Economists have put together models of how an economy works, but these models were developed years ago, when the world economy was far from limits. These models may have been reasonably adequate when they were developed, but there is increasing evidence that they don’t work in an economy that is reaching limits. For example, my most recent post, “Why ‘supply and demand’ doesn’t work for oil,” showed that when the world is facing the rising cost of oil extraction, “supply and demand” doesn’t work in the expected way.
In order to figure out what really does happen, we need to consider findings from a variety of different fields, including biology, physics, systems analysis, finance, and the study of past economic collapses. Since I started studying the situation in 2005, I have had the privilege of meeting many people who work in areas related to this problem.
My own background is in mathematics and actuarial science. Actuarial projections, such as those that underlie pensions and long term care policies, are one place where historical assumptions are not likely to be accurate, if an economy is reaching limits. Because of this connection to actuarial work, I have a particular interest in the problem.
How Other Species Grow
We know that other species don’t amass wealth in the way humans do. However, the number of plants or animals of a given type can grow, at least within a range. Techniques that seem to be helpful for increasing the number of a given species include:
- Natural selection. With natural selection, all species have more offspring than needed to reproduce the parent. A species is able to continuously adapt to the changing environment because the best-adapted offspring tend to live.
- Cooperation. Individual cells within an organism cooperate in terms of the functions they perform. Cooperation also occurs among members of the same species, and among different species (symbiosis, parasites, hosts). In some cases, division of labor may occur (for example, bees, other social insects).
- Use of tools. Animals frequently use tools. Sometimes items such as rocks or logs are used directly. At other times, animals craft tools with their forepaws or beaks.
All species have specific needs of various kinds, including energy needs, water needs, mineral needs, and lack of pollution. They are in constant competition with both other members of the same species and with members of other species to meet these needs. It is individuals who can out-compete others in the resource battle that survive. In some cases, animals find hierarchical behavior helpful in the competition for resources.
There are various feedbacks that regulate the growth of a biological system. For example, a person or animal eats, and later becomes hungry. Likewise, an animal drinks, and later becomes thirsty. Over the longer term, animals have a reserve of fat for times when food is scarce, and a small reserve of water. If they are not able to eat and drink within the required timeframe, they will die. Another feedback within the system regulates overuse of resources: if any kind of animal eats all of a type of plant or animal that it requires for food, it will not have food in the future.
Energy needs are one of the limiting factors, both for individual biological members of an ecosystem, and for the overall ecosystem. Energy systems need greater power (energy use per period of time) to out-compete one another. The Maximum Power Principle by Howard Odum says that biological systems will organize to increase power whenever system constraints allow.
Another way of viewing energy needs comes from the work of Ilya Prigogine, who studied how ordered structures, such as biological systems, can develop from disorder in a thermodynamically open system. Prigogine has called these ordered structures dissipative systems. These systems can temporarily exist as long as the system is held far from equilibrium by a continual flow of energy through the system. If the flow energy disappears, the biological system will die.
Using either Odum’s or Prigogine’s view, energy of the right type is essential for the growth of an overall ecosystem as well as for the continued health of its individual members.
How Humans Separated Themselves from Other Animals
Animals generally get energy from food. It stands to reason that if an animal has a unique way of obtaining additional energy to supplement the energy it gets from food, it will have an advantage over other animals. In fact, this approach seems to have been the secret to the growth of human populations.
Human population, plus the domesticated plants and animals of humans, now dominate the globe. Humans’ path toward population growth seems to have started when early members of the species learned how to burn biomass in a controlled way. The burning of biomass had many benefits, including being able to keep warm, cook food and ward off predators. Cooking food was especially beneficial, because it allowed humans to use a wider range of foodstuffs. It also allowed bodies of humans to more easily get nutrition from food that was eaten. As a result, stomachs, jaws, and teeth could become smaller, and brains could become bigger, enabling more intelligence. The use of cooked food began long enough ago that our bodies are now adapted to the use of some cooked food.
With the use of fire to burn biomass, humans could better “win” in the competition against other species, allowing the number of humans to increase. In this way, humans could, to some extent, circumvent natural selection. From the point of the individual who could live longer, or whose children could live to maturity, this was a benefit. Unfortunately, it had at least two drawbacks:
- While animal populations tended to become increasingly adapted to a changing environment through natural selection, humans tend not to become better adapted, because of the high survival rate that results from more adequate food supplies and better healthcare. Humans might eventually find themselves becoming less well adapted: more overweight, or having more physical disabilities, or having more of a tendency toward diabetes.
- Without a natural limit to population, the quantity of resources per person tends to decline over time. For example, such a tendency tends to lead to less farmland per person. This would be a problem if techniques remained the same. Thus, rising population tends to lead to constant pressure to raise output (more food per arable acre or technological advancements that allow the economy to “do more with less”).
How Humans Have Been Able to Meet the Challenge of Rising Population Relative to Resources
Humans were able to meet the challenge of rising population by taking the techniques many animals use, as described above, and raising them to new levels. The fact that humans figured out how to burn biomass, and later would learn to harness other kinds of energy, gave humans many capabilities that other animals did not have.
- Co-operation with other humans became possible, through a variety of mechanisms (learning of language with our bigger brains, development of financial systems to facilitate trade). Even as hunter-gatherers, researchers have found that economies of scale (enabled by co-operation) allowed greater food gathering per hectare. Division of labor allowed some specialization, even in very early days (gathering, fishing, hunting).
- Humans have been able to domesticate many kinds of plants and animals. Generally, the relationship with other species is a symbiotic relationship–the animals gain the benefit of a steady food supply and protection from predators, so their population can increase. Chosen plants have little competition from “weeds,” thanks to the protection humans provide. As a result, they can flourish whether or not they would be competitive with other plants and predators in the wild.
- Humans have been able to take the idea of making and using tools to an extreme level. Humans first started by using fire to sharpen rocks. With the sharpened rocks, they could make new devices such as boats, and they could make spears to help kill animals for food. Tools could be used for planting the seeds they wanted to grow, so they did not have to live with the mixture of plants nature provided. We don’t think of roads, pipelines, and lines for transmitting electricity as tools, but as a practical matter, they also provide functions similar to those of tools. The many chemicals humans use, such as herbicides, insecticides, and antibiotics, also act in way similar to tools. The many objects that humans create to make life “better” (houses, cars, dishwashers, prepared foods, cosmetics) might in some very broad sense be considered tools as well. Some tools might be considered “capital,” when used to create additional goods and services.
- Humans created businesses and governments to enable better organization, including division of labor and hierarchical behavior. A single person can create a simple tool, just as an animal can. But there are economies of scale, such as when many devices of a particular kind can be made, or when some individuals learn specialized skills that enable them to perform particular tasks better. As mentioned previously, even in the days of hunter-gatherers, there were economies of scale, if a larger group of workers could be organized so that specialization could take place.
- Financial systems and changing systems of laws and regulations provide additional structure to the system, telling businesses and customers how much of a given product is required at a given time, and at what prices. In animals, appetite and thirst determine how important obtaining food and water are at a given point in time. Financial systems provide a somewhat similar role for an economy, but the financial system doesn’t operate within as constrained a system as hunger and thirst. As a result, the financial system can give strange signals, including prices that at times fall below the cost of extraction.
- Humans have tended to put resources of many kinds (arable land, land for homes and businesses, fresh water, mineral resources) under the control of governments. Governments then authorize particular individuals and business to use this land, under various arrangements (“ownership,” leases, or authorized temporary usage). Governments often collect taxes for use of the resources. The practice is in some ways similar to the use of territoriality by animals, but it can have the opposite result. With animals, territoriality is used to prevent crowding, and can act to prevent overuse of shared resources. With human economies, ownership or temporary use permits can lead to a government sanctioned way of depleting resources, and thus, over time, can lead to a higher cost of resource extraction.
Physicist François Roddier has described individual human economies as another type of dissipative structure, not too different from biological systems, such as plants, animals, and ecosystems. If this is true, an adequate supply of energy is absolutely essential for the growth of the world economy.
We know that there is a very close tie between energy use and the growth of the world economy. Energy consumption has recently been dropping (Figure 1), suggesting that the world is heading into recession again. The Wall Street Journal indicates that a junk bond selloff also points in the direction of a likely recession in the not-too-distant future.
Figure 1. Three year average growth rate in world energy consumption and in GDP. World energy consumption based on BP Review of World Energy, 2015 data; real GDP from USDA in 2010$.
What Goes Wrong as Economic Growth Approaches Limits?
We know that in the past, many economies have collapsed. In fact, if Roddier is correct about economies being dissipative structures, then we know that economies cannot be expected to last forever. Economies will tend to run into energy limits, and these energy limits will ultimately bring them down.
The symptoms that occur when economies run into energy limits are not intuitively obvious. The following are some of the things that generally go wrong:
Item 1. A slowdown in economic growth.
Research by Turchin and Nefedov regarding historical collapses shows that growth tended to start in an economy when a group of people discovered a new energy-related resource. For example, a piece of land might be cleared to allow more arable land, or existing arable land might be irrigated. At first, these new resources allowed economies to grow rapidly for many years. Once the population grew to match the new carrying capacity of the land, economies tended to hit a period of “stagflation” for another period, say 50 or 60 years. Eventually “collapse” occurred, typically over a period of 20 or more years.
Today’s world economy seems to be following a similar pattern. The world started using coal in quantity in the early 1800s. This helped ramp up economic growth above a baseline of less than 1% per year. A second larger ramp up in economic growth occurred about the time of World War II, as oil began to be put to greater use (Figure 2).
Figure 2. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.
Worldwide, the economic growth rate hit a high point in the 1950 to 1965 period, and since then has trended downward. Figure 2 indicates that in all periods analyzed, the increase in energy consumption accounts for the majority of economic growth.
Since 2001, when China joined the World Trade Organization, world economic growth has been supported by economic growth in China. This growth was made possible by China’s rapid growth in coal consumption (Figure 3).
Figure 3. China’s energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.
China’s growth in energy consumption, particularly coal consumption, is now slowing. Its economy is slowing at the same time, so its leadership in world economic growth is now being lost. There is no new major source of cheap energy coming online. This is a major reason why world economic growth is slowing.
Item 2. Increased use of debt, with less and less productivity of that debt in terms of increased goods and services produced.
Another finding of Turchin and Nefedov is that the use of debt tended to increase in the stagflation period. Since growth was lower in this period, it is clear that the use of debt was becoming less productive.
If we look at the world situation today, we find a similar situation. More and more debt is being used, but that debt is becoming less productive in terms of the amount of GDP being provided. In fact, this pattern of falling productivity of debt seems to have been taking place since the early 1970s, when the price of oil rose above $20 per barrel (in 2014$). It is doubtful that that economic growth can occur if the price of oil is above $20 per barrel, without debt spiraling ever upward as a percentage of GDP. It is supplemental energy that allows the economy to function. If the price of energy is too high, it becomes unaffordable, and economic growth slows.
Figure 4. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods. See author’s post on debt for explanation of methodology.
China has been using debt to fund its recent expansion. There is evidence that it, too, is encountering falling productivity of additional debt.
We mentioned that appetite controls how much an animal eats. Debt helps control demand for energy products, and in fact, for products of all kinds in the economy. Appetite is different from debt as a regulator of demand. For one thing, debt can be used for an almost unlimited number of purposes, whether or not these purposes have any real possibility of adding GDP to the economy. (This is especially true if interest rates are close to 0%, or even negative.) There are few controls on debt. Governments have discovered that in some instances, debt stimulates an economy. Because of this, governments have tended to be very liberal in encouraging growth in debt. Often, when a debtor is near default, this problem is hidden by extending the term of the loan and pretending that no problem exists.
With respect to biological organisms, energy is often stored up as fat and used later when there is a shortfall of energy. This is the opposite of the way financing for human “tools” generally works. Here financing is often obtained when a tool is put into operation, with the hope that the new tool will pay back its worth, plus interest, over the life of the tool. Much debt doesn’t even have such a purpose; sometimes it is used simply to make an expensive object easier to purchase, or to give a young person (perhaps with poor grades) an opportunity to attend college. When debt has such poor regulation, we cannot expect it to work as reliably as biological mechanisms in feeding back information regarding true “demand” through the price system.
Item 3. Increased disparity of wages; non-elite workers earning less.
Item 3 is another problem that Turchin and Nefedov encountered in reviewing economies that collapsed. One of the reasons for the increased disparity of wages is the increased need for hierarchical relationships if an economy wants to work around a shortfall in goods and services by adding new “tools”. Businesses and governments need to grow larger if they are to accommodate these more complex processes. In such a case, the natural tendency is for these organizations to become more hierarchical in nature. Also, if there is growth, followed by a temporary need to shrink back, the cutbacks are likely to come disproportionately from the lower ranks of workers, reinforcing the hierarchical structure.
Figure 5. Chart by Pavlina Tscherneva, in Reorienting Fiscal Policy, as reprinted by the Washington Post.
Funding arrangements for the new “tools” to work around shortages add to the hierarchical behavior. Typically, businesses must expand to fund the development of the new tools. This expansion may be funded by debt, or by stock programs. Regardless of which approach is used for funding, the programs tend to funnel an increasing share of the wealth of the economy to the wealthier members of the economy. This happens because interest payments and dividend payments both go disproportionately to benefit those who are already high up on the wealth hierarchy.
Furthermore, the inherent problem of fewer resources per person is not really solved, so an increasingly large share of jobs become “service” jobs, using only a small quantity of energy products, but also providing little true benefit to the economy. The wages for these jobs are thus low. The addition of these low-paid jobs to the economy further reinforces the hierarchical nature of the system.
In a sense, what is happening is that the economy as a whole is growing very little in output of goods and services. An ever-larger share of the output is going to the wealthier members of the economy, because of increased hierarchical behavior and because of growth in debt and dividend payments. Non-elite members of the economy find their wages falling in inflation adjusted terms, because, in a sense, the productivity of their labor as leveraged by a falling amount of energy resources is gradually contracting, rather than increasing. It becomes increasingly difficult for the low-paid members of the economy to “pay the wages” of the high-paid members of the economy, so overall demand for goods and services tends to contract. As a result, the increasingly hierarchical behavior of the economy pushes the economy even more toward contraction.
Item 4. Increased difficulty in obtaining adequate funding for government programs.
Governments operate on the surpluses of an economy. As an economy finds itself in a squeeze (job loss, more workers with lower wages, fewer goods and services being produced), governments find themselves increasingly called upon to deal with these problems. Governments may need larger armies to try to obtain resources elsewhere, or they may be needed to build a public works project (like a dam, to get more water and hydroelectric power), or they may need to make transfer payments to displaced workers. Here again, Turchin and Nefedov found governmental funding to be one of the problems of economies reaching limits.
Energy products are unique in that their value to society can be quite different from their cost of extraction. A third value, which may be different from either of the first two values, is the selling price of the energy product. When the cost of producing energy products is low, the wide difference between the value to society and the cost of extraction can be used to fund government programs and to raise the wages of workers. In fact, this difference seems to be a primary reason why economic growth occurs. (This difference is not recognized by most economists.)
As the cost of extraction of energy products rises, the difference between the value to society and the cost of extraction falls, because the value to society is pretty close to fixed (except for changes taking place because of energy efficiency changes), based on how far a barrel of oil can move a truck or how many British thermal units of energy it can provide. As the cost of energy extraction rises, it becomes increasingly difficult to obtain enough tax revenue, either from taxing energy products directly, or from taxing wages. Wages tend to reflect the energy consumption required to support each job because supplemental energy acts to leverage the abilities of workers, and thus improves their productivity.
Energy selling prices may behave in a strange manner, as an economy increasingly reaches limits. Falling prices redistribute what gain is available, so that energy importers get more, while energy exporters get less. Of course, the problem we are now seeing is that oil exporting countries are having difficulty obtaining sufficient revenue for their programs.
Debt is different this time
This time truly is different. We should have learned from past experience that debt tends not to be very permanent; it often defaults. We should therefore expect huge periods of debt defaults, and we should expect to need frequent debt jubilees. Economist Michael Hudson reports that the structure of debt was very different in the past (Killing the Host or excerpt). In early times, he found that by far the major creditors were the temples and palaces of Bronze Age Mesopotamia, not private individuals acting on their own. Because of the top-down nature of the debt, it was easy for the temples and palaces to forgive debt and restore balance to the social structure.
Now, especially since World War II, there is a new belief in the permanency of debt, and about its suitability for funding insurance companies, banks, and pension plans. The rise in economic growth after World War II was important in this new belief in permanency, because without economic growth, it is extremely difficult to pay back debt with interest, unless debt is used for a truly productive purpose. (See also Figures 2 and 4, above)
Figure 6. Ngram showing frequency of words over a period of years, by Google searches of a large number of books. Words searched from top to bottom are “economic growth, IRA, financial services, MBA, and pension plans.”
The Ngram chart above, showing the frequency of word searches for “economic growth, IRA (Individual Retirement Accounts), financial services, MBA (Master of Business Administration), and pension plans” indicates that economic growth was essentially a new concept after World War II. Once it became clear that the economy could grow, financial services began to grow, as did the training of MBAs. Pension plans grew at first, but once companies with pension programs found that it was difficult to keep them adequately funded, there was a shift to IRAs. With IRAs, employees are expected to fund their own retirements, generally using a combination of stock and debt purchases.
Now that debt is “reused” and integrated into the economy, it becomes much more difficult to forgive. We have a situation where insurance companies, banks, and pension plans are all tied together. They all depend on the current economic growth paradigm, including use of debt with interest, continued dividend plans, and rising stock market prices. We have a major problem if widespread debt defaults start.
Demographic Bubble
The other problem we are up against, making government funding even more difficult than it would otherwise be, is the retirement of the baby boomers, born soon after World War II. This by itself would be a problem for maintaining adequate government funding. When it is added to multiple other problems, including bailing out banks, insurance companies, and pension plans if there are debt defaults, the demographic bubble leaves us in much worse shape than economies that reached limits in the past.
Note that High Energy Prices Are Not on the List of Expected Problems
The idea that as we approach limits, we should expect ever-higher energy prices, is simply not true. It should be viewed as a superstition, or as an erroneous understanding of our current situation, based on a poor model of energy supply and demand. Turchin and Nefedov found evidence of spiking food prices, perhaps similar to the spiking we saw in energy prices as we approached the peak in prices in 2008. But with wages of non-elite workers falling too low, especially on an after-tax basis, it was hard for prices to continue to spike.
The idea that collapse can come from low prices, rather than high, is something that is not obvious, unless a person thinks through the situation carefully. Prices seem to be primarily influenced by two factors:
(1) Wages of non-elite workers. These wages are important because there is such a large number of them. If their wages are high enough, they buy homes, cars, and other products that are big users of commodities, both when they are made, and as they are operated.
(2) Increases or decreases in the amount of debt outstanding. If debt defaults start to rise, it is very easy for growth in the quantity of debt outstanding to slow, or even to fall. In such a case, low commodity prices, rather than high, become a problem. As economic growth slows, we should expect more debt defaults, not fewer. There is also a limit to how high Debt/GDP ratios can rise before many suspect that the world economy functions much like a Ponzi Scheme.
Mark Twain wrote, “It ain’t what you know that gets you in trouble. It’s what you know for sure, that just ain’t so.” This is especially a problem for academic researchers who depend on the precedents of past academic papers. A researcher may have come to a conclusion years ago, based on a narrow set of research that didn’t cover today’s conditions. The belief can get carried forward endlessly, even though it isn’t really true in today’s situation.
If we are going to figure out the real answer to how the economy operates, we need to look closely at indications from many areas of research. Such an approach can allow us to see the situation in a broader context and thus “weed out” firmly held beliefs that aren’t really true.
Hello Gail
Thanks for another insightful and well constructed post. The part about wage disparity attracted my attentions as well as others however, do you plan to expand on that subject? also in regards to affordability issues I undesrtand that you point out this problem to diminishing returns, there are few ways to find how fast we are approaching this problem besides the financial information regarding oil and mining companies mixed with BAU financial assumptions of another economic cycle. Is this correct? or what other direct indicators (to the oil companies) would be worth watching to asses how bad are the dimishing returns. I guess the definitive proof would be a major shut down of big industries.
Thank you.
The big issue is that we have a lot of systems connected. In particular, if wages of non-elite workers are not rising much (or are falling) and debt is not rising much, it tends to pull commodity prices down. This will eventually cause debt crashes.
I am not sure how much more information I could find on wage disparity–except, of course, sending jobs to lower and lower wage countries, is a major cause of wage disparity. People who drop out of the work force completely in high wage countries are part of the wage disparity as well.
How bad the diminishing returns are of oil and mining companies right now gets overwhelmed by falling prices. If oil companies need $150 barrel, but are getting $35, the disparity is terrible, whether $150 stays at $150 or goes to $155.
The worry is that the financial system won’t hold up. I suppose there could be shutdowns of whole industries as well. All of these things are tied together.
I wouldn’t go so far as to say that TPTB control who is President. Though, the 2000 and 2004 elections were definitely suspicious.
Rather, it’s about controlling whoever is in there, once they are elected.
While the right wing sees Trump as a finger to the establishment, his real power, if elected, will be effectively zero. The game is run by the banks/corporations/MIC. And we know what they want: infinite war, infinite debt. As long as Trump goes along with this (which he will), they will let him sit in office without doing to him what they did to Kennedy, who was the last President to openly challenge them.
I suppose they don’t care who is president …. because only an idiot would attempt to challenge them once in office… there is no winning that battle (and it could get you a bullet in the head…)
Better to be a good boy or girl — then at the end of your gig — reap the rewards.
I’m not sure idiot is the right word, JFK was installed into politics as an insider (as daddy reached some elevated levels of the structure), later at some point kicked out even the faction which in early years nominated/tolerated him within the ruling club, based on the events most likely the “fed boys” just asked “mic-cog” guys to clean up the problem asap before it seriously gets out of hands. You have to look at it also in terms of the post WWII 50/60s culture tsunami, people believed the world could be made a different place this time. Well, it didn’t work.
I think its no coincidence that the 60s “culture Tsunami” coincided with peak fossil fuel. While there were no permanent culture changes I question whether it would make one whit of difference considering our situation if there was a complete culture shift . Most I know from that era are complete humanists and have their head completely in the sand regarding our dependance on fossil fuel. Most all eithor believe that things like PV can replace fossil fuel or there are other “suppressed technologies” that can provide limitless energy. When the physics of these beliefs are questioned they become quite agitated/ angry. While Im sure the 60s were a lovely time to be alive in the end the culture was at least as delusional as the one they rebelled against if not more.
Rather, as I see it, having lived during that era of the back to the land movement,/communes, Whole Earth Catalog, Mother Earth News, early environment movement, zero population growth, more group awareness of what needed to be addressed
Good point! I am sympathetic to those movements from a emotional base. however those movements even if they had caught like wildfire would not have made one whit of difference in our current situation. i suppose if the whole world spontaneously stopped having children that would be a real solution. There is no indicator of that occurring while we live the luxurious lifestyle afforded by fossil fuels. We harvest and we spawn, that is what we are. The movements you mention might reflect a yearning for a change in what we are however and that is why I am sympathetic to them. Unrealized change is less than nothing.
Basically, we are speaking of sub-cltures, some of what I listed morphed into what is now termed “Permaculture”. The thing is there is a bell curve and a portion of it was that segment. Perhaps natures way of diversification that is a specie survival strategy.
As Mick Jagger spoke of the 60’s in a demeaning judgement
“We dressed up”. …all fluff.
Hopefully we make it to the next election — it would be so fitting to have Donald Trump in office to preside over the end of this bad joke …
A court jester as the figurehead of the court 🙂
Donald J. Trump
✔
@realDonaldTrump
Dopey Prince @Alwaleed_Talal wants to control our U.S. politicians with daddy’s money. Can’t do it when I get elected. #Trump2016
Ironically, as The Hill reports,
Bin Talal told The Economist in 1999 that he started his business with a $30,000 loan from his father and by mortgaging a house his father had given him for $400,000.
Trump, the son of a wealthy real estate developer, has said he received a “small” $1 million loan from his father after he graduated from college in 1968. Forbes estimates his net worth at $4.5 billion.
http://www.zerohedge.com/news/2015-12-13/donald-responds-dopey-daddys-boy-saudi-princes-slur
The madness builds….
