Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed as an all around benefit.
In fact, nothing could be further from the truth. The Peak Oil story we have been told is wrong. The collapse in oil production comes from oil prices that are too low, not too high. If oil prices or prices of other commodities are too low, production will slow and eventually stop. Growth in the world economy will slow, lowering inflation rates as well as economic growth rates. We encountered this kind of the problem in the 1930s. We seem to be headed in the same direction today. Figure 1, used by Janet Yellen in her September 24 speech, shows a slowing inflation rate for Personal Consumption Expenditures (PCE), thanks to lower energy prices, lower relative import prices, and general “slack” in the economy.
Figure 1. “Why has PCE Inflation fallen below 2%?” from Janet Yellen speech, September 24, 2015.
What Janet Yellen is seeing in Figure 1, even though she does not recognize it, is evidence of a slowing world economy. The economy can no longer support energy prices as high as they have been, and they have gradually retreated. Currency relativities have also readjusted, leading to lower prices of imported goods for the United States. Both lower energy prices and lower prices of imported goods contribute to lower inflation rates.
Instead of reaching “Peak Oil” through the limit of high oil prices, we are reaching the opposite limit, sometimes called “Limits to Growth.” Limits to Growth describes the situation when an economy stops growing because the economy cannot handle high energy prices. In many ways, Limits to Growth with low oil prices is worse than Peak Oil with high oil prices. Slowing economic growth leads to commodity prices that can never rebound by very much, or for very long. Thus, this economic malaise leads to a fairly fast cutback in commodity production. It can also lead to massive debt defaults.
Let’s look at some of the pieces of our current predicament.
Part 1. Getting oil prices to rise again to a high level, and stay there, is likely to be difficult. High oil prices tend to lead to economic contraction.
Figure 2 shows an illustration I made over five years ago:
Figure 2. Chart made by author in Feb. 2010, for an article called Peak Oil: Looking for the Wrong Symptoms.
Clearly Figure 2 exaggerates some aspects of an oil price change, but it makes an important point. If oil prices rise–even if it is after prices have fallen from a higher level–there is likely to be an adverse impact on our pocketbooks. Our wages (represented by the size of the circles) don’t increase. Fixed expenses, including mortgages and other debt payments, don’t change either. The expenses that do increase in price are oil products, such as gasoline and diesel, and food, since oil is used to create and transport food. When the cost of food and gasoline rises, discretionary spending (in other words, “everything else”) shrinks.
When discretionary spending gets squeezed, layoffs are likely. Waitresses at restaurants may get laid off; workers in the home building and auto manufacturing industries may find their jobs eliminated. Some workers who get laid off from their jobs may default on their loans causing problems for banks as well. We start the cycle of recession and falling oil prices that we should be familiar with, after the crash in oil prices in 2008.
So instead of getting oil prices to rise permanently, at most we get a zigzag effect. Oil prices rise for a while, become hard to maintain, and then fall back again, as recessionary influences tend to reduce the demand for oil and bring the price of oil back down again.
Part 2. The world economy has been held together by increasing debt at ever-lower interest rates for many years. We are reaching limits on this process.
Back in the second half of 2008, oil prices dropped sharply. A number of steps were taken to get the world economy working better again. The US began Quantitative Easing (QE) in late 2008. This helped reduce longer-term interest rates, allowing consumers to better afford homes and cars. Since building cars and homes requires oil (and cars require oil to operate as well), their greater sales could stimulate the economy, and thus help raise demand for oil and other commodities.
Figure 3. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Following the 2008 crash, there were other stimulus efforts as well. China, in particular, ramped up its debt after 2008, as did many governments around the world. This additional governmental debt led to increased spending on roads and homes. This spending thus added to the demand for oil and helped bring the price of oil back up.
These stimulus effects gradually brought prices up to the $120 per barrel level in 2011. After this, stimulus efforts gradually tapered. Oil prices gradually slid down between 2011 and 2014, as the push for ever-higher debt levels faded. When the US discontinued its QE and China started scaling back on the amount of debt it added in 2014, oil prices began a severe drop, not too different from the way they dropped in 2008.
I reported earlier that the July 2008 crash corresponded with a reduction in debt levels. Both US credit card debt (Fig. 4) and mortgage debt (Fig. 5) decreased at precisely the time of the 2008 price crash.
Figure 4. US Revolving Debt Outstanding (mostly credit card debt) based on monthly data from the Federal Reserve.
Figure 5. US Mortgage Debt Outstanding, based on the Federal Reserve Z1 Report.
At this point, interest rates are at record low levels; they are even negative in some parts of Europe. Interest rates have been falling since 1981.
Figure 6. Chart prepared by the St. Louis Fed using data through July 20, 2015.
I showed in a recent post (How our energy problem leads to a debt collapse problem) that when the cost of oil production is over $20 per barrel, we need ever-higher debt ratios to GDP to produce economic growth. This need for ever-rising debt contributes to our inability to keep commodity prices high enough to satisfy the needs of commodity producers.
Part 3. We are reaching a demographic bottleneck with the “baby boomers” retiring. This demographic bottleneck causes an adverse impact on the demand for commodities.
Demand represents the amount of goods customers can afford. The amount consumers can afford doesn’t necessarily rise endlessly. One of the problems leading to falling demand is falling inflation-adjusted median wages. I have written about this issue previously in How Economic Growth Fails.
Figure 7. Median Inflation-Adjusted Family Income, in chart prepared by the Federal Reserve of St. Louis.
Another part of the problem of falling demand is a falling number of working-age individuals–something I approximate by using estimates of the population aged 20 to 64. Figure 8 shows how the population of these working-age individuals has been changing for the United States, Europe, and Japan.
Figure 8. Annual percentage growth in population aged 20 – 64, based on UN 2015 population estimates.
Figure 8 indicates that Japan’s working age population started shrinking in 1998 and now is shrinking by more than 1.0% per year. Europe’s working age population started shrinking in 2012. The United States’ working age population hasn’t started shrinking, but its rate of growth started slowing in 1999. This slowdown in growth rate is likely part of the reason that labor force participation rates have been falling in the United States since about 1999.
Figure 9. US Labor force participation rate. Chart prepared by the Federal Reserve of St. Louis.
When there are fewer workers, the economy has a tendency to shrink. Tax levels to pay for retirees are likely to start increasing. As the ratio of retirees rises, those still working find it increasingly difficult to afford new homes and cars. In fact, if the population of workers aged 20 to 64 is shrinking, there is little need to add new homes for this group; all that is needed is repairs for existing homes. Many retirees aged 65 and over would like their own homes, but providing separate living quarters for this population becomes increasingly unaffordable, as the elderly population becomes greater and greater, relative to the working age population.
Figure 10 shows that the population aged 65 and over already equals 47% of Japan’s working age population. (This fact no doubt explains some of Japan’s recent financial difficulties.) The ratios of the elderly to the working age population are lower for Europe and the United States, but are trending higher. This may be a reason why Germany has been open to adding new immigrants to its population.
Figure 10. Ratio of elderly (age 65+) to working age population (aged 20 to 64) based on UN 2015 population estimates.
For the Most Developed Regions in total (which includes US, Europe, and Japan), the UN projects that those aged 65 and over will equal 50% of those aged 20 to 64 by 2050. China is expected to have a similar percentage of elderly, relative to working age (51%), by 2050. With such a large elderly population, every two people aged 20 to 64 (not all of whom may be working) need to be supporting one person over 65, in addition to the children whom they are supporting.
Demand for commodities comes from workers having income to purchase goods that are made using commodities–things like roads, new houses, new schools, and new factories. Economies that are trying to care for an increasingly large percentage of elderly citizens don’t need a lot of new houses, roads and factories. This lower demand is part of what tends to hold commodity prices down, including oil prices.
Part 4. World oil demand, and in fact, energy demand in general, is now slowing.
If we calculate energy demand based on changes in world consumption, we see a definite pattern of slowing growth (Fig.11). I commented on this slowing growth in my recent post, BP Data Suggests We Are Reaching Peak Energy Demand.
Figure 11. Annual percent change in world oil and energy consumption, based on BP Statistical Review of World Energy 2015 data.
The pattern we are seeing is the one to be expected if the world is entering another recession. Economists may miss this point if they are focused primarily on the GDP indications of the United States.
World economic growth rates are not easily measured. China’s economic growth seems to be slowing now, but this change does not seem to be fully reflected in its recently reported GDP. Rapidly changing financial exchange rates also make the true world economic growth rate harder to discern. Countries whose currencies have dropped relative to the dollar are now less able to buy our goods and services, and are less able to repay dollar denominated debts.
Part 5. The low price problem is now affecting many commodities besides oil. The widespread nature of the problem suggests that the issue is a demand (affordability) problem–something that is hard to fix.
Many people focus only on oil, believing that it is in some way different from other commodities. Unfortunately, nearly all commodities are showing falling prices:
Figure 12. Monthly commodity price index from Commodity Markets Outlook, July 2015. Used under Creative Commons license.
Energy prices stayed high longer than other prices, perhaps because they were in some sense more essential. But now, they have fallen as much as other prices. The fact that commodities tend to move together tends to hold over the longer term, suggesting that demand (driven by growth in debt, working age population, and other factors) underlies many commodity price trends simultaneously.
Figure 13. Inflation adjusted prices adjusted to 1999 price = 100, based on World Bank “Pink Sheet” data.
The pattern of many commodities moving together is what we would expect if there were a demand problem leading to low prices. This demand problem would likely reflect several issues:
- The world economy cannot tolerate high priced energy because of the problem shown in Figure 2. We have increasingly used cheaper debt and larger quantities of debt to cover this basic problem, but are running out of fixes.
- The cost of producing energy products keeps trending upward, because we extracted the cheap-to-produce oil (and coal and natural gas) first. We have no alternative but to use more expensive-to-produce energy products.
- Many costs other than energy costs have been trending upward in inflation-adjusted terms, as well. These include fresh water costs, the cost of metal extraction, the cost of mitigating pollution, and the cost of advanced education. All of these tend to squeeze discretionary income in a pattern similar to the problem indicated in Figure 2. Thus, they tend to add to recessionary influences.
- We are now reaching a working population bottleneck as well, as described in Part 4.
Part 6. Oil prices seem to need to be under $60 barrel, and perhaps under $40 barrel, to encourage demand growth in US, Europe, and Japan.
If we look at the historical impact of oil prices on consumption for the US, Europe, and Japan combined, we find that whenever oil prices are above $60 per barrel in inflation-adjusted prices, consumption tends to fall. Consumption tends to be flat in the $40 to $60 per barrel range. It is only when prices are in the under $40 per barrel range that consumption has generally risen.
Figure 14. Historical consumption vs. price for the United States, Japan, and Europe. Based on a combination of EIA and BP data.
There is virtually no oil that can be produced in the under $40 barrel range–or even in the under $60 barrel a range, if tax needs of governments are included. Thus, we end up with non-overlapping ranges:
- The amount that consumers in advanced economies can afford.
- The amount the producers, with their current high-cost structure, actually need.
One issue, with lower oil prices, is, “What kinds of uses do the lower oil prices encourage?” Clearly, no one will build a new factory using oil, unless the price of oil is expected to be sufficiently low over the long-term for this use. Thus, adding industry will likely be difficult, even if the price of oil drops for a few years. We also note that the United States seems to have started losing its industrial production in the 1970s (Fig. 15), as its own oil production fell. Apart from the temporarily greater use of oil in shale drilling, the trend toward off-shoring industrial production will likely continue, regardless of the price of oil.
Figure 15. US per capita energy consumption by sector, based on EIA data. Includes all types of energy, including the amount of fossil fuels that would need to be burned to produce electricity.
If we cannot expect low oil prices to favorably affect the industrial sector, the primary impact of lower oil prices will likely be on the transportation sector. (Little oil is used in the residential and commercial sectors.) Goods shipped by truck will be cheaper to ship. This will make imported goods, which are already cheap (thanks to the rising dollar), cheaper yet. Airlines may be able to add more flights, and this may add some jobs. But more than anything else, lower oil prices will encourage people to drive more miles in personal automobiles and will encourage the use of larger, less fuel-efficient vehicles. These uses are much less beneficial to the economy than adding high-paid industrial jobs.
Part 7. Saudi Arabia is not in a position to help the world with its low price oil problem, even if it wanted to.
Many of the common beliefs about Saudi Arabia’s oil capacity are of doubtful validity. Saudi Arabia claims to have huge oil reserves, but as a practical matter, its growth in oil production has been modest. Its oil exports are actually down relative to its exports in the 1970s, and relative to the 2005-2006 period.
Figure 16. Saudi Arabia’s oil production, consumption, and exports based on BP Statistical Review of World Energy 2015 data.
Low oil prices are having an adverse impact on the revenues that Saudi Arabia receives for exporting oil. In 2015, Saudi Arabia has so far issued bonds worth $5 billion US$, and plans to issue more to fill the gap in its budget caused by falling oil prices. Saudi Arabia really needs $100+ per barrel oil prices to fund its budget. In fact, nearly all of the other OPEC countries also need $100+ prices to fund their budgets. Saudi Arabia also has a growing population, so it needs rising oil exports just to maintain its 2014 level of exports per capita. Saudi Arabia cannot reduce its exports by 10% to 25% to help the rest of the world. It would lose market share and likely not get it back. Losing market share would permanently leave a “hole” in its budget that could never be refilled.
Saudi Arabia and a number of the other OPEC countries have published “proven reserve” numbers that are widely believed to be inflated. Even if the reserves represent a reasonable outlook for very long term production, there is no way that Saudi oil production can be ramped up greatly, without a large investment of capital–something that is likely not to be available in a low price environment.
In the United States, there is an expectation that when estimates are published, the authors will do their best to produce correct amounts. In the real world, there is a lot of exaggeration that takes place. Most of us have heard about the recent Volkswagen emissions scandal and the uncertainty regarding China’s GDP growth rates. Saudi Arabia, on a monthly basis, does not give truthful oil production numbers to OPEC–OPEC regularly publishes “third party estimates” which are considered more reliable. If Saudi Arabia cannot be trusted to give accurate monthly oil production amounts, why should we believe any other unaudited amounts that it provides?
Part 8. We seem to be at a point where major debt defaults will soon start for oil and other commodities. Once this happens, the resulting layoffs and bank problems will put even more downward pressure on commodity prices.
Wolf Richter has recently written about huge jumps in interest rates that are being forced on some borrowers. Olin Corp., a manufacture of chlor-alkali products, recently attempted to sell $1.5 billion in eight and ten year bonds with yields of 6.5% and 6.75% respectively. Instead, it ended up selling $1.22 billion of bonds with the same maturities, with yields of 9.75% and 10.0% respectively.
Richter also mentions existing bonds of energy companies that are trading at big discounts, indicating that buyers have substantial questions regarding whether the bonds will pay off as expected. Chesapeake Energy, the second largest natural gas driller in the US, has 7% notes due in 2023 that are now trading at 67 cent on the dollar. Halcon Resources has 8.875% notes due in 2021 that are trading at 33.5 cents on the dollar. Lynn Energy has 6.5% notes due in 2021 that are trading at 23 cents on the dollar. Clearly, bond investors think that debt defaults are not far away.
The latest round of twice-yearly reevaluations is under way, and almost 80 percent of oil and natural gas producers will see a reduction in the maximum amount they can borrow, according to a survey by Haynes and Boone LLP, a law firm with offices in Houston, New York and other cities. Companies’ credit lines will be cut by an average of 39 percent, the survey showed.
Debts of mining companies are also being affected with today’s low prices of metals. Thus, we can expect defaults and cutbacks in areas other than oil and gas, too.
There is a widespread belief that if prices remain low, someone will come along, buy the distressed assets at low prices, and ramp up production as soon as prices rise again. If prices never rise for very long, though, this won’t happen. The bankruptcies that occur will mean the end for that particular resource play. We won’t really be able to get prices back up to where they need to be to extract the resources.
Thus low prices, with no way to get them back up, and no hope of making a profit on extraction, are likely the way we reach limits in a finite world. Because low demand affects all commodities simultaneously, “Limits to Growth” equates to what might be called “Peak Resources” of all kinds, at approximately the same time.
It’s all about spin and perception and lies, deception, and getting away
Ben Bernanke’s memoir revisits collapse of Lehmann BrosBros
http://m.economictimes.com/news/international/business/ben-bernankes-memoir-revisits-collapse-of-lehmann-bros/articleshow/49250870.cms
It is astonishing to hear a former Federal Reserve chairman acknowledge that he may have misled the public as part of an agreement with another senior government official about one of the most crucial moments in recent financial history — and that he now questions whether he should have “been more forthcoming.” But that is what Ben S Bernanke says in his new memoir, The Courage to Act: A Memoir of a Crisis and Its Aftermath.
I’m sosurprises!
What is the role of the debt in allocating resources? The rising debt helps to allocate more and more costly resources to those areas of economy that would not come into existence without it (new houses, new power plants, new factories) or could not continue its existence (old houses, old power plants, old factories). I.e. the housing bubble was created by allocating the costly oil to construction with the help of the rising debt. When the debt is not here, all the sectors of the economy, that were created and maintained using the debt finincing without the presence of the cheap oil, go bust. That is called “deflation”.
That is why we have an oversupply of oil: the sectors of the economy financed by the rising debt over the corresponding production capacity of the cheap oil needed for their operation and maintenance go bankrupt in absence of the rising debt. That is the high pressure on lowering the oil prices we are experiencing now. This need for cheap oil to preserve the created bubble. It was present here already in 2008.
What can be awaited: no rise in oil prices, the deflation of the economy driving them even lower… And, once again, what is the deflation? The sectors of the economy created and maintained using more and more costly resources need cheap oil for their operation, maintenance and the repayment of the debt. This means that now the system consumes itself. Like it was during the fall of the Soviet block, when all the infrastructure gradually deteriorated. It took some years after the end of the construction boom. But is it going faster today? Well, given the conservation measures and lowering income of the people, the only thing the states need to do is not to allow the bankrupted states, individuals and companies to rise the consumption of the oil again. Bailing them out finally stops to be effective anyway. The lowering consumption of oil is simply welcome, as we are loosing the cheap oil.
So, I would agree with Gail that this time the governments will not try to solve the bankruptcies the way it was made after 2008.
The case of the lowering prices of food like milk in Europe (http://www.telegraph.co.uk/news/picturegalleries/worldnews/9706213/Dairy-farmers-spray-milk-at-the-European-Parliament-in-Brussels.html) shows us what will be the main problems of the governments: keeping the production of the food via higher and higher subsidies with the needs of the population. I.e. the allocation of oil to food production must be preserved. And also to healthcare. This seems to be the aim of Obamacare: the amount of oil allocated to healthcare must not go down due to lowering incomes of the people. Because lowering incomes of the people in US mean less healthcare.
http://i.huffpost.com/gen/1360151/original.jpg
Source: http://www.huffingtonpost.com/2013/09/18/health-care-spending_n_3948568.html
The new health insurance contributions (especially from dividends) were introduced by the Slovak government after 2008, too:
“Most important are the upcoming health insurance contributions from dividends. Health insurance contributions from dividends paid out from profits generated in 2011
will be subject to further health insurance contributions. The same relates to rental income, capital clients and other income.”
https://www.google.sk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBsQFjAAahUKEwioy5aX7a_IAhUBiywKHUmTDT4&url=http%3A%2F%2Fwww.amcham.sk%2Fdownload.pl%3Fhash%3DfP1B5413oTSjuIv71b6MNel0bNqHGVsA%26ID%3D1370&usg=AFQjCNE7NkiF-WeGlg3So5xlHV7KBBI7HA&bvm=bv.104615367,d.bGg
The catch with healthcare is that the costs seem to be rising in 2016, as insurance companies figure out the real cost of the coverage. Also, deductibles seems to be unrealistically high.
Somehow, the healthcare system needs to be fixed to produce a less-high, but adequate standard of care. (It is probably too late for this, however.)
“Somehow, the healthcare system needs to be fixed to produce a less-high, but adequate standard of care. ”
I agree. What we did with insurance only addressed a small portion of the problem. The -whole- health care bill is looking into reduction in health care costs. There are several different pilot programs to help reduce medical costs in an effort to find something that can be more applicable more generally. Cutting down on uninsured people and then having them going bankrupt and not be able to pay their bills is a HUGE expense for hospitals, but far from the only abuse in the system.
hi.
i’ve been reading your blog for some time and i find it both exciting and worrying at the same time to read this. i am not an economist, i am only a citizen, concerned about the general status of the system we call our world. so here is a very profound, personal question to you gail: with the world economy out of control, rising poverty and unrest in the poorer parts of the world, emerging ecologic problems worsening & our governments not even getting what hell is even happening – what can we, as citizens, do to prevent(?) this, and in case in cannot be prevented anymore, what can we do make this the last harmful collapse possible, so we would not make history as the generation who had it all but gambled it.
or better: how do we build a liveable alternative world for future generations, while ours is collapsing around us?
