Energy limits: Is there anything we can do?

The energy limit we are running into is a cost limit. I would argue that neither the Republican or Democrat approach to solving the problem will really work.

The Republicans favor “Drill Baby Drill”. If the issue is that the price of oil extraction is too high, additional drilling doesn’t really fix the problem. At best, it gives us a little more expensive oil to add to the world’s supply. The Wall Street research firm Sanford Bernstein recently estimated that the non-Opec marginal cost of production rose to $104.50 a barrel in 2012, up more than 13 per cent from $92.30 a barrel in 2011.

US consumers still cannot afford to buy high-priced oil, even if we extract the oil ourselves. The countries that see rising oil consumption tend to be ones that can leverage its use better with cheaper fuels, particularly coal (Figure 1). See Why coal consumption keeps rising; what economists missed. The recent reduction in US oil usage is more related to young people not being able to afford to drive than it is to improved automobile efficiency. See my post, Why is gasoline mileage lower? Better gasoline mileage?

Figure 1. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world "all liquids" production amounts.

Figure 1. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world “all liquids” production amounts.

The Democrats favor subsidizing high-priced energy approaches that wouldn’t be competitive without such subsidies. Government debt is at 103% of GDP. It is hard to see that the government can afford such subsidies. Also, it is doubtful that the supposed carbon-saving benefit is really there, when all of the follow-on effects are included. Buying wind turbine parts, solar panels, and goods that use rare earth minerals (used in many high-tech goods, including electric cars and  wind turbines) helps to stimulate the Chinese economy, adding to their coal use. Furthermore, the higher taxes needed to pay for these subsidies reduces the spendable income of the common worker, pushing the country in the direction of recession.

So what do we do as an alternative, if neither the Republican or Democrat approach works? I would argue that we are dealing with a situation that is essentially unfixable. It can be expected to morph into a financial crash, for reasons I explained in How Resource Limits Lead to Financial Collapse. Thus, the issue we will need to mitigate will be debt defaults, loss of jobs, and possibly major changes to governments. If we are dealing with a financial crash, oil prices may in fact be lower, but people will still be unable to afford the oil because of other issues, such as lack of jobs or lack of access to money in their bank accounts.

Because neither political party can fix our problem, I expect that most of our responses will necessarily be individual, personal responses. These are a few ideas:

1. Get out of debt situations, if it is easy to do. There are a lot of people who own stocks on margin, or who own an expensive house with a big mortgage on it. Now, with prices of stocks and homes both higher, would be a good time to get out of both types of debt. Sell the stock or buy a less expensive house, without the mortgage.

Equities and home prices both seem to be inflated now, indirectly because of Quantitative Easing. Some recent analysis suggests that real (that is, inflation adjusted) interest rates are rising partly because inflation is falling.  The reason that inflation is falling is because oil prices are lower (Figure 2). Comparing the first four months of 2013 with the first four months of 2012, oil prices are about $9 per barrel lower. Oil prices are lower because of reduced demand due to economic contraction, especially in Europe.

Figure 2. Spot oil prices and actual refiners acquisition costs, based on EIA data.

Figure 2. Spot oil prices and actual refiners acquisition costs, based on EIA data. Refiners acquisition costs are what refiners actually pay for oil.

In the past month, there has also been an uptick in interest rates (even apart from the declining inflation component). According to the Wall Street Journal, “Yields on the benchmark 10-year U.S. Treasury note now stand above 2.1%—still low by historic standards, but nearly half a percentage point higher than at the start of May.” Mortgage rates are also reported to be half a percentage point higher than they were six months ago.

There are a number of risks with rising real interest rates and falling inflation. One is that the higher interest rates will trigger lower stock prices and lower house prices. Another is that deflation will continue, making debt payback more difficult. If this happens, it is something that the Fed can’t handle with its monetary easing policy. Interest rates can go to zero, but not below. A third issue, especially if interest rates rise further, is the adverse impact on the US government financial situation.

2. Reduce your expectations about what investments can do for you. Dmitry Orlov, who has had experience with the collapse of the Former Soviet Union, made the remark, “There are two kinds of investments: those that lose all their value at once, and those that lose value slowly.” Paper investments are a particular problem, because they can decline in value very quickly if conditions change. Even real estate can be a problem, though, because governments can take away what you thought you owned, or raise taxes to a level that you cannot afford. If you buy something and have to move, but cannot take the object with you, you will likely lose the value you invested. The only things that are really yours to keep (at least until your declining years) are skills that you learn.

3. Take up a hobby that will provide food for your family (planting a few fruit or nut trees, adding a garden, raising a few chickens, or learning to hunt/fish). Taking up hobbies such as these provide several functions: They provide a diversion away from the problems of the day, and let you feel like you are doing something helpful. They may actually provide a cushioning effect, if there is a sharp downturn. Taking up such hobbies can provide a useful skill for the future. In some cases, it may make sense to purchase land for purposes such as these. If considering doing this, a person should take note of items (1) and (2) above. It takes quite a long time to get started, and you can’t take the improved land with you, if you have to leave.

4. Learn to appreciate nature, family, and simple joys that can’t easily be taken away. It is possible to be happy, regardless of circumstances. We can find many good things in every day. Obsessing over the future is not really helpful. Don’t tie your happiness to having more “stuff”; you are likely to be disappointed. Learn to sing happy songs, or how to play a musical instrument. Or memorize uplifting poetry or religious writings.

5. Build a network of friends. If things go downhill, we can’t expect to use a gun to ward off intruders, night and day. If nothing else, we will run out of ammunition. Over the long term, the approach that is likely to be successful is working together with other community members toward a common goal.

6. Learn new skills, if you are concerned about job loss. Try to think of what will be needed in a lower-energy world. People will always need dentists and midwives, regardless of how poor they are. Buggy whip manufacturers went out of business long ago. Maybe we will need them back!

7. If you want to develop larger-scale plans (such as for cities or regions), keep them cheap and easy to implement. Governments are already running short of funds to implement plans. Look for approaches that are inexpensive to put in place, such as car-sharing plans. Alternatives that worked years ago, such as boats and canals, might be considered as well.

8. Aim for a flexible approach to problems. We don’t know things will turn out. Water may be in very short supply in one part of the country. Or job opportunities may open up in a place far from home. Even more than in the past, we are likely to need to be able to change our plans on short notice.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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444 Responses to Energy limits: Is there anything we can do?

  1. Scott says:

    I think the familiar graph makes it clear the “Rest of the World” is very thirsty for oil and gas. Our old cars go somewhere and more new cars are being built in developing countries these days than we want to know.

    • Yes. We cannot outbid the thirsty rest of the world. The people there have jobs, and have uses that take only a bit of oil relative to the benefit they provide (for example, motor scooters for someone to get to work).

    • Just to let everyone know, we now have Gail’s “Collapse 101” Lecture from the Age of Limits Conference up inside the Diner. You do need to register on the Diner to find these links.

      http://www.doomsteaddiner.org/forum/index.php?topic=1433.msg24449;topicseen#msg24449

      In addition, beginning this Saturday June 8th we will begin Podcasts on the Diner Blog. These will not require registration inside the Diner to listen to.

      RE

      • Scott says:

        More on Japan, I have heard that food is very expensive there, here in the US too food has basically doubled too in price in the last few years for our monthly groceries etc.

        In Japan I suspect many older people will have a hard time the the state struggles financially. In the 60’s – the 1980’s Japan was our China for imports, but China took over the markets they previously held.

        Japan still makes the some of the best cars and electronics, but they have lost market share and with long living elders they have been out numbered and have a smaller young work force today.
        The decline in fishing and them paying hundreds of thousands of dollars US for a single large Tuna Fish has also got my attention.

        The road they have chosen of endless QE (money printing) is now starting to finally play out and it provides us a look into our futures if we stay on this path that our governments have pursued if you live in the US or the Euro Zone. So I will look to watch Japan to see what may lie in our futures for our over indebted governments.

        So sadly, I look to Japan to see how it all ends and I doubt our governments will change course as they really cannot as they are kind of in a corner the only way to keep going is to keep the game rolling, printing and keeping rates low. I have read many articles about how the bond markets can be upset by a sudden rate increase, and the bonds start dropping in value like a falling rock. So far not too bad but it seems like it looms.

        Japan is starting to see the higher rates forced on its over in debt bonds and it took awhile to come but is is here or on the doorstep it seems. Here in the US and the Euro Zone we also face this too – just later.

  2. Jan Steinman says:

    Personally, I agree with you about debt. But there is an alternate school that says, “Take on as much fixed-interest debt as you can, and watch it inflate away.”

    How do you feel about that, Gail? What sorts of arguments can I make to such people?

    • Scott says:

      Well, if you invest it in silver and gold instead of paper money it would be a good thing to preserve some your savings, I believe. So, instead of opening a savings account, buy some gold or silver coins as savings instead to avoid loosing the value of your account.

      • Jan Steinman says:

        Perhaps, but there aren’t many calories in silver and gold. Perhaps metals will hold value, but in some scenarios, maybe not.

        We have someone living here who liquidated everything and put it in gold — when it was $200 higher than it is now! He’s hurting, basically living like a student until gold “comes back.”

        Perhaps it’s too early to focus on Maslow’s Hierarchy, but in a worst-case scenario, precious metals satisfy none of the basic needs.

