An Energy-Related Reason Why US Healthcare Outcomes are Awful

Back in January 2013, the US Institute of Medicine published a report called U.S. Health in International Perspective: Shorter Lives, Poorer Health. This poor health outcome for US citizens is in spite of the US spending twice as much as a percentage of GDP on healthcare as other high-income nations.

As an example of the problems the US has, the report showed the following exhibit, pointing out that the US has made much smaller advances in life expectancy since 1980 than other high-income nations.  The US is now seventeenth of the seventeen countries analyzed in male life expectancy, and sixteenth out of seventeenth in female life expectancy.

I am sure I do not know all of the reasons for the US divergence from patterns seen elsewhere, but let me try to explain one energy-related reason for our problems. It has to do with a need to get a wide variety of nutrients at the same time we need to balance (Energy In) = (Energy Needed for Life Processes), in a period of time when the food we eat is increasingly of the “processed” variety. There may also be an issue of eating too much animal protein in our food mix, thanks to today’s ability to ramp up meat production using grains grown and shipped around the world, using fossil fuels.

An Overview of Energy-Related Modifications to Food

If we look at primates in general, it is pretty clear that all of the nutrients such animals need come prepackaged in the food that they gather with their limbs. They get the level of exercise they need from gathering this food and from their other daily activities. They have a pretty good balance between (Energy In) = (Energy Needed for Life Processes), without any special effort.

We humans have been modifying food for a very long time, dating back to the days of being hunter-gatherers. Our earliest changes were successful from the point of making humans more dominant. They allowed us to grow larger brains and allowed human population to grow.

The changes made in recent years, thanks to abundant fossil fuels, seem to be excessive, however. The new processed foods are often missing necessary nutrients and fiber, providing mostly empty calories. It becomes a balancing act to get enough of the right nutrients without filling our bodies with calories we don’t need. Some foods (juices, added sugars, very finely ground grains) are sufficiently different from natural foods that our systems don’t react properly to such food. Also, the exercise our body was expecting is often much reduced.

The way our current system works, the food that is closest to its original form is hardest to ship and store, so tends to be highest-priced. The most calorie-dense, over-processed food tends to be cheapest. As a result, the least-educated people (who tend to be poorest) tend to be most damaged by our poor food supply. According to one study, at age twenty-five, men with less than a high school education have a sixteen-year shorter life expectancy than men with a graduate degree.

Of course, at least part of the problem is the disproportionate lack of health care of less-educated US citizens. There are no doubt effects related to feeling like second-class citizens as well, because of reduced work-opportunities for those with poor educations. But having to work around a poor food system with an inadequate income is an issue that likely plays a major role as well.

How Did Humans Develop Larger Brains?  

There is a popular belief that eating meat made us human. While meat eating may have played a role, there seem to be other factors as well. National Geographic in an article in the September 2014 issue, The Evolution of Diet, observes that modern day hunter-gatherers typically get about 30% of their calories from meat. When meat supplies are scarce, they often live for long periods on a plant-based diet. The article says, “New studies suggest that more than a reliance on meat in ancient human diets fueled the brain’s expansion.”

The point National Geographic mentions is the one I have brought up previously–the theory advanced by Richard Wrangham in Catching Fire: How Cooking Made Us Human. It seems to be the ability to control of fire, allowing humans to burn biomass, which set us apart from other primates. This allowed us to cook food, and in doing so, allowed the food to be more easily chewed and digested. Reduced chewing time freed up time for other activities, such as making tools. Nutrients could be more easily absorbed from cooked food. The fact that the food was easier to chew and digest allowed chewing and digestive systems to shrink, and brains to increase in size. It probably also made it easier for more human children to survive.

Furthermore, we now know that some other primates eat meat, so humans are not unique in this regard. Chimpanzees even hunt animals for their meat. National Geographic reports that baboons eat birds, rodents, and even the young of larger mammals, such as antelopes and sheep. But meat makes up only a small share of their diet. We also know that when monkeys are fed a diet that includes very much meat, they gain weight and experience degenerative diseases like humans.

Food Processing: A Little of a Good Thing vs. Too Much of Good Thing

The experience with cooking some food back in hunter-gatherer days shows that a little help in getting more nutrition from foods can be helpful. Plant cell walls are made of cellulose. Cooking vegetables helps break down these cell walls, making nutrients more accessible. There are other ways of processing food–pounding meat to make it more tender or using a blender to chop it into fine pieces. Humans have been milling grains for a very long time.

But it is easy to overdo the processing of food, especially with the help of fossil fuels. Grains can be ground very finely, far more finely they would have been ground, years ago. Sweeteners of various types can be derived from sugar cane, sugar beets, and corn, and added to products of many types. Parts of fruits and vegetables that are deemed “less desirable” such as skins can be removed, even if these parts have a disproportionate share of the nutrients in them.

There is even a second order kind of change to the food supply that can be put in place. For example, before recent “improvements,” cattle ate a mixture of grasses and digested them in their four-part stomachs that are designed from that purpose. Now cattle are being fed all kinds of foods that are not suitable for their digestive systems, including corn and dried distillers grain, a byproduct of making ethanol from corn. There are many other shortcuts taken, from hormones to antibiotics, so as to produce more meat at less expense. Our bodies aren’t necessarily adapted all of these changes. For one thing, there is much more fat in the beef, and for another, the ratio of Omega 3 fatty acids to Omega 6 fatty acids is badly skewed.

There is the additional issue of whether plants actually contain the nutrients that they did years ago. Many of us have learned Liebig’s Law of the Minimum, which states that plant growth is not controlled by total amount of resources available, but by the scarcest resource. In other words, a plant needs all of its nutrients–just adding more of the most abundant nutrient isn’t good enough. But Liebig’s Law of the Minimum doesn’t remove all deviations in nutrient quantity. Plants will still grow, even if some of the trace elements are present in smaller than the usual quantities. Adding fertilizer (or even crop rotation) does not entirely fix this situation. We still end up with soil that is deficient in some micronutrients. This situation tends to get worse with time, as our sewer systems send human wastes out to sea.

In recent years, we have been hearing more about the role intestinal bacteria play. The processing of our food is especially likely to remove the less digestible portions of our food that these bacteria depend on for their nutrition. This adds yet another dimension to the problem of food that deviates from what our bodies are expecting us to eat.

Thanks to fossil fuels, processing of all kinds is cheap. So is adding sugar, artificial colors and artificial flavors to help cover up deficiencies in the original crop. The shortcuts farmers take, including heavy use of fertilizers and pesticides, are ways to produce food more cheaply. The food we end up with is inexpensive and convenient, but doesn’t necessarily match up well with what human digestive systems are adapted to.

What Kind of Exercise Do We Need? 

The story I keep reading is that we need a certain amount of high-intensity intermittent exercise to help our bodies operate as they are intended to. Running for even an average of five or ten minutes a day is said to reduce cardiac causes of death by 30% to 45%, and to increase overall life expectancy by three years. We can easily imagine that hunter-gatherers quite often needed to sprint from time to time, either to avoid predators or to catch potential prey. The finding that human beings need short bursts of high intensity exercise, such as running, would seem to be consistent with what our ancestors did. We also can’t sit for long periods–something our ancestors didn’t do either.

How about strength training? One thing that occurred to me when I visited India is how unnatural it is to have chairs to sit on. Much of the world’s population, even today, sits on the ground when they want to sit down. Needless to say, people who don’t sit on chairs get up from the floor many times a day. This is a type of fitness training that we in this country miss. We in the West also don’t squat much–another type of fitness training.

Even with the beneficial effects of exercise, some researchers today believe that food plays a more important role than exercise in obesity. (Obesity is linked to ill health and shorter life expectancies.) A recent study by Herman Pontzer and others compared the energy expenditure of the Hazda hunter-gatherers to Westerners. The study found that average daily energy expenditure of traditional Hazda foragers was no different from that of Westerners, after controlling for body size. The body seemed to compensate for higher energy expenditure at times, with lower energy expenditure at other times.

Conclusion

It seems to me that our appetites don’t work correctly when we fill ourselves with overly processed foods that are lacking for essential nutrients. We often don’t stop eating soon enough, and then we quickly feel hungry again. In part this may be from eating highly processed foods that would never be found in nature; in part it may be because the foods are missing the micronutrients and fiber that our bodies are expecting. Low-income people especially have a problem with such diets, since diets rich in fruits and vegetables are more expensive.

Many people believe doctors can fix our health problems. Looking across countries, diet and public health issues tend to be much more important than the medical care system in the health of a population. With most chronic health conditions, doctors can only take bad health situations and make them somewhat better. High rates of illness and increased mortality remain, similar to what we see in the United States.

Many of us have heard about the so-called calorie restriction diets of monkeys. This is a misnomer, in my view. In at least one version of it, it is a comparison of monkeys fed a low calorie diet that provides a wide range of nutrients found in vegetables, with a diet typical of Americans. If, in fact, we humans also need a wide range of nutrients found in vegetables, we should not be surprised if we have similarly poor health outcomes.

According to the graphic, Owen, 26, is affected by arthritis. His skin is wrinkled and his hair is falling out. He is frail and moves slowly. His blood work shows unhealthy levels of glucose and triglycerides. Canto, 25, is aging fairly well.

I personally have been eating a diet that is close to vegetarian for twenty years (heavy on vegetables, fruits and nuts; some fish and diary products; meat only as flavoring in soups). I also cut way back on processed foods and foods with added sugar or corn by-products. When I first changed my diet, I had a problem with arthritis and was concerned that I was at high risk for Type II diabetes. I lost weight, and my arthritis disappeared, as did my blood sugar problems. In fact, I rarely have reason to visit a doctor. In many ways, I feel like Owen on the right.

As I pointed out at the beginning of the post, we need to get a wide variety of nutrients at the same time we need to balance (Energy In) = (Energy Needed for Life Processes). Back in hunter-gatherer days, this was easy to do, but it is increasingly difficult to do today. Besides cutting back on processed foods, eating a diet that is low in meat may be a way of doing this. Studies of people who eat mostly vegetarian diets show that they tend to have longer life spans. There is also direct evidence that diets that are higher in animal protein tend to shorten life spans. These findings don’t necessarily correlate with studies of what works best for losing weight, which is what most people are concerned about in the short term. Thus, we are deluged with a lot of confusing findings.

Food and health problems are issues that tend to strike a nerve with a lot of people. I can’t claim to be an expert in this area. But stepping back and looking at the issue more broadly, as I have tried to do in this article, can perhaps add some new perspectives.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Financial Implications, Food issues and tagged life expectancy, morbidity rates, mortality rates, processed food. Bookmark the permalink.

