What Greece, Cyprus, and Puerto Rico Have in Common

We all know one thing that Greece, Cyprus, and Puerto Rico have in common–severe financial problems. There is something else that they have in common–a high proportion of their energy use is from oil. Figure 1 shows the ratio of oil use to energy use for selected European countries in 2006.

Figure 1. Oil as a percentage of total energy consumption in 2006, based on June 2015 Energy Information data. (Inverted order from chart originally shown.)

Figure 1. Oil as a percentage of total energy consumption in 2006, based on June 2015 Energy Information data. (Inverted order from chart originally shown.)

Greece and Cyprus are at the top of this chart. The other “PIIGS” countries (Ireland, Spain, Italy, and Portugal) are immediately below Greece. Puerto Rico is not European so is not on Figure 1, but it if were shown on this chart, it would appear between Cyprus and Greece–its oil as a percentage of its energy consumption was 98.4% in 2006. The year 2006 was chosen because it was before the big crash of 2008. The percentages are bit lower now, but the relationship is very similar now.

Why would high oil consumption as a percentage of total energy be a problem for countries? The issue, as I see it, is competitiveness (or lack thereof) in the world marketplace. Years ago, say back in the early 1900s, when countries built up their infrastructure, oil price was much lower than today–less than $20 a barrel (even in inflation-adjusted dollars). Between 1985 and 2000 there was another period when prices were below $40 barrel. Back then, the price of oil was not too different from the price of other types of energy, so an energy mix slanted toward oil was not a problem.

Figure 2. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Figure 2. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Oil prices are now in the $60 barrel range. This is still high by historical standards. Furthermore, much of the financial difficulty countries have gotten into has occurred in the recent past, when oil prices were in the $100 per barrel range.

While countries with a large share of oil in their energy mix tend to fare poorly, at least some countries with a preponderance of cheap energy fuels in their energy mix have tended to do very well. For example, China’s economy has grown rapidly in recent years. In 2006, its share of oil in its energy mix was only 23.0%, putting it below Norway but above Poland, if it were included in Figure 1.

Let’s look a little at what it takes for an economy to produce economic growth, and what goes wrong in countries with high energy costs. I should mention that high energy costs can occur for any number of reasons, not just because a country’s energy mix includes a large proportion of oil. Other causes might include a high percentage of high-priced renewables or high-priced liquefied natural gas (LNG) in a country’s energy mix. The reason doesn’t really matter–high price is a problem, whatever its cause.

What Is Needed for an Economy to Grow

The following reflects my view regarding what is needed for an economy to grow:

1. A growing supply of energy products, either internally produced or purchased on the world market, is needed for an economy to grow.

The reason why a growing supply of these energy products is needed is because it takes energy (human energy plus supplemental energy) to make goods and services.

The availability of today’s jobs is also tied to the use of supplemental energy. High-paying jobs such as operating a bull-dozer, producing large quantities of food on a farm using modern equipment, or operating a computer, require supplemental energy in addition to human energy.  While jobs can be created that use little supplemental energy to leverage human energy (for example, manual accounting without electricity or computers, growing food without modern equipment, or digging ditches with shovels), these jobs tend to pay very poorly because output per hour worked tends to be low.

To obtain growth in the number of jobs available to workers, a growing supply of energy products to leverage human energy is needed. Looking at the world economy, we can see that historically, growth in energy consumption is highly correlated with economic growth.

Figure 3. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

Figure 3. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

In fact, we tend to need an increasing percentage growth in energy supply to produce a given percentage growth of GDP because the y intercept of the fitted line is -17.394, rather than 0.000. Back in 1969, 1.0% growth in the consumption of energy products produced 2.2% GDP growth. The fitted line implies that recently, the amount of GDP growth associated with one percentage growth in energy consumption is only 1.2% of GDP. This poor result is taking place, despite all of our efforts toward increased efficiency. Thus, as time goes on, we need more and more energy growth to produce the same level of GDP growth. This is a rather unfortunate situation that world leaders don’t mention. They tend to focus instead on the fact that the growth in GDP tends to be at least a little higher than the growth in energy use.

2.  This growing energy supply must be inexpensive, in order to be able to create goods that are competitive in the world market. 

Human energy is by its nature expensive energy. Humans require food, water, clothing, and housing to support their biological needs–we are not adapted to eating entirely uncooked food, or to living in climates that get very cold in winter, unless we have protection from the elements. Thus, wages must be high enough to cover these costs.

Cheap supplemental energy provides a great deal more leveraging power than expensive supplemental energy. If we can leverage human energy with cheap energy such as wood or fossil fuels, it is easy to bring down the average cost of energy. (This calculation is made on a Calorie or Btu basis, for the sum of the energy provided by human labor plus that provided by supplemental energy.) If we are dealing with supplemental energy that is by itself high-cost, it is very difficult to bring down this weighted average cost. This is why high-cost oil, or for that matter high-cost supplemental energy of any kind, is a problem.

If human energy can be leveraged with increasing amounts of cheap energy, it can produce an increasing amount of goods and services, ever more cheaply. In fact, this seems to be where economic growth comes from. These goods and services can be shared with many parts of the economy, including government funding, wages for elite workers, wages for non-elite workers, payback of loans with interest, and dividends to stockholders. If there are enough goods and services produced thanks to this increased leverage, all of the various parts of the economy can get a reasonable share, and all can adequately prosper.

If there is not enough to go around, then there are likely be shortfalls in many parts of the economy at once. It is likely to be hard to find good paying jobs, for ordinary “non-elite” workers. Governments are likely to find it difficult to collect enough taxes. Governments may lower interest rates, or may take other steps to make it easier for businesses to continue their operations. Even with lower interest rates, debt defaults may become a problem. See my post, Why We Have an Oversupply of Almost Everything. The entire economy tends to do poorly.

Ayres and Warr provide an illustration of how an increasingly inexpensive supply of energy can lead to greater consumption of that energy–in this case electricity–in their paper Accounting for Growth: The Role of Physical Role of Physical Work.

Figure 4. Ayres and Warr Electricity Prices and Electricity Demand, from

Figure 4. Ayres and Warr Electricity Prices and Electricity Demand, from “Accounting for growth: the role of physical work.”

There is a logical reason why falling energy prices would lead to rising use of an energy product. If a person can afford to buy, say, $100 worth of energy and the cost is $1 per unit, the person can afford to buy 100 units. If the cost is $5 per unit, the person can afford to buy 20 units of energy. If it is the energy itself that aids growth in economic output (by moving a truck farther, or operating a machine longer), then lower energy prices lead to more energy consumed. This higher amount of energy consumed in turn leads to more economic output. This greater economic output is frequently shared with workers in the form of higher wages because of the workers’ “higher productivity” (thanks to the leveraging of cheap supplemental energy).

When it comes to the cost of energy production, there are “tugs” in two different directions. In one direction, there is the savings in costs that technology can provide. In the other, there is the trend toward higher extraction costs because companies tend to extract the cheapest resource of a given type first. As the inexpensive-to-extract resources are exhausted, the cost of resource extraction tends to rise. We can see from Figure 2 that oil prices first began to spike in the 1970s. After some temporary “fixes” (shifting much electrical production away from oil to cheaper fuels, shifting home heating from oil to other fuels, and starting new extraction in Alaska, Mexico, and the North Sea), the problem was more or less solved for a while. The problem came back in the early 2000s, and hasn’t really been solved. Thus, most of the tug now is in the direction of higher costs of production.1

Once oil prices rose, Greece and other countries that continued to use a high percentage of oil in their energy mix were handicapped because their products tended to become too high-priced for customers. Wages of customers did not rise correspondingly. Potential tourists could not afford the high cost of airline tickets and cruise ship tickets, because these prices depended on the price of oil. Even when oil prices dropped recently, airline companies have not reduced airline ticket prices to reflect their savings.

Because of the high-cost energy structure, manufacturing costs have tended to be high as well. With fewer tourism jobs and few possibilities for making goods for exports, the number of good-paying jobs has tended to shrink. Without enough good-paying jobs, Greek demand for fuel products of all kinds dropped rapidly. (Demand reflects the amount of goods a person wants and can afford. Young people without jobs live with their parents, and thus do not buy new homes or cars, lowering consumption.)

Figure 5. Greece's energy consumption by fuel, based on BP Statistical Review of World Energy, 2015 data.

Figure 5. Greece’s energy consumption by fuel, based on BP Statistical Review of World Energy, 2015 data.

Other countries that were positioned to add huge amounts of inexpensive energy were able to continue to grow. The country that did this best was China. It was able to cheaply and rapidly ramp up its coal supply, once it entered the World Trade Organization in 2001. If Greece now adds production of goods, it needs to be able to compete in price with China and other goods-producers.

Figure 6. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

Figure 6. China’s energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

3. If the energy supply that a country plans to use is cheap, it doesn’t matter whether the energy supply is locally produced or not.

If the energy supply that a country is locked into using is expensive, then using locally produced high-priced energy is “less bad” than using imported energy, but there is still a problem.

If a growing supply of cheap energy is available, this can be used to leverage local human labor to produce inexpensive goods. This works well, regardless of whether the fuel is imported or not. Because imported energy “works” in such a situation, many island nations (including Cyprus and Puerto Rico) were able to develop their economies using oil as the energy base. These island nations typically did not have natural gas available, unless they imported expensive LNG. Coal and nuclear were also difficult to use, because power plants of these types are built on too a large scale to be suitable for on an island. But oil generally worked well, even if imported.

Greece includes 227 inhabited islands, and thus is faced with many of the problems of an island nation. Back when oil was cheap, oil was an easy solution. It could be used for electricity and for many processes that require heat, such as baking bread, dying cloth, making bricks, and recycling metals.

If a county is using imported oil, once oil becomes high-priced, there is essentially nothing that can be done to fix the problem. Devaluing the currency doesn’t work, because then oil becomes higher-priced in the new devalued currency. As a result, it still is prohibitively expensive to make goods, even after the devaluation. In fact, devaluing the currency also tends to make other imported energy products, such as LNG and solar PV panels, more expensive as well.

With respect to previously purchased renewables, the ongoing cost is typically the debt payments for the devices used to generate this energy. How devaluation will affect these payments depend on the currency the debt is in. If these debt payments are in the country’s own currency, then devaluing the currency will not affect the payments (so devaluation won’t help reduce costs). If debt payments for renewables are in another currency (such as the dollar or Euros), then devaluing the currency will increase the cost, making the loans more difficult to repay.

Even for an oil exporter like Saudi Arabia, high-priced oil is a problem, for a number of reasons:

  1. If the oil exporter uses some of its oil itself, the revenue that would have been gained by selling this oil abroad is lost. The government may be able to purchase the oil for essentially the cost of extraction, but it loses the extra revenue that it would gain by selling the oil abroad. This revenue could be used to fund government programs and new oil investment.
  2. The countries that import this high-priced oil tend to find their economies depressed, leading to less use of the oil. Thus, oil exports tend to become depressed.
  3. The price of oil may fall (and in fact has fallen, and may fall more), because of low demand. With low prices, it becomes difficult for exporters to collect enough revenue for government projects and investment in new supply.

The reason why locally produced high-priced oil is “less bad” than imported oil is because jobs related to producing the oil tend to stay in the country. This is a plus, in itself. If there is a currency devaluation, wage costs and other local costs will be lower, making the energy product less expensive to produce. Unfortunately, production costs (including taxes needed to support government services) may still be above the market price, because of depressed demand.

4. Debt helps increase demand for goods. But to make the debt repayable, these goods need to be made with low-priced energy products. 

Ramping up debt for a country helps, but only if, with this debt, the country is able to profitably sell more goods and services in the world marketplace. Greece seems to have added debt, but wasn’t able to use this debt to create goods and services that could be sold cheaply enough that their prices would be competitive in the world market.

China clearly has been willing to add huge amounts of debt to support all of its new industry and new homes it has built with the coal it has been extracting. There is no doubt that the growth in China’s debt has played a major role in extracting growing quantities of coal. Now China’s coal consumption is slowing for a number of reasons including overbuilding of factories, too much pollution, and higher cost of coal production. China’s slowdown in energy consumption is leading to a slow-down in economic growth, and may even lead to a hard crash.

Greece has added a lot of debt in recent years, but it has not been used for ramping up the use of a new cheap supply of energy. Instead, much of Greece’s debt seems to be for purposes such as bailing out banks. This doesn’t really tell us what is/was wrong with the economy to begin with. I would argue that high-priced fuel tends to make it difficult to make any kind of goods or services inexpensively enough to compete in the world market, and this is at least part of the problem. The result of this is that companies, no matter what they invest debt in, have a difficult time being profitable.

The Greek government tries to cover up the country’s problems with programs that are funded by debt. Hidden subsidies may be occurring in several government-owned energy-related firms: Public Power Corporation of Greece (Greece’s largest electric utility), Hellenic Petroleum, DEPA Natural Gas, and ADMIE Grid Operating Company. There have been proposals to privatize these companies because they are poorly run. Whether or not they are poorly run, I expect that it will be very difficult to run them profitably, simply because of the inherent high-cost nature of the products they produce and workers’ lack of disposable income. This problem reflects the high cost of the underlying products they are producing.

There have been some proposals to try to get energy costs down, including a proposal to install a new lignite coal-fired electric power plant. There is also a plan to connect four of the islands to the electric grid, so that the islands won’t have to depend on oil-fired electricity. Even if these changes are made, it is not clear that Greece’s energy costs will be low enough to produce goods that are competitive in the world market. For one thing, airplanes and cruise ships operate using oil, not electricity produced by lignite, so will not be affected by additional inexpensive lignite electricity production.

From everything I can see, Greece’s debt needs to be written off. There is no way that the country can change its system to repay it. Greece can perhaps repay a little new debt, if it is channeled to support low-cost energy production to substitute for current high-cost energy.


