Why is the price of oil so low now? In fact, why are all commodity prices so low? I see the problem as being an affordability issue that has been hidden by a growing debt bubble. As this debt bubble has expanded, it has kept the sales prices of commodities up with the cost of extraction (Figure 1), even though wages have not been rising as fast as commodity prices since about the year 2000. Now many countries are cutting back on the rate of debt growth because debt/GDP ratios are becoming unreasonably high, and because the productivity of additional debt is falling.
If wages are stagnating, and debt is not growing very rapidly, the price of commodities tends to fall back to what is affordable by consumers. This is the problem we are experiencing now (Figure 1).
Figure 1. Author’s illustration of problem we are now encountering.
I will explain the situation more fully in the form of a presentation. It can be downloaded in PDF form: Oops! The world economy depends on an energy-related debt bubble. Let’s start with the first slide, after the title slide.
Slide 2
Growth is incredibly important to the economy (Slide 2). If the economy is growing, we keep needing to build more buildings, vehicles, and roads, leading to more jobs. Existing businesses find demand for their products rising. Because of this rising demand, profits of many businesses can be expected to rise over time, thanks to economies of scale.
Something that is not as obvious is that a growing economy enables much greater use of debt than would otherwise be the case. When an economy is growing, as illustrated by the ever-increasing sizes of circles, it is possible to “borrow from the future.” This act of borrowing gives consumers the ability to buy more things now than they would otherwise would be able to afford–more “demand” in the language of economists. Customers can thus afford cars and homes, and businesses can afford factories. Companies issuing stock can expect that price of shares will most likely rise in the future.
Without economic growth, it would be very hard to have the financial system that we have today, with its stable banks, insurance companies, and pension plans. The pattern of economic growth makes interest and dividend payments easier to make, and reduces the likelihood of debt default. It allows financial planners to set up savings plans for retirement, and gives people confidence that the system will “be there” when it is needed. Without economic growth, debt is more of a last resort–something that might land a person in debtors’ prison if things go wrong.
Slide 3
It should be obvious that the economic growth story cannot be true indefinitely. We would run short of resources, and population would grow too dense. Pollution, including CO2 pollution, would become an increasing problem.
Slide 4
The question without an obvious answer is “When does the endless economic growth story become untrue?” If we listen to the television, the answer would seem to be somewhere in the distant future, if a slowdown in economic growth happens at all.
Most of us who read financial newspapers are aware that more debt and lower interest rates are the types of stimulus provided to the economy, to try to help it grow faster. Our current “run up” in debt seems to have started about the time of World War II. This growing debt allows “demand” for goods like houses, cars, and factories to be higher. Because of this higher demand, commodity prices can be higher than they otherwise would be.
Thus, if debt is growing quickly enough, it allows the sales price of energy products and other commodities to stay as high as their cost of extraction. The problem is that debt/GDP ratios can’t rise endlessly. Once debt/GDP ratios stop rising quickly enough, commodity prices are likely to fall. In fact, the run-up in debt is a bubble, which is itself in danger of collapsing, because of too many debt defaults.
Slide 5
The economy is made up of many parts, including businesses and consumers. The consumers have a second role as well–many of them are workers, and thus get their wages from the system. Governments have many roles, including providing financial systems, building roads, and providing laws and regulations. The economy gradually grows and changes over time, as new businesses are added, and others leave, and as laws change. Consumers make their decisions based on available products in the marketplace and they amount they have to spend. Thus, the economy is a self-organized networked system–see my post Why Standard Economic Models Don’t Work–Our Economy is a Network.
One key feature of a self-organized networked system is that it tends to grow over time, as more energy becomes available. As its grows, it changes in ways that make it difficult to shrink back. For example, once cars became the predominant method of transportation, cities changed in ways that made it difficult to go back to using horses for transportation. There are now not enough horses available for this purpose, and there are no facilities for “parking” horses in cities when they are not needed. And, of course, we don’t have services in place for cleaning up the messes that horses leave.
Slide 6
When businesses start, they need capital. Very often they sell shares of stock, and they may get loans from banks. As companies grow and expand, they typically need to buy more land, buildings and equipment. Very often loans are used for this purpose.
As the economy grows, the amount of loans outstanding and the number of shares of stock outstanding tends to grow.
Slide 7
Businesses compete by trying to make goods and services more efficiently than the competition. Human labor tends to be expensive. For example, a sweater knit by hand by someone earning $10 per hour will be very expensive; a sweater knit on a machine will be much less expensive. If a company can add machines to leverage human labor, the workers using those machines become more productive. Wages rise, to reflect the greater productivity of workers, using the machines.
We often think of the technology behind the machines as being important, but technology is only part of the story. Machines reflecting the latest in technology are made using energy products (such as coal, diesel and electricity) and operated using energy products. Without the availability of affordable energy products, ideas for inventions would remain just that–simply ideas.
The other thing that is needed to make technology widely available is some form of financing–debt or equity financing. So a three-way partnership is needed for economic growth: (1) ideas for inventions, (2) inexpensive energy products and other resources to make them happen, and (3) some sort of financing (debt/equity) for the undertaking.
Workers play two roles in the economy; besides making products and services, they are also consumers. If their wages are rising fast enough, thanks to growing efficiency feeding back as higher wages, they can buy increasing amounts of goods and services. The whole system tends to grow. I think of this as the normal “growth pump” in the economy.
If the “worker” growth pump isn’t working well enough, it can be supplemented for a time by a “more debt” growth pump. This is why debt-based stimulus tends to work, at least for a while.
Slide 8
There are really two keys to economic growth–besides technology, which many people assume is primary. One key is the rising availability of cheap energy. When cheap energy is available, businesses find it affordable to add machines and equipment such as trucks to allow workers to be more productive, and thus start the economic growth cycle.
The other key is availability of debt, to finance the operation. Businesses use debt, in combination with equity financing, to add new plants and equipment. Customers find long-term debt helpful in financing big-ticket items such as homes and cars. Governments use debt for many purposes, including “stimulating the economy”–trying to get economic growth to speed up.
Slide 9
Slide 9 illustrates how workers play a key role in the economy. If businesses can create jobs with rising wages for workers, these workers can in turn use these rising wages to buy an increasing quantity of goods and services.
It is the ability of workers to afford goods like homes, cars, motorcycles, and boats that helps the economy to grow. It also helps to keep the price of commodities up, because making these goods uses commodities like iron, steel, copper, oil, and coal.
Slide 10
In the 1900 to 1998 period, the price of electricity production fell (shown by the falling purple, red, and green lines) as the production of electricity became more efficient. At the same time, the economy used an increasing quantity of electricity (shown by the rising black line). The reason that electricity use could grow was because electricity became more affordable. This allowed businesses to use more of it to leverage human labor. Consumers could use more electricity as well, so that they could finish tasks at home more quickly, such as washing clothes, leaving more time to work outside the home.
Slide 11
If we compare (1) the amount of energy consumed worldwide (all types added together) with (2) the world GDP in inflation-adjusted dollars, we find a very high correlation.
Slide 12
In Slide 12, GDP (represented by the top line on the chart–the sum of the red and the blue areas) was growing very slowly back in the 1820 to 1870 period, at less than 1% per year. This growth rate increased to a little under 2% a year in the 1870 to 1900 and 1900 to 1950 periods. The big spurt in growth of nearly 5% per year came in the 1950 to 1965 period. After that, the GDP growth rate has gradually slowed.
On Slide 12, the blue area represents the growth rate in energy products. We can calculate this, based on the amount of energy products used. Growth in energy usage (blue) tends to be close to the total GDP growth rate (sum of red and blue), suggesting that most economic growth comes from increased energy use. The red area, which corresponds to “efficiency/technology,” is calculated by subtraction. The period of time when the efficiency/technology portion was greatest was between 1975 and 1995. This was the period when we were making major changes in the automobile fleet to make cars more fuel efficient, and we were converting home heating to more fuel-efficient heating, not using oil.
Slide 13
If we look at economic growth rates and the growth in energy use over shorter periods, we see a similar pattern. The growth in GDP is a little higher than the growth in energy consumption, similar to the pattern we saw on Slide 12.
If we look carefully at Slide 13, we see that changes in the growth rate for energy (blue line) tends to happen first and is followed by changes in the GDP growth rate (red line). This pattern of energy changes occurring first suggests that growth in the use of energy is a cause of economic growth. It also suggests that lack of growth in the use of energy is a reason for world recessions. Recently, the rate of growth in the world’s consumption of energy has dropped (Slide 13), suggesting that the world economy is heading into a new recession.
Slide 14
There is nearly always an investment of time and resources, in order to make something happen–anything from the growing of food to the mining of coal. Very often, it takes more than one person to undertake the initial steps; there needs to be a way to pay the other investors. Another issue is the guarantee of payment for resources gathered from a distance.
Slide 15
We rarely think about how all-pervasive promises are. Many customs of early tribes seem to reflect informal rules regarding the sharing of goods and services, and penalties if these rules are not followed.
Now, financial promises have to some extent replaced informal customs. The thing that we sometimes forget is that the bonds companies offer for sale, and the stock that companies issue, have no value unless the company issuing the stock or bonds is actually successful. As a result, the many promises that are made are, in a sense, contingent promises: the bond will be repaid, if the company is still in business (or if the company is dissolved, if the amount received from the sale of assets is great enough). The future value of a company’s stock also depends on the success of the company.
Slide 16
Governments become an important part of the web of promises. Governments collect their assessments through taxes. As an economy grows, the amount of government services tends to increase, and taxes tend to increase.
The roles of governments and businesses vary somewhat depending on the type of economy of a country. In a sense, this type of variation is not important. It is the functioning of the overall networked system that is important.
Slide 17
There was a very large run up in US debt about the time of World War II, not just in the US, but also in the other countries involved in World War II.
Adding the debt for World War II helped pull the US out of the lingering effects of the Depression. Many women started working outside the home for the first time. There was a ramp-up of production, aimed especially at the war effort.
Slide 18 – From The United States’ 65-Year Debt Bubble
What does a country do when a war is over? Send the soldiers back home again, without jobs, and the women who had been working to support the war effort back home again, also without jobs? This was a time period when non-government debt ramped up in the US. In fact, it seems to have ramped up elsewhere around the world as well. The new debt helped support many growing industries at the time–helping rebuild Europe, and helping build homes and cars for citizens in the US. As noted previously, both energy use and GDP soared during this time period.
Slide 19
I haven’t found very good records of debt going back very far, but what I can piece together suggests that the rate of debt growth (total debt, including both government and private debt) was similar to the rate of growth of GDP, up until about 1975. Then, debt began growing much more rapidly than GDP.
Slide 20
The big issue that led to a big increase in the need for debt in the early 1970s was an increase in the price of oil. Oil is the single largest source of energy. It is used in many important ways, including making food, transporting coal, and extracting metals. Thus, when the price of oil rises, so does the price of many other goods.
As we noted on Slides 11, 12, and 13, it is the growing quantity of energy consumption that is important in providing economic growth. The natural tendency with high energy prices is to cut back on energy-related consumption. Increasing debt, if it is at a sufficiently low interest rate, helps counteract this natural tendency toward less energy usage. For example, the availability of debt at a low interest makes it possible for more consumers to purchase big-ticket items like houses, cars, and motorcycles. These products indirectly lead to the growing consumption of energy products, because energy is used in making these big-ticket items and because they use energy in their continuing operation.
Slide 21
Many people have been concerned about what they call “peak oil”–the idea that oil supply would suddenly drop because we reach geological limits. I think that this is a backward analysis regarding how the system works. There is plenty of oil available, if only the price would rise high enough and stay high for long enough.
Much of this oil is non-conventional oil–oil that cannot be extracted using the inexpensive approaches we used in the early days of oil production. In some cases, non-conventional oil is so viscous it needs to be melted with steam, before it will flow freely. Some of the unconventional oil can only be extracted by “fracking.” Some of the unconventional oil is very deep under the ocean. Near Brazil, this oil is under a layer of salt. If prices would remain high enough, for long enough, we could get this oil out.
The problem is that in order to get this unconventional oil out, costs are higher. These higher costs are sometimes described as reflecting diminishing returns–more capital goods are needed, as are more resources and human labor, to produce additional barrels of oil. The situation is equivalent to the system of oil extraction becoming less and less efficient, because we need to add more steps to the operation, raising the cost of producing finished oil products. The higher price of oil products spills over to a higher cost for producing food, because oil is used in operating farm equipment and transporting food to market. The higher cost of oil also spills over to the cost of almost anything that is shipped long distance, because oil is used as a transportation fuel.
You will remember that increased efficiency is what makes an economy grow faster (Slide 7, also Slide 37). Diminishing returns is the opposite of increased efficiency, so it tends to push the economy toward contraction. We are running into many other forms of increased inefficiency. One such type of inefficiency involves adding devices to reduce pollution, for example in electricity production. Another type of inefficiency involves switching to higher-cost methods of generation, such as solar panels and offshore wind, to reduce pollution. No matter how beneficial these techniques may be from some perspectives, from the perspective of economic growth, they are a problem. They tend to make the economy grow more slowly, rather than faster.
The standard workaround for slow economic growth is more debt. If the interest rate is low enough and the length of the loan is long enough, consumers can “sort of” afford increasingly expensive cars and homes. Young people with barely adequate high school grades can “sort of” afford higher education. With cheap debt, businesses can afford to buy back company stock, making reported earnings per share rise–even though after the buy-back, the actual investment used to generate future earnings is lower. With sufficient cheap debt, shale companies can create models showing that even if their cash flow is negative at $100 per barrel oil prices ($2 out for $1 in) and even more negative at $50 per barrel ($4 out for $1 in), somehow, the companies will be profitable in the very long run.
The technique of adding more debt doesn’t fix the underlying problem of growing inefficiency, instead of growing efficiency. Instead, as more debt is added, the additional debt becomes increasingly unproductive. It mostly provides a temporary cover-up for economic growth problems, rather than fixing them.
Slide 22
A common belief has been that as we reach limits of a finite world, oil prices and perhaps other prices will spike. In my view, this is a wrong understanding of how things work.
What we have is a combination of rising costs of production for many kinds of goods at the same time that wages are not rising very quickly. This problem can be temporarily hidden by a rising amount of debt at ever-lower interest rates, but this is not a long-term solution.
We end up with a conflict between the prices businesses need and the prices that workers can afford. For a while, this conflict can be resolved by a spike in prices, as we experienced in the 2005-2008 period. These spikes tend to lead to recession, for reasons shown on the next slide. Recession tends to lead to lower prices again.
Slide 26
The image on Slide 26 shows an exaggeration to make clear the shift that takes place, if the price of oil spikes. When the price of one necessary part of consumers’ budgets increases–namely the food and gasoline segment–there is a problem. Debt payments already committed to, such as those on homes and automobiles, remain constant. Consumers find that they must cut back on discretionary spending–in other words, “Everything else,” shown in green. This tends to lead to recession.
Slide 27
If we look at oil prices since 2000, we see that the period is marked by steep rises and falls in oil prices. In Slides 27 – 29, we will see that changes in the price of oil tend to correspond to changes in debt availability and cost.
In 2008, oil prices rose to a peak in July, and then dropped precipitously to under $40 per barrel in December of the same year. Slide 27 shows that the United States began its program of Quantitative Easing (QE) in late 2008. This helped to lower interest rates, especially longer-term interest rates. China and a number of other countries also raised their debt levels during this period. We would expect greater debt and lower interest rates to increase demand for commodities, and thus raise their prices, and in fact, this is what happened between December 2008 and 2011.
The drop in prices in 2014 corresponds to the time that the US phased out its program of QE, and China cut back on debt availability. Here, the economy is encountering less cheap debt availability, and the impact is in the direction expected–a drop in prices.
Slide 28 – From The United States’ 65-Year Debt Bubble
If we go back to the steep drop in oil prices in July 2008, we find that the timing of the drop in prices matches the timing when US non-governmental debt started falling. In my academic article, Oil Supply Limits and the Continuing Financial Crisis, I show that this drop in debt outstanding takes place for both mortgages and credit card debt.
Slide 29
The US government, as well as other governments around the world, responded by sharply increasing their debt levels. This increase in governmental debt (known as sovereign debt) is part of what helped oil and other commodity prices to rise again after 2008.
Slide 30
We often hear about the drop in oil prices, but the drop in prices is far more widespread. Nearly all commodities have dropped in price since 2011. Today’s commodity price levels are below the cost of production for many producers, for all of these types of commodities. In fact, for oil, there is hardly any country that can produce at today’s price level, even Saudi Arabia and Iraq, when needed tax levels by governments are considered as well.
Producers don’t go out of business immediately. Instead, they tend to “hold on” as best they can, deferring new investment and trying to generate as much cash flow as possible. Because most of them have no alternative way of making a living, they often continue producing, as best they can, even with low prices, deferring the day of bankruptcy as long as possible. Thus, the glut of supply doesn’t go away quickly. Instead, low prices tend to get worse, and low prices tend to persist for a very long period.
Slide 31
In 2008, we had an illustration of what can go wrong when the economy runs into too many headwinds. In that situation, the price of oil and other commodities dropped dramatically.
Now we have a somewhat different set of headwinds, but the impact is the same–the price of commodities has dropped dramatically. Wages are not rising much, so they are not providing the necessary uplift to the economy. Without wage growth, the only other approach to growing the economy is debt, but this reaches limits as well. See my post, Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)
There is some evidence that the Great Depression in the 1930s involved the collapse of a debt bubble. It seems to me that it may very well have also involved wages that were falling in inflation-adjusted terms for a significant number of wage-earners. I say this, because farmers were moving to the city in the early 1900s, as mechanization led to lower prices for food and less need for farmers. I haven’t seen figures on incomes of farmers, but I wouldn’t be surprised if they were dropping as well, especially for the many farmers who couldn’t afford mechanization. Wages for those who wanted to work as laborers on farms were likely also dropping, since they now needed to compete with mechanization.
In many ways, the situation that led up to the Great Depression appears to be not too different from our situation today. In the early 1900s, many farmers were being displaced by changes to agriculture. Now, wages for many are depressed, as workers in developed economies increasingly compete with workers in historically low-wage countries. Additional mechanization of manufacturing also plays a role in reducing job opportunities.
If my conjecture is right, the Great Depression may have been caused by problems similar to what we are seeing today–wages that were too low for a large segment of the economy, thus reducing economic growth, and a temporary debt bubble that tended to cover up the wage problem. Once the debt bubble collapsed, demand for commodities of all types collapsed, and prices collapsed. This problem was very difficult to fix.
Slide 32
When we add more debt to the economy, users of debt-financing find that more of their future income goes toward repaying that debt, cutting off the ability to buy other goods. For example, a young person with a large balance of student loans is unlikely to be able to afford buying a house as well.
A way of somewhat mitigating the problem of too much income going toward debt repayment is lowering interest rates. In fact, in quite a few countries, the interest rates governments pay on debt are now negative.
Slide 33
If the cost of producing commodities continues to rise, but the price that consumers can afford to pay does not rise sufficiently, at some point there is a problem. Instead of continuing to rise, prices start to fall below their cost of production. This drop can be very sharp, as it was in 2008.
The falling price of commodities is the same situation we encountered in 2008 (Slide 27); it is the same situation we reached at the beginning of the Great Depression back in 1929. It seems to happen when wage growth is inadequate, and the debt level is not growing fast enough to hide the inadequate wage growth. This time around, we are also challenged by the cost of producing commodities rising, something that was not a problem at the time of the Great Depression.
Slide 34
If we think about the situation, having prices fall behind the cost of production is a disaster. We can’t get oil out of the ground, if prices are too low. Farmers can’t afford to grow food commercially, if prices remain too low.
Prices of assets such as the value of farmland, the value of oil held by leases, and the value of metal ores in mines will fall. Assets such as these secure many loans. If an oil company has a loan secured by the value of oil held by lease, and this value falls permanently, there is a significant chance that the oil company will default on the loan.
The usual belief is, “The cure for low prices is low prices.” In other words, the situation will fix itself. What really happens, though, is that everyone is so afraid of a big crash that all parties make extreme efforts to avoid a crash. In fact, there is evidence today that banks are “looking the other way,” rather than taking steps to cut off lending to shale drillers, when current operations are clearly unprofitable.
By the time the crash does come around, it is likely to be a huge one, affecting many segments of the economy at once. Oil exporters and exporters of other commodities will be especially affected. Some of them, such as Venezuela, Yemen, and even Iraq may collapse. Financial institutions are likely to find themselves burdened with many “underwater loans.” The usual technique of lowering interest rates to try to aid the economy doesn’t look like it would work this time, because rates are already so low. Governments are not in sufficiently good financial condition to be able to bail out all of the banks and others needing assistance. In fact, governments may fail. The fall of the former Soviet Union occurred when oil prices were low.
Once there are major debt defaults, lenders will want to wait to see that prices will stay consistently high for a period (say, two or three years) before extending credit again. Thus, even if commodity prices should bounce back in 2017, it is doubtful that producers will be able to find financing at a reasonable interest rate until, say, 2020. By that time, depletion will have taken its toll. It will be impossible to make up for the many years of low investment at that time. Production is likely to continue falling, even if prices do rise.
The indirect impact of low oil and other commodity prices is likely to be a collapse in our current debt bubble. This collapsing bubble may lead to the failures of banks and even governments. It seems quite possible that these indirect impacts will affect us most, even more than the direct loss of commodities. These impacts could come quite quickly–in the next few months, in some cases.
Slide 35
Stocks, bonds, pension programs, insurance programs, bank accounts, and many other things of a financial nature seem to be very “solid” things–things that we can expect to be here and grow, for many years to come. Yet these things, directly and indirectly, depend on the ability of our system to produce goods and services. If something goes terribly wrong, we may find that financial assets have little more value than the pieces of paper that represent them.
Slide 36
I won’t try to explain Slide 36 further.
Slide 37
Slide 37 illustrates the principle of increased efficiency. If a smaller amount of resources and human labor can be used to create a larger amount of end product, this is growing efficiency. If more and more resources and labor are used to produce a smaller amount of end product, this is growing inefficiency.
The other part of the story is that simply automating processes is not enough. Instead, the economy must also produce a sufficiently large number of jobs, and these jobs must pay high enough wages that the workers can afford to buy the output of the economy. It is really the health of the whole interconnected system that is important.
Slide 38
Our low price problems are here now. That is why we need very cheap non-polluting energy products now, in large quantity, if there is any chance of fixing the system. These energy products must work in today’s devices, so we aren’t faced with the cost and delay involved with changing to new devices, such as cars and trucks that use a different fuel than petroleum.
Slide 39
Regarding Slides 39 and 40, we are sitting on the edge, waiting to see what will happen next.
The US economy temporarily seems to be in somewhat of a bubble, now that it does not have QE, while several other countries still do. This bubble is related to a “flight to quality,” and leads to a higher dollar, relative to other currencies. It also leads to high stock market valuations. As a result, the US economy seems to be doing better than much of the rest of the world.
Regardless of how well the US economy seems to be doing, the underlying problems of rising costs of producing commodities and prices that lag below the cost of production are still present, making the situation unstable. Wages continue to lag behind as well. We should not be too surprised if the economy starts taking major downward steps in the next few months.
Slide 40
Zinc producers keep on cutting back and yet prices keep on falling.
After Glencore Plc cut a third of its supply last month to combat a rout, the price rallied 10 percent and the gains lasted a month. When producers in China did the same on Friday, the jump was smaller and got rolled back after a day.
“The benefit of previous such announcements have been fleeting, and we are not expecting this occasion to be any different,” Australia & New Zealand Banking Group Ltd. analyst Daniel Hynes said in a note on Monday. “The market is intently focused on slowing growth in manufacturing activity in China.”
The rapid rollback of zinc’s bounce, which followed the announcement by China suppliers of output cuts for 2016, signals supply curtailments by producers probably won’t be sufficient on their own to change the course of the rout in base metals. That tallies with the view from Goldman Sachs Group Inc., which said in a note this month recent output cuts aren’t large enough to rescue prices, and that will require a substantial rise in Chinese demand. In addition to zinc, producers have also announced reductions in copper and aluminum.
http://www.bloomberg.com/news/articles/2015-11-23/the-one-day-rally-that-shows-goldman-may-be-right-on-metal-cuts
Ominous.
Or as Chauncey the Gardener might say… the garden is dying…
If we can get along without metal goods of all kinds, things are going fine. Not so well otherwise.
Dear Finite Worlders
For all of you who are looking for certainty about the future, I am here to show you how a person can become certain, when the real world is perhaps more complicated than the person’s model of reality.
My exhibit is this exchange on Peak Oil, concerning the question of whether the banks and the accounting profession will shut down oil companies which are losing money:
Question:
“Short, but don’t accounting firms that work for the banks that are lending money to the oil firms have something to say about this, as to protect banks?”
Answer:
If shale is any indication of what will happen, the banks will try to keep these outfits in business for as long as possible. They definitely don’t want to own, and have to operate an oil company. They don’t know how, and they know that they don’t. Also, these firms aren’t doing anything illegal (as of yet). The IRS allows them to carry losses forward for seven years. They don’t have to write them off immediately. The world is still hoping, and praying that prices will go back up; we are saying that they can’t go up enough to bail out the industry. This is charms, amulets against evil, and spells vs physics. We have found that the spells usually don’t work very well!
Back to me.
Shortonoil (BW Hill) has a model which tells him that the thermodynamics of the situation say that the price of oil cannot exceed 66 dollars in 2016 and that the maximum price will continue to decline steadily over the next half decade or so. Meanwhile, the cost of producing oil (including the cost of running the society which produces and uses the oil) will inexorably increase. Thus, any new oil production which comes on line to offset the decline from legacy fields will, on average, lose money.
Hill is quite confident of his model, and tends to describe it as ‘the laws of physics’.
A mathematical model with just a few variables, as Hill has constructed, has a lot going for it. Consider the IPCC models which seem to have been constructed to mystify. Albert Bates, instead, refers to simple models which relate historical CO2 levels to global temperatures…James Hansen has constructed similar models and used similar reasoning. Tim Garrett greatly simplified the IPCC models by showing that, if we can predict the energy consumption of the global economy, we can predict CO2 emissions. If you are like me, you tend to go with the simpler models.
Hill has constructed a sophisticated, but simple, model. Since he first put the two pieces of the model together (production cost and ability to pay), he has also gotten the powerful feedback that the price of oil has declined sharply and global economic growth is anemic or negative. So far, he is batting 1000. It took him a couple of months to figure out the financial angles which keep oil from rising to the 66 dollars in his model (see the exchange which I started with), he now has all the players in their understandable positions. Everyone is behaving more or less rationally, if you grant that many of them are deluded and don’t understand the thermodynamics, to give a result which is not rational.
The question I want to pose is this: Is it possible to fall in love with an elegant model which seems to be giving good results, so that one overlooks some flaws? The answer, in my case, is ‘definitely’…I fall in love regularly with simple, elegant models. I am not trying to persuade anyone that Hill’s model has flaws, or that one should cast aspersions on it, merely to indicate some reasons for caution.
Hill’s model is NOT an EROI model. He can calculate EROI, as he defines that term, from his model, but the model is not built up from EROI calculations. Gail’s objection that ‘EROI has no clear definition’ is not an objection to EROI the way Hill simply uses it as an output from his model. The way Hill calculates EROI, I believe it is around 9 at the present time. If you want to argue that it is really 15 or 5, go right ahead but it doesn’t change anything in Hill’s model.
Hill uses both what we may call ‘oil field costs’ and also ‘societal costs’ in his model. The ‘oil field costs’ have been exhaustively discussed in tens of thousands of peak oil articles. But the big dollars are in that ‘societal costs’ bucket. Briefly, he finds that the ability of our global economy to turn a barrel of oil into something useful enough to not only pay for producing the barrel but also to generate a surplus has been declining. In fact, he believes that the break-even point happened in 2012, and we are now 3 years into ‘subsidizing oil’ by cannibalizing the rest of the economy. For example, he states that our society has invested a trillion dollars in shale, which will never be repaid. The trillion could have, perhaps, been put to some good use, but we frittered it away.