        • Problem is that there arent that many foods you can stock up over longer periods of time, so if you plan on doing that you need to at least eat through it and restock. Gold and silver doesnt change much over 20 years time. But since we have no idea when a rare earth metal might be come currency again is hard to know what to buy really. Perhaps buying good solid hand tools might be a good investment too. Although I would guess a sharp downturn in world economy will no doubt lead to lesser people on the planet as well – possibly making tools abundantly available for a long time. 🙂

          • Jan Steinman says:

            There are lots of foods you can stock up and use over at least one complete year, which is the vital period.

            It’s funny that most “gold bugs” are also “doomers.” John, you seem to think lack of energy forces independence in your other posting here — “where will you get chicken feed,” etc. In such a scenario, it’s fair to ask, “who will want the gold you’ve hoarded?”

            I feel exactly the opposite: it’s going to be forming tightly-knit groups of mutual support that will get you through the worst of it, not “rugged individualism,” which is an artifact of high energy availability.

            To me, the key coping strategy is to have a job — and I don’t mean working for an employer, I mean some daily activity that puts food in your belly. Your job may be growing food, or it may mean being valuable to someone else who grows food. Hoarding (of which, collecting gold qualifies) is not a sustainable solution.

            • Scott says:

              Thanks Jan, I am not a gold bug – but I will take my chances with a few gold and silver coins in case there is a problem with paper money. Gold and silver has been money in the world for many thousands of years. It is just part of my plan I also store food as I know I cannot eat gold. I guess it depends on how bad it gets but gold and silver have the currency when all else fails. I understand that needed items are important so gold and silver are only a part of my plan, I also store food and needed items. I do however believe with this current monetary policy we will see continued manipulation in the gold and silver prices to keep the bankers in the best light so they can continue this currency game. Tools food etc and things needed are wonderful trading items too aside from a silver dollar or gold coin.

            • Jan Steinman says:

              Gold and silver has been money in the world for many thousands of years.

              Any stockbroker will tell you that past history does not necessarily predict future performance. We’re about to go through a phase reversal, the likes of which has not been seen for many thousands of years.

              That said, I think having a “few gold coins” is a good idea for diversity. But I’ve sunk most of my resources into food-bearing land and the tools of food production.

            • Scott says:

              Hi Jan, I have also done the same, we moved up to the house in the mountains and bought this old place in the woods and brought supplies and food seeds and many tools. Gold and silver are just another tool in the tool box to trade while we can and I agree if things really get out of hand then the food will matter more but things semi okay for now and let us hope is stays that way. In the USA we do have a lot resources left and we still have much others have lost or do not have in arid places like the middle east and I am thankful for that.

          • Alan Long says:

            Just a quick note. Silver might be a better value then you think. Take a look at the medical values of silver as an anti-biotic, anti-fungal and an anti-viral agent, A silver coin placed in a container of milk makes it last longer. Silver in your drinking water purifies it (slowly), There are many medical uses for silver, so the chances of it being a good barter object in my opinion is high.

            • Scott says:

              Agreed Alan on Silver, it is used in Band aids too to kill germs, but it has been money for many thousands of years too, it also has solar uses etc. I wonder if my silver dollars will be melted someday to make something.

      • I believe in diversification. From this point of view, having some silver and gold probably makes some sense. Silver seems more practical for day-to-day transactions. Having these metals does have a downside. Metal coins or bullion can be stolen, or taken away by governments. They may work for trade, but it is not 100% certain that this is the case.

    • Right now, the trends do not look good for fixed-interest debt. There is an all-too-significant chance that you will lose your job. Then, paying back the fixed-interest debt will be a problem, whether the situation is viewed as inflation or deflation.

      The government certainly would like to inflate away debt, because it has a huge amount of debt itself, that it would like to get rid of. But a major component of inflation in oil price, and that is determined on a world market. If the Europeans are failing, and the Japanese are on the edge of failing, and Chinese demand is no longer growing by much, world oil price tends to lag. OPEC as a practical matter doesn’t do much to affect price, except hold high-cost production off the market if prices drop too much. (I see that they left their target at 30 million barrels a day.)

      Another issue is the kinds of assets one might buy with debt. Oversize houses have little long-run value. Stocks that will deflate in value aren’t very helpful either. Buying bonds, when a lot of issuers will likely default on their debt, has little appeal as well. Buying a fancy car to impress the neighbors will lead to a lot of fast depreciation.

      So usually, the answer is no, don’t add debt. It just adds to your worries.

      • Dave Fabick, Hermann, MO says:

        I have thought about this debt issue in different ways. There could be a wholesale debt cancellation so what you have is yours debt free. Something similiar happend in the former Soviate Union. I also agree with the idea of lowering worries. I feel mental preparations are the most important action that can be taken in the long emergency. Reducing debt would relieve what tends to be our grestest stress. Different debt has different value also depending on the asset in question. In this financial crisis I would shy away from margin debt for stocks unless of course you enjoy gambling.

        • The reason why I said, “Get out of debt situations if it is easy to do” is because I recognized that there is a real possibility of debt cancellation. There could be a lot of worry between now and cancellation, though. Or things could not work out right in some other way, like forced labor to pay off debt.

          In the past, I have tended to stay away from this subject, for precisely this reason. A lot of debt, once it is taken on, is virtually impossible to do without. For example, buying a car on credit is a necessity for a lot of people. The car often loses value, so trying to get rid of the loan, for example by buying a cheaper car, is very difficult to do. So people are stuck with the arrangement they are in.

      • xabier says:

        Getting into debt to buy a big house is pretty short-sighted, I agree.

        Maybe a small house, and a very big, useful garden? And do that cash down.

        For those who think of rental income, it’s worth noting that during the Weimar inflation, the German government imposed a rent-holiday, so property owners received no income on their properties for a time and couldn’t evict.

        • I didn’t realize that during Weimar inflation, the German government imposed a rent holiday. Clearly governments do not want people out on the street. They will do anything they can, to allow people to stay in their homes. It is even theoretically possible that they will let people with very large homes that they cannot afford stay in their homes.

  3. davekimble2 says:

    Some very good advice in there – particularly learning how to be happy without spending money.

    Some possible mistakes too, depending on circumstances. If you don’t own your own home, or don’t think your area is suitable for Living Simply, then don’t waste your time on fruit and nut trees – they take too long to reach maturity. Start with vegetables, and learn composting/mulching and natural fertilisers.

    Chickens are an enjoyable hobby, but they MUST have a predator-proof cage for overnighting. Different breeds having different characteristics – some are good egg-layers, some good for meat, some are a compromise between the two. Another compromise has to be made on free-ranging ability – most commercial breeds have no idea how to watch out for predators, or to give alarm calls when danger is present. In fact most are afraid of the sky and open spaces. Bantams can fly better than chickens, especially heavy meat birds, which give them a big advantage in the survival stakes, but their eggs are smaller and fewer. My bantams are self-selected for free-ranging survival in the forest, which is their natural habitat – raking through leaf litter looking for seeds and grubs. Even so, you need something to tempt them home to the cages nearing dusk, so a well-protected crop of grains will be needed when the shops shut for the last time.

    If you have to get in the car to go to somewhere where you can hunt or fish, then it should be considered a learning experience only. The real hunting/fishing thing is only going to be sustainable so long as you can walk there, and will be reasonably alone. This rules out all densely populated areas.

    And don’t forget home beer-brewing, wine-making, bread-making, all manner of preserving.

    So most people will have to move away from city/suburbia. I strongly recommend somewhere warm and wet – longer growing season, less fuel to keep warm, less impact from Global Warning.

    • Just a question for those with chicken. What do you feed them? And can you walk into the forest to forage whatever those chicken needs to eat?

      I often see a lot of gardening projects that seems to rely a lot on having access to the local garden store for nutrients and whatnot. I guess what we need is for people to get the skills and hobbies that has zero fossil fuel input besides a little wood that you can burn. Even simple things like painting requires paper and ink/paint – a resource that is pretty hard to get without the local shopping mall. No doubt you can learn how to make paper from old (which is a fun thing to do btw) – but the paint will be a problem for most.

      Is there a good web resource for zero fossil fuel input “hobbies” and crafts?

      • xabier says:

        Many people in Britain are already having trouble affording feed for their horses, pigs and hens: the price rises have been very significant. There is actually a glut of horses going to horse charities now, as people just give up trying to keep them. Same with dogs.

      • For zero fossil fuel use hobbies and crafts, I would look to Africa. Singing and dancing (a cappella, particularly) are fossil free. Walking and jogging are fossil free. Carving wood would be fossil free, if a person could do it with a dull stone. As we do it today, it requires embedded fossil fuels, in the form of a knife. (Long before agriculture, hunter-gatherers made sharpened stone blades by heating stones to high temperatures, so they could make the stones sharper.)

        • Jan Steinman says:

          Long before agriculture, hunter-gatherers made sharpened stone blades by heating stones to high temperatures, so they could make the stones sharper.

          I remain hopeful that primitive metallurgy will endure.

          The village smithy certainly precedes fossil sunlight use, and is not really any more demanding than “heating stones to high temperatures.”

          But most of all, there’s a large pool of resource available in the form of junk. Future primitive man won’t have to get ore out of the earth and refine it; they’ll get degraded, but already refined metal from landfills.

          • Problem with any metallurgy is that the worlds forests would be gone in no time:

            I guess a large part of USA was pretty forested before…

          • I am afraid getting already refined metals from landfills will not fill a lot of needs. I expect these metals will not hold a sharp edge. They will not be of the precise qualities needed to power a computer or repair and wind turbine. They may allow someone to make a wagon, or some other simple device, but they won’t allow today’ high tech society to go on.

