The Connection Between Oil Prices, Debt Levels, and Interest Rates

If oil is “just another commodity,” then there shouldn’t be any connection between oil prices, debt levels, interest rates, and total rates of return. But there clearly is a connection.

On one hand, spikes in oil prices are connected with recessions. According to economist James Hamilton, ten out of eleven post-World War II recessions have been associated with spikes in oil prices. There also is a logical reason for oil prices spikes to be associated with recession: oil is used in making and transporting food, and in commuting to work. These are necessities for most people. If these costs rise, there is a need to cut back on non-essential goods, leading to layoffs in discretionary sectors, and thus recession.

On the other hand, the manipulation of interest rates and the addition of governmental debt (by spending more than is collected in tax dollars) are the primary ways of “fixing” recession. According to Keynesian economics, output is strongly influenced by aggregate demand–in other words, total spending in the economy. Any approach that can increase total spending–either more debt, or more affordable debt will increase economic output.

What is the Direct Connection Between Increased Debt and Oil Prices?

The economy doesn’t just grow by itself (contrary to the belief of many economists). It grows because affordable energy products allow raw materials to be transformed into finished products. Increased debt helps energy products become more affordable.

Figure 1.

Figure 1.

Without debt, not a very large share of the total population could afford a car or a new home. In fact, most businesses could not afford new factories, without debt. The price of commodities of all sorts would drop off dramatically without the availability of debt, because there would be less demand for the commodities that are used to make goods.

With commodities, such as oil or copper, there is a two way pull:

  1. The amount it costs to extract the oil or copper (including taxes, shipping costs, and other indirect costs), and
  2. The selling price for the commodity. The selling price reflects the customers’ ability to pay for the product, based on wages and debt availability. It also reflects other issues, such as the availability of cheaper substitutes.

The availability of increased cheap debt tends to pull oil (and copper and other commodity) prices high enough that businesses find it profitable to extract these commodities. This is why Keynesian economics tends to work–at least historically. When oil prices dropped to the low $30s barrel in 2008, the issue was very much a “decrease in debt outstanding” problem–taking place even before the Lehman bankruptcy–as I will show in later charts.

Figure 2. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

Figure 2. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

The peak in oil prices took place in July 2008. When we look at US mortgage amounts outstanding, we find that home mortgage debt hit a peak on March 31, 2008, and very slightly declined by June 30, 2008. The bankruptcy of Lehman Brothers did not take place until September 15, 2008. A further decline in the amount of home mortgages outstanding occurred from that point on, partly because of declining sales prices and partly because commercial organizations bought homes to rent them out.

Figure 3. US home mortgage debt, based on Federal Reserve Z.1 data

Figure 3. US home mortgage debt, based on Federal Reserve Z.1 data

When we look at consumer credit outstanding, we find that consumer credit outstanding hit a maximum on July 31, 2008, and began declining by August 31, 2008. (Consumer credit is available monthly, while mortgage debt is available only quarterly. Some definitional change regarding consumer credit must have taken place as of December 31, 2010, to cause the jump in amounts in the graph.)

FIgure 4. Consumer Credit Outstanding based on Federal Reserve Data. Student Loan data was available only for 12/31/2008 and subsequent. Prior amounts were estimated.

FIgure 4. Consumer Credit Outstanding based on Federal Reserve Data. Student Loan data was available only for 12/31/2008 and subsequent. Prior amounts were estimated.

When student loans are excluded, consumer credit outstanding (including such items as credit card debt and auto loans) is still not back up to the July 31, 2008 level today (Figure 4).

I have not shown commercial and financial debt, but they decreased as well, with somewhat later peak dates, coinciding more with the Leyman collapse. In my view, the spending of individual citizens is primary. When their spending falls, it quickly ripples through to business and government accounts. We see this affect slightly later.

The Federal Government quickly stepped in with more spending (funded by debt), as shown in Figure 5, below.

Figure 5. U S publicly held federal government debt, based on Federal Reserve data.

Figure 5. U S publicly held federal government debt, based on Federal Reserve data.

If we combine all United States debt (Figure 6, below), including both government and non-government, it becomes clear that the rate of increase in debt slowed markedly in 2008 and subsequent years.

Figure 6. US debt, excluding  debt which is owed to governmental agencies such as the Social Security Administration. Amounts based on Federal Reserve Z.1 data.

Figure 6. US debt, excluding debt which is owed to governmental agencies such as the Social Security Administration. Amounts based on Federal Reserve Z.1 data.

Without this increasing debt, oil prices dropped to less than one-fourth of their maximum values (Figure 2). Prices of other energy products–even uranium–dropped as well. Somehow the high prices of oil that occurred in early 2008 had turned off the “pump” of ever-increasing debt that had previously held up commodity prices.

Oil Prices and Interest Rates–the Two Big Factors Affecting Discretionary Income

If oil prices spike, clearly discretionary income falls, for reasons described above. If interest rates spike, suddenly goods that are bought with credit (such as automobiles, homes, and new factories) become more expensive. Thus, a spike in interest rates will tend to adversely affect discretionary income as well. If the Federal Reserve wants to counter high oil prices (which continue to affect discretionary income adversely for the long term), it needs to keep interest rates low. Hence, the attempts to keep interest rates low for the long term.

The primary approach to keeping interest rates low has been Quantitative Easing (QE).US QE was begun in late 2008 and has been kept in place since. Other major countries are also using QE to keep interest rates down. The hope is that with very low interest rates the economies can somehow recover.

QE Doesn’t Really Work, Because it Doesn’t Fix Wages, Which are the Underlying Problem

When oil prices are high, wages tend to stagnate (Figure 7, below).

Figure 7. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.

Figure 7. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.

The reason why wages tend to stagnate when oil prices are high has to do with the adverse impact high oil prices have on the economy. Consumers cut back on discretionary spending. This leads to a loss of jobs in discretionary sectors. Also, labor is one of the biggest costs most businesses have. If profits are squeezed by high oil prices, the logical response if to try to reduce wages in response. One way is to outsource production to a lower-wage country. Another is to mechanize the process more, thereby slightly increasing fuel usage but significantly decreasing wage costs.

Instead of going to individuals as wages, the money from QE seems to go to speculators, who use it to bid up stock prices and land prices. The money from QE also tends to hold home prices up, because some homes are purchase by speculators. The money from QE also helps encourage investment in marginal enterprises, such as in shale gas drilling. As a recent Bloomberg, described the situation, Shale Drillers Feast on Junk Debt to Stay on Treadmill.

What Really Pumps Up the Economy is a Rising Supply of Cheap Oil

One piece of evidence supporting the view that a rising supply of cheap oil pumps up the economy is the rising average wages seen in Figure 7 (above) during periods when oil prices are low. Another piece of evidence that this is the case is the close correlation between oil consumption (and energy consumption in general) and inflation-adjusted GDP (Figure 8, below).

Figure 8. Growth in world GDP, compared to growth in world of oil consumption and energy consumption, based on 3 year averages. Data from BP 2013 Statistical Review of World Energy and USDA compilation of World Real GDP.

Figure 8. Growth in world GDP, compared to growth in world of oil consumption and energy consumption, based on 3 year averages. Data from BP 2013 Statistical Review of World Energy and USDA compilation of World Real GDP.

When there is an inadequate supply of oil, it affects GDP growth. This happens because there is no inexpensive, quick way of switching away from oil. We need oil for very many uses, including transport, agriculture, and construction. In the late 70s and early 80s, we tried to switch away from oil as much as possible. Now the low-hanging fruit for making such a switch are mostly gone.

The spike in oil prices signaled that something had changed dramatically. We could no longer count on a rising supply of cheap oil to pump up the economy. People’s job opportunities were dropping. They found it necessary to cut back on debt. Either that, or creditors cut off credit availability. One way or another, citizens started using less debt.

World Oil Supply

World oil supply is growing only very slowly, as illustrated in Figure 9. While we hear much about the growth in oil from shale formations in the US, this is mostly acting to offset falling production elsewhere.

7. Growth in world oil supply, with fitted trend lines, based on BP 2013 Statistical Review of World Energy.

Figure 9. Growth in world oil supply, with fitted trend lines, based on BP 2013 Statistical Review of World Energy.

It is this lack of growth in oil supply together with the high price of oil that is holding back world economic growth. As stated previously, very low interest rates are needed to even maintain the level of economic growth we have now.

The Difference Between and Growing and Shrinking World Economy for Repaying Debt

In a growing economy, it is possible to repay debt with interest. But once an economy flattens, it is much harder to repay debt.

Figure 10. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.

Figure 10. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.

It is likely that it is this problem that underlies the difficulty economies have in increasing their indebtedness. Very low interest rates can help, but ultimately, if the economy is not expanding, debt doesn’t work well. Wages are not growing in inflation-adjusted terms, and because of this, it is not possible for citizens to take on much more debt. Increased student debt gets in the way of buying homes using mortgages later.

The Unfortunate Oil Price Problem We Have Now

The problem we have now is that a rising supply of cheap oil is no longer possible. Most of the cheap-to-extract oil is already gone.

Instead, the cost of extraction keeps rising, but wages are not going up enough for people to afford the high cost of extracting oil (even with super-low interest rates). The unfortunate outcome is that oil prices are now too low for many producers. I described this in my post, Beginning of the End? Oil Companies Cut Back on Spending.

Because oil prices are too low for companies doing the extraction, we really need higher oil prices. But if oil prices are higher, they will put the country (and the world) back into recession. Interest rates are already very low–it is not possible to lower them further to offset higher oil costs. We are reaching the edge of how much central banks can do to hold economies together.

The Effect of Rising Interest Rates on the Economy

If it takes very low interest rates to offset the impact of high oil prices, it should be clear that rising interest rates, if they ever should occur, will have a disastrous effect on the economy. If interest rates should rise, they could be expected to have a number of adverse effects, pretty much simultaneously.

  • They make the monthly payments for a new home or new car higher, reducing the sales of both
  • They reduce the sales price of existing bonds (carried on the books of banks, pension funds, and insurance companies)
  • They likely will reduce stock market prices, because bonds will look like they will yield better in comparison.
  • Also, the country will be shifted into recession, and lower stock prices will result based on the apparently worse prospects of most companies.
  • The resale value of homes will likely drop, because fewer people will be in the market for  a move-up home.
  • The US government will need to pay higher interest on its debt, necessitating a rise in taxes, further pushing the country toward recession.
  • With higher taxes and more layoffs, there will be more defaults on debts of all kinds. Banks, insurance companies, and pension plans will be especially affected. Many will need to be bailed out, but it will be increasingly difficult to do so.

The Federal Reserve has said that it is in the process of scaling back the amount of debt it buys under QE. The expected effect of scaling back QE is that interest rates will rise, especially at with respect to longer-term debt. For a while, US interest rates did rise, and home sales dropped off.  But more recently in 2014 year to date, interest rates seem to be falling rather than rising. This is strange, since this is the period when the scaling back of QE is supposedly actually taking place, rather than just planned. It is possible that overseas transactions are distorting what is really happening.

Getting Out of this Mess

The substitution of debt for additional salary isn’t necessarily a very good one, even with very low interest rates. For example, the maximum length of new car loans has increased from five years to six years to seven years, allowing people to afford more expensive cars. The catch is that loans are “underwater” longer, and it becomes harder to buy a replacement car. So ultimately, buyers tend to keep their cars longer, reducing the demand for new cars. The problem isn’t entirely solved; to some extent it is just delayed.

It is hard to see a way out of our current predicament. The ability of consumers to pay higher prices for goods and services under normal circumstances requires higher wages. But if higher wages are not available, higher debt plus very low interest rates can “sort of” substitute. This cannot be a permanent solution, because there are too many things that will disturb this equilibrium.

As we have seen, rising interest rates will bring an end to our current equilibrium, by raising costs in many ways, without raising salaries. It will also reduce equity values and bond prices. A rise in the cost of extraction of oil, if it isn’t accompanied by high oil prices, will also put an end to our equilibrium, because oil producers will stop drilling the number of wells needed to keep production up.  If oil prices rise (regardless of reason), this will tend to put the economy into recession, leading to job loss and debt defaults.

The only way to keep things going a bit longer might be negative interest rates. But even this seems “iffy.” We truly live in interesting times.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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586 Responses to The Connection Between Oil Prices, Debt Levels, and Interest Rates

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  2. Don Stewart says:

    Dear Gail
    I think that one missing piece is the ability of the US Government to manipulate the statistics to show whatever it is they want to show.

    For example, Shadow Stats shows that inflation is running about 5 percent, rather than the official 2 percent. Therefore, the real GDP has actually been declining since about 2004 rather steadily, except for the big drop in 2008-9.

    One of the questionable practices the government uses is the hedonic adjustment. If the government bureaucrats believe that the product has been ‘improved’, then they treat that as a price reduction, even if the shelf price doesn’t change at all. As someone who has wrestled with a ‘new and improved’ product for the last 48 hours, trying to get it to do what it formerly did with ease and grace, I am suspicious of these adjustments. Similarly with all the services where a human once dealt with the machines and bureaucracy, but now the consumer is expected to wrestle with them.

    For example, take a new car. There is no doubt that new cars are flashier than cars used to be. My new car is sold on the basis that it lets you wear your ‘skinny jeans’ and not wrestle getting the keys out of the pockets. If we see a car, not as an object of consumption, but as an aid to getting to work on time, the ‘skinny jeans’ hedonic adjustment is meaningless. Nate Hagens says that automobiles approximately double the speed of getting around in an urban area. That factor has probably not changed in 50 years. So, looked at as a tool, cars do just about what they did 50 years ago. Hedonic adjustments might mean something in terms of pure consumption, but we need also to be aware that humans quickly become accustomed to the new normal and do not retain any appreciation for the ‘new and improved’ features beyond a few weeks. If hedonic adjustments decayed at the same rate as human appreciation, the government statistics would be much different.

    If we accept the Shadow Stats numbers as more indicative of the true state of affairs, we would expect that consumers are increasingly unable to afford to live middle-class lifestyles. Charles Hugh Smith has written on this subject, and shown that it now takes an income of more than 100,000 dollars to live a middle-class lifestyle. In short, the lifestyle which was affordable to the majority of Americans in 1955 is now affordable to only a minority of Americans. Comparing a 1955 automobile which required a little struggle to get the keys out of the pocket with the current ‘skinny jeans friendly’ automobile merely obscures what is happening.

    QE and financialization in general make money readily available to corporations, but tend to penalize ordinary people, and particularly poor people. The highest interest rates are paid to loan sharks and ‘pay day loan’ scams. Therefore, QE and financialization will make it easier for corporations to buy the houses, or build apartment buildings, and rent to tenants who live from hand to mouth. The notion of owning one’s own home is part of Smith’s receding middle class horizon.

    Bernanke reportedly is telling people who are willing to pay 250,000 dollars for dinner with him, that interest rates are going to stay at zero and inflation at 2 (official) percent for the rest of his life. If the inflation rate is actually 5 percent, that means that the government is taking 5 percent of savings held in the form of dollars every year. If the savings are held in the form of stocks or real assets such as farmland, then there is some chance the saver might come out ahead or at least not lose ground. But as the fortunes of the ordinary citizens continue to sag, one wonders how long stock markets and farmland can continue to increase in price.

    Don Stewart

    • Thanks! I agree with you. I find the “hedonic improvements” in Excel to be a head ache. The new version can do ten times as much as the old version (or at least 10 times fancier) but now a person has to go through a whole list of menus to get back to the original simple method. Cars and homes are bigger and fancier. I personally would prefer the smaller, older version.

    • Pete the bee says:

      new cars last longer than ever, no? shouldn’t that factor into the hedonistic adjustment.

      car travel is far safer than it used to be. so improvements in safety should factor into the inflation adjusted pricing.

      im guessing the effect improved safety record is probably understated, and thus modern cars are even cheaper than you think.

      the Prius is probably the least expensive car ever invented. the same technology that enables its mileage reduces its wear and tear and lets it ride longer with fewer repairs, and the crumple zones and air bags improve its safety factor.

      • Connorhus says:

        I drive new cars for a living and let me tell you there is no way any of them are going to last as long as the older models without a serious bump in maintenance costs. You may get more mileage out of em within a certain span but you are going to pay for it in massively increased routine costs and inflated repair costs.

        And there won’t be any putting off minor or nuisance repairs either. When something breaks you will be getting it fixed or the vehicle will not run long more than likely.

        I also believe the improved survival numbers are a bit of a misdirection as well at least in the real world if not the testing facility. We are driving less miles and much less rural miles as populations move into the cities so accidents are less fatal anyway.

        • Paul says:

          The more complicated the machine … the more parts to break ….

          Kinda like the saying: the bigger they are the harder they fall…

          • interguru says:

            When I was a kid (40’s and 50’s) getting 100,000 miles out of a car was a real accomplishment. Most odometers had only 5 digits.

            Now it is routine. Cars go 150k, 200k. The average age of cars on the road is 11.4 years, which means that cars last almost 23 years. One time I said to my kids, let’s take the wagon out and watch the milage go past 100k. They said “What’s the big deal?”

            However, they are higher tech, and the replacement parts cannot come from a small factory down the road.

      • Paul says:

        Because of all the gadgets (GPS, AC, Air Bags, etc etc etc) the actual energy that goes into making the components of these cars offsets any gains in fuel efficiency.

        Imagine how much energy goes into mining rare earths that are used in catalytic convertors for instance….

        • Rodster says:

          IIRC the same applies to recycling plastics and glass products. I know before I toss a can in the recycle bin I rinse it with lots of water. I can only imagine the process and energy involved to recycle those products.

          • I visited some places in India where the recycling was going on. Coal was the fuel used. Very little electricity was used to light the workplaces–maybe a bulb or two, a hole in the ceiling, and some windows. There didn’t seem to be restrooms available. We heard about one (outhouse type) restroom for something like 1000 people (I forget the number). In some of the work-places in India, we heard that men left their family farms, to earn money in the city. They slept on the work-place floors to save money. Not a pretty picture.

            • Hartley Schultz says:

              Hello once again Gail
              Speaking of coal, what do you make of Deutsche Banks decision not to fund development of the worlds largest coal terminal?
              http://www.abc.net.au/news/2014-05-23/deutsche-bank-abbot-point-coal-terminal/5473614#comments
              HAVE ecological and environmental concerns really triumphed over economics? Do you for see ethical green banking establishing itself around the globe? Or do you think that other hidden factors in the limits to growth story may have played their part in this decision?
              Kind regards
              H.

            • Stefeun says:

              Bonjour Hartley,
              Looks like investors fear of “reputational risks”, thanks to high pressure put by environmentalists, because of threat on the Coral Reef (protected by UNESCO).

              The final agreement for Carmichael mega-mine, which is behind the Abbott port expansion project, is in the hands of Greg Hunt, your federal environment minister.
              My best guess is that he cannot sign for Carmichael mine, hence the Abbott investors start thinking* it’s way too risky because the discussion is public and they don’t want to be labelled as the ones who destroyed the unique symbol the Great Barrier is.
              (*: Anglo-American already withdrawed early March, if I’m right)

              Here’s the best result of my short investigation:
              http://www.dailymercury.com.au/news/deutsche-bank-pulls-funding-abbot-pt-save-reef/2267609/

              Perhaps the reality is totally different, but this version sounds realistic to me (from the antipodes…).

        • Then there is the additional debt that is needed to buy the higher priced cars. Adds to our financial problems as well.

        • Additionally, now most cars mechanical operation is supervised by one or more computer systems and their respective sensors. The sensors are a major source of repair problem when they themselves go bad. On my Mercedes ML 320/98 I have replaced my crankshaft position indicator sensor, my oxygen sensor, and currently have problems between various sensors communicating between my ignition switch, door locks and shifter sensors and as well as a fuel level indicator problem. Several of these malfunctioning sensors completely shut the car down making it inoperable until the sensor malfunction was diagnosed (by yet another external computer) and replaced. Of course the design of the car never envisioned that any of these parts would need to be replaced as part of periodic maintenance so their access in all cases was extremely labor intensive. So, while newer cars may have some savings costs through increased durability in materials – they also have a lot more failure points that actually increase maintenance costs of the car over its useful life.

          Worse the failure points become income levers for the manufacturer. A car’s useful economic life span (the point when repairs are more expensive than the payments of a newer car) is now being determined by a computer program created by the manufacturer of the car – which makes engineered obsolescence not only possible, but a guaranteed feature of today’s automotive marketing strategies. The manufacture can program exactly when and how many repairs a new car will need beyond material failures and determine when the car becomes economically untenable to the owner – insuring when the car will replaced.

          • Paul says:

            Yep — it’s kinda like nobody took into account a lot of things in this massive project in Spain …

            Probably sounded great — in theory — but when put to the test — completely unfeasible.

            But hey – at least they tried – can’t fault them for that.

            Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics
            http://energyskeptic.com/2013/tilting-at-windmills-spains-solar-pv/

          • jeremy890 says:

            Had a 1995 Honda Civic that was trouble free and very little repairs until “age” did her in and just got a new Nissan and already reading about recalls regarding several “sensors” for airbag and brakes.
            Seems that the software is very complicated and done in cheap countries and the amount and varied responses it needs to deal with causes malfunctions.
            Interesting that auto makers will computer program a car to fail at a certain time. No surprise there.
            No matter, gasoline will give out first perhaps!

    • Paul says:

      I am familiar with Shadow Stats — I believe it is a paid site — so I generally only get info when they comment in the news.

      Since the site claims to give the true picture (and I agree it most likely does) then surely the Fed has that picture as well…

      What I don’t understand is why Bernanke didn’t get the Best Actor Award at the recent Academy Awards.

      What sheer genius it must take to get in front of the camera with millions watching — knowing that every word out of your mouth is a complete and utter lie. And yet still maintain a straight face!!!

      Absolute sheer thespian genius! Bravo Ben – Bravo!!!

      Perhaps now that he is retired he might dabble in a little Shakespearean theatre?

    • Interest is just a small part of the total equation.  It is much more about the total available credit based on resource availibility.  This controls the total Money Supply.  For more, read The Money Valve, just up on the Diner.RE

  3. Don Stewart says:

    Dear Gail

    Here is another example of how the middle class dream has gone astray, while government statistics show everything is rosy.

    http://drhyman.com/blog/2014/05/19/key-automatic-weight-loss/

    The article reports on a scholarly study just published in the New England Journal of Medicine by two respected research scientists. The long and the short of it is that calories are not just calories, if you are concerned about weight and health. It is vitally important the type of food you eat to get the calories. Looked at as an ecosystem, we are currently suffering the ravages of sugar and flour. Both sugar and flour are partially products of the oil age. Oil permits us to grow sugar products and refine the sugar, and to finely process grains to produce flour and then turn those products into industrial food in factories.

    One can visualize government bureaucrats increasing the hedonic score of food in cans and bottles and packages as the sugar content increases…after all, it sends more intense reward signals to the brain.

    And lots of monetary costs are generated when the food industry produces and sells such goods…we call those costs GDP. We also count as GDP the health care costs we necessarily incur, either as governments or employers or individuals. Costs become equated with ‘good’ only with heroic assumptions or if one is a banker or the government looking for something to tax.

    In a properly run ‘hedonic adjustment’ system, sugar oaties would be heavily penalized as having negative value while fresh broccoli would be worth even more than it costs…because it can reverse DNA damage.

    In short, the official statistics mean little to nothing…except as they reflect on the ability of the financial system to keep on humming.

    Don Stewart

    • Yes, our food industry has real problems. A person might think the government would do some regulation, but that is not the way things work here.

      • Stefeun says:

        Raw food is not interesting for GDP.
        Good health is not interesting for GDP.
        This index is geared to run the machine as much as possible and create activity, doesn’t matter if the job is useful or pointless, or dangerous to people.

        • Christian says:

          Good summary. I’ll add while some people here and there talk about happines index instead of GDP index, we have not much ideological frame to live without a quantitative and mathematical set of references

          • BC says:

            Stefeun, excellent points.

            Moreover, consider this: Total local, state, and federal gov’t spending, private “health care” spending (18% of GDP, $9,500 per capita, and $25,000 per household), and household debt service amounts to a cumulative EQUIVALENT OF ~55% of nominal GDP and ~80% of private nominal GDP.

            Also, total net flows to the financial sector exceed the yoy growth of nominal GDP.

            That is, the reported “value-added” output of the US economy consists of primarily gov’t, including war, illness, and indebtedness of the bottom 90-99% of households.

            Thus, for the US economy to grow, we must continue to increase debt, illness, and gov’t’s share of private value-added output, i.e., production, wages, etc.

            Scandalous and a sign of inexorable decline.

        • If we all sue each other, it creates lots of activity. Not a lot of benefit.

      • Ann says:

        Nicole Foss has an excellent, excellent article on food here:

        http://www.theautomaticearth.com/physical-limits-to-food-security-water-and-climate/

        that is worth your time.

        • Paul says:

          Well worth my time — very disheartening — we generally assume water will be exported by diverting rivers rather than by producing water intensive crops and shipping them out of a country – splendid point.

          One wonders if in a million years some other life form will visit earth and it will resemble Mars — and they will discover remnants of an ancient civilization under the sands…

          Perhaps Gail should load a copy of this blog into a time capsule — what fascinating reading this would make for those who wanted to understand how a single species ruined a majestic planet.

        • Paul says:

          check out this chart that indicates how much water various crops require

          http://www.motherjones.com/environment/2014/02/wheres-californias-water-going

        • Jonathan Madden says:

          Nicole Foss omits to account for ‘recoverable water’ in her crop usage numbers. Water, meteoric or juvenile (borehole), is usually recycled on its path downhill to the sea. It may be used for human consumption several times on its journey and likewise irrigate a number of crops at decreasing height.

          However water used in industrial processes such as mineral extraction (eg fracking) and manufacturing may be irrecoverable. Too polluted and toxic to be cleaned by sewage and natural processes and needing distillation by the sun into rainwater. This type of water use is much more concerning.

    • jeremy890 says:

      Yes, Don, I just posted a comment regarding the new documentary out in theatres now titled
      “Fed Up” that focuses on the way food manufacturers and fast food outlets have spiked Sugars in our menus and processed food items in the supermarket.
      This is leading to dangerous health issues in our population, especially the children.
      Sugars (including high corn syrup) are POISONS.
      Everyone should see this film. It will blow you away about how the government really works!