Most people don’t understand that our world economy runs on cheap energy. High-priced energy is not an adequate substitute, even if the high-priced energy is “low carbon” or claims to have a reasonably high EROEI (Energy Return on Energy Invested) ratio. Our world economy is sensitive to prices and costs, even if the current “politically correct” discussion ignores these matters.

Economies that are part of our current system can’t get along without energy supplies, either. Humans have used supplemental energy since our hunter-gatherer days, when we learned to control fire. In fact, the use of large amounts of supplemental energy seems to be the way we are now able to support a world population of 7+ billion people.

Given that the world economy runs on “cheap” energy, adding expensive energy production, no matter how “green” it may appear to be, does not solve a country’s financial problems. In fact, it likely tends to make its financial problems worse. There is no way that high-priced energy will produce goods and services that are competitive in the world market. In fact, it is doubtful that high-priced energy will return a high enough “profit” to pay its own way, in terms of having the ability to pay suitable taxes to support required government services, such as schools and roads. High-priced energy is instead likely to need government subsidies, both for initially building the devices and for helping citizens pay the ongoing cost of electricity.

Greece clearly has a lot of problems besides its high-energy cost, including excessive pensions and inefficiently operated state-owned companies. To some extent, I expect that these other problems reflect the difficulty of creating goods that can compete profitably in the world economy. If there is no way businesses can successfully compete in the world economy, I can see why leaders would do whatever they could to keep the system operating. This might mean adding more debt, keeping staffing at government-operated companies at higher levels than needed, and providing overly generous pension programs.

The thing that Greece has going for it is a relatively warm climate and a history of doing well with relatively little supplemental energy. Ancient Greece was known for its philosophy, literature and theatre, music and dance, science and technology, and art and architecture. Northern Europe, because of its cold climate, was not able to do very much until it added peat moss and coal as supplemental energy. Once these cheap supplemental energies were added, Northern Europe was able to industrialize, while Southern Europe lagged behind. If we are running into obstacles now with respect to fossil fuels, perhaps the advantage will again go back to people who live in warm enough climates that they can mostly live without supplemental energy.


[1] While cost of oil production is rising, oil prices are not necessarily rising to match the cost of production, and in fact, have fallen below the cost of production. This occurs because costs are now too high relative to wages, so oil isn’t affordable. This is an important story in its own right, and is likely to eventually bring down the whole system. See for example my post, Ten Reasons Why a Severe Drop in Oil Prices is a Problem.

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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1,257 Responses to What Greece, Cyprus, and Puerto Rico Have in Common

  1. Fast Eddy (pause) The Warlord says:

    Look. See.

    Forget Recession: According To Caterpillar There Is A Full-Blown Global Depression

    There has now been an unprecedented 31 consecutive months of CAT retail sales declines.

    This compares to “only” 19 during the near systemic collapse in 2008. In other words, if global demand for heavy industrial machinery, as opposed to unemployed millennials’ demands for $0.99 Apple apps, is any indication of the true underlying economy, forget recession: the world is now in a second great depression which is getting worse by the month.

    . but the company’s publicly disclosed monthly retail sales have just one message for anyone who follows them: forget recession, there is a global depression going on.

    And it is not just in China as many would like to scapegoat: in June, in addition to a -19% drop in Asia Pacific (following a 30% Y/Y plunge a year ago, which in turn followed a 21% drop in 2013), US retail sales posted their first Y/Y decline since February, dropping by 5%.

    But the real depression is in Latin America, where CAT retail sales plummeted by a whopping 50%: the most in reported history, and follow an 18% drop from a year earlier.

    More http://www.zerohedge.com/news/2015-07-22/forget-recession-according-caterpillar-there-full-blown-global-depression


    Now for those who don’t think collapse can be rapid, deflationary and Holocaustalistic in nature…. look no further than CAT — a bell-weather stock for the global economy

    There is a relentless drop in sales — closing in on 3 years where every single month is worse than the last….

    This is in spite of ZIRP – in spite of trillions of dollars blown on needless infrastructure and construction projects around the world…

    Nothing the PTB can do is halting the slide….

    So the slide will continue….

    But the stock price is strong! Because of buy backs using QE…

    But eventually surely CAT will hit a certain point where even if the stock price is high it just implodes …. that will be well before its sales taper down to nil….

    At some point the company will unload large numbers of workers in a desperate attempt to scale down and try to survive.

    Now keep in mind CAT is not the only company in this position — most companies are facing similar problems — shrinking markets….

    This is how you get your deflationary crack up… it will be like a snowball being pushed off the side of Mount Everest…..

  2. Fast Eddy (pause) The Warlord says:

    We are approaching a point where the oil that is in the ground will remain in the ground … forevever… because the price that the market can pay is so far below the cost to extract…


    • Peak oil folks haven’t stopped to figure out that the problem could be low prices, rather than high. So most of them seem to be waiting for the big price turn around.

      • Jan Steinman says:

        So most of them seem to be waiting for the big price turn around.

        I could still see that happening.

        I’ve long envisioned a whip-saw, volatile decline. If it is possible that current low prices can inspire a recovery of sorts, of course prices will go up until they hit the “glass ceiling” of supply constraints, at which point, they will crash again.

        Witness 2008, when oil went from an all-time high of $147 to $33 or so, but then climbed back to ~$120, before crashing to ~$40.

        If one were certain that such a scenario is to occur, one could make a lot of money. But I prefer to get off the economy to the greatest extent possible.

        • Stilgar Wilcox says:

          “Witness 2008, when oil went from an all-time high of $147 to $33 or so, but then climbed back to ~$120, before crashing to ~$40.”

          When I was on The Oil Drum in 08 after it hit it’s low and then started to slowly climb back up, I put forth the idea that 147 to the high side and 33 to the low side would never be breached again, i.e. until collapse. To my thinking the economy would never muster the get up and go to surpass 147 again, but would not slide lower than 33, with the price probably just bobbing up and down in between. Since then it’s done just that.

          We are now witnessing the pressures of worldwide consumer affordability pushing down oil price with all the major producers battling it out for market share, until supply is short once again, then a max. price will be tested again. Due to diminishing returns, consumer affordability should continue to decline while costs of new production keeps going up.

          The result of that dynamic should be a drop from peak sometime, who knows when, but some think it will occur soon. I just note changes as they occur and wait for the next one.

          “If one were certain that such a scenario is to occur, one could make a lot of money. But I prefer to get off the economy to the greatest extent possible.”

          Smart thinking, Jan. Getting in a quad mini-split hvac system on the 29th that should reduce energy output. Going from 5 seer to 20-30 seer energy efficiency. People off grid use the mini-split hvac systems so hope it will get our bill out of the 4th tier. Replaced all the bulbs with LED. Looking at Solar. Got so much to do before getting anywhere near off most of this economy – oh my! I don’t want this economy going south just yet.

          • And yet, bafflingly, rig count is up:

            It seems so incredible to me, that when oil rose to $60, people rushed out and planned more drilling. They must need to sell oil, even at a net loss, to service their existing debts.

            • A couple of things I have heard:
              1. There are two kinds of reserves–those that are under development, and those that are not. When it comes to loans, they can get a lot more credit for those under development compared to those that are not. So they may drill, to get land under development. There may also be loan covenants requiring such development.

              2. There are rigs that drill vertical wells and rigs that drill horizontal wells. Vertical well are much cheaper to drill, but don’t extract much oil. If they have to “hold” land by drilling, companies may be ordering cheap rigs to drill vertical wells. I haven’t looked at the vertical-horizontal split of drilling rigs recently. If the growth in drilling rigs represent a switch to more vertical drilling, it could be cheaper, regardless.

          • Jan Steinman says:

            I put forth the idea that 147 to the high side and 33 to the low side would never be breached again… with the price probably just bobbing up and down in between. Since then it’s done just that.

            Sounds very reasonable.

            This pattern is called “damped+oscillation” or “ringing” in physics. It results from a one-time pulse of energy into a resonant system, which may be what we have here.

            I’m always fascinated when the macro behaves like the micro. It implies some overriding principle or pattern is at work. Which implies that if you can identify the pattern, you can make reasonable predictions.

  3. Fast Eddy (pause) The Warlord says:

    A good mate was bemoaning the deflationary bust up that is ruining his stock portfolio — he’s a former banking analyst who currently runs other businesses but still is heavily involved in the markets…

    He is a very bright guy but refuses to accept that the problem is related to the cost of production of energy — I know quite a few people who are ‘analysts’ and they also refuse to accept that this is the problem.

    They also did not heed my warnings that shale was a fraud … they piled into the ‘next big thing’

    Which leads me to wonder — do these high powered finance MBA’s really give you the powers of true analysis? Or do they simply train you to work within the system which is basically smoke and mirrors… without understanding that it is smoke and mirrors?

    Kinda like another Koombaya — you have to convince yourself that the world is real (all that hard work in MBA school and the highly paid jobs help with that… and the serious people on CNBs 24/7 … and the board room meetings with more very serious people….) — and you end up analyzing what is effectively a false world … built on false premises … a world that is infinite…

    Anyway…. my mate is bewildered by all that is happening….

    I left him to ponder this:

    “There is something fundamentally wrong with the system… and we are loading nuclear bombs into the centre in an effort to stop it from blowing up”

  4. Don Stewart says:

    Jan Steinman and Others Who Are Interested

    You bring up the subject of the relative merits of Donella Meadows’ book Thinking in Systems and Capra and Luisi’s book The Systems View of Life. I would like to add a few more books and concepts to the list:
    Mobus and Kalton’s Principles of Systems Science
    Adrian Bejan’s Design in Nature
    James Howard Kunstler’s interview with Catherine Ingram
    BW Hill’s concept that energy production tends to cannibalize itself and result in a Seneca Cliff
    The work of the MacArthur Foundation as they try to design some solutions

    The overarching goal that I think any systemic solution must address is captured by this quote, which I have already called to your attention:

    ‘Conversations with Fritjof Capra helped me clarify this division between the natural and social sciences. According to Capra, “this division will no longer be possible, because the key challenge of this new century – for social scientists, natural scientists, and everyone else – will be to build ecologically sustainable communities, designed in such a way that their technologies and social institutions – their material and social structures – do not interfere with nature’s inherent ability to sustain life.’

    Now I want to delve into a few factoids which may indicate some of the issues:
    *Bejan observes that a system optimizes flow through evolution, given freedom. One example he uses is the human respiratory system. Our respiratory system optimizes the flow of oxygen in, the oxygenation of the blood, and the flow of carbon dioxide out. When we look at the materials used and the design and the pulsing rate and the size and just about any characteristic we want to look at, they all make sense in terms of facilitating the flows.
    *However, a respiratory system does not make a human body. For that, we need Captra and Luisi’s notion of a network of components, which are balanced in a Cognitive system.
    *Bejan attacks the notion of ‘mechanistic causation’. Genes don’t cause behavior and messing around with algebra to generate fractals on a screen doesn’t cause structure. ‘Mechanism is not law.’ Therefore, we have to look for ‘what is flowing?’

    And ‘Complexity is a result, not an objective; not an artist’s wish; and, contrary to current dogma based in fractal geometry, it is certainly not ‘maximized’.
    *In James Kunstler’s interview, Catharine Ingram observes that our society rewards most liberally those who distract us. Is distraction what flows in early 21st century society? Will it evolve to flow ever more easily?
    *Back to Bejan’s conception of the constructal law and Ingram’s observation. Bejan:
    ‘Everything that moves, whether animate or inanimate, is a flow system. All flow systems generate shape and structure in time in order to facilitate this movement across a landscape filled with resistance (for example, friction). The designs we see in nature are not the result of chance. They arise naturally, spontaneously, because they enhance access to flow in time.’

    In other words, if we want distraction, it will appear as if by magic. Miley Cyrus and Kim Kardashian and the rise of spectator sports are not accidents.
    *Bejan looks at some deep thinking from a variety of people:
    Faulkner: ‘Living is motion, and motion is change and alteration and therefore the alternative to motion is un-motion, stasis, death.’
    Thoreau: ‘Dwell as near as possible to the channel in which your life flows.’
    Henry George: The fundamental principle of human action is that men seek to gratify their desires with the least exertion.
    Heron of Alexander: Light bouncing off a mirror follows the shortest path between two points.
    Pierre Fermat: The broken ray of light from a stick in the water follows the minimum travel time to the eye.

    Is it true that our culture is trying to maximize distraction?
    *BW Hill points out that it is taking more energy to produce a barrel of oil, reducing the amount of work that we can derive from each barrel. The effect is non-linear and results in a Seneca Cliff. I have given an explanation for how an economic system which resists change to a lower level of work can run into severe stresses as a result. Which brings us to one of Bejan’s caveats: ‘Given Freedom’. A constrained system cannot adapt, and will probably just break. At the present time, three huge barriers to change are governments, debt, and advertising and the constant barrage of distraction.
    *Permaculture teaches us that each element must serve multiple functions. Therefore, unlike the respiratory system which can be neatly categorized as an oxygen and carbon dioxide management system, a human gets a lot more complicated. For example, there are a huge number of bicycles parked at my food co-op on Sunday mornings. What functions are the bicycles fulfilling? They are an extremely efficient way to move a human body from Point A to Point B, they give wonderful exercise which is essential to human health, they are relatively inexpensive, the speed generates exhilaration, groups of bikers stimulates the hormones of attachment to others, and so forth and so on. So the design that humans are called on to do is very much more of a balancing act than most of the examples in Bejan’s book. The design of the chain and pedals is more like Bejan, but the overall ecosystem which includes bicycles is very much more complicated, balancing conflicting objectives and is more like Capra and Luisi.
    *Capra and Luisi emphasize the elements and the network. Therefore, in order to understand a human designed system, we will have to answer a few questions. The first one is ‘What exercises overall control over the components?’ At the present time, the neoliberal answer which is dominant everywhere is ‘Nothing’. Corporations are the components and they should be free to do what they do, which is maximize profit. The counter culture tries to design elements which can both be efficient in their mission (moving something) and also lead to a healthy human and larger ecosystem. For example, a Permaculture design will involve food, water, shelter, place for family, and pleasure and a sense of purpose.