658 Responses to An Energy-Related Reason Why US Healthcare Outcomes are Awful

  1. Paul says:

    Totalitarianism, American Style – Chris Hedges

    Understanding the subtle ways democracy has been undermined in the US.

    We have undergone a transformation during the last few decades—what John Ralston Saul calls a corporate coup d’état in slow motion. We are no longer a capitalist democracy endowed with a functioning liberal class that once made piecemeal and incremental reform possible. Liberals in the old Democratic Party such as the senators Gaylord Nelson, Birch Bayh and George McGovern—who worked with Ralph Nader to make the Clean Air Act, the Clean Water Act, the Mine Safety and Health Act, the Freedom of Information Act and the OSHA law, who made common cause with labor unions to protect workers, who stood up to the arms industry and a bloated military—no longer exist within the Democratic Party, as Nader has been lamenting for several years. They were pushed out as corporate donors began to transform the political landscape with the election of Ronald Reagan. And this is why the Democrats have not, as Bill Curry points out, enacted any major social or economic reforms since the historic environmental laws of the early ’70s.

    We are governed, rather, by a species of corporate totalitarianism, or what the political philosopher Sheldon Wolin describes as “inverted totalitarianism.” By this Wolin means a system where corporate power, while it purports to pay fealty to electoral politics, the Constitution, the three branches of government and a free press, along with the iconography and language of American patriotism, has in fact seized all the important levers of power to render the citizen impotent.

    The old liberal class, the safety valve that addressed grievances and injustices in times of economic or political distress, has been neutered. There are self-identified liberals, including Barack Obama, who continue to speak in the old language of liberalism but serve corporate power. This has been true since the Clinton administration. Bill Clinton found that by doing corporate bidding he could get corporate money—thus NAFTA, the destruction of our welfare system, the explosion of mass incarceration under the [1994] omnibus bill, the deregulation of the FCC, turning the airwaves over to a half dozen corporations, and the revoking of FDR’s 1933 Glass-Steagall reform that had protected our banking system from speculators. Clinton, in exchange for corporate money, transformed the Democratic Party into the Republican Party. This was diabolically brilliant. It forced the Republican Party to shift so far to the right it became insane.

    By the time Clinton was done the rhetoric of self-professed liberals was a public relations game. This is why there is continuity from the Bush administration to the Obama administration. Obama’s election did nothing to halt the expanding assault on civil liberties—in fact Obama’s assault has been worse—the Bush bailouts of big banks, the endless imperial wars, the failure to regulate Wall Street, the hiring of corporate lobbyists to write legislation and serve in top government positions, the explosion of drilling and fracking, the security and surveillance state as well as the persecution of government whistle-blowers.

    This audience is well aware of the Democratic Party’s squalid record on the environment, laid out in detail in a new Greenpeace report written by Charlie Cray and Peter Montague, titled “The Kingpins of Carbon and Their War on Democracy.” The report chronicles what it calls “a multi-decade war on democracy by the kingpins of carbon—the coal, the oil, and gas industries allied with a handful of self-interested libertarian billionaires.”

    The Obama administration, in return for financial support from these kingpins of carbon, has cynically undermined international climate treaties, a fact we discovered only because of the revelations provided by Edward Snowden and WikiLeaks. It uses its intelligence agencies, these revelations revealed, to spy on those carrying out climate negotiations to thwart caps on carbon emissions and push through useless, nonbinding agreements. The Obama administration has overseen a massive expansion of fracking. It is pushing through a series of trade agreements such as the TPP and the TAFTA that will increase fracking along with expanding our exports of coal, oil and gas. It authorized the excavation of tar sands in Utah and Alabama. It approved the southern half of the Keystone pipeline. It has permitted seismic testing for offshore drilling in the Gulf of Mexico, the East Coast and in parts of Alaska, a process that kills off hundreds of sea mammals. It authorized drilling within four miles of the Florida coastline, violating one of Obama’s 2008 campaign promises. This expansion of offshore drilling reversed 20 years of federal policy.

    If we appeal to self-identified liberals in the establishment who have no capacity or desire to carry out the radical reforms, we will pour energy into a black hole. And this is what the corporate state seeks. It seeks to perpetuate the facade of democracy. It seeks to make us believe what is no longer real, that if we work within the system we can reform it. And it has put in place a terrifying superstructure to silence all who step outside the narrow parameters it defines as acceptable.

    The Democratic Party speaks to us “rationally.” The party says it seeks to protect civil liberties, regulate Wall Street, is concerned about the plight of the working class and wants to institute reforms to address climate change. But in all these areas, and many more, it has, like its Republican counterpart, repeatedly sold out the citizenry for corporate power and corporate profits—in much the same manner that Big Green environmental groups such as the Climate Group and the Environmental Defense Fund have sold out the environmental movement.

    To assume that Obama, or the Democratic Party, because they acknowledge the reality of climate change, while the lunatic fringe of the Republican Party does not, is better equipped to deal with the crisis is incorrect. Republicans appeal to one constituency. The Democrats appeal to another. But both parties will do nothing to halt the ravaging of the planet.

    If Wolin is right, and I believe he is, then when we begin to build mass movements that carry out repeated acts of civil disobedience, as I think everyone on this panel believes we must do, the corporate state, including the Democratic Party, will react the way all calcified states react. It will use the security and surveillance apparatus, militarized police forces—and, under Section 1021 of the National Defense Authorization Act, the military itself—to shut down all dissent with force. The legal and organizational mechanisms are now in place to, with the flip of a switch, put the nation effectively under martial law. When acts of mass civil disobedience begin on Monday morning with Flood Wall Street and later with Occupy the U.N., the face of the corporate state will, as it did during the Occupy movement, reveal itself.

    If the response of the corporate state is repression rather than reform then our strategy and our tactics must be different. We will have to cease our appealing to the system. We will have to view the state, including the Democratic Party, as antagonistic to genuine reform. We will have to speak in the language of … revolution. We will have to carry out acts of civil disobedience that seek to cripple the mechanisms of corporate power. The corporate elites, blinded by their lust for profit and foolish enough to believe they can protect themselves from climate change, will not veer from our path towards ecocide unless they are forced from power. And this means the beginning of a titanic clash between our corporate masters and ourselves.

    http://www.alternet.org/activism/totalitarianism-american-style?akid=12281.312354.hBpFE4&rd=1&src=newsletter1020319&t=11&paging=off&current_page=1#bookmark

    • Daddio7 says:

      Remember Romney’s 47%? They will not benefit from your revolution. You want to destroy the fossil fuel wealth of this nation. The poor will not get richer, most everyone else will get poorer. Get ready to make your jaunts to Bali by clipper ship. For your 1820 utopia to happen we will have to impose virtual slavery on most people. 50% of the population will have to return to the plantation, most will not want to go. Half the world depends on the excess food produced by subsidized Western farmers.
      I just read a Market Watch posting about how the world’s climate problem is because of it’s human population problem. Rich people have less children but use more resources. We have to eliminate the rich and control the poor’s reproduction rate.
      Well coordinated attacks can destroy the rich but that does nothing for the poor, you will just have even more people hating you. I have yet to see a plan that describes the effects of total war on climate change and what daily life will be for the average person who survives.
      Our modern economy is unsustainable but most corporate wealth is magnetic bits on a hard drive, it can not be extracted and passed around like a big sack of coins. It might feel good to try but there is no solution.

      • Paul says:

        I agree with you. Hedges doesn’t get it when it comes to the economy – he thinks socialism will solve everything… My take on socialism and communism vs capitalism is that the former simply burns through the earth more slowly – because they are less efficient at doing so.

        That said if it is all going to hell in a hand basket then why shouldn’t the poor get a seat at the last supper too?

        I only post Hedges to point out that the US is headed down the road to a totalitarian nightmare.

        NSA + 1.6 Billion Rounds + Attacks on Occupy Movements + Ferguson War Zone + Heavily Armored Police = Imminent Nightmare.

        Funny how those living in this are unable to see what is coming — the Germans were like that in the 30’s… ‘that could never happen here’ — it’s happening…

  2. Paul says:

    A little humour….

    Apple’s software updates are like changing the water in a fish tank. I’d rather let the fish die
    The all-new iPhones and Apple Watch can be easily avoided but there’s no escaping iOS 8

    Apple Watch The Apple Watch: only an unhealithily devoted Apple fanatic could bear to wear one.

    The past few weeks haven’t been great for Apple. First they were implicated in the stolen celebrity nude photo disaster, which reminded everybody how easily clouds leak. Correct me if I’m wrong, but I don’t think the iPhone is generally marketed as a diabolical timewasting device with the potential to wreak a grotesque and devastating invasion of your personal privacy. They tend to focus more on all the cool colours it comes in.

    Then they launched the horrible-looking Apple Watch, which does everything an iPhone can do, but more expensively and pointlessly, and on a slightly different part of your body. Only an unhealthily devoted Apple fanatic could bear to wear a Apple Watch, and even that poor notional idiot would have to keep putting their iPhone down in order to operate the damn thing. It’ll scarcely be used for telling the time, just as the iPhone is scarcely used for making calls. It’s not a watch. It’s a gaudy wristband aimed at raising awareness of Chinese factory conditions. Or a handy visual tag that helps con artists instantly identify gullible rich idiots in a crowd.

    Apple also unveiled the all-new bigger iPhone 6, and the all-new even bigger-than-that iPhone 6 Plus, which is the size of the Isle of Man and aimed at people who literally have deep pockets. By releasing two differently sized rectangles, which in turn differ from its previous range of differently sized rectangles, Apple has selfishly exhausted the global supply of differently sized rectangles. From now on, all rectangles, no matter what context they appear in, will have to be the same size. Wars will be fought to decide which dimension becomes the standard. And when mankind finally settles on a compromise, Apple is going to start on ovals.

    Edit: Read the rest of the article from this link:

    http://www.theguardian.com/commentisfree/2014/sep/22/apple-software-updates-iphone-watch-ios-8

    • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
      Jan Steinman says:

      “That little rectangular screen is so hypnotic, so omnipresent, I feel lost and sick the moment mine’s tied up doing something as uninterruptable as an update.”

      What is this “iPhone” you speak of?

      (This is coming to you from an eight-year-old computer, that can’t run more software than most i-thingies can run… but it does email and the web just fine, thank you!)

  3. Paul says:

    Hmmm… I guess the solar panels and windmills grew on trees….

