How our energy problem leads to a debt collapse problem

Usually, we don’t stop to think about how the whole economy works together. A major reason is that we have been lacking data to see long-term relationships. In this post, I show some longer-term time series relating to energy growth, GDP growth, and debt growth–going back to 1820 in some cases–that help us understand our situation better.

When examining these long-term time series, I come to the conclusion that what we are doing now is building debt to unsustainably high levels, thanks to today’s high cost of producing energy products. I doubt that this can be turned around. To do so would require immediate production of huge quantities of incredibly cheap energy products–that is oil at less than $20 per barrel in 2014$, and other energy products with comparably low cost structures.

Our goal would need to be to get back to the energy cost levels that we had prior to the run-up in costs in the 1970s. Growth in energy use would probably need to rise back to pre-1975 levels as well. Of course, such a low-price, high-growth scenario isn’t really sustainable in a finite world either. It would have adverse follow-on effects, too, including climate change.

In this post, I explain the reasoning that leads to this conclusion. Some back-up information is provided in the Appendix as well.

Insight 1. Economic growth tends to take place when a civilization can make goods and services more cheaply–that is, with less human labor, and often with smaller quantities of resources of other kinds as well.

When an economy learns how to make goods more cheaply, the group of people in that economy can make more goods and services in total because, on average, each worker can make more goods and services in his available work-time. We might say that members of that economy are becoming more productive. This additional productivity can be distributed among workers, supervisors, governments, and businesses, allowing what we think of as economic growth.

Insight 2. The way that increased productivity usually takes place is through leveraging of human labor with supplemental energy from other sources.

The reason why we would expect supplemental energy to be important is because the amount of energy an individual worker can provide is not very great without access to supplemental energy. Analysis shows that human mechanical power amounts to about 100 watts over a typical laboring day–about equal to the energy of a 100-watt light bulb.

Human energy can be leveraged with other energy in many other forms–the burning of wood (for example, for cooking); the use of animals such as dogs, oxen, and horses to supplement our human labor; the harnessing of water or wind energy; the burning of fossil fuels and the use of nuclear energy. The addition of increasingly large amounts of energy products tends to lead to greater productivity, and thus, greater economic growth.

As an example of one kind of leveraging, consider the use of oil for delivering goods in trucks. A business might still be able to deliver goods without this use of oil. In this case, the business might hire an employee to walk to the delivery location and carry the goods to be delivered in his hands.

A big change occurs when oil and other modern fuels become available. It is possible to manufacture trucks to deliver goods. (In fact, modern fuels are needed to make the metals used in building the truck.) Modern fuels also make it possible to build the roads on which the truck operates. Finally, oil products are used to operate the truck.

With the use of a truck, the worker can deliver goods more quickly, since he no longer has to walk to his delivery locations. Thus, the worker can deliver far more goods in a normal work-day. This is the way his productivity increases.

Insight 3. Growth in GDP has generally been less than 1.0% more than the growth in energy consumption. The only periods when this was not true were the periods 1975-1985 and 1985-1995. 

This is an exhibit I prepared using data from the sources listed.

Figure 2. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil's Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Figure 1. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

The difference between energy growth and GDP growth is attributed to Efficiency and Technology. In fact, energy use and technology use work hand in hand. People don’t buy oil just to have oil; they buy oil for the services that devices using oil can provide. Efficiency is important too. If a device is cheaper to use, thanks to efficient use of energy, consumers find it more affordable (if the cost of the device itself is not too expensive). Thus, efficiency can lead to more use of energy.

The period between 1975 and 1985 was the period when the developed economies were making many changes including

  • Changes to make automobiles smaller and more fuel efficient
  • Replacement of oil-fired electricity generation with nuclear (which needed no fossil fuels for ongoing fuel) and with coal
  • Replacement of home heating using oil with more modern heating units, not using oil

Some of this effort continued into the 1985-1995 period, as newer cars gradually replaced older cars, and modern furnaces gradually replaced oil-fired furnaces. Thus, we should not be surprised that the 1975-1985 and 1985-1995 periods were the ones with unusually high growth in Efficiency/Technology.

Insight 4. The value of energy to society is not the same as the cost of extracting it, refining it, and shipping it to the desired end location.

The value of energy to society reflects the additional goods and services that we as a society can produce, thanks to the benefits energy adds to the system as a whole. This value can be either higher or lower than the cost of extracting the energy from the ground, processing it, and delivering it so that it will work in our devices.

If the price of oil, or of other energy products, is low, we would expect the cost of production to be lower than its value to society. We can visualize the relationship to be as shown in Figure 2. It is the low price that provides the leveraging benefit of oil.

Figure 2. Illustration by author.

Figure 2. Illustration by author.

In the example given in Insight 2 of the worker driving a truck over a road to deliver goods, there are actually many “players” involved:

  • The company extracting the oil
  • The government of the company extracting the oil
  • The business making the truck
  • The government of the country building the road
  • The business hiring the worker delivering the goods
  • The worker himself

The benefit of the efficiency gain is shared among the different players listed above. How this sharing is done is based on relative price levels and government tax levels. Thus, there are many different types of entities (which I refer to on Figure 2 as “consumers”) all getting a benefit from the leveraging impact of the oil products at the same time.

The value to society of oil and of other energy products is pretty much fixed, based on the energy content (in Btus or whatever other unit a person desires). The value to society can change a little with energy efficiency, if we learn to pave roads with less use of energy products, and if we learn to manufacture trucks with less use of energy products, and if we can make the trucks that use it become more efficient per mile.

If the cost of producing oil or other energy product rises (in other words, the left bar in Figure 2 gets taller), then the “gap” between the cost of production and the value to society (right bar) may fall too low. The amount of money to distribute, resulting from the gain that comes from using energy to leverage human labor, falls. None of the entities involved can get an adequate distribution: There is less money to pay interest payments on debt; there is less money to pay dividend payments to stockholders; there is less money to give the workers raises. In fact, it reminds me of the situation described in my post Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)

If there is too little gap between the selling price of oil and its value to society, there gets to be pressure for the price of oil to fall. Partly, this comes from low wage increases (because wages are being squeezed). If workers cannot buy finished products such as homes and cars, the price of commodities such as steel and oil tends to drop. This seems to be the situation today. Partly this pressure come from the fact that society can live for a while with “squeezed margins. Eventually, some of the “pain” needs to go back to the oil producers (the difference between the left bar and the middle bar on Figure 2), instead of only being borne by the oil consumers (the difference between the middle bar and the right bar on Figure 2). This is why we should expect the kind of oil price drop experienced in the past year.

Insight 5. We would expect world economic growth to slow as oil prices rise, because of Insights (1) and (2).

According to (1), we need to make goods increasingly cheaply to support economic growth. Oil is the energy product with the highest use worldwide. If its cost rises, it takes a huge amount of savings elsewhere in the system to allow the combination to continue to produce goods increasingly cheaply.

According to (2), it is the energy content that needs to rise. With higher prices, consumers can afford less. As a result, they tend to consume less, in energy content. This lower energy consumption lowers the leveraging of human energy, so there tends to be less economic growth.

Figure 3. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Figure 3. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Figure 3 shows world oil prices. Given Insights (1) and (2), we would expect the rate of economic growth to slow during the 1975-1985 period and during the 2005-2015 period, and indeed they do, in Figure 1.

Insight 6. Increasing debt seems to be a major driver of demand growth, and thus energy consumption.

There are many reasons why we would expect debt to be hugely beneficial to economic growth:

Debt is used to “smooth” many kinds of transactions. For example, the payment of wages to an individual represents a kind of debt, since otherwise, the employer would need to pay the worker daily, using the type of goods produced by the business–something that would be very inconvenient.

Debt is also helpful in enabling big financial transactions, such as the purchase of a house or a factory or a car. With debt, the amount that needs to be saved up in advance is greatly reduced. Most of the cost can be paid in monthly installments over the life of the item purchased. If debt is used to pay for a factory, the output of the factory can be used to repay the debt.

An indirect impact of adding debt is that it helps raise the price of commodities, such as oil, steel, and electricity. This happens because with the use of debt, “demand” for expensive products like homes, factories, and cars is greater, because more people and businesses can afford to buy them, thanks to the availability of debt. These expensive products are made with commodities like steel, wood, oil, and coal. With more debt, the prices of these commodities tend to balance at a higher level than they would otherwise. For example, oil prices may balance at $100 per barrel, instead of $70 per barrel. At these higher price levels, production from higher-cost sources becomes profitable–for example, oil from deeper wells, water from desalination, and coal transported over longer distances.

Because of these benefits of debt use, it is hard for me to imagine that fossil fuel extraction could have occurred without the use of very large amounts of debt. I first discussed this issue in Why Malthus Got His Forecast Wrong.

Figure 4 shows an estimate of how world debt has grown, on an annual, inflation-adjusted basis, compared to inflation-adjusted GDP. (See the Appendix for additional information.)

Figure 2. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods.

Figure 4. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods. See Appendix for information regarding calculation.

Figure 4 indicates that the growth of debt spurted about 1950. One influence may have been John Maynard Keynes’ book, The General Theory of Employment, Interest and Money, written in 1936. This book advocated the use of additional debt to stimulate economies that were growing at below their full potential. We also know that governments with war debts needed to offset the repayment of these war debts with new “peace debts” (debt available to businesses and consumers) if they didn’t want their economies to shrink for lack of debt growth. See my post The United States’ 65-Year Debt Bubble.

Insight 7. Once inflation-adjusted oil prices passed $20 per barrel, a change took place. We started needing much more debt to generate a dollar of GDP.   

This problem can be seen on Figure 4–the lines diverge, starting in the 1975-1985 period. Up until about 1975, the rise in debt levels was similar to GDP growth. In fact, if we look at Figure 1, energy growth also tended to grow with debt and GDP in the pre-1975 time period. After 1975, we started needing increasing amounts of debt to generate GDP growth.

We can understand the need for more debt by thinking about how leveraging really works. Leveraging works because of the energy content of the supplemental energy. To get the desired quantity of energy content, a larger dollar amount of investment is needed to produce the same quantity of energy, if the cost of producing the energy product is higher.