            • Jan Steinman says:

              I was referring explicitly to your statement about knives being scarce. I agree that sophisticated modern alloys used in high-tech will go away. But they had some of the finest steel in Damascus some 2,000 years ago…

            • THis is a short article about Damascus steel. According to it,

              As it turns out, the technique was not lost, it just stopped working. The “secret” that produced such high quality weapons was not in the technique of the swordsmiths, but rather on the composition of the material they were using. The swordsmiths got their steel ingots from India. In the 19th Century, the mining region where those ingots came from changed. These new ingots had slightly different impurities than the prior ingots. Because of the new composition, the new ingots could not be forged into Damascus steel. Because of swordsmiths did not understand the nature of the material they used, when that material changed Damascus steel was lost.

              In 1998, J.D. Verhoeven, rediscovered the composition that would create this steel. His paper on the topic can be found at

              the JOM site. It is now again possible to buy items made of true Damascus steel (not pattern welded).

              So the amount of this material we can produce is likely pretty low–depends on particular impurities.

        • xabier says:

          Gail

          A friend of mine learnt how to make stone tools from an Aborigine in Australia, in the 1970’s. He was an hereditary tool-maker. There is an artistic side to it which is very satisfying, it would appear: stone tools can be ‘elegant’ or ‘inelegant’…. Not a bad hobby, if you have the right rocks at hand.

    • You raise good points about chickens. I expect similar points can be made about a lot of kinds of crops/animals we raise. What we really want is practically wild varieties, that can take care of themselves. These are less available than types that are very demanding of fertilizer, cages, protection from predators, constant watering, and other care.

      One of the issues from a sustainability point of view is that fact that humans are already taking a very high percentage of the “net primary productivity” of land. Other species need to get their fare share, if the Sixth Mass Extinction is to wind back down. This means that from a sustainability point of view, we need to be moving toward a situation where predators get more of what we grow/ raise, and we will need more acres to support one human.

      To your list of preserving, I would add pickling and fermenting. Low energy approaches are especially good.

      I would second the idea of warm and wet. Such areas have less need to supplement the energy provided by the sun. The downside, though, is insects and diseases carried by insects. Also, insects such as termites can do damage quickly to what look like permanent structures. In Atlanta, there is a saying, “There are two kinds of houses: those that have had termites, and those that will have termites.” There may be a need for termite inspectors in the future, but I am not sure what they will be able to do. Chemicals are needed for stopping the termites. About all one can do is keep rebuilding.

      • Jan Steinman says:

        “One of the issues from a sustainability point of view is that fact that humans are already taking a very high percentage of the “net primary productivity” of land.”

        Sorry I don’t have a reference handy, but I’ve read that North Americans currently exceed basic productivity by at least 50%. That means North Americans are using 50% more energy than the sunlight harvested via photosynthesis by all the plants growing in North America.

        Nuclear zealots and abiotic oil fans aside, that obviously cannot continue!

        “The downside [of warm and wet] is insects and diseases carried by insects.”

        Not to mention fungus and mould! That’s one of the reasons I chose cool and wet. If it doesn’t freeze solid in the winter, it isn’t too difficult to heat, and you can grow food year-round.

        • xabier says:

          Jan

          Cool and wet is good: end of May in Britain, and I’ve only just seen a decent amount of flies!

    • Ed Pell says:

      Where I live chickens must a predator proof place during the day also. Otherwise the hawks eat them.

      • Jan Steinman says:

        The Permaculture way is to put chickens in the orchard. Hawks can’t swoop in through the branches like they can if there’s open air above the chickens.

        • Scott says:

          Jan, We have lots of hawks and big birds here too and I worry about my little Chihuahua when she is in the yard. Especially small baby chickens need to be protected from the birds. We had to build chicken wire cedar framed covers over many of our gardens due to deer and even an occasional bear coming through, I built the covers for deer not birds, so I have to improve my screens to keep the birds off of my strawberries and sweet things growing as they even got into the garden through a small opening. I wish we had more property but we do have enough to do a few chickens I think, but not really goats any thing like that on just an acre and a quarter that is mostly forest. I have to build a barn before we can do chickens they need a safe place at night. The tough part for us animal lovers is butchering them. Although we buy meat in the stores, we have not known the animals and have named them or raised them which seems to make things easy. I guess if you have chickens you can also get help getting the butchering done for a fee.

          When I was a kid my dad had a bunch of chickens and when they got too old to lay eggs he just took them to a spring in the mountains and let them loose, which was strange, I guess he did not want to butcher them and I also guess you need to do it before they get old as an old chicken will stew pot chicken and not good for grilling. Timing is everything and everything has a harvest season including chickens.

          • Jan Steinman says:

            “not really goats any thing like that on just an acre and a quarter that is mostly forest.”

            Plenty for a couple goats. Forest is good. Go through and limb up the trees and let the goats have the slash. They prefer browse to pasture, and would rather have maple leaves or even Doug fir needles than grass.

  4. Tom Wayburn says:

    Very good advice, Gail, and I certainly appreciate the analysis of what is likely to happen without profound political change. It is worth considering, however, what political changes are likely and what political changes are desirable under various circumstances. Anything might happen in a political vacuum. J. M Coetzee discusses this in *Diary of a Bad Year*. Who knows what the toughest bunch of thugs might do if they are able to centralize their power. Rob Dietz and Dan O’Neill in *Enough is Enough, Building a Sustainable Economy in a World of Finite Resources* express the ideas from the Center for the Advancement of Steady State Economies for the political change necessary to achieve a non-growth economy. I see only one glaring omission: If private profit is permitted in a steady or shrinking economy, the most talented players of the money game or the most adept cheaters will end up with everything and the rest of us will have nothing. Probably, it is still political suicide to suggest that the sustainable dividend of the community be divided equally among all citizens and that commerce, finance, banking, and other purely monetary activities consume too much energy to retain in a sustainable economy. Clearly, the profit motive is inconsistent with sustainability.

    • The profit motive and profit success are two different things. I expect that those who work on a traditional profit motive will be sorely disappointed.

      I am sure that there will be some people who are successful in making profits. Some of them will be recycling parts of buildings that can no longer be used, or will be selling “protection”–two businesses that are not necessarily very legal.

      I expect private profit will be around for a long time. The major other option I see is a gift economy, where people give away what surpluses they have. Such an approach works best with small groups–families, and small communities where everyone knows everyone else and there are unwritten rules to encourage such behavior. A gift economy would be better than an economy built on a profit motive, but getting to the small groups needed for a gift economy is likely to be difficult/ slow.

      A dictatorship might result in some other types of economy. Here again, small would be helpful in making a different approach work.

      Democracies require energy, and the larger the group governed, the more energy required. I expect these will fall by the wayside. Perhaps some representative systems can be kept, more like what was used when the US was first formed.

      • Of course, I am referring to any economy that permits private profit when I use the catch-all term “profit motive”; but, in the future, I expect to be more specific. That said, I am relieved that you have considered a wide spectrum of political scenarios any of which might be played out. I guess your comment about the cost of democracy applies to the sort of democracy we have in the US and elsewhere currently. I prefer the pure form described in the paragraph about fractal government at http://dematerialism.wikispaces.com/ . I do not have very high expectations regarding Dematerialism and what I have regrettably called the natural economy; therefore, I continue to stay busy enjoying life. I will be 80 on my next birthday. Perhaps other events will intervene before I have to face complete economic collapse and live on stored food and buried bullets.

      • donsailorman says:

        With regard to a gift economy, there are two books that I recommend:
        1. Kenneth E. Boulding, “The Economy of Love and Fear: A Preface to Grants Economics,” 1973. This is a short and readable book by an eminent radical economist.
        2. M. I. Finley, “The World of Odysseus,” 1978. This 200 page book has a lot on the importance of and the workings of gifts in ancient Greece.

        There is also a considerable literature on the importance of gifts in the anthropology literature.

        A market economy tends to destroy the importance of gifts; indeed markets tend to destroy all forms of tradition. Karl Marx correctly credits market capitalism as the most decisive element in the destruction of feudalism. For more on how market capitalism destroys tradition, see “The Great Transformation” by Karl Polanyi.

        After civilization collapses, market oriented societies and economies will also collapse. My educated guess is that new forms of tradition will eventually come to replace more and more of market-based economies. Note however, there are some detestable things traditional that also are likely from the destruction of market capitalism based economies, especially slavery and serfdom. There are only three ways that have ever been invented to organize economies: tradition, command, and the market. My WAG is that both tradition and command will more and more replace market capitalism. For example, a totalitarian society based on a religious dictatorship is a plausible combination of both tradition and command.

        • xabier says:

          Gail

          ‘Protection’ became very big business in Argentina. When established supermarkets failed, crime gangs set up their own trading areas in warehouses and old factories, where they guaranteed safe trading conditions in return for a little commission. They killed anyone trying to disturb things.

          And of course, a hidden proto-dictatorship of the Left variety has been the result of the Argentine Crisis.

        • Don,

          I appreciate your insights and references. This is not a subject I have studied very much about. I see that there is now a Kindle version of The Great Transformation out for $9.99 on Amazon.

          • donsailorman says:

            I think one of the best ways to prepare for the future is to read widely about the past. For example, I just finished reading “When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany” by Adam Fergusson, a book that I strongly recommend to those concerned with how to survive an extreme financial collapse.
            During the early 1920s civilization in Germany nearly collapsed, and the paper mark did eventually achieve worthlessness. Some starved, undernutrition and malnutrition were general, crime rates increased, and both Nazi and Communist private armies roamed the streets. Coal consumption decreased drastically, in large part because the French occupied the area of the best coal fields in Germany and refused to allow any of this to be exported to nonoccupied Germany until the Germany made its reparations to France.

