Ten Reasons Why a Severe Drop in Oil Prices is a Problem

Not long ago, I wrote Ten Reasons Why High Oil Prices are a Problem. If high oil prices can be a problem, how can low oil prices also be a problem? In particular, how can the steep drop in oil prices we have recently been experiencing also be a problem?

Let me explain some of the issues:

Issue 1. If the price of oil is too low, it will simply be left in the ground.

The world badly needs oil for many purposes: to power its cars, to plant it fields, to operate its oil-powered irrigation pumps, and to act as a raw material for making many kinds of products, including medicines and fabrics.

If the price of oil is too low, it will be left in the ground. With low oil prices, production may drop off rapidly. High price encourages more production and more substitutes; low price leads to a whole series of secondary effects (debt defaults resulting from deflation, job loss, collapse of oil exporters, loss of letters of credit needed for exports, bank failures) that indirectly lead to a much quicker decline in oil production.

The view is sometimes expressed that once 50% of oil is extracted, the amount of oil we can extract will gradually begin to decline, for geological reasons. This view is only true if high prices prevail, as we hit limits. If our problem is low oil prices because of debt problems or other issues, then the decline is likely to be far more rapid. With low oil prices, even what we consider to be proved oil reserves today may be left in the ground.

Issue 2. The drop in oil prices is already having an impact on shale extraction and offshore drilling.

While many claims have been made that US shale drilling can be profitable at low prices, actions speak louder than words. (The problem may be a cash flow problem rather than profitability, but either problem cuts off drilling.) Reuters indicates that new oil and gas well permits tumbled by 40% in November.

Offshore drilling is also being affected. Transocean, the owner of the biggest fleet of deep water drilling rigs, recently took a $2.76 billion charge, among a “drilling rig glut.”

3. Shale operations have a huge impact on US employment. 

Zero Hedge posted the following chart of employment growth, in states with and without current drilling from shale formations:

Jobs in States with and without Shale Formations, from Zero Hedge.

Figure 1. Jobs in States with and without Shale Formations, from Zero Hedge.

Clearly, the shale states are doing much better, job-wise. According to the article, since December 2007, shale states have added 1.36 million jobs, while non-shale states have lost 424,000 jobs. The growth in jobs includes all types of employment, including jobs only indirectly related to oil and gas production, such as jobs involved with the construction of a new supermarket to serve the growing population.

It might be noted that even the “Non-Shale” states have benefited to some extent from shale drilling. Some support jobs related to shale extraction, such as extraction of sand used in fracking, college courses to educate new engineers, and manufacturing of parts for drilling equipment, are in states other than those with shale formations. Also, all states benefit from the lower oil imports required.

Issue 4. Low oil prices tend to cause debt defaults that have wide ranging consequences. If defaults become widespread, they could affect bank deposits and international trade.

With low oil prices, it becomes much more difficult for shale drillers to pay back the loans they have taken out. Cash flow is much lower, and interest rates on new loans are likely much higher. The huge amount of debt that shale drillers have taken on suddenly becomes at-risk. Energy debt currently accounts for 16% of the US junk bond market, so the amount at risk is substantial.

Dropping oil prices affect international debt as well. The value of Venezuelan bonds recently fell to 51 cents on the dollar, because of the high default risk with low oil prices.  Russia’s Rosneft is also reported to be having difficulty with its loans.

There are many ways banks might be adversely affected by defaults, including

  • Directly by defaults on loans held by a bank
  • Indirectly, by defaults on securities the bank owns that relate to loans elsewhere
  • By derivative defaults made more likely by sharp changes in interest rates or in currency levels
  • By liquidity problems, relating to the need to quickly sell or buy securities related to ETFs

After the many bank bailouts in 2008, there has been discussion of changing the system so that there is no longer a need to bail out “too big to fail” banks. One proposal that has been discussed is to force bank depositors and pension funds to cover part of the losses, using Cyprus-style bail-ins. According to some reports, such an approach has been approved by the G20 at a meeting the weekend of November 16, 2014. If this is true, our bank accounts and pension plans could already be at risk.1

Another bank-related issue if debt defaults become widespread, is the possibility that junk bonds and Letters of Credit2 will become outrageously expensive for companies that have poor credit ratings. Supply chains often include some businesses with poor credit ratings. Thus, even businesses with good credit ratings may find their supply chains broken by companies that can no longer afford high-priced credit. This was one of the issues in the 2008 credit crisis.

Issue 5. Low oil prices can lead to collapses of oil exporters, and loss of virtually all of the oil they export.

The collapse of the Former Soviet Union in 1991 seems to be related to a drop in oil prices.

Figure 2. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2013.

Figure 2. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2013.

Oil prices dropped dramatically in the 1980s after the issues that gave rise to the earlier spike were mitigated. The Soviet Union was dependent on oil for its export revenue. With low oil prices, its ability to invest in new production was impaired, and its export revenue dried up. The Soviet Union collapsed for a number of reasons, some of them financial, in late 1991, after several years of low oil prices had had a chance to affect its economy.

Many oil-exporting countries are at risk of collapse if oil prices stay very low very long. Venezuela is a clear risk, with its big debt problem. Nigeria’s economy is reported to be “tanking.” Russia even has a possibility of collapse, although probably not in the near future.

Even apart from collapse, there is the possibility of increased unrest in the Middle East, as oil-exporting nations find it necessary to cut back on their food and oil subsidies. There is also more possibility of warfare among groups, including new groups such as ISIL. When everyone is prosperous, there is little reason to fight, but when oil-related funds dry up, fighting among neighbors increases, as does unrest among those with lower subsidies.

Issue 6. The benefits to consumers of a drop in oil prices are likely to be much smaller than the adverse impact on consumers of an oil price rise. 

When oil prices rose, businesses were quick to add fuel surcharges. They are less quick to offer fuel rebates when oil prices go down. They will try to keep the benefit of the oil price drop for themselves for as long as possible.

Airlines seem to be more interested in adding flights than reducing ticket prices in response to lower oil prices, perhaps because additional planes are already available. Their intent is to increase profits, through an increase in ticket sales, not to give consumers the benefit of lower prices.

In some cases, governments will take advantage of the lower oil prices to increase their revenue. China recently raised its oil products consumption tax, so that the government gets part of the benefit of lower prices. Malaysia is using the low oil prices as a time to reduce oil subsidies.

Most businesses recognize that the oil price drop is at most a temporary situation, since the cost of extraction continues to rise (because we are getting oil from more difficult-to-extract locations). Because this price drop is only temporary, few business people are saying to themselves, “Wow, oil is cheap again! I am going to invest a huge amount of money in a new road building company [or other business that depends on cheap oil].” Instead, they are cautious, making changes that require little capital investment and that can easily be reversed. While there may be some jobs added, those added will tend to be ones that can easily be dropped if oil prices rise again.

Issue 7. Hoped for crude and LNG sales abroad are likely to disappear, with low oil prices.

There has been a great deal of publicity about the desire of US oil and gas producers to sell both crude oil and LNG abroad, so as to be able to take advantage of higher oil and gas prices outside the US. With a big drop in oil prices, these hopes are likely to be dashed. Already, we are seeing the story, Asia stops buying US crude oil. According to this story, “There’s so much oversupply that Middle East crudes are now trading at discounts and it is not economical to bring over crudes from the US anymore.” 

LNG prices tend to drop if oil prices drop. (Some LNG prices are linked to oil prices, but even those that are not directly linked are likely to be affected by the lower demand for energy products.) At these lower prices, the financial incentive to export LNG becomes much less. Even fluctuating LNG prices become a problem for those considering investment in infrastructure such as ships to transport LNG.

Issue 8. Hoped-for increases in renewables will become more difficult, if oil prices are low.

Many people believe that renewables can eventually take over the role of fossil fuels. (I am not of the view that this is possible.) For those with this view, low oil prices are a problem, because they discourage the hoped-for transition to renewables.

Despite all of the statements made about renewables, they don’t really substitute for oil. Biofuels come closest, but they are simply oil-extenders. We add ethanol made from corn to gasoline to extend its quantity. But it still takes oil to operate the farm equipment to grow the corn, and oil to transport the corn to the ethanol plant. If oil isn’t around, the biofuel production system comes to a screeching halt.

Issue 9. A major drop in oil prices tends to lead to deflation, and because of this, difficulty in repaying debts.

If oil prices rise, so do food prices, and the price of making most goods. Thus rising oil prices contribute to inflation. The reverse of this is true as well. Falling oil prices tend to lead to a lower price for growing food and a lower price for making most goods. The net result can be deflation. Not all countries are affected equally; some experience this result to a greater extent than others.

Those countries experiencing deflation are likely to eventually have problems with debt defaults, because it will become more difficult for workers to repay loans, if wages are drifting downward. These same countries are likely to experience an outflow of investment funds because investors realize that funds invested these countries will not earn an adequate return. This outflow of funds will tend to push their currencies down, relative to other currencies. This is at least part of what has been happening in recent months.

The value of the dollar has been rising rapidly, relative to many other currencies. Debt repayment is likely to especially be a problem for those countries where substantial debt is denominated in US dollars, but whose local currency has recently fallen in value relative to the US dollar.

Figure 3. US Dollar Index from Intercontinental Exchange

Figure 3. US Dollar Index from Intercontinental Exchange

The big increase in the US dollar index came since June 2014 (Figure 3), which coincides with the drop in oil prices. Those countries with low currency prices, including Japan, Europe, Brazil, Argentina, and South Africa, find it expensive to import goods of all kinds, including those made with oil products. This is part of what reduces demand for oil products.

China’s yuan is relatively closely tied to the dollar. The collapse of other currencies relative to the US dollar makes Chinese exports more expensive, and is part of the reason why the Chinese economy has been doing less well recently. There are no doubt other reasons why China’s growth is lower recently, and thus its growth in debt. China is now trying to lower the level of its currency.

Issue 10. The drop in oil prices seems to reflect a basic underlying problem: the world is reaching the limits of its debt expansion.

There is a natural limit to the amount of debt that a government, or business, or individual can borrow. At some point, interest payments become so high, that it becomes difficult to cover other needed expenses. The obvious way around this problem is to lower interest rates to practically zero, through Quantitative Easing (QE) and other techniques.

(Increasing debt is a big part of what pumps up “demand” for oil, and because of this, oil prices. If this is confusing, think of buying a car. It is much easier to buy a car with a loan than without one. So adding debt allows goods to be more affordable. Reducing debt levels has the opposite effect.)

QE doesn’t work as a long-term technique, because it tends to create bubbles in asset prices, such as stock market prices and prices of farmland. It also tends to encourage investment in enterprises that have questionable chance of success. Arguably, investment in shale oil and gas operations are in this category.

As it turns out, it looks very much as if the presence or absence of QE may have an impact on oil prices as well (Figure 4), providing the “uplift” needed to keep oil prices high enough to cover production costs.

Figure 4. World

Figure 4. World “liquids production” (that is oil and oil substitutes) based on EIA data, plus OPEC estimates and judgment of author for August to October 2014. Oil price is monthly average Brent oil spot price, based on EIA data.

The sharp drop in price in 2008 was credit-related, and was only solved when the US initiated its program of QE started in late November 2008. Oil prices began to rise in December 2008. The US has had three periods of QE, with the last of these, QE3, finally tapering down and ending in October 2014. Since QE seems to have been part of the solution that stopped the drop in oil prices in 2008, we should not be surprised if discontinuing QE is contributing to the drop in oil prices now.

Part of the problem seems to be the differential effect that happens when other countries are continuing to use QE, but the US not. The US dollar tends to rise, relative to other currencies. This situation contributes to the situation shown in Figure 3.

QE allows more borrowing from the future than would be possible if market interest rates really had to be paid. This allows financiers to temporarily disguise a growing problem of un-affordability of oil and other commodities.

The problem we have is that, because we live in a finite world, we reach a point where it becomes more expensive to produce commodities of many kinds: oil (deeper wells, fracking), coal (farther from markets, so more transport costs), metals (poorer ore quality), fresh water (desalination needed), and food (more irrigation needed). Wages don’t rise correspondingly, because more and more labor is needed to provide less and less actual benefit, in terms of the commodities produced and goods made from those commodities. Thus, workers find themselves becoming poorer and poorer, in terms of what they can afford to purchase.

QE allows financiers to disguise a growing mismatch between what it costs to produce commodities, and what customers can really afford. Thus, QE allows commodity prices to rise to levels that are unaffordable by customers, unless customers’ lack of income is disguised by a continued growth in debt.

Once commodity prices (including oil prices) fall to levels that are affordable based on the incomes of customers, they fall to levels that cut out a large share of production of these commodities. As commodity production drops to levels that can be produced at affordable prices, so does the world’s ability to make goods and services. Unfortunately, the goods whose production is likely to be cut back if commodity production is cut back are those of every kind, including houses, cars, food, and electrical transmission equipment.

 Conclusion

There are really two different problems that a person can be concerned about:

  1. Peak oil: the possibility that oil prices will rise, and because of this production will fall in a rounded curve. Substitutes that are possible because of high prices will perhaps take over.
  2. Debt related collapse: oil limits will play out in a very different way than most have imagined, through lower oil prices as limits to growth in debt are reached, and thus a collapse in oil “demand” (really affordability). The collapse in production, when it comes, will be sharper and will affect the entire economy, not just oil.

In my view, a rapid drop in oil prices is likely a symptom that we are approaching a debt-related collapse–in other words, the second of these two problems. Underlying this debt-related collapse is the fact that we seem to be reaching the limits of a finite world. There is a growing mismatch between what workers in oil importing countries can afford, and the rising real costs of extraction, including associated governmental costs. This has been covered up to date by rising debt, but at some point, it will not be possible to keep increasing the debt sufficiently.

The timing of collapse may not be immediate. Low oil prices take a while to work their way through the system. It is also possible that the world’s financiers will put off a major collapse for a while longer, through more QE, or more programs related to QE. For example, actually getting money into the hands of customers would seem to be temporarily helpful.

At some point the debt situation will eventually reach a breaking point. One way this could happen is through an increase in interest rates. If this happens, world economic growth is likely to slow greatly. Oil and commodity prices will fall further. Debt defaults will skyrocket. Not only will oil production drop, but production of many other commodities will drop, including natural gas and coal. In such a scenario, the downslope of all energy use is likely to be quite steep, perhaps similar to what is shown in the following chart.

Figure 5. Estimate of future energy production by author. Historical data based on BP adjusted to IEA groupings.

Figure 5. Estimate of future energy production by author. Historical data based on BP adjusted to IEA groupings.

Related Articles:

Low Oil Prices: Sign of a Debt Bubble Collapse, Leading to the End of Oil Supply?

WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”

Eight Pieces of Our Oil Price Predicament

Notes:

[1] There is of course insurance by the FDIC and the PBGC, but the actual funding for these two insurance programs is tiny in relationship to the kind of risk that would occur if there were widespread debt defaults and derivative defaults affecting many banks and many pension plans at once. While depositors and pension holders might try to collect this insurance, there wouldn’t be enough money to actually cover these demands. This problem would be similar to the issue that arose in Iceland in 2008. Insurance would seem to be available, but in practice, would not pay out much.

Also, I learned after writing this post that bail-ins were mandated for US banks by the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010. In the language of the summary, bank depositors are “unsecured creditors,” and are thus among those to whom the burden of loss is transferred. The FDIC is not allowed to borrow extra funds, beyond bank funds, to cover this loss.

[2] LOCs are required when goods are shipped internationally, before payment has actually been made. They offer a guarantee that a buyer will be able to “make good” on his promise to pay for goods when they arrive.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,055 Responses to Ten Reasons Why a Severe Drop in Oil Prices is a Problem

  1. MG says:

    Someone seeing the Tverberg Estimate of Future Energy Production could be horrified:

    https://gailtheactuary.files.wordpress.com/2014/01/tverberg-estimate-of-future-energy-production.png

    BUT:

    If we take into account the diminishing demand due to the diminishing discretionary spending, this view can correspond to the reality. The human population can continue its existence with less oil and so the price can continue to go down.

    How will the economy with less discretionary spending look like? Like everybody being the slave of the system? This collectivism is already present e. g. in the Japanese culture…

    http://japanlens.blogspot.sk/2011/05/what-urbanizing-world-might-learn-from.html

    • Rodster says:

      Shortonoil posted a graphical chart that says by 2020 (NEG cost) which is what the consumer CAN AFFORD to pay will be around $15-20 a barrel. Oil companies can’t extract oil at that price and stay in business.

      • Who says everyone who currently consumes oil will be able to continue to do so? Perhaps half as many people will be able to consume half as much oil at $80 per barrel, while the other half stops or drastically reduces consumption.

    • Once one type of economy is in place, transitioning to another kind of economy that uses a lot less oil will be extremely difficult, especially if oil price is already falling. We don’t have the ability to go backward, and we don’t have the ability to build a large of new infrastructure of a different kind.

  2. justeunperdant says:

    ‘Tt’s a huge crisis’: North Sea oilfields ‘close to collapse’ after oil price nosedive

    The North Sea oil industry is “close to collapse,” an expert has warned, as a slump in prices piles pressure on drillers to cut back investing in the region.
    Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that it is “almost impossible to make money” with the oil price below $60 per barrel.

    http://business.financialpost.com/2014/12/19/north-sea-oilfields-near-collapse-after-price-nosedive/?__lsa=24c5-3661

    What can I happen in my opinion:

    1- Some oil production get cut-off and soon after that shortage of oil, food and other essential happen followed by chaos and finally die-off. This could happen over a year depending how fast or slow production is being take off.

    2- Or oil producers cannot pay back their debt, this triggers a debt cascading effect, cause a mistrust between currencies and finally collapse the system.

    3- It is also possible that too much oil production get cut-off suddenly and rapidly and creates a worldwide shortage of oil follow by spreading world wide chaos and die-off.

    The stock market behave like it did in poor country like Argentina and Venezuela just before shortage. I would not be surprise to see worldwide stock market records with simultaneous shortage developing.

  3. VPK says:

    As Gail pointed out in her post and comments; the ripple effect.
    Manufacturers face ‘bloodbath’ in Russia, says Renault Nissan boss
    http://www.bbc.com/news/business-30552925
    Mr Ghosn said the group had suspended taking orders for some models, this included cars made in Russia, but also those which used large quantities of imported parts. Orders already placed would be honoured, he said.

    Other manufacturers have been taking similar steps in response to the decline of the rouble, which has halved in value against the dollar this year.

    General Motors, Audi and Jaguar Land Rover also suspended deliveries to Russian dealers earlier this week.
    UK operations

    If car sales in Russia do continue to decline, it could affect British manufacturing. Nissan says about 10% of the cars made at its Sunderland plant are exported to the region.

    “I certainly think there could be a potential impact on Nissan’s operations in the UK,” said David Bailey, professor of industry at Aston Business School.

    “It sells for example the Qashqai model in large numbers in Russia.”

    He said it could also have an impact on the premium end of Jaguar Land Rover, “albeit far less than in the case of Nissan”

  4. Jan Steinman says:

    Kudos from Richard Heinberg! (Scroll down to point #2.)

    “Gail Tverberg does a great job of teasing apart the likely consequences of the oil price slump here.”

    • Thanks. I noticed that today. He didn’t give much of a hint that peak oil might be here, though. Maybe I am being too critical.

      • Don Stewart says:

        Gail
        Are you reading the same article I am?

        ‘As analysis by David Hughes of Post Carbon Institute shows, even without the price crash production in the Bakken and Eagle Ford plays would have been expected to peak and begin a sharp decline within the next two or three years. The price crash can only hasten that inevitable inflection point.’

        So here is the man who wrote a book a decade ago The Party’s Over, he raised the money to fund David Hughes study, and you think he is a peak oil denier?

        I’m disappointed…Don Stewart

        • No. Just that he isn’t talking about low oil prices bringing on decline right now. He assumes it will be “running out” of what can be easily extracted from the ground.

          • Don Stewart says:

            Gail
            Then how do you explain his quote from Euan Mearns:

            ‘How much and how fast will world oil production fall? Euan Mearns offers three scenarios; in the most likely of these (in his opinion) world production capacity will contract by about two million barrels per day over the next two years as a result of the price collapse.’

            It sure looks to me that Richard is contemplating the destruction of productive capacity as a result of low prices.

            Don Stewart

            • It seems to me that too many things are going on simultaneously for the decline in production capacity to be only two million barrels a day in two years. We are likely dealing with rising interest rates, large amounts of debt not being collectible, bank failures, rising wars, a collapse in North Sea production, big problems with oil production in Venezuela and probably several other countries. It seems to me that the effect is likely to be more than a reduction of two million barrels of oil production a day. Thinking about it, part of his problem is that he doesn’t realize that the demand curve will also be dramatically different in two years. So we are dealing with two curves, both changing dramatically in the next two years.