  4. John Dunn says:

    Austerity, seems to be a favourite tool for dealing with that shrinking ‘economic pie’. And austerity appears to be the chosen way of cutting the poor adrift from the economy. This process is evident from Detroit to Greece. And that of course means more (of the shrinking) pie goes to those at the top.
    If you can print cash to keep the illusion going, and simultaneously keep the clamouring hands of the poorer classes away from dwindling recourses, it will of course work for a while, … until it doesn’t. There will be a tipping point (which I believe is very close), whereby sufficient numbers of people grasp that they are being consigned to that very category of ‘excluded’, and are sufficiently disturbed enough to do something about it.
    And what is that ‘do something about it’? It will range in many guises from Arab Springs, through localised calls for independence referenda, through Molotov cocktail street riots to a general right wing shift and ‘every man for himself’, policies in economically struggling developed countries around the world.
    [Gail], You have said for some time now that the our oil and energy predicament will reveal itself in our financial situation first, and I think you are right. Indeed, I suspect peak oil may never become a publicly accepted narrative, not because it is not real (which it clearly is), but because public attention will be too busy for such analysis, as we attempt to survive the maelstrom of ‘The Great Economic Unravelling’

    • Stilgar Wilcox says:

      Well put, JD. The intertwined topics of oil and economics will as you note, “…may never become a publicly accepted narrative.” This is because it requires developing an understanding of complex interactions, and most people try to keep their lives as simple as possible. On the surface for most people things now seem much as they have always been, not recognizing the predicament we face. Once things unravel enough for them to fully grasp the situation, it will have devolved into the throes of chaos and be too busy in a last ditch panic hoarding mode to even at that point understand why it is happening. Imagine what it will look like in grocery stores across the world as people scoop canned foods off the shelves in a raging panic. Carts colliding, screaming and yelling matches over a stick of Slim Jim or can of tuna. You won’t be able to hear much above the cacophony of overlapping enraged bickering. When the cash registers computer fails, people will yell obscenities of rebellion and roll their carts outside without paying, but the police will be too overwhelmed with more pressing crimes to stop them or even charge them later. Five weeks after what started as a cacophony of bickering will have faded into sobbing whimpers for those that had the luck or mettle to have made it through the bottle-neck.

    • Thanks for your comment. Oil limits don’t look like most people expect, so I doubt that they will ever recognize them. The issue is much more “limits to growth” than it is “peak oil.”

      • Hi Gail,
        Please take the time out to watch this latest video by Hans Rosling, he a Swedish medical doctor, academic, statistician, Professor of Int’ Health. Would be surprised if you haven’t come across him in your travels. It would be interesting to hear your thoughts on his detailed analysis. He presents an alternative point of view and it has to be said a convincing one.

        The way he presents hard data and statistics over the duration of the 1 hr video is entertaining to say the least.

        (Before anyone comments please take the time with a beverage of choice to watch the video before you dive in to discuss)

        He’s certain we’re at the end of population growth due to declining fertility rates across the globe. We entered the age of Peak Child. By the year 2000 we hit 2 billion children but that number has not climbed since. What has happened is fertility rates have dropped. This is because new borns are not dying earlier on at the rate they once were so young families don’t see the need to have as many children plus education has vastly improved. Over 80% of total population is now literate which is quite astonishing when you think about it.

        2013 there are approx:
        Group 1: 2 billion <15yrs – remained same since 2000 (known as Peak Child)
        Group 2: 2 billion 15-30
        Group 3: 1 billion 30-45
        Group 4: 1 billion 45-60
        Group 5: 1 billion 60yrs+

        Group 5 dies off and the rest grow 15 yrs older and have 2 billion children so by 2030 we end up with 8 billion.

        Group 4 dies off rest grow 15 yrs older and have 2 billion children so by 2045 we end up with 9 billion

        Group 3 doesn't die off because of improved health care, rest grow 15 years older, have 2b kids so by 2060 we end up with 11 billion people.

        11 billion is "Peak Population" and he's convinced we have nothing to worry about.

        2013
        1 billion in America
        1 billion in Europe
        1 billion in Africa
        4 billion in Asia
        So to codify: 1114 in 2013

        2050
        1 billion in America (end of population growth)
        <1 billion in Europe (declining population growth)
        2 billion in Africa (still growing)
        5 billion in Asia (end of population growth)
        So to codify: 1<125 by 2050

        2100
        <1b America (decline)
        <1b Europe (decline)
        4b Africa (end of pop growth)
        <5b Asia (declining pop growth)
        Final codification: <1<14<5 by 2100

        In 2100, there will be a "different world" in the "Old West" there will be less than 10% of total global population but over 80% will be living in Asia/Africa.

        He then asks the question, will there be enough resources to sustain them? "This will be a huge challenge and nothing will come automatically" he thinks it is possible for 11 billion to live together post rampant industrialized fossil fuel era dominated by US/EU at the expense of the rest of the world.

        http://www.dailymotion.com/video/x175qup_bbc-this-world-don-t-panic-the-truth-about-population-h264-1280×720-aac-rmac_news

        I'd say it's the West that's heading for massive decline not so much Africa/Asia right now. Russia/China just signed massive deals as we all knew would happen sidelining the petrodollar. Also at the same time in the US, the EIA announces downwards revision of Cali. fracking fields by a whopping 96%. This is was what we've all been discussing about. 2015 would be the peak of US production spelling disaster for US/UK/EU.

        Don't see such a bleak immediate future for Asia/Africa in the years ahead in the same way for US/UK/EU. If anything when the West collapses life will get better for Africa/Asia as a final Eurasian empire spawns post Anglo-Saxon.

        Interesting

        • Paul says:

          My connection is slow so having trouble watching … and it’s too late to start on a beverage :)

          Correct me if I am wrong but from the title and your comments I assume the video is primarily stating that population growth will stop.

          Which would imply a steady state economy — Gail has commented on this in two previous articles: http://ourfiniteworld.com/tag/steady-state-economy/

          • Hi Paul,
            “Peak Child” hit back in 2000, today the average family size is around 2, so correct nature seems to be finding ways to create steady state equilibrium. As education vastly improves along with increased life expectancy and health, fertility rates drop. Families no longer need to have as many children knowing the few they do have will survive. If the likelihood of death is high, nature has a way of producing more children knowing a greater proportion may die. We’ve seen this in Africa which is a little counterintuitive to us in the West today. Western fertility rates are in crisis, now I understand Western immigration open door policies.

            I’m also starting to shift my point of view slightly with this whole imminent collapse, game over syndrome. More than happy to have my assumptions countered to reach a likely conclusion with you.

            One thing we possibly underestimate “from our Western perspective” is the high probability BRICSA are setting up their own parallel “alternative” reserve currency structures backed by either their own commodities, currencies or both. It matters not if the US/UK/EU collapses, in fact Eurasia benefits from this. Our definition of wealth and those within Africa are very different. You understand clearly when you watch the video ;)

            I actually envision a new Eurasian empire emerging, vibrant, rich with resources, innovative manufacturing capabilities, tech know how that will power Eurasia for a long time to come. I also see a new form of collaborative commons emerging with new generations born into a new environment, one which baby boomers find hard to appreciate. (No offence to those baby boomers, you only know your perspective in a time of abundance and wealth) When you watch the video and see who’s actually consuming vast quantities of energy it’s not Asia nor is it Africa. Enemy No.1 is the West. The West has consumed at the expense of Eurasia through the dominating force of the petrodollar, OPEC and a US military on the prowl banging into line anyone that challenges.

            That said in line of recent geopolitical activities I see too powerful an alliance with Russia/China/Iran/India for the West to challenge. I also see Israel realigning Eastwards providing innovative technologies across Agritech/Watech/Biotech/Cleantech/Greentech/Nanotech. They’re incredible at innovating their way out problems with very few resources.

            Could it therefore not be a little dangerous to assume Africa/Asia will collapse at the same time in the same way as the West (US/UK/EU)? I think they’re doing much better than anyone within the West dares to assume.

            When you watch the video and understand the demographic shifts taking place, intuitively I’m no longer as concerned as I once was.

            It does seem the West has reached its limits to growth based on the petrodollar and Federal Reserve but an alternative parallel system will rise powering Eurasia for a long time to come.

            Let’s not throw the proverbial baby out with the bath water. It’s the West facing imminent problems not Eurasia. Yes Eurasia’s time will also come but just not today.

            • Paul says:

              I don’t agree – as my other posts indicate.

              But let’s say that was correct — when is all this going to happen?

              We are in the middle of a desperate struggle — central banks battling to fend off a total collapse — the most outrageous means have already been deployed — the bazookas have been fired.

              If a solution is to be realized it has to be now.

              I might add – that you might be confident of these findings — but I don’t think any of the people who are making these desperate decisions are.

              Because if they thought there was another way — they would not be committing economic suicide.

              And make no mistake — printing money by the tens of trillions is economic suicide.

              We had a pretty big blow up in 2008 — the coming one is going to make that look like a day at the beach.

              Central Banks are doing all they can already — when it goes the global financial system collapses

              See p 56 onwards for what that likely looks like http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

            • CTG says:

              Ponder the following points

              1. Do you think the US/UK/Western world will allow the alternative to take over easily especially US where they produce nothing tangible (of significant amount)? Their economy is mostly services (FIRE industry) and they have nothing tangible to backi their currency

              2. We are all tied to the hip with globalisation and the banks are way too big and interconnected.

              3. If any of the countries like Japan, China, EU or US have severe financial crisis (hyperinflation, crash, etc), it will bring down the entire supply chain. We are all dead (metaphorically) when letter of credits are not issued and global trade disappears (care think where your clothes come from).

              Any of the above happens, the time line is just 1-2 weeks before we are toast !

              Let me know your views…

            • Paul says:

              Agree.

            • xabier says:

              Interesting perspective. But might not Eurasia face insuperable problems of environmental degradation? And none of these regions are at all stable: nothing new in that, how stable was Europe in 1500? But they have all the powerful modern armaments necessary to destroy one another – and surely they will tussle over resources?

            • Hi CTG, in answer to your questions

              1. Yes I do see an altered geopolitical landscape where the West is no longer calling the shots. It’s happening with Russia/China. BRICS fire off an ultimatum to the US, reform WTO/IMF by end of 2014 or we will set up our own system. So to answer your question Russia/China/India combined are too powerful a force for the US to attack. UK/EU would not dare seek a war with Russia/China combined. The US may be stupid enough to try.

              2. We’re all tied to the hip. Today yes, but tomorrow no I don’t believe we will be. BRICSA are creating their own alternative to the petrodollar OPEC system.

              3. Again my argument is that geopolitical rivals Russia and China have over the past 48 hrs signed many historic strategic agreements that commits both governments and their key state-owned businesses to a series of coordinated intensive multi-decade actions to accelerate the end of the American-led unipolar geopolitical and economic world order.
              Both countries seek a non US-led multi-peaked multipolar great power system where each major power’s respective traditional ‘spheres of influence’ are respected. India’s newly elected leader, who has previously vowed not to step foot in America except to attend the UN, together with Brazil, and South Africa may in coming months also possibly join this Russia-China anchored multi-polar axis.

              An end to US hegemony will negatively affect western multinational corporations and investors and that will come because the West is experiencing Peak Oil which destroys the debt based fiat Western financial system which leads to BRICS decoupling creating their own system for the benefit of their own people.

              I’m sorry guys but you have to stop trying to drag the world down with you when you make your analysis. You’re doing it on the basis of the petrodollar OPEC system which we know to be a mirage and we know the rest of the world is starting to abandon.

              The world will decouple and float upwards as you drown.

              When the evidence changes, you have to shift your theory and the evidence is changing right before our eyes.

            • CTG says:

              Hi,

              When we say we are tied to the hip, we have too long a supply chain. I would 100% agree with your “scenario of reserve currency chnage” if we are now in the eras of 1940s,1950s where you still have localized manufacturing and the society is not so demanding and overall complexity is low. I am sure you can still remember that in the 1970s, the banks still have to use paper and cheques takes many days to clear. Now, everything is instantenous.

              In the 1950s, you may have a slow descend and things start to fall apart slowly and people will change over to another currency and have another paradigm shift. Now, just without electricity for a few days (completely gone with no visibility of when it will be up), our modern society is at a risk of fraying. The banks are closed, shops/supermarkets closed, petrol station closed. If for whatever reason, the US decides to enforce the petrodollar strongly, then chaos will start in the financial world. Many deals, spare parts, credits, etc are made in USD and are they going to re-negotiate it in dffferent currencies? How long will it take? Even if Euro fractures, how long will it take to renegotiate it in local currencies? Will the banks function? Will counterparties become a serious problem and will trust evaporates. Will my local Malaysian bank honour USD letters of credit given by Chinese bank or Thai bank. With credit gone, global trade freezes, transportation slows dramatically and that is when your electricity supply may be disrupted. Natural gas supply anyone (that is not in USD)?

              I do believe that it will not be a smooth drop down but in fits and stops. It is not because of peak oil or anything but our interconnectedness. All companies are running extreme JIT (just in time) with only a few days or hours of inventory. All firms are engaged in globalization with many parts and services sourced outside their country or at least hundreds of miles apart. All companies use credit and banking facilities much much more than what our grandfather did when they do business. There are many cogs in this extremely complex machine and just like a very modern car (like Tesla for example), just a simple sensor that is broken will render the car totally useless.

              I certainly hope what you say is true but in my line of work, I have seen before what has happened in 2008 when trust evaporated and when our machines are just days away from being permanently down as global trade froze. We cannot get our payment from our customers and we cannot pay our suppliers as banks are hardpressed in issuing credit. Central Banker came in to the rescue with money printing. Now? money printing is already happening. Print some more and hope it does not lead to massive inflation? Not sure but I certainly hope what you say is right…

            • Paul says:

              I think you are exactly right — quite interesting that you have been knee deep in what happens when things seize up — you have experienced exactly how this impacts the supply chain.

              I read this and then understood just how fragile the system was until I read this http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

              Financial calamity aside — there are so many things (hubs as the author calls them) – that could collapse this very complex system – war, a massive volcano, etc…

              For those without time to read that entire paper p.56 on explains what probably happens when a hub busts – they use the EU as the example

            • kesar says:

              I would add one more thing to the previous comments. I read David Korowicz analysis some time ago and it’s great, showing the whole system working and how it can stop working in barely 3 weeks.
              I must ask you how do you imagine “a new Eurasian empire emerging, vibrant, rich with resources, innovative manufacturing capabilities, tech know how” in times of lower global EROEI and decreasing net energy. I guess both issues are undeniable. If not please direct me to the scientific analysis of new, cheap energy resources. Unless you expect that this euroasian development will be achieved just through seizing of the last resources available at the expense of the rest of the world. In that case I doubt that the West will just lay down and die from unemployment and hunger.

        • BC says:

          Agritech, thanks for the reference.

          https://app.box.com/s/75sa0oswimkdphhdia5g

          The change rate of population growth has effectively halved since the early 1970s, growing at the rate during the 1910s-40s. The rate of deceleration of population growth is poised to increase at its fastest trend rate in the next 3-7 to 10-13 years, suggesting that population growth will cease by no later than the early to mid-2030s.

          If so, this implies a population of fewer than 8 billion by the late 2020s to early 2030s.

          However, real GDP per capita has grown little if at all since 2007-08, whereas 45-75% of net growth is attributable to the growth of China-Asia, specifically China. But China’s growth is now set to decelerate significantly owing to Peak Oil, excessive debt, energy and food imports, and demographic drag effects.

          Therefore, I suspect that flat or falling crude oil production per capita and increasing drought and loss of arable land will coincide with a decline in food production per capita sooner than most expect, which could lead to any number of limiting factors for population growth, including famine, rising infant mortality, social unrest, ethnic/racial/religion conflict and violence, war, mass migration, and so on.

          Thus, falling population growth and eventually a decline in population won’t be a cause of better conditions for the human population but an effect of the log-limit constraints already entrained by population overshoot, Peak Oil, and LTG, resulting in worsening conditions for most of us in the next 10-20 years.

          • @ BC thanks for your reply.

            If you read my response to Paul, I think you have to factor in Russia/Iran supply lines to China backed by a basket of BRICSA currencies/commodities, their miliatry in the exact same way OPEC supplied to America backed by the petrodollar and their military.

            I therefore respectfully don’t agree with your statement for the reasons I outline above:

            “But China’s growth is now set to decelerate significantly owing to Peak Oil, excessive debt, energy and food imports, and demographic drag effects.

            I see a parallel universe emerging where the petrodollar is no longer calling the shots nor the IMF/WTO.

            I think you too throw the baby out with the bathwater. It is the Western structure that’s collapsing whilst a new BRICSA structure emerges.

            We must make sure we define clearly what we mean when we talk about collapse, decline etc. and who it’s likely to impact hardest, when and why.

            It’s not an exact science but sill it’s incredibly interesting to see such changes by orders of magnitude.

            • BC says:

              The BRICs’ growth and demand for resources is a result of trillions of dollars of US supranational firms’ foreign direct investment (FDI) since the 1980s-90s. The growth of FDI is dramatically decelerating along with the growth of trade, i.e., the Anglo-American imperial trade regime.

              Peak Oil and resulting decline in exergetic capacity per capita makes further growth per capita impossible hereafter. China is set to experience a steadily rising trade deficit from energy and food imports and thus a breathtaking deceleration of real GDP per capita in the years ahead.

              The BRIC bloc growth boom is over, including China. Period.

            • I may have to re-think what I responded to someone else about there being a possibility of BRICs continuing a bit longer. You are probably right about China and the trade deficit coming from energy and food imports. It also may be difficult to hold the price of oil up high enough, to keep world extraction going at close to current levels.

            • “The BRICs’ growth and demand for resources is a result of trillions of dollars of US supranational firms’ foreign direct investment (FDI) since the 1980s-90s. The growth of FDI is dramatically decelerating along with the growth of trade, i.e., the Anglo-American imperial trade regime.”

              Repeated Again, BRICS will “declouple” and set their own structures, their own reserve currencies not including the dollar. It doesn’t make a difference what America does because a new system is emerging.

              I disagree, BRICS bloom is not over, it is the West collapsing. The evidence points towards a rising Eurasian empire commodities backed to rival a declining OPEC and the petrodollar.

              It is only the US/UK/EU collapsing possibly followed by Japan/Australia should they decide to remain part of the petrodollar system.

            • Paul says:

              I believe this is one situation where the domino theory definitely applies.

              I cannot see how one significant country crashing does not take the entire world down as well.

              As a debt banker said to me in 2008 ‘if a G-20 country goes down — that would be…. he hesitated for a bit then said — that would be mad max’

              We saw what the collapse of Lehman did….

        • Interguru says:

          I don’t see the big deal with the Russia China agreement. It is driven as much by geography as anything else — Russia has a lot of gas within pipeline distance of China and China needs it.

          As far as abandoning the $US, I can’t see Russia depending totally on the renminbi/yuan. China’s economy is sitting on a mountain of unpayable debt ( as is ours — but we have a reserve currency). I am sure there are circuit breakers in the deal.

        • I think I have seen the presentation you are talking about–with various blocks to represent certain age cohorts. I am not in a good place to watch it now.

          We are running into a resource problem now, with a little over 7 billion. I can’t imagine we will possibly be able to support 11 billion. We certainly don’t have renewable resources to support 11 billion.

          • Hi Gail yes, correct that’s the presentation.

            When you say “we’re running into resource problems now”, could it be that the West is running into resource problems via OPEC using the Petrodollar/Federal Reserve/US military protected system?

            You often explain we’re not facing an aggregate physical decline of resources but a fiat petrodollar backed financial one.

            Is it not also possible a new alternative Eurasian system is emerging where China takes over the role that America once had? This seems to be happening with the new Russia/China alliance.

            So China via Russia/Iran/Brazil/Africa using basket of currencies probably commodities backed protected by a Russian/Indian/Chinese military complex?

            If we stand at circa 7 billion today and over the next 15 years an extra 2 billion kids hit the earth under a new Eurasian system with greater advances in mean, clean and green tech efficiencies then it’s not hard to see how that may be possible for a little longer than we thought.

            I suspect it’s the West in more immediate trouble rather than a vibrant Eurasia. I agree with you that Eurasia will also eventually face decline but just not today.

            • Paul says:

              I am not a fan of the NYT so I only got as far as the first bit of propaganda:

              “Having secured the territorial windfall of Crimea in March, Mr. Putin went on to achieve his main tactical objective in April.”

              That is not true – most people living in this region are in fact Russians – Russia has for ages maintained a fleet and many thousands of troops in Sevastopol.

              As we have seen in the recent referendum the people there ratified what was already an “unofficial relationship”

              The Crimea is to Russia as as Puerto Rico is to the US — actually even more so because the Crimea (and Ukraine) have been intertwined with Russia for centuries.

              So Putin secured nothing — Crimea was defacto Russian territory before this flare up.

        • edpell says:

          No immigration? Everyone stays put for 100 years? I think not.

          2100
          2b Americas (increase due to immigration)
          2b Europe (increase due to immigration)
          3b Africa (end of pop growth)
          4b Asia (declining pop growth)

        • Fred Magyar says:

          “11 billion is “Peak Population” and he’s convinced we have nothing to worry about.”

          He’s a good entertainer but I think he’s nuts!

          BTW, he seems to be completely oblivious to the the underlying cause of the increase in human population from 1 billion in the 1800’s to 7 billion plus today, ‘FOSSIL FUELS’

          Last year I spent eight months in Sao Paulo, Brazil a city of 20 million and which has a population density comparable to that of Shanghai. Trust me when I say that it is not even remotely sustainable! This year they are suffering massive drought and just last week they registered the greatest city wide traffic jam in their history (344 km).
          There is also serious social unrest happening there and all over Brazil due to expectations created during the economic boom based on cheap oil. The government is no longer able to meet those expectations even though the people now think they are entitled to all the false promises! This is very bad news indeed.

          We are still adding about 4 Sao Paulos worth of humans to our planet every year and we are running out of ALL resources to sustain them,let alone supply them with all the artificially created expectations that the global economy requires! I don’t think that this can continue….

          • Hi Fred,
            Global fertility rates are falling as you will have picked up by watching the video, this applies all over the world. Peak Child hit back in 2000. This is encouraging because it means population growth is slowing as fertility rates drop. Fertility rate trends are downwards.

            In the West fertility rates are plummeting, in Japan for example population is in decline. You also cite Brazil. I can tell you the fertility rate in Brazil has fallen to 1.81 in 2013 so they too are slowing down.

            My new theory is the West has in fact been living the high life at the expense of the rest of the world and has done so since the industrial revolution around the period you mention. First the British then the Americans.

            It does seem the West has reached limits to growth via their OPEC petrodollar, Fed Reserve, IMF/WTO system protected by the British then the US military industrial complex.

            It also seems Eurasia which still has fossil fuels you mention are indeed sharing amongst themselves whilst at the same time “locking down” economically/militarily whilst developing an alternative system to the petrodollar and OPEC.

            Evidence? Recent Russia/China relationship. BRICS also handed an ultimatum to the US by no later than end of 2014, reform IMF/WTO or we sideline you.

            My argument is that as the West declines, BRICS will rise until they too will face the inevitable.

            Gail keeps saying the interconnected financial system, but as we know it’s a petrodollar system and whilst we wont run out of fossil fuels anytime soon, we can reset the entire global financial system that more equitable to others. If anything this new system may not be to the advantage of the West.

            You all keep talking about total collapse assuming the current system is accepted. There is increasing evidence to suggest it’s not accepted and we’re moving towards a BRICS controlled system.

            • fmagyar says:

              Hi Agritech Media,

              I do agree with most of your points! Sure fertility rates are dropping and population growth is slowing. Does that suddenly mean 11 billion humans is a sustainable number?

              I guess I’m just a worry wort… I still get very worried when I hear anyone state that we can support 11 billion humans on this planet and that there is nothing to worry about! Really?!

              Here’s a graph of the ecological footprint trend for Brazil:Personally I don’t like it!
              http://www.footprintnetwork.org/en/index.php/GFN/page/trends/brazil/

              As for the world as a whole:
              http://www.footprintnetwork.org/en/index.php/GFN/page/world_footprint/

              ” World Footprint

              Do we fit on the planet?

              Today humanity uses the equivalent of 1.5 planets to provide the resources we use and absorb our waste. This means it now takes the Earth one year and six months to regenerate what we use in a year.

              Moderate UN scenarios suggest that if current population and consumption trends continue, by the 2030s, we will need the equivalent of two Earths to support us. And of course, we only have one. ”

              So where are we going to find that extra earth? Yeah, I’m still pretty worried!

              Cheers!
              Fred

            • Lizzy says:

              I’ve been wondering about this too, Agritech. Not from the BRICS/Eurasia aspect, but from the money aspect. If the money system as is, doesn’t work anymore, won’t we just ditch it? I asked a while ago here about people just being forced to drill for oil, and it was pointed out that the oil supply-chain and extraction skills are very international, so one slave-using state could not do it alone, with or without slave labour. Okay, but what if the entire economics system changed completely? “reset the entire financial system”
              Has it always been as it is now? I don’t know, but I doubt it.

            • Lizzy says:

              Another thing — all this unpayable debt. It is simply not possible that the US, UK, France, Germany, Italy etc etc etc will ever pay it back. So, what do we do? Have world-wide debt forgiveness? Then what?

            • Interguru says:

              The Jubilee in Leviticus, debt forgivess every fifty years ( http://en.wikipedia.org/wiki/Jubilee_(Biblical) ) is not the bronze age nonsense that it appears to be. Look at economic history — collapse which wipes out debt happens repeatedly after some decades

            • Hi fmagyar,
              In answer to your question, our suspicion is that over the next 30 years we will lose around 2billion+ through natural death cycles and fertililty rates will slow down even further, so granted, there’s a debate to be had whether we’ll even hit 11billion by the dates projected.

              We know people are definitely going to die through the natural cycle. We know we will lose 2 billion over the next 30 years. It all boils down to the number of young couples who feel confident enough to bring one or two children into the world. In the West we know that young couples will hold back as they’ve done in Japan in a period of low to no growth. Remember Japan’s population is actually in decline. So too Russia. That said it only applies in Russia because the US petrodollar OPEC system won leading to their collapse. OPEC supplied oil to the world market at cut throat prices but now that’s changing as Russia aligns with China and the Western OPEC system has peaked.

              I think rather than using generalised big numbers which many fall into the trap of, you have to dig a little deeper “from all angles” to gain alternative perspectives rather than the whole world is collapsing at the same time, in the same way, via the same system.
              It’s simply not accurate in our humble opinion.

              The May 21 $400bn 30-year gas deal between Russia’s Gazprom and China’s China National Petroleum Corporation (CNPC), larger in value than the entire GDP of the United Arab Emirates, is just one node in a dramatically deepening web of strategic accords which now binds both China and Russia to a coordinated diplomatic, military, geostrategic, economic, financial, technological and socio-cultural cooperation to catalyze the emergence of a non-US led multipolar world order. Furthermore Russia and China, both ancient imperial powers on the economic ascendancy, seek an expanded ‘lebensraum’ along their current borders – Russia in Eastern Europe (Ukraine), and China in the South China Sea. Together with other BRICS allies, (India, Brazil and South Africa), China and Russia both aim to accelerate the emergence of a non-American led multipolar world order.

              This mean the end for US MNCs, the end of the petrodollar, then end OPEC cartel, the end of Western dominated system. This is why the US supports Sunnis around the world, OPEC is their largest supplier and they know it.

            • Interguru says:

              ” Furthermore Russia and China, both ancient imperial powers on the economic ascendancy”

              Russia is not on economic ascendency. It has a weak economy dependent on outside investment. It needs oil @ $115 to break even according to earlier posts.

              It is Saudi Arabia with nukes and permafrost.

            • Hi Lizzy,
              We believe the US is fighting to maintain it’s petrodollar OPEC “world order” (let’s call it the current “international system”)

              Dissecting your questions/statements one by one:

              “If the money system as is, doesn’t work anymore, won’t we just ditch it?”

