In today’s world, we have a huge amount of debt outstanding. Academic researchers Carmen Reinhart and Kenneth Rogoff have become famous for their book This Time is Different: Eight Centuries of Financial Folly and their earlier paper This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. Their point, of course, is that the same thing happens over and over again. We can learn from past crises to solve our current problems.
Part of their story is of course correct. Governments have gotten themselves into problems with debt, time after time. This is happening again now. In fact, the same two authors recently prepared a working paper for the International Monetary Fund called Financial and Sovereign Debt Crises: Some Lessons Learned and Some Lessons Forgotten, talking about ideas such as governments inflating their way out of debt problems and pushing problems off to insurance companies and pension funds, through regulations requiring investment in certain securities.
Many seem to believe that if we worked our way out of debt problems in the past, we can do the same thing again. The same assets may have new owners, but everything will work together in the long run. Businesses will continue operating, and people will continue to have jobs. We may have to adjust monetary policy, or perhaps regulation of financial institutions, but that is about all.
I think this is where the story goes wrong. The situation we have now is very different, and far worse, than what happened in the past. We live in a much more tightly networked economy. This time, our problems are tied to the need for cheap, high quality energy products. The comfort we get from everything eventually working out in the past is false comfort.
If we look closely at the past, we see that in some cases the outcomes are not benign. There are situations where much of the population in an area died off. This die-off did not occur directly because of debt defaults. Instead, the same issues that gave rise to debt defaults, primarily diminishing returns with respect to food and other types of production, also led to die off. We are not necessarily exempt from these same kinds of problems in the future.
Why the Current Interest in Debt Levels and Interest Rates
The reason I bring up these issues is because the problem of too much world debt is now coming to the forefront. The Bank for International Settlements, which is the central bank for central banks, issued a report a week ago in which they said world debt levels are too high, and that continuing the current low interest rate policy has too many bad effects. Something needs to be done to normalize monetary policy.
Janet Yellen, Federal Reserve Chair, and Christine Lagarde, managing director or the International Monetary Fund, have also been making statements about the issue of how to fix our current economic problems (News Report; Video). There is the additional rather bizarre point that back in January, Lagarde used numerology to suggest that a major change in policy might be announced in 2014 (on July 20?), with the hope that the past “seven miserable years” can be followed by “seven strong years.” The IMF has talked in the past about using its special drawing rights (SDRs) as a sort of international currency. In this role, the SDRs could act as the world’s reserve currency, be used for issuing bonds, and be used for setting the prices of commodities such as gold and oil. Perhaps a variation on SDRs is what Lagarde has in mind.
So with this background, let’s get back to the main point of the post. How is this debt crisis, and the likely outcome, different from previous crises?
1. We live in a globalized economy. Any slip-up of a major economy would very much affect all of the other major economies.
Banks hold bonds of governments other than their own. If a major government fails to make good on its promises, it can affect other governments as well. Smaller countries, like Greece or Cyprus, can be bailed out or their problems worked around. But if the United States, or even Japan, should run into major difficulties, it would affect the world as a whole. See my post, Twelve Reasons Why Globalization is a Huge Problem.
2. Our problem now is not simply governmental debt; it is debt of many different types, affecting individuals and businesses of all kinds, as well as governments.
In the studies of historical debt by Reinhart and Rogoff, the focus is on governmental debt. Now there is much more debt, some through banks, some through bonds, and some through less traditional sources. There are also derivatives that are in some ways like debt. In particular, if there are sharp moves in interest rates, it is possible that some issuers of derivatives will find themselves in financial difficulty.
There are also promises that are in many ways like debt, but that technically aren’t guaranteed, because legislatures can change the promised benefits whenever they choose. Examples of these are our current Social Security program and Medicare benefits. Citizens depend on these programs, even if there is no promise that they will continue to exist in their current form. With all of these kinds of debt and quasi-debt, we have a much more complex situation than in the past.
3. Our economy is a self-organized system that has properties of its own, quite apart from the properties of the individual consumers, businesses, governments, and resources that make up the system. Circumstances now are such that the world economy could fail, even though this could not happen in the past.
I recently wrote about the nature of a networked economy, in my post Why Standard Economic Models Don’t Work–Our Economy is a Network. In that post, I represented our networked economy as being somewhat like this dome that can be built with wooden sticks.
Years ago, when a civilization collapsed, the network of connections was not as dense as it is today. Most food was not dependent on long supply chains, and quite a bit of manufacturing was done locally. If one economy collapsed, even a fairly large one like the Weimar Republic of Germany, the rest of the world was not terribly dependent on it. Figuratively, the “hole” in the dome could mend, and over time, the economy could strengthen and go on as before. We cannot count on this situation today, however.
4. Fossil fuels (coal, oil and natural gas) available today are what enable tighter connections than in the past, and also add vulnerabilities.
Early economies relied mainly on the sun’s energy to grow food, gravity to help with irrigation, human energy and animal energy for transport and food growing, wind energy to power ships and wooden windmills, and water energy to operate water wheels. Wood was used for many purposes, including heating homes, cooking, and making charcoal to provide the heat needed to smelt metals and make glass.
In the past two hundred years we have added fossil fuels to our list of fuels. This has allowed us to make metals in quantity, as well as concrete and glass in quantity, enabling the development of much technology. The use of coal enabled the building of hydroelectric dams as well as electrical transmission lines, thus enabling widespread use of electricity. Fossil fuels enabled other modern fuels as well, including nuclear energy, and the manufacture of what we today call “renewable energy,” including today’s wind turbines and solar PV.
Of the fossil fuels, oil has been especially important. Oil is particularly good as a transport fuel, because it is easily transported and very energy dense. With the use of oil, transport by smaller vehicles such as cars, trucks and airplanes became possible, and transport by ship and by rail was improved. Such changes allowed international businesses to grow and international trade to flourish. Economies were able to grow much more rapidly than in the pre-fossil fuel era. Governments became richer and began offering education to all, paved roads, and benefits such as unemployment insurance, health care programs, and pensions for the elderly.
Thus, fossil fuels enable a very different lifestyle, and very different governments and government programs than existed prior to fossil fuels. If something were to happen to all fossil fuels, or even just oil, most businesses would have to cease operation. Governments could not collect enough taxes to continue functioning. Very few farmers would be able to produce food and transport it to market, because oil is used to transport seeds to farmers, to operate machinery, to operate irrigation equipment, to transport soil amendments, and to create herbicides and pesticides.
This situation now is very different from the past, when most food was produced using human and animal labor, and transport was often by a cart pulled by an animal. Before fossil fuels, even if governments collapsed and most people died off, the remaining people could continue growing food, gathering water, and going about their own lives. If we were to lose oil, or oil plus electricity (because oil is required to maintain electric transmission and because businesses tend to close when they are missing either oil or electricity), we would have a much harder time. Most of our jobs would disappear. Banks wouldn’t be able to operate. Our water and sewer systems would stop working. We would find it necessary to “start over,” in a very different way.
5. Because of the big role of debt today, economic growth is essential to keeping the current economic system operating.
It is much easier to pay back debt with interest when an economy is growing than when it is shrinking, because when an economy is shrinking, people are losing their jobs. Even if only, say, 10% lose their jobs, this loss of jobs creates many loan defaults. Banks are likely to find themselves in a precarious position and are likely to cut back on lending to others, making the situation worse.
If the economy starts shrinking, businesses will also have difficulty. They have fixed costs, including rent, management salaries, and their own debt repayments. These costs tend to stay the same, even if total revenue shrinks because of an economic slowdown. Because of these problems, businesses are also likely to find it increasingly difficult to pay back their own debt in a recession. They are likely to find it necessary to lay off workers, making the recession worse.
If economic growth is very low, this lack of growth can to some extent be covered up with very low interest rates. But such very low interest rates tend to be a problem as well, because they encourage asset bubbles of many sorts, such as the current run-up in stock market prices. It is not always clear which bubbles are being run up by low interest rates, either. For example, it is quite possible that the recent run-up in US oil extraction (see Figure 4, below) is being enabled by ultra-low interest rates debt (since this is a cash-flow negative business) and by investors who a desperate for an investment that might yield a slightly higher yield than current low bond yields.
Actually, the current need for growth to prevent defaults is not all that different from the situation in the past 800 years. In Reinhardt and Rogoff’s academic paper mentioned above, the authors remark, “It is notable that the non-defaulters, by and large, are all hugely successful growth stories.” Reinhardt and Rogoff didn’t seem to understand why this occurred, however.
6. The underlying reason regarding why we are headed toward debt problems is different from in the past. We now are dependent both on oil products and electricity, two very concentrated carriers of energy, instead of the more diffuse energy types used in the past. Our problem is that these energy carriers are becoming high-cost to produce. It is these high costs (a reflection of diminishing returns) that lead to economic contraction.
This time, in order to continue economic growth, we need a growing supply of very high-quality energy products, namely oil products and non-intermittent electricity, to support the economy that we have built. These products need to be low-priced, if customers are to afford them. Thus, it should not be surprising that economic growth in the past seems to have been driven by a combination of (1) falling prices of electricity as we learned to more efficiently produce it, and (2) continued low prices for oil.
According to Ayres and Warr (Figure 2), power stations in 1900 converted only 4% of the potential energy in coal to electricity, but by 2000, the conversion efficiency was raised to 35%. This improvement in efficiency allowed the continuing decrease in electricity prices. With lower prices, more individuals and businesses were able to afford electricity, and more technology using electricity became feasible. Cheap electricity allowed goods to be produced at prices that workers could afford, and the system tended to grow.
For oil, the price of oil remained relatively flat in inflation-adjusted terms for a very long time, even as engineers developed ever-more-efficient devices to use that oil.
We ran into our initial problems extracting oil cheaply in the early 1970s, after US oil production started to decline (Figure 4).
Back in the 1970s, we were able to work around the price spike by bringing oil production online in several additional places, including the Alaska, the North Sea, and Mexico. Unfortunately, those areas are now declining as well. Thus, we are increasingly forced to extract oil from areas that are high priced either (a) because of high extraction costs (such as the tight oil now being extracted in the United States) or (b) because of high indirect costs (such as the need for desalination plants and food subsidies in the Middle East). These can only be funded if oil prices are high, allowing governments to collect high levels of taxes.
There is considerable evidence that high oil prices are associated with recession. The Great Recession of 2007-2009 was associated with a huge spike in oil prices. I have written about the way high oil prices contribute to recession in a peer-reviewed article published in the journal Energy called Oil Supply Limits and the Continuing Financial Crisis. James Hamilton has shown that has shown that 10 out of 11 US recessions since World War II were associated with oil price spikes. Hamilton also showed that the effects of the oil price spike were sufficient to cause the recession of that began in late 2007.
Now the cost of oil production is high, and electricity prices have stopped falling. We read U. S. electricity prices may be going up for good, from the L. A. Times. It should be no surprise that economic growth is now a problem.
7. In historical periods, defaults were mostly associated with the transfer of ownership of various productive assets (such as land and factories) from one owner to another. Now, we are vulnerable to changes that could ultimately cut off oil and electricity, and thus bring the system down–not just transfer ownership.
The kinds of things that could bring the system down are diverse. They include:
- War in the Middle East that would vastly disrupt oil exports. We do not have alternative suppliers–the world would have to do without part of its supplies. We are vulnerable now, because oil exporters are getting “squeezed” by prices that have not risen substantially since 2011. This makes it harder for Middle Eastern countries to fund their budgets, making wars and civil disorder more likely.
- A spike in oil prices, perhaps caused by a war in the Middle East, that would vastly disrupt oil exports. Oil importing countries would head back into recession, with many layoffs. Governments are in worse shape for fighting this situation than they were in 2007-2008.
- An increase in interest rates. While Quantitative Easing and Zero Interest rate policy may not look like they are doing much, an increase in interest rates would not work well at all. With higher interest rates, governments would owe more in interest payments, so would need to raise taxes (leading to recessionary effects). The monthly payments required for buying high-priced goods (from cars, to houses, to factories) would rise, cutting back on demand, also tending to lead to recession.
- A decrease in lending, or even a failure of debt to keep rising, would also be a problem. Janet Yellen’s recent IMF speech highlighted the possibility of using regulation to prevent excessive debt. Unfortunately, increasing debt is very much needed to keep oil prices high enough to enable extraction at today’s high cost levels. See my post The Connection Between Oil Prices, Debt Levels, and Interest Rates. If debt levels drop, we run the danger of oil prices dropping as dramatically as they did in late 2008, when lending froze up.
8. The world is now filled with a large number of people in powerful positions who mistakenly think they know answers to questions, when they really do not. The problem is that researchers tend operate in subject-matter “silos.” They build models based on their narrow understanding of a problem. These models may temporarily work, but as we reach limits in a finite world, these models produce misleading results. The users of these models do not understand the problem and make decisions based on badly flawed models.
Economists do not understand energy issues. They seem to think that their models, which ignore energy issues, are fine. All they need to do is fine-tune regulation, or tweak interest rates, and everything will be fine. Unfortunately, these economic models no longer work, as I explained in a recent post, Why Standard Economic Models Don’t Work–Our Economy is a Network.
In fact, the issue is more basic than just bad models that economists are using. The whole “peer-reviewed paper” system, with its pressure to write more peer-reviewed papers, each resting on prior peer-reviewed papers, is flawed. Models are built and used endlessly, in part because that is the way things have been done in the past. Once an approach is used frequently, everyone assumes it is correct. Models can and do have short term-predictive power, but that fact does not mean that the approach works for the long term.
The problem we are running into is the fact the world is finite. Growth can’t continue indefinitely. The way that the physical world enforces the end to growth is not obvious, until we start hitting the limits. The limits are cost of production limits for oil and for our supply of stable grid electricity. (I have talked about selling prices, but selling prices are not really the limits, in themselves. It is the fact that with higher costs of production, either selling prices must go up, or profits and the ability to invest in new production must go down–that is the problem. Right now, the rising cost of production of oil is being hidden in prices that are too low for oil producers. So many assume we don’t have a problem. The issue of adequate government funding is also mixed into the price/cost of production issue.)
Models that are no longer correct fill every area of study, from actuarial models, to financial planning models, to economic models, to models forecasting future oil and gas production, to climate change models.
Some models are deceptively simple–the idea that the number of years of future production of oil (or gas or coal) can be estimated by [Amount of Resources / Current Annual Production] is a simple model. Unfortunately, this model doesn’t work, because we can never get enough investment capital to extract all of the fossil fuel that seems to be available–the price can never go high enough, and stay high enough. High prices simply bring on recession. See my post, IEA Investment Report – What is Right; What is Wrong.
In fact, it is pretty hard to find any model that continues to work, as we reach limits in a finite world. This is not intuitively obvious. If a model worked before, why wouldn’t it work now? Researchers and well-meaning leaders follow models that sort of worked in the past, but don’t really model the current situation. Thus, we have well-meaning leaders, doing their best to make things better, inadvertently making things worse. In a finite world, everything is “connected” to everything else, so things that look beneficial from one perspective can have a bad outcome viewed another way. For example, a reduction in carbon dioxide emissions from closing coal plants risks major electrical outages is New England and seems likely to raise electricity prices. Such changes push the economy toward recession, and perhaps ultimately toward collapse.
Governments are one area squeezed by higher oil and electricity costs. As governments cut back, whether these cut backs are in education, unemployment benefits, military spending, or healthcare spending, there are indirect effects on the economy as a whole. The problem is that government spending creates jobs. As government spending is cut, it pushes the economy toward contraction–even if part of today’s spending is clearly wasteful. It creates a conundrum–fixing one problem makes another problem worse.
We live in perilous times. We have leaders who think they know the answers but, in fact, they do not. The debt problems we face now are not just overspending problems; they are signs that we are reaching limits of a finite world. World leaders do not seem to understand this connection. It is not even clear that they understand the connection of debt problems to the need for cheap-to-produce, high-quality energy products.
World leaders are nevertheless convinced that they know the answers, based on complex, but very flawed, models. Unfortunately, actions taken based on these models have a good chance of making the situation worse rather than better. For example, trying to tie a world economy closer together, when it is already heading toward collapse, seems like a recipe for disaster.
I find Christine Lagarde’s use of numerology in her January 14, 2014 speech at the National Press Club Luncheon disturbing. Is she trying to signal some “in crowd” to make different decisions, in advance of a big IMF announcement? Or is numerology being used for prediction? Such an approach to forecasting would seem to be even worse than using models based on silos of limited understanding.
Dear Gail and All
The much detested Chris Martenson weighs in with a newly published study of the disaster in the American Southwest more than a thousand years ago.
On Creating a World Worth Inheriting
The article is behind a paywall. He rehearses a number of the reasons why business as usual cannot continue. He tells us that the scholarly study shows that birth rates remained very high right up to the final disaster, which was brought about by fighting over increasingly scarce resources. (End of More would probably say ‘I told you so’).
Closes with the statement that seems to infuriate lots of people here…if we adopt the right attitude, we can live better lives with fewer possessions.
‘If we focus on both the short and the long-term horizons, and begin by changing ourselves, we are working to create a world worth inheriting. I guarantee you that this is infinitely more interesting, relevant, and important than whatever is in the news or on TV right now.’
PS I haven’t read the journal article, but it seems to broach the question if the domestication of maize (corn) prompted the population explosion. Maize grew to represent 80 percent of the calories they were consuming, up from zero. Those of you who watched Toby Hemenway at Duke talk about ‘saving humanity but not civilization’ may recall that he blamed grain for the population explosion. Our human bodies interpret the energy richness of the grain as a sign to breed. You will find simulator thoughts expressed in Wetware, which I have been recommending I don’t pretend to know…just pointing it out.
similar, not simulator
I have serious issues with these guys who are selling ‘hopium’ (if only we live smaller we will all be ok) — when I am assuming they know full well that is most certainly not the case.
It’s becoming an industry of doomsday preppers who will tell you the end is night — but if you sign up online NOW you will be saved…
Reminds of one time — I was in Macau and flipped on the TV in the room — and lo and behold there was the GOD channel. Yes — it was a channel dedicated to everything godly…
I was intrigued — 24/7 god …. kinda like the CNN or ESPN of god….
So I absolutely had to check this out — and I shit you not there are two greasy looking guys urging the tv audience to donate $300… (not $30… not $3… not whatever you can afford – ONLY $300)….
And if you CALL NOW to pay that $300 (operators are standing by – get your credit cards out NOW and call 1800godwillsaveyou) — what they do is write your name on a piece of paper to be placed on the older and prayed over by the equally greasy looking pastor…
All the while there’s another greasy guy in the background knocking out creepy religion music’s greatest hits…
Chris Martenson’s business model is no different – he just needs to substitute the greasy organ grinder with choir singing koombaya…
Yes, grains are way up there in the percentage of calories we consume. They are hard to process, but once they are processed, they keep well. Not really good for us either, but better than zero calories, which seems to be the alternative.
“grains are way up there in the percentage of calories we consume… Not really good for us either, but better than zero calories, which seems to be the alternative.”
I think there are alternatives that survivors will necessarily move towards. The Irish subsisted off potatoes. I the tropics, they can subsist off casava. There are many tubers and nuts that can fill the role of grains. But some of them (chestnuts, for example) take a long time before production. Best to get started yesterday…
It is a race, though. Fast crash, or slow crash? Just as vegetation will have trouble moving north or uphill fast enough to keep up with climate change, many of us humans can change our diets, given enough time.
big oops there Jan, if you are talking about the Irish famine–if not–apologies.
The whole problem with the Irish famine was that the potato harvest failed completely
The Irish people starved because although food was relatively plentiful–and the sea teemed with fish, it was sold elsewhere for profit
I was writing about pre-famine Ireland.
Before the crop failed and people died, much of the population got most of their carbs from potatoes. The proof is in the famine! And that should serve a cautionary tale to civilizations who place most of their nutritional needs in a small number of plants, like corn or soy.
One of my goals with our garden is, to generate 1 million calories per year, that is half of what we consume. With this goal in mind ì’m experimenting with diverse crops and found that grains like wheat, barley or oats are difficult for the home gardener. Potatoes yield way more and are easier to grow, need less fertility of the soil. Besides our climate is great for potatoes but not great for grains. Corn does OK though. It is now after 5 years of planting, experimenting and learning that we approach a 700,000 kcal range, that includes eggs from chickens.
So from practical experience i can say that it is hard. There is only so much space, one needs animals and they need feed and lastly each year brings new surprising pests. I had hoped for 900000kcal this year but voles ate much of the potatoes. We have approx. 150 different crop year round.
Now. … even with the richness of things we grow i still find it hard to exclusively eat from the own garden. Oils, salt, dairy, sugar (yes we have bees now too). … those make food fun and cooking fun, but without neighbors, others who can grow those this would all be difficult.
Take home message: For the ordinary person it won’t be possible to get fed once shtf and even for well prepared people it will still be very hard.
“Take home message: For the ordinary person it won’t be possible to get fed once shtf and even for well prepared people it will still be very hard.”
To make through the SHTF you will need to be very lucky. Preparations can only go so far in tilting the scales.
The first hurdle for peppers it to take the right preparations.
The second to hang on to these even as governments try to take it away.
The third is to hang on to these even as other people are desperate to get them.
The fourth is to remain sane through all of the above…
You are way ahead of me, but my impression as well is that growing enough calories and preserving them for when you need them isn’t very easy. If you do manage to grow potatoes and other crops, you then need to keep them the right temperature and away from pests while in storage as well.
Potatoes, once cooked, baked etc. dry very well and can be stored that way too for very long time. Or dig a hole and put a trashcan into the hole, such a place stores potatoes nicely too. There are books a bout “root cellaring’ which I include simple ways like storing roots outside under cover in a dirt trench. You’d be surprised about the number of options which exist. Still it takes reading, education, trying what works in your climate and – space.
We use sweet potatoes in the south. The main issue there is keeping them warm enough, I believe. Refrigeration doesn’t work. A house heated to 50 works.
“BP’s Latest Estimate Says World’s Oil Will Last 53.3 Years”
All we need is enough investment capital to make this happen–also to keep the economies from collapsing from high prices at the same time.
“All we need is enough investment capital to make this happen–also to keep the economies from collapsing from high prices at the same time.”
In essence is the consumption of capital in order to facilitate extraction of oil at present prices the destruction of savings. Either directly or through the inability to create savings. This destruction of our savings is what will make the downside so sudden and steep. As a species we fail to invest in our longer term future and just “spend it all now”.
I am sure you are aware of this, but being new to your blog I do not know if you have addressed this in the past. If not, it would be a nice subject for a blog entry.
Thanks for the idea.