              Or maybe my timing is wrong. Maybe I am thinking out three, four or five years.

  5. Don Stewart says:

    Dear Gail and All
    Intentional Communities as Lifeboats?

    I stated that I see families as the economic unit which is the foundation for survival in the future. Beyond that, I saw ‘intentional communities’ as perhaps a better way to think than ‘clans’ or ‘tribes’ or ‘global capitalism’. All sorts of objections to intentional communities were mentioned. Let me explain further the sorts of intentional communities that I think may be useful. One of the major changes from the present is likely to be that we will be forced to deal with local people, whether we personally like them or not. With global capitalism, we deal with corporations in terms of money, and any psychological relationship is heavily mediated by advertising featuring celebrities or the satisfaction of needs manufactured by the advertising. Those of us who grew up in small towns which were largely self-sufficient will have memories of the sorts of interpersonal relationship issues which arise when you are dependent on somebody that you don’t like very much.

    In an intentional community today, there is always the option of reverting to the global capitalistic market…we are not really dependent on individuals as we once were. Therefore, I would predict that intentional communities today will face many relationship tribulations…but those tribulations would be less in a resource constrained future. People can cooperate when their life depends upon it.

    If we take Edo Japan as an example of a pretty sophisticated society which did not use fossil fuels and which had few mineral resources and which was ecologically stable (or actually improving), then we can get some ideas about how the society needs to evolve to take advantage of the synergies which humans can produce when they work together. But there are serious impediments which need to be thought through. I will use Bokashi Composting as an example which may illuminate some of the impediments.

    Aerobic composting involves the collection of a cubic meter of green and brown material which has a carbon to nitrogen ratio of 30 to 1. The pile must be kept moist, but not soggy, and must be turned periodically to get oxygen into the center of the pile. The pile heats up, killing many pathogens and most weed seeds, while off-gassing things like methane and carbon dioxide and nitrogen. So the end result is NOT fertilizer, but instead the humus which is best thought of as a soil amendment.

    Bokashi is different from conventional aerobic composting because it is really not composting, but fermentation. Putting kitchen scraps into a Bokashi container is similar to making Kim Chee or Sauerkraut. Anerobic microbes attack the scraps and prepare them for easy digestion by aerobic soil microbes. Bokashi was developed by Asian farmers because it avoids some of the less-desirable attributes of aerobic composting. It is somewhat similar to Christine Jones ‘liquid carbon pathway’, but it operates at the garden level rather than the pasture level.

    Adam Footer has written Bokashi Composting to explain the reasons why you might want to do it, and exactly how you go about it. Here’s why you might want to do it (I won’t explain each bullet point):
    *All types of food waste
    *Forget greens and browns
    *No insect or rodent issues
    *No putrid odors
    *Minimal greenhouse gases
    *No loss of nutrients to the ground or atmosphere
    *Finished product full of beneficial microorganisms
    *Useful at any scale from kitchen to industrial
    *No turning the pile
    *Works fast

    Bokashi is made in a plastic bucket with an air-tight lid, using industrially prepared microbe liquid, and either a homemade or purchased inoculated bran.

    So, right away, we can see that should 5 gallon plastic buckets (which are currently made by the billions) disappear, then one of the pillars of current Bokashi production will disappear. Similarly, there is a certain type of lid for the 5 gallon buckets called a Gamma seal which operates in conjunction with a rubber gasket to provide an air tight container. Similar risk. In many cases, two plastic buckets will be nested together, with excess liquid accumulating in the bottom bucket. The air-tightness depends on the fact that plastic buckets are all identical in their measurements. Finally, the default method for compressing your scraps in the bucket is to push down on them with one of those ubiquitous grocery store plastic bags. Same risk..but it’s easy to imagine other ways to push stuff down and keep it fairly airtight.

    Now, let’s let our imaginations work a little and try to piece together a picture of what the future might hold. Let’s suppose, just for the sake of argument, that plastic buckets survive, or at least are salvageable for decades. Something like a Gamma seal is also still made or at least salvageable. Then there are two remaining issues:
    *Where do we get the microbe liquid (called EM1 or some similar name, today)?
    *Where do we get the inoculated bran?

    There is, according to Footer, really no desirable substitute for the industrially prepared microbe liquid. However, a gallon of the liquid can be extended to a much larger volume with processes which can be employed by a household or, more likely, a local person who specializes in doing it.

    The bran is usually a by-product of making industrial food. The process also uses blackstrap molasses as a source of sugar and nutrients, and blackstrap molasses is what is left over from the making of table sugar. So we are looking at by-products which were produced before the age of fossil fuels, but they are definitely industrial. Before the age of hyper-industrialism, these would have been common in country towns.

    So we might have an agrarian community with a Bokashi specialist who gathers the industrial by-products, has the proper equipment, and manufactures the Bokashi bran. The specialist is dependent on a distant source of the microbe liquid. The local farmers buy the inoculated bran and use it to compost all their food waste.

    In 2014, Bokashi may appeal to people who want to practice greener gardening, don’t want to fill the landfills with methane producing organic food waste, want to save money, and so forth. Getting started with Bokashi can cost as little as 50 dollars for someone who is reasonably handy with some simple tools, so the payback period can be very short.

    I believe that Edo Japan could manage the Bokashi cycle, but they wouldn’t be able to do it with plastic buckets. More likely, they would use the sauerkraut earthen jugs which have a water seal rim…you can buy them from Germany and Poland, today, on Amazon. The water seal obviates the need for precision in measurements. The microbe liquid might not be quite as scientifically precise, but would probably work acceptably…after all, illiterate Asian farmers did a fairly good job.

    Let’s suppose you have been appointed to the Agrarian Community Planning Council, and you are trying to figure out what kinds of professional people you want to attract to your community. You pretty quickly cross off lawyers and bankers and advertising and PR people. You probably want a blacksmith to work iron (which will be salvageable for a long time). And a potter will be very useful, as well as a forester. Do you want a Bokashi specialist?

    In Edo, they had the luxury (and necessity) of letting things evolve organically. Edo emerged out of hundred of years of civil wars, but the basic skills were there. With peace and stability, intricate economic arrangements could evolve. If Global Capitalism resets to something less complex, what will that new world look like? Is the best course of action to try to figure it out, and prepare for it? Or is the best course of action to assume that it is going to look like the Stone Age, and the best bet is some form of Prepping? Or do you choose Eat, Drink, and Be Merry?

    As regards Bokashi particularly, it may be a smart thing to do to increase the fertility of your soil, regardless of what happens in the future. Maybe it’s just insurance. It’s hard to see how fertile soil fails to be in your best interest. In the meantime, you feel ‘green’.

    Don Stewart

    • Jan Steinman says:

      “Where do we get the microbe liquid (called EM1 or some similar name, today)”

      One can propagate it. I have some 6th-generation EM that seems to still be fine.

      • Don Stewart says:

        Dear Jan
        Footer only claims 2 generations. But 6 generations strengthens, I think, my notion that an agrarian community might to do well to have a specialist in EM production.

        Don Stewart

  6. edpell says:

    “The present crisis is an excellent opportunity for Russia to break free from its reliance on foreign, Western finance.”

    “It should rely on its own finance and, at the same time, become independent in all aspects of the economy (which is largely possible for Russia – just as Iran has done).”

    Money does NOT have to be borrowed from the international banking system which creates it out of nothing, adds interest and makes it repayable in dollars etc.”

    “(T)hen does a run on your currency and subsequently picks up your assets for peanuts. This is what Mahathir was fighting and did successfully fight.”

    “It’s all LIES about the need to borrow from abroad and the need to have international ‘investors.’ ”

    “You can just as easily borrow interest-free from your own national bank but it is unwise to allow this too much UNLESS the borrowing is for building productive capacity AND spreading it in the population (only this creates a properly balanced market economy in which producers and consumers are the same).”

    “Generally, NEVER borrow from abroad because it gives the lever by which you can be smashed.”

    http://www.rense.com/general96/putmarathon.html

    • alturium says:

      I’m sure they are kicking themselves in the head at the moment for becoming dependent…do they think can return to a command economy?

  7. edpell says:

    “The German company says it has developed an engineering installation capable of synthesizing petroleum-based fuels from water and carbon dioxide. The ‘power-to-liquid’ rig converts gases extracted from water into liquid hydrocarbon fuels.”

    http://rt.com/news/209619-sunfire-water-synthetic-fuel/

    Unfortunately the article does not say how much is costs to make one gallon of fuel.

  8. edpell says:

    If two countries, say China and Russia, conduct balanced trade it does not matter what value the Ruble, Yuan, or Dollar have. They can conduct trade valued in units of yellow rubber ducks. They do not have to ship any money across the border. They can settle internally just matching in-country buyer and in-country seller and settling in local currency.

  9. edpell says:

    A senior British energy official says the UK’s oil industry is “close to collapse” due to a recent dramatic fall in crude prices.

    “It’s close to collapse. In terms of new investments – there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks,” said Robin Allan, the chairman of the independent explorers’ association Brindex.

    He added that the plunge in oil prices pushed the industry into “crisis” and oil companies are cutting staff and investment to save money.

    “Budgets for 2015 are being cut by everyone,” he said.

    “It’s almost impossible to make money at these oil prices,” Allan told the state-run BBC. “It’s a huge crisis.”

    from presstv.ir

    Well that is exciting.

    • Quitollis says:

      B1tch! I find the Labour Party’s “weaponisation” of the NHS for the next GE distasteful (I have no ailments), as if we are a nation of sponging cripples begging for relief with no other ideals or values, we send our cry into the night, dark. The NHS will soon be gone. The British will never learn anything until Nature flogs their arse harshly.

      32 developments and 5bn barrels affected with North Sea oil plans in doubt

      Dozens of new oil projects in the North Sea and Europe could be shelved as falling prices force international oil companies to tear up their investment plans.

      Global energy (Other OTC: GEYI – news) consultancy Wood Mackenzie has said that 32 potential European oil field developments containing 4.9bn barrels of oil equivalent are waiting for approval on more than $87bn (£55bn) of funding. These could be at risk should oil prices fall below $60 per barrel.

      https://uk.finance.yahoo.com/news/oil-price-crash-means-55bn-204037204.html

    • Wee Willy Winky says:

      Punishing Putin, Saudi’s attacking fracking, lack of growth have all been suggested for this drop in the price of oil.

      If those are what the MSM is telling us then that probably means these are untrue, and that we should be searching for other answers.

      Given the desperate measures we have seen to date, I don’t think any suggestion is too radical or too absurd.

      Could this be what is really happening:

      – the towel has been thrown into the ring and the decision makers have decided that they do not care if the price of oil stays high enough to encourage capex spending on new exploration

      – they don’t care if this hurts fracking because we are the point that fracking does not matter anyway because total global supply has already peaked

      – QE is no longer impacting the economy and growth is trending downwards no matter how much money is printed

      – Japan is set to explode as is Europe as is China

      Could this be a last gasp to somehow try to generate some sort of growth by getting oil prices down to a more manageable level that encourages some consumption?

      That might buy a little more time, months, a year?

      But if this is the case, then it represents a capitulation akin to the pensioner who has realized he can no longer live off of the inflation-destroyed yield of his savings, and has decided to start pulling out chunks of the principal so as not to starve.

      • Jan Steinman says:

        A big difference between us is that you imagine someone is in control.

        I’ll take “Plan Zed:”

        — Nobody really knows what the hell is going on, and everyone in the market is acting out of fear.

        • InAlaska says:

          Jan,
          Hear, hear! All of this talk of controlling entities is really just fantasy. Nobody controls what’s going on because nobody understands what is going on. The world seesaws between greed and fear. The ultimate doom of a complex society is that it is too complicated for anyone to manage or comprehend. Too many moving parts. Too many uncontrollable variables.

          • Jan Steinman says:

            “The ultimate doom of a complex society is that it is too complicated for anyone to manage or comprehend.”

            Ah, a fellow “Tainterian!”

            I sadly sighed when people thought Obama was going to change things. And I sadly sigh when those same people blame him for not changing things. They mistake him for someone who is in control.

        • Wee Willy Winky says:

          Oh come now.

          If nobody was in control then we would not have had QE and 0 interest rate polices along with massive endless bailouts along with stock, bond, housing and gold market manipulation.

          And the global economy would have collapsed in 2008.

          To think nobody is in control is patently absurd.

      • I am not sure that the MSM understands what is going on. One of the pieces is the Chinese housing market. It seems to be imploding, and it is a big piece of China’s economy. The New York Times has an article today called,”In China’s Housing Market, Pressure to Sell, Hesitation to Buy.” It says,

        Prices have been steadily falling, down 7.4 percent since April.

        . . .

        . . . real estate developers’ inventories of unsold apartments now equal 12 to 18 months’ worth of sales in China’s biggest cities, like Beijing and Shanghai, according to Haitong Securities, a big Chinese brokerage firm and investment bank. The industry considers six months’ worth of inventory to be healthy.

        Developers have responded by delaying new projects. In November, housing starts were down 34 percent from a year earlier.

        . . .
        The International Monetary Fund estimated in October that construction and other real estate activities made up 12.8 percent of China’s economic activity, and 33 percent if related activities are included, from making steel for building beams to manufacturing sinks for bathrooms.

  10. Stan says:

    From the BBC (http://www.bbc.com/news/business-30525539)
    ————————————————————————————————————
    The UK’s oil industry is in “crisis” as prices drop, a senior industry leader has told the BBC.
    Oil companies and service providers are cutting staff and investment to save money.
    Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”.
    ————————————————————————————————————-

    UK oil producers say production ceases to make money below $80 barrel.

    Stan.

    • Yes, that is disturbing especially to those who live there. I am sure that there are quite a few jobs that directly and indirectly depend on the oil industry.

  11. Ps! This blog should have an entry for newest comments. It’s boring to move through all the old comments every time you want to check out the latest ones.

    • I have solved the new post problem by posting something after the discussion becomes unwieldy, carefully checking “notify me of new comments via email”. I try to find something relevant to prevent adding to the noise. This does burden my email but I see all new posts

    • edpell says:

      YES YES YES

    • InAlaska says:

      Oyvind,
      I agree. I spend a lot of time sifting through old comments.

    • alturium says:

      Using the RSS Comments feed helps somewhat. I am using Feedler at the moment but still have have not found a good solution. I was definitely tired of my email inbox being overwhelmed.

      • alturium says:

        I would like a solution that shows me the latest comments (using Feedler or similar RSS works here) and then being able to jump to where that comment was made (the thread so-to-speak) would be great. Feedler on the web sort of works, but not from my iphone.

    • misha says:

      i use digg’s rss reader for both the blog and comments. most of the time i can keep up and not need to go to the blog to find the comment in context, but this one, for example, i did. when i click on it from digg it brings me to this section on the page. i am very happy with digg – it is fairly simple and fast, with a few handy features. i am subscribed to a couple hundred blogs this way and only a few comments feeds, but in digg there is a link at the bottom of the post that tells you how many comments the blog has and you can use it to get to comments to which you are not subscribed. one advantage of using rss is that it all waits for you in order so you can totally read at your own pace.

  12. Don Stewart says:

    Dear All

    I have tried to describe the effect that various agricultural techniques have on soil health. Here is a report from the Soilabration which was held recently at a research farm in North Carolina…Don Stewart

    On a perfect fall day, several hundred people gather around Ray Archuleta and Steve Woodruff of the USDA Natural Resource Conservation Service. They are intently watching a rainfall simulator demonstrate what happens when rain falls on agricultural soils that have been managed in different ways. Overhead sprinklers mimic a hard summer rain over sections of real soil pulled from fields that have been managed as permanent pasture, or using conservation tillage, conventional tillage, and no-till practices.

    Steve Woodruff of USDA NRCS.
    Glass jars beneath each soil sample begin to fill up with both sediment runoff and water that has filtered through the soil. The water varies from the nearly clear water emerging from the permanent pasture section, to the dark amber muddy water emerging from the conventional-tillage section. The jars underneath the pasture are no more than ¼ full (demonstrating the holding capacity of the soil), while the jars underneath the tilled section are nearly overflowing (demonstrating the soil’s minimal ability to retain moisture). People stand on tip-toe, jostling for a good view.

  13. Iker says:

    Hi all,

    This is the fist time I write in this blog.

    As I see it the issue is that we are reaching growth limits in because we live in a finite world, but at the same time we can’t do anything to change our way because that would mean a financial collapse. It’s clear we need to keep the financial system up while we are able to decrease our expending and change the basis of this crazy economic system. Even if we manage to do that future wouldn’t be nice… but not doing it means … well … complete doom.

    My naive proposal: lets create money from thin air, unbacked by debt. Let’s give it to people, say, 100 euro/dollar/whatever to everyone every month. At the same time we should work against fractional banking, to break the chain that is forcing us into an ever increasing growth need. The idea is to create money to pay debt back which doesn’t require new money to pay for the interests, so not requiring future growth to pay it back. On the contrary, by providing a way to generate new money other that debt we eliminate the financial need for growth. Following would be inflation as we inject money into the real economy

    Money is just papers (or bits). It is worth what we want it to be worth. If we can’t afford deflaction its up to us to create inflation … but the total worth of the papers should take the downward slope, meaning less fuel, less iron less food.

    And with some solution of this kind maybe we get lucky and allow the economy to adapt to the future thus averting collapse. Maybe we can get to somewhere preserving some kind of civilization. The path we are following now doesn’t go there.

    This idea has crossed my mind many times, I just wanted to share it with you. I believe it does make sense and that the main issue about it is that banks wont give up their money creating monopoly without a fight. Money is created, that’s a fact. The questions is how do we have it created and who should benefit from it. The present systems creates it privately and benefits also privately from its creation (banks). This would be just a change in that way of operating. Once again a political issue.

    • Something similar has been done in the past in Germany post WWI and http://fee.org/freeman/detail/the-great-swindle (PS. Welcome to this fun place)

      • Iker says:

        Hi Robert,
        Maybe we need a little bit of post Germany kind inflation, and a change of rules. Would be a good start to straighten things (if at all possible) 🙂
        I was pointing at killing the fractional banking system and having it replaced by some other means of issuing money that does not imply growing forever (and is hopefully more fair). I think that’s a central problem. The system, as it is now, can’t stand decreasing, it would collapse, we should enable it to decrease without collapsing.

        • Bandits says:

          IMO unless I’ve misread the intent, you would have to suppress those that want more. More by working harder, being smarter, exploiting others, being an entrepreneur, being an inventor or simply wanting to get ahead. In other words suppress the natural tendency of humans to strive for a better life. I guess it is best achieved by eliminating the consumer society, the stock market, globalization, the IMF, and that also destroys the economy and any welfare and pension system and of course banks.

          Europe was virtually a cesspool prior to the opening of the New World, people moved to find a better life, then the exploitation of fossil fuels allowed humans to occupy every habitable and uninhabitable for that matter, niche on the planet. During that 250 years of plunder and pillage we have trashed our beautiful world, leaving only a dark future for our descendants.

          Ultimately we are a bunch of pleasure seekers, always looking for a better life for ourselves and our children. We always expected our children to have a better life and be more prosperous than us. That was the consequence of fossil fuels delivering unbridled growth. It will be an enormous task persuading the western world to change and also persuading the emerging third world to give up the dream of being a western styled consumer.

          We may as well collapse now and get it over with, the ultimate outcome will be the same.

          • InAlaska says:

            Iker and Bandits,
            Both are good points you make. I was just reading Joseph Tainter and he describes how complex societies come into being. One of the reasons, going to Bandit’s point, is that ambition causes some people in groups to become “the Big Man” or the chief. This leads to stratification and inequality and then you’re off to the races. Tainter points out that those societies that failed to complexify were those that squelched the ambition and desire for some people to get ahead of others such as the Bushmen of Africa or the Inupiat People of the circumpolar north. Places where resources were already scare and groups could not afford competition and cooperation was the only paradigm that worked.

            • Jan Steinman says:

              “Tainter points out that those societies that failed to complexify were those that squelched the ambition and desire for some people to get ahead of others such as the Bushmen of Africa or the Inupiat People of the circumpolar north. Places where resources were already scare and groups could not afford competition and cooperation was the only paradigm that worked.”

              Another basic tenant of ecology: competition dominates in high-energy environments; cooperation dominates in low-energy environments.

              As we crest many different Hubbert’s Curves, which will we choose?

            • It is interesting when a person visits Norway, how many sculptures a person finds of women and children. Other places have a lot more sculptures of generals on horses. This is another version of the cooperation trait of societies that have little.

