Limits to Growth–At our doorstep, but not recognized

How long can economic growth continue in a finite world? This is the question the 1972 book The Limits to Growth by Donella Meadows and others sought to answer. The computer models that the team of researchers produced strongly suggested that the world economy would collapse sometime in the first half of the 21st century.

I have been researching what the real situation is with respect to resource limits since 2005. The conclusion I am reaching is that the team of 1972 researchers were indeed correct. In fact, the promised collapse is practically right around the corner, beginning in the next year or two. In fact, many aspects of the collapse appear already to be taking place, such as the 2008-2009 Great Recession and the collapse of the economies of smaller countries such as Greece and Spain. How could collapse be so close, with virtually no warning to the population?

To explain the situation, I will first explain why we are reaching Limits to Growth in the near term.  I will then provide a list of nine reasons why the near-term crisis has been overlooked.

Why We are Reaching Limits to Growth in the Near Term

In simplest terms, our problem is that we as a people are no longer getting richer. Instead, we are getting poorer, as evidenced by the difficulty young people are now having getting good-paying jobs. As we get poorer, it becomes harder and harder to pay debt back with interest. It is the collision of the lack of economic growth in the real economy with the need for economic growth from the debt system that can be expected to lead to collapse.

The reason we are getting poorer is because hidden parts of our economy are now absorbing more and more resources, leaving fewer resources to produce the goods and services we are used to buying. These hidden parts of our economy are being affected by depletion. For example, it now takes more resources to extract oil. This is why oil prices have more than tripled since 2002. It also takes more resource for many other hidden processes, such as deeper wells or desalination to produce water, and more energy supplies to produce metals from low-grade ores.

The problem as we reach all of these limits is a shortage of physical investment capital, such as oil, copper, and rare earth minerals. While we can extract more of these, some, like oil, are used in many ways, to fix many depletion problems. We end up with too many demands on oil supply–there is not enough oil to both (1) offset the many depletion issues the world economy is hitting, plus (2) add new factories and extraction capability that is needed for the world economy to grow.

With too many demands on oil supply, “economic growth” is what tends to get shorted. Countries that obtain a large percentage of their energy supply from oil tend to be especially affected because high oil prices tend to make the products these countries produce unaffordable. Countries with a long-term decline in oil consumption, such as the US, European Union, and Japan, find themselves in recession or very slow growth.

Figure 1. Oil consumption based on BP's 2013 Statistical Review of World Energy.

Figure 1. Oil consumption based on BP’s 2013 Statistical Review of World Energy.

Unfortunately, the problem this appears eventually to lead to, is collapse. The problem is the connection with debt. Debt can be paid back with interest to a much greater extent in a growing economy than a contracting economy because we are effectively borrowing from the future–something that is a lot easier when tomorrow is assumed to be better than today, compared to when tomorrow is worse than today.

We could not operate our current economy without debt. Debt is what has allowed us to “pump up” economic growth. Consumers can buy cars, homes, and college educations that they have not saved up for. Businesses can set up factories and do mineral extraction, without having past profits to finance these operations. We can now operate with long supply chains, including many businesses that are dependent on debt financing. The ability to use debt allows vastly more investment than if potential investors could only the use of after-the-fact profits.

If we give up our debt-based economic system, we lose our ability to extract even the oil and other resources that appear to be easily available. We can have a simple, local economy, perhaps dependent on wood as it primary fuel source, without debt. But it seems unlikely that we can have a world economy that will provide food and shelter for 7.2 billion people.

The reason the situation is concerning is because the financial situation now seems to be near a crisis. Debt, other than government debt, has not been growing very rapidly since  2008. The government has tried to solve this problem by keeping interest rates very low using Quantitative Easing (QE). Now the government is cutting back in the amount of QE.  If interest rates should rise very much, we will likely see recession again and many layoffs. If this should happen, debt defaults are likely to be a problem and credit availability will dry up as it did in late 2008. Without credit, prices of all commodities will drop, as they did in late 2008. Without the temporary magic of QE, new investment, even in oil, will drop way off. Government will need to shrink back in size and may even collapse.

In fact, we are already having a problem with oil prices that are too low to encourage oil production. (See my post, What’s Ahead? Lower Oil Prices, Despite Higher Extraction Costs.) Other commodities are also trading at flat to lower price levels. The concern is that these lower prices will lead to deflation. With deflation, debt is strongly discouraged because it raises the “inflation adjusted” cost of borrowing. If a deflationary debt cycle is started, there could be a huge drop in debt over a few years. This would be a different way to reach collapse.

Why couldn’t others see the problem that is now at our door step?

1. The story is a complicated, interdisciplinary story. Even trying to summarize it in a few paragraphs is not easy. Most people, if they have a background in oil issues, do not also have a background in financial issues, and vice versa.

2. Economists have missed key points. Economists have missed the key role of debt in extracting fossil fuels and in keeping the economy operating in general. They have also missed the fact that in a finite world, this debt cannot keep rising indefinitely, or it will grow to greatly exceed the physical resources that might be used to pay back the debt.

Economists have missed the fact that resource depletion acts in a way that is equivalent to a huge downward drag on productivity. Minerals need to be separated from more and more waste products, and energy sources need to be extracted in ever-more-difficult locations. High energy prices, whether for oil or for electricity, are a sign of economic inefficiency. If energy prices are high, they act as a drag on the economy.

Economists have missed the key role oil plays–a role that is not easily substituted away. Our transportation, farming and construction industries are all heavily dependent on oil. Many products are made with oil, from medicines to fabrics to asphalt.

Economists have assumed that wages can grow without energy inputs, but recent experience shows the economies with shrinking oil use are ones with shrinking job opportunities. Economists have built models claiming that prices will rise to handle shortages, either through substitution or demand destruction, but they have not stopped to consider how destructive this demand destruction can be for an economy that depends on oil use to manufacture and transport goods.

Economists have missed the point that globalization speeds up depletion of resources and increases CO2 emissions, because it adds a huge number of new consumers to the world market.

Economists have also missed the fact that wages are hugely important for keeping economies operating. If wages are cut, either because of competition with low-wage workers in warm countries (who don’t need as high a wages to maintain a standard of living, because they do not need sturdy homes or fuel to heat the homes) or because of automation, economic growth is likely to slow or fall. Corporate profits are not a substitute for wages.

3. Peak Oil advocates have missed key points. Peak oil advocates are a diverse group, so I cannot really claim all of them have the same views.

One common view is that just because oil, or coal, or natural gas seems to be available with current technology, it will in fact be extracted. This is closely related to the view that “Hubbert’s Peak” gives a reasonable model for future oil extraction. In this model, it is assumed that about 50% of extraction occurs after the peak in oil consumption takes place. Even Hubbert did not claim this–his charts always showed another fuel, such as nuclear, rising in great quantity before fossil fuels dropped in supply.

In the absence of a perfect substitute, the drop-off can be expected to be very steep. This happens because population rises as fossil fuel use grows. As fossil fuel use declines, citizens suddenly become much poorer. Government services must be cut way back, and government may even collapse. There is likely to be huge job loss, making it difficult to afford goods. There may be fighting over what limited supplies are available.What Hubbert’s curve shows is something like an upper limit for production, if the economy continues to function as it currently does, despite the disruption that loss of energy supplies would likely bring.

A closely related issue is the belief that high oil prices will allow some oil to be produced indefinitely. Salvation can therefore be guaranteed by using less oil. First of all, the belief that oil prices can rise high enough is being tested right now. The fact that oil prices aren’t high enough is causing oil companies to cut back on new projects, instead returning money to shareholders as dividends. If the economy starts shrinking because of lower oil extraction, a collapse in credit is likely to lead to even lower prices, and a major cutback in production.

4. Excessive faith in substitution. A common theme by everyone from economists to peak oilers to politicians is that substitution will save us.

There are several key points that advocates miss. One is that if a financial crash is immediately ahead, our ability to substitute disappears, practically overnight (or at least, within a few years).

Another key point is that today’s real shortage is of investment capitalin the form of oil and other natural resources needed to manufacture the new natural gas powered cars and the fueling stations they need. A similar shortage of investment capital plagues plans to change to electric cars. Wage-earners of modest means cannot afford high-priced plug in vehicles, especially if the change-over is so fast that the value of their current vehicle drops to $0.

Another key point is that the alternatives we looking at are limited in supply as well. We use far more oil than natural gas; trying to substitute natural gas for oil will lead to a shortfall in natural gas supplies quickly. Ramping up electric cars, solar, and wind will lead to a shortage of the rare earth minerals and other minerals needed in their production. While more of these minerals can be accessed by using lower quality ore, doing so leads to precisely the investment capital shortfall that is our problem to begin with.

Another key point is that electricity does not substitute for oil, because of the huge need for investment capital (which is what is in short supply) to facilitate the change. There is also a timing issue.

Another key point is that intermittent electricity does not substitute for electricity whose supply can be easily regulated. What intermittent electricity substitutes for is the fossil fuel used to make electricity whose supply is more easily regulated. This substitution (in theory) extends the life of our fossil fuel supplies. This theory is only true if we believe that  coal and natural gas extraction is only limited by the amount those materials in the ground, and the level of our technology. (This is the assumption underlying IEA and EIA  estimates of future fossil use.)

If the limit on coal and natural gas extraction is really a limit on investment capital (including oil), and this investment capital limit may manifest itself as a debt limit, then the situation is different. In such a case, high investment in intermittent renewables can expected to drive economies that build them toward collapse more quickly, because of their high front-end investment capital requirements and low short-term returns.

5. Excessive faith in Energy Return on Energy Investment (EROI) or Life Cycle Analysis (LCA) analyses. Low EROI returns and poor LCA returns are part of our problem, but they are not the whole problem.  They do not consider timing–something that is critical, if our problem is with inadequate investment capital availably, and the need for high returns quickly.

EROI analyses also make assumptions about substitutability–something that is generally not possible for oil, for reasons described above. While EROI and LCA studies can provide worthwhile insights, it is easy to assume that they have more predictive value than they really do. They are not designed to tell when Limits to Growth will hit, for example.

6. Governments funding leads to excessive research in the wrong directions and lack of research in the right direction. Governments are in denial that Limits to Growth, or even oil supply, might be a problem. Governments rely on economists who seem to be clueless regarding what is happening.

Researchers base their analyses on what prior researchers have done. They tend to “follow the research grant money,” working on whatever fad is likely to provide funding. None of this leads to research in areas where our real problems lie.

7. Individual citizens are easily misled by news stories claiming an abundance of oil. Citizens don’t realize that the reason oil is abundant is because oil prices are high, debt is widely available, and interest rates are low. Furthermore, part of the reason oil appears abundant is because low-wage citizens still cannot afford products made with oil, even at its current price level. Low employment and wages feed back in the form of  low oil demand, which looks like excessive oil supply. What the economy really needs is low-priced oil, something that is not available.

Citizens also don’t realize that recent push to export crude oil doesn’t mean there is a surplus of crude oil. It means that refinery space for the type of oil in question is more available overseas.

The stories consumers read about growing oil supplies are made even more believable by forecasts showing that oil and other energy supply will rise for many years in the future. These forecasts are made possible by assuming the limit on the amount of oil extracted is the amount of oil in the ground. In fact, the limit is likely to be a financial (debt) limit that comes much sooner. See my post, Why EIA, IEA, and Randers’ 2052 Energy Forecasts are Wrong.

8. Unwillingness to believe the original Limits to Growth models. Recent studies, such as those by Hall and Day and by Turner, indicate that the world economy is, in fact, following a trajectory quite similar to that foretold by the base model of Limits to Growth. In my view, the main deficiencies of the 1972 Limits to Growth models are

(a) The researchers did not include the financial system to any extent. In particular, the models left out the role of debt. This omission tends to move the actual date of collapse later, and make it less severe.

(b) The original model did not look at individual resources, such as oil, separately. Thus, the models gave indications for average or total resource limits, even though oil limits, by themselves, could bring down the economy more quickly.

I have noticed comments in the literature indicating that the Limits to Growth study has been superseded by more recent analyses. For example, the article Entropy and Economics by Avery, when talking about the Limits to Growth study says, ” Today, the more accurate Hubbert Peak model is used instead to predict rate of use of a scarce resource as a function of time.” There is no reason to believe that the Hubbert Peak model is more accurate! The original study used actual resource flows to predict when we might expect a problem with investment capital. Hubbert Peak models overlook financial limits, such as lack of debt availability, so overstate likely future oil flows. Because of this, they are not appropriate for forecasts after the world peak is hit.

Another place I have seen similar wrong thinking is in the current World3 model, which has been used in recent Limits to Growth analyses, including possibly Jorgen Randers’ 2052. This model assumes a Hubbert Peak model for oil, gas, and coal. The World3 model also assumes maximum substitution among fuel types, something that seems impossible if we are facing a debt crisis in the near term.

9. Nearly everyone would like a happy story to tell. Every organization from Association for the Study of Peak Oil groups to sustainability groups to political groups would like to have a solution to go with the problem they are aware of. Business who might possibly have a chance of selling a “green” product would like to say, “Buy our product and your problems will be solved.” News media seem to tell only the stories that their advertisers would like to hear. This combination of folks who are trying to put the best possible “spin” on the story leads to little interest in researching and telling the true story.

Conclusion

Wrong thinking and wishful thinking seems to abound, when it comes to overlooking near term limits to growth. Part of this may be intentional, but part of this lies with the inherent difficulty of understanding such a complex problem.

There is a tendency to believe that newer analyses must be better. That is not necessarily the case. When it comes to determining when Limits to Growth will be reached, analyses need to be focused on the details that seemed to cause collapse in the 1972 study–slow economic growth caused by the many conflicting needs for investment capital. The question is: when do we reach the point that oil supply is growing too slowly to produce the level of economic growth needed to keep our current debt system from crashing?

It seems to me that we are already near such a point of collapse. Most people have not realized how vulnerable our economic system is to crashing in a time of low oil supply growth.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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598 Responses to Limits to Growth–At our doorstep, but not recognized

  1. Pingback: The Future is Impossible……. | Damn the Matrix

  2. Ert says:

    It may be of interest to all that the original “Limits to Growth” book is now freely available as scan (PDF) and online resource: http://www.donellameadows.org/the-limits-to-growth-now-available-to-read-online/

    You all may also be interested in the study “Revisiting Limits to Growth After Peak Oil” which is openly available at: http://www.esf.edu/efb/hall/2009-05Hall0327.pdf

    Happy reading
    Ert

  3. Stilgar Wilcox says:

    Gail, lately there have been many more posts than usual, which is great, however I’ve been having a difficult time finding my old posts as I’m sure many others are as well. Is there a way to assign a number to each posting? If someone is replying to a post in the middle somewhere, maybe there number could be the number of the post they are replying to with a letter afterwards, like 128A. It would make it very easy to find posts and reference using that coding in new posts, e.g. In response to 154C: blah, blah, etc.

    • When I wrote to support about the problem of managing comments before, this was the response I received.

      Wow, congrats on the number of comments you get!

      There isn’t a way to mark comments as read. Folks might want to subscribe to comments via RSS and manage them in an RSS reader – http://ourfiniteworld.com/comments/feed/

      I don’t know what exactly an RSS reader does–if it would be helpful or not. I can try talking to a “happiness engineer” again, but I think they are used to maybe a half a dozen comments per post.

      • timl2k11 says:

        An RSS reader is good for keeping track of new comments, but not much else.

      • misha says:

        Gail, i am a long time reader, but have never commented. Your blog is challenging, but you are writing about extremely complex stuff and you do an excellent job of being clear and concise. Thank you.

        An RSS reader allows one to subscribe to sites like blogs and their comments feed. I am subscribed to well over 100. I use the Digg Reader (http://digg.com/). It lets me organize my feeds in folders and makes following anything MUCH easier. Every morning when i sit down at the puter with my espresso I can open digg and any blogs (& comment feeds) that have posted new stuff is all in one place waiting for me.

        Each blog is different, but on your site, the dateline under each commenter’s name is a link to that comment and if you hover over it you can see the # that has been assigned to it. That may or may not help you Stilgar.

        Another way to find stuff on a page is the Control-f command. That allows you to search the page for a specific word or words. For example, at the time of this comment, the word Stilgar appears 4 times on this page. I hope this helps. It is something i use alot to navigate pages like here with a gazillion comments.

        Thank you gail for hosting this great blog and thank you all you commenters for the informative, civil, friendly, calm, and educational conversation. Our Finite World contributes to helping me retain some shred of sanity in a world going crazy.

  4. Stilgar Wilcox says:

    http://www.reuters.com/article/2014/02/07/us-usa-economy-idUSBREA1608S20140207
    ‘U.S. hiring struggles to rebound from winter chill’

    “The second straight month of weak hiring – marked by declines in retail, utilities, government, and education and health employment – could be a problem for the Federal Reserve, which is scaling back its monthly bond-buying stimulus program. However, its next policy-setting meeting is not until March 18-19. By then, the economic clouds may have cleared.Most economists stuck to predictions that the central bank would cut its monthly purchase pace by another $10 billion in March, as it did last month and the month before.

    “We don’t think the January report is enough by itself to stop the Fed from tapering again,” said Julia Coronado, chief North America economist at BNP Paribas. She said, however, that if hiring in February also proves weak and equity markets decline, the Fed was likely to show “more patience” in tapering its stimulus.”

    As we can clearly see QE is now being seen as an ongoing, permanent Fed tool to use as a stimulus for hiring. And we can also see there is a hair-trigger attitude to tapering or showing ‘more patience’, i.e. if economic conditions warrant more stimulus, printing more money is the go to policy. Uh duh, after five, going on six years now of continuous forms of QE, do we get the impression there is a larger problem afoot here, like diminishing returns, the low hanging fruit is gone, scraping the expensive non-conventional barrel, ever more money invested for lower returns, descending EROEI, and so on.

    Read this part of the article that even admits the implied contradiction:
    U.S. job creation slowed sharply over the past two months, turning in the weakest performance in three years and raising the prospect that the economy may be losing momentum. At the same time, however, the unemployment rate hit a new five-year low of 6.6 percent in January even as Americans piled back into the labor market to search for work. The Jekyll and Hyde report from the Labor Department on Friday whipsawed U.S. markets in early trade.

    So even though job creation sharply slowed, unemployment dropped? Where’s the logic? And in spite of this the stock market rebounded? That is probably just a temporary reaction to the 1000 pt. loss on the Dow since the beginning of the year. Once a market goes bearish, there are always temporary retracings to the upside. But no doubt if the Fed does continue to taper it will keep dropping. Stay tuned for more info. as this debacle unfolds…

    • edpell says:

      Gail’s point is taper no taper does not matter. It is a shortage of physical resources that matters. No reorganizing the deck chairs will fix it.

    • The combination of low job creation and lower unemployment struck me as strange too. Also the stock market rising. I hadn’t realized the next Fed meeting isn’t until March 18-19. Quite a bit could happen by then.

  5. Bill Simpson says:

    Hi Gail,
    You might want to push your book on the ‘Coast to Coast AM’ radio show with George Noory. He has millions of devoted followers on hundreds of radio stations. The listeners LOVE anything related to doom and gloom, such as asteroid hits, nuclear meltdowns, solar storms destroying the electric grid, tsunamis, volcanic explosions, earthquakes, you name it. He does occasionally have real scientists on his show. It’s not all crackpots. And money is money. Nobody ever asks how you got it, when you go to spend it.
    The Huffington Post also comes to mind. Millions visit it too.
    Keep up the excellent work. Whenever I can fit it in, I’m referencing your site in my comments on nola.com, the Times Picayune newspaper in New Orleans. We have a lot of oil businesses down here. Big Oil runs Louisiana.

    • Thanks for the suggestion.

      At this point I don’t have a book put together. I did put a new tab across the top with PDF’s of some recent posts though. These are especially for folks who can’t read the images in the originals, because their government is blocking WordPress.

      The one issue I see is that my writing tends to be a little difficult for the average reader. I expect that most of my readers have college degrees or even advanced degrees.

  6. Ann says:

    Gail, I would appreciate your comments on Dimitri Orlov’s most recent analysis:

    http://cluborlov.blogspot.ca/2014/02/how-to-time-collapses.html#more

    • Yes, that is an interesting article. And I can see how the Soviet Union collapsed quickly, after oil prices were depressed and it had no one to tax because it owned everything.

      I am not sure if we can really calculate how long it will take other countries to collapse based on their wealth (and I don’t think Dmitry is exactly saying this). I think a lot of the ability not to collapse is tied to precisely how the financial system is held together. Right now, Italy is part of the EU, and indirectly getting support from the EU. If it had been on its own, I expect it would have collapsed.

      The US has several things going on:
      1. Lots of derivatives in banks
      2. Its “Quantitative Easing,” and hopes to stop QE
      3. The US dollar’s reserve currency status.
      4. A government not able to fully fund itself with tax revenue

      Any of the above situations could blow up, causing a problem. Too many things are stretched too thinly. The US doesn’t have anyone to bail us out. US oil consumption is already on the way down, so we are already on the slippery slope to collapse. I am not sure how badly blow-ups such as those listed above would affect the financial system, and exactly how many months would be involved before there would be a big change. It seems like the the government could limit bank account withdrawals very quickly.

      Dmitry talks about high oil prices being a problem rather than low, this time around. I would agree, if you categorize today’s oil prices as “high”. They are still high for consumers, even as they are too low for producers. These low prices for producers are adding to the concern going forward. We have collapsing oil exporting countries and former oil exporting countries. In addition, we have major companies like Statoil cutting back on production, because they are losing money at today’s prices.

      • when people have no assets, they can’t be taxed anymore—I hadn’t thought of it like that
        Then I moved to the next thought -stage, that of taxing human energy—of course!
        Prior to the industrial revolution, which created property for the majority, able bodied men were obliged to work a portion of their time for the lord of the manor or the church–or both

        • edpell says:

          I have been mentioning this, force the unemployed 18-45 to work for the government. As a desperate move to continue BAU.

          • Chris R says:

            Question is, what could they do that is actually constructive and doesn’t compete with capitalism (private industry)?

        • xabier says:

          End

          Yes, Labour is the only asset of the poor man. Well, better to have people at least working and fed than sitting on their backsides and starving.

          Today, people labour for the banks and bureaucrats, and for the parasites who home in on the elderly and sick (carers and doctors and pharmaceutical companies -parasites because they over-charge); yesterday, for the lord of the manor and the Church – and the difference?

          Mobility, of course, as the serf was tied to the land, a literal property of the lord of that land.

          But mobility is, for most today, more theoretical than real. Likewise with employment contracts: there is no compulsion, but very few are in a position to dictate terms to employers.( I know people in the City of London who have done so -in consequence, they were actually very eager to be sacked in 2009 as their pay-offs were so substantial. One in particular made millions from this. ) The rest of us can only dream of such employment terms.

          Taxing assets can only go so far, too. Monti’s ‘technocratic’ government totally wrecked the property market in Italy through imposing new taxes. As the taxes rise, the value and desirability of the asset diminishes. Politicians have trouble understanding this. As poverty spreads, assets might retain a theoretical value, while being unsaleable – as in Spain, parts of France, Italy, Portugal, Greece, now. Taxing people on that theoretical property value, as if it were income (a common practice) the State will push people into destitution – we will see much more of this.

