Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

Why are commodity prices, including oil prices, lagging? Ultimately, the question comes back to, “Why isn’t the world economy making very many of the end products that use these commodities?” If workers were getting rich enough to buy new homes and cars, demand for these products would be raising the prices of commodities used to build and operate cars, including the price of oil. If governments were rich enough to build an increasing number of roads and more public housing, there would be demand for the commodities used to build roads and public housing.

It looks to me as though we are heading into a deflationary depression, because the prices of commodities are falling below the cost of extraction. We need rapidly rising wages and debt if commodity prices are to rise back to 2011 levels or higher. This isn’t happening. Instead, Janet Yellen is talking about raising interest rates later this year, and  we are seeing commodity prices fall further and further. Let me explain some pieces of what is happening.

1. We have been forcing economic growth upward since 1981 through the use of falling interest rates. Interest rates are now so low that it is hard to force rates down further, in order to encourage further economic growth. 

Falling interest rates are hugely beneficial for the economy. If interest rates stop dropping, or worse yet, begin to rise, we will lose this very beneficial factor affecting the economy. The economy will tend to grow even less quickly, bringing down commodity prices further. The world economy may even start contracting, as it heads into a deflationary depression.

If we look at 10-year US treasury interest rates, there has been a steep fall in rates since 1981.

Figure 1. Chart prepared by St. Louis Fed using data through July 20, 2015.

Figure 1. Chart prepared by St. Louis Fed using data through July 20, 2015.

In fact, almost any kind of interest rates, including interest rates of shorter terms, mortgage interest rates, bank prime loan rates, and Moody’s Seasoned AAA Bonds, show a fairly similar pattern. There is more variability in very short-term interest rates, but the general direction has been down, to the point where interest rates can drop no further.

Declining interest rates stimulate the economy for many reasons:

  • Would-be homeowners find monthly payments are lower, so more people can afford to purchase homes. People already owning homes can afford to “move up” to more expensive homes.
  • Would-be auto owners find monthly payments lower, so more people can afford cars.
  • Employment in the home and auto industries is stimulated, as is employment in home furnishing industries.
  • Employment at colleges and universities grows, as lower interest rates encourage more students to borrow money to attend college.
  • With lower interest rates, businesses can afford to build factories and stores, even when the anticipated rate of return is not very high. The higher demand for autos, homes, home furnishing, and colleges adds to the success of businesses.
  • The low interest rates tend to raise asset prices, including prices of stocks, bonds, homes and farmland, making people feel richer.
  • If housing prices rise sufficiently, homeowners can refinance their mortgages, often at a lower interest rate. With the funds from refinancing, they can remodel, or buy a car, or take a vacation.
  • With low interest rates, the total amount that can be borrowed without interest payments becoming a huge burden rises greatly. This is especially important for governments, since they tend to borrow endlessly, without collateral for their loans.

While this very favorable trend in interest rates has been occurring for years, we don’t know precisely how much impact this stimulus is having on the economy. Instead, the situation is the “new normal.” In some ways, the benefit is like traveling down a hill on a skateboard, and not realizing how much the slope of the hill is affecting the speed of the skateboard. The situation goes on for so long that no one notices the benefit it confers.

If the economy is now moving too slowly, what do we expect to happen when interest rates start rising? Even level interest rates become a problem, if we have become accustomed to the economic boost we get from falling interest rates.

2. The cost of oil extraction tends to rise over time because the cheapest to extract oil is removed first. In fact, this is true for nearly all commodities, including metals. 

If costs always remained the same, we could represent the production of a barrel of oil, or a pound of metal, using the following diagram.

Figure 2

Figure 2. Base Case

If production is becoming increasingly efficient, then we might represent the situation as follows, where the larger size “box” represents the larger output, using the same inputs.

Figure 3

Figure 3. Increased Efficiency

For oil and for many other commodities, we are experiencing the opposite situation. Instead of becoming increasingly efficient, we are becoming increasingly inefficient (Figure 4). This happens because deeper wells need to be dug, or because we need to use fracking equipment and fracking sand, or because we need to build special refineries to handle the pollution problems of a particular kind of oil. Thus we need more resources to produce the same amount of oil.

Figure 4. Growing inefficiency

Figure 4. Growing inefficiency (Notice how sizes of shapes differ in Figures 2, 3, and 4.)

Some people might call the situation “diminishing returns,” because the cheap oil has already been extracted, and we need to move on to the more difficult to extract oil. This adds extra steps, and thus extra costs. I have chosen to use the slightly broader term of “increasing inefficiency” because it indicates that the nature of these additional costs is not being restricted.

Very often, new steps need to be added to the process of extraction because wells are deeper, or because refining requires the removal of more pollutants. At times, the higher costs involve changing to a new process that is believed to be more environmentally sound.

Figure 5

Figure 5. An example of what may happen to make inputs in physical goods and services rise. (The triangle shape was chosen to match the shape of the “Inputs of Goods and Services” triangle in Figures 2, 3, and 4.)

The cost of extraction keeps rising, as the cheapest to extract resources become depleted, and as environmental pollution becomes more of a problem.

3. Using more inputs to create the same or smaller output pushes the world economy toward contraction.

Essentially, the problem is that the same quantity of inputs is yielding less and less of the desired final product. For a given quantity of inputs, we are getting more and more intermediate products (such as fracking sand, “scrubbers” for coal-fired power plants, desalination plants for fresh water, and administrators for colleges), but we are not getting as much output in the traditional sense, such as barrels of oil, kilowatts of electricity, gallons of fresh water, or educated young people, ready to join the work force.

We don’t have unlimited inputs. As more and more of our inputs are assigned to creating intermediate products to work around limits we are reaching (including pollution limits), fewer of our resources can go toward producing desired end products. The result is less economic growth. Because of this declining economic growth, there is less demand for commodities. So, prices for commodities tend to drop.

This outcome is to be expected, if increased efficiency is part of what creates economic growth, and what we are experiencing now is the opposite: increased inefficiency.

4. The way workers afford higher commodity costs is primarily through higher wages. At times, higher debt can also be a workaround. If neither of these is available, commodity prices can fall below the cost of production.

If there is a significant increase in the cost of products like houses and cars, this presents a huge challenge to workers. Usually, workers pay for these products using a combination of wages and debt. If costs rise, they either need higher wages, or a debt package that makes the product more affordable–perhaps lower rates, or a longer period for payment.

Commodity costs have been rising very rapidly in the last fifteen years or so. According to a chart prepared by Steven Kopits, some of the major costs of extracting oil began increasing by 10.9% per year, in about 1999.

Figure 6. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel. CAGR is

Figure 6. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel. CAGR is “Compound Annual Growth Rate.”

In fact, the inflation-adjusted prices of almost all energy and metal products tended to rise rapidly during the period 1999 to 2008 (Figure 7). This was a time period when the amount of mortgage debt was increasing rapidly as lenders began offering home loans with low initial interest rates to almost anyone, including those with low credit scores and irregular income. When debt levels began falling in mid-2008 (related in part to defaulting home loans), commodity prices of all types dropped.

Figure 6. Inflation adjusted prices adjusted to 1999 price = 100, based on World Bank

Figure 6. Inflation adjusted prices adjusted to 1999 price = 100, based on World Bank “Pink Sheet” data.

Prices then began to rise once Quantitative Easing (QE) was initiated (compare Figures 6 and 7). The use of QE brought down medium-term and long-term interest rates, making it easier for customers to afford homes and cars.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

More recently, prices have fallen again. Thus, we have had two recent times when prices have fallen below the cost of production for many major commodities. Both of these drops occurred after prices had been high, when debt availability was contracting or failing to rise as much as in the past.

5. Part of the problem that we are experiencing is a slow-down in wage growth.

Figure 8 shows that in the United States, growth in per capita wages tends to disappear when oil prices rise above $40 barrel. (Of course, as noted in Point 1, interest rates have been falling since 1981. If it weren’t for this, the cut off for wage growth might even be lower–perhaps even $20 barrel!)

Figure 8. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Figure 8. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided by total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

There is also a logical reason why we should expect that wages would tend to fall as energy costs rise. How does a manufacturer respond to the much higher cost of one or more of its major inputs? If the manufacturer simply passes the higher cost along, many customers will no longer be able to afford the manufacturer’s or service-provider’s products. If businesses can simply reduce some other costs to offset the rise in the cost in energy products and metals, they might be able to keep most of their customers.

A major area where a manufacturer or service provider can cut costs is in wage expense.  (Note the different types of expenses shown in Figure 5. Wages are a major type of expense for most businesses.)

There are several ways employment costs can be cut:

  1. Shift jobs to lower wage countries overseas.
  2. Use automation to shift some human labor to labor provided by electricity.
  3. Pay workers less. Use “contract workers” or “adjunct faculty” or “interns” who will settle for lower wages.

If a manufacturer decides to shift jobs to China or India, this has the additional advantage of cutting energy costs, since these countries use a lot of coal in their energy mix, and coal is an inexpensive fuel.

Figure 9. United States Percentage of Labor Force Employed, in by St. Louis Federal Reserve.

Figure 9. United States Labor Force Participation Rate by St. Louis Federal Reserve. It is computed by dividing the number of people who are employed or are actively looking for work by the number of potential workers.

In fact, we see a drop in the US civilian labor force participation rate (Figure 9) starting at approximately the same time when energy costs and metal costs started to rise. Median inflation-adjusted wages have tended to fall as well in this period. Low wages can be a reason for dropping out of the labor force; it can become too expensive to commute to work and pay day care expenses out of meager wages.

Of course, if wages of workers are not growing and in many cases are actually shrinking, it becomes difficult to sell as many homes, cars, boats, and vacation cruises. These big-ticket items create a significant share of commodity “demand.” If workers are unable to purchase as many of these big-ticket items, demand tends to fall below the (now-inflated) cost of producing these big-ticket items, leading to the lower commodity prices we have seen recently.

6. We are headed in slow motion toward major defaults among commodity producers, including oil producers. 

Quite a few people imagine that if oil prices drop, or if other commodity prices drop, there will be an immediate impact on the output of goods and services.

Figure 10.

Figure 10.

Instead, what happens is more of a time-lagged effect (Figure 11).

Figure 11.

Figure 11.

Part of the difference lies in the futures markets; companies hold contracts that hold sale prices up for a time, but eventually (often, end of 2015) run out. Part of the difference lies in wells that have already been drilled that keep on producing. Part of the difference lies in the need for businesses to maintain cash flow at all costs, if the price problem is only for a short period. Thus, they will keep parts of the business operating if those parts produce positive cash flow on a going-forward basis, even if they are not profitable considering all costs.

With debt, the big concern is that the oil reserves being used as collateral for loans will drop in value, due to the lower price of oil in the world market. The collateral value of reserves works out to be something like (barrels of oil in reserves x some expected price).

As long as oil is being valued at $100 barrel, the value of the collateral stays close to what was assumed when the loan was taken out. The problem comes when low oil prices gradually work their way through the system and bring down the value of the collateral. This may take a year or more from the initial price drop, because prices are averaged over as much as 12 months, to provide stability to the calculation.

Once the value of the collateral drops below the value of the outstanding loan, the borrowers are in big trouble. They may need to sell some of the other assets they own, to help pay down the loan. Or, they may end up in bankruptcy. The borrowers certainly can’t borrow the additional money they need to keep increasing their production.

When bankruptcy occurs, many follow-on effects can be expected. The banks that made the loans may find themselves in financial difficulty. The oil company may lay off large numbers of workers. The former workers’ lack of wages may affect other businesses in the area, such as car dealerships. The value of homes in the area may drop, causing home mortgages to become “underwater.” All of these effects contribute to still lower demand for commodities of all kinds, including oil.

Because of the time lag problem, the bankruptcy problem is hard to reverse. Oil prices need to stay high for an extended period before lenders will be willing to lend to oil companies again. If it takes, say, five years for oil prices to get up to a level high enough to encourage drilling again, it may take seven years before lenders are willing to lend again.

7. Because many “baby boomers” are retiring now, we are at the beginning of a demographic crunch that has the tendency to push demand down further.

Many workers born in the late 1940s and in the 1950s are retiring now. These workers tend to reduce their own spending, and depend on government programs to pay most of their income. Thus, the retirement of these workers tends to drive up governmental costs at the same time it reduces demand for commodities of all kinds.

Someone needs to pay for the goods and services used by the retirees. Government retirement plans are rarely pre-funded, except with the government’s own debt. Because of this, higher pension payments by governments tend to lead to higher taxes. With higher taxes, workers have less money left to buy homes and cars. Even with pensions, the elderly are never a big market for homes and cars. The overall result is that demand for homes and cars tends to stagnate or decline, holding down the demand for commodities.

8. We are running short of options for fixing our low commodity price problem.

The ideal solution to our low commodity price problem would be to find substitutes that are cheap enough, and could increase in quantity rapidly enough, to power the economy to economic growth. “Cheap enough” would probably mean approximately $20 per barrel for a liquid oil substitute. The price would need to be correspondingly inexpensive for other energy products. Cheap and abundant energy products are needed because oil consumption and energy consumption are highly correlated. If prices are not low, consumers cannot afford them. The economy would react as it does to inefficiency. In other words, it would react as if too much of the output is going into intermediate products, and too little is actually acting to expand the economy.

Figure 12. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

Figure 12. World GDP in 2010$ (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014)

These substitutes would also need to be non-polluting, so that pollution workarounds do not add to costs. These substitutes would need to work in existing vehicles and machinery, so that we do not have to deal with the high cost of transition to new equipment.

Clearly, none of the potential substitutes we are looking at today come anywhere close to meeting cost and scalability requirements. Wind and solar PV can only be built on top of our existing fossil fuel system. All evidence is that they raise total costs, adding to our “Increased Inefficiency” problem, rather than fixing it.

Other solutions to our current problems seem to be debt based. If we look at recent past history, the story seems to be something such as the following:

Besides adopting QE starting in 2008, governments also ramped up their spending (and debt) during the 2008-2011 period. This spending included road building, which increased the demand for commodities directly, and unemployment insurance payments, which indirectly increased the demand for commodities by giving jobless people money, which they used for food and transportation. China also ramped up its use of debt in the 2008-2009 period, building more factories and homes. The combination of QE, China’s debt, and government debt together brought oil prices back up by 2011, although not to as high a level as in 2008 (Figure 7).

More recently, governments have slowed their growth in spending (and debt), realizing that they are reaching maximum prudent debt levels. China has slowed its debt growth, as pollution from coal has become an increasing problem, and as the need for new homes and new factories has become saturated. Its debt ratios are also becoming very high.

QE continues to be used by some countries, but its benefit seems to be waning, as interest rates are already as low as they can go, and as central banks buy up an increasing share of debt that might be used for loan collateral. The credit generated by QE has allowed questionable investments since the required rate of return on investments funded by low interest rate debt is so low. Some of this debt simply recirculates within the financial system, propping up stock prices and land prices. Some of it has gone toward stock buy-backs. Virtually none of it has added to commodity demand.

What we really need is more high wage jobs. Unfortunately, these jobs need to be supported by the availability of large amounts of very inexpensive energy. It is the lack of inexpensive energy, to match the $20 per barrel oil and very cheap coal upon which the economy has been built that is causing our problems. We don’t really have a way to fix this.

9. It is doubtful that the prices of energy products and metals can be raised again without causing recession.

We are not talking about simply raising oil prices. If the economy is to grow again, demand for all commodities needs to rise to the point where it makes sense to extract more of them. We use both energy products and metals in making all kinds of goods and services. If the price of these products rises, the cost of making virtually any kind of goods or services rises.

Raising the cost of energy products and metals leads to the problem represented by Growing Inefficiency (Figure 4). As we saw in Point 5, wages tend to go down, rather than up, when other costs of production rise because manufacturers try to find ways to hold total costs down.

Lower wages and higher prices are a huge problem. This is why we are headed back into recession if prices rise enough to enable rising long-term production of commodities, including oil.

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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1,163 Responses to Nine Reasons Why Low Oil Prices May “Morph” Into Something Much Worse

  1. Stilgar Wilcox says:

    http://www.bloomberg.com/energy

    I have no idea where posts are going on this message board now because the last 3 days it’s stagnated at the end, but wherever this post ends up: WTI is down today a regular kachunk .79 cents to 43.87 and Brent folded down another .91 to 48.61

    The real oddball thing about it is it’s not low enough apparently to even kick start an economic expansion. Instead it’s like treading water. What does that say about where we’re headed? It progressively costs more to extract a new barrel of oil putting more pressure on the business side to need a higher price.

    Consumer affordability and capex are passing in the night, but in opposite directions. That can’t end well.

    • Stilgar Wilcox says:

      Ok, so 5th up from the bottom when first posted- that’s not bad since there are over a K posts.

    • Fast Eddy says:

      That is definitely a huge concern — most commodity prices have been collapsed for months now — and we are not getting a boost….

      • Stilgar Wilcox says:

        True enough, FE, and now this; http://www.reuters.com/article/2015/08/08/us-china-economy-trade-idUSKCN0QD03320150808
        China’s exports drop 8.3%

        However, Yellen is still supposedly going to raise interest rates some minor yet symbolic tiny percentage in September? There’s some conflicting numbers being tossed around. US GDP went up 2.3% in the 2nd qtr., but the stock market is down off of it’s high looking slightly bearish, commodities are way down including oil, China’s becoming the amazing shrinking 2nd biggest economy, The EU’s economy flaps wildly even while using QE for stimulus while fending off wayward northern Africans, oil is way down but gasoline is not down by anywhere near as much, employment is a mixed message of half empty with low paying jobs but lots of them, borrowing on a global scale is backing way off heading into deflation, but somehow the greenshoots have shot up high enough to raise rates?

        This I’ve got to see…

        • All of these things are concerning. I think even a tiny, symbolic rise in interest rates is likely to be a problem, when added to the natural tendency of the world economy toward contraction. Goldman says oil storage is running out. The US is doing better than practically any other economy in the world, and its oil consumption is not rising by very much, even with the low prices. US Distillate fuel consumption (that is “diesel’ and “fuel for home heating”) for May is down from last year’s level. Gasoline consumption is growing a little, but not a lot. Petrochemical feedstock use is down. Asphalt and Road Oil use is very seasonal, but May 2015 is down from May 2014.

          • doomphd says:

            I hate to say it Gail, but you called the global economic crash for late 2015 to 2016, and it appears all the indicators are pointing that way. I doubt we can have “even more bad news” posts for much longer.

        • Rodster says:

          Stilgar Wilcox says: True enough, FE, and now this; http://www.reuters.com/article/2015/08/08/us-china-economy-trade-idUSKCN0QD03320150808
          China’s exports drop 8.3%

          Charles Hugh Smith just wrote a great post wrt China and the impending Global Economic Sledgehammer, entitled :”Is China’s “Black Box” Economy About to Come Apart?”
          http://www.peakprosperity.com/blog/93861/china%E2%80%99s-%E2%80%9Cblack-box%E2%80%9D-economy-about-come-apart

          • Stilgar Wilcox says:

            Interesting and not written about much topic regarding false data reporting, Rodster. Below I’ve pasted from that article a story out of the Mao era, China, that really drives home the point:

            “This accretion of fear of reprisal/disapproval builds as it moves up the pyramid of command. This process can lead to tragic absurdities being taken as truth. In one famous example in Mao-era China, officials ordered rice planted in thick abundance along a particular stretch of road, so that when Chairman Mao was driven along this roadway, he would see evidence of a spectacular rice harvest.

            In reality, China was in the grip of a horrific famine resulting from disastrous state policies (The Great Leap Forward). But since everyone feared the consequences of telling Mao his policies were starving millions of Chinese people, the fields along the highway was planted to mask the unwelcome reality.

            Even the most honest reports reflect the biases of those summarizing feedback for their superiors. As a result, when the feedback finally reaches the top leadership, it may be inaccurate or misleading in ways that are difficult to detect.”