Even if we do invest in our future, Liebig’s Law of the Minimum brings it all down. We really can’t keep everything going, once resources start to deplete. We can try to build something like “renewables” that supposedly run only on replacement parts, but how do we make all of the replacement parts? They fail as quickly as everything else, besides being unaffordable. They are a complete dead-end, as far as I can see, especially as far as keeping the electric grid operating.
Looked at from the point of view of an individual, however, solar PV may have some benefit, say, operating a water pump for some more years, until some part of the system fails.
Not consuming our savings and making wise investments while we still can will not change the final outcome. But I think it might change the way we get there.
As we consume our savings just to be able to keep on going like we are just a little bit longer will ensure a sudden and big drop. Keeping our savings and investing them wisely could make the drop less sudden and less steep.
That said, I am equally convinced that this will never happen. There is no consensus to do so, and even admitting (by politicians) that we need to prepare will probably throw the world in chaos.
“We can try to build something like “renewables” that supposedly run only on replacement parts, but how do we make all of the replacement parts? They fail as quickly as everything else, besides being unaffordable. They are a complete dead-end, as far as I can see.”
Perhaps, but perhaps there is also middle ground.
I’ve been training for 58 years for the time-honoured — but recently eviscerated — profession of “tinker.”
There are people who can re-work parts, substitute parts, fabricate parts, in order to keep something going. There are people who can “Frankenstein” entire machines out of the dregs of dead machines.
The problem is the level of complexity inherent in many machines. I think you can only “step back” one level — and I can’t clearly quantify what a “level” means.
For example, microprocessor-controlled engines are a big problem, because you need much of modern civilization intact in order to have spare parts. However, mechanical-only engines can be maintained at one level with a set of wrenches and possibly some metal working equipment.
So I focus on 20-30-year-old technology as that most likely to be functional 20-30 years from now. Technology that is only 5-10 years old will probably not be maintainable in 5-10 years.
but i thought that ”investment capital” was derived from the ”excess energy” left over after paying all the costs of extraction/distribution of oil coal and gas in the first place
unless i’m missing a thread of irony here
We clearly don’t have enough investment capital to extract all of the resources that look to be available. Investment capital consists of resources of various kinds (steel, oil, natural gas, fracking sand and chemicals, computers produced with parts from around the world, skilled labor) that are necessary for extraction. The economy has to be (1) producing an adequate amount of all of these things, and (2) some oil and gas company needs to be able to buy the resources needed for extraction, at the same time (3) citizens can afford to pay a high enough price to make the whole process possible. Underlying this, the economy needs to be functioning well enough that skilled labors are adequately fed, schools for them are available, and the government is continuing to provide law and order.
I think the situation is more complicated than “excess energy”–our financial system determines how much capital is available before the system will collapse. In a way, it is the irony of the situation.
I still think our financial system, and every other system for that matter, is a product of ‘excess energy”–ie what’s left over after one oilwell/coalmine has delivered enough net power into the system to drill the next one.
Dear End of More
I probably shouldn’t reply to you…because I haven’t been following this conversation closely. However, let me propose a thought.
Let’s go back, in our mind’s eye, to the time before fossil fuels. There would be no doubt that most of our tradable energy came from the sun, directly or indirectly. The few leftovers would be things like geological energy (earthquakes, the geysers at Yellowstone, etc.) And also the creatures living near deep-ocean thermal vents. In addition, there was gravity, which is immensely valuable to our world, but not really a tradable asset.
Some of the things solar does are not very tradable, either. The warming solar rays which keep our Earth from becoming an ice ball circling in space, the daylight which lets us use our eyes.
The most notable product of solar energy which DOES yield clearly tradable products is the carbohydrates produced by photosynthesis. Plants use some of the energy to fuel their own bodily processes, but there is quite a bit left over. The plants partner with fungi, giving the fungi sugars in return for minerals brought from places the plant roots can’t reach. The plant trades sugars for pollination services.
In addition, predators arise, who simply eat the plants. Sometimes, the predators are also symbionts, as when they spread the seeds of the plant. Sometimes they are gardeners (as humans and termites garden) who assist the plant to multiply its numbers. Sometimes they are just plain predators who don’t do anyone else any good…so far as we now understand the relationship.
It seems pretty clear that the amount of biological mass which can be supported is limited by the original amount of tradable energy created by photosynthesis. There are many other factors, such as the availability of water, the recycling ratios for various nutrients, the quality of the soils, etc. But the tradable energy created by photosynthesis is at the base of the process. The profession of gardening is all about arranging things to increase the tradable carbohydrates beyond what an ‘ungardened’ field would produce. With the addition that the gardener, human or termite, will tend to select for carbohydrates which are particularly useful to its own species.
It seems to me that the same logic holds true for fossil fuels and industrial civilizations. I am afraid this puts me somewhat at odds with Gail..I do think Net Energy and EROEI are significant. Just as the tradable sugars in the plant world exclude those that the plant consumes itself, the tradable energy in the industrial economy must exclude the energy which is required to produce the fossil fuels. If we had good statistics on Net Energy, then we could begin to draw conclusions about how much fossil energy can possibly be spent by the non-energy parts of the economy.
Just as with the biological world example, there are lots of slippery relationships which may make a rigid model inappropriate. For example, in the biological model, when a farmer uses key line systems to get more water into the soil, the abundance of water increases the actual photosynthetic product and makes more sugars available to all. Education might play a similar role in an Industrial Economy. Better educated people might be able to envision more ways to make a living, while consuming less, per capita, of the Net Fossil Energy. One would probably be well-advised to study the ways that the biological world gets so much from so little, and ponder analogous relationships in an Industrial model.
Perhaps what I should say is that I don’t think EROEI is a good measure of energy inputs, because it is much too narrow. Cost of production and delivery to the customer in $ terms is a much better measure. This measure also needs to include taxes, so that, say, oil exporters can generate enough tax revenue to keep their economies operating. As the amount of exports a country sells drops, this amount of needed tax revenue can rise very rapidly. EROEI ignores this cost of production completely.
I am taking a very bedrock look at the way things work. On top of the bedrock, we can erect lots of superstructure, which includes things such as taxes to support entitlements and the military/industrial complex, the social theories in the West which pretend that long adolescences and long retirements are ‘fundamental rights’, that Global Capitalism can substitute for cooperative work with people we know, and all sorts of other delusions. I think that saying that these delusions are equally as important as the bedrock considerations is just wrong.
Darwinian selection will tend to eliminate those with the most delusions. Therefore, I prefer to keep the analysis of the real way things have to work based on physical laws separate from the socially constructed ways that we would like for things to work.
So, no, I wouldn’t include taxes as part of the bedrock. I might take a look at taxes and the entitlement/ military/ industrial complex and say that it will be selected out by Darwinian forces, and there will be a lot of chaos for a time. But I think trying to fuse the bedrock with the superficial just leads to confusion and errors in thinking.
IMO this approach is simplifying the issue here. $ is still reserve currency and the main denominator for oil but:
– first – it won’t last forever (see the BRICS starting their own IMF and internal exchange in rubel, RMB, etc.);
– second – it is a fiat currency with floating exchange rate to many currencies all over the world;
So in time this measure will be more and more imprecise in the context of global and internal trade.
I see every type of energy as existing separately–oil energy, natural gas energy, electricity. We can have surpluses in some areas, and deficits in others. It is Liebig’s Law of the Minimum that brings the system down. We can make lots of electricity, but if we don’t have oil products to run our existing devices, the system stops. There are a lot of views laid out by the EROEI folks that are quite “iffy,” if you look at them closely.
What oil wells provide is extra oil, over and above the oil products required to make the oil. I am not sure how helpful the whole analysis is on other energy products. There are way too many things left out–wages, tax payments to governments, oil used in transporting coal to end destinations for power plants, etc.
Dear Don/Gail et al
Tradable energy is a head hurter if one goes too deep into it
The wool from sheep is an indirect product of sun energy, it was traded throughout England and was the commercial force in the construction of magnificent churches and cathedrals. Sun=grass=sheep=wool=clothing=markets with profit accumulating at every stage until they could afford to use the ‘excess’ cash to pay stonemasons to build churches.
… every stage involving some transfer of cash except the sun to grass part…if called to question, it would be put down to business acumen and skill, true of course, but the prime energy source was free sunlight.
Da Vinci invented machines–but sunlight wasn’t strong enough to power them
Fast forward to 1774, James Watt perfects the steam engine, and begins the process by which we harvest the products of 250m year old sunlight. In doing that he ends the medieval system of fuel usage. (basically trees =100yr old sunlight) All our modern existence can be traced back to that start date.
Unfortunately we are now convinced that man’s inherent genius provided our current infrastructure, and the steam engine was a historical sideline when in fact it is possible only by burning the products of free sunshine . ( just like the wealthy churchbuilders),
We look to our machines, certain that they are producing energy (in whatever form), in denial that they are in fact consuming energy—
It seems to me, that it is that denial factor that is our greatest danger. The rejection of the laws of thermodynamics, and the absolute refusal (by the vast majority) to accept that technology does not deliver net energy. and as long as our wheels are turning, we can have it all—forever.
Dear End of More, Gail, and All
I quite sympathize with the frustration of trying to solve the ‘boundary problem’ in connection with Net Energy or EROEI. Nevertheless, I think it is important to think through the real relationships rather than just rely on price…which can be manipulated all out of reason to reality.
For example, consider the question of swales constructed by a college educated Permaculturist which increase photosynthetic output by 50 percent because they improve the utilization of rainfall. How does one go about putting a boundary around the swale? Is it the cost in calories of a person manually digging the swale? Is it the cost of a person using fossil fuel powered equipment to dig the swale? If fossil fuel, then does one include the enormous cost of the military which guards the long supply lines for the fossil fuels? What about the cost of the pervasive ‘national security state’ which with paranoia spies on everyone, constantly? Do we assume that anyone smart enough to make a swale went to college and took a 72 hour Permaculture Design Course? What about the cost of all that stuff? Is it the cost of the life style of a person who could afford to do such stuff?
On the other hand, Gary Paul Nabhan in Arizona describes finding Anasazi earthworks which are hundreds of years old, built by an illiterate family. The descendants of some of the plants they grew are still growing there, even though the site was abandoned centuries ago. Were the people killed in the wars described in Chris Martenson’s current post? Do we just count the cost of the folk knowledge about how to handle water to increase photosynthesis which was possessed by peasants a thousand years ago? And what would that cost be?
As I see it, we have a bunch of partial differentials. I got lost in Mathematics about the time I got lost in partial differentials. Somebody may know how to give a crisp answer, but I don’t.
But if we say, ‘well…it’s all too complicated so we just use something like fiat money which has been massaged within an inch of its life by TPTB’, then we miss the real actions which are required and the consequences of those actions. Most importantly, we miss the opportunity to think about alternatives to the current rather mindless repetition of what we have been doing for the last decades since WWII, and even earlier.
I’m not sure I have correctly understood your comment about tradable energy, but let me give my view of it, starting from your example with sheep/wool/clothes.
You’re right that first input of energy was sunlight onto the grass eaten by sheep, but then at each step there’s an input of external energy.
You can get profit only because you have transformed the matter by using energy.
The cumulated “profit” (I’d rather talk of added value) at each step of the transformation is in fact the total embedded energy in the product.
The energy inputs at each stage are -mostly- mechanical work (can thus be measured in Joules), doesn’t matter wether the amount of work is provided by human or animal muscles, or steam- or electric-engines, but of course in quantity ; the quality is the same.
Building up a cathedral is much faster today with powerful cranes etc.. than it used to be with only manual force, but it’s the same; the difference is only shorter time needed for the operation.
Think that the power of the first steam-engines was measured by the number of horses it could substitute, ie horse-equivalent ; we’re still using the horsepower as a unit.
And if you consider external energy inputs backwards, you’ll find for each of them the sunlight energy as very first input, wether it is your (or the horse’s) food or the fuel for the engine (as well as all components and infrastructure necessary for manufacturing and running the engine).
Not directly related: reg. energy density, David Mc Kay has made a nice study for UK, giving good take on compared orders of magnitude of different sources (of course far from getting the whole picture, but pleasantly didactic and worth reading)
his site: http://www.withouthotair.com
I was trying to put over my point while trying to keep the post as short as possible.
Ive read Mackays book and been to one of his lectures. I base much of my thinking on his research.
In my rather simplistic equation of Sunshine ultimately building cathedrals, I left out our system of energy tokenisation.
We have a system by which energy is (or was) represented by copper, silver and gold
Thus a clever sheep producer at the base stage, might not be a clever trader, and so not receive the full value of his sheep at market. This is where profits are creamed off, allowing the clever trader to live well at the expense of others. The commodity is irrelevant, we live in a commerce-driven society, where Warren Buffett or the Koch brothers appear to have certain talents that others do not. Whatever that talent may be, it has enabled them to divert ‘energy tokens’ (not the energy itself) to pay others to build their personal cathedrals. I’m not rich-but comfortably off, so can also afford to buy the energy output of others to support my modest lifestyle. Billionaires have the same priveleges, but grossly magnified.
The volume of energy available has not increased, only the imbalance of it between individuals. As individuals we are genetically driven to acquire the means for survival. The billionaire doesnt need a second billion, but he cannot stop his acquisitive drive. Hence Buffet has 50 billion or whatever. Whatever the scale, we build by converting one form of energy into another, at the moment we are living in an era of high energy availability. When we’ve burned it, we will revert to a low energy state, (say pre 1800) and stay there. Buffett or the Koch’s wont be able to create any more energy to support the system any more than I can. They, like most people, are convinced that energy tokens (money) is a ‘tradable’ substitute for energy itself. (ie–we can solve any problem if we throw enough money at it) If gas is $100 a gallon, the billionaire deludes himself that he will be able to afford it–but of course at that price the refineries will shut down and there wont be gas at any price. At that point folks, youll be buying bread with money carried in wheelbarrows. (and the wheelbarrow will be more valuable)
As I’ve said before, the proof of my point lies in the fact that eskimos do not build cities or become billionaires
I recommend you read this book, written in 1936
I found it in a SH bookshop recently—utterly brilliant, a must read. BUY IT!!
Apologies–I thought I was just pasting the link to the book, not a picture of the book itself
I have a slightly different view ; I don’t pretend being right, though ; maybe I’ll get fired at by people more skilled than I am.
I think that commerce and trading and finance are tools that help run the economy faster, but are not parts of its “hardware”.
I think that the price of a product actually IS a measure of its embedded energy.
This is in global average of course (and tends to be verified by the direct constant proportionality we’ve got for decades between world GDP and global primary energy consumption), and “talent” in trading would consist in making deals as far as possible from this average, in the favourable direction, of course. It means that another (or several) similar deal(s) have to be concluded to the advantage of the adverse part, or at least that some compensation happens in some part of the system.
Each single price is the result of a power-struggle (and only that), but globally speaking there’s an ideal value, which is given by the total amount of embedded energy in the product ; that doesn’t sound contradictory to me.
François Roddier says that an open system maximizes the energy flow through itself when it is as near as possible of a critical point. This critical point is called critical opalescence one can observe in phase-transitions (eg liquid-gas) in precise conditions of pressure and temperature ; in such conditions the matter is equally spread over the whole available space (exactly: in a fractal distribution of concentrations).
So my conviction is that such critical point would be, for the economy, when all prices are as near as possible of the “ideal” price that reflects the total embedded energy. This would go thogether with an evenly (“fractally”) distributed wealth. This would be the condition for the economy to run smoothly and efficiently (with lowest possible frictions), provided that it’s far enough from the limits.
In this view, today’s slow-down of the global economy is due to 1) plateauing of total amount of primary energy, and 2) “crystallization” of the wealth, ie small areas of very high concentrations in an ocean of almost-vacuum (for us: rocketing inequality, 85 people as rich as the poorest 3.5 bn). The energy flow through such system is much lower than if it were closer to critical opalescence (for us: decrease of middle-class and their discretionary expenditures eventually leads to collapse of the economy).
Point 2) may be a consequence of 1) when the system hits the limits ; hard to figure out.
Printing money at a faster pace than energy production growth may also induce parasitic feedback loops that seem to me rather likely to slow-down the whole system, but I’ve no idea how it could work in details.
No problem (for me), it’s a nice picture!
I read again your above comment, and realized that we’re saying the same thing.
I’m just more focused to the physics underlying the situation (and probably deaf to economics), that’s all.
Dear End and Stefeun
‘You can get profit only because you have transformed the matter by using energy.’
Consider the case of European traders giving the natives glass beads. The natives are willing to do quite a bit of human labor to get the beads. It is a fact that some energy was used to make the beads. But the traders got the better deal in terms of energy, most likely. That is, if you look at the embedded calories in the beads, they are probably less than the calories expended by the natives. (At least I think so.)
What I find somewhat confusing is the mixture of biological energy (mostly derived from the sun and the gravity which makes water fall) and fossil fuel energy and the ways clever people have to achieve certain goals virtually without energy. For example consider a singer on a street corner collecting contributions in a hat. The street corner is awash in solar energy (which keeps the ambient temperature well above absolute zero), The singer, per se, isn’t necessarily very much about fossil energy, and the ability to collect contributions is not very much a function of energy expended by the singer. The singer’s contribution is very much not in the realm of energy consumption…although the singer obviously needs food and clothing and shelter.
The ‘hedonic adjustment’ that keeps headline inflation low and shows that our GDP is not falling despite what you may be experiencing, is related to what the singer is doing. The Bureau of Labor Statistics would sample singers, and if they are improving, it would impute a hedonic factor to boost their GDP contribution and reduce the calculated price which would increase ‘real’ GDP.
I think that there are two traditional ways to make a living. One is to have mastered some certain from of energy and enabling technology and to hire oneself out to convert raw materials into finished products using that energy. An example would be a miller with a small mill dam and water wheel and grinding stone. Another is a guy who knows how to use a road grader. A third is the guy with a brick oven who gathers firewood and makes pizzas. All of these people are making products which are ultimately used to make humans feel better. That is, the payoff is in terms of mental states, which are heavily dependent on the release of certain chemicals inside the body.
The second traditional way to make a living is to manipulate the humans to produce the pleasurable mental states without expending very much in the way of energy. The street singer, movie stars and other celebrities, politicians, preachers, yoga instructors, and such are examples of the second way.
Of course, most people will use some combination of energy and direct manipulation of mental states.
So I think an economy is a combination of energy from the sun and gravity which drives biology, and energy from fossil fuels, and the almost energy independent direct manipulation of mental states. I am afraid my model doesn’t lead me to any ringing declarations.
All EcoReality Co-op needs is enough investment capital to pay off the mortgage, then we can easily feed ourselves!
Dear Gail and All
Wisdom or Foolishness? Post Crash Thoughts–Before the Crash
The nature of the world we might be living in after the Crash of Industrial Civilization is highly speculative. Nevertheless, I think we can formulate some tools for thinking about it. Of course, if we are dead, none of this matters to us. But if one also is thinking about passing memes on to one’s descendants or just to humans at large, then it may be worth some thought. And, of course, if one hopes to survive in the Post-Crash world, then some thinking now may pay big dividends later.
I will assume that we will not be able to restart Global Capitalism after a crash. That means that we will be looking at a much more localized world dependent mostly on biology rather than industrial physics and chemistry. If we want to be warm, we will have to expose ourselves to the sunlight or insulate ourselves, and if we want to be cool we will have to hide ourselves from the sun and also learn how to use the fact that cool air sinks, and also how to use radiation to outer space to cool ourselves.
If we want to grow food using agricultural or horticultural or hunting and gathering methods, then we will have to learn lots of skills which few urban people currently possess.
Likewise, we will have to relearn organizational skills at the local level. The Magic of the Global Market will no longer deliver anything to us from the far corners of the world made by people we do not know.
Where to start? My suggestion is to get, from your library or purchase, a copy of Wetware by Dennis Bray. If you know nothing at all about biology, then begin at the beginning and work your way through it slowly.
On page 144, Chapter 8: Molecular Morphing, he begins a discussion of how life came to be on this planet. I find it very suggestive. Cells had to solve a series of problems in order to persist, and we can glimpse the ways they did it and make parallels to the sorts of tasks we would have to do if The Big Crash sets us back to the Stone Age or the Horticultural Age or the early Agricultural Age or the Iron Age or whatever age you think is appropriate. We can assume that the Fall of Civilization won’t affect the basic biology of the cell (although nuclear disaster might, I suppose). We don’t have to reinvent the human body and brain. So we are thinking about reinventing human culture and modulating human psychology and also building a robust information network and tool system to facilitate production. So I suggest reading Bray’s account with that mind-set.
On page 152 Bray begins a discussion of membranes. If there were no membranes, everything would be floating in a soup and there would be no basis for natural selection. It is only when some replicating machinery is enclosed in a membrane that selection becomes possible. How to think about that? Suppose that after the collapse we have two communities: one community are determined vegans, and do not kill any large animals. The other community integrate animals into their food production. Very likely, one will survive and the other won’t. All the arguments which can be mounted today will become moot as natural selection does it thing and some survive and some don’t. We will NOT all be in this together. We are much more likely to exist in E.O. Wilson’s world of group selection.
As you read Bray, you see that biology is far more information intensive than users of Facebook can possibly imagine. Information, more the sorting of important information and separating it from noise, will be important for group survival. If we look at the ‘openness’ of communication now, we see maximum transparency with people such as Geoff Lawton and Joel Salatin and Jehovah’s Witnesses. We see maximum secretiveness in organizations such as Monsanto, the Frackers, and the Deep State. Somewhere between those extremes, the groups which survive post collapse will likely pick the winning combination.
What the last paragraph was talking about was discussing with outsiders what we have found that works. Think medieval guilds and their trade secrets. But organizations need to be transparent to incoming information. That doesn’t mean that every single member is constantly worrying about signals from the outside (some work has to get done), but it does mean that groups who enforce rigid fundamentalism are unlikely to survive.
On page 153, Bray gives us some ingredients for world domination:
*Lipid vesicles (the way the group separates itself with a membrane)
*Self-replication (sex plus good memes handed down)
*Division as the group grows
‘Any vesicle that managed to achieve this much, however slowly and imperfectly, would have an insuperable advantage over all of it’s neighbors. It would be poised to take over the world—literally.’
Bray also mentions the acquisition of ‘filamentous protein structures’ and the development of ‘internal membranes and organelles’. I think of these as requiring us to develop characteristic ways of constructing useful things such as root cellars and dwellings, and also developing ways to further specialization of function within the community. As a concrete example, the Late Blight is currently decimating the tomato crop in North Carolina. One way to treat late blight is by doing ‘solarization’. It could be that, post collapse, it may be useful to have a special occupation dealing with Late Blight…as opposed to everyone who grows food being entirely on their own. Such an expert would be equivalent to an organelle inside the cell.