Perhaps the time has come, while the worship of the corporation is already overt and beyond question trump is the next step. As don so aptly stated the phrase from the simon and garfunkel tune ‘and the people bowed and prayed to the neon god they made’. While the corporations already own the government perhaps the time has come for them to be openly declared king of kings. The wicked witch from the left is easily two or three times as smart as trump but her body language and tones communicate that she is one angry lady. She has a good chance of winning because Im sure the MIC see in her what I see- this gal wants to blow shit up like no prez we have ever had before. It is a tough choice I am sure for the people who actually decide who is president but I think the potential of anger so great it can barely be suppressed combined with unmatched self righteous arrogance will win out over Rodney Dangerfield in the end.
It amazes me that we go through this same silly game month after month — when it has been pointed out that even a slight rate rise would likely collapse the financial system.
Hilsenrath Just Reset Market Expectations: “Fed Is Worried Rates Will End Up Right Back At Zero”
Submitted by Tyler Durden on 12/13/2015 – 16:18
“In short, the age of unconventional monetary policy begun by the 2007-09 financial crisis might not be ending.” – Jon Hilsenrath
http://www.zerohedge.com/news/2015-12-13/hilsenrath-just-reset-market-expectations-fed-worried-rates-will-end-right-back-zero
Quote from article,
“Actually, there is one time when the Fed waited this long to tighten conditions, in fact waited too long: the economy was already in recession. That was back in 1936. What happened next was the second part of the Great Depression and a 50% collapse in the Dow Jones.”
It doesn’t seem like people learn.
Miners Shoveling Furiously Prop Up Australia as Iron Ore Melts
The price of Australia’s top export has been almost slashed in half this year. That makes it all the more surprising economists increasingly see iron ore propping up growth as they assemble their 2016 forecasts.
The reason: Australian producers are making up for the price destruction by doubling down on volume, in the process worsening a global supply glut. There’s even a new entrant to the market — Gina Rinehart, Australia’s richest person, last week oversaw her company’s first shipment of iron ore to South Korea.
The surging exports are also papering over a massive drag on the economy from collapsing mining investment and could account for most of next year’s growth, according to Citigroup Inc. and Goldman Sachs Group Inc. Still, the fall in commodity prices will hurt fiscal revenue, making it more difficult for the government to pare back a deficit and reach its goal for a surplus by the end of the decade.
http://www.bloomberg.com/news/articles/2015-12-13/miners-shoveling-furiously-prop-up-australia-as-iron-ore-melts
Not good!
The bust-up of Australia’s la-la economy is going to be epic!
“One of the nation’s largest banks has recorded significant increases in customers making minimum interest only repayments, shifting from 32 percent of their customers doing this in February to an alarming 68 percent now.”
http://goo.gl/mLfSGl
Amazingly rapid change!
It now appears that the property boom is over, but prices will continue to levitate upwards, propelled by a magical unicorn…
http://images.sodahead.com/polls/003571013/5732961536_I_Can_Poop_a_Rainbow_by_venkman_project_xlarge.jpeg
The good news is that there is still expected to be growth in new home building and renovation, but not much – 2 per cent next financial year compared with a fat 8.5 per cent this year. But keep in mind that the trend measure for dwelling approvals has been falling for seven months in a row.
So without strong home building, what’s supposed to lift economic growth?
There is faith in real consumer spending continuing to rise by a quarter percentage point a year, despite flat real wages growth. That means continuing reliance on Australians reducing their savings ratio – something that was easy to do when the wealth effect of higher housing prices was helping, but might not be so easy when that’s no longer the case for most folks.
And then there are those missing animal spirits that are supposed to drive non-mining investment. That’s the big one, the missing ingredient for a successful, sustainable transition.
Read more: http://www.theage.com.au/business/the-economy/myefo-budget-update-treasury-calls-it–housing-boom-over-20151215-glo334.html#ixzz3ueO3LI6j
It is hard to believe anything will be growing very much in Australia, with mining down so much. And the outlook for mining still looks very bad. http://www.businessinsider.com.au/macquarie-bank-desperation-not-demand-will-be-the-theme-for-commodities-in-2016-2015-12
In the United States, I understand that prices for commercial real estate are very high. Prices on homes are pretty high too, partly because there aren’t many first-time homeowners in the market, so the properties that exchange hands are high-priced. If interest rates go higher, and this spreads to real estate, we could see a big drop in prices.
I don’t know about the U.S. but in Australia property prices are at all-time highs because Treasury has lowered interest rates to all-time lows and has basically boxed itself into a corner where it can never really raise interest rates again. Sound familiar? I find this drive to the bottom of the barrel by central banks worldwide as proof that growth has finally ended and that only through market manipulations like this is the semblance of normality preserved, for now. Should be spectacular to watch it when it crashes.
I am afraid you are right!
Dear Finite Worlders
On many occasions I have mentioned the issue that BW Hill’s model, whether right or badly mistaken, is dependent on the world economy NOT suddenly getting more energy efficient. If you look at the comments in this post, you will see Hill talk about the potential for regional oil production systems surviving after the current global system collapses:
http://peakoil.com/production/opec-cannot-kill-shale-oil/comment-page-3#comment-228331
In one of his comments he also talks about people adapting to a lower standard of living. So he is hypothesizing both a more efficient production system and also an economy which is using oil more efficiently.
Don Stewart
Yes Don, however, in spite of efforts to improve efficiency and accept a lower standard of living, that won’t stop the march of diminishing returns. The whole schmole still descends.
Stilgar
If you read the comments, you know that BW Hill claims to have been in discussion with investors on the notion of simpler, regional oil and gas operations. I am not an oil man, and have no details on what he might be thinking. But it is true that ‘cash cow’ principles are widely understood in corporate executive suites. The whole financial focus changes from growth and opportunities to shrinkage and cash conservation. There is a vast infrastructure which already exists to keep producing from stripper wells. There used to be small, very local refineries. I read not too long ago that some very primitive oil operations from many decades ago still operate in Russia.
We can similarly think about the rest of the economy. How much would we spend on health care if we were bankrupt, like Greece, and were taken over by the Germans?
If the savings in the oil patch plus the savings in the general economy are large enough, it changes things. It does not return the glorious days of growth, but perhaps it delays some of the more drastic consequences?
Don Stewart
I think your right bout diminishing returns. I think we have reached the limits of efficiency improvements to stave off the effects of diminishing returns. Once the effects of diminishing returns really kicks in, deflation will likely be the result.
That’s was a fine discussion, quoting from Davy on Sun, 13th Dec 2015 7:31 am:
“We can substitute oil’s “declining value” by using other fossil fuels or alternative energies. We can use animal and human labor. We can realize vast wealth inequality with a two tier society with the elites using oil and the serfs in a postindustrial hybrid society of preindustrial technologies and lifestyles. In other words we will see an oil based man use oil even as his civilization decays. He will use oil even as it kills himself.”
Pretty much the same we mentioned here numerous times, it will be a mandated patchwork out of necessity. Some vertically integrated science-industrial parks will soldier on for the MIC/COG-GOV, think about it in terms of early/proto feudal monasteries guarding the civilization knowledge and best tools (e.g. weather sats), and on the other hand vast impoverished people out there patching various low tech fossils (e.g. open pit brown coal) and renewables but for much lower level of consumption, overall low tech industrial activity, plus permaculture approach where applicable etc.
Not a bad outcome if you can keep it for several more decades, perhaps few centuries..
Obviously for many remembering the old days of frivolous plenty it will be pure hell on Earth..
As Fast Eddie is for eastern europe he should check out some remote areas where just this happens. In Romania or Bulgaria or Poland, in the capital you get all the toys you want from the western lifestyle. On the land people are moving stuff with a donkey or a horse. That system works as long the trickle down effect is in place. I bet that the difference in resource usage might well be at 1/7 for rural / city life. The people on the land can cope with that while some money flows through the system and some energy. A very simple lifestyle is possible, but if you really want to see how this plays out you must go visit a farmer there and check his real living standard. That vision can not be communicated as a goal of frugality. It has to be enforced!
About 40 plus years ago, a young couple, Drew and Loiuse Langsner, drove in those back roads of Eastern Europe to document and take photos of these peasant communities.
This turned into their first book titled Handmade (Vanishing Cultures of Europe and the Middle East), which I own a copy and recommend it highly
http://www.amazon.com/Handmade-Vanishing-Cultures-Europe-Near/dp/0517514214/ref=asap_bc?ie=UTF8
Contents:
Balkan Architecture (of the vernacular sort)
Goat Herding
Balkan Cooking
Turkish Farm Villages
BISMI ‘LLAHI (which I think means “hospitality” – it includes a number of recipes)
Bake Ovens
Brush, Reeds and Withes
Glimpses of Universal Energy (wind & water mills)
A Gallery of Scandinavian Architecture (vernacular)
Alpine Architecture of Switzerland
Alpine Dairy Farming
Alpine Cuisine
DER SCHWEIZER KUFER (the Swiss cooper)
The book also includes many clear, helpful drawings and diagrams.
Having been published in 1974, it’s sadly probable that many of the crafts and skills still practiced then are, by now, gone.
This book is a gem.
They then went off to North Carolina, bought a homestead in Marshall and started a craft school
Country Workshops
http://countryworkshops.org
COUNTRY WORKSHOPS …The woodworking school that focuses on traditional craftsmanship with hand tools. Started in 1978 by Drew Langsner
I, myself, attended a weeklong workshop in Windsor Chair making back in 1995!
Still have the chair to this day. Gail, one couple in the class had no woodworking experience and yet the wife crafted on of the finer examples of Saddle Back Windsor!
Even if one doe not attend, his website offers books, DVDs and hard to find tools to preform those in day past before BAU
We have some chairs that my husband’s grandfather made, and I have seen some tables he made. He lived in North Carolina.
In many ways, the things he made were very nice. The problem was that as an amateur, he didn’t do things quite right. The legs on the table were too long and spindly, and didn’t hold up well. Some of the wood was not allowed to dry out sufficiently, so it warped.
It is great if people can make furniture, but doing it right isn’t necessarily as easy as it looks.
Good point, Gail! These “craftsman of necessity”, as I once heard them called, had a remarkable knowledge of the materials they were working with and the dynamics of the “curing” process. The country folk selected different woods for different parts, like soft poplar for the seat blank, red oak for the seat back to steam it curve, hard maple for the legs and rungs for durability. Also, they placed the direction of the grain of the piece of wood selected to factor the expansion and contraction because of changes in humidity.
Fascinating’ one chair maker described it as high tech design. We do not give credit to these people, some Windsor chairs are hundreds of years old and still in use today.
I am reminded somewhat of Hitler’s plan for Eastern Europe, as set out in his tea-time talks: the German Higher Race in the towns, zipping up and down on the autobahn in their Volkswagens, while the Slavs were knee-deep in mud and manure. ‘We’ll let them come to the towns sometimes, on holidays, ha ha!’
Funny, who had the last laugh.
Indeed!
Although it is rather a pity that Hitler didn’t manage to squeeze the Scots into black leather kilts as he had planned. It would have been quite a sight, no doubt thrilling for some……
Hitler did have a flair for design and fashion. Too bad he did not have carrer opportunity to channel these talents. He even approved uniform styles for the military.
At the end in the last days of the bunker he threw up his hands away and wept “Politics! After I am gone you can deal with it.”
Of course we won’t see overnight benefits, but it’s hard not to be happy about the Paris Agreement. In times of unprecedented woe, the world has shown it can come together behind something that matters — and that something is climate change.
Nearly 200 nations, rich and poor alike, officially decided yesterday to slash emissions and aim for a global temperature target of “well below” a rise of 2 degrees Celsius above pre-industrial levels. In fact, everyone was in such a good mood that they said they would try to do even better than that and “pursue efforts” to keep the increase to just 1.5 degrees.
Rich countries agreed to help poor countries. Poor countries agreed to do more stuff. Everyone said they would keep each other on task by reconvening every five years to make sure progress was being made and to set new, more ambitious goals. That’s what makes this accord so historic, nearly everyone was on board. It appears truly universal.
Even though nobody is legally bound to do anything, we can see that everyone wants to do something. Either that or peer pressure seems to be working. And does it matter?
British billionaire Richard Branson says the “Paris Effect” is already happening. There’s a cultural shift signaling a future clean-energy economy.
People may stop investing in coal, oil and gas and start investing (more than they already do) in zero-carbon energy sources like wind, solar and nuclear power. The rise in emissions that started with the Industrial Revolution may now level off and then decline.
The Paris Effect could mean many things indeed. It will all depend on the follow through. Today at least, we are optimistic.
http://www.globalpost.com/
And this is from a site that claims to be anti-MSM … with a goal of publishing ‘the truth’
They should accompany that read with an instrumental version of Koombaya…. perhaps some flash graphics of hopium smoke wafting up the page as well….
But hey — if all of this keeps the sheeple from ramming their heads into fences in panic… then all is well….
You worried me for a minute there, Fast Eddy. COPOUT21 was about reaching a compromise between what is a scientifically demanded and politically acceptable solution. But you already knew that.
Awe, why are you being a party pooper? Damn realists. 😉
I sat here reading with my mouth open, relieved at the end to see that you hadn’t taken leave of your senses. I’m the least doomerish person in the world, but even I have come to see the global mess as akin to the final land trek to the north pole. There will not be another. The conveying planes no longer go there. As the trekkers walked, the ice melted from under their feet. They kept drifting backward. It was hell. Because I’m almost exclusively visual, I could see the end, the final curtain, more clearly than ever before. There is no stable place to stand or gain traction. Metaphorically speaking, we’re living in a water world.
The water-world is not a metaphor everywhere.
Have a look at the video RE just put online (I’ve not read the article yet)
http://www.doomsteaddiner.net/blog/2015/12/13/rising-tides-and-economyths/
And recently, Chennai (Madras):
http://economictimes.indiatimes.com/news/politics-and-nation/chennai-floods-result-of-bad-town-planning-the-new-project-that-never-took-off-could-have-averted-the-havoc/articleshow/50152691.cms
Thanks, Stefeun. This looks like something for my Land Use forum thread on NBL. I’ll repost it there and read it later.
“Even though nobody is legally bound to do anything, we can see that everyone wants to do something.”
That’s my favorite line from your post, FE. Put a smile on my face and got me laughing. It reflects my post from yesterday in which we find out there is nothing mandatory about it, but we are all urged to do what the accord suggests should occur. In a sense we can see how desperate things have gotten when there is such a jubilant crescendo of successful back slapping and on the surface with the public led to believe it must be mandatory.
Anyone else remember the early days of these attempts at GHG emission limit agreements and the litmus test was always if it was voluntary/unenforceable or mandatory/enforceable. Somehow that got forgotten and now the litmus test apparently is could everybody come together to hold each other’s hand and pretend it means more than it does. One of the biggest polluter’s because of the reliance on burning coal is India. They have 13 of the 20 most air polluted cities in the world, yet they are balking at ending the use of coal by 2100. Uh, hello, by 2100 we’ll have run so far past 2C it won’t be funny, so what good is an accord that isn’t enforceable? But then again economic collapse will come much sooner so I guess it isn’t anything to get too worked up about.
“One of the biggest polluter’s because of the reliance on burning coal is India. They have 13 of the 20 most air polluted cities in the world, yet they are balking at ending the use of coal by 2100. Uh, hello, by 2100 we’ll have run so far past 2C it won’t be funny, so what good is an accord that isn’t enforceable? ”
How much coal could there possibly be left in 2100? The most optimistic projections show less than half as much coal production by 2100. Gail’s chart shows about 75% reduction by 2035.
Looking at that graph, it looks like CO2 emissions rose over a 20 year period from 1990-2010 by a whopping 33.8%. So if the oil age is 150 years in the making, then those 20 years represent a 1/3 rise in CO2 in only 13.3% of the overall time of the oil age. That means consumption of FF and their associated emissions are massively increasing. One could even say exponentially. But somehow an accord that sets goals but not enforceable limits is going to reverse that trend? Were those people in Paris even aware of how much energy it takes to keep the world economy pumping, let alone the need to grow GDP to substantiate loan origination?
Some are not aware they are happy with Paris. Some are aware they too are happy with Paris everyone walked away happy and not blaming them for being unable to fix an unfixable predicament.
“How much coal could there possibly be left in 2100? The most optimistic projections show less than half as much coal production by 2100. Gail’s chart shows about 75% reduction by 2035.”
Depends on where you are in the world. If in the US or Australia those countries could be burning coal till the year 2100 if they stop exporting. But you’re missing the point that if all the coal gets burned we run right past 2C on our way to 3 or 4 or more. Hansen talks about the fact we cannot burn all the coal or it’s a complete disaster.
“But you’re missing the point that if all the coal gets burned we run right past 2C on our way to 3 or 4 or more. Hansen talks about the fact we cannot burn all the coal or it’s a complete disaster.”
The current level of radiative forcing from pollution is pretty intense. Within days after 9/11, the entire continental USA heated up 2 degrees just from the lack of airplanes flying overhead. If we shut down everything tomorrow, we would probably have worldwide 2 degree increase within a week. Once you add in the 40 year lag, we are definitely going at least 4 degrees warmer.
On the other side, once we abruptly stop emissions, we’ll see just how fast the excess carbon dioxide is absorbed into plants, microbes and the oceans.
Within days after 9/11, the entire continental USA heated up 2 degrees just from the lack of airplanes flying overhead.
Nonsense. There was no increase in average temperature. What increased was the diurnal temperature range. Even this increase was within normal variations. Plus you can’t deduce much with a sample size of one and even if you could it would be poor science to try to extrapolate the two degrees to the rest of the planet because the flight density over the USA is far greater than over the whole planet.
9/11 research challenged: contrails aren’t turning up the heat
Since we don’t have parallel worlds to run tests on, the sample size will always be too small, so we cannot really test anything or know anything about effects on climate.
Besides, that paper is exactly the opposite; they are talking about some conspiracy theory that contrails increase warming, and then say the lack of contrails maybe caused warming. Which is more in line with what I was saying; human emissions reflect sunlight.
Meanwhile, nobody plants trees or sequesters carbon, and everybody builds with wood Just figuring…
“Meanwhile, nobody plants trees or sequesters carbon, and everybody builds with wood Just figuring…”
I don’t know where you are, but here, the logging companies replant new trees to replace the ones they removed. They have been logging the same forests, over and over, for hundreds of years. Wood is a very renewable resource, much better than using steel or cement or plastic.
Here’s Patrick Moore, founder and ex-member of Green Peace, on this very issue:
Paper Industry
– Industry
– Energy
– Junk mail
– Landfill
Cities Like Manhattan
– I like Manhattan better than one might expect. It’s a done deal, but I wouldn’t have traded that forest for it.
Agriculture
– Agriculture in place of forests. I hear that industrial ag is the leading contributor to AGW and a host of other predicaments.
– Monoculture like Palm Oil and Ethanol in place of complex ecology.
– Removing indigenes from their land.
– Fire and smoke.
Etc., etc., etc. The video makes a very poor case.
– Species lost. Don’t tell me that forestry/deforestation/development has nothing to do with the 50% of wild animals lost in the past 40 years.
– Widely reported that 40% of global forests lost in the past 50 years.
What does forestry, deforestation, whatever, have to do with this? Nothing?
The Last of the Kawahiva
He lives on his own, in complete silence, always on the run, always fearful, invisible to the world. This is the life of one solitary man in the Amazon. He’s the sole survivor of his tribe.
I first learnt about the so-called “Man of the Hole” on a research trip to the Brazilian Amazon with fieldworkers from the government’s Indian Affairs department. We were there to check that he was still alive. Walking through his forest we came into a clearing with a tiny thatched hut. Inside we found calabashes for storing water, dried nuts and a torch made from resin. We also found a hole in the centre of the hut – big enough for a person to hide in. Not wishing to encounter him, we did not linger, but I could sense his presence everywhere.
I’ve worked on Survival’s Brazil campaigns for more than two decades and was still profoundly moved by the Man of the Hole’s story. It is believed that his tribe was massacred by cattle ranchers in the late 80s. When he dies the genocide of his people will be complete.
This is why we are fighting so hard for the Last of the Kawahiva. The same fate awaits them unless we act now. They are under grave threat from ranchers and loggers operating illegally on their land. Their territory – Rio Pardo, in Mato Grosso state – lies within one of the most violent regions in Brazil.
Today, the world’s demand for natural resources means the threat has never been greater and in the eyes of the profit-seekers, uncontacted tribes stand in the way. The Kawahiva face catastrophe unless their land is protected. We are doing everything we can to secure it for them, and to give them a chance to determine their own futures.
==========
Managing a forest, and clearcutting to turn the land into pasture or suburbia, are two different things.
“Within days after 9/11, the entire continental USA heated up 2 degrees just from the lack of airplanes flying overhead.”
That post 9/11 warming event did take place. I saw a special on it – lack of usual pollution from planes, aerosols caused a 1C heat up, not 2C. But even a 1C warm up is cause for great concern because right now the goal is to remain under 2C. There is this misconception that we have a huge CO2 emissions allowance to spend before we go over 2C, but unfortunately if we take the planes out of the sky we are already over 2C.
And if Paul Beckwith is right, we have a 40y lag between emissions and the warming. Even with just one decade we will have feedbackloops kicking in. Nice.
My current view is that forestry belongs in the cities, while forests (and grasslands, etc,) belong everywhere else. And that view says the trees for urban forestry need to be planted a long time ago. And I am proving that buildings don’t mostly need to be built with wood.
That’s about the same as saying ‘We’ll let the fox go into the hen house to collect the eggs — and just trust him not to eat them – or the hens’
Peace Love Koombaya We are the World Allah Akbar ….
I have a burning desire to hold hands on a stage with President Hollande: fighting Terrorism and Climate Change! So moving, I could……cry. All the best people are doing it these days.
Geldof and Bono need to celebrate the saving of the planet with a new song…
I am so inspired I think I’ll personally celebrate by burning through ten thousand litres of aviation fuel later today….
Good one, xabier. Yeah, we are down to symbolic gestures and emotional outpourings to distract us from being between a rock (burn FF and suffer the consequences of AGW) and a hard place (don’t burn FF and watch the economy collapse). I feel like doing a youtube video and after explaining in plain language our predicament, begin laughing at our species. Put the link on my twitter account and see what happens. I’m sure I could become very unpopular quite fast because nobody wants to accept the truth (just yet).
See Albert Bates blog
http://peaksurfer.blogspot.com/2015/12/here-comes-sun.html
Don Stewart
PS Albert lives very frugally, so he won’t personally suffer much if fossil fuels go away.
Unless he lives like a Kalahari bushman… he will suffer… he won’t even be able to replace a toothbrush….
Ahh, come on Fast Eddy, Mr. Bates won’t need too many replacements….got to say he had one helluva life. Good for him…Thanks Don for your posts, they are very helpful!
A lawyer, author and teacher, he has been director of the Global Village Institute for Appropriate Technology [1] since 1984 and of the Ecovillage Training Center at The Farm in Summertown, Tennessee since 1994.
Bates has been a resident of The Farm since 1972. A former attorney, he argued environmental and civil rights cases before the U.S. Supreme Court and drafted a number of legislative Acts during a 26-year legal career. The holder of a number of design patents, Bates invented the concentrating photovoltaic arrays and solar-powered automobile displayed at the 1982 World’s Fair. He served on the steering committee of Plenty International for 18 years, focussing on relief and development work with indigenous peoples, human rights and the environment.
Bates has played a major role in the ecovillage movement as one of the organizers of the Global Ecovillage Network (GEN), and served as GEN’s chairman of the board (from 2002 to 2003) and president (from 2003 to 2004). He was also the principal organizer of the Ecovillage Network of the Americas and served as its president (from 1996 to 2003). In 1994 he founded the Ecovillage Training Center, a “whole systems immersion experience of ecovillage living.”[3] He has taught courses in sustainable design, natural building, permaculture and technologies of the future to students from more than 50 nations
A lot more about him here
https://en.m.wikipedia.org/wiki/Albert_Bates
They, the world nations, can pretend to being facing the global warming crisis and continue to believe fossil fuels/BAU will remain the norm until alternative energy takes over. To be honest, Fast Eddy, they did us an immense favor and we should be jumping for joy.
Perhaps we can volunteer to monitor emission output on a honor system.
That should amusing. Now how do we measure again?
Please remember the US military emissions are excluded from the agreement by agreement. So be careful on how you measure.
Irrelevant.
These ‘agreements’ are a joke.
Nothing is going to change… because nothing cannot change … we need to burn more coal.. more oil … more gas… otherwise we will soon be burning none.
And trying to clean up the mess after we burn it just makes already too expensive energy more expensive.
Expect more of this:
http://www.nature.com/polopoly_fs/7.7577.1354010595!/image/Hotairweb.jpg_gen/derivatives/landscape_200/Hotairweb.jpg
Fast Eddy, Dr James Hansen feels the same way as far as the treaty results. Here is what he has to say;
But when he talks about the gathering of nearly 200 nations, his demeanour changes.
