We all know generally how today’s economy works:
Figure 1
Our economy is a networked system. I have illustrated it as being similar to a child’s building toy. Ever-larger structures can be built by adding more businesses and consumers, and by using resources of various kinds to produce an increasing quantity of goods and services.
Figure 2. Dome constructed using Leonardo Sticks
There is no overall direction to the system, so the system is said to be “self-organizing.”
The economy operates within a finite world, so at some point, a problem of diminishing returns develops. In other words, it takes more and more effort (human labor and use of resources) to produce a given quantity of oil or food, or fresh water, or other desirable products. The problem of slowing economic growth is very closely related to the question: How can the limits we are reaching be expected to play out in a finite world? Many people imagine that we will “run out” of some necessary resource, such as oil, but I see the situation differently. Let me explain a few issues that may not be obvious.
1. Our economy is like a pump that works increasingly slowly over time, as diminishing returns and other adverse influences affect its operation. Eventually, it is likely to stop.
As nearly as I can tell, the way economic growth occurs (and stops taking place) is as summarized in Figure 3.
Figure 3. Overview of our economic predicament
As long as (a) energy and other resources are cheap, (b) debt is readily available, and (c) “overhead” in the form of payments for government services, business overhead, and interest payments on debt are low, the pump can continue working as normal. As various parts of the pump “gum up,” the economic growth pump slows down. It is likely to eventually stop, once it becomes too difficult to repay debt with interest with the meager level of economic growth achieved.
Commodity prices are also likely to drop too low. This happens because the wages of workers drop so low that they cannot afford to buy expensive products such as cars and new homes. Growing purchases of products such as these are a big part of what keep the economic pump operating.
Let me explain some of the pieces of the problem that give rise to the slowing economic growth pump, and the difficulties it encounters as it slows down.
2. “Promises,” such as government pension programs for the elderly, and promises to repair existing roads, tend to get bigger and bigger over time.
We can understand how promises tend to grow by looking at an example I constructed:
Figure 4
Suppose a pension program begins in 2010 and gradually adds more retirees. Or suppose a road repair program starts out in 2010 with more roads gradually being added.
The payments made each calendar year, whether for the pensions or the road repairs, are the totals at the bottom of the column. These totals keep growing, even if each retiree gets the same amount each year, and even if each road costs the same amount to repair each year. Admittedly, using 100 for all amounts is unrealistic–this is done to keep the math simple–but regardless of what numbers are used, the sum of the payments each calendar year tends to rise.
If we look at US government expenditures as a percentage of wages, the pattern is as we might expect: government spending rises significantly faster than wages.
Figure 5
3. At least partly because of growing “promises,” it is very difficult for an economy to shrink in size without collapsing.
We can think of many kinds of promises in addition to pensions and road repairs. One such promise is the promise by banks that they will allow depositors to withdraw funds held on deposit in the bank. Another kind of promise is the promise of debtors to repay debt with interest. All of these promises tend to grow in total quantity over time, at least in part because population grows.
If an economy shrinks, all of these promises become very difficult to fulfill. This is the problem that Greece and other countries in financial difficulty are encountering. There is a need to reduce some program or to sell something so that the calendar year payments are not too high, relative to revenue for the year. These payments really represent a flow of goods and services to the individuals to whom the promises were made. “Printing money” does not really substitute for goods and services: pensioners expect that they will be able to buy food, medicine and housing with their pensions; those withdrawing money from a bank expect that the money will actually buy goods and services needed to live on.
If there is a major problem with “making good” on promises, it is difficult to have an economy. It is hard to operate an economy without functioning bank accounts. Even cutting off pensions or road repairs becomes a problem.
4. The over-arching problem as we reach diminishing returns is that workers become less and less efficient at producing desired end products.
When an economy starts hitting diminishing returns, we find that the economy produces goods less and less efficiently. It takes more worker-hours and more resources of various kinds (for example, fracking sand and deep sea drilling equipment) to produce a barrel of oil, causing the cost of producing a barrel of oil to rise. Usually this trend is expressed as a rising cost of oil production:
Figure 6
Looked at a different way, the number of barrels of oil produced per worker starts decreasing (Figure 7). It is as if the worker is becoming less efficient. His wages should be reduced, based on his new lack of productivity.
Figure 7. Wages per worker in units of oil produced, corresponding to amounts shown in Figure 6.
There are many types of diminishing returns. They tend to lead to a smaller quantity of end product per worker. For example, if the population of a country increases, but arable land stays the same, adding more and more farmers to a plot of arable land eventually leads to less food produced on average per farmer. (Some might say that each additional farmer adds less marginal production.) Similarly, mining ores of lower and lower concentration leads to a need to separate more and more waste material from the desired mineral, leading to less mineral production per worker.
As another example, if a community finds itself short of fresh water, it may need to begin using desalination to produce water, instead of simply using relatively inexpensive wells. The result is a steep rise in the cost of water produced, not too different from the steep rise in the cost of oil in Figure 6. Viewed in terms of the amount of fresh water produced by each worker, the return per worker falls, as happens in Figure 7.
If workers get paid for their work, the logical result of diminishing returns is that after a point, workers should get paid less, because what they are producing as an end product is diminishing in quantity. Workers may be making more intermediate products (such as desalination plants or fracking sand), but these are not the end products people want (such as fresh water, electricity, or oil).
In some sense, fighting pollution leads to another form of diminishing returns with respect to human labor. In this case, increasing human effort and other resources are used to produce pollution control equipment and to produce workarounds, such as alternative higher-priced fuels. Again, wages per worker are expected to decline. This happens because, on average, each worker produces less of the desired end product, such as electricity.
Admittedly, less pollution, such as less smog, is desired as well. However, if it is necessary to pay extra for this service, the effect is recessionary because workers must cut back on purchasing discretionary goods and services in order to have sufficient funds available to purchase the higher-priced electricity. Thus, fighting pollution using approaches that raise the price of end products is part of what slows the world’s economic growth pump.
5. When civilizations collapsed in the past, a major cause was diminishing returns leading to declining wages for non-elite workers.
We know how diminishing returns played out in a number of past civilizations based on the analysis conducted by Peter Turchin and Surgey Nefedov for their book Secular Cycles. They found that typically a period of rapid population growth took place after some change occurred that increased the total amount of food an economy could provide. Perhaps trees were cut down on a large plot of land, or irrigation was introduced, or a war led to the availability of land previously farmed by others. When the original small population encountered the newly available arable land, rapid growth became possible for a while–very often, for well over 100 years.
At some point, the carrying capacity of the land was reached. Then the familiar problem of diminishing returns on human labor occurred: adding more farmers to the plot of land didn’t increase food production proportionately. Instead, the arable land needed to be subdivided into smaller plots to accommodate more farmers. Or the new farmers could only be “assistants,” without ownership of land, and received much lower wages, or went to work for the church, again at low wages. The net result was that at least part of the workers started receiving much lower wages.
One contributing factor to collapses was the fact that required tax levels tended to grow over time. Some reasons for this growth in tax levels are described in Items (2) and (3) above. Furthermore, the pressure of growing population meant that groups needed access to more arable land–a problem that might be overcome by a larger army. Paying for such an army would require higher taxes. Joseph Tainter in The Collapse of Complex Societies writes about the problem of “growing complexity,” with rising population. This, too, might give rise to the need for more government services.
Raising taxes became a problem when wages for much of the population were stagnating or falling because of diminishing returns. If taxes were raised too much, low-paid workers found themselves unable to buy enough food. In their weakened condition, they tended to succumb to epidemics. If taxes couldn’t be raised enough, governments had different problems, such as not being able to support a large enough army to fend off attacks by neighboring armies.
6. The United States now has a problem with declining wages of non-elite workers, not too different from the problem experienced by civilizations that collapsed in the past.
Figure 8 shows that on an inflation-adjusted basis, US Median Family Income has been falling in recent years. In fact, the latest value is between the 1996 and 1997 value. In a sense, this represents diminishing returns on human labor, just as has occurred with agricultural civilizations that collapsed.
Figure 8
Wages have been falling to a much greater extent among young people in the United States. Figure 9 from a report by Dettling and Hsu in the Federal Reserve Bank of St. Louis Review shows that median wages have dropped dramatically since 1989, both for young people living with parents and for young people living independently. To make matters worse, the report also indicates that the share of young people living with parents has risen during the same period.
Figure 9
In some sense, the loss of efficiency of the economy (or diminishing returns) outlined in Item 4 is making its way through to wages. The wages of young people are especially affected.
7. Demand for goods and services comes from what workers can afford. If their wages are low, demand for goods of many kinds, including commodities, is likely to fall.
There are many rich people in the world, but most of their wealth sits around in bank accounts, or in ownership of shares of stock, or in ownership of land, or in other kinds of investments. They use only a small share of their wealth to buy food, cars, and homes. Their wealth has relatively little impact on commodity prices. In contrast, the many non-elite workers in the world tend to spend a much larger share of their incomes on food, homes, and cars. When non-elite workers cut back on major purchases, it is likely to affect total purchases of goods like homes and cars. Other related goods, such as gasoline, home heating fuel, and the building of new roads, are likely to be affected as well.
When the demand for finished goods falls, the demand for the commodities to produce these finished goods falls. Because of these issues, when the wages of non-elite workers fall, we should expect downward pressure on commodity prices. Commodity prices may fall back to a more affordable range, after they have spent several years at higher levels, as has happened recently.
There is a common belief that as we approach limits, the price of oil and other commodities will spike. I doubt that this can happen for any extended period. Instead, the low wages of non-elite workers will tend to hold commodity prices down. Because of this issue, we should expect predominately low oil prices ahead, despite the continuing pressure of rising costs of production because of diminishing returns.
The mismatch between the rising cost of commodity production and continued low commodity prices is likely to lead to a sharp drop in the supply of many types of commodities. Thus, the slowing operation of our economic growth “pump” is likely to lead to a situation where the production of commodities, including oil, falls because of low prices, not high prices.
8. What is needed to raise the productivity of workers is a rising quantity of energy to leverage human labor. Such energy supplies are affordable only if the price of energy products is very low.
The amount a person can produce reflects a combination of his own labor and the resource he has to work with. If energy products are available, they act like energy slaves. With their assistance, humans can do things that they could not do otherwise–move goods long distances, quickly; operate machines (including computers) that can help a worker do tasks better and more quickly; and communicate long distance by means of the telephone or Internet. While technology plays a major role in making energy products useful, the ultimate benefit comes from the energy products themselves.
We have been using a rising amount of energy products since our hunter-gatherer days (Figure 10). In fact, the use of energy products seems to distinguish humans from other animals.
Figure 10
Clearly, cheaper is better when it comes to the affordability of energy products since available money goes further. If gasoline costs $5 per gallon, a worker with $100 can buy 20 gallons. If gasoline costs $2 per gallon, a worker with $100 can buy 50 gallons.
In recent years, with the high prices of energy products, world growth in energy consumption has lagged. It should not be surprising that world economic growth seems to be lagging during the same period.
Figure 11. Three year average growth rate in world energy consumption and in GDP. World energy consumption based on BP Review of World Energy, 2015 data; real GDP from USDA in 2010$.
In fact, Figure 11 seems to indicate that changes in energy consumption precede changes in world economic growth, strongly suggesting that growth in energy consumption is instrumental in raising economic growth. The recent steep drop in energy consumption suggests that the world is approaching another major recession, but this has not yet been recognized in international data.
9. One way of describing our current problem is by saying that the economy cannot live with the high commodity prices we have been experiencing in recent years and is resetting to a lower level that is affordable. This reset is related to low net energy production.
If oil and other commodities could be produced more cheaply, they would be more affordable. We would not have the economic problems we have today. Energy use in Figure 11 could be rising more quickly, and that would help GDP grow faster. If GDP were growing faster, we would have more funds available for many purposes, including funding government programs, repaying debt with interest, and paying the wages of non-elite workers. We perhaps would not have the problem of falling wages of non-elite workers.
The current “fad” for solving our energy problem is to mandate the use of intermittent renewables, such as wind and solar PV. A major problem with this approach is that such renewables make the cost of electricity production rise even faster, exacerbating our problems, instead of making them better.
Figure 12 by Euan Means. Installed capacity is in Watts (W) per capita.
To make matters worse:
- The way our economy works, energy flows in a given year (not on a net present value basis) are what are important, because this is the way we use energy to make goods such as foods, metals, and homes. The energy flows of renewables are very much front ended. Thus, the disparity in energy use on an energy flow basis is likely to be greater than reflected in Figure 12.
- What we really need from energy products is the ability to stimulate the economy in a way that adds tax revenue. Either the energy products must produce high tax revenue directly, or they must indirectly produce high tax revenue by stimulating demand for new cheaper goods, produced with the new inexpensive form of energy. This is what I think of as “adding net energy”. Wind and solar PV clearly do the opposite. Thus, they behave like “energy sinks,” rather than as products that add net energy.
- Modern renewables that are connected to the grid can be expected to stop working when the grid stops working. This may not be too far in the future because we need oil to operate the trucks and helicopters that maintain the electric grid. If this problem were considered in the pricing of electricity from wind and solar PV, their required prices would be higher.
As I see it, one of the major roles of energy products is to support the growing overhead of our economy; this is what the discussion about the need for “net energy” is about. Thus, we need energy products that are cheap enough that they can be taxed heavily now, and still produce an adequate profit for those producing the energy products. If we find ourselves mostly with energy products that are producing cash flow losses for their producers, as seems to be the case today, this is an indication that we have a problem. We don’t have enough “net energy” to run our current economy.
10. Debt and other paper assets are likely to “have a problem” as the economic growth pump falters and stops.
Debt is absolutely essential to making an economy work because it allows businesses to “bring forward” future profits, so that they don’t have to accumulate a high level of savings prior to building a new factory or opening a new mine. Debt also allows potential buyers of expensive products such as homes, cars, and factories to pay for them on an affordable monthly payment plan. Because more buyers can afford finished goods with the use of debt, debt raises the demand for goods, and indirectly raises the prices of commodities. With these higher prices, a greater quantity of commodity extraction is encouraged.
At some point, it becomes very difficult to support the very large amount of debt outstanding. In part, this happens because of the large accumulated amount of debt. Falling inflation-adjusted wages of rank and file workers add to the problem. In such a situation, interest rates need to be kept very low, or it becomes impossible to repay debt with interest. Even with continued low rates, defaults can eventually be expected.
Once debt defaults begin, commodity prices are likely to drop even further. Such a drop is likely to lead to even more loan defaults, especially by commodity producers (such as oil companies) and commodity exporters. Prices of equities can be expected to drop as well, because the problems of the debt system will affect businesses of all kinds.
Once debtors start defaulting, it will become very difficult to keep financial institutions from collapsing. International trade is likely to become a problem because financial institutions are needed to provide debt-based financial guarantees for long-distance transactions.
Other Information on this Subject
I have written previously and talked about some of the issues raised in this post.
An academic article I wrote that is directly related is Oil Supply Limits and the Continuing Financial Crisis. It was published in the journal Energy in 2012. Scopus shows 30 articles citing this paper.
A series of talks and videos that I conducted in China are now available on this website. These are some links to my presentations:
1. Overview of Energy Modeling Problem
3 Overview of a Networked Economy
4 Economic Growth – Diminishing Returns
6. Competition and Resource Exhaustion
7. Twelve Principles of Energy and the Economy
Videos of these presentations are also available on my Presentations/Podcasts page.
Here’s my simple-minded observation: dub & Brent are low & upper forties, this morning (http://oil-price.net/).
Did Gail T. or FE conspire to make this happen?
Yes
We’re just pushing buttons and pulling strings here… nothing more 🙂
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How freaked out can the People’s Bank of China be about the Chinese economy that has been growing admirably at 7% this year, according to the government?
OK, there are some quibblers who might point out that car sales in July have plunged 6.6% to a 17-month low, after having already shrunk in June, and after having trended down all year, in the largest auto market in the world with the largest auto manufacturing capacity in the world that had been growing in leaps and bounds and had pushed job creation, investment, and GDP to new heights.
US automakers have bet the farm on China. This is where growth would come from. But in July, Ford sales through its joint ventures dropped 6% year-over-year, the third monthly decline in a row, and GM’s sales through its joint ventures dropped 4%. A vicious price war has broken out. In a market that has gotten used to seeing double-digit growth!
And granted, exports and imports plunged too, and producer prices plunged, and the totally crucial property sector is wobbly, and manufacturing plants get shut down as overcapacity is running rampant, and all kinds of other things plunged or stagnated or wobbled, and now the PBOC is truly freaking out.
Tuesday morning it had devalued the yuan by lowering the daily reference rate by a record 1.9% against the dollar. The spokesman called it a “one-time correction.”
The yuan – after moving no more than 0.01% against the dollar in the prior weeks and trading in Shanghai between 6.2096 and 6.2097 against the dollar for days – instantly plunged, and ended the day at 6.3248.
It shook up the markets, pushed down metals, oil, other commodities, and emerging market currencies. The Nikkei plunged until the Bank of Japan’s muscled intervention put a floor under it. As part of its well-communicated QQE policies, the BOJ buys equity ETFs when stocks start dropping. Hedge funds expect it and start buying with the BOJ. It works like a charm. And then in the US, stocks swooned too.
That was Tuesday. It was a “one-time correction,” as the PBOC said, so the markets would adjust and get over it and move on to the next topic. Surely they’d find something to be enthusiastic about.
That theory fell apart Wednesday morning in China, just as everyone was getting ready to settle in, when the PBOC devalued the yuan again, this time by 1.6%, the second biggest cut in two decades after yesterday’s record. As I’m writing this, the yuan is down to 6.437 against the dollar in Shanghai trading.
That’s a 3.4% devaluation in two days!
And markets are having conniptions. Copper just dropped 1.8% in one breath to a new multiyear low of $2.294 per pound. Oil, which was up in the hours ahead of the announcement, dropped too, with WTI plunging nearly $1 after the announcement to a multi-year low of $42.89 a barrel.
More http://wolfstreet.com/2015/08/12/after-one-time-correction-freaked-out-peoples-bank-of-china-pboc-devalues-yuan-second-time-mayhem-breaks-out-currency-war/
Bang bang BANG!!! …. the deflationary drums are getting louder….
http://psuvanguard.com/wp-content/uploads/2012/06/DramaDanceDrums01_CS1.jpg
I like the deflationary drums – it adds something.
Drums are always a nice touch, especially when they’re all native-ey.
Yes, the situation is very frightening. The China folks want me to come back next year; it will depend on how things are going.
they’ll blame you for that’s happened to them—and hold you hostage till you fix it
It’s not a question of good or bad, right or wrong. I mean, we’ve moved away from that a long time ago. I don’t want to say that, but that’s the logical conclusion one must draw from the fact of billions of people worldwide rapidly using up all of the resources. We are way past good or bad. That’s what the moralists (of both right-wing, religious variety, and left-wing, kumbaya variety, don’t understand).
It’s a question of…what do you do if you know this ship is going down? For many out there the answer they have come to is this: let’s make a ton of money and have orgies. That’s their answer. I may not like them, but I also understand they are basically responding to the same knowledge, even if in a crude manner.
For others the answer is, let’s prepare and focus on local community and sustainability. For others their answer is, let’s defend the nation/empire with whatever means we have.
Fine, we all have our answers. But this whole thing is going to collapse, folks. Guaranteed. That’s the one thing I know for sure, that I am willing to stake my entire life on. The rest, the details, I don’t know, and I’m not willing to make judgments on what people do. But I absolutely am going to work in my self-interest, maybe help a few people, but I refuse to be the “hero” for the toiling masses worldwide. Under absolutely no circumstance will anybody, whatever their political background, ideology, or religion, convince me to do that. Nobody is going to “save the world”.
We are very, very late in this game, folks. Midnight is not too far off.
Our fate is sealed — I am also 100% certain — I think the can kicking is nearly over.
And in one corner we have the orgy seekers — hedonists on steroids…. preparation is a waste — go wild NOW.
And in the other …. the permaculture crowd…. koombayaists on steroids… prepare for the collapse and live to fight another day…
Who will be right? Stay tuned for this new LIVE reality TV show — coming SOON!
LOL! My money’s on the hedonists. They’re likely more committed to their position, plus they’ve got a big head start!
“Who will be right?”
Thesis -> Antithesis -> Synthesis. The solution is Hedonistic Permaculturists. Gardening by day, partying by night. I … just want to rock and roll all night … and garden everyday!
Here is an interesting discussion of our predicament and all his other blogs are gold as well;
http://mythfighter.com/2015/08/12/the-human-interim-species-if-we-cant-save-the-pale-blue-dot-how-can-we-save-ourselves/
Good post, which is why I say that we will never adopt any solution that could be considered in any way altruistic. Indeed, if one were ever seriously considered, that alone would likely spark the collapse.
And you’re right, it’s no longer about right or wrong. That question was posed and answered in the late 1800s when we first discovered oil and began the current rush to hyper-industrialization and massive over population. Although the question of nuclear armageddon is still a viable one. Unlike the Archdruid, I think we’ll likely resort to that before it’s all over and done.