            One very interesting story in the book is about a woman who was able to feed her family from the black market by trading good cigars for food; she did this for a period of years before she ran out of cigars. I think it makes sense to stock up on nonperishable luxury goods, because there will always be rich and powerful people, and in addition to wanting power and sex, they also want luxury goods. Also, in a crisis or collapse (e.g. when the Soviet Union came crashing down), who you knew determined to a large extent how well you did. The Russian word for this is “blaht.” If you have luxury goods, the wealthy and powerful will tend to find you–or you can find them by letting it be known that you have cognac or single-malt Scotch or tobacco or even sugar available for barter.

            If I live until collapse happens, I plan to run a trading post out of my apartment, a trading post plus a tiny restaurant, because cooking is one of my skills.

            • That sounds like a reasonable strategy. If you can make yourself needed by the well-to-do, you have an in for getting by in the resource constrained world.

        • xabier says:

          Another plausible model in a soft collapse – maybe an early stage of the Great Collapse – would be a pseudo-market economy in a personality-cult dictatorship with false populist overtones: the poorer and less well educated people are, and the more ruthless the regime behind the scenes, the more they will accept this. Personality cults substitute for religion with the simple-minded. Just look at the weird Obama-cult of the early years….. (that’s not an intention of starting a wrangle over US politics!)

          • Danny van der Weide says:

            Oh dear…
            I live in Italy, and with you mentioning a “personality-cult dictatorship with false populist overtones”, I couldn’t help thinking of Silvio Berlusconi and especially Beppe Grilllo.

            For those who don’t know Beppe Grillo, he’s a famous Comic and the leader of a leftish populist antipolitical movement, with a dubious level of democracy.

    • BC says:

      Thomas: “I see only one glaring omission: If private profit is permitted in a steady or shrinking economy, the most talented players of the money game or the most adept cheaters will end up with everything and the rest of us will have nothing.”

      Thomas, a close examination of the US economy and society since the 1970s-80s, and especially since ’00-’07, indicates that what you describe has already occurred.

      The top 1-10% of US households own 40-85% of financial wealth and receive 20-45% of all US income.

      https://www.box.com/s/20a7wvsek6pc2f4dvfv1

      Real GDP per capita has gone nowhere since ’07.

      The US has not created a net new full-time private sector job per capita in 30-35 years.

      Real private gross domestic investment is not growing fast enough after depreciation and population/labor force to result in growth of the physical capital stock and real GDP per capita.

      Adjust the median US wage/salary for higher payroll taxes, debt service/income, and the higher cost of housing and energy to after-tax wages/salaries, and the typical American today receives an average wage/salary income equivalent to the purchasing power of minimum wage for 40 hours per week in 1970.

      https://www.box.com/s/655bfqdsxbcgfn0d8m0r
      https://www.box.com/s/bqduja958olt3fs9x0m8
      https://www.box.com/s/szg9200y60guiogn92bs

      The 5- and 10-yr. change rates of US wages and salaries continue to decline to the levels of the 1930s-40s.

      The last time the 5-yr. CPI rate was where it is today, the 5-yr. wage rate of 6-7% compared to 1.5% today. In real terms, the 5-yr. wage rate was 5% vs. negative today.

      https://www.box.com/s/bms6q1wjzvcvsv7ums95
      https://www.box.com/s/yarvox8akn9aq0xawgam

      And the decelerating wage rates are occurring coincident with the world tipping into recession in real per-capita terms, with the US appearing to be following behind as of Q1.

      Despite the top 0.1-1% to 10% of households being significantly wealthier, the bottom 90% are unquestionably poorer and increasingly dependent upon gov’t transfers for subsistence.

      For the bottom 90% of US society, the US has been in a “steady-state economy” for 40-45 years.

      • “For the bottom 90% of US society, the US has been in a “steady-state economy” for 40-45 years.”

        I hadn’t thought of it that way.

        I think the marriage situation has tended to add to the increased wealth dispersion of households. Wealthier individuals are more likely to be married than poor people (who can avoid the higher tax on a two income household by not getting married, as well as possibly qualify for other government benefits). Wealthy individuals tend to marry other wealthy individuals (doctors, other professionals, etc.) further concentrating wealth.

        • Gail,

          That was a useful comment about the concentration of wealth being already well under way. It is not clear, though, that the process of concentration will proceed toward the extreme limit I mentioned, namely, one person with everything and everyone else with nothing (except such crumbs from the table as Mr. Everything deigns to let fall). Extreme concentration of wealth is not a stable outcome. When we have nothing left to lose, violent revolution becomes an attractive alternative. Dematerialism was largely motivated by a desire to avoid die-off without violent revolution.

          Helen Swords, the painter, once suggested that a society without resource dominance might exist as a sort of open conspiracy among members of a sub-culture whose non-economic lives were indistinguishable from other people. All of their economic transactions would necessarily take place between themselves and other members of the open conspiracy with whom they would share equally. How would this work? The devil is in the details.

        • Jan Steinman says:

          In my case, marriage (or more accurately, divorce) has been a wealth distribution scheme, rather than a wealth concentration scheme. 😦

          • I am surprised to hear someone say that married people filing jointly might be paying more income tax than the same two people if they were not married. I assume that that is not the case if only one partner is working. I do not recognize the right of the government to meddle in family matters and I do not recognize the right of churches to exist; therefore, it seems to me that gay couples should be demanding an end to all marital tax advantages rather than access to the obsolete institution of marriage.

            • If two people are each earning low wages, they are often better off financially if they are single than if they are married. Each one individually has a chance of qualifying for benefits like food stamps, that would be harder to qualify for if they were married. Income tax rates for married people are lower if one person is not working, but raise the tax level if both are working. If both are unmarried, and there is a child, one person can have an “Unmarried, head of household” status. With this status, the benefits are even better.

              I expect tax issues are part of the reason that so many children (40% if I remember correctly) are born out of wedlock in the US.

        • xabier says:

          Gail

          From what I’ve observed, as our economies decline, many marriages are a concentration of apparent wealth, but real debt……….

  5. Arthur Robey says:

    I am a one- trick pony. OK. a three-trick pony.
    I do not have the scary blades of Wolverine or Thor’s mighty Hammer. And there is a lot of water between me and Igil Skallagrimson.

    I am not even as good a poet .
    However, I am not without my immodest strengths
    The Lesser of the two is a Mighty Throbbing Brain. This sort of effect.

    Source. The Oil Drum
    If I am to survive I had better put my Superpower to use.
    We (A cluster of exceptional survivors and me) need a few favours from the Gods.
    The first is a miraculous and bounteous source of portable energy. Apparently atheism is losing ground as such a source is in the offing. Gail and I doubt that it will come in good time to do you any favours. (Evolution is such a ruthless process).
    Rossie’s eCat has been verified by an argument of professors in Sweden and at Cornell University
    “An experimental investigation of possible anomalous heat production in a special type of reactor tube named E-Cat HT is carried out. The reactor tube is charged with a small amount of hydrogen loaded nickel powder plus some additives. The reaction is primarily initiated by heat from resistor coils inside the reactor tube. Measurement of the produced heat was performed with high-resolution thermal imaging cameras, recording data every second from the hot reactor tube. The measurements of electrical power input were performed with a large bandwidth three-phase power analyzer. Data were collected in two experimental runs lasting 96 and 116 hours, respectively. An anomalous heat production was indicated in both experiments. The 116-hour experiment also included a calibration of the experimental set-up without the active charge present in the E-Cat HT. In this case, no extra heat was generated beyond the expected heat from the electric input. Computed volumetric and gravimetric energy densities were found to be far above those of any known chemical source. Even by the most conservative assumptions as to the errors in the measurements, the result is still one order of magnitude greater than conventional energy sources.”
    Source
    Well. That will give us some breathing space. (Please do not be tempted to include yourselves in the pronoun “Us”).
    The next issue to be addressed is the need for artificial intelligence and robotics. I see that we are making steady progress. You might like to observe Big Dog. Primitive, but it has possibilities.
    The next thing that you we will need is a really smart way of building huge structures. And here another apple falls into our laps in the form of 3d printing.
    And God just keeps giving.
    What we also need is a lot of living space while we wrestle this urge to breed and it’s commensurate exponential function, to the ground.
    Now if you thought it was a long way to the pharmacy that is peanuts compared to space. (Apologies to Douglass Adams)
    At L4 alone there is enough room for several magnitudes of order more people than on the cramped two dimensional surface of this orb. Here is a graphic of what a Lagrange point looks like.

    Source. Wiki.
    But how do we get there? We all “know” that it takes thousands of dollars to get even one pound out of the well, don’t we?
    And just what will we find when we get there? The vacuum of space is no place for a trowel and mortar. But please- one issue at a time!!
    How are we going to loft the remnants of humanity off the planet? Well there are several options available to us. Colossal Carbon Nano-tubes offer us a splendid means of taking a lift. Or if a week of sitting around in a lift is just too boring, please consider orbital airships. At a cost of $1 per pound per vertical mile that might be within your our budget.
    But ponder this problem. Where are we going to get the materials? A hint: It will not be from the bottom of some gravity well. Gravity wells suck.
    To tell the truth I am getting bored spoon feeding you. Talk about pulling teeth! What I will do instead is to give you homework. Here is a fictional story that I wrote for your amusement and pleasure. It is all about human relationships and sex so there is something in it for the girls and the boys. (Sorry. No car chase).
    My story is called “The Breeding.” And if you are very good and read to the end there is a special treat.
    Unconvinced? May I suggest you stare for a good half hour into your crystal ball.