          Blowing the property value bubble temporarily benefits the State and the parasitic professions as they can take their slice of the inflated property value, all can cream off their share in sales taxes, death taxes and care fees.

          I’d rather be a well-off serf in 1250. Dreaming of escape to the big city, of course!

      • Ann says:

        Thank you for your thoughts on Dimitry Orlov’s post. I wondered about the “high” oil prices. This is the problem that Stoneleigh of “The Automatic Earth” has pointed out many times. Prices can be too high for people to afford, and yet too low to generate profits, both at the same time. A recipe for disaster.

  7. dolph says:

    Isn’t it kind of surreal, the world civilization just keeps on ticking along, winter olympics opening ceremony, as if nothing is wrong.

    The system can’t be reformed. Don’t try to do it, this thing just has to hum along and eventually burn itself out.

    Drop out of everything that you can and pick a few things that you are interested in, that you want to preserve. That’s all you can do.

  8. Pingback: Limits to Growth–At our doorstep, but not recognized | The Scavenger Economy

  9. Paul says:

    Another brush fire…. again related to economic issues — which are a result of high energy costs

    http://www.theguardian.com/world/2014/feb/07/bosnia-herzegovina-wave-violent-protests

  10. Christian says:

    Hey, do you know the chinese saying that goes “A problem without solution is no longer a problem”? This way, limits to growth, peak oil, high tech issues, debt and bank ending and so forth are not “problems”: they’re facts. Problems involve choice and tasks, and I agree with whom has outlined the only problem we could have now is a political one. May be last december’s Transatlantic energy security dialogue is a sign. Would at the last moment politicians do react, would the military or nobody do it, we will see.

    • Actually they’re predicaments. Problems can be solved for the better, predicaments can’t be solved, they can be managed, but they certainly can’t be solved.

      I believe we face the mother of predicaments all converging at the same time. I also believe this is why Obama was voted in (twice) and it’s unlikely we’ll ever see Rupublicans voted again unless the politicians dare to tell the truth. We need oil and we’re running out fast, we need your permission to use the military to secure it again and again and again or it’s all over. Obama is simply managing the decline of America as best he can good or bad. Republicans wish to bring it back to its former glory based on endless growth and the only way they can do it is with the military as we’ve seen the last decade or so. Fools hope on all accounts given the predicaments.

      All forms of politics will eventually be overrun I believe by Marshal Law. I think numerous executive orders have been passed gearing up for a selected council of Imperial/Federal Governors to take control of all States with military in tow. I think with the collapse of the tax base and debts piling high, Federal Govt is frightened of seccession attempts. I also believe America has a growing number of Fusion/Residential facilities all over the nation. Hard to believe but true.

      We’re seeing the impacts in the Western world of all the chaos. Scotland this year will vote to secede. The mere allowance of this referendum means bye bye UK. They’re finished. The Catalans in Spain are another example. I think the physics behind what’s happening is called “entropy”. Makes sense. Globalization is the oppostite of entropy. Entropy is the break down of nation states into smaller self managed communities as huge expensive governments miles away collapse in size, strength and therefore significance.

      Look at the recent floods in the UK more recently, goverment simply ignored the threats warned about by scientists. Simply left the tax payers and farmers on the Somerset Levels to their fate. I think those people now will be incredibly hostile and angry towards Westminster. Unbelievable when you think of the coming Food Security issues coming down the line. Rather the politicians made the problems worse, by denying climate change warnings/floods and by allowing the building of homes on known floodplains. Talk about crazy!

      Now imagine a government that tries to tax entire people’s out of existence.

      • momist says:

        “Look at the recent floods in the UK more recently, goverment simply ignored the threats warned about by scientists. Simply left the tax payers and farmers on the Somerset Levels to their fate.”
        And remember that it is not only the Somerset levels. There has been extensive storm damage to many, many coastal communities, drowning of fresh water meadows and marshes in salt water, and the degradation of large tracts of farmland by both fresh water and salt water inundation which will need huge effort/investment to recoup. Where will the investment come from, especially when the tipping point becomes obvious?

        • whether its hurricane sandy hitting NYC, or the UK getting washed away, the bottom line is finding sufficient energy to fund defence systems,
          We are trying to armwrestle nature, and nature never loses.
          Our access to defence-energy is limited, whereas natures access to energy is unlimited,
          We are learning very quickly that whatever nature knocks down eventually stays down

      • When resources get short, for any reason, there is a problem. Governments in particular end up with a shortfall in resources, right at the time help from the government is needed most.

  11. Pingback: marcellesi, navarro, turiel y los límites del crecimiento | tratar de comprender, tratar de ayudar

  12. Jarle B says:

    Norwegian oil company Statoil lost money in 2013, has to borrow to pay dividends and announces major investment cut over the next years:

    http://www.aftenbladet.no/energi/aenergy/Statoil-cuts-NOK-30-billion-3350992.html

    http://www.aftenbladet.no/energi/aenergy/Statoil-has-to-borrow-to-pay-dividends-3350483.html

    • Thanks for the links. I know Rune Likvern, formerly of The Oil Drum, has been following stories in Norwegian about the situation at Statoil and been concerned.

  13. Ikonoclast says:

    Question for Gail or anyone who cares to answer. When do you expect Martial Law to be declared in the USA?

    • at the moment, a minority in the USA and other ‘developed’ nations are in a state of acute poverty, badly fed and housed, jobless etc.
      when we pass the tipping point, where that group becomes the majority, martial law will have to be declared

      • T. G. Neason says:

        How to Establish a Dictatorship
        November 10, 2013

        Recently, a caller to the local radio talk show (Let’s Talk About It) posed the question, “How would you go about setting up a dictatorship?” There was little or no follow-up to the question but I was motivated to give some thought to the question and this short essay is a summary of my thoughts. As I wrote to the then young men on this list as far back as October 2007, I expect declining petroleum availability, economic collapse, and societal decay to result in either anarchy or establishment of a dictatorship. Since I believe one of these options is inevitable, the question for me is which option is most likely and what indicators should I watch that would give me greater insight as our present economic collapse progresses. I believe that if we read the trail signs correctly, we may avoid an ambush!

        Steps that I would take to establish a dictatorship:

        1. Establish legislation that authorizes far-reaching emergency action. Take over legally rather than by staging a putsch.
        2. Make as many citizens as possible dependent on the government for daily necessities.
        3. Establish a domestic Federal police force.
        4. Establish an intelligence capability that would provide real time visibility of all electronic communication, commercial/financial transactions, and the physical location of a large portion of the population. This system would have massive archival capability so that past activities of individuals and groups could be recreated.
        5. Disarm the population.
        6. Take control of the education system.

        After developing the above list of actions, I pondered the difficulty of implementation. Is it possible that any of these things could be done with in a stable constitutional democracy? This line of thought led me to the following:

        1. Establish legislation that authorizes far-reaching emergency action.
        On March 16, 2012 the White House released an Executive Order titled ‘National Defense Resources Preparedness’. This executive Order is an update of a similar order that has existed since 1950.

        This order can be found at http://www.whitehouse.gov/the-press-office/2012/03/16/executive-order-national-defense-resources-preparedness

        In case of a national emergency all cabinet secretaries are placed under the direction of the Director of Homeland Defense. The cabinet secretaries are given authorization to take control of personal property and personal labor. For example, if you are an independent long haul truck owner/operator and the Secretary of Transportation determines that you and your truck are needed in Dallas Texas, you must comply under the law.

        2. Make as many citizens as possible dependent on the government for daily necessities.
        There are currently about 50 million people on the SNAP program. I recently read an article that concluded that 51% of the households receive a government check each month. In 2013, the Federal Budget was distributed as follows: Social Security/Pensions 22%, Medicare/Medicaid 22%, Welfare 12%, Defense 24%, Other 20%. This shows that 56% of the Federal Budget consists of transfer payments to the people. I am confident that many people will not eat if they fail to get that check on the day expected. During the recent debate over increasing the debt limit the President warned that if the limit was not raised Social Security checks would be in jeopardy. “He that giveth can taketh”!

        3. Establish a domestic federal police force.
        Homeland Defense has established a domestic police force. They have purchased millions of rounds of ammunition. I assume that they have the weapons in which to use the ammunition. Homeland defense is providing large amounts of military style equipment to local law enforcement agencies. I do not have a documented source but I believe that they are also providing financial support and training for local law enforcement. In a national emergency I would expect Homeland Defense to expect support from local law enforcement in return for past favors and future good relationships. He who has the gold, rules!

        4. Establish an intelligence capability that would provide real time visibility of all electronic communication, commercial/financial transactions, and the physical location of a large portion of the population. I would want this system to have massive archival capability so that past activities of individuals and group could be recreated.
        NSA! NSA! NSA! …

        5. Disarm the population.
        The President recently signed a UN treaty that takes precedence over the Second Amendment. All it takes is a Diane Finestien type Senate to ratify the treaty making it the law of the land. Numerous states have recently passed onerous gun control legislation. A number of gun control organizations are well funded by the likes of Michael Bloomberg and their stated goal is elimination of private gun ownership.

        6. Take control of the education system.
        The Federal Department of Education budget for 2013 was $72billion. Expenditures of this magnitude and programs such as ‘No Child Left Behind’ and ‘Common Core Curriculum’ erode local control of the education system and provide a tool for the government to form attitudes that are sympathetic to increased governmental control.

        Conclusion:

        In my opinion, only two things are required to establish a dictatorship in the United States tomorrow morning. They are:
        1. A national emergency such as disabling of the east or west coast electrical system for a week or two by computer hacking or by a solar or nuclear EMP.
        2. The will of a small group of people to “Not let a crisis go to waste”. Rahm Emmanuel, the Presidents former Chief of Staff, expressed this philosophy of governing early in President Obama’s first term.

        Every day the noose of government control becomes just a little bit tighter. We accept and in some cases clamor for more government regulation and control. We allow infringement on the ‘Right to Privacy’, because “We don’t have anything to hide”. We tolerate law enforcement abuse of civil liberties because we want to be secure. Somebody has rightfully observed that “When you give up liberty for security, you soon have neither”.

        I am descended from ‘Scottish Borderers’ and as such I want to starve the beast so that when the collapse comes, I have a fightin chance to remain a free man.

        • Stan says:

          T.G. wrote: “…5. Disarm the population.
          The President recently signed a UN treaty that takes precedence over the Second Amendment. ”

          Urban myth! See http://www.snopes.com/politics/guns/untreaty.asp

          Stan.

        • edpell says:

          Neason, I agree with your statement of the problem. I do not agree that “we accept”. Many people are able to state the problem. I am waiting for someone to state some plausible solutions.

          • T. G. Neason says:

            There are no solutions. Economic collapse is inevitable. Gail has stated very clearly the reasons for the collapse in her posts here and on TOD. The dictatorships will be short lived followed by anarchy. Do I have proof of these assertions? No,definitely not! However, I see no solutions being implemented in North Africa, Middle East, Southern Europe, or the BRICs. Therefore, I conclude that solutions do not exist. Look to the French and Bolshevik revolutions, modern day Egypt, Libya, Syria,Venezuela, and Ukraine for clues to the future and plan and act accordingly.

        • xabier says:

          T.G.

          Borderers: you may hang them, but you can never beat them!

          The establishment of the Hitler dictatorship was, of course, entirely legal. I particularly relish the Hitler quote: ‘ Look how much I am prepared to do for you, my people, taking all these responsibilities onto myself!’

          The USA, indeed much of the developed world, is in a proto-fascist (whether of Left or Right it doesn’t signify) phase: particularly noticeable in the MSM.

          There is now no privacy of communication, and hence no freedom of association, anymore in the ‘democratic’ countries.

          There is nothing at all implausible in your outline. Dictatorship is always but a step away in a crisis-ridden society and the welfare state is a great step towards it – what would change for most people if they are already fed or employed by the State?

    • xabier says:

      The elites can retreat from poor and violent areas, without ever having to declare martial law. Why waste energy on hopeless cases? All major developed countries have examples of this already, I suppose – usually the high immigration, high unemployment areas.

      Is there martial law in the slums of South Africa or South America? No, just no law at all, or sporadically enforced.

      A friend of mine saw a grave in which the poor residents of a zone in the Bolivian capital had buried two thieves who had robbed their church – alive. The police just turned up to register the event.

      Poor people mostly just kill one another, not the rich.

      • nobody told Marie Antoinette that

        • xabier says:

          End

          The execution of Marie Antoinette was a cold-blooded judicial murder, not the result of hunger-riots. The French Revolution was created not by the masses, but by members of elite who wanted power.

      • Danny says:

        “The elites can retreat from poor and violent areas, without ever having to declare martial law. Why waste energy on hopeless cases? All major developed countries have examples of this already, I suppose – usually the high immigration, high unemployment areas. ” That is what they would like to think….where are these “safe” areas going to be? Naive thinking but that is what the rich think…they are untouchable..until they aren’t.

    • I don’t know. I am wondering if governments just get weaker and weaker–lay off workers, and can’t respond to needs or crises.

      • the strength of any legitimate government (as opposed to short term dictatorships) is derived from taxation, which is taken from the overall industrial/commercial activity of the workforce.
        That activity is ultimately derived from input of (cheap) raw energy, even though governments insist it depends on taking in each others washing.
        there’s no cheap energy left, which is why activity has slowed, and taxation is declining.
        The decline will continue, and in so doing basic services as we have come to expect them (schools, hospitals, fire services etc,) will become unaffordable because they are all derived from taxation.
        the last to go will be police and military, because when they go, anarchy starts immediately.
        Every government knows this.
        In basket case countries, the police/militias tend to run their own extortion systems, because they dont get conventional wages

      • xabier says:

        Gail

        That was the message of Rome to Britain when the army left: ‘We can’t do anything for you now, time for self-defence. Good luck.’

        An alternative is that governments cease to contribute much good to society, but the basic structures remain as a means of extracting taxes, fines and to facilitate corruption: see much of the world even today. Still, even a corrupt police force can be better than no police and a free-for-all for criminals (see Argentina recently, when police went on strike and stayed in their bases – immediate looting!)

        So, not really a full-blown collapse in that the structures remain, but not functioning as it once did or is expected to.

        For example, it’s common to see in comments on the internet in the UK: ‘I’ve paid taxes since starting work at 16, but the State offers nothing now when I fall ill or am unemployed!’ After 50 years of heavy contributions in taxes, the indignation is understandable. More of this to come…….

      • edpell says:

        I would say government is already not responding to needs. They have no surplus money and no ideology that motivates them to help citizens. It is only people who are currently on the gravy train that need to fear a government collapse. Since I currently get zero from all levels of government the sooner the better for me.

        • xabier says:

          edpell

          The European situation is slightly different to the USA, in that there is an implicit contract: we pay high taxes, and in return get services and security in a recession or in old age.

          This is now crumbling – but the high taxes remain, so that it is very hard to do anything for yourself unless rich. And then politicians lecture on the virtues of saving ‘and not expecting the state to provide’ – how?! As a system it is losing credibility and viability.

  14. Christian says:

    Intelligence, we’ll see… I’m reading a two years old anthropology book entitled Debt: The First 5,000 Thousand Years, from David Graeber. Very very interesting. We both believe debts will be simply erased almost at once. They will no longer mean anything, they do very little right now. He says he is an anarchist, but points that to keep alive the state must match a market. Of course, as so much markets in human history it needs not to be capitalistic nor have banks.
    Gail, could you manage your think tank to invite him?
    Good reading

    • I have read Graeber’s book, Debt: The first 5,000 years. Clearly, debt is very helpful for many purposes. The part that gets “messed up” in a collapse situation is the “borrowing from the future” part. As long as debt is just “running a tab”, or the way a government imposes taxes on its citizens, it isn’t really a problem. With economic shrinkage, it becomes very difficult to pay back longer-term debts–too many failed companies and too many people out of work.

      • Christian says:

        You are right Gail. We can no more borrow from the future, it’s quite clear in everyday’s life. We must manage installed infrastructure, “existing” fossils, “renewables” and workforce to transition, or even just to last. Big Bankruptcy’s day after the State must issue a new currency, non convertible, and pay it’s employees and subside the rest of the population with it. A lot, may be all companies will go under State ownership, keep working, be rearanged or dismantled. And after this some goods could return to private control, not ownership. Any problem with this?

      • dredmorbius says:

        What keeps debt from simply being discharged?

        Not an idle question. I know we’ve seen debt cancellations (particularly in the case of third world and African debt). There’ve been national defaults (Argentina comes to mind), and as I understand Iceland gave its banks a bath.

        For the US the situation’s different largely on account of scale and role: it’s the largest economy on the planet, and its dollar is the basis for petroleum pricing as well as the global reserve currency. I confess I don’t understand either fully enough to speculate on consequences of a default or large-scale inflation.

  15. Paul says:

    Eclipse Now commented on Limits to Growth–At our doorstep, but not recognized.

    in response to Paul:

    I favour a perpetual energy machine. In fact I am working on one in my backyard now. I have all the gear — one of my good mates is a mechanical engineer who sold his company and retired at 45 so has a lot of time on his hands. He tells me this perpetual energy […]

    Hi Paul,

    I favour peer-reviewed nuclear science that we’ve verified through 30 years of testing. Integral Fast Reactors are *old* physics. But if you want to call Argonne Lab’s EBR2 a perpetual energy machine, then that’s just egg on your face.

    ” It operated as the Integral Fast Reactor prototype. Costing more than US$32 million, it achieved first criticality in 1965 and ran for 30 years. It was designed to produce about 62.5 megawatts of heat and 20 megawatts of electricity, which was achieved in September 1969 and continued for most of its lifetime. Over its lifetime it has generated over two billion kilowatt-hours of electricity, providing a majority of the electricity and also heat to the facilities of the Argonne National Laboratory-West.” http://en.wikipedia.org/wiki/Experimental_Breeder_Reactor_II

    Well Eclipse — as a business person and someone who has dabbled in investing in a few ideas over the years —- you know what I favour?

    Something that has demonstrated it can make money — that can generate a return on investment — that has a chance of doing what the inventor says it should do.

    You know why none of these grand ideas you float remain theories? Because they do NOT work – they will not generate ROI – they are sink holes for capital. They are a waste of money and time.

    Do you honestly think that if someone had something that MIGHT replace oil — that a Silicon Valley Venture Capitalist firm would not be ALL OVER THIS?

    Do you think they do not scour the planet for the next Google — this is a billion times bigger than Google.

    No — no — this is too small for Silicon Valley — the US government surely would be pouring hundreds of billions into this — because what is at stake here is civilization and quite possibly the continuation of life on this planet.

    But nope – everyone is missing the boat — nobody wants to take the easy money and be the first trillionaire it would seem.

  16. timl2k11 says:

    “Now I lay me down to sleep,
    I pray the Lord my soul to keep,
    If I die before I wake,
    I pray the Lord my soul to take.”
    That was a bedtime “Christian” prayer that was nailed to the wall next to my bed. Why do I bring it up? Because religion plays a big role in the predicament we find ourselves in. “God gave us the earth for us to take advantage of”. That is the message of the bible. I think a more rational non-religious, scientific minded species would not end up in the predicament we find ourselves in.

    • while religion has played a big part in getting to our current predicament, it is not the ultimate reason for it.
      religion has just been a convenient justification for everything, just as ‘holy wars’ have been justified wars…when in fact wars have always been about resources, and grabbing somebody else’s on the basis of god’s message,
      the conquistadors were a classic case in point…they were looters carrying crucifixes.
      now the evangelical loonies of whatever faith can point to whatever success they have made, and attribute it to their god, a self perpetuating fallacy that will go on untill there are no resources left to support such nonsense,
      unfortunately we are reaching the stage where god-delusion is all there is left, so the fighting under those beliefs will get more and more intense because there’s nothing else to hold on to. In extremis, even the most sceptical flock to the comfort zone of churches, that has been demonstrated time and again… pray harder and all will be well, if things arent working out it’s because you’re all sinners.

      • xabier says:

        End

        Equally, irrational beliefs – various religions, Nazism, Communism, Maoism, take your pick – have imparted considerable resilience and solidarity to those who partake of them. This can be beneficial in extreme situations. Solidarity is a virtue in itself.

        Extreme rationalism French Revolution) has led to horrors quite as much as religion, but that crazy jumble of beliefs and rituals we know as Roman Catholicism helped the peoples of post-Roman Europe resist enslavement and conquest by Islam……

    • Actually, I don’t think so. Every type of plant and animal in the world uses whatever energy sources are available to it, and with them, expands its population. Humans are no different. And on earth, humans started expanding their population, as soon as they had figured out how to control fire and use its advantage to burn down forests at will and kill off many of the big animal species. The growth of human population has continued world-wide. Admittedly, capitalism and globalization has speeded up growth, but neither of those is really Christian.

      Religions of the world compile a lot of myths and stories that are intended to help pass on values, and appropriate ways of acting, from one generation to another. It is not surprising that Christian beliefs pass on what is effectively the way all species do act, whether we like it our not. The value in religions is that if you can get past things that are being passed on that are no longer relevant, they provide help in figuring out how to have a better life today–“Do unto others as you would have them do unto you.” And an emphasis on forgiveness, and turning the other cheek, if someone says or does something that offends you. They also provide hope for the downtrodden. We may need more hope for the future (even if it isn’t based on an accurate view of things).

      • xabier says:

        Gail

        Very true.

        If we view religions as belief systems which can embody values useful for survival, we can see that they can be – in a sense – vehicles to get us somewhere or through something challenging. And compare them to other political or ‘rational’ belief systems.

        In so far as they can encourage group solidarity, humane values and hope, they can be of great help in a crisis.

        Religions have embodied very high ethical teachings and respect for the Earth. The Zoroastrian religion of Ancient Persia taught the value of the land, the sacredness of trees and the dignity of the peasant farmer. It taught the nobility to be brave, loyal, and to die rather than lie, and also that harsh punishments should not be immediately imposed,but that only after all possible attempts had been made to reform them should someone be executed. The religion of the Australian tribes embodied respect for the land and its flora and fauna. And so on.

        The Nazi doctors who conducted terrible experiments on the living – they were ‘pure rationalists’, just gathering data. Soviet Communism, atheist and ‘rational’ in one sense sustained the community, and in another behaved with unrestrained cruelty and savagery to those defined as ‘traitors’ and ‘dissidents’ killing far more than any of the old religions ever did when persecuting heretics, and leaving Russians with a very perverted ethical legacy. ‘New World, New Morality’ was the slogan of the revolutionaries of the 20th century, both Nazis and Communists.

        • T. G. Neason says:

          I am 80 years old but my plans assume that I will still be here when the collapse comes. If not, my family is prepared to carry on. If I am here, I will work with the local Christian Church, the Grange and any other local agency that has something to contribute to the welfare of the valley. Several years ago our valley experienced a flash flood resulting in water to the ceiling of many houses and eight inches of silt on the floors.

          My family was spared so we took leadership roles in reconstruction activities. My job was to coordinate volunteer efforts for five months. Walls and insulation had to be stripped from the houses, interiors dried, and then rebuilt. Every Wednesday evening we had a community meeting where I received work requirements from each home owner. Thursday morning, I transmitted requirement (numbers and skills) to Christian Churches that had volunteered to help in the reconstruction.