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What is money? Is it energy? Hm, I would say that a more appropriate definition would be that “money is an extraction tool”. That is why quantitative easing and other forms of money creation are applied to keep the economy from imploding, when the debt can not be increased. Basically, money is used to extract the resources and energy from the environment.
The inflation is a state when you have too many extraction tools available. And you still have resources to extract. When you have no problem with human resources energy and external energy and the oversuply of extraction tools is present, then you have inflation. The people have energy, but, at the same time, there is an oversupply of tools. Also in comparison to available resources. Thus, the inflation is a state of missing resources that can be extracted. (E.g. lack of food due to smaller crops in a year with bad weather. = it is still economical to harvest the crops, even when the crops are lower than usual.)
The deflation is a state when you have not enough energy to power your extraction tools. Including the energy provided by human resources.The power of the extraction tools is going down.The deflation is an energy based problem: you may have an oversupply of extraction tools, but you do not have enough energy of human resources and external energy for their operation. (E.g. there is plenty of crops, but it can not be delivered where it is needed due to the high energy costs of harvesting and transportation. It is more economical to leave the crops rotten on the field than to harvest them. = it is not economical to harvest the crops, despite the large amounts of the crops on the field.)
That is the reason why the ever increasing supply of money does not cause inflation now. The energy available to human resources for leveraging their work is going down. They can have a lot of money available, but money, as an extraction tool, provides them less energy and resources from their environment. The ever increasing amounts of extraction tools are needed to extract the energy and resources from the environment when the quality and durability of extraction tools goes down. The resources and energy from the environment are harder to get, that is why there is no oversuply of money (as an extraction tool), as the money is easily consumed by harder and harder resource extraction…
The reason an increasing money supply is not (apparently) causing inflation is that it’s merely propping up previously accrued bad debt. In that sense, bond, equity, automobile, and housing prices (among many others) are all greatly inflated, and otherwise insolvent banks and financial institutions are merely inflated apparitions of the truly legitimate institutions they once were. Everything in the aftermath of 2008 has been a new, improved, long con, setting the trap for what appears to be one final round of truly global consolidation/thievery before some sort of systemic reset occurs.
http://leverage.wikia.com/wiki/The_Long_Con
The “con” is banking. bankers have executed the con for hundreds of years. They make you pay for something that costs them nothing.
There is some cost–overhead and defaults. Eventually the cost is a lot of defaults, so the whole system fails.
Maybe a simpler way to think of it is we’re in a net energy decline which has far reaching ramifications in the direction of collapse. I think it’s a situation in which radical monetary policies can ‘extend and pretend’ (as Nicole Foss puts it) the current paradigm, right up until it doesn’t work and that will probably occur quite quickly once it ensues.
Our battery that we are using is running down. It is harder and harder to get out the energy products we are using. It isn’t working well.
Money does not physically exist. It is a number in an account and its value has no physical substance. It’s value is confidence, confidence in the full faith and credit of the government. Dollar bills and coins represent dollars, showing the bearer owns a dollar.
Money is created and destroyed every day. Sovereign governments spend money into existence [ they cannot lend money] It does that by sending instructions from Treasury to creditor banks telling them to mark up the cheque accounts of their creditors. The money to pay taxes comes from government spending and once collected it is destroyed. Taxes do not pay for anything. Tax is not returned to the economy. Raising taxes lowers our spending power. It doesn’t give the government anything to spend. It really is just a cost, but serves to help control the money supply and by implication limits inflation. ETC!
Dear John Doyle, yes, the money is just to tool for the extraction of resources and energy. The government uses it to extract energy and resources, the individuals use it to extract resources and energy.
“The reason an increasing money supply is not (apparently) causing inflation is that it’s merely propping up previously accrued bad debt”, as James said, tells us, that the money keeps the structure from collapsing, it looks like a propping tool. In fact, this propping tool is an extraction tool growing in size, that brings the resources to the creditors, states etc. That is why our todays debt can not be cancelled easily. The new debt must replace the old one to keep the system existing and operating. The debt cancellation can cause an immediate lack of money in the system. Some debt can be cancelled without any problems, another debt can not be cancelled.
As John Doyle points out: “Money does not physically exist. It is a number in an account and its value has no physical substance. It’s value is confidence, confidence in the full faith and credit of the government. Dollar bills and coins represent dollars, showing the bearer owns a dollar.”
Yes, the money is a virtual extraction tool, we believe in its power to extract resources. E.g. the Roman Empire emperors in the past issued more and more money to buy human resources in order to have an army that could secure resources for the Rome. While the domestic farmers were leaving the rural areas due to the overtaxation, i.e. the state could not extract the resources and energy from its own inhabitants, as they were already broke, too.
When we have a an economy where somebody has something else and the people want to exchange things and energy, the money is a tool that makes the exchange easier. But when there is less and less to exchange, as everybody is getting poorer, then money functions more and more as an extraction tool, its exchange value diminishes: when your neighbour has little energy and resources to exchange and you are in the same position, than you both need a scheme how to get the resources and energy from the environment that is farther from you (e.g. deeper oil wells, oil from Arctica etc.).
Thus, the money is not what it used to be. It is more and more a kind of promise that someday you get something. If the extraction process is succesful, i.e. the natural resources are succesfully extracted and the human resources and machine resources are succesfully extracted during the production and the delivery process. (You can use army discipline or even terror on the extraction site or in the production plant hiring rutheless managers or subsidize the lower truck driver wages due to higher fuel costs to achieve the extraction goals, etc.)
(E.g. subsidizing the lower truck driver wages was na idea promoted by my Slovak government to help the companies providing goods transportation services.)
I don’t see money as an extraction tool. Is your use of that term a translation from another language? Money has many definitions: money is a measuring tool rather than an extraction tool. It is a social unit of account, a record of debt/credit. All money is a form of debt. Nate Hagens defines money as a claim on future energy.
Dear John Doyle, o.k.
Anyway, when I look at the the todays financial system, it looks to me like a big virtual excavator of energy and resources. Even the bribery is just a kind of subsidy to make somebody to do something, even though he or she does not have to buy anything with the received money.
Try to bribe somebody with food, it is a direct resources/energy input. But receiving the bribe in the form of money is just the promise that the resources/energy will be excavated and delivered someday in the future. You even do not know/are not sure about the amount or quality of the received energy/resources in the future.
But the probability that you receive less is higher than the probability that you receive more. The extracting power of money goes down with the depletion of energy and resources. Together with the ability to transport goods on long distances cheaply.
I think you should sheet home most of the finance and money issues to Bankers, Banksters if you will. The whole economy has been shaped by them, over several centuries.
I have seen reports that bankers were behind, for example, the American war of independence. They deliberately set off great depressions in the 1890’s, 1907, 1929, and more, many more.
They pull the strings behind the corporatisation of the planet, and in the end they will cause our civilization to collapse,. At least that will be bad for them too but of little solace to the rest of us.
Bankers understand money, 99.9% of the rest of the population have little understanding and even positively oppose understanding. Bankers “buy” economists, journalists and media owners who push ignorant politicians like Obama, Harper, Cameron, and Abbott, plus all their treasurers to toe the falsehoods we are saddled with. Central bankers know much but say little. To say the truth only harms themselves.
Bankers will oppose any solution that threatens their near monopoly of control. Because money today ALL comes from thin air and therefore has no real value a solution to our credit overhang would be a “debt jubilee”. We simply wipe all the fiat money from the banks’ accounts leaving only the interest and savings quotient standing. Government money which is essential to run the economy would stay unaffected. It is not debt anyway but savings accounts of the banks stored as bonds in the CB. It’s a complex thing about which I don’t know all the details. but it would quickly dry up the huge overhang saddling our economy now. Steve Keen says all private debts should be given the same treatment. In any case debtors would become debt free and keep their property.
It will only buy us some time. The end is ordained now and is inescapable as Fast Eddy and others keep telling us.
@ John Doyle
Steve Keen says all private debts should be given the same treatment. In any case debtors would become debt free and keep their property.
I like to imagine the political shit storm such a proposal would set off in the US. They’d declare martial law and conduct door to door confiscations and evictions before allowing such a thing to happen.
It might be fun to watch the banks reactions. However the government would be in no position to save the banks from themselves, let alone send in troops on their behalf.
It’s a mess of the banks own making. According to Bix Weir the mortgages have been sold off, bundled into derivatives, so the banks couldn’t legally claim the properties anyway. Then if everyone was evicted, there would be no takers when the houses were put on sale again. So owners might as well stay where they live. Otherwise the housing stock would just be like Detroit’s example.
I have a copy of an interesting comparison photo of Detroit and Hiroshima. In 1946 Detroit was in good shape and Hiroshima was bombed. Then forward to now, Detroit looks bombed and Hiroshima is in good shape. Telling!
I agree with you. The financial system is a big virtual excavator of energy and resources. We can’t do the job without it. Our problem is that the financial system fails.
Dear John Doyle, yes, I am just giving some ideas, not all of them are meant to be 100% ripe…
In the declining system of the cheap oil based economy, the money looses its value, as the various parts of the economy gum up. One must find alternative ways to achieve some of the goals. That is why in the declining economies, the money looses its ability to deliver the products and services. And that is the real reason of the inflation. As long as the money can deliver without coruption and bribery, the given currency is o.k. and strong. The debt does not matter much. But when the money is used for secretly increasing the price of the products and services on the waiting lists (the black market), its real purchasing power goes down.
I don’t quite follow you, MG. Money loses value through inflation. From 1913 the dollar has lost enough to be equivalent to 4cents today. However as the spiral turns we get advantaged by declining value on the original amount we borrowed. So in real terms we pay off less to get to the end and it has up till now always covered the interest cost.
The real future problem will be the Minsky Moment. This happens when the asset on which the loan was based does not deliver enough value to repay the interest.
Then we will be in “interesting times”
Increasing debt definitely helps pump up the price of commodities, and because of this helps extraction. Debt makes goods made with commodities more affordable, because of the monthly payments. Money (that doesn’t look like debt, but really is), smooths the way for everything to happen, by allowing international trade. Of course, there are also things like letters of credit involved.
This is my key-formula:
“As soon as we are not in the position to pump money from the future to the presence, we will not be able to pump stored sun-energy from the past to the presence – or the other way round.”
Copyright
Dsotb alias el mar (greetings to “das gelbe forum”)
That is a good way of putting it. Do you have a like to where the original quote comes from?
Yes, the money is the debt, a kind of suction device for energy and resources. The more money we have, the bigger is the debt, which means that although there are zilions of currency units stored in the computers and in paper form, just a little portion of them is used in the real economy. The rest is the increasing debt.
The real reason why some currencies are weaker and some are stronger, i.e. some are considered and accepted as strong suction devices, some as weak, depends on what results are delivered using them. That is why Japan, the USA or EU can print money, as this money can be exchanged for useful products, services, (energy) resources used and produced by the same countries.
The exporting/importing ability, i.e. that something can be delivered in exchange for the money gives the power to specific currencies over another currencies. The money is not backed by gold or assets, but by the ability to deliver goods and services. That is why with the declining wages of the common workers (the decisive group of the consumers), we have the deflation: the energy based products and services of the industrial civilization are delivered under decreasing prices.
And the only element that can be left out to keep the prices lower, is the worker and consumer in one person: i.e. when the value of the workerconsumer goes down, i.e. the ratio of his contribution to the resource and energy extraction and production goes under 0, he is no more an asset, but a liability. Those owning money and making no contribution to the resource and energy extraction and production can be the liabilities during the prolonged or even whole periods of their lives. But the diminishing returns apply also to money: although you can have tons of it, your real purchasing power is going down due to production and delivery outages, waiting lists etc.
That is a completely muddled response! I’ve been through the money creation business so often i’m tired of repeating it all the time. There are diminishing returns per unit of expenditure but not happening the way you say.
You have several good ideas there!
Business insider roundup….all negative
http://www.businessinsider.com/closing-bell-august-11-2015-8
All the major indexes fell more than 1% in trading on Tuesday, and the blue-chip Dow lost as many as 250 points. Crude oil cratered to a six-year low.
First, the scoreboard:
Dow: 17,402.84, -212.33, (-1.21%)
S&P 500: 2,084.07, -20.11, (-0.96%)
Nasdaq: 5,036.79, -65.01, (-1.27%)
And now, the top stories on Tuesday:
China’s central bank devalued the yuan by 2%. The People’s Bank of China set the midpoint of the currency at 6.2298 against the US dollar – a move that sent the USD/CNY currency pair to the highest level in almost three years. Authorities have intervened to bolster a slowing economy and make exports more competitive. Exports fell 8.9% year-over-year in July.
Major commodity currencies got slammed. The kiwi and Aussie dollar each extended losses and fell more than 1%. The Canadian dollar climbed to as high as $1.3150 versus the USD.
Crude oil collapsed to a six-year low. West Texas Intermediate crude oil futures fell by up to 5% to as low as $42.70 in New York. The 12-member oil group OPEC reported, citing secondary sources, that its output climbed to a three-year high last month. OPEC has overshot its production targets for at least a year to maintain market share.
Read more: http://www.businessinsider.com/closing-bell-august-11-2015-8#ixzz3iXoWjvDx
Is anyone aware of a “non debt” based monetary system? If a debt based system is dependent on growth, and growth is dependent on ever increasing consumption of resources, what alternative monetary system may there be? Barter, collect enough of whatever until you have a sufficient amount to achieve a desired end?
The bigger picture is not just money, but credit. Future’s Contracts, and buying things at a distance, all depend on credit. I think a better question is, are there alternatives to a money system based on perpetual exponential growth.
That leads to asking if humans can choose population control, and choose to consume less than as much as they can. Can people (meaning everyone, not just some) choose not to seek life extension when they are old and ill?
Then it all breaks down into questions about free will and determinism, genetics, culture, etc.
It does indeed widen out pretty quickly, doesn’t it? That’s why I continue to think we’re at a philosophical and moral impasse first and foremost. Even assuming we had the technological capability to continue to kick the can down the road a bit more (and that’s all any of our current technological and economic fantasies propose to do), the larger question always remains. But should we?
If we were considering any other species than our own, we would see this immediately, but our foolish belief in our own omnipotence due to our fascination with technology – which is itself little more than a happy circumstance enabled by the wonders of non-renewable fossil fuels – has blinded us to the realities of the world in which we actually live. And now we find ourselves in the worst predicament of all: having put off realizing the inevitable for so long that all of our good options have been eliminated and only decidedly bad ones remain. In that sense, our current denial phase actually makes a perverse kind of sense. As Fast Eddy has said here over and over so many times, once the masses wake up to their impending fate, the shit will indeed hit the fan for us all.
Any promise a government makes, whether it is called debt or not, is equivalent.
Gold coins can stand in for debt, but I am not sure it is a whole lot different. You still can’t eat gold coins; it is just something you trade for goods and services you really want. But at least, the quantity stays pretty much fixed.
James asked ” Not to differ, but what makes you so sure?”
There is a dependency of my proposition that humans exist. My sureness is due to the survival advantage a well organized group of people have over individuals.
Once this network crumbles another one or collection of them is sure to take its place. There may be some lessons learned and further adaptations based on this knowledge.
Not to differ, but what makes you so sure?
Maybe the no growth non debt scene will emerge as James proposes.
What would this look like?
Surely since we have extracted all the low hanging energy fruit — and are collapsing because we are out of cheap/easy to extract energy — whatever comes next (if we do not extinct ourselves) will not have fossil fuel energy….
Sounds like being alive in such a dire situation would not be very appealing….
Even doing something as simple as repudiating debt would be a tacit admission that something’s wrong, and would therefore almost certainly prompt a collapse. The current system is primarily a confidence game, therefore nothing can be allowed to disturb that confidence. Once again, a rather Catch-22 situation. Any proposed fix implies a problem and a subsequent crash, therefore no fixes can even be hinted at, nevermind imposed. My, but doesn’t the Emporer’s new suit look fabulous!
Fast Eddy asked “What would this look like?”
What we are seeing now. A race to perpetuate everlasting expansion in a finite setting.
Being alive in such a situation may not sound very appealing but it is good enough for me and I will stick it out as long as possible to see what opportunities or threats arise and what can be done with them.
Me too — even when I living in rags — shoeless — with barely enough food to stay alive — riddled with disease …suffering….
I will fight to stay alive — and I will cherish each day of drudgery.
Because I am a slave to Mr DNA. His wish is my command.
“Because I am a slave to Mr DNA. His wish is my command.”
Do you have eight children yet? If not, you may be disobeying your DNA programming.
I have taught Mr DNA to understand that spent fuel ponds will extinct him — so no point in reproducing…
He is complete agreement. But he still wants to live as long as possible.
Hence the farm in New Zealand.
That is our compromise
My DNA has been giving me a bunch of mixed messages lately and I’m getting tired of having to mediate all the time. BTW Eddy, are you on the North or South NZ? I had a Maori girl friend once and got to visit the family in Rotoura,
Great country! . I found the wild life and people very interesting,
North part of the South Island.
The Schramski article on “Human Domination of the Biosphere” is a game changer for me. My take on it is that it is the human use of energy from whatever source which is pushing us toward equilibrium with outer space. Since the start of agriculture, human population has boomed, along with energy use. We are stuck between economic and physical laws. To maintain the economy, growth is required which requires increasing amounts of cheap energy. If we have that, we continue to push ourselves toward extinction, but have a functioning economy (for a period of time). If we don’t have the cheap energy, economic collapse ensues and a terrible die-off occurs. It appears that the latter is the preferable alternative because it allows for the survival of the human race at a much reduced level. It may allow us to have life on earth for a longer period.
Correct me if I’m wrong, and I’m just throwing this out there, the only thing Gail hasn’t explored yet is total debt repudiation and the fallback to a no growth, no debt economy. Not that such a thing will ever happen of course, nor do I think it would even work, given all the constraints already imposed by our current debt-based economy, but it might be a nice exercise anyway. But on second thought, as I think that through even further, that will simply be the first stage of collapse anyway, so it’s probably a moot point.
Other than that, I’m with you. The only two choices remaining seem to be collapse now voluntarily and begin the die-off immediately – which will never happen – or continue to let the pressures build until the inevitable happens anyway. As Catton (as well as the CSU(?)professor that did the YouTube exponential function videos) described so well, past a certain point (which has long since passed) everything we’re seeing now simply became inevitable and irreversible. And here we are.
There’s no stopping us now so I reckon this is what will happen:
Great analogy!
You can’t get fossil fuels out without debt, because it is too difficult to pay for the end products and the factories. Even paying for extraction may be a problem without debt. “Renewables” take more debt than fossil fuels.
A steady state economy doesn’t work, because humans use more energy than other animals. Our numbers keep growing, as long as the amount of energy added is high enough. Once the amount of supplemental energy stops growing rapidly enough, population is likely to drop of. There is no fallback to a no growth, no debt economy.
That is a good point. The economic laws say we have to grow. The physical laws say we are pulling down the battery for all time.
If humans come back from the die-off, the population will again grow, until the phytomass is depleted further, so I am not sure that the new solution will last very long.
The article mentions renewables, but wind and solar PV don’t work very well. They need to be part of a fossil fuel system. It seems like they were mostly put in for the mandatory, “Maybe it really isn’t this bad,” statement at the end.
A link to the Schramski article you mention is here
https://collapseofindustrialcivilization.files.wordpress.com/2015/07/pnas-2015-schramski-1508353112.pdf
“If humans come back from the die-off, the population will again grow, until the phytomass is depleted further, so I am not sure that the new solution will last very long.”
So true as it’s in our makeup to do what we know best and that is to conquer. So in our attempt to outgrow ourselves on this planet we’ll do it again and again until there is no more to conquer. If science is right, we are already well into the 6th mass extinction on Earth.
“That is a good point. The economic laws say we have to grow. The physical laws say we are pulling down the battery for all time.”
An old article, but worth re-posting
Exponential Economist Meets Finite Physicist
http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/
http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/
Pingback: How Economic Growth Fails | EndGameWatch | Sco...
As an older person (57), the pensions argument above is especially sobering. Promised or not, it’s already apparent that most or all of us that foolishly relied on such promises are going to be SOL in the very near future. I guess the only “consolation” will be that those who triumphantly chose the private investment route will probably be in the same boat. But like it or not, there’s a poetic justice to all that, as nature quietly and relentlessly reasserts the natural order of things, in that humans, just like all the rest of the species, were not meant to be guaranteed unnaturally long lives subsisting in luxurious opulence on the resources siphoned off from previous generations and the less fortunate. I think there’s tremendous potential for western humanity (in particular) to rediscover a long lost natural dignity to the aging and dying process, which the modern “healthcare” system seeks to deny altogether. So in spite of being a decided pessimist about the prospects of humanity as currently configured, I think the overall process has the potential to be tremendously liberating and uplifting, at least in some cases, if we’ll only embrace it.
Cheers!
Actually I meant to emphasize future generations above. Debt: tomorrow’s consumption today, while passing on compounding interest charges to future generations in return. Think our grand kids ain’t gonna hate us when they finally figure out the true nature of things?
As an even older person (63) with a few health problems I am gong to enjoy modern medicine as long as I can. My 60 year old doctor (who is the father of a 7 month old) is having me try some hormone therapy. Looks like he might know what he is doing. I’ll let you know if anything works.