    • There are a lot of ideas in the pipeline. The problem is the time and energy use required for implementation. There was a study a while back that said that on average, a new technology in the oil and gas industry took 17 years, before it was in widespread use. Even if we have miraculous changes very quickly, it will take time and energy to implement them on a widespread basis.

      • Dan says:

        “There are a lot of ideas in the pipeline”.

        I truly admire your patience. I guess I’ll throw another idea of similar merit into that same pipeline – ‘The Water fueled car’. After all, what could be better? (Even better than the E-Cat in terms of portability AND world wide availability of the fuel source). Between the two – water wins hands down and running cars on water has been the subject of numerous international patents. I have no doubt that water, simple H2O, will be the power source of the future before Rossi’s E-Cat has its chance to save us all. You don’t need to believe me – just go read http://knol.go-here.nl/water-fueled-car.html

        I’ll continue to enjoy your article’s until such time that the water-fueled cars put aside the foolish concerns about resource limitations and ‘peak oil’. 😉

    • tmsr says:

      Yes and no. There are literally thousands of articles on cold fusion research over the last 23 years. There is a fair amount of reason to be hopeful. Rossi’s latest paper by “the professors” is intriguing but only one among many reasons to be hopeful. Ed Pell

  6. Lizzy says:

    Good morning, Gail,
    One thing I wonder about. Often in these discussions it seems that energy = money = life. You take the money out of that, so energy = life. So when we talk about ‘not being able to afford’ to do things, maybe that won’t be relevant. It might be that oil is ‘too expensive’ (in terms of the amount of energy needed, EROEI) to extract – argument over. But what if it’s ‘too expensive’ in terms of labour, or brain-power, or pipelines, or derricks to extract? It can still be done. If this is the case, it will be done. Maybe there will be slave labour, or communist-style sharing of the fruits of labour. Maybe money as we know it will vanish from the equation.

    • Dan Hood says:

      Any kind of object or secure verifiable record that fulfills the following functions can be
      considered money.

      1. Medium of exchange
      2. Store of Value
      3. Unit of Account
      4. Standar of deferred payment

      Do to social complexities and sheer size of our global population. I don’t think we’ll ever be able to abandon the concept of money and the above functions mentioned.

      • If we have less and less, “Store of Value” tends to go away. It also becomes a problem for standard of deferred payment. So money as we now know it may go away, and morph into something that works more in the present.

    • The energy we are using today requires complex machinery and considerable human know-how to extract. (The one possible exception would be a little coal that is available near the surface, often in out-of-the-way locations, where it is difficult to transport.) Without money to facilitate the very long supply-lines needed to facilitate extraction, I expect it will not happen. I think the real issue is not local money–any government can institute some sort of local money, good only in its area. The real issue is interchangeability among money supplies. I see this as becoming a problem at some point, and making it much more difficult to keep up supply lines. In some cases, supply lines may hold up for a while, even if employees are not paid. But in the long term, money (and in particular international money) really is needed.

    • xabier says:

      Lizzy

      I’ve been thinking too, that the elimination of private property and the command use of labour might well be the political form that emerges from the economic collapse. Ultimately, we would all labour for food and shelter if nothing else were on offer….it wouldn’t even need compulsion.

      • Scott says:

        Hi Xabier, Lets hope it is just community gardens and neighbors helping one another – instead of a government garden made with enslaved people.

        I just went to Walmart today (which is the closest big shopping 20 miles away from my mountain town) to do some monthly shopping and bought a bunch of stuff mostly food but thinking about how difficult it would be if I had get all those say 60 items that I buy monthly on my own to or to grow all of my food, it would be really tough if we had to create everything on our own on local coop type network which I would rather see than government gardens.

        Yes, I guess a military hard line solution may be forced upon us since most do think these things out on their own, sadly I think that way too many people are dependent on having others make decisions for them like some government agency and many seem to have lost the ability to makes on their own, so sadly it may take some kind of Federal Establishment to round people up into the slave gardens to feed us, it may be a good way to stay alive if you join it so there may be some benefit to some to join the government garden Corp.

        Instead of 60 or more food items that we consume each month, I imagine it would be reduced to a number closer to 10 if you are lucky. That is if we had to hunt, fish and grow it all ourselves.

        People will scavenge for things, but the good thing about that is that they will learn once again to fix things by hand.

        You may be eating the same deer all winter and get sick of deer, but better than starving if you are lucky enough to have meat during collapse. I hope stays out of our business in collapse if comes in my lifetime, but it appears that they will not just as I observe them operating now, a new for everything, why a Federal Farm Corp? Hope not!

      • Lizzy says:

        I think that might be right, Xabier. Yes, we would labour for food and shelter and security. That’s what some societies do now, I think. As for globalisation — will it exist as it does now? I know someone who studied the underlying philosophy of money. I can’t remember what he said, though…

  7. Dan Hood says:

    Some sound advice:

    1. Be debt free
    2. Be flexible
    3. Make sure you’re “valuable” in a low carbon world
    4. Live in reality, manage your expectations; this psychologically will keep your grounded when all about you are losing their heads. Those living in a delusional fantasy world will be hardest hit.
    5. Keep fit and healthy, this is essential.
    6. Reconnect with nature and be prepared to powerdown your consumer lifestyle
    7. Think about your local community and build networks
    8. Return to simplicity
    9. Trust yourself, trust your instincts at a time when many lies and distortions of truths are being told. Lies will accelerate as those desperate to maintain the status quo at all costs will try to convince, maybe even force you to sacrifice yourself for them and their interests.
    10. Accept increasing chaos and change and know that not everything is in your control

    • Those ideas sound good.

      One thing I could have mentioned, but didn’t is taking care of one’s health. People eating “Standard American Diet” (SAD) are generally in poor health. Moving away from SAD, even at this late date, is a good idea. Your body needs less processed food, and generally a lot less meat than most people eat. Fruits and vegetables are good. Getting some exercise is also recommended. It seems like at least 50% of healthcare could be avoided if people followed this approach.

      • Brian Kern says:

        Not to mention, eating a standard American diet is less calorie intensive. I eat at least 1000 calories less a day since I’ve lost 60lbs (which entailed me moving away from the SAD).

        I’ve read that the Okinawan people traditionally (traditional diet is a lot of sweet potatoes) eat a lot less calories than most, somewhere on average of 1800 a day. These people have the most centenarians in the world. Getting used to eating less would be beneficial to us all and it seems we could maintain a reasonably high life expectancy even without modern medicine. Many chronic diseases today are tied to overconsumption and poor diet. These issues could be solved fairly easily with just simple dietary changes. We have the nutritional knowledge to keep ourselves healthy without the energy intensive and wasteful reactionary medicine we currently rely upon.

        I’ve never had medical insurance and don’t expect to have it and I’m really not worried about it. Marijuana oil seems to be a rather effective medicine for many ailments, so perhaps we should all look into growing that as well. I certainly plan to.

      • tmsr says:

        Gail, I agree. I have a new doctor (about a year now) who has improved my health noticeably solely based on changes in diet. Lower sugar was important for me so with fruit keep in mind it is high in sugar, some fruit but not too much. Ed Pell

  8. Edward Kerr says:

    Gail,
    It apparent that you are you are advising people as to how they might mitigate the effects of the financial collapse that is all but inevitable. That is a good thing and will, in the short term, help. Sadly, there is no way to mitigate the effects of a climate change that will make a financial collapse look like a day at the beach or a country picnic. No help can be forthcoming from an environmental collapse that renders the planet incapable of supporting the complex web of life that we all depend upon for sustenance. Consequently, it seems to me that the best that we can now do is to live one day at a time and find a way to enjoy and cherish each day and to love one another unconditionally.

    With warm personal regards,
    Edward Kerr

    • The financial collapse is all but inevitable. Climate change may be inevitable too (in some form–the precise version modeled may not be right). Why obsess over climate change? With financial collapse, we will be doing as much as anyone could imagine, to limit humans’ impact on the earth. Humans are the ones whose population is growing completely out of control, leading to the Sixth Mass Extinction. There perhaps is a possibility that climate change may “wipe out” humans, if the die-off from financial collapse isn’t enough.

      The earth may indeed support a different complex web of life. This is not something we have control over. Living organisms have been found in very improbably locations. The earth changes and evolves. It will be fine. The human species–that is less clear.

      But I do agree that living one day at a time is a good idea. Also enjoying and cherishing each day, and loving one another unconditionally.

  9. Ert says:

    Hi Gail,

    regarding Figure 1 – I have a question: In my observation the western countries have already converted in lots of applications from oil to gas. No one I know opts for oil in home-heating and lots of conversations from oil to gas have taken place. Also in transportation gas is applies more and more. In addition no oil is any more used for big style power generation in Europe. There is also a lot happening in home heating efficiency (burners, isolation) and fuel efficiency of transportation.

    The developing countries instead need the oil for transportation and production of goods. Where we may cut 100 litres of our 1000 – a person in a developing country goes from 1 to 10. Where we may shift to some other form of energy – or gain efficiency, the increased consumption in the developing countrys serves basic needs (as seen from our perspective).

    I think it may be important to rethink Figure 1 not only in terms of oil – but in terms of fossil “Joules”. Also the energy use in US, Europe and Japan has to be aligned for efficiency gains and the growth of the underlying population has to be watched (something like Joule per Capita). Otherwise I think there is the risk of information bias – and fooling oneself.