Relocate. Eddy chose New Zealand I chose an island off Vancouver. Plan on a medieval existence and learn to be a subsistence gardener. I’m in a sparsely populated area with lots of clean water and fuel (trees) I’m installing some iron Edison batteries with solar chargers to help with my transition. Just hope they can figure something out with the nuclear waste ponds
Edison batts are very inefficient. I researched this as if my life depended on it
OPzS cells are what I settled on.
“Edison batts are very inefficient. I researched this as if my life depended on it ”
They aren’t the most efficient, but they last far longer then any lead acid battery. They are serviceable with easy to acquire chemicals. They can be drained and overcharged without degradation.
opzs batteries have a limit of 1500 cycles which isn’t much better (if it is) then some of the newer more efficient lion batteries coming on the market.
oh its not only the nuclear waste that has to be technologically maintained over centuries, many chemical & mining industry production & waste facilities will have to be dismantled / shut in in a way that’s safe for forever.
i hope we, or they, depending on the time span in which this occurs, can keep the internet running. it will be essential.
but i am somehow still a victim of hope. i still think its not to late to recognize the flaw in the assumption, growth can be endless, dismantle the globalized economy, build distributed local systems that do as little harm as possible, throw away everything that’s unnecessarily consuming energy, make the transition to renewables happen, re-distribute the wealth to erase poverty, recover the depleted soil, … , …
I see you are just beginning your path to enlightenment…
Let me open a door for you…
‘Erase Poverty’ — I assume you mean by that guarantee every single person on the planet – 7.3B people on the planet — a guaranteed minimum standard of living….
Let’s say:
– a small house
– a small car or motorbike
– 3 meals with protein in each
– a little spending money to take a holiday once per year
– a telephone – a Tee Vee
Now imagine how many power plants and factories and pollution would result from this…
Then imagine how quickly we would deplete the increasingly scarce resources such as oil, coal, water, fish, trees, etc….
We are the World and Koombaya are wonderful songs — they try to promote good intentions…. but they are the delusional works of people who are totally out of touch with reality…
Be careful what you wish for.
i know, it sound rediciulous.
this is not the minimal standard of living i’ve been thinking of.
– a small house
depending on how much soil you have to grow food in cities, not always the best solution, as apartments in cities are more energy efficient.
– a small car or motorbike
don’t have one know. in the future we are talking about, only few people will need it, b.c. they will not have to drive to work. cities & townships must be restructured, so they provide everything needed within reach.
– 3 meals with protein in each
i am not a veggie, but i don’t need meat for every 3 meals every day.
– a little spending money to take a holiday once per year
people wont need holiday in this future bc they don’t work in a stressful modern jobs. to be honest: i have not been on any holiday for 10 years or so. a good work-live balance gives me more time to rest than a quick 2 week holiday ones a year.
– a telephone – a Tee Vee
i have no TV & no smartphone, even i am an IT network engineer. what i definitely want to have is internet access, because it will be important for staying in contact with the rest of the world, inform each other about, for example weather events, and to maintain or even defend a democratic system, in case a totalitarian regime starts to develop in the face of the collapse.
+1
– 1,000,000,000,000
“– 1,000,000,000,000”
You hit an integer overflow error. You need to work on your algorithms.
You’ve ignored the points I have made. You are in danger of being ignored going forward…
I suggest FW add a new option — a filter that allows users to direct comments from an ‘ignored’ list into junk… that would save time — which is quite important given there is so little time remaining
It would work both ways — the Koombaya Krowd could block anything from Fast Eddy thereby saving themselves the mental anguish of having to deal with the Fact Bombs I have a penchant for dropping…
“You’ve ignored the points I have made. You are in danger of being ignored going forward…”
By who?
“I suggest FW add a new option — a filter that allows users to direct comments from an ‘ignored’ list into junk… that would save time — which is quite important given there is so little time remaining ”
I would suggest banning users who continually harass new users and refer to people with derogatory terms like “koombayas”. It would save quite a bit of bandwidth from users who only can quote zerohedge, cut and paste in responses written 3-4 years ago and eat up bandwidth with meaningless posted pictures of themselves.
It is a lot cheaper, easier and promotes a healthier discussion.
How about we put this to a vote….
“How about we put this to a vote….”
That will work about as well for you as crowd funding a way to pay me off to get rid of me. How is that going btw? I haven’t heard anything.
the good thing about the internet is, it is resilient & democratic by design, if you will. it was build for maintaining communication during and after an atomic war. it can take a lot of disruption before collapsing.
Ya but it doesn’t run on air…. you need electricity…. lots and lots and lots of it….
And there won’t be any….
But don’t worry — having internet will not feed you — so you will not miss it….
The military builds multiple backbone for communications in war. If four of twelve are nuked they keep ticking. The civilian sector build one backbone because yeah man it is all about profit. The military does not share. So yes the military internet will keep working.
As to FE point it needs electric, that is true. So the military, with nuclear power and PV and storage (yeah it does not need to be cheap if you have a check book full of blank checks) and generators and strategic oil reserves, etc…, will be communicating long after you and I go dark. Space based assets are self powering. $100 per watt 40% efficient GaAs PV on military satellites are out of our budget but not theirs.
dude, wtf i wrong with you, fast eddy? 1. i can see no fact in what you say. not one. 2. i ask for gail’s opinion, not yours. “It would work both ways — the Koombaya Krowd could block anything from Fast Eddy thereby saving themselves the mental anguish of having to deal with the Fact Bombs I have a penchant for dropping…”
I think a collapse is at this point “baked into the cake.” On a finite world, all economies are necessarily finite, as are the lives of all people and animals. The issue is not anything that we did or did not do. If we had not discovered the use of fossil fuels, the world economy would likely have collapsed sooner. If our current downfall comes in waves or steps down, a person can perhaps avoid the first waves, but having at least a little stored up food and water, so that a temporary outage is not a huge problem. Some people think that they and their farming techniques can continue, close to indefinitely. This seems more likely for hunter-gatherers than people starting out now, trying to set up shop for feeding themselves. I don’t object to people trying this approach, but it is not the approach for everyone. Some people may choose simply to focus on enjoying what we have now, rather than finding ways to give themselves a better chance of surviving.
I would not rule out the possibility of a higher power being involved in everything from the big bang, to evolution, to what seems to be happening now.
Gail, I wrote a Theory about the design of the Universe I think you may find compelling. If you email me an address at oppositesubverses@gmx.com and I’ll mail one to you for free. Even if you don’t have time to read it now, you could put it on your library shelf to read some day when you do have time – eh, maybe post collapse, in between fending off intruders – lol.
Per Jarred Diamond, in the highlands of Papua New Guinea, where hunter-gatherers still exist, when two people accidentially meet in the jungle, they spend a lot of time tracing thier family ties, becuase if they cannot find a common relative, it evolves into a fight to the death. Those are their rules of the jungle. There is only so much to go around, so unless you are part of the extended family/tribe, you are an intruder that must be dealt with so as to discourage others from encrochment. Works the same for most other top predators.
🙂
Hi everybody, such a long time out of OFW! Nice to see many of you are still around
Just posting to comment recent russian bombings in Palmira got almost universal support in Argentina (and US image seems to worsen, polls already indicated China as the #1 world leader and partner by almost 2 to 1 for the US). Happy hurras to Putin did even crowded the comments section in a Wall Street property as Clarin newspaper -possibly the most read spanish language newspaper, worldwide- which is a bit surprising. The paper also released a couple of pieces on Ted Turner, one about his good sight on Putin’s actions vs. standard State Dept procedures, and another one on Turner’s rising star
Of course Russia didn’t stroke ISIS refinery (I think they have only one), which would end up in… who knows
Wonder what to think about all of that
Cheers for you Gail
Salut Christian!
Nice to see you back here. Hope you’ll tell us about the situation in Argentina & Sud-America. We hear it’s not good, due to droughts, strong dollar, Petrobras scandal, etc.., would be nice to have your opinion.
Reg. bombing in Syria, Western thousands of bombs are labeled “Democracy & Freedom” (even when they target a crowded hospital), while Russian few ones are a global threat. Syriasly! (JHK’s last -short- post about that is worth reading: http://kunstler.com/clusterfuck-nation/syriasly/).
At least this is what we’re told by MSM here in W-Europe. That doesn’t seem to go the same way in Argentina; maybe you’re looking for an alternative to US and USD, because of your bad experiences with vulture funds, strengthening USD, etc..?
Have been busy, got kinda job. I’m not so much informed about South America (I think continental news in the media are scarcer nowadays). I remember Venezuela got heavy headlines some months ago, wonder what is happening there at the present moment but Maduro is still the frontman there and they’re handling their problems some way. News from Brazil talk about cuts for general population, bribes for many politicians and devaluation for everybody. Argentinean middle class is happy with this later point, because this summer it will be cheaper to go on vacation there than head for a domestic destination, and of course Brazil is O mais grande do mundo and their beachs are far better than ours
But most people understand they must sign on for their vacations before december, because we’ll change president and at that moment… cuts and devaluation are expected to happen here as well (we still have the lowest gas and electricity fees in the continent). Everybody knows this won’t continue. Talks are underway with China’s CB to expand currency swap but last week even a part of our “leftist” government started pledging for an arrangement with hedge funds and IMF, wich were imperialist devils all along the last decade
Reg. Vaca Muerta, it’s no longer on the headlines, because you can’t avoid the word fiasco if you talk about it
In the other hand, Putin is getting kinda heroic place. Most people realize the world is falling apart, and ISIS is an important trait in this picture. Pax Americana was broken and whoever is likely to be able and willing to “totally destroy” -as people are asking for- percieved enemies of civilization will be acclaimed. It’s a syrias matter! Of course MSM don’t overtly stand against NATO, but it’s undeniable good news are coming from the Kremlin not the Pentagon, so they are not depicting Vlad as a monster so graciously as they were doing before, while hoi polloi comments talk about a hero and highlight ISIS is a child with three parents: US, KSA and Israel
It’s quite bizarre we are going more conservative from an economical standpoint (and from a cultural/moral one, because all three main candidates are clearly against abortion, drugs, etc) but we incorporated multipolarity, and conservatism no longer just means “uncle Sam is the boss”, now it’s more complex
But I just wanted to know what do US people think about this eccentric Donald Trump
Merci Christian,
maybe people finally realized that Pax Americana is everything but moral.
OTOH, your elites dealing with IMF and hedge funds sounds like a recipee for disorder, especially in a context of devaluation.
Et bien, tu sais, can’t discard some disorder but we’re pretty well habituated to this. Last time, in 2001, it made 40 dead people, but I’m somewhat confident elites learned something given many politicians had to leave the job
Important debt bills to pay in 2016 -a gift from actual administration- have to wait and see
Christian, having lived all my life 50 to100 miles north of New York City I have a certain fondness for the two home town boys Donald and Bernie. As far as I can tell Donald is the least war candidate of all. Donald and Bernie are the only nationalistic candidates as in supporting what is good for people living in the US. All others are banker servants.
When I hear Trump say make America great again I think of 1970 when one parent could work 40 hours per week and support a wife and two or three kids with the other parent supporting the home/family life. The homosexuals and Zionists think he means them harm. I do not think he cares about them.
What would Donald be allowed to do if elected well that is the question. I expect not much. Maybe a little less intense on the wars of aggression, may be a little less immigration. Beyond that what has he proposed? Nothing but platitudes as far as I know.
There are many truly dangerous presidential candidates of both parties worry about them. The ones that open say they want to start a war with Russia. I see no danger from Trump.
There is a regional thing with Trump. The need to be ultra polite to all people on all subjects that exists in some parts of the US sure does not exist in NYC. I would say it is the opposite you win points for being tough regardless of who you offend.
I don’t think the Zionists fear him at all… he would fear them though… because they would be his future boss should he win….
Skip to 3:21:30 — and keep in mind this was written over a century ago — things are going as planned… incredible genius…. https://www.youtube.com/watch?v=Ig5sTehZqZA
Got that wrong … starts at: 1: 34.40
Thanks Ed. I see also Hillary is falling down; this is a surprise, wonder what will happen. Btw, ISIS had just “acknowledged” the US killed its second headman. A timely event, good to boost NATO’s political position given Kremlin’s last initiatives
Does anyone actually follow the US presidential race for any reason other than comedic amusement? This explains who really runs the show https://www.youtube.com/watch?v=Ig5sTehZqZA – how democracy is a total sham invented to make people believe they actually can influence events…
Amusingly people still believe they do influence events — even though the evidence demonstrates that the people they vote for don’t give a shit about what the electorate wants…
They dance to the tune of The Elders….
“Does anyone actually follow the US presidential race for any reason other than comedic amusement? ”
People who live in the country and can actually vote pay more attention to it. People who live in Monarchy’s probably think it is a joke, but they don’t have any rights anyway and blame government for everything because that is all they have.
Mainly for fun, yes; I look at Trump as an odd character but who knows what will happen. I agree New World Order theory is the most accurate description of the real world, but be careful with those protocols, they are a fake based on a XIX century book against Napoleon III where jews were not mentioned but many paragraphs are just plagiarism. Perhaps the Elders are not in charge and things are a bit different…
I have read the entire document… actually I listened to it…. there is no way in hell those are fake…
Listen to the control of media part 1:34:40…. that is exactly what has happened…. hard to believe this was put in play over a century ago…
Listen to the part about democracy — about how this system was promoted to deflect from the Elders…. something I have been stating for a long time…. the greatest system ever devised…
Listen to the part about how you bribe people to get them to do what you want…
Listen to the part in the last 30 minutes about how you drive countries into debt to gain control of them…
Then use your common sense and work backwards from these comments:
“I care not what puppet is placed on the throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire. And I control the money supply.” Nathan Rothschild
“Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. … Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.” — Mackenzie King, Canadian Prime Minister 1935-1948.
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” – Woodrow Wilson, after signing the Federal Reserve into existence
“Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive that they had better not speak above their breath when they speak in condemnation of it.” ― Woodrow Wilson
I reckon this is what Russia and China are fighting against….
Well, I won’t hear two hours of spoken english, and the truth is I didn’t read the book neither. Better you take a look here
https://en.wikipedia.org/wiki/The_Protocols_of_the_Elders_of_Zion
Jewishs were added to fit zarists progroms. But I like Wilson’s quotes, very much. Of course Rotschild is Jewish, but it doesn’t mean “it is a jewish plot”, it’s rather a “capitalistic plot”. Of course the people who invented monotheism is well suited to display worldwide aspirations, I just wonder to what extent this is a central point, at the present historic moment at least. This relates to two things:
What about Israel?
What about Russia and China (and some others); to what extent can they be incorporated to the plot?
If you go through that entire reading of the documents you will see that it is a Zionist plan — not Jewish at all…
In fact on at least two occasions it states that ‘Jews should be sacrificed if necessary — the ends justifies the means’
At the end of the day it’s not different than pointing out that the Chinese elites – or Russian — or any other group wants to rule the world — the only difference… is that these guys were able to pull it off…
The genius of the plan is incredible — and the coupe de grace — if anyone points out the obvious — that being that the protocols described in great detail in the plan — have been implemented with outstanding success over the past century — you’d be destroyed as an anti-semite…. when you are nothing of the sort…
Genius… absolute genius…
“If you go through that entire reading of the documents you will see that it is a Zionist plan — not Jewish at all…”
What you mean Zionist = not Jewish at all?
All Zionists are supposedly Jewish — all Jews are most definitely not Zionists…
In fact I suspect most Jews haven’t the slightest awareness of any such plan — and if they did I suspect a great many would oppose it.
I actually do not oppose it — I am just an impartial commentator on what I see happening.
This is another round of survival of the fittest — and the Zionists appear to be the fittest…. however nothing lasts forever ….
Mother has had enough of us and our petty bs …. and she’s about to deliver the knockout blow
http://boxinghalloffame.com/wp-content/uploads/2012/12/ali-vs-liston.jpg
FE, it is good to pay attention to sub groups. There is the rich political elite, the religious Torah Jews, the bulk of Jews, mostly (in the US) atheists, a cultural mutual support tribe.
I have read quote that make it seem the rich elite are happy when the bottom of the Jewish social pyramid is culled as an improvement at the stock. I enjoy how the rich elite exploiting the bulk in Israel. I also enjoy the Torah Jews of NYC protesting against the ungodly political enterprise called Israel. For them the Jewish Messiah must come before God creates the true Israel. The bulk use and return the mutual support in politics, courts, universities, hiring in various professions and companies.
The rich elite have been heavily involved in Russia. I wonder about China, India Japan and KSA? They have control of EU, US, Canada, and Australia. I would guess also New Zealand?
I suspect the only two countries that are not controlled by the Elders would be Russia and China…
They are both unloading US debt — and are at the forefront of dumping the petro dollar…
On the surface — that would appear to be an attempt to crush the Elders….
The Elders are not sitting back of course — they are lashing out like a wicked beast on multiple fronts….
“I suspect the only two countries that are not controlled by the Elders would be Russia and China…”
They are part of the elders you keep referring to.
Of course you might mean the EU. They are the ones heavily invested in FFs.
Salut Christian!
Nice to see you back.
Thanks for the Cheers. I am not the expert on Russian bombings, though.
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Nice mention of Our Finite World on this site http://theenvironmentonline.com/ecology-and-money/
V. Fthenakis et al. / Energy Policy 37 (2009) 387–399
4 pennies per KWHr for storage using compressed air (CAES).
14 pennies per KWHr from PV plus CAES now in US southwest. Wonder if they are right? Compared to 3 pennies per KWHr for wholesale electric it is only 4.7x more expensive. That might put a crimp in the corporate/societal profit line.
“Wonder if they are right? ”
Not anymore.. the price of solar pv has dropped considerably since 2009, and they are probaby using earlier data.
The compressed air storage, while possible isn’t terribly effecient, and requires large pressure tanks. They were trying to use old mines, but air leaks out of those. probably the best compressed air I have seen, is essentially a bladder bolted on the floor of of the ocean, and you blow it up. But even that was pretty pricey.
Batteries use less space, and don’t need the extra equipment to convert the air back to something useful. It -might- work on a small scale if you have the parts lying around. There was a van in the 70s or 80s that someone converted to pneumatic drive for, but the range was really bad.
The lady in Berkeley that uses water to hold the heat of compressed air and return it upon expansion seem to do well on efficiency. Yes, it takes an expensive metal/carbon fiber tank but there is economy of scale the amount of metal goes as R squared but the amount of stored energy goes as R cubed. So a ten times larger tank linear dimension, 1000x volume, is 10 times cheaper in terms of metal bought per unit of energy stored.
“The lady in Berkeley that uses water to hold the heat of compressed air and return it upon expansion seem to do well on efficiency.”
Someone had a commercial one either available or it was close to becoming available about 8 years ago. Then I saw another company with one out in cali. I don’t think they scaled up very well. I haven’t heard much about compressed air storage in a long time. I don’t know whether that is cost, or just size/space types of problems or just efficiency. I suspect more a combination of all 3.
It is the cost they are at 25 pennies per KWHr and hope to move down to 18 pennies per KWHr with their version 2.0 With California wholesale electric at 9 pennies right now after sunset it is hard to see a niche for 18 pennies.
“It is the cost they are at 25 pennies per KWHr and hope to move down to 18 pennies per KWHr with their version 2.0 ”
I don’t think they have much traction even at 18c.
This is about the clearest article I could find with the cost per kwh for a few other storage types:
http://cleantechnica.com/2015/05/09/tesla-powerwall-powerblocks-per-kwh-lifetime-prices-vs-aquion-energy-eos-energy-imergy/
The utility storage with Lion is already at 5/kwh at 92% efficiency, Imergy at 5c @75% eff
and Eos Aurora 1000 | 6000 at .02 cents @75% eff. (i think minus the cost of electric, which is where the 17% efficiency difference comes in between the techs.)
Quite honestly, you can see the tech can pay for themselves. Buy wholesale for 10 cents, sell during peak anything above 15.8c/kwh for tesla or for the Eos you are at 15.3c/kwh.
or with 5c/kwh Eos is 8.6c and tesla is at 10.4c.
PG&E onpeak off peak for business was only about 4c/kwh like 21-25c but holy cow..
https://www.sce.com/wps/portal/home/residential/rates/Time-Of-Use-Residential-Rate-Plans/
There is a spread of 25-35c for residential between super off peak and peak time.
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Had the President of Nobel Peace Prize-winning Doctors Without Borders not warned us of the “imminent threat to global health” posed by the TPP, would these 22 doctors and patients have lost their lives early Saturday?
