Reaching financial limits–What kinds of solutions are available?

We live in a finite world. At this point, we seem to be reaching limits in several different areas:

  • Cheap oil. Our economy runs on cheap oil, but there is a limit to the amount of cheap oil that can be pulled out of the ground. There is still a lot of expensive-to-produce oil left, but this is not a substitute for cheap oil.
  • Fresh water. Fresh water is used for drinking, for growing food, for producing oil and gas, and for creating electricity, among other things. In many parts of the world, we are using fresh water faster than aquifers can replenish.
  • Climate Change. Our agricultural system depends on relatively constant climate. Changes to climate, whether caused by humans or not, are a problem. It is possible that this year’s hot summer is caused by climate change.
  • Soil fertility. Soil fertility depends on adequate depth of top soil, adequate humus content, suitable bacteria in the soil, and proper mineral balance. We have been able to hide soil fertility problems through greater use fertilizers, pesticides, and irrigation, but these are not permanent “fixes”.
  • Pollution. There are many types of pollution that are problems, from excessive carbon dioxide, to mercury in food sources, to endocrine disruptors, to algal blooms.
  • Human population. The number of humans on earth is out of balance with world ecosystems and keeps growing, year after year.
  • Financial system. Our financial system depends on growth, but growth in a finite world system cannot continue forever. High oil prices tend to lead to recession, and reduced economic growth–hence the need for cheap oil, rather than expensive oil.

The question then becomes, “What can we do?”  Are there any solutions available, even if they are only partial solutions, as high oil prices and other limits squeeze the economy?

Many of us sense that we likely are not too far away from a contraction imposed by nature–something that looks like a severe recession that will help bring the world back into balance. While we probably cannot completely “fix” the situation, there seem to  be several things we can do, in the way of mitigation.

1. Manage your finances to try to avoid the impact of a possible crash. My crystal ball is not as good as it should be, but it is hard to believe that the stock market will continue to rise, as we get closer to the limits nature is imposing. Recession will hit, and the result will likely be both lower oil prices and lower stock market prices. Default rates on bonds are also likely to rise.

I am not sure there are any entirely safe investments, but actual goods and land you own would seem more likely to hold value. Cash would seem to be safer than stocks or bonds. Things like tools you expect to need in the future would seem to be especially good investments.

2. Plan your own family size with world limits in mind. Most people will still want to have children, but stopping at two would seem to be a good choice. It would be even better if families would choose to stop at one.

3. Get family planning back on the world agenda.  When Paul Ehrlich wrote the book Population Bomb back in 1968, he got the need for family planning on the world’s agenda at that time. Now, it is off the world’s agenda, as richer nations feel that the situation will fix itself, as education of women rises.  I am not sure how to get the issue back on the agenda, but free “rhythm method” classes for women around the world would seem to be a start.

Figure 1. World Population by Area based on data of the US Energy Information Administration. FSU is Former Soviet Union.

4. As layoffs hit, depend more on family and friends. Even before layoffs hit, it would be in our best interests to strengthen ties with family and friends. Then, if misfortune hits, there is a better chance of being able to move in together, if the need arises.

5. Plant trees and bushes with edible fruit or nuts. In terms of protecting the soil, perennials seem to be much better than annual plants. Complementary plants and animals will be needed as well, if long-term fertility is to be maintained. There are other things that can be done to upgrade the soil, but these generally require time and money.

6. Look for simpler and cheaper ways of doing things. The usual pattern is to move toward more complex and more expensive solutions, with ever-better technology and more bells and whistles. We need to be going the other way though–toward simpler solutions that are easier to maintain with local materials, and cheaper. LEED certified homes sound great, but what we really need is homes that are closer in size to what we usually think of as  storage sheds, and that can be put up quickly with local materials. It would be great to have state of the art commuter trains, but we need to be planning based on what communities can really afford, and that may be bicycle paths.

7. Appreciate what you have. We are very privileged now–we enjoy a wide selection of food, generally seasonable weather, and nations that are mostly at peace with one another. Every day, think about the good things that are part of your life–the squirrel on your lawn; the ability to zip around in a car or on a bicycle; the job you have that allows you to pay bills; the time you spend with family members. Even if things go downhill, there are likely still to be many good things. We need to keep looking for these every day.

8. Don’t focus too much on bad things that might happen. We really don’t know what exactly will happen. About all we can do is be flexible and continue living our lives as best we can. If we take care of our bodies by exercising and by eating well, that will be to our benefit, regardless of what happens.  Learning skills that might be helpful for the long term, especially if they are enjoyable now might be good as well (playing a musical instrument; doing crafts; studying how we coped without fossil fuels before, as through Low-Tech Magazine).

9. Be prepared for minor outages. If things go downhill, there will be more chance of outages of various kinds. The most likely of these is that you will lose your job and not be able to pay your bills. There is also the possibility that food or water or fuel for your vehicle will become unavailable. It seems worthwhile to do at least some planning for emergencies. I personally am not an advocate of hoarding, but it does make sense to keep some inventory on hand.

Energy Observations

I might note that I am doubtful that energy solutions will come quickly enough to fix our many interrelated limits problems before a financial crunch hits.

Clearly, if we have an adequate supply of cheap oil substitutes, we can continue to hide many of our other “limits” problems. For example, if there is enough cheap oil substitutes, countries like Saudi Arabia can get water from desalination, so fresh water ceases to be as much of an issue an issue. Soil problems are also less of an issue, if we can continue to use fossil fuels for fertilizer and irrigation.

There are some renewable energy sources that may be helpful for individual families, but don’t really fix our problem with a lack of cheap oil.  For example, solar can be used by families for heating hot water, and a reflective solar cooker can be used for cooking. Neither of these directly substitutes for cheap oil, though. Wind and solar PV can both be used to generate intermittent electricity, but again, this is not really a substitute for oil, certainly not in the time frame to prevent a financial crash in the next year or two.

