Debt: Eight Reasons This Time is Different

In today’s world, we have a huge amount of debt outstanding. Academic researchers Carmen Reinhart and Kenneth Rogoff have become famous for their book This Time is Different: Eight Centuries of Financial Folly and their earlier paper This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. Their point, of course, is that the same thing happens over and over again. We can learn from past crises to solve our current problems.

Part of their story is of course correct. Governments have gotten themselves into problems with debt, time after time. This is happening again now. In fact, the same two authors recently prepared a working paper for the International Monetary Fund called Financial and Sovereign Debt Crises: Some Lessons Learned and Some Lessons Forgotten, talking about ideas such as governments inflating their way out of debt problems and pushing problems off to insurance companies and pension funds, through regulations requiring investment in certain securities.

Many seem to believe that if we worked our way out of debt problems in the past, we can do the same thing again. The same assets may have new owners, but everything will work together in the long run. Businesses will continue operating, and people will continue to have jobs. We may have to adjust monetary policy, or perhaps regulation of financial institutions, but that is about all.

I think this is where the story goes wrong. The situation we have now is very different, and far worse, than what happened in the past. We live in a much more tightly networked economy. This time, our problems are tied to the need for cheap, high quality energy products. The comfort we get from everything eventually working out in the past is false comfort.

If we look closely at the past, we see that in some cases the outcomes are not benign. There are situations where much of the population in an area died off. This die-off did not occur directly because of debt defaults. Instead, the same issues that gave rise to debt defaults, primarily diminishing returns with respect to food and other types of production, also led to die off. We are not necessarily exempt from these same kinds of problems in the future.

Why the Current Interest in Debt Levels and Interest Rates

The reason I bring up these issues is because the problem of too much world debt is now coming to the forefront. The Bank for International Settlements, which is the central bank for central banks, issued a report a week ago in which they said world debt levels are too high, and that continuing the current low interest rate policy has too many bad effects. Something needs to be done to normalize monetary policy.

Janet Yellen, Federal Reserve Chair, and Christine Lagarde, managing director or the International Monetary Fund, have also been making statements about the issue of how to fix our current economic problems (News Report; Video). There is the additional rather bizarre point that back in January, Lagarde used numerology to suggest that a major change in policy might be announced in 2014 (on July 20?), with the hope that the past “seven miserable years” can be followed by “seven strong years.” The IMF has talked in the past about using its special drawing rights (SDRs) as a sort of international currency. In this role, the SDRs could act as the world’s reserve currency, be used for issuing bonds, and be used for setting the prices of commodities such as gold and oil. Perhaps a variation on SDRs is what Lagarde has in mind.

So with this background, let’s get back to the main point of the post. How is this debt crisis, and the likely outcome, different from previous crises?

1. We live in a globalized economy. Any slip-up of a major economy would very much affect all of the other major economies.

Banks hold bonds of governments other than their own. If a major government fails to make good on its promises, it can affect other governments as well. Smaller countries, like Greece or Cyprus, can be bailed out or their problems worked around. But if the United States, or even Japan, should run into major difficulties, it would affect the world as a whole. See my post, Twelve Reasons Why Globalization is a Huge Problem.

2. Our problem now is not simply governmental debt; it is debt of many different types, affecting individuals and businesses of all kinds, as well as governments.

In the studies of historical debt by Reinhart and Rogoff, the focus is on governmental debt. Now there is much more debt, some through banks, some through bonds, and some through less traditional sources. There are also derivatives that are in some ways like debt. In particular, if there are sharp moves in interest rates, it is possible that some issuers of derivatives will find themselves in financial difficulty.

There are also promises that are in many ways like debt, but that technically aren’t guaranteed, because legislatures can change the promised benefits whenever they choose. Examples of these are our current Social Security program and Medicare benefits. Citizens depend on these programs, even if there is no promise that they will continue to exist in their current form. With all of these kinds of debt and quasi-debt, we have a much more complex situation than in the past.

3. Our economy is a self-organized system that has properties of its own, quite apart from the properties of the individual consumers, businesses, governments, and resources that make up the system. Circumstances now are such that the world economy could fail, even though this could not happen in the past.  

I recently wrote about the nature of a networked economy, in my post Why Standard Economic Models Don’t Work–Our Economy is a Network. In that post, I represented our networked economy as being somewhat like this dome that can be built with wooden sticks.

Figure 1. Dome constructed using Leonardo Sticks

Figure 1. Dome constructed using Leonardo Sticks

Years ago, when a civilization collapsed, the network of connections was not as dense as it is today. Most food was not dependent on long supply chains, and quite a bit of manufacturing was done locally. If one economy collapsed, even a fairly large one like the Weimar Republic of Germany, the rest of the world was not terribly dependent on it. Figuratively, the “hole” in the dome could mend, and over time, the economy could strengthen and go on as before. We cannot count on this situation today, however.

4. Fossil fuels (coal, oil and natural gas) available today are what enable tighter connections than in the past, and also add vulnerabilities.

Early economies relied mainly on the sun’s energy to grow food, gravity to help with irrigation, human energy and animal energy for transport and food growing, wind energy to power ships and wooden windmills, and water energy to operate water wheels. Wood was used for many purposes, including heating homes, cooking, and making charcoal to provide the heat needed to smelt metals and make glass.

In the past two hundred years we have added fossil fuels to our list of fuels. This has allowed us to make metals in quantity, as well as concrete and glass in quantity, enabling the development of much technology. The use of coal enabled the building of hydroelectric dams as well as electrical transmission lines, thus enabling widespread use of electricity. Fossil fuels enabled other modern fuels as well, including nuclear energy, and the manufacture of what we today call “renewable energy,” including today’s wind turbines and solar PV.

Of the fossil fuels, oil has been especially important. Oil is particularly good as a transport fuel, because it is easily transported and very energy dense. With the use of oil, transport by smaller vehicles such as cars, trucks and airplanes became possible, and transport by ship and by rail was improved. Such changes allowed international businesses to grow and international trade to flourish. Economies were able to grow much more rapidly than in the pre-fossil fuel era. Governments became richer and began offering education to all, paved roads, and benefits such as unemployment insurance, health care programs, and pensions for the elderly.

Thus, fossil fuels enable a very different lifestyle, and very different governments and government programs than existed prior to fossil fuels. If something were to happen to all fossil fuels, or even just oil, most businesses would have to cease operation. Governments could not collect enough taxes to continue functioning. Very few farmers would be able to produce food and transport it to market, because oil is used to transport seeds to farmers, to operate machinery, to operate irrigation equipment, to transport soil amendments, and to create herbicides and pesticides.

This situation now is very different from the past, when most food was produced using human and animal labor, and transport was often by a cart pulled by an animal. Before fossil fuels, even if governments collapsed and most people died off, the remaining people could continue growing food, gathering water, and going about their own lives. If we were to lose oil, or oil plus electricity (because oil is required to maintain electric transmission and because businesses tend to close when they are missing either oil or electricity), we would have a much harder time. Most of our jobs would disappear. Banks wouldn’t be able to operate. Our water and sewer systems would stop working. We would find it necessary to “start over,” in a very different way.

5. Because of the big role of debt today, economic growth is essential to keeping the current economic system operating. 

It is much easier to pay back debt with interest when an economy is growing than when it is shrinking, because when an economy is shrinking, people are losing their jobs. Even if only, say, 10% lose their jobs, this loss of jobs creates many loan defaults. Banks are likely to find themselves in a precarious position and are likely to cut back on lending to others, making the situation worse.

If the economy starts shrinking, businesses will also have difficulty. They have fixed costs, including rent, management salaries, and their own debt repayments. These costs tend to stay the same, even if total revenue shrinks because of an economic slowdown. Because of these problems, businesses are also likely to find it increasingly difficult to pay back their own debt in a recession. They are likely to find it necessary to lay off workers, making the recession worse.

If economic growth is very low, this lack of growth can to some extent be covered up with very low interest rates. But such very low interest rates tend to be a problem as well, because they encourage asset bubbles of many sorts, such as the current run-up in stock market prices. It is not always clear which bubbles are being run up by low interest rates, either. For example, it is quite possible that the recent run-up in US oil extraction (see Figure 4, below) is being enabled by ultra-low interest rates debt (since this is a cash-flow negative business) and by investors who a desperate for an investment that might yield a slightly higher yield than current low bond yields.

Actually, the current need for growth to prevent defaults is not all that different from the situation in the past 800 years. In Reinhardt and Rogoff’s academic paper mentioned above, the authors remark, “It is notable that the non-defaulters, by and large, are all hugely successful growth stories.” Reinhardt and Rogoff didn’t seem to understand why this occurred, however.

6. The underlying reason regarding why we are headed toward debt problems is different from in the past. We now are dependent both on oil products and electricity, two very concentrated carriers of energy, instead of the more diffuse energy types used in the past. Our problem is that these energy carriers are becoming high-cost to produce. It is these high costs (a reflection of diminishing returns) that lead to economic contraction. 

This time, in order to continue economic growth, we need a growing supply of very high-quality energy products, namely oil products and non-intermittent electricity, to support the economy that we have built. These products need to be low-priced, if customers are to afford them. Thus, it should not be surprising that economic growth in the past seems to have been driven by a combination of (1) falling prices of electricity as we learned to more efficiently produce it, and (2) continued low prices for oil.

Figure 2.  Electricity prices and electrical demand, USA 1900 - 1998 from Ayres Warr paper.

Figure 2. Electricity prices and electrical demand, USA 1900 – 1998 from Accounting for Growth, the Role of Physical Work by Robert Ayres and Benjamin Warr, Structural Change and Economic Dynamics, February, 2004).

According to Ayres and Warr (Figure 2), power stations in 1900 converted only 4% of the potential energy in coal to electricity, but by 2000, the conversion efficiency was raised to 35%. This improvement in efficiency allowed the continuing decrease in electricity prices. With lower prices, more individuals and businesses were able to afford electricity, and more technology using electricity became feasible. Cheap electricity allowed goods to be produced at prices that workers could afford, and the system tended to grow.

For oil, the price of oil remained relatively flat in inflation-adjusted terms for a very long time, even as engineers developed ever-more-efficient devices to use that oil.

Figure 3. Historical oil prices in 2012 dollars, based on BP Statistical Review of World Energy 2013 data. (2013 included as well, from EIA data.)

Figure 3. Historical oil prices in 2012 dollars, based on BP Statistical Review of World Energy 2013 data. (2013 included as well, from EIA data.)

We ran into our initial problems extracting oil cheaply in the early 1970s, after US oil production started to decline (Figure 4).

Figure 4. US crude oil production split between tight oil (from shale formations), Alaska, and all other, based on EIA data. Shale is from  AEO 2014 Early Release Overview.

Figure 4. US crude oil production split between tight oil (from shale formations), Alaska, and all other, based on EIA data. Shale is from AEO 2014 Early Release Overview.

Back in the 1970s, we were able to work around the price spike by bringing oil production online in several additional places, including the Alaska, the North Sea, and Mexico. Unfortunately, those areas are now declining as well. Thus, we are increasingly forced to extract oil from areas that are high priced either (a) because of  high extraction costs (such as the tight oil now being extracted in the United States) or (b) because of high indirect costs (such as the need for desalination plants and food subsidies in the Middle East). These can only be funded if oil prices are high, allowing governments to collect high levels of taxes.

There is considerable evidence that high oil prices are associated with recession. The Great Recession of 2007-2009 was associated with a huge spike in oil prices. I have written about the way high oil prices contribute to recession in a peer-reviewed article published in the journal Energy called Oil Supply Limits and the Continuing Financial Crisis. James Hamilton has shown that has shown that 10 out of 11 US recessions since World War II were associated with oil price spikes. Hamilton also showed that the effects of the oil price spike were sufficient to cause the recession of that began in late 2007.

Now the cost of oil production is high, and electricity prices have stopped falling. We read U. S. electricity prices may be going up for good, from the L. A. Times. It should be no surprise that economic growth is now a problem.