            As much as the article centers on China, we are all aware that falsified reporting in conjunction with corruption is rampant worldwide. E.G., I really don’t trust GDP from any country because when it comes to minor % changes, it would easy to go from say a 2% contraction to a 2% growth number simply by fudging a few numbers and in so doing radically shift perception from a recession to BAU. People responsible for delivering numbers don’t want to risk their livelihood by telling the truth if it is negative when the message to the people is being framed around, “All is well – keep borrowing, work your ass off and forget about saving for a rainy day by purchasing big ticket items today, oh, and please do not riot out of anger about these phony numbers when all your stuff is repossessed (because you really were not accurately informed).”

    • I think the problem with comments partly comes from my not having a new post up. I will get a new post up shortly (Monday?). My travels interfered with my usual schedule.

      • Stilgar Wilcox says:

        “I will get a new post up shortly (Monday?).”

        Whenever it’s ready to post, Gail, as I’m sure it will make for great reading and discussion.

    • edpell says:

      after about 900 posts word press placement become pretty random

      • One of several reasons I recommend anyone wanting to regularly follow, simply use e-mail subscription. Replies seem to always appear correctly. It also helps if people quote the post they are replying to, particularly a relevant snippet.

  2. Don Stewart says:

    Dear Gail and Finite Worlders
    I am finishing the physicist Frank Wilczek’s book A Beautiful Question, He concludes that the answer is ‘Yes, the World is a work of art!’

    Frank commisioned a painting of the yin/ yang symbol for this book, from a contemporary Chinese master. The painting illustrates, among other things, the principle of Complementarity, part of the bedrock of Quantum Theory.

    The symbol illustrates that a statement and its opposite may both be true, in the most provocative mental models. Thus: yes the world is filled with human violence, but also human cooperation and vision of higher goals. Yes, growing food is hard work, but also rewarding. Yes, parents with children experience stress, but also deep rewards. Yes, microbes can cause disease, but they also digest our food for us and keep us healthy.

    I think that a friend serves at least these functions:
    *Unconditional positive regard, like a good dog
    *Timely help along the path you have chosen
    *Friendly corrections when you are getting the yin and yang relationship out of balance

    I do not see much evidence that internet discussion groups are very good when it comes to the functions of friendship. Mostly they are a waste of time as people reiterate previous positions and a few people monopolize the conversation.

    So…I think I have said about what I have to say on this site.

    In parting, let me recommend some of the reading I have done over the last 5 years or so…Don Stewart

    Lenton and Watson
    Ten Gates by the poet Jane Hirshfield
    Mobus and Kalton
    Capra and Luisi
    A Beautiful Question by Frank Wilczek
    Constructal Law by Adrian Bejan
    ‘Doctor’ videos on the current explosion of interest in healing rather than suppressing symptoms
    Tons of gardening and homesteading type books and videos

    • Artleads says:

      Don;

      I’m very disappointed to see you leave. Since I’m short on reading and study, your scholarship is a huge complement to my intuitive emphasis. I’ll copy the reading list. I like that it isn’t very long. A few good books are all I think we need. Very best wishes for your next venture.

    • edpell says:

      Don, please stop back in once in a while. I enjoy your posts.

    • Thanks for your many thoughts over the years. A site needs a diversity of views. You have helped provide such a diversity.

    • xabier says:

      Dear Don

      Ave atque Vale!

      ‘The dogs may bark, but the Caravan moves on!’

      Xabier

    • Michael Jones says:

      Don, You raised the bar in terms of intellect and demeanor as a gentlemen and scholar and contributed much and will be missed. You were one reason for me to be posting here and like yourself, will provide others the floor of opportunity.
      Hope your transition in Raleigh (or wheverever) is a smooth and adventurous one.
      Thank you for your recap of advice and readings. We all are facing the College of Hard Knocks and hopefully our degrees in L, L, L, (learning, learning, learning) will provide some
      Skills and insights on how to reach and respond in the most humane manner.

      • JMS says:

        Thanks for your insightful and very helpful contributions. Learned a lot with you. All the good!

  3. Fast Eddy says:

    Gail – this chart is at odds with other info that I am seeing on production costs:

    http://static1.businessinsider.com/image/53712e4f69bedde31684d4c3-854-673/screen%20shot%202014-05-12%20at%203.56.27%20pm.png

    The marginal cost of the 50 largest oil and gas producers globally increased to US$92/bbl in 2011, an increase of 11% y-o-y and in-line with historical average CAGR growth. http://ftalphaville.ft.com/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/

    Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html

    Sanford C. Bernstein, the Wall Street research company, calls the rapid increase in production costs “the dark side of the golden age of shale”. In a recent analysis, it estimates that non-Opec marginal cost of production rose last year to $104.5 a barrel, up more than 13 per cent from $92.3 a barrel in 2011. http://www.ft.com/intl/cms/s/0/ec3bb622-c794-11e2-9c52-00144feab7de.html#axzz3T4sTXDB5

    Any thoughts?

    • There are any number of ways of figuring out the cost of oil production. This is a point in time estimate, showing the relative cost of production of various types of oil. A huge share of oil costs go into paying taxes of the country producing the oil. These clearly are omitted (since if a company has no profits, in some countries it will not pay taxes). Funds required for new exploration and production are no doubt omitted. The cost of oil obtained using fracking is no doubt estimated using the very optimistic estimates of the companies on how long the wells will last. If companies could really produce oil for these amounts, the cash flow results would not be as terrible as they have been recently.

      There is also a difference in cost between the cost of the marginal barrel and the “average” barrel now in production. It is the new marginal barrel that is a particular problem.

      • Fast Eddy says:

        Thanks for the clarification …. I was seeing ‘production’ costs in the intro (can’t get to the behind paywall full articles any longer) and production costs on the Morgan Stanley article and assuming this was apples to apples….

        I suppose it’s like saying the production costs of a pair of jeans is $5 (4 raw materials and 1 labour) — raw material cost increases to $14… does not mean you can sell the jeans at $15 and break even….. there are many other costs incurred before one can make a profit on those jeans (overheads such as rent, shipping, marketing, etc…)

  4. Fast Eddy says:

    David Stockman CNBC Interview: Tops In—–Next Comes An Epochal Deflation – Contra Corner Digest – August 7, 2015

    http://davidstockmanscontracorner.com/david-stockman-cnbc-interview-tops-in-next-comes-an-epochal-deflation/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday

  5. eARTH says:

    If I had it my way it would be British State in the dock. They have already given away our country. A f “joke” about sums it up.

    http://www.express.co.uk/news/uk/596695/muslim-tells-old-bailey-uk-joke-atiq-ahmed

    Muslim who pleaded guilty to terror offences tells Old Bailey that UK ‘is a joke’

    A BRITISH Muslim who possessed a ‘how-to guide’ for Islamic state terrorists said he wanted to be sentenced in an Islamic court as he pleaded guilty to two terror offences at the Old Bailey.

    Atiq Ahmed, 32, yesterday admitted two charges brought under the Terrorism Act of disseminating terrorist publications – and described Britain as “a joke”.

    The offences relate to two “relatively short” videos posted on his Google Plus account between January and March this year.

    Ahmed, who is unemployed, had told the court: “I want out of this land… it’s like a joke to me.”

    Throughout the brief hearing, Ahmed – wearing a grey prison-issue tracksuit – muttered and rocked his head back and forth, and could be heard saying: “People kill innocent people and blame us.”

    Judge Michael Topolski QC adjourned the case until 21 September for sentencing and said: “The psychiatric element is going to be important for me to consider.”

    He added: “There won’t be a trial now, but there will be a sentencing exercise to go through.”

    But Ahmed – who claimed he had sought out material out of “curiosity and study” – ranted as he left court: “It should be an Islamic court. This is an enemy of Islam court”.

    […]

  6. Michael Jones says:

    Article of interest regarding China and the cost to stabilize their stock market

    http://qz.com/473102/chinas-stock-market-stimulus-has-cost-over-1-trillion-so-far/
    June 29: China’s pension funds are allowed to invest in stocks for the first time—$100 billion.
    July 3: The People’s Bank of China (PBOC) makes new loans to banks—$40.2 billion.
    July 4: China’s major securities brokers pledge to invest to stabilize the market—$19.3 billion.
    July 8: China Securities Finance Corp. (CSF), which makes margin loans for stock-buying, pledges new liquidity to mutual funds—$32 billion.
    July 9: The PBOC pledges new financial support to CSF—$41.9 billion.
    July 14: Beijing extends a program that converts local government debt into bonds—$450 billion.
    July: Additional provincial bond support (sources tell Balding, no official confirmation)—$161 billion.
    July 17: CSF given $483 billion in additional funds from the PBOC and state-run banks.
    The figure doesn’t include other stimulus measures that were rolled out before the June plummet but are surely adding liquidity now. Among them: a series of reserve ratio cuts since December that added $282 billion in liquidity, and the PBOC’s $62 billion capital injection into two state banks in April.
    If they were included, Balding said, the tally of total support would be $1.6 trillion.
    “That is far and away the largest economic support package in history,” Balding told Quartz. The high level of support raises serious concerns about the state of the Chinese economy overall, he said.

    • You are right–this is a huge amount. A person would hope that at least part of this can be recovered at some point. For example, funds invested in the stock market will still have value.

  7. richard says:

    Some light reading. It is what it is, and explaining would take too long.
    http://www.zerohedge.com/news/2015-08-05/damage-done-something-will-have-give
    http://bawerk.net/2015/08/05/that-70s-show-episode-1/
    “The reason was simply because agricultural output could scantily support more than the family working on the farm, producing very limited surplus to support other parts of the economic structure. However, as increased productivity in farming, first through opening up the western frontier and mechanization and later through crop yield improvements, surpluses grew and thus freeing up resources to be allocated to other sectors.”
    “If manufacturing output witnessed a sudden surge in productivity akin to that of bushel per acre in the agricultural sector from about 1940 we could conclude that this was a sustainable trend. But that is not what happened. On the contrary, from the 1970s US labour productivity growth slowed down considerably and the hyped productivity “surge” in the 1990s only helped slow the downward trend which actually accelerated its downward slide after the brief Clintonian hiatus.”
    “So no, manufacturing productivity cannot explain the diverging trend in employment from the 1970s, but the rapid expansion of ‘dollar’ issuance can. Instead of relying on increased productivity domestically, Americans exorbitant privilege made sure they could consume tradable goods from vassal states such as Germany, Japan and South Korea more or less for free.”
    “In 1991 after Berlin Wall fell, Communism was officially dead. In the early 90’s greenmail raiders would approach Captains of industry and say, “move your operations to China or we will greenmail you.” That means taking a company’s pension money (even though they don’t own it) as well as a company’s assets, and then hypothecating a new credit loan. This loan would then be used to buy out the company, and said company would often be dis-membered into parts.”
    “Let me put it this way: When you can buy wood furniture in North Carolina for cheaper than local furniture, then you know there is false economics.China doesn’t have wood. They have to import the wood, make furniture, then ship it back to North Carolina…and they can do this at a lower price than native North Carolina workers who have a forest nearby?”

    There is extensive literature on land held in common elsewhere, this covers Magna Carta and the crony socialism of the time :

    • Artleads says:

      Thanks, Richard. What an eye opener!

    • Thanks! There was definitely a plan supporting the shift to service jobs–other countries could make goods cheaper with their cheap labor and cheap energy supplies. The availability of unending US balance of payment deficits supported the plan. It helped too, that China would take on our debt.

  8. Don Stewart says:

    Dear Gail and Finite Worlders
    There is some interesting stuff at Peak Oil News
    http://peakoil.com/publicpolicy/saudi-arabia-might-just-have-blinked-in-the-oil-war/comment-page-1#comment-154950

    But first, I would suggest that you read Ugo Bardi’s astute observations about ‘viral memes’:
    http://cassandralegacy.blogspot.com

    As you read the Forbes article, look how closely it follows Ugo’s model of a ‘supermeme’. Particularly the presentation of a villain, who is about to get their just deserts. Parenthetically, the advertisements I get to invest in ‘America’s Energy Revolution’ usually feature a handsome guy wearing a white hat.

    Scroll down into the comments and pay particular attention to rockman and shortonoil. As I have discussed many times, shortonoil is using a model which claims that the driving force in oil prices is now the ability of the economy to generate enough cash to pay for the high cost of the oil produced. But the oil companies have taken on lots of debt and they either have to service that debt or else the current owners and managers are wiped out in a bankruptcy case. While it may not be good for the company as a whole, maximizing cash flow is definitely good for the current owners and managers. If maximizing cash flow does not generate enough money to cover full cycle costs, then eventually bankruptcy will happen anyway.

    You will notice that the preceding paragraph would never qualify as one of Ugo’s ‘supermemes’.

    Also note the ‘super-technology’ component of the ‘supermeme’ in the Forbes article. Contrast that with the statement by rockman about the same old/ same old technology.

    I’m no expert, so my crystal ball is cloudy. But I can sniff a ‘supermeme’ in the wind.

    Don Stewart

    • We don’t need government control of the press to get one-sided reporting. All we need is press who write what people want to hear. This seems to be the formula followed by most. If businesses fund two different points of view (Republican and Democrat), we get stories to support the two popular views.

  9. Steve says:

    Another article in the Daily Telegraph that proclaims US shale as being a long-term phenomenon that will outlast Saudi Arabia,

    http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html

    From the article,

    ‘The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45pc this year – and not only by switching tactically to high-yielding wells.

    Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $300,000 a well. “We’ve driven down drilling costs by 50pc, and we can see another 30pc ahead,” said John Hess, head of the Hess Corporation.
    It was the same story from Scott Sheffield, head of Pioneer Natural Resources. “We have just drilled an 18,000 ft well in 16 days in the Permian Basin. Last year it took 30 days,” he said.
    The North American rig-count has dropped to 664 from 1,608 in October but output still rose to a 43-year high of 9.6m b/d June. It has only just begun to roll over. “The freight train of North American tight oil has kept on coming,” said Rex Tillerson, head of Exxon Mobil.’

    They also use the argument made on here sometimes that even if shale operators go bankrupt someone else will come along and pick up the slack and just start operating the wells starting afresh. Is it really this easy? And will there be a large amount of companies that will try and make a go of shale if others fail?

    It did make me laugh when it states that the Permian basin in Texas could, ‘ could alone produce 5-6m b/d in the long-term, more than Saudi Arabia’s giant Ghawar field, the biggest in the world.’

    Also I don’t know if Gail or anyone else has heard of this but what is ‘clean fracking’? They state this could be used in China by using plasma pulse technology which would negate the use of water.

    Is this another ‘hopium’ article?

    • The technology is described here:
      http://www.novasenergy.com/technology/overview

      I’m not exactly sure what “Plasma Waves” are, as I doubt there are actually 10,000+ degree waves of superheated matter ripping through the well and surrounding rock.

    • One of the issues with fracked oil production is that it is hard to pick up all of the costs (including overhead costs and interest costs). Another issue is that it is difficult to properly forecast how long (or short) the production of each well will last. The way that the companies have justified their high costs is through the use of models that claim the wells will produce profitably for a very long period of time–something like 40 years. They continue to use these models when quoting costs, even though there seems to be little justification for believing in such long well life.

      The ratio of disbursements to revenue in the first quarter of 2015 was 4.15, based on the results of a group of companies. This means that shale companies are bleeding cash badly. But they can use their phony models to show almost anything.

      I know about one method might qualify as “clean fracking,” although I have not heard it referred to in that ways. It seems to be more expensive than the water-based method right now, though, in most applications.

      In the clean method, instead of using water as the fracking fluid, the fluid used is co-produced natural gas from some nearby wells, chilled to make a liquid. If I remember correctly, fewer additives are used as well. (The use of fewer additives may be irrelevant, however.) One of the major things that changes is that there is no flow-back water to dispose of. This water is full of radioactivity and other pollutants, so it is a problem to dispose of. Because there is no flow-back water, presumably any additives stay in the well. The natural gas comes back up again, so there should be no loss of natural gas in the process.

  10. Don Stewart says:

    Dear Finite Worlders
    A highly recommended interview. If you are pressed for time, start at the 39 minute mark:
    http://mentalwellnesssummit.com/reg-thank-you/

    This is the story of an MD who has become disgusted with drug based psychiatry. Humans are resilient and tough, and don’t need to be on lithium for decades.

    Most relevant to our Finite World and Collapse concerns, stress results in a restructuring of our psyche which grows us mentally and physically and spiritually. The attempt to avoid stress by drugging the population is disastrous. (See JMG’s blog today for something similar. Also Kelly McGonigal’s book The Upside of Stress, or her TED talk.)

    Don Stewart
    http://mentalwellnesssummit.com/reg-thank-you/
    Click on the second interview, Kelly Brogan, MD

    • “The attempt to avoid stress by drugging the population is disastrous. ”

      On the contrary, most of modern society is designed to maximize stress, not to avoid it. This helps drive people to consume more things they don’t need, and spend more on healthcare, and be more readily to submit to authority.

  11. edpell says:

    http://pubs.rsc.org/en/content/articlelanding/2015/ee/c5ee00615e#.VcJbuQFivx0.facebook
    A paper on energy payback time for PV. Unfortunately the answer in behind a paywall.

    • No paywall, only free registration required. All of the 8 tested panels have an Energy Pay Back Time (EPBT) less than 2.5 years, although some were as low as half a year, and the lowest at 0.22 of a year. At a glance, it looks like they considered everything from mining the raw ores, transport, processing, all the way to end of life disposal and recycling of the panels. They cover environmental impacts, CO2 emissions, probability and sensitivity as well as the EPBT. It looks like they are using some kind of standardization of Mediterranean conditions for calculations, particularly for the Perovskite panels which seem to still be in the R&D stage.

    • I found this article about the paper you mention. It says,

      “The research team reports the energy payback time for solar panel technology made with perovskites could be as quick as two to three months, easily beating silicon-based panels, which typically need about two years to return the energy investment.

      “People see 11 percent efficiency and assume it’s a better product than something that’s 9 percent efficient,” said Fengqi You, corresponding author on the study and assistant professor of chemical and biological engineering at Northwestern’s McCormick School of Engineering and Applied Science. “But that’s not necessarily true. One needs to take a broad perspective when evaluating solar technology.”

      I will believe it when the installed price comes way down. It needs to be able to produce electricity at something like 4 cents per kWh, including backup.

  12. Rodster says:

    Just a snippet of how bad the economy is in my area. A local Chevrolet dealership is advertising 0% interest on a 72 month loan. Yikes !

  13. Stilgar Wilcox says:

    http://auto.economictimes.indiatimes.com/news/industry/general-motors-to-invest-877-million-to-overhaul-flint-michigan-truck-plant/48353848

    For anyone that thought we decadent westerners had changed our colors, seen the light of peak oil and were committed to making a change to EV’s, above is an article about GM putting 877 million into an overhaul of a truck plant. Trucks are big now because fuel is less. When will they ever learn?

    Wow, I wish there was a button to click on that would take posters to the last post instead of getting carpool tunnel syndrome repeatedly hitting the ‘more comments’ button to get to the last comment. No complaints though – got to love this website.

    • “Wow, I wish there was a button to click on that would take posters to the last post instead of getting carpool tunnel syndrome repeatedly hitting the ‘more comments’ button to get to the last comment. No complaints though – got to love this website.”

      Just use e-mail updates, you only get the newest posts.

  14. Niels Colding says:

    Figure 12 Figure 12. World GDP in 2010$ (from USDA) compared to World Consumption of Energy clearly shows that money is only a meter of energy.

    This thesis is the basis of the following calculation of the real value of a barrel of oil:
    The average industrial electricity price in the USA is approx. 7 cents per kwh. All goods produced in the USA have their origin in an industrial environment where electricity costs 7 cents per kwh.

    Electricity is normally produced by means of coal. But in this case I assume that oil is used to turn the generator that generates the electricity. Furthermore I assume that only 40 % of the energy in the diesel comes out as electricity during this process.