Be careful with this stuff, guys. Medical professional here. Yes, the food and water supply is floating in estrogen because it’s given to all sorts of animals for weight gain before butchering. Before I retired I always took my students on a field trip to the brand new, state of the art water treatment centre. We saw the high-tech filters and flotation and chemical tanks. I purposely asked the tour guide when the students can hear me if these treatments can remove hormones. They have to answer no, of course, because those molecules are too small. “So,” I say, “all those houseboats on the Shuswap Lakes, where there are young women on birth control and old women on hormone replacement, and the sewage goes in the lake; all that estrogen is in the water?” “Yes.” “So all of your sons are awash in estrogen?” “Yes.”
We have a well, so that’s not a problem for me, way out of town where I am. BUT, consuming estrogen does NOT make you stop producing testosterone, it just alters the balance between the two. You can still buy DHEA in the States in health food stores, I think. It’s dehydroepiandrosterone and it breaks down into testosterone and other hormones. It will work for you.
The thing is, though, it also makes people aggressive and prone to yelling, arguing and actual physical violence. Think long and hard if you want to take these.
Thanks Ann. I’m taking DHEA now, in spite of my Dr’s admonition that I was wasting my money. No more arguing and yelling than normal noted so far, but I’ve always been an ornery cuss anyway. I’ve finally decided to aggressively root out refined sugar in all its forms in my diet. Years and years of distance exercise (I’m retired military) had convinced me that “small amounts” (which were never all that small, unfortunately) were necessary to “keep my energy up”, but my recent conversion to mostly weight training has rid me of that excuse and delusion. I’m also skeptical of the entire cholesterol myth (that diet affects serum levels, or that serum levels have anything to do whatsoever with coronary artery disease). What are your opinions on that?
James:
The lipid hypothesis has now been shown to be based on bad data, bad methodology and unwarranted conclusions. There’s apparently a book about it published recently by a woman who spent a couple of years reading absolutely every study ever done on it in detail (not just the abstract) and she was appalled at how bad this research was. I even heard on CBC the head of the Canadian Cardiologists Association in an interview say, “For over forty years we’ve been telling people that saturated fat caused heart disease and cancer. WE WERE WRONG.” Yes, he said it, “WE WERE WRONG.” He went on to say, “We have engaged in an uncontrolled experiment on millions of people and what do we have to show for it? Skyrocketing cases of diabetes, heart disease, obesity, Alzheimer’s and cancer.”
James, if you take DHEA, you should definitely not take any testosterone on top of that. It would put you into an overdosing situation. In addition, DHEA builds up over time, so the effects carry on for a while even if you quit.
Robin Datta, are you reading this? Can you help by filling in any details for me?
Try stopping your DHEA for one month and see what changes. When you know what goes away when you stop taking it, you can decide if you want those things to come back again, or stay away.
As for refined sugar, get rid of it. All of it. No brown sugar, which is white sugar sprayed with molasses. No powdered sugar, no palm sugar, no date sugar. Maybe a bit of honey or pure maple syrup, but not tons of it every day.
BTW, one of the queens of veganism since she was a teenager, Isa Chandra Moskowitz, who doesn’t even eat refined sugar because it’s processed with bone meal, is now overweight and has cystic ovaries and can’t get pregnant. At least that’s what she said in her book, “Appetite for Reduction.”
Eat meat, but only from pastured beef and pork and chicken and turkey. Raise your own animals and butcher them yourself. The yolks in the eggs from my chickens are very very dark orange. Gorging on grasshoppers, I think.
Don’t eat marjarine. Eat butter and lard and tallow. Or olive oil. When we started frying in lard and tallow, it soon became apparent that you need very little of it to do the job properly. Now we don’t even use all the lard we get with our half a pig every year. Find a source of raw milk from goats or sheep, not cows, unless you know the cow is Beta Casein A2 and not A1. Most Guernseys are A2.
Hope that helps.
Thanks Ann. Your comments here and to Stilgar above are in line with everything I’ve read on the subject as well, including this http://www.cambridgemedscience.org/reports/CholMythCamb.pdf among others. I’ve had high cholesterol my entire life, including my running days 20-30 years ago. Matter of fact, it was higher then (when I was consuming unlimited amounts of carbs, including mass quantities of beer), even though I was skinny fat at 5’10” 170 lbs and addicted to high mileage to keep my weight in check for Uncle Sam. And I’ve heard similar horror stories about statins, which I’ve stubbornly refused to take. They treat a non-existent illness by messing with the one organ that should not be messed with unless it’s absolutely medically necessary: the liver.
As for DHEA, I only considered it after years and years of poor results with exercise, even allowing for an American diet that was typically high in sugars. I come from a long line of pear people, so I’m actually fortunate to have turned out as well as I have so far, although I have to say honestly that I work out harder and longer than anyone I have ever met and have poorer results to show for it. Several friends and acquaintances over the years have observed the same thing. So when I finally got tested for low T I wasn’t surprised to learn that in spite of the DHEA supplementation, my level was borderline low (290, where 230 is considered treatable low, and 500-800 is the norm if memory serves correct).
But any rate, I’m finally convinced that aggressively attacking the sugars is the way to go for me, even if it means sacrificing exercise volume – especially cardo – in the process. One of the beauties of focused weight training with minimal cardio is that it doesn’t require a whole lot of “nervous energy” to maintain, so even in the relative “flat-line” state I’ve noticed a low carb diet induces, the workouts – and I’m focusing on much heavier weights now, even in my late 50s – are still easily executable and never painful in any way.
And finally, I can’t raise my own animals, but the rest of your suggestions I either follow already, or try to follow more within my limitations as a typical western consumer of limited means. But anyway, MANY THANKS again for your kind and caring inputs!
James
Excellent. The truth has a quality that shines. I didn’t even bother when those loons said take an injection of this and that. You have far more patience than me.
How can anyone grow to maturity and have no clue? Well, they have been spoonfed nonsense from Day 1 and don’t have the courage to think for themselves.The Herd Rulz!
Hi Ann,
Excellent. Thanks.
Is rape seed oil as good as olive?
Best wishes,
Lizzy
Lizzy asks whether rape seed oil, also called canola oil, is as good as olive oil.
No.
Almost all canola is genetically modified. Therefore it is sprayed with RoundUp(tm) at least once per growing cycle. Plus it’s a seed oil and humans have gone way overboard on seed oils in the last 40 years.
I don’t think they’ve managed to genetically modify olive trees yet.
I don’t think the varieties of grapes that yield grape seed oil have been genetically modified yet, either. That might be a better choice than canola.
Do a search on grape seed oil. It’s thin, lots of vitamin E and it has a very high burn temperature so it’s great for stove top cooking. I don’t know if it’s been genetically modified though – something to ck.
No! High in omega 6. Use avocado or coconut oil and yes the olive oil is one of the best.
Only eat an animal whom you have been able to pat on the head while alive…….
Look what they are doing in Spain.
http://www.dailymail.co.uk/travel/travel_news/article-3191114/Outdoor-showers-compost-toilets-stipend-just-38-week-High-flyer-quits-Dubai-life-grid-desert-village-existence-southeast-Spain.html
Fascinating article
Just one small detail–
What do you notice about this group of people—I can’t be the only one to have spotted it?
They are all young, strong, healthy and beautiful and white— no kids, no old folks, no ‘minorities’.
Spain is fully of elderly European people—who migrated there when they were not so elderly. Now they’re panicking in face of approaching infirmity.
A 90 Minute walk to the nearest town?
End
Another point is where he says that they use candles when there is no solar-powered light: the fool doesn’t realise that real peasants lived in the dark, except a little light from a small fire, as candles were a super-luxury until very recently, and they collapsed anyway at the end of the labouring day.
Just an eco-tourist, posing to his own satisfaction.
If any such rural communities emerge after the Oil Age, they will have to get used to the old, old friends of the peasant: malnutrition in winter and early spring, typhus, cholera and TB, rheumatism and crippled bodies by 40.
And they lived in a world not depleted as today of all the low hanging fruit. The world they inherit will be unimaginably harsher than the last time.
I agree completely. Everything is depleted. New and more dangerous pathogens have been created. Climate patterns altered. Desertification. Species loss. If it was tough to survive 400 years ago it will be even more so in the future.
Xabier, yes, people here have an image of the good old days in New England. They forget about the malnutrition. They forget farmers sent their daughter to the textile mills not because they thought it would be a fun learning experience but because they could not afford to feed them. Even further back 400 years they forget the natives had over populated for a hunter gather life style and were starving and beginning to shifting to farming.
We have definitely romanticized that era… farming without any machinery is a very harsh business…
Just think about what would be involved in cutting down trees and splitting the logs — without a chain saw or splitter…
My first real farming job, ditch cleaning, in Florida, in August. First take a bush-hook and whack all the brush growing on the sides of the ditch and everything a few feet outside the banks. Then take a pitchfork ands toss all the cuttings to the off side of the ditch. Then take a flat bottomed square point shovel and pitch out the washed in mud and sand out of the 3 foot deep by 3 foot wide ditch. My cousin and brother got $.25 a foot split three ways for 2000 ft of ditch. The next year we got a tractor mounted backhoe. Give me the backhoe anyday.
daddio
A succinct statement of why tractors and power tools triumphed everywhere as soon as farmers could get their hands on them: moreover, a tractor couldn’t kick you to death like a plough horse.
Reading very old newspapers from the 19th century, I’ve been struck by how often horses killed people: overturned and run-away carriages, terrible crush injuries, being thrown, kicked.
My deceased grandfather fought in WWI mostly in France as an artilleryman for the Brits. He said one day they heard a commotion and a person that handled the draft animals had been kicked to death. However, that person was mean to them so it wasn’t a big surprise.
Here in my city an accident happened to a young teenage girl when a horse somehow kick her in the head while wearing a helmet. Bad luck would have it the hoof struck her in a bad spot and killed her.
Think the horse was startled or put in fright.
Yep, Friend has three, the stallion is a big guy and you don’t want to be on his bad side…literally or figuratively.
Horses killing people = nature at work containing the human population the old fashioned way.
My grandmother came from a logging village in the Pyrenees. Looking at old photos of the loggers, who cut by hand and the trunks were dragged out of the mountains by mules, they were very lean, hard men, tall – and somewhat thin by today’s standards – and look…….totally knackered!
Then again, we’ve necessitated farming with machinery in the process to keep up. It’s a snake eating its tail at this point.
Honest farming by honest means at an honest pace is not necessarily a harsh business. On the other hand, demanding that such a process keep up with the foolish demands of exponential growth demanding capitalist investors who’ve likely never seen an honest callous in their life definitely is!
Its hard work. I have done it without a chainsaw. We were very poor growing up and did not have a chainsaw early on. We used a two person lumbering saw. One person on each side working in unison. Its actually not that bad when you get the hang of it. But it does take good metal to make one that stays sharp. My father and my brother and myself have built homes and barns entirely with hand tools. Yes hand drills and handsaws. It isn’t that much slower than a power saw when you have sharp tools and your muscles get trained to do it. My friends that are in construction are amazed when they see me use a hack saw or wood saw. They don’t even swing hammers any more. Kinda sad. Its hard work but at the same time it is very rewarding work. The worst thing about farm life is the heat no so much the work….its the heat that’s just unbearable.
Greg
Hence Shakespeare’s ‘Fear no more the heat of the sun…’ song to the dead farm labourer: he’d observed the reality of harvesting all day in the August sun.
I much envy your knowledge of real construction!
Good hand tools even such as hammers are hard to find, well-made and properly balanced. I have a beautiful hammer made in the US and up to the old standards, but it stood out as the only real choice among all the made in China rubbish. Good Swedish axes, too, hand-forged and satisfying to hold.
It’s funny to walk by any upscale western “health center” and watch so many foolish white people who make scandalous amounts of money for essentially doing nothing work out like dogs to partially recover the fitness their lifestyle has long since said adieu too. Yes, the western lifestyle and everything about it simply insane.
I’ve been banging on about the health thing for years now.
All these stories about ‘downsizing’ and becoming happy peasants—scary or what?
Listen to a public radio station program called “The People’s Pharmacy” with Joe and Gerri Garden show 1001 about natural cures of skin disorders.
The guests comment concerning why folks did not have to bother too much about skin cancer…easy answer…the way nature works is you are born (along with many others) and if you are lucky enough to survive back then to marry and begot offspring, you helped them get established and get on their feet and succumbed to one of the numerous fates that befell on a person and died around in your 40’s.
We are spoiled in thinking we are entitled to live to an advanced age…like that is normal.
After you are out of breeding age, nature cares little.
Biologically we are just a mechanism designed to reproduce to the max and, preferably, protect our offspring until they are autonomous and able to do some work, around about 7 years old.
Once we spend more time worrying about the naturally failing and aching parts of our bodies than living, above a certain pain threshold, it’s probably time to call it a day. Nature does not need us any longer.
Unless we have Wisdom to impart: cue Don.
Agreed. Been feeling that way a lot lately. 60(50?) and out might well be the mantra very soon.
Ed Pell
Interesting. The real peasants of Spain are leaving those old villages just as fast as they can. This strikes me as something of a middle-class fantasy:
The south-east is about one of the very worst locations in the Peninsular, although the environment is declining all over: ever fiercer, multiple heat-waves (incredible this year, making even the natives gasp), ever worse bush-fires, ever less water (and so much of it polluted by decades of industrial agriculture.) Traditional farming patterns will be destroyed in all likelihood as crops no longer thrive in historic areas.
Even in the past, in a fully-functioning agrarian economy, life in those places was terrible, harsh beyond belief and the labour and deprivations killed people very young even when bred up to it (which everyone seems to forget is necessary for agrarian workers, not mere gardeners).
Nearer to Africa than Europe, in almost every way: harsh land, harsh, cruel and usually treacherous people – weakness did not thrive in Spain.
And in times of crisis, I wouldn’t expect any locals who are left to be much concerned with helping the foreigners – it is one of the most insular regions of Europe.
Spain is a place where one needs to belong, and have connections. Those who don’t have them get screwed: bank managers, local politicians, the Church, the parties play all sorts of power games. The law, national and local, means next to nothing, except as a means of attack when you want to get someone. Many of the police, army and judiciary are still firm believers in the Franco dictatorship, and don’t hesitate to show it.
I would be a local boy with old roots if I were to return, (which is my Plan B) but I’d have to tread carefully as even when you have strong family and friends, it means you have automatic enemies due to class, religion and politics. Being a foreigner is just one big negative, unless they can milk you…..
Recent gem from the head of the armed forces in Spain: ‘We are ready to act, whether in Afghanistan….. or Valencia!’ All Spaniards know what that means; the Army is restless and trigger fingers are itching.
I tend to eat animals that I went out and found in the wild. The moose meat I’m eating now I carried out on my back with two friends. It took 3 of us, 2 days, and a bushplane flight there and back. Fossil fuel based subsistence hunting! Once oil goes belly up, the pack-outs will be longer, my feet will hurt more, but I’ll be in better shape.
“Fossil fuel based subsistence hunting! Once oil goes belly up, the pack-outs will be longer, my feet will hurt more, but I’ll be in better shape.”
While technically applicable to Bush Pilots, the airline industry is trying to reach a goal of lower emissions and driving bio-jetfuel development.
Although I would argue being in better shape and dealing with black fly bites for a longer period of time is more enjoyable. 🙂 Better boots also helps considerably. The kangaroo leather upper boots from Cabalas, feel like high top tennis shoes on your feet because they are so light, and don’t cause the fatigue the heavier boots cause. Well worth the money.
phthalates r ubiquitous and unavoidable and r estrogen mimics despite the pr bs you will find on worldorfpedia
You should change your name to “Da Truf”
phthalates r ubiquitous and unavoidable and r estrogen mimics despite the pr bs you will find on worldorfpedia
Lol that was filmed near me and I know the actors.
https://www.youtube.com/watch?v=bhCP-kosJKg
It is a good area of the planet to ride out the storm.
I have a farm on a Island that has about 100 people and NO cops or any other gov intrusion. Low tax $100 year. The down side You fix the roads out of pocket but you can pay with time on the road gang.
The Island also works for BAU we have air ambulance 15 min to hospital also post office and school.
Downside 1 hour boat, ferry ride to mainland
Was on a flight the other day and watched this https://www.youtube.com/watch?v=FBFGLm5HwXY
Those are the type of people who would be best positioned to survive…
Quite an adventure….
Nah, the id adjusted are the ones.
You could get a job as a disinfo agent with your timely use of non sequiturs
I should probably add here that taking testosterone also increases your chances of prostate cancer and heart disease. In addition, all the beef you eat is loaded with estrogen unless it’s labeled grass fed and no hormones. The calves who spent their first summer running around in the grass and playing with their friends and drinking milk are loaded into trucks in the late summer and fall and taken to feed lots. In the chute going to the truck the males are castrated. Then both the males and the females are given FIVE slow-release estrogen implants into EACH ear. Then they go off to the feed lot where they are fed pellets of chicken shit and feathers, soybean meal, cottonseed meal and anything else that’s cheap. They stand knee-deep in their own shit and never see grass again. This causes metabolic acidosis and they get progressively sicker and sicker. They butcher them just before they die. Nice white marbled fat!
There’s a place near Calgary Alberta called “feed lot alley” along the Bow River. It’s got feed lot after feed lot full of sick cattle. All the fish downstream from this area are female. I do not know if this is where the water supply for the city of Calgary comes from. I sure hope not.
I knew years ago that saturated fat does NOT cause high cholesterol and subsequent heart disease. I knew this because one of the researchers teaches at that university. He would do guest lectures for me and tell my students that the Lipid Hypothesis that got started in the 1940’s was “bullshit.” He’d say, “If that guy was alive today, I’d go kick him in the balls.” I’d glance over at some of my male students and see them wince. Now, recently, of course, this information has just become widespread. I hope my former students are paying attention.
Ah, but there’s a catch to this good news. If you eat commercial beef, pork and chicken, then your consumption is statistically correlated to high cholesterol and heart disease. Why? Because of the treatment of the animals. If you eat meat from grass fed animals without the use of antibiotics and hormones, you can eat all the saturated fat you want, and it won’t cause high cholesterol and heart disease and obesity. Your genetic makeup is a much more powerful component of this than your diet. So I went from being a vegan to eating lard and tallow and chicken from local farms. I lost weight and some of my other physical ailments went away. This morning we had biscuits made with lard. MMMMMMMMM! Didn’t all of our grandparents eat this good stuff and didn’t they stay skinny and healthy until ripe old ages? My father is 93 and was raised on a farm and still going strong.
Well said Ann. I have been following that sort of advice for a few years now and I lost up to 24 Kg. It’s down about 20 now as I try to recover some of the lost muscle mass that got shed with the fat. Basically I am back to my weight of my school age years 60 years ago. It takes a lot of research to sort through the vested interest bullshit so rampant now.
Same goes for finance and money. Few have any idea how it differs from mainstream fancy. It’s almost shocking to find that taxation is NOT used by the federal governments for expenditure, but simply thrown away, wiped out of existence! The government uses the central bank to spend created money for every expense.
See how you go selling that idea, yet it’s what actually is done every day!
We live in a world made to cheat and delude us at every turn. The PTB want us to be ignorant so we don’t ask awkward questions.
John, you’re personalizing this; lying and cheating are false concepts. The PTB have no obligation to you – they are (and have been) simply out-competing everyone.
I’ll say this to the group in a general sense: if you view the vanity fair as anything other than Kruger, albeit the animals are wearing clothing, then you are at a distinct disadvantage. This disadvantage manifests itself most directly in the measure of capital available in which to distance oneself from the fight.
I understand the perspective looking up from the Coliseum floor is not nearly as pleasant as sitting in a seat under the shade, but you have no one else to blame other than yourself for being there. You were born with a brain, so use it to figure out how to be eating grapes instead of fighting lions.
Sorry B9K9, I don’t see what you are trying to say. My personal response to Ann’s comments are irrelevant to the PTB, as they are flying blind and think themselves giants in their own headspace.
Since when are lying and cheating false concepts? Since 2008? since forever? Just now? False they are not. Evil and ugly they are always.
I understand the perspective looking up from the Coliseum floor is not nearly as pleasant as sitting in a seat under the shade, but you have no one else to blame other than yourself for being there. You were born with a brain, so use it to figure out how to be eating grapes instead of fighting lions.
Et tu B9K9? Et tu? I think you’re over personalizing this as well, B9K9. I the end, we’ll all be “fighting lions” one way or another before it’s all over and done with. You’re above admonition is nothing more than the western capitalist mantra verbatim.
– Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….
– As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them
– Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!
Yep. Have to agree with all again Fast Eddy. Lots of thoughts that I can’t fully articulate here and now, but I think the overall thrust is spot on.
In two words: population pressures!
You’re very welcome, James. It’s the least I can do after I’ve been appreciating your posts here and elsewhere for a long time. At last I can share some of the things that I actually know. I saw this on Google News Canada tonight:
“Researchers at McMaster University analyzed dozens of past studies and found no reliable link between saturated fats — the tasty ones found in meats, butter and eggs — and overall mortality rates or death from heart disease, diabetes or stroke. But trans fats (found in some hard margarines and prepared foods) were associated with dramatically higher rates of heart disease and rates of death for any reason. And this is just the latest in a litany of studies calling the low-fat dogma into question.”
