Putting the Real Story of Energy and the Economy Together

What is the real story of energy and the economy? We hear two predominant energy stories. One is the story economists tell: The economy can grow forever; energy shortages will have no impact on the economy. We can simply substitute other forms of energy, or do without.

Another version of the energy and the economy story is the view of many who believe in the “Peak Oil” theory. According to this view, oil supply can decrease with only a minor impact on the economy. The economy will continue along as before, except with higher prices. These higher prices encourage the production of alternatives, such wind and solar. At this point, it is not just peak oilers who endorse this view, but many others as well.

In my view, the real story of energy and the economy is much less favorable than either of these views. It is a story of oil limits that will make themselves known as financial limits, quite possibly in the near term—perhaps in as little time as a few months or years. Our underlying problem is diminishing returns—it takes more and more effort (hours of workers’ time and quantities of resources), to produce essentially the same goods and services.

We don’t measure our investment results with respect to the quantity of end product produced (barrels of oil produced, liters of fresh water produced, kilos of copper produced, or number of workers provided with sufficient education to work in high tech industries), so we don’t realize that we are becoming increasingly inefficient at producing desired end products. See my post “How increased inefficiency explains falling oil prices.”

Figure 2. The way we would expect the cost of the extraction of energy supplies to rise, as finite supplies deplete.

Figure 1. The way we would expect the cost of the extraction of energy supplies to rise, as finite supplies deplete.

Wages, viewed in terms of the product produced–oil in this case–can be expected to decrease as well. This change isn’t evident in usual efficiency statistics, because some of the workers are providing new kinds of services, such as fracking services, that weren’t required before.

Figure 3. Wages per worker in units of oil produced, corresponding to amounts shown in Figure 2.

Figure 2. Wages per worker in units of oil produced, corresponding to amounts shown in Figure 1.

Even investment is becoming increasingly inefficient. It takes more and more investment to extract a given quantity of oil or other energy product. This investment needs to stay in place longer as well. The ultra-low interest rates we have been experiencing reflect the poor returns investments are now making.

The myth exists that prices of all of the scarce goods and services will rise high and higher, as the economy encounters scarcity. The real story, though, is that the inflation-adjusted purchasing power of common workers is falling lower and lower, especially in the United States, Europe, and Japan. Not only can these workers afford to buy less, but they can also afford to borrow less. This means that their ability to purchase expensive goods created from commodities is falling.

At some point, this lack of purchasing power can be expected to affect the financial markets, and the prices of many commodities can be expected to fall. In fact, this already seems to be happening.

The likely impact of such a fall in commodity prices is not good. If low oil prices cannot be “turned around,” they will lead to debt defaults, and these debt defaults are likely to lead to failing financial institutions. Failing financial institutions have the potential to bring down the system, because it becomes very difficult for businesses to continue if they are not supported by a banking system that allows a company to pay its employees. Workers also need the banking system to pay for goods and to save for a “rainy day.”

A big part of what has allowed the economy to grow to the size it is today is increasing debt levels. These rising debt levels play many roles:

  • They make high-priced goods more affordable to consumers.
  • They create greater demand for goods, allowing more end-product goods to be produced.
  • They create more demand for commodities required to make end-product goods, allowing the price of these commodities to rise, so that more businesses have more incentive to create/extract these commodities.

At some point, debt levels stop rising as fast as they have in the past (because of a lack of growth in purchasing power because of diminishing returns in investment), and the whole system tends to fall toward collapse. We seem to have reached this point in the middle of 2014. China was raising its total debt level rapidly up until the early part of 2014, then suddenly moderated its growth in debt level in mid 2014. At about the same time, the US scaled back and eliminated it program of quantitative easing (QE). Oil prices dropped starting in mid-2014, at the time debt levels started moderating. Other commodity prices started falling as early as 2011, indicating likely affordability problems.

We are now in the period when many people still believe everything is going well. Oil prices and other commodity prices are low—what is “not to like”? The answer is that the system in not at all sustainable—profits of oil companies and other commodity businesses are down, just as wages of common workers in developed countries are down in inflation-adjusted terms. Companies are cutting back in investment in oil production. Soon oil production will drop. With lower oil supply, the economy will face huge challenges.

Many people believe that oil prices can bounce back up again, but this really isn’t the case, because of growing inefficiency related to limits we are reaching–the need to use more advanced techniques to produce oil; the need for desalination for water in some places; the need for more pollution control equipment that doesn’t really increase the finished goods and services we are producing but instead makes goods more expensive to produce.

Each worker is, on average, producing less and less of the finished goods we really need. Whether we like it or not, standards of living will have to fall. The amount of debt workers can afford decreases rather than increases. This new reality can be expected to manifest itself in debt defaults and increasing financial system problems.

Even if oil prices bounce back up again, it is doubtful that shale oil drillers will be able to again borrow at a sufficiently high rate to increase their production again—what lender will believe that oil prices will remain high indefinitely?

The China Connection

I have been trying to put the real story of energy and the economy together over a period of years. Prof. Lianyong Feng of Petroleum University of China, Beijing, hired me to put together a short course (eight sessions, each lasting about 1.5 hours) on the nature of our current problems for students majoring in “Energy Economics and Management.” The course would be open to everyone choosing this major, including freshman, so I needed to assume a fairly low level of background knowledge. Actual attendees included a number of graduate students and faculty, attending the course without credit.

I put together a series of lectures, which I gave during the second half of March 2015. PDFs of my lectures are also now available on my Presentations/Podcasts page.

These lectures were videotaped by Prof. Feng’s staff, and I am in the process of making You Tube Videos from them, in addition to the original MP4 format. (YouTube videos cannot be seen in China.) My current plan is to give a brief discussion of these lectures, in future posts.

Following the lecture series, I visited several places in China, to see how the economic slowdown is playing out in China. This included visits to Northwest China (Hohhot and Hardin), Northeast China (Daqing and Harbin), and Southeast China (Wenzhou area). In Wenzhou, I visited three different companies attempting to sell electrical equipment on the world market.

From these visits, we could see how the world economic slowdown is affecting China, and how China’s own slowdown in debt growth is adding to the world slowdown. We could also see that the slowdown has not yet run its course China–growth in housing continues, even as the need for it seems to be slowing. College students are finding it difficult to find high-paying jobs in oil and other commodity sectors. The lack of growth in high-paying jobs will provide downward pressure on housing prices as well.

I plan to write a post about this situation as well.

This entry was posted in Financial Implications and tagged , , , , by Gail Tverberg. Bookmark the permalink.

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.

486 thoughts on “Putting the Real Story of Energy and the Economy Together

  1. Dear Gail and Fellow Finite Worlders

    Charles Hugh Smith has an interesting observation in his note to his subscribers this weekend.

    ‘This increasing dependence of “good” entities on players making risky bets and manipulating markets has created perverse incentives to keep the financial bubble-blowing going with government backstops and changing the rules to mask systemic leverage and risk.