    If we accept that the global system is going to be forced toward a lower work capability, then it is urgent that we answer some more questions:
    *Is the corporation the best vehicle to find efficient flow structures in the new environment?
    *Is neo-liberalism the best vehicle to achieve balance between the components?
    *What barriers prevent corporations and neo-liberal political structures from adjusting to lower cork capability.
    *If corporations and neo-liberalism are not the right structures to achieve the goals set out by Capra in the early paragraph, can a counter-culture develop and survive?
    #As a continuation of relatively high tech society, as in the MacArthur Foundation scenarios?
    #As a low-tech society as in Holmgren/s Lifeboats?

    I don’t think there is any single source which pulls all this together.

    Don Stewart

    • urbangdl says:

      In my opinion a corporation is supposed to satisfy a need becoming better by reinvesting the income it gets selling the service or product taking an upward spiral. In the process it makes profit for the owners or the investors.
      There is nothing wrong about corporations in my opinion (open to feedback) only when they deviate from the next aspects:
      1. purpose of the product: is it worthy to spend resources and energy to make it.
      2. Limits and use to the profit
      3.Feasible and neccesary size of the corporation. which in my opinon the bigger the corporation the less we have of freedom, equity, diversity and others.

      • Artleads says:

        “There is nothing wrong about corporations in my opinion (open to feedback) only when they deviate from the next aspects:
        1. purpose of the product: is it worthy to spend resources and energy to make it.”

        This brings to mind a video Don posted yesterday, where the speaker made the distinction between doing it right, and doing the right thing.

        Doing it right could be self-driving cars. But I very much doubt that this is the right thing to do. Whither bound are those self-driving cars? And why are they going there? And how are they maintained in a world without resources? Bicycles make more sense, but I’m not sure they are the right thing either. There seem to be far more attention to doing it right than doing the right thing. IMO, the right thing is doing only what is needed to survive relative to the surrounding “environment,” and doing very little else.

    • Jan Steinman says:

      In other words, if we want distraction, it will appear as if by magic.

      It appears in my inbox every few minutes, in the form of new postings to this list! 🙂

      Gotta get recycling ready and deliver milk orders.

      Hey everyone: step away from the keyboard and do something real today!

  5. Stefeun says:

    “China’s Record Dumping Of US Treasuries Leaves Goldman Speechless”


    “… the chart above and the magnitude of the Chinese capital outflow is certainly the biggest story surrounding the world’s most populous nation: what is happening in its stock market is just a diversion.”

    Very difficult to figure out what’s really going on, to guess if someone is in control, and to evaluate the risk.

    • Thanks! I will have to admit that this is not a topic I have been following. There seem to be a lot of unanswered questions: Is China really experiencing a very large outflow of funds? Is this because foreign investors are leaving? Or because people have figured out that buying condos and stocks in the Chinese stock market are not good investments, and somehow have figured a way around capital controls?

      When so many people are trying to manipulate so many different variables, it stands to reason that something will go wrong.

  6. Pingback: News update | Peak Oil India | Exploring the coming energy crisis and the way forward

  7. kesar0 says:

    Big Oil is loosing ground, look at the “annual production chart”.
    WSJ: After Settlement, BP Faces Rocky Landscape

  8. Fast Eddy (pause) The Warlord says:

    China has Destroyed Confidence in its Markets:

    China’s leaders have gone to extreme lengths to tame the nation’s $7.2 trillion equity market. Officials allowed more than 1,400 companies to halt trading, banned major shareholders from selling stakes, suspended initial public offerings and gave a government agency access to more than $480 billion of borrowed funds to help finance equity purchases.

    “Most foreign investors are scared and stunned,” said Warut Siwasariyanon, the head of research at Asia Wealth Securities Co. in Bangkok. “It’s unlikely that there will be another major rally.”


    • Stilgar Wilcox says:

      Who the heck knows what Chinese officials were thinking when they dipped their hands into trying to control something that really only works as a ‘Free’ market, as in people can buy and sell when they want to. The trouble with what they did is when people need to panic sell the worst thing you can do to them is make them wait. That’s like having a heart attack in slow motion. Nobody wants to play the casino of a stock market if they think someone’s going to threaten years in jail for selling. They’ve taken it from ‘Free’ to ‘Controlled’ and that doesn’t work. No, you have to let people walk into the casino, throw their money around for better or worse and freely walk out. Otherwise they lose interest like the article notes.

      • Fast Eddy (pause) The Warlord says:

        Desperate times call for desperate measures….

        I would assume what they were thinking is they had no other choice…

        I think this is an indication of how close to the edge we are — as well as how far we are going to fall when we tip over.

        The PTB will pull out all stops to delay the imminent collapse.

        China is pretty much a dead man walking after this.

        • Michael Jones says:

          We can always start a major world war to keep the ball rolling
          The Great Debate
          The weapons the U.S. needs for a war it doesn’t want
          By P.W. Singer and August Cole July 20, 2015
          Fourth F-35 Lightning II arrives at Nellis Air Force Base
          The fourth Air Force F-35A Lightning II aircraft arrives at the 422nd Test and Evaluation Squadron at Nellis Air Force Base, Nevada, April 24, 2013, REUTERS/U.S. Air Force/Daniel Hughes/Handout

          Terrorism and Middle East insurgencies are not going away. Yet in the 21st century, the United States must understand it faces a return of a serious national-security concern that shaped the last century: the risk of great-power conflict.

          The Defense Department’s new military strategy acknowledges this by noting the implications of the renewed rivalry with China and Russia. The possibility of a major war with great powers, like World Wars One and Two, is “growing,” according to the U.S. National Military Strategy released this month.
          Pentagon must continue to push the development of potentially game-changing weapons. The naval electromagnetic railgun, able to fire a conventional projectile 100 miles, is one good example. As are new laser systems that are capable of offensive and defensive fire. Long-range air-to-air missiles and strike systems will be crucial against an adversary like China, which is likely to match U.S. forces in quality as well as quantity sooner than many anticipate.

          As the United States pushes forward, Washington has to recognize that a new race is afoot. China is now testing not just three different long-range drone-strike programs but a massive new drone, the Soar Eagle, potentially able to ferret out stealthy aircraft that the Pentagon is investing in.

          The issue, though, is not just one of pursuing new innovations in weaponry. Expecting modern warfare to play out the way the Pentagon plans is a risk that has to be addressed head-on. The Pentagon must plan for the worst day of war, not the best.

          And you thought you had worries?

        • I read it similarly, to halt trading in such fashion at the “crucial time” when they are promoting BRICS/AIIB deals around the world is very strange. It’s either because of immature decision making as it relates to new equity markets or total desperate measure, with the propensity of the evidence on the latter because they must now about the recent retail stampede on margin into their stock market and thus higher volatility risks. Also take into account they don’t want rehash of another 1998 asian market collapse followed by panic rush into u$d, so they should be pretty desperate to gorilla tape their system from all sides. Plus as reported and confirmed by ZH/banksters today they are probably increasing the offloading of US paper.

          However, even the mother of all global crashes could be papered over by TPTB via SDR and or some other scheme of “world leaders to the rescue” to kick the can on slightly different playground much to their own liking..

          • Fast Eddy says:

            I think it is a mistake to think that the central banks are not thinking through these decisions and actions….

            The PBOC obviously knows that the market is a bubble — their entire economy is false and would have blown to pieces long ago without global QE and ZIRP — the sell-off was lighting a fire under that heap of dry straw — and they had to put that out by whatever means possible…

            Because if that pile were allowed to catch fire the inferno would roar across the world lighting other pyres and we’d soon have the


  9. urbangdl says:

    I wonder if we are going to have a peak on “Fast Eddy’s” coments 😛
    sorry mate just kidding

    • Fast Eddy (pause) The Warlord says:

      1,197 Responses to What Greece, Cyprus, and Puerto Rico Have in Common

      I will not rest until we get to 1500 comments!!!

      • Michael Jones says:

        Its too late anyway
        One of the nation’s most recognizable names in climate science, Dr. James Hansen, released a new paper this week warning that even 2 degrees Celsius of global warming may be “highly dangerous” for humanity.

        The paper, which will be published online in the European Geosciences Union journal Atmospheric Chemistry and Physics Discussion later this week, projects sea levels rising as much as 10 feet in the next 50 years.

        The paper notes there is evidence indicating that average temperatures just 1 degree Celsius warmer than today caused sea levels to rise 16 to 30 feet and fed extreme storms thousands of years ago.

        Hansen and 16 co-authors drafted the paper as a message to policymakers that current greenhouse-gas reduction goals are not strong enough. World leaders have committed to limiting average warming to 2 degrees Celsius (3.6 degrees Fahrenheit), a goal articulated in the Copenhagen Accord in 2009 and reiterated by G7 leaders in June.

        “The message for policymakers is that we have a global crisis that calls for international cooperation to reduce emissions as rapidly as practical,” wrote the authors.

        Their projections are based on an anticipated accelerated melting of ice sheets in Greenland and Antarctica due to rising atmospheric concentrations of heat-trapping greenhouse gases. The melting ice sheets will put more cold, fresh water into the oceans, changing circulation patterns and ultimately causing even more melting of the ice sheets — thus causing sea levels to rise much, much faster than other projections have forecast.

        “We conclude that continued high emissions will make multi-meter sea level rise practically unavoidable and likely to occur this century,” the scientists wrote. “Social disruption and economic consequences of such large sea level rise could be devastating.”

  10. Ann says:

    This new study in PNAS is very important:


    It is uncommonly frank and clearly written. Read all of it – if I copied the abstract or the conclusions you would miss something. It presents the argument for the earth as a thermodynamic battery that humans have basically wrecked (my choice of words there).

    • Fast Eddy (pause) The Warlord says:

      Thanks – the intro makes me want to read on… my spent fuel pond theory may be trumped by this…

      Earth is a chemical battery where, over evolutionary time with a trickle-charge of photosynthesis using solar energy, billions of tons of living biomass were stored in forests and other ecosystems and in vast reserves of fossil fuels. In just the last few hundred years, humans extracted
      exploitable energy from these living and fossilized biomass fuels to build the modern industrial-technological-informational economy, to grow our population to more than 7 billion, and to transform the biogeochemical cycles and biodiversity of the earth.

      This rapid discharge of the earth’s store of organic energy fuels the human domination of the biosphere, including conversion of natural habitats to agricultural fields and the resulting loss of native species, emission of carbon dioxide and the resulting climate and sea level change, and use of supplemental nuclear, hydro, wind, and solar energy sources.

      The laws of thermodynamics governing the trickle-charge and rapid discharge of the earth’s battery are universal and absolute; the earth is only temporarily poised a quantifiable distance from the thermodynamic equilibrium of outer space.

      Although this distance from equilibrium is comprised of all energy types, most critical for humans is the store of living biomass.With the rapid depletion of this chemical energy, the earth is shifting back toward the inhospitable equilibrium of outer space with fundamental ramifications for the biosphere and humanity.

      Because there is no substitute or replacement energy for living biomass, the remaining distance from equilibrium that will be required to support human life is unknown

    • Fast Eddy (pause) The Warlord says:

      The global biosphere, human population, and economy will obviously crash long before Ω = 1 y. If
      H. sapiens does not go extinct, the human population will decline drastically as we will be forced to return to making a living as huntergatherers or simple horticulturalists.

      Also, the earth after the collapse of human civilization will be a very different place than the
      biosphere that supported the rise of civilization. There will be a long-lasting legacy of altered
      climate, landscapes, and biogeochemical cycles, depleted and dispersed stocks of fossil fuels, metals, and nuclear ores, and diminished biodiversity. The most powerful species in the 3.5-billion-year history of life has transformed the earth and left a mark that will endure long
      after its passing.

      Agree – assuming we can simply turn back the clock and return to Little House on the Prairie is not possible.

      • Fast Eddy (pause) The Warlord says:

        Many of the organizations and authors who have recognized the seriousness of the
        looming energy crisis are suggesting the possibility of achieving some level of sustainability of the global population and economy by implementing renewable energy technologies (32, 33).

        We too recognize the importance of solar and other renewables in cushioning the ecological and socioeconomic consequences as the biosphere returns toward a steady state between NPP and respiration.

        There is indeed a large supply of solar energy that has not yet been tapped for human use.

        Consequently, current technologies rely heavily on fossil fuels to design, mine, build, and operate the collection and distribution systems (34) and expand the yet to be designed but compulsory large-scale energy storage systems.

        Moreover, whereas some deployment of solar systems (e.g., over roofs, roads, and parking lots) causes little direct reduction of biomass, greater deployment will undoubtedly result in increasing indirect biomass consequences to both fabricate and install solar collectors and other infrastructure.

        And it was such an interesting article…. up until this….

        And now I have wasted 20 minutes of my life reading this that I can never get back…. my life has already been shortened by at least 3 decades because of this energy situation … so every minute counts!

        Unfortunately solar panels don’t grow on trees… they require coal and lots of it to make them … in fact like the earth — they are batteries too 🙂

      • Michael Jones says:

        Try telling the “Bonnet Heads” that
        BROOKINGS, SD – Bonnet-heads are swarming into Brookings this week sharing their passion for the Little House on the Prairie. Fans and experts alike are at SDSU discussing author Laura Ingalls Wilder’s popular book series.
        A spacious ballroom in the SDSU student union is more like a one-room schoolhouse full of Laura Ingalls Wilder students and scholars. Laura Ingalls Wilder’s most ardent fans are called bonnet-heads.

        “A bonnet-head is somebody who might like to wear a bonnet, I guess! But no, we all love Laura Ingalls Wilder so we just kind of nickname ourselves the bonnet-heads, I guess,” Julie Miller of Polk City, IA said.

        This is the first time South Dakota has hosted this conference known as Laurapalooza.

    • Jan Steinman says:

      Woa, what a fascinating paper!

      I don’t often take time to follow links without at least some prodding, so I’ll go further than Ann did, in the hope that more will read it.

