Why is the price of oil so low now? In fact, why are all commodity prices so low? I see the problem as being an affordability issue that has been hidden by a growing debt bubble. As this debt bubble has expanded, it has kept the sales prices of commodities up with the cost of extraction (Figure 1), even though wages have not been rising as fast as commodity prices since about the year 2000. Now many countries are cutting back on the rate of debt growth because debt/GDP ratios are becoming unreasonably high, and because the productivity of additional debt is falling.
If wages are stagnating, and debt is not growing very rapidly, the price of commodities tends to fall back to what is affordable by consumers. This is the problem we are experiencing now (Figure 1).
Figure 1. Author’s illustration of problem we are now encountering.
I will explain the situation more fully in the form of a presentation. It can be downloaded in PDF form: Oops! The world economy depends on an energy-related debt bubble. Let’s start with the first slide, after the title slide.
Slide 2
Growth is incredibly important to the economy (Slide 2). If the economy is growing, we keep needing to build more buildings, vehicles, and roads, leading to more jobs. Existing businesses find demand for their products rising. Because of this rising demand, profits of many businesses can be expected to rise over time, thanks to economies of scale.
Something that is not as obvious is that a growing economy enables much greater use of debt than would otherwise be the case. When an economy is growing, as illustrated by the ever-increasing sizes of circles, it is possible to “borrow from the future.” This act of borrowing gives consumers the ability to buy more things now than they would otherwise would be able to afford–more “demand” in the language of economists. Customers can thus afford cars and homes, and businesses can afford factories. Companies issuing stock can expect that price of shares will most likely rise in the future.
Without economic growth, it would be very hard to have the financial system that we have today, with its stable banks, insurance companies, and pension plans. The pattern of economic growth makes interest and dividend payments easier to make, and reduces the likelihood of debt default. It allows financial planners to set up savings plans for retirement, and gives people confidence that the system will “be there” when it is needed. Without economic growth, debt is more of a last resort–something that might land a person in debtors’ prison if things go wrong.
Slide 3
It should be obvious that the economic growth story cannot be true indefinitely. We would run short of resources, and population would grow too dense. Pollution, including CO2 pollution, would become an increasing problem.
Slide 4
The question without an obvious answer is “When does the endless economic growth story become untrue?” If we listen to the television, the answer would seem to be somewhere in the distant future, if a slowdown in economic growth happens at all.
Most of us who read financial newspapers are aware that more debt and lower interest rates are the types of stimulus provided to the economy, to try to help it grow faster. Our current “run up” in debt seems to have started about the time of World War II. This growing debt allows “demand” for goods like houses, cars, and factories to be higher. Because of this higher demand, commodity prices can be higher than they otherwise would be.
Thus, if debt is growing quickly enough, it allows the sales price of energy products and other commodities to stay as high as their cost of extraction. The problem is that debt/GDP ratios can’t rise endlessly. Once debt/GDP ratios stop rising quickly enough, commodity prices are likely to fall. In fact, the run-up in debt is a bubble, which is itself in danger of collapsing, because of too many debt defaults.
Slide 5
The economy is made up of many parts, including businesses and consumers. The consumers have a second role as well–many of them are workers, and thus get their wages from the system. Governments have many roles, including providing financial systems, building roads, and providing laws and regulations. The economy gradually grows and changes over time, as new businesses are added, and others leave, and as laws change. Consumers make their decisions based on available products in the marketplace and they amount they have to spend. Thus, the economy is a self-organized networked system–see my post Why Standard Economic Models Don’t Work–Our Economy is a Network.
One key feature of a self-organized networked system is that it tends to grow over time, as more energy becomes available. As its grows, it changes in ways that make it difficult to shrink back. For example, once cars became the predominant method of transportation, cities changed in ways that made it difficult to go back to using horses for transportation. There are now not enough horses available for this purpose, and there are no facilities for “parking” horses in cities when they are not needed. And, of course, we don’t have services in place for cleaning up the messes that horses leave.
Slide 6
When businesses start, they need capital. Very often they sell shares of stock, and they may get loans from banks. As companies grow and expand, they typically need to buy more land, buildings and equipment. Very often loans are used for this purpose.
As the economy grows, the amount of loans outstanding and the number of shares of stock outstanding tends to grow.
Slide 7
Businesses compete by trying to make goods and services more efficiently than the competition. Human labor tends to be expensive. For example, a sweater knit by hand by someone earning $10 per hour will be very expensive; a sweater knit on a machine will be much less expensive. If a company can add machines to leverage human labor, the workers using those machines become more productive. Wages rise, to reflect the greater productivity of workers, using the machines.
We often think of the technology behind the machines as being important, but technology is only part of the story. Machines reflecting the latest in technology are made using energy products (such as coal, diesel and electricity) and operated using energy products. Without the availability of affordable energy products, ideas for inventions would remain just that–simply ideas.
The other thing that is needed to make technology widely available is some form of financing–debt or equity financing. So a three-way partnership is needed for economic growth: (1) ideas for inventions, (2) inexpensive energy products and other resources to make them happen, and (3) some sort of financing (debt/equity) for the undertaking.
Workers play two roles in the economy; besides making products and services, they are also consumers. If their wages are rising fast enough, thanks to growing efficiency feeding back as higher wages, they can buy increasing amounts of goods and services. The whole system tends to grow. I think of this as the normal “growth pump” in the economy.
If the “worker” growth pump isn’t working well enough, it can be supplemented for a time by a “more debt” growth pump. This is why debt-based stimulus tends to work, at least for a while.
Slide 8
There are really two keys to economic growth–besides technology, which many people assume is primary. One key is the rising availability of cheap energy. When cheap energy is available, businesses find it affordable to add machines and equipment such as trucks to allow workers to be more productive, and thus start the economic growth cycle.
The other key is availability of debt, to finance the operation. Businesses use debt, in combination with equity financing, to add new plants and equipment. Customers find long-term debt helpful in financing big-ticket items such as homes and cars. Governments use debt for many purposes, including “stimulating the economy”–trying to get economic growth to speed up.
Slide 9
Slide 9 illustrates how workers play a key role in the economy. If businesses can create jobs with rising wages for workers, these workers can in turn use these rising wages to buy an increasing quantity of goods and services.
It is the ability of workers to afford goods like homes, cars, motorcycles, and boats that helps the economy to grow. It also helps to keep the price of commodities up, because making these goods uses commodities like iron, steel, copper, oil, and coal.
Slide 10
In the 1900 to 1998 period, the price of electricity production fell (shown by the falling purple, red, and green lines) as the production of electricity became more efficient. At the same time, the economy used an increasing quantity of electricity (shown by the rising black line). The reason that electricity use could grow was because electricity became more affordable. This allowed businesses to use more of it to leverage human labor. Consumers could use more electricity as well, so that they could finish tasks at home more quickly, such as washing clothes, leaving more time to work outside the home.
Slide 11
If we compare (1) the amount of energy consumed worldwide (all types added together) with (2) the world GDP in inflation-adjusted dollars, we find a very high correlation.
Slide 12
In Slide 12, GDP (represented by the top line on the chart–the sum of the red and the blue areas) was growing very slowly back in the 1820 to 1870 period, at less than 1% per year. This growth rate increased to a little under 2% a year in the 1870 to 1900 and 1900 to 1950 periods. The big spurt in growth of nearly 5% per year came in the 1950 to 1965 period. After that, the GDP growth rate has gradually slowed.
On Slide 12, the blue area represents the growth rate in energy products. We can calculate this, based on the amount of energy products used. Growth in energy usage (blue) tends to be close to the total GDP growth rate (sum of red and blue), suggesting that most economic growth comes from increased energy use. The red area, which corresponds to “efficiency/technology,” is calculated by subtraction. The period of time when the efficiency/technology portion was greatest was between 1975 and 1995. This was the period when we were making major changes in the automobile fleet to make cars more fuel efficient, and we were converting home heating to more fuel-efficient heating, not using oil.
Slide 13
If we look at economic growth rates and the growth in energy use over shorter periods, we see a similar pattern. The growth in GDP is a little higher than the growth in energy consumption, similar to the pattern we saw on Slide 12.
If we look carefully at Slide 13, we see that changes in the growth rate for energy (blue line) tends to happen first and is followed by changes in the GDP growth rate (red line). This pattern of energy changes occurring first suggests that growth in the use of energy is a cause of economic growth. It also suggests that lack of growth in the use of energy is a reason for world recessions. Recently, the rate of growth in the world’s consumption of energy has dropped (Slide 13), suggesting that the world economy is heading into a new recession.
Slide 14
There is nearly always an investment of time and resources, in order to make something happen–anything from the growing of food to the mining of coal. Very often, it takes more than one person to undertake the initial steps; there needs to be a way to pay the other investors. Another issue is the guarantee of payment for resources gathered from a distance.
Slide 15
We rarely think about how all-pervasive promises are. Many customs of early tribes seem to reflect informal rules regarding the sharing of goods and services, and penalties if these rules are not followed.
Now, financial promises have to some extent replaced informal customs. The thing that we sometimes forget is that the bonds companies offer for sale, and the stock that companies issue, have no value unless the company issuing the stock or bonds is actually successful. As a result, the many promises that are made are, in a sense, contingent promises: the bond will be repaid, if the company is still in business (or if the company is dissolved, if the amount received from the sale of assets is great enough). The future value of a company’s stock also depends on the success of the company.
Slide 16
Governments become an important part of the web of promises. Governments collect their assessments through taxes. As an economy grows, the amount of government services tends to increase, and taxes tend to increase.
The roles of governments and businesses vary somewhat depending on the type of economy of a country. In a sense, this type of variation is not important. It is the functioning of the overall networked system that is important.
Slide 17
There was a very large run up in US debt about the time of World War II, not just in the US, but also in the other countries involved in World War II.
Adding the debt for World War II helped pull the US out of the lingering effects of the Depression. Many women started working outside the home for the first time. There was a ramp-up of production, aimed especially at the war effort.
Slide 18 – From The United States’ 65-Year Debt Bubble
What does a country do when a war is over? Send the soldiers back home again, without jobs, and the women who had been working to support the war effort back home again, also without jobs? This was a time period when non-government debt ramped up in the US. In fact, it seems to have ramped up elsewhere around the world as well. The new debt helped support many growing industries at the time–helping rebuild Europe, and helping build homes and cars for citizens in the US. As noted previously, both energy use and GDP soared during this time period.
Slide 19
I haven’t found very good records of debt going back very far, but what I can piece together suggests that the rate of debt growth (total debt, including both government and private debt) was similar to the rate of growth of GDP, up until about 1975. Then, debt began growing much more rapidly than GDP.
Slide 20
The big issue that led to a big increase in the need for debt in the early 1970s was an increase in the price of oil. Oil is the single largest source of energy. It is used in many important ways, including making food, transporting coal, and extracting metals. Thus, when the price of oil rises, so does the price of many other goods.
As we noted on Slides 11, 12, and 13, it is the growing quantity of energy consumption that is important in providing economic growth. The natural tendency with high energy prices is to cut back on energy-related consumption. Increasing debt, if it is at a sufficiently low interest rate, helps counteract this natural tendency toward less energy usage. For example, the availability of debt at a low interest makes it possible for more consumers to purchase big-ticket items like houses, cars, and motorcycles. These products indirectly lead to the growing consumption of energy products, because energy is used in making these big-ticket items and because they use energy in their continuing operation.
Slide 21
Many people have been concerned about what they call “peak oil”–the idea that oil supply would suddenly drop because we reach geological limits. I think that this is a backward analysis regarding how the system works. There is plenty of oil available, if only the price would rise high enough and stay high for long enough.
Much of this oil is non-conventional oil–oil that cannot be extracted using the inexpensive approaches we used in the early days of oil production. In some cases, non-conventional oil is so viscous it needs to be melted with steam, before it will flow freely. Some of the unconventional oil can only be extracted by “fracking.” Some of the unconventional oil is very deep under the ocean. Near Brazil, this oil is under a layer of salt. If prices would remain high enough, for long enough, we could get this oil out.
The problem is that in order to get this unconventional oil out, costs are higher. These higher costs are sometimes described as reflecting diminishing returns–more capital goods are needed, as are more resources and human labor, to produce additional barrels of oil. The situation is equivalent to the system of oil extraction becoming less and less efficient, because we need to add more steps to the operation, raising the cost of producing finished oil products. The higher price of oil products spills over to a higher cost for producing food, because oil is used in operating farm equipment and transporting food to market. The higher cost of oil also spills over to the cost of almost anything that is shipped long distance, because oil is used as a transportation fuel.
You will remember that increased efficiency is what makes an economy grow faster (Slide 7, also Slide 37). Diminishing returns is the opposite of increased efficiency, so it tends to push the economy toward contraction. We are running into many other forms of increased inefficiency. One such type of inefficiency involves adding devices to reduce pollution, for example in electricity production. Another type of inefficiency involves switching to higher-cost methods of generation, such as solar panels and offshore wind, to reduce pollution. No matter how beneficial these techniques may be from some perspectives, from the perspective of economic growth, they are a problem. They tend to make the economy grow more slowly, rather than faster.
The standard workaround for slow economic growth is more debt. If the interest rate is low enough and the length of the loan is long enough, consumers can “sort of” afford increasingly expensive cars and homes. Young people with barely adequate high school grades can “sort of” afford higher education. With cheap debt, businesses can afford to buy back company stock, making reported earnings per share rise–even though after the buy-back, the actual investment used to generate future earnings is lower. With sufficient cheap debt, shale companies can create models showing that even if their cash flow is negative at $100 per barrel oil prices ($2 out for $1 in) and even more negative at $50 per barrel ($4 out for $1 in), somehow, the companies will be profitable in the very long run.
The technique of adding more debt doesn’t fix the underlying problem of growing inefficiency, instead of growing efficiency. Instead, as more debt is added, the additional debt becomes increasingly unproductive. It mostly provides a temporary cover-up for economic growth problems, rather than fixing them.
Slide 22
A common belief has been that as we reach limits of a finite world, oil prices and perhaps other prices will spike. In my view, this is a wrong understanding of how things work.
What we have is a combination of rising costs of production for many kinds of goods at the same time that wages are not rising very quickly. This problem can be temporarily hidden by a rising amount of debt at ever-lower interest rates, but this is not a long-term solution.
We end up with a conflict between the prices businesses need and the prices that workers can afford. For a while, this conflict can be resolved by a spike in prices, as we experienced in the 2005-2008 period. These spikes tend to lead to recession, for reasons shown on the next slide. Recession tends to lead to lower prices again.
Slide 26
The image on Slide 26 shows an exaggeration to make clear the shift that takes place, if the price of oil spikes. When the price of one necessary part of consumers’ budgets increases–namely the food and gasoline segment–there is a problem. Debt payments already committed to, such as those on homes and automobiles, remain constant. Consumers find that they must cut back on discretionary spending–in other words, “Everything else,” shown in green. This tends to lead to recession.
Slide 27
If we look at oil prices since 2000, we see that the period is marked by steep rises and falls in oil prices. In Slides 27 – 29, we will see that changes in the price of oil tend to correspond to changes in debt availability and cost.
In 2008, oil prices rose to a peak in July, and then dropped precipitously to under $40 per barrel in December of the same year. Slide 27 shows that the United States began its program of Quantitative Easing (QE) in late 2008. This helped to lower interest rates, especially longer-term interest rates. China and a number of other countries also raised their debt levels during this period. We would expect greater debt and lower interest rates to increase demand for commodities, and thus raise their prices, and in fact, this is what happened between December 2008 and 2011.
The drop in prices in 2014 corresponds to the time that the US phased out its program of QE, and China cut back on debt availability. Here, the economy is encountering less cheap debt availability, and the impact is in the direction expected–a drop in prices.
Slide 28 – From The United States’ 65-Year Debt Bubble
If we go back to the steep drop in oil prices in July 2008, we find that the timing of the drop in prices matches the timing when US non-governmental debt started falling. In my academic article, Oil Supply Limits and the Continuing Financial Crisis, I show that this drop in debt outstanding takes place for both mortgages and credit card debt.
Slide 29
The US government, as well as other governments around the world, responded by sharply increasing their debt levels. This increase in governmental debt (known as sovereign debt) is part of what helped oil and other commodity prices to rise again after 2008.
Slide 30
We often hear about the drop in oil prices, but the drop in prices is far more widespread. Nearly all commodities have dropped in price since 2011. Today’s commodity price levels are below the cost of production for many producers, for all of these types of commodities. In fact, for oil, there is hardly any country that can produce at today’s price level, even Saudi Arabia and Iraq, when needed tax levels by governments are considered as well.
Producers don’t go out of business immediately. Instead, they tend to “hold on” as best they can, deferring new investment and trying to generate as much cash flow as possible. Because most of them have no alternative way of making a living, they often continue producing, as best they can, even with low prices, deferring the day of bankruptcy as long as possible. Thus, the glut of supply doesn’t go away quickly. Instead, low prices tend to get worse, and low prices tend to persist for a very long period.
Slide 31
In 2008, we had an illustration of what can go wrong when the economy runs into too many headwinds. In that situation, the price of oil and other commodities dropped dramatically.
Now we have a somewhat different set of headwinds, but the impact is the same–the price of commodities has dropped dramatically. Wages are not rising much, so they are not providing the necessary uplift to the economy. Without wage growth, the only other approach to growing the economy is debt, but this reaches limits as well. See my post, Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)
There is some evidence that the Great Depression in the 1930s involved the collapse of a debt bubble. It seems to me that it may very well have also involved wages that were falling in inflation-adjusted terms for a significant number of wage-earners. I say this, because farmers were moving to the city in the early 1900s, as mechanization led to lower prices for food and less need for farmers. I haven’t seen figures on incomes of farmers, but I wouldn’t be surprised if they were dropping as well, especially for the many farmers who couldn’t afford mechanization. Wages for those who wanted to work as laborers on farms were likely also dropping, since they now needed to compete with mechanization.
In many ways, the situation that led up to the Great Depression appears to be not too different from our situation today. In the early 1900s, many farmers were being displaced by changes to agriculture. Now, wages for many are depressed, as workers in developed economies increasingly compete with workers in historically low-wage countries. Additional mechanization of manufacturing also plays a role in reducing job opportunities.
If my conjecture is right, the Great Depression may have been caused by problems similar to what we are seeing today–wages that were too low for a large segment of the economy, thus reducing economic growth, and a temporary debt bubble that tended to cover up the wage problem. Once the debt bubble collapsed, demand for commodities of all types collapsed, and prices collapsed. This problem was very difficult to fix.
Slide 32
When we add more debt to the economy, users of debt-financing find that more of their future income goes toward repaying that debt, cutting off the ability to buy other goods. For example, a young person with a large balance of student loans is unlikely to be able to afford buying a house as well.
A way of somewhat mitigating the problem of too much income going toward debt repayment is lowering interest rates. In fact, in quite a few countries, the interest rates governments pay on debt are now negative.
Slide 33
If the cost of producing commodities continues to rise, but the price that consumers can afford to pay does not rise sufficiently, at some point there is a problem. Instead of continuing to rise, prices start to fall below their cost of production. This drop can be very sharp, as it was in 2008.
The falling price of commodities is the same situation we encountered in 2008 (Slide 27); it is the same situation we reached at the beginning of the Great Depression back in 1929. It seems to happen when wage growth is inadequate, and the debt level is not growing fast enough to hide the inadequate wage growth. This time around, we are also challenged by the cost of producing commodities rising, something that was not a problem at the time of the Great Depression.
Slide 34
If we think about the situation, having prices fall behind the cost of production is a disaster. We can’t get oil out of the ground, if prices are too low. Farmers can’t afford to grow food commercially, if prices remain too low.
Prices of assets such as the value of farmland, the value of oil held by leases, and the value of metal ores in mines will fall. Assets such as these secure many loans. If an oil company has a loan secured by the value of oil held by lease, and this value falls permanently, there is a significant chance that the oil company will default on the loan.
The usual belief is, “The cure for low prices is low prices.” In other words, the situation will fix itself. What really happens, though, is that everyone is so afraid of a big crash that all parties make extreme efforts to avoid a crash. In fact, there is evidence today that banks are “looking the other way,” rather than taking steps to cut off lending to shale drillers, when current operations are clearly unprofitable.
By the time the crash does come around, it is likely to be a huge one, affecting many segments of the economy at once. Oil exporters and exporters of other commodities will be especially affected. Some of them, such as Venezuela, Yemen, and even Iraq may collapse. Financial institutions are likely to find themselves burdened with many “underwater loans.” The usual technique of lowering interest rates to try to aid the economy doesn’t look like it would work this time, because rates are already so low. Governments are not in sufficiently good financial condition to be able to bail out all of the banks and others needing assistance. In fact, governments may fail. The fall of the former Soviet Union occurred when oil prices were low.
Once there are major debt defaults, lenders will want to wait to see that prices will stay consistently high for a period (say, two or three years) before extending credit again. Thus, even if commodity prices should bounce back in 2017, it is doubtful that producers will be able to find financing at a reasonable interest rate until, say, 2020. By that time, depletion will have taken its toll. It will be impossible to make up for the many years of low investment at that time. Production is likely to continue falling, even if prices do rise.
The indirect impact of low oil and other commodity prices is likely to be a collapse in our current debt bubble. This collapsing bubble may lead to the failures of banks and even governments. It seems quite possible that these indirect impacts will affect us most, even more than the direct loss of commodities. These impacts could come quite quickly–in the next few months, in some cases.
Slide 35
Stocks, bonds, pension programs, insurance programs, bank accounts, and many other things of a financial nature seem to be very “solid” things–things that we can expect to be here and grow, for many years to come. Yet these things, directly and indirectly, depend on the ability of our system to produce goods and services. If something goes terribly wrong, we may find that financial assets have little more value than the pieces of paper that represent them.
Slide 36
I won’t try to explain Slide 36 further.
Slide 37
Slide 37 illustrates the principle of increased efficiency. If a smaller amount of resources and human labor can be used to create a larger amount of end product, this is growing efficiency. If more and more resources and labor are used to produce a smaller amount of end product, this is growing inefficiency.
The other part of the story is that simply automating processes is not enough. Instead, the economy must also produce a sufficiently large number of jobs, and these jobs must pay high enough wages that the workers can afford to buy the output of the economy. It is really the health of the whole interconnected system that is important.
Slide 38
Our low price problems are here now. That is why we need very cheap non-polluting energy products now, in large quantity, if there is any chance of fixing the system. These energy products must work in today’s devices, so we aren’t faced with the cost and delay involved with changing to new devices, such as cars and trucks that use a different fuel than petroleum.
Slide 39
Regarding Slides 39 and 40, we are sitting on the edge, waiting to see what will happen next.
The US economy temporarily seems to be in somewhat of a bubble, now that it does not have QE, while several other countries still do. This bubble is related to a “flight to quality,” and leads to a higher dollar, relative to other currencies. It also leads to high stock market valuations. As a result, the US economy seems to be doing better than much of the rest of the world.
Regardless of how well the US economy seems to be doing, the underlying problems of rising costs of producing commodities and prices that lag below the cost of production are still present, making the situation unstable. Wages continue to lag behind as well. We should not be too surprised if the economy starts taking major downward steps in the next few months.
Slide 40
http://www.bloomberg.com/news/articles/2015-11-03/bp-says-technology-can-keep-oil-and-gas-abundant-affordable?cmpid=yhoo.headline
BP: don´t worry!
Indeed. There is so much wrong with that article it’s enough to make your head spin. Pure drivel.
That article came up multiple times in my news alert for peak oil — which reminds me — I need to cancel that alert… because almost all articles it captures are ‘pure drivel’
That reads like a press release straight from the Ministry of Truth (which is tasked with calming the sheeple and ensuring they do not realize we are on the precipice of total disaster)
That’s all we can really expect from Google peak oil alerts nowadays, but they’re still fun to poke holes at.
What would you say, if you were trying to keep the price of your stock up?
Thanks Gail for this post that clearly explains both the necessity and the toxicity of the debt.
You are welcome. The rise in non-governmental debt over the last 70 or so years is what is terribly striking. Debt used to be mostly something for governments. Once we had “growth” we could count on, debt became a planning tool, and something that everyone could use.
A few days ago Wolf Richter posted this graph, highlighting that even in the “4 years of surpluses”, the govt debt has kept on increasing:
http://wolfstreet.com/wp-content/uploads/2015/11/US-Gross-National-Debt-1972-2015.png
http://wolfstreet.com/2015/11/04/us-gross-national-debt-jumps-340-billion-in-one-day/
So it seems that it can only increase, even during “good times”, and the same goes for private and corporate debt especially when higher energy costs put brakes on GDP-growth.
Historical records also seem to show that debt was rather canceled than paid back, eventually. Our problem is that today debt is at very high levels (and rising faster), and EVERYWHERE, which means that each component of our economy depends on the good shape of many others. We’re interconnected and interdependant, with links getting tighter and more brittle along with the debt increase that can no longer keep pace.
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Chances are, the world economy has been in worse shape than you thought for years. Especially if you were reading the headline forecasts from the IMF, World Bank and OECD.
Having repeatedly overestimated the world economic rebound since the 2007-08 crisis, they say they are gradually gaining a better understanding of why their forecasts were so wrong, and are working to fix their models.
Forecasting gross domestic product precisely can be a lottery for even the best of economists.
But the International Monetary Fund, World Bank and Organization for Economic Cooperation and Development have not just been wrong; for years they have all been wrong in the same direction, persistently forced to revise down predictions that proved too rosy.
“There’s an inbuilt ‘optimism bias’,” said Stephen King, senior advisor to HSBC and a former economic adviser at the British treasury. “But facts have to dominate a forecast eventually.”
http://www.reuters.com/article/2015/11/05/global-economy-bias-idUSL8N12Z4S120151105#AjMqVESzEkE3Ozs8.97
When there is a downward trend, forecasts based on the past will always be high.
Carmen Reinhart says probability of a financial crisis is high:
http://www.bloomberg.com/news/videos/2015-11-05/is-a-global-financial-crisis-looming-
Thanks! She seems to like to hedge what she is saying–higher probability than what it has been in the past. It is interesting to hear.
There is a sense that she is holding a lot back — for obvious reasons…
Gail – towards the end of the Kunstler interview when he asked where this was all headed I sensed that you were choosing your words very carefully as well… that too makes sense — you risk setting off a stampede by telling the sheeple the wolves are outside the gate 🙂
Economists long believed that profits/wages’ share of both Gross Domestic Income and corporate revenues were mean-reverting, flowing up and down in long cycles. Their long fall after WWII resulted from the political settlements of the New Deal. Their long rise occurred as that political coalition lost power in the decades after 1970.
Shareholders have been among the major beneficiaries of higher profits. But there is a cost paid by America for so much of the national income shifting into corporate profits. People need money to buy the products and services produced by corporations; corporations need capex to grow. Both have been starved as profits grew.
The stagnation of real household income removed the “fuel” for rising sales. Borrowing sustained consumer spending during the 1982-2007 era, as mortgage debt rose from $1 trillion in 1983 to a peak of $10.8T in 2008, and consumer debt rose from $400 million to $2.7T.
Now that’s played out. Even financial bubbles cannot boost the economy, leaving us with a slow-growth economy (other factors, such as demography and slowing technical and business innovation, have also depressed growth). Look at the growth in real GDP during these roughly 10-year periods (economic peak to peak)…
From Q4 1948 to Q2 1960: 52.9% (3.8%/year during the tough post-WWII transition).
From Q2 1960 to Q4 1969: 51.6% (4.6%/year).
From Q4 1969 to Q1 1980: 38.4% (3.2%).
From Q1 1980 to Q3 1990: 37.7% (3.1%).
From Q3 1990 to Q1 2001: 40.7% (3.3%).
During the 14 years from Q1 2001 to Q2 2015: 29.2% (1.8%, aided by massive stimulus).
Slow GDP growth with costs stagnant or growing means little sales growth and even less profits growth. After the tech and housing busts, corporations relied on cost-cutting and boosting efficiency, plus financial engineering, to grow profits.
Now these tools are played out. Companies find productivity gains difficult to obtain — sometimes even seeing their costs rising (e.g., Wal-Mart increasing staffing and wages) and stock buybacks no longer reliably boost stock prices.