“I don’t know exactly how long, but it was maybe half an hour afterwards that they stopped bombing. I went out with the project coordinator to see what had happened. What we saw was the hospital destroyed, burning,” described nurse Lajos Zoltan Jecs of the U.S. bombardment of a hospital in Kunduz,
http://theantimedia.org/doctors-without-borders-bombing-tpp/
“United States is becoming a failed state, and thus a danger to its own people and the world.” – Noam Chomsky, 2006
It no longer even pretends it cares about jobs, families, the future. It is unconstrained.
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Alcoa Inc. will kick off the earnings season after the markets close on Oct. 8.
Analysts project income for S&P 500 members dropped 6.9 percent in the third quarter.
http://www.bloomberg.com/news/articles/2015-10-05/asian-futures-tip-more-stock-gains-as-rate-outlook-fuels-rebound
Funny… one would expect the stock market to crash on this news…
It might look like we have a perpetual economic motion machine…. that corporate profits can fall to 0 … that corporations won’t make any products… the workers can just show up and be paid for doing nothing…. the companies just borrow more cash at zirp… buy back shares.. execs slap each other on the back as they collect big bonuses for jobs well done…. heck why not even give the workers big raises — everyone wins….
What a brilliant scheme this is — money for nothing — chicks for free….
We can extend this model to the 3rd world and end poverty…
Who’s idea was this — Krugman? — Bernanke? — Greenspan? —- Yellen?
Put your hand up — because the person who came up with this gets the Nobel Economics Prize — and a free trip to Disney Land
It really does give one the impression that things are primed to fall completely apart once the surplus energy is gone. There is no new exploration to speak of and the major finds of super giant oil fields is in massive decline. The energy surplus will be gone soon and then what? I think that is when reality will bite us very hard.
More problems http://www.bloomberg.com/news/articles/2015-10-07/coal-challenges-persist-for-glencore-as-slowdown-worsens-glut
Speaking of hunting and gathering, I read this today and found it to be jaw-dropping:
http://www.yourwildlife.org/2015/05/ecological-medicine-can-parasitic-worms-cure-us-of-our-modern-pandemics/
All my training has been thrown out the window piece by piece in the last few years and this information may just empty my head once and for all.
OMG
Thank you Ann, very interesting.
Quote: “The entire history of medicine has been built around killing bad species (ecological medicine). We have never taken the next step of also considering how to garden beneficial species. We are gardeners who spray pesticides but forget to plant any seeds.”
and from the link “ecological medicine”:
We know which species make us sick, but we must learn which species make us healthy.
“More recently, a new version of the hygiene hypothesis has suggested that it isn’t just large numbers of bacteria that it is good to be exposed to but, rather, many kinds of bacteria. Our immune system needs to be exposed to many species in order to sort the good from the bad. Without such exposure, argues this “biodiversity” version, mistakes get made. The immune system, in not having seen enough of the world, doesn’t know quite what to attack. It attacks pollen. It attacks us.”
http://www.slate.com/articles/health_and_science/new_scientist/2012/08/ecology_of_disease_why_bacteria_worms_and_nature_are_good_for_you_.html
Yes, ecological medicine, I get that. But DELIBERATELY INFECTING YOURSELF WITH HOOKWORMS?? And your allergies are gone for two years? That’s almost unbelievable, but the evidence is there.
Could you do that? I don’t know if I could. You can feel those worms wiggling inside you. I don’t think I could take that.
To be honest I don’t know. I guess our disgust is only cultural, but quite strong and difficult to overcome.
Maybe, before swallowing them, we could get accustomed by seeing their cousins at work in surface. Do you know maggot therapy, that heals open infected wounds?
I’m ironic here but this is very serious, and has been known for at least 500 years (Ambroise Paré, famous war surgeon), and probably long before that.
https://en.m.wikipedia.org/wiki/Maggot_therapy
What are the signs and symptoms of hookworm?
Itching and a localized rash are often the first signs of infection. These symptoms occur when the larvae penetrate the skin. A person with a light infection may have no symptoms. A person with a heavy infection may experience abdominal pain, diarrhea, loss of appetite, weight loss, fatigue and anemia. The physical and cognitive growth of children can be affected.
http://www.cdc.gov/parasites/hookworm/gen_info/faqs.html
Most people infected with hookworms have no symptoms. Some have gastrointestinal symptoms, especially persons who are infected for the first time. The most serious effects of hookworm infection are blood loss leading to anemia, in addition to protein loss. Hookworm infections are treatable with medication prescribed by your health care provider.
http://www.cdc.gov/parasites/hookworm/
Many people with intestinal tapeworm infection have no symptoms. If you do feel the effects, your symptoms will depend on the type of tapeworm you have and its location. Invasive tapeworm infection symptoms vary depending on where the larvae have migrated.
Signs and symptoms of intestinal infection include:
Nausea
Weakness
Loss of appetite
Abdominal pain
Diarrhea
Weight loss and inadequate absorption of nutrients from food
Invasive infection
If tapeworm larvae have migrated out of your intestines and formed cysts in other tissues, they can eventually cause organ and tissue damage, resulting in:
Fever
Cystic masses or lumps
Allergic reactions to the larvae
Bacterial infections
Neurological signs and symptoms, including seizures
http://www.mayoclinic.org/diseases-conditions/tapeworm/basics/symptoms/con-20025898
When it sounds too good to be true…. it always is….
Of course, FE, if you consider only the problems linked to invasive infections, you get an ugly picture. BTW, that’s valid for almost everything, not only worms.
But if you manage to control and keep suitable balance, either with your immune system or with some appropriate medicine, then why not enjoy the benefits, without the drawbacks?
Ecosystems are all about equilibrium, adapting from one state to another.
How about if you just try to lead a healthy life without eating rubbish — without smoking – without drinking too much alcohol — and exercising….
I’ll pass on ingesting worms … that sounds like a recipe for disaster.
But hey – I might be proved wrong — any guinea pigs want to give this a go and tell us how it works out?
People used to get worms from undercooked meat. Perhaps we should encourage eating meat raw.
“People used to get worms from undercooked meat. Perhaps we should encourage eating meat raw.”
It would take care of the overpopulation issue pretty fast. Mad cow disease, salmonella, etc. 🙂
It would at least initially, increase health care costs over the short term.
One thing I learned quickly in insurance is that dead people don’t cost much compared to those with permanent disabilities.
California Mayor Forced to Hand Over Electronics and Passwords at Airport – Compares U.S. to Nazi Germany
“I think the American people should be extremely concerned about their personal rights and privacy. As I was being searched at the airport, there was a Latino couple to my left, and an Asian couple to my right also being aggressively searched. I briefly had to remind myself that this was not North Korea or Nazi Germany. This is the land of the Free.
– Anthony Silva, Mayor of Stockton, California
Just in case you’re still under the infantile illusion that you reside in a free country.
Stockton, California Mayor Anthony R. Silva attended a recent mayor’s conference in China, but his return trip took a bit longer than usual. At the San Francisco International Airport (SFO) this week, agents with the Department of Homeland Security detained Silva and confiscated his personal cell phone among other electronics. According to comments from the mayor, that may not even be the most alarming part.
“Unfortunately, they were not willing or able to produce a search warrant or any court documents suggesting they had a legal right to take my property,” Silva told SFGate. “In addition, they were persistent about requiring my passwords for all devices.”
The mayor’s attorney, Mark Reichel, told SFGate that Silva was not allowed to leave the airport without forfeiting his passwords. Reichel was not present for Silva’s interaction with the DHS agents, either. The mayor was told he had “no right for a lawyer to be present” and that being a US citizen did not “entitle me to rights that I probably thought,” according to the paper.
Evidently, Silva was well aware of the situation and only had his concerns heightened by first-hand experience. Talking to SFGate, he briefly compared the government battle on privacy to notorious dictatorships worldwide.
“I think the American people should be extremely concerned about their personal rights and privacy,” Silva told the paper. “As I was being searched at the airport, there was a Latino couple to my left, and an Asian couple to my right also being aggressively searched. I briefly had to remind myself that this was not North Korea or Nazi Germany. This is the land of the Free.”
http://libertyblitzkrieg.com/2015/10/05/california-mayor-forced-to-hand-over-electronics-and-passwords-at-airport-compares-u-s-to-nazi-germany/
Was someone saying previously that the cops and the military would protect them post collapse…
Best of luck with that…. and best of luck protecting your little homestead from such men…. who will be hungry … I can imagine they’ll also be looking for young women… and slaves…
You may end up wishing you were dead…
“California Mayor Forced to Hand Over Electronics and Passwords at Airport – Compares U.S. to Nazi Germany”
He must not get out much or more likely he is trying to grandstand against the Patroit Act from 2001.
Yes, either he is an idiot or he is grandstanding. Either way I would not vote for him nor care about his airport experience.
The Romans claimed they were bringing higher civilization and ‘Roman Peace’ to the people they conquered: several tribes committed mass suicide rather than be ruled by Romans……
One can imagine many situations in which playing the game and being a ‘front runner’ might in retrospect seem to have been a bad move. Better to go quickly.
With mass internet surveillance, privacy of communication – and therefore freedom of association, and speech – have already effectively disappeared from the ‘free’ West, in fact if not in law.
Oh but you have nothing to fear if you done nothing wrong Mr. Mayor. HAHAHA. BAAHAAHAA.
Great software product opportunity. Two passwords, one real, one to bland useless data.
“Great software product opportunity. Two passwords, one real, one to bland useless data.”
That is easy, just don’t put sensitive data on a portable. For all i know I flights they are just checking to make sure it is a real computer, kind of like shoe bombs.
Gail, it seems to me that the world economy is able to handle high oil prices better than the US+EU+Japan. US+EU+Japan might need $40 or below for oil consumption to start to grow. However the world as a whole saw oil consumption still growing even with oil over $90. If that is the case, that implies to me world oil consumption(and production) will continue to grow until we hit the point that the entire world starts to squeal, not just US+EU+Japan. This seems to be a much higher price point than $40. Even $90 was not enough to force the world as a whole to cut back.
” If that is the case, that implies to me world oil consumption(and production) will continue to grow until we hit the point that the entire world starts to squeal, not just US+EU+Japan.”
It isn’t going to happen. Biofuels kick in at 80/barrel, and electric cars are cheaper per mile. If prices go to 90/barrel, then oil is definitely more expensive, and there are viable options to turn to and people will switch. Which means the market for oil shrinks, and the price goes back down.
What will you fire the electric generators with? Coal not legal anymore, natural gas requires new pipelines and the citizens refuse new pipelines, nuclear out of vogue. Smoldering wood chips like Burlington Vermont?
“What will you fire the electric generators with?”
It truly depends on the individual circumstances.
These are small scale biomass there is no smoldering:
http://www.allpowerlabs.com/
http://www.vulcangasifier.com/
Both companies will do international orders.
I think that the price level that can be supported over time changes over time, depending on (1) the trend in inflation-adjusted after-tax median wages, (2) the amount by which world debt is growing, (3) debt payment obligations accumulated but not discharged, and (4) changes in other mandatory payments, such as requirement to by health insurance, or quasi requirement that young people go to college, if they want a reasonable paying job. We cannot support as high a price level now as we could in 2008. How that the new price level breaks out by region is not clear–I haven’t studied it.
I realize that one of the big issues we have evaluating economic models is the need for un-biased data. I just discovered a goldmine at Google. They have created economic indexes based on the types of searches people do – like for new cars, credit cards, unemployment, bankruptcy, etc. I particularly like seeing the seasonal signal in the real estate searches, and how the general level tracks how “hot” the housing market is this year compared to last. Anyway, I thought you might enjoy seeing some measures of economic health that don’t depend on government agencies.
https://www.google.com/finance?q=GOOGLEINDEX_US%3ARLEST&ei=n_wTVtPVPMK-jAHdxK4g
“Anyway, I thought you might enjoy seeing some measures of economic health that don’t depend on government agencies.”
If she doesn’t I do! Thanks for sharing. 🙂 It is kind of interesting to note they use flash for that site, which doesn’t seem to googlish to me.
Thanks! I had never run across that before. The one drawback is that it is very US-centric. It is also tied to what individuals search for (thus, not really a leading indicator). I noticed that bankruptcies are quite low, after a long downward trend.
I used to think that as we reach limits, the powers that be will endeavor at all costs to extract the oil and essential resources that are the blood supply of civilization because they will realize the alternative is – rapid decrease in complexity. Now I realize that the global economy does not have a healthy, functioning central nervous system and all the organs don’t function with a view of the big picture. There is no intelligent communication between the train driver, the coal stoker and the passengers.
The commodity and energy companies that fuel society are fundamentally businesses that require paid workers and profits to function and large defaults in these areas will not be seen as limits being reached, especially with a oversupply of oil. If a tsunami of bankruptcies is how limits will be expressed, I think this sucker will go down in a haze of confusion and misinformation. People will wonder wtf just happened.
I agree.
Trane,
No. they won’t.
They will start a war and blame the shortages on it. Of course there won’t be any shortages for them.
England was bombed during WW-ll and their economy kept growing because of the war. War generates all kinds of demand.
Syria, looks like, will be under Russia rule.
I just wonder who will rule Iraq.
I have my money in Israel.
You are in for some profound disappointment.
When BAU goes — the food supply goes – security goes — the elites can stockpile all they want — the men with the guns with toss them out on their asses because they no longer have the means to incentivize the men with guns to protect them…
King Darius II of Persia, once one of the richest and most powerful men in the ancient world, was killed by his own bodyguards while on the run from Alexander the Great, much to Alexander’s disappointment for not catching him alive after the Battle of Issus.
+++++++
Exactly! And electricity companies will have virtually as many problems as oil companies (unless they are vertically integrated utilities). The more companies are broken up into smaller parts, to encourage competition, the bigger the problem will be with bankrupt suppliers.
There is a corporate monster in the making. If allowed to emerge, it will gain near complete control of one of the most vital elements to human survival: our global food supply. This monster – a conglomeration of two corporate entities, Monsanto and Syngenta – must be stopped for the sake of the planet and future generations.
“Monsanto and Syngenta Tighten Stranglehold on Global Food Supply”
http://www.truth-out.org/opinion/item/33105-monsanto-and-syngenta-tighten-stranglehold-on-global-food-supply
I wonder who controls the backbone of the internet? Or the electric grid? Are these two entities ultimately controlled by a large and diverse group? Or, are they ultimately controlled by a small group or even possibly an individual? Could a single individual decision be made to shut down internet or electric service to strategic cities or hubs?
I am pretty sure the internet could not be shut down by an individual or small group. The internet was designed by DARPA to survive nuclear war and even the root Domain Name Service is distributed quite widely now, across many nations and in many different geographical locations.
When the electricity goes off… the internet will go off….
7.3B will be starving … so I doubt they will notice or care that The Facebook is no longer available… (imagine those first few moments — the OMGs will pour forth as things bust apart … then silence —- LOL)
It’s interesting that you assume all the global power grids fail at once. Internet infrastructure normally has backup power, like generators with a stockpile of fuel. I don’t see every piece of it failing at once, that isn’t logical. Are you sure you aren’t painting this picture merely for dramatic effect?
I am intimately familiar with the workings of the internet…. yes data centres generally do have back-up power — enough to deal with outages of a few days at most…
They’d require more fuel for their generators to run any longer than that… the fuel trucks will not be coming though….
I don’t make comments to try to get a rise out of people…. my comments are generally based on thought-through positions that have been researched…
That said — who cares if the internet is up or down when collapse hits?
So what if people can’t get at their Facebook page… or send an email.
There will be no food.
There will be riots – violence – utter chaos.
“Are you sure you aren’t painting this picture merely for dramatic effect?”
You must be new here 🙂
FE has a fair point here. When the grid starts to degrade who decides which bit to maintain? There are some obvious conclusions, but it looks to me like “Celebrity Big Brother” and Facebook will be maintained until the very last day.
Thinking about that mindset is troubling.
But, I wonder if there isn’t some government agency or powerful entity that could purposely cut off electricity at key hubs on command. Or, even cut power to entire cities or even states. It that is possible, then would it not be feasible to use that as a mechanism to control the masses?
But wouldn’t doing that collapse BAU — which operates as a whole or not at all….
Meaning that those who cut off the power would also soon be without power …
Even if there were a huge conspiracy of governments with all electric utilities to turn off the power grid, that would not shut down data centers that have backup power. Even small data centers, like the one where I work, have backup power systems. We would remain operational for days, maybe weeks, depending on the availability of fuel. Fast Eddy makes a very good point that governments and electric utilities would be opposed to your postulated huge secret conspiracy. Don’t forget that parts of the net are in orbit, and powered by PV panels. I admit, scattered fragments of the internet wouldn’t be terribly useful, you’d need a critical mass to get useful connectivity out of it, but if even one satellite internet service provider remained online, you’d get connectivity between all of it’s customers who had independent power (like we do). The net has many nodes that bridge several subnets, and normal routing is designed to adjust to changing conditions.
How long do the backup power systems last? Weeks? Months? Years?
@greg machala – The Grid is designed to be shut down incrementally – for safety reasons if nothing else. This happens all the time in regions where supply is less than affordable demand, the best example is probably Lebanon. As far as I know, the only example of controlled shutdown because of civil unrest was the 1974 UWC Strike, where the plebs in the form of the Ulster Workers Council (UWC) controlled the quantity of electricity generated.
For diesel standby/backup power, storage for three weeks light fuel oil is usually provided. After that, it depends on how careful the local management is.
“I am pretty sure the internet could not be shut down by an individual or small group.”
It would be pretty hard, there is quite a bit more redundancy, then there is in the oil/gas, or even the electric industry. And most of it has backup power generation available.
The internet grid leverage our investment in the telecom industry to get started.
The design for the internet is a far more advanced design then the electric system because it was designed much later and designed for failover. It is what we are attempting to do with the electric grid.
It is similar to the telecom industry upgrading their substations from analogue to digital. I am not even sure they have finished this, and they have been working on it since the 90s. It is time consuming and expensive. Not to mention the cell phone has essentially replaced the landline.
Widespread electrical outages would seem to be the big risk, wouldn’t they?
“Widespread electrical outages would seem to be the big risk, wouldn’t they?”
Yup. Thus the need for more distributed resources.
In large data centers they have onsite generators, and battery backup available. No one can afford to depend solely on a utility for providing 100% uptime. It just isn’t realistic. Nothing against utilities at all, storms and accidents happen. A multi-billion dollar global businesses need 100% uptime. The cost of batteries and onsite generation to keep it running is costly, but less costly then a week of downtime.
I use a backup battery for my computer. Where I live, in a part of the country with above ground transmission, frequent electrical outages are expected by everyone.
“I use a backup battery for my computer. Where I live, in a part of the country with above ground transmission, frequent electrical outages are expected by everyone.”
You also typically get over/under voltage protection which protects your computer. A lot of people are installation that type of stuff(line conditioning) for their whole house at the box.
Where I grew up, it is common to actually have backup power generators for outages.
Solar and auto industry has driven down the component price of the electric gear needed for whole house backup systems, and made more options available. Like you can get an inverter that also does the line conditioning, autostart generator and autotransfer functions as well as battery backup. It is pretty much the same electrical components you have in a Volt, whole house generator or solar.
But I come from the camp, where I think your money is better spent on a solar installation, then a whole house backup generator system, since the wiring is the same, and you can use the solar all the time, and it is extensible to add batteries, a generator, etc. with very little extra work.
first: no it cant. the internet, and when i say that, i mean the IP protocol, is a distributed system designed for resilience, meaning, parts of the system can go dark without hurting its overall ability to function. with the DNS system, that resolves domain names into numerical IP addresses, that’s a different story. it is atm still maintained by the ICANN, an american non-profit, but thats about to change as we speak, because they want to give it into international hands to distribute the control over this system. about as long as you can send IP packets over a wire the internet is gonna work, maybe not in the form you know today, maybe it will disintegrate into four or three or four big parts, as maintaining the cabling across the atlantic & pacific is bit of a task, but inside of europe, US, it is very very unlikely to fail completely. it has been build by the DoD & ARPA do ensure communication during & after an atomic war.
now to the electric grid. atm the electric grid is a very simple system, compared to the internet. there can be blackouts and stuff, up to a few years ago there was no protocol or signaling whatsoever to run it. BUT: this is currently about to change. the smart grid, as they call it, applies some if the technology of computer network system to the electric grid, on one side, that is a good idea, because you can include a distributed system of small renewable suppliers more easily, BUT that is also a point where i see problems starting. these devices to manage the smart grid at the end user, smartmeter, turn out to be very insecure from a computer network integrity perspective. meaning one could hack into this system and shut it down, or, because they are all black boxes, no one ones what is exactly inside, the company providing these systems could install a backdoor or be forced to install such a backdoor by someone who has an interest in such a kind of things. and yes, if they are installed everywhere and that happens, one could litteraly crash the grid. that’s why we network engineers fight for opening these black boxes, so everyone could see what is in it, and also fight that companies start to care for security when building such systems.
if you have more questions on this or want to have it explained in detail, just ask. it is extremely important to me that people start to understand the internet, because i think there is a lot to learn from its design approach.
if you want to learn something about the security risk of smart grid, without having to go to all the technical details, i recommend you to read the roman ‘blackout’ by marc elsberg, it is fictional but gets very close to what could happen and is as technically sound as a fictional story could be.
if you are into the tech, i recommend you these guys: https://www.youtube.com/watch?v=iuMd11kDUz8, they have done interesting work on SCADA, the computer system that is used to monitor & run industrial facilities.