              When you say we, who do you mean, who is we? We believe BRICS are in the early stage processes of ditching the Western dominated money system for a commodities backed one. There is rising evidence along with numerous credible political statements on record to support this now.

              “I asked a while ago here about people just being forced to drill for oil, and it was pointed out that the oil supply-chain and extraction skills are very international, so one slave-using state could not do it alone, with or without slave labour.”

              We think in today’s world it’s a little arrogant to assume Russia/China are not able to work together with other “tech advanced nations” to direct their own resources towards extracting their own “conventional” reserves which are a long way off from peaking. That also includes Iran’s resources. We also think Russia/China are now preparing for phase transition whilst “locking down” their resources from Western attempts to gain access. Again we see real world evidence of this.

              “Okay, but what if the entire economics system changed completely? “reset the entire financial system”

              Again we think a financial reset is inevitable and rapidly approaching. We know the US system is at or near to “breaking point” and when this finally snaps triggered by any number of risks which Gail has identified before, it will cause problems globally, we’re under no illusions about this. There will be pain during the messy transition. What we’re saying is that the new system that emerges from the chaos will not be dominated/controlled by the West. The petrodollar will not be world reserve currency, the IMF/WTO will not be as powerful as it was once. BRICS will rise as leaders of a new world reserve basket of currencies commodities backed, for the final Eurasian century.

              Remember this…

              Every 30 years we lose 2 billion people, avg global fertility rates are circa 2.2 presently. In the West that number is lower, indicating much of the population growth will be in Africa, rich with resources and “aligning” to be part of a newer more equitable system. Please note that literacy levels in Africa are rising exponentially due to impacts of ICT. This is a fact so with collective better use of ICT and education, it’s inevitable standards of living will rise in the future relative to where they’ve been in the past and present. We’re working on many projects within Africa and you’d be shocked at aggregate improvements.

              Also what most of us never factor in Africa is the fact that their carbon footprint/energy use is negligible so there are still huge efficiencies to be gained. With better education, lower fertility rates, rising efficiencies, introduction to ICT their SoL will continue to rise as the West’s declines. World focus is now on Africa and BoP (Base of Pyramid) precisely because other’s have peaked.

              In your world it will feel like collapse, in Africa it will feel like a boom. You will look at a small holder farmer in Africa and think he’s poor by your standards, but you never look at where he started from and where he’s heading. You only look at his “balance sheet” and then frame it in your own perspective based on your perception of the world which inevitably is limited.

              The question remains whether US citizens vote in a Republican govt at the next election. A govt that recognises the risks to US hegemon and one that’s deemed aggressive enough to take the US towards war against Russia/China/Iran maybe even India and other satellite nations within BRICSA “sphere of influcence”.

              We hope US citizens are tired of war after the last few failed decades trying to stop this BRICSA transition and will choose to lay down arms quitely. If history is anything to go by then it’s not looking great.

              We know attitudes can change quite quickly as people’s SoL decline relative to where they were previously just look at WW1 & WW2. It’s never a pleasant experience. We suspect Obama is managing the decline of America, rather than opting for war with Russia/China, he is in fact turning inwards to deal with his own soon to be angry, frustrated citizens rather than projecting that anger outwards to other nations as the Republicans have done.

              Either way we believe the transition is happening and when the dust settles the West will not have total dominion as it once had.

            • Lizzy says:

              Hi Agritech, what you’ve said makes a lot of sense.Thanks for the comprehensive answer.
              Can I ask, who is the “We” you talk about? BTW, when I was saying wouldn’t “we” ditch a useless economic system, I meant humanity, peoples, the world…

            • Hi Lizzy,
              We’re are/and use, a small team/network of independent analysts dotted around the world: NYC/London/Belgium/TelAviv/Nigeria/Hyderabad/Beijing. If there’s consensus amongst the troops I (as concept founder) use the term “we”. AM is a new start-up focussing on Agriculture based low/hi technologies we hope to launch soon. We assess food security to be of rising international interest in the years ahead.

              As for your last statement unfortunately or fortunately depending on your perspective we see the following:

              “While the operating system of the US led unipolar order reflects domestic American liberal democratic, capitalist and free trade values, the emerging multipolar system will also reflect non-liberal, non-democratic, protectionist, authoritarian, traditional cultural values of Russia, China”

              Now you can add India to the ranks. We also assess Latin America, Africa to follow.

              As John Kerry quoted something along the lines of “Russia is challenging the existing international order” code for BRICS are challenging the current US dominated OPEC petrodollar/IMF/WTO order.

            • It is possible that the BRICS will be able to continue for a while, after the West declines. If I were in the BRICs, I would try to push the West out, so that perhaps we could continue for a bit longer.

    • Paul says:

      Austerity is a myth unless one is poor (as you point out) — governments have piled on massive new debt since 2008 — to the benefit of the very wealthiest.

      http://www.zerohedge.com/news/2014-03-09/global-debt-crosses-100-trillion-rises-30-trillion-2007-27-trillion-foreign-held

      One argument is that this is a way to keep the hamster running longer…

      Given that the elites make the rules I am not sure I buy that — if the ship is doing down then why do only the elites get to enjoy the final years/months?

      Why can’t a single mom working in Burger King have her first taste of champagne and caviar before things unravel?

      Why not — as Bernanke himself once suggested – fling buckets of cash from helicopters?

      The masses could party like it’s 1999 keeping the hamster rolling along a bit longer — and everyone could ride off into the sunset in style!

      Who knows — perhaps that is the plan as we run out of options — if that is the case then you will know when things are really really serious — when the Tee vee announces the free cash copter schedules for each neighbourhood.

      Let’s not judge our masters yet shall we – we still might get a piece of the end game action.

  5. Pete the bee says:

    If the oil prices are too low for producers, why is oil production in the US increasing so rapidly? The actual evidence from places like Texas and N Dakota is of massive investments in oil and natural gas production and rapidly increasing production numbers.

    • Joe Clarkson says:

      The oil production is increasing rapidly because investors are willing to keep loaning money to companies that have negative cash flow from operations. These companies make their money when they sell lease assets to other, “greater fool”, investors.

      The oil majors had their own money to invest. When they found out they couldn’t make a profit in tight oil, they left.

    • As long as interest rates are near zero, investors will put their money (plus borrowed money) into any kind of enterprise that has any chance at all of making money. They will also buy “junk” bonds. It is very easy to put together financial statements that show earnings off in the future, even though cash flow is negative for a very long time. Small companies can get away with this.

      Natural gas production is down in Texas and practically everywhere else outside the Marcellus Shale.

      • Paul says:

        Indeed – just as investors pouring billions into the dotcom boom… it made no sense in the long run (except in a few cases) — but investing is not what it used to be — you don’t invest in fundamentals….

        What you do – if you want to make money these days — is identify the next ‘wave’ – by that I mean look for something with a good story — doesn’t matter if it is true — something like ‘we’ve got 100 years of oil here – you best get in her quick or you will miss out’

        So doesn’t matter if you believe that or not — if you think enough people will believe it and buy in — if you get in early — you make money. Of course if you really do believe this and you fail to get out before it goes bust (because the whole thing is a lie) then you can lose everything.

        Same with every bubble no?

        • Pete the bee says:

          Yes, the dotcom analogy strikes me as apt. 15 years on, the underlying technology that was lauded by the dotcom pundits has been thoroughly vindicated. Our economy, GDP, quality of life, etc. has been boosted in many ways by the internet and internet capable technology and devices. Yet the actual investment opportunities in the late 90s were in bubble territory and were best avoided, except for a few careful selections.

          The shale boom/bubble seems comprable. There might be a crash in FRAK stocks at some point in the near horizon, but the underlying technology is sound, and it will transform our society in dramatic ways over the next 15 years.

          • Paul says:

            Fracking is peaking and will not exist in 15 years.

            It has never made sense economically. It is a ponzi scheme – and all the technology in the world is not going to change that.

            The title of this latest article is appropriate… so much for ‘100 years of oil’

            Write-down of two-thirds of US shale oil explodes fracking myth

            Industry’s over-inflated reserve estimates are unravelling, and with it the ‘American dream’ of oil independence

            Next month, the US Energy Information Administration (EIA) will publish a new estimate of US shale deposits set to deal a death-blow to industry hype about a new golden era of US energy independence by fracking unconventional oil and gas.

            EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil.

            The Monterey formation, previously believed to contain more than double the amount of oil estimated at the Bakken shale in North Dakota, and five times larger than the Eagle Ford shale in South Texas, was slated to add up to 2.8 million jobs by 2020 and boost government tax revenues by $24.6 billion a year.

            Industry lobbyists have for long highlighted the Monterey shale reserves as the big game-changer for US oil and gas production. Nick Grealy, who runs the consultancy No Hot Air which is funded by “gas and associated companies”, and includes the UK’s most high-profile shale gas fracker Cuadrilla among its clients, predicted last year that:

            “… the star of the North American show is barely on most people’s radar screens. California shale will… reinvigorate the Golden State’s economy over the next two to three years.”

            This sort of hype triggered “a speculation boom among oil companies” according to the LA Times. The EIA’s original survey for the US Department of Energy published in 2011 had been contracted out to Intek Inc. That report found that the Monterey shale constituted “64 percent of the total shale oil resources” in the US.

            The EIA’s revised estimate was based partly on analysis of actual output from wells where new fracking techniques had been applied. According to EIA petroleum analyst John Staub:

            “From the information we’ve been able to gather, we’ve not seen evidence that oil extraction in this area is very productive using techniques like fracking… Our oil production estimates combined with a dearth of knowledge about geological differences among the oil fields led to erroneous predictions and estimates.”

            The Intek Inc study for the EIA had relied largely on oil industry claims, rather than proper data. Hitesh Mohan, who authored the Intek study for the EIA, reportedly conceded that “his figures were derived from technical reports and presentations from oil companies, including Occidental Petroleum, which owns the lion’s share of oil leases in the Monterey Shale, at 1.6 million acres.” Mohan had even lifted his original estimate for the EIA to 17 billion barrels.

            Geoscientist David Hughes, who worked for the Geological Survey of Canada for 32 years, said:

            “The oil had always been a statistical fantasy. Left out of all the hoopla was the fact that the EIA’s estimate was little more than a back-of-the-envelope calculation.”

            Last year, the Post Carbon Institute (PCI) published Hughes’ study, Drilling California: A Reality Check on the Monterey Shale, which conducted an empirical analysis of oil production data using a widely used industry database also relied on by the EIA. The report concluded that the original EIA estimate was “highly overstated,” and unlikely to lead to a “statewide economic boom…. California should consider its economic and energy future in the absence of an oil production boom.”

            A spokesman for the Institute, Tod Brilliant, told me:

            “Given the incredible difference between initial projections of 15 billion barrels and revisions to 600 million, does this not call into account all such global projections for tight oil?”

            As I’d reported earlier in June last year, a wider PCI study by Hughes had come to similar conclusions about bullish estimates of US shale oil and gas potential, concluding that “light tight oil production in the USA will peak between 2015 and 2017, followed by a steep decline”, while shale gas production would likely peak next year. In that post, I’d pointed out previous well-documented, and alarmingly common, cases of industry over-estimates of reserve sizes which later had been questioned.

            Analysts like Jeremy Leggett have said, citing exaggerated oil industry estimates, that if reserve and production reality are indeed significantly lower than industry forecasts, we could be at risk of an oil shock as early as within the next five years.

            The latest revelations follow a spate of bad news for industry reassurances about the fracking boom. New research published this month has found that measured methane leaks from fracking operations were three times larger than forecasted. The US Environment Protection Agency therefore “significantly underestimates” methane emissions from fracking, by as much as a 100 to a 1,000 times according to a new Proceedings of the National Academy of Sciences study published in April.

            The Associated Press also reported, citing a Government Accountability Office investigation, that the US Interior Department’s Bureau of Land Management had failed to adequately inspect thousands of oil and gas wells that are potentially high risk for water and environmental damage.

            Despite the mounting evidence that the shale gas boom is heading for a bust, both economically and environmentally, both governments and industry are together pouring their eggs into a rather flimsy basket.

            According to a secret trade memo obtained by the Huffington Post, the Obama administration and the European Union are pushing ahead with efforts to “expand US fracking, offshore oil drilling and natural gas exploration”, as well as exports to the EU, under the prospective Transatlantic Trade and Investment Partnership (TTIP) agreement.

            Dr. Nafeez Ahmed is an international security journalist and academic. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It, and the forthcoming science fiction thriller, Zero Point. Follow him on Facebook and Twitter @nafeezahmed.

            http://www.theguardian.com/environment/earth-insight/2014/may/22/two-thirds-write-down-us-shale-oil-gas-explodes-fracking-myth

      • Pete the bee says:

        Why do you say natural gas production is down in Texas? The most recent aggregate numbers here http://www.eia.gov/dnav/ng/hist/na1160_stx_2a.htm show an increase through 2012. Since then the Barnett production has held steady, while other oily plays (Eagle Ford) have exploded. Remember the way shales work – they are all gassy, but some are more oily than others. So I would be very, very surprised if 2013 saw a dip in natural gas production.

    • Paul says:

      I keep a file on shale — just for moments like this — saves people having to dig to understand what is really happening:

      Shale Drillers Feast on Junk Debt to Stay on Treadmill
      http://www.bloomberg.com/news/2014-04-30/shale-drillers-feast-on-junk-debt-to-say-on-treadmill.html

      DREAM OF US OIL INDEPENDENCE SLAMS AGAINST SHALE COSTS
      The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems. Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html

      THE FRACKING PONZI SCHEME
      Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a “mini-bubble” is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled.” http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

      WHY AMERICA’S SHALE BOOM COULD END SOONER THAN YOU THINK
      http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/

      SCIENTISTS WARY OF SHALE OIL AND GAS AND U.S. ENERGY SALVATION
      “Tight oil is an important contributor to the U.S. energy supply, but its long-term sustainability is questionable. It should be not be viewed as a panacea for business as usual in future U.S. energy security planning.”
      http://www.sciencedaily.com/releases/2013/10/131028141516.htm

      U.S. SHALE OIL BOOM MAY NOT LAST AS FRACKIGN WELLS LACK STAYING POWER
      “I look at shale as more of a retirement party than a revolution,” says Art Berman, a petroleum geologist who spent 20 years with what was then Amoco and now runs his own firm, Labyrinth Consulting Services, in Sugar Land, Tex. “It’s the last gasp.”
      http://www.businessweek.com/articles/2013-10-10/u-dot-s-dot-shale-oil-boom-may-not-last-as-fracking-wells-lack-staying-power

    • InAlaska says:

      Pete the bee
      You are right, and ask a good question. I am invested in those independent exploration/production companies out west: EOG, Pioneer, Continental. They are making massive investments year over year and production is up year over year. My oily portfolio is growing year over year. This is the one disconnect that I still have with this narrative. Am I waiting for Godot?

      • Pete the bee says:

        Yes, you are waiting for an “energy crash” future that will never happen. They haven’t even bothered trying these new shale techniques in Alaska yet. It is estimated that slickwater fracking doubles the total amount of natural gas in Alaska. Once the LNG export plants are built for shipping this gas to Japan Alaska will begin fracking, and you will see some serious money being made.

  6. B9K9 says:

    When ZH first showed up on the scene, I used to comment that peak oil itself wasn’t the problem in terms of availability to do “work”. Rather, it was the failure of production to keep pace with accruing interest charges that would eventually doom the Ponzi.

    Of course, InAlaska and others – who are either in denial, purposely ignorant or malicious trolls (see comment above) – don’t believe the PTB aka Deep State are perfectly aware of these very fundamental facts. Rather, the PTB don’t exist, or if they do, they’re clueless like the rest of the MSM and drones who rely upon it for “news”, leaving on Gail, Paul, myself and a few others as the shining lights, the brilliant analysts who can put all the pieces together. LOL

    On that note, Paul, why do you hate America? Is it envy, jealously or some other deep seated animosity based on a supposed moral code? Did the Germans care if the Nazis (who they nominally supported) where slaughtering anyone who stood in their way of achieving the dream outlined in Mein Kamp?

    Likewise, are we Americans supposed to feel guilty that our government acts in ways that benefit all citizens, even though they violate the human rights of everyone else? Why do you think so many Americans still patriotically support their country? It’s because we don’t care; or, in other words, sucks to be you.

    The petro-dollar is a core strategic asset. If it goes, the entire tent folds. That’s why war is coming, because a threat to the USD reserve status is, in effect, a declaration of war. The exorbitant privilege forces others to support their very tools of oppression ie the war machine, by making them supply the natural resources for mere tokens of wealth as represented by little green slips of paper.

    You’d be lying if you declared you wouldn’t want a piece of that action, morals be damned. Russia & China want it now – badly – and so the US must defend itself at all costs. If we lose this fight, then the whole thing rolls over.

    • Rodster says:

      Quote: “The petro-dollar is a core strategic asset. If it goes, the entire tent folds. That’s why war is coming, because a threat to the USD reserve status is, in effect, a declaration of war. The exorbitant privilege forces others to support their very tools of oppression ie the war machine, by making them supply the natural resources for mere tokens of wealth as represented by little green slips of paper.

      You’d be lying if you declared you wouldn’t want a piece of that action, morals be damned. Russia & China want it now – badly – and so the US must defend itself at all costs. If we lose this fight, then the whole thing rolls over.”

      IMO, that’s why war is inevitable and one of the reasons the US got involved in Ukraine. It wants to get NATO closer to Russia and China. It’s another reason why the US is deliberately destabilizing and causing trouble in parts of the world that it views as a threat to the world reserve currency. It sees both Russia and China as an immediate threat to the USD. As Paul Craig Roberts has stated that only Russia, China and Iran stand in the way of total world domination.

      The BRICS are getting together and fighting back economically hoping both the dollar and US collapses. Eventually as the threat becomes greater the US will probably use military force to continue it’s world dominance. Also Dr. PCR has mentioned the Wolfowitz Doctrine that many of the so-called neocons live by. They want to be the last man standing.

      • B9K9 says:

        Yep, and every day, hundreds of millions of Americans, like myself, wake up to find the system still operating perfectly as the day before. Who in their right mind would want this fairy tale to end, to experience within their lifetime the ‘day after’? No one.

        I was fortunate to be in a position to retire ‘youngish’, so I have a chance to watch the world spin ’round down here by the beach. I can tell you firsthand there’s a veritable army of unemployed – students of course, who are living off their student loans, but also others my age who now have plenty of free time on their hands.

        Who knows how many are on unemployment, on supplemental disability, or receiving SNAP, WIC or other EBT benefits? And these are the core, white-bread, (previously) middle-class Americans. What about the inner-city denizens who never dare make their presence known in this area?

        This whole thing is operating on fumes. If Russia-China knock out even a chink in the petro-dollar, the downward spiral will be initiated. Once you know the stakes, then it’s quite easy to comprehend the nature of the retaliation.

        Paul can complain all he wants about evil Americans, but this show is only just getting stated. He correctly notes we’re the ones who dropped two A-bombs, yet the Tokyo fire bombing was even ‘more’ per-meditated (in terms of waiting for perfect weather conditions) and killed more civilians.

        What do you think the US of A will do to protect the USD reserve status?

        • Paul says:

          I suspect that Russia and China are serious about ending the USD reserve status:

          1. They are not buying US debt
          2. They are buying gold
          3. They met in 2008 to discuss ending the USD (China apparently declined)
          4. They have quite possibly signed a petro dollar deal not involving the USD

          So what can the US do? If China and Russia refuse to back down then the US can likely do little – because much of the world has apparently come to the conclusion that the US is spent — and now a paper tiger.

          They can rant and rave and threaten sanctions — but the emperor has lost the mandate from heaven — i.e. respect has been lost…

          So he can either fade away (Neil Young would no doubt advise this option) or he can behave like a petulant child to the end and if he can’t have the toy he will smash it.

          In keeping with wish for self preservation I’d hope he not smash the toy – that is probably an extinction event.

          • Rodster says:

            “So he can either fade away (Neil Young would no doubt advise this option) or he can behave like a petulant child to the end and if he can’t have the toy he will smash it.

            In keeping with wish for self preservation I’d hope he not smash the toy – that is probably an extinction event.”

            That is my concern as well. Look at all the disruption the West has caused in Iraq, Syria, Lybia and it now appears China as well as according to reports posted on Zero Hedge that a car bomb went off in Urumqi.

            http://www.zerohedge.com/news/2014-05-21/chinas-strike-first-anti-terrorist-policy-fails-again-explosion-hits-chinas-xinjiang

            • Paul says:

              One certainly has to wonder who is behind this…. the US has had no problems with siding with terrorists in Libya and Syria — their allies include Al Nusra and Al Qaeda http://www.globalresearch.ca/more-evidence-u-s-funds-al-qaeda-terrorists-in-syria/5376522

              Keep in mind when reading this that the US runs the Saudis — and recall two major terrorist incidents in Russia before the Olympics:

              As-Safir said Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord. “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us,” he allegedly said. Prince Bandar went on to say that Chechens operating in Syria were a pressure tool that could be switched on an off. “These groups do not scare us. We use them in the face of the Syrian regime but they will have no role in Syria’s political future.”

              http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10266957/Saudis-offer-Russia-secret-oil-deal-if-it-drops-Syria.html

              http://www.zerohedge.com/news/2013-08-27/meet-saudi-arabias-bandar-bin-sultan-puppetmaster-behind-syrian-war

              How amusing – the US spends 100s of billions to fight ‘the terrorists’ — and then they fund and arm them….

              The question I have is…. it would be very easy to disable the global economy if one were a terrorist with a bit of creativity — for instance –how difficult to set half of California on fire with a Bic lighter and a motorcycle — want to knock down some buildings? — get 5 guys to rend a lower floor then have them bring in small amounts of gasoline over a few weeks then ….woosh…

              Yet nope – we get the bumbling shoe bomber — and other minor incidents… and the big one —911… well that allowed the Deep State to take the cuffs off…. they got their iraq war — and freedoms were stripped from Americans

              Connect the dots — something is wrong with this picture — when I look at China the first that comes to mind here is is the Deep State trying to punish China by supporting terrorism — because China is teaming with Russia to end the USD.

      • I really don’t know. Wars have been a popular when things aren’t going well, for a very long time. It gives a chance to divert attention from problems at home and a chance to borrow more money. It is a way of employing young people. It also gives the possibility of getting war spoils.

        • Interguru says:

          Unfortunately ( for employing many young men ) we no longer have mass armies in wars. The last mass mobilization World War I/II type war I can think of is the Iran-Iraq war about 30 years ago.

      • Stilgar Wilcox says:

        “The petro-dollar is a core strategic asset. If it goes, the entire tent folds. That’s why war is coming, because a threat to the USD reserve status is, in effect, a declaration of war.”

        How do you fight a conventional war to secure continuation of the USD? There’s no war in the offing, just a quicker, deeper, faster slide for the US as the dollar loses more ground.

        • InAlaska says:

          I must agree. There is no war in the offing. At least not the big one. Both “sides” in this conflict realize that War is too dangerous now. It can’t be supported by any economy. Instead it will be the long emergency and a slow decline.

        • yt75 says:

          Personally I’m not sure if there is “no war” in the offing, not that it would change much in the end result (except maybe for a nuclear war), but regarding the Ukraine story, I’m quite convinced that at least for some people, the real objective is to topple Putin and put a “more comprehensive guy” in place.
          Together with the petro dollar, another strategic asset of the US is CENTCOM (united states central command, and especially the fifth fleet in Barhain), or in other words the securisation job for the middle east oil and oil routes (like Hormuz). Security job that potentially would also allow the US to cut China oil supply for instance.
          And in fact one could say this job is the financial backing of the petro dollar itself.
          But if a Russian/Chinese/Iran alliance was forming, the picture would be quite different.
          And Russia has just announced it will sell 8 nuclear power plants to Iran for instance :
          http://www.zerohedge.com/news/2014-05-22/hot-heels-its-china-breakthrough-russia-set-build-eight-nuclear-power-plants-iran

          We went from the bipolar world during the cold war, to a unipolar one that lasted up to now.
          However even if the US might not be able to keep this unipolar power role for much longer, seems to me it is still clearly the “official” policy or strategy, and in that sense it for sure will try to avoid the formation of a strong Russia/Chinese alliance, especially if you add Iran to that.

          A quite good summary of the “official policy” is the little table on page 2 of “Rebuilding America’s Defenses: Strategies, Forces, and Resources For a New Century” :

          http://iiscn.files.wordpress.com/2014/04/pnac.jpg

          The key question being : will there be a kind of “swan song” from the US part to enforce this policy, and especially the “deter rise of a new great power competitor” bit, which for the “US domestic policy” aspect would require most probably a shift towards an even more “police state”, or will there be a move towards a more “multipolar policy” without a major war in between …
          The result of a war in terms of “multipolar” in the end, could very well be something with hundreds or thousands of “pole” in the end (like used to be the case prior to the rise of nation states and “modern” empires, let’s say during the middle age, even though you add the “muslim” empire at that time, but didn’t last very long at all united, and also China maybe).
          The scenario with a progressive shift towards a more multipolar world without war (we could say we are already in it), I don’t envision it very well ..

      • Paul says:

        America is like a spoiled petulant child that’s had its way for decades — and taking away reserve currency is like taking a toy from a spoiled brat.

        The free ride looks to be over… the world has had enough and they see that America is weak and diseased… and they do not fear her any longer.

    • InAlaska says:

      Hey B9K9,
      I’m neither in denial, purposefully ignorant, nor am I a troll. I simply refuse to lap up every supposition and conspiratorial fantasy that anyone on this site can post with no supporting evidence. I much prefer Gail’s charts and graphs which are real data points in the real world that we an all agree on. I do, however, agree with you about the strategic need to support the petro-dollar, as it truly is a weapon and a shield that must be defended by us or else the whole tent folds. I also agree that TPTB are very much aware of what is happening on all fronts (from the Fed to Ukraine) and are treading the knife’s edge to keep it all together. The US is indeed the world’s modern hegemon, economic, scientifically, politically, morally and militarily. America is no more or less evil and deserving of hate than was the British Empire or the Roman Republic. You can love it (as I do) or hate it (as Paul does) but without the US the world would long ago have succumbed to endless war and a tyrannical right or left-wing world dictatorship. Instead we’ve had 60+ years of relative peace, prosperity and the flowering of liberal democratic ideals. And yes, black deeds have been done in the dark places of the world to defend it. I also believe that nearly every regular poster on this site is more “awake” and far-seeing than the 99%, including TPTB, the BAU-MSM and the Deep State ghosts. Its been a wonderful, oil-empowered ride and now its over.

      • xabier says:

        InAlaska

        Wholeheartedly concur: I often think that people in Europe do not quite realise how grateful they should be that they didn’t fall under hard-line Communist control in the 1940’s (or late 1960’s!) when that ideology seemed so promising and had a lot of fanatical and ruthless believers willing and able to take advantage of the chaos caused by the war. It was very much touch and go in the immediate post-war period in many parts of Europe.

        • InAlaska says:

          Yes. Things could have gone very differently for Europe. But it worked out in the end because there was strong leadership and unity of purpose. Something we should all remember in the coming crunch.

          • Paul says:

            I would suggest that America should be grateful to Europe for standing against the Nazi’s from the beginning — while America sat on its hands and did nothing.