Worse for them, the legal tide is changing as courts and regulators slowly begin to question the games that allow companies to avoid responsibility for their employees (e.g., classifying workers as “exempt” managers, creating the illusion of employment by third parties through long-term use of “temp” agencies, and the legal fiction of workers as “independent contractors”. As Massey Energy’s CEO, Don Blankenship was contemptuous of the Mine Safety & Health Administration; now he’s on trial for the death of 29 miners due to his company’s disregard of safety rules.
These changes make slowed profit growth almost inescapable for the stock market, an unpleasant surprise to investors enjoying stratospheric valuations. These are harbingers of the changed economic and political dynamics of a slow-growth era, where lavish corporate profits (and multi-millionaire corporate executives) become targets for public action.
Corporations seem to have almost invincible political power today, as usual for groups at their peak. Watch for changes in this, a driver of long-term mean reversion in corporate profits and a hidden key to regime change in the stock market. By Larry Kummer, editor of Fabius Maximus
More http://wolfstreet.com/2015/11/04/corporate-profits-are-the-stock-markets-foundation-what-will-break-them/
Yep, the problem is that even in earlier times when economists were dominating the public debate but no so much insanly so as of now, there were strong voices from other ehm real science arguing per capita energy peak potential to crush civilization since aprox. that 1959 antropology book, which I linked previously, then you had the late 60s/early 70s Club of Rome people and study on similar subjects and so on. Most importantely, almost every .gov statistics per capita since that time have started to collapse. I found it impossible someone somewhere is not aware of these questions now. They are just juicing the wealth out for the ride as long as possible.. and any incoming problems from systemic reset/scale down would be triaged and deluged to the detriment of the little people.
No one represents the little people, you and I. I expect increasing harsh treatment of the little people. Which is TPTB solution for overshoot. If one is lucky life without children if not death but work hard and pay the taxes lots of security enforcers to pay.
http://www.zerohedge.com/news/2015-11-04/how-global-debt-bubble-crushing-global-commodity-prices
Interesting how when FW articles are posted on ZH that the comments section kinda goes a bit silent…
Then there is this … worth the price of admission haha :
I am a Petroleum Engineer. I’ve followed the writings of Gail for years now. First at The Oil Drum. Now several other places but most sadly, to me as an 8-Yr ZH reader now, is that i find Tyler falling for her crap.
Again, I’ve come to now understand, only after visiting ZH and becoming more educated in finance as I am a PE by Degree and now 30 Yrs of practice, this woman is intentionally trying to divert from teh real issues – TBTF WS Banking.
I can prove it. First, I have come to learn Gail is a former Banker herself. Secondly, oil prices went sky high becuase the US has imposed sanctions, in the form of denials to both the capital markets and the Oil Export Mkts, upon the largest oil reserve holders in the World. They came down becuase the US FedRes gave infinite amounts of Free, US Taxpayer monies to thier wholly-owned by TBTF WS Banks, US Public Shale Portfolio Companies who flooded the US with 5 MMBOPD additonal oil in a very short 3 years… only the US FedRes could do this as they contemporaneously destroyed the capital invested to attain these results.
Further, BIG THING that has occured post-WW2, in 1971 to be exact, is that the US went off the Gold exchange adn then Glass-Stegall was killed with Gramm-Leach-Blyly. THIS is what is causing our problems. Debt-based money that is owned and controlled by a private cartel.
This is all fact.
End the Fed NOW and force all US Public Cos and TBTF WS Banksters to move all assets and derivatives onto the BalSheet. IF insolvent, take them to BK. IT’s the ONLY WAY.
Yes it’s the same every time.
Interesting how so many people don’t want to change a single word of the story they’re telling to themselves.
What a prize chump that ZH reader is.
But he illustrates very well how many -the majority – will not grasp the new reality,and imagine that if only this or that party is voted in, or that group of people are fined or imprisoned, all will be well.
There is no political solution to any of this. There is no happy ending.
Still, the site does come up with some posts which can’t be found elsewhere: I particularly enjoyed the full ‘ISIS’ video threatening Putin with a hunting knife or bayonet. (No doubt I am now on a ‘watch list’ for having viewed it.)
Preceded by ISIS fighters apparently handing out sweets with their propaganda flyers to various Arab punters. Ah, the Arab sweet tooth…
‘It’s a mad world, my masters!’ And it’s not going to get any saner. ‘If you can keep your head when all around are losing theirs…….’
How about new definition of Mankind?
‘The only animal capable of creating environments that lead to insanity’.
Other animals can eat themselves into extinction by over-exploiting prey, like the deer on that island.
We tend to drive ourselves bonkers….. (just before the extinction).
Works for me.
Certainly in the developed nations, our day to day reality now is so astronomically far removed from what we evolved to do on the savannas of Africa that it is a wonder we are not even more chemically-dependent and hopelessly neurotic. I spent an hour on the phone to the insurance company this morning… One loses the will to live lol.
St. Mathews Island, off Alaska. Introduced deer (with no regulating predators) ate the slow-growing lichens (humans mine fossil fuel for food), and grew until the supply dwindled (Peak Lichens), then, out of desperation, they switched to tree bark for food (low ERoEI, like AE) and died off rapidly when stressed one winter.
BTW, in native american, Adirondack = bark eaters.
Xabier, it is sad watching the adult children of the world wave stones and knives at the global machine. They will of course be cut down having made no impact whatsoever. Gilad Atzmon has some good videos on people who have no competent cognitive elite to lead them.
I generally avoid the comments section on ZH… and read perhaps 10% of the articles…. but yes, it is very useful….
I am afraid I haven’t been following the Zero-Hedge comments. Good grief! By the way, I am not a former banker, among the various accusations.
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Thanks, Gail, for another excelent post. You are one of my intelectual heroes! Found your blog in March ’12, but rarely comment because my written english is a messy labourious thing, But read all your post since, and all the comments in this box (praise here for Fast “Paul” Eddie, Stefeun, End of More and Greg Machala, but also to Don Stewart, Xabier and many others.) I consider you my friends and OFW the only community where I feel to belong. Cheers!
Thanks JMS for your kind words.
JMS
Indeed, Gail is a light shining in the darkness.
Providing an island of insights in a sea of ignorance….
I appreciate your vote of confidence for my blog and my commenters. Thanks! Don’t worry about your English if you have something to say. We try to forgive English mistakes.
“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”
I look forward to seeing how many millions Europe will accept. I suggest 375 millions. Goggle says Europe has 750 millions now.
Talk about Keynesian pump priming. yeeha!
The US could fall behind in the refugee race. We could have a refugee gap. The US will need to redouble efforts to bring in new blood.
Question:
If the Elders are provoking this refugee influx then why is it occurring only in Europe?
I see no hordes pouring into Russia, China, Canada, New Zealand, Indonesia, Japan etc etc etc….
It is and has been happening in US and Canada for three decades. It is a steady flow with established transportation mechanisms.
Russia and China no because they are poor and cold.
How Australia and New Zealand have avoided it is a mystery to me.
I picture Indonesia as poor but I guess if they have open land?
This is not happening in Canada — in fact Canada has some of the strictest immigration policies in the world — they, like New Zealand – operate on a points system … and they have a short and defined list of skilled workers that are allowed in …
Canada does take refugees of course — but the country is absolutely nowhere near the position of Europe — there are not boat loads of people flooding in..
Most people getting into Canada are educated and able to contribute…
As for the US my understanding is that many of the illegal immigrants are contributing by working for very small salaries… effectively they allow US companies to ‘offshore’ jobs without offshoring them… the illegal immigrants appear to serve a purpose — and no doubt that is why they are tolerated…
The earlier argument that stated the Elders were effectively attacking Europe by herding refugees in makes more sense given the problem is EU-specific.
Look at the latest ELM data, stagnation/growth or not by 2025 it will be pretty apparent Western Europe is more or less out of market dispatchable domestic fuel, i.e. open admission of total failure to further pretend there is some viable non-Russia alliance alternative. For centuries the #1 geopolitic rule always has been supress any consolidation on the Euro continent, in recent decades this has been taken by the US (UK cousin inheritance), such primary goal numerous times revealed in the media by the top administrators like Kissinger etc.
The US is playing for the very last card, the global money regime, without it it’s no longer armies and frivolous consumption toys for free and obedient public. Please just give me few more years of this, said the eternal junkie! So, if you submerge the europeons now, scores another can kicking victory for the day and few more years!
Right ….
But if the Elders, through their host America…. are doing this…. basically destroying Europe… then would not the Europeans shift into the Russian sphere of influence?
Afterall.. Russia is a more logical ally given they provide Europe with energy…
Could this already be happening — with Germany leading the pack?
Could the retaliatory measures from the Elders involve taking down one of Germany’s biggest companies – VW?
I doubt we will ever know what is truly going on here — because these games happen on levels that are highly classified…
Just thinking about WW1… one of the most important events of the last century … and most people have not the slightest clue why it was fought… those who think they know likely believe it was related to the shooting of an obscure aristocrat…
To this day, we can get more truth on this out of a comedian than all the mountains of history books combined…
Good points.
The timing and sequencing of VW and other fin/gov espionage scandals seems staged or planned like indeed.. Some idiots like the french PM is able to flip flop on Russia in less than a year lolz. Btw. this idiot’s foreign ministr (also an utter piece of …) has got a “playboy son” who is wanted in Nevada for fraudolent gambling checks ~ $4M..
Simply, the tremors are stronger and more frequent, it would be nice if the US went down similarly to USSR of the mid-late 1980s, however as Orlov and others pointed out it might be much messier this time.
post scriptum Archduke Ferdinand as obscure aristocrat? Not, he was a reformer..
but the monarchy should reformed earlier and more profoundly say 1890-1910 at the latest if not around the events of the year 1848. People of the CEE region are increasingly missing the good old days of k.u.k monarchie, there would be no bavarian mustage guy later, nor us&russia parceling the plot in such horrible destructive manner..
The Protocols go into great deal how they needed to usurp the power of monarchies in Europe…. and the Catholic Church….. these were two of the main impediments to gaining global control…
As it states … they were confident because their strategy was to always remain behind the curtain — unlike the monarchies and catholic church … which wield power very publicly and become easy targets…
To this day almost no one realizes who pulls the strings… the masses believe democracy is the power broker — the Elders explain in great detail why democracy needed to be propagated…
It makes for fascinating reading — primarily because it explains many events that subsequently took place….
Again — there is absolutely brilliance involved in that leaked document.
And then we have this http://www.zerohedge.com/news/2014-10-20/anti-petrodollar-ceo-french-energy-giant-total-dies-freak-plane-crash-moscow
Hard to believe that was an accident….
The moral of that story is:
I don’t know if Gail posted the interview with Jim Kunstler but here’s the link.
“A Conversation with Gail Tverberg of OurFiniteWorld.com”
http://peakoil.com/generalideas/a-conversation-with-gail-tverberg-of-ourfiniteworld-com
Direct link to the podcast:
http://hwcdn.libsyn.com/p/6/1/8/618a40479167a11a/KunstlerCast_271.mp3?c_id=10205886&expiration=1446690925&hwt=1052c6b358a89061953c6e143012bcd7
Thanks … listening
Also, after the podcast with Gail, it”s worth taking a look at Kunstler’s ‘Eyesore of the Month’, a strikingly inept Frank Gehry catastrophe in Australia, particularly amusing.
I have a copy of the interview with Jim Kunstler up on my Presentation-Podcast page now.
Someone also sent me a draft of a transcript of the interview. I am trying to go through that now, with the idea of eventually putting up a transcript. It gets kind of long–I might need to do it in parts.
Bringing in the fake story of “global warming” rather spoils this article. It makes it clear that you have not done your homework.
FYI, there is no global warming in Europe. The best evidence is the fact that scientists are surprised that Spring is not coming any earlier:
“Scientists Can’t Figure Out Why Leaf Unfolding In Europe Not Happening Earlier …(Pssst, It’s Not Getting Warmer)”
http://notrickszone.com/2015/10/05/scientists-cant-figure-out-why-leaf-unfolding-in-europe-not-happening-earlier-pssst-its-not-getting-warmer/#sthash.nf7GXKkb.dpbs
Of course, anyone who steps over the party line has to pay the price:
“Phillippe Verdier, journalist, weatherman, sacked for daring to be skeptical”
http://joannenova.com.au/2015/11/phillipe-verdier-journalist-weatherman-sacked-for-daring-to-be-skeptical/
Hi Alfred, head over to RealClimate.org. That site is run by climate scientists, not weatherman. Post your comments there and let us know how you get on.
I am not very impressed with climate models myself. I have looked at the forecasts of future fossil fuels use incorporated in the models and they tend to be ridiculously high. I don’t know what that says about the outcome, if the analysis were performed better.
The climate has always been changing, so I expect it will continue to change.
Ugo Bardi is of a different opinion. He seems to be a clever guy but he is also an academician, a fact which tends to isolate people from the dirty business of the real world. One of these busineses is of course the financial system.
http://cassandralegacy.blogspot.se/2015/10/peak-oil-will-save-us-from-climate.html
Bardi also seems to have some hope for renewable energy.
http://cassandralegacy.blogspot.se/2014/11/renewable-energy-does-it-need.html
I don’t agree with Ugo on several things. I am not talking about “Peak Oil,” I am talking about collapse.
The fact that he has ‘some hope for renewable energy’ is reason to dismiss him as just another Koombayaist who — when faced with harsh realities — ultimately ducks for cover under a skirt of solar panels (made from coal) and sucks his thumb.
> FYI, there is no global warming in Europe.
Who are you kidding? As a child in England in the early 1960s, I remember how, come November (now!), the temperature would plunge, and it would become very chilly and frosty, well in time for Guy Fawkes Night. Come late November, the snow would start falling. Throughout December, January, and February, I would trudge to school through the snow, which sometimes reached up to the top of my wellington boots. In early March, the thaw would set in. Fast forward to the mid 1970s onward, and already a white Xmas was a great rarity – never mind three months of snowy winter! Snow is still a rarity here, though every few years we may get a week of it.
For the past few summers, I am at risk of being bitten by mosquitoes in the summer. In England! It’s ridiculous. Right now, it’s unseasonably warm here in London. I haven’t even got the heating on and it’s nearly 2am in the morning. Check this out – the weather for November 2014:
http://www.accuweather.com/en/gb/london/ec4a-2/month/328328?monyr=11/01/2014
and now for November 2015:
http://www.accuweather.com/en/gb/london/ec4a-2/month/328328?monyr=11/01/2015
Spot the big difference. Now go and read these two blogs:
http://arctic-news.blogspot.co.uk/
http://robertscribbler.com/
because it’s only going to get worse – and fast! The England of my childhood is a foreign country compared to nowadays, weatherwise.
Clearly, you think the trees in Europe are not in sync with the climate. You present false “data” to “prove” your case.
Please tell us why the trees don’t agree with the global warming thesis.
Here is where the “scientists” get their payoff:
“Climate Money”
http://scienceandpublicpolicy.org/images/stories/papers/originals/climate_money.pdf
“Arctic Has Gained Hundreds Of Miles Of Ice The Last Three Years”
https://stevengoddard.wordpress.com/2015/09/09/arctic-has-gained-hundreds-of-miles-of-ice-the-last-three-years/
If you really want to follow the money you can find that every single source of info that denies climate change is funded by big oil. Oh all of a sudden follow the money isnt such a good strategy? Consume on.
Why do people care about climate change? Why are they obsessed with something that is totally moot.
1. We MUST burn increasing amounts of fossil fuels or the economy will collapse
2. There are no alternatives to fossil fuels – clean or otherwise.
Don’t worry — you are going to get your wish because the solution to climate change is at hand — the collapse of BAU is imminent…
When that happens the smoke stacks will stop belching filth — the planes trains and automobiles will sit idle rusting away ….
Of course you’ll have no electricity — no food — none of the modern conveniences bestowed on you by the age of cheap fossil fuels….
But at least you will be able to say your last breathe of air as you starve to death was a clean one.
I’m beginning to actually like you.
I’ve been fond of you for quite a long time. I enjoy the way you cut through the nonsense and point out the weaknesses in the sustainable renewable Kubaya singing that others often attempt to pass off as progressive thought.
Thanks Tim.
I touched on the subject of global warming as lightly as possible. Tom Murphy (a physics professor) has shown that how the world can be expected to heat up, as the world economy continues to grow, even using renewable energy sources. http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-energy/ He makes the point that at some point, the world would become as hot as the sun. This is an excerpt:
Yes, we all fail to feel the effect of exponential growth. In 6000 years, at that rate, we would need to be a solid ball of human flesh expanding outward faster than the speed of light. But as far as we know the speed of light is a LIMIT.
global warming is occurring at different rates in different places around the world
obviously this will result in patchy effects of it wherever you look
So in effect Capitalism in it’s current insane form is a Doomsday machine with no off switch. You don’t have to look far to see how scarily true this is.
Corporations are in the business of turning nature into junk via fossil fuels and are beyond human control since people must serve the profit-driven interests of the company whether they are employees, suppliers or politicians.
The thing is…
Without BAU …. we’d still be living as hunter gatherers….
But then again — we’d have known nothing else… so that would have been fine.
Exactly Fast the Aborigines inhabited Australia for forty thousand years before white man invaded.At our current rate we will be lucky to make 400 years and thats being overly optimistic.
The first place I lived outside of Canada was Australia … was there on a working holiday after school…
Some local friends suggested we join them to go into the city to scream racist taunts at ‘Abos’
My thought at the time was ‘that’s pretty F&^%d up’
We are indeed a strange animal…
As hunter-gatherers, the millennia just flew by. No unnecessary hang-ups about progress or growth, year-on-year figures, forecasts….
Oh well, we blew it.
No need for Abilify 🙂
But they had…….magic fungi!
When we lived in Bali that grew in the cow manure during wet season.. we never bothered to harvest it…..
In hindsight it looks like it always was inevitable that we would start to use coal, and then oil. And according to Joseph Tainter, complex societies always try to solve their problems with more complexity, so, yes, where we are now looks pretty much like a historical inevitability.
Of course we had the chance by 1972 “Limits to Growth” and the Jimmy Carter era, to listen to reason, and slow this historical inevitability. But to completely avoid collapse, that would have required some sort of “Radical Rationalism”, doing what ever science tells us is prudent to do, instead of Democracy and Capitalism and the free market, invisible hand etc. hypothesis. But once growth is fueled by coal and oil, democracy is the most efficient form of government to control that growth, and Capitalism also supports growth very well. So, actually, yup, where we are now, and where we are going to be, looks pretty much as a historical inevitability.
The big question mark is of course, what next? Collapse opens doors to completely new ways to organize co-operation between people. Certainly co-operation when people starve and are shocked to their core as BAU collapses, is not going to be a piece of cake. But Napoleon said people are motivated by greed and fear, so, it should at least be possible to build co-operation despite horrific circumstances. Sure, Napoleon was an artillery officer and cannonfire in the streets of Paris made co-operation seem like a good idea to the hungry mobs. I guess we will see lots of interesting developments in different parts of the world as the hungry mobs get out of control this time.
Starve 5 dogs for a week — then throw a hunk of raw meat into the midst of them and observe how they cooperate (or not…..)
I reckon that’s where we are headed — we are far more vicious and dangerous than any dog….
Kerryn Higgs recent book, Collision Course, describes how/why we did not change course in the 1970s when Limits to Growth was published. Basically, TBTB suppressed it.
How could we have changed course?
Basically changing course involves ending economic growth.
Ending growth means we collapse modern civilization.
No growth means no new jobs are created — less spending takes place because people have no work — when people don’t spend people get laid off — laid off people don’t spend so more people get laid off — companies go bankrupt — the financial system collapses — BAU ends.
Feel free to explain what the other path we could have taken would have looked like.
Very well said. I agree there will be pockets of cooperation as the sky falls. But like skydivers with no parachutes, they can make all the pretty formations they want on the way down, but it inevitably leads to the same conclusion.
I think the problem is worse than that. The economy is a dissipative structure. It is designed to dissipate any available energy as quickly as possible.
Consumerism; A dissipative structure, designed to dissipate any available energy as quickly as possible.
Thanks Gail, brilliant.
Gail,
Hunting season is ending soon so I will have some time on my hands once again to create more videos of your articles. Please email me any preferred articles in order of most preferred.
Thanks,
Tim
Will do.
It’s pretty to easy to understand, but much harder to predict when a major dislocation in the world economy may occur. Sure, most here understand;
– The low hanging fruit got taken first
– Increasing debt used to try and overcome diminishing returns
– Without enough growth lending will shrink
However, the idea there will be a major financial recession/depression within months is much less apparent. For example look at the following news stories which do not suggest a disaster is in the near term. Sure, there are developing problems due to the above bullets but this has been an ongoing situation for many years and probably will continue to do so for years to come. Keep in mind Japan is out there on a financial limb and keeps on going. Increasing debt to offset diminishing returns is not a long term solution and Gail is correct on that count, but I do not think we are on the cusp of major change. At least not yet. In fact, I’ll make my own prediction; Nothing will appreciably change between now and the end of 2016. When that date comes and goes I’ll post another prediction.
http://www.usatoday.com/story/money/business/2015/11/04/federal-reserve-janet-yellen-testimony-financial-regulation/75148442/
Yellen: Rate hike next month is ‘live possibility’
http://www.wsj.com/articles/u-s-trade-gap-shrinks-15-due-to-export-rebound-1446643913
U.S. Trade Gap Shrinks 15% Due to Export Rebound
http://www.wsj.com/articles/private-sector-jobs-rose-by-182-000-in-october-1446644438
Private-Sector Jobs Rose by 182,000 in October
Stilgar – there’s only two things anyone needs to know in terms of the direction we are heading:
At this point, 75% of S&P 500 companies have reported Q3 results, and earnings are coming in at $93.80 per share on an LTM basis. That happens to be 7.4% below the peak $106 per share reported last September.
http://davidstockmanscontracorner.com/76822-2/
The MSCI AC world index, which captures large and mid-cap stocks across 23 developed markets and 23 emerging markets, has now been dropping for two quarters in a row – worst performance in four years. Turns out, for the companies around the globe that comprise the MSCI AC, earnings “growth,” as measured by 12-month trailing earnings, is in even worse shape than for those in the S&P 500: by Q2, it was -7%!
http://wolfstreet.com/2015/10/05/last-two-times-this-happened-us-fell-into-recession/
We don’t see much mention of this in the MSM — because it the job of the MSM to promote a narrative of ‘all is well — all is improving’ — to maintain a bit of credibility they will drop in negative stories from time to time … but generally they are in the business of providing hopium.
As the above indicates all is not well at all. We grow — or we collapse.
We better find a way to get back on the growth track soon…..
I don’t follow the financial markets at all, and I don’t think they give much valuable information. Our entire system is fraudulent. I don’t believe the numbers anymore.
I do follow the oil price and gold price. And sometimes look at the Fed graphs, which they publish because they know nobody pays attention to them.
Paul, perhaps Gail can set up a separate comment space for elementary discussions involving renewable energy, financial capital and other conventional topics.
You do an admirable job combating the RE trolls, but perhaps you can do yourself the same favor by combating your own insistence on using current economic indicators as some kind of predictive tool. They’re not, they serve no useful purpose – other than describing what we all know already – while they just serve to muddy more interesting discussions of how this is going to play out.
So, if RE and CE (conventional economics) where relegated to another space, we could spend more time analyzing the tell-tale signs of a shift away from the current monetary regime. Once again, since it bears repeating: the debt-money paradigm is going to be retired. It has no useful purpose in a non-growth environment. While it was an effective tool over its 300 year long life-span, it can longer deliver the kind of command and control necessary to manage global affairs.
I suggested this before, but everyone should read the Communist Manifesto. Not to embrace some silly concept of fairness & equality, but to appreciate Marx’s brilliant analysis and conclusions regarding current & previous economic regimes. To summarize, feudalism wasn’t based on debt, production, consumption, taxes or any of the other control mechanisms with which we are all familiar.
As we re-trace back to feudalism, likewise debt/money loses all relevance and potency. This is the topic we should be discussing: how to make the transition. What will be the signs, the preparatory mechanisms that tip-off & provide the giveaways that are obvious to those who happen to be looking?
I would say the greatest indicators would be the fall of the current control mechanisms, i.e. Governments (Global Bodies) starting at the global level and falling inward (National, state, etc.).
@B9K9
Please, explain:
To summarize, feudalism wasn’t based on debt, production, consumption, taxes or any of the other control mechanisms with which we are all familiar.
The fact that global corporations’ profits are contracting drastically … which will lead to layoffs and bankruptcies… and the collapse of the financial system…
Is irrelevant?
I don’t think so
Welcome to the club.
Again the only question is about timing, the refeudalization program will take its twists and turns, it will take decades only to get moving into that direction properly. More importantely from the view point of single human or 2-3gen family lifespan the sequencing order of the events is of the most important concern. You would act quite differently should we enter now some 3-4decade long slow burn of attempted command economy “at all costs to keep the civilization going” with very limited space for individual action or should we rather atomize right away into sub national states (vs. todays boundaries) within the next 2decades. For instance, in the first scenario it is not very good idea return to the land (it won’t be considered yours even of formal grounds), while in the latter case it’s the best option start opting out of the dying system asap. And that’s just one of many possible ways looking at it.
So as of 2015 ending now it’s still hard musing about the future in specifics..
We have a debt-based monetary scheme now. The graphs Fast Eddy posts are helpful to me.
Once we lose our debt-based system, we have no system at all for long distance transactions, and for transactions that enable long supply lines. The debt-money system is going to be lost, but it will not be replaced with anything very useful. My guess is that we will have a patchwork of non-interchangable money systems that perhaps cover an area 50 miles square. It will be possible to buy goods with the money in that area, but that is about it. Travel will slow down greatly, because it will be hard to exchange money as a person travels. Getting goods manufactured with parts from afar will be difficult as well. There will be lots of local money supplies, like many have advocated. The problem, I expect, is that that is all we will have.
I have no opinions on communism. I do know that in many countries, land was owned in common. That had some advantages over each family having a small plot that was worked to death. Animal grazing could be done on a rotating basis.
For one thing, some of the infrustructure remains still relatively intact/low maintanace (scenario without war), also mutually beneficial relationship would demand to patch up some working schemes in order to survive, albeit at less complex level and throughput. In practice, lets ask what’s going to happen the day, week, month or year after the system crash/reset? I guess the Germans and Russians would continue in exchange of piped natgas in exchange for industrial goods/tools and knowhow. Also do you think France, Italy and Spain would be so weakened on all fronts not to be able protect those short leg natgas pipelines going from Algeria northwards anymore? No, that’s very hard to imagine, therefore some basic level of functioning economy will be patched up and protected whatever economic crash/reset takes place in the near/mid term. In similar vein, there will be enough bunker fuel to ship food and other cargo back to Russia etc. I’m not talking beyond say 2035-50 time horizont though when large parts of the old infrustructure (e.g. grid) would be in terminal shape..
Where I live, for the past fifteen years or so, we had the beginnings of programs to unify tiny and dispersed individual plots of land into larger more useful plots. About five years ago and half way through the process in my local region, the whole program ground to halt because… you guessed it… lack of funds for the foreseeable future. Local governments are so bankrupt they can’t even afford administration costs for something like this. Of course, the project has been posponed indefinitely.
Must agree here, Marx was quite the economist.
I hope you are right.
The big collapse of 2008 looked like it was approaching in late 2007. I wrote about it in December–then spent quite a while talking with other Oil Drum staff members before actually putting up a post in early January. We kept changing the date on the post until later dates, so it would remain on the “top”, so my forecast for the crash is dated January 9, 2008. The collapse in oil prices didn’t happen until July, and the big financial bailouts weren’t needed until December. So the problems were evident to those who knew what to look for, quite a while before they hit.
If Janet Yellen actually does raise interest rates, that by itself create enough problems to cause a crash within a few months.
The US trade gap shrinking to a significant extend reflects the US drop in oil imports, because our oil consumption is down in September. Falling US oil consumption doesn’t sound like a good sign. It is strange the “export rebound” article didn’t mention that issue as well.
The jobs numbers never tell us full time versus part time. This is a full-time, part-time slide that I didn’t show. I don’t think we have exceeded the full time jobs from 2007 yet.