The closest substitutes for oil are biofuels, but these are in direct competition in the use of soil for food. The next closest would seem to be natural gas, since existing vehicles can be converted to use natural gas. Even this takes time and money, so I am not convinced that natural gas, if available, could prevent a contraction in the next 12 to 24 months. So in the end, we find ourselves thinking about what other solutions to a potential financial crash are available, besides oil substitutes.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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152 Responses to Reaching financial limits–What kinds of solutions are available?

  1. 10. if It’s possible try to leave the big cities.(?)

  2. reverseengineerre says:

    Learn to identify Wild Edible Plants, learn to Fish and Hunt using Bow & Arrow or Atlatl, move to the lowest Population Zone you can with the most natural resources and form a Community with others of similar mindset and skills. Train the Biggest Dogs you can for defense and hunting. Have the right clothing for your climate and good Guns and plenty of Ammo for defensive purposes.

    The only other reasonable Option is the Sail Paradigm. That’s the one Dmitri Orlov is following. Live aboard a Blue Water capable sailing vessel and know places you can go very far out when TSHTF. Like Tristan da Cunha, Edinburgh of the Seven Seas far out. Have good fishing gear aboard, water desalinator and again, Guns and Ammo.

    RE
    http://doomsteaddiner.org

    • Ikonoclast says:

      Bad choice. Tristan Da Cunha is a volcanic island. Next time it erupts it could be like Mt St Helens or the movie Dante’s Peak but on an island! Nowhere to run and you can’t outsail a pyroclastic flow racing across the sea surface at several hundred mph.

      And has Dmitri Orlov watched Waterworld once too often?

      If you need hunting gear, survival gear and an arsenal of guns to survive then you better be younger than Bear Grylls and have equal or greater skills. Or guess what? You won’t survive!

      Bottom line, by the time things get the tough, 99% of us will already be dead.

      • reverseengineerre says:

        Never know where a volcanomightbloworan earthquake might hit.I’m only talking about avoiding best you can the economic dislocations. I live in on of the most volcanicallly and geotectonically active places on the Planet,but it is STILL a better bet than the Lower 48.

        Also while it would be nice if I was as fast as I was 20 years ago and as strong, you do learn a lot the older you get. Its not a lot different than when I was a small boy facing down bullies bigger than me. I could not fight them on my OWN, I had to enlist the aid of some BIG BOYS by making friends, doing their Homework for them, whatever.Never got beat on ONCE. Making FRIENDS is IMPORTANT.

        Now I have a different job, teaching youger stronger guys what I know. The KNOWLEDGE has value. I won’t last that long, but that is not important really. I just hope to stay alive long enough to see it all come crashing down, and pass on some of what I know before I walk into the Great Beyond. After that, its up to the next bunch to make a go of it in the Better Tomorrow. I’ll pass on what I know, and then I go in PEACE to the Great Beyond when the time comes.

        RE

    • You may very well be right. Unfortunately, the number of people the world can support with this model is pretty small. Your ammunition will run out pretty quickly, so in the long run, it is your dogs and your “hunting/gathering skills” that will matter. But “hunting/gathering skills” can’t be too good, or you will wipe out your food supply. You also need to learn how to make clothing pretty quickly, since your clothes will wear out in not too many years.

      Unfortunately, your model is not something easily explained to the uninitiated. If people dig deeply enough into the issues, they will run across this model themselves.

      • reverseengineerre says:

        The fact the paradigm supports fewer people than Industrial Agriculture is the reason you live in the lowest population zones possible. Siberia, Nunavut, Alaska, Lousiana Bayou, Amazonia are among the better choices. The Guns and Ammo are only for defense for a short time from other groups of Homo Sapiens similarly equipped for a couple of seasons. Most of them won’t be around that long. You definitely try to avoid contact with other groups as much as possible for a few years.

        Far as hunting out the game, that never happenned in any of these locations, and the fish also never were fished out. Not enough people lived in these environments to consume the other wildlife faster than it reproduced.

        As far as digging deep for all the information, it’s not that hard to find. You can start from http://doomsteaddiner.com and work your way out on the Links from there. Primitive Living and Rewilding are among the most popular and well researched topics covered on the Diner.

        RE

        • Thanks!

          Any more news on your theory about heat coming from the center of the earth, rather than atmospheric warming?

          • reverseengineerre says:

            The Good Newz would be that it appears we reached Peak Quakes in terms of frequency between 2004-2007 maxing out at a little over 30,000 Quakes/year of any magnitude globally. The Bad Newz would be that the largest magnitude quakes greater than Mag 5 are still showing significant and steady increase, with concomitant high energy releases far greater than thousands of Hiroshima Bombs dropped each year. These along with numerous 7+ quakes releasing energies which dwarf the Tsar Bomba, the largest thermonuclear device ever detonated.

            You can do the calculations yourself Gail, you’re an Actuary. The increased Energy Release coming from the Earth over the last 20 years dwarfs the Heat Content of all the Oil and Coal burned since the beginning of the Industrial Revolution by several Orders of Magnitude. No contest between Mother Earth and Homo Sapiens as to who can ramp up Energy Release more. Its like the Dallas Cowbows taking on the Pop Warner Fotball Team from Timbuktu. If you know any Physics at all, you know by Conservation of Energy it has to go somewhere. What is the Biggest Heat Sink on the surface of Planet Earth Gail?

