What is behind the Russia/Ukraine problem? It seems to me that what we are seeing is Russia’s attempt to fix a two-part problem:
- Some oil and gas exporters, including Russia, are not receiving enough oil and gas revenue to meet their needs. They are not able to collect enough taxes to provide the services they have promised to their citizens, plus allow the amount of reinvestment that is needed to maintain production. Russia is starting to experience economic contraction because of the low revenue situation. This situation very closely related similar problems I have written about previously. In one post I talked about major independent oil companies not producing enough profit to provide the revenue needed for reinvestment, and because of this, cutting back on new investment. In another, I talked about the problem of too low US natural gas sales prices, relative to the cost of extraction.
- Some oil and gas importers, including Ukraine, are not using their imported oil and gas in productive enough ways that they are able to afford to pay the market price for oil and gas. Russia gave Ukraine a lower natural gas price because some of Russia’s pipelines cross Ukraine, and Ukraine must maintain the pipeline. But even with this lower natural gas price, Ukraine is behind on its payments to Russia.
If a person thinks about the situation, it looks a lot like a situation where the world is reaching limits on oil and gas production. The marginal producers (including Russia) are being pushed out, at the same time that the marginal consumers (including Ukraine) are being pushed out.
Russia is trying to fix this situation, as best it can. One part of its approach is to make certain that Ukraine will in fact pay at least the European market price for natural gas. To do this, Russia will make Ukraine prepay for its natural gas; otherwise it will cut off its gas supply. Russia is also looking for new customers who can afford to pay higher prices for natural gas. In particular, Russia is working on a contract to sell LNG to China, quite possibly reducing the amount of natural gas it has available to sell to Europe. Russia is also signing a $10 billion contract with Iran in which it promises to construct new hydroelectric and thermal energy plants in Iran, in return for oil exports from Iran. This contract will increase the amount of oil Russia has to sell, and will increase the oil available on the world market. Russia’s plan will do an end run around US and European sanctions.
Gradually, or perhaps not so gradually, Russia’s exports are being redirected to those who can afford to pay higher prices. European Union purchases of natural gas imports have declined since 2008, presumably because they are having difficulty affording the current price of gas, so they are being relied on less for future sales.
The Russian approach seems to include building a new axis of power, including Russia, China, Iran and perhaps other countries. This new axis of power may threaten the US dollar’s reserve currency status. With the dollar as reserve currency, the US has been able to buy far more goods from other countries than it sells to others. Putting an end to the US dollar as reserve currency would leave more and oil and gas for other countries. If purchases by the US are cut back, it will leave more oil and gas for other countries. The danger is that prices will drop too low because of the drop in US demand, leading to lower production. It this should happen, everyone might lose out.
I am doubtful that Russia’s approach to fixing its problems will work. But if Russia is “between a rock and a hard place,” I can understand its willingness to try something very different. It now has more power than it has had in the past because of its oil and gas exports, and is willing to use that power.
The US/European approach to this problem is to loan Ukraine $17 billion to pay for past natural gas bills. The hope is that with this loan, Ukraine will be able to make changes that will allow it to afford future natural gas bills. There is also the hope that the United States can step in with large natural gas exports to Europe and Ukraine. In addition, the US and Europe are trying to impose sanctions on Russia.
I find it very difficult to believe that the US/European approach will work. The idea that the United States can start exporting huge amounts of natural gas to Europe in the near future borders on the bizarre. There are many hurdles that would need to be overcome for this to happen. Installing LNG export facilities is among the least of these hurdles.
In fact, the West badly needs both the oil and gas that Russia is producing, so it really is in a very precarious position. If Russia cuts off exports, or if Russia is forced to cut off exports because of financial difficulties, both the US and Europe will suffer. It is clear that Europe will suffer because of its dependence on pipeline exports of oil and gas from Russia. But the US will suffer as well, because the US is tied closely to Europe by financial ties, and by import and export arrangements with Europe.
Furthermore, the US/European approach involves a great deal of new debt, in an attempt to fix an inherent inability of the Ukrainian economy to afford high energy prices. Without a huge transformation, Ukraine will be in even more financial difficulty when it comes time to pay back the new debt–it will need make debt payments at the same time that it needs to pay for more expensive future natural gas. More debt doesn’t necessarily fix the situation; it may make it worse.
The US powers that be do not understand what Russia (and the world) is up against, so the policies they propose are likely to make the situation worse, rather than better.
Background
We live in a world in which some countries use far more energy products than others. One question that the new proposed axis of power raises is whether this disproportionate share of energy use should be allowed to continue to exist.
Figure 1. Per Capita Energy Consumption, based on BP 2013 Statistical Review of World Energy data and EIA population data.
The United States, Europe and Japan got to the position of using a disproportionate share of energy resources by way of being first with industrialization. This early industrialization set up a pattern of using energy for “frivolous” things–large, heated homes; private passenger automobiles for individual citizens; businesses that were not necessarily as energy-efficient as they might be. In the early days, imports were limited and cheap. As local supplies became depleted, imports rose. The cost of imported oil and imported gas (except for natural gas in the US) rose as well, making the imported fuel harder to afford. Now the early users–that is, the US, EU, and Japan, are the ones struggling to keep up past consumption levels.
In some ways, Ukraine is not too different from the EU is this respect. Ukraine also got to the position of using an above average share of energy resources, by being early in its industrialization, during the era of the Soviet Union. Ukraine, prior to the collapse of the Soviet Union, was using as much as energy on a per-capita basis as the US-Europe-Japan group (Figure 2), because of its heavy industry.
Figure 2. Figure similar to Figure 1, but including Ukraine’s per capita energy consumption as well.
Once the Soviet Union collapsed, Ukraine had huge difficulties: Exports of oil and gas from Russia (upon which Ukraine’s industry depended) collapsed. Ukraine’s industry had been set up under the Soviet-Era model, and didn’t produce the variety of goods, cheaply, that people outside the Soviet Union expected to buy. Ukraine also didn’t have alternate sources of energy supply, if Russian supplies were cut off, because a major source of energy was pipelines of both oil and gas from Russia.
The Ukrainian economy has struggled for many years. Trying to transform it now to be successful competitor in the world economy is likely to be a difficult task. If Ukraine tries to make goods for the world market, it will find itself in competition with Asian competitors. The Asians are hard to outcompete, in part because their labor costs are low (because it uses workers with little energy use, so they can live on low salaries) and in part because their energy costs are low (often from coal). Safety standards are often low as well, adding to their low-cost structure.