Which brings us down to the nagging question: Could we, at this late date, change society enough to make a difference in the effectiveness with which we use oil? Could we, for example, realize that fighting wars over oil will never pay for themselves, and stop the wars? Hill has stated that bringing about such a realization is one reason he persists in his lonely mission of trying to persuade people that oil is never going to be 70 dollars again, and that the Age of Oil is rapidly drawing to a close.
If you ask me to make a list of all the ways our society (particularly in the US) wastes oil, I could give you a long one. I won’t bother you with my list. Granted that the change would be wrenching, but if we really believed Hill’s model, what choice do we have?
Again, while I love elegant mathematical models which are also simple, Einstein warned us against ‘too simple’. I suggest that you keep my nagging question somewhere in the back of your mind.
Don Stewart
Dear Finite Worlders
Some data points from Albert Bates relative to climate change, extinction of mammals, and the potential to roll back carbon with several demonstrated agricultural and building methods.
http://peaksurfer.blogspot.com/2015/11/cool-buildings.html
The post begins with a discussion of a natural building symposium in a blessed place in southern New Mexico (where I will pretty soon celebrate our 50th wedding anniversary). Albert’s main purpose at the symposium was to promote the use of biochar in the buildings. As charcoal, biochar offers many ecological services to a building….which are not described in any detail in this particular post.
About half-way down the discussion shifts to the sequestration of carbon in the soil. Carbon rich soil both greatly increases the productivity of soil and also has the potential to sequester more carbon than we are emitting by burning fossil fuels.
You wil note that there are three pools of carbon in the soil. The first is the labile carbon, such as when a farmer or gardener simply turns the plant residue or a cover crop under and lets the residue be food for the soil microbes. This carbon does good work, but it is recycled back into carbon dioxide pretty rapidly as it does its work. The second pool consists of carbon which is in something like compost, which is resistant to microbes. It is resistant mostly because in the process of composting the microbes have vigorously attacked (and generated heat from) the compost pile. What remains is low energy density, which is not the favorite food of microbes. According to Albert, the low energy density carbon recycles back into carbon dioxide over decades. So we do have the potential to keep a lot of carbon dioxide out of the air and in the soil for the next few decades. An important consideration. (I also know some people who think compost carbon is sequestered for longer periods…I am not an authority.)
The final pool is recalcitrant carbon, which is in something like biochar. Biochar serves as a wonderful physical structure in which soil microbes can flourish…but they don’t eat it at all. Consequently, it can remain in the soil for a thousand years or so.
You will note the offhand comment from Albert that he is no longer concerned about feeding the world…there CAN BE plenty of food. He has virtually stopped eating meat and dairy, which contributes to his optimism in terms of calculating whether permaculture type agriculture really can feed the world. In another forum, Albert has said that planned grazing (a la Alan Savory) may be a critical component promoting carbon sequestration in grasslands. So I suppose Albert’s plan involves the restriction of beef and dairy cattle to grazing grass and the elimination of feeding grains to cows. That would cut beef and dairy production quite a lot.
For those of you who view the upcoming holidays as a time for giving rather than receiving, consider buying a bag of biochar and giving it to a small farmer near you.
Don Stewart
Monbiot (again) says:
“There is enough to meet everyone’s need, even in a world of 10 billion people.
There is not enough to meet everyone’s greed, even in a world of 2 billion people.”
http://www.monbiot.com/2015/11/19/pregnant-silence/
My own view on it is that, even if the 1st part of the sentence were true (ie feed 10B, which I doubt), it’s out of reach because it would involve big scale structural changes that are not possible without collapsing current BAU. Unfortunately.
OTOH, I totally agree with the 2nd part of the sentence.
“There is enough to meet everyone’s need, even in a world of 10 billion people.
There is not enough to meet everyone’s greed, even in a world of 2 billion people.”
Is that taken from a new Joan Baez song?
There is plenty to feed 10B — provided the supply of cheap to extract oil were infinite and we could continue to convert oil to food at the current 10:1 ratio.
Unfortunately with the cost of oil production over $100 per barrel — the formula is about to snap…
Someone needs to suggest George read FW.
Didn’t The Guardian recently have a massive campaign on their site urging the world to convert to solar energy? Monbiat writes for that paper no? Koombaya George… Koombaya….
We may have reached peak ( affordable ) oil, peak water, peak debt. but we certainly have not reached peak comments.
Well dolph, if FE is right and the people will die in three weeks either because the system collapses or because of a virus that was deliberatley put on the human population, how do you collect the 500 Mio People that you want to rescue for your underground Bunker? Gas will be rationed, people will be shooting in the cities. You take a scientist out of the house and he will be maimed by a 14 year old with a gun ? Dolph, I really do not see that there is a remote possibility to get “the right people” out of chaos in the time required. It is too risky to start that scenario in the first place.
The second thing is, you can not go to all the places you want to get Germanium for example if you need some for your anticipated DNA modification which is another of your dreams. You need a batallion of army availyble 24/7 to gard at least some 6 months of operating a mine until the rfeind product.
When the warlords will smell what you do, they will all come up and ask for ransom. Then the mine is only one step as usually the refining of the ore is done on the other side of the planet.
Not all people will die but the people left will be the most ruthless, that is for shure.
I bet that your scenario has been simulated and it does not work. It would have had to be done at least in 2009 when for example climate change was quite low. To start it now with all militaries in the world at high alert becaus of the terrorism threat will not work. The russians will check where all the helicopters with scientists go and send some KT there. On the other hand, the virus CAN of course easily be pinpointed to the terrorists. There will be no questioning about it.
As well with QE, you say, QE can solve all issues and we get inflation. QE is running at full throttle for 7 years now worldwide and the oil price has just crashed this year. The evidence points to the fact that your scenario is not “beeing run”…
Alright, the board is set, the pieces are moving. We have barely begun this collapse, it is definitely starting in earnest now. We have the facts, the graphs, the knowledge, we’ve been studying this for years. Let’s proceed to see how things play out, how people actually respond.
Don’t get me wrong, my vision of the future is extremely grim, too grim to even contemplate for 99.9% of people. It’s just that it’s, well, slow in our terms. But in historical terms, fast.
20 years. That’s how long our system has. That’s nothing! When I say our system I don’t mean growth, or profits. I mean the continuation of the American empire and the dollar as world reserve currency, and everything that flows from that.
In case anybody doubts my personal commitment, I have quit my job, am planning a career change and relocation, and have broken off contact with most of my family and friends. I would prefer not to but none of them is even remotely interested in doom, which makes them unreliable. My discretionary spending is cut by some 75% and I have consciously, thus far, made the decision not to have children.
What do you do differently, are you preparing at all?
20 years would be awesome!!!!
There is the known stuff like peak crude oil (perhaps even +condensate) per capita already happened, the same applies as per energy per capita. This plateauing effect since late 1960s has been masked by efficiencies and substitution in consumer behaviour. Plus the effect of debt orgies which just reached in some countries 600% (public and private), so could it go 1000-5000%, who can realiably deny it? The unknown known is the duration of this process till we hit the real physical wall. It could be under 5yrs or in 20yrs or even more into future.
In hindsight it would have been childs play to earn billions from “zero capital” only from those recent three markets upswings and three downswings of past two decades. But only percentiles of population were cunning-insiders greedy enough to do it. By now you could have a nice estate in the southern hemisphere including nuclear proof bunker large enough to house cattle, horses, trees etc. and be under “99.9% insurance policy” against these odds both of human and universe origin.
So the moral of the story is we just don’t know the future, meanigfull “all spectrum” preparation is futile and/or beyond expensive, so ordinary people should stick to “limited spectrum” preparation against low impact risks such few years of bad harvest, economic reset/pensions blowout, various civil disorders but always keep in mind it’s covering just a fraction of likely outcomes, so don’t despair you will likely loose this fight anyway.
“So the moral of the story is we just don’t know the future…”. We may not know every twist and turn, and what fun would that be anyway? But the ultimate trajectory is without a doubt. Between now and 2050 we will need to burn as much energy as was done since man discovered fire, which is utterly absurd. Thus, Judgment Day has been ordained for a day between now and then.
+++++
Quite right that one could have made a fortune from speculation.
Some of the rich are doing very well just that way even now: I know of a former hedge fund partner who – after the fund collapsed in 2008 – has since made some £20 million from property speculation in Europe. (A most unpleasant person).
From his perspective, BAU is paying off very well.
Souls like you are now a consultant…
I have been preparing for several years. I believe the right knowledge and good and skilled friends are important.The difficult thing is finding skilled friends. Most people nowdays like watching sports and other kinds of amusments which are useless outside of BAU. I’ve been studying and practising forestry and small scale farming. I think it’s good to know some traditional crafts as well like woodcraft and traditional housebuilding using wood and clay. Handling a scythe and sharpening tools is also good to know. Looking back and studying the tradition is probably useful since they had to do things without fossil fuels back in the old days. The kind of solutions used in the past can be a good thing to start from if you want to build a new house or producing food.
I am educated physicist and are interested in radiotechnology and power engineering. I have some hope it could be useful but maybe it will be knowledge just as useless as soccer. I am planning to relocate to the countrieside. My parents think I am crazy to leave a well paid job (as an actuary) in the city.
Hi Christopher, ah we are both educated as physicists. 🙂 My recommendation to you is stay an extra two years to save up some more money. It is virtually impossible to go back after you step out.
A farm in the Swedish countryside will be beautiful. When you buy please post pictures.
Hi, physics is a good subject. I belive this background has helped me a lot when studying other things like forestry and house construction. I have decided to buy a good farm when I find it.
I’ll post a picture. I would have prefered North america or New Zealand. When I looked into this some years ago I found out that New Zealand was the best place in which to relocate. Good climate, low population density, good for farming and you are likely to be left alone and not dragged into the turmoil of the overpopulated continents.
Are you going to be unemployed? I’m starting to believe living inland in a modest house, income from a-kassa, spending the days hunting, growing potatoes and playing with the snowscooter isn’t such a bad idea. Compared to paying 73% of margin income in taxes and living in a modest house bought for 8 years net income.
If there’s no engineering jobs I’ll try to get a teaching job in physics and math.
You are right. The funny thing is that everyone wants to be that guy “paying 73% of margin income in taxes and living in a modest house bought for 8 years net income”. It will soon be much more that 8 years of net income. I believe that now is a time for doing the opposite of what the great human herd does.
Maybe not much playing with the snowscooter. I am looking for a farm in the southern parts.
A little Koombaya to start the morning —- see the video at the bottom (love the music!) http://kootsecovillage.com/vision/alternative-currency/
Eco villages… I’ve looked at these … and my take on them is …. their goal is to find a group of yuppies who haven’t got the slightest clue … who shop at Wholefoods and who drive a Prius … sell them land … and set up a commune type gig …
It all sounds wonderful (it really does)… except that they haven’t got a clue … and commune type gigs do not work.
If this is the path that appeals — why not move into a community of people who do have a clue?
A community where most of the people have lived their lives farming — hunting — fishing — who know that you need to cooperate with neighbours …. who know how to handle weapons when the bad guys come so at least there is at least a small chance of survival…. then it doesn’t matter if you haven’t got a clue …. you can learn from these people….
I like Charles Eisenstein – he´s so.. Koombaya.. I cant´t get any more depth from him, then money and economics can be looked at from another point of view, any real world alternatives, nope, but, ah, such nice dozes of hopium certainly.
I get more depth from Noah Smith http://www.bloombergview.com/contributors/noah-smith from time to time, he has some brilliant observations.
Another I enjoy reading is Umair Haque, he also has some interesting insights from time to time http://umairhaque.com/project-type/essays/ https://hbr.org/search?term=umair+haque
But the master of describing the culture around us would have to be Chris Hedges https://www.youtube.com/watch?v=EfmiCLYweTQ
I used to really like Chris Hedges… (even though he is a minister…)
I used to read the New York Times and thought that was great…
But then I had to reconsider all of the above when I realized that a) Hedges doesn’t get it and b) the NYT is pravda — a very effective pravda because it mixes in a few exposes that make people then believe all the propaganda they pump out must be credible as well…
Then there was the moment of epiphany (re-posting for new visitors — if only someone had given this to me when I was 15… hopefully people find it useful)
The Way the World Works:
– The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will
– Resources are finite and therefore ownership is a zero sum game
– The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status
– Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources
– Competition always exist (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations
– Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources
– Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.
– One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)
– As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)
– And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.
– Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.
– Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.
– But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.
– But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.
– Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.
– So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.
– They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)
– Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.
– Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I
– In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.
– Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….
– Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….
– As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them
– Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!
Today, I think Chris Hedges pretty much gets it https://www.youtube.com/watch?v=GotSNw6s6GE
Sure he is a minister, but also a skilled wordsmith.
He does have a very convincing way with words….
Your view is Darwinian and in natural systems cooperation is displayed equally in interaction among species.
Humans cooperate — we formed tribes from the very beginning —- for the purposes of security from other marauding tribes — and for pillaging the resources and land of other tribes.
We are still doing that. We will ALWAYS do that.
Because we live in a Finite World – the fight over the limited resources is a zero sum game
People like Chris Hedges are fools.
He is part of the dominant tribe — he is on the winning team — he is living large off of the spoils — and he is in effect cheering for the other tribes to win the battle — even worse, he is trying to help them win the battle… one might call him a traitor.
What goes on in his mind?
Does he think that if the Russian tribe — or the Chinese tribe — wins the battle they will create a more equitable world?
Of course they won’t — they will put the boot on his neck — just as the winning tribes have always done from the Romans to the Ottomans to the Brits to the Americans — and they will take the resources of the vanquished — and the new king and his followers will live large.
This song is dedicated to Chris Hedges – and all those liberals out there who believe we can all live in peace and harmony ….
Should I support the folks that “turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them”? Well, I ask what’s in it for me?
You get the crumbs that they sweep off the table onto the floor after a meal…
The only way to get more is to get a position as a servant — waiter, cook, house keeper… (lawyer, banker, business person…)
“… people have lived their lives farming — hunting — fishing … ”
Fast Eddie, sometimes you show your citified roots. I have spent a good deal of my life hunting and fishing much less lately. I can tell you that when there is a real need to hunt and/or fish to get food, that there will be no game. It is very simple.
It would take me about an hour to kill an elk if I was of a mind (and I’m not even dressed). That elk would last me about 3 months. Problem is, i am considered a poor hunter by the hunters that I know, and they are correct. If the only food was in the wild when I went out originally, the good hunters would have slaughtered them all by the time I needed to go out again.
I’ve not always lived in a city….I was born in northern Canada in a rural area — I have hunted and fished a bit…
I am not taking the position that this is survivable — the more I grind away in our large garden here in New Zealand the more it occurs to me just how difficult post BAU will be — how many things could go wrong — how grim life will be….
And I am in one of the better places in the world… a place where there are massive numbers of deer and wild pigs — and not many people…. so I don’t think the wild life will easily be hunted to extinction on the south island of NZ… yet still — any sort of existence — compared to life with BAU — will be a brutal grind….
I guess my point is to show how totally futile these eco villages are… that there are better options if one is looking to hang around post Apocalypse… nothing more…
Yes, there are more important things, and New Zealand is voting for a new flag and by implication a glorious new future. Which flag design are YOU voting for?
Jeremy
Oh, but flags are so important: with them we cover our lies, and shield our eyes from what is really happening……
The other day some twat I met started to pontificate about getting rid of the queen as head of state. I said, what difference does it make once the grid goes down and everyone is starving to death after a few weeks? You should have seen the look on her face.
Dear Finite Worlders
For Tad Patzek in top form, see his essay on Indonesia and palm oil.
http://patzek-lifeitself.blogspot.com
Don Stewart
Thanks Don,
worth reading entirely, but let me paste here the first 2 paragraphs:
“And Indonesia keeps on burning…
In 2015, about 100,000 forest and peat fires were started in Indonesia to clear land for oil palm plantations. Palm oil is a valuable commodity used as an automotive fuel, for cooking, in shampoos, creams, lipsticks, mascaras, ice cream, chocolate, and so on. We consume ever more palm oil.
The Indonesian fires blanketed the entire region with haze and emitted more carbon dioxide than the U.S. Here is a good summary. I know you are busy and you probably will not devote 31 minutes of your time to watching something that might impact negatively your country and you. Please look at least at the first 10 minutes of this hard-hitting Coconut TV program. At nine minutes and 41 seconds you will hear about personal threats and thugs sent to dissuade activists from ever mentioning the criminals who run the largest Indonesian racket and pay off the government officials. These criminals work for several large corporations controlled by other nations, mostly rich Western democracies. In many ways, they represent you and me, and our pension plans. And so it goes…”
Consider that TPP, TTIP and other Intl trade-agreements are aiming to render big corporations allmighty (hurray for freedom in the -global- market!!) and you’ll realize that the pace of destruction is about to increase exponentially.
Ah, also like the conclusion:
“China’s experiment in exchanging their environment for cities and money is sputtering out as I am writing these words. In their zeal to pursue unchecked capitalism, Chinese rulers forgot that first people breathe, drink, and eat, and only then they watch TV or buy things on the internet. In other words, we are a part of the environment, not the other way around, as our insane current narrative would have it. An unhealthy damaged environment means no highly organized humans societies, just roaming gangs and warlords. Please look at the broader Middle East after 4000 years of agricultural civilizations. But that’s a completely different story…Or is it?”
RIP MANKIND
THEY BLEW IT ALL, AND DIED CHOKING IN SMOKE AND FLAME:
NOT REACHING FOR THE STARS, LIKE GODS;
BUT MERELY TO MAKE……
CHEAP ICE CREAM.
Very nice essay. It seems like folks focus on one preferred indicator (number of jobs created, EROEI, amount of CO2 emissions saved) and use that to justify almost anything at all, including wide spread burning of forests for palm oil.
On same topic, there’s also this article by George Monbiot, à few weeks ago:
“Indonesia is burning. So why is the world looking away?”
http://www.theguardian.com/commentisfree/2015/oct/30/indonesia-fires-disaster-21st-century-world-media
Unfortunately — the world is doing nothing about this — because palm oil is a crucial ingredient in a wide range of must have goods that the world demands…
http://www.worldwildlife.org/pages/which-everyday-products-contain-palm-oil
Palm oil is the cheapest option — and the world needs cheap resources… otherwise BAU stops….
Won’t be a very merry christmas… apparently:
“This market is looking like a disaster and the rates are a reflection of that,” warns one of the world’s largest shipbrokers, but while The Baltic Dry Freight Index gets all the headlines – having collapsed to all-time record lows this week – it is the spefics below that headline that are truly terrifying. At a time of typical seasonal strength for freight and thus global trade around the world, Reuters reports that spot rates for transporting containers from Asia to Northern Europe have crashed a stunning 70% in the last 3 weeks alone. This almost unprecedented divergence from seasonality has only occurred at this scale once before… 2008! “It is looking scary for the market and it doesn’t look like there is going to be any life in the market in the near term.”
http://www.zerohedge.com/news/2015-11-21/global-trade-just-snapped-container-freight-rates-plummet-70-3-weeks
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/11-overflow/20151119_bdiy.jpg
Not at all good, especially at this time of year!
Slow collapse? All right, I’ll take a crack at it. First, the history of the human race when you get right down to it is “I’m going to kill you and take your stuff.” It has been some time since we have faced that gritty truth given MAD. We are actually in the midst of a slow collapse. The emerging nations are being jettisoned and are going back to extreme poverty — South America, Africa, and soon to be India. The demand for oil will continue to decrease bringing the price down so that Fast Eddy’s favorite scenario, BAU can continue in the developed nations for quite some time.
Any nation that has a problem with that will be slowly eliminated. Wake up!!! This isn’t about the failure of a financial system and this isn’t Rome. This is hardball. Eventually, USA, Russia, Europe, China, Japan and a few other nations will be living pretty much as we do now. Everyone else will be starving. But, when I was growing up, that was BAU and I don’t think the developed countries will be morally conflicted in the least.
Good summary!
I think this is possible, but you have to ask a question:
Are we going to allow them to starve?
So far the answer is no. Every threat of starvation, disease, etc., is met with massive aid pouring from the industrial nations, and do gooders like Bill Gates, Bono, and others.
Will we have the guts to eliminate these voices from the discussion?
If it doesn’t show up on the TV, it just doesn’t matter. When was the last time you heard anything about Africa? Gates and Bono are just a salve for the conscious. The amount of money that they are spending is equivalent to a millionaire throwing a dime to a homeless person.
When collapse hits — Bono and Gates will be needing food aid too….
Like Everything Else, Alternative Energy Requires Cheap Oil
Ironically, alternative energy needs oil to replace oil
http://fpif.org/like-everything-else-alternative-energy-requires-cheap-oil/
n February, at Resilience, Frank Kaminski reviewed The World After Cheap Oil by three Finnish energy analysts. The book ranges from the looming shock to an unprepared world to the climate crisis dependence on oil has helped foment to evaluating alternative energy sources. Kaminski singles out two unusual features of Peak Oil that the authors cover. First, the “energy trap.”
It can be summarized thus. Once world oil production begins to decline and the resource goes from being abundant to scarce, the oil that would be needed to reduce society’s dependence on oil is no longer available. This is because, as noted earlier, alternative energy sources sorely depend on oil just for their current production, not to mention the massive build-outs required to make them the dominant fuels. In a world of scarce oil, every ounce of it we possess will have to meet essential needs before those of alternative energy. The trap will become ever more acute the further we move along the depletion curve, since the sacrifice required to invest in renewables will have to come out of an ever-shrinking pie.
Exactly! And we have to keep the renewables repaired, as well as the electricity transmission lines. To keep the electricity transmission lines repaired, we need to keep the roads repaired. This requires workers and trucks. We can never really stop our reliance on oil, with or without renewables.
Firstly all currencies are borrowed into existance. The dollar is not money but borrowed token currency. Interest rates are at a fed- contrived rate, which has no relationship to supply and demand.
We are at a point where as the interest rates reach zero, as they are for the banks, asset prices rise to near infintity. So as the currencies rush into the hyper inflating assets they leave the productive energy consuming manufacturing industries. Energy consumption falls along with prices. So the only direction for interest rates is up,( unless, of course, we have a complete state control of the economy cashless society etc) and the asset prices affected by these investments is down.When this happens assuming that we go back to some sorts of capitalistic economy, and interest rates reflect, once more, the market, business men will be, once again, able to assess whether their capital is best used in productive investment, or whether to leave it in cash. As interest rates rise productivity will rise and enterprises which are currently operating below marginal efficiency will close or restructure.
So the only way to measure eroi is to measure against capital, to do that, all debt has to either written off or realined to a gold and or silver standard. To talk of ever increasing debt to finance energy, is furthering the insolvency issue.
Prices are decided by choice of the best use of capital. Borrowing should be over a term with a return to private investors who have lent the money. Not ever increasing borrowing on energy to create some sort of phantom growth. Growth comes from the most efficient use of a assets, and energy and the division of labour (or best use of existing capital to effect maximum output over input). If ever increasing energy, and borrowing for the same, is required then insolvancy is close at hand.
Well, this is a nice scenario, but what we’ll get is war instead. The drums are already beating.
I am afraid we are at a situation where ever-increasing debt is needed to stay even–we have, in fact, been at this point since about 1975. We need very, very cheap energy to make the economy, without greatly increasing debt. We have been able to keep the system going temporarily with more and more debt. But ultimately, we cannot run a system that was built to run on $20 oil on higher-priced oil, or on higher-priced energy products of any kind. It hasn’t been working for a long time. We have tried globalization, and running up debt in the developing world, and that is no longer solving our problem either.
“We have tried globalization”
Isn’t it interesting that the men who orchestrate BAU have been introducing policies for decades now — all aimed at dealing with the pernicious effects of the increasing costs associated with energy extraction…
As you have indicated they thought up and implemented globalization … and 99.99% of the people on the planet are oblivious to the fact that globalization is directly related to the energy issue…
This war that has been waged on multiple fronts — is coming to an end.
The think tanks are running out of options…
Dear Gail and Others
I stated that Tim Garrett needs a thermodynamic model of oil in order to make some educated guesses about future oil supplies. Here is an example from BW Hill, posting at Peak Oil today:
‘2012 was the energy half way point; the point where it required as much energy to produce petroleum, and its products as it delivered to the general economy. It was also the point where the general economy could never again acquire all the petroleum produced. That indicates that prices will long term continue to fall, and inventories will increase until production is shut-in to compensate. The petroleum industry is now in its shut down phase.
This will directly affect the monetary/ financial system that allows for the present Petroleum Production System to function. As prices fall oil exporting nations will find their currencies coming under increasing stress. This will continue until they fail, and their sovereign wealth funds, that the Western banks have invested heavily into, along with them.
The ending of the oil age, and the pursuant crisis that will follow is likely to be best ascertained from the on going activities of the FX markets.’
Now, first, a caveat. Hill’s model may be wrong, in which case his model is misleading him. But assuming that his model is right, then he is able to deduce some things about the petroleum market and also figure out some knock-on effects such as foreign exchange trends and government collapses. Needless to say, social turmoil and economic collapse are also in the picture. I am pretty sure Hill is correctly drawing inferences from his model…which doesn’t guarantee that the model itself is correct. Tim Garrett needs a thermodynamic model which is similar if he is going to intelligently predict the future of emissions.
Don Stewart
Clearly I have touched a nerve, so let me do it again.
I and many others have put forth here, in many posts, our vision of what we actually see coming over the next several decades, and it isn’t pretty. But nonetheless we have attempted to use what we know to come to a forecast about what is going to happen.
So, this is my challenge to you fast collapsers, who insist that any day now, everything is going to be unavailable. Come up with your own vision of what is ahead, put a timeframe on it, and actually post it here. That way, we can begin to compare these things as time marches on.
1) If the electrical grid worldwide is going down, when will that happen? A day, a month, a year from now? Post a prediction when you think all electricity, everywhere on this planet, is going to be gone forever.
2) If you think there is going to be no fuel available, anywhere on this planet, what is your timeline for that?
3) If you think every single grocery store on this planet is going to be completely bare, what is your timeline for that?
If you think we are all going extinct, again, go ahead and list some mechanisms and how this actually takes place.
You need to start to make some predictions, some forecasts. I’ll be waiting. Let’s move this discussion forward and have a “doomer forecast competition”. A little competition is a good thing, right? And if you aren’t willing to put down a forecast, doesn’t that prove your own lack of confidence on how this will play out?
My dolf baby you have become awfully adversarial. One could even question your motives. There is a lot to be said for your underlying argument but your method of presentation reveals much.
Myself I see it this way. Despite clear and convincing arguments that collapse should have occured it has not. That is a fact. It doesnt mean that the model is wrong. Since BAU is continuing it is a fact that it can continue. Hence I prepare for both, collapse and continuation of BAU.
Now wasnt that much easier instead all of that challenging and desire to butt heads like a couple of rams?
2016 Q1 ECB goes in to negative interest rates
2016 Q2 FED goes in to negative interest rates, marketed as the “new normal”
2016 Q3 California draughts continue and the record El Nino event reduces crops globally
2016 Q4 China closes stock markets (again), devalues money
2017 Q1 Greece defaults, left hanging by the ECB
2017 Q2 IMF gives out huge amounts of SDR:s
2017 Q3 California small farmers decimated, and globally countries are left with record low on grain reserves
2017 Q4 What ever emergency measures are left Japan, ECB and FED implement them. Debt marketed globally as “this is the new normal; never pay back the principal”
2018 Q1 Because the 1,4b Chinese population can not be adequately provided with food, the Chinese make a move on the petrodollar
2018 Q2 Unable to be sure of the petrodollar the US treasuries become volatile
2018 Q3 The mystery buyer of US treasuries from Belgium exposed
2018 Q4 US consumption tanks, therefore global consumption tanks
2019 Q1 The Perfect Storm, corporation bankruptcies, interesest rates soar globally, international banks floored by derivatives, all monetary transactions stop, payrolls don´t come
2019 Q2 SHTF
2019 Q3 every single grocery store on this planet is completely bare
2019 Q4 all electrical grids worldwide are down
2020 Q1 fuel reserves depleted worldwide
2020 – 2030 new virulent strains emerge, one after another
– 2100 Wet bulb temperatures spread from the equator both north and south, rising sea levels combined with really bad and unpredictible weather makes farming or animal husbandry difficult.
