Postage Stamp Chat Board & Stamp Bulletin Board Forum
 

Peter. From your previous posts on this thread I understand you are dealing in currency trading on a daily basis? Whereas I'm merely an Engineer who had some involvement in the oil industry. However I do talk to other Engineers around the world that are still involved in the industry.

For a number of reasons I don't want to become involved in a debate on the production capacity of the oil producers. Let us leave it with me being cynical on the industrys ability to increase, and you being the optimist.

Huanga.

I don't trade in currencies, it's a mug's game unless you have both the capital and the knowledge to read the market.

In relation to oil, I simply reiterate that production has fallen as demand has fallen . The price has also fallen. Unless the unutlised capacity has been destroyed, and someone forgot to mention it, then the previous peak capacity remains the same as it previously was. so, there is slack in the market. Given the economic situation it is very unlikely that peak demand will return any time soon.

Add to that the fact that Libyan production has been cut to almo0st nothing during the uprising (now coming to an end). There will be some damage to production facilities from teh fighting, but production will scale up quite quickly. Europe will be the main beneficiary of an increase in Libyan supply. But again, the production will be going into a depressed market.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Gold is down heavily for the second day in a row in NY. It has declined 8% in 2 days. Seems there is not as much underlying demand for physical gold as thought, most of the trade being in futures by speculators who never intend to actually take delivery (they try to push the price higher and then sell out).

Certainly once it it reach $US1900 the sellers moved in. Silver is down about 9% in 2 days as well.

It will bear careful watching over the next week or so. There was some good economic news out on Wednesday in the US, including housing figures. Good economic news is bad for gold.

Another thing to be just a little wary of with gold at the moment, Central Bank activity. I note that a senior German minister has suggested that Greece needs to put up their gold reserves as collateral for the next round of financial support they are about to get. It can be a slippery slope from there, to Central Banks deciding to liquidate some of their gold reserves to retire debt.

The Reserve Bank of Australia sold a couple of hundred tons of their reserves (around 50% to 60% from memory) in the 1990s. The argument then was that Australia was a large gold producer and there were better ways to utilise the money than holding too much in the way of non-income producing assets.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Add in short selling and doesn't this change our financial markets from free to fake? Where does actual supply and demand come into play or corperate performance? How can the average person invest in any stock, even blue chip, and expect any sort of return with larger players manipulating the markets using these tools? America printing money and China holding firm on thier currency? Where did the free market go?

I feel what is going on is just the rich and astute raping the baby boomer's 401k's and RRSP's before they cash out for what they thought was a secure retirement having been told mutual funds where the best way to go for R.O.I. by every single financial adviser in the world. Meanwhile these same financial advisors are aware of this and are the same people manipulating the market for thier own corperate gain and raping thier small customers before they can retire.

Banks are no longer banks, insurance companies are no longer insurance companies, Brokers are no longer brokers. They are all financial institutes all doing the same thing.

They have insured they charge you for every single financial transaction you "need" to make, insured they over charge you interest, insured you they won't pay interest on savings, insured your insurance rates go up for every hit in the financial market, and insured they are not held responsible for any problem in the economy like the housing market crash that all lead to this mess.

Seperate the financial world so it can again be a free market. Let the rich play with themselves so we can get back to work.

Sorry for rant.

Actually, the market has never been a free market in anything but name. It is, however, a well regulated market (especially in Australia, where it has been for more than 2 decades).

Short selling is only possible if the short seller can borrow real shares to short sell, knowing they will have to return those shares . In Europe right now they have instituted a ban on short selling bank stocks, due to the sovereign debt issues.

In the gold market it is pretty much all about futures. To actually have to take physical delivery is an expensive and complex activity. The gold usually stays where it is, even if 'delivery' is made.

I am an active investor in the share market and I don't worry too much about the short sellers and the like.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I think I sympathize with Maddog here. The markets are now a grand casino, not a true investment opportunity.

Electronic trading now exists solely to extract a fraction of a cent on one massive trade after another, and the individual investor cannot hope to compete, or even comprehend the forces and protocols working against him.

The past two years, I have been successful only because I adopted the mindset of a pure speculator, and because I get about 20 free advisories which I read thoroughly, every day, and usually follow the majority opinion. My problem is actually having too many good ideas (from others, that is) and trying to decide which ones to follow.