If, instead of making goods for the world market, Ukraine decides to specialize in high-priced services, such as financial, medical, or educational services, it will find that it has a great deal of competition from the EU. It will also find that the EU is having difficulty making the service model work. The service model provides little for export, for one thing.
The Russian Energy Situation
Russia’s cost of producing oil is among the highest in the world. Mark Lewis, in a presentation at the November 2012 ASP-USA meeting estimated that Russia needed a price of $115.90 a barrel, to cover both its cost of extraction, plus Russian budget needs from taxes. If costs are rising at, say, 10% per year, the current required cost today would be about $134 barrel. Current oil prices are not much over $100 barrel, which is too low.
Russia is the second largest oil exporter in the world (after Saudi Arabia), exporting approximately 7.2 million barrels a day. We in the rest of the world very badly need Russia’s oil exports to continue, to keep up world oil supply. Without this oil, the world economy would suffer badly.
With respect to natural gas, Russia is the single largest exporter in the world (Figure 3, below), exporting more natural gas than all the Middle Eastern countries combined. The cost of producing Russia’s natural gas is likely very high, because Russia is extracting it from more and more difficult locations. Also, Russia is transporting this natural gas greater and greater distances. New pipelines or LNG facilities are necessary to facilitate this transportation, and these are expensive as well.
Figure 3. Natural gas exports by country, with some countries grouped. Exports from the New World are excluded, since they historically have mostly stayed in the New World. For example, Canada exports natural gas to the United States by pipeline.
When an oil/natural gas exporter doesn’t get enough revenue, there is a danger of recession, or even collapse. A major part of the problem is that oil and gas exporters depend on tax revenue to fund government services, such as roads, schools, and public health. This tax revenue depends on profitability of the companies selling oil and gas. If prices are not high enough, tax revenue suffers. In fact, the 1991 collapse of the Soviet Union took place after a period of low oil prices made it impossible to justify investment in new more-expensive-to-extract fields. Russia began to recover once oil prices began rising again, making new investment oil investments profitable again.
Ukraine has been a particular problem with respect to natural gas exports for Russia, because it has used a significant share of Russia’s natural gas exports, without paying market price for them (Figure 4). In fact, some of the time, it didn’t even pay the below-market price Ukraine had contracted for, for natural gas exports–the reason for Ukraine’s debt to Russia.
Figure 4. Ukraine natural gas imports as a percentage of Russia’s natural gas exports.
Also, with Russia’s total natural gas exports close to flat (see Figure 3), the high exports to Ukraine have limited the amount available to members of the European Union. If Russia bases its economy on the sale of oil and natural gas, it needs a high enough average price, to fund its overall costs.
Ukraine continues to need Russia, because Russia is the source of its oil and gas supplies. The IMF recently approved a $17 billion loan to the Ukraine, to pay off its debt to Russia and for other purposes. The loan is contingent on fiscal reforms, including a 50% increase in natural gas prices, raising taxes and freezing the minimum wage. My expectation is that the Ukrainian situation will spiral downward, with lower and lower energy use (because citizens won’t be able to afford the high cost of energy).
Russia needs the US, because it is having trouble obtaining enough investment capital, because of current low oil prices. It needs to continue relationships with oil companies such as Exxon Mobil, hoping these companies will help provide investment capital. The catch is that they too are having difficulty. Exxon Mobil has reported falling profits for four quarters. The same Exxon article mentions that the company cut capital and exploration costs by 28% as a way of getting income and outgo back into line. So Exxon Mobil is “hurting” as well, for the same reason that Russia is hurting: inadequate oil and gas prices.
To keep income in line with necessary expenditures, Russia has essentially no choice but to insist on higher prices from the country that is a big consumer, but can’t pay its bills–Ukraine. These higher prices are likely to push Ukraine’s economy down further, likely making the IMF loan impossible to repay.
To Which Countries Can Russia’s Natural Gas Be Exported?
The market for Natural Gas imports is somewhat restricted, as shown in Figure 5, below. This chart includes natural gas imports from all sources, including the Middle East and Africa, not just Russia. I have omitted the Americas, because it currently tends to operate as a separate system, with the US, Canada, and Mexico connected by pipelines.
Figure 5. Natural gas imports (excluding new world) by country grouping. FSU is “Former Soviet Union.” Based on EIA data. Chart omits Switzerland and other non-EU European natural gas importers.
When it comes to finding locations for Russia to export natural gas to, the countries of the European Union are a large share of the natural gas market. (In Figure 5, I have omitted a few small European importers that are not part of the EU, and not part of the FSU, such as Switzerland, but this omission should be small.) Ukraine and other Former Soviet Union countries are gradually being squeezed out, because they cannot afford today’s natural gas prices. Asia is growing in its natural gas use. The prices paid in Asia have tended to be higher than in Europe (Figure 6, below), so it is natural for Russia to look to Asia as a growth area for its natural gas exports.
Russia cannot easily walk away from the countries it currently exports to, because it needs natural gas revenue, and the pipelines are already in place.
Can the United States Actually Help Ukraine with Natural Gas?
Ukraine’s big problem with natural gas is that it can’t afford to pay market prices for it. This issue is likely to continue to be a huge problem in the future, regardless of which country is planning to export natural gas to it. Greece has had a similar problem, with inability to pay for natural gas imports from Russia. On my view, Ukraine’s inability to afford natural gas is its number one problem. The problem can be temporarily “papered over” with an IMF loan, but unless there are huge structural changes to the economy, the basic problem won’t be fixed.
Let’s suppose that Ukraine actually finds money to pay for imports. Can the US provide the natural gas imports required? Can it also help with European imports? Many people look at the disparity in natural gas prices around the world (Figure 6), and expect that US can provide natural gas to Europe as well .
Figure 6. Comparison of natural gas prices based on World Bank “Pink Sheet” data. Also includes Pink Sheet world oil price on similar basis.
If a person looks at the situation closely, it is hard to see that US exports will happen in large enough quantity, in a fast enough time frame, to make any difference. I recently wrote a post pointing out some of the issues, called The Absurdity of US Natural Gas Exports. I point out in that post that the United States is currently a natural gas importer. Our own natural gas in storage reservoirs is at record low levels, and there is concern that we may not be able to refill them in time for next winter. The amount of natural gas required by Europe is huge, if it were to try to replace Russia’s contribution. So we are talking about the need for a very large change for the US to be able to help Europe and the Ukraine.