          Many of those Church organized work parties that came every week for five months. The local Mennonite community hosted members of their Church from all over the US who came daily to rebuild.

          They did not try to convert anyone and when they showed up, I did not ask about the ‘age of the earth’ or evolution. Instead, if they were new, I asked about their skills. Some groups would ask me to pray for their activities of the day. I would do so and send them to the proper work site.

          My point in telling this story is that I have had good experience with Christians when there is a need. Of course, I know some who claim to be Christians that would ‘steal the nickels off a dead man’s eyes‘!

          • xabier says:

            T.G.

            Good to read of such things.

            Take people as you find them is always the best rule, whatever they profess to be.

            Quite a few people seem to be afraid, even obsessed with the idea that ‘god-botherers’ will come to the fore in crises: they may indeed find that such people are the first to help.

            I’ve met many Left-wing, atheist, internationalists in Europe who are always banging on about ‘the people’ and filled with hatred of the Church, but I’ve noticed they always take care to line their own pockets well and are rather slow to make any personal sacrifices.

            Judge them by their deeds.

  17. Paul says:

    Ukraine implements capital controls

    http://www.businessweek.com/news/2014-02-06/ukraine-imposes-capital-controls-as-president-leaves-for-sochi

    Another step closer to the edge…. I think this is the formula we will see imposed increasingly as the situation becomes more dire

  18. Tim Olsen says:

    Okay, it get the limits to growth part. But I don’t follow the logic that says therefore collapse. Could there possibly be a path of stasis, mild malaise, driving a structural shift to a no-growth economic theory, kicking and screaming a bit along the way? The author seems to propose her own model, and offer up some harsh recommendations; it would be nice to spell them out.

    • timl2k11 says:

      Read some of her other posts.

    • The issue of diminishing returns has been well studied. The shape of the curve is the Production Function in economics.

      Production function from economics

      If researchers such as Peter Turcin and Sergey Nefedov look at actual shape of decline in past civilizations that encountered collapse, they get a virtually identical curve, with the same three phases.

      The Peak Oil movement has postulated a different shaped curve, based on a mis-understanding of what Hubbert said. Hubbert said another energy source would take over first.

      Hubbert curve, showing nuclear taking over first

      In fact, Hubbert even talked about electricity from nuclear being so cheap that it would be possible to reverse combustion –make liquid fuel from carbon dioxide and water.

    • dredmorbius says:

      The general problem is overshoot. Statis might have been possible if humans had stopped increasing their population at ~500 million – 2 billion or so (1600 – 1920 roughly). At present levels of population and per-capita resource consumption, sustainability is highly unlikely.

      As I like to put it: big (population), rich (per-capita resource use), or long (sustainability). Pick any two.

      We’ve got the options of high population and per-capita resource use, but short duration; high population and sustainability, but low personal wealth; or sustainability and high wealth, but low population.

      I’d prefer the 3rd. I suspect we’re headed toward the 2nd.

  19. What growth?
    You mean the growth they have proclaimed on CNBC ever since they first went on air?
    We haven’t had growth since the Great War, not when using real accounting.
    Sheep repeating what they have heard on TV. Using up your capital stock is not ‘Growth’.

  20. It’s pretty clear to me from many indicators in Turchin’s “Secular Cycles” and “War & Peace & War” that we are on the cusp of collapse and depression based on the patterns of other nations throughout history. I recently wrote a book review of these books at energyskeptic :
    http://energyskeptic.com/2014/book-review-secular-cycles-and-war-peace-war/

  21. Mercury says:

    All the solutions advocated by the optimistic to prop up the system fail to consider that continued consumption of resources necessary to keep it afloat will just make matters worse than they already are. Why, we wouldn’t have even arrived at this dangerous situation, if not for all the “solutions” brought to bear by previous generations of the same-said optimists However humans, being what they are, I’m convinced that we will continue to “innovate” our way into oblivion.

    • InAlaska says:

      Perhaps Nature’s experiment with “intelligence” will end up being a grand failure. Intelligent beings end up bashing their world into climate instability and then extinction. Good try, though.

    • sponia says:

      This has occurred to me also. In 1904, a German chemical engineer discovered a way to capture and fix nitrogen from the atmosphere and manufacture ammonia from it – which was then made into fertilizer, and bombs. In 1918 he was awarded the Nobel Prize for his invention of a way to ‘make bread from the air’. Perhaps, if we had made more bombs back then, and fewer human beings with the extra food – well, we will never know now,

      The ‘Green Revolution’ in the 1940’s – the development of plants and farming methods that took full advantage of Fritz’s discovery by the Rockefeller Foundation on formerly subsistence farms in Mexico was hailed, back then, as the solution to all of our problems. In fact it enabled the massive population growth that is making the ecosystem so top heavy with humans right now.

      The resulting paradigm developed into one that always challenges limits, that sees them as something to be conquered and overcome. Never again have we successfully tamed our own nature, and learned to fit into the existing natural world. This became instead an ‘un-modern’ way of thinking and treated with disdain; the fruits of that paradigm shift are now ripe for harvest.

      Bon appetite!

      • Paul says:

        You hit the nail on the head – when we started to farm using finite inputs — and exponentially increased food production — we signed the death warrants for billions.

        We needed to accept the limits of the planet decades ago. Now we will pay the price

  22. Pingback: Gail Tverberg: Collapse has started, how did we miss seeing that? | Peak Energy & Resources, Climate Change, and the Preservation of Knowledge

  23. Eduardo Martinez says:

    Hi Gail. I’m going to make a an unpopular post. Sorry in advance. I thought your article was very confusing. Could you limit your scope, please. I rather read a detailed discussion on one or two items at a time rather than the scatter gun aproach that you adopted in this article. Limits to Growth was a book of beautifully constructed logic. It set high standards. Assumptions, evidence, analysis, real life examples please.

    • Harry says:

      Eduardo, the very nature of the subject matter necessitates multiple strands. Gail does a remarkable job of making this comprehensible to the layman IMO.

    • Peter S says:

      The problem we are facing is a multi-disciplinary situation. Most people don’t know about it, don’t accept it or don’t want to accept it because they only see one or two pieces. We don’t live in a micro world, we have this serious problem because we live in a globalized world. Everything depends on everything else. We can’t just look at one part.

  24. timl2k11 says:

    I think the first problem will not be collapse, but panic. (although maybe I’m making an artificial distinction, perhaps the panic goes hand in hand with the collapse).

    • Perhaps. We can look around the world and see what is happening now. Some places are already collapsing. I expect even when areas are collapsing, most people will not recognize it as such.They will just think it is a fight between religious groups, or a political battle. There will only a small percentage who get the connection with what is really happening.

      • timl2k11 says:

        I’m in the latter category, but there is nothing, as far as I can see, that I can do about it. I do not own my own land, nor do I have the means to acquire any. I don’t have any friends in any meaningful sense, perhaps a deficit of my character, or just a matter of circumstance, I don’t know. No one I know personally is intelligent enough to understand what is going on, so I guess I am left to sit back, alone, and watch how things unfold.

        • Paul says:

          Idea! If there were a signal that the collapse was imminent — hire a large sailboat — fill it up with 6 months of food and water — then head out — wait for the die-off to occur — then make land and perhaps have a chance of surviving….

          Probably not as ridiculous as it sounds.

          • timl2k11 says:

            Not ridiculous at all. If one has the means, take a Ham radio and lots of supplies and head off in a sailboat for as long as possible and necessary.

          • Peter S says:

            That’s assuming it could be “only” 6 months. That sounds like another movie or TV series. This thing could (and in my humble opinion I think it will) go on for a long time. Overnight collapse may happen, but right now it seems to be some idea we picked up from the movies: short, neat and convenient.

            • Paul says:

              Peter — how much food do you have in your home — how long do you think you could last without a grocery store?

              Do you think most people are in any better shape than you? Most will last a month or so at best. Few will be able to survive six months

            • I am afraid collapse will go on for quite a while. The chart I showed last week didn’t show a complete drop off.

          • Peter S says:

            Although if that’s a plan, then why the sea? The wilderness is much more feasible. I can’t imagine many masses of people a) being strong enough to travel there, or b) being physically or mentally able to survive there. Even if we prepared for that (and I’m considering it as one of the possibilities), it would be the hardest challenge we’ve ever faced. We might not survive, so I can’t imagine all the McDonalds crowd doing any better.

          • Peter S says:

            Paul
            I don’t know what the food in my house has to do with your original post (heading out to sea). Firstly, it’s not even my house. And food storage doesn’t count for much, sooner or later you have to start finding more.
            And as for how long I think I could last without a grocery store… I don’t understand the point you’re making with that either. I haven’t claimed to be able to “last” any length of time without a grocery story.

            It’s not prudent to start guessing what’s going to happen, because it’s impossible to know. There are too many possibilities.

          • Stan says:

            Paul wrote: ” …hire a large sailboat — fill it up with 6 months of food and water — then head out — wait for the die-off to occur — ” Don’t forget to factor in Murphy’s Law. Google “Gilligan’s Island” for more.

            😉

            Stan.

            Probably not as ridiculous as it sounds.
            Reply

        • xabier says:

          Tim

          Arab proverb: ‘The only real friend is the one who’ll help, no questions asked, when you turn up at their door with a corpse and ask them to help you in its disposal.’ (!)

          Join the Mafia?

        • Men seem to have a harder time making friends than women. In fact, women are often the social secretary for the family. Look around for some charitable groups you could volunteer to help. Or find a group with some similar interest to yours.

          • indigoboy says:

            You are right, in that women are far more social and make friends easier. The converse of that is that I have several female friends, who can be ‘silent’ for weeks on end, until they phone to tell me something or other has broke and needs to be fixed, or replaced. You just have to laugh at ALL of our human failings sometimes?

          • sponia says:

            I have noticed, friendly women look in the eyes of the person they’re speaking to. Friendly men don’t face each other, and speak out the side of their mouth. That’s because men meet on the battle line, when the one in front is your enemy, and has to be faced ‘head on’; while your friend stands by your side to face them with you. Women hold babies and raise children, and speak directly to them to soothe, distract, or educate them.

            I have observed this to be generally true; I have a friend who will always turn sideways and look away before he answers. If he ever does not, that means he is raging with anger – which is generally the only way I can tell, with this individual. When he speaks face to face it’s an aggressive or defensive response. When I pointed this out to him, he was unable to change his behavior for more than a few minutes before he reverted to the old ways. While not all men are like this, I have never observed this behavior in a female. They face others directly to speak, always it seems.

        • Peter S says:

          I am an the exact same position. Few friends, none of whom are willing to even discuss the current situation, much less be helpful (and because of this, I can’t be helpful to them). I don’t have resources from my family, and I don’t have any personal resources. Everyone I have tried to discuss this with either flat out denies it’s even a possibility, or tells me it’s too depressing and they want me to stop talking about it. But I am hoping the world holds on for a year and a half, so at least I can move.

  25. Harry says:

    Gail, good stuff as always. I just wondered, what trends have you noticed in terms of ‘hits’ on your site? Is the readership steady or has there been an upward trend? Are more people cottoning on to our predicament? You mentioned the other day that you’ve got a lot of fans in the UK, which is where I am. Do some nations seem more collapse-aware than others?

    • Viewership is up–way up. Last week’s article “An Energy Forecast” has had high readership all week, and today’s article will beat last week’s first-day readership by 30% or more. There are a lot of sites copying my articles, both in English and other languages. Zerohedge is one that copied last weeks, and shows 20,800 “views.”

      The people that read my posts tend to be from places where English is spoken–US, Canada, UK, some of Europe, Australia, some in India. China blocks the images but not the posts (because they have wordpress in the link name).

      • momist says:

        I’m not sure of the technology that records your readership, but last week’s post and this one are the only ones I have repeatedly re-visited at intervals to read the comment stream. I suspect I’m one of many being repeat-counted.

        • I don’t know how the counts work either–just that they are up. Both last week’s and this week’s articles are on Zero Hedge. There have been several folks that put out “tweets” about them.

  26. John Drake says:

    Your following question Gail is an excellent one:

    “The question is: when do we reach the point that oil supply is growing too slowly to produce the level of economic growth needed to keep our current debt system from crashing?”

    Although it is not an easy question to answer with any degree of precision, I suspect that we may not be very far from a crashing threshold, which might however blow-up the globalized financial system without taking down all the existing regional frameworks at the same time…

    In that regard, is ti conceivable that some countries or regions would continue to be able to sustain for some time a high tech society by imposing some type of “war rationing system” that would also somehow confiscate a significant part of existing “savings-debt” for the official purpose of sustaining a “crash war-type effort”?

    More importantly for the long term, is it possible to implement a Plan B that would somehow quickly and “peacefullly” (without widespread destruction of existing physical assets) streamline human society in such a way that it could safely preserve or mothball all its existing nuclear fission assets while being able to stretch the remaining fossil fuel reserves and existing renewable energy resources (such as hydroelecric) until commercial high EROEI fusion energy becomes available ?

    • JP H says:

      “until commercial high EROEI fusion energy becomes available ?” It never will for the reasons Gail discusses above.

    • We’ve been ten years away from commercial fusion since before I was born and we’ll probably manage to hold our own until I die of old age, then it’ll slip even further away as we come to grips with just how bad things have become.

      We are going back to the solar maximum of this planet, no two ways about it, and there will be a lot less of us around when we stabilize population wise. Nuclear is not a solution, at least not as we currently render it, and even if we did solve for electricity availability we’ve hit the wall with climate and debt.

      • Paul says:

        Fusion is much like warp speed engines in Star Trek — a very interesting idea — but they are both fictions.

    • I think the countries that might do well for longer are the countries that don’t use much oil in their energy mix. These are slightly less affected. These would include Southeast Asia countries and perhaps some elsewhere–Africa for example. Countries need to have a good supply of hydro and coal. But supply chains will bring everyone down, eventually. I am not sure that a war rationing system would really make a difference. The issue is keeping the financial system going and the government still functioning without collapsing.

      I wouldn’t hold my breath with respect to fusion getting us anywhere.There is too much development and building required. Also, conversion of oil to electric. We don’t have the time or the capital. It takes more than high EROEI–it takes debt and capital as well.

    • Paul says:

      If we cannot make it work now — we are most certainly not going to make an alternative energy source like fusion work when we are collapsing

      There are no half measures in terms of collapse — when growth stops finance stops — and any oil that is in the ground will remain there because there investment in taking it out of the ground will stop – because there nobody can pay for it.

      There will be no R&D into sophisticated energy systems – the scientists who might continue this work will be in the same dire circumstances as the rest of us – trying to feed themselves and their families – they will not be in labs trying to work out how to make fusion work.

  27. Pingback: Limits to Growth–At our doorstep, but not recognized | PRACTICAL TACTICAL

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  30. sunweb says:

    I lived off the grid for 30 years. At no time was I disconnected from the fossil fuel supply system. I know you would like to believe “renewables” can maintain some form of “business as usual” but this is an emotional and probably financial investment that needs to look at the total system. I don’t believe you will honestly look at the proposed websites.

    How do you get the copper for all the windings of motors? Or the aluminum for the frames. Or the buildings for manufacturing. Or the transportation of the materials.
    Solar and wind energy capturing devices as well as nuclear are not alternative energy sources. They are extensions of the fossil fuel supply system. There is an illusion of looking at the trees and not the forest in the “Renewable” energy world. Not seeing the systems, machineries, fossil fuel uses and environmental degradation that create the devices to capture the sun, wind and biofuels allows myopia and false claims of renewable, clean, green and sustainable.

    There is a massive infrastructure of mining, processing, manufacturing, fabricating, installation, transportation and the associated environmental assaults. Each of these processes and machines may only add a miniscule amount of energy to the final component of solar or wind devices yet the devices cannot arise without them. There would be no devices with out this infrastructure.

    How else would we do it? There is always the old way. Who of us will go down in the mine first?
    A story in pictures and diagrams:
    From Machines making machines making machines
    http://sunweber.blogspot.com/2011/12/machines-making-machines-making.html
    or
    http://sunweber.blogspot.com/2013/10/a-small-fan.html
    or
    http://sunweber.blogspot.com/2011/10/to-make-light-bulb.html

    There is a work that proposes on paper that” renewables” can replace fossil fuel by 2030. They propose for huge windgenerators for 50% of the energy by producing 24 of producing, transporting and installing 24 of these machines every hour 24/7 for 18 years. Claiming we do it with cars. Great, just shift from wrecking the earth with car manufacture to wind and solar. http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030

    • TheGhung Fu says:

      @sunweb: who is “you” in your comment? (“I know you would like to believe “renewables” can maintain some form of “business as usual” but this is an emotional and probably financial investment…”)

      Just askin’.

    • TheGhung Fu says:

      @sunweb,, again: I’m not sure what your point is, but if you are suggesting that attempting some sort of softer landing, rather than wallowing in hopelessness and despair, is a fool’s game, your suggestion will be ignored, at least by me. While you were living off grid for the last 30 years, some of us were fully involved in the complex systems that we are both apparently convinced will fail in either a spectacular fashion or a lesser process of decline. Some off us also haven’t deluded ourselves into thinking that BAU can continue indefinitely in any sense. It never has.

      Having spent most of my life as a multidisciplinary systems analyst, I think I have a pretty good handle on the ramifications of this issue. I’ve also been in parts of the world where and when things came apart in violent and unexpected ways. Someone always comes out the other side. Assuming this time will be different is pointless.

      I’ve read your links with interest and found them useful, to a point. My game is, and always has been, it’s better to have tried and failed than not to have tried anything at all. I suggest folks who don’t agree should spend their time over at Nature Bats Last. Meanwhile I’ll continue to pursue whatever ideas stand a chance of offering something other than rolling over and giving up. I’ve always considered renewables as little more than a bridge to a far less complex, much more local way of living. At least they may offer a little more time to watch this mess unfold from the cheap seats. Consider it a hobby. No skin off your back, right? And my childrens’ children may thank me someday, if only posthumously. Meanwhile, I’m having fun with this.

      • sunweb says:

        TheGhung Fu – sorry slow to get back to you. I live on a lake with a 3kWh grid-tie system, greenhouse and small garden. Ten miles from here we have a farm of 40 acres. You can see our work at the sites listed below. We grow specialty potatoes to sell and our orchard has some 50 fruit trees and 400 blueberry plants that will be a pick your own business. Our root cellar kept potatoes until July of last summer. We have potatoes, cabbage and carrots still viable in the root cellar now in a verrrrry cold winter. Our greenhouse functions 10 months out of the year. My wells are all the old farm type with cylinders and leathers.
        (see: http://sunweber.blogspot.com/2011/11/onthewaydown-1.html.
        I have a 1956 Ford 860 tractor with 3 point hitch and lots of old farm machinery. We have two lawn type tractors that I did most of the original work with. We have a still should we need the fuel.
        We constantly invest in hand tools.
        I am 70 (almost 71), a 12 year survivor of lung cancer, have 5 stents (the last one done in September – 99% blockage) and have put up the fencing (8 foot to keep deer out) and worked on all the building projects. I am building this for the next generation (my partner has children and grandchildren) trying to design a system with good materials that will give them a jump start. At the lake we have an annual picnic for our neighbors (8 years now) and will start this year at the farm.
        All technological suggestions must weight the natural resources – extraction, refining, fabricating, manufacturing, transportation, worker support, maintenance and installation – required.
        What do you need to live a non-brutish life? How about the all the wage slaves supporting our way of live?
        I am now and have always been against nuclear. I don’t think we are wise enough or rational enough to have such power at our finger tips. Fusion, just 10 years away forever, will have its own unintended consequences.

        http://sunweber.blogspot.com/2010/10/summer-of-2010.html

        http://sunweber.blogspot.com/2012/11/hothouse-update_2431.html

        http://sunweber.blogspot.com/2013/09/our-potatoes.html

        http://sunweber.blogspot.com/2013/12/aerial-shots-of-farm-and-home.html

        http://sunweber.blogspot.com/2010/09/regional-magazine-article.html
        We can agree to disagree about nuclear and fission. For true if possible sustainability:
        http://sunweber.blogspot.com/2011/05/new-middle-ages.html
        but:There are five natural factors that determine and will continue to determine our history and future.
        * All life reproduces to the maximum their environment allows(population density).
        * All life will use all the resources in its environment to promote its present living (population pressure).
        * Much of life manifest an us against them protectionism (even plants release poisons to the soil to protect their territory. This is the convergence of territoriality (which is manifest by all life) and the need to belong for this dependently social animal called human.
        * We are immersed in an environment of our own making and our “brilliance” threatens us with unintended consequences (whether agriculture or nuclear power).
        * Groups larger than the small group of 30 to 200 people, which is the social environment in which we evolved for a million years, creates power-over and inequality.
        These five factors are a natural part of life and being human. For more detailed exposition:
        http://sunweber.blogspot.com/2011/05/we-are-here.html

      • InAlaska says:

        Hear! Hear! At last someone willing to do something rather than just rolling over in a mire of despair!

    • I am not sure if this comment is meant for me or for other readers. If it is meant for me, you should note that I am not a big fan of wind or solar PV either. See my post <a href="http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/Ten reasons intermittent renewables (wind and solar PV) are a problem.

  31. Jamesneo says:

    You should not ignore the 2004 edition of limits to growth. Even though they do not have an explicit financial parameter or include debt, it is implicitly included in the ‘ability to cope’ represented by the industrial output parameter. Yes, debt is a huge Damascus sword hanging on our heads but it is only one part of the problem. It is only with the accumulation of all problems together that the world will be unable to cope. This suggests that the collapse will be a slow collapse which is happening in fits only in the fringe now. During this staircase collapse, what happens is that governments will try to preserve the power and achieve stability by fleecing the whole population slowly from the poor to the middle class and only when they finally reach the rich will the final collapse occur. A recent post by Dimitri Orlov suggests this possibility.

    From history, we can see that most dynasties collapse in such a similar manner. Acceleration towards collapse can occur when there are exceptional incidence such as great famine that trigger huge unrest or when there are military invasions. However, even in these cases, it still takes decades for the collapse to reach the final societal collapse. Thus, the 2004 limits to growth is likely correct and the timing of collapse will take place over this century with the first big drop in the 2030-2040s.

    • xabier says:

      Jamesneo

      It’s a case of ‘When does the Collapse begin?’ ‘It’s all around you!’ Bit by bit.

      In Spain last year a survey found that around 30% of Spaniards felt they had fallen from the middle class (of course, status based on debt) to the working class since 2008.

      The rich, although they have some of them taken some hits, are still in many cases richer on paper and doing just fine.

      Meanwhile, the arch-conservative government is busy legislating to provide the means to crush any future violent protests and dissent.

      • Harry says:

        Yes, the residents of Athens or Detroit would make quite a strong case that collapse is already upon us. However, I suspect that there will come a time when the S is almost universally acknowledged to have HTF. It seems likely to me that that this will be in the wake of bank runs and cashpoint malfunctions following a minsky moment in the financial markets. We came within hours of this happening in 2008: http://www.bbc.co.uk/news/uk-politics-24184728

        • Paul says:

          Definitely. We’ve had a lull since the wicked flare up in EU bond prices about a year ago — but as expected more hot spots are emerging — I wonder if the Central Banks will be able to continue to manage this for much longer.