      We are all familiar with the concept of a battery. This article makes the case quite well that the Earth is a massive chemical battery that has trickle-charged for billions of years, and that it is discharging in a flash — a point that I once published in a much less precise manner.

      This article even manages to model Ohm’s Law, the electrical law that determines how fast a battery can discharge (among other things), using the same Greek symbol, omega. It shows the discharge rate of this battery to be increasing. At our current rate of consumption (Ω), the planet’s biomass stores will only feed humans for another 1,029 years.

      “That seems like a long time,” said one yeast cell to another when they had used half the sugar in the vat of apple juice. But we have reduced our “resistance” to using the “juice” in the jug that is Earth by some 98.5% in just 2,000 years by this paper’s estimation.

      This paper also makes the case that so-called “renewables” cannot help. Indeed, by further fostering the discharge of the Earth battery, such technologies only hasten the entropic “energy death” that awaits our trajectory.

      At the time of Jesus, the “E—-F” gauge of the Earth battery read “35 Zetajoules.” Today, we’re at about 19.5. But just as your car’s starter cranks slower and slower before groaning to a halt, not all of the energy in the Earth battery is available for our use, especially as omega approaches zero.

      This important paper has given me a new way of talking to people about our predicament. Read it.

      • Artleads says:

        “This paper also makes the case that so-called “renewables” cannot help. Indeed, by further fostering the discharge of the Earth battery, such technologies only hasten the entropic “energy death” that awaits our trajectory.”

        Haven’t read it yet. But this sounds as though we can’t afford to tear down or discard anything old, or build anything new. The less energy and the less decentralizing of food production the better. Eating less. Doing less. A do nothing age indeed…

        • Jan Steinman says:

          we can’t afford to tear down or discard anything old, or build anything new.

          That’s my theory, and I’m trying to follow it every day.

          Now if we could just convince the other 7,330,297,620 people, oops… 621…625…629… 637… 649…

        • Fast Eddy says:

          If I understood it correctly the end bit suggests renewables would be helpful….

          I was anticipating that when I read a line half way through that said something about ‘if we stay this course…’ — I was just waiting (like a lion waits for a gazelle) for the hopium pipe to make an appearance

          Given the brilliance of the rest of the article surely the authors understand there is no way out or even a way to meaningfully delay the inevitable…

          Perhaps they didn’t want to send people away to commit suicide — or addict them to Xanax … so they inserted that tiny life boat into their painting which depicts gigantic seas of despair….

      • Thanks for pointing this out. It takes a while for me to get to all of the comments. I occasionally do it out of order.

        I know James H. Brown who is a co-author of this paper. He invited me to visit the Univ. of New Mexico for two days a few years ago, to lecture and meet with him and his graduate students. This is another paper that he is a co-author of, which you many have read earlier. Approaching a state shift in Earth’s biosphere.

        • Jan Steinman says:

          This is another paper that he is a co-author of, which you many have read earlier. Approaching a state shift in Earth’s biosphere.


          I’ve added it to my endless reading list, but today is a “honeydew day,” and I hear soap and jam making is my immediate future. Or fixing the tractor or the truck — the usual joys of maintaining old stuff.

  11. Fast Eddy (pause) The Warlord says:

    Subprime auto loans are now over 27% of the market…. so even more money is being ‘flung out of helicopters’

    Yet in spite of this massive and increasing stimulus…. commodity deflation is continuing….

    I have an idea — No Driver Left Behind. Anyone who wants a car gets one — free. The Somalian farmer gets one …. let’s even allow 10 year old children to drive and give them cars…

    This will be the MOTHER of the Mother of the mother of all stimulus programmes.

    This will be the one that gets the green shoots sprouting. This will stop The Deflation.

    In all seriousness…. this is a perfect example of the limits of the powers of the central banks…. they can only fend off deflation for so long … and with ever more ludicrous plans…

    In all seriousness — what I am suggesting truly is really not any different to what China has been doing since 2008 i.e. building all sorts of stuff that is not needed to keep the hamster running.

    There are those who I am sure will believe that it does not matter how we generate inflation and growth — give people cars – build ghost cities — doesn’t matter — all good….

    I am sure they would even be ok with building subways connecting all the major capitals of the world….

    Because they don’t get it…. and probably never will … until they are eating a steaming bowl of bark and grass soup…


    More interesting charts here http://www.zerohedge.com/news/2015-07-21/presenting-americas-900-billion-auto-loan-bubble-6-charts

  12. Don Stewart says:

    Jan Steinman
    For Ellen MacArthur Foundation, go to:

    Download the Circular Economy PDF. Look at Figure 3. You can also read the surrounding text for more detail. The gist of it is that privately owned automobiles are horribly inefficient at moving human bodies for many reasons. They discuss various ways to overcome the inefficiency.

    Don Stewart

    • xabier says:

      Dear Don

      I would add that my observation of the obese working (and welfare) class in this village – the people who never cycle or even walk if they can help it, their fat kids getting behind the wheel just as soon as legally possible – would make ‘people with horribly inefficient bodies’ an accurate statement.

      But it is funny watching them turn sideways to try to enter their houses with shopping bags, being too wide themselves to walk straight in….

  13. Don Stewart says:

    Jan Steinman

    This was republished by the Donella Meadows organization

    Conversations with Fritjof Capra helped me clarify this division between the natural and social sciences. According to Capra, “this division will no longer be possible, because the key challenge of this new century – for social scientists, natural scientists, and everyone else – will be to build ecologically sustainable communities, designed in such a way that their technologies and social institutions – their material and social structures – do no interfere with nature’s inherent ability to sustain life.

    A publication by Ecoliteracy which apparently predates the publication of Capra and Luisi’s book:. See list of resources at the bottom:

    For a quick overview of the book, see this 9 minute talk by Capra introducing a 2 day class he is about to teach. Note the integration of physical and social sciences. The book fleshes this out in great detail, culminating in the section beginning on page 301 and the diagram on page 305.


    Don Stewart

  14. Don Stewart says:

    Dear Gail and Finite Worlders

    I would like to offer a few thoughts on oil. Please see the article and discussion at:


    I just received Toby Hemenway’s new book The Permaculture City. A cursory examination shows that it has some good suggestions, but right now I am going to be critical. Toby has a chapter titled Energy Solutions for Homes and Communities. He goes through the familiar arithmetic of the incredible energy density in oil:

    ‘One gallon of gasoline can release 33,700 watt-hours of energy.

    A person working vigorously can put out about 250 watts per hour.

    If a person makes $20 per hour, one hour of work will buy 5 gallons of gasoline.

    Thus, she is trading 250 watts of her energy for 168,500 watts of fuel energy, a phenomenal bargain.’

    Then Toby gives a quote from Euan Mearns:

    ‘the work available in one barrel of oil, as human labor at $20 per hour, is worth $933,000 dollars.’

    I can’t find that Euan said that, but if he did, there may be some confusion between energy and work. Energy is the rather abstract ability of the oil to do work, while work is physically moving something from Point A to Point B. Confusingly, both are measured using the same units…but they are clearly different things.

    The Ellen MacArthur study that I have previously referenced indicates that gasoline (or diesel) purchased at the pump only delivers one or two percent of its energy as work in an automobile. And I do not believe the MacArthur numbers include anything for all the overheads associated with driving, such as roads and auto-insurance and taxes and the like.

    So lets take that $933,000 and parse it:

    *See the comment by BW Hill from the above referenced article that I have copied. Only 45 percent of the energy in a pool of oil in the ground is making it to the pump.

    *Of the energy in the oil at the pump, only perhaps 1 percent is doing actual work (from Ellen MacArthur).

    *At the present time, much of the work being performed by the oil is wasted work, rather than productive work. E.g., useless medical procedures or mindless consumption of trinkets.

    If we first multiply $933,000 by 45 percent, we get $420,000. If we multiply that by 1 percent, we get $4200 dollars. We have spent $415,800 on the cars and overhead.

    *But the yield from the oil to the pump is declining rather rapidly, according to BW Hill. Suppose we used the ‘Hill ratio’ from several years ago. Let’s use a ratio of 60 percent (40 percent of the energy in the oil was consumed in getting it to the pump). That would have given us $559,800, rather than $420,000. Assume that 99 percent of that was spent on cars and roads, or $554,202. Assume that we have a sticky economy, which does not magically reconfigure itself rapidly. We will still have an economy which costs $554,200 to operate, In short, there is no surplus. We have a 554,000 minus 420,000 equals $134,000 deficit We can anticipate all sorts of stresses.

    *I won’t try to calculate the change in the value of human labor vs. the value of the oil, because we can see that the margin is getting very tight indeed. The $20 that Euan used won’t survive if we are running a deficit.

    My conclusion is that the seemingly innocuous increases in the cost of delivering fuel to the pump are actually devastating the broader economy. At the present time, the PTB are trying to paper over everything by issuing more debt. Perhaps the PTB are clueless, and don’t understand any of this.

    Thus, we face a situation where a gallon of gasoline is still immensely valuable to a hard working human. But the wasteful economy we have built and become dependent upon cannot survive because so much of the economy is not composed of hard working humans who need a little help moving heavy stuff from Point A to Point B.

    I may have this figured out wrong, and I welcome your suggestions. But from where I sit right now, it looks like failure to understand these dynamics is behind much of the confusion in the comments.

    I also want to quarrel a little with Hill’s final ‘laws of physics’ statement. Jan Steinman and Will Bonsall could operate fine with oil at $200 a barrel. If we had an Edo, Japan, economy, oil at $200 would be a cause for celebration. It is the dominant economy we have built that is the problem. It’s not a ‘law of physics’. I think Hill understands this, because he recently mentioned that he checked the GDP/ BTU curve to make sure it hasn’t shifted. That curve represents our social organization…not a law of physics. Ironically, the Central Banks are successfully keeping us from adjusting to reality.

    Don Stewart

    ‘It now takes 3,210,000 BTU to extract, process, and distribute a barrel of oil which contains 5.88 million BTU. That is not simplistic, it is a calculation. Unless there is some radical change in the dollar’s relationship to a BTU which is now, according to the World Bank and the EIA, 5680 BTU per dollar,


    and factoring in thermodynamic required waste heat a barrel of oil can not exceed $100 unless energy is input from another source. Considering the magnitude of the energy required to accomplish that, it seems very unlikely that such a transfer will occur. If it was attempted the world would most likely return to trading chickens for wagon wheels. Most of the modern day global economy would undoubtedly collapse. So much energy would have to be taken from other essential processes that they would cease to function.

    Direct calculation of very well known properties of petroleum give us a very good reason to believe that prices can not exceed $100 at this point in the process cycle. There many people with many opinions on the subject, but we will continue to rely on the Laws of Physics for the best assessment of the situation.’

    • Jan Steinman says:

      there may be some confusion between energy and work

      Not to mention between energy and power.

      If Hemmenway actually wrote, “she is trading 250 watts of her energy for 168,500 watts of fuel energy,” he should be soundly whipped back to his editor, who should hire someone with some technical ability to review his writings before they get into print.

      The difference between power and energy is even less abstract than the difference between energy and work, and no one who is publishing (ostensibly as an “expert”) should ever confuse the two.

      Here’s a ten-cent tour of energy terms that I hope anyone can understand.

      gasoline (or diesel) purchased at the pump only delivers one or two percent of its energy as work in an automobile

      I don’t believe this is true in the way it is stated. Is that actually what Ellen MacArthur said?

      It may well be true if you consider all the energy that went into bringing you that fuel at the pump, but after leaving the pump for your vehicle, that fuel should deliver anywhere from 20% to 40% of its energy content toward moving your vehicle; in other words, it should produce 20% to 40% “work” for the “energy” contained in the fuel.

      This is verifiable with a simple thought experiment. Assuming fairly complete combustion, your average large SUV would have to dissipate about 99.9 kilowatts continuously! That’s roughly the equivalent of one hundred hair-dryers, running continuously!

      As is, a car with a heat engine must dissipate about 5-20 hair-dryers worth of “waste” heat, which is still way too much, anyway, but it’s small enough that the passengers don’t get roasted alive.

      (A decent electric car need only dissipate about one hair-dryer’s worth of waste heat.)

      • Don Stewart says:

        In the MacArthur Foundation report, the ‘work’ is moving the human, not the car. A huge amount of energy is burned to do the work of moving a 200 pound human.

        Don Stewart

        • Jan Steinman says:

          the ‘work’ is moving the human, not the car

          Okay, I can begin to accept their figure in such a case.

          But it seems a bit disingenuous, given that some infrastructure is necessary to move a human. To be fair, one should at least factor in the energy-equivalent of a good pair of Adidas and whatever energy goes into a water bottle and its contents, when making such claims in favour of bipedal ambulation!

          It would be interesting to see their equivalent assessment of bicycle travel.

          • Don Stewart says:

            I’ve sent you the links on how to get the MacArthur report. I read it a while ago, and can’t remember exactly what they said about bicycles. Positive as I recall….Don Stewart

            PS On the graphics issue. What I tend to do myself is use a sort of ‘partial differential’ approach. I hold a few things constant and let a few things vary. Then I hold something else constant and vary what I had held constant before. If someone is just presenting me with their own version of the future, such as the IPCC reports, I don’t find them as convincing. So, for example, I can take the linear relationship between oil and GDP in BW Hill’s model, but then speculate about how the linearity might be broken by the reorganization of society…whether the reorganization is voluntary or forced.

            Donella Meadows had an example of some identical apartments, but which exhibited a bimodal distribution of energy consumption. It turned out that the low consumption apartments had the electric meter in the hallway, where the residents saw it everyday. The high consumption apartments had the meter in the basement, where it was ‘out of sight, out of mind’. Illustrative of Donella’s dictum to intervene at points of leverage. I’ve argued that point recently with Gail.

