Both the stock market and oil prices have been plunging. Is this “just another cycle,” or is it something much worse? I think it is something much worse.
Back in January, I wrote a post called Oil and the Economy: Where are We Headed in 2015-16? In it, I said that persistent very low prices could be a sign that we are reaching limits of a finite world. In fact, the scenario that is playing out matches up with what I expected to happen in my January post. In that post, I said
Needless to say, stagnating wages together with rapidly rising costs of oil production leads to a mismatch between:
- The amount consumers can afford for oil
- The cost of oil, if oil price matches the cost of production
This mismatch between rising costs of oil production and stagnating wages is what has been happening. The unaffordability problem can be hidden by a rising amount of debt for a while (since adding cheap debt helps make unaffordable big items seem affordable), but this scheme cannot go on forever.
Eventually, even at near zero interest rates, the amount of debt becomes too high, relative to income. Governments become afraid of adding more debt. Young people find student loans so burdensome that they put off buying homes and cars. The economic “pump” that used to result from rising wages and rising debt slows, slowing the growth of the world economy. With slow economic growth comes low demand for commodities that are used to make homes, cars, factories, and other goods. This slow economic growth is what brings the persistent trend toward low commodity prices experienced in recent years.
A chart I showed in my January post was this one:
The price of oil dropped dramatically in the latter half of 2008, partly because of the adverse impact high oil prices had on the economy, and partly because of a contraction in debt amounts at that time. It was only when banks were bailed out and the United States began its first round of Quantitative Easing (QE) to get longer term interest rates down even further that energy prices began to rise. Furthermore, China ramped up its debt in this time period, using its additional debt to build new homes, roads, and factories. This also helped pump energy prices back up again.
The price of oil was trending slightly downward between 2011 and 2014, suggesting that even then, prices were subject to an underlying downward trend. In mid-2014, there was a big downdraft in prices, which coincided with the end of US QE3 and with slower growth in debt in China. Prices rose for a time, but have recently dropped again, related to slowing Chinese, and thus world, economic growth. In part, China’s slowdown is occurring because it has reached limits regarding how many homes, roads and factories it needs.
I gave a list of likely changes to expect in my January post. These haven’t changed. I won’t repeat them all here. Instead, I will give an overview of what is going wrong and offer some thoughts regarding why others are not pointing out this same problem.
Overview of What is Going Wrong
- The big thing that is happening is that the world financial system is likely to collapse. Back in 2008, the world financial system almost collapsed. This time, our chances of avoiding collapse are very slim.
- Without the financial system, pretty much nothing else works: the oil extraction system, the electricity delivery system, the pension system, the ability of the stock market to hold its value. The change we are encountering is similar to losing the operating system on a computer, or unplugging a refrigerator from the wall.
- We don’t know how fast things will unravel, but things are likely to be quite different in as short a time as a year. World financial leaders are likely to “pull out the stops,” trying to keep things together. A big part of our problem is too much debt. This is hard to fix, because reducing debt reduces demand and makes commodity prices fall further. With low prices, production of commodities is likely to fall. For example, food production using fossil fuel inputs is likely to greatly decline over time, as is oil, gas, and coal production.
- The electricity system, as delivered by the grid, is likely to fail in approximately the same timeframe as our oil-based system. Nothing will fail overnight, but it seems highly unlikely that electricity will outlast oil by more than a year or two. All systems are dependent on the financial system. If the oil system cannot pay its workers and get replacement parts because of a collapse in the financial system, the same is likely to be true of the electrical grid system.
- Our economy is a self-organized networked system that continuously dissipates energy, known in physics as a dissipative structure. Other examples of dissipative structures include all plants and animals (including humans) and hurricanes. All of these grow from small beginnings, gradually plateau in size, and eventually collapse and die. We know of a huge number of prior civilizations that have collapsed. This appears to have happened when the return on human labor has fallen too low. This is much like the after-tax wages of non-elite workers falling too low. Wages reflect not only the workers’ own energy (gained from eating food), but any supplemental energy used, such as from draft animals, wind-powered boats, or electricity. Falling median wages, especially of young people, are one of the indications that our economy is headed toward collapse, just like the other economies.
- The reason that collapse happens quickly has to do with debt and derivatives. Our networked economy requires debt in order to extract fossil fuels from the ground and to create renewable energy sources, for several reasons: (a) Producers don’t have to save up as much money in advance, (b) Middle-men making products that use energy products (such cars and refrigerators) can “finance” their factories, so they don’t have to save up as much, (c) Consumers can afford to buy “big-ticket” items like homes and cars, with the use of plans that allow monthly payments, so they don’t have to save up as much, and (d) Most importantly, debt helps raise the price of commodities of all sorts (including oil and electricity), because it allows more customers to afford products that use them. The problem as the economy slows, and as we add more and more debt, is that eventually debt collapses. This happens because the economy fails to grow enough to allow the economy to generate sufficient goods and services to keep the system going–that is, pay adequate wages, even to non-elite workers; pay growing government and corporate overhead; and repay debt with interest, all at the same time. Figure 2 is an illustration of the problem with the debt component.
Where Did Modeling of Energy and the Economy Go Wrong?
- Today’s general level of understanding about how the economy works, and energy’s relationship to the economy, is dismally low. Economics has generally denied that energy has more than a very indirect relationship to the economy. Since 1800, world population has grown from 1 billion to more than 7 billion, thanks to the use of fossil fuels for increased food production and medicines, among other things. Yet environmentalists often believe that the world economy can somehow continue as today, without fossil fuels. There is a possibility that with a financial crash, we will need to start over, with new local economies based on the use of local resources. In such a scenario, it is doubtful that we can maintain a world population of even 1 billion.
- Economics modeling is based on observations of how the economy worked when we were far from limits of a finite world. The indications from this modeling are not at all generalizable to the situation when we are reaching limits of a finite world. The expectation of economists, based on past situations, is that prices will rise when there is scarcity. This expectation is completely wrong when the basic problem is lack of adequate wages for non-elite workers. When the problem is a lack of wages, workers find it impossible to purchase high-priced goods like homes, cars, and refrigerators. All of these products are created using commodities, so a lack of adequate wages tends to “feed back” through the system as low commodity prices. This is exactly the opposite of what standard economic models predict.
- M. King Hubbert’s “peak oil” analysis provided a best-case scenario that was clearly unrealistic, but it was taken literally by his followers. One of Hubbert’s sources of optimism was to assume that another energy product, such as nuclear, would arise in huge quantity, prior to the time when a decline in fossil fuels would become a problem.
The way nuclear energy operates in Figure 2 seems to me to be pretty much equivalent to the output of a perpetual motion machine, adding an endless amount of cheap energy that can be substituted for fossil fuels. A related source of optimism has to do with the shape of a curve that is created by the sum of curves of a given type. There is no reason to expect that the “total” curve will be of the same shape as the underlying curves, unless a perfect substitute (that is, having low price, unlimited quantity, and the ability to work directly in current devices) is available for what is being modeled–here fossil fuels. When the amount of extraction is determined by price, and price can quickly swing from high to low, there is good reason to believe that the shape of the sum curve will be quite pointed, rather than rounded. For example we know that a square wave can be approximated using the sum of sine functions, using Fourier Series (Figure 4).
- The world economy operates on energy flows in a given year, even though most analysts today are accustomed to thinking on a discounted cash flow basis. You and I eat food that was grown very recently. A model of food potentially available in the future is interesting, but it doesn’t satisfy our need for food when we are hungry. Similarly, our vehicles run on oil that has recently been extracted; our electrical system operates on electricity that has been produced, essentially simultaneously. The very close relationship in time between production and consumption of energy products is in sharp contrast to the way the financial system works. It makes promises, such as the availability of bank deposits, the amounts of pension payments, and the continuing value of corporate stocks, far out into the future. When these promises are made, there is no check made that goods and services will actually be available to repay these promises. We end up with a system that has promised very many more goods and services in the future than the real world will actually be able to produce. A break is inevitable; it looks like the break will be happening in the near future.
- Changes in the financial system have huge potential to disrupt the operation of the energy flow system. Demand in a given year comes from a combination of (wages and other income streams in a given year) plus the (change in debt in a given year). Historically, the (change in debt) has been positive. This has helped raise commodity prices. As soon as we start getting large defaults on debt, the (change in debt) component turns negative, and tends to bring down the price of commodities. (Note Point 6 in the previous section.) Once this happens, it is virtually impossible to keep prices up high enough to extract oil, coal and natural gas. This is a major reason why the system tends to crash.
- Researchers are expected to follow in the steps of researchers before them, rather than starting from a basic understudying of the whole problem. Trying to understand the whole problem, rather than simply trying to look at a small segment of a problem is difficult, especially if a researcher is expected to churn out a large number of peer reviewed academic articles each year. Unfortunately, there is a huge amount of research that might have seemed correct when it was written, but which is really wrong, if viewed through a broader lens. Churning out a high volume of articles based on past research tends to simply repeat past errors. This problem is hard to correct, because the field of energy and the economy cuts across many areas of study. It is hard for anyone to understand the full picture.
- In the area of energy and the economy, it is very tempting to tell people what they want to hear. If a researcher doesn’t understand how the system of energy and the economy works, and needs to guess, the guesses that are most likely to be favorably received when it comes time for publication are the ones that say, “All is well. Innovation will save the day.” Or, “Substitution will save the day.” This tends to bias research toward saying, “All is well.” The availability of financial grants on topics that appear hopeful adds to this effect.
- Energy Returned on Energy Investment (EROEI) analysis doesn’t really get to the point of today’s problems. Many people have high hopes for EROEI analysis, and indeed, it does make some progress in figuring out what is happening. But it misses many important points. One of them is that there are many different kinds of EROEI. The kind that matters, in terms of keeping the economy from collapsing, is the return on human labor. This type of EROEI is equivalent to after-tax wages of non-elite workers. This kind of return tends to drop too low if the total quantity of energy being used to leverage human labor is too low. We would expect a drop to occur in the quantity of energy used, if energy prices are too high, or if the quantity of energy products available is restricted.
- Instead of looking at wages of workers, most EROEI analyses consider returns on fossil fuel energy–something that is at least part of the puzzle, but is far from the whole picture. Returns on fossil fuel energy can be done either on a cash flow (energy flow) basis or on a “model” basis, similar to discounted cash flow. The two are not at all equivalent. What the economy needs is cash flow energy now, not modeled energy production in the future. Cash flow analyses probably need to be performed on an industry-wide basis; direct and indirect inputs in a given calendar year would be compared with energy outputs in the same calendar year. Man-made renewables will tend to do badly in such analyses, because considerable energy is used in making them, but the energy provided is primarily modeled future energy production, assuming that the current economy can continue to operate as today–something that seems increasingly unlikely.
- If we are headed for a near term sharp break in the economy, there is no point in trying to add man-made renewables to the electric grid. The whole point of adding man-made renewables is to try to keep what we have today longer. But if the system is collapsing, the whole plan is futile. We end up extracting more coal and oil today, in order to add wind or solar PV to what will soon become a useless grid electric system. The grid system will not last long, because we cannot pay workers and we cannot maintain the grid without a financial system. So if we add man-made renewables, most of what we get is their short-term disadvantages, with few of their hoped-for long-term advantages.
The analysis that comes closest to the situation we are reaching today is the 1972 analysis of limits of a finite world, published in the book “The Limits to Growth” by Donella Meadows and others. It models what can be expected to happen, if population and resource extraction grow as expected, gradually tapering off as diminishing returns are encountered. The base model seems to indicate that a collapse will happen about now.
The shape of the downturn is not likely to be correct in Figure 5. One reason is that the model was put together based on physical quantities of goods and people, without considering the role the financial system, particularly debt, plays. I expect that debt would tend to make collapse quicker. Also, the modelers had no experience with interactions in a contracting world economy, so had no idea regarding what adjustments to make. The authors have even said that the shapes of the curves, after the initial downturn, cannot be relied on. So we end up with something like Figure 6, as about all that we can rely on.
If we are indeed facing the downturn forecast by Limits to Growth modeling, we are facing a predicament that doesn’t have a real solution. We can make the best of what we have today, and we can try to strengthen bonds with family and friends. We can try to diversify our financial resources, so if one bank encounters problems early on, it won’t be a huge problem. We can perhaps keep a little food and water on hand, to tide us over a temporary shortage. We can study our religious beliefs for guidance.
Some people believe that it is possible for groups of survivalists to continue, given adequate preparation. This may or may not be true. The only kind of renewables that we can truly count on for the long term are those used by our forefathers, such as wood, draft animals, and wind-driven boats. Anyone who decides to use today’s technology, such as solar panels and a pump adapted for use with solar panels, needs to plan for the day when that technology fails. At that point, hard decisions will need to be made regarding how the group will live without the technology.
We can’t say that no one warned us about the predicament we are facing. Instead, we chose not to listen. Public officials gave a further push in this direction, by channeling research funds toward distant theoretically solvable problems, instead of understanding the true nature of what we are up against. Too many people took what Hubbert said literally, without understanding that what he offered was a best-case scenario, if we could find something equivalent to a perpetual motion machine to help us out of our predicament.
By TAKASHI NAKAMICHI
Updated Aug. 11, 2015 6:13 a.m. ET
TOKYO—An adviser to Prime Minister Shinzo Abe called Tuesday for fresh stimulus of more than $20 billion if data next week show the economy is shrinking, highlighting concern that Mr. Abe’s revival plan is stalling.
Japan’s gross domestic product likely shrank an annualized 1.9% in the April-June quarter, dragged down by weaker exports and consumer spending, in a reversal from solid growth in the first quarter of 2015, according to a poll of 20 economists by The Wall Street Journal. The government will release the GDP figure on Monday.
I am astounded that this country has not yet imploded….
Let’s remember the rural poor elderly in Japan group together in a town government building to stay warm in the winter. Easy, cheap, practical, traditional(?).
I’m even more astounded that the serfs have not picked up on what the Banksters are doing to their economy and currency. It’s taking place around the world and it’s blatant.
“We Made It Wider!” Hank Paulson Bursts Out Laughing When Asked About Wealth Inequality”
Rodster, I am a serf. I know what is happening. If I could think a plan of action that might work I would do it. Do you have a plan? I have not seen anyone with a plan. Including the part of the plan that says what we do when we start to be effective and the full force and assassination squads of the PTB kill us.
I’m also a serf and the for me plan is to let the system collapse. It can’t be saved.
Rodster, I agree it can not be saved. We are at the shooting phase. Just trying to avoid being too oppressed by the new local warlord.
The way things are going Ed, it’s possible there won’t be any warlords to worry about.
Global Warming seems not to help the Oil Industry tap the Arctic
Here be desperation http://www.zerohedge.com/news/2015-09-07/glencore-capitulates-scrambles-preserve-investment-grade-rating-selling-equity-and-a
Commodity prices will not recover… beginning of the end?