John Kerry rejects leading climate scientist’s claim Paris talks were ‘fraud’
Read more
“It’s a fraud really, a fake,” he says, rubbing his head. “It’s just bullshit for them to say: ‘We’ll have a 2C warming target and then try to do a little better every five years.’ It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will be continued to be burned.
http://www.theguardian.com/environment/2015/dec/12/james-hansen-climate-change-paris-talks-fraud
It gets better, more from Dr Hansen
“The economic cost of a business as usual approach to emissions is incalculable. It will become questionable whether global governance will break down. You’re talking about hundreds of million of climate refugees from places such as Pakistan and China. We just can’t let that happen. Civilization was set up and developed with a stable, constant coastline
Catch 22
‘But, according to Hansen, the international jamboree is pointless unless greenhouse gas emissions aren’t taxed across the board. He argues that only this will force down emissions quickly enough to avoid the worst ravages of climate change.’
I completely agree. Cutting fossil fuel use will force down emissions very quickly indeed.
What we need is to make it even MORE expensive to burn fossil fuels because that will hasten the collapse of BAU and Hanson and the other Greenies will get their blue skies…
Unfortunately they’ll enjoy it while they are starving to death.
There is mass delusion around the world on this issue
The whole C02 reduction banter is just a lot of hot air. It creates jobs and it creates debate to make the proletariat think that Humans are still in control. Even more so people buy into the bullshit that we can become green and recycle our way to prosperity. When in reality we are loosing our grip on Mother Nature’s neck. Once we loose control of nature, our economy will collapse, C02 emissions will plunge and population levels will be quickly reduced.
Richard Heinberg recognises COP21 as a failure, but expects us all to be nice to one another as we enter the downsize phase in the next decade or so
http://www.countercurrents.org/heinberg151215.htm
+++++++ for the graph
Yes, the graph shows what happens when there is an economic crisis in 2007/08.
Yep, that is the way to cut emissions, just bind up the world’s economy….
The next crisis will be make Dr. Hansen very pleased with the result.
Gail Tverberg: This happens because interest payments and dividend payments both go disproportionately to benefit those who are already high up on the wealth hierarchy.
Jct: I only checked this article to see if Gail Tverberg identified the function that takes from the poor to give to the rich. She did. But then failed to propose turning it off. Guess she doesn’t see how yet. http://SmartestManOnEarth.Ca/unilets
I think that a big part of our problem today has to do with the falling wages of many workers. Because of these falling wages, the person working as a checkout clerk in your local supermarket cannot trade services with the local surgeon–the surgeon wants some huge number of hours of work in exchange for his one hour of work. This simply cannot work.
It was not all that long ago that people were more “jacks of all trades” and could, in fact, trade services with each other. If homes are built very simply, perhaps with concrete blocks in a rectangle, or logs in a rectangle, then neighbors could trade services with one another, building homes. No one ran up a big debt. Once we started specializing, with high wages for a few, the system fell apart. The problem is finding a way to make housing and transportation things that we can exchange labor for. When people had a horse that they raise on their farm and used for transportation, this was something that they used for transportation that they exchanged labor for. We do not have any equivalent now.
“It was not all that long ago that people were more “jacks of all trades” and could, in fact, trade services with each other. ”
I’m sure it is the surplus energy that creates hyper-specialization. If energy abundance continued, we would have ever greater levels of specialization and automation. On the other hand, it seems that sometime soon, we are likely to go backwards, to less energy, automation and specialization, and more “jack of all trades, master of none”.
Right, if we can somehow survive the transition. The problem is that we need hyper specialization to handle the way the world is set up now. Most of us do not have the skills to live in an unspecialized world, and the amount of resources that could be extracted in an unspecialized world would be very low. The world could not support anything like 7.3 billion people without our current hyper specialization.
i suppose a way of looking at it is—if the brain surgeon stops work a few might die
if the garbage collectors stop work–thousands might die
so who then is the most valuable to our living infrastructure
“so who then is the most valuable to our living infrastructure”
How long does it take to replace a garbage collector, versus how long does it take to train a new brain surgeon?
I wasn’t disputing the training time–just trying to establish relative value to society
Without a garbage truck and roads, the garbage collator can’t do much. Without a sterile place to work and operating electricity a brain surgeon can’t do much. How long it takes to train a new one is irrelevant.
Exactly!
Dear Finite Worlders
This is relevant to recent chatter on this site about:
*Rocky yards
*The threat posed by the microbes
*Diet
*Carbon sequestration and the role of residential landscapes
*Self-reliance
*Healthy and happy
*Practical permaculture
etc.
http://www.theguardian.com/science/2015/nov/29/anne-bikle-david-montgomery-hidden-half-nature-microbes
Don Stewart
That´s pretty much what I´m hearing. Don´t just eat, but instead try to feed the good microflora in your gut.
Ever wondered why we have raw ginger with sushi? Its not only a palate cleanser, in case the raw fish has some unwanted microbes, luckily ginger is an natural antibiotic..
And concerning biochar use, any surprise hospitals give activated charcoal as a first emergency measure in a poisoning case. Or that water filters have activated charcoal in them. The difference between biochar and activated charcoal is only that activated charcoal is heated to higher tempreatures and blasted with air, so, it’s basically the same substance, only less porous. Toxins and chemicals out and good microbes in, no wonder biochar works.
Oh, about composts, when the composting process is done, its reduced to one sixth of original volume. In different parts of the composting process temperature will exceed 40-50 °C. This can be used as an underlayer to start the raised beds early. But remember to “infect” a new compost with some microbes, go out walking in the woods and take some half composted material with you to “contaminate” your compost with the right microbes. And about composting toilets, to improve air circulation make the flue wide, and at the top reduce the radius. Because air will flow faster through the reduced outtake, it will increase air circulation in the entire flue.
Its weird, we have hubris of going to Mars, but we are unaware of the function of our guts, making composts, composting toilets or widescale biochar use. Isn´t that like trying to climb into a tree arse first?
“Its weird, we have hubris of going to Mars, but we are unaware of the function of our guts, making composts, composting toilets or widescale biochar use. Isn´t that like trying to climb into a tree arse first?”
The scientists involved in planning actual missions to Mars are surely aware of this. Just because the average person does not, is irrelevant. Scientists have been studying all of the factors necessary for living on Mars since the 1960s.
Thanks Don,
good summary and overview of the relationship with microbial world.
‘As Biklé says: “Agriculture and medicine are the hallmarks of humanity and we are failing to realise what they could do for us if we better supported the microbial foundation. It’s mindblowing to us.” ‘
Instead, we’ve done -and are still doing- everything possible to kill them and keep them out of our fields and bodies, thereby eventually killing ourselves (what will remain of the soil will recover).
It’s All Gone Wrong for One of World’s Biggest Mining Companies
http://www.bloomberg.com/news/articles/2015-12-09/it-s-all-gone-wrong-for-one-of-world-s-biggest-mining-companies
Listen to the Rio Tinto CEO’s comments…. wishful thinking at it’s finest….
It looks to me like even uranium prices are too low now. It is essentially all energy products, including food, that have very low prices right now.
Russia is battening down the hatches for a Biblical collapse in oil revenues, warning that crude prices could stay as low as $40 a barrel for another seven years.
Maxim Oreshkin, the deputy finance minister, said the country is drawing up plans based on a price band fluctuating between $40 to $60 as far out as 2022, a scenario that would have devastating implications for Opec.
It would also spell disaster for the North Sea producers, Brazil’s off-shore projects, and heavily indebted Western producers. “We will live in a different reality,” he told a breakfast forum hosted by Russian newspaper Vedomosti.
The cold blast from Moscow came as US crude plunged to $35.56, pummelled by continuing fall-out from the acrimonious Organisaton of Petrol Exporting Countries meeting last week. Record short positions by hedge funds have amplified the effect.
http://www.telegraph.co.uk/finance/economics/12046185/russia-opec-saudi-arabia-bluff-40-oil-price.html
What happens if the prices goes to $25/barrel until forever?
I think we’re gonna find out…
Or below? There is no floor for energy prices. We have had negative natural gas prices when the pipelines get full, and negative prices for electricity, when the electric grid can take no more. I don’t know if oil prices can go negative, but they can go very low.
“It would also spell disaster for the North Sea producers…”
Development of the Johan Sverdrup oil field ( https://en.wikipedia.org/wiki/Johan_Sverdrup_oil_field ) is still on the agenda. Read that break even is $ 35 a barrel. For a North Sea facility of this size. Yeah, right!
“It is as if you and I, on applying to the bank for a loan, were able to claim as assets all the money we intended to make in our lifetime. “$20 million over 20 years, you say? Why then a $10 million loan should be no problem.” And so it was for the fracking industry, which never could have got started without oceans of cheap borrowed money.”
http://www.doomsteaddiner.net/blog/2015/12/12/billions-of-barrels-of-us-oil-set-to-disappear-poof/
Exactly. The “models” that the companies used to obtain the money were very optimistic ones to begin with–wells would keep producing for 40 years, prices would remain high enough, overhead costs would not be a problem and wells depleted. The low interest rates on the loans helped make it look like the approach was feasible.
“An ever-larger share of the output is going to the wealthier members of the economy, because of increased hierarchical behavior.”
In the last 50 years the POLITICAL decision was made to ship many of the good paying middle class jobs OUT of the USA. In place of these middle class jobs, the Financial Industry was blown up to pick up the GNP lost to manufacturing, heavy industry, mining et al. The current Financial Industry is largely a politically created chimera and will largely disappear in the great depression soon to come.
The Financial sector is highly POLITICAL, with the top players paying off Government to achieve gains relative to the rest of society. For example the FED is now lending the top banks trillions of dollars at 0.25% interest and these banks are lending this money to the public at 5% to 20%. Why does the FED not lend to the public or so stipulate the banks lend at o.25% plus their honest costs of lending?
Needless to say the Financial sector is not compromised of many poor or middle class workers in its highly remunerated top jobs. It also has very few jobs per unit GNP.
Government and the FED are largely IMO responsible for much of the unequal distribution of wealth. The larger and more powerful government becomes the more wealthy its friends in the upper one tenth of 1%, who supply most of the bribes (campaign contributions) gain.
As a foot note the banks are withdrawing as earned ALL their profits from their banking and consumer fraud corporations. When they occur trillions of dollars of losses in the next financial crash, which appears to be now upon us, they will come after their customer deposits and the political process will GIVE them these customer funds. As you remember last financial crash the political process gave them cash from the treasury. Today the banks are getting cash from the printing press.
As is clear not much of this has to do with economics; it is all simple political , nonpunishable, theft.
I generally agree.
For quite a few years, “Actuary” has ranked among the top professions. This year, it is number 1 again. It is no co-incidence that this is a financial sector occupation that has been growing rapidly. Actuaries are the folks who model what can be expected to happen, in the insurance and pension sectors–a few are “quants” as well.
It is not just actuaries though. All of the businesses are being run to maximize profits and minimize spending on salaries, often using lots of “leverage” (debt). The catch is that we truly do pay each other’s wages. If the workers are getting squeezed out, no one is available to buy the output of the system.
One of my points is to add a little existential flavor to the doom topic. Yeah it can get wearisome I know so I don’t do it too often.
Our system is over, right? We all agree on that? Then one of the first things you can conclude is that being the “good guy”, the hard working person, raising a big family, dutifully paying taxes, serving the government, fighting the wars, climbing the corporate ladder, going to the religious services, etc. etc. is a sucker proposition. You can do it if you want, but you are basically just supporting a dying system.
This means that actually, the hedonists are more correct in our current circumstance. Even if they are not doomers per say, and even if we are repulsed by them, their lifestyle is more in line with the reality of our times, then the people who are responsible, worry, are concerned about the future, etc.
Besides, the industrial system supports all of these people, including the hedonists, and rushes in with all manner of food, aid, welfare, services, healthcare, etc. at the first sign that a single one of them might pass away. I don’t see that changing anytime soon, which means the freeloaders will coast this decline down.
I think the majority of the western, first world, young adults have watched too many movies with gigantic plot holes called “Deus Ex Machina” moments, seen too many protagonists wear “plot armour”. They think deep down that they are immortal and are destined to become rich and famous. If not anything else, then going to heaven at least. On the other hand, they have the luxury of having fears, phobias and/or just being generally helpless and stupid. Those are luxuries we will soon be without. Everyday life will become deadly for the generally helpless and stupid. For the large majority of the young adults, I think they will simply refuse to live in the real world where celebrities will be knee deep in shit shoveling the compost to their raised beds, without red carpets and talkshows. When reality hits, they will be too weak and feeble to make a comeback. People being so out of touch with reality is actually a good thing, playing the Grey-Man tactic will be easy. The hard part will be years 1-2 A.C. (After Collapse). After the first or second winter everybody will think they are Bear Grylls and cooperation will be difficult because everybody has a theory of an A.C. alpha male, nobody will be able to take instructions from a peer. The easy part will start somewhere 5-6 A.C. then just the smart ones are left, the ones who are capable of learning, capable of adapting in to anything, chameleons, something all our distant ancestors were. I just hope those Jack-of-all-trades have some preservation of knowledge, so that they would be able to scavange and build at least some infrastructure. Having a well and taking some flag poles and sails to make a windmill as a waterpump, can mean hours that can be used in to more productive endeavours, for instance to scavange and build more infrastructure, and in the long run, life or death of our species.
I wouldn´t much worry about the hedonists, soon, there will be none.
I’m not so sure. The industrial infrastructure is vast and huge amounts of resources go into its maintenance, and making sure every last human being, no matter what they have done in life, is fed and given endless healthcare, etc.
The very development of our systems has allowed us all to become non-judgmental, if you like. The right wing complains bitterly but the cat is out of the bag, they are powerless.
Originally pensions and retirements were calculated something like start work when you are 25, work up untill you are about 60 or so, and about ten years or so of retirement before you die. After those initiall calculations education credentialism and education inflation made two or more degrees common, so, higher paid jobs starting at 30 or 35. And medicine keeps the elderly alive (if they had the habit of taking long walks) up till 90 or even 100. The maths doesn´t add up anymore. According to those numbers we should be working up to 75 or 80.
Haven´t much thought about the elderly care facilities, residential family care homes or prisons in SHTF collapse. I just know I wouldn´t want to be in one, or have a close relative in one. Hospitals can manage. MDs have always had the knack of conveniently having just enough rooms so that young folks, or important old people, can get the care they need.
Many families have two generations collecting social security–one in their late 60s or early 70s, a second generation 20 years older than that. This doesn’t work at all, with the low wages of many young people today.
Gail, is it possible that QE was suspended because it was about to trigger exponential growth disparity and, say, make 10 people in the world to own 99% of wealth in a year, or so?
“Canadian businessman and reality-TV star Kevin O’Leary applauded Oxfam’s recent report on global inequality, which stated that the wealth of the world’s 85 richest people is equal to the wealth of the poorest 3.5 billion. Yes, you read that right. He applauded the findings, arguing that “this is a great thing because it inspires everybody, and gets them the motivation to look up to the 1 per cent and say, I want to become one of those people. I’m going to fight hard and get up to the top.”” http://www.forbes.com/sites#/sites/rahimkanani/2014/01/26/shark-tanks-kevin-oleary-calls-global-poverty-report-fantastic-news/
That is serious failure to see how the economy actually works. Thomas Pikettys work came as a surprise even to Paul Krugman http://www.nytimes.com/2015/08/03/books/review-the-economics-of-inequality-by-thomas-piketty.html?_r=0
What actually keeps the economy afloat is a wide sector of profitable small and mid-sized companies. Somehow that has been forgotten.
The Fed and Yellen has some important decisions to make next week, lets see how they stumble through next week.
“That is serious failure to see how the economy actually works. ”
“What actually keeps the economy afloat is a wide sector of profitable small and mid-sized companies.”
He isn’t saying the economy is ran by the 1%. He is saying that the people that run the small businesses are people who are driven to try to become the 1%. Every system needs a talent pyramid. You need lots of waiters trying to be actors, to have a few millionaire A-List actors in Hollywood. You need thousands of entrepreneurs, to generate a billionaire.
It is very hard to “pay each other’s wages” when wealth is so unequal. The system doesn’t work well.
I hadn’t thought about that.
I suppose it would depend on whether the decision makers were the ones getting the wealth. Then it would stay forever (not entirely joking). I suppose greater wealth disparity could be part of the problem, but I expect that other issues played a bigger role.
I think that a major reason QE was discontinued had to do with banks complaining about the low interest rates and lack of ability of banks to make money, because the longer-term interest rates weren’t much higher than the short term interest rates. There may also be an issue of lack of liquidity, if the government is buying up too big a share of the total available debt, making trading and collateral for loans hard to obtain.
“President Obama helped set the stage for the agreement by forging a deal with China last year to work jointly to scale back emissions from their two countries, the world’s two biggest emitters of greenhouse gases. U.S. officials also helped engineer the accord’s unusual “bottom-up” structure, which, by relying on VOLUNTARY pledges to cut emissions, spares the White House from having to seek formal approval from a hostile Congress.”
I capitalized voluntary so it would stand out. Voluntary?! Might as well use George W’s language of “We urge you to…” We urge you to voluntarily stop eating junk food. We urge you to erect solar panels. We urge you to brush your teeth and floss. We urge you to be a moral, ethical person. We urge you not to swear. We urge people to eat broccoli, brussel sprouts and spinach. What good is voluntary?
The best part came when the ehm mentaly challenged french “foreign minister” started to weep at the final presser, as he suddenly somehow succeeded in something, lolz.
Wow, weeping. Those politicians will try anything to sell the public.
I almost went in on a small cap solar panel company in anticipation of a big move from this accord. Glad I didn’t now, cause the movement on solar stocks will most likely be ‘Voluntary’.
What is it that governments like the US and China can do with regard to global warming. It seems to me they are as stuck for a solution as we are for a solution to the end of cheap energy. They can do a few things at the 1% or 2% level but what can they do to get to whatever it says in the accord? By the way what does it say in the accord?
How convenient that a reduction in FF has been agreed to as collapse envelopes us. It would one to believe that TPTB understand that there will be no recovery and have abandoned futile efforts to return to growth. Why is there no jobs and no money? Plenty of jobs and money, its just you. NPR tells us all is well. 50% of the population can live under bridges and NPR will tell us all is well. Graphs displaying radical reduction in FF will be continuously displayed and the agreement referenced. We did it voluntarily because we are such a excellent species. All is well. This is not collapse.
Well you make a good point, this is the way America has worked for some time. It’s all about keeping up propaganda and appearances. The very development of our systems (the media, entertainment, graphics, etc.) allows this to happen more effectively.
“Everything is going to be just fine” “You’re the best, we’re the best” “Land of the free, home of the brave” “American dream” “America the beautiful” “God bless America” “They hate us for our freedom” “axis of evil” etc.
Sprinkled, of course with the necessary images of tough, working class men doing their jobs with vigor and confidence, pick-up trucks, cowboys and ranchers, and of course shiny corporate people and people of different races happily eating and partying together, etc.
Simply repeating this over and over is much more effective than trying to solve anything, besides, as we know here, there is no solution.
There is a certain bias in what we read–I agree.
Norman,
this one is for you:
“New Superbug Resistant To All Antibiotics Linked To Imported Meat
We’re one giant step closer to the end of antibiotics.
Just last month, Yi-Yun Liu’s team discovered the mcr-1 gene, which conveys resistance to colistin, an antibiotic of last resort. They were doing a surveillance project on E. coli bacteria from food animals in China. A whopping 15% of meat samples and 21% of animals tested between 2011 and 2014 also had bacteria that carried this gene. The researchers from South China also found this resistance gene in E. coli and Klebsiella pneumonia isolates from 16 hospitalized patients’ blood, urine or other sites. The isolates were all very resistant ESBL bacteria to begin with, so now were resistant to all antibiotics.
It gets worse. This week, Frank Aarestrup’s team, from the Danish National Food Institute, reported that they also searched their collection of bacteria, looking for this new gene. They found the mcr-1 gene in the blood of a patient and in 5 poultry samples that originated in Germany between 2012-14. The patient had not left the country and was believed to have become infected by eating contaminated meat. The genes found in the poultry were identical to those from the Danish patient and from China.”
Read more: http://www.forbes.com/sites/judystone/2015/12/10/new-superbug-resistant-to-all-antibiotics-linked-to-imported-meat/
Was also re-posted on TAE’s Ilargi’s “Debt Rattle”.
Several years ago I got a lung infection that my immune system could not kick, so the Dr. put me on Eurythramycin, but to no avail. I went back to him a 2nd time and he started prescribing the same thing again and I said but it didn’t work. He said yes, but it should have. We argued back and forth and finally I put my foot down and said I’m not taking Eurythramycin, don’t you have something else? Finally he said we could maybe try Calithrimycan and I said, great, let’s give it a try. It worked and I finally got rid of all the infection, but the experience suggested an immunity is building in people for antibiotics.
One major problem is the meat industry, which feeds antibiotics to livestock. When we eat the meat we ingest those same antibiotics and build resistance to them. It’s a huge mistake to do this but profit for corporations is more important than our health, at least to the current political system that is corrupt via lobbying. I say corrupt, because originally ‘The People’ were suppose to have all the power via our elected officials. That’s been replaced by big money interests that select officials to be our politicians by providing huge campaign contributions. They also become lobbyists once finished on Capitol hill. Only now Obama is headed out of office for good is he willing to go up against the big FF money interests to help the Paris accord.
And don’t think it’s just imported meat. The US has been doing the same thing. Here’s an article about it.
http://www.pbs.org/wgbh/pages/frontline/shows/meat/safe/overview.html
Unfortunately we have 7.5 B people who demand cheap food…. so industry does ‘whatever it takes’
‘quicquid capit’ — that should go on the tombstone of BAU….
Whatever it takes…now what…
https://m.youtube.com/watch?v=yAyNh6MCHws
Yeah FE, cheap food to feed the masses. Speaking of which one of the reasons food is cheap at fast food take outs is the meat is laden with antibiotics. The more one eats the more one may die later in a hospital room from not being able to fight off a simple infection.
I can’t begin to imagine what is going into fast food in order to keep the prices as low as possible..
Pink slime no doubt…. other ‘animal product’ fillers…
Load it up with salt and sugar and fat and it’s Finger Lickin Addictive!
Addictive is the word, not necessary as most choose to think. Mankind in a nutshell.
“The more one eats the more one may die later…”
As I understand it, that’s not how it works. I don’t eat meat at all, but if an antibiotic resistant strain of bacteria were to enter my system, I’d be every bit at risk as any carnivore. It’s the overuse of antibiotics that has selected for resistant bacteria to emerge in numbers strong enough to be of concern. What a prefect example of evolution in action.
Gail, do you think economic collapse is ocurring today? Because of your analyses, I think that world economic system is in serious trouble and it will collapse in the near future. But when will happen? I asked about that.
Ekolojicevre, we don´t know if central bankers have available options left. We are already in zero or negative interest rates and QE has not made corporations profitable. So this JP Morgan chart No. 8 http://uk.businessinsider.com/jp-morgan-76-chance-recession-probability-2015-12?r=US&IR=T could be the probability of SHTF collapse of civilization, rather than mere recession.
The patient is terminally sick, but it is difficult to say the exact time when the heart will stop beating.
If you ask Stilgar Wilcox or the Archdruid, they will say we are in decades of slow collapse already. But for anybody with some understanding in how our global financial markets operate a slow collapse seems impossible.
“If you ask Stilgar Wilcox or the Archdruid, they will say we are in decades of slow collapse already.”
That’s a lie. I never said decades. Just a longer timeline than near term collapse. You’ll see, I’m right.
Sorry, I remebered you having decades of BAU intact before any major problems. My bad.
Oh, and you´re wrong.
The demography fo China shows need for robots for low paid jobs:
http://www.technologyreview.com/news/544201/china-wants-to-replace-millions-of-workers-with-robots/
“The Global Commodity Crash Tells Us That A Major Deflationary Financial Crisis Is Imminent”
By Michael Snyder, on December 10th, 2015
http://theeconomiccollapseblog.com/archives/the-global-commodity-crash-tells-us-that-a-major-deflationary-financial-crisis-is-imminent
“Bond King Gets Antsy as Junk Bonds, Which Lead Stocks, Spiral to Heck”
by Wolf Richter • December 9, 2015
http://wolfstreet.com/2015/12/09/bond-king-gets-antsy-as-junk-bonds-which-lead-stocks-spiral-to-heck/
I am afraid we are dealing with a “You are here now moment.” Except the crisis is causes by low commodity prices, not high.