On page 154, Bray takes us back 3.5 billion years to a pretty barren planet which already harbors cellular life on the edge between water and land. ‘Here, in this pond, a vicious struggle for survival is being fought. Famine, pestilence, and warfare already stalk the Earth, on a microscopic scale. Reserves of organic material are depleted; cells fight for food. Variant forms of life appear and scrabble to the top of the heap, enjoying a brief supremacy before being deposed in their turn. Some cells become specialized at harvesting scarce provisions, better able to use what is there. Other cells acquire the trick of floating or crawling to new locations more favorable for growth. Yet other cells learn the arts of war—how to kill and to cannibalize.’
On page 155, Bray says that if we could rewind the tape and watch it unfold, we would get the wrong impression. We would think that the surviving cells were somehow warned about impending changes and took the appropriate action. But the truth is that they ‘continually undergo random changes’. Some of the changes work, most do not. On the following pages he details what I would call the ‘flexible genome’ theory, or some other descriptive word. You will find a bewildering description of all the ways that a relatively fixed set of genes can respond to changes in the environment. ‘The old dictum ‘one gene, one enzyme’ propounded by the CalTech scientists George Beadle and Edward Tatum in 1940 is clearly not true in detail. One gene can make more than one protein, sometimes many more.’
He gives many examples of how a few genes can be involved in thousands of different products. Perhaps the prime example is the immune system, described on page 160: The number of specific antibodies that a person can make is astronomical. Some estimates place it at around ten million trillion.’
My lesson from all this is that, so long as the surviving group is open to and responds intelligently to incoming information, then the number of behavioral responses is probably much closer to the astronomical than the discredited ‘genetic determinism’ of 1940. Many of those responses will be mistakes, and penalties must be paid. From an organizational perspective, the thing to do is pay attention to incoming information channels and appropriate decision making. Probably neither radical democracy nor absolute monarchies will last very long.
On page 163, Bray states ‘Every small set of interacting protein molecules in a living cell could, in principle, adopt an essentially infinite number of chemical states’. He comments that many of these variations would be just noise. ‘the extent of meaningful variation is unknown’.
My lesson is that, post collapse, there will be a vast amount of information leading even a small group to engage in a staggering amount of random activity leading nowhere in particular. If we are members of such a group, we somehow need to exercise some wisdom to become disciplined enough to avoid the noisy behavior without censoring the incoming information or squelching by majority vote the innovative responses dreamed up by some rogue individual or subset of the group.
On page 167, Bray begins Chapter 9, Cells Together. ‘Somehow, it seems that free-living cells, leading an autonomous existence, coalesced into vast communities. Systems of proteins working within individual cells became modified to perform special functions. They acquired the ability to cooperate, producing creatures that far outperform any individual cell.’
I leave you to discover the delights of this chapter on your own.
Fossil industry is the subprime danger of this cycle “The epicentre of irrational behaviour across global markets has moved to the fossil fuel complex of oil, gas and coal. This is where investors have been throwing the most good money after bad.”
Is the mainstream media finally “getting it?”
Actually, Ambrose Evans-Pritchard still doesn’t get it. He thinks intermittent renewables are going to save us. He is comparing apples to oranges, when he says, “staggering gains in solar power – and soon battery storage as well – threatens to undercut the oil industry with lightning speed, perhaps in a race with cheap nuclear power from a coming generation of molten salt reactors.” Electricity isn’t oil. And intermittent electricity is not steady electricity. Wind and solar PV will play at most a very minor role.
Nice addition of good comments; they help offset a small, yet consistent plea towards magical thinking eg we need to get over setting up the ‘we have to feed 7.2 billion’ straw man.
Perhaps one last state of denial to be overcome is the misguided belief that those in leadership positions don’t understand the true nature of the problem. LOL.
Once you come to accept the sum totality of our “predicament”, including awareness by those who control state power, then it’s fairly straightforward to accept the conclusion reached by Paul and others.
To wit, why allow collapse to happen in chaos, if the process can be controlled by eliminating around 90% of the world’s population? To quote S Holmes, “… when you have eliminated the impossible, whatever remains, however improbable, must be the truth?”
If you sit back and ponder the implications of the factual analysis discussed here, it’s hard not to come to this conclusion. The alternative is the wholesale abandonment of control by those with certain personality traits who have exercised power for millenia. Why quit now? Yes – answer that simple question: why should they quit now?
throughout history, controllers have invariably been unpleasant individuals
True, those who have -‘the controllers’ – will fight to retain it and contemplate any sacrifice on the part of others with equanimity, (although the degree of indifference will be culturally determined – after all, a tribal chief needed his tribe didn’t they?) but so will the ‘controlled’: human nature is generally not that pretty when things are tough, or even when things are rather rosy.
Let’s consider the spies and informers, the old grannies, block wardens, and petty administrators that made the Chinese Communist, Nazi and Soviet Totalitarian regimes possible at ground level – they didn’t come from a traditional ruling class, just common people sticking the knife into other common people.
These systems also perverted their behaviour: they made humanity, and kindness ‘treason’ and spying and betrayal into ‘virtue.’
I’ve worked and lived among people at every point on the scale, and all I’ve ever found is human nature: pettiness, spite, the desire to exercise control are the same whatever the supposed class of the person or position in the hierarchy. So too are the real human virtues.
Jamie Dimon has throat cancer: physical and biological reality is in control here on this Earth of ours, and will determine the course of our civilization, not human fantasies of power and wealth. I might be a nobody in the eyes of those who currently enjoy the illusion of power: what I know is that I am a nobody in the eyes of Nature, as it were, – that is the prime fact.
We have turned oil into people.
But, we have a problem, Huston:
Since Don and Hideaway has discussed modern ag and the dependence on imports (as well as Gail), here is a fascinating read I found in the library and available at Amazon concerning nitrogen
Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production
“The industrial synthesis of ammonia from nitrogen and hydrogen has been of greater fundamental importance to the modern world than the invention of the airplane, nuclear energy, space flight, or television. The expansion of the world’s population from 1.6 billion people in 1900 to today’s six billion would not have been possible without the synthesis of ammonia.In Enriching the Earth, Vaclav Smil begins with a discussion of nitrogen’s unique status in the biosphere, its role in crop production, and traditional means of supplying the nutrient. He then looks at various attempts to expand natural nitrogen flows through mineral and synthetic fertilizers. The core of the book is a detailed narrative of the discovery of ammonia synthesis by Fritz Haber — a discovery scientists had sought for over one hundred years — and its commercialization by Carl Bosch and the chemical company BASF. Smil also examines the emergence of the large-scale nitrogen fertilizer industry and analyzes the extent of global dependence on the Haber-Bosch process and its biospheric consequences. Finally, it looks at the role of nitrogen in civilization and, in a sad coda, describes the lives of Fritz Haber and Carl Bosch after the discovery of ammonia synthesis.”
Yes, without this important industry our population levels would not have been able to escalate to the levels we have now
Nature, the primer publishing venue of science, named Haber the most important person of the 20th Century, beyond Einstein and everyone else.
The Haber/Bosch process essentially doubled world population.
He also worked for population decrease:
“Haber played a major role in the development of chemical warfare in World War I. Part of this work included the development of gas masks with adsorbent filters. In addition to leading the teams developing chlorine gas and other deadly gases for use in trench warfare, Haber was on hand personally to aid in its release despite its proscription by the Hague Convention of 1907 (to which Germany was a signatory). Future Nobel laureates James Franck, Gustav Hertz, and Otto Hahn served as gas troops in Haber’s unit.”
Note that Haber was pro-active in those developments, while Einstein contributed unvoluntarily to the atomic bomb (as far as I know).
And the “good side” of Haber’s work, ie help people to grow crops, is today our major problem and threat, with oil-addict over-population.
“Note that Haber was pro-active in those developments, while Einstein contributed unvoluntarily to the atomic bomb”
I believe it was a letter from Einstein to President Roosevelt that started the Manhattan Project and the development of the nuclear bomb.
In later years, though, he expressed regret at having played a part in the development of nuclear weapons.
Thanks Jan for your precision,
I was not so sure while writing it, but too lazy to check.
His poison gas involvement, while horrendous, is noise in the system compared to the Haber Process for nitrogen, a Earth changing development
Habers wife Clara (also a chemist) shot herself because of the work he did on producing poison gas
She should have shot him instead
As the poet Hardy said during WW1:
‘After two thousand years of saying Mass/ They’ve got as far as poison gas.’
I’ve read the book and recommend it highly. Your Library more likely does have a copy. Check it out and enjoy the fascinating read. Also a book regarding Charles Lindberg and his contribution to medical science titled is a wonderful surprise story and just as good:
To be remembered by anyone who survives as The Father of the Great Die-Off
Paul, Back in their day there were indeed “mass die offs”, not to the degree you are and I are talking about. That is the reason Lindbergh sought out Dr. Carrel! His sister-in-law, who he cared about, died because of a bad heart. One must remember that it was a different time and consciousness with humanity back then in the firs t half of the 1900’s. Actually Lindbergh, toward the end of his life, would have felt very comfortable here on these pages. His whole outlook changes and was a staunch environmentalist and indeed stated we could not continue expanding in the direction we were. He would take weeks in Africa living with the Bushmen and marvel at their life and “freedom” and ability and knowledge.
That is all written in Friedman’s book. For anyone here reading this comment you will enjoy these chapters.
This idea of “Lost Paradise” is definitely very tenacious (speaking for myself).
Dear VPK and others
My point for years has been that we need to get over setting up the ‘we have to feed 7.2 billion’ straw man. I don’t believe the question ‘how much food can be produced after a collapse’ has any reasonable answer. It all depends on the nature of the crash. Is it a financial crash which impoverishes those who thought they had money, but leaves the real economy pretty much intact? Is it a return, on Black Friday, to the stone age? And all the alternatives in between. My own opinion about the Stone Age on Black Friday scenario is that very, very few would survive. I don’t see much sense in planning for such an event.
A more interesting scenario, for me, involves the notion that we are successful in largely decoupling financial collapse from the real economy. So the resources we are producing today will be available tomorrow, less some depletion. I do agree that we are pretty much at the peak of material consumption, so every year in the future things like synthetic nitrogen will become harder to get. What is very clear from the science is that putting synthetic nitrogen on plants stunts the soil food web, which is the way Nature designed to get nitrogen to plants. Therefore, the synthetic nitrogen is not ‘net nitrogen’, since the production of ‘natural nitrogen’ is suppressed. We do know that some farms and gardens have operated for decades without synthetic nitrogen. The Iowa State trials that I referred to did not use any synthetic nitrogen on the ‘1940s technology’ plots. And they suffered no loss of yield.
Opinions of experts vary widely in terms of ‘on the farm’ production possibilities.
If the decline in the availability of fossil fuel products is 6 percent per year (the depletion rate), then we have some time to relearn old and learn new methods of biological farming to replace chemical farming. I don’t minimize the obstacles, but we can do it if we want to.
But producing food on farms is now not the major use of fossil fuels. It is moving the farm products to a factory, turning the food into industrial food, and distributing the food to homes. Cooking and refrigeration are also major energy hogs. I am pretty sure that this ‘beyond the farm’ system will feel the pinch much more than ‘on the farm’.
For example, if you check resilience.org today, you will find a nice description of a visit to Wes Jackson’s Land Institute in Salina, KS. The author, who knows a lot about food, comments that kernza (a sort of perennial wheat) flour will soon be available. Ask yourself why everyone assumes that we have to grind grains into flours. I agree that it is traditional, but it certainly isn’t necessary. Flours need to be baked, which requires a lot of heat for a long time. Grains can be easily cooked in their intact state in a rice cooker. A solar cooker may also do the job. The point is that our society may need to entirely rethink the whole idea of ‘industrial food’. We may buy a sack of rye berries from the farm, and cook the berries whole, rather than buy rye flour or rye bread. I think we will be forced in that direction. Eating the whole berry also has positive health effects.
With the magnitude of the changes which are required, I think agonizing about feeding 7.2 billion is fruitless. Most people will not be willing to do what they have to do to survive. The fraction who do survive, under a 6 percent depletion scenario, will be those who begin to change their life now.
the ‘Real economy’ as you put it, is hydrocarbon energy. As long as that keeps pumping at a rate that can power our infrastructure, (ie increasing forever according to economists and politicians) we’ll be fine.
The brutal truth of course, is that hydrocarbon fuel put 6 billion extra people on the planet,
without oil, they do not have a future.
Essentially, oil is the harvest of 250 million year old crops, which we dug up and burned in 250 years.
Dress it up how you like, downsizing, decoupling—love those words—we eat oil, without oil we starve. When men begin the starve they fight for survival. Nasty but inevitable, it’s the way we’re made. Theres nothing gentle about it. What you are seeing right now across the middle east is not a religious war, it is a resource war, The syrians had a 10 years drought which collapsed farming. The Israelis are draining the resources of land belonging to the palestinians…and so on.
We demand more but there isn’t any more. The people who get that are in a miniscule minority–the rest will insist that infinite prosperity is just a matter of voting or praying—or both. http://tinyurl.com/oa854gt
No need to watch the news for geopolitical explanations — you have summed things up very nicely
Yes, and politicians and advertisers simply reinforce this belief that the cornucopian crock of gold for YOU is shining just around the corner: we can re-run the 1950’s and 60’s, everything will be fine, is still all they say, with gloss about the world being ever more competitive, etc. Totally bankrupt. The tired old cliches about the need to ‘kick start growth’ and become ‘ more competitive’ (usually via that old chestnut of ‘lifelong learning’) as the route to renewed prosperity simply avoid the issues we discuss here, the real ones.
In terms of conflict we can go further than simple materialism and observe that although the basis of conflict might appear to be essentially physical – access to resources, etc, – the conflict itself produces mental patterns and ideologies, so that if you hate X because he took your land/water/house, your children grow up hating the children of X just because they are that – racial and ideological hatreds become entrenched.
And some conflicts are purely cultural – the wish to exterminate those of different habits or appearance is a deeply rooted in human beings. (And logically so: new people had in the past often arrived only to steal resources, enslave and murder.)
To give an example, the eating of water melons was traditionally regarded by the mountain Basques in their dark valleys as disgusting and the mark of a morally inferior non-Basque, I am not exaggerating: one of the slogans of the early Basque Nationalist movement was ‘Out with the eaters of melons!’ It is still a common insult. The central idea was that the ‘purity of the land’ was contaminated by people with different habits and language. This eventually transformed into ETA terrorism, the members of which group still hate all ‘Spaniards’ (absurd, because there is no Spanish race it is merely a geographical expression), but will happily eat melons…… Mankind! Voltaire wasted his time in pleading for Reason.
PS The Basque Country is often like a Monty Python film. They do not laugh at ‘The Life of Brian’ -to them it’s all logical.
Thanks Don for your thoughtful consideration and we can only hope for the necessary “lead time” (as “operations management” would like to call it), to undertake this transformation. There will be “dislocations” and segments of society that will resist or be unable accept the new reality of our existence. How will it turn out? Hard to say and one thing is for certaim, what we have now is very fragile and temporary.
“So the resources we are producing today will be available tomorrow, less some depletion.”
Don — the low hanging fruit is gone — resource extraction is an ultra high tech — ultra energy intensive industry these days..
I don’t think we will be able to extract and refine any further resources once the collapse hits — i am also doubtful that we can even recycle much of what we already have extracted because I don’t know where the energy would come from to do so…
Of course there is a lot of ‘stuff’ in the world — so we will have tools for quite some years — but they will eventually break or wear out…
This point is well made by Prof. go Bardi in his ‘Extracted’ blog – it’s all getting so expensive and difficult to extract and process, and he believes that this is helping to destroy industry in his own country Italy – 25% loss of industrial capacity since 2008!
Maybe it went off to China?
You are free to make up your own scenario.
I used 6 percent because that is the commonly used figure for depletion of existing fields (excluding tracked wells). So just take what exists now, stop drilling except for a few wells to such as the handful that the Saudis drill every year, and watch the supplies deplete. Cash flows should be positive for the companies, since the costs are mostly already sunk. Natural gas, at least in the US, has a considerably higher depletion rate, I believe.
There are still costs and debt required (as in a functioning global financial system) to extract from conventional oil fields — spare parts are required — ships and pipelines are required to transport the oil.
If all the oil companies began a ‘cash cow’ strategy with oil, not much in the way of debt would be required. Since they would have positive cash flows, they would steadily pay down their corporate debt. Their suppliers would likewise adopt the cash cow strategy and would stop expanding. Depending on how flush they are with cash, they might not even need letters of credit…they could just transfer cash at the time of purchase.
I don’t know how much cash they could harvest with a cash cow strategy. There are lots of moving parts to the toy model.
PS When the CEO of Total says he will pursue exploration for one more year before throwing in the towel, does that mean that 2 years from now we might see a cash-cow strategy at Total?
Nitrogen must have been the missing mineral required for agriculture in many places, at one time.
It will be potassium in the future.
But without the Haber Process, nitrogen would of been in short supply by the 1940s.
i believe you mean phosphorous
You are right.
Got my p’s mixed up.
My handy mnemonic for the three primary plant nutrients:
Phosphorus or potassium could be the next mineral shortage. We go from one mineral shortage to the next mineral shortages, with other minerals perhaps being at suboptimal levels for human consumption, even if they are adequate for plant growth.
That is in Smil’s book and planting Siberian pea bushes won’t be practical on a large scale basis
I don’t have any personal experience with pasture based milking systems. I gather that you think only stupid city people might ever think they made any sense.
But a brief google search showed that there are manufacturers who sell them. There are videos talking about the circumstances under which they make sense. So some farmers, somewhere, are apparently interested. I doubt that there is much of a market among stupid city people.
This fits nicely with what Gail has been saying that any economy be it Global or local is interlinked. When Govt’s don’t receive taxes and payments for services they have to shutdown services. There’s one problem…WATER! We need it in order to live. So as the US and eventually the World economies collapse, expect more of the following. As many experts have said that in the future wars will be fought for resources. China lost 60% of it’s drinking water due to pollution from manufacturing.
John Michael Greer has been changing his tone as he decided the collapse of industrialization has begun. Eventually civilization will collapse as well. For those that say, utter nonsense, he points out that human civilization is a process where it grows, matures, declines then dies and enters a dark age. After a period of time it starts over. It’s happened throughout human history and the wheels are in motion. This time like Gail he thinks it’s different. JMG, sees a Dark Age in the range of thousands of years because of the effects of industrialization and cheap oil.
So the following is a sample of what’s coming our way.
“Detroiters Put Bodies on the Line to Stop Privatization of Their Water”
‘The Bigger Picture of the Water Crisis: Privatization’
The water shutoffs in Detroit, which is currently in the middle of a bankruptcy fight, are merely a prelude to the outright privatization of water and other public assets.
Breathe now while air is still free
Yep, but don’t waste time, because they’ve found the way to privatize it.
The idea was so simple: over-pollute and thus create a need for fresh air:
Pollution-hit Chinese city gets packaged fresh mountain air
too late as usual
I agree availability of water and sewers can be a problem.
This is probably where I should have posted my link to the India story. India doesn’t provide much in the way of toilet facilities. A recent article says, Poor sanitation in India may Afflict Well Fed Children with Malnutrition. Kids get sick all of the time and don’t eat, when human waste is in close proximity to food and water.
I think the dark age that is coming is quite possibly forever — in the past we were able to recover from these declines because we had resources that were relatively easily extracted.
In the past 200 years we have burned out all those resource pools using high tech extraction techniques…
So I suspect after the dust settles if people do survive they will live a very rough existence indeed – there will be no way to smelt ore or make the tools that are required to emerge from a dark age.
You mean we will live like other animals and creatures do? What a relief to them!
This might be interesting for all making preparations, this time post-collapse medicine episode:
If you have any other sources I will be grateful for publishing the links.
Interesting link on health and essential resources
I wrote a piece a while back, coming at the problem from a different angle
seems that we might make the mistakes of imagining ‘medicine’ to be available within some kind of peaceful environment
another problem is denial, that just like unlimited energy, we can have all the other unlimited stuff as well. We know that medical science can work miracles, so we will go on demanding miracles even in the face of logic and reason
THanks for the link to your post. It is very good.
When it comes to health, I think there are at least three related issues:
(1) Adequate nutrition,
(2) Adequate sanitation, so people are not living in close contact with human waste, and
(3) What we think of as health care.
It seems to me that we are in danger of losing all three. The first two are especially important. With the high population we have today, without adequate sanitation, germs quickly gain the upper hand.
I’ve been banging on about that for years…We live here courtesy of bacteria and viruses, they allow us to live here because we are essentially their prairies.—Think about it, they outnumber us zillions to one, theyve been here for 2 billion years, and graze on us while we are alive and dispose of us when we’re dead.—and we think we run the earthshow!!!
In times past, when humanity got too uppity, they culled us down to more manageable numbers that didnt mess up bugworld.
Then 200 years ago, we thought we’d found ways to finish off bacteria, and take over their world for our own use. That pissed them off bigtime.
So they retreated, and used our anti-bacterial systems to mutate themselves into new and more interesting forms
Which is where we are right now, with highly resistant bacteria coming back at us with a vengeance to take back what is rightfully theirs.
I was actually thinking that if our expected massive die-off was caused mostly by “vengeful” micobes/viruses, it might be the less-worst scenario, as the survivors would a-priori be the strongest of us, and hopefully their offspring could enjoy a not-too-destroyed environment afterwards. Similar to what happened in the 1300’s with the Black Death.
Must be something that TPTB have evaluated as well (to say the least).
Three cheers for viruses! Definitely less worse:I was almost finished off by viral pneumonia last year, as was a hearty, strong young farmer up the road, the brother of a friend. It wouldn’t have been such a bad death, and far preferable to semi-starvation or any other of the grim fates we toy with here. I mean this as a positive thought!
The humorous doctor said that it’s usually quite a rapid death in the case of the young (-ish) and strong, -sometimes only 3 or 4 days – only the elderly linger awhile before succumbing.
Or as he put it: ‘In your case: sick, sick, sick, DEAD!’, but the old being more ‘Sick, sick, sick. sick sick, etc…..DEAD!’ An amusing Irishman, I warmed to his view of things.
I agree–we are here courtesy of bacteria and viruses. They may be what finish us off. They certainly have finished off quite a few previous civilizations.
I also think the rooks, ravens and carrion crows take a dim view of us as well: they know our place – potential food. Modernity must be rather frustrating for them, not enough corpses from battles in the fields of the West recently, but that will change. The Balkan wars probably made their spirits lift a bit, and the Ukraine must be getting their hopes up……
After all, germ theory is only very recent, isn’t it? Will it survive?
