A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved.
1. Oil prices are set by our networked economy.
As I have explained previously, we have a networked economy that is made up of businesses, governments, and consumers. It has grown up over time. It includes such things as laws and our international trade system. It continually re-optimizes itself, given the changing rules that we give it. In some ways, it is similar to the interconnected network that a person can build with a child’s toy.
Figure 1. Dome constructed using Leonardo Sticks
Thus, these oil prices are not something that individuals consciously set. Instead, oil prices reflect a balance between available supply and the amount purchasers can afford to pay, assuming such a balance actually exists. If such a balance doesn’t exist, the lack of such a balance has the possibility of tearing apart the system.
If the compromise oil price is too high for consumers, it will cause the economy to contract, leading to economic recession, because consumers will be forced to cut back on discretionary expenditures in order to afford oil products. This will lead to layoffs in discretionary sectors. See my post Ten Reasons Why High Oil Prices are a Problem.
If the compromise price is too low for producers, a disproportionate share of oil producers will stop producing oil. This decline in production will not happen immediately; instead it will happen over a period of years. Without enough oil, many consumers will not be able to commute to work, businesses won’t be able to transport goods, farmers won’t be able to produce food, and governments won’t be able to repair roads. The danger is that some kind of discontinuity will occur–riots, overthrown governments, or even collapse.
2. We think of inadequate supply being the number one problem with oil, and at times it may be. But at other times inadequate demand (really “inadequate affordability”) may be the number one issue.
Back in the 2005 to 2008 period, as oil prices were increasing rapidly, supply was the major issue. With higher prices came the possibility of higher supply.
As we are seeing now, low prices can be a problem too. Low prices come from lack of affordability. For example, if many young people are without jobs, we can expect that the number of cars bought by young people and the number of miles driven by young people will be down. If countries are entering into recession, the buying of oil is likely to be down, because fewer goods are being manufactured and fewer services are being rendered.
In many ways, low prices caused by un-affordability are more dangerous than high prices. Low prices can lead to collapses of oil exporters. The Soviet Union was an oil exporter that collapsed when oil prices were down. High prices for oil usually come with economic growth (at least initially). We associate many good things with economic growth–plentiful jobs, rising home prices, and solvent banks.
3. Too much oil in too short a time can be disruptive.
US oil supply (broadly defined, including ethanol, LNG, etc.) increased by 1.2 million barrels per day in 2013, and is forecast by the EIA to increase by close to 1.5 million barrels a day in 2014. If the issue at hand were short supply, this big increase would be welcomed. But worldwide, oil consumption is forecast to increase by only 700,000 barrels per day in 2014, according to the IEA.
Dumping more oil onto the world market than it needs is likely to contribute to falling prices. (It is the excess quantity that leads to lower world oil prices; the drop in price doesn’t say anything at all about the cost of production of the additional oil.) There is no sign of a recent US slowdown in production either. Figure 2 shows a chart of crude oil production from the EIA website.
Figure 2. US weekly crude oil production through October 10, as graphed by the US Energy Information Administration.
4. The balance between supply and demand is being affected by many issues, simultaneously.
One big issue on the demand (or affordability) side of the balance is the question of whether the growth of the world economy is slowing. Long term, we would expect diminishing returns (and thus higher cost of oil extraction) to push the world economy toward slower economic growth, as it takes more resources to produce a barrel of oil, leaving fewer resources for other purposes. The effect is providing a long-term downward push on demand, and thus on price.
In the short term, though, governments can make oil products more affordable by ramping up debt availability. Conversely, the lack of debt availability can be expected to bring prices down. The big drop in oil prices in 2008 (Figure 3) seems to be at least partly debt-related. See my article, Oil Supply Limits and the Continuing Financial Crisis. Oil prices were brought back up to a more normal level by ramping up debt–increased governmental debt in the US, increased debt of many kinds in China, and Quantitative Easing, starting for the US in November 2008.
Figure 3. Oil price based on EIA data with oval pointing out the drop in oil prices, with a drop in credit outstanding.
In recent months, oil prices have been falling. This drop in oil prices seems to coincide with a number of cutbacks in debt. The recent drop in oil prices took place after the United States began scaling back its monthly buying of securities under Quantitative Easing. Also, China’s debt level seems to be slowing. Furthermore, the growth in the US budget deficit has also slowed. See my recent post, WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”.
Another issue affecting the demand side is changes in taxes and in subsidies. A change toward more taxes such as carbon taxes, or even more taxes in general, such as the Japan’s recent increase in sales tax, tends to reduce demand, and thus give a push toward lower world oil prices. (Of course, in the area with the carbon tax, the oil price with the tax is likely to be higher, but the oil price elsewhere around the world will tend to decrease to compensate.)
Many governments of emerging market countries give subsidies to oil products. As these subsidies are lessened (for example in India and in Brazil) the effect is to raise local prices, thus reducing local oil demand. The effect on world oil prices is to lower them slightly, because of the lower demand from the countries with the reduced subsidies.
The items mentioned above all relate to demand. There are several items that affect the supply side of the balance between supply and demand.
With respect to supply, we think first of the “normal” decline in oil supply that takes place as oil fields become exhausted. New fields can be brought on line, but usually at higher cost (because of diminishing returns). The higher cost of extraction gives a long-term upward push on prices, whether or not customers can afford these prices. This conflict between higher extraction costs and affordability is the fundamental conflict we face. It is also the reason that a lot of folks are expecting (erroneously, in my view) a long-term rise in oil prices.
Businesses of course see the decline in oil from existing fields, and add new production where they can. Examples include United States shale operations, Canadian oil sands, and Iraq. This new production tends to be expensive production, when all costs are included. For example, Carbon Tracker estimates that most new oil sands projects require a price of $95 barrel to be sanctioned. Iraq needs to build out its infrastructure and secure peace in its country to greatly ramp up production. These indirect costs lead to a high per-barrel cost of oil for Iraq, even if direct costs are not high.
In the supply-demand balance, there is also the issue of oil supply that is temporarily off line, that operators would like to get back on line. Libya is one obvious example. Its production was as much as 1.8 million barrels a day in 2010. Libya is now producing 800,000 barrels a day, but was producing only 215,000 barrels a day in April. The rapid addition of Libya’s oil to the market adds to pricing disruption. Iran is another country with production it would like to get back on line.
5. Even what seems like low oil prices today (say, $85 for Brent, $80 for WTI) may not be enough to fix the world’s economic growth problems.
High oil prices are terrible for economies of oil importing countries. How much lower do they really need to be to fix the problem? Past history suggests that prices may need to be below the $40 to $50 barrel range for a reasonable level of job growth to again occur in countries that use a lot of oil in their energy mix, such as the United States, Europe, and Japan.
Figure 4. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.
Thus, it appears that we can have oil prices that do a lot of damage to oil producers (say $80 to $85 per barrel), without really fixing the world’s low wage and low economic growth problem. This does not bode well for fixing our problem with prices that are too low for oil producers, but still too high for customers.
6. Saudi Arabia, and in fact nearly all oil exporters, need today’s level of exports plus high prices, to maintain their economies.
We tend to think of oil price problems from the point of view of importers of oil. In fact, oil exporters tend to be even more affected by changes in oil markets, because their economies are so oil-centered. Oil exporters need both an adequate quantity of oil exports and adequate prices for their exports. The reason adequate prices are needed is because most of the sales price of oil that is not required for investment in oil production is taken by the government as taxes. These taxes are used for a variety of purposes, including food subsidies and new desalination plants.
A couple of recent examples of countries with collapsing oil exports are Egypt and Syria. (In Figures 5 and 6, exports are the difference between production and consumption.)
Figure 5. Egypt’s oil production and consumption, based on BP’s 2013 Statistical Review of World Energy data.
Figure 6. Syria’s oil production and consumption, based on data of the US Energy Information Administration.
Saudi Arabia has had flat exports in recent years (green line in Figure 7). Saudi Arabia’s situation is better than, say, Egypt’s situation (Figure 5), but its consumption continues to rise. It needs to keep adding production of natural gas liquids, just to stay even.
Figure 7. Saudi oil production, consumption and exports based on EIA data.
As indicated previously, Saudi Arabia and other exporting countries depend on tax revenues to balance their budgets. Figure 8 shows one estimate of required oil prices for OPEC countries to balance their budgets in 2014, assuming that the quantity of exported oil is pretty much unchanged from 2013.
Figure 8. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from APICORP.
Based on Figure 8, Qatar and Kuwait are the only OPEC countries that would find $80 or $85 barrel oil acceptable, assuming the quantity of exports remains unchanged. If the quantity of exports drops, prices would need to be even higher.
Saudi Arabia has set aside funds that it can tap temporarily, so that it can withstand a lower oil price. Thus, it has the ability to withstand low prices for a year or two, if need be. Its recent price-cutting may be an attempt to “shake out” producers who have less-deep pockets when it comes to weathering low prices for a time. Almost any oil producer elsewhere in the world might be in that category.
7. The world really needs all existing oil production, plus more, if the world economy is to grow.
It takes oil to transport goods, and it takes oil to operate agricultural and construction equipment. Admittedly, we can cut back world oil production with lower price, but this gets us into “a heap of trouble”. We will suddenly find ourselves less able to do the things that make the economy function. Governments will stop fixing roads. Services we take for granted, like long distance flights, will disappear.
A lot of people have a fantasy view of a world economy operating on a much smaller quantity of fossil fuels. Unfortunately, there is no way we can get there by way of a rapid drop in oil prices. In order for such a change to take place, we would have to actually figure out some kind of transition by which we could operate the world economy on a lot less fossil fuel. Meeting this goal is still a very long ways away. Many people have convinced themselves that high oil prices will help make this transition possible, but I don’t see this as happening. High prices for any kind of fuel can be expected to lead to economic contraction. If transition costs are high as well, this will make the situation worse.
The easiest way to reduce consumption of oil is by laying off workers, because making and transporting goods requires oil, and because commuting usually requires oil. As a result, the biggest effect of a cutback on oil production is likely to be huge job layoffs, far worse than in the Great Recession.
8. The cutback in oil supply due to low prices is likely to occur in unexpected ways.
When oil prices drop, most production will continue as usual for a time because wells that have already been put in place tend to produce oil for a time, with little added investment.
When oil production does stop, it won’t necessarily be from high-cost production, because relative to current market prices, a very large share of production is high-cost. What will tend to happen is that production that has already been “started” will continue, but production that is still “in the pipeline” will wither away. This means that the drop in production may be delayed for as much as a year or even two. When it does happen, it may be severe.
It is not clear exactly how oil from shale formations will fare. Producers have leased quite a bit of land, and in some cases have done imaging studies on the land. Thus, these producers have quite a bit of land available on which a share of the costs has been prepaid. Because of this prepaid nature of costs, some shale production may be able to continue, even if prices are too low to justify new investments in shale development. The question then will be whether on a going-forward basis, the operations are profitable enough to continue.
Prices for new oil development have been too low for many oil producers for many months. The cutback in investment for new production has already started taking place, as described in my post, Beginning of the End? Oil Companies Cut Back on Spending. It is quite possible that we are now reaching “peak oil,” but from a different direction than most had expected–from a situation where oil prices are too low for producers, rather than being (vastly) too high for consumers.
The lack of investment that is already occurring is buried deeply within the financial statements of individual companies, so most people are not aware of it. Dividends remain high to confuse the situation. By the time oil supply starts dropping, the situation may be badly out of hand and largely unfixable because of damage to the economy.
One big problem is that our networked economy (Figure 1) is quite inflexible. It doesn’t shrink well. Even a small amount of shrinkage looks like a major recession. If there is significant shrinkage, there is danger of collapse. We haven’t set up a new type of economy that uses less oil. We also don’t have an easy way of going backward to a prior economy, such as one that uses horses for transport. It looks like we are headed for “interesting times”.
Hi Gail- very topical with recent price drop announcement by Saudi.
Which comes down the end game- as you say there is [5 perhaps?] years of investment already paid out in new or improved recovery oil and the longer term investments will wither coupled with 5% decline rates in old fields and increases in oil exporters home markets- so I’m not sure of the end result given economic contraction [or as in the UK economic growth being in house prices which doesn’t use much fuel] reduces demand.
I tried explain this to a friend- with mixed results and linked your blog- but I see it as a highway traffic jam after an accident [2007 crash]- the traffic still backs up and there is a wave of start, stop slow recovery but also cars overheat, or run out of fuel until we hit a nightmare stagnation.
Syria and Egypt [even the UK] have shown the way to other exporters- don’t go all out, keep some in reserve- so with the economic model of ever rising prices not playing out and oil having an affordability fixed price there is a strange competition between the main power economies -US China, Europe, Japan- and none can afford the top price, which comes down to what valuable service/products they can offer.
I wonder if part of the next phase is a rejigging of economies with ‘value’ and back scratching coming into play- the world economics of the 19th century [and new opium wars!]
As I write this the WTI oil price is at 76 something. I would like to get Gail’s insight into what is going on. The degree of the current fall in energy prices and the gain in the value of the dollar seems without precedent. The best evaluation of what is going on that I have heard is the oil exporting nations are pulling money out of US equities. This is not talked about in the mainstream news but would possibly explain the dollar gaining so much in value. The degree to which this is happening could lead some one like me to wonder almost how conspiratorial this all is and exactly where it is coming from. With prices falling so much right now the word collapse seems like it might be appropriate.
Hi, Paul,
i am not like this. If the situation will force me to become a killer, I will kill myself first!
Millions of people who died of hunger in Aftrica did not become violent!
By the way an information here from Germany: Small companies in the metalworking industry lost huge parts of their operating levels after the summer holidays. The MSM did not report this yet.
http://www.bloomberg.com/energy/
Oil price back on the move down after yesterday’s drop:
WTI -1.49 to 77.29
Brent -1.45 to 83.33
The paper US Wall Street Journal front page headline article today was
Saudi Oil Price Cut Upends Market
Move Paves Way for Further Price Declines, Adds Pressure on U.S. Energy Producers
A glimpse into life post collapse (completely unplugged from BAU)…
Surviving in the Siberian Wilderness for 70 Years (Part 1/4)
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I would like to suggest that there does exist a narrow path by which our species can squeeze through the inevitable bottleneck of Peak Everything with which the next hundred or so years will confront us. It is called conscious intelligence. As J.M. Clark, a thinker of long ago, wrote in the Journal of Political Economy (1927), Knowledge is the only instrument of production that is not subject to diminishing returns. The proper use of our intellectual abilities is the one and only way we are going to survive. Of course, consciousness is painful, as was portrayed in mythic format thousands of years ago in the biblical book of Genesis.
Understood correctly, the story of Adam, Eve and Eden is in reality not one of a fall, but of mans rise a rise from the animal state to sapient consciousness. The two trees in the myth are actually the same tree, a metaphor for the Central Nervous System (the tree both of life and of knowledge, the arbor vitæ or axis mundi found in many early religions) with its foliage in the brain the fruit of which is not an apple but knowledge itself. The talking snake is a metaphor for curiosity, more intense in homo sapiens than in any other species. Adam and Eves becoming clothed is a symbol of the recognition of selfness of an individuality apart from society and the environment. (Such progression can be seen in small children as well.)
The expulsion from paradise and attendant hardships are metaphors for the fact that mankind must use his head in order to survive, not just his animal impulses, even though these latter are still quite necessary. Generally speaking, homo sapiens finds brainwork to be agony. Hence the universal practice of ingesting mind-altering substances from alcohol to cocaine. Late (i.e., post-Exilic) Jewish and early Christian exegetes misinterpreted the Genesis myth as a sinful fall, when it actually symbolized our emergence to the godlike state of thinking beings. Interpreted rightly, it is a religious mandate to use our neocortices circumspectly. The animalism of our inner brains must be kept under the control of the most recently evolved outer layers. Organizations such as the Post Carbon Institute point the way here. At the same time, such control entails suppression of the irrational savagery which is so characteristic of us. The planet simply cannot tolerate much more of the brutality, overload and excess which result from our pre-human evolution. We still have one foot in the garden of Eden; we must leave it consciously, definitively and forever.
This is a tall order. But we have no choice. The constraints and behaviorisms of nature were established (dare one say designed?) before the Big Bang. We must discipline ourselves as a species and choose the epistemological path the path of learning and knowledge. Science and technology are part of that path, as are philosophy and the liberal arts and religion. The way leads between the extremes of barbaric domination (e.g., ISIL) and suicidal nihilism (e.g., Communism). We cannot change the past, but we can still choose a way to survive. The future is not hopeless, but it does offer a knifes edge, a tightwire, that we can traverse to a higher stage of life.
Prior to the harnessing of oil to do our work, man harnessed slaves to yokes to do his work — and give him a higher chance of survival….