            The Europeans fought this tyranny tremendously weakening the Nazi War machine (Russia alone sacrificed over 20 million)

            Now imagine if the Europeans would have sat on their hands like the US did and allowed the Nazi’s to overrun them (see Vichy France).

            Guess who the Nazi’s would have had next in their sites?

            How convenient that the US stood on the sidelines and allowed everyone else to fight the battle – then stepped in late in the game to help defeat Nazi Germany.

            And then they systematically dismantled European colonial empires — and proceeded to take over the world.

            Obviously a brilliant strategy — but saviour of the world? Pure Pravda…

            Of course you won’t find that version in your US history books. I wonder if Homeland Security is pushing me up ‘the list’ for posting this ‘travesty’? :)

            • xabier says:

              The US certainly played its hand well after WW2 and without a doubt sought the termination of the bulk of the British Empire soon after, and was also very happy to see the other smaller empires crumble bit by bit.

              War alliances always fall apart very quickly though: by early 1919 the British and French could barely talk to one another at the top level, which I always found astonishing given that Britain and the Commonwealth helped saved to save France (not disparaging the immense bravery and terrible sacrifices of the French people).

              What’s the Italian saying: ‘Treat today’s friend as though they might be tomorrow’s ally, and vice versa’? ! US relations with ‘Islamic extremists’ over the last few decades is a perfect illustration of that.

            • Paul says:

              yes that is truly incredible is it not — on one hand the US unveils a 911 museum — and on the other they team up with Al Qaeda and Al Nusra in Syria to attack Assad….

              I used to be on the fence about 911 — but when I see the above — and when I was made aware of Operation Northwoods (a plan signed by the joint chiefs to terrorize Americans and blame the Cubans)

              http://abcnews.go.com/US/story?id=92662&page=1&singlePage=true

              – for those who think this is a conspiracy theory (i.e. a secret plan made by a few people) — it is – the difference with this from others is that it is documented so no longer secret http://www2.gwu.edu/~nsarchiv/news/20010430/northwoods.pdf (I have a friend whose brother is senior pentagon and he admits it is true…)

              Is it not amazing — the only MSM source I could find for that was ABC News — no NYT – no WSJ – no Washington Post…. a rather major story no???? This was only recently released…

              So there you have it — if JFK signs this you get your 911 decades earlier….

              As this demonstrates the Deep State sees Americans as nothing more than chattel — a slight annoyance that sometimes gets in the way…

              And we can see even a president cannot stand up to them — JFK did – and guess what – he was a dead man within 6 months. These guys would off their own mothers if they admonished them!

              They are completely amoral – they are psychopaths – monsters.

              I really do not understand the chest thumping USA USA stuff…. why not just say ‘let’s go devil let’s go…’

              To the objective observer this makes about as much sense as a fanatic chanting Allah Akbar as he pulls the rip cord on the bomb.

              As has been said earlier — this will fall on deaf ears…. decades of indoctrination cannot be punctured easily… For every Stockman and Roberts there are a million who will never see beyond the matrix.

            • Connorhus says:

              Ahmmm. Germany Invaded Russia before Pearl Harbor. Until then the Russians were happy to sit back (On their Hands) and let Germany have it’s way, especially if they got to round up Poles in the Forest. The German’s left Europe little choice but to fight and even if Germany had not invaded Russia they would have never had the men or resources to invade N. America. Eventually Allied Europe would have beaten Germany back but they would more than likely still be at it today if the US hadn’t gotten involved up front. Germany needed the Russian oil fields that soon in the game so when that happened it was a done deal.

              Also 1939 to 1941 is two years. I hardly call that late for a war that went on for six years, why that’s almost still in the first quarter and we had already been shipping tons of material before that.

              As for your last claim with the exception of one medium sized battle in N. Africa and the air battle over Britain all the US missed in Europe was the great run to channel and mass evacuation. If you want to count the Eastern front well like any Russian invader weather defeated the Germans there more than anything else.

              Europe owes the US about 30 years give or take because that’s about how long it would have taken them to get rid of Nazi Germany if the US hadn’t gotten involved.

              I think Europe has paid that debt, but now let’s talk about the cost of keeping them defended since 1945 and allowing the Western European Nations to spend that money on other things because the US took care of the military spending.

            • Paul says:

              Europe owes the US absolutely nothing.

              Europe stood against the Axis powers — if they had not and were simply overrun — then the US would have been next in line — who would have won is moot.

              The fact of the matter is the Europeans – and the Australians and the Canadians and others – who stood against Germany did just as much as the US in stopping the march of fascism – they battered and weakened the German war machine.

              Let’s think of it this way — when I played hockey sometimes I’d get in fights — so let’s say I taunt your team looking for a battle — I really want you because I am confident I can beat you — but one of your team mates steps up first and we go….

              Although I am winning we are both landing blows… and we are both hurting and starting to tire…. (in a hockey fight the first few seconds are the most exhausting — I suspect the initial two years of a war are similarly depleting…)

              Then you charge in — fresh — and arguably as good a fighter as either of us — and the two of you are now going at me — and you knock me out…

              Does your team mate buy the beers after the game — or do you?

            • Don Stewart says:

              Dear Connorhus and All
              One of the things we tend to forget about WWI and WWII is the extent to which they were wars between empires. When Churchill gave his ‘we will fight them on the beaches’ speech, he referred to saving the Empire. I saw an Australian movie about the time of WWI a decade or so ago. Sam Neill was telling his fellow townsmen that ‘we shouldn’t send our young men to the other side of the Earth to protect England’s Empire’. The ‘patriotic’ townspeople, of course, didn’t like it when he talked that way.

              Someone recently published maps of Africa and the Middle East showing the ebb and flow of empires across them. At the time of world wars, there was very little land in either place which might have been classified as ‘free and independent’.

              If one was sitting in the Midwest US in 1939, the war in Asia looked like a struggle between the British Empire, the Japanese Empire, and to a lesser extent the French and Dutch empires. The war in Europe and North Africa looked like a struggle between the German and Italian empires and the British and French empires. A lot of midwesterners were opposed to empires in the first place, and saw no reason the US should side with one or the other of these odious empires. Roosevelt, of course, was pro-British and got his Lend-Lease program through congress, but he violated laws to send more supplies to England than the law strictly permitted.

              To the Japanese in 1941, the war in the Pacific was also a struggle between the Japanese empire and the American empire. And so we got Pearl Harbor.

              High minded morality is something best superimposed on history, than derived from history. Even all the stuff about the ‘greatest generation’ doesn’t really stand up to scrutiny. Look at the plays and other stuff produced at the time and you find lots of criticism of the behavior of US soldiers. Hollywood, of course, was promptly mobilized to produce propaganda. After the war, the pro-British and French propaganda was enshrined, while the people who complained about the behavior of soldiers were forgotten.

              Now it is fashionable to blame the Baby Boomers for everything. But if we follow Occam’s Razor, we simply look at normal human behavior in the presence of a surplus and find that that is, indeed, the way people behaved during the Eisenhower years and the Kennedy years. By many measures, the US standard of living for working people reached a peak around 1968 or 1970. The Baby Boomers were growing up in a world of unparalleled richness. Their doting parents lavished the riches on them. My wife and I had our children in the late 60s and very early 70s…but both of us grew up poor. Our standards were different. All of my children have expressed gratitude that we didn’t spend as much money on them as other parents were spending. But I can assure you that my wife and I were not more intelligent…we just had a healthy fear of poverty and sinking back into it.

              Don Stewart

            • Connorhus says:

              Of course all the while you are using your team mates stick and gear…

            • Paul says:

              Actually that’s not the way it works… the key gear comes off… bare fist… against bare face… it really isn’t a lot of fun… http://www.youtube.com/watch?v=86JJb4qz7u8

      • CTG says:

        Elites are humans as well. There is a big difference between “knowing” and “fully understanding”. I can imagine myself being extremely rich. I would only bother whether I have the best toys compared to my follow elites. My sons/daughters would probably have a great time partying in New York while my while had a great time with all other dames in Switzerland comparing their diamonds. I have serious doubts I will sit down and discuss global warming, peak oil or even financial crisis and how to prepare for it. I know that oil may be finishing and financial crisis is a good time for me to buy up even more assets so that I will be richer next year.

        Ask around anyone what if the prices of petrol/gas goes way high and you will likely get an answer – I will drive less or even car pool. The question that they should be asking is “do I even have a job?” or “what will happen to the supply chain if it breaks down due to high oil prices?”

        I have much doubts that the elites really understand the implication. There are articles on the rich having a “fortress house” but what is the use if you don’t even know how to farm or dig a well (if there is still water left in the aquifier). You may emerge out from the fortress in one piece but will you survive once your stored food depletes? Let us not get to the 400+ active spent fuel pools that need active cooling or even the functional nuclear power plants…

        Elites may know but it is unlikely they will piece together with supply chain. they will know individually what the cause, effect and consequences are for peak oil, climate change, financial crisis, supply chain disruption but not in a holistic and comprehensive (macro) manner.

        • InAlaska says:

          CTG, I agree with you that there is a big difference between “knowing” and “fully understanding.” For example, how many of us on this site even “fully understand” the implications for the shark fin, or even the slow decline? How many of us fully understand watching friends and neighbors die, loss of connection to the entire world, isolation, freezing to death, the loss of a functioning biosphere, wholesale murder, cannibalism. I don’t blame our elites from turning aside from those thoughts and instead pondering about how to keep it going along for awhile longer. Even if it means lying to the public, spying on them and starting wars that can’t be won.

          • Paul says:

            I think most Iraqi’s know what this is like after enduring over a decade of these sorts of things — perhaps we can ask them?

        • xabier says:

          CTG

          I suspect most people with serious money are not planning for Armageddon, they are looking for that sacred thing – yield. And making due allowance for, at worst, a good bout of hyperinflation in the near future, and so diversifying their assets. Collapsing supply chains, running water being turned off? Like you, I doubt this crosses their minds for a moment. Not Bond villains, just human as you say.

          • CTG says:

            Well making more money for future is what most people have in mind. It is very likely that in the immediate future, when the financial crash happens (it will definately happen, just don’t know how soon it will come), it will bring down the entire civilization. At that point of time, money will be totally useless…..

            • Paul says:

              Indeed – I have friends who speak of shorting this and that …. my response is — you can short it and you will be right (– but you won’t collect.

              I stopped bothering with these games some time ago — i can’t imagine a bigger waste of time than playing in the markets…. might as well play Monopoly….

              I am primarily — farmer.

      • Paulo says:

        re: ” The US is indeed the world’s modern hegemon, economic, scientifically, politically, morally and militarily.”

        point by point: Economic…let’s see, in debt to eyeballs and few prospects now that manufacturing has been outsourced and companies can hide their wealth elsewhere. I could go on and on with this this one, including the fact that the economy is only limping along because of the reserve status.

        Scientifically? Oh yeah? Renting foreign spaceships for sattelite launches and space station resupply. Drug companies in collusion with politicians. I guess other countries don’t do research anymore? Where did insulin come from? Pennicillin?

        Politically? ha ha ha That is a very good one. Just ask the banksters. Just ask the super pacs. “We don’t need no stinkin fair vote, Cheech”.

        Morally? Ha ha What a span…Lady Gaga to Gerry Falwell and Pat Robertson. Homeless, drone attacks, assasinations, secret prisons, torture centres….whatever. War on drugs. But hey, as long as you have those 5,000 member evangelical jokes down in Texas with crowds holding their hands in the air…I guess that looks pretty moral.

        Military? ha ha. Big ships don’t win wars these days and haven’t doen so for a long time. No use fighting and leaving a country in total disarray? You think if US invades another country some folks living in the US won’t drive through the west chucking road flares into the woods some hot August day? Or worse? Those are the new wars. What are you going to do, have military roadblocks on every intestate as well as listening to all phone calls and reading all emails? Shoot, the NSA thingy should have gone under the political heading…maybe the moral one…. or,

        Get real. Sometimes you have to go along to get along. Or, play nice or no one will want to come to your party, Barry..Paulo

        • Paul says:

          They say that the true sign of genius is the ability to take both sides of an argument — and win.

          I take that further — anyone who can take both sides of this argument and win — is a Mega Genius.

          It truly is impossible to back up the comments about America supporting democracy, doing good, being moral etc etc… because the facts unfortunately get in the way… and the facts are indeed overwhelming…

          As I have said before — it truly amazes me that Americans (and some non-Americans) continue to believe America is wonderful — even after Edward Snowden put his life on the line exposing one of the most heinous crimes in history — what the NSA is doing is so far beyond even what Orwell envisioned in 1984…

          But nope — America is good — the NSA is only trying to protect us — root out the ‘terrerists’

          I find this beyond incredible. In fact this is so incredible it should be an episode on the Twilight Zone.

      • Interguru says:

        1n 1975 and 1985 I visited a friend who lived in Liberec Czechoslovakia. He, his wife and kids would have given their eyeteeth to be oppressed by NATO and the US.

        • Lizzy says:

          I have Polish friends, living in the UK. They cannot believe it when they hear the anti-US BS. They think you lot are bonkers.
          Me, I like America and Americans. Nowhere and no-one is perfect.

          • InAlaska says:

            Lizzy, Interguru,
            Exactly, and thank you for some support here. When given a choice, rational people choose American hegemony over anything else. Why? It works. Its generally benign. Its stable, predictable and generally guided by liberal idealism. Its easy to criticize the US because we’re the big guy in the white hat with the huge target on our back. But whose been pulling the heavy load for the last 80 years? Hang out in a communist regime for awhile to get an appreciation for what a real villain is like. Spend time in Asia or Africa where lots of people mean life is cheap. Experience the incompetence of South American banana republics for a taste of repression. Do all these before you start unleashing a torrent of invective about how big, bad and ugly are the Americans. Not suggesting its perfect, but what’s the alternative?

            • Paul says:

              Perhaps if they had been at the receiving end of this they might think differently?

              Turning a Wedding Into a Funeral: U.S. Drone Strike in Yemen Killed as Many as 12 Civilians
              http://www.democracynow.org/2014/2/21/turning_a_wedding_into_a_funeral

              And this is not an isolated incident — the US murders innocent people on a weekly basis with these illegal drone attacks.

              Btw – it is a war crime to attack a country like this that you are not at war with — Obama by rights should be hung.

              Perhaps when the US is knocked down justice will prevail and we’ll see him swing — along with the Deep State players who are ultimately responsible.

            • Paul says:

              Oh I forgot to mention…. for most people those people don’t count …. they are Muslims… and they are not white…

              For a lot of people on the planet that means they are vermin… it is acceptable to exterminate them…

              Funny world isn’t it?

              Actually they’ve got it almost right — they just forgot to include themselves as vermin. The most destructive vermin on the planet at that — worse than the filthiest sewer rat — lower then the grimiest cockroach…

      • Or close to over.

    • Paul says:

      Oh my…. where to begin?

      Perhaps you best sit down before you read this … got any rattle snake venom in the fridge? Might want to get a syringe ready….

      Why do I hate America? Well it ain’t envy that’s for sure!!!

      Let me count the reasons…. well … that would take too long … so let’s do a Letterman Top 10:

      1. Epic Hypocrisy
      2. Paris Hilton
      3. It’s the epicentre of most of what is wrong with the world — including rampant materialism, bullying, the me generation
      4. Droning of innocent people – droning of anyone that you are not at war with
      5. Torture http://en.wikipedia.org/wiki/Abu_Ghraib_torture_and_prisoner_abuse
      6. Mass murder of children http://www.youtube.com/watch?v=R0WDCYcUJ4o Mass Murder of Iraqis over a lie — Genocide of the native tribes of the Americas (I am having trouble staying with 10 so I will combine these) — mass murder of Vietnamese etc etc etc….
      7. Support of dictators http://en.wikipedia.org/wiki/United_States_support_of_authoritarian_regimes
      8. Complete lack of class http://www.youtube.com/watch?v=Zwij_3dIN2c
      9. Support of the monstrosity that is Israel
      10. GMO food – fast food

      I hate America for the same reasons most of the world hates America.

      And I would have hated Britain just as much if I were born 100 years earlier — just as I would absolutely despise my country Canada — if it became the world power and behaved as the US does.

      “Likewise, are we Americans supposed to feel guilty that our government acts in ways that benefit all citizens, even though they violate the human rights of everyone else? Why do you think so many Americans still patriotically support their country?”

      Yes you are bloody well right you should feel guilty. I would be ASHAMED of my country if they were to do the things that America has done. You call yourself the ‘bright shining light of the world’ Give me a break.

      Refer to ‘epic hypocrisy’ above. Refer to ‘toture – support of dictators – illegal wars – drones – genocide – mass murder’ above

      There may be nothing you can do about your countries vile policies but at least you can recognize they are evil and unfair (btw – are you a Christian? If so see ‘epic hypocrisy’ above)

      I went to Cuba recently and a friend who is pro-American said to me surely you would choose America over Cuba if you had to live in a place.

      I responded with absolutely not — because if I lived in America I would have to constantly be living with the guilt of knowing that I am living prosperously (assuming I was not one of the lucky 50 million on food stamps…) on the backs of people my country is oppressing and stealing from around the world.

      Heck I don’t even live in America but I of course benefit from being on the right side of the line — and I still feel pretty badly about the fact that I benefit from being fortune to be born in an anglo country that is aligned with the biggest gangster state on the planet (kinda like being tony soprano’s wife eh)

      Now if you – or anyone else is ok with the fact that you get to ride in your SUV and live in your mega mansion with 8 mega tee vees — and meanwhile someone’s daughter is forced to whore themselves to some fat old bald western tourist so their siblings can eat — because America has installed a SOB who robs his country blind — then congratulations — you win a spot on the board of the Deep State…

      I suppose when it comes right down to it — the US is the current of hate target — but let’s be frank – my hatred for the US is really represents a hatred for the human species — we are truly a vile lot — we murder for enjoyment – we enslave each other — we rape — we commit genocide – we drop atomic bombs — we intentionally starve people — do you need me to go on?

      WE are Darth Vader – we are the invaders who suck planets dry on Star Trek – we are the bad guys depicted in the movies (I don’t care for much out of Hollywood but Avatar was interesting as for once we were portrayed correctly – however most people are just to thick to get it)

      My mind says the extinction of humans is a good thing — my DNA says I need to try to survive.

      “Why do most Americans feel patriotic?” I dunno — they watch too much CNN? FOX? Maybe because they were taught from the day they were born that America stands for good and forced to sing God Bless America over and over again (and they continue to believe all that nonsense in spite of the fact that America’s behaviour is consistently evil) Some of course are just plain ignorant or stupid and will believe anything they are told if you repeat it enough times (see WMD)

      Standing by in case you might have further questions!

      • Rodster says:

        While i’m not going to dispute any of the above. If you look deep into the dealings and operations of most countries you could generate just as big a list. China in their own right has bigger problems than the West. If I was living there I could come up with a list as to why they were just as bad. The same goes for Russia and other places.

        I’m not overly religious but my friends are. There’s a Bible verse or two on the subject which in essence says that “Man is bringing man to his own ruin” and “not to put your trust in nobles”. Throughout history man has had a sketchy past which shows it has issues in governing because of lust for greed and power.

        So while I agree with your assessment the US is not alone.

        • Paul says:

          Indeed nobody has clean hands — and the US is only the worst of the bunch because it can be…

          But I don’t think that means we should condone such behaviour from the US – or any aggressive nation — just because it might benefit some of us — the tables can be turned…

          If nobody stood against tyranny then we’d still be committing genocide.

          Don’t think for a minute if this was 1850 that the Palestinians would be wiped off the face of the planet by Israel. They are brutal but they are forced by world opinion to exercise at least some restraint.

      • Paulo says:

        Well said, Paul. Wasting your words, though.

        Paulo…(the other Paul from Canada)

      • edpell says:

        Paul, I thought you were Canadian. Canadians are polite to a fault. /scarc on
        Paris Hilton! You really do hate our freedom. Well you maple leaf toting kanuk — Milly Cyrus, Madonna (or is she Israeli), Lady Gaga (or is she English). /scrac off

    • Paul says:

      Just re-reading this comment again:

      “It’s because we don’t care; or, in other words, sucks to be you.”

      I take everything back from my earlier post — the above comment encapsulates everything I despise about America.

      You’ll ride around in houses on wheels – you’ll build mcmansions — you’ll cram 241 pizza down your fat gullets — and screw everyone else — after all it is ‘all about me’ ain’t it — murder, torture, pillage — it don’t matter – ‘as long as I get mine’

      The irony is that — collapse of the world aside — Americans are finding out that it sucks to be them too – I really do hope that we can hang on a little longer — because I’d really love to see America thrown under the bus by China and Russia before the real SHTF….

      In case you weren’t aware the Deep State that runs the show cares nothing for your or any American (they’d sell their mother if the ROI was reasonable) – they are more than happy to screw you as they are to screw an Egyptian, a Panamanian, an Iraqi…

      They are gleefully destroying the middle class because that means a bigger dividend at the end of the year

      And guess what — when Americans awake from their Pravda-induced state and realize ‘hey wait a minute here…. it’s ok to do that stuff to other people — but you can’t do it to your own people — we all sang God Bless America together — we ate apple pie together — you wouldn’t screw me over too – would you?’

      Well by then it will be too late — the NSA owns you — and if you try to fight back well sorry mate…. this is what awaits you:

      http://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/

      Enjoy living large while it lasts.

      One of the reasons everyone should fight against injustice in the world is because if you don’t then you may be the victim of it yourself some day. As they say – what comes around goes around – otherwise known as karma

      • InAlaska says:

        Remember Paul, just because you live in Bali doesn’t mean you don’t benefit from being a westerner. “Out, out damn spot!” You stand on the shoulders of those who came before you. Living in glass houses is a dangerous business. Also, this is a blog site about resource constraints not an anti-America, 1st-world bashing party. Whose the troll?

        • Paul says:

          Yes – and I addressed that in my previous post — I truly do struggle with the fact that my comfortable life has come on the back of the suffering of others

          There is little I can do about that (I do support a couple of very good charities in asia – but let’s not kid myself — that is not much of an ROI for those we have trodden on) but I will most definitely not take a position of smugness thinking too bad for you that we bash your face in and take what we please….

          Seriously – people teach their kids that this is alright?

          Reminds me of that book American Psycho — remember the old mother — hard, cold, venomous, calculating … all about the money … not an ounce of empathy in the withered hag — and look at what that environment spawned https://www.goodreads.com/book/show/28676.American_Psycho

      • yt75 says:

        Paul,
        About Canada, don’t forget that it is a major power in terms of mining industry corporations, and even if it might be playing more “behind the scene” it apparently is also very active in various “world matters”.
        Also had this image with respect to Canada and stumbled upon below conference (in French) some days ago (or weeks) :

        With Patrick Mbeko (who is also Canadian, from Congolese origin) who wrote below book :
        http://pmbeko.blogspot.fr/
        I think he cites Canada having 50 or 70% of the mining industry (for minerals, forgot exact numbers), and his thesis is that Canada plays a major role in the central Africa conflicts.

        • Paul says:

          Oh come on man — you can’t say that! Moderator!!!! Oh moderator??? Gail – where are you – can you remove this — I am very offended by someone making true statements about Canada

          (shift into the matrix)…. Canada is a beacon of kindness in the world — I don’t care if you post a hundred links to articles detailing Canadian mining companies misbehaviour around the world — I don’t care if they ordered the starvation of half a million babies…

          I still believe Canada is good and kind – everyone loves Canada — and our hockey teams always win – sometimes we ship grain to starving people — and we fought in WW2 saving those pathetic Europeans who now owe us big time — I don’t know why I didn’t get free champagne on my recent trip to france when they saw my Canadian lapel flag…

          Oh Canada — we stand on guard for thee!!!!

          You know what — I honestly can’t remember what comes after that heheheh…. I guess the indoctrination was not very effective…

          You see I actually have no problem with this — I think this is abhorrent…

          Now is it as bad as what the US does? Of course not… but still — I find this behaviour extremely distasteful and I make no excuses for it…

          And if I lived in Canada I almost certainly would be active in opposing this vile stuff.

          http://www.nytimes.com/2013/04/01/opinion/the-tar-sands-disaster.html

          http://www.huffingtonpost.ca/2013/10/18/genocide-first-nations-aboriginals-canada-un_n_4123112.html

          • edpell says:

            Paul, Paul, Paul surely the only ugly thing in Canada is the US embassy in Ottawa. No one litters and everyone is polite. I do not know what alternate reality you are talking about. God save the Queen.

      • messtime says:

        I agree with you Paul. One thing i learned after returning back to the states having finished my military service in Vietnam and reflecting back on the experience, i realized it is important for individuals as well as nations “To Be Decent” and i do not think the US is decent based on my experience and observation. The US is real bad in my opinion and actually has been real bad for many years. If people do not try to improve and maintain good values & morals and such, this is what you get – a complete mess in my opinion. But, you are not the only one who realizes that the US is dead in the water, there’s a lot of other people too who realize it’s a real bad serious situation. It is never going to get better, only worse i think.

        • Paul says:

          i think there is a proverb that applies to this situation — something about reaping and sowing…

  7. Rodster says:

    “This whole thing is operating on fumes.”….”What do you think the US of A will do to protect the USD reserve status?”

    Many believe that a reset is coming and probably is and that China will rise from the ashes with the YUAN world reserve currency backed by gold. I can’t recall a global economic system so built on fraud and lies like we have today. Every country is cooking their books and debasin their currency.

    No time in human history has mankind had weapons we know about and those that are still secret that can wipe all life form off this planet. I’m now in my mid 50’s and remember a prosperous America built on principals of hard work. I feel bad for today’s youth because back when I was in High School I learned a free trade in electronics. I’ve worked for major computer companies in the 80’s. Today I live modestly, divorced and self employed. I see dark days ahead for our youth when their lives have been built on deceit and lies by their govt and media. The good jobs we had are offshore as Ross Perot said would happen. “That giant sucking sound”.

    • Dave Ranning says:

      China is not even remotely survivable.
      The sky was green on my brothers last visit, with the Sun barely visible.
      There are large parts of the country with no flowers, as the pollinators are extinct.
      They are merely the last great industrial country, a mating dinosaur.

      • Rodster says:

        I read several articles where it says that 60% of China’s water is not fit for human consumption. It all boils down to resources and what’s left for humans to survive going forward. But yeah China has major ecological problems and now the US is facing similar issues with fracking.

        • You are right that China has real pollution problems. We in the West helped push our problems over on them.

          Fracking may be a problem, but we are still a long ways away from being like China.

        • xabier says:

          I believe that in consequence of the pollution, contaminated food and water, poison from waste incineration, people in China are dying of things in their 40’s and early 50’s which normally afflict us in our 60’s and 70’s. I can’t see that a portfolio of empty apartments is much compensation….. The enormity of the Chinese tragedy will, I suspect, pass comprehension.

          And yet one still hears the globalist mantra: ‘Europe suffered and polluted itself in order to industrialise and get rich, and then cleaned it up afterwards, the Chinese are jsut at that stage of development. ‘ This is on a par with the famous ‘ inevitable substitution’ argument on energy issues. All’s well that ends well -except it can’t.