Most people look at debt growth as a percentage of GDP growth, but this misses an important dynamic: is our problem occurring because debt growth is high, or because GDP growth in response to the debt growth is low? When I look at Figure 4, my conclusion is that when energy costs were low–basically at pre-1975 levels of $20 a barrel for oil, and similarly cheap levels for nuclear and other fossil fuels–it was possible for debt growth to approximately match GDP growth. Once energy costs started to rise, more debt was needed. Some of this was additional debt related directly to the process of creating energy products; some of this debt related to international trade and to buyers’ need to finance higher-cost end products.

Based on Figure 4, even the drop back to the $30 to $40 per barrel range in the 1985 to 2000 period didn’t fix the rising debt to GDP ratio problem. To truly fix the situation, we need to get the cost of producing fuels to a low enough level that they can profitably be sold at the equivalent of less than $20 per barrel. With diminishing returns, this seems to be impossible.

Insight 8. Adding more energy efficiency may require more debt growth as well.

The biggest spurt of debt came in the 1975-1985 period. If we compare Figure 4 to Figure 1, and consider what was happening at that time, quite a bit of this additional debt may have related to changes associated with increased energy efficiency: new efficient nuclear electricity generation to replace oil generation of electricity; new more efficient home heating to replace old oil based heating units; and the building of new, more fuel-efficient cars.

Insight 9. The limit we are reaching can be viewed as a debt limit.

If demand really comes from additional debt, then what we need to keep GDP growth high is debt that grows sufficiently rapidly. (An alternative way of keeping demand high would be through rising wages of non-elite workers. Unfortunately, these wages tend to be depressed by diminishing returns–a problem I wasn’t able to cover in this post. See my post, How Economic Growth Fails.)

Many people believe that energy demand can rise endlessly. It seems to me that this belief is very close to the belief that the ratio of debt to GDP can rise endlessly. 

Insight 10. Our debt system is very close to a Ponzi Scheme.

A Ponzi Scheme is a fraudulent investment program in which the operator promises a high rate of return to investors. Instead of obtaining these returns from true profits, the operator funds payouts to existing investors using ever-rising amounts of new investment. Eventually the plan fails, from lack of new investment dollars.

Our economic growth situation is not fraudulent, but otherwise it has uncomfortable similarities to a Ponzi Scheme. Instead of adding new investors each year, our economy needs to increase its amount of debt each year, in order to continue to grow GDP. GDP would not grow on its own, without additional investment funded by debt. To make matters worse, the required amount of additional debt rises, as the cost of producing additional energy products rises.

According to McKinsey Global Institute, global debt amounted to 286% of GDP in mid-2014. It had been “only” 246% of GDP in 2000. A person can see from Figure 4 that even with this rate of debt growth, both energy growth and GDP growth have been slowing in recent time periods. The answer would seem to be to add more debt growth. Unfortunately, adding more debt puts us in a position where debt repayments becomes too high relative to ongoing spending needs.

It is this debt problem that leads to my concern that we are headed for a near-term financial system crash. Even purposely slowing debt growth tends to make the economy slow, and thus lead to a crash. Because of the Ponzi nature of our arrangement, any kind of  slowing of debt growth is likely to lead to a debt crash. There are several reasons to support this contention:

  • With lower debt, commodity prices are likely to stay low, or fall further. Our economy’s long-term tendency toward inflation will shift toward deflation, making all existing debt harder to repay.
  • Without a rapid rise in debt, the price of oil and other commodities will tend to stay low, leading to huge defaults in these sectors.
  • Once debt defaults start, lenders are likely to require higher interest rates to compensate for rising level of defaults.


Background on Long Term World GDP, Energy, and Debt Indications

Economic theories have grown up over roughly 200 years without the benefit of information regarding the relationship between economic growth, debt, and the use of energy products, on an aggregate basis. Long-term data are mostly compiled on an individual country basis. Many countries are missing from standard listings, especially for recent years and for distant past years, making unadjusted summations of the amounts shown misleading. Fluctuations in currency levels add to the confusion.

Because of these issues, it is quite possible for economists to develop theories, but never have good aggregate data to test them against. Aggregate data are very important to me, because we now live in a globalized world. It is hard to make sense of the world economy if the group of oil exporting nations shows one pattern, the group of newly industrialized countries shows another pattern, and the US, Europe, and Japan show a third pattern. Analyses limited to a handful of countries “like us” can provide very distorted indications.

Fortunately, there are some data sources that permit aggregation of data for the world as a whole. In particular, the USDA Economic Research Service conveniently “fills in the blanks” with reasonable estimates of GDP, making it possible to sum indications to a world total, at least for 1969 and subsequent. Another source of world GDP data is the  “Maddison Project,” started by Angus Maddison and now updated by Bolt and van Zanden. Long-term world energy data are also available from BP for 1965 and subsequent years, and from Smil, for the years 1820 to 2008, but there are data differences that need to be bridged to combine them.

Figure 1A is a repeat of Figure 1 above, showing the long-term trend in world GDP, broken down between growth in energy use and other changes, primarily related to improvement in technology and greater efficiency.

Figure 2. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil's Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Figure 1A. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Based on Figure 1A, growth of energy consumption ranged from 52% to 89% of GDP growth. Over the period 1965 to present, growth in energy consumption averaged 68% of GDP. Some academic research gives a similar result. Gael Giraud, who analyzes the results for 50 countries between 1970 and 2011, says that in the timeframe he studied, “The long-run output elasticity evolved between 60% and 70%.” Giraud’s results contrast with an economic theory that says that energy is only responsible for a share of economic growth proportional to its cost as a percentage of GDP–typically something like 8%.

If we look at the Efficiency/Technology piece separately, the only times it contributed more than 1% per year to economic growth were during the 1975-1985 and 1985-1995 timeframes, when GDP growth exceeded energy growth by 1.4% and 1.3% respectively. This was the time when major changes to the economy were being made in response to the price spikes of the 1970s. As indicated in Figure 4A, this was also the time when increases in debt were very high relative to GDP growth, suggesting that very high debt growth is needed to produce these higher efficiency gains.

Figure 2A shows another way of looking at the same data as in Figure 1A. The slope of the fitted line is .97, indicating that energy consumption and GDP have tended to grow at almost the same rate over the long term.

Figure 4. Data in Figure 3, displayed in X-Y chart format.

Figure 2A. Data in Figure 1, displayed in X-Y chart format.

Of course, the extraction of energy products is enabled by technology growth. Consumers want the use of end products (like refrigerators and cars), not the use of the fuel itself.  Increased energy efficiency also enables growth in energy use, because it makes products cheaper for buyers, enabling economic growth. For example, Figure 3A shows the rapid growth in electricity usage in the 1900 to 1998 time period, as US electricity prices fell.

Figure 3. Ayres and Warr Electricity Prices and Electricity Demand, from

Figure 3A. Ayres and Warr Electricity Prices and Electricity Demand, from “Accounting for growth: the role of physical work.”

Another thing besides technology and energy efficiency that enables the extraction of fossil fuels is growth in debt. Here again, there is a problem with inadequate data, on a long-term worldwide basis. We have some information about recent global debt ratios to GDP based on a McKinsey study. In addition, Bawerk provides a graph showing a long-term rise in the ratio of US total credit market debt to GDP. Longer-term debt patterns related to US Federal debt by itself are also available. One thing that becomes clear is that there has been a strong upward trend in debt levels, relative to GDP, for the US and for the world, for a very long period.

If we use worldwide data to the extent it is available, and substitute US total debt ratios on early periods, it is possible to make a reasonable approximation as to how this growth in debt must have taken place. To correct for inflation, I have applied these debt to GDP ratios to the inflation-adjusted GDP amounts underlying Figure 1A. Once we have debt amounts on an inflation-adjusted basis, it is possible to calculate average annual growth rates in this inflation-adjusted debt. This is what I show in Figure 4A.

Figure 3. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods.

Figure 4A. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods.

Since 1975, energy has gradually been changing to require much more debt per unit of energy produced, for three reasons:

  1. The overall cost of production of these energy products rose starting in the mid-1970s. As a result, debt went “less far” when it came to producing additional barrels of oil or kilowatt-hours of electricity.
  2. The nature of energy production began shifting toward greater use of front-end investment compared to ongoing expense. This change led to a need for more debt, because front-end investment tends to be financed by debt, while ongoing expense does not. Examples requiring heavy front-end investment include oil sands, oil from shale, deep-sea oil projects, wind turbines, and solar PV.
  3. If investment costs are low, oil and gas companies can often use profits from prior projects to finance new projects, so there is no real need for borrowing. When profits are squeezed by rapidly rising extraction costs, as has been the case in recent years, oil companies begin to borrow to pay ordinary expenses, such as paying dividends. They are so cash-strapped that almost any expense needs to be accomplished using debt.

The rest of the economy has also experienced a greater need for debt as energy prices rise. For example, oil imported at a high price requires much more debt than oil imported at a low price. A house built using expensive oil and other energy products is more expensive to purchase, and so requires a higher mortgage. When automobiles are made to be more fuel efficient, this tends to raise their cost and thus, the amount of debt required by those purchasing those automobiles.

It is clear that this increase in debt ratios cannot continue endlessly, for reasons discussed in the main text. Perhaps those evaluating alternative energy sources should be computing estimated “energy return on debt investment” ratios for these new sources. The ideal new energy source will be very close to self-funding, with little build-up of debt.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,447 Responses to How our energy problem leads to a debt collapse problem

  1. Fast Eddy says:

    Boehner to resign as Speaker, quit Congress in October

    No doubt looking to spend the next few months making final preparations at his end of the world haven….

  2. MG says:

    Here, on the OFW, I have not encountered a deeper discussion about the gerontocracy:

    Gerontocracy was prevailing in the Soviet block countries before its collapse. The idea of many people is that when the world collapses, there will be wars, starvation etc. But the truth about the collapsing Soviet block was that its countries were ruled by gerontic governments and leaders.