              My heritage is Norwegian, on both sides of the family. We learned to be accommodating to other family members early on. My understanding is that Norway in recent years has taken on more of the high-energy habits–high divorce rates, less accommodating behavior. Some of the Norwegian Americans may have followed more of the older behavior than today’s Norwegians.

            • InAlaska says:

              Gail,
              I have always admired Norway and the Norweigan outlook on life and the lifestyle. They are very liberal in their attitudes toward others yet very traditional. IF they can avoid the high energy habits of the oil trap, they could do better than most, post collapse.

        • True I did ignore the central bank aspect but increasing the money supply is by some definitions – inflation – regardless of who profits. My limited understanding of central banking is the the government profits. They want 2% inflation which is arguably a 2 % tax. They would never give this profit to someone else. During WWII my family purchased war bonds as did many citizens. Purchasing power was lost as WWII produced significant inflation. In 9th grade Civics Class 1944-5, some of us filibustered about the national debt. The teacher repeated the mantra “don’t worry, we only owe it to ourselves”. (I sill have a $25 war bond that somehow we neglected to cash.)
          — Perhaps we should give everybody in the world a million euros. Then we would all be rich with no need to work.

          • Iker says:

            As Gail says we need a system for less and less but we have one for more and more. Even worst we have a system for more or die.
            One might argue that its human nature to try to have always more, … might be. It usually is indeed. But the system as it’s now built won’t allow for anything else. If society as a whole would decide to have less, the system would collapse. That’s, I believe, kind of what’s happening now.

            Printing money out and giving it to people won’t make everybody rich. On the contrary its a direct attack against the worth of money. But this is already being done with QE, it’s only that money is created by generating debt. And this debt forces the system to grow to be able to pay for it’s interests … and then more debt is to be generated to pay for those interests … period. This puts us constantly on the verge of financial collapse because we really don’t have what we need to keep the system alive (at least not as much as we need): GROWTH.

            In my view fractional backing reserve system is a more and more system and a 100% reserve system where money is created with no debt would be more suited for less and less. That’s a change that has to be done should we want to avert collapse ( I mean the hard one, we cant avoid some kind of collapse). But we need to be able to travel from system A to system B without going defunct in the way. We already have huge amount of debt (and money backed by that) that is never going to be repaid. That means that we have money that is worth nothing, lots of it. If we have it destroyed the hard way (unpaid debt, financial crisis … etc) then the system collapses as confidence would be lost in the process. We need to do it in a way that the change comes slowly.

            At this moment we need some inflation, that’s just a financial need, growth does not have to be behind it. Without inflation debt does not get repaid, but we can’t generate more debt as we have already hit the roof. Then why not give everybody 100 dollars every month (just the fist figure that crossed my mind)? thats 1200 $ a year per person, not that much. Inflation would go up, as people spends the money, financial system would improve as money pays for debts and at the end of the day we would be just ditluting money. At the same time the reserve requirement in banks should be increased.

            I said giving money away to people, but my real point is creating it without debt. We could as well allow government create money (scares me the only thought of it). But I don’t really see anything wrong about giving people some previously calculated amount of papers every year just because they are …. people!

            The problem about that is that the elites are greatly enriched by the system as it is now, so it’s not going to be changed at all. Financial elites currently benefit from controlling the money creation monopoly which is THE BUSINESS. Many steps have been taken to bring things to where they are now in that respect. Currency debasement … central banking … currency unions … It’s not like they are going to give it up just like that. Financial influence lays in the root of many wars (that is to say, who creates the money). In that respect it’s perfectly clear who won the last World War, isn’t it?

            The impact of such a change in a diminishing returns scenario? would that help keeping invaluable resources for critical purposes in a rational way? would the outcome be at all different? well that goes far behind my understanding ….

            • kesar0 says:

              The problem you are not taking into account is that inflation is a self-reinfocing process (in positive feedback loop). At some point, above certain level the inflation becomes hyperinflation and is devastating to the economy. In order to stop this process central bank must increase interest rates, hence decreasing money supply (M0 – M3). It kills the employment rates and companies, which accelerates the process further. It totally erodes your financial system and currency killing the international trade. At this point the only possible solution is the currency reform (replacement of the existing depreciated and devalued money with full-valued money). This is the end of the cycle.
              Inflation as a panaceum to our current predicament is another popular myth. It was done several times in the past and it is always disaster to society after which the secular cycle restarts. But this time is different. We are 99% (or pick your own number) globalized, interconnected, interdependent economy. We just wait for 100%. After that point the fall begins. It already started for many countries.

            • Lack of faith in a currency is a self-reinforcing situation. This is especially the case if we have people “betting against” the ruble vs the dollar, hoping to make money off the situation. Thus, a country can find that imported goods are gradually becoming more and more expensive, or are simply becoming unavailable.

              Deflation is also a self-reinforcing situation, related to wages not keeping up with a rise in the cost of commodity extraction. Ultimately this seems likely to lead to contraction of an economy, because consumers can afford to buy less and less consumer goods, in some real sense. The amount of debt they can afford is falling as well. Falling debt is a big part of what leads to falling prices.

              I am not sure that I really believe what you are saying about “inflation feeds on itself and at some point becomes hyperinflation.” I think the situation is more complicated.

            • kesar0 says:

              Dear Gail,
              I was just referring to the idea of creating more money by a social-wellfare/helicopter drop type actions mentioned by Iker above. I know your opinions about defliationary risks. Based on history of many financial systems the deflationary period in most cases precedes the inflationary feedback. After some point the economy can’t produce enough goods to fulfill the demand and the inflationary period begins. Concluding my statement, the deflation and the inflation period is a sequence of the collapse process.
              I guess many US citizens take the Great Depression period as a benchmark for their predictions. It’s not what has happened with most of the countries and economies during collapse scenarios in our modern history. Especially not with the fiat currency model. Deflationary pressure works in the long-term only with some limitations in currency printing, like the gold standard.

    • The issue is “promises” as much as “debt.” Money is a promise that you can buy something with it.

      Getting rid of debt and adding money doesn’t really do anything useful. Our problem is that we are moving rapidly toward an era of less and less. We are working with a system designed to be used in a period of more and more. Whatever the promises are–whether debt or money or insurance policies–they won’t really be able to be exchanged in the real world for goods and services, at least not in the quantity that we have come to expect in the past.

      • Quitollis says:

        “We are working with a system designed to be used in a period of more and more.”

        Very clearly put Gail. I suppose that a new system of debt for a period of less and less might be the promise that we repay less and less as time goes on. Like, if you give me 100,000 now, I will promise to give you 90,000 in 5 years time, 80,000 in 10 years and so on. LOL I cant see that one working out somehow.

        • InAlaska says:

          It might work out, but we’d have to have a cataclysm first to teach us, as a species, the lesson of less.

  14. Don Stewart says:

    Dear Gail and All
    Here is a link to an excellent article on the recent Degrowth book, led by some Spanish academics:
    http://www.resilience.org/stories/2014-12-18/review-degrowth-a-vocabulary-for-a-new-era

    If you have read my postings, you know where I stand on most of these issues, so I won’t regurgitate all that.

    I do want to add two things. In the discussion of Daniel Kahneman and ‘lifestyle packages’, Davey asks the question whether people whose lifestyle packages have been disrupted begin to behave irrationally. What I want to add is Kelly McGonigal’s assertion and demonstration that, when humans have nothing to absorb their attention, their minds do behave chaotically. You can trace the importance of keeping one’s mind focused at least as far back as the Buddha, and a couple of decades ago the Chicago psychologist Mihaly Csikszentmihalyi wrote several book on the importance of the mind and body being in ‘Flow’. Flow was defined as occupying all of one’s physical and mental resources in accomplishing some task, but without any stress. That is, the job demands our best, but not more than we can produce. You will notice that he said nothing about sitting in an easy chair wasting time on reality TV. Absent a real task involving Flow, and in a rich society, we can fall back on our lifestyle package to keep us amused.

    I suggest that those who have seen their lifestyle packages destroyed, and who have nothing to keep them in a state of flow, will, indeed, behave irrationally. This is like Orlov’s observation that the managers who lost their jobs in the Soviet collapse tended to drink themselves to death.

    The second thing I would like to add is a recent note from Charles Hugh Smith describing the telephone interview questions posed by Google to job applicants. The two questions probed the ability of the person to be creative, and the person’s intelligence. In a collapse, long and slow or short and quick, creativity and intelligence will both be important. So…go to the App store and buy some more creativity and intelligence?

    Don Stewart

    • Don Stewart says:

      Dear All and especially Jan Steinman
      I should have added a third point. This is a footnote on page 186 of Mobus and Kalton:

      The creation of eukaryotic cells in this fashion is actually a reflection of the point made in the section above on the need to ‘reduce’ complexity by introducing a coordination control system.
      End quote

      Imagine an organization with one boss and 100 workers. In some sense, adding a layer of middle management ‘simplifies’ the system. The cellular structure of eurkaryotes similarly simplifies what would otherwise be a chaotic mess.

      Now look at what we 21st century people use as our ‘coordination control system’. I submit that it is mostly money…probably even superseding the family and most certainly far overshadowing any clan or tribe or fellowship of workers. But suppose that the Central Banks succeed in destroying money. So we would simultaneously face the challenges of the loss of our coordination control system and our source of concentrated energy and the depletion of many useful minerals.

      This argues, I think, for the formation of non-money organizations. I think the family will be very important. Beyond that, I suspect that intentional communities will be more adaptive than trying to resurrect clans and tribes.

      Don Stewart

      • Jan Steinman says:

        “I think the family will be very important. Beyond that, I suspect that intentional communities will be more adaptive than trying to resurrect clans and tribes.”

        In nearly nine years of trying, I can’t say that the IC route is “more adaptive.”

        I keep thinking that times are not yet hard enough for people to co-operate, but perhaps modern humans have actually evolved away from co-operation. Brain volume has been decreasing since Lord Byron logged the largest brain ever measured. Our money systems and our extrinsic knowledge systems have perhaps turned us into a more subtle version of the movie, Idiocracy, whereby we’ve moved our collective intelligence into books, and worse yet, into tiny magnetic particles, leaving precious little practical knowledge in our wetware, outside of how to use Google.

        With our extrinsic knowledge and the financial system, we can land a probe on a comet, but how long would those scientists and engineers last in the wild, without any extrinsic knowledge?

        How does one discriminate “intentional communities” from “clans and tribes?”

        Simple. A clan or a tribe consists primarily of people who are related by blood or marriage.

        If you accept your major premise (“I think the family will be very important.”), then I see more hope for clans and tribes, rather than ICs.

        I’m fairly burned out on ICs at the moment. Unrelated people will gladly sit around a campfire and sing Kum By Yah when the times are good, but my experience is that when times are only slightly less good, they’ll “lawyer up” and fight tooth and nail with those they just pledged unity with.

        There’s something about the familial connection that seems to be more enduring, perhaps Dawkin’s “selfish gene” at work. (I’ve also seen the opposite: family members treating each other much worse than they’d treat strangers. Go figure.)

        • Quitollis says:

          Yes a family that treats complete strangers from the other end of the world with more sympathy than they treat their own family will never last. Abstract universalist morality has got a lot to answer for. Sad to ever see that. The British as a media breed are finished. “Go figure!”

        • InAlaska says:

          Jan,
          I think families, extended and core, will ultimately be the unit of organization post-collapse. From personal experience, the communal living that was tried in the 1960s simply didn’t work, and neither did the back-to-the-land communes. There are isolated examples of success, but the family continues to be the time test unit of cohesion for hard times.

          With regard to externalizing our knowledge to the point where nobody knows how to do anything except use Google: Someone recently posted a TED talk demonstrating how hard it is to even make a simple toaster from scratch. The speaker stated that the more basic the technology, the father back in time one has to go to find the required information. For example, he needed steel to make components for his toaster. Modern metallurgy books don’t tell you how to make steel. That information is simply assumed. He had to go back to a medieval textbook in order to find instructions that actually could be followed on how to make steel. So, in other words, we all live our lives on the shoulders of giants, but we are not the giant.

          • Jan Steinman says:

            “the more basic the technology, the father back in time one has to go to find the required information.”

            My model for civilization is a pyramid, with a fixed angle of repose. The base of the pyramib is our energy supply.

            What you see when you look at a pyramid is the outside. It is covered with smart phones, CAT scans, credit-default-swaps, PhDs in romance literature, and such.

            When the base contracts, the outside must be simplified, as if going back in time. The next layer inside might include rotary-dial phones, vacuum tube electronics, medical x-rays, monthly compounded interest, and “normal college” (for degrees in teaching).

            As you contract the base further, you find the angle of repose of the pyramid supports less and simpler technology. Basic metallurgy, steam engines, splinting broken bones, basic reading and writing skills, etc. might be all we can support on some level of energy input.

            Throughout the vast majority of human history, some 40 watts of exosomatic energy supported the atlatl, stone spear points, and verbal history.

            What size civilization pyramid will we end up with?

            • alturium says:

              Hmmm…I am starting to think Ponzi vice Pyramid for the basis for civilization…

            • alturium says:

              What you are saying makes sense and ties in with Gail’s idea of a network economy that expands…but the earlier technology is no longer economically viable due to the lack of funding (debt at its time) and resources (available via mining at the energy cost at that time). In other words, the inner pyramid or network has disappeared leaving only the outer shell.

              As I understand, technological innovation has a positive feedback on the economy (Jevon’s paradox) whereas conservation is a negative one. But once we reach the peak of growth (and collapse), technology (knowledge) may sustain the efficiency at lower levels of energy consumption on the downside. Or not.

            • I have a hard time seeing ” technology (knowledge) may sustain the efficiency at lower levels of energy consumption on the downside.” Technology is only possible with suitable raw materials. These usually include metal ores (or scrap metals) that can be adequately refined, and energy sources that allow this to happen. It takes a lot of energy to refine metals. If we try to do much of this, we wipe out forests. Also, there is the constant struggle against other species, including germs. We either win and increase our population, or lose and decrease our population. Birth control is not one of the types of technology that we can take with us very well.

            • alturium says:

              Thank you Gail, I actually wanted to post that as a question!

              The technology innovation I am referring to is the know-how or knowledge that can be applied without additional resources. For example, when constructing a saw blade and having alternating teeth bent to one side or the other. But if you don’t have saw blade…it doesn’t matter 🙂 … and I’m not sure how efficiency could be achieved.

            • Jan Steinman says:

              “The technology innovation I am referring to is the know-how or knowledge that can be applied without additional resources.”

              I don’t think knowledge exists without energy. HT Odum (et. al.) would argue that knowledge actually is a form of embedded energy, and certainly Panarchy Theory includes knowledge with the “interconnectedness” that it claims leads to a release to a low energy state.

              It takes energy to maintain knowledge. If not on spinning disks in climate-controlled rooms powered by coal-fired electricity, at least on printed paper, and the time and energy that goes into organizing it. Or if it only exists as oral tradition, even then, it takes the time and energy needed to repeat the story over and over and commit it to memory.

            • alturium says:

              Good points Jan.
              So…you could say books are like batteries, storing energy accumulated through experience and application. I think they are very low cost storage mechanism that can persist for some time. But, then, I have never read a book that really explains “How to do something from ground zero”. I just finished a small paver project and even though I scoured the internet, I was confronted with many little problems. How much settling given 2.5″ of paver base in my clayish soil?…my point being that books assume a certain level of experience and knowledge.

            • Jan Steinman says:

              “I have never read a book that really explains “How to do something from ground zero”.”

              I have a big collection of them!

              I have the entire Foxfire series in paper, but I also have a large number of scans of old books, such as Farm Roads, Fences, and Gates, a Practical Treatise on the Roads, Tramways, and Waterways of the Farm, the Principles of Enclosures, and the Different Kinds of Fences, Gates, and Stiles (1883, before widespread use of diesel excavators) or Manual of Metallurgy, Or Practical Treatise on the Chemistry of the Metals (1852, before widespread use of electric kilns).

              (Anyone interested in a Kindle loaded with 4GB of these treasures? Let me know. I bought a box of broken Kindles and replacement screens.)

            • alturium says:

              Jan, I am not surprised 🙂
              I really don’t know how people like you and Don (and others here) do it. Thank you.

              Btw Did you notice the scene in the movie Dawn of the Planet of the Apes (2014) where Gary Oldman is waiting for the power to come on, and when it does, he turns on his Kindle to see the digital photos of his kids…That was so prescient. People will be doing with your collection in the future….

            • Jan Steinman says:

              “Did you notice the scene in the movie Dawn of the Planet of the Apes (2014) where Gary Oldman is waiting for the power to come on, and when it does, he turns on his Kindle to see the digital photos of his kids…”

              Ha! Love it!

              But I’m largely immune to pop culture. I can’t recall the last current-run movie I’ve seen. I usually wait until the DVD is $1 in the bargain bin. So it’s safe to say I haven’t seen any movie made in the current decade.

          • Jarle B says:

            InAlaska wrote:
            “I think families, extended and core, will ultimately be the unit of organization post-collapse.”

            Yes, mostly families and some groups of different types of outcast.

            Like the wolf packs, probably – parents and children of different ages, contrary to the popular belief of the alpha wolf:

            “Whatever Happened to the Term Alpha Wolf?”

            http://www.lovemydogtraining.com/public/asktrainer/Alpha_Wolf_David_Mech.pdf

        • I know Dmitry Orlov believes unintentional communities work better than intentional ones. If not related by blood, they are connected by something else, such as religious belief, or common persecution.

          • alturium says:

            That is a great idea. This a broad interpretation but I can see how intentional communities are probably driven by a strong personality who defines or projects reality. The effectiveness of the group is then limited by that leader’s imagination and management abilities. Unintentional communities may exist when a real or natural need exists and thus are driven by an outside force. They would require the community to confront the challenge without preconceived notions. Leaders in that situation would be selected based on their abilities to organize the group toward a common goal.

  15. theedrich says:

    Perhaps it is good occasionally to recall the words of cosmologist and astrophysicist Fred Hoyle:

    “It has often been said that, if the human species fails to make a go of it here on the Earth, some other species will take over the running.  In the sense of developing intelligence this is not correct.  We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned.  With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology.  This is a one-shot affair.  If we fail, this planetary system fails so far as intelligence is concerned.  The same will be true of other planetary systems.  On each of them there will be one chance, and one chance only.

    “Our special problem today is just this:  we are essentially primitive creatures struggling desperately to adjust to a way of life that is alien to almost the whole of the past history of our species.”

    — Fred Hoyle, Of Men and Galxies, Seattle:  University of Washington Press, 1964., pp. 64f.

    • My expectation is that the next species to achieve dominance on the earth will be some sort of plant species that can make good use of CO2.

      • InAlaska says:

        Gail, you are probably right since CO2 will make up a far larger component of the atmosphere. Hoyle’s quote is cautionary, though, because no matter how dominant or a new species may be, it won’t have the necessary base materials to develop an advanced, industrial society. Perhaps a new species, unable to explore the boundaries of the physical world (due to resource constraints) will explore inner space and develop other “organs” that will allow them to delve into dimensions that we haven’t imagined.

      • doomphd says:

        That sounds about right, Gail. The return (and revenge) of the Lycopod trees, the stars of the Carboniferous Period, with plenty of new shallow, coastal swamps for them to grow in.

        Of course, the Law of Faunal Succession says the same species cannot reappear (ala Steven Gould’s Contingency), but it could rhyme.

        • Wee Willy Winky says:

          Or maybe cockroaches will be the dominant species. I have heard that they can survive in a radioactive environment, which is what the earth is likely to experience when we are unable to manage the nuclear facilities that are left behind.

      • Creedon says:

        Wouldn’t that be, like, people who garden sustainably.

    • Quitollis says:

      “high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned”

      I am not sure that hi tech is a precondition of the evolution of higher intelligence. After all, we have had hi tech for only a few centuries, depending on the definition of hi tech, and I do not think that our brains have genetically made huge strides since then. Our brains evolved over hundreds of thousands of years. I think that fire and cooking were important, it allowed jaws to shrink and made more room for the development of the brain, it also provided nutrients for the brain. Also the widening of the female pelvis would make babies with bigger heads feasible. Harsh environmental conditions in Europe may also have helped during and after the ice age. IQ generally correlates with latitude.

      If anything it seems likely that our genetic intelligence (g factor) has declined under industrialism because society has massively bred the less intelligent lower classes. Cultures improve the breed only if they make new selective demands on the breed as a condition of survival and procreation. Industrialism has had the opposite effect, it is weakened selective pressures and has made survival and reproduction much easier than it used to be.