There is one scenario in which the United States might theoretically be able to help Europe. This scenario would require a lot more than putting LNG export terminals in place. In particular, we would need:
- Much higher US natural gas prices than are currently the case, in order to make it economic to extract shale gas that seems to be present, but that is not economic to extract at this time. US natural gas prices would likely need to rise to two to three times current levels, perhaps to current European levels.
- The US economy would need to weather the storm that these higher natural gas prices would cause. Homeowners would find that the cost of heating their homes is much higher, but that their salaries are not any higher. Utilities that use natural gas would find that their sales price of electricity needs to be much higher, affecting both homes and businesses. The US economy would suddenly become much less competitive in the world market place, because of its higher cost structure compared to countries using coal as their primary fuel.
- In order to extract this higher-priced natural gas, we would need to greatly ramp up the number of shale gas wells drilled, perhaps to 10 times the current number of wells drilled per year. Part of the big increase would take place because of the greater total amount of natural gas required. Part of the increase would take place because we would now be drilling wells with lower productivity–partly because of lower monthly output, and partly because of shorter productive lives. Without adding low-productivity wells such as these, there is no way that production can be ramped up as much as required. (This is the reason that higher natural gas prices are needed.)
- To drill this huge number of wells, we would need many more drilling rigs. We would need many more engineers. We would need many more trucks hauling water for hydraulic fracturing fluid. In dry areas, we would likely need to transport the water required for fracking much longer distances than in the past. We would need to dispose of much more waste material, causing potentially many more problems with pollution and with earthquakes. We would need communities willing to put up with all of these problems, in order to help other countries in need of natural gas imports.
- Someone would need to build a huge number of LNG transport ships to carry all of this natural gas. It is not clear whether LNG import terminals would be needed as well–the ones currently in place tend to be underutilized.
- Many more pipelines would be needed, both in the US from the new wells to the terminals, and in Europe, connecting LNG terminals to the new users. Many of these pipelines will be used for only a short period of time, as wells deplete quickly.
- The cost of LNG the US will be able to send to Europe will likely be more expensive than current European natural gas prices, when the combination of the higher US natural gas cost, plus LNG transport cost, is considered. If there are new European natural gas imports, say from Israel, the additional high-priced natural gas from the US may not be needed. It is also not clear that Europeans will be able to afford the new expensive natural gas, either. The high-priced gas will tend to make the European economy shrink, because salaries will not rise to match the new higher costs.
Conclusion
The US approach to the Russia /Ukraine situation reflects a serious misunderstanding of the situation. Russia has little choice but to try to raise the price of products it is selling, any way it can. It needs to cut out those who cannot afford its products, including Ukraine. If Europe increasingly cannot afford its products, Russia needs to find customers who can afford them.
There is little chance that the United States is going to be able to help Europe with its natural gas needs in any reasonable timeframe. Our best chance at keeping the global economy “working” for a little longer is to try to keep globalization working as best we can. This will likely require “making nice” to countries we are unhappy with, and putting up with what looks like aggression.
Policymakers like to think that the US has more power than it really does, and like to encourage stories suggesting great power in the press. Unfortunately, these stories are not true; we need policymakers who understand our real situation.
BBC news tonight, five minute feature on shale oil and gas, very heavily suggesting that it will not be viable _at all_, not merely briefly as in the US. Fault lines seem to be the problem. A report will be published tomorrow on the “potential” but it is emphasised that viability is another matter. Very strong underlying message: “We may not do shale at all.” (We saw a report published last week saying that the UK will run out of oil, coal and gas within five years, France within one.)
Other news, UKIP and populists across Europe have changed the political landscape; Russia set off terror bombs in eastern Ukraine to try and disrupt upcoming elections. The world seems to be changing.
Great post. When the South lost the Civil War and its slaves, it ended a way of life. Reconstruction was a just slow process of replacing slave labor with oil and other fossil energy. Now the whole country is losing its energy slaves. Everything you discuss in this post is really just a manifestation of a civilization trying to hang on to a living arrangement that has no future (ala JHK). Yes, we have a predicament because there will be no Reconstruction. Interesting times indeed! I also think that extinction is in the cards. No species has had more than a ~100,000 years before it overshoots its energy surplus, succumbs to it’s environmental poisons, and dies off. We are about there. I don’t lose sleep over it and the discourse is very stimulating. Thank you and your readers for the continued narrative.
You have a good way of describing our predicament.
I think that you are referring to is something I described back in 2011 in this post: http://ourfiniteworld.com/2011/09/12/european-debt-crisis-and-sustainability/
Like the references to old posts Gail — very useful. I really need to find time to read all of the archives here…
I’m betting that wheat plays a big role in the Russian moves to control Ukraine. I believe Ukraine is a big wheat producing area and wheat shortages are looming with the weather getting more extreme than ever.
(will to power)
Btw I don’t want to sound too corny but I was thinking that there seems to be some parallels between on the one hand FN’s doctrine that “all life is will to power” and that “the will to power is the underlying reality of Nature” and on the other hand the prominent themes that Gail and commenters dwell upon. Just a few examples to occur to me off hand…
1. Peak oil and the lack of alternative sources of power. The lack of affordable fuel, the source literally of power, is about to take down the economy, the financial system, governments and industrial civilization as a whole. The collapse of our civilization? Its all about power, or rather the lack thereof.
2. Energy systems. Civilization is a complex dissipative system, comprised of layers of subsystems and a multitude of smaller DSs, if I got that right. Natural phenomena, including our persons, are all subject to the laws of thermodynamics. Their origin, development and decline are all understood as TDs. Again, its all about power.
TDs are deterministic, if I got that bit right. Free will in the modern sense has no obvious place in that analysis. Free will is an illusion, we are driven by TDs. As FN might say, there is neither free will nor unfree will, just will (power). History as TDs.
3. Politics, geopolitics. Behind all the rhetoric and propaganda, its all about countries (and civilization as a whole) maximising their power, especially access to affordable energy and its consumption.
Class politics are also obviously an attempt to maximise power and the consumption of energy for particular classes.
Am I imagining things or is it all about power in its various senses?
You are right–it is all about power, and balances of power. There is a lot more that is determined than what most of us would like.
By the way, it might be helpful it you spelled out abbreviations. I am guessing
FN = Friedrich Nietzsche
DS = Dissipative structures
TDs = Thermodynamic Structure (?)
Sorry Gail. TDs = thermodynamics.