One thing I am confuse about is how to handle the green line showing the number working part time because they could not find a full-time job. It is not clear to me whether that number should be subtracted from the top line (Usually work full time). If so, we are even worse off than the top line would imply.
There are some – including Michael Burry – who predicted the 08 blow out as early as 2005 — his fund was massively short waiting… and waiting… and waiting…
Many of his investors were attacking him trying to get their cash out (there is a minimum hold period in most hedge funds) – they even tried to have him declared unfit (he has Aspergers) …
Eventually the card house fell and he made a fortune — not a word of thanks from his investors — he closed his fund soon after…
The disturbing thing about your call being quite close to the actual collapse of 08 is that it implies we are very very close to the collapse this time….
The fact the global corporations profits are dropping like rocks would indicate the end is not far off.
We grow – or we die. There are no half measures
As mentioned before Gail, Martenson, Rubino, Schiff, Turk and others predicted the 2008 bubble and burst with some acuracy (but some of them made bad timing mistakes since then). Many others, professional “pirates” worked on it behind the scenes like Kyle Bass, so it become more known after the fact.
There is additional timing metrics with some predicting value based on local tax revenue.
Great tool if you know about it a decade or two before, not now, it’s too late, lolz..
http://charleshughsmith.blogspot.com/2015/11/the-most-important-chart-youve-never.html
Yes, I know a downturn in state and local tax revenue was a good predictor of past recessions. I presume his B. C. is the same as the BC who sometimes comments here. There is some cross-pollination of sites. Charles Hugh Smith recently asked me to become a Facebook friend. He lists OurFiniteWorld.com on his blogroll.
Crash is good. It is the fix for the problem. Crash sooner to minimize the net pain and the net damage to Gaia.
I am not confident of that because of the spent fuel ponds…
Also I am selfish — I want BAU to go for another 30 years… I have no desire to die now — nor to live the rest of my years in primitive subsistence mode — I like coffee in the morning too much…
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Another clearly written and cogent argument, I’d long suspected this, to be honest.
Definition of cognitive dissonance-
What to make of a poster who guards the citadel of rationale thinking, by constantly defending reality against the attacks of renewable myths, by repeated citations to well publicized reports of the failure of German solar/wind projects.
Yet this same poster, who would be among the first to agree that German political, business, military and technology leaders were briefed and informed of the results long before they were release to the general public, seemingly thinks it’s purely coincidental that the state decided to open the immigration spigot full blast, thereby incurring huge social expenditures, all in the wake of well known energy shortfalls.
This, my friends, is exhibit #1 of a person in denial. But in denial of what? Not that we cannot have infinite growth on a finite planet, not that the PTB/Elders who control the current financial/production/consumption model don’t understand what is occurring and fully realize the implications, but rather, that **no one** is making any moves to position themselves, and thereby preserve continuity of government, but rather are merely standing idly by while the train roars towards them.
LOL. I mean, what else can you say? This is a person blinded by class hatred & envy, who will go to great lengths to construct a fantasy of retribution, all the while missing a chance to perhaps capitalize on one of the great transitional moments in history. Well, good luck with that Paul.
And you believe you know why immigrants are being allowed into Europe?
I have no idea why this is being permitted/encouraged (and it’s not exactly like millions of them are pouring…) — but what I do know is that the Elders are being challenged by the Chinese and the Russians — their means of controlling the world i.e. ownership of the reserve currency/petro dollar — has been thrown under the bus.
And they are like cornered, desperate rats…. doing ‘whatever it takes’ to maintain their empire.
Perhaps they have determined that allowing immigrants into Europe serves some sort of purpose… what the purpose might be — again … I have no idea
What I do know is that the players know this is the twilight of BAU — but the music is still playing — so they dance…. and they will continue to dance… until the fat lady sings.
Then they die – along with us.
“all the while missing a chance to perhaps capitalize on one of the great transitional moments in history”
You tantalize us with these comments on a regular basis… kinda like a Tee Vee evangelist offering salvation … all we need to do is reach out and grab it…
I am still waiting for details on this — should I short IBM, CAT, Glencore?
Since you exude such great confidence perhaps you have the inside track on technology that will allow us to grow crops on farmland ruined by chemical farming …. or the holy grail — a magic formula that will turn spent fuel rods into caviar….
Or maybe I should be buying up massive woodlots here in NZ — since firewood will be the new oil.
How do we play this thing? How do we get rich? We’d had to see the crisis come and go without capitalizing on what is perhaps the greatest opportunity in history.
Paul, this is getting boring – we’ve discussed this many times before: leverage yourself to the hilt to buy as many real assets as possible. I’ve said this over & over again (go back and read my threads if interested): I’m fully invested.
I’m not sure how much more evidence anyone requires that we’re only at the incipient stage of helicopter money. If ZIRP didn’t convince anyone, how about NIRP? Isn’t that another term for simply printing money ie it has no associated interest cost?
Secondly, you keep going on – kumbaya style – about “how will we feed the world”? Try this on for size: we’re not gonna feed the world. We can take it to the bank that some think-tank has already figured out the baseline population required to maintain a sufficient level of production & operations to keep scientific & technological research going at the present (or increased) rate. My guess is that is far, far below the current 7b+ – maybe 500m?
You really do think quite conventionally; my recommendation is to create yet another persona, one that fully embraces reality (as I and others have noted). You can keep around Paul, Fast Eddy, et al to play the part of a conventional thinking troll and spam the board with endless charts showing declining profits, share prices, what-have-you, that you alone seem to think has some kind of relevance in demonstrating the end is nigh!
You’re making the same mistake Fukuyama did – history is only getting started. 500 years from now, fantastic stories of wealth and comfort enjoyed by peasants will be told to enthralled family groups huddled around their peat fires. The idea that any of them could afford the incredible luxuries of the elite will be treated no differently than any other creation/golden age myth.
Humankind isn’t going anywhere – it’s just going through yet another phase to get back the natural equilibrium of the 1/99 balance. The smart players are the ones who understand this dynamic, and aren’t hung up on weird psychic vestiges of perceived slights, insults and mistreatment. Their insights and observations are what should be cultivated, not the constant postings of obvious news widely known all.
You just wasted half a dozen paragraphs saying absolutely nothing.
“leverage yourself to the hilt to buy as many real assets as possible.”
Maybe you should define “real asset” here.
In 2008 lots of people lost everything due to too much debt. Why couldn’t that happen again?
Indeed. The empire could always strike back.
This reads like tech porn masturbation ….
Yep — America and Apple and Tesla will fix everything… this is just a blip on the road to a far better world….
You are aware…. that Star Trek… is not real…. it will never be real….
What is real (or will soon be real) is that the electricity is going to go off…. your power is going to go off…. and your cupboards will empty a week or so later…. then you will understand…
Oh and BTW – what is the point in investing in hard assets when you believe nearly 7B people are going to die.
Won’t that mean that there will be a huge collapse in the price of hard assets?
Imagine the number of homes that will come onto the market – the water front properties that will be available….
Great post, thanks.
People get real B9 is not talking about buying 2008 condos from now here, lolz!
Obviously his advice is just a key not a bullet proof guaranteed plan, the new/ish overlords would overtime soak up some of the talent available be it military, clergy, crafts and arts.
But at least try avoid the worst, i.e. the proverbial peat fire hugging mudhouse family in the swamps bellow someones rock castle.
I’d be interested in the assets that one should be purchasing… pretty hard to rip something apart without the details.
Well I was floored by “J” response, so I gather B9 includes some quality land among other things. However, as posted numerous time already, ownership changes quite quickly in non voluntary fashion even during (quazi)feudal age, so nothing is certain and certainly not bullet proof -long term- in this world..
“includes some quality land”
Never confuse ownership with possession
“quality land’
So is that forested land — kinda like Sherwood forest?
I wonder how one would keep the hordes out of said forest when they want to chop trees… how to keep Robin Hood out?
In in for the the long haul. I’m cornering the market on peat bogs.
We need a whole lot more than technological research. We need a reproduction of our whole economy, on smaller scale. It still isn’t going to happen, in my view. The economy crashes, and we have to start over, at a much lower level.
The reason we cannot have BAU Lite can be distilled down to this:
We are collapsing because we are unable to extract energy cheaply.
Without cheap to extract energy none of the things we refer to as BAU can exist — no cars, no phones, no electricity, no factories, no Mars bars, no ball point pens, no paper clips, no bicycles, no plastic doo dads — nothing.
So if we cannot keep the system going now — then how do we keep it going on anything buy an any significant level after BAU crashes?
Unless one believed in magic… then there is zero logic to the argument that we can have BAU lite.
We either grow – or we soon die — and we have stopped growing.
Therefore – unfortunately — soon we will die.
FE, don’t take this post as an endorsement of B9K9’s position. For one thing, I would never “lever up” with debt to acquire assets, – or experiences or skills for that matter. However, I do think a concerted effort will be made to scale down some version of a cushy lifestyle for a small handful out of a much reduced population base – I just don’t know if that type of thing is really possible or will be realized. I just want to point out that something along those lines has already been envisioned in children’s literature and popular film – namely, The Hunger Games. 13 districts in which a relatively small population basically lives in 18th century conditions while mining resources, producing food etc for a single capitol that is a technotopia filled with a rich nincompoop managerial and “lifestyle” classes, techno wizards and the few at the top who basically “get it,” and manipulate and control it all.
Like “The Walking Dead” and “Game of Thrones,” it’s interesting and revealing that the Zeitgeist manifests in this kind of art right now.
I suppose an ultra elite could stockpile massive amounts of food, weapons, solar panels etc… and hunker down in some remote secret location… kinda like a mega-prepper situation …
But this would not be BAU lite — it would essentially be staying alive for a few more years.
As has been discussed before — prepping generally assumes that something comes after a disaster — i.e. at some point there is a return to some semblance of normalcy…
The thing is…
There will be no return to anything resembling BAU
That is absolutely impossible — because BAU needs cheap to extract energy …. and that is gone — that is why BAU is ending … so it is ludicrous to believe we can magically extract and refine fossil fuels post collapse…. it is totally illogical to even suggest such an outcome….
So if the elites are mega prepping they are in the same boat as the rest of us — their boat will stay afloat longer…. but supplies will run out … and they’ll on The Road … just like everyone else…
Perhaps they will all be holing up in under ground bunkers for protection against the spent fuel ponds… they better have a lot of freeze dried food in those bunkers … and water… because they will be down there for decades….
Not food. Seeds.
https://en.wikipedia.org/wiki/Svalbard_Global_Seed_Vault
Why would anyone do this if they believe there is no chance of survival? Delusion?
Perhaps they are doing this because they believe we are going down the path to hell with GMO…. and they want us to be able to reverse course at some point?
I doubt they are doing this because they expect a survivable collapse…. it is quite easy to buy/harvest non GMO seeds…. so seeds would not be much of a concern once BAU is gone….
Javier – you realize that all of those seeds are dead. Yup. They are being saved for their DNA, not because they are viable.
Understanding what is happening in Europe today is getting to be like that old game of analysing photos of Soviet leaders on the rostrum in Red Square and attempting to map out the power relationships and policy trends from that. A speech by Draghi, a photo-call by Merkel, etc.
Having said that, starting from the assumption of very short-term reactive behaviour -not long-term positioning – by TPTB is always a good starting point: that’s how humans are. Hitler planned a 1,000 year political settlement, it just lasted a few years and nothing went as planned: if the ‘Illuminati’have grand epochal plans, they will doubtless end in similar catastrophe…..
History as a series of short-term screw-ups is an appealing theory. Having all the information does not necessarily lead to either wisdom or simply getting it right just for oneself.
So, with the refugees what did we see? Initially a massive propaganda campaign along the lines of ‘Europe is noble and takes in the poor and suffering!’ ‘This is the New Europe, Europe must Change!’
An important part of this was the shameful use of the photos of the poor drowned Syrian boy as a key emotive image. The aim was to overwhelm all possible objections or concerns.
Simultaneously, German business leaders were reported as saying that this massive surge would be great: rejuvenate German society and provide lots of much-needed young workers, at a time of skills shortages and a deep and growing imbalance between elderly retirees and the working population (a general European problem). Just what the doctor ordered in fact.
The propaganda has died off somewhat as the huge logistical problems caused by such large numbers in so short a space of time became apparent. But we still find Merkel stating that no limits whatever can be placed on those seeking asylum. Large-scale allocation of resources is planned to deal with the in-flow, and this seems to involve lots of infrastructure spending, accommodation, hiring of language and other teachers, etc, all a short-term economic boost.
Germany’s rulers must be acutely conscious of their demographic problem, and as they obviously can’t get Germans to breed more – it’s far too expensive as in the rest of Europe -they can get a quick fix this way in the space of a few years by direct importation, get more consumers of services and goods, redress the age imbalance, and so on.
All very short-term thinking. Moreover, the great owners of German industry, perhaps the most powerful people in Europe now, will be completely insulated from any adverse social effects. All gain,no loss to them. A gamble too, it must be conceded, but better than watching the German consumer economy crumble as society ages rapidly, skilled workers cannot be found, and social costs increase.
I wouldn’t be surprised if the apparent German plan to forcibly redistribute migrants to other EU members left Germany with the pick of the crop.
Of course, the UK is following the same policy as Germany -high immigration to maintain the consumer economy – but just more quietly. This has been apparent for about a decade.
The Mayor of London, a clown figure with very poor taste both in dress and in mistresses, made an oblique reference to it recently: ‘building capital’ (human one supposes). He also remarked on how ‘awful’ population reduction would be, referring to Japan. Many of us would in fact welcome it.
Even if the poor only buy in Pound Shops, they are still buying and still make someone very rich. For our economic model, population cannot be allowed to decline, and the young have to be imported to counter-balance the retirement of the low-consumption baby-boomers.
There is no long-term plan, just short-term expedients to shore up the system.
“I wouldn’t be surprised if the apparent German plan to forcibly redistribute migrants to other EU members left Germany with the pick of the crop.”
That would be smart on Germany’s part.
The story of germany/german people throught times is fascinating.
Look at the sheer powers unleashed thanks to fossil energies (and “people in command”) during WWI-II era. Aftermath, the Prussia no longer exists! In many places has been more than erased, zaped, bzzz.. the people are not there, their cities and buildings/dwellings are not there, even the fields and forests have different shapes etc. Think about it, it’s crazy..
Lets say you asked someone in the 19th century (or centuries prior) on the street and share with them this vision. You can bet that 10:1 people would rather believe in non humanoid inhabitants walking on the face of the Moon or Mars, than a prediction such as in 100yrs there would be Prussia no more.
The moral of the story, expect the unexpected, especially some energies still could be unleashed globally and regionally.
Its omost like Germanys “leaders” dont have its best interests at heart. But thats crazy talk.
Recall the first gulf war…
See this
https://www.youtube.com/watch?v=LmfVs3WaE9Y
Then have a watch of this outstanding Canadian documentary
https://www.youtube.com/watch?v=yaR1YBR5g6U
Does that young girl not deserve the Academy for Best New Actress?
Whatever it takes….
The entering of the refugees serves a Trozkist sentiment of permanent revolution. It will create fear and uncertainty and will split the people along a new line “for or against refugees” This is a basic ruling element being used since ages. Also it serves in destroying “national states” as entities for people’s identification.
“When you open all borders and let in all people you no longer have a nation, you will have some sort of soup”
People have to learn that there exist nothing else as a court where they can pledge their right as an “inhabitant of the euro zone” as they call it’s inhabitants against some sort of corporation (TTIP & TiSA). Europe is not a nation. It is an “unincorporated association”.
This relates to the transformation of the global economy into an entity ruled under the “british marine law” where every item in a “conquered area” is owned by the “british empire” meaning the banks. Check it out. Europe is being transformed into some sort of east india company. In India how did the british rule ? Create chaos between groups of the inhabitants that lived peacefully together for ages.
To what purpose?
I can see why Sykes-Picot created countries of opposing tribes/religions — the obvious intent was to be able to be able to side with the team that was willing to continue to sell out their resources in return for being designated the dominant entity.
But why invite such a situation into your own back yard… surely that is a recipe for chaos at some point…
Not saying I disagree — there is definitely an agenda here…
I was listening to pravda new zealand yesterday (radio new zealand for most) — and there must have been an hour spent talking about how refugees should be ‘allowed into Europe and taken care of – given a chance’
That is clear evidence that the Elders want this to continue — they are making so that if you oppose the influx that you are cold-hearted … racist even….
Cheap compliant, a-political, labour: the owners just love it.
There’s also money to be made in housing and training migrants, if they come in sufficient numbers: it must be in the order of millions as the margins are tight.
The European professional middle class love it, too: cooks, waiters, servants, au pairs…….
However, it is also clear that Turkey sees a fantastic opportunity to blackmail the EU over the issue. Local politicians in Turkey will also be taking be taking a cut from the smugglers, we can be sure of that.
If the Elders are/were so all knowing, why wasn’t the population explosion addressed. Why was the exponential function not understood. Why was resource depletion and the largest of all problems, declining EROI not addressed? There is no need for scapegoats right now, there will be plenty of witch burning when TSHTF in due course. No one or no entity has control over what is taking place, it has a life of its own, brought about by the insertion of cheap FF bonanza. If “The Elders” had a plan, the FF dilemma would have been managed, there would have been a plan. Otherwise like what has happened, they engineered the end of the world as we know it and it includes them.
Now every scenario for what is taking place is referenced backwards….IE something happens then they say “oh The Elders are doing this”…..predicting the past. Lets hear some future predictions for what “The Elders” will do, instead of what they have done. In the real world an accurate prediction of future events can’t be made, we can see an inevitable trend but we cannot accurately predict the nuances and forks in the road events will take.
? Easy, lotsa money and toys to have in the meantime squeezing the Earth is the answer.
There is enough relatively unspoiled environment to feed few dozen/hundred individual Elders(core of TPTB) for decades to come, membership only top hospitals and what have you. Now, the issue are the administrating levels bellow them in the pyramid and so far the small private jets, 7series bmws, exclusive location penthouses around the world and other vanity crap is still inflowing, so what me worry? We are just entering a phase when the level even bellow these is slowly starting feeling some uneasing question, e.g. those various hired hands on directors of individual industries etc.
The Protocols of Zion are a plan to gain control of the world … about being the king of the hill…
The men who wrote the plan — and those who subsequently would have updated and implemented it — are not gods — they are simply the latest in a long string of empire builders…
As has been suggested by many on FW there never was a choice… we are hardwired for more …. we are hardwired to reproduce …. we either grow … or we wither and die….
If the Elders had not followed the urging of their DNA …. and somehow over rode these urges…
Then they would not have gained control of the world… some other group that followed their DNA’s orders would have…
Think of it like a listed company …. it grows or it dies…
If Apple were to have made iphone version one and Steve Jobs had said ‘that’s it — no need to develop version 2 or 3 or 4….’)… then Apple would no longer exist…
The Elders are not omnipotent — just as the Romans were not….
You dance to the music that is played…. it just so happens that in this age fossil fuels dominate the charts… the Elders have done what was necessary to become kings of the hill.
I might add that when you are the king of the hill you probably have a certain amount of arrogance… the Elders quite probably believed that technology would deal with the problem of resource depletion ….
It would be obvious to them by now that there is no way out of this —- so they do ‘whatever it takes’ to fend off the end for as long as possible.
You talk about chaos, what chaos ? Do we have a daily mass shooting in Europe or in the US? Europe is far away from any sort of chaos. Even if we have riots on the streets sometimes, the reaction of the people always is “get more police and surveilance”.
The chaos on the street implements this learning for the people:
“When you go out on the streets to demand whatever, there will be pain and dying and it will be very ugly, so please stay at home, we will manage the situation for you”
The agenda is to create uncertainty and lead the people to want the politicians “to act”. They can then implement any privatisation scam they like under the guise of improving the situation. I listened to some interviews with people on the streets today on the austrian radio. All people have expressed some sort of fear. A fearful public will accept any law even if it does not relate to the issue. Germany for example has passed at least two heavily discussed laws in the last months: payment of subsidies for the brown coal running plants in eastern germany. And a law that energy companies are from now on allowed to install smart meters in every home. These laws do not solve any of the problems but they are not discussed publicly as the people are blocked mentally with the refugee issue. It is some sort of shock and awe therapy for the next fifty years to come at least (if we did not have the problems we discuss here on OFW…).
It is even worse in Europe, Germany especially, see GLP.
TPTB are about to lose control so they are becoming increasingly frantic.
Tone it down, please.
Anyone who looks at the demographics see that Germany has an awfully lot of people approaching retirement, or in retirement, and not nearly enough young taxpayers to fund the cost of the retirements of all of the elderly people. (All of these retirement funds are pay as you go, because basically that is the only way they can be funded.) The easiest way to fix that problem of not enough young people is to import some young people from other countries.
Of course, if Germany didn’t produce enough food for its own people before, it makes the problem worse. (I am not really sure where Germany is on producing food–with all of our fossil fuels it may not be doing too badly.) But if we have a cutback on fossil fuels, Germany will definitely find it difficult to feed the large population.
On the nuclear topic: I listened to Arnie Gundersen the other day. He was saying that Entergy (a nuclear plant operator) was making more money off of the closed plants than the running ones. This is because they get money for “consulting” on the planned demolition. Obviously very little to show there, and one would guess that the consulting hours are good.
http://www.fairewinds.org/nuclear-energy-education//nuclear-power-who-is-looking-out-for-the-public
Sweden is an interesting case. They decided that they would encase their spent fuel in copper, and then drill 500m into the stable rock, and embed the capsules in bentonite clay. There is a 30 year cooling process before you can stuff it in.
The whole scheme feels expensive. And to date nothing has been stored away. Sweden is/was one of the poster children for long term storage, so this is one to watch.
Copper. A interesting choice. bentonite clay is a very good sealing material. Im very glad sweden is trying.
:The whole scheme feels expensive”
Actually from a material standpoint the materials you mention are very low cost compared to many of the materials used in the nuclear industry. Bentonite clay requires only transport energy. After BAU ends maybe those who have had a full life can go slap a few more wheelbarrows of clay on.. From the aspect of knowing that BAU will soon end this is actually one of the more workable plans for containment I have seen. Swedes are pretty tough I bet old Sven will get more than a couple wheelbarrows of clay on.
There is a report concerning this storage. I haven’t read it but there is an interesting diagram at page 85 in:
http://www.skb.se/publication/1380606/R-07-24.pdf
The x-axis is time in years. The y-axis is the ground level yearly dose of radiation from the waste. The thick read line is the case where you don’t use clay or copper. You just leave the waste at a depth of 500 m. The thick black line is the background radiation. The dashed black line is where they aim, that is 1% of the background radiation. Using clay and copper is the green line. The thin red line is where you leave the waste on the ground without clay or copper.
The thing is one more background radiation is harmless. But of course, the graphs in the diagram only reflects what is expected maybe the standard deviation is bigger if you don’t use clay and copper.
Thanks! Nuclear is one system that no one has a very good “handle on” the long-term costs. We could never see the long-term costs when we started this, and we still can’t.
The “official numbers” are out and for the current allowed invasion of Germany, todays influx of 1-3M immigrants in few years aggregate would boost their GDP by .2-4% (definately less than 1% positive impact) it was on european mainstream media.. This is a joke by all means even in low-no growth stage of the history, so we hunt for the real motives elsewhere.
So, it is either misjudgment on the part of those bank-industrialists who openly supported this free-borders now plan quoting worst european demographic trends. Or there are other motives like mixing up the population e.g. in order to mask the chaos resulting from the finite world issues in next decades and possible command economy/openly authoritarian rule taking over. Or combination of both, which is my view as well..
I tend to support misjudgment and hubris most times: we are human, we screw up constantly but particularly in making Grand Plans…..
I don’t feel that anyone in Western Europe is facing up properly to food supply issues: in Britain at least the assumption is certainly that it will always be possible to import whatever is needed, as over the last 150 years or so (when local farms were allowed to go to hell which in turn led to the decline of the aristocracy in Britain).
Agriculture is seen in government circles as a minor industry, an electorally insignificant very small employer -unlike food processing which draws material from all over the world – and a dreadful subsidy hole, not as the basis of existence.
But one always reads about the threat to the consumption economy from the retirement of baby boomers and the dearth of young consumers.
How was Nov 5 for you Xabier? Where I am in the UK there was barely a firework to be seen or heard despite the temperature being a balmy thirteen degrees centigrade. A few years ago the sky was filled with noise and light on every night between Halloween and bonfire night but not any more. No mention of this on the MSM, of course.
Rather sporadic fireworks, but as noisy as usual tonight, no more no less than over the last decade.
But enlivened by a stoned idiot yelling through the village: maybe one of Benign Canine’s future serfs getting in some practice? 🙂
The same situation in Sweden. Farming is concidered to be backward by the establishment. I think we are 45% self sufficient on food if you measure the value produced to the value consumed. 25 years ago it was 90%. If you measure calories produced (mainly cereals, potatoes and milk) we could actually make it. Of course, that requires diesel, fertilizers and pesticides. Farmers are quitting their jobs quickly now. Fields and pastures are planted with spruce. This destroys the topsoil.
Very good post, most of Europe build up very strange forrest coverage in recent decades compared to few decades/centuries ago. For obvious reasons, grain imports, fossil energies for heating/cooking etc. But from now when grain import falters bellow certain level, supermarkets became unreliable on basic foodstuff, you can bet one diesel liter + plus human labor + animal labor (slow build up for a while) = lot of food.
There might be epidemics and famine along the way but the land and a bit of diesel and/or natgas, coal, and more manpower in the fields can/would EASILY feed lets say 30-60% of todays population in the West. That’s a workable realistic plan that FE doesn’t appreaciate, but will be executed anyway, unless we get some nuke war or something.
The EU is a important net food exporter. I think the biggest producers are Germany, France and the Netherlands. Some other countries like UK and Sweden are netimporters. I think that France has tried to maintain the tradition of small scale farming as a producer of expensive products like cheese and wine. Germany is probably more like the USA, they produce bulk products like cereals and pork. The Netherlands produce mainly greenhouse products like tomatoes and peppers. A big part of the country is actually a greenhouse.
The problem is that all of this relies on BAU. If people get poor no one will buy the expensice french products. The production in the netherlands is really energy expensive and after all, you can get along without eating tomatoes and pepper. The last thing you quit doing if times are rough is growing cereals and potatoes. People used to live on almost only cereals and potatoes for many centuries. The German production is not very resilient. Without pesticides, fertilizers and the machinery needed to spread them you are in deep problems. Farming without pesticides but using manure as fertilizer gives about half as large harvest. But my guess is that if everone quit using pesticides that will result in an increased pest pressure. It’s comparable to vaccination. If 90% of the population are vaccinated you don’t get epidemics.
I don’t know much about how the land use has changed in other countries beside Sweden. Maybe someone else can tell something about the situation in other places of Europe? Here at least, a huge amount of pasture has been planted with trees since 1950, mainly spruce. Also 20% of the fields have been planted with trees since 1950. This is of course problematic since it takes many years to turn a forrest to a field again. The topsoil gets destroyed, particularly by spruce.
Maybe we can feed 50% of the present population of Europe. It depends on how much fossil fuel we can get. Returning to draught animals and manure instead of ferilizers from grounded rock requires additional land use to support.
“But my guess is that if everyone quit using pesticides that will result in an increased pest pressure. It’s comparable to vaccination.”
https://musiccourt.files.wordpress.com/2011/09/istockphoto_16092940-worried-man.jpg
Yes, that what I meant, large part of Europe has been reforested since the advance of coal/natgas/diesel. This development is mostly visible in Scandinavia, parts of CEE, little bit in France and almost not at all in Germany as they kept the small farm concept directly after WWII in which they cut and burnt down almost everything around.
The regional variance as you rightly point to will play a major role.
Lets take the example of Holland, the country is dependant on natgas supply, which is dying in the NorthSea area, LNG Gulf outbound tankers are 3-5x more expensive than russian piped stuff, and their current elite hates Russia. Sea fisheries which fed the protenstant upswing of past centuries in that area are dead now. More over they now already effectively became semi-islamic state, so this country is for a rude awakening in the near future.