A banker friend sent me info on Third Avenue which I’d already seen on ZH….I understand he made large money in 2008 on some trades… even bought a junior ice hockey team in Canada afterwards….
I sense that he sees this as an even bigger opportunity…..
I think that most people in the finance community see something crazy is about to go down … but I also suspect they believe the Fed will fix things — again…..
That is their hedge… stay the course… make your moves based on the Fed having your back…
I suppose that makes sense — if you are wrong it does not matter….
FE, you have it correctly. The finance people see it coming, but they are just riding the wave, surfing it, knowing the Fed is the lender of last resort for us all. Most are betting or hoping they can jump off the wave before it crashes. I think this is what dolph is nattering on about. Its the narrow view but still accurate.
“Japan’s massive GPIF pension fund marks record quarterly loss over China slowdown”
($64B on Q3 2015)
http://www.japantimes.co.jp/news/2015/12/01/business/financial-markets/japans-massive-pension-fund-gpif-marks-record-quarterly-loss-over-china-slowdown/#.VmvzIWK9KSM
If you remember, the big shift into stocks seemed to be part of the plan to help shore up the Japanese stock market–started at the same time when there was a big increase in Japan’s QE.
Yes, doesn’t seem to work as planned…
But, IIRC, in the same period, didn’t the Chinese govt allow around one third of their pensions to be invested in stock markets too?
“FRANCE HOSTS CLIMATE CHANGE TALKS WHILE PUMPING MILLIONS INTO LOGGING RAINFORESTS”
https://www.globalwitness.org/fr/press-releases/france-hosts-climate-change-talks-while-pumping-millions-logging-rainforests/
For now, it appears parties are leaning toward mostly an honor system agreement, with individual countries making pledges that won’t necessarily be enforced by any world court or body
Final draft of climate deal agreement unveiled in Paris
http://www.cnn.com/2015/12/12/world/global-climate-change-conference-vote/
Honor system?
I read an article the other day that said all FF burned by the US military are outside any US agreements with respect to climate.
Good news, the whole world is now preparing for a low carbon future:
“Paris means governments will go further and faster to tackle climate change than ever before,” he said.
“The transition to a low carbon economy is now unstoppable, ensuring the end of the fossil fuel age.”
http://www.bbc.com/news/science-environment-35084374?ns_mchannel=social&ns_campaign=bbc_breaking&ns_source=twitter&ns_linkname=news_central
If a government does not act on a life threatening situation it looses power. All constitutions are based upon survival and happiness. If survival is at stake, all laws and contracts are void, hence “Force Majeure”.
But the economy is already tethering on the brink. So, no contracts can be made that would shove it in to the Abyss.
Voilá Honor System.
The climate issue must be adressed, somehow. But it can not be done in real life reality because the economy would collapse. So legally what to do between a rock and a hard place. What happens when a immovable object meets an irresistible force, probably something creative, like a Honor System.
“The climate issue must be adressed, somehow. But it can not be done in real life reality because the economy would collapse. ”
CO2 emissions will decline, simply because we will have already consumed 50% of the viable oil and coal in the world, and production rates will go down. I am fairly confident that AGW is simply an alternative branding for Peak Oil / Everything. A way to use those decades of environmentalist indoctrination to psychologically prepare the population for a rapid decline in living standards, oil and coal consumption.
Some months ago, during a nice summer party, I was trying to get some useful information from a corporate lawyer about Force Majeure in corporate contracts. Had to change the topic of the conversation because she thought I was f-cking with her, instructing her how to do her job or something like that. Spent the rest of the night talking about hot yoga if I remember correctly.
If Paul Beckwith is right about the 40y lag, it doesn´t make difference anyways.
I don’t think there is a “somehow” any more. The final chance for action was prior to the last population doubling. You, me and all the lying delegates at the conference know they won’t honor any agreement if it means economic stress. FF’s have begun their natural inexorable decline. That’s how claims for reductions in burning will be met. It WILL NOT affect the burning of the jungles in Indonesia, Borneo and Brasil though, they are being burned for palm oil and sugar cane for ethanol.
The damn clowns are suggesting more, solar and wind and other “clean” energy alternatives. They must be able to write off the energy expenditure in their manufacture, unless they think they come into being like the miraculous conception or something.
Rant on……
The Earth is a spaceship on a one way journey, there was only ever accomodation and resources for a finite number of travellers. When we exceeded the limits of growth, so did we further limit our ability to attain a natural equilibrium. Maybe (but I’m wishing) the coming dieoff will allow for a continuance of a semblance of human dignity.
There needed to be a captain of our spaceship (the god everyone believes in) that restricted breeding. But we went forth and we multiplied and that, is the reality and the final story of our demise.
Rant off…..
Excellent rant.
Another rant, maybe already linked in this thread, but worth citing again. Highly recommended.
“World Leaders Just Agreed To A “Historic” Climate Accord… Which Is Non-Binding And Has No Enforcement Language”
“In other words, the world’s leaders are releasing a non-binding, long-enough-away-target-as-not-to-matter-for-any-of-those-involved-in-its-drafting document watered down to meet the needs of, drum roll please.. The Saudis.”
Much more: http://www.zerohedge.com/news/2015-12-12/con21-halt-worlds-demise-dont-rely-those-who-caused-it
http://www.myworldofphotos.com/items/large/Free_Beer_Tomorrow_DSC01968_1.jpg
Stefeun, Paris was just for show. They know as well as we that there is nothing they can do to fix it. Yes, I am all for the 1% to 2% fixes around the edges but the lack of a clean and affordable energy source has all humankind in a corner.
A bunch of vultures figuring out innovative and astute ways to pump more money from the taxpayer’s pocket, before it’s definitely empty.
They showed up on their private jets — signed whatever was put in front of them — posed and smiled for the cameras — called in a few flunkies like Branson to say how awesome the future looks..
Then they got back into their private jets and thundered back to where they came from … knowing full well that if we don’t burn more carbon in 2016 than we did in 2015….
We are dead.
http://www.bloomberg.com/energy
The week’s trading in the oil pit closed at -1.14 to 35.62 for WTI and -1.80 to 37.93 for Brent. This market share war is getting rough!
Yeah, things are getting real, but keep your eyes on the ball. It’s all about dividing up the remaining resources.
What you have to do is “get yours” while shedding responsibility and dead weight. A wallflower with money in your pocket, and one eye on the exit door.
If you do this successfully, you can exit before the party ends.
Whatever you do, don’t be the sucker! Here’s how I define the sucker:
-somebody who takes on dangerous, life threatening work for the benefit of others (classic example: soldiers)
-somebody who tries to feed the world, save the dying, acting like a hero (volunteering, charity, etc.)
-somebody who buys useless things at high prices, especially with debt
Doing the above is a losing proposition, nothing but ruin awaits you. If you ruthlessly act in your self interest or that of your family, you stand a chance.
Without community you will fail. The actions you propose would seem to exclude you from community. You are not the only individual capable of being ruthless. Ruthlessly acting in ones self interest to try to keep resources within your control might work in the short term, in the long term it will fail and you very may lose the very things that make life living along the way. Yes the resources are going to be divied up. Once the cat is out of the bag, all rules , not just some are gone too about who gets what. Professional military is very good at what they do. Do you think you can be more “ruthless” than them?
“Professional military is very good at what they do. Do you think you can be more “ruthless” than them?”
You think they will have the resources to be flying around in helicopters and jets, or driving around in tanks and MRAPS? Or are they going to be marching 20 miles per day on foot, checking every piece of land, in continuous sweeps?
Just holding onto a relatively small area takes a huge amount of resources. Resources that will likely not exist.
“You think they will have the resources to be flying around in helicopters and jets, or driving around in tanks and MRAPS?”
No. Do you honestly think that that hardware is the only thing that divides a citizen from professional military?
“Or are they going to be marching 20 miles per day on foot, checking every piece of land, in continuous sweeps?”
You ask ridiculous questions. The topics being discussed were redistribution of resources with regard to ruthlessness. Resources will be redistributed. If you have resources and the military needs them you wont have them any more. Its even legal. If you think you can stand against them good luck. They are good at what they do. Whatever you do, lets say your a UPS driver. Your probably good at it. Professional military don’t know how to do that. But they are good at what they do. If you needed a heat transplant would you have a beautician do it? How good would a beautician be at it be at it? Would you attempt heart surgery? Would you attempt to do haircut to a client who expects professional results?
“Just holding onto a relatively small area takes a huge amount of resources. Resources that will likely not exist.”
Good point. So who is more competent to “hold on” to a area you or a group of extreme physical fit individuals who have trained to do so their whole life? The resources needed to do so are trained men. They do exist. There is only one solution, dont have what they need.
9897650, there are different scales of professional military. There are men that can not function alone, or their head can not take the stress of constant life or death situations. Men that need to be monitored all the time. Then there are those that you can send deep beyond enemy lines, because they can read it in the eyes of a man, if a chance encounter in the woods leads to bloodshed or a friendly cup of coffee. I like the Finnish “Unknown Soldier” scene where the veteran soldier Rokka who takes no shit from any COs, asks his CO where he would need a good man. The CO sends Rokka to protect the right flank. There a platoon of Russian soldiers is trying to flank them. Instead of running away, Rokka calms his mate “take it easy and think happy thoughts, we have no problems here” and shoots down the entire platoon. Even with a wound to the head, he doesn´t hesitate to finish the job instead of running away. https://www.youtube.com/watch?v=ncpHXvpma8o
There are different types of professional military. Gung-ho-types who get everybody killed. Boyscouts that cave in under pressure. And then there are these sons of -ches who can stand the pressure and think clearly and simply do what needs to be done, the real professionals. But I haven´t heard of any real professional types who would have refused cooperation when such was available. They fight and win when they have to fight, but if a fight can be avoided, they always do so. I wouldn´t call it ruthlessness, it´s more of a insight that there are things needed to be done, and the ability to keep your wits about you as you keep doing those things.
The 20 something sugar adrenaline Play Station junkies would not be my first choice of really dangerous people who to team up with, I would rather take a nature photographer, who has the stamina to wait for the right shoot for days. And when the shot can be taken, he takes it without hesitation.
I like reading your comments. They are often intelligent.
Teaming up with skilled “do-it-yourself macgyver types” is of course very important if the society collapses. The problem is that these are very rare. The society has put great effort to foster specialists (trough the education system) that spends much of their spare time consuming stuff and television shows instead of learning the things that makes them a “do-it-yourself macgyver type”.
The veteran soldier in the finnish movie reminds me about Simo Häyhä.
https://en.wikipedia.org/wiki/Simo_H%C3%A4yh%C3%A4
Yup, the comments on Gails blog are high quality.
For do-it-yourself macgyver type, look for a foreman in an mid-sized industry or a foreman from a maintenece crew, a guy with engineering skills, but not an engineer. Those guys are used to thinking outside the box and doing things nobody was capable of imagining on a paper. I remember a guy taking a high risk job from a major hospital. The hospital was renovating, and a room full of Brain Scan equipment was supposed to be picked apart and moved to the other wing. The problem being, that only the German manufacturers could actually calibrate the equipment when picked apart. Well, the guy took the job, gave insurance to the hospital that it could be done within timelimits and within budgets, and during one night he and some mates of his just lifted everything on rugs and inch by inch moved the equipment still intact, still plugged in with everything else (backup generators moving along with them), from one wing to the other. Then just plugged it in again. It was something like a 50.000 € for one nights work for them.
The brothers of my grandmother were long-rage reconnaissance patrol men during the winter war with Russia. Their stories were never told because all of them were war criminals after the war, they had been too successfull. https://en.wikipedia.org/wiki/Long-range_reconnaissance_patrol They had succesfully blown up railroads with supplies, and caused encirclements of entire army cores. So, Simo Häyhä probably has the record on personal kills, but the long-rage reconnaissance patrol men were even more devastating on the russian advances. All I can remember about the guys is that they were cool, relaxed, they just did the things that needed doing.
I agree. Another way of explaining the situation is that there is strength in numbers.
Judging from the scenarios being put forth here, I question anyone having a chance…pretty much Lady Luck or as the ancients called her Fortuna will have the deciding hand on who squeaks by past the bottle neck.
As far as the above list is concerned, perhaps being in the military won’t be such a bad idea. As Fast Eddy pointed out in a past comment, they will appear at your “Little House on the Prairie” and commandeer your household/homestead for their own, including any family members to be put to use. Others that are expendable will be done away with.
Hand in hand with the military are civic leaders in high positions of influence.
They will do the same in a heartbeat. Today with drone technology, your property has been documented, surveyed and evaluated in ways one can only imagine.
Face it, “Big Brother” wants you to “love” him and has the means to ensure it.
In the military you have to survive the first few days of enemy drone attacks etc. And before you can take your mates out playing feudal lords, you have to get away from the base without being shot as deserters. Other then that, yup, being fit, below 30, in the special forces having a group of like minded mates, yup, not bad. If you can remember, while commandeering the womenfolk as personal slaves, that someone always has a bigger gun and more men, always. And having some damsels in distress would be like painting a target on your forehead yourself.
When huge amounts of people are on the move it is impossible to say which would be better. A Grey-Man tactic in the city or a remote wood cabin to bug out in? The cabin could be swamped because of a horde just happens to be walking through. And the Grey-Man tactic in the city could fail you because of sanitation or other such indirect failure. If one could somehow survive the first months in a city, then one could scavange abundant resources to build infrastructure.
Best bets? Alaska, Norway, Chile-Argentina, NZ somewhere between a city and a rural community in the middle of nowhere where people know each other and you know them and have excellent DIY skills.
Usually being on the move is good for you, but when hordes of unpredictable people are on the move simultaneously, a winnebago-strategy seems suicidal.
Personally I would prefer a Radio Station and a few dozen organic farms to provide security to (or whatever the farms would need to keep things growing).
All in all I prefer the brains over brawn strategy, because whoever survives the bottleneck, they will be DIY bloody macgyvers. A willingness to learn and adapt, anything, will be the minimum prerequisite of survival.
dolph911
“A wallflower with money in your pocket, and one eye on the exit door.
If you do this successfully, you can exit before the party ends.”
What exactly do you mean here? You post variations on this theme quite frequently as if you have a plan to “exit”. But what does that entail? How do you “exit” the collapse of civilization? Or are you just talking tough?
Very much along the lines of B9… plenty of bluster… I fail to see a workable strategy though….
Yes, you are right. There is no winnable end-game strategy and people who talk like that are only seeing the narrow view. While there may be delaying tactics and ways that a person can end up on top temporarily, its all down from here.
Last two weeks saw US coal production dropping over 20% year over year (EIA weekly data). That’s equivalent of 2mb of oil per day. On earlier weeks coal production was dropping 10-15% yoy.
That is a huge amount. No wonder coal prices are down so much and companies are going bankrupt.
Electricity companies depend on having coal supplier. We need to keep them operating. I know that there was an article recently about one that was going bankrupt. The new owner wanted to eliminate pensions promises and cut wages, in order to bring production costs down. Ouch!
The rapidity of collapse will accelerate. Only question is how much global warming will happen afterwards to mop up the survivors. This article chiefly concentrates on energy supply, its value and cost of extraction, and relationship to economic growth. There is also a throughput of raw materials obtained at source from mining. The throughput is proportional to size of the economy and demand factors. The depletion side of the supply is being fought by increasing the scale of extraction. We took the best first. Now we mine deeper, more dilute, and more dispersed resource quality, the energy costs of extraction rise and multiply. More over-burden rock to move, more energy to crush harder rock and extract smaller grains of source mineral. All production energy costs rise. The price of oil cannot go low enough. Meanwhile as demand for manufactured goods falls with the declining wages of the non-elite, the commodity price return falls below cost of extraction. As a result , mining corporations which have invest heavily into decades of average economic growth, and gone into debt for this, are likely to be among the debt defaulters. When the big mines shutdown, adding to unemployment, we will know that this civilization is over.
See “peak mining Simon Michaux” on you-tube.
It will be difficult to manufacture sufficient clean energy systems during the late stages of the collapse process, as an “Energy Trap” or “Economic Trap”. Not enough money, energy or raw materials, and few able to buy.
You have clearly stated a very important point
“It will be difficult to manufacture sufficient clean energy systems during the late stages of the collapse process, as an “Energy Trap” or “Economic Trap”. Not enough money, energy or raw materials, and few able to buy.”
A lot of this MR can be chalked up to commodity extractors contracting post China out of their gord expansion in construction. They geared up for a pace that was unsustainable, it backed off and now there will be some recessionary, deflationary pains. As loan origination slows, so does the velocity of money. But I’m emboldened by how the US has so far avoided the maelstrom of that contraction. Everyone we know here in CA is super busy.
Exactly. We have huge problems with needing more and more energy to counter depletion issues. This is another reason why models which look at Petroleum alone cannot predict the world outcome.
Dear MM
Take a look at this post today by Bohm-Bawerk and compare to BW Hill’s comments…Don Stewart
http://www.zerohedge.com/news/2015-12-11/how-peak-debt-constrains-fed-moving-rates-higher
The only way out is to realize that the world is awash in mal-invested capital that need to be written off. Since that is inconceivable for today’s vested interests, the way forward will be further “Japanification” of the global economy. And this time we are all out of arrows.
If they read the ETP model or even understood it, they should have stopped borrowing in 2012. I bet in 2014 the folks got cold feet when they saw the oil plunging but still believed, it’s just a glut.
In the words of Fast Eddie:
Today it’s a glut and tomorrow it’s no glut.
Now no work in the world can manifest that virtual money again. I wonder when Jellen starts talking about debt forgiving. Any bets?
Good article. Of course, the debt that needs to be written off affects banks, insurance companies, and pensions plans.
Further thoughts on the WSJ article re oil prices failing to spur the economy…
Ayn Rand: ‘We can ignore reality, but we cannot ignore the consequences of ignoring reality.’
I’ll twist that a little …. ‘We can believe the lies that the MSM tells us about recovery — about how QE ZIRP will fix things —- but we cannot ignore the consequences of believing the lies’
The jobs reports are outright lies…. as is evidenced by the fact that the consumer is no longer responding to lower oil prices…
Consequences outlined in the WSJ article.
Cheap Oil Gives Little Help to U.S. Spending
Experts expected the drop in gasoline and oil prices would jolt spending by U.S. consumers and businesses. It hasn’t turned out that way. http://www.wsj.com/articles/boost-from-oil-price-drop-is-elusive-1449773546
Seems the cure for low resource prices is low resource prices is no longer true….
Labour participation rate is at a record low in the US — and real wages have declined nearly 10% — and people are up to their ears in debt…. So lower oil prices are no longer enough to spur consumption — everyone is broke….
Not good — there will be massive bankruptcies in the commodity sector… lots of high paying jobs will vapourize…
“Seems the cure for low resource prices is low resource prices is no longer true….”
The trouble is, people’s behavior does not instantly change. Businesses don’t suddenly hire millions of people. It all takes time. That’s why the bigger the debt bubble, the longer it takes to correct. If you never allow it to correct, the bubble gets pretty massive …
Oil prices have been in the tank for over a year
http://www.smh.com.au/content/dam/images/g/l/i/u/f/8/image.related.articleLeadwide.620×349.glitoi.png/1449608679349.png
We were told last year that this would spur the economy.
The impact should have been rapid because the low oil prices would normally act like a tax break — impacting the economy with months.
The economy is worsening by all measures — Baltic Dry – corporate profits — retail sales…
Retail Sales Growth Tumbles To Weakest In 6 Years As Auto Sales Drop
Despite all the industry’s exuberance over auto sales in America, the government’s retail sales data shows vehicle sales dropped 0.4% in October (in other words, automakers are channel-stuffing). This rolled through the various headline data leaving a 4th miss in a row MoM and the weakest YoY growth for retail sales since Nov 2009 – deep in recession territory.
This is the 4th miss in a row for the headline retail sales data…
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151211_ret_0.jpg
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/20151211_ret1_0.jpg
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/12/retail%20sales%20ex%20autos%20YoY_0.jpg
http://www.zerohedge.com/news/2015-12-11/retail-sales-growth-tumbles-weakest-6-years-auto-sales-drop
Surely by now the economy should be trending upwards with oil under at these levels for over a year.
“We were told last year that this would spur the economy.”
Mainstream macroeconomics is a sham. Where I am, I look at gasoline prices compared to your oil price chart, gasoline has gone down from $1.30 per litre all the way down to amazingly affordable $1.10 per litre.
Saving a couple dollars a week isn’t going to do anything. The savings were all sucked up by raising road and carbon taxes, to fill the federal and provincial government pockets.
Maybe if we had $0.40 per litre gasoline prices, people would have more money. Or maybe they would have just gotten a new, bigger SUV.
Good point Matthew, Where I live in the USA, fuel taxes are now running more than 25% of whatever volume metric chosen. If the current trend continues perhaps that figure may go to 100%. A couple years ago I might have made the comment above in sarcasm, now it seems to me the reality gap between economics and physics is moving down some exponential growth path. Once Oil hits $20/bbl the tax to product ratio should be about even. Oh what interesting times we live in.
There’s your problem, you measure gasoline in liters. Most countries who do that have national health services and gasoline taxes help pay for that. Those taxes on gasoline can’t go down. Most of the price of gasoline in the US is for the gasoline, not taxes. If the price of gasoline drops by half our prices will almost go down by half.
Incorrect assumption Daddio7. I live in the USA. Here is a reference to validate the tax per volume. You may notice the fuel tax is a static not variable rate. It is set via legislation and jacked up frequently. I have never seen it go down. As the price of fuel goes down the tax stays the same.
https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States
” I live in the USA. Here is a reference to validate the tax per volume. You may notice the fuel tax is a static not variable rate”
Nonetheless, gasoline in Canada works out to $1.35 per US gallon more than in America, as an almost constant when comparing national average prices historically.
Damit, I give up. Between you and Stefeun I don’t know who’s who or what’s what. I’ll just observe and only write about myself. I’m pretty sure I know what it is I think.
As I write this (Thanks to Daddio7 and Matthew for conversation) the price of gas at my local station is $1.95 USD per gallon (about 4 liters equivalent) . In my state of Minnesota the State and Federal tax portion of this is $.47 cents (24% of total price).
Due to an overflowing supply chain and declining consumption,I expect the price over the short haul (next two years) to continue to go down also knowing the tax is a static volume-metric rate only changeable by legislation and only increasing for the last 40 years. More and more of the price of gas per unit volume will become tax via math.
I don’t know what to make of this observation but I find it interesting. Should the trend continue at a similar rate experienced over the last quarter into the next year or two, more of the purchase price of gas and diesel will become tax. I project the tax portion will hit about 90% of cost within two years under presented assumptions.
“Despite all the industry’s exuberance over auto sales in America, the government’s retail sales data shows vehicle sales dropped 0.4%”
FE, you do realize they mean 4/10 of 1%. That’s a very slight contraction.
If you consider this …
http://www.zerohedge.com/news/2015-11-03/subprime-auto-goes-full-retard-lender-sells-154-million-abs-deal-backed-loans-borrow
It is shocking to see a drop in sales…. they are pretty much handing out cars to anyone with a pulse…
Nearly 30% of all new cars sold are to people with horrible credit ratings i.e. subprime
These are loans that 20 years ago would not have happened.
Imagine what would happen to the US economy if the auto market collapsed by 30%….
Hello Fast man thanks for the excellent directive. “Imagine what would happen to the US economy if the auto market collapsed by 30%” . I’ve put a few of my imaginations down below and invite others to comment/expand.
1. The first thing that comes to mind is that prices will continue to drop on cars and related production products (Gasoline, Steel, Electricity).
2. Secondly unemployment will grow. Where I live Iron Ore mines and processing facilities are being closed now causing widespread layoffs in those local areas of business but service sector jobs are expanding.
3. New migrations will start from areas where the jobs are leaving to where they are growing.
4. The service economy will continue to expand.
5. Social order will decline.
6. A load of resources will be freed up.
7. There will be much demand and opportunity to re allocate resources to new purpose.
6. A load of resources will be freed up.
7. There will be much demand and opportunity to re allocate resources to new purpose.
There is already a massive glut of resources… no need to free any up….
If we don’t see an increase in demand soon — there will be no resources whatsoever being extracted… BAU is going to collapse
Good points!
Fast Eddie said ” There is already a massive glut of resources… no need to free any up….
If we don’t see an increase in demand soon — there will be no resources whatsoever being extracted… BAU is going to collapse.”
michael responds “I too observe a massive glut of resources and contend they are locked up in BAU (not free to any new purpose but BAU which includes the storage rather than use of said resources).