    The government must prop up markets, not just to insure the cash keeps flowing into political campaign coffers, but to save pension funds and the “wealth effect” that is now the sole driver of “growth” (expanding consumption) other than debt.

    To maintain the illusion of growth and rising wealth, the financial markets must continually reach greater extremes (see below): extremes of debt, leverage, information asymmetry and valuations. These extremes destabilize markets, first beneath the surface and then all too visibly.’

    Harari, in his book Sapiens, gives us the economic history of the world in a nutshell. One the left are three circles connected by arrows. The first circle is labeled ‘Little Trust in the Future’, the second circle is labeled ‘Little Credit’, and the final circle is labeled ‘Slow Growth’. The slow growth then feeds back into the ‘Little Trust in the Future’ circle.

    On the right are three circles, featuring ‘Much Trust in the Future’, ‘Much Credit’, and ‘Fast Growth’.

    Let me make an aside and then I will come back to the central point. One can take the position that the ‘fast growth’ was enabled solely by the fortuitous discovery of fossil fuels. Alternatively, one can take the position that plenty of credit enabled the exploitation of fossil fuels, and will enable the exploitation of other energy sources in the future. Harari makes no ringing declarations, but I suspect the latter alternative is what he favors. The opposite side would be represented by Gail and John Michael Greer whose current post talks about all the failed ‘replacements’ for fossil fuels we have seen in the past few decades.

    Back to the main point. Smith is giving us a picture of a desperate attempt to maintain the illusion of Fast Growth which feeds into Much Trust in the Future. The ‘dangerous bloggers’ that Congress investigates and Obama castigates fail to see the glorious prospects awaiting us if we can just get the debt bubble sufficiently inflated.

    Harari says that we currently live in a single, global civilization. The drivers from diversity to uniformity have been commerce, religion, and empires. Over the centuries, the number of distinct civilizations has fallen quite rapidly. However, the uniformity of the civilization does not prevent conflict. Harari points out that the St. Bartholomews day massacre of protestants by Catholics in France killed more Christians than the Roman Empire killed over hundreds of years. The Pope in Rome was so pleased by the news of the massacre that he had a special room decorated to celebrate the great victory. (The room is now closed to visitors.)

    Russia and the US are currently about like the protestants and the Catholics. A couple of hundred years from now only learned historians will understand whatever differences they had. Yet those differences could wipe out humanity and much more.

    If we are reaching limits to growth in multiple arenas, the question becomes ‘What happens to the single global civilization?’ It’s hard to imagine that the three pillars of modernity (commerce, religion, and empire) will vanish. My guess is that they will fragment into similar but politically separate pieces, with wars similar to those between the protestants and Catholics being the rule. I cannot see that ‘Trust in the Future’ can survive to fuel ‘Much Credit’, and so we will get ‘Slow Growth’.

    Don Stewart

    • Our big problem, as I see it, is that we need some sort of “system” that works. When our current one doesn’t work, we will need to piece together whatever we can to make something work. I have a hard time seeing that we will be able to put together enough pieces of our current system to provide “slow growth.” In particular, an international financial system is going to be hard to replace.

      And yes, I do agree with the need to have the massive growth that supports insurance, pension plans, and banking. As you know, I came to this from the actuarial end of things. The need for growth is very apparent from this perspective.

      • Gail
        Let’s suppose that the System crashes and 95 percent of the people die and financial assets become worthless. There are no fossil fuels available, nor any high-tech solar panels or wind turbines or hydroelectric dams. But 5 percent of the people figure out how to survive in the new world.

        Since humans are clever, and since they learn over time and pass that learning on to others and the next generation, productivity will gradually increase from a very low base. But nobody will have much faith in the future, and won’t be willing to gamble the farm on financial speculation. (Some might trade it for strong drink…but that’s another problem.) The dominant stories will be about the ‘lost golden age’.

        We would be back the world of ‘slow growth’ that Harari describes.

        Don Stewart

        • If we are back to slow growth, we will still soon hit limits. Rising population and constant soil available for agriculture leads to diminishing returns. So does trying to kill more wild animals (including fish) because of rising population. If we are trying to use non-renewable resources (metals, other minerals from the ground), we will have the depletion problems we had before, and rising population will add to them.

          Slow growth just puts off hitting limits again. If we could figure out a way to (1) have zero growth except in a narrow band offset by shrinkage during some periods, and (2) use only renewable resources (including soil) within its capacity for renewal, we might have a magic formula.

          But even in the stone age, we didn’t only use renewable resources in their capacity for renewal. We killed off the large megafauna and burned down forests. We exhausted the desirable stones that could be found on the surface. Ugo Bardi talks about an underground mine from 40,000 years ago, IRRC in Extracted: How the Quest for Mineral Wealth is Plundering the Planet.

          • Gail
            Two points about ‘slow growth’. First, Harari is giving us tools for understanding, not prescriptions. IF people do not have faith in the future, for whatever real or imagined reason, then there will be slow growth and not much in the way of financialization. IF there is faith in the future, people will go into financialization and promises to pay and so forth. IF the expectations are realized, as they mostly were for the last couple of hundred years, then an upward trajectory at a rapid rate will be realized. IF the expectations are not realized (perhaps because the world turned out to be all to finite), then financial ‘assets’ will simply disappear.

            Second point. Take a look at the history of Edo Japan. Japan emerged from the wars of the Middle Ages at a very low point. I think the population was about 15 million. The establishment of a strong but flexible central government, plus peace, allowed the country to grow. Population increased to about 30 or 35 million, and then STOPPED GROWING. The government used media such as agricultural bulletins to make peasants all over the country aware of newly developed methods. Improvements from the terrible conditions of the Middle Age wars came easy for several decades, and then the rate of improvement declined as the low hanging fruit had been harvest. After that, improvement and growth were limited to what the slow increments of new technology and better organization could yield.

            I have never heard that Edo Japan had any financial bubbles such as the Tulip Mania or the South Sea Bubble. Partly, I imagine the lack of bubbles was connected to the social rigidity. Farmers were born as farmers and died as farmers. The Samurai were reduced to becoming umbrella repair specialists and similar modest professions. Tradespeople did not borrow money to found chain stores. The government did not issue lots of debt in order to fund a mighty military capable of conquering China (that came only after Dewey brought them ‘enlightenment’.)

            In short, I think it is quite possible humanity may again enter a stage of ‘slow growth with only modest expectations for the future’, but getting there probably requires the total destruction of our current mindset…just as getting to Edo required the collapse of the ‘warring states’ mindset of the Middle Ages.

            Don Stewart

  2. To Jan Steinman
    At Auschwitz, the exchange rates were as follows, with cigarettes being the currency of choice:
    Loaf of bread 12 cigarettes
    10 oz package of margarine 30 cigarettes
    a watch 80 to 200 cigarettes
    one quarter of a galling of alcohol 400 cigarettes

    Courtesy of Harari
    Don Stewart

  3. Just to let everybody know, I have Revamped the Diner News Page and now have Tickers running from all the major Collapse and Econ/Climate/Energy Blogs, including Our Finite World.  It’s very easy and quick now to check for articles on all these sites.  The Links bring you to the site originating the article.

