard landing will depend on Bank of
Canada's monetary policy manoeuvres in tandem with fiscal policy
actions at the federal & provincial level.
In a final look
back at the downturn event, revised
StatCan GDP data confirms the full economic contraction was 11
months (~ 4 quarters) in length, with an avg GDP decline of -4.2%.
Its cycle was over in August 2009. By NBER definitions, the
Technical Recession started in October 2008, quickly escalated to a
Severe Recession in November, and plunged to its eventual -7.9%
trough in February before coming to an end in March 2009.
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click chart for
40-yr graph, expanded discussion & more macro economic charts... |
July 30th
~ Economic data released by BEA today reveals the USA enjoyed a 2.4%
Real GDP growth rate in Q2, down from 3.7% in Q1 & 5.0% in 2009Q4.
The 2010Q2 figure is slightly below the 3.2% figure for the
TrendLines Recession Meter which monitors 139 indicators related to
the Fed's Coincident & National Activity indices. Looking
forward, the Index projects short-term deterioration on journey to
an ultimate -2.4% double-dip trough in September. The
prospect of a secondary downturn, related to rapidly increasing
petroleum costs, is consistent with
our early alerts way back in
Dec/2009.
Today's release also includes BEA's annual revisions affecting GDP
going back to 2007Q1. The mostly downward revisions (as much
as 1.5%) have noticeably merged the chart's GDP to be more in line
with our Index reflection of economic activity.
Should long-term
trends prevail, the current business cycle should peak @ 4% in
2013Q2 and wind down in 2017Q3. The path to getting there is
rather murky at this time. Animal Spirits
suggest GDP will be positive for the next twelve months.
Conversely, our
Barrel Meter &
Gas Pump
projections infer the economy is on the verge of a double-dip
that will trough in September. This is an uncharacteristic dire
outlook for us, and relates to the economy being at risk of an
imminent collapse of New car & Light Truck Sales.
It all stems from
the inability of Congress & the President to address runaway
structural Deficits and the resultant mounting
Federal Debt. This has not gone unnoticed by
foreign investors, and debasement of the USDollar commenced in
January 2002. Feeling the pinch, petroleum exporters began to
factor this component into their crude pricing starting in 2004.
As illustrated in our
Barrel Meter chart, crude costs rise as the Dollar
devalues, and this is a trend that will continue 'til oil hits
$123/barrel in 2011Q4 should the US Gov't continue its fiscal
mismanagement.
With rising crude
comes increases in the gasoline and diesel prices, to the extent
where pump price is on a trajectory approaching the same
Gasoline/GDP ratio that decimated New Car Sales in 1980, 1990 &
2007. The threshold, rising with nominal GDP. was $3.19/gallon
gasoline ($86/barrel) in the last breach event. The ratio
could again be signalled in January upon $3.42/gal gasoline ($92
oil). Other vulnerable sectors will shortly be exposing the
havoc of rising energy costs.
In summary and using recent revised BEA & Federal Reserve data, the
present downturn escalated to a Severe Recession in May 2008,
after entering a Technical Recession in December 2007 (we say
January!). The TrendLines Recession Meter Index set a record
low of -6.8% in
January 2009, obliterating the -4.8% marker of January 1975.
It is apparent that the NBER defined Recession was over in July
2009, whilst the stubborn economic contraction did not end until
December 2009. Today's BEA numbers confirm the high water mark
for nominal GDP in 2008Q3 was finally surpassed in Q2.
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click chart for
more...
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Regular Conventional Oil Scenarios
Campbell drawn from Retirement for 2010 update
July 29 2010 ~ There have been only 4 modellers worldwide
that study Regular Conventional Oil ... the light sweet
crude: Albert Bartlett (USA), Colin
Campbell (Ireland), M King Hubbert (USA) & TrendLines'
own Freddy Hutter (Yukon Canada).
Jean Laherrère & Colin
Campbell have been the sector's most stalwart peak oil study practitioners.
Both have openly shared their annual analysis with fellow modellers for two decades.
This month Colin came out of retirement with a surprise update.
Campbell's 2010 Depletion Model still assumes RCO's
dramatic 2.5% production decline rate will continue unabated 'til 2030,
but it increases RCO resource by 63-gb to 1,963-Gb. This is a career
high estimate for the DM.
Conversely, the Hutter Peak Scenario 2200
(the
only other active model) projects a softer 1.5% avg annual decline
rate to 2030, with a resource of 2,064-Gb. While Campbell
forecasts the annual flow rate deteriorates to 35-mbd (down 1) by
2030, Hutter takes the position 47mbd (down 8) is more probable.