As BAU continues to disintegrate they will be freed up usable.
Joseph Tainter viewed a collapse process as one where diminishing returns in more complexity (social mostly) is an underpinning of collapse . I buy into this view and observe that complex systems release a load of energy as they wind down,
Of course I could be wrong, that’s OK with me. Until I have a better explanation it will suffice and offers some hope for the future not as a continuation of the present but perhaps an opportunity to change.
I ended my prepper phase a couple years ago believing it to be a waste of time, now my focus is to keep myself healthy and extend this health on to family, friends, community.
I hope all is well on the upside down part of our pretty planet. At my little house in the Northland it may snow this evening for the first time this winter, (about 6 weeks behind the norm).
Thank you as always for your robust analysis and critique.
michael
There are a few areas doing well – restaurants, for example. Clothing sales are off. It is hard to justify an interest rate increase on these figures, though.
Seems like a story I wrote about not long ago. http://ourfiniteworld.com/2015/11/23/why-supply-and-demand-doesnt-work-for-oil/
As usual … the MSM is many miles behind the curve….
Gail… I just signed up to your blog, and I am trying to spread your article around because I think you are a brilliant woman, and you have drafted a brilliant analysis of our current predicament. I have read many articles that have each touched some of the themes you covered through bits and pieces, but nothing as succint and effective as your write-up. Thank you for that.
In an ideal world, awareness brings about action… and I’m sure it is frustrating for “alternative” thinking minds (such as yourself) to scream the facts loud enough for most to hear or even care. I have consumed as much material as I can, but my sould aches for change and action. I do feel like our global path is irreversible, and not even a modern-day Jesus (I’m not even religious) could unify humanity with the ultimate goal of self-preservation and conscious/sustainable specialization of labor to benefit most.
Have you come across anyone with a plan for action? have you come across any solutions? The problems of regulatory capture (the Achiles Heel of free markets) are visible to all, yet our daily routines to barely survive are less painful than sacrificing ourselves for a change that seems insurmountable. Are we just the disgruntled silent voices of our time, like so many thinkers languished as they watched their Roman empire collapse in the past?
Outside of fighting massive centuries-long propaganda from our dear world leaders (which requires fighting their fiat money with their fiat money) with our own far-reaching propaganda for a sustainable world economic model (if there is such a thing in a world of scarcity), what do you think we can do? Information assymetry lies behind every economic transaction in our corrupted world, and to fight that is to fight the powers-that-be themselves. Unfortunately the internet is not a loud-enough microphone, so I don’t know what the answer is.
Many thanks for your kind words.
I am afraid our problem is a predicament. The world is behaving in the way it was intended to behave, through natural selection. The combination of energy supplies and intelligence allows human population to grow, in a way similar to the way cancer grows.
We can’t know for certain how this turns out. It could become an extinction event. Or it could be an event that is foretold by world religions (and perhaps still will be an extinction event, from the perspective of humans on earth). Or perhaps humans will get a temporary reprieve, and at least some will be able to continue, at least for a while.
I had hoped some religious leaders might have something to say, but I have not run across any with anything to say yet. An awfully lot of people who have to say things about, say, preventing climate change seem to be interested in solutions that might make themselves rich. We don’t have an economy that can “shrink back” in any meaningful way, without collapsing. This is a real problem.
Sadly, I’m with you on that. Nature or modern economics will bring about famine, and famine or (as you correctly label it) natural selection will ultimately pit world powers and humans against each other (we are almost there). I guess ultimately the solution lies within each of us, and in each of our local communities. We can only try and position ourselves with the best seat we can to watch the show unfold… Those of us that work within the finance game and understand all of this, can maybe extract a few more ephemeral dollars until the party ends. Keep up the good work!
Someone commented that Ugo Bardi had nailed the reason why Rome was sacked. But in the end I think it was just a matter of willpower. In the centuries before the emperors, Hannibal and Pyrrhus had run circles around the Roman legions. Even Spartacus had years of open revolt within Italy. But the Roman people had refused to surrender. A matter of willpower, not surrenduring to the fortunes of war.
How Marius was able to renew the legions (young Gaius being a relative to Marius probably heard these stories at the dinnertable) was to make them in to Mariuses mules, professional military service by all ranks, and the ancient practice of decimation (a show of pure willpower).
The final centuries were bad for the Romans. First civil war and emperors changing every two years or so. And a economic catastrophe so severe that when emperor Constantine tried to build a victory arch, he couldn´t find any skilled artisans any more, so he had to scavange old monuments to make his arch. In the end the taxes were so severe that farmers had to abandon their land, sell their children to slavery and still be decimated by the taxes.
What had made the Roman Empire great was willpower; Cato the Elder: “Carthago delenda est”. And in the end what failed the roman empire was a lack of willpower to defend it.
Any allegories to our predicament? I can´t see our global culture “delenda est”-anything. Central bankers may be holding some card up their sleeves, but I can´t see the masses having the willpower to go through with the changes needed.
Why did will power disappear?
Christopher, interesting question.
The Roman legions were astonishing. They could build a fortification every day after 12h of forced marching. Burn the fortifications in the morning, march again the next day and build a fortification again in the evening. The legions built roads, aqueducts, bridges and rampants. Originally only landowners were allowed to be legionaires. They were thought to have the right stuff to defend their lands. That also meant that the ability to build infrastructure, fast, efficient and lasting, was a shared skill of every Roman landowner.
Up untill the age of Marius, Sulla and finally Caesar, the willpower of the Roman landowners was astonishing. If you study how the mind of Caesar and his men worked in the battle of Alesia https://www.youtube.com/watch?v=SU1Ej9Yqt68 and https://www.youtube.com/watch?v=Ut9GdMywFj0 its simply astonishing.
We still have trouble understanding how they built the aqueducts, made waterresistant concrete and made the famous Roman baths with under the floor heating etc.
The Romans themselves probably failed to see that the legions worked as high schools for the men how to build things back home. They had conquered the Etruscans and the Greeks, taking all the knowhow from them. Having thousands of well built homesteads with long lasting infrastructure isn´t the worst of resources for a country to possess. An allegory for todays world would be like having a rich vibrant abundant private sector with just loads of small and medium sized businesses. Something all economies are trying, but failing to do today, except perhaps the danes.
But at some point the Romans lost their abilities. The decades up untill Constantine the Great were like having an US civili war back-to-back with the US great depression. Two generations of pure collapse. Skills gone, ability to build infrastructure gone, and next went the willpower to defend their lands.
Interesting!
Modern wars are mainly about winning the industrial production. Already the romans seems to have realized that “industrial production” can make you win a war. That is building walls, traps and so on. There is also the other famous example of the siege of Masada:
https://en.wikipedia.org/wiki/Masada
“”The major powers have come together but the poorest have been shortchanged. This is but a fragile lifeline for the most vulnerable,” said Tim Gore, head of policy advocacy and research of Oxfam International. “We are seeing something like a global power shift in climate action, some of the most ambitious pledges put on the table coming into Paris were from developing countries.”
After the document came out, Azeb Girmai, an Ethiopian activist from the Least Developed Countries’ Watch International, a campaign group representing the poorest countries, said the document did not include sufficient compensation for poor nations hard-hit by the pollution that has largely come from the rich world.
“Today I would say is the saddest day for all the vulnerable people in the world,” she said. Negotiations were done behind closed doors and “victims were coerced, bullied by rich countries without any support from outside, and they have failed.””
http://www.huffingtonpost.com/the-groundtruth-project/on-the-edge-of-history-th_b_8792750.html
For Scandinavian readers: http://steigan.no/2015/12/13/en-klimaavtale-for-de-rike-til-skade-for-de-fattige/
There is nothing that can be done to fix this situation.
The most we can hope for is that the central banks can delay the end of the world for as long as possible.
In the meantime — enjoy the final days of BAU
IMHO (of the moment!):
We are not a collection of 7 billion individuals. We are a network species, like swarms of fish or swarms of bacteria. The trouble is a culture that promotes the meme individualism.
Individualism is powerless to address the oppressive priorities of globalized capitalism.
If everyone else does not survive, individual survival is meaningless, .
Unless everybody understands it, nothing can be understood. (Rupert Sheldrake’s pioneering work, “morohic resonance,” might or might not confirm this.)
We could not possibly survive without a coherent global vision, which is nowhere to be seen.
.
How divide and conquer works:
Dear MM
Here is BW Hill responding to a statement on Ugo Bardi’s website:
From the cassandralegacy.blogspot.com
“Yes, I knew that site. It is a straightforward application of the concept of EROEI. Seems to be good work, although I never resolved myself to pay the 38 euros for the full report”
Mr Bardi is under the impression that the Etp Model is an application of the ERoEI concept. It is not; it is the solution of an equation. The “Entropy rate balance equation for control volumes” as applied to petroleum production. We have forwarded to him a copy of our report.
Back to me. I’m not sure what Gail thinks now, but in the past she has also tarred Hill’s work with the brush of EROEI shortcomings. Hill has always staunchly defended his model as the solution of thermodynamically based equations. The solutions can also be used to calculate EROEI…so long as that number is defined in a way consistent with the equations. But in no way does Hill start out trying to calculate EROEI.
As I have tried to explain, the solution to the equations looks at both the cost of production and also the ability of the larger economy to afford to produce the oil. The model does NOT look at Central Bank interventions such as QE and ZIRP and the resulting vast expansion of Central Bank balance sheets and what impact that might have on bond yields and the investor search for yield and the speculation in junk bonds issued by oil companies. Hill adds that additional layer of analysis independently of the original thermodynamic model.
Hill has been met with a lot of incomprehension and derision. I think that a lot of people in the oil business simply can’t get their head around two conflicting memes: oil provides us all those valuable energy slaves vs. oil is no longer economically viable. Add in the guys such as Ugo Bardi who subscribe to the ‘geological limits’ who can’t really come to grips with the idea that oil has become economically unviable at the same time that we have vast quantities of known resource. The vast quantities of known resource, coupled with the knowledge that burning those quantities will fry the Earth, are on the table today in Paris.
So you can see that it is all quite a tangle.,,,Don Stewart
Don, Today I found a german physicist’s work concerning the ETP model at http://www.peak-oil.com and it was a good read. He actually validated all the data from BW Hill and used his own way to get there. it is very impressing that both reach to the very same conclusion.
Unfortunately when you read the comments section you will find plenty of people saying “Yes some day the prices must go up again” what is a sign that they really did not get the point. Gail also made the point in her last article, maybe that was inspired by my post concerning “supply and demand” is not valid when you are near the physical boudary of the model. The interesting thing is that from BW Hill the price for this year must be 75$ but it is 36 today, falling. That is when we see that “the markets” are totally skewed and do not reflect real data. The cleaning up of this mess does not seem to be far away though,,,
“Unfortunately when you read the comments section you will find plenty of people saying “Yes some day the prices must go up again” what is a sign that they really did not get the point.”
MM, the price of oil is low due to an oversupply from years of excessive incentive with $100 plus per barrel oil, in which every producer was driving pretty hard to the hoop to produce as much as possible including non-conventional sources. The fact Hill’s chart suggests a price of $75 a barrel reflects the energy imbedded in a barrel of oil to generate GDP. Right now we are in an oil market share war with an oversupply. While this goes on all producers are scaling back capex and thus future supply will be lower, and once the oversupply is soaked up, a lower available volume of oil will lead to higher prices. The Hill value of $75 is why I recently predicted a range of price of 70-80 dollars in the latter half of 2016. Whether that happens in 2016 or 2017 does not matter, it will happen.
Now this doesn’t mean I don’t understand diminishing returns or the pitfalls of peak oil, it’s just that the timeline will stretch out towards collapse on a slightly longer timeframe than most here think. We are still in a period of fluctuating production and pricing. Affordability does not probably exceed 85 a barrel, but there is room above the current price. Remember folks, the path to collapse will not be linear anymore than rising world temperatures from year to year will be linear. One must always be cognizant of the potential undulations inherent in a complex system.
Stilgar and MM
If you put Hill’s model with 70 dollars or so right now, with Bohm-Bawerk’s analysis of map-investment, you come out with something like this, I think:
The price of oil WOULD HAVE fallen from 100 dollars to 70. Shale would never have happened. People like Shallow Sand, carefully managing legacy wells, would not be getting rich but would not be going broke, either. BUT, the gross financial manipulation is resulting in the severe financial repercussions we see right now. IF the bad debts were written off, then PERHAPS oil might get back to 70 dollars this year and 60 next year and so on. We would see a controlled decline in oil. Instead, what we see is collapse.
This reminds me of an old Simon and Garfunkel song:
And the people bowed and prayed
To the neon God they’d made
When Richard Fisher left the Dallas Fed, he said that he wasn’t at all worried about the Texas economy, because ‘it’s all about consumption now’. The God we constructed was that GDP was king and boosting consumption was as good as boosting real productivity. 20 percent of income spent on medical care is better than 7 percent spent on medical care. And so forth and so on. Which leads to the dysfunction identified by Bohm-Bawerk.
Don Stewart
The thermodynamic problem we have is a different one than the one BW Hill is modeling. We are dealing with an economy that needs energy to grow–it makes use of supplemental energy of various sorts to grow. It is the slowdown in the growth of that energy consumption that brings down the system. Growing debt is needed to keep pumping up the system, and that debt isn’t growing fast enough. The problem is also related to falling returns on human labor. None of this looks at petroleum by itself.
I am doubtful that modeling the wrong problem will get to the right answer.
Gail
Thermodynamics isn’t interested in the system of debt that you think you need. Thermodynamics never took on the responsibility for keeping ponzi schemes alive. This discussion is like the one Bill McKibben has with people about climate. He reminds them that ‘physics and chemistry don’t negotiate’. The same is true of thermodynamics.
You assume that, somehow, we MUST keep the financial system going. Yet I have never seen you offer any ideas about how you propose to do that. Hill doesn’t offer any ideas on keeping the financial system going, either. Hill has put together a fairly coherent plan for what he is going to do when the financial system fails, as I understand him. And I think that is the best any of us can do. (As I recently pointed out, Bohm-Bawerk in his essay thinks that we can salvage something by writing down bad investments. Japan has staunchly refused to write down bad investments for 2 decades, now. My gut feeling is that we are looking at a Global Depression under the best of circumstances.)
Throwing stones at people for failing to solve insoluble problems, but who point out the rocks in the river, is not a good use of time. As I pointed out earlier in this discussion, deciding whether the scenario laid out by Hill (energy collapse by 2020) or the scenario laid out by the ‘reputable Texas company’ published by Ron Patterson (decline at about 1 percent per year) is the more reliable for planning purposes is an important topic….and one which gets little discussion.
Don Stewart
Don, from what I recall Gail has been consistent in saying the system will fall. She has talked about doing some gardening. She lives in a warm area. She seems to be prepared for the future as a retired couple that have some community and will not be shooting it out with anyone.
Ed
My problem with Gail can be traced to a couple of things, I think. One, Hill makes a thermodynamic model which predicts the rapid demise of a very large and strategically important primary energy source. (The German physicist who is commenting on Ugo Bardi’s site thinks the model is accurate.) Gail, like Ugo Bardi, tends to assume that the model is just another EROEI analysis. Gail is not a mathematician, but Ugo should know better since he is a modeler. Gail refuses to look at the model, and, when pressed, comes up with all her complaints about EROEI. IF one accepts Hill’s model as the ‘best case’ scenario for oil, and then layers on the ‘misallocation of resources because of bad monetary and fiscal policies’ which both Hill and Bohm-Bawerk as well as people like David Stockman have talked about extensively, then we are on the verge of the disappearance of oil as an active ingredient in the economy plus we have a financial crisis.
Let’s do a little thought experiment. Suppose we adopt Bohm-Bawerk’s suggestion that we write off the debt incurred which represents misallocation of resources. I have said separately that, then, the price of oil should be around 70 dollars right now. What we would get with a conventional peak oil model is something like a 6 percent per year reduction in the supply of oil, along with increasing price for oil. The economy would shrink, but would be in something like the ‘cash cow’ mode where expenditures are reduced and new investments are few and far between.
But if Hill’s model is accurate, oil is going to shrink more rapidly than that, the price will never go above 70 dollars and will be worth less each coming year, and will no longer be a major part of the economy by 2020. Please note that both these scenarios imply that Donald Trump or whoever is running things realizes that a high percentage of the debts will never be paid, and does the right thing to permit the physical economy to function as best it can. (I’ll pause while you consider the likelihood of that happening).
It is necessary to remove the albatross of bad debts from around our necks to get any reasonable functioning out of the physical economy. But if anyone starts suggesting how adapting to a degrowth economy might look, Gail gives a retort like this:
‘Of course, the debt that needs to be written off affects banks, insurance companies, and pensions plans.’
I’ve been through this with her at least a dozen times. I point out that you simply can’t pay off the debts from mal-investment, and you can’t pay the promises which were premised on perpetual exponential growth, so failure to do those two things is not a shortcoming of what anyone in the ‘mitigation’ camp is proposing. But that is always her response.
I don’t personally care whether some particular person invests a single hour in planning for mitigation. I’ll support, and am supporting, community efforts along the mitigation line, but the efforts are woefully inadequate if Hill’s timeline is correct. So I think that Lifeboats are in my future. I recently read something from Joel Salatin which was pretty much along the Lifeboats line.
It is very common on this site for people to say ‘monetary collapse spells doom’. Yet, when we look closely, we see that the governments are steadily walking away from the notion that governments will rescue everyone. The latest is the move by the Fed to quit back-stopping banks. Couple that with bail-ins and we have the distinct possibility that the government is planning to ‘affect banks, insurance companies, and pension plans’ in ways they will not enjoy. So it is not far-fetched to think that all of us need to be thinking about physical survival in a world where we have a lot less money. And the economy is a lot less complex because of the demise of oil…which underlies transportation which underlies specialization of production which underlies productivity. (But if Hill is wrong, perhaps we have a little more time.)
I think that the ‘doom now’ choice is just a cop-out. But I don’t personally care if an individual or family wants to think that way. I do think I have some responsibility to try to lay out some alternatives.
Don Stewart
Very interesting, Don. Yes, we’re all interconnected now however I think we will revert to more local industry, food, travel, everything. I know Gail doesn’t agree with me on this either — you’ve said so, Gail! but given that the economy is man-made edifice, if has to change, it will change. Or rather, if we have to change it, we will. The modern economy is just that; modern, There were other ways before, You know, Gail, that little plastic dome thing you bring out to illustrate how interconnected we are could get wiped away, and little plastic wigwams could be built instead.
Some of us are adjusting significantly, like it or not! My own little business imploded, after 15 years’ successful trading, and so I now have a job. We do what we must. I’m solvent again…
‘little plastic wigwams could be built instead’
Plastic is derived from petroleum…. there will be no petroleum therefore no plastic wigwams…
What their could be (and again I put on my cognitive dissonance cap which allows me to ignore the fact that you cannot manage 4000 spent fuel ponds without the full force of BAU) are wigwams where people are living in very primitive conditions…
There will be no oil. There will be no electricity. There will be no medicines.
People do not have the skills to return to that sort of existence….
I would go so far as to argue that many people — when they are faced with harshness of living without BAU — would prefer not to go on living…
Again – try unplugging from BAU for a weekend — or a week — turn off the power and don’t use the car or toilets — that would give you a taste of what you are facing — it would be like collapse lite…
If you really want to get a feel for what is coming — try this for a month — but add another dimension — live only off the food that is in your home now — and that which comes out of your garden — if you have a garden ….
To make the game even more realistic — I will allow you to steal food from the homes and gardens of your neighbours….
I have yet to have anyone take me up on this dare — not even for a day.
And I know why — nobody wants to face reality — nobody wants their normalcy bias shattered when the realize that if they want to eat they have to start a fire …
If they want a hot shower they have to take a pot and find a creek – fill it with water — and boil it on the fire…. if they want to go to the toilet they would need to squat in the bush…
The truths are very inconvenient…. better to hide behind behind cognitive dissonance… and the normalcy bias….
Gail is absolutely right – as usual.
Don, “I do think I have some responsibility to try to lay out some alternatives.”
What did you have in mind?
Van Kent
There are lots of things ordinary people can do. For example, look at:
http://scienceline.org/2011/07/lawns-vs-crops-in-the-continental-u-s/
Without bringing up the issues usually discussed on this site, a case can be made that getting more carbon into grassy lawns is a no-lose proposition. To get the carbon into the soil, it is necessary to remove compaction layers. One way to remove a compaction layer is to take soil cores, and to put fungal food down into the hole. The fungal food starts a process involving both fungi and bacteria and the rest of the soil food web which eliminates the compaction layer. The grass roots go deeper, the soil holds more water, carbon is sequestered in the soil.
One can argue that lawn grass isn’t the BEST way to do all this. One can argue that people should be getting rid of lawns and planting food. But as a simple thing people can do, simply getting more carbon into the soil is an excellent preparation for whatever comes. If it is ever necessary to grow food where the grass was, there won’t be any compaction layers and there will be fertile, carbon rich soil.
This is just one example…Don Stewart
Don,
Somehow I see potatoes grown in a growbag, or sweet potatoes grown in a growbag in a warm climate, more feasible. Something like that would encourage building a basic swedish composts, everybody in Sweden knows how to make a basic wooden compost it would seem, and making biochar yourself. Also rabbit coops and basic rabbit farming could work, such things have worked in rural Africa. Starting small and working yourself to bigger and bigger rabbitfarms http://www.nwk.co.za:8080/nwkgroup/index.php?option=com_content&view=article&id=211&Itemid=50&lang=en
The thing is, we need a minimum of 94 sq. ft. of growing space per person for a year-round vegetable supply. And most of us just can´t get such growingspace.
How about just starting with a odorless swedish compost?
“The thing is, we need a minimum of 94 sq. ft. of growing space per person for a year-round vegetable supply. And most of us just can´t get such growingspace.”
First of all, wow, that seems like a very tiny amount of space; I would love to find out how you got to that. The university that did the research into half your own food thing came up with half your calories in something like 1000 square feet, and that was with feeding chickens and rabbits using food from off-site.
Second, there is going to be a lot of vacant parking lots after BAU, lots of room for some raised beds or whatever; If you can get it down to 100 square feet per person, that’s about one car parking space each. Heck, unless you are in a very tall apartment building, the rooftop alone should have more than 100 square feet per person of available space.
I really doubt the 94 square feet, unless there is optimal nutrient replacement and plenty of water. Even then, it doesn’t seem like much. You are only talking about “vegetable supply,” which is a small portion of calories, as well. I expect that you think the people would live mostly on grains and meat from elsewhere.
Van Kent
I am in favor of every step that takes us closer to using biology to stop doing damage, or even better meet our needs.
Don Stewart
Matthew, http://www.the-meal.net/graph/manuel_walipina_benson.pdf
Its year-round, maximum production all the time. Nutrients, fertilizers and compost added, without any whatsoever diseases, well irrigated and proper CO2 added. No such ideal perfect conditions anywhere in post-BAU, so..
Oh, probably also a root cellar required and food drying platforms.
But the russian datshas had pretty small vegetable gardens that made them linger through the 91-93 period.
Matthew, you were basically describing what the South-African authorities are recommending http://www.nda.agric.za/docs/Brochures/PG_SweetPotato.pdf good job!
Wow that is an interesting document. Recommended 80 to 90% humidity for curing and storage. That seems like a very moist environment. I would need to have a humidifier running to maintain that I think, or come up with some passive system that does not need electricity to do the same thing.
For FE:
“People do not have the skills to return to that sort of existence….”
Some people do.
Most definitely – I was trekking in deepest darkest irian jaya some years ago and encountered plenty of people who would do quite well if completely unplugged from BAU — because they are already unplugged — in the most remote villages they didn’t even have a bottle
http://georgesteinmetz.com/image_collections/tree-people/main/STNMTZ_19950601_17.jpg
Don,
Quite frankly, you make me angry. I have looked at the model, and I do not agree with it. It starts from a wrong premise, so it is WRONG. There is no point in looking more at it. You keep badgering me about it. On and on and on and on. I could count the number of comments and e-mails.
With an MS in Mathematics plus one year of additional work, plus a Fellowship in the Casualty Actuarial Society, and a lifetime working with math, including quite a bit of experience with mathematical modeling, I consider myself a mathematician.
The Hill’s Group characterizes themselves as “an association of consulting engineers and professional project managers.” I would not consider people with such a background to necessarily have a better background in modeling. Modeling prices would seem to be pretty far from their area of expertise. Their area is Mining and Manufacturing Engineering.
Why are you so insistent that you know more than Ugo and I do?