Why would he not do that when the energy slaves are no longer available?
This concept that man is fundamental good or that he will eventually see the errors of his ways — the evidence is stacked tens of thousands of years against this….
Religion tells us we are good — we want to believe we are good — but we are absolutely not – nor will we ever be.
Hi theedrich,
Appreciate your thinking.
I don’t understand how to reconcile the “epistemological” path with the history of mankind. Two examples of highly civilized societies, pre-war II japan and germany, quickly come to mind. Germany had some of the finest scientific minds and high culture. Yet somehow that was not enough of a force to influence politics. Morality, then, is not necessarily the kindred spirit of advanced learning.
What is the higher stage of life? How do you measure conscious intelligence?
Marc Faber echoes what Gail has been saying regarding the price of oil and why you need a certain price or oil companies lose money, go out of business and Countries can’t pay their social bills they’ve promised to their citizens.
http://www.zerohedge.com/news/2014-11-03/alan-greenspan-marc-faber-i-never-said-fed-was-independent
Faber: “Well basically if oil falls below $75 to $70, I don’t think it will stay there because a lot of production will be cut and exploration will be cut, and actually some companies will get into serious trouble financially. The oil price decline is not necessarily very good for the United States. It helps the consumer to some extent, but a lot of capital spending has gone into oil and natural gas, and some of these companies are already today cash flow negative. So if oil prices went lower, it may actually have an adverse impact on the US economy.
Except too much of a good thing may not be very good for Saudi Arabia and the other oil producers. You can extract oil in Saudi Arabia at very low cost, but you have to understand the population of Saudi Arabia has now reached I think 25 million. So the social cost is very large. They need an oil price of around $80. If oil prices went down – and let me remind you oil hit a high in July 2008 at $147 and within six months it dropped to $32, but it didn’t stay there. It rebounded. And I think Saudi Arabia and most oil producers would be in trouble if the oil price went below $70 and stayed there.
REGAN: But you don’t anticipate that it will stay there. It’s – it’s supply and demand ultimately, and if it goes to $70 you see less investment and drilling and thus less supply here in the US. So $70 is the floor in your view?
FABER: Not necessarily the floor, but it won’t stay low for a very long time. I think it’s – at the present time, farmers are by and large losing money because the price of corn, wheat, soybeans has collapsed by around 50 percent from the highs and the costs are up substantially. I don’t think oil would stay down for very long because I live in an emerging economy. I can see one thing. The demand for oil in the regions of the emerging world where 80 perent of the population of the world lives is going up still from very low per capita consumption levels compared to say the European economy or the US.
Peak What? Dancing With The Devil
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…)
Summary
Crude oil under $80 is most welcome, however there may be side effects.
Some oil producing countries may be forced to borrow more in the bond market.
Energy (oil) related speculative (junk) debt costs could cause debt stress.
Existing and future production projects with breakeven points above $80/bbl may be jeopardized.
The Politics of Dancing
In general, at the current price point $80 and under, foreign producers are able to produce the oil more cheaply at $10-$30 per barrel, but may not be able to balance their budgets, regardless of the level of production.
Current Mega Projects
10/15/2014 from Reuters: How does this affect current industry development projects? Statoil Venezuela official Luisa Cipollitti says that mega-projects globally are under threat, and estimates that more than half the world’s biggest 163 oil projects require a $120 Brent price for crude.
Since Venezuela needs $120 a barrel oil to break even on its national budget, the above industry-backed comment would seem to be self-serving and should be taken with a grain of salt.
Junk Fills The Gap
10/15/2014 from Bloomberg: Speculative-grade bond deals from energy companies have made up at least 16 percent of total junk issuance in the U.S. the past two years.
Debt in the high-yield energy index has lost 5 percent on average since the end of August, compared with a 2.6 percent decline for the broader junk-bond market.
Oil and gas producers often have credit facilities in which their capacity to borrow is determined by the value of the company’s reserves. Falling oil and gas prices may prompt those companies to lower the value of their reserves and potentially lead to liquidity constraints for producers with significant borrowings.
07/29/2014 from the EIA: “Based on data compiled from quarterly reports, for the year ending March 31, 2014, cash from operations for 127 major oil and natural gas companies totaled $568 billion, and major uses of cash totaled $677 billion, a difference of almost $110 billion. This shortfall was filled through a $106 billion net increase in debt and $73 billion from sales of assets, which increased the overall cash balance. The gap between cash from operations and major uses of cash has widened in recent years from a low of $18 billion in 2010 to $100 billion to $120 billion during the past three years.
The Nattering One muses… Given current market prices and production costs, which we covered here, if crude oil prices fall much below $80 for a sustained period:
1. Existing and future production projects with breakeven points above $80/bbl may be jeopardized, leading to higher unemployment and increased dependence on foreign oil.
2. Some oil producing countries will either be forced to borrow more in the bond market to cover the shortfall in oil revenues or renege on promises to their citizens. Any resulting civil unrest could garner support for ISIS and other terrorist groups.
3. Energy (NYSEARCA:OIL) related speculative (junk) debt costs coupled with production failures from item #1, will cause debt stress (default) for companies with marginal cash flow and/or reserves.
In FY2013, the bulk of a $110 billion cash shortfall for 127 major oil and gas companies was filled through a $106 billion net increase in debt. About 40% of the energy sector is rated B2 or lower.
How could one play this? If you think oil will fall below $80 and remain there for an extended period:
#1 is easy, keep an eye on the energy sector with emphasis on oil and related E&P (exploration and production sector). You may want to short companies involved in major projects and their debt (buy back bonds on large caps) as profit margins will become thinner.
#2, if it’s terrorists or civil unrest, as a rule, we don’t play where lives could be in the balance, as this should be verboten for speculators. Regarding the sovereign debt, one could always short the sovereign debt of the countries requiring the higher oil market prices.
#3, as in #1, the energy sector with emphasis on oil and related E&P, specifically high yield bond news and the companies involved. You can short the companies and their debt.
If you believe oil will remain above $80 or at least violate then retrace above $80:
#1 you can start nibbling on some beaten up stocks and debt in this sector right now and keep nibbling as oil declines further.
#2 ditto for the sovereign debt of these countries.
#3 take a flyer on the debt. If debt spreads widen too much, low cash prices and higher yield will draw in investors with a tolerance for higher risk and depending on the individual companies’ circumstances, the rewards could be substantial if oil remains above $80. Some funds are already rolling up their sleeves, but they might be catching falling knives.
Post 9/11, Hubbert’s Peak Oil theory has already lent itself to upwards price pressure on oil vis-a-vis a futures contango involving an unnecessary fear premium. In fact, PO is listed at Investopedia as the second largest factor that influences the price of crude oil, something we will be Nattering about in the near future. In the meantime, we could have another unnecessary contango begat of energy related junk debt and foreign national budgets tied to the price of crude oil. As the Joker said…
These developments could affect numerous automotive, transport, commodities and energy/oil related mutual funds, ETFs and stocks.
http://seekingalpha.com/article/2632005-peak-what-dancing-with-the-devil?page=2
This demonstrates the challenges that gov’t fuel subsidies present…
New Indonesia Leader Widodo Looks to Tackle Fuel Subsidies
JAKARTA, Indonesia—New President Joko Widodo is weighing a bold move to tackle costly fuel subsidies with a price rise of more than 50% on some fuels, but legislators in a parliament controlled by his rivals are signaling opposition, saying the increase would be too much for poor Indonesians to bear.
Mr. Widodo was sworn in as Indonesia’s seventh president Monday and has yet to form his government. But advisers have been tasked with studying the subsidy issue and suggest that he will propose an increase next month to slash a widening bill and free up money for social spending.
The fuel subsidies, a legacy of the more than 30-year rule of former President Suharto, have long presented a quandary for Indonesia’s leaders. They now gobble up $20 billion annually and if Mr. Widodo doesn’t rein them in, he will have little money to improve infrastructure or meet campaign pledges on health care or education. But raising fuel prices has bred riots in the past.
An average 50% increase in the prices of subsidized fuels would see gasoline prices rise from 6,500 rupiah a liter to 9,500 rupiah a liter, while diesel would rise from 5,500 rupiah a liter to 8,500 rupiah a liter—meaning a serious increase not only for fuel but for goods that depend on transport to reach markets.
Mr. Widodo’s advisers say the increase would mean the government will be able to save about 10 trillion rupiah ($828 million) this year and 141 trillion rupiah ($11.71 billion) next year, which would cut the subsidy cost to 6.7% of total government spending from 13% if the government does nothing.
But one of Mr. Widodo’s economic advisers, Arif Budimanta, said Monday that the government will probably need a green light from the legislature, saying, “There’s no clarity in the current budget that the government can raise subsidized fuel prices without approval from the parliament.”
Mr. Widodo’s rivals control the legislature and have threatened a strong opposition to him, though he has been on a round of peacemaking with his rivals, including with defeated presidential candidate and former general Prabowo Subianto.
“I do not agree that the government should increase fuel prices, as it will make the people suffer,” said Ramson Siagian, a legislator from Gerinda, Mr. Subianto’s party. “There are many ways we can [cut subsidy costs] without hiking fuel prices, such as compulsory uses of natural gas for motor vehicles.”
Outgoing President Susilo Bambang Yudhoyono faced turbulence when he tried to cut the popular subsidies during his 10 years in office. He declined to hand his successor a cut before stepping down, arguing that Indonesians already had to pay higher costs for electricity and natural gas in increases earlier this year.
Initiated as a measure to stabilize prices and help the poor, the subsidies have increasingly been seen as a gift to the growing consumer class as Indonesians prospering from a recent boom add cars and motorcycles to the roads.
Any increase in the price of oil or fall in the value of the currency will increase costs for the government. Two years ago, faced with violent street protests, Mr. Yudhoyono failed to get parliamentary support to raise fuel prices by an average of 33%. That handcuffed government spending and—because Indonesia has been a net fuel importer since early 2000s—helped blow out the current-account deficit.
Mr. Yudhoyono’s government last year raised fuel prices by that amount anyway after parliament declined to interfere. Yet subsidies are still expected to rise to as high as 246 trillion rupiah ($21 billion)—some 4% of gross domestic product, a record—from 240 trillion rupiah last year.
The recent slide in global oil prices may help ease the subsidy burden, but many economists and investors continue to call for an increase.
“The rupiah also has fallen more than 20% since the last fuel-prices hike in June 2013,’’ said Standard Chartered economist Fauzi Ichsan. “The gap between subsidized and unsubsidized fuel prices has widened again to around 45%. This warrants another fuel price hike.”
http://online.wsj.com/articles/new-indonesia-leader-looks-to-tackle-fuel-subsidies-1413793138
Removing fuel subsidies reduces a country’s demand for oil, and thus the world’s demand for oil. The net result is further downward pressure on world oil prices.
Indonesia hiked prices last year double digits… salaries barely nudged up at all … life gets harder … deflationary pressures increase
That is the story of the global economy — how strange that almost nobody is connecting the dots — is it not so obvious why we are sinking into the mud?
When I mention this to finance industry people they say – yes, but we adapt to higher oil prices — and I see yes of course we do — we buy less — we drive less — we fly less — and if left unchecked that leads to a deflationary spiral to hell… so we get QE and other stimulants to try to offset it…
Really … a very simple concept to understand … but they refuse to understand it … because they most definitely understand the implications of what acknowledging what the problem is.
Nobody wants to go into that dark corner….
The God Old “Low Hanging Fruit” Days:
https://www.youtube.com/watch?v=ihKdqk_WJOI
In the scene molasses was used as the oil!
http://en.wikipedia.org/wiki/Utopia_%28UK_TV_series%29
The premise is that there are too many people on the planet — food prices are taking off — and the PTB have developed an additive that will cause 1 in 20 to be sterilized including offspring…
There is a battle between those who vehemently believe this is unethical — and those who believe it is what must be done…
At one point one of the scientists attempts to make money from this stating ‘there will be no pensions, no free senior bus passes because there will be nobody to pay for any of this — so you better be one of the elite or else…’
A very well down programme – you can download on Pirate Bay…
Dear All
Albert Bates on Oil, Banks, Life and everything. Several quotes from Gail and the usual suspects.
http://peaksurfer.blogspot.com/2014/11/what-rough-beast-is-this.html
Don Stewart
Dear Gail and All
The day before Election Day in the US. I am drinking coffee and reading Dennis Bray’s book Wetware: A Computer in Every Living Cell. On page 93 and following he gives us a description of how the bacterium e. coli finds food. Suppose that humans are as smart as e. coli (a huge assumption, of course!) and that the periodic ritual of voting has more than a few resemblances to a bacterium’s need to find food. What sort of lessons might we learn? Does an e. coli have anything to tell us about the likely response of humans to continuing degradation of the physical standard of living?
Bray explains how proteins in our cells are able to perform computations:
‘Like individual microchips in an electronic circuit, protein complexes carry out sets of logical operations. Sometimes the result is a conspicuous physical movement—something you can watch under a microscope. At other times it is a chemical transformation that can be detected only by a sophisticated assay. But the underlying principle from the standpoint of this book is the same—they are all forms of computation. Although built from dumb molecules, protein complexes somehow operate at a higher level. They seem to have taken a step in the direction of life.’
Then Bray oversimplifies the way an e. coli physically finds food:
‘E. coli chemotaxis (food finding) operates by means of two protein complexes.’
There are receptors which sense what is in the environment, and motors which cause the bacterium to either swim in a stable direction or to tumble and swim off in a different direction.
The motors which turn the flagella:
‘Built from more than 40 different proteins, the flagellar motor has a ring of static elements embedded in the membrane and a central rotor. It has other parts needed to control direction and to direct its own assembly (remarkably, the motor and flagellum continue to grow in length while rotating). Rotation is driven by an influx of hydrogen ions (protons) flowing back into the cell through eight protein channels, rather like water in a turbine.
How do the receptors and the motors communicate?
‘Communication between the receptor complex and each of the motors is by diffusion. Molecules of CheY pick up a phosphate from the receptor complex at a rate that reflects condition outside the cell. They then diffuse through the cytoplasm until by chance they encounter one of the flagella motors. There they stick: the more molecules of CheYp that bind, the more likely the motor is to spin clockwise and therefore generate a tumble.’
This single celled bug has a memory…without benefit of a brain:
‘Now I can give bacterial memory a molecular explanation. Bacteria store a running record of the attractants they encounter. This tells them whether things are better or worse. If things are improving, continue swimming; if not, tumble and try another direction.’
So, obviously, the running memory is important in controlling behavior:
‘You can investigate the origins of this running record in more detail by exposing bacteria to a step change in the concentration off an attractant. Now it is clear that what the bugs respond to is not the concentration of aspartate per se but its rate of change. A sudden rise or fall of aspartate creates a signal—changes the tumble frequency or the level of CheYp. But once aspartate has settled down to a steady concentration, the bug mo longer responds. Biologists call this adaptation, but a mathematician examining the time course of response would call it differentiation. By measuring the rate of change in the signal, the receptor cluster has in effect performed calculus.’
Physically, how does it remember?
‘The answer, in a word, is methylation, the chemical addition of a methyl group (CH3). Two enzymes in the receptor cluster continually add and remove methyl groups from the receptors. The methyl groups, rising and falling in number, control the signals sent from the receptors, working somewhat like the volume control on a radio.’
If you are insufficiently impressed:
‘I should stress that the events I’ve been describing take place in a cell about two micrometers long, perhaps a hundred times smaller than the smallest speck you could possibly see with your naked eye. The molecules themselves are hundreds of times smaller still. The addition of methyl or phosphate groups takes place at the level of individual atoms’.
Having learned something about e. coli and food, what might we speculate about hundreds of millions of Americans and Election Day?
First, Ithink that one of the ‘chemical changes’ which Bray talks about in his first paragraph has occurred in the last 8 years. I think Americans no longer believe that laws which are thousands of pages long can ever solve their problems. Obamacare is a poster child of such lawmaking. Which doesn’t stop interest groups from trying. For example, we now have a well-organized interest group trying to use colleges to regulate the sexual behavior of their students in quasi-legal ways…separate and apart from the laws and courts and police. I don’t think most Americans believe this effort will work…but that doesn’t mean that the interest group won’t meet some success.
Second, I think that the average voter has consulted their cellular memory banks and concluded that things are, in fact, not getting ‘better’. Therefore, I expect them to execute a significant ‘tumble’.
I expect that the next big wave will be a superficial embrace of Libertarianism. I use the epithet ‘superficial’ because I expect that it will really be ‘government by corporations, who are shielded from the legal responsibilities which go along with Libertarian philosophy’. Exxon will never be held legally accountable for their role in global warming, because the Avenue K crowd will make sure that laws which ‘deregulate’ energy will contain thousands of clauses shielding the corporations from legal liability.