In that fashion I’d not discount real possibility of 30yrs war version 2.0 in which the original NATO countries perhaps incl. islamist parts of former France and Germany attempt to attack Poland, Hungary and Ukraine for “lebensraum” due to massive failure/reset of international banking and trade, which sustains Netherlands and co. at the moment. But that’s low probability event in fast collapse “now” as per Gail/FE but increasingly more probable if we stumble along for few more decades of slow burn collapse.
The thing I do appreciate is that 98% of all farmland on the planet has been farmed using industrial methods — chemical fertilizers have destroyed the soil
Also – a huge amount of farmland would also be rendered completely useless including most of the land (2%) that is farmed using organic methods because much of that land most certainly relies on electric pumps to irrigate during dry conditions…
Also important to note that animal manure is very useful in repairing soil burned out by urea fertilizers…. but wouldn’t the hungry billions eat all the animals when faced with starvation?
Unless someone can suggest a way to repair the ruined soils in months rather than years — then I fail to see how my analysis will be wrong.
You are right on the soils..it builds/reheals slowly even with the current best bio methods, but it’s in years not in decades to get kickstarted the basic level of self healing though, also the equipment is not that much energy or capital intensive as rather being wide/deep know-how underwritten.
But here comes the forced triage effect, which some of us here see as given in the mid term future, basically from certain point on it will be gloves off situation, naked truth, if you will: some of the new landed gentry will stop selling full output production on the market, instead they (and their goons and experts) would focus on shifting into semi self-sustaining local mode of operation, i.e. less output, but improving the estate for even lower energy throughput/crazy climate future.
Obviously this means suddenly even more chaos for the JIT sucking city/suburb dwellers as it further destroys agri output available on the market. The goons part would secure the estate against both mobs and central gov so they can’t force any redistribution on them.
That’s how this proto-feudal age would be starting, these new local centers would slowly grow in importance lure skilled labor into maintanance and spawn low tech industries around. Hint: first stages of this stuff is already emerging in Mexico, Argentina and other places, I bet some wealthy Texans are into this prep as well..
Fast Eddy
You are exaggerating on the effect of chemical fertilizers. It’s usually not that bad. In fact, often it’s no problem whatsoever.
Let me illustrate. If you for instance grow cereals you are almost always only interested in the seed. Hence, you leave the straw and the roots which later on gets ploughed into the soil. This gives a lot of humus soil which means living soil. If you grow by organic methods you get approximately half the harvest. That means also half the amount of roots and straw and less addition of humus. Of course, you get an addition of humus from dung if you are doing organic farming.
There is of course some extreme examples where the soil has been mistreated by industrial farming. I guess it’s those places you have been reading about. You seem to be an intelligent guy but you are extrapolating your ideas way to far.
In many places the soil is far from dead.
98% of all farmland is farming using chemical fertilizers and pesticides.
You cannot be half pregnant.
Therefore 98% of all farmland is therefore dead.
Without years of organic inputs — what do people eat while they wait?
Fast eddy
Read my explanation above and admit that there is some reason to it. Let us be empirical as well. There is plenty of farmers around here that have changed from conventional farming to organic. There is no big problems. Try it out for yourself if you don’t believe me. Get a small field.
I’ve got 5 hectares here in New Zealand — I’ve got hundreds of square metres of raised beds — I’ve got mountains of extra compost piled up out back — more mountains of mulch — I’ve got 60,000 litres of water stored with both gravity fed spring water + back up solar pumped water…. I’ve got a shed full of spare hand tools….
I live in a remote – rural – farming community.
There are quite a few people who grow food here — but very few would be completely self-sufficient without BAU….
For instance — one of my neighbours grows most of his own food — however he irrigates using a diesel powered pump.
Yes quite a few people have converted small areas of land to organic farming — but I would guess that the vast majority of them are using pumps to irrigate their plots…..
There are huge amounts of land dedicated to orchards and grapes around here — they are all using chemical fertilizers — their soil is dead. They irrigate using massive pumps…
I reckon there are half a million people within a tank of gas of me.
There are probably 5000 people within a days walk of me…. I am as self-sufficient as possible — but I am a tiny island in a sea of BAU farming.
I am not optimistic.
Desperate, hungry, and probably armed people will be coming up the drive — wanting to be fed.
7.4 billion people vs a very small number of organic farmed that do not require electricity to grow their crops.
The odds are heavily stacked against survival
Fast, are there choke points in the road system before they get to your town in general? Will the community agree to use earth moving equipment to block the choke points? Down large trees? Blowup bridges? You do not want to fight the mob in your driveway. You want to fight with your fellow towns folks on the four choke point forts way before the mob get to your home. What do you have in the way of local police, military that you can invite in as part of the group that defends the town? Invite them before they invite themselves.
Fast Eddy,
On your 5 hectares in New Zealand as well as on your neighbours plots, you are going to need windmills (the ancient Greeks used windmills that look a lot like flag poles and sails to me..) to pump water and BioGas (rural India has millions of small Biogas reactors, so those should not be impossible to build..) to run the machines. So, you need a hundred to two hundred people to help you and your neighbours out. With your neighbors help, you should be able to feed a hunderd people initially. And after a while, those people will help you to grow more food for all of you.
But most importantly, you only need a hundred to two hundred well fed, organized people with some sort of radio comminication, to either keep the other thousands that are coming away, or to teach those that will not turn away, to grow their own food, if land and aquifers are available.
After a year or two, your compost will be needing a lot of fish and waterbirds dung, so you and your neighbors are also going to need ponds, that are filled by wells, that are pumped be the wind mills, and the aquifers are kept full with rainwater harveting techniques, like step wells etc. All in all, you and your neighbors are going to need a lot of extra hands to help you out.
Fast Eddy, sounds a lot to me that you have very good chances to be in the 0,01% that get to see what the world looks like in 2050.
“to run the machines” Not counting on having machines… no spare parts…
“radio communication” Won’t be possible – that requires electricity
“feed hundreds” not possible — soil is not great around here and the vast majority of it is farmed using urea — the soil is dead without urea — need to use raised beds and make soil — we might be able to feed 3 or 4 families from our land.
“2050” — unlikely — too many people who are not in the same position — also — spent fuel ponds will pump death our way ….
The main reason I bother with all of this is because it makes my wife feel better…. she is not aware of the spent fuel pond issues nor many of the other impediments to survival I have posted here… she is however very much aware of the imminent collapse.
Well, of course. Without BAU food production will collapse. But not because the soil is dead, but because modern farming is reliant on so many inputs from the industrial system.
You seem to be well prepped. Hard to know how people will react in case of a collapse. Far from everyone will stop at your place.
I am also thinking about what to do. I have decided to buy a small farm in Sweden. Actually, New Zealand would have been my first choice.The climate is good and its not very densely populated. But my wife refuses to leave Sweden. It’s obviously not a good choice. One possible advantage is that if there is a collapse then one winter will probably wear down most people. Not because it is very cold but becasue it is cold enough, dark and rainy/snowy. Furthermore, our food system is heavily based on just in time of demand. That could imply a quick period of high level crisis. Then most places will run out of food. Though, I am not entirely convinced of a sudden dissolution of BAU. As I prefer the countrieside, living at a farm suits me in any case.
Unfortunately, I agree with you. No one sees the big picture.
Another thing about the lack of resilience in the food supply system.
The genetic quality of our domestic animals has deteriorated. For instance, modern cattle is breeded to produce a lot of milk and eating huge quantities of soybeans and cereals. They are in another word very spoilt. The old races where much more hardy. They where breeded to tolerate starvation during winter and to eat almost anything like sticks and twigs. Furthermore, they are smaller and more intelligent which makes them easier to handle.
Actually cattle used to be one of the most important parts in the self-sufficient houshold in at least scandinavia. I am pretty sure it’s similar in the alps and central europe. (Lacto-intolerance is very rare in these areas.) Cattle are originaly automatic harvester machines harvesting grass, which grows everywhere, giving milk, dung and some meat. But modern day cattle is just as reliant on fossil fuel as the rest of society.
If you can you should get one of these or some other landrace to your homestead, before they disappear:
“The genetic quality of our domestic animals has deteriorated.”
The same goes for all the vegetal species we enslaved.
Good point!
Not to mention flying cattle from Ireland to Saudi Arabia and then keeping them in airconditioned stalls to ensure the best quality milk for the Sheiks.
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Re: “Many people have been concerned about what they call “peak oil”–the idea that oil supply would suddenly drop because we reach geological limits”. I think that this is a backward analysis regarding how the system works. There is plenty of oil available, if only the price would rise high enough and stay high for long enough.”
Comment:
The oil peaking comes in various shapes and sizes
The drop was very steep when Iranian oil production peaked in the mid 70s because it triggered a revolution. http://crudeoilpeak.info/iran-peak
But the peak in a group of other countries lasted for 7 years and then declined at -3.6% pa
25/6/2014
Analysis BP Statistical Review 2014: Oil prices started to skyrocket when 1/4 of global supplies went into irreversible decline
http://crudeoilpeak.info/oil-prices-started-to-skyrocket-when-one-quarter-of-global-supplies-went-into-irreversible-decline
There are many countries where the geological limit is clear to see e.g.UK and Norway or Alaska. The global peak is more difficult to deal with as the country peaks don’t all happen at the same time and we have geopolitical feed back loops.
It’s all these peaks here and there which each time disturb the oil supply system and have long-lasting consequences. The West Siberian oil fields for example peaked in the mid 80s at the technological level available to the SU at the time. The East European economies were dependent on Russian oil because they had no foreign exchange for oil imports from global markets even as prices were low. Then we had Chernobyl.
4/10/2010
Russia’s oil peak and the German reunification
http://crudeoilpeak.info/russia%E2%80%99s-oil-peak-and-the-german-reunification
If oil peaks in a country – even temporarily – it is irrelevant whether later on more oil can be produced like shale oil. If it wasn’t there at the right time the damage is done and irreversible in various forms like new debt, budget deficits or bankruptcies.
And oil production in International Oil companies has geologically peaked in 2004, resulting in refinery closures or sales e.g. here in Australia
23/2/2014
Geelong refinery sold as Shell’s oil production continues to decline
http://crudeoilpeak.info/geelong-refinery-sold-as-shells-oil-production-continues-to-decline
A big issue is that the economy of a country or of the world can’t shrink nicely. It can do this better, if it is a single country, and there are others to help it transition to some other source of income. But the fact remains–Egypt has way too many people for what resources it has today, and so does Syria. It is quite possible Argentina and Venezuela do too. We end up with individual countries collapsing, and this indeed does contribute to the world collapsing.
One thing that peak oil people often forget is that when the sum of a number of functions (such as oil from different countries in the world) approaches a limit, the shape of the limit curve is very often a different shape from the individual functions that are being added together. For example, look at the approximation to a square wave using combinations of sine functions, using Fourier Series. http://mathworld.wolfram.com/FourierSeriesSquareWave.html In fact, in general, it is possible to approximate any function satisfying certain conditions using a Taylor series. http://mathworld.wolfram.com/TaylorSeries.html
Thus, the shape of the world downslope in oil production is likely to be quite different from what has been experienced for any one of the countries. This is because all of the curves are following the same price signals. As the price signals change, the all fall at once.
You are not really wrong. It is just that the story for the world is different from the one for the individual countries. There are very limited conditions under which the sum of Hubbert Curves will sum to a Hubbert Curve. I don’t think it can happen when all the curves are following the same price signal.
But isn’t world production also the sum production of individual wells and fields, just like in the U.S., but on a much larger scale? The same principles should still hold. If not one could make the same argument if we split the U.S. into smaller parts. Perhaps you can elaborate further in another post?
The issue is that price signals determine which oil is extracted. As long as the price signal keeps rising, oil from more and more expensive-to-extract locations keeps being added. Once something happens to cause the price signal to fall, everything tends to slow down and fall at once. It doesn’t happen all at once, because of built-in buffers in the system, like guaranteed sales prices that last for a while, and existing wells that keep producing. But once it does happen, even the simple things, like infill wells in existing fields stop being added. The system eventually breaks sufficiently that workers cannot be paid. Once workers cannot be paid, even the output of existing oil wells soon disappears.
The shape of the summation, when it reflects price signals, is very much more like a square curve than like a Hubbert Curve. Hubbert only talked about the use of a close to symmetric curve when there was another fuel that would be an identical replacement for it. He thought nuclear would be cheap and abundant enough, that it could be used to reverse combustion and produce liquid fuels for existing cars and trucks. Without a cheap identical replacement, the idea of a Hubbert curve as the sum makes no sense.
Even Qatar Petroleum seems to have to cut jobs: some talk about 4000+ layoffs, ie 30% of their workforce (!!)
http://dohanews.co/qatar-petroleum-chief-says-no-more-job-losses-for-now/
It seems like Qatar was supposed to be the country that could make money at a price under $100 barrel –was it $70 barrel? Of course, oil isn’t at $70 barrel either.
That’s interesting. I always thought it had nothing to do with price and is a consequence of the physical properties of an oil well, which is finite. As the oil flows out pressure inevitably drops over time such that production eventually slows and tapers off. As long as new discoveries do not add to the available reserves this results in total production starting to decrease permanently. The only way I see how price comes into the picture is how it affects the RATE of extraction. Low prices would logically decrease the rate of draw down and make the curve less steep i.e. it prolongs the life of the well, shifting the peak or decline further out to the future.
Remember the saying, “If the only tool you have is a hammer, then every problem is a nail?” The same problem affects academics, writing journal articles. Academics tend to work in silos. Furthermore, those who peer review their theories tend to come from the same silos, so have as limited a world-view as the original author. If the only subject a person knows is physics, the assumption quickly becomes that the simplest physics answer is the solution. There may be a may be more variables involved than those writing about the problem assumed.
The people writing about oil coming out simply because of the physical properties of the oil well had a second unstated assumption in mind as well–prices would rise to a high enough level, to make certain that investment would continue, so that all of the oil that could reasonably be extracted would, in fact, continue to be extracted. Without this unstated assumption, oil production falls off quickly.
If investment drops to zero, and daily maintenance drops to zero, it will not be long before the amount of oil extracted drops to zero. The oil that remains may be permanently left in the ground forever, if the systems are not in place to extract, refine, and use the oil. Thus, the price determines whether ANY extraction at all will be done. ZERO is one of the possible outcomes. So price does affect the RATE of extraction. It can very easily turn the RATE to ZERO permanently.
maybe like a college student that has a jug of beer with a straw and invites his buddies to add straws to increase production, one student even puts a bend in his straw to take beer straight off the bottom. will production peak? or will you just hear a slurping noise at the end?
Slightly related:
http://www.planetizen.com/node/82242/building-resilience-makes-good-business-sense
The first thing I notice is how big these structures are. Has anyone done an analysis of where all their materials come from, what is involved with building their systems, what kinds of eco-industrial assumptions they are built on? If the grid went out, traffic lights wouldn’t work, hospitals would be chaotic, stores would be empty. So these monster things seem unrelated to the world around them. And that would be the antithesis of planning.
The short answer is ‘Yes’.
Most large buildings and probably all buildings built with some form of government money will seek to have a BREEAM rating. I forget the equivalent for the USA, and for Europe, but all these schemes provide checklists for design and construction. So, for example, it would not be possible to point to a piece of wood and say which forest it came from, but if that wood was not from a sustainable source it would impact the building’s rating. Hope I understood your question.
You understood perfectly. But I gather, reading Gail, that this attribution of source leaves out more than it includes. Source is also maintaining systems like road maintenance (and much m,ore) that so many seem to ignore.
http://thrivingcities.com/blog/solving-pattern-what-urbanists-can-learn-wendell-berry
Here’s an argument against myopic thinking, involving to solve single, disconnected problems. Intentionally or not, Gail is showing the fallacy of that.
“In it, Berry sharply criticizes the industrial view of agriculture that has harmed as much as helped.”
Reminds me of someone who recently insisted that the entire world needs to STOP!!! industrially farming and instead grow organically NOW!!!!
I gently suggested that 99% of the world cannot afford to shop at Wholefoods … that industrial farming involving pesticides and chemical fertilizers is the only way we can feed 7.5B people…
I held back on saying that these billions all want to breed more prolifically than rats — or rabbits — so please piss off with this ridiculous koombaya bullshit about organic farming…
As for that article — it reads like some Koombayaist is high on acid clattering away and saying absolutely nothing of value – just spewing catch words and phrases like ‘smart city — radiant city — solving for the pattern’
This is the crowning glory on this heap of dung:
‘He gets us closer to an idea of the city as something relational rather than static, human rather than technological. And he offers a language to articulate urban problems that express human needs in a world imbued with deep and meaningful connection’
WTF does that mean?
Should I take it as the ideal city would have a Wholefoods market on every corner and a Starbucks serving low fat lattes — no McDonalds or other fast food franchises allowed… where all the people wear Brooks Brothers suits and on days off they tie sweaters around their necks and tip toes around in expensive soft-leather loafers —- where everyone is politically correct and reads the New York Times religiously?
Jeez … what a total page of horse shit — top to bottom.
I really need catharsis after reading that…. I need the sweet soothing sounds of Joan…. and her anthem of peace, love — and an extra shot of wheat germ….
FE, I wish you would check out . If you think this article is BS, you should see the rest. I refer to the people who write and read there as zombies. But seeing relationships rather than going for single issue tech fixes–self-driving cars, light rail, whatever–isn’t necessarily BS.
I think that there is room for differences of opinion on some of these things. The article itself was rather short. Perhaps the author had more in mind than could be addressed in such a short article.
Yes perhaps….
But you identify the problem — he has addressed nothing — he has explained nothing — there are no solutions put forward … no details….
And we all know the axiom about details….
He who? Wendell Berry? He didn’t write this. But one should look at to see how much more clueless than this the articles are. Land use planning is far more determining than most people realize, and yet the major web site for planners is full of zombies—like a ghost town. I try to shake them up, but it would be nice to get some help. They are UTTERLY CLUELESS about resource scarcity!!!!!
I have very specific ideas, fairly detailed about what I recommend.
FE has installed a large water tank that gravity feeds the lower property. This is an ideal for every single household on the planet. I have done the equivalent on my 1/8 acre lot. As we speak, I’m proposing that my entire community do the same. And beyond that, the entire county. It would be a nice surprise if I could even get this much done in the time remaining.
FE buys an excessive number of tools. These are tools that require no fossil fuels to work. I recommend this for every household in the world. But it comes far second to water (or lower down even). I’m too poor and disorganized to have a better than so so supply of tools. But then I don’t have a heck of a lot of time to be at this. I’ll dig with a stick if I have to.
Left to my own devices, not one new road or building would be built. I would add on and adapt what’s here already–with paper and cardboard structures I’m currently working on as an option. Waste paper and waste cardboard.
Whatever industry that can be mustered from here on out should use materials dug up from landfills.
Whatever fossil fuel energy that’s available would be rationed. Nuclear facilities get first dibs. Hospitals next.
I would reopen small, locally controlled fossil fuel operations. Maybe even use it to make windmills. For trade, sailing boats sort of arrangements among people who are missing teeth.
Everybody on the planet will live in hubs that don’t require new construction; it can rely on conceptual organization within the built environment that now exists.
Every backyard will produce something related to food production, (or even every south facing window ledge). It will be partially irrigated by gray water
The list of similar specifics is quite lengthy. It’s only what I’d suggest, and it’s what I actually try to advance. But other than the fact that I’m obsessed and can’t stop, I’m not in the least concerned what anybody else chooses to do. And I don’t have or need hope.
I try to think things out so as to make the case for one single global paradigm. Do it my way or die. No democracy here.
I’m not so sure obsessing about any of this is such a good thing…. the odds are stacked against surviving no matter how much one readies oneself…
We turned on the solar pump the other day and that is all functioning (need to pump about a billion litres of water to get some ROI on that sucker!!!) — we’ve put massive amounts of bark mulch throughout the raised beds and orchard — just finishing up the glass house and a few bits and pieces…. the last key thing is to complete a large composting station…. should all be done within a few weeks…
At that point I will have done as much as I can do …. if it works then great … if it doesn’t well we tried…. Mr DNA cannot rake me over the coals for not putting in the effort…
Time to get on with living while living is still possible ….
Looking forward to a run through eastern Europe … could this be the Last Great Adventure?
Will the calamity hit in January stranding Fast in the Hotel Budapest where he will toast the end of civilization with a glass of fine champagne …. unable to return to his Refuge in the Valley?
Stay tuned for more!!!
Big buildings today rarely have windows that open. That by itself is a big problem. The building quickly overheats, and there is no way to cool it down. I expect water is pumped up to the upper floors. Bathrooms won’t be very usable without water.
At last, there is something else to comment on, sacrificing uncountable electrons in the process.
My apologies for being so slow about getting a new post up. This post took a long time to write, and, as you say, used a lot of electrons. Sometimes shorter is easier to digest.
I thought the last one should have remained a bit longer — we were closing in on 2000 comments!!!
About 20% of them from you!!
You look at what’s happening and try to imagine what it would take for it to all make sense.
You know that they’ve got smart people that they pay to sit around and think.
If I think of something I’ve got to know that they thought of that a long time ago.
So if I see that there are too many people, then they must have seen that a long time ago.
But we don’t see anything being done to accommodate all those people.
There’s supposed to be billions of more people coming in the next couple of decades and we’ve already got too many.
I’ve got to believe that these high roller, mover and shaker Ivy League money suits have got a plan.
It doesn’t appear that their plan is to accommodate all our brothers and sisters.
So what’s the alternative? Elimination.
You either accommodate or you eliminate. Exterminate.
The most plausible method is the virus.
I was thinking of this meeting where the doctor types are making a pitch to the money suits and they are telling them that they got all these souped up agents…… viruses, bacteria, fungi, prions …. all ready to go, but they tell the money guys that the thing that makes the greatest difference in the lethality of the agent is the stress level of the recipient. At extreme levels of stress, the lethality raises exponentially.
The money guys go to some other smart people.
“How do we create a bunch of stress?”
“Hunger and fear work the best” say the smart people.
The current economic shit is a plan to soften up the masses
so that the virus works better.
It would also make sense to set off a nuke some where.
Nothing like some pictures on TV of people made of charcoal.
Suppress the immune system for efficient extermination.
Culling the herd is not a new concept.
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“The current economic shit is a plan to soften up the masses.”
This is indeed a very stressful time to be alive but this seems to me to be the inevitable result of ever-rising complexity combined with ever-diminishing real wealth on the collective level, and not the result of some sinister master plan. Which isn’t to say there isn’t some sinister master plan afoot, of course…
I agree but tend to think that the stilettos/nukes will be used primarily by rich people and countries, one against the other and this is playing already out. As in the US/EU complex against Russia and China. The poor have already been shanked.
As resources become more scarce the elites will turn on each other in the fight for what remains…
As we can see — it is already happening.
Let me check my library for a reference:
Why is this happening at this point in history?
As the world explodes in violence, war, riots, and uprisings, it is challenging to step back and examine the bigger picture.
With airliners being shot down over the Ukraine, missiles flying between Israel and Gaza, ongoing civil war in Syria, Iraq falling apart as ISIS gains ground, dictatorship crackdown in Egypt, Turkey on the verge of revolution, Iran gaining control of Iraq, Saudi Arabia fomenting violence, Africa dissolving into chaos, South America imploding and sending their children across our purposely porous southern border, Mexico under the control of drug lords, China experiencing a slow motion real estate collapse, Japan experiencing their third decade of Keynesian failure, facing a demographic nightmare scenario while being slowly poisoned by radiation, and Chinese-Japanese relations moving towards World War II levels, it is easy to get lost in the day to day minutia of history in the making.
http://www.theburningplatform.com/2014/07/28/our-totalitarian-future-part-one/
http://www.theburningplatform.com/2014/07/29/our-totalitarian-future-part-two/
Nice summary of current events there, Fast. Good grief.
I don’t think you should leave the changing climate out of that list either. I understand that the economic problems will do enough damage, but Climate Change is the real killer, if the radiation doesn’t kill everyone, the ecosystem being screwed up by the climate will.
Drug lords are pawns of the government, they add to the economic output of the country by exporting those valuable “goods”. Then the government comes an grabs it’s share through “war against the drug cartels”.
I’ve wondered how so many countries that produce little get by.
I’ll put it to you (and others who share your sentiments, Paul being exhibit #1): if there isn’t a plan, then … what? Oh well, It all just comes apart?
To be honest, that kind of wishful, defeatist thinking is a product of a long line of purposeful breeding, where characteristics of servility & docility were selected to produce the most malleable serfs. I know it’s difficult for many to think in abstract terms, but what commoners call “psychopaths” are people (monsters?) who aren’t governed by the general rules & ethics so diligently inculcated among the servant class.
We have 3 intractable problems (actually, predicaments): population overshoot, resource exhaustion and environmental degradation. There is a very, very simple solution – simultaneously reduce both total population and per capita consumption. Chinese peasants famously got by with 3 bowls of rice per day – if they were lucky. We as a species are millions of years ago – we can live on very limited calories.
So it’s not like there isn’t a workable, effective solution, it’s merely a function of willpower to execute the deed and do what must be done. If you desire to continue living in a world of denial, be my guest; after all, it’s your prerogative. But for those interested in either playing the game, or just merely following the action, what is transpiring before our very own eyes in real-time couldn’t be more obvious.
Of course there is a plan.
It involves printing more money…. rolling out more stimulus … lending money to companies at zirp so they can buy back shares…. bail out everything… jail short sellers (China) … fake the numbers….
Do ‘whatever it takes’ — even if it means doing whatever it takes will eventually drive BAU off a very high cliff…
So why do all these things?
Surely it is obvious — it’s because the Elders know that no matter what they do — this is an extinction event (or best case scenario a few of us hang around to scratch out bleak existences in a hell on earth)
So they do whatever possible to keep things going for as long as possible. The plan makes total sense to me. I 100% support what they are doing.
You cannot grow food in chemically farmed soil.
You cannot manage spent fuel ponds without BAU.
I don’t think that there is any way we can execute a workable solution. For one thing, it would require making plans for very hard times ahead–something that the vast majority of the population don’t want to think or talk about. For another, it would require paying people who work on this new plan, in addition to the other people for the old plan. It will be more expensive than we can afford.
A third problem is that we have a hard time even thinking through all of the details that need to be done. The economy is a self-organizing system for a reason. It doesn’t take advance planning by anyone to figure out how it should work. Instead, there is a “trial and error” approach to figuring out what will work. It gradually changes in the direction of what will work, while the old methods disappear.
The thing is…
Some people believe there will only be hard times ahead for the masses… that the 1% will somehow work out how to maintain BAU … with all the comforts and luxury and technologies that they presently have.
To put it mildly — that is nuts!
Agreed! Doesn’t work.
The old methods did not disappear, completely..
What’s an Elder/TPTB to do at the times of “deeper crash” if ever there is one as opossed to gradual staircase style dislocation. Anyway, he well just send his goons to already pre-checked skilled people in the desired area with offer that can’t be declined. In practice an Elder/TPTB would e.g. promote skilled low/no fuel agrarian experts to run his proto feudal estates etc., similarly for supporting industries etc. And those successfull “experts” would later form basis for new mid level nobility.
Analogues of this happened throughout history, this time it will be ~similar.
How big were the bowls? 🙂 Three bowls of rice seems rather benign compared to what I see coming. Was there salt? 🙂
Aubrey, let me suggested a third option. The rich just ignore the poor. They of course place enough security staff between themselves and the poor to stay safe but that is not new. The true poor were never given anything by the system they will continue as best they can. The historical aberration of a large middle class is where a transition is occurring. Defined benefits pension are a thing of the past. Social security is continually whittled down eventually to zero. Medical care will be rationalized from all you can eat to 3% of GDP assigned to treatment of skilled productive workers for fixable things like strep throat with low cost antibiotics. We will return to the way humankind has always dealt with terminal disease we will die no treatment. There will still be a merchant class/middle class it will be a more normal 2% of the population.
The “middle class” is a canard, a mirage quickly vanishing from the control hologram so effectively constructed from two historical – and very short-term – anomalies: fossil fuels and the gun.
Fossil fuels freed the 98% from exhausting, back breaking manual labor, and the gun allowed commoners to (temporarily) seize power and force government to act on its collective behalf.
Every single person alive today who doesn’t have an accompaniment of security staff is by definition a commoner. The characteristics of the elite have never changed in over 10k years; they are the same kinds of people, doing the same things kinds of things they always have.