  15. Artleads says:


    Tuesday July 21st, 2015
    Page 13A – Guest Commentary
    by Jim Baca (director of BLM from 1993 to 1994; longer version at website)
    Our nation’s federal coal program needs a major overhaul. When I was director of the Bureau of Land Management (BLM), we aimed to give Americans a fair return from the mining of publicly owned coal deposits in the western U.S. It’s clear now that this program, which produces 40% of our nation’s coal, is seriously flawed. Whether it’s revelations by government investigators that coal is being leased to private companies at below fair market value; growing consensus that royalties (what companies pay taxpayers in return for profiting off the coal they produce) are outdated; or mounting agreement that the program is inconsistent with our nation’s climate goals, there’s no denying that reform is needed. Even Interior Secy. Sally Jewell remarked in March that, “It’s time for an honest and open conversation about modernizing the federal coal program.” Coal is mined for one reason: to be burned. Already, more than 10% of all U.S. greenhouse gas emissions can be traced back to the federal coal program. Yet from the West Elk Mountains of Colorado to Bryce Canyon National Park in Utah, billions of tons of publicly owned coal are currently on the table. Just last month, Interior proposed plans that would make more than 80 billion more tons of coal available for strip mining. If this much coal is stripped from the ground, it stands to unleash 130 billion tons of carbon — more than 20 times the total greenhouse gas emissions released by the U.S. every year. Meanwhile, the Environmental Protection Agency is slated to finalize its Clean Power Plan this summer, which aims to cut carbon emissions by 5.3 billion tons. It’s not a stretch to say that Interior’s coal plans will smother these reductions. It’s a shocking inconsistency by the Obama administration. Our federal coal program is based on a system where carbon emissions are completely ignored. The effect is that taxpayers subsidize the extraction of coal, allowing industry to pay rock-bottom prices while we shoulder the climate costs. Selling more coal before we’ve had a chance to reform how the federal coal program accounts for climate impacts is not only contrary to the public interest, it’s also a costly recipe for disaster. It stands to erode trust and confidence that reforms will ever be realized. That’s why there’s an urgent need for Interior to put the brakes on selling more coal. The federal coal program is clearly no longer serving our nation’s economic or environmenal interests. It’s time for Interior to get serious and take a timeout on leasing more coal.

    • The difficulty is that we need cheap energy supplies. Coal use is already decreasing. Is there a point in making collapse quicker?

      • Fast Eddy (pause) The Warlord says:

        There is if you think that collapse of BAU is a wonderful thing… I do not share that sentiment.

      • Artleads says:

        I just posted that FYI. I keep asking others how we can “safely” get back to mining the coal that is everywhere underground in my old mining-town community. No responses so far.

        Well, actually, some say they don’t mind the self sacrifice entailed in speeding up collapse, on the chance that it will help other species to survive. All my thoughts are on finding a third way…

        • Jan Steinman says:

          some say they don’t mind the self sacrifice entailed in speeding up collapse, on the chance that it will help other species to survive

          I think it’s way more personal than that!

          Speeding up collapse today could allow your decendants a better life — or simply survival.

          • Artleads says:

            Collapse today appears to include nuclear catastrophe due to exploding nuclear facilities? I was never sure how the non-human species were supposed to survive this.

          • Fast Eddy (pause) The Warlord says:

            “Speeding up collapse today could allow your decendants a better life — or simply survival”

            I guarantee you will think differently when the electricity goes off.

        • Fast Eddy says:

          Given we will probably kill everything on the planet when collapse unleashes endless plumes of radiation I find the notion that our collapse will be beneficial to other species a rather specious argument

          But let’s put that aside…

          Because it’s Quiz Time here on FW.com (brought to you by Gail the Actuary)

          And today we have very provocative questions for the audience from Fast Eddy the Wildman (and former award winning used car salesman) who lives in the remote bush of the remote south island down under down under down under…

          Fast Eddy asks:

          Would you be willing to kill yourself if it meant that the world could go on in a sustainable manner?

          Or better still … would you be willing to sacrifice your children if it meant the world could go on in a sustainable manner?

          (Fast Eddy says he would absolutely not kill himself or his kids — if he had kids — because he says who gives a shit what comes after because he’ll be dead — Fast Eddy’s motto is Vive Pro Diem!!!)

          • Bandits says:

            And that precisely encapsulates the true human condition. Those that insist humans are altruistic are deluded. If humans were altruistic, there would be far less severe famines, there would be no rich or poor, no haves and have nots. And that is precisely why the human race is, in fact doomed. Humans when all is said and done subscribe to the doctrine of FYJIAR……..f#ck you jack I’m all right.

            • Fast Eddy says:

              I reckon that if humans were altruistic we’d be pulling plows around the field …. sent off to the abattoir to provide food for some other species…

              We are the ultimate killing machines. We are the king of predators. The lion can kiss our collective asses… he may be the king of the jungle but we are the goddamn CEOs!!!

              And we didn’t get to the top of the heap by being kind.

  16. Don Stewart says:

    Jan Steinman

    Here is a very brief description of some of the health benefits of kale, from George Mateljan today:

    *Kale’s risk-lowering benefits for cancer have recently been extended to at least five different types of cancer. These types include cancer of the bladder, breast, colon, ovary, and prostate. Isothiocyanates (ITCs) made from glucosinolates in kale play a primary role in achieving these risk-lowering benefits.
    *Kale is now recognized as providing comprehensive support for the body’s detoxification system. New research has shown that the ITCs made from kale’s glucosinolates can help regulate detox at a genetic level.
    *Researchers can now identify over 45 different flavonoids in kale. With kaempferol and quercetin heading the list, kale’s flavonoids combine both antioxidant and anti-inflammatory benefits in way that gives kale a leading dietary role with respect to avoidance of chronic inflammation and oxidative stress.

    He doesn’t mention in this list the fact that kale has lots of fiber, which is a key element in gut health and heart health.

    So my suggestion to you is that you compare two scenarios:
    *Go out in your garden, gather some kale and other goodies, and prepare and eat a salad.
    *Go to a cancer clinic and a heart clinic for treatment.

    Which of the two is the most complex? Which of the two takes lots of fossil fuels to operate? Which of the two requires a lot of highly educated people (the transformity for nonwoody plant biomass is 6500, while educated labor is 8,900,000…from Odum). My point is that when you move from a transformity requirement of 8,900,000 to only 6500, you are simplifying from one perspective, but you are also getting a far more elegant and complex solution to the problem.

    Adrian Bejan formulated the Constructal Law: things that flow will evolve to flow more freely over time. If you look at his examples, you will find that elegance and complexity frequently displace a lot of thrashing about. I have a hard time fitting any coherent notion of ‘complexity’ into an analysis of the real world. If Donella Meadows resolved all this, I am not aware of it.

    I fall back on the notion of avoiding doing unnecessary work…go for the elegant solution. Move the neurotransmitters and hormones without a lot of thrashing about. But it’s hard to make that fit with concepts of complexity that I have read about. But it’s also true that IF we insist on doing things which involve a lot of thrashing about, we will soon enough get very well acquainted with the limits to that behavior.

    Don Stewart

    • Artleads says:

      “Adrian Bejan formulated the Constructal Law: things that flow will evolve to flow more freely over time. If you look at his examples, you will find that elegance and complexity frequently displace a lot of thrashing about. I have a hard time fitting any coherent notion of ‘complexity’ into an analysis of the real world. If Donella Meadows resolved all this, I am not aware of it.

      I fall back on the notion of avoiding doing unnecessary work…go for the elegant solution. Move the neurotransmitters and hormones without a lot of thrashing about. But it’s hard to make that fit with concepts of complexity that I have read about. But it’s also true that IF we insist on doing things which involve a lot of thrashing about, we will soon enough get very well acquainted with the limits to that behavior.”

      Bravo! This is super important. Please stick with it. Lot’s of complex *tiny* adjustments make for much more resilience than a few big (energy) fixes.

    • Fast Eddy (pause) The Warlord says:

      I’d like to share a recipe using Kale….. we learned it from our neigbhour…

      So you take leaves of kale — and you brush them with a bit of olive oil — then you sprinkle a little salt on them — you could also sprinkle a little pepper…. or some sesame seeds…

      Then you put them on a cookie sheet and bake them in the oven until they become crispy.

      They look like this


      • Stilgar Wilcox says:

        Cool recipe, Fast Eddy. We’ll try it. Speaking of Kale, below is a link to an article on a bacon flavored seaweed that is suppose to have twice the nutritional value of kale. Can’t wait to try both.


      • eARTH says:

        We are going to the supermarket this evening, so I will get some kale, just for a giggle.

        I reckon that you may be able to stir fry them with crushed garlic and chilly seeds and a dash of soy sauce, maybe some curry powder, salt and black pepper, stir fried with butter beans and a side of French fries.

        I will let you know what I think LOL. I could do with a summer source of greens. I just hope they dont make me windy.

  17. Fast Eddy says:

    Look — see.



    The thing is…. the price of everything is crashing…. so one would think that this would spur growth…. restart the engine….

    Consider we also have unprecedented levels of stimulus surging through the global economy and at the same time collapsing oil and other commodity prices… which really should be massively inflationary (probably hyper-inflationary)

    But no. The engine is not restarting. Growth is not picking up …. it is dropping off….

    The drums of doom beat louder…. (not to be confused with the bongo drums that are thumped at Koombaya Peace and Kindness Orgies with Chris Martenson leading the prancing about the fire…. )

    • Michael Jones says:

      Mr. Ed, In the natural world there are numerous examples of cooperation as well as intense competition. I would venture to guess that they are in balance.

    • Thanks! We do have a problem! Commodity prices of all types are going lower.

      • Stilgar Wilcox says:

        Yeah, it’s interesting how commodity prices have dropped a lot! I read somewhere a few days ago that lowering commodity prices do not cause a recession but can indicate a recession. We all remember how far commodity prices dropped in 08 when the the mortgage meltdown was in full swing. What’s happening now is kind of strange – it seems like maybe it should be a recession from some economic indicators like China’s slow down and the EU’s economy having stagnated, but the US seems to still be doing all right? What stats do we rely on to make that determination? Obviously not phony stats put out by DC.

        • I think phony stats are part of our problem. Energy consumption stopped growing as rapidly last year. This is a sign of slower growth, whether or not reported GDP growth went down.

          No government wants to admit how bad things are. The US has been doing better than most of the rest. I am not sure entirely why–our cost of energy is fairly low, with both cheap coal and natural gas. Also, we have a lot of employment in oil, and there seems to be a market for the food we grow.

          But it isn’t really possible to continue ahead of everyone else in a networked economy for very long.

  18. Fast Eddy says:

    IBM Revenue Collapse Is Now Worse Than During Peak Of The Financial Crisis

    Moments ago IBM reported that EPS beat consensus expectations of $3.78 modestly, printing Q2 EPS at $3.84, which however was still a 13% drop from the $4.43 EPS in Q2 2014. However, it was not the EPS so much as the ongoing trouble at the topline which has hit IBM stock after hours and why at last check IBM was down 4% and dragging the entire Dow Jones futures lower of which it is its second largest member.

    The reason is that with Q2 revenues of $20.8 billion, this not only missed expectations, but was a plunge of 13.4% from a year ago: a drop that surpasses the biggest revenue drop recorded during the peak of the financial crisis! This is also 13 consecutive quarter of declining Y/Y revenues.


    What about IBM’s old faithful bag of tricks: stock buybacks? Alas, as we explained over a year ago, with IBM’s net debt rising to levels that threaten its investment grade rating, the company could no longer afford to splurge, and spent a modest by its own standards $1.1 billion to repurchase its stock in Q2, fractionally lower than the amount spent in Q1 and 70% less than the $3.7 billion repurchased a year ago when as we noted, the great buyback scramble (if only for IBM) was coming to an end:


    Much More http://www.zerohedge.com/news/2015-07-20/ibm-revenue-collapse-now-worse-during-peak-financial-crisis

    • Fast Eddy says:

      This is how we get a total collapse.

      Loads of major companies are basically failing — as a public company you grow — or you die.

      Only QE is allowing them to remain alive — it is not growing their revenues so there is no hiring going on — all it is doing is keeping them alive.

      But as we see with IBM these measures are not fixes… obviously if IBM continues along this trend line they will end up with no revenues and no employees…

      In theory they could still keep the company alive and listed using QE to buy-back their shares as other owners unload….

      But obviously the economy is more than just companies listed on an exchange with a record high share price.

      As the economy gets hollowed out more of these large companies follow IBM … massive layoffs result … unemployed people buy very little — so the layoffs snowball….

      And that’s how you get a game-ending deflationary collapse.

      • Yes indeed as of now there is a growing evidence – confirmation all around us that next stop is deflationary collapse of some degree, thank you very much all of those who predicted it years ahead, we should have listened. But history doesn’t stop there, now the question is what’s the PTB(s) going to do about it, it might be regionally different response! It is quite likely and possible some countries would due to path dependancy relapse easily overnight into semi-totalitarian economic policies (e.g. China, Russia, Turkey, Hungary, France?..).

        On the other hand, and at least for some brief time the capital/credit based regions would suffer very large shocks. However, capital/credit based regions such as US could/would fall onto some “solid structures” as well, namely some factions of the military apparatus and start reorganizing from this safety net up.

        But still I’ve very hard time to believe in total full spectrum immediate collapse, if you look at historic precedents/analogues, often times what you got short term/midterm (few decades or 2-3 short generations) is only top dog reshuffle, whereby the new emerging elite keeps not all but wide variety of the customs, laws and overall structures from their predecessors, and it fails only after another external/internal shock is introduced. Now we might be in a different situation, where the onset of “entropic winter” is much more comparable to sudden environmental/natural catastrophe, so the reshuffle for new conditions must be by definition very abrupt and not based on old models of behaviour/economy.

        So, going in circles, we always revert to the square one, namely is this fast or slow collapse?
        And this can’t be answered clearly at least from my vantage point, because there could be unimaginable adaptations to “entropic winter” in not too distant future like sudden end of frivolous energy consumption, end of the five workweek regime replaced by more on demand only command economies for basic national/attempted autarky survival etc.

        • Fast Eddy says:

          “if you look at historic precedents/analogues”

          I am not aware of any….