    Also, on the Diner Blog Right Nav Bar, I also am running feeds from my two favorite Off Site Commentariats to Poach, here and on Economic Undertow. 🙂

    Currently, all the feeds are only updating once a day, but we are working on speeding that up.

    The Diner Collapse Newz Page has its own URL, DOOMSTEADDINER.COM


    Also we are editing a Podcast we did with Gail right after she disembarked the plane from China. 😀

    Should be by next weekend.



    • Nice site except it brings my laptop to a crawl and that’s even with Flash and Javascript disabled.

      • You need to upgrade. lol.

        Seriously, it is intensive of dynamic memory. If you are running a lot of background Apps or have a lot of open windows, it will slow you down for sure. However, I am working with and end-of-lifespan 3 year old laptop, and even with full flash and java running, it moves OK as long as I am relatively clean with what else I am running.

        It’s not near as bad as Zero Hedge. With all the scripts they are running, it locks me up all the time.

        Try first off rebooting, and then also go to your Start Menu to see what shit your laptop is running in the background, which is usually a lot these days because every damn app you load comes with some feedback loop to keep tabs on your usage. Uninstall all the garbage and it should run OK on a decent computer.


        • Nice site except it brings my laptop to a crawl and that’s even with Flash and Javascript disabled.

          You need to upgrade. lol.

          Woa, am I the only one suffering from cognitive dissonance here? The notion that a website devoted to the end of civilization as we know it requiring state-of-the-art hardware in order to even view is pretty strange to me!

          I am working with and end-of-lifespan 3 year old laptop, and even with full flash and java running, it moves OK as long as I am relatively clean with what else I am running.

          Pass. My computer is over ten years old. I don’t plan on replacing it. Ever. (I might get a couple more of the same model as a spare cache.) If a site behaves badly or slowly, I just move on.

          Meanwhile, my website has an average page load of under 70kB, including all images and scripts (a wee bit of Javascript to run the image pop-ups on the buttons).

          Uninstall all the garbage and it should run OK on a decent computer.

          Perhaps time to take your own advice, RE?

          Just as people have informal competitions to see how frugal they can be, perhaps you can “uninstall all the garbage” from your website, so it will “run OK” on a frugal computer?

          • JS, I have ZERO problem with the hypocrisy involved with using high tech/energy intensive media as we attempt to disseminate the information that everyone needs to know before the Internet Goes Dark TM. This is a race against time now, and you use everything available to get the message out.

            Did Gail not just take inummerable Plane flights not only to/from China, but around China as well gathering and disseminating information? This is less hypocritical? What?

            In a few years, your 10 year old laptop and my 3 year old one will be equally useless waste in some landfill somewhere. UNTIL then though, my 3 year old one runs all the scripts and does a decent job with getting the message out. If I need to buy a new one and upgrade again, I will do so. The better the tech I have, the better able I am to disseminate information. The better the tech you have, the better able you are to receive said information.

            I’ll make use of this stuff so long as it is available to use. This is CFS.


            • ‘Disseminate the information’

              What information — that we are all about to die? That there is nothing that can be done about this?

              I don’t see why anyone wants to disseminate this information – to what purpose?

              To say ‘look you idiots – you are about to suffer and die — wake up!’

              And wake up to what? Wake up to have this bitter knowledge lurking behind every thought, every decision, every waking moment? To have this awareness charge in the moment one thinks of planning for any sort of future knowing there is no future for oneself or one’s children?

              This knowledge should be locked into a steel box and dumped into the deepest ocean trench.

              This knowledge is a pox to those who have it. Unfortunately, once the epiphany has been had, there is no unseeing this terrible truth.

              I envy those who are able to believe that solar and wind or thorium or some other nonsense will save the day. What a precious talent that is

            • “What information — that we are all about to die? That there is nothing that can be done about this?” TDG

              Has anyone ever mentioned to you that you emanate a lot of NEGATIVE WAVES?

              I don’t agree that EVERYBODY will die, just MOST people will die.

              I also don’t agree nothing can be done about it.


            • I can thump on a drum and spout positives while dancing about the fire as we all share a loaf of bread and a jar of peanut butter if you like.

              But I like facts.

              And the facts are we are about to enter a situation where there will be no energy (beyond using trees for fire) or industry — and we have thousands of spent fuel ponds scattered around the planet.

              They require a fully functioning BAU with supply chains, spare parts and energy to manage them.

              That is very obviously not going to be possible.

              Therefore we are facing an extinction event:

              Containing radiation equivalent to 14,000 times the amount released in the atomic bomb attack on Hiroshima 68 years ago, more than 1,300 used fuel rod assemblies packed tightly together need to be removed from a building that is vulnerable to collapse, should another large earthquake hit the area. http://www.reuters.com/article/2013/08/14/us-japan-fukushima-insight-idUSBRE97D00M20130814

              The problem is if the spent fuel gets too close, they will produce a fission reaction and explode with a force much larger than any fission bomb given the total amount of fuel on the site. All the fuel in all the reactors and all the storage pools at this site (1760 tons of Uranium per slide #4) would be consumed in such a mega-explosion.

              In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material – See more at: http://www.dcbureau.org/20110314781/natural-resources-news-service/fission-criticality-in-cooling-ponds-threaten-explosion-at-fukushima.html

              A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel.

              To estimate the Cs-137 inventory in the pool, for example, we assume the Cs137 inventory at shutdown is about 0.1 MCi/tU with a burn-up of 50,000 MWt-day/tU, thus the pool with 400 t of ten year old SNF would hold about 33 MCi Cs-137. [7]

              Assuming a 50-100% Cs137 release during a spent fuel fire, [8] the consequence of the Cs-137 exceed those of the Chernobyl accident 8-17 times (2MCi release from Chernobyl). Based on the wedge model, the contaminated land areas can be estimated. [9] For example, for a scenario of a 50% Cs-137 release from a 400 t SNF pool, about 95,000 km² (as far as 1,350 km) would be contaminated above 15 Ci/km² (as compared to 10,000 km² contaminated area above 15 Ci/km² at Chernobyl).


              Blather on as much as you like about my negativity. But unless you have a solution to managing these monsters, then you are nothing but white noise.

              Have you noticed that the PTB are (other than militarizing the police) doing nothing in anticipation of the end of days.

              Their only response to the fact that we have hit the end of growth is to pour out more money to try to keep delay collapse as long as possible.

              They know what I know.

              They know that there is no possible way to manage these spent fuel ponds and that when they explode they will shower the planet for decades with massive amounts of radiation that will kill everything that moves.

              Just because you don’t want this to happen. Just because it is unthinkable. Just because your mind can deploy the defense mechanism known as cognitive dissonance permitting you to actually believe that 1+1 = 3 and not 2.

              Well, that does no dispel the facts.