          A simple statement such as the ECB made last year that ‘We will print as much money as is necessary if pushed’ chased away the bond vigilantes there — not sure how we keep places like Venezuela, Argentina etc afloat — I suppose when pushed the Fed would just hose those countries with money as well (in secret)

          I see the Fed being like a firefighter in western Australia during a drought with 40+ temperatures — they are racing around on their truck blasting water at the slightest spark… because if left unhosed — the spark will create a raging out of control inferno

    • I don’t think we have had experience with collapses on as integrated a basis as this, and with this much debt involved. I agree it will take a while, but it has been in the works already since at least 2007 (or perhaps 2002), so we are well into the process. Someone sent me an e-mail suggesting that collapse builds up force like an avalanche. If starts out slowly, and then gains force. It has been building up for a while now. One big failure of the system could cascade throughout.

      • garand555 says:

        The civilian labor force participation rate peaked sometime around 2000-2002 for the US, so you could argue that the collapse started then. Or back when US oil production peaked. People have been working more and more hours just to maintain their lifestyle while going into more and more debt for quite a while. I think a proper postmortem would show that we have been in a state of collapse since well before Lehman Bros.

        The other thing about today’s world is that things happen much faster than they did during the days of the roman empire. I can nearly instantly send a communication to a person in China and I can be almost anywhere on the planet within 24 hours. There is no reason to expect that a collapse will be as long and drawn out as they were in antiquity, and in fact, there is reason to believe that with the speed which events happen in modern times, collapse will happen much faster. There is no need to wait for a person to ride his horse for two weeks for a financial transaction to take place and there is no need for him to take the same two week journey home.

        • edpell says:

          I think this is important. The collapse will not be quick at the start. The start was 1976. We have worked through much of the slow part. In 1976 with a min wage job you could support your self. Today no.

          • InAlaska says:

            You could argue that the collapse started in 1971 when Richard Nixon took the USD off of the gold standard, thus divorcing the dollar from any real intrinsic value. Without real value in our money, our economy began to levitate away from reality as well. Bubbles pop! Collapse.

          • timl2k11 says:

            Or even before that, the political decisions, especially LBJ’s “guns n’ butter” (Vietnam war escalation, “Great Society” initiatives, even the Apollo program) mindset that forced us to abandon the gold standard. Not to say “it’s LBJ’s fault” as there were many excesses in the expansion of government that came before. Eisenhower did a great deal to set us up as a fossil fuel based economy with the creation of the Interstate highway system. The time for conservation was 50 years ago. But if your in a race to world supremacy, conservation might as well be a four letter word.

          • garand555 says:

            A lot of those things (The Great Society, Vietnam, etc…) simply set up the conditions for collapse. I would consider the beginnings of the collapse to be when actual conditions started a steady, not temporary, decline. That makes it a bit fuzzy, because some small things started declining before other major things. While you could argue that it was taking on more debt and working more hours just to keep up, rather than to get ahead, you can also argue that the beginning of the decline in the labor force participation rate is a hard line that you can draw.

            But a lot of this is philosophical and even possibly semantic.

          • Paul says:

            David Stockman (a lot of people don’t like him and say he is a hypocrite but I say it takes a brave man to admit he was wrong so I have the utmost respect for him) states that the descent began when Nixon said ‘I don’t give a **&&^ what the consequences are — I want this economy roaring by election time’

            A great presentation here http://www.youtube.com/watch?v=BhigdkNh7a4

            That might have marked the beginning of the decline of the US but I am not sure if this is energy related.

            Could be that peak oil in the US was causing a decline in growth and Nixon could not tolerate that so started the hamster on the wheel?

            Does anyone have further insights?

            • The nature of the peak is that the growth of oil production slows down before it stops. Because of this, the slowing of oil production would have likely been putting a drag on economic growth, compared to what Nixon was hoping for. GDP growth in 1970 was practically nil. By 1971, US oil production was actually down. In the absence of stimulus of some sort, there likely would have been a problem before election.

        • Paul says:

          Yes I think the collapse started in 2001 — when oil hit $38 from a low of $12 in 98.

          That was when the Fed opened the easy money tap — trying to counter the lost growth.

          Also agree re: speed — the financial system is the key — we saw how quickly the world seized up when Lehman was tossed into the ocean. EVERYTHING stopped — until the Central Banks backstopped the whole mess.

          Comparing this with the collapse of the Roman Empire as some have done is like comparing chickens with men from Mars.

          The Central Banks cannot likely bail this next iteration of the crisis out — when this goes it will be relatively fast — I think that once they lose control we have at best a week or two before there is a realization globally that we are actually hanging in mid air — and we start hurtling to the rocks below.

          One of my concerns is that I will be caught in limbo away from my home on a trip out of the country — and unable to get back — hopefully there will be some putrid whiff of the imminent before it hits

          • Harry says:

            This is a major concern of mine as well. Murphy’s law dictates that the markets will collapse when I’m away on my summer holiday. Like you I hope that there will be enough omens for those with sensitive antennae to pick up.

          • BC says:

            Paul, Harry, Jamesneo, and all, regarding an indicator of a potential collapse, please see the following link at your convenience (not spamming, merely attempting to assist):

            https://www.greedometer.com/2014/02/

            The current US equity market indices are now as bubbly and overvalued as they have ever been, including record margin debt to GDP. I could go on at length to further support the assertions, but I will spare you.

            Suffice it to say, the US stock market is as vulnerable as it as ever been to a large decline, if not another cyclical crash of historic proportions.

            Now with the price of oil back to $101-$110, the risk is rising further for a seasonal or cyclical decline in economic activity hereafter.

      • Jamesneo says:

        Hi Gail, That is what I am saying basically. The societal collapse will not occur within the next two years even when there are collapse slowly occurring all around. The rich or elites will try to preserve and concentrate the wealth and squeeze the poor and middle class for as long as possible. So even if there is another big financial drop bigger than the 2008 one occurring in the next 5 years as you say, the whole system will still be there just that some “arms” or “legs” will become dead. And life will go on with the fringe poor growing bigger but no big civil war or other societal collapse until when all the problems including drought, famine and plague hits and overwhelm the whole system. And we should not assume that just because we are technologically superior we are any different from our ancestors: the timeline will not be faster nor slower than them.
        Let me give you an example from china: from wikipedia: during the 2nd century AD from 136 to 220, minor rebellion occurs in 136 but are quickly quelled. It however set the stage for more agrarian rebellion onwards and in 161 Emperor Huan issued an edict offering minor offices for sale. Corruption intensifies and another agrarian crisis spark one fatal rebellion: Yellow Turban Rebellion in 184. The Han court was successful in quelling this rebellion but it leads to the formation of military leaders and local administrators who gained self-governing powers in the process. This set the stage for the warlords period of china culminating in the formation of the three kingdoms in 220AD.

        If you read the history properly, the eunuchs and emperors are no different from the corporate companies and the president/politician today in the whole world. As the government starts to collapse slowly, centralization of power and wealth become worse but it triggers a decentralization movement in the agrarian revolts and other rebellions. Even then it was able to somewhat preserve its power from 136 until 184 when the yellow turban rebellion lead to the increasing power of military leaders and local administrators. This will likely be the case for many big countries in the world today from USA to China , to the European union to Russia whereby widespread violence will become more dominant from the evolution of small scale rebellions until the fragmentation of the whole country to local warlords. This will likely take place over the whole of this century with the first serious “rebellions” occurring after all energy has peaked in the 2030s onwards.

        • Harry says:

          “The rich or elites will try to preserve and concentrate the wealth and squeeze the poor and middle class for as long as possible.”

          James this has already been happening and we are now in a situation where the richest 85 people in the world have as much wealth as the bottom 3.6 billion. And I don’t believe that the ‘elites’ have the ability to preserve their squeezing once a minsky moment hits the markets. They will be in as much trouble as the rest of us. Using your metaphor, which I think is very apt, of the global economy as a human body, the next financial collapse will be analagous to a heart attack.

          The system works in all of its remarkable if brittle complexity or it barely works at all.

          • sponia says:

            I’m not concerned about the ‘rich’ who have piled up wealth beyond any reasonable need. After all, you can’t eat gold bars. You say they’re holding it in currency? Even more pointless. Currency is the Government’s money. When that institution fails, currency is worthless too. You say they’ve converted it all into land, plows, and guns? They still need people to man the ramparts, y’know. Somebody has to work the fields, or repair the aquaponics, whatever.

            The failures of the existing paradigm are not going to matter, after the crash. What is needed is a replacement for the foolish and short sighted ideas we have used to organize and manage what we have, and how we live. It is the way we define our relationships – to each other, and to the planet – that concerns me. It is probable that old fashioned and already discredited ‘solutions’ will be tried, one more time, by an elite that has run out of ideas. Just look at the rise of the Golden Dawn in Greece.

            Here’s the thing about reactionary political parties; the reason they’re called reactionary is because they don’t think, or plan, or reason. After a catastrophic change they just react. Mindlessly, and ‘without benefit of the thought process.’ Like we in the U.S. did after 9/11.

            It may be too late to make any difference at this point. A complex adaptive system, when pushed too hard, leaves the linear range of operation and becomes mathematically chaotic. And at that point, anything could result. Even total extinction.

            There’s a very old, (in computer years it’s ancient history) very simple computer simulation from the 1970’s called ‘The Game of Life’. It’s algorithm is based on a single parameter – the presence or absence of neighbors. Yet this very simple simulation gives rise to amazing and complex behaviors in a population of ‘living cells’. In some cases, after a long and fruitful string of generations the entire population simply disappears, for no obvious or even apparent reason. Food for thought.

        • I think if banks close, or if serious capital controls are imposed in major countries like the US, things will get different fairly quickly. It may take a while for things to go downhill, but like an avalanche, it will gradually pick up speed, and then go faster and faster.

  32. Setting aside resource depletion, or at least holding it constant for say 5 years or so, it seems to make sense for the fed to keep liquidity up. Consider that without oil we need to work 10x harder to maintain current expectations, again for some limited period. Assuming we would need human energy/ingenuity (working smarter if not harder) to make u-p the difference in oil depletion, there should be no ill effects of QE. Of course the challenge to that assumption is that the liquidity would all flow to more ponzi finance and developments that do nothing to help us step down to the “nest economy” and lower populations to some operational if not temporary “carrying capacity”.

    If it were possible to regulate ponzi, governments could set up programs to guide liquidity into ventures that prepare us for contraction as well as teach us all to be the resource managers we will need to be to sustain locally self-reliant closed loop energy and subsistence economies with some limited trade capacity.

    Big If, I know…Are humans so blinded by present bias that they cannot adapt? That is the global question.

    • I am afraid it is not possible to regulate Ponzi development. I also question whether there is time. But keeping QE going would seem to have somewhat more possibility for the short-term than shutting it down.

      • I suppose we would end up with one type of Corruption exchanged for another. however, The example of the Roosevelt presidency is what I was getting at. Spending money on developing step down state by bypassing the private sector. In todays politics it may not be possible. Or maybe we are just not that desperate yet?

  33. TheGhung Fu says:

    Gail said: “I am not doing a lot of preparation. Doing a lot of preparation would be a full time job, and I am writing posts instead. What little gardening I have done have convinced me that I will never feed my family with gardening.”

    It seems to me you have other useful skills to offer in the right community. I know a guy forming a sub-community of like-minded professionals a couple of hours north of you if you’re interested in that sort of thing. A little upscale for me, but the larger community and environment should be about as viable as any. Good water, a few miles from a large hydro plant, plenty of small-scale agriculture, a tight-knit, diverse community made up of locals and folks like you, even a small tavern nearby; used to be the old country store. One of the latest arrivals is an oil geologist and his family from Houston. Imagine that. Hunker down, baby…

    God help you if you’re still in the “Big A” when this goes down. Time is short, it seems.

    • Email me if you like with details: GailTverberg at comcast dot net. It would need to be a family decision.

      I may be too aware of Liebig’s Law of the Minimum–or maybe Murphy’s Law.

  34. TheGhung Fu says:

    Those who don’t think this collapse can’t unfold quickly may gain some insight here:

    Trade Off: Financial system supply-chain cross contagion – a study in global systemic collapse by David Korowicz Jun 17, 2012

    “Overview

    This study considers the relationship between a global systemic banking, monetary and solvency crisis and its implications for the real-time flow of goods and services in the globalised economy. It outlines how contagion in the financial system could set off semi-autonomous contagion in supply-chains globally, even where buyers and sellers are linked by solvency, sound money and bank intermediation. The cross-contagion between the financial system and trade/production networks is mutually reinforcing.

    It is argued that in order to understand systemic risk in the globalised economy, account must be taken of how growing complexity (interconnectedness, interdependence and the speed of processes), the de-localisation of production and concentration within key pillars of the globalised economy have magnified global vulnerability and opened up the possibility of a rapid and large-scale collapse. ‘Collapse’ in this sense means the irreversible loss of socio-economic complexity which fundamentally transforms the nature of the economy. These crucial issues have not been recognised by policy-makers nor are they reflected in economic thinking or modelling. ”
    http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/

    PDF: http://www.feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf

    This is the “Angel of Economic Death” that will move swiftly through global markets once critical systems begin to fail. Very few of our critical systems source their supply chains and labor locally, even nationally. “Just in time” will be “too darn late” as complex systems require credit, parts and resource/energy inputs.
    All the Kings horses and all the Kings men…….

    • This came up in a logistics group on LinkedIn within the last few weeks. They were talking supply chain protection and I brought up the 2010 Icelandic volcanic eruption. Like the three days of airline grounding after 9/11 and what we learned about contrails, the volcanic dust showed what happens to supply chains when air travel is suddenly interdicted. We have no idea what to do when Fedex doesn’t show up by 10:30.

      • TheGhung Fu says:

        Best to get disconnected from these complex systems as much as one can. Another example was the supply chain disruptions after Fukushima and the tsunami (auto plants shut down; hard drive and computer component shortages for months, etc.. Both of these were localized events. Imagine when it’s global.

    • Yes. Dave Korowicz has done a lot of good work on putting together this analysis.

    • Paul says:

      Yes – I assume that is the same paper as this http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

      It’s all good but the key part if from page 56 onwards — I think that it will play out something like that.

    • Edward Morbius says:

      That’s a great paper, and it got me looking up more of Korowicz’s work. He’s got a number of video presentations you can find on YouTube (or FixYT for those who prefer less tracking).

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  37. SourabhJain says:

    Moreover, I think you hit the nail when describing importance of debt. Without debt, most of our activities will not exist. It will lead to ‘localization’ instead of ‘globalization’.

    • Leo Smith says:

      Astute point. It was access to cheap debt that attracted in the latecomers to the European Union.

      Now there ain’t no cheap debt any more, there’s a lot of talk of leaving. That is re-localisation of a sort.

      But I think the pattern that will emerge is a hybrid. transport costs rising act to localise production and movement of goods. Don’t export iron ore, make iron locally and export that. Don’t export iron and steel. make cars and beams and export those, Etc.

      But global communications are not that energy intensive. They stay cheap. So money, and ideas are truly global.

      Primary energy is not a problem either. The world is awash with fissile and fertile material that is more than enough for any timescale we can envisage.

      The technical problems are secondary energy storage, and scarcity of other resources than energy.

      But the biggest problem of all is political and socio-economic.

      People want to believe in a world expanding and getting richer, which it can’t. They want to believe that central government control is the answer, when it isn’t. They want to believe renewable energy is the answer when it cant be.

      The west is simply trying all of the alternatives before it is forced to face up to the one that actually works. If I wanted to sum up the last decade in one phrase it would be ‘the dawning of reality’ versus a society of grand dreamers. In whose numbers I firmly place the Greener elements of society.

      Greens are great at identifying potential issues, but their solutions suck big time.

      The Roman Empire and what we call civilisation didn’t collapse overnight. It shrank back to its core as the extremities became too expensive to maintain, and those extremities took a little of what Rome had to offer, discarded what didn’t make sense any more, and carried on.

      And so it will be for us.

      We will struggle on with declining populations in declining standards of living, using what we still have, if we have any sense, to build what we will need tomorrow.

      And if we don’t have the sense to do that, we will be back to peasant agriculture in a century and the city folk will all be dead.

      Whatever happened to the Aztecs and the Mayans of Mexico? Empires they had…well they are still there, smiling as they carry your suitcases, serve you a pina colada. Empires come and go, the peasant endures.

      • moraymint says:

        I like your ‘dawning of reality’ coin. I expressed similar thoughts here …

        ‘Energy – Reality Intrudes’: http://tinyurl.com/b4r45sc

      • SourabhJain says:

        I think you are mistaking collapse as “sky is falling” scenario. I agree collapse is not going to be immediate, or for that matter, obvious. According to Joseph Tainter, collapse just means rapid simplification of social complexities. In other words, localization instead of globalization, shrinking of size of governments, military, companies etc. There won’t be much need of global communications.

        But, I refuse to share that increase in local production and export. I think export in general will become expensive. I do not think that local production will increase in similar proportion. You are missing the point. Higher energy costs and absence of debt will make production “unproductive or uneconomical”.

        • SourabhJain says:

          Just another point, despite the fact that those previous civilizations did not have billions of people and industries, they collapsed. Now, we have fossil fuels, billions of people, climate change, dreams, illusions, etc. It is going to be a grand scale collapse.

          We won’t be able to adopt to peasant lifestyle because soil degradation, lack of water, lack of land. Western people will have hard time adopting and adapting to reality. Many people in Asia are already dying of hunger or living in extreme poverty. So, they won’t be affected much.

          Peasant only survived when there were not many people. Now, its global climate change and billions of people. Peasant will also have hard time in surviving.

          • Paul says:

            Exactly.

            I am still waiting for those who think this is going to be a soft landing to explain how we feed 7.2 billion people when we no longer have cheap oil and gas to create the pesticides and fertilizers that grow our crops.

            Anyone want to explain how we overcome that slight problem?

            We could sing koombaya and clap our hands — but that won’t put food on the table.

          • xabier says:

            Agreed: in fact, one of the driving forces of the Industrial and Agricultural Revolution was that the peasant and artisan were finding it hard to survive – resources and commodities were scarce.

            Also the motive for the settlement of the Americas: conquistadors came from poor families from the poorest region of Spain. Life on the land was not working for them very well.

        • Paul says:

          See page 56- 66 here http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

          This goes through what is likely to happen if one of the key global hubs breaks – the EU.

          • Joe Clarkson says:

            Pages 72-75 are a must read also. They lay out the reasons why mitigating the risks of our globalized economy are so difficult.

        • Paul says:

          This ties into Tainter’s complexity theories — the whole paper is excellent — but if you want to get a snapshot of what collapse looks like — start at page 56 and go on for about 10 pages http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

      • Paul says:

        “Global communications are cheap and not energy intensive”

        Not sure where you got that from — but the communications network uses massive amounts of energy – both in building and maintaining the grid it relies on (think undersea cable networks) to building the complex infrastructures (you have to mine the copper for the wires – extract the oil to make the rubber to coat the wires etc etc etc etc etc – all of that takes massive amounts of energy)

        And to keep the whole thing powered up — well that requires astronomical amounts of energy – let’s have a look at just one part of the global communications network – the internet:

        “Ever wonder just how much energy the Internet uses? According to a report by CNN, more power is pumped into the maintenance of the Internet than the auto industry. That means the Internet uses more electricity than the entire auto industry’s production of cars and trucks combined.

        So, what does that prove exactly? Well, let’s put it this way: If the Internet were a country, it would rank fifth in the world for amount of energy consumption and carbon dioxide emission. According to Greenpeace, the Internet consumes more power than Russia. That’s an awful lot of energy when you stop and think about it, and it’s not all coming from renewable sources.”

        Read more at http://planetsave.com/2011/10/27/how-much-energy-does-the-internet-consume/#UserD650KrJEWUiv.99

      • edpell says:

        Leo, well put. 🙂

      • InAlaska says:

        Nice to see you ‘back in the fray,’ Leo. I think you have the right idea. It will be slow painful decline, perhaps made less so by the choices we make now to build the things that we will need later. Build them now while we still have the concentrated sources of capital and expertise to do it. I think the American Empire will end up being the shortest-lived of them all.

      • Paul says:

        Actually membership in the EU continues entitle countries to cheap borrowing… Check out France, Spain and Italy’s respective bond yields – incredibly low considering all are insolvent and their economies are dying.

        That is because the Fed shoveled across 1.5 trillion dollars at the end of 2012 (called LTRO) — so there is an implied backstop for these nations (also the ECB says they will print if push comes to shove)

        In reality though the bonds of many EU countries should be rated as junk – but of course reality went out when governments started to print cash

        • Danny says:

          How was FED able to give 1.5 trillion dollars to Europe? Is that supposed to be payed back? Where can I find more info on this? When I google this it only gives me Central bank LTRO I can’t find where the FED contributed to this…..Not that I disagree I think in the fray I remember reading about this…it just seemed so odd….and MSM did not cover it very much. Danny

          • Paul says:

            LTRO: http://www.zerohedge.com/contributed/ltro-users-manual

            Also recall that Bloomberg went to court to force out the fact that the Fed had sent billions to European banks http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g

            Who knows what other games the Fed is up to trying to keep the hamster running.

            I applaud them in their efforts. I want the hamster to keep running too!

          • Paul says:

            Oh — and if you want good finance news check Zero Hedge — the MSM is littered with lies

            Did you also know that China has stopped buying US treasuries? Difficult to find that rather important story — because it gets buried deep if it’s covered at all.

          • timl2k11 says:

            I do think we all want to “keep the hamster running, but the longer and harder we keep it running the quicker and more severe the collapse. It is far too late for a soft landing so will eke out BAU for as long as possible, which means the most likely collapse scenario is a very sudden and drastic one.

  38. SourabhJain says:

    Hi Gail,
    Excellent post !
    “Other commodities are also trading at flat to lower price levels. The concern is that these lower prices will lead to deflation. With deflation, debt is strongly discouraged because it raises the “inflation adjusted” cost of borrowing. If a deflationary debt cycle is started, there could be a huge drop in debt over a few years. This would be a different way to reach collapse”

    Could you elaborate on this point? I thought higher oil prices will cause hyper-inflation.

    “One common view is that just because oil, or coal, or natural gas seems to be available with current technology, it will in fact be extracted”.

    I fully agree on this point. Just to add my 2 cents, this logic also applies to renewable energy deployment. I mean, without oil, we won’t be able to deploy renewable energy either. The debt cycle or financial system also supports renewable energy. Furthermore, I think we also forget that abrupt changes in oil supply will also affect ‘workers’ of fossil fuel supply chain. This process is not automated yet. So, if something bad happens to say, truck driver or drilling engineer, it will also stop production. This role of human factor is often ignored in the analyses.

    Another way to view it is to divide our capital requirements into three channels: 1) Investment capital (IC) 2) Fixed operation and maintenance (FOM) capital 3) Variable O&M (VOM). So we need IC to expand economy. FOMC to fix/service degradation to existing physical system such as fixing roads, highways. VOMC is required to run existing economy. Currently, FOMC and VOMC are consuming more and more capital. So, we have not enough capital left for new expansion.

    • With respect to the first paragraph, a lot of what we have for spendable income is really debt–debt to buy a car, debt to buy a house. There is also a way we get the benefit of other people’s debt: government debt that allows more government workers to be hired; business debt that allows more factories to built, and thus more employees to be hired.