On the longer term, whereas Campbell predicts the annual Decline
rate will soften after 2030, and even more post-2050, Hutter sees major resource constraint culminating
in an R/P 9 (10% decline) environment in 2051. Prior to that,
Hutter forecasts a secondary peak to 55-mbd while RCO
reserves are used to replenish waning arctic & deep-sea extraction
from 2030-2050.
The basis for the Hutter Peak Scenario 2200
interpretation lies in its analysis that the four-year extraction
decline was actually a masking of reality by ever increasing surplus
capacity ... mostly by OPEC members. 2010 will be the
watershed year in determining which premise is correct. If Campbell's hypothesis of continued aggressive decline
of 2.5% is
in play, RCO should be only 60.2-mbd this year. OTOH, if
RCO stays
above that threshold, then the Hutter position may be superior. And by
extension, the scenario with the correct interpretation will
likely be rewarded with the more accurate All Liquids projection
as well. Thus far in 2010,
year-to-date figures indicate there
has been a pause in the decline ... 62.3-mbd. |
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click chart for
the USA New Homes graph, further Bubble discussion ...
and more macro economic charts
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July
28th 2010 monthly update ~ Realty Bubble Monitor
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Overpricing
of Avg Home in June 2010: |
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$ |
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Bubble Today |
Bubble @ Peak |
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$150,000 |
Australia |
47% |
$155k & 56% (2007) |
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£ 88,000 |
UK |
112% |
£ 108 & 146% (2007) |
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$80,000 |
Canada |
31% |
$78k &
30% (2010) |
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$ 6,000 |
USA |
3% |
$77k & 35% (2005) |
July 28th
~
TrendLines
Research first drew attention to the topic of Housing Bubbles in
Canada in 1989. Although that particular Bubble was only $53k,
it was actually a more severe event as the average price of the time
was an unprecedented 55% above the Home Price / Family Income ratio
trend ... almost double the current episode of 31%. Families
were paying an astonishing 4.2 x's their Income. . It took ten
long years for housing to find new highs.
Then in May
2008, we
published guidance that the correction
of the USA Housing Bubble would neither be as drastic as forecasts
painted by self-appointed pundits, nor would it be as soft as the
media voices
openly
rationalizing the USA housing market was not in a bubble,
Our scenarios
predicted
the collapse
would only be as severe as needed to return the USA's median
Existing & New Home Prices to their Price/2-earner Family Income
ratio trend lines.
Shortly
thereafter
(2008/11/18),
McDoomer Nouriel Roubini was predicting a 40% collapse in
housing prices and that 1,400 banks would "go bust in 2009".
Well, he was out by 1,260 on the latter call, and to date, existing
home prices have declined only 28%. A growingly tabloid-style
mainstream media seems obsessed with extreme positions. |
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July 28th ~
In a grudge match that's lasted 25 years, Russia has regained the
lead as World's top All Liquids producer. It is
improbable Russia's 1987
annual/quarterly/monthly records of 11.5-mbd will ever be surpassed.
Russia is steady
@ 10.4-mbd, while Saudi Arabia sits at an OPEC
quota restricted
9.6-mbd. In 3rd place, the USA is stable @ 8.3-mbd,
Following are China (4.0), Iran (3.7),
Canada (3.2) &
Mexico (3.0-mbd).
TrendLines
Research's All Liquids Underlying
Decline Rates Observed in 2010: Worldwide 2.9%, Saudi Arabia
2.7%
& USA 2.5%
click chart for
more of our Monthly Report venue charts ...
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July 27th ~
The pace of flow rates to July 13th indicates a new global
Annual Supply record of 85.6-mbd is being
set
in 2010.
A new
global
Quarterly
Supply record of 86.0-mbd was
set in 2010Q1.
July 2008
continues its distinction for the all time global Monthly Supply record: 86.7-mbd,
0.7-mbd above today's monthly pace of 86.0-mbd.
Projection of year-to-date flows infers the next new
monthly record will be set in January 2011.
The
Quarterly record for Demand
of
86.9-mbd
was set
in 2007Q4
(with difference of 1.7-mbd drawn from inventories).
The High
Demand Month was February 2008's 88.0-mbd,
but consumption fell to 82.2-mbd by January 2009
amidst the depth of the world Recession.
TrendLines
Research's global All Liquids
Underlying
Decline Rates Observed: 2010 - 2.9%;
1970-2009 Avg - 2.7%
click
for more charts...