    I agree with you in most parts and think we view the future the same – but timing and time frames are what interests me currently most. They are important to me for prioritising my activities and some economic decisions.

    • I have done more work on looking at the pieces. See my post, Why coal consumption keeps rising-what economists missed, for example. The countries in the worst shape are those that used the most oil in their fuel mix (Greece, Spain, Portugal). Indeed, they have been switching away, but they have been losing jobs at the same time. It is hard to get jets transporting tourists to use natural gas instead of jet fuel!

      You are right that heating fuel has been switched from oil to natural gas. This happened back in the 1970s and the early 1980s in the US, because oil was so much more expensive, and has been most of the time since them. The growth in oil consumption has been much less than the growth in coal especially. The US and Europe shut down much of our manufacturing industries, and let manufacturing mostly go to China and other Asian countries.

      There is some efficiency that takes place, but mostly reduction in fossil fuel use looks like “job loss”. Young people who don’t have jobs can’t afford cars, for example, and this reduces oil use.

      I can look at total energy consumption again. BP in the past has put our their summary of energy use by country in June, so an update is due out soon.

      • Christopher Johnson says:

        Greetings Gail and Fellow Responders:

        A Bloomberg article about Japan’s increased energy imports due to shuttering nuke plants, has driven up their monthly costs from $17 to $22 Billion. Nothing balances, especially their books.

        http://www.bloomberg.com/news/2013-06-02/abenomics-needs-cheap-nuclear-power-to-work.html

        Japan’s problems really began in the late 80’s, at the peak of a real estate bubble: the aggregate value of Tokyo was said to equal the total value of all US real estate. Then the deflation and stagflation set in, and they’ve been flat ever since.

        I say this to emphasize Gail’s point that the collapse will be financial in nature. But will it be inflation? deflation? stagflation? Or do those things even matter?

        • Jan Steinman says:

          “stagflation?”

          It’s like what a friend of mine said when she saw a woman with nine kids: “Y’know, they know what causes that!”

          Is there no one who remembers that the last time we saw “stagflation” was the last big energy crisis, in the ’70s, when US production peaked and OPEC put the screws to the US?

          • donsailorman says:

            Japan is in a situation of stagnation and gradual deflation. Thus it is not correct to say that Japan suffers from stagflation.

            Currently, Japan is doing well, despite a huge national debt. Unemployment is low; life expectancy is among the highest in the world, and for a country that has to import all of its fossil fuels and much of its food, the general prosperity is remarkable. They still have a problem of zombie banks, but they have been living with that for twenty years.

            Because Japan’s population is decreasing they really do not need economic growth.

            • The concern I have about Japan is that the steady increase in debt cannot end well. (It can’t end well for a lot of other countries, either.) At some point, the demographics become such that the elderly in Japan need to cash in their bonds, to buy goods and services, and they are not replaced by an even larger cohort of those still working, who want to invest in bonds for their retirement. Or the interest rate goes up for some other reason, and the interest payment becomes too high to pay, except by printing more money.

              If the economy were growing, the debt would become a smaller percentage of it. Without growth, this benefit doesn’t happen.

        • Scott says:

          Hello Chris and others, Yes I have been watching Japan closely as their stock markets are in turmoil lately. They have been playing the QE (money printing) Game longer than any of us and I guess we just have to look towards Japan to see how game ends.

          • Christopher Johnson says:

            Right on target, Scott. What struck me about the NY Times article was that for the first time a major economic / financial periodical was drawing a direct link between energy availability and financial strategy. For the last three months I thought Gail was the only person who believed that! Or am I wrong? Are MSM like NYT or WSJ full of articles that discuss those linkages? I think not.

            • Scott says:

              It will not be the first time a currency has collapsed if the dollar or euro goes down… Here is a past in of US History, “The paper bills issued by the colonies were known as “bills of credit”. Bills of credit were usually fiat money; that is, they could not be exchanged for a fixed amount of gold or silver coins upon demand.[3][5] Bills of credit were usually issued by colonial governments to pay debts. The governments would then retire the currency by accepting the bills for payment of taxes. When colonial governments issued too many bills of credit, or failed to tax them out of circulation, inflation resulted. This happened especially in New England and the southern colonies, which unlike the middle colonies, were frequently at war.[5]

              This depreciation of colonial currency was harmful to creditors in Great Britain when colonists paid their debts with money that had lost value. Adam Smith criticized colonial bills of credit in his famed 1776 work The Wealth of Nations. According to Smith, the inflationary nature of the currency was a “violent injustice” to the creditor; “a scheme of fraudulent debtors to cheat their creditors” (Book II, Chapter II). As a result, the British Parliament passed several Currency Acts to regulate the paper money issued by the colonies. The Currency Act of 1751 restricted the emission of paper money in New England. It allowed the existing bills to be used as legal tender for public debts (i.e. paying taxes), but disallowed their use for private debts (e.g. for paying merchants).[6]

              Another Currency Act in 1764 extended the restrictions to the colonies south of New England. Unlike the earlier act, this act did not prohibit the colonies in question from issuing paper money, but it did forbid them to designate their currency as legal tender for public or private debts. This prohibition created tension between the colonies and the mother country, and has sometimes been seen as a contributing factor in the coming of the American Revolution. After much lobbying, Parliament amended the act in 1773, permitting the colonies to issue paper currency as legal tender for public debts.[7] Shortly thereafter, some colonies once again began issuing paper money. When the American Revolutionary War began in 1775, all of the rebel colonies—soon to be independent states—issued paper money to pay for military expenses.
              By colony
              A twelve pence (one shilling) note in Massachusetts state currency, issued in 1776. These “codfish” bills, so-called because of the cod in the border design, were engraved by Paul Revere.[8]
              Colony/state Paper money
              first issued in:
              Connecticut pound 1709
              Delaware pound 1723
              Georgia pound 1735
              Maryland pound 1733
              Massachusetts pound 1690
              New Hampshire pound 1709
              New Jersey pound 1709
              New York pound 1709
              North Carolina pound 1712
              Pennsylvania pound 1723
              Rhode Island pound 1710
              South Carolina pound 1703
              Virginia pound 1755″

            • Christopher Johnson says:

              Thanks Scott. That’s a delightful little history lesson. And I thought I knew everything about the history of money after reading Niall Ferguson’s book. Clearly you and Adam Smith bested him.

            • Scott says:

              Hi Chris and others, well you know my point was we can survive a collapse of a paper currency and it has happened time and time again. But the last 50 or so years are different as we have built up this world market full of special financial instruments such as derivatives and bonds and credit and who knows what else but it is now on a teeter tater. In the old days it would just be a state two that had a currency that went down, now if the US or Euro goes down it will be a good majority of the world. I wish we could go back to our good old local system where things happen local and stay that way. I believe we are headed that way anyway. After collapse things get local very fast.

              I hope it is a slow change and I do believe it will be a slow grind of higher prices and that will make us do with less and less each month forcing many to garden and get animals in their yards to raise for food.

              That is why many of us are thinking about goats and chickens etc. It also may hit is pretty hard pretty fast like JHK says. I still remember the gas lines of the 70’s when I worked a station during the so called Iran Embargo which was not enough oil to really do anything to cause shortages in those days,,, but instead some kind of a ploy.

            • The fact that our currency now allows us to do international transactions makes it very special. We can indeed go back to local currencies, but unless these truly allow international transactions, they do not provide the system needed to keep up our globalized economy. The problems experienced with early US currency illustrate the problems with it.

            • Scott says:

              I guess we can say that the dollar is getting pretty old and has lived past it’s expected life span if you look at the past history of currencies. Yes, local currencies may not be trade-able for international transactions, but gold and silver would be trade-able internationally as it has been for the last 5000 years. In the old days, all of those currencies died, but it was not such a big deal as they would make up a new one and they were only used locally as there was little international trade in those days. The US Dollar being world reserve currency, if it goes down, it is going to be big problem worldwide and it will be very serious indeed. I think what we might see is a new currency rolled out kind of like the Euro was, but the old dollar will be devalued against it meaning we all loose part of our money when we trade our old dollars for the new ones. That is one way the government can erase its some debts.

            • Thanks! This section is from the Early American Money section of Wikipedia.

            • It seems like we have so many economists denying the connection between energy and the economy (except as a recipient of “demand” if the economy is growing for some other reason), that most stay away from the issue. When a country is mostly doing manufacturing, like China, the connection between available supply and rising production is clearer than when a country is mostly providing services.

            • Christopher Johnson says:

              Gail,

              It’s difficult for a layman not skilled in the geomancy of economics or sworn to uphold its secrets to understand why economists do some things and refuse to do others. But I will cheerfully and gratefully state that your clear depiction of the energy – economy link is the first time I’d seen the subject articulated in detail. The Economist magazine has mentioned periodically through the years that something like 11 of the last 12 recessions were caused by petroleum crises, but they didn’t elaborate.

              Thus, when I saw that NYT article that alluded to the linkage, it was a big deal. It almost makes one wonder if the NY Fed called the NYT demanding that the writer and the editor be fired for inciting fear or telling the truth (one and the same sometimes).

              Now to the subject at hand, you said ‘when a country is mostly doing manufacturing, like China, he connection between available supply and rising production is clearer than when a country is mostly providing services.’ I would propose that Japan (which relied heavily on cheap nuclear power) really suffered an economic shock when it had to replace the inexpensive nuclear electricity with coal and expensive LPG and LNG. Can Japan even break even?