They don’t compete for school slots at prestigious universities; they don’t send out resumes attempting to become gainfully employed after graduation; they don’t save for down payments and shackle themselves to home mortgages. And of course, they certainly don’t pay taxes or are held accountable to the same kinds of laws & regulations as everyone else.
We, the 98%, are incredibly fortunate to have lived through these times. Instead of being drawn, hanged and quartered for being a heretic, I just get up and get another cup of coffee. But, if one wants to continue to thrive (or just survive) one must be honest and deal with the facts on the ground – about themselves and the nature of how the world works.
But here is our great advantage: we know what is happening. Imagine going into a betting parlor and knowing the future? That’s how much of a dunk shot this is.
I am sure the Elders have run this model through the super computer…
But found it lacking for some reason — likely because it means that this would collapse BAU — and without BAU things go very primitive very fast — as in no energy…
And that would lead them to the spent fuel pond issue — no BAU — no way to manage those… therefore everyone dies…
So we get what we see now — pulling levers and pushing buttons — trying to keep what we have alive… for as long as possible
It seems like issues that could threaten the elite would actually get taken care of. I mean we spend 800B per year on the military. Wouldn’t 10% of that take care of the issue, dry cask once and for all. I’m no expert, but seems doable if you really wanted to. Need time and planning of course.
The issue I believe is that the nuclear industry don’t want to admit the cost of the full cycle. But it doesn’t matter. That stuff isn’t profitable any more so it’s winding down.. Sweden goes gown now.
Fuel has to be cooled in ponds for around 10 years before you can cask it…
There is new fuel being loaded into reactors or being shifted to a pond somewhere in the world.. right now….
How difficult would it be to prioritise maintenance of the spent fuel ponds – all 4000 of them – to at least ameliorate that part of the collapse equation? A global task force of military engineers maybe? And wouldn’t the directorate at the IEA have thought of this already? I haven’t seen any of them mention this – only plans to build fast breeder nukes to consume the spent fuel. Are they really not clued up about this? It’s very hard to believe. But then they were storing spent fuel at Fukushima in ponds above the reactors so…
You run into the same problem as you would if you locked the greatest scientists into a room with a table and chairs — and asked them to make a baloney sandwich.
Spent fuel rods must be managed for up to a decade in high tech, computerized facilities — only then can they be dry casked.
If there were another way to deal with them before dry casking — we’d know about it — because we’d be using it.
So this guy was on to something then…
[youtube http://www.youtube.com/watch?v=n8H7Jibx-c0&w=420&h=315%5D
The chief operating principle of our society is to deny, ridicule or ignore every existential threat. I’m sure that strategy will work out great.
I really don’t think so. To easy to wipe out your friends and family.
“Chief executive officers are less confident about economic conditions in every major region across the globe, according to a quarterly survey of top business executives.
“The U.S., while the strongest market globally, is not immune. Confidence in the U.S. dropped for the third consecutive quarter, according to the latest Young Presidents’ Organization (YPO) Global Pulse survey.
“The erosion in confidence results from the belief among CEOs that the global economy has softened in the past six months and will continue to weaken six months from now.”
http://www.cnbc.com/2015/11/02/ceos-wary-of-economic-conditions-worldwide-survey.html
The MSM does provide hints of what is really going on …. it can be quite useful that way… but it takes a lot of sifting through the garbage heap to find something worth keeping
The drop in confidence among Chinese executives is really amazing, from the chart in the article you link. Worrisome!
The Chinese are known for panicking in unison, so either they are on to something or it’s just panic.
Gail, thank you for this post, which is clearly the distillate of many years of deep thought and diligent research. Given that the collapse of oil prices was your ‘starting gun’ for the final unwinding of industrial civilization and we are now over a year into that process, I wondered – has anything about 2015 really surprised you? I know I felt we would see more overt signs of trauma in the fracking industry by this stage, and the ability of the stock markets to remain for the most part optimistic in the face of very strong pulls to the downside has been a constant source of wonder.
There’s hardly anything to wonder about. Central banks are supporting the various markets to prevent their collapse at all costs. The moment they turn their backs on down it will all go like a lump of lead. Same goes for other asset classes like real estate which are in bubble territory in most western countries. These are where most people take their cues about how the economy and their future happiness will play out. So is it any wonder they are levitating sky-high even as almost every other economic indicator is heading lower?Fracking is also being shored up, as to allow defaults in what was perhaps the only sector of the U.S. economy that actually added real jobs and where debt obligations amongst creditors runs very deep, is to invite total disaster. That’s not to say disaster won’t eventually happen.
For me the extent of central bank involvement would be an excellent reason for investing with extreme caution. I suppose I should get over myself and stop finding such novelty in the apparently boundless hubris of the species.
Interest rates have been near zero for some time now, and the wonder is without room to further lower them how is it that financial assets continue to be so highly valued? Fiscally there is also little ammunition left to increase debt to fund outright buying of said assets by central banks. So why hasn’t the market swooned, that’s the source of wonder.
It’s being propped up. Have you not heard of the Plunge Protection Scheme (PPT)? A.k.a the Federal Reserve. Insolvent companies are using almost free money to buy back their shares so as to create scarcity which leads to higher stock prices. But one can see that this is a zero sum game in the long run as their debt to profit ratio (or unprofit ratio) only keeps increasing.
Yes, it is hardly a sustainable model. This article is from October last year:
“Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much. They’re poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show.”
95% of earnings!
http://www.bloomberg.com/news/articles/2014-10-06/s-p-500-companies-spend-almost-all-profits-on-buybacks-payouts
A handy formula to remember is that if the rate of return on financial assets is i, and the earnings of that financial asset is $1 per year (and expected to continue at $1 indefinitely, then the present value of future earnings is 1/i.
So if i = 5.0%, then the present value of earnings of $1 is 1/.05 = $20, so the “value” of the financial asset is expected to be $20. As the interest rate drops, the value of the financial asset rises. If the rate of return is 2%, then 1/.02 = $50 is the value of the financial asset. If the rate of return is 1%, then 1/i = $100 is the value of the financial value. As i approaches zero, the “worth” of the assets giving rise to those earnings rises, theoretically to infinity.
The other thing that happens when interest rates on bonds are down is that many investors (including pension plans) think that stocks will do better than bonds, when appreciation is included. The extra demand for stocks helps raise the price of stocks.
A third related issue is that if people want to speculate in the stock or bond market, it is very cheap to borrow money when interest rates are low. Some of this borrowed money goes into raising the prices of commodities (like oil). The availability of high prices for commodities as well as investment funds encourages investment in enterprises which may never pay back, but which look good on paper. The value of these new assets adds to the total value of investment assets, and makes everything look better (as long as commodity prices stay high).
Some of the borrowed money when interest rates are very low may be used directly to speculate in the stock market. This, too, adds to the demand for stocks, and thus tends to raise prices.
As I said, both monetary and fiscal policies have reached their limit and have very limited room left to juice the system further. Big question is how long can the markets hold.
The banks are encouraging this …
I know of one ex-banker high-nett worth character who keeps getting offers for nearly zirp money from his bank … first they offered 1M unsecured at well under 1%… he recently was encouraged to take 2M at an even lower rate!
‘whatever it takes’ — that’s the way we roll these days….
I expect TPTB see the fracking industry as a national security issue and so cost is no object. Strangely enough, I would agree with them. Propping up fracking will not fix the problem it does enhance the balance of power for the US.
I agree with this. When it becomes apparent to all that the expensive oil industry (fracking, tar sands, deep water, polar) is collapsing, it will not be allowed to happen. I don’t know the mechanism of the intervention. Propping up the price of oil or direct subsidies to the oil producers, or both will probably be tried. Anything to preserve the illusion that good times can continue. We will collectively bankrupt ourselves by doing this, but to accept the reality is too painful for any politician or leader who wishes to survive. This of course points to a fatal weakness in our manner of governing, and even in our human inability to confront unpleasantness. If you speak the truth you will be marginalized or destroyed.
They have already done the propping up, it’s called ZIRP. But prices have sunk due to over production and immiseration of the customer base. A complex society like the U.S. cannot run on 1/3 of the oil it needs daily just to keep going. It will collapse once imports start to dry up, perhaps even before as panic sets in at the thought of not having enough gas to run little Timmy over to soccer practice that weekend, followed by a drive to the outlet store for another bout of retail therapy.
I see ZIRP as a sort of broad spectrum palliative for anyone who needs to borrow money. At some point there will be a triage-like designation of a short list of entities (oil companies, banks, MIC contractors) who will then receive explicit, targeted, direct, deliveries of public money into their pockets for as long as it is possible to continue. The urgency will seem compelling and it will be dressed up as a national security imperative. At that point any discussions about social security, pensions, infrastructure maintenance, or benefits for the little people will seem quaint and selfishly out of place.
Veg, superb posts.
“The urgency will seem compelling and it will be dressed up as a national security imperative.” One would worry about the stock markets panicking and lines of credit dramatically tightening under such circumstances.
We are already seeing wider differences between the price for low rated debt and high rated debt.
Harry, I expect it will be as in China. After the men in the black suits visit you, you no longer express publicly any concerns about the stability of the system. In fact you dig deep and write them a check for the stabilization fund (slush fund for those in power).
How interesting that China’s blue chip stocks are apparently into bull market territory… that in spite of howls of bad economic numbers coming out of the country….
Gravity has been defied… once again…. do not fight the central banks… they will bury you under a deluge of unlimited money…
The global economy cannot be micro managed… too many moving parts… kinda like trying to water a 10,000 hectare farm with an eye dropper
QE allows the Elders to macro manage quite easily though — kinda like
http://irridan.com/wp-content/uploads/2011/11/farm-background-irrigation-system-940×455.jpg
BUY WAR BONDS!
The problem is that we have a supply glut, due to lack of affordability of end products using commodities. No one thinks that it is a national imperative to prop up companies contributing to the supply glut.
Not everyone who’s dependent upon a car to get to their jobs has any other option.
Many people will be left without a way to get to work, get food etc. That’s why we need to ration fuel now, cut out the waste, no fuel for lawn care, dirt blowers, law mowers, large ego 4X4 trucks, recreational vehicles etc. We must make very steep cuts in our use of fossil fuels.
Some people live out in the boonies by choice, now they will have to leave their homes & try to find something in town. Lot’s of luck with that! And it won’t be affordable for most people.
Governments will need to step in and build more affordable housing in towns & cities, move businesses that sprawl along roads, into towns into affordable business structures.
I expect most suburbs will have to be abandoned as they are too isolated from jobs & resources.
People are not going to be happy with having to live in condominiums or apartments in high rises but the days of the individual home on it’s own lot are numbered, there are too many people.
With more jobs being taken over by slave labor or machines, the numbers of obsessive shoppers will dwindle, which cuts demand, which cuts prices which cuts jobs for resource extractors & manufacturers resulting is even less demand.
So here we are today, circling the economic drain, there will be no “recovery”.
I don’t hear any cries for propping up the fracking industry (except perhaps, looking the other way on loans).
It surprises me when the banks look the other way, when there are clear problems with the oil and gas industry. http://www.oilgasdaily.com/reports/Day_Of_Reckoning_For_U_S__Shale_Will_Have_To_Wait_999.html
I had seen similar things happen in the insurance industry, and in the 2008 financial crash, so I shouldn’t be surprised.
I was also a little surprised that it doesn’t matter how cheap an energy source is to produce, (for example cheap coal), its price drops just as badly when there are credit problems. I had seen this pattern in 2008 when I wrote for The Oil Drum, too. http://www.theoildrum.com/node/4805 Furthermore, “Going backwards” works just as badly for low priced resources as high priced energy resources–the system is expecting the full amount of energy, and can’t do without it. Thus, the first bankruptcies we are seeing is in the coal industry, more so than in the oil industry. With all of the talk about EROEI, I had thought that high EROEI might be somewhat protective, but it doesn’t really matter at all. Once the system encounters problems, all parts of the system seem to be hit pretty much equally hard.
Alcoa Inc.’s latest aluminum-making cutback is signaling the end of the iconic American industry.
More than 50 percent of producers globally lose money
http://www.bloomberg.com/news/articles/2015-11-03/when-a-127-year-old-u-s-industry-collapses-under-china-s-weight
High energy input industry collapses, no surprise. Fast it would be interesting to rank industries by the intensity of energy use and see how they are faring.
The aluminum factory in up state New York is shutting down. In turn one of three nuclear electric plants is shutting down.
Base industry deflation, human consumption strong inflation. Base industry declining production and declining consumption. What about human consumption? Dollar wise with dodgy inflation numbers no decline. Actual physical amount wise??? I am willing to bet when all the tricks like less content in a box or 15% water in chicken (used to be 5%) are backed out there is a decline in human consumption.
Aluminum is a big user of electricity. A cutback in aluminum production is a cutback in electricity usage.
Iceland have a large aluminium smelting plant using their cheap geothermal energy from their volcanic activity. As there are only around 330,000 people living there energy demand isn’t very high and all this excess energy is useful for them.
Must be good to be in this position – I can’t see many other countries having such low populations relative to their energy needs. Iceland is also talking about having an interconnector with the north of Scotland to export any excess electricity production to anywhere in Europe that needs it and is willing to pay for it.
Whether this interconnector ever gets built is another matter.
Icelanders will be able to boil eggs in pots using geothermal heat — but that’s about it…
Because just like hydro dams — there will be now way to keeps something like this operational for very long…. (or the grid…)
http://www.ucsusa.org/sites/default/files/images/2014/12/energy-renewable-geothermal-plant-nesjavellir-power-station-iceland.jpg
The oilfields remain, but the last wheat farms have just disappeared to save the aquifers supplying them. For the first time, Saudi Arabia will rely almost completely on wheat imports in 2016, a reversal from its policy of self-sufficiency. It will become a full member of the club of Middle Eastern nations that, according to the commodity-trade adage, “sell hydrocarbons to buy carbohydrates.”
http://www.bloomberg.com/news/articles/2015-11-04/saudi-wells-running-dry-of-water-spell-end-of-desert-wheat
Technoutopia is falling. This is madness. They go, we all go.
KSA exports about 2.5 billion barrels per year. It cost about 35 billion dollars per year for food. At 50 $/barrel they need to devote 28% of their income to food. There is a rule of thumb in US poor policy that one third of income should go for food, one third for rent, and one third for everything else. Looks like KSA is in line with poor folk policy.
This is race to the bottom. We’ll see who implodes first and there are many candidates.
MiddleEast is special in terms of oil supply. US+EU are planning intervention there IMO. Within 2-3 years.
They’ve already intervened and it’s gotten them nowhere.
There was no other puprose than keeping BAU working. This time is much harder. Law of diminishing returns. House of cards is falling.
I remember reading earlier that Saudi Arabia was phasing out its wheat farms. I am sure there are a lot of investments that have to be pretty much written off.
The Saudis are set to import 100% of their wheat…. due to aquifer depletion….
They are slightly ahead of California, India and China in that respect….
As the world turns…
Skopos Financial, a deep-subprime auto finance company based in Irving, Texas, is packaging $154 million of loans made to borrowers with weak credit — and some without a credit score — into bonds rated investment grade.
More than three-quarters of the loans backing the deal are to borrowers with credit scores under 600 and another 14 percent have no credit score at all, according to a pre-sale report by Kroll Bond Rating Agency. That would place the bulk of the obligations well below what’s typically considered good credit.
http://www.zerohedge.com/news/2015-11-03/subprime-auto-goes-full-retard-lender-sells-154-million-abs-deal-backed-loans-borrow
And here we have a peak into the future… see the veg garden…
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/11/20151103_cap1.jpg
http://shanghaiist.com/upload/2015/11/shanzhai-capitol-building-5.jpg
http://www.zerohedge.com/news/2015-11-03/chinas-ghost-capitol-building-has-been-overrun-vagrant-food-vendors
Yeah I read that China story on ZH earlier yesterday and had a chuckle. That’s symbolic of China’s future.
This is how the financial sector seems to make its money–taking something without value and “sort of” creating value from it. If you make enough optimistic assumptions, the way they are packaging the auto loans sort of works. And it allows even more subprime auto loans to be made.
Classic:
Good video! Having lots of economic growth makes it easier to create the myth that house prices will rise forever, everyone will find it easy to find a job forever, loan losses are a thing of the past.
What will happen in money markets when Middle East oil producers continue to cash their external reserves in order to finance their budget deficits.
30/10/2015
Iraq needs 1.3 mb/d additional oil exports and $70 oil to balance budget
http://crudeoilpeak.info/iraq-needs-1-3-mbd-additional-oil-exports-and-us-70-oil-to-balance-budget
18/10/2015
Saudi Arabia’s fiscal break-even oil price to be around $US 100 mark for the foreseeable future
http://crudeoilpeak.info/saudi-arabias-fiscal-break-even-oil-price-to-be-around-us-100-mark-for-the-foreseeable-future
You have an interesting article about Iraq there. I read the Saudi Arabia one earlier.
Nearly all of the exporting countries have difficulty if oil prices remain low. I am convinced that the end comes through low prices, not high. This is not a possibility that many forecasters ever considered.
What would be the impact of Saudi Arabia burning through its cash reserves and taking on debt? I guess that would depend on what currency those reserves are in. Presumably a great deal is in American dollars. If that’s the case, there might be some inflationary pressure on the US dollar. But are the Saudi US dollar denominated reserves, and the amount of debt they might take on, significant enough to cause noticeable inflation?
This point may be clear to everyone else but it’s something I’ve been pondering about, along with the rest of this article’s contents. Saudi Arabia is being blamed for the current oil price. ‘They’ve reduced the price to destroy the fracking industry’. Gail, in your article this isn’t mentioned anywhere. I assume it’s because that’s not the real reason, but I’d still appreciate some clarity on this.
Alisa, the figures do not bear this narrative out, even though it has gained some currency in the press. Saudi did not increase production prior to the fall in prices. In fact it was in the US where there was a small production spurt.
The Elders are the men who own the Fed – print the reserve currency — control the media — and essentially run the world.
They are supposedly Jewish — but surely they are too smart to believe in that a man in the sky who demands his ass be kissed on a regular basis
Essentially they are a group of men with a common interest — power and wealth.
The Protocols of the Learned Elders of Zion is a document which should be read by all.
No other single document provides us with such a clear understanding of why the world is gradually moving towards a One World Government, controlled by an irreproachable hidden hand. In The Protocols, we are given clear insights as to why so many incomprehensible political decisions are made in both local, national and international politics, which seem to continually work against the favor of the masses and in favor of the vested interests of the banking/industrial cartel — the global power elite.
The average person normally reacts with outrage and horror today at the very suggestion that there may be a conspiracy as grand as The Protocols. But the average person has absolutely no information on which to base his or her opinion. The reaction to exposure of this ancient conspiracy is merely a pre-programmed Pavlovian reaction, created and instilled by the very perpetrators of the same ancient conspiracy. And today, very few will dare speak above a whisper of that all-encompassing oppression of mankind.
It is extremely rare today to find information about the ancient conspiracy, due to the mass censorship of the printed word, and the unwillingness of the general population to consider as a possibility something which they have been brought up since birth to see as outrageous and ridiculous. Each generation is born into a world of greater and greater censorship and illusion.
As you read further, please try to keep an open mind, and realize that your initial reaction has been conditioned over years of newspaper and television exposure. What you’re about to read will shock you.
History of the Protocols of the Learned Elders of Zion
In the interests of keeping this explanation brief, I have provided highlights only in the chequered and colorful history of The Protocols. For a more detailed discussion, please refer to the book Waters Flowing Eastward by Mrs L. Fry.
In 1884 the daughter of a Russian general, Justine Glinka, was in Paris obtaining secret political information to be communicated back to Russia. She employed a Jewish assistant, Joseph Schorst, a member of the Miz-raim Lodge in Paris. Schorst offered to obtain for her a document of great importance to Russia, on payment of 2,500 francs.
She forwarded the French original, accompanied by a Russian translation, to the Tsar in St Petersburg, but it was suppressed by those under obligation to wealthy Jews. The Tsar never received it, and Glinka was eventually banished to her estate in Orel.
Glinka gave a copy to Alexis Sukhotin, who showed the document to two friends, Stepanov and Professor Sergius A. Nilus; the former had it printed and circulated privately in 1897; the second, Nilus, published it for the first time in Russia in 1901, in a book entitled The Great Within the Small. At about the same time, a friend of Nilus, G. Butmi, brought a copy to England, where it was apparently deposited in the British Museum on August 10, 1906. [Ed: The British Museum deny ever having received a copy of the Protocols.]
Meantime, through Jewish members of the Russian police, minutes of the proceedings of the Basle congress in 1897 had been obtained and these were found to correspond with the Protocols.
In January 1917, Nilus prepared a second edition, revised and documented, for publication. But before it could be put on the market, the revolution of March 1917 had taken place, and Kerenskii, who had succeeded to power, ordered the whole edition of Nilus’ book to be destroyed. In 1924, Prof. Nilus was arrested by the Cheka in Kiev, imprisoned, and tortured; he was told by the Jewish president of the court, that this treatment was meted out to him for “having done them incalculable harm in publishing the Protocols”. Released for a few months, he was again led before the GPU (Cheka), this time in Moscow and confined. Set at liberty in February 1926, he died in exile in the district of Vladimir on January 13, 1929.
A few copies of Nilus’s second edition were saved and sent to other countries where they were published: in Germany, by Gottfreid zum Beek (1919); in England, by The Britons (1920); in France, by Mgr. Jouin in La Revue Internationale des Societes Secretes, and by Urbain Gohier in La Vieille France; in the United States, by Small, Maynard & Co. (Boston 1920), and by The Beckwith Co. (New York 1921). Later, editions appeared in Italian, Russian, Arabic, and even in Japanese.
The Protocols gained widespread recognition upon their translation into English, in 1920. They soon became notorious. Esteemed newspapers such as The Times and The Morning Post (whose Moscow correspondent Victor E. Marsden was responsible in 1921 for the translation used in this document) covered the story in numerous articles, much to the chagrin of world Jewry, who immediately began the propaganda bandwagon rolling. They not only denied that the Protocols were a Jewish plot, but also that there was any plot whatsoever. The latter was quite clearly false to all educated men and women of the time. “Probably so much money and energy were never before in history expended on the effort to suppress a single document.” The period of 1920 “marks the end of the time when the Jewish question could be impartially openly discussed in public.” (Douglas Reed — “The Controversy of Zion”).
The Protocols of Zion – Fraud or Genuine?
There have been many attempts to discount The Protocols as a fraud, and the fact remains that there is no documentary proof that the Protocols of the Elders of Zion are what they say they are. Allegations of forgery and fraud have dogged their public history. However, despite many opinions to the contrary, the documents have never been categorically proved to be fraudulent. Besides, why would an anonymous document be forged? See The Protocols – a Neocon Manifesto. (with thanks to an anonymous emailer, identified only as ‘An American’).
The fact also remains that since the apparent publication, world events have unfolded exactly according to their description – surely this should be proof enough that a plan such as the Protocols exists?
M. Henry Ford, in an interview published in the New York World, February 17, 1921, put the case for the Protocols tersely and convincingly thus:
“The only statement I care to make about the PROTOCOLS is that they fit in with what is going on. They are sixteen years old, and they have fitted the world situation up to this time. THEY FIT IT NOW.”
Skip to this point which deals with how to gain control of the media and how to leverage this control 1:34:40 https://www.youtube.com/watch?v=Ig5sTehZqZA
Remember when listening to this … the plan was hatched over 100 years ago…. I suspect that you’ll conclude that based on what has happened since… everything has gone pretty much according to the original brilliant plan.
Then you can watch the rest and read about how the Elders planned to control the money supply — how and why they pressed for ‘democracy’ — how and why they purposely dumbed down the masses….
This is also quite good http://www.rense.com/general32/elders.htm
“I care not what puppet is placed on the throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire. And I control the money supply.” Nathan Rothschild
“Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. … Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.” — Mackenzie King, Canadian Prime Minister 1935-1948.
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” – Woodrow Wilson, after signing the Federal Reserve into existence
“Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive that they had better not speak above their breath when they speak in condemnation of it.” ― Woodrow Wilson
Wikipedia has a well documented article regarding how the hoax (Protocols) was fabricated and circulated. The “Protocols” is most likely one of the most successful pieces of anti-semetism ever created.
I really don’t give a damn what wikipedia or the thousands of articles that litter the web say…
Why don’t you read it and make up your mind for yourself?
As I did.
FYI: I have an interest in a media company … the company once ran an award winning documentary about the nature of the Israel Palestine conflict… it painted a negative picture of Israel…
Within hours the editor received emails demanding the video be removed … these came from a very senior Jewish executive in a US multinational… she initially refused… then there was a threat to destroy the business if this was not taken down… no details of how … but media businesses need advertisers … so connect the dots… the documentary came down.
Again listen to the reading I posted — the Protocol dealing with Media control specifically…. note the strategy of taking control of all mainstream media outlets — from motion pictures to tv…. and how to deal with media outlets that do not toe the line…
You can let others tell you what to think… or you can use that thing inside your head… listen to the entire document…. then come to your own conclusions.
I am well aware of wikipedia… thanks anyways.
The Protocols are anti-sematic fiction, Hitler ran with it to further his ideals. 120 years ago they absolutely and categorically had no idea what the future held. They couldn’t predict the role of oil and the population explosion, wars, natural disasters, global warming, technological discoveries including the A-Bomb. The people quoted are fictitious as well as the events depicted. The protocols are similar to Nostradamus, they’re good for predicting the past.
The day MH17 was shot down what also happened that fateful day but went largely unreported surely not the Israeli invasion of Gaza?
Control the media narrative and you can commit unspeakable atrocities against people,why steal their land,their resources portray yourself as the victim even.
Its even better though if you control the US congress and have your defence budget subsidised by you the American taxpayer.
Yes anyone that brings forth certain topics for open discussion and evaluation is a anti semite. Paul obviously dresses up in knee high boots while polishing his luger. I know I would never read the protocols I could not bear the disgrace of even a remote association to those nazi bastards.
Jews wrote the protocols…not Nazis.
In fact they were written decades before the word Nazi was even invented. Hitler would have been a child.
I fail to see your point.
Are you perhaps trying to establish that you are extremely dogmatic? If so – then well done.
It is well known in the monetary reform movement that Hitler’s Germany escaped the debt based monetary system
http://www.webofdebt.com/articles/bankrupt-germany.php
“Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today.”
It’s an interesting to ponder what would have happened had Germany won the war or if it had been cut short with Britain accepting Hitler’s repeated peace offers. Probably other countries would have followed Germany’s example (Including the United States where Fr. Coughlin’s movement had been pushing for monetary reform) The Federal Reserve would have been abolished and banks would only have the power to lend out money already issued debt free by the US Government. The world economy (if such a thing would even exist since countries would be able to generate capital internally rather than relying on foreign investment) would probably have grown continuously but steadily without the need for frenzied growth to service old debt.
Moreover in Europe, Parliamentary democracy would have been consigned to the dustbin of history. Given the situation we face now, would this have been a bad thing? At least national leaders would be focused on the long term interest of the country instead of the next election. Nuclear power would not have been neglected in the way that it has.
It’s a moot point now but might the world have been a better place today had the axis powers won? The question may seem shocking and outrageous: “What about about the Holocaust?”
Well that’s exactly what we are facing now anyway …times 1000!
Good to see someone’s thought process is not shackled by the fear of taunts of anti-semitism….
Imagine what would happen in the US if the economy were to collapse … and a leader pointed out that the central bankers were the real power in the country … that they had hijacked democracy … and that they were to blame for the collapse….
I find the abolishing of banks and debt very appealing.
Obviously, the author’s definition of debt must be different from mine. I cannot conceive of any type of money being something other than a promise to pay in the future, which is basically debt. Sometimes this promise to pay in the future is backed by gold or silver, or some other commodity. If it is agreed that this commodity is really equivalent, and the commodity is actually available in large enough quantity, I suppose these facts would make the situation a little different. But a person cannot eat gold or silver, and it is still a promise.
Life is a Debt Bubble. You’re in debt the moment you are born, and you only get out of debt the moment you die.
