BHP, Suffering A Panic Attack

I think the world’s biggest mining corporation (that’s BHP Billiton) is in big trouble this year, although it may not surface until next.  At the very least, it is a huge gamble.

BHP is banking on a big turnaround in the price of oil to something like $50 dollars a barrel over the next year and is looking to buy up cheap oil assets from the expected crowd of bankrupt oil companies over the same period.

Ahem… Shouldn’t somebody be asking, “What sort of investment strategy is that?”

Not very clear forward thinking, to my mind.  I would have thought a more positive approach would have been to diversify out of mining, myself.  There’s not much future to that line of work.  They only have to look at their 86% first half profit downturn from $5.4 billion last year to $751 million this year.  The mining industry is on its last legs.  Not just temporarily, but for good.

And that hoped for $50 per barrel oil price?  Sheeesh!  Even at that lofty price (it was $120 or more per barrel 2 years ago) is not commensurate with trading at a profit.  You only have to remember back a few months, maybe six or so, when oil was fetching more than $50, and still, even back then, that’s when oil companies were in deep trouble and paddling like crazy to stay afloat, selling assets and buying their own shares just to maintain the illusion that all was well.

WHAT IS BHP THINKING?  The World’s Biggest Miner May Be About to Toast Its Oil Drillers  Toast its oil drillers?  The whole organisation is going to be toast.

 

Nothing good is going to come of this.  Thank goodness. But why am I concerned?  Well, actually I am not concerned, in the slightest.  I just allot some time most days looking for evidence that the world economy is sinking into the mire.  I don’t usually have to look very far to find it.

The cracks are beginning to grow wider in our crumbling global economy on a daily basis.

Those who should be, those so-called Captains of Industry, are no longer thinking straight.  Hence the raising of ideas like this ludicrous strategy of BHP.  Isn’t the pursuit of such activity as that, known as ‘panic’?

Icons like BHP will fail and fall just as quickly as many lesser-known entities.  The sooner the better, for the world’s sake.

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Can a collapse of global civilization be avoided?

Well, can it?  Good Question.

I have been saying for some time now, here on this blog and elsewhere, that we are headed for a collapse of civilisation, globally, the like of which has never before been witnessed on this planet.  At least, unseen during the 200,000 odd years, perhaps longer, that we or beings like us have been progressing to become the present dominant species here.

Civilisations come.  Civilisations go.  Most, notably in a state of collapse.  Sometimes a sudden collapse.  Sometimes a protracted one (150 years or so).  But go they must, and ours will be no different.

What makes the collapse of our civilisation so unprecedented?  Well, the world has never before seen a truly global civilisation until just a few decades ago.  Perhaps fifty or sixty years or so.

I personally think our fall will be rather sudden.  Why?  Well, for a number of reasons but primarily because of the crazy reliance on debt based economic growth that underpins it. It basically has the stability of a house of cards.  Without economic growth it is frighteningly unstable and such growth now, despite what governments tell you, has reached its limits.  Witness austerity in Europe, $multi-billion budget cuts in America, etc. etc.  Even here in Australia the government, spruiking economic growth, has spent enormous amounts of money it does not have and is not likely to get, as economic downturn begins to bite.  It will not matter who governs in the future.  They will all face the same problem of cutting up an ever smaller revenue pie.

It doesn’t take much of a nudge to topple a house of cards.

That’s My View.  Now Read On…

Well, it is briefly my view, but I leave it there because the real reason I had for adding this post today is to introduce what I consider to be an important paper on the subject originally published by the Royal Society  in January this year and most recently also published by The Simplicity Institute here in Australia.  A paper which coincidentally, wouldn’t you know, carries the same title as my post.

The Authors of the paper are Paul Ehrlich and Anne H Ehrlich.

Paul Ehrlich is a Professor of Biology and President of the Center for Conservation Biology at Stanford University, and Adjunct Professor at the University of Technology, Sydney. His research interests are in the ecology and evolution of natural populations of butterflies, reef fishes, birds and human beings.

Anne Ehrlich is a Senior Research Scientist in Biology at Stanford and focuses her research on policy issues related to the environment.

He is perhaps best known for the 1968 book ‘The Population Bomb’, though they both co-authored it, and his outspoken views and predictions on global population issues.  Many of his early predictions failed to materialise but that is often the way when numbers and dates are mentioned.  The general thrust of his ideas is still valid, perhaps even more so, today.

What Does It Say?

This paper argues much the same as what I have been saying but of course with a greater degree of eloquence, academic validity and cogency than I could ever hope to garner.  It focuses mainly not on economic issues but on the social issues of over-population, over-use of resources and consequent problems.  These are very real issues of the type that might precipitate a longer, more drawn out but perhaps just as painful societal collapse as the more dramatic economic collapse that I spoke about earlier.  Either path could very well form a lead-in to initiate the other.

The paper concludes that because of the capacity that society has shown to be able to deal with threats if the collective attention can be sufficiently focussed on the task, a global collapse of society can be avoided.  However, it goes on to suggest that even though catastrophe can be avoided, the odds are small that it actually will be avoided because collectively we will not be sufficiently motivated to work for the good of future generations at the expense of our own.

I could not agree more.