Cheers. Have a nice big tall cold glass of milk on me. No cookies.
Thanks Ann. You’ve been a much welcomed breath of fresh air! Yogurt for me these days. Love me some full fat, no sugar added, yogurt!
On the right track with that James. Eat kimchi and sauerkraut too. All good for the gut -which we now know has a mind [nervous system]of its own!
Thanks John, and you read my mind. Back on the sauerkraut too! Love it for the digestive regularity it provides, but have learned to embrace the taste too. I’m a true convert to the benefits of fermented foods! Cheers!
let me make another suggestion. Wear a sleep mask at night. Unless darkness in the bedroom is pretty total the melatonin production will be less than what’s required. I read melatonin is the body’s most important antioxidant. Even the light from the digital clock makes a difference!
See now? You’re reading my mind again. I both wear a sleep mask if I expect to be asleep before or after sundown/sunup, and I wear silicon ear plugs too. And well I know the hazards of a digital clock’s light, thank you very much. But I’ve also long since taken supplemental Melatonin and the always tried and true over the counter antihistamine Diphenhydamine. But my true sleep aid from above finally arrived recently in a hypertension med, Propranolol, a Beta Blocker, which has finally got me “adjusted” properly. 20 mg every night immediately after work and I’m indeed the proverbial “new world” man for the next 24 hours or so. And at our age, a good night’s sleep does INDEED make all the difference in the world, doesn’t it?
I must be bleeding melatonin cause I sleep like a log. Always have. I wake up feeling drugged and can barely get going. I am 50 now. I have never napped and can always sleep really really well. But once awake I can work hard (manual labor) all day. Dad and grandparents were the same way too. We are a long line of hard labor workers though.
As long as the bedroom is dark. That is the important bit. As to the rest, you are one of a dying breed if you can do physical work like was once the norm. If one thinks of the navvies digging by hand all England’s canals, it would be inconceivable today.
Manual labor’s likely your secret. I work hard at sitting on my ass in front of a computer for the man all day (and feel bad about every minute of it), with bouts of intense self-imposed exercise twice a day to keep me from becoming a vegetable. Ahh, ain’t modern life grand?
Try a white noise sound machine. When I met my wife in 87 she used one and I thought it seemed quite odd, but it really helps act as a signal to sleep and masks background sounds like garbage pickup and other noises. Then when you turn it off the brain knows it’s time to become alert again.
Also open windows and put a fan in the window to blow fresh air in which really makes for a good night sleep.
I wonder if Henry has a torture chamber inside the compound … kinda like some people have private cinemas…
“I knew years ago that saturated fat does NOT cause high cholesterol and subsequent heart disease.”
Ann, I think you’re listening to the wrong people. My wife had a stroke in one of her eyes that left her blind in that eye. She went to a cardiologist who wanted to put her under and maybe put in stents or a pacemaker, but then we heard about a dr. that does a scan of the heart without going in invasively i.e. without a cathetor. She had lots of plaque on her arteries in and around the heart. She tried every kind of prescription medicine but had too bad a reaction to all of them.
Then she heard about Dr. Esslestein and got interested in becoming a vegan so as to reduce cholesterol and fat in the arteries to reduce and possibly even eliminate the plague. At least that was the idea, right. So she went on a strict diet and slowly but surely her blood pressure dropped and the incidents of spiking blood pressure went away. Two years later they did a follow up scan and the plaque that was left was very tiny and no longer impeding her blood flow. The idea is the interior of the veins and arteries have a wall, an endophelium that responds to what is flying by so to speak. In her case the lack of fat going by reduced her condition to non-existent. The endopheleum healed.
Anybody you know that lived to a ripe old age eating a high fat diet probably has really good genetics vs. a good diet. Get your blood pressure checked regularly if you insist on a high fat & cholesterol diet. At least give yourself the opportunity to get feedback on your diet.
Stilgar:
There are many contributing variables to high cholesterol and plaque build-up (and, BTW, those two things are not causally related. High cholesterol does not NECESSARILY cause plaque build-up in arteries, although they sometimes appear together). All women get higher cholesterol readings after menopause and it doesn’t necessarily cause any trouble. But since their readings are higher than those of men of the same age, physicians will agressively treat high cholesterol in women without any evidence that it helps. Some of the variables for which there is ample evidence that they are causally related to plaque build-up, on the other hand, are:
– the most serious indication is inflammation. Total body inflammation, not just arteries. To see if you have screaming high inflammation, go get a blood test called “C-reactive protein” and see if it’s elevated. Inflammation causes plaque build-up in arteries all by itself. Some inflammation is caused by stress and some by diet. High intake of refined sugar does it much more quickly than a high fat diet.
– Family history. Some folks just have plaque build-up because everyone in their family had it. If there are lots of strokes, MI’s, pulmonary emboli, or diabetes in your family, then you’ll probably have it, too.
– Estrogen therapy. This is a killer. Young women on estrogen for birth control have high blood pressure, plaque, and a much higher rate of breast cancer and bowel cancer down the road.
Yes, a vegan diet can roto-rooter your arteries clean. But without some saturated fat, you’ve got an immune system and hormonal system that are compromised due to inadequate building blocks of lipids floating around in there, ready to be used in the construction of immune cells and hormones. Without some saturated fat, your brain doesn’t work as well. Because of damaged sections of endothelium inside arteries caused by inflammation (whether from refined sugar or stress or diabetes or commercial toxins) then plaque is built up on the surface of the damage. More damage, more plaque, until there is no more blood flow through that artery. Then they do balloon arthroplasty and tell you you’re good to go. But the damage to the endothelium causes more plaque to build up again, more quickly this time. And you land in the ICU with tubes up your whatever. 😉
Interesting information I shall mull over – thanks, Ann.
Ann’s reply says what I think is the real response to the choices you write about. You may have correlation but do you have causation? The only downside of a high sat fat diet is,possibly, a loss of memory, but I have yet to see where that came from,and whether there is a causal link. Again I was told that saturated fat lines the arteries and prevents plaque from bonding to the endothelium. My sat fat is nearly all coconut oil and some butter and meat fat [grass fed only] My health seems much better even at 75.
In light of the above post, we have three main problems.
1. The continued belief in techno-magic, especially here in the west. The idea that cheap energy fueled technology will continue to deliver growth now that the era of cheap energy is over. This is a powerful delusion that western industrial society will resist to its last breath. The results won’t be and aren’t currently pretty.
2. In light of that, the idea that current population levels are in any way sustainable or desirable. In truth, they were only enabled by and for western industrial society to serve as cheap labor and consumers for the global wealth pump, whose true purpose is now revealed to be as nothing more than a means to transfer and concentrate wealth from the many to the few. Yes, global feudalism wrapped up in a pretty 20th-21st century wrapper.
3. What to do with all that excess population once we realize the truth of #1 and #2. The humane thing to do would be to redistribute the remaining wealth and resources and develop a plan to humanely and rationally reduce population levels very quickly. For obvious reasons, this won’t be and isn’t being done. What will and is as we speak being done, is that the wealthiest among us will develop plans to ensure that they have a life boat and that everyone of lesser status doesn’t. Will this work in the long term? Remains to be seen. Is this moral or right? Doesn’t really matter. The rational decision point for making these decisions was actually probably as far back as the turn of the 20th century. At this point, all of our most critical decisions are long since locked in.
This is why we keep going over and over the same old ground, futilely trying to imagine answers for questions that are no longer actually relevant. Collapse is imminent, and in many parts of the world already long begun. There will be no escaping any of its effects for anyone currently living, absent an early death from normal factors, which will, as always, kill many of us anyway. What’s the old saying? Life (and death) is what happens while you were busy making other plans. My advice, sit back and enjoy the ride, cause ain’t one damn thing any one of us can do about it.
From No Country for Old Men: Ellis: Whatcha got ain’t nothin new. This country’s hard on people, you can’t stop what’s coming, it ain’t all waiting on you. That’s vanity.
Ultimately our problem is a population problem. It is also a problem of not knowing how to live as hunter-gatherers, so we are not dependent on our current built infrastructure. I wish I saw a way out. We have a lot of media (including academic press) devoted to telling people what they want to hear. That contributes to the lack of information about how bad things really are.
Agreed. Kind of a Catch-22 really. You’ll never get a sizeable audience if you tell the truth, and if you get the sizeable audience, your message won’t be worth squat anyway, so what’s the point? I’m beyond feel good answers anymore myself. I think it’s high time we started telling ourselves the truth of our situation, and it definitely ain’t pretty. But then again, I’m getting older now too, so I think it becomes easier as you realize your own end ain’t all that far off anymore. When I was in my 20’s and 30’s I would have been as resistant as anyone else to the awful reality staring us in the face now.
Join the permaculture movement – they’re trying to figure out how to live in a world of energy descent. David Holmgren’s work is probably the best at thinking beyond the “growth/collapse” false dichotomy. Growth is a globalising phenomenon but depression is localising (as you discuss when you say global trade will decrease). Energy descent and economic dislocation will be experienced very differently at the local level. Some will collapse first, others later. Some will fall deeper than others. This means that there will be many losers but some will lose less than others.
We have some degree of influence over how much we lose. Permaculture ways of designing our lives can help us retain more of what we currently have and share it with those around us.
Thanks. I think that’s a start at least.
I’m fond of saying (correct or otherwise) that we have enough scientific/technological innovation to last the human ape species a lifetime or two. Most of the innovation since the 1950s-1990s have been what Joseph Schumpeter referred to as “incremental innovations” of past breakthrough discoveries and resulting technologies, e.g., steam engine, steel, telegraph, telephone, vacuum tube, transistor, radio, microelectronics, etc.
What is an imperative today are economic (organization, ownership, labor division, distribution, etc.), social, and political innovations to catch up to the cumulative technological innovations, of which permaculture could be perceived as an important innovation in this context.
One might also include, for the lack of a better word, “spiritual” innovation, or perhaps a “r-evolution of consciousness” that aligns human needs for a “good life” (redefined) symbiotically with the planet’s ecological system, abandoning the growth imperative, debt-based consumption, and financialization of existence, and providing incentives for, or imposing draconian restrictions on, reproduction. I’ll stop there before I really get into trouble. 🙂
Some people are in a better position to join the permaculture movement than others. It is primarily a movement for young people, with enough resources to buy land for gardening/farming, and enough money to put into supplies that will last for a while, but not for the long term–irrigation equipment, fences, shovels, wheelbarrows, plastic hoses, etc. Once the supplies and other things the permaculture people are depending on start giving way, they will have to quickly pull out Plan B.
Permaculture probably makes no sense in parts of the world where population is dense and individuals cannot buy land easily.
Yes, Gail, I suspect that you are correct about that.
I have personally spent a decade involved in permacultural study, education, activities, and limited advocacy in the PacNW, and, despite my reluctance to admit, I must concede its limited appeal and adoption to date.
http://steadystate.org/wp-content/uploads/Daly_SciAmerican_FullWorldEconomics(1).pdf
http://www.unice.fr/sg/resources/docs/Meadows-limits_summary.pdf
Perception of resource/ecological scale as a prohibitive cost and biophysical constraint to perpetual growth is largely unrecognized, or dismissed, in the context of what Herman Daly describes as economics of an “empty” versus our increasingly “full” world under conditions of Peak Oil and LTG.
How many $trillions has the US spent blowing up brown people? Imagine if the foundries and factories of the northeast had been turning out high quality hand farm tools instead of bombs and MRAPs. In the US alone 150 million people will have to return to the land. The trouble is few want to prepare for the end of fossil fueled civilization. The time to prepare is now while BAU still exist.
The Americas have enough land for it’s one billion people to grow their own food. The EU could if Russia plays nice but where are all those hungry Chinese going to go?. Refugees from north Africa will be a problem. Most in Africa and Asia are doomed without commercial farming.
“The trouble is few want to prepare for the end of fossil fueled civilization. ”
It seems a growing number of 25-35 year olds are doing exactly that. I wouldn’t expect too many 50 year old professionals to suddenly go Green Acres.
There is never ‘enough’ — we must kill and pillage — or be killed and pillaged.
I reckon the permaculture option will fail for most if not all…
Are you likely to need to irrigate (remember – one short drought wipes out your food supply and you are dead) where will the water come from — does it require pumping… there will be no electricity…
How will you defend your patch from hungry neighbours — or outsiders….
We’ve heard it all from the back to the land-ers….
Is anyone planning to return to being a hunter gatherer? Brushing up on skills? Getting ready to toss BAU in the dumpster and head into the bush to truly live sustainably?
If you are able to do this I suspect you may have a fighting chance…
http://genealogyreligion.net/wp-content/uploads/2014/10/African-hunters.jpg
Finally! I have desperately been waiting for the conversation to shift from providing evidence that there is a problem and predicting how and when the problem will manifest, to what we, as individuals, can do to cushion ourselves. At this point, I don’t feel it is likely that society can avoid the problem. Like climate change, it’s happening.
Way back when The Oil Drum was around, I always liked Jason Bradford and Nate Hagens (among others) posts on what they were doing to prepare for a lower energy future. I haven’t really found a forum that discusses practical changes one can make while tempering the discussion with common sense. Most of the prepper crowd is bogged down with conspiracy theories and paranoia that I find hard to stomach.
On permaculture: It is interesting and definitely a better alternative to the agricultural status quo. Unfortunately, outside of a few niches, permaculture probably isn’t profitable in today’s agricultural climate. So we kind of have a catch-22 situation. I do think there are some niche production models that do work in a permaculture system (pork production may be doable, ruminant grazing is definitely doable) and am exploring some of them on my farm.
But I’m just glad to see someone mention an approach that can be taken on an individual scale. Hope to see more of it here in the future.
Permaculture ranges in scope and scale and even in how people percieve it. It has been practiced for milennia in various forms (of course, not under the name ‘Permaculture’). Granted, it would be pretty much impossible to implement in a desert without FF tech. But anywhere where you have a reasonable growing season and a stable source of water, permaculture can be practiced indefinately, long after any semblence of our industrial culture has decayed into history.
The FF Tech just makes it ‘easier’ and takes away from work people could be doing (carrying water) and the joy they could be experiencing working with nature.
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Will you be tough enough, when the collapse come? Turf wars:
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http://www.ft.com/intl/fastft/374201/jaguar-land-rover-chooses-slovakia-new-plant
I will not wonder, if the the Slovak government investment incentives are multiplied by some factor (some say that the factor will be “3”) per one created job in comparision with the previous car makers that came to Slovakia. This is called “diminishing returns”.
Furthemore, in the world of the economic implosion, when one factory gets higher incentives than the previous factory, then the new factory destroys the old factory. In the end, we have a theatre of a robust automotive sector with cheaper foreign workers and no contribution to the local economy via taxes etc.
Anyway, I presume, that the factory will be stuffed with even higher numbers of robots…
It is harder to know whether this “solution” is less bad than outsourcing to Africa at wages of $21 dollars a month.
The economic “pump” does not run with such small wage inputs.
One Slovak journalist (Dag Danis: http://hn.hnonline.sk/autor/dag-danis-8630) commented the decision of another car maker in Slovakia this way:
http://tv.hnonline.sk/porota-35706/dag-danis-by-chcel-byt-automobilka-pozrite-si-porotu-879531
His words freely translated: “I have found out that, in the next life, I would like to be an automobile factory: the goverment buys me the building ground, builds the factory, pays my employees and, finally, via scrappage program, buys also my customers.”
This is not business, this is more and more a theatre of an industrial civilization: you buy plot, build the building of the theatre, find and pay actors and give people some cash + loans, so that they can buy the ticket for this theatre…
Reblogged this on Southern Energy and Resilience and commented:
Another great piece from Gail Tverberg, particularly important when it comes to understanding the depressed commodity prices affecting the NZ economy and other export dependent nations globally:
Our economy is like a pump that works increasingly slowly over time, as diminishing returns and other adverse influences affect its operation. Eventually, it is likely to stop.
As nearly as I can tell, the way economic growth occurs (and stops taking place) is as summarized in Figure 3.
Figure 3. Overview of our economic predicament
As long as (a) energy and other resources are cheap, (2) debt is readily available, and (3) “overhead” in the form of payments for government services, business overhead, and interest payments on debt are low, the pump can continue working as normal. As various parts of the pump “gum up,” the economic growth pump slows down. It is likely to eventually stop, once it becomes too difficult to repay debt with interest with the meager level of economic growth achieved.
Commodity prices are also likely to drop too low. This happens because the wages of workers drop so low that they cannot afford to buy expensive products such as cars and new homes. Growing purchases of products such as these are a big part of what keep the economic pump operating.
Thanks! An awfully lot of people don’t want to believe a story like this. It is more comforting to believe that prices will rise higher and higher, our economy will stay together endlessly, and the high prices will enable renewables. Unfortunately, this is a bunch of nonsense.
the Chinese economy is growing between about 4% and 7% a year. That’s not exactly a small gap, and the truth matters enormously for China, Asia, and beyond. The country has a ballooning debt issue that will be much harder to deal with if growth is slow.
Bank of America Merrill Lynch global economist Gustavo Reis and his team sent out a note over the weekend discussing just how much Chinese growth was slowing by several measures.
One of the measures they’ve looked at is an analyst favourite: the Li Keqiang Index (LKI). Back in 2007, Li reportedly told a US ambassador he personally looked at the economy with an index made up of three parts: electricity production, rail traffic, and lending
Read more: http://uk.businessinsider.com/why-nobody-believes-chinas-growth-figures-and-the-truth-could-be-much-worse-2015-8#ixzz3iUigKCKI
Is China’s Growth Miracle Over?Is China’s Growth Miracle Over?
Figure 3
Will China follow Japan and South Korea?
Will China follow Japan and South Korea?
Source: Penn World Tables, IMF. Curved line shows fitted trend.
China had a real GDP per capita of about $2,000 in the 1980s, which rose steadily to about $5,000 in the 2000s and to over $10,000 in 2014. If China continues to grow at a rate of 6 or 7%, it could move into high-income status in the not-so-distant future. However, if China’s experience mirrors that of its neighbors, it could slow to about 3% average growth by the 2020s, when its per capita income is expected to rise to about $25,000.
This may appear to be quite a pessimistic scenario for China, but China’s long-term growth prospects are challenged by a number of structural imbalances. These include financial repression, the lack of a social safety net, an export-oriented growth strategy, and capital account restrictions, all of which contributed to excessively high domestic savings and trade imbalances. According to the National Bureau of Statistics of China, the household saving rate increased from 15% in 1990 to over 30% in 2014. High savings have boosted domestic investment, but allocations of credit and capital remain highly inefficient. The banking sector is largely state-controlled, and bank loans disproportionately favor state-owned enterprises (SOEs) at the expense of more productive private firms. According to one estimate, the misallocation of capital has significantly depressed productivity in China. If efficiency of capital allocations could be improved to a level similar to that in the United States, then China’s total factor productivity could be increased 30–50% (Hsieh and Klenow 2009).
To address structural imbalances and thus achieve sustainable long-term growth, the Chinese government announced a blueprint of economic reforms at the Third Plenum in November 2013. The proposed reforms include (1) financial sector reforms—liberalizing interest rates, establishing deposit insurance, and strengthening financial supervision and regulation; (2) fiscal reforms—strengthening social safety nets, introducing more efficient and redistributive taxes, and improving health insurance and pension coverage; (3) structural reforms—reforming the SOEs and the Hukou system and further opening up markets; and (4) external sector reforms—liberalizing the exchange rate and capital account controls.
If these reform blueprints can be successfully implemented, then China should be able to avoid the middle-income trap and sustain long-term growth at a reasonable pace. In the transition process, however, structural reforms may contribute to a slowdown in economic growth.
Growth prospects
China’s growth is expected to slow further in the coming years. The International Monetary Fund (IMF) forecasts that growth will be about 6.8% for 2015. With an aging population, slowing productivity growth, and the policy adjustments required to implement structural reforms, growth is projected to slow further to 6.3% in 2016 and 6% by 2017.
Despite the slowdown, there are several reasons for optimism. First, China’s existing allocations of capital and labor leave a lot of room to improve efficiency. If the proposals for financial liberalization and fiscal and labor market reforms can be successfully put in place, improved resource allocations could provide a much-needed boost to productivity. Second, China’s technology is still far behind advanced countries’. According to the Penn World Tables, China’s total factor productivity remains about 40% of the U.S. level. If trade policies such as exchange rate pegs and capital controls are liberalized—as intended in the reform blueprints—then China could boost its productivity through catching up with the world technology frontier. Third, China is a large country, with highly uneven regional development. While the coastal area has been growing rapidly in the past 35 years, its interior region has lagged. As policy focus shifts to interior region development, growth in the less-developed regions should accelerate. With the high-speed rails, airports, and highways already built in the past few years, China has paved the way for this development. As the interior area catches up with the coastal region, convergence within the country should also help boost China’s overall growth (Malkin and Spiegel 2012).
Continued robust growth in China would be beneficial for the global economy as well. China’s market for U.S. exports has grown steadily from 4% in 2004 to over 7% in 2014. According to an IMF estimate, China contributed about one-third of the world’s growth in 2013.