      A recent study of historical medical reflex speeds found that British intelligence has declined by the equivalent of 15 IQ points since the Victorians.

      http://www.dailymail.co.uk/sciencetech/article-2323944/Were-Victorians-cleverer-Research-indicates-decline-brainpower-reflex-speed.html

      Reflex speeds are an excellent indicator of general brain health and they correlate closely with general intelligence, with sperm motility, with personal wealth and status and with national GDP. “General intelligence” means that we all tend to do equally well (as our self) across all of the measures of IQ, while education just makes us better at this or that cognitive skill, it does not increase general intelligence. A diversified economy can compensate for the decline of general intelligence through education, where people get better at some cognitive skill and then perform their role in the society.

      So it may be that our gradual upward ascent will recommence upon the collapse of industrialism. Some people reckon that we are due another ice age, which may be the cold shower that society needs.

    • InAlaska says:

      theedrich,
      Thanks for the quote. Just think how advanced Hoyle’s thinking must have been to imagine our extinction in the 1960s when it appeared as if we would be masters of the Galaxy.

    • Jan Steinman says:

      I’m not so sure I agree with Fred.

      We’re creating an environment that is ripe for putting more carbon in the ground after we are gone. We could be followed by a hundred million years of a Neo-Carboniferous Age, after which, sentient canids, cetaceans, or (heaven forbid) hominoids will have another pool of fossil sunlight to exploit.

      Let’s hope their archeologists detect a thin, greasy, plastic layer in the rock strata, and perhaps find a few bronze artifacts, so they’ll be less arrogant and more careful. Systems consultant Fred Brooks (The Mythical Man-Month) calls us “the first-system syndrome,” whereby an arrogant young turk goes out and designs a nightmarish collection of unwanted features — which, of course, crashes and burns.

      • InAlaska says:

        Jan,
        Interesting how our perceptions of time matter. If the next form of intelligent life on this planet manages to evolve they will surely know of our existence, particularly if they make it to the moon. However, 100 million years is a long time to wait. Sure, fossil sunlight will again be available, except we’ll be the fossils!

        • Jan Steinman says:

          Yea, Alan Weisman (A World Without Us) says bronze statues will only last ten million years or so.

          I fear that if future sentients reach the moon, they will be past the point of no return, and will proceed down the same path we have. We’ve gotta leave a warning that they can find earlier in their development.

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  17. Don Stewart says:

    Stefeun
    Here are the first two pages of a 200 dollar book on decomposition and ultimate carbon sequestration.

    http://www.springer.com/life+sciences/ecology/book/978-3-642-38820-0

    You can see that most of the carbon fixed by photosynthesis is returned to the atmosphere by oxidative decomposition. When we ‘turn in’ carbon rich litter on the surface, we are oxidizing it. Therefore, the carbon is in the soil relatively briefly, and then returns to the atmosphere from whence it came.

    Christine Jones, in her talks, emphasizes the importance of deep perennial roots and the ‘liquid carbon pathway’. The deep soil is not exposed to oxygen…so anaerobic decomposition occurs. That is how Christine can dig a trench in a field and show very deep topsoil with rich carbon, while farmers who try to grow above ground biomass which is turned in do not (at least around here) actually make any headway in terms of carbon sequestration.

    The textbook says it uses results from forests. But forests tend to put their carbon into above ground and shallow root biomass. Perennial grasses put most of their biomass well underground. You can look at wikipedia and find pictures of the roots of intermediate wheatgrass, for example. The ancestor of our annual wheat. We bred annual wheat to be annual rather than perennial, and to put most of its biomass into seeds rather than roots. The results are that less carbon is sequestered, the land is left bare at certain times of the year, the land needs cultivation or chemical intensive no-till, and the land is more subject to erosion from wind and water. The upside is that annual wheat produces a lot of food for humans. The Land Institute in Salina, KS is working on the project of turning intermediate wheatgrass into a heavy producer of seeds to compete with annual wheat, but remain a perennial. I think the laws of physics dictate that underground root mass will be sacrificed to produce more seeds.

    Don Stewart
    PS Be aware that I have not studied a 200 dollar textbook under the guidance of a PhD. So caution in believing anything I say is appropriate.

    • Plants would seem to be limited in the total amount of energy that they can store. An annual plant need lots of seeds; a perennial does not need as many. It can develop a large root system over time, instead. I agree with you that a big root system and lots of seeds don’t seem to go together.

  18. VPK says:

    Not only our the lights about to go out on industrial civilization, but the lights are about to go out on our species. Marching in lockstep with the dark days faced by society and Homo sapiens is my own heart, heavy with the knowledge in my head and the failure of my personal efforts.”

    -Guy R. McPherson, from the introduction to Going Dark

    http://www.globalresearch.ca/near-term-human-extinction-a-conversation-with-guy-mcpherson/5373909

    “The gods envy us. They envy us because we’re mortal, because any moment may be our last. Everything is more beautiful because we’re doomed. You will never be lovelier than you are now. We will never be here again.”
    -Homer, The Iliad

    The planet will not be habitable for the human species long beyond 2030. And there is NOTHING the human species for all its sophistication and technology can do about it.

    Very Good Interview about the working outside the system…because the system is what is wrong:
    Dr. Guy McPherson:

    • What if we put a load of chaff in either low-earth orbit, geosynchronous orbit, or out at Earth-Sun L1? Global Warming could be reduced, halted, or even reversed by reducing the amount of sunlight that reaches the Earth.

    • Guy McPherson also says that if financial collapse brings down the economy, the outcome may be quite different. I would not lose a lot of sleep worrying about what he says. We have a lot of other problems between now and 2030.

      • InAlaska says:

        Gail. You are right. 2030 might as well be 2130 for its relevancy. We have so many converging catastrophes that will arrive much sooner, that worrying about near-term human extinction from climate change is a bit pointless. Makes for good soundbites, though.

        • VPK says:

          Perhaps, but Dr McPherson gives valid reasons for his stance and does provide sound advice in the video to young people. If they (we) paid heed to his suggestion(s) of “working outside of the system”, better chance of living through the new age before us.
          Dr. McPherson is among many sounding the call of what is coming, along with Gail, Heinberg, “Paul”, ect. The more voices the better, as far as I’m concerned.

          • InAlaska says:

            VPK, yes, I agree. McPherson is a leader in pointing out all of our follies and foibles with regard to climate. How we have basically run an uncontrolled experiment on the biosphere. I think that perhaps his greatest contribution is getting people to think about how they should be acting toward each other and the world, living as if its the last year of their lives.

      • ” I would not lose a lot of sleep worrying about what he says. We have a lot of other problems between now and 2030″

        Yes, but we can only deal with the big problems – nuclear and runaway global warming – now, with BAU. If these threats turn out to be real problems, without BAU we will be helpless. By we, I mean anyone who survives the initial collapse.

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  20. Don Stewart says:

    To All Maximum Entropy Production People
    Here is an article which demonstrates the Maximum Entropy Production Principle on a farm in Australia.
    http://www.resilience.org/stories/2014-12-17/coexistence

    The first thing you have to do is get your mind around the idea that entropy production is a very good thing…if it is done by Nature. A lightly managed natural system of grazing has greatly increased the amount of carbon sequestered in the soil (which represents an increase in entropy), and the trip the carbon takes from the carbon dioxide in the air to its final resting site as humus powers the plants and the soil food web and and the herbivores and, eventually, the humans. The soil food web in turn makes minerals available to the plants, which minerals are then available to the herbivores and the humans. The herbivore consumed minerals are returned to the soil in the form of manure. The ‘leakages’ of minerals are the humanure and urine which will contain the minerals which were in the herbivores which are eaten by the humans. In Edo Japan, these minerals were returned to the soil.

    When people want to test the Maximum Entropy Principle in terms of ecosystems, it is not good enough to look at an alfalfa field or a corn field. A mono crop will never make the maximum use of carbon dioxide. It takes the diversity on display on this farm to harvest all the carbon. It would take a more knowledgable person than me to actually measure the rate of entropy production, but it is clear from the observations that entropy production has increased significantly on this farm (along with mineral availability, rainfall capture, and carbon sequestration).

    Don Stewart

    • Stefeun says:

      Don,
      Biodiversity is for sure the best way to use as much as possible of the available energy, especially because Nature tends to fill up every possible niche, and the waste generated at one stage is re-used as an input by another process. Or even mutually interconnected, such as mycelia “trading” glucose for minerals with the plants’ roots.

      A monocrop is for sure using as much energy as it can, but as for Roddier’s single vortex which is limited in size, a portion of the available energy is not dissipated and has to go elsewhere. For example the excess of nitrates is washed off the monocrop lands and comes to feed toxic green algae on our sea-shores (which also destabilizes the marine ecosystems there).

      The picture of “the Flerd” is really nice.

  21. VPK says:

    http://www.countercurrents.org/martenson071214.htm
    Oil And The Global Slowdown
    By Chris Martenson
    07 December, 2014
    Peak Prosperity
    The world economy is slowing down and the authorities are fretting.
    Japan, Italy, and Greece are all in recession. China is slowing down according to official statistics, and even more according to whispered accounts.
    …There are signs everywhere across the globe now that the central banks have failed to induce growth in the real economy, and have instead simply bought some time at the expense of pushing things even further into a zone of massive malinvestment, rank speculation, and badly inflated prices.
    In short, we are now past the point where the next correction could be survived injury free. It’s going to hurt.
    we look at the various global warning signs that slow growth has morphed into something more deadly to the banking system; deflation and recession. We’ll discuss and review the basic commodities that are telling us far more than the distorted stock or bond prices ever could about the true state of global growth and future economic prospects.

    Copper, oil, iron ore, coal, gold and silver are all telegraphing major economic weakness ahead. The next round of deflation will be absolutely punishing for financial markets and possibly even spark international conflicts given the raw state of diplomacy and east-west tensions.

    • The role of debt in all of this is huge. Rising debt is what keeps prices up, because it keeps demand up. Once growing debt “turns around,” the decline can be quite steep, because prices will stay down.

    • Creedon says:

      As the global economy slows, we are dissipating less oil. That seems to be our function in the universe at this time to dissipate the oil.

  22. Don Stewart says:

    Dear Stefeun

    I’ve spent a rainy day looking at articles on Maximum Entropy Production. A few thoughts from your ignorant pen pal:

    Here is Rod Swenson’s summary of The Fourth Law of Thermodynamics:
    http://www.sonoran-institute-for-epistemic-studies.org/images/KHIMIYA_18_5_SWENSON.pdf

    I call your attention to the last paragraph on page 336, and especially this passage:
    ‘If the seals are instead pulled off of regions 1 and 2 at the same time, however, where 2 has a faster rate than 1, it becomes more interesting. The system does not give half the potential to 1 and half to 2. It gives as much as it can to 2, the faster path, and then since 2 cannot dissipate it all at once the remainder to 1. One can now do further combinations with 1-4 and the results will be the same. The system will select the path or assembly of paths out of available paths that minimizes the potential or maximizes the entropy at the fastest rate given the constraints.’

    The notion that Nature chooses the path which yields the maximum rate of entropy production in the boxes is very similar to Adrian Bejan’s claim that Nature chooses structures which maximally facilitate flow, and it is very similar to the fact that dogs and humans will choose the fastest path which combines running and swimming to retrieve an object in the water. Keep these thoughts in mind.

    Here is a recent article claiming to prove that the MEP doesn’t work for ecosystems:

    http://rstb.royalsocietypublishing.org/content/royptb/365/1545/1405.full.pdf

    The way I understand this second article is that they are using ‘accepted models in the ecology world’ to give numerical estimates of actual versus theoretical entropy production, and finding that the ‘actual’ is less than the theoretical.

    Now let’s call to mind something that every permaculture practitioner believes: several plants grown together produce more than the plants grown individually. In short, the plants are synergetic. Medical people find similar synergies when they measure the antioxidant capacity of a vegetable as compared to the antioxidant capacity of the separated components.

    When a group of diverse plants and the soil food web critters in a garden are ‘more productive’, they are producing entropy more rapidly. Among other things, they will produce more humus, which stores carbon in the soil in an inert form. While humus is a wonderful thing to have in one’s soil because of the benefits in terms of water storage and soil structure, it does not ordinarily provide much carbon as energy food. So Christine Jones ‘liquid carbon pathway’ is converting high energy available carbon to low energy available carbon…an example of increasing entropy (and carbon sequestration). Along the way, of course, humans can grow some food, which staves off the conversion of our own carbon content into humus for another day.

    It’s all fascinating.

    Don Stewart

    • Stefeun says:

      Don,
      You’re raising too many questions at same time! 😉
      I’ve tried to go through the Royal Society paper and I’ll comment that one only.
      Although I’m not skilled enough to understand the detail of the reported study, my understanding is that they don’t challenge the MEP principle or the dissipative structures theory, they just say that an ecosystem is a little bit more complex than a simple dissipative structure and therefore does not strictly obey the laws of a thin layer of fluid between 2 plates at different temperatures.

      (I was also troubled because they often talk about equilibrium, steady-state and “compartment”, eg this sentence: “For the ‘ecosystem’ compartment, the steady-state condition requires that its four state variables should no longer vary with time.”, all things that do not exist in natural conditions. However, I’m not sure about how to interprete their statements, so I won’t discuss this part)

      Regarding simple/complex dissipative structures, I’ll answer -again!- with one of Roddier’s articles, called “The Cascades of Energy”:

      “As we have seen, the thermodynamics of the 19th century mainly describes the properties of so-called closed isolated systems. Yet they practically do not exist in nature. The concept of a closed system is a convenient theoretical idealization for reasoning, because it leads to simple and easy to study properties but poorly describes the real phenomena. A closed system quickly reaches thermodynamic equilibrium and stops evolving. The concept of closed system has little use for researchers interested in continuous evolution as observed in nature.

      Only open nonequilibrium systems evolve. This is the case of living beings and, more generally called dissipative structures. Now it turns out that the universe is made mostly of dissipative structures. We do not necessarily notice it because their evolution can be very slow. This is the case for example of the stars, however, they are born and die like us. Moreover, the stars are organized into galaxies (a) which themselves are organized in clusters of galaxies (b) organized in turn into superclusters (c).

      We observe cascades of dissipative structures interact with each other, each stage of the cascade redistributing energy to other floors. An open system, consisting of dissipative structures in interaction, being itself a dissipative structure, the system will automatically self-organize to maximize the energy dissipation.

      A well known example of such a cascade is the cascade of eddies of a turbulent flow. When increasing the speed of a turbulent flow, vortices become unstable and break up into smaller vortices that are further subdivided into even smaller vortices. The energy of the large vortices is thus transferred to eddies smaller and smaller until the final heat dissipation at the level of individual molecules.

      Such a cascade of swirls bears the name of Kolmogorov cascade, named after the Russian researcher André Kolmogorov (d) who discovered the properties. When the same physical phenomenon is responsible for the transfer of energy to each stage of the cascade, then the cascade properties are the same regardless of the stage in question. It is said that its properties are invariant under change of scale. For example the energy in a vortex and the vortex size are always in the same report. Mathematicians translate this by saying that the relationship between energy and the vortex size is a power law. This means that the energy of a vortex is proportional to its large size to a certain power (ie exponent, whole or fractional). In the case of the vortices that power is 5/3.

      Thus turbulence has the properties of a fractal object (e) within the meaning of Benoit Mandelbrot (f). These objects look the same regardless of the magnification with which we look at the (self-similarity). This is because energy is dissipated in cascades that such objects are widespread in nature. Until now they have been little studied because of their complexity. With computers we can now mathematically make fractals and represent them graphically. They are often of great beauty (g) because they resemble natural structures. Fractals are characteristic of self-organization process of the universe, especially the living world.

      A particularly complex example of dissipative structures interact is an ecosystem (h) An ecosystem is itself a dissipative structure. It receives energy (mainly solar) redistributes it in other forms. It absorbs the material (water, oxygen, carbon dioxide, soil minerals) that redistributes also. Like a whirlwind, elements are continually circling in the system: it’s the case for the nitrogen cycle (i). An ecosystem is made up of energy cascades. Plants capture solar energy directly, and serve as food for herbivores, which in turn are food for carnivores. So one can observe up to five successive cascades: the man eats trout, which eats frogs that eat locusts that eat grass. Energy is dissipated at each stage. To keep a man alive for a year one should feed him with at least 300 trouts. These trouts will have eaten 90,000 frogs, which have had to eat 27 million locusts, which have themselves eaten 1,000 tons of grass (1). As Kolmogorov eddies, ecosystems self-organize to maximize the dissipation of energy.

      If too large structure to effectively dissipate the energy is divided into smaller structures, it also often happens that too small structures to effectively dissipate energy collaborate with each other to better dissipate energy. We have seen the example of the genes in the genome or cells in our body. Again, there is self-regulation of the size of the structures so as to maximize the dissipation of energy. These same laws apply to individuals in a company and to businesses within society. We’ll return to this subject at length at the end of this blog.

      Some biologists like John Whitfield (j) sought to highlight a relationship between metabolism (energy dissipation rate) of living beings and their size. As in the case of the Kolmogorov vortices they found that it follows a power law. So, mammalian metabolism appears to be proportional to the power 3/4 of their mass. The relationship is valid from the mouse to the elephant that is 10E4 times bigger. The origin of this exponent (3/4) is still discussed. Mammals dissipating energy as heat, one would expect that their metabolism is proportional to the surface, which is itself proportional to the power 2/3 by volume (thus their mass). Why an exponent 3/4 instead of 2/3, that is 1/12 of a difference?

      Allow me to offer a suggestion here. Eric Chaisson (k) showed that the efficiency with which energy is dissipated in the universe has been increasing. For example animals dissipate ten times more energy per unit of mass than emerged plants that appeared 1.5 billion years ago. It is therefore likely that large mammals, appeared 150 million years later that small, dissipate some energy more efficiently than the latter. To account for the difference between the two exponents, simply a factor (10E4)E1/12 or 10E1/3 that is to say of the order of 2, which seems consistent with Chaisson’s curve (see figure).

      {E.Chaisson’s graph pls see French blog}
      Evolution of the energy dissipation rate (per unit mass)
      depending on the age of the universe (from Eric Chaisson)
      According to this curve, the human brain dissipates ten times more energy per unit of mass than an animal body, and ten thousand times more than a star. As we saw in our previous article (no. 17), a new order of magnitude still has been crossed with human societies. The curve shows Chaisson continual acceleration of evolution. The energy dissipation rate is multiplied by 10 on time intervals that become shorter and shorter. It is therefore not a simple exponential growth. More than an explosion, it is a real blast that few people are aware of. And those who realize (2, 3) do not usually know the thermodynamic origin.

      To understand the evolution, it is necessary to review the process of self-organization of the universe since the Big Bang. I intend to do so in the next article.”

      Here’s the link to the original, in French, where you can see the Chaisson’s chart and access the footnotes (if the link doesn’t work, look for article #18 of Roddier’s blog):
      http://www.francois-roddier.fr/?m=200701

      • Don Stewart says:

        Dear Stefeun
        Rod Swenson identified the Royal Society paper as one of those which is wrong. Roddier talks about smaller entities cooperating to produce entropy more rapidly. I suspect that the Royal Society paper did not adequately address that. As I said in my notes, an ecosystem is more than the sum of its parts.

        George Mobius and Michael Kalton have a section in their textbook Principles of Systems Science where they discuss networks of various kinds. One of the networks discussed is the insulin producing cells in the pancreas and sugar circulating in the bloodstream. The insulin is required in order to prompt the cell to permit the sugar into the cell.

        ‘The reason for having special cells in the pancreas that do this, and not simply having every cell signal itself when sugar is present, is that sugar regulation is very finely tuned in the body and must be controlled carefully and in a coordinated way so that cells do not get too much or too little.’

        When the control mechanism fails, type II diabetes is the result.

        If you look at the post I made today on Courtney White’s visit to the cattle and sheep farm in Australia, you will see that increasing the rate of production of entropy is good for all concerned…the land, carbon in the air, the water cycle, the plants and animals, and the humans. What we are looking at is a very ‘Gaia Like’ control mechanism. The increased carbon dioxide processing by the multitude of grasses and forbs results in more production of humus, which is an entropic product.

        But if you look at Roddier’s chart on the processing rate of societies, you suspect that, just as with diabetes, the system is out of control. Humans are obviously not sequestering carbon as Nature does in a grassy field.

        If you are inclined toward philosophical speculation, you think that perhaps Gaia is about to solve the problem of excess civilization, just as death from diabetes (and associated chronic diseases) solves the excess sugar problem.

        Don Stewart

      • Thanks for the summary. I think you or someone else has published a link a different version of the chart shown in article #18, showing a finer breakdown–one celled plants working up to more complex ones, and animals working to more complex larger ones.