I think, it QE4 fails to inflate commodity prices, we will know the end is nigh.
Storm Front, part 5
Posted on September 6, 2015
THE EX-GROWTH ECONOMY: ENERGY, STRUCTURE – OR CHOICE?
This fifth instalment in what began as a trilogy looks at growth, though this is not the intensely statistical analysis of growth originally intended. I think we can get at the growth conundrum more simply.
In summary, there are three factors that can be identified as undermining growth:
– A trend towards an ever higher “energy cost of energy”.
– A long-established switch from “hard” to “soft” output.
– A cultural preference for forms of enrichment that are quick and speculative, rather than gradual and deep-rooted.
China – out of bullets?
One of the unexplored problems surrounding the Chinese slowdown is the relative lack of fiscal stimulus to play a meaningful role. Even leaving aside any discussion of credit and borrowing, though local governments being bailed out is never a good sign, it is unlikely that attempting to stimulate the economy on the fiscal side would have even a minimal impact. Stimulus capacity is exhausted in China.
Corporately, firms are over leveraged with massive surplus capacity. Governments are also over leveraged with rapidly falling revenues and burdened with white elephant projects from the 2009 stimulus led building and credit orgy. The government would be better advised to simply drop money from helicopters than try and kick start the world’s second largest economy by pushing on string. Think of China as being near the zero bound of fiscal policy.
There Goes Europe
T he desperate wish in what is loosely called the West to at least appear morally correct is unfortunately over-matched by the desperation of people fleeing unstable, overpopulated places outside the West, and it is a fiasco beyond even the events of the moment.
The refugee / immigrant crisis around the Mediterranean is a preview of a horror show to which there is no end in sight, and is certain to escalate. So anyone who indulges in fantasies about organizing an orderly, rational distribution of displaced persons for the current wave, is badly missing the point. Wave beyond wave awaits after the this one. And then what will the well-intentioned sentimentalists say? We wanted to do the right thing… we meant well… we cried when we saw the little boy dead on the beach….
Yes, the tragic intrusions of the US military in Iraq, Libya, Somalia, Syria, and elsewhere have been reckless and stupid. But that is not the whole story. The desert nations of the Middle East and North Africa (MENA) have populations abnormally swollen by a century of oil-and-gas-based agriculture, really by the benefits of Modernity in general. Now that the oil age is chugging to an unruly crack-up, and Modernity with it, and the earth’s climate is doing wonky things, and the rich nations to the north have faked their finances to the point of bankruptcy, well, circumstances have changed.
A whiff of what is coming …. everywhere…. when the power goes off … and the grocery stores are empty
The sad reality is that it is becoming impossible to sustain 7B people any longer. The artificial world (powered by net energy from burning FF) is beginning to contract. People on the fringes are no longer needed by (and have no place within) the system as it contracts. Reality bites.
Gail, Deflation initiated protest or call it a riot in Europe. There are numerous YouTube video links in the article which mostly shows the farmers throwing hay into a piece of farming equipment that shoots the hay out at about 15 feet – call it a hay cannon.
So it would appear there are deflationary forces afoot, but as we know CB’s intent on countering those effects, well as best they can.
Meanwhile In Brussels, Farmers Take On The Riot Police With “Hay Cannon”
Submitted by Tyler Durden on 09/07/2015 – 11:53
As events unfold that have to be seen to be be believed in Belgian capital Brussels, European farmers – protesting plunging food prices, blamed on Russia’s food embargo, which was retaliation to Europe and US sanctions – are demanding EU intervention to bail them out. What was originally a parade of tractors quickly turned violent as farm equipment rammed police barricades and police released tear gas and water jets in response to the farmers unleashing their “hay cannon.” Boomerang anyone? “EU farmers are paying the price for international politics…There have been hundreds of suicides as a result of disastrous agricultural policies.”
Not good! Sorry this got comment got caught in my spam filter earlier.
THE DEVIL. As far as I went, yes. But I will now go further, and confess to you that men get tired of everything, of heaven no less than of hell; and that all history is nothing but a record of the oscillations of the world between these two extremes. An epoch is but a swing of the pendulum; and each generation thinks the world is progressing because it is always moving. But when you are as old as I am; when you have a thousand times wearied of heaven, like myself and the Commander, and a thousand times wearied of hell, as you are wearied now, you will no longer imagine that every swing from heaven to hell is an emancipation, every swing from hell to heaven an evolution. Where you now see reform, progress, fulfilment of upward tendency, continual ascent by Man on the stepping stones of his dead selves to higher things, you will see nothing but an infinite comedy of illusion. You will discover the profound truth of the saying of my friend Koheleth, that there is nothing new under the sun. Vanitas vanitatum—
Man and Superman – GBS
The Devil and God. Heaven and Hell. Sin and Redemption. Think it’s bigger than any of that that this time though. Much, much bigger, and yet much, much, simpler. All the religious baggage we’ve carried around all these millennia were marginally useful in simpler times (most notably for those seeking control), but they’re really of no use now that we’ve metastasized into the virulent organism we’ve become after the emergence of homo industrialist. Simply put, thanks to our only recently discovered technological capabilities, which were themselves almost entirely due to the simple dumb luck of discovering the immense latent energy trapped in fossil fuels, we’ve elevated ourselves above our natural environment, albeit without the understanding to do so. And now we’re going to pay the piper. And fo’ a motherfu**er at that!
But I like to look at it from all different angles. It’s easy and tempting to view all this (our impending doom) as “simply inevitable,” and, like many others, I view it that way “all the time.” But at other times, I stop and think about what might have been as well.
Certainly the period just prior to, through just after the end of WWII, was a pivotal point in human history. The US had won the race to harness the atom and had the choice of using it for good or ill, and how to proceed after that. We all know the history now of course, but who can possibly imagine that US choices at the time were in any possible way optimal? Even Robert Oppenheimer was clear headed enough to realize that.
And really, hasn’t everything after that just been one sort of “race” or another to be first to accomplish some sort of equally idiotic and destructive economical/technological goal or another? And here we sit 70 years on wondering how it all went so wrong.
One choice at a time, each doubling down on the one made before it. How do you break an exponential nuclear chain reaction? Preferably early on, but at any step along the way.
After listening to those Natalie Merchant links I posted above again, which always inspire me, I think I’d like to stretch out and expound some more, since Gail has been so kind to host this blog where we can do so.
I had an unusually long and constructive conversation with a local acquaintance today, during which I think I actually swung his viewpoint on current affairs without trying very hard at all (and in fairness, I think he was simply ready to be swung) . “Mike” might best be described as a proto-capitalist, so I was quite surprised, to say the least.
But suffice it to say, even among the “true believers” these days, the idea that we might be locked into whatever we have now – or less – for the foreseeable future is beginning to catch on, which is to say, economic or otherwise “growth” on the personal/local scale is already being written off.
All of which is I think entirely good and healthy. How will the exponential growth insanity of the current age be debunked? One personal experience/anecdote at a time.
Will it be enough to “save” us” Who knows, but who can say exactly from what it is we need to be “saved” in the first place?
And even more relevantly and importantly, how in the world will we retrace our way back to the simpler times from which we’ve came, once we’ve regained our senses and realize that that’s what we need to do? And the obvious answer is, we won’t, and we can’t, since we’ve long since burned those bridges as well in our relentless commitment to “progress” all along the way. Where will we turn from there? Toward the inevitable once again. Our own mortality and the inevitability of our situation.
Free your mind.
Neo: Why do my eyes hurt?
Morpheus: You’ve never used them before.
“Certainly the period just prior to, through just after the end of WWII, was a pivotal point in human history. The US had won the race to harness the atom and had the choice of using it for good or ill, and how to proceed after that.”
Just a sidenote, the Germans were really close to having one of their own. Hitler pulled the plug on the program, but it continued on until the end of the war. The US did it with a lot of help from Germans who fled and English scientists, it wasn’t really a one country endeavor.
A lot of new developments came out from the war, from both sides, which isn’t surprising since just about the whole world was working on winning…
“Just a sidenote, the Germans were really close to having one of their own. Hitler pulled the plug on the program, but it continued on until the end of the war.”
Actually not. They had a heavy water facility that was sabotaged by Norwegian special forces via Brit intelligence. The Nazi’s then decided to move the operation, putting the concentrated heavy water in railway tanks, and started moving them on rails. Special forces got word the train would need to go on a ferry for part of the trip and placed charges in the hull. The charges detonated part way across the lake and the ferry with the concentrated heavy water sank, ending their efforts to build an atomic bomb. A few citizens that did not know anything about what was going on drowned but that was decided as preferable to letting them know before the crossing and possibly tipping off the Nazi’s.
I can second that. The german team was headed by Otto Han. He and colleagues, including Werner Heisenberg of uncertainty principle fame, were captured by the allies and when bugged, interogated, gave the impression that they were not that far along with their A-bomb development. Han had a crude graphite air-cooled reactor pile at the Max Planck Institut fur Physik in suburban Berlin (similar to Fermi’s).
I got a tour of the place back in the late 1980s. The only giveaway outside was it was the only building that was round. Exterior was red brick and ivy outside, light-green painted, bare cement on the inside with heavy-lift overhead cranes. By the time the allies got there at the end of WWII, the soviets had already taken off with their enriched uranium.
Here’s a YouTube video on what happened to Nazi heavy water in WWII. It’s the same as what I outlined in my previous message.
The Nazi atomic bomb project was half-assed and going nowhere.
Wikipedia is a highly politicized organization. It is fine for none political question like how far away it the moon. On issues involving Zionist interests it serves its maters.
For a more complete telling, read The Making of the Atomic Bomb by Richard Rhodes.
to the moon … its masters
Perhaps the better question is what did the US do with it, once they had unquestioned sole possession? Once again, the answer is history; we used it, not once, but twice, on an enemy which was by all accounts vanquished. And then we brandished it flagrantly in the aftermath to begin what what would later be referred to as the Cold War.
Regardless of the obvious military implications, I would argue that such machinations began an intellectual, military, and economic “arms race” that continues to this day, which turns on the question of whether or not you accept human technology and its purveyors as your “savior” or not. It really was that basic of a question.
And in the aftermath, we’re all – the people of Iran most pointedly currently – still facing that same basic question every day.
As an aside, it is most instructive how a sharp mind works in the way it communicates. GBS does not waste words or indulge in emotive crappola which is endemic everywhere.
Oil Bears Cashing Out From Crude Market’s Roller-Coaster Ride
d 7.7 percent.
“There’s a lot of nervousness in this market,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Everyone is retrenching in the face of this extreme volatility.”
…for a signal from OPEC or the rig count, or some kind of clear signal that the oversupply is going to be addressed.”
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Every once in a while Max Keiser has on a really good segment. At the link above there is one on rule 48. The 2nd half has a guest who does a great job of summarizing our current economic situation, calling it much worse than 08.
Thanks! I would agree.
Thanks for the link. Gerald Celente is one of my favorite commentators. I love his no BS style of communicating.
I too love listening to Gerald celente.
That’s a link to an article by Rune Likvern, about emerging growth economies higher leveraging when the value of the dollar was lower vs. lower leveraging when the dollar has recently gone up in relative value to most other currencies. In other words we are now in a period of deleveraging (less money borrowed) for emerging growth economies.
I think Rune’s graph with respect to Chinese debt is especially revealing. Its debt growth started slowing in January 2014. That by itself could be a major player in the drop of commodity prices.
As I understand the situation, when these currencies fall relative to the dollar, it becomes more expensive to pay off existing debt that is in US dollars. They probably don’t to want to take on any more US denominated debt.
Which may be why Russia and China want to trade oil in a currency other than the USD.
I have an idea regarding measuring the time: as we are going deeper and deeper into debt, we should add minus to every subsequent year, i.e. now we have the year -2015, the next year will be -2016…
This seems to contradict your outlook a little … more optimistic view point
Thanks for sharing! I never even heard of the guy before, but he is saying a lot of the things I have been saying and I only listened to the first half hour.
Jeremey Rifkin is one of the first to sound the alert of the crisis we, humans, are facing with his ground breaking book, “Entropy: A New World View” back @ 1980 or so.
Here is the link and can be bought cheaply
Basicly, laid it all out and warned us here today, no surprise.
I recommend his other books too. Namely, “Algeny”
In this work, he puts forth the point our worldview is shaped by theories that condone our actions, such as, the theory of “progress”, “survival of the fittest” which Darwin made popular and gave justification of the British Imperial expansion of the world and its colonies. Fast Eddy likes to drum roll that a lot here.
Needless to say, most of these messages were/are being ignored. I should know, I am a witness and from what I can determine the “invisible hand” theory is at work, LOL.
“Jeremey Rifkin is one of the first to sound the alert of the crisis we, humans, are facing with his ground breaking book”
I don’t necessarily agree with his outcomes. I don’t think “zero margin” is probable. But I do agree communications is lowering the margins and we are seeing downward pressure from the competition in the marketplace as a result
Mr. Rifkin has been a real long, long time and has been all over the map as far as solutions are concerned. I really have not kept up with his thoughts since the hydrogen economy book. Let’s say I prefer it here now at FW with Gail. & company
1.23 minutes… too long… can you post the punchline?
Solar and wind will save us all.
The problem isn’t with the source as much as it is with the grid design.
More optimistic… And a bunch of nonsense!
Rifkin says RE will power transport, communications and energy (electric and industry and farming and farm fertilizers). Simple story dressed up with flash hype internet, internet of things. Let’s not talk pollution, over population, phosphorus, cost to build out RE, cost to continuously re-build RE (aka maintenance, depreciation, replacement).
Solar panels and wind turbines are not fuel so how can they power anything without fuel? Do they build themselves? Where does the fuel come from to build the electrical appliances solar panels and wind turbines will power? What about the fuel required to maintain infrastructure? What about a 24/7 reliable fuel source to keep the grid in balance? I am confused help me Understand how solar panels and wind turbines can fit into our modern world!
Why not just create fuel from wind and solar directly? How come that’s not being done? Plants do it. Can’t we?
We can and we are, that is what they are afraid of. What they are saying is because the worlds economy revolves around fossil fuels, there will be an economic collapse if we switch. Which in a number of cases for the posters, they have a vested interest in promoting a collapse. Maybe miners, oil company employed, trade in FF stocks and futures, etc, they probably will collapse. We saw a bunch of brick and mortars go out of business after people caught on to the internet so it is pretty predictable. The world is still alive, I don’t know why.
Please show me where this is being done in any significant quantity. I think the posters here have a vested interest in reality. Wind and solar are just too diffuse an energy source.
Plants are immobile and don’t build industrial societies. Other than that, you’re right on track.