            You want to check this for yourself, go visit Dlindquist’s website and the USGS Earthquake stats.

            http://earthquake.usgs.gov/earthquakes/eqarchives/year/eqstats.php
            http://research.dlindquist.com/quake/historical/

            RE
            http://doomsteadiner.com

            • I think I mentioned earlier that when I went to an actuarial meeting last year, one of the topics being discussed was the rise in large magnitude earthquakes, and the fact that it was of concern to insurers. So I wasn’t surprised at what you were showing.

              My physics is pretty limited. I’m afraid I don’t know how to compare earth movement to other types of energy. (I do know the energy has to go somewhere.)

          • reverseengineerre says:

            The Law of Conservation of Energy states, “Energy is neither Created nor Destroyed, only transformed from one form to another.”

            In the case of Fossil Fuels, the potential energy stored as chemical energy in the Bonds between the Carbon atoms. When burned with Oxygen, said energy is released as Heat. In the case of Nuclear Energy, the stored energy is inside the Nucleus and is far greater, and when Fission or Fusion occur, again you get energy released as Heat, along with High Energy radiation in the form of Gamma Rays and X-rays. In Earthquakes, you have the potential energy stored mechanically, and the movement of large masses in the end is transformed into vibrations which transform to Heat.

            ALL of them are measured in the same units, Joules,Calories, BTUs whatever. There is no fundamental difference between them all. In any event, when a Quake goes off, unlike a Nuclear reaction it cannot change any of its mechanical energy into high energy radiation, it all has to go out as Heat.On the surface of the Earth, all this Heat really has one mainHeat Sink, and that is the Ocean which constitutes about 75%of the surface material, and Water has the second highest Heat Capacity of any known compound, the only greater one is Ammonia which does not exist in anywhere near the quantity water does on Earth.

            The only place for the Energy released by Quakes is into the World Oceans, and from there it gets radiated out into the Atmosphere in a variety of ways. Many by increased Evaporationof the Water, driving more of it up into the atmosphere. Thus you get the kind of extreme rainfall situation you see now in the Manila and in Shanghai, where apparently if you BELIEVE Chinese Stats they relocated 1.5 MILLION People.

            There are other synergistic effects to consider from the changing gas mix in the atmosphere, but overall albedo effects tend to offset greenhouse effects so overall atmospheric temperature is not rising that rapidly.The primary source of the increased energy input here though? Not the Sun, not the burned Fossil fuels either. Its coming from deep down inside the Core of the Earth. for whatever the reason, the Earth is dissipating at least one order of magnitude if not 2 greater energy now than 20 years ago. That is LOT of energy to transform to Heat.

            RE

            • Thanks!

              It had never occurred to me that the energy of the greater number / strength of earthquakes would be stored in the earth’s ocean as heat, or that the magnitude of the stored heat would be as high as you say. (Of course, my physics background is mostly what I have “picked up” here and there.)

              I remember that you posted a graph of the higher ocean temperature. Also a description of where you were able to calculate this from.

              You have also shown links to the rise in earthquakes, which seems to have tailed off a bit recently. Have you done an actual calculation of the amount of energy that would be stored from the increase in earthquakes to connect the two?

              Is this all in one post, or multiple places? I am not as good using your search engine as you are, and I sometimes forget what I have read where.

          • reverseengineerre says:

            The original article I wrote is actually a compilation of stuff I wrote together with a Geology buff named Stormbringer who I met on the Peak Oil message board. Together we ran one of the longest running threads on the board which went hundreds of pages deep during the Yellowstone Quake Swarm. I put it together in an article on the Diner

            http://www.doomsteaddiner.org/blog/2012/04/02/geotectonic-ocean-heat-transfer-theory/

            In terms of total energy, the increase in Heat Content of the Oceans is greater than the summation of all the energies of the Quakes alone. However, quakes are not the only method by which the Earth dissipates Heat, Vulcanism on the sea floor is extensive around the subduction zones and there is direct thermal radiation through the crust as well below the sea bed where it is the thinnest. Sort of like a pot of water on a Hot Plate.

            The best way to see the correlation between the two is to overlay the graphs of the Quakes with the graph of the increasing Heat Content of the Oceans over the 20 year time span, they match in lock step.

            The most frightening correlation is one I came upon later, which is the rapidly decreasing pH or acidification that is resulting from this. It probably comes from two places, increasing Sulfur emissions from subsea volcanoes and melting Clathrates releasing gobs of CO2 from the ocean floor and bubbling it straight up through the water. This produces Sulfuric, Sulfurous and Carbonic Acid. At current rates of acidification, it probably takes no more than 30-50 years before the Ocean is too acidic to support any shell based sea life like Coral Reefs. How long the phytoplankton can last is a more difficult question, because they probably can adapt to higher acidity to an extent. If the phytoplankton collapse, we are of course all dead, Oxygen percentage in the atmosphere will drop rapidly after that and all higher animal life will go to the Great Beyond in short order.

            One can take a certain amount of HOPE looking at the now decreasing frequency of quakes that this will level off before it collapses the phytoplankton. However, the energy dissipation is still quite large because the most powerful quakes are still on the increase. Only Time will tell on that one..

            RE

            • Thanks! I see that the ocean heat content graph is actually one from a NOAA web site you link to. http://www.nodc.noaa.gov/OC5/3M_HEAT_CONTENT/ No one can complain that you misinterpreted NOAA data.

              My chemistry background is only a little better than my physics background. I was presuming that the ocean acidification problems were coming only because of too much CO2 in the atmosphere. If the exposure is really form the bottom as well, this would increase the speed of acidification.

              If there is a different avenue of ocean/climate disturbance that is taking place, it seems like it would be worthwhile for someone with suitable background to write an article for an academic journal on the issue. Or perhaps post some comments on a blog that discusses more climate issues, where other climate modelers “hang out”.