    A liter of diesel contains 35 MJ. These 35 MJ can be converted into almost 10 kwh. A barrel of diesel (oil) contains 160 liters x 10 kwh=1600 kwh. However, only 40 % is finally converted into electricity:
    1600 kwh x 0,40 = 640 kwh. A barrel of oil is worth 640 kwh x 7 cents = 44,8 dollars.

    (And yes, of course I know that a barrel of oil is not pure diesel)

    • That’s an interesting valuation.

      • Niels Colding says:

        All equipment used to bring the oil to the surface is produced under industrial circumstances, and workers’ wages finally also end up in the consumption of industrial goods. If he goes to the barber shop or to his lawyer his payment will be a part of their income which again goes into consumption of industrially manufactured articles. If the worker chooses to place some of his money in the bank, the bank will know how to lend it to others who use the money to pay for industrial goods. Taxes? – governments know better than anyone else how to spend money …….. money is just a meter of energy consumption!

        • I agree. This is part of the reason that “energy payback” calculations don’t make much sense. Energy is used throughout the economy. We can’t just separate the “energy at the wellhead,” excluding wages, rent, interest payments, and other costs of doing business.

          • bandits101 says:

            We can’t just separate the “energy at the wellhead,”…………..
            Who does that? There is no need. One only has to find a starting point. If the energy returned this year is less than say five years ago, what is the problem, one then asks. What has changed, what am I using more of, what is costing me more and why.
            These are simple questions to answer. If the iron ore is becoming further away from the port, if the quality is falling, using more fuel to transport and refine and blend. More food and accommodation for increased workforce. Those things are intuitive. Anyone should be able to determine just by simple observation that EROI is declining. What need is there to investigate debt, bank fees or the price of under pants.

    • Jarvis says:

      Neils as a bush pilot I have pumped more barrels by hand than most here: 1 barrel is 45 imperial gallons or 50 US and 205 litres – that alters your equation

      • Niels Colding says:

        If so: 1 barrel = 205 liters of ‘diesel’ converted into 2050 kwh x 0,4 (efficiency) = 820 kwh x 0,07 USD = USD 57,4

        • Niels Colding says:

          Sorry – one more error – my energy converter calculates with kilos not liters, therefore:
          57,4/0,85 = 68 – (one liter of diesel only weights 0,85 kilos)

          Value related to the energy content of one barrel of oil is approx. 68 dollars.
          If one barrel of oil only costs 20 dollars there would be plenty of net energy left to use.

          (The same calculation can be made for coal, you just have to know the average price of one kilo of the coal type used in energy plants.)

        • The unit oil is sold in is called a barrel that is 42 imperial gallons, or about 159 liters, at least in America and Canada. This is likely different than the capacity of an actual physical barrel you buy somewhere, since it is based off the original wooden barrels used in the 19th century, not modern steel or plastic ones.

          It looks like WTI is at around $45, so it actually costs what it is worth! Of course, this is likely below many companies’ production cost.

          https://en.wikipedia.org/wiki/Barrel_(unit)

    • You have figured out why no one in their “right mind” would burn oil for electricity, if oil prices are much above $20 barrel. Back when oil was $20 barrel, your figures suggest that the oil value of electricity at 3.5 cents per kWh (a more reasonable historical price of the fuel component of electricity) was equivalent to $22.4 dollars for a barrel of oil.

      • Jarvis says:

        I would! If I can buy a barrel of oil for $45 and get $68 worth of electricity.

        • Niels Colding says:

          With these calculations I have made an attempt to find the balance point where the oil from an oil well is self sustaining and so to speak can go on and on paying its own expenses but has no energy left over to other activities (building schools, roads – you name it). In a way this oil well is neutral – or with other words -absolutely futile. If on the other hand a given oil well is ‘satisfied’ with 38 dollars, there will be 30 dollars left to drive other activities (building houses, paying pensions – you name it).
          In a very long period up to 1972 oil prices were quoted at 20 dollars per barrel. At that time the ‘world’ had 68 minus 20 dollars, i.e. 48 dollars, left to drive other activities than paying the expenses for the oil extraction. These 48 dollars are what I call the ‘net energy’ of the oil well. With an oil price of 68 dollars per barrel the net energy is zero. With an oil price of 80 dollars the net energy is minus 12 (the oil well actually sucks money out of the surrounding economic environment). And you are right when you claim that we need very low energy/oil prices to ‘let the world go around’.

          • We can break this down a bit further, to get more accurate numbers.

            “Refineries in the United States produced an average of about 12 gallons of diesel fuel and 19 gallons of gasoline from one barrel (42 gallons) of crude oil in 2013. Many other petroleum products are also refined from crude oil. Refinery yields of individual products vary from month to month as refiners focus operations to meet demand for different products and to maximize profits.”
            -from http://www.eia.gov/tools/faqs/faq.cfm?id=327&t=9

            One US gallon is about 3.785 liters: https://www.google.ca/search?q=imperial+gallon&rlz=1C1CHFX_enCA565CA565&oq=imperial+gallon&aqs=chrome..69i57&sourceid=chrome&es_sm=93&ie=UTF-8#q=us+gallon

            So there are 12 * 3.785 liters = ~45 liters of diesel and 19 * 3.785 = ~72 liters of gasoline.
            Diesel has about 35.8 MJ/L, Gasoline 32.4 MJ/L:
            https://en.wikipedia.org/wiki/Energy_density

            (12 * 35.8) + (32.4 * 19) = ~ 1045 MJ. 1 MJ ~= 0.2777777777778 KwH, so 1045 MJ = ~290 KwH.

            Average industrial electricity rates in the USA is 6.65 cents per KwH:
            http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

            So the value of all the energy in an average barrel, excluding chemicals used for purposes other than as energy (about 11 US Gallons), is 290 * 6.65 / 100 = $19.29 USD. You can put in your own efficiency estimates. There is a huge premium on diesel and gasoline for their portability, convenience, etc compared to electricity.

          • We really use different kinds of energy products for different things. Energy is a high-value energy product. No reasonable person would use it for electricity production, unless they were on an island, and had no other alternatives.

            EROI calculations mix together low value and high value energy products. Using an equal amount of a low valued energy product (say natural gas) to produce oil is perfectly reasonable. But even using a small quantity of oil to produce a low-valued energy product (such as intermittent wind energy) is of doubtful value. Something gets lost in the calculation.

  15. Don Stewart says:

    Dear Gail and Finite Worlders

    This will be a little philosophical digression, triggered by reading the physicist Frank Wilczek’s book A Beautiful Question.

    The Beautiful Question comes in two forms:
    Does the world embody beautiful ideas?
    or alternatively,
    Is the world a work of art?

    Wilczek’s answer is ‘Yes’, based on his analysis of the last few thousand years of art and science.

    You will have to read his book for a full explanation, but I will only take some of his conclusions and apply them to our confrontation with a Finite World.

    A note on amateurism. On pages 227 and 228 he leads us through the following:
    *The Core (his name for the Standard Model) provides a secure foundation, in physical law, for all applications of physics to chemistry, biology, materials science, engineering in general, astrophysics, and major aspects of cosmology. Its fundamentals have been tested with a precision more than adequate for those applications, and in more extreme conditions.

    The Core does…embody beautiful ideas. But those ideas are both strange and deeply hidden. It takes some imaginative growth, and some willing patience, to grasp their beauty.

    The challenge of achieving honest understanding, as opposed to crude and/or wishful thinking, is eternal…Nevertheless, I hope I’ve shown you that there are beautiful things in geometry that you (an amateur) CAN glimpse, through imagery and intuition, without lengthy study. Similarly here, I will present images and explanations that will allow you to glimpse some beautiful aspects of the Core. Not coincidentally, they’re the most central aspects!’

    My note: Wilczek’s emphasis on geometry is similar to Adrian Bejan’s emphasis on geometry in explaining Constructal law.

    On page 222, Wilczek considers places of worship, and mosques in particular:
    ‘Places of worship embody the aspirations of their architects, and the communities they represent, to ideal beauty. Their chosen means of expression feature color, geometry, and symmetry. Consider, in particular, plate HH (a beautiful modern mosque). Here the local geometry of the ambient surfaces and the local patterns of their color change as our gaze surveys them. It is a vibrant embodiment of anamorphic and anachromy—the very themes that our unveiling of Nature’s deep design finds embodied at Nature’s core.’

    If we compare the beauty of a mosque with heavily decorated Christian churches, we find some differences, related to the differences in the religions.
    ‘Color and geometry, symmetry, anachromy, and anamorphy, as ends in themselves, are only one branch of artistic beauty. Islam’s injunctions against representational art played an important part in bringing these forms of beauty to the fore, as did the physical constraint of structural stability (we need columns to support the weight of the ceilings, and the arches and domes to distribute tensions). Depictions of human faces, bodies, emotions, landscapes, historic sense, and the like, when they are allowed, are far more common subjects for art than those austere beauties.

    The world does not, in its deep design, embody ALL forms of beauty, not the ones that people without special study, or very unusual taste, find most appealing. But the world does, in its deep design, embody SOME forms of beauty that have been highly prized for their own value, and have been intuitively associated with the divine.’

    What follows now are my own meditations based on Wilczeks evidence and meditations. Wilczek observes that energy scarcity forces more structure into existence. Think of the seconds after the Big Bang with virtually no structure to the universe. But now the universe is cold, and we see structure everywhere. Similarly, I expect that as we humans move from a super-energetic world based on fossil fuels to a much less energetic world based on solar energy, we will be forced to adopt more structure. For example, extended families will not be the amorphous creature they are now, but a key ingredient in terms of our survival strategy. Someone’s value for their skill set will not depend very much on diplomas on the wall, but much more on demonstrated ability to do intelligent work. And so forth.

    Similarly, I suspect that the choice of a mate will be less a function of transient sexual fantasies and depend much more on an assessment of the ‘grit’ that the person has. Recent research has revealed that humans can make accurate assessments of another person’s empathetic reactions within 20 seconds. So Nature has given us the tools, many now atrophied, to survive in a low energy world.

    In terms of discussion on this web site, I think it is important to distinguish between a Catholic cathedral and an austere Mosque. The Catholic cathedral is filled with images which tell us what we want to hear: a personal God; s saviour; ability to avoid the messiness of being human (immaculate conception); supernatural assistance (the saints). Islam may have invented those things also, but the Mosque is a call back to a very much more basic relationship with the world. It is the difference between Biology (girls are pretty for a reason and peacocks tails serve a function) and Physics (everything is Energy, congealed or active). While we humans will always be biological creatures, I think that Physics is going to play a very large role in our fate over the next century. Consequently, commenters who keep trying to divert the discussion into things we wish were true biologically are not contributing to the discussion: but it doesn’t feed 9 billion; but people don’t want to work hard; but it would be hot in the summer and cold in the winter.

    I don’t want to belittle biology. Anyone who has studied soil knows that what happens there can be very beautiful indeed. Out of a constant search for lunch emerges the feeding of plants with the nutrients they need, just at the time they need them; the carbon and nitrogen cycles; the creation of new soil from bedrock and subsoil; pest resistance; etc. But, just as with Physics, we don’t get everything we might want. Humans are NOT the central concern of life in the soil. We can hunt and gather easily, but when we turn to agriculture, everything involves more work. There is little point in complaining about it…we just do the best we can.

    Similarly, the question of whether humans are necessarily violent. Humans clearly have the ability to both be violent and to cooperate. All the history and science that Wilczek cites would not have been possible without human cooperation. But those were also centuries of wars and other conflicts. Once again, we are asked to see the beauty hidden by the merely topical. Our survival may well depend on our ability to find the beauty and leverage it.

    I recommend that you make time to read Wilczek’s book, and draw your own conclusions.

    Don Stewart

    • “Similarly, the question of whether humans are necessarily violent. Humans clearly have the ability to both be violent and to cooperate.”

      As I understand it, young, single men have more testosterone and tend to be more violent and greater risk takers. Being around a pregnant woman causes hormonal and epigenetic changes that makes a man become less aggressive and more cooperative; at the same time, being around a man causes changes in a pregnant woman that makes her more motherly. Permanent brain re-wiring from hormones and genetics responding to specific environmental factors.

      Perhaps one of the best early responses to collapse will be to castrate any single, childless young men to quickly lower their testosterone without creating more mouths to feed.

      • Don Stewart says:

        Matthew Krajcik
        But when a band of roving bandits attacks the village, you want all those testosterone soaked young men who are trying to impress young women with their bravery.

        Don Stewart

        • “But when a band of roving bandits attacks the village, you want all those testosterone soaked young men who are trying to impress young women with their bravery.”

          The Janissaries were effective eunuch soldiers. I’m not sure that testosterone is particularly useful in gun-based warfare.

      • Artleads says:

        Or, to decrease population, infanticide of males would be an idea. If eunuch soldiers are effective, so too might women soldiers.

        • “Or, to decrease population, infanticide of males would be an idea”

          Only effective in the short term. By 1950, Japanese population was back on trendline, completely erasing the loss of men from the war. Better to have women married to eunuchs, then to have one man be a baby daddy for ten women.

  16. edpell says:

    Gail, what are the ground truths from the Balkans?

    • I presume you mean the Bakken, not the “Balkans.” Basically, there are a lot of companies working in the area who have ideas about how they could do things a little better, and would like to sell them to whoever has cash to pay for them. Quite a few of these ideas relate to the associated natural gas, much of which continues to be flared, despite a January 1, 2016 target for reducing the flaring. Basically, it is not cost-justified (EROI probably less than 1.0, if EROI to the consumer could be computed, which it cannot) to properly separate this gas, process it, and send it to markets.

      A number of ideas were presented. One idea was to simply use the flared mixture of gases to boil down the returned flow-back water, so it wouldn’t need to be trucked away. That way there would at least be a positive benefit from burning these gases. Someone else wanted to build a plastics factory in North Dakota, so that they might be able to use the ethane for plastics. The N.D. natural gas seems to have too much ethane in it, to meet standards for what is needed in furnaces and kitchen appliances.

      • edpell says:

        EOR, enhanced oil recovery. They could heat the water and send it back down the hole to make the oil less viscose and more extractable.

  17. Fast Eddy says:

    Matthew – further to that last comment — one thing we are fairly certain of is that shale bought us the last 7 years.. without it we’d be done.

    Solar has bought us nothing

  18. edpell says:

    On the question do we know enough to live at a 1800 level. There is a piece of land north of me. It has a strange property boundary extension of a path 20 feet wide and 200 feet long. It goes to a 50 foot diameter circle. Until you walk over and look you do not know about the vernal pool that forms every year and that a wise farmer holds on to to water the stock.

    How many humans know where the seasonal water sources in their area are located?

  19. Fast Eddy says:

    A reminder of how solar energy is a bottomless pit where good money follows bad to die…

    How many trillions of dollars have been wasted on this sick joke?

    And instead of flogging a horse that is nothing but a pile of bones why didn’t we use this wasted capital on other Hail Mary’s in an attempt to kick the can a few more decades?

    Oh right — because the Koombaya Green Brigade who worship at the alter of their false Jesus insisted that solar was the saviour – in spite of the facts that demonstrated it was an exercise in futility…

    http://www.zerohedge.com/news/2015-08-04/meet-solyndra-20-us-taxpayer-subsidized-spanish-renewables-firm-collapsing

    • “A reminder of how solar energy is a bottomless pit where good money follows bad to die…

      How many trillions of dollars have been wasted on this sick joke?”

      If money was not borrowed into existence to make the solar, and the oil and coal not burned, that “growth” would not have occurred, and those fossil fuels would just be stuck in the ground forever anyways.

      You cannot have it both ways; either we must waste resources to force growth to perpetuate BAU, or it is possible to conserve resources and degrowth the economy.

      Besides, look at all the other things that are a huge waste; ghost cities, millions of cars per year, the F-35 program, tens of thousands of nuclear warheads and the missiles and missile complexes to launch them. Why pick on solar?

      • Fast Eddy says:

        To reiterate — if those trillions would have been spent on other ideas (e.g. more fracking) that actually produced some energy — then we might have bought ourselves another decade or two…

        I also pick on solar because I enjoy mocking the fools who insist it makes sense — I am sure there will be those — who even after reading that article — will continue to insist that solar is the saviour.

        Stupidity is irritating.

        • More fracking would just result in even lower oil prices that would lead to collapse even faster. Are we even certain fracking results in a net gain of energy to society? Or is it possibly even worse than solar?

          If a conventional oil well produces oil at a cost of $20 per barrel, and a fracking well produces oil at a cost of $60 per barrel, doesn’t that indicate that it would be better to invest in solar with battery backup at a 1:2 EROI? Intentionally lose less energy through waste, simply because the other option is a greater loss?

          • Fast Eddy says:

            Perhaps. But there is no perhaps with solar — it is most definitely rubbish

            We should have been trying other things to kick the can

          • I think we need to look at calendar year flows on oil extracted by fracking and on intermittent renewables. It is the models used for these energy products that “prove” that they have positive impact on the economy. The models have several problems, including leaving out major costs (and these costs have energy use associated with them) and assuming the future will behave as the model predict.

        • edpell says:

          “Enshrining wind and solar as the centerpieces of our energy future is a recipe for failure.”
          https://www.facebook.com/EnergyFromThorium?fref=nf

    • Green Brigade, usefull idiots indeed made some waves in previous decade.
      Mainly in Europe, the Greens got into coalition goverments and similarly as turncoat social democrats of the past had suddenly no problems to vote for wars. In similar vein, they were also used to help channel giant debt infusions into renewable wind/solar schemes. The results in Germany and Spain are well known to this blog.

      • Fast Eddy says:

        One has to wonder what percentage of those trillions was paid in kick backs to corrupt politicians … how much was made in campaign contributions to those who supported this nonsense

  20. Don Stewart says:

    Dear Gail and Finite Worlders
    Ron Patterson’s current post is about the decline in US oil production. Overhanging the production decline is the horrendous effects of the low prices. Here is an interesting comment by BW Hill:

    ‘The majors are burning cash at an astronomical rate. If oil stays at $45/ barrel we’ll see shut-ins all across the board by year end.

    We expected prices to decline at this point in the depletion cycle, but not to the level they have gone to. The reason that the energy in a barrel of oil is worth 39% less than it should be is distracting at best. If prices do not recover within the next few months, we are headed for the Mother of all deflationary depressions. Get ready for a world where prices crash, and your income crashes faster. ‘

    First, his ’39 percent less that it should be’ statement is possible because he has a very precise equation which gives him ‘what it should be’. While equations are by their nature precise, they are not necessarily accurate…precision and accuracy are not the same thing.

    Second, those who have been predicting a financial debacle due to debt are probably less surprised than BW Hill. Both Gail and Nicole Foss have been predicting the financial debacle for some time. Hill’s language could be lifted from the speeches Nicole was making 5 years ago.

    Third, I do not believe that oil and finance are independent. There are reasons why economies don’t grow in the absence of a growing capacity to do work. There is also a desperate attempt by governrnents, corporations, and households to do whatever it takes to achieve growth…or at least the appearance of growth. Therefore, a more complete look at our situation involves both a sober book at our ability to do work and also the dangers of debt.

    Don Stewart

    • Fast Eddy says:

      Don – I think that pretty much demonstrates how the collapse — when it comes — will be rapid.

      It shows how crashed commodity prices lead to layoffs and bankruptcies and a death spiral

      We have propped the world for many years now with gargantuan stimulus — that game is over…. it seems there is nothing left in the tank…

  21. Fast Eddy says:

    US Recession Imminent As Factory Orders Plunge For 8th Consecutive Month

    http://www.zerohedge.com/news/2015-08-04/us-recession-imminent-factory-orders-plunge-8th-consecutive-month

    How many times have we been told “excluding oil-related firms” everything is awesome? Well, we have one question, why did Factory orders ex-transportation just plunge a depression-like 7.5% YoY – the worst since the great recession in 2009…?

    http://www.zerohedge.com/news/2015-08-04/please-ignore-oil

    Reading through the ZH headlines this morning — the sarcasm and the disbelief and frequent anger that permeates the posts and the replies — and just thinking ….