On other fronts, we got up the RESULTS of the Diner Collapse Personality Profiles Survey today. Most Doomers are White Males from North America, well educated with High IQs. Full results can be found here:
http://www.doomsteaddiner.net/blog/2015/11/03/collapse-personality-profiles-results/
You can also still take the tests and survey for another data collection around New Year’s.
RE
That makes very interesting reading, RE – good stuff. I didn’t get round to taking the test but I am INFJ.
You gotta submit to the survey to get counted. Responses continue to come in, now up to 141 from the 121 I compiled the initial results on. More Geniuses, Doctors and Females have dropped in. lol.
RE
LOL now if some “genius” lawyers drop in your job will be complete.
Standard Chartered’s Bad Loans Reveal Cracks in Asian Economies
As China’s growth sputters, the troubles at Standard Chartered Plc are another bad omen for what were once Asian economic darlings.
The bank, which generates most of its income in the region, had gambled on success in emerging markets such as India, which instead saddled the lender with delinquent loans. As a result, the company which opened its offices in Mumbai under Queen Victoria is now axing 15,000 jobs and is asking investors for $5.1 billion.
“Standard Chartered are Asian specialists and are in all the main markets in the region, so in looking at them you can get a good sense for credit direction and lending appetite,” said Mark Holman, chief executive officer at TwentyFour Asset Management in London, which oversees 5 billion pounds ($7.7 billion).
For now, Asia still has fewer corporate debt defaults than other developing countries, but rising leverage from India to Indonesia point to the risk of further nonpayments. More stringent conditions from banks like Standard Chartered are slowing loan growth in the region, exposing more fissures in the corporate credit market.
“The picture that emerges is that Asian credit cycles are far more advanced than those in Europe and loan losses and impairment charges are mounting,” Holman said.
Tea leaves
Like other developing nations, Asian companies took advantage of low interest rates overseas to go on a borrowing binge. The move is backfiring as slower economic growth makes it more difficult to pay back the obligations.
More http://www.bloomberg.com/news/articles/2015-11-04/standard-chartered-s-bad-loans-reveal-cracks-in-asian-economies
Funny what falls when you kick the tires…
The article mentions two different coal companies that went bankrupt–one in India; one in China. I think coal mines may be one of the big areas with near-term failures–prices are very low. They have been lower, longer than oil prices.
Gail,
Thanks for another thorough and insightful article that really explains the situation we face today to even a complete new comer to your blog (though I am not). I have long been convinced of the reality of Peak Oil, and must add that it merely foretells the peak production of oil but not really the exact mechanics of how that will play out. Yes most adherents believe it will be the result of scarcity and high oil prices, but it can also be due to future shortages because of the dramatic cutbacks in investments we see today owing to low prices. You are one of the very few commentators I have come across so far that connects the failing financial system with our finite world of physical limits, while most Peak Oil ‘advocates’ seem to have kept silent since literature on the topic reached a height about ten years ago I reckon.
As you pointed out we are now sitting on the edge waiting for what happens next, and personally I am amazed how long we have managed to avoid the plummet. Financial asset values remain at high levels while the economy continues chugging along despite China’s slow down. The specter of debt defaults and mass unemployment have not yet come to pass. How long before the other shoe drops? Inefficiencies started back in the 1970s as you noted, but I very much doubt we have another 40 years to stave off the inevitable. Japan has been in a state of stagnation since the 90s but that is not quite the same as ‘collapse’. Could it be the same for the world, a long descent as John Michael Greer puts it, or a rapid unraveling as many others predict?
Re: Japan….
Japan has survived this long only because it has been surrounded by a relatively prosperous global economy …. it could afford to do what it has done for these decades because it was an export powerhouse…
Now everyone is Japan…
It is hard to imaging that the current situation could go on for more than 6 months or a year without a big problem becoming evident. I suppose that TPTB might be able to keep that big problem from collapsing anything too major for another two or three years, by changing the rules regarding defaults on loans, giving money to individual consumers, and other techniques designed to keep the system going.
I have been surprised with the creativity of those keeping the financial system afloat so far. We can all hope that they will be even more creative this time around.
“We can all hope that they will be even more creative this time around.”
Oh my! I rarely find a reason to disagree, but these be fightin’ words!
The fact is that the more they successfully kick the can down the road the worse things will be when they finally fail. You discount AGW, but it is real and if a significant beginning to collapse does not happen soon, it will cause our extinction. (FastEddie’s fantasies about depleted uranium not withstanding.)
Indeed, we are stuck between a rock and a hard place.
As regards AGW, I have to side with commentators that see it as a New World religion of sorts. There is evidence that it was preconceived as such and it most certainly has evolved into a belief system based on sacred models and books.
“Every knee shall bow” has practically become the mantra of this new world religion. We all know about the many professionals around the world that have been hounded for merely questioning the validity of these models and prognostications. Sectors are pushing to make doubting the models a punishable crime. Much like Holocaust denial in Europe. Hysterical voices in high places call for the execution of climate change deniers.
Of course, there is no such thing as a climate change denier. Everyone with a rudimentary understanding of climatology knows that the climate has always changed exibiting peaks and troughs with long and short cycles mostly driven by the huge yellow fusion reactor in the sky. But the popular terminolgy had to be changed just in case from GW to CC just as the important inquisition of deniers had to remain.
By the way, why does climate change drastically on other planets in our solar system too? Is it due to overpopulation of Martians burning coal and driving SUVs?
Gail did mention somewhere that the models used worldwide were preloaded with data that predict exponential growth in fossil fuel use throughout the rest of the century. Leaving aside all talk of economic collapse for a moment, who in their right mind would agree with such a prediction? The also exponential expansion of renewables (if they were viable) and Gen III and IV nuclear would do away with the need to burn coal. And during the same period, oil would be rapidly replaced by alternatives. We already have initiatives underway to suck CO2 out of the atmosphere to produce fuel and other byproducts.
Another thing to consider is that currently the soot from the power plants and the increasing number of contrails from passenger jets actually create a reflective barrier (cloud cover) that keeps further warming in check. Remove that and you’ve got an even bigger job on your hands as temps will increase. The irony is such that geoengineers promote large scale projects to “pollute” the atmosphere as a control mechanism keeping temps in check!
I’m not saying that any of this is not happening or that it won’t cause problems going forward. I DO think it’s the epitome of hubris to think that humans can regulate the planetary climate as if it were a thermostat within the sliver of time that they have allocated to prevent climate catastrophe. We have survived ice ages and exceptionally warm periods in the past through mass migration. And although devastating, that’s how we would handle it now. We have an erroneous view that everything must stay as it is now based on a blip in our history.
Curiously, Putin has openly confessed his membership of the denial club. He says that climate change hysteria was developed to rob Russia of her dominant position as a major resource exporter. You can think whatever you want about Putin and Russian politics but a bit of warming would make Siberia the bread basket of the world!
Javier, have it your way. You win. AGW is not happening, and even if it was, it would be good for everyone, and even if it isn’t good for everyone, it is a long way off. You win the debate!
Or maybe, this guy is correct, or maybe just close to correct.
http://guymcpherson.com/2014/01/climate-change-summary-and-update/
Meanwhile, I don’t debate climatology with non-climatologists anymore.
http://witsendnj.blogspot.com/2014/09/five-stages-of-awareness-or-is-it-six.html
Firstly, thanks for the links. At least you’re doing what you think is right. Good for you.
The things is… I reached Stage 6: Acceptance and just LETTING GO… a looong time ago for reasons I won’t go into here. So I’ve made my peace with destiny and I’m not going to spend one more second fretting about what may come. The reason I’m here is curiosity and no matter how dark the subject gets I always come away having learned something valuable from exceptional minds. That’s good enough for me.
Does that mean that the information can be utilised in a practical way? Possibly, but personally, there’s nothing more that I will do to prepare for change, whatever that change may consist of i.e. economic collapse or abrupt climate change.
On that note, people have been yelling from the rooftops about impending disaster for quite some time now. After the initial knee-jerk response, quite naturally, the exitement wore off and people went about their business. They recycled, they changed their light bulbs and payed their carbon taxes.
The thing is, if sudden climate change came knocking at your door (by the way, it doesn’t happen like in The Day After Tomorrow) we’ve already exceeded the limits beyond where you could do anything about it. So, if you managed to stay alive while the ground around you turns to desert after a year or two, you would probably have to move to a more habitable region. And if global climate is so out of whack that the entire biosphere becomes uninhabitable, then that would also be a good time to reach Stage 6: Acceptance and just LETTING GO.
In other words, what can you as an individual realistically do about it?
By the way, I didn’t say that AGW wasn’t happening. Just that it’s become the No.1 way to get your grant funded or your paper published. Academia is as corrupt as any other business. My point is that even if we are contributing somewhat to all other inputs including solar activity, what can we realistically do about it within the time stipulated by abrupt change advocates?
As I said, we are already promoting global dimming via various means. If we do indeed suffer systemic collapse then even that goes and the survivors will have to make do without the IPCC and other such malarchy.
From the article… “We are in the midst of abrupt climate change.”
To which my response is… I will patiently monitor the sea level from my window and check the soil once a year for signs of desertification. If I spot a Tsunami coming my way, I’ll bend down and kiss my rear end goodbye!
Again, what else can you realistically do?
I never believed for a second that humanity was anything more than a smarter than average termite hill builder. We were either going to make it to the next level by transitioning to a more resilient substrate – able to survive whatever nature decided to throw at us – or we would perish as the termite hills perish once the bulldozers move in to build some condos.
Let’s assume it is happening….
What is the solution?
Fast Eddy says: “Let’s assume it is happening …. What is the solution?
As a person with a scientific background, “belief” in AGW was a natural outcome when I started studying the phenomenon. The latest paper by James Hanson concludes that the only way to prevent extinction level warming – 4 degrees C of warming – is to reduce “CO2 emissions” by 10% per year until it is zero starting now. Now, not in 2030, now.
(Note that his euphemism “CO2 emissions” really should be GDP. The only way to reduce CO2 emissions is to reduce GDP as Gail and others have shown repeatedly. Obviously, making a bunch of windmills and solar panels will create more CO2, not less (even if the EOREI was high enough which it isn’t) and so the mainstream activists are wasting their time.
So, I come hear for hope. If Gail is correct, and I see no major flaw in her logic, we can expect major reductions in GDP/emissions starting within 6 months. If the economic downturn begins soon enough, and is steep enough me and mine might (after a decade of preparation) survive it. Better than that, most of the big mammals now extant might survive.
Keep the good news coming Gail it really helps.
I hadn’t thought of collapse of civilization as having a silver lining….
Come to think of it — I still don’t.
China needs to get those coal fired power plants on line more quickly —– I am listening for the roar of the coal monster …
Vive le BAU!
Ah, Fast Eddie speaks the truth … and at the same time explains why our species is toast unless Gail is correct.
Peace, Out.
Javier, have it your way. You win. AGW is not happening, and even if it was, it would be good for everyone, and even if it isn’t good for everyone, it is a long way off. You win the debate!
Pintada, I don’t think Javier is attempting to win the debate. He’s simply stating his views and not aggressively or adversarially. You are free to agree, disagree, ask questions, explore ramifications, etc., and in the process both participants and anybody else following the discussion can benefit from learning something. Some of them may change their own views as a result of what they read.
Meanwhile, I don’t debate climatology with non-climatologists anymore.
How does this work in practice? Would you debate climatology with climatologists who disagreed with AGW or who considered the issue over-hyped? Or only with those who were in basic agreement with your stance? Would you ask for proof of a person’s climatology credentials before agreeing to chat about the subject with them? And do you reserve the right to decide who is a bone-fide climatologist and who isn’t?
Climatology isn’t an old established stand-alone science like physics, chemistry, geology, meteorology or medicine, is it? As an organized institutionalized field it is a relative late-comer as well as being a hybrid that draws largely on other fields for its substance. The man regarded as “the father of modern climatology” Reid Bryson and “the father of modern historical climatology” Hubert Lamb both came into the field from meteorology and both were skeptical of catastrophic AGW. Would you have welcomed the chance to debate with them?
Even today most of the people who are prominent promoters of catastrophic AGW in the media are not climatology graduates and many are not working climatologists, are they? Most colleges still don’t offer climatology degrees, and most people who work in the capacity of climatologists do not hold such qualifications, so one logical way to define a climatologist would be as anyone one who studies climate, just as anyone who studies or practices astronomy or chemistry may be called an astronomer or chemist. Those who do it for a living are known as professionals and those who do it as a hobby are known as amateurs; and in many cases the amateurs have a deeper, wider, and more well-rounded grasp of their subject than the professionals do.
We all have the right not to engage in debate, but once we start refusing to debate specific people on the basis that they are not qualified by virtue of being excluded from a designated category, we should realize that are engaged in building barriers and we should understand why we are doing this. It could be that we’ve had unpleasant experiences in such debates when we were unable to agree on basic facts and on the ground rules for talking to each other, and we want to avoid getting upset or wasting our time fruitlessly in debate as a “contact sport”.. Or it could be that we are happy with our views and don’t wish to be exposed to any ideas that challenge them. Isaac Newton loved physics and Charles Darwin loved natural history, but neither of them enjoyed publishing their ideas or debating their critics. They certainly needed their barriers, and they are not to be faulted for that.
95 to 99% of scientists say Climate Change is happening and humans are to blame. http://climate.nasa.gov/scientific-consensus/
In comparison, if 95% of airplane engineers would say “Don´t fly with the 787 Dreamliner, it´s lethal and will crash” Would there be any kind of discussion about is there, or is there not, a problem with the 787? I think not. The whole fleet would be grounded untill the changes were made, no matter the cost.
Unfortunately the millions poured in by Exxon and Koch brothers during the decades to the think tanks etc. , have muddled the conversation, just like they wanted. http://www.theguardian.com/business/2015/oct/16/exxonmobil-congress-climate-change-federal-investigation
If in doubt, check empirical evidence, was the earth warmer in 2015, then at anytime during our species history? Are species moving in droves to adapt to the changing climate? Are ice sheets disappearing in the Antarctic and Arctic? http://nsidc.org/arcticseaicenews/
If in doubt, check emprical evidence, that doesn´t change according to millions poured in misinformation, disinformation and propaganda.
But despite Climate Change being a reality, I doubt there will be any global agreements in Paris 2015 COP. The economy goes first, if the economy tanks, there goes the BAU. I think we will be taking any amount of BAU months, no matter how badly we f-ck up the planet during those months.
“Exxon and Koch brothers”
Here’s another instance where I change my mind. I used to think the Koch brothers were villains right up there with Francisco Scaramanga….
Now I see them as heroes — because…
1. There is no alternative to burning fossil fuels that does not involve total collapse of BAU — the starvation of billions — the release of massive amounts of radiation from spent fuel ponds. If someone can point out a solution then I might change my mind back
2. AGW is irrelevant because BAU is going to collapse long before AGW gets us…. discussing AGW is like screaming at an 15 year old Palestinian youth to stop smoking tobacco at the moment his arms and legs have been blown off by an Israeli drone because he threw a stone at a tank….
This conversation adds to my clarity of intention. I’m no longer afraid to suggest that mining be brought back to my coal mining community. Dirty old fashioned coal mining. Yes, we should try to compensate for the pollution in a hundred different ways. We are more aware of the hazards than ever before, but getting energy from a local source seems smart.
Fast Eddy, the question I was trying to clarify was, is there or is there not, something called climate change, global warming or AGW.
As I said, check the glaciers and ice sheets, if in doubt.
But, I wholeheartedly agree that the entire point is mute, when 7+ billion are about to starve to death.
No, as far as I know, there is not any kind of way of transitioning from a Democratic, Capitalistic, Market Economy in to a Steady State economy. But, thats pretty much the point. I don´t think we are living in a democracy any longer. There is no point in making laws, if you don´t have the money to back them up. My point, no matter what laws or what legislation we have, or would want, if we don´t have the money to implement them. When the availability of money rules, and not laws, I´m not entirely sure what to call it, but its not a democracy any more.
With the closing of stock markets (for short or longer periods of time) and the constitutions and legislations being void, and price manipulation on a grand scale (like the mystery buyer from Belgium who has been stockpiling US treasurys). That, no longer is a democratic, capitalistic, market economy, therefore the organization of work parties become a possibility and a transition, a theoretical possibility. Fast Eddy, I don´t believe that a transition to be an actual possibilty, going beyond theory. I believe the global economy is in its Wile E. Coyote moment, and we all know whats next.
Tim Groves:
As Tim says, “unpleasant experiences in such debates when we were unable to agree on basic facts and on the ground rules for talking to each other, and we want to avoid getting upset or wasting our time fruitlessly in debate as a “contact sport””.
And as you implied, many commenters think that they are the ultimate expert on the subject, but usually, they know so little about the basics (basic chemical or physical principals), that it is impossible to even begin to explain the issues. Worse, there are numerous well paid liars on line that purposefully use any person that is naive enough to debate to post disinformation.
Tim asks, “most of the people who are prominent promoters of catastrophic AGW in the media are not climatology graduates and many are not working climatologists, are they?”
No. But why is that? Is it possible that Jim Inhofe, Exxon, and others have made the academic environment so hostile that the people who depend on a teaching or research job to make a living are afraid to speak out? Yes. Call someone before a senate committee and smear their reputation because they photographed a starving polar bear and the next guy will think twice. If you want to encourage actual qualified people to share their findings, and their opinions please donate here:
http://climatesciencedefensefund.org
Great article/presentation as usual Gail. I do believe a couple of other slides that show the amount of debt held by central banks/FED-like entities and how it has grown recently would be useful and one showing the overall decline in quality of living available to Western or first world citizens is also needed. So much of the current debt and debt payments are never trickling down to the masses but staying afloat at the top where it doesn’t effect the commodities prices in the form of inflation. What does make it’s way down acts as a tax on the lower tiers economically as we all know but what exactly is the breaking point? Seems to me this breaking point is just as important as the point at which extraction costs exceed sales price.
What makes this whole thing different this time is that the actual weight of the debt is manipulated so only part of it actually rests on the base. This makes the numbers look far worse than how they are felt and creates an artificial sling at the top that can afford to keep the debt out of circulation for well forever if they wish to. Never before has there been an entity able to do that in financial matters.
The post left out a few slides related to declining wages–less employment. It was getting to long. I didn’t think about including central bank balance sheet balances–it starts getting hard to explain its effects. I am not even sure we quite understand its effects, as Japan and others reach limits on what they can buy, without completely messing up the liquidity of markets.
There are a lot of breaking points on the system–for example, when derivatives create too much of a problem for the system, besides when banks have a problem, and when international trade has a problem.
I noticed that US oil consumption seems to be way down for September. http://www.zerohedge.com/news/2015-11-04/us-trade-deficit-narrows-15-smallest-feb-2015-petroleum-imports-collapse http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_3.pdf This is not in keeping with the story, “Low oil prices will bring about a surge in consumption.” There was a surge in June, July and August, but that has disappeared in September.
Earlier plunges correlate with periods of recession…. stimulus kicked in to fix the problems….
What’s the magic trick going to be now?
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/10/20151103_trade_yoy.jpg
Since Dolph and I agree, I think his analysis is brilliant. However, let me try to add some value to his bullet point list by reversing the analysis. To wit, if you had a clean slate, and knowing what we know, how would you design a world to look in 100 years that kept the engines of science, technology and the arts intact for the 1%?
Well, first and foremost, you’d stop feeding prime cuts to the livestock and go back to slops. Since the beginning of historical time up until 150 years ago, peasants were purposely keep hungry, malnourished and compliant to serve their superiors and rulers. How it came about that we developed a consumer society where the masses enjoy untoward luxury, but are rapidly consuming the core feed stock – fossil fuels – of a technological aristocracy, is a historical mistake.
So, let us assume the focus would be to get the global population down to 500m, with only 1% (5m) being part of the technological elite. Utilizing genetic engineering, the remaining 99% could be reduced to appropriate IQ levels to continue operating the basic machinery of industrial civilization, most importantly oil extraction & electrical generating plants. (To both mfg super computers for the R&D facilities and keep them running.)
With the 99% once again reduced to a marginal existence, existing reserves could last long enough until new technologies were developed to either increase solar power acquisition, or simply reduce human consciousness to certain DNA sequences on germs that could be aimed and launched towards thousands/millions of planets with a self-ordering boot strap mechanism deployed if organic environments were realized.
So, to summarize, if you can envision this kind of end-goal, how would you get there? That is, what steps would you initially take? Well, let’s see if any pieces of the solution to the puzzle are being deployed:
– Eliminate vestiges of those with institutional memory of higher standards of living and continuing expectations of further entitlement through wholesale population substitution. CHECK
– Move away from the finance/consumption model by de-coupling market mechanisms – such as price discovery – in money, debt, share prices, corporate profits, taxes, governmental budgets, etc. CHECK
You see how the pieces fit together? All along, while people complained that the Bernak didn’t know what he was doing, that the PTB were clueless, I’ve warned that they are actually many, many steps ahead. You see how this all fits? We all know the fossil fuel banking/consumption model is dead. But does that mean the PTB fold up their tent and skedaddle? Why (even if it’s Paul’s fantasy)?
No, it just alters certain facets of the game. But my message has been clear all along – why not front-run what is obviously occurring? How much clearer can it be: they are going to kill the debt. Money will simply be a token to reward security forces. Propaganda will be ratcheted up until everyone is brainwashed like the Swedes to act against their own self interest. For example, it will be considered greedy & selfish to have more than 1 bowl of rice per day.
We need to be pragmatic here – there isn’t any that the power down is going to be equitable & fair. Anyone with a clue is already implementing plans to make sure some semblance of civilization continues. The smart operators will recognize what is happening and hedge accordingly.
“So, let us assume the focus would be to get the global population down to 500m, with only 1% (5m) being part of the technological elite. Utilizing genetic engineering, the remaining 99% could be reduced to appropriate IQ levels to continue operating the basic machinery of industrial civilization, most importantly oil extraction & electrical generating plants. (To both mfg super computers for the R&D facilities and keep them running.)
With the 99% once again reduced to a marginal existence, existing reserves could last long enough until new technologies were developed to either increase solar power acquisition, or simply reduce human consciousness to certain DNA sequences on germs that could be aimed and launched towards thousands/millions of planets with a self-ordering boot strap mechanism deployed if organic environments were realized.”
B9 … your posts are increasingly falling out of touch with reality …
I can appreciate that as the end game approaches — and it is approaching — the stress levels are increasing… along with the sense of melancholy…
But the above is just not going to happen…. unless Scotty is up there waiting to beam up the chosen ones….
LOL. Me – retired early. You – still working.
My spidey senses are really tingling these days; the old entrepreneurial instinct is fully engaged. The most important thing I learned at an early age was: if you think you have a good idea, dozens of others got there first, and a handful have already been financed. So the key was to find the marginal difference (ie gap analysis), and never assume you were the most brilliant guy to come up with an idea.
This is all so obvious to me. While it may seem esoteric or even outlandish to you – after all, your posts are completely wed to conventional economic thinking – I’m getting the same feeling I had when the ‘net exploded and it was land rush business to fill certain niches.
Your position is the PTB are going down with the ship. Mine is that the last 150 years of the finance/consumption model was merely a convenience; one to be utilized since it was the path of least resistance. But the PTB are the PTB for reason – when the times get tough, they alone are willing to do the dirty work, while the idealists & philosophers debate ethics, morality & justice.
Since I’m a nice guy at heart, let’s try and go through this step by step. You seem to think the current finance/consumption model is so entrenched, that no other alternative exists? That is, after 10k, 50k, 100k years, the PTB just throw up their hands and say, you win? If not, then what is the solution? The solution is exactly how I outlined it. Since the solution I outlined is the most logical answer, then how could one fail to not take advantage of such an obvious opportunity?
B9 — I am not working — at least I don’t call it work…. and I have not worked for over 10 years…
What I do is fiddle around with ideas that I pass along to managers who implement them…
I find that doing nothing degrades my creativity. I become lazy. Less sharp. Soft. I much prefer to remain engaged.
How does it affect you …. this doing nothing but sitting at the beach watching sunsets?
“You seem to think the current finance/consumption model is so entrenched, that no other alternative exists?”
Of course there are alternatives — if we pretend that there will be food and a way to stop fuel ponds from extincting humans — even though nobody has explained how this will be possible…
Since there will be no oil or other energy forms save wood (assuming again that 7.4B people leave any trees behind when they exit), human muscle and animal power… then the alternative that I see as being most likely is some form of primitive society….
There will be elites — leaders of small communities of survivors — but they most definitely will not have super computers… DNA technology… mobile phones …. solar panels… and the other hoo haw that you envision …
I imagine this world would be quite violent as survivors fight over scarce resources (as they always have) …
I would expect slavery to make a huge comeback….
Think of this world as Mad Max meets Amazon hunter gatherer….
The survivors will salvage the detritus of a collapsed mega-civilization (no jalopies though because no gasoline, brake or transmission fluids) … but eventually … in a few decades … all of the ‘stuff’ left behind by us will break down ….
And the tribes will go full primitive… and they will remain full primitive…
Because we have plucked all the low hanging resource fruit… what is left… will stay in the ground.
Your vision squares with my own, regrettably, FE.
I certainly hope there are trees left after the SHTF. One good coming out of all this is that nature and other species on this planet would be spared the relentless slaughter ever since our rise to dominance. Peak Oil would be the best thing that ever happened to the environment, arresting climate change and allowing habitats and wildlife to recover.
Exactly! Thank you.
Thers more at the beach to watch than sunsets :0
Here is something that concerns me and hasn’t yet come up. What do you think will become of the 400+ nuclear reactors now in operation? I understand it takes about 50 years to shut one down, and that’s if there is money available to so. When the grid fails and diesel generator fuel runs out, reactor cooling pumps will stop working. I’m imagining 400+ Fukushima like meltdowns bathing us all in radiation. Thanks, Don.
I’ve asked B9 this on many occasions….
Well actually I have asked about the fuel ponds … because they are far more dangerous than the reactors because there are far more of them … and the contain far more fuel rods…
The silence is deafening…
It takes too much coordination and work on the part of PTB. If they understand the problem, they will be more concerned with creating islands of prosperity for themselves.
Ellison and Zuckerberg own islands in Hawaii… James Cameron owns a lot of land in New Zealand and relocating his family to this country…. apparently luxury bunkers are selling well…
However beyond anecdotal indications…. I am not seeing much evidence of elites taking action … I am not aware of an influx of ultra wealthy individuals into NZ (which surely would rank high on the list of refuges)
There are a lot of billionaires in the US and China — probably two of the worst places to be post collapse — yet there is no evidence of mass preparations by such individuals …
I have not heard that Kissinger has purchased any farmland in a remote area….
Doesn’t mean it is not happening ….
I suspect it is not — because those in the know would know that there is nowhere to hide from what is coming. That there is no surviving it.
The real players are dedicating their time to keeping the hamster running for as long as possible. Their own lives are at stake therefore they are highly motivated to come up with more gimmicks…
I wonder how it is to wake up each morning — with a gun pointed at your head — and told the trigger will be pulled unless you come up with another fabulous trick…. the pressure must be incredible!
They are either unconscious of the facts, dismiss them or believe their hubris (power & wealth) will save them in any calamity. I’m sure the ruling classes of every collapsed civilisation thought or behaved in the same way just before they disappeared into history.
In the final analysis the so-called elites, regardless of the extent of their ability to thrive post-collapse, are pawns in the universe’s great game, just like everyone else, acting out their biological and thermodynamic obligations – mere energy dissipaters living a fantasy of autonomy and empowerment. Arguably it is those at the extremes of the wealth/power spectrum that get the roughest deal. Talk about dysfunctional…
A mirage of omnipotence… that will vapourize along with the age of oil
The Bushes grabbed a chunk of land in Paraguay probably to satisfy various needs as they arise…
1. escape prosecution
2. escape collapse, war, radiation in the US
and IMO the most interesting and telling reason…
3. position themsleves to dominate when water becomes the new oil
Bush Family Evil Empire join the rush to privatize the world’s water supplies
http://www.democraticunderground.com/10022473474
And this mind blowing in-depth expose…
The New “Water Barons”: Wall Street Mega-Banks are Buying up the World’s Water
http://www.globalresearch.ca/the-new-water-barons-wall-street-mega-banks-are-buying-up-the-worlds-water/5383274
It looks like other mega-wealthy are also moving in that direction. Something here doesn’t quite add up. They have the best advisors in the world. What do they know that we don’t?