In the U.S., the cost of trading is minimal, i.e., with Scottrade, US $7 commission on most common stocks, any quantity.

On the other hand, it IS great fun. I could have the flu, a broken arm, a migraine, and the runs, and I'd still be plunked down in front of the computer at 9:30 a.m. to scrutinize the open, LOL LOL.

Don't ring up between 9:15 and 10:15 because I won't answer.

Doug, if you invest in the right stocks and can ignore the day to day fluctuations the stock market is a good investment, for the medium to long term (at least 3 to 5 years). In Australia it has outperformed all other investments (with the possible exception of rare stamps and coins) consistently over many decades.

It is far less a casino, overall, than people think. You can invest in the speculative small cap stocks (I have a few) with a view to potential capital gain. However, you need to diversify and invest in the stocks of real companies making real profits.

In Australia that means companies like BHPB, RIO, Telstra (largest telecommunications provider, paying dividends equal to a 9% return on your money!) and the big banks. Plenty of speculative mining stocks as well as the big boys.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

A week after passing US$1,900 an ounce, gold is now under US$1,800. The fall, from the absolute peak, is around 9%. The fall is higher in A$ terms as some appetite for risk has returned and the A$ is strengthening again. That could all change tomorrow, of course. The markets are very volatile right now and react to almost any news, no matter how minuscule it really is.

The unions here are demanding the Reserve Bank lower interest rates (currently the official cash rate is 4.75%). They were very unhapphy when Glenn Stevens, the RBA Governor, indicated a continuing bias towards lifting rates in an appearance before a Parliamentary committee last Friday.

Personally, I think rates will remain steady for the rest of this year, provided inflation does not continue to pick up (currently already above the comfort range of 2% to 3%). It is only global uncertainty that has stayed teh hand of teh RBS over teh last several months.

The huge advantage the RBA has, as opposed to almost all other Central Banks in the western world, is that it has room to make meaningful cuts in the unlikely event of a rerun of the GFC or similar.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Bluntly are we not talking about the start of the end of Western hegemony after 200 years?

Which may, or may not, be fine depending on your politics / religion...

I don't think 'Western Hegemony' has anything much to do with it. However, China's prosperity and continued growth is still very much dependent on the ability of western nations to import the goods it produces. Chinese output is still heavily directed to export rather than domestic consumption, hence it's need to keep it's currency weaker than it really should be.

Both China and India have a rapidly expanding middle class, but still an over-representative pool of poor to very poor citizens who cannot afford to consume much of what is produced. That is a long term problem that requires considerable time and investment to resolve, if indeed it is resolvable at all.

It may not fit with some peoples political views, or hopes, but the largest economy on the planet is still the USA. The most powerful nation, militarily, is still the USA. That means that, in the event of serious conflict between the West and others, my money is still on the West to prevail. Not that I think it will come to that in our lifetimes!

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

....... 'That means that, in the event of serious conflict between the West and others, my money is still on the West to prevail. Not that I think it will come to that in our lifetimes!'

That Peter depends on how old you are?

Huanga.

My youngest grandchild is 2, going on 3. He will probably not live to see the west eclipsed totally.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

As we have discussed previously, the "East" needs customers, plus a healthy dose of internal population control based on economic incentives.

The East must also cross a LOT of ocean to invoke a military operation, which seems very unlikely anyhow, unless they feel compelled to liberate our farmlands and forests.

I do not think there will be any more world wars, but certainly the West could find itself a captive economy, in the broad sense. I also think a pandemic of some kind will kill half the world's peoples in the next hundred years; it is a natural outcome of environmental damage, loss of species and habitat, instantaneous transportation, viral terrorism, and several other factors.

This is why I like the idea of merging with Canada to form the United States of North America, an impregnable, unconquerable entity. Plus we must support Europe in their roles and protocols as the custodians of Western civilization. We Americans apparently no longer care about such a legacy.

Depressed? Buy stamps.

Doug, you could well be right on the pandemic theory, but a confederation of a united north America. You have to be kidding? Thats like asking the Butler to marry the Duchess!!