In the long run, extinction, no, walipinis in Argentina, Chile and New Zealand are possible. The Northern Hemisphere has too many unknowns, temperatures can soar or fall by +/-6C within one decade, at any time, to be counting on the northern hemisphere to remain habitable by our species. Think of Mediterranean temperatures in Norway followed at some point by a small or large Ice Age. Not exactly nice weather. But Argentina, Chile and New Zealand walipinis look promising, at least as far as we can say today. Certainly some preservation of knowledge, of potash and soda production to make glass, would be nice. http://energyskeptic.com/preservation-of-knowledge/
Thank you for at least having the guts and taking the time to post a prediction. You are the only one to do so thus far.
I have long made known my forecast: slow burn, continued wars, capital controls, etc. until the 2030s or thereabouts, and then increasingly rapid breakdown in the world system with likely complete collapse of the dollar and with it the american empire, followed by racial/civil war in america and breakdown of global trade into regional blocs, with some areas doing better than others, industrial decay and abandonment, etc. I actually think some fuel and electricity will be available to survivors for as far as the eye can see, beyond 2050. It matters not, in my opinion, whether there are 8 billion or 1 billion people on this planet, or any number in between. Less than 1 billion? Ok, now you are getting into small enough numbers than you can question the viability of industrial civilization which depends on a critical mass of humans for specialization and complexity. I don’t think anybody reading this will live long enough to see the transition to this post industrial scarcity world.
Where is Fast Eddy? Does anybody else want to chime in? Anyone? Bueller?
Don’t be a twat. Many have posted timelines and predictions. Do a search.
This will be your last Christmas with turkey and presents… how’s that for a prediction.
This is based on the fact that corporate profits are declining (or some might say deflating…) + commodities have collapsed (deflated) + China appears to no longer be able to carry the global economy.
Unless the Elders have further tricks up their sleeves — we get a deflationary collapse in the coming year.
Well, slightly more people will be without turkey and presents, but so what? I’ll check back with you next Xmas and see how you did.
When the electricity goes out — food becomes a problem for everyone.
Roasted rat for Christmas dinner anyone?
Van Kent;
A ballsy post, and I congratulate you. Unfortunately, I can assure you that every point is wrong. You have fallen into a trap in that no matter how smart you are, you cannot predict the future. No one can.
There are two that I know are too optimistic, because they have already happened.
2016 Q1 ECB goes in to negative interest rates
I can’t find a good reference, but many EU countries have entered NIRP already.
2020 – 2030 new virulent strains emerge, one after another – you missed that one by about 4 years
http://www.kurzweilai.net/e-coli-bacteria-found-in-some-china-farms-and-patients-cannot-be-killed-with-antiobiotic-drug-of-last-resort?utm_source=KurzweilAI+Daily+Newsletter&utm_campaign=9fb70e2922-UA-946742-1&utm_medium=email&utm_term=0_6de721fb33-9fb70e2922-282067778
Pintada, Denmark, Sweden and Switzerland are not the same as the ECB http://www.tradingeconomics.com/euro-area/indicators https://www.ecb.europa.eu/stats/monetary/rates/html/index.en.html
Sorry, haven´t seen that many pandemics, yet.
Well, you are essentially relying on food shortages to kick things off. Not gonna happen. California has been through droughts before and they have more water than you think. China is having no major issues feeding its population either. So, I’ll check back with you on that one. Also, the Perfect Storm scenario basically seems to come out of nowhere. Heck, you could argue that the Perfect Storm could occur next week. Care to make a wager on your prediction of 2019 Q3? Didn’t think so.
Kurt, yes, in this scenario I expected fraudulent economic numbers from the central banks and some truly excessive money printing. Think of Enron, that will be the measure of reliability of our official economic indicators from here on out. What finally collapses the house of cards in this scenario is some sort of real world constraints like food shortages, that finally starts a faster pace of collapse.
Because US consumption is what holds the global economy together, today, the logical break in this balancing act of the cards, would be a real threat to the petrodollar. The only thing that makes US capable of this http://www.usdebtclock.org/ is the petrodollar that keeps the dollars in demand despite its ridiculousness.
If the petrodollar goes, then US is immediately stuck with a printing press working on overdrive, but nobody wanting the toxic currency. Hence, US consumption tanks, global consumption tanks, collapsing the house of cards.
China is a good actor to move against the petrodollar, because they really have f-ckd up their environment http://yaleglobal.yale.edu/content/china-dark-side-growth all farming requires water and if over 70 percent of lakes and rivers in China are polluted, and nearly 40 percent of those rivers are deemed “seriously polluted”, thats going to become an ever increasing problem for the Chinese.
China is also a big fishing nation and world’s oceans and seas have many fishstocks overexploited and depleted http://worldoceanreview.com/en/wor-2/fisheries/state-of-fisheries-worldwide/ trouble on all fronts to China.
About the El Nino
http://www.dailymail.co.uk/sciencetech/article-3325825/Godzilla-El-Nino-getting-BIGGER-Weather-powerful-kind-record-warn-scientists.html
Well, the California drought seems to be a big deal for Californians.
http://ca.gov/drought/
Well, actually Fast Eddy might be right, The Baltic Dry index looks dismal. The real world indicators show that you are absolutely right, the Perfect Storm could occur next week. Thanks for pointing that out Kurt. Cheers!
“Care to make a wager on your prediction of 2019 Q3? Didn’t think so.”
What is this – grade 3?
Nobody cares to wager on this because nobody can know with any specificity when the end will come — the most anyone can do is make an educated guess.
And as has been pointed out in the past — if someone does take your stupid bet — and wins — what are you going to pay them with and how? Fedex won’t exist so betting a case of beans is pointless.
Kurt has a point. Prior to 2008 I was of the opinion that it would go down something like this……..oil would become scarcer so naturally more expensive (this was the common assumption at The Oil Drum) countries that needed to import oil would feel the affects first, the oil exporting countries would need to trade oil for food and so on. Rationing in developed countries would be instituted to maintain order in essential services. A debilitating black market would develop, developed countries would break down along polititical, ethnic and religious lines. There would be no money for big sporting events or aid for the affects of natural disasters, runaway devaluation would ensue with riots and people on the move, shanty towns and finally mass starvation and disease. A world war I thought was inevitable.
That’s roughly how I envisioned events unfolding. Every year I thought, that will be the last US Masters or Olympics or Superbowl. I thought all I had to do was store some food and when the bear began to chase, I only had to outrun the other person.
To this day whenever Christmas comes around or there is big sporting event, I wonder if it will be the last. I’ve been wrong for over seven years now. For how much longer can I continue being wrong. I know collapse is coming but now I realise I can’t assume anything, the timeline, how events will unfold and what tricks the PTB can pull out of the proverbial hat.
And now even the wealthy are hurting…
Swiss Luxury Watch Sales Collapse Description: “2015 has been one to forget for the watchmakers,” said Jon Cox, an analyst at Kepler Cheuvreux in Zurich. As Bloomberg reports,
Swiss watch exports had their biggest decline in six years in October, led by a 39 percent slump in shipments to Hong Kong, the industry’s largest market.
Shipments declined 12 percent to 2 billion Swiss francs ($2 billion), the Swiss customs office said in a statement Thursday.
Exports to the U.S. dropped 12 percent.
http://www.zerohedge.com/news/2015-11-20/even-1-hurting-swiss-watch-exports-plunge-most-financial-crisis
Its luxury yachts have featured in four James Bond films and it has celebrity fans including Sir Roger Moore and Formula 1 boss Eddie Jordan, but Sunseeker is still making a loss.
The Dorset-based boat maker, which was bought two years ago by Chinese property developer Dalian Wanda Group, recorded sales of just £196 million in the year to December 2014, compared with £341 million for the previous 17 months.
However pre-tax losses widened from £26million for the 17-month accounting period to £39.1 million for 2014, meaning the company has not made a profit since the year ending July 31, 2012.
http://www.thisismoney.co.uk/money/markets/article-3277280/Losses-widen-James-Bond-luxury-yacht-firm-Sunseeker-sales-sink.html
The End Of The Recovery, In One Chart
One of the questions on analysts’ minds lately is whether stock prices can keep moving up when corporate sales and profits are falling. But the same can be asked about the overall economy. Why would companies hire more people if they’re selling less stuff? The answer is that they probably won’t. As the chart below — put together by good friend Michael Pollaro — illustrates, business sales and employment have tracked closely since at least the 1990s. When sales have fallen, companies have responded with less hiring and more firing.
But for the past year sales have declined while reported employment has risen. Unless this relationship no longer holds, one of these lines will have to change course very soon. And since sales are beyond anyone’s control, it’s a safe bet that employment will be the one to give.
http://dollarcollapse.com/wp-content/uploads/2015/11/Sales-vs-employment.jpg
The theme of zero point energy / free energy comes up occasionally. Maybe if Nikola Tesla had lived longer, he’d have cracked it. John Hutchison is a Tesla fan (Google “The Hutchison Effect”). I believe Andrew Johnson (a Yorkshireman) mentions him in this oldish video:
https://www.youtube.com/watch?v=i4vG6qOX374
I think the universe is so weird and wonderful that accessing this energy should be possible in theory, but it would do us no good, because we’d continue to dig up the Earth and make things out of it, thereby ruining the environment even more and unto death.
All the same, Johnson does have some interesting things to say. He claims that global warming is occurring on other planets in the solar system, and he therefore thinks it is all due to solar activity. Consequently, he thinks that the burning of fossil fuels is NOT the cause of global warming on Earth. However, this does not make him a straightforward climate denialist. (I prefer “denialist” to “denier”, which always makes me thing of “40 denier”, etc., and pantyhose and such mundane stuff). Johnson thinks that we should reduce our burning of fossils fuels because they do definitely cause pollution and therefore harm wildlife and the environment, and also because they harm human health, causing asthma, cancer and various other diseases and conditions. So, unlike climate denialists, he thinks we should eliminate the burning of fossil fuels, where possible. Interesting to hear the opinions of somebody who falls between two stools. On other issues, e.g. 9/11, also the supposed suppression of free energy, and even weather control, he can come across as something of a conspiracy theorist. Personally I do believe the official story of 9/11 is far for the whole truth, but we dealt exhaustively with 9/11 in comments on a previous post, so I’m not wishing to trigger any more comments on it, only to proclaim my lack of naivety with regard to that subject.
“He claims global warming is occurring on other planets in the solar system” see all the denialists have is lies. The amount of sophisticated messing devices placed on Earth is quite a feat. So “he claims”….. That idiot can claim what the hell he likes, it does not alter the FACT that increasing greenhouse gasses in the atmosphere causes global warming.
Please advise what the options are that we can implement now to stop this dreadful global warming.
Please advise what the options are that we can implement now to stop this dreadful economic collapse.
War it will be my child- our species knows nothing else.
Please advise what the options are that we can implement now to allow us to continue to extract oil to the very last drop.
Strawman
Why do you continue to condemn (as I do) those that think there are solutions…..electric cars, windmills, solar, BAU lite, catabolic collapse, steady state economy and many others. You refer to this as kumbaya syndrome.
I react the exact same way to global warming denialist’s such as you.
Why do I condemn them?
I thought I made this clear when I drove them over the cliff a few weeks ago with what surely has to be described an epic tirade that left their jaws hanging from torn tendons….
To summarize — these clowns have their own playgrounds that the gravitate to — where they banter like monkeys about solar panels and thorium and EVs and other save the world bullshit…..
Try dipping your foot into those pools of ignorance and participating — you will be run off like a heretic at a bible school….
In fact I was kicked off of Peak Prosperity the one time I stopped in to read a thorium hopium article — the site manager did not appreciate my exposing the guest as someone with conflicts of interest (i.e. he had a hopium fund — ahem — a thorium fund — that he was raising money for) — I was not allowed to poke holes in thorium — which is about as easy as popping balloons with a cigarette… nope — that was not allowed — debate was not allowed — delete delete delete…
FW is the anti-christ of the RE world — the vast majority of participants here have already been through the stages of awareness that there is nothing that can save us — that renewable energy is a load of horseshit….
It is the only place one can touch down and find mostly like minds… people who are interested in discussions of the situation we are facing without wasting key strokes on pointless drivel …. the one place where most people who are uncertain — will absorb the facts about issues like RE and say – hey — that makes sense — RE is hopium BS… let’s move on
Of course there are some who will never acknowledge the facts – they will attempt to impose the Peak Prosperity mindset on FWers — like a Jehovah’s Witness door knocker they will keep pounding and pounding and pounding and trying to get you to join the club
Let me tell you a Jehovah story — I had had a big night back in my Hong Kong days — was crashed on the sofa on a sunday afternoon recovering — and bing bang bong goes the apartment door bell at 2 in the afternoon — try to ignore it — bing bang bong it goes over and over and over…..
God damn — this better be important — I open the door and there’s the feeble bugger and a woman … yes what do you want? and how did you get past the main door without buzzing up? — we are here to offer you salvation —- which was met by a blast of expletives and threats to call the police and have them arrested for trespassing — needless to say the lift couldn’t come fast enough from them….
So why do I condemn the RE ‘Jehovah’s’ — there’s your answer. There ain’t no salvation. There is no talking reason to such people. The only thing they understand is a get along with a swift kick in the ass…
As for Global Warming — I am not a denialist. You burn up billions of tonnes of oil, gas and coal and there are going to be some very bad results…
My true position if you must … is that I am apathetic…. AGW is a non issue.
Because there is:
a) nothing we can do about it that will not collapse civilization (are you ok with collapsing civilization? — I am not)
b) because civilization is going to collapse long before the most dire impacts of AGW.
Once again — feel free to lay out the solutions that we should be deploying if you were the king of the world and wanted to stop AGW.
Just fill in the blanks please:
1. _____________________
2. ____________________
3. _______________________
4. ______________________
5. _______________________
> That idiot can claim what the hell he likes, it does not alter the FACT that increasing greenhouse gasses in the atmosphere causes global warming.
What I find interest is that he still advocates the same measures as people (like me) who DO believe greenhouse gases cause global warming. He says fossil fuels are pollutants that destroy the environment and human health, therefore they should be replaced with clean energy. Having people coming from different sides to push for clean energy is surely all for the good. The anti-pollutant argument is a good stick with which to beat the denialists. There’s just an outside chance that Johnson is right, but I’d still prefer to get rid of FF just in case – and also because they ARE pollutants. etc. FE would say, “And replace them with WHAT?” Johnson, of course, believes that “zero point energy” has already been discovered and is being suppressed. This John Hutchison guy is a strnage character – the CIA went to Canada and dismantled and took away his lab equipment, with the collaboration of the Canadian government. He went on to work on some secret projects for the military-industrial complex.
This is all presented for speculation and entertainment only. I keep an open mind but don’t really know what to think. We all know that things go on behind closed doors – we just can’t always be sure of what.
In the real world nothing is “opressed” if it makes a big buck. You send some ten people in, raid the house and kill the engineer. Than you make “the device” yourself. That is far more logical even for an evil coal cabalist that wants to blow the world up with CO2 because maybe god will not come and save him so it is better to get some richess before.
“In the real world nothing is “oppressed” if it makes a big buck. You send some ten people in, raid the house and kill the engineer. Than you make “the device” yourself.”
Suppressed, not oppressed. Think about it. Oil is a vast worldwide industry, with massive assets that support pension funds, the US petrodollar, the military-industrial complex and all the rest. So some little guy comes along with his little gadget, that will sell for maybe $50 or $100, and produce far more energy than it costs. At the very least, you’ll be able to heat your home and light it. And your little device, once bought, will last a few years. Then maybe your little guy finds a way to upscale, and run machines in factories with his upgraded device. You, meanwhile, are “big oil”. This little guy has the power to make a lot of your vast operation worthless. The value of all that oil, sitting in wells and waiting to be produced, will be decimated, or worse. You still have the power – at the moment. Do you act? Do you send in your thugs, the Mafia, the CIA? Maybe you don’t even need to do that. Just find the little guy, buy his device, make him rich enough to keep quiet – then keep the device suppressed. Failing that, get some establishment scientists to rubbish the science. Watch Johnson’s film – some of this is hinted at. Listen to Johnson ask a real small entrepreneur about what happened to his marvellous energy device that he demonstrated a few years ago. The guy hums and hahs, dismisses his own former work and enthusiasm with weasel words. The implication is that somebody has got to him and either paid him off or frightened him. I say “implication” because I don’t know. I’m just keeping an open mind. After all, the Egyptian pyramids were built in 20 years, but nobody knows how. Some engineers estimate it should have taken 600 years. So what did those ancients know that we didn’t?
And the big oil people – they just can’t bring themselves to believe that all this fine work they’re doing (which is incidentally making them rich and providing them with a living) is polluting the world and causing global warming. That’s just human nature for you.
I remember watching a news item on the BBC news, circa 1979 or 1980, in which a man had built a car that ran on water. And he was driving it around Australia. I often wonder what became of that man and his car. That’s not to say that a water-powered car would be harmless. Entropy would still be involved, and with potentially millions of them around the world, there would be some adverse effects for sure.
Yes, there are many things conventional science doesn´t understand or can properly explain. That´s actually the beauty of science. Some years ago if somebody would have mentioned Ice Age civilizations, science would have deemed them totally bonkers. Yet here we are http://www.smithsonianmag.com/history/gobekli-tepe-the-worlds-first-temple-83613665/?no-ist
The only real question marks I have are, where in darnations are IMF and BIS OTC SWAP profits going? I can´t see raw materials and commodities disappearing anywhere, so they are not flowing in to the real economy. And secondly, someone could explain to me with real world physics how the twin towers came down. It would seem that someone has some pretty impressive behind the curtains tech.
@ Van Kent:
Thanks for the link:
http://www.smithsonianmag.com/history/gobekli-tepe-the-worlds-first-temple-83613665/?no-ist
The vimanas, the airships/spaceships described in the ancient Indian texts, are also a mystery. The myths say that they used mercury as fuel and scorched hillsides when they took off. They also had weapons: the myths seem to describe radar and also laser and nuclear weapons. One text describes how when you travel in a vimana up into the blue sky and beyond, you end up in space, which is black but illuminated by twinkling stars. How did the ancients know that space was black when you had a blue sky on Earth?
As for 9/11, look at the videos of Dimitri Khalezov on YouTube, and also the work of Dr Judy Wood. They reach different conclusions, but Andrew Johnson thinks that TPTB are happy for different theories to be propagated, because then the proponents argue with one another – a fortuitous version of “divide and rule” – thereby keeping the pressure off TPTB.
Apparently to others, it’s all the Club of Rome’s fault for concocting this nasty “hoax”. People don’t want to deal with reality because they are invested in the future. As a member of the human race, you are not permitted to throw in the towel and give up hope for a bigger and brighter tomorrow. Humans are natural-born optimists and it’s exactly that optimism which has brought us to our predicament.
Doph is in that camp …. he cannot imagine that there is no future….
Why not just believe in god? He promises eternal life….
I’d rather worship Exxon, oh deliverer of all things cornucopian….
Perhaps in the post collapse world the barbarians will worship the Exxon logo — and they will sacrifice goats and pray to the logo believing that some day the god Exxon will return to the earth … and bring with him the blood of life…. the black tarry stuff known as oil…..
Oh Exxon … you are the bringer of food and warmth and automobiles and trains and planes… and light… and AC and medicine… and plastic and all things good and wonderful … you through your son BAU are the redeemer… Oh Exxon please deliver us from the Apocalypse that we are living .. we pray that you will send BAU down from the heavens once again to deliver us from evil … ahhhhh — men…..
http://sharealogo.com/wp-content/uploads/Exxon.png
I wonder if I can buy some Exxon paraphernalia online and store it in the garage … and if I make it through … my new gig could be head of the cult of Exxon (official title could be The Keeper of the Petrol Pumps) … wouldn’t be so bad to be the master of the entire world …
And don’t anyone get the smart idea of hoarding BP logos — or Total … or any others…. you are the enemy sent by Satan … I will send out my legions to smash your logos and pumps …there is only one true redeemer —- he is the god Exxon — and his son BAU…. and I am their Earth rep.
Another bites the dust
Norwegian oil company Statoil announced on November 17 that it was pulling out of Arctic Alaska. In a press release, the company said that its leases in the Chukchi Sea “are no longer considered competitive within Statoil’s global portfolio.” Statoil will relinquish 16 leases in the Alaskan Arctic in which it was the lead operator, and it will exit a further 50 leases in which it partnered with ConocoPhillips. The company also plans to close its office in Anchorage, ending a seven-plus-year saga in Alaska with little to show for it.
And more
Shell’s campaign did not turn out well. On September 28, 2015, after a summer of drilling in its Burger prospect in the Chukchi Sea, Shell called it quits. The Dutch company said in a statement that it found oil and gas, but the volumes “are not sufficient to warrant further exploration.” Due to its poor results and the high costs of drilling, Shell would “cease further exploration activity in offshore Alaska for the foreseeable future.”
Senator Murkowski is right that the Obama administration put the nail in the coffin for Arctic drilling when it canceled future lease sales in October 2015. But it did so only because, unlike 2008, there was almost no interest from the industry.
The Russians with the Chinese
However, access to technology is not the only, or even the largest, problem standing in the way of Russia’s Arctic ambitions. The collapse of oil prices is arguably much more damaging. With Brent crude trading at less than half of what it was in mid-2014, Arctic drilling is simply unprofitable. The main Russian oil firms—Rosneft, Gazprom Neft, and Novatek—will likely delay 29 oil projects because of low oil prices, several of which are located in the Arctic. Gazprom Neft’s Zapadno-Tambeyskoye, for example, is a field located on the Yamal Peninsula. The project may not come to fruition until at least 2023, more than six years behind schedule. Rosneft will defer drilling the Pobeda field, the 2014 discovery it made with ExxonMobil, by a few years as well
http://energyfuse.org/low-oil-prices-undercut-arctic-oil-dreams/
Producing oil and gas from the Arctic has turned out to be a lot more difficult than many realized
Here’s my response to everybody here who thinks that you matter. That people matter.
Every single person reading this post…and yes that includes you, Fast Eddy, your worth to the global system is 1 out of 7.3 billion. That is your value in the matrix.
This is why I know not to really take it seriously when doomers shout, jobs will be lost! People will die! People will starve! Who will work, who will consume?
The world can lose 50% of all human beings alive on this planet today, and still have 3.6 billion people to work and consume in the global economy. We could lose 85% of people alive today, and still have 1 billion left to work and consume in the global economy.
Think about it, some perspective is needed. Everything that you think is important, just isn’t. Wherever you are right now, take a look around. Everything you see around you can disappear, and humanity would march on. The majority of our cities and infrastructure can be abandoned to decay, and civilization would not miss a beat.
We are all so self-important. At exactly the time that our value to the system as a whole has never been lower!
Interesting, isn’t it? I didn’t say it would be easy, I just said it would be the truth. Clearly you people have not taken the red pill.
This is why it is clear there is no elite in control. If they were they would kill off 6 billion to make the world less polluted, to make the existing FF last longer.
I agree, there’s no one in control. The TPTB, they’re just trying to survive, like the rest of us. It’s just that their actions carry more weight.
As has been explained 1000+ times… reducing the population would solve nothing.
Already oil companies are slashing capex because they cannot make money because demand for oil is dropping…
If you removed 6B consumers from the equation — what do you think would happen to the price of oil?
That would cause an instant deflationary death spiral.
And if you were an Elder… how would you kill off 6B people anyway?
Bioweapon. Quick. “Clean”. Relatively low cost. Infrastructure intact. Short holiday in underground bases when things get too close for comfort. Vaccine for the chosen ones.
In all seriousness, I’m not sure 6B could be “let go” that easily. The only modern day advantage for such a plan is rapid, non-stop global travel. After that, it depends on how competently you can isolate the infected and develop countermeasures.
Other than that, it’s famine. Billions of people crammed into hundreds of cities with no idea how to grow their own food waiting for the next delivery truck to arrive. Again, it’s hard to imagine on a global scale, but given a suitable crisis, numbers would dwindle at a steady pace if that supply dried up.
There may actually be a fair amount of resilience within our species now that mitigates such population reduction events. I guess a nuclear winter type scenario would be the most devastating, but rather messy, don’t you think?
check out the movie 12 monkeys
Yes Ed, there is no one in control.
I am visiting today to post this because I read (twice) it and find it very important. A must read as they say.
https://medium.com/insurge-intelligence/europe-is-harbouring-the-islamic-state-s-backers-d24db3a24a40#.kff0nck77
The slant of the investigative report is toward loss of civil liberties, and the hypocrisy of the governmental leaders of the EU and US. I immediately thought of Fast Eddie, et. al., who seem to be a tad paranoid to me. The article really says it all regarding the people who have power over their little corner of the world but otherwise are certainly NOT in charge. And it supports Gail’s overall thesis.
So what do we know?
Putin wants a pipeline through Syria that he can control.
The US and EU want a pipeline that Putin cannot control.
The Turks hate the Kurds.
Radical religious people can find an excuse in the bible, torah or koran to do anything that they want including, murder, rape, etc..
So, there are no people in charge, because anarchy – by definition – requires that there be no-one in charge.
And the pending carnage in the middle east and the inevitable loss of freedoms at home just go to support the idea that anyone that has a little power is doing everything to find and steal that last drop of half-way affordable oil.
No one is in control?
So QE just happened by itself…
ZIRP just happened by itself…
Banks just started to lend 750k to part time gardeners … nobody told them to do that…
Likewise 30% of the auto market is comprised of people who are not likely to repay their loans… that just magically happened ….
Berlucsoni and Papadnreaou just decided to quit and be replaced by Goldman Sachs dictators — nobody threatened them…
Of course someone is in charge — if nobody was coordinating a centralized response to the end of growth — we would have collapsed over 10 years ago…
The owners of the Fed are in charge — they pull the levers — they make the decisions…
How amusing that people think nobody is in charge — yet the world eagerly awaits the decision on whether to raise interest rates — every single month … because a slight movement upwards or downwards can set off tsunamis around the world….
Who makes that decision? Your elected reps?
Nope.
The owners of the Fed. aka the Elders.
How much more obvious can it be?
Are you conflating the concept of someone actually making all the decisions that cause everything that happens on the planet with the fact that there are people in charge of large (to us) organizations – organizations that on a world stage are by no means “in charge”.
or
Are you saying that the Fed runs the world? Ridiculous paranoia not supported by any facts.
The Fed does not control the economy of China. The Fed does not control the scarcity, or existence of oil in Kazakhstan. The Fed does not control ISIS, or Iran. The Fed does not even control the US economy. The proof of that was apparent in 2008 and is about to become very clear again soon.
How much more obvious can it be?
I am saying the owners of the Fed run the world ….
And Russia and China of late appear to be challenging them.
ISIS is a creation of the Fed’s military arm — the CIA — just as Bin Laden was a creation of the CIA — used to fight the Russians in Afghanistan.
Now the truth emerges: how the US fuelled the rise of Isis in Syria and Iraq
http://www.theguardian.com/commentisfree/2015/jun/03/us-isis-syria-iraq
America Created Al-Qaeda and the ISIS Terror Group
http://www.globalresearch.ca/america-created-al-qaeda-and-the-isis-terror-group/5402881
Secret Pentagon Report Reveals US “Created” ISIS As A “Tool” To Overthrow Syria’s President Assad
http://www.zerohedge.com/news/2015-05-23/secret-pentagon-report-reveals-us-created-isis-tool-overthrow-syrias-president-assad
Of course you will ignore that and go back to the New York Times version — and cower under your mothers skirt because the bogey man is coming for you…
The world is populating by 7.5 billion sheeple/donkeys…. 99.9999% of the people are so easily made to believe what those in control want them to believe…
The truth could be stamped onto your foreheads and you’d still say ‘No! Reality is what I see on the BBC… CNN… The Economist… The Washington Post!!!’
One thing the owners of the Fed do not control is the supply of cheap to extract oil.