        My impression is that men usually dissipate more energy than women (feel warm when women are cold). Pregnant women tend to feel warm all of the time, especially late in pregnancy. Of course, men are bigger than women, and pregnant women are larger than non-pregnant ones.

        • InAlaska says:

          As I remember it from basic ecology courses, humans as homeo-therms, regulate their body temperature more easily the bigger they are. The larger the surface area the easier it is to regulate temperature in cold environments. Thus you have moose, bears, polar bears, caribou, whales and before that, mastodons and mammoths. These creatures are generally bigger than their cousins to the south (elephants perhaps as the exception). Size matters in cold places.

          • Stefeun says:

            InAlaska,
            the reason is that thermal exchange occurs through the external surface, which in proportion is smaller compared to volume, the bigger the animal is.
            Stephen-Jay Gould has explained this very nicely, for example here:
            “Simply by growing larger, any object will suffer continual decrease in relative surface area when its shape remains unchanged. This decrease occurs because volume increases as the cube of length (length x length x length), while surface in- creases only as the square (length x length): in other words, volume grows more rapidly than surface.”

            From this short document:
            http://qrc.depaul.edu/djabon/CTTI/Readings/Gould_Size_and_Shape.pdf

            This ratio has a huge impact on the physical constraints at play, not only for animals (eg small insects are more subject to surface tension forces than to gravity), but also for buildings, etc.. and even the planets, that must be not-too-big not-too-small in order to host an atmosphere.

            • InAlaska says:

              Stefeun,
              Thanks for the description of size v. surface volume in the regulation of homeo-therms. I remember reading Stephen J. Gould awhile back when I was a student of ecology.

            • Creedon says:

              Dinosaurs existed in a lower gravity, smaller earth world. That is why they were able to get so big. The earth has been getting larger over time.

        • Stefeun says:

          Gail,
          you can see a more accurate version of the Chaisson’s chart as fig.6 of this document:
          https://www.cfa.harvard.edu/~ejchaisson/reprints/Springer_complexity_(exobio)_final_review.pdf

          but I think the document you remember of is this one (or its earlier version):
          https://www.cfa.harvard.edu/~ejchaisson/reprints/EnergyRateDensity_II_galley_2011.pdf

          As Roddier notes, it’s not a simple exponential curve, but a super-exponential one. There is undeniably an acceleration, due to that our energy consumption modifies our environment, to which we must continually re-adapt, thus creating a self-reinforcing feedback-loop.
          There are theories about this acceleration, such as the STEM-compression theory (see http://www.accelerationwatch.com/mest.html), but I’m totally unable to judge of their validity. My conviction is that we won’t reach the next step of evolution because we can’t increase the energy supply by one order of magnitude this “next step” would require.

          • Christian says:

            I wonder two things on MEP

            1- Does astrophysicists believe Mankind’s culmination is also a cosmic culmination and the whole universe will start heating slower (Fred Hoyle doesn’t seems to buy on that)

            2- Is it there anything useful in the information side of MEP? I ask this because I understand much better energy flows (eg measured inkw) than info flows (eg. measured in ??)

            • Don Stewart says:

              Dear Christian
              Regarding information and brains. A few notes from Mobus and Kalton in Principles of Systems Science. They are discussing the complicated topic of ‘complexity’.

              The evolution of brain complexity shows direct correlation with complexity of behavior.

              Intelligence is another way of talking about complexity.

              End quotes.

              We know that the brain is a metabolically expensive organ. However, it may very well be worth the expense, as it may more than offset the cost by avoiding unintelligent physical work. Tom Sawyer, famously, used his intelligence to get the other boys to do his work for him. A human who understands how to use a lever can avoid a great deal of unintelligent work. And so on and so forth.

              If you have access to Mobus’ book, I suggest you take a look at pages 187 through 196, where the complexity of the brain is discussed.

              Don Stewart

            • Stefeun says:

              Christian,
              1- Joker. IMHO humanity is just a tiny dust in a corner of a random galaxy and our evolution not even a blip in the time-frame relative to the evolution of the whole universe. I don’t see how there could be any correlation.

              2- in my view, information is a particular arrangement of the matter, that gives it the possibility to replicate its feature onto another piece of matter. When it happens, the information is not lost for the original, but duplicated and therfore exists twice. Information is something you don’t lose when you give it.

              It thus allows twice the amount of energy to be dissipated. This was very important for life to develop, for example with the information contained in DNA (the genes).
              The process is similar for cultural information, which allows to increase the number of people sharing same knowledge (the memes), and much faster because you don’t have to wait the time required by the physical reproduction.

              Another interesting point is the tandem information/support. Michel Serres made an excellent conference about it (sorry, in French) in which he showed that the sudden accelerations in development of our civilisations was deeply depending on the efficiency of this tandem information and its support: oral, handwriting, printing, tele-everything, and now the internet that creates a virtual world out of space and time. Each of these steps had as a result to increase our energy consumption.

              Regarding the metric I would say it seems quite uneasy because you cannot use the same units depending on the support (number of words you pronounce, number of words written, number of bytes in a hard-disk) and it’s hard to evaluate what proportion of it is useful. Maybe it’s easier now with the -overwhelming- digital world, because you know the size of the memories and, more important, you can measure the flow of this digital information. It was around 4 Zettabytes in 2013, and expected to increase ten-fold (>40 Zb) before 2020, mostly due to development of the “internet of things” (connected objects). I don’ t think this will happen because it would require far too much energy

              This increase in speed of the transfer of information is also going with an externalization of our intellectual skills, mainly our memory (you don’t have to know it by heart because it’s written in the book! today it’s even worst: just google it!). This raises the disturbing question of who manages the contol? This externalization process increases dramatically our power, but it’s at the expense of our ability to control the situation.

            • Stefeun says:

              Christian,
              I forgot (probably because it’s beyond my understanding): there IS actually a link between information and entropy, theory developed in the 1940s by Mr Shannon:

              “Generally, “entropy” stands for “disorder” or uncertainty. The entropy we talk about here was introduced by Claude E. Shannon in his 1948 paper “A Mathematical Theory of Communication”.[1] We also call it Shannon entropy to distinguish from other occurrences of the term, which appears in various parts of physics in different forms. Shannon entropy provides an absolute limit on the best possible average length of lossless encoding or compression of any communication, assuming that[2] the communication may be represented as a sequence of independent and identically distributed random variables.”
              http://en.m.wikipedia.org/wiki/Shannon_entropy#Entropy_as_information_content

            • Jan Steinman says:

              “The entropy we talk about here was introduced by Claude E. Shannon in his 1948 paper “A Mathematical Theory of Communication”.[1] We also call it Shannon entropy to distinguish from other occurrences of the term…”

              Glad to see Shannon raised here, but information entropy is not the same as heat entropy. I admit I haven’t been following the thread well, but I suspect the discussion about entropy here has strictly been regarding so-called Shannon entropy.

              I believe it was Shannon who noted that any optimally encoded signal is indistinguishable from noise, unless you have the decoding key. This gives a civilization ~100 years or so in which to be discovered by alien life forms, after which, it just looks like so much noise.

              A corollary to Shannon’s postulate is Heinlein’s “Any sufficiently developed technology is indistinguishable from magic.” Go on a bus or through an airport and tell me all those people lovingly stroking their tiny screens are doing anything but magic worship.

            • Stefeun says:

              Jan,
              Thanks a lot for your link that helps me better understand what Shannon’s entropy is, without having to dig deep into unknown hard science theories.

              From the wikipedia article:
              (§ Equivalence of expressions): “The logarithm in the thermodynamic definition is the natural logarithm. It can be shown that the Gibbs entropy formula, with the natural logarithm, reproduces all of the properties of the macroscopic classical thermodynamics of Clausius.”
              So thermodynamical entropy is a particular case of the Shannon (or Gibbs, or informational) entropy. This is exactly what F.Roddier says on slide #16 of his 2dec2013 presentation linked below.

              Then on slide #17 he says that Landauer and Bennet have shown that it is impossible to erase a memory without generating some heat. That is also explained in detail in the wikipedia article at § Information is Physical, Landauer’s principle.
              Roddier says it means that informational entropy is a particular case of thermodynamical entropy. He therefore concludes: Informational entropy = Thermodynamical entropy (!)

              Even if this equality might be a little bit too daring (maybe not!), it clearly shows that there’s a deep similarity and deep coherence in that the amount of information favours the dissipation of energy.

            • Jan Steinman says:

              “the amount of information favours the dissipation of energy.”

              Which is also a consequence of panarchy theory, if you equate “information” with “connectedness.”

              I’m pretty firmly in the Panarchist camp. It doesn’t delve deeply into information theory, but it does manage to fractally explain the life-cycle of everything from sub-atomic particles to galaxy clusters. And its foundation comes from ecology, which I grok.

            • Stefeun says:

              Christian,
              Merci d’avoir posé la question!
              F.Roddier explains in the article #8 of his blog that the entropy is actually an information.
              I do not dare to paste its translation here, this thread is already too long. Here’s the link to the article in French:
              http://www.francois-roddier.fr/?m=200605

            • Christian says:

              Stef, c’est compliqué hein?

              “C’est l’information que l’on perd dans une transformation irréversible (quand l’information diminue l’entropie augmente)”

              This is surprising: info and entropy as inversely proportional!

              I guess it’s too much for me

            • Stefeun says:

              Christian,
              No, the basics really are not very complicated, I think the problem is due to that these concepts (energy and thermodynamics) aren’t familiar.
              Especially the entropy, which is somewhat counter-intuitive as it -roughly- measures the degree of disorder (some have tried to define a “neguentropy”; see Jan’s article and Roddier’s article #9).
              Another difficulty with entropy is that a local decrease (ie organisation, in information or another kind of dissipative structure) goes along with a global increase of entropy.

          • I think what I am thinking of was in a presentation by Roddier at this address: http://francois-roddier.fr/IAP.html The link doesn’t seem to work any more though.

            • Stefeun says:

              Roddier’s blog has had a big problem around summer, hacking or crash I don’t know exactly. Now it works again, but some links don’t seem to work any longer, unfortunately.
              Here’s another presentation, not as pleasant because it was for students engineers:
              http://www.afscet.asso.fr/msc/textes-2013/Roddier-2dec2013.pdf

            • kesar says:

              Very interesting materials. Thank you.
              It’s a pitty that it is still not translated into english, though.

            • This is one image from that presentation that caught my attention, apparently patterned after one by Erich Jantsch, in English.

              The self-organizing universe

              The point that become clear to me is that the things at the far right are made possible by humans’ use of external energy, first wood, and then fossil fuels. In particular, human brains would not have been possible without burning biomass. Human society, at our current level, would not be possible without fossil fuels. If we are reaching fossil fuel limits, then the ? would seem to indicate that we are at the end of the line.

  23. Pingback: Has the Dramatic Gas Price Drop Been Good or Bad? - Musings by Jumpin Jersey Mike

  24. VPK says:

    Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”:
    http://www.counterpunch.org/2014/12/16/the-oil-coup/

    and more:
    http://www.counterpunch.org/2014/12/12/will-falling-oil-prices-crash-the-markets/
    The Fed’s low rates and QE pushed down yields on corporate debt as investors gorged on junk thinking the Fed “had their back”. That made it easier for fly-by-night energy companies to borrow tons of money at historic low rates even though their business model might have been pretty shaky. Now that oil is cratering, investors are getting skittish which has pushed up rates making it harder for companies to refinance their debtload. That means a number of these companies going to go bust, which will create losses for the investors and pension funds that bought their debt in the form of financially-engineered products. The question is, is there enough of this financially-engineered gunk piled up on bank balance sheets to start the dominoes tumbling through the system like they did in 2008?….
    Washington’s strategy is seriously risky. There’s a good chance the plan could backfire and send stocks into freefall wiping out trillions in a flash. Then all the Fed’s work would amount to nothing.

    • B9K9 says:

      I surprised more people don’t ask a very basic question: why Russia?

      By now the multifaceted attack encompassing diplomatic, financial, economic and military thrusts has become common knowledge, yet no one seems to express any curiosity about motivation.

      One option is that the PTB are so utterly bored with life, that they have nothing better to do than engage in the game of kings. However, a more realistic answer is that they have the same exact information – and conclusions – that Gail presents here: the paradox of (real) finite resources vs a (man-made) debt-money system that demands continuous growth.

      Guess which version of reality will ultimately win out? But as long as there’s still life in the ‘old girl’, the name of the game is to keep the ball rolling, Since that’s the case, the US/EU really has no choice but to attempt to incorporate the last remaining available region into the global Ponzi if the USD reserve system is to survive.

      Once you know this simple calculus, you can front-run the sh!t out of fixed markets, because it’s not even binary 0 vs 1; rather, it’s must activate 1 or fail in the attempt.

      • interguru says:

        Everyone seems to overlook the Sunni Saudi’s animosity to Shiite Iran. The two countries are locked in a not-to-quiet war for influence in the Middle East. Iran needs oil at about $130 to balance it budget. Saudi Arabia needs about $40 ( correct me if I am wrong) What a better way to kick them in the butt than holding down the price.

        As a an added feature — Russia is backing Assad, another Shiite Saudi enemy.

      • Perhaps–but I don’t see much chance of success.

        • B9K9 says:

          Right now, all we’re seeing are ‘above the water line’ movements. So, as you say, the West has a tough row to hoe if all we’re going to do is pursue traditional power politics.

          But what about back-channel efforts? Hell, I betcha we’d even allow Putin to remain as leader, and Russia could keep Crimea and the Ukraine eastern provinces if Russia would just get fully on board and join the USD reserve system.

          How much could/would we cut them a slice of the pie for their full participation? Think about an operationally troubled company desperately seeking additional outside financing. How high do they go in terms of equity participation is entirely dependent on their relative strength.

          If the think-tank game players are seeing indications that this is going to turn out to be a zero-sum game with possible down-side risks, they may begin to advise sweetening the pot to cut the deal that is needed.

          Bottom line is I think the West – and Russia – announce a honeymoon reconciliation, at which point major global markets explode in valuation. The alternative is the real thing – now, who really wants that on either side? Russia just wants respect and standing when it comes to $USD decisions.

          • Wee Willy Winky says:

            I am sure that the US has offered Putin this deal but he is not interested.

            I believe that Putin and China both believe that the US has nothing to offer because the US is approaching failed nation status.

            They have both decided, unequivocally, that they will not be dictated to by the US any longer as evidenced by the fact that they are ditching the reserve currency.

            Such a decision would not be taken lightly because they would know that the US would fight like a cornered rat.

            But the decision has definitely been made.

            The Chinese and Russians have determined that the US is weak and unable to enforce global rule any longer and they are moving their chess pieces around with the understanding that the US is check mated.

            I cannot help concluded that they believe they will come out winners in this. Such decisions are not taken unless one is very confident of the outcome.

            Also consider that they would have no choice in making this decision because the US is without question drowning. There is no point hanging onto a drowning man. You are better off pushing him under and trying to stay afloat.

            And if staying afloat means hanging onto a partner who is weak but not drowning, then you do that. And down the road maybe you push that partner’s head under the water too.

            Politics are irrelevant. This is about survival in a zero sum game. You are either the winner, or the loser. There is nothing in between.

            • InAlaska says:

              Wee Willy Winky,
              What planet are you living on? China and Russia can barely manage their own currencies let alone Russia dictating anything to anybody except perhaps how much they are willing to discount their natural gas to Europe to avoid a default and feed their masses. Do you read the news? Just what “chess pieces” are the Russians moving around? Just because you wish something to be true does not make it so.

            • Wee Willy Winky says:

              I agreed with you. China and Russia (even if they wanted to) are in no position to replace the USD with one of their currencies.

              Perhaps you might be so kind as to address my question.

              Why is it not OK for the Chinese and Russians to trade energy in their own currencies?

            • Interguru says:

              As you were saying about the secret shadow government

            • In a world economy, we need all of the players functioning at top level to keep the economy operating. From this point of view, the conflict makes no sense. Sanctions and counter-sanctions act to pull the system down. It is not exactly a zero sum game. If countries divide up the total, the sum of the pieces is less than what we started with.

          • InAlaska says:

            I would like to point out to those on this site who have been smugly proclaiming that the Russians were conspiring with the Chinese to create a new reserve currency, that they are clearly wrong. The Russians can’t even defend their own currency against massive and rapid devaluation, let alone create a new one to supplant the USD. All of that gold that Russia has been building up is going to be drained away as the country desperately tries to pay its bills, avoid default, buy food. They’ll sell as much natural gas to Europe as it wants to avoid a ruble meltdown. What can you expect out of a kleptocracy whose economy is entirely dependent on oil exports. Self accountability is important. Admit you had it wrong and move on to your next conspiratorial theory.

            • Wee Willy Winky says:

              i was not aware that Russia was attempting to establish the Rouble as the new reserve currency. Or the Chinese the Yuan.

              That is absolutely impossible.

              The Yuan is not even a convertible currency at this time so how could it possibly be the reserve currency? And Russia does not have the means to enforce the Rouble as a reserve currency.

              My understanding was that they were refusing to trade oil and gas in USD

              Nothing more. Nothing less.

              Is there a reason why the Russians and Chinese should not be permitted to trade energy using whichever currency they want?

              If so, what is that reason?

              Surely the US as the bastion of freedom and defender of democracy across the world would have no problem with countries doing business in the currencies of their choice?

            • InAlaska says:

              Wee Willy Winky
              From Forbes: “Several people in the discussions noted that oil is priced in dollars. That fact has no importance at all. Although world petroleum trades use dollars to show the price per barrel, you can buy oil in any currency. Simply call a trader and say that you have Euro, yen, pounds or pesos that you would like to spend on oil. Either the trader will take your currency at an appropriate exchange rate, or you can have your bank do an instant conversion to dollars and then immediately transfer the dollars to the oil seller. You need only own dollars for a second or two, if that.”

            • Wee Willy Winky says:

              Strange.

              The US goes to a lot of trouble to make sure countries trade oil in USD, including initiating wars and hanging those who try to trade oil in other currencies.

              Why would that be?

              The first country to actually make the switch was a very important oil exporter indeed: Iraq, in November 20006 ,7 . Before the war in Iraq began, some observers, myself included, argued that this might well be a major reason for the US desire to invade and the strong Franco-German opposition to the invasion8 ,9 .

              Corroborating evidence included the apparent influence which loyalty (or lack thereof) to the dollar seemed to have on the US attitude towards other OPEC members. Iran had been talking of selling its own oil for euros6 ,10 and was subsequently included in George Bush’s ‘axis of evil’. Venezuela, another important oil exporter, had started bartering some of its oil, thus avoiding the use of the dollar, and was encouraging OPEC to do likewise11 – and the US was widely suspected in having played a part in the attempted coup against the Venezuelan president, Hugo Chavez.

              Fineman’s White House sources would appear to have been reliable as that is precisely what has happened: when Iraqi oil exports resumed in June of last year, it was announced that payment would be in dollars only12 13 . It was also decided that the billions of Iraqi euros which were being held in a euro account, controlled by the UN under the oil-for-food programme, were to be transferred into the Development Fund for Iraq, a dollar account controlled by the US13 14 15 .

              http://www.feasta.org/documents/review2/nunan.htm

              The Tremendous Importance of Oil in the Dollar’s Strength

              Crude oil is in fact the most traded commodity in the World. Until several years ago, every country needed US dollars to buy oil. Currently, an increasing number of major oil sellers have been quitting the usage of dollars.

              The obvious result is a decrease of demand for the US dollar. This will eventually fatally weaken the American currency.

              http://www.primevalues.org/market-watch/death-petrodollar-end-us-dollar.htm#.VJFUjHsmkQs

              The reason that the US is at odds with Russia is because like Saddam, Russia with it’s Chinese partner are in the process of rejecting the Petro Dollar.

              The US cannot allow that because that is a stake to the heart of American empire.

              The mainstream media is all talk. Look at actions not words.

              Any government that has attempted to trade oil in anything but USD was targeted for invasion and overthrow.

              And rightly so because I want my side to win this battle. I do not want the Chinese and/or the Russians to win because then I would be the loser.

              And the loser is meek and ends up in the gutter with nothing.

              Invent lies to invade places like Iraq and Libya and Syria. Support neo Nazis in Ukraine if they will help us to get rid of Putin. Shoot down airliners and blame Putin. Kill babies in Iraq if necessary.

              Do anything to survive. Anything at all, no matter how vile.

              Because they would do it to us without a second thought, given the chance.

              And please continue to use the corporate controlled media to blast out lies to the masses convincing them that we, as good Christians, are helping the world with our vile actions. Make certain that they never understand that we are acting like the worse gangsters because we have no choice. Because they would never understand that because they have conditioned to believe that we are ‘good’.