Third. A little more convoluted explanation for what may happen in the future. If you want to cure a diabetic, you do not put them on a diet which will cause them to lose weight over several years. You can do baryatric surgery, which forcibly changes the metabolic patterns in the body, or you can put them on a shock diet. An example of a shock diet was the British experiment which fed people 600 calories per day of a protein drink, plus all the unadorned vegetables they could eat, for a total of 1000 calories per day. After 2 weeks, the diabetes was clearly in retreat. After 6 weeks, no trace of diabetes could be found. Can you relate this to the methylation process described above? Diabetes is not a weight problem, it is a metabolic problem. And metabolism involves the methylation that Bray describes.
If a person has settled into an unhealthy lifestyle and has acquired diabetes as a result, it will take a ‘shock to the system’ to change all the multiple connections which account for their daily behavior. A brief shock, leaving in place all the habits which have arisen, is not likely to work in the long term. All the many places where ‘methylation…or the equivalent’ has occurred must be overturned.
As we look toward continuing degradation of our physical wealth, then it seems to me that there will be periodic shocks which prompt us to settle into new patterns. If you are a pessimist, you think that no new patterns are possible, and extinction is likely. If you are an optimist, you think that humans will rediscover our biological nature, downgrade severely the financial/ fossil fuel/ mined mineral world that currently dominates our thinking, and go about stimulating the feel good hormones in ways that are ancient, but new to most of the current generation.
The self-appointed role of the Central Bankers is to postpone ‘shocks to the system’ for as long as possible. Quite likely, they are making the eventual shock more unbearable. Nassim Nicholas Taleb is an eloquent spokesman for the ‘many small shocks’ rather than ‘avoid shocks at all costs’ theory.
As an optimist, I like to believe that at least some of us will find pleasure and profit in exploiting Christine Jones’ biological Liquid Carbon Pathway, rather than the fossil fuel carbon pathway.
Don Stewart
Thanks Don, excellent post.
The socio-political situation we have in France mirrors the one you describe in the US (in my view), with a very unpopular president and people willing to try something “harder” ; wether there will be a possible way back-to-normal next time is another question.
Talking about optimists:
Restoring Ecosystems to Reverse Global Warming
Conference at Tufts University, Medford, Massachusetts
November 21-23, 2014
http://bio4climate.org/conference-2014/
Found here (other links on the page, of which one to Christine Jones’ website) :
http://www.eurotrib.com/story/2014/10/28/0011/0579
Another -older- article, same source, with other links:
http://www.eurotrib.com/story/2014/10/7/225842/481
I suppose support for traditional parties will just keep falling down ab aeternum, and people as Le Pen, UKIP, Podemos or watherver will rise, from the left or the right. This doesn’t apply to the US, of course, because there it is assumed politics must be “boring” and limitated to two parties wich in fact are the same (and this, possibly because they get their thrill in international politics, not in the domestic one).
I don’t know, Christian,
maybe we don’t even need the FN:
“France’s Socialist Party cracks down on protests against police murder of Rémi Fraisse” (ecological activist aged 21)
http://www.wsws.org/en/articles/2014/11/04/frai-n04.html
Agro-business backed by State violence. I think this is an illustration of BAU trying to shut up the mouth of people willing to question it. We should see more and more of that in near future (I mean: within our borders).
Consciousness, Free-will, Benjamin Libet’s experiments.
Let me introduce Benjamin Libet (1916-2007) and his works aiming to gauge the relatioship between volition and action, by measuring the brain’s electrical activity (I didn’t find that he’s been already evoked here). From Wikipedia:
“Researchers also analyzed EEG recordings for each trial with respect to the timing of the action. It was noted that brain activity involved in the initiation of the action, primarily centered in the secondary motor cortex, occurred, on average, approximately five hundred milliseconds before the trial ended with the pushing of the button. That is to say, researchers recorded mounting brain activity related to the resultant action as many as three hundred milliseconds before subjects reported the first awareness of conscious will to act. In other words, apparently conscious decisions to act were preceded by an unconscious buildup of electrical activity within the brain – the change in EEG signals reflecting this buildup came to be called Bereitschaftspotential or readiness potential. As of 2008, the upcoming outcome of a decision could be found in study of the brain activity in the prefrontal and parietal cortex up to 7 seconds before the subject was aware of their decision.[6]”
“Libet’s experiments suggest to some[7] that unconscious processes in the brain are the true initiator of volitional acts, and free will therefore plays no part in their initiation. If unconscious brain processes have already taken steps to initiate an action before consciousness is aware of any desire to perform it, the causal role of consciousness in volition is all but eliminated, according to this interpretation. For instance, Susan Blackmore’s interpretation is “that conscious experience takes some time to build up and is much too slow to be responsible for making things happen.”[8]”
http://en.m.wikipedia.org/wiki/Benjamin_Libet
My interpretation is that consciousness is a sort of evolutional* tool that gives us ability to sort of “put together” different things like feelings and memories in an abstract coherent way, AFTERWARDS. Or in almost real time, but with ca half a second gap, sufficient to “veto” the initiated action in most cases.
*: “evolutional” means that homo sapiens is not the only concerned species, even if we humans are likely to have it developed at a higher degree (i think it’s a difference in quantity, not in quality).
Whatever the correct interpretation(s) is (are?), B. Libet’s findings are likely to change our views of freewill and consciousness, and why not the soul ‘et al.’..?
Reblogged this on expressi ab initio.
https://www.advancedenergyforlife.com/article/near-perfect-correlation-between-coal-use-and-gdp-growth
Thanks Paul for your link to this “interesting” website that promotes “clean coal”.
No doubt there’s very close correlation between total primary energy and global GDP, but it only makes sense if we consider all energies used worldwide (eg not only coal and not only for electricity production).
I noticed they seem to present figures in a strange way, for example:
“Every large, advanced coal plant brings the equivalent carbon benefit of removing 1 million cars from the road, according to the International Energy Agency.”
https://www.advancedenergyforlife.com/article/world-counting-coal-power-growing-needs
See also this staggering chart:
https://www.advancedenergyforlife.com/article/us-coal-use-grows-emissions-decline
I just wonder where does the rise in CO2 emisions come from!
IPCC WGI AR5 Chapter Template
Figure SPM.2 from latest IPCC issue; complete IPCC summary:
http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_SPM.pdf
NB: my intention is certainly NOT to start again discussions about climate change.
I just wanted to suggest that we should suspect any report or chart of being interest-oriented.
We’re lucky that Gail isn’t corrupt (at least hope so!)
Pritchard:
The Bank of Japan (BoJ) voted by 5:4 in a hotly-contested decision to boost its asset purchases by a quarter to roughly $700bn a year, covering the fiscal deficit and the lion’s share of Japan’s annual budget. “They are monetizing the national debt even if they don’t want to admit it,” said Marc Ostwald, from Monument Securities.
In a telling move, the bank will concentrate fresh firepower on Japanese government bonds (JGBs), pushing the average maturity out to seven to 10 years. It also pledged to triple the amount that will be injected directly into the Tokyo stock market through exchange-traded funds, triggering a 4.3pc surge in the Topix index.
Albert Edwards, from Societe Generale, said Japan is at the epicentre of a currency maelstrom, a replay of the Asian financial crisis from 1997-1998, though this time the region is a much bigger part of the global economy. “China cannot tolerate this kind of shock when it already faces a credit crunch and has suffered a massive loss in competitiveness. Foreign direct investment into China has already turned negative,” he said.
It was a yen slide in 1998 that led to the most dangerous episode of the Asian drama. China threatened to retaliate, a move that would have threatened the disintegration of the regional trading system. It took direct action by Washington and concerted global intervention to stabilise the yen and contain the crisis.
More http://www.telegraph.co.uk/finance/economics/11202675/Japan-risks-Asian-currency-war-with-fresh-QE-blitz.html
What has been expected for quite a while has now officially happened. The Federal Reserve stated that it would stop intervening on the market where it has been buying treasury bonds and mortgage-backed securities like there was no tomorrow anymore. The program started at a rate of $45B per month but was upscaled rather fast to $85B per month before being gradually scaled back since the beginning of this year. The Fed’s balance sheet has expanded considerably as you can see on the next chart.
More http://www.zerohedge.com/news/2014-11-02/newsflash-fed-isnt-stopping-qe
Thanks! The article points out that bond buying will continue to reinvest the previously invested amounts plus the interest they earned, so it is not really going away. It concludes:
.
… Perhaps we shall see a repeat of the Belgium’s binge buying of US Treasury securities? I am wondering if the central banks are playing a shell game with QE …next up is Japan and Europe…for a few years…and so on.
I’ve noticed that a lot of people tend to view national economies as separate and distinct from the global economy. They can’t see the forest for the trees, in other words. For example, the US oil consumption is going down, but when you add in the oil cost for imported goods (since manufacturing has been exported to other countries) I’ll wager that are “total” total oil consumption has gone up.
As another example, if every state in the US started to publish its own import/export trade numbers, would that make sense? Would we start wringing our hands over Utah’s negative export numbers? Would you implore Montana to increase local production capability? Imagine if mapped the world countries to US states for economic analysis…would that seem a little silly? Just a thought…so I wonder how interconnected the BOJ’s move is to bigger picture.
In a 2005 Address to the Russian Federal Assembly, Russian president Alexander Putin said that the the collapse of the Soviet Union was a major geopolitical disaster of the century. Be that as it may, that collapse engendered a spate of geopolitical insanity in the government of the United States. The bipolar order of the post-WW II world was replaced in the American polity by a bipolar disorder. The high magistrates in DC came to view themselves as Masters of the Universe. It was no longer necessary to maintain national self-discipline, since the main antagonist had collapsed of corruption, exhaustion and incompetence. The U.S. could now embark on any flights of fancy its genosuicidal heart might desire without worrying about external threats.
For the rulership and the left-leaning bureaucrats at the top, this meant that a mountain of money that could be switched from military wariness to social programs of every sort in order to turn America into the land of Oz. In addition, our remaining military forces could be used to make all lands on earth into replicas of Yankeeland. In this vision, all unfriendly dictators (especially in MENA) would be bombed to death and swept aside, American virtues and corporations would be globalized, and not just Europe and Japan but the entire planet would become castrated vassals and tributaries of the Empire.
Among other brain embolisms of the emergent DC deities in Congress was the notion that all social disparities had to be eliminated. Inequality of any type was ipso facto an evil of infernal dimensions. And first in order was the need to provide middle-class homes not just to the alleged poor, but to every bottom feeder and drug addict in the 50 states. Thus was born the so-called sub-prime real estate bubble. Banks were encouraged nay, forced to lend money to masses of economically underprivileged people who had neither the discipline nor the means to make regular mortgage payments. After all, with the USSR gone, magic had replaced reason. We no longer needed to worry about such infelicities as balanced budgets or similar externalities. There was no tomorrow.
After a decade and a half or so of implementing this mindset in housing and other social programs, a massive collapse of the financial markets occurred in 2008. Of course so the masses were told the collapse was totally unpredictable and unforeseen by anyone. But never fear: Big Brother is near, and will solve any problem and wipe every tear from your eye, Stupie.
Thus began a program of massive deception by the federal government. The lords of the realm instituted (α) Quantitative Easing (QE) in tandem with (β) a Zero Interest Rate Policy (ZIRP) on the domestic front, and (γ) enormous inflation of the dollar as the worlds reserve currency (i.e., international medium of exchange) abroad. They also moved the goal posts of the domestic socio-economic measuring system by redefining critical criteria, such as exactly what was meant by unemployment. (People who had given up looking for work after much fruitless searching were simply not counted as unemployed. Only those who constantly re-registered themselves as out-of-work work-searchers were counted in that category. Meanwhile those who had been reduced to only part-time work or vastly reduced salaries were designated as being fully employed.) The size of government itself ballooned in efforts to absorb vast numbers of the idle, with special preferences to protected groups, including newly imported aliens. Anything, in other words, to keep as many as possible of the Lumpenproletariat off of the streets and out of the bars.
But that irksome thing called reality keeps intruding its obnoxious nose into the fairy tale. QE and ZIRP are running into the buzz saw of diminishing returns. Internationally, various trading partners such as Brazil, Russia, India and China (BRIC) are inexplicably annoyed at seeing their loans to Uncle Sam paid back with banknotes labeled $1.00 on their faces, but which are actually worth only 50¢. They are therefore taking initial steps toward partially replacing the dollar as reserve currency with currency swaps among one another and toward introducing other currencies (such as Chinas yuan or even the weakening Euro) as alternative reserve currencies. Just another straw in the wind. Other embryonic straws are things such as widespread computer hacking by criminals and governments, and the development of new weapons and methods of warfare. Could such unpredictable things be the work of the Wicked Witch of the West?
All of this has been occurring even as ever more strenuous and more expensive efforts are being made to counter the diminishing returns encountered in the all-important petroleum industry. The current high god of the realm in the White House assures us in every fundraiser that all is well and getting better. No leftist politician dares mention the fact that the wizard of Oz is a fake. Or that the U.S. financial system is increasingly fueled by trust alone which today means mainly hot air from the Ministry of Propaganda and its affiliates.
Wile E. Coyote, were close behind you.
You make some good points. I wouldn’t use as strong language as you do, of course. And there were pushes and pulls behind these actions–availability of oil supplies, changing price, and a “need” to keep the economy going. Maintaining the military is one way of providing employment and keeping the economy going (especially when the US makes weapons, and sells them to both sides). Another way of pushing the economy along was to encourage folks who really couldn’t afford homes to buy homes. QE and ZIRP are new ways to keep pushing the economy along. There are also problems of job loss, as our economy which uses a lot of high priced oil becomes uncompetitive when forced into a world where other countries use cheaper labor and lower-priced coal.
Did you get a book advance yet ? 🙂
1. “After all, with the USSR gone, magic had replaced reason. We no longer needed to worry about such infelicities as balanced budgets or similar externalities.” Not quite as I remember it. Clinton did achieve a budget surplus and his government spending (compared to Bush) was restrained.
2. “And first in order was the need to provide middle-class homes not just to the alleged “poor,” but to every bottom feeder and drug addict in the 50 states. Thus was born the so-called “sub-prime” real estate bubble. ” I’m pretty sure that sub-prime mortgages was another mechanism to keep the party growing, regardless of any political social agenda.
3. “In addition, our remaining military forces could be used to make all lands on earth into replicas of Yankeeland.” We’ve been doing that way, way before 1989. All the military spending, invasions, and propping up of bad regimes, etc, in the ME is to protect the flow of oil. The US help overthrow Iran’s democratically government in 1953, way before the fall of the USSR (as one of many examples).
‘Why don’t I be nicer?’
Let’s take the most recent incident – where a member basically plastered this site with racist garbage about Muslims in the UK… then proceeded to drop the F bomb over and over…
I simply pointed out that the comments were a) racist and b) lies…
The vast majority of Muslims on this planet are no different than any other people — they just want to be left alone to lead their lives…
Unfortunately many of them were born in a region that is rich in oil reserves — which the west – lead by the US — covets…
Ask yourself how you would respond if a foreign country set up bases in your country — and supported brutal dictators who did their bidding. And the moment you attempted to protest against the situation you were droned.
Of course my posting of comments like this antagonizes those who suck the propaganda teat and believe that Muslims are monsters….
Of course we are the monsters — we blew Iraq to pieces — we support the Gaza genocide … we are behind the Al Qaeda/Al Nusra/ISIS attacks on Assad….
The ‘terrorists’ are only responding to the terror that we inflict on them day after day after day after year after decade.
And someone has the gall to pop on here and say that Muslims in the UK will bash you if you eat bacon?
Based on what we have done their communities they have the right to do a whole lot more than throw a brick through our windows.
I will continue to call this stuff out — all I will not be kind about it…
Let’s imagine how a Muslim person might feel about the lies and racism that were posted setting this latest confrontation off.
There are three uses of debt.
1) To speed growth by building capabilities that will increase production. Except for the fact that the world is finite this use makes sense.
2) To allow current consumption beyond current ability to produce. This use moves current pain into future pain. This form is the one every wisdom story warn us to avoid.
3) To have the government buy the losses of the private rich and transfer them to the public. A disguised theft.
Unfortunately, central bank printing of debt (not credit) is used almost exclusively for #2 and #3.
I think your analysis regards debt in the way that we were brought up to think about debt, a extension of goods now to be paid for with the surpluses of the future.. Now there are no more surpluses of the future so debt has become something much different. For a long time the US$ has been debt as well as all major currencys. The fact that it is regarded as the antithesis of debt is rather curious.
https://soundcloud.com/doomstead-diner/monsta-of-doom-nicole-foss
Debt also raises prices, to make resource extraction profitable. Without debt, we would have a great deal less resource extraction.