Canada would be over populated within days as the stampede for medical services and clean water grew.

[Just kiddin'.]

Huanga.

That brief over-population would be offset by hordes of Canadians streaming south to see 7 Mexican fast-food joints on every corner.

I had plans to start one called "Talk o'Tacos," to be advertised only on Twitter, but could not find 140 characters to invest.

As of this morning the AUD is approaching parity with the USD once more, heading downwards this time. At 6:30am (AEST) the exchange rate was US$1.0040 to A$1. This is down 2 full cents since yesterday and continues the trend of the last couple of months.

The A$ is still close to highs against both the GBP and the EURO though. This simply reflects, once again, the 'flight to quality' (i.e. US Treasuries) in times of uncertainty.

On a brighter note, although commodities are all down in USD terms, they are up in AUD terms. Every cloud has a silver (and gold and copper and wheat, etc, etc) lining.

The farmers (and other exporters) will be pleased with the AUD fall. The prediction here is for a record grain crop (again, a silver lining after the disastrous floods last summer) and, with prices already strong, any extra from a falling dollar will be welcomed with open arms.

It remains to be seen, though, whether the fall in the dollar will be sustained or is a temporary aberration. It will probably depend on Europe, particularly on whether Greece (with the assistance of Germany and France) can clean up the mess they have made for themselves.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

PeterS

What is the reason or reasons behind the downward drive of the AUD?

Cheers!

The AUD is still very high. The AUD is based on an economy which supplies raw material to places like China who convert it to material bought by western countries. IF these countries are heading for another recession then no-one buys the goods and no-one wants the raw material. So, orders for raw material goes down, the $ goes down.

Historically Oz has been the first hit by recessions, and the first out of it. (Why? Producers run down raw material first.)

To take it a step further, world demand for grain and other unprocessed foodstuffs should be strong in 2012, offset by weakness in metals and minerals. Profitability for the latter often lies at the margin, it is not a straight-line relationship.

I see that gold is starting to come off the boil the last few days

Will that be a trend that gold has peaked or just a temporary dip I wonder?

Though it is difficult to pick trends with the markets nowadays - so yoyo at the moment

¿Que? Señor.

Nos hemos conquistado usted ya Gringo!

We'll keep the RCMP; their horses run a lot faster than our Border Patrol agents.

Australia is headed for a record winter grains harvest. all the rain and flooding last summer brought lots of good for the farmers. A lower AUD is good news for them as well, since grain is traded in USD on the international markets. The overwhelming proportion of Australia's grain crop is exported.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

BTW, the overwhelming reason the AUD has fallen is that the USD has risen. Not being flippant, it is simply what I have been saying for a long time...if the world economy looks dodgy the only place anyone wants to be is in USD, US Treasuries in particular.

Current commodities exports are still at record levels and close to record prices. That will probably moderate over the coming months if there is a sustained further slowdown globally. I, for one, am not convinced that it will be the case.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The proof of rising and falling currencies can be found in the price of gold, since it is essentially the same all over the world.

At http://www.kitco.com, you can examine data and charts to determine what proportion of the change in gold price is due to fundamentals in the marketplace, and what proportion is due to strength or weakness in the US dollar.

This is the customary lead-in for that data:

Did gold really go down $10.80?

Yes. The stronger US Dollar was responsible for $5.10 of that drop.

==========

Today, the two components were fairly equal ($5.10 due to currency, $5.70 due to market trends).

'BTW, the overwhelming reason the AUD has fallen is that the USD has risen. '

No, it's a universal fall . Check against the pound, for example. No currency rises and falls just against a single other country unless they are totally locked. Australia economy is export driven based on raw materials. That's the factor. Look, for example how gold has fallen from about $1900 and oz to $1500 an oz; this lowers values of exports, lowers values of the AUD.

No-one in their right mind would money into the USA$ with its zillion dollars of govt debt. Wait till the Chinese get serious about unloading their dollars by buying assets around the world and see the dollar slump.

I guess you read different market reports to those I read. While the AUD fell heavily against the USD (or, rather, teh USD gained against all other floating currencies), it barely moved against other currencies and actually gained against the YEN. The exchange rate against the GBP remained above 65p the entire time, for example.

