How Economic Growth Fails

We all know generally how today’s economy works:

Figure 1

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

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

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

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

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

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.

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

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

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

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$.

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 Mearns

Figure 12 by Euan Means. Installed capacity is in Watts (W) per capita.

To make matters worse:

  1. 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.
  2. 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.
  3. 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

2 Importance of Energy

3 Overview of a Networked Economy

4 Economic Growth – Diminishing Returns

5 Government costs and debt

6. Competition and Resource Exhaustion

7. Twelve Principles of Energy and the Economy

8. Renewable Energy

Videos of these presentations are also available on my Presentations/Podcasts page.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,045 Responses to How Economic Growth Fails

  1. James says:

    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.


    • James says:

      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?

    • daddio7 says:

      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.

      • Ann says:

        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.

        • James says:

          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?

          • Ann says:


            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.

            • James says:

              Thanks Ann. Your comments here and to Stilgar above are in line with everything I’ve read on the subject as well, including this 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!


            • The Truth says:

              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!

            • Lizzy says:

              Hi Ann,
              Excellent. Thanks.
              Is rape seed oil as good as olive?

              Best wishes,

            • Ann says:

              Lizzy asks whether rape seed oil, also called canola oil, is as good as olive oil.


              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.

            • Stilgar Wilcox says:

              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.

            • Jarvis says:

              No! High in omega 6. Use avocado or coconut oil and yes the olive oil is one of the best.

        • xabier says:

          Only eat an animal whom you have been able to pat on the head while alive…….

            • 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?

            • xabier says:


              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.

            • John Doyle says:

              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.

            • Greg says:

              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.

            • Ed_Pell says:

              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.

            • Fast Eddy says:

              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…

            • daddio7 says:

              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.

            • xabier says:


              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.

            • Stilgar Wilcox says:

              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.

            • jeremy890 says:

              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.

            • James says:

              Horses killing people = nature at work containing the human population the old fashioned way.

            • xabier says:

              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!

            • James says:

              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!

            • greg machala says:

              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.

            • xabier says:


              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.

            • James says:

              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?

            • jeremy890 says:

              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.

            • xabier says:

              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.

            • James says:

              Agreed. Been feeling that way a lot lately. 60(50?) and out might well be the mantra very soon.

            • xabier says:

              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.

          • InAlaska says:

            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.

            • madflower69 says:

              “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.

        • The Truth says:

          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”

            • Fast Eddy says:

              phthalates r ubiquitous and unavoidable and r estrogen mimics despite the pr bs you will find on worldorfpedia

            • nequin says:

              Lol that was filmed near me and I know the actors.

              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

            • Fast Eddy says:

              Was on a flight the other day and watched this

              Those are the type of people who would be best positioned to survive…

              Quite an adventure….

            • The Truth says:

              Nah, the id adjusted are the ones.

            • Minnesota Fats says:

              You could get a job as a disinfo agent with your timely use of non sequiturs

      • Ann says:

        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.

        • John Doyle says:

          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.

          • B9K9 says:

            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.

            • John Doyle says:

              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.

            • James says:

              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.

            • Fast Eddy says:

              – 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!

            • James says:

              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!

            • Ann says:

              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.

            • James says:

              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!

            • John Doyle says:

              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!

            • James says:

              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!

            • John Doyle says:

              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!

            • James says:

              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?

            • greg machala says:

              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.

            • John Doyle says:

              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.

            • James says:

              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?

            • Stilgar Wilcox says:

              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.

            • Fast Eddy says:

              I wonder if Henry has a torture chamber inside the compound … kinda like some people have private cinemas…

        • Stilgar Wilcox says:

          “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.

          • Ann says:


            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. 😉

          • John Doyle says:

            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.

  2. Pingback: How Economic Growth Fails | EndGameWatch | Sco...

  3. Rob says:

    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.

    • James says:

      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.

      • Fast Eddy says:

        There’s no stopping us now so I reckon this is what will happen:

      • 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

  4. Michael says:

    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.

    • James says:

      Not to differ, but what makes you so sure?

    • Michael says:

      Maybe the no growth non debt scene will emerge as James proposes.

    • Fast Eddy says:

      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….

      • James says:

        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!

      • Michael says:

        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.

        • Fast Eddy says:

          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.

            • Fast Eddy says:

              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

          • Michael says:

            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,

  5. Michael says:

    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.

  6. Michael says:

    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.

      • James says:

        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.

  7. Michael Jones says:

    Business insider roundup….all negative
    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:

  8. MG says:

    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…

    • James says:

      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.

      • John Doyle says:

        The “con” is banking. bankers have executed the con for hundreds of years. They make you pay for something that costs them nothing.

    • Stilgar Wilcox says:

      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.

    • John Doyle says:

      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!

      • MG says:

        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.)

        • John Doyle says:

          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.

          • MG says:

            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.

            • John Doyle says:

              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.

            • James says:

              @ 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.

            • John Doyle says:

              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.

            • MG says:

              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.

            • John Doyle says:

              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.

            • Darksideoftheboom says:

              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.”

              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?

            • MG says:

              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.

            • John Doyle says:

              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!

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