              And make sure to blame atrocities like My Lai, Abu Ghraib and the institutionalized torture ordered from the top echelons of our government on rogue elements in the military. We cannot have the proles begin to question our means to this critical end. And if anyone does question, they must be stamped on quickly and harshly as the Judas Iscariots that they are.

              Thank god we have leaders who understand this. Because if those who protest these actions got their way, we would be the ones living in filth and misery.

              Make no mistake about that.

              I have answered my own question.

            • I would appreciate toning down this rhetoric.

              Regardless of what we may have done in the past with respect to keeping the Petrodollar from failing, isn’t it failing right now, partly because the dollar amount of the US oil-related deficit is shrinking badly because of falling oil imports and the falling price of oil, and partly because other currencies are sinking badly with respect to the dollar? I understood that a major reason for the Petrodollar recycling was to keep other currencies from falling. This is happening anyhow, at least partly because other countries are doing QE and the US is not. Also, the “flight to safety,” and the fact that other countries are seeing deflation, so yields are negative. So the benefits of Petrodollar recycling have been lost, whether or not the Petrodollar itself has been lost.

            • That works only if banks are doing the conversion. If they have stopped trading in Rubles or some other currency, it becomes a problem.

            • I personally don’t think, “Self accountability is important.” We all put out our ideas. Some will prove to be right. Some will prove to be not as correct, at least in the time-frame we look at. Having a surplus of ideas is useful; we can discuss them that way.

              Your remark reminds me of unhappy families who are always trying to place blame somewhere. We need to forgive and move on. That is an important lesson that can be learned many ways–practical experience, family traditions, or religious teachings. Somehow, we all need to learn this, and move on.

            • alturium says:

              It will interesting to see how the foreign reserves and/or gold that Russia has built will help in the current situation. I know many have been promoting a conspiracy theory that the West wants to invade or subjugate Russian, I am now wondering if they may be right. If that is the goal of the PTB, then it is completely stupid. Hurting Russia will only hurt the global economy.

              The story in the MSM about how Russia “Invaded” Crimea is ridiculous. Expecting Russia to give up warm water access via the Black Sea is wantonly ridiculous. It would be like the US giving up all West Coast ports (San Diego, Puget, etc). As I understand it, Russia already had 25K troops in Crimea per the agreement with Ukraine. And then, suddenly, they had invaded Crimea (!). I worry that that the stepped up NATO presence is incentive to provoke a response. Or wait until Russian makes a mistake (such as Spain/Cuba: “Remember the Maine” type of incident).

              I would like to point out that Putin does not have the moral baggage of the USSR. If one looked at a map of Russia today versus the USSR, you could not help but conclude that the Russians have given up lot of “buffer” zones. But Russian “expansionism” continues to play a role as Russian continues to influence events. And a dictator continues to reign in Russia.

              I believe we have entered a war of attrition between the oil exporting nations, the Western economies (Japan gets thrown into that group), and Russia. A recent writer stated that the oil traders are reacting to the anticipation of the global slowdown and thus the decline of oil demand (as Gail has discussed on many occasions). This would make sense to me and ties into what Gail has been saying for some time.

              This is madness. It really is.

            • It is indeed madness. It is sort of like watching a domino game, in which the dominoes stand on end and can fall in any of several directions, and in any of several timeframes. We know that some dominoes will fall over, and knock over some others as well, but we don’t know when or where.

            • interguru says:

              Russia has a legit claim to Crimea, but I am not sure a unilateral invasion is the way to carry it out. They have no claim to foment a rebellion in Eastern Ukraine.

          • I hope you are right, but it is hard to see right now.

      • Wee Willy Winky says:

        Yes of course, the USD reserve currency must remain in play at all costs. Any entity that dares challenge that must be stopped.

        Control of the world is exercised by those who have the power to print the reserve currency. That would be the Federal Reserve, a private company.

        Putin is challenging the most powerful people on the planet. And they of course will not have that.

        As we have seen, they have ordered their plebes to do whatever it takes to destroy the usurper including launching a chemical weapon into women and children in Syria, supporting a neo nazi government in Ukraine after overthrowing an elected government, taking down an airliner and blaming Putin.

        They will do what they have to. They may even be willing to attempt a tactical nuclear strike on Russia if push comes to shove.

        The golden chalice is at stake.

        • InAlaska says:

          Wee Willy,
          My comments about being wrong about USD as the reserve currency wasn’t aimed particularly at you. Rather, this has been an ongoing discussion in several posts going back quite a few months. I have been defending the idea that there is no way that any other country has the means to supplant the USD as a reserve currency. There was a lot of misinformation being flung around and although I love a good conspiracy theory, that one just didn’t hold water. Gail’s comments are right on about the strength of the USD due to our end to QE whilst others are just beginning. Flight to safety is another big factor. Also, as the best house in a bad neighborhood, the world needs to trust in its reserve currency and the US is the only real game in town. Who trusts China or Russia to act responsibly? Not many people are going to put their faith in other currencies at this juncture in world history. Sure, you can buy oil in other currencies, but the seller has to want to accept payment in those currencies. I also agree strongly with Gail, that the only right course of action is to work together. Sanctions and all the rest of the brinksmanship going on between East and West is only working to weaken the system more quickly and bring the collapse down on our heads all the sooner. Enough said. Its fascinating to watch these events unfold in real time.

          • Wee Willy Winky says:

            What does it matter if anyone trusts China and Russia?

            What matters is that China and Russia have, for whatever reason, decided to no longer trade energy in USD.

            There is no golden rule that the USD needs to be the reserve currency. Nothing is set in stone.

            If they are unable to enforce this then just as with the British Pound, it will be swept away and something will replace it.

            There has been talk of a basket of currencies.

            Obviously the US does not want this to happen, that the USD might no longer be the reserve currency is unthinkable, to the top guys in the US.

            And obviously it is not unthinkable to the guys at the top levels in Russia and China that the USD could lose reserve status.

            That is all that matters.

            And that is what the battle is over. The US will not allow the Russians and the Chinese to upset this apple cart, and the fists are flying.

            I think this is all a tempest in a teapot. We all know that the real storm is approaching hurricane status.

    • Bandits says:

      “Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil”
      This is so wrong its a joke. SA was producing flat out on the rise up in price and they continued to produce flat out during the decline. The USA and Canada INCREASED production NOT SA. We are experiencing deflation, a burst fracking bubble. It very well could be a runaway deflation, self reinforcing with feedback loops. Like a runaway train, throwing yourself on the tracks is not going to slow it down. I enjoy being wrong in my doomer conclusions though, especially in this situation. Whatever tricks they (PTB) can conjure up to avert the fall will be appreciated.

      • I agree with you. It was the US that increased production, not the Saudis. Libya’s production bounced up a bit, perhaps increasing the OPEC total a bit, but not very much. The current version of OPEC’s estimate of OPEC oil production shows September 2014 as its high month, with production down in October and November. In November, it was 30,053,000, which is barely over the 30 million target it had set.

        • bandits101 says:

          Yes and the Saudi exports are declining because their internal consumption is/was increasing. SA needs every buck they can get. I bet beads of sweat are forming on the Sheiks brow right now but of course every exporter would be the same. They need the world’s economy to hold together to stop the rot but IMO this decline is out of anyone’s direct control. It may run out of momentum as either the price decline stops or demand increases. At the moment they are feeding off each other.

      • InAlaska says:

        Bandits,
        Agreed. This is just not the way the world works. Saudi Arabia is not a puppet state of the US that does our bidding at a moment’s notice.

        • InAlaska says:

          Bandits,
          I think what you say has truth to it. Although, I wouldn’t bet that SA is sweating yet. They have hundreds of billions set aside as a war chest for just this sort of confrontation. They can pay their bills as long as oil stays above $40.

          • Christian says:

            Not sweating in SA, Kuwait nor UAE. These three little countries will sweat the last: they are still burning oil to keep a cool breeze in open halls. They know they dollar savings can result devaluated in the middle term and so they prefer using them to secure oiligolopoly. This seems to be better described as a case of synergy rather than of concerted position.

            I agree it’s each one on his own, no more alliances and less and less synergies. To some extent, and this is more evident in the oil market, the contraction of the global pie will hit heavier those having less as it happens within countries. At least while there is such thing as a “global pie”.

            • Bandits says:

              The vastly over populated desert kingdoms can’t eat oil. They need globalization and someone to want their oil. The cascading affect of lower oil prices, tanking economies and currencies is not ideal………Yemen is just around the corner. Then again air conditioning might be all they need.

            • Yemen needs a whole lot, a great deal more than air conditioning. Their oil supply has been declining, and their population is surprisingly high. Water is a problem, IIRC.

      • alturium says:

        “Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil”
        I have become nauseated from reading this in the MSM…

        • kesar says:

          Exactly. On this level of power everyone is on his own. The Saudis are trying to play their own game. Sometimes they have common interest and play along Washington/Pentagon’s plan. Sometimes they have contradictory interests and Saudis are using they power (oil extraction) to achieve their own local or regional goals.
          Killing big part of US/UK oil business is not very smart move for the West. The same goes with Russia’s resources. The world economy needs all this energy in order to keep BAU alive. If US was behind this move, then the authors are not very smart people after all.

  25. Interguru says:

    Low Oil Prices Could Point To A More Serious Problem

    But another reason oil prices have slid so much is weakness in demand for the product, which may be related to a slowdown of overall world economic growth. Here I comment on the importance of that second factor.

    For example, the price of copper fell from $3.27/pound to $2.93, a 10% drop over those same six months. This of course has nothing to do with the success of people in getting more oil out of rocks in Texas. Softness in demand for commodities like copper and oil may be one indicator of new weakness in the world economy.

    With some heavy math the author gets:

    I then used the coefficients from that historical relation to see how much of the drop in oil prices since this summer we would have expected to observe, given the observed drop in copper prices and the 10-year yield and the rise in the value of the dollar. [snip]…. Even if we knew nothing on the production side of the oil market, we would have anticipated the price of oil to have fallen from $105/barrel in June to $85 dollars today on the basis of these other three potential indicators of world economic activity

    http://oilprice.com/Energy/Oil-Prices/Low-Oil-Prices-Could-Point-To-A-More-Serious-Problem.html

    • This article is by James Hamilton, a well-known economist at University of California San Diego. I have quoted him quite a few times.

      What he is showing is that based solely on (1) the drop in other commodity prices as represented by the drop in copper price, (2) the fall in 10 year interest rates and (3) the rise in the dollar relative to other currencies, we would have expected the oil price to fall to $85 a barrel.

      Item (1) is directly related to slowing world economic growth. Item (2) and (3) are related to the US not doing QE, while other countries are. I would argue that once this pattern gets started, it starts are self-reinforcing loop, because of debt related problems–namely debt shrinkage. This causes oil prices to fall further.

      • Rodster says:

        Things are beginning to unravel at an accelerated pace.

        “The Russian Ruble Is Hereby Halted Until Further Notice”
        http://www.zerohedge.com/news/2014-12-16/russian-ruble-hereby-halted-until-further-notice#comments

        • I can’t seem to get the zero hedge page.[Later: It does work now.] Similar pages shows something that says,

          Dear Client,

          Please be advised that most Western banks have stopped pricing USD/RUB. As such, FSCM can no longer offer this instrument to our clients and will begin closing any existing client trades in USD/RUB at Noon EST, December 16, 2014.

          The text says:

          Earlier, we reported that various currency brokers such as FXCM and FxPro, would – as a result of the soaring liquidity in the USDRUB pair – suspend trading in the Russian Ruble (while other merely hiked margins to ridiculous levels). It appears things have escalated again, and as FXCM just reported, instead of just politely advising clients not to open new USDRUB position tomorrow, it has advised anyone long, or short, the USDRUB that their positions will be forcibly shut in moments.

          The text refers to Zero Hedge, but I don’t get an article.

          I am sure this creates problems for derivative trading.

          • Rodster says:

            And here you go !

            “Outspooking The Lehman Apocalypse: Could A Russian Default Be In The Cards?”
            http://www.zerohedge.com/news/2014-12-16/outspooking-lehman-apocalypse-could-russian-default-be-cards

          • Rodster says:

            As Gail has mentioned many times. This is what can happen when the price of oil goes too low !

            “Total Chaos: Massive Market Moves Spark Selling-Panic Into Close”
            http://www.zerohedge.com/news/2014-12-16/total-chaos-massive-market-moves-spark-selling-panic-close

            • Wee Willy Winky says:

              After the single worst day in Russia’s nine-month-old financial crisis, the fallout is spreading across global markets.

              Pacific Investment Management Co. is facing mounting losses on its Russian bond holdings; almost every bullish ruble option contract registered in the U.S. has been made worthless; and foreign-exchange brokers in New York and London told clients they’re no longer taking ruble trades. Sergey Shvetsov, a first deputy central bank governor, expressed astonishment at the scope of the collapse during a conference in Moscow.

              “We couldn’t imagine what’s happening in our worst nightmare even a year ago,” Shvetsov, who oversees financial markets at Bank of Russia, said yesterday. He said the surprise interest-rate increase in the middle of the night, a 6.5 percentage-point move that failed to stem the run on the ruble yesterday, was a choice between a “very bad” option and a “very, very bad” option.

              Pimco’s $3.3 billion Emerging Markets Bond Fund has been one of the hardest hit. It held $803 million of Russian corporate and sovereign bonds at the end of September, equal to 21 percent of total assets, an amount that’s more than double that of the benchmark it tracks, according to data compiled by Bloomberg. The fund has lost 7.9 percent in the past month, trailing 95 percent of its peers.

              http://www.bloomberg.com/news/2014-12-16/russia-crisis-hits-pimco-fund-wipes-out-options-as-ruble-sinks.html

              The US is attempting to ruin Russia in order to enact regime change, or at least to convince Putin not to dump the petro dollar.

              Who blinks first?

              If the US continues on this course, and Putin fails to blink, is this not a bigger fatter Lehman moment approaching?

              If Greece could not be allowed to default due to the knock on effects on the fragile global banking system, what happens if a very large economy defaults on its debt?

              The global banking system is much more fragile than in 2008, debt loads are far higher, and the Central Banks are already backed against the wall.

            • A key to our problem is the fact that the downslide is not just in the emerging market bonds, but also in ETFs that mirror the loss, and spread it to others.

              Pimco’s $3.3 billion Emerging Markets Bond Fund has been one of the hardest hit. It held $803 million of Russian corporate and sovereign bonds at the end of September, equal to 21 percent of total assets, an amount that’s more than double that of the benchmark it tracks, according to data compiled by Bloomberg.[Emphasis added.]

              Then there are derivative that investors buy, to allegedly protect themselves from price changes of various sorts–in oil or in USD/RUB. It is sort of like a video game played on the sidelines, betting on what will happen, with bets piled high on other debts. Something is likely to fail. Banks are involved in this practice, but the amount of insurance protection available from the FDIC is fairly limited, unless the government steps in and simply creates more money to replace all of the failed derivatives–something it claims it won’t do this time. A bank bail-in by depositors would be a big problem–not enough to go around, so some (or all) depositors could get big haircuts.

  26. kesar says:

    More than $150 bln of oil projects face the axe in 2015
    http://www.reuters.com/article/2014/12/05/oil-investment-idUSL6N0TO47H20141205

  27. Wee Willy Winky says:

    Inflation vs Deflation

    Mr Congdon’s claim is a self-evident truism. Central banks can always create inflation if they try hard enough. As Milton Friedman said, they can print bundles of notes and drop from them helicopters. The modern variant might be a $100,000 electronic transfer into the bank account of every citizen. That would most assuredly create inflation.

    I don’t see how Prof Krugman can refute this, though I suspect that he will deftly change the goal posts by stating that this is not monetary policy. To anticipate this counter-attack, let me state in advance that the English language does not belong to him. It is monetary policy. It is certainly not interest rate policy.

    Former Fed chair Ben Bernanke – no fool he – spelled out the powers of a central bank in his prophetic speech on deflation in 2002.

    “Sufficient injections of money will ultimately always reverse a deflation. Under a fiat money system, a government should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.”

    http://www.telegraph.co.uk/finance/economics/11294510/Ambrose-Evans-Pritchard-Why-Paul-Krugman-is-wrong.html

  28. Creedon says:

    In the eternal debate as to whether the PTB control all markets, know what is going on, are manipulating events, ect, my guess is that they are not controlling the current drop in the price of oil; that it is worrying them and that they are preparing to control the damage, which means they will take from us. http://peakoil.com/publicpolicy/the-global-bankers-coup-bail-in-and-the-shadowy-financial-stability-board

  29. Gerg Evol says:

    What can the citizens of Australia expect when 92% of its liquid fuels are imported. When oil supply stops after a debt bubble collapse then the country will effectively starve as trucks won’t be able to supply food to the supermarkets

    • Each country has its own version of the same problem. Japan imports virtually all its fuels. No wonder its finances are in terrible shape! The US is for now doing better than most, but it depends on the rest of the world as well.

    • They have tons of coal. If they still have old carbureted gasoline trucks around, or even better propane so they have hardened valves, they may be able to rig them up to gassify the coal, then burn the carbon monoxide / hydrogen gas blend in the engine. FEMA has a good manual from the 1980s about converting trucks and tractors to run on gassified wood in case of a prolonged fuel crisis, PDF is available free online. Will keep an eye out for it when I have some time to look.

  30. Don Stewart says:

    Dear Gail and All
    Last night I was at a holiday party. I like to look at the books people have. I was looking at one section of books, and saw an interesting one. The hostess said ‘take it, I bought a box of books that were the right color’.

    The book is Folk Plays of Eastern Carolina. The author is Bernice Kelly Harris. Folk plays were Depression era plays written by amateurs and designed to be performed by amateurs in country schools and churches and granges or out in the open.

    There are some interesting colloquial expressions used. For example, the next time you are listening to a politician talk, these two may be useful:

    LOGIC: A lot of talk
    SUGAR TIT: Sugar in a piece of cloth for pacifying babies

    Don Stewart

  31. Quitollis says:

    “There are some very evil creatures in positions of great power in this nation.”

    Dear Creedon and all, you have got me thinking about this.

    I am considering how I feel about the concepts of good and evil. I think that the Good is probably a synonym of Being (that which is) and as such I tend to see the Good as a subjective spin on Being. On the one hand there is That which is and there is How I feel about it. I tend to agree with Aristotle that Perfection, the full development of the natural tendencies of the creature is what we are trying to get at with the concept of the Good. But even so, I still tend to think that the Good is a subjective spin on Being, even when considered as Perfection: it is how I feel about Perfection (per/fect = fully made/ developed). But if how I feel about Perfection is an expression of my Will and that too is subject to natural tendency, then does it come down to how I feel about how I feel about the Good? So what is going on there? I suspect that the “death of God” a la FN alludes to a now empty reference point beyond the self and the world: a perspective or dimension of meaning has been vacated and yet remains there empty. This seems to be the “new nihilism” that FN talks about, on the one hand the loss of meaning and perhaps on the other the equal distribution of meaning across all of Being. All is either equally good or else good is equally alien to everything. All becomes the morally indistinguishable One. I perhaps sense within myself the great European crisis of which FN wrote, a scenario that could be catastrophic and which also holds great possibilities for the future, new (or a new spin on old) systems of value.

    I think that it is clear that most people believe whatever the society in which they live tells them to believe. Someone born in an Islamic society is almost certain to think and feel like a muslim and someone born into a liberal society is likely to think and feel like a liberal. There is a documentary film late tonight (Mon 15) on UK TV that explores how people get their ideas from their society, which may be of some interest. You can download it off TPB https://oldpiratebay.org/search.php?q=The+Pervert%27s+Guide+to+Ideology+&=on I have not seen it yet but it sounds quite promising. I can only hope that ZIzek is clear enough to admit that liberal values are just as much a product of the society and that liberal media plays a propaganda role just as important as in Russia or Germany.

    The Pervert’s Guide to Ideology (2012)
    Category Documentary
    Certificate 15
    Channel 4 1:25am Tue 16 Dec
    Cultural theorist and philosopher Slavoj Zizek discusses the external forces that shape people’s actions and their outlook on the world. He also examines a range of famous movies, from modern Hollywood blockbusters to Nazi and Soviet propaganda, and uncovers how they reinforce the prevailing ideologies of the cultures that created them
    Director: Sophie Fiennes

    • Wee Willy Winky says:

      An antelope births a calf.

      A lion pounces on the calf and devours it before the hyena can eat it.

      Is the lion evil?

      If the lion does not eat it out of pity for the mother, the lion may starve and die.

      Man is an animal, no different than the lion. Each one of us competes for resources with all other animals on the earth (we have easily won that fight) as well as with each other.