Not even David Copperfield can conjure up the ocean of cheap oil we need to keep BAU going…
You will know when the Elders have lost control —- when the electricity goes out — that EXACT moment — will be the moment that all control has been lost….
“I am saying the owners of the Fed run the world ….”
Aaaahh, … so … Good for you, Fast Eddie.
So dolt you continue to create strawmen to burn. Name one person who claimed they individually matter. Nobody has claimed they even collectively matter. We have constantly pointed out that we are in a predicament. It is YOU that is claiming the PTB will create inflation and hyper-inflation. It is you that stupidly says there is no and has never been deflation.
Now you are on some insane rant about cities disappearing and civilization marching on…..like what the hell has that to do with the price of fish………………….
My argument is that we face a stair step, slow burn, slide down in which the managers of the matrix perform one large triage operation to keep the essentials working while shedding noncritical components.
The argument of people here is “the entire global system collapses tomorrow”.
Who do you think is right?
“My argument is that we face a stair step, slow burn, slide down in which the managers of the matrix perform one large triage operation to keep the essentials working while shedding noncritical components.”
That is not your argument — it is your opinion.
An argument is backed by facts — an opinion is a feeling.
It has been explained many times to you why it is not possible to have BAU lite. You either are incapable of understanding the reasoning — or you are stuck in Koombaya Warp and do not want to get it…
Because Mr Cognitive Dissonance has taken over your brain and he will not let you get it — because getting it will result in mental anguish — and a desire for Abilify — because the implications of getting it mean you are a dead man walking.
You will note that Mr CG at one point had taken over my brain — I used to think we could live in a steady state world — I’d have my fishing boat — hydro power — food — kinda like living in Little House on the Prairie in BC …. then I came to my senses — kicked CG in the ass — and returned to reality.
There is hope for you too. We are trying to help you…
But of course if you are unable to deal with reality then best you remain under the protection of Mr Cognitive Dissonance…. for many that is the better alternative.
The reality of the situation we are facing is grim … even ‘putrid’
FYI: nobody outside FW gets my real take on reality — not friends, not relatives, not even my wife. I have no desire to convince them that the Apocalypse is imminent…. what purpose would it serve?
Perhaps this approach would help
https://m.youtube.com/watch?v=lC-DSaxzDzs
“… the managers of the matrix perform …”
So, you think there is someone in charge. Who is that? The Illuminati, the Masons, the Jews? Who is in charge?
“The argument of people here is “the entire global system collapses tomorrow”.”
Please post a quote from someone that said that. How do you know that that person speaks for me? I think that the entire global system will collapse as does our esteemed host. But no-one said tomorrow.
“The majority of our cities and infrastructure can be abandoned to decay, and civilization would not miss a beat.”
Please define your “civilization”. What type of civilization are you envisioning that has no infrastructure and most cities? No sanitation services, no food or fresh water distribution above small township levels? You also state “the majority of cities”, which implies that some remain in tact. How so without the infrastructure? And without that, trade?
Are you thinking of a Jim Kunstler “World Made by Hand”? Hardly a proud civilization worthy of textbook entry. What you and JHK describe is a scavenging society, perhaps lawless, with little to no trade. On the contrary, the previous civilization (ours) will have missed many beats.
Precisely. Many people today can’t manage for five minutes without their smartphone. I’ve seen people in supermarkets completely lose it because their favorite yoghurt was not in stock.
Can you imagine the effect on people’s psyche, on that of a whole nation, that loses everything and has to start from scratch? Most people would not be able to handle it. They would be in a state of shock for so long that they might never recover. They would find it extremely difficult to rewire their mental map from “social media manager” to “scavenger”…
This is what they will turn to as a solution https://www.psychologytoday.com/blog/reading-between-the-headlines/201305/white-middle-age-suicide-in-america-skyrockets
What are you on about now? Your positions are becoming increasingly confused….
Of course I do not matter — the Elders would be more than happy to have me take a bullet (from a ‘terrorist’) if it furthers whatever agenda is on the table at the time. https://en.wikipedia.org/wiki/Operation_Northwoods
They do not care if I have a job or am in the gutter —- but they do care if billions of people do not have jobs because the means their system – known as BAU – collapses…
I still have not heard back on what you call it when oil goes from $147 to $40…. is that not deflation?
There is nothing wrong with admitting one is wrong — most recently I have gone 180 on GMO — I was completely wrong to be criticizing Monsanto…. no shame in that….
I already made my point. Oil $11 to $40 dollars, an increase of more than 3 times. Inflation.
$147 was a bubble. Bubbles bursting is not deflation.
“In economics, deflation is a decrease in the general price level of goods and services.”
http://blogs-images.forbes.com/danielfisher/files/2015/01/eia-oil-price.jpg
https://ulstereconomix.files.wordpress.com/2015/02/picture3.jpg
I am struggling here…. you say that all governments have to do to escape deflation is print a lot of money.
Strange — they have been printing astronomical amounts of money (tens of trillions) over the period covered by those graphs — they continue to print enormous amounts of money…
Yet there continues to be deflation.
Are you going to tell me that 1+1 = 7 next?
Oh and btw — yes inflation is generally the trend over time — nobody is disagreeing with you on that point…
However this time is different …
See the commodity price index — it is falling even though the presses are running hard…
When the end game comes the presses will be roaring red hot as the Elders do ‘whatever it takes’ but unfortunately gravity will win out over money printing …. and the commodity index will completely collapse….
There are limits to what money printing can accomplish — at some point it will not stimulate — at some point it will just blow up the machine…. see Japan — surely by now they would have experienced hyper-inflation … but nope … they get a slight bit of inflation then they crash back into deflation/recession — if Japan was not able to sell products into relatively strong foreign markets — their machine would have blown up long ago…
At some point the layoffs and bankruptcies will accelerate like a snowball down Everest …. and demand for everything will just vapourize.
And that my friend is what is referred to as a deflationary collapse of the economy.
Exactly what Bernanke was referring to in his paper over a decade ago — exactly what he and his predecessor fear and are battling …. a battle they are losing.
Aluminum was so rare and so highly prized that only kings could own it. Now, I find that it just is too much trouble sometimes to recycle an AL can. It has gone down in price tremendously.
Whale oil was the king of lamp oil sales for many years. Do you know anyone that would pay any amount for a gallon of the stuff. It is in fact worthless. One of the reasons that oil was first drilled for in PA was that whale oil was becoming very scarce (expensive).
Inflation/deflation happen over a period of time. You can pick a price for something at a certain time to support your argument. I can pick the price for the same commodity at a different time to defeat your argument. Boring.
Great point….Well said. Some fine new faces here, very knowledgeable such as yourself and psile, Van Kent and others. OFW is coming along in leaps and bounds. Here we for the most part are preaching to the choir.
I wonder if I would have been better off not knowing. Over the past ten years or so I’ve made a lot of changes to my life, even though I know deep down it will all be in vain. I certainly don’t think inflicting my doomer views on the blissfully ignorant is advantageous to them at all. I don’t think knowing myself has been an advantage. Probably the survivors after the initial collapse could very well wish they had not survived.
“I wonder if I would have been better off not knowing.”
There has to be someone around to say “I told you so”. Cheers!
Thank you. I’m not sure your praise is always deserved in my case, but i do enjoy the site.
Regarding your second paragraph … yup, me too.
The Fed, the ECB, the Bank of Japan, the PCB are all fighting off deflation with MOAR and MOAR money. Supporting financial markets artificially with all that it takes. They are doing God’s work to keep life grand for us in the imperium! As soon as the latest and greatest credit bubble implodes though you can be sure there will be even MOAR! But will it be enough? We’ll then see just how many billions are out swimming naked, to paraphrase Warren Buffet.
He already has…
Without the Green Revolution I would not likely have been born… without GMO I would definitely not be here clattering away on my laptop — because without cheap food civilization would have ended by now….
Hail Monsanto — Hail the Elders — Hail Exxon!!!
The givers of life. The givers of comfort. The givers of civilization.
Screw Scott Nearing and Joel Saladin — the hypocritical/misguided proponents of ideas that would lead to collapse — starvation — suffering.
Now Eddy, it does this mean Eliot Coleman is in that camp?
“Nature is the most elegantly designed system,” Coleman said, going on to propose his theory that nature’s “flaws” are actually in man’s understanding of nature, not in nature herself. I began to get a sense of the greater mythology that governs Coleman’s practice. It seemed that if only we work with nature, instead of trying to control her, then we, too, could match the success of Coleman’s approach. “This mountain doesn’t have a top!” he exclaimed, reminding us that there is always more to learn.
Coleman segued to the heart of his story: He told us that he turned part of his 40 acres of rocky, woody land, with an initial soil pH of 4.3, in the harsh conditions of Maine, into a 1½ acre farm that yields $120,000 worth of produce a year. “Of course organic farming can feed the world,” Coleman said. The audience was dumbstruck; it was almost as if Coleman was responding to that feeling in the room when he said, “The word ‘impossible’ scares people off of things that if they tried, they’d realize weren’t so impossible
http://www.theatlantic.com/health/archive/2010/12/a-visit-from-maines-organic-gardening-guru/68586/
Perhaps if we just apply ourselves it could happen…of course, with the current setup that is very unlikely to occur because folks like to push buttons than soil.
In a similar vein Joel Saladin bangs on about how he gets 10X more return out of his land than an industrial farmer… as if the industrial farmer is an idiot …. (good on Joel — not everyone can do that…)
What he fails to explain is that he is selling his untainted meat to very high end shops — places where yuppies pull up in their Teslas after sipping low fat lattes down the street and reading the latest propaganda in the New York Times…. after having a shower in their rain drop solar heat powered bathroom with Italian marble floors….
To pick up Joel’s meat that has been fed on the most succulent pure grasses — where the animals have been massaged and enjoyed aromatherapy in their custom built stalls…. where soothing classical music is played to ensure their meat remains stress-free, tender…and full of culture
“Oh Daphne the beef is so incredible!!! Wherever did you acquire this? It’s from Joel Saladin’s ranch — this cut was raised on nothing but Beethoven…. and it was only $150/kg! — you must provide me with the address of the shop — I’ll have Jeeves run down first thing Monday to place an order — we’ve got Jamie Dimon and his wife coming to our Martha’s Vineyard home next weekend for a BBQ — it would be exquisite if we could honour him with a meal of this quality”
Meanwhile — down at Wally’s World Bo Peep is digging through the Pink Slime discounted Beef section at $1/kg struggling to work out how many kg she can afford on her remaining $5 of food stamps….
The thing is…
Joel is not selling to Wally’s World — because his meat it too expensive for all but the 1%…. or at the very least the 5%…
Organic farming is labour intensive — if you don’t believe that then put your boots on and come out here and spend the next 5 hours with me digging out thistle and twitch…..
People here in NZ will not work for less than NZD25 per hour to do this kind of work…. 5 x 25 = $125….
Organic farming cannot feed the world.
Just as it is not possible to sell oil at the necessary $100+ per barrel (break even point) because people cannot afford oil at that price….
Do you want to feed 7.5B people? Or do you want epic endless global famine?
If the former then you NEED industrial farming — you need to be pumping aquifers dry — you need to be spraying round up and tordon — you need to be mixing tonnes of urea fertilizer into the soil (killing it).
This is the ONLY way. If not for industrial farming Thomas Malthus’ predictions would have come true decades ago…
“Of course organic farming can feed the world,” Coleman said. The audience was dumbstruck.
Utter naive ignorant bullshit.
You cannot feed 7.5 billion people using organic farming methods.
I remember Eliot Coleman saying in a video that flowers was a very good product line because folks wouldn’t think twice of putting down ten or twenty dollars for a buncj , but would haggle and pinch pennies over his veggies!
Just goes to show our messed up values
Isn’t it interesting they attack you for similar generalist message as mine, but for some reason they are pretty silent about most of the bullet points and examples voiced why COG style command economy will likely maintain some legs to prolong specific functions of current civilization (and on regional/block basis), why unemployment or failed companies, no stock/bond market, end of debt based global trade, all doesn’t matter for the mid term of cannibalizating the existing infrustructure and resources within the world of less.
I guess it’s on their part chiefly because of the sheer horror from (un-)realization that humanity won’t be spared by some miraculous single crash collapse event, but the decay will rather present itself in step way fashion as protracted and utmostly cruel tortura on personal basis for at least many decades.
Right, exactly.
Apocalypse makes us feel important. Like we are witnessing some grand event, like we are a part of something important.
We aren’t important, and there is no apocalypse.
Doesn’t mean I’m a peak oil “nihilist”. I’m a peak oil existentialist. We have one life to live and are living at the peak of the oil age. Live the life that you want to live, enjoy whatever you can enjoy before it all goes to pot.
“like we are witnessing some grand event”
I don’t like the term grand — grand makes it sound as if collapse is a wonderful exciting event …. kind of like a big parade… or the coronation of a king… of the second coming of Jesus….
When the electricity goes off — permanently —- when the grocery stores’ shelves are emptied – permanently —– when the petrol pumps offer up nothing but air — permanently…
There are many words to describe that moment — crisis, disaster, quandary etc… (surely grand is not one — unless you are living such a miserable life that you welcome the end of civilization)
I prefer Apocalypse — or Holocaust — because those words describe not only the immediate manifestation of collapse —- they also take into consideration the much more dire implications — the billions starving… the violence…. the disease… the tonnes of radioactive materials spewing into the environment….
For those who prefer a religious connotation — Hell would perhaps be a more appropriate term.
Hell on earth. That is what coming — when the money printing pushes on the string.
“Live the life that you want to live, enjoy whatever you can enjoy before it all goes to pot.”
hear hear- now your talking- and this does not necessarily advocate a gluttonous hedonism eithor. In the revelation that all that we thought is is a illusion one eithor shrinks into nothing or tries to find a new way.
That life might become – for many or most – a perpetual ‘Berlin 1945’, or ‘St Petersburg 1918’, dominated by the obsessive quest for food and shelter, albeit within the context of the remaining elements of a civilized structure, is very unpalatable. I am not surprised that anyone shies away from contemplating that.
How do you maintain a command economy — without energy?
How do you maintain martial law without energy?
BAU is collapsing because we are out of cheap to extract energy.
Do you think that it would be as simple as putting guns to the heads of petro engineers and oil workers at the well heads and refineries and ordering them to continue to produce gasoline?
What about the computers and all the other high tech gear involved? Do you just put a gun to the head of the JIT global supply chain and insist that it continue operating?
Gail – you may as well shut down the blog — we have found the solution!!!!
http://i.livescience.com/images/i/000/024/660/i02/spacewalk-gun.jpg
That’s silly, few hours after our posts and you are again picking and choosing sound bites not the whole picture. So again I do repeat, in this game of global triage, and readjusted global trade along more direct barter like relationships and less advanced debt/credit instruments, he who is able to selforganize and cooperate on such basis will secure advantage being able to carve for himself more of the compostable remains from current BAU, i.e. bits of infrustructure, resources, knowhow, .. On the other end of the spectrum countries and regions with “zero/or very limited” propensity to both vertically integrate on domestic front and enter such foreign deals quickly will just desintegrate into even lower levels of complexity. That’s how history always worked throughout these shifts and will do it now again. That’s our major crossroad just coming into view, what’s going to happen say after that in the next round towards 2040/50 is a different and likely even more darker story.
It could happen like that in the beginning and your last paragraph is by far, not dark enough. In the past, collapses were more or less local. There enevitably was something else to plunder, the world was a big place for half a billion people or so. Forests to burn, oceans to kill, mountains to level, rivers to dam, wars to wage, lakes to pollute, FF’s to exploit and an atmosphere and climate to change.
I just think there will be just too much to triage. With climate change, ocean acidification, break down of the food chain and economic collapse, the world of hurt that is coming will simply overwhelm us in many ways, known and unknown.
This is already happening & does so because BAU hasn’t ended yet. The question remains how is command control and communication going to hold for more than a short time after BAU implodes to allow this situation to continue?
“That’s how history always worked throughout these shifts and will do it now again. That’s our major crossroad just coming into view, what’s going to happen say after that in the next round towards 2040/50 is a different and likely even more darker story.”
You have the darker story part correct. The 2040/50 timeline is a real stretch. We can gauge the rate of BAU collapse now with charts and graphs extending back only a few years to months. Everything I’ve seen points to an acceleration of bad news across the board, even in the used-to-be slower climate change arena. Guy McPherson’s rather extreme views may prove correct.
I’ve not wasted my time listening to US presidential politics, but when I read a synopsis, I discover plans among the top GOP candidates (minus Trump) that include military moves to threaten Russia, and the top Democrat candidate, Clinton urging a Vietnam-type slow escalation of events in the MENA. They are ether truly clueless or are cynically offering up a WWIII solution to our economic woes, thinking perhaps a Great Depression-WWII redux. However, things could quickly get out of hand.
Anyway, the scale and timing of these events appears measured in months to years, not decades.
Im not sure any of these candidates are actually human. Rest assured no candidate will get elected who is not a big fan of war regardless of political orientation. Like the monopoly board all paths lead to go.
LOL!
“….humanity won’t be spared by some miraculous single crash collapse event, but the decay will rather present itself in step way fashion as protracted and utmostly cruel tortura on personal basis for at least many decades.”
WofH, that is also my take on collapse. There is a scene in a Star Trek episode when the captain of another ship that looks like a 6′ alligator says to Kirk, “Stop, I shall be merciful.” Meaning he would kill Kirk quickly. Unfortunately our species is too good at using what is available, so we will endure a long descent of diminishing returns. Even if there is a run on the banks, or even a new currency, new government, we will do whatever it takes to hit the reset button so we can compete against the top .001% for whatever resources are left. We will do that because that is our nature. But rest assured, greed and it’s accompanied cackling laughter by those pulling the strings will not stop all the way down.
You are a big fan of the ArchDruid. So am I. The difference between us is that I think that he can be wrong. I guarantee you in fact that some of his ideas MUST be wrong.
He has never, ever offered any proof whatsoever that his theory of a slow decent is valid.
Why?
Because it is in the future and therefore unknowable.
Sorry. The above was for world/dolph.
Comments by worldofwhatever and dolph read as if they are Mr. Greer – the Arch Druid. Perhaps one of them is he.
Have you ever tried to get a straight answer from the Archdruid on a question about his theories? I did, and my comments were very quickly erased. He controls his site, and the comments section there with an iron fist. That is fine, it is his site after all. But what it leads to is a comments section that is really just a series of fan letters. If you are a fan, you feel right at home of course, but if you are trying to see reality forget it and go elsewhere.
Mr. Greers theories fall apart completely and irrevocably if you point out that there are black swans. There are things that can happen that would collapse the existing systems and render humanity extinct overnight. Astroids, Comets, a methane clathrate eruption, etc. can happen and (especially in the case of the methane hydrate eruption) may be inevitable. Mr. Greer will not acknowledge that fact. The examples that I gave were on the top of my head. The real black swan that takes us out may be waiting in the wings and at this time may be unrecognizable.
Mr. Greer gets his theories from history – which is completely valid. The problem is, he always goes back to Rome. His main theory can be summarized as, “Rome collapsed over a period of several hundred years, therefore, all large civilizations collapse, and that collapse always takes several hundred years.” Poppycock!
“At their height in the late eleventh century, the Chaco Anasazi dominated forty thousand to fifty thousand square miles of the scrubby, semiarid Four Corners region. … It took these Anasazi farmers more than seven centuries to lay the agricultural, organizational, and technological groundwork for the creation of the classic Chacoan period, which lasted about two hundred years—only to collapse spectacularly in a mere forty.”
Stuart, David E. (2014-05-08). Anasazi America: Seventeen Centuries on the Road from Center Place, Second Edition (Kindle Locations 278-279). University of New Mexico Press. Kindle Edition.
The fate of the Anasazi is just one example.
The curve of Chacoan cultural growth and collapse described by Stuart (7 centuries of growth and increasing organizational complexity, followed by a 40-year collapse, probably from prolonged regional drought) resembles the Seneca Cliff, and describes many natural systems in overshoot, such as the St. Mathews Island deer population growth over time.
Yup. Good point.
So, for WorldofWhatever and Dolph, I will forgo my TV time tonight. Lets take a short trip into the Archdruids mind. You can reach your own conclusions as to his alleged infallibility.
He is writing a fictional account in an effort, he says, to make the inevitable future understandable. To provide a vision of the future toward which his faithful can aspire. The story is set in Toledo 50 years hence. (I have a lot of pent up frustration. I didn’t realize how much.)
I will cover my concerns about his steampunk utopia in several paragraphs.
1. Utopia – you bet. There is no war, no disease that he mentions, no bigotry, in fact there are no problems of any kind that have not been solved or that are insolvable. The people are free, healthy, well fed, and happy. The government is well organized, and efficient. Of course, outside the small area that runs itself per the great mans belief system things are not so pretty, but that is their problem.
2. The small nation of The Lakeland Republic imports nothing. It imports no oil. There is no oil in that part of the midwest, never was any. (instead of saying “that part of the midwest” in the future, I will simply say “Ohio” from now on) And yet, they run railroads. It is clear that Mr. Greer wants us to assume that the diesel-electric locomotive that takes his protagonist to Toledo runs on biodiesel. Sorry that is not possible. If they don’t have mineral diesel, they cannot have large quantities of biodiesel since it takes lots of the former to produce a little of the latter.
3. Steel – Again, no iron ore in Ohio, never was. The assumption he expects us to make is that all the rail, the rolling stock, the locomotive, and all the other things that makes up his utopia is steel from scavenged remnants of our economy. I’ll grant that there is plenty steel in Ohio, and that it will be salvageable, IF: you can run an acetylene torch. I have never tried to cut a railroad rail without an acetylene torch. Have you? How would you do it? Hack saw? No, the availability of a hacksaw blade presupposes that there exists sophisticated metallurgical capability, which brings us to … .
4. Coal – No coal in Ohio, never was. How does one melt all the scavenged steel that is used to build the railroads? Without copious amounts of coal burned very efficiently one does not melt steel. Period.
5. Electricity – All the electricity for Toledo is made from methane recovered from manure. NO! Without Masterblaster it cannot work and he is in Bartertown and will not be leaving. (Well, maybe if you agreed to put him in charge, you could lure him away. Maybe.) You true believers will point to all the methane produced during sludge digestion in all the big sewage treatment plants. Its great that they do that, but if you actually read those articles they always have the line, “enough methane to power most of the requirements of the treatment plant”. Not enough to power the treatment plant and 100 homes, MOST of the power for the plant itself.
6. Pavement – all the streets in Toledo are paved. With asphalt? Not without oil. With concrete?
7. Concrete – the buildings in Toledo are mostly new. They are not built from concrete since it takes lots and lots of natural gas or coal to turn limestone into lime. No lime, no concrete.
8. Lumber – the buildings in Toledo are mostly new. Those buildings are not made of wood either. There are no forests in Ohio and even if there were, how is the wood gathered and processed? Even if there were forests and it was possible to make the lumber, the entire area of Ohio would be cleared in just a few years.
No, worldofwhatever and dolph, people that do not subscribe to the wishful thinking of the Arch druid do not think that they are somehow special. They generally are not so afraid of collapse that they are delusional. In reality, we admit that under perfect circumstances there might be pockets where collapse takes many generations. The challenge is to get JMG to admit that he could be unable to see the future.
I wonder what the fundamental difference is between JMG’s steampunk utopia and a techno utopia? Is there a difference?
Is there a real difference between followers of the Archdruid and singularitarians? For those that don’t know what either of those are:
https://www.youtube.com/watch?v=6hKG5l_TDU8
and
http://thearchdruidreport.blogspot.com
1. Neither admit the existence of the laws of thermodynamics. Concrete without coal or natural gas? No problem! Take a diffuse energy source like sunlight and create a concentrated energy source with no tradeoff? No problem! Mary Odum did have a detailed review of emergy which is actually just an extension of thermodynamics invented by her father. Now I guess you would need to buy the book. ( http://prosperouswaydown.com/policies-for-descent/ ) They used to teach thermodynamics in college. Any good chemistry or physics department had extensive thermodynamics courses. Apparently, no more.
2. Neither will admit the existence of AGW. In one case it simply can’t happen because the machines will fix it. In the other, it is something that might happen in the deep future – nothing to see here (sound familiar, Gail). The Arctic is melting, the fires in Indonesia wouldn’t exist without AGW, the drought in Syria wouldn’t exist without AGW, the California drought wouldn’t exist without AGW, the current monster el nino wouldn’t be as severe without AGW, the drought in Brazil wouldn’t exist without AGW (and rampant forest destruction), the shells of krill would not be thinning without AGW, … ( – I could go on- ) . AGW exists, it is having profound effects now, and just insisting that you like to go to the mall will not make it go away.
3. Both groups have formed a cult around a wise father figure. In the case of the singularitarians, Ray Kurzweil.
4. Both have created a mythology to make the members feel superior. In the case of John Michael Greer, people who “don’t get it” are just scared of what is going to happen, or so wedded to their tech that they can’t face the future. The singularitarians point to what has happened and extrapolate that into the future in a vacuum and if you point out that continued growth (you can put in anything other than growth) might cause problems, they say, “The machines will fix it.” and, “Malthus was wrong, therefore you are wrong.”
In both cases, they have replaced reality with a myth.
In fact, it is. The flip-side of the massive commodities boom since the turn of the century is CapEx.
That is, the tremendous increase in demand for iron ore, copper, zinc, nickel, aluminum and hydrocarbons was mainly driven by a massive one-time build-out of industrial infrastructure for mining, manufacturing, transportation and distribution—–along with related public facilities such as roads, bridges, ports, rails and airports—- in China and the EM.
Even where there were substantial increases in final demand for consumer goods—— such as appliances and autos and for the related motor fuels and household electrical power——in both the EM and DM economies, the principle impact was not in the incremental materials and energy consumed by end users; it was in the CapEx build-out of the production capacity needed to supply them.
Stated differently, CapEx is extremely materials and energy intensive.
What drove commodity prices to unprecedented highs earlier this century was a once-in-history CapEx boom fueled by the central bank enabled explosion of global credit.
Likewise, the virulent commodity collapse now underway is a reflection of how far the CapEx cycle overshot the sustainable requirements of the world economy. Iron ore and crude oil heading into the $30s are merely a leading indicator of the deflationary correction now underway.
But the obvious implication that $30 per ton iron ore will batter the global mining equipment industry or that $30 oil will shut down the drilling rigs in the shale patch is not the half of it. The whipsaw effect on CapEx is just getting started and it will cascade through the entire warp and woof of the global economy.
As shown below, the publicly listed companies of the world actually increased CapEx by 5X to upwards of $2.5 trillion annually during the run-up to peak capital spending in 2012-2013. Given the massive over-investment and malinvestment in the world economy, however, the drop ahead could easily amount to well more than $1 trillion annually.
Moreover, the gathering CapEx drought will last for years, even decades. That’s because the in-place value of the world’s massive surplus of factories, containerships and heavy mining and construction equipment is now vastly inflated. Accordingly, the market for used equipment and existing capacity will drop so severely that new CapEx orders will be deferred indefinitely.
http://davidstockmanscontracorner.com/it-is-different-this-time-now-comes-the-global-capex-depression/
It appears that it is now time to pay the piper….
You wrote that? If not, then use quote marks “
I generally include a link to articles that I copy and paste to FW….. I paste about 5875 per day and I cannot see the entire comment in this alert— I do not recall if I did or did not — if I did forget to include the link then feel free to inform the publisher he should sue me for copyright infringement…
BTW – all sentences should be completed with proper punctuation — you forgot the question mark at the end of your second sentence. If you meant that as a rhetorical comment then I believe you could get away with a period. Although I prefer to go against the rules and would generally make use of ……… it’s a subtle way of saying ‘think about it’
Of course I could also end my posts with Think About It…. just as the Kid from Brooklyn does
https://www.youtube.com/watch?v=6DyG60KT-MY
Don’t be an ass. If you have something to say, then say it.
Dear Finite Worlders
Link courtesy of Charles Hugh Smith. The nuts and bolts of how the Fed proposes to raise interest rates while still leaving massive excess reserves in possession of the banks. Not reassuring.