Disappointingly, for you at least (or so it seems), there has been a massive inflow of funds into USD during the latest European sovereign debt chaos. The Federal Reserve doesn't particularly like it, it wants a falling USD to make US exports more competitive and imports more costly, but there is really nothing the Fed can do about it. Interest Rates are already effectively at 0%.

As to US government debt, the large majority of it (over $10 trillion in fact) is owed domestically (as shown by Doug earlier in this thread). China only has around US$1.3 to US1.5 trillion in USD reserves, which is nowhere near enough to cause more than a ripple in the market, even if they dumped them in one hit (if they could). It's only about as much as the annual US budget deficit.

China is already spending USD buying whatever assets they can around the globe. They are running into some resistance in Australia and seem to have focused more on Africa, where things are easier (although sovereign risk is much greater). Nothing nefarious about it, China wants to secure the raw materials it needs and would rather own them than buy them.

As long as the USD is the world's reserve currency the safest place, in times of difficulty, will be in USD. Since there is absolutely no viable alternative global currency to replace it, the USD will remain so for many years to come.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings

http://www.zerohedge.com/article/china- ... d-holdings

basically the issue is this. USA is in debt, massive. The biggest holder of its debt is dumping it / selling it. The USA is through.

I would be looking closer to home when deciding who is through, if I were you. Your political views are causing you to misinterpret the markets and the world economy. However, arguing with a zealot is never a good idea.

Care to put a date on when the US will be 'through'? Then we can just wait and see.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I remain very pessimistic about the future of my country, the U.S., but it will be little affected by what China does or doesn't do.

The eventual pricing of oil in a basket of currencies, instead of dollars only, is likely to do much more damage in the long run.

What concerns me most is that our middle class has been ravaged, permanently, by the fall in purchasing power of the dollar, and by the fall in value of housing, which is the primary asset (and critical retirement vehicle) of the middle class.

You can blame Congress 100% for the fall in housing prices -- for many reasons.

Another point to ponder, when China spends its dollars, it merely means that someone else, some other country, then owns them, and not only owns them, but PREFERS dollars to whatever hard assets or commodities they are selling.

First, zerohedge has a habit of spreading false rumors so take what you read on that site with a grain of salt.

Second, the title clearly states US Dollar holdings, not US debt. China accumulates $US for a number of reasons, one of which is their exchange rate mechanism to keep the yuan artificially low against the dollar (this is also why they have accumulated so much US debt).

Selling excess dollar reserves as the dollar strengthens would make good sense, from China's point of view. However, if they divest or "dump" their $US too fast their own currency will strengthen and possibly hurt their own economic growth. If they do sell their $US holdings they will do it in such a way as to minimize the impact.

Doug, the fall in teh purchasing power of the USD is exactly what is required right now, as far as the US is concerned. You need employment growth much more than you need cheaper imports. By having a lower value dollar you stimulate import replacement and export, both job builders (or they should be).

The US is singularly better placed than any other economy, since the USD is the global reserve currency, to benefit from a lower dollar.

The high AUD has wreaked havoc with our exporters, other than resource companies (whose prices have risen as part compensation). Australia's largest steel maker has just exited the export business completely, due entirely to prices falling (in AUD terms) as input costs are rising. We have cheap and abundant electricity (although the current Government seems intent on destroying this competitive advantage with a carbon tax) and all the raw materials here, but steel manufacturers just cannot compete with the AUD as high as it has been.

Tourism has also been hard hit. It is cheaper for Australians to travel overseas and more expensive for foreigners to visit here.

It isn't all bad news though. Our unemployment rate is around 5% and, with official interest rates at 4.75%, the Reserve Bank has plenty of ammunition in the event of another global meltdown.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

China acquires USD primarily because most global trade is in USD and China is a major exporter. It is the same here, companies like BHPB accumulate vast amounts of cash (all in USD).

The reason china is a major exporter is twofold, cheap labour and a fixed currency that moves in lock step with the USD. The very idea that China would float it's currency is laughable. The Chinese Communist Party retains power only because it keeps the populace happy. If the YUAN was floated then it would appreciate significantly, overnight, against the USD. Exports would collapse and jobs would disappear. Then we would see whether a single party can control an ethnically diverse, unemployed populace. The Arab Spring would be like a blip in such circumstances.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Agreed Peter. They won't be floating it for quite some time.