7. In historical periods, defaults were mostly associated with the transfer of ownership of various productive assets (such as land and factories) from one owner to another. Now, we are vulnerable to changes that could ultimately cut off oil and electricity, and thus bring the system down–not just transfer ownership. 

The kinds of things that could bring the system down are diverse. They include:

  • War in the Middle East that would vastly disrupt oil exports. We do not have alternative suppliers–the world would have to do without part of its supplies. We are vulnerable now, because oil exporters are getting “squeezed” by prices that have not risen substantially since 2011. This makes it harder for Middle Eastern countries to fund their budgets, making wars and civil disorder more likely.
  • A spike in oil prices, perhaps caused by a war in the Middle East, that would vastly disrupt oil exports. Oil importing countries would head back into recession, with many layoffs. Governments are in worse shape for fighting this situation than they were in 2007-2008.
  • An increase in interest rates. While Quantitative Easing and Zero Interest rate policy may not look like they are doing much, an increase in interest rates would not work well at all. With higher interest rates, governments would owe more in interest payments, so would need to raise taxes (leading to recessionary effects). The monthly payments required for buying high-priced goods (from cars, to houses, to factories) would rise, cutting back on demand, also tending to lead to recession.
  • A decrease in lending, or even a failure of debt to keep rising, would also be a problem. Janet Yellen’s recent IMF speech highlighted the possibility of using regulation to prevent excessive debt. Unfortunately, increasing debt is very much needed to keep oil prices high enough to enable extraction at today’s high cost levels. See my post The Connection Between Oil Prices, Debt Levels, and Interest Rates. If debt levels drop, we run the danger of oil prices dropping as dramatically as they did in late 2008, when lending froze up.
Figure 5. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

Figure 5. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.

8. The world is now filled with a large number of people in powerful positions who mistakenly think they know answers to questions, when they really do not. The problem is that researchers tend operate in subject-matter “silos.” They build models based on their narrow understanding of a problem. These models may temporarily work, but as we reach limits in a finite world, these models produce misleading results. The users of these models do not understand the problem and make decisions based on badly flawed models.

Economists do not understand energy issues. They seem to think that their models, which ignore energy issues, are fine. All they need to do is fine-tune regulation, or tweak interest rates, and everything will be fine. Unfortunately, these economic models no longer work, as I explained in a recent post, Why Standard Economic Models Don’t Work–Our Economy is a Network.

In fact, the issue is more basic than just bad models that economists are using. The whole “peer-reviewed paper” system, with its pressure to write more peer-reviewed papers, each resting on prior peer-reviewed papers, is flawed. Models are built and used endlessly, in part because that is the way things have been done in the past. Once an approach is used frequently, everyone assumes it is correct. Models can and do have short term-predictive power, but that fact does not mean that the approach works for the long term.

The problem we are running into is the fact the world is finite. Growth can’t continue indefinitely. The way that the physical world enforces the end to growth is not obvious, until we start hitting the limits. The limits are cost of production limits for oil and for our supply of stable grid electricity. (I have talked about selling prices, but selling prices are not really the limits, in themselves. It is the fact that with higher costs of production, either selling prices must go up, or profits and the ability to invest in new production must go down–that is the problem. Right now, the rising cost of production of oil is being hidden in prices that are too low for oil producers. So many assume we don’t have a problem. The issue of adequate government funding is also mixed into the price/cost of production issue.)

Models that are no longer correct fill every area of study, from actuarial models, to financial planning models, to economic models, to models forecasting future oil and gas production, to climate change models.

Some models are deceptively simple–the idea that the number of years of future production of oil (or gas or coal) can be estimated by [Amount of Resources / Current Annual Production] is a simple model. Unfortunately, this model doesn’t work, because we can never get enough investment capital to extract all of the fossil fuel that seems to be available–the price can never go high enough, and stay high enough. High prices simply bring on recession. See my post, IEA Investment Report – What is Right; What is Wrong.

In fact, it is pretty hard to find any model that continues to work, as we reach limits in a finite world. This is not intuitively obvious. If a model worked before, why wouldn’t it work now? Researchers and well-meaning leaders follow models that sort of worked in the past, but don’t really model the current situation. Thus, we have well-meaning leaders, doing their best to make things better, inadvertently making things worse. In a finite world, everything is “connected” to everything else, so things that look beneficial from one perspective can have a bad outcome viewed another way. For example, a reduction in carbon dioxide emissions from closing coal plants risks major electrical outages is New England and seems likely to raise electricity prices. Such changes push the economy toward recession, and perhaps ultimately toward collapse.

Governments are one area squeezed by higher oil and electricity costs. As governments cut back, whether these cut backs are in education, unemployment benefits, military spending, or healthcare spending, there are indirect effects on the economy as a whole. The problem is that government spending creates jobs. As government spending is cut, it pushes the economy toward contraction–even if part of today’s spending is clearly wasteful. It creates a conundrum–fixing one problem makes another problem worse.


We live in perilous times. We have leaders who think they know the answers but, in fact, they do not. The debt problems we face now are not just overspending problems; they are signs that we are reaching limits of a finite world. World leaders do not seem to understand this connection. It is not even clear that they understand the connection of debt problems to the need for cheap-to-produce, high-quality energy products.

World leaders are nevertheless convinced that they know the answers, based on complex, but very flawed, models. Unfortunately, actions taken based on these models have a good chance of making the situation worse rather than better. For example, trying to tie a world economy closer together, when it is already heading toward collapse, seems like a recipe for disaster.

I find Christine Lagarde’s use of numerology in her January 14, 2014 speech at the National Press Club Luncheon disturbing. Is she trying to signal some “in crowd” to make different decisions, in advance of a big IMF announcement? Or is numerology being used for prediction? Such an approach to forecasting would seem to be even worse than using models based on silos of limited understanding.

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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878 Responses to Debt: Eight Reasons This Time is Different

  1. Don Stewart says:

    Dear Gail and All
    There are periodically arguments about religion and God here. I don’t personally find the arguments very interesting or persuasive, for reasons I will try to explain. Frank Wilczek, the Nobel Prize winning physicist at MIT, and former Roman Catholic, has gathered some English Language articles at his website:

    The lead article deals with the origins of natural languages such as English, and the difficulties we run into when we try to use them to talk about the real world…which doesn’t match our preconceptions and thus our language. Whatever preconceptions the ancients had when they talked about ‘God’ were pretty wildly wrong….with the possible exception of the Pythagoreans. The Pythagoreans may have been wrong…but usefully wrong. But most of us have constructed a ‘God’ in our own self image, which turns our to involve a lot of errors. (At least mine has errors…you might have it exactly right, for all I know.)

    I won’t embarrass myself by trying to talk in either the mathematics of physics or stumble around too much trying to force fit English into describing it. If you are interested, following is a teaser quote. You can explore Wilczek’s essays on your own.

    Since we talk a lot here about energy, I will just add this quote from Wilczek’s book The Lightness of Being:

    ‘A central theme of this book is that the ancient contrast between celestial light and earthy matter has been transcended. In modern physics, there’s only one thing, and it’s more like the traditional idea of light than the traditional idea of matter’. So is everything energy?

    Don Stewart

    The understanding of the origin of mass that I’ve sketched
    for you here is the most perfect realization we have of
    Pythagoras’ inspiring vision that the world can be built up
    from concepts, algorithms, and numbers. Mass, a seemingly irreducible property of matter, and a byword for its resistance to change and sluggishness, turns out to reflect a harmonious interplay of symmetry, uncertainty, and energy. Using these concepts, and the algorithms they suggest, pure computation outputs the numerical values of the masses of particles we observe.

    Still, as I’ve already mentioned, our understanding of the origin of mass is by no means complete. We have achieved a beautiful and profound understanding of the origin of most of the mass of ordinary matter, but not of all of it. The value of the electron mass, in particular, remains deeply mysterious even in our most advanced speculations about unification and string theory. And ordinary matter, we have recently learned, supplies only a small fraction of mass in the Universe as a whole. More beautiful and profound revelations surely await discovery. We continue to search for concepts and theories that will allow us to understand the origin of mass in all its forms, by unveiling more of Nature’s hidden symmetries.

    • tmsr says:

      Yes, everything is energy. Matter is precipitated energy. Just a different form or energy. On the other hand energy is just energy but matter has various other properties (quantum numbers) like electric charge, color charge, lepton type, etc…

      • Dave Ranning says:

        Ok- what about time?
        General Relativity, with its Block Universe model says it doesn’t exist.
        Thermodynamics says it does.
        Is this a local event, or are we really missing something?

    • edpell says:


  2. william dunn says:

    Paul- you should check the international aviation site – that will really help – gives a ten day history of flightpaths of almost every commercial flight

  3. Don Stewart says:

    Dear Gail and All

    Here is a short video with some ideas about healthy brains from a psychologist. I am giving you the link because depression and stress are known to reduce one’s ability to think innovatively to solve problems…and are occupational hazards of Limits to Growth students. The talk is aimed at therapists, but it is general enough for anyone to get something out of. Please also note that I am just passing along a link….definitely not practicing medicine.

    The big things i get are:
    Challenge the brain with new learning
    Aerobic exercise
    Weight training
    Avoid reinforcing negative learning

    I am a little surprised that social contact isn’t on the list. Some people would add biophilia practice (aka a walk in the woods). My own opinion is that an hour spent walking in the woods by a stream is worth at least two hours walking a track or treadmill in a gym.

    ‘ I’m sending you this list of 7 fundamentals of brain change.’

    You will have to give your name and email address. You will then be on her mailing list. She is not intrusive, but eventually she will have something that requires a payment, such as a series of speakers.

    Don Stewart
    PS I hope that the link embedded in the words ‘this list’ make it through the sieves.

  4. Paul says:

    Salmond’s oil strategy in tatters as North Sea drilling slumps

    Five-fold increase in costs slashes North Sea drilling in a further blow to Alex Salmond’s Scottish independence campaign

    Alex Salmond’s strategy of placing oil at the centre of his economic plan for an independent Scotland was shattered yesterday as it emerged that drilling of new wells in the North Sea has plummeted.

    The latest study from Deloitte has shown that exploration drilling in the area known as the UK Continental Shelf (UKCS) fell by 58pc in the second quarter, with just seven new wells sunk compared to 17 wells in the same period a year earlier.

    The cost of extracting oil in North Sea has quintupled over the last decade discouraging companies from increasing their investments. The findings come as the Government prepares to review tax policies in the North Sea to help stimulate interest as international oil companies push for greater incentives to drill.

    The Office for Budget Responsibility has recently lowered its projections for North Sea revenues by a quarter, the equivalent to £21bn less revenue over the next 26 years.

    “It’s no secret that the costs facing oil and gas firms on the UKCS have been a significant issue for some time now. Understandably, it tends to be more expensive to operate in mature fields where oil is much more difficult to recover. Research suggests it’s now almost five times more expensive to extract a barrel of oil from the North Sea than it was in 2001,” said Derek Henderson, senior partner in Deloitte’s Aberdeen office.

    • B9K9 says:

      As usual, follow the money; or, it’s all about the dollar.

      Staying under the umbrella of the dollar reserve system, with the coordinated ability of CBs to print money to pay for social programs, keeps the masses under wrap. Sheltering under the US/NATO military shield, which (en)forces countries to use the dollar system, allows elites to pilfer as much loot as they can during the interregnum.

      The dollar is the only thing holding this game together. I really wonder if the West’s technological advantage lends itself to a truly effective ABM system. When push comes to shove, it may be necessary to initiate a 1st strike to knock out the USA’s last remaining obstacle in keeping the dollar alive for a few more generations.

      • Christian says:

        “keeping the dollar alive for a few more generations”

        LOL. It’s difficult that any existing currency would find the way to hold on for less than one generation.