    If the people at ZH and its readers understood that what they are witnessing is not corruption or stupidity on the part of the decision makers…

    Rather this is a desperate battle to fend off the end of civilization — and quite possibly extinction — they would sing a different tune…

    That is never going to happen — those who are not dead within weeks of the collapse will be slurping their bark and grass soup cursing Ben Bernanke to the bitter end…

    Perhaps there will be a new religion emerge — the Cult of BAU — where the savages drag a space shuttle out of a collapsed museum and worship it like a god — and Ben Bernanke gets to be the devil because he was the destroyer of ‘more’

    Anyway – those US numbers are not helpful — there is no driver of the economy now — China is done – the BRICS are done — the commodity producers such as Australia and Canada — done…. the EU is a basket case … Japan is a hollowed out wreck….

    I see no way out of the deflationary death spiral — just waiting on the mega job losses to kick off the rout.

    • edpell says:

      One of the first things my wife did when we moved in was seed cat tails in the swamp next door. 25 years later we have tons of cat tails. No grass soup here, cat tail soup.

    • Yes, the “Factory orders ex Transportation” chart is concerning. I wonder how closely it correlates to “Factory Orders ex Oil.”

  22. eARTH says:

    (The Guardian: Genes influence academic ability across all subjects, latest study shows)

    This is quite an admission from the far lefty Guardian. They are hinting at “g factor” or “general intelligence” which is genetic and which means that we all tend to score equally well (as ourselves) across all cognitive skills measured by IQ tests. The “Flynn effect” whereby IQ increases with the standard of education, only affects this or that particular cognitive skill but it does not raise general intelligence.

    Lefties and multiculturalists have used controlled academia to vehemently deny that for decades and they savagely persecuted anyone who disagreed with them. Studies of twins, yet again, have proven the egalitarians to be totally biased and wrong.

    In fact, historical medical records of reflex speeds, which correlates closely with G factor, indicates that the average British genetic general intelligence has actually fallen by the equivalent of 15 IQ points since the Victorians.

    It means that we are born with an upper genetic capacity for general intelligence, and that intelligence is only slightly affected by the standard of education. Education has improved but our genetic general genetic intelligence has actually plummeted.

    Capitalism and the Welfare State has bred a massive urban lower class from the peasantry of old and the British population is now on average basically thick compared to what it used to be.

    http://www.theguardian.com/science/2015/jul/23/genes-influence-academic-ability-across-all-subjects-latest-study-shows

    quote:

    You may feel you are just not a maths person, or that you have a special gift for languages, but scientists have shown that the genes influencing numerical skills are the same ones that determine abilities in reading, arts and humanities.

    The study suggests that if you have an academic Achilles heel, environmental factors such as a teaching are more likely to be to blame.

    The findings add to growing evidence that school performance has a large heritable component, with around 60% of the differences in pupil’s GCSE results being explained by genetic factors.

    Although scientists are yet to pinpoint specific genes, the latest work, published in the journal Scientific Reports, suggests that the same ones are involved across subjects.

    Robert Plomin, a professor of genetics at King’s College London and the study’s senior author, said: “We found that academic achievement in English, mathematics, science, humanities, second languages and art were all affected by the same genes. People may think that they’re good at one subject and bad at another, but in reality most people are strikingly consistent.”

    The researchers analysed genetic data and GCSE scores from 12,500 twins, about half of whom were identical.

    Results in all subjects, including maths, science, art and humanities, were highly heritable, with genes explaining a bigger proportion of the differences between children (54-65%) than environmental factors, such as school and family combined (14-21%), which were shared by the twins.

    […]

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

    Were the Victorians cleverer than us? Research indicates a decline in brainpower and reflex speed thanks to ‘REVERSE’ natural selection
    Study claims we have 14 IQ points LESS than our 19th Century ancestors
    Findings contradict the Flynn effect, which claims IQ has risen three points every decade since the Second World War

    • Another article on that paper. Suggests mental health, amounts of curiosity, motivation are also genetic:
      http://arstechnica.com/science/2015/08/your-inherited-genes-control-your-iq-and-may-affect-how-well-you-do-at-exams-too/

    • Greg Machala says:

      Interesting study. I have always felt that many college grads are little more than programmed bots. Many have no independent, critical thinking skills. If a problem falls out of their field of specialty or, does not conform to a learned set of parameters, they freeze up. Knowledge (or sheer memorization) by itself is not an indicator or intelligence. It is how that knowledge is leveraged to ones own advantage. I do believe reverse natural selection has damaged our ability to think. Those before us who improvised the best or adapted best survived and passed on the good genes. Those who did not, perished. I think at the very root level intelligence is defined by ones ability to leverage knowledge to improvise and adapt better than others.

      • Fast Eddy says:

        I agree – but I also think there is no choice.

        I recall in one of Steinbeck’s novels he foresaw this — he mentioned that being a jack of all trades was not going to be valued in the new economy that was emerging…

        One had to specialize to be paid well — to get a decent job.

        The competition is fierce…

        It’s one of the reasons why most people have little interest in understanding broader issues — they have no time — they are 100% focused on their jobs (‘always on’ – pick up email even on holidays — I know one guy working at a big investment bank – the rule is you must respond to emails within 3 hours — no matter what time of day…) … and what little time they have free they spend with their families…

    • edpell says:

      Yes! Here in New York State all sorts of educational stupidity is due to the dogma that all are equal in ability not just equal in treatment before the law.

      There was a system of regular classes and regents classes. The latter being harder. It was decided that all students must be excellent. So, everybody had to take regents exams. Well the regular students mostly failed. Showing they were not equal. The solution to this unacceptable truth? Dumb down the regents exams until everyone can pass them. Now all are equal. All have dumbed down classes with dumbed down exams. Thank God for home schooling and private schools.

      • And university faculty can be told, “We need a higher pass rate on your courses. Make the course easier, or “curve” the grades more.”

  23. Greg Machala says:

    You just have to laugh at the insantiy of it all! Amidst the greatest resource crisis Humans have ever faced this is what makes front page new headlines:
    Iggy Azalea: ‘Plastic Surgery is an Emotional Journey’
    Drake’s Latest Meek Mill Diss
    Chihuahua Puppy Thinks She’s A Goat
    Alexander Skarsgard Showed Up to the Premiere of His New Movie in Full Drag
    BREAKING: ‘Real Housewives’ Star Kim Richards Arrested for Shoplifting
    Virgin Atlantic Plane Overtaken By ‘UFO’ Over Skies Of New York
    Kylie Jenner Dons Bikini, Poses Hard
    Arizona man accused of decapitating wife emits howl in court
    Fans harshly accuse Caitlyn Jenner of being too concerned with dating and fashion
    (And from the Business Insider:) The husband of a volunteer Mars colonist is worried about saying goodbye to his wife forever

    • edpell says:

      Yes, yes, yes!

    • Stilgar Wilcox says:

      Nice list Greg, especially the howling decapitator. Then we have a Decathalon gold medalist, the epitome of masculinity, actually has an underpinning of femininity, which in previous centuries would have meant certain annihilation, but in this modern era of distract the masses with all sorts of completely stupid stuff, ‘Caitlin’ becomes a celebrity super star whom we are all suppose to love and adore. I’m getting queasy.

      It seems fitting though that idiocy should become our highest aspiration on the cusp of all hell breaking loose. It’s probably a tell from nature that the end is nigh, you’ve gone as far as you could in your expansion and now it’s time to shut down the set and retool (with far fewer people). The Chinese have a saying, “When a few have everything and the rest have nothing, it’s time to burn it down and start over again.” The losing all the stuff, i.e. assets is a process about to jump into a much higher gear, and I guarantee when the humble whimpering masses that make it through the bottleneck talk about what is important post collapse, it won’t include any outrageously idiotic headlines. The Caitlin’s of the world would do best to keep it to themselves.

    • xabier says:

      I would say that when your spouse volunteers to be a Mars colonist, there’s a message in there somewhere……

  24. Don Stewart says:

    Dear Gail and Finite Worlders
    If the financial gloom and doom has got you down, take a few minutes to look over the agenda for our upcoming Carolina Farm Stewardship Association meeting.

    https://www.carolinafarmstewards.org/sac/

    If you are an elderly male, look at the pictures of all the pretty young women. Are you quite sure that everything is hopeless?

    Don Stewart

  25. Here is an idea that appears practical. Living on solar power, by using only 1 100w panel and a lead acid car battery:

    http://arstechnica.com/gadgets/2015/08/op-ed-how-i-gave-up-alternating-current/

    Of course, once we get into the details, we see he gets to that by using Uber, eating at restaurants frequently, importing clothes from China, using a butane stove to boil water, and of course, subsisting on Soylent.

    Still, getting rid of most household appliances and getting power consumption down is nice. It kind of sounds like he wears his clothes for a few days, then just donates them and wears new ones, rather than do laundry. His clothes are mainly made of oil, and shipped by oil. “Extreme Sustainability”, for sure.

    • Steve says:

      I wonder how long solar panels can last for if you just store them up and not link them up to anything or utilise them. Could you store them for 10 years and then get 20-30 years use out of them or would the component parts degrade even without usage.

      I just think storing some extra panels would be a good idea IF you had reasonable funds to do so.

      • Greg Machala says:

        What would you power with them? Those systems would degrade with time as well too no? If it is an AC (alternating current) system you need to power, you will need to store inverters as well. Solar panels are only useful if the electricity they produce has something useful to operate. Even if the panels lasted forever, the devices they power will not last very long. The weakest link in the chain thing rears its ugly head again. A solar oven would be infinitely more useful than solar panels. A well pump or fridge might be handy. But, the fridge assumes abundance of food to store and preserve. I don’t see there being much or an abundance of food though. A well pump would need an inverter to work unless you got a DC motor now to power it before they become unavailable. Then hope and pray the DC motor is not made in China.

        • Well made components can last decades, and there are people who can service them; being able to maintain and repair things, and make replacement parts, will be invaluable. Hopefully, not too much knowledge is lost. For sure, you want everything on DC, preferably 12V and low wattage.

          As for your claim about a lack of abundance of food, food mostly grows in one or two harvests per year, and you must store the rest for all the times in-between harvests. A chest freezer with a brushless DC motor would be a good thing to have on solar, if you’re going to have anything. Rather than using a conventional AC refrigerator, converting a chest freezer to be a DC fridge would be much more efficient.

          At the very least, I think if you can quietly accumulate enough food and materials to survive three years into collapse, you’ll have the time to adapt to having no electricity or fossil fuels.

          • Greg says:

            It is certainly worth trying. If enough people try different things hopefully some will make it through the coming bottleneck. I have often thought of putting solar panels on my parents farm house water well. But, costs are more than I can afford. Water is the master resource though and having access to it without manual labor would be a huge.

            • Greg says:

              A good quality DC brushless will indeed last decades. I am not sure if they are available anymore though. But, I haven’t looked either. If you can keep the well pump going you may have good crops and then the DC freezer will be handy. Just don’t get dependant on it. That is the problem. It is hard to force one’s self off the fossil fuel system that does all the heavy lifting for us.

          • xabier says:

            The problem with the decline of BAU is that, even before a ‘collapse event’ the quality of all components will be greatly degraded by manufacturers, under pressure to sell more – making goods that wear out quicker – and save costs.

            This is rather obvious even now: the bike repair man told me the other day that he had noticed a serious decline in the quality of components particularly over the last 2 or 3 years, everything wearing out too quickly.

            One could come up with a long list of things. This compromises all mid-term planning, or even comparatively short-term.

            A Russian friend laughingly calls it the Sovietization of manufacturing – whatever you get will be rubbish.

            (This is of course an exaggeration, as the Soviets did make some very durable goods: a Polish friend has a Russian fridge which is 40 years old, still going strong.)

        • Fast Eddy says:

          Lorentz makes submersible pumps that don’t require inverters — we are dropping one in the creek in a few weeks….

          There is a fair bit of other gear that goes with this including a controller — like you say – if anything goes wrong with any part of it there’s no going to Wally’s World for spares…

          And I doubt anyone will be able to repair it — this is specialized high tech stuff…. you won’t be able to go to Fred Sanford’s junk yard to look for components

          But water is essential…

          This end of the world thing is getting pretty pricey — I’ve pretty much blown my entire MPF pension (which I was able to redeem when I bolted from Hong Kong) at Wally’s World…

          BAU is most definitely not making it to my 65th — so I reckon better to get me a water pump, some big ol tanks up the hill and a pile of shovels with that cash.

      • Fast Eddy says:

        I suspect the panels would be ok — but the batteries would likely be the problem.

        • Greg Machala says:

          For a well pump, I think just running it during the day would be fine without batteries. A good chest freezer would probably do OK overnight as well. The occasional power tool usage would be during daylight as well. But, it does depend on where you are and a long string of cloudy days may cause a problem. Overall though I think it would be possible to extend the party a bit longer, at least on the individual level. Of course this assumes no hoards of thugs robbing you blind.

      • You would also need to store the things that you use with solar panels. We are not going to be making more batteries or more LED lights. If you want a water pump, you need to store that as well. I understand that you need special water pumps to work with solar panels. They generally cannot provide enough power to start up “regular” pumps, if I understand the problem correctly.

        • Fast Eddy says:

          That is correct – a normal water pump cannot be operated using solar energy — you need to buy specialized pumps that work with low voltages — and they are much more expensive than standard pumps

          • “That is correct – a normal water pump cannot be operated using solar energy — you need to buy specialized pumps that work with low voltages — and they are much more expensive than standard pumps”

            $100 doesn’t seem too expensive. The 5 year MTBF is kind of disappointing, however. 317 GPH, 10 foot head.
            http://www.ncix.com/detail/swiftech-mcp655-b-12v-industrial-water-96-23990-1294.htm

            If you are setup for grid-tie, you probably have 600 VDC and/or 120/240 VAC. The above is only needed if you are using a single panel specifically for the water pump.

  26. Adam says:

    Tim Morgan has published another thoughtful piece:

    https://surplusenergyeconomics.wordpress.com/2015/08/03/56-storm-front-part-1/

    Extract:

    “those who believe that China’s huge reserves can be used to fill the gap seem to forget that deploying this would involve selling vast quantities of un-repayable American IOUs to replace equally un-repayable Chinese commercial debt.”

    • This is a bit simplistic article, especially about the debt estimation mathematics as somehow validation of physical limits. Instead, the economy is above all the primary social playground where tokens and whipping tools can be changed by TPTB at will. So they often do, however systemic braking point comes only in relatively time distant cycle spikes as the whole society must suddenly rearrange for new conditions surrounding it, usually this takes some degree of reshuffling inside the TPTB niveau as well, in addition to few %% of the lower classes which might get hurt, but only big cycles or supercycles get you some real action change aka the french revolution, the fall of 1gen civilizations around 1000BC etc. Those are the supercycles, where we get the idea there is another one just around the corner in few years time, and not in say 2045?

      • Adam says:

        For me, it validates Gail’s point that financial systems are liable to collapse before all the available resources are used up.

        • I’d encourage everybody to read the good discussion bellow that article especially about the propensity of governments monetizing the debt away more and more.. also for the simple reason that the whole global culture shifted to open can kicking festivity, so there is no one of power/influence to object to status quo, at maximum the BRICS will run their own parallel debt scheme.

          Perhaps what we should be primarily concerned with is the time difference/spread between “financial collapse” and objective moment where available resources are used up.

          Basically, TPTB play the mastery game of can kicking with the ultimate goal to make this difference as tight as possible, i.e. the systemic financial collapse is followed immediately by peak resources. In that fashion they prolong their pleasures and control over the spices to the most extreme distance possible. In my book that’s the correct interpretation of reality based on relevant history and human nature. And since there is at least a few decades of highly combustable fossil fuels laying around the planet left (especially now with the onset of yet another depression), the show must go, we are not there yet..

          • tagio says:

            world,
            I agree that there is no reason the central banks cannot continue to monetize, monetize, monetize. When the next financial crisis hits, why can’t they just start bailing out large insurers, pension funds and mutual funds as they did with banks in the subprime crisis, and replace the damaged stocks and corporate bonds held by those institutions with fresh cash at 100 cents on the dollar? The Fed is already the largest owner of residential mortgages in the U.S. and owns a high percentage of Treasuries. If they bailout equities and corporate bonds next, eventually the shareholders of the Federal Reserve will own most U.S. private “assets.” The only real limit on continuing in this vein is their own “credibility,” which is substantially aided and abetted by their systemic indispensability. So many want to believe, need to believe, so many want and need to preserve their virtual wealth that they will “play along,” that there is no way to determine how long this can go on. Rickards and other commentators are fond of saying that the “Fed has shot its wad” (god I hate that expression) and has no more room to maneuver Really? On what basis do they have no more room to print and expand their balance sheets? This statement is just their own subjective assessment of the limits to credibility, but people are in such desperate straits to keep this corpse alive that when the next financial crisis hits, they will be like children watching chanting “I do believe, I do believe!” https://en.wikipedia.org/wiki/Tinkerbell_effect

            • Excellent points in your post, thanks Tagio.
              It seems we have entered a twilight zone, where small fish can be ignored (retail, small banks/funds, small countries), while bigger mid sized fish like pension funds and or sovereign wealth funds like in Norway or Gulf states surely won’t rock the boat, not mentioning the truly big fat cats like USG, China, Russia and int. banksters operating this level. It is simply mexican stand off time. Moreover, I think we are living in times of screaming publicly “I don’t need any stinkin credibility anymore” we are way beyond that.
              Very few commentators managed to identify such nature of the beast after 2007/8 and I guess even fewer can reliably estimate the longevity of it before true systemic reset. My guesstimate is upto two decades more are possible to be squeeezed out of this situation, if the global oligarchy cooperates, which we can see “evidence” of lately as some sort of shuttle diplomacy is buzzing among the core big powers lately, but realistically it could be way less 5-15yrs.

          • Fast Eddy says:

            I fail to see how monetizing the debt can help when deflation grabs hold of BAU by the throat…

            Countries can monetize all they want — but if production costs exceed the price that people can pay for something — there are going to be bankruptcies — there are going to be layoffs….

            And that leads to a deflationary death spiral where basically there is no economy… production of goods and services — and trade — just stop. The financial system collapses.

            Meanwhile — countries can continue to monetize to the bitter end — they can prop up their stock markets to record highs — but that those are just numbers.

            They could also play Monopoly and pretend that is real too.

            Recall Germany prior to WW2 …. QE has its limits.

            Eventually you end up pushing on a string.

            • Greg Machala says:

              I agree. Deflation is a whole different animal than inflation. Very difficult to stop it from spiraling out of control. Exponential downward loss of jobs and wealth. Ten layoffs become 100, then 1000 then 100000 very quickly. Nothing is profitable anymore so economic death comes very quickly.

    • Stilgar Wilcox says:

      Adam, at this point there is so much un-repayable debt in the world I wouldn’t be surprised if at some point they find a way to cancel much of it in a way we never hear about or notice. We’ll read a newspaper report in years to come and wonder where all the debt went. As a citizen we’ll be told that if you like your lifestyle don’t ask too many questions. The trouble with all this of course is we cannot escape the net energy decline.

      • Adam says:

        > I wouldn’t be surprised if at some point they find a way to cancel much of it

        But what about the creditors? Who would accept a 100% haircut? And if they did, what effect would it have on them? It could bankrupt them too. And so a cascading effect could begin. No, this tangled mess will not so easily be untangled.

        • Greg Machala says:

          Well I can see at least one case where this could “work.” Forcing entire countries out of the system would cancel debts to that country. Just drop them out of the system as part of the “haircut:” Conjure up some fake story about ISIS in that country or just simply have the media turn a blind eye to any news about the errant country, cut off their energy supplies and that country is essentially trapped. Then, sink the floatillas. Voila BAU continues.