“Solar panels and wind turbines are not fuel so how can they power anything without fuel?”
They provide energy. Fuel provides ener
Do they build themselves? Where does the fuel come from to build the electrical appliances solar panels and wind turbines will power? What about the fuel required to maintain infrastructure? What about a 24/7 reliable fuel source to keep the grid in balance? I am confused help me Understand how solar panels and wind turbines can fit into our modern world!
Solar panels and wind turbines do not provide energy. They capture energy from the sun and wind. They are middle men. The more middle men ones has between the fuel source and the work desired means less efficiency. Solar panels and wind turbines also have many hidden middle men that create them and the infrastructure they need to be useful. You can burn coal, natural gas and crude oil directly and get heat with no middle man. Solar panels and wind turbines cannot be burned like fossil fuels to power industrial society. Huge difference.
“They capture energy from the sun and wind. They are middle men. The more middle men ones has between the fuel source and the work desired means less efficiency. Solar panels and wind turbines also have many hidden middle men that create them and the infrastructure they need to be useful. You can burn coal, natural gas and crude oil directly and get heat with no middle man. Solar panels and wind turbines cannot be burned like fossil fuels to power industrial society. Huge difference.”
Distributed energy is far more cost effective because of the elimination of the middle man and the tremendous cost of overhead involved in maintaining the infrastructure.
India figured out it was cheaper to use distributed renewables then to install and maintain the massive infrastructure. Thus 175GW of renewable energy is the goal for 2022 in that country.
There are places in the US where it also makes sense.
Let’s see if this works without a keyboard issue..
“Solar panels and wind turbines are not fuel so how can they power anything without fuel?”
Fuel provides energy. Energy is what provides the power to do useful things. Especially when you get to talking about the grid, the source of the energy is irrelevant.
“Do they build themselves? ”
I am guessing people currently build most of them, with a lot of robotic help. There is a LOT of interest in self-replicating machines, so there could be someone working on it. I wouldn’t put it out of the question.
“Where does the fuel come from to build the electrical appliances solar panels and wind turbines will power?”
Currently I would guess most of it comes from fossil fuel sources, although China is like the #1 country for renewable energy investments and the US is #2 and those countries cover the vast majority of renewable energy manufacturing as well.
“What about a 24/7 reliable fuel source to keep the grid in balance?”
Right now the techniques used for grid balancing is very inefficient. It is going to change.
Solar and Wind are not the most ideal for providing energy 24/7, there are methods that use storage to alleviate the issue, and there are other renewable energy sources as well.
” I am confused help me Understand how solar panels and wind turbines can fit into our modern world!”
It seems like people are making them fit in well so far.
They are “fitting in” because they must. They are the final throw to prolong BAU and BAU is totally and absolutely dependant on fossil fuels. Alt-E is akin to getting out and pushing your car for 1 out of every 100 yards. The person pushing though is still dependant on fossil fuels to survive. Bio fuels were once declared the great white hope but true accounting soon put paid to that notion.
Alternative energy devices had nil chance in the era of cheap fossil fuels and they weren’t required or developed because of that simple fact. They are parasites, and soon will go the way of the proverbial dodo, as demand destruction takes away the necessity to even use them, let alone rely on them.
Remember we are burning fossil fuels now as fast as they can be mined, extracted and refined. Alt-E has had no affect on that. All they do is, as I pointed out earlier, is extend the burn for as long as possible.
Alt-E is akin to getting out and pushing your car for 1 out of every 100 yards. The person pushing though is still dependant on fossil fuels to survive.
“Alt-E is akin to getting out and pushing your car for 1 out of every 100 yards. The person pushing though is still dependant on fossil fuels to survive. Bio fuels were once declared the great white hope but true accounting soon put paid to that notion.”
Alt-E is currently pushing over 5% of the US grid. Biofuels are over 5% percent of transportation fuel.
We have a long way to go, but we are making progress.
If I ignore you do you still exist?
This is for Madflower.
Bio fuels ( a complete misnomer) are subsidised to the tune of billions of dollars world wide. They are environmentally destructive and a losing proposition in regards to EROI.
See how you manipulate facts…like saying Alt-E “pushing” 5% of the grid. They cannot and will never power the grid, they simply subsidise it, to allow fossil fuels to last longer. Take away the fossil fuelled grid component and Alt-E is a white elephant. They are the stone heads of a desperate civilization.
“Take away the fossil fuelled grid component and Alt-E is a white elephant. They are the stone heads of a desperate civilization.”
Which fossil fueled grid component are you referring to? We are already changing how the grid operates to make it more efficient and easier to manage by adding storage. It incidentally also helps renewable energy, but it isn’t the main reason for the interest from utilities.
Renewable energy isn’t a white elephant, but it might be a stone head, since those are consistent and last a very long time … even longer without all the acid rain pouring down on them.
If a person cannot understand (and makes no attempt to understand) why solar panels and wind turbines (on the grid) are a drag on the net energy that powers industrial civilization, I will ignore anything and everything else they say.
“If a person cannot understand (and makes no attempt to understand) why solar panels and wind turbines (on the grid) are a drag on the net energy that powers industrial civilization, I will ignore anything and everything else they say.”
If a person cannot comprehend what changes need to be made to improve industrial civilization to allow it to grow. They are part of the problem.
And some people should just stick to watching their MSM drivel and drinking the kool aid that it delivers…
Pass this along to Jeremy
Fast Eddy, thank you for the background music for our drumming circle and please we invite you to join us! Please bring some sage for the purification smudge shell and a Eagle feather to invite the Spirits of universal Peace and Love to bless us all.
Jeremy, I will next to the Omega Institute I had one ask to use my drive which is steep as a StairMaster. I have a neighbor who found a bunch of them in the stall with his horde. they were braiding the horse tail. Oh we love our sewage dropping, don’t know what a one lane road means, Omega hippie wanta bes Of course we most enjoy the group of five doctors who bought the land to start Omega and now make 2 million per year as trustees of the institute. It is tax free because it is not for profit. hahahahaha
I live next to
Maybe Fast Eddy can join us all in the medicine dance
If politicians surround themselves with people like this, no wonder they are so clueless!
Politicians today are useful for (I refrain from saying good at) only one thing: putting lipstick on a pig and trying to sell it for twice its value @ 0% interest for 72 months. And every election they have to sell twice as many pigs as the last. Eventually the people catch on that they are on a treadmill to nowhere.
Evolution is a random diffusion mixed with natural selection. Natural selection is selecting for only one thing those genes+culture that produce the most surviving descendants. It is not selecting for intelligence unless of course that is a thing that produces lots of surviving descendants, which at least in the case of women seem to be not the case. Probably also not the case for males.
Religious fundamentalism as seen in Mormons, Hasidic Jews, hard line followers of Islam seems to produce lots of surviving descendants.
Homosexual, hyper educated, financially well off, does not seem to produce many descendants.
My prediction about the future; it will be populated by the descendants of religious fundamentalists. The enlightenment is toast, the EU experiment is toast, rights/freedom for the common person toast.
L.Ron Hubbard gave a talk to a group of sci fi writers saying one could make more money starting a religion then writing for 3 cents a word….
“Homosexual, hyper educated, financially well off, does not seem to produce many descendants.” ……They are minorities. Relatively the wealthy produce a great deal of descendants but do not have descendants for long, as the wealth has to be distributed and gets frittered away. In the end the majority groups simply overwhelm them. Eventually “wealthy” descendants join them. Everything is relative though. I doubt in the long run that the hierarchy will change a great deal.
Yes, it is like a standing wave. The material that makes it up is continuously changing but it stays the same. Yes, the “rich” will remain rich even if it is a completely different lineage of humans. The poor will always be with us as Jesus said.
Of course Jesus response was program of radial egalitarianism with no concern for success no concern for getting ahead, no concern for winning. John Crossan’s response to Jesus in the end of his book, The Historic Jesus, is a classic. Basically Crossan says I wrote a really good book about you, Jesus says yes Dominic you did. Crossan says is that enough, Jesus says no Dominic it is not.
Why did Jesus call him Dominic when his name was John? As the saying goes, when you talk to Jesus, it’s called praying. When Jesus talks to you, it’s called paranoid schizophrenia.
John Dominic Crossan.
That is what we see in China when it builds massive empty cities. It is a mindless aping of something they have partially seen and partially understood. Sad, tragic, stupid, oh well.
Janis Joplin would have made such a GREAT old person living out her years these days. Guess it’s true; only the good die young.
eARTH, great post. It is so huge I can not do it justice. Let me simply say yes “a massive punch up” looks like the way it will go, to me.
Motherland, two different versions.
Thanks eARTH. Long been a follower of Nietzsche.
I’m changing my name to Disaffected, which has always been my true personality, to distinguish myself from the other james on this board, who in my mind, has a much better claim to the moniker. Thanks for the lengthy and considered post!
Accordingly, I am unabashedly a fan of james’ blog MEGACANCER ~ Exploring the pathology of industrial civilization from what I’ve read so far, and accordingly as well, I guess you could characterize me as a “cultural anarchist,” in principle at least. The moral conundrum of at once living, breathing, eating, and shitting as one of the biologically problematic many
constituting the current industrial civilization’s enabled overshoot of human capacity has plagued me since I first came to realize it, as well it should every sentient human being alive today. It’s in that sense, first and foremost, that I consider the use of the world “moral” whenever any human uses it.
Likewise, I’m never terribly impressed when another one of my fellow first worlders (of which I consider myself to be only marginally a part of) try to impress on me the need for this group or that to be supported, not supported, made war upon, exterminated, or whatever, based upon their qualifications to a first world mind. In the first place, only a first world mind could conceive of such a question, having given birth to the conditions that produced it in the first place; and in the second, only a first world mind could foolishly imagine that the same conditions won’t be applied to them when the time comes as well, which it inevitably will, based on the basic assumptions of a hierarchically-based exponential growth system.
Likewise as well, you seem to be afraid of the word “morality,” when in fact you should embrace it, for it’s the only thing that actually makes us human, and the one thing we try to deny when our morally bankrupt industrial system tries to persuade us otherwise. I’ll leave you with the final two paragraphs of james’ latest post over at Megacancer, which I think are just pure gold:
Looks like I screwed up the link. Let’s try it again:
MEGACANCER ~ Exploring the pathology of industrial civilization
Thank you eARTH, for the well-considered response. You are obviously one of well-developed intellect and fellow first-world developed capacity for “understanding,” if only particularly on our terms.
I agree that the fundamental and agreed upon “laws of civilization” and all that have not varied significantly here in the west at least since the Greeks, and that all that of that is well and fine as far as it goes.
The “fly in the ointment,” however, first presented itself when mankind discovered fossil fuel energy, first in the form of coal, and then in the form of oil, which has dominated our understanding of the world ever since. It’s fair to say that everything since has been a mirage.
In that sense, capitalism was a mere human-based inevitability. The “irrational exuberance” that oil-based energy and human-imagined capitalism were simply inevitable. It was “in our genes,” so to speak.
But I agree with your prognosis; our current situation transcends current diagnoses. It’s not a liberal problem, it’s not a conservative problem, it’s not a first world problem, and it’s not a third world problem. Its a HUMAN problem!
Who knows Disaffected, maybe we will return to hunter-gathering and one day “our” descendents will gather around the camp fire, pass around some intoxicating liquid or herb, and have a fine sing song. Nature itself will take care of breeding and selection. All will again be local and one.
After all of our disagreements, I think we’re mostly agreed, eARTH. Thanks for the exchange!
Frank Herbert’s eight volume long Dune series concludes [plot spoiler alert] our heroes just slipping by the skin of their teeth from the clutches of the grasping bankers/system/technology/the man to a place, far far away, beyond their grasp.
Collapse of the tight oil patch around Crested, Oklahoma seen through a camera video trip around the roads this native son drives and points out the change.
What he don’t see, the water pipes are gone along the roads, the traffic is down, the truck numbers are done and vacant property yards for oil.
Good to get your insights from time to time.
As for the allegedly revolutionary solar system, I’m more then doubtful, because they make a lot of noise around it, repeating “better than Google”, but they never explain how it works. At least I haven’t seen any explanation in any of the articles about it.
OTOH, I very much liked the video.. I also believe that we have far too much “focused on focusing” and been trained to forget about the rest of the picture. For sure it works -even very well- for a while, but at some point the ignored parts of the system become unavoidable, and unfortunately we no longer know how to -or can- deal with them (resource depletion, waste & pollution, diminishing returns & limits).
We have built an artificial ecosystem, which is unsustainable because it focuses only on our immediate benefit, and ignores that we’re only part of a much broader world.
Could we avoid it? not sure, especially since we started to control external energy ; those who did have been long exterminated and pillaged in order to fuel … us.
Back to the “broader view”, you have probably seen Albert Bates’ last post about “Distributed Intelligence” of the plants, their ability to communicate and sense their environment, that could be partly based on quantum mechanics. Another window opened on what we don’t know (which is the purpose of rationality, i.e. to measure its own limits).
Dear Finite Worlders
Just visiting. Two items which may interest you.
The subject of the Google engineers who ‘failed’ to show that solar energy would work was beaten to death on this blog. You might like to read this:
There has also been a lot of talk about the supposed ‘genetic determinism’ which dooms us all to anti-social behavior. For the real facts, see this relatively short video:
In recent days and hours there was a blitz by the western (both EU/US) private and public massmedia that it’s Europe’s duty to absorb all the immigrants en route (and into the future). It has the mark of clearly coordinated campaign to roll over public opinion to the contrary and also few notable dissenting governments mostly of the CEE + UK. Frankly, it’s pretty shocking, evidently someone needs this crises to push further agenda, e.g. this would make a great cover for financial system implosion etc.
It’s funny how they roll it according to a given script, this is along the precisely same line but few months older video on Europe bound immigration by well known U.S. propaganda outfit “VICE News” which is infamous for its onesided coverage of Syrian and Ukraine wars. What a joke, swedish passport owning “international person” now schooling about what should Europeans do, funny girl..
Europe Or Die (Full Documentary)
Death Boats to Greece (Part 1/2): Europe Or Die (Episode 2/4)
PS meanwhile in Belarus, actor/investor Depardieu dumps all properties in France and moves East
Indeed, agendas everywhere: manipulation of public perception on a huge scale. It is all very well co-ordinated, above all the drama at the Hungarian railway station. Wicked Hungarian Orban put in his place by Mamma Merkel: ‘Come to me all you poor and suffering!’ ‘Germany! Germany! ‘ Well, they all know their lines in the script.
Europe has a much-publicised demographic crisis, all those retiring boomers, decline in consumption, etc. ( Except Britain, which is stuffed to the gunwhales with high-reproduction lower-class, unskilled immigrants. )
According to economic orthodoxy, those retirees have to be replaced with new, younger, consumers: mass, truly mass, immigration is the perceived solution. But how to arrange it without negative effects at election time?