    This Scottish Island Is Nearly Free of Fossil Fuels

    Eigg’s main grid is powered mostly by wind, water, and sun.

    The Scottish island of Eigg takes pride in its own self-reliance. Electricity included.

    After being bought by the Isle of Eigg Heritage Trust in 1997 (a partnership between island residents, the Highland Council, and the Scottish Wildlife Trust), Eigg has seen not only an uptick in population (currently home to 83 people) but also the creation of its own electrical grid after depending on diesel generators for years. As locals tell Reuters photographer Paul Hackett, Eigg’s new grid gets as much as 95 percent of its energy from a mix of wind, hydro, and solar power.

    The grid was subject to referendum discussions in recent months, at the same time as Scotland at large debated its vote on independence from the U.K.: Campaigners for the ‘No’ vote claimed that Scottish independence would have meant higher prices for renewable energy since the cost would no longer be shared throughout Britain. Nationalists felt that having more control over Scotland’s own resources would have meant an easier path to harnessing its own energy potential.

    More http://www.citylab.com/tech/2014/09/this-scottish-island-is-nearly-free-of-fossil-fuels/380534/

  4. dolph says:

    The circular entanglement of American involvement in the Middle East and radical Islamic terrorism are products of the system and are both needed by the system. The system in this case, being dollars for oil.

    Permanent war is the official policy of the United States. Wars are no longer fought and “won”. If a war was ever won, and followed by peace, the system would collapse.

    • InAlaska says:

      Without continuous American engagement in the MIddle East most of us would already be dead of a nuclear WWIII triggered by Soviet perfidy, Arab strongmanism, Islamic fundamentalism, anti-Semtism and sheer third world incompetence. American leadership, albeit flawed and inconsistent, has kept a “Nostradamus moment” from happening for the last 30 years. The role of the Indispensable Nation has kept the monkey off of all of your backs and you should at least be aware of it if not grateful that you weren’t sent over there to do the dirty job yourselves.

      • Paul says:

        As we can see, the matrix is powerful!

      • Jarle B says:

        InAlaska wrote:
        “Without continuous American engagement in the MIddle East most of us would already be dead of a nuclear WWIII triggered by Soviet perfidy, Arab strongmanism, Islamic fundamentalism, anti-Semtism and sheer third world incompetence.”

        I bet you think this goes for American “activity” all over the globe. America the omnipresent good cop – hurrah!

        • InAlaska says:

          Yep, pretty much. Everyone else in the West gets to hide behind Dad and complain about him behind his back.

          • Paul says:

            If one were to watch this presentation http://www.youtube.com/watch?v=yTbdnNgqfs8 one might be inclined to think that the US was operating like a mafia overlord….

            As in you don’t have any choice but to be ‘under the protection’ of the guy with the big stick…

            As in the guy with the big stick will protect you — from him… (kinda like how the neighbourhood mafiosa says hey bud — we’d hate ta see yor store burned down … you need us to make sure a dat — ya know wad i mean?’)

            As in ‘you are either with us – or against us’ — we tell you what to do — if you don’t like it then I whack you across the face with the big stick… if you still don’t get it I beat you to death and sink you in the ocean with a stone around your neck

            There is no such thing as independent action — independent thought — you cannot choose to align with Russia, or China — even if you think that is in your interests… because it is not in AMERICA’S interests…

            Case in point – Mohammed Mossadegh – Iran – democratically elected — wanted to nationalize his country’s oil industry and sell to whomever he wanted — but no no no no …. the Brits and the Americans were not on with that — so they labelled him a communist — threw him out and installed their boy – the Shah – we all remember the Shah right? — the guy who’s Savak – with CIA training tortured anyone who made the slightest negative comment about his highness…

            This is not “A Conspiracy Theory’ — Operation Ajax is real – when the Shah was overthrown the Iranians pasted together shredded documents at the US embassy that provided evidence of this http://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9tat

            Red pill….

          • Jarle B says:

            InAlaska wrote:
            “Everyone else in the West gets to hide behind Dad and complain about him behind his back.”

            Ha ha – you’re a funny guy! Try living somewhere else than America for a few years and see a different world…

  5. Paul says:

    A most excellent idea….

    The Voluntary Human Extinction Movement

    In 1967, there were three billion people on planet Earth. One year later, the idea that overpopulation would eventually kill us entered mainstream consciousness with the publication of Paul Ehrlich’s book, The Population Bomb. But if consciousness was raised, it didn’t do much to slow population growth. Today there are 7 billion people and counting.

    As far back as the 18th century, a clergyman named Thomas Robert Malthus warned that as the population increased, resources would dwindle and famine and disease would result. Malthus never anticipated some of the horrific side effects of overpopulation we are seeing today, like species extinction and environmental disaster. But in many ways, the idea of population control has taken a back seat to what seem like even more pressing concerns like cutting carbon emissions.

    One group, however, is offering a radical solution to our Malthusian mess: the Voluntary Human Extinction Movement. Their motto is: “May we live long and die out.” An informal movement that coalesced in the ‘70s, the Extinctionists value the Earth and its millions of species more than human survival. Their goal is to convince humans to stop breeding, cease making new babies altogether and allow the human race to slowly disappear—quietly, peacefully and without the suffering and pain overpopulation has wrought on so much of the world. Only then can the world and all the surviving species recover and prosper.

    More http://www.alternet.org/environment/radical-environmental-solution-youve-never-heard?akid=12275.312354.83LkG0&rd=1&src=newsletter1020138&t=3&paging=off&current_page=1#bookmark

  6. Paul says:

    French Farmers Upset Over Falling Prices, Torch Tax and Insurance Offices, Dump Produce
    Posted: 20 Sep 2014 10:18 AM PDT

    As a direct result of sanctions on Russia, there is an overabundance of fruits and vegetables in France, Spain, Poland, and elsewhere in Europe. Basic law of supply and demand dictates prices of crops would fall. And they did.

    While most foolishly want to stick it to Russia, few actually are willing to pay the price if it affects them.

    Here is another case in point: French Farmers Torch Tax Office in Brittany Protest.
    French vegetable farmers protesting against falling living standards have set fire to tax and insurance offices in town of Morlaix, in Brittany. The farmers used tractors and trailers to dump artichokes, cauliflowers and manure in the streets and also smashed windows, police said.

    Prime Minister Manuel Valls condemned protesters for preventing firefighters from dealing with the blaze.

    The farmers say they cannot cope with falling prices for their products.

    A Russian embargo on some Western goods – imposed over the Ukraine crisis – has blocked off one of their main export markets.

    About 100 farmers first launched an overnight attack on an insurance office outside Morlaix, which they set light to and completely destroyed, officials said. They then drove their tractors to the main tax office in the town where they dumped unsold artichokes and cauliflowers, smashed windows and then set the building on fire.
    Everyone Loses

    The French protest underscores the stupidity of sanctions. No one wins. Russia does not get fruits and vegetables, but European growers lose income.

    France actually the worst end of it, with a tax office destroyed and widespread discontent spreading. In Russia, support for Putin is at all-time high.

    Sanctions will never work.

    Mike “Mish” Shedlock
    http://globaleconomicanalysis.blogspot.com
    Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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  8. Paul says:

    America Created Al-Qaeda and the ISIS Terror Group

    http://www.globalresearch.ca/america-created-al-qaeda-and-the-isis-terror-group/5402881

    Much like Al Qaeda, the Islamic State (ISIS) is made-in-the-USA, an instrument of terror designed to divide and conquer the oil-rich Middle East and to counter Iran’s growing influence in the region.

    The fact that the United States has a long and torrid history of backing terrorist groups will surprise only those who watch the news and ignore history.

    The CIA first aligned itself with extremist Islam during the Cold War era. Back then, America saw the world in rather simple terms: on one side, the Soviet Union and Third World nationalism, which America regarded as a Soviet tool; on the other side, Western nations and militant political Islam, which America considered an ally in the struggle against the Soviet Union.

    The director of the National Security Agency under Ronald Reagan, General William Odom recently remarked, “by any measure the U.S. has long used terrorism. In 1978-79 the Senate was trying to pass a law against international terrorism – in every version they produced, the lawyers said the U.S. would be in violation.”

    During the 1970′s the CIA used the Muslim Brotherhood in Egypt as a barrier, both to thwart Soviet expansion and prevent the spread of Marxist ideology among the Arab masses. The United States also openly supported Sarekat Islam against Sukarno in Indonesia, and supported the Jamaat-e-Islami terror group against Zulfiqar Ali Bhutto in Pakistan. Last but certainly not least, there is Al Qaeda.

    Lest we forget, the CIA gave birth to Osama Bin Laden and breastfed his organization during the 1980′s. Former British Foreign Secretary, Robin Cook, told the House of Commons that Al Qaeda was unquestionably a product of Western intelligence agencies. Mr. Cook explained that Al Qaeda, which literally means an abbreviation of “the database” in Arabic, was originally the computer database of the thousands of Islamist extremists, who were trained by the CIA and funded by the Saudis, in order to defeat the Russians in Afghanistan.

    America’s relationship with Al Qaeda has always been a love-hate affair. Depending on whether a particular Al Qaeda terrorist group in a given region furthers American interests or not, the U.S. State Department either funds or aggressively targets that terrorist group. Even as American foreign policy makers claim to oppose Muslim extremism, they knowingly foment it as a weapon of foreign policy.

    The Islamic State is its latest weapon that, much like Al Qaeda, is certainly backfiring. ISIS recently rose to international prominence after its thugs began beheading American journalists. Now the terrorist group controls an area the size of the United Kingdom.

    In order to understand why the Islamic State has grown and flourished so quickly, one has to take a look at the organization’s American-backed roots. The 2003 American invasion and occupation of Iraq created the pre-conditions for radical Sunni groups, like ISIS, to take root. America, rather unwisely, destroyed Saddam Hussein’s secular state machinery and replaced it with a predominantly Shiite administration. The U.S. occupation caused vast unemployment in Sunni areas, by rejecting socialism and closing down factories in the naive hope that the magical hand of the free market would create jobs. Under the new U.S.-backed Shiite regime, working class Sunni’s lost hundreds of thousands of jobs. Unlike the white Afrikaners in South Africa, who were allowed to keep their wealth after regime change, upper class Sunni’s were systematically dispossessed of their assets and lost their political influence. Rather than promoting religious integration and unity, American policy in Iraq exacerbated sectarian divisions and created a fertile breading ground for Sunni discontent, from which Al Qaeda in Iraq took root.

    The Islamic State of Iraq and Syria (ISIS) used to have a different name: Al Qaeda in Iraq. After 2010 the group rebranded and refocused its efforts on Syria.