      Because of this, a cutback in debt leads to a cutback in the ability to buy things. It also leads to a cutback in the ability to hire people. With credit contraction, a likely direction for prices to go is down, rather than up.

      There is also an issue with wages (which are closely tied to debt in the first place). As we extract resources that are more and more difficult to extract, it takes more workers per barrel of oil extracted, or per ton of copper produced. If wages reflect the value to society of a barrel of oil or ton of copper (what it could make), logically, wages should drop as well.

      Furthermore, when we look at what is actually happening, there are more and more folks dropping out of the labor force, for lack of good jobs. There are an awfully lot of folks working at jobs below their level of training. Median wages are not rising–(haven’t looked at the actual numbers lately). People with depressed wages have a hard time bidding up the price of anything.

      Peak oil folks have hypothesized that oil prices will rise, but without money of workers to pay for the oil, it is hard to see how this will happen. Debt defaults and lower debt availability will further lower prices. The reason oil supply will drop is because companies in the business will quit and go home, putting more people out of work.

      Hyperinflation has to do with no one believing a government will really back its money. It isn’t really directly related to higher oil prices, but I suppose it could cause higher oil prices. I think it is just as likely that the government will shut off access to funds people think that they are holding in bank accounts. You can take out $100 week, that is all, for example.

      Your breakdown of Capital into IC, VOMC, and FOMC is helpful. That is a good way of putting it: We don’t have enough IC because we are spending so much on VOMC and FOMC.

  39. Stilgar Wilcox says:

    Gail and posters, Raúl Ilargi Meijer at Stoneleigh’s website, the Automatic Earth; http://www.theautomaticearth.com/debt-rattle-feb-5-2014-bernanke-put-yellen-trap/
    posted an article titled: ‘From the Bernanke Put to the Yellen Trap’

    “What Janet Yellen inherited, and it’s quite possible she hasn’t realized it yet, is the supposedly most powerful institution on the entire planet, that has painted itself into a very tight corner, from which no obvious escape route is in sight. If she opts to continue doling out Bernanke’s liquidity overdoses, she will hollow out America’s economic strength in a fatal way. And if she decides to get up and turn around, she’ll do the same, only more rapidly.”

    Maybe this untenable situation as described above has occurred to others, I don’t know, but it is what I’ve been harping on since QE taper was finally initiated, i.e. the Fed is boxed in. If Yellin blinks and stops taper we’ll know the writing’s on the wall. How long it takes before shtf is all we won’t know. This is a story I think that will get more exposure in the peak oil blogoshpere as the attempt to taper to zero continues while economic pressure mounts worldwide.

    • timl2k11 says:

      Yellen is definitely in a trap. I will be very interested to here her first press conference assuming she has one. I actually think the best thing for her to do might be to stay on the “down-low”. People might not think it so strange, just a different person with a different PR approach.

      • InAlaska says:

        You’re probably right. The best we can hope for is another brief can kicking session to give those of us in the know time to make final preparations. Whatever those might be.

    • InAlaska says:

      Helicopter Ben got out just in time, leaving hapless Janet holding the bag. Unfortunately, once the house of cards collapses, nobody will have the time to care.

    • Paul says:

      I think Yellen – and Bernanke – are fully aware of the situation.

      Global leaders have most definitely know that peak cheap oil was the problem long ago.

      I used to ask myself ‘why is Bernanke committing economic suicide with these insane policies’ He is not dummy – he knows that QE and ZIRP are insane and will blow the machine up – just as Greenspan knew that he was going to blow out the economy with easy money that caused a housing bubble.

      No way in hell did these guys not know what they were doing was bad – but obviously they determined that the alternative was far worse — doing nothing was not an option.

      They have the numbers – they know what expensive energy means – they know that collapse is inevitable.

      And Yellen has surely been privy to all of this – she knows what is at stake – and she is on board to kick the can as far as possible.

      I think the issue is not that she didn’t know the Fed is painted into a corner before she took the job — the issue seems to be that for some reason QE is being slowed — there must be a reason they are doing that…

      I assume the toxic side effects are poisoning the patient — continuing will result in near term death.

      But of course stopping the drip feed will also kill the patient.

      So ya she’s in a corner — but she would have known that before she took the job.

      • They have to stop easing to deflate the asset bubbles. This is a stopgap, though. What MUST happen, but which we will not have political will to do unitl almost “too late” is to restrict financiers and developers from getting their hands on the liquidity and blowing more asset bubbles.
        We need government to institute “Step Down” programs immediately. Of course the divided congress would have a hard time agreeing on exact details of such a plan: Basically turn us all into resource managers a la CCC of the ’30s. Perhaps after the 2014 elections if we have dominance in all branches of a single party. Then what would the Supremes do?

      • InAlaska says:

        I agree with you, Paul. Because you are right. The Powers that Be have the numbers and more definitive info than we have. The US military establishment has been doing studies on peak oil for years. The Hirsch Report has been around for a long time. T-Boone Pickens has access to political power at the highest levels. They Know. The question is why would Yellen even want to take the job in the first place? I think she’s doing it because on some level she and her advisers are still hoping against hope to pull a rabbit out of the hat. With her foot on and off the gas, she is hoping maybe to coax a few more miles out of buggy before the wheels come off. Give the Powers that Be time to prepare for the end game.

        • Eclipse Now says:

          In Alaska,
          1. Echo chamber. Good point! But that’s why I occasionally come to sites like this to see if I’m just deluding myself. I’m an ex-doomer. We *could* still fight it out over the remaining oil, but…
          2. You’re point about Hirsch is interesting. Unless they are all in denial about how soon peak oil will hit because of fracking, But I’m convinced ‘they’ know, and probably have some nepotism or mate’s rate’s deals going between govcorp & vested interests to wring the last dollar out of oil & gas reserves. I just hope the World bank’s divestment initiative will spread into the broader culture and encourage us to wean off fossil fuels before we head towards 5 or 6 degrees of warming, because climate change does seem like a particularly nasty threat to try and ‘cure’. (But even then there are *expensive* solutions, if we really are stupid and leave this problem accelerating for our grandchildren).
          3. But the ‘there isn’t enough time’ arguments are just silly when boron and EV’s can *start* charging away on today’s electricity grid, and gradually run more and more transport & mining & heavy industry until the last drops of oil are gone (or hopefully illegal because of climate legislation!)
          4. Interestingly, James Hansen thinks we’ll use all the oil. It’s the coal he’s truly worried about. There’s an easy, relatively pain free answer to coal. *Today’s* Gen3.5 nukes like the AP1000 that would *easily* have survived Fukushima’s tidal wave.

        • Paul says:

          I think she takes the job because she hopes she can help to delay the inevitable — to a certain extent for an ivory tower person this is a high-powered chess game — what radical ideas can we throw at this thing so as to get us a few more months or years?

          I think it must be very difficult for these people to get in front of the cameras and maintain straight faces while lyinng — and to endure the tidal waves of insults that are hurled at them day after day.

          Bernanke gave us a peak when he stepped down saying something to the effect “I know a lot of people hate me — but when they see why I did these things they will thank me”

          Of course most will interpret that as ‘QE hurt pensioners and savers — but it will eventually lead to a recovery”

          When I first read about that I immediately thought this had far more profound meaning.

    • Thanks! There was an editorial in the Wall Street Journal about the time Janet Yellen’s name was first put in, pointing out the impossibility of Yellen’s task. One would like to think she understands what she is getting herself into.

      • edpell says:

        I do not believe the head of the fed has the authority to make or break the world. She is an employee of the folks who will decide which way money and national government go.

        • Paul says:

          Of course she does not make the decisions — she is the front person who gets in front of the camera on behalf of the people who are really making the calls — although I do suspect she has a voice in the discussions.

  40. Oliver says:

    Minor typing error report : “Another is key point is that today’s real shortage is of investment capital”
    The first “is” is unnecesary.

    I would also have a very down to earth reason to explain why the limits to growth and collapse thematics are never found in mainstream media : we’re meaning to explain people are going to die. Lots of people.
    It couldn’t be blunter than that.
    And that’s enough to be called a crackpot catastrophist and be shunned away.

    • Paul says:

      I think it is better that the MSM ignores this — even the non-MSM ignore this one — for the most part.

      And for good reason — if the headlines read “COLLAPSE IMMINENT DUE TO END OF CHEAP OIL” — can you imagine the reaction?

      Dismay would thunder across the planet — people would run to the grocery stores — Xanax sales would go through the roof ….

      Best the masses remain blissfully unaware – there is really not much they can do anyway. Let them enjoy their Super Bowl, their Facebook, their Dancing with Stars re-runs……. it truly is better that way

      • I pretty much agree. If there were a lot we could do, it would be different.

        • Paul says:

          Perhaps if they had not ignored this when the Limits to Growth was published we could have done something — but we are decades beyond being able to soft land this thing

      • garand555 says:

        While I’m not claiming that this is intentional, this does seem to throw a bit of natural selection is going to be in the mix. Those interested in and able to understand resource limits are going to be better prepared to survive.

        • Peter S says:

          Maybe, and I hope you’re right (for my sake, which is a bit selfish), but knowledge has never necessarily equalled survival at any point in history.

    • Eclipse Now says:

      We *could* nuke each other back to the stone age, or we could get on with the job and build out waste-eating GenIV reactors like the IFR James Hansen likes and use that to ‘charge’ boron to replace oil. James also wants to see renewables and EV’s and hydrogen cars all competing so we get to the most efficient energy source, but that’s a matter for a big marketplace shakedown. France went majority nuclear in 10 years, and car fleets change over every 16. Once we mandate the necessary changes, they’ll happen fast.

      • Paul says:

        EN > do you happen to own shares in any of these companies you mention? You pound the drum pretty hard and incessantly – sounds very much like a pump and dump or a ponzi scheme.

        I think you are in the wrong place for this — nobody here thinks hydrogen, or fusion, or boron is going to save the day.

        A better place for this would be CNBs — I mean CNBC — there are plenty of punters looking for the ‘next awesome thing’

      • Jarle B says:

        Eclipse Now,

        if something is cheap and easy, we do it. Then, why aren’t nuclear plants all over the place? Please don’t answer “because of the anti nuclear stance of the public”, the public would never have gotten their will if there were lots of money to be made.

        • Ellen Anderson says:

          There are clearly some trolls at work on this site and it might be better to stop feeding them – especially if they keep repeating the same words while clearly ignoring the arguments indicating that they are wrong. I don’t know why they do it. Maybe someone pays them or they can’t help themselves.

          • sponia says:

            Edwards: Why the big secret? People are smart. They can handle it.
            K: A person is smart. People are dumb, panicky dangerous animals and you know it.
            Men In Black, 1997

          • I intentionally leave some “trolls” in, because they give a change to restate positions that sometimes are missed. If they get too obnoxious, or continue too long, I will put an end to their comments, however. There are some near the edge now.

          • Eclipse Now says:

            Hi Ellen,
            just calling me a troll is easy. Proving that I’m *wrong* is not. The fact that I keep saying the same words means that I keep getting the same tired old arguments thrown back at me. Sure, we could nuke ourselves back to the stone age. It’s possible. But I do not think it is inevitable.
            1. EG: “Time” = But France built out a majority of their energy in 10 years
            2. “EROEI” = nuclear’s high eroei
            3. “Net energy” = nuclear’s hundreds of millions of years of energy supply from oceans
            4. “Everything build out of fossil fuels & oil” but will start to be built out of nuclear + boron as these take over
            5. “But infinite growth on a finite planet” = strawman argument that of COURSE I’m not suggesting (and implies the responder is a bit of a troll themselves!)
            6: “But the metals will run out” = not if the energy doesn’t, because the sea floor has 6000 years at today’s rates and they’re recyclable and then we may just get lucky enough to build a space colony near an asteroid or two. One decent asteroid has 30 times the metals we’ve ever mined, and there are tens of thousands in this category.
            7: “But there isn’t enough money” = are you kidding? The market for electricity is going to go away? The market for fuels for our cars is just going to evaporate? Wow. Why?:

            When I answer one, the doomer rolls onto 2. I answer problem 2 with solution 2, and the doomer rolls onto 3. Rinse and repeat all the way through the list until we get back to 1.

            Doesn’t this remind anyone of how climate denialists argue?

            • EROEI is a snapshot of today’s operations. It doesn’t say anything about how reproducible it is, without debt. (I am not even sure the EROEI calculation is right. What does it include with respect to decommissioning? Cleaning up after accidents? And how do we do these without fossil fuels?)

              Yes, the market for electricity is going to go away. Without jobs, it is hard to afford anything. You need to go back and read my article again.

          • Paul says:

            Agree – as I have posted earlier I am convinced there is some piss taking going on.

    • 1971hc says:

      Greetings fron Spain, one of the small countries that will collapse first, if Gail is right. And she is probably right, though I hope she is not, for obvious reasons. One thing that worries me is that the prospect of a sudden and full collapse before long is so discouraging that leads almost to inaction and depression. I prefer to believe that there is hope and we will manage to avoid chaos. I don’t think peaceful individuals or small communities would be able to survive in a Mad Max scenario without a strong Government and State, because some sort of War Lords would take power as in Somalia. I think it would be better to support green political options. Green parties might manage to reform the system, abolish the growth paradigm and lead us to some sort of diminished steady state economy. Personally, I would prefer a Green Dictatorship rather than a Mad Max scenario in which I would definitely die soon…

      • Paul says:

        I can envision it as if it were a movie — the green hippie dudes are out in the fields sowing their wheat and carrots — Jamie Dimon shows up with his band of former masters of the universe/psychopaths — the greenies say hey guys come have some of our tasty soy milk — Jamie pulls out his gold-plated AK 47 — sprays a few rounds in the general vicinity killing a few of the hippies — then he enslaves the rest — and takes the women into his growing harem.

        The Green Dictatorship is an oxymoron. I think Somalia is a fairly good model for this — I am not aware of any green groups in that country.

        • edpell says:

          Here 100 miles north of NYC there is no shortage of alphas from Manhattan that have large land holdings complete with loyal staff. I imagine they will be the new feudal barons if we go that way.

          • Danny says:

            If they are able to keep there heads…in chaos it only takes one bullet and there are a lot of those out there…..alpha or not a bullet does not care….

            • Paul says:

              Agree — Jamie Dimon may be an alpha in his plush office among his sycophants — but he’ll be a squealing little pig when some brute drags him from his estate and snaps his neck before taking his stocks of caviar and champagne.

              All this talk of the ‘alpha wall street boys’ is pathetic — guys 1000 times tougher than Tony Soprano will have them for breakfast. They won’t have a clue once separated from the trappings of faux power

        • Don says:

          Hi Paul, you just described what happens in anarchy (the movement to “end” the “state”) and communism. Both tell us that their ideas will result in the abolishment of the state. Needless to say, many among the population will not agree with the idea and will fight against it. The result? The promoters of these two ideologies themselves — as we have seen countless times with communism — become the rulers of an authoritarian state to protect it against the ‘reactionaries’ who would form a government and put an end to the ‘revolution’.

          So people, remember this: anarchy and communism will ALWAYS lead to the most brutal authoritarian governments on earth, because they fail to consider the human nature: that a large part of the population will not agree with the ideology. If you don’t agree with it, you need to be exterminated or subdued, hence the need for an authoritarian and bloody state. Hence Stalin, Mao, Castro and Pol Pot.

      • The idea of a “steady state economy” was developed in 1973 by Herman Daly. At that point, it somewhat made sense, because population was much lower and resource depletion was much lower. In theory, a steady state economy could push forward the date of collapse, if instituted then. I am not even sure it would have worked back in 1973, though, because of the need of the debt system to have economic growth to work, and the need for the economy to have debt.

        If we fast forward to 2014, the whole idea of steady state is absurd, because resource depletion is so bad. The closest we could come would be to go back to being hunter-gatherers. But even H-Gs didn’t live in a steady state. They burned wood and other biomass, and through these means gained an advantage over other animals. This allowed their population to keep expanding. We can’t stop burning biomass, because we need to cook our food and we need to keep warm.

        With respect to cooking, the need is close to part of our genetic requirement now, because we learned to control fire so long ago (1 million + years). Our brain couldn’t be as big as it is, and our jaws and digestive equipment as small as they are, without the use of fire to cook at least part of our food. (A few individual in the right areas could have gotten by with just chopping food, but to get a civilization anything like today’s we would need controlled use of fire.)

        • BC says:

          Gail, et al., this is an arbitrary point to insert this, so it probably won’t attract many eyes/minds, but real wages less household debt service and “disease care” (a.k.a. “health care”, which is 18% of GDP, of which 50-65% of spending is on the sickest 5-10%, including 65-70% of spending by females) spending began contracting yoy again in fall 2013:

          https://app.box.com/s/so7cgboezfv5zs7xvcm5

          For the bottom 90-95% of households, this implies no discretionary real, after-tax income.

          Moreover, given the wealth and income concentration in the US and the share of household spending attributable to females’ spending, ~35% of the US economy consists of the spending by females in the top 10-20% of households.

          Consider what kind of economy we might have were we to spend, say, 8-10% of GDP on “disease care” instead of 18-19%, and 1-2% of GDP on imperial military adventures instead of 5-6%.

          Combined debt service, gov’t spending, and “disease care” now exceeds 50% equivalent of US GDP. Put another way, the US economy does not grow without an increasing share of the population becoming ill, aging, and dying, the US engaging in never-ending imperial wars for oil, and households taking on more debt than they can repay from their contracting real wages after tax, debt service, and “disease care” spending.

          If an avowed enemy of the US wanted to conspire to bring the empire to its knees while the elites basked in their self-satisfied delusions of self-superiority and detachment, they could hardly do better than to devise a system as has evolved in the US since the 1970s-80s.

          “Civilizations die from suicide, not by murder.”

          — Arnold J. Toynbee

          • I agree that disease care and military are at very high levels. But bring them down? Think of the jobs they provide! (Even if not very useful.) And I am sure that productivity figures will somehow show that the large increase in expenditures is somehow justified.

          • timl2k11 says:

            ? I don’t understand your logic here. Providing jobs should not be an end of itself. If jobs don’t provide utility to the rest of society, then cut them, if there is money to go around to provide people with jobs, let’s find some more useful things for people to be doing for society.

          • I am afraid you are right. Our ridiculous spending on health care is silly. Part of it comes from our bias toward over-eating and lack of exercise as well–people are in bad health to begin with.

      • garand555 says:

        Those warlords are a form of strong government. As for political options, well, there are no political options left. We’re now in a physics meets finance kind of situation. The time for political solutions was probably back when US oil production peaked, give or take a decade or two.

        I do agree that peaceful individuals will have a difficult time, especially during the initial onslaught. They will have a choice: Learn how to be cruel and callous, or likely perish. That doesn’t exclude being kind in close nit communities, but people do need to realize that if we go from circumstances where there is enough food for 7 billion people to circumstances where maybe 500 million to 1 billion can be fed, and it happens suddenly, there will be a lot of locust like zombie sheep looking to survive, when not all of them will be able to. That is a recipe for violence.

        I wouldn’t be at all surprised if we shoot down lower than the planet’s non-industrial carrying capacity as a simple consequence of the fact that too many people are dependent on industrial agriculture and too few people will be able to make the transition in time to other systems. I suspect that the seeds for locally adapted crops are not plentiful enough in most places, and a lot of the big-ag stuff really does need an industrial base to be grown successfully on a large enough scale. This is also going to vary from region to region.

        So, will strong government be the result after all of this? Perhaps, perhaps not. It partially depends on how many survive and what path we collectively decide to take. What we must keep in mind going forward is that our views on birth, life and death will drastically change.

        • Joe Clarkson says:

          The best option for those who are “prepared” is that the failure of the market economy occur rapidly. People who have no food will be panicked at first and may become violent, but that would last only a few weeks at most. People who are malnourished become very lethargic. It takes calories to undertake strenuous physical activity. Since our food supply chains are so long and fragile, and since no real preparations have been made for their failure, many people would starve before any government could get its act together, institute a command economy and start rationing resources.

          The worst scenario would be a slow, grinding collapse. Intense pressure will build on whoever is running the government to secure resources of all kinds. Wars become much more likely then. In a slow collapse people will become destitute but not be likely to starve to death rapidly. Much more civil disorder would be likely if lots of people are kept alive but have nothing to do.

          The other problem with a slow collapse is that the cheapest energy will be turned to first, regardless of the environmental effects of using it. Coal will again be king because it will still be available with less extraction capital stock.

          All in all, since collapse is coming sometime relatively soon, let’s hope it is quick.

          • garand555 says:

            “People who have no food will be panicked at first and may become violent, but that would last only a few weeks at most. People who are malnourished become very lethargic. It takes calories to undertake strenuous physical activity.”

            And how many clips am I going to have to drop into my M1 and expend until they are lethargic? People are going to see that I have fruit trees, (soon to be) blackberry bushes, crops that I am breeding to be locally adapted and water. They’re going to think that it’s not fair that I have food that I’ll refuse to share, and they’ll be right. I’m going to think that it’s not fair that they expect me to starve myself when I saw the writing on the wall while they were watching dancing with the stars, and I’ll be right. A fast collapse would be best, I agree, but that interim period will be terrifying, and some of those soon to be lethargic people have guns too.

            I tend to think that this collapse is going to be fast. In part, for the reasons Gail has stated, as well as Joseph Tainter’s work. Also, should Gail be wrong on how the collapse is going to go down, this country is primed for a civil war. That in itself would likely cause a collapse. It might also get people thinking about local food production before the first shots are fired, which could soften the landing though. Not a soft landing, mind you, just not quite as hard. In the long run, a civil war would be better than WWIII. The survivors of a civil war would be a lot less likely to worry about whether the food they’re eating has fallout in it.

          • timl2k11 says:

            “People are going to see that I have fruit trees, (soon to be) blackberry bushes, crops that I am breeding to be locally adapted and water. They’re going to think that it’s not fair that I have food that I’ll refuse to share, and they’ll be right. I’m going to think that it’s not fair that they expect me to starve myself when I saw the writing on the wall while they were watching dancing with the stars, and I’ll be right.”

            It is rare the person that can see two seemingly opposing viewpoints and see what is right in each. Cheers.

          • Paul says:

            For those with any level of preparation the best thing that could happen would be a sharp immediate die-off.

            However that opens another can of worms — what happens to all the nuclear plants and thousands of spent fuel rod pools?

          • You may be right about the issues of a slow collapse. I think the energy source that will be turned to first is in fact, wood, rather than coal. A major concern is deforestation. You are right that if we can, coal will be used as well, and this will be much more possible in a slow collapse than a fast one.

    • Thanks for pointing out the typo.

      And I agree with you–I expect we would be called crackpot catastrophists.

  41. This has weighed heavily on my mind since a few days after I discovered TheOilDrum back in 2007. I really thought the Bear Stearns funds collapse later that fall were the beginning of something much more dramatic than what we got in 2008. I have given up on specific doomsaying, I just note that milestones as they pass.