      • Paul says:

        I am now 99.9% certain that the US was behind that shoot down. I posted a few things on a UK message board at 8am my morning and within seconds the trolls were out trying to shoot me down. It is the middle of the night in the UK and there were many hundreds of comments on the story — so rather strange that within seconds I was being called a tin hatter etc etc etc… As we know – the UK intelligence services have a division that trolls messages boards engaging in activities to discredit people who post facts…

        Which leads me to believe that you are correct — first the US supported puppet/terrorist ‘rebels’ gassed women and children in Syria and Assad was blamed — then the US puppet in Ukraine is ordered to take down a plane and Putin gets the blame >>>> the US is truly desperate — China, Russia, BRICS appear entrenched in their position that the USD is done…

        Something has to give — will the cornered rat launch a first strike against Russia (China?)

        A very dangerous situation we have here — far more dangerous than the cold war — because the US empire is under serious threat.

        • InAlaska says:

          “I am now 99.9% certain that the US was behind that shoot down.”

          BULLS**T What kind of weed are you smoking down there in Bali, Paul.

          • Paul says:

            And the next thing you know Seymour Hersh will expose the US LIE in Ukraine — and the western press will again not publish another story that should get him yet another Pulitzer.

            This is the article he wrote exposing the US LIE in Syria – which you will not be aware of because the WHORES — I mean the western press — will not publish this:


            Pulitzer Prize-winning investigative journalist Seymour Hersh has published an article demonstrating that the US government and President Barack Obama knowingly lied when they claimed that the Syrian government had carried out a sarin gas attack on insurgent-held areas last August. Hersh’s detailed account, based on information provided by current and former US intelligence and military officials, was published Sunday in the London Review of Books. The article, entitled “Whose sarin?,” exposes as a calculated fraud the propaganda churned out day after day by the administration and uncritically repeated by the media for a period of several weeks to provide a pretext for a military attack on the regime of Syrian President Bashar al-Assad

            Of course if they publish that it opens a can of worms — the US is arming Al Qaeda/ Al Nusra (ya those guys who eat the hearts of Assad’s soldiers) — so if the CW came from the rebels then ….. well you see where this goes … and you see why the US is killing the Hersh story at the highest level.

            Now if you really want to go down the rabbit hole see these two images:

            Then do some google image searches related to this and you will see Ukrainian passports and all sorts of other documentation that would appear to support the false flag.

            How low can a country go? Gas women and children… shoot down airliners…. murder 500,000 babies and children … how many hundreds of thousands are dead and maimed over the WMD lie in Iraq… how many Vietnamese were murdered and how many deformed babies are born because of CW used in that war?

            What would it take to get Americans to recognize that they are lead by what most religions would refer to as devils?

            The power of spin is truly awe-inspiring — tell people America stands for good enough times and they actually believe it.

            USA USA USA! CNN CNN CNN!

            • Paul says:

              “Oh, yeah, and I forgot the other big lie. That the US invaded Iraq for the oil. Well, the US voluntarily left Iraq and without the oil, too. Hmmm, these theories are so compelling. If only the would bear fruit once in awhile.”

              I always understood the ‘other big lie’ to be that the US invaded Iraq over non-existent WMD.

              As for Iraqi oil — the point was not to steal their oil — it was to get the oil onto the global market without Saddam being able to leverage his few million barrels a day to get his way in the region.

              That said American companies particularly Haliburton did very well from that war … Other NATO countries who played ball all did very well with their oil majors taking big hunks of the spoils

              If you want a parallel see Russia — they have the ability to hugely influence Europe because they can simply threaten to cut off gas supplies.

              The US (and the EU) don’t like that situation of course — but there is very little they can do about it because Putin is armed to the teeth.

              Sure the US can foment unrest on the door step of Russia (Ukraine) … but Putin is not Saddam – he will not easily be unseated.

          • Paul says:

            A traitor to your country? America?

            The country that pepper sprays peaceful protestors…. that has stockpiled nearly 2 billion bullets — many sniper rounds — that are to be used against its people — that is rife with corruption from top to bottom — that is not democratic rather is run by the deep state — i.e. fascist type corporate elements see

            Sounds to me like the leadership of America is the traitor.

            And the people of America are mostly defending the traitors. The sheep have unlatched the door and invited the wolves in amongst them.

            Of course if one speaks of this the NSA is recording every bit of what you say and write — and at some point they WILL come for you — because tyranny does not accept dissent.

            The funny thing is that in many instances where tyranny has grabbed hold — it was welcomed … and by the time it showed it’s real face … it was too late to do anything about it.. because at that point even a whisper of dissent will get you sent to the dungeons and torture chambers.

            • Paul says:

              Herbert – yes that was my understanding as well — someone recently posted a link to a report published by the Guardian that indicated that Saddam was unseated because he could hold the world hostage by denying oil.

              Perhaps the two issues are related…

              At the end of the day the take away from that war is that the US Deep State DID use a false flag (faking WMD) — and they DID use this as a pretext to invade a country ILLEGALLY and murder tens if not hundreds of thousands – leaving behind what is effectively a failed state where millions live lives of hell.

              If the US was behind the shooting down of the airliner in Ukraine … a few hundred people are dead…. big bloody deal … that’s like a flea on the back of an elephant … when compared to what the US did in Iraq.

              it is standard operating procedure for the CIA to use false flags and other dirty tricks — when you catch yourself believing the utter utter propaganda that spews 24/7 from the likes of CNN (I am in an airport lounge writing this with CNN blaring in front of me — I had to ask the manager to flip to something else before my head explodes!)…

              REMEMBER — the US used the mother of all false flags as a pre-text to invade Iraq and destroy an entire country.

              Might I suggest the best way to get an idea of what is truly happening in the world is to watch 1. 2. BBC or any other pro-US media 3. CCTV China English. That gives you the perspective of each of the major players (Russia, China, US) — then you try to determine where the truth lies.

              Listening to only one side of any story will absolutely not get you anywhere near the truth.

            • hebertmw says:


              I thought Saddam was going to sell oil in another currency than the dollar, which is what Libya was going to do.

              THAT is what got them in trouble. When Saudi Arabia can’t exchange their dollars for gold they will do the same thing. THAT will make things very interesting.

          • Paul says:

            Smoking weed in Bali will get you 6 months in jail minimum with a huge bribe required.

            Who better than to ask about what happened with this airliner than the ultimate insider — Wall St Journal Editor and high level Reagan official — Paul Roberts:


            And he is DEAD ON when he calls the western press Whores – I would go further – they are AIDS, syphilis and gonorrhea ridden whores — with rotting teeth.

            • InAlaska says:

              Oh, yeah, and I forgot the other big lie. That the US invaded Iraq for the oil. Well, the US voluntarily left Iraq and without the oil, too. Hmmm, these theories are so compelling. If only the would bear fruit once in awhile.

          • B9K9 says:

            I’ve come to the conclusion that you are on the wrong board. It appears you’re not mercenary enough to be a troll, so I suspect you might actually believe what you’re posting. If so, LOL or, it sucks to be you. Secondly, Huffington Post or some other left leaning forum would probably be much more to your liking.

            I am in agreement with Paul – dollars to donuts, the CIA was behind the shoot down. The only difference is that I think it’s entirely practical and logical. Paul, OTOH, still has some deep seated psychological reasons why he opposes/abhors a superior, stronger state. Let’s say the USA’s ABM system is effective to the point of reducing retaliatory strikes to a minimum. Paul, of course, will go ape-shit that the evil empire has once again triumphed. It wouldn’t be implausible to see the DOW shoot above 25,000. What are all the ankle biters going to do?

            The thing to to remember that there isn’t a person alive today who should really be here. It’s all an illusion provided by 200 million years of stored solar energy contained in our very obedient energy slaves. 100-150 years ago, our ancestors should have died due to resource constraints and population overshoot. The boys & girls running these operations know the score. There’s no distinction whether 6 billion should die, or whether they shouldn’t have been born in the first place.

            When you have everything, the only thing to do is play chess on a global scale to stave off boredom. Johnson nailed, as Boswell recounted. (Anyone read Boswell’s diary published a few centuries after his death? Debauchery on a grand level denied and suppressed today to the masses under the cover of religious piety. But the elites of course aren’t bound by societal conventions. LOL)

            • Paul says:

              I understand your position however what I wonder is do you ever draw the line — or should we just stand back and accept any atrocity because ‘might is right’

              Was it ok that Hitler gassed millions?

              What if the US decides that they want to hit Russia with a first strike and they incinerate tens of millions?

              What if Israel decides that the best way to deal with the pesky Palestinians is to simply murder every last one of them using chemical weapons?

              And what about when the US Deep State decides it is in their interests to roll out the totalitarian nightmare that they are clearly building up to?

              Do we always simply let them do as they want?

              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.

              These people have no affinity for nation — they would slaughter each other in a heart beat — their only allegiance is to money and power.

              Make no mistake — they will eventually come for you.

            • InAlaska says:

              Yeah, they’ll come for you eventually, especially if you’re a traitor to your country.

            • Mjx says:

              Boy, thanks for the tip about Johnson, that was real fun to rewad about that clap, i mean chap:

              To give an idea of his sexual activities: between the ages of 20 and 29, he slept with three married gentlewomen, four actresses, managed a fling with Rousseau’s mistress, kept three mistresses and had connections with at least 60 streetwalkers. His sexual appetite was uncommonly large and his friends tended to regard his frequent infections as something of a joke.

            • InAlaska says:

              You’re so smug in your certainty. I’m in awe of your deductive powers.

    • xabier says:


      Slippery Salmond is also planning expropriation of private land as a populist policy – we of course are all familiar with the vast number of Scots starving for want of vegetable plots, so it’s urgently needed….

      Of course, if he did actually want to give a garden to every Scot as a hedge against collapse it would be interesting, but I suspect that is far from his mind.

      • Paul says:

        Right — however the point here is that shale oil is barely able to make up for the drops in conventional oil production as the big fields around the world peak…

        At some shale will not be able to offset that losses — and that may happen well before shale itself peaks — based on what is happening to North Sea, Alaska, Ghawar etc…

  5. Stefeun says:

    Australian bill sees whistleblowing on intel ops punishable by up to 10 years in jail

    sounds like a test before implementing everywhere.

  6. VPK says:

    For those than have not prepared for a food shortage, I recommend buying a new product by the Knorr group under Unilever called “Rice Sides”. Net weight is about 6 oz per package and has 2.5 servings that will consists of about 700 calories per packet. They come in many flavors, such as, Cheddar Broccoli, Mexican, Spanish, Chicken flavors. I have tried them and well worth the price on sale. the cheapest price i saw them for is a dollar, but I imagine one could half that price at wholesale.
    Seems to me these could last in a cool dark place for YEARS.
    Also, the convenient packet will be handy if on wishes to use them as a trade item in barter.
    Naturally, if one stores bulk rice and noodles these will go a long way further from making dinner boring.
    I believe people will still be conditioned to value “flavors” in their dishes after the immediate fall.
    Happy eating.

  7. John Drake says:

    You have just said it Gail, human civilization now needs the resource base of a few “other Earths”.

    And you know what, TPTB are also very likely aware of it. In fact, they have just been looking for exoplanets at least since the beginning of the 1990s and have officially started finding some since 1995. In 2009 they even launched a specific device to look for them: the Kepler satellite. Officially, today about 1000 exoplanets orbiting around other stars have been found. Unofficially the count is closer to 3000 exoplanets currently identified.

    The real objective of this search is of course to find at least one “other Earth” i.e. a planet of similar gravity, orbit and atmospheric conditions as Gaia that humanity – or more specifically an elite subset of humanity – could readily inhabit if they can reach it relatively rapidly. Think about it, “another Earth” is not a planet like Mars: you can readily start inhabiting and cultivating it with a minimum investment as some did not so long ago in the “Wild West”…

    Given that a few military “black” satellites – even more powerful that the now defunct Kepler satellite – are likley to have been brought on line to find this “other Earth”, you could reasonably bet that at least one has now been found within a hundred light years (perhaps much less…) of the Sun’s solar system.

    If that is the case, the next question is: how can it be reached relatively rapidly (a few months or less) from Gaia?