    There are essentially three wars being waged in Syria: one between the government and the rebels, another between Iran and Saudi Arabia, and yet another between America and Russia. It is this third, neo-Cold War battle that made U.S. foreign policy makers decide to take the risk of arming Islamist rebels in Syria, because Syrian President, Bashar al-Assad, is a key Russian ally. Rather embarrassingly, many of these Syrian rebels have now turned out to be ISIS thugs, who are openly brandishing American-made M16 Assault rifles.

    America’s Middle East policy revolves around oil and Israel. The invasion of Iraq has partially satisfied Washington’s thirst for oil, but ongoing air strikes in Syria and economic sanctions on Iran have everything to do with Israel. The goal is to deprive Israel’s neighboring enemies, Lebanon’s Hezbollah and Palestine’s Hamas, of crucial Syrian and Iranian support.
    ISIS is not merely an instrument of terror used by America to topple the Syrian government; it is also used to put pressure on Iran.

    The last time Iran invaded another nation was in 1738. Since independence in 1776, the U.S. has been engaged in over 53 military invasions and expeditions. Despite what the Western media’s war cries would have you believe, Iran is clearly not the threat to regional security, Washington is. An Intelligence Report published in 2012, endorsed by all sixteen U.S. intelligence agencies, confirms that Iran ended its nuclear weapons program in 2003. Truth is, any Iranian nuclear ambition, real or imagined, is as a result of American hostility towards Iran, and not the other way around.

    America is using ISIS in three ways: to attack its enemies in the Middle East, to serve as a pretext for U.S. military intervention abroad, and at home to foment a manufactured domestic threat, used to justify the unprecedented expansion of invasive domestic surveillance.

    By rapidly increasing both government secrecy and surveillance, Mr. Obama’s government is increasing its power to watch its citizens, while diminishing its citizens’ power to watch their government. Terrorism is an excuse to justify mass surveillance, in preparation for mass revolt.
    The so-called “War on Terror” should be seen for what it really is: a pretext for maintaining a dangerously oversized U.S. military. The two most powerful groups in the U.S. foreign policy establishment are the Israel lobby, which directs U.S. Middle East policy, and the Military-Industrial-Complex, which profits from the former group’s actions. Since George W. Bush declared the “War on Terror” in October 2001, it has cost the American taxpayer approximately 6.6 trillion dollars and thousands of fallen sons and daughters; but, the wars have also raked in billions of dollars for Washington’s military elite.

    In fact, more than seventy American companies and individuals have won up to $27 billion in contracts for work in postwar Iraq and Afghanistan over the last three years, according to a recent study by the Center for Public Integrity. According to the study, nearly 75 per cent of these private companies had employees or board members, who either served in, or had close ties to, the executive branch of the Republican and Democratic administrations, members of Congress, or the highest levels of the military.

    In 1997, a U.S. Department of Defense report stated, “the data show a strong correlation between U.S. involvement abroad and an increase in terrorist attacks against the U.S.” Truth is, the only way America can win the “War On Terror” is if it stops giving terrorists the motivation and the resources to attack America. Terrorism is the symptom; American imperialism in the Middle East is the cancer. Put simply, the War on Terror is terrorism; only, it is conducted on a much larger scale by people with jets and missiles.

    • A lot of the incursions the US involve themselves in I think is for the MIC to test new equipment, communication and boots on the ground tactics and response capability. In other words they spend about 700 billion a year tax money and without conflict there is no way to know how equipment and personnel will respond under military pressure unless tested in the field. I don’t advocate this approach, but I am sure they do through DC support. The review process during and after conflicts I am sure is quite extensive.

      • Just to add to that, I don’t think the MIC cares whether the US technically wins or loses, or about inciting terrorists response. In fact, inciting response just leads to more paranoia and that keeps their tab rising. The most valuable moments for the MIC are our worst moments of infamy, pearl harbor and 9/11.

        • VPK says:

          The Taliban were created by the Soviet Invasion in late 1970’s.
          The Saudi’s provided “teachers” to the displaced Afghan children and they were mainly focused on extreme religious doctrine. No doubt the CIA provided weapons to the Taliban, but the Soviets got the ball rolling

    • very well summed up Paul, clear and lucid.
      If I can add a further two pennorth, that this largely consists of stupid young men who enjoy firing weapons without restrictions.
      Watch newsclips carefully. You’ll notice young guys hold an AK47 or whatever at arms length above a wall or out of a window and just fire off a full magazine while effectively waving the weapon around in the air, aiming it at nobody in particular
      this is a new toy, if it kills people so much the better.
      they enjoy it.

  9. http://www.washingtonpost.com/blogs/capital-weather-gang/wp/2014/09/18/june-july-august-set-record-for-warmest-summer-on-earth-says-noaa/

    Summer 2014 was record warmest on Earth, says NOAA

    It was the warmest summer on Earth since records began in 1880, according to a monthly climate report by NOAA’s National Climatic Data Center. In addition, August 2014 was the warmest August on record for the globe, according to all three major organizations that track the earth’s temperature.

    Over land and ocean, NOAA reports that August ended 0.75 degrees Celsius above the 20th century average, while the summer months, June through August, were 0.71 degrees warmer than normal.

    Read some of the deniers posts afterwards. Hilarious!

    • VPK says:

      OVER 300,000 participated in the People’s Climate March today in NYC. Most Americans were unaware of the event because of the fixation on sports, especially NFL.
      In a couple days when the so-called leaders meet to actually agree, this mass demonstration will likely be a fainted memory.
      Yes, our fossil fuel emissions are warming the planet (ocean’s included) and changing the ecosystem life support system.

  10. Ed – I am interested in energy issues.
    edpell says:

    The cellphone companies are hot on the idea of the cellphone becoming the tricorder that provides your health care. They are advertising the retirement of babyboom doctors and the need for some other source of medical care.

  11. VPK says:

    Well, last check the little fella was at full speed…so FUNNY
    Rest Easy, BAU will be here for at least one more day:

    • Adam says:

      It’s a rubbish video. The picture is nowhere near detailed enough to show the markings on the ballot papers. The body language of the woman suggests that, whatever she’s doing, she’d got momentarily confused and corrected whatever she’d done wrong. Hardly surprising, given the mind-bogglingly boring nature of such work.

      The split result, however, means Scotland is a split nation – virtually split down the middle. That is the result I most feared. The 45% yes vote means that the Scots have laid down a marker, though, and I wouldn’t be surprised if they get their way, in 10 or more years. Then our English politicians might finally lose their neo-imperialist delusions – although by that time, economic reality is likely to have done it for them.

      • InAlaska says:

        Any country that will let 16 year old people vote, shouldn’t be independent. 16 year olds can hardly decide what to wear for school each day, let alone whether their country should break up a 300 year old kingdom. I suspect that if you eliminate the teenage vote, you’d get much less enthusiasm for independence.

  12. Don Stewart says:

    Dear Gail and All
    This isn’t about health care, but it is something that has been discussed here, at least peripherally.

    The issue is the nature of a ‘post collapse’ or a ‘long emergency’ local community capable of meeting the needs of its members. The suggestion is that we might learn something from Nature which will permit us to do some design work which will be helpful.

    Let me first dispense with some ideas which are, I think, non-starters:
    a. Radical democracy. As we will explore below, Nature tends to work in hierarchies.
    b. We have to design something which will save 7.2 billion or 10 billion humans. First, we cannot ‘design’ anything involving billions of people, and second, we have no assurance that any conceivable post collapse or long emergency society can save some arbitrary number of people.

    So…what can we learn from Nature? Nature tends to organize around some keystone species and to use certain keystone technologies. For example, consider a grassland. There are three or maybe four keystone species. Those are the grasses, the psilocybe fungi, the herbivores (once the dinosaurs, then the bison, now the cattle), and perhaps the predators of the herbivores (once the big cats and canines, now the humans with electric fences). Mathematical studies show that all of the thousand species in the grassland are connected to each other with a maximum (mostly) of 3 links or fewer. The extinction of any single species will cause perturbations in the network, but the extinction of either of the 3 or 4 keystone species will result in collapse and the replacement of the current system with one of considerably less complexity and productivity. (In a grassland, we call this ‘desertification’.) If you are familiar with complexity theory, this is the difference between strong attractors and weak attractors.

    In terms of technologies, I’ll just point to serotonin. A grassland is a dense web of information, and serotonin is the keystone technology. ‘there is another keystone behavior that’s crucial here, and that is the creation and release of unique serotonergic compounds from the psilocybe fungi into the ecorange on a regular basis.’ (Please note that plowing destroys the fungi, and hence the communications and hence the highly productive system).

    Now let’s set up a few straw-men and knock them over. Suppose we have a random group of well-meaning people who decide to form an intentional community. All decisions will be made by consensus, or at least a near consensus. The group is NOT selected because the members have any particular keystone assets or behaviors. Do you think the group is likely to survive a crash or the continuous testing of a long descent?

    Similarly, let’s suppose that all us gardener’s get together and form an intentional community. How do you think a bunch of gardeners will do? Can you think of keystone assets or behaviors or technologies that gardeners probably don’t have?

    Third, let’s suppose we decide to follow the siren call of the homestead. As Michael Crichton said, ‘coevolutionary relationships almost always occur between n number of organisms’. (n being some number larger than 2) Do you think a homesteader can survive? Do you think a homesteader can thrive in the absence of coevolutionary relationships? What do you think the proper scale of the number ’n’ is?

    I won’t try to lay out the shape of a community able to thrive post-collapse or in a long emergency. Just a few hints. Grain farmers need millers, and both need wagon makers who need wheelwrights and foresters. Can you begin to picture some strong attractors and some weak attractors, and how an organic society might begin to take shape with no top down direction and everyone doing what they need to do?

    If I am right in my speculations, then it seems to me that the important thing for any of us to do now is take care of the basics as independently as we can (food, water, shelter) and then begin to assemble a local group that we regularly go to for the coevolutionary needs. As, for example, a nurseryman to supply us with plants and seeds, or a carpenter to work wood.

    I feel the need to suggest some urgency in terms of the coevolutionary needs. I was having a conversation with a young carpenter recently, who was bemoaning the demise of carpentry skills. Everything now is delivered from factories and simply assembled on site. He told me that ‘carpentry skills are being lost every day…I have seen amazing losses just in my lifetime’. And the vast majority of plants sold here now come from a single nursery in Alabama.

    Don Stewart

    • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
      Jan Steinman says:

      Nice work, Don!