    I don’t think it will be coal/oil/gas or even mineral limits that get us, it’s going to be fresh water, above ground effects associated with lack of fresh water, and then that will get into the oil supply. Look at Syria right now, whatever you see there is compounded by them losing 40% of their irrigation water through an early Cold War vintage system. They can’t stop the fighting until they fix the economic problems they have, they can’t fix those until the fighting stops, rinse, repeat until Syria of 2016 looks like Lebanon of 1983. Yemen looks all set to follow in Somalia’s footsteps, and I’ve seen predictions indicating the entire Iranian Plateau is going to end up in the same marginally inhabitable condition.

    There are no universal solutions, looks like the right thing is getting out of the way as best we can and hoping it passes over us. I’m not even sure how that works in the U.S. once a lot of people start getting the same idea …

    • Paul says:

      Neal — what happened in 2008 was extremely dramatic — if the Central Banks would not have stepped in with trillions the global economy would have collapsed – supply chains would have severed and the game would have been over — grocery stores empty – gas stations shuttered.

      We were literally a hair’s breath away from the end game — because once a market economy unravels it is too complicated to put it back together again.

      Of course nothing was fixed by the central banks — there is no fixing what ails us — no amount of QE or ZIRP can repair the problems that arise from the end of cheap oil.

      There is without question a far more severe crash coming compared to 2008 — the bubbles are absolutely exponential — and when this one hits I am 99% certain that the Central Banks will be unable to do anything this time.

      There last weapon was money-printing — that has been deployed on a monumental scale — I think that was the last kick at the can.

      This time the can hits the end of the road.

      YEMEN: I was there about 2 years ago and I met with a foreign consular official over coffee to discuss the economic situation — he said essentially this —- that Yemen would soon run out of oil with revenues possibly drying up completely as soon as 2017.

      Compounding this is a population growth that continues to skyrocket exacerbating the water crisis in this arid country —- throw in the fact that much of the population, including those in the capital Sana’a, are living at high elevations making it expensive and difficult to pump desalinated water to them.

      He finished up with: “In both the short and the long term,” he told me. “Yemen is f*&^ed.” (that last sentence is verbatim)

      Microcosm of much of the world?

      • I agree that Yemen has a real problem. I started to write a post back at The Oil Drum on the Yemen situation (in 2010?), and got a lot of negative feedback–not a big oil exporter, who cares. But the population is surprisingly high, and the result is a huge problem to the people living there. The total population is 24.4 million 2013, according to UN estimates. The comparable number for Saudi Arabia is 28.8 million.

    • Thanks for writing. I am sure water will be a big issue. We are dependent on pumps from deep wells for quite a bit of water. These keep getting deeper. In many places, water is pumped uphill, as in to high rise apartment buildings. Even an interruption of electricity will be a problem.

  42. Paul says:

    I am still encountering people who, after being made aware of the recent article on this site addressing solar and wind power — still believe that these technologies and others will be around to cushion the crash.

    Even though when asked how we make high tech things like solar systems and windmills and they have no answer, they still ‘believe’

    The mind is a powerful thing!

    “There are several key points that advocates miss. One is that if a financial crash is immediately ahead, our ability to substitute disappears, practically overnight (or at least, within a few years).”

    I’ll add to that — even in a relatively robust economy with investment capital available we have come up with NOTHING – absolutely nothing that can come remotely close to replacing oil.

    Even in the dream world of fusion and other pie in the sky new miracle energy sources nobody would suggest that even if these were to happen could they replace oil.

    So in a world where trillions are available for R&D we have nothing – nadda – beyond delusions and dreams — and if anyone begs to differ then show me the magic cure for the end of cheap oil. Otherwise save the wear and tear on your keyboard – I am NOT interested in shoulda, woulda, coulda, mighta bs. If it is not happening right now – it is not gonna happen (sorry Eclipse Now but that is the reality)

    Because when the SHTF there will be no R&D – there will be no capital. There will be mayhem and starvation and death.

    The last thing on any VC’s mind will be investing in a new energy miracle – he’ll be fairly busy in his new career as a farmer — or more likely given the nature of his current business — leader of a marauding gang that rapes and pillages what is left.

    In fact what is coming is going to be even LESS advanced that the situation prior to the Industrial Revolution — because back then we had plenty of easy to access resources – hunks of metal laying on or near the surface — bubbling crude (recall the Beverly Hillbillies) — coal to be scooped up easily.

    That is all GONE. What is left requires high tech gear and copious amounts of energy to extract — so resources will not be extracted.

    And the blue box is not the answer — because there will be no energy available to recycle the massive garages full of ‘stuff’ we have accumulated.

    Reality sometimes does suck.

    Can someone pass along the message to Janet that I think she should un-taper. The cliff edge is getting uncomfortably close

    • ResearcherGuy says:

      If it can’t happen they way you can see it, it’s just not possible, ‘eh? Maybe those creating the next generation of solutions are avoiding the current debt fiasco? Maybe they have systems up and running and are doing so with private funds which have been aware of the crises for a long time now? Maybe these new technologies don’t require any new energy because the process of building them is itself, fully sustainable. Maybe that’s why they’re taking so long (combined with the private finance path)? Maybe just you don’t know of them because they’re staying under the radar and quietly setting up the energy revolution pawns to avoid conflict with the corrupt system running the show now?

      And maybe there are people who don’t really care what you think so they don’t tell defeatist people that maybe actually means “already”?

      • xabier says:

        And maybe the Hidden Masters of the Four Paths of Wisdom will appear from their Hindu Kush retreat, where they have avoided the corruption of the world, to save us.

        Details, please! What you offer is just rhetoric.

        I am not a ‘defeatist’, but I am not convinced by that. In particular, the concept of ‘private finance’, ie wealth insulated from the system does not convince.

        • ResearcherGuy says:

          I can’t offer further details on anything but the aquaponics I commented on above. The details are not mine to give. All I can say is that it may or may not be happening and there may or may not be a great many people in this category.

          But hypothetically, where would you be investing if you had lots of wealth and a level of trust in the entire financial system similar to the commenters in this thread? I would either go for land, art, gold, ammo and a big vault or the one tech I trusted to have a shot at fixing the mess. I also certainly would not store any wealth in dollars, stocks, bonds, currencies or derivatives, nor would I advertise either.

          I’m not posting to convince people or gather a group. I’m just trying to show that all is not lost already. There are solutions and just because you haven’t heard about them on CNN, doesn’t mean they haven’t been planned out for a rather long time.

      • Paul says:

        I am waiting for the headline:

        ‘World Save – Miracle Energy Source Announced!!!’

        it was announced this morning by private equity group Black Rock that an ultra-secret startup that they were funding has created a new source of energy that is ready to be rolled out on March 1. This new energy source can:

        – replace oil in plastics and everything else oil is used for
        – replace gas in the making of fertilizer
        – you can use it to power existing aircraft and vehicles

        It will also:

        – create unlimited amounts of fresh water so we can grow food in arid areas
        – it will replenish the world’s fish stocks
        – it will create millions of hectares of new forests
        – it will deliver unlimited amounts of pure copper, iron, rare earths etc etc etc…

        Larry Fink CEO of Black Rock (and the new king of the world) commenting on this breakthrough said:

        “We didn’t want anyone to know that we had invested in this great opportunity — only the really really rich people like Bill Gates and his mates were allowed to pony up on the condition that it remain top secret — we are not sure why we wanted it to be top secret — we are not sure what purpose that served seeing as there were dozens of other projects attempting to do what we were doing — they of course failed —- probably because they were not top secret — I know what I am saying makes absolutely no sense but so what – I am the king of the world now!!!! — I can eat Doritos for breakfast lunch and dinner if I want to – I don’t have to make sense — I am the saviour of the world — that is all that matters — look at my crown Liz — I have more diamonds!”

        — END Press Release—–

        I suggest you not spend your remaining days glued to CNN for breaking news — because you’ll only be disappointed when they break — and it’s Justin Bieber and another DUI.

        • Danny says:

          I have tried to convince a lot of people with PHD’s in physics, math and science of this collapse coming and they think I am some nut job….a modern day Noah….as they laugh….and I can take it…But what worries me are these predictions of collapse….two years is pretty definitive and the descriptions etc….what if they are somehow able to kick the can down the road 5 years…well after 2 years, people will be saying see…they don’t know what they are talking about. I saw this on the oil drum; they would say peak oil this and peak oil that and then when we started fracking the new theme was “see the peak oil people don’t know what they are talking about”. Instead of arguing EROEI,,,,,same thing with global warming instead of climate change…. I think Mad Max scenario in 2 years time is just a bit much…it might happen that way it might not….. You think you are informing people but if you are wrong with your two year prediction, you are doing a disservice to the people trying to get the message out. Danny

          • Paul says:

            How am I doing a disservice to those trying to get the message out?

            Do you think that if they can ‘get the message out’ that that will change anything? Do you think there is something that can be done to save the day?

            I would have thought the opposite — by predicting collapse is imminent and explaining why, does that not light a fire under some people and give them a chance to try to prepare?

            There are fires everywhere now – China has printed 15 trillion dollars since 2009 — and they are printing even more and the PBOC is lending that money to those who borrowed the earlier QE — because many of those entities are insolvent — so they use the newly borrowed money to repay the interest on their earlier debts – this is MADNESS!

            Many other countries are engaging in similar exercises in chasing their tails round and round.

            Meanwhile the general economy is getting worse — what cannot go on — will not go on.

            Two years max.

          • Markus Kemp says:

            My sentiments exactly! I’m sort of a doomer myself in that I expect very harsh times to come, but it never ceases to amaze me how some folks think they’ve figured out this extremely complex system that is our civilization to such a degree that they feel confident to make such definitive predictions.
            There’s no way in hell anyone can be remotely sure that it’ll happen within the next 2 years.

    • The reason why some of the others on The Oil Drum didn’t like my posts is because they didn’t hold up the theme of, “Perhaps something will save us. Let’s look at _____ and _____ and ______.” Even among people looking at the story, there is a real need for having the possibility that something will save us–better oil extraction techniques, or something else.

      • ResearcherGuy says:

        Gail, I very much like your posts and articles. I just happen to be in a position of some knowledge that you don’t possess. That’s the only difference and I don’t hold it against anyone. My main problem with the post above is the arrogance of definitive statements.

        “Because when the SHTF there will be no R&D – there will be no capital. There will be mayhem and starvation and death. ”

        There COULD be no R&D and there COULD be no capital and it COULD turn really bad but that’s not realistic, is it? We all know that capital isn’t destroyed, it’s just shifted from one group to another. And if said recipients are also aware of SHTF crises approaching, it would make sense that they are prepping also.

        As you like to say, economists don’t consider all the factors. Human nature of the wealthy is also a factor, is it not? So the question becomes, what would Gates and the like do to prepare? The answer to that is obvious… he would quietly solve the problems first and then worry about how to distribute them. In other words, the problems are all solved. The kinks are just still being worked out on the rest. 🙂

        • I was’t the one who made the statement “Because when the SHTF there will be no R&D – there will be no capital. There will be mayhem and starvation and death.” That was something Paul said.

          I think my statements are a little more reserved. Mayhem and death haven’t mentioned anywhere that I am aware of. In fact SHTF isn’t mentioned either.

          • ResearcherGuy says:

            No offense meant or taken. I’m aware it was Paul. I just didn’t want to call him out by name so I said, “My main problem with the post above…” That wasn’t meant about you, it was explaining to you why I replied to him.

            Regarding what you said, I was simply defending against the seemingly mocking tone of lumping everyone who hasn’t already fixed it (past tense) with the crackpots who never will. Some of “them” have the money to make things happen… big things.

            Keep up the research. It doesn’t go unnoticed.

          • Paul says:

            Yes I will take credit for those comments 🙂

        • BAU says:

          Oil is capital and is destroyed when used 🙂

        • Paul says:

          Bill Gates is probably doing nothing – because being a tech guy even if he read this blog he’d probably default to what most educated intelligent people default to:

          We will solve this with more technology.

          I know plenty of monied people with high powered degrees and jobs/businesses — and that is exactly what they believe. Because they have been taught to believe that.

          Perhaps a few of them get it — I see Larry Ellison has bought an island —- maybe that’s his refuge.

          “I just happen to be in a position of some knowledge that you don’t possess.”

          Care to let us in on this game changing knowledge?

          • Paul says:

            You know that each key stroke reduces the life of your keyboard — you do know that I assume?

      • Paul says:

        I am not sure how many times this has to be posted before the ‘salvation is at hand crowd gets it’ but let’s try it again:

        If the miracle cure is at hand NOW is the time to unveil it – because in case people have not noticed — we are in the late innings of a crisis caused by the end of cheap energy — Central Banks are printing trillions just trying to keep the global economy from sinking

        SOS SOS SOS — we are here on the Titanic —- we are sinking SOS SOS SOS — we need help like right now —- gurgle gurgle —- SOS SOS SOS — is anybody out there?

        And like the Titanic — nobody is going to come to the rescue — because there is absolutely nothing that can rescue us. The cheap oil is gone — and I don’t care how many billions you throw at this — there simply is nothing that can replace it.

        I repeat NOTHING. So deal with the consequences — and if you may, spend your time preparing as best one can rather than posting the same pie in the sky comments over and over again — because repeating the same illogical thing is a form of madness.

    • xabier says:

      Paul

      Belief is a powerful thing. I’ve been amused to see that when some people are informed that oil companies are giving up on some ultra-expensive exploration sites, or other companies say that harnessing wind power is proving technically difficult due to the wear and tear on equipment, their response is a very knowing and complacent: ‘Well, they are just angling for more subsidies!’

      I’ve observed friends and relations of a person dying young from neurological disorders see ‘clear’ signs of improvement, when one can only see another step in their decline.

      A friend referred to the ‘recovery’ today, and when I challenged them (highly numerate) to explain in what sense there is a fundamental recovery underway, failed to answer adequately. They were just repeating a meme planted by the MSM (and happen to be doing OK themselves).

      • I think denial represent how much people are scared and how much people lack courage and strenght. Denial will probably continue until shortage of oil, food, water and gas become apparent. Denial show how much people in general are weak mentally and spiritually.

      • Paul says:

        I passed along a leaked report from Der Spiegel to a friend who is one of these high powered financial analysts who refused to believe in any sort of oil crisis — his response:

        It’s from the military — they probably are using this to scare the people so they can get a bigger budget.

        I correspond with one of the well-known financial bloggers and sent over a couple of articles about how high priced oil was cratering the economy.. his response:

        High prices are GOOD!!! They encourage more exploration.

        Stupid smart people?

  43. timl2k11 says:

    I think the history shows that financial limits are the real limits. The Great Recsession was not due to physical limits, nor was the Great Depression. Both were due to limits of the financial system. But this could lead to what I might call “premature collapse” (as the Great Recession almost was). Premature in the sense that collapse will occur before hard physical limits are reached. There might be enough resources left over long after collapse to “re-start” a rudimentary economy on a much smaller scale. Makes me think of “Panem” in the Hunger Games trilogy.

    • All collapses will be “premature collapses” by your definition, if we go back through history. They occur when increasingly impoverished governments cannot collect enough taxes from their citizens, to maintain the government.

      It will be extremely hard to restart the current system because we need a complex enough system to get fossil fuels out. Thus, deep mines for coal don’t work. Oil and gas probably don’t work. We also need a debt system to finance extraction. This is not too onerous, if the costs are low, perhaps surface coal in some parts of the world away from transport, so they haven’t been used yet. But what does that give us? Not much of a civilization, I expect.

      • garand555 says:

        I’m not fully convinced that we need a debt system to finance extraction, at least not a debt system like we have today where debt is the system. Some lending, sure, but the system that we have today is fundamentally a siphon used to enrich bankers for being “innovative.” Or, rather, as I’ve said before, it is a ponzi scheme. It MUST grow. We MUST continue to pull future consumption to the present. Without a debt based system such as we have, I suspect the valuation of goods and services would look very, very different from what we have today.

        Put the ponzi nature of our monetary system together with a finite world, and we are indeed in for some interesting times.

        • If tomorrow looks better than today, I expect that you always get some debt. In fact, quite a lot of debt–as much as the system will handle. If tomorrow looks worse than today, it seems like debt would be very restricted in form–short term financing, or something that is truly a sure thing. I expect it wouldn’t work very well. That is why I am doubtful that we could get enough of a system going again to work.

          • garand555 says:

            While there may be some pockets where some sort of a quasi industrial state lingers for a while, I’m not arguing for starting it up again. (I hope as much may linger for a year or three in my state, where there is still gas, oil, and coal that can be easily extracted. It could buy some time for a softer landing.) Rather, I’m arguing that we could have been a lot smarter about how we used what we have already used. One way we could have done so would have been to treat debt in a very different manner than we have. The current system forces the attitude of “why consume tomorrow what you could consume today.”

            BTW, if you get the impression that I hate bankers, you would be right.

    • Quitollis says:

      Financial limits are perhaps the “collapse mechanism” that switches the system into free fall. Labour is less productive without cheap high energy input, companies cannot service debt and governments cannot collect enough taxes to maintain a social economy with high energy prices. The economy suffers an abrupt qualitative change as the labour/ energy limit expresses itself financially as collapse. Thus capitalism totally crashes and the population with it for want of debt, profit, tax and above all affordable energy.

      I too suspect that QE and ultra low interest rates are an extreme, “last gasp” measure. “Lets just print trillions and give it away! That should keep the thing going for a while longer.” Thus I am anxious at what the tailing of QE and a rise in interest rates will portend in the near future.

      “It will be extremely hard to restart the current system because we need a complex enough system to get fossil fuels out.”

      Bingo!

      (I hope that I have not given the impression on other threads that I think that this civilization is fixable. I meant only to allude to some more general human factors that we may want to bear in mind in the future (if any of us survive), I did not mean to suggest that a total collapse can any longer be avoided. Nearly everyone is going to die.)

  44. Dave Kimble says:

    “Limits to Growth” didn’t recognise the fundamental role of energy in their analysis. That is why they didn’t have petroleum listed as one of their key resources, despite their all-encompassing “Resources” curve following a classic sigmoid curve, the derivative (rate of change over time) of which is a classic Hubbert Curve, see http://www.davekimble.org.au/peakoil/limits.standard.gif .

    The data for their model went up to 1970, so it was difficult to see at that stage that the US was at its Peak Oil, unless you were an insider and knew that the swing ‘producer’, the Texas Railroad Commission, had just lifted all restrictions on supply. The ‘giant’ oilfields of Alaska, were of course only a minor bump on the decline side, as was Gulf of Mexico deepwater, and as Tight Oil will turn out to be too, see http://www.davekimble.org.au/peakoil/charts/US-48.Alaska.deepwater.gif .

    It is very difficult to shake off the concept of ‘Well, we’ll build something else then ! We are ingenious, we went to the Moon!” – a concept which doesn’t work in an energy-scarce world. Building new stuff is the LAST thing that is going to get us out of this mess, but that doesn’t stop people from proposing projects that would require massive amounts of energy to be invested NOW, for an energy return in the future. It’s simply too late to build anything to scale up and replace oil.

    • Eclipse Now says:

      Hi Dave K,
      it *is* difficult to shake off when France went from 8% nuclear to 70% nuclear in 10 years (and mostly nuclear within 20), and when people like James Hansen think boron can be ‘recharged’ cheaply and deployed easily, without the ‘chicken and egg’ problem of hydrogen customers V hydrogen fuelling stations, then it sounds like one *more* options we have of weaning off oil. (Despite already having EV’s, trains, trams, trolley buses, New Urbanism, cycling, walking, relocalising economies, airships, and maybe even some niches for hydrogen). Once you have a stable electricity grid with a high enough EROEI, all these other things become options. Nuclear supplies that. NREL even concluded that 70% of American drivers could recharge EV’s on *existing* night time spare capacity on the grid! And that’s *without* building new power stations to supply more electricity. Check out James Hansen’s thoughts on boron where I posted it up-thread. Have you read Prescription for the Planet, the book he’s reviewing? It’s free.

      • We don’t have time or capital to do all of these things.

        • Eclipse Now says:

          But peak oil is not about when the oil vanishes, but when it peaks. Capital? I’m largely talking about natural attrition of old cars and trucks building out the new fleet of the new. And they managed to build out the Hoover Dam during the Great Depression, and built the interstate highway system on a fraction of the oil we use today. With a little rationing, we should get through this. So while there might be a larger GFC, even a GD, rationing and restructuring of the financial system is a matter of paper work and re-allocation. What doesn’t go away is the long downwards curve of oil, coal, and gas, with CTL and GTL and fracking and all those other nasty, dirty habits scraping us through until a clean renewable & nuclear boron* age begins.
          (*Boron + whatever other mix of efficiency and alternative fuels we use).

          • I am not writing about “peak oil.” I am writing about Limits to Growth. Peak oil represents a misunderstanding of our current situation, in my opinion. They think that there will be a lot (close to 50% left) after peak hits, but this is based on misreading of what Hubbert said. Our history in past collapses shows that the drop is relatively quick, because governments tend to collapse, partly because they can’t collect enough taxes from workers who are increasingly impoverished.

            Part of the problem is debt and the financial system, as well as governments. Without these, it is hard to get anything out of the ground.

          • Paul says:

            Boron…. what does that rhyme with?

    • You are right. Limits to Growth just dumped energy, including oil, in with other resources. That is one reasons that the actual limit is coming sooner than expected. The lack of debt in the model makes the fall harder.

      It isn’t obvious from the text of the book that investment capital is the limit of importance, but one can see that by reading the text closely. Dennis Meadows was the one who pointed out the importance of investment capital to me–Donella didn’t emphasize it.

      • An interesting question to ask Dennis Meadows is how much time, money and human talent would be needed to do an thorough Limits to Growth report using today’s data and tech. And why it has not been done. The report itself was, and remains, as authoritative an analysis of the global human predicament as has been made. We are reduced to viewing our now relatively near-term future through a 45 year old lens.

        The central insights remain, that exponential growth, or linear growth, is impossible in any closed system. That efforts to convert an unstable growing dynamic system to a stable state system require foresight, time, energy and resources. That failure to proactively change the nature of the system will result in the collapse of the system.

        “It may be that in 150 years’ time we will emerge from the
        population die-off at a level of being that mimics Europe of the
        1850s, with technical holdovers from our own age and a global
        population of two billion. That would be a hoped-for outcome.
        It may instead be that some small clan will remain, subsisting
        on lichen soup north of Baffin Island. These are both extreme
        outcomes that can now be plausibly argued from the data.

        But I do know this. Children will continue to need no
        reason for their infectious joy other than simply being alive. Young
        people will search each other out in a secluded place. The Mother
        will know her role as creatrix when she nuzzles her infant to her
        breast. And when the old ones gather in the fading evening, they
        will tell the story of a time when their ancestors unlocked the secret
        of the fossil Sun, and burned brightly in its light.”