There was that bizarre 16th to 19th century belief that washing wasn’t important, and that all that mattered was lots of changes of underwear which was supposed to ‘suck the dirt and disease out’!
Which is why people put so much of their money into linen – it also lasted and was a store of wealth for generations.
If civilised life collapses, our descendants are more likely than not going to believe that illness is caused by magic and the evil eye. In fact more people than we suspect probably believe that right now…..
Excellent link – thanks
In light of the evidence that most medicines will last well beyond the expiration date — I wonder if anyone might have a list of useful drugs to stockpile…
I have been planning to buy pain killers — have never taken any — any recommendations for something that is available OTC?
I wonder if a general antibiotic makes sense as well?
This looks good http://medicpatriot.blogspot.com/2012/12/what-medical-items-to-stockpile-101.html
“I wonder if a general antibiotic makes sense as well?”
I get huge bottles of penicillin from my vet for 0.1% of the cost of getting it from a doctor.
We’ve had a lot of mastitis this year, and I’m actually consuming a bottle before it’s expiration for the first time. Guess I’d better stock up.
But such things require refrigerated storage.
Believe it or not, I had a friend without health insurance and ability to pay for a doctors visitor see a dentist. He would go to the pet store and purchase tetracycline antibiotic from the tropical fish section and use it himself. Never had an issue and was very cheap.
All sorts of toxic side-effects from this rather insane situation — at some point they have to lose control…
It’s kind of like telling a lie — then adding more and more lies to support the original lie — at some point you just lose complete control of the story and it implodes…
I once read something that says when there are no longer any buyers of a country’s bonds — except their own central bank — then that is game over…
Japan is on the cusp
Thanks for the link. Also the Telegraph link.
Ambrose Evans Pritchard edges closer to an epiphany….
He’ll be alright: there’s always another bottle……. I remember his grand ‘Latin Alliance against austerity, the Euro Implosion, etc. I suspect every day he wakes up happy to be alive having escaped catastrophe once more.
Journalists at the Telegraph get the boot if they don’t get enough hits.
The money to fund pensions and other entitlement programmes — is not available…. people do not like when what was given to them is taken away….
I have another interesting comparision:
As we know, the Soviet Union oil production peaked in about 1988.
The number of children born out of wedlock started to rise significantly in Slovakia that was highly dependent on energy resources from the Soviet Union due to its economy base on heavy industry:
As we know, the USA oil production peaked in cca 1970 = the number of children born out of wedlock started to rise significantly, too:
The child is considered as a source of energy for the declining energy of the people who are getting older. I would call this trend in the number/percentage of children born out of wedlock as the rising expropriation of the child by one of the partners. The people feel that the state will not be able to support them when they are old. And it often becomes a fight like killing the other partner, so that the child remains to me.
Many things started changing rapidly after 1970. The birth rate started dropping–maybe things aren’t so good–maybe the world can’t continue to support a large number of children per mother. Women started wearing pants and pants suits for the first time. Women increasingly joined the work force. Divorce rates went up. I can see how these things are connected.
Some things are less obviously connected. People in the US started gaining weight. I suppose there was an indirect connection with this as well–with the wife in the work-force, there was less home cooking, and more access to restaurant food. Agribusinesses were more focused on growing food in the most efficient way, even if nutrition got downgraded. Women got less exercise, being trapped in desk jobs much of the day. They also got less Vitamin D, since they couldn’t go outside much. Kids increasingly went to day care, where they played inside more. Plus other related things.
Another (possibly ) related thing.
Why The Overuse of Antibiotics May Be Linked To Asthma And Obesity
The short version — Nature always bat last.
You wonder whether the issue is “overuse” of antibiotics, or just plain disruption of the natural cycle with antibiotics and with other things, like food additives and processed food.
The fall of the Soviet Union came when I was a child. In my mind it is strongly connected with one Slovak movie titled “Spravca skanzenu” (The Curator of Outdoor Museum) that was made in 1988. Info here: http://www.imdb.com/title/tt0176173/combined
It is about a hlinguist, who leaves his work in the state linguistic institution due to moral reasons and returns to his native region to be the curator of the open-air museum of the vernacular architecture. The movie was not a great succes from the commercial point of view. but it very well reflects what the collapse implies.
1. The collapse is preceded by the frantic activity in preserving the status quo with the help of the elctronics (There is a delagation of the regional administration that comes to see the outdoor musem under the new curator and one of them comments something like “We lived in these old wooden houses in the past and now we produce the most modern electronics in the factory over the hill.”.)
2. There is no way back. (The linguist returns to his native region to become the curator of the outdoor museum, but is not able to return to his native house, as this is flooded by the dam. He wants to revive the past in the outdoor museum via various activities, but it either fails or it has no support from the state administration.)
3. The family desintegrates. (The linguist is divorced, his first wife emigrated to Canada. His daughter, who remained with him, starts to inhale acetone. His second wife is a smoker and commits infidelity.)
4. The sin vs. penance, the cornucopians vs. malthusians, the debt vs. austerity. (There is a character of an old professor of linguistics who wrote a paper on an old text from about 16th to 18the century from a monastery in Slovakia. The title of the old text was “On the inclination of the man towards the sin”. The professor was not allowed to publish his works as the communist regime prosecuted him. The religious topics were not welcom by the scientific atheism that was the ideology maintained by the communist regime. Then he returned to his native village, where he lives a unpretentious life, plays the organ in the small old church, researching the historical texts and growing some sheep.)
5. The language becomes empty, as the reality sucks. (There is a part where the linguist, quotes some texts concerning the emptiness of the words.)
6. The resource depletion is an inevitable fact of the human existence. (There is a character of a young man who comes to Slovakia from Australia, where his ancestors immigrated. He wants to find a good wife in the native country of his ancestors, as he can not find it in Australia. The old men present at a wedding party in Slovakia, where the young man was invited by his relatives during his stay, comment on this like “He will find nothing, there is nothing like that anymore.”.
Conclusions: This time there is no place to emigrate or immigrate, to ease the resource scarcity in one region by moving somewhere else, i.e. to leave this finite world for some other planet. That is why the collapse will be omnipresent, on all levels of the society. But it will look rather like die-off, as the resource interchange between the regions will be hindered by the high prices of the transport, of the resource extraction. That will be the final cause of the population decline, not the war.
The movie was made in 1988, the Soviet Union collapsed in 1989, the trends outlined by the abovementioned movie were confirmed.
E.g. the desintegration of the family:
Now 37% of the children is born outside marriage
Blue line: total born children
Red line: children born outside marriage
Orange bars: children born outside marriage in %
The article says that it conforms with the trends in other European countries.
My interpretation of these trends is that due to the implosion of the society structures, the concentration on survival is so strong that church or state frames for family life are simply ignored. It is the fight for survival that creats also high divorce rates: one party can cannibalise on the assets of the other party of the divorced marriage, when one of the partners can not withstand the pressure. The man is often used as the donor of spermias and the breadwinner. The women are victims of the violence from the side of the men. In both cases men and women do not understand (do not want to understand?) that the reason is not the partner, but some broader circumstances of population growth and resource limits.
It is also easy to exploit other partner of the marriage telling him/her that he/she is not good enough because he/she cannot find a work, earn money. Avoiding this pressure of lacking or unstable flow of resources is probably the main reason why marriages are not formed.
The concentration on the child is expressed in the fact that the children are given more and more strange and exotic names. As if this strange names could provide them better life opportunities? As if the parents would like to make their child to be superior to the general poverty that is creeping back into the society?
The malfunctioning family is another debt that accelerates the collapse, as the society produces individuals who are handicapped due to the fact that they miss a full support of two-parent family. It is a kind of energy deficiency on the personal development level. Add lowering social benefits to it and you have a complete disaster.
Quote from Wetware (pg 128)
Be Wieringa is a cell biologist at the Center for Molecular Life Sciences in Niejmegen, The Netherlands. He heads a group of researchers interested in the flux of energy-rich molecules in mammalian cells, especially their extensive interconnections—what you and I would call their ‘network’ properties. One of Wieringa’s scientific loves is creatine kinase—an enzyme that catalyzes production of creatine phosphate, a small molecule used by many tissues as a convenient backup source of ATP. Oner type of creatine kinase is especially abundant in the brain, where it supports the high-energy demands of this tissue. So when Wieringa and his colleagues decided to genetically engineer mice lacking this enzyme (so called knockout mice), they expected dire results. Without an adequate supply of energy, nerve cells quickly die—so what hope would these mutant mice have?
The astonishing answer was that the mice were fine, thank you! Knockout mice were born, developed, grew to a good size. They were fertile, and, so far as one could tell, every bit as healthy and active and long-lived as their normal relatives.
[Advanced study did find some differences. Knocking out other genes had similar effects…superficially the knockouts were fine. Advanced study revealed some deficiencies.]
How could this be? How is it possible to remove a keystone of brain energy production and yet leave the edifice intact?…His answer to the puzzle, in broad terms, is that knockout mice compensate for deficits by rerouting metabolic pathways. Other enzyme activities in the defective animals change in level so that they shoulder transformations normally performed by the creatine kinase.
Back to me. The conclusions I draw are:
*Networks are usually more important than single elements
*Powerful single elements are no guarantee of survival in hard times
The disintegration of families and communities and planetary health must probably be traced to a disintegration of the networks which supported families. The disintegration of agriculture must be traced to the over reliance on the construction of powerful single elements (e.g., single cultivars which replace genetic diversity with genetic sameness; mono crops rather than polycultures; destruction of the soil food web with plowing and synthetic fertilizers). The disintegration of cultures must be traced to the globalization and financialization which have made local cultures obsolete.
Both communism and capitalism have similarly waged war against families, the environment, and local cultures. What we see today is a result of that war.
The resulting brittleness of families, environment, and local cultures makes them far less likely to withstand challenges (some of which are explained by Korowicz).
Biological farming (aka ‘toy farming’) is an attempt to reinvigorate the networks which support food production. Permaculture, broadly interpreted, is also an effort to reinvigorate families and local cultures. Biological farming, and permaculture’s social goals should, therefore be seen as efforts to restore Nature’s methods of redundancy and networks against the hyper-rationalism goals of communism and capitalism.
Dear Don Stewart,
I can agree with you that the destruction of the tie between the people and the land caused big damage to the human population. The reason for this distruction was to support the ever growing populations both in the communist and the capitalist countries. Especially the working force that moved from the rural parts of the countries to the cities got cheap food. It should have been a win-win contract between the working class and the rural population: working class provided machinery and all other industrial products, so that the food production changed to food manufacture with further help of fertilizers, pesticides etc.
It is a well known fact that the communist regime was not so strong in Poland due to the fact that they could not succede in collectivising the small family farms into big communist agricultural cooperatives.
But anyway, the steep rise of the population started back in the 19th century, following by big immigration waves into the United States, Argentina, Australia etc.
The fact is that neither our generation nor any older generation we could encounter, lived in the state of complete isolation from the influence of the fossil fuels abundance.
We must return to like the 18th century to have a quite real image of the local life based on the local resources.
There were hardly any family farms of the free citizens at that time, but the families tied with the land via serfdom. But returning to such reality is inconcievable for the majority of the people: both from the point of view of the higher population and the advanced ways of food production we are accustomed to.
But when the times get harder (like during the fall of the Soviet Union), people will be forced to change their minds. Maybe the shocks from the population decline finally show them where to restart on a very low energy level. Finding that restarting point will be a painful process for many, as they live in the cities for more generations and they completely lost any ties with the land and they have a too idealised view of the village life and too high expectations as regards the hardships the nature prepares for the man unprotected by the achievements of the civlisation.
Too true: peasant life without fossil fuels – unremitting labour. Everything that has to be moved is done by an animal such as an ox or mule, or the peasant.
And fixing things – huge expenditure of labour and time repairing by hand rather than buying a replacement.
So, as you say, not much romance. But I think this is partly why religious holidays and marriage feasts were so important to the peasants – a good rest and a bit of fun.
Still, activity in the open air, if it is not degrading and cruel, averts many mental and health problems, like our so-called ‘obesity epidemic’…..
Hi MG. I see you have good movies you there. Perhaps standard family breakup could happen to be functional in curtailing reproduction.
The lack of jobs is certainly keeping young educated people today from marrying. Also, all of the student debt keeps them from having families–they can’t afford them.
Thanks! I am sure that there are parallels now to the Soviet collapse, only worse, as you point out.
Paul Krugman published an opinion piece yesterday for the NYTimes
on the Feds policy of low interest rates and monetary easing:
I know you all will take interest to his “logic”
I’d rather read Krugman’s analysis on why faking an alien invasion is good for the economy. 🙂
I figure if i’m going to be entertained, I might as well laugh.
I can’t bear to to read anything from Krugman (or the NYT for that matter).
If only the worst case outcome were a depression….
I don’t know why, but I do enjoy reading/hearing Krugman. Also that other fellow, former labor sec under Clinton. They make a good pair. I do hope these chaps can string it out another 10-15 years…just for ME!
Yes that is true — where would we be without those who pound the drum for more stimulus
Interesting! That could be part of the issue. Also part of Lagarde’s need to use numerology to communicate with some select group.
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As some of my financial friends tell me — $110 oil is not a problem — the consumer ‘adapts’
Yes indeed — that is EXACTLY what they do — and that is a disaster in the making:
Consumers are “straining against rising prices on daily essentials to afford summer travel, dining out, and discretionary household purchases – the kinds of purchases that ordinarily keep an economy humming.” That’s what Gallup found when it used a new survey to dive deeper into consumer spending.
Groceries: 59% spent more, 10% spent less.
Gasoline: 58% spent more, 12% spent less
Utilities: 45% spent more, 10% spent less
Healthcare: 42% spent, 8% spent less
Toilet paper and other household goods: 32% spent more, 5% spent less
Rent, the biggie: 32% spent more, 9% spent less.
Retirement savings: 18% spent more, 17% spent less.
Leisure activities: 28% spent more, 31% spent less
Clothing: 25% spent more, 30% spent less
Consumer electronics: 20% spent more, 31% spent less
Travel: 26% spent more, 38% spent less
Dining out: 26% spent more, 38% spent less
Indeed. Erosion of disretionary spending, crazy personal debt and the demographic imbalance – the three death-bringing horsemen for the high consumption habit, established in a time of real expansion.
One can’t manufacture ‘dining out’ cheaper in Asia and flog it in the decaying economies…… Still for a time this will still play into the hands of the big corporations and chains, and those who automate, while local businesses and employment are crushed.
Just a note to let you know that this post by Gail is included in this weeks message from Charles Hugh Smith to his sustaining members.
Thanks! I was suspicious he was reading my posts. Reply
Dear In Alaska and All
Curious story in Wetware (page 101) which may be a clue about living in the tropics vs. living in Alaska.
‘Consider the curious response of E. coli to changes in temperature…In sparse cultures where food is abundant, the bacteria re attracted to warmth and will collect in the region of a weak laser spot under a microscope. But in a dense culture where food is limited, the same species of bacteria move away from the illuminated spot: they are now attracted to the cold. What possible explanation can there be for such seemingly paradoxical behavior?
The answer seems to be that when food is abundant, it is in the bacterium’s interest to grow as rapidly as possible, and growth is accelerated by a move to a higher temperature environment. But if resources are limited, then a smarter strategy is to do the opposite: bacteria move to a lower temperature, ‘chill out’, and wait until conditions become better before growing. In molecular terms, the altered response to temperature is achieved by changing the receptors. Cells in dense cultures inactivate their warm-seeking receptors by methylation and make more of the cold-seeking receptors.
Other examples of environmental response occur when E. coli bacteria are cultivated in different conditions. In a nutritionally rich medium the cells stop making their chemotaxic machinery—receptors, signaling proteins, motors, flagella. Why make these when food is abundant? ‘
So what we have here is the canny strategy of moving to Alaska and ‘chilling out’ while the huddled masses down in the tropics kill each other over the last scraps of food 🙂 Then, when the coast is clear, you cold adapted types will swoop down on the few survivors and turn them into your slaves as you feast on the fat of the land.
On a more serious note, you can see what is wrong with the NPK strategy of chemical agriculture. Pouring chemicals on crops causes them and the soil food web to stop making the machinery they need to be self-reliant.’
no doubt that microbes will survive, whatever happens, at least some lineages, seen the various harsh conditions they can withstand.
I find your comments about their behaviour really interesting.
Do you know this Toxoplasma gondii that makes mice fall in love with cats?
It’s probably because they reproduce better and in bigger numbers in cats than in mice, but the “process” is amazing:
Also amazing to see what tiny individuals with no brains are able to achieve:
Then one can wonder if having a brain is of any use in social organization…
Although I think it is only available in English, you might like to take a look at Dennis Bray’s book:
Wetware: A Computer in Every Living Cell.
He demonstrates how single celled creatures can do very sophisticated computations, including differential calculus.
I gave someone else a fairly long quote about Stentor, a single celled protozoan and its incredible abilities when it detects poisons in the neighborhood. It may have been as a comment on Gail’s previous post.
In some sense, we may be ‘too smart for our own good’. We can, for example, decide to continue to eat poisons that a single celled creature would not eat.
Thanks for the references…Don Stewart
Thank you Don for ref of Dennis Bray’s book.
I read your comment about stentor, fantastic.
I don’t know if we’re too smart for our own good, but maybe it’s due to that we’re not alone in our body: “a typical human digestive system contains 10E13 to 10E14 microorganisms whose collective genome (“microbiome”) contains at least 100 times as many genes as our own” (quote from Superorganisms).
We’re too many, even inside 😉
That explains all those voices I hear……
No, Xabier — that was the home brew you talked about before…
Here are microbes that can thrive even if the sun stops shining
A Princeton-led research group has discovered an isolated community of bacteria nearly two miles underground that derives all of its energy from the decay of radioactive rocks rather than from sunlight. According to members of the team, the finding suggests life might exist in similarly extreme conditions even on other worlds.
AudaxViator is really an audacious traveler: long distance deep underground, and through times…
We have known for a couple of decades about microbes and other critters living near deep-sea vents that live on chemical energy. The chemical energy is generated by geological forces which result, I think, from the gravity which formed the Earth.
The deep sea vents don’t support very many trophic levels, because the energy is not very concentrated.
are we really “too smart”?
“Collectively, the researchers wrote, “bacteria can glean information from the environment and from other organisms, interpret the information in a ‘meaningful’ way, develop common knowledge and learn from past experience.” Some can even collectively change their chemical “dialect” to freeze out “cheaters” who exploit group efforts for their own selfish interest, the researchers claimed.”
quote from: http://www.world-science.net/exclusives/050418_bactfrm.htm
which is one of the links at the end of: http://en.m.wikipedia.org/wiki/Microbial_intelligence
Some others can switch metabolisms, and stock up provisions for hard times:
Sorry Gail for this off-topic discussion ; I allowed myself this last comment only because I found the quote being “not that much OT”.
Here’s a thought — if bacteria are capable of all that then could it be that we are no different than bacteria — we are self-aware of our immediate world which we seek to manipulate and change — and no doubt they too are aware of their immediate world — and seek to control it.
But bacteria likely cannot see the ‘bigger picture’ of the bigger world around them — could it be that we too are unaware of a bigger world around us as well?
I can’t tell you what that bigger picture might be (some say it is god — others say it is a creator) — because like bacteria we are unable to see beyond our noses…
I wonder what the fall back position for bacteria is when they try to conceive of the bigger picture — and of course fail.
“Do you know this Toxoplasma gondii that makes mice fall in love with cats?
It’s probably because they reproduce better and in bigger numbers in cats than in mice, but the “process” is amazing:
Toxoplasma and Religion both modify the behavior of the hosts for the benefit of the parasites replication.
One is based on modification by the protozoan, the other by a toxic meme.
Just in case some viewers on this site have not yet seen it, PennEnergy.com reports that North Dakota and Texas now provide nearly half of U.S. crude oil production. (Graphs are included.)
According to the article, Gains in Texas crude oil production come primarily from counties that contain unconventional tight oil and shale reservoirs in the Eagle Ford Shale in the Western Gulf Basin, where drilling has increasingly targeted oil-rich areas, and multiple reservoirs within the Permian Basin in West Texas that have seen a significant increase in horizontal, oil-directed drilling. North Dakotas increased oil production comes primarily from counties that contain the Bakken formation, also a tight oil reservoir, in the Williston Basin, where crude oil production growth has spurred a rise in crude-by-rail transportation. Since April 2011, the largest monthly average increase in production has come from the Eagle Ford, with an average monthly increase exceeding 32,000 bbl/d, more than twice the 14,000 bbl/d increase in the Permian. Production from the Bakken increased 19,000 bbl/d on average each month over the same period.
What this seems to mean is that, as conventional U.S. plays become ever less productive, ND and TX will turn into an ever greater share of our crude pie. The downside is that the Bakken is expected to peak in a couple of years. The Permian and EF might not be far behind.
For a long time now, various oil authorities have been saying that we need to find several more Saudi Arabias in order to satisfy increasing world demand. Since conventional oil can no longer be included in such Saudi Arabias, it looks like the money people had better keep
losing moneyinvesting in new high-tech capex and E&P to maintain (let alone increase) the status quo. Because we really have no other choice.
We probably need lots of very low interest rate debt and available drilling rigs, to keep this all going. I am not sure what we do about the roads that get worn out with all of the trucks associated with all of this.
Somebody posted a link to a recent military assessment of risks going out several decades. I can ‘t find the link anymore.
Anyway, one of the risks was that factories would run pretty much without human intervention, which would lead to massive unemployment. This is the same risk identified by Lagarde and Charles Hugh Smith.
big problem there
factories produce stuff,
people buy stuff
no employees, nobody buys stuff
automated factories stop producing stuff
then we’re all stuffed.
So now we understand why Lagarde posed the issue in Stanford in the middle of Silicon Valley.
It also raises the question: If automation is subtracting employment, is the decline in labor force participation a result of declining consumption of oil, per capita, or is it the effects of automation (e.g., Amazon putting all those bookstores out of business), or are there complicated interactions (such as social networking programs reducing travel miles and thus gasoline consumption and also reducing GDP)?
James Howard Kunstler has an interesting discussion on his blog with a book publisher. They talk about the digital revolution and the publishing of content The publisher laments the volume of badly researched, badly written, never edited content which sloshes around on the Internet. But, she reassures JHK, ‘there is an audience for your book, you just have to find it’. And how does she recommend that he find it? Blogs, face books, twitters, etc. JHK retorts that he isn’t very good at that stuff and really doesn’t want to do it, waste a lot of time at it, etc.