    Some people find it strange that officially our space program is not making a great deal of progress despite the fact that we have reached the Moon almost 50 years ago ! The Wright brothers first flew in 1903 and we reached the Moon in 1969 ! Yet from 1969 to 2014 not a great deal appears the have been done in terms of human space exploration… Many have speculated that the “lost trillions”, to which Donald Rumsfeld was referring to in his 10 September 2001 press conference, may have been discretely invested in a much more expansive covert space program; including a vast research effort related to exotic deep space propulsion technologies.

    May be the sudden search for “other Earths” is linked to the fact that a few breakthroughs have recently been made in terms of faster-than-light human deep space travel ?

    What energy source would be required to power such a starship ?

    Very likely controlled aneutronic thermonuclear fusion, which has been officially under development since the 1950s but has been strangely stalled by technical difficulties and lack of funding… A more efficient fusion “black program” however very likely exists for key strategic reasons:

    1) The first group to reach another Earth (with an exclusive deep space travel technology) will have access to a huge virgin resource base and could use it as a “safe heaven” to get rid of all of its Gaia based competitors, while making a fresh start with a “selected all star” human subset…

    2) Controlled aneutronic thermonuclear fission can be used to produce electricity, as in a traditional fossil fuel thermal power plant, but it can also be used to make small fusion weapons that do not need a fission trigger. This technology therefore presents a deadly nuclear proliferation problem because it can be copied by competitors for civil (economic war) and military purposes. Hence it needs to be kept “deep black” until you can “get rid” of competition. Otherwise, with unlimited energy, the one who can produce at the lowest cost will eventually win the economic war and the one who can afford to suffer the largest losses will win a military conflict…

    TPTB know, at least since the 1972 Club of Rome report that they have a “Limits to Growth” problem…

    Does one really think that they do not now have at least a few “options” to attempt to deal with it ?

    One might truly be surprised to know how far they could be willing to go to solve that Gaia based “Limits to Growth” problem…

    • xabier says:

      As one the most remarkable human beings ever to have existed, I demand the right to live on this second Earth! Where do I sign up? How have ‘they’ missed me? I demand to know!

      If I’d known about this, I wouldn’t have bought that valley in deepest, darkest (darker than you can imagine) Wales, with the cave system that I then packed with Knorr rice packs…….

      • Phil. says:

        Forget it, xabier, Even the most perfect Earth duplicate would have bacteria and viruses against which humans have no immunity. Remember what happened to the Martians in “War of the Worlds”.

        • MJx says:

          Maybe they would eat the Martians would eat the Knorr rice and perish?

          • Paul says:


            I think I’d rather starve than eat Knorr powdered packs…

            • MJx says:

              But Paul that powder keeps them “fresh” and “tastey” like twinkies.
              Makes life worth living. Now wonder you are so tight. Loosen up and take what comes.
              I, myself, will stock up on those Rice packets and put them in the attic and forget about them. But if the worse happens, yummie”

          • InAlaska says:

            If you eat enough of them, the preservatives would be enough to keep your DNA preserved during the multi-generational interspace travel to reach planet Knorr.

            • Mjx says:

              That is the whole point of them! Buy, store and forget….we have a problem, there is a solution.

        • John Drake says:

          Of course a few exceptional subjects, like Xabier, will need to be volunteered to test the new gene therapy against the spectrum of bacteria & viruses of the newly found “Other Earth”… but that will likely be done well before colonists are allowed to populate “New Eden”…

      • unless you speak Welsh—youll be first on the menu

        • xabier says:


          I’ll take at least one Welshman down with me – choking, I’m quite inedible.

    • I’m working on a warp speed drive system right now.
      Am also looking for investors?

    • Limits to growth has two solutions
      1—Find more fuel to burn
      2 …Reduce the number of people.
      As to the means of reaching ‘other Earths’—dont be fooled by notions of advancements in technology. The Wright brothers and the moon landings used exactly the same means of overcoming gravity…ie the power of exploding chemicals. Nothing has improved on that basic system, in the sense of lifting functional and practical amounts of weight.
      If by some realisation of fantasy, ‘resources’ were found xxx light years away, the same process would start over.
      Because you cannot make large scale use of any resource (other than by eating it) without the use of heat…and even if you do eat it, the body converts it to usable energy via heat.
      So—find a planet awash with oil, with mountains of iron and gold—or whatever. Useless until you convert into something usable. That use is invariably part of the process of ongoing conversion into still more stuff
      And there we will go again

  8. MJx says:

    The Economist articled concerning Venezuela’s oil Industry and the lack of trained, educated personal. Very interesting
    IN 2003 Venezuela’s then president, Hugo Chávez, fired more than 18,000 employees, almost half the workforce, of the state-run oil corporation, Petróleos de Venezuela (PDVSA). Their offence was to have taken part in a strike (pictured) called in protest at the politicisation of the company. Their punishment was to be barred from jobs not only in PDVSA itself but also in any company doing business with the oil firm. The axe fell heavily on managers and technicians: around 80% of the staff at Intevep, PDVSA’s research arm, are thought to have joined the strike. At the stroke of a pen, Venezuela lost its oil intelligentsia.

    It was a blow from which PDVSA has never recovered. The firm’s oil production has since stagnated (see chart), despite a big run-up in prices. The financial crisis bears some of the blame for that, as does the economic mismanagement of Chávez and, since last year, Nicolás Maduro. But the loss of skilled personnel was a huge handicap, hurting exploration and managemen

    • hebertmw says:

      Read ‘Comandante: Hugo Chávez’s Venezuela,’ by Rory Carroll, the section on the destruction of the the electrical generation infrastructure. I think it was contemporaneous with the above.

    • Dave Ranning says:

      Venezuela learned from the failed coup and lockout of the industry of the corporate control to never go down that path again.
      Let them have their revolution, they will probably not get it right the first time, and corruption and violence is rampant, but the heavy oil is not getting any less valuable.
      It really isn’t that complicated.
      The 20% of the elite have recognized that they have little chase of getting control thriug the electoral process, so they are attempting a forceable takeover.

  9. Jeremy says:

    The Master of the Universe will not go down without trying to maintain BAU:
    “The Eastern Seaboard is being opened to offshore oil and gas exploration for the first time in decades with the Obama administration’s approval Friday of sonic cannons that can pinpoint energy deposits deep beneath the ocean floor.”
    “One thing we find is, the more you get out and drill and explore to confirm what you see in the seismic — you end up finding more oil and gas than what you think is out there when you started,” Radford said.

    • Does anyone believe that commercial quantities of oil and gas in this area? Best guesses? There certainly wasn’t much onshore or shallow offshore along the Eastern Seaboard. As the old saying goes: “Only the drill bit knows”.

      • Paul says:

        Doesn’t matter if they find 10 Ghawar sized fields — cost is the issue.

        We have plenty of oil — the problem is it is too expensive to extract/refine.

      • Jeremy says:

        Exactly! These folks are so desperate they will venture ANYWHERE for the last drop.
        After all, it is good to the last drop!
        As the hamster spins the wheel

    • Stilgar Wilcox says:

      I wonder what those sonic cannons do to the sensitive hearing of marine mammals?

      • InAlaska says:

        Stilgar, you can bet that those sonic cannons do nothing good to the marine environment. There is no free lunch anywhere we turn. Find oil here, destroy marine mammals there. Find gas here, pollute groundwater there. The trap has sprung.

        • Stilgar Wilcox says:

          Yeah, the ‘Great Gaia Degradation’ is on unfortunately. We know we are doing it, yet apparently powerless to do otherwise.

          • InAlaska says:

            Its that cognitive dissonance ringing through again. “We’ll just find more oil!” Yes, but the oil is killing the planet.” Oh, yeah, I forgot… GWBush was right once in his life when he said that we were addicted to oil. We act like a crack addict. We’re willing to do anything to get the next fix, even if it means its killing us.

  10. Don Stewart says:

    Dear Gail
    Relative to the increasing cost of producing oil in Scotland. Here is an interesting analysis of the oil and gas industry in Britain comparing 1992 and 2006. The best way to get it is to search on this phrase

    Extract taken from United Kingdom Input-Output Analyses, 2006 Edition

    I particularly recommend looking at charts 10.15, 10.16, and 10.17. This gives you, among other things, a picture of what happened as the supply of oil and gas in Britain jumped between the years 1992 and 2006. Things like manufacturing did not increase much at all, but things like transportation increased tremendously. It looks to me like they had a consumption boom, with no boom in the production of tradable products.

    An exception to my last sentence may well be the financial sector, which I believe also boomed with the great run-up in world-wide debt.

    A close reading will reveal that the industry in Britain was already past its prime in 2006, and the Gross Value Added was not increasing much at all, even with the help of big increases in Brent crude.

    It’s interesting to speculate about whether the country could trace a path back to where they were in 1992, at a much lower consumption level.

    Don Stewart

    • With all of the debt we have now, it is hard to see how we could trace a path back to 1992. Jobs depend on “unnecessary spending.” If we reduce energy use, fewer people drive to restaurants or go on vacations, and jobs in those sectors drop. Industrial jobs have moved on to places where cheaper energy is used–mostly coal. Jobs also tend to move to where wage costs are lower. These tend to occur in warm countries that do not need to spend much on heat. If what is spent on heat is money spent on coal, this keeps costs low too.

  11. “The situation we have now is very different …” While all the resource-related reasoning and the idea, that the more interconnected a system, the more prone to total failure caused by a single point of failure, are correct, I think there is a reason why it came tom that and it is in my opinion too often not discussed or overlooked: it is because to my knowledge for the first time in human history (as far as societies are concerned that are above the pure local tribal level) not one national currency is based on an “underlying”. It used to be gold. But after the US under Nixon went off the half-hearted gold standard in 1971 only Switzerland remained until 1992. Otherwise, for better or for worse, the true depreciation of currencies would have long shown itself and thus put a much earlier stop on things.

    • hebertmw says:

      Kissinger created the petrol dollar, so as Gail points out there can be underlying resources to back the currency. But that in itself won’t last for the Dollar when Saudi Arabia trades oil for other currency. There is where we might go to war, not Russia or China.

    • Ken Barrows says:

      Very good point. Collapse arrives once credit cannot be produced faster than economic output.

    • kesar says:

      IMO you would have the similar result (bear in mind the Iron Curtain paradigm and possible final solution with nuclear war) on smaller scale, but on the other hand 40 years earlier. Not sure scenario worth to be regretted. Just my two cents.

    • You may be right. Currencies and future promises have been getting farther and farther away from the resources underlying those promises. If there were a tie to gold, it wouldn’t be a direct tie, but it would provide somewhat of a tie to reality. As things are now, there are few real resources backing up the paper wealth.

      • coin and paper used to be a token representing wealth.
        unfortunately we now see coin and paper as wealth itself
        that is the baseline of our fiscal problem…ie. if a nation wants to become more prosperous it just prints more money

    • Stefeun says:

      I’ve made some investigation on this problem we have with the currency, because it’s deeply connected to energy. It’s a matter of fact that globally, the world GDP (per year) is directly proportionnal to the amount of primary energy consumed during the year, and this has been constant, at least for decades.
      GDP($) = k * TOE(kWh), k constant ; I could have used units other than $ and kWh, it’s just to say that, globally, money IS energy and nothing else.

      Based on that statement of fact, many people (me too, first) have imagined that a currency backed by energy would be better than our actual fiduciary currencies backed by confidence in our governments (fiat money).
      There was even a -unique- conference in 2012 in Split, Croatia, with high-level people talking about “Energy Currency: Energy as the fundamental measure of price, cost and value” ; here’s the link to the page where you can download their presentations, some of which are really interesting:
      (I can provide further links about same theme, if some of you are interested)

      As far as I know, none of those initiatives have resulted into anything tangible, maybe because the banksters have killed promising ones in the egg, but overall -do I think- because the problem was tackled from the wrong side. IMHO, the money is a consequence, or a tool, so fixing the money will not fix the problem. I think that we must forget about the money to really start to understand how the system works.