Excellent analysis of the Bank of Japan’s monetization of the entire government debt and the global consequences:
http://agonist.org/just-when-you-thought-qe-had-ended/
Excellent article – thanks.
I wonder if the author connects all of this back to the Big Picture — the increasing cost of the production of oil…
Thanks! great article!
“Japan, in other words, is now chronically dependent upon government spending as a prop to its economy, and the government is chronically dependent upon zero interest rates to avoid paying any interest whatever on its mountain of debt.”
October 2014:
1. Oil prices drop, leading to drop in oil production.
2. Japan begins “banzainomics”, opening the floodgates of more QE
One thing to keep in mind is that the QE is being used for many things but as was specified large chunks are going directly into purchasing ETFs i.e. they are buying stocks….
Hence the 5% bump in Japanese stocks on this announcement…
All rather amazing… but this is the new normal … the central banks are the economy…
So if they refuse to let the nearly dead horse fall by pumping massive quantities of speed into him — what will be bullet to the temple that finally takes the horse down?
Basically what we have going on is pretend … but most people believe it … or at least they continue to play along … so it can continue to go on…
A primitive man in the Amazon has the gift of making fire (having found a Bic lighter dropped accidentally from a passing plane) — he becomes king of the village because he has this ability to make fire — but one day the lighter runs out of fluid… there are still fires burning … so nobody doubts his power… then we have a massive storm that extinguishes all fires in the village….
The people ask the king to start new fires with his power — they need warmth and heat for cooking… but of course he cannot….
When all sources of oil peak — the ‘fire’ goes out — and the pretending ends?
When contemplating belief systems, whether secular or religious, consider that the Aztecs weren’t necessarily cruel savages. Rather, they really truly believed that sacrificing young & old, subjects & enemies alike, were efficacious and desired by their respective deities.
Weird, no? But it’s true – they were completely immersed & invested in their system of beliefs and cultural practices. But it’s not strange at all to students of human behavior; in fact, it’s a lock down constant amongst all peoples, in all regions, at all periods of time – past & present.
Humans are animals no different than any other. Give us the power of language, bi-pedal movement, and opposable thumbs, and we think we’re gods, or special creatures made in doG’s image. Taken together, this makes evaluating & understanding the current set of belief structures a trivial exercise.
It really is a thing of beautiful to watch it all unfold. Paul, you may ready to re-enter society, perhaps even a return to Vancouver. Imagine passing your days calmly, bemusedly, watching & observing the never-ending far taking place in the village of Vanity.
B9 — no plans to take a seat for the Big Show anywhere near a heavily populated area or that has cold winters…
A little Shakespeare (Hamlet) to brighten your day 🙂
What a piece of work is a man!
How noble in reason, how infinite in faculty!
In form and moving how express and admirable!
In action how like an Angel! in apprehension how like a god!
The beauty of the world. The paragon of animals.
I will subscribe to your newsletter Steven Rodriguez.
“Use the bamboo to join small metal lugs that are the monocoque framing of the gourd paneled velomobile. ”
Seriously, do you have a link or something?
Don’t have one. The bikes are all over the place! https://www.google.com/search?q=bamboo+bicycles&biw=1198&bih=906&tbm=isch&tbo=u&source=univ&sa=X&ei=x8JXVJ_VHIfriQKixIHQAQ&ved=0CFkQsAQ
also check out the WISIL pages for DIY velomobiles
http://www.recumbents.com/wisil/whatsup.htm
“Liberal” multiculturalism is rapidly collapsing into a totalitarian tyranny in the UK. Our society is now a right mess and the state will keep the lid on tensions only by obliterating all of our ancient freedoms. There have been over 200 terrorism arrests in the UK already this year. There are 85 Sharia law courts in operation in the UK and Islamist gangs patrol the streets of the cities imposing Islamic law and dress. Anyone who fries a traditional English breakfast with bacon is liable to have their windows smashed. Meanwhile any Christians who criticise homosexuality are liable to arrest. Our society was far from perfect but the hard fact is that we had a culture that was acceptable to the vast majority. Now we have a “multiculture” that is aimed at “minorities” and the reality is totalitarian. Britain is getting really frightening. “Liberalism” is just another way to enslave us, like anti-terrorism laws (which problem comes from “liberalism” in the first place.)
http://www.telegraph.co.uk/news/politics/11202290/Sharia-law-or-gay-marriage-critics-would-be-branded-extremists-under-Tory-plans-atheists-and-Christians-warn.html
Anyone who criticises Sharia law or gay marriage could be branded an “extremist” under sweeping new powers planned by the Conservatives to combat terrorism, an alliance of leading atheists and Christians fear.
Theresa May, the Home Secretary, unveiled plans last month for so-called Extremism Disruption Orders, which would allow judges to ban people deemed extremists from broadcasting, protesting in certain places or even posting messages on Facebook or Twitter without permission…
The National Secular Society and the Christian institute – two organisations with often diametrically opposing interests – said they shared fears that the broad scope of extremism could represent a major threat to free speech. Keith Porteous Wood, director of the NSS, said secularists might have to think twice before criticising Christianity or Islam. He said secularists risk being branded Islamophobic and racist because of their high profile campaigns against the advance of Sharia law in the UK…
Simon Calvert, Deputy Director of the Christian Institute, said traditionalist evangelicals who criticise gay marriage or even argue that all religions are not the same could find themselves accused of extremism.
“Anyone who expresses an opinion that isn’t regarded as totally compliant with the Equality Act could find themselves ranked alongside Anjem Choudary, Islamic state or Boko Haram,” he said.
He added: “How many times a day do intellectually lazy political activists accuse their opponents of ‘spreading hatred’?
Paul, seeing as you now profess Animism? you may want to brush up on Shamanism.
May Selassie bless you!
It’s hardly an everyday thing, but cultural clashes do occur.
http://www.thedailybeast.com/articles/2013/10/25/american-student-slashed-in-london-police-eye-muslims-patrols.html
http://www.independent.co.uk/news/police-intervene-in-battle-of-offensive-china-pigs-1157337.html
The more mixed your community, the greater the scope for conflict – it’s a simple fact. And the less wealth there is to go around, the greater the risk of conflict, and the more people will choose their tribe and cleave to it. That’s the frightening thing, and peak oil pushes it forward.
As for wars, well, they are generally instigated by psychopaths (politicians). Notice how hated Blair is in the UK. There were marches and protests when he went to war. But most Iraqis and most Britons never asked for war. By implying that Britons deserve death, you are playing the same racist game in reverse. No mention of Canadians, I notice. Do you deserve death by Inuit? I doubt you think that.
How well I remember the narcissistic Blair strutting proudly alongside Bush on the TV news. It was quite sickening to watch. And to think he is now, what – Middle East peace envoy? Why do the real culprits always seem to get out of jail free?
Adam – I agree – the violence will increase as we move forward.
Should the Inuit and other tribes in Canada kill other Canadians to atone for what the ancestors of European descended Canadians did to them?
I already put my thoughts onto a rather long post the other day….
If the Inuit were strong and could kill all other Canadians in order to retake the country they most definitely would.
Because the human species has NEVER been dominated by any group that is kind or gentle. The vicious ALWAYS take from the weak – and murder and enslave the weak.
Would I understand if the Inuit had the upper hand and the current PTB in Canada opposed them — and they violently overthrew the status quo in Canada — absolutely. I would expect nothing less.
What I take issue with is most people believe the bs that their country is the beacon of light and stands for good — and the other side is evil.
That is hogwash.
If someone tells me that their country carries the biggest stick — and vicously bashes the hell out of others for the purpose of stealing their resources and impoverishing their populations — because the only other option is to be on the receiving end of the bashing …
I would have respect for that position.
I am also respectful of anyone who agrees that the human species is vile and that the world would be better off if we were extinct.
You want to end war? Exterminate the human species.
Exactly. So the corollary is, war will exist as long as h sapiens exist. Since h sapiens isn’t going anywhere fast (within the next 100 years or so), that means war is a constant. Along with that constant, we can also add all the other characteristics of governance, and call it even.
Unless the basic baseline of human existence can be altered, then the pragmatist will treat all of life as a constant. Furthermore, the pragmatist will eye with suspicion any and all who champion/advocate “social change” or make claims that people have positively effected outcomes throughout various times in history.
To the contrary, major institutional changes simply re-label traditional positions. Look no further than the vaunted USA: independence placed wealthy slave holding land owners in the primary slots of governance. No longer merely appointed officials of the crown, but the actual president, senators and representatives.
Once one (correctly) assesses the situation, then it’s easy, in fact, almost trivial, to successfully navigate through the maze to achieve maximum mental/physical reward. Good health, disposable income and ample free time.
When there is abundance, more resources than are needed, then there is civility. When resources are below those required to keep the current population alive then civilization is bloody of tooth and claw.
The last 150 years have been years of abundance due to OIL and coal. If that ends without a replacement then the walled city will return. Those on the inside try to hold on to what they have while those outside try to take enough to stay alive or better still have a margin of safety.
As for the future of violence in Europe, look at the recent street fighting between immigrant Salafists and Kurds, which then drew the attention of neo-Nazis and football hooligans. Violent persecution of the Jews, too, desecration of their graveyards, etc, at the hands of Islamic fundamentalists, (covered up by the EU).
Recent mass immigration from hostile and mutually-antagonistic alien cultures to satisfy an out-dated economic theories (GDP growth through population growth, in defiance of ecological limts) and the desire of businesses for dirt cheap labour is just stoking a Devil’s Cauldron in Western Europe.
If there was ever an example of how scarce resources are fought over it is the endless illegal Israeli settlements that lead to endless wars, suicide bombings, and other atrocities committed by both parties….
Israel moves closer to building 1,000 settler housing units in East Jerusalem
Binyamin Netanyahu unveils latest settlement plan despite US warning that construction will ‘poison atmosphere’ among allies
http://www.theguardian.com/world/2014/oct/27/israel-construct-settler-homes-east-jerusalem-netanyahu
Will the US try to stop this in the UN — you can bet your money they won’t:
If Obama opposes Israeli settlement activity, why did US veto UN vote? http://www.csmonitor.com/USA/Foreign-Policy/2011/0218/If-Obama-opposes-Israeli-settlement-activity-why-did-US-veto-UN-vote
It is a slow moving, glacial type of genocide. It is all about destroying infrastructure including houses over a long, long period of time. 17,000 homes were destroyed in Gaza. They are not killing the people, they are slowing pushing them into a nether world of non-habitable existence. I noticed this 15 years ago when I read about the destruction of a home as a legal punishment for one person’s guilt who was member of the house. Why would they do that? I wondered at the time. Slowly, ever so more slowly, more settlements continue to prop up. It will take 200 years, but that is the end goal.
Dear Paul,
yes, it seems that the atheists are more concerned about the Earth from the point of view of nature protection. The reason is the abovementioned expansionist view of the world that brings the crisis of today`s Christianity. The radical atheists seem to have more discipline regarding the population reduction than religious people, as they lack the belief in eternal life.
The person usually becomes atheist seeing the corruption of the values around him/her caused by the greed of those, who proclaim to be Christians. This inclination towards atheism is strengthened when both the ordinary church members and the church authorities, displaying the same expansionist view of the world, become corrupted and fall into deep troubles caused by hitting the resource limits (alcoholism, drugs, fraud, stealing etc.).
The atheist austerity is like the austerity of the most strict religious orders: both of them consider this world as being destroyed by the human activity. This coincidence is caused by the fact that what we usually see around as Christianity is mostly a very light or distant, folclore version of the radical Christ`s teachings. Many forget that Christ was anti-marriage and anti-family. (“Yes,”Jesus replied, “and I assure you, everyone who has given up house or wife or brothers or parents or children, for the sake of the Kingdom of God, will be repaid many times over in this life, as well as receiving eternal life in the world to come.” Luke 18:29)
“The person usually becomes atheist seeing the corruption of the values around him/her caused by the greed of those, who proclaim to be Christians”
The people I know who are atheists — and those would be most of my friends — did not become atheists because of the hypocrisy or destructiveness of religion — rather they are atheists (or at least agnostics) because that is the logical position to take.
When one has no proof of the existence of a higher power — and it is the believers responsibility to prove the higher power — then the logical position to take is atheist or agnostic.
Of course the fall back is ‘you have to have faith – you have to believe’ — sorry that does not cut it any more than me claiming I have visions sent to me by beings from another galaxy telling me that they are the Creator of the universe and demanding that I spread love and peace.
Dear Paul,
I did not write about ” the hypocrisy or destructiveness of religion”, but about the resource limits.
Religions, as “the faith in something more or above”, are intrinsically equipped with the faith in more perfect knowledge. That is why the communist atheism was beaten: by those who believed in something more, i.e. religious people, who basically doubted the neverending progress of the communist cornucopians.
Again, this ultra-conservative group can be both among atheists, as among the religious people. The atheism itself or the Christianity itself are just approximating the truth. Neither Christianity, nor atheism have the truth. Both of them are just getting closer to it via faith, the faith in better knowledge, better life, better afterlife etc.
Anyway, when you do not have resources and energy, you can not spread love and peace, as is the exemplary case of Ik people used by Joseph Tainter in his book Collapse of Complex Societies:
http://en.wikipedia.org/wiki/Ik_people
“Anyway, when you do not have resources and energy, you can not spread love and peace”
100% agree.
If I had to choose a religion it would have to be animism … it is the only one that makes any sense whatsoever … because it demands that we respect the planet.
Animism (from Latin animus, -i “soul, life”)[1] is the worldview that non-human entities (animals, plants, and inanimate objects or phenomena) possess a spiritual essence
Animism encompasses the belief that there is no separation between the spiritual and physical (or material) world, and souls or spirits exist, not only in humans, but also in some other animals, plants, rocks, geographic features such as mountains or rivers, or other entities of the natural environment, including thunder, wind, and shadows.
Of course the mainstream religions mock the animists as savages…
I am not sure the mainstream religions mock the animists as savages. The version I hear today is, “God reveals himself in many ways. Other religions may have insights as well.”
Of course, the mainstream religions have sent missionaries to areas with animist religions. In fact, my paternal grandparents were missionaries to Madagascar, and my father grew up in Madagascar. So I hear a lot about how the people of Madagascar benefited from missionaries coming and improving health and living conditions for the people–also how the population of Madagascar rose as a result (cringe!).
Farley Mowats book snowalker ( short stories not the movie script) documents the churches war on native beliefs as well as Hudson bay companies practice of promising natives paradise then transporting them to desolate remote places and islands and abandoning them when the price of fur fell. Its pretty amazing how some of them made it. One seal- ten people and a snow shelter for the winter falls a little short in amenities for me. A work of fiction with basis of real events. RIP Farley
Gail is right, the mainstream churches do respect other religions, including the indigenous religions of America. They are headed in a more Universalist direction. Of course there is also the problem of the BAD in other religions as well as the good (I wouldn’t try to hold an interfaith prayer happening with ISIS lol) but that is a problem for all of society not just the churches.
I just happened to come across this yesterday but a perusal of any denominational website would prove her right. The open attitude of the modern churches is very, very well known. The denominational universities certainly wish to welcome native Americans and all others to the learning environment.
http://www.thecollegefix.com/post/19818/
Loyola University Chicago recently christened a new pagan student club, with its student organizer saying the group aims to help pupils at the private Catholic college find the God they seek, not just the one featured in the Bible.
“Loyola’s mission states that ‘seeking God in all things’ is one of the main tenants of the university,” said the group’s student president, Jill Kreider, in an email to The College Fix. “While the mission primarily focuses on the Abrahamic God, there is no reason a Pagan student (or a Hindu, Baha’i or Sikh student) cannot seek using his or her own faith, regardless of which god they are doing it for.”
The alliance initially defined itself on its Facebook page as seeking “to unify Pagan, the spiritual but not religious, those seeking faith or religion, minority faith students (including but not limited to: Buddhists, Taoists, Shinto practitioners, Santeras, etc…) pluralists and those students interested in New Age religions on Loyola’s campus. If you don’t have a faith group on campus, we’re here to fill that gap!” One of the most common beliefs often associated with paganism is also Wicca.