If you are the Bureau of Labor Statistics, you reason that an electronic book is at least 10 times as good as a paper book, so you up your ‘hedonic adjustment’ which makes inflation magically go away which means that the Feds don’t have to cough up more money for Social Security. If you are a publisher, you simply stop most book promotion, book tours, etc. because you aren’t making as much money as you once did. If you are an author, you end up working twice as much for the same money…which equates to an income of perhaps a dollar an hour rather than the two dollars you formerly got.
Ain’t it wonderful?
PS Meanwhile, it turns out that there is a noticeable dip in the traffic to porn channels on Sunday morning. People go to church, get forgiven, I suppose, and then, refreshed, go back to the usual. Many of us are very naive about the ways the world actually works.
On this topic I like to give Kurt Vonnegut his due. He covered this in 1951 in Player Piano: A novel. That is 63 years ago!
A Challenge to Peak Oil advocates from Michael Lynch posted on Forbes regarding inadequate discoveries:
“The term “discoveries” refers to estimates, at the time reported, of the amount of oil discovered. These estimates are frequently revised, sometimes down but on average up, as the fields are better understood and recovery improves over time with better technology and more investment. This is what the industry (and geologists) refer to as “reserve growthThe initial people in the current wave of neo-Malthusian arguments known as peak oil, especially Jean Laherrere, argued that reserve growth only occurred in the US and represented the use of the term “proved reserves” representing P90 or 90% probability estimates, instead of the more accurate “proved plus probable reserves” otherwise P50 or 50% probability estimates, which should on average be accurate.
Growing gap between discovery and production
No supporting data was ever presented to confirm this argument, and it has been refuted again and again by others in the industry, including the source of the data, a company now part of the IHS corporation, which Campbell and Laherrere relied on for their reserve data. Efforts to refute this, by arguing that there is no new technology or that production trends can provide accurate field reserve estimates, have ranged from incorrect to laughable.
This explains why, despite the fact that “discoveries” have been deficient in replacing production for so long without any decline in proved reserves for decades: reserve additions to existing fields typically outpaces new discoveries in any given year. The practice of postdating these additions to the year of the initial discovery in some data sets, so as used in the graph shown, misleads the novices into thinking that oil supplies are becoming more scarce, when in fact they are easily keeping pace.
A recent Forbes article from the generally polite Michael C Lynch (aka mclynch). Michael is an old friend and adversary from USENET, One List, and various Yahoo Groups. I am surprised that their are no comments.
Seeing as the Fed (and other central banks) have already propped the equity markets up to the tune of $29 trillion dollars — it would appear to me they committed to not permitting a stock market crash. In for a penny – in for a pound — in for a 100 trillion pounds… when you own the printing press it doesn’t really matter what the number is.
I would be surprised if this unravels due to a stock market crash. I think if the stock market goes down significantly everything goes to pieces.
Thank you for your replies, Robert and Paul
I place these articles more of a show of “spin” by the Power brokers and their mouth pieces. There is a massive amount of mind control out there in the public communication field. The American Petroleum Institute and other like minded Industry and Financial interests are dominating the airwaves with their message.
Like we should listen to Goldman Sachs and Forbes?
After all they would not think to ever mislead their clients/readers.
When this blows up, it will be interesting to witness the aftermath. I we are so lucky to be around.
Thanks for the link. I think that the situation with bubbles is that cheap debt availability is what tends to cause bubbles, and lack of cheap debt availability is what tends to cause bubbles to burst. The latter happens because with low wages, prices don’t rise high enough to support the amount of debt that is already outstanding. So Michael C Lynch doesn’t really have the causality right. It is not particularly bursting assets bubbles that causes oil prices to drop, although there is at least a little effect in that direction. The main issue is the fact that the same thing (cheap debt availability) is leading to high oil prices as high stock market prices.
I am not a “peak oil” proponent based in “discoveries.” We have a problem with researchers in silos. Researchers in the geological silo like to think that the amount of oil in the ground is the limiting factor, and that the shape of the curve will be the same on the downside as the upside. Unfortunately, they haven’t thought about the financial aspects (or assume they are unimportant). It doesn’t work that way. They also think that EROEI is the limiting factor. It is not.
Geologists use to state upon their curves “assuming no above ground constraints”, i.e. systemic constraints. They just leave the scissors to finance fellows as you, Gail.
careful what you say…NSA keeps a close eye on this site….
I’m afraid that just reading this blog, or even simply being not 100% establishment-friendly, is enough to be on their lists.
Nafeez Ahmed on June 13:
“Defence officials prepare to fight the poor, activists and minorities (and commies)
The self-defeating logic of militarised social science targets anti-capitalist ‘extremists’ in the new ‘age of uncertainty’ ”
” (…) As the instability of global capitalism accelerates, the ‘war on terror’ is increasingly transforming into a war on dissent – a war on everyone who either opposes global capitalism in its current form, or is marginalised by it. In a world where 85 people are collectively worth $1 trillion – equal to the entire wealth of the bottom half of the world’s population – it’s fair to say that makes most of us.”
I am a capitalist — who is an anti-capitalist. I wonder what the NSA makes of me 🙂
Maybe you should start direct negociations asap.
Mmhh … No, stupid idea, can’t trust them.
This just in….financial crisis due to oil may be delayed according to Goldman Sachs…reported by WSJ:
“Indeed, Goldman Sachs GS +0.84%’s head of European energy research Michele della Vigna reckons around $700 billion’s worth of capital spending in the pipeline may no longer be needed. The reason? Yet another side effect of the shale revolution in the U.S. Watch the video for the lowdown.
Goldman estimates that the big discoveries of shale oil in recent years have added around 66 billion barrels of crude oil resources; at its peak, that could add 8 million barrels per day to daily output.
That extra production should prove enough to meet oil demand growth in the coming years, Goldman thinks. In the jargon, it means shale oil provides the oil market with its marginal supply.
In turn, it means that any oil investments that are more costly than shale developments won’t be needed. Indeed any new projects that require oil prices to be above $80-85 per barrel to break even ought to be delayed or canceled. That could include big investments being considered in Canadian heavy oil, or in deep waters off shore.
Mr. della Vigna reckons this also potentially bad news for the oil service companies that make money helping oil companies with their big projects. As for the winners – those are likely to be companies with best roster of low-cost investments: Goldman’s top picks include BG Group, Sinopec, Santos and Afren.
Just when we thought we had it all figured out and ….
Expensive oil is ALREADY cratering the economy — and they are celebrating what exactly — oh right — the fact that there is a fair bit more — expensive oil.
I suppose if they believe that QE and ZIRP can continue to offset that niggling little detail for as long as shale doesn’t peak — then they could be right — this could go on for a few more years.
However the toxic side-effects grow by the day — the consumer is gutted — only artificial stimulants are keeping growth from collapsing under the weight of 100+ oil.
I believe in a higher power and that is why this topic doesn’t leave me hopeless. No use arguing about it as I have found it use less about religion or politics. Generally only give my opinion when asked for it. I have found if an opposing view makes you very angry you are not real confident in own beliefs
You hit the nail on the head — when all hope is lost — most people tend to believe in a higher power. Because otherwise I suspect with many people a deep depression would set in.
‘god’ is a psychological defense mechanism — it should be added to this list http://psychcentral.com/lib/15-common-defense-mechanisms/0001251
God may also be real, regardless of what list you put God on.
Yes to some he/she/it may be real in their minds — but that does not mean he/she/it exists…
There is no evidence for god because they can be no evidence for a god — because for god to exist he/she/it would have to have been created from nothing….
And if that is possible then the obvious conclusion would have to be that the universe could have been created from nothing
Or god would have to exist outside of our understanding of space and time. Perhaps we don’t understand everything.
Unlike the Pope or Richard Dawkins, I do not have a strong opinion on the existence of God in either direction. I am an indifferent agnostic. What I do latch on to is awe. Awe at the Universe, awe at life and awe at quantum mechanics. The big bang is weird, inflation is really weird. The complexity of a single yeast cell, let alone a complete plant or animal is unmeasurable. Quantum mechanics is weird, quantum entanglement is really weird.
By external measures I am “religious”. I go to synagogue services each week, and study the Bible in classes twice a week, once in English and once in Hebrew. I do this for the socializing, the ritual, the intellectual challenge, and the support I get while taking care of an ailing wife.
OT. If anyone tells you that the Bible is absolutely true, ask her what translation. Hebrew which is a language of a bronze age tribe, contains 12,000 to 30,000 words — depending how you count — is is often obscure.
I have a sister, Lois Tverberg, who (among other things) writes about the range of meanings of Hebrew words, and why Bible verses which seem to say one thing, can have a range of meanings.
I would agree that there are a range of reasons for attending church activities–many of them having little to do with believing precisely what is taught.
For sure our common representation of space and time is flawed.
What is there beyond the most distant galaxy: no space?
And “before” the Big Bang: no time?
Something huge is missing in there…
Obviously our daily environment cannot give us the correct tools to picture out the whole thing.
Mathematics can help throw a little light on the matter, but then we might not be able to really understand what it means in reality (provided that “a reality” actually exists as such).
I personally have chosen not to focus on these questions, but consider them as useful to remind me we’re only clueless dust in cosmic wind.
Wow, now this may explain why Israel is bombing the daylights out of Hamas. It has to do with Israel wanting to take away and control their energy supplies. It’s in the tune of 1.4T cubic feet of nat gas.
“IDF’s Gaza assault is to control Palestinian gas, avert Israeli energy crisis”
Is population growth factor? https://www.google.com/?gws_rd=ssl#q=population+palestine
Typo: Is population growth a factor?
Relative to your point number 6 about our dependence on concentrated sources of energy versus diffuse sources of energy.
I was just listening to a discussion between Geoff Lawton and Paul Wheaton. Lawton says that ‘the term biological farming is now very common in Australia’.
Biological farming is, of course, a turning away from the concentrated energy sources required by chemical farming and increasing reliance on diffuse sources of energy such as solar heat, plants used for cooling, falling rain water, along with some things like off-grid solar PV in modest amounts.
Lawton reports that huge farms are being broken up into smaller farms, and that huge machinery is being replaced by modestly sized machines.
Lawton credits the changing attitudes to the undeniable demonstration sites in Australia which are now 6 or 8 years old.
Wow, smart people there. Much respect. At least one smart continent.
The term biological farming might be very common here in Australia, but the activity is nothing more than niche at best, probably accounting for less than 1% of agricultural output. As a farmer and a former secretary of one of the major organic certifiers in the past, I can tell you not to believe everythiing you hear.
Most farming in Australia is mainstream relying on off farm inputs, including the organic or ‘biological’ ones.
Darren Doherty quotes some numbers on the farms that are using rotational grazing (or holistic management or whatever you want to call it) in Australia I can’t remember the exact numbers but I think it was around 600 farms. I think there are 6000 big farms in Australia (excluding small market garden farms). Do I have the right impression on that?
I don’t know how to answer, other than to say check the source of your information. It’s just not in the ballpark. Australia has a vast diversity in climatic conditions and therefore farm sizes. Semi-arid/arid areas have large grazing properties of hundreds of thousands of hectares, usually spoken of in sq km terms for each paddock. Sub tropical/semi arid areas up North have large grazing cattle stations. Most of these use rotational grazing with minimal inputs because of the widespread area per head.
In the ‘slightly wetter’ areas, where grazing rates are more intense, and most production happens, they are often mixed grazing and cropping farms. They use modern fertilizers and herbicides, probably 99.5% of them, or higher.
The person you quoted has thison their web page…. “‘Dehesa Felix’ was purchased by our family in 2006 and is a 9ha gently undulating corner block”.
That is not a source I’d want to be taking advice from.
The area they are in, the professional farms are either irrigation properties of several hundred acres, or dryland grazing and cropping properties of several thousand acres. There would also be many ‘hobby farms’ of 9ha or so in size there.
This is the typical commercial farm in that area where they have their 9ha,…
You need that size to be profitable in that type of country.
There are probbly hundreds of thousands of farms in Australia, from small horticultural upwards, but even if 600 were organic, probably higher, they are a tiny minority and most of them rely on off farm ”organic inputs”. (I know as I’ve been on the certifying committee in the past.)
Farming is simple and not possible in the oil free world of the future. You must replace the nutrients you extract from the soil, or you are just mining it. If you are just mining it, even with organic methods and rotation, eventually Leibig’s law of the minimum will catch up with you, there will be a shortage of something in the soil to decimate yield.
This simple fact, is something most organic growers eventually find out, then have to bring in off farm inputs or go out of business. It all relies on oil to move and spread on farm.
Darren Doherty makes his living mostly as a consultant. He does farm ‘makeovers’, if you will. He has had farms, sold farms, I think his family lost a farm, recently he bought some property. He and Joel Salatin in the US have a business relationship.
The results that Darren produces in the farm makeovers is, to my understanding, centered around improving water management and grazing patterns which permits increased stocking rates. He advocates spending money very judiciously on things such as key line plowing to help with the water, and portable electric fencing to help with grazing control. He thinks that a shiny new tractor on a farm is bad omen of future success.
Allen Savory in Africa, Joel Salatin in humid Virginia, the Quivira Coalition people in the Southwest US, some graziers in North Dakota, and Doherty in Australia are all doing broadly similar things, adapted to their own climates and situations…at least as I understand them. We have quite a few farmers producing beef and sheep where I live who practice similar grass management. Keyline plowing is rare here, but the initial reports I heard at the last Carolina Farm Stewardship conclave were very promising…almost magical.
If Doherty is involved in truck farming, I am not aware of it. I don’t know about grain farming. But some of the people I listed in the previous paragraph do grow some grains.
Turning to what you say about organic vegetable farming. I agree that annual vegetable production mines the soil, especially with plowing. I don’t know anyone around here who is growing annual vegetables with plowing who is accumulating carbon in the soil. I do know a few small farmers who have managed to farm with no external inputs for almost 20 years. They have paid a lot of attention to cover crops. But I think it is now apparent that turning in a cover crop does not build soil carbon.
Therefore, the next frontier is to either figure out a ‘no till’ rotation or else to rely more on home gardens where the waste can be promptly returned to the soil. I was talking to a farmer friend at a Farmer’s Market a few weeks ago. I don’t buy much, since I have my own garden. He said ‘why don’t more people just garden?’ While he is making his living growing vegetables and fruits and berries for people, he can see the cost to his farm in terms of lost nutrients and the pretty high cost of distribution. I think most thoughtful observers conclude that home and community gardens have to be the solution. I believe David Holmgren and Geoff Lawton basically support that idea.
What about grains and corn? Lots of people oriented to biological farming tend to dismiss them. For example, Vandana Shiva’s speech that Gail referenced recently belittles ‘golden rice’. Garden greens have vastly more nutritional value than the ‘new and improved’ rice. The issue there is calories. Garden greens are nutritional powerhouses but they have very few calories. Some people advocate switching to hazelnuts as our source of calories.
Some young farmers here are experimenting with grains. Masonobu Fukuoka is a source of inspiration, but the methods he used for so long in Japan don’t seem to work very well in North Carolina. Some of the young people are using the ‘no till’ grain drilled into perennial pasture which was demonstrated in Australia. Rodale Institute developed a method of drilling grains and corn into no till cover crops killed with a crimping roller…but I think it is tricky in the field. Maybe it will be perfected.
We had a cover crop workshop here almost a year ago. After looking at the evidence, it seemed to me that no till is essential in this climate if we want to build up soil carbon. I was talking afterwards with the smartest farmer I know, and he agreed.
My suspicions about the future in North Carolina:
1. Annual vegetables will increasingly be grown in gardens, with assiduous recycling. Distribution of farm products will change and become more efficient. Perhaps what Joel Salatin is doing, or some other ideas.
2. Beef and sheep will be increasingly produced using the methods I outlined above in terms of Salatin, Doherty, Savory, Quivira, etc. These methods work in North Carolina, and produce amazing results in terms of fertile pastures.
3. Fruits and berries will also be increasingly grown in home landscapes.
4. I am uncertain about grains. We might end up with grans and perennial pastures. But a lot of animal farming depends on the ability to truck the animals around. For example, you have to take the animals off the grains when they are ready to mature. How that would work out in the absence of trucks and motor fuel, I don’t know. Hazles might become a staple crop.
When I am depressed about agriculture, I go out to a friend’s farm. He has 4 acres, and an old farmhouse. He was in Africa as a ‘Christian community development missionary’. He says he learned a lot more from the Africans than they learned from him. He also liked the pagan villagers more than the Christian villagers. He has chickens, a dairy cow, and a few sheep. He spent some time on earthworks for his vegetable garden to direct and store water, mostly dug by hand. The soil, when he bought it 25 years ago was red clay clods. He began to garden it with methods which are a mixture of Emilia Hazelip and what he learned in Africa. Today, his permanent, no-till, heavily mulched beds have beautiful soil. He doesn’t work very hard on the farm. His hardest work is building 12X12 houses for people and working on Habitat houses.
What you are talking about is tiny or minisclue play farming compared to how most of our food is produced in the western world. The large farms that produce the excess that can be exported comes from big shiny tractors using lots of fuel, fertilizers and herbicides. In your country go out to the mid west and look at how they operate the big corn or soybean properties, that’s what produces the vast bulk of food, and what feeds the cities.
It is the same here in Australia. Without oil, those farms will drop production on a huge scale.
Eventually, after the collapse, when what remains of society getsit’s act together, the sort of small local farms will be all that is possible, probably runby the local warlord with his slaves tilling the soil.
Those that talk of nice easy permaculture feeding large populations with a gentle change from what we have today, have no idea.
When I was first on the certifying committee for organic farms, 27 years ago, the type of vast growth to organic was 5 years away. It’s always been 5 years away ever since.
The concept of mining the soil just doesn’t sink in does it? You have given an example of how everything is just peachy for X years. Eventually, despite whatever rotations you do on the land, you will run into Liebergs law of the minimum. Something that’s needed in the soil will become depleted, and if not replaced productivity dives. Just because it hasn’t happened in whatever number of years, doesn’t mean it wont. It’s just like saying that because the Gwahar oildfield has been producing 5mbbls/d for 50 years it will keep on doing it forever. Both statements are equally wrong, something that you and your sources of information just don’t get.
The ‘Organic’ label may be some small part of the puzzle, but, at least in the US, it is dominated by corporations with farming practices which are essentially the same as those who practice chemical agriculture. I try to buy from people I know, and I don’t care whether they are ‘organic’ or not.
The conversation with Geoff Lawton went along the lines of ‘chemical is a failing system, people can see their soil washing away, nobody is really making any money, there are credible demonstrations that there is a better way to do it, people are beginning to wake up’. For example, the Iowa State trial which lasted for 10 years comparing modern chemical farming with, let’s say, 1940 farming found that the 1940 farming produced the same and made more money because it required fewer inputs. You may dismiss the Iowa State results as ‘toy farming’ if you wish.
I prefer to look at it from the perspective that the Iowa State trial did not use the ‘best’ methods…it used old methods. I can see you are a Doomer and I doubt there is anything I can say to cheer you up.
This article is not really directly related, but it comes to mind if we want to attempt to put all human waste back into the cycle. There is a recent article titled, Poor sanitation in India may Afflict Well-Fed Children with Malnutrition. In India, much of the population does not use latrines. The resulting illness leads to much malnutrition, even when children are fed as much as they will eat. Clearly no one would consider this approach for organic farming, but if current sanitation systems don’t work, I can imagine at least some areas skipping the composting step and just using human waste directly. Big “oops!” In high density areas, the result is very bad.
Yes, this is what farmers discovered by at least the 17th century in Britain, the need for off-farm inputs, the increasing availability of which (together with scientific breeding of stock, etc) lay at the heart of the agricultural revolution and population growth of the next century. Soil must have been pretty exhausted by the 17th century after using it to feed the larger populations of the 13th century onwards. Wood was also noticeably in short supply by the end of the 16th century. They also learned then about the perils of over-enriching soil leading to short boom and long bust harvests.
I read somewhere that 98% of all ag land is farmed using industrial methods
Thanks for your comment. I have been suspicious that even with crop rotation, it is eventually necessary to bring in off-farm inputs. One issue is loss of minor nutrients, even in rotated crops. Another issue is the huge amount of soil loss from tilling the land. I suppose if all of the human and animal waste get back into the soil, rather than a lot of it getting lost in rivers, and eventually landing in the ocean, it would help the situation.
I guess the question is how far we need to go, how quickly. Is using modest sided machines really a big improvement over huge machines, or do they both become inoperable at the same time?
Gail, as I stated to Don, don’t believe everything you read. On average in Australia, farms are getting larger, especially if you look at the trend over the last 20 years. There use to be a saying of “get big or get out” when it came to farming. Even some govt schemes to help smaller farmers leave the land, often by selling to neighbours who were getting bigger. This usually happened when droughts were taking their toll, or over production and low prices for whatever commodity was produced.
The farms that produce Australia’s grain crops, mostly exported, are in very low density population areas. They are large farms using large machinery and massive quantities of fertilizers and herbicides. That would cover 99%+ of production.
Without oil, Australia could go from a massive food exporter to a net importer, except no-one else would be exporting food either, therefore collapse.
All roads of an oil constrained/limited future lead to collapse, just as you have always been writing about. The fact that so many don’t get it, means that when it really kicks in, it is more likely to be sudden, as so few are even slightly prepared.
I am the same HideAway that commented on The oil drum.
Before you make up your mind about Darren Doherty, you might like to take a look at this relatively short video:
He covers the 10 main points that he thinks are important for the future of agriculture and the planet.
As far as farming in a ‘hobby farm’ part of the country, he notes that his family has been in that area since 1850, but not on a continuous piece of property. He has consulted on well over a thousand farms across 6 continents. I believe the 600 number I quoted is his consultancies in Australia only.
The name of his farm, Dehesa, is an allusion to the thousand year old system in Spain with grass and widely spaced trees, which you will see pictured on one of his slides. I guess that is the sort of farm he wants to create on his new property. He alludes to a professor of agriculture in Australia who labeled the Dehesa as ‘the most sustainable system of agriculture ever invented’.
He is also speaking in an accent you may find refreshing. Sometimes, when he speaks in the US, some of his words escape us. He is learning what those words are and makes a point of slowing down so we can understand him.
Hi Don, that’s a very interesting video. Thanks for that.
I watched the video, nothing in there I’ve not known about for many years, bought Yeomans book over 20 years ago. Yeomans is about getting more moisture in the ground in marginal country, nothing new there.
Not once, in anything in that video is there the slightest acknowledgement of the aspect I mentioned, mining the soil.