        Orren Whiddon
        AgeofLimits.org

  45. Ikonoclast says:

    1. The world is big.
    2. Big is not infinite.
    3. Exponential growth uses up bigness remarkably quickly.

    • Eclipse Now says:

      Hi Ikonoclast, that’s all true. But here’s another few truths:
      1. First world nations are rich, and do not grow their populations.
      2. Kerala, India, stopped growing its population even though it wasn’t rich, but just educated and empowered women and guaranteed some basic health care and security in old age.
      3. Exponential growth of nuclear can replace coal remarkably quickly. (France went from 8% nuclear to 70% nuclear in 10 years). As the car fleet turns over every 16 years, boron can replace many functions of oil at about the rate of natural attrition.
      4. The debt situation will have to be sorted somehow. There are a variety of economic means to do so. But just saying “debt + peak oil = TEOTWAWKI” is disingenuous. There is a VAST difference between a Great Depression and Mad Max. Indeed, coming out the other side of peak oil into the nuclear + boron / EV / hydrogen age could stimulate home grown jobs. America currently waste $6 TRILLION / decade buying overseas oil. Imagine all that money going to LOCAL businesses building nuclear power + parts + mining and ‘recharging’ boron? James Hansen thinks it’s a contender, but that ultimately EV’s and hydrogen are also. Price will win. Once we make the switch, Americans will wonder why they didn’t do it decades earlier and save themselves many TRILLIONS of dollars.

      • John House says:

        I am curious Eclipse Now if you know where all the rare earth metals will come from to make all the solar power panels, etc., or where all the oil will come from to mine all those metals, or where all the diesel will come from to ship all that rare earth from China, or where we will find all that “RARE” earth to begin with? Or what about the fuel for all those existing and new nuclear power plants when there are plenty in the industry who see us already at or near peak uranium? The same arguments Gail presents for finding and extracting new oil applies to uranium.

        Don’t forget that one of our greatest failings as a species is looking beyond our current needs to see the consequences of our actions; what will we do with all that spent nuclear fuel? We still haven’t figured out what to do with what we’ve generated over the last 5 or 6 decades. Sooner or later (I think much sooner) we will discover in a very real way just how dangerous and foolhardy we’ve been by not making sure we had a way to deal with nuclear waste before we generated so much of it.

        I’ve checked out the “Prescription for the Planet” link on your web page though I haven’t yet read it fully. My initial response is that if it’s so easy, why aren’t they doing it already? Have you looked at the enormous cost, in debt, physical resources, and energy, of building just one traditional nuclear power plant? Here in Arkansas they built a nuclear power plant more than 40 years ago and it’s still being paid for. (See the discussion debt above.)

        There is also a very real leadership vaccuum on these issues. The reason for that is at least two fold: 1) the monied interests are too invested in the current system to change it, and 2) what you propose is nothing short of a complete top to bottom rebuilding of everything in our economy. We can’t convince Americans that climate change is happening – how can we convince them that we need to willingly suffer the consequences of what you propose so that we can come through on the other side much happier and better off? There is no guarantee that we will be happier and better off, but even if there were, have you met most Americans? You can’t get them to do without their phone for a few minutes much less make any meaningful sacrifices.

        So, the only way most people in the developed world will accept what’s happening is once it’s so far gone that only an idiot would be able to deny it. As demonstrated in the essay above, by then, it’s too late. (Actually, there is sufficient evidence that we’ve already past that point.)

        I’m not trying to be meanspirited, but there seems to be this feeling that we can just wave a magic wand and fix all our problems. When it comes to these new technologies that are going to save us, why aren’t they being developed already? Surely, if they are that great, there should be no problem finding investors. With the cost of oil and our dependence on it, surely it would take little convincing of investors and policy makers to begin to shift our economy toward this new technology – if it actually can do what is claimed.

        In fact, this is what happened with solar power and wind power, etc. Unfortunately, the reality has been that those technologies have helped very little.

        Technology is not energy, nor is it a magic wand. Technology will not save us. In fact, nothing will. Oil has allowed the human species to go into ecological overshoot in a massive way. As with all species in overshoot, nature will correct itself.

        • Eclipse Now says:

          Hi John House,
          when you have enough energy, all your concerns about rare earths and metal evaporate as we mine the ocean floors (6000 years of metal supplies there!) and eventually establish a space presence where 1 decent asteroid could have 30 times all the metal humanity has ever mined!
          IFR’s turn 1kg of uranium into a lifetime supply of energy for one person. 1kg of uranium costs $300 to extract from seawater, with today’s technology. This is a lifetime of fuel. Seawater uranium particles are constantly being topped up by continental drift & erosion. Nuclear is ‘renewable’ in that sense. A strong electricity grid, which nukes can quickly supply to wean us off coal, is the backbone of any future oil-less transport or mining or harvesters. A good grid can charge 70% of American EV driving from *existing* overnight capacity. Boron can take up the heavy lifting of trucking and mining etc.
          Basically, Hubbert saw and Hansen sees a largely nuclear future. So imagine as oil and gas and eventually coal decline, a great big comeback for nuclear power. With it’s high ERoEI it will charge everything else we need to do, whether EV’s, boron, or hydrogen.

          • edpell says:

            There are good rare earth mines in the U.S. It is just cheaper to use Chinese slave labor. If China closed the door for rare earths it can be source from traditional U.S. mines no need for fancy ocean floor (yet).

            • If we do the rare earth mineral mining here, we would need to handle the waste. I expect we would make more of an attempt to take care of the pollution, so our cost would be a lot higher.

          • Paul says:

            Eclipse — John has been so kind as to post a very thorough and thoughtful rebuttal to your earlier comments and you respond with:

            “and eventually establish a space presence where 1 decent asteroid could have 30 times all the metal humanity has ever mined!”

            I will not be so kind.

            I am increasingly convinced that you are taking the piss of everyone on this board (including Gail) — at least I hope that is the case — because the alternative is of course that you don’t have the horsepower mate…

            I think that if I explained why we are never going to be mining asteroids — or hauling asteroids of pure metal back to earth with space ships (powered with Boron?) is almost certainly never going to happen — to an 8 year old – they would get it.

        • c. says:

          I cringe every time someone brings up rare earth metals. Just as a backgrounder. Rare earth metals are called such because they are less than 1% of a given volume of mined material. They are currently recovered and sold on the global market because, and only because, we are mining that earth for something less rare, eg, copper, iron, aluminum. If there is no economic incentive to mine for those other “regular” metals then the sources of our rare earth metals disappears. Those rare earths are only economically viable in conjunction with other metals. This strikes me as a situation where the pricing of those rare earths barely begins to recognize the cost of the metals if they were the only economically viable recovered metal. So the real reason that rare earth metals are not mined in certain parts of the world is that the percentage recoverable of the main sale-able metal is too low to actually mine that area.

      • edpell says:

        Eclipse, on the nuclear I favor Kirk Sorenson’s liquid fueled reactors because they are room pressure so no massive containment dome. The massive containment dome of a traditional plant represents a huge amount of embodied energy in both concrete and rebar steel. Room pressure reactors do not require a dome. Yes, a small sturdy room is a good idea but far cheaper in required physical capital. [I still also hold out hope for Robert Godes’ cold fusion boiler]

        • Eclipse Now says:

          Hi Edpell,
          sounds good, but my argument is how we’re going to get through this largely from *old* reactors technologies like the IFR. The EBR2 ran for 30 years, demonstrating the physics. There’s an enormous space in the future for trying new things like Sorenson’s liquid fueled reactors. I’m just saying GE’s plans for the S-PRISM could be deployed big time the moment we got serious about this, and like France, went to a majority nuclear grid in 10 years and then an almost completely nuclear grid in 20.

        • Paul says:

          I favour a perpetual energy machine. In fact I am working on one in my backyard now. I have all the gear — one of my good mates is a mechanical engineer who sold his company and retired at 45 so has a lot of time on his hands.

          He tells me this perpetual energy machine is a winner — it will save the world — and he says we’ll be able to make it work — it’s going to come online any day now — so Sorenson can forget about his reactor – we are on the cusp of a breakthrough that will make all other solutions obsolete.

          Any day now. I understand the networks are planning to pre-empt a Justin Bieber interview when we give them the green light to announce this breakthrough – it really is huge!

          • Eclipse Now says:

            Hi Paul,
            I favour peer-reviewed nuclear science that we’ve verified through 30 years of testing. Integral Fast Reactors are *old* physics. But if you want to call Argonne Lab’s EBR2 a perpetual energy machine, then that’s just egg on your face.

            ” It operated as the Integral Fast Reactor prototype. Costing more than US$32 million, it achieved first criticality in 1965 and ran for 30 years. It was designed to produce about 62.5 megawatts of heat and 20 megawatts of electricity, which was achieved in September 1969 and continued for most of its lifetime. Over its lifetime it has generated over two billion kilowatt-hours of electricity, providing a majority of the electricity and also heat to the facilities of the Argonne National Laboratory-West.”
            http://en.wikipedia.org/wiki/Experimental_Breeder_Reactor_II

      • 1. The rich grow their populations, even when they say they do not. They allow immigration. When one looks at actual population figures, the places with population declines are mostly in the Former Soviet Union and affiliated countries. Also Japan.

        2. How do countries with peak oil guarantee security in old age? It is a contradiction in terms.

        3. Where does the investment capital come from for all the nuclear? Also the time?

        4. Good luck!

        • Eclipse Now says:

          “2. How do countries with peak oil guarantee security in old age? It is a contradiction in terms.”
          Gail, don’t you think America will be better off financially when it finally weans off oil? It wastes $6 TRILLION dollars a decade buying overseas oil. When that money is redirected into America’s home-grown nuclear boron/EV/Hydrogen/Synfuel economy, it will create local jobs and support national energy security. America already has enough nuclear ‘waste’ to run herself for 1000 years.

        • Chris Johnson says:

          @ Gail, Paul, Eclipse Now, and any/all who are interested in demographics:
          1. All societies naturally reduce child-bearing rates after reaching ‘middle income’ status — the equivalent of about US$6,000 PPP. Demographers claim it happens naturally.
          2. Many / most of the Latin Americans that cross into the US started out south of Mexico, as Mexico’s GDP/Capita is around $10 – $12,000 PPP. However, 10 percent of all Mexicans live in the USA. Mexican border guards are said to be rather severe on their southern neighbors.
          3. The influx from Africa to Europe and from poor Eastern European states to rich ones has not been solved, according to what I hear, either by lenient EU migration rules for members, or by more strict policing efforts. Are there any solutions in a ‘tight’ world?
          Can / will EU members continue to tolerate unrestricted immigration and ignore the difficulties?
          4. If the US economy climbs or the Mexican economy tanks, how will immigration be affected? Ditto with Europe and Africa…

      • Stan says:

        Eclipse Now said some things including: “3. Exponential growth of nuclear can replace coal remarkably quickly. (France went from 8% nuclear to 70% nuclear in 10 years)”.

        The point point we keep trying to push is that France did that in a ‘BEFORE-PEAK-OIL and non-crippling-debt’ economy. Could France do that in an economy that isn’t loaning money and has no oil to put in the trucks needed to take the supplies to the building site?

        Stan.

  46. moraymint says:

    Once again thanks Gail for another clear, accurate, logical, relevant and brief analysis of the state we’re in. For some of us, it’s rather surreal knowing what we know through analyses such as your own and those of the likes of Heinberg, Michael-Greer, Martenson, Mearns, Hagens, Leggett, Kunstler and others with whom you’re familiar and probably know personally.

    Increasingly, my own focus is switching away from looking for evidence that we’re heading for serious trouble, if we’re not at the leading edge of disaster already, towards identifying how on earth a man and his family and friends should be preparing for what’s likely to happen in the near future – let’s say within 10 years at the very most, and quite likely within a time period of half that.

    Ironically, of course, the problem for many of us is a paucity of capital – I mean at the level of personal net worth! For most of us to make a transformational change to how we live and work requires a degree of investment, a degree of resilience to the inherent risks involved and these requirements mean having capital – precisely what is becoming in short supply. I’m fortunate enough to be able “do something” about the impending situation, if push came to shove, even if such a personal/family transformation was relatively modest in terms of the “transformation capital” required.

    However, for many/most people, coping with what I think is going to happen over the next 5 – 10 years economically and socially will be extremely difficult, extremely difficult indeed. Most people don’t have “transformation capital”. I read just recently that here in the UK that average household in the UK has a “deadline to breadline” of just 26 days, with working age families exhibiting an 11 day “deadline to breadline” (research by he Legal & General insurance company). Therein I fear lies the seeds of civil unrest. We’re sleepwalking, aren’t we? We’re being led (if that’s the right word) by politico-economic elites who either don’t know their arse from their elbow, or who do know the realities of our predicament, but dare not speak its name: the end of economic growth as we’ve come to know it this past 200 years or so is imminent, if not with us already.

    My New Year’s resolution was to spend the year making practical plans for the economic and social turmoil that could (will?) characterise the coming 5 – 10 years. It ain’t easy and now more than ever in my life the importance of having a strong network of family and friends, of thinking local, thinking community and taking practical steps to build resilience has become acute.

    On the other hand, the likes of you and me and the rest of us in this “limits to growth” community could all be misreading the portents and misunderstanding mankind’s ingenuity and capacity to absorb seismic societal change; but I doubt it.

    • Paul says:

      I agree with the above and think that even if they had the resources – let’s say significant equity in a condo – how many people are going to say ‘let’s quit our jobs – buy a small farm in a remote place and invest everything we have in preparing for the crash to end all crashes.

      That would require one to have a very high level of conviction that the crash is certain – but more importantly imminent.

      Easier to stay the course and turn on the cognitive dissonance and hope that you are wrong.

    • Eclipse Now says:

      Hi Moraymint,
      This is the answer some push. Sell up, see the world, and when it all gets too horrible, just suicide. Apparently it’s painless. This is the sort of logical extremism prevalent in many doomer online communities.
      http://m.guymcpherson.com/2013/04/the-irreconcilable-acceptance-of-near-term-extinction/
      Sadly, I’ve already seen it happen over peak oil, and is one reason I like to remind doomers they are *not* omniscient and do *not* know the future. There’s a vast difference between a Great Depression and Mad Max.

      • Paul says:

        Unless you can explain to me how we are going to feed 7.2 billion people when oil and gas are no longer available to create the pesticides and fertilizers which are required to grow the crops that feed this large population — then I am going with the Mad Max scenario….

        • ResearcherGuy says:

          7.2 B people? Not a problem. Refrigerators took off very quickly, replacing centralized ice houses all over the world. They could have been adopted much faster had they had internet, shared files and decentralized factories but in a very short time the ice houses pretty much all died off.

          I have an aquaponics system in my basement that was built with $100 in general hardware and $400 in custom LEDs. It uses ~1 gallon per day of water, some fish food and 200 watts of power. With a battery and $240, I can convert that to solar. It produces the equivalent of 5 annual harvests (running staggered) of a 125 sq ft garden plus 4 lbs of fish per week plus some shrimp (not measurable amounts yet). My next alteration is to integrate compost and worms to grow fish food in a side barrel and add potatoes in a track around the outside. The potatoes will be optimized for 10 lbs per week (our needs). Other than that and some seeds, it has no inputs or replaceable items. Any part that breaks down can either be replaced very cheaply or by operated by hand in a pinch. In total, it feeds an average family of 5.

          A friend has a similar system that grows fodder feed for his cows. They stay indoors now and he is beginning to collect the methane for energy (along with his digester). His inputs are 25 gallons of water and 10 lbs of seed, which we hope to make another system to harvest from. Excellent beef and the turn-around would feed 6 families.

          Obviously, we trade different types of food but neither of us has more than 1/3rd of an acre. It just takes a desire to do it and that will come very soon. 😉

          • Kevin in Georgia says:

            That sounds pretty cool. Do you have it written up/pics anywhere?

          • ResearcherGuy says:

            Kevin, thnx. No, it’s not online at all. We have some tweaking to do and funding agreements to finalize before we go that way. Not to mention getting the perfect LEDs refined and a controller built that makes it fully automated and foolproof. If it’s not really attractive on all fronts, it won’t be adopted fast enough to make a difference. And if it’s released with too much efficiency left on the table, it will take lots of heat.

            It won’t be long (he says after a decade of the games) but there are many other irons in the fire too.

          • edpell says:

            If you have a recommendation on LEDs it would be helpful. Thanks.

          • Joe Clarkson says:

            Unfortunately, aquaponics is not the free lunch everyone is after. While it does allow intensely concentrated growth of certain plants and fish, it is heavily dependent on outside inputs. Just two things you mention are enough to point out its limitations.

            200 Watts of electricity (mostly for aeration and circulating pumps) adds up to about 5kWh per day since the equipment runs 24/7. This amount of electricity requires a good sized solar system, about the size of the one that supplies my household electricity. It cannot be purchased for “$240 and a battery”.

            “Some fish food” is usually a high-protein food manufactured from other fish, such as sardines and anchovies. If one has to grow the high-protein food to feed the fish in an aquaponic system it takes a great deal of surface area and even more equipment.

            In sum, a truly self-sufficient aquaponics system would be limited by the primary productivity available from sunlight and photosynthesis just like any other farming. And it is very capital intensive, perhaps even more so than farmland and farming equipment.

          • ResearcherGuy says:

            edpell, Cree seems to be edging out Phillips lately but neither has reached that integrated “all in one product” solution that they’re promising.

            Joe Clarkson, You are accurately quoting the traditional systems attributes. There are a number of new designs that eliminate much of your concerns. For example, my system uses 10 watts of power for all the pumping and aeration combined. The 200 watts is for the LED light which runs 14 hours on and 10 hours off. Yes, that’s still 2.8 kWh/day but it can be powered by a $250.00 300 watt PV panel. However, I only mentioned solar, not PV.

            The fish food is a mixture of duckweed (which doubles in size each day), fish by-products, egg shells and plant waste, so the only inputs I “add” are some worms, which as I mentioned, I plan to automate as well. Also, the water all comes from 2 rainwater capturing barrels siphoned in parallel to a float valve and I’ve never seen them less than half full. Except for heirloom seeds, it’s a pretty closed-cycle system that can be used without modification anywhere and if it was rapidly adopted, it would definitely free up a lot of irrigation land.

          • Scott Eller says:

            ” Welcome to Barter town!” Is Tina Turner around?

          • Good luck! Liebig’s Law of the Minimum still holds, so if anything doesn’t work, it cascades through the system. I would build in lots of redundancy.

          • timl2k11 says:

            So eventually you install a solar panel? You will be wasting over 95% of the original solar energy. At least 80% at the solar panel (this is also called “rejection” or waste heat by the DOE) of that which is left you waste 75% in the conversion of electricity to light by the LED’s. And then there is the inefficiency of photosynthesis itself. Why add all that waste to the system and not use the suns energy directly? Your plan does hold up to even a passing amount of scrutiny.

          • Paul says:

            Sorry to inform you but you are not going to feed 7.2 billion people with the methods you described.

            Where are you going to get the power for this system? There will be no grid.

            You cannot feed a family on 1/3 of an acre – not even close

            Even if you could there is not enough farmland to go round to allow 7.2 billion people to do this. Most of the farmland on the planet is farmed using oil and gas inputs — it is dead soil without those.

            And how does this play out — when the SHTF do the billions of people suddenly just sing koombaya and head out to the suburbs and lay claim to their patch up land and start farming away? You are aware that they would have to do this BEFORE the SHTF – what would they eat while their first crop grows?

            I have about 3 acres of the best farmland in the world in Bali – I can grow 3 crops per year — it is going to be a nightmare to try to survive even here.

            I suggest you try this to get a better understanding of what you are facing — try not buying anything from the grocery store for one month and living off that 1/3 acre of land.

            Then come back and report how that worked out.

          • ResearcherGuy says:

            timl2k11 and Paul both show prime examples of exactly why non-engineers should not be allowed anywhere near a calculator. The little information they have has become a dangerous tool in the fight for more apathy. It’s a crying shame. I think this is also where the troll comments come in against Eclipse. In other words, since people don’t understand and simply believe that if something was good it would have been done already. Not always true. Sometimes things take time to set up.

            timl2k11, your entire comment regarding solar’s efficiency (which should be called efficacy) is horribly flawed because you completely disregard the required wavelengths (colors) of light that a plant needs. There are 3 shades of red and one blue that are used in photosynthesis A and B. All other colors are disregarded (other than they create unwanted heat). Capturing solar at 17% efficiency means you get 17% of 1000 watts of sun per sq meter of collector (peak). That sunlight is comprised of infrared, visible and ultraviolet light, all of which the PV panel uses. If a plant were to receive this same sq meter of sunlight, it would waste all but those three colors which is why a plant in only 1-2% efficient. (Some plants can hit 6-8% but we don’t eat those.)

            When taking the PV’s output electricity directly to a battery, you get a 0-1% loss. Then when you power a good LED light (at roughly 60% efficiency) you get only photons concentrated in the colors you selected. This means you can get a system efficacy of way more than 150-400%. This is why I can get harvest times of 40% of the normal season length with healthier and meatier crops than you could ever get in a garden. Lettuce can go from seed to table in 35 days.

            Add to that another couple factors… The design I’m using makes use of the light much more efficiently in plant spacing than a garden or flat-bed ever could. Depending on the type of plant spacing needed, I can multiply the lumens per system watt by up to 6 times.

            Adding more to that, I’m not planning on using 17% efficient PV solar. As I mentioned, I said solar but not PV. I’m using concentrated solar thermal to electric, so my system’s electrical efficiency is over 40%. That’s another 2 1/2 time gain.

            Paul, I’m not quite sure where you get your arrogance in stating definitively that it can’t be done. It’s quite appalling, especially from someone who doesn’t even understand the topic. Aquaponics by definition, doesn’t use ANY ground or any fertilizers, pesticides, herbicides, etc. It’s a system where fish waste feeds plants and plants clean fish water. As you can see on the commercial system at http://aquaponics.com/page/commercial-systems , look at the Commercial-300 system which is almost exactly 1 acre. It produces 1,200 lbs of fish and 28,000 heads of lettuce per year. (It’s the closest I could quickly find at 1 acre but they focus on only lettuce.) It’s most often done indoors and the footprint isn’t even comparable to outdoor gardens. Many people are getting 10,000-20,000 lbs of produce per acre per year with 5 hours of work per week. I’m getting the equivalent to 5 harvests of a 125 sq ft garden each year… all from a 6 ft cube of space and I only visit the system once a week.

            You say we can’t do 7 billion people this way? The materials are all available from hardware stores and can be made from biomass in numerous forms. Plenty renewable forever. So, for less resources than one annual harvest, we could install similar systems on the personal property of every family in the world. (Tough, but it COULD be done.) That settles the energy argument.

            As far as the land statement, that’s simple laziness on your part. All 7 billion people on the planet could own (or lease or whatever) more than 2 acres of farmable land for each person. That’s around 9 acres per average family. That would be an equal distribution of just the land able to be farmed. It doesn’t include many areas where people live now. But as you know now from my previous paragraphs, we don’t need more than about 50 sq ft per family if we start growing intelligently. So maybe the arrogance isn’t all warranted?

            • Paul says:

              “The materials are all available from hardware stores”

              You should get a passport and travel a little — most people live on a couple of bucks a day — they don’t have money to go to the hardware store….

              Yes we can divvy up the world and give each person a couple of acres — and they can sing koombaya and grow gorgeous vegetable gardens and raise chickens — and we’ll have a utopia.

              So who decides who gets which piece of land? How does that work? Oh right – the guy with the gun gets the fertile stuff.

              I’ll trade you 10 million acres of the best industrial farm land in America – with plenty of water — and temperate weather — for one acre of certified organic land.

              You seem to keep forgetting that most of the best farmland in the world is farmed using oil and gas inputs — the soil on these lands is DEAD – as in nothing will grow without years of intensive organic soil building.