          From reports that come out, a lot of ordinary Chinese are protesting quite violently about environmental matters, but they won’t be able to stop it. Won’t it be like someone who’s spent their life abusing their body trying to clean up when they get a cancer diagnosis?

          • InAlaska says:

            xabier, you are right. China is at about the stage that the US and Europe were in about 1960. Rapidly industrializing and just now coming to grips with their own “Love Canal” scenarios. They have yet to produce their own Rachel Carlson and “Silent Spring.” They may get there yet, if there’s still time. Unfortunately, for all of us, there may not be that much time left. We are finding mercury and other heavy metals here in our freshwater lakes, in the most isolated parts of Alaska with isotopic signatures out of Chinese coal fired electrical plants. You can clean up one place on the earth, but it shows up somewhere else anyway.

            • xabier says:

              InAlaska

              Sad news about those lakes.

            • BC says:

              InAlaska, actually, in real GDP per capita terms and demographically, China is where the US was prior to the Great Depression. However, China’s fixed investment and private (?) debt to GDP is much larger than that of the US in the 1920s, 2000s to date, and Japan in the 1980s-90s to date.

              I stopped going to China for business in 2005. The air pollution was/is akin to Britain and the US in the 19th century. The situation is dystopian and intolerable.

              When China’s debt bubble finally bursts, which it appears is happening, China will be a financial and economic black hole for Asia and the world, probably resulting in the country being thrust back a generation when the dust settles.

              I fully expect a similar situation that has occurred about every 60 years or so since the late 18th century in China: economic collapse, social unrest, xenophobia, expelling westerners, and turning inward by the elites to focus on domestic stability. I won’t be surprised to see the new generation of PLA generals in Beijing reassert influence and power in the years ahead.

            • InAlaska says:

              BC, I agree with you and for the very reasons that you point out, is also why China will never be trusted to manage the world’s reserve currency. The reason it worked for the US is because America was peaceful, stable, democratic, prosperous, had an open economy, encouraged liberalism (including acceptance of foreigners). You just don’t see that out of Russia or China. I’m not worried about this secret deal between Rus and Sino. They can sell petroleum to each other and pay for it in gold all they want to, but its not going to shake down the USD as the reserve currency anytime soon. As soon as things start to go sour over there, you are going to see a massive flight to the US dollar. People go with what they know.

            • Paul says:

              And I am sure the British were saying the same thing just before they lost global reserve currency status and went from global leader to relative insignificance

              The US is OVER. Just waiting for the fat lady to sing.

              And that is why China and Russia are almost certainly positioning to ditch the USD.

              The talk is of a basket of currencies + gold replacing the USD — that makes a whole lot of sense to me. And I am sure it will make sense to most if not all nations (except the US of course)

              Why would anyone allow a failing state to continue to have a free ride? Why would you NOT trade in the currency of your choice?

              One of the main reasons the USD has remained the reserve currency is because the US holds a stick – you mess with that – you are DEAD. Ask Saddam and Gaddafi – two guys who apparently were about to trade oil in Euros…. Uncle Sam don’t like that…

              Of course China and Russia are different than Libya and Iraq — they have large nuclear arsenals — they cannot be bludgeoned into complying — if they decide the USD is done i.e. that there are no longer any advantages to using it — then there is not much the US can do — other than threaten pointless sanctions — unleash their terrorist minions — or start a nuclear war.

              As for peaceful nation – how many people were killed and wounded in the Civil War? How many guns are on the streets in America — how many of them are assault rifles? How many bullets as Homeland Security purchased? http://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/

              The US is a potential powder keg… many suggest it will be the next Balkans when the SHTF…. Not hard to imagine that — there is a lot of hatred in the US (http://www.huffingtonpost.com/2013/01/16/murders-shootings-and-gun-sales-per-day_n_2488664.html) — and of course the south still festers…

            • Rodster says:

              The biggest problems and concerns I have with the proposed basket currency backed by Gold are this. First you will probably be looking at an IMF SDR. Anything the IMF has done has made Nations poorer and the people miserable and intolerable conditions. Greece comes to mind when the IMF controls your economy.

              The IMF have recently shown their true colors by identifying themselves as warmongers. They told the US puppet elected Govt in Ukraine to do what they had to do to control the Pro-Russian forces or NO bailout money. In other words kill them or no money. Banksters and the Elite which includes The BIS and IMF have financed and in some cases encouraged wars to line their pockets.

              Christine LeGarde has called for a Global Economic Reset at a World Bank conference and it was posted on Youtube. Again this benefits the Elite as it allows them to consume more Power and Control over the World’s Economies. When you read their cryptic messages and see their intent in how they go about their business.

              Their view of the world is like the Movie “The Hunger Games”.

              Lastly, with regards to a gold backed currency. I could be wrong but every worlds reserve currency at one point was backed by Gold. At some point the currency was uncoupled from Gold. Why? It was necessary to fuel excessive debt levels. Richard Nixon had to do it because the French were requesting their debt be repaid in Gold and the US would have given them the last ounce. In order to pay for Vietnam and the Great Society, their wasn’t enough Gold to pay for all of that. So the USD went from being Gold backed to Fiat money in a short period of time.

              I suspect over time the new Gold backed Global Currency will suffer the same fate. As Jim Rodgers said in an interview. “A Gold backed currency will for for awhile but it too will fail BECAUSE POLITICIANS will ALWAYS find a way to CHEAT the SYSTEM”.

            • Paul says:

              My take is that unless these games are related to another magic trick to keep the hamster running all this talk of the death of the USD is not much more than the wet dreams of very serious, powerful elderly men — or shall we say much ado about nothing.

              We are on the brink — I cannot see how any of this can be realized in the time remaining — and I suspect busting the USD would be suicidal what with the fragility of things.

              Here is a superb presentation by Jon Pilger:

              War by other means – IMF and World Bank are weapons of war

          • The Chinese pollution is indeed worrisome. It is hard to imagine how awful it might be to have to live with the pollution problem–and not have a good solution in sight.

      • InAlaska says:

        Yes, indeed. They arrived at the party too late. Now they’re all geared up for an industrial civilization that no longer exists. What a mal-investment. Couldn’t have happened to a nicer regime.

      • Paul says:

        First time I want to Beijing about 10 years ago – driving in from the airport in the evening and I thought it was snowing — one could barely make out the street lights when looking out the car window.

        I then realized it was the smog — it was so thick you could barely see across the street…

        I lived for about a year in Shanghai — the pollution was generally brutal at least half the days of the year.

        China is indeed one massive festering mess. One of the last places I would want to be when the SHTF — America is another — all those guns will definitely be put to use…

        • In the state of Georgia, where I live, there is a new law that says that as of July 1, 2014, it is OK for people to bring guns almost anywhere–universities, schools, churches, bars (?), as long as the establishment doesn’t expressly prohibit them. If they bring guns where they are prohibited, (as I understand it), there is a $100 fine.

          I expect a lot of places are quickly putting in rules prohibiting guns. But even so, this system is just plain crazy. A $100 fine is not enough.

          • Coilin MacLochlainn says:

            Yes, a six-month stretch in the slammer would be a much better incentive. As things stand, people will soon be practicing their Clint Eastwood squints and twirling their revolvers as they barge through the batwing doors of their retro-Wild West local hostelries.

        • VPK says:

          I moved to North Carolina about seven years ago. I can honestly say that the “natives” are smart and know that soon the SWHF and have plenty of guns and AMMO to defend themselves.
          When I have folks coming up to me and lecturing me about peak oil and the Fed at work, you know it will hppen sooner than later.
          Good Luck everyone….a lot of bullets will be flying threw the air here in South.

    • InAlaska says:

      Rodster,
      You are right on all fronts. Sad, but true. The America we know disappeared sometime circa 1980s Reagan and was replaced by a sham. I look at my kids and I feel sorry that they didn’t get a taste of the power and the glory.

      • Paul says:

        Looking at America’s ‘exceptionalism’ objectively what I see is a large country blessed with a good climate and blessed with an incredible wealth of resources.

        America for instance had some of the biggest oil and gas reserves on the planet.

        Also timber, minerals, ag products etc…

        Let’s not confuse exceptionalism with good fortune.

        Interesting isn’t it that America’s slide started when its oil peaked… that really was the beginning of the end — and is a clear demonstration that America was only exceptional whilst the oil was pumped…

        Jimmy Carter was the only one brave enough to pass along the bad news…. and the petulant children didn’t like that very much of course

        As for Reagan — wasn’t he the front man who the Deep State used to announce that America’s power and glory would continue — that Americans should live large — and then proceeded to initiate the bankruptcy of the country deploying Voodoo Economics?

        David Stockman was Reagan’s budget director at the time — he was the man behind Voodoo Economics…. and he will be the first to state that is was all a sham…

        David Stockman bombshell: How my Republican Party destroyed the American economy.

        The “debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.”

        http://thinkprogress.org/climate/2010/08/01/206517/david-stockman-how-gop-destroyed-the-economy/

        As we can see – Stockman clearly did not sing God Bless America enough times — and now he’s broken free from the Pravda-induced matrix…

        Paul Craig Roberts is another who has stopped drinking the kool-aid

        I have the utmost respect for both of these men. Both of them benefited tremendously from American Empire — yet they are men of conscience – and they turned against the beast.

        Perhaps they concluded that the beast eats its own (when it has devoured the world first) — and decided to take a stand?

        • Rodster says:

          I am neither a critic nor an apologist for Reagan while growing up in the 80’s because Politicians will always be politicians as they have to cater to not only constituents but those who pull their purse strings.

          Dr. Roberts just did an audio interview and it appears he still thinks Reaganomics worked. It was the Republicans who took it a step further and applied deregulation to everything and just made everything a mess. Anyways, it’s worth a 30 min listen.

    • xabier says:

      Try Spain with a 60% youth unemployment rate in the South. At present it’s the still-intact pension system and black economy that keeps families afloat, just. While they listen to corrupt politicians known paid in brown envelopes telling them that Recovery has come……

  8. Very good post. Most economists still have not understood these links. In Australia, the new Liberal government puts the blame on the previous Labor government for having increased debt which is now supposed to be paid back by reducing government expenditure and imposing new levies.

    June 2009
    Australia able to avoid recession
    Stimulus moves
    “To help avoid the country falling in recession, the Australian central bank cut interest rates to a 45-year low of 3.25% in February.
    The government also introduced a number of multi-billion dollar stimulus packages, including increased infrastructure spending and cash handouts to most Australians since the end of last year to lift consumer spending.”
    http://news.bbc.co.uk/2/hi/8080446.stm

    And now:

    13/5/2014
    The 2014-15 Budget
    Joint Media Release
    with
    Senator the Hon. Mathias Cormann
    Minister for Finance

    “This Budget is part of the Abbott Government’s Economic Action Strategy that will build a strong, prosperous economy and a safe, secure Australia.

    It is a Budget that calls on every Australian to make a contribution now to build the workforce, economy and opportunities we need for the future.

    It creates a path back to surplus and slashes projections for debt, which means the money that would be wasted on interest payments can now help build the future.

    While the former Government left Australians with $123 billion of deficits and no path back to surplus, our budget repair efforts have meant that deficits in our first four years are now projected to be $60 billion, with a surplus of well over one per cent of GDP projected by 2024-25.

    Gross government debt is now forecast to be $389 billion in 2023-24, compared with the $667 billion left behind by the former Government. This reduction in projected debt of nearly $300 billion also assumes that we provide future tax relief to address bracket creep.
    http://jbh.ministers.treasury.gov.au/media-release/021-2014/

    The response is prompt:

    Perth students take to the street to protest budget cuts to education
    21/5/2014
    “Students have taken to the streets in Perth this afternoon as part of a national protest against plans to overhaul the education system which they say will make it accessible only to the elite.”
    http://www.abc.net.au/news/2014-05-21/perth-students-take-to-the-street-to-protest-budget-cuts/5468690

    • Raising taxes to fix the budget deficiencies is never popular. Once people have gotten used to deficit spending, they expect it forever.

      • InAlaska says:

        Its because the Baby Boomers, of whom nothing was ever asked, and for whom the entire world economy bent its back to support, learned as children to avoid pain at all costs and to seek instant gratification. In many ways, our current predicament is a direct result of that very influential generation of Americans. Spoiled to the core.

        • Joe Clarkson says:

          Oh good grief! The Boomer generation is no different from any other. The so-called Greatest Generation fought in WW2, but then, why did they not prevent it? And speaking of wars, don’t you consider fighting the Vietnam War as being something “that was asked”.

          Boomers are no more spoiled than their elders, who gobbled up the sweet-talk of Reagan’s “Morning in America” and thereby started the deficit spending binge in earnest. Every generation has its foibles, but none is more or less guilty than any other for the predicament we’re in.

          • xabier says:

            Joe

            I agree. Every generation over the centuries has simply used the resources which came to hand without much reflection. How are ‘Boomers any different?

            The disparagement of ‘Boomers’ has been deliberately propagated in the MSM by governments aware of the constraints which are now becoming apparent and that the future means more taxes and much less in return for them, and by the ultra-wealthy who fear being taxed to pay for pensions, etc. It’s good cover for the bankers and their manipulation of property prices – the chief cause of complaint by the young at the moment in Britain.

            It’s being done to legitimise current and future cuts. ‘The Boomers froze you out of a home!’ The old demagogic political principle: Give a dog a bad name, and you can hang him’. ‘Bourgeois saboteur'; ‘Capitalist Wrecker'; ‘Selfish Baby Boomer’. This is name-calling, not intelligent democratic dialogue (not that I’ve ever known that to exist but one might hope….)

            The young who now follow this lead in complaining about ‘Boomers’ are on the whole no less materialistic or thoughtless, just disappointed to get to the table and find the bowls half-empty. And they are being directed as to whom to blame. Once more, I feel that I must have slept a long time only to awake in the Soviet Union or Nazi Germany. Just substitute ‘Jews’ for ‘Boomers’ in all the statements made about them and the nastiness of the concept becomes very evident.

          • Paul says:

            Agree. The best of Ronnie Reagan http://www.youtube.com/watch?v=vaTedoRjANU (love the musak)

            Personally I feel this is more fitting – see the Deep State in operation — that guy whispering into his ear was the former head of a very large investment bank — a ‘player’ — and his task was to mind the idiot http://www.youtube.com/watch?v=NR3RqMMIwD4

          • InAlaska says:

            How do you prevent WWII when you’re 18-25 years old?

            • Paul says:

              How do you prevent any war if you are 18-25?

              Very very simple. Refuse to fight it (in enough numbers).

              Old men don’t fight. Nor generally do women.

        • Lizzy says:

          InAlaska, please. “for whom the entire world economy bent its back to support”? I’m sorry but that seems too much, You know, when people anthropomorphise governments and countries, it’s bad enough, but the whole economy? The “entire world economy” ?

          Anyway, it seemed to me that businesses and people (and other economic entities) did their best to make as much money out of the boomers as possible. They weren’t being altruistic.

          • Paul says:

            Agree – blaming the baby boomers is a bit much.

            Blame is pointless — but for those who continue to believe the myth that it all went wrong after Ronald Reagan — these are the facts:

            1. Reagan was a serial tax raiser. As governor of California, Reagan “signed into law the largest tax increase in the history of any state up till then.” Meanwhile, state spending nearly doubled. As president, Reagan “raised taxes in seven of his eight years in office,” including four times in just two years. As former GOP Senator Alan Simpson, who called Reagan “a dear friend,” told NPR, “Ronald Reagan raised taxes 11 times in his administration — I was there.” “Reagan was never afraid to raise taxes,” said historian Douglas Brinkley, who edited Reagan’s memoir. Reagan the anti-tax zealot is “false mythology,” Brinkley said.

            2. Reagan nearly tripled the federal budget deficit. During the Reagan years, the debt increased to nearly $3 trillion, “roughly three times as much as the first 80 years of the century had done altogether.” Reagan enacted a major tax cut his first year in office and government revenue dropped off precipitously. Despite the conservative myth that tax cuts somehow increase revenue, the government went deeper into debt and Reagan had to raise taxes just a year after he enacted his tax cut. Despite ten more tax hikes on everything from gasoline to corporate income, Reagan was never able to get the deficit under control.

            3. Unemployment soared after Reagan’s 1981 tax cuts. Unemployment jumped to 10.8 percent after Reagan enacted his much-touted tax cut, and it took years for the rate to get back down to its previous level. Meanwhile, income inequality exploded. Despite the myth that Reagan presided over an era of unmatched economic boom for all Americans, Reagan disproportionately taxed the poor and middle class, but the economic growth of the 1980′s did little help them. “Since 1980, median household income has risen only 30 percent, adjusted for inflation, while average incomes at the top have tripled or quadrupled,” the New York Times’ David Leonhardt noted.

            4. Reagan grew the size of the federal government tremendously. Reagan promised “to move boldly, decisively, and quickly to control the runaway growth of federal spending,” but federal spending “ballooned” under Reagan. He bailed out Social Security in 1983 after attempting to privatize it, and set up a progressive taxation system to keep it funded into the future. He promised to cut government agencies like the Department of Energy and Education but ended up adding one of the largest — the Department of Veterans’ Affairs, which today has a budget of nearly $90 billion and close to 300,000 employees. He also hiked defense spending by over $100 billion a year to a level not seen since the height of the Vietnam war.

            http://thinkprogress.org/politics/2011/02/05/142288/reagan-centennial/

            No doubt if you spent a year blowing your savings, took a massive personal loan and maxxed out your credit cards — you could have a hell of a time — and 10 years down the road — after declaring bankruptcy and living rough — you’d look back on that year with such fond memories.

            So I fully understand why many romanticize about dumb old Ron — but make no mistake — it all didn’t go wrong after him — it was going wrong well before he took office…

            All he did was paper over the problems with debt and spending — and made speeches calling that prosperity.

          • InAlaska says:

            Sorry, I see it differently. It may not be their fault but the Boomers avoided fighting in Vietnam if at all possible. The Boomers are straining the health care system to the break point. The Boomers don’t want to pay taxes for anything. The Boomers are destroying the Social Security System. They want the good life, they got the good life, but the only way the got it was through globalizing the world economy and then sucking it dry. They should be called “The Luckiest Generation,” because boy did they luck out being born when they were. And, unlike previous generations, what have they given back?

            • I am afraid I am a boomer. We were a very lucky generation–we just didn’t recognize it at the time. We thought this luck would hold for everyone, and in fact the luck would become greater over time.

            • Ted says:

              yeah….I hate the boomers too….worst generation…all the possibilities but greed and gluttony are their calling cards…

            • Paul says:

              One way to think about this is that the BB did what they are supposed to do – consume. That is what the teevee told them to do — Edward Bernays worked out to pull the strings – see


              http://vimeo.com/67977038

              So the blame the BB misses the point — like Pavlov’s dog — humans can be manipulated — we are all to some extend more than others — we can see this in the US — where the media works overtime to convince people that US foreign policy is just and good — even though the facts absolutely do not support that.

              Yet look at how many people still believe the gov’t line — that is Bernay’s legacy — he came up with strategies that in essence, that could make people believe a circle is a square – that 1+1 = 3.

              And these strategies are POWERFUL — very few people are able to escape from the ‘matrix’ — they cannot step back and see it for what it is — they remain within in – mostly to their dying days.

              Even when faced with overwhelming evidence that conflicts with their views — they remain wedded to their views (see religion – god… there is not a shred of evidence to support the existence of god — yet people the world over believe — the supreme irony is they believe in many different gods… someone is wrong! – actually all are wrong… )

              Bernays tapped into these irrational behaviours learning to manipulate them. He applied them to war — he also applied them to consumer behaviour – at his height many Fortune 500 companies employed him as their ‘pr man’ – in fact he is the father of pr….

              Now to the bigger picture — even if the BB did not do what they were conditioned to do — they did not consume at the level they have – would that be a good thing? One would think yes — but if one looks more deeply at this reducing consumption would be disastrous…

              I used to wonder – what would happen if we simply stopped growing the population — couldn’t find anything on this — wasn’t even aware what this would even be called …. then I found this outstanding article…. http://ourfiniteworld.com/tag/steady-state-economy/

              We are very much like a cancer — like some out of control, destructive rogue cell that destroys the healthy living cells around us — and eventually the host — as with cancer if there is a way to stop it then the cancer withers and dies — as we would wither and die if we stopped growing (consuming) — keeping in mind advanced malignant cancers don’t – as far as I know — stop growing on their own — so I think blaming the BB generation is out of line — they did what needed to be done…

              And the current generation is more than outdoing the BB generation ….

              “The results surprised me,” he says. “Using United Nations projections of fertility, and projecting statistically through the lifespan of the mother’s line—some lineages being short-lived, others indefinitely long—an American child born today adds an average 10,407 tons of carbon dioxide to the carbon legacy of her mother. That’s almost six times more CO2 than the mother’s own lifetime emissions. Furthermore, the ecological costs of that child and her children far outweigh even the combined energy-saving choices from all a mother’s other good decisions, like buying a fuel-efficient car, recycling, using energy-saving appliances and lightbulbs. The carbon legacy of one American child and her offspring is 20 times greater than all those other sustainable maternal choices combined.” (See chart ["Little Bundle of Carbon"].)

              http://www.motherjones.com/environment/2010/05/population-growth-india-vatican

              I do wonder if when this crisis of the end of cheap oil strikes — if that might be akin to a massive dose of chemo and radiation — killing the cancer — and leaving the healthy cells to continue to live in balance with the host world?

          • xabier says:

            And we forget the ‘Boomers’ who’ve only ever had low-paid jobs, no property and can only look forward to some inadequate state pension and death in a squalid care home.

            Powerless people who believed what they were promised by politicians who are now back-tracking very rapidly (for good reason of course, while clutching their privileges tight).

            • Lizzy says:

              That is a very good point, Xabier.

            • InAlaska says:

              Remember, I’m talking about Boomers as a demographic, not as individuals. The entire cohort was lucky in their demographics, while the individual outcomes varied widely in terms of success.

      • Hartley Schultz says:

        Hello Gail,
        All this belt tightening here in Australia, is blamed on longevity, not resource constraints… too many of us are going to live for too long and take up too many resources along the way!.
        http://www.abc.net.au/news/2014-05-22/will-one-in-three-australian-babies-live-to-100/5420808
        Our treasurer assures us that when the pension age increases to 70, many of our troubles will be over.
        Kind regards
        H.

        • No one can face the idea that resource constraints might be here.

          Actuaries have long known that government pensions pretty much have to be funded on a “pay as you go” basis. For this to work, you need to keep the retirement age high enough that there are enough workers to support all of the retirees. If you have one-child families, you really need a high retirement age.

          • xabier says:

            Or with bigger families, but 25 to 60% of those children are unemployed – as in much of Europe now – or in ‘mini-jobs’ (such a nice expression for insecure, low-pay employment).

            Instead of addressing this issue rationally and with clarity, politicians are taking a ‘moral’ tone and blaming the ‘greed of boomers’. Or lowering the pension age in order to gain some short-term popularity.

            Even when addressing a straightforward matter which Gail can sum up in few words, they lie and tip-toe around the issue.

    • Paul says:

      The latest from Tony down under:

      Australia’s Prime Minister Tony Abbott is not having a good week.

      Battered in the polls and facing street protests after a first budget that seems to have been badly misjudged, he’s now been caught on video laughing at an angry and distressed voter on a radio phone-in show.

      The woman, who’s a grandmother, called in to ask the prime minister how she was expected to survive financially in the wake of tax increases and cuts to public services.
      She told him she worked on an adult sex phone line to try and make ends meet.
      At this point Mr Abbott can be seen winking at the ABC host, smirking and trying to suppress a laugh.

      He then appears to glance over at an adviser and quickly tries to adopt a more concerned expression.

      It doesn’t look great.

      http://www.bbc.com/news/world-asia-27498215

      No – it doesn’t look very good at all

    • CTG says:

      We are seeing the unraveling at speeds that is unprecedented. It is never a good idea to compare with the fall of Rome which took hundreds of years. From the year 1913 when Fed Reserve Act was established, it probably took slightly more than 100 years for modern humanity to collapse, basically under its own weight.

      Interguru’s lemma :
      1) They go on a lot longer than you think they can.
      2) They stop suddenly without warning. Even those who see it coming have no idea when.

      This is really like a bathtub with an unplugged drain. The toy furthest from the drainage hole will move slowly and it will go faster as it approaches the drain. It will go the fastest before it just disappears down the hole.

      The protests in Perth, Thailand’s coup, China’s bomb, etc are the signs that we are nearing the drainage hole and it will always, I repeat always go down with a “plop”. Am I surprised if there is an uprising in Brazil, India or Indonesia? Am I surprised that foreign funds decides to exit Thailand and it will be the same trigger as 1997 Asian Financial Crisis? This time round add in Vietnam where investments are reconsidered. Am I being pessimistic? Not really investment funds may have no choice but to pull our from Thailand as it may not be investment grade anymore and it will trigger a capital flight back home and along the way, it will cause a wake that will overturn all other boats.

      I am from Malaysia and we are all gathered at Gail’s fireplace for a chat. We have so many people from Alaska, France, Canada, etc and all of us, by fate or destiny are here to stay till the fire dies out. I sense there is change in the tone of the forum, from hope to dire to outright doomish now (since the blog started some years ago). This is not something that we want. I agree with Paul that it would be good if we can keep the hamster’s wheel running a while longer but as time draws out, important (but mostly negative events) are happening practically every day. Mind you, Ukraine issue just happened in February and count and see how many other serious events happened the last 3 months (Japan, China, Thailand, Vietnam, etc)

      This is the only site in the web that everyone will have a chance for a civilized discussion around Gail’s fireplace. To me it is a comforting place, a place where you can share what you have in mind without having people whacking you silly. To all, keep up the good work….

      • Paul says:

        Good points. I’ve been bouncing about the net and seeing another China bombing — in addition to the Thai coup earlier — lots of bombings in Nigeria this week — of course Iraq remains a bloodbath — and Libya is as expected descending into chaos….

        The central banks and governments are sticking a lot of fingers in a lot of holes in the dyke…. at some point the holes will overwhelm… Something is gonna happen (black swan) that they cannot control.

        A bit gut wrenching to read all of this — particularly knowing what is at stake.

        • Paul says:

          And I might add… yes … it is good of Gail to host us on here… there is not another blog that even remotely comes close.

          • InAlaska says:

            I agree with you (and Paul, whom I respect for his deep insights, even if I disagree with his politics) that this is a pretty special blog where we can share our thoughts and even agree to disagree sometimes.

            • CTG says:

              It is perfectly normal to have different viewpoints due to different culture, environment, thinking and outlook. Up till today, my family members still think about rising house prices and my wife wants to buy a retirement house that we will use in 20 years time. That is a disagreement and it is OK to have different point of views as she does not even see what I see.

              At least in this blog, the “right to disagree” does not explode to become outright animosity !

            • Paul says:

              If we all agreed on everything this would be no fun at all would it!