              Unless you are a cockroach (do they really survive high radiation doses?) then you will not be around for very long post collapse. None of us will

              Given that not a single one of us is equipped with the knowledge or the mental facilities to live in what will be very primitive post collapse conditions, I expect most will welcome death.

            • Perhaps we should instead be focusing on what we can do today instead, since none of us can really fix the spent fuel problem. Maybe it is this bad, maybe it isn’t. Worrying about it doesn’t really do any good.

            • I agree with not worrying about things we can do nothing about, which is why I get on with things I can affect “as if” there wasn’t resource depletion, a crazy financial ‘system’, possible nuclear war, Fukushima and so on and on.

              I know that what I write and other things I do will have zero global impact, but discussion is interesting in its own right and what I am mainly focussed on now is about obtaining justice in a local context of aged care, which I cannot help doing because I’m just being myself.

            • Maybe it is this bad, maybe it isn’t. Worrying about it doesn’t really do any good.

              Worth repeating!

              On the other hand, it may be worth having some simple precautions. There is a much greater chance of a continuous build-up of background radiation levels, punctuated by acute spikes. One can do certain things to ameliorate that.

              On still yet another hand, an asteroid could come crashing into the Earth. I find that equally worthy of my excess worry.

            • @TDG … “The problem is if the spent fuel gets too close, they will produce a fission reaction and explode with a force much larger than any fission bomb given the total amount of fuel on the site.”
              And you have a link to a reputable source or the calculations for that? … Thought not …
              I’ve also read that the quickest way to solve the problem is to simultaneously explode three or four tactical nuclear devices at Fukushima … I doubt that would work, but TBH that’s somewhat above my pay grade …

            • Feel free to ask the guy who wrote it:

              Hui Zhang

              Senior Research Associate, Project on Managing the Atom

              Telephone: 617-495-5710
              Fax: 617-496-0606
              Email: Hui_Zhang@harvard.edu


              Hui Zhang is a Senior Research Associate at the Project on Managing the Atom in the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government. Hui Zhang is leading a research initiative on China’s nuclear policies for the Project on Managing the Atom in the Kennedy School of Government. His researches include verification techniques of nuclear arms control, the control of fissile material, nuclear terrorism, China’s nuclear policy, nuclear safeguards and non-proliferation, policy of nuclear fuel cycle and reprocessing.

              Before coming to the Kennedy School in September 1999, he was a post-doctoral fellow at the Center for Energy and Environmental Studies, Princeton University from 1997-1999, and in 1998-1999, he received a post-doctoral fellowship from the Social Science Research Council, a MacArthur Foundation program on International Peace and Security. From 2002-2003, he received a grant for Research and Writing from the John D. and Catherine T. MacArthur Foundation. Hui Zhang received his Ph.D. in nuclear physics in Beijing in 1996.

              Dr. Zhang is the author of several technical reports and book chapters, and dozens of articles in academic journals and the print media including Science and Global Security, Arms Control Today, Bulletin of Atomic Scientist, Disarmament Diplomacy, Disarmament Forum, the Non-proliferation Review, Washington Quarterly, Journal of Nuclear Materials Management , INESAP, and China Security. Dr. Zhang gives many oral presentations and talks in international conferences and organizations.

              Cognitive dissonance is such an interesting phenomenon.

              When the facts are potentially so damaging to the psyche of an individual, to the extent that they might drive someone to deep depression, even suicide, this defense mechanism is capable of convincing the brain that 1+1 does not = 2.

              Those are the facts my friend. And they are presented by one of the leading experts in nuclear energy.

              It took me a very long time to find this article. Trust me, there is not much out there on this topic because of course it is unthinkable to suggest that these ponds might be left unmanaged.

            • @Richard: I don’t think blowing up nuclear fuel rods with tactical nukes is a good idea.

            • I have a SOLUTION to the Spent Nuke Puke Fuel Rod Issue. 😛


              We take all the spent fuel, Glassify it, then drop it into Boring Capsules which we drop into the Marianas Trench in the Pacific in a Subduction Zone. The capsules will bore to a depth of 1000 feet beneath the Ocean Floor, and then gradually over time they will be absorbed into the Mantle of the Earth, with the most dense elements like Plutonium eventually ending up in the Core of the Earth with the rest of the Uranium down there.

              This will take the Nuke Puke out of the Biosphere Environment and allow for healthy regeneration of the Planet.


            • OR — why not just mix the spent fuel rods with cheap hamburger and feed them to cockroaches?

          • There is always the Marianas Trench. You would have to think at some point those in charge would shut down and transport these fuel rods to a more permanent deep water storage. I’m sure they won’t get it all but living on an island on the pacific coast the radiation from Fukushima has finally arrived and it is negligible. Dilution is the solution.

            • I thought of the Marianas Trench myself J, see above. I added glassifying & boring the material into the crust in a subduction zone so it doesn’t actually dissolve into the ocean water.


      • Try using Google Chrome. My 8 year old computer bogs down with Firefox but opening the site with Chrome works fine.

        • I am using Firefox with a 3 year old Laptop. Site runs OK. Probably would run faster and better with Chrome, but I wanna hold onto Firefox if I can because it is Open Source.

          There are sacrifices to be made either way. I could pull all the scripts off and make the pages load faster on older and slower computers, but I cannot do that and ALSO provide feeds from all the major collapse websites.

          What I recommend is this. If you don’t want to get your system set to handle the scripts and not bog down, simply don’t hit that page on the Diner, it’s the only one using that much scripting. The Homepage has some now also, but not as much as the Newz page does..I haven’t had complaints on the Homepage yet.

          The downside for the user if you do not set to handle the scripts is that you have to go about surfing the old fashioned way, jumping from website to website to scan for information. This is time consuming, trust me I know because I have been doing that for the last 8 years since I woke up to collapse. LOL. Now, I just go to the Diner Newz Page and see what comes across the Ticker. I see something interesting come across the ticker, I click on it and it brings me to the website. It’s much faster and easier.

          It really is not that hard I think to get even an older computer to handle this stuff, just might take a little additional RAM and upgrading the OP system. I’m pretty sure I could get it to run on my older laptops without too much trouble there, but what’s the point to that? You need to replace these things every 3 years or so anyhow because they plan the obsolesence into them. At least if you want to access all the latest and greatest techno-gimmicks you do.

          Anyhow, it’s your choice, it’s up and it runs fine although I want to get it updating faster. If your computer won’t handle it, this is YOUR problem, not MY PROBLEM..


          • OK folks, try it now.

            I stripped out the rich text html in the body of the snippets, which was messing with the page formatting too. Also made the snippets shorter. Still has the links to the original articles.

            Loads faster and cleaner now, should work on even dinosaur computers. LOL.


            • Just tried the doomstead.com link … 100% of 2GHz CPU until I closed the tab …
              and that’s with a load of stuff blocked, so I’d guess it’s the images/video that is
              demanding resources.
              Hmmm … Google has very little on the landing page (unlike Bing) … just sayin’

            • It’s only using 43% of my CPU with a dozen other sites open in windows and 69! background processes running. No idea why it is consuming so much of your CPU time.