      Thanks for pointing out that consensus is a luxury of energy-rich times, when one can afford a day-long meeting to figure out what to do about a hangnail.

      But you seem overly down on “intentional” community. Perhaps it’s just semantics, but I’d hate to dissuade anyone from trying — or having the “intent” — to form community. I agree that there are a lot of dysfunctional intentional communities out there that won’t survive much of a decline. But I see the process of intentional community building to be no different than what you describe — seek out complementary skills, hopefully with a flexible, non-dogmatic personality.

      • Don Stewart says:

        Dear Jan
        I don’t mean to be down on intentional communities. I am down on all those which take forever to decide simple issues, and those which survive just as long as the founders money holds out. For example, I know of one such community where there is no joint-production of anything (everybody just works at a wage paying job), but which spends hours each week debating, and very seldom actually deciding, whether everyone should divest from fossil fuel companies. I’d call that a club.

        What I set out to do about 2007 was to assemble a little ‘intentional community’ which existed only in their relationships to me. That is, who could I rely on to get things done that I either can’t, or don’t want to, do for myself. People I could reach out and touch…not some faceless corporation in China. Now I am the better part of a decade older, and things begin to change.

        I think that younger people need to be much more serious than I was in 2007 (and I was pretty serious), and I think that some of the trappings of intentional communities make sense. For example, Diana Leaf Christian, who has studied the matter, says that intentional communities must eat together at least 5 times a week to hold together. I don’t argue with that…but the network I put together back in 2007 didn’t work that way at all. My network was just about mutually beneficial business…not about social interchange.

        I am in favor of whatever works…and I don’t have any illusions that I have all the answers. My comment was mostly to stir people to do their own thinking.

        Don Stewart

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          Diana Leafe Christian is one of our Advisors, and has visited several times. I agree with her that “the community that eats together, stays together.”

          I think I have her convinced that consensus is not the be-all and end-all of community decision making. She’s been working with John Buck, teaching Sociocracy, which is the conceptual foundation of our “stewardship” model of decision-making.

          Something beyond democracy is sorely needed. Democracy is generally two wolves and a sheep, voting on what to have for dinner. But consensus is just the opposite: tyranny of the minority. Peer decision circles seem to work well. Our guiding principle is “the person with the most knowledge about a situation should be empowered to make decisions about that situation.”

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

          I know Dmitry Orlov argues that it is unintentional communities that stick together–for example, family clans, subject to at least some persecution.

        • InAlaska says:

          Don,
          I just don’t believe that intentional communities can last very long. Its been tried in many ways over many years in many places. I grew up as a child for awhile in a commune like group of folks and it always ends badly. I think the only intentional communities are those that are formed by large family groupings (multi-generational) where people are held together by bonds of relationships, blood, births and love. I think the other intentional communities that work are those held together by religious feeling: the Amish, the Mennonites, the Mormons, etc. Other belief systems just don’t seem strong enough to overcome the jealousies, bad feelings and misunderstanding that comes from a group of adults who are not related, don’t believe the same things, and have no bonds of loyalty to the group other than those that are convenient. When its no longer convenient, they split.

          • Paul says:

            I’ve a friend who went off the grid and tried to live in a number of intentional communities in northern California…. he said they always went sideways due to conflicts….

            One thing to consider though is that those communities did not work because people had options.

            They could go back to the city and work — they could move somewhere else ….

            Perhaps desperation might pull people closer together — it might force them to overcome their differences and compromise….

            Or maybe they don’t compromise but a strong man takes control of the situation and says ‘if you don’t like the way I run the show you can go off on your own and see how that goes — but while you are here I am the new king — and you will obey me’

            That seems to be the model that was quite frequently in place before cheap energy allowed us to centralize and enforce authority.

            • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
              Jan Steinman says:

              “One thing to consider though is that those communities did not work because people had options.”

              Very true!

              Intentional community is something that seems like “a nice idea” to a number of people. To me, it seems like an imperative. But perhaps I’m just ahead of my time.

              One of my favourite movies, The Return of Martin Guerre, is a fabulous depiction of 16th century village life in France. It shows that few options outside the village existed for peasants in the 1500s, outside of volunteering for the military, which brought with it a whole ‘nuther set of troubles.

              That may well soon be the options available: stick together in known (better or worse) relationships, or join the military.

          • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
            Jan Steinman says:

            “I just don’t believe that intentional communities can last very long.”

            It is true that nine out of ten fail. But that isn’t much different than the statistics for new small businesses. Could you imagine the reaction if you had said, “I just don’t believe that small businesses can last very long?” There are many intentional communities out there that thrive for decades or longer. I’d wager the ratio is greater than for the number of small business that eventually become Apple Computer or Microsoft.

            There’s a nice video called The Power of Community that documents some two dozen or so successful intentional communities. You can get it from The Fellowship for Intentional Community, which also has an online, searchable database of some 2,500 intentional communities world-wide.

            I agree that the factors you cite — familial relations, religious basis — make for stronger ties, which are a requirement. But “ties” can come from many things besides family or religion, such as a commitment to living a sustainable life-style.

            Thumb through the ic.org database. There are lots of inspirations out there!

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

      I agree, communities have to have the right “pieces” to them. They will tend to self-organize around the skills available, but that is not really sufficient for a functioning community. I expect that a lot of trial and error will be needed to find combinations that work. What we are lacking now is the long-term build-up of communities that work in a very different environment. Customs need to be different. Quite likely the role of women has to be different. In many ways, we are handicapped by what we bring from our current way of living. It would be a lot easier if we had role models we could copy.

  13. Paul says:

    Shale Fracking Is a “Ponzi Scheme” … “This Decade’s Version of The Dotcom Bubble” … “A Lot In Common With the Subprime Mortgage”

    http://www.zerohedge.com/news/2014-09-19/shale-fracking-%E2%80%9Cponzi-scheme%E2%80%9D-%E2%80%A6-%E2%80%9C-decade%E2%80%99s-version-dotcom-bubble%E2%80%9D-%E2%80%A6-%E2%80%9C-lot-common-sub

    • Paul says:

      Let’s just dump the whole lot here:

      Shale Fracking Is a “Ponzi Scheme” … “This Decade’s Version of The Dotcom Bubble” … “A Lot In Common With the Subprime Mortgage”

      In 2011, the New York Times wrote:

      “Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

      “The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote in an e-mail on Aug. 28, 2009.

      “And now these corporate giants are having an Enron moment,” a retired geologist from a major oil and gas company wrote in a February e-mail about other companies invested in shale gas.

      Deborah Rogers, a member of the advisory committee of the Federal Reserve Bank of Dallas, [and a] former stockbroker with Merrill Lynch … showed that wells were petering out faster than expected.

      “These wells are depleting so quickly that the operators are in an expensive game of ‘catch-up,’ ” Ms. Rogers wrote in an e-mail on Nov. 17, 2009, to a petroleum geologist in Houston, who wrote back that he agreed.

      A review of more than 9,000 wells, using data from 2003 to 2009, shows that — based on widely used industry assumptions about the market price of gas and the cost of drilling and operating a well — less than 10 percent of the wells had recouped their estimated costs by the time they were seven years old.

      “Looks like crap,” the Schlumberger official wrote about the well’s performance, according to the regulator, “but operator will flip it based on ‘potential’ and make some money on it.”
      In 2012, the New York Times pointed out:
      The gas rush has … been a money loser so far for many of the gas exploration companies and their tens of thousands of investors.

      Although the bankers made a lot of money from the deal making and a handful of energy companies made fortunes by exiting at the market’s peak, most of the industry has been bloodied — forced to sell assets, take huge write-offs and shift as many drill rigs as possible from gas exploration to oil, whose price has held up much better.

      Now the gas companies are committed to spending far more to produce gas than they can earn selling it. Their stock prices and debt ratings have been hammered.

      Rolling Stone reported the same year:

      Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners. For Chesapeake, the primary profit in fracking comes not from selling the gas itself, but from buying and flipping the land that contains the gas. The company is now the largest leaseholder in the United States, owning the drilling rights to some 15 million acres – an area more than twice the size of Maryland. McClendon [the CEO of fracking giant Chesapeake] has financed this land grab with junk bonds and complex partnerships and future production deals, creating a highly leveraged, deeply indebted company that has more in common with Enron than ExxonMobil. As McClendon put it in a conference call with Wall Street analysts a few years ago, “I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet.”

      According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don’t pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods. “This is an industry that is caught in the grip of magical thinking,” Berman says. “In fact, when you look at the level of debt some of these companies are carrying, and the questionable value of their gas reserves, there is a lot in common with the subprime mortgage market just before it melted down.”

      ***

      In February, Chesapeake announced that, because of low gas prices, its revenues will fall $3.5 billion short of its expenses this year.

      Jim Quinn noted last year:

      Royal Dutch Shell is one of the biggest corporations in the world, with financial resources greater than 99% of all the organizations on earth. Their CEO [Peter Voser] probably knows a little bit more about oil exploration than the Wall Street systers and CNBC bimbos. His company has poured $24 billion into shale exploration in the U.S. It has been a huge failure. They have already written off $2.1 billion. They are trying to sell huge swaths of land in the Eagle Ford area. They are losing money in the shale oil and gas business. If Shell can’t make it profitable, who can?

      Oil Price reported in March:

      Shell’s new boss, Ben van Beurden, said bets on U.S. shale plays haven’t worked out for his company.

      ***

      “Some of our exploration bets have simply not worked out,” Shell’s Chief Executive Officer Ben van Beurden said. It was bad management policy to commit close to $80 billion in capital on its North American portfolio and still lose money. Now, he said, it’s time to cut the loss and slash exploration and production investments by 20 percent for 2014.

      ***

      Shell’s problems say more about the difficulties of shale exploration than they do about the company itself.

      The Wall Street Journal pointed out this April:

      These newly public companies are spending more than they make ….

      Bloomberg wrote in May:

      Shale debt has almost doubled over the last four years while revenue has gained just 5.6 percent, according to a Bloomberg News analysis of 61 shale drillers. A dozen of those wildcatters are spending at least 10 percent of their sales on interest compared with Exxon Mobil Corp.’s 0.1 percent.

      “The list of companies that are financially stressed is considerable,” said Benjamin Dell, managing partner of Kimmeridge Energy, a New York-based alternative asset manager focused on energy. “Not everyone is going to survive. We’ve seen it before.”

      ***

      In a measure of the shale industry’s financial burden, debt hit $163.6 billion in the first quarter, according to company records compiled by Bloomberg on 61 exploration and production companies that target oil and natural gas trapped in deep underground layers of rock.