“if you are into the tech, i recommend you these guys: https://www.youtube.com/watch?v=iuMd11kDUz8, they have done interesting work on SCADA, the computer system that is used to monitor & run industrial facilities.”
That is a pretty cool talk! Thanks for sharing!
I have wondered (not often…) if it might be possible to merge one’s consciousness with the world wide web —- kinda like the mind-meld from Star Trek — so that one no longer requires a physical form…. one’s existence is digital …
The implications are profound — this would represent immortality of the conscious part of humans (the only part that really counts…) — we would be free to explore the universe by simply searching for what interests us — and going to the digital representation of that place …
We could also go back in time — or forward in time — the only limit being our imagination…
Problems such as climate change, resource depletion, over-population would no longer matter — because we would no longer have a physical world… we’d all be hops and beeps on the http://www…. which technically … is infinite….
Perhaps Elon Musk can get around to making this happen when he finishes with his silly car project and his mission to Mars….
I noticed that all government data disappeared from the Internet during the last government shutdown. Even files I though I had downloaded no longer “worked.”
Even if the Internet is working, we need the data providers to be in condition to provide data.
For the record….
I had not had such thoughts until the moment I wrote that … and I still don’t….
” it is extremely important to me that people start to understand the internet, because i think there is a lot to learn from its design approach.”
The internet works more like mail delivery, a package gets sent from point A to point B, and it doesn’t matters the route it takes. It could be plane, train, car ship, etc.
For electric even if it was all interconnected, which it isn’t, is more like put a generic electron on the wire, and it goes to the nearest person who wants to use it.
If you are generically talking about the interconnections and multiple routes the electrons can take to a destination, then I agree. The physical layout, with repitition, and multiple paths seems like a good idea, and that is starting to happen at least in the US, and has been for a good 10 years.
If you are into control protocols, for like meters, substations, etc. then it can work more like the internet but a lot of that is more of a proprietary protocol. Home electronics, from the meters to devices in the home, use mesh networks.
Dude — are you sure you are on the right web site?
This is where we discuss the end of the world…. pretty much exclusively….
first sorry for spamming u with my nerd stuff ;). i will stop that, and continue listen. as i told you, an not a economist. i have a pretty hard time even understanding sometimes. and to your first question: ‘uploading’ is scifi and probably will always be. the human brain is such a massively parallelized super computer, i am afraid we cannot build anything like that. the human brain project tries to simulate very very simple processes in the human brain and even on that they are only at the very very very beginning to understand how it works.
I think you’d find it useful to check the archives and read the most popular articles on FW….
Kali, I would add the human brain has 100 billion neurons. A chip has 10 billion transistors, setting aside the vast differences, 10 chips would have an equal number of elements. Oh, but wait, each neuron has 10,000 synapses. So more like 100,000 chips have the same number of elements. Oh, but wait, the physical location of each synapse can conveys timing information, let’s say 16 bits, where each transistor is simply one bit of information. So, maybe, 1.6 million chips would have the same information content. If we can double the number of transistor every three years for the next 63 years we might be there. I will not be holding my breathe.
“Dude — are you sure you are on the right web site?
This is where we discuss the end of the world…. pretty much exclusively…”
You might. We don’t.
.
” on one side, that is a good idea, because you can include a distributed system of small renewable suppliers more easily,”
Beyond that, the utility can monitor where outages are.
They can shut off people backfeeding the grid causing islanding and creating a dangerous situation for line workers.
They can shut people off who are improperly backfeeding the grid. (which is a huge problem, from people who plug generators into their house, and don’t shut off the main breaker. It is also illegal.)
They can remotely gather usage data. ie no reason to send out someone to check the meter.
There are drawbacks to it. The security issue has been addressed to some extent, most of it is proprietary protocols as far as I can tell at the meter. It varies by meter manufacturer and those have evolved so the protocols are more secure, and are starting to get more standardized. A big part of the reason for it, is you need proprietary sending/receiving devices since you are sending it down the power line. The on the wire protocol has to be different. The overhead of adding full network stacks made it more expensive.
The bigger issue is the privacy issue, since you can figure out your home/away patterns. Some areas will let the utility heat run your hot water at low usage times for you, or just stop your water heater, when the load is too high, or other load balancing things like that.
All that being said, it would be nice to know what the utility had your meter set for.
thank for sharing your knowledge on smartgrid.
“If you are generically talking about the interconnections and multiple routes the electrons can take to a destination, then I agree. The physical layout, with repitition, and multiple paths seems like a good idea, and that is starting to happen at least in the US, and has been for a good 10 years.”
exactly. i was thinking of resilience even more generally, like decentralizing, reducing the number of system relevant components, …, for many kinds of systems, not only power & communication.
“A big part of the reason for it, is you need proprietary sending/receiving devices since you are sending it down the power line.”
why does it have to be proprietary? isn’t it a IEEE standard? if you are talking about security, wouldn’t that be security by obscurity?
The bigger issue is the privacy issue, since you can figure out your home/away patterns.
oh yes. big, big problem.
i would have many more questions to you on smartgrid, but i don’t want to go on people’s nerves with talking off-topic.
” i was thinking of resilience even more generally, like decentralizing, reducing the number of system relevant components,”
Usually a distributed system has more, smaller, cheaper components. I think what you mean is more redundancy, and single points of failure.
“why does it have to be proprietary? isn’t it a IEEE standard? if you are talking about security, wouldn’t that be security by obscurity?”
We are actually talking about different layers. You are talking about TCP/IP, which is a much higher level protocol, then the actual physical on the wire protocol. Tcp/ip runs on top of the physical layer protocol whether it be power lines, copper, fiber, or wireless.
TCP is a IEEE standard.
They don’t have to be and most likely wont end up to be, but some of it has to do with multiple companies having patents and trying to recoup their investments.
Security via obscurity isn’t necessarily bad for a couple of reasons, the first is logistics, of replacing meters with security flaws, and the second is power distribution companies do not want people messing with them at all. since they are high voltage, bad things can happen. Not to mention a lot of people already like to steal from them.
It doesn’t -have- to be proprietary. It may end up using more standard components to reduce cost, but the standard components you would use, weren’t nearly as cheap or as good as what they were when they first started to design smart meters.
There is a whole logistics and money issue. The whole energy industry is really based on like 30-50 years upgrade cycles which help keep prices low. The first smart meters installed are most likely obsolete relative to today, but utilities haven’t finished replacing all the analogue ones yet.
There are a few other technical issues, like home mesh network developments for the “smart home” that may need to be integrated in the meter as hardware pieces that can’t be done with software. It takes time to hammer this stuff out.
There is no need for the utility to have any information beyond my monthly usage for billing. We could make a system where the utility puts its price up on the web and then your home computer decides when to turn on and off your appliances. In other words the people have power and control. The utility is a servant.
“There is no need for the utility to have any information beyond my monthly usage for billing. We could make a system where the utility puts its price up on the web and then your home computer decides when to turn on and off your appliances. In other words the people have power and control. The utility is a servant.”
CAISO is doing “real time” (it is actually every 15 minutes) variable market rates. I don’t know if it made it to the consumer market yet, but it is available for commercial. I read something like they were going to do it though.
The software is already written. There are a couple of companies that do it for peak shaving along with storage. Google and a bunch of other companies are doing the “smart home” which is home controlled heating/coooling, and can be extensible.
The pieces are starting to get to the point where it is possible
They’ve been trying for a while. If they succeed, and they will eventually, it will only make things slightly worse, as both corporations are already monstruous and already control almost all the seeds (thus the rest of the chain), and quite a large share of the land use.
Drove by a new subdivision near Christchurch … no houses yet only streets… one was named Monsanto St.
Go figure…
You go to the far corners of the earth, and you can’t escape Monsanto!
Fast, check the Christchurch newspaper for my position wanted ad this Saturday. 🙂
Hope you find a taker.
You should check to see which skill sets are in demand in NZ as the employer must prove that he/she cannot fill the position with a local hire….
So even if you get a job offer they have to advertise it ….
A good immigration lawyer would be helpful as they would know the angles that craft things so that INZ are more likely to approve an application — a good one will also let you know the odds so that you don’t waste your time and money if they are not good…
Governments should regulate Monsanto and Syngenta, but don’t. Harms are not sufficiently obvious and near-term.
Surely the central banks are involved here — the minute they come off the gas this happens
http://www.zerohedge.com/news/2015-10-06/glencore-stock-re-crashing
Not good! We don’t need big bankruptcies.
“We don’t need big bankruptcies” – I’m not sure I follow your logic.
In a sense the bankruptcies have already happened – e.g. I hear Italian banks don’t have to ‘fess up to losses for six years. I tend to go with the forest fire principle – frequent controllable small fires are preferred to a few big wildfires? Fraud happens.
I was trying to say that huge bankruptcies are a problem. This is because they often point to an underlying problem, causing other bankruptcies as well.
Let’s take a look (no Street View yet as no houses built)
Monsanto St
Halswell
Christchurch 8025
New Zealand
https://www.google.com/maps/place/Monsanto+St,+Halswell,+Christchurch+8025,+New+Zealand/data=!4m2!3m1!1s0x6d321f95d80c975b:0xb3bb578997d8edf0?sa=X&ved=0CBsQ8gEwAGoVChMI8YKvscmzyAIVBTCmCh0N0wtw
https://www.google.com/maps/place/Monsanto+St,+Halswell,+Christchurch+8025,+New+Zealand/@-43.5715998,172.5421989,518m/data=!3m1!1e3!4m2!3m1!1s0x6d321f95d80c975b:0xb3bb578997d8edf0
It is right next to an existing development that is super dense packed large (4000-6000sqft) houses. In a country with such a low population density why pack houses like that?
Ah – _those_ bankruptcies. You ain’t seen nothing yet.
BTO did a song about this….
It’s all about perspective – call this pre-bankruptcy bezzle or alternatively pre-bankruptcy febezzle or whatever :
http://www.zerohedge.com/news/2015-10-08/bezzle-bummer-mirage-psychic-wealth
“In a delightful essay, Warren Buffett’s business partner, Charlie Munger, pointed out that the concept can be extended much more widely. This psychic wealth can be created without illegality: mistake or self-delusion is enough. Munger coined the term “febezzle,” or “functionally equivalent bezzle,” to describe the wealth that exists in the interval between the creation and the destruction of the illusion.”
Glencore will fail unless commodity prices soar or someone buys their stock.
Plunge protection teams stepping in to buy?
Share price recovers… plunge protection exits… share price drops… plunge protection enters…. shares back up…
Same sort of thing happened on a larger scale in China recently … the central banks just keep on buying until the punters get the message — BAD = GOOD… now stop selling or we will burn you badly … we have unlimited money and we can drive this bitch higher whether you like it or not….
Glencore – Too Big To Fail?
Not sure if I am right — but anything goes in the Age of Desperation
I’ve been looking on at the timing on commodities, especially metals. Bottom line is that there is a bunch of lossmaking projects in China that need closed. Will that happen? Who knows?
Another big company blow out….
Several months ago activist Nelson Peltz may lost his proxy fight against DuPont, but in retrospect he may be counting his lucky stars as moments ago the company became only the latest chemical giant to admit the gruesome reality of the global economic slump driven by a historic USD surge, when it not only cut its second half operating EPS from $0.75 to $0.40, in the process also slashing full year operating EPS from a prior guidance of $3.10 to just $2.75
http://www.zerohedge.com/news/2015-10-05/dupont-stock-soars-after-ceo-quits-and-company-slashes-q3-eps-guidance-nearly-50
Forgot to post the punchline…..
And so despite the just admitted 12% collapse in full year EPS, the stock is surging and is now up 10% on a day in which the company just cut its 2015 EPS by 12%…
Bad is Good!
Article from 1975: The World Will Be Out of Oil by 2015
As a society, we need to get off of fossil fuels. Not because our planet is going to run out of them, but because it’s destroying us. This is the 21st century. We have the technology. We can’t wait for the oil to run out. Because it’s not going to anytime soon. Just look at this prediction from 1975:
The United States may be totally independent of Arab oil by the year 2015.
Unfortunately, so will everyone else because statistically that will be the year the last barrel of oil is pumped from the last well on earth.
Of course, there will be no “last barrel” as such in 2015 because the world’s oil fields cannot continue to produce at current levels much longer.
The 1975 International Petroleum Encyclopedia, updated and published annually by the Petroleum Publishing Co., sets proven world reserves — the oil known for a fact to be present and recoverable by current technology — at about 103 billion metric tons. The current world annual consumption rate is approximately 2.8 billion.
These were not the predictions of some crackpot. It’s from a September 28, 1975 article in the Brownsville Herald, syndicated by the UPI and printed in newspapers around the country.
Just for fun the above is posted
BTW…read from the book Oil Kings by Andrew Cooper the Shah of Iran predicted our situation today back in the early 1970’s! The tracking, tar sands and deep well arctic drilling, sect. The Shah said the obvious, we are waiting a precious resource on frivolous things.
Also, from the book I believe we give TPTB too much credit, seems they react and make ill advise decisions, rather than take the prudent long term view.
Read in one account Hank Paulson stating that he hoped no other “crisis” happened during the rest of his term as Treasury Secretary, at least until he got out. These folks in the position of power go by biased, gut feeling, rivalary, and nepotism.
Bet someone will figure a way to squeeze the oil towel a little more for a decade or two.
The other “low cost solution” would be going to war, as stated by Kissenger during the oil embargo.
That got the Saudi’s attention and they came around real fast.
If you haven’t read the article I posted from 1957 by Rear Admiral Hyman Rickover, it is interesting too. http://ourfiniteworld.com/2007/07/02/speech-from-1957-predicting-peak-oil/
It says,
I have a book by some professors at big name universities circa 1955 that says the same thing. Sorry can’t find the book at the moment. They come down in favor of nuclear from uranium in granite rock as there is no storage of granite rock.
shortage
Maybe no shortage of granite rock, but getting uranium out would seem to be energy intensive.
Thank you, Gail. I remember today a past TV interview of Ad. Rickover. He revealed he thought we, humans, would end up destroying ourselves; probably via nuclear war.
In that vein, he would forgo all his career accomplishments as the ‘father of the nuclear Navy” and honors, awards if nuclear weapons never existed.
As far as fossil fuels are in that regard, it is obvious that is the “prize” to be fought over. As former President George H Bush stated the “American Way of Life” is NOT negotiable.
So when push comes to shove, send in the troops.
The Saudi’s and others have their oil infrastructure set to destruct in that event.
Should be a good show when that occurs.
Right, Fast Eddie?
yes – quite the show — war, famine, pestilence…. and we all get starring roles…
Re the speech:
Anyone who has watched a sweating Chinese farm worker strain at his heavily laden wheelbarrow, creaking along a cobblestone road, or who has flinched as he drives past an endless procession of human beasts of burden moving to market in Java – the slender women bent under mountainous loads heaped on their heads – anyone who has seen statistics translated into flesh and bone, realizes the degradation of man’s stature when his muscle power becomes the only energy source he can afford. Civilization must wither when human beings are so degraded.
http://ourfiniteworld.com/2007/07/02/speech-from-1957-predicting-peak-oil/
That paints a partial picture of what a word without oil looks like…. only it will be far far worse … because we have 7.3B people now and we have ruined the soil and have these things called spent fuel ponds…
Get ready for the Nightmare
It is rather incredible how long decision makers and advisers have known about (and foretold) the predicament we are in right now. What is most interesting is that as time goes by the warnings of the past slowly become ignored as the day of reckoning nears. There are no new sources of energy or resources found. We constrained by and live on a finite planet. The warnings of the past are increasingly ignored. Drill baby drill is about the only real policy we have. It has to ultimately fail. If there were a solution to the energy and resource problem we would have seen it implemented by now. But, all I see and hear is denial and pie in the sky techno fantasy about technology that is always 10 years in the future. If there is a huge problem that has no solution what would you do if you were in charge when the day of reckoning comes?
We still can’t turn lead to gold either…
Immortality has never been achieved…
The financial incentives to come up with a replacement for oil are epic….
Yet our greatest minds have been unable to find a solution…..
Some things can’t be done…
You know what Dirty Harry said about opinions?
I don’t do opinions….
Did he say anything about arguments? You know — assertions based on facts and research vs assertions based on hopium, wishful thinking — concocted while dancing about the fire to Koombaya and feeling groovy…..
The pelvic (Freudian) view is quite apparent in Western Thought. However, Nature seems remarkably adept in evading being nailed down. Focus on assumptions if you have any wish to focus on what is.
That’s the problem with the Kiwis they think it is still the 1950s with a mellow lifestyle and good work life balance (I saw it in a immigration video). Of course with enough hydro power to run farming and easy water transport they might be right if they can just stop immigration.
Even if they knew, they didn’t really understand what to look for as we approached limits. The folks who have been looking at this for a long time have assumed that high prices would be the problem. They never thought about the possibility of a turning point, and low prices being the problem.
“They never thought about the possibility of a turning point, and low prices being the problem.”
They also never thought about alternatives or making their industry more efficient either. “We have done it this way for 100 years…we aren’t going to change” I have heard that line a 1000 times from different businesses in 100 different sectors. They either change or fail.
Even someone like the government trying to prop them up, results in an industry wide shake out.
The economic key is to not have them fail all at the same time suddenly. 🙂
It is hard to see that generation that is smaller and used less of the time would lead to efficiencies. It would seem to require much more transmission, if nothing else.
In the US, the ratio of (actual electricity generated/ generating capacity)–(in other words average capacity factor) fell from 54% to 44% between 1999 and 2013 based on my calculations using EIA data.
“It is hard to see that generation that is smaller and used less of the time would lead to efficiencies. It would seem to require much more transmission, if nothing else.”
In most cases, you are spreading out the transmission over a longer period of time which also allows you to be able to run generation at more efficient levels for a longer period of time.
The only time the lines are at max capacity is during the peak hours. The rest of the time they can be as low at 10-20% capacity. The money for the lines is already spent. You also get more line losses the closer to maximum capacity you are.
100% capacity for a power plant usually is not the most efficient. It can go to 100% of nameplate, but it might operate the most efficiently at 50% of that capacity. In otherwords a plant operator can make more money per energy input unit by running at 50% capacity for 8 hours, rather then 100% capacity for 4 hours.
Battery storage can be located just about anywhere on the grid. It doesn’t have nearly as many permitting restrictions for location because of the lack of emissions, noise, leaky fuel lines, etc. They also can come in different sizes, and remain equally efficient, so if you scatter 1000 1 mw batteries about the grid, you have the same overall efficiency and capacity as 1 gw battery. You don’t get the increased efficiency by scaling up like you do with power generation.
The difference can be the installation cost, which would include wiring, inverters etc.and -space-. Which can go either way. And you need a way to justify the expense or recoup your money. There are various models for it. But they haven’t been all hammered out to what is the best. There are several laws and regulations and in some cases profits in the way. It takes a while to sort this stuff out in the US because of the variances and things at the local levels.
The peak oil folks assumed that high prices would be the problem…
But the insiders — the advisers to the PTB — the PHDs in the think tanks with the super computers…. who have been looking at this …..
We do not know if they made the same assumptions… and we will never be told … because their findings are not for public consumption …
What is for public consumption is that ‘there is plenty of oil left — that we have plenty of time to wean ourselves off fossil fuels…’
I would be mighty surprised if they had not modeled the scenario we are facing…. based on the policies they have been rolling out — they appear to demonstrate a very thorough understanding of what the nature of the problem is….
“But the insiders — the advisers to the PTB — the PHDs in the think tanks with the super computers…. who have been looking at this ….. ”
You don’t need to be a phd or need a supercomputer to think this out. It isn’t hard. Most people over think it.
“What is for public consumption is that ‘there is plenty of oil left — that we have plenty of time to wean ourselves off fossil fuels…’”
We have been told by the industry there is plenty of oil and FFs which circulates via MSM. What they aren’t really telling you is the -price- they want to charge for that oil.. 🙂
What we set up in the US, is a way to counter act the price of oil, as it rises. EVs while you might have issues with them, do in fact counter the effect of rising oil prices for the consumer. Solar does the same thing for coal. They don’t work for everyone, nor are they expected to. But they do lower overall market use, which has a net effect of a lower overall price.