          • Doesn’t forcing some countries out of they system drop demand for some kinds of goods (ones that the country was buying on credit previously, but can’t really afford)? If this happens, commodity prices will drop even lower than they are now.

            Our problem is ever-lower prices. Your solution would make this problem worse.

      • What is pretty nasty prospect is that likelyhood of intermin phase of few years after the reset when savers are mostly wiped out while debt hogs are sort of left in limbo not stripped “of their” assets, notably residential real estate, carz, yachts etc. For one thing, there are more debtors voters anyway, so this is to be expected in order to calm waters that TPTB would go this route at least temporarily (already did as FED owns mortages since 2007/8).. Who said the world is fair? This would again cripple any meaningfull organic capital formation after the reset, therefore more poverty and slow motion wrackage removal after the event.

    • Fast Eddy says:

      Thanks – that’s excellent stuff…

      Also good https://surplusenergyeconomics.wordpress.com/2015/02/04/45-on-the-money/

      • Fast Eddy says:

        When reading the article on Money…. it reminds me of who is ultimately in control of the world….

        When you have the power to create money — you directly or indirectly — exert control over everything and everyone.

        • Maybe they will subsidize the price of oil down to $20 / barrel. The price of everything else will increase from the money printing, giving that much-needed inflation, and we get the “cheap” oil we need to keep the wheels turning. Then, they can buy up and retire the debts, and keep the party going a few more years.

          All I want for Christmas is one more year of BAU.

      • I like that one too!

  27. Artleads says:

    Reposted from Nature Bats last blog:

    kevin moore Says:
    August 3rd, 2015 at 5:51 pm

    I continue to focus on current economic indicators because:

    1. the solar dimming which provides some protection from a surge in temperature from excess CO2 and CH4 is dependent on present economic arrangements continuing; a sudden collapse of global economic activity is likely to exacerbate the environmental meltdown in the short term.

    2. the entrapment of the masses by the scumbags at the top of the pyramid is very much dependent on the system delivering trinkets, entertainment and other short-term rewards to the masses; whereas most people are happy to turn a blind eye to species extinction or environmental collapse they are not prepared to turn a blind eye to financial collapse or economic collapse. That hits hard and fast.

    3. the sooner the present system does collapse the more likely additional overshoot (200,000 extra mouths to feed each day that passes) will cease and begin to reverse.

    4. continuation on the present economic path increases the degradation of the environment, both locally and globally.

    The financial-economic-political system is the prime cause of the on-going environmental-social catastrophe.

    • Isn’t it a bit naive perspective?
      There could/would be a wide gamut of possible responses midterm-longterm to collapse and global fragmentation, surely one of them is burning cheap coal for some grid baseload security (plus perhaps coal to liquids), which is relatively low tech among other “benefits”. Many countries will attempt some sort of semi autarky at least for few decades where coal is the winner.

      Besides the claim about culprit called “the financial-economic-political system” is not very precise, because it’s a mere extension of prevailing human nature, which developed over certain time frames, we can debate thousand years or larger cycles.

      I gather most of us know very well, that by late 1940s there was enough practical and scientific info to opt for sort of distributed permacultural paradise and small city fabrics with public transport etc. No, the greed on steroids prevailed both elites and individual, as alwayas, we are simply hardwired for it. There must be profound changed in the human genome to overcome this patology of earth destructive past, and that’s a project for next centuries and millenia, Greer has a good point about this concept.
      No fast total collapse, sorry.. that’s easy unrealistic opt-out.

      • “Besides the claim about culprit called “the financial-economic-political system” is not very precise, because it’s a mere extension of prevailing human nature, which developed over certain time frames, we can debate thousand years or larger cycles.”

        You think the banking system in America is an inevitable outcome of human nature, and that no other possible banking and financial system could exist there? That the particular form of government is somehow ingrained in humans?

        “Many countries will attempt some sort of semi autarky at least for few decades where coal is the winner.”

        They will be able to extract all that coal without burning nearly as much oil? How? Mountain top removal using manual labour? How will they build new coal burning power plants? The quality of the deposits are much lower than when people used to extract the coal using picks and shovels, and at greater depths or otherwise harder to reach.

        I think the key is food production; as soon as there is mass starvation, things will start to quickly unravel. That is one thing that cannot be papered over, unlike debts.

        /

    • I agree, but I am not willing to stop the economy to stop the environmental problems. The economy will stop by itself, soon enough.

  28. Fast Eddy says:

    As it now happens, the global credit boom is over; DM consumers are stranded at peak debt; and the China/EM investment frenzy is winding down rapidly.

    Now comes the tidal wave of global deflation. The $11 billion of bottled air that disappeared from the Wall Street casino this morning is just the poster boy—–the foreshock of the thundering collapse of inflated asset values the lies ahead.

    http://www.zerohedge.com/news/2015-08-03/worldwide-credit-boom-over-now-comes-tidal-wave-global-deflation

    • Steve says:

      I wonder if India is the next ‘growth’ success? They started their economic reforms in 1990 (I think) – a good 12 years after China and they have a growing population that will be bigger then China’s in a few year (thats if you believe a growing population can occur if the SHTF in the meantime worldwide).

      I’m surprised the world doesn’t suddenly announce a series of ‘megaprojects’ to soak up all this redundant copper, iron ore, coal, etc. China could build an underground train station to Japan and the US. The UK could build another 30,000 wind turbines. The USA could cover the entire Arizona desert in solar panels to keep us all on the economic growth treadmill.

      • As far as I can tell, India squandered its resources on silly things, like giant multi-lane freeways. They also do not have the same level of national unity as China, the government has much less authority to forcibly reallocate land and resources. Unless there is a major, timely breakthrough in thorium reactors, since India has beaches covered in vast swathes of thorium salts.

        • India is in terrible shape, from what little I have seen of it. They do not provide bathroom facilities to a surprisingly large percentage of the population. Water is often available only at a central location. Women come with big jars, and carry the water back on their heads.

          There is a multi-lane freeway in Mumbai that is nice and badly needed. But outside Mumbai, the (admittedly few) roads I saw were in very bad shape.

          The school system provides a half-day of education, but it has problems. I understand that there is a problem with teachers not always being there, and school discipline is said to be not very good. There is a need to teach in multiple languages, because each area has its own language. There is also the “official” Indian language to teach, plus English to teach. It is hard to squeeze everything into a half day.

          • Ann says:

            About India. Approximately 25 years ago, ultrasound arrived in India and was used (for a fee) to determine the sex of an unborn fetus. If it was a girl, it was aborted in many cases. Now, they have WAY too many young men who have no possible hope of ever having a wife. Viola, gang rapes of locals and tourists.

            • “Approximately 25 years ago, ultrasound arrived in India and was used (for a fee) to determine the sex of an unborn fetus. If it was a girl, it was aborted in many cases.”

              That’s what happens when you violate the Prime Directive.

    • Thanks! Also, according to the article, between 1994 and 2014, world debt increased by $160 trillion ($200 trillion – $40 trillion) while GDP increased by %45 trillion ($70 trillion – $25 trillion). Thus, GDP growth amounted to only 28% of debt growth.

  29. Don Stewart says:

    Dear Gail and Finite Worlders
    This will add to recent posts I have made about gene expression. I just listened to a talk by George Slavich, of UCLA. Here is a link to the website:
    http://www.uclastresslab.org

    What they are doing is tracing the pathway from social disconnection through changed gene expression to illness. For example, they studied adolescents who had experienced a break in their social connections, women with ovarian cancer who had strong or weak social connections, children with asthma, and others. They have collected statistics which show that social stress is a better predictor of chronic disease than traditional risk factors such as lack of exercise, smoking, etc.

    In one interesting experiment, they put a subject into an fMRI machine between two other subjects, also in machines. They were instructed to play a sort of game. But then, the subject in the middle was abruptly excluded from the game with no explanation. They were able to trace the effects from the brain down to more primitive layers which directly affect gene expression.

    Slavich concluded his talk with a consideration of the Metagenome–we are all transcriptionally connected. Sitting next to a depressed person may affect how you feel, and thus the expression of your genes. And since we make about 2 percent of our genes new every day, if the new genes are born under stressful circumstances, then they will affect our health for several months, before they are in turn replaced. So Slavich urges us to tend to our social connections.

    Don Stewart

    • Artleads says:

      Don,

      As always, thanks for your awesome research! The above is extremely interesting. It’s actually how many people in the third world think. Having science corroborate it is helpful.

  30. Don Stewart says:

    Matthew Krajcik
    A little addendum to Marjory Wildcraft. Here is a brochure for the upcoming fall session of the Organic Grower’s School in Asheville, NC.
    http://organicgrowersschool.org/events/harvest-conference/pre-conference-workshops/

    I call you attention to the following points.

    First, scroll down and look for the half day instruction in ‘building with bamboo’. If you live in the southern half of the US, bamboo is a wonderfully versatile thing to have. Bamboo does require some space, and keeping it confined is necessary.

    Second, go over to the upper right and click on ‘Class Descriptions’. Find the Season Extension and also the Year Round Growing and Cover Cropping classes. The small hoop houses pictured in the Season Extension session are what makes it easy to garden here in the winter,…and the reason I hope we can hang onto some plastic. The Year Round Growing gets at the issue of making plans so that your land produces as much as possible. And Laura Lengneck’s class of cover crops is everything you need to know to actually build your soil and its fertility.

    Wherever you live, if you don’t already know all this, find some classes to help you get started.

    Don Stewart

    • Artleads says:

      With great respect, I don’t want to be contrarian. For me, the problem with taking classes is that you learn to do things in somebody else’s way, and never find what is YOUR way. Without finding what is *your* way, one does not “dig” down very deep, and nothing changes. Most of us don’t think we’ll get anywhere doing things in our own way. Maybe that is true for the most part, but my experience suggests that if we persevere, and have no expectations, we’ll get to something valuable, even if it’s just the germ of a truly deep and original concept.

      • Don Stewart says:

        Artleads
        First, all of the teachers at these ‘farm’ events have real world experience. It doesn’t mean that they have ALL the answers, but they do have some of them. The same cannot be said to the same extent for, let’s say, an elementary school math or english teacher.

        Humans are set up to learn. My wife and I made a new friend last Sunday on the lawn at our food co-op listening to music. His name is Jake, and he is 11 months old. He is eagerly watching what all the other kids are doing, and copying them. While he is less attentive to the adults, he also pays attention to us old people, and I can show him tricks which delight him, and he studies the dogs very carefully. It would doom Jake to bring him into the world and tell him he has to figure it all out for himself. We are social animals. Much of the current dysfunction in our society traces back to the lack of healthy social interaction we are giving our children, and the consequent damage to their genes.

        It’s the same problem commenters here have with DNA. We have in our DNA recipes for a wide variety of proteins. Which proteins we make, in what sequence, is partly under program control, but much of it is under environmental control, which includes our actions and thoughts. A doctor acquaintance of mine is writing a new book with the tentative title ‘Improve Your DNA’. The book will, as least as currently envisioned, be a textbook on how to change gene expression to achieve your deepest goals….as opposed to just being some flotsam pushed around by things like TV commercials and the approval of crowds. The doctor estimates that 90 percent of chronic disease can be avoided by simple actions which change gene expression.

        So, yes, humans have the inherent ability to use violence to achieve their goals, but we also have the inherent ability to cooperate with other humans and with nature to achieve our goals. Saying that ‘I behaved badly due my DNA’ is a gross failure to understand reality.

        So…we have the ability to learn from a social scientist how to use a microscope to assess the microbes in the soil, and we have the ability to push that science in new directions under our own power. Taking an ‘all or nothing’ stance seems to me to be counterproductive.

        Don Stewart

        • Don Stewart says:

          sorry, ‘soil scientist’, not social scientist…damn Apple anyway

        • Artleads says:

          Maybe it’s just personal. I don’t like to learn new tricks. If I didn’t figure it out myself, I’m not interested. 🙂 I can see all the obvious flaws of my position, but I don’t see the point of doing things I don’t like doing. It’s a mysterious quandary to be in. I obviously have had to learn things, despite always being a poor student. By contrast, you appear to be an excellent student. I see there being trade off either way. The question always to ask is, are we losing or gaining ground in the big picture? Every day, more people born, more species die. Everything seems to be going terribly badly. Learning to be a better gardener doesn’t seem to get to the point. I don’t think you’ll agree, but can we agree to disagree? I am deliberately not talking “reasonably.”

          • Don Stewart says:

            Artleads
            I agree to congenially agree to disagree.

            Learning from others has its pluses and minuses. But the evidence from children who are kept from social contact is overwhelming.
            Don Stewart

          • Artleads says:

            I lean toward having children learn by doing. As much as possible, they would be doing what they enjoy, while participating in their community..

      • xabier says:

        I found that I made most progress in my craft (book restoration) by an attitude of utter devotion to the person teaching me, watching and remembering every word and movement and, above all, acquiring the right attitude.

        That communicated over 60 years of his experience to me, and some 1,500 years of unbroken tradition, passed on from man to man since the fall of Rome (no lady binders until the late 19th century). Soon to end I think…..

        Although supposed to be ‘good with my hands’ I was in fact a very slow learner, or perhaps it is just the case that it is very difficult indeed to reach (near) perfection! I always take a long time to learn to use a new tool.

        After that, I worked out some of my own ways of doing things. Including the use of non-traditional tools (to boost productivity!)

  31. Rodster says:

    Can you say flame out? This is the supposed Nation that will save the world from the evil western banksters. They are NO different than the West.

    “Breaking Down China’s $23 Trillion Debt Pile”
    http://www.zerohedge.com/news/2015-08-03/breaking-down-chinas-23-trillion-debt-pile

    http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/07/ChinaDebtTotal.png

    • Yes, this time it’s a bit different because most of the debt is not linked to overseas banksters, there are capital controls inside chinese system already, which could be put into higher gear. Also they have at least something to show for that debt infusion, infrustructure like thousand miles of rails for bullet trains, highways, factories and technology transfer from the westerm knowhow. Their crash will be indeed horrible, however some will fare even much worse like parts of NA/Europe.

  32. Fast Eddy says:

    Commodity stocks crashed to the bottom of Britain’s benchmark index amid fresh concerns over the health of the Chinese economy.

    China’s manufacturing activity was weaker-than-expected last month, bruising commodity prices worldwide. The country’s Purchasing Managers’ Index showed factory activity dropped to 47.8, its biggest contraction in two years, as new orders fell, putting the world’s second largest economy under further pressure.

    “The economic indicators out of China have gone from bad to worse, and the Beijing authorities have made many attempts to turn the economy around,” said David Madden, of IG. “After many pricey stimulus packages, there is still is no sign the economy can prevent growth from declining.”

    http://www.telegraph.co.uk/finance/markets/marketreport/11781254/Commodity-stocks-fall-on-weak-data-from-China.html

  33. Don Stewart says:

    Dear Gail and Finite Worlders
    There has been considerable speculation here recently about genes and hard-wired aggressive behavior. Here is some information that you may find interesting. I particularly suggest that you think about how these tendencies can be controlled, as opposed to simply letting them run wild. For example, military hierarchies reduce conflict…and anybody who keeps chickens knows about the chaos until the birds get the pecking order sorted out. Think about the internet, with anonymous commenters…does the anonymity encourage hostility?

    And i recently posted about the Polyvagal Theory. We have two vagus nerves, one from our reptile heritage and the other our mammalian heritage. We can switch off the reptilian impulse with things such breathing exercises, or singing, or playing a wind instrument.

    So, for what it’s worth…Don Stewart

    An unstable hierarchy can cause men considerable anxiety, Brizendine said. But an established chain of command, such as that practiced by the military and many work places, reduces testosterone and curbs male aggression, she said.

    Pre-occupation with establishing pecking order, which starts as early as age 6, motivates the “male dance, where they are always putting each other down,” Brizendine added. “It is better to be aggressive in a verbal jab than to duke it out,” she said.
    ———-
    The male brain becomes especially primed for cooperation in the months before becoming a father. Fathers-to-be go through hormone changes — prolactin goes up, testosterone goes down — which likely encourage paternal behavior, found a 2000 study in Evolution and Human Behavior.

    The pheromones of a pregnant woman may waft over to her mate to spur these changes, said Brizendine, who was not involved with the study.

    The expecting mom might be repaying a favor: Even before she is pregnant, male pheromones cause good-mom neurons to sprout in the female brain, found a 2008 study published in the journal Hormones and Behavior.
    —————
    Over the course of evolution, men have needed to compete for status and mates while young and emphasize bonding and cooperation when mature, Mehta said.

    Men seem to agree; and psychological studies have shown that one-upmanship holds less appeal for older men. Instead, they pay more attention to relationships and bettering the community, Brizendine said.

    The change is likely aided by the slow natural decline in testosterone as a man ages. Mehta and colleagues found that men with high testosterone levels tend to be better at one-on-one competition, while those with lower levels excel at competitions requiring team cooperation. The study was published in the journal Hormones and Behavior in 2009.
    ————–
    Daddy-specific ways of playing with their kids — more rough-housing, more spontaneity, more teasing — can help kids learn better, be more confidant, and prepare them for the real world, studies have shown. Also, involved dads lessen risky kids’ sexual behavior.

    Fathers that actively parent tend to have lower testosterone levels, report several cross-cultural studies. While it is not known if the hormone levels cause the behavior or vice versa, researchers theorize that evolution has favored involved dads. Human children are among the neediest of the animal kingdom and good dads optimize the chance that their offspring — and their genes — survive.
    —————–
    “Part of the male job, evolutionarily-speaking, is to defend turf,” Brizendine said. More research is needed in humans but in other male mammals, the “defend my turf” brain area is larger than their female counterparts,’ she said.

    While women too have fits of possessiveness, men are much more likely to become violent when faced with a threat to their love life or territory, she said.
    —————-
    While many studies suggest that women are more empathetic than men, Dr. Brizendine stresses this is not entirely true. The empathy system of the male brain does respond when someone is stressed or expressing a problem. But the “fix-it” region quickly takes over.

    “This hub does a Google search of the entire brain to come up with a solution,” said Brizendine. As a result, men tend to be more concerned with fixing a problem than showing solidarity in feeling, she said.
    ————
    When young, boys likely learn to hide emotions that culture considers “unmanly.” But tamping down emotion also spurs the body’s “fight or flight” response. A man’s strong reaction and subsequent suppression may ready him to handle a threat, theorize the 2008 study researchers at Lund University in Sweden.

    • So, fathers are less aggressive, as long as they can feed their family. However, those same hormones and genes probably mean that a father with a family will be more dangerous when he lacks the resources to feed them.

      It sounds like men having verbal jabs at each, while an attempt at “being civilized”, is completely counter-productive; it seems unlikely that a proper hierarchy will be formed from squabbling, whereas a few good fistfights, and the whole group can quickly establish a proper pecking order.

  34. Fast Eddy says:

    Lately the leaders of some of the world’s biggest energy companies have been saying oil prices will remain depressed for some time – perhaps for the next five years – and now they’ve decided to cut their costs in the most painful way possible: massive job cuts.

    Royal Dutch Shell announced July 30 that it expects to eliminate 6,500 positions. The announcement came the same day it reported that earnings in the second quarter were $3.4 billion, 33 percent lower than the $5.1 billion it made during the same period of 2014.

    The same day, the British utility Centrica said it plans to cut fully 6,000 jobs and reduce the size of its division for producing oil and gas. The day before, Chevron Corp. of the United States expected to eliminate 1,500 positions.

    And as oil producers struggle to rein in spending elsewhere in their operations, the pain is being shared by the oil service companies they rely on. The Italian energy contractor Saipem, for example, says it plans to cut 8,800 jobs in two years.

    “We have to be resilient in a world where oil prices remain low for some time,” Shell CEO Ben van Beurden said in the statement. “These are challenging times for the industry, and we are responding with urgency and determination.”

    http://www.zerohedge.com/news/2015-08-03/layoffs-surge-oil-price-outlook-remains-sober

    And what about job cuts in other commodity industries? Surely on the way….