Conclusion
China’s growth miracle since the early 1980s has significantly raised the standards of living in China. It has also made China an increasingly important contributor to world economic growth and a large and growing market for U.S. exports. The rapid growth was driven primarily by productivity gains and capital investment. The recent growth slowdown has raised the concern that China’s growth miracle could be ending.
However, if the structural reform plans from China’s Third Plenum can be successfully implemented, then the recent slowdown could be a smooth transition rather than a hard landing. This gives a reason for optimism that China will avoid the middle-income trap and follow the paths of Japan and South Korea to achieve high-income status.
Zheng Liu is a senior research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco.
References
Eichengreen, Barry, Donghyun Park, and Kwanho Shin. 2012. “When Fast Growing Economies Slow Down: International Evidence and Implications for China.” Asian Economic Papers 11(1, February), pp. 42–87.
Feenstra, Robert C., Robert Inklaar, and Marcel P. Timmer. 2015. “The Next Generation of the Penn World Table.” American Economic Review (forthcoming).
Hsieh, Chang-Tai, and Peter J. Klenow. 2009. “Misallocation and Manufacturing TFP in China and India.” Quarterly Journal of Economics 124(4), pp. 1,403–1,448.
Malkin, Israel, and Mark M. Spiegel. 2012. “Is China Due for a Slowdown?” FRBSF Economic Letter 2012-31 (October 15). http://www.frbsf.org/economic-research/publications/economic-letter/2012/october/is-china-due-for-a-slowdown/
Wong, Christine. 2011. “The Fiscal Stimulus Programme and Public Governance Issues in China.” OECD Journal on Budgeting 2011(3). http://www.oecd.org/gov/budgeting/Public%20Governance%20Issues%20in%20China.pdf
http://www.frbsf.org/economic-research/publications/economic-letter/2015/august/china-economic-growth-miracle-slowdown/
China’s ‘growth’ in recent years is a result of massive debt-fueled stimulus projects that are returning 0 — and the expected convulsions are starting…
See David Stockman on this
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
Does this China won’t have a smooth landing and their transition won’t happen?
This is an artistic representation of what awaits China:
http://static.businessinsider.com/image/53c8018e6da811b747037e12/image.jpg
I have a hard time getting his videos to play. I am not certain why. It has happened before, too. Macintosh incompatibility?
Try here http://www.zerohedge.com/news/2015-08-07/tops-david-stockman-warns-epochal-deflation
Gotta respect Stockman for having the cajones to stand up to Reagan and tell him his tax cut program was nuts. Something even Reagan himself came to realize before he left office.
This information about China is a little confusing the way you have copied it in.
There are basically two links. One is a Business Insider post, with two charts showing that current GDP may very well be overstated.
http://uk.businessinsider.com/why-nobody-believes-chinas-growth-figures-and-the-truth-could-be-much-worse-2015-8#ixzz3iUigKCKI
The other is an article published by the Federal Reserve Bank of San Francisco called, “Is China’s Growth Miracle Over?”
It points out that other countries that have grown rapidly in the past slowed down after several years.
This information is actually in the material you copied in–it is just a little hard to find it.
worldwide competition promotes equalization of wages somewhere in the middle. The true situation, Greider argues, is worse: Competition is pulling everyone down.
The core problem, as Greider sees it, is global overproduction. Factories become bigger to benefit from economies of scale, and production spreads around the world as business tries to diversify across borders, protecting itself from political and economic shocks. Productive capacity thus expands, with each producer assuming that others will fail, making room in the market. On a larger scale, each country tries to run a trade surplus with others, selling products that cannot be sold domestically and refusing to buy the products of others.
In the face of market gluts, producers see their sales and profit margins fall. Rather than cut production, thus idling expensive machinery and factories, they choose to expand even more in an attempt to further exploit economies of scale. They hope to lower costs and prices, thus recapturing market share. On a global scale, this strategy cannot succeed; someone must “lose” and exit the market.
Such losses impose obvious grave economic costs, and such costs prompt action in the political arena. Politicians do not idly sit by while jobs are lost to other countries or …
Or they devalue their currency so the other guy becomes the buyer of last resort
http://www.enotes.com/topics/one-world-ready-not
China’s reported growth is pure fiction. See my post above.
Real potential GDP per capita for China is ~0% hereafter, as has been the case for the US, EZ, and Japan since 2007, and for the US from 1930 to before WW II (and not until after WW II if accounting only for private economic activity), and the 1890s.
China’s real GDP per capita in the late 2000s reached that of the US in 1930, the UK in the 1950s, France and Germany in the 1960s, and Japan in the late 1960s. Since then, China grew credit and money supply at a Banana republic-like compounding doubling time of 3 1/2 to 5 years to build out dozens of Potemkin Village-like ghost cities and connecting transportation infrastructure.
China’s credit and fixed investment bubbles as a share of GDP are the largest in world history, surpassing by far that of Japan in the 1980s and the US since the 1990s-2000s. What we are witnessing are the emerging signs of an incipient debt-deflationary implosion in China, not unlike that of the early 1930s; it was precipitated in part by US and Japanese FDI and supranational corporations and expats voting with their feet to bolt the Middle Kingdom as long ago as 2013 while the gettin’ was good.
Also, there are way too many would-be workers for jobs. With excess supply, corporations don’t have to offer a very high wage.
Right, Gail.
In the US, labor share of GDP is at, or near, a record low for the post-WW II period, with real purchasing power after tax, debt service, and out-of-pocket health care costs exhibiting no growth for the bottom 90%+ of households. The low labor share and no growth of discretionary labor income is a structural drag on productivity, and thus on investment, production, employment, and the necessary capital formation for future economic and wealth-creating activity.
The decelerating rate of productivity along with with little or no growth of the labor force and with high debt to wages and GDP only reinforces firms’ imperative to reduce costs further with top line revenue growing at just 2-3% (and not at all for some sectors), resulting in ongoing automation of paid labor, exacerbating the condition.
All the while, the low- or no-productivity sectors, e.g., gov’t, health care, education, retail, and financial services, maintain their share of GDP, becoming increasingly costly to the rest of the economy, further constraining real growth per capita.
But the foregoing is largely unheard of among academic eCONomists, financial media pundits and influentials, and politicians for obvious reasons, as a full treatment of the topics would encourage scrutiny of policies, assumptions, values, and the system of incentives and rewards that disproportionately benefits rentier financialization and the top 0.001-1%.
It’s an unfortunate situation for the vast majority of us.
Thanks! I think of government, health care, education, retail and financial services as being similar to overhead. They keep growing, making it harder for the rest of the economy to support them.
Don’t lose sight that we are nations and societies, not economies. The listed items are more important than overheads although political decisions can badly affect them to the point of malfunction. This is what its like today as the elite try to strip them down to nothing, when the whole health of the nation depends on keeping them going.
Here’s what David Stockman says about China;
It’s quite a serve!
http://davidstockmanscontracorner.com/the-great-china-ponzi-an-economic-and-financial-trainwreck-which-will-rattle-the-world/
That is a good article. David Stockman doesn’t seem to understand how the limits of a finite world interact with the whole situation, but otherwise, he sees the problem.
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http://www.bloomberg.com/news/features/2015-08-05/inside-shell-s-extreme-plan-to-drill-for-oil-in-the-arctic
Interesting in depth article on Shell’s offshore rig in the Arctic. Here’s to hoping they come up snake eyes.
Regardless of what they come up with, they cannot extract it profitably without a lot higher oil prices.
Cold Fusion will save us.
Don’t miss the latest podcast with Nicole Foss & Raul Ilargi Meijer. More on China, Greece, Inflation, Deflation and Extinction too!
http://www.doomsteaddiner.net/blog/2015/08/08/tshtf-podcast-with-nicole-foss-raul-ilargi-meijer-re/
RE
Even if cold fusion were to work, it would just enabled the same old show to go on for a little while longer, which has been the historical pattern since fossil fuel based cheap energy first came on line. There is no cure for what ails us, which is essentially a techno-cancer of the soul. Homo Sapiens has become a malignant and virulent species. We’ve imagined that we can subjugate nature to our materialist whims, and instead we’ve merely sown the seeds of our own destruction. As the Archdruid admonishes, better to collapse now and avoid the rush.
“Cold Fusion will save us.” LOL
Twenty years ago, economy worked with much lower prices for commodities. (oil 20$ for example)
Why today can not?
Thanks in advance. It is a serious question.
If there are supplier of major quantities of oil at $20 per barrel then yes we are fine. Can you name four producers that can produce at this cost and deliver 90 million barrels per day?
Ok, Thanks.
I suppose, I can´t.
Also operate their governments, with the taxes that they would get at $20 per barrel.
20 years ago the dollar had more purchasing power (what Buffet demands from every investment) than it does now, say half as much now and that is being very conservative (see http://www.measuringworth.com/uscompare/). IF oil companies need $100 per barrel to be out of the red then the dollar’s worth should be 80% less.
The reason I’m posting this is that we forget to think about the value and focus on the price. We have to include the inflation from printing a whole lot of money because 2015 is NOT 1995.
The end result is the Gov gets far less in purchasing power in its revenues just because of that fact alone. Hence bankrupt municipalities, etc…
The issue is “diminishing returns.” We started by extracting the cheapest to extract oil first. Then we gradually moved on to more expensive to extract oil. This is a big part of our problem–we mostly don’t have cheap to extract oil left.
In some cases, such as Saudi Arabia, oil can still be extracted fairly cheaply. The problem is that oil is a very major source of tax revenue, if it can be sold at a high price so that there is a “gap” between the price it is sold for and the cost of extraction. (The government gets nearly all of this “profit” as taxes.) The taxes that Saudi Arabia and other oil exporting countries get are used for government programs so that their population can have imported food and many other programs. Without these taxes, the populations would likely die. The area is not suitable for farming, and not a lot of jobs are available. Thus Saudi Arabia and other oil exporters are just as dependent on high prices as those countries that have high oil extraction costs.
Thank you very much. I suppose that population growth is a point, too…
Marginal oil production costs are heading towards $100/barrel http://ftalphaville.ft.com/2012/05/02/983171/marginal-oil-production-costs-are-heading-towards-100barrel/
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
“This is a major departure from historical trends. Such a shortfall typically happens only in or just after recessions. For it to occur five years into an economic expansion points to a deep structural malaise. ”
FE, from the Kopits article is the above quote regarding the damaging fiscal situation of oil companies, including the majors. I’m wondering if the deep structural malaise referred to is the result of desperate fiscal policies like QE & Zirp. Meaning it’s only those most benefitting from QE & Zirp (the super wealthy) that are skewing the GDP numbers to appear like growth, when in reality it is actually a recession for the rest of the populace.
My understanding is low commodity prices do not induce a recession, but often indicate a recession. So maybe we are in a recession, it’s just that these inflated, phony, printed money juiced numbers are masking it as BAU.
I think that there may be some out and out fudging of GDP numbers as well. How many of us believe that China’s economy is expanding at nearly 7% per year?
It is better to use proxies. Then it’s only around 4%
1. The volume of freight being shipped on China’s roads, railways, inland waterways and by air. These function as a broad measure of activity across the economy;
2. Electricity output to capture industrial activity;
3. The area of floor space currently under construction to cover the real estate sector
4. The number of passengers travelling by rail, road, water and air. This covers both business travel and tourism. We take it as a proxy for service sector activity, although admittedly we have reservations over how well it does this job;
5. Cargo volumes at seaports, reflecting international trade flows
https://twitter.com/capeconchina/status/613493507844497408
mushalik, correct.
Note also that China’s labor force has been contracting for three years running with private mfg. PMI data showing contraction, exports contracting, stock and real estate prices falling, electricity consumption at less than 2% YoY, M0 at less than 3% YoY, M1 at less than 5% (total money supply is ~200% of GDP), and wages and consumer spending (35% of GDP) at 10%.
Backing into productivity, then, it’s no more than ~1% and population growth at 0.5%.
Aggregate these data and the potential real GDP per capita for China is close to 0%, which is the post-2007 average trend rate for the US, EZ, and Japan.
I make the case that China is not growing or is actually in recession if import prices, depreciation, and inventories were accurately accounted for.
You may very well be correct.
Yes, China’s growth rate is only at 4%, and may be going lower. I think that is a big part of what is behind the world slow-down in commodity use. No one else is taking up the slack.
Well, you’re only dealing with half of the equation, though. The other half is the ever-increasing efficiency of production. Oil company production doesn’t remain static because they are constantly innovating and developing new technologies that allow for more efficient extraction and thus cheaper extraction. That is why we are not seeing a major bust in the shale oil industry, as was predicted by many on this site. It can probably go on this way for quite some time.
The reason shale has not blown apart yet is not because frackers are making money …. it is because they are being propped up by QE ZIRP cash.
The articles are posted were penned in the last two years — does anyone thing this has turned around and we are suddenly finding more cheap to extract oil?
Perhaps the costs may have been reduced slightly with new technology — but oil still needs to be near the 100 buck for anyone to make money — of course 100 buck oil crashes the economy…
On Brink Of Collapse, Fracking Giant Chesapeake Energy Slashed Royalties To Property Owners
http://www.huffingtonpost.com/2014/03/13/fracking-chesapeake-energy_n_4958845.html
http://uk.advfn.com/p.php?pid=staticchart&s=NY^CHK&t=37&p=5&dm=0&vol=0&width=360&height=208&min_pre=0&min_after=0
Once a ponzi scheme… always a ponzi scheme… (and never believe the BS in the MSM)
let’s try that image again
http://www.tickertech.net/pics/nasdaq/11439476984.gif
There are also things that oil companies to temporarily spike their production a bit, even if it is detrimental to long-term production. I think that is part of what we are seeing.
If inflation re-starts, it will be a disaster as central banks suddenly have to pay interest on all the bonds they are printing. It may be coming — keep reading.
In cities across the country, after a decade of decrease, crime is increasing. No one knows why, but no one knew why it decreased in the first place.
Every time the homicide rate goes up or down, we all cast about for causes. The usual suspects, the economy, policing, and number of prisoners, do not work out. The changes are usually national, while policing and prison policies differ over the country. Crime rates were low in the Depression, are low now, in our deep recession and were high during the prosperous 80’s.
The historian David Hackett Fischer, in his book “The Great Wave” using over 700 years of British records shows that the homicide rate and inflation are closely correlated. High inflation, high crime, low inflation low crime. It certainly holds for in the last century . Fisher himself concedes that correlation is not causation, but it rules out the usual explanations.
If this correlation still holds, the up in crime may be a harbinger of inflation
Wow, crime increase implies inflation implies crash of all world governments.
It really necessitates getting Governments to formulate management plans and have them “shovel ready”.
No. Crime is CORRELATED with inflation. BFD. Statistics 101.
A lot of people think that higher consumer prices, WITHOUT a corresponding increase in money supply is inflation. Personally I think they are not thinking correctly. I suppose one has to define what they expect inflation actually is, then argue from there.
Hi inflation kicked off the revolts in the Arab world a few years ago…
It also was the main cause of the Tiananmen Square uprisings….
When poor people cannot afford to put food on the table they are prone to intense displays of anger.
I really don’t think that inflation will restart on a world-wide basis. Our problem is a slowing economic pump. A slowing pump tends to make prices drop, and to cause debt defaults.
With deflation, we need negative interest rates. These don’t work well at all.
Yes, I think you’re right. We are going out with a whimper instead of a bang. Inflation can typically only increase in a growing economy not a contracting economy.
I don’t know if it was your intention, but my take on this article is that “Our Finite World” is about the establishment rather than the energy metaphor.
The last item in fig1 states that the financial system ties everything together when it is well known by most that they do the opposite: they syphon most the resource out of the loop hence the income inequality around the world, even in developed societies these days.
Right below that you state that we live in a networked economy and I vehemently disagree: the system is rigged as SEGREGATED AND UNEQUAL to the breaking point as of this date, rendering all this concentrated wealth unsustainable. The problem is not the lack of money but the way it has been distributed: if a peasant anywhere in the world is fairly paid for his work, there would be demand and affordability for energy but, then we have all this big corporations shamelessly outsourcing good jobs to places where indentured servitude is well and alive in detriment of cash strapped, well regulated job markets.
These situations make your title ring ambiguous since the HUMAM race has a way of wiggling itself out of tight spots. I don’t believe the globe has reached its peak in energy demand nor has the price of energy been settled when billions of people have yet to be introduced to ENERGY itself, it sounds awkward when you consider it, doesn’t it?
So I am going to read this article as a well crafted piece of dissent against the establishment. 😉
I am by no means a defender of the establishment but I don’t think it’s as clear as you make it out to be.
Basically every place in this world, at every level, is hopelessly corrupt. I just don’t buy this idea of the honest, hard-working third world peasant who is taken advantage of. We long ago abandoned any honesty in the economy. It’s all about who gets how much of the pie. The third world doesn’t get as much because they breed, they don’t develop sound institutions, and their leaders are corrupted by the endless flow of dollars and weapons. Without this flow they have no economy, they would have to start again from the bottom up and who is going to help them? China?
If the Middle East can’t modernize when they are swimming in oil, what makes you think they are going to do it without oil?
The big banks and corporations are just doing what comes naturally to them, which is to run off with as much as they possibly can before this whole thing implodes.
Had you interfaced with the peasantry of the third world you would know how they feel about high finances: all they want to have is “decent” housing, food, school and health care. It is that simple.
Corruption is the point of my comment, in the laws of physics what goes up, must come down in this earth. As corruption fueled global misery rises at the same rate as corruption itself, there is a breaking point, that is when people go out and take the Bastille.
You talk about the third world and Saudi Arabia as if they were not part of the equation. They are and they matter as we can see the EM economies struggling to stay afloat and pulling the rest of the world’s economies under with them.
This low-priced-oil crisis is a futile international play in order to force down the development of new fields in the world. Look at Russia with all that oil and gas and still cornered out of the global economy.
Third world people don’t breed, they are bread for cheap labor – give them electricity and a TV and see what happens. When given the option to lead themselves out of their hole, they will eventually find the way out:
– Europe, an old and outdated place in the turn of the XX century found its way out of it. It took two world wars to get their affairs in order but they did it.
– Japan, again outdated and old civilization. It took two atomic blasts to bring them out of their stupor, but they survived and thrive.
Saudi Arabia will do what it needs to do when it feels like it and US allows it to do so.
I hope we will not have to see a full scale war in the Arabian peninsula in order for them to get with the program, they have no option since IS is their brood and it is biting the hand that fed them.
The real problem with corruption are the enablers, as long as there are places such as Switzerland, HK, Singapore, etc, hiding and abetting blood money from the third world, there will be an “adventurer” willing to wreck their country for the “security” of commerce(commodities) with the powers of the day.
The point you make about the banks is where our opinions tange: their goal is to make as much of it as possible and run with it, as they did in 2008 on tax-payer’s dimes, but what impresses me is the fact that you or anyone rich or poor, would side with what they did.
Nah…. there is no such thing as the ‘noble savage’
The people in the Third World – given the chance — would do to us EXACTLY what we do to them….
Time to again review….
How the World Really Works
– The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will
– Resources are finite and therefore ownership is a zero sum game
– The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status
– Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources
– Competition has always existed (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations
– Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources
– Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.
– One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)
– As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)
– And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.
– Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koombaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.
– Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.
– But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.
– But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.
– Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.
– So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.
– They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)
– Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.
– Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I
– In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.
– Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….
– Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….
– As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them
– Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!
Timing, ok – Gerald Celente says the Pucker Factor is asymptotic to Infinity by the end of the year!
http://kingworldnews.com/gerald-celente-just-predicted-a-global-stock-market-crash-and-gave-the-exact-time-frame/
The China markets were crashing — but the PBOC — as they promised — did ‘whatever it takes’ to stop the crash …
So far they have succeeded by:
– threatening to jail short-sellers
– restricting funds including pensions from selling
– giving money to various money managers on the condition they buy and hold stocks
Given the central banks have the capacity to print literally unlimited amounts of cash — which they can use to buy up the entire market if necessary — and they have demonstrated their willingness to do this…
I am not sure how we get a stock market crash…. by all measures the stock markets across the world should be imploding already….
Something will collapse that is a given…. but I reckon the stock markets will be hitting new highs — just as turmoil envelopes the world…
Bad news is good news — it means the stimulus will come faster and more furious — as the central banks try to prop up the market to the bitter end
Raising interest rates seems like one of the more stupid things that the Federal Reserve could do.
My original comment was based on my take on the article, where I read that there is something coming to an end and I read it to be the System of Things we currently live in and that I don’t see a energy peak any time soon when half of the globe is still in need of it. I am not a dreamer, I understand the laws of nature and even mentioned one of them.