You can think of them as a big government consumer price protection ponzi scheme.
The Russians want to put OPEC back together, so enjoy low oil prices while you can. If they are successful, the price will go back up to 100/barrel and we will have 4 dollar gas again. But we at least can counter that with EVs this time around.
These indeed do counter the rising price of oil. The problem is the opposite, however–the falling price of oil, and the inability of governments to afford maintaining roads. The government has its sights set on mitigating the wrong problem.
“The problem is the opposite, however–the falling price of oil, and the inability of governments to afford maintaining roads. The government has its sights set on mitigating the wrong problem.”
Maybe. The problem in the US, is our economy can’t sustain 40b/mo losses without the need to increase debt or print money. 40b/mo that is no longer available to create tax revenue to help balance the budget. You are pointing to one small portion of most government budgets with roads which is a misnomer, because roads, no matter how much money you spend, will never all be perfect. (this isn’t saying that some of them aren’t currently in terrible shape.)
On the other hand, the portion the government is directly working on of the 40b/mo problem is only a small portion of it. However, the small portion of that problem will also have a ripple effect across the entire economy. It just isn’t an immediate fix, however, it does create a long term ripple effect across multiple industries, and it is creating positive cashflow from exports which is something the oil industry isn’t even close to doing, nor do I think they can even if we allow them to export oil.
Holding on to losers in the hopes they can recover is the fastest way to lose all your money in your portfolio. It is in the top 10 for newbie investing mistakes.
“If you haven’t read the article I posted from 1957 by Rear Admiral Hyman Rickover, it is interesting too. ”
Both seem pretty accurate. We have gotten more efficient at both locating and extracting, and the price has also gone up. We aren’t living at the same standard we did in those years either.
The nice part is we are once again trying to do something about it and while the solutions so far, haven’t been amiable or drop in replacements, or at a low enough cost to satisfy everyone. We at least working on solutions and improving the technology.
Hello Gail, do you think that the shale companies will be bailed out by the government when the bankruptcies start because the US government believes they are important for national defence as less domestic production means more dependence on middle eastern countries for oil?
No, I don’t think so. First, the US government is already hurting. We are already talking about the government “running out of money” by November 5.
http://www.businessinsider.com/obama-government-shutdown-cr-bill-2015-10
There are a lot of oil companies “hurting”. There are also some companies that specialize in natural gas that are hurting. Many coal companies are in terrible shape. I am sure that there are many other commodity companies that are in terrible shape. The US government would have a hard time justifying adding to its budget deficit the bail out of all the oil companies, much less all of the others.
Gail, I am interested to hear more about natural gas companies hurting and about coal companies. It seems to me if you are the worlds cheapest energy, coal, you have margin to raise the price? On nat gas it power the whole northeast of the U.S.
I was just looking at a few financial statements of companies. The one model that seems to work is the vertically integrated utility, one that goes from the mines up to selling the electricity. If electricity is treated as a utility, then needed rate increases go through. They can get proper pricing, and they don’t have to worry about defaults of suppliers.
What happens for other coal producers is that they have way too many fixed costs. Taxes and royalties are most likely fixed–not based on profitability, but based on governments view of how much they should get, based on higher prices of the past. Lease payments were agreed upon based on when expectations of sales prices were higher. Payments to workers clearly don’t change, unless a lot of people are laid off. And of course debt repayment is a big fixed cost. Even if the coal company did not need a huge amount of debt for its own operations, it may have needs them to build ports for shipping coal to China. These are not being used much now.
Lets just think out lout here: If the gov’t bailed out the oil companies – hmmm?
I don’t think oil prices would increase so that wouldn’t be any incentive for them to spend money to find or develop expensive new oil fields They wouldn’t hire more staff because prices are too low. They could pay off debt but that’s about it.
In the absence of new (oil) discoveries (to offset depletion of existing wells), at some point it will become impossible to replace losses due to depletion. The reason being that it takes years to go from the exploration phase to production. That’s when the shortage begin to hit. And you just can’t print oil.
I also do not see how bailing out oil companies will stop the bigger problem of a deflating global economy.
++++++
The reason governments have historically taken over oil companies is to squeeze every dollar of (tax) revenue out of them that they can get. Once oil companies are “takers” rather than “givers,” and governments have virtually no other sources of funds to use for bailing out companies, I don’t think government take-overs will be popular. Can you see raising the government debt ceiling to pay for takeovers?
Gail, the average US citizen has no idea what the debt ceiling is and does not care to know. The few who have some idea are mostly calculating “what’s in it for me”. If they see raising the debt ceiling to 200 trillion as making money for themselves they will favor it and at this point of manipulated mangled politicized economics I will join them.
good California ISO sites
http://www.caiso.com/Pages/pricemaps.aspx
price now 3.76 pennies per KWHr.
http://www.caiso.com/Pages/TodaysOutlook.aspx
28.9GW current usage
4.1GW current renewables (1.8GW of PV and falling night is coming)
18:00 hours in California down to 3GW renewable on 29GW load. And of course electric is 20% of total. 10% of 20% is 2% RE in Cali now.
Last 2 Times this Happened, the US was Falling into Recession
But what’s different this time?
Revenues of the companies in the S&P 500 have been declining all year. Companies and analysts blamed the strong dollar. They blamed China. They blamed oil, Greece, Japan, and a million other things.
In the first quarter, revenues dropped 2.9% from a year earlier. In the second quarter they dropped 3.4%.
And in the third quarter, according to FactSet, they’re expected to decline by 3.4%.
The last time year-over-year revenues declined two quarters in a row was in 2009 during the Financial Crisis [read… Revenue Recession Spreads past Dollar, Energy]. Now there have been three quarters in a row of revenue declines.
Given this revenue debacle, corporate earnings growth has been shrinking. By Q2, it turned negative (-0.7%), according to FactSet.
And in Q3, earnings “growth” dropped deeper into the negative, now estimated at -5.9%, despite all the expert financial engineering, share buybacks, and accounting tricks that companies have been leveraging with great skill and singular dedication.
The MSCI AC world index, which captures large and mid-cap stocks across 23 developed markets and 23 emerging markets, has now been dropping for two quarters in a row – worst performance in four years.
Turns out, for the companies around the globe that comprise the MSCI AC, earnings “growth,” as measured by 12-month trailing earnings, is in even worse shape than for those in the S&P 500: by Q2, it was -7%!
So this is a global thing: More http://wolfstreet.com/2015/10/05/last-two-times-this-happened-us-fell-into-recession/
If the central banks have anything left in the tank now’s the time…. because this is getting up a head of steam…. and once it really gets rolling … there will be no stopping it….
The bankruptcies will come fast and furious — and that will take down the financial system…. and with it, BAU….
Come on Wizard — whatcha got up your big floppy sleeve?
https://pbs.twimg.com/profile_images/1564829731/wizard2_400x400.gif
Doesn’t matter. In fact the the system needs another crash to serve as the catalyst for more centralized control.
The only thing that needs to be determined is who to sacrifice next. This admittedly is not easy, but it can be done. The banks, energy producers, and military will never be sacrificed. They will be left standing for decades.
My vote is in tourism/auto/airline industries. People already have enough cars and it would be extremely problematic trying to prop this all up. Another 5 years, and education and healthcare can probably go as well. Housing prices may very well need to be allowed to be decline, but here you just need to subsidize basic maintenance.
Like I alluded to earlier, I expected the gun manufacturers to go down as well, but it seems they are being propped up in order to keep the populace well trained in arms to make good soldiers for the permanent war in the Middle East, and those not willing to go die in the desert fighting Arabs can be recruited to join the paramilitary forces at home and duke it out with armed insurgents.
Agriculture and entertainment are low cost, minimal inputs and they can go on for a long time.
Dolph9, I fear you have a lot of it. The car part will cause trouble as Kunstler has pointed out. The houses that are not in the village become worthless. As I said tourism is already dead in New England.
We differ on guns. It seems to me the federal government is trying to drive down the supply of ammo. Shredding jackets from military spent rounds and sending it to China rather than the traditional sell in US for reloading.
As they say never let a crisis go too waste. A step down is an opportunity. Will be interesting to see how they play it.
We will know things are bad when lawyers, doctors, judges, politicians take a hit. Not this time I think.
Actually agriculture is crucial for every country. Self-sufficiency in food – this is a long-term goal. Without it all other things collapse. Or you are slave to other nation(-s), which is/are feeding and defending you. Like Middle-East.
dolph9,
They have already been sacrificing the auto infrastructure (i.e., not adequately maintaining bridges, roads), and this will accelerate. I expect triage type transportation maintenance, esp. to secure food transportation. If people are going to be rendered a lot less mobile and trapped in suburbia, the supermarkets will have to be kept stocked in order to keep them pacified.
A lot of office work can already be done via telecommuting, but is not. Simply rationing/limiting gas for personal uses like commuting would effectively force a lot of companies to adopt and integrate a “virtual office.” Would save on wear and tear on the roads as well. And would decimate the tourism industry.
Rationing gasoline would make it even harder to keep oil prices up. We have an oversupply of oil, not an undersupply.
Spending more on road repairs would help keep the price of oil up, and would maintain roads for a while longer. So perhaps we should be “pushing” for more roads and infrastructure repairs.
What about a WPA? Live in camps removed from community, limited communications, long hours, heavy physical work. Like prison keep people from making trouble. And those who do not join have no right to complain. Two birds with one stone.
This time Wolf is showing world growth in profits turning negative. This is worse that “just” US profits turning negative.
There is now where left to grow.
Alcoa Inc. will kick off the earnings season after the markets close on Oct. 8. Analysts project income for S&P 500 members dropped 6.9 percent in the third quarter.
http://www.bloomberg.com/news/articles/2015-10-05/asian-futures-tip-more-stock-gains-as-rate-outlook-fuels-rebound
I fail to see how this turns around in Q4…. we are past peak profits….
Worse than peak oil…
Collapse – when it comes — will be fast… like a rond 500 tonne stone — pushed down Mt Everest
In the answer to my comment to the previous blog by Gail, I was asked by her whether our current leaders are old as regards the gerontocracy in the falling Soviet block. I answered that not so old as regards the government leaders.
But, who are the real leaders today? Well, its maybe the heads of the central banks, the governments being totally dependent on what the central banks can do. And we can see that the current generation of the heads of the central banks of US, Japan and EU is older than the previous one.
Furthemore, we have leaders from the collapsing countries (the Pope Francis from Argentina, Mario Draghi from Italy, Angela Merkel from the former East Germany) or poorer parts of the population (Barack Obama).
I would say that this is the sign of the comming collapse: the leaders do not come from the prosperous populations anymore, but from the ever larger poorer populations. Or they are older. There is a lack of young leaders from prosperous populations. This is surely the sign of the gerontocracy and the nearing collapse. As those, who are intelligent, try to avoid being exposed to the more and more disappointed masses. The Italian (i.e. former Roman Empire centre) political scene, with its short-lived governments and figures like Silvio Berlusconi and Beppe Grillo, showing us how the collapsing democratic system turns into grotesque…
Interesting ideas! Obama definitely did not come from the 0.001% group, the way the Bushes and the Kennedys did, and perhaps even the Clintons. Obama wasn’t the poorest of the poor. According to Wikipedia, he went to Occidental College (private liberal arts college) before transferring to Columbia University in New York. He later obtained a law degree from Harvard Law School.
I picture a string … being pushed…
http://www.zerohedge.com/news/2015-10-05/central-banks-now-dangerous-situation-youve-thrown-kitchen-sink-it-whats-next
Good question — what do you do now? More QE I suppose…. what else it there….
I suppose the PTB could go to the wailing wall and moan a little…. their gig is just about over… (unfortunately we call go down with that ship though…)
There may still be some hope of preserving the notion of central bank omnipotence here if everyone suddenly comes to their senses, steps back from the money printing, and lets creative destruction purge the system. That would allow the world’s foremost monetary authorities to start from scratch and perhaps reclaim some credibility on the way to rebuilding things.
Of course that won’t happen because no one is going to completely admit that they have failed which is why the cycle depicted in the graphic below will simply play out over and over until the entire house of cards collapses on itself.
Someone doesn’t get it…..
The playbook says the banks now
1) take ownership of everything since the owners have defaulted on at least one loan
2) get recapitalized by the central central bank, that is pass ownership up the lie to the top
3) start all over again, start making loans
OK the people they make loans to this time around may have new and unique business models but hey business is business.
Somehow I don’t see that being an option to extend BAU…. but who knows…
My money is on a blatant increase in helicopter money — since that is starting to make the rounds of the MSM…. I say blatant because we’ve had helicopter money surging forth for years now — student loans, subprime auto and home loans, food stamps, disability payments…. etc etc etc…
What some clever person should do is set up a consultancy — Helicopter Money 4U —- the helicopter money is there for the taking …. the sheeple just need a little help finding it….
HM4U’s business model could be a 2% load — then 20% of all the heli money it finds for you…
The perfect business for a laid off hedge fund flunky….
The first time 2008 was about saving the rich. Not this time they go down too. Now it is about saving the system. No need for helicopter money for the corporations this time. Nationalization of the corporations this time. Object and loose your comfy jobs as executive of xyz corporation’s abc division.
Do you have a job?
Anyone with a pension – do you still get your monthly cash?
Anyone own stocks – or have a pension that owns stocks? Been a great 7 years…
Grocery stores still open near you? How about the ATMs?
I’d say we’ve all done quite well because of the Fed’s actions the past 7 years….
Falling number of workers in the work force in Europe and Japan isn’t helping their problems either.
It doesn’t matter… till it does…
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/10/20151005_oops.jpg
In the law it is the form except when it is the content.
That is quite the cartoon! I like the elevator down.
http://kunstler.com/clusterfuck-nation/syriasly/
Hmmmm…. and where are the fundamentals here…. I smell the central banks….
Shares in troubled miner Glencore surged as much as 72 per cent to HK$18.36 during trading in Hong Kong today.
In a statement this morning, the company said it was “not aware” of any reason behind the price rises.
The board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the company’s securities or of any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
The company’s share price has been volatile in recent weeks, as investors became nervous of the company’s large debts in the face of plummeting copper prices.
That led various directors of the company to shore up its share price by buying vast chunks of stock. On Friday non-exec director William Macaulay bought 1.7m shares, worth £1.5m, two days after chairman Tony Hayward hoovered up 100,000 shares at 91p per share.
London-listed shares in the company rose 10 per cent to 104.5p in the first minutes of trading.
Dear Stefeun
This note will try to address more fully the differences between various authorities on the subject of stress and our ability to respond to it…taking off from my previous reference to Roy Baumeister.
Kelly McGonigle’s TED talk and subsequent book made the case that stress is required just to get us up and moving in the morning. Our body begins to make cortisol before sunrise, in order to prepare us for the challenges of the day. So saying, as many people do, that Stress is Public Enemy Number One
https://www.psychologytoday.com/blog/the-athletes-way/201301/cortisol-why-the-stress-hormone-is-public-enemy-no-1
is only partly true.
An opposing view:
Why We Don’t Mature With Age, We Mature Through Hardship
http://elitedaily.com/life/dont-mature-age-mature-hardship/1230560/
One of the best books on the subject, in my opinion, is Scarcity: Why Having Too Little Means So Much.
By Sendhil Mullainathan and Eldar Shafir.
I recently heard some Harvard Business School professor describe a questionnaire he gave his students, asking them how much money they needed to live ‘adequately’. The answer, which shocked him, was $200K per year.
Here is today’s post by Charles Hugh Smith:
Welcome to the Future: Downward Mobility and Social Depression
http://www.oftwominds.com/blogoct15/social-depression10-15.html
We know from United Nations statistics that mental depression is now one of the most important diseases around the world. So, as people have less in the future than they have had in the past, as Smith predicts, are we doomed to ‘social depression’, which encourages ‘private depression’?
From a purely factual standpoint, we know that hunters and gatherers, who had very little in the way of material wealth, met all of their physical and psychological needs and lived long, healthy lives (if they survived childhood and childbirth). So what is the big deal with having less material wealth if we have so much right now that it leads to chronic disease and mental depression?
Some people argue that Mindfulness is the answer. Some advice I heard over the weekend was to, upon rising in the morning, take a chair and sit in a window or door and look out at the world for 5 minutes. Such action not only keeps one’s circadian rhythms tuned up, it also has benefits by causing us to immerse ourselves in the natural world, which is very good for our mental health. And it costs nothing.
Other people get very angry about the Mindfulness suggestion, arguing that it is just a cop-out by rich people who want to continue to oppress the poor people.
Personally, I think that Mindfulness is an essential part of the answer. At a minimum, even rich people grow old and die…and mindfulness can help. Rich people worry about threats to their wealth…and mindfulness can help. Rich people pursue distraction…and mindfulness can help them if they take the time to ask what they are really doing. Poor people, including many of those studied by the authors of Scarcity, can benefit from mindfulness by not confusing material wealth with purpose and peace of mind.
Another angle is one you touched on: Agency. If we are simply corks floating on a turbulent ocean, then mindfulness isn’t likely to help very much. Getting more into the corkiness of our existence is only likely to depress us more. So people need to feel that they have some control over their lives. Unfortunately, we modern rich people have financialized almost everything that can be financialized. Yoga is a very old set of practices. Yet we have made it a multi-billion dollar business:
‘Yoga, which is union and manifests as self-confidence, independence, and self-empowerment’ has become ‘’a butt-beautifying workout’ while ‘wearing next to nothing’.
Somebody recently estimated how many hours a young American male has spent playing video games and looking at porn on the internet by the time he is 25 and should theoretically be starting a family. I can’t remember the exact statistics, but they are truly scary.
We are apparently relying on these lowest common denominators to inculcate some culture into young men and prepare them for the responsibilities they are about to assume. And the young women going to yoga class are spending a lot of money on activities which used to take place outside the front door or on the village square.
As I said before, hunter gatherers did fine with none of this stuff. So why do we need the financialization of learning to deal with conflict, with sexual discovery, and with learning to be a self-confident, independent, and self-empowering person?
My feeling is that ‘Everyone is Right’. Charles Smith and the authors of Scarcity are correct that, as people lose the crutches given to them by wealth and financialization, there is going to be social depression leading to a lot more private depression. Kelly McGonigle and the scientists are correct that stress coupled with challenge and purpose and accomplishment are actually life affirming. And the Mindfulness people are correct that humans need to take the time to think about what is really happening, as opposed to some ridiculous story they are telling themselves.
Baumeister was right that, statistically, willpower is subject to depletion. McGonigle is also right that some people can thrive with challenges to their willpower.
The answer, as always, is gardening.
Don Stewart
Thanks Don,
Charles Hugh Smith’s list of symptoms of “downward mobility and social defeat” is impressive, and so true.
It’ becoming increasingly difficult to have a purposeful social behaviour, now that returns/benefits from following the “right way” have plummeted. There’s no longer any guarantee, the model no longer works.
As you say, one way of coping with such a disturbing situation is to try to re-connect with the real (natural) world, and re-define our own purposes out of the matrix. That’s far from easy, not only on the material level, but also because one has to face -and accept- one’s own fears and other drawbacks, as one no longer can rely on the society to provide answers or support (or masks).
BAU also helps people live in fantasy bubbles and avoid anything unpleasant; if you escape from it, you have to deal with all aspects of crude reality, and we’re not accustomed to that, maybe we’re not even adapted to it anymore.
A small community is certainly the best help in this process, because it’s too big a task to achieve alone, but it’s not a guarantee either, we can’t know if it’ll resist to external (and internal!) threats once things become really tough. It’s so easy to lie to oneself.
Stefeun
How true.
Re-engagement with Nature teaches us truths which we would rather forget. The Earth is indifferent to us, so it is by no means always consoling to contemplate it and be exposed to the elements.
The essence of both state totalitarianism (Left or Right, no matter) and capitalism is to destroy viable personally-based communities of loyalty and trust. Although I’ve noticed that decent people do try to resurrect such relationships when they can.
Political activism can act as a substitute community and provide purpose, but is marred by the inevitable self-seeking and back-stabbing. But I’ve noticed it can act like a strong drug for those at a loose end and seeking direction.
Dear Don
Gardening, and watching the sunrise.
A small addition: super-rich people worry about threats to their wealth, and also erectile disfunction caused by worrying about the imagined threats to their wealth…….
A side observation: a Russian friend tells me that on a very recent visit to Moscow they could hardly recognise the place: everyone happy and relaxed, having fun in the sun and even the grumpy border officials almost smiling.
Should we add sanctions and a little distant war to the factors which can lead to feeling upbeat? I’m tempted to allude to the famous ‘Blitz Spirit ‘ of Britain under the German bombs…..