    China has stagnated — so the outlook would be negative for prices….

    This is how you get a deflationary death spiral …. 10,000 layoffs become 20,000 then 50,000 then 250,000….. then a million …. and so on….

    Laid off people do not buy much ‘stuff’ — people with jobs who see a deluge of layoffs around them buy far less ‘stuff’ because they fear being laid off….

  35. Stilgar Wilcox says:

    http://www.bloomberg.com/energy

    Brent just went sub 50, down a whopping 2.47 to 49.74!!!

    As it was said in the movie Jurassic Park, “Hold on to your butts!”

  36. Don Stewart says:

    Matthew Krajcik
    One more thought on the issue of NYC feeding itself. Will Allen is a McArthur Genius who runs an urban farm in Milwaukee. It is a big glass house with lots of integration that harvests every bit of sunlight and yields diverse crops, including fish. He has a farm on the outskirts of Milwaukee, and trucks compost in from that farm. The compost is made with heavy machinery.

    You will appreciate the difficulty of making such an operation become a net energy producer. Will gets subsidies to operate the farm.

    So while I can admire the clever geometry he uses to maximize the harvesting of sunlight, and appreciate the integration of the fish, I doubt that he has a model for an Energy Descent future.

    My ideas run along the lines of separating dry staples (such as grains and beans and nuts and seeds) from fresh fruits and vegetables. The dry staples are produced on farms and are taken to the towns and cities by the most efficient transportation possible…probably water and railroads…but perhaps by ox carts. The fresh fruits and vegetables are produced either in backyard gardens or by truck farms located very close to the city. Truck farms still existed within 10 miles of the Empire State Building as late as 1965. But now they are covered with asphalt. The Fulton Fish Market was still in operation in 1965…I don’t know if it is still a working market.

    A big issue is food storage and preparation in the home. That is one of the biggest energy hogs today. Philip Ackerman-Leist bought a DC refrigerator and hooked it to a PV panel (as I remember). Back in the old days, meat was salted heavily to preserve it…and stomach cancer was the frequent result. Assuming one can rig up a solar cooker, or have a very efficient wood stove such as Edo Japan used, or use a PV panel to drive something like a DC rice cooker, then pretty efficient cooking may be possible. So, in a place like North Carolina, what I would envision is dried staples coming from real farms at some distance, with most of the fresh fruits and vegetables from my own yard or neighbors yards, produced year round with little food storage, with modest technology (but I sure hope we have some plastic), and fuel efficient cooking. You can see the fragile points in that chain. If any link doesn’t work, then the amount of land required per household increases.

    The notion of back yard gardens becoming part of the backbone of the food supply is supported by David Holmgren and Geoff Lawton. But, as I said, I doubt that rooftop farming in Brooklyn will be possible.

    Don Stewart

    • kosher says:

      Now there’s a logical refutation.

      You’ll enjoy starvation less.

      BTW sodomy won’t result in pregnancy.

    • Don:

      Let’s start off with the following outline:

      You can spend an unlimited amount of fossil fuels and money to setup the garden, but once established, no more money or fossil fuels may be used.

      We will assume unlimited fresh water, 12 hours of sunlight per day, daytime temperatures not exceeding 30 celsius, and nighttime temperatures never below 15 celsius.

      The garden must feed a family of four, providing no less than 8800 calories per day, and the Daily Recommended Intake of all major and minor nutrients. It must take no more than 80 hours per week of labour – can be divided any way amongst the family, but 80 total person hours per week. All maintenance and repair must be done by the family; no buying replacement parts in a store.

      You can buy as much fertilizer of any kind you want to start, but must only rely on recycling the family’s manure to add back in; the septic field / system / whatever can be any size and cost, it is not included in the garden itself. Same rules; the system can be built using any machinery, etc but once built, will have to operate and be maintained and repaired solely by the family without the use of fossil fuels.

      What is the least amount of square footage needed? Not included the water system, home, sewage, compost, anything, just the actual growing area. Once we have a baseline, we can expand it as we go to less optimal conditions.

      The numbers I’ve seen are 4000 square feet per person; there are claims it can be done with as little as 100 square feet. That is a huge range, and it would be nice to narrow it down and try to have a rough estimate of how much more is needed as you move further from the equator.

      • Don Stewart says:

        Matthew Krajcik
        I have not done an exhaustive study. Even after fixing all the assumption you have fixed, there are still many variables. Let me see if I can illustrate what those are. Take a look at this video from Marjory Wildcraft:
        https://www.youtube.com/watch?v=66AuL1cI7wg

        She is talking about growing half you calories in less than an hour a day on about 200 sq. ft. For a family of 4, with all you calories, that would be 1600 sq. ft. But what she has is a pretty monotonous diet, without much variety. For more variety, there are two things you can do. First, you can expand your space, but that’s not the real secret. The real secret is learning to plan your crops so that there is something happening all the time. A farmer friend of mine says that efficient planning is the key to profitable farming at the small scale. There are other tricks such as growing up trellises and the like.

        Marjory is also bringing in nutrients for her animals and her garden. As a rule of thumb, I would say that if you want to grow your own nutrients, you need to double the space she allots. So, for example, a crop of winter greens may be harvest and then followed by a cover crop which fixes nitrogen and adds organic matter to the soil. Small farmers can have very elaborate 7 or even 10 year rotational systems worked out so that the land is never bare.

        Near the end of the video, you will also see that she has a Vegan option which is 800 square feet, and involves calorie dense crops such as potatoes or sweet potatoes. But then you don’t have to deal with the animals. Or you could have the Vegan option plus chickens, which serve other purposes such as making manure for you. The Food Forest option involves perennial plants only and requires 1000 sq. ft. This would be the least maintenance intensive of all the options, and would require no inputs. You can usually keep a few chickens or rabbits in a Food Forest and avoid supplemental feed. So figure 2000 sq. ft. per person for the Food Forest. But if you want wood, then you need space to grow some bamboo or trees.

        You will note that Marjory can operate her system with no refrigeration and no electricity. She harvests from her garden just before meals, and she never has a cow carcass to deal with. A rabbit makes a meal plus soup bones. Eggs keep fine on the counter.

        Let’s talk irrigation a little bit. A friend of mine lives not too far from Marjory. She scrounges stuff. She built from scrap lumber some platforms, and put some scavenged tanks up on the platforms. She captures water off every building on her property, and has a stationary bicycle powered pump which moves the water up into the tanks. Then she can gravity feed water to her garden beds.

        If you put all this together, and want some woods and bamboo and some mushroom logs, I’d hazard the guess that you need perhaps 5000 sq ft per person, not including space for buildings. But I agree with Marjory that a good initial goal is getting a diversified source of half your calories. Then, as you develop your ‘rotational’ expertise and planning, you can increase the calories both by getting more from the same square footage and also adding a little more square footage if you need to. For example, you might start out with half you calories, but plant a Food Forest which will mature over several years. if you think collapse is imminent, then grow all your calories but try to start a Food Forest to make your life easier and more diversified and resilient in a decade or so.

        My plan, from a decade ago, was to grow a lot of veggies and fruit and berries in my own yard, and to work at the farm part time to get additional calories. I always had in mind that if there is an emergency, but not a collapse, governments will probably distribute grains. So, to get myself into the right habits, I buy 50 pound bags of rye berries and the like. Now the farm is in my rear view mirror, production from my own yard has at least doubled, and I still buy the bags of grains and dry beans.

        Hope this helps…Don Stewart

        • Steve says:

          You’ve got the right idea Don. Although I’m not an expert at all with gardening I think it comes down to our committed you are to making it work. Also experience is everything but if someone is new to it but dedicated with the right attitude then they have a chance.

          I think the best key to long-term survival is living in a small like-minded community where a group of families farm on their own plots and specialise in different crops, fruits, vegetables and then they can trade between them when one gets a surplus in one crop and vice versa. Say you have a great harvest of potatoes but another family’s crop of a different type of food wasn’t successful then you can help them out and then (hopefully!) you can rely on their reciprocal help if/when your own crop doesn’t work out one season.

          Also other things that people may decide to grow if the SHTF would be things like hemp which I’ve been reading about and it seems the uses of this are endless and it is a hardy crop that can grow pretty much anywhere compared to some other food sources. Also, if things were really bad and hospitals were no more then growing opium puppies for pain relief would be a great trading item (pain will still be around unfortunately and people would happily trade for something to ease it – just think about people who needed their teeth pulling out in the ‘olden days’). We obviously look at places like Afghanistan and frown on this kind of thing but opium is grown worldwide for morphine use and I could see it’s continued production post oil-age.

          • Fast Eddy says:

            I reckon the key to long term survival would be to purchase plenty of guns and truckloads of ammo — and find some like-minded men … really vicious cruel bastards….

            Then find villages of Koombaya Types — enslave their men sending them the fields to work — take their women as hostages (and for other things…) — and live large..

          • The trouble with hemp, like soy, is that it strips the soil of lots of nutrients. If you are taking it out of the soil to make rope, that nutrients is being taken right out of circulation for some time. If you have excess land you don’t care if it gets depleted, go for it.

            • Steve says:

              Thanks for the information Matthew. I’ve just started reading about hemp and my knowledge is somewhat limited. Yes – I think the more land you have the better but hemp looks like one of those multi-purpose products that would be invaluable in a post-oil society.

              I suppose the homesteading/small family farms idea could work well but it would need a large number of people to do it and obviously the earlier they start the better. If you had a few million small homesteaders in the US for example more people could get through the bottleneck and it would also ensure that limited barter could occur if certain individuals specialise in certain areas.

              Whether or not this is likely however is another matter. It would be a completely different lifestyle and I can’t see many people living in the developed world see a need for it. They suffer from the normalcy bias which is prominent throughout whereby they believe we have ‘recovered’ from the 2008 crisis.

            • “I suppose the homesteading/small family farms idea could work well but it would need a large number of people to do it and obviously the earlier they start the better. If you had a few million small homesteaders in the US for example more people could get through the bottleneck and it would also ensure that limited barter could occur if certain individuals specialise in certain areas.”

              There is a growing movement of young people moving out of the cities looking to start their own small farms. I suspect this, along with the low labour force participation rates, are indicators that lots of young people, whether consciously or subconsciously, know the current system is coming to an end.

        • While her plan sounds good just looking at raw numbers, it certainly has some issues. Eating a pound of rabbit meat and 4 eggs every day seems a bit much. You MUST eat veggies with rabbit meat, or you’ll become malnourished – it strips something out of your body if you eat the meat on its own. That’s at half your food.

          I think it would take more than a couple hundred square feet of land to produce enough food for 30 rabbits and 5 chickens ( based on there will need to be at least 20 bunnies along with the breeding stock at any given time, to harvest a rabbit every 4 days with a 3 month growth cycle).

          2000 square feet per person on a vegan diet within USDA Zone 8 seems pretty reasonable, excluding water, sewage, composting, etc. So, no less than half an acre lot for a family of four.

          I’m guessing her aquaponic system is based on adding a lot of inputs, on top of the 12′ X 36′ space.

          • Don Stewart says:

            Matthew
            I agree with much of what you say. I like Marjory for a number of reasons. First, she can take people who are frozen in the headlights and get them to see that ‘yes, I can do this’. Growing half your calories gives an ordinary person some cushion in case they lose their job. Getting accustomed to the idea that you can get along without refrigeration and electricity is a biggie.

            Once a family gets started, they will naturally branch out and refine and adapt to their own desires and needs.

            Listening to Marjory is vastly better than just reading doomer blogs or holing up with guns and ammunition.

            Don Stewart

    • SimonJamesNZ says:

      Will you please refrain from the personal attacks!
      I don’t always agree with Don’s viewpoint/comments, but I ALWAYS find it valuable to read. I also value his persistent, consistent attempts to make POSITIVE contributions.
      If you chose to expand on your comments about survival likelihoods contingent upon population density (which i agree with absolutely), I would welcome your post. As it stands, you have devalued your own message with the unnecessary attack on Don.
      Attack the argument, not the person please.

  37. Michael Jones says:

    There has been much space devoted on these pages regarding DNA and human behavior.
    I came across this book about one man’s quest to determine that very question and hope Fast Eddy takes notice and at least explores the story.
    The Price of Altruism: George Price and the Search for the Origins of Kindness Paperback – June 20, 2011
    http://www.amazon.com/The-Price-Altruism-Origins-Kindness/dp/0393339998

    https://en.m.wikipedia.org/wiki/George_R._Price

    Price developed a new interpretation of Fisher’s fundamental theorem of natural selection, the Price equation, which has now been accepted as the best interpretation of a formerly enigmatic result.[7] He wrote what is still widely held to be the best mathematical, biological and evolutionary representation of altruism. He also pioneered the application of game theory to evolutionary biology, in a co-authored 1973 paper with John Maynard Smith.[11] Furthermore Price reasoned that in the same way as an organism may sacrifice itself and further its genes (altruism) an organism may sacrifice itself to eliminate others of the same species if it enabled closely related organisms to better propagate their related genes. This negative altruism was described in a paper published by W. D. Hamilton and is termed Hamiltonian spite.

    Price’s ‘mathematical’ theory of altruism reasons that organisms are more likely to show altruism toward each other as they become more genetically similar to each other. As such, in a species that requires two parents to reproduce, an organism is most likely to show altruistic behavior to a biological parent, full sibling, or direct offspring. The reason for this is that each of these relatives’ genetic make up contains (on average in the case of siblings) 50% of the genes that are found in the original organism. So if the original organism dies as a result of an altruistic act it can still manage to propagate its full genetic heritage as long as two or more of these close relatives are saved. Consequently an organism is less likely to show altruistic behavior to a biological grandparent, grandchild, aunt/uncle, niece/nephew or half-sibling (each contain one-fourth of the genes found in the original organism); and even less likely to show altruism to a first cousin (contains one-eighth of the genes found in the original organism). The theory then holds that the further genetically removed two organisms are from each other the less likely they are to show altruism to each other. If true then altruistic (kind) behavior is not truly selfless and is instead an adaptation that organisms have in order to promote their own genetic heritage.

    Helping the homeless Edit
    As part of an attempt to prove his theory right or wrong Price began showing an ever increasing amount (in both quality and quantity) of random kindness to complete strangers. As such Price dedicated the latter part of his life to helping the homeless, often inviting homeless people to live in his house. Sometimes, when the people in his house became a distraction, he slept in his office at the Galton Laboratory. He also gave up everything to help alcoholics, yet as he helped them some stole his belongings, and he increasingly fell into depression.[citation needed]

    He was eventually thrown out of his rented house due to a construction project in the area, which made him unhappy because he could no longer provide housing for the homeless. He moved to various squats in the North London area, and became depressed over Christmas, 1974.[citation needed]

    Unable to prove his theory right or wrong, Price committed suicide on January 6, 1975. His body was identified by his close colleague W.D. Hamilton.[12]

    The book is worthwhile and engaging, remarkable man.

    • Very interesting! There is a definitely a limit on helping others.

    • eARTH says:

      I think that we all saw the results of his experiment. He went out of his way to break down his natural instincts and to apply altruism universally and he ended up killing himself. Quite right too. That is what happens. We have our instincts for a reason, to allow us to survive and to prosper.

      Our societies are doing exactly the same thing, it is suicidal to open our borders to other people and our own nation will be gone as a result. Or rather the capitalist system wants mass immigration to boost the workforce, their profits and to keep the capitalist system going.

      People can be brainwashed by the MSM into moralistic rubbish that suits the capitalist system and that only an insane man would normally countenance – and they have been. The result is only to be expected.

      • Fast Eddy says:

        Good points!

      • Michael Jones says:

        Too folks make judgements in haste and fail to see what actually occurred.
        Sorry you were not inclined to get a copy of the book and read the full account, both EAARTH and Fast Eddy. I suppose it is far easier to read into the tale to conform to ones point of view.
        The account in Wikipedia fails to tell of George Price and his health issues he faced.
        He was literally butchered in an failed operation that took its toll on him.
        He was awarded a settlement of some sort that enabled him to undertake his social experiment, one that I feel was a great success and shows that DNA programming does NOT play a dominant role in human relations as stressed by Fast Eddy and company.
        Perhaps more to the point, cultural conditioning plays a far greater role and if one is of the manner can break free of these constraints.
        So, to the brass tacs, blaming our DNA for our (bad) behaviour is a coop and a ploy not to take responsibility for our morality.
        Sure, George Price was not perfect, nor his “friends” . I may add at his “funeral” service a number of them paid there respects and commented on he changed their lives for the better in hard times.
        So, please remember those acts when we all have the opportunity to do the same.
        BTW, the book is available cheaply online.

        • Fast Eddy says:

          Michael – if we are such kinda peace loving animals — why do we need police forces — why do we need military forces?

          The concept that DNA does not drive us is absolutely ludicrous…

          If I locked you with 100 others in a room and starved you for 3 days — then delivered 250 pizzas you’d likely all share …

          But if I delivered 10 pizzas — guess what would happen…

          Mr DNA would make an appearance — and when Mr DNA is hungry — Mr DNA is a right nasty SOB….

          But if Mr DNA has enough pizza — he can behave like a docile wonderful puppy…

          http://www.unitedwaynorman.org/sites/unitedwaynorman.org/files/cutepuppy.jpg

          Now say I put you on an island with plenty of food and water— with 100 other 18 yr old males…. and 1000 attractive females…. all would be hunky dory … (actually all would be awesome!)

          But let’s say I dropped off only 5 pretty gals….

          Now that would be —- a different story…. wouldn’t it

          When Mr DNA gets horny — and he ain’t getting any —- he can get very very violent…. he can smash heads in … he can kill…

          Yes – environment has a big influence on your behaviour — the two examples above demonstrate exactly that…. if there is ENOUGH — the worst behaviours do not manifest themselves…

          But when there is not ENOUGH — and there will definitely be nowhere near ENOUGH post collapse —- there is going to be a bloodbath…

          The beast is always there — lurking — wanting — if you keep Mr DNA sated you don’t even notice him…. but when things to the wrong way….

          http://mediad.publicbroadcasting.net/p/michigan/files/styles/medium/public/201101/Vicious%20dog.jpg

          • VPK says:

            Remember, you only are responsible how you react to events and in turn create the environment in which to thrive or just endure. Much of the brain work, so to speak, has been pointed out here from good people, such as, Don Stewart, and all we need to Is apply the principles in cooperation among ourselves. To close off the possibilities in our minds prevents us from finding other avenues of sane living. Now, does this mean it will be “easy” or we may encounter just good luck, of course not. Life is a challenge and how we face it displays our character. If your wish to act like a wild animal with your teeth ready to pounch, that is your affair.

            • Rodster says:

              I tend to agree with FE on how humans tend to act in desperate times. We’ve seen this tendency show its ugly side when it’s every person for themselves. When the global system collapses I’d hedge my bets that you’ll be dealing with chaos, disorder, violence and death. Those that are meek and peaceful will be the easy targets unless they are well armed.

            • Fast Eddy says:

              The fact that people think we would behave otherwise just demonstrates how much of a bubble we have been living in because cheap oil has provided far more than enough.

              People are completely detached from reality. There normalcy bias is one where getting along has been the norm. They cannot envision anything but in their affluent western countries.

              Get ready to have your boat rocked when plenty turns to nothing.

            • Artleads says:

              Thanks. Couldn’t agree more. To stoop so low just to save your life…Ugh!

            • Rodster says:

              “To stoop so low just to save your life…Ugh!”

              That’s easily said when there’s law and order present along with the ability to feed oneself. When those three disappear it’s when you see what FE is referring to. It’s a fact and proven over and over that people will do some of the craziest stuff to save their life.

            • Michael Jones says:

              That is correct, folks have displayed the craziest acts of kindness in face of the ugliest and dire conditions. One only needs to look at situations in concentration camps during WW II to prove that is the case. Question is, is there a choice for a sane and rational person on how to act?

            • Artleads says:

              “It’s a fact and proven over and over that people will do some of the craziest stuff to save their life.”