      ***

      Drillers are caught in a bind. They must keep borrowing to pay for exploration needed to offset the steep production declines typical of shale wells. At the same time, investors have been pushing companies to cut back. Spending tumbled at 26 of the 61 firms examined. For companies that can’t afford to keep drilling, less oil coming out means less money coming in, accelerating the financial tailspin.

      ***

      “Interest expenses are rising,” said Virendra Chauhan, an oil analyst with Energy Aspects in London. “The risk for shale producers is that because of the production decline rates, you constantly have elevated capital expenditures.”

      And Tim Morgan – former global head of research at Tullett Prebon – explained last month at the Telegraph:

      We now have more than enough data to know what has really happened in America.

      ***

      If a huge number of wells come on stream in a short time, you get a lot of initial production. This is exactly what has happened in the US.

      The key word here, though, is “initial”. The big snag with shale wells is that output falls away very quickly indeed after production begins. Compared with “normal” oil and gas wells, where output typically decreases by 7pc-10pc annually, rates of decline for shale wells are dramatically worse. It is by no means unusual for production from each well to fall by 60pc or more in the first 12 months of operations alone.

      Faced with such rates of decline, the only way to keep production rates up (and to keep investors on side) is to drill yet more wells. This puts operators on a “drilling treadmill”, which should worry local residents just as much as investors. Net cash flow from US shale has been negative year after year, and some of the industry’s biggest names have already walked away.

      The seemingly inevitable outcome for the US shale industry is that, once investors wise up, and once the drilling sweet spots have been used, production will slump, probably peaking in 2017-18 and falling precipitously after that. The US is already littered with wells that have been abandoned, often without the site being cleaned up.

      Meanwhile, recoverable reserves estimates for the Monterey shale – supposedly the biggest shale liquids play in the US – have been revised downwards by 96pc. [Background; and see this.] In Poland, drilling 30-40 wells has so far produced virtually no worthwhile production.

      In the future, shale will be recognised as this decade’s version of the dotcom bubble. In the shorter term, it’s a counsel of despair as an energy supply squeeze draws ever nearer.

      http://www.zerohedge.com/news/2014-09-19/shale-fracking-%E2%80%9Cponzi-scheme%E2%80%9D-%E2%80%A6-%E2%80%9C-decade%E2%80%99s-version-dotcom-bubble%E2%80%9D-%E2%80%A6-%E2%80%9C-lot-common-sub

      • Daddio7 says:

        My son has been busy for the last few years writing contracts for gas co-generation units. Utilities are closing down coal plants to build these. They don’t know the gas is going to run out?

        • Ed – I am interested in energy issues.
          edpell says:

          Hell, here in New York State we are going gang busters building new gas fired plants it is the solution to all our problems. In fact our AG is suing everyone west of us to force them to shutdown their coal plants and go gas. Haven’t you heard we are energy independent and so flush with gas we are flaring it off in Pennsylvania. Just can’t wait for the six liquidation and export ports to be built on the east coast. LMAO

      • B9K9 says:

        Nice post. It appears we’re seeing the emergence of different schools of thought, with their respective adherents:

        – Kunstler’s long decline, where society has enough time to adapt to reduced consumption at a fraction of today’s levels ie made by hand
        – Geer’s collapse, where the 20% don’t make it a la French revolution
        – Paul’s soylent green, where the 1% live out a 6-12 month period until the population stabilizes below 1B
        – Orlov’s structured collapse, where the 20% still run things

        I’m of course in Orlov’s camp; I believe EdPell also thinks this is how things will evolve. I continue to dispute the notion of supply-chain dependencies. The US would have to do nothing other than dust off still existing laws, regulations and mandates from the WWII era. Simply cease all non-critical production ie cars, kitchen appliances, TVs, etc and transition to a fully committed effort towards N American production.

        Since no one would have to work – other than those in critical industries – no one would need to travel. People could ride their bikes to central food depots where their rationed bulk beans, rice, corn, wheat, etc would be dispensed. Both fresh & waste water would still be provided pumps driven by the electrical grid.

        In this manner, consumption could easily be reduced by 1/2-2/3, while completely orienting all economic activity towards remaining fossil fuel production. The banks, politicians and 15% managerial class would still be in control. With a fully functioning legal system, asset ownership would be uncontested.

        This type of situation could last for at least another 100 years. That would give the PTB more than ample time to educate and condition the masses of their patriotic obligation to have 0-2 children, to work hard in the fields, and then go off and peacefully die before they consumed any health care expenditures.

        I for one am betting on this scenario continuing into the foreseeable future.

        • project wis.dom
          kesar says:

          I agree with all paragraphs except the last one (“This type of situation could last for at least another 100 years”).

          IMO this situation can last 10-15 years at most. The easy recoverable energy is gone. You can force people to work in coal mines in XIX century conditions with the M16 near their head for some time. Above certain level of death rate it becomes impossible. Look at the link from dashui:
          http://daily.sightline.org/2013/03/04/the-coal-industrys-falling-productivity/

        • Paul says:

          “I’m of course in Orlov’s camp; I believe EdPell also thinks this is how things will evolve. I continue to dispute the notion of supply-chain dependencies. The US would have to do nothing other than dust off still existing laws, regulations and mandates from the WWII era. Simply cease all non-critical production ie cars, kitchen appliances, TVs, etc and transition to a fully committed effort towards N American production.”

          Let’s walk this through…. in 2008 if the central banks do not step in the supply chain breaks — due to just in time systems there are few spare parts… so basically everything stops within a few weeks (see the Feasta paper – Korowicz)

          Topping that off the financial system is busted – there is no credit – and because central banks have already done everything they can to stop this — the banking system would collapse.

          There would likely be martial law — no food in the shops — and no way to re-supply.

          Nobody would be going to work — essentially the entire economy would seize up.

          And of course the reason for this is that oil is too expensive to extract — the economy MUST have cheap oil to function — as we can see the economy has not been able to function for over a decade now due to expensive oil — governments are barely able to keep things together offsetting the end of growth impacts of expensive oil with debt, printing and ZIRP.

          We already are over the tipping point — we are suspended in mid air 500 metres above the rocks…

          So I fail to understand how we can someone put things back together AFTER we smash on the rocks — when we cannot hold them together now.

          Is there some sort of magical reset that allows us to restart the industrial revolution? Keep in mind that only got started in the first place because we had lots of cheap energy to exploit. That is gone…

          Do we put a gun to the head of everyone around the world involved in the BAU economy and say ‘continue to do your job’ — essentially a massive command economy.

          To think that a country can simply pick up the pieces, roll back the clock to 1900 — onshore industry — train people to continue with BAU — and we roll along merrily as if were the 1950’s again….

          I think that is wishful thinking — and I think it ignores the fundamental problem to which this site is dedicated:

          We are out of cheap oil.

          The full force of BAU cannot change that. A global command economy cannot change that.

          And wishful thinking most definitely cannot change that.

          • B9K9 says:

            Paul, I almost can’t believe I get to roll out an old term from my consulting days: your list of conditional predicates is example bound. LOL.

            Seriously though, you seem to be pretty stuck in the notion that the US, or any government, needs a functioning financial system in which to operate. I believe what Gail is concluding (to which I agree) is that we need an effective debt monetization scheme in which to facilitate **existing business practices** ie BAU. A such, your continued reference to the 1950s, 2008, credit, ZIRP/QE, and the price of oil are all bound by these assumptions that BAU is the constraining variable.

            But it’s not – and until you grasp that factor, you are going to continue to be emotionally invested in your preferred outcome, which is that the US finally gets its cosmic comeuppance. However, in a national emergency, as in the Civil war, all bets are off. At that point, there is no longer any pretense – the cold, hard truth is finally revealed.

            The US can simply default on the trillions of debt obligations and then begin the process of printing greenbacks to serve as a means of internal, domestic exchange. Ever hear of modern monetary mechanics (MMT)? Think it’s just some academics wasting paper? I think a new monetary regime is actually all assembled and ready to fly when the need presents itself. What’s the price of oil at that point? What’s the cost of extraction? There won’t be any market function – there will merely be demand and payments, by and for the respective governmental authorities.

            Why do people think there will be guns put at people’s heads? Didn’t Nazi Germany or the Soviet Union provide enough evidence that actual, high paying jobs that serve the national interest in critical industries will be in very high demand? With respect to educational demand, on the contrary, I think it will be even harder to get into a good university – demand will surge to get in on the control system with all its perks & benefits.

            As for supply chain dependencies, you really think the US government and other key economic sectors don’t have a extensive backup parts and plans? You think the MIC runs on just-in-time? What part of “massive overproduction to keep people employed” is escaping your attention?

            You mention quite frequently the negative reactions you elicit when you explain facts to people who are fully invested in the matrix. Perhaps you should consider your own assumptions:
            – just in time constraints
            – credit, pricing & demand
            – PTB objectives

            Since you have laid down the gauntlet, why don’t you research your assertion that the coal, oil, gas, water, etc industries would collapse in an emergency due to supply chain deficiencies. Good luck on that. Also, please explain to the readers how an existing dollar force majeur situation would negate the ability of fed.gov to once again assume currency control? Please don’t refer to BAU or the 50s – we’re talking here about an environment where continuity of government is the #1 priority.

            • Paul says:

              No – it’s not the financial system that is the key — it is easily extracted oil that is what is needed.

              Why do you think things are collapsing now?

              The disease is not the financial crisis — that is the symptom.

              The end of easy to extract oil is the problem.

              The low hanging fruit is gone. And as we are seeing capex is being cut because it makes no sense to pull oil out if the energy in approaches energy out.

              It simply will not happen. It is already starting to not happen — see the North Sea — the rig count is collapsing because the low hanging fruit is gone.

              My take on this has nothing to do with my take on America – America is already over as far as I can see – the world is ditching the USD as the reserve currency. That is the end game for empire

              My conclusions are based on the fact that if we cannot get new oil out of the ground with a fully functioning BAU — then I am 99.999999% sure we will not get it out of the ground when there is a massive collapse.

              I would suggest that you have rose coloured glasses on.

              All the wealth and all the power of the US is meaningless in the face of the end of cheap oil — and the end of growth.

              It may seem that the US – and other leading economic powers will remain powerful no matter what – because it is difficult to conceptualize them not being…. (see normalcy bias).

              But their power is based on cheap oil – the industrial revolution and our civilization is based on cheap oil. Without that – this will not exist. Nothing remotely close to this will exist.

              Gail has done a stellar job in explaining this with her many excellent articles.