              I quite enjoy the banter — it keeps the knife sharp :)

            • Lizzy says:

              InAlaska, some of the vituperative comments can get a little too much, though. You know: describing countries and groups as “petulant children”; ranting about countries you don’t approve of; slagging off people you don’t agree with, like we know it all. We (the bloggers) are better and more clever and they are “stupid”. It could perhaps come across as self-righteous and arrogant. I don’t ever read Gail writing thus. It doesn’t hurt to be a little nice to each other.
              Signed,
              Saint Elizabeth

            • Paul says:

              As I have posted in the past if anyone needs to be moderated it is those who claim the US ‘is good and decent’

              I personally find that comment incredibly insensitive having witnessed first hand in many countries that I have visited what the ‘good and decent’ American government has done to the people.

              I’ve supported my position on this in great detail — if anyone cares to address the points I have made indicating specifically why vast numbers of people across the world would feel insulted by the above claim — feel free.

              But to ask my comments to be moderated — well that is precious.

              You can let rip at my country all you like – Tar Sands – treatment of natives — will I feel insulted – will I ask Gail to pull your comments down – of course not — I will join you in ripping into Canada when it is deserved. And if I disagree — I will debate the issue.

              Perhaps we can ask Google and Youtube to remove the links I have posted as well?

              There is only one person here who has a leg to stand on in terms of a logical position — and that is B9K9 — he/she admits the US is an SOB — and is ok with that for various reasons.

              I do not agree with the ethics of that — but I do respect the honesty and the absence of hypocrisy…

              For those who believe the US is a force for good — I have asked this before but all I get is ‘we hand out bags of rice from time to time’ or ‘I once met a person from ____ who said he loved the US’ — let’s cut into the meat here…

              I am seriously curious as to how you rationalize this http://www.youtube.com/watch?v=x4PgpbQfxgo with your view that America is fundamentally good (instead of a barrage of atrocities let’s just focus on one)

              Let’s be frank here — this means purposely starving children — even babies — to death.

              All good with that foreign policy initiative?

            • InAlaska says:

              Saint Lizzy,
              I’ve never referred to any country or group as “petulant children” so if that is aimed at me, it missed its mark. But I agree with you that we need to be kind to those who are still sleep walking toward the edge wherever possible. Compassion may be the only resource that we’ll soon have left.
              Paul,
              I think I’ll drop this line of dialogue with you because it is apparently like arguing religion. You’ve got yours and I’ve got mine and the twain shall not meet. Go ahead and hate-away, my friend. I’ll skip those posts, though.

      • Thanks for your comments. It is a difficult situation. China was pulling the world economy along, but not it is stumbling. QE was keeping the financial system steady, but now it seems to be reaching limits. Globalization is no longer the positive force it was. I am glad we can at least talk about these things.

  9. Just in from the Sydney Morning Herald in support of what Gail says in the above post:

    22/5/2014
    Fears wages slide will hit economy hard as inflation edges ahead

    Workers are going backwards after wage growth fell below inflation, plunging to its lowest in 17 years.
    Economists expect that the fall in real wages will flow through to hit the economy as already nervous households further slash spending.
    Shoppers were already preparing to tighten belts following the government’s ”tough” budget, which led to consumer confidence falling at its fastest rate since before the global financial crisis in 2008.
    Bureau of Statistics figures released on Wednesday show wages rose just 2.6 per cent in the past year. This is the weakest growth since records began in 1997, well behind the consumer price index, which rose 2.9 per cent.
    http://www.smh.com.au/federal-politics/political-news/fears-wages-slide-will-hit-economy-hard-as-inflation-edges-ahead-20140521-38p2w.html

    • edpell says:

      When people begin to car pool and share a single house between two families then it might be austerity. Right now it is just the foolish first world working class learning it is not special.

    • Paul says:

      Australia – like the BRICS – like Canada – like Germany — prospered up until now for one reason — and one reason only – China.

      China has printed 15 trillion dollars since 2009 and embarked on the most insane building binge in the history of the world:

      According to data from the US Geological Survey and China’s National Bureau of Statistics that was compiled by the Financial Times, in just two years (2011 and 2012), China produced more cement than the United States produced in the entire 20th century.

      I urge you to read the entire article — the malinvestment in China that is detailed here is monumental!!!

      http://davidstockmanscontracorner.com/chinas-fractures-widen-real-estate-bailouts-begin-in-six-cities/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday

      Amusingly I have been beating this drum since 2009 — anyone with half a brain could see that there is no way China could be growing sustainably when the rest of the world was in the gutter — heck I was even told by a china property analyst from JPM (one of the best and the brightest of course) that the housing boom was legit — nothing to worry about here right up until recently…

      I wonder how much he gets paid for such powerful insights!

      And now the binge is slowing — and the chest thumping from countries – including China – who thought they had the best systems – the smartest people — has stopped — well how about that – it turns out they weren’t ‘exceptional’ either….

      They road the coat tails of China for 6 years – and now that China is insolvent and slowing (hey – how many ghost cities can you build before it all goes to pieces…) so too are they…

      And they are joining us as we all sink into the primordial ooze…

      • As long as property values were going up, investing in property looked like a sure thing–just as it did in the US in the early 2000s. Once values start to fall, then there are many follow on effects. I wonder how many people are employed in the construction industry? It looks to be a huge number.

        • Paul says:

          The asset bubble in China is so much bigger that what crashed the US…

          Every time I hear that the housing market is losing steam I shudder…. if the punters head for the exits I suspect that would be one of many events that could initiate the collapse.

  10. Hickory says:

    So, we overshot the human population capacity of the planet by about 5 billion since WWII, empowered by the incredible energy of industrial scale fossil fuel.
    And now that fairy tale of exaggerated growth is coming to the end.
    Most of the action we are talking about is the details of the friction of that grinding halt,
    to followed by reversal. Tragic and painful massive reversal (understatement of the last 5000 years).
    How do we gracefully downsize? Which billion people will volunteer for a graceful exit? Which billion will fight it out? Which billion will starve? And those 3 billion likely won’t even be enough….
    There will come a time when euthanasia will sound pleasant, and the lines will be long where it is offered cheap, I’m thinking.
    Not being pessimistic, just real, it seems to me.

    • Paul says:

      Oh contraire — not nearly pessimistic enough…

      – what will happen to all the remaining trees when 7.2B people are cold and need to cook the dead rats they catch in their traps?

      – in Russia – according to the great journalist Ryszard Kapuściński in the 30’s cannibals were eating children because they were starving — now the entire world is about to resemble an Ethiopian death camp – but there will be no aid agencies to help

      – then there is the issue of nuclear plants and spent fuel ponds – many thousands of them – how to cool them when we are collapsed?

      – and perhaps the biggest problem (it’s a tossup – meltdowns for this…) – 98% of the world’s ag land is farmed using oil and gas based pesticides – the soil is DEAD without these inputs… and even if you could farm without these on this land — most people have not a clue — and it takes months to get the first crop (provided its not winter of course)

      I think 3 billion is far too conservative…. we have the makings here of an extinction event… if not that then I think that over 90% of the people will perish.

      Think about this (I address this to the entire community – no one specific):

      If the electricity went off right now — the petrol stations closed — and the grocery stores were emptied by end of business tomorrow — how long would you last?

      Could you plant a garden in your back yard and make it through to the first crop? Do you have a clean water source?

      If you live in a condo in a mega city — what is your plan?

      You and your family will be on your own — the government will not help — there will be no aid agencies to step in — no relief coming — Bono will not appeal on your behalf (Bono will be just as screwed as you… and in need of aid)

      Unfortunately that is what is coming. Rather horrifying no?

      • Rodster says:

        Damn, some have said on other forums I was talking nonsense and I was nuts for saying similar stuff. If you play out the scenario this is all quite possible. The problem with all the globalists is that they have changed NOTHING. If the USA collapses they’ll find another country to exploit and continue the infinite growth economic model until the last tree is cut down.

        That’s why I have been saying it doesn’t matter who has the world’s reserve currency or who has the most gold. It all doesn’t matter because as Michael Ruppert basically said. We have boxed ourselves in with fossil fuels and not only built and expanded a way of life based on oil with an infinite model of growth but did not give ourselves a way out with an alternative when it was possible and we have ruined the planet in the process.

        • Arthur says:

          oh please!!! If you are going to drink wait until you are sober to post….no one wants to read this rubbish!! Get a hold of yourself man! The time to panic is far from now…..don’t start this coward diatribe…….

          • Rodster says:

            Hate to break out the following memo to ya but entire civilizations have collapsed in the past and they weren’t as dependent on a grid system for life’s basic necessities. I guess there’s no need to worry about Fukushima and now the radioactive sewage that’s purposely being dumped in the Pacific ocean or the other Fukushima’s that are waiting to happen. I guess we don’t need to worry about the hundreds of millions of fish or bees dying off or the ocean floor being used as an underwater garbage dump or weather geo engineering which the US Govt has confirmed.

            I take it you put too much faith in Govt that they are always looking out for your BEST interest. Sorry Arthur but it’s all about money to those running things around the world and both you and I and the planet have taken a backseat.

      • Bob Valiant says:

        “Bono will be just as screwed as you… and in need of aid.”

        Well, at least there’s *that* to look forward to.

      • Coilin MacLochlainn says:

        Oh dear, we were all sitting around Gail’s cosy fireplace a few messages back, enjoying the banter, and now this: Armageddon, apocalypse, Cormac McCarthy’s ‘The Road’ come to life…. Thanks, Paul. I live in a city. I have no plan. I am totally screwed. Bono is probably Doomsday-prepping as we speak.

        • Paul says:

          I am not sure of your point…. this blog is about logic and truth .. I don’t think anyone is here looking for sugar coating — there are plenty of other blogs that will give you that… Chris Martenson does a good job….

          I have a brother who understands the issues to a certain extent — he is expecting billions to be wiped out — but in the aftermath he believes we will be living like Little House on the Prairie but with iphones and electric cars …

          He has two young children so I think to maintain good mental health he should stay away from this blog…

          I on the other hand opted out of the children thing partly because I do not want to endure the mental anguish of having them go through what is coming — so I am able to face up to a very confronting reality without that baggage — and other than one sleepless night when it dawned on me that what I have outlined above is the likely outcome of all of this — I have no problems with any of ‘the road’ scenarios.

          If it troubles you remember this — we will all die — you could get hit by a car tomorrow — are you going to criticize me because I pointed that out? So what is the difference – I am only stating the obvious – stating fact.

          Going beyond that I suppose people do not want the hard truths stated because this is an earth-shattering event — like nothing since we have been on the planet — it will be a huge blow to our egos as the ‘great beings’ of the earth – how can this happen!

          Don’t sweat that either — we are not really that great — nor that smart — after all — if we want to look for the causes of this — all we’d need are 7.2 billion mirrors to look into.

          • Coilin MacLochlainn says:

            Paul, you misread me; I believe you are absolutely right, we are in a truly terrifying predicament. I was just contrasting your words, for comic effect, with the more sugar-coated messages earlier on in this thread; someone described this forum as a cosy fireplace, which may be true for some. I think your brother might be right about the return to a Little House on the Prairie way of life, but without the iphones and electric cars, and presumably with far fewer people. The horse and cart will become our main means of transport, together with bicycles for as long as we can still produce them.

            People always say we have to think of our children and grandchildren, but the fear that motivates most people is what will affect them in their own lifetime, our lifetime. And I am worried about living in the city with no safety net, should the collapse happen tomorrow. Thanks for your response.

            • Coilin MacLochlainn says:

              And by the way, it’s Miley Cyrus, not Cylie Myrus!!

            • InAlaska says:

              Coilin, unfortunately I don’t think it’ll be Little House on the Prairie because when the collapse happens we are going to go way down below that technical level. The people living at the time of “Little House” had built up to that technology after a thousand years of innovation. Almost no one who is alive now, and even less after collapse, will know how to make a wagon wheel, shoe a horse, forge a plow, make gunpowder, build a loom to weave cloth…as you know the list goes on. It is more likely, back to the stone age for us, or perhaps a scavenger civilization for a few decades while the survivors live off the products that are still around for awhile. It won’t last long though. We’d be oh so lucky to have Little House on the Prairie, but I think we’re going to get the Flintstones instead.

            • Paul says:

              You hit the nail on the head with this: “The people living at the time of “Little House” had built up to that technology after a thousand years of innovation.”

              These people had skills that were passed on and honed by previous generations. We broke the continuum years ago.

              These were tough individuals and even they had a very hard time of it (I’ve read a few books about pioneers in Canada … they seemed to be close to starvation often enough)

      • Connorhus says:

        The problem with your forecast is it doesn’t take into account the very formula of EROEI discussed here so often. For example your tree analogy assumes the ones wishing to turn said trees into firewood can do so and have the tools and skills (in a fuel depleted scenario) to harvest them. I imagine the forest would be picked clean of dead wood quickly but a freezing man would kill himself against a 100 year old oak before he got enough for one fire without the proper tools. To fell one tree without gasoline requires at the minimum three men working together to produce a fuel efficiency rating high enough to make it worthwhile.

        It’s the same with food etc. The dying off curve would be massive the first two weeks but would quickly level out and I believe drop no further than 50% population loss across the board for the first year. With no transportation urban areas and big cities would suffer 90% or greater losses but rural areas would have a surplus.

        Worst case scenario would be an event like that taking place in the Late Fall or early Winter after food stores had been moved. Best case would be late Spring after the planting so a harvest could be had.

        After the first year it would all be hand work and although you are correct the land is farmed by oil today it ain’t rocket science, I assure you every diesel farmer out there knows how to plant without fossil fuel. There will also be a steady stream of refugees who can go out there and beat the ground with sticks too. You might even be surprised at how many old tractors are still around that were converted to methane during WWII or how many old guys still remember their grandfathers producing the methane in barrels and storing it in inner tubes.

        There maybe a lot of people out there eating boiled pigweed every night for a few years but there will be no extinction level event just from an energy/economic crash.

        • Paul says:

          North Koreans eat grass from time to time…. so you could be right on that — maybe people eat bark and grass and forage until they get back on their feet.

          Not so difficult to wipe out forests without chain saws — as pointed out on earlier discussions Europe has a major deforestation problem pre industrial revolution — and there were nowhere near 7.2 B people living there…

          I think ideally we get the worst case situation — massive numbers die quickly rather than lingering and fighting over the scraps.

          The issue that trumps everything is the nuclear one – what happens when we are unable to keep thousands of spent fuel ponds and reactors cool?

          Look at Fukushima – we are unable to fix that … the only reason it is not a total catastrophe is because we can continue to use mechanical pumps to cool the mess that melted into the ground…

          I have read that if a spent fuel pond is not cooled the explosion that would result would release massive amounts of radioactivity into the atmosphere – I think there are 4000 of these or so?

          Reminds me of the original Planet of the Apes — the deformed people living underground after the nuclear apocalypse….

          • Connorhus says:

            I will agree with you about spent fuel rods. All the idiots out there that jump on the safe nuke plant bandwagon never seem to count the fuel rods or the fact that in the US at least they still have em all right there with 1200 or more sitting in pool designed for 400. Of course many of them are cooled off enough after years and years they won’t do much. Many other plants are positioned in places that they can be naturally cooled due to rivers flowing nearby that will reduce the output or screw up someone downstream.

            Even so you have a point about the nuke reactors and it will be a problem.

            • interguru says:

              Chernobyl shows that you can have a active ecosystem ( with many sickly individuals ) in a high radiation area.

            • edpell says:

              Proper disposal is good but in a pinch throw the fuel rods in a lake, river, or best case ocean.

            • Paul says:

              Maybe that’s the plan at the last minute — because if they wait till too late this will be impossible – there will be no heavy machinery…

              That said throwing thousands of spent fuel rods into the ocean would surely kill all life in the oceans — I can’t begin to imagine what impact that would have on the global environment…

          • Connorhus says:

            Back to your forest thing however. Depleting the old forests took many wood cutters with the proper tools. There maybe millions looking for wood heat but they won’t have the tools nor the know how to harvest wood efficiently enough to make a dent is what I am saying. In fact I would bet a good number of them won’t come back from trying. After a few years when teams could be developed maybe but it would take a while and so many would freeze to death the demand would diminish before the forests.

            • Paul says:

              Definitely very difficult to predict….

              There will certainly be a lot of axes lying around and available — but as you point out the society that was destroying the forests 200 years ago was comprised of people who knew what they were doing — but I think more importantly it was a stable society — what’s coming will likely be absolutely chaotic — way too many people — disease — starvation — people may very well go catatonic when this hits…. curl up in a ball in the corner and die….

              They probably won’t even think to cut a tree — they will not have the energy — and do what with the tree? Burn is to stay warm? Sure – but what if you have no food — no need to cook anything (unless – heaven forbid — you went cannibal…) — one cannot live for long a grass diet.

              So ya — perhaps the forests may not be denuded as one might expect

        • xabier says:

          Not only were the old foresters very lean, hard men (judging from the old photos of where my family came from in the Pyrenees) working in fully-integrated teams, they had oxen and mule teams to drag the timber once felled. Also in Spain and I imagine elsewhere, they used to take to wood to some towns by making giant rafts of them and steering them down the river, no need for boats.

          I’d also add that they had their wives, daughters and sisters at home cooking away all day to keep them properly fuelled up for work – so a hell of a lot of back-up for the forestry labour. If a main with a chain-saw has the fossil-fuel economy behind him, they had their women, and the pigs fattening ! Naturally, they lived among the forests they worked in.

          • Connorhus says:

            Last Winter I cut approximately half a cord of firewood with no fossil fuel input just to see if I could. It took HOURS and even then I cheated and used my tractor to pull a trailer (to simulate a horse drawn one). You are 100% correct in your analogy.

            Even with the proper tools, a couple of sharp axes, cross cut saws, wedges etc. The big trees were totally safe from little ol me. It would have taken me days to fell one. I was in old growth woods with lots of small standing dead trees and broken limbs and guess what I harvested? Much like Europe’s forests the ones here would be picked clean of deadwood and understory trees fast but the larger trees would remain.

        • InAlaska says:

          Connorhus,
          I heat my home entirely by the wood that I harvest. Your comment about the oak tree is well taken. However, I would like to just point out that even with the tools, you need to think ahead at least a year. Harvesting a fresh green oak would do you know good. Ever try and burn green wood? With or without a chainsaw, first you fell it, then buck it, then let it sit for at least a year to season. Then you’ve got to haul it out of the woods to wherever its going to be burned. Then maybe you can burn it. Lots of people will freeze waiting for that year to pass.

          • Connorhus says:

            InAlaska I have had these discussion before and have learned one important aspect of cutting firewood. It is a very regional thing. I heat exclusively with wood and will burn either in my indoor stove or more often in my outside furnace. This last Winter I burned at least 20 cords it was so cold. I cut green wood some and I never buck a tree nor do I purposefully fell a tree for next years supply because I don’t need to. I have more standing dead trees available than I can shake a chainsaw at to be honest. In fact many standing dead trees rot before I can get to them around here. Yet I am lucky living in such a heavily forested area with plenty of short lived trees that put out decent BTU’s to choose from. Your analogy is correct however and even more correct for those people who live outside of heavily forested areas. They simply will not have standing deadwood to harvest and will need to pick up off the ground what they can find.

            Oh and I do burn live wood frequently mixing it in with the dead and seasoned stuff for a little extra burn time. Around here if you cut after about the first of May it is usually a weed tree or something in a yard because the undergrowth and wild grape get soo bad you cannot fell a tree without some heavy equipment to pull it off the hangs with. It works well though with all the standing dead trees you just leave em be until you need em.

            • xabier says:

              A little Brotherhood of the Axe starting up here!

              I have possibly the biggest cast-iron stove one can get, from Belgium.( I bought a British one, but had to sue the makers as it was very inferior in use and build-quality – I bought it unseen). It has a very broad flat top for cooking, but one can also dry out enough green wood on top for the next day or two if needed, over an evening’s burning. Otherwise it’s certainly a matter of a year or two seasoning – I’m actually working on a four-year seasoning cycle.

              Anyone who wants a quick lesson in the value of fossil fuels should spend a morning hours splitting timber with a sledge -hammer and wedges. They will then look with renewed respect at the achievements of our ancestors!

              Old English saying:

              ‘I will be kind, I will be good;
              ‘And help my wife to split the wood !

            • VPK says:

              When I lived in Massachusetts I was into wood working hand tools and there were several “used tool” shops in the area. I was amazed at the number of old hand saws, axes and other related items that would be had for one dollar each! These were top of the line quality and someone in the past paid dearly for it. Not the mass produced cheap crap
              Made to be used day in and day out.
              Like you fellows stated, the know how to use them is a lost art, by in large.
              Like in the Insurance commercials, Mayhem will rule the day.
              Sorry Gail for using your industry as a prop.

            • InAlaska says:

              Connorhus,
              That is great that you can burn green wood. Up here, if its not dry it won’t get hot enough to burn. I imagine that I could extend my burn time by putting some green on the hot dry stuff, but it ends up putting a lot of creosote on the inside of my stove pipe and then we get a chimney fire. Dead standing wood is such an asset. Good for you. If you got it, burn it!

            • InAlaska says:

              xabier,
              You know how the saying goes. “Good firewood warms you at least three times. Once when you cut it down, once when you split it up, and once again when you burn it in the stove.

            • InAlaska says:

              VPK,
              I would love to have a $1 cross cut saw! I just bought a new one online for $120. Its a good German made two-man saw, but still, expensive!!

        • DaShui says:

          Pigweed has a most excellent nutritional profile, much better than what we plant around it. Same with many “weeds”.

        • dashui says:

          Pigweed has a most excellent nutritional profile, high in protein.
          It will make a perfect sidedish to those too fat to walk people I see riding those electric scooters. Once the grid fails and they can’t recharge, they wont be able to get away from me anymore!

          • It falls over when I try to plant it, creating a problem. Am I doing something wrong?

            • Connorhus says:

              Pigweed is in fact edible. Of you hold your nose and have a lot of salt but they better pick it when it is young is all I got to say. Yes I am sure everyone’s grand parents just loved em a pot of greens but in my opinion there is a reason you don’t see those pots cooking anymore and it ain’t just because of fast food.

              Gail be glad your pigweed falls over :)

    • ordinaryjoe says:

      “There will come a time when euthanasia will sound pleasant, and the lines will be long where it is offered cheap, I’m thinking.”
      Ok doke all we need now is a billion grams of pentobarbital and a LOT of $20 dehydrators,, oh wait…
      http://www.nathanwinograd.com/wp-content/uploads/2013/07/Sodium-pentobarbital-shortage-ends.pdf
      Does a 300lb guy with a sledgehammer and a mask qualify as euthanasia?

    • It is hard to know what to think. Perhaps hope for a miracle? Or a calculation error?

      • ordinaryjoe says:

        Is it possible knowing what to think is an illusion? When you are twelve you know what to think. When you are 16 you look back and say that was dumb and you know what to think. When you are 20 you look back and think that was dumb and you know what to think. Is it possible your whole life you know what to think and its all an illusion? The future is uncertain. Whether the analysis on this blog proves true or not in the end regardless of whether we know what to think or not we only have today
        Lets examine two models. The first is infinite resources infinite consumption. This model invariably leads to trying to accumalate more stuff for consumption a level of consumption that since is a notion, a idea is never met. The second model is finite resources finite consumption. This model , the model I perceive as the truth, the model presented with enormous momentum on this blog brings to question what constitutes ethical consumption. The notion that more consumption is more better dissolves.. Knowing what to think dissolves. What is left? That is where I perceive individuals have a true chance to express style in their life. To that I can only speak as to my personal style. What allows me to enjoy life? Reduction of consumption. Can I effect political, environmental or energy issues? no. The one thing within my control in relationship to these issues is is my level of consumption. When one or another injury to the planet is brought forth I find some way to reduce consumption. It brings a smile to my lips. It allows me to enjoy each day. Once again this is a matter of style but I will state one thing without caveat; trying to radically decrease my consumption has made me exponentially happier than trying to radically increase my consumption ever did.

        • xabier says:

          Ordinaryjoe

          Happier -and richer- because your desires are fewer, as the Ancient Greeks recognised.

          Even if essentially powerless, we can make small changes which enhance our own ethical dignity.

          But the sense of living in an open-air lunatic asylum grows stronger every day.

          • InAlaska says:

            Ordinaryjoe and xabier,
            I agree with you both, wholeheartedly. We were born into this system, we didn’t create it. So, know that, how we choose to live on this earth and within this system, is perhaps the most important decision we make. Put up a solar panel, live humbly, with a measure of grace, by our own terms (as much as is allowed by the system), with compassion for the plants, animals and people whose paths we cross. Watching your kids grow and learn to harvest beans and carrots. Watching them fall in love with their first girlfriend. Life can still be sweet, even in the middle of the asylum.

      • Coilin MacLochlainn says:

        Perhaps you made one error, Gail. Though your articles are otherwise faultless and highly educational, you may have one ideological blind spot. You said you were not really concerned about predicted climate change because it will be averted when greenhouse gas emissions plummet after the next and final oil shock. That’s partly true; but the concentrations of climate-changing gases already in the atmosphere are so high that we are locked in to at least two degrees Celsius of global warming already, and more likely four. And that probably spells the end for the Earth’s life-support systems and most of humanity. If we are to take comfort from your words, can you explain how carbon dioxide will be taken back out of the atmosphere to restore balance to the climate? Because a zero-carbon economy may not be enough; it will have to be a carbon-negative economy, won’t it?

        • Paul says:

          Not taking sides … I really don’t know if shutting down emissions completely right now would change the trajectory we are on – perhaps you are right ….

          But I don’t think anyone knows unequivocally that we have passed the Rubicon….

          With climate change science — as with economics —- there is a lot of unpredictable moving parts — it is impossible to model or project things with any certainty. We’ve seen many of the climate change models and predictions go wrong already (as is to be expected – its even hard to than trying to predict the weather accurately a month from now because we have no historical benchmarks for climate change to observe – with weather we know it will be hot if we are north of the equator – because it is always hot in June…)

          What I would say is that I am far less concerned about climate change because even if we have set the forces in motion that will decimate the planet — I think (hope) that we are some decades or more away from the tipping point.

          Whereas the collapse of the global financial system due to expensive oil —- is imminent….

          • Rodster says:

            Guy McPherson says we HAVE crossed the Rubicon, so did Michael Ruppert.

            • Paul says:

              Stating and knowing unequivocally are very different things.

              It is impossible to know with certainty what will happen with regards to climate change after the SHTF.

              See flat earth > round earth.

          • Coilin MacLochlainn says:

            Paul, the science is clear, anyone can understand it. You put more carbon dioxide in the atmosphere, the world gets hotter. You take it out of the atmosphere, the world cools, though very slowly because there is a lag period. Unfortunately, a great deal of the global warming has gone into the sea, and there is no way of cooling the sea, except to wait, a very long time, so it seems we are totally screwed.

            The predictions by the United Nations IPCC report were prepared and agreed by climate scientists in all countries that contributed to the report (I think 158 countries?). The wording was toned down due to political pressures, so the predictions are not quite accurate: everything will happen faster than predicted, and with more dire effects. And that is exactly what is happening. We were told by previous IPCC reports that summer sea ice would disappear in the Arctic by mid-century, but now it looks as if that will happen within the next few years. The same with the other predictions: they are all very conservative. Which means we are even more screwed than people think. It’s going to happen in our lifetime, Paul. But you’re right, the oil shock will come first and then the global financial system will collapse. So from that point of view, Gail is right; that’s how the cards are going to fall. Oil shock, financial collapse, then climate armageddon…. We have crossed the Rubicon, as Rodster says, and can only get back to the safe side if we actively remove carbon dioxide from the atmosphere. That means all countries actively pumping billions of tons of CO2 out of atmosphere for decades to come, at enormous cost and for no return, other than rescuing humanity from oblivion, of course.