Farmers around the world turned to modern methods of farming because the old ways of crop rotations etc were producing lower yields. It was fertilizers and trace minerals that re-invigorated many areas allowing the ‘green revolution’ to increase the lands output.
Just adding carbon is not going to help productivity if the soil is deficient in Boron or molybdenum or calcium etc.
By farming and taking produce to cities, we are mining the soil and unless we replace what we take, then eventually Liebig’s law of the minimum kicks in. Modern farming methods do it in the most efficient manner by using concentrates that are often mined elsewhere in the world. It all revolves around oil and transportation.
To simply not replace the nutrients, means falling productivity. To move less concentrated nutrients (ie manures etc) than modern farming means more oil for transportation and spreading, not happening in a world of less oil.
In this country, modern farming methods of grain growing, means planting into the stubble of last years crop after spraying the weeds, it’s called no-till cropping. It’s the organic grain producers, banned from using herbicides, that till the soil for weed control.
With modern grain growing, fertilizer is added at seed planting time, then, later more urea for nitrogen is added to the crop. Modern grain farming (with fertilizers and herbicides) uses less fuel than the organic growers, and a greater yield per whole farm as they are not growing cover crops that just get turned in.
Videos like that are for city folk that don’t have a clue how food is really grown. As I have stated often in various forums, organic farming will not save us from a reduced oil future, because it mainly mines the soil. Without modern fertilizers and herbicides yields are going to crash.
One aspect that should stand out to you from that video was the concept of taking the dairy to the cows. How stupid is that? He would have you believe that dragging tonnes of equipment around all over the place, with a tractor, including tanks and refridgeration gear and the generator to make it all run, is a good idea. Just the amount of water to wash the cows teats before milking would be tonnes, not to mention the grain feed. The extra fuel useage compared to a fixed dairy would be massive. Cows have legs and can walk. Nothing even slightly sustainable about that stupid idea.
The video is only interesting to those that know nothing about real farming.
Nobody is denying that shipping soil minerals from farm to city and not brining them back is an issue. There are lots and lots of issues with industrial agriculture (which includes the majority of what is labeled ‘organic’ agriculture). Many, many times on this forum I have pointed out the consequences of shipping fresh vegetables from the Salinas Valley in California to New York City. The solution to that problem is home gardening, which I have pointed out until moist people are sick of hearing about it
There are some open questions about shipping, let’s say, beef or grains from a farm to a city. Many times on this forum I have referred people to Farmers of Forty Centuries for a description of the labor intensive methods which were used in east Asia to recover the nutrients from the cities and get them back to the farms. If the soil is deficient in a specific mineral, then I can’t think of any reason one shouldn’t add it if one has a source for it. However, it is also true that getting the maximum from the soil food web is always the best choice. The soil food web stops functioning in the presence of synthetic fertilizers. For example, the plants stop making the sugars which feed fungi which bring them nutrients from distant places. The reason carbon is important is that carbon is the ‘money’ of the soil food web One cannot have a truly energetic soil food web without carbon and water and good soil structure. Organic matter supplies the carbon and aids in the retention of water and abets good soil structure. Plowing, bare soil, mono cropping, pesticides, synthetic fertilizers, compaction from heavy equipment…all those things destroy the soil food web.
Arguably, the two best biological farmer consultants in Australia today are Darren Doherty and Geoff Lawton. Both men go out of their way to acknowledge the debt that we all owe to our predecessors: the Aborigines, Yeomans, Christine Jones, and on and on. Both men do bring some new tricks…it’s not just about recycling old ideas. Geoff Lawton talks about a consultation he was awarded by some pretty wealthy landowners. They brought in experts who represented all the schools of thought, who each told them what they would do with the property. When Lawton got there, they asked him about the previous proposals. He said ‘sure, all those are good…but what we need to make sure of is that it all works as a system to solve all the problems’. And he got the job. So the best people are thinking in systems, and using new methods as well as traditional methods.
To the central question of whether it is impossible to export ANY fertility off a farm without damaging the ability of the farm to produce. On this forum I have expressed my uncertainty. Some scientists seem to think that it is possible to keep the export loses below the replenishment rate from weathering. The Chief Scientist at Rodale (whose name escapes me at the moment) seems to me to be in that camp. Others think we need to bring nutrients back from the cities…which gets into biosolid recycling and the dependency of current methods on fossil fuels.
My conclusions are:
1. A healthy soil food web comes first. Stop plowing, synthetic fertilizers, pesticides, herbicides. Positive steps to retain soil moisture.
2. No bare soil…just as Darren Doherty says.
3. More gardening with assiduous recycling.
4. Move from genetic poverty to genetic abundance.
5. I don’t know about biosolids.
6. I’m not sure about remineralization. Cautious self-interest says get it while you can.
7. Stop manufactured food…for health reasons.
8. Reduce distribution costs…hard to do.
I’m sure I should add some more, but that’s enough. Darren Doherty and Geoff Lawton are doing good work. Even if they do not have every single answer, they have enough to keep us busy for a long time.
This is my comment on your post below, for some reason itwont let me post there.
“2. No bare soil…just as Darren Doherty says.”
It’s the modern big machinery farms that have no bare soil. It is the ‘organic’ ones that still practice this as theyare not allowed to use herbicides. No bare soil means a continuation of modern grain farming, which of course can’t happen in an oil reduced world.
The ploughing to turn a cover crop in is what old or new organic farms do, to prepare ground, weed free, for cropping. It is a waste of land and a reduction of yield from the property.
You don’t seem to understand that modern big machinery farms, don’t leavethe soil bare. They have no need to as a herbicide spray will kill the weeds and prepare the ground for direct seeding.
You are providing the exact reasons why I think we are doomed. Organic farming cannot produce the same production, and for the most part is mining soils that have been mined in the past, another aspect most don’t understand. The energy involved to return nutrients/minerals from cities to farms, hundreds of km away, is just not going to be available.
The Seis brothers in Australia were the first farmers I heard about who planted C3 grain crops into predominately C4 pastures. I don’t believe they use herbicides, but I could be wrong on that:
The Seis method is applicable in the temperate zones, but I don’t know about the sub-tropical or tropical areas.
A different method which does uses reduced herbicides with little or no commercial fertilizer is covered in this talk. You will see that in the Menoken Farm example, average yields are obtained with reduced herbicides and no commercial fertilizer, and they get additional crops besides corn. Please also note the frequent references to bare fields. All farmers in Australia may use cover crops, but they are far from universal in the US.
Innovative No-Till Using Multi-Species Cover Crops to Improve Soil Health
Here is a picture of the Rodale roller crimper. While I am a gardener, and definitely don’t use something this size, my understanding is that the rolling needs to be precisely timed to the impending maturity of the cover crop, when it has not yet set seed but is susceptible to the roller blades. I see the roller in some of the pictures from North Dakota, which is using scientifically formulated mixtures. I have seen pictures from Gabe Brown’s farm where he has cover crops of various kinds growing right between his rows of corn. As the talk makes clear, there is a negligible loss of water storage from the cover crops. (North Dakota probably gets about 15 inches of rain each year, much of it in cloudbursts.) I would like to know more about the details of killing the cover crop or just knocking it down and letting the vigor of the C4 crop take care of putting it in the shade pretty quickly.
No-Till Roller Crimper
I would consider all of these as ‘biological farming’, in that they are all clearly aimed at using the biology to accomplish as much as possible and to minimize chemical use. I don’t care whether they conform to the rules of the ‘Organic’ label or not.
As for grains. Lots of people don’t like them. You can check Badgersett in Minnesota for the sales pitch on chestnuts and hazelnuts as the replacement staple crop. If you want to hear a couple of hours talk, I will find the link and send it to you. I made a separate post today talking about Chris Martenson and a new study which elucidates the fall of the civilization in the Southwestern US more than a thousand years ago. Some blame may lay at the feet of maize (we call it corn), which grew to comprise 80 percent of their calories. It all ended in overshoot and bloodshed and the virtual depopulation of that region. Toby Hemenway thinks the calorie density of grains and maize encourage more breeding. There is evidence to support that in other critters
Joel Salatin has a video where he attacks grains.
I don’t know. My own thinking is that whole grains are probably OK, but when they are used in industrial food they are quite dangerous. They are equivalent to sugar when they are processed.
Have a friend whose family has a station north of melbourne — very marginal due to water issues — when the big drought hit they all sunk very deep bores — and once sunk even if the rains do recover the bore is a sunk cost — so you might was well use it because it will increase yields…
So like in California everyone is just humping and pumping away sucking the deep ground water reserves dry
This will end in tears of course – dry ones of course
I noticed you didn’t comment on the mobile dairy and what a stupid idea that is. I also noted that you again pointed to heavy machinery as the ‘savior’. In an oil constrained world that wont work!
Trust me, I’ve been to many farms seen many more on paper (during the certification process) and read all about what people are going to do. Just about everyone has the right intention, motivation and attitude to make a difference in agriculture as in away from the normal.
The reality is they all end up having to get off farm inputs of some description, they all continue to use fossil fuels, and would be totally lost without them, that includes the farms and methods you have shown. I make and run my tractor off bio-diesel I make myself. I have a lot of olive trees planted, so that in the future I can get oil. Yet I know that none of it is enough. A tiny part unavailable for the tractor, and game over, even for those with the best intentions.
I’m a big believer in Jeff Brown’s net export math when it comes to oil availability in the not so distant future, and see what he has come up with as a best case solution. When I talk to farmers about what they will actually do if they can’t get the fuel they need (add fertilizers + herbicides to this or in organic farmers cases fuel, chook poo, wood chips,rotten hay etc), they inevitably talk about looking after their own first.
This means less output for others!!
The feedback loops created by farmers having less outputs, means drastically less exports of food products, which means extra trouble for the desperate food importers. The middle east is a big food importer, skyrocketing food prices there means trouble in their oilfields, much worse than the arab spring of a few years ago.
Less oil, food production will collapse further, in a terrifyingly fast feedback loop.
But no-one sees it.
I sent a separate response on the ‘portable dairy farm’.
As for your generally doomerish take on survival. It doesn’t interest me very much, because it leaves no room for maneuver. As I said elsewhere, if Stone Age happens by this weekend, I don’t think very many people will survive, and it isn’t worth spending much time thinking about that scenario. Much more interesting, and probably worthwhile, are the vast array of potential outcomes which fall between BAU and the Stone Age.
Do you know John Kitsteiner? He is an MD who practices permaculture gardening and farming. His current post is about remineralization. He devotes a paragraph to Elaine Ingham’s evidence that there are plenty of nutrients in the soil, the issue is availability. The availability issue can be addressed with a healthy soil food web.
Elaine’s work is controversial. Kitsteiner outlines the alternatives, and doesn’t come out with any ringing declarations. I remain somewhat agnostic about everything. I have seen the effects on my own small pieces of land when I just feed the microbes…and I am not doing it nearly as well as the guys in the videos from North Dakota. The science they are using is still beyond me…but it is inspiring.
This is a good point!
Trying to discuss all this face to face last night, with a professor with a double science PhD. (one of which is in pollution-emission control in US industry—so no dimbo–you might think
1–The USA can grow as much fuel as they need–me..But what about corn prices? Answer, poor nations are irrelevant
2–‘They’ (the oil and coal industry/big govt) are suppressing new energy sources
3–Shale oil will save the economy
4–new oil will ‘always’ be discovered
5–‘They’ (again) will always come up with energy solutions if the above doesn’t work
Seems stupidity isnt the exclusive preserve of the stupid
Well, I observed this among scientists and mathematicians at Cambridge: high intellect doesn’t rule out wishful thinking, irrationality and plain gullibility outside the field of expertise, or even within it. Very few people are capable of taking a broad informed view -often because it doesn’t interest them – fewer still are very observant or have the desire to enhance their observational skills or inform themselves beyond their comfort zone.
Now, back to occult numerology and the Magick Year of 2014……!
Lot’s of very smart people believe in god…. I think the same dynamic is at work … when they are unable to face up to something such as death — or in this case the end of civilization and likely death of them and everyone they know and care for — people grasp for anything that brings comfort – regardless of their IQ and education
I have Faith too: in a big glass of Xabier’s home-brew.
And by the time I get to the Magick number 7, nothing much worries me.
Numerologicallly-directed behaviour clearly works!
Mix your passions, play 7-14-21 !
Salud to you, too! If possible, I shall report back from the Other Side, which is where I would end up with that quantity. Which brings in Christine’s Oiuja board: she’ll be busy with her hobby.
(Apologies to all for lowering the tone once more. )
It may actually turn out that the people who believe in god (or God or Nature) are correct. We have a huge number of researchers trying to figure out how the world and the universe is as perfectly put together as it is. Some people think all of the physical order is just by chance. Somehow the big bang “just happened.” Other people think that there is a force behind the way the world is connected, and all the physical rules we keep discovering.
I have a hard time figuring out how the people who believe there is no god are so confident in themselves. The fact that the religious writings of various groups are flawed is hardly proof of anything.
“Other people think that there is a force behind the way the world is connected, and all the physical rules we keep discovering.”
But then the question arises who or what has given rise to that force, an how come it is so perfect that it can create a (perfect?) universe for humans?
Believing in a creator seems akin to kicking a can down the road.
I think the entire paradigm is wrong, applying sequential (time-based) thinking may not be the right way to go about this question. Though how we would need to think about this? I sure don’t know.
Perhaps the creator created time as well. Perhaps some things are beyond our understanding.
Perhaps the Creator created time as well. This makes the situation totally beyond our understanding.
“Perhaps the Creator created time as well. This makes the situation totally beyond our understanding.”
There are many things beyond my understanding 😉
But as long as we subscribe to cause-effect relationships, even a creator must have had a cause to come into existence.
When we leave the cause-effect relationship behind, then coincidence comes into the picture… for both the creator and the scientific explanation.
Perhaps there are many parallel universes elsewhere behaving in entirely different manners. Our knowledge is not sufficient to explain how all of this came into being. That is the reason for the many myths from many cultures, trying to explain the what happened, how. “Big bang” strikes me as a totally inadequate myth, since with our understanding of cause and effect, “big bangs” don’t just happen.
It’s “big bangs” all the way down!
I have no problem with the theory that there is a ‘master mind’ behind the universe — some unknown force that created it — in spite of the fact that the obvious question arises which is — who created the creator?
Maybe something can be created from nothing — maybe the universe was created from nothing — or the creator of the universe was created from nothing. Something had to come from nothing….
What I do have a problem with is the utter nonsense that this creator would send his son down to earth to perform miracles — that the son rose from the dead — that what he left behind demands money — is entirely corrupt — and that the creator who is so powerful that he can create an infinite universe — is so petty and arrogant that he requires that man get down on bended knee to worship him on a regular basis.
It would also appear that the Creator and his son were not aware of various things including the fact that the earth is round not flat — rather strange that as the Creator he would not have known that…. and of course anyone who stated that the earth was not flat risked death — because of course that would expose that the the god gig was a complete fraud.
Further on this — if there is a creator then surely the creator is more likely to be what we refer to as the ‘devil’ rather than ‘god’
What benevolent loving god would create a being that is inherently evil – then tell him that if he is good he will be rewarded with honey and milk (and virgins)
Surely he would just create a world that is full of honey and milk (and virgins) and install us there immediately.
Or maybe he just likes to do twisted experiments on his creations — like let’s stick a bunch of humans on this finite planet I’ve created over in this corner — and give them intelligence — and let’s sit back and see how that turns out.
Twisted… very very twisted.
As I said, the issue is balance. How do we need to act, to bring balance into the world?
“It would also appear that the Creator and his son were not aware of various things including the fact that the earth is round not flat — rather strange that as the Creator he would not have known that….”
That is not quite fair, everything a creator would have told us is passed down through people. Honest people as well as dishonest people. We simply have no way of determining what the original message of a creator was.
As such, I do not believe you can deduce the existence or non-existence of a creator by the apparent knowledge of his worshippers.
We have a collection of myths, told by people based on their limited knowledge. We cannot expect these myths to explain scientific information that was not known at that time.
Rien – Jesus and God and the Holy Spirit are one and the same (I was unfortunately forced to attend Catholic school until grade 8 so I know this…)
Surely the Jesus would have known the earth was round – since he created it.
So surely he would have passed along the good word that the world was not flat?
Perhaps over dinner when someone mentioned the earth was flat he might have chuckled and said no my good friends — it is round.
Along with how many other things that he would have known…
I guess he was too busy setting up the business that is religion that requires followers to give money and beg the saviour to include them in heaven.
Just because something cannot be explained or is beyond our understanding I do not see why we would default to the god explanation.
On what basis?
Why not instead default to an alien explanation? It makes about as much sense to me as god…
Why do we have to choose ‘god’ — and define him/her as someone who demands worship — who gives us rules that go completely against our nature…
And why are we special? And animals not? Where do they go when they die? Why don’t they get to go to church? We plop out babies just like rats — we get diseases just like other animals — we die just like they do. Why are we the ‘chosen ones?’
Who even says we are more intelligent that other beings — I fail to see that we are — so what we have developed tech advances — all that has done is signed our death warrant as a species — is that smart?
There is absolutely zero logic to this position.
The only logical position when it comes to creation is that:
– we have not the slightest clue how the earth and universe were created
– we cannot rule out that something created this
– but that would mean accepting that a drowning person can pull oneself out of the water by the scruff of the neck
I am not about to accept some fairy tale told by some peddler of myths – whether he is named jesus, or buddha, or allah, or Charles Taze Russell or joseph smith or jim jones…
Because that would require that I reject logic.
Paul, I am not asking you to reject logic. Instead I would suggest to use only logic to determine the possibility of the existence of a creator. Do not listen to those who claim to have the answers and use their “knowledge” to further their own agenda.
Disclosure: I am an atheist.
I forgot to mention Ron L. Hubbard.
Hmmm… maybe I should make up my own religion — it appears to pay very well.
You need to learn balance with natural forces. If you can do that, you can set up your own religion. If you can’t, you need to look at religions of others, including “paganism.”
You got it, Rien, deductions are very dubious.
I’ll finally throw my 2 cents into this discussion because IMHO we’re mixing up things that are very different.
In my view there are 2 aspects: first is wether god exists or not, and second is religion.
First point is a justified question, raised by the need to explain things we cannot understand, and is basically a denial of the death.
Science gives some explanations (and raises even more questions), but will never be able to answer the ultimate question: Why is there something instead of nothing? (the “something” includes the time and whatever you can imagine).
Denial of the death is also logical (beyond the fact that thinking only we humans have a soul is particularly arrogant) because we cannot imagine to just disappear, we aren’t able to conceive the nothingness. Only talking of nothingness is giving it an existence, which is contradictory. Even the quantic vaccum is full of potential particles that only need the adequate fluctuation to appear.
So IMHO it’s a dead end, and as such any discussion around existence of god (or whatever you call it) is totally pointless and time-waste.
Moreover, building anything on this presupposition seems to me doomed to failure, soon or later.
Second point is religion (I talk only for our monotheist “revealed” ones, as for more ancient ones -still alive eg in India- things can be slightly different): some crafty guys have taken advantage of the legitimate question above to pretend they had discussed directly with god and were given the instructions to insure a good status in the after-life.
This is obviously a major swindle, which in reality aims to keep full control onto the sheeple, at both micro- and macro-levels ; Paul has amply detailed this, so I won’t add to it.
Having that said, the populations got historically many benefits of being controlled: social structure, healthcare, education, etc… Probably that was the price to pay for having them obey when being asked to wage war or make all sorts of ugly things.
Most of the benefits and duties have now been taken in charge by the state institutions, but not everywhere and not at same level for all. The churches are still very powerful, and probably increasing again as governments are losing credibility at an accelerated pace.
PS: this is only my humble opinion, that doesn’t aim to stir up controversy (again!), but hopefully will give some a tool to grasp it more calmly. I personally used to be very nervous and/or taken aback (eg with Gail’s famous slide about “solutions” few weeks ago) when people talked about faith or religion or after-life, and this perspective helped me better understand ; just wanted to share.
Correct Stefeun, to me the question of whether or not there is/was a creator is unanswerable. I am an atheist because the introduction of a creator only makes things more complex, it does not solve the problem of why there should be any existence at all (including that of a possible creator).
The existence of organised religion is an meme question. As you also stated, there may be be advantages to a society if they all participate in the same rituals. History shows that religion and nationalism are two memes that have survived the test of time. I hope mankind will have enough time left to grow out of these, but as this blog shows, we may not have that time…
Don’t worry about the extra stories that go with the “master mind behind the universe” story. Ultimately, they are “carriers” for stories that show later generations “truths” that earlier generations have discovered, about how the universe really works–or perhaps, about what traits are needed to bring balance to the universe. Clearly, there is a need to fight for resources, if there are not enough resources to go around. But this need to fight for resources needs to be balanced with looking our for your neighbor–doing unto others as you would have them do unto you.
if there is a god she must have a sadistic sense of humour
The Afghan joke: ‘God has a sense of humour: he already had Hell, and yet he created India!’
(Substitute pet-hate country).
> 2–’They’ (the oil and coal industry/big govt) are suppressing new energy sources
I don’t rule out this idea – some sensible people of a scientific bent do suspect it to be the case, and the oil companies and the US certainly have the power and money to do it, by buying people out or more nefarious means. However, the Earth does not have unlimited matter: materials, metals, etc. If we had unlimited energy, our hunter-gatherer-consumers would still buy more trash than their homes could contain, so that they must resort to hiring “self-storage units”.
I remember a news item in 1979 about a man driving a car around Australia on water power. Of course, water is a constrained resource now because of population growth. Anybody who has Googled “the Hutchison effect” or “Directed Energy Weapons” will know that there is more goes no that we are allowed to know about – but STILL nobody has come up with a way of creating matter and metals from nothing. And unlimited alchemy is impossible too, because some base elements (like hydrogen) cannot be synthesised, and when they’re gone, they’re gone.
I seem to recall a nutty idea in Oz, about a CO2 tree—to suck emissions out of the air and turning it back into liquid fuel
does anybody know what happened to that
It works very well indeed, and costs nothing!
the only problem is that you have to wait 250 millions years for next harvest 😉
dont hold your breath then
Dear Stefeun and End of More
I may not understand what you guys are talking about. But we DO have CO2 trees…we call them the soil food web. They take CO2 out of the air and turn it into chemical energy which can be burned with oxygen based metabolism to feed, among other critters, humans. It takes months, not centuries.
Am I missing something?
I was just kidding.
But End talked about liquid fuel, not photosynthesis. Never heard about such process, except the natural one I mention.