There is considerable opposition to economic migration in Europe, and it is growing as failed assimilation of earlier arrivals, and radicalistion of their children if Muslim, are known to be a problem, to say the least. Is a sure vote-loser, and also among established immigrant communities who do not want the boat rocked.
But who could turn down those poor trudging, paddling, Syrians? Even though about half the ‘asylum seekers’ are not from war zones, but the Balkans, and only 15 to 20% are women and children -so not really desperate people fleeing in terror. Many of them seem to have quite a bit of money, too,, if you pay close attention….
And of course, no discussion of whether the Gulf states and other Muslim nations (apart from Turkey, Lebanon) should be accepting their ‘fair share’ of their suffering co-religionists. For some reason, it is the ‘duty’ of Europe, and no-one else. Most strange!
In the end, not humanitarianism or ‘European ideals’, but money, commerce and consumption.
There are thousands videos about the situation from various points of interest, but this one fairly recent one just shows the sheer stupidity of it all. A scene where bunch of hired/imported nobodies from all over the ME, here enjoying tearing apart little agricultural setting/village/town other people put years of effort into make it relatively nice place to live. Sometimes ones just wishes there would be a sudden switch and this failed human virus departed this planet permanently..
They can make money selling war tourism. Come kill some people, rocket attack a religious build of your choice of faith, fire a 50 cal, … Why top dentists from Idaho would be will to pay top dollar.
That is a bizarre image there in that video. A tank in a desert fighting over what? Sand and scrub brush?
Matthieu Auzanneau (blog OilMan) published a new article “Limits to Growth: this time the wolf is here”.
It’s about the risk of deflationary spiral ; Gail has quite a lot of room in the 3rd part of the post.
Automatic translation seems to work:
The original in French:
Another core piece of the overall puzzle:
Look at the graphs it makes a lot of sense in terms of the madness now in Germany etc.
However, the overall mesage should be that there are several interlocked core trends like namely, demography and overconsumption saturation, fossil fuels falling EROEI, hyperinflation buildup inside the system (hidden credit-debts), environmental degradation preasures,..
All in all this presents evidently a deadly coctail for the next few decades, however I guess it is beyond futile to single only one “pet theory” out of them as the master pin, which would pierce the balloon soon. It’s simply unknown and unknowable future in the short term, act accordingly.
Interesting data about population decline. Recently, I made some observances of the population of Poland which experiences population decline:
This spring, I have seen a Polish movie Body/Cialo which is about an anorexic girl:
If you visit Poland, you see many skinny man and especially women, it is like the whole nation/all population is having some kind of anorexia. Like you are loosing something, like you are loosing energy. Furthemore, the Poland experienced big problems with food availability when the communist regime was falling in the end of 80s.
This observation is really striking. I observe this happening also in the Slovak population, but in Poland, you see it everywhere…
Maybe in case of Poland the sinking and more and more costly coal production in the absence of nuclear energy is playing the key role.
MG, please don’t exaggerate with your impressions. I live here and I don’t see these anorectic people. There are many skinny girls following the fashionable trends of being “a model”, but it’s quite usual for modern western societies. On contrary to your statement polish society recorded highest ratio of obesity in history (16%) compared to 11% in 1996.
my observations are not impressions. That fact, that the obesity is on the rise, does not mean that we do not have rising numbers of skinny people – both in Poland and Slovakia. These are not just “fashionable trends”, it has something to do with the energy: the energy intake and energy expenditure. There is some kind of imbalance that causes that the people lose their healthy proportions. These imbalances are caused also by the fact that the society moves from industrial to postindustrial work positions and lifestyles. The bodies needed by the service-based society does not have to be muscular.
The fact of the energy resource depletion (closing the coal mines in Poland, that Slovakia experienced in the past, too, but Slovakia and Czech Republic started to use nuclear insted of declining cheap coal for electricity generation) had strong influence on the move from industrial to service based economy. In case of Poland, the specific feature was a very high proportion of economically active population in agriculture during the communism, as the model of big industrial farms of Czechoslovakia was not present there, but individual family farms were preserved. It means, that Poland did not use the mass production industrial agriculture methods in such scale as Czechoslovakia in order to boost food production during the communism, which was probably the reason of the food shortages that Poland started to experience during the communism:
After the fall of communism, the number of economically active population in agriculture in Poland started to fall:
Thses two facts (no nuclear energy as compensation for the declining cheap coal and lack of industrial farms) brings me to the conclusion that there is something specific behind the unusual high number of thin people in Poland in comparison to what I am accustomed to see in Slovakia (or Czech Republic). But, I must stress again, I see that these skinny and thin people are on the rise in Slovakia and I bet this is not just a fashionable trend. It is about the changed lifestyles, the move from industrial (or agricultural) to service-based economy, which was induced by the depletion of the domestic resources.
I understand your conclusion, but IMO this goes too far.
The 1980s demonstrations were simply the consequence of Poland paying back debt to western bankers with food and other commodities. The debts were taken by Gierek in the 70s as way to reach western style consumerism. It ended badly, as you know with Solidarity movement and martial state for 7 years.
The food shortages in Poland were not caused only by paying back the debt, but also by declines in food production and problems in food distribution:
“This explosion of Poland’s interest burden in 1979-80 was the real background to the domestic unrest, strikes, and government austerity. Imports were suddenly canceled in the midst of construction of new projects. In domestic Polish terms, new investment plunged 9% in 1979. Agricultural output also fell, imposing food shortages. By 1980 Poland had a collapse in meat production of almost 20%. That July the government increased meat prices by 90%. The lid blew off, as protest work stoppages spread, demanding compensation for the higher prices.”
The levels of emmigration from Poland after 1989 were higher than the levels of emmigration from Czechoslovakia. Also Czechoslovakia did not experience population decline similar to Poland.
Czechoslovakia experienced no food shortages before the fall of the Soviet block, because it invested a lot into industrial farming methods and there were no such things as individual farmers who could revolt against the regime. And many such industrial farms collapsed after 1989 due to low subsidies in comparision with the subsidies provided by the Western countries to their farmers.
So, basically, the Polish agriculture, having better natural conditions, is, of course, more competitive than Slovak agriculture when the energy inputs are more costly. But I was writing about the past developments in the technology use in ramping up food production and maintaining the food distribution that caused that the communist regime in Czehoslovakia could last longer.
The fact that fall of the communist regime in Poland that started in the beginning of the 80s also meant that Poland was more open to the Western developments and the transition to the service-based economy could start sooner than in Czechoslovakia, or especially Slovakia, where the heavy industry was the core of the economy until 1989. In the 80s, the Polish economy was already in transition to the market-based economy:
So that is maybe the main reason why the service-based economy population characteristics are more pronounced in Poland. But in case of Slovakia, there is of course also this mountaineous character of the land, which requires individuals with more physical strength…
We’re Mired in Unprecedented Global Deflation
Ron Paul, ex-Congressman and father of US Presidential candidate Rand Paul has a commercial on CNN predicting a coming global financial crash. Check out this link: http://www.ronpaulmessage6.com.
Islamic State is going to take the Caucasus and central Asia off the Russians too. Russia has not really been rolled back properly since its defeat in the cold war. It is still trying to play the big guy there, in eastern Europe and in the ME. Russia still thinks that it is going to play it big in those lands and that there is not going to be any retaliation, like in Afghanistan and Syria. Russia is going to get kicked back into Russia. It is only a matter of time – tankies be damned.
Not so fast… Afghanistan is the Central Asia pivot, but IS is far from taking over.
Oil after plummeting in price, has made a small comeback lately and leveled off at a 46 handle for WTI & 50 for Brent. Still very low for most producers.
Zero Hedge has the view that hyperinflation cannot be prevented by debt deflation. A good read and yet a different perspective, right or wrong. A good read for Gail to help disseminate its accuracy or not.
In that article ck. out the monetary base chart in which it has quadrupled from 800 to 3200 billion (.8T to 3.2T) from 2009 to present in 2015. QUADRUPLED, that’s X4 in 6 years. I suppose if it can level that’s one thing but if the trajectory maintains any kind of a similar pace then zingo to the Moon Alice!
The article is written in a rather unkind manner to those with differing views, which is unfortunate but nonetheless it makes an interesting point.
I’m not replying to myself, just adding to the above information on potential hyper-inflation. In this case presented by the Automatic Earth in their current expose’.
“1. Many hyperinflationists believe that the deflationary death plunge is likely, if not necessary, before the collapse of confidence. Deflation is the theme of Act 5 of our five act play, but hyperinflation is the final scene of Act 5. In other words, deflation and hyperinflation are often presented as either-or, when in fact it can be both, in rapid succession.”
I haven’t studied the history, but based on what is going on now, I can see one following the other in close succession, or the banking system simply closing, or only letting depositors get nominal amounts of money out.
In some ways, the financial system is like a rubber band that eventually breaks.
They are going to print. That is all but guaranteed. If there is one thing that I am almost certain of, that I can say, “I don’t know anything else, but I do know this” is that the powers that be will print.
I don’t see how you get deflation when the whole world uses fiat currency that is conjured from nothing. Price declines of some sorts, yes, but that is very different from a general deflation.
The deflationists strike me as being too intellectual about all of this, and take pleasure in refuting simple logic, as if it proves their greater understanding of the situation, when all it proves is that they don’t want to accept basic truths.
I agree dolph9. Burgeoning debt levels require monetization including a minimum level of inflation. Any factors pushing in a deflationary direction must be more than offset by the Fed.
The problem is it does not address the root of the problem, but instead fiat moves in a direction of eventuating in hyper-inflation, like the Weimer Republic. Most people do not realize hyper-inflation when it happens occurs very quickly, on the order of a couple of weeks. It just needs sufficient push in that direction before it finally gives way like a damn suddenly breaking.
spelling error – dam, not damn.
The thing is…
They never stopped printing …. the US apparently is not pumping out more cash right now … but other central banks are — big time. See BOJ – ECB … I assume PBOC is as well…
Also can anyone name a country whose debt is not increasing?
The money tap is roaring … yet deflation is the order of the day…
It looks to me like we are pushing on a string — that simply increasing QE globally will have little or no impact on commodity prices…
I do not think money printing has been what has driven demand rather it has been China that has kept us from collapsing into a deflationary death spiral — they have of course done this by running up massive debts building stuff that was not needed and is returning nothing … and that looks to be over
At the end of they day there needs to be demand for goods and services — that is not happening — too many people have no jobs — or very low paid jobs — real wages are down dramatically — banks have financed unqualified people allowing them to purchase autos — people are carrying huge debt loads — interest rates are at 0
Basically we have reached a saturation point — there is nothing central banks can do to drive demand….
The helicopter has dropped the cash …. massive amounts…. and it’s bought us 7 years…
Sure the banks could give everyone $10,000 – but how long would the impact of that last?
And if they central banks started handing out cash like this what would it do to the CONfidence of people who currently believe recovery is still possible?
I reckon that a deflationary death spiral is how this ends.
Yes, people loose confidence in money and so spend all on hand money. Jump starting the green shoots. But you and an earlier commentator are correct it will need to be a flow of money not just a one shot. So, $1000 per month for every citizen over 17.
Ah paradise… money for nothing … chicks for free…
I am not sure why — but someone I don’t think handing out $1000 per month to people would be a solution … probably because that would reveal the utter desperation of the system and would cause panic…
Pretty difficult to spin a story that ‘all is well – recovery is coming — but in the meantime we will give you each $1000 per month to spend’
There are those who are suggesting that if QE 4 were announced that would cause fragile CONfidence to unwind… it would destroy the narrative of recovery…
But who knows — who would have thought the central banks would be propping up the global stock markets with QE…. or that short-sellers in China would be threatened with jail.
Anything goes – no matter how absurd – if it adds a little time to the doomsday clock
If the topic was not confusing enough, here’s some more information from zero hedge saying: “It’s entirely possible (and now very likely) to have BOTH inflation AND deflation. At the same time. Assets and investments can fall, while at the same time the prices of retail goods and services rise. In other words, the value of your investment portfolio goes down, but your grocery bill goes up. It’s also important to point out that not all prices rise and fall equally. Gas prices may be down from a year ago in the US. But as the recently-released Hotels.com Hotel Price Index shows, hotel prices are up sharply. Salt Lake City: 8%. Raleigh: 5%. Portland: 9%. Washington DC: 5%. Los Angeles: 8%. I’ve seen the effects of this dual inflation/deflation phenomenon as I’ve traveled around the world in places like Argentina, Greece, and Indonesia. It is a very real threat. And it may now be coming to US shores.”
“Anything goes – no matter how absurd – if it adds a little time to the doomsday clock”
Tax holiday maybe?
What deflates (collapses) is the amount of credit available. This then reverberates in the prices of assets which always take into account and reflect available credit. Easier credit –>more demand–> higher prices, like with houses. Asset deflation resulting from credit collapse means the prices of collateral backing loans collapse–>banks’ loans are more unsecured, and more loans are unable to be paid off (can’t pay off the mortgage by selling the house)–>greater bank insolvency–>even less credit available, a vicious circle.
Hyperinflation is a result of loss of faith in the (value of) the currency, when people lose faith that it’s “purchasing power” will pretty much be as good as what it can buy today, so people rush to convert currency into hard assets, also an accelerating vicious circle, and it takes more and more currency to buy anything because the currency is perceived to be worth less and less. It’s a currency credibility event. Deflation and hyperinflation are not inconsistent, in fact hyperinflation often follows serious deflation. The hyper-printing is not the cause of hyperinflation but a symptom of the loss of faith in its purchsing power – the printer prints to try to keep up with and offset the loss of faith in the currency’s purchasing power. The printer is chasing the loss of faith in the currency, the printer running overtime is not causing the hyperinlfation.
I definitely don’t like the way the author presents his arguments.
The issues he raises here are reflect the reason why I historically have not made much use of the terms inflation/deflation. The issue at hand is the fact that in the future there are going to be a lot less goods and services available. If all of our existing money were to attempt to buy these goods, there would be a high level of inflation. In fact, if governments tried to print more, it would make the situation worse.
Right now, we have a lot of money theoretically available, but not a lot of that money in the hands of the non-elite workers who might in fact it to buy commodities (and high priced goods like home and cars that use commodities). If some of the demand for goods and services disappears because of less wages of non-elite workers and less debt, leading to lower prices, I have been calling that deflation. (There may still be a huge amount of funds floating around in bank accounts and the stock markets, that is not chasing after goods like homes and cars. It is buying stock and bonds, rather than things that raise demand for commodities.This is where inflation is coming now.)