    In my opinion, this deflationary collapse, which is ahead of us, will be more like this gerontocracy: e.g. in case of Europe, Angela Merkel, Francoise Hollande, Jean-Claude Juncker, the Pope Francis and other gerontic leaders do not see the fact that the nations of Europe are simply exhausted, the populations are maturing and declining and are deeper and deeper in the debts due to the depletion of resources. These leaders behave as if all is o.k., lets take new immigrants, or every parish community should take care of one family from Syria, the US government requiring from the Slovak government to by solidary etc. But in reality, these immigrants encounter, that the European countries are not able to receive them, these immigrants will be disappointed by the European reality of declining living standards, stagnating or low wages, part-time jobs, lack of well-paid low qualified jobs, singles that can not marry because they can not afford to create own famlies etc. That nobody wants them in EU, except for some naive activists…

    I think that this will be the future of the world: the gerontocracy with its inability to see the crumbling and deteriorating reality behind nice facades, propped by money printing, EU funds, subsidies. The 2008 crash was just about life-rescue and putting some make-up to the geriatric body of the industrial civilization, while the process of hollowing out and collapsing continues…

    • Are current leaders older than prior leaders? I agree that the population is getting older, and resources are getting depleted.

      • MG says:

        I would say there is this growing discrepancy between the generations: the older generation has got some status, but the younger generations must work harder and harder, but they are not able to achieve the same. That is why they can not mature, they have not got enough energy to do that, or to study the reality and understand it like e.g. the readers of OFW. And that is why, with the ageing populations, we will have older and older leaders.

        As regards the age of the current leaders, they are still not that old as the gerontic leaders of the declining Soviet block countries. When there were no solutions and the countries were slowly collapsing, why should the younger generations have tried to solve anything? They lived their own nonconformist or underground life…

  3. Stilgar Wilcox says:

    Interesting conundrum for the Fed from Foss’ website.

    “Differentiating between cause and effect is now more difficult than ever as Fed policy affects markets which in turn affect Fed policy and so on. This sets the stage for any number of absurdly self-referential outcomes. For instance, the Fed needs to remain on hold to guard against the possibility that a soaring dollar triggers an Emerging Market meltdown that would then feed back into developed markets, forcing the FOMC to reverse itself.

    But delaying liftoff sends a downbeat message about the state of the US economy which triggers the selling of domestic risk assets. Hiking would solve this as it would signal the Fed’s confidence in the outlook for the US economy, but that would be USD-positive which is bad news for EM. A similarly absurd circular dilemma presents itself if we take the view that the Fed missed its window to hike and is now creating more nervousness and uncertainty with each meeting that passes without liftoff. Here’s how former Treasury economist Bryan Carter put it to Bloomberg: “short-end rates move higher as the Fed gets closer to hiking, and that causes the dollar to strengthen, and that causes global funding stresses.”

  4. Ed says:

    Fast Eddy, I can’t help but notice New Zealand has no indigenous FF energy. It does have a fair amount hydro electric. Imports everything else. This has to be a big drag on the economy. I image the politicians dance this way and that explaining how they will fix the economy. But of course they and the economy without cheap energy are going to have to right size. New Zealand does have lots of coast for water transport a big plus, a moderate climate a big plus, and hydro and I am guessing wood like Sweden has wood.

    • madflower69 says:

      ” I image the politicians dance this way and that explaining how they will fix the economy. But of course they and the economy without cheap energy are going to have to right size.”

      They did the dance in like a long time ago. NZ in 2013 sourced 38% of their energy from renewable sources. There was a huge fight over it when they started to do it. Saying it was too costly, etc. And quite possibly it was at the time, but they are an island country so their prices were most likely a lot higher then you see in other countries, thus pay off faster too.

    • Fast Eddy says:

      There is coal on the west coast south island — plenty of trees on the south island — I am not familiar with the north island.

      • Ed says:

        NZ has an energy plan
        It will save, conserve, and make better use of energy to make NZ richer.

        • Ed says:

          Renewables already play a significant role in our energy mix. In
          2005, geothermal and wind generated 9 percent of our electricity.
          In 2010, the proportion generated from these sources increased to
          17 percent and overall 74 percent of our electricity was generated
          from renewable sources

          Renewable energy has an increasingly
          important role to play, but we cannot shift from using non-
          renewables overnight. We need to ensure secure and affordable
          energy for our households and businesses and to achieve that we
          need to be realistic. For the next few decades at least, the world
          and New Zealand will need oil, gas and coal.

          Fast Eddy you nay-say RE but get 74% of your electric from RE. Well, well. 😉

          • Fast Eddy says:

            The problem is that all these ‘renewables’ – including hydro – which is by far the biggest supplier of electricity — cannot exist without oil….

            So once BAU goes — so go all the renewables — I am in Queenstown skiing this week — nice drive through the mountains on the way here — lots of pylons with power lines on them through the mountains…. they lead to a damn somewhere way up there …. those lines apparently push electricity all the way to Auckland…

            Imagine trying to keep that grid in play post collapse…. must be choppers involved… and 4 wheel drive vehicles…. and all sorts of spare parts…

            It ain’t gonna happen

          • If you can get renewable hydro, that is a good deal. Coal enabled the growth of renewable hydro, and it was the cheap, generally not too intermittent, source of electricity that fueled a lot of the growth of the world economy. For those who are into EROEI, it is usually given as 100:1 (at least for the early hydro), so it is not in the category of all of these current contenders that are huge problems.

        • Ed says:

          The Government retains the target that 90 percent of
          electricity generation be from renewable sources by 2025
          (in an average hydrological year) providing this does not
          affect security of supply

          • Fast Eddy says:

            The country will actually exceed that target well before that date… energy here will be provided exclusively by wood — likely before the end of 2016.

          • Ed says:

            Of course the problem is electric is only 20% of total energy. The rest is coming from oil, nat gas, and coal. So even at 100% RE electric that is only 20% RE energy. Yes, the whole usage could be made electric but then electric generation would have to increase by 400% over existing and there are not likely to be that many good hydro sites.

  5. Ed says:

    I long for the day Gail moves to a hosting service that keeps posts in order.

    • Ed says:

      but hey the price is right.

      • Al Beano says:

        For us it is, but I believe Gail uses a paid version. If WordPress can’t do a simple thing like sort the posts in date order, there is not much hope for them, nor are they providing value for money.

  6. Ed says:

    There is no need or point in bickering about the value of RE. All we need are numbers. How much for system A in capital, metals, concrete, labor, rare materials and how much for system B. Making assertions my favorite system is better than your favorite system is a waste of everyone’s time.

  7. Fast Eddy says:

    Comments from another site:

    Interesting. You may wish to also consider some research I also did yesterday on oil companies.

    I looked at all their share prices that day and then went back to June last year when many were near their peaks in that month to work out the loss in market cap for all these companies in that period. The top 6 in size between them have lost a rounded $1/2 trillion or $463 billion.

    Exxon – down 27.48% $117 billion lost in MC

    Shell – down 37.44% $97 billion lost in MC

    Chevron – down 35.26% $80 billion lost in MC

    Total SA – down 38.4% $71 billion lost in MC

    BP – down 36.8% $56 billion lost in MC

    ConocoPhillips – down 41.27% $42 billion lost in MC

    Its worse still for broad mining and commodity sector companies like BHP Billiton and Glencore who have lost $128 billion between them.

    BHP – down 48.64% $86 billion lost in MC
    Glencore – down 60% $42 billion lost in MC

    Then its even worse for a sample of 3 large US Shale companies.

    Continental Resources – down 61.62% $17 billion lost in MC

    Marathon Oil – down 58.95% $15 billion lost in MC

    Hess Corps – down 45.36% $13 billion lost in MC.

    The further you go down the food chain the worse it gets.

    Whiting Petroleum current MC is $3.5 billion. That is down 77.45% for a massive loss of MC of $12 billion.

    The really big oil companies have done badly but everyone else has done much worse suggesting there is a lot of distress in not just the small shale players but pretty much across the board.

    All these companies will be announcing their Q3 results at the end of October and the the first week of November. Given that a lot of their cash flow in H1 was being supported by hedged oil prices and that these will have expired then those results are only going to get a lot worse than H1.

    There has been much written about how it is OK for all the smaller distressed oil companies to go bust because the larger players are going to swoop in and grab all their assets on the cheap. However if even the top 6 are selling assets and thinking about postponing or cancelling dividends, and if the financial position for the rest is as bad as their share prices reflect, meaning they will need to dispose of even more assets – then where are the buyers of all these distressed assets supposedly going to come from? If private equity firms and hedge funds buy them who are they going to sell them to?

    I think it highly like the market bloodbath will start in earnest in the last week of October and the first week of November when all these results get published. Not a time to be invested in any of these industries. In the last 12 months their charts resemble a market crash and that can only get worse and that will be generally bad for all markets. This also means that unscrupulous hedge funds and investment banks with insider trading access will be trying to recruit bag holders like crazy between now and then to dispose of their holdings.

    • ” . . . where are the buyers of all these distressed assets supposedly going to come from?”

      This is exactly the problem! And why would the new buyers want to restart production at the low prices we have today?

      • Fast Eddy says:

        Juncker said ‘when things are really bad you have to lie’

        Fast Eddy says ‘ when things are horrible and the global economy is about to collapse you just don’t print the data at all’

        I guarantee that there will never be a headline in the MSM that states ‘ Revenues and Profits of all Fortune 500 Plummet’

      • madflower69 says:

        “This is exactly the problem! And why would the new buyers want to restart production at the low prices we have today?”

        The people who are buying the distressed assets can afford to wait until prices go up, if they go up. It is a risk.

        • Prices don’t go up again. That is the basic problem. Higher wages and more debt are needed for them to go up again, but they aren’t there.

          • madflower69 says:

            “Higher wages and more debt are needed for them to go up again, but they aren’t there.”

            You could just free up the cash that is already out there. It is much harder but possible.