As history shows, human kind only took off when they learned that a tribal, agricultural community was better than a troupe of hunters/gatherers’ model they were used to, so they put an end to that SYSTEM of THINGS. So don’t put it behind man-kind’s ability to seat down and reorganize. Another historical point that pokes a whole in your argument: the Romans brought with them all the comforts they had in Rome to all their vassal conquests, hence the length of its hegemony – the PTB should take notice of that. Things went south when local lords became greedy, as they are these days, fueled by a blood-thirsty armament industry. Historically we have witnessed the rise and demise of powerful nations because human kind has yet to evolve into a human nation as opposed to a myriad of countries we have now. Historically we have been pounding each other off the pinnacle and now is time to wake up and pay attention to OUR reality. The world is totally connected these days, China’s market deeps, it affects everyone where it wouldn’t a couple of decades ago. This is the Coombaya you mentioned: if we don’t seat and agree to grow together we must take the option, we fall together.
Third world countries are neither willing to dominate nor to be dominated. Notice they are forming blocks to fend off American hegemony in all fields. We have EU, BRICS, OPEC, Asian Alliance, etc. None of these are in any way belligerent towards US,they are a reflection of the reality of human affairs: we need to be able to disagree without war, HUMAN kind is better off in a peaceful place.
I do understand your cynicism, but I see the breaking point ahead of us: US lead invasion of Iraq ended the “moral” equity that US had built during the past century’s WW. Iraq war was LIVE on CNN and the graphic pics of the theater in the internet was a blow to the war mongers as fewer people want to be involved in war in US, but Fox News. It is fine that the Arabic Spring sprung a few localized wars, it is their problem since US/EU are not relying on their resources for the moment and that goes to my previous point that this low-price-oil crisis is a manufactured crisis to bring down the price of oil and defuse these conflicts around the world, Ukraine is an example of it: a puppet president is denied power by the Russians alert of the implications of it on their borders. Russians are not willing to have another war in their homeland, they rather fight it in Ukraine at the expense of their oil
& gas industry. How long will Europe and Japan be able to keep up with US sanctions on Russian imported energy and domestic market as they see their Russian’s market share dwindling to other non allied powers? Europeans will not be paying more for the energy nor will they stand see their crops go to waste for much long for the sake of US foreign policy. It is one thing to blockade England as Napoleon tried unsuccessfully or Cuba, what turned out to be a waste of time, blockading Russia is just futile attempt to reign in Putin.
There is a better way of managing global economy and its deployment is inevitable, people are questioning these arrangements made by the PTB about their future and they are declining PTB’s opinion. North Korea and Pakistan are the extremes of this new reality. Iran is trying to get back in the fold by agreeing to let go of some of their sovereignty. Sudan is building a dam in the Nile despite UK’s “determined” options given to them – nobody is allowed to dam the Nile but Egypt .
Your cynicism is in conflict with your first statement on your first comment: you are a defender of the establishment, boldly exposed by your second comment, such position makes you a reactionary facist, not a bad person.
“So don’t put it behind man-kind’s ability to seat down and reorganize.”
Yes – instead of individuals fighting one another — or small groups — humans organized into larger and larger groups and fought each other. Eventually they organized into massive groups (countries) and conducted industrial massacres.
“Romans brought with them all the comforts they had in Rome to all their vassal conquests”
Terrorism in the Ancient Roman World http://www.historynet.com/terrorism-in-the-ancient-roman-world.htm
Can’t be bothered to read any further (I recommend you space out your sentences to make them readable…)
I can’t remember if I already posted this — you can call it cynicism if you like…
I call this poem ‘WISDOM’
– The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will
– Resources are finite and therefore ownership is a zero sum game
– The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status
– Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources
– Competition has always existed (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations
– Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources
– Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.
– One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)
– As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)
– And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.
– Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koombaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.
– Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.
– But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.
– But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.
– Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.
– So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.
– They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)
– Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.
– Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I
– In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.
– Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….
– Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….
– As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them
– Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!
Not to start a war But you said
Third world countries are neither willing to dominate nor to be dominated. Notice they are forming blocks to fend off American hegemony in all fields. We have EU, BRICS, OPEC, Asian Alliance, etc. None of these are in any way belligerent towards US,they are a reflection of the reality of human affairs: we need to be able to disagree without war, HUMAN kind is better off in a peaceful place.
That does not sound like the Third world to me.
That being said the EU is being invaded quietly as we speak…I doubt it will end well.
The Western countries are experiencing a quite invasion aided by secret and not so secret 5th columnist. The invaders of the US claim that they invaded first and we should give way but Africans and Arabs claiming rights to England and Sweden? With their higher birthrate the Hispanics will simply populate themselves into control of the county. England and Scandinavia will go the same way unless they take steps soon.
“With their higher birthrate the Hispanics will simply populate themselves into control of the county.”
This is an ancient line. Benjamin Franklin used it against German immigration. Since then it has been used against the Irish, Italians, and Jewish immigrants. 50 years from now descendents of today’s Mexican immigrants will be using this line against the latest newcomers.
You expect America to have a population > 1 billion within 50 years? I think < 100 million in 50 years is a more likely outcome.
My money is on ZERO population within 5 years.
https://upload.wikimedia.org/wikipedia/commons/2/2b/Nuclear_waste_locations_USA.jpg
Looks like they managed to put spent fuel rods everywhere except the Badlands, with their lightning strike induced underground fires. It would be difficult to intentionally endanger more landmass than this. Still, the Babushkas of Chernobyl show us that adults can survive a long time in an irradiated wasteland.
Much worse than Chernobyl…
A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel.
To estimate the Cs-137 inventory in the pool, for example, we assume the Cs137 inventory at shutdown is about 0.1 MCi/tU with a burn-up of 50,000 MWt-day/tU, thus the pool with 400 t of ten year old SNF would hold about 33 MCi Cs-137. [7]
Assuming a 50-100% Cs137 release during a spent fuel fire, [8] the consequence of the Cs-137 exceed those of the Chernobyl accident 8-17 times (2MCi release from Chernobyl).
Based on the wedge model, the contaminated land areas can be estimated. [9] For example, for a scenario of a 50% Cs-137 release from a 400 t SNF pool, about 95,000 km² (as far as 1,350 km) would be contaminated above 15 Ci/km² (as compared to 10,000 km² contaminated area above 15 Ci/km² at Chernobyl).
http://belfercenter.hks.harvard.edu/publication/364/radiological_terrorism.html
I would also note that the above assumes a terrorist attack — while BAU is fully functional — which assumes the explosion could be contained…
There will be no BAU — there will be no way to contain the impact — each of these ponds will be spewing like a Chernobyl chimney for decades… spent fuel pond fires — unlike normal fires — do not burn out their fuel for a very very long time
The Americas refers to all the land from northern most Canada to the southern tip of Argentina. According to Wikipieda the population of this area is almost 1 billion. A night time photo will show vast areas of darkness. Plenty of room to look for food.
Are you trolling?
When someone says “Mexico”, everyone clearly understands they mean the United States of Mexico. When a person says “America”, as opposed to “The Americas”, which are two clearly distinctive things, everyone clearly understands America refers to the United States of America. Just in case English is not your first language, and you were legitimately confusing the two.
I am a native English speaker but I have insomnia and post a lot at 2:00 AM. I think was trying to say that the one billion people in the Americas will be more able to support themselves without full BAU and then I though someone said I was saying one billion people in the US. Maybe the testosterone treatments I’ve started will clear my head up.
Try simply waltzing into Mexico, those machine guns you see are loaded. When the border shifts north they will guard that too. Unlike some people they are going to defend what they think is theirs.
“– One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)
– As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)”
I am going to take a swing at this non-sense: European hegemony was established in Americas due to their weaknesses: their diseased sailors’ maladies wiped out the hemisphere’s native populations. Europeans sent their prisoners and whores, not their finest.
Being resistant to diseases that other people are not, is a weakness? If so, I’d hate to see what you consider strengths!
The stories we tell ourselves about mankind’s inherent goodness are indeed nonsense. No matter how much is done to refine the exterior, a selfish beast lurks inside each and every one of us. We should use current conditions to regularly override this cruel nature……because grid failure permanently disables that option.
Natural selection is the way of the world. That means that inevitably, not all will survive. Somehow, each of us tries to ensure our own survival. This is relatively easy when there are lots of fossil fuels–not so much otherwise.
You’re in top form here Fast Eddy!
Through enough comments out there (tens of thousands…) — and a few are likely to stick 🙂
You say: – “But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.”
Thank you for the direct, hard and truthful words. But E.O.Wilson writes that we are between the two behaviors: the egoistic and the altruistic one. If we choose only the egoistic, we will not survive.
Our inherited nature and our cultures has given to us the both. Nobody can deny that chimpanzees do care one for another. And nobody can deny that we, people, get satisfaction for caring for others. Imants Vilks
Do you mean this is an antidote to the regurgitated edicts that are published by the MSM?
If so – I agree — this article and all articles on this site seek the truth — while the ‘establishment’s’ outlets publish endless lies so that the sheeple do not realize civilization is about to end — and panic
Sorry meant throw – not through
I don’t think the fact that this is a networked economy says anything at all about how resources are allocated between the rich and poor. It just says that price signals help determine what resources are extracted and what goods are made. Government laws and the total amounts of goods and services made have a lot to do with allocation of these goods and services.
The Russian embargo has shifted the deployment of European agri-peccuary dependence biz to South America, oil is being diverted to China. That is an example of how less dependent countries are of the PTB. Is it only I that see a rupture on the System? Things are not happening as planed: Ukraine crisis and Arab Spring gone terribly wrong. The only thing keeping this artificial situation (low oil prices) is fracking in US and the fact that Saudi Arabia can keep the prices down for a while as they were told.
AJ Almost the only thing. Don’t forget the major slow down in demand from China. Growth is below 7% for the first time in DECADES. Without demand for oil from China, prices will continue to fall.
Want to comment on the following:
”International trade is likely to become a problem because financial institutions are needed to provide debt-based financial guarantees for long-distance transactions.”
Loans are also often insured/guaranteed by some governmental agency (See also the EX-Im bank in the USA which is now closed. Also named Boeing bank).
Japan stops guaranteed loans for business with Venezuela. see
http://www.japantimes.co.jp/news/2015/07/13/business/japan-halt-trade-insurance-venezuela/#.Vckw4vnjCSd
Something is brewing. The Ex-IM bank was maybe closed for a reason.
Thanks! I haven’t seen the article you linked. I imagine that folks will not want to guarantee sales to Greece either, or to Puerto Rico. If there are big changes in monetary value, this could affect ability to pay, as well.
I know Lloyd’s of London many years ago provided a shipping guarantee, more or less rolled together with credit.
Gail, has any research been done on the minimum operational level of oil consumption at zero GDP growth?
10/8/2015
Europe oil consumption peaked 2005
http://crudeoilpeak.info/europe-oil-consumption-peaked-2005
I suppose that a person can sort of back into a calculation of minimum oil consumption for a given country, such as Sweden or Australia, at zero GDP growth.
For the world as a whole, the economy would very quickly implode at zero GDP growth, because it would not be able to repay debt with interest, and pay dividends to shareholders, and pay rising governmental costs, plus provide enough goods and services for the rising population. I don’t think we can talk about zero GDP growth as being possible without collapse, for any significant share of the world population.
Europe’s oil consumption peaked in 2005 because a lot of manufacturing was sent elsewhere.
Your have to pay old debt (energy already consumed) first (with new energy) before you can think of a zero GPD growth:
From Global Finance: https://www.gfmag.com/global-data/economic-data/public-debt-percentage-gdp
“Public debt is the total amount of money owed by the government to creditors. It is usually presented as a percent of gross domestic product (GDP). Because of the global financial crisis and the euro zone sovereign debt crisis, Advanced Economies have followed a particularly dangerous trajectory of indebtedness in recent years. Total debt for OECD countries was at 74.2% of total OECD GDP in 2007 and is now growing to 112.5% in 2014 (estimated). Individual countries within the OECD ranged in 2012 from a low of 14.5% of debt to GDP in Estonia to 224.3% in Japan”
“Public debt is the total amount of money owed by the government to creditors” is correct, but very misleading. It’s not actually debt because the money is held in t-securities and are effectively savings accounts. Both the debt and the asset sit together in the Fed accounts. Paying off the debt is simply a matter of reversing the original transaction. I’ve explained this earlier.
We have an almost fixed amount of goods and services to allocate among recipients. All of this hocus pocus doesn’t really change anything.
It’s very distant from “hocus pocus”. You are still mired in the false economic narrative pushed by mainstream economists. THAT is hocus pocus!
I have given plenty of links in earlier episodes of your blog, but if you want financial reality explained, I can do so again. If you believe taxation is used for federal government spending for example you are wrong but worse you are blind to the benefits of understanding that used the right way this knowledge can help ease the way down we all will face as the civilization collapses.
I think on this blog we are all in agreement that the end is nigh, so lets start with a correct understanding of where we are and what we can use to stop the rise of instant chaos with all the misery that will cause. A correct understanding of how money works is just one step, but it is a remarkably essential one. Not just you, but governments have to be made to understand just what they are able to do, and MMT lists the falsehoods driving the current models.
Your example of how resources are allocated in order to see how much money is left for pensions has the cart before the horse. It may be what you actually did, but the pot of money available is not defined by the tax revenue, which is what you would have had to base such calculations on.
I know I am on solid ground here. It’s simply what actually happens, not a theory which can be falsified.
Isn’t it really all debt that is a problem–in addition to diminishing returns in the extraction of water, oil coal, etc, plus growing population?
Thanks for the latest article!
Just limiting this piece to one item in a very full article. I am not in agreement with the comment on pensions. Pension costs will eventually affect the economy, but by that time the economy in dollar value will be declining for many reasons as set out in this blog.
For monetary sovereign governments paying or spending is not constrained except by political interference or by the total wealth of the relevant nation. Generally full employment means an economy doing well. Unemployment and underemployment is a drag on the economy, potential productivity lost. With pensions, the money still circulates within the economy, and probably a lot more than does spending by a wealthy elite. So Pensions are not a drag on the economy. Today in our consumer and debt /credit oriented economy the unproductive nature of pensions is hardly important as unproductive work is a great part of the world’s economies, aka Bullshit jobs, as David Graeber describes them. It’s an integral part of our civilization’s “end game”.
Paying pensions is EASY. The MS government simply has to credit the pensioners’ bank accounts with the amount chosen by the government. The amount is a net credit, not a liability. It is fiat money, thin air stuff, just like all bank loans are – except bank loans are a financial liability requiring repayment. There is no call on savings or tax revenue. It is completely independent.
The government can continue to pay pensions forever into the future regardless of the rising sum total.
It’s worth remembering this ability is inherent in today’s economies already and certainly since 1971. Nothing new here, except understanding [which is in very short supply!]
Understanding will show that pension funds, sovereign wealth funds [Norway] are completely irrelevant to the economy. A MS nation, like Norway – but not Germany in the EU – has no money saved. Why save when you can pay at any and every time? It’s a nonsense, like borrowing one’s own money. The funds are set up through rampant ignorance, but much loved by the banks, what with all the fees and charges and interest they get.
Our economies are all set up to suit banks. That needs to be understood.
Let’s talk about what really happens. I figured this out many years ago, when I learned about how Social Security actuaries analyze Social Security funding. They look at funding in terms of dividing up the goods and services produced (food to eat, gasoline, available rental properties) in a given year, say 2016. The Social Security actuaries figure out how many retirees will need to receive an income, compared to how many workers need to be paid. They also figure out how much more cheaply retirees can be expected to live than the workers. Then the calculation comes down to how much of the “pot” the retirees get vs. how much of the “pot” the workers get.
“Printing money” or “crediting bank accounts” only affects who gets what share of the “pot”. The size of the pot depends very much on the health of the economy–how many goods and services are being produced in total. If not much oil is available because of low price, it is likely that not very much goods and services will be produced in total. In my view, workers have to get first priority when payments are made. At a minimum, they need enough wages so that they can continue to do their work. If there is not enough left over for the retirees after the workers get paid, my guess is that the retirees will be left out. Retirement is a relatively new idea. Before the idea of retirement, people worked until they died.
I tried to point out that paper wealth is likely to disappear. This is one of the issues as well, especially in trying to fund private pension plans.
Interesting comment, Gail. You are coming at the same problem from a different position. But our results are much the same except you parse it more. I did say the ultimate limit was the total value of the economy and that includes unrealised value. I’ve only seen one graph showing this, from an Ellen Brown lecture [maybe you have more updated info?] and it went like this; USA 2006 figures; GDP, $12.98 T; National income $10.23 T; available purchasing power $9.21T. Potential GDP $14.75T. so, the difference between GDP and potential GDP at full employment;$1.77T; The difference between GDP and available purchasing power $3.77T and the difference between GDP and available purchasing power at full employment would be $5.54Trillion. These sums will vary YoY but there is plenty of room in the “pot” to pay both for workers a living wage and a sensible pension for retirees without excessive inflation. Not to do so is a political decision.
As time goes by and deflation takes hold we still morally cannot just abandon one cohort of the population [it’s a nation, not an economy]. The idea would be to maintain fiat payments to keep full employment [there are always plenty of jobs around -just ask local governments ]. The economy will decline in value and so there will be inflation as each dollar buys less and less, but relatively the system can be maintained until everything goes pear shaped.
John that is a forbidden thought “it’s a nation, not an economy”. The ruling class stomps out any expression of nationalism. The ruling class wants it to be only an economy so they can pull all the money/value out.
Yes, Ed Pell,
Do you remember when we were a nation of Citizens. Then somewhere in the 1970s we became a nation of Consumers. We were converted by the ruling class into economic units rather than political units. The word citizen conveys some responsibility to the nation and to our fellows. A consumer’s responsibility is only to consume in order to generate economic activity for the elites. I hear the phrase American consumer repeatedly in the news. When was the last time you heard the phrase American citizen. Listen for it in the upcoming presidential campaigns in the U.S. You won’t hear it.
BAU requires eternal growth — which means the hamster not only has to keep running — he must run faster — month after month — year after year….
And that means you and I must consume more — we must birth more human rodents
If we don’t BAU collapses — and we die.
That’s the distasteful reality of the situation.
“Before the idea of retirement, people worked until they died.” Gail this is one of your best lines ever and coming from an expert actuary worth remembering.
Working until one dies has its positive side. As long as the intensity of work is lowered it keeps people healthy and engaged socially.
“Before the idea of retirement, people worked until they died.”: we are returning to this again, e.g. according to the official statitics, 20 % of the Slovak retirees work in order to earn extra money.
I tried to point out that paper wealth is likely to disappear. This is one of the issues as well, especially in trying to fund private pension plans.
That pretty much says it all.
My pension is 10% .gov an 90% private.
The math does not work for the 10% and forget about the 90%
Renewables are an extension of the oil age but also represent greater complexity. Taintor wrote about how in an expanding economy ever higher levels of complexity are required to handle problems associated with expansion. In this case the problem it is supposedly helping is by reducing our carbon footprint from burning FF, CO2, a greenhouse gas. But it still takes the burning of FF to make renewables. Also, the economy has to grow, so how can there be a transition to renewables only? The sheer magnitude of FF burned daily is mountainous in volume and the economy must grow or collapse. So how is it possible to slip on in there and keep the economy growing on renewables without burning FF? It isn’t.
Something else that’s missing many people’s radar is renewables are expensive. My wife and I just had a Mitsubishi quad mini-split HVAC system installed in our home – not cheap. so we have some money, right, but we still are working our way up to financially justifying a solar system for our home, grid or off grid connected. In other words, it’s not something the non-elite workers can easily afford, at least not for a full system to support a 3 bedroom 2 bath house and or including an EV, including battery storage. The further we go down the net energy ladder, the fewer people that will be able to afford solar.
By the way, I asked a business that had a wind turbine installed if it was producing a lot of energy. He said, “No, but it will pay for itself eventually, maybe in 40 years.” So wind must be done on a very large scale to have any effectiveness and those costs get passed on to the consumer. Good luck charging ever higher utility bills in a world with diminishing returns.
You are right. People just don’t understand the problems. They assume prices have to keep going up and up, and somehow, “Renewables will save us.”
Wind turbines have a life time of aprox. 20 years.
I am no Einstein but gee If wind turbine life time is 20 years and payback is 40 years then Houston – we have a problem. 20 years is probably the limit of the lifetime of most of the things you could power with electricity anyway. Unless you have spare parts, these complex systems become useless. With so much junk that doesn’t last being produced I think the situation is even worse today than 30 years ago.
Number 4, last 2 paragraphs should be required reading for everyone especially the politicians. Young people affected in #6 are completely oblivious to the problem until they graduate with enormous debt and low job prospects. Calling Wind and Solar “energy sinks” is a valid comparison to the stimulative effects of low interest rates.
Your first line is sadly not true, a lot of people do not know how an economy works. Unfortunately some of these are in positions of power elected by an apparent majority.
The two paragraphs you are referring to are
Unfortunately, an awfully lot of people (including economists) never got farther than, “We pay each other’s wages.” Actually what happens is that adding energy products, or using energy products more efficiently, allows us to make more end products that can be shared by members of the economy. Using the resources we have less efficiently leads to fewer end products that can be shared by the members of the economy. The effect is recessionary, and standards of living go down. If people don’t understand how important cheap energy is for the economy, they miss this point.
Recycling is a huge resource hog.
I didn’t get to recycling in this post. I think we should ban subsidies to the recycling system. If it costs more to recycle than to produce new products, it doesn’t really get us anywhere. Cost is to a significant extent a measure of energy involved. The big problem with recycling is that it takes too much energy and other resources (including human labor) to recycle. Recycling looks like it would work, but in many cases it just raises costs.