The Russians perhaps do not feel like bobbing corks, but are aware their rulers have a purpose and are able to act. Also, they feared sanctions and they are not as bad as they dreaded even if they have imposed changes which are disliked.
http://www.bloomberg.com/energy
Ck. out the jump up in oil prices today. Brent has edged it’s way back up, just off $50. a barrel.
Apparently some chance Russia willing to participate in meeting with OPEC and others to discuss cuts in production.
http://www.cnbc.com/2015/10/04/us-crude-edges-above-4550-on-russia-overtures-us-rig-count.html
The thing is…. we need higher oil prices to keep the producers from collapsing…. but higher oil prices destroy growth …. and there is not really any growth right now….
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
http://previews.123rf.com/images/moby/moby1008/moby100800006/7529282-Road-Sign-Between-A-Rock-And-A-Hard-Place-Stock-Photo.jpg
Beatlemania comes to France? No, these employees are very angry.
http://www.telegraph.co.uk/finance/newsbysector/industry/11911943/AIr-Frances-HR-boss-his-shirt-as-he-escapes-furious-mob.html
Employees not happy about planned cuts in staffing at Air France.
Just wait till the farmers get involved…. they are a shocking bunch of champagne socialists if there ever were….
Just to level set on the cost of electric
http://www.nyiso.com/public/index.jsp
this web page show the real time whole sale cost of electric in New York State. Right now 2.85 pennies per KWHr.
I understand wholesale costs have dropped a lot recently. I saw a mention of much lower industrial cost in California as well. Oops! You said wholesale, not industrial, but the two go together. I am seeing 2.82 cents per kWh now.
I have asked the CAISO if they post there instantaneous price. Waiting to hear from them.
Just to jump into the PV debate a bit because hey, it’s a Monday. I just sold a hundred of these to a new Solar project being assembled about an hour away.
http://www.cooperindustries.com/content/dam/public/crousehinds/resources/pdfs/literature/high-amperage-combiner-brochure.pdf
People, when they talk about a PV system seem to talk about the panels themselves and the batteries but there is a huge amount of back-end equipment that goes into making large scale PV systems work. Connecting these combiner boxes is anywhere from 2/0 to 500MCM 3 conductor Teck cable, most installations these days are using ACWU (aluminum armored cable) because it’s cheaper and lighter (so easier to install). Also let’s not forget the grounding lugs, #4-1/0 soft drawn bare copper ground cable, cable tray, fuses, cable ties, PV Panel interconnect wire, etc. All of these things add cost, fossil fuel and energy usage to produce, move and install and as I have said before, since the industry has gone cheap and disposable most of these components have short lifetimes. Some of the 15Kv cable I’ve seen on these jobs just barely meets code and so a lot of the primaries and secondary’s will last maybe 10 years before the insulation begins to break down and you see shorts. Before anyone says it you can’t just patch over a 15Kv cable with electrical tape and call it a day, the cable will fault right through that and start a nice little fire. This is the fantastic legacy we are leaving the future right now, shoddy cheap equipment that will last maybe 10-15 years so even if we could argue that PV and Wind could extend BAU somehow the problem is that in 10-15 years all of this infrastructure will be a smoking ruin unless scads of money and resources are thrown at it to keep it going.
Just to add some illustration, here is a 25Kv single conductor primary cable failing at the splice point:
https://www.youtube.com/watch?v=eIu-AIgRFYQ
Imagine this happening all over PV-land!
LLNL just got 450K dollars to develop a visible light spectrum analyzer that can tell when a PV panel has become water logged.
Let’s think of it as job security.
My old boss works for LLNL, I’ll have to call him and see what this is all about! Thanks!
SymbolikGirl
Valuable post, thank you!
When you say that the industry has gone for cheap fixes, driven by market pressures, does this mean that higher-grade equipment is no longer available, or just very expensive?
Talking to a Russian friend about the self-evident decline in quality and durability in most things now, he laughed: ‘So, the West is going Soviet now?’ Except of course, this is unfair to Soviet engineers.
Hey Xabier,
The good news is that there are still high quality parts available and from a value prop standpoint they are cheaper in the long-term than the cheapie parts being brought in from China. On my projects I only ever spec in cable and parts that are higher-end but the issue is that we are losing projects to those pitching the cheapie disposable solutions. I lost a very big customer last year who builds overhead cranes for ship yards and steel mills because the Neoprene festoon cable that we were spec’ing in was high-quality and would not only last over six million duty cycles (this is the cable that flexes with the crane as it moves) but had a 20-year warranty on it. Instead they went with a Chinese cable that is well known for its dubious quality but because it barely meets code and because it was 75% cheaper, the problem is that it will maybe last 3-5 years to which my customer said “I don’t care, our warranty on the crane is 3-years and we only care if it lasts that long”.
To give you an example, for a NEMA-Type contactor (basically a glorified relay) the $ difference between the cheap and quality options is maybe 25-35%, the high-end contactor will last you 8-10X the number of duty cycles and since everything is much heavier construction the odds of a surge leading to a fusing of the contacts is significantly lower than in the cheap versions. The problem is that the PM’s and Customers only see the upfront value and never think about the cost of replacing the cheap parts 5-10 times more often so in the end the cheap crap end up costing a producer more.
“the problem is that it will maybe last 3-5 years to which my customer said “I don’t care, our warranty on the crane is 3-years and we only care if it lasts that long”
Maybe he reads FW and knows that the cable really only needs to last about a year more — give or take 🙂
“I don’t care, our warranty on the crane is 3-years and we only care if it lasts that long”
Great quote!
Programmed obsolescence.
Parts are even designed so that their lifetime doesn’t exceed too much the warranty period.
This way, the customer has to purchase expensive spare parts to fix his machine, or scrap it and buy a complete new one, as for small household devices (and automobiles..?)
I see the same process in all aspects of economy, car manufacturers have their own banks to finance short and long term lease programs (Toyota, VW, GE, every major corporation).
Short-termism everywhere. Paper profits are better than none.
SymbolikGirl
Thanks, it’s good to have real-world examples while we theorise and speculate.
Old saying from the Industrial Revolution in England: ‘I’m not rich enough to buy cheap goods!’
Making things myself that could (but probably won’t) last for 300 to 500 years, I find it all dismaying.
The saying that came to mind for me “If you want something done right do it yourself.”
I guess the terms of business are evolving. Three year warranty means after three years it is junk. Of course the buying executive plans to be in a high position in three years and does not care either.
Interesting information to know!
You add a lot of very useful technical knowledge to FW – thanks for the input!
I’m glad I can contribute, especially considering the intelligent company here on FW, I’m happy to have found a place that hasn’t been taken over by conspiracy lunacy.
Hi Gail,
Congratulations for your analysis of the current situation. I really mean it. I have learned to wait for and hate your posts. I first got concerned with the issue of depleting oil when I was about 10. I was deeply disappointed to learn that all around us was run burning coal and oil. How could such a dirty thing be the basis of our society? Anyways there was no problem as there was oil for 100 years and then we would be thinking of something else. Or so I was told. That did´nt make me feel better anyways. Some time later I learned to live with it, as well as with the prospect of certain death, nuclear warfare … etc, etc, etc. Live is risk after all. and for 20 years I had the benefit of just accepting the official story.
Being cursed with the bad habit of trying to understand how the world really works, peace of mind could not last forever. Some years ago I heard about peak oil again. It made sense. I then thought … well, future is going to be really miserable. Your enhanced and well considered version, featuring straightaway collapse, which also makes sense, makes the former look as our best case scenario. The best thing we could possibly hope for (dinive intervention aside).
I feel like we are in a submarine going into the depth out of control. There is no way out, yet we don´t know when the thing will be crushed by pressure. Even there is some tiny hope we can hit the botton before … then we would still have some time to die from sofocation. Most of the crew believes we will be able to make the pumps work again, and we will be happy once more … but enemy planes are awaiting us in the surface, where we must eventually emerge. Some people have taken scuba equipment and are planning to jump from the submarine just in the moment it will blow. They take it very seriously, they prepare themselves for the moment … it´s doubtful they can survive the pressure outside. Nothing will safe the ship … and just a miracle will make individual crewmen survive. As everybody sings and parties, I stand there, in the middle of the crowd, just singing … and partying .. and waiting … does it make me any good to be aware? Would it make them any good … I doubt it. They would think me crazy if they are lucky. If not they will be made miserable, just as I am.
I still hope we fall somewhere in between collapse and what we have now. It could be, why not? It just takes a hugh lot of intelligence or a miracle! Both items are in short supply, but have been seen out there, I´ve been told.
I should have never touched the red pill. 😀
Thanks for your interesting analogy. We do need a miracle. Perhaps we could all put in a good word for divine intervention. I am not sure how we get to something a little lower than we have now. Even if we did, I expect everyone would be fighting to get more than their fare share of the lower amount. Diminishing returns would soon make that scenario not work either.
That analogy is world class…. absolutely brilliant!
“I should have never touched the red pill. :D”
Seeing as there is nothing one can do about this …. there is definitely an argument to be made for remaining in ignorance … but it is not possible to un-know….
So we have to watch our executioner walk down the street slowly…. stopping for a coffee…. a sandwich… pausing to wipe the sweat from his brow….
We have to endure seeing him load the cylinders 1,2,3,4,5,6…. give it a twirl…. cock the hammer…. lift a steady hand … slowly…. talk a calming breath….
> I should have never touched the red pill.
So how is it all going to turn out? Let’s go in for a bit of fantastic speculation. Let’s suppose that Mars was nuked by aliens. A scientist recently suggested that:
http://www.dailymail.co.uk/sciencetech/article-2843871/Ancient-Martian-civilisation-wiped-nuclear-bomb-wielding-aliens-attack-Earth-claims-physicist.html
It’s a bit spooky, because Albert Bender, a supposed “contactee” in the 1950s, said that the ETs told him that there had been life on Mars but that aggressive aliens had wiped it out. Venus, however, was (and is) still in the very early stages of becoming Earth-like. Fast forward to today – there are more reports of water on Mars. Various photos appear to show artefacts on Mars – a civilisation of some kind. Let us surmise that the real PTB – the demi-gods – created the Martian humanoids, then got tired of their bad behaviour. So, they nuked their planet and transferred some of the creatures to Earth to start over again. Or maybe they just genetically engineered us humans from apes, fusing the apes’ 23rd and 24th chromosomes to make a single one in humans, meaning that we could never mate with apes – this fusion of chromosomes being highly unlikely to have occurred through evolution.
So now we humans are growing tiresome – we’ve polluted the planet and the show is nearly over. Perhaps our alien overlords will just nuke us to get it over with. After all, they’ve been looking in on us increasingly since 1947, so there must be a reason for it. But other, ahem, theories talk of prior civilisations – prior to the Flood, prior to the Ice Age. The anicent Indian myths speak of vimanas, spacecraft that were powered by mercury. These vimanas had what equates to radar, also laser weapons – and nukes. The civilisation was ended by a nuclear war. Somehow the demi-gods were able to tidy up the planet for the next civilisation – but our time is nearly up now.
Or perhaps it’s far simpler. If at home, as a child, you messed up your bedroom (entropy), your mom would tidy up after you. Now we, the human race, have messed up our home, and Mother Earth is about to tidy up after us. That is, tidy US up. The end. The End! THE END?! Yes – the end – of the human race – all 7 billion plus of us. Then the demi-gods will give Earth another makeover – and it all starts over, only no more humans this time.
Another very good analogy. Thanks!
that scene never had so much meaning until now, so yes why did we choose the red pill…
Because something can be done?
Most are not even aware that a red pill exists… and for those that do…. there was never any choice…
Please let us be careful about comparing electric cost at the PV panel edge to electric generated 24/7 and delivered to the house. Even with batteries unless they are a months worth of batteries the house still needs the full electric company overhead. Or unless the house is willing to go dry from some amount of days, weeks. One days worth of batteries is fine for a local that has sunny days EVERY day, Nevada? But in places where it rains Washington State, New York State you need many batteries or a willingness to be flexible, don’t drive, heat, light, chat on OFW for a week now and then.
Exactly. All that can be counted on from PV is the amount available at the lowest level of the year (taking into account batteries).
http://www.worldeconomicsassociation.org/downloads/principles-of-economics-for-a-post-meltdown-world/
Interesting title unfortunately it is costs $20.
Perhaps it is good that the $20 price tag keeps you from wasting your money on it.
Contents
Introduction
Chapter I. Basic Concepts
Chapter II. Micro: Supply and Demand in the Product Markets
Chapter III. Micro: Supply and Demand in the Factor Markets
Chapter IV. Applications of Economic Principles
Chapter V. Macroeconomics Economic Growth and Business Cycles
Conclusion
My conclusion is that the author of this rubbish has not the slightest clue….
John Maudlin is an idiot — love how he uses a photo of himself that is from decades ago… probably a big botoxer….
Not sure why his rubbish still makes it to my inbox…. but….
I had to chuckle when I read this though… maybe he can be a court jester working for a Warlord post collapse….
I think it’s pretty much a given that we’re in for a cyclical bear market in the coming quarters. The question is, will it be 1998 or 2001/2007? Will the recovery look V-shaped, or will it drag out?
Remember, there is always a recovery.
But at the same time, there is always a recession out in front of us; and that fact of life is what makes for long and difficult recoveries, not to mention very deep bear markets.
http://www.mauldineconomics.com/frontlinethoughts/recession-watch
John is in for a hell of a surprise… cuz this time is different …. there won’t be no recovery….
I got this from Maudlin: I have seen notihg to contradict it.
“As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.”
– Albert Einstein
“To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown – the first instinct is to eliminate these distressing states. First principle: any explanation is better than none… The cause-creating drive is thus conditioned and excited by the feeling of fear …”
– Friedrich Nietzsche
“Very few beings really seek knowledge in this world. Mortal or immortal, few really ask. On the contrary, they try to wring from the unknown the answers they have already shaped in their own minds – justifications, confirmations, forms of consolation without which they can’t go on. To really ask is to open the door to the whirlwind. The answer may annihilate the question and the questioner.”
– Anne Rice, The Vampire Lestat
Peak Oil or Peak Energy? – A Happy Solution
The US is lucky; there is plenty of oil and gas below our borders, with much of it in private hands. There are estimates the US could be energy independent within 7-10 years. But it will not be easy. Skeptic Arthur Berman recently presented Oil-Prone Shale Plays: The Illusion of Energy Independence. He estimates that it will take 1,488 new wells a year in the Bakken just to replace the oil currently produced there, as wells deplete over time. He argues (quite well) that the US will not become energy independent. You can read his report at http://www.sipeshouston.org/Presentations.sh.sem.10.2012/8%20Oil%20Shale.pdf
His analysis suggests that oil prices will have to remain high or go even higher for shale oil to be profitable. I think he is right on that. I have always maintained that we are not likely to run out of oil for a very long time; we will just run out of cheap oil. Thankfully, there are alternatives being developed over time. The cost of producing solar energy has dropped about 50% per decade for a long time. In another few decades solar will be quite competitive with carbon-based energy. Nuclear remains my favourite shorter-term source, but it confronts considerable political opposition in many countries.
But in the meantime, we should open up public lands for commercial drilling. And we should do it for a price. Texas finances a great deal of its higher education from oil and gas royalties for wells on state land. US government land should be used to produce revenue as well. New technologies allow for environmentally sensitive use of land. Not only will increased drilling produce needed revenue from royalties and taxes, it will create jobs and allow the possibility of eliminating the trade deficit. What a happy solution! And compared to healthcare, this should be easy!
And why do I think all this can happen? Because of the cast of characters who will keep raising money and drilling for oil and gas. Guys like Loren Kopseng and Harold Hamm, who are just a force of nature and will get it done. These are the true entrepreneurs, who are the main source of our new jobs. If we can keep them from being saddled with too-high taxes and too many rules, they will build that future for us.
There are scores if not hundreds of these larger-than-life characters, with a few good bankers like Greg Cleveland to back them.
Let’s turn them loose!
http://www.mauldineconomics.com/frontlinethoughts/peak-oil-or-peak-energy-a-happy-solution#peak
http://www.mauldineconomics.com/frontlinethoughts/riding-the-energy-wave-to-the-future#frack
Like I said — he is an idiot.
“Like I said — he is an idiot.”
Oh we agree!! **********
You should quote stuff you copy in though. *
This link in your quote didn’t work so it must be old.
http://www.sipeshouston.org/Presentations.sh.sem.10.2012/8%20Oil%20Shale.pdf
I shouldn’t feed the beast, but this did catch my eye and it is from the WSJ
http://www.wsj.com/articles/glencore-oil-deals-could-bite-banks-1443989065
y JENNY STRASBURG and MARGOT PATRICK
Oct. 4, 2015 4:04 p.m. ET
4 COMMENTS
A deal struck last year between Glencore PLC and the government of Chad sent $1.4 billion to the African country as an up-front payment for four years of oil shipments.
Now, uncertainties over the transaction, which was financed by bank lending, and troubles with other similar deals are shedding light on how Glencore’s energy business has taken some banks into risky areas that are causing jitters as commodity prices fall.
At least seven banks signed on to the three-party arrangement with Chad, which was struck when a barrel of crude was trading near $100. Instead of having their primary claim on Glencore, the banks had a claim based on the African country’s oil output and expected to profit from a steady stream of repayments as that oil flowed through Glencore’s global energy and trading business.
But then oil prices started to tank. This year, Chad, whose economy depends heavily on oil revenue, sought to delay payments it owed via oil deliveries, prompting months of talks to renegotiate terms.
Details are still being hammered out between banks, Glencore and Chad, according to people familiar with the matter. Glencore has expressed confidence that an agreement will be reached, one of the people said.
Repent….the END is near…LOL
Yes – I read that today. A person wonders how many other similar bank deals there are.
http://cleantechnica.com/2015/03/04/energy-storage-could-reach-cost-holy-grail-within-5-years/
Germany bank says at some point in the future we may have 19 cents per KWHr including battery storage. Good thing we have outlawed coal at 3 cents per KWHr. Will also need to make illegal natural gas at 5 cents per KWHr.
“Germany bank says at some point in the future we may have 19 cents per KWHr including battery storage.”
GM is getting batteries at around 145/kwh right now.
http://www.hybridcars.com/gm-ev-battery-cells-down-to-145kwh-and-still-falling/
Which is the 2028 projection on the graph from the cleantechnica article.
By 2022 GM is projecting 100/kw which is the 2050 projection for battery storage.
according to the greentechnica article.
Tesla was reporting around 200-225/kw last I heard maybe 6 months ago, and Musk said something about they weren’t going to make 100/kw even with the gigafactory without some sort of technological breakthrough.
Something happened. I am -guessing- Musk who has been quite nondescript about battery costs is getting them for a bit less then what has been leaked out which helps protect profit margins.
I am guessing the German’s are going to face an onslaught of home storage, which will beat the German Bank estimates.
http://www.bloomberg.com/news/articles/2015-09-02/tesla-rival-panasonic-to-sell-home-batteries-in-europe-next-year
The big push in the states right now is for essentially peak shaving. Which is being done in microgrids, but also distribution utilities are doing it. Which makes more sense since they are` mainly purchasing power from other utilities.
In Germany, the distribution utility is the generation utility, so they have no financial incentive for storage. Thus the reason why I see customers investing in the home storage products more so then in the states.
Peak shaving is a winner for all.
+1. I couldn’t find too many drawbacks even just using fossil fuels and excluding renewables.
Or at least 50%.
Peak shaving is mostly useful when it comes to annual peak, not daily peak. If the total amount of capacity is already very high, relative to what is needed, then even shaving the annual peak is not helpful.
Has FW been sold to a porn site 🙂
“Peak shaving is mostly useful when it comes to annual peak, not daily peak.”
Just the opposite. Peak shaving during the day, smooths out the peak times and puts more load on before and after the peak times, which is a steadier load and easier to follow and more efficiency with the big generation plants. The costs also go up considerably during peak times, because firing up a peaker plant for an hours worth of potential use is rather expensive, not to mention peaker plants are typically less efficient then the big generation facilities. It just costs more to use them. The cost savings is starting to be enough to justify storage.
I haven’t looked at long term storage for a while. You can do it, you can make methane, hydrogen, etc from electric or even air batteries, etc. but typically you are looking at pretty serious drops in efficiency vs the daily, where it is around 90% efficient.
The bottom line is at 1% solar it is barely worth talking about long term storage except in a what do we need to research. The goal is 30% reduction by 2030, not 100% by 2020.
If we need peaking plants even a few times a years, we somehow need to keep them sufficiently profitable so that they can continue operation. Shaving daily peaks partially fixes one problem, but creates a new problem. Ultimately, the issue is keeping the whole system operating. We need to watch out for distortions that help the solar producers, but cause the whole system to fail. I know that some countries (Germany, Britain?) were looking into the need to subsidized peaking plants, because shaving the peaks was reducing their revenue too much.