      Our current monetary system is still a variant of ancient barter systems. In the beginning it was a product swapped for another, then an intermediate product was introduced for reasons of convenience, as it allowed the second phase of the barter to be made with distance both in space and/or in time. This intermediate product for storage of the value has been lots of different things in the past ; it only had to be resistant over time and light enough for easy transportation, and have a value per unit (of weight, or…) that was recognized and accepted all over the area among which commerce was going on. No need for any government in this basic system.
      Then this storage material has progressively become “only gold”, and then certificates representing a certain amount of gold, issued by central banks that were supposed to keep corresponding amount of physical gold in their coffers.
      The more the economy increased, the more amount of money in circulation, thus the more gold had to be poured into central banks’ coffers. At one moment there wasn’t simply enough gold in the world (and some wanted to use it for other purposes as well, such as jewelry, industry, …), and the “gold-standard” thus had to be abandoned.
      What followed is a monetary system based only on confidence, in a world where we cannot really rely on each other…

      My -preliminary- conclusion is that trying to backup the currency with something, even with the blood of our economy (i.e. energy) would still be stucking to this barter system that doesn’t work (because of lots of negative side effects, etc..). Since the energy actually IS the blood of the system, it has a very special status that shouldn’t need any temporary storage system or other parasitic method to represent what really happens in the exchanges. I think we should take things the other way round and forget about the money, to really understand.
      IMHO, a good starting point would be to consider that the price of a product is the total amount of energy embedded in it. There’s a lot of confusion around the concept of Value ; in my view the only realistic definition of the value would be “raw matter + all energy inputs” ; let aside the raw matter (consider it as “for free” in first approach, I don’t think it can be given any intrinsic value anyway, only a regulatory framework), then remains the total amount of energy inputs, ie embedded energy, which is a physical dimension that can be measured (in Joule, kWh, toe, …). This has huge implications, such as making impossible any negociation or speculation. I haven’t gone much farther yet.

      NB: I’m not trying to “fix” anything, I think our system is doomed and us with it, anyhow. It is just wild brainstorming and conceptual thinking.

      • Rien says:

        “the concept of Value”

        For this the same applies as to the concept of money, it is highly subjective and any attempt to tie it to the real world is doomed to fail (in the end).

        Value is imo always relative, i.e. something is more valuable than something else. I do not think that it can be tied to “raw matter + all energy inputs”. I think you are correct when you write that “I don’t think it can be given any intrinsic value anyway”. And without intrinsic value the concept of absolute value must necessarily die also.

        Since value is relative and subjective, speculation and negotiation are very much possible. Even necessary, for without speculation it would be impossible to offload production risk, which would in turn lead to lower production.

        • Stefeun says:

          I agree that there’s no absolute Value, that it’s highly relative and subjective. My proposal is to explore the consequences if you evaluate a product from its embedded energy. Call it Value or something else, conceptually it’s totally different of what Value means today ; today it’s subjective result of a power-struggle, very different of embedded energy, which is a physical measure.
          Don’t forget that globally, the addition of all embedded energies is surprisingly equal to the world-GDP (proportional, which means the same because the rate has been constant for very long time).
          You say that speculation and negociation are likely necessary ; maybe, but then I’d like to understand why, and find out how it works.. At a macro-macro-level it’s like if we didn’t need money (GDP=TOE), so what exactly would make it necessary or useful at lower levels? that’s what I’m trying to figure out with my poor competences. I don’t judge in advance about the effects neither make any conjecture about consequences, I’m just investigating. And, then again, certain that nothing of it will ever be implemented. Just for the fun.

          • Rien says:

            Stefeun, it surprised me that you wrote that the GDP to Energy Consumption for the world is rather constant. Could you maybe give me the source for this?
            I use the world bank PPP number, that has changed from 5.4 in 1990 to 7.3 in 2011. This is in line with what I would expect since the printing of money means that the “measured” GDP would rise faster than energy output.

            • Stefeun says:

              yes it’s actually not clear wether Tim Garrett is talking about “wealth” or GDP.
              We shortly dicussed about that with Gail few months ago ; I keep on thinking he’s talking of GDP, in fact.

            • Rien says:

              I see.
              Have you reached any conclusion as to whether efficiency does have any role in the relation GDP / Energy consumption?
              It would seem to me that it does not, as things get more efficient, we tends to use more of it. While the total wealth produced will rise, the GDP should not. In my line of thinking I would suspect that GDP is more linked to total work participation rates than energy consumption.
              Of course all such things tend to go up at the same time, so its extremely difficult to separate cause from effect.
              Maybe there is no difference between cause and effect when thinking about economics? (This last though is still new to me, I would be interested in your take on this)

            • Stefeun says:

              I also think that today’s farmers are net energy consumers.
              In the past they were “creaming” the sun energy they were able to transform into crops, and today most of the energy input comes from fossil fuels, either directly (diesel for machines, Nitrogen fertilizer) or indirectly (P & K fertilizers are mined, refined and transported with use of oil).
              More generally, yesterday we were buying the men’s work, today we’re buying mostly machines’ work (= fuel, ie measurable) ; the matter itself has always been accounting for zero in the price.

            • Stefeun says:

              refs for GDP=TOE*k
              – Jean-Marc Jancovici: see 4th chart of this post on his site Manicore:

              – Tim Garrett: 1st chart of this document:

              I remember I had found a couple of other sources telling the same (among which a Charles Hall’s one, IIRC) but I’m not able to find any of them right now.
              I didn’t know about the worldbank document, thanks for the link. It shows an improvement of the $/kg of oil-equivalent, which I’d rather attribute to increased efficiency of our technologies ; maybe money-printing is involved as well. However, the gap is very big (+35% over a 21 years period, waow!) ; as I see they’re promoting the idea that “everything is getting better and everyone will soon get rich”, I suspect them to somewhat arrange their figures to support this view.

            • Rien says:

              Thanks for the links Stefeun,

              Interestingly the first link takes the energy consumption from the BP survey and the GDP from the World Bank. So it seems likely that the world bank and the bp survey are tracking different energy uses.
              The second link does not track world GDP but world “wealth”. Which is something different.

            • Stefeun says:

              For efficiency, pls have a look at the 7th chart of the first link (Manicore).
              It’s the same graph, but made for oil only ; you can see 2 different slopes: on left part the green dots represent the years before 1983, and then you have the red dots for after the oil-shocks, on a more vertical line, which means that more GDP is generated for a given volume of oil.
              Remarkable thing is that such “verticalization” of the curve doesn’t exist when you consider all energies together. It would mean that no improvement at all was made in efficiency, at the global scale.
              Your remark about Jevons’ paradox (more efficiency => more use) is correct, but it also means that more GDP is produced ; these graphs give an idea of it, as the curve becomes more vertical when the efficiency increases.
              Reg. your question about causes and effects, I’m not sure if I understand correctly wht you mean. What I would say is that there are many feedback loops in the system, which make the analysis very difficult ; maybe the best method would be to select the data and see what it gives in “output” (similar to what JM Jancovici made for his graph “Oil only”). Maybe such analysis detailed with breakdowned energies, areas, ..? would give a better picture of how it works, and hopefully better distinguish causes and effects.
              I know that Gaël Giraud has made an analyis per country for ca 20 OECD countries (all energies), but his purpose was to check the elasticity and demonstrate that the idea of “de-coupling” (ie GDP without energy) was totally irrealistic.

            • Rien says:

              Stefeun, I have now read the entire article (manicure) and I have the distinct feeling that there is something wrong with it. That feeling might simply come from my present understanding of GDP that does not fit with the suggestions made in the article.
              In my understanding, GDP is related to the number of people working, not with the amount of energy they consume. Mind though, the output of the economy does depend on the amount of energy consumed. I thus make a difference between “the economy (as expressed in GDP)” en “total production (as in wealth)” of that economy.
              The article also mentions something interesting: total GDP per world capita is decreasing, but the total amount of energy consumption per world capita is increasing. This seems to suggest a decreasing efficiency (but is not proof!) which would contradict the efficiency gains theory.

              I’ll think about this some more, but so far I have only managed to convince myself more of my current understanding (no surprise there, lol!)

            • Stefeun says:

              we might have a different understanding of “wealth” and GDP ; maybe I missed something. Pls see this comment by Gail, and following -short- discussion:
              Reg. decrease of GDP per capita, my interpretation would rather be that GDP growth is slowing down, while the world population keeps increasing at a good pace (>+1%/year). I don’t see how this could be connected to efficiency.

            • Stefeun says:

              Reg. efficiency: sorry, I missed the second part of your sentence (energy per capita i increasing). So your conclusion looks correct ; I have to dig a bit into that to understand.

            • Stefeun says:

              excuse me, I can’t find where is said that GDP and energy consumption were varying in opposite directions.
              At the contrary, the 6th graph shows high correlation between yoy variation of both GDP/capita and Energy/capita, which means not only in same direction, but also similar % values.

            • Stefeun says:

              Sorry again, in 6th graph it’s not about Energy per capita, it’s total Oil production.
              I have to dig a little bit deeper.

            • Rien says:

              A thought experiment:

              Take a small primitive village of 100 people, no outside world, i.e. no import and export.
              Now assume that only 20 people actually work in a payed-for relationship. Suppose further that they each earn 1000 currency units per year. The GDP of that village is then 20.000 currency units.
              Now suppose a miracle happens, and they suddenly acquire power tools and the knowledge how to use them. But still the original 20 people keep working in payed-for jobs. They still earn each 1000 currency units per year. The GDP is then unchanged.

              Now because they are able to produce more with the new tools the prices of the products must have gone down.

              If on the other hand the prices have remained at pre-power tool levels, then (assuming a doubling of output) each could have earned 2000 currency units per year. Now the GDP has also doubled.

              In reality though, the economic activity has remained the same, no more hours worked, all work-for relations have not been affected.

              However the standard of living has gone up, that is really the only consequence of the miracle of the power tools.

              I guess what I want to say with this though experiment is that GDP is not really a useful measurement at all. It may follow oil supply or energy consumption or it may lead it. I do not know and even if it does I cannot see any significance in it. I think that GDP is invented by economists in order to justify some government decision, and now all the world looks at this number and hangs on to every minute move up or down.
              As I wrote earlier, I fully expect real meaningful production activities to go up when oil production goes down. Whether this results in a growth of GDP, or not, really does not matter to the common man. But since govt is very much interested in this number, you can be sure it will show “growth” even as oil consumption falls.

            • Stefeun says:

              I’m answering to your comment with thought experiment (100 people of which 20 working and they get power-tools).
              1st remark, when your system is closed, why would the population (still 100) consume more? Why would then the 20 working ones produce more, if they cannot sell more?
              Now if they can sell outside (ie with unlimited demand), they will produce as much as they can, limited by 1) the resource of raw material, and 2) the energy to transform it. Power is energy per units of time. Man-power is relatively small (as mechanical work) compared to machine power. Generated GDP is directly connected to energy consumption, wether it’s human or machine energy only impacts the level of the output (quantity of produced stuff). With machines the men don’t work more themselves, but are “piloting” external power (somehow, machines are extensions of their bodies). I can’t imagine production going up (ie GDP increase) with energy consumption going down; that sounds possible only with efficiency going up very quickly, which is impossible in the long term.
              This being said, I agree with you that GDP is not perfect (euphemism); unfortunately, it’s the only measure of “economical volume” that we have, so we have to deal with it.

              NB: I couldn’t find your comment in the “normal flow” ; I don’t know where my present answer will “land”, maybe lost in cyberspaaaaaaace (no-one will hear it cry!).

            • Rien says:

              “1st remark, when your system is closed, why would the population (still 100) consume more?”

              Because they want to raise their standard of living.
              Suppose that their main purpose in life is the digging of holes and filling them in again. With power tools they could dig twice as many holes and fill them in again, their standard of living would thus improve enormously. No extra export needed.

              Btw, I am serious in the above! not joking. Who am I to decide what enhances anybodies SOL? (standard of living)

              I do not disagree that a higher GDP number means consumption of more energy in our present paradigm. However I question the underlying assumption that the availability of more energy will result in a higher GDP number, and/or the assumption that a higher GDP number requires the use of more energy.