Don Stewart
http://wallstreetexaminer.com/2015/09/new-york-times-fed-interest-rate-tools-explainer/
More propaganda:
http://finance.yahoo.com/news/holiday-shopping-on-path-to-be-the-strongest-in-nearly-a-decade–lpl-financial-210933373.html
“Household net worth is at an all-time high. Right now, holiday shopping looks to be on a path to be the strongest since at least 2006,” said John Canally, investment strategist at LPL Financial.
Canally thinks consumers are “in the best shape they’ve been in about 10 years heading into the holiday season.”
I wonder how he says that without laughing….
It’s a living…
Tough to get a job as a journalist these days — may as well take what you can get — even it means working for the Ministry of Truth….
There’s a hundred drones waiting to fill his shoes if he decided to follow his conscious. Not that he is probably operating with one in this case, I’m sure he thinks he’s right.
Think ruthlessly, people. Jobs don’t matter. They don’t. The government and key industrial sectors just need a certain amount of able bodied people to keep the essential services running.
Heck even entertainment can be recycled, which means we don’t need any more of these vapid actors (good riddance!).
The rest of us can be kept alive on subsidized foodstuffs until we rot away and then some unfortunate nurse can clean up. And all the better if we cause trouble before that, so the paramilitary forces can put a quick end to things with a bullet.
Verily I tell you, jobs don’t matter. Do not look at unemployment as the be all, it’s manipulated anyway. It’s just another number that you have to take into account along with everything else.
So Gail, in response to your question of whether I’m telling people that their jobs don’t matter, that is exactly what I’m saying.
Dolph — you are seriously losing the plot here… remind me not to contact you if I ever need brain surgery….
If there are no jobs or even fewer jobs people will buy less stuff….
If they buy less stuff the companies that make stuff will reduce head counts further.
That means even fewer people buying stuff… so even more job losses…
Also companies generally hold debt — if the volume of stuff they produce drops their revenues drop — eventually they can’t make debt payments so they go out of business…
See even more job losses….
Eventually the financial system collapses because companies and countries and individuals are unable to repay loans….
Because they have no incomes
When I think of how a slow collapse could work, it would only be a slow collapse for certain select people. There would have to be folks that loose their income and jobs as the economy is scaled back. These folks would have to be essentially put into a black hole along with their debt and by extension their creditors as well. But if your the one going into the black hole it is a fast collapse for you.
Analogy time…
BAU has terminal cancer … the cancer is metastasizing… it started in the lymph nodes… in spite of bombarding it with radiation and chemo … it has now invaded the lungs…. it’s in the bowels… kidneys, liver…. the brain
The doctors are blasting it with ever stronger doses of medicines but all that is now doing is weakening BAU — other opportunistic diseases are emerging …
At some point the cancer or one of the associated diseases will kill BAU.
But the processes leading up to BAU’s death — take many years — because of the medicines being applied.
If no medicines were given to BAU — he’d probably have died in 2002 or soon after — most definitely in 2008…
I predict that in your controlled collapse scenario law and order falls apart within months due to shortfalls in the supply chain, a loss of belief in the “system” (any system) by the masses, and confusion, disorder, infighting, and lack of experience on the part of the controllers.
If you think you can side with some temporary governing body to ride the crest of the collapse wave, then good luck with that. All militaries will run out of supplies fairly quickly as they attempt to restore order and there is no way to do so on a national scale. Even when riots break out, police find themselves overwhelmed and choose to let things run their course i.e. stand back and watch the world burn. “They’ll soon grow tired and go home.”
The fast collapse vs. slow collapse conversation somewhat baffles me. It is as if there was some sort of acceptance that OK, OK, civilization will collapse, but some sort of bargaining going on, how long will it will take to get really really bad. Must be decades, right? Nope!
What can we say for certain?
How long will oil wells, refineries and tankers stay in motion once worker payrolls stop coming? Even with military intervention, martial law and other slave-like enforcements, the oil wells, refineries and tankers will stop within days and weeks, because the surrounding JIT global economy works with monetary transactions and because corporations do what they do because they can turn a profit. The oil and petroleum will stop flowing.
Most countries have an emergency reserves of about 90 days of petroleum https://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves sure US has more, but then again US has a lot of carriers, ships and planes that will drain the storage pretty quickly. The military will try to ration petroleum to fire departments, police and ambulances. This global rationing will limit long distance food tranpsorts from day 1.
With the limitation of long distance food transports and the limits to the global emergency reserves, mean that there will not be coming any food to the groceries after the groceries are initially ransacked. Meaning a week or two after a global financial meltdown, most groceries, including Russias and Chinas, will be empty. And if there isn´t any food in the groceries, what is the point in going to work at all? The available food at that point will be taken by the military, or security forces, for rationing.
When food is not coming, millions of people will start pouring out of the big cities, looting as they go. The looting of slaughter houses, farms, warehouses, mills, bakeries and factories will mean that the groceries will stay empty. And that will mean an ever escalating amount of people on the move.
Once people are not receiving payrolls, the groceries are empty and millions are on the move, there will not be a grid, usable roads or any sort of BAU, only SHTF. When there is only SHTF, the last vestiges of sanitation, water, the grid etc. will also fall. Increasing the people on the move even more.
So, what can we say for certain? Well, there will be BAU as long as possible. Then it will get really, really, really bad within hours, days and weeks, everywhere, globally. And what is the point about having a military, if the military is pinned down, unable to move, unable to do any reinforcing. For the 7+ billion who will not make it, in to the Archdruids catabolic collapset, pretty much nothing.
That’s an excellent summary.
And the thing is…. things only get worse from there….
It’s not like when we have famine or a tsunami or a massive earthquake — the aid agencies rush in to help — eventually things get back to normal…
Nobody will helping. In fact just the opposite — if you have food or medicine or petrol — people will be ripping it from your hands…
Long Live BAU!
May the Elders come up with some tricks to get us more years instead of months.
May God give them strength!
Why is it impossible to to keep at least on third of the oil and gas infrastructure working in a martial law situation? I guess USA + Canada would have a chance of sustaining say at least 30% of their oil consumption by domestic production. Europe is worse of since we rely on russia and middle eastern countries. These countries are harder to cooperate with. The north see oil production decreases quickly at the moment and it’s to little oil for europe anyway.
What you describe is very realistic and unfortunately probable but I am trying to be stringent. I can’t rule out that for instance north america have a decent chance of sustaining for some decades. It will be difficult and some luck is needed. The right people have to be at the right places and they have to take the right decisions. I can’t see how any side of the fast versus slow collapse can be so sure. If I have to choose a side I say fast collapse but this choice is based on intuition alone. I had this intuition already before the financial crisis of 2008 but it got stronger from the crisis. I guess looking at society and how it works easily gives you a hunch that something is not good.
One of my favorite books is “Decline of the West” by Oswald Spengler. It’s a combination of genius and dilettantism. Mostly genius according to me. This book probably made my intuition of collapse even stronger. Western civilization is characterized as “Faustic” by Spengler. In the german tradition Faust sells his soul to the devil in order to reach deep knowledge and power. When the contract with the devil is reaching its deadline everything goes to hell so to speak. Fast collapse is very faustic.
Maybe some of the commentators here or Gail have read “Decline of the west”? I recommend it, at least some kind of compilation of the best parts since the book is quite long and demanding.
As has been explained 10,000+ times on FW — this is not possible.
We are collapsing because we are unable to continue to extract resources because we have picked the low hanging fruit — what is left is too costly — the returns are too low.
So if that is why we are collapsing how do we magically overcome this problem in the future?
If it is so easy to overcome then why don’t we just implement whatever idea it is you have that will allow us to defy gravity in the future?
Oh right — you have no idea — no facts — no logic…
Just wishful thinking.
Up until now we’ve utilised the magic of the printing press to stave of the day of reckoning. But that parlour trick always goes stale in the end. Pity we’re at peak everything and there’s zero to zilch chance of another reset, soon to be replaced by peak what the f#ck!, as the wheels come off and the lights go dark.
You have to keep government going to have martial law. It is not clear you can keep the government going.
Is This How the Next Global Financial Meltdown Will Unfold?
The bone-dry half-dead forest awaiting an igniting lightning strike is the global mountain of debt–debt which is no longer supported by current valuations of commodities and risk.
In effect, a currency crisis is simply the abrupt revaluation of the currency to reflect new realities. That revaluation then raises the risk premium on debt denominated in that currency or owed in other currencies.
As emerging market currencies decline, the income streams needed to service all the debt denominated in U.S. dollars declines, a self-reinforcing dynamic: as income and valuations fall, capital flees, pushing the relative value of the currency down even more, which further raises the risk premium that then triggers even more capital flight.
The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won’t be able to stop the meltdown.
More http://charleshughsmith.blogspot.co.nz/2015/11/is-this-how-next-global-financial.html
A lot of new jobs, like before 2008, and not enough qualified people for them in Slovakia:
http://www.etrend.sk/trend-archiv/rok-2015/cislo-46/firmy-zufalo-hladaju-ludi-a-vravia-o-nastupe-talentizmu.html
Who wants to work for low wages? The mismatch between the high qualification, low wages and a lot of people with low qualification without work (or with the state subsidized low-paid jobs) persists, although the unemployment rate stays above 10 %:
http://cdn.tradingeconomics.com/embed/?s=slovakiaur&v=201511200956m&d1=20050101&d2=20151231&h=300&w=600source: tradingeconomics.com
Source: http://www.tradingeconomics.com/slovakia/unemployment-rate
And more and more robots are being added, as they are cheaper than human workforce…
With the increasing ability of robots to process vision and audio and tactile inputs robots will continue to display humans. as
prison guards
school teachers
soldiers
checkout clerks
shelf stocking
truck on/off loading
trucking
dental cleaning
yearly medical screening
auto repair
building/grounds/road cleaning
yard work
farm work
…..
As long as the system continues functioning, the share of the robots must go up with the rising costs of energy. At the same time, the population will go down. There will be a lot of houses, a lot of products, but the lack of the people, as the human body needs a lot of energy for its existence. The deflation reflects this situation: the value of the world goes down with the declining cheap energy and cheap resources. The value of the depleting world can not go up. Various stimuluses and incentives distort the reality that is behind the scenes, namely that the external imported energy keeps alive regions that otherwise would suffer pouplation decline.
We can call it the loss of meaning, the meaning being the cheap energy that drives the growth.
Futile! What is the point of having robots running another virtual world? Seems even worse than the mindless consumption we already have.
Well, the robots and the mindless consumption are the symptoms of the same reality: the loss of the cheap energy and hitting the limits. You can not progress when a big wall is in front of you. You can just stay where you are… or go back, which means the decline of your status… Imagine the countriside before the human beings came where you stay or live, but with one difference: there is less resources, as they are partly or completely depleted.
All this looking back and recreating the past is the sign of the decline, as there is no way back: the population is too dependent on the current healthcare system without which we are not able to live as long as we do.
Even though there have been some advances in all the areas you mention, most of those applications are still extremely difficult to implement for various reasons. One of them being workers unions. They will fight tooth and nail to the bitter end to protect the jobs of truckers, cabbies, school teachers, prison guards, medical technicians and so on.
I would say checkout clerks have been on the list for some time now and yet full automation of that position is still in doubt due to the number of people that don’t want to auto-checkout.
Fast food joints would be the first to attempt full automation including cooking, cleaning, service, but it’s still a long way off.
Auto-repair is extremely unlikely to be automated as it requires a great deal of common sense problem solving and manual dexterity. You would be overcomplicating and slowing down the process. Same goes for plumbers and electricians.
Medical technicians such as radiologists and anesthesiologists are already in the line of fire, but they will attempt to maintain positions where they make final decisions, as will doctors.
Have you ever seen people shelf stocking and reorganising dept stores and supermarkets? It’s incredibly complex with many on the fly variables, especially while customers are in the store. Controlled environments like pharmacies are much easier and that’s why some have been automated.
Call centers have the potential to displace a far greater number of workers and they’ve certainly given it a go, although I’m not sure the results so far could be deemed a success…
There is a problem of employers not wanting to train employees any more. Instead, they want to hire them with the exact qualifications they need, for as short a time as possible, leaving the problem of additional education and job gaps up to the employee (or contract worker).
Big time!
Some say that talentism supersedes capitalism:
http://www.manpowergroup.com/wps/wcm/connect/manpowergroup-en/home/thought-leadership/human-age/Talentism+_new/?WCM_Page.ResetAll=TRUE#.VlFq6XYvfmE
The number of intelectually endowed people or the people with special skills seems to be another limit we are hitting now, that is more more important that capital.
Christopher says in Norway they build new roads and tunnels. Politicians everywhere love to build new roads. In the past with increasing cheap oil this increased the wealth of society. The cost of maintenance of the new road was less than the benefit of the new activities made possible by both the road and expanded cheap oil use. Now with no increase in cheap oil a road represents increased society overhead (the maintenance) but not benefit.
At this point if a politicians wants to increase the wealth of society he/she should close roads that are under used. Thereby lower the overhead cost to society.
Since when were politicians interested in the wealth of society?
Politicians get elected by:
1) accepting huge sums of money from banks and industrial corporations; these interests tell the politicians what to say to the general public to get elected
2) the politicians then grant favors to the businesses, i.e., big projects to work on
As they do this, government and corporate debt increases. It is payed back by the public (work, taxation, inflation).
As far as I can tell, this is the way it works all over the world, without exception.
It is a fairly simple formula… if you want to control a country … pay off the right people… it worked then … it has been greatly refined and works even better now:
“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
dolph9, you are correct. I do switch back and forth between the way things should be and the way things are. My remark was in the first class.
This does answer my question why no nation has a plan to be self sufficient. The only operational goals are to make the rich richer. f the future, f the people.
Ahh yes, that little thing called greed.
In the US, some underused roads in farming areas are no longer being paved.
Gail
Relative to Tim Garrett. I’ll focus on two of Garrett’s papers.
First are some concluding remarks in Garrett’s 2009 paper. I have bolded the part about physical constraints. As I noted previously, Garrett is using power, while Hill is using a sort of ‘power from oil available to the general economy’. Which means that Hill must subtract the power from oil which is used to produce the oil. (Which leads to much confusion in terminology.)
Garrett does not make any claims (so far as I know) about how far in the future the ‘constraints’ will become binding. Hill explicitly finds a Seneca Cliff in our near future.
Both Garrett and Hill use some cumulative measures, to reflect the amount of inherited infrastructure.
So Garrett proposes a much simplified model as compared to the IPCC models. Hill proposes a simpler model yet, with the additional feature that Hill models the cost of producing oil, including both costs which we can think of as ‘oil field costs’ and also the costs of maintaining the civilization which produces the oil…a practice with striking similarities to Garrett, as you will see. As you get down to the concluding excerpts from Garrett’s second paper, you will note that Hill’s approach models many of the factors Garett identifies. What is different with Hill vs. Garrett is that Garrett does not (to my knowledge) propose an explicitly thermodynamic model of the quality of oil reserves. Instead, he relies on the distinction between resources and reserves, which is a fuzzy distinction because turning resources into reserves is a function of price as well as cost. Hill explicitly models both price and cost.
As Einstein said, ‘models should be simple, but not too simple’. If Garrett and Hill’s models are adequate descriptions, they focus our attention on just a few crucial factors. But they are also, in a sense, the ‘best possible outcome’, because humans can always figure out ways to be sub-optimal. For example, we might start WWIII, or we might use financial engineering to keep investment flowing into oil wells which never return any cash flow, or income distribution issues might plunge the world into conflict, and any one of a dozen other catastrophes we can easily imagine. As they stand, the models are both products of a period of relative stability when capitalism was working fairly effectively to direct resources in such a way as to maximize wealth and income. Absent a revolution in how the economy works or Limits to Growth type negative feedback, it seems that the models lay out the best that we might achieve in terms of wealth and income. (And Hill’s conclusions about the Seneca Cliff in oil aren’t what we usually think of as ‘a best possible outcome.) Desktop fusion, however, might very well be the trigger for another wave of innovation, or maybe it is just smoke and mirrors.
Garrett’s second paper referenced below does consider explicitly some events which might trigger collapse…focusing quite a bit on climate change disasters.
My original claim was that the thermodynamic models very clearly lay out the ‘size of the bubble’ issues. Fukuoka, farming with hand implements in Japan in the 1970s, was NOT insulated from the fossil fuel driven world of Tokyo. Consequently, wisdom probably resides in accumulating a sort of ‘pattern language’ of possible behaviors which may prove useful in the future…because there are too many moving parts in the bubble to predict accurately. What we can say is that, barring some fundamental changes, a reduction in the flow of usable energy will result in a smaller bubble. But, as Garrett points out, a global model of the type he is presenting cannot resolve issues such as the balance of payments of the United States, or whether Goldman Sachs remains solvent.
Don Stewart
Garrett, T. J., 2011 Are there basic physical constraints on future anthropogenic emissions of carbon dioxide? Climatic Change, 104, 437-455, doi:10.1007/s10584-009-9717-9
(note that the paper appeared online in 2009; publication was delayed a couple of years)
At civilization’s core there is a single constant factor, λ = 9.7 ± 0.3 mW per inflation-adjusted 1990 dollar, that ties the global economy to simple physical principles. Viewed from this perspective, civilization evolves in a spontaneous feedback loop maintained only by energy consumption and incorporation of environmental matter.
Because the current state of the system, by nature, is tied to its unchangeable past, it looks unlikely that there will be any substantial near-term departure from recently observed acceleration in CO2 emission rates. For predictions over the longer term, however, what is required is thermodynamically based models for how rates of carbonization and energy efficiency evolve. TO THIS END, THESE RATES ARE ALMOST CERTAINLY CONSTRAINED BY THE SIZE AND AVAILABILITY OF ENVIRONMENTAL RESOURCE RESERVOIRS. Previously, such factors have been shown to be primary constraints in the evolution of species (Vermeij 1995, 2004). Extending these principles to civilization, emissions models might be simplified further yet.
——————-
Long-run evolution of the global economy: 1. Physical basis
http://onlinelibrary.wiley.com/doi/10.1002/2013EF000171/full
Wealth includes people, their knowledge, their buildings, and their roads, but only to the extent that they are interconnected through networks to the rest of the accumulated whole.
Thus, economic production is an expression of the amount of physical work w that is done to increase the network density Λ and available energy reserves ΔHR. Real production is valuable only to the extent that it accelerates the energetic flows a that sustain the circulations in civilization. (Figure 4).
(Side note…see the similarity to another thermodynamic modeler- Adrian Bejan.)
From equations (13) and (28), the rate of return and economic production are positive when energy consumption exceeds dissipation, or when the incorporation of new raw materials exceeds physical decay. In contrast to traditional economic treatments, consumption is not part of economic production. Rather, economic production equates to the net material growth of civilization, insofar as it grows an interface with available energy supplies (Figure 4). Real production is a consequence of a convergence of materials flows that arises from an imbalance between consumption and dissipation. It is the historical accumulation of this imbalance that leads to the current wealth and capacity to consume.
It might seem that the same conditions that allow for the human system to respond especially quickly to favorable conditions are the same ones that allow the system to rapidly decay when conditions turn for the worse.
For example, for values of G > 1, civilization is in a mode of innovation because technological innovation is sufficiently rapid to overcome diminishing returns.
coupled with
What is interesting in the simulations above is that the most dramatic rates of collapse are associated with trajectories that were initially associated with innovation and super-exponential growth. It might seem that the same conditions that allow for the human system to respond especially quickly to favorable conditions are the same ones that allow the system to rapidly decay when conditions turn for the worse.
As illustrated in Figure 5, an innovative economy that enjoys relatively rapid technological change with a growth number G > 1 might alternatively be viewed as a “bubble economy” that lacks long-term resilience. Whether collapse comes sooner or later depends on the quantity of energy reserves available to support continued growth and the accumulated magnitude of externally imposed decay. By contrast, an economy that is less innovative, with lower rates of return η, has a lower risk of rapid rates of decline.
The real rate of return on wealth η is somewhat analogous to the total factor productivity in traditional models. Prognostic expressions for η presented here show that its value is determined by a combination of rates of civilization decay, the quantity of available energy reserves, the amount of energy required to incorporate raw materials into civilization’s structure, and the accumulated size of civilization due to past raw material flux convergence. Current values of the rate of return can be inferred from equation (71). For example, current global rates of return are about 2.2% per year [Garrett, 2012a]. Trends in η can be forecast based on estimates of future decay and rates of raw material and energy reserve discovery (equation (56)).
I have had discussions with Tim Garrett that lead me to believe he is talking about distant scenarios.
Gail
As I noted, while Garrett has a beautiful model of how energy sustains the industrial economy bubble, he doesn’t have a thermodynamic model of energy availability. To get a reasonable grip on the timing issue, you have to add something else to what he has done.
I’m not criticizing him. His primary focus is climate science, not the future of energy. One person can’t do everything.
Don Stewart
Excellent new post on Tim Morgan’s blog:
https://surplusenergyeconomics.wordpress.com/2015/11/20/63-why-the-world-economy-has-stagnated/
In short term it is in sync with my informed prediction for todays 5-15yrs BAU-cankicking window, that’s up to his 2025 shoe drop graph, followed by mixed system of applied patches and experimentation of BAU-compost, then followed by un-BAU aka almost fully deployed feudal system by 2040-2055.
Some of Tim Morgan’s post I agree with; quite a bit of it I don’t. He only understands part of the story.
“As the first chart shows, the world’s real economy – that is, the economy of goods and services, rather than their “financial economy” proxy – can be expected, first, to stagnate, and then to enter gradual decline.”
I’ve lost interest at that point…
If he would have said ‘stagnate, and the collapse” I would have read the rest….
But there is no way the global economy can gradually decline….
Decline = job losses = further reduction in consumption = further job losses = further reduction in consumption = inability to make debt payments = bankruptcies at all levels = financial system collapse = end of BAU = starvation and suffering and death
Surely Tim is aware of this —- looks like as we approach the end game he’s going a little Koombaya on us…
If ya can’t take the heat…. time to get out of the kitchen Tim.
The fact is, FE, nobody knows what the future will bring. They can only take a stance on it. The Archdruid thinks we are in for a long decline rather than rapid collapse. Gail, however, uses her Leonardo sticks to point out the risks of rapid collapse, because of the Law of the Minimum: “For the the want of a nail, the shoe was lost; for the want of a shoe, the horse was lost; for the want of a horse, the battle was lost” – leading on to the loss of the kingdom. Part of me thinks that surely, at some point, TPTB will react and transition to a lower energy system before we are pushed. Then another part of me thinks, no, it’s too far gone, it’s baked into the cake, and maybe we can manage 0.5% mitigation at most – and then the vision of those Leonardo sticks looms again.
I think Tim Morgan also hedges his bets. Read some of his answers to the commenters:
“we are talking about changes on a scale which, in the past, have never – ever – been accomplished without revolutions.”
“Have you read studies which attribute the decline and fall of the (western) Roman Empire to falling EROEI? The population declined by 95% when this happened.”
“…energy is not just the basis of all goods and services, but is above all the basis of essentials – and we all need shelter, food, warmth, mobility and so on. So what has to be happen is that “discretionary” (wanted-but-not-needed) consumption gets pushed out. I don’t doubt that we’ll try dodging this with debt, monetary manipulation and yet more “intermediation”, but that’s a zero-sum game.
“So, the question might be, “can we afford not to afford it?” We’re going to have to downsize materially – and that might not be all bad – but it’s going to raise drastic questions about equality, I suspect, as the poor find essentials increasingly unaffordable whilst the rich try to hang on to everything they have. 1789, anyone?”
Not very koombaya, those particular statements.
I didn’t get to the comments…
“We’re going to have to downsize materially – and that might not be all bad – but it’s going to raise drastic questions about equality, I suspect, as the poor find essentials increasingly unaffordable whilst the rich try to hang on to everything they have. 1789, anyone?”
What about the part where 7.5 B people are starving and without electricity….. that’s where we are going …
As for collapse being fast — I am as certain of this as I am that if I threw a ball into the air… it would eventually fall to the ground….
Even an economist — if you ask one — what would happen if growth stopped and we were not able to restart it….
Would respond with — civilization would collapse.
The fast collapse crew have explained a thousand times why there is no other option — when the dam breaks the water crashes through…
I have not yet read a single argument that explains how the collapse will just go on and on and on for decades…
I would note that Rome went from a slow burn to an explosion — the barbarians eventually crashed through the gates… of course the Roman Empire did not rely on oil — or a JIT global supply — or a global banking system — so the burn went on much longer than this burn will….
The score is currently 100 (fast collapse) – 0 (endless slow collapse)
Feel free to post some facts for consideration. Wishful thinking doesn’t count
> Feel free to post some facts for consideration. Wishful thinking doesn’t count
I can’t post facts about the future, and neither can you, because we haven’t got there yet. We all have to deal in supposition, based on what we believe will be the likeliest outcomes. None of our suppositions is verifiable – as yet.
I am not asking for facts about what happens post collapse
I am asking for facts that explain how we keep BAU going when corporate profits are falling — which will lead to layoffs — which will lead to bankruptcies — which will lead to the financial system collapsing because individuals, companies and countries default on their debts.
I am asking for facts that explain how — when this happens — we will magically be able to maintain BAU lite — how will it be possible to continue to extract and refine resources without a functioning global economy — how will we produce and deliver gasoline, electricity, food.
Slow collapse people believe we can just continue on a downwards slope basically forever … that at some point there will not be a tipping point — where the whole thing just comes crashing down.
This is like trying to argue that 1+1 is 7. It makes 0 sense.
We grow or we die.
An 8 yr old could be made to understand the implications of the end of growth.
I don’t think he actually is “aware”. Very few people are, humans are built for eternal optimism.
He appears to be aware based on this paper….
THE PERFECT STORM (see p. 58 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
Which just goes to show that where confronted with the reality: that “the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel” but he is unable to take this to its natural conclusion, without sugar coating what this means to hearth, kith and kin. See, another natural-born optimist.
I suspect — like a lot of commentators in this space — he is offering up some hopium ….
Because if you end the story with a nightmare — a lot of people tune you out….
See Heinberg … he’s added something to the End of Growth title… it’s now: The End of Growth: Adapting to Our New Economic Reality http://richardheinberg.com/bookshelf/the-end-of-growth-book (no doubt that change helps book sales)
That’s why FW is so great — Gail seems to not give a damn if people don’t like her conclusions.
It does have the effect of separating the wheat from the chaff….
Subprime Auto Lending Soars As Fed Report Shows Spike In Loans To Underqualified Borrowers
In what amounts to evidence that the subprime auto problem is indeed growing, The New York Fed’s Quarterly Report on Household Debt and Credit (out today) shows that lenders extended more than $110 billion in auto loans to borrowers with credit scores below 660 over the past six months alone.
http://www.zerohedge.com/news/2015-11-19/subprime-auto-lending-soars-fed-report-shows-spike-loans-underqualified-borrowers
Some interesting graphs here http://www.zerohedge.com/news/2015-11-19/great-fall-china-started-least-4-years-ago
The legend of our epic fall will be etched in the memory of future generations for a very long time to come, a very long time. Like the Great Flood story, only worse, much worse, that’s if we have any descendants in the future.
I can imagine a future where tribes gather around the camp fire and tell tales of the god kings who lived on the earth for a couple of hundred years and then disappeared leaving behind crumbling ruins…
http://www.historicmysteries.com/wp-content/uploads/2011/10/neanderthals-campfire.jpg
Have you read “Wool” and the rest of the Silo Saga by Hugh Howey? What you describe is very much the soul of these books – survival in a post-apocalyptic society that reminisces about what once was – but only a few members know what actually happened.
Thanks! We have to keep debt growing. China too, but it is difficult to do, when there is already great overcapacity.
The holiday season is always the best time of the year for retailers, but in 2015 there is a lot of talk of gloom and doom. Most large retailers will not start announcing mass store closings until January or February, but without a doubt many analysts are anticipating that once we get past the Christmas shopping season we will see stores shut down at a pace that we haven’t seen since at least 2009. Here is more from the article that I just quoted above…
Retail sales this holiday season are setting up to be a disaster. Already most retailers are advertising “pre-Black Friday” sales events.
Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving? Now retailers are going to cannibalize each other with massive discounting before Thanksgiving. Anybody notice over the weekend that BMW is now offering $6500 price rebates? The collapsing economy is affecting everyone, across all income demographics.
Last week we saw the stocks of Macy’s, Nordstrom and Advance Auto Parts do cliff-dives after they announced their earnings. I mentioned to a colleague that the Nordstrom’s report should be the most troubling for analysts. Nordstrom in their investor conference call said that they began seeing an “unexplainable slowdown in sales in August in transactions across all formats, across all catagories and across all geographies that has yet to recover.”
http://theeconomiccollapseblog.com/wp-content/uploads/2015/11/Retail-Sales-Ex-Autos-460×240.jpg
http://www.zerohedge.com/news/2015-11-19/if-economy-fine-why-are-so-many-hedge-funds-energy-companies-and-large-retailers-imp
Keep in mind… nearly 30% of all US auto sales are subprime….
Nordstrom sells to rich people. If the rich are not buying that is alarming.
Goldman Sachs slashes bonus pool
The market turmoil is taking its toll on how much the bank’s workers are taking home too. Goldman (GS) slashed the amount of its compensation expenses — its so-called bonus pool — by 16% from a year ago.
http://money.cnn.com/2015/10/15/investing/goldman-sachs-bonus-compensation-earnings/
Could it be that more folks are catching on that the jig is up? Perhaps people are tiring of endless growth. But, they don’t realize the implications of the end of growth just yet.
I don’t think people will ever get tired of having more stuff…. it gives their lives meaning…. that along with endless NFL football matches, Dancing with Stars…and Abilify…
What I believe is happening is that the marketing machine continues to pound the masses — and they desperately want to go shopping … but they are broke…. they have no extra munny…
Take McDonalds for example — the company is cratering — some suggest people have decided to opt for healthier options — really? — suddenly after decades people don’t want to eat at McDonalds?
What’s a meal for a family of 4 cost at McDonalds? I have not eaten anything in that restaurant since I was a kid so have no idea but I suspect around $40?
That’s a lot of dosh for someone without a job or working 4 part time jobs at 8 bucks and hours….
In places like Vietnam McDonald’s is a big treat for the family — it is a luxury — likewise KFC and other fast food…. because people don’t have much munny …. like the people in America…
What I think is happening is that people are opting to use their very limited budgets to buy Pink Slime Pizzas for 3 bucks in the grocery store.
Note the high level of subprime car sales which is driving the market — it would appear that people would prefer to focus their meager incomes on making payments on a new car …
And this is siphoning away cash that could have been spent in Walmart…
No free lunch — you prop up one sector of the economy — another one suffers….
I agree somewhat with Greg in that there’s only so much a regular household can consume per month. And it’s the purchases of “regular households” that prop up the economy, not those of the very wealthy i.e. a garage full of supercars vs millions of flat screen tvs.
But the reason for that is, of course, that funds are short. If they weren’t, you’d see millions more mcmansions being built and sold. Ditto for car upgrades and more expensive vacations, possibly a boat, but also massively larger consumption of resources and energy.
Some people may be satisfied with their lot, but I’d love to know how many would turn down the upgrades mentioned above if money were no problem? What you said about people shifting their disposable income to luxury items at the expense of everyday commodities is absolutely true. I see it happening around me. People on regular salaries spend an increasing portion of what they earn on outward appearance e.g. a BMW or a Mercedes as opposed to a Ford Mondeo.
In some cases, this amounts to a doubling in expenditure for the sake of “bling”. These increased monthly costs eat away at essentials and eventually, those extras may have to be repossessed as things sour.
But within a regular household with a fixed budget, once you’ve reached peak furnishings etc. I can’t see where you would need to consume further. There is no growth in consumption within established households. Just a consistent stream of food and entertainment.
In Spain, something like 50% of disposable income among younger people goes on tapas! They’re not saving a penny, but at least they’re having fun and getting fed.
Grow or die. That is an immutable law
If we use electricity usage as an honest gauge of growth than there has been negative growth in the US from 2010 to 2014. If it works for China does it work for the US?
http://www.statista.com/statistics/201794/us-electricity-consumption-since-1975/
@Paul says “Gail’s position is that a catastrophic outcome is inevitable. Are you saying all her hard work and deep thoughts are worthless?”
Prostrate genuflection while appealing to authority it quite unbecoming. Everyone in this space is bringing facts, knowledge and experience to support their argument – no need to enlist another to do your heavy lifting. I assume everyone is in agreement with the facts, but what do we know of Gail’s life experiences and/or knowledge of political history?
If I may be so presumptuousness, Gail appears to be a “good person” ie good wife, good mother, good person – the complete package. She’s from the south (the most conservative part of the USA), has admitted she may believe in a higher order, and is a professional analyst (actuary). What does this tell us? That she may have a proclivity towards a belief in institutions and general libertarian market principles.
But what if she had family members careerists – or direct personal experience – in military and/or intelligence affairs, who had explained matters, or had pursued independent research in conjunction or independently of these influences? Would she still have faith in the straight mechanics, or would she have a greater appreciation for the “black history” ie the real backstory, that has driven men’s affairs for millenia?
This is an open forum where people are attempting to influence others. I would be extremely surprised if Gail is not considering many of the different points being made that while BAU is **simply the system in place today*, it has no real bearing on future arrangements as mankind deals with continued civilization.
Yes everybody has a certain angle from which they look at things. Gail’s does appear to be rigorously honest and mathematical. Which is good for initial understanding, for setting the stage and coming to a diagnosis. It has limitations when trying to look forward and predict what is going to happen.
My own view is largely historical and darwinian. And I’m wary of America which I view as a naive, optimistic, yet cynical and contradictory empire that is simultaneously the most sheltered from external collapse dynamics but also subject to internal collapse dynamics that might be extremely violent.
I genuflect to no one.
The person commenting stated that the catastrophic collapse crowd does not back up assertions with facts…
Well … there are dozens of extremely well-thought out and researched articles on this site that support the catastrophic collapse outcome.
I and others have also posted a great deal of facts in support of a catastrophic outcome. However none of these comments come anywhere near to providing the comprehensive insights that the articles do.
Meanwhile we endure comments like yours and the commentator’s that smell of wishful thinking — not even the slightest bit of logic to back them up ….
You just disagree — but never posting anything remotely convincing
It’s so lame that there is not even anything to bother arguing with.
For instance, it has been stated that there can be oil and petrol post collapse — followed by the inevitable images of the complex refinery, computers, heavy machinery, nearly infinite number of parts — with the question ‘how do we keep all of this going post collapse’
That changes nothing — the wishful thinking overrides the logic of the question — and off we go round around with more gibberish about BAU lite…. ‘being positioned to benefit from the collapse’ — and so on.
People need to give their heads a shake — this is not the Great Depression – not WW2 — not the Spanish Flu epidemic….
This is well and truly the end of civilization. And quit likely an extinction event.
Oh and btw — I am still waiting for someone to explain to me how we keep the 4000 spent fuel ponds from destroying the planet post collapse…. it’s another one of those things that wishful thinking will deal with … just ignore it and it will go away…
Well it’s going to be interesting to be sure, but the fact is, we simply don’t need the amount of industrial production in the world today. It’s superfluous, wasteful. We have a long way to go down this slide.
But, where I will agree is that we are at peak. We passed peak civilization sometime in the late 90s, early 2000s, no doubt about that. Things will never, ever get better, just worse.
Exactly, those “spoiled” US-view-centrists simply don’t grasp that going from the availability 20x brands of yoghurt to only 1-2x brands (and not regular availability) or from fast food chains and posh restaurants to 25kgs packs of rough potatos and cooking at home is the end of times. No it’s not, and yes in countries with not decent capacity long distant passanger rail or bus system, vertically integrated grid, public water etc., the innitial shock of going downhill for ever will be epic..
Remember when you are talking about industrial production, you are also talking about jobs. While you make think the production is “superfluous, wasteful,” the people who depend on those jobs definitely do not think their jobs are “superfluous, wasteful.” How do you plan to replace all of the jobs?
The real unemployment, incl. discouraged – long term unemployment is above 20% in the US and double, perhaps triple it in some European countries and specific regions. It has been so far all papered by social subsidies be it food vauchers, housing subsidies for minorities/poor, cash equivalents etc. And there is also the factor of blackmarket and patching life existence from doing 3-5x ad hoc part time/seasonal jobs like in the ClubMed. So the trend is clearly here already, it will only get deeper and wider. And also again we don’t plan/need to replace all jobs, the demographics winter in coming decades will destroy one part of it anyway, another part will be affected by the previously mentioned increased trend of living without work. Some countries might even experiment with mandatory work assignments be it social services (care for elderly) and or environmental activities, building soil, etc.
I see a lot of shanty towns in this future…
We need the industrial production we have and more…. we need more ghost towns… more bridges to nowhere …. more ‘stuff’
Because as we are seeing now — the entire commodity complex is on the verge of bankruptcy — because demand for what they produce is not growing….
Grow or die.
We have a case study of that occurring right before our eyes….
If we don’t start consuming more ‘stuff’ in big volumes soon…. there will be no ‘stuff’ to consume at all….
It is a very sad state of affairs is it not?
Have you ever considered Favela Chic?
Out of the mind of Bruce Sterling…
“…one possible scenario for the future is the “favela chic” scenario, in which material wealth is non-existent, but individuals are plugged into the grid and satiated with Facebook and Twitter.”
Add a bit of Soylent Green and we’re good to go!
Galápagos is the eleventh novel written by American author Kurt Vonnegut. The novel questions the merit of the human brain from an evolutionary perspective. The title is both a reference to the islands on which part of the story plays out, and a tribute to Charles Darwin on whose theory Vonnegut relies to reach his own conclusions. It was first published in 1985 by Delacorte Press.
https://en.wikipedia.org/wiki/Gal%C3%A1pagos_%28novel%29
I am not “from” the South. I am a Midwesterner at heart–grew up in Wisconsin, went to college in Minnesota. My ancestors are Norwegian, in a part of the US that has a lot of Scandinavians. I grew up in “Garrison Keillor land.”
No connection with military–more with teaching and medicine.
I grew up in “Garrison Keillor land.”
Then you must have been an above average student, like all the girls and boys of Lake Wobegone.
Right. My parents gave me an analog watch when I was 4 years old. My mother said that it didn’t seem unusual to her that a four-year old could tell time. I could count by “5’s,” so it was not hard.
Gail, I’ve been thinking a little bit about James’ comment regarding redundancy with respect to finite world issues. For a person of your unsurpassed analytical talents, perhaps opportunities exist to further explore societies that have already experienced these kinds of effects.
The most obvious candidates would be those that have suffered catastrophic war time losses, such as the Confederacy, Germany, Japan, etc. On the other hand, they may have mitigating circumstances since not only were they occupied, but external sources restored capital investment.
Of course, you also need a robust set of data points covering all kinds of economic data, such as oil production, electrical generation, food, birth/death, crime, regional conflicts, and ‘soft’ social pathologies like drug/alcohol addictions. Given these restraints and requirements, I can think of no better candidate than post Soviet Russia from 1990-2000.
The point is not to track their ultimate recovery, but to analyze how a national culture was able to avoid devolving into Rawanda during that time-frame. Because that is what we’re talking about here: can society successively re-adjust ever downward as standards of living decrease, or do we reach a tipping point that flips to Mad Max?
One of mankind’s core characteristics is the drive to self-organize. Take a child camping and soon enough they bored, then building forts, creating small stream diversions, etc. A key factor of the mentally ill is their ability to *do absolutely nothing all day long*.
Those of us in the slow-grind camp are relying on our real-world experiences & knowledge of past history. I think it would be a unique opportunity for someone {hint} to explore this area and attempt to quantify some aspects. After all, you made your bones with peak oil, do you really need another post? OTOH, you could spend years modeling & projecting what happens as societies decline – but continually re-adjust – as finite limits are reached.
An article dedicated to the issue of slow grind culminating in fast collapse vs slow grind only would definitely be interesting…
It would be beneficial to see various opposing scenarios in side by side comparisons with probabilities atriibuted to each one to be fair.
I would say that the ability to self-organise is an innate property of natural systems and therefore of no special importance in humans. Beavers make dams, insects self-organise in swarms, DNA is a beautifully organised structure.
Do these natural systems experience boredom leading to more organised behaviour? They may not call it boredom, but there is certainly a dynamic at play that leads to all the activity we see.
Dear Finite Worlders
WARNING: Speculation ahead
One more thought about Richard Heinberg’s post today. He ends with a recommendation for certain ways of approaching the future. All of those ways might be characterized as ‘small is beautiful’. Let’s examine the interplay between size and energy availability.
In Systems Theory, a single cell is frequently held up as an example of an ‘autonomous’ actor. Capra and Luisi, page 65: ‘The double role of living systems as parts and wholes requires the interplay of two opposite tendencies: an integrative tendency to function as part of a larger whole, and a self-assertive, or self-organizing tendency to preserve individual autonomy.’
So the trillions of cells in our bodies have all the control mechanisms they need to function as a single entity, but they also function as part of our body, our ecosystem (including bacteria), a family, a society, etc.
Things at the cellular level are really, really tiny. Why are they so small? Wouldn’t larger be better?
A key observation is that a small sphere has more surface area relative to volume than a larger sphere. Thus, if the sphere is dependent on taking in nutrients and energy from diffuse sources, the way to maximize effectiveness is likely to be a quite small sphere. The infrastructure within the cell can be quite sophisticated, but it is confined to a very small area.
If a cell were to be the size of a baseball, then quite a lot would change. For one thing, it would be exposing relatively little surface area to the nutrients and energy which it needs. Consequently, it would require that the energy and nutrients be delivered in dense packages. Secondarily, it would need more sturdy structural components (such as bones or steel girders), which is essentially an increase in overhead.
If we apply these principles to human organizations in a world where both energy and resources are likely to become less dense, then we can speculate that the fundamental human organizations (comparable to cells) must grow smaller. The current model of global capitalism simply won’t work if energy and resources have to be scavenged.
My surmise is that the same principles which hold true for cells hold true for human organizations. Which leads, I think, to Heinberg pointing to a fairly obscure clan of 20 or so people in northeastern Missouri as indicative of our future.
Don Stewart
Addendum
Consider the farmers in colonial Massachusetts. They were predominately subsistence farmers…pretty much autonomous agents much like cells. But they were also capable of rallying to Paul Revere’s call and coalescing to fight the British troops at Lexington and Concord.
During the Revolutionary period, an advantage of the colonials was that they could disperse back to their farms and feed themselves. The British could only steal from the colonials unless they could get supplies from Canada or England. John Burgoyne’s army in New England had its supply line cut very early in the war. At least as played by Laurence Olivier, Burgoyne understood when the messenger arrived from New York City that General Howe had elected not to push north to meet him, and thus open a supply line up the Hudson river, that his army would have to be surrendered…it was just a question of time.
Likewise, when Cornwallis was at Yorktown, it was the arrival of the French fleet which cut the supply line to England that doomed his army.
In both cases, whatever advantage a large, organized army might have given, it fell to a lightly organized group of autonomous agents in the absence of dense supplies of food, ammunition, and other supplies.
Don Stewart
Heinberg writes “Estimating how much a total energy transition would cost is difficult. The problem can be simplified greatly by including only the direct cost of solar panels and wind turbines, but doing so is unrealistic. Better estimates would include the costs of energy storage, grid redesign, and redundant capacity; plus required investments in new technology for the transportation, agriculture, and manufacturing sectors; in new equipment for building operations; and in energy efficiency retrofits to nearly every existing structure.”
Good for him an honest statement on the scope of the needs transition. He writes “many tens of trillions of dollars” as the cost. I roughly calculate the cost for just New York State at 2 trillion dollars and the US at 20 trillion dollars. For the world many tens of trillions.
Who do I make the cheque out to?
Don, I was wondering about Richards comment: “But the folks pursuing these roads-less-traveled deserve our attention and help, because they’re about the only people in the industrialized world who are preparing for the kind of future that’s actually within our means.” -How exactly do we do that? Help them.
We know that in less then 72 months there will be billions in private capital that will try to escape stock markets and bond markets, well, all financial markets, to any safe haven possible. Investing in gold and silver seems futile, with whom do we trade gold bullions exactly? Or buy land? Well Whoopie, without practical skills or infrastructure development well beforehand, much good owning some land does anybody?
My point is that I know Nicole Foss in Canada, Fast Eddy in NZ, Christopher in Sweden, Javier etc. could need infastructure buildup, like a shortwave radio setup, windpower, wells and watertanks, irrigation canals, ethanol generators and ethanol breweries, biogas reactors, greenhouses, chicken and rabbit coops, rain water harvesting, biochar production, potash and soda production, barns, haylofts and root cellars, mills and bakeries. So, on the other hand we know that in a very short period of time, billions of private capital will try to seek refuge. And on the other hand, some crafty, resilient, smart people could use more capital.
Something like; Fast Eddy gets 40.000 NZD for infrastructure buildup, and for that money one peoples share of food, produced by that infrastructure, is permanently owned by someone else then Fast Eddy.
Dunno, just trying wrap my head around what exactly we can do to help, like Richard said.
Richard
see my post on ‘small is beautiful’ from the standpoint of adapting to diffuse sources of energy and resources. Many of the adaptations you mention are trying to use some sort of technology to keep the energy and resources dense. My GUESS is that a better model is laid out by Dmitry Orlov in his current post. He talks about what you need to know and do and have to survive in a cold climate if you are a refugee from an unlivable place in the temperate zone near the ocean.
Dmitry is taking the ‘small is beautiful’ notion down to the nuclear family. I would imagine that he would visualize an evolution from the nuclear family up to the village level as things stabilize.
I’ll also note that, in organizations of village size, the ‘village’ tended to come together at certain times of the year and disperse at other times. The coming together and dispersing served to help each nuclear family harvest food as easily as possible, help young people find suitable mates, and provide for trade.
To me, it all depends. The world could spiral down into nuclear war, and we are all dead. Or maybe the debts are simply written off, and we start over from a lower plateau…similar to land reform in post-WWII Japan. Or maybe nation states just fail and people spontaneously revert to simpler organizations…as happened with the Maya. Whatever happens, I suspect that the ability to find or grow food and to purify water and to construct a shelter and to make some clothing are good skills to have. More or less Dmitry’s list. I suspect that a male and a female together would really help.
Don Stewart
I have looked at how people survived in the north of sweden. I think dmitry managed to include many important points. But I also disagree to some extent. Even rye is not really reliable at places where the weather is very cold nine months of the year. People used to plant it but compared to potatoes it was very unreliable. If you want to hunt big animals it should be done on skies when there is a thin layer of ice on the snow. Thin enough to not bear the animals but thick enough the bear the skier. People used to hunt elks and wolfes on skies with axes. The hunt could last for a day. Another important thing is bringing cattle. They transform grass to milk, manure and meat. In the winter you had cheese and butter from the milk production of the summer. You also need a scythe to get hay for the winter. The cow was the most valuable domestic animal in the north. Much more valuable than dogs and cats. Fishing and setting traps for smaller animals seems to have a better EROI than hunting bigger animals like elks.
A deer, elk or reindeer trap by youtuber Lindybeige https://www.youtube.com/watch?v=8mQQ688csuw
Seems to be a reasonable contraption.
Yes, probably works. Smaller animals like hares and capercaillies seems to be more predictable. That makes it easier to choose an apropriate location to the trap, usually simple snares.
Fascinating.
I should have thought elk-hounds to help with the hunting? They would earn their keep.
(A hunt with axes on skies sounds like great fun.)
Dogs are of course useful. But my impression is that they were not first priority. The kind of hunting described was used before modern, good and affordable rifles existed. The point with using skies is that you have an advantage when you follow the prey. It’s tiresome to flee in deep snow. Maybe you could train dogs to run with snowshoes. Anyway, a wolf would instantly kill the dog and elks usually don’t flee from dogs. (A very big dog would maybe have a chance. The problem is they require huge amounts of meat. This decreases the EROEI for having the dog. ) The dog would only be useful to find the elk. When the elk is found you have to chase it for very long.
Here in New Zealand people train pig dogs…. then they take them into the bush and set them loose to chase down pigs…. when the dogs catch the pigs they bite and hold them -usually by the ear — then the hunter pounces on the pig and slits its throat with a knife….
I have not seen such a hunt but I can imagine it must make one hell of a racket with the dogs barking and the pigs squealing
You must have really meek pigs in NZ. Not even a wolf would dare to even think of touching the wild boars around here. An adult female are 100 kg and the males are even bigger. They also have more or less razor sharp tusks. Many hunters get severely injured from pigs. Dogs get killed if they aren’t intelligent enough to stay at a reasonable distance.
No idea on that….
However when you send 4 big vicious trained dogs on a pig… I assume the pig will usually lose that battle….
Looks crazy. I don’t know much about that kind of hunting. It’s not allowed around here. I assume that you put the dogs in some risk.I know that dogs are killed around here eventhough they are not supposed to attack the pigs. Typically a pig is not agressive until it’s wounded. But then they can get really fierce. Dogs used to look for wounded pigs has to be really careful. That’s the risky business.
I’ve seen ‘Pig Dog Emergency Patch Kits’ in Wally’s World….
I am surprised that the SPCA doesn’t oppose this method of hunting.
That sounds wise to me. Though poeple in general will consider it crazy.
The time span on 72 months is interesting. Are you sure of that or do you hold some grain of doubt? I am not totally convinced of an imminent collapse. It’s likely it will happen. But as some commentators on this blog claim there is a possibility that society can hold together for several decades. I can’t see how people can be so sure on either of these outcomes.
I think it is like Fast Eddy commented some while ago, we know the patient has a terminal disease, but the exact date when the heart stops beating is hard to predict. But decades, with corporate profits down and debt to GDP ratios going sky high, no way! Fast Eddys 2016? Could be, but that would imply some sort of coronary without headsup, to close stock markets for a week or a month, print money like crazy, the FED going in to negative interest rates, IMF spreading serious amounts of SDR:s etc. etc. Somehow my gut feeling is in the 2017-18 range.
Empirical evidence of either theory, does it exist? Imminent Collapse, yes we had the tulip mania and the stock market crashes of the Great Depression, so yes, it is possible to maintain BAU and suddenly some thing that were worth something one day, were worthless the next. And we do have all the signals of final desperate attempts to maintain the tulip mania..
What about empirical evidence for decades of slow degeneration? Sorry, just can´t see it. It would require some awesome energy technology, implemented immediately, globally, cheaply and safely. Never seen anything like that, so, extremely hard to imagine. Even cell phones took decades to reach everywhere. And I just can´t see how the global financial networks could have some sort of global debt forgiveness, and still maintain some sort of BAU after that.
In 1788 prolonged bad weather driven by the El Nino event caused famine in France. In 1789 we had the peasant revolts and then the French Revolution. Dunno if history will be repeating itself, but we will be having a record El Nino event in 2016, so expect some serious trouble in 2017-18.
The diagnosis is correct, but the exact timing of the coronary is hard to tell.
My guess is 2024. Big things change slowly. I still see no car pooling, no house sharing, no at home hospice, no creation of local school houses to decrease busing costs. Paying debts is no issue they just will not be paid. The issue is those who had planned to use the payments to buy food or such. They will just have to do without or die.
One other problem the doctor has — and that would be determining which of the various ailments are going to be responsible for the death of the patient.
Finland – the new Greece: http://www.telegraph.co.uk/finance/12001895/Finlands-depression-is-the-final-indictment-of-Europes-monetary-union.html
The article compared Finland to Sweden. The countries are similar in many ways and used to be united until 1809 when the russians forced a split between sweden and finland. But there are some very important differences beside the fact that finland has the euro and sweden not. First of all finland remained poor for very long after WW2. After all they lost the war since they where allied to their enemies (Soviet) enemy (Germany). (Soviet tried to conquer Finland but failed totally.) I guess this is one reason to why the finish people are much less “modern” and more conservative than the swedish people.
Why do Sweden outcompete Finland when it comes to GDP growth? There are basically two reasons. i) Sweden has a soaring credit to GDP ratio from credits to households and companies, this has kept consumtion high. ii) The last 10 years Sweden had a very high level of immigration which also increases GDP. However, GDP/capita has decreased a little. In fact nowdays the counties with highest percent native swedish speaking are situated in finland and not in sweden. Finland has had a comparatively low immigration.
The swedish industrial production index has decreased by 20-25% since 2007. We dont excel here. It’s the credit driven consumtion and immigration thats the secrets. Furthermore farmers are leaving their jobs or leave for retirement in great numbers. The fields are planted with spurce. In finland they are much more aware of the importance of self-suffiency. In sweden food is simply something you buy in the supermarkets.
In the end when shtf finland will be much better of than sweden. Somehow, these are the things that economists fail to see.
A Microsoft exec went in and gathered the crown jewels, Nokia phones, from the finns. The Finnish ICT sector didn´t bounce right up from that, though Nokia networks is making a comeback. What´s left, Supercell with Clash of Clans and KONE with some elevators.
Sweds have negative interest rates, their own currency, some marketing skills, otherwise pretty much the same setup as the finns, Ericsson, Volvo and SSAB leading the way.
The Danes on the other hand, have a much wider corporate sector, and Norway still gets oil revenues. Though, without oil Norway would be a pretty poor country. But there goes the Myth of the Scandinavian Utopia..
Norway was always the poorest (but the most beutiful) part of scandinavia (if we exclude iceland). It’s useless to just have a lot of rocky mountains if you want to make a living. At least they could get some fish to eat. Then they found the oil… Norway also seems to be popular among tourists today.
Norway needs a plan on how it will feed and fuel itself after the oil is gone. When it the oil expected to be gone?
If they did not want to see future generations starve to death they would build hydro electric systems, green houses, wind turbines, …. Have they built anything of long term value that will produce value for years to come?
Norway is better of than sweden when it comes to food. Their small scale farmers get better subsidies than in sweden. The farmers here quit farming and plant spruce trees on the fields.( Pine trees would have been better since you can actually eat the inner bark of the pines.) In fact we receive very little eu-subsidies compared to other nations in eu.
They have been building roads and tunnels with the money. They need a lot of tunnels since almost all of the country is mountains. I don’t really know much how they have used their money except for that.
Norway is almost entirely powered (electricity) by hydro.
When the oil is gone depends on price. Norway has a lot of hydroelectric, but it requires replacement parts. Wind turbines would too.
Perhaps look at some real world examples what’s collapse like in terms reduction in system complexity of these systems. We have on very good recent case, the USSR. Notably, the hydroplants which served as the systemic workhorses were underfunded in terms of maintanance for decades, perhaps starting in the 1980s, the worm of neglect burned slowly, some of the problems showed only in the early 2000s, that’s 2-3decades of underfunded/understaffed care for these systems, mind you I didn’t say no maintanance at all. It’s crazy to expect the whole hydro system of Norway to go bad over night since the time zero of collapse-reset. It will take years/decades, as problems increase it will most likely result in fractioning of the national grid into more regional and less dependable one etc. Please people get realistic here.
Right. But we are a lot more dependent on computers now, and repairing them is a bit trickier.
I know a while back, I was using 20 years as how long we could count on some things to last–clothing, houses with intact windows in sort of the right locations, some kinds of continued production like Norwegian hydroelectric. Those things would perhaps allow some civilization to continue for a while, in some form, for at least a few people.
Here is some information on what is required to maintain a hydro electric plant http://www.ieahydro.org/Power_Plant_Maintenance.html
Here’s some info on what is required to maintain an electricity grid: http://www2.nationalgrid.com/uk/industry-information/gas-transmission-system-operations/maintenance/
These will not be operational for very long post BAU….
Maybe growth is bad now. If they grow their need for oil grows. There need for imported food grows. Shrink is good. They should engineer and design more shrink. Until they live inside their indigenous food and renewable energy foot print.
Its debt isn’t as high as that as some others, “only” 270% of GDP–that may be part of its poor showing. The US is now as 350% total debt to GDP.