            • Actually, you cannot just “free up the cash that is already out there.” The economy is a networked system. The fact that there are not enough high-paying jobs around the world reflects the situation of not being enough cheap energy and enough cheap resources to use that energy, to make the whole system work. Higher debt is not possible either, because wages are not high enough, for the people who really need houses and cars–that is, folks who now are earning less than the 50%-ile of wages.

              All of this looks solvable, if all of the money that goes to the very rich could just be allocated elsewhere. But that misses a fallacy. Much of that money is just parked in bank accounts and securities of various kinds, and will go “poof” if the economy implodes. Even the money that the very rich spend now is includes a disproportionate amount of things that don’t affect commodity prices by much–for example, financial planning services, aimed at tax avoidance.

            • madflower69 says:

              “Actually, you cannot just “free up the cash that is already out there.””

              You don’t have a choice. You said “we need more debt” then you said “we can’t take on more debt”

              Therefore the only choice left is to free up existing cash.

              Unless you find a more wealthy countries like Canada and Russia that are willing to take on debt. The US is tapped out. And it isn’t the US’s job to prop up the global economy.

              I also wasn’t referring to just the top 1%, it is also governments and corporations.

              “the very rich spend now is includes a disproportionate amount of things that don’t affect commodity prices by much”

              We need lower commodity prices or else we need to worry about raising wages to match. And the economy tanks. There are always market corrections going on. It is the very premise of the market. The commodity market will correct itself, it might not be as pretty as you like, but it will correct itself.

            • In order for the commodity market to correct itself, we need a price that is both
              1. Affordable by consumers
              2. High enough for producers

              Everything I can see says that we have left that situation. The price needed by producers is higher than what consumers can afford to pay.

              Governments are pretty much tapped out right now. I don’t know about corporations–trying to get wealth from them is hard. They have been keeping a larger and larger share of the GDP dollar, thanks to their ability to move taxes to other countries where tax rates are lower.

            • madflower69 says:

              “Everything I can see says that we have left that situation. The price needed by producers is higher than what consumers can afford to pay.”

              Then you face a market correction. The consumers will be forced to not use the product, or use it in lower quantities, or switch to a lower cost product. It is pretty basic econ 101.

            • The problem that we haven’t figured out is that we humans cannot get along without energy products. Theoretically, we could have organized things differently, so that we used less, but it is late now to reorganize to use less. We have huge problems, if the quantity of energy available declines, including a collapse of the debt Ponzi that we have built up over the years. The writers of Econ 101 unfortunately forgot to figure out how the real economy works.

            • madflower69 says:

              ” We have huge problems, if the quantity of energy available declines, including a collapse of the debt Ponzi that we have built up over the years. ”

              In a way, you are right. Our big mistake as a society was to put all our eggs in the FF basket then subsidizing them to the point, where nothing else could compete and we lost the whole alternative industry. Now that issue is being corrected, the markets are correcting.

              Whether it is too late or not, I don’t know. I know several countries are facing recessions, and will probably drag down the whole world, like the FF stocks are dragging down the major indices.

            • I think the problem is more basic that you do. We tried battery operated cars 100 year ago, and never got the design to work. The fuels that were encouraged worked quite well (even though they had pollution problems). Perhaps there were subsidies (or not)–the total cost structure was very low for both oil and coal. Generally, these fuels pay high taxes, rather than get subsidized.

              Hydroelectric worked well, and needed little encouragement to expand. Its quantity has been dropping in recent years in the US, but growing in China and some other places.

              Wind and solar PV are different–they can be disruptive for other suppliers, and bring the whole system down sooner, rather than later. It depends on the cost structure. The last thing an electrical system would want is to have their fossil fuel electrical suppliers go bankrupt, because the intermittent producers are favored over the fossil fuel suppliers. Yet this seems to be the way things are going in Germany, and to a lesser extent here.

            • madflower69 says:

              “I think the problem is more basic that you do. ”
              No. You are describing the problem basically we hit a wall with FFs. The price of extraction is rising, and we need cheaper fuels to power the economy. I am describing is solutions. While renewable energy was more expensive in most cases, there is a better chance we can lower the cost of them.

              “We tried battery operated cars 100 year ago, and never got the design to work. ”

              Actually the 1910s were the heydey of electric cars. They were more expensive luxury cars and were pretty much killed by the great depression. Detroit electric delivered it’s last car in 1939. The technology they are using today in electric cars is vastly different then the 1900s electric cars. Most of the drive train for electrics and hybrids are all new inventions. Tesla has 450+ patents.

              “Generally, these fuels pay high taxes, rather than get subsidized. ”
              There are still subsidies available to the industry. We do collect money from taxes, it is easy and it is a profitable tax. We changed the law that essentially required their use to allow for alternatives to use the roads.

              “Wind and solar PV are different–they can be disruptive for other suppliers, and bring the whole system down sooner, rather than later. It depends on the cost structure.”

              Right. We are trying to bring the cost structure down for these, and make them easier to integrate into the grid. This is small scale, but an example and far from the only one:

            • Ed says:

              Gail, when we leave the area where cost to produce is lower than affordable price to buy we leave economics and enter politics. In politic all other areas of consumption can be taxed and the money transferred to oil extraction. This works until the government pushes the work over the top of the Laffer curve. I believe that is what we are seeing with young people unable to form families, unable to buy houses, unable to buy cars. There is little value to them from work. They are making rational economic decisions to not play a loosing game.

  8. Fast Eddy says:

    Either Yellen is having a stroke — or she is stoned out of her mind on Xanax as she tries to keep a straight face while spewing a stream of lies….

    Remember how Bernanke used to get through these things — he was like a robot…

    Imagine the pressure of ‘knowing’ — and having to try to convince people that all will be well…

    She’s probably thinking about how her grandchildren are going to end up roasted on a fire of plastic bags….

    • Ed says:

      Fast you are ascribing a psychological structure of caring about others that I believe just is not present in these people. Might be she gets the biggest chuckle out of these dog and pony shows.

      • Ed says:

        How big a lie can I tell, how can I make this a bigger lie, how can I make black sound like white? The fun never ends.

        • Fast Eddy says:

          She may not care about others but she definitely cares about her family…. and she knows they are about to suffer and die….

          • Ed says:

            We know George Bush has 100,000 acres in Paraguay. Would be interesting to know where the 0.001% own land. I hear Patagonia is a favored area for the tribe. Lots of Israeli art students hiking around with surveying equipment.

    • Ed says:

      Holy cow, I vote for stroke.

  9. Fast Eddy says:

    Where would the spare parts – electricity – computers — etc… come from to run the oil rigs — and the refineries

  10. Fast Eddy says:

    Caterpillar has sent a sharp warning on the outlook for global industrial demand as the bellwether for economies from China to Brazil said it could slash more than 10,000 jobs and expected 2016 to mark an unprecedented fourth year of falling sales.

    The announcement, which sent the US group’s shares tumbling 6.5 per cent by midday and weighed on the S&P 500 index, comes as concerns over a slowdown in China and other emerging markets ripple through global markets.

    Orders for Caterpillar’s bright yellow equipment are seen as a prime indicator of the health of the global mining, energy and construction industries. Mining and energy have been hard hit by sharp falls in the price of oil and other commodities, and construction revenues have fallen from North America to Asia.

    Caterpillar generates 60 per cent of its pre-tax profit from outside the US, and slowing emerging markets had already forced it to cut 31,000 jobs and close or consolidate more than 20 manufacturing facilities since 2012.

    The mass layoffs and bankruptcies are coming…. and there is nothing to stop them this time

  11. Rob says:

    The probability of cataclysmic events happening very soon may be small, but is rising every day.

  12. Stilgar Wilcox says:

    After a lengthy attempt to regain some credibility on the Fed’s direction on interest rates, Yellen needed medical attention – dehydration? Who could blame her for some vapor lock after the long build up to an interest rate hike followed by a quick, last minute reversal to not raise rates, the loss of credibility, then tonight claiming an interest rate hike is still in the offing this year. I mean come on, it reminds me of Poltergeist when that little girl is trapped in a room with all that light and the advice is, “Carol Ann, go to the light, go to the light, no go away from the light, away!” Poor Carol Ann is no different than all the world’s investors now looking at each other wondering if there really will be a rate hike or not. Maybe Yellen should have had jugglers flanking her with some guy doing the 3 shell game in front of her and a court jester doing a schtick.

  13. Steven Rodriguez says:

    And when jobs are scarce, enlistment goes up. that will also allow the mitilary to run the large grain farms and the distribution systems.

  14. Ed says:

    Fast, in your opinion what are the chances of my wife and I getting work visas for New Zealand? Thanks.

  15. Kurt says:

    The U.S. produces more than enough oil to run the military. What would prevent the military from taking over the necessary wells and refineries?

    • Lack of a financial system to pay the military.

      • Ed says:

        The military may need to re-trench. Move on base. Food from base store. That food coming is need be by military convoys driving out and taking it. Yes, once the current stock is gone they will need to have provided and protected enough farmers to create the next crop. Logistics is one of the things the military does well especially if it is to fill their own belly and pursue.

  16. Fast Eddy says:

    Now isn’t it awesome that we have such vicious dogs on our side — who will do anything — to ensure we get to live large?

  17. Fast Eddy says:

    Can you tell truth from lies in mass media? RTD’s Miguel Francis-Santiago delves deep to try to understand the intricacies of information war. He meets media experts and puts together the Mosaic of Facts, showing how public opinion is manipulated, not just over the Ukrainian Crisis but throughout the world.

  18. Fast Eddy says:

    Was checking how much real wages are down in the US…. and stumbled across this load of shite on Wikipedia:

    Household income is an economic measure that can be applied to one household, or aggregated across a large group such as a county, city, or the whole country. It is commonly used by the United States government and private institutions to describe a household’s economic status or to track economic trends in the US.

    Median household income has been on the rise in the United States since 2011. As of 2014, the median household income was at $53,891. A 3.8% rise from $51,913 in 2011.

    This is an indication that the economic recovery is taking hold.