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click chart for more... |
Can UK Coalition Agreement Raise the Bar in Canada?
July
26 2010:
The spirit of cooperation and conciliation resulting in a marvellous
Coalition Agreement in the days after the UK Election certainly
throws down the gauntlet to Canadian politicians. The
Agreement offers guidance on a myriad of platform issues to be dealt
with over the next five years,
and awards
several Cabinet posts (incl Deputy PM) to the Liberal-Democrats by
the Conservatives.
Facing its first
crisis, a potential currency devaluation engineered by bond
vigilantes due to a monumental deficits and national debt, the two
parties agreed to an austerity budget chopping program spending by
25%. Only the solidarity of their political union enabled
these bold measures.
Many jurisdictions are besieged with partisanship to the degree that
situations have become so adversarial as to make their legislation
process dysfunctional. The UK model illustrates 2 plus 2 can
equal 5. The quest for power was secondary.
Meanwhile, PM Harper will continue to
get great news on the economic front.
We're predicting
StatCan will this week announce May GDP of 7.5% ... a growth rate
not seen since 2002. Next week should see further decline in
the Unemployment Rate. On the horizon, the winding down of
fiscal stimulus and a
probable
double-dip in the USA could dampen GDP to the 2.3%
vicinity by October. Despite short, medium & long term
problems in the USA, Canada's GDP should return to the 2.7% mean by
2012Q2.
The TrendLines Research composite
Riding Projection has been Canada's most accurate forecast tool,
measured over the last four Federal/Ontario elections. Each
month, its chart depicts the average of currently available seat
projections from across Canada. One of the models included is
our own conversion, which on its own was the most accurate in the
2008 Autumn Election. This model indicates PM Harper would
have started a hypothetical July 3rd Election Campaign with a lead
in 132 Ridings, followed by: 95 Liberals, 32 NDP, 48 BQ & 1
Indep't.
When our own numbers
are blended with the other available models for a broader analysis,
the findings are as featured in our headline chart above.
Today's presentation is based on
the conversion of 5 national polls conducted May30-July3 2010 by 6
active projection models. It reveals that the
governing Conservative Party would have commenced an early July
Election Campaign with a lead in 131 Seats ... down 5 from thirty
days prior. The Liberal Party would start with 87 Members
(same). The Bloc & NDP would have started a late Spring
campaign with 52 & 37 Ridings respectively. For the second
consecutive month, these are the first results since December 2008,
where our long term momentum indicator is favouring the Tories
(rather than the Grits) to top the standings right up to expiry of
the current Parliament in October 2012 ... leading in 109 Ridings
upon the dropping of that writ.
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July 25th 2010:
It's the first week of the snap writ and the first seat projection
is in. Julia Gillard's Labour Party leads Tony Abbott's
Liberal-National Coalition by 88-59, with 3 Indies making up the
rest. The election will be Aug 21st.
click
chart for more... |
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Global
GDP:
Year 2010
4.2%
(pending)
Year 2009 -0.6%
Year 2008 3.0%
Year 2007 5.2% |
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G-20
Nations in Technical or Severe Recession & Global GDP: |
|
2010Q3 |
2010Q2 |
2010Q1 |
2009Q4 |
2009Q3 |
2009Q2 |
2009Q1 |
2008Q4 |
2008Q3 |
2008Q2 |
2008Q1 |
2007Q4 |
|
3.9% p |
3.5% |
5.1% |
5.4% |
5.1% |
4.2% |
-6.0% |
-6.0% |
-0.2% |
1.9% |
3.9% |
5.3% |
|
nil |
nil |
nil |
Russia
3%
of Global GDP |
UK
Turkey
Russia
8%
of Global GDP |
UK Russia
Italy Canada
SouthAfrica Turkey
27%
of Global GDP |
USA
Japan
Germany
UK Russia France Brazil
Italy Canada Turkey Mexico SouthAfrica
53% of Global GDP |
USA Japan Germany UK
Russia France Brazil Italy Canada Turkey
Mexico SouthAfrica
53% of Global GDP |
USA
Japan
Germany
UK
France Italy Mexico
43% of Global GDP |
USA
Japan Germany France Italy
38% of Global GDP |
USA
21% of Global GDP |
USA
21% of Global GDP |
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And Not in
Recession in 2010Q2:
USA, China, Japan, India, Germany, UK, Russia, France,
Brazil, Italy, Mexico, Canada, South Korea, Turkey,
Indonesia, Australia, Saudi Arabia, Argentina & South
Africa (in
order of GDP & comprising
77% of worldwide GDP; excludes 20th
membership, courtesy to EU)
Remaining 160 nations
comprise only 23% of worldwide GDP |
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July 22nd ~ 2010Q2 global GDP is on 3.5% pace, down
slightly from 5.1% in Q1, and a major recovery from the -6.0% of
2009Q1. There are no G-20 nations currently in Technical or
Severe Recession. Only Mexico had negative growth in Q1.