              It would seem that in this instance you ‘don’t get it’

              I think there is a very high correlation between those who have benefited the most from BAU – and not accepting that BAU is going to end – completely. Of course denial would be strongest in those with the most to lose

            • Paul says:

              The Strategic Petroleum Reserve (SPR) is an emergency fuel storage of oil maintained by the United States Department of Energy. It is the largest emergency supply in the world with the capacity to hold up to 727 million barrels (115,600,000 m3).

              The current inventory is displayed on the SPR’s website. As of July 2014, the inventory was 691.0 million barrels (109,860,000 m3). This equates to 36 days of oil at current daily US consumption levels of 19.5 million barrels per day (3,100,000 m3/d).[1]

              http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_%28United_States%29

              No doubt that all goes to the military — which will use it to maintain order (martial law) for as long as possible.

              But control over what?

              7.2 billion people who will not work. Who will have no food. Mostly with no clean water supply. No sewage facilities. No garbage pick up. No electricity. No heating or cooling. No medical care.

              Essentially there will be no economy – just soldiers with guns — and people waiting to die.

              The stored fuel might last some time – maybe even a year or to. But there will be little or nothing left to control.

              The planet will be a wasteland of suffering and death — with perhaps some pockets of individuals here and there eking out a living off of the land.

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

              The fuel in storage is crude oil that needs to be refined. So there are steps that need to happen, before it can even be used.

            • Paul says:

              Thanks for pointing that out Gail.

              So they’d have to work out how to keep something like this operational http://www.youtube.com/watch?v=XDK20wJUuKQ

              Perhaps this could work for a while but even if it did — the reserves in storage are very limited.

              People continue to underestimate the nature of what is coming – in spite of all your very well reasoned articles over the years.

              Might be interesting to write something about how you specifically see things playing out. Will there be gasoline? Will there be anything resembling a town or city? What happens to the population – which diseases will kill the most people? Would there be enough food to feed 7.2B people – if not how many? etc

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

          Maybe. But it is hard for me seeing government organized enough to do much of anything. I remember the response to Hurricane Katrina. It was terrible. I read the details for one gasoline rationing plan. When a person realizes the huge number of details to be worked out (who gets rations, how are they distributed, etc.) a person realizes that we are dealing with a very complicated problem. This problem will keep changing, and pieces we depend on will break down–like electricity, and fresh water. I am skeptical about any coordinated response for any large group of people.

          I think it is much more likely that small groups will figure out how to care for their own needs. They may very well service for quite some time.

          • Paul says:

            Agree – I could see government in its current form holding for as long as stockpiled gasoline lasts… then centralized government would be impossible.

          • “I remember the response to Hurricane Katrina. It was terrible.” Yes, and reminds me of the 2nd Alien movie, which I think was called Aliens. At one point they are being attacked by those creatures and their commanding officer is issuing orders from some other building, “Lay down a suppressor fire”, while Ripley (Sigourney Weaver) is yelling to just get them out of there. The reason things go wrong is when people panic they do all sorts of odd things and command and control breaks down. In spite of all the training military forces go through, when situations turn to panic soldiers do whatever they think is right in the moment. In a post oil collapse trying to control people’s panic will not work. They will go berserk like they did in New Orleans and anything can and will happen. Now imagine panic nationwide instead of just in one city.

            • Paul says:

              Also – soldiers have families. Families who will be suffering — and probably confined to their homes under martial law.

              What will the soldiers do?

              Perhaps they will see this for what it is – a catastrophic situation — and they will return to their homes and families.

          • Christian Gebauer
            Christian says:

            And soldiers will steal military/state stuff. Some gangs among them would end up establishing some new, fragmented, order

            • Jarle B says:

              Christian wrote:
              “And soldiers will steal military/state stuff. Some gangs among them would end up establishing some new, fragmented, order”

              When a state falls apart people who want to will get hold of milllitary equipment and roam around on their own or in groups. I wonder if the preppers has thought of that?

            • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
              Jan Steinman says:

              “When a state falls apart people who want to will get hold of milllitary equipment and roam around on their own or in groups. I wonder if the preppers has thought of that?”

              Be a small target. Appear to be useless. Don’t get in-between rivals.

              “Yezzum, boss. I’ze justa po boy wit a hoe.”

      • Lizzy says:

        Enough, already!

      • InAlaska says:

        Shale oil might be a Ponzi scheme but they are producing millions of barrels of oil. So much so that they pipeline system can’t keep up and they are shipping it by the train load to the detriment of grain shipments. Someone is making money producing real oil. Can’t say how long it will last, but ten years ago no one predicted this and yet here we are. Foretelling the future with such moral certitude is a risky business.

  14. Paul says:

    Oh to be cool…. http://www.zerohedge.com/news/2014-09-19/meanwhile-front-apple-stores-new-york-and-around-world

    I really want to go to dinner with people and spend my time facebooking and ignoring them!

    In stark contrast, my old Nokia phone was falling apart today — seems one of the tines that holds the back cover on has snapped off — so the battery keeps falling out — I have taped it together…

    Maybe Zero Hedge can run a story on that?

  15. Paul says:

    Super-rich rush to buy ‘Italian Job’ style gold bars

    Economic uncertainties trigger rush for 12.5kg gold bars, worth about £300,000 each

    http://www.telegraph.co.uk/finance/commodities/11104055/Super-rich-rush-to-buy-Italian-Job-style-gold-bars.html

    Excellent Mad Max hedge?

    Or door stop for use in a hurricane?

  16. Stefeun says:

    “Treasure Map is a vast NSA campaign to map the global internet. The program doesn’t just seek to chart data flows in large traffic channels, such as telecommunications cables. Rather, it seeks to identify and locate every single device that is connected to the internet somewhere in the world—every smartphone, tablet, and computer—”anywhere, all the time,” according to NSA documents. Its internal logo depicts a skull superimposed onto a compass, the eyeholes glowing demonic red.”

    Don’t miss the 6 minutes video:
    https://firstlook.org/theintercept/2014/09/14/nsa-stellar/

  17. Paul says:

    A reminder that we are all mortal — and that our attempts at immortality might give us longer lives … but not much in the way of quality… If only we could kick the can till I hit 75… I think not possible…

    http://www.theatlantic.com/features/archive/2014/09/why-i-hope-to-die-at-75/379329/

    • Ed – I am interested in energy issues.
      edpell says:

      How old are you Paul? I am 56. My grandmother lived to 105. So, I think I have a few years left, at least 30. I think the top 20% can go for at least 60 years. What fraction of the bottom 80% are still around in 60 years? I’ll guess 2/3 gone, that is 4 billion gone with 2 billion subsistence farmers remaining, plus 2 billion first worlders. The first worlders will not be in any one location they will be spread across the global.

    • Ed – I am interested in energy issues.
      edpell says:

      Of my parents and grandparents four out of six lived healthy lives well past 85. So, you keep your 75. I’ll settle for 90.

      • Paul says:

        My take on this is similar to yours — I suspect the reason for this disaster has much to do with lifestyle — eating crap and doing no exercise… with a bit of genetics and luck thrown in.

        I suspect the majority of people who have taken care of themselves can lead active lives well past 75.

        They are however in the minority – the majority end up with dementia and physical disabilities — and become burdens to their families

  18. Ed – I am interested in energy issues.
    edpell says:

    I must say I am still skeptical of the all or nothing collapse. I think the global supply chains could be maintained for the benefit of the top 20% of the global economy for some time. While the bottom 80% learns to farm or bust. There is some level of hydro, nuclear, that will run as long as the whole chain survives. It does not need to supply all 8 billion. It in fact only supplies half as is. If that declines to 1/5 it should be enough economy of scale to keep the system going.

    • Ed – I am interested in energy issues.
      edpell says:

      For example around Washington DC they have public roads and tolls roads that parallel each other. In the future the public road will not be maintainable with existing government funds. But the toll road will pay for itself. That is the top 20% will pay to maintain their own road while the public’s road rots. It is the new America separate and definitely not equal. Just as the 20% send their kids to good private schools K-18.

      • Paul says:

        But when BAU collapses what will they use to pay for these toll roads and private schools?

        The collapse of BAU means the collapse of the global economy – effectively the end of civilization as we know it — the end of wealth as we know it.

        How would this work?

        The public infrastructure goes to pieces because 80% have no jobs – the government has little or no tax revenues to maintain anything. Agree.

        How do the 20% continue to thrive in this new normal?

        The 20% are the lawyers, the accountants, the businessmen, bankers etc…. if the 80% have no jobs then surely the 20% collapse along with them?

        If I am an in-house counsel for Ford — Ford will not exist – because there is nobody with cash to buy Ford cars…. so I am out of a job….

        If I am a M&A investment banker at JPM — where are the companies to merge? Companies need customers to exist — the 80% are in the gutter – so I am out of a job too.

        I don’t see how you can have a system where the 20% continue as usual — when the rest of the population is scrabbling around the dumpsters in upscale neighbourhoods looking for half eaten meals…

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          “I don’t see how you can have a system where the 20% continue as usual…”

          That’s what’s happened in post-Soviet Russia, according to Orlov. He noted that things seemed almost normal, except that in reviewing his high-school yearbook, about half the people in it were dead, in early middle-age. (None of us should get too smug about living a long life!)

          Russia is a perfect example. They are well on their way to a “third peak oil.” Their economy has whip-sawed with oil prices. The cheap oil of the late 80s collapsed the FSU, and their oil production went down in lock-step. But they never developed expensive oil techniques, and they were able to rapidly ramp-up their >50:1 production to the point that they are now the world’s top producer, eclipsing Saudi Arabia. They will be producing oil for a long time, even as the quantity falls year after year.

          Paul, it appears you’re a digital thinker in an analogue world. “The Crash” will not be like flipping a switch. Parts for oil wells will still be made. They will still be shipped — perhaps to the exclusion of food, as we’re already seeing with oil shipped by train displacing grain shipments.

          Now to any given individual, it may well feel like a switch flipping. To half of Orlov’s high-school classmates, it was as hard a crash as a human can take. I suspect that to at least a few others in the other half besides Orlov himself, it was hardly noticeable.

          • Paul says:

            When Russia collapsed BAU was still functioning. Russia could continue to sell its resources to the world. It could recover – as it has – because BAU continued.

            Rather than attempt to get into the details of why things cannot get delivered when the entire global economy collapses (not just a country here and there…) I will again post this very thoughtful study on how things are very unlikely to get delivered when this unravels:

            p. 56 onwards http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf

            If your only rebuttal is that Russia survived it’s collapse then we’ve run up against a wall here. I can name a dozen countries that have collapsed and later recovered – but that would be irrelevant.