“If we need peaking plants even a few times a years, we somehow need to keep them sufficiently profitable so that they can continue operation. ”
Why pay to subsidize a peaker plant we use a couple of times a year, when we can install storage and use it everyday?
Storage can work with either main or peaker generation. In both cases, it makes power generation more efficient. I consider this a good thing when we are dealing with finite resources. Arguably, we aren’t to the “cost effective” point, I have a hard time believing either side entirely.
Storage is really eliminating the inefficiency in fast cycling of the power plants. It is like driving and punching on the accelerator to go at a green light, and jamming on the brakes the next block, for the red light. You don’t get very good gas mileage doing that.
Another thing storage is able to do, is to avoid idling for long periods without any use.
In otherwords, you leave your car running for 4 hours in case you might need it to run to the store for something. It wastes a lot of energy.
Maybe the most important reason right now, is it allows for longer periods of use of the existing transmission lines, delaying the need to upgrade those lines to have enough capacity for 1-2 hours out of the day. It is just spread out over more hours, when the capacity is available.
The only real argument against it is cost. The only ways to drive down the cost is to install it in volume, and to improve the technologies involved. When you hit mass manufacturing volumes the cost drops. And when companies are making money, they can improve their technology.
As we are achieving the mass manufacturing in the storage business, we are seeing prices drop considerably which reduces the only argument against using it.
Storage adds another round of costs, and a level of inefficiency every time it is used. It mostly fills in the daily peak problem, leaving the annual peak problem unfixed.
I notice that Germany has had this problem, and has begun subsidizing some plants with capacity payments. It doesn’t seem to be using storage much.
http://energytransition.de/2015/02/how-germany-integrates-renewable-energy/
http://energytransition.de/2015/02/capacity-reserve-or-strategic-reserve/
http://energytransition.de/2015/01/did-germany-reject-or-just-postpone-capacity-payments/
http://blogs.ft.com/nick-butler/2015/07/06/germany-the-coal-industry-lives-on/
I am sure additional debt is another issue associated with storage.
I am not sure how building additional transmission that will only be used 1 – 2 hours a day fits in, unless a country is adding more renewables, or adding new peaker plants. If we are dealing with closing down existing peaker plants, we would seem to need less transmission, except for perhaps getting peak generation from a more distant source. In general, the amount of US electricity actually generated is pretty much flat, as it is in Europe and Japan. http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_5.pdf Check BP for Europe and Japan numbers.
Mostly what wind and solar PV are doing is replacing some of the old generation that is being taken offline, not adding to total capacity. It is only if we increase the total quantity of electricity generated that we would seem to need to add transmission lines. Or if we add wind in inconvenient locations, this adds to the need for lines used part of the time.
“Storage adds another round of costs, and a level of inefficiency every time it is used. It mostly fills in the daily peak problem, leaving the annual peak problem unfixed.”
Depending on the technology, lion storage is 90% efficient, which is more efficient then the round trip for hydro storage which is about 80%. The costs savings cost from money not spent on additional carrying capacity through substations and line capacity. Those are multi-million dollar projects as well. (I think the substation upgrade in manhatten is/was going to cost over a billion dollars.) You can afford to buy a lot of batteries.
Things like intantaneous reaction to load, quality of service, maintenance, easier to contract, peak shave, etc all result in lower overall operational costs.
“I notice that Germany has had this problem, and has begun subsidizing some plants with capacity payments. It doesn’t seem to be using storage much.”
Germany is a -terrible- example of an ideal system.
Germany has a battery storage facility with 5gw installed and they are only approved to use 4gw of it because the utility won’t approve the last gw of storage.
They have serious issues, but it is because of the vertical integration of their system. We have similar problems in areas that are completely vertically integrated. Their coal workers labor union seems to want to stomp on anything that isn’t coal too.
“I am not sure how building additional transmission that will only be used 1 – 2 hours a day fits in, unless a country is adding more renewables, or adding new peaker plants.”
You have to have to carrying capacity to meet peak demand spikes which happen only for a couple hours a day. It isn’t like an oil pipeline, where you just have continuous flow of the same amount of power the whole time and they have storage at both ends to store product to maintain a constant flow of the pipeline. It is more like a highway with almost no use at 4am, and peak rush hour at 8 pm. The main difference is you can’t have a traffic jam in the electric system or else the system breaks.
” In general, the amount of US electricity actually generated is pretty much flat, as it is in Europe and Japan.”
The US is partly flat because home solar is not counted as generation, it only shows up as non-use. I don’t know how Japan or Europe counts it. Japan might actually be like the US in that regard.
” It is only if we increase the total quantity of electricity generated that we would seem to need to add transmission lines. Or if we add wind in inconvenient locations, this adds to the need for lines used part of the time.”
IF you have an area that is increasing it’s energy use, you need to increase transmission, just like you need to increase transmission for increased generation. We are also trying to integrate between “grids” ie between service areas for reliability. In otherwords, the original system was not set up as a “grid” where everything is connected together. It was essentially set up as large microgrids where nothing was connected together. We are trying to connect them together to avoid large scale blackouts more like the internet. It also provides a backbone for producing utilities to sell their product to a delivery utility that isn’t a direct connection.
It is kind of hard to explain because in a way it is a jumbled mess because we have a 1st generation grid. Europe has a 2nd or 3rd generation grid, because WWII essentially blew out their entire infrastructure. and we are trying to get to the next generation of grid with an in place upgrade.
I am fairly aware of the problems of the US grid. I wrote a number of articles about it on TheOilDrum. For example, The Electric Grid, Will it Be Our Undoing? Upgrading the US Electric Grid – Many pluses but some minuses too.
If the situation were fifty years ago, or even ten years ago, updating the grid so that it was not like a system of country roads connecting major metropolises might have seemed like a reasonable goal. Unfortunately, as I have been exploring what is happening, it is becoming more and more clear that we are dealing with a networked economy (not all that different from a networked grid). The networked economy needs economic growth so it can pay back debt with interest. The economic growth pump is broken, because our economy is becoming less and less efficient, rather than more and more efficiency. (See How Economic Growth Fails.) There are many reasons for the growing inefficiency: one is the higher cost of creating fossil fuels; another is the higher cost of electricity, thanks to pollution control equipment and other work arounds; another reason is the growing overhead from our education system and our medical care system; another is the retirement of the baby boom retirement, and the strain that is already starting to bring.
The danger we are approaching, in a very short timeframe, is collapse of the whole system, because there will be way too much debt to repay, and way too many derivatives related to this debt, at the same time the economy is practically at stall speed, keeping commodity prices down. All of this is indirectly tied in to what we can do–how much more oil we can extract, how much more electric grid we can build, and how long we can keep BAU going.
While there are a huge number of things that would be nice –an enhanced grid, adding batteries to the grid, using cleaner electricity sources–the fact of the matter is that there is no possible way we can afford any of these things. The system is collapsing already. Trying to do these things would just push it toward collapse sooner.
Unfortunately, we really need a system that is extraordinarily cheap for our electric grid and for the electric generation feeding into the grid. With the high cost of materials today, that is not possible.
“I am fairly aware of the problems of the US grid.”
Then you are also fairly aware that the Grid is an important infrastructure component. You can make a case roads are more important economically, but then you are only arguing the degree of importance. They are both important.
“While there are a huge number of things that would be nice –an enhanced grid, adding batteries to the grid, using cleaner electricity sources–the fact of the matter is that there is no possible way we can afford any of these things. The system is collapsing already. Trying to do these things would just push it toward collapse sooner.”
Your point about costing too much, is a valid concern. It needs to be done in small steps to avoid the need to hit the panic button. You are saying we need to hit the panic button.
The grid initiatives actually started under Bush, so it takes time to work out some of the kinks. It wasn’t intended to duress anyone economically. It just isn’t realistic to think we can come up with all that money at one time. Even if you look at Coal, we have plants in operation that were built in the 1940s. Replacing all the infrastructure at one time is cost prohibitive in one big chunk. It wasn’t built in one big chunk.
“Unfortunately, we really need a system that is extraordinarily cheap for our electric grid and for the electric generation feeding into the grid.”
I agree. Alternatives and efficiency are actually working as price controls so we can remain cheap.
“With the high cost of materials today, that is not possible.”
Ironically this sounds like an oxymoron when you try to couple it “commodity prices are too low” arguments. .
Commodity prices are too low for people to remain in business in some cases. Eventually the prices rise due to market forces. If they go ballistically high, it is a sure fire way to head into the deep economic abyss as you project.
My question for you is: how do we prevent going into the economic abyss due to high prices especially in the long term, since this is a recurring issue ie oil killed our economy and created the last recession? What is the check and balance on the market prices?
Unfortunately, I don’t see our problem is really fixable. I do see the electric grid as extremely important–as important as the road system.
The cost of producing oil, natural gas, and coal keeps rising because of diminishing returns. We have now reached the point where when the price rises to fully match the cost of extraction (plus necessary profit), then the economy collapses back.
In some sense, the economy is becoming increasingly inefficient, because of diminishing returns. Everything I can see says that increasing efficiency causes economic growth; increasing inefficiency causes economic contraction. Diminishing returns causes a huge problem that economists have not adequately thought through.
There has been a myth put forth by economists that once the price of fossil fuels rises high enough, then substitutes will become acceptable. It doesn’t really work this way. Once the price of fossil fuels rises very much, economic growth slows to a point were debt collapse occurs. Then we have a huge problem.
A major effort has been made to keep debt up enough to keep the system from collapsing since 2008, but we are reaching the end on that attempt. We are not adding enough debt to keep commodity prices up with the new higher cost of extraction, thanks to diminishing returns.
“Unfortunately, I don’t see our problem is really fixable. I do see the electric grid as extremely important–as important as the road system.”
I see it as fixable.
“The cost of producing oil, natural gas, and coal keeps rising because of diminishing returns. We have now reached the point where when the price rises to fully match the cost of extraction (plus necessary profit), then the economy collapses back.”
Right. I totally agree. All you are saying is FFs are becoming cost prohibitive. We need something else that isn’t cost prohibitive in order to drive the economy. FFs cannot possibly achieve this, and there is no way FFs can ever be the fix.
If the price of energy rises too much, the economy stalls and there is potential for a massive collapse.
I would 110% agree, except there is some significant price gouging going on. There was no real reason for oil to go to 140. It helped the Russians quite a bit, and it sucked a lot of the profits from our tech boom away in higher energy costs.
“In some sense, the economy is becoming increasingly inefficient, because of diminishing returns.”
You could say it isn’t creating enough jobs. Worker output is actually rising.
“Everything I can see says that increasing efficiency causes economic growth; increasing inefficiency causes economic contraction.”
We are increasing efficiency. Almost device sold today is more efficient then it’s predecessor.
People are conscious of the cost of energy again. They don’t use it unless they have to. Business is no longer just saying “that is the cost of doing business” they are being more proactive about becoming more efficient since it lowers their overall costs. We have been burned recently once, most people haven’t forgotten.
“There has been a myth put forth by economists that once the price of fossil fuels rises high enough, then substitutes will become acceptable. It doesn’t really work this way. Once the price of fossil fuels rises very much, economic growth slows to a point were debt collapse occurs. Then we have a huge problem. ”
I will give you another theory: If something else is more cost effective then FFs and is relatively easy, people will switch from FFs to the something else.
It can be from higher FF prices, lower alternative prices, or a combination of the two. The lower cost of alternatives can be accounted for through additional cost savings to other parts of your business/residence. It also does not have to be a global solution, it can be regional or site specific solutions.
Therefore, we are back to what can we find that is cheaper.
“A major effort has been made to keep debt up enough to keep the system from collapsing since 2008, but we are reaching the end on that attempt. We are not adding enough debt to keep commodity prices up with the new higher cost of extraction, thanks to diminishing returns.”
We have been trying to prop up our economy with debt since about 1981 that is all Reaganomics was. The economy had been sliding since the 60s. It would have burst sooner, had the tech boom not occurred.
We have already tried propping up the commodity markets. In the 70s we tried to tackle the actual problem, and all those programs were gutted or killed by Reagan. It was a lull of almost 30 years, until we decided to invest our “propping up the economy” money on actually solving the problem.
I would like to see us succeed for a change, rather then flogging a dead horse.
“We are increasing efficiency. Almost device sold today is more efficient then it’s predecessor.”
This is what everyone looks at, but it is not the correct definition of efficiency. It is the efficiency of producing end products that counts, not all of the devices in the middle. Efficiency results in producing end products more cheaply. We are not producing end products more cheaply in a whole lot of areas:
Electricity
Oil
Natural gas
Coal
Metals
Education
Health care insurance premiums
Diminishing returns kills efficiency, whether we understand that problem or not. This is what we are up against, that is causing the huge slowdown in the economy.
You need to go back and read my posts.
” Efficiency results in producing end products more cheaply. We are not producing end products more cheaply in a whole lot of areas:”
Oil
Natural gas
Coal
Metals
These are commodity products. But if you want to use your definition, since you are only using money in your definition, the prices for all of these have gone down,reflected in their more efficient production techniques like fracking, unconventional and enhanced oil recovery.
Oil from 140 to 40/barrel (wti)
NG from 12.69 to 2.77 mbtu (henry hub spot prices)
Coal from 130/ton to 40/ton (thermal coal capp price)
(I am not going to try and do all the metals.)
There must be some serious efficiency going on.
Electric price increases have -slowed-. There was a much bigger jump between 2005-2009. then 2009-2014 across the board. 1.68c vs .63c. So it doesn’t quite follow the 1/3 cost reduction of the FFs industry.
Health care insurance premiums is really a numbers game. Health care, hasn’t gone down in price which is in part driving up health insurance costs. I won’t say there probably isn’t some inefficiency in health insurance, given the amount of paperwork, but it is in part driven by the inefficiency in health care.
Education. I have no idea how to equate that to real numbers. I doubt the cost has gone down. I don’t think it is going up dramatically.
I think more to make your case, you need to look at the PPI and CPI since those are wholesale and consumer prices.
If you believe that oil can be produced for $40/barrel, you are very gullible. And at $40 per barrel, it is still far above the long-run price of less than $20 per barrel, in inflation adjusted terms.
Also, if you think that natural gas can be produced for 2.77 mbtu and coal for $40/ton, you are very gullible. It is the fact that they cannot be produced for these prices that is the problem.
Germany bank says we are at 31 cents per KWHr with batteries now. With small batteries 10KWHr not even one day. For me with electric stove and electric clothes dryer about ten hours after the sun fall low in the sky say 3pm in winter so good until 1am then no heat, no light, no phone, no OFW!
Collapse – when it comes — fast or slow?
Let’s revisit 2008:
http://www.world-crisis.net/images/finance-crisis-chart1.jpg
Unless you are living in a dimension where minutes = centuries (perhaps that’s how things are in Koombaya Land — I have no idea) then this would be considered a fast collapse.
Then keep in mind — the tools to fight another occurrence of this nature — reducing interest rates… printing money … adding more debt…. building more stuff….
Will have already been used….
I wonder if the US Fed going to NIRP interest policies will buy us any time at all? I can tell you right now that from a business standpoint we are not seeing a 1% drop in business or a 2% drop or anything like the Official GDP stats show (insert giggling here), a lot of my customers and the vast majority of the manufacturers I have spoken to in the last few months are indicating 10-20% drops in sales overall and in some places 40-70% drops in places with a heavy natural resource base. Things are getting squirrelly out there in business-land and I fear we may be at the end of this systems momentum. Ironically despite this I actually just finished the preliminary work on the hookups and controls for a new gigantic chocolate factory down in the Midwest US, so I guess when things fall apart we can at least eat Candy for a time!
Reading the usual suspect blogs like ZH seems to indicate that the last hurrah is coming comprised of negative rates, direct liquidity injections and who knows what other creative things they have up their sleeves, hopefully it will buy us until next springs planting is done.
My concern is the upcoming defaults in China, the US, and elsewhere. Also, the potential US government shutdown in November related to the debt ceiling perhaps coming at the same time huge amounts of money are needed to try to bail out banks and others. (or perhaps my timing is too early) In the context of this kind of mess, it is hard to see that slightly negative interest rates will do very much.
I wonder if the US will become the final redoubt in all of this. It looks like all of that delicious money that worldwide easing created is chasing ‘safe’ investments in US Treasuries, apparently they just had a 90-day auction go out at 0% yield. If the US needs to issue bonds to cover another round of bailouts would they need to triage as to who gets to survive and who goes the way of Lehman Bros or would there be enough capital around to fund it?
Interesting question! Perhaps the US would simply issue an extremely high amount of bonds to satisfy everyone, temporarily. Of course, if other currencies continue to sink relative to the US, they cannot repay their dollar denominated debt.
“10-20% drops in sales overall and in some places 40-70% drops”
Wow.
The deflationary death spiral cannot be far off…. let’s see what the Wizard has for us….
Planting season is just starting down this way… always a good idea to have a massive store of dried food to soften the blow – particularly if the hit comes at the wrong time
Was thinking of purchasing a 20ft container and filling it with food stuff etc… … anyone had any experience with that? I have heard there can be a great deal of condensation happening inside these… as well as heat issues…
Root cellar. It is a well developed technology and takes zero energy input to operate. Would be nice to use a backhoe to dig it out though.
http://www.fishpond.co.nz/Books/Complete-Root-Cellar-Book-Steve-Maxwell-Jennifer-Mackenzie/9780778802433
Great link Ed thanks! Quick question for you or anyone else, I live in the ‘burbs right now but I do have a hideaway for when everything begins to really fall hard. My father and stepmother are homesteaders up in Northern Ontario and I have a bedroom up there and I am generally up there most weekends during planting and harvest time, leaving tomorrow night to help bring in the last cut of hay and plant some winter Wheat. We’ve worked hard to build up the meager soils there and this year was actually a pretty good harvest. The question is that the property is on the Shield so dig down about an inch outside of the planting beds and you hit granite so a proper root cellar is out of the question unless we want to start using dynamite. Does anyone know of resources for above-ground bulk storage? We’ve been making due with an old Quonset hut on the property and we’ve heaped fill up around the sides which has helped keep it a few degrees cooler but I’m really not happy with it as a long term storage solution and while I love canning I don’t have enough mason jars to store the 4700kg of potatoes we hauled out of the ground this year.
I wonder if some sort of hale bay structure might be worth looking at….
Been looking at the container idea and it seems these things get hotter than hell…. so not ideal for food storage…
I’ve got a fencing guy finishing up this week and he’s got a tractor on site — considering getting him to open up a root cellar hole for me before he moves on ….
I was researching using one of these as a root cellar — its a plastic septic tank…. can’t seem to find any info from anyone trying it…. lots on using buried concrete tanks….
http://www.septicsystem.com/images/plastic-septic-tank.jpg
re septic tank= that thing is cool!
I bet the inlet outlet pipe accesses could be used for ventilation.
If a person lives in an area over bedrock, it would seem like dynamite would be needed. It is not just “Stone Mountain” that we have in Atlanta.
I forgot to add that margins are being squeezed like crazy as well, on a million dollar project I would have been able to win it at three our four times the margin a decade ago then I can win it on now so not only is overall $ value falling out there in industry land but also margin. I’ve had a few very large projects go out at very small gain and there really is a ‘race to the bottom’ going on out there amongst industrial contractors, some are winning projects at a loss so that they can just keep some cash flow moving and keep their most prized skilled employees busy because once you lose an electrical engineer or industrial electrician they are pretty much gone for good.
I’ve been working in the industry during 25 years and I confirm I’ve seen all the downward processes you’re describing go on and worsen year after year.
I quit 3 years ago, and from what you say, it now seems to have reached a really critical point.
Congrats on getting out! I’m just in the process of my company restructuring for the third time in four years! The M&A activity has been insane and some times it’s hard to keep up with who owns who. I keep promising myself that my next job won’t be in Industrial Engineering, maybe I should start an Emu farm.
Eddy, take care when you plant your septic tank because these things have a way of bursting out of the ground if it becomes saturated. I’ve been made to look stupid more than once when a heavy rain floods an empty septic tank and they where constructed of concrete! Go to Home Depot and buy a Job Box, all steel, double locks and gives you about 25 cubic feet. You should get close to a years food in each.
You mean something like this?
https://2ecffd01e1ab3e9383f0-07db7b9624bbdf022e3b5395236d5cf8.ssl.cf4.rackcdn.com/Product-800×800/afc3ee19-d2b8-45a1-964e-7472c3060f04.jpg
I was thinking of something considerably larger as I was going to load in at least 50 x 20kg sacks of rice… as well as other stuff…
Another option might be to use heavy duty plastic drums — there is a contractor nearby that will sell used ones for 20 bucks or so…. can’t imagine vermin would get into them….