The pre-Recession
high for global trade occurred in February 2008. After
declining 20% by May 2009, it had rebounded 21% by March 2010, but
was still below the 2008 record. April 2010 world merchandise
trade was down 3% from the previous month.
The duration of
the global Recession was 2008Q3
to 2009Q1. Despite the mainstream media hysteria,
at its worse only 12 G-20 nations (representing 53% of global GDP)
were in Recession. 2009's -0.6% GDP decline was the first
contraction in the last four decades.
This economic episode was in part precipitated by rising energy
prices that caused a collapse of USA New Car Sales in 2007Q4 when
USA contract crude price broke the $86/barrel ($3.19/gallon
gasoline) threshold. On its present path, gasoline and diesel
will breach that same Fuel Cost/GDP ratio in 2011Q1 @ $3.42/gal
($92/barrel). Another Fuel Cost/GDP ratio is more ominous.
At $109/barrel, a new round of G-20 Recessions shall commence.
Our Barrel Meter suggests this will occur in 2011Q1 failing central
banks' mitigation, or fiscal policy stimulation. The rising
crude prices relate mainly to USDollar debasement and failure of
successive Congress and Presidential Administrations to address
Structural Deficits and mounting National Debt.
A long term
effect of this downturn will be an acceleration in
China's overtaking the USA as the largest Economy.
We determines that this event will occur in 2051
... a mere 40 years away. In turn, India's
demographics create the situation whereby it is poised
to take the title of largest economy in 2075.
click chart for more
macro economics ... |
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click chart for discussion & more macro
economic charts... |
July 20th
~ Since early 2009, TrendLines Research has published alerts warning
the USA is headed for an inevitable Investor rebellion. With
concern over the integrity of sovereign debt, bond vigilantes are
increasingly monitoring Deficit/GDP & National Debt/GDP ratios.
It appears the current spotlight on European nations will be donned
on American Treasury activities within nine short years.
Due to an increasingly corrupt electoral system, members of Congress
and successive Presidents appear beholden to donators to their fund
raising efforts. Add in immense lobbying activities to the
fray, and we see legislation catering to the social engineering
agenda of the Progressive left and providing obscene levels of
subsidies to corporate sectors. As a result, the Federal Gov't
is on a path that would double today's $13-trillion National Debt by
2022, and triple it by 2029. Already a staggering 92% of GDP,
the ratio would rise to 129% & 178% respectively. Unimpeded,
the Debt will cross the 200% threshold in 2031.
Left unimpeded, the rise in Debt
interest, unfunded Social Security liabilities, Entitlements
for Medicare/Medicaid and Universal Health Care would drive the
National Debt to $92 trillion over the next 30 years. This
target was $55-Trillion at the end of the Bush era.
On the very short term, there is
definite relief. Albeit the 2010 $1.5 trillion Budget Deficit
represents a scary 10% of GDP, our analysis of CBO costing of the
current Obama ten-year Budget indicates the ratio will decline to
"only" 4% by 2014. This virtually guarantees the stability of
Treasury sales to both domestic & international investors over the
next 12 - 36 months. The decline mostly marks the
extinguishing of fiscal stimulus, TARP & remnants of the Bush era
tax cuts. Not so pretty is the journey from 2015 onwards
wherein the Deficit/GDP ratio is scheduled to rocket to a horrendous
20% by 2040.
If action is not forthcoming, current
CBO data indicates that left unchecked, the annual Deficit rockets
to $5.8 trillion by 2040, $9 trillion by 2050 & $28 trillion by
2075. Meanwhile, the National Debt surges to $167 trillion &
$604 trillion respectively by the latter two dates.
Weighing the USA's situation,
TrendLines Research judges such an Investor Crisis will occur upon
the National Debt reaching 115% of GDP ... likely in 2019.
That's only nine years away. Even if the USA dodges that
bullet by some fortune, a similar fate, via the Deficit Crisis, is
also on the distant horizon ... when the annual Deficit again
approaches 11% of GDP ... in 2025.
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