I saw in a couple of years ago—a tree like structure that sucked in air, somehow process its pollutant constituents and reprocessed them into a liquid fuel
beautifully bonkers of course—but it adds a little levity to our lives
Looks like they have found more efficient ways to make money from CO2:
Nafeez Ahmed on 03 July:
“World Bank and UN carbon offset scheme ‘complicit’ in genocidal land grabs – NGOs
Plight of Kenya’s indigenous Sengwer shows carbon offsets are empowering corporate recolonisation of the South”
Albert Bates wrote a book on carbon farming. Vandana Shiva wrote a Foreword for it which warned that carbon sequestration on farms would inevitably be captured by corporations through the political process, and used in ways that are not friendly to humans.
It seems like there is the favorable story we are being told, and then a different real story, behind each of these approaches that will supposedly save us. Of course, these relocated people will use resources elsewhere, besides the “grab” by the industrial country for biofuels and whatever else we want.
Thanks for the link.
Thank you for info ; I’ve very poor knowledge in that matter.
I saw this article and thought that “solutions” promoted by BAU usually have huge pernicious effects which in the end of the day lead to situation worst than initial.
NB: worst for humans, but not necessarily for businesses, as new “fixes” may be required.
(I’ve poor level in English as well ; sorry for that)
Was that the Sorenson guy behind that one as well?— remember he was the thorium guy promoted on the Martenson blog….
I heard he was also the guy with the idea to extract gas from frozen ice deep in the ocean.
I could be wrong though
I have had enough contract with PhD’s in the last few years to be certain that quite a few aren’t all that bright, or don’t have a whole lot of common sense. Your experience seems to confirm this.
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This was emailed to me earlier — this is one of the most incredible videos I have ever seen — CNN caught out faking that their reporters are under sarin gas attack — when they are actually in Atlanta — watch how they urgently try to put their gas masks on https://www.youtube.com/watch?v=tM5ZdO-IgEE
What a complete and utter joke America has become!
And for good measure have a look at this CBC documentary on more faked news that was surely orchestrated by the CIA http://www.youtube.com/watch?v=yaR1YBR5g6U
Which is more appalling?
I agree with much of what you say — those who are truly in control — and I don’t mean the politicians or the president — they are peripherals…
The people at the very top — most definitely do not give a rats ass about you and me — they care about power and wealth — and if they had to kill you in a false flag attack to further their agenda — they would NOT hesitate. Not for a second.
Are they evil? I like to think of them as amoral – and they probably describe themselves as practical — the ends justify the means — and the ends are about power, control, wealth — and ego.
This is how it has always been — they have hoodwinked us with democracy — but ultimately we have very little say — money runs the show. Yes we are allowed to determine the mundane things – such as gay marriage — but when it comes to the real issues – those involving money and power — anyone who things their vote counts — is dreaming.
A couple of areas where I differ…
I think die-off is a better descriptor of what is coming — kill off makes it sound as if they have a choice. There is no choice – because when the oil stops the food stops — rationing will be pointless — because when Walmart’s shelves empty – they will stay empty. So why bother stockpiling food and trying to feed 7.2 billion people?
In every crisis there is opportunity (as Geithner said in 08) — and what a great opportunity to rid the world of ‘feeders’ and ‘breeders’
Now these people may be able to preserve their positions at the top for some time — they will use fuel stockpiles to power up the armies — and they will continue to live behind their gates (or on their isolated islands?) — but make no mistake — when the stockpiles run out they are dead meat — energy is wealth — all the gold in the world will do you no good when the only energy available is muscle and wood.
Of course the heads of their armies might recognize this in advance — and they might turn on their masters like rapid dogs.
If the Marie Antoinettes of the world are up their in the palaces thinking that they will come out of this smelling like roses — that they have prepared for what is coming — I would suggest all bets are off this time around.
When this ship goes down there are no lifeboats — we all get thrown into the ice cold water… and having a bag of gold in your pocket will not save you — in fact it will be a double whammy – because the hordes will be looking for scapegoats…
I agreed with everything you wrote, Paul.
Of course, the general overall die-off only has some special cases in the forms of “kill-off.”
The basics are the chronic problems inherent in the nature of life. Once one has life, then there must necessarily be death controls, which direct evolution, by selections of which forms of life are able to continue, compared to which do not. All life would be reproducing at an exponential rate, but for the various ways that evolutionary ecologies develop to live within limits, which are steadily directed by natural selection.
As human beings become more self-aware, they become more aware of natural selection, which then becomes artificial selection, to some degree. However, my two points were that human ecology was actually dominated by deceitful death controls, to the degree that any kind of sane public debate about those is practically impossible.
The greater tragedy is the longer term consequences of successful short-term strategies, which is a pattern found over and over again in natural evolution. Our civilization is primarily controlled by lies backed by violence, because that worked best in the short-term, while the longer term consequences of that have practically no effect upon politics.
The real feed back loops were money and power from lies and violence, which then could reinforce themselves with layer after layer of bullshit about that. The industrial revolution amplified social pyramid systems by orders of magnitude. However, there was never any better consideration of what should be done, since that did not matter much, when what actually was done depended upon operating systems of legalized lies, backed by legalized violence, which were based on deliberately ignoring anything that they did not like.
The basic problems with coming to terms with the limits to growth of the industrial revolutions are that the financial accounting systems are fundamentally fraudulent, and therefore, can not be simply reconciled with the natural world, because the only way to do that is understand how and why the financial systems ARE enforced frauds.
The difficulties that bogus bookkeeping get into when they encounter real limits to their growth, and therefore, must be transformed to adapt to that. It is NOT a straight forward process, because the established systems are based on enforced frauds, which makes changing way more hyper-complicated.
In my view, authors like Gail Tverberg, and MANY OTHERS, tend to underestimate the degree to which the real systems were made and maintained by evil, and have plans based on similarly extrapolated evil. Furthermore, on a deeper level, it is entropy itself which is “evil.” The biggest problems are that the established systems operate through deceitful death controls, to the extreme degree that rational public debates about better death controls is practically impossible. Since the death controls are necessarily central to everything else, changing the established systems to adapt to real limits is way harder than merely any kind of “rational evidence and logical arguments” approach may imagine should be possible.
In that context, I enjoy reading Tverberg’s articles. She does a much better than average job. However, she shies away from facing how much worse our problems really are, due to our society being controlled by lies, backed by violence, so much, for so long!
Please concentrate on maintaining a good credit score and purchase you dopamine from your nearest corporate sponsor. Otherwise, please step onto the bus, we’re here to help you.
When the only energy is muscle and wood then you want to be king. Not a bad life hunting in the king’s forest. Staying toasty warm by the fire maintained by the servants.
Actually, one wants to be a servant: kings get assassinated. It’s what people forget about feudalism, it generated a lot of domestic employment at the Palace or Tower or whatever. Until the 17th century, servants generally slept in the same rooms as their masters and mistresses – all the comforts! Worth emptying the chamber pot for.
Similarly, people might hate religion, but that made for a lot of nice cosy jobs in which one did….nothing at all! Clever peasants became priests…..
New Survey States Economic Collapse is 99.9% Unavoidable in 2014
Read more at http://usfinancepost.com/new-survey-states-economic-collapse-is-99-9-unavoidable-in-2014-20184.html#PvgD4zqpvJzEURmU.99
“Meanwhile, William Hunt Gross, founder of PIMCO, one of the largest global asset managers of the fixed income investment world, warned of “supernova credits.” He explained that his company has two billion dollars at risk if cheap money from the Federal Reserve explodes.
“Investment banking a decade ago only promoted the development of small business, but it is now being dominated by leveraged speculation,” Gross said.
The world is caught in a mega-bubble that has no name and analysts warned the Federal Reserve that the bubble “is about to explode, as did the Asian financial crisis years ago.”
The paper, which focuses on data, research, and tips from financial advisors, warned that millions of investors have no idea what will happen. Sooner or later there will be “another ugly battle” related to debt and the markets will be “crippled”.
Gary Shilling, columnist for Forbes, warned of an expanding bubble. He calculated a very slow real GDP growth for the next eight years of only 2%, and promised an even more serious global slowdown over the next generation.”
One can not say we weren’t aware
I am sure Bill Gross understands the nature of the problem…
It will be interesting what sets off the next monetary crisis….as John Paulson said several years just after the 2008/9 crisis, the Central banks can only hide their band aid for so long.
He doesn’t seem to understand the oil and other resource problem, though. He does see part of the problem.
Is it a true article? Didn’t been able to find the sources (wsj links are wrong and just didn’t found Gross saying that, nowhere)
“1 million gallons of oil-drilling byproducts leaked into N. Dakota drinking water”
That is why Germany has just banned fracking until it is safe with non toxic chemicals at least
Pick your poison – poison water — or end of civilization:
The title is a more hysterical than the story itself. I would like to see a story based on a some more understanding of what really happened. It could be terrible, or not so terrible, depending on how thing work out.
I follow Hanlon’s razor: Never attribute to malice that which is adequately explained by stupidity. I don’t things will be as bad as you say.
>> never attribute to malice which can be explained by stupidity
I used to hold that view as well, now I hold the view that we are rules by meme complexes.
I rather speak of meme complexes than of memes. A meme complex consists of memes, but the interaction of these memes is what shapes our world.
Memes are strange things, it is not possible to push memes upon people, people have to be receptive to them. Which means that the meme itself must have some beneficial property for it to be accepted.
IMO this explains why people in aggregate seem stupid, while people as individuals are relatively intelligent. Even in the most backward communities. The aggregate is the result of the meme complex.
Can people be manipulated? sure, control the meme and you have some level of control over the aggregate. (Though this is not a simple one-to-one relationship) The way the high and mighty try to control the aggregate is by jumping on memes that they like, and start pushing these through speeches and media. They may try to start memes but that does not seem like a very effective way of achieving your goal. Its much easier to pick a meme that is already acceptable to some people and push that onto the rest.
Control by “them” is in this view not a hierarchical control, but much more subtle and it exists in cooperation with the controlled. “They” cannot steer us like a ship, but they can provide a wind that keeps on pushing in a certain direction. Btw “they” should in this sense not be read as being a single group with a single purpose, but rather a diverse group with many purposes.
PS: As such I do not subscribe to most conspiracy theories.
Yeah, there are two basic stores of human information, the genes and memes, or the biological and the cultural. Those interact through having a brain, the biology builds, through which can then flow cultural information.
The crucial feedbacks are the ways that force can be applied to the bodies which have the brains. The cultural complexes, or systems of memes, evolve in hyper-complicated ways, because of the ways that lies can be backed up with violence.
The social systems we live in now are almost totally dominated by sophisticated systems of slavery, which are primarily cultural artifacts, or meme complexes. However, it was crucial to those developments that the old fashioned slavery was basically “Do what I say, or I will kill you,” and that CONTINUES in the ways that legalized lies are backed up by legalized violence.
Of course, there is no one single group who are in total control. However, there was surely a long, long, long history of backing up lies with violence, in which almost all the language that we use was based on that history, so that people think in ways which depended upon countless times where conflicts were resolved by fighting, where the best at deceits prevailed.
The true bottom line is that brains need air, food, water and shelter for their body. Thus, the degree of freedom that brains have to indulge in meme complex creation is limited by that reality. What is astonishing is the degree to which human brains can imagine things, however, that imagining brain still need to be a body.
Of course, everything that one studies becomes more complicated, the more than one learns, with there truly never being any limit to that. All models are subject to the principles of measurement. The relationships of being able to have ideas which survive is hyper-complicated in a world where social success was based on deceits and frauds, which the undeniable basic facts about the history of war and finance.
My main point with respect to running into limits is that will NOT be done sanely, due to the degree that the triumphs of controlling society through systems of legalized lies, backed by legalized violence, drive that society insane. The more pressure from limits, the more insane that society is going to become!
“The social systems we live in now are almost totally dominated by sophisticated systems of slavery”
You got it BTL!
Many meme’s have no other purpose than channeling wealth from person A to person B. Just like socialism (which is also a meme complex). And just like socialism they will eventually kill their host, though there are some meme complexes that can last very long time, centuries even. And example of these would be some of the religions.
Maybe the issue is that we have instincts of various types, including an instinct to want to preserve our own life, and an instinct to have things as good as we can have them–which in turn equates to using as much energy as is available to us. These instincts lead to overpopulation and competition for scarce resources. Things don’t turn out as nicely as we would like.
Yes, apes with atomic bombs is as bad a mismatch of instincts with emerging reality as possible, so far!
Instinct plays a big role as well, but instincts are derived from the genes while memes are copied from other people.
I.e. global warming is a meme, gasping for air when falling into the water is instinct.
Going of on a tangent: GW is a meme seemingly without benefit for the people who hold this meme. However the govt and business leaders have happily pushed this meme in order to garner support for new ways to extort money. In this way govt and other influential people can hijack memes to control the population. And though the measures “to battle GW” are backed by guns, as long as people subscribe to the meme they will happily self police, pay up and grumble when people around them do not believe in GW.
(Btw I am convinced that the GW meme has a benefit for the believer as well, but that is to be found on a more psychological level. As is often the case with memo’s. Some more very important memes: People are inherently bad, Capitalists are bad, We need religion to have a decent moral, We need a central authority to enforce good behaviour, ect etc)
In fact this thought originates from Napoleon Bonaparte:
Never ascribe to malice that which is adequately explained by incompetence.
MSM — on energy.
Fossil industry is the subprime danger of this cycle
The cumulative blitz on energy exploration and production over the past six years has been $5.4 trillion, yet little has come of it
blockquote> A large chunk of US investment is going into shale gas ventures that are either underwater or barely breaking even, victims of their own success in creating a supply glut. One chief executive acidly told the TPH Global Shale conference that the only time his shale company ever had cash-flow above zero was the day he sold it – to a gullible foreigner.
The Ambrose-Pritchard article is pretty good, until he goes off on the same “solar and wind will save us” silliness as everyone else at the end.
On a slightly different topic, a WSJ headline is,”Slowing Customer Traffic Worries Retailers.” Warm Weather Hasn’t Dispelled the Doldrums; Container Store Cites a ‘Funk’
The Ambrose-Pritchard article is pretty good, until he goes off on the same “solar and wind will save us” silliness as everyone else at the end.
On a slightly different topic, a WSJ headline is,”Slowing Customer Traffic Worries Retailers.” Warm Weather Hasn’t Dispelled the Doldrums; Container Store Cites a ‘Funk’
‘stronger job growth’
I suspect the senior editors issued an edict saying that all staff writers MUST use the phrase ‘stronger job growth’ at least once in every piece they write this week.
Repeat a lie enough times….
The thing is there is no stronger job growth — what is happening is full time jobs are being shed (-523,000 of recent) and replaced by low paying part time jobs. People with part time jobs consume very little — many of them are on Food Stamps.
But the pundits remain confused — there is strong job growth but GDP crashed 3% (or 6% if you use real CPI numbers)
Duh… how hard is it to connect the dots for these people???
This level of profound stupidity as demonstrated by supposedly smart people should be taught in every MBA course 🙂
Yes, we’ve had the ‘Jobless Recovery’, and now across the advanced economies it’s: ‘Dead-end Jobs Recovery’. The consequences of this for the mass-consumption economic model are self-evident.
And those dead-end jobs are in process of being destroyed by automation. Here in the UK we are increasingly being forced to use automatic check-outs in shops, by the simple tactic of not manning the normal ones.
Most of us in the UK value Ambrose for his entertainment value: he clearly often has a strong drink before writing,in the true tradition of journalism and is best enjoyed with one in hand. For every hit in his articles, there are a dozen wild misses.
Journalism is entertaining. I studied history with someone (not a top student in terms of grades, but respectable) who went on to write on finance for the FT – with no experience in the City of London or any kind of financial role. His articles were, according to friends in the City, surprisingly good and well-informed. But they scratched their heads over how he did it, knowing him well. Then he revealed the truth: they were being fed to him, he just sat with recording device and then worked it all up in his own style. He now writes novels and believes he is an artist.
He is part way there — he loses me:
“They are likely to be left holding a clutch of worthless projects as renewable technology sweeps in below radar, and the Washington-Beijing axis embraces a greener agenda.”
Back to the drawing board for Ambrose.
Pritchard is a top finance journalist – up there with James Saft — but they just can’t seem to get their minds around this — I suppose that if they did, they’d have a hard time doing their jobs.
What is the point of analyzing the economy when you realize the only issue that matters is the end of cheap oil. Everything else becomes white noise.
Now I suppose you could work off that premise and then attempt to explain how various policies are aimed at one thing — to keep BAU going for as long as possible…
However if one went down that path I don’t imagine one would be employed for long at the DT (or any MSM). Bad news sells (as does sex) — but explaining how the world is about to end — well — that might kill circulation.
People like happy endings.
This is what I fear more then debt and money. Social revolution starting from Texas state. So many immigrants are showing up in Texas. Texas might declare secession in an attempt to control the situation and bypass the current federal laws. Texas declaring secession will probably start a social revolution through the whole USA against the government. Some poor people born in USA wonder why the government does not help its own people but it is ready to help none USA citizens.
This is a good video of poor people saying what they think about the current immigration situation.
Notice what the black guy say at 1:40 min.
Armed militia sets up Texas command center to ‘fight for national sovereignty
Same patern as the bundy ranch story.
The comments will give you a feeling of what the population think.
Now I am waiting for the next headline something around this line , the US gouverment send the army to stop the militia group.
Historically, it has been territories that feel that they have the wealth that want to secede from what are perceived to be sinking countries. Texas with its oil might be in that category. Scotland wants to secede from the UK; Catalonia wants to secede from Spain for the same reason.
True, but there is also a lot of irrationality in the Catalan and Scottish positions, which has historic roots, -and the Basques too, who also have a nationalist minority. The wealth of these regions is highly debatable, but certainly the perception that a more prosperous independence is possible is being fostered by politicians. In the Basque Country the slogan is ‘Spain is Sinking US!’, which although clever politically is actually nonsense, in fact the region is highly privileged fiscally: but true believers do not think too deeply.
Hmmm, send the children to the Vatican in Rome, maybe that will change their doctrine in regard to birth control
That logic falls down entirely in the ME. The Islamists in Gaza as an example want the entire lands of Israel given they’re sworn to her destruction. Israel is far wealthier and prosperous than Gaza…
THE CHARTER OF THE HAMAS
In the Name of Allah, the Merciful, the Compassionate
“Israel will rise and will remain erect until Islam eliminates it as it had eliminated its predecessors.” The Imam and Martyr Hassan al-Banna May Allah Pity his Soul
Immigration is awesome – as long as they arrive in chains at the bottom of ships 🙂
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Wall Street and OPEC Bullish on World Economy next year and growth in oil consumption:
Rising U.S. oil consumption will reverse a four-year demand decline in rich nations and drive a pick up world-wide next year, the Organization of the Petroleum Exporting Countries said Thursday.
The assessment—the first given for 2015 by the oil producers’ group—shows the U.S. is scooping more of its own oil amid a production boom just as OPEC’s role continues to decrease.
In its monthly oil market report, OPEC said global oil demand growth will pick up next year amid robust economic growth. World consumption will increase by 1.21 million barrels a day in 2015, compared with a rise of 1.13 million barrels a day this year, the group said
I am wondering if part of what OPEC is saying in this report relates to its own production and exports. It doesn’t have a very favorable view of them. So to counterbalance this poor situation, it needs to have non-OPEC countries producing more, and using more of their own oil.
Yes, Gail, seems with economic growth the need for increase oil production goes hand in hand.
If there is a constraining factor, it would be the supply of liquid fuels, as you have stressed here many times
Interesting article on MarketWatch by Paul Farrell on why all is “baked in the cake” as Gail would like to state:
4 reasons conservatives love global warming, won’t stop it
Commentary: We’re addicted to economic growth, consumer consumption
America’s trapped in a great partisan divide … in an gapping inequity chasm … in our collective brain’s inner battles that reflect the inability of world leaders to work on common goals to reverse global warming. This world has fragmented, is now an anarchy of 206 sovereign nations, each obsessing over its own myopic version of the American Dream hypnotized by capitalism, driven by new billionaires with massive egos, more interested in their own short-term economic growth than saving the global environment.
Yes, our world has a bizarre death wish, one few will admit. It will take a global catastrophe to awaken us. Capitalism has lost its soul, has no moral conscience. Instead, capitalism is now just an addictive drug that has turned everyone into consumption addicts who need money for the next fix, the next new thing. We’ve lost the ability to stop the cravings … are in denial of our addiction … blind to the coming disaste
Most of us will not survive. Planet Earth may well fall down to Bill Gates’s upper estimate of 8.3 billion, to Jeffrey Sachs’ 5 billion, maybe even down to the 1.9 billion of 1900.
Paul B. Farrell is a MarketWatch columnist based in San Luis Obispo, Calif. Follow him on Twitter @MKTWFarrell.
Capitalism has eaten everything it could, so a few years ago it started to eat itself (as planned)
I’ve read Farrell from time to time — and he gets it. However the audience on that site is comprised mostly of hysterical right wing fanatics who taunt Farrell.
This amount of ignorance makes a sane and functioning government impossible:
“90 percent of the Republican leadership in both House and Senate deny climate change
17 out of 22 Republican members of the House Committee on Science, Space and Technology, or 77 percent, are climate deniers
22 out of 30 Republican members of the House Energy and Commerce Committee, or 73 percent deny the reality of climate change
100 percent of Senate Environment and Public Works Committee Republicans have said climate change is not happening or that humans do not cause it”
Maybe that is the plan?
i hear this kind of angst often. it is founded on a meme that if more people admit to what is happening that will change things… and yet my good “green” friends, who readily admit and bravely see what we are doing to our global life support system, continue on with normal “consume and waste” behavior… and honestly with 7.2 billion people is there really anything any of us can do to change what is unfolding?
i have worked very hard on my personal “lifeboat”… trying to incorporate resiliency and sustainability into my life and property. will that change anything? it is doubtful.
Please see my article, Oil limits and climate change-how they fit together. Also, the world does self-correct over the long term, under the Gaia Theory. This is not to say that humans are not affecting the climate currently–just that the forecasts are not correct. Also, the world is not at risk; it is human population that is at risk. But we are the ones growing rapidly in population, apparently leading to the Sixth Mass Extinction.
Dear Kesar and Xabier
Some things to think about in terms of Lagarde and soft landings, rapid return to the Stone Age vs. sliding down Hubbert’s Curve, etc.
First, Jody Tishmack suggested (in private correspondence) that humans are like monarch butterflies. The monarchs are entirely dependent on milkweed for their continued survival. As humans eradicate milkweed, we eradicate monarchs. Humans may be, or have become, entirely dependent on fossil fuel powered industrial civilization for our continued survival. I think Gail subscribes to a version of this theory.