          • reverseengineerre says:

            That would be me except I have the same opinion of Academic Journals I do for MSM outlets like Bizness Insider and Financial Sense. In terms of discussing this on one of the Climate websites, that would be a bit like a Marxist arguing for Communism on Zero Hedge. The Anthropogenic Group Think would swamp you in no time. Discussing it with Guy McPherson for instance is like talking to a brick wall.

            RE

            • It seems like there is this issue with anything controversial that a person tries to write about. There are so many entrenched authors with a point of view that they are “wedded to” that it is hard to get anyone to listen. Researchers live in silos, so the idea that another field might have something to add to the discussion never crosses their mind.

    • Jan Steinman says:

      “form a Community with others of similar mindset and skills.”

      NO! There are too many struggling “forming” communities out there already!

      Instead find and join a community with others of similar mindset and skills!

      BTW: We could use some help!

      • reverseengineerre says:

        Joining an already established Community is probably the better way to go in most cases, I agree with that. However,finding the “right”one which fits your own Philosophy and which seems to be on the right track is pretty tough. I have had chats with many folks who have visited Transition Towns for instance who came back with the impression they were very unrealistic in how they were preparing for the collapse. On the Commune level,many are organized around specific Religious beliefs, and if you do no hold those beliefs or are willing to take them on,you don’t fit in and itprobably does not work for you. Besides that, there is always a Hierarchy in such Communes, and the later you Join up, the lower down you usually are.

        Anyhow, the Diner is kind of a Hub for anyone interested or already involved in such Planning, so you should drop in and tell us about your Community and how you folks are prepping up. There are quite a few Diners currently seeking good Alternatives for when TSHTF.

        RE
        http://doomsteaddiner.com

    • reverseengineerre says:

      **Note: I reposted an Excerpt of this discussion on the Diner Blog under the Title “Geotectonic Ocean Heat Transfer Theory Revisited”

      http://www.doomsteaddiner.org/blog/2012/08/10/geotectonic-ocean-heat-transfer-theory-revisited/

      RE

  3. robertheinlein says:

    Overall a good post with lots of good ideas. My enduring complaint about this blog’s concentration on oil is that there is a lot more renewable energy available out there than just oil. We soon be able to harness heat via thermoelectric generators right out of thin air (think of John Galt’s motor if you will—it’s not that exactly, but it’s close and we have a patent on the process) to create electricity and from that, almost anything else we want: clean water via desalination, or motive power via electric cars and trucks, etc.

    This is not to say we will have clear sailing, however. We have a minerals shortage that is even more of a showstopper than almost anything else, but even that can be allieviated by mining the oceans for minerals. Once we get rid of the population problem (however that happens and history tells us wars are generally the solution the human race has turned to in order to reduce population), we can live sustainably on this planet. In other words, we can wait for the asteroid that’s going to destroy us eventually because we never moved out of the cradle.

    Alternatively, we may have already pushed the Earth past the limit on its ability to reign in heating. With temperatures in the Arctic zooming up several times faster than the rest of the planet, even if we stopped producing greenhouse gases right now, the amount of carbon dioxide and methane already in the atmosphere may be enough to tip us into runaway warming. If that is the case, living underground may be the only real solution to survival.

    • Leo Smith says:

      “We soon be able to harness heat via thermoelectric generators right out of thin air (think of John Galt’s motor if you will—it’s not that exactly, but it’s close and we have a patent on the process)”

      And where is the heat going to come from? And if you have such, why on earth would you announce it here?

      Looking for funding and investors are we?

      ….My other name is Dogbert..

      • robertheinlein says:

        Development is proceding, albeit very much slower, without outside investors. It would certainly be faster with investment money, but those routes are closed off for whatever reason. Investors want the device to be completed before they are willing to invest. Once the device is complete, no investment money is needed (the device will sell itself). Hence, no outside investment in new devices is possible in today’s financial environment. I submitted several ARRA funding requests to the DOE for related technology. The most that came out of the effort was that one of the DOE reviewers from the University of Pennsylvania stole that idea and got the grant instead. As far as where the heat is going to come from, that’s easy almost anywhere on Earth. Right now, we have excess heat almost everywhere. The generator is able to extract heat via an open thermodynamic cycle from the environment into a TEG even if no differential temperature is present. The result is that some of that heat is converted into electricity. The patent number is 7,816,601 if you want the technical details.

    • My view is that renewables (and, in fact, electricity substitutes in general) are not going to make a meaningful difference to our liquid fuels problem. We have too many cars, trucks, airplanes, and equipment of all kinds (like construction equipment) that is built to use fossil fuels. There is no way we can make a quick change, because of the cost involved, even if we could figure out the details.

      I agree with you too that minerals are a huge problem as well, and this adds another level of problems in trying to make a quick change to electric substitutes for today’s vehicles.

      • robertheinlein says:

        I have been told by persons far more mechanically inclined than I am that conversion of autos to use electric motors is actually not hard. And, judging by a few stories I have read about local residents doing their own conversion to batteries and electric motors, it seems that it may not be the major obstacle. Conversion may not be an ideal way to accomplish it from a theoretical perspective, but it may be practical for many people. I recall that when oil prices hit their highs, several people were featured in news stories where they removed their gasoline engines and replaced them with batteries and electric motors. I think the major auto companies would prefer you bought their electric models instead, but for someone who’s already good at mechanical work, it may not be challenging to do the conversion.

        Even for those who are forced to pay someone to do the conversion, that would be a source of jobs to keep the economy growing during the transition period.