How about moving on to a different subject?
Perhaps I should try to explain some more.
There are not one but two different thermodynamic problems:
1. Depletion and related EROEI problems
2. The requirement that the economy has for a need for continually increasing energy supply in order to grow, or it will collapse.
The BW Hill group has chosen to model only Item 1 listed above. It comes to the conclusion that generally, oil prices can be expected to fall because of EROEI issues. I would agree with this general conclusion. I have followed their calculations through enough to decide I would not use the same methodology, but the results in some sense “look reasonable” if all an analyst is trying to do is look at Item 1 above. Unfortunately, the timing of Item 2 is such that its occurrence badly interferes with the forecast for Item 1. Because of this, the output of this model is can be viewed as having very little usefulness.
In some sense, the big problem is that Don is trying to read way too much into BW Hill findings. The BW Hill group is looking at a problem that is not an engineering problem, from the point of view of an engineer. Our problem is not peak oil (as viewed by followers of Hubbert); it is Limits to Growth. If Don is looking at the output of the model as predicting that the financial system will stay together (which is not what they are really saying), Don is making the same wrong assumption that the followers of Hubbert have made. The model is not designed for that purpose, which is why I say it starts from a wrong premise.
The problem is sort of like going to your dentist when you have a broken leg. The dentist may be very competent at what he does, but the dentist will not do well at fixing your broken leg.
Gail
First, we need to distinguish between what the Hill’s Group, which has since disbanded, did and what BW Hill personally is doing in the aftermath. The Hill’s Group looked at the ‘thermodynamic sense’ of the current global oil production system, and the current global pattern by which the global economy uses oil products to produce goods and services. The Hill’s Group conclusion was that we are very rapidly approaching the end of the Oil Age as we have understood it for the last 50 or 100 years. The Hill’s Group published their results, and sold them for about 40 dollars. But they distributed their results pretty widely for free, including a copy to you.
BW Hill has taken the results of the model and commented expansively on the implications for things like finance and geopolitical developments and corporate survival and standards of living. Thus, the model predicts many strains and stresses…because energy is at the foundation of modern economies and finance and geopolitical developments and corporate survival and standards of living. I am pretty sure that Hill would say that attempts to model those things independently of energy is a mistake….finance cannot be understood without looking at the energy underpinnings.
It is also a mistake to put the model solely in the EROEI camp. While ‘EROEI like’ concerns are very important when looking at the oil production system, the fact that oil which is burned in an internal combustion engine to move a human from point A to point B is hugely inefficient is far more important than the cost of producing oil. Which, if we wanted to pursue that rabbit, takes us down the path of the Ellen MacArthur Foundation concerns. You don’t want to go that way, and insist that no change is possible.
I have consistently pointed out the significance of the assumption of ‘current global oil production system’ and the ‘current global pattern by which the global economy uses oil products to produce goods and services’. There is no physical guarantee that these cannot change. IF they change, then the Hill’s group model output will change. Because the model is mathematical, it is relatively easy to plug in different factors and come out with different answers. So, for example, Hill can reasonably discuss the prospects for a localized, less costly oil production system. Whether such a system can be built is a question of practicality, but the Hill’s Group model can be used to predict how much oil might be in our future if such a system is actually built. Likewise, if ‘decarbonization’ were to actually occur in the global economy, or if magical new ways to move humans without internal combustion engines actually materialize, then the Hill’s Group model might provide some useful benchmarks. However, it is likely that the same sorts of analysis which are necessary to evaluate the ‘local oil production system’ would have to be done to evaluate their feasibility in the real world.
And here we come to the main point. You consistently deny that any change at all is feasible. So that’s the end of the discussion, from your perspective. Both the Hill’s Group model and your more language based models predict collapse on a grand scale. The difference is that the Hill’s Group model DOES NOT assume that change is impossible. It is a mathematical model of how things will go if WE DON’T CHANGE. The Hill’s Group model does not put forth recommendations for change. BW Hill’s apparent work on alternatives for oil production is a new wrinkle, which derives from him, rather than from the work of the Hill’s Group task force.
I hope this clarifies things. I will say no more.
Don Stewart
My recollection was that Gail was doing nothing to prepare — not even gardening…. because she thought it was futile…
I could be wrong….
There’s nothing that can be done. This juggernaut is so HUGE that it will just steamroll its way over everything and everyone in its path, once it gets going.
Did you hear? Climate change has been solved! Every country just decided that they would agree that someone should do something about it and signed off on that. The tricky bit is who gets to voluntary exit the modern world first by reducing their CO2 emissions by 90% first? Lol…
http://www.zerohedge.com/news/2015-12-12/con21-halt-worlds-demise-dont-rely-those-who-caused-it
‘There’s nothing that can be done. This juggernaut is so HUGE that it will just steamroll its way over everything and everyone in its path, once it gets going.’
The closer we get to the end game the more my gut is saying — spent fuel ponds ignored — there is no way to survive this …. there are just way too many people and there will be way too little food….
I used to be concerned about being caught away from home base when things unraveled … and being unable to fly back …
But now I really don’t give a shit…
I’ll be two long haul flights away from the base by Tuesday morning … if it all goes side ways during the 5 weeks I am away so what…
I’d rather see eastern Europe rather than hunker down on the farm waiting for the end with the slight hope of living a bleak existence…
Eat drink and be merry – for tomorrow we die.
Or as the Latin(os) might say: ‘Comede bibe epulare – cras enim moriemur’
Let that be the motto of FWorlders!!!
I do have a garden, but I doubt it would provide 15% of the calories my family would need. I started it to see how well it would work. There are a lot of issues–including rock right under the surface. (I had to have soil put on top.) Also, if it is dry, it would be hard to water. This year was very wet, but I don’t have a good source of water for the garden, except water carried in containers in a wheelbarrow.
Psile,
I think Sweden will volunteer. But probably no one will follow.
Fast Eddy, let us know how the trip is going and meanwhile, have some fun.
If SHTF inconveniently, then we just have to find some guys who can get you out of there. Would probably entail a truck run with some security, like they did when going in to Russia with valuable cargo in 92-93, and if you don´t want to make your stay in Europe a permanent one, some private jets from a private airstrip, and the Singapore mob, to get you back in to NZ. But still perfectly feasible, not impossible to arrange.
Relax, and live a little.
I generally bring along a pocket full of gold coins when I travel…. just in case….
That always helps, a favour for a favour, you know how these guys operate.
Enjoy your long and boring flights.
~similar crossroads happened throughout the history several times,
usually the grand finale starts when “the structure currently” in power starts to issue in panic mode orders all over the place, follows no – or cold response; next two options emerge: either the systems collapses into lower state of order on its own gravity and perhaps slowly picks up or not ever at all, or the second option takes place in which faction formely of the dying system assumes power and rewrites the rules literaly overnight, often in very dramatic manner (to yesterdays dominating ideology/norms/culture) and salvages what’s possible in the physical visible plain.. Don, you are likely looking at the second example, and I’d subscribe to it as well..
Well, said, Don Stewart. I think you have captured all of the sides of this argument properly. My only question is: if we can grasp these seemingly simple concepts, why can’t all of these other undoubtedly intelligent people (Oil Execs, Ugo, Hill, et. al.) unable to do the same? Or is this another example of asking how many angels can dance on the head of a pin? in that each side must defend its little idea of correctness to the point of ridiculousness. Really all sides of this debate are accurate they just need to be synthesized into one unified theory (or argument).
Ugo Bardis Blog is named Cassandra’s legacy. There you have it.
The Peakoil Scene lost a lot of credibility as it predicted peak oil long time ago and obviously it did not show up. That made many even scientists start to stcik to their own models more than to others assumptions that have proven to fail.
Yesterday I looked at the discussion at peakoil barrel to see what they say about Gail:
These Folks are in a complete different bus. they say: Oil drilling is some sort of Casino abd some lucky guy wins and they prove it with “good shale plays” vs “Bad shale pleys”
Ugo Bardi thinks more of a systemic way, he believes that extraction of all resources together is a problem and considers looking at oil alone is in vein.
Gail again likes to look at the financial side. Her claim that hurts me most is “cheap oil is gone” the word “cheap” makes no sense at all because we can create any money we want with a key stroke. Cheap should be low EROEI but then agaon you get to the people claiming that there exist a thousand ways to talk about EROEI and I bet Gail simply does not want to get in touch with these issues because it will guide the discussions in a scientific area where she has not too much knowledge (Gail, I hope you don’t get me wrong here).
When you look at the newspaper most of the articles you find are written on this model:
Take out a specific topic of a complex area, add some special knowledge of that specific topic to the text and proove that it is easy to understand and then claim that all problems in the world are that easy.
Many people like to pick up one item of a problem to nail it down in their conciousness. Then If this policy has failed once, they think they can engage in blaming other people that also pick up a single item from a complex problem and claim that person stupid.
It is simple. The ETP model sadly also is a “very narrow model” of very simple parameters and the people just say: It can not be that the world is that simple, we got to ask someone else” and that also because the results of the ETP model are very uncomfortable.
You see it with the climate debate: There are hundereds of different scenarios and hunderets of people saying it is bad or it is not bad. Peple tend to the idea that it is simply possible to pick the result one wants as the result space is so huge.
That said: The ETP Model is the ONLY model in the world that predicted the price must go down after 2012. (Except the economic undertow with his triangle of doom but he has a similar but financial approach to the same problem)
So Its up to you, wich “strategy of mind” yoiu like to follow.
“The Peakoil Scene lost a lot of credibility as it predicted peak oil long time ago and obviously it did not show up.”
I’m pretty sure it is an established fact that conventional oil peaked in 2005. M King Hubbert’s Peak prediction did not include offshore, shale or tar sands.
” Her claim that hurts me most is “cheap oil is gone” the word “cheap” makes no sense at all because we can create any money we want with a key stroke.”
Creating money does not create wages. If the masses cannot afford the oil or the products of society, what good is it? The consumers must be able to afford the oil, and at the same time, the oil producers must be able to make a profit.
Don’t worry they wil start to hand out free money soon. At least in the form of coupons. It is well established in the form of SNAP
I am with Ugo on thinking that it is futile to look at oil alone.
My cheap is not cheap in money, but cheap in the quantity of resources that goes into extracting the oil. My objection to EROEI is that it is too narrowly defined, the way most people are using it today. If you use the EROEI definitions of Joseph Tainter or of Thomas Homer-Dixon, what they are looking at is return on human labor. This is the issue in my view–essentially whether wages of non-elite workers fall too low. The current fashion is to use EROEI to mean amount of fossil fuels used in creating some substitute for a fuel, often on a model basis. This is a very different measure.
All of this seems to be “over the heads” of a lot of readers. I am sorry I cannot explain it sufficiently simply for everyone to understand.
Maybe this could be a topic for the next collapse Cafe with RE
“UTOGC” The universal theory of global collapse.
I think the poster brought up a good point that the “scene” needs to take up a general methodology accepted by everyone, so that the predicament can be communicated in a consistent manner. The internet simply is too big to let “newbies” dig out the “good” resources themselves. It is likely that the people will fall into “oh, this is too much doom I can not handle it” or “well, the scientists talk a lot when the day is long”.
So it begins (another leg down)?
Even Brent now drops bellow $40 and natgas pierced $2 line..
http://www.bloomberg.com/energy/
I think so. Oil storage is close to full. It has to go down further. We seem to be having a warm winter. Natural gas prices were already too low–are going down further.
Madonna sings ‘Imagine’ at memorial for Paris attack victims
https://www.rt.com/in-motion/325529-madonna-imagine-paris-memorial/
How about a song for these people while she’s at it — I suggest that all time favourite — Koombaya…
Yemenis seek justice in wedding drone strike
Anger rises after apparent US drone strike killed 12 people on the way to a wedding last month.
http://www.aljazeera.com/indepth/features/2014/01/yemenis-seek-justice-wedding-drone-strike-201418135352298935.html
Perhaps Geldoff could gather the biggest stars together and they could make an album in support of the people of Iraq, Libya, and Syria who have been bombed ‘back to the stone age’
The good thing is — we are on the winning side… we are winners… we are winning
https://www.youtube.com/watch?v=pipTwjwrQYQ
Oh hang on… what’s this…. doesn’t sound much like winning to me http://www.today.com/health/charlie-sheen-reveals-hes-hiv-positive-today-show-exclusive-t56391
“Fast Eddy says:
December 9, 2015 at 1:23 pm
There are no solutions therefore Carter is irrelevant.”
Nonsense. There are solutions, just they aren’t very palatable to most people because they involve a lot of DEAD PEOPLE.
Knock down the Global Population of Homo Sap to say 1 Million Human Souls and Mother Earth will heal herself in no time.
RE
You seriously think taking the population from 7.5 billion to one million could be seen as a ‘solution?’
Sounds more like Armageddon to me…
Oh and btw — how would those million people keep the 4000 spent fuel ponds from exploding exterminating them?
Last I looked you needed BAU to keep these high tech facilities operating — there would not be BAU on any level in the future you envision.
If anyone were to survive — they’d be living in very primitive conditions…. they’ll probably wish they had died with the billions of others….
I not quite sure why Carter made the comments he did — he is not a stupid man — and he’d know that we either grow or collapse — he’d know that you can’t grow without burning fossil fuels (see Gail’s nice chart above)…..
Perhaps he was hot for Joan Baez and was trying to impress her with a little Koombaya of his own?
I want to know if we have any volunteers to “jump ship” to cut down to that number of say one million! Boy, we are talking just about everyone here on this blog…
Maybe we can select by this method?
https://m.youtube.com/watch?v=LrCzSIbvSN4
Usually this question is asked not as a true question but to end discussion about the circumstances we face. I am not sure whether that was your intent or not but considering our circumstances the question whether there are any volunteers to “jump ship” is a reasonable and logical question despite taboos that run quite deep.
As I’ve mentioned previously… I will make sure our truck is topped with diesel when the SHTF…. and I will disable the air bags …
If things get really rough … particularly if the violence is overwhelming… we will be volunteering to opt out …. straight into a rock cut at 150km per hour…
Nobody will get a yoke onto Fast Eddy — and nobody gets their way with the females of this house…
The mother in The Road opted out….
FE that technique leaves quite a bit to chance in the way the kinetic energy could be distributed. The potential for prolonged suffering is substantial with that method. A quick web search will reveal organizations involved with this topic and much more reliable and humane techniques. While the technique you describe incorporates your endless taste for drama and perhaps a element of style I would guess that your love for your family is stronger than that taste.
I reckon pedal to the metal without seat belts and air bags into solid rock would be terminal… I am not about to start injecting chemicals into people to off them… nor will I start shooting them…
I know someone who organizes euthanasia for people in a country in Europe where it is illegal…and she tells me that pills are not ideal — many have a fail safe that causes you to vomit if you take too many….
I like the truck idea — chased with a bottle of really nice bottle of single malt…
I am on my way out of country tomorrow and was thinking… on the way back it would be a good time to pick up a couple of bottles of very nice champagne…
It would be somehow ironic to toast the disaster we have made of the planet and our likely extinction with a toast no? I’ve never tried caviar — perhaps I should run up the card as a gesture to the finality of the situation and pick up a tin of that as well.
FE
As I have just been hearing about a rather nasty accident which a friend of mine saw in the army, in which a chap ran his truck at very high speed into the back of a tank – and survived for some time in utter agony (my friend had to cut him out), – it perhaps does not recommend itself as an ideal solution…..
I believe hypothermia is quite a pleasant end, which does beg the question as to the timing of Apocalypse, and one’s location (but probably possible in most parts of Britain, most of the year) 🙂
“I believe hypothermia is quite a pleasant end, which does beg the question as to the timing of Apocalypse, and one’s location”
You just need a tub full of water less than 38 celsius and you will eventually get hypothermia. The colder the quicker, of course.
Growing up in northern canada I was told that falling asleep in a snow bank was not a good idea as you might not wake up….. that would be a nice way to go!
Did he have a seat belt on?
The best drugs to jump ship (as fast barbiturates and opioids) are very controlled today. I’d like to be an ancient Roman and get legally the needed dose of opium. Those people really knew about life and death, now the corps mainly make profits promoting chronic treatements. Only hopium and nothing else, it’s somewhat disgusting
These days fast barbiturates are not even being shipped to the US as a kind of anti lethal injection action, we are having all paradoxes we want
Quite difficult to get hold of those classes of drugs … I’d hate to spend my last days sitting in a prison cell heheh….
There’s always the Jim Jones solution:
Some signs and symptoms of cynanide exposures are:
Weakness and confusion.
Headache.
Nausea/feeling “sick to your stomach”
Gasping for air and difficulty breathing.
Loss of consciousness/”passing out”
Seizures.
Cardiac arrest
Truck into rock is more appealing…. I like the idea of using a machine… ideally a Ford … but a Hilux will do….
Hilux… they bring to mind IS
As opposed, I remember Jack London’s description of a man lost in the far North, running away from a lone wolf and so fighting for life twice. Last meal a couple of days ago, in the end all the game was to still be awake for a couple of more hours, in order to reach the next hill, the next stream
And always the sweetest dream, embracing Morpheus
I believe the Hilux is the vehicle of choice for those who are unable to wage war with custom built weaponized vehicles…
I think I read somewhere that this is because many aid agencies use this Toyota vehicle so there are many available in strife torn nations…
They provide wonderful platforms for mounting large guns onto:
https://upload.wikimedia.org/wikipedia/commons/7/7b/Ali_Hassan_al-Jaber_Brigade.jpg
“You seriously think taking the population from 7.5 billion to one million could be seen as a ‘solution?’ ”
The only question is whether we go to zero or a number above that. In that context a stable population of one million could be construed as a “solution”. The real question is whether considering our behavior as a species we will reap a fate other than extinction. “Solution” can be looked at several ways. There is a “solution” coming to our behavior, whether we like it or not is a totally different question. Rest assured a “solution” is coming.
Welcome 989750, I do enjoy your getting down to brass tacks.
+++++
I was thinking of a solution as being something that would allow me to get another 30 years or so of life under BAU … purely seflish 🙂
“Rest assured a “solution” is coming.” I am afraid you are right!
The solution needs to come quickly. Overshoot can only get worse if something radical does not happen soon. The worse the overshoot gets, the less likely any it is that any large animals will make it. I personally would think that saving a few big sharks, or even a deer species would be great.
If the other option is extinction, then one million people living is a solution/victory.
Considering what our species has done to the numbers of other large mammalians, the most just outcome in the realm of cosmic ethics would be extinction. My God, if one looks at the remaining members of tigers, rhinoceros, elephants (especially in the last decade), and others in Africa. Europe has basically been sterilized of wildlife. To a large extent the continental US has few roadless areas that can be deemed wilderness.
If we are facing reductions of that magnitude, anyone nearing 60 or over best to enjoy BAU and forget post collapse. Mainly, you are less inclined to adapt and more inclined to a rapidly decline of physical dexterity and stamina. Of course, there are exceptions like our Fast Eddy
I am a fair way from 60… but I will perish along with everyone else….
I am anticipating starvation … if that is not to painful then I will not run the truck into the rocks….
Given what humans have done to the planet — I see the survival of any of us — as a devestating defeat for mother earth and all other organisms on the planet….
It would be as if she snatched defeat from the jaws of victory — according the Pandora book — she was very close to exterminating us — we were down to the last 2000 or so…
How disappointing that had to have been…. mother must have been weeping… howling in grief…
If there is any justice in the universe…. the aberration known as humans — will be completely eliminated this time.
RE is correct and perhaps is even a bit pessimistic as we could probably have a population as high as 5 million and Earth will heal. I think this type of solution is, however, predicated on the assumption that we would have to take all of the nuclear reactors off-line and dry cask or otherwise permanently store our nuclear waste prior to the population reduction. FE is correct that there is no short term solution that will allow him to enjoy BAU for the next 30 years. In either scenario there is going to be a huge number of DEAD PEOPLE.
A deluge of horror today…
“Let’s Just Hope Shipping Isn’t Telling the Real Story of China”
“For dry bulk, China has gone completely belly up,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, talking about ships that haul everything from coal to iron ore to grain. “Present Chinese demand is insufficient to service dry-bulk production, which is driving down rates and subsequently asset values as they follow each other.”
http://www.zerohedge.com/news/2015-12-10/lets-just-hope-shipping-isnt-telling-real-story-china
Credit Suisse Warns On China: “Some Companies Are Having To Borrow To Pay Staff Salaries”
http://www.zerohedge.com/news/2015-12-10/credit-suisse-warns-china-some-companies-are-having-borrow-pay-staff-salaries
Brazil Faces Disastrous Downgrade Debacle: Here’s What You Need To Know
http://www.zerohedge.com/news/2015-12-10/brazil-faces-disastrous-downgrade-debacle-heres-what-you-need-know
http://mathsp.com/new-site/wp-content/uploads/2015/11/tick_tock_wall_clock.jpg
The first of the articles you link to says, “It is this slowdown in China’s debt creation that is the true reason behind the global growth slowdown experienced both in China and around the globe.” This hits the nail on the head, in my view. Unless debt can keep increasing by leaps and bounds, demand stagnates or falls, and commodity prices “tank.”
What is behind this is Beijing’s crackdown on the type of debt creation used by local governments. Previously, (as I understand the situation) these governments were given growth targets and freedom to reach these targets using as much debt as needed. In January, 2015, the central government withdrew guarantees for the Local Government Financing Vehicles, so local governments cut back on infrastructure projects like roads, subways, and reservoirs.
Somehow, this withdrawal of government guarantee sound a whole lot like the link that Stepheun recently gave us, with respect to the Federal Reserve removing its backup funding for banks. http://www.examiner.com/article/fed-votes-to-end-original-mandate-of-being-the-lender-of-last-resort-to-banks All of the guarantees on banks, allow them to invest in risky operations. I suppose one reasons could be to try to rein in bank operations, by putting them more at risk. But the net effect for the economy can be bad, if we really need rising debt levels.
“Credit Suisse Warns On China: “Some Companies Are Having To Borrow To Pay Staff Salaries”
http://www.zerohedge.com/news/2015-12-10/credit-suisse-warns-china-some-companies-are-having-borrow-pay-staff-salaries
————————————————————————————————————–
The good ‘Ol Chinese have learned from the West and the results are the same:
“when monetary policy fails to give the economy the defibrillator shock it needs, authorities must resort to fiscal stimulus and if the likes of Citi’s Willem Buiter have their way, China will just print bonds for the PBoC to monetize (nothing like printing a liability and buying it from yourself with another liability that you also print).”
The Chinese situation is worrying. I doubt that they are really very good about classifying “non-performing loans” as non-performing loans. They are trying to keep everyone employed, even if no one needs their steel (or other goods). If they start laying off workers (which they very much don’t want to do), there will be a lot of non-performing home loans.
DENVER POST(today?)
Page 16A
AS OIL PRICES STAY LOW, ALASKA GOVERNOR PROPOSES INCOME TAX
by Becky Bohrer
Juneau, Alaska – Alaska Gov. Bill Walker has proposed instituting a personal income tax for the first time in 35 years as the oil-dependent state looks to plug a multibillion-dollar budget deficit amid chronically law prices. In laying out his budget plan Wednesday, Walker also proposed using the fund that provides annual checks to most Alaskans to generate a stream of cash to help finance state government. Alaska has been using savings to balance its budget but is blowing through its reserves at an estimated rate of $10 million a day. the governor warned that if the state stays on its current track, drawing down on savings, the dividend is in danger of ending in 2020. Alaska isn’t alone among oil-producing state to experience hard times as oil prices stay low. But unlike states like Texas or Louisiana, Alaska has few other industries to make up the difference. In recent years, oil has provided about 90% of the money available for lawmakers to spend. That’s down to about 75%, the state Revenue department says. Oil flow through the trans-Alaska pipeline peaked at about 2 million barrels a day in the late 1980s but is averaging close to 505,000 barrels per day this year. Alaska is one of seven states without an individual income tax, and it’s the only state to have repealed an existing income tax, according to the Tax Foundation, an independent tax policy-research organization. The income tax, as proposed, would generate about $200 million a year, according to the Walker administration.
I noticed an article about this. Oil is nearly always taxed heavily–even in the Bakken. Canada has been pretty generous (low) in its taxation of the Oil Sands, because production is so high cost.
Without oil, and the revenue from oil, it seems like much of the population of Alaska would leave. The current operation of the pipeline is near the minimum operating level of the pipeline. If prices were very high, it might make sense to heat the pipeline so that more oil could be extracted. If prices stay low, I wouldn’t be shocked to see it closed altogether.