Very good point
Russia/China just signed the start of many epic deals as we all knew but worse for the US…EIA cuts recoverable California shale estimates by…96%
http://www.businessinsider.com/eia-monterey-shale-2014-5
Thanks for info. Here’s a link to the L.A.Times article:
http://www.latimes.com/business/la-fi-oil-20140521-story.html
U.S. officials cut estimate of recoverable Monterey Shale oil by 96%
“The estimate touched off a speculation boom among oil companies. The new findings seem certain to dampen that enthusiasm.”
I wonder what kind of impact such a big cold-shower will have.
Listen I don’t like to say the US in particular is screwed but when you read this analysis on top of that news it’s game over.
http://www.panorama.am/en/analytics/2014/05/21/pepe-escobar/
Interesting! It is hard to know how all of these things will play out. For now, Russia needs to keep exporting to Europe. But for the longer term, it is certainly in Russia and China’s interests to cut down the role of the United States and perhaps Europe, if there is not enough to go around.
Perhaps those writing the news are not paying attention.
Regarding China-Russia, Yellen can sleep peacefully tonight.
http://rt.com/business/160068-china-russia-gas-deal/
While the biggest contract of the year -or of the decade- is announced in USD amounts, this currency is no longer to fear other currencies, just its own instability. That must be why “The total value of the contract is $400 billion, Gazprom CEO Aleksey Miller said. However, the price of gas stipulated in the document remains a “commercial secret.” I guess both partners had set some secret procedure to use in case USD falls down.
Actually if you check the MSM they say USD….
But I am seeing otherwise:
In a symbolic blow to U.S. global financial hegemony, Russia and China took a small step toward undercutting the domination of the U.S. dollar as the international reserve currency on Tuesday when Russia’s second biggest financial institution, VTB, signed a deal with Bank of China to bypass the dollar and pay each other in domestic currencies.
http://america.aljazeera.com/articles/2014/5/20/russia-china-bankdeal.html
Yeah, I knew about that, and it’s going on the multicurrency path (although just a little step), but this is not a threat to USD, its own problems are far bigger
As we see — the global economy is more fragile than the finest porcelain vase….
Vietnam riots land another blow on the global supply chain
http://www.ft.com/intl/cms/s/0/abc9ba84-e01c-11e3-9534-00144feabdc0.html?ftcamp=published_links%2Frss%2Fcomment%2Ffeed%2F%2Fproduct&siteedition=intl#axzz325Clhqau
Global supply chain collapse is what people have to fear the most. Debt and financial don’t matter because they are abstract concepts invented by man. A car oil filter is not an abstract concept because you can touch and measure it.
Global supply chain collapse -> social unrest -> government collapse -> die off.
It is completely possible to have a collapse without the collapse of financial institutions. With no global supply chain nobody needs financial institutions because there is nothing to buy.
Targets in the Quebec area have a lot of empty selves like pictures below. Same thing with my welding supplier.
http://www.zerohedge.com/news/2014-05-19/14-headshaking-photos-show-target-canada-has-major-problem
The supply chain is going down right now.
If you need some survival gear like this:
http://primuscamping.com/products/omni-fuel-with-6-liter-fuel-bottle -> Only help full during shortage and supply chain disruption.
http://www.amazon.ca/Reliance-Rhino-Pak-Heavy-Container-Medium/dp/B00336SBUE/ref sr_1_2?s sports&ie UTF8&qid 1400680274&sr 1-2
I would suggest that you buy them now.
Sorry this comment went into moderation. I have no idea why. WordPress often picks comments to put in moderation. I have a few key words as well, but I don’t think you hit one.
I agree that the global supply chain is truly a worry.
Have you ever thought of how you’ll shut down your blog site and write a final post to say good bye to the readership before the whole thing fades to black?
I think better for the captain to go down with the ship — keep posting until the grid goes down!
Trying to envision what my day looks like when this unravels — assuming this happens quickly — the power goes off — all communications go dead — gas stations run out of fuel within hours — shops empty.
I suppose I’ll get my small farm team together and explain the situation — and we’ll work out a plan to keep our families fed. And hope that we are not overrun by starving people within days 🙁
I wonder if there will be any attempts to keep some sort of limited broadcast lines open – no doubt most reserves of fuel will be used for maintaining order — perhaps radio broadcasts? I have purchased a short-wave + solar pack to charge it … also quite a few extra batteries…
Not knowing what is going on would be one of the toughest things
Not really. I just expect that we will all lose electricity. Sort of like a heart attack. Everything in cyberspace will be gone.
Write it out on DNA for storage and splice it onto a yeast cell. You will have trillions of copies indefinitely. The real issue, will anyone have the technology to read it?
All that remains now is the announcement that Russia China will trade energy NOT using the USD…. then the fireworks may begin…
If that is the case — does the Deep State accept this new state of affairs (which means America’s free ride is over) — or do they lash out…
Russia Signs China Gas Deal After Decade of Talks
http://www.bloomberg.com/news/2014-05-21/russia-signs-china-gas-deal-after-decade-of-talks.html
Oh?
In a symbolic blow to U.S. global financial hegemony, Russia and China took a small step toward undercutting the domination of the U.S. dollar as the international reserve currency on Tuesday when Russia’s second biggest financial institution, VTB, signed a deal with Bank of China to bypass the dollar and pay each other in domestic currencies.
http://america.aljazeera.com/articles/2014/5/20/russia-china-bankdeal.html
Thanks for the link. Earlier reports were that nothing had been signed (yet).
As anyone who has read The Big Short by Michael Lewis knows there were a few people in finance who warned that a massive crash was coming and made big money off their predictions.
Others including Peter Schiff and Roubini called the crash and emerged as folk heroes after the fact appearing constantly on finance programmes.
Schiff amusingly was laughed at on CNBs http://www.youtube.com/watch?v=sgRGBNekFIw (isn’t that precious)
It’s obvious who had the last laugh in 2008.
Question for Gail (and others) — there are a lot of people with big titles below their names — some of them are even smart — who would disagree with your analysis of the situation.
I am sure that most people on this forum have discussed this situation with people who strongly disagree with the premise that the end of cheap oil is the problem — and that civilization as we know it is about to end
What I wonder is how others will feel when the SHTF — obviously it will be a Pyrrhic victory (Gail will not be appearing on CNBs because CNBs will not exist — nor will television of course) — and unlike those in The Big Short who made fortunes off predicting the 08 crash nobody will be making money shorting this beast
When the day comes that things start to unravel in haste — how will you feel?