However, they have loosened some controls on the currency: Yuan denominated bond offerings ("dim sum" bonds) in Hong Kong, allowing more cross-border yuan based trade, the support of the offshore yuan market by the central bank, etc. Even McDonald's and Caterpillar have issued bonds in yuan.

There still are tight controls on returning yuan, but these changes do signal a desire to raise the yuan to international currency status.

It is clear that China desires the privileges of a reserve currency to compete with the USD. That is their long term goal. Getting there won't be easy though.

Whilst ever the YUAN is artificially pegged to the movements of the USD, there is no chance of it becoming anything more than a minor currency. Any reserve currency needs to stand on it's own and go with the flow.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Comic relief from all this dire news:

I went to a Chinese restaurant and ordered dim sum.

They brought me a calculator with a weak battery.

I have been reading this thread and enjoying many of the replies. I must admit I have not yet read anything posted by PeterS that I did not agree with.

I have one question for doug2222usa: What's wrong with Ifni??

It still astounds me to hear people accuse the poor of not wanting to work, though there is no doubting there are some lazy people in the world.

Karl Marx didn't say many things I agree with, but I think he had the right idea when he suggested that the rich often got their riches by stealing them.

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World covers fanatic. Especially on the lookout for Canal Zone covers.

In this day and age Marx might have suggested 'creative accounting' as the process.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The AUD is continuing to fall against the USD, but is rising against the EURO. Again because, in times of uncertainty, there has been a rush to quality and the USD is seen as low risk and quality. A short while ago, the exchange rate was at a 12 month low of US$0.9519 to A$1. Not too long ago it was US$1.10 to A$1, so there has been a 0.15c turnaround.

We can thank the Greeks, in particular, and the EURO zone, generally, for the fall. It is good for exporters and import replacement but may be bad for interest rates. The high AUD was helping to reduce inflationary pressures and putting off the need for an interest rate rise. There won't be another rise, I don't think, till the global situation stabilises (assuming it does). If it doesn't stabilise we might even get a rate cut as the next move.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

A number of years ago (in the 1980s if memory serves, but I'll cheerfully stand corrected), there was a French delegation to China. One of the party asked the Chinese Foreign Minister how/if he thought the French Revolution had affected diplomatic relations with China. His answer? "Too soon to tell."

The euro, IMHO, is/was an experiment in putting the cart before the horse. While the ideal is admirable, there are - demonstrably - difficulties when a group of diverse countries expect (insist???) that a small percentage of that group bankroll the entire exercise.

As has happened, and the results aren't pretty. Germany, and France, are unhappy; and there is every likelihood that innocent bystanders are going to get hurt in the coming melee. Australia (although not as likely as it once was) could be one.

The U.S. will not be able/willing to come to the rescue.

Here in Oz, I believe that we will be sitting on the current interest rate for quite some time. The biggest danger for the Oz Reserve is the current conservatism of the buying public, and that isn't going to change any time soon. People had a fright after Freddy and Fanny started fooling around, and although no-one dare call it a 'recession', 'depression', or whatever, they did start thinking 'soup-kitchens', and 'dole-queues'. Second-hand Rose is becoming a very popular lady.

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FORESTS OLD, PASTURES NEW
(An expert is one who knows more and more, about less and less, until they know absolutely everything about nothing at all)

Your biggest worry in the near term is not consumer spending, but lowered demand for natural resources.

That argues for ever-more sophisticated and efficient modes of transport, research into new uses for old commodities (to spur demand), and elimination of bureaucratic nonsense to simplify transactions. Good luck with all that.

If things really get ugly, the citizens of Oz should have economic incentives to become more self-sufficient and reduce frivolous imports.

And, you have a superlative opportunity with solar energy, much better than the US, so capitalize upon it -- to reduce oil imports and to design unbeatably innovative systems for export. Don't forget wave power for an island surrounded by a frothy ocean.

Be careful what you say! Some people (obviously deluded) might consider importing postage stamps as frivolous.

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World covers fanatic. Especially on the lookout for Canal Zone covers.