          The world today is entirely different that when the last major global even occurred — WW2….

          Our world is much more complex — much more interconnected

          But more importantly… we have run out of the one thing that BAU requires to function – cheap oil.

          And we have built a population of 7.3 billion that is alive only due to cheap oil.

          I cannot see how this collapse – when the trigger is pulled is not fast and cataclysmic.

          Analogy time:

          You are driving from New York to LA….. your gas gauge is not functioning but you are aware that you are running low on gas …..

          You see plenty of gas stations but you haven’t any cash to fill your tank…. you know that at some point your car is going to stall and roll to a silent halt on the side of the road…. but you don’t know exactly when because the gauge is broken…

          But common sense tells you it will be soon…. very soon

          • Stilgar Wilcox says:

            F.E., it will happen that’s for sure, but very soon? I think ‘when’ is the most difficult question of all. So many variables it’s hard to know what or when that watershed moment will be, like Lehman Bros. in 08 or the stock market crash in 29. Some utube vid’s have so called experts suggesting a crash this October and it will be bonds and derivatives that starts the cascade, but that is only a guess. I’m content to wait, watch and laugh when it happens. Why laugh you might wonder? I just think it’s laughable to be on the trajectory the world economy is on hell bent on growth when everything about oil suggests we need to scale back to meet it’s imminent decline from a peak.

            • Fast Eddy says:

              Agree — all predictions are guesses… it is impossible to know what the trigger is or when it will be pulled.

              But I do believe that when it is pulled — things will happen quickly…

              I don’t know if I’ll be laughing but we do go to car races to excited by the prospect of seeing a spectacular crash….

              I suspect there will be a degree of fascination — observing this — at least while the electricity stays on and the news keeps flowing in….

              Which will give way to terror as BAU quickly powers down and one realizes ‘shit — I am really on my own — no grocery stores — no police — no electricity’

              I can imagine that moment being very…… stressful.

            • Victor says:

              It is true that this could be enjoyable for a short time . Just imagine all those people who thought they were superior and think that everything will be as before. The timing of the MSM will relay information in a flood of news and where no more understand anything will be a great moment in the history of the world. I can imagine the disappointed faces of politicians and wealthy people . And I believe that this could be funny for a short period of time. After, it will surely be very difficult for all us…

            • Fast Eddy says:

              Yes that would be priceless…

              Gail would be the new “Nouriel Roubini’ — the person who called it … she’d be jetting about to speaking engagements at 250k a pop…. buying 5 million dollar new york apartments….


              Or not….

              One thing that I would find useful would be if the PTB — while the broadcast networks are still functioning — would come clean on this …. no more of this bullshit …

              Explain to the world that we have run out of cheap oil … and that is what we have been fighting…. and the fight is over…. we have lost…

              End it with a few comforting words about making peace with your god and gathering with your families… say whatever is necessary to comfort the masses before the suffering and dying begins….

              Personally that would be gratifying.

              It would — in the immortal words of Jack Nicholson ‘complete me’ 🙂

            • I am afraid I have more in common with Angela Merkel, Hillary Clinton, and Janet Yellen. We don’t quite evoke the same image.

            • Exactly, in the same vein you can watch almost 40yrs old videos about US/global system crash just around the corner (bonds, RE, deposits, ..) and now look back what has transpired instead, more leverage, more debt, more waste and more can kicking..

              Yep, looking at this from per capita perspective, it’s possible to claim we truly entered the “danger zone” of nascent “entropic winter” in the 1970s and now we are sort of freewheeling to a resolution, but who knows which many cycles are in this system, till 2015? 2020? 2025? or even longer?

            • Greg Machala says:

              It really depends how one defines “collapse.” If it means the US military is completely neutered then I don’t think that will happen very soon. Now if collapse means bankruptcy of large corporations and banks then I can see that happening very quickly. Collapse for the middle class and poor I think could come very quickly. The people in positions of real power (not congressman) will want to distance themselves from this segment of a now useless portion of the population (poor and middle class). All energy sources will be redirected to prop up the wealthy, elites and police to control the masses by execution, detention and starvation.The military will support essential services like localized electricity and food for some selected individuals and elites using plans already in place. How long will the energy last in such a scenario? Probably quite a while if this has been thought through and planned out for many years which is probably the case. Collapse will be different depending on you or your countries social status. It won’t be pretty folks. Enjoy life to the fullest now! Smell the roses. Enjoy modern conveniences. Give thanks for the incredible life we have had.

            • Fast Eddy (pause) The Warlord says:

              Collapse of the financial system means collapse of the energy extraction and refining systems.

              So once the strategic reserves of petrol get used up would the military not collapse then as well?

              I wonder if it would stay together for even that long… how would forces communicate?

              I don’t even see a purpose — assuming they could communicate with the head office in some bunker near Washington — of holding together …

              If I am the leader of a large unit I am realizing that what I was previously defending is over — it is now every man for himself…

              I am looking at a more local gig now…. I am liking the sound of Fast Eddy The Warlord … no… this sounds better Fast Eddy (pause) Warlord….. (anyone who says this without the pause will be flogged — my first edict)

              I am telling those old men in the bunkers to kiss my ass. I have the guns I run the show now. Watcha gonna do about it?????

              And once my kingdom is established like the good human I am will be sure to enslave my fellows (the easiest to yoke will be the Koombaya Krowd — I’ll just give them some line of bullshit and invite them to dance about the fire and eat organic granola then yoke them up without having to waste a single bullet)….

              And then — again like the good human beast predator kill that I am — I will look at extending my kingdom — my men will follow me out as we bash in the heads of anyone who resists … enslaving peasants, putting heads on stakes… etc etc etc (all the things that tyrants do …)

              Hot damn … I’m getting excited about all of this —- I can FEEL THE POWER building in my veins…. My DNA is shivering with anticipation … I feel GREAT!

              Bow down to …. Fast Eddy (pause) The Warlord

    • A person wonders what the net present value of future earnings is. Not good!

      • Stilgar Wilcox says:

        “The people in positions of real power (not congressman) will want to distance themselves from this segment of a now useless portion of the population (poor and middle class).”

        Greg M., that is a good point and one I’ve wondered about – what happens when a large chunk of the population is useless? It will reach a point not long after an initial collapse that their uselessness will come to the attention of those still with power and influence. How do they handle those people? Do they simply endure the rioting that damages infrastructure until the food runs out and they become lethargic? In any case, it raises an interesting question because at some point the useless masses will be in direct conflict with those in positions of real power, and the those in power will become the target of angst from the useless masses. They will become enemies and the TPTB may use drones against ‘The People’. Maybe even very small one’s; insect drone swarms that can inject a sedative. Force the most violent one’s into lethargy to initiate the starvation mode.

        In response to several posts; Yes, only laughable for a short period of time until it gets seriously scary.

        • Yep, Greg and you made some valid points.
          I guess it is not out of TPTB/mil planing capabilities to carve some parts of the existing infrustructure incl. HV powerlines, military factories, farm land and water sources, .. in such a way basically achieving rehashed old soviet system of very large forbidden no go zone areas. If the impoverished left behind locals outside the cordoned areas try to kill each other with small arms, the better and easier job for TPTB. However, this is the real heavy stuff and apparently scheduled for the very latest stages of the collapse (say not before 2035-45), so not now.

          I’m afraid there are many more crippling interim stages to come (1-3decades of further can kicking) where they can sort of maintain control via less brutal tools, namely rationing food&energy system based on various real and/or prefabricated security claims, capital controls, end of 5-6workday week replaced by mandatory few hours per day intensive public works jobs, tough propaganda/internet/foreign tv channel censorship, ..

          Again, the bottom line the human civilization is evolving multimilennial, multi century project how to turn people and resources into orgy of power lust, luxuries, and waste. So to think it’s now going silently into the night only because of some “stupid entropic window” is quity silly notion. It will just take its time..

          • Fast Eddy says:

            “in such a way basically achieving rehashed old soviet system”

            Again — I think that historical models are not of any use in predicting what is coming…. the USSR had massive amounts of energy — fossil fuels — so they were able to maintain centralized control…

            We will have little or no energy. I cannot see how there can be any sort of centralized control at least in the near term (and by near term I am talking decades possibly centuries).

            We are not going to turn the page and get new Roman Empires out of this…. there surely will be a significant period of extreme chaos and starvation — we do not have the skills to build from scratch — the Roman Empire evolved — it did not just happen

          • Stilgar Wilcox says:

            “So to think it’s now going silently into the night only because of some “stupid entropic window” is quity silly notion. It will just take its time..”

            Well, you’re certainly welcome to your opinion, but remember growth is needed to pay the interest on loans. Once growth wanes with contraction setting in due to diminishing returns, it’s difficult to understand how TPTB are going to continue to kick the can down the road for decades to come. People can be very difficult to control when their assets are being repossessed. There are tipping points. Things get pushed up to a point then change very rapidly.

          • Greg says:

            Image electricity being cut off to a large city. How many people could venture out of the city? And how far would they get? Think about it long and hard. It would be that easy to strand and wipe out large numbers of people without using any energy at all. Then move in months later with the military tankers and load up all the fuel and resources and take them to a central location for the elites to use. Sounds crazy but just think about it for a while. You know the power brokers have been thinking about it for years!

            • The power brokers really need the system operating though, to get replacement parts to operate the equipment to pump oil and to fix roads. I don’t think a plan like this could work to any significant extent.

            • Jan Steinman says:

              The power brokers really need the system operating

              This is a point that the Alex Jones crowd misses completely: the “elites” cannot survive without the “serfs.”

              Or strictly from an ecological perspective, ’tis a dead parasite that kills its host.

              If there were a conspiracy (and I’m not at all conceding that point), the “powers that be” have a strong vested interest in not cleaning their own toilets, picking their own fruit, and brewing their own soy latte maccachinos.

              Any conspiracy group smart enough to be capable of manipulating markets is certainly smart enough to realize that they need the 1% more than the other way ’round!

              I think a much more likely “class warfare” scenario is that the 99% cut the throats of the 1% while they sleep. Every fat-cat has servants who have access… a bit of arsenic in the nightcap whiskey sour, some fly agaric in the roasted truffles, a severed brake line on the Rolls…

          • eARTH says:

            Yes, the urban masses will be useless to the PTB once BAU can no longer be kicked down the road. Their existence will just be a nuisance. There will be no need to pussyfoot around with lefty clowns once the masses are useless. At the moment they are useful idiots, then they will be useless idiots and they can be dispatched accordingly.

            Maybe let riots develop, put them down brutally, then let them all rise up and kill them all. Or, blow up all the roads and bridges out of the cities, let them eat eachother. Cut off the water supply and let them die fast. Arial bomb the cities. There are numerous options that can be considered.

            The urban masses would simply wipe out all in their path as they flood out of the cities. Or maybe just leave them to it, let them clear the surrounding countryside. In the UK you can never really get far away enough from the cities, so that may not be an option here.



            • Fast Eddy (pause) The Warlord says:

              That could be the plan… but I don’t see the elites making out much better in the end….

              An energy-less world will not be a good place to be — and these elites will no longer be elite when collapse hits — their wealth and power will vapourize…

              The elites — if anyone survives — are likely to be men of violence….

            • Gregory machala says:

              So i see that I am not alone in my line of thinking. Cutting off food and water and access to electricity is fully under the control of the elites. That’s checkmate. Why waste energy stores on those portions of the population that are no longer useful. Remember the true holders of power are ruthless and will survive.

            • Fast Eddy (pause) The Warlord says:

              If you are in the elite camp…. I am not clear as to how you cut off electricity and food and water to the masses — without cutting yourself off.

              All of these rely on extensive supply chains…

              Electricity requires the grid to be operational — how do you protect every single power line and power station? Do you station hundreds of thousands of soldiers across points of the grid?

              Where would you get the spare parts and maintenance crews to keep this massive thing operational?

              How do you continue to grow food and transport it to the elites? Do you guard the farms and escort food caravans using the military?

              Would soldiers follow the elites’ orders when their families are being starved to death?

              I can envision BAU attempting to preserve their positions by using extreme violence against the masses…. but I cannot see how that can work for very long….

              There would be no way for them to maintain their positions for long when BAU collapses… the supply chains will break …. there will be no energy … the military will disband … and the elites will be no better off than anyone else…

              In fact if the elites do unleash their dogs on the general population — one could imagine the hordes exacting brutal revenge when the walls of the castle come down…

          • xabier says:

            Oh, I’m sure they’d give you the time if you asked, or help an old lady get her cat from up a tree. They seem prepared for any eventuality……

            • Greg Machala says:

              “If you are in the elite camp…. I am not clear as to how you cut off electricity and food and water to the masses — without cutting yourself off.” It is called planning and I am sure the powers behind the curtain have been preparing for this for years. All the spare parts they will need have already been acquired the systems are already in place. Those in control are complete psychopaths and are ruthless to the core. They will certainly do everything in their power to be the last man standing. They may full well know they are doomed as well but, will still do everything they can to play the game until the bitter end. I wouldn’t be surprised if there is a space based satellite in orbit that gives them front row seats to the chaos what will unfold. Like the Roman Colosseum on a global scale.

            • Fast Eddy says:

              Focusing on a single thing – the grid.

              You would need spare parts for every single component of the grid – in fact multiples of each if you wanted to last even a year… you run out of one key part — even something very simple like a washer… and the entire thing will not work

              You would need gasoline for the thousands of service vehicles + the tens of thousands of military vehicles required to protect the grid.

              Gasoline will store for perhaps a year with additives before it spoils.

              I expect the PTB will hold on for some months once the real collapse hits — we’ll likely get martial law — but this cannot last… the centre will not hold without gasoline….

            • eARTH says:

            • Greg says:

              I am sure the elite will have their own “grid” for power. Once the main grid goes down, the elite just have to wait with their armies of goons for a few months while millions die. Then, they will then make the rounds to all the cities and move all the energy and resources (and slaves) they need to a central location for them to use. The elites will then try and rebuild the new world order. If they can that is. I am doublful they will succeed. They will have enough energy to live our their lives though.