        The real problem I see is that the price of oil is acting as a governor on the economy. When it reaches well above 100, the economy dips back into a recessionary condition. Then, when oil drops to 80 or below, growth starts picking back up. So, it’s a real catch-22: we need oil prices to remain high to encourage alternatives, but high prices dampen growth and investment into those alternatives. As much as I favor libertarianism, I’m afraid the government may need to force the conversion to electric motive power because the free market just isn’t getting the job done. And, the market probably will never be able to accomplish such long range goals because it concentrates on maximizing short term returns and letting the long term implications kill the system.

        • I agree on the oil price acting as a governor on the economy.

          The issue with electric vehicles is not the engines; it is the batteries that go with those engines. There are a lot of “issues” with them–short lived, expensive, require inputs from distant lands, polluting, heavy, time necessary for recharging, drain on grid when recharging occurs, etc. Even if you get the car converted to electricity, and one set of batteries, you are still not done with the process, since you will need replacement batteries in a few years.

          • robertheinlein says:

            Actually, there’s a neat solution to the battery problem.

            Capacitors have advantages and disadvantages compared to conventional batteries. Capacitors can be recharged much faster because batteries have to be chemically recharged while capacitors simply take a charge on their plates directly. The disadvantage is that, in general, capacitors cannot store as much electrical power as equivalent-sized batteries. One of the other advantages of capacitors is that they can undergo literally millions of charge-recharge cycles whereas chemical batteries are limit to a few thousand cycles.

            New developements are very promising on both fronts:

            1. New batteries will soon hit the market which will have far more storage than existing technologies. DOE says that they will be able to store electricity for less than $100 per kwh. But, then, DOE is a beehive of crooks who cannot be believed without independent confirmation.

            2. But, the more exciting possibilities revolve around supercapacitors which can store similar amounts of power for about $50 per kwh. And, the technology that gets us to this level is very immature at the present time, which means the possibility is that, over time, we can push it even further in terms of storage. Moreover, the technology doesn’t depend upon any exotic materials at all and the materials it depends upon are available domestically in huge supply! This is technology which should hit the market in about one year, so it’s moving along quite nicely now. Even with no help from the snakes at DOE.

  4. Leo Smith says:

    11/. learn how to shoot without a conscience.

    Or find a better strategy to deal with a world that is about 10 times more populated than its current ability to feed itself, at any given location.

    • I am afraid I am not up to “shoot without a conscience.’

      My guess is that if population decreases, communicable diseases will play a big role. This was James Kunstler’s view in “World Made by Hand”.

      • Andrew of the Bay Area says:

        Gail, are you really not familiar with it or are you just being the seemingly nice and decent person you are (no sarcasm intended there…honestly)?

        I am fairly certain he is referring to reverting to the social situation we had all over the world before the advent of technology that tracks down everyone for everything period. Basically a kill or be killed world that is very insecure. While I am not a violent person and don’t necessarily advocate violence, I also disagree with the concept that violence doesn’t solve anything. It actually does when arguments aren’t solving things quite simply: the other party is killed and so their opinion doesn’t matter anymore. Quite Machiavellian or Real Politik, I admit, but the history of the world was basically this until modern times where now we just have little proxy wars where people in third world resource rich countries suffer for the naive “peace loving” American way of life. Yes, I am imply that we are all hypocrites. Much like the Romans, we love how peaceful our society is internally…but it is only peaceful because we fight the monsters outside and inside of our borders aggressively to make it so (increasingly less inside, in my personal opinion).

        My prediction is that in 100 years from now (when we will all be dead), if PO has taken us along the route that seems most likely, this country and much of this world will be ruled by a collection of regional warlords in fiefdoms. Power vacuums are going to create a ripe environment for the ruthless and ambitious. Look at where Mexico has been going for a clue. Much of the world will likely end up like Somalia until we get some conquer of “decency” (the cynic in me doubts that any leader actually ever cares about anything but their own power, so I’d call it a ploy, but a good one if it increases people’s quality if life and freedoms) to restore some moral and ethical truths. If one studies history, it almost appears as if these are cycles that humanity puts itself through to remember how good they can have it if they don’t let it all go to waste with petty and unrealistic political and economic goals.

        This all brings to mind a quote from Game of Thrones, one of my favorites at revealing the darkness of human bad behavior, “Life is not a song, sweetling.Someday you may learn that, to your sorrow.” ““There are no heroes…in life, the monsters win.” So many that people see as heroes today I see as monsters. Perspectives and circumstances will likely forever keep the human race divided.

        • Unfortunately, I have dug up more than I really would like to know about the issue. It is not a very pleasant topic. You may have read my post Human Population Overshoot – What Went Wrong? I think there are a couple of major issues:

          1. Mammals in general are k-selected species. That means that they hold population down through territoriality–the way male cats and dogs mark out a territory and defend it. Humans seem to have gotten around this by a variety of methods including language that allows us to understand others; trade among groups that makes working together better than fighting; and “liberal” religions that encourage “loving one another”, forgiving others, and “doing unto others as you would have them do unto you”. Overcoming a lot of territoriality is a big reason world population has been able to explode.

          2. Humans are too smart for our own good. The natural order is built on “survival of the fittest”, but we have figured out ways around this, from our earliest days, so that more of our offspring can survive. Medicine is an obvious current example. But there are a lot of earlier examples. Even as hunter-gatherers, we learned to kill off major predators and to burn down trees that were not where we wanted them. The changes we have made have allowed more human offspring to survive, overcoming natural “survival of the fittest”. This is a big reason that population has grown since the very earliest days, long before fossil fuels were an issue.

          Part of the reason that “kill or be killed” has become less of an issue is because fossil fuels allowed the world to provide food and shelter for a growing number of people. Once this is turned around, and resources become less available, it is almost inevitable that there will be fighting about what resources are available.

          We will have to see how this works out in practice. I am sure that there are some (especially younger men) who will want to make certain that they are part of the “survivor group”. But there will be others who will say, “If it is this bad, I really don’t care if I am part of the survivor group.”