What about re-using things like glass jars and bottles? That is recycling. If one could have a grocery store with bulk bins and one were to just keep refiling the same glass jar or bottle with goods then that would be a form of recycling that would work. However, there are probably jobs that would be lost in that process.
I agree though that recycling complex products like electronics is pointless. Plastic recycling is probably an energy looser as well. It does add jobs I suppose; which creates growth that keeps the hamster on the wheel.
Remember today a truckload of the best gold ore has up to 40 times less gold than a truckload of mobile phones.
Quite a few local councils have done the sums and worked out that long distance recycling uses up more resources than just burying it. They do recycling anyway, partly because disposal in most cases end up being a headache for them. But more so, they do it because the community would be outraged if it isn’t carried out. Having preached the benefits of recycling for decades the principle is now rock solidly in our culture.
Exactly! Even if it takes more energy and other resources to recycle than to bury waste, we do it anyhow.
You need to include in your analysis the environmental cost of not recycling in your new product costs. If the environmental cost is too great then may be the new product should not be allowed to be made.
No matter how we treat the cost, we are reaching “increased inefficiency” when we need to recycle the parts when we get done with the product. The prior approach–just throwing it out, into a junk heap somewhere–admittedly was not sustainable, but it was what generally got built into the cost structure. Once we need to add the cost of recycling somewhere along the way, the costs generally go up. It is just a different form of diminishing returns. For an economy built on growth, it is hard to have diminishing returns–this problem must be offset by even more growth elsewhere.
“No matter how we treat the cost, we are reaching “increased inefficiency” when we need to recycle the parts when we get done with the product.”
It depends on the product. In many cases, it is more cost and energy effective to recycle than to mine raw ores. Copper and Iron have been recycled for thousands of years because of this.
For sure, electronic devices are difficult because there is so many different elements in such tiny quantities, effective recycling is much harder.
There is an energy cost in all recycling. It varies with respect to how the recycling energy cost compares to the “new material” energy cost.
“Once we need to add the cost of recycling somewhere along the way, the costs generally go up. ”
I would argue they tend to go down, as the market and usability of recycled materials increases. It is boosted when the prices of the virgin materials, and the price of refuse goes up.
Instead of getting a dumpster for 200 bucks, we called some scrappers that took our old aluminum siding away for free. They probably made 500 bucks in scrap aluminum. They had to do -some- work to get that, but they made money and everyone was happy including the scrap yard, and the whoever they sold it to.
The people in south america that make solar water heating systems out of old 2 liter bottles. They don’t have any money and the material is free, and they can save money by doing it. So even though it is labor intensive, not having to pay for hot water saves them some of the money they don’t have.
In fact the older generation who lived through the depression and WWII. They save -everything- just in case they might need it for something. They won’t buy something unless they -have- to buy it. Newer generations rebelled against that and mocked them quite viciously.
The District, Baltimore and many counties in between are contributing millions annually to prop up one of the nation’s busiest facilities here in Elkridge, Md. — but it is still losing money. In fact, almost every facility like it in the country is running in the red. And Waste Management and other recyclers say that more than 2,000 municipalities are paying to dispose of their recyclables instead of the other way around.
http://www.washingtonpost.com/local/dc-politics/american-recycling-is-stalling-and-the-big-blue-bin-is-one-reason-why/2015/06/20/914735e4-1610-11e5-9ddc-e3353542100c_story.html
Here’s a podcast with Jim Kunstler. Gail get talked about in it.
http://hwcdn.libsyn.com/p/b/1/3/b13616c724f3cef7/KunstlerCast_270.mp3?c_id=9704100&expiration=1440851862&hwt=9d07cc76971f8781d85e1004285c48b5
“Recycling looks like it would work, but in many cases it just raises costs.”
Recycling is free and dumping it in the garbage costs money.
If you can cut your garbage costs in half by recycling, then not only do you not have to worry about landfill property, it costs you half as much. If someone can break even, or even if you subsidize them less then half your garbage cost, you saved money.
You need to read one of those “increase your wealth” types of books instead of economic theory.
I would agree that you have to do a comparison to the cost of alternative options.
Part of our problem is that the cost of alternative options is going up as well–land fill isn’t free–this is part of the diminishing returns problem.
“Part of our problem is that the cost of alternative options is going up as well–land fill isn’t free–this is part of the diminishing returns problem.”
Correct. There is also money in recycling, but there are issues that need to be addressed to make it a more profitable endeavor to make it sustainable.
Reblogged this on Druidovik.
While an ardent follower of Gail’s analysis for years, I tremble at the absence of telling inclusion of the role of climate change in her economic overview. Today base load costs of renewable electric power in many setting provide rates competitive with or cheaper than coal or nuclear. Costs for renewable technology continue their dramatic downward march. And breakthroughs in power storage will soon consign the intermittency challenge to history. The continuing use of our atmosphere as the sewer for CO2 pollution already costs nations billions each year in recovery from floods, wild fires, and drought.
My grandchildren deserve a life of options and opportunity based on today’s leaders taking historic courageous measures to eliminate most fossil fuel. Vermont – that means winter electric heat pumps rather that heating oil. America – that means we will longer take a Caribbean vacation via Delta. Without question the challenges humanity faces demand profound changes for us all.
Anthropogenic climate disruption, alas, makes our current economic challenges pale by comparison.
The levelized cost of wind and solar matches coal in some cases. But if you want electric at night that is a different number need storage. If you want electric in the month of November month long storage, here in NY November is basically cloudy all month. Please tell me the cost of RE plus storage. Elon’s batteries cost $12,000 per house per one day of use stored. 30 days $360,000. Yes, wind can be out of sync with sunshine. Tell me the costs for 20,000MW of transmission lines from the windy northwest of NY state to NYC.
I like the idea of RE but I want to see the whole cost for a whole system.
I think my above at $1.8/KWHr versus coal at $0.03/KWHr is about right (order of magnitude, yeah, I am a physicist). Can you show a number for something more than the instantaneous levelized cost?
Solar PV and wind farms are extensions of fossil fuels. Why is that? Well, without input of resources (copper, lead, iron, concrete etc) made available through the burning of fossil fuels, solar PV and wind farms could not be built (at any cost). So, it seems to me someone is leaving out some costs of the “renewable energy.” It seems intuitive to me that solar PV and wind farm costs must be added to the costs of the fossil fuel energy used to create and maintain them. Someone is conveniently leaving that out and starting the capitulations with the assumption the solar PV panel or wind turbine is already produced. There is no “free lunch.”
I think most solar enthusiasts privately know all this. They know that dilute energy forms can’t power a mighty industrial civilisation that was founded on very dense energy forms. But there is a certain (unstated) logic that drives it forward anyway. It goes simply: “better something than nothing”.
I liken this to driving on a very long dirt road and coming to a patch of deep mud as far as the eye can see and no way around. There’s no chance of getting through so you are faced with just two choices: 1) Stare at it for a very long time. 2) Accelerate as hard as you can and bravely charge into it and see how far you can get.
Choice number 2) gets picked because we are habituated to acting. We are not ones for retreating. We believe in Progress. With a wing-and-a-prayer you hope that something else will turn up when you do get totally bogged. think of it like karma. Maybe a helicopter will come by and lift you out. If that’s as far as you get, at least you can say that you tried.
Meanwhile, to keep the passengers happy you have to persuade them you’re going to make it through to the end. No enterprise succeeds on a foundation of Doubt.The one thing the passengers need most of all is Belief.
I’m not being totally cynical here. There’s a certain logic to it when you look at what else can be done.
Your car on a dirt road analogy is good. The politicians have been good at persuading people that we will make it through our current mess. No one could ever think anything different.
If you take the climate change models, and add our current economic problems to them, they undoubtedly will come out quite differently. In fact, they may come out worse for a while, if global dimming is preventing climate change. So I am not convinced that we “know” what we think we know. It may be that the financial collapse leads to extinction or near extinction of humans. Some people believe that we need to “take care of the earth,” but I expect the earth can pretty much take care of itself, by cycling to a new state.
I see no hope for renewable technologies, because they are so dependent on fossil fuels. They are simply small add ons to the current system. If I thought that they had a chance of truly being helpful, I would have mentioned the possibility.
Yep, I recently came across a point that is also to be taken into account: when the climate will change more dramatically as we excpected some 10 years ago (latest Hansen Paper) we can not even be shure that local weather patterns may persist for a long time in the future that was there now. Will there be still wind where you projected your turbine ? The ocean currents are massively changing and even large scale offshore will face a problem when the sea level goes up too fast (not yet seen luckily) or the global wind dynamics change (that can be seen in the polar jet stream already)
maybe this is for shure: a hot and dry place will become more hot and dry, so maybe concetrated solar power is an option but it is VERY expenive (but also can scale up)
Its also quite possible that global warming is fending off the next ice age cycle. It could be that the heat engine of civilization is actually keeping our planet from cooling off as it has done with a regular periodicity for hundreds of thousands of years. We have been in an unusually stable interglacial period now for longer than is usual. If you look at any timeline of ice ages, you can see that we are due, indeed, perhaps over due for the next. Here’s a link among many you can find by googling it: https://www.google.com/search?q=timeline+of+ice+ages&espv=2&biw=1097&bih=511&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDUQ7AlqFQoTCMHi3oSDo8cCFQyliAod5L0DZA&dpr=1.75
With all the parroting about climate change warming the planet or not warming the planet, I thought that this might gives us some pause to think about and search for how solar activity affects earth temperature cycles. After all, there is a fundamental connection between our planet and the Sun.
I heard a scientist talk about her sun activity related abstract on NPR the other day. This scientist was investigating and modeling the Sun’s magnetic activitiy. At
http://www.sciencedaily.com/releases/2015/07/150709092955.htm There is this summary from that page: “A new model of the Sun’s solar cycle is producing unprecedentedly accurate predictions of irregularities within the Sun’s 11-year heartbeat. The model draws on dynamo effects in two layers of the Sun, one close to the surface and one deep within its convection zone. Predictions from the model suggest that solar activity will fall by 60 per cent during the 2030s to conditions last seen during the ‘mini ice age’ that began in 1645.”
This goes along with other solar modeling summarized at:
https://en.wikipedia.org/wiki/Solar_cycle#Models
Some of the current graphing is depicting some of this activity from a decrease in solar activity during this solar cycle:
This shows 400 years of Sunspot Observations with an approximate 180 year cycle. This means we are due for minimum sunspot activity which is thought to be associated with reduced solar energy output.
This graph shows the last 2.5 sunspot cycles with a noticeable downward decline in number.
What is interesting about this chart of Arctic Ice volume is that since 2010, there has been a noticeable upward trend in ice volume.
and here:
**If all this is a trend**, we may see cooler temperatures on average in the near future and if the seas are slower to cool down, the added water vapor may cause more storms through cyclogenesis. Also the plastic gyres in the Atlantic and Pacific Oceans may also be creating a cap over the water in which the water is heated underneath any translucent plastic sheets. It would be interesting to see if there are any studies related to the gyres forming a cover and heating up the local waters some.
Think of a translucent pool cover. What percentage coverage would you need in order to see a significant rise in pool temperature? Might be a good “science fair” project for some kid with a couple of tupperware containers, zip lock bags and a thermometer.
I had trouble uploading the graphs to the above comment using html code. Here are the links:
https://upload.wikimedia.org/wikipedia/commons/thumb/2/28/Sunspot_Numbers.png/400px-Sunspot_Numbers.png
http://psc.apl.uw.edu/wordpress/wp-content/uploads/schweiger/ice_volume/SPIOMASIceVolumeAnomalyCurrentV2.1.png
http://psc.apl.uw.edu/wordpress/wp-content/uploads/schweiger/ice_volume/SPIOMASIceVolumeAprSepCurrent.png
Here’s some additional clarification to the above. This is a quote in USA Today concerning Valentina Zharkova’s research on climate change: “She said that although she did not intend to suggest an ice age is coming, she doesn’t dispute it. She maintains the decline in solar activity will reduce solar irradiance, which heats the sun [ed. earth(?)].”
(Ref: http://www.usatoday.com/story/news/nation/2015/07/16/scientists-dispute-ice-age-warnings/30257409/).
Basically, one effect, increasing CO2, will likely be offset the temperature increasing effects by another effect, decreased irradiance from the sun; but to what extent?. My conjecture is that it will show up here in the volume of ice in the Arctic Ocean:
http://psc.apl.uw.edu/wordpress/wp-content/uploads/schweiger/ice_volume/SPIOMASIceVolumeAprSepCurrent.png
Along with other climatic changing effects such as volcanic eruption output reaching high altitude. There are still the effects of increased acidification of the oceans.
“And breakthroughs in power storage will soon consign the intermittency challenge to history.”
Be sure to let us know when this happens…. We will be waiting…. and waiting…. and waiting…. and waiting…
In terms of my concerns climate change ranks right up there with who is going to win Dancing with Stars and American Idol…. (I have never watched either of these shows…)
Why?
Because BAU will collapse long before climate change gets me… and the only way to stop (maybe) climate change is to stop BAU now — which means we all starve.
Anthropogenic climate disruption IMHO is the least of our worries.
I am in the Fast and Gail camp.
Modern renewables that are connected to the grid can be expected to stop working when the grid stops working.
It may be useful for factories, small villages or farms to disconnect from the national grid and become self-sufficient for electricity with a windturbine, solar panels. and perhaps a small generator.
Here in New York State, US. We call these micro grids. As you say they can operate independently of the grid. For example when NYC went black NYU which has its own micro grid maintained power.
The issue is your statement “small generator”. No large generator big enough to supply everybody and everything in the micro grid area. So distributed generators all over and gas transmission pipeline to the generators all over.
The government in US and NY wants micro grids that will keep the government running even when the citizens and businesses go black. You know police, state police, army, FBI, CIA, DHS, NSA. Here in Rhinebeck, New York the proposal is to micro grid the police, town government, and hospital. How long they can run will depend on how it is fueled. If it is on-site storage tanks then it lasts until the tanks run dry. IBM Fishkill, New York maintains 2 million gallons of diesel on site for its generators for its chip factory.
edpell
Somehow the micro-grid idea – to maintain vital state functions as islands in the midst of chaos – makes me think of the end of Germany in 1944-45, with Albert Speer desperately trying to keep things going as the Reich disintegrated under Allied and Russian advances……….
Perhaps this is true if they have enough spare parts. The use of a generator will be expensive and difficult to maintain if oil is a problem.
I don’t think that self-sufficiency with solar PV and wind turbines (and backup batteries) is possible if any kind of industry is done. In particular, getting enough electricity to melt metals, dye cloth, and even bake bread becomes a problem. If the solar PV and wind turbines are just to keep the lights on for a few homeowners in a mild climate, perhaps the plan will work for a while.
I agree with you that there is a place for this type of renewable, although we should probably stop calling them renewables. Also, you can install a grid inter-tie system that is attached to the grid during normal times, but can be isolated from the grid during periods of chaos. It is as simple as installing an isolation switch. With extra battery capacity and a generator, it will be quite the advantage in the hard times to come.
There was an article on a german website today that was very proud that the german coal powered utilities face severe problems. Their shares are down and their revenue is down due to the oversupply of renewables on sunny days. These companies are forced to let the renewables overtake and have to take down their factories. This may sound like a victory but in the end it sums up to a net loss according to the points you make.
Overall there is a loss in productivity for the nation and this will one day lead to the shutdown of these plants and then you have a grid of renewables that provide less then 25% of the energy on an intermittent base. This is no winning situation at all. The problem with it is that somehow we must swith to renewables but it can not work to offload all renewables on the grid and have coal plants working in a competitive price. The solution for the fans of it is to add some to be invented storage capacity. But if you look at germany as a whole there exists no such storage capacity in a figure that can be seen in the energy mix of the country after at least 25 years of buildup for renewables (0,01 % ?). And if you add storage you reduce the ereoi and the net energy available again. That is physically possible but in the end will lead to a vastly shrinking possibility to net produce something. I was checking out the possibilities with the Generation IV reactors lately and found that they have a huge security problem and are very difficult to hanldle. But these can produce the energy needed for a long time. From the russian BN-1200 project we can see that these sources can work between 5000 to 7000 hours a year. But to start building them now in germany (the US?) would be politically absolutely impossible, also due to the fact that the greens are so in love with their renewables. The question is, will we wake up to this reality fast enough to build up the required capacity? Because it is
Grow or die
And I did not yet talk about the energy that the chinese used to build all these PV cells. That already added another CO2. For the Generation IV reactor I do oinly see that the BN-1200 is a huge complex and it used a lot of cement to build, so again we have no zero emission thing.
It is a bad tasting pill to swallow. What do you think of it?
I am afraid that there is no work around for this problem. We need a cheap, nonpolluting source of energy quickly. Any kind of storage is expensive. Just making excess capacity, and not using that capacity when there is an excess, is another option, but it is also expensive. Any expensive option allows the system to fail.
We currently use the “create excess capacity” model for frequency regulation. It is the 1920s model of the grid Tesla designed. The -easiest- thing to do is to start connecting all the power companies together, which the US started under the Bush administration, and the EU is working on it too.
We are working on better solutions for frequency regulation, and that does include storage. The storage market is getting ready to mass produce, which will significantly drive down the overall costs.
There are advantages to having storage capacity besides for renewables for grid operators. Renewables are only a minor portion of the advantage of storage.
The other advantage things like solar PV, and wind have are they don’t use any water even if you have a hard time swallowing they might use some energy to produce…
“The storage market is getting ready to mass produce, which will significantly drive down the overall costs.”
Can you provide evidence of that the storage market is getting ready to mass produce. Hard facts please.
Based on this there is really not much to store….
http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg
Have you heard about the Gigafactory at least? I’m not sure, the data you are quoting is from 2012. I don’t think you could comprehend what I wrote in the post you are responding to since you missed the point.
There is a demand for storage in California to reduce overproduction which I already discussed:
http://www.greentechmedia.com/articles/read/california-passes-huge-grid-energy-storage-mandate
Here is something else that will also drive storage growth, if you can comprehend it:
http://www.navigantresearch.com/newsroom/annual-plug-in-electric-vehicle-sales-in-north-america-are-expected-to-exceed-1-1-million-by-2024
http://www.greentechmedia.com/articles/read/SunEdison-to-Buy-1000-of-Imergys-Flow-Batteries-for-Rural-Electrification
(I don’t know if this mentions Imergy is looking at FoxxConn for manufacturing or not.)
You are right. I don’t get it. I will never get it.
Because 1+1=2 …. always 2…. never 3, or 5 , or876543….. 2.
Time for a REFRESHER COURSE ON WHY RENEWABLE ENERGY IS AN EXERCISE IN FUTILITY:
http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/
Time to Sing:
Thermal solar to some extent overcomes most of those problems. This idea of using lithium batteries to make everything work, needs to die off though. Solar using one of those power walls or whatever means $0.30 per kWh or more.
It doesn’t really matter too much, the current financial system is going to blow off way before anyone can really do much of anything – all that really matters is what happens in the aftermath.
“Thermal solar to some extent overcomes most of those problems”
And here we are — on the cusp of total collapse — and the solution is right there staring us in the face
And the solution is being ignored….
Funny that.
“And here we are — on the cusp of total collapse”
Always so dramatic. I’m sure we’ll just start over with new dollars and new GDP and new bonds and derivatives after the dust settles on the current financial system. Or maybe not, maybe it will all go down in flames.
“And the solution is being ignored….”
Not ignored, just being rolled out at a snail’s pace. The USA just needs to spend $100 trillion and use 1 million square kilometers of land to replace oil for its energy needs (not counting any substitution for oil’s other products).
What this election needs is a radical green energy person who promises to borrow and invest that $100 trillion, to create tens of millions of jobs. Also, offer to annex Mexico instead of deporting all the illegals. To seal the deal, s/he needs to promise a big screen TV in every home.
“You are right. I don’t get it. I will never get it.”
You can get this. It isn’t that complicated.
The overproduction is how the grid does frequency regulation (controls the voltage on the grid or how much energy is provided) The grid use isn’t steady it erratically spikes up and down, and people turn on and off devices. So you want to have capacity ready to cover the high end of the spikes, or else you have brown outs.
When you start to approach the full load of the main power plant, they turn on what they call peaker plants, which are similar to a car engine, but much bigger and can take around 30-45 minutes to stabilize. Since they cost money to run, you have to guess what the load is going to be 30-45 minutes ahead of time in order to have enough capacity available.
What storage can do because it can react immediately is eliminate the guesswork so if you can store say an hours worth of electric, you can pretty much wait to turn on the peaker plant until you actually need to turn it on. You aren’t turning on the peaker plant, and just letting it idle just in case the load spikes up, the load is already there.
Another option might be to buy a contract to cover the additional load. Peaker plants are usually less efficient then main generators so buying excess from a another utility might be cheaper then using the peaker plant.
The other advantage storage has is it can be placed anywhere on the grid. You run into space and emissions issues with peaker plants, but battery packs, can be tucked into odd places.