      If you or your tribe doesn’t take then others will. And this is a zero sum game.

      There is no evil nor is there good. There is only survival.

      If one wants to use the meaningless terms of good and evil (religion-based terms) then humans surely would qualify as extremely evil.

      • Jan Steinman says:

        If the lion killed many more antelope than it needed, and got fat and died of a heart attack while surrounded by rotting dead antelope, would that be “evil?”

        Supposedly, our big brains give us more qualities like compassion, discretion, and the ability to see an unhealthy future path and to make appropriate corrections. If we have these abilities, and do not use them, is that “evil?”

        We created religion and government as a way of curbing blatant excess, as a way to moderate the urge to take more than is needed, as a way of seeing that the weak are protected. If religion and government are instead used to enrich the richest and to deny the poorest, is that “evil?”

        I sometimes fall into your trap. When I find turds in the water buckets, I tell my goats, “Crapping in your drinking water — what do you think you are, humans?” When there’s a bucket of feed untouched, and three goats are fighting over a different bucket, it’s “Fighting over resources when there’s plenty — what do you think you are, humans?”

        In the end, perhaps you’re right, and there is no real difference between humans and yeast cells, both of which seem destined to consume all their resources and die in their own excrement.

        (After doubling each day for 13 days, one yeast cell said to another, “What shortage? There,s half the sugar still out there!” The next day I scraped their dead bodies from the bottom of the bucket and fed them to the chickens.)

        • Quitollis says:

          Dear Jan, man is certainly an animal, supposedly a rational animal. Thus it is natural that we should use our brains to achieve sustainable circumstances toward our survival, enjoyment and prosperity. For these are our natural ends, toward which we naturally tend. Our existence is rational only in the sense that we naturally tend toward it.

          The Good then is our natural good. We might say that Nature is God in the sense that it gives us natural tendencies and thus provides and delimits the Good. If we are “healthy” then we will naturally will and attain the good, circumstances allowing. We are degenerate if we do not rationally will the natural good, we make bad choices or we are in some sense incapable of getting the good.

          From a secular perspective one might propose the continued improvement and enjoyment of the race or species generation after generation as the end toward we naturally tend. So sustainability is clearly rational. By the same token, compassion is more controversial in so far as it might mitigate selective pressures, degenerates the breed and so lessen the long term chances of the survival, enjoyment and prosperity of the race.

          Compassion however can also contribute to the survival of the breed in a positive way. Society must be wise in its use of compassion. Perhaps then we should save and care for the wretched but discourage them from breeding, problem wisely solved.

          We can define the Good in general as whatever we naturally tend toward, the proper object of the will, in so far as it contributes to survival, enjoyment and prosperity. It is impossible to will evil, we always will the good under some aspect, the question is whether we rationally choose the right good, all things considered.

          Thus we might choose to indulge heroin in so far as it gives us pleasure, which is a good, but it is irrational if we disregard the long term effects on our families, relationships and career, which may be lost goods and the source of evil. The Epicureans argued that we should rationally maximise pleasure while minimising pain, by way of simple and natural pleasures enjoyed in moderation.

          The rational society then is one that maximises the good of men in a sustainable way. It renders men virtuous, makes them capable of good choices, the full development of their natural faculties and improves the breed generation after generation. How that is done is of course controversial.

          Arguably we are already a degenerate breed, incapable of collectively achieving the good in a sustainable way. The explanation would be controversial and we might suggest issues like long misdirected religious tendencies or bad breeding under industrialism, that we have bred ourselves as docile social sheep (citizens, workers) rather than as thinkers, but there is also the question of capitalism, a destructive system that has its own logic and is arguably more or less out of control. I would not claim to be able to disentangle the relative force of the various factors, genetic and social, both are issues. QT

          • Wee Willy Winky says:

            Are we not ‘good’ only when there are unlimited resources or at least enough resources to satisfy a given population?

            If there are 50 people in a restaurant and all have the means to purchase a pizza and there are enough pizzas available, they will be ‘good’

            But if there are 50 people in a room and only one has the means to purchase a pizza, and the others have not eaten in 3 days, they will be ‘evil’

            I would argue that we are no different than other animals. Throw a piece of meat into a pack of hungry dogs and see what happens.

            Resources are of course not unlimited so we are constantly engaged in battles to secure limited resources for ourselves or our countries.

            We in the west see ourselves as ‘good’ and ‘civil’ because we generally do not have to engage in ‘evil’ behaviours because we have an abundance of food and other resources.

            But make no mistake, ‘evil’ was involved in creating this ‘civil society’ that we live in because our leaders and our armies have made us the winners in the grab for limited global resources.

            Many of us complain about the actions of our governments around the world, but our leaders know how fickle we are.

            They know that if they pulled the armies back and tried a gentler foreign policy that would mean we no longer enjoy the resource windfall which would mean a big drop in our standards of living.

            And that the public would be rolling out the gallows for them.

            We are inherently ‘evil’ because that is what it takes to survive.

            All of this talk about ‘good’ vs ‘evil’ is rather silly.

            The ‘good’, or shall we say meek, inherit nothing more than the slums and gutters of the third world. Otherwise known as the losing team.

            I can see how this outlook would be distasteful to many, it is distasteful to me.

            But we are animals and we are governed by the same laws of the jungle. We are no different than the lion tearing the antelope calf to pieces. If he doesn’t take the easy kills, another animal will, and he may starve because of his kindness.

            • I think you are mostly right. The reason we have had most of the wars that we have is lack of resources. The fact that we have not had world wars since World War II is because the abundance permitted by fossil fuels made cooperation more advantageous. When we ran short of resources in the more developed “West,” we turned to the Asia-Pacific region, with its abundance of un-used coal and large numbers of potential. Now that growth in that region is slowing, the world as a whole cannot keep growing fast enough to keep the debt-based system that is essential for commodity extraction going.

          • I like your observation:

            The rational society then is one that maximises the good of men in a sustainable way. It renders men virtuous, makes them capable of good choices, the full development of their natural faculties and improves the breed generation after generation.

            Co-operation is helpful in many situations. Sharing with others is helpful, if the well-to-do have extra and the poor are small enough in number that this sharing makes a dent in the poverty problem. More can often be accomplished by working together than by fighting.

  32. Don Stewart says:

    Dear Gail and All
    See Ellen Brown’s article on the bail-ins. She mentions the price of oil.
    http://www.resilience.org/stories/2014-12-15/the-global-bankers-coup-bail-in-and-the-shadowy-financial-stability-board

    The most satisfying way to look at the action of the Congress and the President is Mark Twain’s saying that ‘the only native American criminal class is the politicians’.

    But another explanation is that the Banks simply explained that we are about to have a Lehman Moment in terms of the derivatives attached to oil prices and the value of the currencies of the oil exporting countries. That would be some tens of trillions of dollars.

    I don’t think Congress people and the President are stupid enough to think that they ‘solved’ anything in the last 6 years. So they faced the prospect of a Christmas Meltdown of the global financial system. To calm things, I suppose the notion of taxpayer backup makes some sense. I guess, in reality, that means that the Federal Reserve will print enough money to keep everything moving.

    Hide your gold under the big oak tree. Draw a map, and send it to me for safekeeping.

    Don Stewart

    • Thanks for the link. I expect that it is easy for the G20 to assume what they are doing will fix a problem, when it simply moves the problem to different players in the world economy.

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  34. Stefeun says:

    I’d like to come back on this article someone linked to earlier in this thread:
    A New Physics Theory of Life
    Jeremy England, a 31-year-old physicist at MIT, thinks he has found the underlying physics driving the origin and evolution of life.
    https://www.quantamagazine.org/20140122-a-new-physics-theory-of-life/

    Although it’s a very good article and I highly recommend reading it, I was troubled by the word “new”. In the comments (where many interesting links can be found), I could notice that I was not alone; see eg Charles Hall’s comment (quite early in the thread):
    “I agree with the many responders that these ideas are not new at all (such as I can tell), including to this systems ecologist. Indeed Ecologist(s) Ramon Margalef discussed this and so did Howard Odum in a way that is far more satisfying to me (although perhaps not as elegantly written as some). Life does not dissipate energy just to do that; it is a necessary requirement for building structure, capturing more energy than that required for maintaining that energy and for energy acquisition, and propelling one’s genes into the future. (“Evolution is an existential game, the object of which is to keep playing”: Ecologist L B Slobodkin). Hurricanes too feed on the free energy of warm water to maintain structure which can capture more energy in a positive feedback. These are very old ideas. There continues to be confusion between mathematical and scientific rigor. They are (generally) different issues. Newton and Maxwell were lucky: The rest of us have to struggle with the more mathematically recalictrant leftovers.”

    Karo Michaelian (author of this paper: http://www.earth-syst-dynam.net/2/37/2011/esd-2-37-2011.html) also made an interesting comment (https://www.quantamagazine.org/20140122-a-new-physics-theory-of-life/#comment-60462) in which he says:
    “England has provided a tentative statistical mechanics version of dissipative structuring, but a statistical version of a general principle concerning entropy production rates, rather than entropy, is what is really needed. Here there are earlier statistical results which do consider entropy production rates, e.g. R. Dewar, J. Phys. A, 36, 631-641, 2003, although the verdict is still out on the validity of these results.”

    Ilya Prigogine’s and Roderick Dewar’s works are the most important pillars on which François Roddier has built up his theory, extending this MEP principle (Maximum Entropy Production) to more complex structures such as human societies and economies (with help of Frederick Soddy for the economy), thus bringing stronger basis to thesis developed by Georgescu-Roegen, Odum et al.
    Sorry for always talking of F.Roddier, whose book “Thermodynamics of the Evolution” hasn’t been translated into English (yet), which imho is a real pity because his thoughts are ahead and could bring substantial help to ongoing resarches such as J.England’s one here.

    • Don Stewart says:

      Dear Stefeun

      I also recommend that those interested read:
      https://poetrymatthewkennethkosak.wordpress.com/tag/jeremy-england/

      I have previously noted the work of Adrian Bejan of Duke University, as covered in his book Design in Nature The final sections of the above article also refer to Bejan’s journal publications from almost a decade ago.

      A few quotes from the link

      If it is true that chemical systems will, as claimed here, progress towards more energetically dissipative states, that would be a real finding, let alone one that’s relevant to the origin of life.

      If, it’s true that a system will become complex because it tends toward a dissipative one, then my question would be, OK are the molecules of DNA and proteins in an organism at the most dissipative level? Because, intuitively I’d say they’re not. And that’s because they are not at their lowest energy state possible, meaning no more energy can be absorbed, and thus maximum energy would be dissipated. The molecules in an organism are not in this state at all- plants are a very good example of this, as they are a high source of energy but also heat for homes. So plants have plenty of energy that’s not dissipated, or dissipating, in fact they are energy stores, they are food. There is more work to show how these theoretical systems would be achieving ‘maximal dissipation of energy’.

      End of quotes.

      Now for a reference to Bejan. On page 68 of Design in Nature, he begins the discussion of an experiment you can do at home. Basically, you make some coffee and settle out the really fine grounds and put them on a sloping surface and watch as pattern emerges. The pattern is a branching pattern which is not only present in river drainage systems but also in living things which need to distribute liquid and gases over wide areas, such as trees and blood vessels and lungs. Using pencil and paper, Bejan can predict many of the characteristics of these systems with tolerable accuracy. The reason the accuracy is ‘tolerable’ is that Nature is, always, still evolving.

      Is a branching system ‘more complex’ or ‘less complex’ than evenly distributed coffee grounds? Does the question even make any sense? It is clear that potential energy has been converted into structure, as gravity works on the water which moves the grounds. George Mobus wrestles a little with the notion of ‘complexity’ in Principles of Systems Science.

      It seems to my feeble brain that Bejan is closer to the truth than England. What counts is the ease with which something moves. Bejan shows how animal locomotion optimizes the movement of the animal across the Earth. But Evolution has solved slightly different problems. Bejan was one of the instigators of research into physiology and success in sports. He showed why northern Europeans excel in swimming while Africans excel in running. See his book for details. So, from 30,000 feet, we can see that humans evolved to move across the surface of the Earth. From 10 feet, we can see that Europeans and Africans solved slightly different problems, and in highly competitive sports, one will usually win and one will usually lose.

      One subject which will likely resonate with readers of this blog is Bejan’s emphasis on MOVEMENT. The limbs of animals are so designed as to facilitate movement. Wheels are very important, and Bejan describes the evolution of the wheel. Add oil to wheels and you have movement that our ancestors could hardly imagine. Add an airfoil and it’s truly magic.

      If I have any qualms about Bejan’s thesis, it is the notion of ‘ease’. Sometimes ease is defined as speed, sometimes as reduced friction, sometimes something else. In the article above, the additional element of genetic material (and brains?) surfaces. Apparently humans are willing to invest some resources in genes and brains in the interests of survival through generations…not just dissipate that energy as heat. I think Bejan’s sort of vague definition of ‘ease’ could be stretched to encompass survival. I rather doubt that England’s thesis, alone, can be so stretched.

      Don Stewart
      PS On second thought, it may be that Modern Americans aren’t willing to invest a plugged nickel in the cause of survival over generations. Perhaps we are one of Nature’s Mistakes?

      • Stefeun says:

        Don,
        I know I saw the mention of Adrian Bejan and his Constructal Law in the comments after Quanta-Magazine’s article, but I just can’t find where at once (there are so many names and links in the thread; I really recommend those interested to go through).

        I also have a feeble brain and I don’t know much about Bejan’s work, but I feel like there’s a confusion coming from interpretation of the fact that “things always take the path of biggest slope”, also known as “principle of least action”.

        François Roddier says we should not only consider minimizing the energy expense, but also maximizing the acquisition of another form of energy, which is then dissipated in a more productive way. He says we should not look only at minimized entropy internally to the structure (as shown by I.Prigogine), but maybe even more at maximized entropy produced outside the structure (MEP principle as described by R.Dewar). He explains this in this article titled “Why are we Lazy?”
        https://translate.google.com/translate?sl=fr&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.francois-roddier.fr%2F%3Fp%3D175&edit-text=
        I paste the whole translation here below, in case the link doesn’t work, and also with a couple of corrections; hoping that Gail won’t blame me for that, it isn’t too long:

        “Why are we Lazy?
        I am often asked these kinds of questions. Nature created us to dissipate energy. The principle of maximum entropy Production (MEP) implies that per unit of time, we dissipate as much energy as possible. So why do we tend to be lazy?

        The answer is that we are under stress: our strength is limited. The only way that we have more energy dissipated is to do it as efficiently as possible in order to save time.

        I will take a concrete example. A walker along a river. He sees someone a little further drowning in water. He must go rescue her. He will first run to the river and then swim to the drowning lady. Will he go straight? He runs faster on land than could swim in the water. It is therefore advantageous to stay longer on the shore than in the water. The optimal path is not a straight line but a broken line consisting of two straight segments one on earth more parallel to the shore and the other in more perpendicular thereto water. This is the path that will reach the drowned as quickly as possible. It is also one that requires the least expenditure of energy, so that of the lazy individual. So we would be lazy to be effective.

        It is the same problem for light. A photon travels faster in air than in water. The quickest path is the same broken line given by the laws of refraction. So the light always takes the fastest way to get from one point to another. Photons, too, are lazy. The stars dissipate their energy in the form of electromagnetic waves. Most of their energy is dissipated into the universe that way. We see that the laws of electromagnetism are consistent with the principle of maximum entropy production.

        We find the same phenomenon in mechanics, known as the principle of least action. The motion of a material body delivered to itself is the immediate one that minimizes its expenditure (or maximizes its acquisition) of kinetic energy. Thus, when a loose stone, it falls vertically because it is the movement that maximizes its acquisition of kinetic energy. The stones are too lazy, they fall. In the air, there is friction. Maximizing the acquisition of kinetic energy, the movement will maximize energy dissipation due to friction. The laws of mechanics are well consistent with the principle of maximum entropy production.

        We see that maximizing a quantity often involves minimizing another. This often leads to confusion. And a dissipative structure minimizes its internal entropy to maximize its external production.

        One can compare the entropy to the dust. The latter tends to accumulate where it is. A dissipative structure is like a housewife who sweeps the dust out of his house and send it to the outside. The problem is that the dust goes to the neighbour’s. This is what happens in a competitive society. Natural selection favors one that dissipates more energy, that is to say the one that sweeps faster. He quickly won the day by polluting the others, resulting in a rapid rise in inequality.

        This is why men unite to form societies within which everyone cooperates to sweep all the entropy outside the community. Then it’s the community sweeping the faster who overrides other communities, until the moment when the whole planet is polluted. It remains then to humanity to unite together to send entropy into space as infrared radiation. It is that direction to which it is moving slowly.”

        • Don Stewart says:

          Dear Stefeun
          Thanks for the translation.

          FYI, here is Bejan’s note about the ‘birth of the Constructal Theory’:

          I was in Nancy, France, in late September, 1995…come to deliver a lecture on thermodynamics. I had brought flyers announcing the publication of my seventh book, Entropy Generation Minimization.

          My work took a fateful turn during the pre banquet speech delivered by Belgian Nobel Laureate Ilya Prigogine. Echoing the scientific community’s conventional wisdom, this famous man asserted that the tree-shaped structures that abound in nature–including river basins and deltas, the air passages in our lungs, and lightning bolts–were aleatoires (the result of throwing the dice). That is, there is nothing underlying their similar design. It’s just a cosmic coincidence.

          When he made that statement, something clicked, the penny dropped. I knew that Prigogine, and everyone else, was wrong.

          End of quote.

          What may be true is that any organism tends to preserve its own structure or mission (resist Entropy) by imposing Entropy on other organisms. For example, a river basin maintains its branching structure while facilitating the flow of sediment into the sea. A human will use horses in order to travel farther and faster than his own legs can carry him, will use trees to make wheels on carts to transport more weight behind the horse, will use gasoline to power the horseless carriage, and will put airfoils on the carriage to fly him even faster and farther. A lion will eat a zebra. All of these actions generate more external entropy.

          If an increase in complexity for the organism results in an increased ability to impose entropy externally, then an organism will attempt to increase its own complexity. A lion might conceivably (over hundreds of millions of years) be able to evolve a fossil fuel powered vehicle with a high powered rifle. Eventually, increased complexity is likely to run into the Declining Returns of Complexity. For example, it may well be that humans are inherently able to use fossil fuels and high powered rifles in ways that lions simply can’t evolve into. It might go back to the discovery of fire and the evolution of a big brain.

          Don Stewart

        • Thanks for the translation of Roddier’s article. It explains the things that have been happening recently.

          The Kyoto protocol led the rich world to declare that they didn’t want CO2 pollution. They didn’t want other pollution as well, but they did want cheap goods, and didn’t want tariffs. So the production of goods moved to countries that used coal as their primary fuel. It raised total world pollution, both of CO2 and of other substance. But the Kyoto signers felt that they had done a good thing.
          World Carbon Dioxide Emissions

          Note that the Kyoto Protocol was signed in 1997–just before emissions started rising.

      • Stefeun says:

        For information only.
        I had a look at Dewar-Lab’s publications and noticed they have worked quite a lot on plants, trees (leaves, canopy, roots, wood), carbon, nitrogen, and (self?) optimization of involved processes. Seems rather theoretical, though.
        http://biology.anu.edu.au/research/labs/dewar-lab-entropy-biological-and-physical-systems#acton-tabs-link–tabs-0-row_2-3

        The link below leads to the preface of their (expensive!!) last book “Beyond the Second Law: Entropy Production and Non-Equilibrium Systems”.
        The list of covered topics is quite impressive: “Topics covered include the theoretical basis of MaxEP, non-equilibrium principles associated with Ziegler and Prigogine, the Fluctuation Theorem and related theorems, and MaxEnt, as well as the many applications of these principles to such diverse fields as biogeochemistry, cosmology, crystal growth morphology, Earth system science, evolution of enzyme kinetics, fluid mechanics, land–atmosphere interactions, landscape topography, macroscale technology, planetary climatology, plasma physics and radiative transfer.”
        http://www.springer.com/cda/content/document/cda_downloaddocument/9783642401534-p1.pdf?SGWID=0-0-45-1431850-p175373325

        • Don Stewart says:

          Dear Stefeun
          Thanks for the link. You are determined to get me way in over my head.
          Quote:
          ‘more’ can mean ‘simpler’ and reproducible patterns may emerge. Biological phenomena of interest include patterns of molecular evolution, plant adaptation, and biodiversity. In physics we study reproducible features of fluid turbulence and Earth’s climate.
          End Quote

          Pop Quiz: Which is more complex, the seed or the plant?