As a start, the group plans to host documentary viewings on religion in America, as well as films which explain the belief systems of club members “in a positive and truthful light,” Kreider said. Speakers from the “Chicago Pagan community,” including some Loyola alumni, may also give talks, she said.
http://d2jkk5z9de9jwi.cloudfront.net/wp-content/uploads/2012/03/-11747-440×296.jpg
Pope John Paul II invited all religions to come and pray with him at Assisi, including Animists and successive popes have continued the tradition.
http://en.wikipedia.org/wiki/Day_of_Prayer
Pope John Paul II organized the first World Day of Prayer for Peace in Assisi, Italy, on October 27, 1986. In all there were 160 religious leaders spending the day together with fasting and praying to their God or Gods. They represented 32 Christian religious organizations and 11 other non-Christian world religions, including:
Christian religions and organizations:
Roman Catholic Church
Greek Orthodox Church
Russian Orthodox Church
World Council of Churches
World YWCA
World Alliance of YMCA’s
Friends World Committee for Consultation (Quakers)
Mennonite World Conference
Reformed Ecumenical Synod
Baptist World Alliance
Christian Church (Disciples of Christ)
World Alliance of Reformed Churches
Lutheran World Federation
Anglican Communion
Old Catholic Church of Utrecht
Assyrian Church of the East
Hinduism
Sikhism
Buddhism
Judaism
Islam
African and North American animists
Shintoism
Zoroastrianism
Baha’i
Talk is cheap … if they respect other religions … particularly ‘primitive’ religions … then why are the mainstream religions still sending missionaries around the world to convert the ‘heathens’…
Why don’t they just leave them alone?
The Canadian Lutherans participate in the Canadian Interfaith Conversation.
quote:
The Canadian Interfaith Conversation is an advocate for religion in a pluralistic society and in Canadian public life. We want to promote harmony, dialogue and insight among religions and religious communities in Canada and with all Canadians, strengthen our society’s just foundations, and work for greater realization of the fundamental freedom of conscience and religion for the sake of the common good and an engaged citizenship throughout our country.
I suppose part of the issue is focus, and not having infinite personal energy.
If a person feels that he or she is called to try to help the injured, sick and needy, there is a need for the use of more resources. At the same time, the focus is not particularly on what problems extracting and using these resources causes.
If a person feels that he or she is called to try to take care of the planet earth, then there is more focus on birth control, saving endangered species, and trying to reduce carbon dioxide emissions.
This difference may not have any connection with belief in another world to come.
I know I get a whole lot of e-mails from Georgia Interfaith Power & Light, a group whose mission is “to engage communities of faith in stewardship of God’s Creation as a direct reflection of our faithfulness through worship, education, and the sustainable generation and efficient use of energy.”
“The person usually becomes atheist seeing the corruption of the values around him/her caused by the greed of those, who proclaim to be Christians.”
This phenomena is not limited to the Christians. I have witnessed very very strong entitlement beliefs amongst Hindus and Buddhists also. I m pretty sure the phenomena applies to all religions. There seems to be a model that of a pet owned by a superior being that gets fed. While some come to religion for a sense of understanding and connectedness the vast majority do so to form a key component of there consumption model. I get to consume because im the chosen. or I get to consume because Im very spiritual. These consumption models are very very strong, a mandate from god to consume and anyone or anything who interferes is going against the Buddha, Krishnah. baby Jesus himself! I think there are practitioners of religions who are genuine but the majority are just running their consumption model program. Other wacko programs too.
“which is contrary to killing and stealing from others that governs the behaviour of the most aggresive fittest that survive in the wild nature.” I think the acknowledgment that these actions are taboo is really a cornerstone of humanity. The next step is not just prohibition but a understanding that these actions work against what separates us from animals – conciousness. There are some people involved in religions that want the human species to evolve and reflect that with their actions but they seem to be sparse.
OrdinaryJoe,
“’which is contrary to killing and stealing from others that governs the behaviour of the most aggresive fittest that survive in the wild nature.’ I think the acknowledgment that these actions are taboo is really a cornerstone of humanity. The next step is not just prohibition but a understanding that these actions work against what separates us from animals – conciousness. There are some people involved in religions that want the human species to evolve and reflect that with their actions but they seem to be sparse.”
Understand that they work against consciousness? How do you mean? I thought you would say that they work against *survival* (which would be my guess).
“There are some people involved in religions that want the human species to evolve”
How many centuries have religious movements been trying to get us to ‘evolve’
This would be like trying to convince a lion to not kill and eat a lamb….
As expected, religion has completely failed in its attempts to change human nature — we remain the only animal that commits industrial scale murder… slavery… rape … and Mr Jones and Mr Roberts continue to go to mass on Sunday yet during the week they continue to commit sin after sin after sin…
All of this links back to survival — we need food — we need mates — we are in competition from the day we are born.
This will never change.
The only difference is that we are competing in more sophisticated ways — we buy brand name goods to help us get mates — we wipe out entire populations to make sure we get fed…
I would argue that all religion has done is taught us feel guilt over our actions — but ultimately it has changed nothing.
This documentary lays it out rather well — at the beginning they visit a canton in Switzerland where Glencore is domiciled — the people who live there do very well because of all the taxes Glencore pays — much of Glencore’s profits come from bad behaviour in Africa….
When a vote is put to the people to change the way this works — it is crushed — because at the end of the day we are told to feel guilty about not sharing or even caring — but when we are asked to accept less — so others get their share — no goddam way!
Thanks for the video, Paul. Could Zambia (and I imagine every country in Africa ) have seen this (sort of bind) coming? In my small community, an investor wants to contract with the “government” to “improve” a ballpark. But one of our citizens was able to analyze how the deal would run up community costs–a lot of it from infrastructure mainainance that keep adding cost with each year. It’s likely now that the community will vote it down. If so, the ballpark will stay drab and dusty. But the community will not be in debt.
Paul you dont care about the logic. What you really enjoy is using your considerable writing talent to create horror. not that your a Edgar allen Poe. your not.
Its so clear to me that your motives are very removed from the logic you pretend to value. The reason is simple. Look at every one of your posts. They are elaborate creations of horror. You use words to create horror. You could just stick to the issues. You wouldn’t reach orgasm with that. You could write like Gail. The reason I like Gails writing so much is she just delivers the facts. . Your intent from your first sentence to the last is to have the reader experience horror.
Paul there are genuine spiritual leaders who have made progress in the human condition. They are few and far in between.
Joe — but isn’t that the history of man?
Not only do we inflict horror on each other – wars, slavery, rape, murder, pillaging….
But we also do the same to the other species with whom we share the planet. We are wiping them out http://www.theguardian.com/environment/2014/sep/29/earth-lost-50-wildlife-in-40-years-wwf or enslaving them in hell-hole conditions called farms — to feed on their tortured bodies at our convenience.
And are we improving? Nope. Same as it ever was
Is it really necessary to have me point all of this out?
If you cannot see that then you are in denial.
“there are genuine spiritual leaders who have made progress in the human condition”
Have they changed anything? Have they stopped the slaughters? Have they made man any less greedy?
Of course not — because we are what we have always been — and always be — worse than the most vicious animal — we are a species more monstrous than anything the most twisted sci-fi writer could come up with…
We soothe our consciences (troubled only because of religious propaganda that tells us we are sinning when we are surviving) by dropping our spare change into the UNICEF box at the check out counter — after spending a few hundred dollars on food while billions live worse than dogs….
And we feel good about that! Done my part to save the world – pass the cheetos will ya…
But in the big picture this is what we need to do to survive — because unlike an animal in the wild who has to compete with another animal for food
We have to compete with the most brutal brilliant animal every to walk the face of the earth…
He is cunning — he is vicious…
He employs hired guns with the latest death machines to do his bidding so he can remain in the comfortable confines of his wonderful home with his wonderful family, with reality TV, and Facebook, and Dancing with Stars
Completely oblivious to what is being done in HIS name to ensure that he does not have to witness the horrors that are required so that he can keep his cushy life….
And he will take all and leave his brother with nothing because he does not know the word ENOUGH.
Man — the eating, breathing, walking horror show.
Feel free to point out my lapses in logic.
ordinaryjoe
“We have consciousness.” I haven’t heard it put that way before. And though it sounds straightforward, it takes (for me) a lot of thought to figure it out one way or the other. Meanwhile, I leave you with the simple suggestion that if we DID want to survive (warming, methane emission, plague, financial collapse, etc.) we’d have to straighten up and fly right as a species. Among other things, that might mean the universal application of the golden rule. IF those who are most destructive wanted to survive, they too would have to behave differently. To believe that in a suddenly interconnected world, it can work for the strong to destroy the weak (and the planet) and survive long term, strikes me as delusional.
We have consciousness. We are able to manifest. Feel you big toe. You just did that you made that moment of feeling your big toe to be what it is. I created your opprtunity to manifest the feeling. We can understand perspective. We can understand context. To murder denies all of the creativity and possibilities of both the victim and the murderer.
We are something more than animals. Animals have there own consciousness also. It is different but it is so obvious and palatable. ( no jokes about the palatable part please) :)When we deny consciousness it negates what our possibilities are. Its much worse than a animal killing. Much much much much worse. We have a choice. The animal doesnt. If you argue we are just animals that is your dream your your creation. You used your essence to deny your essence. Spiritual suicide.
And we have chosen.
See your history books — replete with descriptions of our choices – murder, genocide, rape, pillage
Paul wrote: “And we have chosen. See your history books — replete with descriptions of our choices – murder, genocide, rape, pillage.”
Because we have free will, and some choose these options. But we only have free will WITHIN THE SYSTEM. All animals find a niche in which to survive. There is a food chain. We are all atom-exchangers and we are all part of it. Nature red in tooth and claw. Survival of the fittest – and the most ruthless. And it is in the nature of a lot of humans to be ruthless. In our NATURE. Out highly evolved intelligence also allows us to be very inventive in our violence and ruthlessness. But this is what nature and evolution have allowed us to do and become. Personally, I wouldn’t have created a world in which a food chain and hence violence exist, while, for instance, telepathy (apparently) isn’t allowed.
Now, I’ve never read Kierkegaard, but in his existential angst, he apparently claimed that he’d never asked to be part of life, this system, and therefore he “wanted to see the manager!” A logical response, amusingly expressed. Humans, like animals, follow their nature to the most extreme degree of which they are capable, so in a sense we are no more “immoral” than animals – it’s just that the results in our case are far more devastating. So if you want to complain – see the Manager! 🙂
The opposite of choice is utter desperation.
Joe the greatest failing I see with religion is the inability to appreciate infinity or even a thousand years. You are not dead for a thousand years or a million or billion or trillion or tens of trillions, you are dead forever. And the Muslim faith decrees 72 virgins for martyrs. Now if I was twenty years old I don’t think 72 virgins would stay that way for very long, let alone a thousand years or a hundred billion. trillion, trillion years. I don’t know how they rationalize that but any reasonable person should be able to come to grips with the simple reality.
I think I would soon begin to appreciate true death. Yes death is the end, we should embrace it, be thankful we don’t have to live forever….that would be a true hell. Compared to the life of the universe even Earth will be around for a mere blink, so even Buddhists have a bit of recalculating to do.
There are a lot of things we really don’t know. Maybe death is the end; maybe it isn’t.
If anyone was ever in doubt about how far the PTB will go to keep BAU alive as long as possible… this puts those to bed:
The BOJ decided to increase the pace at which it expands base money to a whopping 80 trillion yen ($726 billion) per year. Previously, the BOJ targeted an annual increase of 60 to 70 trillion yen.
The BOJ sailed into deeper uncharted monetary territory with the announcement that they would triple annual purchases of exchange-traded funds (ETFs) and Japanese real-estate investment trusts (REITS) to 3 trillion yen and 90 billion yen respectively.
The Nikkei surged 5% in minutes to a seven year high after the Bank of Japan decision, while gold fell.
http://www.zerohedge.com/news/2014-10-31/gold-falls-stocks-record-highs-japan-goes-%E2%80%98weimar%E2%80%99-%E2%80%9Chere-be-dragons%E2%80%9D
The central banks ARE the markets… money printing IS the fundamental driving force in the markets …. print money – buy stocks… if others try to dump or short… print MORE money … buy more stocks…
One message from this — you might as well put money into an index fund because it will go nowhere but up until the collapse occurs… and when the collapse occurs it won’t matter if you get lucky and time it pulling your cash out… this collapse will be final… all assets will be worthless.
It amazes me that most people have not go a clue about what is really going on …. they act as of this is a normal situation …. when it is so obviously beyond incredible… completely unprecedented…
There is definitely a huge balance problem!
For whatever its worth, well expressed and somehow I’m not feeling at all well.
Even though it is hard to fathom that the public are in a daze about it all.
Several friends and co-workers have expressed joy about “making money” in the stock market. I just let out the making money is really printing….still they do not get it!
You gotta dance while the music plays so may as well make money in the markets on the back of this central banking suicide mission … because it could go on for quite a while longer … and inflation will be destroying you if you sit in cash or gold…
When I see what Japan has just done — and that it has not blown up in their face (yet) — that seems to rule out that the logic of the markets will be what collapses us — also when we see the zero tolerance for protest by governments that would seem to rule out the violent overthrow black swan….
The PTB are willing to do whatever it takes to hold this together — leading me to feel more strongly that it has to be a physical limit that triggers the collapse — as in a peak in the overall global oil production… we saw that happen in 2005 and soon after we had collapse at our door step … only delayed by ‘Drill Baby Drill’…. so we have our precedent in terms of the impact of peak oil….
If shale had not come online big time in 09 onwards… I don’t think any amount of money printing could have stopped the collapse for very long.
Yup. Everything is fine and your crazy.And so it will be. Its not “making money” its “creating wealth”. Not only do you have wealth you have creativity to boot. Sex appeal too. See how easy it is! Opportunity is everywhere if your creative sexy and not crazy.
“It amazes me that most people have not go a clue about what is really going on …. they act as of this is a normal situation …. when it is so obviously beyond incredible… completely unprecedented…”
Japans fiscal policies are somewhere in between the land of oz, and Narnia. Yet I had a Rachel Maddow, Krugman listener tell me that Japan demonstrated why debt/gdp at 300% or 400% is quite acceptable, even desirable, so some are informed in a land of Oz sort of way.
Paul was that you in the spa? 🙂
Ozs dept to gdp is 600% – just saying
If interest rates are zero, and a country never has to pay back the debt, perhaps high debt rates sort of work for a while. Or maybe QE makes it all possible, again for a while.
Exactly. At this point, the situation is no different than straight money printing.
If you’re honest with yourself and can admit the truth, it’s a thing of beauty to watch/observe intelligent people at work. I mean, imagine how clever it is to utilize a simple bookkeeping entry via the issuance of debt to offset charges of outright monetization.
After all, those $mutli-trilliions of sovereign debt are “assets” to counter-parties. Brilliant! However, it should be advised that it’s quite impolite to suggest that: (a) bond holders are earning 0% interest; (b) their principle balance is eroding at the rate of inflation; and (c) but even better, they aren’t EVER going to be re-paid anyway! LOL
So print, mofos, print!
As Gail expressed, even the giant gains in the Stock markets only make us all “feel richer”, in reality we are getting poorer! I suppose if one uses their capital gains now in tangible assets or consumer consumption that may make the crash more palatable.
Boy, I have a more realistic understanding of what is really going on!
How come I do not feel better myself?
Kubler-Ross. You’ve made it to the depression stage, while Paul is still stuck @ anger.
This is a necessary process of freeing yourself of the bonds of mental enslavement to a system you (once?) **believed** was equitable and operated in the best interests of the People.
Thackeray nailed it so long ago in Vanity Fair; life really is just a massive farce. The system takes young minds and molds behavior to the advantage of the elite. Once enlightened, it’s easy to see it all laid bare as a ludicrous hoax.
But even better, you won’t be weighed down any longer by false expectations. In fact, you’ll be able to see moves telegraphed far in advance. At that point, you’re in the same league as Wall street sharks, but without the portfolio. Almost 100 years ago, Von Mises said:
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
B9 – why do you suggest I am in the anger stage? Is it because I am cheering for the extinction of the species?
To clarify I am not angry when I see the atrocities that man commits — I expect those. What irritates me is those who believe that their side is somehow moral and the other side evil…
People who believe this are caught in the matrix…
If one were to argue that all sides are ‘evil’ because man is ‘evil’ then I would be good with that.
it does not mean that anything would change — but it would demonstrate logic — and an understanding that life is ‘a massive farce’
Without a doubt understanding that life is a massive farce is uplifting — knowing that there is no way to change the way things have always been and always will be is freedom — recognizing that trying to stop the ‘evil’ that man commits against his brother is futile — because if you help the weak they will become strong and commit the same ‘sins’ — that too is freedom.
The thing is most people have gone through their entire lives (me included) believing in this nonsense… very few people are willing to accept the truth and realize that their positions are a complete and utter waste of time — they are ultimately wrong — and they ultimately will only lead to intense levels of frustration
Because man is what man is — the religious claptrap about treating others as they treat you is bogus… and it only applies when there is abundance…
When there is no abundance and you follow those tenets — you will be seen as weak — and you will be taken advantage of — because you ARE weak…
I see it all the time here in Bali — the foreigner shows up trying to do the ‘right thing’ — and he gets fleeced. It is not because the Balinese are any different — it is because they do not have abundance… and the foreigners do.