    But Americans have yet to fully heal from the Great Recession, which officially ended 2010. Median income still remains 3.1% below its 2009 level of $55,589. That’s in large part because unemployment remained high in the early years of the recovery. Black households have also seen their median income rise by 3.5% since 2011. Hispanics, meanwhile, were not as fortunate recently — their income has remained essentially flat since 2011.[1]

    “This is an indication that the economic recovery is taking hold”

    That’s the giveaway that the spin masters are involved…. when things are really bad — you lie — and you change the facts on wikipedia…

  19. liamlynch101 says:

    One thing I’ve never considered with the debt collapse problem, and has been brought up already, is how warlords will have the main rule following the collapse, and personally, I believe those warlords will probably be responsible for the main bulk of the dieback that is to come with the primary warlords being those who are affiliated with the Islamic State or Al-Queda because they can easily destabilise any European Country when everyone is fighting one-another and bam, just kill every single person in that area, clear it out…

    • Fast Eddy says:

      Don’t rule out the Christian warlords….. see the Crusades ….

      • daddio7 says:

        I read a post about warlords and think why do warlords always have to be evil? Almost every Christian man I know, including me, was in the military. We can’t have a God’s army? Next post Eddy says it out loud. While many people see only the turn the other cheek Christians there are a lot of militant Christians who prefer the kick ass God of the Old Testament. They may pray for your soul but only after they have blown your head off.

        • Fast Eddy says:

          Because a kind warlord is a dead warlord….

        • Ed says:

          Everybody has their definition of Christian. As a member of the Religious Society of Friends I do not see the army as moral nor as doing God’s work. I see it as thugs stealing stuff for the rich (see General Smedley Butler).

        • xabier says:


          There’s actually an old Spanish saying: ‘Praising God, and whacking you on the head’!

          Some bishops used to fight with maces and war clubs, as their faith didn’t allow them to ‘take up the sword’…….

    • Perhaps–it depends on how dependent they also are on the current system. It could be a lower-level version of warlords–neighborhood gang, instead.

  20. From PObarrel chat where Dennis Coyne says:
    09/23/2015 at 2:27 pm
    “.. High oil prices have resulted in investment in enhanced oil recovery and new onshore and offshore developments which have added to output. The oil industry has been more resilient than many peak oilers thought possible in 2005 or 2008. Also high oil prices were tolerated better by the World economy than many expected, but demand did grow more slowly due to high oil prices. The peak in oil output(C+C) will arrive, but maybe not until 2018 to 2020, if NGL is included, the peak in C+C+NGL may be in 2024”

    So “early doom peakers” of mid 2000s were aprox. 2decades off!
    While “moderate-realist” peakers with instadoom scheduled no later than 2014/2015 window like prof. Hirsch were a decade off! Not a big mistake in grand scheme of things, but not very encouraging for planning on individual level with constrained resources..

    With all due respect I doubt Gails theory on financinal system unraveling first is not of that different predicting value, since TPTB have clearly the powers and stone cold determinations to paper over the instabilities to the very bitter end. So another decade of waiting for Godot, who might not decide to show up for some another reason in the mid 2020s anyway.

    • bandits101 says:

      Peak Conventional Oil WAS in 2005, the rest is smoke and mirrors and lies, exactly as you have written, like adding NG and calling it oil as well as bio fuels and condensate. Soon wind generated electricity will be called oil.

    • I wouldn’t count on another 10 years. There seem to be too many things going wrong. But maybe the QE folks can figure out something for a bit longer–QE directly to the people, for example. All of the talk about high oil prices did no good at all–wrong story.

  21. Fast Eddy says:

    “It’s like a pig on LSD. You don’t know which way it’s going to run,” Chanos said of China’s stock market, which of course is susceptible to huge intraday swings depending on what mood the PBoC’s plunge protection team happens to be in.

  22. Ed-M says:

    Short time lurker, first time poster.

    Slightly OT, but I noted an article on Daily Kos about the unaffordability of rental housing in this country, and did a write-up about it here. The young people today are increasingly stuck in their parents’ house until they can get out from underneath their student debts and save enough to buy a house.

    Of course the downslope of oil extraction will make suburbia unworkable, which means those who can afford to do so will crowd, and are crowding, into the cities thus gentrifying them and driving up the housing costs further.

    If it pleases her, maybe Gail can do a more in depth write-up.

  23. Pingback: Donald Trump and The American Dream | = || +

  24. sELASSIE says:

    (“migrant crisis”)

    FE, that is a very good speech by Nigel Farage.

    Junker looks like he is not the least bit bothered what Nigel says. The EU intends to flood Europe regardless of what anyone says or thinks – and regardless of the truth of the matter.

    We all saw the photo of the drowned Syrian kid. It was all over the Western media for weeks, tugging on our heart strings to tell us that we are heartless and “evil” if we do not want Europe to be invaded by millions of immigrants from the Middle East and Africa. “We are a moral country and we will do our duty” proclaimed Cameron.

    This is a blatant state media propaganda campaign aimed at flooded Europe, regardless of what Europeans want.

    Some salient facts about the current immigration invasion of Europe and the MSM propaganda campaign:

    75% of the invaders are young adult males. Only 13% are minors and hardly any are toddlers. Yet the drowned kid was constantly shown as the face of the invasion. The TV cameras pick out and focus on any child that they can spot in the flood of young men. The coverage is always sympathetic and tearful at the “Syrian tragedy” in tone.

    Only 20% of the invasion flood are Syrians. Yet the media has constantly shoved down out throat the message that they are helpless victims of the wicked Islamic State in Syria, as a media pretext for the invasion. “Who wouldn’t want to save toddlers from Islamic State?”

    The drowned child was not fleeing Islamic State. His family has been living in Turkey for 3 years and the father was working as a people smuggler, putting people in danger of drowning, with the support of Merkel and Junker.

    Of over 60,000 Muslims polled by Al Jazeera, 80% support Islamic State. A Christian is now killed every five minutes across the Islamic world.

    The European deep state fully intends to flood Europe, regardless of what Europeans want or of the consequences. They calculate that if civil war actually kicks off, they can just roll out the totalitarian MSM-police state even further. Merkel has now forced Eastern European countries under threat of sanction to take hundreds of thousands of the current invaders, totally against the will of the governments and the demos.

    As you suggest about the future, this all makes a mass invasion of Europe all the more likely upon the collapse. Yes it was likely anyway.

    TPTB seem intent on making the collapse as bad is it could possibly be. They will do anything that they can to flood Europe and to keep the capitalist system going a little bit longer.

    • Ed says:

      If one does not want the neighbors coming begging do not bomb your neighbors country.

      If one want to stop people from entering ones country draw a line and station military with guns. When people cross the line shoot them dead.

      Yes, someone wants to flood Europe but I do not believe the motivation is to keep capitalism going a bit longer. I believe the motivation is to extinguish white Christians. Also to clear out and disrupt the middle east for the expansion of Greater Israel and the continued theft of resources.

      • sELASSIE says:

        Hi Ed, thanks for your reply. I agree with most of what you say there.

        The basic attitude that we will have to take is, whatever is good for us, is good. That implies a fluid approach that is not bound by dogmas, religious or otherwise.

        Morality is not an end in itself, it is a tool that we use toward our own survival and prosperity. Situations change and we need to be able to adapt to new situations.

        If war suits us, then war is good. If war does not suit us then war is bad. Our role in the Arab Spring was justified by the liberal capitalists as an expansion of liberal democracy. It proved a foolish disaster.

        You say that you are a member of the Quakers. I dont know which yearly meeting you belong to but you would be expelled in Britain for that post.

        Like the other Christian churches, they are fanatical adherants of the multicult. Any tendency toward ethnic survival is stamped out. It is doubtful that Christianity will prove useful to the race, considering what it has become but only time will tell.

        All of our institutions, governments, most political parties, churches, media, universities etc. have become fanatical adherants of the multicult. Thus far we are clearly headed for extinction.

        If we have become a race of cowards and traitors who refuse to stand up for ourselves and our own interests, then we deserve to become extinct.

        We will just have to wait and see what happens when the collapse comes. There may be a positive role for Christianity but I do not have high expectations of any of the mainstream churches. They have made their position clear. Perhaps they are capable of a volte-face,

        • Ed says:

          sELASSIE, agreed.

          Bullshead-Oswego monthly meeting, Nine Partners quarterly meeting, New York Yearly Meeting, Friends General Conference and Friends United Meeting. There are so few of us left I think we have agreed to live and left live.

  25. Fast Eddy says:

    Total, the French energy group, is to slash capital spending next year, the first of the oil majors to signal deeper cuts to projects amid fears that the drop in crude prices will be prolonged.

    Patrick Pouyanné, chief executive, has told investors in London that investment in oil and gas projects will be reduced as much as 15 per cent in 2016 to $20bn-$21bn, from this year’s $23bn-$24bn.

    • Rodster says:

      As the collapse which we are in accelerates and deflation takes hold, we will probably see more of this until the house of cards collapses.

  26. Fast Eddy says:

    Time for a bit of fun….

    J-Roc : Best of Know What Im Sayin’

  27. Fast Eddy says:

    The first quarter is coming to a close, and things are not looking so good. Analysts predict that, on average, earnings at companies in the S&P 500 for the first three months of the year have fallen 5% from a year ago, according to FactSet.


    S&P 500 September 18, 2015

    Earnings Growth: For Q3 2015, the estimated earnings decline is -4.4%. If the index reports a decline in earnings for Q3, it will mark the first back-to-back quarters of earnings declines since 2009.

    Earnings Revisions: On June 30, the estimated earnings decline for Q3 2015 was -1.0%. Nine sectors have lower growth rates today (compared to June 30) due to downward revisions to earnings estimates, led by the Materials sector.

    Are companies in the S&P 500 with more global exposure expected to report weaker sales and earnings growth relative to companies in the index with less global exposure? The answer is yes.

    See the graphs for Q3 on the PDF…. A blood bath is coming….

    You’ll need to google : profits are declining for large US corporations — if you want to get at the PDF….