“Without oil, and the revenue from oil, it seems like much of the population of Alaska would leave.” Where are they going to go? Detroit? I agree with your sentiment however. Without the oil checks AK shuts down. A lot of wealthy people up there however and they are not going anywhere. The thing is this. If someone in the lower 48 is in need they get food stamps or move. If someone in AK is in need a gill net gets put in the water. Happens everyday of the week. Is it sustainable if everyone is doing it? Probably not but their population is relatively low.
“I agree with your sentiment however. Without the oil checks AK shuts down. A lot of wealthy people up there however and they are not going anywhere. ”
They will if they suddenly have to pay hundreds of thousands of dollars more per year in taxes. At some point, they will have to pay more tax, or lose services. That’s a pretty massive shortfall for a place with only three-quarters of a million people.
I am afraid I am not quite understanding what you are saying. People will stay in AK, because the cost of moving is so high, and there are not better job opportunities elsewhere? They are rich, and don’t really need to move? The government has the resources to provide the benefits they need to stay?
People are already leaving the state in droves, as Shell and others have pulled out they lose their jobs directly or as the services dependent on them get shuttered. Alaska is a boom and bust economy and now we are in the bust. This isn’t the first time either. We had a huge bust in the 1980s and thousands of people just pick up and leave. Its really cold here 6 months of the year, their families are elsewhere and there are better jobs in the lower 48 for the under educated. Hold on long enough up here and you can pick up a mcmansion in Anchorage for half the cost.
Hold off a little longer and you’ll be able to pick up a house in Alaska – or anywhere — for free.
If you have a couple of strong horses you’ll also be able to fill the garage with a range of luxury vehicles for free.
Artleads,
“AS OIL PRICES STAY LOW, ALASKA GOVERNOR PROPOSES INCOME TAX”
It is quite amusing to watch the so-called “hardy and independent” Alaskans who propose to hate government, start whining now that state government is too poor to provide the services that they really desire. Like roads being plowed and teachers in schools! There is simply no alternative to taxes once oil falls below $50/barrel here in Alaska except going back to the really good old days of the pioneer in his cabin, trapping and hunting for a living. That would certainly be better for the environment here as about 9/10 of the people would leave.
The fewer people around post SHFT … the better…. couldn’t ask for a better outcome
Yes, low human density is really the key to the issue.
Really, Gail, you should consider to put all this in book form, in order that human beings of 2090 will understand how and why the civilization bubble had burst. And think of the poor historians of 2590! How could they write the story of our demise without your logic and clear explanations? (In this case, I suggest you have “print” some copies in parchment, because paper don’t last.) Cheers!
Where are these historian of 2590 going to go to find her book? Maybe humankind should be developing an underground hall of records for such books, along with blueprints for all modern electronic and mechanical devices. Somewhere that will be known to future generations, yet protected through collapse and subsequent dark times. Not an easy feat.
“Maybe humankind should be developing an underground hall of records for such books, along with blueprints for all modern electronic and mechanical devices. Somewhere that will be known to future generations, yet protected through collapse and subsequent dark times. Not an easy feat.”
Isn’t that part of what the Library of Congress does? Stores culturally significant documents and other media in vaults, to be preserved in case of global thermonuclear war, or any other catastrophic event?
The US Government has at least a couple large underground facilities in old limestone mines that are supposed to be able to survive nuclear war; they probably already have copies of all sorts of useful stuff.
Thanks for the info., Matt. Good to know.
Uneasy task, to say the least:
http://energyskeptic.com/preservation-of-knowledge/
Some key assumptions you are making are: (1) humans will be extant in 2590; (2) of those alive in 2590, there will be some educated enough to call themselves historians. Nevertheless, a book by Gail would be nice. Parchment is also more eatable than paper.
BTW, per the Wiki, paper printed in Guttenberg’s time (late 1400’s) is still holding up rather well about 500+ years later.
“Nevertheless, a book by Gail would be nice. Parchment is also more eatable than paper.
BTW, per the Wiki, paper printed in Guttenberg’s time (late 1400’s) is still holding up rather well about 500+ years later.”
Memex is supposed to be able to last 500+ years. Bonus that it doesn’t have too much other use, and is not easily re-used, unlike paper and parchment. Gold lasts, but has the unfortunate tendency to get melted down and reused. Vinyl and glass are both too brittle. Doesn’t look like we’ll be making self-repairing or self-replicating machines.
Vellum and parchment are particularly delicious to various insects and rats (the latter make lovely neat half-circle patterns on the edges as they munch their way through.
Traditional glues are also quite yummy from the insect and rat perspective, not so PVA. There are glue-less forms of binding, for instance Japanese/Chinese.
Book-worms do not cause as much damage as rats, they tend to bore a neat very small hole and get out,
Vellum is remarkably durable otherwise, and a book bound in vellum can be rolled up and unrolled with no damage, and be thrown against a wall or the floor with no harm caused: maps for travellers were often bound in that way.
There is no reason why a book written/printed on, and bound in, vellum should not last thousands of years with correct storage (it need not be technologically complex vaults) in certain climates.
Nothing survives the heat and humidity of parts of Asia for long – texts would have to be regularly copied and re-bound.
I have handled books printed in the last quarter of the 15th century in which the paper -made from linen rags – was perfect and the ink still glossy from the press.
The best quality leather binding can last a thousand years easily, it would have to be full-thickness pig or goat.
What lasts is the living word: Shakespeare’s boast that his poetry would outlast even monuments to the rich carved in marble or cast in bronze – although of course few people know any of his poetry by heart today and it is perpetuated in print.
Knowledge has been preserved traditionally in tales and songs, and also in proverbs. Fairy tales point to great truths, applicable to life – spiritual technologies.
If the knowledge is relevant to the society, and that society is living within the solar budget farming, hunting and making things by hand, it will mostly be preserved without the need of any technology intervening such as books.
Although we have the disappearance of the medical arts of the Greeks, and then the Arabs, to warn us that some very useful skills can vanish almost totally and very rapidly….
Good points. Memorization, through rhymes and songs, was much more important in times past. Now we have young people filling their heads with video game strategies.
Young people don’t even know what a song is these days. Look at the comments on these instrumental pieces, and search for the word “song”:
https://www.youtube.com/watch?v=QqPO9DvI9uw
https://www.youtube.com/watch?v=WoqsvmKyhXo
I once countered, in YouTube comments, that a song was what you sing. Came the reply: “No, a song is just a piece of music. That’s what song is.”
Yes, but I wonder how the plans for your basic radio transmitter can be preserved in song! A poem about Germ Theory? Or perhaps a ballad about water purification would be nice. How about a play entitled “The Big Bang!”
In Alaska
I quite agree, a great many things which we believe to be valuable and essential now cannot possibly be preserved or communicated with song and poetry. They are not intended for that.
Our ancestors got along well enough without germ theory, let alone our various toys of rather dubious value, which delight us while destroying the Earth. It will all vanish like a dream.
On the technological level, the making of things has always been communicated by demonstration and emulation, from master to pupil; and basic principles preserved in simple rhymes and sayings. From our current level of ultra-sophistication and complexity we forget this.
For instance, everything I Iearned about fine bookbinding had been passed down from man to man since the end of Rome, and I am not exaggerating: in all that time, no-one learned the techniques from books, there was never a gap in passing the tradition on, even in the worst periods, and there were no instruction manuals. (In fact, I was very amused to see that when the compiler of a technological dictionary asked for details in the 18th century, the binder he consulted deliberately gave him false information rendering the entry completely useless!)
Speaking of personal knowledge, being where you are,any advice on the selection, and quirks in the character of, Malamut dogs? Grateful for any advice!
Maybe James Kunstler is already working in “World Made by Hand – Part II, The Songbook”. I’m envisioning some titles: “Wash your Hands (Twice)”, “Lets do Some Water Boiling”, “The Pruning Ballad”, “The Clogmaker”, “I’ll Meet you, Mary, at the Compost Pile”, “Comfrey Godess”, etc. I bet he will sell millions of copies!
We already have the TV show “Big Bang Theory”. Very informative, too!
Maybe some “instruction” can be built into the human built infrastructure (even though the existence of such would be dubious). A lot of lessons were perhaps embedded in rock art that has endured for many millennia.
xavier,
As always, you are a perceptive fellow. Perhaps, oral tradition and the passing of wisdom from father to son is, like instinct, the only truly sustainable method of transmitting information. Its just so hard to say goodbye to all of that hard won knowledge! As for Malamutes, I can speak with quite a bit of authority on this, as I owned and ran a team of sled dogs for several years when I lived above the Arctic Circle. My advice to you is to breed in some mutt DNA such as Alaska Husky (basically mongrelized malamute) into your Malamutes as this will toughen them up and make them smarter. If they breed true, they tend to be moody and rebellious. If you mix up the genes a bit you get a really loyal, intelligent, working dog. They will also defend you and your camp from marauding bears. What are you going to use them for?
Yeah I know I’m assuming too much, but if there are people in 2590, there will be certainly a ruling class, and if there is a government is more than certain that there will be taxes and… historians/chroniclers, because rulers like to have their exploits sung and their legend transmitted. Possibly the big question is will the chronicler of 2590 able to understand the english language of 21th century?
A tough variety of paper can last centuries, I agree, but not the poor quality paper, I suppose, that we have today. And of course humidity, rodents and insects are the biggest enemies of cultural transmission.
But I must confess I was not really thinking in the future historians when I suggest Gail to put in paper her knowledge, but in myself. I would love to read “The History of Our Demise For (Possible) Future Generations”, by Gail Tverberg.
Yes, I need to do this. Good title! One problem has been how to make the story not too depressing.
I’ve tried composting junk-mail paper, and it’s hard to do. I believe it is often mixed or coated with plastic.
Vellum is perfect in this sense, it is not recycled but rather reused
“I’ve tried composting junk-mail paper, and it’s hard to do. I believe it is often mixed or coated with plastic.”
Maybe burn it and use the ashes.
Thanks for the idea. I have thought about putting some of my recent posts together into a PDF book. But that is not very helpful for people in 2090.
I have run into several problems with a printed book:
1. I keep discovering more of the story. If I take time out to write something different as a book, I can’t work on new things at the same time.
2. Images, especially colored images, are a real hassle in print. They send the cost of the book through the roof. Publishers want very high quality images–not simply the ones that are easy to print. Making black and white images to substitute for colored images is a hassle as well.
3. If a person quotes anything at all, publishers now want big fees for allowing you to use the quotes. I am not using a lot of quotes now, but it still gets to be a hassle and expense. The Internet is more liberal (although probably not PDF books).
4. The big emphasis on print books is on promoting them, so that many people will read them, so that the high fixed costs can be covered. I am not sure that I want to spend a lot of time peddling books.
5. Book publishers don’t really do much today, because their profits are so low. The work falls back on the author, whether a “regular” publisher publishes the book, or it is self-published.
Very good reasons to forget the book and stick only to blogging, I recognize. But it’s a pity, because I feel there’s not many people in the world as able as you to see all the picture and connect all the dots. Cheers!
In October I was on the book release of the deep ecologist and “friluftsliv”-king Nils Faarlund: http://permaliv.blogspot.no/2015/10/friluftsliv-en-dannelsesreise-nils.html
I spoke with the publishers. They were a small publisher of young people. They told they didn’t earn anything on their publishing, or at least very little, and did all the work on their spare time. They had used a lot of time helping Faarlund editing the book though. All for idealistic reasons.
Book publishers in general have been faring very poorly in recent years.
Books for university classes have become more and more ridiculously priced, often costing as much as $200 per book. Students choose to simply “rent” an online version. Part of the problem is the high cost of colored images. Part of the problem is the high cost of editing books with limited circulation. The high cost problem is made worse by wanting new versions every year, or professors wanting their own version of a book (consisting of a chapter of one book, a chapter of another book, and perhaps a few chapters the professor himself has written).
“In 1975 the Canadian ecologist and population activist Dr. Jack Vallentyne introduced to the world a concept he called the “Demotechnic Index”. It is the ratio of the amount of all technological energy a person uses in a day (energy from oil, gas, coal, hydro and nuclear power) over the average amount of energy they get in a day from the food they eat.
…
The Thermodynamic Footprint, expressed in Human Equivalents, quantifies in general terms the amount of damage that our technological activity is causing to the planet’s life-support systems. This activity, driven by the energy we use in our daily lives, causes as much damage to the planetary systems we depend on as 135 billion people would if they were living in their raw human state, as hunter-gatherers.
It is estimated that there were about 5 million people living on the planet just before the invention of agriculture 10,000 years ago. Modern human civilization today has about 27,000 times the impact on the planet as did our ancestors of that time.”
http://paulchefurka.ca/TF.html
Jean-Marc Jancovici has made a similar calculation, to determine the number of “energy slaves” each of us has at disposal:
“”Slave equivalent” (still fictive!) that correspond to the French energy consumption in 2011, with the above described assumptions. Most Europeans are in the same rang, and thus have the equivalent of 400 to 500 slaves 24 hours a day! (without the imports, that represent an additional 100 in France).”
http://www.manicore.com/anglais/documentation_a/slaves_graph2.jpg
http://www.manicore.com/anglais/documentation_a/slaves.html
Sometimes, when the slave equivalent numbers are given, readers seem to think that the only things that those slave do is operate current cars and provide current electricity. The graphs you link to point out other uses–building and maintaining roads, for example, and building and maintaining all of the infrastructure. It is awfully easy for folks to think that if they personally cut back a little, it will fix the economy. In fact, a huge share of the economy is hidden, and the energy slaves are working behind the scenes, making the goods a person buys and gets shipped from Amazon, as well as our food, schools, medical system, and many other things.
As you say, one has to trace back where everything we use comes from. I have been making little paper-pulp orbs (Boulders are made too but take so long that they are rare.) They used to be solid paper pulp, but now I’ve discovered a new trick. I scrunch up junk mail and light packaging material into rough orb, affixing the shape with masking tape. That becomes the core of the paper pulp orb. Due to the FW insight on tracing the materials back, I am now aware of all the materials in the core and where they might have come from–at least, I acknowledge the need for the curiosity, even though I don’t literally try to figure it out. I’m also conscious of all the different kinds of paper and their ingredients and manufacturing/transportation processes that comprise the pulp. Even the water I soak it in has been pumped from a well and transported by pipes to my home. So, these little orbs come in like metaphors for the world.
They dry very hard and are super light. A builder who bought one of the more solid (but still light) ones thought the orbs would make for excellent insulation in side walls. I’m working on an insulating experiment with the current ones.
Another (I think) insight of FW is that it isn’t only the ecological footprint that matters, but also the cost? So I’m not a purist with my materials. I buy exceedingly “cheap” oil products to suit my art/lifestyle. But a lot of training goes into the conceptualizing of that use…
Some of these measures of “ecological footprint” don’t count what is paid to humans as wages. Humans use their wages to buy food (that is raised with petrochemicals and shipped long distances) and they drive to work. They drive or fly on vacation. Their homes are made with fossil fuel products and heated using fossil fuels. They also omit cost of purchasing land, and interest payments on debt. This is one reason I tend to stick to costs. Cost rolls together a larger share of what actually goes into making a product. These payments go to someone.
And some things just cannot done by slaves…. for instance… slaves could not perform the function of coal in providing the energy to smelt ores to obtain metals…
The result looks a lot like the energy slave concept. It seems to be based on barrels of oil equivalent, for all energy products combined.
Back when we were hunter-gatherers, we used about three times the energy of the corresponding animal that did not use supplemental energy, at least according to one estimate. My impression is that this analysis does not that into account. Instead, it assumes that we were like a very large chimpanzee or something similar. If it did, the ratios would be lower.
“In 1975 the Canadian ecologist and population activist Dr. Jack Vallentyne introduced to the world a concept he called the “Demotechnic Index”. It is the ratio of the amount of all technological energy a person uses in a day (energy from oil, gas, coal, hydro and nuclear power) over the average amount of energy they get in a day from the food they eat.
…
Conclusion
The Thermodynamic Footprint, expressed in Human Equivalents, quantifies in general terms the amount of damage that our technological activity is causing to the planet’s life-support systems. This activity, driven by the energy we use in our daily lives, causes as much damage to the planetary systems we depend on as 135 billion people would if they were living in their raw human state, as hunter-gatherers.
It is estimated that there were about 5 million people living on the planet just before the invention of agriculture 10,000 years ago. Modern human civilization today has about 27,000 times the impact on the planet as did our ancestors of that time.”
http://paulchefurka.ca/TF.html
Very useful analysis as far as it goes. But as is often the case with Gail’s use of the concept of “expensive energy” the analysis seems confined to limited considerations of monetary price, which is oddly blinkered for someone with history in the EROEI community.
In terms of externalities imposing costs on related goods, fossil fuel prices have been rising ever more sharply, ever since their combustion by-products could no longer be fully absorbed by the ecosphere without ever more costly disruption of the ecosphere (climate, air pollution, water pollution, etc.).
What would be an authentic per-unit price or cost of abrupt and near term civilizational collapse, mass extinction and human die-off? What is planetary life, a species, a civilization, an individual worth? What remains of worth in a theory of economics unable to arrive at a sane valuation of such? What sort of value would the concept of monetary price retain in an insane theory of value? Even in the understated terms of the Wall Street Journal’s article of May 18, 2015 on IMF research along these lines:
WASHINGTON—Consumers should be paying a whopping $5 trillion more a year for energy to cover the hidden health and environmental costs of using fossil fuels, the International Monetary Fund said Monday.
http://www.wsj.com/articles/imf-estimates-trillions-in-hidden-fossil-fuel-costs-1431958586
How much overall, then, would a net reduction of the carbon intensity of our overall economic activity be worth if the balance could be shifted from mindless consumer production to infrastructural transformation, if such a shift (downshift) were to keep us on this side of runaway climate catastrophe?
Of course Gail will rightly remind us of the embedded fossil fuel energy in our “high-cost” renewables, but it is possible to imagine a massive (though not necessarily much larger than our faux-keynesian QE for the 1%), WWII-scale, full-employment, crash transformation, instituting a debt jubilee, restoring banking as a public utility with massive interest free credits, to reduce first the carbon load of our transformative infrastructure (low-carbon manufacturing facilities such as Tesla’s gigafactory for public transit, solar, wind, micro-hydro, energy-conservation retrofits, resource extraction and recycling) as we move to eliminate non-essential consumer spending, ration the essentials, reduce population and shrink our overall economic activity.
Will all this happen? Highly unlikely. Might we be better off if we could face our crises squarely enough? Quite possibly. Sometimes I despair at the sheer dead-end airlessness of the no-exit lessons in learned helplessness that this blog provides.
It really does get tiring trying to explain to people why they are so horribly wrong…
All I can say is remember Fast Eddy when you are fighting over the boiled rat meat
This Blog is somewhat at the end of can-kickin-road. A natural reaction would be: “We must do something about it”, hm yes, when was Malthus again ? yep around 1800.
Seems we need to invent some new machinery: A Co2 Sucker that sucks all the anmount of fossil fules ever burnt in the form of gaseous co2 out of the atmosphere (IPCC thinks this can be done) A time machine to stop the burning of fossil fuels in the past. A fusion reactor (dont forget to file the patents tomorrow). Monetary perpetumm motion machine : check, exists. And of course Door knobs that can be operated with your smart phone: check!
So seems we are on a good track record 🙂
Right, this is a good way to think of deflation vs. inflation.
Deflation implies the currency price of something traded in the economy falls to zero. Impossible, since everything that people are willing to buy and sell will have some price attached to it. Notice how I said, everything that people want. Yes, if people don’t want something, it can fall to zero. But across the economy in general? No, that can’t happen.
Inflation implies the currency price of something traded in the economy rises. That’s it. Inflation doesn’t imply it rises to infinity. It just rises to some amount over some specified period of time, and at some level many people just get priced out altogether.
“Right, this is a good way to think of deflation vs. inflation.”
I don’t think any school of economics uses the definitions you provided …
My understanding of mainstream Keynesian / Neoliberal economics is that inflation/deflation is change in the Consumer Price Index (CPI), a selected basket of goods that changes over time. The CPI typically does not include energy or food. So, there can be a decrease in the basket of goods, which is deflation, while energy and food can increase.
My understanding of the Austrian school thinking is that inflation / deflation is the increase / decrease in money supply times velocity.
Neither of these adjusts for changes to incomes, to show affordability, nor do they separate what people need from what they want, or consider keystone resources like oil to be so vital as they actually are.
Deflation, at least during the Depression in the US, showed up as the expense to grow food or livestock was more than the price willing to be paid for it… an oversupply or a lack of wages to afford it, if you will. Call it a “glut”. Much the same as commodities are supposedly in a “glut” .
Milk was dumped and livestock ordered killed and dumped to try and elevate the asking price by reducing supply. It didn’t work so well as the farmers could not pay their mortgages and were evicted ala Grapes of Wrath. Today, the commodities suppliers cannot pay the bills and are in the same boat.
I suppose oil , coal ,and minerals could also be dumped to raise prices, but the producers still won’t be able to pay the bills and will go bankrupt and lay off workers who will have even less money to buy the goods and on and on in a deflationary death spiral.
It’s a vicious circle that reinforces itself on the way down.
‘I suppose oil , coal ,and minerals could also be dumped to raise prices, but the producers still won’t be able to pay the bills and will go bankrupt’
The thing is….
We are already seeing mines close …. but the price of coal is not responding as expected….
This is related to the same problems we have now. Return on human labor (in terms of wages) was too low, so workers could not afford the output of the system.
This was in the period when farmers were being displaced by more horse labor (because of better metal tools), and more mechanical labor. They could get low-paying jobs in the city. There was also a debt bubble that deflated. The debt bubble enabled the “roaring 20s.” With low wages of workers, and without the debt bubble, demand fell too low for food, and for other commodities. Oil prices dropped then too. If we believe BP’s inflation adjusted prices, the oil price per barrel was as high as $36.26 in 1920. In 1926 it was $25.13. By 1931, it dropped to $10.10 per barrel.
ConocoPhillips Cuts Capex Amid Intractable Oil Rout
It’s a bad time to be in the commodities business. Crude is in a veritable tailspin as an increasingly disjointed OPEC ramps production to three-year highs and thanks to a worldwide deflationary supply glut, the Bloomberg commodities index is sitting near its lowest levels of the 21st century portending doom and gloom for prices across the entire commodities complex. On Thursday, we get the latest round of desperate cost saving measures as oil major ConocoPhillips slashes capex by some 25% and looks to raise $2.3 billion from asset sales.
http://www.zerohedge.com/news/2015-12-10/conocophillips-cuts-capex-amid-intractable-oil-rout
Yet another Anglo American.. Glencore… Noble Group…. in the making….
Asset sales…. who is stepping up to buy these ‘assets’ — wouldn’t all the other companies in the resource business be getting hammered by these low prices — why would they be shopping around for distressed assets? Surely they would be aware that with there is not driver (China) to re-inflate the commodity bubble…. so why buy resource assets at any price?
This exemplifies exactly when — when BAU goes — the oil that is in the ground — will remain in the ground — forever.
“….who is stepping up to buy these ‘assets'”
My guess would be financial institutions that repackage them into AAA graded securities that are then sold to the administrators of 401k plans and pension plans…much the way the subprime mortgages were dealt with.
I know a lot of bad oilco debt is in pension plans right now.
I know pension plans have always been big investors in oil companies. I expect it would be intermediaries–not necessarily the pension plans themselves–that would buy up the assets, and sell them back to pension plans.
I am not sure I have the reference, but pension plans own something like half of all securities. People who are self-funding their own retirements own a big chunk too. Social Security and other government programs could not do this kind of attempted pre-funding, simply because there are not enough securities in the world to allow this kind of pre-funding to happen. If we could completely get rid of retirement (and disabilities)–in other words, people could not expect any support beyond the time they could support themselves financially, it would help our debt default problems a whole lot.
We live in a democracy where young people don´t vote but old retired people always do. The population pyramid, baby boomer generation and echo effect, problem was clear all the way from the 70s, but no proper solutions could be institutionalized because those in power always tried to stay in power -get the votes.
“If we could completely get rid of retirement”
Lost the link, but Lagarde made some statement on that line…
I worked on the “non-life” side of things (things like medical malpractice and workers compensation). It was very early on that I learned that Social Security and Medicare were funded on a pay as you go basis (with small adjustments, that really don’t fix anything, because the government spends the money anyhow). I think I was a little shocked at first.