            • Christian says:

              Not so fast, Gail has not only showed peak finances are today, but also the sacred IPCC almost everytime uses hyperbolic forecasting, impossible to exist from a financial-geological standpoint. You would have to excuse me, but I woud be not so kind as others to search for you the link, if it is located in this very same blog.

              It is also important to highlight that this makes a very huge contribution to hide a realistic account of FF and actual civilization’s destiny.

        • If most (or all) of us are dead, will it really matter whether the temperature is warmer? The earth will take care of itself. I presume that there will be a flourishing of green plant life, and the CO2 balance will eventually will be restored. We keep talking about taking care of the earth, but it is humanity we are concerned about. Humanity has huge problems, with or without climate change. We are behaving much as a cancer would, trying to end the life of the host. The host is fighting back.

  11. Timothy says:

    The priorities of the people that program these bots…? Money. When it goes away, so will many of our problems. But of course, new ones will emerge.

  12. Pingback: MILEAGE RATE SELF EMPLOYED 2014

  13. Paul says:

    Superb, concise, well-supported article.

    W are well and truly are cornered.

    The links off are excellent – particularly to previous articles that are relevant to this as this hopefully deals with having to go over the same disagreements…

    Many will of course say ‘what about renewables’ — so I will pre-empt with a link http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/

  14. Theedrich Yeat says:

    Whichever way we want to cut the cake, and whomever we want to blame, the reality is still stated best by Joseph Tainter (_The Collapse of Complex Societies_): in any complex society, demand grows mechanically (petri-dish style) until it exceeds supply, whereupon the society collapses. We in America have reduced our labor costs through mechanization/computerization/outsourcing to the limit. We have reached the end of efficiency growth, unless we want to reduce bureaucracy – an unthinkable proposition in the modern U.S. The same goes for QE and hedonics. To get a good feel for where we are on the oil exploitation/depletion trajectory in our now global society, watch the excellent talk by Steven Kopitz (Douglas-Westwood energy research group) at https://www.youtube.com/watch?v=dLCsMRr7hAg . Incidentally, it is also meaningless to talk about the “morality” of governments in power struggles where the most hypocritical regime wins the argument. Morality just another tool is for deluding the herd. In historical fact, might makes right, and the overarching principle is Nietzsche’s _Wille zur Macht_ (will to power).

    • David U. says:

      You don’t get it right. It is not demand exceeding supply but the other way round. The problem we are facing it is supply exceeding demand, hence the need for low interest rates. Investment is failing, and debts can’t be repaid, or the owners don’t get the return they expected, so they cut new investments. Low demand causes a production overcapacity, which is what we’re witnessing everywhere. Governments are trying to raise demand with zero interest rate policy because they think the economic machine needs a little help so it can start functioning by itself again. They are going to fail, the problems we are facing can’t be solved making use (or abuse) of monetary policies.

      This system is flawed in its nature. It requires the permanent increasing in production capacity over the long run, and that requires a raising demand, which means high birth rates, increasing GDP, etc. It’s like a ponzi scheme. And we all know how ponzi schemes end… Well, right now we’re at the point in which new comers (youngsters demand) can’t offset the needs created by the ever-raising capacity model, for many reasons that Gail states superbly.

      And once the machine stops, it can only break, there’s no such thing as a nice stop…

      As Gail said “We truly live in interesting times”. I’d prefer to live in dull times though.

      • Paul says:

        Indeed – a deflationary spiral is to be avoided at all costs….

        I am waiting for Ben’s chopper to hover over my yard and rain 100 bills down — and I guarantee him I will not hoard them — I will participate — I will blow most of it on wine, women (wife) and song — and then Iwill waste the rest.

      • Theedrich Yeat says:

        Yes, David U, you are correct that governments are trying to raise demand with ZIRP and other prestidigitation. However, Steven Kopitz’ article at https://www.youtube.com/watch?v=dLCsMRr7hAg is against precisely the demand-constrained modeling that you imply and governments take for granted. The latter process assumes that, if demand rises to infinity, supply will automatically follow, perhaps using substitution through renewables or something else. Steven shows that the data after about 2005 do not support this view. Rather, they support the supply-constrained model, which points to a radical downshift in GDP and, hence, a major change in future government policies. (Of course, the smoke, mirrors and excuses will certainly continue, but reality is indifferent to government/media propaganda.)

    • Paul says:

      Tainter is superb…

      At the end of the day I don’t think it makes sense to blame anyone — we are an organism —- a parasite…

      And we do what we are programmed to do – reproduce by any means possible – we just happen to have a big brain — which has allowed us to manipulate our food supply — which has allowed us to produce exponentially…

      But we share a major flaw with some other (stupid?) parasites — we kill the host — which means we exterminate ourselves… which is a possible outcome here…

      The supreme irony — the best and the brightest — the smartest in the room — yet we are not even as smart as most parasites….

      Of course now if only we could find another host — we the chosen few could be flown off on Virgin Galactic to begin the process again.

      • Connorhus says:

        And what host has the human species killed to date?

        • Paul says:

          Actually I did some revisionist thinking on that — see my lengthy post a few moments ago on – how humans are a cancer (not a parasite)

          Who is the host that we are killing? I would have thought that quite obvious — mother earth of course (and everything living on it)

          Hopefully we can be wiped out before we turn the planet into another Mars.

          • Connorhus says:

            At best I would say we are a bacterial or virus infection. We haven’t killed the host yet, I doubt we have even gotten close and the White Blood cells haven’t kicked in yet. When they do humans will learn their place once again.

            • Paul says:

              The only place that is truly compatible with the host would be to return to acting as hunter gatherers (and a population of millions not billions) — living as we once did — a lifestyle similar to other primates.

              Anything else is unsustainable and based on past experience — would result in another bout of cancer on the host because like cancer – we are a persistent disease — our DNA says we must grow… we can never stop…

          • Christian says:

            If Muhammad can’t go till the Mountain, the Mountain’ll go to Muhammad

  15. This is entirely about running a Waste Based economy which controls the downhill flow of energy through the money supply.  I am currently at work on on article which demonstrates how this is done and why, quite clearly.  Should be up Sunday on the Diner.
    Meanwhile…
    Latest Rant, Belgian Waffles now UP on the Diner Blog!
    A look at the suspicious hanky panky ongoing behind the Belgian purchases of US Treasuries.
    Also, #1 with a Bullet on the Diner Juke Box
    WWIII BEGINS!
    Peak Oil with Steve Ludlum of Economic Undertow
    The Steve Podcasts are really good and should not be missed.
    Coming Soon, Spy vs Spy, a look at the espionage bonanza from the FSoA to China, Google to Facepalm to Cisco and BEYOND!
    RE

  16. Pingback: The Connection Between Oil Prices, Debt Levels, and Interest Rates | Our Finite World | Olduvaiblog

  17. “…The only way to keep things going a bit longer might be negative interest rates. But even this seems “iffy.” We truly live in interesting times.”

    Seems like negative interest rates are here or just around the corner. See this: http://www.ft.com/cms/s/0/2ade2e48-e047-11e3-9534-00144feabdc0.html.

    Infinite growth on a finite planet. What could possibly go wrong?

    • I know they have been talking about negative interest rates in Europe. It seems like you take your money out of the bank and put it under a mattress instead, though.

      • xabier says:

        Yes, QE, negative interest rates all in the air at the moment. Dr Frankenstein is desperately trying to get signs of life from the inert and rotting mass on the table.

      • edpell says:

        With negative it pays to borrow money the more the better. We already have effectively negative rates for banks why not expand it to everyone. I’ll take 10 million and pay back 9 million. The other one million I will use to move from New York State to the foothills in California and buy land and PV panels and batteries and an energy neutral house (small low tax) and two new cars and a college education for my youngest. Might need to make that 20 million with 18 paid back. I am willing to do my part to stimulate the economy.

        • Paul says:

          If I’d not already done something similar already — I’d most definitely consider a loan (negative interest rates or not) and buy a remote piece of hobby farm land and a house — I’d leverage up buying everything needed for self-sufficiency.

          When the SHTF I cannot imagine there will be anyone collecting on the loans…

          • InAlaska says:

            Chris Martenson and others say the best thing to do is get out of debt for the hard times to come, but if the scenario really plays out, like Paul says, whose gonna be still working to collect on the loans. Seems like the best strategy is to be leveraged to the hilt.

            • Paul says:

              I hope nobody will go out and do that based on what I am saying — because I am really not an authority on this… nobody knows what will happen… and for certain nobody knows WHEN this goes sideways…

              But as was said already — if everyone is unable to make payments on their homes — then hardly likely anyone will seize those homes…

              I would take that further — if as is assumed, most people perish from hunger, disease etc when things unravel – there will be plenty of free homes to go around… banks as we know them will not exist… nor will governments.

            • Lizzy says:

              Ha! That was the reason I’m in the state I’m in! Leveraged to the hilt… I knew there must have been logic to the madness… Thanks, InAlaska, I’ll sleep better now.

            • I think the answer is somewhere in the middle. If you own a piece of land you intend to farm, you probably don’t want a lot of debt you can’t pay. You may lose the land anyhow, but with a lot of debt, it ups the chances at least a bit of losing the land.

              Otherwise, I tend to agree with you. Don’t bother paying off other debt ahead of others. At some point, the creditors will simply lose out.

  18. Paul says:

    You know —- this is just what I need to pass the time when I finish up my post apocalypse farming day… does this come with a hand crank to generate the juice?

    If so sign me up for two — always nice to have a back up

  19. Paul says:

    To the bitter end…. :)

    • MJX says:

      The Bitter End of Jim Morrison
      According to French journalist Sam Bernett, the death of legendary “Doors” front man, Jim Morrison, was not quite as “natural” as stated at the time. As hinted in the Oliver Stone’s biopic movie, Morrison’s death, 36 years ago, was indeed caused by a massive drug and alcohol overdose. It seems that at the time, his demise was covered up by a network of drug dealers that provided the artist with his daily “nutrients”.
      The French Police are currently considering reopening the case of this famous death.

  20. Don Stewart says:

    Dear Gail and All
    This will add a few things to our list of items to worry about…and perhaps do something about.

    First, Nicole Foss has a nice article on water and food and climate change:

    http://www.theautomaticearth.com/physical-limits-to-food-security-water-and-climate/

    There is one error that I noticed. Recently, the US has begun to release enough water from the dams on the Colorado River to restore the delta, at least somewhat. Sandra Postel went down to witness the first water to reach the Sea of Cortez in quite a long time.

    Second, there is an interesting article by Hans-Peter Schmidt and Kelpie Wilson in the current issue of Permaculture Activist: 55 Uses of Biochar. Permaculture Activist is strictly print, so the article is not available unless you buy the magazine physically. I am not a biochar expert, but I will give you my opinion after reading the article:

    If our soils contained a lot of biochar, we could ameliorate many of the issues identified by Nicole. We would have sequestered lots of carbon, our soils would hold onto water and mineral nutrients, the tilth of the soil would be better, etc. But biochar is either an expensive industrial process or a time consuming and labor intensive craft on a small farm. From studies in the Amazon and other areas, it appears that the indigenous people built up their biochar content over a period of hundreds of years. Biochar has many uses, from purifying water to cleaning up manures to maintaining appropriate moisture levels inside a house which has biochar in the plaster on the walls. So the authors think that the sensible solution is to only put biochar onto agricultural fields after it has been used in a cascade of other applications. In short, we don’t just make biochar to put into agricultural fields…we use it for lots of things and reclaim it and use it again and its final resting place is in the agricultural soils…where it works for a thousand years or so. It helps, I think, to imagine a town with surrounding agricultural land. I do not think the recycling of biochar using global networks (such as Nicole describes shipping hay to China from California) would be feasible at all in a world short of oil.

    There may be people who advocate the large scale manufacture and application of biochar as an emergency response to climate change and all the problems with agriculture. I offer up the article as a cautionary tale, describing what these experienced people see as the limitations….and the time required to begin remediation and restore fertility.

    Don Stewart

    • Paul says:

      Don – thanks for keeping the chin up and posting these excellent ideas — hopefully all of the knowledge that many of us are gathering will make a difference.

    • Rodster says:

      I like what Gerald Celente recently said on an audio interview with Terry Lutz of FSN. To paraphrase he basically told him..”look I don’t want to get into whether global warming or climate change is real or BS. All I can tell you is that if you pour millions if not billions of tons of crap in the air, water and land eventually you are going to feel it’s effects. Nothing good can happen from that”.

      • Paul says:

        What I generally say to people when I am in HK or China who dispute climate change is — ya — but how do you feel about breathing that sh&t we call air out there day after day – how do you feel about your kids breathing that?

        That generally gets them thinking.

        • Rodster says:

          Unfortunately the environment has become too politicized for anything to ever happen before it is too late. I was listening to Guy McPherson in an interview and he has said it’s already too late to avoid human collapse. Even one of my favorite comedians, George Carlin way, way back joked about in his skit “saving the planet” ‘that we are just a bad experiment, a failed mutation’.

          • Paul says:

            George Carlin was definitely not in the matrix!

            I completely agree — a cancer — a freak of nature — an aberration – failed mutation — all appropriate.

            Two of his best ever performances:

    • Thanks for pointing out Nicole Foss’s article. I am afraid am not a biochar expert.

  21. B9K9 says:

    Paul, I used to wonder why the PTB would let loose money changers on the general public, when it seemed like they could retain greater popular support by suppressing usurious practices.

    However, in a larger context dealing with other competing nations in classic game theory, you begin to understand why bankers have been allowed – over the ages – to practice their nefarious arts on the domestic public until they are inevitably expelled, cordoned off or killed in mass uprisings.

    The reason, of course, is because country A, the one that effectively first launches a comprehensive banking system (fractional reserve lending, central banking, derivatives, etc) is able – in the immediate short-term – via the exponential increase in “money” is able to “afford” greater budgets in which to purchase arms, support armies & hire mercenaries (typically neighboring countries).

    And with that jump, they are able to vanquish country B, C & D, enslaving their people, taking their lands, and requisitioning their resources. That leg up, of course, is then used as collateral to finance further expansion, and so and so forth.

    So my question to you is, why do you hate country A, when countries B, C & D would have done likewise, if given the chance or had been astute enough to understand the underlying mechanics of “money” and its ability to finance conquest and acquisition?

    The USA simply got the jump on everyone else this time around; however, any other country would gladly like to be its shoes. Ironically, many have been in ages past – Netherlands, Spain, Portugal, and GB – before geography, demographics, technology, etc conspired against them to end their reign(s)

    To indulge in some kind of emotional reaction like hate, to judge a nation as if countries operated under some kind of moral code, is just plain juvenile & immature. We’re #1 because for 500 years, we’ve killed, enslaved, conquered, stolen, raped & pillaged far beyond our native N American continent. The only thing that will stop the USA is a greater force.

    What force is that? The force of nature? Perhaps, but then everyone else is in the same boat, so once again, we “win”. At some point in one’s adulthood, you learn that if you can’t fight, you should join. Holding onto some kind of deep seated hostility is quite unbecoming. You would make a perfect American if you could only get over your personal hang-ups.

    • Paulo says:

      I think that many of us who are angry at the US confuse the political with the People. 1/2 my relatives are US citizens, and 1/2 are Canadian. Not too much difference between them. Harper is as big of a jerk as Rick Perry. Obama is no more owned by ‘interests’ as is Justin Trudeau.

      I don’t think it is as dire (in a survivable context) in North America as it is in most other parts of the world. I would add Australia and New Zealand and Scandnavia to this list. However, I don’t think anyone will want to be in a large city with a large disenfranchised population when crunch unfolds. There are some seamy no-go areas in Canada for sure, but none of them rival any large US city for sheer danger, as far as I’m concerned. I remember asking a United Airlines capt why he traveled through Chicago with a hand gun in his glove box. (This was 40 years ago). He told me that there were neighbourhoods that if you accidentally drove into them, or if the stop lights malfunctioned, you could be killed. It hasn’t got any better as far as I can see.

      If you are on theis blog site you have enough information to know you should make some plans to get out and get safe. I’m not talking about those doomsday preppers tv goofs, but rather concrete options that suit his/her (your) abilities and dreams. Surely, things are coming to a head these days.

      It might be more helpful and interesting to see some suggestions and/or advice unfold than to continue with political corruption tales and damn the US stories. I confess to becoming pissed and tossing in my 2 cents when irked, but except for Resilience.org, (which is a valiant attempt at constructive adaptation), there isn’t much else outh there but wacko sites.

      So, my first bit of advice is to have no debt….first and foremost. If you do have debt then figure out a way to retire it. Pick some crappy weather day, sit down with a calculator and a pad of paper and draw up some plans and a budget to move this along. I await others to chime in and add to this list.

      Paulo

      • Harry says:

        Given how quickly the global economy and its supply-chains will be paralysed in the event of a major financial discontinuity, there is an argument for leveraging the current system for all it’s worth, on the basis that debts will ulitmately be uncollectible. Obviously there is the issue of timing to consider – and the dictates of one’s conscience!

        • Paul says:

          “I think that many of us who are angry at the US confuse the political with the People. 1/2 my relatives are US citizens, and 1/2 are Canadian. Not too much difference between them.”

          Didn’t the majority of Canadians – following 911 – respond to a poll stating that they thought the US deserved to be attacked because of the murderous rampage throughout the Muslim world?

          I call it the American disease — and it is creeping into Canada no question about that — but to say that Canadians and Americans are the same — well that is just totally ridiculous.

          I can’t stand Harper — but to compare him with Rick Perry – you surely are kidding.

          Now Rob Ford — I think he was born in Chicago no?

      • I would say, plan your life so you don’t need debt. If you already have debt (student loans, auto loans, condominium loans, house loans), “It depends” on whether or not you should make every effort to pay them off. In many cases it is not possible to pay the loans back, any faster than the normal rate. And sometimes it is not possible to do that.

        There will be cases when it makes every effort to pay off debt–especially if you have a house and land, and are working on farming the land. But I am not sure I would obsess on the situation. If everyone is defaulting on a home or condo loan, the chances everyone will be thrown out of their home at the same time is slim. Student loans are pretty onerous, I am not sure that you need to feel obligated to pay back more than the required payments.

        Your big focus should be staying away from adding debt–buying cars that don’t requiring debt; not going to expensive colleges, if a cheaper one is an option; buying a home that is well within one’s budget, not at the upper edge of what one can afford.

        • InAlaska says:

          If the collapse follows a shark fin, who will care about you repaying your loan? Who will even be working to collect on deliquent loans? Won’t the stuff you bought with debt be an asset instead of a liability? It seems like the decision comes down to how bad you think the collapse will be: complete, partial, slow, fast? Who has the courage of their convictions and the timing of debt.

          • xabier says:

            InAlaska

            I think it’s going to be painfully slow. Tax officials can collect, police can take bribes and bankers can foreclose for longer than any of us can possibly imagine. Heaven and Hell are a conjecture, our debts catching up with us is absolutely certain…..!

            • InAlaska says:

              xabier,
              I hope you’re right. Slow will give us more time to prepare. Fast would be awful. Although perhaps better for the planet.

            • Paul says:

              Quite possibly the best title for a book ever —- ‘The Long Emergency’ (Kuntsler)

              The pinch started just after 2000 when oil started to climb — so we’ve been in this for 13 years now…

              I can’t recall how long Kuntsler expected ‘long’ to be… or if he thought we roll down a hill slowly — then over a cliff…

              I wonder if this applies (with the obvious changes): ‘How did you go bankrupt? Two ways. Gradually, then suddenly.’ E. Hemingway.

            • I really liked “The Long Emergency” by Kunstler. His statement about not being able to have indoor plumbing if we couldn’t keep temperatures above 32 degrees made a big impression on me.

            • Lizzy says:

              Damn, Xabier, just when I was beginning to relax.

    • BC says:

      Well said, B9K9. I suspect Nature will win for 99%+ of us, but I also suspect the top 0.01-0.1% and a remnant of the next 0.9% managers/facilitators will somehow manage to create an Elysium-like existence for themselves at the expense of the rest of us.

  22. Rodster says:

    WELL, this should get rather interesting. Russia to build EIGHT nuclear power plants in Iran. I can’t wait to hear the US response to that. :D

    http://www.zerohedge.com/news/2014-05-22/hot-heels-its-china-breakthrough-russia-set-build-eight-nuclear-power-plants-iran

    • Rodster says:

      Anyone care to comment on these numbers? A 50 year supply does not sound like a whole lot of time in the grand scheme of things.

      ——————————————————————————————————–
      http://rt.com/business/161032-russia-china-gas-putin/

      Russia has more than the estimated 3 trillion cubic metres in natural gas reserves in its gasfields, enough to last for 50 years, Russia’s President has said commenting on the 30-year $400 billion gas deal with China.

      “This deal is for 30 years, while I think there’s enough supply for 50 years. They are underestimated. Extractable reserves at the two deposits that we would introduce – Kovykta and Chayanda – are 1.5 trillion cubic metres of natural gas reserves each. Which means in total there’s 3 trillion. In reality, I repeat, there’s more,” said President Vladimir Putin talking to the representatives of global businesses at the 18th International Economic Forum in St Petersburg.

      Commenting on the historic gas deal with China, Putin said Russia has abundant gas resources to supply not only China, but also the Russian provinces.

      “It’s very important for us. This project is multi-dimensional, because it gives us the opportunity… to develop the eastern provinces, to construct a branch gas supply system there,” Putin said.

    • edpell says:

      KSA has ordered 12 from Japan (ironic?). UAE one from Korea.

  23. B9K9 says:

    This essay by Paul Craig Roberts, titled “Militarist Bunkum”, was in my opinion his literary sine qua that encapsulates everything one needs to know & understand about the USA:

    http://www.paulcraigroberts.org/2014/05/19/militarist-bunkum-paul-craig-roberts/

    However, while I believed PCR had finally resolved himself to the truth to the American hologram, he comes back with this pitiful piece labeled “Justice is Dead in Amerika”:

    http://www.paulcraigroberts.org/2014/05/21/justice-dead-amerika/

    All I can conclude is that PCR, as a youth, so deeply imbibed in the propaganda about American ‘exceptionalism’ ie “honesty, truth, justice and the American way” that he simply cannot reconcile himself to the ultimate truth, even though just a few days before he had penned an excellent summary of the facts of the matter.

    (By the way, if one wants to understand why cops are allowed to terrorize the general public, it’s because the PTB understand that as long as the violence is less than that would be delivered by a foreign enemy, then it will be tolerated as the lesser of two evils. Besides, the thugs need an outlet – after all, that’s why they’re thugs – duh – so they need to periodically murder, main or otherwise toy with some unwitting innocent. I fault the parents of the dumb chick for not giving her a heads up on how the world works for realz.)

    I sort of feel sorry for guys like this, and thank my stars my father, the agency guy, told me what was what back in the day. Along with making me understand that the Cold War was nothing more than a jobs program – one that afforded me a very nice UMC upbringing in the incipient Silicon valley – his one mantra was “he who complains has already lost”.

    For those who are seemingly unable to grasp or comprehend what the USA is about, all you need to know is that both the Virgina & Massachusetts Bay companies, respectively, were joint stock companies that floated shares in London for the express purpose of developing exportable commodities (think: TOBACCO).

    From the very get-go, the colonial project was formed on a commercial premise designed to exploit the people, resources and environment of the N American continent. Perhaps the cleverest ruse of all time was to convince the working class, the peasants & peons from Europe, that they were of noble breed, and possessed doG given “natural rights”. LOL

    It’s this inability to think clearly, to understand the truth of the matter, than condemns people like PCR, and to some extent Paul, to a life consumed with unhappiness. If only PCR had been routed through the channels of power reserved for those who have to make the hard decisions, the ones who don’t need Wolfowitz to spell it out for them, who knew from history what their responsibilities are, then perhaps he would be singing a different tune.

    I really feel sort of sorry for these types – consumed by something they can’t quite put a finger on. All can advise is to just let it go – it’s always been this way since the first proto-human convinced his tribe that in exchange for his protection, he should have the best food & prettiest women, otherwise the other tribe(s) will kill them in their sleep. Fast forward a few million years or so, and we’re in the same exact boat.

    Remember, he who complains has already lost.

    • Paul says:

      I suspect very few Americans are psychopaths (Paul Roberts is clearly not)… i.e. they recognize that their way of life is contingent upon raping, pillaging, bullying and murdering the weak — and are quite happy with that — because it allows them to ‘live large’

      I think that the majority of Americans — IF – they knew the absolute truth about what America is all about would have mental breakdowns – or at least be addicted to Xanax – I doubt many would say ‘he who complains is lost’

      How do I know this?

      Because the American MSM runs in over-drive 24/7 telling Americans that they are the bastion of democracy in the world — a beacon of light – the world’s policeman etc etc etc…

      Because children from the time they can walk need to be indoctrinated with lies about their country – lies that are pounded into their heads day after day after day…

      Why is this necessary? Why not just tell them the truth — the US is a hegemonic beast — it will murder babies – drone innocents — steal resources – torture – support the most vile dictators — all in the name of them being able to ‘live large’

      Of course it is necessary because if most people knew the truth they would be absolutely incensed — and the Deep State would have a very hard time carrying out their evil acts if the masses did not support them.

      Of course if everyone were to have on their coast of arms ‘he who complains is lost’ throughout history we’d not have things such as minimum decent working standards — public education — clean water — habeas corpus – rule of law…. You know — all those little things that make life livable :)

      We’d all still be under the brutal boot of tyrants.

      And guess what — rather than getting your shot at Silicon Valley — you’d probably be grinding away 12 hours a day 7 days a week in some slave factory — paid a pittance — and risking life and limb because people failed to complain — people failed to stand against tyranny…

      But fortunately for you people did — they suffered – they died — and now you have your cushy life — and so do I.

      But as we can see in America — when apathy grabs hold — all those little pleasantries I mentioned get chipped away at …. unions get busted – jobs shipped overseas — your privacy rights are wiped out — habeas corpus comes under attack….

      And before you know it — your living under a tyrant — and your cushy life gets a little hot…

      I have my own coat of arms… (with all due respect) …

      He who fails to stand against tyranny — is already lost.

      Shall we end with a poem?

      First they came for the Socialists, and I did not speak out—
      Because I was not a Socialist.

      Then they came for the Trade Unionists, and I did not speak out—
      Because I was not a Trade Unionist.

      Then they came for the Jews, and I did not speak out—
      Because I was not a Jew.

      Then they came for me—and there was no one left to speak for me.

      • xabier says:

        Paul

        And then they came by for a drink,

        And I gave them one, and said:

        ‘That’s a nice uniform! May I join?’

        Which is the truth of much of the 20th century in Europe….

      • InAlaska says:

        How do you “stand against tyranny” in Bali? Or was it “run away from tyranny”?