    A massive story …. that is not covered by the MSM … or buried ten miles deep on their sites…

    Imagine what this would do to CONfidence if it were to appear on the home page of major financial sites….

    It’s like crazy Uncle Wanker the peed—o- file…. nobody mentions him…. nor do they mention Auntie CAT — the whacked out hag who smells like cat piss….

  28. Fast Eddy says:

    Chinese Factory Gauge Drops to Lowest Level Since March 2009

    September 23, 2015 — 9:45 AM HKT

    > Readings remained below 50 since March, indicating contraction
    > Soft PMI “mainly reflected weak external demand,” HSBC says

    A private Chinese manufacturing gauge fell to the lowest in 6 1/2 years, underscoring challenges facing the nation’s factories as the economy’s old growth engines splutter.

    The preliminary Purchasing Managers’ Index from Caixin Media and Markit Economics was at 47.0 for September, missing the median estimate of 47.5 in a Bloomberg survey and below the final reading of 47.3 in the previous month. Readings remained below 50 since March, indicating contraction.


    Now watch what happens to Glencore and the commodity sector….

    Of course none of this matters…. all these companies can go bankrupt yet the rich will continue to live large…. BAU never ends for them ….

    • Rodster says:

      “Keep Reporting On Bright Economic Future” – China Ministry Of Truth Demands Media “Properly Interpret” Data. Both state and independent media have been pressured to keep economic reporting upbeat and to downplay the stock market crash last month as well as slumps earlier in the summer.”

      • Rodster says:

        “The Story Of China Is The Story Of Japan… Just 10x Bigger”

        • Interesting! Demographics does play a big role in the property market, especially. I understand that many of the vacant apartments are owned by people who are saving for their retirement, and feel that a physical investment is better than a bank account. Since there are no property taxes, and real estate (up until recently) was rising in value, it seemed like a good investment. There are still a significant number of Chinese farmers that could theoretically move to cities, if more energy products reduced the number of farmers needed for food growing, and if the number of jobs available in the city increased. But in order to make these changes, the amount of energy consumed would need to be rising, and the demand for exports would need to be rising. These aren’t happening.

          At the end, the author mentions that the population of 15-64 year olds in India is also now declining. I hadn’t realized that this was the case.

          • Fast Eddy says:

            If I recall correctly from an article explaining why there are so many empty apartments (I read this a couple of years ago) — the average wage in Shanghai is USD4,000 per year — most of these apartments cost at least $250,000 — therefore an average family could not afford to rent one.

            So they have sat empty — but the owners did not mind — because prices were constantly increasing….

            • I know that condos are not very affordable–I am not sure if the comparison is quite the one you are making, though.

              I think that multi-unit buildings are mostly sold as condos. Many people buy them as investments for retirement. There are no real estate taxes, and until recently, they went up in price, so they looked like a better bet than bank deposits. I don’t think it has been common to rent them out. Allowing investment in the stock market is pretty new, so buying extra condos was an alternative for the rich.

      • Somehow this is very easy to believe. It makes the reported economic growth percentages even harder to believe.

        • Fast Eddy says:

          Same situation in the US — the MSM is not reporting on dire stories such as the fact that both revenues and profits at virtually all Fortune 500 have dropped significantly year on year….

          Apparently that is not a newsworthy story….

          • Since we haven’t finished the third quarter year, that part of the story is still rather speculative.

            • madflower69 says:

              from the article:
              ” Energy again is expected to drag down the S&P 500 third-quarter forecast the most, with an expected 64.7 percent decrease in the sector. Without the energy sector, the forecast for third-quarter earnings shows a gain of 3.7 percent.

              Earnings for the commodity-sensitive materials are expected to fall 13.8 percent, while industrials’ earnings are seen down 3.6 percent.”

              So the energy sector is dragging down the commodity markets and making everyone else look bad.

              I’m still rolling with a market correction as Nike posted huge profits.

            • Fast Eddy says:

              The smoke is clearing and the mirrors are smashed….

              Those numbers are what is known as a blood-bath… but the stock markets remain at record highs — and next month rates will rise….

      • Fast Eddy says:

        PBOC Chairman says ‘Future is So Bright Everyone Must Now Wear Shades’

  29. Fast Eddy says:

    I never argued that there was any redundancy … you did.

    I argued that a system that is complex is actually more fragile — Tainter and Korowicz and Gail’s stick structure were influential in forming this argument.

    Feel free to keep digging the hole deeper.

    • greg machala says:

      In my opinion the redundancy in our systems is dependent on the energy and inertia in our system as well. So, in that respect I don’t feel that we have true redundancy. Everything is connected so to speak. Contrast our modern day 1% in the USA working in agriculture to 200 years ago there were thousands of independent farms. That is the kind of redundancy we need today. At 1% in ag jobs we have a long way to go to get the food security we had 200 years ago.

      • madflower69 says:

        “At 1% in ag jobs we have a long way to go to get the food security we had 200 years ago.”

        We produce far more. The labor that has been replaced over the years is the tedious hand labor, especially for harvesting, threshing, planting, etc. You would not like the price you would have to pay for foods if we went back to the old methods. Corn would be like 20-30 dollars a bushel. Wheat would probably be like 50/bu, and bread would be like 15 dollars a loaf

    • Fast Eddy says:

      Actually — that’s me you see way up there at the top of the hole …. with the shovel … burying you alive 🙂

  30. Artleads says:

    Tom Campbell.

    I recommend this video quite highly. It really gets going around a third of the way along.

    I got to around 1:10:00 and have to take a break. But already the information is phenomenal.

    • urbangdl says:

      In regards to complexity we barely do things (financially wise) considering we won;t get something in return or that our generation will not live it to see it. Alturism is often one way, you would have to get rid of the debt concept as we know it in order to focus our efforts on trascendent endeavours that will not pay back in money but in progress or even evolution for the race as whole.

  31. Fast Eddy says:

    A whiff of the future….

    • Stilgar Wilcox says:

      Yeah, wait until there’s 3 feet of sea level rise. Refugees on a scale that will make what is occurring now in the EU seem like small potatoes.

      • madflower69 says:

        “Yeah, wait until there’s 3 feet of sea level rise. Refugees on a scale that will make what is occurring now in the EU seem like small potatoes.”

        Hopefully, we don’t get to 3ft rise, anytime soon. 🙂 I feel sorry for the refugees that the EU didn’t actually step in and try to do anything before it got this far.

  32. Fast Eddy says:

    “Doomsday” Cometh For Glencore: Mining Giant’s Default Risk Just Exploded Higher

    Today’s Glencore implosion is a far greater risk to the capital markets and the global economy than Volkswagen: a few executive resignations, a few bribes to US Congress, and the scandal will be promptly snuffed.

    For Glencore, however, which suddenly the entire world realizes is – as we said in March 2014 – the way to trade China, it may now be too late.

    • The Glencore situation is worrisome. Too much debt. Too much exposure to low prices.

      • Fast Eddy says:

        And seemingly no way that the prices are going to go higher…

        I see they are planning to shut more mines…. shuttering mines and factories might drive up commodity prices a little for a short time — but that actually makes the overall problem worse because all those laid off people by little….

  33. Fast Eddy says:

    Is Deutsche Bank the next Lehman?

    Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened. In hindsight there were a few early-warning signs, but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

    I emphasize the word ‘quickly’….. collapse involving the financial system generally comes quickly …. as in virtually overnight….

  34. Fast Eddy says:

    The rout across metals and mining shares accelerated as evidence of China’s slowdown renewed investor worries and analysts said prices are heading lower.

    Glencore tumbled as much as 16 percent, the most ever, and slid below 100 pence for the first time since it began trading in 2011. Anglo American Plc touched a 15-year low and Antofagasta Plc sank 7.3 percent. KAZ Minerals Plc, a small copper miner in Kazakhstan, lost 25 percent.

    CAT has company…. big company….

    Surely it is not difficult to see how collapse at some point could accelerate and pretty much be an overnight event —- once the markets understand that growth is over — that corporations profits are no longer profitable with no prospects for profits —- and that the central banks are powerless to reverse the situation

    Institutional money will run for the hills…. and these giant corporations will be vapourized ….

    • Rodster says:

      The only glue that’s holding everything together is “FAITH” in the system. Once that faith is questioned is when you can you can expect major troubles and the dominoes falling over.

  35. dolph9 says:

    I’ve explained myself over and over again and so this will be my last post for this series.
    We are like monks, like academics, obsessing over the details of what should be happening, forgetting that the world has already passed into the virtual.
    Objective reality no longer matters. What matters is fraud, manipulation, marketing, control. Have you learned nothing? People can be made to believe anything, and to do anything. This is why there’s not going to be a sudden collapse. America, and by extension the American led world, is the most successful con job of all time, peak oil or not. All you need is a certain amount of calories to keep people going, and certain minimal, recycled inputs in the form of games and entertainment. Just provide that to people (not that much energy is needed for that) and they will be made to love their slavery. Imprison them if they get out of line. Easy peasy. Look at how amazingly simple it was to convince the rednecks to join the military and protect the oil lanes in the Middle East.
    They will not, and will never, give a darn about anything we write here. They will watch their football and hollywood movies (if we no longer produce them, they will watch reruns) look at pictures of naked ladies, and dream about more stuff to buy and the good life, and just sort of quietly work and waste away until they are finally bankrupted.
    It’s brilliant, freaking brilliant. I’m telling you, people will never give up on the dream, on the prospect of the better future that is just around the horizon. They will quite literally be starving, foreclosed on, drowning in alcohol and begging with a cup, and they will still believe in their hearts that we are living in the best of times, and their children will be on fusion-powered spaceships to Mars.
    I agree with B9K9 in the sense, find out what your place in all of this is, position yourself accordingly, but don’t waste time endlessly speculating on, is this the day? Because it’s never the day, and never will be.

    • B9K9 says:

      Dolph, you sound like a frustrated doomer.