The author says that with deflation our money will buy more, and in fact, gasoline and other products do appear to be cheaper now, so that we can buy more. The catch is that our money won’t buy more for very long–it won’t take long before producers stop producing commodities if prices remain at this low level. It is just an illusion that these low prices will stay. In the future, these things will disappear pretty much altogether from supply. Does that bring us back to hyperinflation with respect to what is left, or does the system just “break” altogether? The low commodity prices now don’t cancel out the possibility of inflation, if we still have money but there is virtually nothing to buy.
If we still some have money, and the goods pretty much disappear, I suppose you could call the result hyperinflation. So in some sense the author may be right.
I am expecting extreme and increasing volatility in commodities. But in an overall downward trend when viewed as a moving average.
The most important factor in hyperinflation is the full faith and credit of the government. So if the government blots its copybook, then the door is open to hyperinflation. Which is what Zimbabwe did. So the important thing is to avoid that happening. If the banks were given the treatment they were due in 2008 the public confidence would be high. If as then, the government sold out the confidence would be rock bottom. All the exposure to derivatives, which are just wagers in essence, would be stopped and deleted. Plus the loans too wiped down to naught, a classic Jubilee, the money in circulation would plummet and could actually end up matching the real goods and services in the economy. I think short of chaos that only a jubilee can work. It is an idea getting some traction these days.
Not to disagree with your statement, but you need some perspective on this.
You put your “money” into a bank. The bank now sees you as a liability.
When thing go wrong, a queue forms, and near the front of the queue are derivatives.
You, as a depositor, are rather far down the queue, except for government guarantees, and those may not be worth much in the situation you suggest.
As to why derivatives have to be paid first, that gets complicated quickly.
And to repeat a point, the Jubilee is not worth the effort unless land is included.
Richard, I don’t exactly know how a jubilee would proceed, but I very much doubt it would be the way you describe. The banks, firstly, would not be in charge. Otherwise there wouldn’t be one!
derivatives and other insurance wagers would be the first to be eliminated. Government would repeat what they did before and guarantee small depositors funds. Then as it will be necessary to wipe all loans, mortgages etc in order to reset the economy, they will also be returned to thin air, whence they came. Any future economy will have to return to pre fiat money days in so far as it can. Of course it might be much worse in the end, but in the interim a new ‘wartime’ style economy gives us a reasonable way of managing the unavoidable crash we face.
@John Doyle – So, at some point in time, say Jan 1st 2016, all debts and bets evaporate? Including all the ones that say “I promise to pay …”? And that means all taxes go too? And that means all civil servants gift their labour to the government? And all the banks close?
And by the way, to be effective, as I said before, all land is no longer privately owned, and private property is strictly imited to personal possessions.
I’m not disagreeing, just saying you have to be consistent.
Richard, what do you mean by “consistent”? It’s not doing what you wrote in your reply. That is entirely inconsistent. The debt jubilee is not taking away anything from the banks that threatens their existence. We will need them, skeletonized no doubt, to administer living allowance payments made by the CB to the citizenry, since nearly everyone has a bank account now. Since taxes are just levied to take excess reserves out of the economy, there will be none for most people to pay. There will be 70%[?] unemployment, excepting essential services. The government will have to administer all that, so it’s important the administration survives. All is lost without that. Only chaos will reign. It will be traumatic enough without chaos.
In Australia, already all land is crown land. We acquire freehold or leasehold from the crown. Buying land is just lease transfers. Obviously other countries will have to do it differently.
There will be zero wealth creation. We are well down that road already, so it will just be survival that we’ll be attempting to manage and population decline to whatever is sustainable in a grossly depleted world. What Fun!
@John Doyle – OK – I will address only your suggestion regarding derivatives. At the moment, these have priority over everything else. IMHO that means to settle the derivatives via the legal process, first you have to seize the bank, compensate the shareholders if necessary, then sell off the assets to pay the creditors, and only then plead a succession of cases in court to close the derivative bets. (IANAL)
If everything falls apart, that is what will happen provide the collapse takes over ten years. Or you could pass legislation banning derivatives and that will take roughly the same time IMHO.
I’m not arguing with you here, just putting some flesh on the bones you are rattling 🙂
I think you are over complicating things, Richard. Government will have a popular mandate to make Banks pay for the trouble they cause, considering the way they escaped sanctions after 2008. Derivatives have zero priority regarding the economy but head any list of things to delete. Shareholders and speculators will no way be compensated for Derivatives. They don’t represent assets as they are just bets, wagers – internal bank shenanigans. Yes, such financial transactions would be banned, effective immediately.
Thanks for weighing in on that article, Gail. We shall see what happens – in any case it can’t be good because of diminishing returns. I guess we all have front row seats to a once in a human history event – the end of the oil age and all that entails.
“Exactly! All of the interest in shifting coal use to wood use seems absurd to me.”
The UK replaced 6 of its coal fired boilers with wood pellet boilers. It isn’t totally absurb, if you can get the price to work using waste wood residue. It is more or less the same as coal, but without the emissions from mercury, lead, sulfer, no2, arsenic, etc.
It does have the fuel cost of making the pellets, generally in the US, and then shipping the pellets across the ocean and delivering them to where they are used.
“It does have the fuel cost of making the pellets, generally in the US, and then shipping the pellets across the ocean and delivering them to where they are used.”
They either have to ship in coal or ship in wood pellets. They are essentially out of coal, and NG. Softwood wood pellets have a btu value in the lignite value and in the sub-bituminous range. The cost of shipping is about nil, because the roundtrip was paid for with the original load of goods, so you get a steep discount for the return trip, or the ship comes back empty. (Our recycled material was getting sent to japan and china using the same rate structure.)
The manufacture of wood pellets does have an energy cost, but it isn’t much, and they already have 90% of the equipment from the pulp paper business. The paper industry itself is on a decline, so adding a new market helps support prices. Most of the manufacturing energy could be done with wood, I don’t know if they switched back or not yet. (They switched to diesel in the 60s-80s, from wood for a number of remote plants. Previously, Diesel was hard to get in, and it cost money. So it was a similar situation to the mining industry in Chile.)
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Nowadays, data shows that use of fossil fuels are going down and renewables are taking over the share with economy still growing………….
Don’t we have any solutions to such expected collapse?
As Gail has shown many times over. Renewables can’t power the economy and it surely is not capable of creating growth. If anything, renewables require fossil fuels and has been proven to be a money pit. The whole world is up to its eyeballs in debt and renewables require a functioning and stable system.
“As Gail has shown many times over. Renewables can’t power the economy and it surely is not capable of creating growth.”
Without fracking, renewables would be cheaper then all forms of fossil fuels today.
All Gail has really said is: We need a cheaper form of energy to create/sustain economic growth
All she’s REALLY said is that we need another form of energy that’s at least cost competitive, but MUCH MORE IMPORTANTLY, is competitively similar in ENERGY DENSITY. Without comparable energy density, cost is basically irrelevant. The amount of total available solar energy available in any particular area might well be immense. All of which is irrelevant. What matters is how much of it can be harvested right here right now at any given time sustainably to not only produce work right here right now, but to feed the upstream industrial processes that will make said harvesting possible in the first place.
“All she’s REALLY said is that we need another form of energy that’s at least cost competitive, but MUCH MORE IMPORTANTLY, is competitively similar in ENERGY DENSITY. Without comparable energy density, cost is basically irrelevant. ”
I will go with cost competitive.
Usually density is irrelevent in manufacturing. Can you deliver xyz electric? The source doesn’t matter. They are using behind the meter batteries to help out utilities right now, and save money.
It doesn’t matter whether the batteries are in a shipping container at a manufacturing plant or not.
And yes you can buy a shipping container with batteries in it from about 12 manufacturers.
Energy density is the only thing that matters and upon which everything else is based. Cost competitivity is merely a derivative. Without energy density, oil is merely a slimy substance to be avoided and industrial civilization was merely a pipe dream.
“All Gail has really said is: We need a cheaper form of energy to create/sustain economic growth”
What she is really saying is that, as the financial system collapses, so to will commerce. Will you work for no pay? This means the collapse of distribution including no food in the supermarkets, no fuel at the gas pumps.
Are you asking me to to dissect that article now too?
Only if you let me dissect your brain to try to understand what is causing you to be unable to understand very basic facts and concepts. I am certain I would find brain damage is involved.
“Only if you let me dissect your brain to try to understand what is causing you to be unable to understand very basic facts and concepts. I am certain I would find brain damage is involved.”
Oh I get it! You need to try and lobotomize me to bring me down to your level so I can understand plebeian concepts you are trying to spoon feed me directly from MSM spin meisters rather then take a chance you might provoke a thoughtful discussion and find out you are wrong.
Go drink your purple kool aid.
The renewables don’t fix our problem. Our problem is that the cost of producing energy products has been rising since about the year 2000. Shifting to renewables doesn’t fix this problem; it makes it worse. Renewables are being subsidized, but they are inherently high priced, especially when costs like transmission and balancing are included.
The economy grows based on the difference between (value of energy to the economy) and (cost of energy production). This difference has been shrinking, and adding renewables doesn’t help. (Value of energy to the economy) is pretty much a constant. When selling prices get above (value of energy to the economy), they can’t really “stick”. That is the problem now.
“The renewables don’t fix our problem. Our problem is that the cost of producing energy products has been rising since about the year 2000. Shifting to renewables doesn’t fix this problem; it makes it worse. ”
They actually do fix our problem. The cost of energy has been rising as you mentioned, and renewables price have been dropping to the point where it is no longer valid to make a blanket statement “fossil fuels are the cheapest”. It just isn’t true anymore.
The “extra cost” you are referring to is actually addressing the inefficiency (extra cost) of frequency regulation in the current system which is made “cost effective” through cost averaging.
For sure it is made worse by intermittent renewable energy, but we have known about the inefficiency since the grid’s inception. With the rising prices of fossil fuels, cost averaging is no longer the cheaper solution.
Not only is cost averaging not the cheapest solution, because it is less efficient, it is also no longer the easiest and most manageable solution.
You are trying to make the same arguments secretaries made against using computers, in favor of typewriters in the 80s. The kids that grew up in the 80s, all learned to type on a computer. In fact most of them have never used a typewriter. They have only seen them in museums.
The even younger generation.. They aren’t even learning to type. It is all touch screen.
Even if your arguments today are even valid, everyday that goes by they become less valid as new developments occur.
1] We need fossil fuels to excavate the raw materials and power the factories that produce “renewables” such as solar panels.
2] No renewables ever powered a factory on their own. They will never provide the amount of energy we use these days. We would have to build a whole new infrastructure to use renewables – see 1]. Perhaps if we’d started in the 1970s, as Jimmy Carter wanted, we could have bought some time – maybe a few extra decades – but eventually extra population would have defeated us, and in all likelihood climate change would have continued, though at a less frenetic rate, because of the continued requirement for some fossil fuels and the continued despoiling of the environment.
3] Even if we had only renewables that did not require the use of any fossil fuels, emitting extra heat into the atmosphere would still be a form of entropy with deleterious effects of some sort, when used by millions of people.
Yes, no matter how many problems we solve over population wins in the end. The common person chooses not to organize to limit population. The rulers have no need the existing system of the four horsemen works fine. This is the way the world has run for 10,000 years and looks to be the way for the next 10,000 years.
“1] We need fossil fuels to excavate the raw materials and power the factories that produce “renewables” such as solar panels. ”
Chile is using renewables to do their mining. It is cheaper and easier then diesel.
“2] No renewables ever powered a factory on their own. ”
That is just a blanket untrue statement. A number of factories have run on wood to create steam even with coal available, it is/was cheaper. Recently, With 5% of the US electric being generated from renewables, it is hard to imagine it not being possible. In fact it is hard to imagine it can’t be done.
Wood is nothing like as energy-dense as oil or coal. You’d have to cut down the world’s forests, then wait for them to grow again, and they still wouldn’t replicate the energy we use now.
“You’d have to cut down the world’s forests, then wait for them to grow again, and they still wouldn’t replicate the energy we use now.”
You missed the point. Which was we have done it before with renewables therefore the blanket statement is incorrect.
There are quite a few different “renewables”.
Wood has been around literally forever. Its main difficulty is overuse. I haven’t studied how efficient it is to make pellets and ship them across the ocean, but clearly this is not the same is burning wood that has been burning in a person’s own back yard. The general trend worldwide seems to be increasing deforestation. Euan Mearns made this chart:
Hydroelectric was enabled by the availability of coal, so grew in popularity in the 1800s. It has proved to be reliable and cheap. Its availability varies somewhat from season to season. Lesser developed countries seem to start with hydroelectric, if they have hydro as an option. Environmentalists oppose putting in dams that change the ecology of an area. Hydroelectric does need some maintenance. Old dams are now being taken out. The total quantity used in the US reached a maximum in 1996-1997, and has been trending down since. World use is trending up, but the growth is mostly outside OECD.
Geothermal has been around for a long time. In the right areas, it can produce base load electricity efficiently. BP dumps it in with “biomass” in its reports.
Solar thermal has been around to heat water for a long time. One of its biggest uses is heating swimming pools that previously were not heated.
The above aren’t what the popular press talk about as “renewables.” They seem to act as if wind and solar PV, if added to the electric grid, are the answer to our problems. In fact, a person would think that they are perpetual motion machines, and that they could rebuild themselves. This is the statement that is patently untrue.
“There are quite a few different “renewables”. ”
I agree, and there are quite a few more not listed.
“I haven’t studied how efficient it is to make pellets and ship them across the ocean, but clearly this is not the same is burning wood that has been burning in a person’s own back yard. ”
It is -easier- to manage because they are more consistent shape/size/moisture/ash, and much easier to handle in bulk quantities. Plus they don’t burn them like a fire in your backyard, they burn them more like coal to get 85+% efficiency.
They have nothing to do with deforestation, they are actually come from essentially big farm fields harvested in rotation over like a 30-50 year cycle.
“Hydroelectric was enabled by the availability of coal, so grew in popularity in the 1800s.”
?? Not sure what you mean, hydro power has been around for 1000s of years, and the first hydroelectric projects were old mills along a creek. The first being 1871. No coal needed.
The reason why 3rd world countries typically put in hydropower is because it provides steady power with no input and can last a long time. A cheap and fairly reliable resource especially when the countries don’t have a vast amount of fossil fuels available.
Run a cable directly into the core of the sun and transmit heat to thousands of boilers around the earth — that will save us and eliminate poverty.
“Run a cable directly into the core of the sun and transmit heat to thousands of boilers around the earth — that will save us and eliminate poverty.”
That is what we are doing!! We upgraded to wireless transmission. It cost too much to run the cable and we save a lot of water!
Without cement and steel, hydroelectric is quite limited in what it can do. Maybe I should say “modern hydroelectric”.