            • kesar0 says:

              I really don’t get this idea about ELITE having control over everything and planning the chessboard like Kapsarov, 7 moves ahead. As far, as I understand political processes throughout the history the elites were exchanged, slaughtered and killed in many ocassions. There is constant struggle for the top/alpha position and there are many tensions and fractions below the top of the pyramid. Please, find me ten sociopathic, fully determined, highly inteligent individuals (these are pre-requisites for good politicians) who will fully agree on anything, where no one has any authority over anyone else. Not happened in human history.

  19. Stilgar Wilcox says:

    Here’s an interesting article by zero hedge about coal and oil price:


    Oil and Coal Indicate the Global Economy is in a Free Fall

    In the US, Coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.

    With that in mind, consider that Coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but Coal has erased ALL of the bull market’s gains (the green line represents the pre-bull market low). For all intensive purposes, the last 13 years were a wash.

    “What’s happening in Coal is nothing short of “price discovery” as the commodity moves to align itself with economic reality. In short, the era of “growth” pronounced by Governments and Central Banks around the world ended. The “growth” or “recovery” that followed was nothing but illusion created by fraudulent economic data points.

    For most of the “so called” recovery, Oil gradually moved higher, creating the illusion that the world was returning to economic growth (demand was rising, hence higher prices).

    As was the case for Coal, Oil’s drop was nothing short of a bubble bursting. From 2009 until 2014 Oil’s price was disconnected from economic realities. Then price discovery hit resulting in a massive collapse. Moreover, the damage to Oil was extreme. Not only did it collapse 60% in a matter of months. It actually TOOK out the trendline going back to the beginning of the bull market in 1999.

    In short, the era the phony recovery narrative has come unhinged. We have no entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.”

    • I agree coal’s fall in price is important. Its delivered cost usually includes an oil component as well (because transport costs become important for coal–as much as a third of the cost in some cases). Thus, if oil prices remain high, the delivered cost doesn’t necessarily come down as much. Oil prices falling help the delivered price of coal.

      • It can be confirmed there is oversupply of coal in Europe (+globally). And they are still producing just to keep the workplace open and core stuff employed, gov. subsidies, the mined coal is not shipped out of the mines but stored on big hills inside these brownfields (in years volume of overproduction)..

        The coal stock price is often approaching junk statuts now, perhaps an opportunity of a lifetime for a 20/50/100-bagger speculation should there be yet another boom cycle (incl. oil/gas supply problem i.e. coal needed as saviour) after this current bust.

  20. Don Stewart says:

    You questioned BW Hill’s numbers on oil prices. If you look at:

    you will see that in 2010 the cost of production was around 90 dollars. Today it is around 120 dollars. In 2012, the economy could afford to pay a little over a hundred dollars. Today, that is down to 77 dollars. In 2016, around 65 and then in 2017 around 55.

    Why did the oil companies sell petroleum for less than the economy would have been able to pay for many decades? The answer is that many companies were competing to sell oil, and thus competition drove price to equal cost. During those decades oil produced a lot more in benefits (as measured in money) than it cost. But in 2012, the cost exceeded the ability of the economy to pay, and so ability to pay became the ceiling for price.

    However, a lot of companies have reserves which can still be produced with a positive cash flow. Hill estimates that about 2/3 of the oil produces a positive cash flow at 50 dollars. Therefore, he expects that, as reality becomes apparent, many of the reserves currently on the books will stop being produced. But, in the meantime, competition and the search for cash flow is keeping the price below the 77 dollars that the economy is able to pay.

    According to his model, the situation will not get any better in 2016 or 2017 or ever again. Price will continue to fall and more reserves will simply never be produced.

    At the present time, the GDP produced by the economy per barrel of oil is $87.35. So at current prices, oil is slightly positive in terms of its effect on the non-oil economy. There is some net value to the non-oil economy because the oil part of the economy is operating at a loss.

    I’m not claiming that his curves are infallible. I merely find it interesting that he comes from a very different kind of modeling, which seems to be shedding light on our current situation.

    Don Stewart

    • The particular comment I was responding to seemed to talk about oil prices falling in 2012. This discussion is about rising costs of oil production, and how their relativity to oil prices changed in 2012. That is a fairly different point than what the prior comment seemed to be making. Perhaps there was some “short hand” in the comment that I didn’t understand.

      • Don Stewart says:

        BW Hill’s equations are what speak most clearly for him. Or perhaps the model which underlies the equations. Words are imprecise. For example, in one exchange at Peak Oil, he mistakenly said ‘energy’ when he meant ‘work’. In the world of words, that’s an easy mistake to make. In describing the downdraft in prices, and linking it to the event that his equations depict for the year 2012, he may well use words which are ambiguous or maybe just a mistake (as with the confusion of energy and work). Best to stick with the conceptual model as embodied in the equations. Many other things such as the current cash flow crunch and frantic assurances to Wall Street and societal collapse and the stresses in higher education can be deduced from the equations.

        Which doesn’t prove that the equations are exactly right…just that they are provocative and are not contradicted by current events.

        Don Stewart

  21. Don Stewart says:

    Jan Steinman
    From Ecoliteracy.org:
    While the work of the Center has been profoundly affected by the insights of our cofounder, systems theorist Fritjof Capra, as well as by other notable thinkers including Margaret Wheatley, Joanna Macy, and Donella Meadows, we will touch only briefly here on their important theoretical work. At the end of this report, we’ve listed a few sources for readers who want to pursue these ideas more deeply.

    Don Stewart

    • Jan Steinman says:

      From Ecoliteracy.org:

      Pity they didn’t acknowledge those people in the book!

      I wonder if that statement is due (in part) to post-publication criticism that they left out a whole bunch of contemporary systems thinkers… 🙂

      • Don Stewart says:

        I think it more likely that they edited out a lot of stuff which did not directly contribute to the narrative.
        Don Stewart

        • Jan Steinman says:

          it more likely that they edited out a lot of stuff which did not directly contribute to the narrative

          Still, how can you discuss systems theory without a decent graphical model? Meadows has a brilliant graphical model for systems interactions in her book.

          Eugene Odum got one reference in the book, whereas his brother Howard is the one who came up with the transformity diagrams that make system relationships intuitively simple (op. cit. A Prosperous Way Down).

          I’m still working through the book, but I’m disappointed that the photos and illustrations seem to be mostly of dead people’s heads, rather than graphs and diagrams.

  22. 2008–>2015 the stage of … “massive GDP contraction when the new government debt is subtracted from the remaining economic activity…a loss in excess of for every $2 spent. ”

    So, how many stages are there left? The credit system is a gift which keeps on giving power and eternal pleasures for centuries, so they (PTB) won’t drop it now, just because it doesn’t work anymore hah. It must be interesting feeling to have it all, seemingly hedged against any possible downfall..

    • Stilgar Wilcox says:

      Great article, world, which points out that QE never ended, the Fed just started selling new QE bonds once the old one’s reached their maturity date. That’s a ‘QE Rollover Program’ which means the total bonds held by the Fed is not going down, just treading water, representing yet another debt to be tossed on to the burgeoning pile of unpayable debt to desperately try and force growth to obfuscate from the underlying problem which is a net energy decline due to diminishing returns. Funny thing is, as hard as we try, we can’t ‘Red Queen’ outrun entropic decay of a finite resource.

  23. Stefeun says:

    Molten Salt Fast Reactor Technology – An Overview
    guest post by French physicist Hubert Flocard

    “MSFR (Molten Salt Fast Reactor) with a thorium-based fuel is a concept yet to leave the drawing board. It is worth pursuing, but the claimed virtues of near inexhaustible resource, enhanced safety, less waste and elimination of weapons proliferation still need to be demonstrated.”

    “… if nuclear energy is to provide a significant contribution to the world energy mix of the 21st century, it is doubtful that thorium and molten salt technologies will be ready in time to take part.”

  24. Stefeun says:

    Kurt Cobb, JULY 19, 2015
    Has U.S. oil production started to turn down?


    • Thanks! Kurt Cobb is right–the latest weekly EIA data seems to show a plateau or even downturn in US oil production. These numbers will be revised over time.

  25. Fast Eddy says:

    I’m Fast Eddy…. I am here to sell you a car….


    • Michael Jones says:

      Moar easy money and chicks for free

    • Stilgar Wilcox says:

      I’ll take that red car full price for $2250. which is a classic now and sell it at a Las Vegas auction for north of 100K ‘as is’ to a .01%er with a 100 car garage with classics worth 30+ million dollars.

  26. Jim Hawley says:

    Great post Gail! I’m curious about the situation in Malta. World Bank states that as recently as 2011 about 99% of electricity production is from oil sources. EU data indicates that as recently as 2005 100% of transportation fuel was from petroleum origin. It sees to have something going for it that other resource poor Islands don’t. Any ideas on what is helping Malta do s much better that other island nations?

    • I answered another commenter about Malta. It now has an underground link to the Italian electric grid, which makes it a special case. It also has some LNG used for electricity (from nearby Algeria) that isn’t getting into some of the numbers. It is small enough that I am not sure how reliable the numbers really are.

  27. Artleads says:

    I see mostly men. Why am I nor surprised? Besides, did anyone really think that you just take the flag down and all would be merry and bright? That was just the first step in a very,very intense conversation, that hasn’t even started.

    Before giving up and hiding in the woods, I’d try one more thing: Make a deal. The flags comes down, the southern agrarian values–not that there’s much left of it–minus the slaves, take overt he north.

    • Michael Jones says:

      If they are fighting over this trivial issue, just imagine when the real dirt kicks up in their face!

      • Artleads says:

        Flags and cultural pride aren’t trivial to white supremacists.

        • Michael Jones says:

          No it is not, it is THEIR madness

          • daddio7 says:

            Near as I can tell none off my Irish immigrant relatives owned a slave. My great-great-great grandfather was a Confederate soldier in the civil war. Southern pride is more than a flag or monument. Censer all the history books, video games, and take a jackhammer to the monuments but what you call White supremacy will never go away.

            We should all treat each other with respect. This punishing people for the sins of the fathers will only garner more resentment. None of this has anything to do with coping with vanishing energy resources.

            • unauthorizedbunnyrelease says:

              “We should all treat each other with respect. This punishing people for the sins of the fathers will only garner more resentment. None of this has anything to do with coping with vanishing energy resources.”

              Thank you for expressing yourself in a well thought out manner that gets to some real issues. Behavior is what is important. If you call attention to some peoples behavior all of a sudden your a Nazi. Why is that? Anyone who cares to look at the facts knows that the civil war was economic in nature. Lincoln said in public he didnt have a problem with slavery several times. Yes slavery is a abomination. Whats that got to do with anything?

              These white supremacists have a wide range from genuine racist idiots to people who just want true equality, for everyone, including white folk. If the shooting does start it doesnt take a brain surgeon to figure out who is going to come out on top. What would the US armed forces be without the south? Anyone who has been in the military knows the answer to that question.

            • Artleads says:

              “These white supremacists have a wide range from genuine racist idiots to people who just want true equality, for everyone, including white folk. ”

              I don’t believe you can say that “supremacist” want equality. Isn’t that an oxymoron? Separatists, perhaps? Equality (or a decent break) for blacks and underprivileged whites is a worthy and absolutely necessary goal. I don’t think you can have one without the other.

            • Fast Eddy says:

              Quiz time!!!

              During the period of slavery in the United States a group of do-gooders (Koombaya Krowd) repatriated some slaves to the country of Liberia.

              What was one of the first things these former slaves did when they arrived in Liberia?


              If you said — they enslaved the Africans in Liberia — you would be right… and you would win a used car courtesy of Fast Eddy….

              Round Two:

              There was a group of people who have been persecuted every since they helped put Jesus on the cross…

              This culminated in what is known as the Holocaust…

              And what do these long-suffering people do when they get a homeland?


              There is no such thing as good or evil. There is only survival.

            • Artleads says:

              “Yes slavery is a abomination. Whats that got to do with anything?”

              To the slave, quite a lot.

            • Fast Eddy says:

              Yet slavery has been happening for thousands of years…

              And the Koombaya Krowd goes on about kindness and fairness and sharing ….

              While failing to understand that following these fantasy world ideals is exactly what will get you yoked to a plow when the masters no longer have their fossil fuel slaves…

              Kindness is weakness.

              We all know what happens to the weak, old and injured in the jungle…..

            • Artleads says:

              “Kindness is weakness.”

              Sure. If you’re kind…and weak. Then there are those who wise as serpents and harmless as doves. And there are other types too.

              “We all know what happens to the weak, old and injured in the jungle…..”

              Yes. The perfect example is BAU, Realpolitik, dog-eat-dog, as practiced by every self-respecting (or not) world leader today. And we all see what that leads to: extinction. Including of the Realpolicians.

            • Fast Eddy says:

              “Sure. If you’re kind…and weak. Then there are those who wise as serpents and harmless as doves. And there are other types too.”

              At the end of the day one can be meek and still get by in the world — so long as you kiss the ring of a master who is a junk yard dog and will keep the other junk yard dogs away from you.

              So ultimately your situation depends on violence. You’ve just outsourced it to the PTB and their armies.

              Haven’t we all?

              Without them your kindness would get you a boot on your neck.

              Amusing how the meek like to take pot shots at their junk yard dog/masters…. criticizing them for doing what they need to do…. wanting them to be kind and meek.

              Be careful what you wish for. Those other junk yard dogs are at the gate….


            • Artleads says:

              “So ultimately your situation depends on violence. You’ve just outsourced it to the PTB and their armies.”

              This isn’t hard to understand. But that’s not the only thing worth understanding. Seeking ways to escape from the prison cell we’re in seems worthwhile too.

            • Fast Eddy (pause) The Warlord says:

              Isn’t it a prison of our choosing?

              We exchange our freedom for servitude to those who keep us safe and share a bit of the pillaging with us.

              We’ve got a pretty good gig… in many places servitude looks like this


            • Artleads says:

              “Kindness is weakness.”