      Consider the riddle wrapped within the mystery: first one has to go through the traditional 5 stages of grief when first confronted with the physics of limits to growth. Then, when you finally become accustomed to reality, you must repeat the same process when you discover it won’t be quick. Rather than evil doers brought to justice, many of the same bad actors will still be in charge during the power down. That’s why you can add evangelicals fervently praying for end times to your visual imagery of monks quietly contemplating and discussing pending doom. LOL

      With respect to built in systems redundancy and resilience, perhaps readers should acquaint themselves with Galbraith’s analysis of the effectiveness of strategic bombing during WWII:

      Short answer: German production increased. Paul likes to post up photos of impressive refinery works, but they only look like that due to environmental regulations. There’s nothing particularly difficult about refining oil, nor is it difficult to transport by pipeline or rail, if the end objective is to simply make it work. With military and core industrial mandates a la Albert Speer, this sucker can keep going for far longer than many suspect.

      Oh sure, it won’t be gleaming Walmarts & supermarkets chock full of goodies, but as long as there’s water, carbs (rice, corn, wheat, soy & potatoes), alcohol/drugs, a little (ok, make that a lot) of sex, and of course some interesting blood sports, well, let’s just say those like Paul are going to be very frustrated.

      • Fast Eddy says:

        Can you provide a reference for the claim that refineries look ‘like that’ because of environmental concerns.

        How to Make Petrol or Gas from Crude Oil

        Now after watching that and you still maintain the fantasy that we can refine oil post collapse ….

        How do you get oil out of the ground without the complex machinery that is used to extract oil? How do you make that machinery — spare parts — precision lathes that are required to make said machinery — computer systems and so on…

        I am not aware of a single oil well on the planet that spurts oil to the surface on its own….

        This should put an end to the wishful thinking of people who believe we are still going to have petrol post collapse….

    • We certainly do have a lot of fraud going on, and people don’t realize it. They are deluded by whatever story they are told–we don’t need energy; some product will save us tomorrow; the economy can grow forever.

      • Fast Eddy says:

        Or that growth doesn’t matter anymore … or that it does not matter if the entire Fortune 500 collapses into bankruptcy…. or that we can extract and refine oil even when the economy collapses….

        People are capable of believing just about anything….

  36. Al Beano says:

    On the oil and 9/11 connection:

    Also Google “New York mini-nukes cancer” and see how much comes up.

  37. James II says:

    I’ve just been thinking that you can’t have a slow financial collapse because holders of those hundreds of trillions of paper wealth will try to dive into real assets and create a hyper-inflation. Unemployed people cannot live with $20.00 loaves of bread. The answer is to have a rapid financial crash that eliminates most of the fictitious wealth before it can lay claim to underlying assets. Bankruptcy on a massive scale equivalent in many ways to a debt jubilee. Then government sets prices, distributes necessities and resets the system. The debt corporations are trading for shares may never have to be repaid.

    • Al Beano says:

      James II said:

      “holders of those hundreds of trillions of paper wealth will try to dive into real assets and create a hyper-inflation.”

      Now how would hyperinflation work? In the early days, you have to issue bigger and bigger coins to fit all the denominations in. Douglas Adams, the late expert on inter galactic economics, has written about this:

      “The Triganic Pu is a unit of galactic currency with an exchange rate of eight Ningis to one Pu. This is simple enough, but since a Ningi is a triangular rubber coin six thousand eight hundred miles along each side, no one has ever collected enough to own one Pu. Ningis are not negotiable currency, because the Galactibanks refuse to deal in fiddling small change.”

      I must respectfully disagree with Mr Adams’ theory. If hyperinflation strikes, the coinage cannot cope: the authorities will simply remodel the coin / note border and then switch to printing banknotes to accommodate the speed of the inflation. An old photo shows a German of the 1920s with a wheelbarrow full of banknotes. Eventually you may need 10 extra wheelbarrows just to carry the money to do your shopping, but to buy a single wheelbarrow might require 50 wheelbarrows full of banknotes, for which you’d need as many arms as a centipede has legs, so at that point it’s “game over”. If the state cannot produce a new soundly based currency, the population will switch to tokens or else use somebody else’s currency.

      Another theory suggests that, as the velocity of the banknotes increases, eventually people will be suffocated to death by massive amounts of banknotes flying through the air at speeds of up to 100 miles per hour. Given global warming, many of these notes may catch fire, and parts of the population caught up in them will simply burn to death.

    • The question is whether the governments can last for very long. If they don’t you have a real problem.

  38. Ed says:

    Russia to build floating nuclear power plants for Indonesia.

    • Ed says:

      They can make synthetic methanol and sell it to the world. They can become the Saudi Arabia of the world. A fleet of 1000 plants at 250MW each is 250GW about 1/4 of the US usage. Build baby build.

    • Fast Eddy says:

      Based on my experience living in Indonesia for 7 years…. this would be a very bad idea….

      • xabier says:

        That Indonesia news made my head swim today.

        Sanity was restored by the – one hopes unfounded – allegation that British Prime Minister Cameron engaged in sex acts with a pig’s head (dead.)

        Do not fear, friends: safe hands are on the tiller!

  39. Greg Machala says:

    “I do not agree that ‘inertia’ in the system is relevant — as Gail has pointed out (and the tradeoff paper) — the complexity in the system is actually a bad thing — a simpler system would be far more robust…”
    I too agree that we have no real inertia in our system. It is an illusion of inertia as long as the JIT delivery of goods and services works. I feel there is an inertia with respect to the normalcy bias we have rather than to the actual system of delivery or goods and services. A race car engine at 15000RPM has a hell of a lot of inertia but, if a connecting rod fails the whole engine blows itself to pieces in seconds. Contrast that with a very simple system of a steel spin-top spinning at 15000RPM and bumping into a wall. The simple spin-top system is robust and has inertia in and of itself…whereas the engine is a complex network of interconnected parts each doing a specific tasks to keep the engine running. This is why I feel that the collapse will be quick and not slow and grinding. A slow grinding collapse may be in the cards for places like India but, certainly not for the USA and Europe (or any other country heavily dependent on the network of global trade and energy).

    • John Doyle says:

      I agree about inertia. I think the most relevant safeguard is REDUNDANCY.
      There is a fair amount of it and when trouble strikes a work around can usually be found.
      Still it’s eventually going to fail too.

      • Fast Eddy says:

        Almost all corporations in the US have declining profits…

        CAT just clocked in with another brutal month – – 11% — nearly 3 years of declining profits

        Eventually they will go bankrupt — as will loads of other major corporations

        That will collapse banks — that will collapse the financial system

        How does redundancy help CAT — how does it help the other fortune 500 companies when they become insolvent?

        • madflower69 says:

          “Eventually they will go bankrupt”

          I wish I was going bankrupt like that. 184M profits for Q2 with a 10% dividend check, and a 1.5B stock repurchase program for Q3.

          They serve cyclical industries like gas/oil, and construction so it isn’t totally unexpected after a boom.

        • John Doyle says:

          It doesn’t. It’s irrelevant. It’s an internal matter for the companies. Redundancy is relevant for systems, like bypassing breakdowns in services. No one says it’s a magic fix but it’s normal procedure for services grids etc. and will give some extension to the life of the service, so it won’t all fail at the first sign of trouble.

      • Stefeun says:

        Redundancy is a safeguard only if the workarounds & bypasses have free capacity.
        If all possible paths are already running at full capacity, a local failure only adds load to the whole network, thus making it more brittle in its entirety.

        Remember David Clarke’s sand-piles and “interconnected red zones”:

        In the article he also describes the same pattern for an intranet network:
        “Our Intranet network could have been built to be reliable, but instead it was built to be “efficient”. Far from being a network of fail-safe systems, our network is a network of interdependencies. When the system was loaded, a single failure brought the whole system down. “Business Efficiency” has brought our network to its knees for two consecutive days.”

      • Early economies had lots of farmers. That added lots of redundancy. In fact, there were relatively few occupations. If 75% of the population died of some dread disease, the remaining 75% could carry on as before. In fact, they could do a lot better, because there would be more resources per person.

        • liamlynch101 says:

          Too bad things aren’t like that now, although perhaps following the collapse, some people in some countries could attempt to live off the land.

        • greg machala says:

          Exactly. 200 years ago in the USA almost everyone relied on farming for income and survival. Today 1%. That just seems like a recipe for disaster.

          • Ed says:

            Not bad if all own a piece of the means of production (real production like food, cloths, medical care, housing, transportation). The problem is 99% do not own anything. They/we are just slaves.

  40. MG says:

    The Czech sense of humor regarding the desparation of today’s situation:

    1. The group of Czech prankster artists Ztohoven (Ztohoven — the name in itself is as play on words and can mean either a “way out of this” or “a hundred shits”) replaces the Czech president’s flag with huge underpants:

    Video on can be found under the name “ZTOHOVEN: Trenky na hradě”.

    2. One Czech man, working in the marketing area and designating himself as anthropologist, is founding a political movement based on one category present in political party preference surveys, which is titled “I dont know”, regarding which party you would vote in the elections. The name of this new party will be this “I dont know” and this party describes itself as “finally, the party that promises nothing”.

    Among other things, its aim is to nominate the oddest people to posts within the state, so that no one is disappointed, when somebody, looking like a honest person in traditional political parties, proves to be a mafioso, incompetent or perverse person etc.

  41. Pingback: How our energy problem leads to a debt collapse problem | Enjeux énergies et environnement

  42. The Truth says:

    We must be willing to recognize how little we truly understand about the secrets of the cell, the fundamental unit of life.

  43. Pingback: How our energy problem leads to a debt collapse problem | Doomstead Diner

  44. VPK says:

    Dear Gail and Fast Eddie Readers,
    I thought to recommend a recent book purchase that reveals the true dynamics of “PTB” and reveals the dynamics and History of a very significant period in world History, Andrew Scott Cooper’s Oil Kings: How the US Iran and Saudi Arabia Changed the Balance of Power in the Middle East”. Focuses on the period from 1969 to 1975 and back ground reflections. I’ve only begun and the pages I have read been worth the price of the book.
    We talk here about DNA and other topics, but “personalities” and interpersonal relations of the human being with social class plays a very significant role, more than we can fathom. Human conditioning , via culture, family, ect, plays a chief role in the way we react to events.
    This is a great study of major figures, Nixon, Kissenger, The Shah of Iran, King Fasil, sect.
    Worth the time to read.