Personally, I think I will feel very little in terms of ‘I was right’ — but I think I will wonder if some of those people whom I have had ongoing discussions on this subject will at some point have an epiphany and come to the conclusion that oil was the problem after all… and that they will regret not having taking even minimal measures to be able to survive.
I have suggested to immediate family members and a few others that even if they do not buy into the end of growth scenario — surely they must see something bad is coming (printing money is not a viable economic system) — and that when the crash comes they should consider an emergency plan (at least stock your apartment with canned food, rice, water etc…) — because most people will likely perish in the first week or two as BAU seizes up — those who make it through that period might stand a chance.
So I suppose I will feel sad knowing that people I care for have done nothing at all to prepare — that they will likely be suffering and dying in horrific circumstances.
But then I will also be overwhelmed with dealing my own reality (who knows – I may wish that I had done down in the initial wave…).
I can only do what everyone else does: take one day at a time. I don’t expect that being able to see what will happen in advance has a huge amount of benefits. I don’t expect anyone to recognize me for my efforts.
If I really wanted to save myself, I would be working on that instead of writing posts. I have done a few small things, but I have not devoted my life to finding a way around the “bottleneck.”
I can only do what everyone else does: take one day at a time. I don’t expect that being able to see what will happen in advance has a huge amount of benefits. I don’t expect anyone to recognize me for my efforts.
If I really wanted to save myself, I would be working on that instead of writing posts. I have done a few small things, but I have not devoted my life to finding a way around the “bottleneck.”
I don’t think a person can prepare for what lies ahead. I feel this is especially true for heavily industrialized nations like the US and Europe. We are too reliant on industry to survive. I feel the only folks who will make it through the “bottleneck” are indigenous tribes in remote areas of the world who already live with little or no reliance on modern industry for survival.
That is a big part of the problem. Even if I grow food, how can one person survive if the majority do not? Too many for the amount of resources available.
Agree.
I am of two minds…. one is to stay the current course (permaculture) … and hope the hordes don’t descend….
The other is to buy a decent sized sail boat (they have what are known as phinisi cargo boats here… el cheapo…) jam it full of food and water — then head offshore to somewhere calm and hold tight (unlikely any pirates would bother us — no fuel + they’d be more likely to going after food sources on land)
Then once the die-off was complete — surely there would be plenty of arable land available — just pick a spot and get on with it.
I think the key will be surviving the initial onslaught … the generation that does survive might not have it so bad — there will be all that junk left behind by 7.2 billion people (every tool you can imagine…) that would soften the blow…
Of course in my fairy world of ifs and buts — I have left out one Big Problem. What about the thousands of spent nuclear fuel ponds…. who keeps those cool?
Let’s check that back into the dark closet….
Maybe I need to reinvent myself as a buccaneer! I wonder where I can buy a sword….
I am afraid the population won’t go down fast enough for your plan to work. If the population gets weaker, or even if water simply gets polluted, there is likely to be a disease problem that will take quite a few, particularly those in poorer health.
Darn! Back to the drawing board…
Surely there has to be some viable solution to this …. ah what about a time machine — go back to 1950… and by time 2000 comes around again I’ll be too old to care. I’ll run this by my engineer mate this evening — we call him Mickgyver… he can do just about anything.
And then I can sell seats to all the bankers and other ‘players’ for 1 million — no no — 1 billion dollars…
I’ll be richer than Bill Gates, George Soros, Mark Zuckerberg, the Saudi Kings, and Michael Jordan — combined.
This is just so exciting.
(natural selection post-collapse)
There is some reason to hope! A new study from the University of South Carolina finds that the black plague improved the health and life-span of populations. I guess that Nature itself will reverse the dysgneic impact of modern medicine, the welfare state and society generally. We will be subject to a hard life and all manner of epidemics — but future generations will be healthier (and happier?) for it. Perhaps we can trust natural selection to do its own thing post-collapse.
http://www.sciencedaily.com/releases/2014/05/140507211415.htm
A new study suggests that people who survived the medieval mass-killing plague known as the Black Death lived significantly longer and were healthier than people who lived before the epidemic struck in 1347…
Released Wednesday (May 7) in the journal PLOS ONE, the study by University of South Carolina anthropologist Sharon DeWitte provides the first look at how the plague, called bubonic plague today, shaped population demographics and health for generations…
• the 14th-century Black Death was not an indiscriminate killer, but instead targeted frail people of all ages;
• survivors of the Black Death experienced improvements in health and longevity, with many people living to ages of 70 or 80 years, as compared to pre-Black Death populations;
• improvements in survival post-Black Death didn’t necessarily equate to good health over a lifespan, but revealed a hardiness to endure disease, including repeated bouts of plague; and
• the Black Death, either directly or indirectly, very powerfully shaped mortality patterns for generations after the epidemic ended.
(Again my apologies for the drunken outburst the other night.)
What doesn’t kill you makes you stronger; on the level of the whole humans species, of course, in the case of Black Death (for the individual people, it was a different story…).
If same kind of pandemic event was to happen before collapse, I guess there woud be a big difference depending on where you live: in rich countries there are systems to prevent widespread of the disease, while in poor countries, well… see what is happening with AIDS, Ebola, etc…
Once the SHTF, such distortion will probably tend to decrease, maybe even to reverse: with medical structures down, people from rich countries, who have weaker immunological system, are likely to see bigger death-rates (whatever strength of the virus(es) attacks are, yet, pandemic or not).
“What doesn’t kill you makes you stronger; on the level of the whole humans species, of course, in the case of Black Death (for the individual people, it was a different story…).”
Well spotted. There are fascinating parallels between FN and Darwin. He seems to have really thought through Darwinism hiking around the foothills and lakes of the alps.
Anyway, the tendency of epidemics to strengthen the race/ species also fits with FN’s idea that things paradoxically tend to originate in their opposites, eg. good from evil, health from illness, life from death. Sickness and death, in epidemics and generally, eradicate the frail, and lead to a healthier, longer living breed.
I guess that charity, the support of the frail, can then be interpreted as an attempt to originate good from “good”, whereas good actually originates in evil. Like, we have all of our faculties (or not), our brains, hands, all parts, because Nature (naturally) selected those traits when everyone who lacked them died out.
But on the other hand, we had to survive at all, and no doubt mutual aid contributed something to that, which I guess all implies some form of mutual aid that should remain generally true to natural selection.
Yes, competition and cooperation are equally important; their respective proportions are connected to the r/K systems.