          I am not convinced that there is anything that we can do to prevent this situation from occurring. (I don’t think modern “renewables” are going to make more than the tiniest difference for society as a whole, for example, although individual families may be better able to do something such as pump water for the time being.) I am also not convinced that reduced fossil fuels will be easy to handle, even if a person is determined to be a survivor. A person will run out of ammunition sometime, no matter how much he/she stockpiles. A person cannot stand guard over his garden night and day. People who are out to kill a person or steal from a person won’t announce their intent–if the resources get short enough, it could be former friends who are the problem.

          So I have not suggested that people attempt to do anything about the issue. If they are aware of the issue, and somehow think that they can solve the problem by stockpiling large amounts of ammunition and bullets, I am sure that they will do so.

          • Andrew of the Bay Area says:

            The best thing about you and why I continue to read this column is that you are a realist. Someone who relies on real facts and figures, knows enough about history, human nature and economics to truly understand reality. Sure, we all wish this was Unicorn fantasy land world where everything is “fair” but that is not and has never been reality. We just pretend a lot in this culture and lie to ourselves. I appreciate that you don’t feel the need to always focus on the negative and are able to see the bright spots as well. That’s more noble than I am, sadly. I guess I am a pessimistic optimistic in that I expect hell and am pleasantly surprised if I just get Detroit (sorry Detroit people).

            I agree with what you have written. My plan is fairly simple: right now I work at an investment firm in the Bay Area and am relatively well paid. I bought some land in far Northern California where no one goes unless they have a reason to (and the locals protect themselves but are fairly suspicious of outsiders). It’s got great mountain run off water that the State can’t steal and send to Southern California if they wanted too. My personal moral code, influenced by Catholicism but also just a general sense that their ARE moral truths in the Universe and codes of decency and honor, prevent me from being one of those would-be warlords. It doesn’t prevent me from doing everything in my power to stop them from dominating my future rural corner of the world and/or allowing them to abuse my family, neighbors and friends. I guess I am one of the believers in fighting “evil” of man head on and that peace is won through wars. I don’t like any of it, but I see it coming and I think some of us have to be ready to fight for some good and freedom to remain in the world.

            You are dead on (pun not intended, but kept regardless) about running out of bullets. That’s just Plan A. Plan B, C, and D will be bows (which I am learning how to build), swords and all the more sustainable weapons of the past. Then there’s that little matter of making sure the the “Defender” of the community does not instead become the monster, which often times has happened, sadly, throughout history. I think you stay humble, appear poor even if you aren’t exactly, and avoid conflict but don’t run from it either. Hell, the good thing about being killed is that either 1) if you lived a decent life and weren’t a monster, I doubt any higher power is going to send you the hell or the equivalent and 2) if there is nothing…I won’t know I am dead…and the world will be some other poor fools problem!

          • Leo Smith says:

            “By George, I think she’s got it!”
            Top marks for skating around the thin ice where rational reflection on probability is confused with advocacy.

            I too think that irrespective of anything that a lot of people are going to die fairly soon.

            I don’t advocate it tho 😦

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  6. phil harris says:

    Gail
    Thanks again for the discussion.
    Mitigation will depend very much on where and who you are in the world.
    The ‘hot spots’ are not nice, and will get nastier.
    Even within the USA (only 14% of income spent on food) those on food stamps are still at risk from ‘price-spikes’ or from funding withdrawal.
    Dimitry Orlov just now has a good take on food security across the world (in China 40% of income goes on food; in other places much more) http://cluborlov.blogspot.co.uk/2012/08/revolutionary-conditions.html#more
    Just a suggestion: perhaps we could reduce risk for ourselves and family by cultivating a cuisine and a taste for our food by consuming more of primary agricultural production. Grains and beans make the staple food (calories and protein) for most of the world. Supplemented with high value nutrition from the vegetable and fruit gardens, we can have a tasty and healthy fall-back. A cheap big bag of oats and ditto beans goes a long way. Such modest diets reduce cost to a family wherever you are, and are relatively good for you, lowering risk of chronic diseases in later life that are otherwise so characteristic of our ‘western’ dietary pattern. Unfortunately the epidemic of western dietary pattern is still spreading to the newly urban populations round the globe, and affluent places like Qatar are now riddled with Type2 diabetes. For the less affluent, food security even on modest diets is horribly affected by the trend in meat eating by the more affluent. Meat and biofuels production still increasingly ‘eat’ into the primary resources of land, water and fertilizer, squeezing the vast urban poor.
    PS I was not aware until recently just how heterogenous India is. I quote from a recent correspondent on TOD (“wiseindian”) where Fertility Rate in some states is now below the replacement rate of “2.0”. (China has been below the replacement rate for some time).
    Then there is the huge development gap between northern and southern states, some states such as Uttar Pradesh have a TFR of 3.5 and a literacy rate of 70% while some states like Tamil Nadu have a TFR of 1.8 and a literacy rate of 80%.

    best
    Phil

    • Ross says:

      2 really good points:

      We should now, but especially in a ‘survival’ situation (define that as you wish), remodel ours and our family’s diets to a more ‘sustainable’ (define that how you want as well) level. Eat less, eat local, eat healthy – there is a lot of synergy in these statements, but everyone should see the obvious that if you don’t buy the expensive, processed ready-meals (for example) from a hyper-mart 30 miles away you would worry a lot less about how much they cost.