“Without cement and steel, hydroelectric is quite limited in what it can do. Maybe I should say “modern hydroelectric”.”
Quite honestly, there are certain processes where it is not likely they can move away from FFs in industry unless new processes are developed. I am not worried about those industries quite as much as other industries, which can switch more readily. There is lower hanging fruit, that can be more easily and cost effectively addressed at this point without changing processes. And in fact, there is some lower hanging fruit within those industries that can also switch.
Steel is a bit harder. US Steel has already dropped its energy use by 22% over a 10 year period, and only represents 5% of the energy used in industry, and 83% of all the coal used in industry. Their energy use includes 18% electric, and 33% NG already.
For wood pellets I’ve read that 1 trailer of oil needs 30 trailers of pellets to cover the same amount of energy for heating. Unfortunately I don’t remember which article?
“For wood pellets I’ve read that 1 trailer of oil needs 30 trailers of pellets to cover the same amount of energy for heating. Unfortunately I don’t remember which article
I don’t think it is that high. I know weight is different the volume but pound for pound, it is around 9000btu for wood pellets/lignite and 19000 btu for gasoline. (sorry not that great of a comparison, but I didn’t want to poke around looking for more data.)
“Chile is using renewables to do their mining. It is cheaper and easier then diesel.”
“Mein gott”, as they say in Germany – you are far out.
If your other option is diesel, you need to find something else, even solar! That is true anywhere if oil is near $100 barrel. I am not as sure it is true at $50 barrel.
“If your other option is diesel, you need to find something else, even solar! That is true anywhere if oil is near $100 barrel. I am not as sure it is true at $50 barrel.”
It depends on the situation. I doubt you can forecast 30 years of <50/barrel oil.
““Mein gott”, as they say in Germany – you are far out.”
We have regressed to 60s slang! But thank you for the complement!!
@madflower69, you seem to be right. Maybe i remember wrong and that it takes 30 trailers of woodchips to replace one trailer of oil?
Anyway, woodchips and forest waste first needs to be transported to the pellets factories.
Furthermore, computers use many elements that are being rapidly depleted. No resource lasts for ever, especially when we use them up at the rate that we are currently doing.
In actuality, the case against renewables becomes more valid everyday, as the case against their main subsidizers, fossil fuel energy and the US government as wealth pump, does likewise. It’s really pretty simple, a lifestyle based on an extremely cheap concentrated energy source CANNOT be sustained by a comparatively extremely expensive and diffuse energy source(s). We have the former now. We’re transferring to the latter as we speak. We’re feeling the pain now. We’ll be feeling A LOT MORE pain later.
“We have the former now. We’re transferring to the latter as we speak. We’re feeling the pain now. We’ll be feeling A LOT MORE pain later.”
I am not sure who you are referring to as “we”. You talked about the US gov’t and the fossil fuel industry.. but you obviously aren’t an american..
More Madflower BS, this idiot is dangerous “Chile is using renewables to do their mining. It is cheaper and easier then diesel. …..” up to 20% power from renewables WOW
This is the type of half truth this clown puts out. Energy is very expensive in Chile. Daylight hours are average and the wind is indeterminate. Chile is like everywhere, renewables cannot function on their own, they are parasites on the back of FF’s and simply prolong their use. When FF’s go, so go renewables. This idiot cannot refute this simple fact. If fossil fuels were removed from Chilean mines now……no mines.
So in a nutshell. Chile has very high energy costs and its mines are considerable energy hogs. To keep them viable, electricity has to supplemented by power generated by very expensive windmills and solar arrays. High commodity prices are required to maintain the viability of mining operations. Commodity prices are volatile and falling………………Chile has admitted that the renewables were not introduced for environmental reasons.
Actually I am an American. What part did you take issue with?
Renewables won’t last on the grid in a much-changed world, making their high cost now inappropriate.
“Renewables won’t last on the grid in a much-changed world, making their high cost now inappropriate.”
If your prediction of doomsday does hit, they -will- be the grid. There won’t be enough people to run the FF infrastructure.
This looks to be an ongoing circular logic question and answer theme as newcomers or persistent holdouts keep going over the same old denialist intellectual ground. Perhaps you could post links to short articles/posts that refute the most common claims? It really gets tiring to hear the same old questions/claims posed over and over again.
There’s no point, let them talk. They’ve been doing it for decades, nothing but lies built upon lies about how such and such product or technology is going to “save the world” when instead what we do is allow the financiers to plunge us all deeper into debt.
Well it’s time to let the chips fall. Speaking for myself, I will personally be burning all the fuel I possibly can until it’s unavailable or I die. Let me repeat clearly for everybody reading this post: I am going to use as much fossil fuel energy as I possibly can. If you decide to use solar panels or windmills or a fusion reactor you assembled in your garage, or whatever else, well, great, because that’s more fuel for me.
No kumbaya from me. I’m sick of it. I am deadly serious here, do not doubt it for a second, and there are billions out there just like me.
Since oil use is correlated nearly 1-1 with growth …. then we must all do out part…. buy moar… drive moar…. fly moar…
To do otherwise invites collapse….
“Since oil use is correlated nearly 1-1 with growth …. then we must all do out part…. buy moar… drive moar…. fly moar… ”
I will let you do it. I have better things to spend my money on.
“Well it’s time to let the chips fall. Speaking for myself, I will personally be burning all the fuel I possibly can until it’s unavailable or I die.”
Yeap. I realize there are a few of you. The only thing I -could- ask is don’t get in the way. In otherwords, it is in YOUR best interest, not to dissuade other people from making the change or trying, since that leaves more fossil fuels at a lower price for you.
The US policy was never meant to be an instant “magic bullet” fix which is really odd for a government program. It is a slow transition at best. There are shortcomings and efficiency improvements that can be made to both fossil fuels, and renewable fuels that can keep you rolling in your FFs for a much longer period.
Right now the answer is not one or the other, there is a middle ground between them. Taking a hard stance on one side or the other doesn’t really help anyone, not even yourself.
Right now the answer is not one or the other, there is a middle ground between them.
That’s the common sense answer all right. Unfortunately, common sense doesn’t really apply here. Of course we can invest in renewables. Just don’t believe for a second that they’ll allow for continued BAU or current population levels.
So the relevant answer is that the middle ground that you’re expecting won’t be ANYTHING like our current reality.
“So the relevant answer is that the middle ground that you’re expecting won’t be ANYTHING like our current reality.”
BAU continuously changes as people learn new ideas they can implement to make their lives better. It will not remain stagnant unless people quit improving.
Yes, the renewables question is one that keeps coming up again and again.
Nothing is renewable in those high-tech converters.
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Roads to nowhere, bridges to nowhere, ghost cities, ghost factories, shadow banking system, plunge protection teams, $27T QE program…..
Yup, that’s China alright !
Always fun to scapegoat the other, especially when they were stupid/greedy enough to follow in our footsteps. Won’t be nearly so much fun when it’s our turn, will it?
Apparently you read my comment out of context because that’s not what I was implying. The USSA along with every other major eCONomy is headed for a collapse. There are some who think China will lead the world in the 21st century with their gold backed world reserve currency and right all the wrongs from the West. My contention is that the Chinese are just as bad if not worse than the West in how they have scammed the system.
That bridge is in Norway.
“The bridge known as “Storseisundet Bridge” is part of the one of the
most scenic roads in the Norway. It connects Norway’s mainland to the
Island of Averøy, is 8.3 km long and has eight bridges inter-connecting
several small islands in the open sea near the coast.”
You can look it up on Wikipedia or do a Google Search and choose images.
I copied that off of Zero Hedge… headline was ‘China summed up in one image’ … metaphorical representation ….
No, its called lying, misrepresentation, misattribution and poor journalism.
How’s this then:
“That bridge is in Norway.”
Yes, we are good on building roads, tunnels and bridges here. I wonder how they can be of use in the future – suggestions are welcome!
All we need now is:
Mr. Ho Lee says we are all fooked.
Looks dramatic but it’s just a crest.
This is an interesting song. Not just civilization but human existence generally is “on a road to nowhere”. It seems to have strong atheist tones. The song reminds me of Nietzsche’s concept of the “last men”, unable to overcome themselves and to transition to a higher species – though even that would not change the ultimate futility of it all. (lol)
Mr DNA does not want to evolve anymore. He passed that job off to Mr Culture and Mrs Technology.
Mr DNA does not change in terms of the general tendencies to survive and to procreate. That is all that is really going on in the world today. It is what always goes on. The drama that we see on the TV news is “full of sound and fury signifying [Mr DNA].”
The best hope that we have now is that the global financial system goes belly up sooner rather than later. As you say, Mr DNA needs to liberate himself from Mr Culture and Mrs Technology, from liberal democratic and Christian culture.
We will evolve as a species only when we are reduced to a massive punch up of all against all, of each tribe and sect against every other.
There will be no more “everyone has to survive” or “he or she has to survive.” It will be whoever survives survives.
Natural selection is not supposed to be a moralisic novel.
If we want to evolve as a species then we have to get rid of the masses, select the best among us and hand the future over to them on the same basis.
Of course today we are doing the exact opposite and the results are glaring. Liberal capitalism is turning into a humanitarian disaster zone.
“Natural selection is not supposed to be a moralisic novel.” ++++
A novel made possible by cheap to extract energy… which meant there was enough to go around… which allowed us to indulge these moralistic fantasies at times…
When the energy is no longer available reality will re-assert itself … and it will be vicious…
If we want to evolve as a species then we have to get rid of the masses, select the best among us and hand the future over to them on the same basis.
Nice. And then you inject a moral argument as proof. ALL human arguments are inherently moral!
I could just as “reasonably” say let’s get all of the first world capitalists and their sympathizers, especially since they’re the only ones I know considering the question of who to get rid of in the first place.
Question: If the greatest political/economic system, exercising the most all-encompassing military/every other power the world has ever known has led us to this, was it worth it and do you think that power is in any conceivable way legitimate?
Natural selection involves a large dose of chance. Culture and cooperation are attempts to hack the odds. Fitness is difficult to assess. Mr culture and mrs technology actually did ok for a while. In fact, those that survive the bottleneck will need them in order to evolve – though we might not recpgnize them.
Mr DNA = FATE see Parminedes, The Uncertainty Principle vis a vis quantum mechanics & superdeterminism.
This is all really OLD.
That’s an article that just came out on Google news, in which Bill Gross is suggesting any rate hike by the Fed will by a one and out, with no consideration of another rate hike for at least 6 months.
Starting to sound like a pretty timid rate hike if it actually goes through. Almost as if its now become a point of contention, with the Fed feeling boxed into at least 1 rate hike even if it is small and more or less symbolic of their power rather than a necessary adjustment.
I would like to make some comments on the topic of “invaders” and civilization, as we expirience this big immigration wave from Syria etc. in Central Europe.
The regions that are past their peak are ofthen invaded by new people from less favorable regions, as it was when the Roman Empire was falling. In case of Slovakia, there was a strong internal invasion of Roma people during the 20th century, when these formerly nomadic people from India were forced to settle down. They settled abandoned postindustrial areas or areas from which the Germans were expatriated after the 2nd world war and thanks to the social benefits from the state their population rose rapidly, living in dire social conditions due to their historic nomadic background and not taking part in the industrial technology history, i.e. living on the edge of the majority society for centuries.
The invaders are always present where there is some empty unprotected place and some resources to spent. Protection from the invaders is a basic condition for a civilization to prosper. The human beings during their history learned various ways of protecting from various invaders like other people, animals, insects, natural elements, diseases etc.
One of the key reasons why the civilization fails is the lost of control mechanisms against invaders. Now, within the Europe, we have Schengen Area, i.e. common border of the states within the EU that allows for fre movement. What is happening now is the fact that leading nations like Germany, France tolerate invasion of immigrants. One Slovak journalist characterized is as that Germany behaves like an old man that is not able to act anymore, so he opens his wallet. (http://komentare.hnonline.sk/komentare-167/dag-danis-europa-pri-utecencoch-straca-rozum-897691)
What we are seeing now in Europe is a pure inability to act, that started with the neeed to pour money into Greece to cover the naked reality of industrial decline in this country and now the inability to stop immigrants. The CE states like Hungary, Slovakia, Czech Republic and Slovenia are against the illigal immigration and try to fight it in the Anglo-Saxon way like Great Britain, USA or Australia. The rest of the Europe is more or less passive.
What we are experiencing now is simmilar to 1989 when Germans from East Germany started to escape to the West Germany and the Soviet block was not able to act. This time it is the European Union that is unable to act.
There are surely more than 95% Slovaks that are against illigal immigration Even the Slovak Prime Minister said that, as regards the fugitives, we are prepared to accept only about 200 Christians from Syria. That is a very wise approach, as Slovakia is a depleted country, almost none of the immigrants want to stay in Slovakia, they continue their journy to Germany. The West European countries criticize the Eastern Europe countries for their approach, but when you have low wages, rising debt levels of the population and the indebted state, when the low-paid workers from Eastern Europe keep the high standard of living of the Western Europeans, then this is the best way to make the collapse quicker…
Good post thanks… a bit like osmosis…
Wonder if anything will come of this http://www.zerohedge.com/news/2015-09-02/european-integration-jeopardy-italy-willing-temporarily-suspend-schengen-response-re
An interesting answer of a Slovak entertainer of African origin on the question what he would do if he has a family there (i.e. in the country where the war is): “I would go back to my family and if we are going to die together we will die.” (Unfortunately only in Slovak, in the last minute of this video):
The immigration problem is indeed a difficult one. Everyone wants to be charitable, but at some point the whole idea doesn’t work any more.
Only concerted action among nations can deal with the problems of immigration and carrying capacity. Interpret this how you will; but, there is no need to reinvent institutions- merely make use of the ones we have….
Immigration is ultimately just so much “shuffling the deck chairs on the deck of the Titanic,” and entirely predictable. TRUE forward thinkers have already anticipated the backlash; emigration OUT of the US in response, especially once the government sponsored benefits of empire begin to expire. The funny thing is (and the rich already know this), the abandoned racist poor whites will increasingly find themselves side by side with recent immigrants of all colors and stripes, who will turn their racism back on them in their declining years! Oh, the delicious irony of it all!
Yeah America is screwed. I’ve long believed that and always will.
Having said that, even in civil war America might be a better place to be than much of the world.
It is the higher wages that attract the immigrants to Germany. The redistribution of available resources and energy via lower wages to some nations and via higher wages to other nations makes the solidarity for the poorer nations less possible.
Germany, France, Austria and other states within Europe with higher wages, although already in debt, too, redistribute their income via EU funding to the poorer countries. The funding finances infrastructure, construction, education etc. Only indirectly the purchasing power of the people who get paid in the process of carrying out these projects in the receiving countries.