Even the best and brightest give wrong advice if they follow the wrong overall theories.
In a grid down situation its pretty useless to own something half a world away, the local people are going to take the local resources.
TPTB and advisors etc. believe in something of a Darwinian historical world view, it will always get better, meaning techno-utopia untill infinity, or something like that. Grid down collapse, simply sounds like crazy talk to them. Sure, they know temporary collapses happen, but they expect everything to bounce right back up again. Take Peter Schiff, he has a pretty good grasp of what will happen and when, but he can´t imagine grid down SHTF collapse. Probably simply because he believes in money, but in a grid down SHTF collapse, money becomes useless, worthless. Billionaires become dirt poor beggars if they don´t have practical skills. Something like that simply does not fit in with TPTB world view.
“Billionaires become dirt poor beggars if they don´t have practical skills.”
And no minions to do their bidding post SHTF….
@Van Kent Thanks for summing that up so well.
You’ll have to forgive me for repeatedly entertaining ideas of evil genius level cunning by elite planners to rise from the ashes with a hydrogen economy intact.
You’re quite right, when it comes down to it, they’re probably the least able to survive when BAU goes bye-byes.
We all need to be on the same page. The unbelievable diversity of memes about reality, coupled with entrenched miseducation over forever prevents us from rational and realistic thinking. The challenge I see is to focus on how to find meeting ground between wildly dissonant views of reality. This seems so hard to do that it would have to become a distinct discipline and be given priority in public discourse. Ideally, we should get some agreement about SOME things, and then we have to agree to disagree about some, and then we have to focus on what will or will not support survival (the desire for which we all share). But even if I’m halfway correct, where do we start?
Six days later, I will break the defining silence.
There is nothing that members of the 99% can do. Full stop. Therefore, there is no reason for anyone to be on the same page.
In the US, and the rest of the developed world we live in an oligarchy, so by definition only the rich and powerful can effect change. But, in fact, there is nothing that the 1% can do either. Imagine getting millions of (rich) people to: 1. realize that there is a problem; 2. agree that problem A is more important than problem B (since there are plenty of problems available) and 3. agree on the solution to the agreed upon problem.
That is why any mention of the Illuminati, or Jewish bankers, or “TPTB” tends to be paranoia and not useful thought. The President of the US is a powerful guy, but he has to take his cues on energy from the President of Exxon. The President of Exxon is a powerful guy, but if the President of ADM wants something that runs to cross purposes of Exxon, he will get his way if ADM is willing to spend the money necessary to buy a sufficiency of Congress. B9K9 has fallen into the trap of thinking that TPTB actually have a plan and the power to carry it off. Nope.
None of those people has any real power — the real power is in the hands of the men who have the right to print the money and loan it out at interest.
How is it people are unable to grasp the simplicity –and brilliance of this?
Let’s break it down in a way that might be easier for people to understand.
I am a Managing Director at Goldman Sachs.
You are a bond salesperson
I tell you to do something.
You do it. In fact you bend over backwards to try to make me happy.
Why?
Because I decide a) if you will remain in your high paying job and b) I decide if your annual bonus will be over or under 1 million dollars.
I have power over you.
The Fed is kinda like me — except infinitely more powerful. Because they in effect decide who gets paid and how much…. if you piss off the owners of the Fed — doesn’t matter if you are the president of a multinational company or of a major country….. the Fed can put you on the breadline.
Ever wonder why Mr Berlusconi went away into the night so quietly when he went against the ECB— and was replaced by a dictator who was a former Goldman Sachs employee?
How exactly do you throw out a democratically elected billionaire mafia king? Surely he has a lot of power…
Yet one day he was the leader of Italy — and the next he had pretty much disappeared from the stage.
The owners of the Fed are by far the most powerful men on the planet — Russia and China appear to be attempting to get rid of them….
And as we are seeing — a cornered animal — can be very dangerous…
Sure, Fast Eddy, the Fed is a major player, but in control? – world wide? – no way. Your comment leads me to believe that actually we are in agreement. The ECB schooled Berlusconi … fine. What happens when they decide that a Fed policy is not in their best interest? What happens when Putin disagrees with the ECB or Exxon? The 1% and the 0.1% are people, and people disagree.
There is no one in charge.
https://www.youtube.com/watch?v=Ig5sTehZqZA
Watch this part first — 1:34:40 — I am certain (unless you are a sheeple – if you are you can go back to mowing the grass… ) you will be motivated to listen to the entire reading…
Then come back and tell me there is no one in charge…
Putin DOES disagree with the owners of the Fed (not sure about Exxon but Exxon does not matter – Exxon does not run the world)
In case you hadn’t noticed they are coming at him from every angle…. Syria – Ukraine — there is a bounty on his head….
I read with amusement that the Elders are trying to ban the Russians from the Olympics for doping…
In the immortal words of Col Walter E Kurtz … isn’t that the same as handing out speeding tickets at the Indianapolis 500?
The Elders are realizing Putin (and China who have also lifted the middle finger to the Elders) is not Saddam… not Gadaffi…..
An epic chess match is occurring right before our eyes…. the stakes are massive…. control of the world….
Fast Eddy, only if your conspiritors are stealing a shitload of money can you keep conspiracies a secret. If, of course, your conspirators can also wash clean a shitload of money.
But intergenerational conspiracies, dunno, seem to be extremely unlikely. It would be interesting to find out what sort of inauguration ceremonies that would entail. Dead pigs, coffins and masturbation, dunno if that truly could keep “all” of them in check, generation after generation..
Surely, if there were such people, at least some of them would have figured out by now, that its all a pipe dream, money and power are going to disappear, and all that will be left is a few missile silos filled to the brim with canned foods. That surely would have encouraged some of these people to jump ship and call mutiny on their captains. Or something like that.
Hmm.. on second thoughts, it would depend on the scope of drug smuggling activities, I guess. The mob, CIA, whoever is running the show on global drug smuggling networks, must be thinking that they are organized enough to be kings of the hill after a SHTF situation. But I´m not entirely convinced they have enough of earth sheltered greenhouses or knowhow to build such structures in grid down collapse, for that assesment to be entirely right.
I am not sure which comment you are responding to — but in terms of keeping a secret consider this…
The NSA would have employed tens (hundreds?) of thousands of people since they initiated their blanket surveillance of you and me….
Remind me of how many Snowden’s have emerged in all that time?
It is surprisingly easy to keep a secret — just pay people well — and make the consequences of rocking the boat are dire (absolutely no upside)…. the easiest way to do this is to destroy a person’s career….
It all comes down to money — everyone has their price — if someone paid you 250k per year wold you not turn a blind eye to what they are doing — particularly if you knew that if you tried to expose them they would crush you?
That is why owning the presses that prints the reserve currency is the absolute key to power….
Note the recent anti-Zionist protests in American universities — that was quelled very easily when the ‘bastions of free speech’ suspended students involved… imagine that…
On a wider scale — if you are the leader of a country that refuses to kiss the ring — there are dozens of those over the years — the jackals come for you:
https://www.youtube.com/watch?v=yTbdnNgqfs8
What point is there in rocking the boat at all — even if you tip it over — someone else will just declare themselves captain… better to stay in the boat…. ‘never get out of the boat’
@Van Kent – If you only scratch the surface of a subject then you’ll inevitably come to the conclusions that you have. And your confirmed bias will attempt to fill in the gaps – off the top of your head – in the most logical fashion. Because, of course, you are a logical person and logic has served you well in your life. So when confronted with a topic that causes even the mildest cognitive dissonance, you “logic” it away and pat yourself on the back for not being as silly as those other fellows.
But we don’t live in a logical universe.
All I’m saying is I wouldn’t be so quick to discount the existance of supranational dynastic crime syndicates that, while they may not all bow down to the same master, work together – when it suits them – to bring about a system of global governance that would satisfy the libido dominandi of the most insatiable control freak.
Ask yourself how one family https://en.wikipedia.org/wiki/Rothschild_family can rise from the ghetto to dominate global finance and “the largest private fortune in the world”. These modern money changers along with all the other dynastic families…
(e.g. the Medicis, Orsinis, Aldobrandinis, Pallavicini, Farnese etc)
…moved to capture a position that they will not willingly cede. And in their employ are the high priest class of the ages that have advised the Elect since their inception. The knowledge of how to aquire absolute power and how to maintain it. The think tanks of the world help to craft the rules that grant these institutions immunity. They are far above the law of any nation state and their operatives infiltrate every position of power with ease.
Rivals on the global chessboard may in fact belong to the same cabal or freemasonic order. (all police and military around the world display the same insignia e.g. checkered band – a freemasonic emblem.) They simply play out their roles as instructed, sometimes forced to take a hit for the team to keep up appearances. Contingency plans, bribery, blackmail and assassination take care of the rest. Or do you think that Hussein, Gadafi, Assad, and now Putin, were not on the target list long ago?
Not only do the corrupt factions fight among themselves, thereby slowing down their progress, but less psychotic types among the elite also try to steer things in a more positive direction.
Remember, only the tip of the iceberg meets the light of day…
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11652093/Swiss-authorities-fine-HSBC-after-money-laundering-investigation.html
Imagine what lies beneath the surface.
Javier, I work with a hundred other people, who should be taking instructions from me about how to proceed and do things next. But, most of the time they do as they will, misunderstanding in a small or a big way the given instructions I have given them.
And its not about the ability to give or recieve instructions, I have been in the military in something of a special forces environment in my military service, and I can´t say giving orders and instructions would be foolproof in any circumstances (hand on shoulder, eye to eye, “go to that corner, and in fifteen minutes, flank from the left with your team”, and what happens, usually something completely unexpected).
Javier, just saying, intergenerational evil master plans seem to me as completely theoretical, they would never work in a real life environment.
Seems to me, that ideas can work, ideas can survive and find supporters and new implementation plans every generation. But to have some sort of a intergenerational organization, that would require resources and indoctrination beyond belief.
A very interesting theory that fits a very fair number of facts especially dealing with mass immigration and obvious social engineering schemes Western governments have been doing for decades. It fills in more than a few blanks actually.
I would say though that at this point it would require worldwide cooperation between at least the major players of the EURO, US, China and Russia to succeed and I am not convinced that cooperation exists. There are also several wildcards there and population must be controlled and it should have been controlled long before now especially since it requires the loss of intelligence from a large segment of the world population. The powers that be should have started this program about 5 decades ago and cut world population growth in the 3rd world countries by about 70% to have had a hope of achieving the goals you lay out. Instead the propaganda arm of this large conspiracy did it’s job too well and actually subsidized that growth. Now unless they wish to actually begin an almost uncontrolled mass world population decline they wouldn’t have a hope in Hades of even foretelling the final outcome of such a decline.
If they are in fact doing what you claim they are gamblers that possess really large rounds balls.
I posted a comment earlier that seems to have disappeared into neverland some how. I find that happens here from time to time but if this ends up being a double comment kinda then I apologize.
I have two issues with your theory. One being that I am not sure the type of cooperation that would be needed between the various elites of several major player countries is actually there. China and Russia in particular still seem to be entirely their own players and for your grand conspiracy to work they would need to be on board with the rest oft he world’s elites.
Two, it is far too late to scale back the population of the world without risk. Truth is the burden of the worlds population is already stretching the resources of the higher IQ tier you claim the elites wish to eliminate almost completely. While your theory explains a lot of moves various governments have made that actually appear to hurt their citizens its propaganda arm has done such a great job that the third world populations have exploded to the point there can not be any type of controlled decline at all. If these elites were intelligent enough to devise such a long term plan they would not have allowed things to progress to the numbers they have today.
All I can say is that if your theory is indeed correct the very elite you mention are gamblers with huge round appendages. They should have implemented their plan about twenty years or more ago to assure success but at the current population levels it would be rolling dice.
B9K9, I do enjoy your plan for colonizing the galaxy but it may be a bit beyond our scope here.
I think B9 maybe smoking something a little stronger than tobacco but i still appreciate his comments.
Quantum Labor Saving Subvarient
T.I.C. Communications
NEWSFLASH…. Quantum Savings on Labor Costs With Bio-tech Solutions
Naypyitaw Myanmar Nov.. 6, 2015
Otnas International Nom Ky Ltd. announced today that extensive trials of their YIN and YANK Hominid Subvarient Labor Units have been completed with overwhelming success.
“One hundred per cent of our subjects performed at or above standards during the five year trial” stated Peter H. Pan, Chief Financial and Scientific Officer at Otnas International Nom Ky Ltd.(OINK). “We are prepared to initiate the licensing procedure as soon as the details of the Biotechnology /Intellectual Property addendum to the US – SE Asia trade agreement is finalized, which could be as soon as next week. We currently have an extensive backlog of firms that seek to cut their waste of resources on overpriced labor”, said Pan.
Promotional materials provided by OINK explained that the Hominid Subvarient Labor Units have various primate genetic materials including Homo sapien, chimpanzee and orangutan components. The genetically modified Labor Units (GMLU) have been tested in manufacturing, construction, extraction and agricultural settings.
According to the OINK information packet the hominid subvarients excel at repetitive tasks over long time periods under difficult and dangerous conditions. It is estimated that over a billion human workers worldwide could be replaced with GMLUs, freeing those humans from these menial tasks. Those humans could then move to more lucrative careers and the companies utilizing the GMWs would see substantial reductions in their labor costs.
“With food cost skyrocketing, our first objective was to create a subvarient with unique nutritional requirements” explained Pan, “The Yin and Yank varieties have achieved a high level of metabolic efficiency when fed a ration of 25% proprietary whole grain products combined with 75% fecal material from the complementary subvarient. The Yin eats Yank feces and the Yank eats Yin feces. With ongoing research we feel that 80% to 90% fecal material in the ration is possible, creating further labor cost reductions”.
OINK documents stated that each subvarient has it’s own union. All labor organizational issues are handled pre-contract so that licensees can plan for the future with no labor uncertainties.
The morning news conference was briefly interrupted when an unidentified journalist asked Dr. Pan if it was true that their goal was to “have a labor force that has to subsist by shitting in each others mouths?”
The questioner was removed from the room by security personnel.
Dr. Pan did not respond to the question except to say that “direct feeding procedures research is in the extremely preliminary stage.”
Unidentified sources reported that the ejected journalist was later involved in an unfortunate pedestrian/bus accident outside the research center. And that his throat had been cut. These reports are unconfirmed at this time.
I hope you are kidding.
This seems to be the source of the quote: http://zombieapocalypsemitigation.com/?page_id=480
Well the new “trade” agreement certainly bore fruit fast! Bullish!
I don’t see TPTB doing anything like this. They would be mostly concerned about taking care of themselves. What happens to the rest is their problem. Epidemics would be the most likely outcome, if food supplies fall low.
“In fact, there is evidence today that banks are “looking the other way,” rather than taking steps to cut off lending to shale drillers, when current operations are clearly unprofitable.”
The Elders would no doubt be ordering them to look the other way ….
Got to fuel the war birds kill, kill, kill.
Like everyone else, just holding their noses as the dance on the ballroom floor.
Fast, have you read any writings by Thomas Merton?
May do your disposition some good, dear fellow
https://m.youtube.com/watch?v=-ARsE10rQjo
http://www.amazon.com/Environmental-Vision-Thomas-Merton-Culture/dp/0813130042
You would appreciate his insights written in his journal concerning what we face now in a different light all together.
Given the situation we are facing …. isn’t this sort of stuff irrelevant?
The weekend weather is looking pleasant — I may go trout fishing.
What about after the here and now? Maybe it will not be “irrelent” when you breath your last breath….which may be much sooner than you expect!
No matter, I know of many that turn to spiritually meaning when their back is against the wall.
The aspect of Thomas Merton his insights are still relevant in today’s world.
Who are these “elders”?
The “Elders” aka core of TPTB in generational sense, people with deep knowledge how to properely operate the human farm and move wealth through times be it nominally feudal or capitalist system, people and dynasties going back to first global financial houses of 350-400yrs ago, and there are probably even older money than that.. This group is likely not intact through times (as suggested by some cheap authors), one can expect lotsa new money (oil and defense) joined their ranks in past 50-100yrs. Read up on some history..
Thanks for your reply. I don’t believe anyone is really in control of human events any more than a jellyfish is in control of which way it floats in the current. They may be able to position themselves to take most of the bite from the cherry, but in reality they are being driven by biology as much as the poorest member of the human race. Pedal to the metal racing towards the chasm urged on by the primal desire for growth, with different people down through the ages being at the wheel, is probably the best way to describe the human construct.
To a certain extent I agree…
However if you own the company that has the right to print the reserve currency (i.e. the Fed) — then every government, corporation and individual is under your control.
I used to date a girl in Hong Kong from a very wealthy family — old Shanghai money…. the granny used to dole out the red envelopes at Chinese New Year — the amount of money in the envelope was contingent on how much each relative had kissed her ass that year…
Needless to say there was a lot of puckering going on in that family….
ass kissing is easy work if you are so lucky.
I was piss poor at the time … and probably could have worked my way into the clan and the Rolls Royce lifestyle…
But that would be a rather pathetic way to go through life… kissing the old lady’s withered old ass waiting on red packets… Nah…
http://www.zerohedge.com/news/2015-11-03/18-numbers-scream-crippling-global-recession-has-arrived
Dreadful numbers….
In honor of Fast Eddy (56,000,000 Hiroshima’s)
“Fukushima Gets A Lot Uglier”
http://www.counterpunch.org/2015/11/03/fukushima-gets-a-lot-uglier/
“Does China’s Nuclear Boom Threaten a Global Catastrophe?”
http://www.counterpunch.org/2015/10/30/does-chinas-nuclear-boom-threaten-a-global-catastrophe/
Where Forbes celebrates the wonderfully low cost of Chinese nuclear power we must also be a little skeptical. for example, “Six Chinese-designed 1000 MW reactors at Yangjiang will be a huge nuclear power base for China General Nuclear, and will cost only US$11.5 billion for over 6000 MWe, a third of the cost in western countries.”
I have suggested to the NYS PSC placing six new nuclear plants on the Indian Point site 30 miles north of NYC. I am excited to see China building prosperity.
My opinion there will be a major catastrophe at a Chinese NPP by the end of the decade.
The China article is especially good. Hopefully, China will slow down on its plans, given recent setbacks. It is craziness to build so many nuclear power plants at once.
I hope that they have also thought through where they are going to get all of the uranium for these nuclear reactors as well–reprocessing? If so, they need to be building reprocessing plants as well. If they are thorium reactors, there is still work to be done to make them feasible.
It is important to keep in mind that Fukushima does not involve the spent fuel ponds… it is a reactor accident … and it is contained (by pumping sea water onto the cores – for decades)
A spent fuel pond accident — because far more fuel is stored in these installations — would be a totally different animal. Many times more ferocious….
May I remind all the Chinese nuclear power fans that the country is located upwind of the USA and points east. See Fukushima for interesting posts on atmospheric distributions of lofted nuclear fuel vapor, bioaccumulation, and the continuing ocean current contamination by long-lived radionuclides released into the North Pacific.
China also experiences ongoing major earthquakes from the continuing plate collision of the Indian subcontinent into Southern Asia, creating the Himalayas and Tibetan Plateau, a work still in progress.
I just keep seeing that three eyed fish from the simpsons.
Ask any tuna you happen to see
whats the best tuna
chicken of #3
“The real-life Blinky! Three-eyed catfish is caught in New York’s polluted Gowanus Canal as The Simpsons comes true.”
http://www.dailymail.co.uk/news/article-3311242/Brooklyn-man-gets-three-eyed-fish-Gowanus-Canal-water-near-Street-Bridge.html
Brilliant as usual, Gail. Thanks.
https://app.box.com/s/ys8ijadj4b57nb95ka0b3ilph38ga7fm
As you imply and the chart at the link above confirms, despite the crash in the price of oil, its consumption is still too costly as a share of final sales and at the differential growth rates of the oil price and final sales.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2mPb
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2n98
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2n96
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2p4U
The acceleration of money velocity to private GDP has collapsed to the level of 2008, 2001, and the early 1980s.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2p4I
The differential change rate of health (dis-ease) care (and medical insurance) spending and final sales (shown as a reciprocal in the chart above for comparison) is similarly at the recessionary levels of 2008 and 2001.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2oPM
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=2oZB
https://research.stlouisfed.org/fred2/graph/?g=2p5p
As to whether or not the Fed will raise rates and the debate about what the so-called Taylor Rule is implying for the Fed funds rate, the probability of a rate hike is ZERO with CPI at 0%, the energy, transport, and industrial sectors in recession, and risk spreads widening as in 2012 (Fed’s “all in”), 2008, 2001, and the recessions of the early 1980s and mid-1970s.
The US is in a post-Peak Oil, “new normal” recession of the debt-deflationary regime of the Long Wave Trough characterized by secular stagnation, a liquidity trap, and 0% or negative CPI/PCE deflator, as Japan has experienced since the late 1990s to early 2000s.
We now have for the first time since the Great Depression simultaneously occurring (1) contracting S&P 500 revenues and earnings; (2) trend nominal GDP per capita below 2%; (3) trend real GDP per capita below 1%; (4) CPI at 0% or deflation; (5) labor share of GDP at a record low; (6) trend wage growth below 3%; (7) ZIRP; (8) Fed balance sheet at one-third of private GDP; (9) non-financial corporate debt as a share of GDP at the level that occurred prior to the GFC and at the level of 1928-30 and in Japan in 1987-94; and (10) 70-75% of the proportionally aggregated real GDP per capita at “stall speed” or recessionary with no growth of global trade.
We are repeating the conditions of the early 2000s in Japan; the early to late 1930s; the early 1890s; and the late 1830s.
http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
However, this time we are experiencing these once-in-a-lifetime conditions coincident with a “perfect storm” of converging factors, including Peak Oil; population overshoot; climate change; resource depletion per capita; fiscal constraints from excessive debt and Boomer demographic drag effects; Third World-like wealth and income concentration and inequality; and hyper-financialization and unprecedented financial asset bubbles resulting in all output being absorbed by the financial sector/financialized sectors.
My apologies for appearing to be such a downer, but the coalescing factors are by now arguably simply overwhelming and in search of any number of self-reinforcing precipitants that risk a series of local, regional, and global crises at a scale and cumulative effects most of us likely cannot conceive.
I’d suggest people enjoy the coming Christmas…. because it’s likely to be your last.
Stockman continues to fail to ask the question — which obviously is — why are they doing this…
However he is good at pointing out symptions:
This Time Is The Same——And Worse!
The fact is, stock prices are just plain nuts and the evidence is all there in plain sight. And so are the intense and manifold economic headwinds arising from all around the planet—–to say nothing of the advanced age of the US business cycle.
At this point, 75% of S&P 500 companies have reported Q3 results, and earnings are coming in at $93.80 per share on an LTM basis. That happens to be 7.4% below the peak $106 per share reported last September, and means that the market today is valuing these shrinking profits at a spritely 22.49X PE ratio.
And, yes, there is a reason for two-digit precision. It seems that in the 4th quarter of 2007 LTM earnings came in at 22.19X the S&P 500 index price. We know what happened next!
http://davidstockmanscontracorner.com/76822-2/
-7.4% — Wow.
Thanks! It looks like we are now headed for QT or Global Tightening, instead of the continued bubble we had in the past. That doesn’t work well.
Don’t let it be so! Just one more year of tranquility, or even 10. Pretty please?
“-7.4% — Wow.”
Probably effect of dollar appreciation.
Yes of course — that is what the MSM will blame this on — if it’s not the cold weather — or the hot weather — or the rainy weather — then it must be the strong USD… always some ridiculous excuse….
If the USD were the problem — then why not just arrange to weaken the USD? The Fed has the power to do that …. if the USD is strong then that is because the Fed wants it strong….
The thing is….
This is a global phenomenon — it is affecting most major corporations – not just US ones …. surely some are winners with respect to the strong USD … and some are losers…
Yet globally – profits are dropping fast….
Also there are a slew of economic indicators that are flashing red —- Bloomberg Commodity Index has collapsed — Baltic Dry Index has collapsed…. these are symptoms of something else…
The MSM is never going to tell you this …. but I will….
The core problem is that growth ended some years ago due to the end of cheap to extract oil….
The gimmicks like QE ZIRP Ghost Cities Debt Subprime Autos and Houses and the other stimulus measures used to try to offset the end of growth are are now pushing on a string ….
And that is why profits are crashing ….
Thanks for your many graphs and observations.
You clearly have studied more about the long term history of collapses than I have. Once I started thinking about where we are now, relative to the 1930s depression, it is clear that we are worse off now, because we have so many more problems now than we did back then–including growing cost of energy production, climate change, the demographic bubble, and promised benefits to retirees.
One change now is the fact that so many have faith that our current system can continue indefinitely. Back in the days when there were frequent banking crises, there weren’t financial planners running around, showing how a person could guarantee himself a lifetime income of $____, if he would just set aside ___% of his wages in an investment fund. People were sensible enough to realize that there were risks associated with investments and even funds left in banks.
Nobody here doubts that growth is over. At least, nobody who has looked at the situation seriously, in the light of day with a view toward clear understanding.
Still, the point that I and many others have made is this: ok, we are in a no growth world. Now, what is the response? What is actually going to happen? Here you have to use your imagination a bit, but avoid getting too influenced by visions of Hollywood style apocalypse.
Once you take a deep breath and really think about it, you begin to form a mental picture, if you will, of what is actually going to occur. We don’t know the specifics, but we know the general outlines. All of the following will happen, to some extent or another. None of them will work, of course, but they will all be tried:
1) currency creation; all currencies in the world today are fiat currencies, which can be created in infinite quantity, substituted, replaced, exchanged, etc. etc.
2) selective debt default, while other debts will continue to be paid, while others will inflate away, via mechanism in number 1
3) wage/price/capital controls; you have to keep the sheeple showing up to work so you must pay them, even if in pennies; you must also restrict movement of money so they don’t get any uppity ideas of escaping the system
4) zirp or nirp, banning cash, depositor bail ins, limiting withdrawals: see number 3, very similar; basically you tax the sheeple for saving, and prevent them from actually getting to their money; this allows the banks to continue to make low or no interest loans to the remaining key industrial sectors (energy, agriculture)
5) continue to subsidize the remaining sectors necessary for some semblance of order as the industrial system winds down: agriculture, energy, housing, welfare etc.; see number 3; it’s absolutely imperative to keep the sheeple fed on foodstuffs and sheltered; if you don’t do this, you genuinely lose control; here you might actually need to sacrifice some areas such as auto/airline/tourism, etc.
6) internal security state, external war; self explanatory; you must control your home populace, and you must wage war on other populations, in whatever way you can, to destabilize them to either a) prevent them from using resources, or b) acquire the resources for yourself
7) propaganda; this must be relentless and optimistic, never let up; always play the happy tune and give people visions of utopian, futuristic societies, where the brown and black masses suddenly get clever and build nuclear fusion reactors and spaceships to Mars; this gives the adventurous people the idea to live out these fantasies on screen, either as Hollywood actors or graphic designers, or watching the movies; once you reach a critical mass, you can actually just recycle, in the form of sequels or just simply letting people watch old stuff again and again
8) continue birth control and abortion, but you must also the limit the opposite end (old, sick people) by rationing healthcare; this is difficult, because the elderly are rich and vote, so here you go after the middle aged, middle class, by relentlessly increasing their healthcare premiums so they just give up, and if they get an illness they die off
9) once all of the above is accomplished, the world will make a gradual, but uncomfortable, transition to a post industrial service/scrap/scarcity economy; on a long enough timeline, the children born will never even know otherwise; this has happened in the UK, for example, with some success already
10) accomplish all of the above, while continue to hoard the remaining currency and assets to hand to your children so they become the masters in the neofeudal economy to come
You have to get out of the middle class, objective, truthful, scientific way of looking at things. The world is not nice, or honest, or good, or any of that. The world is about power relations, propaganda, deceit. About getting away with whatever you can get away with. If you are too honest, you will never, ever understand how this will play out.