        • Paul says:

          I came to Bali from Hong Kong running from the polluted air – after being involved in civic action to try to do something about that problem. Since I have options and I am not from HK – I exercised my options… when I determined nothing as going to change.

          How do I stand against tyranny from Bali — by exposing it on this and other sites — I also have some involvement with media and I put a fair bit of effort into exposing the situation through those relationships.

          The battle is won by creating awareness —and combating the MSM which supports tyranny — as we can see here http://www.informationclearinghouse.info/article38591.htm

          In the case of the US the battle is lost — it is a police state.

          Disagree? Organize a dozen people and go down to Wall St with placards protesting against corruption – let me know what a face full of pepper spray feels like — I understand it burns….


          http://www.youtube.com/watch?v=TZ05rWx1pig

          Make no mistake about it — a country whose government collects every correspondence of every single person — who violently oppresses peaceful protest ….well that is a police state.

          And it is one step from a totalitarian nightmare — what do you think would happen if thousands of people would have gathered to further protest those two incidents depicted above?

          You think they’d stop at a whack upside the head and a shot of cayenne?

          It is too late for America — the people have accepted the ratcheting up of the police/fascist state to the point where they have no recourse. You are all powerless – your reps are owned – they will not help you – you vote one out a clone replaces that person…

          And that is the problem — it is much more difficult (and deadly) to remove an established police state than it is to prevent the establishment of a police state.

          • jeremy890 says:

            Germany was a democracy too and had a civil society too. Of course, we know happened there

            • Paul says:

              Yes. And the Germans had plenty of warnings of what was to come and I am sure they were saying to themselves ‘that sort of thing can’t happen here – no need to be concerned’

  24. BC says:

    Gail and all, please see the following charts for an illustration of the effects of Peak Oil on the US industrial sector excluding mining and oil and gas extraction (XMOG):

    https://app.box.com/s/i5e769dr18htyqiln9a3
    https://app.box.com/s/tmpq2mwp4b8hnrcivccm
    https://app.box.com/s/wmlox22kdnanuyzqyxte
    https://app.box.com/s/sh73qoy9uar2aoeoz7ur

    US industrial production (IP) XMOG has fallen 20-25% since Peak Oil and is at the same level as 1998, and at 1993-95 in real per capita terms. Not surprisingly, this decline is occurring with the real, US$-adjusted price of oil (constant US$) at or above the levels of the early 1980s and the onset of the Great Recession in 2008.

    Neither the US industrial sector XMOG nor real final sales per capita overall can grow with the price of oil above $40-$50. Thus, the energy sector is growing at a net zero sum to the industrial sector and rest of the economy. This phenomenon is sometimes referred to as “Dutch Disease”.

    Most of the industrialized world is experiencing the same decline in IP XMOG as has the US since Peak Oil, and now so is China.

    Moreover, the surge–more than doubling–in US deep, tight, and tar oil and gas extraction since 2008 has resulted in the US drawing down on 35-40% of proved reserves. At this rate of extraction versus consumption, reserves, and exports, the US will have extracted an equivalent of 50% or more of reserves by as soon as 2017-19, i.e., “Seneca effect” or “Red Queen Race”.

    But already $100-$110 oil is increasing the cost of marginal extraction (reducing EROEI) at an accelerating rate, which implies the rate of growth of extraction has already peaked and will likely decelerate rapidly over the next 1-3 years, if not contract yoy during the period.

    Finally, total world petroleum extraction per capita peaked coincident with Peak Oil in 2005-08 and is down 2-3% since, in spite of trillions of dollars of investment in extraction, transport, and distribution since. Crude oil extraction per capita is down 6-7%.

    Thus, the world is now where the US was in the mid- to late 1970s in terms of oil extraction per capita, which implies that the exergetic log-limit bound implied by the LTG has occurred for the Oil Age epoch.

    • timl2k11 says:

      Thanks, BC. I appreciate this kind of factual analysis. The energy crash has already happened.
      Hadn’t heard of Dutch Disease, very interesting.
      It seems few people realize that GDP associated with energy production competes with other areas.
      A metric that indicates the surplus energy available to a country would be nice to have. Take our GDP, back out everything related to producing energy and procuring energy (energy bought with debt) and what’s left?

      • Paul says:

        Re : Dutch Disease — I think this book was the source for the following: http://whynationsfail.com/ (a fascinating read)

        In a nutshell the authors suggest the only countries that have not been ruined by resource discoveries are those that have strong democratic traditions — they mention Canada, Norway and Australia

        Weak nations without such traditions generally get over-run by foreign interests who attempt to destroy budding democracy and install compliant dictators who allow western corporations to rape the countries resources — of course the dictators are themselves enriched for selling out.

        The best examples of this are Iran — where the British and American governments overthrew the democratically elected Mossadegh because he tried to nationalize oil interests (BP of course monopolized oil while Iran was a british colony).

        Another excellent example of this is the Congo — when the new leader Lumumba attempted to realize mineral assets from the Katanga region — foreign powers including Belgium and the US — chose Sese Seko (remember him – the butcher…) to lead a secessionist movement in Katanga — ultimately Lumumba was captured and forced to eat the constitution — and killed…

        There is actual footage of the papers being jammed down his through in this excellent Canadian documentary – also a nice bit near the end where the CIA agent chuckles about all of this http://www.youtube.com/watch?v=HtzfCMHX1Yg

        The movie ‘Lumumba’ http://www.youtube.com/watch?v=Yyzmu3RbWpA is also good.

        The point being is that Dutch Disease is a problem — but it is made worse when outside forces corrupt the political process in resource rich nations — a few get wealthy — and the majority continue to live in squalor.

        You can also look at Nigeria — huge oil wealth — yet hell on earth for most people — and we wonder why we have terrorism….

        • jeremy890 says:

          Thank you for the film about Lumumba and his demise due to his political views and contrary to the imperialists Belgian and USA. Seemed to be a decent person. The Congo was a private “resource extraction bank” for the West and read a book regarding King Leopold and his “methods”.
          Very sad indeed. The CIA and Belgian officers were just following “orders” (sounds familiar) and the dirty tricks that were used makes me want the system to collapse.
          At the end the guy who helped burn the corpses chuckled at the thought that some think Lumumba may return, holding hsi two front teeth in his hand, saying “if he does he will missing these”. The old retired CIA agent had no problem with any of this…”one problem gone, on to the next problem”

          • Paul says:

            Psychopaths….

            My favourite in the documentary is when the current Belgian King makes his speech stating how Belgian was so kind to the Congolese helping them along — teaching them etc… — and asking them to carry on the good work started by Belgium…

            Lumumba was not supposed to speak — but he could not hold his tongue — and he lashed the King and the Belgians for the vile treatment of the people of the Congo — their murderous rampage chopping off hands and torturing on an industrial scale — camera pans to the King who appears rather unhappy about this…

            Recall towards the end the presenter asks the Belgian agent if he feels any remorse over killing Lumumba and he responds ‘No – he disrespected my king’

            Alex knew what to do about people like that http://www.britannica.com/EBchecked/topic/1932116/Alex-Boncayao-Brigade

    • I need to look at this issue some more. THanks for your charts and analysis.

    • Rodster says:

      Anyone care to comment on these numbers? A 50 year supply does not sound like a whole lot of time in the grand scheme of things.

      ——————————————————————————————————–
      http://rt.com/business/161032-russia-china-gas-putin/

      Russia has more than the estimated 3 trillion cubic metres in natural gas reserves in its gasfields, enough to last for 50 years, Russia’s President has said commenting on the 30-year $400 billion gas deal with China.

      “This deal is for 30 years, while I think there’s enough supply for 50 years. They are underestimated. Extractable reserves at the two deposits that we would introduce – Kovykta and Chayanda – are 1.5 trillion cubic metres of natural gas reserves each. Which means in total there’s 3 trillion. In reality, I repeat, there’s more,” said President Vladimir Putin talking to the representatives of global businesses at the 18th International Economic Forum in St Petersburg.

      Commenting on the historic gas deal with China, Putin said Russia has abundant gas resources to supply not only China, but also the Russian provinces.

      “It’s very important for us. This project is multi-dimensional, because it gives us the opportunity… to develop the eastern provinces, to construct a branch gas supply system there,” Putin said.

  25. Quitollis says:

    BBC news tonight, five minute feature on shale oil and gas, very heavily suggesting that it will not be viable _at all_, not merely briefly as in the US. Fault lines seem to be the problem. A report will be published tomorrow on the “potential” but it is emphasised that viability is another matter. Very strong underlying message: “We may not do shale at all.” (We saw a report published last week saying that the UK will run out of oil, coal and gas within five years, France within one.)

    Other news, UKIP and populists across Europe have changed the political landscape; Russia set off terror bombs in eastern Ukraine to try and disrupt upcoming elections. The world seems to be changing.

    • Paul says:

      This is rather bad news — the MSM exposing the shale oil lie — that could mean that speculators pull their money out and the whole business collapses…

      Something must be brewing — the elites went to such lengths to convince us that shale was the new saudi arabia — encouraged us to invest — and now they are going 180?

      Something seems not right…

      • Pete the bee says:

        California shale was never anything but a pipe dream. The Alaska shale will likely be fracked first. But the industry is swamped trying to ramp up the Eagle Ford, the Bakken, a few others.

        • Paul says:

          Shale oil is a ponzi scheme — it is not feasible — and it would not exist without QE ZIRP.

          There is a reason Big Oil is not participating.

          DREAM OF US OIL INDEPENDENCE SLAMS AGAINST SHALE COSTS
          The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems. Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html

          THE FRACKING PONZI SCHEME
          Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a “mini-bubble” is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled.” http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

          WHY AMERICA’S SHALE BOOM COULD END SOONER THAN YOU THINK
          http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/

          Shale Drillers Feast on Junk Debt to Stay on Treadmill
          http://www.bloomberg.com/news/2014-04-30/shale-drillers-feast-on-junk-debt-to-say-on-treadmill.html

          SCIENTISTS WARY OF SHALE OIL AND GAS AND U.S. ENERGY SALVATION
          “Tight oil is an important contributor to the U.S. energy supply, but its long-term sustainability is questionable. It should be not be viewed as a panacea for business as usual in future U.S. energy security planning.”
          http://www.sciencedaily.com/releases/2013/10/131028141516.htm

          U.S. SHALE OIL BOOM MAY NOT LAST AS FRACKIGN WELLS LACK STAYING POWER
          “I look at shale as more of a retirement party than a revolution,” says Art Berman, a petroleum geologist who spent 20 years with what was then Amoco and now runs his own firm, Labyrinth Consulting Services, in Sugar Land, Tex. “It’s the last gasp.”
          http://www.businessweek.com/articles/2013-10-10/u-dot-s-dot-shale-oil-boom-may-not-last-as-fracking-wells-lack-staying-power

          FRACKING WILL CREATE AN ECONOMIC CRISIS
          Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years. A report released in March by the Berlin-based Energy Watch Group (EWG) concluded that: “… world oil production has not increased anymore but has entered a plateau since about 2005.” Crude oil production was “already in slight decline since about 2008.” http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis

          • Pete the bee says:

            The big oil companies frack like crazy. Exxon, Conoco Phillips, Chesepeake.

            It is true the smaller companies have led the way, but that’s true of almost all innovative new technologies.

            There is massive investment in the Eagle Ford and Bakken right now, and even the fairly low-oil Marcellus is seeing steady drilling.

            Exxon overpaid to invest in the Barnett (which is both dry and distant from the lucrative east coast market). So what? It’s like the internet … some poor investments don’t mean the whole thing is a ponzi scheme. The reality is shale gas turns a profit right around $4.50 (which is, go figure, the current price for natural gas) and shale oil at around $70 (which explains why shale oil production is growing so rapidly).

            • Paul says:

              They did frack – but then they realized it was a ponze – and they exited – which is the smart thing to do when you find your self invested in a ponze rather than a legitimate opportunity – find another sucker and unload Chesapeake is not ‘Big Oil’ – it is a mickey mouse company when compared to the real players

              Does this sound like shale is viable?

              Shale Drillers Feast on Junk Debt to Stay on Treadmill
              http://www.bloomberg.com/news/2014-04-30/shale-drillers-feast-on-junk-debt-to-say-on-treadmill.html

              Independent US oil producers will spend $1.50 drilling for every dollar they get back.
              http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs.html

              What about the ‘100 years of oil – the new Saudi Arabia!’ blah blah —

              EIA cuts recoverable Monterey shale oil estimate by 96 pct
              http://www.reuters.com/article/2014/05/21/eia-monterey-shale-idUSL1N0O713N20140521

              When Exxon bought XTO – their market cap dropped by virtually the exact same amount of the purchase price within a week (40 billion or so) – the main reason cited by analysts was ‘hyped up data re: recoverable oil’ as in they had just bought themselves a lemon.

              There is no ‘100 years of oil’ — that is all spin – so that the guys who got in early could find suckers cash out on — a classic ponzi scheme if ever there was one.

              You may want to keep in mind that there was MASSIVE investment piling into the dotcom industry at one point — you may note that whats app sold for nearly 20 billion dollars – and it has virtually no revenue. The level of investment into something does not guarantee it is not a ponzi scheme — or a bubble — recall the money that went into housing in the US — recall what happened there…

              “Look Around the Poker Table; If You Can’t See the Sucker, You’re It”

            • Pete the bee says:

              Exxon is the biggest company in the world, they own a huge amount of shale gas wells in the Barnett and elsewhere, and they recently announced a massive investment in converting natural gas to plastic, a move that makes sense only if natural gas prices in the US remain below $7 or so. How does this jibe with your idea that the big players don’t believe in shale energy?

            • Paul says:

              You will not that the two key articles I referenced in Bloomberg deal with shale oil…

              The global economy does not run on gas – it runs on oil.

              No cheap oil – no civilization.

              The statements indicate “100 years of oil – the new Saudi Arabia” etc….

              That is a lie – it always was a lie – the shale players knew this from the get go.

              Recall the formula:

              – get in early
              – create a catchy story (i.e. a lie)
              – build the ponze
              – cash out on those believing the lie

            • Paul says:

              As posted by another contributor:

              Shakeout Threatens Shale Patch as Frackers Go for Broke

              “Interest expenses are rising,” said Virendra Chauhan, an oil analyst with Energy Aspects in London. “The risk for shale producers is that because of the production decline rates, you constantly have elevated capital expenditures.”

              Chauhan wrote a report last year titled “The Other Tale of Shale” that showed interest expenses are gobbling up a growing share of revenue at 35 companies he studied. Interest expense for the 61 companies examined by Bloomberg totalled almost $2 billion in the first quarter, 4.1 percent of revenue, up from 2.3 percent four years ago.

              http://www.bloomberg.com/news/2014-05-26/shakeout-threatens-shale-patch-as-frackers-go-for-broke.html

              Shale exists only because of QE and ZIRP – if rates were anything near normal – say 5% – this entire industry would not be happening – period.

              If I were a fund manager …. and I was in early on this bubble/ponzi scheme …. based on the info I am getting (the drumbeat is building to a crescendo on this scam)…. I’d be searching for the exit about now…. I’d be reminding myself of Stein’s Law….

      • InAlaska says:

        So the error in the narrative, the glitch in the matrix: if TPTB are so all powerful, why would the MSM be allowed to “expose the shale oil lie”? If this alleged Deep State thing is real, why would it tolerate deviation from the party line. What are the “elites” doing now? Could it be that no one is really in charge and everything, everywhere is managed by the seat of the pants? See this article: http://www.theguardian.com/news/oliver-burkeman-s-blog/2014/may/21/everyone-is-totally-just-winging-it.

        • InAlaska says:

          An excerpt from above article:
          “Institutions – from national newspapers to governments and politicial parties – invest an enormous amount of money and effort in denying this truth. The facades they maintain are crucial to their authority, and thus to their legitimacy and continued survival. We need them to appear ultra-competent, too, because we derive much psychological security from the belief that somewhere, in the highest echelons of society, there are some near-infallible adults in charge.

          In fact, though, everyone is totally just winging it.”

        • Christian says:

          Alaska, don’t misinterpret our position. It is not TPTB are willing to control everything, it’s not necessary. There are a lots of books and research describing their game and these have not (always) been chased after, because it is not needed cause media production overwhelms them. My father also worked for many years in the Argentinean information agency, and he always said US people are very naive and almost nobody in this planet gets the true.

          And regarding the exposure of the shale oil lie, I suppose the financial world need not to overinvest on this and realize it has to stop somewhere to save the system. Here we use to believe businesses must be enlarged all that is possible in order to maintain the Ponzi, wich is true within some limits. But if IMF-BIS are planning to rule without USD as the reserve then they need not to support US economy’s oddnesses such as fracking. If they are able to periodically reset currencies values at ease they’ll get a complete and direct control of all the world economy, and may thus let fall the fracking if it happens to be good for global numbers (because this would mean leveraging somebody else).

      • CTG says:

        Agree with you and have the same question – why lately the “elites” or MSM are doing the opposite of what they are suppose to do. I mean, come on, why

        1. Expose the shale write down at Monterrey?
        2. Why even allow voting in Ukraine ? What if the results are not suppose to be “good” for the elites?
        3. Why taper or announce tapering ? (although it mat just go through Belgium but that is besides the point)
        4. Why MSM allows coverage of stories by banks on potential drops in stock markets and that the market is critically “too expensive” ?

        We are already one snowflake away from a huge avalanche and those guys are spraying snow from the snow making machine ?

        Paul – are we missing something ?

        • Paul says:

          I think the reason we see snippets of ‘truths’ is because if they go whole hog on the lies then too many people will work out what is going on and collapse CONfidence.

          The New York Times invented this brilliant game. I used to subscribe the International edition for a few years… thinking this was a really good media source….

          But then as I came out of the matrix a number of years back I started to think more critically about articles in this paper. And I determined this was the formula:

          – from time to time drop in a story that questions the matrix — for example criticize heads of banks — that gets people believing ‘ya – the NYT is about truth – they will chase it down’

          – that establishes credibility — if its in the NYT it must be true — because I remember the time they wrote about ……

          – once you have that established then you can start to go to work dropping in the propaganda — and you can easily get people to believe even the biggest lies

          I can’t recall the specific story but I had my epiphany when the NYT was discussing some geopolitical issue where US behaviour was questioned (might have been Abu Graib – or Guantanamo) and a statement was made in the Op-Ed to the effect: this action is not acceptable but it is an anomaly and flies face of the fact that America has a extensive record of supporting and spreading democracy around the world’

          Most people – because the NYT ‘does not lie’ would not question that.

          I on the other hand thought hang on — I can’t think of a single instance where the US has supported democracy — in fact I can list dozens where they have overthrown democracies and instituted dictatorships.

          But of course most people do not question so they fail to connect the dots.

          So likewise with the issues you mention — the info is out there — it is certainly not screaming across the home pages of these sites — but it is there — and it is powerful — because by publishing a few truths here and there that means your lies become truths too.

          Powerful stuff — only the higher level media seem to need to do this — because they have a more highly educated readership — and it takes sophistication to fool them.

          FOX News, CNN etc… don’t need to do this….

          Let me leave the community with an actual example of this — the king of logic Glenn Greenwald exposes the game here http://www.informationclearinghouse.info/article38591.htm

          • CTG says:

            Hmm…hmmm… never thought about newspapers playing good-cop/bad-cop thing. I have not touched any newspapers for the last 15 years eversince I caught a few lying through the teeth. I just skimmed through the headlines at their online sites. That is why I could not understand why they are doing this.

            However, it seems that awareness is getting to the people and the games they play are really reaching the limit. Never have I known in history that we have so many fires (ecnonomic, political and geopolitical) that is burning so rapidly and so intesely in practically every corner of the world.

            Compared to our father’s and grandfather’s time, never have we been wading in so much debts (cars, houses, toys, etc). It is the same for every country in the world. When the banks go, the civilised world go…. (who has enough cash at home to buy food for 2 weeks? Everyone needs to go to the bank to withdraw money or borrow money…)

    • Interesting! I don’t expect to see that in the US any time too soon.

    • Stilgar Wilcox says:

      Going after shale oil is the last bastion between the oil age and whatever mayhem comes later. If you had a time machine in the future and went back to this time, you would know from history that if they are fracking to keep up oil production the end of the oil age is close at hand. If they were spending billions of dollars to build islands offshore of Saudia Arabia to drill for oil; if Petrobas was stymied as to how to drill offshore through subsalt at record depths under huge pressure; if oil workers in Kasagstan were risking death from poisonous gases from extremely dangerous over invested oil fields; if Mexico was considering having foreign companies come in to assist their production; if China was protecting an offshore drilling rig in another country’s waters with 80 ships; if Canada (which use to be considered environmentally conscious) was cooking oil sands with NG to coax out the oil even though it polluted their waters; if the UK was even considering fracking; if offshore drilling now included the Arctic; if Russia risked war to annex the Crimea for its offshore FF, you would know the end was nigh.

      • Paul says:

        Let’s picture a mouse in a jar of water — at first he stays afloat fairly easily — then he starts to tire and gasp (2001) — his head starts to go under (2008) — but in total desperation he struggles to the surface for a few final lungs full of C02 (fracking) —- then sinks below the surface emitting a few bubbles then dies (2015?)

        • Keep your eye on NYMEX WTI Crude @ 104, it’s creeping up towards ICE Brent @ 110.
          The US is absolutely finished beyond all recognition. If the US collapses then the UK/EU follows.

        • Stilgar Wilcox says:

          “Let’s picture a mouse in a jar of water — at first he stays afloat fairly easily”

          Great analogy, Paul. One I’d considered at one time, but with a person instead. I think that’s where we are now, but like the red queen we are working the frog stroke ever faster to stay in place. The acid building up in tired muscles is reflective of rising capex against slimmer profits. We fear going under soon due to diminishing returns, but keep borrowing and printing more to buy some temporary buoyancy. As oil becomes more scarce in relation to demand, price rises causing food prices to also spike, yet with wages not rising it’s like a weight belt has been tossed on, and with arms and legs akimbo, churning ever faster causing the water to froth, chaos from the starving ensues with the swimmer dipping below the surface, only to resurface later on the other side of a bottleneck with a few percentile others only to face the ravages of global warming’s momentous inertia.

            • Rodster says:

              Does LNG come from Fracking? I don’t know how LNG comes about and I wonder how much of Russia’s or the world’s supply of LNG comes from fracking?

            • Paul says:

              I believe most of the LNG supply is extracted without fracking – seems the US is the only country that is employing fracking on a wide scale.

            • Interguru says:

              I quote from Wikipedia :

              Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4) that has been converted to liquid form for ease of storage or transport.

              I does not matter whether the gas comes from fracking or more conventional well. natural gas is fungible. The issue is whether we should convert our gas to LNG and ship it overseas.

              Opposition comes from three quarters.

              1) Domestic users of gas ( chemical industry, utilities, etc ) do not want a new market for gas as it will compete with their uses and raise the price they have to pay.

              2) There are safety concerns with having large tanks and shipload of LNG in one place. Under proper conditions it is safe; but you can say the same about nuclear. There has been only one modern large scale accident, I refer you the the above Wikipedia article for a discussion.

              3) Liquefying gas and sending it abroad will encourage more fracking with its attendant environmental issues.

              A side comment on the economics. All prices are approximate.
              Right now the domestic price of nat. gas is about $4.60 ( per million Btu or per 1000 cubic feet — they are almost the same ). The production cost of fracked gas is $6-8 at the best estimate. This is why gas producers are going broke. Liquefying the gas would create a new market and keep them in business. It takes several years to build a new LNG terminal so this is not a quick solution. Investors are reluctant to commit several billion dollars betting on market conditions in the future.

              The cost of liquefying and shipping the gas is about $8 ( from memory ). Gas in Europe goes for about $9-12 and $17 in Japan. ( see http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy-2013/review-by-energy-type/natural-gas/natural-gas-prices.html) . This is why investors are holding back. It may or may not be profitable to liquify and ship the gas.

              The cry that we can supply Europe with LNG is defang Putin, who is one of Europe’s chief supplier is nonsense. It would take several years to build the LNG facilities and then all the gas would go to Japan where the price is higher.

              I have condensed a very complex issue. Please comment.

            • There are also environmental issues associated with LNG, because natural gas burns off, as the ship crosses the ocean, adding to climate change gases. Fracked natural gas is has escaping methane issues as well. The combination produces a gas with very bad climate change profile.

              I understand that it is fairly easy to “turn around” import terminals to become export terminals, so I expect that it will not take that many years to ramp up export capability. What I expect will be missing is all of the pressurized ships needed to send the LNG abroad. The farther they travel, the longer the ships will be tied up, and the more ships it will take. I don’t know where a person gets a count of those ships, but it would be hard to believe that there are a lot of extras lying around. I understand import terminals in Europe are underutilized, so that is probably not a big issue either.

              I doubt the US could ramp up natural gas production as much as needed. There would be huge pipelines investments needed as well. This is another bottleneck.

              Cost of LNG transport varies with the distance the LNG is transported. The gas first has to be transported by pipeline to the export terminal, then compressed, transported by ship, decompressed, and then transported by pipeline again. There are some LNG losses in this process. I am sure the transport cost is at least $4, but I don’t know how much more than this it is. I would like to see good figures on it.

      • I am afraid you are correct.

        • Rodster says:

          Gail, here’s a really good article that explains and shows why food prices are rising. If you guessed “Oil” you would be correct !

          “Why Are Food Prices so High? Because We’re Eating Oil”
          http://www.oftwominds.com/blogmay14/food-oil5-14.html

          • Paul says:

            Thanks for the link – there is no arguing with that chart…

          • Rodster says:

            My favorite part was this line:

            “In effect, the influences of monetary inflation and supply/demand show up in food via the price of oil. Until we stop eating oil (10 calories of fossil fuels are consumed to put one calorie of food on the table), oil is the master commodity in the cost of food.”

            • If we need to cook quite a bit of our food, it is possible that for a very long time, we have been using more than one calorie of energy for each calories we eat. Before Fossil fuels, it was biomass that we burned.

            • Rodster says:

              The really frustrating part in the equation is the ABSOLUTE WASTE OF ENERGY. It boggles the mind why someone wants to waste energy shipping garlic from China when it could be grown or sold locally. The same goes for oranges. I happen to live in Florida and I always try and buy from local farmers who sell Florida oranges instead of California oranges. It’s maddening the disregard for natural resources that we waste energy shipping products and items such long distances just for convenience sake and build into the just in time delivery system, grocers use.

            • interguru says:

              It is difficult to pick out the most wasteful use of energy — it is such a target rich environment. Here are two of my entries.

              Fiji Water — shipping drinking water halfway around the world.
              Slaughter chickens in the US, freezing them, shipping them to China for processing and then re-freezing them to ship back to the US (http://www.nytimes.com/2013/08/31/business/chinese-chicken-processors-are-cleared-to-ship-to-us.html?_r=0)

            • Rodster says:

              @interguru

              Wow !

            • interguru says:

              You cannot ignore water ( or the lack of it ) when looking at food prices. All the oil in the world cannot produce food if there is not water for the crops.

            • Rodster says:

              Clean water is being depleted at a faster rate than energy. I forget the number of gallons required in the fracking process, hundreds of millions? Someone had mentioned that at times there are several stages used to extract the gas from fracking wells.

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