              New UPDATED list of feeds:

              Doomstead Diner,Economic Undertow, Our Finite World, Econintersect, Zero Hedge, Global Research, Salon, Collapse, Futurology, History, OilPrice, Resilience, The Slog,Wolf Street, Daily Impact, Renewable Revolution, Archdruid Report, Club Orlov, Clusterfuck Nation,Resource Crisis, Peak Prosperity,Daily Collapse Report, Prepper, Bullets Beans Bullion,Bison Prepper, SHTF Plan,TEOTWAKI,Economic Collapse,Land Destroyer,Vineyard of the Saker, Collapse of Industrial Civilization,FEASTA,George Washington,Nature Bats Last, Ambrose, Of Two Minds,Naked Capitalism,Russia Today

            • The Doomsteaddiner site still bogs my 2.6 Athlon 64 X2 dual core with 3 gigs memory computer using Firefox. 56% of cpu time. Using Chrome 48% but the animations are smooth and all the graphics load. Great site, Chrome’s free, end of discussion.

    • It is not good etiquette to constantly spam another blog with self-promotion.

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  5. Dear Gail and Finite Worlders

    This will be an attempt to expand a little bit on Toby Hemenway’s essay:


    I want to begin with four examples of real world problems. Two of them involve me, while the third I steal from Harari’s book Sapiens. The fourth I steal from Jean Martin Fortier, a small farmer in Quebec.

    First, consider the plight of an older male whose brain agility is not what it once was. He is trying to set the table with utensils for two people. Now, ordinarily, there are still some unused utensils already on the table from a previous meal. The problem the old guy has to solve is to get the correct utensils on the table with a minimum of wasted effort. A little reflection will reveal that this is a two by four problem: two place settings by four different utensils (knife, fork, small spoon, soup spoon). Do you think that the old gentleman can look at the table, commit the 8 data points to short term memory, turn around to the utensil drawer, pick out the needed utensils, and then place them where they are needed? The answer is that about the time I turned 70, that task exceeded my declining abilities.

    If you treat this as an industrial engineering problem, you can think of many solutions. For example, always pick up 8 utensils and put the unused utensils back in the drawer. That is a sort of ‘abundance’ way of solving the problem. But it doesn’t seem to me like a very elegant solution. Another possibility is to recruit my wife to stand at the table looking at what is needed, and yell at me…a solution all too frequently chosen by long time married couples.

    My solution is to count the number of each utensil I need, regardless of which place setting needs it. So I remember that I need one knife, one small spoon, no forks, and two soup spoons. I get them from the drawer, turn around, and let the visual cues tell me where to put them.

    My solution is, I think, a sort of ‘permaculture’ solution. It’s a design that works for me to accomplish the work I need to do with efficiency and pleasure. I get a little burst of good hormones when I successfully complete the task.

    Second, consider the problem of planting what Carol Deppe calls her ‘harvest all’ crops. ‘Harvest all’ crops are densely seeded, grow rapidly, and are harvested quickly as greens…which are the most efficient use of sunlight. BUT, they are annuals…which grow like weeds because they are weeds…but also leave the soil uncovered between crops. If one has a thunderstorm while the soil is uncovered, one is almost certain to lose some soil to water erosion…as happened to me last night. How to prevent the soil erosion? I think there are only two potential solutions. First, one can swear off annuals and only plant perennials. That will work, but designing a highly productive perennial system is not child’s play. Second, one can build some sort of structure which prevents the soil from eroding. For row crops, at the garden scale, a wood chip mulch works well:


    But I am dealing with a broadcast of annual seeds. Wood chips are not the solution. So I am messing around with row covers suspended above the garden plot. The idea being that the row cover dilutes the power of the most destructive force on Earth…a raindrop hitting bare soil. My solutions are not yet ready for prime time, but I’m working on it.

    Third, consider the ruins of Gobekli Tepe, from 9500 BC. The foragers who built it had quite a sophisticated society and ability to construct. What they built had no obvious utilitarian purpose. ‘That leaves us with the theory that they were built for some mysterious cultural purpose that the archaeologists have a hard time deciphering….Only a sophisticated religious or ideological system could sustain such efforts.’ ‘Gobekli Tepe suggests that the temple may have been built first, and then the village later grew up around it.’

    One of Harari’s main points in the book is that a religion or ideology is necessary to get large numbers of people to work on a project for the common good. A small band can get by just doing favors for each other, but the thousands of nomads who built Gobekli Tepe did not all have interpersonal debts sufficient to repay them for all the labor they expended. Therefore, there had to have been a religion or ideology.

    Official ‘Permaculture’ has some Principles. The Principles are an attempt to put in place an ideology (I wouldn’t call it a religion) which can facilitate the coordinated efforts of a large number of people. The picture of the circle of people in the Resilience article was not in Toby Hemenway’s essay…it was added by Resilience. However, it is not out of place, because something similar probably happened regularly at Gobekli Tepe.

    Toby is fond of showing the painted streets used for neighborhood parties in Portland, OR. Projects and rituals and celebrations like the painted streets which bring people together in a common purpose are also probably very similar to what happened at Gobekli Tepe.

    Fourth, I was at a farming conference back in February. The permaculturist Peter Bane was our guest of honor. I had, about a week before, heard Jean Martin Fortier talk at the Duke Gardens. Several people at the conference were complaining about the difficulty of making any money with a small farm. Jean Martin and his wife make a pretty good living on their very small farm. Jean Martin is one of the most disciplined farmers I know. When he designed his farm, he located the toilet centrally to minimize the time spent walking to the toilet. This attention to detail and efficiency marks everything he does. He has also succeeded in building his soil carbon level up to 14 percent…as compared to less than 2 percent on the average farm in North America. I remarked to Peter Bane about the designed location of the toilet. Bane told me, ‘that’s why he is successful’.

    I think Toby Hemenway is right that permaculture is much more about engineering than it is about science. Efforts to try to make permaculture into a scientific enterprise are probably futile. Science can reveal to us the importance of a soil food web and high carbon content in the soil…but the engineering methods used to achieve those goals will vary farm by farm and plot by plot. The achievement of the goals requires that we have a good set of tools in our kit. Mollison and Holmgren laid out some tools 40 years ago. They also gave us the Principles, which they hoped would facilitate cooperation among large numbers of basically Anarchist people. But their books should never be taken as some Gospel. Following instructions is likely to just get you into trouble.

    My take on our situation is:
    A. The systemic threats to humanity’s continued existence are real.
    B. We have a fairly good set of tools dealing with food, water, and shelter. Most people, however, are woefully ignorant of the tools which will likely be required in the not too distant future.
    C. We currently have the best system ever devised to foster global cooperation…the globalized system of capitalism. However, Peak Everything may lay waste to Global Capitalism. It is time to think very deeply about Gobekli Tepe.