The people at Wallys World (Bunnings) are thinking I am a rather strange cat…. the check out people keep saying ‘you must have a real big project going on up there’ — or — ‘looks like someone has a lot of work to do!’
The food wholesalers check out lady says ‘business must be really good with the B&B’ (I tell them I am running a B&B vs planning for the end of the world…) —- and because I usually haul a dozen sacks of rice out each time I respond with ‘yes — we have a lot of Chinese staying with us – they go through rice like crazy!!!’
http://www.zerohedge.com/news/2015-10-06/five-past-six-times-margins-plunged-much-they-have-now-ended-recession
Fast Eddy’s B&B: “You can check out any time you like, but you can never leave” or “Come for the Rice, Stay for the Doom”! If you use either of those slogans I would like at least a 50% cut of all merch. rights, well except for the first one, someone may have thought it up before me, lol.
We need a soundtrack….
World’s Largest Shipowners To Abandon Greece Ahead Of Major Tax Hike
Once again the reactions of desperate government policies looks like creating an even worse situation thanks to unintended (though entirely foreseeable) consequences. Amid the prospect of sharply higher shipping taxes in Greece – designed to increase revenues and ‘fix’ the debt-ridden nation, WSJ reports many of Greece’s world-leading shipowners are actively exploring options to leave their home country. With Greece controlling 20% of the world’s shipping fleet, the ‘quadriga’ of Greek creditors’ demands to raise taxes (because debt restructuring is out of the question) on such an ‘easy target’ as the world’s largest shipping industry appears likely to backfire as an entire industry’s revenues move out of reach of government taxers.
http://www.zerohedge.com/news/2015-10-04/worlds-largest-shipowners-abandon-greece-ahead-major-tax-hike
That’s what happens when you try to redistribute wealth….
Raising taxes seems to be the solution governments come up with. It slightly works when individuals are taxed more–except then they can buy fewer other goods, and the effect tends to be recessionary. It doesn’t work well at all for international businesses–they move elsewhere.
I drove past these yesterday — if you really want to be prepared you could have link 3 or 4 of these together with tunnels… fill one up with non-perishable food items — and guns and ammo … they might offer some protection from the spent fuel pond fall out…. I think I’d modify then with some sort of slats sliced in to all for automatic weapons to protrude to shoot your pesky neighbours when they start begging for food
http://www.silostay.kiwi.nz/
Stange! What do the do for ventilation? Windows have a purpose.
I was on the way out of Akaroa and decided to have a look inside… there is a kitchen and toilet on the first floor — and upstairs a bed and a shower… with a tiny balcony …
Not quite sure why anyone would want to stay in such a claustrophobic space…. not cheap at NZD170/night….
Maybe the owner reads FW and this is his future end of world shelter…. in the meantime he’s using the novelty of them to generate a few bucks ….
http://www.imdb.com/title/tt4126304/
Is it the real picture of US-Mexico border? Can anyone living there or close confirm. Is it Wild Wild West again? Is this the comming reality up north?
Seems like US has mexican migration and Europe has Middle East/North Africa. It will end badly.
Thanks Kesaro, it’s not only going to end badly as you say but the fix is in…..the snowball at the top of the hill has begun to roll…….
Watch the movie. It’s scary.
The local militias/vigilantes in AZ, NM, TX are “volutarily” hunting for migrants and drug trafficers. They have full military equipment, guns, night vision, khaki uniforms. The only questions is who is providing the funding. Donald Trump comes to mind and people like him.
Let me get this straight volunteer groups of citizens are helping to enforce the law. They are doing this for free. Why, that is wonderful.
While at the same time gangs of government psycho killers, police, military, refuse to enforce the law and randomly kill citizens. I see your point we need more citizen policing and less government policing.
Right, but at some point these “citizens” will define what is lawful and what not in this area. You better be on the right side of fence then. This is not state, this is anarchy. Beware what you wish for.
I’ve in Texas all of my life. I’ve only been to the border region in El Paso a few times and crossed and it was fairly peaceful. Busy but peaceful.
But I will tell you without a doubt that we are becoming Mexican, or, perhaps more broadly, Latin American. 10 years I ago I did a brief stint in a maternity ward in Central Texas. 75% of births to Mexican mothers. What does that tell you. Now to be fair we need a large amount of workers for the industrial economy, at least as envisioned by TPTB. But this is short termism, and I don’t think they’ve given sufficient thought to the realities of population growth, strain on education/health, cultural and racial division, etc. Or if they have, it’s clearly with the intent of divide and conquer.
TPTB want to stuff their Swiss bank account as fast as possible and then flee to their retirement in New Zealand, Patagonia, Caribbean Island, etc… The future of their victims is of no interest to them.
I have one question for Gail as an actuary: How long dou you think the insurance industry will go on, i. e. how long will it be able to continue functioning despite the massive money printing and despite the rising debt on various levels of our finite world? Because, based on my experience and the experience of many people here in Slovakia, the insurance companies deliberately try to avoid paying benefits. E.g. they simply lie to you, cheat you, or you can not get in contact with them, they write discouraging letters or they do not answer e-mails or phone calls when you need settlement of a claim. Is this not a sign that the equations do not work anymore and they must use various creative administrative procedures so that they can continue their existence?
Thanks.
The insurance companies can’t do any better than the financial industry as a whole. Life insurers, and those that write pension policies are particularly badly off, because they wrote policies assuming that rates of return would be better than they have been. If they were invested in the stock market they did pretty well, but returns on bonds have done poorly.
The timing is always a question. It seems like it can’t be very long, but Interguru and others remind me that we cannot estimate times very accurately.
Once banks stop “working,” so will insurance companies (and stock market values, and quite a few other things). Everything is tied together. Is that six months? A year? Two years? Longer? We don’t know for sure–but it doesn’t seem like it is very far off–not 10 or 20 years.
This Chart Truly Depicts New, Terrible Trend in Jobs Mess
The jobs report today has been described as “ugly,” though it certainly didn’t, or shouldn’t have, come out of the blue: Layoffs in the energy, Big Tech, retail, and other sectors have recently mucked up our rosy scenario.
“The third quarter ended with a surge in job cuts,” is how Challenger Gray, which tracks these things, started out its report yesterday. In September, large US-based companies had announced 58,877 layoffs. In the third quarter, they announced 205,759 layoffs, the worst quarter since the 240,233 in the third quarter of 2009!
Year-to-date, we’re at nearly half a million job cut announcements (493,431 to be precise), up 36% from the same period last year. And they’re “on track to end the year as the highest annual total since 2009, when nearly 1.3 million layoffs were announced at the tail-end of the recession.”
These dogged references to crisis-year 2009!
http://wolfstreet.com/2015/10/02/chart-depicts-new-terrible-trend-in-jobs-mess-fewer-employed/
http://wolfstreet.com/wp-content/uploads/2015/10/US-jobs-number-of-employed-2013-2015-09.png
I read that. It is the Japan and Europe story, except here. With so many in school for a long time, plus many disabled, we start reaching the point where we are not adding jobs, even though the age 20 to 64 age group is growing a little.
Silvio Berlusconi and Vladimir Putin: the odd couple (google to get the story)
Silvio … the most powerful man in Italy…. forced out by the Owners of the Fed and replaced by a Goldman Sachs dictator a few years ago…
Putin … being told by the owners of the Fed to step aside re: Syria — tells Fed to kiss his ass…
Silvio and Putin — united in a common cause — rejecting and fighting Zionist hegemony?
“Putin … being told by the owners of the Fed to step aside re: Syria — tells Fed to kiss his ass…”
Putin doesn’t have a choice. Russia is in a terrible economic mess. The only way he can win the election is by trying to unite some sort of nationalist spirit.
We actually -want- them in Syria fighting IS.
Oddly you don’t believe MSM but you can’t see through the politics of the situation.
At this particular moment in time, I believe that the only ones resisting Zionist hegemony are the ragtag Islamic radicals and they are doing a pretty poor job of it, at that.
I expect this to change in time. Europe, Russia, and China will likely put up serious resistance to Zion. America will go down with it, guaranteed.
No doubt there will be a similar backlash in the US — along the lines of what happened in Germany — when the sheeple wake up to the fact that they have been taken for a ride.
The stab in the back was of course real…. no matter what the spin masters say….
With most politicians, judges, lawyers, and high end bankers in the U.S. are members of the tribe. With the first job of any presidential candidate is to kiss the wailing wall in Palestine the U.S. will go down with the tribe.
I drove by the courthouse in Baltimore. It has writing on the wall. It is in Hebrew. Do the blacks of Baltimore read Hebrew? Do the angry cops black and white of Baltimore read Hebrew? Do the black puppet politicians of Baltimore read Hebrew? Oh, the judges, lawyers, and rent takers read Hebrew. The humans read Hebrew the animal stock does not.
I am curious: Are you speaking of this building: http://msa.maryland.gov/msa/speccol/sc5500/sc5590/html/alphalink.html
What does the Hebrew inscription say?
Dear Finite Worlders
This relates to the troubled relationship between Gail and BW Hill. I am reasonably friendly toward both, so may have some perspective on the issues.
In his book Systems Thinking for Social Change, David Peter Stroh uses the phrase ‘Accidental Adversaries’. The phrase derives from two governmental groups in Iowa, both of which were supposed to further the cause of good education, but who spent a lot of time, money, and psychic energy fighting each other. Stroh claims that converting the discussion between the two to using the language of Systems has ameliorated the problem, and led the two groups to an ability to cooperate in the joint endeavor.
Stroh says (page 63): ‘More generally, the keys to strengthening the partnership between Accidental Adversaries are to clarify the potential benefits of the partnership to both parties, emphasize that the problems caused by both sides have not been intentional, and support both groups to develop solutions to their respective problems in ways that do not undermine the other group.’
Now I will editorialize a little. Neither Gail nor BW Hill has a complete diagnosis of the problems we face over the next decades. Even the two of them together cannot put forth a complete diagnosis. They do not have, singly or together, comprehensive recommendations for how to ease the pain. If the most important goal is to ‘ease the pain’ and perhaps ‘foster the continuation of life on this planet’, then it takes a broader perspective than either can offer.
Just doing Systems work doesn’t solve all the problems. For example, Stroh states that the 2008 financial debacle was ‘caused’ by the sub-prime mortgages. Yet the sub-prime mortgages are long ago buried in the vaults of the Federal Reserve, and the problems have not gone away. My own thinking is that the problems came from the confluence of at least three conditions:
*The decline in the growth of fossil fuel energy delivery to the non-energy sector of the economy. And now, most likely, the peaking and decline of fossil fuel energy delivered to the non-energy sector of the economy (BW Hill’s model for oil, for example).
*The inability of the economy to adjust to the declining energy delivered from fossil fuels. The doubling down on what worked during the long ascendancy of fossil fuels.
*The nature of willpower as laid out by Roy Baumeister, the Florida psychologist.
Since willpower is seldom discussed in these types of forums, let me explain briefly. Baumeister constructed an experiment. Volunteers were recruited, and asked not to eat before they appeared….so they were hungry. They were shown into the first room, which smelled of freshly baked chocolate chip cookies. There were also some fresh radishes. The volunteers were told not to eat the cookies, because they were needed for the next group, but to have some radishes if they wished. After 15 minutes or so, the group was ushered into the next room, where the official experiment was supposed to take place. The task was to solve some problems in geometry which actually have no solution. The real purpose of Baumeister was to measure how long people will vainly attempt to solve the geometry problems before giving up. For this first group, it wasn’t very long.
A second group was ushered into the chocolate chip room, told that the experiment room wasn’t quite ready yet, but to have some radishes or cookies if they wished. The second group spent a lot more time vainly trying to solve the geometry problems before giving up.
The conclusion is that willpower is a depletable resource. When we resist temptation, we deplete our willpower. Baumeister’s experiment launched a tide of other experiments which revealed that, for example, driving in heavy traffic depletes willpower….which explains why the food at the rest stops on the Jersey Turnpike is so atrocious. Knowledge alone is not enough.
One solution to the willpower problem is to systematically eliminate temptation from one’s life. A structural solution rather than a ‘psychological boosting of willpower’ solution. Of course, the Big Food people (and many others) are doing their best to structure the world so that temptation is impossible to avoid.
My guess is that the increasing stress (as revealed by public health statistics) in the US has depleted our supply of willpower. Thus, when banks offer sub-prime loans, people do not have the resources to resist them. When Wall Street offers up High Yield shale oil backed securities, investors don’t have the resources to resist them.
My conclusion is that, yes, sometimes it’s just personality conflict which leads to Accidental Adversaries, and sometimes Systems Thinking can help overcome the animosities. But for the very large systemic problems arising out of falling energy supplies, it is necessary to peel back a lot more layers than a civilized conversation in a conference room is likely to involve, and that the layers have to be based on good foundational science as well as Systems Science.
For example, I recently read
(http://www.anthropology-news.org/?book-review=milpa-forest-garden-maya-agro-ecosystems
that current research indicates that the Maya just walked away from their cities and went back to Milpa agriculture which was sustainable for thousands of years. If I were trying to assemble a group to work on a plan for ‘minimizing the pain of adjustment’, I would include the person who did the research on the Maya. If we need to walk away from Wall Street and The Pentagon and Multinationals, what clues can we glean?
Don Stewart
Don,
one little remark about willpower.
Kelly McGonigal appearently has a very different view, as she compares willpower with a muscle one can train and strengthen, for the benefit of the self and the community.
https://en.m.wikipedia.org/wiki/Kelly_McGonigal#Willpower
IMHO, the difference is wether people have a goal, or not.
Kelly says that willpower must be used to resist impulsive drives, but this is in the context of helping acheive rational long-term goals,
while in your examples (waiting room and traffic-jam), people are just frustrated and powerless ; the only “goal” here seems to be see the unpleasant period of time coming to an end. This isn’t a real purpose, as the people are just enduring stress, which actually is taking energy and maintaining the mind (and body) under pressure (adrenalin, cortisol, etc), uselessly.
I guess that, if people in your examples were able to turn those moments into something useful and connected to some personal long-term goal, that would leave them relaxed and in much better shape in the end.
For example, people in the waiting room could consider that resisting to chocolate is part of their program to be fit (thus turning the frustration into a little victory), and those in the traffic-jam could take advantage of the moment to focus on mental or relaxation or respiratory exercises.
Then, “the parasympathetic nervous system turns on, and healing hormones like oxytocin, dopamine, nitric oxide, and endorphins fill the body and bathe every cell.”
The quote is from this article by Lissa Rankin:
http://www.biznews.com/health/2014/03/14/placebo-magic-medicine-deep-relaxation-response-answer/
One of her TED talks: http://youtu.be/LWQfe__fNbs
Dear Stefeun
I agree with everything you say. When I walk past a rack of Cheese Doodles, I’m not resisting temptation, I’m either just ignoring them or else I’m feeling disgust. But I know that there are other people for whom walking past a rack of Cheese Doodles is just painful.
There is a PhD psychologist who runs what she calls a ‘boot camp’ for those who are especially susceptible to temptation. She got into it from a 12 Step Program. She calls it the ‘bright line’ program…the boot campers learn to draw a bright line and just don’t cross it. I suspect that, like me, they learn disgust for what is on the other side of the line.
I have made the point here several times that neither my parents nor my wife’s parents were ever in debt. Both had put debt on the other side of a bright line. My wife and I did not avoid debt completely, but we were out of debt completely by our late 40s. The last car I bought with credit was in college, 50 years ago.
Whether we were smart or just lucky is up for debate, but it is certainly true that most people are now carrying as much debt as they can manage. If anything interferes with that ‘ability to manage’, then they are in deep trouble.
Globally, depression is now the most costly disease (or so I have heard). I think that the rise of depression to global prominence has a lot to do with the way the structure of life has changed, especially since WWII. The safety net of moving back to the family farm has been almost completely obliterated. And the trapeze swings are moving faster and faster and Silicon Valley types gloat about ‘disrupting’ industries. Thiel is bragging about disrupting the petroleum industry.
Thanks for the comment…Don Stewart
I concur with urbangdl: great comments; thank you.
No one person can ever have “a complete diagnosis.”
I always like your comments Don!
In regards to human psychology as you point out it is a factor we must consider whether it is for good or bad actions. I think The right attitude is a powerful factor for change.
Pingback: Low Oil Prices – Why Worry? | Doomstead Diner
Have you seen this Gail?
I found it looking for overall debt of the energy sector by source since I think that would be interesting information.
http://www.secureenergy.org/OilDebt
“The Part Two analysis estimates how reducing petroleum dependence through improved fuel economy and the increased use of alternative-fuel vehicles in the transportation sector could affect the U.S. economy and federal budget in the future. The study finds that cutting oil consumption in the transportation sector in half over the next three decades would make the federal budget deficit $492 billion lower in 2040, cause the federal government to accumulate $5 trillion less debt over the 2014-2040 period, and result in a federal debt-to-GDP ratio that is 10.3 percentage points lower in 2040.
Oil and the Debt makes a powerful argument that policymakers should consider the potential short-and long-term fiscal benefits of reducing American oil dependence.”
This report was written back when oil prices were high. In fact, buyers cannot afford the high price of oil or of high-priced renewables. It is easy to assume that BAU with lots of debt will continue, but our problem is that it can’t, and doesn’t because high-priced oil isn’t affordable. Thus the growth in debt doesn’t continue, and the Ponzi scheme come toppling down.
We really need to be getting a much higher return (in kWh or barrels of oil) per dollar spent for energy products. It is the energy itself that makes the economy run.
“This report was written back when oil prices were high.”
Yes, but it shows the diminishing returns due to over extended credit. It was already prevalent before the lower price of oil.
“We really need to be getting a much higher return (in kWh or barrels of oil) per dollar spent for energy products. It is the energy itself that makes the economy run.”
I agree 100%. Where we don’t agree is simply that you are focused on extraction which is the beginning of the FF chain, and I am focused on the efficiency at the end point where the work from the FFs actually gets used.
If I can use less energy at the endpoint, you get a much higher return (in KWh or barrels of oil) per dollar spent. This can be done with efficiency upgrades or it can be done with things like Solar, where you spend FFs to create a product that can deliver 10x the input energy.
The real trick is finding places where you can make it cost effective. Not all alternative solutions are equally cost effective in all situations. Nor are they going to be, nor have they ever been.
Even FFs aren’t equally cost effective. If I have NG in my backyard, that is going to be cheaper then buying oil from my neighbor to do the same amount of work.
Google: At Glencore, a Mining Emperor Tries to Save His Realm
The we have http://money.cnn.com/2015/10/02/investing/glencore-shares-directors/ I suspect the Fed is buying as well….
http://i2.cdn.turner.com/money/dam/assets/151002125551-glencore-shares-0210-780×439.png
Oh … and as for pensions … I am not a fan …. my pension is in the creek in the form of a solar pump rig and some pipe… boxes of ammo … shovels… and water tanks….
J.C. Penney Co. said Friday it would cut its $5 billion pension obligation up to about a third, through a lump-sum offer to participants in addition to a deal with Prudential.
http://www.wsj.com/articles/j-c-penney-cuts-pension-plan-obligation-1443785761
“Dow Jones Industrial Average futures dropped more than 200 points Friday as a disappointing jobs report, pointing to deceleration in the labor market, triggered fears about slowing growth in the economy.
“The U.S. economy added 142,000 jobs last month, far less than the expected 200,000, while gains in the previous two months were cut, suggesting the labor market had cooled off toward the end of the summer. The unemployment rate remained at 5.1% and wage growth was flat.”
http://www.marketwatch.com/story/us-stock-futures-rise-ahead-of-jobs-data-that-could-usher-in-a-rate-increase-2015-10-02
The cynic in me says that the Fed were happy to let this report go out unadorned because it now means there is no case for putting up rates. Handy, especially as the IMF has just in effect warned them not to because of the emerging markets’ colossal dollar-debt load.
Labor participation rate down to levels last seen in 1977: https://twitter.com/tomkeene/status/649924987265118208/photo/1?ref_src=twsrc%5Etfw
Scary slowdowns in manufacturing in many nations to add to the global slowdown in trade and capex investment. If we’re investing less money, extracting less stuff, making less stuff and trading less stuff (plus using less energy to do it) then it seems pretty clear industrial civilization is past peak.
The DOW finished up +200 pts at the close of trading today.
The markets are stimulus-addicted and dizzy. It is the jobs report that is of interest.
Although the jobs report is fake…. based on the numbers we have what is termed ‘full employment’
The corporate profits reports appear not to be fake…. down nearly 7%… but then perhaps the numbers are far worse than that…
Very difficult to know what is real and what is not real… the closer we get to the end game the bigger the lies will be…