              Maybe kindness is like money. Is it like a check that you gift to someone? If you don’t have money in the bank (strength) to back it up, it is really not much good. I don’t know whether that is worthy of the name kindness. I see kindness as more pragmatic–like the golden rule which nearly all peoples rely on. What goes around comes around. But you trust people who are strong, benign or wise enough to have your back…

            • Jan Steinman says:

              “Kindness is weakness.” Maybe kindness is like money.

              Another analogy: money is like manure: pile it up and it stinks; spread it around and it makes things grow.

              So perhaps kindness is similar. People who see it as a weakness are so niggardly that they parsimoniously pile up their kindness, in case it is needed someday, while those who see it as a strength spread it far and wide, where it has the greatest chance of coming back to them.

            • Fast Eddy says:

              Sounds rather Koombaya….

              Kindness is all fine and dandy when their is enough to go around…

              Hi Bob – nice day isn’t it — would you like some of the wheat we just harvested?

              Sure Hank — let me get you some potatoes …

              In our countries there is plenty to go around because we are the winners in the resource grab — we have pillaged the world so that we live large — the poorest amongst have more than enough

              It’s easy to be kind to each other.

              But make no mistake all of you liberals and Koombaya’ers out there — your fantasy world would cease to exist if your leaders did not pillage the world on your behalf….

              You are soon going to find out what it is like to live without plenty — you are going to have to battle for every mouthful….

              And kindness is not going to be a trait that will help much — it will get you killed.

              I know that doesn’t register now — but you’ll see….

            • Artleads says:

              “Another analogy: money is like manure: pile it up and it stinks; spread it around and it makes things grow.”

              I suppose it can get too diluted if you don’t limit its scope, although, the more people dispense it it, the more ground it can cover. Which doesn’t recommend hoarding it.

            • Artleads says:


              I don’t underestimate the benefits of being int the safe core of BAU, even if there are many things I don’t understand. But you have your own blind spots. Someone who is born into an enriched aesthetic order, and/or who has been trained to appreciate it, finds many things to enjoy in that tattered waterfront shanty village you post.

              If the water isn’t too filthy, people can fish or bathe just by going out their front door. They have an effortless waterway to circulate on, and it requires no fossil fuel or expense. The water glistening smoothly under the shacks is something of immense beauty. The water provides some protection from interlopers. The scarcity of space to spread out ensures that the structures are very efficiently delineated. All this BAU detritus used in building probably cost nothing, and if you know how to look, are lovely. I could go on, but I hope you see where I’m going. I’ve lived in places like this. And because I’m trained to see, I see much to delight in in them. In my shortened circumstances of the past, I have no recollection of unhappiness or distress at being in such places. Quite the contrary. The security of knowing you can depend on such a space brings great wellbeing. When you’re poor, very very little will do. But this very little can also be very pure and experientially rich. You wouldn’t believe how little you’d have to “fix” to make such spaces among the most satisfying to live in.

            • Fast Eddy (pause) The Warlord says:

              I have been to some of the most vile slums on the planet — Philippines… Jakarta … Mumbai … Haiti… Cairo…. Ethiopia …

              I lived in the middle of a dirt poor village in Bali for 7+ years.

              There is absolutely nothing noble or romantic about these places. Perhaps to some foreigners it might appear to be some sort of Koombaya world… but believe me it is not.

              In Bali we employed a number of people from our village — and we were very close to some of the staff and remain so and we speak enough Indonesian to be able to communicate with them — from those discussions and observing them we could see that their lives are harsh — and they are the lucky ones — they have relatively well paid jobs.

              Most struggle to feed their families — they live in horrible conditions — they have no running water.

              It is just plain nonsense to believe there would be any upside to living like this.

              Did you actually live in a slum or a poor village in the same conditions as the locals? i.e. did you live on 2 or 3 bucks a day…. eat the same food they ate … sleep on the same beds?

            • Jan Steinman says:

              I lived in the middle of a dirt poor village in Bali for 7+ years.

              And yet, unlike the villagers you hired to feed and take care of you, you always had the resources to escape.

              “The reversible condition is not conducive to the synthesis of happiness.” — Dan Gilbert

              I’ll bet a lot of those people are a lot more happy than you are.

          • Artleads says:

            “We should all treat each other with respect.”

            I agree with this. Even something that seems like madness has a cause, and you can’t change someone’s conviction by decree. And I don’t see how flying confederate flags in public spaces is respectful to blacks either.

            “None of this has anything to do with coping with vanishing energy resources.”

            Here I take issue. The secessionist South and the industrial north had two opposing positions on energy. In one case, it was the energy of slaves; in another, it was the energy of coal. (I’d love to hear what Gail has to say about this.) Did they, to some degree, fight over which energy system would prevail?

            “This punishing people for the sins of the fathers will only garner more resentment..”

            I don’t see the removal of a flag which demeans a race of people (and at least implies that slavery wasn’t a grievous wrong) as punishment per se. But I think it’s insane to think you can defeat a people, and believe they’ll roll over and accept it without serious efforts to restore their dignity. IMO, the north has not done this. And beside, the north’s industrial paradigm that has swept the world has brought us a few inches away from the jaws of extinction. I suspect that is an outcome worse than slavery.

            Neither do I see it as a zero sum game that promotes ad hom–if the north was more dangerous, then slavery wasn’t so bad. It was very bad. Unacceptable. Both the north and south share in the European sense of superiority and entitlement. Both participated in the genocide of the Indian (an others), a most dreadful crime. And to say that you are being unfairly targeted for the sins of your ancestors is crazy. If you’re white, you benefit from the institutional racist system (installed by your ancestors) which favors whites above others, especially the descendants of slaves.

            You could say there’s a lot to be done, and we’ve not even started doing it. Whether we ever will or not.

            • unauthorizedbunnyrelease says:

              The civil war was not about slavery. The Lincoln quotes where he says he has no problem with slavery are easy to find. As the war progressed he attempted to make it a issue to gain new recruits for slaughter in the war.

              Who is the bigot? You are. You are characterizing the confederates and their descendants as slave owners. This characterization serves only one purpose obscuring the facts so continued demonizing can take place. You buy into the propaganda and indulge in the two minute hate. The south was just another conquest of which there would be many in the future. The south is the victim here and you continue your bigotry against them. Do you hate the black slave owners as much as the white? No? Bigot.

              Just for the record my wife is Asian and my children are half Asian. My wife would call you a bigot too. Would it be ok if she called you a bigot since she is a Asian female? White men cant call others bigots right? Because you have to be white to be a bigot right? Would it be ok if my half Asian children call you a bigot or is that too much white blood?

              “If you’re white, you benefit from the institutional racist system (installed by your ancestors) which favors whites above others, especially the descendants of slaves. ”

              Perhaps you believe the children of murderers should be tortured? You are repeating more lies. In the working class workplace only whites can be fired at will. HR will not allow firing of minorities. Special rights. Minorities that want equality hate special rights the most. I cant think of anything more demeaning than to say a lower standard applies for your performance based on your race or gender. I believe everyone should be judged on their behavior. Thats how equality is defined. You think white men should be persecuted. Your attitude does not work to end prejudice it perpetuates it.

            • The US civil war was definitely a fight about energy systems–was a coal based system (as existed in the North) the only system, or could slavery exist as an alternate system in the South? In the South, farming couldn’t easily be mechanized to use coal. Thus, there needed to be a source of cheap human labor, and slavery had provided this energy. Now, we seem to have moved more to temporary workers from Mexico, allowed in for harvest season, to provide cheap human labor. The need still exists, and will likely to exist even more in the future.

              An awfully lot of the deaths of US Indians came from the spread of diseases, to which the Indians had no immunity. It seems like I have heard that up to 98% of deaths came from this cause. With such depleted numbers, it was hard for Indians to wage any reasonable fight against the Whites.

              I am not convinced that there is currently an institutional racist system. Different races seem to have different strengths. If mathematical ability is favored, the Asian people tend to come out on top. If strength and resistance to malaria are important, black people become important. Women tend to “do better” in school, so now are becoming a majority in college programs. White men may have started out ahead, but have lost their lead in many areas.

            • Artleads says:

              “White men may have started out ahead, but have lost their lead in many areas.”

              Thanks for repeating what so many fail to recognize–the plight of the increasingly underprivileged white man. I’m not so enthusiastic about your assessment of racial and gender strengths. It is way too hard to be objective about race and gender strengths when so much disinformation about them is part of how how we are (mis)educated.

              Race and gender seem to be dominant constructs that serve a power system. They have to be faced and dealt with, but not at the cost of not simultaneously attempting to replace them. Just MHO.

            • Artleads says:

              “If strength and resistance to malaria are important, black people become important. ”

              This was, after all, a justification for slavery. So we can see why many might wish to go beyond this overly simple characterization. And if Mexican slavery becomes a substitute for African slavery, it also makes the case for escaping large-scale food production as quickly and as much as possible. People don’t want to be slaves, no matter whose economic model it serves. And it they put up with it through necessity, they will revolt soon enough.

            • urbangdl says:

              it is natural to be scared when you have a lot and when you relize you are about to loose everything, some people can’t handle it and they commit suicide, others start panicking, there is worse, those who want to drag you with them.

    • eARTH says:

      Slavery… well, the blacks would not be in the US were it not for slavery. Their survival and procreation chances likely would have been much lower in Africa.

      Slavery is not “evil”, it is what societies do at certain points of development and slavery tends to be immensely progressive. In that sense it is “good”. Europe recognises ancient Greece and Rome as foundations for our civilization. Nearly everyone in Greece and Rome were slaves yet we owe so much to them, art, philosophy, law, literature, architecture, drama, civic planning etc. We were barbarians before the slavers conquered us.

      In the modern world, slavery funded the industrial revolution. Britain got trillions of profits from slave plantations, that allowed us to massively accumulate capital and to develop industry. The development of the modern world as we know it depended on slavery. And look at the US, went on to be the most powerful country in the world.

      It is silly when people say slavery is “evil” and it is even sillier to paint blacks today as victims or whites as evil criminals. The lefty liberals are just using history and “identity” to further their own political agendas. Basically the “liberals” haven’t got a clue what they are talking about or what they are doing. Only our present development allows their pathetic self-righteous nonsense, that will end one day.

      “as though slavery were a counter-argument, and not rather a condition of every higher culture, of every elevation of culture” (Nietzsche)

      • eARTH says:

        “Basically the “liberals” haven’t got a clue what they are talking about or what they are doing. Only our present development allows their pathetic self-righteous nonsense”

        I should add that the lefty liberals are not “radicals” at all, even though they think they are. They are agitating for the liberal morality that fits with the present stage of development of western capitalism. The values of a society reflect the economic base, they are part of its ideological superstructure.

        Present capitalism expands by increasing the workforce through mass immigration and the incorporation of women into the workplace. These multi and feminist values are not “eternally true”, they are what suits the capitalism system at the present time just as slavery used to suit it.

        The more “radical” the lefty clowns thinks that they are, the more they become the handmaids of the capitalist system. It is a form of slavery because they do it for free. They absorb values from their society, get all self-righteous and work for free to advance liberal values. The system will save the whip to use on them when they even need to. Now all it takes is money and TV.

        • Fast Eddy says:

          Yes – they are stooges…

          And that is coming from someone who spent a few decades as one of these stooges….

          How I wish someone would have sat me down at the age of 15 and explained this to me:

          – The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will

          – Resources are finite and therefore ownership is a zero sum game

          – The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status

          – Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources

          – Competition always exist (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations

          – Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources

          – Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.

          – One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)

          – As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)

          – And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.

          – Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.

          – Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.

          – But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.

          – But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.

          – Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.

          – So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.

          – They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)

          – Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.

          – Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I

          – In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.

          – Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….

          – Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….

          – As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them

          – Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!

      • Artleads says:

        Good to see you not holding back. Go for it!

        “The development of the modern world as we know it depended on slavery. And look at the US, went on to be the most powerful country in the world.”

        And this modern world with all it’s culture and greatness is doomed. Maybe you should take a look at guymcpherson.com and read the archives.

      • urbangdl says:

        Arabs build world cup stadiums with an almost slave labor pool… I think Slaves are of value not because of they being cheap energywise but because their capabilities are hard to immitate by current machines, if they had androids that could be programmed for task done by slavery I guess the powerful would be able to whipe out the revolting salves out of this planet.

      • to toss in a comment on ‘slavery’
        it was as Gail pointed out, an exploitation of energy resources, no different to our industrial economy today by the standards of 17th/18th/19th century norms.
        While the white man is castigated for enslaving the black man, I feel it necessary to point out that it was (light skinned) Africans who captured and sold (dark skinned) Africans.
        The white man didn’t have the means to penetrate into Africa to capture slaves, only to provide transport.
        The light skinned Africans traded for the energy rich products of the White man’s factories, iron goods, and specifically guns—which were then used to go out and capture yet more slaves to be sold for transport to the Americas.
        West Africa was a source of slave-energy, and to get hold of it you needed iron and steel to destroy communities
        West africa is now a source of oil and food energy, to get hold of it you still need iron and steel and the white man’s technology, we remove oil from Africa , we still provide the transport and still communities are being destroyed.
        The underlying forces haven’t altered.

  28. Fast Eddy says:

    At least five people were arrested on Saturday as white-supremacist and African-American groups clashed outside the South Carolina State House, where the Confederate battle flag was removed last week after a half-century, authorities said.


    Wait till the ‘authorities’ are no longer able to keep the different races apart… a problem not limited to the US… have a look at The Telegraph’s comments section …

    I would not want to be in a minority position anywhere in the world when the grocery stores empty…

    • The USA must break up when there is no longer sufficient energy in the system to hold it together
      The cracks are already obvious on geographic racial an linguistic borders, no difficult to draw rough lines where they will be
      The EU will go the same way, destroying the 50 year fantasy that people get along and actually like each other.
      They do, but only so long as your neighbour is ”your kinda guy”—when theyre not, things get very fractious.

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