              As such, I am quite hesitant to draw the conclusion that the peaking of oil will necessary result in an economic collapse. It would not surprise me in the least if oil peaking would result in more economic activity as measured by the GDP number.

              First of all because more people would be involved in food production, and secondly because our politicians have hung their fate on the GDP number. (Though they will try to move away from that! watch for it)

              Also, letting these thoughts shimmer over night, have increased my conviction that the GDP number really is useless. It conveys no meaningful information at all. I could for example create a number from the hight of the tides and the stock price of Apple Inc. I could then draw a huge number of very interesting charts. But the number would still be useless.

              Politicians love the GDP number because it allows them to wave a number at the public that has a wonderfully sounding name and they can give this number any value they darn well please. Plus, they get to tell the people what constitutes a ‘good’ GDP number and what makes a ‘bad’ GDP number. What is not to like? This is the essence, the purpose of the current day crop of economists imo. A tool for the politicians to wield to make them look good.

            • Stefeun says:

              I agree that GDP is absurd by many aspects ; it measures the economic activity, no matter wether this activity is useful or not (even destructive ones are included!).
              But we have a problem to define what exactly “useful” means ; is it only the activities fulfilling very basic needs? Everything is interconnected nowadays and it’s very hard to sort-out. Another point is that we cannot just switch overnight to a simpler way of life ; for example, the overwhelming majority of todays agriculture is oil-addict, and you need 2 to 5 years to turn it back to organic or permaculture (or whatever you call it, meaning re-injecting natural life into the soil). Even those organic techniques are not really sustainable in the long run, and it’s very doubtful that they could feed the huge numbers we are today.

            • Rien says:

              Not only does the GDP number include destructive activities, it also includes “adjustments” that do not reflect economic activity at all but are only included to have a number that can be compared to previous numbers. At least that is what they want to make us believe. In reality though they include all kinds of adjustments just so that they can produce a number that makes them look good.

              No we cannot simply change the economic relationships without making a lot of people very unhappy/angry. Currently this manifests itself in monetary problems as money still enjoys a role as the final indicator of our social standing and expectations. (Btw: I think that we must expect a full set of capital controls by the governments before the end-game occurs)

              I have studied permaculture a little (I have not followed a course) and I think there are some solutions there, but if “we” can feed “the world” with permaculture seems doubtful. I think it was Don who wrote that “I” am not responsible to feed “you”. That is something to keep in mind!

            • Don Stewart says:

              Dear Stefeun
              Assume an isolated community is in equilibrium, with a local economy exchanging either gifts or money. They produce just as many potatoes as they eat, and their weight is stable. An Angel gives them a mechanical potato harvester, which doubles the number of potatoes they can grow and harvest. What happens?

              Very long ago, humans learned how to make vodka out of potatoes. So they make vodka. What happens next? They begin to develop health problems and so need doctors, vodka is easy to steal so they need police, there is always some doubt about guild, so they need courts and bailiffs and jails. In short, they get GDP.

              Don Stewart

            • Stefeun says:

              the potato harvester needs energy to run ; wether it is human, animal or diesel energy matters only for the amount of work accomplished, but the equation remains the same: production = raw matter + energy inputs. For crops you have to add the energy from the sun to the mechanical energy.

              The rest of your comment reminds me the “behavioral sink” described by John B. Calhoun in his experiment on rats (disturbing conclusion…):

              An “energetical” interpretation of this story would be that when a structure cannot adapt itself to an increasing energy flow, it collapses. The rats have unlimited food (energy) but limited space (soon overcrowded) ; as the expansion is impossible, the social structure collapses.

              If the amount of food would have been limited in order to feed a number of rats corresponding to normal density in the available space, the population would likely stabilize at some steady level and such behavioral problems would not have developed (maybe other problems, or similar but much delayed in time). Energy in (food) = energy out (burned by the rats for their metabolism and reproduction).
              Sort of application of Liebig’s law of the minimum: in first case the limiting factor is the availble space, in the second example it’s the food.

            • If I may chip in another slant on this interesting exchange?
              If i pay you to do my laundry, and you pay me to dig your garden, and we behave like good citizens and declare that income, and pay taxes on it, by government definition we have added to GDP.
              So how did we do that?
              What the GDP measurement (together with most economists and politicians) ignores is the energy input factor.
              Doing my laundry requires you to obtain external energy from somewhere else
              Digging your garden requires me to obtain my energy from elsewhere too.
              Therefore, that ‘additional GDP’ is not brought about by passing bits of coloured paper hand to hand, it is the result of consuming sufficient energy to do work. Yet the government insists that we have added to national wealth—which is nonsense.
              If I was starving, I couldnt dig your garden—I would need to eat first.
              Magnify that to armaments factories.
              They produce billions of $ £ worth of ‘stuff’ through the consumption of energy inputs, steel–oil–and so on. The workers receive wages, (adding to GDP) which they then spend (more GDP down the line)–you get my drift on this. But the original money came from taxpayers energy inputs in the first place. Therefore we are led to believe that money circulation is Gross Domestic Product, and of course where munitions are concerned, producing something which by definition must be destroyed by use!
              That leads us to the conclusion that wars are necessary to keep people employed.
              Actual GDP is a measurement of collective energy consumption and use. Unless your employment is producing energy at base level (ie a farmer, or miner or fisherman say) then your employment (no matter how elevated or menial) is a net consumer of energy.
              We can only increase GDP by burning fuel. When our politicos crow about % growth increasing, what they really mean (but fail to understand) is burning fuel at a faster rate.

            • Don Stewart says:

              Dear End
              See my nearby response to Shatatodd. I do not agree that the only way to increase real production is to use more energy. But I agree that, the way GDP is measured, it is highly dependent on the consumption of commercial energy.

              When a market gardener applies their specialized knowledge and specialized tools, they increase production beyond what a generalist gardener with no special tools can achieve. It is possible to think of very complex and expensive tools which might be used, but the principle holds for simple and inexpensive tools wielded by a specialist. The Fortiers claim that their acre and a half is the right size for what they do, and is adequate to produce a reasonable income. They reject the notion that they need to ‘scale up’ through the acquisition of things like large tractors and more land. One of the secrets to their success, they say, is keeping costs down and one of the secrets to that is keeping the garden small and doing a lot of hand work…but doing it intelligently.

              Assume, for the sake of argument, that the Canadian dollar collapsed tomorrow. The Fortiers would still be producing real food which could be traded with their neighbors. (Of course, financial collapses create a lot of collateral damage…but you see the principle.) I do not believe that the neighbors could grow anywhere near as much proportional food, collectively, as the Fortiers are producing. One of the reasons is the multiplier created by specialization. I agree that the degree of specialization would be forced down in the event that fossil fuels also collapsed and became essentially unavailable. A ‘soft collapse’ would permit more specialization and the consequent increased productivity to continue to exist.

              Don Stewart
              PS By ‘proportional food’ I mean per acre gardened. If all of the neighbors dig up their lawns and begin to grow food, they might produce as much as the Fortiers, but the production per acre would be smaller. Not that that’s a necessarily bad idea. But some specialization increases real output.

            • Dear Don
              I did specifically exclude farmers form the ‘energy economy’ GDP thing
              they are net producers of energy, even taking into account tractor fuel etc.
              If they weren’tt they would go broke.
              I still maintain that every other form of employment depends on net consumption of energy–the source of it is irrelevant.

            • Don Stewart says:

              Dear End
              I would still argue that some specialists who are directly using only very small amounts of energy can still produce large effects in terms of outputs. For example, see:

              Now, be aware that I am not promoting the program. But I think that science does support the notion that humans have the ability to significantly promote neuroplasticity of the brain in productive ways. I suspect that the expert knows more about it than the average person. Just as I might buy some carrots from Jean-Martin Fortier, I might buy some ‘neuroplasticity therapy’ from an expert.

              I will agree that these experts, living in the US, are living high on the fossil fuel hog. Back in the olden days, one would have consulted a witch doctor or the village matriarch or the crazy yogi living out in the bush, all of whom lived very low on the fossil fuel hog. My point is that expertise is obviously implemented through the resources a society has available to it, but is conceptually independent of using energy to manipulate matter.

              Brains are matter, and manipulating them does require some energy. But buying a new jet airplane to manipulate your synapses is in a completely different category than meditating for five minutes to manipulate your synapses. The jet plane requires enormous fossil fuel energy, while the fossil fuels required for the meditation is negligible.

              As fossil fuels decline, it will become more important to be able to manipulate our synapses more directly, bypassing the GDP intensive methods. Experts will probably play a role. Many people will fail, and kill themselves either quickly or slowly. A few will become buddhas. Many of us will muddle along as best we can.

              Don Stewart

            • Jan Steinman says:

              “I did specifically exclude farmers form the ‘energy economy’ GDP thing they are net producers of energy, even taking into account tractor fuel etc.”

              Farmers are not “net producers of energy,” as it is well-documented that the food system requires ten calories of energy to produce one calorie of food.

            • Oil is sufficiently cheap that I expect that farmers are still net users of energy, especially if wide boundaries are considered.

              In fact, I expect that humans have pretty much always used more energy in creating food than the food-energy that comes from food. This occurs because we cook our food. It also occurs now because we need a whole networked economic system to make the current food production system “work.” We need cheap energy, to keep the system operating.

            • Jan Steinman says:

              “I expect that humans have pretty much always used more energy in creating food than the food-energy that comes from food.”

              I’ve seen numbers that indicate that pre-fossil-sunlight, one unit of energy expended to produce food produced five or six in return.

              (Of course, that is backwards these days, and we use soil as a sponge with which to turn fossil sunlight into human biomass.)

            • Don Stewart says:

              Dear Gail and Jan
              We have to be very careful about drawing boundaries around ‘food production’ or ‘farming’ when doing our calories in/ calories out exercise. Most calories are expended after the product leaves the farm gate. I think the ratio is something like 3 calories on the farm to 7 calories in the manufacturing and distribution and home processing steps. So the farming itself, while energy intensive, is not the energy hog that the industrial food system is.

              I don’t guarantee my 3 to 7 ratio, but it is indicative.

              Don Stewart

            • I was thinking about the energy used in making the food palatable–cooking it, or pounding it to get rid of some of the fibrous parts. People who eat raw food diets today seem to use a blender to assure that they get enough nutrients. All of this energy use needs to be considered part of the “food system.” Humans have controlled the use of fire for over 1 million years, so our bodies are pretty well adapted to a diet using a lot of cooked food.

      • Christian says:

        Salut Steph

        Barter was not at the origin of money. May be you’ll enjoy reading anthropologist David Graeber’s book “Debt: the first 5000 years”. While he misses the energy issue, he nevertheless draws a very interesting history of money.

        • Interguru says:

          If you are not up to reading the book, David Graeber’s Debt the First 5000 Years, you can find five reviews here

          • Stefeun says:

            Thank you Interguru!
            Maybe I should read the whole book ; Gaël Giraud, one of our most interesting economists (the best French one I know) is a big fan.

        • Stefeun says:

          Salut Christian,
          Merci pour ta remarque.
          I know David Graeber has a slightly different view, that places the debt at the very origin ; the exchange doesn’t need to be actually made against anything but a verbal promise, as long as it remains within a relatively small community: I owe you something, I’ll give you something equivalent later. Note that the number of transactions must remain very low, or it quickly becomes ununderstandable. Graeber says that physical money appeared once deals had to be made with people from outside the small community (caravaneers, etc..).
          OK, sounds wise ; everyone can notice that such oral deals are still going on nowadays within families or circles of friends. But this is about the origins, and -as far as I understand it- it doesn’t fundamentally change the interpretation of what happened afterwards (I didn’t read Graeber in-extenso).

        • Dave Ranning says:

          You only bartered with strangers or enemies.

          Wealth Of Nations was a Fairy Tail, based on realities and practices that never existed.