              Even if your ideas was feasible there is not enough arable land available for 7.2 billion people – we burned it out with our so-called ‘Green Revolution’ — or Green Nightmare

            • How are you going to do concentrated solar thermal to electric? This is not a home process. You need to make steam to power turbines. You need a continuous water supply. This is heavy-duty stuff. I think you are in way over your head.

          • Peter S says:

            I like your optimism, and new lifestyle, and I want that too. But you seem to forget that we have already had far more than enough resources and food basically for the whole history of human beings – especially in this age of free oil – and there has been constant war and selfishness over these resources. I don’t understand how you could be so optimistic to think the majority of people would peacefully share with others – in a time of extremely limited resources. That is not evidenced by history at all.

          • Answering Gail’s CSP -> Electric comment: there are other options than turbines for power generation, though I agree that most are fairly fraught. In general, Stirling-cycle engines can work with numerous grades of heat sources, and on a small scale might be a feasible individual / neighborhood electric generation option.

            There are commercial systems which work on the same principle, output is generally in the multi-kW range (figure about 30% net efficiency, and 1kW/meter^2 insolation) for commercially designed systems.

            The need to perform sun-tracking (mechanically or otherwise) is a constraint.

          • dredmorbius says:

            More on Stirling: seems as if Stirling Energy Systems had trouble making a go of it. They filed for Chapter 7 (liquidation) bankruptcy in 2011:

            http://news.cnet.com/8301-11128_3-20113771-54/solar-dish-maker-stirling-files-for-bankruptcy/

            Infinia also filed for bankruptcy, in 2013, though under chapter 11 (reorganization):

            https://www.greentechmedia.com/articles/read/Infinia-Stirling-Solar-Startup-Files-For-Bankuptcy

            Which speaks to Gail’s emphasis on financing.

      • I am more in favor of taking one day at a time. Make each day you have, as good as it can be. Do something that will benefit others, not just yourself.

    • I do need to write a post on what our response should be–which is not quite the same as “how to save yourself”.

      Most of the things I have been doing are things that would not be a bad idea to do otherwise. I make certain I am in good health, through good diet and exercise, so I am not dependent on the medical community. I do the things that I want to now, rather than wait until some time in the future, when they may not be possible. I make sure I stay in contact with, and in good relationship with, my grown children.

      A few years ago, we screened in part of our deck as a screened in sitting room. Without electricity, it would be a much more comfortable to place to be during warm parts of the year than inside the house.

      I bought a solar oven (with shiny sides), and I located a creek near our home. I am not sure how useful the solar oven will be–our lot is mostly shaded, and I would have to put it in the middle of the front yard. I am now clearing a place in the back yard where I could build an outdoor fire, if I needed to, to cook over, probably using gathered fire wood. I bought vacant land across the street where I have a garden. I also have planted a few nut trees and a couple of fruit trees. I have bought a few books on topics ranging from permaculture to edible wild plants. (From my gardening attempts to date, I am not putting much faith in the garden, or for that matter the trees.)

      By the way, I know all of the folks on your list personally, except for Leggett, who lives in the UK. I have had e-mail correspondence with him though, and one of his books was the first peak oil book I read.

      • T. G. Neason says:

        As I have stated previously, I appreciate and agree with Gail’s perspective! I am describing my experience in the hope that it will help others prepare for the future.

        I was born on an East Texas share cropper’s farm in 1933. Our house had no electricity and no indoor plumbing. Drinking water came from an earthen cistern. If a possum fell in, we fished it out and thought little of it. After all, why be concerned about a dead possum in water that has been filtered through bird’s nest in the gutters. My mother canned our food on a wood stove when the outside temperature was 100-110 degrees F. I am guessing that it was at least 120 degrees F in the kitchen. Stove wood was cut with an axe and the chips were used for kindling. Transportation was a farm wagon and a pair of mules.

        In 1987, at a NASA sponsored seminar, I concluded that globalization doomed the US economic system. Why pay a ‘Hudson River’ engineer $110K when an superior Indian engineer could be hired for $15K?
        Accordingly, I retired as a senior executive from a large aerospace corporation and moved my family (wife, SIL, daughter ,and four grandchildren to 80 acres of undeveloped land in a rural river valley. We lived in cheap repossessed mobile homes while building two houses, barns, shops, and other buildings. We did all the construction ourselves including plumbing and electrical wiring.

        Our first priority when we moved to the valley was earning acceptance. We joined the Church, volunteer fire department, Grange, 4-H, Civil Air Patrol and Lion’s Club. We showed up for every work activity and took direction from the ‘old timers’. Today, I am an Elder in the Church and a leader in the Grange, my SIL is the fire chief and de facto mayor, one grandson is now a senior leader in the local CAP squadron and my daughter is chairman of the county Republican committee. I cannot over emphasize the importance of developing relationships. My family standing alone does not have enough skills and ‘fire power’ to survive the imminent economic collapse.

        The second priority was to develop essential skills. We home schooled the grand children so they learned framing, plumbing, wiring, etc. while we were building our facilities. The older grandson is working as an IT professional but has a long list of auto mechanic certifications to go along with his MS certifications. The second grandson is a mechanical engineer and community college instructor in robotics. The third grandson is an electrician and pursuing a degree in technical management. MY grand daughter is the animal vet. When I have to lance an abscess, mid-wife a calf, or castrate a steer she’s my assistant. Those tasks are too ….. for my grandsons. We bought old worn out farm equipment and learned to rebuild them. My SIL recently acquired some old metal working equipment and is learning machinist skills. We do not have time or funds for golf, eating out, cruises, or other popular past times.

        The third priority was to acquire essential tools. We envision at best a 1900-1930 lifestyle and technology availability. Therefore we are acquiring tools and equipment that accommodate the life style of that era. For example, we keep a 1977 F-250 pickup in prime condition along with a 1955 manufactured hay baler. Skill development complements our tool acquisition.

        Fourth priority is investment in well-watered arable land. In my opinion, no investment is superior to investing in food production. Precious metals can be of value if converted to food production/protection items early in the panic that will ultimately occur. In these comments, I will not dwell on ‘protection’, but I will say that desperate men do desperate things and we should plan accordingly.

        In the time that I can spare from caring for an invalid wife, managing 18-22 beef cattle, caring for the family garden and orchard, and participation in Church and Grange, I try to warn the county of the imminent economic collapse. I do this by sending an occasional email to a long list of people, frequently call the local call-in radio program, write letters to the editor of the county news daily, and speak at public gatherings. As a result, many in my sphere of influence are taking action, and many others will be postured to take action as the unwinding becomes more obvious. Hopefully the collapse will be slow enough that they can react.

        • T.G. you’re the same age as my parents, that sounds like a trip to my grandma’s farm when I was a kid. I picked up maybe half of those skills growing up – we moved from the city back to country in the early 1970s, a sturdy house minus a roof after seven years of being empty, a little over three acres of ground. My health is poor and I have other matters I tend to with an eye on our collective future, but I wish I was in a place where I could apply my farm kid skills again …

        • edpell says:

          Bravo on all you and your family are doing to prepare.
          –from Hudson Valley Engineer unemployed since 2008 not to worry the Egyptian engineers have it covered and for 10 times less

        • Thanks for your inspiring comment. By my calculations, you will be turning 81 this year. You have done a lot.

          I agree that connections are important. The way things work together in this country these are often church and organizations such as the Grange. I am a member of a Lutheran Church, and would continue to be, even if I didn’t believe more than 2% of what is taught. There are few other equivalent organizations, especially if one is middle aged or older.

        • Paul says:

          Yours is an incredibly inspiring story T.G. – we are nowhere near as prepared but are striving to do many of the things you have already accomplished.

          We moved to a village in the mountains of Bali in 2008 expecting a crash but only recently understand that the nature of the crash was not financial – that a reset would happen eventually – we now know there will be no reset.

          This blog has been tremendously useful in obtaining ideas as well as helping to create a sense of urgency in our household.

          I share one of your major concerns which is the fact that nobody in our village is preparing for what is coming — but then they are poor and have no disposable income — on the other hand they are farmers — and they are engineers in their own right — so I suspect they will be well placed to survive.

          We are trying to integrate as much as possible with our village – sharing as much as possible and contributing — difficult to say how we will be treated being foreigners – when people are hungry….

        • Peter S says:

          That’s an interesting and inspiring story. But what could you recommend to someone like myself. I am living away from a very dysfunctional family (which I cannot help, and they don’t help me), which has no house, money or resources. I work very hard and have a little savings, but definitely not enough to buy land. I have few friends, and definitely none I would trust if/when this situation turns as bad as Gail predicts. I have no community or friends.

          In my favour I suppose that I speak English, now Spanish, learning French, and soon I will start German. I have no debts or anything to tie me down (which is a little depressing, but flexible too I suppose). I am in good health, good shape and relatively young. I consider myself practical and sensible, and I learn fast. I’ve saved a little money, and I’m hoping to move to Canada in the middle of next year. (So I’m really hoping that things hold on for 1 1/2 more years.) These days I’m considering my options and making what small plans I can.

          • T. G. Neason says:

            I frequently think about the condition that you describe regarding yourself. I was able to fund our preparations by growing up in poverty (my wife also) which conditioned me to live and teach my family to live frugally*. We home schooled our grand children which enabled us to pass on that perspective of life to them. I empathize with those that for what ever reason do not have the funds to relocate and become some what self sustaining.

            I do not know the culture in which you live or your skills but if I were in your situation I would do the following:
            1. Pick a location that I believe is best suited to cope with the soon to be economic collapse. Canada would be my choice.
            2. Relocate now to the selected place. (The Berlin Jewish merchant faced this issue in 1936. A few took the difficult step to leave everything and in so doing saved their family).
            3. Affiliate with a church and /or several civic organizations in the new location. I would look for organizations that depend on volunteer support. From my experience, people who volunteer to serve others are more generous and trusting. There are many elderly people in those organizations who have a measure of wealth and no close family to help them. They also need help in coping with daily problems (driving, errands, repairs, gardening, nursing, house keeping, etc). They would be willing to pay a trusted acquaintance to help them. The alternative is selling and moving to a retirement home. As you work for them you establish a friendship, alert them to the approaching danger, and continue to develop essential skills. As the economic collapse becomes evident they will need even more help and because of your foresight you will be in a position to help them even more. You both benefit. You bring knowledge skill and strength to meet their needs while they bring capital.
            4. In the new location there may be all sorts of work opportunities available to you that allow you to accumulate the resources that are needed to cope with the future. You may have ethical reservations but there ought to be a lot of good paying jobs available in the Canadian tar sands industry.

            *I married while a PFC in the USMC. Once a month I had duty from Friday morning till Monday night. Rather than going to the PX and buying meals, I took 10 salami sandwiches to work. The 10 cost what one meal at the PX would cost. That is an example of what I mean by frugal living.

          • Peter S says:

            T.G. Neason
            Thanks for your reply. Those are all sensible options, and some of them have occurred to me before and I’m considering/making plans for.

            1) From what I can see and know, yes, I think Canada is a relatively good choice, for several practical reasons. But I’m under no illusion it would be easy or romantic if Gail’s predictions are accurate.
            2) Unfortunately I can’t relocate now (or I would go now). Residency is not easy to get, and the best option available to me is to study in higher education, which need to be able to apply for residency. My plan is to apply to study a master’s next year. I’m considering “Sustainable Environmental Management”. I’m not sure how practical this will be (we don’t exactly know what or how soon our situation will change), but it could put me in touch with like-minded, local, community people with a mind towards a local economy. I also like study (I’m already studying a master’s where I am now), and if we are lucky, perhaps I can put what I learn and find to good use in society and our community in a few years. I can only hope that things do not go south before middle of next year, because I don’t think I have an option on the timing.
            3) Those are all good tips, and I am very keen on being a productive part of the community (wherever I am). I am an English language teacher where I am right now, and I have wanted to give free lessons to homeless, foreign workers etc. for example. I’ll definitely look into those things you suggested when I land.
            4) The oil sands have occurred to me as providing a lot of opportunities locally, so I will look into that too.

            Fortunately I have a lot of experience living frugally. I’m the type of guy who buys 10 pairs of jeans just because they’re on sale at €10 each, fit perfectly, and I get years of use out of each pair. My g/f laughs at me with my hoarding/bulk buying! Eating out is something I almost never do. I’ve never had the chance to grow my own food, so my knowledge is limited, but it’s always been a bit of my dream to have a farm. I’m very used to hard work and keeping aside what I earn.

          • Paulo says:

            Peter S re: location to Canada
            If you want to get in to Canada and make a living, you have to have a trade. University will not do it unless you are a doctor. They won’t let you in with a degree…unless you have a trade. I am Canadian and know lots who have got in recently, and have known quite a few who didn’t. Don’t waste anymore dinero on universtity.

            Regards….Paulo

          • Peter S says:

            Paulo
            Gracias por la información, I’ve seen the list of trades that Canada gives residency permits to. But there’s another way also, which I’m looking at, as they changed the residency system a little a few years ago. If you study there in higher education, you can apply for residency. I’m heading out to work now, but I quickly googled these two links. This is my plan, and it’s not a guarantee, but it looks reasonable. It’s fortunate because I love Canada and love to study anyway.

            http://www.cic.gc.ca/english/information/applications/cec.asp
            http://www.sundaytimes.lk/090503/Education/ed716.html

            If you have any info on this too I’d be happy to hear it.

        • xabier says:

          The emphasis on skills and local integration is so much more sensible than scanning the globe for ‘somewhere to be safe’.

          Spent some tie on my knees today gathering up wood chips for kindling after splitting wood with a sledge hammer. Next task: fixing up water collection and filtration.

          Unfortunately, in this English village, the people who make their way into the local organisations are a truly vicious lot of backstabbers – it’s dismaying.

          However, I may be able to become the footpath inspector as no-one wants to do that, and lots of informal networking can be done bypassing the Church and Parish Council.

          The best man around is the Polish immigrant builder – a fine and honest man with a sense of co-operation sadly lacking among the natives…… not all, of course, but enough to make life more difficult than it need be.

          • Peter S says:

            Unfortunately I am not living somewhere with the option of local integration, nor do I come from somewhere (I have already moved several times, so it’s something relatively easy for me) with that option either. That’s why I need to move, and move to somewhere practical with options and possibly even potential.

            Trust me, I don’t think where I am is somewhere we would want to be if there were a total economic collapse. And neither is where I lived before, or where any of my family live. Regardless of peak oil, or now, Gail’s discussions on natural limits and growth, I wanted to move anyway. And now I can see that peak oil didn’t go away, even moreso.

          • Peter S says:

            By the way, I come from England. I have quite a bit of experience with living in areas like the one you just described. That was why I left. In my experience too, the Polish workers who came to England were the hardest workers and most conscientious people I met.

          • Paulo says:

            Peter S,

            You may obtain a Visa to become a foreign student, but the process of immigration is long and arduous. It used to be that anyone from England could move to a colony, and that colonials could move around within the Empire, but it hasn’t been that way for decades. If you are rich they let you in…or if you have a needed trade, business, or career. I have a buddy who had a degree in environmental science from England. He was also a certified auto-technician. He got in as a mechanic. His wife is an accountant and she got in because she was with ‘the mechanic’. The only suggestion I can make is to start the process right away…as soon as you begin your courses. It takes years because of all the bogus refugee claimants blocking up the sequence. I know a forester from Scotland. He couldn’t get in. It varies.

            You could also arrive and sign up for a pre-apprenticeship trade in addition to your studies. I suggest electrical, heavy duty mechanics, pipe fitting, or welding. Incidentally, my son is an industrial electrician and makes 150-200 thousand per year. With my masters degree the best I ever hit was around 85. Just saying. I was picking up some welding rod the other day and met a highly skilled pipeline welder who makes 250 thousand per year. I know iron workers who also make this much.

            What field? Oil Sands, of course. What else? All the trade shortages are related to the energy boom in construction and should be robust for awhile. Once the infrastructure is in it will drop off. Don’t delay. It is a good place to live with lots of variet to choose from. You will be able to buy land or acreage as long as it isn’t around one of the major cities.

            regards…Paulo

          • Peter S says:

            To Paolo
            Thanks for the information, I appreciate it. I’ll definitely look into the pre-apprenticeship thing while I study, that’s a good idea. It’s most likely that the earliest I can go is next year, I won’t have much of a choice in that. As for the immigration/residency, there’s a scheme for higher education students to apply for a state-sponsored residency. There are a few options there, but I was never expecting it to be a walk in the park. I’m looking into it this month, making calls.

            I don’t know the timing of this thing, or what’s going to happen. But I still think it’s the best option. If things go down in the next few years, there’s a relatively small population and more land/resources. If we get lucky and it takes 10 years or more, their economy has done reasonably well and there are jobs. Either way, I’d like to find a more rural community. I don’t have anywhere to go here in Europe, and I couldn’t count on support from friends/family. (Plus, I like Canada anyway, and has been a goal of mine for a while.) I just don’t see Europe as a safe place to be, especially from my experience here, although I’d like to hear other people’s opinions on that.

      • moraymint says:

        Thanks Gail; interesting stuff … keep up the good work.

        • Danny says:

          Wait a minute Canada? Really? If we have an economic collapse first, the price of a barrel of oil will fall very fast. Look up how much a barrel of oil was in 2008 at anything below $70 a barrel Tar Sands are not economically viable. Also what is Canada going to do for food? I believe they import a lot of it. Danny

    • Richard says:

      And for an entirely different survivalist scenario—-
      http://www.theseagypsyphilosopher.blogspot.com/2014/01/sea-gypsy-tribal-principles.html

  47. Mike Gorn says:

    one or two years away, really? So by 2017 we will know if your theories prove to be true? Are you preparing in any significant material way?

    • Paul says:

      I tend to agree with Gail – MAX two years before this falls to pieces.

      We are currently in defiance if economic gravity through the use of the most desperate of policies – money printing – and record low interest rates.

      I am surprised that we have been able to stop the apple from falling for 6 years now — but all it will — because gravity is ultimately inviolable.

      The toxic blow back from these policies is starting to rip into the global economy — emerging markets could shatter at anytime — I honestly don’t see how the Central Banks can backstop all of the places that are taking on water at the moment – currencies are under massive pressure — from Argentina to Indonesia to Venezuela to Turkey to Thailand — these countries are on the precipice.

      Then we have MASSIVE unemployment issues across the world particularly amongst the youth with rates ranging from 25% to nearly 60% in a number of major economies.

      Abenomics is failing – as expected – inflation due to the lower Yen is destroying the consumer – money printing never works – why would tripling down create a recovery?

      We are seeing increasingly radical parties take the lead – UKIP in the EK – Marine Le Pen in France – Syriza in Greece — these are signals that the populations are growing increasingly angry — that the populist messages of these parties are beginning to resonate as people grasp for hope out of total desperation.

      Recall Hitler was a clown — till things got bad enough in Germany — then he was a saviour.

      The fires are erupting all over the place — I think the Central Banks are approaching the point of not being able to do anything to maintain CONfidence in the system.

      It is impossible to predict what and when the tipping point will be but I absolutely cannot see how we get two more years of relative stability — the machine is busted — every tool in the kit has failed to repair it — yet the gears are grinding and smoking…

      I’d be very surprised if we made it to the end of 2014 without a blow up.

      I know the question was meant for Gail – and I am interested to hear how she is preparing.

      Personally I have accelerated projects on the farm I bought in 08 and getting as much of the land planted as possible — I had a permaculture expert in yesterday to fine tune things — we are working on a plan that focuses on intensive food production. I am also stocking up on things I need to operate this farm – tools etc — and I’ve put in place a fair amount of long life food stuffs to cushion the blow that I think it coming. I also hold some gold but am uncertain if that will be of much use.

      When one is half way down a tunnel and sees a bright light approaching — and one has an epiphany that the light is a speeding freight train – I think it’s best not to ignore the light and flatten oneself against the wall of the tunnel and hope for the best.

      As the article says — some people do not see the light — some can see it but they don’t realize that it is a freight train — so they do nothing.

      But then it might not matter – the train may just crush everyone — including those pressed against the wall.

      • See my comments to moramint regarding how I am preparing for crash (or not preparing).

        I suppose my preparations would be different, if I were a generation younger. I live in the Atlanta area, where the soil is red clay over rock, not far from the surface. Trees grow fine here, but other things, not so well, unless a person adds soil from elsewhere. I don’t have a reasonable option of moving away. Even if I am able to grow crops, my neighbors will not be able to.

        In my graduate student days, I had a poster on one wall that said, “Bloom where you are planted.” I suppose that is what I am doing.

        • Robin Clarke says:

          “See my comments to moramint regarding how I am preparing for crash (or not preparing).”
          Where? There’s no other instance of the word “moramint” on this page.

          • The page doesn’t show all comments at once. At the top and bottom of the comments, there is a link to “Newer Comments”. You may have to click that several times to find the comment you’re after. However, in this case, Gail mean “moraymint”. I found the reply on the first page of comments.

          • Robin Clarke says:

            Thanks!

      • xabier says:

        Paul

        Lots of things in your post, but one thing must be addressed: UKIP in Britain is not in any way radical, nor set to rule. It’s the political expression of the traditional grumpy Englishman in the pub letting off steam, nothing more. Much has gone wrong in Britain, and he is right to complain, but much of it has been heard for centuries past.

        Syriza in Greece, I agree, and Le Penn in France are quite another matter. Fascist conservatives are actually in government in Spain, having gained a huge majority at the last elections. They are counter-balanced by the really unpleasant Left-wing Basque nationalists (the conservative ones are sensible).

        Much of the nastiness in Europe is in fact Left-wing, not Right.

        Immense potential for racial and religious conflict in Europe if economic conditions worsen: it has changed too quickly for the comfort of many, not having an immigration culture like the Americas.

        From Europe we can draw the practical lesson: if you are making survival plans, choose to live where you fit in – in class and colour – and don’t stand out.

        • Paul says:

          Agree UKIP is not radical (I agree with much of what they say – Nigel Farage is always amusing)— but they were a fringe party — and now they are leading the pack.

          I think that this is an indication of desperation — people want change because the old guard is not delivering – the new guard will not deliver either – because it is impossible to deliver what people want – growth and prosperity.

          • Chris Johnson says:

            @ Xabier and Paul:
            Good discussion, both of you, which I appreciate. I think you might also enjoy a recent article by George Friedman, one of the seniors at Stratfor, an intell/think-tank, about the very significant changes occurring in Europe.
            http://www.realclearworld.com/articles/2014/02/04/a_more_assertive_german_foreign_policy.html
            These include Germany, France, Ukraine, Poland, Russia and more. I recall Xabier cautioning me a few months ago that ‘all in Deutschland is not calm’; well, now that their elections are concluded their new government appears prepared to lead a more vigorous policy. Given the continuing problems with southern and southeastern Europe — including Turkey, stability centered on strong alliances among the major players could be very timely.
            Cheers, Chris

      • Jim Lovejoy says:

        Regarding inflation in Japan, 1.3% a year is destroying the consumer?
        What am I missing?

        • Paul says:

          Wages have dropped – inflation is up – energy imports are massively more expensive because the QE has crashed the yen

          Plug in the formula:

          High energy prices = less consumption because everything including the fuel in your tank costs more = layoffs = less tax revenue = government cutbacks,