              True. It’s not strictly the dying that seems to matter. It’s the uncertainty, suffering, stress, confusion, dysfunction…

              “One only needs to look at situations in concentration camps during WW II to prove that is the case. Question is, is there a choice for a sane and rational person on how to act?”

              And it seems that the rational thing to do first is proactively (before ultimate collapse) work to foster cooperation in your community (since cooperation is one potential mode of human behavior). But fostering cooperative behavior takes a lot of effort. Not taking the time or making the effort won’t do much to promote it.

            • Fast Eddy says:

              But we are wild animals…

              So you can bare your teeth — or you can lie on your back and submit when someone fiercer comes along — and submit…

              Keep in mind… historically submission generally meant the yoke goes around your neck… or worse…

            • Artleads says:

              “But we are wild animals…”

              One part of us, not all.

          • Michael Jones says:

            Some deep questions being raised and quick bites of “comebacks”, for what purpose, I wonder?
            One maintains, “We are wild animals”, if that is so, no need to proceed further in the inquiry, Fast Eddy, so the end of the discussion.
            No need for you to continue to harp on and on with continual pictorials and scare mongoring. If you need to vent, I for one, out of consideration for all, refrain and do it elsewhere. This is not a couch in a psychiatric ward for anxieties/fears.
            For those serious, what is the root cause of violence and disorder in our lives?
            Hey, that may take a little “work” in figuring. So, what is stronger the inner or outer?
            As pointed out humans have utilized or invented multiple means to end this in their lives/society,; religions, all kinds of isms, and other tricks as a means, drugs for one.
            Obvious, all these have not transforms humans psychologically.
            Still violent and ready to pounce.
            So, if violence is disorder, what is order?
            Well, judging from Fast Eddy’s photos it appears it will be us against “them”, whoever that may be…they are seperate or divide from “me”.
            Well, now, a picture does tell a story after all.
            To answer the question about a SANE and RATIONAL person…if violence is disorder (insane), then that individual will have NO choice as in not restorting to the act.
            Sure, I am very sure a picture of an axe murderer will appear shortly.

    • xabier says:

      ‘Pick up a wasp from kindness, and……. know the limits of kindness!’

    • Fast Eddy says:

      I think this book is useful in understanding this issue https://en.wikipedia.org/wiki/Atlas_Shrugged

      And a real world example of how altruism blows up in your face:

      http://pjmedia.com/tatler/2015/08/03/companys-70000-minimum-wage-works-out-just-like-atlas-shrugged-predicted/

      • edpell says:

        As Atlas Shrugged say the own can do whatever he or she wants to do with his or her property. So good on Mr. $70,000. Critics can form their own company.

        • Fast Eddy says:

          Come on — this guy is a total idiot… and he’ll soon be bankrupt … no wonder his own brother his suing him

          • We can’t know whether he would have been successful if he did not start paying a $70,000 wage to entry level workers, since there are so many outside factors, such as the Greatest Depression worsening and rapidly approaching total collapse of BAU. I’m sure the money and company will be long gone before his brother gets anything.

    • eARTH says:

      This recent Telegraph article may afford further insight (and a titter) into what happens when the “altruistic” Trotskyite Mafia get control in local communities.

      The one Jeremy Corbyn is leading polls for next Labour Party leader. 150,000 have joined Labour to try to get him elected, all the far lefties, lots from the right who want to finish off Labour and many just for the LOLs.

      http://www.telegraph.co.uk/news/politics/labour/11762773/Ive-lived-under-Jeremy-Corbyns-rule-it-turned-me-into-a-Tory.html

      quote:

      Once, in the small hours of the morning, my husband walked over to the house of our local councillor – one Jeremy Corbyn – and rang the doorbell. Mr Corbyn leant out of an upstairs window and complained that he was trying to sleep, to which my husband replied that so were we – perhaps he would like to take some steps to remove the delinquents next door who were making that impossible….

      We learnt, in the end, the reason for this very high standard of interior finish. The two flats into which the house had been converted were not destined for poor tenants on the housing waiting list, but for high-level council staff whose bourgeois tastes were impeccable. Indeed, one of the first items of furniture to enter the ground-floor flat was a baby grand piano.

      Also: http://blogs.spectator.co.uk/coffeehouse/2015/07/why-i-was-right-to-vote-for-jeremy-corbyn/

      ‘Tories for Corbyn’ isn’t just a bit of fun. It’s an effective political weapon

      • Adam says:

        “It’s an effective political weapon”

        But one that could backfire. It’s astonishing that such a left-winger is picking up so much support, but the times they are a-changin’. Before the UK general election this year, there didn’t seem to be much to choose between the three main political parties (the Lib Dems are no longer one of the latter, of course), nor was there any outstanding politician among them. UKIP came second in many constituencies in England and Wales, showing a taste for change (even though UKIP is just a eurosceptic and neo-Thatcherite version of the Conservatives).

        Now the centrist and rather moderate Tory, Kenneth Clarke, is warning that Corbyn could indeed become Prime Minister, if we are complacent. After all, people are fed up with all the scandal swirling around the standard politicians, and the banking crisis is still remembered and the bankers not forgiven – and a prime Libor-fixer has just been sent down for 14 years (but of course, that means plenty of the other real culprits go free), just to keep the memories alive for us. Fast forward to the next general election, in 2020 (if we get that far), and you can be pretty sure another crash will have occurred by then. England has already seen riots in 2011. How many more will there be, and how severe will they be, come the next crash? And what sort of extremists will some of the electorate be willing to vote for? Who would you prefer as PM: Jeremy Corbyn or David Icke? 🙂

        • xabier says:

          The last London ‘riots’ were not political or motivated by economic problems by any means, just the usual inner city trash seizing an opportunity, who in any case live by opportunist petty theft and drug dealing: they were, if anything, the ‘Shoplifting Riots.’

          The Left, disgracefully, in love as usual with the idea of revolution, misrepresented them as a ‘protest by alienated youth’, too ridiculous for words to anyone who knows London and the class of people involved.

          Bad weather will invariably forestall any serious rioting in the Britain. These sort of people prefer to be indoors and watching TV, and don’t generally get up before noon: a little rain or cold will always put them off. Even my village has a little contingent of them, bred on welfare, true knuckledraggers, no good either to themselves or others.

          • Adam says:

            > The last London ‘riots’ were not political or motivated by economic problems

            I wouldn’t be so sure. Look at how young people have protested against having to pay their own tuition fees:

            http://www.theguardian.com/education/2010/nov/10/student-protest-fees-violent

            and how the Lib Dems lost massive support after reneging on their promise to reverse that policy. Youngsters see politicians, bankers, etc., at the trough, and it irks them. Remember when earlier protesters in London tried to trash the car that Charles and Camilla were travelling in? The gap between rich and poor is getting bigger, and young people notice this. Hence their interest in Jeremy Corbyn and his left-wing ideology.

        • Steve says:

          I suppose at least UKIP had a better energy policy then the others. They understand that intermittent high-cost renewable energy is pointless and wanted to invest in nuclear and other more well known technologies.

          We’ll probably find out shortly just how useless wind energy is in the UK as more of our fossil fuel plants and nuclear plants are shut down. There could even be blackouts within a very short time – one of the schemes that the Government has come up with is to pay large energy users (manufacturing companies) to disconnect from the grid when peak energy demand occurs. It’s just lunacy.

  38. Fast Eddy says:

    The U.S. military agrees that the chance of a break down in the system is real:

    A new report from the U.S. Army War College [here is the report] discusses the use of American troops to quell civil unrest brought about by a worsening economic crisis.

    The report from the War College’s Strategic Studies Institute warns that the U.S. military must prepare for a “violent, strategic dislocation inside the United States” that could be provoked by “unforeseen economic collapse” or “loss of functioning political and legal order.” [The report also warns of a possible “rapid dissolution of public order in all or significant parts of the US.”]

    http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=890

    • This report is actually from 2008. There were other studies from the 2005 to 2008 period as well.

      I was invited to visit the US Naval War College in Rhode Island in 2009, to discuss how the impacts of “peak oil” might affect naval operations. The navy wanted to put together “War Games” for the students to respond to, with respect to real threats. There were also experts present on climate change and over-fishing.

    • OK. Lets say the global markets are saturated for now, so what.
      It will take few years, perhaps a decade of no growth world to stabilize at the bottom. Derivatives and other possible systemic risk exposure would be papered over by the banksters as always, frozen levitation of stock markets or “sensible” 20-30% drop as the maximum allowed visible problem. Sorry, given the preponderence of the evidence 2020-2030 is perhaps the more likely event horizon for real BAU twilight, meaning the core systemic countries starting to tailspin.

      • Fast Eddy says:

        Disagree.

        Dramatically low prices — as we are seeing — with no chance of recovery (China is sinking…) means bankruptcies… which mean massive layoffs … which leads to more layoffs (not just in the commodity industries — laid off people don’t take trips — don’t buy cars … don’t shop much at all) … and a deflationary death spiral.

        Stagnation at low prices is not an option.

        Grow – or die. That is an immutable law.

        • Bankruptcies, seriously when and where though?
          Not so fast Eddy, they have been papering this over so far!
          Look at this data about made up statistics by LTO companies, this will take years to reveal if “ever”: http://fractionalflow.com/2015/08/03/are-the-light-tight-oil-lto-companies-trying-to-outsmart-mother-nature-with-their-financial-balance-sheets/

          • Fast Eddy says:

            They have indeed papered over the world…

            But China has been the sole driver of growth — the rest of the world — particularly the commodity exporters — have been riding the coat tails of China…

            But it appears that China has reached the end of the road in terms of being the global driver — you can only build so many ghost towns before you run into problems….

            There does not seem to be any other country that can take the baton…

            So now we are seeing declining profits from a wide range of companies — we are seeing commodity prices collapsing … and layoffs starting…

            This is something you cannot paper over — it is just too wide spread…

            Unless demand can be pushed higher through more stimulus then there must be bankruptcies…

            • MM says:

              The governments can give away 20.000 USD for every home to build solar panels on the roof. That will create the desired inflation, we will be back on track

            • Fast Eddy says:

              I have a far better idea — we should build subways linking Shanghai to London and New York — hire 50 million workers to dig the holes with spoons and pay them $25 per hour

              That would create full employment for many years

              Problem solved?

            • Terrible idea. Not that many people can dig in a tunnel at once. I think building sea walls to keep back 10 feet of ocean rise would be a better use of 50 million workers.

            • interguru says:

              I just went to a “Solar Party” in my neighborhood, where Elon Musk’s company Solar City offered to put an array on your house with no money from you. They get paid by charging you 80% of the value of the solar power. There are already 2 arrays within a 30 second walk of my house. Musk is not a fake, is a co-founder of Pay Pal and now owns Tesla car company and Space X.

            • kesar0 says:

              I really don’t get this Elon Musk hype. His X Space rocket just exploded few weeks ago and Tesla published another earnings report with net loss. In 2014 Tesla lost $294 million on $3.2 billion in revenue. So where is the genius? This guy lives in techno-utopia land. Good luck.

            • interguru says:

              The panels are real. I can stand outside my house and see two of them, installed. Musk is financing them with bonds issued by Goldman Sachs. If the panels do not pan out financially, some one else will take the fall.

            • Fast Eddy says:

              Which are financed by free money hot off the printing presses of the Fed….

              Just another example of how the entire economy is sitting on a base of vapour…. what cannot continue — will stop.

            • More debt for the US can help temporarily fix China’s problems. I am not sure that it will do too much for the long run. Many homes don’t have suitable surfaces for attaching solar panels. Even if they did, it would create disruption to the electric power system. This is Euan Mearns chart regarding installed wind/solar capacity vs electric rates.
              Euan Mearns installed wind and solar vs price

            • There is still Vietnam, Indonesia, and the big whammy – India which might be actually be more populous than China.

          • The LTO companies have been publishing fake financials for years, based on a very optimistic “model” of how production will continue at a high rate in the future. Somehow, the companies will make money in the late years, to make up for all of the losses in the early years. As I understand it, the published financials continue to reflect the funny numbers.

            I am not sure it will take years to review. One article talked about the ratio of expenditure to revenue being 4.15 in the first quarter of 2015. http://www.bloomberg.com/news/articles/2015-06-18/next-threat-to-u-s-shale-rising-interest-payments That kind of outflow is hard to hide.

    • In many ways, the drop of coal prices is as big a problem as the drop in oil prices. The world economy depends on fossil fuels, and oil and coal are the “big two”.

  39. Fast Eddy says:

    Factory activity in the world’s second largest economy, China, shrank the most in two years in July as new orders fell more than expected.

    The private Caixin/Markit manufacturing purchasing managers’ index (PMI) dropped to 47.8 in July from 49.4 in the previous month.

    It is worse than a preliminary reading of 48.2 and is the fifth consecutive month of contraction in the sector.

    A figure below 50 shows contraction in the sector and one above means growth.

    http://www.bbc.com/news/business-33754851

    More downward pressure on commodity prices….

    • Thanks! I see too that the reading for factory production was even worse: 47.1. How can commodity prices rebound in such conditions? How can debt be repaid?

  40. Fast Eddy says:

    “We old folks have enjoyed our lives and now we want to shut theirs down”

    There are some here who cannot wait for the collapse to come …… not me.

    I have no desire to shut anything down — unfortunately most of my best years remain ahead of me….

    But it does not matter what anyone wants or does not want.

    What is going to happen is going to happen.

    Unfortunately.

  41. Fast Eddy says:

    Amazing how a massive delusional world (Koombaya) has been built on a foundation of vapour

    http://www.nzherald.co.nz/element-magazine/news/article.cfm?c_id=1503340&objectid=11489307

    How people can utterly ignore the reality that the world as we know it is built on cheap to extract resources — particularly oil…. that there is nothing that can replace it….

    Incredible how hundreds of billions if not trillions are spent on pursuing more vapour….

    There is also a profound ignorance of economics evident as well…

    “it’s not just about what we replace, but also what we take out, such as removing the need for the car in the first place”

    This implies we could just wipe out the entire auto industry …. and while we are at it why stop at autos — commercial aircraft should discouraged as well… and anything else that contributes to global warming…

    What I am wondering — is do these highly educated scientific minds actually believe this bullshit — or are they co-opted in to whisper comforting words to calm the sheeple as they are loaded into the truck headed for the slaughter house….

    Kind of how like Daniel Yergin and Paul Krugman are designated as ‘experts’ and asked to write books and give talks on how we have everything under control…..

    • It is amazing what nonsense is published over and over by what would seem to be respectable publishers.

      Of course, when Springer wanted me to write a book, they made it clear that they wanted a very neutral sounding title, and nothing suggesting anything other than a happily ever after ending. With those guidelines, even authors who understand the problem are limited in what they can say.

      • thats so true—on the first page of my book I state that the book offers no get outs or solutions
        yet a critic wrote a very annoyed review on Amazon, complaining that I had offered no solutions to the mess we’re in.

        • Greg says:

          It is odd that some folks see the world as having problems (for humans) that (presumably) have solutions. There are some things that simply are not problems; These are better known as cycles, predicaments or conundrums that are mistaken for problems. Finding “solutions” to our predicament It is akin to: “How do you solve plate tectonics?” Or any a number of “problems”: How do you solve volcanic eruptions? (Dinosaurs pondering) How do we solve the end of the Jurassic period? Earth to Humans: it isn’t a problem to be solved – it is like trying to stop time itself. It is impossible.

          • Fast Eddy says:

            But … we put a man on the moon!

            We can do ANYTHING if we put our minds to it!

            We are the great homo sapien!!!

            (such people tend to forget that the list of things we cannot do is endless e.g. we cannot grow vegetables in snow…)

            • Michael Jones says:

              Should be a piece of cake for you being gifted with a 140 plus I. Q., apply your talents

          • You are right. Unfortunately, most humans cannot imagine that we are up against this predicament.

  42. Fast Eddy says:

    Step right up folks… don’t be shy….

    Fast Eddy will give you a look at the future….

    https://www.youtube.com/watch?v=eH_8AwIBnuo

    • Michael Jones says:

      Thank God I have a little house on the prairie

    • For some mistaken reason I thought Venezuela meassured by its fossil reserves is the most affluent country on the planet for ever? /sarcasm off

    • Steve says:

      Regarding Venezuela, it just shows that the amount of energy reserves a country CLAIMS to have does not correspond to how well that country manages especially when you consider that that countries EROI for their oil is not good enough to sustain their social programs. It’s also got much worse since the decline in the oil price – this just illustrates Gail’s point.

      The more countries that get into difficulty the worse the energy supply situation will become. Think about what a regional war would do in the Middle East which involved Saudi Arabia – that’s why the rebels in Yemen won’t be allowed to succeed.

      Venezuela – with oil reserves larger then Saudi Arabia (allegedly but isn’t this mostly inaccessible oil sands/shale oil that can’t support the global economy at current prices) but people can’t even buy toilet paper to wipe their backsides!

      • Venezuela is not an EROI problem; it is an affordability problem. I’m confident that if the world would just buy their oil for $200 per barrel, Venezuela would be doing just fine.

        The problem with Statism, is that you always need more revenues to pay for more government programs. The State is like an economy within the economy, that also needs perpetual growth in a finite world – particularly a socialist state that continuously promises more and more stuff to try to keep the people docile.

        • If it is possible to measure EROI correctly (and I am not sure it really is) then in my view affordability problems are essentially the same as EROI problems. A high EROI energy product will be very cheap to sell. It will allow many people to have jobs, directly and indirectly, and these jobs will pay well. The government will be able to tax the extraction of a high EROI energy product at a high level, allowing it to build roads and provide many government services.

          At least half of the problem with EROI is that it is not possible to calculate it consistently from energy product to energy product, because much wider “boundaries” are needed than it is convenient to calculate. Also, there is a difference between “model EROI” and “cash flow EROI,” but few people make the distinction. The economy works on a cash flow basis; too many EROI calculations are on a “model” basis–sort of like the models that say Bakken oil will be profitable in 40 years.

          The oil in Venezuela is in some ways similar to oil from the Oil Sands. Its extraction is not profitable now either. Governments depend heavily on oil company revenue for tax revenue. (An “energy surplus” allows governments to charge high taxes.)

          If someone tells you that an energy product has a high EROI but it needs a subsidy, shake your head in disbelief.

    • Greg says:

      Very disturbing videos. Seems to counter the argument that Humans are social creatures that cooperate in times of scarcity. I guess the caveat to that is: “unless there are too many Humans then it is every man for himself.”

      • Fast Eddy likes to point to Venezuela and Greece as examples of how bad things are, and suggests they will be much worse once BAU truly collapses. I’m not so sure; with a partial collapse, you still have police and government, so if you kill thieves, you will still be executed. Once there is a full collapse, it may be easier to deter or diminish threats to your person and property.

        • Fast Eddy says:

          So why did we ever bother to have police forces?

          • “So why did we ever bother to have police forces?”

            I think they must be an artifact of cities, where everyone wants to hand off their responsibilities to someone else who gets paid to do it. Same as using professional firefighters instead of volunteers.

            Feudalism (Monarchy) gave way to electing a county sheriff (representative democracy) gave way to hiring professional police, fire, etc services (technocracy). Cities are all about specialization; no one (except the poor and maybe some idle rich) have the time to do general labour and practice a wide range of skills.

            Back to the feudalism we go, at least in the country, I suspect. Or Tribalism. Or Theocratic Orders.

            • Fast Eddy says:

              Wow – Koombaya is dripping out of the cracks here today — wave upon wave of it seeping in …

              You don’t think police forces have something to do about keeping people like this from tearing your throat out — raping your wife — and taking everything you own?

              https://lh5.googleusercontent.com/_nVSrF0LLSCk/S9SFHD1wlCI/AAAAAAAACfY/b8joTCUaV8I/s800/ab-1.jpg

              You conveniently neglect to explain why we need armies … I suppose that’s all about the military industrial complex getting paid…

              And nothing to do with the fact that not having an army or at least being on the side of another country that has a powerful army (kissing the ring) results in your country being invaded and pillaged…

            • “You don’t think police forces have something to do about keeping people like this from tearing your throat out — raping your wife — and taking everything you own?”