              This could very well explain PM Abe’s ‘race to the bottom’ for the Yen: the only positive elasticity possible to exploit is relative labor rates. The other primary inputs, raw materials, energy have prices tabulated globally and therefore increasingly dear. So Abe is taking Japanese manufacturing (Toyota, etc.) back to an earlier era. Even thought the Japanese workers are among the most productive in the world, their relative wages are necessarily slashed. And so far, at least, it appears that the country has accepted / approved his policies. But time wounds all heals…

            • It is not clear how well this is working, now that the higher cost of fuel needs to be factored in. The stock market has dropped 15% in eight days of trading. Japan’s Market Has Bulls Reeling. (You may have to type the name into google.)

            • Christopher Johnson says:

              Right. The big risk PM Abe is taking is that the ‘automatic correction factors’ of the bond market will counteract the desired stimulative effect he has been trying to induce. At first the stock market behaved as he wished it to, but more recently it’s been falling, making the currency and bonds more dear. Ooops gets to be really big when you have a GDP – Debt ratio of 250%. Could Abe’s gamble result in Japan defaulting? The regional and strategic implications are too gruesome to consider.

            • Scott says:

              I would bet that Japan may be the first large country to default.

            • Scott says:

              Chris a chart I found on the Yen, Their QE seemed to push it up fast and now running out of gas?
              http://www.yenchart.com/Chart-Dollar-Yen.htm

            • Scott says:

              Chris everyone – one last chart on Japan, the Yen priced in gold. The last chart I sent was US dollar priced in yen. They may be paying more for gold than others due to their currency collapse but it is rising in value in other ways, but this shows that it is in decline in value.

              http://www.goldpriceoz.com/gold-price-japan/

            • Scott says:

              Chris and everyone on the last link I sent – about Japan, you have to click on the ten year chart to see the trend I discussed. http://www.goldpriceoz.com/gold-price-japan/

            • Christopher Johnson says:

              Hi Scott: Thanks for your research. Good charts on Yen to gold exchange rates, and good description of what’s happening. Japan has not been struck by the Gold Bug for quite awhile, but is more sensitive to bonds, which are easier for their big trading houses to buy and sell by the bushel-basketful.
              Japan’s financial portfolio is not easy to decipher or assess. The average Japanese has far greater savings than do Europeans or Americans. My understanding is that Japan didn’t really begin QE until Abe was elected late last year. But the steps PM Abe took are increasingly seen as risky, as in this article:
              http://chinamatters.blogspot.com/2013/06/china-has-medium-sized-financial-anvil.html
              One can also liken these maneuverings to a chess game (‘Go’ or ‘Surround Chess’ is equally popular in Japan and China). It can also be likened to a traditional dance, a pas de deux, or the kind of martial arms dance karate and kung fu experts practice.
              However, I’m not sure if the Chinese or Japanese have been reading Gail Tverberg’s blog, so might be scratching their collective heads about some of these issues.
              Cheers, Chris

            • Scott says:

              Hello Chris, Yes and interest rate spike will really hurt Japan or the US too. It looks like Japan started QE in the early 2000’s, This latest round is huge and doubles Japans money supply.
              http://en.wikipedia.org/wiki/Quantitative_easing
              http://www.guardian.co.uk/business/2013/apr/04/japan-quantitative-easing-70bn

            • I expect that quite a lot of the savings of Japanese citizens is held in Japanese debt. So if the government defaults, it will have a lot of elderly citizens, who do not have funding for their retirement.

            • Christopher Johnson says:

              Yes Ma’am,
              I believe you will find that the Japanese are among the ‘world’s best’ savers. Since 1945, perhaps before, the Post Office Savings Bank has been collecting regular deposits from almost the entire population. It’s one of the most powerful funds in the world, perhaps. I will look it up, but remember studying it somewhat in decades past, and am confident in predicting that the average elderly Japanese will be well cared for. Their sense of obligation and formalized relationships constitutes a structured society that cannot be easily comprehended from afar.

            • Jan Steinman says:

              And yet, I recall reading of at least one Japanese prefecture where the old people were expected to go up the mountain and die, rather than be a burden on future generations.

              With all the quantitative easing going on, is the same thing happening metaphorically with their savings?

            • Christopher Johnson says:

              Sir I do not know the answer to your intriguing question. I’ll ask Mr. Google and some of his friends. The ‘confrontational approach’ to medical care rationing may be unappealing, but also may be unavoidable in a collapse. In Confucian societies where responsibilities are more emphasized than rights, behaviors may appear strange to outsiders.

            • Christopher Johnson says:

              Jan, the answer is not particularly attractive. After a few tries, the search question “Japan elderly dying alone” yielded far more hits than I would want to admit. Good articles from respected publications discuss the hundreds of thousands of single Asians who are dying alone. The articles note how modern lifestyles chipped away at Confucian values, leaving elderly away from their families. Sure would be nice to be 25 again. And some government ministers (in Japan) are on record as encouraging the old folks to hurry up and die. Take that, Confucius!

            • Scott says:

              Hello Chris and others this is on a slightly different subject, but rates are already going up in many places.
              http://namawinelake.wordpress.com/about/pigs-10-year-bond-yields-bloomberg/

            • Christopher Johnson says:

              Thanks Scott. You’re right that Japan was using a milder stimulation program for many years, and just recently throttled up. Although we’ve never experienced deflation in our lifetimes, economists claim it is the worst situation an economy can encounter.– much worse than inflation. And with Japan’s debt to gdp ratio of greater than 200, they were running out of time. So PM Abe took a gamble with the expanded QE / stimulation program. If it succeeds, Japanese will be relatively poorer, but still competitive. If it fails, Japan could be like sushi tuna…ready for cutting up and selling wherever a buyer might be.

            • Scott says:

              Hello Chris, they surely do not want deflation and they are hell bent on that, they can print away and inject money into many programs and in many ways, and it will surely be inflationary. And the US and Euro Zones are on the same plan. But when the bond markets go down – who knows we could see a sudden and deep deflation on the other side of the coin. This is going to be tricky.

            • Scott says:

              Hi Chris and others, that reminds me about the social fabric and that is the part I have been talking about that holds back the collapse, the social fabric and groups of people helping each other holds back what looks sometimes like total disaster. Japan does have deep respect to their elders and they will most likely surprise us in what they come up with. No doubt that they are in for hard times though such as all of us are. The social fabric can be strong and it has a power to overcome may obstacles and forestall things for longer than we think.

              That gets me back to my points I made yesterday about the uneven collapse I see out there it is not fair to everyone, some will live in good areas with loving neighbors and families, churches etc. and others will live in places of upheaval and it may be that you were born into those countries which ever they are.

            • Scott says:

              Hi Chris, I know we have been talking a lot about Japan but is a pertinent subject. So you say they are good at saving money, good savers. The problem with that is that they may most likely bough Japanese Bonds which as we know in a currency crisis or rising rates scenario they will fall in value very fast and maybe even be worthless in a true financial crisis.

              I do think that many of them bought investments around the world and other things such as real estate, farm lands and commodity investments. But I think many Japanese own government bonds and that is worrisome that their savings are in those things although it is great to believe in ones country — but when it comes to ones finances we have to be careful and bonds of any country are not on my list.

            • When I have talked to retirement actuaries, they have come to the conclusion that they only way a country-wide retirement program can work is if those who are working today produce enough goods and services to provide for both the workers (and their children) and the retirees. If a person stops to think about the practicalities of the situation, this is the way it has to work as well. There is no way that a person, during his or her lifetime can set aside food and clothing and all of the goods and services needed during retirement. Instead, we have to use goods and services that are actually produced in our retirement years.

              We have bank accounts and Post Office Savings Banks that lead us to the fiction that we can set aside funds for the goods and services we will need in retirement, but when the time comes when it is necessary to buy all of these goods and services, if the money is there but the goods and services are not, the savers will be in for a big surprise. The money they put away won’t really be able to buy what they need.

              The Japanese government has huge public debt. Most of this is held by the Japanese people. But the way things are going, the Japanese will produce less in the future than they do today (because they won’t be able to afford energy products to run their factories). So at best, a much smaller pie will need to be divided between the workers and the (very many) retirees. The situation looks worrisome.

            • Christopher Johnson says:

              Gracias, Gail. Or should it be ‘Domo Arigato’? You have neatly described the demographic trap the Japanese are in, which the Chinese are entering, and which the Germans and some other Europeans are facing. One additional feature that should not be overlooked is that all these societies are largely urban (the Chinese are least urbanized, but pushing harder…). and therefore more expensive than country living. While living with family reduces financial burdens at the routine cost of increased frictions, nursing homes make retirement savings disappear.

            • We have the luxury of nursing homes now. This is not something that can last for the long term.

            • Jan Steinman says:

              The entire notion of “retirement” is a relatively recent phenomenon — corresponding roughly with the age of fossil sunlight exploitation. I don’t expect it to continue for much longer.

              In the near future, most of us will work until we die. Some of us, through luck or planning, will make ourselves invaluable to younger people immediately around us, and will get away with less demanding work. But I think that’s as good as it gets for the “99%.”

            • I agree that retirement is likely going away. I believe that Social Security was started in the 1930s as a way of reducing the number of unemployed. At that point, there were a lot of displaced farm workers because coal made such a difference in the productivity of horses. Also, the availability of barbed wire allowed fields to be fenced in, and electricity (often enabled by hydroelectric, which required coal to make the concrete and the transmission lines) helped with other needs. There weren’t jobs for everyone. As fossil fuels go away, the world will go back to the old system of everyone working.