We often tend to consider the competition only, but the cooperation is also very necessary, and one can observe it at many levels: within a species (groups of individuals), between two species (eg. bees and trees), within a body (our cells cooperate with each other), …
Cooperation can reach very high levels, as we can see in some forms of symbiosis (eg. lichen which is fungus+alga). Some even think that the mitochondria inside each of our cells is an evolution of a bacteria that formerly lived separately.
The wikipedia article “Symbiosis” is quite good; quote from it:
The biologist Lynn Margulis, famous for her work on endosymbiosis, contends that symbiosis is a major driving force behind evolution. She considers Darwin’s notion of evolution, driven by competition, to be incomplete and claims that evolution is strongly based on co-operation, interaction, and mutual dependence among organisms. According to Margulis and Dorion Sagan, “Life did not take over the globe by combat, but by networking.”
http://en.wikipedia.org/wiki/Symbiosis
“She considers Darwin’s notion of evolution, driven by competition, to be incomplete and claims that evolution is strongly based on co-operation”
Hmm, arguably cooperation is a form of competition. If two people cooperate and thus defeat two people who do not, then they have competed and won. Nature then gradually selects cooperative traits. But it still comes back to competition and natural selection: likely the problem arises when we try to make cooperation universal (wellbeing for all, universal rights etc.) and we work against the principles of competition and selection.
(I have not heard of r/K systems btw, something to look up)
Interspecies symbiosis does not seem to be the same thing as intraspecies cooperation.
“Some even think that the mitochondria inside each of our cells is an evolution of a bacteria that formerly lived separately”
The human genome contains many genes obtained from bacteria but the transfer tends to be harmful. Again it is not particularly helpful to bypass the natural selection of the species.
http://www.the-scientist.com/?articles.view/articleNo/36108/title/Bacterial-DNA-in-Human-Genomes/
A team of scientists from the University of Maryland School of Medicine has found the strongest evidence yet that bacteria occasionally transfer their genes into human genomes, finding bacterial DNA sequences in about a third of healthy human genomes and in a far greater percentage of cancer cells. The results, published today (20 June) in PLOS Computational Biology, suggest that gene transfer from bacteria to humans is not only possible, but also somehow linked to over-proliferation: either cancer cells are prone to these intrusions or the incoming bacterial genes help to kick-start the transformation from healthy cells into cancerous ones…
http://www.ploscompbiol.org/article/info%3Adoi%2F10.1371%2Fjournal.pcbi.1003107
Sorry I should also have said that intraspecies cooperation is a strategy of intergroup and interspecies competition. Like wolves cooperate so that they can hunt, kill and eat other species. Humans cooperate and eradicate other species at an horrific rate. I do not deny that symbiosis plays a role in evolution but it is not the central mechanism that drives evolution.
Isaias presented the extreme “ideal” of pacifism, which must be considered totally unnatural and contrary to evolution. Arguably Jesus presents the same extreme in the human realm. Nature is not really like that and if we have healthy natural instincts then we should not even want it to be like that.
6 The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them.
7 And the cow and the bear shall feed; their young ones shall lie down together: and the lion shall eat straw like the ox.
8 And the sucking child shall play on the hole of the asp, and the weaned child shall put his hand on the cockatrice’ den.
9 They shall not hurt nor destroy in all my holy mountain: for the earth shall be full of the knowledge of the LORD, as the waters cover the sea.
Western civilization cannot ignore the transfer of unnatural and harmful ideals.
I think that it comes down to that the basic principle of evolution is selection, which relies on successful who live and failures who die. That is the mechanism of evolution and there is no evolution without it. How can there be evolution without selection? How can there be selection without competition and death? That seems to be fundamental to all thinking about evolution. It is not possible to construct a realistic evolutionary theory on the basis of “all things nice.” That is the basic error of all moralistic thought, evolutionary, ethical, social and political. — Good originates in evil…
I agree that cooperation is a form of competition.
I certainly didn’t mean to make it universal; I only suggested that the process itself doesn’t seem to be considered sufficiently.
Selection is not between individuals that are defined once and for all, it’s between different kinds of alliances, which size/structure/.. can be very variable depending on external environment/threats.
For example the wolves are all together when it’s about hunting, but once back home and in absence of external threat, the system of interactions becomes totally different (same for our families, our countries, etc..).
I don’t remember the exact story, but it says that your brother is your enemy until your cousin comes in; then your brother becomes your best ally against your cousin. Then your cousin can become your ally when it’s about dealing with another family, etc.. at different scales.
It’s also potentially changeing over time, as the equilibrium has to adapt to changeing environment.
Reg. “good or bad”, I think it’s total nonsense, as there are so many (all?) situations where the good for one is bad for the other, and depends so much at what scale you consider the situation, space and time.
Even the Black Death had positive consequences; it’s also valid the other way round, e.g. with (over-)population.
Reg. r/K selection, you can have a look at http://en.wikipedia.org/wiki/R/K_selection_theory
Evolution is like thermodynamics: the basic laws seem very simple, but when you start to dig into details and implications it becomes terribly complex; and it’s a danger because you can make mistaken conclusions (e.g. “social Darwinism” which was total misinterpretation).
I agree that the interpretation of situations is a matter of perspective but that does not make “good” “nonsense”. We can understand the “good” in natural terms as whatever contributes to the full development and enjoyment of the natural faculties, toward which every (healthy) creature naturally tends. The “good” is the proper object of the will and frankly if the good is all “nonsense” then why bother doing anything? We do not all have the same interest in a situation however.
Darwin and everyone always understood that groups play a role in evolution. r/K systems may be “terribly complicated” but it begins to sound like lefty feminist nonsense. The attempt to contradict Darwin (and social Darwinism) sounds terribly of this age.
Speaking from a biological point of view, “survival of the fittest” is a tautology. The only way we can define whether is species or organism is fit, is if it survives. If a zebra has longer legs it may be more fit because it can outrun predators better, or it may be less fit because it need more food to support the increased leg muscles. We have no a priori way of knowing.
repeat of an earlier comment
I believe that Norway was hit particularly hard by the Black Death. Its population was no doubt in weakened condition before it hit.
“Its population was no doubt in weakened condition before it hit.”
500 years of Christianity. (Only kidding)
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Gail, I’ve come upon some issue: the LTG graph you’re using is not the original one. In yours, In 2100 we have up-down population, industry, food, services, pollution and resources, while in the original we have population, resources, food, services, pollution and industry at the very bottom. What’s the cause?