Now, when they want the poorer countries to be solidary with the immigrants, its pure nonsense and the real purpose of the EU becomes visible. What the Western European countries really need is the human resources for their declining postindustrial states due to the depletion of the human resources in their countries. That is why Germany says that it will accept high numbers of immigrants. Telling the poorer countries that they should do the same is a pure nonsense: these poor countries do not need immigrants as they have higher unemployment rates due to the lower wages.
The argumentation that a country should take more immigrants as they accept the lower paid jobs has its limits when the wages are too low. At some point, the jobs with the too low wages are rejected from the side of the citizens of a given country simply because accepting them is uneconomical. Futhemore, every country needs the workers with high qualification, not the workers with the low qualification, as the latter group is replaced by the robots and mechanization.
Now the question is: who needs the EU? If the Western European countries threaten cutting the funding directed to the Eastern European countries if they lack solidarity and they make it happen what will be the outcome? The same as forcing the poorer nations to accept the immigrants: the collapse.
The Eastern European nations should stop protecting the Schengen Area and allow immigrants invade the Germany. We will see what happens, if we resign on accepting the borders…
The dynamics in Europe are fascinating: those talking about high moral principles, international law, the ‘European Mission’, ‘the kind of Europe we want to be’, etc, just miss the point.
My rough understanding of the figures now, from ‘liberal’ media like the British ‘Guardian’, is: 40 to 50% of migrants en route to the German Paradise are from Balkans and not from the failed and invaded states like Syria, Iraq, etc; and only some 15 to 20% are women and children.
Women can easily fit into Europe’s decaying economies, where most new jobs are part-time and low-pay: care-home workers for all those ageing Germans. Children can learn a new language with comparative ease, and be educated to be useful if managed properly. But of what use are large numbers of probably unskilled young men? Not much in Western Europe, none at all in Eastern.
yes, there are thousands of Slovak women who provide nursing services in Austria. And no one needs unskilled young man in Slovakia in its car factories filled with thousands of robots where already also the workforce from Romania is working due to low wages…
There is more than enough solidarity with the ageing Western European countries from the side of the ageing Eastern European countries. The Germany itself fights the problem of the depleted East Germany that can not catch up with the western part of the country and must be subsdized.
They are completely naive when they think that the Eastern Europe cares about their “high morals”. When you ask the poor for help or forces them to help you, one day fine day you shout in vain because there is no one to help you, as everybody tries to save himself or herself and does not care your ideals, threats, or even pleas…
Wages in Central European countries vs. Germany on various positions
As regards the parity of the purchasing power of the households in Slovakia and in Germany, the difference is lower, but still the majority of the Slovak population is much poorer than German population.
Due to the big concentration of production facilities in Germany, the big part of the agricultural/postindustrial Europe can not cope with high wages in Germany. Furthemore, German economy uses many Gastarbeiter from other parts of Europe, i.e. when they need more workers, they hire them, when they do not need them, they just let them go, so the costs connected with the social support for the unemployed are born by Germany just partially…
Anyway, as regards the opinon of the citizens of Germany vs. the statements of their government on the topic of immigration, what one can see in media and what is said in personal communication can be totally different…
and not only in Germany.
What is expressed publicly must be politically correct, while in private circles (hence eventually in reality) the fear has much bigger traction.
“The immigration problem is indeed a difficult one. Everyone wants to be charitable, but at some point the whole idea doesn’t work any more.”
I agree. If we countries are already falling in energy per capita terms then, adding more immigrants to countries that already have falling net energy availability will hasten collapse. Not a pretty picture.
Actually, what we’re seeing now is the natural backlash against an invasive economic system that has invaded “lesser peoples'” home territories in order to rob them of their natural resources, in order to enrich the few (that’s us) at the expense of the many (that’s them). Having successfully done so, the few (that’s us), in a fit of irony, label the many “invaders” for having the unmitigated gall to simply follow their resources as it flowed away from them and became “our” money.
It’s particularly ironic that history’s robbers always blame their victims for their plight. I wonder, who will upper class Americans and their sycophants blame when their time finally comes?
It’s particularly ironic that history’s robbers always blame their victims for their plight.
I predict Mexicans and Asians blamed at home, and China and Russia (of course) blamed abroad.
“The only kind of renewables that we can truly count on for the long term are those used by our forefathers, such as wood, draft animals, and wind-driven boats.”
Yes but you should add …not in a world of 7 Billion people. How long would the trees last? As Blacksmithing progressed in post medieval Europe the various Royal families were already very concerned about the rate of depletion of their forests which were being cut down for charcoal furnaces. They enacted laws to protect them. At that time the world population was a few hundred million. Imagine how long our trees would last today if the lights went off? A day? maybe a week? As the Easter Islanders discovered, trees are not renewable if you cut them all down.
Ken – this has been pointed out quite a few times on FW … along with the fact that 7B will overrun vegetable plots… boil tree bark… eat grass… kill every wild animal and eat it — kill every cat dog budgie and eat them —- gun down every cow pig chicken goat — and eat them…
That food will not grow in soil that has been farmed using petro chemical inputs… when the inputs are no longer available…. (which is nearly 100% of all ag land…)
Yet we spend half our time here trying to explain to people that solar panels are a joke…
Welcome to the insane asylum!
Exactly! All of the interest in shifting coal use to wood use seems absurd to me. In fact, as far as I know, the percentage of the globe covered with forest is still falling. It is hard to believe this is a good things.
– Global count reaches 3 trillion trees: http://www.nature.com/news/global-count-reaches-3-trillion-trees-1.18287
– Mapping tree density at a global scale: http://www.nature.com/nature/journal/vaop/ncurrent/full/nature14967.html
Yes we need more energy dense fuels to burn not less energy dense fuels. Or worse yet solar panels and wind turbines which are even fuel at all.
I’ve said this before, but I think the moderators disallowed the comment. Let’s see if it works this time:
Cannibalization – it’s what’s on the menu. And I’m not talking about infrastructure, either. Well, maybe I am; old housing stock will provide excellent sources of fuel to BBQ and preserve meat.
People themselves will provide the pathway for population reduction. If one were so inclined, one could easily model the base stock depletion rate necessary to reduce global population down to 500+- million. The survivors would actually be quite ‘plump’.
The nit is two-fold, and it’s related to those pesky nukes. One, we have an exchange, thus rendering available stock as contaminated. Or, two, those dang spent fuel rods really muck up the air, threatening even the final 500.
For most of us, these issues are pretty much moot. Our challenge is how to correctly position ourselves over the next 10-20 years, not the next 100-200. Since fascism/militarism/nationalism are ALWAYS the answer, the key to survival is to make damn sure you’re in the right social/racial/religious group.
X mentions the Spanish civil war – I think that event is the truest model that describes how this is gonna go down over our time frame. Don’t be a cleric in a republican region – thousands of preachers & nuns were tortured and killed with impunity.
If the nukes go off all bets are off. In that case, I plan to “hail the new sunrise” fit and proper if I can, especially since we’ve got at least 3 targeted for our immediate vicinity last I checked.
But unlike the Archdriuid, when the US goes down I don’t expect any of it to be even remotely peaceful and/or civilized.
The problem B9K9 is that America is not really a nation in this sense and never has been. It has too many different races and classes.
Therefore I predict a rather short lived and unsuccessful stint at fascism, followed by civil war and breakup of America.
You talk about bombing and nuking the world, for example, but for what? America is going to collapse anyways. Doesn’t make sense.
The Nine Nations of North America some time back was a good read. Recently someone used the idea again for a book but it was not as good. All New England ever wanted was to be left alone not tied in with those crazy people in _____.
Have you ever tried to burn a green tree. They don’t start very easily and they don’t burn very easily.
I think when the collapse really sets in, it will be quick. In the form of disease, starvation and/or war. I don’t think there will be much mass burning of trees or killing of animals. How many people could fell a tree split and burn it. Just look at people of WalMart and picture that historic moment.
Gail I’m a bit confused by this sentence “We can perhaps keep a little food and water on hand, to tide us over a temporary shortage. We can study our religious beliefs for guidance.” I don’t see anything temporary in what you and quite a few others are saying. My own analysis comes to the same conclusion but there is no question on one point. This will be a permanent not temporary. The only solution I see is planned mass die off due to disease. Sounds horrific until you the see the alternative. We are the problem. The solution is just as obvious.
There is nothing temporary is what overall is happening. But there maybe temporary outages, from place to place, before there is a true final outage of our current system. If you want to avoid losing out in the first temporary hiccup, then you may want to make plans to make yourself less vulnerable to it.
Russia moves to stop ISIS in Syria.
No more of this
May God bless Russia.
ISIS is backed by Russia aren’t they? They have the same motive of operation…
You mean Russia the Church of Christ and ISIS the beheading of Christians? And which side is the global news corporation on?
I think most of us come to FW to escape from the lies that are printing in the MSM…
Please don’t pollute the pond by repeating MSM nonsense.
ISIS is a US fi8nded and run operation, a la Wag the Dog. You need to get out more.
“ISIS is a US fi8nded and run operation, a la Wag the Dog. You need to get out more.”
I don’t live in the fictitious movie world. It is soviet funded so they could pull US troops out of position for their invasion. They pulled the same stunt taking Georgia under Bush.
Every time anyone suggests ‘renewable’ energy will solve anything — this needs to be posted
But of course when one is in a cult there is no reasoning with them… the Solar Jesus cult is particularly strong …
Perhaps we can just feed them purple kool aid and put them out of their misery….
FE Madflower is a shill. His group have been spamming with lies, half truths and cherry picked info on various blogs for years. This clown under a different guise rendered peakoilbarrel unreadable. If Gail doesn’t nip his BS in the bud, this site is in for a world of hurt. He plagued Gail’s every post at TheOilDrum for years.
Hi Nick, NickG and the rest of your evil family.
“FE Madflower is a shill. His group have been spamming with lies, half truths and cherry picked info on various blogs for years.”
Another blatant attempt to lead everyone in the wrong direction by discrediting someone trying to tell the truth because you cannot win the argument?
Calling you a shill would be kind …. that would assume at least a certain degree of intelligence
“Another blatant attempt to lead everyone in the wrong direction by discrediting someone trying to tell the truth because you cannot win the argument?”
Mr, you are *not* telling the truth. Most people around here understands a lot more about energy etc than you ever will – take my advise and find some other place to play, your writings are futile.
“Mr, you are *not* telling the truth. Most people around here understands a lot more about energy etc than you ever will – take my advise and find some other place to play, your writings are futile.”
I fully expect you to be able to defend your arguments. Trying to discredit what I say without facts stating you are some weird expert translates into “Hey dude leave so I can win my argument … you are making me look like a fool!”.
You also aren’t the first person, who is severely tanking, so I am questioning the actual knowledge base you are referring to. In fact I was told to drink purple kool aid, by one person, who refused multiple offers from me to critique an article he kept posting a url to.
“Every time anyone suggests ‘renewable’ energy will solve anything — this needs to be posted
http://ourfiniteworld.com/2014/01/21/ten-reasons-intermittent-renewables-wind-and-solar-pv-are-a-problem/ … Perhaps we can just feed them purple kool aid and put them out of their misery….”
If you are asking me to dissect the article, before you drink your kool-aid, I can. It is a start to fixing the over population problem so I am happy to do my part.
I think this start to take care of one of those issues:
As I said before you are 10 years behind, and you might be right drinking purple kool aid may be the only way you can catch up.
I will go on record and state that I am 100% positive solar and wind on the grid will not work and any attempts to do so on an massive scale (like Germany or Spain) will hasten the collapse of the global economy. I truly believe that this would also add untold amounts of pollution to China or any other country that is tasked with building these things. Solar panels and wind turbines are not fuel. We would do better to reserve our fuel (coal, oil and natural gas) to try to soften the hard landing that is coming soon.
“I will go on record and state that I am 100% positive solar and wind on the grid will not work and any attempts to do so on an massive scale (like Germany or Spain) will hasten the collapse of the global economy.”
I believe you mean what you say. I don’t think we can get to 100%, if that is what you are alluding to. However, what we are doing differently is adding storage along the way. While I agree it is still expensive. There are a few advantages to it. The first is management, if you need to repair or replace a high power line, storage below the substation can fill the gap instead of having to schedule downtimes. It can help shave peak usage, and it can help delay starting up of peaker generators. Whether or not we get to 100% renewables, or not, it is very advantageous to have on the grid. The shortcomings of the grid, are accentuated by the intermittent renewable energy sources, not the true cause. The current method is really over generation based on a best guess with cost averaging. There are significant advantages and cost savings using the equipment with just FF energy. We really just didn’t have the technology developed and available at the utility scale until very recently.
What I will agree with is storage is currently expensive. I do think prices will drop, there are about 20 companies fighting for a piece of the market and it is just starting to grow rapidly. I don’t know what storage tech will win, or even whether it is going to be in front of or behind the meter. Most likely it will be a mix for quite a while. Then something new might hit.
I think you are very correct if we tried to continue to use the current grid configuration with renewable energy, bad things would most likely happen.
The other thing we are doing that Germany and Spain have a harder time doing, is we are replacing coal with NG, and NG with the new combined cycle plants, is actually better at cycling.
I don’t think mainly china who is one of the silicon producers is going to bake us any faster with solar then without solar. ANY manufacturing is going to bake us. New cars, new cell phones, new whatevers. The only difference is we are manufacturing things that help slow down the earth baking process. Coal is being replaced world wide.
Economically it creates a new industry as people upgrade. It is a tech boom of sorts.
The reality is we hit a wall with fossil fuels, and there are diminishing returns on investment into the technology. New technology opens up new opportunities and new investments. A lot of the research is applicable to other industries as well.
The world might crash before we finish. I don’t know. I am just not seeing a better way around both climate change and economic disaster.
What is going on in the ME seems to be inevitable. The countries pass their peaks, the governments fall, the sects fight it out and the population declines.
Arguably it is only a matter of time before IS takes over the whole of the ME, Africa and central Asia.
I have projected for several years that Islamists would do that. It was obvious 20 years ago that they would try.
It doesnt matter how many thousands of bombs the US drops on IS targets or if the whole world fights them. They will still win in the near future.
The US can hold back their expansion for a little while longer but IS will take over as soon as the US is gone.
It does not bother me in the least. It is their countries, their communities and it is for them to fight it out. It is a natural struggle for survival and there are no good guys or bad guys.
The EU in its weakness has allowed major migrant flood lines to open up northward and that concerns me more. It was always likely that Africa and the ME would flood northward upon collapse but the EU has made that all the more certain.
Merkel has offered an open invitation. I am astonished that she has not been deposed. Europe is pathetic now.
Frankly if this keeps up then Europe will also fall to IS. Europe needs to grow a pair and fast. And I do not mean in the ME, I mean in Europe.