How long can a debt stay on the books?
Here’s is a story about Britain paying back debts dating back to the South Sea Bubble crisis of 1720:
http://www.businessinsider.com/the-uk-is-paying-centuries-old-war-debts-2014-10
When does adding more debt become useless?
(I’ve posted some of these links before but this is a different one). The following story discusses how the marginal productivity of debt has been declining. It compares the year on year change (delta GDP/delta Debt) and the result is quick amazing. Basically, if the trend line has been heading toward 0 in around….2015 or so. This chart is updated to 2013/2014(?) and there was an uptick for 2011/2012. But the overall trend is clear.
http://www.forbes.com/sites/keithweiner/2014/07/18/whats-wrong-with-borrowing-more-and-getting-less/
As Gail has pointed out, it would be interesting to see that same chart for the whole world (still looking).
(is there a way to post these charts directly without linking them?)
usually you can right click – copy image location – then paste… let me try:
http://blogs-images.forbes.com/keithweiner/files/2014/07/Marginal-Productivity-of-Debt.png
@paul thanks!
Dear Christian
(Posted out of order to get more space on the lines.)
Let me preface my response by saying that I believe it takes an honest PhD to figure out soil biology and how that relates to plant biology. I am not a PhD, and my wife would advise you to count the silver if I am around. I do observe some things in my garden. I see small farms with practices both good and bad. I see grazing operations both good and bad. I see golf courses which are actually cemeteries…there is nothing alive.
So let’s take a look at two of Christine Jones’ papers and see what sort of provocations we can find. First, take a look at:
http://soilcarboncoalition.org/files/JONES-Carbon-that-counts-20Mar11.pdf
She begins with the provocation:
‘Failing a cataclysmic collision with an asteroid or a volcanic explosion of earth-shattering proportions, the thin layer of weathered rock we call soil will have to feed 50% more people before this planet gets much older. The problem has not gone unnoticed. Learned men and women have gathered, books have been written and conferences convened. What has been discussed? How to build new topsoil? No. Everything but.’
Then she claims that we know very little about soil. But also proceeds to tell us a lot more than most of us know. For example, she shows a soil profile, one side of which has been intelligently managed for high photosynthetic activity by cover crops, the other side which has been plied with industrial phosphate rock.
At this point, are you sure about all the claims that when the phosphate mines run out, we will all starve?
One of our members here keeps claiming that enormous amounts of organic compost must be added to soil to bring it back to life. No compost was added to the left hand side. Do you think the commenter actually knows what he is talking about?
Look at the carbon sequestration, in highly stable forms of carbon, on the left hand side. Are you sure that cutting back on fossil fuel consumption is the ONLY way to control atmospheric carbon?
New Zealand has the reputation as some sort of ‘garden of Eden’. But read her statement about the degradation of soils in New Zealand from ‘heavily fertilized pastures’. Are you sure you would want to go to New Zealand?
Contemplate this passage:
‘The levels of acid-extractable minerals in the LHS soil profile are higher than those on the RHS soil in the following proportions, calcium 277%, magnesium 138%, potassium 146%, sulphur 157%, phosphorus 151%, zinc 186%, iron 122%, copper 202%, boron 156%, molybdenum 151%, cobalt 179% and selenium 117%.’
Are you still sure that ‘when the minerals run out, we will all die?’ Where do you think the minerals are coming from?
Then read the next paragraph ‘Where Do the New Minerals Come From?’ Do you think someone has been lying to you? Or are people just ignorant?
Ponder this statement:
‘The newly accessed minerals, particularly iron and aluminium, plus the newly fixed N, enable rapid humification of labile carbon. However, the liquid carbon needed to drive the process will not be forthcoming if high analysis N and/or P fertilisers inhibit the formation of a plant-microbe bridge.
The ‘classic’ models for soil carbon dynamics, based on data collected from set-stocked conventionally fertilised pastures and/or soil beneath annual crops, where the plant-microbe bridge is dysfunctional, fail to include nutrient acquisition from the bulk mineral fraction and hence cannot explain rapid topsoil formation at depth.’
Shockingly, Christine sees all those high-test packages of industrial fertilizer as poisons. Are you still sure about all those Peak-Oil and Green Revolution claims relative to the real requirements for productive soil?
Christine closes with this:
‘How much longer will the farming community have to endure the myths, misconceptions and misleading models put forward by the people currently employed to solve the problem of declining soil carbon, dwindling soil fertility and losses in soil function?
Will government show some initiative, seek the truth and act on it?’
Now do you get a clue as to why the head of the Rodale Institute is walking from the farm to Washington trying to get attention to some of the real solutions to carbon dioxide levels in the atmosphere, as well as myriad other problems which afflict us?
The second article is the one I already referred you to (originally posted by Stefeun):
http://permaculturenews.org/2014/10/29/nitrogen-double-edged-sword/
I just want to bring to your attention a connection which you may not have made. Christine points out that the water, nitrogen, and carbon cycles are inter-twined. Let’s consider the forecast for less reliable rainfall. We can try to irrigate from groundwater (which isn’t working out too well at the moment in California or in the Ogallala). We can build earthworks, such as swales and small ponds, to slow the water down and give it time to sink into the ground. We can key line plow the subsoil. Or we can stop adding synthetic nitrogen to the soil, plant cover crops, rebuild the soil food web, restore the water, carbon, and nitrogen cycles, and greatly increase the ability of the soil to let rainfall infiltrate. (I referred to Fred Kirschenmann’s reference to the greatly increased infiltration in some farms in the Midwest with cover crops.) All of those solutions probably have a place and time where they are most appropriate. But it is clear to me that a high infiltration capacity is a basic asset. And to restore that basic asset, we have to stop piling on the synthetic nitrogen and the phosphate rock.
So…would you say that ‘we will all die when the Haber-Bosch process can’t function anymore’ or would you say that ‘if we keep the Haber-Bosch process going we will all surely die’? (I am oversimplifying for dramatic effect. As Christine notes, a small amount of synthetic nitrogen is useful. I covered that in my previous note.)
Don Stewart
Dear Don
I appreciate very much your feedback. it’s very interesting. In the 70’s researchers and bureaucrats were amazed looking at Fukuoka’s achievements, while never stepped out of big ag. Why, was one of Fukuoka’s questions. We know why, entropic love, GDP, tecnophilia, megalopolis… Fukuoka made up his numbers and said all japanese could be fed on available land using his methods, and I’ve not seen anybody demonstrating he was wrong. Of course, tens of millions of japaneses would need to move their ass for this to happen, as everywhere else while in some places not even Fukuoka could feed everybody.
And as you say, infiltration is generally an important point, it surely is where I live. By the way, there was some disturbance past week when ag. dept. dean went to sign the cancellation of a joint venture he had previously signed with Monsanto (he was compelled to withdraw by the whole rest of the universitiy) occasion at which he received a glass of roundup ready on his suit. What a miss, it looked as just being cleaned…
Don, Christian,
one more comment with a few links about Agroecology, Organic farming and Soil build-up. Most of it is already known of you, my point is only to provide links for further investigation, and (sorry Gail!) to draw attention on people advocating healthy soil’s ability to mitigate (even reverse) climate change.
Firstly, a nice infographic image made by Christensen, comparing Agroecology with Industrial farming:
http://agroecologygroup.org.uk/index.php/about/about-infographic-download/
The Rodale Institute, where you can find tons of information, such as this study:
“The Farming Systems Trial (FST)® at Rodale Institute is America’s longest running, side-by-side comparison of organic and chemical agriculture. Started in 1981 to study what happens during the transition from chemical to organic agriculture, the FST surprised a food community that still scoffed at organic practices. After an initial decline in yields during the first few years of transition, the organic system soon rebounded to match or surpass the conventional system. Over time, FST became a comparison between the long term potential of the two systems.
As we face uncertain and extreme weather patterns, growing scarcity and expense of oil, lack of water, and a growing population, we will require farming systems that can adapt, withstand or even mitigate these problems while producing healthy, nourishing food. After more than 30 years of side-by-side research in our Farming Systems Trial (FST), Rodale Institute has demonstrated that organic farming is better equipped to feed us now and well into the ever changing future.”
http://rodaleinstitute.org/our-work/farming-systems-trial/
On same topic there’s this WSJ article about Rodale’s FST study:
“Can Organic Farming Counteract Carbon Emissions?”
http://blogs.wsj.com/numbers/can-organic-farming-counteract-carbon-emissions-1373/?mg=blogs-wsj&url=http%253A%252F%252Fblogs.wsj.com%252Fnumbersguy%252Fcan-organic-farming-counteract-carbon-emissions-1373%252F
Both links about FST come from The Carbon Underground ; scroll down this page:
https://www.thecarbonunderground.org/
from FAQs: “The Carbon Underground is a non-profit organization created to support the use of biological carbon sequestration in order to help reverse climate change. As study after study continues to show the ability of healthy soil to do this, it became apparent that no organization existed responsible for educating people and building support for restoring and protecting our farms and grasslands as a means toward reversing the threat of climate change. TCU was created for this purpose.”
(doesn’t look very “serious” but Christine Jones is listed as senior advisor)
A couple more links, not connected to above but still about soil:
– Symphony of the Soil Trailer – YouTube – Symphony of the Soil Trailer
http://www.symphonyofthesoil.com/the-films/symphony-of-the-soil/
“Unfolding with gentle joy and an unexpected beauty, this ode to the miracle of the Earth’s topmost layer gives us a newfound respect for the ground beneath our feet.” – New York Times *Critics Pick
“This film raises the bar. It makes you care about our Earth’s precious skin, so rare among planets.” – Washington Post
“True to its title, the film really makes a symphony of soil…” – Civil Eats, Sally Neas
Symphony of the Soil in English with subtitle options: English, Spanish, French, Chinese, German, Italian, Portuguese. 104 minutes
– Soil Microbes Help Save Plant-growing Input Costs :
(from site soildoctor.org) “Who could ever imagine that soils could be presented in a hybrid sit-com, sci-fi, who-dun-it theatrical production? Thank you, Doug, for making us all appreciate afresh the intricate, dynamic, awesome world of soil. If Doug is on the speaking roster, it’s worth going to the conference just to hear his dynamic presentation.”
Good points Don. I have already started buying charcoal and crunching it down to the size of corn and adding it to my compost and garden. Have you read the story of “Terra Preta”? Fascinating how the Maya peoples fed their large cities with jungle soils that are easily depleted. They simply added charcoal and that started a self sustaining chain reaction that invigorated the soil that to this day yields 8 times the yield than crops planted a few metres away in jungle soil. Turns out our European ancestors also figured this system out long ago. Amazingly once the soil comes alive and starts accumulating minerals on its own the process lasts over 1400 years.
Dear Jarvis
Yes. I learned about Terra Preta from Albert Bates. Don Stewart
Of pigs and lipstick…
Earnings Cheating Season: Is Your Favorite Company Cooking the Books?
We have long believed that the US reporting season should in fact be called the US cheating season as companies game the market to ramp earnings down ahead of company announcements only to beat analysts estimates by 1¢ on the day!
Apparently companies believe the feel-good news headlines of a earnings beat will offset the negative impact of downward guidance ahead of the report. In fact the evidence suggests otherwise: my colleague Andrew Lapthorne has shown that those companies that engage in earnings manipulation underperform those that do not. He developed a very useful MUC Score, Manipulated Underperforms Conservative.
Read more at http://globaleconomicanalysis.blogspot.com/2014/10/earnings-reporting-season-or-earnings.html#jQWyFyzg9MZRd2QW.99
Canadian Oil Sands posts sharp decline in profit
The following news has natural ressource depletion written all over it. Lets analyze it a bit deeper.
http://www.marketwatch.com/story/canadian-oil-sands-posts-sharp-decline-in-profit-2014-10-31
CALGARY– Canadian Oil Sands Ltd., the largest owner of the Syncrude oil-sands joint venture, Thursday said its third-quarter net profit fell 65% from a year earlier, citing lower revenue and foreign exchange-related losses.
Canadian Oil Sands owns a 37% stake in its main operating asset, Syncrude, which is one of the largest and oldest oil-sands producers. Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada’s biggest oil and gas company.
The Calgary-based company, which has struggled to cope with a series of unplanned outages at Syncrude’s surface-mining operations, also slashed its annual maximum output target to 100 million barrels of oil, down from a previous 104 million barrels and an initial forecast of up to 110 million barrels.
Canadian Oil Sands said its net income in the three months to Sept. 30 was 87 million Canadian dollars (U.S.$77.7 million), or 18 Canadian cents a share, down from C$246 million, or 51 Canadian cents a share, in the year-earlier period.
It was hit with C$73 million in foreign-exchange losses in the third quarter, mostly because of its U.S. dollar-denominated long-term debt as the greenback strengthened against the Canadian currency. That was a reversal from the C$31 million it earned on foreign exchange a year ago and reflects a weakening of the Canadian dollar.
Sales volume rose to an average of 87,787 barrels a day in the quarter, up from 84,250 in the same period last year. But the company said average crude prices fell to C$102.58 a barrel, down from C$112.55 a year earlier, and operating expenses increased to C$47.73 a barrel, up from $46.15.
Canadian Oil Sands blamed the increase in operating expenses on higher prices for natural gas, which it uses to power its operations, and maintenance prompted by unplanned outages at processing units. The company has been dogged by reliability issues affecting the upgraders used to churn out synthetic crude oil.
Breakdowns of coker and sulfur-extraction equipment that processes the heavy bitumen extracted from oil-sands mines has drawn criticism from other Syncrude partners. In a conference call also on Thursday, Suncor Chief Executive Steve Williams expressed concern about those equipment failures.
“It’s fair to say that we and the operator have been disappointed in the performance on the asset,” he said, adding he believed the problems would be resolved.
Let’s analyze this a little bit
lower revenues = we are in a depression and depletion of natural resource is killing growth.
cope with a series of unplanned outages at Syncrude’s surface-mining operations = process is more complex than conventional process, diminishing return of complexity, lack of quality staff because private companies don’t want to invest in training and think in long time frame.
Breakdowns of coker and sulfur-extraction equipment that processes the heavy bitumen extracted from oil-sands mines = see above + cannot find quality workers and don’t want to partner with technical school to build skill needed in the future.Using immigrant workers to save cost is not a good strategy but management is too stupid to see that. See link below
Canadians expose foreign worker ‘mess’ in oilsands
http://www.cbc.ca/news/canada/edmonton/canadians-expose-foreign-worker-mess-in-oilsands-1.2750730
I am laughing my ass-off. We are managed by idiots at all level in this society.
It looks to me like a big issue both with Syncrude and with the Russian oil companies is debt denominated in dollars. Then, when the value of the local currency sinks, companies are worse off. According to the article quoted above, earnings dropped from Canadian $246 million a year ago to Canadian $87 million this year, or a decrease of Canadian $159 million. Of this, Canadian $73 million came from foreign-exchange losses, “mostly because of its U.S. dollar-denominated long-term debt as the greenback strengthened against the Canadian currency. That was a reversal from the C$31 million it earned on foreign exchange a year ago and reflects a weakening of the Canadian dollar.” In other words, of this Canadian $159 million change, Canadian $104 million (= C$73 + C$31) came from changes relating to foreign exchange gains/ losses. Thus, only $55 out of the $159 million change came from operations issues.
The report tells us, “Sales volume rose to an average of 87,787 barrels a day in the quarter, up from 84,250 in the same period last year. But the company said average crude prices fell to C$102.58 a barrel, down from C$112.55 a year earlier, and operating expenses increased to C$47.73 a barrel, up from $46.15.” So at this point, rising expenses are not much of a factor (C$47.73 a barrel, up from $46.15), even though the write-up makes it sound like they are. The decrease in oil prices (C$102.58 a barrel, down from C$112.55) reflects a period before the big decrease in oil prices took place recently.
Syncrude is different from most Canadian producers in the extent to which they “upgrade” their crude. Their results may therefore be fairly different from other Canadian producers.
Thanks for the explanation. debt in $ is painful if your currency is falling relative to the dollar. How far will the ruble fall? Is 50 possible?
There is a nuance, though. If you produce for export, a devaluation of your currency could be fine
“The decrease in oil prices (C$102.58 a barrel, down from C$112.55)”
Hasn’t the price fallen even farther since then? Not sure what their current oil price is, but WTI dropped another -1.96 today to 78.58 USD today.
Look at this, it’s getting interesting. They have fans all across Latin America
Soils are then grouped into three groups consisting of:
1. Coarse Grained – divided into gravely soils (G) and sands and sandy soils (S)
2. Fine Grained – divided based on their plasticity properties. (L,H)
3. Highly Organic – are not subdivided. (Pt)
Coarse Gained – are soils which composed of gravel and or sands and which contain a wide variety of particles. These are most suitable for foundations when well drained and well confined. They are soils with good bearing value.