  12. Mjx says:

    In the first quarter of 2014, the seven largest independent oil companies (IOCs) announced $17-billion in cutbacks to their annual capital expenditures. The end of the second quarter is nigh, and publicly disclosed management discussions are unlikely to bring any change to the numbers or the dialogue. In fact, further retrenchment from investing in the international oil scene is likely. Investors, lenders and corporate decision makers want to be able to invest in stable growth, and sleep at night knowing their investment isn’t going to be lost to war, expropriation or other nastiness.

    All this runs counter to past market mechanics. Higher oil prices have historically led to rising capital expenditures sprinkled all around the world. The Iraqi situation is going to catalyze lower global capital expenditures on oil projects, with concentrated, greater investment focused on more stable growth regions like the United States and Canada. So, what happens in Iraq stays in North America.

    Would not take much to send it all spiralling downward

  13. Jeremy says:

    Wikileaks a Democracy Now! exclusive, WikiLeaks founder Julian Assange joins us from Ecuador’s Embassy in London. It is the first time a U.S. news program has gone inside Assange’s place of refuge, where he has entered his third year in political asylum while he faces investigations in both Sweden and the United States.

    In the United States, a secret grand jury is investigating WikiLeaks for its role in publishing a trove of leaked documents about the Iraq and Afghanistan wars, as well as classified State Department cables. In Sweden, Assange is wanted for questioning on allegations of sexual misconduct, though no charges have been filed

  14. Don Stewart says:

    Dear Gail and All

    These notes are about collapse and food. They are a result of reading two books simultaneously, while also contemplating the potential for a return to the Stone Age over a short period of time.

    The book with the highest technology is The Lightness of Being by Frank Wilczek, written in 2008. Wilczek recounts the story of 20th and 21st century Physics, and what we have learned about the ultimate nature of Nature. For example, we learned to photograph the inside of the nucleus of an atom by using virtual photons that we cannot see. ‘An ultra stroboscope to look at features that last for a trillionth of a trillionth of the blink of an eye requires extremely virtual photons.’ And ‘a nano microscope fit for studying structures a billion times beyond the ken of ordinary optical microscopes requires extreme gamma rays’. This world is quite unlike what our common sense tells us, because our common sense is based on what we can see and touch and smell and taste. We cannot do any of those things with virtual photons or extreme gamma rays.

    While we now have industrial products which use the results of the physics which results from these experiments, they use technology which is perhaps a poster child of what we could not sustain in a biology based, solar powered world.

    The second book is The Market Gardener: A Successful Grower’s Handbook for Small-Scale Organic Farming by Jean-Martin Fortier. This book gives us a very detailed look into a one and a half acre market garden which grows enough vegetables to feed 200 families. (I wouldn’t place too much emphasis on the ‘200’ number, since there are infinite variables in terms of ‘how many veggies per family?’ and ‘only in season?’ and comparisons with gardens farther south than Quebec.) Suffice to say that the Fortiers grow an awful lot of veggies. They do it with one full time employee and one part time employee. They basically take 3 months off during the winter, but work pretty hard during market season. They are not breaking their backs, and they make enough money to be content.

    I wish I could describe to you the details of the technology and information which the Fortiers use, so that you could form a good opinion about how it relates to the high tech world of the Physics researchers and also our Stone Age ancestors. However, I think there is no way to do that, other than to direct you to the book.

    As an example, if you go into a bookstore, and look on page 37 you will see a description of the irrigation system. I’d have to quote a page or more to describe it fully to you. Suffice to say that it involves pumping water with electricity from a pond and distributing the water with both overhead sprinklers and drip tapes, both of which are products of the industrial economy. There is also a lot of knowledge embedded in the design of the system, such that an irrigation consultant helped design it.

    Consider this statement on page181: ‘Let’s start with the potato, a vegetable with all the characteristics of an appealing crop. Potatoes are popular and indeed profitable in terms of surface area. However, the tubers are much easier to harvest with a potato harvester than by hand. For a market gardener, it is almost impossible to be as productive as a mechanized grower, and the price of potatoes would not reflect the amount of effort involved’.

    The Fortiers are, of course, compelled to be competitive in a world where mechanized potatoes harvested in very large fields very far away are nevertheless sold cheaply in supermarkets. So they make the decisions that they do. A homeowner with plenty of garden space and plenty of time who likes to dig potatoes might arrive at a different decision. Should a crisis interfere with the delivery of potatoes to the supermarket, then all the decisions would have to be rethought.

    Cindy Connor has written:
    Grow a Sustainable Diet
    Planning and Growing to Feed Ourselves and the Earth
    ‘While many gardening guides will tell you everything you need to know about individual crops, none tackles the more involved task of helping you maximize the percentage of your diet you grow yourself.’

    Back to me. So there are lots of moving parts involved in making wise decisions. Does one assume that things will go on about like they are now, only with the steady erosion of industrial agriculture for a wide variety of reasons? Will the mostly hand tools that the Fortiers use continue to be available? Will the walk behind tractor that they use still be available? Will the electric grid continue to operate? Will they be able to distribute the food they produce? Will the forced localization as collapse happens eliminate the food distribution issue as their neighbors clamor for food, as opposed to trucking food around looking for a market?

    Continuing. Suppose one has some money and can buy land. Should one aim for self-sufficiency, as Cindy Connor might recommend? Or should one aim for a market niche as the Fortiers clearly aim? If one tries to do everything, will the information intensive methods used by the Fortiers become impossible for ordinary humans, such that acreage will have to increase while production per acre declines? (I would guess that the ordinary backyard gardener may be a quarter as productive as the Fortiers.) Will the disappearance of the prosthetic devices used by the Fortiers (such as plastic tarps to kill weeds, or irrigation lines) disappear with the New Stone Age?

    Assuming that one can visualize a future of farming/ gardening as the world morphs into something different (or collapses suddenly), there are a myriad of detailed decisions to be made. And all the decisions are time sensitive…does one have to make money now (as the Fortiers are making money now) or does one have plenty of money and so the goal is maximum self-sufficiency in the event of collapse? Let’s suppose that one decides that a fairly extensive garden somewhat modeled after the Fortier example is appropriate. Then one has to decide on a long list of specific questions. For example, Jean-Martin Fortier explains why he doesn’t like the ‘heavy mulch’ systems pioneered by Ruth Stout in the US and Emilia Hazelip in France (too many slugs). Instead, he prefers the ‘canopy’ approach (the plants touch each other, creating shade which discourages weeds) along with clever ways to use plastic and flames to prevent weeds. Deb Tolman in Texas uses raised keyhole beds on suburban lots which also rely on the canopy approach, along with the raised bed which moves the garden a few feet into the air, helping with the weed problem. While there are lots of options, the gardener or market farmer has to actually make decisions and do either one method or a combination of methods.

    I will hesitantly venture a few conclusions:

    *Any gardening experience is a lot better than absolute ignorance

    *It is impossible to accurately predict the future. Get started and count on having to modify your procedures as you go.

    *Pay particular attention to soil health, as Fortier describes.

    *Use as much gravity fed water and passive solar as you can design into the system. Passive solar also means shelter from direct sunlight, when that is appropriate (bamboo will probably earn its keep).

    *Be clear on whether you are aiming for a market garden (production of high value fruits and veggies to be traded in the community), a self-sufficient farmstead, or a calorie crop farm. Be prepared to have these morph as the situation develops.

    Don Stewart

    • Jan Steinman says:

      Whenever I hear of people growing incredible amounts of food on small amounts of land, I rarely see the word “inputs” mentioned.

      Fortier mentions feeding 200 people from 1.5 acres. Do those 200 people save their urine and faeces and put it back on the land? If not, what are they doing for inputs?

      It is impossible to feed 200 people on 1.5 acres over an extended period of time without inputs. You’ll simply wear the land out. If you aren’t closing the nutrient cycle by putting your own outputs onto the land as inputs, you’re importing fertility via off-site manures or chemicals.

      Don says there is no way to explain what Fortier is doing without reading the book, but perhaps he can summarize what their inputs are, and where they are getting them.

      • rather like an article I read a while back (no longer have the link) which extolled the ‘sustainability’ of producing food on city plots—the photo showed the plot being cultivated by a horse drawn plough!

      • Don Stewart says:

        He buys commercial compost. He does have two compost heaps on his own property, but professes not to be a compost expert. He also uses inputs such as blood meal, especially when he needs nitrogen for crops when the soil is still very cold. He obeys ‘organic’ rules on allowable amendments.

        I wouldn’t describe him as ‘low input’ as a ‘self-sufficient homesteader’ might strive to be. Instead, he is intensively entangled with a local economy of farm suppliers.

        As I indicated, I wouldn’t put too much emphasis on the ‘200 people’ thing. He has a relatively short season in Quebec, and the book doesn’t tell us whether the 200 is during the season, or whether the amount of food is enough to supply 200 people intensively putting by food for the winter, or whether all 200 are getting their Seven A Day.

        But he is producing lots of food. John Jeavons produces lots of food also, but Jeavons counts the land that is required to grow his compost. Fortier just gives the facts: I farm an acre and a half and buy commercial compost and produce a lot of food in terms of dollars. As I hope I made clear, he is motivated by money…not by calories or self-sufficiency.

        The decision not to buy a tractor was motivated partly by saving money, partly by concerns about soil health, partly about cramming as much production as possible into his small space. The turn around space required by a tractor is much greater than for a walk-behind tractor, which was a factor in his decision.

        If you read the book, you can see that he is operating a very knowledge intensive garden. He admits he hasn’t mastered composting, which he sees as a skilled occupation, and therefore does what he does and buys what he needs. In some sense, he is like a doctor or architect…you are paying for his knowledge about growing lots of veggies in a very small space.

        Don Stewart

        • Jan Steinman says:

          Thanks, Don. Although the best from a sustainability point-of-view would be to create all your own inputs, I think getting compost from a neighbouring farm is a heck of a lot better than getting chemicals from St. Louis, Missouri (Monsanto) or Midland, Michigan (Dow).

          Thanks also for noting that Fortier’s focus is not sustainability, but rather income. I get powerfully ticked when someone claims sustainability via imported inputs!

      • shastatodd says:

        i agree… i could grow a great garden, but was importing lots of amendments… which is why we grow 6000 sq ft of clover now, which we cut and compost for our soil fertility. this is one kind of permaculture.

        • Dave Ranning says:

          3 llamas, 2 horses, 2 mules, and chickens seem to supply my garden input needs.
          Of course, composting other materials also.
          You need animals.

          • shastatodd says:

            “You need animals.”

            and your animals eat what imported food sources?? sorry – no free lunch.

            as high as 90% of an animals food input goes to regulating body temperature. with only 1.5 acres, we cannot afford that kind of waste /inefficiency. we are trying to grow as much food as we can with as little imported resources. that means no animals and a vegetarian diet.

            the remarkable thing about our permaculture /composting system, is we are actually growing our soil fertility… the only added inputs are water and the time /effort required to make compost.

            • Jan Steinman says:

              “we are trying to grow as much food as we can with as little imported resources. that means no animals [in] our permaculture… system”

              As defined by Mollison/Holmgren, Permaculture includes the use of animals.

              I know a lot of vegans who claim otherwise, but a key aspect of biomimicry includes the use of animals in multiple roles — of which, meat may play a very minor part. Milk, eggs, fibre, etc. are all things that animals are more efficient at than we are — or were you going to grow flax and cotton for your clothing needs?

              The biggest thing is the time and energy taken to compost something. If you are spending your energy gathering plant material, and your time and space composting it, why not employ a worker who will do it for you? Goat droppings are garden-ready, versus waiting months for the same source material to turn into humus.

              I know I’m touching the hot rail for some people. I myself eat vegetarian, and yet I sell my baby bucklings to people whom I know will eat them. The goats are just too darned useful in so many other ways to get all religious about other people eating the boys.

            • Jan Steinman says:

              By the way, we use animals with very little “purchased inputs.” The chickens are on pasture, and get limited grain. The only goats on grain get a handful while they are being milked. We could substitute either of these inputs as needed, but elect to use them while we can.