If you have a substation in a congested area, that maxes out during the day, you can alleviate a lot of the pain, by having batteries cover some of the peak load, and fill them up during off-peak hours, so you are maximizing transmission capacity of the substation.
Plus you are filling them up during off-peak times from your main generation facility, so the initial cost of the electric is cheaper anyway.
They can save a lot of money before we even get to renewables.
Now what happens with intermittent renewables is you have a much more difficult time making a guess as to what the demand is actually going to look like. They make the inefficiency in grid management problem significantly bigger.
In short, since battery storage reacts immediately, it can replace overgeneration overhead costs, as well as absorb spikes in generation from intermittant renewables.
Here is another battery story: NEC just finished a 3.9MW battery, and they have a 60mwh battery for PJM for frequency regulation.
http://techon.nikkeibp.co.jp/english/NEWS_EN/20150711/427323/?ST=msbe
“Time for a REFRESHER COURSE ON WHY RENEWABLE ENERGY IS AN EXERCISE IN FUTILITY:”
—
I stopped reading after I read, today’s cars can’t run on electric. *eyeroll*
“Thermal solar to some extent overcomes most of those problems. ”
Correct, but it is now more expensive then PV, and the systems need to be utility scale.
10 years ago, thermal solar, was cheaper then PV. The high cost of mirrors and trackers, towers, etc don’t really compare to solar pv which has a much more generic install system and easier to mass produce.
The problem with storing energy is that when you do that you get a negative return on the energy
In other words — the amount of energy that goes into manufacturing the solar panels and associated gear — and the batteries —- is more than you get out of the system over its life time.
You put 1 tonne of coal in — and you get less than the equivalent energy of that 1 tonne of coal out the other side.
That would explain this why solar as an energy source — is basically non-existent.
http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg
It is pure folly and only an idiot would invest money into this nonsense (or a government that needs to votes of said idiots to get elected)
Feel free to ignore the obvious and keep banging on about your solar Jesus… solar Jesus is the saviour of course….
“Correct, but it is now more expensive then PV, and the systems need to be utility scale.”
It is not just about the cost of the system, but also the storage. Thermal solar uses potassium nitrate, or even sand, to store the energy, instead of lithium batteries. I bet sand or salt can handle more cycles than chemical batteries. Fewer parts to replace at lower cost.
I did think about connecting together power companies as a way of creating excess capacity, but I suppose it would work that way, because the percentage variability of a large group of users is a lot lower than that of a small group of users. Adding LED lights adds to the effect.
I agree water is a huge problem, and work arounds to our water problems are part of the reason that the cost of producing electricity is rising.
Our unfortunate problem is that people’s pocketbooks don’t respond well to higher prices, even if those higher prices are supported by higher costs. Consumers cut back on discretionary sectors, leading to layoffs in the discretionary sectors. It is as if consumers are being force to buy things that they never bought before, such as work arounds for water problems, and those added costs must be subtracted for some other part of the consumers’ spending.
“It is as if consumers are being force to buy things that they never bought before, such as work arounds for water problems, and those added costs must be subtracted for some other part of the consumers’ spending.”
This is a big part of the problem in a nut shell. If the price of gasoline doubles, consumers don’t consume half as much, they cut spending elsewhere. I suspect that price fluctuations are a huge contributor – if people knew in advance that the price was going to be 5% higher every year, they could make rational decisions. If the price goes up 50% then back down, they gain no useful information to make a decision to alter their lifestyle.
Connecting the grid does a few things. It is a larger service area as you mentioned, and it does smooth things like you mentioned.
It also help provide some redundancy so if your main plant has an issue, you have the ability to get electric from other utilities to prevent outages.
It also can reduce the amount of overcapacity you need online to meet any spikes in demand. Instead of 13 utilities having a peaker plant running just in case there is a spike in demand, but they are all running idle. You only need 1 online to cover any spike.
Part of the law mandated regional markets, so there is a mechanism for line charges between utilities. if power is going from utility A through B’s lines to C, B actually collects a line fee.
CaISO is by far the most advanced I have seen (and most talked about) because they include a variable pricing market.(it is like 15 minute periods, so not quite real time pricing.) Which means, you might be able to buy a contract cheaper then it costs to fire up a plant to meet demand or if you have your main plant running at half capacity, you can sell a contract. They also offer the “real time” pricing to commercial/industrial customers which has helped the behind the meter storage market. Since it is a variable market, it helps accommodate intermittent renewables.
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Water is used in both gas and electric production, so even if solar/wind isn’t CO2 negative is not using the copious quantities of water. I agree there are issues with intermittent renewables that need to be resolved.
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Geothermal, which uses water, but it isn’t an intermittent supply of power is gaining traction out west. It can cycle/vary with changes to demand. kind of like the combined cycle NG facilities.
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“Our unfortunate problem is that people’s pocketbooks don’t respond well to higher prices, even if those higher prices are supported by higher costs. ”
Correct. But waiting until SHTF, then trying to do a massive changeover with no developed technology is definitely not going to work for anyone’s pocketbook. It is much easier to get the technology started, work through the problems and make improvements, and lower the overall cost before SHTF. We can do slower migration so it doesn’t sting our pocketbooks. To defray the costs, we are trying to sell our technology to other countries where they pay more for power and the our current technology is cost competitive. Hawaii is our oddball where they pay 40c/kwh for electric. We are arguing on the mainland about whether solar is competitive enough with wholesale pricing at 5c/kwh.
There are a lot of kinks to work out, and improvements that can be made. Some of the infrastructure changes we are making to improve efficiency and reliability, are irrelevant to the source of the power.
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The LED lightbulb is a great example. When Bush first proposed getting rid of the incandescent lights, there was a huge uproar that lasted for years. At the time the LEDs existed but not as a lightbulb. CFLs existed but they were expensive and don’t produce as high of quality of light. (the flicker really bothers my eyes, and LED light is commonly mistaken for incandescents, you can’t tell them apart.) The first 40w LED lightbulbs were around 100 dollars each. They have improved and the last 60w ones I bought were around 2.50 each, but it took 10 years. One of mine was dropped from 3ft onto a wood floor, and didn’t break. I have a 75w one that runs 8 hours a day, for 5+ years straight. So the improved technology has been quite a bit better and more reliable. In fact LEDs are preferred in warehouses and food service, because of breakage, and they last a long time. They also don’t contain mercury so they are safer to dispose of.
All the ridicule he took, because the idea really does sound stupid, until you think about it. It has actually saved americans millions of dollars. It is hard to realize because you get paid a few cents in savings at a time, with a big lump sum investment cost. It is also a slow migration as most people haven’t replaced all their bulbs yet.
One of the other cool effects of creating a global power grid: when something goes wrong, the whole world will get a blackout all at once. Brilliant.
Fun! Think of all of the nuclear power plants that need grid electricity to ramp back up after an outage.
I agree with nearly all of what you say.
If we were farther away from limits, I would probably think the way you do. Right now, with the global economy beginning to implode, I am afraid it is too late. I don’t think it is possible to maintain electrical consumption for significantly longer than we can maintain the debt system and the fossil fuel extraction system. All of the pieces of the system are hooked together.
“If we were farther away from limits, I would probably think the way you do. Right now, with the global economy beginning to implode, I am afraid it is too late. I don’t think it is possible to maintain electrical consumption for significantly longer than we can maintain the debt system and the fossil fuel extraction system. All of the pieces of the system are hooked together.”
How are you explaining a reduction in electrical use, and an increase in the GDP in the US exactly?
Consumer spending was up 2% last quarter in the face of lower commodity prices for oil.
I should note that residential solar capacity surpassed commercial solar capacity last year.
So that is part of the reduction in use, it doesn’t count towards the production numbers so that is part of the .9% decline in residential purchases.
I agree there is a bubble for commodity prices of oil/ng because we are just using less, because of efficiency, not production. It is hard for a lot of people to wrap their heads around that concept especially commodity traders.
Gail, I like figures 12 and 10. If I use them I calculate a cost of 1.7 euros/KWHr for complete RE. With 8KW per capita this is 13.6 euros per capita per day or about 5000 euros per capita per year. That is about 20,000 euros per family of four per year. OK for families making 100,000 euros per year. Not so good for families making 30,000 euros per year.
my bad that is 8000 watts not 8000 watt*hours/day! a difference of a factor of 24! 326 euros per capita per day! 120,000 euros per family of four per year. So, OK for Bill Gates but the rest of us are in trouble.
How do you figure such a high price for running on pure renewable energy? It seems like around $0.30 per KwH is a more reasonable price for dispatchable thermal solar, built along the Mediterranean.
Energy consumption per capita could probably be cut in half, with lifestyle changes. I think 250 euros per month for a family of four would not be unreasonable.
What about those of us that do not live along the Mediterranean ?…
There are very good reasons why the first civilizations arose around the Mediterranean.
Life in Northern Europe will be very very hard if/when the present system collapses.
The Vikings were big, bad and ugly – again, for very understandable reasons !
“What about those of us that do not live along the Mediterranean ?”
Well, maybe it would restore balance to the EU of Greece was able to export energy to northern Europe in exchange for finished goods.
Scandinavia has a huge amount of the one known renewable to prove to be as cheap or even cheaper than coal; hydro.
“Scandinavia has a huge amount of the one known renewable to prove to be as cheap or even cheaper than coal; hydro.”
Norway has enough el from hydro for it’s own needs, but that’s not much in the bigger picture – Norway is only about 5 million people.
I son’t think you can make the calculation you are making. This image just shows capacity, not kWh, as I understand it.
Great analogy with the pump, Gail, and in particular I like #9 below.
“9. One way of describing our current problem is by saying that the economy cannot live with the high commodity prices we have been experiencing in recent years and is resetting to a lower level that is affordable. This reset is related to low net energy production.”
The word used there that caught my eye was ‘resetting’. As we all remember, oil rose in price to a crescendo of 147 then in the mortgage meltdown dumped to 34, then in the stimulus QE, Zirp activated global economy build back up, the commodity oil price began rising again until it hit about 124 for Brent, then began a slower descent in price to what we see today of less than 50 for a barrel of Brent.
Part of what may be holding price this low now is all oil suppliers fighting a market share war, so the actual reset price consumers can afford may actually be somewhat higher. However, we can see the trend of diminishing returns in which future supply will be constrained by dropping consumer affordability as net energy declines.
I like the pump as an analogy and we can see it needs more and more stimulus to keep going as net energy declines. It would seem we are much closer to collapse than most think, but how close is an open question.
Thanks! When I first drafted the post, I put the pump analogy at the end, to summarize what I was saying. I then thought maybe I should put it near the beginning to try to explain the story before I told it.
One thing that is striking with regards to a collapse is that every civilized and industrial nation is following the same recipe as the world and they are all interconnected. In the past such as in the Roman Era there was no such thing as Twitter, Facebook etc for instant communications. And economies back they had a huge buffer zone between them and other Nations and economies as they were more self reliant. In other words they wouldn’t import Citrus from Chile if they could grow it.
Today it’s the complete opposite and all of this networking and complexity moving products and services around the world adds to the cost to the consumer. So when this collapse will be far more devastating than in the past because as the Leonardo Stick Toy illustrates, it’s nearly impossible to remove one or two sticks without the entire global system collapsing. It’s a lesson Hank Paulson was well aware of back in 2008 when he feared the US financial and banking system would trigger a global contagion and meltdown which would have resulted in a nightmare scenario.
The good news (j/k) is we are in far worse shape today than back in 2008, by several magnitudes.
And yet still the frenetic building continues around the world, for projects that cannot long survive what is coming:
http://www.theguardian.com/cities/2015/aug/07/land-starved-singapore-exhumes-its-cemeteries-to-build-roads-and-malls
that’s because buildings are perceived to have ‘value’ and as such are ‘cash assets’
but if they remain empty they are liabilities.
And they soon decay if left uninhabited.
Yes, and that’s something the Chinese will learn soon enough. Let’s hope they didn’t use Chinese drywall for their ghost cities and factories. 😉
The expressway near me is having two “reversible” pay lanes added now. They will operate one direction in the morning and the other direction in the afternoon. The expressway currently has three lanes each direction. It is not clear to me why we need to add 2/3 as much additional capacity.
Example of debt incurred by Transurban for 495 and 95 express lanes, p 40-41 in:
https://yourir.info/44ce5b071330c9253dfa01d80c1c6701/TCL_Transurban_Investor_Presentation.pdf
The “smart money” investors who privatized the Indiana Turnpike went bankrupt.
http://www.reuters.com/article/2014/09/22/indiana-tollroad-bankruptcy-idUSL2N0RN16D20140922
Bankruptcies have happened here in Oz as well. Public -private partnerships are all the rage, and of course utterly unnecessary, since a MS government can pay without any interest costs. According to Ellen Brown financials can double or triple the construction cost. Three cheers for banks!!!
That’s always the plan with privatized govt assets. The privateers just use it with minimal maintenance or renewal till it is in total disrepair, pocketing the toll charges on the way, then go bankrupt and turn it over back to the govt. lol trolled by the ‘free market’ once again! This is clearly what is happening to privatized rail in England for example
I didn’t get the link to work. Adding debt helps pump up demand and commodity prices.
Look at how Sydney wants to grow by 1 million over 10 years:
https://www.nsw.gov.au/tomorrows-sydney
When immediate collapse is the only other choice — build “ghost cities” and “bridges to nowhere”
If we did not do this then The Deflation would kick into a seriously high gear….
Deflation … You Rang, Sir?
http://data.bls.gov/timeseries/CUUR0000SA0
avg 2014 = 236.6
2015H1 = 236.2
http://www.theguardian.com/cities/2015/aug/07/land-starved-singapore-exhumes-its-cemeteries-to-build-roads-and-malls
But of course, once you start digging up graves so as to increase debt and economic growth, you are very close to mining people’s body parts because that too would increase debt and help grow the economy. Where does it end?
Singapore might have tried building a lot of dispersed “tiny houses,” glommed on to existing buildings if feasible. Added on top of tall buildings, they could offer nice views and be relatively expensive (and tax productive). I don’t know if their authoritarian-style government could make unusual projects like that easier to do than many other developed countries.
As ever Gail, a wonderful and easily understandable piece – especially I like your ‘If we find ourselves mostly with energy products that are producing cash flow losses for their producers, as seems to be the case today, this is an indication that we have a problem. We don’t have enough “net energy” to run our current economy’.
However, you will not be able to explain that to German and Danish governments, neither to Hillary Clinton og her followers (but whether Trump is better og not is a disputable question). They see no connection between money and energy. And you don’t have to be polite: I my mind I exchange your ‘seems’ with ‘obviously is’.
Thanks a lot once more!
I agree that I won’t be able to explain the problem to German and Danish government.
We need a lot of cheap energy to run our economy. It is obvious to me that cheap energy should display itself in an obvious way–with high profits that can be taxed at a high level. We seem to have a lot of confused people who believe that model profits in 2050 will save us. This isn’t any more true for wind turbines than it is for Bakken oil production.
I too wondered about solar in Germany and Denmark especially in winter. In December, the solar angle is around 12 degrees elevation. (90 degrees – (55 degrees avg. latitude + 23 degrees south declination of the sun) = 12 degrees at solar noon.) With my panels, I produce about 22% of my electricity needs in January and I am around 35 degree north latitude and the sun is at around 32 degrees high at solar noon in December. At 12 degrees, the sun would be barely above the tree tops and not for long.
I’m paying off my panels through a net metering agreement even though our local rate is $0.10/kwhr. If our rate was $0.35/kwhr, there would be a lot more panels on individual homes and in solar farms.
There may also be a political angle to this. Where does Europe get its natural gas from? In part the North Sea and also from Russia. NATO is suppose to protect Europe from Russia yet Russia is supplying Europe with natural gas. There was a President Nixon parody a long time ago in which “Nixon” said: ” When you have them by the b****, their hearts and minds will surely follow.”
**All my calculations do ****not**** include any government subsidies or incentives.** with that said, I would not want anybody to try to subsist on the “profits” my panels produce. They are there to reduce my FF uptake. I can generate enough to recharge an EV. It’s not going to set the world on fire but it will slow the uptake of FF.s
So you disagree with this comment from the article above?
“What we really need from energy products is the ability to stimulate the economy in a way that adds tax revenue. Either the energy products must produce high tax revenue directly, or they must indirectly produce high tax revenue by stimulating demand for new cheaper goods, produced with the new inexpensive form of energy. This is what I think of as “adding net energy”. Wind and solar PV clearly do the opposite. Thus, they behave like “energy sinks,” rather than as products that add net energy.”
I am sure that a big part of the reason for the adoption of solar in northern countries is the decline in natural gas availability, and the need to replace it with something. I don’t anyone figured out that high cost and low output were problems, just that natural gas wouldn’t work.
Our big problem now is keeping the economy working. Unfortunately, that takes more energy use, not less. Building solar panels moves forward energy use–coal now, versus other energy use later, so in a sense is helpful in this regard. (Adding debt to buy and build the solar panels also pumps up the economy, and helps raise fossil fuel prices.)
Whether or not savings will come in the future is speculative, and depends on the ability of the economy to function for many years in the future.
Many people who add solar panels hope that the panels will provide some electricity, when otherwise they would have had none. If the panels are part of the grid, and the grid goes down, I am afraid the answer is no.
Although I agree that solar is not the solution and it acts as an energy sink when viewed in a global sense, from an individual point of view they will be quite helpful during periods of chaos. I don’t understand your all or nothing argument with solar. There are many ways of configuring a residential solar system. You can have a stand alone system that produces and stores power irregardless of grid status. You can have a grid inter-tie system that is dependent on the grid and will go down with it. Or you can have a grid inter-tie that you can isolate away from the grid during troubled times. This is the best of both worlds. And a pile of spare parts and batteries in the garage will get most people through a lifetime of use. Obviously, at a much lower standard than is prevalent today.Not an answer to our predicament, but a comfortable advantage to those who have them.
I have made the point that solar can be (sort of) helpful to the individual homeowner, but that it doesn’t help the electric grid system. One of the things I object to is subsidizing a system that helps a few rich people to better take care of themselves. If rich people want to buy these, they should buy them without subsidies indirectly from the less well off.
In Figure 8 above depicting median family income versus time, there are underlying dynamics which probably need to be discussed. Around 1970, we experienced the first oil crisis. This shocked the economy and has had ripple effects going forward. From around 1970 to 1980, the curve is basically flat due to the disruption in oil. At that time, we also had no fall back and had to acquiesce politically while drilling for more oil.
The second is the rise in the curve during the 1980’s through most of the 1990’s. Harry Dent is his book, “The Great Boom Ahead”, has a similar curve but he equates it to the relative number of people in the 40 to 50 age group. His premise being that the people in this age group are the ones who are most likely to spend and have the financial ability to spend. They are likely to upgrade their homes, take vacations, have teenagers who want to eat, drive cars, go to college, etc. The relative number of people coming into this group went positive in the early 1980’s and started to go negative toward the end of the 90’s. This parallels the Figure 8 curve above but manifests itself in the form of stock prices. Some would say the Dot.com bust in 2000 masked this underlying dynamic. Now this group is retiring and trying not to spend so they do not outlive their savings. The economy is not fairing very well as a result. During the 2010’s, Dent’s graph shows a steep decrease in stock prices as the aging Boomers sell their stocks to keep on living. The use of debt, under a policy of Quantitative Easing, has masked this dynamic. In the early 2020’s as the sons and daughters of the Boomers cause the relative numbers in the 40 to 50 age group to go positive again; a long protracted “not as Great Bull Market” appears. I suspect the overhang of debt will tend to stifle some of this last dynamic.
Another dynamic not shown in the graph is the amount of fraud on the Federal books. It is estimated that of the $18T in Federal Debt, $12T of it is do to fraud. Since the Federal Gov’t collects roughly $3T in taxes, this is roughly $4 of fraud for every $1 collected. Income Tax is less than half this amount with the other amounts derived from Social Security, Medicare, Corporate, and Excise tax payments. If fraud in my state is $500, that means that anyone paying over $62.50 in Income Tax has been defrauded. I know that my wife and I are not spending as much knowing that we will be the ones paying on this fraud and debt in one form or another. This could be someone else’s income — if we would just spend. Another reason for the decrease in **median** family income.
The tag line on the above fraud is that “no one has gone to jail”. I think this could be prosecuted under the RICO statutes. As an example, any Congressperson receiving higher than normal campaign contributions and who caused the repeal of the Glass-Steagall act, would fall under that statute along with the major contributors from the financial industries. The Glass-Steagall Act was enacted to prevent the type of mal-investments we are seeing today. It was to prevent financial types from gambling with saver’s nest eggs instead of investing the funds wisely and where the financial types could be held accountable for irresponsible behavior.
In an earlier one of Gail’s blogs, I posited that a $1T could supply enough PV over the lower 48 states (except for the Washington State area) in December to power enough EVs to make us truly energy independent. I would further posit that another $1.2T could supply enough EVs to use that electrical energy. That’s a total of $2.2T. Now compare that to the amount of money we have spent on the Iraq War, the amount of fraud on the Federal books, etc.
Whatever is done to right the ship of state will leave us in a less wealthier position, less consumptive position, with likely higher costs. Already I see a lot of young people riding bikes to where they need to go. That is, in part, their response.