    Don Stewart

    • Thanks Don,
      my pick off Toby Hemenway’s article:

      “What a relief to find that a whole-systems approach could tie together the many disparate pieces of my life.”
      my comment: what a shame we have chosen to manage everything in the exact opposite way. Or maybe we had to, then the shame is to have been unable to oppose any significant resistance, in aggregate.

      Another interesting text by Toby Hemenway, published on OFW 2 years ago: https://ourfiniteworld.com/2012/12/26/is-sustainable-agriculture-an-oxymoron/

    • Don, unfortunately the belief that ties the U.S. together is war, fear, and death. One might just say Satan for short.

  6. Pingback: Putting the Real Story of Energy and the Econom...

    • Thanks! It is hard to believe that all of the debt associated with the large amount of housing in China will ever be repaid, even with lower interest rates and extended payment terms.

    • China government firm’s default shocks market — Is more to come?
      HONG KONG (MarketWatch) — Chinese power-equipment maker Baoding Tianwei Group made history this week, becoming the first-ever Chinese government-owned company to default on its debt.
      The news came just one day after another milestone, in which Kaisa Group Holdings 1638, -1.89% became the first Chinese real-estate developer to default on a U.S.-dollar-denominated bond. But it was the Tianwei case that holds far greater implications for Chinese markets: State-owned enterprises (SOEs) such as Tianwei are traditionally seen as enjoying implicit government support and therefore possess lower default risks.

      • I agree–this is a shock. But this debt is not a direct government debt, so that might be the excuse. Not all of the debt outstanding can be paid.

  7. The problem with radiation:

    Four years after an earthquake and tsunami destroyed Japan’s Fukushima nuclear plant, Tokyo Electric Power Co. is still at work trying to clean up the scene. This month TEPCO sent two specially-designed shape-shifting robots into the Fukushima No. 1 nuclear reactor to assess the damage.

    The first of the unnamed snake-like 60 cm (24 in) robots—which use wheels to roll along in a “C” shape and convert to an “I” shape to shimmy through pipes—got stuck after moving about 10 meters (pdf) into the reactor’s ruins on April 10, and was abandoned. The second robot, which took a different route yesterday, completed its mission, but was also abandoned after it suffered damage to its camera from the high radiation levels.

    Even if the robots hadn’t been damaged, a Pixar-style “WALL-E” ending was never in the cards: As IEEE Spectrum notes, the robots became so radioactive that they would have been permanently stored in a shielded box if they had returned from their missions.

    Before their demise, the robots—designed by the International Research Institute for Nuclear Decommissioning and Hitachi-GE Nuclear Energy—measured radiation levels of 5.9 sieverts an hour. By comparison, brief exposure to levels of 10 sieverts per hour would cause death within a few weeks for humans.


    Keep in mind that Fukushima is still being cooled by thousands of tonnes of water being pumped onto the melted cores. If that were halted we the release of radiation would be astronomical and unremitting.

    Of course post collapse we could ask for volunteers to pour buckets of water on this nightmare, replacing them each shift as they died like those robots.

    • If there is one thing that could come from a mass awareness of the situation, it would be a mass drive to dry cask as much fuel as possible now, and to have dry casks on hand to continue the process as soon as fuel is cool enough to be dry casked.

      It seems amazing to me that there is so much complacency within the nuclear power industry.

      • One thing that amazes me in this case is the design: they placed the spent-fuel pond above the reactor:
        “The (spent-)fuel assemblies are situated in a 10 meter by 12 meter concrete pool, the base of which is 18 meters above ground level.”

        18 meters high!! I assume they have been reluctant to place it higher…
        And of course:
        “The pool was exposed to the air after an explosion a few days after the quake and tsunami blew off the roof. The cranes and equipment normally used to extract used fuel from the reactor’s core were also destroyed.”

        So before even thinking of dry-cask, they first must imagine how to remove the rods, some of which are likely distorted, moreover.
        “Tepco initially planned to take two years before reducing the schedule to one year in recognition of the urgency. But that may be an optimistic estimate.”

        The quotes are from the Reuters article already linked by TDG (http://www.reuters.com/article/2013/08/14/us-japan-fukushima-insight-idUSBRE97D00M20130814)

        • Reactor #4 has had all the spent fuel rods removed as of December, 2014.


          The other three reactors, 1, 2 and 3, the spent fuel ponds were not damaged or leaning, so they are “safe”, plus the reactor cores of all three melted down so they are too radioactive to work on.

          I was referring more to the >1000 operational reactors in the world, that the spent fuel ponds should have any racks that have sat for 10+ years dry casked, which would also lower the total amount of rods in the ponds, reducing the heat and in some cases, maybe eliminating the need for constant active cooling.

          The spent fuel ponds were originally designed to passively cool, without needing circulating pumps constantly running. As they kept loading them tighter and tighter with more and more fuel, we end up with the situation we have now where a couple hours without cooling and they start boiling off water and separating oxygen/hydrogen, forming an explosive mixture.

          • It would appear that one core would be all that is needed to destroy the world, based on the information below.

            In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material – See more at: http://www.dcbureau.org/20110314781/natural-resources-news-service/fission-criticality-in-cooling-ponds-threaten-explosion-at-fukushima.html

            A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel.

            Is this not the ultimate hubris? Man believed in his brilliance to such an extent that he assumed he could always innovate his way out of the most complex problems.

            Even Edgar Allan Poe couldn’t come up with something so nightmarish.

            This is one subject that stays on FW. I would not dream of suggesting to anyone that this is what awaits us (at risk of being shipped to the asylum).

      • That would appear to make sense. Yet not only is that not happening, we are producing more spent fuel every day and more nuclear reactors are being built.

        So one has to ask the question – why?

        I believe the answer is that it does not matter if we continue down this path. Based on this information we are already dead no matter what we do once the collapse of civilization comes

        In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material – See more at: http://www.dcbureau.org/20110314781/natural-resources-news-service/fission-criticality-in-cooling-ponds-threaten-explosion-at-fukushima.html

        A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel.

        If I know this you can be damn certain the PTB are very much aware of this.

        • Hi TDG, this may help you out a bit: http://enenews.com/tv-radioactive-waste-spilling-pacific-ocean-after-power-outage-hits-fukushima-radiation-expert-plant-radioactive-unstable-never-be-contained?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ENENews+%28Energy+News%29

          BTW I assumed that [profanity deleted — moderator] was probably a global extinction event within the first month of the accident happening and joined Enenews shortly thereafter, but got banned after a few months because I called the “alternative energy/technology/survivalist, etc,” commenters “muppets”.

          I still follow the site – get near-daily updates – for obvious reasons and I notice that there are FAR fewer “alternative” types around.

          • Gerry – here’s an interesting observation I have made.

            I have corresponded with ‘Tyler’ at Zero Hedge over a letter that he published that vehemently stated that the US woes are due to corruption and stupidity within the government and central banks – and that all would be well if those could be eliminated.

            I submitted a letter stating that the problems are all related to the end of cheap to extract oil and that there was no solution.