            • shastatodd says:

              indeed jan… but then nothing is sustainable. the solar electric powered (chinese made) electric lawn mower, which cuts and bags the clover for delivery to the 9 compost bins is surely not sustainable… that being said, this IS a kind of permaculture – a system which circularly feeds itself. the hurdle of not importing soil amendments for our 4500 sq ft of intensive gardens seems to be resolved… IF we have the water resources for the ~2000 gallons/day of irrigation here in drought stricken california.

              speaking of which, i just spent $5400.00 on a new well… the old one was only 30′ deep and getting thin on static level above the pump. i figured while my money still has value and there are fossil fueled well drillers available to hire, it was time to invest in better water security. we got 50 gpm at 124′! i am super happy!!!

            • Animal-power daydreamers (one reads their stuff everywhere) ignore that reality about a strong draft animal needing 2 acres of land for its exclusive use.
              A strong horse of ox might supply half a day’s power in return for a half day of rest.
              I get the impression that horses are sometimes seen as four legged tractors–feed hay in one end and get unlimited ploughing power out

            • Don Stewart says:

              Dear Shastatodd
              The difference between what I understand that you are doing and what the Fortiers are doing is that they are sending a lot of fertility off their acre and a half in the form of stuff they sell to the public. That fertility comes back to them in the form of the purchased compost. The commercial composter gathers waste from the community, composts it, and sells the compost. So there is still a completed loop, but the Fortiers are using a cycle which requires fossil fuels (the distribution of the food, the collection of the waste, the turning of the compost, the distribution of the compost) and a financial system (selling food for money, the commercial composter paying for their inputs with money, the Fortier’s using some of the money they collect from customers to pay the composter).

              In a Stone Age scenario, the system that the Fortiers are using probably would not survive. Our society would probably begin to look more like, for example, Geoff Lawton’s place in Australia, where most all of the recycling occurs right on the property. It begins to look more like a plantation which aims for a large degree of self-sufficiency plus a cash crop. The DuPont estate in Delaware and the Vanderbilt estate in Asheville, NC both tried to express the ‘self-sufficiency’ ideal, although both were enabled by the wealth created by the industrial economy. Both estates were throwbacks to an earlier time, at least in their dreams.

              There are interesting trade-offs. As I tried to illustrate with the Jean-Martin Fortier description of what he does with carrots and how his procedures are more sophisticated than the average home gardener, just simply devolving to home gardens would probably result in a very significant reduction in total output. We need specialization and specialized tools in order to keep production up. The plantations were one solution to the problem of specialization. Many people worked on the Vanderbilt estate, performing a specialized task such as running a dairy and selling milk from wagons in the town of Asheville. There were also foresters, and lots of other specialists. Of course, keeping it all running was the inherited money from the railroads. These kinds of estates have not been economically competitive for decades. But they might return, depending on the severity of the collapse. The worst situation, I think, would be absolutely isolated homesteads trying to do everything for themselves.

              Don Stewart

  15. Paul says:

    The simplest way to “measure” geopolitical risk is to look at the price of energy. Energy is everything for a macro economist as it’s a tax on the economy when high, and a discount when low. High energy consumption levels makes it a critical part of any projection but despite this, energy assumptions are often exogenous (given!).

    Think about this: Everything you did this morning involved energy consumption: Waking up to your smart phone (charging overnight), putting on the coffee, pouring the cold milk from the fridge, taking a shower, driving the car to work and walking into your air-conditioned office. Likewise, the rest of your day will be one big consumption of energy. The world’s energy resources are primarily extracted from “volatile” or underdeveloped regions, creating a real risk of disruption of supply. Herein lies a clear and quantifiable risk.

    No, the signal from the energy market about the demand of energy and the risk of getting enough of it is clear: Prepare for less growth, less certainty and more geopolitical risk. The market, however, maintains a steady hand: Israel will be contained inside a couple of weeks, Russia vs. Ukraine will find a solution. The non-acceptance of tail-risk (Black Swans) is clear for everyone to see. The market is “perfect” in its information, zero interest rates will save us and we have all been fooled into believing that the real world no longer matters.

    Unemployment, social inequality, wars, innocents being killed, and TV images of people fighting to live another day are not relevant………except for the fact that for world growth to keep increasing we need to continue to see growth in Africa, the Middle East and Eastern Europe.

    We need to accept that the world is now truly global – we smiled while globalisation reduced prices and made our companies more profit, now the escalation of wars reflect a world where growth is low, energy is expensive and increasingly hard to get and that we have gone full circle with macro and interventionist policies.

    The demon manifests itself in many ways…

  16. Paul says:

    How America’s Sporting Events Have Turned into Mass Religious Events to Bless Wars and Militarism

    The religious reverie—repeated in sports arenas—is used to justify our bloated war budget and endless wars.

    Reminds me of Upton Sinclair’s comment: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

    Likewise it is difficult to get Americans (and other countries such as Canada, Australia, UK etc..) to understand the true nature of America (and NATO) because we all benefit grandly from our pillaging of the globe.

    Most are oblivious — there are a few who do understand — who are not hypocrites — and simply believe if we don’t do it to ‘them’ then they will do it to us…

    But of course the sheeple must be maintained in a state of feeble-mindedness … because most people — if they truly understood the price that is paid around the world for our prosperity (particularly the good Christians among us) would need to go on Xanax to deal with the guilt — or would oppose these policies.

    Of course that is where the MSM comes in very handy — 24/7 spewing the message that America is good — the global policeman – the beacon of democracy… that soothes the masses — creates a fever of patriotism.

    And meanwhile the Deep State is sitting up there in the castle and laughing at the ‘little people’

    • Mjx says:

      The American Indians been saying that pretty much since us Europeans landed here on their shores.

    • when any state creates a military complex that is bigger than the immediate requirement of defending its own territory, then that military can only justify and sustain its existence by thrusting outwards to absorb other territories—and by definition, absorb their resources–
      When a number of states do this, then violent conflict is inevitable, because each state needs those resources to maintain its top heavy military infrastructure, and to justify the ensuing impoverishment that ordinary citizens have to endure to support their armies.
      As a clear example of this It has been estimated that the real price of gasoline is at least $15 gallon, when the cost of the military system needed to sustain its flow is factored in.
      The $11 ‘difference’ doesn’t just disappear, everybody pays it. Problem is, paying that $11 means that everything else suffers. Thus you have overall poverty and decay which could be remedied to a great extent if that $11 wasn’t being siphoned off to support military industry and consequent wars made necessary by the constant stockpiling of wartoys.
      Won’t happen of course. when a million jobs depend on ‘defence’ spending, who is going to throw them out of work?

  17. Don Stewart says:

    Dear Jan Steinman

    You questioned the ‘sustainability’ of Jean-Martin Fortier’s methods. This excerpt describing their approach to carrots may illustrate my points that:
    *Money is important to them
    *They use appropriate technology, some of which is industrial in origin
    *He gives detailed instructions in the book
    *They are probably multiples more productive than many home gardeners
    *The Fortiers customers are paying for physical work which requires energy, but also for knowledge
    *Their biointensive methods are not much like forest gardening or permaculture like efforts to do perennial gardening
    *A major collapse would significantly disrupt what they do. The Fortiers themselves would probably be OK, but their production would drop and they could not sell as much food.
    *With approximately 30 vegetables growing in a 10 year rotation, they can perhaps be forgiven for purchasing high quality compost.
    Don Stewart

    ‘Since carrots are both popular and cold-hardy, they are an excellent vegetable to force in the spring Our first seeding is planted in the hoop house using the Six-Row Seeder at a density of 12 rows per bed We then use pelleted seeds to produce early baby carrots that sell like hotcakes at our first market. Our second early seeding is done directly in the garden but under the cover of a caterpillar tunnel and a row cover. At that point, we aim to grow bigger sized carrots and space the seeding to 5 rows on the bed From what we’ve observed, carrots need about 1.5 square inches to grow to a size of 6 to 7 inches, which is what we aim for.

    We time our final carrot seeding so that the crop can be harvested from the field right until our very last shares in October. When the nights begin to get frosty, we cover our last carrot beds with row covers, sometime two. Carrots store well in the ground as long as the temperatures doesn’t sink below 20F/-7C. The cold nights actually make the carrots taste much sweeter, much to the delight off our CSA customers.

    Carrots like loose, well-aerated soil that’s been worked quite deeply with a broad fork. This crop is not a heavy feeder, and fertilizing with compost once every two years seems to be enough to meet its needs Carrots don’t appreciate high-nitrogen fertilizer or excessive fresh manure, demonstrating this aversion by forming hairy roots. However, we do apply supplementary fertilizers in our first seedings when the soil is still too cold to provide sufficient nitrogen for good leaf growth.

    The biggest challenges with carrots are seeding and weeding. Since carrots take a long time to germinate (usually 8 to 15 days), it is important that the soil surface be kept very moist so that it does not harden or dry out by the time the fragile plants emerge. We accomplish this by installing micro-sprinklers to water as needed. We also lay floating row covers over the soil to help the plants come up faster. The best weed-control strategy we have come across is pre-emergence flame weeding (see Chapter 9) This technique saves us untold hours of weeding on our knees. A flame weeder, even iuf used only for carrots, is definitely a worthwhile investment.

    Carrots also have some insect challenges. Two pests, the carrot rust fly and the carrot weevil, are responsible for the brownish scarring seen on affected carrots. The rust fly causes the most problems for us, but we manage to fend it off by covering the crop with anti-insect netting in mid-August, during the fly’s egg-laying period. Weevil damage has been minimal on our farm; our solution is simply to pick the affected carrots out and sell them to our customers as juicing carrots. During seasons that are unusually wet, a number of diseases sometimes affect the leaves, but this usually happens when the carrots are mature. Our solution is simply to cut off the upper half of the tops.’

    Broccoli, in contrast, is identified as a ‘heavy feeder’ which gets ‘a lot of nitrogen and potash…this is one crop where a supplementary dosage of organic fertilizer, in conjunction with compost, is essential’ He describes the anti-insect netting which protects against Swede midges, cabbage maggot, flea beetle, and cabbageworm. Detailed instructions on how to recognize when the plant is about to bolt. In all, a page and a quarter of detailed instructions for broccoli.

    • Jan Steinman says:

      “With approximately 30 vegetables growing in a 10 year rotation, they can perhaps be forgiven for purchasing high quality compost.”

      I didn’t mean to imply that they required “forgiveness.” I just pointed out the fact that their goal is not so much sustainability as other factors.

      • MJx says:

        Folks, just store enough of food to hold you over for a number of years.
        All this talk about “feeding” people….It AIN’T going to happen!
        Don’t forget the toilet tissue too. In Soviet Russia that was good as gold.

  18. Creedon says:

    In central Missouri gas prices are dropping like rock. The American Empire seems to be having its way in the Ukraine and the middle east. Talk of eminent collapse seems to be misplaced. The stalk market is sky rocketing and the an over valued market can be kept propped up seemingly endlessly with printed money. There would seem to be no end in sight.

  19. Rodster says:

    NOAA: June and May were hottest on record worldwide

    • MJx says:

      Do you actually believe the “world leaders” really care about that? Obama just approved more oil and gas exploration off the Eastern US seacoast!

  20. Don Stewart says:

    Dear End of More
    Murray Gell-Mann, the distinguished physicist, wrote The Jaguar and the Quark back in 1994. He talks about how the relatively small change in the genome from our cousins the great apes to humans led to a very large increase in the complexity of what humans can do versus what the apes can do. On page 70 we find his explanation of the term ‘potential complexity’:

    ‘When a modest change in a schema prermits a complex adapt system to create a great deal of new effective complexity over a certain period of time, the modified schema can be said to have a greatly increased value of potential complexity…’

    I would argue that, in addition to the genetic inheritance as a source of ‘potential complexity’, the rewiring of synapses may also be a source of ‘potential complexity’. The potential complexity may manifest itself as more carrots produced with less labor by an expert gardener, or as more satisfaction produced with less physical transformation of materials by people who have learned to directly manipulate their mental states.

    Don Stewart

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