Dolph…. more fake numbers…
Ore drops to record low in Asia, shipping index plunges
http://www.afr.com/business/mining/iron-ore/ore-drops-to-record-low-in-asia-shipping-index-plunges-20151119-gl3foq
Even if you’ve had only a tangential connection with financial markets this year, you probably won’t need telling that 2015 has been rough for commodities.
Summer’s wave of doubts about China’s demand for raw materials, previously thought essentially infinite, saw prices collapse for everything from oil to aluminium.
Companies in the sector were hit hard, with the world’s largest commodity trader Glencore in the eye of the storm thanks to an infamous report from Investec which suggested that heavily indebted commodity players stood in danger of value elimination.
Markets have stabilised in the months since, but wave after wave of disappointing numbers out of the worlds’ number two economy have meant that the grip is a fragile one.
Just how fragile was underlined on Friday by the Bloomberg commodity index which tracks 22 raw materials. It fell 0.5% on the day to settle at its lowest level since July 21, 1999. Just before the financial-crisis avalanche overwhelmed all markets in September 2008 it stood at 238.7.
http://news.markets/commodities/commodities-index-shows-markets-extreme-weakness-4488/
I’ve never heard this term before ‘value elimination’
A nice way to say vapourization?
Instead of BAU collapse maybe we should say BAU Value Elimination …. that has a nice hopium sounding ring to it….
That article makes it sound like the low point for commodities was in September 2008. I was thinking it was in December 2008, about the time QE was started,at least for oil. Other energy commodities were low then too.
http://www.zerohedge.com/news/2015-11-19/today-baltic-dry-freight-index-has-never-been-lower
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/11-overflow/20151119_bdiy.jpg
“If something cannot go on forever, it will stop.”
Moments ago Caterpillar reported its latest monthly retail sales statistics and the numbers have never been worse: not only is the dead CAT bounce in US sales finally over, tumbling -8% Y/Y, after a -4% decline in September and hugging the flatline for the past few months, but sales elsewhere around the globe were a complete debacle: Asia/Pacific (mostly China) was down -28%, a dramatic drop from the -17% a month ago, EAME dropping -13%, and Latin America down -36%…
… but global retail sales just posted a massive -16% drop in the past month, after dropping 9% a year ago and another 12% in 2013, this was the biggest annual drop since early 2010. As the chart below shows, CAT has now suffered a record 35 months, or nearly 3 years, of consecutive declining annual retail sales – something unprecedented in company history, and set to surpass the “only” 19 months of decling during the great financial crisis by a factor of two!
Worse, with the market no longer rewarding stock buybacks, Caterpillar suddenly finds itself flailing in the gale strength winds of what nobody can claims any longer is not a global industrial depression.
However, there is good news – while Caterpillar’s revenues and cash flows may be plummeting with every passing month, at least the company has a cunning plan how to recover some inventory.
According to the WSJ, Caterpillar is eager to reassure shareholders it won’t get burned on equipment leased to customers in China even as the economy cools there. CAT Financial Services President Kent Adams said during a conference call on Tuesday that the company keeps tabs on the position of machinery electronically through its Product Link system.
“If a customer falls behind, we have the ability to derate the engine or turn the engine off, and we’ve set up a legal presence in all of the provinces of China.”
In other words, any and all Chinese lessors who fall behind on their payments will suddenly find their excavator’s engine shut down and no longer operable, stuck in the middle of a mine, quarry, or construction site with a paperweight weighing dozens of tons.
So this is great news right? After all, at least Caterpillar will have recourse to its equipment, and can “solidify” its balance sheet. The problem, as we showed last week, is that there already is an epic glut of CAT heavy equipment in the wild.
http://www.zerohedge.com/news/2015-11-19/caterpillar-depression-has-never-been-worse-it-has-cunning-plan-how-deal-it
We NEED the Ghost Cities and Bullet Train announcements our of Timmins and Thunder Bay ASAP!!!
They can shut them down remotely. LMAO. OK, they can the excavator from the asset column to the loss column and gain a one time only tax write off.
Do you real believe there is no one in China with the smarts to 1) cut out the satellite locator and 2) bypass the shut off circuit? This just means a flee of free CATs in China.
can move
fleet
All late mode 2000+ model year earth moving and ag equipment is run by computers now. The entire engine management and hydraulic system is computerized just like air craft and automobiles. To make matters worse, every manufacturer uses a different black box and they are all encrypted to protect their intellectual property. To get equipment like that to run without the black box computer management software one would need retool everything that is operated via computer to run on a reverse engineered computer software system or retool everything that is computer controlled to be mechanical. I doubt full power or full functionality could ever be recovered from any equipment so equipped either so that could be a issue as well. It could be done but would take some time. It isn’t as simple as the old days where you just jump a wire and the engine starts.
Either way it’s a bit ridiculous for CAT to point to the fact that they can shut the machinery down to give solace to shareholders…
The reality (as we have seen in Australia where heavy gear is being auctioned off for pennies on the dollar) is that many of the companies that own these machines are probably insolvent anyways and the machines are rusting away in parking lots…
Because China appears to has dramatically slowed their build out of infrastructure projects including ghost towns…
My point being that folks are not grasping how complex and interconnected the modern globalized industrial world is. Much of the old ways of doing things either mechanically or with pencil and paper are long gone. Everything is run by networks of computers. Computers are failing here where I work more rapidly now than I have ever seen. Disk drives that use to last 10 years failing in 3 months. Every computer part that comes across my desk is Made In China. I haven’t seen one computer part from any other source in several years now. Computing is completely virtual. It doesn’t really exist except in the arrangements of electrons. It seems so real. But it is completely artificial. It takes 24/7 crews and parts worldwide to keep the financial networks running. It is super fragile and folks outside of the computer and server rooms just don’t see that.
Those cats have flees 🙂
The sales prices of some used equipment are eye-openers as well. “Was: $2.9m | Now: $15,000: Caterpillar 992C wheel loader.” I can buy one to use as an extra vehicle.
It is a nice blog. Some of the reasoning is a little strange. Usually goes something like this from FE and others. We are running out of stuff, there is too much debt, we are in a complex system.
Therefore, collapse is inevitable because I believe complex systems always collapse. Collapse is imminent because I believe it to be so. Those who disagree with me are simply incapable of reasoning or filled with hopium.
Unfortunately, complex systems may not always collapse. We just don’t know. They might simply change into another system and continue on without the occurance of a large scale collapse.
I’ve noticed that collapse people tend to be adult, middle aged, middle-class people in the advanced world, mostly North America and Europe, who had a solid education in the sciences and take their work and professions seriously.
And this makes sense, right? You see your own standard of living decline, you see the politics and finances of your countries go to crap, you see degeneracy everywhere, you see the brown and black masses getting uppity, etc.
But what it blinds you to, is that collapse is something specific, and happens to specific people. The young don’t care, they are too busy taking nude selfies, chasing sex, and twittering and facebooking and working at their dead end service jobs to pay back student debt. The brown and black masses don’t care, they are too busy fighting for survival and food, and yes, they will continually move around the world and come to your countries if it means a chance of betterment, however slim.
We are Romans. We are Romans witnessing the onset of a new dark age and all we can do is observe and comment.
If you want to suggest that another system comparable to what we have now can replace BAU then all good — but you will have to explain what it looks like — and how…. and be prepared to field some hard questions…
e.g. will there be energy – if so how will it be produced and distributed?
That’s one of the purposes this site serves — to suggest and evaluate potential outcomes.
Yes — most people here have concluded the outcome will be catastrophic — this conclusion — just as the conclusion that ‘renewable energy’ is bs — was reached only have very intense discussion and thought.
You can say there are non-catastrophic outcomes available — but if you cannot provide fact-based arguments….
Then I can say that Santa Claus and the Tooth Fairy are real — and you need to respect my positions.
Not really, I never claimed any outcome. I am just saying that there are many possible outcomes. If you claim a specific outcome like catastrophy, the burden of proof is on you, not the other way around. You are far from proving your case and saying people don’t understand you is childish, so the Santa Claus analogy is probably appropriate.
You are aware that the author of this blog’s position is that a catastrophic outcome is inevitable — and that every single article on this blog directly or indirectly supports that assertion?
Are you saying all Gail’s hard work and deep thoughts are worthless?
If you are in disagreement with Gail or others who hold the position that collapse will be catastrophic — then you need to step up and explain why we are wrong.
Don’t be timid…. what’s the worst that can happen …. listening to Joan for a couple of minutes is not he end of the world….
Kurt, early in his career J.M. Keynes was in Versailles peace conferance in 1919, Keynes clearly saw what the harsh “astronomically” high war compensation from Germany would lead to. And lo and behold, we had WWII. Later in his life Keynes was part of the Bretton Woods conferances, that defined global financial rules to this day.
John Kenneth Galbraith was often at the very epicenter of politics in his time. Close friend of John F. Kennedy and warning prophetically of the dangers of deregulated markets, corporate greed, and inattention to the costs of US military power..
Today we don´t have a Keynes or a Galbraith, but luckily we have Gail.
The point about complexity is that if we try to solve problems and maintain structures we have today we will increase complexity. That is a bit of a problem. If we could remove old structures like Democracy, Capitalism and Free Markets, then increased complexity would not be needed.. Check Tainter: https://www.youtube.com/watch?v=G0R09YzyuCI
In the end it comes down to corporate profits. We have a stock markets that our sovereign wealth funds depend on. If corporate profits tank, stock markets fall, millions of pensions don´t get payed and the economy crumbles. So keep an eye on corporate profits, if profit margins globally are increasing, no problem, everything is A-OK. But if you see profits falling, or expect profits to disappear, never to come back. That is a bit of pickle.
If we had corporate profits increasing untill infinity, I´ll bet most of the readers of this blog would be: ” I’ll be a monkey’s uncle!”, a bit surprised, but could not be happier to be proven wrong. Unfortunately what Keynes saw in his time, and Galbraith in his, now Gail shows us what´s coming next.
dolph9, there are well educated Japanese, Russians, Chinese, Indians, Iranians, Egyptians, … who are in the same boat. But in general I agree with you.
At Bretton Woods Keynes proposed balanced trade. He proposed a tax on any country that exported more than it imported and a subsidy from that tax to countries that imported more than they exported. It was a great idea then and still is.
It would of course have some odd effects like China being taxed to help under developed US.
That is pretty lofty company, “Today we don´t have a Keynes or a Galbraith, but luckily we have Gail.” Thanks!
Gail is basically correct. Obviously, infinite growth is not really possible unless some type of incredible technological advance such as fusion power were to occur and it would have to happen quickly. Even then, the transition as Gail points out would be extremely difficult.
I believe we are in an economic depression masked by debt. The data on energy use out of the U.S. makes that clear and China is collapsing. The only thing creating GDP growth at this point is massive central bank intervention. All well and good with the reasoning. However, the future is extremely difficult to predict. When having a reasonable discussion with people, it is best to avoid saying things like total collapse is 100% inevitable or collapse is imminent. Better to say there is an extremely high probability of a coming collapse. Putting a time frame on it is pretty close to impossible. Hence, I jokingly try to get folks to bet on the timeframe — which they won’t do for very understandable reasons. Being certain of your opinion is admirable, but denigrating others is not.
“Prediction is very difficult, especially if it’s about the future.” – Mark Twain
Heard it was Niels Bohr.
Let us put is this way (as David Korowicz was quoted):
Unfortunately, there is no way we can backward, say to using horses and buggies. Our economy is just too adapted to using cars, trucks, and airplanes now. At the same time, if we don’t expand rapidly enough, fixed costs become too big a problem for businesses. They find that their profits fall, and they cannot pay their interest on debt. They lay off workers, and those workers cannot repay their loans on cars, homes, and student loans. Banks fail, thanks to all of these loan failures, and also thanks to derivative failures related to loans/interest rates/currency exchange rates.
The situation is not obvious if you don’t understand how the financial situation works, but it is if you do.
In the electronics industry people talk about the ecosystem. No production lives by itself. It must use and be able to be used by many other products and services. Without numerous supporting services it is worthless/useless.
The same applies to a move from car to horse you have to move the entire ecosystem of supporting services, products, skills, infrastructure and number of people.
Right!
Dear Finite Worlders
Here, in a nutshell, is the way I interpret the thermodynamic models of energy depletion:
‘progress has begun to lose its luster. Official agencies still project economic growth as far as the eye can see, but those forecasts of a better future now ring hollow.
Why? It’s simple. We can’t afford it.’
The quote is from Richard Heinberg’s essay today:
http://www.resilience.org/stories/2015-11-19/can-we-afford-the-future
Separately, I have likened the thermodynamic models as indicating how big the economic bubble can expand. There are two broad modeling arenas. The first is solar energy, including photosynthesis and including gravity and chemical energy (e.g., cation exchange capacity). The second is industrial energy, mostly fossil fuels.
Looking first at solar, we find that life (which is a kind of economy) evolved over billions of years and finally included not only bacteria but also the myriad of life forms we see when we look around us. The productivity of a rainforest is now enormously greater than that same land would have been a few billion years ago. This teaches us that it is not only the raw energy that is an important factor in determining the size of the economic bubble, but also that intricate relationships and physical evolution of infrastructure are critical.
A few hundred years ago the second economic bubble began to inflate. That bubble was maintained and grew mostly due to the exploitation of fossil fuels, but also because of the increasing sophistication of relationships and the evolution of physical infrastructure. For example, cars came to be a huge economic factor only because our social structure evolved in the direction of specialization and global trade and because we invented roads and container ships and the like.
But there is a crucial difference between the solar economy invented by Nature over billions of years and the industrial economy invented by humans in the last couple of hundred years. The solar economy was vitally dependent on recycling of raw materials and the passage of energy from lower to higher trophic levels. The industrial system, by contrast, was mostly a ‘use once and throw away’ system.
From a thermodynamic perspective, the solar economy can be reasonably stable (i.e., support life) for billions of years.
BUT, Heinberg claims, the industrial energy based economy is not stable and is now eating its own children.
Ellen MacArthur Foundation has just completed a multi-week series of broadcasts and events aimed at converting the industrial system to a recycling and passing energy up trophic levels model. Whether the effort can succeed when time is running out is a good question.
I have previously noted the thermodynamic models put forward by Tim Garrett and BW Hill. Both of those models assume that the ‘use once and throw away’ characteristics will remain in place. Both come to the conclusion that the size of the economic bubble sustained by fossil fuels is about to shrink rather drastically…or is already shrinking. If the size of the bubble is shrinking, then one can deduce all sorts of things about how humans will be impacted. Most of those things are not what most people would call ‘good news’.
As a simple exercise, one can ask why the Baltic Dry Index is currently at a very low level, but the rate for tanker rental is at a high point. The answer is likely to be consistent with Heinberg’s statement quoted earlier. Alternatively, one can ask ‘Are low oil prices a good thing, if they are bankrupting the oil industry?’ If you are interested in finance, you can ask how it came to be that oil producers would be expanding production when they are losing money.
Don Stewart
More about energy dissipation.
Here’s an auto-translation of the last part of a speech François Roddier had planned to give during the “Counter-summit to COP21” on Nov.14th, which was canceled.
“If our goose that lays golden eggs will turn off one of her eggs will hatch one day. What will set us leave to our descendants? For me the answer is clear: it is a humbling experience. We have for the first time a rational explanation for what happens to us, but it is still very poorly understood. Life is natural process of energy dissipation. We are made to dissipate energy. Once a source of energy appears, we rush to it like insects to the light to which they are burned. Will we finally become conscious?
One law could now replace the Ten Commandments of Moses: the fundamental law of thermodynamics, Carnot said law. It reads: we can sustainably dissipate energy only by extracting closed processing cycles of heat from a heat source to make a party to a cold source. We are only beginning to perceive the implications. The first is that this law involves not only human but all earthly forms of energy dissipation, a set that some denominate Gaia.
One form of energy is allowed. It is provided by the Sun, our hot source at 6000 ° K. Our cold source is the night sky to 3 ° K. It implies that we take care of the ozone layer that separates us. When changes in cycles, they involve all forms of terrestrial life. Gaia can be considered as a two-stroke engine. Initially, plants capture solar energy and emmagazinent as carbon chemically reduced. Secondly, the carbon oxidation releases the heat emitted as infrared radiation toward the night sky.
Heat engines are inherently unstable. They operate through suites of explosions and extinctions. James Watt had to equip its steam engine with a ball regulator. Humanity will have to regulate its own development. It may for that draw on biology (known as biomimicry). It will move from one stage of organization similar to that of the ecosystems within which reigns a Darwinian competition to a more complex organizational stage, similar to that of a multicellular organism. This implies the development of multiple metabolic pathways, each associated with different enzymes currencies. They are the key of the human body regulatory mechanisms.”
Google trad.: http://translate.google.fr/translate?hl=fr?sl=fr&tl=en&u=http%3A//www.francois-roddier.fr/%3Fp%3D354
Original French: http://www.francois-roddier.fr/?p=354
Dear Stefeun
It looks like it would have been a very good speech. I particularly like:
‘James Watt had to equip its steam engine with a ball regulator. Humanity will have to regulate its own development. It may for that draw on biology (known as biomimicry). It will move from one stage of organization similar to that of the ecosystems within which reigns a Darwinian competition to a more complex organizational stage, similar to that of a multicellular organism. This implies the development of multiple metabolic pathways, each associated with different enzymes currencies. They are the key of the human body regulatory mechanisms.”
Thanks…Don Stewart
Thanks for the translation. Interesting talk.
I don’t agree with François Roddier that a “regulator” would be helpful. We are now operating below stall speed, and our problem is near-term crash. We don’t have an option of “de-growth” without crashing, because of debt and because of the way our economic system operates. Businesses cannot shrink because of their fixed costs; government spending cannot shrink because of increasing promises to a rising population.
I’m convinced that François Roddier also believes that the collapse of BAU is inevitable and imminent, as that’s the logical conclusion of nearly all the statements he makes.
I think he’s trying to find ways to mitigate the devastating effects of the crash, such as promoting alternative (local) currencies and small self-sustaining (rather: resilient) communities. Like seeds that could thrive after collapse.
I’m much less convinced by the “more complex organizational stage”, since it woud likely require more energy, while F.Roddier himself says we’ll soon have to live again upon the “solar budget” and no more. And I can’t see how such large organizational level could be reached in a post-collapse environment where transports and communications will be drastically reduced (at best).
As for biomimicry, I think this re-integration of humans into Nature will happen anyway (provided that some of us survive). But humans will never form a super-organism.
“Ellen MacArthur Foundation has just completed a multi-week series of broadcasts and events aimed at converting the industrial system to a recycling and passing energy up trophic levels model.”
After discounting state and local subsidies for recycling programs, he found that in 2009, even after accounting for resold recycled material, state-of-the-art curbside recycling programs cost on average $199 per ton of municipal solid waste, while landfill disposal averaged only $119.
http://bigthink.com/dangerous-ideas/14-recycling-is-a-waste
The District, Baltimore and many counties in between are contributing millions annually to prop up one of the nation’s busiest facilities here in Elkridge, Md. — but it is still losing money. In fact, almost every facility like it in the country is running in the red. And Waste Management and other recyclers say that more than 2,000 municipalities are paying to dispose of their recyclables instead of the other way around.
In short, the business of American recycling has stalled. And industry leaders warn that the situation is worse than it appears.
https://www.washingtonpost.com/local/dc-politics/american-recycling-is-stalling-and-the-big-blue-bin-is-one-reason-why/2015/06/20/914735e4-1610-11e5-9ddc-e3353542100c_story.html
Fast Eddy
When you have examined the proposals of the various speakers, then feel free to criticize them.
Don Stewart
There is a huge amount of energy required for recycling metals. It is possible to recycle the “easy to gather” big pieces fairly economically, but as you get to smaller and smaller pieces, there is a bigger and bigger energy cost of gathering the metals back for recycling, not to mention the heat for melting them.
The Ellen MacArthur Foundation is not talking about your garden variety recycling, but about redesigning the way we build things. If you are going to criticize it, you need to learn more about it.
Same with their ideas about redesigning transportation. Charles Smith has recently written about the potential for shared use of driverless vehicles to destroy the automotive industry. One can react in various ways:
*Horror at the loss of wealth and jobs as a whole industry radically downsizes
*Elation that we will be saving so much money
*Enthusiasm that traffic jams will be a thing of the past
*Enthusiasm that the auto insurance and traffic enforcement systems will disappear
*Enthusiasm for the potential for electric vehicles
Etc.
Whatever else it is, the idea is disruptive. My initial reaction is that the barriers to this happening are smaller than anyone might think. We could be seeing happen to the auto industry what happened to the music industry, which has shrunk by half over the last decade or so.
Don Stewart
Plasma converters.
https://en.wikipedia.org/wiki/Plasma_gasification
I missed something if Tim Garrett is saying that the size of the economic bubble sustained by fossil fuels is about to shrink rather drastically. He is a climate change scientist, for the most part. I thought his view were pretty much, we have lots of fossil fuels, and we will use them over a very long period, resulting in climate change.
http://robinwestenra.blogspot.com/2014/11/introducing-prof-timm-garrett.html
*There is a constant which relates the cumulative sum of GDP to energy consumption.
*Even if GDP stopped growing tomorrow, we need to continue to spend energy to maintain what we have built
*If we conserve energy, it doesn’t really make any difference. We will consume all the energy we can afford.
‘Growth slows due to a combination of prior growth, energy reserve depletion, and a “fraying” of civilization networks due to natural disasters. Theoretical and numerical arguments suggest that when growth rates approach zero, civilization becomes fragile to such externalities as natural disasters, and the risk is for an accelerating collapse.’
I wrote on Peak Oil that Garrett reduced civilization to the parameter of energy consumed. BW Hill further reduced it to net oil consumed. BTW, Hill had not read Garrett’s paper until I called it to his attention. He was impressed by Garrett’s finding of a single parameter in his equations. Garrett’s paper dates from 2009, I believe, but it wasn’t officially published for several years due to academic quibbles.
Garrett’s model which uses cumulative GDP has some mirror images in BW Hill’s work, although the two were conceived quite independently.
Don Stewart
I have read Garrett’s work; reducing civilization to a parameter does not in Garrett’s mind imply anything about near-term collapse. He thinks we can/will use all of the fossil fuels in the ground.
Gail
I respectfully disagree. ‘Using all the fossil fuels in the ground’ implies that we would go after fossil fuels when the thermodynamics turn against mining more of them. Garrett’s thermodynamic model clearly doesn’t contemplate draining all of the physical resource. That would be very ‘un-physics-like’…and he set out to model things using physics.
I do agree that Garrett’s model is not as sophisticated as Hill’s model. Hill’s model puts together cost of production plus ability to pay. Garrett is not that sophisticated. (But then Garrett predated Hill by 6 or 7 years.) I see Garrett’s model as setting the stage, showing that the data are consistent with the notion that Hill has very recently espoused: there is no economic production without the use of energy.
If Hill is correct that:
*Energy can be modeled as oil and (from Garrett) civilization can be modeled as energy
*The cost of extracting oil has been increasing exponentially
*The economy is a function of oil and a parameter which relates production to BTUs
*As the gap between the cost of the oil and the value of the oil shrinks, and then turns negative, the economy will begin to shrink
*The economy DOES NOT rapidly reshape itself to reflect the changes in the net value of the oil…we DO NOT revert to simpler organizations of economic production. In part because the Central Banks print money to try to keep BAU in place.
Then we get the myriad negative consequences that we are experiencing now and over the past decade or more. These negative consequences include financial debacles, social unrest, wars, unpayable promises, and the like.
Don Stewart
“These negative consequences include financial debacles, social unrest, wars, unpayable promises, and the like.”
Haven’t these always existed?
Javier
It is not NECESSARY to have declining available energy in order to get a financial debacle. The tulip mania and the other recurrent financial follies prove that. BUT, if you combine high debt levels with declining available energy, you are almost certain to get a financial debacle.
Plenty of energy permitted people to come up with ‘end of history’ theories. As energy declines, those theories will seem ridiculous, I think.
Don Stewart
According to Fast Eddy:
1) price of oil in 1998: $11.70 (or hovering thereabouts)
2) price of oil now, in late 2015: $40 (or hovering thereabouts).
This is correct, roughly an increase of 3.4 times. More than 300% rise, despite all of the crashes.
See, deflation! Deflation!
https://research.stlouisfed.org/fred2/series/DCOILWTICO
click on max to see how oil hit the modern low in November 1998.
This is getting sad and funny. You literally cannot make this stuff up anymore. You guys post the prices and still yell deflation.
For deflation in the oil price (which still doesn’t prove general deflation) it must crash below $11. Any takers? Shall we place our bets now?
I’m with B9K9, worldofanuman and others. There’s only so much you can do. It just sort of becomes this argumentative circle jerk. But, I’m willing to wait this out another 10, 20 years and I believe my intentions are good.
What happened to the $147 down to $40?
You have conveniently skipped that….
Let’s take a look at copper —- note: when the graph starts from a high point … and ends at a low point — that means the price is deflating…
http://www.kitconet.com/charts/metals/base/spot-copper-1y-Large.gif
Shall we check on iron ore? Yes – why not….
http://www.vale.com/PT/business/mining/iron-ore-pellets/PublishingImages/Indices/indice_13112015_EN.png
D to the E to Flation….
Of course all these numbers are made up….
A final note on this … generally inflation is the norm…. as we have seen the central banks are targeting 2% inflation per annum.
But this time is different….. they will lose the battle against deflation…. they are losing the battle against deflation….
With lots of debt, governments want inflation to get rid of the burden. Of course, they want inflation in people’s wages and in profits of businesses, assuming both of those can be taxed. Inflation in the price of goods but not wages is no good at all.
Have you taken the rising cost of extraction into consideration in your assumption of “no deflation”?
Few do psile, EROI is most often overlooked and misunderstood. It is the defining metric of everything that is useful to allow humans to flourish. Flourish we did, especially when abundant, cheap and easy to produce oil was discovered. It’s all coming to a close though as the lack of cheap oil substitutes begins to impact the economies that were built with it.
I think that’s because most people believe that money, not energy, makes the world go around. It’s easy to print money and create more debt to make up for the shortfall in surplus energy that we used to enjoy as it declines and this allows us to keep up appearances, but eventually we reach the stage where this trick no longer works. Reality intercedes and the day of reckoning comes. Sometime between now and 2050. But I’m betting on sooner, rather than later. Regards.
I think we need both energy and money to make the world go around. We could not have an economy as complex as we have it today, without money playing the essential role of distributing resources. Energy researchers tend to make the opposite mistake; they think that energy by itself would be sufficient to maintain today’s economy, but it isn’t.
The error people tend to make is that they believe that printing money allows some sort of perpetual motion machine, which it does not.
I personally think the situation is more complicated than EROI. EROI is only a piece of the problem, and is poorly enough defined that academic results often do not behave in the direction a person would expect. Different researchers (with different hidden agendas) get very different indications.
It’s for sure a piece of the problem but it’s the one that matters by far the most.
It’s still hard for some people to come to grips with the role EROI has played in the development of the current human situation.
From the time a spear was discovered to improve hunting, fire for cooking, agriculture for community living, using surpluses to raid, plunder and take slaves. It goes on and on and on. Each increment in EROI ALLOWED for an economic development, it WAS NOT the other way around. Economic systems aided in the organisation of human development, it made it easier to exploit energy sources and labor. Take away all your debt, financial institutions and economic activity and if there were still lakes of easy to access oil, fertile soil and bountiful ocean a new system of accounting would rise. Take away the high EROI energy and no amount of debt or any economic system can rescue us.
Declining EROI will see the degradation, disintegration and the ultimate demise of the economics, spawned by the excesses bought about by human exploitation of the natural bounties the planet provided.
Well yes as we got better at extracting resources and energy use grew there was “inflation”.
Now we are facing resource depletion due to unaffordability. As the charts FE has posted show we are clearly in a deflation and there is nothing on the horizon short of a plague that kills off 7 billion that will change that.