The Limits to Growth graph I have been using is Charlie Hall and John Day’s version of the graph, from this paper by the two of them. I had never stopped to check that it matched up with the graph (Figure 35) in the Limit to Growth book.
You are right, though. Industrial output per capita is definitely down at the bottom, in the original at 2100, but much higher in Charlie Hall and John Day’s version.
There is another version of the original graph shown as Figure 7-7 in “Dynamics of Growth in a Finite World.” It is a little different from Figure 35, but mostly that appears to be a difference for publication purposes. It doesn’t match the Charlie Hall / John Day graph either.
Re: Paul Craig Roberts article above
That ties directly into my comments about America’s ‘generally decent government’
As he points out:
“On July 4th all across America there will be patriotic speeches about our soldiers who gave their lives for their country. To an informed person these speeches are curious. I am hard pressed to think of any examples of our soldiers giving their lives for our country. US Marine General Smedley Butler had the same problem. He said that his Marines gave their lives for United Fruit Company’s control of Central America. “War is a racket,” said General Butler, pointing out that US participation in World War I produced 21,000 new American millionaires and billionaires.
When General Butler said “war is a racket,” he meant that war is a racket for a few people getting rich on the backs of millions of dead people. According to the article in the American Journal of Public Health, during the 20th century 190 million deaths could be directly and indirectly related to war.
190 million is 60 million more than the entire US population in the year that I was born.”
In spite of this the propaganda machine continues to convince Americans to die for what? To enrich the elites who control the media which encourages the sheeple to chant USA USA USA — as their sons and daughters march off to slaughter and be slaughtered.
Wake up people — you are cheering for the devil here… you are cheering for a mass murderer.
You are part of a most vile cult.
I know it can be difficult to see this for what it is — particularly if you have been waking up for decades singing God Bless America…
But do you want your son or daughter to die so that so the country can add a few more billionaires to the roll call? Are you ok the endless mass murder that is perpetrated by American soldiers — not to defend America — but to generate more dividends for your masters?
And meanwhile, if you think you are indirectly benefiting from this (and don’t mind all the death and destruction if it means you get a mega mansion and a monster truck) — think again.
Your masters care nothing for you — they care about themselves — they are the ones who shipped your jobs offshore — they are the ones trying to wipe out the middle class.
And remember this — when you have had enough of this crap the NSA is standing by with crowd control.
Imagine if you were to protest against your masters — everyone has said or written something that they don’t want disclosed — could be a nasty comment about a family member — your boss — perhaps an extra marital affair…. it doesn’t have to be criminal…
A quick search of your file will surely bring up what is needed to keep you quiet.
The Deep State is comprised of psychopaths — do not for a minute think they will not throw you under the bus just because you have the same passport — as they have demonstrated they are more than happy to steal from you — just as they steal from weak third world countries.
They are amoral. And they run the show.
I disagree that “they run the show.” Nature runs the show. The hubris of the Deep State will be their undoing. Never before in the history of human existence have we been capable of and interfered so much with genetics, emitted such exotic and toxic pollutants, created new elements on the periodic table and tampered with pathogens capable of wiping out the entire human race. We are in totally uncharted territory. No one has any idea how all this complexity will unwind. To think of ones self as elite and somehow able to predict the long term consequences of this “experiment” is pure folly. The mindset of the Deep State is that they could hide in a bunker for a few months and come out unscathed as lord only knows what kind of horrors would go on above ground. That is simply laughable. Its like having a pyromaniac diffuse a bomb – what could possibly go wrong.
I am afraid you are right. Now we even think that we can properly simulate how climate change works. Unfortunately, I don’t think this is true. When I think of all the mistakes medical science has made (for example, women should take estrogen replacement therapy), the idea that climate change scientists can avoid large errors seems ludicrous. There is a chance they are right, but there is also a big chance that they are missing important variables and mis-estimating variables like carbon from future fossil fuel use.
So true. Science is often surprised at what they consider illogical outcomes and scramble to come up with new theories to explain the discrepancy. I am a meteorologist by training. Short term weather models are actually quite good now; long term models not so much.
“They” don’t exist at all, at least not as an organized, thinking group of individuals. If Deep State exists at all, its merely a complex of self-interested parties, spontaneously organizing, whose allegiances coalesce and disintegrate as needed. There is no “Deep State” chairman of the board and his band of advisers who plan wars and run the NSA. This Deep State fantasy is no more real than the teutonic belief that the Jews secretly ran or manipulated the banking system in order to control the world and drink the blood of good Christian children in medieval Europe.
I think the Deep State is more of a system — although there are certainly some key players who drive the system…
http://billmoyers.com/episode/the-deep-state-hiding-in-plain-sight/
Paul,
You may be right. I wonder if they think of themselves as “the Deep State.”
Do the Koch brothers or Kissinger or Murdoch or Rothschild think of themselves as evil – as part of some sort of malicious Deep State?
I don’t think so — I think they believe that the world is a dangerous place — that it is dog eat dog — and that this calls for what they would refer to as realpolitik…
I think those at the top of the heap in the Deep State in any country refer to themselves as ‘players’ — key people who make the decisions.
I forget who said this: “there is no right or wrong – there are only interests’
Essentially I think that to succeed you must essentially be a psychopath – although they would not refer to themselves in such terms …. just listen to Nylund speak in private — she’d make Tony Soprano blush…. these people are ultimately thugs of course — mafia dons with armies…
I again reference the Albright interview saying it is ok to murder half a million children — normally no Deep State player would not admit that in public (not sure why she did – brain fart?) but I am sure they all believe that this mass murder was accepted.
I suppose the US Deep State is the worst of the lot — but only because they have the biggest army and the most resources to impose their will.
I have no illusions — if the Deep State in Canada had what the US has — they’d probably be just as bad.
And if I had the opportunity to be part of the Deep State would I change things? No way in hell – otherwise I would not rise to that level – if I demonstrated empathy I would be crushed by ruthless competitors.
Many excuse Obama for what he has done saying he didn’t know what he was getting into – I call that total BS – he knew exactly what he was doing – he is the supreme conman.
This is sadly the human condition – the best we can do is try to be diligent, informed, educated and to avoid the propaganda haze that drifts across from the corporate controlled MSM….
Deep State’ is a way in which people can picture to themselves the fact they they are not in control and have no say over geo-politics and macro-economics. Rather Hollywood-ish.
