Chapter 4

Physical Scarcity

Exhaustion of non-renewable resources or overproduction of renewable resources.

Chapter 4

Economic Scarcity

Inadequate supply to meet demand at existing market prices.

Chapter 4

Geopolitical Scarcity

Chapter 4

Fossil Fuels

Fossil Fuels make up 87% of the world energy supply and are un-renewable.

Ex. Oil, Gas and Coal

the opposition of having new development created close to people’s homes.

Ex. of new development. Chemical Plants, Wind Turbines and Landfills

Chapter 4

Peak Oil

The point in time when the maximum rate of petroleum extraction is reached.

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What is the relationship between oil prices and proven reserves (note Canada)?

Where are the largest petroleum reserves found and who are the major producers and consumers?

Petroleum Reserves- Saudia Arabia

Petroleum Production- Saudia Arabia

Petroleum Consumption-United States

5. Why has oil become an increasing site of speculation since 2006?

The crash of the MBS led investors to commodities such as oil.

1. MBS are deregulated

2. Credit default swaps are deregulated 

Why did oil prices fall dramatically between the middle and end of 2008?

Why is transporting natural gas more difficult than petroleum and how does this make for a different market than petroleum?

I.  Natural gas is hard to transport because it is a gas. You would need a pipeline.

II.More difficult to maintain

III.There is no common market for natural gas

Why is coal the least desirable fossil fuel (both in terms of costs and environmental impacts)?

The reason why coal is least desirable is because it is more costly to extract and transport and it causes the most pollution (greenhouse gases and particulates).

What is carbon sequestration, what environmental problems does it solve and what environmental problems does it ignore?

Photo-voltaic

Advantages

-could be used to supplement existing supplies  

-lends itself to decentralized systems

Why is corn based ethanol so much less efficient than sugarcane based ethanol and what problems do both have with respect to agricultural markets?

cellulosic ethanol is incredibly efficient and can use marginal land or waste products but the reason is it not being used is because the enzymes are too expensive.

Where is geothermal power most prevalent and what are the advantages of

ground-source geo-thermal?

Geothermal energy is most prevalent in New Zealand, Iceland, C. America, and Japan. the advantages of geothermal energy is that it is very clean and renewable.

In view of the currently collapsing world financial system, which is tearing apart the Maastricht Treaty, European governments have a last opportunity to abandon the failed Anglo-Dutch liberal system of private central banking and globalization, and organize the new Eurasian axis of peace centered on Russia, Germany, and France. To solve the collapse as sovereign nation-states with a common interest, their historical foundation is the 17th-Century Peace of Westphalia, which began the "era of sovereign nation-states" and is now attacked by all the new imperialists and utopian military strategists.

William Beveridge identified five "Giant Evils" in society:

-squalor

-ignorance

-want

-idleness

-disease

went on to propose widespread reform to the system of social welfare in the United Kingdom to address these.

supports mass consumption and facilitates the reproduction of labor

Stagflation

used to describe the unprecedented combination of economic stagnation and rising inflation that occurred in the 1970’s. generally, economists had regarded high unemployment and inflation as incompatible, as the former was thought to reflect stagnation or recession and the latter was regarded as an expression of overly rapid growth.

Liberalization

opening protected sectors to competition

Relaxing laws under which businesses operate

·      Removal of Glass Steagull act (broke wall between investment banks and commercial banks)

·       Passage of commodities future modernization act

Why does the state generally adopt pro-growth policies?

The state generally adopts pro-growth policies because they are mainly aimed at helping the growth of the economy.

What is O’Neill’s definition of the qualitative state and how does it differ from

quantitative views of the state?

What were Keynes’ suggestions for turning the economy around during the Great Depression?

there were two major things that Keynes suggested for turning the economy during the Great Depression:

◦Orthodox view: balanced budget & limited govt.

◦Economic Multipliers (snowball effect): make government expenditures self-financing

Gramm-Leach-Bliley Act (1999)

an act of the 106th United States Congress(1999–2001). It was signed into law by President Bill Clinton and it repealed part of the Glass–Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies.

2000 legislation designed, in part, to ensure new types of securities (e.g. MBS) would not be regulated by govt.

A form of hedging that works like insurance. Lender purchases a CDS on a loan that pays out if original borrow defaults (swapping default for credit)

Why, and when, did the federal government create Fannie Mae and how successful was it for the first three decades of its existence?

Why, and when, did the federal government create Freddie Mac and how did the

nature of Freddie Mac differ from the original functioning of Fannie Mae?

Freddie Mac was created to be put in competition against Fannie Mae. However, just like Fannie Mae, Freddie Mac created a lot of debt for the government. The way of which it differed from Fannie Mae was that it bought mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market.

Why do many observers feel that today's financial crisis is really about a housing

bubble and why are there no easy short term fixes?