Doug, the problem with large scale solar energy generation, in Australia, is that the generating facilities will have to be quite a distance from the consumer (in the desert, mostly). You lose a lot of energy in transmission to markets, especially over the distances that will be required. Solar is also a relatively inefficient generator of electricity, with current technologies. It is also, relative to burning coal or gas, a much more expensive option. That will, however, presumably improve over time.

As to wave generation, that is even less efficient and can be environmentally devastating (as the UK is learning).

One area where there needs to be a lot more spending on research is the storing of energy. Batteries are very inneficient, currently. Wind farms and Solar arrays are great, when the wind is blowing and the sun is shining. They cannot, however, replace base load generation. The alternative energy generators can produce masses of electricity, haphazardly, but much is lost if the demand doesn't closely match the supply. Come up with a viable storage technology and the whole picture could change.

Oil production is diminishing in Australia, has been for a long time. However, we have some of the largest natural gas reserves on the planet. Replacing petrol with LNG would significantly reduce the need for oil imports, but is a very costly proposition in the short term. Governments have provided incentives to switch, at various times, but it has only had a small impact.

On oil, I heard something yesterday about the US Mid-West (Kansas?) having the potential to be the new Saudi Arabia when it comes to oil reserves. Haven't chased up on the report, but it seems another pointer to the fact that the peak oilists are a mite premature in their predictions.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

BTW, with all the global problems, Australia had a near record export number last quarter. The Trade Surplus with China alone has now risen to over US$25b annually.

There may well be a dip in demand for resources in the short term (along with a fall in prices) but, overall, demand will continue to rise over the medium to long term.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The storage medium I never see mentioned is gigantic flywheels set into the ground. Just as an example, let's say you have 40 solar arrays and 10 flywheels. On a poor solar day, you might use all 40 arrays to maintain just six of the flywheels, which can turn armatures by induction to produce power.

The flywheels work 24/7; it's just a question of how many you can keep at max efficiency at one time, and that depends on the amount of sunlight -- good days and bad days, the output is steady in quality, it's only the quantity that varies. And excess output on a brilliant sunny day could, in fact, charge batteries.

The cost of solar is coming down and down and down per kwh.

Once the transmission infrastructure is in place, you're all set. In the meantime, you've created tons of jobs.

And there's been significant conversion of fleet vehicles to natural gas in the U.S., even postal trucks; do your stamps smell funny lately?

Doug, just a question. Where you do actually place these flywheels in order that they can become a solar powerhouse? I ask because last year I went through Europe a few times and the place seemed overrun with wind turbines. Especially Germany and Denmark. Reports are now appearing that the turbines are far less efficient than first thought.

Yesterday I heard a report that food production in the very near future will requires a ground area the equivalent to Germany and France combined, just to keep pace with the consumption of Asia.

I cannot see the Europeans taking down their turbines, and the Chinese are buying up productive land around the world to attempt to safe guard their food supply. That does not leave a lot for solar flywheels except the Antarctic, and a few deserts here and there.

However I may have envisaged your design wrongly. Could you elaborate a little more.

Huanga.

The composite idea of what I've read is fairly straightforward. A flywheel only 30m in diameter can store a phenomenal amount of energy, having converted the initial solar into rotational kinetic energy with transducers, and that can fit into the ground, spinning parallel to the surface, resting upon a cushion of compressed air. I am guessing 60m by 60m would be adequate, not much space at all out in the boonies where the collectors are. Note, I am NOT an engineer.

One could also electrolyze hydrogen out of polluted or brackish water (via the solar output, which is already DC) and transport it safely as fuel using certain high-capacity interstitial hydrides (which is why palladium is such a valuable metal, worth nearly 1/3 as much as gold).

Thanks Doug. The flywheel is similar to an idea that was floated a few years ago. I have seen some drawings of it and found the concept interesting. The depth was more or less the same as you discribe and the width about half. I'll now do a search because I cannot remember if I saved them?

I believe it even had some costs with it......in Euros!

Huanga.

The key point is that a flywheel converts intermittent solar energy into steady uniform kinetic energy, even in areas of low insolation.

Doug, I am unclear how the flywheels can continue to spin when no energy input is being received (e.g. at night).

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.