            He disagreed and left it with ‘the central bankers are stupid – that is why we are where we are’

            Of course he cannot go where man has never gone before. He can NEVER accept my ultra-logical argument because it would make his website irrelevant because the site is entirely about moaning and bitched about the PTB and the MSM.

            If he were to take the position that energy is the problem then the discussion would be over.

            In parallel we have the Finite World blog. I have presented very strong evidence from an eminent scientist stating that a single fuel pond left unmanaged would result in an atomic explosion many thousands of times larger than the Little Boy bomb.

            This renders all discuss on this blog irrelevant. So members choose to disagree (without any facts) or worse, simply dismiss it because all discussion of the finite world would need to end.

            Rather amusing how the human psyche operates. If we don’t like that 1+1=2 … we make it equal 1098, or 2877654, or 0.

            Too bad the mind cannot conjure up find of a few trillion barrels of cheap oil!

        • In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material

          Apples and oranges comparison. No, not even that — more like apples and concentrated malic acid comparison.

          A nuclear weapon is a highly efficient device, painstakingly designed and crafted by thousands of scientists and engineers to produce the biggest bang for the least amount of material. A cooling tank is a random assortment of industrial garbage, albeit garbage capable of producing considerable heat.

          One might just as well note that computer chips and sand are both made of silicon, so all the ocean beaches are about to turn into giant computers.

          I’m not defending nuclear power here, of which I am vehemently opposed. But neither do I take kindly to needless fear-mongering.

  8. Hi Gail,

    This is a fascinating analysis, and the question is how do the consequences show up in the monetary system, as deflation or inflation or stagflation? A very difficult question to answer, I know, because it in turn depends on the imponderable of what will the Fed and other central banks to in response to continuing reduction in prices – commodities, wages and discretionary expenditures?
    My guess is that they’ll try to generate inflation, through further QE, perhaps helicoptered in as Steve Keen suggests, with the possible quite different outcomes that either it doesn’t work, and deflation sets in; or it overworks, and hyperinflation sets in; or deflation is followed by inflation.


    • I think the result will be “none of the above”. Governments will fail; goods won’t be available; banks will close. We think in terms of what we have known before, but they don’t really don’t match up with what is coming.

      One scenario we can understand–derivatives and debt defaults will hobble banks. Governments will not be able to take on more debt to bail out all of these banks. Instead, they will take the majority of accounts in many banks to offset the losses. Businesses will be unable to pay their employees. Even those who thought that they had money in the bank will find that it has mostly disappeared, or is lost to $100 per week withdrawal limits. Supposed insurance on accounts won’t really work.

      Another scenario: The electrical system mostly stops working. Banks can’t figure out what deposits and loans people had. We need to start over.

  9. * 1177 B.C.: The Year Civilization Collapsed, by Eric H. Cline *

    This is a book about the global collapse that happened at the end of the Bronze Age.
    An excerpt from a review (http://press.princeton.edu/titles/10185.html):
    “In 1177 B.C., marauding groups known only as the “Sea Peoples” invaded Egypt. The pharaoh’s army and navy managed to defeat them, but the victory so weakened Egypt that it soon slid into decline, as did most of the surrounding civilizations. After centuries of brilliance, the civilized world of the Bronze Age came to an abrupt and cataclysmic end. Kingdoms fell like dominoes over the course of just a few decades. No more Minoans or Mycenaeans. No more Trojans, Hittites, or Babylonians. The thriving economy and cultures of the late second millennium B.C., which had stretched from Greece to Egypt and Mesopotamia, suddenly ceased to exist, along with writing systems, technology, and monumental architecture. But the Sea Peoples alone could not have caused such widespread breakdown. How did it happen?

    In this major new account of the causes of this “First Dark Ages,” Eric Cline tells the gripping story of how the end was brought about by multiple interconnected failures, ranging from invasion and revolt to earthquakes, drought, and the cutting of international trade routes. Bringing to life the vibrant multicultural world of these great civilizations, he draws a sweeping panorama of the empires and globalized peoples of the Late Bronze Age and shows that it was their very interdependence that hastened their dramatic collapse and ushered in a dark age that lasted centuries.”

    It confirms that the recipee for a global collapse is a global interconnectedness/interdependance (which is necessary for an increase in complexity).

    Some also highlight concomitant factors,
    like Linda Marsa insisting on the prior changes in climate, in a short sci-fi essay (http://aeon.co/magazine/society/welcome-to-earth-population-500-million/),
    “But a 2012 study revealed that surface temperatures of the Mediterranean Sea cooled rapidly during the years around 1200 BCE. Archeological records suggest this precipitated a severe drought that led to food shortages, mass migrations, and internal rebellions by poor and agrarian peasants. Ultimately, the major cities of these once-thriving Bronze Age societies were destroyed by invading armies likely fleeing their own drought-stricken homelands, prompting the loss of culture, languages and technologies. The result was the first Dark Ages – the late-Bronze Age crash – when these once-sophisticated and complex societies ceased to exist. It took centuries to recover and rebuild.”

    or François Roddier who additionally blames the unique currency (see §.12 of the presentation he made on March 12; google translation of the transcription: https://translate.google.com/translate?sl=fr&tl=en&u=http%3A//francois-roddier.fr/pdf/Shift-Roddier.pdf),
    “12. The economic transitions:
    Like animals, man tends to deplete natural resources. Maltus had seen it. Historically, it started with the depletion of arable land. Then there was the case of raw materials. The end of the Bronze Age is located at 1177 BC. JC 13 . The precise date can surprise. Physicists speak of abrupt transition. This was indeed the case.
    Everyone today knows that our oil resources have reached their peak production. But oil has become one of our major energy resources. It means that the energy prices will rise inexorably. Therefore its inverse, the temperature T of the economy (Section 10) will decrease and go below the critical point. This leads us to an economic transition.
    This is reflected by the growing debt of the society. The case of a society isolated or largely dominant, does not pose too many problems. This society re-issues currency because it can support a devaluation. The problem arises when several states conduct trade with the same currency. This was the case in 1177 BC where different Mediterranean civilizations were committed in intense trade with a single currency, the gold. This is the case today in Europe where different countries are engaged in trade business with a single currency the Euro.”

    No doubt that many conditions are required for a collapse, which can then be triggered by any trivial detail, but IMHO what determines the amplitude of the crash seems to be the level of inteconnectedness. Today we’re globally tight-coupled.

    • Brilliant work, Stefeun! I never knew about the abrupt end of the Bronze Age. I do recall something about iron being somewhat inferior, but more plentiful and able to be worked at lower temperatures, thus reducing the amount of wood needed. In other words, civilization devolved from bronze to iron, rather than evolving.

      Panarchy theory describes a loop in three dimensions, and notes that interconnectedness and resource use increase to a point where they cannot be sustained, resulting in rapid dissolution. If too much resource is consumed or damaged, the next time through the loop is at a much lower amplitude.