Otherwise, if Europe falls to IS, then who really cares? Does it make any difference? Our civilization is about to fall anyway.
Some more 6 year old Syrians (in response to the purported photo of the drowned kid)
This is the perfect opportunity for the UN to step in with meaningful measures, militarily and with adminsitrative planning for this and future national disasters. Otherwise we are left to unilateral actions and the mistrust and instability such action engenders.
The problem with this tragedy that’s not being reported is that the Syrian crisis was brought about by the USSA and it’s allies who are hellbent on destabilizing Syria and overthrowing Assad. The Russians have called out the West on this crisis but they”re too busy with other countries to destabilize.
Hey eARTH, you do realize that IS(IS) is a USA CIA created boogeyman, don’t you? You really need to broaden your reading list.
It is interesting that the author of the second paper is a research scholar at Harvard University.
Doesn’t matter who created what or when, these are very tangled webs.
What matters is what is actually happening, and who has control.
For example, Britain created the American colonies, and then America overthrew Britain. Happens all of the time, read history.
ISIS and more generally radical Islam is spreading, and on a long enough timeframe, but getting shorter all of the time, they will take back control of their lands from America and make serious inroads into Europe, because they are aggressive and fertile, and that’s all that counts in this world of perpetual struggle.
James, next thing you’ll tell me is that Hillary was selling them weapons out the back door of the embassy inn Benghazi….wrong tune…Kumbaya my Lord
Seriously, if the Middle East’s chief export was broccoli do you think the USA or Europe or Russia would care at all about it?
eARTH, yes, don’t leave Indonesia out of the Islamic Republic. You touch on the EU and the question I have been asking why does Europe just give up. How many hundreds of millions of new neighbors will it take before there is a reaction?
I want the US to stay out of all affairs outside the 200 mile ocean exclusion zone. They need to fight it out for themselves. They includes Europe.
Hi, Ed. Yes I agree about Indonesia. Basically the entire Islamic world is going to fall to IS as soon as collapse hits and the US withdraws from the ME. Russia is also going to have a fight with IS in its Caucasus traditionally Muslim colonies. They have been trying to get the Russians out for decades.
Of course the US played its part in the rise of radical Islamism. So did Russia, in Afghanistan, the Caucasus, Syria. You don’t have to ship guns to help a movement spread, you just have to invade or otherwise control governments and pss off enough people. Russia and the USA are peas in a pod, the US is just better at what it does than Russia. (Probably a shocker for RT groupies.) Soon enough both Russia and the US will be out of the ME and north Africa.
My oh my oh myopia. Why do you think we made nice with iran. The power vacuum in the ME is just about to pressurize. Isis is temporary. Though some vestige of its ranks if not its culture may survive a long and bloody reworking of the geopolitical ME landscape. US may play some small role. UN is sidinex until leadership changes in vicinity allow its entrance. Til then it will be a slow battle of attrition. Russia, ally of both Iran and Syria is only world power in play.
Fast, we can make a fortune with the first survival app for the iPhone.
Fast, my email edpell att optonline dott net
Alibaba Is the Canary in China’s Coal Mine
Jeffrey J. Brown has been asserting for some time recently that we are entering phase of decline from existing oil wells as high as 8% p.a., that’s basically fast collapse scenario before 2030/40.
I’m still proponent of drastic demand destruction though, partly due to material wealth saturation, demographics, virtualization of individual life of upcomming ubercretenious generations (they don’t need/demand political-social change or hot cars just pocket handset virtual realities with few watts per hour consumption), etc..
Obviously, such demand destruction will have adverse effect on standing infrustructure and its aging/retrofiting potential. But even during this long “demand winter” we can squeeze some decades more of pathology of the human race, aka cankicking festival show must go on..
Interesting ideas on demand destruction, WofH. All this talk of collapse brought up by Gail and other posters got me to thinking about the topic today. My own thoughts on it are collapse will only occur somewhere along the descent of oil brought to market, i.e. post peak. How far down the production scale is hard to know, but as long as there are massive quantities of oil making it to the marketplace, it’s difficult for me to imagine collapse will occur. The reason why is because there always seems to be some new way to tweak the system to keep things going, be it QE, Zirp or other desperate financial policies. Things seem to just keep going albeit it in a new and twisted way. Ah, but start a descent from peak and it would get to a point of lower flow amounts in which there are no fiscal follies to change that equation to anything other than collapse.
So I’m simply waiting for the confluence of factors to come together that cause oil production to begin that descent and once that begins watch to see what lower threshold of production is the final straw.
This pretty much encapsulates how a slow collapse (which has been underway since the turn of the century) accelerates into a very rapid collapse:
Glencore is the example — but the same dynamics are at play for a wide range of companies.
China is the trigger. China has been the only driver of ‘growth’ since 2008. If China is unable to get the Ponzi scheme back on track with more stimulus…. then this game is just about over.
We found globalization to save us. It took off about the time oil prices started to rise, and China took off with its growth in coal. Thus, the energy mix could change back to something lower cost. Once China’s ability to pull us out of reaching limits to growth is over, we don’t have anywhere else to turn.
The most popular article on OurFiniteWorld.com is http://ourfiniteworld.com/2013/02/22/twelve-reasons-why-globalization-is-a-huge-problem/
If globalization stops, the whole world has a huge problem.
Here is something relevant seen on Science Daily today..
“Risk of financial crisis higher than previously estimated”
Thanks! This is a link to the paper itself. http://arxiv.org/pdf/1505.04276v1.pdf It is available for free.
Agreed, most of my business is in the oil, gas and energy business…..our business has been very challenging this year due to the commodities collapse (due to China) and well, we just found out this morning that our location is being closed to cut costs. I’m being transferred to another location about 2 hours away but most of my co-workers jut got their pink-slips. What’s the old saying? When other people are losing their jobs its a recession, when you lose yours it’s a depression…
I hope things go well for you. These things can strike awfully close to home. I am sure the resale value of homes is not what it was previously.
Great article. One nit re “3. M. King Hubbert’s “peak oil” analysis …”:
When you sum numerous curves, e.g., the production curves of individual oil or gas wells in a field, or numerous fields in a nation, you trend toward a normal distribution curve. See https://en.wikipedia.org/wiki/Central_limit_theorem . Yes, you can compose a square wave by summing sine waves with different frequencies, but not sure of the point. I don’t believe the fundamentals that determine a well’s or field’s production curves are related to sine waves.
In the case of the economy, the sum is not a random sum of “independent events”. Instead, it is a sum which is directed by the financial system. If the financial system can provide prices that stay high for a while, and then drop quickly to a low level, the summation that the financial system directs is likely to have a very steep drop-off to it.
How far will Chinese stocks drop?
A lot MOAR!
Dual-listed companies traded at an average 115 percent premium in China at the end of last month, within three percentage points of a four-year high in July, according to monthly data compiled by Bloomberg. The price differences have persisted even as a $4.9 trillion selloff dragged the Shanghai Composite down 39 percent from this year’s high.
Viewed for months as a sign of over-valuation in mainland shares before they peaked in June, the gaps have failed to shrink as government-backed funds intervened to prop up the local market. CMB International Securities, KGI Securities Co. and Fortune SG Fund Management Co. say it’s only a matter of time before valuations on yuan-denominated A shares come back down to Earth.
“A shares are still overvalued,” said Daniel So, a strategist at CMB International Securities in Hong Kong. “Downside risks are larger than upside potential.”
And yet you have so called experts like Dr. Jim Willie, Eric Sprott, Peter Schiff, Jeff Berwick (ultimate snake oil salesman), John Embry and the list goes on and on that think it’s all part of the Chinese plan. That it’s all playing into the “NEW Asian Century” which China will lead the world to peace and prosperity with their Gold Backed, world reserve currency, the Yuan.
And yet all I see is China scamming the experts and the world with the same Western Banking cabal tricks, with their ghost cities, ghost factories, bridges to nowhere, trains to nowhere. A humongous shadow banking system, a corrupt financial and banking system. It makes me smh when the experts think China and Asia are the cats meow.
If China were to pull off everything the experts expect from them. It would be BAU2 with the flawed criminal banking, financial and economic systems.
The U.S. problem is that latest global version of casino capitalism, say roughly 1914-2008, just spawn its base there and now in a way the parasite/symbiont entity is way bigger than the host organism. In other words the U.S. is not the same entity as the global ruling elite. China can’t challenge this order, China+Russia can’t challenge this order, not even China+Russia+BRICS+OPEC+ .. can’t challenge it.
It will only take place when the U.S. exhausts this parasitic global relationship vis a vis global and domesticaly availabe resource base, we are getting close, but the virtual money/credit are still accepted around the world, proping up the joyride. Will it last another century, not likely at all. Another few decades with some severe cankicking perhaps.
“The U.S. problem is that latest global version of casino capitalism, say roughly 1914-2008, just spawn its base there and now in a way the parasite/symbiont entity is way bigger than the host organism.”
Well all have our problems. Putin got elected because he blew up his own people in apartment buildings.
We aren’t the “same class” as the ruling elite, big deal. We don’t want to be.
If we cut money off to the rest of the world, the world economy will tank. *shrugs*
So you actually can say we are generous.
It would be useful if they’d explain how all of this fits into the plan http://davidstockmanscontracorner.com/chinas-monumental-ponzi-heres-how-it-unravels/
To me it smacks of desperation …. but of course I am not an expert….
Norway: A lot of people are loosing their jobs in the oil industry, but the house prices keep rising. I’m flabbergasted, think I will go to my workshop and continue painting some chairs.
Wise man. I buy second-hand chairs from charity shops and do them up, most calming.
What have Norwegians retained of the practicality and toughness of their ancestors; has easy modern living changed all that? It’s been many decades of oil-based comfort.
Are people mentally ready for this great change? I read somewhere that there is quite a difference between the west and east in Norway.
“What have Norwegians retained of the practicality and toughness of their ancestors; has easy modern living changed all that? It’s been many decades of oil-based comfort.”
I would say no. Nowadays you are supposed to pay for all kinds of services, so you can drive to the gym and work your body. What’s wrong with doing things yourself *and* get exercise at the same time?
“Are people mentally ready for this great change?”
Not at all imo. Most are flying high on good salaries and debt, and think that things will get even better – it’s going to be one hell of a awakening.
Do you know Rob Hopkins and his Transition handbook ? I don’t anderstand why you don’t speak about.
Have a look here : http://www.transitionnetwork.org/
This sounds like so much fun!
Inner Transition supports your initiative to be a place where people find creative, caring and enjoyable ways of being and working together as we go through the joys and challenges of Transition.
Inner Transition helps you to create a group that:
Has fun and celebrates
Has a culture of trust, care and respect
People want to be part of!
Inner Transition focuses on how we can:
Support each other
Manage differences and disagreements well
Deal with stress and stay energised
Help people through change
Include painful feelings about what is happening in our world
Transition is not just about practical projects and doing things. It’s also about caring for ourselves, each other and the world. It’s about living in ways that are meaningful and rich, beyond the limiting “consumer culture” we find around us.
Do we get to learn how to use high powered rifles — or is it all Joan Baez stuff?
Fast Eddy, Did you ever consider this is “nature’s way” to hedge its bets on survival of the species? Of course, all possibilities of action will not be ‘desired” outcome.
In a former comment addressed to you by BC9, pointed out that populations levels will drop to @500 million worldwide.
Look at the odds of survival when factoring in 75% of those will likely be between the age group of late teens and late 30’s.
Just what we find in a classic bell curve.
So, do get upset about “Permies” or whoever. Those hand cutters in the Congo may just adopt a bit of the above and find it useful for survival of the tribe/clan.
What did occur to me that such people have not the slightest clue how to survive in a post BAU world…
But these people do — because they are the real deal — not some wanna be’s fiddling on some Koombaya website on their iphones…
Fast Eddy, that is exactly the point! We ALL agree that die off will happen! As Gail has stated, “It’s already baked in the cake” without fossil fuels.
If I were you, the wise course would obviously be to ENCOURAGE their misquided mindset!
I remember reading a passage in some past History account that quoted a Barbarian chieftain during the sack out Rome. He correctly observed they should not change the custom of the civilized, or they may adopt their warlike skills! Let those continue to study the classics, rhetoric, philosophy and grammer, ect.
BTW, even these Barbarians were wise enough to adopt the institutions of the Roman State in their culture! In the same book, tribes would respect ownership rights (sometimes) of villa estate “dukes or dux”. So there was a fusion of the two.
So, chill out.
FE, this is just one way. Appropriate to that geography. It was not like that in Europe in the dark ages. For a start, they would freeze in those outfits!
I have not followed what Rob Hopkins says very closely. Rob Hopkins and I have never been at the same conferences, to my knowledge. I understand that he does not normally travel to conferences outside of England.
Like quite a few people in the transition movement, he has a relatively large family–four sons. Clearly, population control does not play a very large role in his view of the transition movement. Using less energy per person does.
If collapse is baked into the cake, there is no need to reduce energy use per person. Transition to collapse.
Which appears to be exactly the approach of the upper levels of global society. They do not make the waves they just ride them.
“If collapse is baked into the cake, there is no need to reduce energy use per person. Transition to collapse.”
There is a huge potential to slow the collapse and reduce the effects of a potential collapse, but then again, I am not a person that rolls over dead very easily.
But you will roll, the odds are at least 6 out of 7 will perish, not good odds.
I am fairly confident that I am going to make it through the bottleneck. The question is why? and what comes after.
Good for you Alaska! To answer your question “No Reason” at all
What comes next, you will also die too.
Oh, Those in remote isolated hostile climate regions. My odd are one in fifty will make it.
Don’t forget to VOTE in the latest Collapse SurveyTM, When Does Dieoff Begin?
Nicely laid out website RE, very appropriate to the theme.
I was hoping to get survey results.
RE I doo enjoy the surveys. Also I love the Jukebox, glad to see 2.0
In terms of the ecosystem, flora and fauna, it began long ago.
Where is Collapse? When will Die-off begin? All around us, now.
Absorbing that fact fully, that we are living in collapse, goes a long way to reducing fear, which is the apprehension of what might happen and a torturing, disabling, illness-making state of mind.
Knowing that it is, in fact, in progress, here and now, means we can concentrate on action.
And action dispels grief, which is the other great enemy facing reflecting, intelligent, human beings who are aware of how very truly we have screwed things up. Grief is useless, too.
What action? Maybe just making sure to see the sunrise. Plant an apple tree that you or someone else might harvest in 5 years time. Or thorn bushes that will shelter birds….
Anything positive related to growth, and the appreciation of beauty and the furthering of human decency.
Pathetically small actions? Maybe, but from a certain perspective all human activity is beneath regard. That is what Epicurus said about the Gods: they don’t care. It should not be the perspective of human beings.
Well said, Xab.