That is my feeling, xabier. Deep State is a way of explaining why 99.9 percent of people feel powerless, but I feel there has always been a Deep State throughout history. Perhaps sometimes more formally than others such as the Masons, or the Teutonic Knights, or the Papal Inquisition.
While I would agree there has always been a ‘deep state’ I would not say that the people have been completely powerless.
Democracies have to some degree been able to control the deep states in some countries – and influence policies.
Of course the deep state does not like that — and we can see that the US Deep State in particular has vociferously attacked democratic institutions chipping away at them year after year.
Don’t like unions telling you what to do? Ship jobs overseas and enact free trade laws.
Don’t like politicians voting against your desires? Bribe them legally via lobbyists.
Don’t like bureaucrats regulating you? Create a revolving door whereby your people are appointed as regulators of your industry — or offer regulators high paying jobs in your industry provided they agree to go soft on regulations while in office.
Don’t like people protesting? Spy on them — collect everything on them — and then if anyone gets out of line — threaten to release what you know about them.
Want to control public opinion? But up the media
When I look at the US I see a country where the Deep State is all powerful — people are of course angry with the corruption and elitism — but what can they do? Their reps ignore them (because they are bought and paid for). Vote someone out? What’s the point – the next rep will probably be worse.
Essentially the US is a fascist state — corporations and special interests own the country – the people are along for the ride – they have ZERO influence.
What amuses me is that many (most?) still think the American government is good — that it is democratic.
I really do not understand why people continue to vote — surely if you feel powerless the best thing would be for people simply not to vote at all? Wouldn’t accomplish much other than to make a statement.
The only way to deal with a Deep State that is out of control? — Well … for that you have to look to the French for an example.
Good point, Greg.
Greg
Emerging from bunkers to rule the world again. It’s rather like the Austrian generals who thought that they could have a nice, neat, little war against Serbia in 1914, get lots of medals, warn off the Russians and get back to business as usual for the Hapsburg Empire with all problems resolved for a while. Small war, complex system.
War involving major players in this day and age almost certainly means nukes… which would be bad enough — but that would completely collapse the global supply chain which would quickly mean the end of oil and gas — and pretty much everything else.
WW3 = the End of the World.
Doesn’t mean it won’t happen… the psychopaths in the Deep State might think they can win….
I just don’t see how the Deep Staters could talk the military leadership into launching nukes without a first strike from the other side. Clearly a first strike would not be in anybody’s best interest. How would the Deep Staters use the raw power of money to talk the President, the Joint Chiefs, the Senate, anybody into releasing the codes? Realistically, I don’t see how this plays out. Although I agree with Paul that once a conflict gets started it would be hard to keep it from going nuclear after one side clearly begins to lose.
Agree – it is in nobody’s interest for this to happen. I am inclined to think that if China and Russia have decided to end the USD reserve currency that the US is powerless to do anything about it — they will recognize their day is the sun is up and accept the situation… (of course the USD is the least of anyone’s worries!)
Here’s some good info on just how dire the economic situation is in the US — of course China and Russia are dire too — but do you stay on the Titanic with a guarantee of death — or do you leap onto some floating debris and hope you might be saved?
Sometimes a chart is worth a thousand words, and this is one. Real Median household income peaked way back in 1999 at $56,000 and by 2012 it was down 9%—an unprecedented decline. It goes without saying that Washington’s Keynesian ministrations on the money printing and national debt front didn’t much help.
In fact, the Fed’s balance sheet has expanded from $450 billion to $4.4 trillion during that period or by nearly 10X. Likewise, the national debt has nearly quadrupled to $17 trillion during the same period.
As also shown in the table below, 30 states have experienced a 10% or more decline since their peak year, and in 10 states the decline has ranged from 19% to 27%. Those figures do not represent merely a dip or even an extended setback. They amount to a devastating shrinkage in the standard of living being experienced by tens of millions of households.
Yet the mainstream narrative blathers on that the business cycle expansion is back on track and that last month’s numbers were a tad better than the month before. The table below says that’s all Keynesian bread and circuses—-the fleeting uptick interval between the serial bubbles and busts that our Washington overlords have condemned the people to endure.
http://davidstockmanscontracorner.com/the-keynesian-economy-in-one-chart-peak-median-real-income-in-usa1999-30-states-2004-or-earlier-washington-dc2012/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Wednesday
Militarist Bunkum — Paul Craig Roberts
In the 21st century Americans’ worst enemies are not al Qaeda, Iran, Russia, and China. America’s worst enemies are our own presidents who have declared repeatedly that the orchestrated “war on terror” gives them the right to set aside the civil liberties guaranteed to every citizen by the US Constitution.
Read more: http://www.paulcraigroberts.org/2014/05/19/militarist-bunkum-paul-craig-roberts/
Well… actually … the president is just a front man so he should not be blamed for the policies… it’s the Deep State — which is the real power in America — that is to blame
Geez, a year ago the term “Deep State” hardly existed. Now its bandied about as if it was an established scientific fact. Can’t we go back to the good old military industrial complex, instead? Government and business have always colluded since the beginning of history. There is nothing new under the sun here.
‘Deep State’ is not a new term — as Moyers indicates in the preface to his discussion in the video.
And the Deep State is more than the Military Industrial complex… the military —and the industries that feed off of the war machine — are only one of many players…
I traded emails with Paul Roberts some months ago — he refers to ‘they’ — I asked him who ‘they’ referred to… his response below
I take that as the Deep State is driven by wealthy families and individuals who are able to exert influence — but the ultimate power would lie with those who head up the groups Roberts mentions — they are the ones who determine US policy (not Obama – not Congress – not the Senate).
Amusingly a good friend who was a professor at a top US school mentioned once that she had a grad student whose family was one of the wealthiest in India — she asked her one why she did not run for public office…
Her response — oh why would I bother to do that — we just pay those people to get the things we want done done.
It’s the same the world over — some places worth than others of course…. I would suggest the US is by far the worst — because to my knowledge, the US is the only country that has legalized bribery (you can bribe so long as the money is channeled through a registered lobbyist)
They are (1) the military-security complex, which includes various secret black op groups, (2)Wall Street and the financial sector, (3) the Israel Lobby, (4) Agribusiness, (5) energy, mining, and timber.
Influential families can be found in all of these areas. However, individual families have no Navy SEALs, black-op assassins, drones, prosecutors, and cannot match the financial power of Wall St.
Some believe that the Rothchilds control the world. No doubt the Rothchilds like to think that they do, but it would be easy for the CIA to take them out.