Tales from the Dump, Confirmation Bias and The World According to Cam
By Cam Mather
I love the dump. If I were smart I’d get a job there. But that probably wouldn’t work out because while I was being paid to check on the people (and garbage) coming into the dump, I’d spend my whole day up to my waist in garbage rifling through the bags as they arrived.
Our dump has an anti-scavenging by-law. I ignore it. I don’t get to the dump very often. When we first moved here I seemed to be going more often, but now that Michelle and I are here alone I’m lucky if I make it 3 or 4 times a year. We never used to have an anti-scavenging by-law and I always drove my truck and wore my work boots. I often came home with more stuff than I left with.
Last week after I had cleaned up the garage I had a bunch of recyclables. Our recycling depot is located at the dump. As I loaded some of old my magazines into the “paper” container, I noticed a nicely tied bunch of newspapers. So I grabbed them. Yes, I broke the law, but the law is simply wrong. “Reusing” is the first of the three “R”s and in this case, I was going to read the papers, then use them to start fires in our woodstove. Double bonus!
And what a bonanza it was. They were all “Globe and Mail” newspapers. The Globe is a great newspaper, as corporate-owned, corporate-biased papers go, and while its perspective is usually quite mainstream, from time to time they do offer some good articles. I used to buy it on Saturdays until the price passed my threshold for affordability.
I love to sit down with a pile of month-old papers and go through them. And as I do I experience “confirmation bias” where you tend to be drawn to information that reinforces your worldview and ignore stuff that doesn’t. Wikipedia has a listing for Confirmation Bias here; http://en.wikipedia.org/wiki/Confirmation_bias Whenever I read a stack of papers I am living proof of this. I’m the “King of Confirmation Bias.”
Here are some of the articles that I found that reinforce my view of the world;
One of the best ones was about the impending collapse of fiat currencies. I believe those paper dollars that governments say have value because “they say so,” are numbered. The replacement will be a gold-backed system, which is one of the reasons that I recommend that you should own some precious metals yourself.
“Central Banks go on a gold rush”
In the last quarter central banks bought 148.4 tonnes of gold, versus 66.5 in the second quarter and 22.6 in the first quarter. Central banks are replacing U.S. dollar reserves with a real store of wealth – gold. Does the chaos in Europe have anything to do with this accelerated gold buying spree? Ya think? Do central bankers think fiat currencies could lose their value? My country, Canada, is not buying gold and basically has no reserves. Our mining companies lead the world in pulling it out of the ground, but our politicians don’t have the common sense to put some away for a rainy day. Our central banker Mark Carney has been put in charge of the European Financial Stability Group, and this is the man who should be building our gold reserves. He’s being hailed as a conquering hero today, kind of like Allan Greenspan was with his long-term low interest rates and strategic lack of oversight of the financial industry that led to the collapse of 2008. Could there be any parallels here?
My confirmation bias continued as I read financial columnist Neil Reynold’s editorials recently. Usually I dismiss his writing because I often disagree with him. But then I read his articles “Currency has too much bull and not enough bullion” and “A scary prediction for the collapse of paper money” which once again confirmed my worldview and now I think the man’s a genius! (Sorry but on the Globe & Mail website you have to pay to read these articles. If your neighbours are Globe & Mail readers, start rifling through their blue box and maybe you can find them for free!)
The other major area of interest for me is energy and there were lots of articles about natural gas. For years I’ve been reading information from the U.S. Energy Information Agency and the Canadian Petroleum Producers warning that we’re running out of natural gas in North America, very quickly. This means that people should be switching to geothermal heating systems and solar domestic hot water heaters to offset the rapid price rises expected. Then in 2008 all that talk went away.
First we experienced major natural gas demand destruction as steel mills and other big users of natural gas shut down because their markets dried up. At the same time “fracking” was starting to be used. Fracking, which is used to get at gas in hard to reach places, hadn’t been economically viable to use, until the recent rise in natural gas prices.
So I was pleased to read an article entitled “Western gas production faces rapid decline.”
The article states that “Gas producers in Western Canada are facing rapidly declining production from conventional fields – and growing doubts that new shale gas reserves will be enough make up the difference.” So in other words, even if you saw the spokesperson from Chesapeake Energy on “60 Minutes” talking about how we have a million years of natural gas we can frack out, this article suggests that it won’t be enough to make up the difference between the conventional wells where output is dropping off a cliff.
This was confirmed in this article about a company that fracks for natural gas.
It wasn’t so much the article, but the photo that accompanied it, that told the story. If you click to enlarge the photo you’ll see a flotilla of huge trucks all burning diesel fuel to create the pressure necessary to inject massive amounts of “liquids” into the wells to push the natural gas out. http://en.wikipedia.org/wiki/Fracking If you go to their website you’ll see some images taken from above and there must be 25 or more trucks at any one of these fracking sites. Sure they’re getting gas out, but how much “oil” are they burning to do it? Last time I checked oil was $100/barrel so the Energy Return on Investment has got to be huge. If natural gas prices stay low, there’ll be no incentive to continue to frack. If the price of oil stays high, the price of natural gas will have to go up. Either way, prices may be low for a while, but if you heat with natural gas the day of reckoning is still coming.
This is all stuff I talk about in my book “Thriving During Challenging Times” where I provide options and strategies to deal with these events. And now, thanks to the Globe and Mail, it has been confirmed to me that I’m on the right track. I pre-emptively ignored any articles that may have contradicted this worldview as I read through my liberated back issues and were therefore considered irrelevant.