Deflation- recession- is everywhere around us. Yet you continue with these inane comments. Why? My guess is you invested heavily in something dependent on inflation and are unable to come to terms with those losses. Like a gambler in Vegas you gotta win it back inflation is a inquestionable natural law like gravity, I gotta win it back. Hence we get these constant and inane comments. Why is this my guess? Your name calling about those who state we are clearly in a deflationary collape. If you truly had faith that would bother you not in the least. My guess is you have hidden the pain of financial losses in the delusion that inflation is a constant. When someone states the obvious you feel pain and is common to our species you attack what you misperceive as the source of that pain. Just a guess
“My guess is you invested heavily in something dependent on inflation”
Fear of death. That’s the problem
Why Can’t Obama Defeat ISIS! (trick question)
Earlier this week, CNN’s senior White House correspondent Jim Acosta asked President Obama the following question at a press briefing:
“A lot of Americans have this frustration that they see the United States has the greatest military in the world, it has the backing of nearly every other country in the world when it comes to taking on ISIS. I guess the question is, and if you’ll forgive the language, but why can’t we take out these bastards?”
Well Jim, the answer is quite simple and indeed, if you – or any other member of the mainstream media for that matter – would bother to look at things like the declassified Pentagon report that Judicial Watch turned up earlier this year, you’d be less confused.
Allow us, once again, to provide you with the answers you seek, straight from the Pentagon ca. 2012:
…there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).”
Translation: if Sunni extremists were to establish a proto-state in eastern Syria that would be great because it would destabilize Assad and cut off Iran from Hezbollah thus endangering the preservation of Tehran’s Shiite crescent.
http://www.zerohedge.com/news/2015-11-18/russia-explains-clueless-us-public-why-obama-cant-defeat-isis
Obama sits down with Trudeau. The US president and Canadian prime minister will discuss energy, security, and Syria in their first meeting since Trudeau took office. The meeting comes as Canada considers joining the Trans-Pacific Trade Pact; the PM said “trade is fundamentally good for Canada and for Canadians.”
http://www.bloomberg.com/news/articles/2015-11-18/canada-s-trudeau-meets-with-blackberry-s-chen-at-apec-summit
This is where Obama explains to Trudeau that democracy is bullshit — that if you just play ball with the Elders everything will turn out wonderfully … and whenever you leave office you will get very rich….
If you really want to ingratiate yourself it would be useful if you could sing or dance or act like a court jester… the Elders really enjoy when the minions are amusing
U.S. Government Moves To Exploit Paris Terror Attacks To Ban Privacy
You didn’t think the surveillance state would give up that easily did you? Of course not. Unsurprisingly, fresh off the heels of the Paris terror attacks, the usual authoritarian suspects in the U.S. government are running around exploiting the tragedy in a bid to further erode privacy and civil liberties.
The bloodshed in Paris led U.S. officials Monday to renew calls for limits on technology that prevents governments from spying on phone conversations, text messages and e-mails.
Senator Dianne Feinstein, a California Democrat, said she asked Silicon Valley companies to help law enforcement and intelligence agencies access communications that have been encrypted — or scrambled to evade surveillance — if terrorists are using the tools to plan attacks.
“I have asked for help. And I haven’t gotten any help,” Feinstein said Monday in an interview with MSNBC. “If you create a product that allows evil monsters to communicate in this way, to behead children, to strike innocents, whether it’s at a game in a stadium, in a small restaurant in Paris, take down an airliner, that’s a big problem.”
http://www.zerohedge.com/news/2015-11-18/us-government-moves-exploit-paris-terror-attacks-ban-privacy
In the same vein, Chinese are now aiming to enter the global big 3 in microchips, they are now 4/5 place or something, so it’s only short time question to get there. Interestingly enough, they on their own stressed the state security priority aspect of it. That again validates my already mentioned point in previous posts, that China is playing for the long run, they would be perfectly happy keeping the west on life support till say 2025-30 before reaching their own set of minimum goals be it in the knowhow hitech sourced domestically, global trade/reserves arrangements under their umbrella etc, The timing all largely depends on kick in of several major trends: ELM effects and possible (partial) substitution in terms of coal and nuclear power, and of course the trend of onslaught of demographics winter in future decades. And although I still subscribe to ELM boldly for the long run, however as we can seen now TPTB are evidently supporting the US shale circus to the tune of hundred of billions of USD freshly printed money to prolong those debts outstanding. I guess this all “conspires” against Gail/FE’s viewpoint of relatively not too distant crash/collapse, to the contrary we can clearly see emerging signs for global and regional triage, openly opressive govs., basically command style economy where collapse is not allowed or realistically stressed and pushed away to the very bitter end, which seems to be years/2-3decades into the future..
A national government wanting to live in 21st century needs international capital, debt. Profits are needed to pay off that debt.
Finance doesn´t wait a decade or two whether there will be profits or not. When profits tank, globally, finance will crash. We grow, untill growth stops and we crash and burn.
Check for corporate profits, stock market P/E ratios, government negative interest rates and whether bond yields succeed or not.
When finance crashes there are hundreds of trillions in derivatives and the like, that will floor all international banks. When international banks fall, so does all monetary transactions, economies and national governments.
When we document percentage growth rates, we imply exponential growth rates. On a limited planet exponential growth rates can not be maintained. Growth stops, profits tank and the financial sector collapses, with everything else; SHTF. Exponential growth rates for another decade or two would require somewhat of a Star Trek technology, but alas we only have Elon Musk.
This global collapse scenario is a bit difficult to imagine, probably because it is the first time ever we are a fully interwoven global economy.
I remember reading once that by 2050 we will need to consume an amount of energy equal to that which humans have used since fire making was discovered millions of years ago, just to keep our world running. Clearly this is inconceivable and so Judgment Day for planetary civilization has been earmarked for some time between now and then.
By 2050 American Airlines projection fleet size will be 1250 aircraft, from about 700 plus today. So I suppose that is in line with what is written by psile above.
I see no hesitation by the transportation industry in expansion, rather the full speed ahead attitude that growth will continue unabated.
Wonder what computer models they are using Fast Eddy?
I imagine it would be the one that assumes the world’s resources are not finite… 🙂
Those are full-throttle power into the clouded mountainside projections by American Airlines.
I never understood these claims about the derivative market being such a problem.The value of the “global bond market” is about twice the value of the “global stock market” and the (market) value of the “global derivative” market is actually just a fraction of the value of the “global stock market”, if I remember correctly? (don’t remember the fraction) The sum of the notional amount of derivatives is high. This means basically that the value of the “global derivative” market can change rapidly if something unexpected occurs? Are there any more problens with the derivatives? But in the end, isn’t the big problem in the bond market?
In short; Yes.
Derivatives mean they are derivatives of underlaying entity. To a large extent derivatives are hedging liabilities in the bond markets, so yes. https://www.bis.org/publ/otc_hy1511.pdf
The basic SWAP https://www.youtube.com/watch?v=uVq384nqWqg
Banks make profits by making these SWAPs, they take very small percentages of huge figures. http://www.forbes.com/sites#/sites/stevedenning/2013/01/08/five-years-after-the-financial-meltdown-the-water-is-still-full-of-big-sharks/
If the underlaying entitys begin to change rapidly the derivatives blow up, and the banks go belly up. Since most international banks have these liabilities, this will make most international banks blow up at the same time.
Thanks, good links!
So there are these things.
bonds
No real tangible value good faith debt intruments
And there are a lot of them
So to cover the “risk’ a quadrillion new things are created
derivitives
And now there is risk associated with this literally astronomcal creation of debt instruments
derivitives sounds so negative!
degenerate
derelict
its time to accent the positive!
what is needed is to create several googooplexes of new debt intruments to cover the risk of the derivitives.
PRORIVITIVES 🙂
Hey it was not so long ago that a couple of bankers sitting around a table created derivitives- its clearly time for the next step.
Sorry that has been addressed here dozens of times already.
Simply, crushing the existing system doesn’t mean the working infrustructure, still accessible coal, natgas, crude and uranium, pools of skilled people won’t suddenly get some more traction under different system, most likely quazi command style national government type of rule. That’s clearly the trend now. It’s not “BAU-lite” it’s about “BAU compost” and that will work for many years.. a darker, poorer, but still a future.
Say we have a heavy industrial machine making factory in country A. When international finance collapses, how, in what way, using what currency does country B buy those machines from country A during “BAU compost”?
If you make an international order of some magnitude you can always request 50% up front, but 50% of what currency exactly? Who trades in that currency, how is it valued and how do I know I can get any value from it now, tomorrow, next month?
If we don´t have international trade, we don´t have oil, coal, industrial civilization, food, the grid.
Sorry, Hanuman, I must be having my more dense moments, I don´t get how you would work yourself around global financial meltdown to “BAU Compost”. Please explain..
These type of deals are already here, Russia-China in energy/mil hardware, China-Africa/S.America in raw materials and infrustructure deals etc., in nominal terms all quoted in local currencies rubl/yen not usd anymore. But currencies that’s not the whole point, the point is barter like nature of these relationships: e.g. Russia sends them cargo vessel full of airforce jet engines and China sends back full crates of latest microchips.
The basic, shortcut version is expect reversion to some sort of cold war situation business climate. Now, imagine the whole world, not only the Eastern block is engaging in such strategy. I understand for some people of the west/north this is scifi after living the easy life since the late 17th century inside the never ending debt bubble joy-ride, but it’s ending, sorry.
Strong central government required, private property and entrepreneurship cancelled, workforce controlled by near martial law like enforcements, full controll of military force required to back up claims and enforce deals.
I´m not entirely convinced such can be maintained in a global meltdown situation. Must reflect on that. Thanks Hanuman.
I am totally convinced it cannot — http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/
Hanuman, your “BAU Compost” will come down to Just-in-Time logistics vs. the time it takes setting up a strong central government, private property and entrepreneurship cancelation, martial law and the full controll of the military force.
If countries A. B. and C. have largely Just-in-Time logistics, when a country D. has canceled all libertys, what will remain of countries A. B. and C? Probably just about nothing. The skilled forkforce is decimated and the production facilities ransacked in countries A. B. and C. Then country D has no international trading partners, ergo we don´t have oil, coal, industrial civilization, food or the grid.
An interesting read, thanks Fast Eddy http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf
Trade Off is a must read…. absolutely brilliant
Van Kent> I’m glad we are slowly getting somewhere, simply the most unfortunate of that countries A,B,C lot, which doesn’t have direct trade/barter/loan compatibility with D countries which are those with pre-collapse already existing semi-vertically integrated core structures, means the most unfortunate A,B,C will be slowly one by one triaged out of the system aka hanged dry, kicked out to the freezing night, returned to the mean (or rather way lower), ..
I agree with Van Kent. Crushing the existing system basically leaves us with pretty close to nothing, not BAU compost. The banking system stops working, so wages can’t be paid.
In mixed and command style economy wages are direct claim on domestic production and “allowed” foreign imports, unlike all those elaborate debt schemes perhaps so engraved inside the minds of many even at this highest hour. The era of “banking system” is simply ending, but the world is not ending for it. The future banking will again split on majority retail/business (low/no risk) and minority separate entity investing houses (elevated risk).
Gail, do you seriously maintain the idea, that after current system implosion/reset, all the existing infrustructure just sits there doing nothing, similar for resources and labor, not mentioning the historic propensity of domesticated humans to be shepparded in times of despair into simplified economic structures (food, security, ..)?
The infrastructure will be useless without energy … and there will be no energy…
If you think otherwise then keep in mind — the collapse is occurring because it is too expensive to find and extract what’s left of energy in the ground…. so how will we be able to extract it post collapse — is there a magical formula that suddenly allows extraction to happen?
Can we put together a sufficient system to make those parts run after collapse? I am doubtful we can. Maybe some people can make some pieces work, but we won’t be building any new computers, with our new system that we have put together. It is hard to see how it would work. It is easier for me to see Dmitry Orlov’s idea of new businesses being “the protection” business ( I think that goes back to David’s time in the Old Testament) and taking down buildings for scrap materials. It will be difficult to feed 7 billion people with this approach.
Perhaps we are more talking past each other not to each other.
Orlov’s position for the near term is some parts of the world will collapse-simplify way further/deeper, while others enjoying the more vertically integrated societies will maintain some level of organization for the midterm. The former is the case of US/parts of Western Europe, and the latter are Russia/FarEast. I’ve never said anything about maintaining BAU for the 7bln., to the contrary I’m constantly voicing the idea of forced triage among the nations, regions, industries. I’m just perplexed about this US-centric adherence to undefensively idea about the world ending overnight with the “mere” collapse of the current debt-reserve scheme and networked JIT system. Yes, it will be very ugly, and in some places uglier, some structures will be patched, some not. There is enough spare parts and momentum to muddle through in “emergency mode” for at least 2-3decades on fewer pistons. What’s coming next after that is probably another irreverisble step down moment, that’s the real time to worry about the very basics (food, shelter, security, medicine).
Hanuman, I was wondering the same thing, some while ago. For instance, Statkraft has 273 hydropower plants in Norway, 55 in Sweden, 10 in Germany, three in the United Kingdom, and 32 outside Europea. Surely they must have spare parts to run things a year or two, perhaps even a decade or two.
But what Gail said about trucks, airplanes, payrolls by the banks, got me thinking. The interconnectedness of our global economy is astounding. Even today, we can have entire production lines standing just because the right sized o-rings didn´t arrive JIT, not to that production line, but to the subcontracor, or the subcontractor of the subcontracor. Now think of a Collapse scenario, the foreman must be able to produce DIY makeshift solutions, to almost anything. But even DIY makeshift solutions wont help, if the raw materials are missing. Even with scavenging and recycling, the raw materials from whatever you´ve got, will not last for too long. And at the same time the foreman has workers not coming to work. Worker payrolls can not be made, the families will starve and food become unavailable, forcing the skilled labourers to skip town. Now you have a very lonely foreman trying to keep the doors shut, so that the production facilities wont be ransacked by mobs trying to build shelters for themselves. And all of that will be happening just in a week or two from global financial collapse.
During the collapse of USSR, the countries adjacent were just fine. And think of the trouble they had, though international trade was possible. Now we will be going in to global collapse with next to zero international trade, or even next to zero long distance trade within countries. And all of that will happen in a matter of weeks, not months, years or decades.
In theory we should be able to maintain some fortresses of stability, but in practice it will be extremely hard, and luck patching things with DIY makeshift solutions will run out sooner rather then later.
As Mr Tainter says… that’s the problem with complex systems…
On a more local level … I apply that to my water supply …. a relatively simple system…
Water enters a pipe 1.5km up the hill from me … flows down to a settling tank … there is also another tank to break the pressure along the way … and through valves to the where it can be used to water the garden and supply the house….
If the pipe or valves freeze in the winter and burst — where will I get replacements? I have some spares but what about other people — they are assuming Wally’s World is forever….
I have a more complicated system pushing water up the hill to tanks … a solar powered pump sits inside a large holding tank that is gravity fed from a stream… if the pump breaks — or the solar panels malfunction — there are no replacement parts….
When you sit back and think — as you have done — of how many things can go wrong — about how many parts are required to keep functioning in even a simple system — never mind a very complex system like a hydro dam and the electricity grid — or even the machinery that you intend to power using the hydro electricity….
The feeling of absolute futility is overwhelming….
At one point I bought remote land in hydro country in BC Canada — the thinking was that I’d just slip back there when everything went to pieces and spend my days fishing and growing food…. then I started to think about how there was no way in hell the power plants could continue post BAU…
There were literally thousands of gaping holes in the plan once it was thought through….
I’ve since moved to the warmer climes of New Zealand but I am not significantly more optimistic about the post BAU scenario…. if I were to be honest with myself the main reason I am here is that it’s the last great adventure …. the mostly sunny weather with very short ‘winters’ is also appealing….
‘but alas we only have Elon Musk’ 🙂
Where is James T Kirk when we need him?
Oh…
http://i.dailymail.co.uk/i/pix/2015/02/28/262CCB5C00000578-0-Distraught_William_Shatner_was_spotted_at_a_Florida_airport_on_F-m-39_1425145703159.jpg
You can’t be too fat or too rich
Not cheery news, given where corporate profits are headed now. Add a rise in interest rates, and the situation will be even worse.
Looks like you & Dolph are going to have to run off the BAU trolls much like Paul did with the alternative energy crowd. Paul exerted a mighty effort in that arena, but to be honest, I couldn’t possible mount enough enthusiasm to repeatedly explain over and over again why corporate profits don’t matter, taxes don’t matter, debt service doesn’t matter, ad infinitum.
I mean, what’s the point? Where’s the margin? It’s like patiently trying to explain something to a child – you know you’re right, but they’re convinced they’re correct. So, you end the conversation and that’s that. But in the doom space, they keep coming back for more – always a new generation with the same, basic grasp of the issues, but still lacking a complete macro view that incorporates history, finance, technology, politics, etc.
So, good luck guys. But perhaps I might say that it’s best to focus on COG: continuity of government. All issues – and I mean everything in totality – flows from this perspective. Once people understand that there are standing emergency powers acts in every country, and that they can be executed upon meeting only a few conditions, then the entire discussion regarding econ 101 goes out the door, and we’re dealing with exactly what I’ve been saying for some time:
– directed expenditures
– currency modification (ie devaluation)
– wage/price controls
– rationing
– travel limitations
– assembly/speech restrictions
You want to be part of the system that claims lawful authority over these processes. It’s really that simple.
Great, COG focus is the best short summary.
I’ll only add that it might worth watching COG related issues on more smaller powers, it’s more volatile hence more action. For instance, the army coup by field marshal Al-Sisi of Egypt was clearly COG operation of a faction of traditional establishment against islamic brotherhood and its foreign backers in the Gulf. Now all seemed jolly good before dear field marshal started to increasingly demonstrate propensity to get allied with Russia and China. And that’s a no go, especially now with the enlarged Suez canal and Syrian operation in the hood. So the west/gulfies shot a double as they downed the russian airliner via some bearded nobody, mind you no candles and “we are russia” on mainstream news this time 24/7. Once Russia got spanked for its latest assertivness, twice Al-Sisi was overnight presiding over former turist destination plus this will cripple many of the western based investment projects as well. So, what’s the local COG to do now with it, lets watch, there are only two main options for the long run: receive bombardment into stone age or keeping on as clubmed-gulf linkage citadel for fareast interests.
German Interior Minister Says Suicide Bomber’s Syrian Passport “May Have Been Planted”
As we reported extensively over the weekend, the biggest false flag clue that has emerged so far from the Paris attack was the discovery of a fake, fully intact Syrian passport next to one of the suicide bombers. The question which we posed is who would benefit from this and whether the authorities would entertain such a “preposterous” suggestion
It appears the answer is yes. Overnight none other than the German Interior Minister Thomas de Maiziere said that the “Syrian passport found next to a suicide bomber in the Paris terror attacks may have been planted.”
Bloomberg adds that reports that the identity in the passport may have been registered in several countries along the so-called Balkan route raise the suspicion that it could be a deliberate attempt to implicate refugees and “make people feel unsafe,” de Maiziere said.
“There are indications that this was a planted lead, but it still can’t be ruled out that this was indeed an IS terrorist posing as a refugee,” he told reporters in Berlin on Tuesday, referring to Islamic State, which France blames for organizing the violence.
Any link between France’s worst terror attack since World War II and Europe’s refugee crisis would raise the stakes for Chancellor Angela Merkel as she defends her open-door policy for asylum seekers in Germany’s debate over immigration and security.
“It’s certainly unusual that such a person would have been faithfully registered in Greece and Serbia and Croatia, while we’re constantly pressing for registration and aren’t happy that it isn’t happening to the necessary extent,” de Maiziere said.
And with that the story on whether the passport was “planted” by someone else is effectively closed.
The only open question remaining: who was so quick to plant the passport in the aftermath of the suicide bombing, and just whose agenda is in play?
http://www.zerohedge.com/news/2015-11-18/german-interior-minister-says-suicide-bombers-syrian-passport-may-have-been-planted
It is always about money. I would say the Golan oil sort of owned by the hard core neo-cons of the US Dick Chaney included. My vote Dick Chaney with help from his friends.
Dolph — is this article a lie?
WTI Crude Plunges Below $40 – Erases Post-Paris Gains
Massive excess supply, storage filling rapidly, production near record levels all appear to be trumping any ‘war’ premium as WTI has now erased all of the post-Paris gains after DOE confirmed surging inventories continue…
http://www.zerohedge.com/news/2015-11-18/wti-crude-plunges-below-40-erases-post-paris-gains
What was the price of oil in 1998?
What was the cost (in dollar terms and energy terms) to extract a barrel of oil in 1998 vs today?
A buck and a half.
you can just google the question
http://blogs-images.forbes.com/danielfisher/files/2015/01/eia-oil-price.jpg
Of course this is made up — oil is $150 per barrel — but the Elders want people to feel better so they tell everyone is it $40
I think it was something like $11.70…. and I believe it went to $147 in 2007 … I think it’s $40 now…
But I am not sure — because you say it’s all a pack of lies… that it is impossible for the price of oil to deflate….
Top List of crude oil net import balance, each step down roughly 5-6MMbb:
1. Far East-Asia
2. Europe
3. US
That will clear some questions why the world looks and works as it is of today and most likely will continue for the near term incl. consequences on all fronts.
http://euanmearns.com/opec-cant-win/
Mind you the number #3 has the capability to blackmail all the others in terms of global finance/reserve system “stability” maintanance and willy nilly forcing global triage i.e. bombing fossil energy consuming countries into stone age therefore leaving the energy capacity for prolonging the debt structure mechanism. Also it skipped two last world wars in terms of its population tasting the real smell of wide spread destruction, so very trigger happy layer of decision making not discounting “limited” nuclear war to keep the status for longer..
America Is Charlie Sheen: CDC “Alarmed” At 20 Million New STD Cases Spike
Charlie Sheen’s announcement that he is HIV positive has created a huge uproar as critics attack him from every direction, but the truth is that Charlie Sheen is simply a reflection of our society as a whole.
You see, the truth is that it isn’t just big Hollywood stars that are engaged in risky sexual behavior. According to the CDC, there are 110 million cases of sexually-transmitted disease in America today, and another 20 million STD cases are added to that total every year. The United States has the highest STD infection rate in the entire industrialized world, and more than half of all Americans will have a sexually-transmitted disease at some point during their lives…”the increases are quite alarming.”
http://www.zerohedge.com/news/2015-11-18/america-charlie-sheen-cdc-alarmed-20-million-new-std-cases-spike
The Kardashian Lifestyle that so many try to emulate — won’t mix well with a collapse scenario ….
Forget Mad Max and the handsome protagonist….. the post collapse world will be one of syphilitic insanity and deformation:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2261454/
A boy suffering from congenital syphilis.
The suffering this illness caused in pre-penicillin eras was completely excruciating. Approximately 15 percent of the entire population of Paris was believed to carry the disease by the end of the 19th century.
Syphilis was shameful in these times, as many men got it from prostitutes working at brothels and whorehouses – symbols of decadence and debauchery in the public eyes – where it roamed free and untamed. Many people suffered in silence for whole lifetimes, subjecting themselves to treatments as horrible, prolonged and dehumanizing as the sickness itself.
Syphilis does not necessarily kill you right away; many lived with their horrible syphilitic terror for 40 years or more. A most sinister, detailed account for it in can be found in the diary later published as La doulou: extraits du journal d’Edmond de Goncourt, describing french writers Alphonse Daudet’s gruesome ordeal in late 1800’s France.
https://36.media.tumblr.com/e8b26197c82d07e4189016ca16e2a408/tumblr_mt9dpsdLRM1sgfc7oo1_500.jpg
Still, always look on the bright side of life: suffering from TB, the profound highs and lows it provokes, has produced some great art…..
I’vee been saying for years, that writers/commenters on this subject completely gloss over the health problem—that somehow we can ‘downsize’ while still retaining a fully functioning healthcare system
the dominant species on the planet isn’t us—it’s bacteria.
Theyve been around for 2 billion years, weve been here about 5 million years
If they disappeared we would all be dead in a week—if we disappeared, bacteria wouldn’t even notice. To them we are just prairies.
Our efforts to control bacteria have brought about mutations of stronger and more deadly strains. Once our hydrocarbon fuelled defences are down, they will return with a vengeance to cull our numbers, just as they always did, to the sustainable level that they and the planet can tolerate.
This is why the four horsemen have their own pecking order–War–then famine–then pestilence then finally death. Each follows the one before.
We spent the last 2 centuries demanding more, bacteria may be the final arbiter of what we can or cannot have, declaring war on them was perhaps the ultimate folly.
Ive tried to offer a warning about it in The End of More, http://www.amazon.co.uk/dp/B00D0ADPFY
it only offers warnings, not solutions. I wish I could think of one but whichever way you twist and turn this plot, the end always seems the same.
Still, it’s been a pleasant oilparty—lots of interesting games.
I think Newton said this: For every action there is an equal and opposite re-action.
‘Once our hydrocarbon fuelled defences are down’
The word that comes to mind is — vengeance….
Good comment.
Yeah EofM, you can’t fool mother nature and apparently that credo includes bacteria. By launching a full offensive against bacteria within the human body, the mistake was doing so on behalf of the body. In other words we didn’t produce those anti-bodies naturally, but instead they were introduced via pills and all that has done is make the bacteria stronger and in the long run our immune systems more vulnerable. The only way to improve the long term metric between human body and bacteria was probably to genetically modify our immune systems to be stronger, then the fight would be coming directly from the body and even in the absence of pills we could more likely fight off infections, but more importantly we would not have initiated a battle with bacteria which forced them to become more deadly. But unfortunately what we did in effect was to buy a few decades of greater health along with a huge population increase, while the bacteria mutated and in the long run we will be much worse off fighting super strains of microbes, and in the face of a post collapse scenario with little if any antibiotics available be thrown open to bacterial assaults. Got a deep open cut – fear for your life!
Thanks Stilgar, I never thought of antibiotics like that. We certainly got a lot of things wrong during our quest to extend life spans. Wrong because as you intimated, we placed our advances in the hands of perpetual growth, infinite resources and our own hubris.
Maybe if oil was shown in the beginning to be finite resource, we would acted with a little more responsibility. Now we collectively suffer from normality bias and there’s no gentle way back.
Has anyone noticed that the bar has been raised tremendously in terms of the quality of comments on FW since someone posted a rant about the need to drive off the drum thumping Solar Jesus / EV Koombaya’ists who were over running FW with endless repetitive nonsensical comments….
It is nice to log on and not have to delete 80% of the comments without reading them….
FW: best blog in the world 🙂
Also helps that the topic is not electricity. The topic gets all of the “electricity will save us” types excited.
Update….pulling the string ever tighter
Updated Nov. 19, 2015 9:46 a.m. ET
http://www.wsj.com/articles/ecb-minutes-cast-doubt-over-effectiveness-of-stimulus-1447936787
FRANKFURT—European Central Bank officials were concerned at last month’s policy meeting that their stimulus measures hadn’t gained enough of a foothold in the European economy, according to the minutes of that meeting, prompting them to signal that more easy money steps were a strong possibility to keep inflation from staying too low for too
….
Mr. Draghi’s reference to December spurred expectations among economists that the bank would expand or extend its €60 billion a month bond-buying program—currently expected to run through September 2016—and reduce its -0.2% deposit rate. A negative deposit rate means banks are effectively charged for parking surplus funds with the ECB, which may encourage them to raise their lending to households and companies
Do whatever it takes,
Right on!
“which may encourage them to raise their lending to households and companies”
More share buy-backs on the way!
“Having suffered a little recently on the heels of retailer concerns, Nike – the best performer in The Dow this year – is surging back towards all-time record highs after unleashing a new share buyback program (upping the limit from $8bn to $12bn), a stock split and a dividend boost…”
http://www.zerohedge.com/news/2015-11-19/nike-just-did-it
The end will be epic.
Imagine this …. https://richkweightlifting.files.wordpress.com/2014/07/clean-and-jerk.jpg
With someone adding additional weights to the bar…. one after another….
All happening over a floor made of glass…
http://www.structural-glass.com/wp-content/uploads/2015/01/Rooflight_cut.jpg
If it is not working, do more of it! I wonder how negative the deposit rate can get. I suppose the upper bound is -100.0%; in other words, just take all of the depositor’s money. If more is better, this should be the ideal!
If the economy is not growing with a 0% interest rate, that tells me there is no headroom left in the amount of net energy available to the economy.