    A used copy is very cheap and you can read further reviews at Amazon

  45. Stilgar Wilcox says:

    “Still one has to wonder how long the process Will be, could.take a number of years, decades, months, or perhaps a few days”

    Exactly because the rules change, the uprights move in a continual effort to kick the can further down the road. A good example of the rules changing is when the defaults of 08/09 occurred many wealthy people declared bankruptcy, but instead of ruining their credit, the rules amongst the elite changed to accept and understand that a certain elite class got caught up in the mortgage meltdown but otherwise were upstanding citizens and really the regular rules regarding bankruptcy affecting credit ratings should not apply to someone that can afford a high priced lawyer.

    There is no getting away from diminishing returns and some form of collapse, fast or slow is undoubtedly underway, but don’t be surprised as the rules of engagement continually change.

    • liamlynch101 says:

      And even then, we don’t know how far we Will fall. Some countries might maintain simpler standards of living, while others descend into chaos, climate change Will play a role in this.

      • interguru says:

        If we removed every comment that discussed the unknowable answer to how fast the collapse will be, the whole discussion would shrink by about one third. In addition we could avoid the sacrifice of a countless quantity of innocent electrons.

      • bandits101 says:

        Things that we know for sure: the world is hitting limits of almost everything including food.
        The Earth is in population overshoot. It is heavily polluted. It is warming exponentially. The oceans are acidifying. Species extinction is accelerating. The Earth is globalised economically and fully interdependent. That is why we are in this stinking mess. There are no new worlds to plunder. Humans have penetrated to every inch of the habitable and even uninhabitable parts of the planet.

        There will be no islands of plenty in a sea of want. When this starts to go down. All will feel the affects to varying terrible degrees. I can’t name an exact date though, if that is so very important. But it is what the doubters demand to ease their fear.

        • louploup2 says:

          The latest ‘revelation’ to me relates to “Species extinction is accelerating.” The total quantity of biomass is being significantly reduced as well as simplified (extinctions). Two cites:

 ((Human domination of the biosphere: Rapid discharge of the earth-space battery foretells the future of humankind, John R. Schramski, David K. Gattie, and James H. Brown)
          sorry, pay wall; article at

          I’d put in a figure or two but I don’t know how. WordPress is not helpful.

          • This is a link to a version of the Schramski article that is not behind a paywall:


            • louploup2 says:

              Thanks for the link. I found fig. 3 particularly alarming. I’ve gone back up the chain of citations from Smil’s book, and find the data to be a credible estimate (with large error bars not showing in the Schramski version).

            • I know one of the authors of the Scharmski paper–James A. Brown –Univ of New Mexico.

            • Göran Rudbäck says:

              I have to say that this was an immensely stupid academic report and shows a horrifying lack of understanding and thinking . They mix apples and pears, when including fossil energy and nuclear energy in to the battery. Neither nuclear or fossil energy is in any natural way available to the biosphere and therefore makes no difference to life or battery earth, the energy can only come to use via humans.
              They fail to understand that what humans have done with the biosphere, is to shorten the turnover time of organically collected and stored energy, from 20 to 10 years, from 40 ZJ / 2 ZJ/y = 20 years to 19 ZJ / 2 ZJ/year = 9,5 years, primarly by using fire as freeing the energy stored in wood, instead of the much slower decompositioning made by bacteria and fungus. This decrease in turnover time, has also been achieved using the “dead” stored fossil energy, thus doubled the available CO2 to plants. Instead of storing the carbon in trees, it is readily available to the plants in the atmosphere and the same goes for the, pre-human, “inert” fossil carbon. What, if anything, humans have done, is to prepare for a future greener earth and also prolonged the time for life on earth, as the decarbonising death of life is postponed, i.e. the time when too much carbon from the biosphere is fossilised and not enough carbon is available to sustain life.

              The calculated energy consumtion to sustain humans, is ca 1% of the energy from the sun made available to other life by plants. The only conclusion one can make of this, is that the energy from the sun, made available by plants, is to a greater degree used to sustain humans, instead of other energy consuming life forms. This also shows that the calculation of Ω is useless and, even worse, misleading.

              This fundamental lack of understanding physics and biology, is nothing but disastrous to the civilised human, especially if used in a regulatory way.

  46. MG says:

    The Slovak university graduates remove academic degrees from their CVs to get at least low qualified jobs like shop assistants etc.

    • Ed says:

      Supply and demand. The world does not need more average university graduates now.

      Evolution in action, you get a degree thinking it will save you and it does not. Bad choice bad reproductive success.

    • I think the “overqualified” problem exists everywhere. No one wants to hire someone, train them for a while, and then have them leave for a higher-paying job that they really were qualified for, but couldn’t find initially.

  47. dolph9 says:

    I would characterize my viewpoint as somewhere between B9 and Eddy. In the past I agreed with Eddy more, but enough time has passed for me to change my mind. By any accounts, we should have had the so called collapse by now, and because we haven’t it does force one to reconsider. The fast doomers have been yelling that the sky is falling for enough time now for me to at least conclude that the sky is indeed not falling.

    I don’t think TPTB have things under as much control as B9 thinks. A simple glance at geopolitical reality shows me that there are too many parts moving too quickly.

    Doesn’t mean that I’m not a doomer! I’m as much of a doomer as anybody. I see another major leg down coming up, and a decades long transition to a post industrial scarcity/scrap economy, and one that will involve major major regional wars if not WW3, collapse of the international financial system, collapse of the healthcare system, decline of trade and travel, extreme rationing of goods, increase in poverty and mortality, collapse of American empire and eventual implosion of America into civil war.

    Basically, an entire reversal of the whole move up we have all had since WW2.

    Now, if that doesn’t qualify as doom I don’t know what does. But you still have to live life in the meantime.

    • Ed says:

      Dolph9, I agree there is no good way to calculate a time frame. There is still lots of coal in Illinois and Montana.

  48. Don Stewart says:

    Dear Finite Worlders
    For those who like to look at oil ghost towns in Oklahoma…Don Stewart

    Burbank oil field…gave birth to Skelly, Conoco, and Phillips

    If you want to know why there is oil storage at Cushing, OK

    Another recent obituary listed Autwine Oklahoma as the place of birth. The man had worked in the oil fields all over the US, then lived in Lawrence, KS, his wife died, he moved back to my home town, married his high school sweetheart. Now he is gone. The couple who made the YouTube can’t find anyone who remembers Autwine….I wish they had been aware of the fellow who died recently.

    BTW: Many of these were still fairly thriving places when I was young.

    • Each time is different. When fuels are in scarce supply, I expect buildings will be torn down and the wooden parts used for fires. †his, little will be left standing, especially in places where wood is scarce.

      • daddio7 says:

        I am gathering material for what I have named Steam Punk fiction. In a world where the Church has decreed that burning anything taken from under the Earth was an abomination flammable vegetation would be very valuable. Even an atheist could easily believe that breathing coal smoke was bad for you and if scientists manage to fission some uranium the toxic results would only reinforce the need for a ban.

  49. Don Stewart says:

    Dear Finite Worlders

    As a companion to the Natural Resources in a Planetary Perspective study, it might be fruitful to do some light research on two subjects:
    *What does a purely capitalist town look like?
    *What happens to the town when the energetic basis of the town’s economy fails?
    *What did towns look like when the economy had perhaps 20 percent of the fossil fuel energy it has today?

    The first exhibit is this 3 minute tour of the ghost town of Three Sands, Oklahoma. I began to research Three Sands when a woman in my home town recently died, who had been born and lived all her life within a 5 mile radius of Three Sands. For a little reference, the E.W. Marland referred to once controlled 20 percent of the oil in the world. He was outmaneuvered by J.P. Morgan, and lost control. The Marland mansion still exists in Ponca City, OK.

    You can also find Three Sands on Google Maps. You can see what looks like some oil field infrastructure amidst the agricultural fields. A guy from Tulsa has been fracking in the old fields, and causing earthquakes. I don’t know what the current status is.

    The Daily Oklahoman quotes at the beginning sound eerily like what any rational observer would say today about Wall Street.

    The second exhibit is another Oklahoma ghost town, Ralston. Ralston was an agricultural center. I suggest that you read this article first:

    Please note the highly diversified economy of this small town before it became a ghost town. Note the importance of railroads (the Arkansas river is not navigable at Ralston).

    And for a tour of the ghost town, see (5 minutes)

    There seems to be some disagreement about how many people now live in Ralston. Wikipedia says this: ‘the town has a total of Seven people in it’, but then also states that there are 327 people. I suspect that most of the people are scattered over what is unincorporated land. The population density is very low.

    In a world where oil and other minerals are scarce, will our future look a lot more like Ralston of the early 20th century than it will look like Dubai? Will Dubai look like Three Sands?

    Don Stewart

    • Ed says:

      Don, I’ll trade you “It’s a Wonderful Life” banker owned town versus people owned town.
      Don most of America is money first people last. No culture, no values. Not worth saving.

      • John Doyle says:

        Someone said, years ago,[Samuel Taylor?] that America is the only country to go from barbarism to decadence without any culture in between.

  50. What role can turf play? During WW2 the industry around my town Gjøvik used a lot of turf as a replacement for coal, and this created a huge activity. Both Raufoss Ammunition Factories (now NAMMO) and the fishing hook factory Mustad used turf to a large extent. Here is one of the marshes where this activity took place:

    You can glimpse the piles and dams created from turfing below the snow. The energy stored in turf might be larger than the energy stored in trees.

    • I think what you are calling “turf” we would call “peat”. It is a resource that renews slowly, over hundreds of years, as I recall–we are using it faster than it renews. It is less energy dense than coal. In fact, its use preceded coal.

      If we lose resources we have, I suppose we go back to using the “renewable” resources faster than they renew–cutting down trees, and using peat moss.

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