      As I see it, whether population/ birth rates are a problem depends on how you draw the question, or, more specifically, the geographic boundary you apply and the dimension you’re measuring impact on. Birth rates are below replacement level in many Asian countries (http://www.becker-posner-blog.com/2012/07/chinas-one-child-policyposner.html), many in Africa are rocketing but both are normally painted as too populous by Americans (the 3rd most populous country in the world), or worse ‘irresponsible’ for having ‘too many’ children. When we say there are too many people on Earth, we mean too many to continue with our current lifestyles (i.e. unsustainable resource consumption) – there could be 20 billion if we all lived power-less lives in the middle of nowhere. In India, or any country, what can we tell from just a birth rate figure? Maybe more children or people die in Uttar Pradesh that warrants this rate? Maybe there is more land or food there that can sustain a growing population? Maybe the population was very ‘low’ (vs. what the area could sustain) already? Maybe there is a large emigartion rate? etc. etc.

      • Everything I can see says that we are “way over” sustainable population. I don’t think there is an issue with too few children, even where population is below replacement levels now. This holds regardless of standard of living.

    • Phil,

      I agree that mitigation will very much depend on where you are in the world. This is one reason I didn’t say more about specific actions.

      Diet is important in staying healthy. I eat a very low meat diet (with some fish), and I think it has been helpful in keeping heart disease and Type 2 diabetes away. We eat a lot of beans and lentils, and quite a few nuts.

  7. Shunyata says:

    Dear Gail:

    I am pleased to see this post. You cannot emphasize enough that we CANNOT spend our time fretting and we CANNOT simply hoard resources to maintain the current way of living. The only rational choice is to recognize that the current way cannot last forever, to anticipate that the transition will be bumpy, and to begin living differently now.

    Living differently now means rediscovering “community” and “family”, increasing food and shelter self-reliance, and relearning the difference between consumption and construction. The steps you have laid out are pointers in this direction.

    The difficulty is that our society literally progams us to participate in the status quo. To live differently, you have to at least become aware of your programming. To this end I urge your readers unplug all electronic communication devices for 30 days, except for purely maintaining work functions. The silence will be unbearable at first, but then you will start hearing again – and be surprised at what you hear.

    • Glad you liked the post. Some people get upset that I don’t point a path to saving the world with some new form of energy, or something similar.

      I do look at the Internet quite a bit, but I listen to pretty close to zero devices that use sound. I keep headphones at home to listen to an occasional video a reader points out, but I don’t have television, or radio, or music on when I work. In fact, we don’t own a television. Some people have commented at how quiet our house is. I find it hard to think when I have a lot of distractions.

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  9. Ross says:

    Gail, I like the blog but felt compelled to post something about this post in particular. It surprised me that, apart from friends and family, you do not mention the importance of community in human survival. Living and engaging within a community is the only thing that has allowed humans to become the dominant species – people alone in the dark will die from cold, hunger or predators – this has not changed. Communities better find, produce and share resources and can establish a range of services that a single family or small group can’t and provide for a larger number of people. Post-‘crash’ the only way we’ll all survive is if we survive together.

    I would also hold off giving any financial advice – no one can predict what would happen to ‘finance’, especially if we cannot define the ‘crash’ event we’re discussing. I think 2 things are obvious however: your money in the bank is only worth something if the bank and currency are viable and, as such, no investment is ever totally safe. I think money in some form will always exist (simply because barter systems are too inflexible), and it certainly will unless this ‘crash’ really is the end of the world as we know it. However, the only assured ‘investment’ you can make is something useful and tangible (e.g. agricultural land, foods, tools etc. as you highlighted) because even if it’s monetary value falls it can produce. Capital invested in necessary entities/ companies also produces but requires a successful company and a functioning economy (functioning, not necessarily growing or ‘doing well’).

    Ultimately, money only exists to be used for purchases, what’s the point of going into a ‘crash’ with much in the bank at all – you’re betting the currency remains stable and the bank survives and regardless you’ve not used it productively to secure things you’ll actually need during this time or for the future. If you need more money post-‘crash’ you sell something (that you have or have produced).

    It comes back to my communities point above – if large enough and solid enough communities exist post-‘crash’, the concept of using money for goods and services and therefore having savings, loans, banks etc. will continue, at least to an extent that these facilities exist, even if they aren’t ubiquitous. More interesting would be the possibility of different exchange rates/ how trade functioned town to town depending on very local economic factors (i.e. Town X has more people [more money in circulation] but Y has greater resources [money is buys you less there]) – there would be no global financial system, it’s not so far to fall for there to be no national one either.

    • I guess I hadn’t thought about the community aspect.

      It is my understanding that the Dunbar number, that is the number of people you can know and have relationships with, is about 150. Above this, we are talking about nearby strangers vs distant strangers. So to the extent that there is a small community that a person can interact with, that would be best. This is what I refer to as friends and family.

      I live in a suburb of Atlanta. My husband and two sons both have jobs within walking distance of the house. But I am not certain what group I would define as my larger community, other than my relatives, neighbors that I am friends with, and other friends I have.

      The Atlanta community is too large to be very meaningful. It also has relatively little means of food production.

      I do agree that the financial situation is “iffy”. If the bank doesn’t honor your deposit, it isn’t much good. I expect people will run up tabs in “dollars” or whatever, regardless of the physical availability of dollars. They will need to make good on their promises in services or goods they have produced.

      • Ross says:

        Thanks for your reply.

        Your comment about community where you live is remarkably prescient – I live in London, UK and was having the discussion just the other day with some visitors from Seattle, WA that the majority of Americans (those who live in suburbs of towns or cities), generally, no longer feel like they have a ‘community’ or realise as much when presented with one existing elsewhere. They observed that here we have everything within walking distance (as well as much further away) so the immediacy of those facilities creates an automatic community – e.g. many people go to the local pub in the evening, thus becoming friendly with each other. Most know the nearest shopkeeper, others the lifeguard at the pool or the waiter at the restaurant. You may not know your neighbours that well but there is an obvious community around you that persists. This was in central London, I can assure you it is even more pronounced in rural villages (where I grew up) through the extra incentive of necessity (there isn’t anywhere else to go).