These people are plotting to keep me from my consumption!
You have 10 billion dollars to invest – only two options:
1. You can invest in the production of solar panels.
2. You can invest in simple turbines, pack animals and land that is excellent grazing for the pack animals. You have an overseer who yokes the animals to the turbines forcing them to walk round and round producing a steady stream of electricity 24/7. There is a nearby village that will buy the power. The pack animals breed allowing you to replace old ones (the old ones you eat)
Which option is likely to generate a better return on investment?
Methinks the debate is about WHICH pack animals to use isn’t it?
I think donkeys are more efficient than oxen (less fussy feeders for a start).
Also, my great grandmother lived in a village when they created their own hydro-electricity scheme which, with the water/hydrostatic head avaiailable, meant that they had power for two hours a day. (Just after sunset). They loved it.
This billionaire ??!! 🙂 🙂 reckons he’d do alright with the modified choice 2. above.
You need a pretty resilient turbine for even the pack animal solution to work. Metals eventually experience losses from friction or otherwise degrade (rust, for example).
With whatever “solution” a person comes up with, a person faces the possibility that it won’t work after a time. The animals will catch a disease, or spare parts will not be available for the turbine. Then it becomes necessary for humans who are depending on the solution to scale back, and live without the electricity (or whatever else they were counting on.
Pingback: SEF News-Views Digest No. 72 (11-7-14) | Citizens for Sustainability
“The Malthusian trap is where all increases in food production are consumed by increases in population, ensuring that the greatest number of people continue to live at the lowest possible level.”
Frome one of the comments on the article I posted above.
Gail, why don’t you change the blog settings so that we can see the readers’ latest comments in the right column? It would be easier to follow-up with comments in past pages.
I don’t think that is an option with WordPress and the account I have.
Some readers have in the past told about software that allows them to look at new comments–more of a blog reader. I forget exactly the name. I get a different listing of comments than others do–ordered by date-time posted.
I have been hallucinating this track all morning. Wandering around the woods and looking at the trees, ferns and spotting the mushrooms and giving good advice to the photographers. “Yes there is loads of Alice in Wonderland mushrooms around here but dont eat that unless you want to get really violent for the next five years. Berserker style. Vikings. Yea. Don’t eat that.” It is not political or even moral it is just a track. Yes this is the track that that was tripping me this afternoon. It is not the whole truth but it is a part of it. Tripping hard.
https://www.youtube.com/watch?v=BgKqylxTvOE
A predicament far worse than climate change:
http://www.dailykos.com/story/2014/10/28/1339730/-Unstoppable-Human-Population-Growth-to-about-10-Billion-Will-Cause-Ecosystem-Decline-or-Collapse
Saddle up, o ye horsemen. You ride tonight or this planet is toast.
p.s. Please hurry.
Since Gail has readers from all parts of the globe, I’m sure everyone has their own anecdotal example(s) of how rapid the recent (population) growth cycle has been.
Whether it’s sleepy, quiet fishing villages along the coast of Baja & Portugal that sporting endless fields of condo projects, or previous agricultural regions of Calif now suburbs in their own right, or the recent (over) development of Bali, or the huge immigration into the UK, Calif, Texas, etc, etc, etc, we are all experiencing only the **initial** rise of the J curve.
But that’s not the worst of it: the next compounding cycle expands by an even greater proportion. Now, combine this with diminishing economically retrievable energy supplies and degraded environmental habits on land, sea & air, and what to you have? You have the PTB partying like mofos, with all institutional processes abandoned and rendered useless & ineffective.
Once you can see what is occurring with perfect clarity & understanding, and have discarded any vestiges of your former training and conditioning, then you can be free to operate in the same realm as the PTB. Perhaps without equivalent resources, but certainly with the same emotional equanimity.
Equanimity? If I had the resources of the PTB to protect my children and grandchildren then maybe equanimity. As is …. well this is the NSA, DHS, Mossad, monitored internet.
We certainly do have a population problem.
Yes Ann, humans have made a mess of it, right from day dot. The cause of collapse is overpopulation. No need to intellectualize just go to the basics. Now we have no more new worlds, no more new oceans and forests, no more pristine ecosystems, humans have populated and have left their indelible imprint on every square inch of the planet.
It’s easy to look around and tut, tut about what we have done to the Earth with our run-up to over seven billion in number. But now we are AT seven billion and rising and the devastation is incalculable. Can we begin to imagine the damage we would do as we move from 7 billion to 10 billion?!
It’s the exponential function at work. We don’t see the minor damage when the doublings are small but when the doublings in the vat move into the billions then multiple billions it only takes one final doubling to fill the yeast vat. That is why Gail’s blog title is so pertinent. It IS a finite world but we are absolutely incapable of dealing with it.
The Earth is a space ship. This space ship had resources enough to reach our destination, Humans don’t own the planet, we are not owed or deserve a special place. Our right to inhabit and coexist has to be earned and not assumed, confiscated, demanded and taken.
Dr. Albert Bartlett illustrates the power of compounding:
Suppose I had a magic eye dropper and I placed a single drop of water in the middle of your left hand. The magic part is that this drop of water is going to double in size every minute.
At first nothing seems to be happening, but by the end of a minute, that tiny drop is now the size of two tiny drops.
After another minute, you now have a little pool of water that is slightly smaller in diameter than a dime sitting in your hand.
After six minutes, you have a blob of water that would fill a thimble.
Now suppose we take our magic eye dropper to Fenway Park, and, right at 12:00 p.m. in the afternoon, we place a magic drop way down there on the pitcher’s mound.
To make this really interesting, suppose that the park is watertight and that you are handcuffed to one of the very highest bleacher seats.
My question to you is, “How long do you have to escape from the handcuffs?” When would it be completely filled? In days? Weeks? Months? Years? How long would that take?
I’ll give you a few seconds to think about it.
The answer is, you have until 12:49 on that same day to figure out how you are going to get out of those handcuffs. In less than 50 minutes, our modest little drop of water has managed to completely fill Fenway Park.
Now let me ask you this – at what time of the day would Fenway Park still be 93% empty space, and how many of you would realize the severity of your predicament?
Any guesses? The answer is 12:45. If you were squirming in your bleacher seat waiting for help to arrive, by the time the field is covered with less than 5 feet of water, you would now have less than 4 minutes left to get free.
Our stadium is almost full: http://www.susps.org/images/worldpopgr.gif
Exactly. And as Bartlett correctly noted, the inability to understand the exponential function is one of mankind’s greatest weaknesses. With one caveat, however; Bartlett was merely being both polite and politic.
He couldn’t really come out and say 95% (ie the sheep) weren’t smart enough to understand the implications, but he also couldn’t say that the 5% who did understand use that knowledge to their own personal advantage. Furthermore, it indicts the so-called political leadership and educated intelligentsia. That’s because, rather than operating in the best interests of the People, and acting as stewards of the public weal, they behave as wolves in the throes of blood lust.
But that’s not the worst of it: knowledge of their guilt forces them to create cover stories and invent fables and myths that present both them & us in a favorable light. Hence, our education/conditioning system, which morphs into a non-stop 24/7 media campaign extolling our collective virtues & accomplishments – built on the backs of others.
As most know by now, I’m actually ok with that. Butcher or cattle, there’s no in between. So, my interest tends more towards (winning at) game playing. And to be effective in this arena suggests using Gail’s conclusions not as a conclusion to which one contemplates, but rather, simply a starting point to assess the lay of the land.
sorry late post folks…
an easy way to estimating exponential growth is the Rule of 72
so at 2% growth rate: 72/2 =~ 36 years
Hi Gail,
I thought you might find this article interesting:
http://www.theglobeandmail.com/report-on-business/rob-magazine/is-oil-sands-development-still-worth-it/article21334385/
MAX
Thanks! There are clearly many risks to oil sands developments–one of them being inadequate prices. This can either for oil in general, or for the discount to WTI that heavy oil gets.
Dear Gail and All
I find that John Michael Greer’s current essay explains better than I can, my own position relative to many issues. I guess that the basic disagreement I have with Gail is that I think that getting ahead of the curve, and actually disintermediating now, is a good idea, while Gail thinks it is pointless.
I should add that I do not think total disintermediation is either possible or desirable. I tend to agree with Greer that, following a financial collapse, what remains of society will reorganize itself with far fewer levels of complexity. I believe Gail’s position is total collapse, with no possible reorganization. I prefer to build a robust home economy now, with continued reliance on certain aspects of the external real economy…depending on one’s particular situation.
This is one of those areas where you make choices which will have impacts long into the future….Don Stewart
Add these trends together and you have a recipe for the radical simplification of the economy. The state of affairs in which most people in the work force have only an indirect connection to the production of concrete goods and services to meet human needs is, in James Howard Kunstler’s useful phrase, an arrangement without a future. The unraveling of that arrangement, and the return to a state of affairs in which most people produce goods and services with their own labor for their own, their families’, and their neighbors’ use, will be the great economic trend of the next several centuries.
Disintermediation might happen quickly, if a major crisis shatters some central element of the US economic system—for example, the financial sector—and forces the entire economy to regroup around less abstract and more local systems of exchange. It might happen slowly, as more and more of the population can no longer afford to participate in the intermediated economy at all, and have to craft their own localized economies from the bottom up, while the narrowing circle of the well-to-do continue to make use of some equivalent of the current system for a long time to come.
It promises to bring an end to certain features of economic life that contemporary thought assumes are fixed in place forever: among them, the market economy itself.
This is a direct link to JMG’s article that you are referring to: http://thearchdruidreport.blogspot.com/2014/10/dark-age-america-involuntary-simplicity.html
Among other things, he talks about working around the health care system, by forming relationships directly with acupuncturists and others who work outside the system. I would give another example: Atlanta has a huge number of chiropractors. There are people who visit them for an “adjustment” every time they feel a cold coming on.
I didn’t get the feeling that JMG’s article was about forming such relationships. Clearly some work better than others, as ways of working around the current system. If transportation is needed to the new provider, when transportation is lost, there will be a need to form a new relationship when this one is gone as well.
My point is that the fall is likely to be quite far, because the current fossil fuel system cannot continue. Perhaps there will be steps down to this result, but it is pretty clear that loss of fossil fuels is a likely outcome in the not too distant future. Without fossil fuels, the system will be very different from today. Electricity will be lost as well as oil, except where solar panels and hydroelectric continue to work for a while.
Gail
Note JMG saying that a visit to an MD costs 10 times as much as a visit to an acupuncturist, because the MD works in a very high overhead system while the acupuncturist is likely a one man (or woman) band. Both of them treat a lot of the same problems…which have to do with maladjustments of various kinds. But the MD has to ‘show’ that the illness has a respectable pedigree, else he won’t get paid.
I was at the doctors yesterday for a periodic check up. On the way out, I stopped at the desk. The clerk had two certificates noting the completion of coding schools. I said something to her about being a coding expert She began to enthusiastically describe her career, and how she needs one more coding school to become a ‘master coder’.
As we get poorer, the system has to collapse from the sheer waste. My prediction is that there will be a variety of people who are willing to treat you. Some will take payment in chickens or eggs or turnips.
Don Stewart
What we can conclude is that extreme QE enabled the US to weather the most drastic fiscal tightening since demobilisation after the Korean War, without falling back into recession. Much the same was true for Britain.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11196900/QE-central-bankers-deserve-a-medal-for-saving-society.html
Uh hum… what fiscal tightening? http://www.zerohedge.com/news/2014-03-09/global-debt-crosses-100-trillion-rises-30-trillion-2007-27-trillion-foreign-held
Japan just announce more stimulus and that has shot up the markets…..
President Putin succinctly described US sanctions as “sawing through the branches on which they are sitting” while he presses on with an Eastern pivot which the West dismisses at its peril. That US sole superpower status will be threatened outright by China soon.
True, the US has played its fiercest card, endeavoring to block Russia through the US dollar payment system, but that financial hegemony will only last as long as the dollar is the undisputed currency king. Obama has motivated Russia to disintermediate it.
http://rt.com/op-edge/199212-valdai-russia-putin-conference-west/
http://cluborlov.blogspot.com/2014/10/putin-to-western-elites-play-time-is.html
These things are getting scary… lol, maybe your Bali Paul isn’t such a bad idea…
What are the indications that the PTB know that oil is the problem?
If the German military knows – the German leadership knows – therefore the global PTB know http://www.spiegel.de/international/germany/peak-oil-and-the-german-government-military-study-warns-of-a-potentially-drastic-oil-crisis-a-715138.html
If the IMF knows this – the PTB know this:
HIGH PRICED OIL DESTROYS GROWTH: According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
Fracking has been exempted from The Clean Water Act – why would the PTB be willing to pollute the water table unless they felt they had no choice?
Why would the SEC ignore massive fraud? http://www.bloomberg.com/image/i1ZBrsDh.91c.png
If the central bankers were not aware of the problem then why would they be propping up the markets with printed cash? Why not just let them fail and start over? It’s been done before… By propping up the markets are they not guaranteeing that the final crash is cataclysmic? Is it not better to fall from a table – than a mountain? I think you only do what they are doing because they know there is only a mountain to fall from no matter what they do.
Again, I’m not sure why you keep beating this dead horse. Free yourself of whatever bullshit they taught you at school about such concepts as:
– consent of the governed
– right of self-determination
– borders/peoples/states are to be respected
– the US/EU is defending liberty against aggression
– the military protects our freedoms
– yadda, yadda, yadda
Once you’re ok with the knowledge that everything you know, they know, then you can start to operate with less baggage. In other words, when you are no longer compelled to post stories proving PTB complicity, foreknowledge, etc. At that point, you’ll be able to see the (chess) board more clearly and be able to focus on expected & anticipated moves.
Of course I know…. but there seems to be some doubt about this in the Finite community….
Further to my recent comments on the nature of the vile species known as man…. (i.e. out brutish nature cannot be tamed)…. I am reading an excellent book ‘The Opium Wars’ by Lovell…
It of course explains how the British destroyed China because China attempted to refuse to allow the British to force opium upon them…
The Chinese moaned and wailed about the injustice of it all….
But one intellectual did not question the morality of the British at all… rather he thought these invasions were an inescapable phenomenon of nature:
Yan Fu described to a panicky readership the world of international warfare. ‘In the so-called struggle for survival,’ he explained… ‘people and animals’ … compete for resources for their own survival…races compete with races, and form grousp and states, so that these groups and states can compete with each other.
The weak will be eaten by the strong, the stupid will be enslaved by the clever… unlike other animals, humans fight with armies rather than with teeth and claws.
_______________________________________________________________________
I would suggest that anyone who prefers their leaders to act in a manner other than what is suggested above…. best be prepared to put under the yoke and whip…. because that is what the end result is for those who lose the resource game in a zero sum, finite world.
We are different from animals in that we don’t fight with claws — but we are also different in that we never have enough — we will murder, enslave, torture, starve, beat our fellow man and leave him with nothing — animals don’t do that.
My verdict on the vile human species remains the same — the sooner we are extincted — the better.
My father, the agency guy, was friends with a number of Brits in their respective services when we were stationed overseas when I was a teenager.
Amongst their set, it was widely accepted that India had always been a net loser to the Empire, but that it had been critical to maintain control of the sub-continent’s opium production to ensure supplies for the real prize: Chinese consumers.
I’m sure everyone here is familiar with the Opium wars, and the concessions the Chinese had to make conceding Hong Kong island to the British.
Anyway, the key takeaway element is, at what point did we, as a people, begin to have the truth dolloped out with a fine leavening of propaganda? I mean, the earliest Colonials, and then the new Americans, had absolutely -0- compunction with regard to sugar coating Indian policy: they had to be exterminated. Likewise slavery; until the abolition movement, and even during that period, no one really had a problem treating blacks as livestock.
So, when did it turn? And why? Why can’t we say, yeah, the war on terror is all about maintaining ME oil supplies. Or, yeah, we vilify Russia, and want to reduce them to a vassal state, well, because we want/need their “stuff”.
This is why I’m always kidding/needling Paul. He, more than most, has a great understanding of what’s going down, but is still demonstrating residual effects of his earliest training. Paul, once you’re free of emotional bondage to concepts purposely drilled into your young head, then you’ll have an even better concept of where we are headed.
I am becoming freer by the day…
Interestingly even after the coastal ports were established in China the British did not realize their dream of massive consumer demand for their products — the Chinese either did not want or refused to buy British goods…. Because of this the opium trade remained critical to the British treasury and the balance of trade with China…
Of course the PR machine was in full force even before Mad Men… it was difficult to sell the line that Britain had to keep forcing drugs on the Chinese so that Brits could enjoy tea and silk without bankrupting the country…. so the MSM spewed stories about barbarians who needed civilizing… and for the most part the British lapped it up.