              If there were no police, everyone would open carry, all the time. Instead of the criminal justice system, guys like that trying anything will get shot or lynched by a mob. The world with guns is very different from the world before guns.

              “Be not afraid of any man,
              No matter what his size;
              When danger threatens,
              Call on me, and I will equalize” – Colt.

              Being bigger and stronger just makes you a bigger target.

              “And nothing to do with the fact that not having an army or at least being on the side of another country that has a powerful army (kissing the ring) results in your country being invaded and pillaged…”

              Yes, Switzerland gets invaded every 5 years and all the gold stolen. You can have a militia. nuclear deterrence is a pretty sound and effective strategy. Who exactly do you think is going to be getting their army together and invading who, when BAU collapses? Without oil? Without food to feed their own troops?

            • Fast Eddy says:

              “If there were no police, everyone would open carry, all the time. Instead of the criminal justice system, guys like that trying anything will get shot or lynched by a mob. The world with guns is very different from the world before guns.”

              Kinda like the wild wild west….

            • “Kinda like the wild wild west….”

              The Wild West is played up to be worse than it really was. More people were probably killed just in NYC during the same period. Hollywood tends to favour and promote big government to protect people.

              Around 19,000 whites and ~45,000 Indians in the Indian Wars:
              https://en.wikipedia.org/wiki/American_Indian_Wars

              As for homicide between Americans, the rate was close to 1 per 100,000 per year; about one-sixth the current homicide rate in New York City:
              http://libertarianstandard.com/2010/04/07/how-wild-was-the-wild-west-in-fact/

            • Fast Eddy says:

              This is ridiculous.

              Do you honestly think that a situation where there was no police force in your city would turn out well?

              Do you really want to be sitting on your cans of beans with a shotgun? Do you want to be walking down the street and looking around every corner or behind your back for someone ready to stick a knife in you and rob you – with absolutely no recourse other than hoping you pull out your six shooter first?

              Detroit still has police and jails…. imagine what would happen if the police force was completely disbanded…

              Chicago Police Will No Longer Respond to Burglaries or Robberies

              If your car has been stolen or your home has been broken into, don’t bother dialing 911. The Chicago Police Department has better things to do than to troop down to your home, look over the damage and tell you there’s no way you’re getting any of it back.

              http://www.frontpagemag.com/point/176479/chicago-police-will-no-longer-respond-burglaries-daniel-greenfield

              Now imagine what would happen if the criminal elements understood the police were gone — that there was no longer any punishment for crime — a 5 year old could be made to understand that this would turn into total mayhem

              But not the Koombaya Krowd — we’d all just get along — if someone stepped out of line you just say ‘hey man — chill out — let’s share some whole grain bread and peanut butter and talk about your angst’

              And you’d get a bullet in the head and your bread and peanut butter would disappear.

            • “Do you really want to be sitting on your cans of beans with a shotgun? ”

              Are you proposing that it will be possible to maintain police, law and order with a sudden collapse of BAU? If not, do you plan on “opting out” as soon as the grid goes down? It is not about want, it is about what is going to happen, someday sooner or later.

            • Fast Eddy says:

              I think I have been pretty clear on this — there will be no police or military when BAU collapses — it will be chaos… there will be epic levels of violence… looting … murder mayhem…

            • I don’t even understand what you are trying to argue here. Prior to collapse, each person must decide whether to have weapons to defend themselves, their family and property, or not. History has shown that being armed is better than not being armed.

              If you are armed, you can then make a second choice, to join a gang (or gang-like organization) or not. The purpose of a gang is to provide protection through deterrence, by retribution. If someone harms you, the gang must avenge you. If they do not, there is no value in being in that gang, so the gang will fall apart.

              There is no guarantees, other than the inevitability of death. All you can do is make choices to attempt to delay your death as long as possible. Same as it ever was.

          • Bailiffs, Sheriffs and Polices are to keep the King’s Palace safe from the mob and to maintain the lord’s safety from the serfs, not to keep justice.

        • xabier says:

          See Argentina: partial collapse, in which huge sectors get thrown into poverty, forever, still leaves you with police alright – very corrupt ones, who get involved in kidnappings to raise cash and make up for low or unpaid wages, take bribes from the criminals, and abuse their powers.

          Also, the hiring of criminals, and early release from prison, to act as Party enforcers for the corrupt, probably populist ‘Left-wing’ politicians who rise to power in the crisis.

          If you are a regular citizen, you may well end up in jail for (legitimately) shooting someone in self-defence, or have to pay them compensation. The crooks have a lovely time.

          A state which is still just hanging together, – with police, army, judges and our old friends professional politicians,all in place, and ammoral and on the take, – is perhaps the most nightmarish of all.

          Highly recommend the study of Mexico, Argentina and the Balkans for human depravity in states which are not classified officially as ‘failed’ but in which no sane human being would wish to live.

          • Fast Eddy says:

            Good points — the Philippines is another example of this — I am told by friends there that kidnappings (always a danger) have increased considerably in the last couple of years…

            Most of them don’t get reported because frequently the police are in cahoots with the kidnappers (or are actually behind the kidnappings).

            Most people who are even moderately wealthy have body guards.

            When there is not ‘enough’ i.e. poverty — you get desperation….

      • Fast Eddy says:

        See what happened historically before aid agencies existed and airlifts of emergency supplies were not possible:

        http://www.toptenz.net/top-10-historic-famines-caused-cannibalism.php

        Then consider — the famine that is coming will be global involving 7.3 billion people — and pretty much no food will be available – no airlifts — no aid agencies.

        It is hard to imagine what will happen when the grocery stores close – for good.

        But let’s try — what would you do when the pantry was bare?

        I reckon people would start to beg off of others who might have stores remaining — when denied I would expect many would turn to violent means to obtain these stores.

        I could see people killing domestic pets and eating them.

        People outside of cities would kill cows, pigs, wild animals — pretty much everything that moves — there are plenty of guns and ammo out there….

        They’d most definitely take to raiding gardens — assuming the collapse hits when the crops are ready….

        But then what…. history says people eat people when they are truly desperate.

        If there is any dancing about the campfire singing Koombaya it will be while waiting for dinner to be served:

        http://comps.canstockphoto.com/can-stock-photo_csp24838431.jpg

  43. Don Stewart says:

    Dear Gail and Finite Worlders
    In my 75 years, I have seen some confused situations, and a few times when things seemed to be converging. Convergence: Nixon saying ‘we are all Keynesians now’.

    Confusion:
    A post by shortonoil:
    Oil groups shelve $200bn in new projects as second oil-price slump hits. Wood Mackenzie reports 46 big oil and gas projects deferred. Only a handful of major projects fully approved.
    http://www.jeremyleggett.net/
    As we have been saying at present prices oil companies are no longer generating enough revenue to replace reserves that they are extracting. By the early 2020’s the wells that are now producing will stop pumping. World commerce will shudder to a halt.
    Once Central Banks run out of liquid assets to attach they will fail, and the creation of new currency will stop. New monetary systems will then need to be put into place. Store shelves will stripped bare in the process.

    If you click through to the jeremy leggett link, you will find that it is bubbling over with good news about renewables. Some big corporations are at the White House making pledges for renewables, etc. To Jeremy Leggett, the cancellation of 200 bn in new projects is wonderful news. To shortonoil, it signifies the beginning of the end…but not an unanticipated piece of bad news, as he will remind you.

    Somewhere between ‘morning in America with renewables for everyone’ and ‘stripped bare store shelves’, I suppose we will find the truth. (I have to remind myself to make an effort to stick around long enough to see how this comedy ends.)

    Don Stewart

    • The financial system will likely collapse early on, before the time implied by your statement,”By the early 2020’s the wells that are now producing will stop pumping. World commerce will shudder to a halt.” So the answer may not come between the two; it may come before the shortonoil view.

      The renewables view is just plain wrong.

      Sticking around until the end may not be all that difficult.

      • Fast Eddy says:

        “Sticking around until the end may not be all that difficult.”

        If deflation is indeed the trigger — then based on the numbers we are seeing across the board for commodities — we surely must be very close to the edge.

        • Now, the question remains, what can TPTB get out of the fortcomming depression for their own advantage. Basically, the 99% are plain hostages in many respects, like poor farm animals now dependent on food, jobs, security, health provided by the system exclusively.. Obviously, TPTB are aware of it, depressionary collapse would be a great opportunity to fix some old problems like disenting voices, remaining nominal freedoms etc.

          This is related to degree of control, according to latest polls the European public is now in panic mode about the recent incoming immigration wave, above traditional concerns of jobs security/umeployment, democracy etc., according to the polls. Interestingly enough, it’s one giant mess pulling and putting some EU member states against the others at the moment. For example, the great idiot under the title of german president Gauck is now preaching all over the msm outlets it is the duty and order of the day to accept ALL refugees, that’s nuts. While few miles away in Austria a Hungary they are now longer able to hold the line under the hundred thousands y/y swell of incoming refugees. Meanwhile the “frontline” state Italy is rejecting material and personal help to secure the borders, which has been put forward by the Central European partners..

          This is not incompetence friends, this is higher level play, how to utilize this chaos into some sort of new version of future based on someones liking. So, I’m very sceptical about Gail’s idea of organic economic reset before 2020s, I guess if it happens it will be only a reset into preset framework, how to keep the power for next 2-4decades before the PO true systemic reset effects take over for good, simply before it gets ungovernable it todays metrics of understanding.

          • Fast Eddy says:

            I disagree.

            I’ve said it before — why would you insert an atomic bomb into the system in your attempt to keep it from blowing up?

            The polices they are putting in play are absurd — unprecedented — suicidal —- there is no way the decision makers would make such decisions unless they were frightened — and desperate.

            • Sorry, I guess you tend to underpreciate the sheer level of greed madness in the uper echelons of the power pyramid. They had no problems to prop up “uncle Adolf” when they were carving the old world/resources pie after WWI.

              Similarly and from another angle, the elites of former Soviet union and sats (Romania, Hungary, Poland to name a few) were taking huge piles of usd denominated debt infusions in the late 1970/80s knowing very well about the strings attached, i.e. the future collapse aka reset into again more favourable situation just for them (the inner circle elites), and screw everybody else under them..

              It’s the essential human greed, the greatest power of them all, which powers this sick system, and there are no boundaries for it, except only for some of the hard physical world, which come only very late.

            • Fast Eddy says:

              World — slight difference — all the cheap energy that is going to be found has been found — and most of it has been burned up…. we are talking the end of civilization here… a likely extinction event

              Someone posted this the other day http://www.resilience.org/stories/2005-03-06/dependence-phantom-carrying-capacity#

              It explains how we have exceeded the carrying capacity of the earth many many times over…

              I would argue that it does not go far enough — because they fail to acknowledge that we have contaminated virtually all of the agricultural land with petrochemicals — nothing will grow on this land without years of organic inputs.

              I think 98% of the earth’s cropland is farmed industrially — so the carrying capacity of the earth is at best 2% of 7.3 billion.

              Of course the 2% of ag land that is farmed organically will quickly be overrun by billions of hungry people… they will also kill and eat every single animal on the planet …..so the carrying capacity of the earth at this moment is effectively a big fat ZERO.

              Of course there is also that elephant that if acknowledged moots all discussions because it is the Mother of All Apocalypses — the spent fuel ponds which will explode … which will hurl massive amounts of toxins into the air and oceans for decades…. which will exterminate everything on the planet….

              The PTB know all of this — I very much doubt they are much concerned about gaining more wealth and power — the Owners of the Fed are not concerned about that — they already own all of the wealth and have all of the power….

              They are concerned about keeping the hamster running as long as possible — because when he stops running — we die – and they die.

            • Greg says:

              Or psychopaths who want to see a nuclear holocaust just to put a check-mark in that box.

          • At some point, the idea of accepting all refugees clearly becomes impossible. Extreme parties are likely to take over, or a financial collapse occurs.

        • Greg says:

          I think deflation is almost certainly the trigger. I think I recall Bernanke stating that he would do anything to avoid a deflationary death spiral. So, that is what one need to watch out for very carefully. The danger comes when the plunge cannot be arrested. And, it seems we are getting perilously close to that point right now.

      • Rodster says:

        “The renewables view is just plain wrong.”

        I don’t see renewables saving the day. The time for that was 30 maybe 40 years ago. The global system is in such a terminal phase that when it collapses everything comes to a halt and chaos ensues. There needs to be a functioning government and system in place to provide for renewables to happen. As a reminder, Hank Paulson said in 2008 that if the Fed had not acted there would have been a global financial meltdown and there would have been tanks in the streets enforcing Marshal Law. In 2015 everything is much worse.

        • edpell says:

          Jimmy Carter was right.

          • Greg says:

            I think it was possible to extend the party longer (to 2040 perhaps?) if more attention was paid to being less wasteful. And, we would have started this 40 years ago. However, we would not have had the some of the “advances” we enjoy today either. Seems everything in life is a trade-off. That human nature thing called greed I think.

  44. Rodster says:

    Not good, ouch !

    “Container Freight Rates From Asia To Europe Crash 23% In One Week”
    http://www.zerohedge.com/news/2015-08-02/something-just-snapped-container-freight-rates-asia-europe-crash-23-one-week

    • Thanks! That is another source for worry>

      • Greg says:

        Interesting “World Trade Volume” chart they have in the article showing an increasingly strong downward spikes. The last being a seneca cliff crash in 2008. If the trend continues, the next downward spike looks to be a doozy and not very many years away.

  45. Don Stewart says:

    Dear Gail and Finite Worlders
    This is a little tongue-in-cheek. See:
    http://www.drperlmutter.com/probiotic-intervention-affects-mood/?utm_source=newsletter&utm_medium=email&utm_campaign=probiotics_mood_blog8_1_2015&utm_source=DrPerlmutter.com+Newsletter&utm_campaign=5dca727a48-probiotics_mood_blog8_1_2015&utm_medium=email&utm_term=0_3e059546f6-5dca727a48-99233825&mc_cid=5dca727a48&mc_eid=8ab3313394

    By giving probiotics to normal patients, the Dutch were able to reduce depressive and aggressive moods. So…all those here who are loudly proclaiming that their anti-social activities can actually be blamed on their DNA…are just wrong. Those anti-social activities are more correctly blamed on bad gut bacteria?

    Don Stewart

    • Stilgar Wilcox says:

      I tried that probiotics stuff in a drink purchased at a grocery store and proceeded to get sick to my stomach. Went back to the usual diet and felt fine ever since. So not sure if the whole probiotics bit is just snake oil or if there is something to it for some people.

  46. Don Stewart says:

    Dear Gail and Finite Worlders

    Nicole Foss returns from obscurity to sound the alarm:
    http://www.theautomaticearth.com/2015/08/china-and-the-new-world-disorder/
    In a recent interview, Nicole observed that people briefly listened to her after the 2008/9 meltdown, but then stopped paying attention. It is significant that she now chooses to become visible again.
    Don Stewart

    Also, edpell might take note of this comment by Nicole:
    ‘Emerging markets and commodity companies are caught in a global economic downdraft, following on from their years of extraordinary boom and consequent over-investment. That misallocation of capital, compounded by the leverage involved, has created an enormous overhang of productive capacity. The sunk costs create an incentive to continue producing and generate at least some revenue, even as a supply glut is already causing prices to collapse. This is a toxic dynamic for a highly leveraged sector, leading to downward spiral of excess inventory and a pancaking debt pyramid’

    • I agree with Nicole on the comment you quote. Also, it is not just the sunk costs that create an incentive to produce; it is also the fact that these companies have debt payments and dividends to pay. They don’t have the option of just giving up on production which is unprofitable now. There is no easy scale back to a profitable level that can be made.

    • Michael Jones says:

      Excellent article. and highly recommended, thank you Don

  47. Don Stewart says:

    Dear Gail and Finite Worlders

    I was in the local bookstore and fell in love with a beautifully bound book. I also noticed that the author was Frank Wilczek, the Nobel winning physicist and author of another favorite book of mine, The Lightness of Being. Since I am basically weak, I bought the book and it has not disappointed. I think there are some deep lessons for those of us trying to read the tea leaves at this moment in history.

    The title of the book is A Beautiful Question.

    ‘Does the world embody beautiful ideas?’
    or, stated differently
    ‘Is the world a work of art?’

    Hundreds of dense pages later, Wilczek answers the questions:
    ‘Not all beautiful ideas about deep reality are true. Nor are all the truths of deep reality are beautiful,

    but the answer is a resounding Yes!.’

    Today, I will use some of Wilczek’s observations about Newton, to hopefully shed some light on our current situation.
    ‘The basic laws of Newton are dynamical laws…
    Dynamical laws invite us to expand our search for beauty. We should consider not only the world of what is, but also—and primarily—the much larger, imaginative world of what can happen. The world of Newtonian mechanics is a world of possibilities’

    Newton has a famous quote in which he claims to ignore hypotheses, and deal only with the provable. Yet the man generated tons of hypotheses, and wrote them down for us. Some have subsequently proven to be fruitful, and some have, thus far, been dead-ends.

    ‘He, of all people, was aware of how much he’d left on the table’. (with his insistence on ignoring hypotheses). Newton wrote:

    ‘For so far as we can know by natural Philosphy what is the first Cause, what Power he has over us, and what Benefits we received from him, so far our Duty toward him, as well as that toward one another, will appear to us by the Light of Nature.’

    Wilczek:
    ‘To some it may seem strange that the greatest hero of the Scientific Revolution would venture into these questions of theology and ethics. But Newton saw the world whole.’

    and:
    ‘Is it not unnatural to separate our understanding of the world into parts that we do not seek to reconcile?’

    I also refer you to George Mobus current blogpost.
    http://questioneverything.typepad.com/question_everything/2015/07/could-we-evolve-into-ants.html
    I suggest you particularly pay attention to the question of ‘what will become of complex system modeling if we no longer have computers?’

    Wilczek notes that Newton was driven out of Cambridge and the university world for two years by the plague. It was during those two years, on the family farm, that Newton was most productive.

    When computers go away, and the government which publishes GDP and related statistics every week, vanishes, then how will we hope to make models of Complex Adaptive Systems? Will we be as fortunate as Newton, driven back to the family farm, and becoming incredibly productive?

    I want to add one more ingredient to this stew. On page 73 Wilczek writes:
    ‘Many of the central ideas of modern fundamental physics are unfamiliar to most people. They can seem abstract and forbidding if they are introduced abruptly, in the strange contexts that are their natural habitat. For this reason, those of us who try to bring those ideas to a broad audience often work in metaphors and analogies. It’s challenging to find metaphors that are both faithful to the original ideas and readily accessible, and even more challenging to do that in a way that does justice to their beauty. I’ve struggled with that problem many times over the years. Here, I’m happy to present a solution that’s given me a real feeling of satisfaction.

    Projective geometry, that artistic innovation of the Renaissance, contains not merely metaphors, but genuine models in a gallery of big, cunning, and awesomely pregnant ideas.’

    I can’t do justice to the next page of text without quoting it, so let me just give you hints and urge you to look for yourself. The big ideas include:
    Relativity…the same subject can be represented in many different ways
    Symmetry…rotation of the object is a symmetry of its projective description. We can change the object, by rotating it, without changing its projective description.
    Invariance…Some features are common to all representations
    Complementarity…there can be many different views of your subject that are equally valid…but you must choose a particular one to describe it.

    I think these are some of the takeaways for Finite Worlders:
    *There is no single valid viewpoint from which to survey our situation
    *We might find that the disappearance of Industrial Society focuses our attention on the truly meaningful, as the Plague years focused Newton
    *It may be necessary for us to have our lives forcibly simplified in order to focus on deeper truths
    *Lots of people may die in the Plague

    Don Stewart

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