            We are not talking about a country – we are talking about the entire world – we are talking about the financial system – we are talking about the global supply chain.

            We are talking about the collapse of civilization as we know it.

          • Jarle B says:

            Jan Steinman wrote:
            “That’s what’s happened in post-Soviet Russia, according to Orlov. He noted that things seemed almost normal, except that in reviewing his high-school yearbook, about half the people in it were dead, in early middle-age. (None of us should get too smug about living a long life!)”

            This happened with BAU going on elsewhere. If BAU declines on a global level, the situation is quite different.

            • Paul says:

              Likewise Japan – they have been printing for two decades now and getting away with it without collapsing — mainly because BAU has been functional and they were the only major player printing….

              The continued to have the support of BAU as other countries were in reasonably good shape

              Now everyone is printing … and every country is in a world of economic hurt… and Japan is foundering badly….

              Very different indeed.

  19. Paul says:

    “Stocks Are More Crash-Prone Than Ever,” Fleckenstein Slams “Fed’s Idiot Policies”

    Infamous short-seller Bill Fleckenstein left a CNBC anchor questioning her faith in the status quo in this brief interview. As she pestered him with questions about ‘missing out on the rally’, Fleckenstein snapped back “so what? I don’t care, it doesn’t matter” asking rhetorically “when the market declines, how fast will it all be taken away from you?” Fleckenstein warned “I don’t think we will get through October without some accident,” adding that “the stock market is more crash-prone than ever.” When pressed again about sitting on the sidelines, Fleckenstein rebukes, “if you want to pursue idiots like the Fed doing crazy policies, and if you think you can get out in time, go for it. I don’t want to try to do that.”

    http://www.zerohedge.com/news/2014-09-18/stocks-are-more-crash-prone-ever-fleckenstein-slams-feds-idiot-policies

    Very smart people who are unable to grasp – or unwilling to grasp — what is really going on.

    No Bill, the Fed is not stupid — and they are not doing these things to enrich billionaires…. if I were a billionaire I would be pissed with the Fed — so what I add another billion to my pile — what the Fed is doing is without a doubt going to collapse the global economy — and I lose all or most of my billions….

    So Bill — why is the Fed doing these things?????

    Come on Bill — what does the Fed fear??? Why are they in effect suiciding the global economy???

    Easier to believe that the Fed is insane… or corrupt … or both…

    That to visit that dark corner that is the End of Growth — caused by the end of easy to extract oil….

    I really do tire of these tirades against the Fed… they are doing what they need to do to keep the hamster running…. the ‘nuclear’ option is their only option….

    • Ed – I am interested in energy issues.
      edpell says:

      When the global economy collapses ownership remains. Yes, pensions gone, social security gone, medicare gone, medicaid/ACA gone. But the factories, the apartments, the farmers, the ports, the ships, the trucks all still the private property of the owners. Who exactly will be starving? No the owners, not the police, not the army, not the politicians.

      • Paul says:

        Ownership of what? A railway? An apartment complex? A pile of gold? A factory? I expect all will be worthless – the titles will be used to light fires to warm canned beans over…

        I suspect the only asset that will useful to own would be productive farmland and the tools to farm it. Because food will be the new gold.

        I don’t the elites being in such a good position here. Even if they have the prescience to buy organic farmland how do they enforce ownership? How do they keep the people from distributing the land amongst others who survive?

        You need BAU for that. You need law and order. You need energy to enforce law and order.

        Now if we read too much Chris Martenson and others who are making money off of this — we might begin to believe a watered down version of BAU is all possible — but remember he is peddling hopium … if he told the truth he’d be out of business.

        Gail has gone to great lengths to explain why none of this is likely possible — and she has backed up her comments with facts and logic.

        She may be wrong — but if anyone wants to argue the conclusions that are on previous topics on this site — hope doesn’t trump facts — one needs to convince the community with details.

        I don’t see how the oil flows – convince otherwise… I don’t see how ownership as we know it carries forward – but I am open to arguments that might convince me otherwise

        I bought land in one area of BC Canada because I thought that its proximity to hydro power installations meant I would have power post collapse — there were other reasons but this was one of the key ones.

        But then I found this blog and I realized that was a bad decision.

        There will be no hydro power post collapse for very long – as soon as a key part busts in the long chain of parts — that is game over.

        Alas, the mountain biking is good and the scenery splendid in BC — so I get to enjoy that…

        I would like to have hope that we can live like Little House in the Prairie — but the facts do not support that.

        As for hope and hopium — I think Mr Obama is a perfect example of how believing in such things can let you down in the end.

        That said – if despair is the alternative – let’s keep the faith and hope for the best…

        • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
          Jan Steinman says:

          “You need BAU for that. You need law and order. You need energy to enforce law and order.”

          And you need to re-read what I wrote about Italy!

          As Ed Pell notes, the top 20% or so can make a lot happen for themselves. Italy is operating on half the petroleum it used at its peak, and it still has law and order. (Well, as much as Italy could ever have.)

          The wells that are still producing in Gawaher are using 1960’s technology. There is still 50:1 ERoEI oil left on this planet. We can regress 50 years and still have a lot of BAU for the elite, while the others starve.

          Without putting words in Gail’s keyboard, I think her point is that a financial collapse will strand expensive oil. But there is still cheap oil, there just isn’t as much of it. It’s been in decline at about 3-4% per year for a half-dozen years. That means it will take 20 years to reach 1960’s levels of production.

          I’m not saying things will be hunky-dory and life will go on as usual. It’s going to be dreadful for many. But today, we take good care of a few billion people. In 20 years, that may only be a hundred million or fewer.

          Someone asked John Kenneth Galbraith the difference between a recession and a depression. He replied, “When your neighbour loses his job, that’s a recession. When you lose your job, that’s a depression.” Things are going to be very uneven. A few will be drinking champagne while many others starve — not that much different than today, except in magnitude.

          But I suspect most people on this blog will feel like it’s a depression rather than a recession.

          • Paul says:

            Jan: Is the Ghawar oil field still using the exact same equipment that was deployed in the 1960’s

            Have they never once changed a gasket – a pipe – a seal – a pump – wiring – or any of the other thousands of components that make that field yield oil?

            I assume you will say of course they have replaced many parts.

            Where will the parts come from post collapse?

            • project wis.dom
              kesar says:

              Pumping out the oil from the ground is one thing. Refining it, transportation and distribution is another story. Ghawar to Washington DC is a very long and dangerous way. Many things might happen to the precious cargo and many things can fail. The same goes with Texas to DC journey.

            • Ed – I am interested in energy issues.
              edpell says:

              I was in Cairo they keep 1960s cars on the road with zero imported parts as they are no longer made or stocked. My guide had to stop at the repair shop the car was failing. The repair man took out the generator opened it up and used a hand file to do the needed repair. There is no shortage of small machine shops in Cairo right next to the donkey pens right next to the supreme court.

            • Paul says:

              Sounds like a perpetual motion machine….

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

              The catch is that 2014 cars need computers and computer parts to operate. It is a lot easier to keep a 1960 car on the road than a 2014 car.

            • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
              Jan Steinman says:

              “The catch is that 2014 cars need computers and computer parts to operate. It is a lot easier to keep a 1960 car on the road than a 2014 car.”

              This is why I won’t own a vehicle that is dependent on microprocessors. A large village or a small town can have the facilities needed to keep older vehicles working, but it takes all of modern civilization to keep a new car running.

              This is coming to you from an eight-year-old computer. You can still find them on eBay for 5 cents on the dollar. (Note to self: need to pick up a parts spare…)

            • project wis.dom
              kesar says:

              I was also planning to buy old, no-electronics car. But after consideration I realised, that if the peak-oil really hits hard there will be plenty of vehicles available not even for 5 cents on the dollar. They will be available for free. At least for those who will have the gasoline. And even then having the fuel will be very suspicious and provoking.

            • Jan Steinman – http://www.EcoReality.org/wiki/User:Jan_Steinman
              Jan Steinman says:

              I can grow my diesel fuel. Not enough to supply my current profligate life-style of three trips into town each week, but probably enough to make one trip to town, to deliver products and procure supplies.

            • project wis.dom
              kesar says:

              Very impressive. Smart move. I wish I was on this stage of preparations.

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

              Gasoline doesn’t “keep” for very long. Diesel is better in that regard.

          • InAlaska says:

            Jan, I think you’ve got it right. It won’t be a utterly complete, fast crash. It will be a step down affair with lots of unevenness, bumps and plateaus, maybe even brief renaissance moments. But ultimately, the boiling frog. Its not going to go from what we have right now instantly to MadMax in one person’s lifetime. Some people think that people are just going to throw up there hands and say, “oh gosh, this darn part broke for the hydro-electric plant, I guess I go home and die!” No way. People are going to innovate the situations that arise one at a time to come up with solutions (albeit temporary) that will slow this decline into something that is multi-generational. Don’t get me wrong: there will be a lot of early death, misery and tragedy. On the other end of the bottleneck there will be a whole lot less of us. There might even be time for adaptation, but unfortunately I’m afraid the climate change boogeyman is going to get us, though.

            • Paul says:

              IA – Gail has gone to considerable effort to explain why this is likely to be a relative fast crash (correct me if I am wrong Gail but that is my takeaway) — so has Korowicz…

              And in one foul swoop you dismiss all of the very hard work with a ‘I don’t think’….

              Sorry but I don’t think carries much shall we say ‘gravitas’ when you have the heavy weights explaining in minute detail why BAU implodes and in a relatively short period of time we descend into a rather primitive state of affairs.

              In order to have anything even remotely resembling civilization we need oil. No – actually we need gasoline.

              Gasoline requires refineries — and supply chains to keep those refineries operational — and to distribute the gasoline.

              Let’s say you have your old tractor — you can keep it running for some time without spare parts — how do you get gasoline way up there in the north?

              Refineries are complex systems — how do you keep those things running?

              If you cannot explain that then we are back to my scenario of the ‘one month without BAU’ reality.

              Because that is going to be the reality if there is no gasoline. There is no way around that.

              Yes you might survive — but again — I don’t see this as being a Little House on the Prairie existence… it will more likely be more along the lines of a Hobbesian nightmare.

              I am not totally without hope – I am doing much as you are — my best to get ready for what is coming …. but I am fairly certain that I am not going to like what the new normal means… I am probably underestimating how bad it will be …

              Because I have not tried to go a month (not even a day) without some support from BAU….

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