Second, there is the thought that Elites practically never give up their prerogatives. Consequently, we are doomed to pursue financialization to the bitter end. So Elites will never, in fact, allow their claims on the future to be written down to realistic levels…no matter what the IMF does or doesn’t do. Or, alternatively, that most people see financialization as ‘real’ and so will enthusiastically support the Elites as they take us to our Doom. Evidence supporting the gullibility of humans comes from the malleability with which we rewire our brains. For example, an experimental subject sitting at a table with their hand behind them, but looking at a rubber hand on the table. The researcher strokes the hidden hand. Pretty quickly, the subject ‘feels’ the hand on the table being stroked. Similar phenomena are exploited by the operators of interactive computer games. So humans can be rather easily fooled in certain circumstances.
Third, a look at what some of our relatives are capable of doing.
From Wetware, by Dennis Bray, page 14.
‘the most intricate behaviors so far recorded in unicellular animals have been found in organisms attached to a surface rather than swimming free. Stentor spends most of its time attached to water plants or debris by an irregularly shaped foot embedded in a transparent tube of mucus. Its slender body and flattened, discoid mouth cavity are lined with fine cilia. Beating of these cilia sets up continued currents of fluid that carry particles of suitable size into the mouth cavity. The animals then decides whether they are edible or not. Particles of food are retained and ingested, whereas indigestible particles are ejected. The organism can also turn or sway on the end of its long stalk, thereby pointing its mouth cavity in selected directions.
A fine current of water squirted at the open disk caused the cell to contract in a flash into its tube. After about half a minute the animal extended again and the cilia resumed their activity. A second application of the jet of water, however, was then ignored, and the animal continued with its feeding activities. Jennings ( the scientist) observed a similar sequence of ‘surprise’ response followed by rapid acclimatization with a whole variety of stimuli….the animal displayed a simple form of memory.
Jennings found, however, that a potentially injurious stimulus, such as a cloud of particles of the red dye carmine introduced to the feeding disk, evoked a richer set of actions. The stentor at first makes no response, taking the obnoxious particles of carmine into the pouch and into the mouth. After a short time, though, it turns to one side by bending its long stalk as if to move its mouth out of the path of the cloud of noxious particles. This may be repeated: the animal twists on its stalk two or three times about it long axis. If the repeated turning to one side does not relieve the irritation, a second strategy is tried. Beating of the ciliary hairs on the body is suddenly reversed in direction, thereby causing particles in the disk and in the pouch to be ejected. The reversal lasts but an instant before the usual current is resumed. If the irritant particles continue to arrive, the reversal is repeated two or three times in rapid succession.
If stentor still does not get rid of the stimulation in either of the ways just described, it contracts into its tube. In this way, of course, it escapes the offending cloud, but at the expense of losing all opportunity to obtain food. The animal will now remain in the tube about half a minute before again cautiously extending.
What happens now? Suppose that the water currents again carry noxious carmine grains into the feeding disk. The stimulus and all the external conditions are the same, so will the stentor go through the same routine? No. The animal has become changed by its experience and tries a new strategy. This time, no sooner do the carmine particles reach its disk than the animal contracts fully into its tube. The sequence may be repeated many times. Each time it stays a little longer in the tube and seems to be more reluctant to emerge.
Finally, it contracts violently and repeatedly while still enclosed in it tube, so violently that the foot attachment breaks and the animal is set free. Stentor leaves its tube and swims away, avoiding if necessary the cloud of carmine and other obstacles, and sets sail for a new home. (Follows a description of its construction of a new home)
THIS ENTIRE PATTERN OF ACTIONS IS PERFORMED BY A FLUID-FILLED SAC OF MEMBRANE LESS THAN A MILLIMETER IN LENGTH!’
Back to me. An optimist might reason that humans should be at least as smart as a stentor, and exhibit such intelligent behavior when confronted with a challenging situation. The optimist will be looking for evidence of adaptive behavior on the part of at least some humans. The eusocial aspects of human life complicate things…can a small group of sane humans survive in a politically organized large group of insane humans? That territory, of course, is explored by Orlov and Albert Bates and similar thinkers and doers.
My advice to people is to keep an open mind, and look for evidence. I see some evidence of adaptive behavior, as in my description of the couple with half a dozen jobs.
Please listen to this background music http://www.youtube.com/watch?v=-b5aW08ivHU&feature=kp as you read the following:
Japocalypse Now – Machine Orders Crater 19.5%, Biggest Monthly Drop On Record
“Bye, bye, Abe” Just when you thought Japanese macro data couldn’t get any worse… it does. Plumbing new depths in the “you can’t print your way to prosperity” plan, Japanese Private Sector Machine Orders collapsed 19.5% month-over-month – the largest monthly drop ever (as the dragged-forward pre-tax-hike demand left a hole the size of Fukushima behind it). With Abe’s disapproval ratings soaring and inflation surging, hopes for more ‘bad news is good news’ QQE should be quickly dismissed.
This raises a philosophical question nearly as profound as “If a tree falls in a forest and no one is around to hear it, does it make a sound?”
Namely — if Japan increases it’s already astronomical rate of printing money out of thing air to say the equivalent of USD100,000,000,000,000 (is that the right number of zeros for trillion???) — and all measures of economic production (e.g. machine orders) crash down to absolute zero….
Would the people of Japan not be eating dog food warmed over fires made of plastic shopping bags?
Or in other words — can the global economy continue to ‘exist’ in its current form even if there are no jobs — no production of anything — but!!! — the spin masters continue to tell everyone all is well — all is recovering — and the Fed continues to churn out tens of trillions of dollars each month — and continues to use that cash to pump up stock markets, property markets, bond markets….
I would also like to ask — if you truly believe a mirage is real — does that make it real?
Ancient Chinese saying: When you have built a house of cards — you cannot allow a single card to fall — or the entire house will come down.
Just watched the spin on the unemployment numbers here in the United States on Corp Media TV. There is a RECOVERY, jobs prove it!
Top of the Market?
The media mogul has a habit of buying at the top of the market.
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What do Rupert Murdoch’s $80 billion bid for Time Warner and Fed chair Janet Yellen’s mid-year report to Congress yesterday have in common? Both may well be signals of a market top.
Let’s start with the news Wednesday: Murdoch has a track record of making bids that mark the end of bull runs. As Peter Atwater, a behavioral economist who runs the firm Financial Insyghts, pointed out to me, Murdoch’s $5.3 billion acquisition of Chris Craft in 2000, his $5.6 billion acquisition of Dow Jones in 2007, and his $12 billion bid for the portion of BSkyB that he didn’t own back in 2011 all coincided with market peaks. Shortly after all these deals, stocks fell.
Likewise, Janet Yellen’s speech Tuesday on the state of the U.S. economy, in which she said she thought technology stocks (including biotech and social media in particular) were overvalued, was an important signal that valuations are stretched, and we may be in for a fall. Yellen tends to worry less about bubbles than some other economists, so when she starts to fret — and especially when she says so publicly — that’s telling.
It’s no wonder that all this is happening now. With more than $4 trillion of Fed money sloshing around in the markets, and jobs numbers looking better, there’s a vigorous central banker debate going on about how soon to raise interest rates (which inevitably dampens market sentiment). Likewise, it’s worth noting that the last five major merger manias in financial history happened at the peak of markets, and ended with a big drop in equities. That happens not only because companies have a lot of money to play with at the top of a market, but also because they have in many cases exhausted growth strategies, and mergers are an easy way to get a further quick-hit boost in stocks (see my column on that topic here). Mergers are often presented as the beginning of a corporate growth streak — more often than not, they signal the end
Mergers make it look like things are getting better, and make it harder to compare history. But the article is probably right–they are more likely a signal of the end.
Could this be the catalyst that tips this thing over?
Credit Guarantees, Fraud, Corruption Fuel China’s Credit Bubble; Bankruptcies Rock Loan Guarantors; Beginning of the End?
Massive speculation works fine as long as home prices rise. Speculators can unload the property down the road to the next greater fool.
But when the pool of greater fools runs out, or prices tumble for a lengthy duration, the party is over.
We appear to be at that stage now.
Read more at http://globaleconomicanalysis.blogspot.com/2014/07/credit-guarantees-fraud-corruption-fuel.html#3JohcEEMOELw3Vg7.99
Of course central banks will do absolutely anything to prevent this from collapsing — but I am wondering what can they do in this case?
Might the Fed enter the market – in secret — and get involved in buying China property directly – or indirectly via the likes of Black Rock?
Remember – they are into the stock markets with $29 trillion dollars already — nothing would surprise me.
I don’t understand how the Chinese credit system “works.” I am doubtful it works like the credit system in the West, given the many scandals with respect to auditing. It seems like it may be pumped up for a long time, even though by Western standards, it should start failing.
In China if you can’t get a loan from a bank you can go to the unofficial lenders.
I was recently offered an opportunity to generate 8% on cash on 3 months terms — of course it was ‘very safe’ — I didn’t get into the details because I know bloody well nothing is safe right now particularly something returning an annualized 8% but I know it was china related …. the unofficial lenders need capital from somewhere of course…. so they will pay higher rates…
What is happening in China right now is on a scale exponentially greater than what happened in the US 2008.
There are those who believe the Chinese are magical people — that somehow things are always different there — that they can defy the laws of physics — nobody defies the laws of physics — hey, when you are printing more money to loan it to insolvent entities just so they can pay interest on earlier loans they will never pay back….
You know the writing is on the wall
Gail, all credit banking systems work like this:
Debit – loan receivable
Credit – loan payable
Debit – loan receivable
Credit – loan payable
That’s right, each party issues a ‘loan’ to the other. In other words, there is nothing stopping you from loaning money, in the form of a note, to a friend, family member or bank. The beauty of a central banking system, backed by the taxing power of the state, is that they can:
– charge loan origination fees
– charge interest on outstanding balances
– allow draws on their credit account to float as notes & checks ie MONEY
The third point is why it’s absolutely imperative that confidence be maintained at all cost. It’s also why the first requirement of any central banker is to lie. Since banking is not anchored to any real assets, bankers can siphon off 3-5% of the “money” in circulation – literally created out of thin air – because they have first access to asset purchases before inflated volume raise overall prices. Rinse, wash, repeat.
It’s all a huge scam, one that is well understood and perfectly acknowledged by anyone at any meaningful level of government (civilian & military) and finance. It’s also why bankers need protection from the king/state – they are entirely vulnerable to the mob, and indeed, are sacrificed to the People on a regular basis when the Ponzi inverts. It’s just the cost of doing business – bankers know the ultimate score is they have to pay to play.
This person has a nice review of these concepts:
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
it is indeed a total scam.
Hey how about this — can Obama let me own the printing press — and I print cash and loan it out at interest — wow wouldn’t that be awesome — that truly is money for nothing — money truly grow on trees – for some.
Now why don’t governments just print their own money instead of allowing the central banks to do this?
Why don’t governments keep the interest charged to fund schools, and roads, and hospitals and other things that benefit the people?
I wonder — how do the people who own the central banks get governments to agree to this BS? They must be very very powerful people.
Again: Give me control of a nations money supply, and I care not who makes it’s laws. Mater Amschel Rothschild.
Keep in mind if you control the money supply — you control the corporations and the politicians, the military — that would make you the grand master of the world — and everyone would dance to your tune and kiss your ass — because money talks — and everyone wants some.
I understand this.
I can also understand how banks in general might have $29 trillion to invest in the stock market, assuming that there are not very stringent requirements on where they invest their funds.
What I am confused about is how much money central banks have available to invest in the stock market. I was thinking they mostly bought up bonds (treasuries, mortgages) with newly issued funds. If they are like the US Federal Reserve, and usually don’t have big balance sheets unless they conjure up funds out of thin air to buy up debt (US Treasuries, Mortgages), then it wouldn’t seem like they have a lot of funds lying around to invest in the stock market.
A related issue is that casualty insurance companies are regulated as to how much they can invest in the stock market–investments in bonds are generally considered safer than stock investments. Won’t banks start running up against capital requirements (Basel III or otherwise) if they invest too much in stock markets?
maybe central banks and the FED can keep buying up the debt and then destroying any record of it….who is paying attention anyway?
“maybe central banks and the FED can keep buying up the debt and then destroying any record of it….who is paying attention anyway?”
To a certain point they can, it would be an interesting experiment to collect all non-personal debt, hedges and future obligations into a single entity and see how much of this cancels each other out.
But it won’t be the cure-all, eventually you will be left with a lot of debt and obligations that are held by real people and those people will object quite sternly against declaring these null and void.
The latest from Kuntsler — amusing stuff
I like Jimmy, but boy does he put himself through some mental contortions to rationalize his thesis that it’s all just collective insanity driving this crazy train. If he could only step back and realize the core essence of banking is organized no differently than the Vatican. That is, they know full well what they are doing, and have been doing exactly that for 1,000s of years.
Here’s a simple exercise – replace every instance of banking is his essay with the church. Now, are we to ignore the millenia long history of ecumenical councils that have plotted out church doctrine? Likewise, are to we to flippantly blow off the long history of banking in the Holy Roman Empire, the Medicis, the sequential CBs in Spain/Holland/England that established and drove those respective reserve currencies, and then the creation of US CBs, culminating in the 3rd one, the Federal Reserve?
In his view, it appears history is all just one big fvcking coincidence. While 98% of the population (the serfs) were out toiling in the fields, the leaders just sat around and partied hearty? Or, rather, they clearly understood the principles of legal control & perception management, and the power of debt-money illusion, to keep the game in play?
He’s either blind or corrupt; since he’s smart, I’d place my money on corrupt.
Goebbels nicely articulated the concept of the “big lie”. Unfortunately, those who fight for the truth must be eternally vigilant, which is why people like Kunstler must be regularly confronted. So, here’s a very simple logic tree to evaluate Kunstler’s claim that our present situation is one gigantic clusterfvck without intentional design:
I. When Andrew Jackson stated:
“Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!
Was he (a) correctly identifying the problem (at that time); or (b) a confused adherent to wild conspiracy theories?
If a is true, then:
II. (a) Have men reformed themselves so this is no longer true; or (b) men are essentially unchanged ie they will plot & design ways to game the system?
If b is true, then:
III. Are there (a) sufficient laws, regulatory oversight and legal justice procedures to protect us from similar actions; or (b) have they been so thoroughly corrupted as to be worse than worthless, in that they now PROTECT fraudulent criminal behavior?
In chess, skilled players know many moves ahead when one has lost ie he will be mated if play continues. So, with the mutual understanding of both, one resigns. Your move.
Andrew Jackson was a horrible racist, but he was the last President to confront Wall Street.
“Give me control of a nation’s money and I care not who makes it’s laws” Nathan Rothschild
I would suggest that this takes things out of the realm of whacko theory…
The central banks are very obviously the vampire squids that are wrapped around the planet.
The only question I have is — when the SHTF — will the squid die? I suspect so.
Energy is wealth and power… and other than trees for heat and cooking … human and animal muscle power… and solar energy shining on the planet …. energy as we know it is about to become obsolete
In his latest speech to the retarded, it’s noticeable that First Demagogue Obama – asking people to be ‘hopeful, not cynical’ (how sweet) – points to all the peripheral things like gay and equality legislation,etc, but doesn’t touch on core issues – like the corrupt financial system. Legislation is indeed the theatre which distracts. Rothschild would approve.
Thanks for the link. Kunstler reads this site and a lot of others, and comes up with some pretty good posts.
Gail – they should have you as the first guest — if they are serious about this….
I have forwarded some of your articles and asked if they might do something on the energy issue — nothing so far
Guys…. scanning through the non-mainstream media headlines like those in
show clearly we are pushing things to the limit or we are clearly way way beyond overshoot region (i.e. stretched the rubber band so hard) and just tiny spare from anywhere in the world will cause a massive change (collapse/crash/correction/etc) in very short period of time..
Senior Bankers Warn: ‘It’s Crazy, It’s a Boom, It’s a Gold Rush’
Bank lending has been setting new records since mid-2013. If the prior credit bubble – when too many loans were made helter-skelter by loosey-goosey loan officers before it all blew up in 2008 – was spectacular, this one is even more spectacular. It’s based on the principle that the US economy can only grow if bank lending balloons.
In November, bank lending began to tick up at a faster clip. Then suddenly with the New Year, as if someone had opened the floodgates in a drunken stupor, bank lending started to soar. Perhaps it was a consensus within the business community that interest rates would soon go up, that the Fed would not only taper QE out of existence but also raise interest rates sooner than its cacophony suggested, that this was the last chance to get free or nearly free dough, after inflation, and they all started borrowing like madmen.
The phenomenon has become reminiscent of the final ramp-up in lending seen in mid-2008, even as all heck was breaking loose in the financial sector.
And part of the borrowed money is being plowed into the US fracking boom where drillers have gotten on the terrible treadmill that fracking represents. The sharp decline rates of fracked wells force drillers to drill ever more just to maintain production, and they can never get off the treadmill because production would swoon, and with each well they have to borrow more, and then they require more production just to service the ballooning debt. Revenues have risen 5.6% over the last four years while debt that drillers have piled on has nearly doubled [read… The Fracking Shakeout].
“It’s crazy, it’s the boom, it’s the gold rush,” a senior corporate banking executive at a large US bank told the FT. “Small companies are becoming large companies overnight.
In this new normal the above is considered BAU ….
Thanks for the link. This is the spectacular graph from the article:
The article also mentions other uses for the borrowed money, including dividend payments and funding stock buybacks.
When things get really bad — you have to lie — and you have to make loans to anything with a pulse.
In the interest of keeping BAU going perhaps we should all see if 100% financing is available on a Tesla — it’s not like you’d have to pay the loan back.
This interview reinforces what Gail and others have been saying about an infinite growth global economy and finite resources. Rick Rule made some interesting remarks while recently traveling the world.
One thing that stood out was that “China needs LOT’S OF RESOURCES to keep it’s economy moving. Quote: “I was in Singapore, Hong Kong, Thailand, Canada, Africa, the Midwest of the United States, and other places. The travels that really stuck out to me were first of all in Asia, where I met with some pretty big Asian investors. They reinforced in my mind the need for Asia to have access to natural resources as well as the resources they need access to in order to run capital-intensive, export-oriented economies.”
He also stated that other nations along the Congo Line are quickly becoming more prosperous and are consuming more. We are talking about 4 billion who have found a more prosperous way of life. Quote: “Four billion people at the bottom of the demographic pyramid worldwide are rapidly becoming more rich. This may be rich from a very low standard, but from a material perspective they are consuming far more than they ever have. You and I buy services, time, tourism, whatever. When poor people in Rwanda get more money, they feed their kids better food, and they may replace an adobe or mud structure with a cinderblock one, or they may replace a thatched roof with steel. They upgrade from walking to a bicycle, or from a bicycle to a motorcycle.
The important thing to remember — and this visit really drove it home for me — is that 4 billion people worldwide are becoming fairly rapidly more rich, albeit from a low basis. And they aspire to the same standard of living you and I have, and that’s a material standard of living. And this idea that this secular bull market in raw materials has somehow run its course is preposterous because it ignores mathematics and demographics, and you have to travel to see that.”
So you have more resources being extracted from the planet at a much faster rate.
“And this idea that this secular bull market in raw materials has somehow run its course is preposterous because it ignores mathematics and demographics, and you have to travel to see that.”
copper ores in the .2% range are now being mined… nuff said.
Nothing says raw material depletion more by comparing old and new car and the usage of plastic them
Well as someone who fixes cars for a living there are several reasons for plastics in cars and I don’t chalk it up totally to raw material depletion. Plastics are used as an effective tool to lower vehicle weight to increase fuel mileage. Plastics are much lighter than metal and most new space age plastics are incredibly light and are as strong as metal. Saturn cars was one car division back in the late 80’s that nearly perfected the design.
Another reason is, accelerated planned obsolescence. Car parts that use a good portion of plastic materials have a much higher and faster fail rate.With the advent of the internet most car dealers don’t make the profits they used to on the sale of the vehicle but now rely on the service side. Selling parts that are designed to break quicker and servicing those vehicles is the key to staying in business.
This is the price per feet of plastic water line for your house 16.00$/50 feet = 0,32 $ /feet
This is the price per feet of copper line for your house 70,00$/30= 2,33 $ /feet
This is the price per feet of a steel water pipe for your house 20.00$/ 6 feet = 3,333$/feet
You can easily see that steel is much more expensive. It would be much more expensive to build a car with steel that it is with plastic.
I agree with you about planned obsolescence but the main reason is still raw materials depletion.
They put more plastic because people cannot afford better quality car built with more steal.
The same goes with water line in new house. All new water line are build with plastic because copper is too expensive, or if you want copper is more depleted then oil.
Your comment on plastics and vehicle weight. I bought a new Prius a few months ago. The Prius line has gone through quite an amazing evolution since I bought my first one 10 years ago. One of the features it has now is a visual display of your miles per gallon in real time.
If you are stopped at a light at the bottom of a hill, and you begin to accelerate your car up the hill, the mileage per gallon is miserable, as you are overcoming inertia and also lifting the car…maybe 10 or 20 miles per gallon. Just cruising at a constant 50 miles per hour is likely to show 60 or 70 miles per gallon.
I drove 25 miles today through light traffic, with the new ‘smart traffic lights’, and recorded over 60 miles per gallon for the trip. The Prius is pretty light, with a lot of plastic content. The contrast with a big old Volvo from 1950 could not be more pronounced.
I drive a 2001 Volvo S40. It’s worth about $5000, but has stopped declining in value. I drive less these days, about 6000 miles per year. So I need about 300 gal per year at a cost of $1200.
Let’s say I got a newer car, a prius from 2010, that doubled the fuel economy. I would save $600 per year. A Prius that new would cost me around $11000 including tax, so it’s easily 10 years of driving just to gain back the cost of the purchase. In addition the car will not be worth $11000 after 10 years of driving so add the depreciation. On top of that there is the cost of a new battery, which I would not count on after 14 years of operation. My insurance rate would likely go up from my current $37 a month.
So as we can see with this little example, a 13 year old car which is paid off is *very* competitive in cost of ownership compared even to a newer used car. It’s obvious that a new car is a lot more expensive to own, but I find it interesting that even a somewhat newer – very fuel efficient – car is hard to justify.
another option rather than the silly hybrids and all that embodied energy is to buy a small, efficient manual transmission car… and drive it wisely.
my 2009 toyota yaris cost $11.5K new and this tank (hy and city) is averaging 54.8 mpg.
this speaks to the common behavior of increasing technology to try to stave off depletion. same thing with the tesla… higher tech inherently has more embedded energy, so we see a nonsensical increase in consumption in an foolish attempt to decrease it.