      This also fits in well with Tainter’s theory that, at some point, a civilization becomes so complex that all its resources are devoted to maintaining that complexity, leaving little or nothing left over for stuff like, well, food, for example.

      Isn’t it great to live in such interesting times!

      • Thank you Jan,
        it wasn’t a real work, though, I just quoted texts written by others.
        Your mention of the Panarchy cycle is interesting, as there seems to be a great similarity with the Carnot-type thermodynamical cycles F.Roddier describes in his presentation (which I haven’t been able to fully grasp, so far).

      • Iron, you just need the iron and charcoal to make it. Bronze, you need tin and copper, which often occur far away from each other. The Greeks and Romans probably got Tin from England and Copper from what is now Turkey, for example, which is quite a long supply chain with the ships and sails they had at the time.

      • Thanks RE, but I won’t, as it’s not my production and my historical knowledge is unsufficient (and I didn’t even read the book!).

    • From the Q&A …
      ” On the other hand, when one thinks about it, that in itself makes sense — civilizations have survived droughts; they have survived famines; they have survived earthquakes; they have survived invaders; but in almost every case, they only had to handle those disasters one at a time. So, when there are multiple disasters all at once, that’s when civilizations might not be able to outlast and survive them. And that seems to have been the case at the end of the Late Bronze Age.”

      Seems like this was _not_ a collapse caused by Complexity – though the prologue is intriguing. Thanks Stefeun, great find, another book to read … 🙂

    • @Stefeun … “When the wealth gradient reaches a critical value, economic cycles are self
      organize.” – Roddier (11 Economic Cycles)
      Has this gained something in translation?

      • Richard,
        not that I’m fully sure of my understanding, but I think F.Roddier doesn’t talk about economic activity, but about economic cycles, ie the full loop development/production/obsolescence/transition (in the latter 2 phases a parameter is decreasing, resp. the potential and the volume).
        I agree that his phrase is prone to misunderstanding, but I’m pretty sure that he doesn’t mean that inequalities create economic activity. I know he’s convinced that the so-called “trickle-down” theory is utter nonsense.

        As for your previous comment, I didn’t say that collapse was caused by complexity, my point was rather to say that the magnitude of the collapse is directly related to the level of interdependance/interconnectedness, that is slightly different.
        Kinda like the domino effect, if they’re distant enough to one another, one of them can fall without impacting the others, but if they’re too close, the initial shock propagates to all dominoes.

        • Dear Stefeun
          The Google translation of the article left a little to be desired. But the thought I had as I read about the ‘inequality’ requirement is similar to the statement that at a uniform temperature, there is no flow.

          So if I am a farmer growing wheat, and you are a farmer growing beans, and we are both getting maximum productivity from our land and our capital and our skills, then we will trade with each other. If our farms, our land, our capital, and our skills were identical, then we would not trade. Each of us would simply grow some wheat and some beans and use ourselves what we produce. We would avoid the costs of trade.

          Don Stewart

          • “We would avoid the costs of trade.”

            It totally depends on what school of economics you believe in, whether trade is a frictional cost or whether trade is the most important thing in the world.

            If you specialize, you can be better at a smaller number of skills, but on the other hand, if you focus too much on specialization, you end up with monoculture farming.

    • Interesting! I looked at the Roddier article, and found it especially interesting. This is the clearest explanation I have run into regarding the parallels with the situation in chemistry.

      Roddier talks about the need for two currencies, but it is not clear to me that this solves the problem–interchangeable currencies are close to equivalent. Also, in our current situation, Roddier talks says, “What we are proposing here is to create a two way metabolic: one related to fossil fuels; one related to renewable energy.” I don’t think that Roddier understands that most of what is called “renewable energy” is, in fact, part of the fossil fuel system. This supposedly renewable energy also draws down irreplaceable stocks of high quality ores. Totally renewable energy is way too close to the empty set, at least in comparison to what we are used to.

      Also, Roddier seems to see a second circular economy taking the current economy’s place. With the amount of truly renewable energy available and degraded state of resources, this would support very few. Also, humans have evolved to use more energy than they receive from food. A “circular economy” is not possible for this reason. It also could not include any minerals mined from the soil, since concentrated mineral ores are a one-time gift. Even reprocessing does not fix this problem, because there is always a loss, even in recycling. I think his attempt at salvation doesn’t work. His diagnosis seems to be right, though.

      • I agree, Gail,
        and I’m convinced that Roddier knows that humans and their domesticated species will soon have to live within the solar budget (far lower than current “fossil budget”).

        I think his purpose is not to avoid the unavoidable crash of BAU, but to help mitigate the negative effects of the collapse.
        From this point of view, his proposal is not stupid at all, because complementary currencies have interesting virtues, as the economist Bernard Lietaer has been showing for years (Roddier’s theory somewhat confirms Lietaer’s semi-empirical findings).

        Lietaer denounces the “positive interest rates” and promotes a diversity of currencies:
        “The use of positive interest alone is responsible for driving (1) the short-term thinking that drives our economic decisions, (2) the relentless pressure for economic growth which feeds hyper-consumerism; (3) growing inequities; (4) the greed and rampant speculation which regularly make the front page of our media, (5) and the weakening of social ties and erosion of community.(…)
        Promoting a healthier monetary system requires the use of three different kinds of currencies alongside our national currencies: (1) an inflation-proof global complementary currency designed to stabilize the world economy; (2) business-to-business currencies designed to counteract the effects of conventional money shortages during periods of economic crises and contraction; and (3) community currencies that address a variety of social problems and strengthen the fabric of society.”

        “A number of pioneering governments, businesses and communities around the world have successfully experimented with new monetary systems for years, and with great results. We have at our disposal all the monetary tools we need to reduce poverty, clean up the environment, and provide access to meaningful work, housing and health care. It is now time to use them on a larger scale. A world of sustainable abundance is actually possible, but only if we are willing to upgrade our monetary system so that we can begin to leverage true human wealth, which is our energy and creativity. Will you please join me in making sure that we do not miss this opportunity? Your own future, the future of your children, and of this extraordinary planet is at stake.”

        Unfortunately, B.Lietaer seems to completely miss our energy problem. Such alternative monetary systems -more or less related to gift economy- can for sure improve the social link and wellbeing of the users, but our main problem remains, i.e. the decreasing (crashing?) net energy input in our global system, which will lead to the disappearance of our actual main currencies. Maybe they can help during the transitory phase, however, if ever the path “from here to there” lets some room for islands or steps of stability.

        • The gift economy is what existed before current financial systems. I expect that is what we really will have to transition back to. To transition back to this, we need to operate is such small numbers that we know everyone else (thus, fewer than 150 people). A gift economy can co-exist with the current economy, and in fact does, through families and churches. But I am doubtful about another different financial system making a difference.

    • Egypt, which was like the United States of now, survived, thanks to Ramses, the pharaoh Hollywood loves to hate (even though he probably had nothing to do with Moses).

      Such will be the fate of the elites. A hero will save them.

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