        The American mass migration to the suburbs has left people without local life or facilities – everyone drives into town to get a coffee, to eat out, to do anything. You may know 2 or 3 other families nearby through your children or via work but when and where does anyone ever come together as a group? Possibly the 4th of July, if you’re lucky to be somewhere where something is put on. Maybe that’s why it’s such a special holiday? Note this is a generality, an observation, not a rule. Obviously, you can find community in your tower block in Brooklyn, or you church in Georgia, or across farms in Idaho, my point is that you struggle to find it elsewhere.

        I’m not sure this is a crisis of individualism, rather a result of the distinct American push for ‘Big’. I believe in individualism, in responsibility, provision and exception, but no one stands truly on their own – all individuals must also be part of something bigger. America has forgotten the importance of community because it was blinded by the attraction of a bigger home in the suburbs and a bigger car to drive them wherever they needed to go, both of which preclude the creation of bonds with people, businesses and facilities by proximity. The American dream is not to have 150 friends, it is to have a mansion up-state, where you probably don’t know if you have neighbours, let alone meet them regularly.

        Contrast this adult lifestyle with your child’s: children attend a local school, people are there simply because they live nearby. For years everything the child does, everyone they know is within those 4 walls (roughly). The sense of school community is immense – sports, cliques, classes, forms. Dunbar’s number or not, friendships are formed for life and rivalries with other schools last forever. Yet, almost instantly, when they graduate and leave or head to college it disappears.That level of community will never be replaced if all those children grow up adults in a detached house, on a detached estate, driving to and from a detached office or facilities elsewhere.

        Where I have hope is that we know, in an instant, this can all change – communities appear as soon as something brings everyone together. 4th of July apart, the NY blackout of 2003, sporting victories, cultural celebrations, a natural disaster, other reasons big and small – individuals respond as a community. We all know what to do deep down, we just choose to or have been guided into living in a different way for now. Have hope – Atlanta will come together, when they need to.

        • Ross,

          I think that to a significant extent, people in the US find their work to be their community. This is a problem if a person gets laid off.

          Another source of friends in many cities are “subdivisions”. Subdivisions are groups of houses that are typically built by the same builder at the same time. They usually look similar; are priced more or less the same; may have their own swimming pool, playground, and tennis courts, and have sets of rules on all kinds of things–you can’t hang your wash out to dry, what color you can paint your house, what kind of fence you can have, etc. There are sometimes groups of women that go out to lunch together, and swimming teams for kids. (I at one time lived in such a subdivision, but don’t any more.) My children would tell me that the social structure at school was stratified somewhat along the same lines–“Ha, Ha, I live in ‘Upscale Subdivision’, but you only live in ‘Slightly Less Upscale Subdivision'”. Schools in the US are made super-big, to save on administration costs, so children have to try to find a selection of friends out of the whole very large group.

          There are obviously other places people make friends. The Internet seems to be a popular site, especially to try to meet someone of the opposite sex, now. There are various types of clubs a person can join. Many people make friends at a church. All of these tend to be at quite a distance from where a person lives, though.

          So finding proper community is a problem in many parts of the US. I think churches often come closest as a solution, but distance is a problem with them as well.

    • Marvin Schroeder says:

      Cash that you have in a banks or investment firms are only virtual assets, digits on your computer screen. In our fractional banking system, roughly 90% of those digits exist as debt which needs the economy to continue to grow to be available for you to use in the future. A key component of continued economic growth is continued energy growth. As world energy declines world economic growth will slow and then decline. Debts will be defaulted and the digits on your computer screen will disappear. Banks in Spain and Greece are afraid of a run on the bank where the “actual” cash will quickly disappear. Personally, I am moving as much of my virtual assets to physical assets which would maintain value in a period of declining world economic growth. I would welcome some financial advice. I am intelligent and responsible enough to make my own decisions and live with the consequences. My question is which is more secure in a period of declining world economic growth and defaults on debt payments — cash in 401K accounts or social security payments?

      • Cash in 401K accounts depends on the financial system, as it is in years ahead. If you have invested it in stocks and bonds, it will do as well (or badly) as those investments. If the pixels go away, you will have a problem.

        Social security is basically a pay-as-you go system, with today’s young people paying for today’s old people. Since 2010, the US Social Security system has been paying out more than it is taking in. You hear all kinds of things about it being funded to year XXXX. This statement is as good as the US’ ability to make good on those bonds (which are not publicly traded).

        There are a bunch of articles in the press about the current shortfall in Social Security funding. For example How big is Social Security’s funding shortfall? An article in the Atlanta Journal Constitutions says:

        Since 2010, Social Security has been paying out more in benefits than it collects in taxes, adding to the urgency for Congress to address the program’s long-term finances.

        “To me, urgent doesn’t begin to describe it,” said Chuck Blahous, one of the public trustees who oversee Social Security. “I would say we’re somewhere between critical and too late to deal with it.”

        I’m not quite sure the situation is that bad. When legislators were looking around for ways to prop up the US overall budget, they decided to temporarily reduce the portion of Social Security contributions from employers, which is a major reason for the shortfall. I understand that this temporary reduction is to “go away” as of January 1, 2013, but it will add to the fiscal cliff we are facing at that time.

        I expect that Social Security benefits (and Medicare benefits) will have to be cut sometime in the future. Exactly how it takes place, I am not sure about. Every country in the world with a similar system is going to face a similar issue–If the size of the economic pie is getting smaller, how much should be given to seniors?

        So I am not sure either is exactly secure. In some ways, “pay as you go” is more secure, because it is a simple transfer from the young to the old.

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