Because most people are stupid and or ignorant… (sheeple) … and the PTB can easily control them with a few well placed words…
Whatever our fate, we CHOOSE to be human or not…..The words strong and weak are not just euphemisms for winner and loser. What about survivor and victim? Who is on record as seeking only to survive? Any one choosing PTSD. Only the path of dignity sets us free. One finds or takes that path by choice, never by chance.
Dear Gail and All
Traumatic experiences have become an epidemic in the modern world.
This evening, I spent some time listening to Bessel van der Kolk describing his experiences treating Post Traumatic Stress Disorder, what neuroscience has to say about it, and what the most promising treatments are. I will oversimplify and state that trauma is not cured by trying to reason with someone. The reptile brain is in charge, and frequently the trauma victim has even lost speech. Trauma is cured when the person is assisted in feeling safe, and given some time to get all the parts of their brain working harmoniously again.
At one point, Bessel was asked to comment on a recent decision by a government official concerning the direction of funding. Bessel was aghast that the official made no mention of the interpersonal issues….when primates are defined as the interpersonal species. He said something like ‘keep me isolated from other people, and I am nobody at all’.
With the social issue in mind, and being aware that the future may deal out some traumatic experiences in addition to our everyday rapes, robberies, spousal conflicts, child abuse, drugs and alcohol, wars, and etc….it seems that even a little knowledge about trauma, how to avoid it, and how to overcome it, might be something useful to have. The treatments that Bessel emphasizes do not include surgery and pills…they look a lot more like being a good mother or paying attention to your own body through activities such as yoga and mindfulness.
You can find information about the book, including a bunch of 5 star reviews, here:
http://www.amazon.com/Body-Keeps-Score-Healing-Trauma/dp/0670785938/ref=sr_1_1?s=books&ie=UTF8&qid=1414620911&sr=1-1&keywords=van+der+kolk+bessel
Don Stewart
Re: PTSD … a psychology professor recently put me onto this book http://www.amazon.com/Kill-Anything-That-Moves-American/dp/0805086919 which indicates that war does not in itself cause PTSD rather it is the atrocities that soldiers carry out on civilians that causes the problems e.g. raping, murdering in cold blood, acts of barbaric cruelty…
Essentially it is the committing of war crimes by individuals who were taught ‘though shall not kill’ and the conflicts in their minds post war that cause in PTSD…
This theory is huge oversimplification – comletely missed would be better term to assess it properly. This guy should read Erich Maria Remarque novels for a start (All Quiet on the Western Front). The main characters were at war sitting in trenches most of the time, they didn’t see any type of war crimes and most of them had PTSD symptoms in one scope or another.
I don’t think the author claims that all PSTD is related to the committing of atrocities… rather that a large percentage are
Paul
War is only one of many contributing factors to the epidemic of PTSD. van der Kolk was asked about ‘flashbacks’. (I hope I will not misrepresent what he said). The problem a doctor faces is to get the VA to pay for the treatment…which they won’t do if there is not convincing evidence it is directly related to the war. So flashbacks to the war become the evidence the doctor needs to get paid. He said that the roots of much PTSD are in poor attachment during infancy. With all the dysfunctional families contributing more than their share of soldiers, you can draw your own conclusions.
You may also recall a couple of days ago I posted about a new study which connects a certain genetic allele with childhood trauma as a strong predictor of adult PTSD.
The sacrifice of childhood and families on the alter of Economic Growth takes its toll. Forty percent of children born in the US now have no legal father. (I’m not trying to be narrow minded. I know wonderfully happy children growing up with two lesbians. But there is a tremendous amount of purely dysfunctional behavior.)
Don Stewart
The great poet Robert Graves who served in WW1 as a very young man, distressed his relations when, as a very old man who had more or less ‘lost his mind’, he grew very upset about the ‘great sin of murder’ -as he put it – which he had committed then; he said he was unclean, ‘polluted’ in the ancient religious sense.
In his memoirs, he mentioned that scanning the German trenches for exposed enemies to shoot with a sniper’s rifle, he could only find a German having a bath – he couldn’t bring himself to shoot the poor man, so handed his rifle to his sergeant to do the job.
The book certainly has good reviews. It may be worthwhile for some.
Which raises another issue — for those UNlucky enough to survive the multi-billion person die-off from disease and starvation —- most if not all family and friends gone — faced with a life without any of the trappings of BAU
What sort of mental state will that leave someone in?
Something on a lighter note, this episode (1981) of To The Manor Born touches on peak oil in various ways though I won’t cheapen the programme by analysing it. It is really quite charming.
I dreamt I had a horse last night/ this morning. Or I didn’t so much “have” one as that there was one that was with me and I with it. A horse was new to me and we got on really well, I was riding around quite proficiently. The horse and I were affectionate and attached, he was mine and I was his. Then I found myself on the horse on the busy roads of the city, quite bewildered by the prospect of getting home. A policeman on an absolutely massive horse, quite twice the size appeared and assured me that he would escort me home, upon which I woke. Weird but very nice dream, me and the horse. I had completely forgotten about the dream until I saw a horse on the TV. On a symbolic level I would guess that the dream means that we are going “home” after the collapse and that it might not be that bad after all in some ways.
There really is a lot of allusions about peak oil in the episode of TTMB. I would recommend the good folk on here take 25 mins to watch it. Nearly everything in the comments here is alluded to.
(my dreams LOL)
Permaculture – Nitrogen – Amazingcarbon
Hello,
I know this topic has already been discussed here, but I wanted to share this very interesting article I’ve just been forwarded, about Nitrogen:
Nitrogen: the Double-Edged Sword
http://permaculturenews.org/2014/10/29/nitrogen-double-edged-sword/
which comes from Amazingcarbon:
http://www.amazingcarbon.com/
I’ve not taken time to investigate, but this website seems to be a very precious source of information, for those interested. (NB: I’m not, and I know what it means)
Dear Stefeun
Christine Jones in Australia and Jill Clapperton (provided one of the pictures) in North America are two of my heroes.
It makes all the difference when one starts with what we need and how we should rationally go about getting it….as opposed to just repeating slogans promulgated by industrial interests.
Don Stewart
Thanks Stefeun.
An excerpt:
Impacts of inorganic nitrogen
The application of high rates of inorganic nitrogen in agricultural systems has had many unintended negative consequences for soil function and environmental health. Data from North America’s longest running field experiment on the impacts of farm production methods on soil quality have revealed that high nitrogen inputs deplete soil carbon, impair soil water-holding capacity — and ironically, also deplete soil N (Khan et al. 2007, Larson 2007).
Taken together, these factors have been implicated as the underlying cause of widespread reports of yield stagnation around the world (Mulvaney et al. 2009).
Weaning off nitrogen fertiliser
The activities of both symbiotic and associative N-fixing bacteria are inhibited by high levels of inorganic N. In other words, the more nitrogen fertiliser we apply, the less N is fixed by natural processes.
Hence it is important to wean your soils off inorganic N — but please do it slowly. Microbial communities take time to adjust. Soil function cannot return overnight. The transition generally requires around three years.
Nitrogen inputs can be reduced 20% in the first year, another 30% in the second year and a further 30% in the third year. In fourth and subsequent years, the application of a very small amount of inorganic N (up to 5kgN/ha) will help to prime natural nitrogen-fixing processes.
While weaning off high rates of inorganic N you should also aim to maintain as much diverse year-round living groundcover in crops and pastures as possible.
Hmmmm…. I seem to recall the Koombaya brigade mocking the comments of a couple of permaculture experts who advised me ‘never to buy land that has been farmed industrially (i.e. with inorganic nitrates and heavy pesticide use) because it takes a long time to replenish the soil even with intensive organic inputs.
Let me repeat a quote from that article just in case anyone missed it:
“Hence it is important to wean your soils off inorganic N — but please do it slowly. Microbial communities take time to adjust. Soil function cannot return overnight. The transition generally requires around three years.”
98% of the world’s farmland is farmed using industrial methods.
Pray tell what 7.2B people are going to eat during those 3 years of ‘transitioning’ dead soils into soils that will produce crops?
Paul I can’t see during those three years crops would be zero. As I understand, N fixers are better planting, so it’s up to a beam based diet till things improve
I do not see why nitrogen fixer crops would grow in that soil without the 3 years of intensive organic inputs… the soil would be effectively dead…
And even if nitrogen fixing crops could be grown it would be quite some time before they produced anything to eat…
People will need food immediately – not months or 3 years later…. they will be long dead by the time this situation gets turned around…
The North Koreans eat grass and tree bark when times are tough — but they eventually starve on that diet….
Which again raises the question — would you rather be dead — or scrounging around for bark and grass….
Dear Christian
Relative to the alleged 3 years with no crops. Thanks to Stefeun, we have a link to a wonderful article by Christine Jones, the great soil scientist from Australia:
http://permaculturenews.org/2014/10/29/nitrogen-double-edged-sword/
I particularly call your attention to this:
‘Weaning off nitrogen fertiliser
The activities of both symbiotic and associative N-fixing bacteria are inhibited by high levels of inorganic N. In other words, the more nitrogen fertiliser we apply, the less N is fixed by natural processes.
Hence it is important to wean your soils off inorganic N — but please do it slowly. Microbial communities take time to adjust. Soil function cannot return overnight. The transition generally requires around three years.
Nitrogen inputs can be reduced 20% in the first year, another 30% in the second year and a further 30% in the third year. In fourth and subsequent years, the application of a very small amount of inorganic N (up to 5kgN/ha) will help to prime natural nitrogen-fixing processes.
While weaning off high rates of inorganic N you should also aim to maintain as much diverse year-round living groundcover in crops and pastures as possible. ‘
During the three year period when you are reducing synthetic nitrogen and increasing the soils ability to get nitrogen (and carbon) from the atmosphere, yields should be fairly stable.
It is true that if you do nothing but wring your hands (the favorite of some people on this site) and if synthetic nitrogen disappears from the market completely very suddenly, then you will be hurting. On the other hand, if you take prudent action now, you have good prospects.
You will also note that Christine recommends continuing synthetic nitrogen in small amounts in perpetuity. She doesn’t explain why, in this article, but here is my understanding. The use of plants to take nitrogen and carbon from the air depends on the activity of the microbes in the soil. But the soil microbial activity is responsive to soil temperature. If the ground is very cold, you won’t have microbial activity to any extent. Soil warms up more slowly than the air, and water warms up the slowest of all. So the microbes won’t be making much nitrogen and carbon early in the spring. The air IS warm enough for photosynthesis, however, so some synthetic nitrogen at this time will give the plants something to work with while the soil warms up.
The synthetic nitrogen process I have just described is a way to MAXIMIZE yields…it isn’t necessary to get GOOD yields. If the price of synthetic nitrogen gets high enough, it also won’t make economic sense.
Don Stewart
The local U launched three annual free courses on Organic Gardening. Don’t know what they say about N, though.
It surely depends on location and many other things, but assuming kinda 80-20 rule if just 20% of industrial inputs remain, perhaps not 80% but 60% of output could be maintained (marginal returns are hitting big ag since many decades ago), and applying some intelligence to the task would surely bring something more
Securing this 20% would be essential in many many cases.
Our intensive farming since World War II is in many ways a step backward. The United States seems to be farthest ahead in this endeavor, but this doesn’t leave us well off.
Deep water in Mexico:
http://www.nytimes.com/2014/10/29/business/energy-environment/pemex-petroleos-mexico-oil-gets-ready-to-step-into-a-public-ring.html?_r=0
Pemex is counting on a future in deepwater production. But after eight years of exploratory drilling, it is still years away from producing the first barrel of oil in deep waters. Before it can, Pemex must shed its past as a lumbering state monopoly and remake itself as a streamlined company ready to compete or ally with the world’s biggest firms.
“The real large fields, the material opportunities for Pemex, lie in deep water,” Emilio Lozoya Austin, the chief executive of Pemex, said in an interview in Mexico City. “This is where our biggest learning curve lies.
Now, Pemex is venturing into uncharted territory, as its traditional fields decline. Since the peak in 2004, Mexican crude oil production has fallen by about a million barrels a day to an expected 2.35 million barrels a day this year.
“The tendency was for the government to look for the quick win and not have a very diversified portfolio of investment that would give you the short-term barrels, the medium-term barrels and the long-term barrels,” Mr. Lozoya said. “Obviously, the short-term barrels have been declining very quickly.”
It doesn’t seem to me that deep water has done all that well. It hasn’t had lasting value for the US–production is down. The North Sea is not very deep.
It is under pressure to cut costs. This is a recent article, Deep water oil discoveries raise pressure to cut costs. It is hard to see how Mexico will do well in this arena, especially if oil prices stay low.
Total War Over the Petrodollar?
Submitted by Marin Katusa via Casey Research,
The conspiracy theories surrounding the death of Total SA’s chief executive, Christophe de Margerie, started the second the news broke of his death. Under mysterious circumstances in Moscow, his private jet collided with a snowplow just after midnight. De Margerie was the CEO of Total, France’s largest oil company.
He’d just attended a private meeting with Russian Prime Minister Medvedev, at a time when the West’s relationship with Russia is fraught, to say the least.
One has better odds of being struck by lightning at an airport then a snow plow, or any other ground support vehicles hitting a plane and killing all inside the plane, in my opinion. And I say that as someone who’s familiar with airports, having worked at Vancouver International Airport when I was in university; I was the one who would bring the plane into its parking bay.
If it weren’t for those short odds, a snowplow on the runway with an allegedly drunk driver would be the perfect crime. But who would benefit from his death?
De Margerie was one of the few business leaders who spoke out against the isolation of Russia. On this last trip to Moscow, he railed against sanctions and the obstacles to Russian companies obtaining credit.
He was also an outspoken supporter of Russia’s position in natural gas pricing and transportation disputes with Ukraine, telling Reuters in an interview in July that Europe should not cut its dependence on Russian gas but rather focus on making the supplies more secure.
But what could have made de Margerie a total liability is Total’s involvement in plans to build a plant to liquefy natural gas on the Yamal Peninsula of Russia in partnership with Novatek. Its most ambitious project in Russia to date, it would facilitate the shipping of 800 million barrels of oil equivalent of LNG to China via the Arctic.
Compounding this sin, Total had just announced that it’s seeking financing for a gas project in Russia in spite of the current sanctions against Russia. It planned to finance its share in the $27-billion Yamal project using euros, yuan, Russian rubles, and any other currency but US dollars.
Did this direct threat to the petrodollar make this “true friend of Russia”—as Putin called de Margerie—some very powerful and dangerous enemies amongst the power that be, whether in the French government, the EU, or the US?
In my book The Colder War, one chapter deals with “mysterious deaths” and how they are linked to being on the wrong side of the political equation. Whether it’s going against Putin or against the petrodollar, there are many who have fallen on both sides.
If Total doesn’t close the $27 billion financing it needs to move forward with the Yamal LNG project then we’ll know someone stepped in to prevent an attack on the petrodollar. The CEO of Total, before his death and his CFO were both strong supporters of Total raising the $27 billion in non US dollars and moving the project forward with the Russians. But, this could all change if the financing does not complete.
How many other Western executives who dare to help Russia bypass sanctions—and turn it into an energy powerhouse—will die under suspicious circumstances?
http://www.zerohedge.com/news/2014-10-28/total-war-over-petrodollar
Who would benefit? Those trying to isolate Russia.
The evolution of humans:
Difficult
http://phillips.blogs.com/.a/6a00d834515c6d69e20192ac16cfdf970d-320wi
Less Difficult
http://waterandpower.org/Historical_DWP_Photo_Collection_LA_Public_Library/Vermont_1874.jpg
Easy
http://www.eonline.com/eol_images/Entire_Site/2014516/rs_634x1024-140616172905-634.kim-kardashian.cm.61614.jpg
The Descent
http://www.writeups.org/img/inset/Mad_Max_2_h2.jpg
Chaos
http://upload.wikimedia.org/wikipedia/en/7/7b/The_Road_bleak_scenery.jpg
Collapse
http://iconicphotos.files.wordpress.com/2009/08/kevin-carter-vulture.jpg?w=700&h=466
The Aftermath
http://mainefriendsofhaiti.org/mainefriendsofhaiti.org/Father_Marc_Boisvert_-_Lewiston_priest_files/ResizedImage500249-HaitiMarket.jpg
Glad I lived during the “Easy” period…..for the most part that is!
Well based on Pauls presentation I have to say the easy period would be my choice.
The Descent as pictured in “Road Warrior” style looks pretty cool, although having a few “Easy” days can be pretty appetizing.
Who is that lady under “easy”…I don’t recognize her…
I believe she is a prostitute known as Kardashian … ‘easy’ as in do nothing of substance and live large… which is symptom of today’s society