          George Mobus observes that if we think about a sperm and an egg producing a human it sounds impossible when we examine all the steps and all the ways things could go wrong. Yet humans do pretty reliably produce babies. Is making babies simple or complex?

          About brains, Mobus says:
          One very important question for …pattern recognition is how do the mappings get created in the first place (e.g., recognizing mommy’s face)? …the variations in features and feature combinations across all representatives of any given group of similar objects are generally very high. It would be impossible, even in principle, to preprogram all of the possibilities into a computer program, and, in a similar vein, it would be impossible for there to be a genetic program that pre-specified cortical circuits that would do the work. Brains are designed to modify circuit connections as a result of experience.
          End quote

          So…is pattern recognition as simple as falling off a log (newborns do it without benefit of schooling), or is it one of the most complex undertakings humans can be involved in?

          I think that the real issue isn’t ‘complexity’, whatever that may be, but ‘brittleness’. Mother Nature has made sure that making babies is a pretty resilient occupation…she does that by giving females a ‘delusion gene’ which causes them to be attracted to males with no redeeming qualities whatsoever!

          Brittleness must always be interpreted in terms of the environment we are experiencing or expect to experience. As an example, consider the pretty well known brittleness of a global mono-crop with identical genes. Now consider the brittleness of a system that a gardening friend of mine in Texas uses. She sows her bed rather randomly with an abundance of heirloom seeds. Lots of plants germinate, in unexpected combinations. As plants get too crowded, she thins them and eats or composts the thinnings. In the summer when there is too much sun, she lets tall plants shade short plants. At this time of year when sun is lacking, she harvests plants so as to maximize the amount of sunlight her plants are getting. This is most certainly not a ‘paint by numbers’ or ‘mono crop’ garden. It’s a lot more diverse than an industrial mono crop, but it is also far more resilient and less brittle. Is it something we would actually label as ‘complex’. What she is doing is very much like a newborn learning to recognize mommy. And we know you don’t need a PhD to do that.

          Don Stewart

          • Stefeun says:

            Don,
            First, sorry if I caused you any trouble, my intention is neither to get “over” anything nor to “fart higher than my ass” (sorry French expression), those scientific papers are way above my capabilities and competences, I’m just trying to see if they contain some general simple rules that could help me build up my own representation of the world.

            Re. complexity of certain organs or features I agree it’s amazing but it seems to me that the result is compliant with the “simple” laws of Evolution, and more broadly of self-organization. Even if it “seems absurd in the highest possible degree”, to take Darwin’s words, which I found in this article (http://www.quantamagazine.org/20130716-the-surprising-origins-of-lifes-complexity/).
            In this same article (which I had to stop reading because it was too… complex!), they suggest a definition for complexity: it would be the number of different parts in a given organism.

            If we consider your example comparing intensive mono-crop with your gardening friend’s multi-seeds technique: if you look at it at the micro level, the complexity is obviously on the multi-seeds side. Now enlarge the frame and consider the whole system involved in the process; then (let alone the sunlight and natural phenomena that are identical for both), the complexity is on the side of the mono-crop, as you have to include the whole supply-chain and imported energy that makes it possible.
            The complexity is in the number of different parts that *must hold together* in order to have the structure able to dissipate as much energy as possible, and then be poweful and take over its competitors.

            As for brittleness, I’d say it results of the variability of the environment: if the conditions don’t change over time, you can have brittle structures that are very efficient; but as soon as there’s a brutal change, they collapse. I think the “strategies r,K” theory gives a good explanation of that. Think of dinosaurs and small mammals.

            So my take is that complexity goes along with brittleness and with the rate of energy consumption, and this is a perfect recipee for collapse because energy consumption modifies the external conditions.
            I’m probably over-simplfying, but that seems to be sufficient for my limited capacities 😉

    • Thanks! I think I was the one who provided a link to England’s article. I realized when I did that a lot of what he was saying was not really new.

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  36. Stefeun says:

    Destroying precious ecosystems:
    Massive Oil-Spill Threatens Bangladesh’s Sundarbans
    http://globalvoicesonline.org/2014/12/14/massive-oil-spill-threatens-bangladeshs-sundarbans/

    What disappears (species, ecosystems, …) is gone forever.
    Anything new can only be built from/upon what remains after the destruction, and for complex species we’re talking of hundred(s) of thousand years.

  37. Creedon says:

    http://www.theautomaticearth.com/will-oil-kill-the-zombies/ It’s just a matter of time. Put your money under the mattress, feed the chickens and hold on tight.

  38. edpell says:

    “Our Finite World” requires that the number of humans be limited. This is the root issue. It does not matter how efficient we are there is a limit to the number of people. How this is done is the only thing we get to decide. So far no one is talking about the need nor about the means.

    Even after a collapse of global civilization due to a lack of affordable energy, even after a population reduction of 99% this is still the issue. Yes, with a 99% reduction there may be some time to deal with the issue before it is the four horsepersons again.

    At a minimum we need an enforce global two children per couple policy.

    • Limiting the number of people is not sufficient. The survivors also have to come up with a new networked economy, after the old one collapses. Most of the old pieces will not work any more. This will be non-trivial.

      I think it is too late for a two child maximum to make any difference.

      • edpell says:

        Gail, I agree with both of your points. But I do hope some day (not in my life time I expect) we get out of the rabbit and wolf overshoot crash approach to population control.

      • Daddio7 says:

        Like the man said in a certain movie, “Life will find a way”. Years ago while clearing new farmland in northeast Florida we found dozens of arrow heads on a sandy high spot. The field was planted in potatoes. When the harvester went through that spot a flint rock half the size of a bowling ball came up the chain. My mother uses it as a doorstop. The nearest flint comes from over 200 miles away. Over a thousand years ago there was a trade route through the Florida swamps north. A thousand years from now our descendants will be doing the same thing.

        • Maybe so. But building up a new supply trade route will take trial and error and work.

          • Lizzy says:

            Yes, but Gail, don’t you ever wonder — man has been using the current economic model for the last few (okay, 300 hundred) years, but before that, there were other ways of doing things? I’ve asked before about our current system, could it not be overtaken? Or just subsumed into a new way? I’ve read Kunstler (changed my outlook), and loads of other books about how we are tied to and reliant on The Current Way. But right now, I am half-way through a book about developments and changes in (Western) ‘civilisation’ from the year 1000 to present. It’s only been in the last 200 – 300 years that normal, everyday human life has been so completely controlled by the current order. Just supposing a new way will evolve? Maybe back to the age of Kings and Strong men, and violence and Rule by Power? I mean, it was always, previously, thus. People live their lives, as best as they can. We will survive. By ‘We’, I mean humans. This is a bit philosophical, but who the hell knows? Are we happier? Do we have a better chance of survival as a species? je ne sais pas.

            • We don’t have a way of going back to using horses, if we have anything like the human population level. We don’t have a way of getting fossil fuels out without a lot of debt, and now even that is not working well. Coming up with new approaches to accomplish the same thing is going to require a lot of original thinking.

            • Don Stewart says:

              Gail
              Regarding horses. May I suggest that we Americans tend to think of the ‘old West’ and horses. If, instead, we looked at Edo Japan, we would find very few horses.

              When people in Edo Japan wanted to go somewhere, they walked. If they needed to transport something over land, they pulled a cart. Preferably, they put the load in a boat. You can find stories from as late as the 1930s in the US where people routinely walked 20 miles to get to where they needed to go.

              I think it is probably much more productive to think about Edo than practically any other model. An Edo model forces us to truly consider the constraints and opportunities of localism. Local is not necessarily ignorance and poverty, nor is it necessarily Mayberry.

              Don Stewart

            • Jan Steinman says:

              Don, can I assume you are familiar with Just Enough: lessons in living green from traditional Japan? Is it worth spending 1/3rd of a month’s discretionary income on? 🙂

            • Don Stewart says:

              Jan
              I am familiar with the book. I recommend it highly for four reasons:
              1. It is a thorough exploration of an economic and social system which used virtually no fossil fuels, and yet produced a healthy and relatively happy life for 30 million people in Japan. For example, when people in London were throwing human waste into the street, there was no human waste going into waterways in Japan. Japan was reforesting. There was a lot of research on agriculture, and agricultural extension was alive and well.
              2. It is recent enough history that it can be understood through many artifacts which still survive. Azby went out and examined surviving artifacts, some of them even in Tokyo. There are photographs of ‘Edo roads’, for example.
              3. It reflects a society which had developed many specialty occupations, such as those who made and sold and repaired umbrellas, and those who made and repaired abacuses. People in Edo city routinely relied on street vendors of food. Therefore, this is not ‘stone age’, but a sophisticated society. It featured quite a lot of art and culture.
              4. The line drawings are excellent illustrations.

              Send me your address and I think a copy might appear in your mailbox.
              Don Stewart
              hudsonplains@gmail.com

            • I agree that we need a simpler model than the old West. Walking needs to be part of it–not bicycle riding, or some other “newfangled” idea.

            • Wee Willy Winky says:

              Are we happier?

              Not sure about that (what is happiness) but I am confident that if you could switch places with someone from the 1700s that you would very much prefer your current life.

              We live better than kings of old because fossil fuels has given each and every one of us hundreds of slaves for a pittance. Even a middle class person lives far better than a king. Better house, better food, better transportation, better entertainment, etc.

              A friend’s parents grew up on a farm (they are over 70 now), went to school and eventually ended up working in the city. They were telling us recently how there is no way in hell they would wish that life on anyone. Getting up in the freezing cold winters to do their chores. It was a brutally harsh life.

              They would never go back to that nor would they advise anyone to trade their cushy modern fossil-fueled lives for that.

              It is important to remember that these people were on a farm when there was electricity and fossil fuel powered tractors and other machinery. They were not in the field working with animals to plow fields; they were not milking cows by hand. They had refrigeration and medical care and other conveniences of the modern era

              Yet they were living a life of ease relative to a farmer from the 1700s.

            • Lizzy says:

              Gail, I didn’t mean it’s a choice, just that it might happen. What if the debt (which is an abstract concept in some ways, not concrete) was forgiven or just ignored. Don Stewart makes some fine points about Edo-era Japan and what a sophisticated and rich society it was.

            • Debt is the “moving forward” of profits, and of the benefits of having a new device. Without it, oil and gas extraction, and the making of wind turbines, and most any kind of other manufacturing essentially disappears. You may think it is abstract, but it is absolutely essential to running our current economy.

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  40. Creedon says:

    I believe, along with Paul Craig Roberts that collapse could actually protect us from something worse. http://peakoil.com/publicpolicy/on-the-brink-of-war-and-economic-collapse/comment-page-1#comment-114688

    • No. Collapse in and of itself causes huge changes. Leaders get trapped in whatever situation they are in. I would not call them evil. Maybe confused, or trying to save themselves, and their friends.

  41. Quitollis says:

    The British step in to save the day as usual. Sometimes even that can be a serious fault. As Jose Mourinho said of Arsene Wenger, “he is a master of failure.” It is also called “kicking the can down the road.” Sometimes, the more you save a system based on fundamentally wrong premises, like gross overpopulation and “profit equals civilization”, the worse the end result is going to be when it finally comes down.

    Into the great wide open

    Scientific studies of techniques for deliberately modifying the climate are getting ready to move out of the laboratory

    http://www.economist.com/news/science-and-technology/21635983-scientific-studies-techniques-deliberately-modifying-climate-are

    Quote:

    IN 1990 John Latham, a cloud physicist, published a short article in Nature under the headline “Control of Global Warming?” It argued that if low-lying maritime clouds were made a bit brighter, the Earth could be cooled enough to make up for the increased warming caused by emissions of greenhouse gases. The brightening was to be achieved by wafting tiny sea-salt particles up into the clouds from below; by acting as “cloud condensation nuclei” (CCN) they would increase the number of water droplets in the clouds, and thus the amount of sunlight they reflect out into space. Latham calculated that a square kilometre of cloud might be kept bright with just 400 grams of spray an hour. And finding out if it was really that easy might be straightforwardly tested. “It seems feasible”, Dr Latham wrote, “to conduct an experiment in which CCN are introduced in a controlled manner into marine stratus.”

    A quarter of a century on, such a test may soon be on the cards…

    http://www.topnews.in/files/crucifixion.jpg

    “I am a British liberal, only I can save you!”

  42. Don Stewart says:

    Dear Gail and All
    Here is one explanation for what we are currently witnessing in Washington, DC. I don’t claim it is the only explanation, or even the most important explanation. But perhaps it makes sense in a novel way, which we may not have thought about before.

    Start with some facts:
    First, Congress just made the taxpayers responsible for keeping the enormous derivatives market solvent. On top of bail-in obligations.
    Second, Congress just gave approval to spying on American citizens (current spying is by Executive Order)
    Third, the G.W. Bush administration used torture to ‘prove’ that Saddam Hussein was involved with 9/11
    Fourth, Wikileaks data indicates that Washington sought advice on how to lure Russia into taking some action in Ukraine, and received the advice to make threats against the Russian speakers in Crimea and eastern Ukraine. NATO apparently took this advice to heart, and seems intent on starting WWIII.

    http://www.zerohedge.com/news/2014-12-12/most-egregious-sections-law-ive-encountered-during-my-time-representative
    http://www.zerohedge.com/news/2014-12-12/media-focusing-wrong-senate-torture-report

    Now I want to refer to an interesting observation in Mobus and Kalton’s book Principles of Systems Science.

    On page 566 we read that ‘In humans there was an early form of coordination hierarchy based on age and life experience..wise elders who could give verbal advice and counsel. As human populations expanded and competition between tribes increased, there was a shift to a stricter top-down command and control hierarchy…The evolution of human culture shows how these hierarchies grew in depth and the complexity of societies increased, especially with the inventions of machines and the exploitations of new energy sources.

    And on page 567: ‘Individual humans show some capacity for strategic thinking, but it shows itself best in larger organizations such as militaries and corporations.’

    I offer the explanation that the Powers That Be in Washington and Brussels and Tokyo and Beijing have concluded that our situation requires a strategic response, and that Jeffersonian democracy or Kropotkin style Anarchism are not up to the challenge. A former head of the CIA said, at his first staff meeting, ‘we will know we have been successful when nobody knows what we are actually aiming at.’ Considering Barack Obama’s campaign, and his subsequent behavior, do you think he heartily approves of that goal?

    So I suggest that where we are involves these elements:
    First, the Leadership thinks it knows all about strategic actions.
    Second, the Military and Corporations are the chosen executors of the strategic policies.
    Third, the Leadership is quite confident that they are not dependent on me or you understanding what is really going on. Control of the propaganda mechanisms plus an understanding of human psychology and sociology let’s them achieve their goals.
    Fourth, Militaries and Corporations are entirely driven by power and money. Seldom will you see a military Lieutenant who bends orders in the name of decency, or a middle manager who actually looks beyond maximizing his performance metric.
    Fifth, consequently, we should expect episodes of torture, the violation of our civil liberties, wars (hot and monetary) to force outliers into lock-step, and the urgency with which things like the Trans-Pacific Partnership are pursued. I have lost the exact reference, but around 250 patents are involved in a smart phone. To a corporation, it is vitally important that a single patent law govern everything, and that country by country lawsuits be avoided. Thus we see the elevation of corporations to ‘global citizenship’ in the TPP.

    I don’t know whether the Congress and the President would recoil in horror at the above analysis. It may just be corporate money talking. For example, you can see that the Democrats who got large contributions from the financial sector voted FOR saddling the taxpayers with the obligation to make derivatives good, while those who didn’t get contributions voted AGAINST. Maybe Congresspeople are as stupid as they seem, and are merely venal.

    But I wouldn’t rule out the notion that they are guided, at least sub-consciously, by the considerations above.

    Don Stewart

    • edpell says:

      We are well beyond policy making sense. Policy is simply a display of force. It is theft. Logic, reason, morality have nothing to do with it. It is the strong take and the weak are robbed.

  43. Theoltd says:

    This is all about how USA try to kill Russia economy with low Oil prices. Clever people around the world know how USA can downgrade credit rates in countries, organize revolutions, create chaos, bring its oil stock reserve on the market, just in order to lower the Oil price, and try to provoke a Bank Run in Russia, and then the collapse of economy.
    Other people are reading this kind of blogs with a lot of charts ignoring that today’s price of oil is politic, not economic.

    • Creedon says:

      Our world is too full of conspiracy theories. As someone who believes in many of them I can tell you that their is something to the legitimacy of the markets. They are telling us something. We need to determine what that is.

    • Even if the part of the issue is political, the result is economic. People can do dumb things, if they don’t understand the underlying issues. We badly need globalization to keep up our current system.

      • edpell says:

        ??? Globalization may keep up the [profits and executive bonuses of the 0.1% but for the average American/European/Japanese globalization is a harm.

        True we all need cheap primary energy but the supply of cheap energy is not solved by globalization.

        Globalization helps the areas of the planet with above average population density export some of its social ills to places with below average population density. So I could agree that China and Indonesia and Egypt need globalization.

    • B9K9 says:

      People do what people do. Faith in efficient markets is no different that other beliefs, such as a benevolent, personal deity, or trust that public institutions really exist for the benefit of the governed.

      If challenged, rather than consider facts, they resort to retorts that have been carefully planted and cultivated, along with a good measure of positive reinforcement. Thus, the standard canard “conspiracy theory”.

      But it’s really ok; one shouldn’t engage with those that reveal that kind of position. It’s really no different than attempting to convert someone to a different religion. Once they “out” themselves, then you know they are going to twist themselves into all kinds of mental contortions trying to explain something that is really quite clear.

      Thus, we have IMO, this ridiculous theory that mankind will find substitutes for oil, and that high prices will facilitate that transition. Sigh. I mean, what can you say to this kind of person, other than “good luck with that”. LOL

      Seriously, who cares? Just continue going about your own business, watching the players set the pieces, and make some $ on the margins playing the game as it truly exists.

  44. Hogwash…
    1) If the Saudis can’t provide enough oil, the price will go up due to less supply. Others will sell just to get something out of it – after all, part of something is better than all of nothing. FINALLY supply/demand will have a chance to work.
    2) Shale wells will continue to produce – the methods have been developed, the equipment has been made – cost of extraction goes down with every new well that’s been dug.
    3) Jobs will pick up in other sectors as consumers spend the roughly $100B they save on gas – and this savings is of higher proportion to low/middle class who are the people who spend (circulate money) instead of high income people to already have plenty to spend and end up stuffing extra money into Wall Street and Trust Fund “mattresses”.
    4) and 5) Tough cookies… the world shouldn’t set itself to operate on oil income, especially when it tends to bleed other sectors of low/middle incomers discretionary spending.
    6) Doubtful… see 3)
    7) Doubt it, but profits will be lower – everyone had a heyday at Exxon et al’s days of $10B per quarter net income may be over.
    8) Somewhat true, but high oil prices have allowed research and development of renewable energy sources – especially solar (panels for which have come WAY down in price). Renewables are over the hump and rolling.
    9) Deflation due to lower cost of transportation and fuel costs is okay – people will have more money to spend after filling their tanks and other sectors will see higher demand, which is the ONLY thing that will help create jobs in other sectors. This is simple redistribution of wealth based on supply/demand instead of Wall Street driven/speculation money games.
    10) Hey… if governments have been spending and borrowing like drunken sailors because of artificially high oil prices (based on ACTUAL supply/demand), it’s time they tightened their belts and become more efficient/less wasteful as so many economic sectors have had to become while oil prices were pulling so much money from those other sectors.

    This sounds like more of the boo-hoo cries of those who can’t make money from high oil prices and all the related money games that go with it (derivatives, etc). It couldn’t have happened to a nicer bunch of guys. It’s similar (but not NEAR as bad) as what happened when the housing bubble popped – because housing was WAY overpriced and too much was built, too many consumers were involved etc. Oil companies will survive – those who were profiting from it will survive but will have to adjust. Worst will be smaller businesses in ND etc that benefited from spending by oil company employees, but hopefully most will survive at lower income levels. Oil production in the US is not going to go away – main thing is we have our supply figured out so we aren’t at the mercy of the Saudis, as we were when every little hiccup in that region (along with speculation) drove oil to $140/barrel.

    • Let’s check back in a year or 18 months and see who is really correct. It is hard to see where the dominoes will fall, so we get many conflicting views. I believe my view is correct.

    • Creedon says:

      Chris, your missing a pivotal point; low oil price is going to take oil off the market. This is also market economics. Let’s let time be the judge, as Gail says.

    • Jan Steinman says:

      “This sounds like more of the boo-hoo cries of those who can’t make money from high oil prices and all the related money games that go with it “

      You don’t come here often, do you? 🙂

      You won’t find many friends of oil stocks here.

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