            • Scott says:

              Gail that is scary because most of us are getting older and we will not have our government pensions as courthouse workers, cops, school teachers we will all be without checks and how are we going to mitigate the missing retirements? Looks like chaos and you know I worry about our old people and like many of my neighbors that are just getting by on small social security checks.

              Many Including us do not have insurance for medical which has become far too expensive.

            • Scott says:

              Hello Gail and everyone, not to sound like a gold bug but gold is getting expensive for countries that are having trouble like Japan, Greece Etc. They are devaluing their currencies.

              Japan recently started a QE to double their currency 2 for 1, twice the amount of money chasing the same goods. Although the money does not flow evenly into all areas it will eventually make its way into the streets and prices should double too but I think it will be uneven like those prices they pay for a sushi tuna fish. So food and basic cost will likely get hit making it harder for young families and old alike. I see the same thing here and in Europe and expect it to get worse in the next few years.

        • That is a very good article you linked to.

          I am not sure that inflation/deflation will matter going forward. Money won’t hold its value, and we will have problems buying things we need, but those descriptions may not hold.

          • Scott says:

            Looks to be very oil dependent…Japan’s nuclear was only 30 percent with all plants running before the quake so that means 70 percent was fossil fuels before that and now maybe 80 percent. Fossil fuels seem to be the easy political solution these days. Meaning it is easier to build a coal or natural gas generation plant than a nuclear one. They are all dangerous, so pick your poison.

  10. Dave Fabick, Hermann, MO says:

    Great list Gail! As we both know there are no silver bullets just multiple tasks and actions. Look at it like insurance. Spend a few percent of your income on survival insurance every month. I recommend a 2 month supply of essential food stuff, water purification, camping equipment, and a money belt with 10 oz gold coins and $100 bills (12 coins 6 bills). I have been building up a collection of gadgets, tools, and gear that have a deindustrialized future, I recommend a library of relevant books both for enjoyment and essential reference. Barter items with long shelf life (alcohol as an example). If able developing a situation where animal power can be utilized for transport and agriculture. Take care of your health and teeth now. Most important is a psychological and spiritual understanding and acceptance. Part of this is actual actions of preparation. Spend time without modern conveniences, go 3 days without food, and visit a slum.

    • Ert. says:

      To make that a more friendly experience – try to do 5-7 day trips hiking with a backpack or a journey with a bike. You have to carry tent, food, clothes and can only shop for water and some extra fresh food stuff – but the core food you should take with you.

      You still can call that holiday, use camp-sites – but it teaches oneself how much is really required.

      If you want to extend that experience – try it in the winter time or with bad weather. That is something I still have to try out , not with an aim for “preparation”, but to learn and experience my limits. The whole experience build self confidence and shifts part of ones value system – which is most important (for me).

    • Mel Tisdale says:

      Some slums are best avoided. When I lived in Lisbon, the police would only go into the local slum mob-handed, pistols drawn. I think that if anyone had simply strolled into it, they would have come out minus anything of value, including any gold fillings they had.

    • The issue I see with 10 gold coins and $100 bills is these denominations are higher than what you would need for most purposes. I would think a few silver coins and $20 bills would be more helpful (if they work as currency).

      One of the big issues I see is maintaining roads. If you can’t do that, there is a huge problem. Even animal-pulled carts become a problem.

      I have a hard time seeing animal power being used to a significant extent. Horses in particular need land to grow their food, so they are in some sense expensive. In ancient times, kings used them for their chariots, but common people couldn’t afford them. I am told that horses today are much larger than they were 100 or 200 years ago. The smaller horses in days past required less food, so were less expensive to keep.

      • Ert says:

        You are right with gold and larger bills. No one can give you change for those – of want to have something that is hard to pass on for the same reason. Small denominations and silver is the way to got – if there is any way. Gold is primarily for storage in terms of decades and more stable times or issues of “last resort”.

        In terms of street maintenance – most stress is put on them by heavy vehicles. Roads have to be smaller, lighter and heavy traffic has to parish, as the just-in-time and cesar-salat-from 2.000 miles away are over, soon. Where I live the are some 100 of metres of cut off road – with primarily bicycle usage and no maintenance this part still keeps quite well over the last 10 years.

      • Jan Steinman says:

        Oxen are multi-use animals that may be the motive power of choice for the peasant class. Goats can pull a significant load, and are generally easier to manage and get by on a rougher diet.

        • One point that a person who has tried using draft animals for plowing in Finland has made, is that they have to be pretty small, or they will eat up all of the food supply that is produced. I don’t know how trainable goats are. It might be that they would work for certain purposes.

          • Scott says:

            Goats: Not my favorite milk or meat but eatable. This may off subject and not solve our issues but, I grew up with goats at my neighbors house and you can milk them and as Jan said they eat almost anything including fir pine needles. If I did not have gas for my lawnmower, a goat would be an option as I have a large area to keep mowed, mostly weeds. My problem is I would have to spend a bunch of money on a fence as there is none now. But I agree with Jan that goats are very helpful and are easier to handle. They can live on steep slopes you just need a fence of some sort to keep them in. They provide milk and meat and needed house cleaning in time of need. Well, a make shift fence and a few goats would be a good thing in hard times and they do not need much land to survive and can live on steep hillsides. They keep the fire danger down and are usable if needed for meat. An easy to manage animal that helps your property in most cases.

          • Jan Steinman says:

            “I don’t know how trainable goats are. It might be that they would work for certain purposes.”

            You hit the nail on the head! Goats are generally very intelligent and trainable. Ours know their names and a half-dozen voice commands. Most of them lead well, a couple will even “heel” on command. I haven’t tried any on a cart, but would love to if I had the time. It would be great to have them pulling around stuff that is now done by wheelbarrow. (They give better milk and companionship than most wheelbarrows.)

            But as with people, it’s motivation more than intelligence that is important. I’ve found a few cut-up pears in my jacket pocket can raise their IQ by a fair amount. 🙂

          • Jan Steinman says:

            Scott wrote: “Goats: Not my favorite milk or meat but eatable.”

            There are many factors that influence flavour of milk and meat. You’ve been spoiled by the industrial food system, which provides a rigidly standardized product!

            As a vegetarian, I don’t know too much about meat, but certainly the browse that they have available and whether they’re a wether (castrated) can have a huge influence.

            Milk flavour is also influenced by browse, but also if a buck runs with the does, how quickly the milk is chilled, how much agitation happens, processing, the breed, state of general health, and even the individual animal.

            People who have our sweet Nubian milk often can’t tell it from cow’s milk, except it’s richer. We treat it like champagne, milking down the side of the bucket, never shaking it, etc. The caprinols that give it a “goaty” flavour are long-chain fatty acids, the shorter of which have more goaty flavour than the longer chains. Hand milking makes better tasting milk! Many European breeds (French Alpine, Toggenburg, Obehasli) used for cheese-making have been selected for goaty flavour.

            We milk into a double bucket, with the outer bucket filled with ice cubes, which cools it super-quickly.

            If all you’ve had is machine-milked, pasteurized swill from the store, I don’t blame you for not liking goat milk! But the backyard goat will likely taste much better.

            • Scott says:

              Hello Jan and others, I understand you about all the junk processed foods out there. When I walk through the store there are very little unprocessed plain simple items. I try to buy organic when I can and just simple ingredients for the most part, which involves cooking at home which is harder to do when you are working outside the home, but it is much healthier. I also have avoid gluten as I am much healthier without it and that is in most everything too. Gluten was making me ill I discovered a couple of years ago. It is expensive to eat well as organic foods surely costs more but it is worthwhile and I like to support the organic farmer with my pocket book.

              I will not buy eggs unless they are cage free as I do not like to see factory chicken farms. Those also cost more but are better too. At least we can support the responsible farmer that does organic farming whether it is growing organic vegetables or organic chicken. Being vegetarian would probably be good for me too, but I guess I was raised on meat and I have not been able to give it up. Factory farming is very troublesome to me, but it seems like the only way they can feed so many billions. I do not like to see small animals in tiny cages. I wish all our animals that are raised for meat could be free range and allowed some freedom and fed nothing but wholesome organic feeds, but that is not our world today for the most part. I think if more people spend the money on the organic free range type foods the factory farmer could be converted to something better.

              I cannot think of a more useful animal than a goat. When I was growing up my friend had some goats and we used to milk them and I have tasted the milk and it is different tasting, but I know how good raw milk is for you. Sounds like they are smart too. Recently I visited someone that has sheep and I got to pick one up they sure are gentle creatures. They provide wool and also meat and they seem easy to manage. So maybe a pig too! So Goats, Chickens, lambs and pigs sounds like the way to go depending on your type of property. I know lambs mostly like to graze on grass so they may require more acreage to manage.

      • xabier says:

        Historically, good horses were very rare in Western Europe, (hence the small numbers of of knights) and bullock carts and oxen for ploughing were the order of the day, and of course mules for long-distance transport over rough or non-existent roads.

        I don’t see many of those around at present!

        The magnificent working horses of Northern Europe were nearly all shot after WW2, when tractors really came in, it was a tragedy.

        More old and useful breeds of dogs have been retained as they still have a role in country sports, although many breeds have degenerated completely in the show-ring (shrinkage of brain size, etc). Dogs for guarding, fighting, warning, keeping us company and finding and killing food: we can’t survive without them really, they are worth the expense and more valuable than a human being who can’t pull their weight….

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