With Workers’ Compensation, the coverage is lifetime. So if someone gets hit on the head when the person is 16, and lives to be 96, and needs to stay in a mental institution for the whole time, Workers’Compensation will pay for it. I figured this out when I checked out how a claim could be open for a very long time–say 80 years. The premium for the coverage is paid in advance. Medical malpractice covers birth injuries to infants. In most states, the person affected has until age 18 or 21 (plus 2 years) to file a claim. This creates a problem for coverage. Most doctors buy “claims made” coverage that covers claims reported during a period. Hospitals are actually more prone to claims, because they have more easily-attachable assets. So even non-life actuaries have to deal with very long time periods.
Upon Argentina’s history and making some correction to match full capitalist standards, I think the sequence could be something like this:
1- Haircuts to bank accounts
2- Haircuts to pension funds
3- Helicopter cash and eventually hyperinflation
You are from Argentina, right? It helps to have some people with an understanding of the situation to give their view.
It’s an incredible place, you can be sure of that.
And we like to believe we are the very middle class among all nations. Something like Australia but kinda blurred mirror image, or latino style
I suspect the hidden hand of the central banks in all of this
Thanks! I notice there is another mention of the problem being caused by OPEC. When I look at OPEC oil production, by far and away the big increase in production has come from Iraq. Why isn’t anyone complaining about that? Or am I just not looking in the right places?
“Why isn’t anyone complaining about that?”
Is it because everybody knows financial imbalances can be fixed much easier than the lack of real stuff?
Giving shale is peaking only Iraq still grows, for how long?
Excuse me, not sure what I’ve said makes any sense
We think financial imbalances can be fixed much more easily than the lack of real stuff.
It seems that way, but is that really true? We don’t have a high level organization that can forgive debt anymore. We end up with banks are cut off funds needed for payroll, or savings of individuals. In a way, loss of payroll funds is worse, because that makes it very hard for a business to hire workers.
I don’t know, forgiving debt is not the way financial compensation is being achieved today (excepting Ukrainian debt to Russia)
But don’t worry too much because of Iraq:
http://oilpro.com/post/20528/isis-undermining-iraq-oil-production-potential
This year, it is Iraq’s oil production that is up a lot. It is by far and away the country with the largest increase in production in 2015. In 2014, Iraq averaged production of 3.265 million barrels a day. By November of 2015, their production was 4.307 million barrels per day, or more than 1.0 million barrels of oil a day more than in 2015.
Saudi Arabia had the second largest increase. Its production averaged 9.683 million barrels of oil per day in 2014. In November 2015, its production was 10.130 million barrels per day, or about .455 million barrels per day higher than in 2014. The total increase in production was 1.6 million barrels per day between 2014 and November 2015 (according to the OPEC report), so these two countries created pretty much the full increase in production.
If demand is down, perhaps we want to reduce Iraq’s output.
It is remarkable KSA increased production, they didn’t tryied to boost the price. It’s probable they don’t think it’s possible to do it this way.
Between ’87 and ’02 (id est, the “normal” period between both spikes) inflation adjusted price was around $30, and I would be surprised in case demand can’t support this level.
Did OPEC increase just offset a decrease elsewhere or did global output augmented as well?
Iraq is the country with the biggest increase in production, but Saudi Arabia’s increase in production has been better publicized.
Saudi Arabia has a need for fuel for operating its air conditioning in summer. I wonder if some of the increase was for internal use. Saudi Arabia also needs the revenue. If the price is down, the way to get more revenue is to pump more oil. I don’t think that there was any way Saudi Arabia could have gotten the price back up. The problem we have extends to many types of commodities besides oil. There would need to be a huge cut in oil production–more than Saudi Arabia could afford.
Global production seems to be higher now, thanks to rising production in OPEC. But falling demand seems to be part of the problem as well.
Deflation …that’s how BAU ends….
Oh and btw — for those who believe it ends in a flurry of hyperinflation ….
You might keep in mind that one of the reasons for the glut of commodities that is contributing to the collapse is ….
You got it — money printing — tens of trillions of dollars Euros etc….
All those trillions have resulted in MASSIVE overcapacity in the commodity industries… and now that the biggest consumer of those commodities – China – is tanking —- along with global demand in general…. the deflationary bust-up is picking up a nice head of steam —- and the train is heading towards a mountain-side…
This time is definitely different. Very much so….
http://www.zerohedge.com/news/2015-12-10/china-exports-most-deflation-us-financial-crisis
What is going on here?
Simple: with all of its domestic markets fully saturated, China has had no choice but to export its soaring commodity production as we explained in “Behold The Deflationary Wave: How China Is Flooding The World With Its Unwanted Commodities.” This is how Bloomberg qualified the problem:
Shipments of steel, oil products and aluminum are reaching for new highs, according to trade data from the General Administration of Customs.
That’s because mills, smelters and refiners are producing more than they need amid slowing domestic demand, and shipping the excess overseas.
The flood is compounding a worldwide surplus of commodities that’s driven returns from raw materials to the lowest since 1999, threatening producers from India to Pennsylvania and aggravating trade disputes. While companies such as India’s JSW Steel Ltd. decry cheap exports as unfair, China says the overcapacity is a global problem.
The flood of Chinese supplies is roiling manufacturers around the world and exacerbating trade frictions. The steel market is being overwhelmed with metal from China’s government-owned and state-supported producers, a collection of industry associations have said. The nine groups, including Eurofer and the American Iron and Steel Institute, said there is almost 700 million tons of excess capacity around the world, with the Asian nation contributing as much as 425 million tons.
Low-cost supply from China in Europe prompted producer ArcelorMittal to reduce its profit forecast and suspend its dividend. India’s government has signaled it’s planning more curbs on steel imports while regulators in the U.S. are planning to lift levies on shipments from some Chinese companies.
“Deflation …that’s how BAU ends….
Oh and btw — for those who believe it ends in a flurry of hyperinflation ….”
Hyperinflation is not too much inflation. Hyperinflation is what happens when governments and central banks react to deflation, and cause the death, or near death, of their own currency.
Printing money alone doesn’t do it; it is probably not the volume, but the velocity that causes the hyperinflation. When people have to be paid every half a day to go buy stuff, since the price will double the next day.
Deflation has limits; as some point, things cannot have a negative price. It is the cries of the people, demanding the people in charge DO SOMETHING! That is most likely what causes the panic.
Oil is $40 per barrel – it needs to be $120 for oil companies to continue producing it. I think we agree that there is no way oil can be flogged at anywhere near those levels without destroying growth….
The people can scream ‘DO SOMETHING’ until their eyeballs bleed and their heads turn purple … they can elect Trump.. Le Pen…. Hitler’s great grand son …. they can pray to Jesus or Allah or Solar Jesus….
It won’t matter.
Bernanke said he feared deflation more than anything else…. we are starting to see why.
Every currency is being devalued to help boost exports. Central banks fail with money printing as the currency devalues but exports can not go up as no one wants to import but to export too, dubble whammy.
Yes, getting deflation exported to us is a problem. We were counting on inflation to get rid all of the debt. Deflation works the wrong way.
Dear Finite Worlders
Here is a comment by BW Hill on Peak Oil. I don’t think I have heard anything expressed exactly this way before…Don Stewart
‘Goldman is probably pessimistic because money is moving in the wrong direction as far as they are concerned. The recent price plunge has some interesting ramifications that unless they were looking at an energy model of petroleum production they completely missed. Even though the consumer section of the economy is getting less energy from petroleum than it ever has, per BTU it is now paying less for what it is getting than it has since 1973. That effect is moving money from the the production side of the economy to the consumer side.
This is strictly an artifact of the monetary system, and can not be fixed without replacing the system. It has been that system that has made the likes of Goldman Sachs fabulously rich. Beginning in 2012 when petroleum passed through the energy half way point the rules of applied economics got turned around. Instead of money moving up the economic ladder, it started moving down. Even though everyone is getting poorer, the production side is getting poorer faster than the consumer side. That probably does not sit well with investment banks.
We would like to inform you that this trend will continue; and there is not one single thing you can do about it!’
Dear Don,
I am a “Fan” of BW Hill and would like to follow the threads you cite here. Could I please ask you to tell us the URL where you get this information from ? Thank you. MM
Dear MM
If you Google the exact words that Hill used, you will be directed to the original post at Economic Collapse…which doesn’t do you any good because where Hill commented was on the Peak Oil site which reprinted the Economic Collapse article. The articles on Peak Oil can be scrolled, but the comments cannot…so far as I know. So, once the comment scrolls off the bottom, I think it is lost forever.
Somebody may know how to find it again, but I don’t.
Hill is coming out of left field, which interests me sufficiently that I try to do a quick check periodically to see if he has made some comment. I for sure don’t try to read ALL the comments that people write in response to the articles that Peak Oil reprints.
Don Stewart
Thank you. Ill try to look new info up with the help of goolge 🙂
MM, peakoil doesn’t have a link to comments, but, the thread is here:
http://peakoil.com/consumption/guess-what-happened-the-last-time-the-price-of-oil-plunged-below-38-dollars-a-barrel/comment-page-1
scroll through the comments to shortonoil on Thu, 10th Dec 2015 7:50 am
MM, You can read and post to BW Hill (shortonoil) on “The Etp Model, Q&A” thread here:
http://peakoil.com/forums/the-etp-model-q-a-t70563.html
Thank you for the link. I dashed through some of the discussions.
It is interesting that all of these arguments come up again and again:
There is plenty of oil in deep wells
prices will go up again
There is plenty of oil left, its just the mop up of a glut
RE will replace fossil fuels soon
The question remains for me, what is more depressing: The predicament or the people denying the facts of the predicament.
The (current) last post says it all:
“We are currently running at maximum available energy throughput. We can not increase it and whatever additional load will be put on to the system, something else has to give.”
Is this the end-of-the-year sentiment or the end of can-kicking-road?
I would like to discuss your views about the maximum power principle:
On peakoilbarrel I found the thesis concerning this principle that a species competing with another species on a limited resource hast to extinguish the remainder species to eat up all the resources itself. We could say this leads to the fact the humans will destroy all natural habitat that competes with human needs in the long run.
I have claimed before that reducing resource usage to 25% could maybe stabilze the planet but mayne this simply does not work because we MUST increase resource usage and our only path is to go to a planet with an artificial surface and later start to explore the stars. Exploring the stars also means to build an artificial environment to travel through space for several years.
So the “goal” so to say is to finally “wipe” (or better erode ?) the planet and redesign it in an artificial way?
ok, so far so good. So we must somehow solve the energy question. So let’s say, we build up millions of RE plants and hundereds of GenIV reactors, we could solve this problem and it seems that for a while some resources are still left do go on this path. The question is, will it be enough or will we get stuck half way down with no more extractable resources left and it was a waste of time anyway.
I know that some readers here think BAU has to end also because we have to keep some of the planetary environment in tact. But let’s assume, keeping the planetary environment is useless and we must shift to an “artificial” environment. How are your bets:
1. Yes, we could go this way. We must let go the evolved environment and create an artificial environment anyhow, let’s start building it now and we will succeed.
2. It is useless because the resources are already used up and the transistion window is already closed. The end of the humans is already baked in the cake.
I would like to see your thoughts on this and let’s assume for a while that the financial stuff does not matter.
Until we limit the number of people no new economy works. Also I do not believe we can built a new system due to lack of resources to do so. I also do not believe we can build the new system fast enough to keep the 7 billion alive.
But we can go down the path of building genIV and RE and some areas and some people may survive.
As artificial environments go, we can choose from:
– A greenhouse
– Vertical greenhouse
– Earth sheltered vertical greenhouse
– Earth sheltered vertical greenhouse with poultry, rain water tanks and/or Aquaponics and thermal curtains
Oh, and we can choose to build a compost and a masonry heater. That´s about it, as artificial environments go.
MM, we are dismal in any environmental stewardship, check Biospehere 2 experiments: https://en.wikipedia.org/wiki/Biosphere_2
No space for us.
“As artificial environments go, we can choose from:”
They don’t have to be greenhouses, they can be artificially lit. It sounds like indoor vertical farming in a clean-room like environment with no microbes might be a promising alternative.
“MM, we are dismal in any environmental stewardship, check Biospehere 2 experiments”
That appears to me to be extremely ill-conceived. Trying to create 5 radically different biomes and have them all interconnected. I would start with focusing on what you need to recycle the air, water, and food for the intended human population, and probably work on mimicking a single environment first. Also, use an hierarchical structure, like soldiers; not have a bunch of scientists all squabbling with each other. You only need one officer with a bachelor’s degree.
Also, I would start of with a one year supply of prepared food, since it obviously takes time for plants to start producing – in fact, for most fruits etc you don’t want them to produce fruit the first few years, you normally want to trim off the buds and let the plant focus on getting established.
That is interesting how they failed to have stable carbon dioxide levels, leading to fluctuations that killed off all the insects and most vertebrates.
Biosphere 2 was interesting but if one wanted to do serious engineering They should have started with a small prototype say a quarter acre with no people inside.
Part of their problem was the stainless steel that formed the bottom of all the rooms. It reacted chemically with the environment. Important lesson acres of exposed reactive metal are not a good idea for your long term biosphere.
I’ve been banging on about this for years—and been told that in the inevitable period of ‘downsizing’ humankind will be nice and neighbourly to each other.
The simple fact remains that humanity has engaged various techniques of competitive survival over 80k generations (give or take) to arrive at where we are now.
What the nice n neighbourly lot are saying, is that we will be able to undo those 80k generations of ingrained behaviour in a single generation, and start being nice to one another.
Should I be sceptical?
“What the nice n neighbourly lot are saying, is that we will be able to undo those 80k generations of ingrained behaviour in a single generation, and start being nice to one another.
Should I be sceptical?”
It seems to me the only way to remove aggression, risk-taking and competitiveness would be to drastically reduce testosterone levels. The best way to do that would be castration of young males, and since the vast majority would not consent, it would have to be done covertly using a chemical agent.
First, create an epidemic or wait for one to naturally arise. Then, have the vaccine which also contains the chemical castration agent, with some sort of time delay mechanism.
That way, you would have a populace of docile eunuchs instead of aggressive, competitive, violence prone young males to deal with during the transition.
Without such measures, I would be extremely skeptical that people will calmly accept a 95% reduction in their standards of living. Particularly if the down-stepping is not applied equally; if some wealthy or “important” people were allowed a higher standard of living, for example.
It’s a trap, Matt. Because of humankind’s overly aggressive nature and dominant status, we own the planet. We can do with it what we want, but the reverse side of being top dog due to our aggression is our very nature works in our best interest in the short term and worst in the long term. The exact opposite of some lower species that holds a niche in a multi hundred million year harmony with it’s surroundings. Our history has been and will continue to be marked by flashes and dimming. Expect extreme violence on the flip side of peak oil. There will be the non-wealthy that hold on due to their violent nature and the wealthy that hold on due to their assets either by sequestering themselves away from the masses or by paid protection. Owning an island far away from civilization and stocking it really well is probably the best strategy, but then maintain surveillance to defend against any kind of invasion and just hope if there is, it’s a small invasion force that can be quickly annihilated.
Very true.
There are few places where one could hope to escape violence and invasion, whether from without or generated from within, it’s our nature: the history of the Ancient world and the early Middle Ages shows that people will travel immense distances and be remarkably persistent when looking for land, food and shelter.
There is almost nowhere that has not been invaded and the scene of genocide at some point in history.
Even relatively secure, difficult-to-conquer places can be disturbed and made vulnerable by internal quarrels and treachery: the English took over Ireland, Wales, and India by exploiting internal wars, and almost but not quite managed it in Scotland.
The island fantasy which attracts so many seems to have little to recommend it, although it might work for some people in the very short term.
The Inuit, who did not have the social organisation or need to wage war, seem to have developed strong social mechanisms to repress violence, but even among them, needing nearly all their energy and time just to survive, terrible feuds and vendettas took place, and the kind of random violence out of the blue common to repressed societies: I suspect that is what we would see on even the most perfect Desert Island!
It seems to be the case that only highly-organised states can eliminate that kind of violence.
I suspect that the violence probably escalated, as the ratio of population/resources went up. If they could keep the population down, the need for violence would be a lot less.
microbial life own this planet, not us
If microbial life forms disappeared, all larger life forms, including us, would be dead in a week.
When we go, bacteria and their kind won’t even be aware of the fact. To them, we are merely prairies to graze on. They have been keeping us alive for millions of years, we didn’t even know they existed until the 1700s.
Right now, their power is being held off by the force of our industry, (basically hydrocarbon based energy systems) when that is no longer available to us, the little critters will return in force to wreak vengeance for our affrontery in trying to bump them off.
While we have been congratulating ourselves on our cleverness at becoming the ‘dominant species’ they have been quietly regrouping and mutating into new and more deadly forms. In the meantime we in our obsession with ultra cleanliness have been weakening ourselves against their imminent return.
Doom just keeps on giving, doesn’t it?
I was surprised to find out recently (From a researcher operating in that area) that even when it comes to food preservation techniques, microbial life constantly evolves to circumvent our latest efforts to improve the time food can be stored. We have to continue to add new techniques, just to stay even. Not too different from our problem with antibiotics that fail.
“When it comes to food preservation techniques, microbial life constantly evolves to circumvent our latest efforts to improve the time food can be stored. ”
This is news to me. Where did you hear that? I want to know more.
Gail, perhaps this guy was rather willing to sell his stuff, there is no change whatsoever in main food products conservation chemicals (here at least)
Human micro parasites evolution is more widely promoted, but we mainly continue to use the same drugs as a generation before, or more
Diminishing returns in microbe killers too, as far I can see. Ancient pests are likely to return, and I wouldn’t blame hygiene nor I’d advise against
MM,
an artificial environment, like the “Square Bubble” in which most of us are living today and that we’ve been building up for millenia, requires huge amounts of energy, just to be run and kept as separate as possible from Nature.
We’re just starting to realize it was a very bad option, as we’re not able to take all parameters into account, as Nature does since earliest deep times.
It’s a lesson of humility, and we’ll soon learn the hard way that the only viable paths are those designed by Nature. The bad news is that Sapiens may not be adapted to wild life, as the fire (external energy) was mastered long before our appearance, which means we were born and able to thrive only with help of external energy, and probably aren’t able to make do without.
Thank you all for your replies.
I would sum it up like this:
We are way too many people that all need energy throughput. The energy throughput can not be reduced as the people here are adapted to a complex machinery operating at full throttle that no one needs to go hunter gatherer. When the lights go out its musical chaisrs time. After the bottleneck: not many people left, sustainable for the time beeing.
Beeing able to create some sort of island for some people to survive would be welcome but it is not sure if you can build such a thing (and not have it destroyed by the hordes) and maintain it for several years.
“… assume for a while that the financial stuff does not matter.”
1. People are mammals, not machines. One of the reasons that people are going crazy is that they have inadequate exposure to nature. Destroying all of nature will just make people more depressed, and violent.
2. You must have resources to “build up millions of RE plants and hundereds of GenIV reactors”. The point of Gails site (unless I have been misreading consistently for several years) is that resources are limited.
3. Our food, much construction material, and most of our good clothing, comes from a more or less natural environment. Take the advantages of being able to use natural resources to obtain those goods away and BAU goes away as well.
4. The financial stuff matters.
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On the question of debt forgiveness, perhaps, but then I don’t expect it to be a major part of the equation for systemically important debts. It is basically default, with little or no collateral to grab.
Think like the playground. The playground is all about bullies and their alliances. That’s how human systems reorganize themselves in times of distress.
My greatest fear is in fact propaganda. I’m terrified of the pernicious affect that the media and all of these screens and entertainments has on people. People are dumbed down by them. In America this is definitely true, I have seen and experienced it with my own eyes. I don’t know how true this is for everywhere else. This is important because people may lack critical and clear headed thinking at exactly the moment that they need it.
Most people see the “flip side” of debt. They see the money in their bank account. The pension their mother is going to receive. The health care policy that is going to pay medical bills. The money saved for children’s college education. When the debt disappears, the things people notice will likely be the money they thought that had, or had coming to them, that won’t be there.
I find Syrak destabilization to be a global bug, because it impairs HC extraction in both fields where output can still grow: iraqi oil and South Pars/North Dome gas
Perhaps the global system is too loaded for NATO-Russia competition, and a bit of cooperation would allow a more perfect depletion of resources giving us a couple of extra months of living. War is seemingly a suboptimal path in this case: some HC will stay in the ground because of geopolitics, not because of EROI/finances
Gail, do you think this “suboptimal depletion” concept makes sense?
I think “suboptimal depletion” is to be expected on the downslope. In fact, that is a major reason I think peak oil theories that base future production on geological constraints are nonsense. When the population is fighting one another, they don’t have the time/manpower to properly service oil extraction and pipelines. Pipelines are often above ground, and often intentionally tapped by warring parties. Refineries are another problem. I don’t expect current oil exporting countries to be functioning well, a few years from now.
As things are going Europe isn’t getting any replacement for Eurasian gas, despite (or because) there are two offerers
Iraq crude could still grow if the place was stabilized and it was payed standard price
I suppose Nato geopolitics forbids Iran’s gas getting its way through Afganistan and Pakistan to India
That’s all, and local stuff elsewhere
I am not sure I understand Nato politics. In case Rushia gas pipeline proposed in 2011 was built perhaps Europe would not be dealing with deflating interest rates right now
When you hear about OPEC oil production rising, it is mostly Iraq oil production that is rising. This is why no one else over there really wants to cut back their production, to offset OPEC production.
“Fed votes to end original mandate of being the lender of last resort to banks”
“(…)
Out of all the functions and programs implemented by the Federal Reserve since the Credit Crisis of 2008, this appears to be the most confusing since it goes against the primary reason why a central bank was instituted back in 1913. And to suddenly change course seven years after the last financial crisis rocked the global banking system by choosing to shut off the liquidity spigot says a great deal about the solvency of the Fed itself, and even what the Board of Fed Presidents thinks may be coming that would find it to purposely willing to to allow banks to fail on their own accord.
With the Dodd-Frank Banking Reform Act now allowing banks to re-hypothicate its own customer’s money and accounts in the event of a liquidity crisis shows that the U.S. central bank no longer has to follow their original mandate of being the lender of last resort since it is now the public that will provide the funds to bail out banks during future crises. And with this new law being instituted not by Congress, but by the Fed itself, one must ask if the need and purpose of a private central bank is even necessary anymore, since its primary purpose is no longer being used to protect the banking system from bankruptcy or insolvency.”
http://www.examiner.com/article/fed-votes-to-end-original-mandate-of-being-the-lender-of-last-resort-to-banks
Thanks for the reminder, the socalled “BRRD” is certainly the item to watch.
Some countries are still lagging in implementation (e.g. Holand and Sweden ?), some are already inside the corral (e.g. Germany), moreover there is a big mess in transborder application of this legislation, for instance foreign branches vs. local client of said bank etc.
If it really is what it is, and we can’t be 100% certain, then it follows any real meltdown will have to wait after the rest of the countries implement it, and that’s perhaps at least 6-12months away?
Worldof,
BRRD is taking effect on January 1st, 2016. It will certainly be the item to watch, because the bondholders and shareholders don’t seem to be in full agreement with the new rules (let alone the depositors!).
That’s probably the reason why Italy just hurried up to rescue 4 of its small banks, with more classical -although weird- bailout methods:
“Italy on Sunday launched a new system set up by its central bank to save four small savings banks from failure before stricter rules for winding down lenders come in next year.
The rescue will be conducted by the Bank of Italy at a cost of 3.6 billion euros ($3.83 billion). This will be borne by the country’s healthy banks, which pay into a newly-formed National Resolution Fund, not by taxpayers.
Italy wants to save the banks before January, when new EU rules take effect under which depositors with more than 100,000 euros, as well as shareholders and bondholders will have to bear losses before public money can be used to prop up a bank.”
http://www.4-traders.com/UNICREDIT-SPA-9691785/news/Italy-launches-36-billion-euro-bank-rescue-with-new-fund-21450096/
More evidence that governments are getting out of the “propping up banks business:
Thanks! I had not noticed that previously. I am sure no one made an effort to put a notice on the front page of newspapers. I would presume it is now up to the FDIC (with its limited funds) to bail out banks, at least for a while, until it runs short, and only up to the insurance limit. Also, now banks can simply take money of depositors, if necessary. I think that they are supposed to tap bondholders first, though.
Pensions funds have a corresponding insurance plan that isn’t funded to a significant extent. I can’t imagine that anyone is going to step in and fund them either.
We were talking elsewhere in the comments about the situation years ago being that the temples and palaces were the ones to whom debt was owed. They could easily forgive them, so that was a relief valve for the economy. Now we have a situation where the government may in theory have the power to act as a relief valve, but it is running away from that responsibility. We get back to the closed bank problem of the Depression (or something close to equivalent).