Dolphi9: I don’t believe that growth is over or will ever be over. I believe that Earth will become uninhabitable for humans soon. I don’t think that it will occur because of economic reasons but because of lack of sustainable habitat for humans. Loss of habitat will happen from Global Warming and Abrupt Climate Change. But as long as human habitat exists I believe that there will be some sort economic activity for the reasons that you cite: “The world is about power relations, propaganda, deceit. About getting away with whatever you can get away with. If you are too honest, you will never, ever understand how this will play out.”
dolph9, you reflect quite well my own perspective. Thanks for putting it so succinctly.
Dolph9, we all agree BAU is ending. We are left with charting the way down.
In the midst of a world full of people who have no idea of system thinking, nor power politics, nor a finite world.
The only unclaimed possible big oil field is in Syria in its Golan Heights. We all wait to find out when KSA runs dry.
Europe needs Russian energy but falls for US threats. Russia and China can help each other. The US seeks to show strength against China but may not actually have the power to do so.
A struggling money elite in the US/Israel/London are using behavior that is increasingly damaging to society. But still no bankers hanging from lamp posts. I wonder why we do not see an increasing role for traditional organized crime?
I don’t think we really know what is ahead. There are stories about what happened during the Great Depression. That period may be somewhat similar to what we are reaching now. You have some ideas, and I am sure that others could come up with other ideas. In past collapses, epidemics were a primary reason for early death. The citizens were sufficiently weakened that diseases that otherwise wouldn’t have been very deadly seem to have killed quite high percentages of the population.
During the depression we were dealing with real wealth not FIAT cash. This creates a buffer effect that makes the entire thing rather hazy which is why so many predictions don’t come around in a timely manner as it now includes a variable that cannot be measured scientifically but rests on the thoughts and length of time a few individuals are willing to put up with diminishing returns that literally cost them nothing.
I would add in number 11 – Central banks begin eating bad debt. Is it really bad debt if they are the ones creating the fiat cash out of thin air? Just like the FED’s balance sheet continuing to grow and the mystery buyers of US debt from Belgium. As long as the fake money they are using to buy and eat this debt never makes it down to the garden variety smucks like us they could conceivably continue to buy debt and eat it for decades. In turn it would keep pensions, the market and bond sales steady. They can keep it on their books forever but if it is never foreclosed on it will simply continue to count as an asset and no one has to pay up.
You are describing BAU lite.
That is not possible.
We either grow – or we collapse.
Corporate profits were down 7.4% year on year last month — if that trend is not soon halted (anyone have an idea as to how we might increase corporate profits?) — then the dam will bust — big name companies are going to go out of business…. and like dominoes others will follow …. in rapid succession…
Tens of millions of people will be out of work — the financial system will cease to exist — the power will go off — the grocery stores will empty — the violent and suffering and disease and starvation will begin
This is not a Hollywood movie. This is not my attempt at hyperbole. Or an attempt to scare the Koombaya Krowd.
This is what is going to happen.
I absolutely guarantee it.
The scenario with the highest probability now seems to be some form of regionalization driven by former (pretend to be) liberal allies i.e. putinization/orbanization/al-sisization. From longer term view it’s a prequel to reinstalling some form of functioning feudal rule over the remainder of skilled people and resouces. Mind you this is the best scenario though, some regions might collapse into lower system of organization in more chaotic and destructive manner, especially parts of Western Europe, ME etc.
A few comments from the possibility of numerous.
“For example, once cars became the predominant method of transportation, cities changed in ways that made it difficult to go back to using horses for transportation. There are now not enough horses available for this purpose, and there are not facilities for “parking” horses in cities when they are not needed. And, of course, we don’t have services in place for cleaning up the messes that horses leave.” In Nicaragua where I live and many other countries horse and buggie or horse and cart are still widely used for transport and cargo. The mess stays on the street.
“Growth in energy usage (blue) tends to be close to the total GDP growth rate (sum of red and blue), suggesting that most economic growth comes from increased energy use.” I have problems with charts of exponential growth or decline which are not accompanied with explanation and/or references. Lines in the sand.
“There is nearly always an investment of time and resources, in order to make something happen–anything from the growing of food to the mining of coal. Very often, it takes more than one person to undertake the initial steps; there needs to be a way to pay the other investors. Another issue is the guarantee of payment for resources gathered from a distance.” Capital is assumed to be something that a person has, just because s/he has it. Capital is produced from dead or living human workers.
“Many customs of early tribes seem to reflect informal rules regarding the sharing of goods and services, and penalties if these rules are not followed.” References?
“A way of somewhat mitigating the problem of too much income going toward debt repayment is lowering interest rates. In fact, in quite a few countries, the interest rates governments pay on debt are now negative.” In the USA the National Debt is not a problem as long as Empire and military dominance is maintained. Business debt and household debt must be discussed separately. The word “debt” should never be used without a reference to which type of debt.
“If a smaller amount of resources and human labor can be used to create a large amount of end product, this is growing efficiency.” Growth whether “efficient” or not is a problem on a finite planet. We need diminishment in many areas including population, consumers “wants”, petroleum extraction, manufacturing (especially cars and heavy farming vehicles), water usage, consumption in general but in particular food, especially fast food. The list is almost infinite on a finite planet. “Products” must be defined.
You can see why I was getting bogged down on this post. One thing leads to another, which leads to another. The list is endless. So instead of being just “too long,” the post starts getting way, way too long.
Having horses in cities “sort of” works if the cities are not too dense. Once a city gets to be the size of, say, New York City, there is no way that enough horses could transport people around in the city without the mess becoming overwhelming. The cities in Nicaragua have had horses all along, so they have found ways off accommodating the problems.
The chart with the red and blue lines has three year average growth rates of energy consumption (from BP’s Statistical Review of World Energy, 2015), and of GDP (in US 2010$), from the USDA Economic Research Services.
That is the beauty of NYC it is so dense that a HEALTHY person can get to everything one needs by walking. Only need truck to bring food in and garbage out.
Hi Gail, thanks – another great article. I appreciate you posting the entire thing.
It does make it difficult to cover everything in a single response – I may try to reply offline.
The summary: not everyone can borrow at zero rates; My numbers suggest another year before things fall apart; and, most worrying,TPTB may be relying on somebody else to fix the mess that is their responsibility, and this time a) it ain’t gonna happen, and b) even if there is a partial solution it is too late.
We are already seeing that interest rates are higher for low-rated individuals.
I would be interested in your “one year until things fall apart calculation.” I would agree that in some ways, things do seem to be still going along pretty well.
Posts getting to long? I have the solution – put them in a book!
Gail, that last bullet and sub bullet are the dozy.
Yes, it is hard to say very much about the last bullet and sub-bullet without scaring new readers to death.
It continues to upset seasoned readers, my self included.
When I read through this I feel as if I am sitting in front of a doctor who is explaining in great detail a horrific disease that has invaded my body — he’s not told me that the disease is terminal — he doesn’t need to.
Somehow, some of the live people I gave the presentation to still had the idea that technology would save them. I hadn’t had time to talk about technology really needing energy and debt as well. Even if I had, I doubt that people would have listened very closely to that part. People seem to start and end with the ideas they want, most of the time, regardless of what a person says.
But I think that if they hear you as part of a broader discussion, it should help with rational thinking? I find what you have to say and the way you say it enlightening in a non threatening way. This is rare, but it needs to fit into a broader “educational” context.
The thing is…
I’ve mentioned this before — but anyway — I have asked some of these types who believe in BAU forever — to play what if…. as in what if the end of cheap oil is the problem…
Every single one of them — including a couple of lawyers, an architect, a banker, a PHD psychologist…. responded with ‘ well if you are right then we are dead’
That is why they do not want to go to that dark corner — because they know what it means — they would not be interested in discussing ways to survive …
Because there is no surviving this …. or if there is the survivors are going to wish they were dead.
If you really think about what a world without energy means — it is truly dreadful. It means absolute and total collapse of everything — you won’t even be able to buy a tooth brush … a pair of socks…. a pencil…. the water won’t come out of the tap … you will be shitting on the street or in your backyard…. where will you get food? — there will be no medicines…
This is worse than the worst famine you have seen on tv — because there will be no aid agencies… no Bono concerts….
Smart people get that part of it — no doubt about that.
And they are frightened. As they should be.
As I am.
I had this discussion with my older brother on a few occasions — he is a very out of the box thinker… but he refused to discuss this … I even ordered him The Long Emergency — he refused to read it…
I suspect he knows that I am right … but again … he is frightened — he has children…. he prefers to block this out.
I do not bring this issue up any more.
There is no solution — there is no hedge — there is almost certainly no surviving this — so what purpose does warning someone about what is coming serve?
If they don’t want to know then best to leave them to their ignorance and cognitive dissonance.
This knowledge is in some respects … a terrible burden. I do not wish it on anyone.
“…no Bono concerts”
Well, every cloud!
“This knowledge is in some respects … a terrible burden. I do not wish it on anyone.”
It is a double-edged sword. It can be quite liberating not having to worry about debt, pensions and other long-term arrangements, although obviously this will be scant consolation when we are trying to scrape a living, hand-harvesting potatoes in the radioactive rain… But on balance I do prefer to know. Ignorance may be bliss now but I can’t think of anything worse than watching the world you thought you knew coming apart at the seams and only being able to understand this as some sort of banking crisis. Terrifying.
Agreed.
The positives outweigh the negatives… and for curious people… willful ignorance is not an option .
I’ve heard the term “sweet spot” mentioned a few times recently, and I wondered if we here aren’t in the sweet spot at the end of history, unable to conceive of an ending (well, most people anyway), and equally unable to see a future? We are stuck in the now, but not the way the wisdom traditions mean it. Aren’t we in some kind of holding position, unable to attend to any thing else? Trying to extend the life of BAU seems to be consistent with this.
So I’m like everybody else, except that I’m eager to talk about where we are. Why? “It won’t make a difference.” I suppose that’s like asking distance runners why they continue running even though the winners have already passed the finish. It wouldn’t be sporting to drop out. One finishes the race.
What I see as intolerable is to continue on politely with surreal dissonance we have in human society. We are doomed. No, technology will save us. It’s the police’s fault. No, it’s black youths’ fault. Whites are racist. No, it’s blacks who are racist. Population must decrease. No, population must increase. Poverty is increasing. No, the middle class is increasing all over the world-look at these graphs! I don’t see the point of worrying about the state of BAU when we have such incredible foolishness to deal with. You can’t just jump over this dissonance as if it weren’t there. That is illogical. The global human population has to come to some reasonable assessment of what in Jesus name is going on. Stop. Assemble our facts (as Gail attempts to do). Define our terms. The one thing we have in common is the will to survive. Start there maybe. If we can’t even do that, it’s tantamount to dropping out of the race. Although this might be a sweet spot where incredible folly doesn’t seem to matter, that situation is not going to last.
What’s that quote about how humans have a tremendous capacity to believe and justify just about anything?
Most people reject these end of the world arguments. Effectively they are unable to open that window…
But then doesn’t everyone have many windows that they refuse or are unable to open?
The atheism window is one most people will not open.
Look at politics — how one side is unable to understand nor empathize the others position?
We all go through life with closed windows — I think the goal is to try to identify the windows that are closed and try to open them
Much easier said than done …. identifying closed windows probably the hardest part…. well… actually understanding that there are windows even more difficult… powerful forces are working against you becoming aware of this…
Red pill… blue pill…. most people don’t even know there is an option….
“You can’t just jump over this dissonance as if it weren’t there. That is illogical. The global human population has to come to some reasonable assessment of what in Jesus name is going on.”
Good post
Except the assessment ends the fabric of what our species holds to be reality especially emotionally.
So the assessment is a non starter.
We are rejecting the question embracing our insanity.
Great comment! ” I wondered if we here aren’t in the sweet spot at the end of history, unable to conceive of an ending (well, most people anyway), and equally unable to see a future?”
It was explained to me recently that atheism might largely be a project of the Enlightenment. (Not sure I got that right.) Enlightenment thinkers under threat from the church thought it best to cede things spiritual to the church in return for holding sway over the physical, measurable world. That physical realm was seen as lifeless, just arrangements of atoms. But this view does not square with modern science. This suggests that atheism is a belief just as arbitrary as any other. Neither wrong nor right. If you’re born into an atheist family, you’re likely to favor atheism. But that has an arbitrary effect on how you see the world.
I’m not an atheist, but I find self-professed atheists rational about most things I care about. I just ask atheists to not judge “believers.” The aim should be a set of beliefs that work toward a survivable planet (hopeless task or not). This is where everybody being on the same page comes in.
Which leads to the beliefs of extreme evangelicals. You show them the numbers: 404 PPM of CO2, decrease of Earth’s ice, rate of deforestation, ocean death, etc., and they blithely suggest that God will come down and either fix all this, or beam up the righteous to a better place.
This leads to pointing out the following to them, (angrily as one option, and calmly as the other):
The church once insisted: .
– the earth was flat
– the sun went around it
– witches should be burned
– slavery was mandated by God
– adulterous women should be stoned
– women were the property of men
– and so on…
I would ask them if they believe these things now, and if not, why not. I would point out that they were complicit in the breakdown of nature. Millions of people have died in the making of their computers. The house they live in is a function of deforestation. Would that qualify them for God’s mercy? I would calmly let them have their say, in return for them letting me have mine. I would be friendly and non judgmental. I wouldn’t be aiming to change their views, but only to neutralize some of their venom, perhaps bringing them closer to compliance within a more rational context.
I would favor a similar approach for other forms of denial-ism.
How about a third option … mockingly 🙂
Nice post Artleads I agree, to a person we are all complicit. Mostly unknowingly, it’s the wilful deniers that need our scorn.
but…..IMO you can’t say Atheism is a belief system then say you ask atheists to not judge believers. An atheist does NOT believe, that is why they are called an atheist.
Atheists do not force atheism on their children or anyone for that matter, certainly not the way the religious force their beliefs on their children. Everyone should be free to choose to believe or not, if there was little or no indoctrination of children, the world might not have become so religiously divided and competing for a belief system for their own interpretation of god.
Somehow, I find it hard to believe that the “big bang” occurred on its own, and the laws of physics were put together on their own, and that the all of the biological structures came to be, without some divine oversight of the whole evolutionary process.
At the same time, I find a lot of religious views to be pretty silly. But I can see that there is a real need to keep human population down, so fighting over different religious views may be “built into” the current system of differing religious views–it is a “feature” of the current system, not a “bug.”
I also see an awfully lot of similarity among religions–attempts to pass along wisdom learned though the ages, in ways that would be hard to transfer otherwise. Things like how to treat others (of the in-group) and being thankful for what we have. Thus, religions serve a useful purpose.
We may not think of it as a religion, but our new religion is,”Technology and the Federal Reserve will save us. The values we see on the television are the right ones. Buy more. Be good consumers. ‘Keep up with the Joneses.'” I find this religion to be less acceptable than the more traditional religions.
Let’s not forget Solar Jesus Groupies… a sub-sect of the Technology followers….
We also have a range of other sub-sects including thorium, frozen methane in the sea and beamed power from satellite worshipers… and let’s not forget that bizarre cult of zealots who believe we can capture cow flatulence and power the world….
If the synopsis of slide #38 is true and I believe it is, Then our only viable option to power todays equipment with a non-polluting energy source is Biodiesel. Why? B/c Biodiesel will power any diesel engine with NO engine modifications and Biodiesel doesn’t run up against blend walls, any diesel engine will run on 100% biodiesel. Our best and Only hope is the American Farmer. We need oilseed crops and we need them fast.
Just plant the entire planet in crops to make bio-diesel … problem solved?
Saudi Wells Running Dry — of Water — Spell End of Desert Wheat http://www.bloomberg.com/news/articles/2015-11-04/saudi-wells-running-dry-of-water-spell-end-of-desert-wheat
I knew that was coming. No, the entire US economy must change – long haul trucking must go (Bye,Bye — Big Grocery, Big Fast Food, Big Box Retail) and local economies must flourish. We must incorporate a Bioeconomy.
https://www.whitehouse.gov/sites/default/files/microsites/ostp/national_bioeconomy_blueprint_april_2012.pdf
Just like the oil based economy’s foundation was petro we will need widespread distributed use of Biodiesel for the Bioeconomy.
And here’s the kicker, the feedstock to make the fuel is already distributed throughout the country. But new business models will be required to break the strangle hold incumbents now have.
Our national leaders are thinking the same way. Below, is a video of Sec. Tom Vilsack of the USDA describing a new economic business model for the country.
Please take a listen to Sec. Vilsack…..he starts speaking at the 29:55 mark. It last about 3 minutes.
Here is the link:
http://www.ag.senate.gov/hearings/energy-and-economic-growth-for-rural-america
Sec Vilsack describes what is coming next.
PS…..As far as Saudi Arabia growing wheat???
I refer to Sam Kinison’s line….They need a U-Haul, because they live in a F@#king desert.
https://www.youtube.com/watch?v=P0q4o58pKwA
I feel much better. Its all so clear now!
Bioeconomy.
Biodiesel for the Bioeconomy
new business models
a new economic business model
I call bioshit
There is no such thing as a “non-polluting” energy source. Everything creates waste and heat as a byproduct of exploitation.
Ok Fair Enough, Nation’s strictest regulatory board affirms biodiesel as lowest-carbon fuel
http://nbb.org/news/nbb-press-releases/2015/09/28/nation's-strictest-regulatory-board-affirms-biodiesel-as-lowest-carbon-fuel
Biofuel is also not at all sustainable without the whole system in operation, including banks to pay employees. Our farm output would drop greatly, without lots of regular diesel to keep the system going. Biodiesel production per acre is not very high, even with modern equipment. I wonder how many acres they think that it would take to create the amount of biodiesel we would need.
I am not sure about that. If I understand what Robert Rapier writes about the subject, biodiesel is not chemically equivalent to the diesel made from petroleum. http://www.energytrendsinsider.com/2009/01/17/renewable-diesel-primer/ Biodiesel tends to gel in cold weather, so it cannot be used in some applications. It also takes a lot of current crop land to grow.
Gasoline is taking something like half of our corn crop. Adding biodiesel (which tends to be much more expensive to produce) would reduce the amount available for other crops further.
Hello Gail.
Thanks for the wonderful job you do here. I’ve learned much in the last month or so.
I was looking into ways that we could replace oil while maintaining current infrastructure only today and came across this initiative…
http://www.jouleunlimited.com/
A Direct CO2-to-Fuels Platform using GM bacteria
I’d like to know what you and others here think about such radical approaches to solving our energy predicament. Of course, nothing like this solves the impending economic problems and / or may have arrived too late to the game, but it did convince me enough to comment about it here – mostly, because this system CAN be ramped up quicker than any other options I’ve seen, doesn’t eat into existing food stuffs, is carbon neutral, requies no changes to existing vehicles etc. The system literally spits out the type of fuel you demand of it ready to use.
The immediate concerns I personally had with this system was that it would require vast amounts of water even if non-potable – although this may not be the problem that I’m assuming. The other thing is that these bio-plants are drawing waste CO2 from existing industry. Again, I’m assuming this is from existing coal plants, factories, farms and so on. Something about that part of the equation doesn’t add up to me although I have see plans to draw CO2 directly from the environment also.
As you can see, even after reading your posts and the comments here I’m very much still hanging on to any thread of hope I can get my hands on!
I haven’t looked at this one. The problem is that we really need cheap fuels–under $20 per barrel oil replacement. There is no way this will do this. We also need a replacement in large quantity. This is doomed to be small scale, because of the extensive infrastructure needed to make it. It also needs a lot of debt for financing. It becomes hard to pay the interest on all of this debt, if realistic rates are charged.
I think it is a great idea. I would like to know the cost $/gallon.
From the site…
“Free of feedstock constraints and complex processing, this platform can achieve unrivaled scalability, volumes and costs without the use of agricultural land, fresh water or crops.”
“Engineered bacteria function as “catalysts” to continuously convert waste CO2 directly into renewable fuels, including ethanol or hydrocarbons for diesel, jet fuel and gasoline. The process leverages a modular closed system that readily scales through simple replication.”
“no upstream exploration or downstream refining required.”
“At full-scale commercialization, a 10,000 acre Joule plant will produce a reserve value of 50 million barrels, equaling a medium-sized oil field.”
“Competitive Costs
The efficiencies of Joule’s process and system will allow us to meet or beat the costs of fossil fuels. We expect to deliver Joule Sunflow®-E and Joule Sunflow®-D for approximately $1.20/US gallon ($50/barrel).”
Peer reviewed research paper here…
http://link.springer.com/article/10.1007%2Fs11120-011-9631-7
And no, I am not affiliated with this company. In case you were wondering…
I agree that the achiles heal, as always, is the debt problem we face. Maybe there’s a magic bullet for that too?
“equaling a medium-sized oil field” That’s less than 3 days oil for America…. and this is referred to as a medium sized field? My scam sensors are tingling….
The thing is…. if this was a revolutionary process then the MSM would be all over it…. as they are all over the Solar Jesus — even though it has been demonstrated — Solar Jesus is a false god…..
Javier, the cost looks good. As you say now we need to know the amount of capital and material resources to install a 50 mile by 50 mile farm/factory in the US southwest.
or in Spain for EU.
I have to reply under my own comment again. No other reply buttons showing. Gail. have you ever considered switching to DISQUS commenting system? I regularly see other commenters griping about this too.
FE – I agree there’s a strong case for innovation based scams and now more than ever. I can’t help feeling there are easier ways to fleece people though. An obvious reason why the MSM are not all over some of these projects is precisely because they may actually be genuine! And as you say, they’re not into “genuine” solutions. They only preach whatever they’ve been told to preach i.e. mainstream renewables. That said, check out Joule’s accolades page…
http://www.jouleunlimited.com/accolades
plenty of recognition from Bloomberg, WSJ, TIME, Technology Review etc. There’s always a lull in media attention before full commercialisation.
There’s usually a catch to all the innovation I’ve looked at e.g. a particular function or materials issue hasn’t been solved yet. But I can’t find that here. This would literally plug in to existing infrastructure and pump out ready to use oil. A short pipeline or two may be required in some cases but that’s it. The problem I can see is that this would be collecting waste CO2 from existing coal plants and other sources. This would solve the CO2 emmissions problem associated with burning coal but you’d still need to dig the stuff up and what about the soot? In other words, every idea like this requires BAU and that’s where they all fall apart. That doesn’t mean that a resourceful military couldn’t run this operation for their own benefit. It just wouldn’t be for everyone else…
By the way, don’t you find it ironic that we’ve come full circle since the SUN was certainly one of, if not the first, god to be worshipped by earth dwellers? The bringer of life, the healer, that walks on water, that, wearing a crown of thorns, goes away leaving the world in darkness, only to return triumphantly with an army of angels to defeat the evil one (climate change) and save the true believers…
Ed – that would be nice wouldn’t it. As far as I’m concerned, there are no prohibitive resource requirements involved. Taditional renewables are far more resource intensive as are the hundreds of planned new nuclear facilities and coal plants.
I really don’t know what’s going to happen with electricity generation. I’m still watching debates over which way to go – usually nuclear versus renewables – as if they have all the time in the world and all the money they’ll ever need. These people don’t see limits. Do they know something that we don’t? Or are they just playing out their roles as everything comes down? I don’t believe that everyone at that level would be in on the lie and that adds to the confusion.
So this system would alleviate the transportation requirements we have. Or not. Someone else will have to do the math I’m afraid, maybe just for the US, that would give us a measuring stick. But what about everything else? You still need to maintain infrastructure, if not replace the whole thing. And renewables need replacing every 20 ears or so. At that scale, nothing adds up. The world needs the mother of all credit cards right now. Or a reset… I suspect we’re heading towards No. 2.
More info..
“Joule has successfully pilot-tested its platform for over two years, initiated demonstration-scale operations, and assembled a specialized team to lay the groundwork for commercial deployment. The company is moving rapidly to commercialize Joule Sunflow-E, with Joule Sunflow-D and additional hydrocarbon fuels to follow.
Joule is privately held and has raised approximately $200 million in funding to date. The company was founded within Flagship VentureLabs™, and operates out of Bedford, Massachusetts and The Hague, The Netherlands, with production operations in Hobbs, New Mexico.”
If this were possible and every country could produce their own oil requirements, then current exporter nations dependent on oil exports would lose their revenue. No one would want their product. And they would be unable to import whatever other commodities they need. That’s something to consider too.
The laws of thermodynamics still exist, and they still are true. One can easily create a system so complicated in ones head that the person thinking believes that they have a perpetual motion machine. This is one of those cases.
Yup, all we in the US would need to do is pave over the entire west – i mean Texas, Arizona, New Mexico, Colorado, Nevada, California – and BAM, there would be plenty of fuel for all our cars. (Don’t worry about where the concrete, steel, copper, etc. would come from. Don’t worry about where to grow food. Don’t worry that it would take rivers of fresh water those tanks in the add are filled with hopefluid (our registered magical chemical), not water.
BTW: If you want a real challenge, try explaining thermodynamics to the people at kurzweilai. 🙂
@Pintada You didn’t read the “ad”. This method doesn’t compete with food production. And you wouldn’t need to pave over the entire west either. I do agree that aquisition of sufficient water and waste CO2 could be limiting factors as is financing.
But this makes for interesting supplemental reading…
http://www.globalresearch.ca/the-new-water-barons-wall-street-mega-banks-are-buying-up-the-worlds-water/5383274
Javier, it seems that you believe the advertisement as gospel without thinking about it.
1. Do you really believe that they have developed some bacteria that will eat nothing except CO2, and produce no waste? I’m sorry, but there will be a feed stock, and there will be waste produced. My guess is that processed corn or soybean products are used in their bench scale device.
2. The scientific paper i read (actually, the production in gallons of diesel per acre was listed in the abstract) on the subject was very proud of the production rate that they had achieved. That production rate when used to extrapolate enough fuel production for the country mandated the use of the amount of land that I claim.
Some more magical energy sources for one to hope for and/or be deluded about:
http://cassandralegacy.blogspot.com
@Pintada Oh, I’m not deluded about so called solutions. I’m aware of the odds. I’m simply passing on what’s out there so others can make their assessment and move on which is what they’ve done.
My position is that we are heading for a crunch that will leave the world in a state of shock. Even so, I will continue to research new technology until the lights go out. Ironic, huh.
One thing though, there’s no need to jump to the conclusion that something like this – if it were viable – would instantly replace global oil production overnight or that that is the intention of the developers. That would be like expecting hydro to be the only electricity generation source in the world.
When you produce oilseed crops, 60% of the seed (after crushing) is meal, 40% is oil. The meal is feed for cows, pigs, poultry, etc., which we humans end up eating. Nearly every state is meal deficit, meaning that the meal is brought in from 1000’s of miles away – which is totally unsustainable.
If we are to bring back localized food, we will have to grow oilseed crops. It’s not a question of food or fuel, It’s food AND fuel. Biodiesel is the only drop-in fuel replacement for #2 diesel with No engine modifications. They are using Biodiesel in Minnesota and many other states year round with no issues. 80% of the cost of biodiesel is in the feedstock you make it out of. Which $$ would stay local too.
http://www.inforum.com/letters/3854256-letter-biodiesel-can-solve-puzzle
I don’t know how many acres of crops of canola (rapeseed) oil or soybean oil we would need, but I am certain it would be a lot, if we wanted to power our vehicles besides feed our animals. Biodiesel tends to be more expensive per Btu than ethanol, which is why the push has been for ethanol instead.
Not all Biodiesel is created equal, therefore not all biodiesel is unsustainable.
http://test.sustainablebiodieselalliance.com/SBA/
It takes a lot of mineral diesel to produce a gallon of biodiesel. How many circles of canola to do you raise, Dean? Let me guess …
Zero (0)
If you were a farmer, you would know how absurd that your position is.
Hello Pintanda, Yes I am a farmer in NC. And no it doesn’t take any “mineral diesel” for me to farm my crops. As a matter of fact, I run all my equipment on 100% biodiesel. Very soon I hope to raise hemp for the very same purpose. A real game changer when it comes to growing biofuels. I would recommend you be a little nicer with your comments, too.
http://www.technicianonline.com/news/article_b3b64d82-8699-11e5-a32d-77899b081be0.html
Gail, I’m a little bewildered about the lack of knowledge when it comes to biodiesel. I’m not saying that biodiesel can power today’s economy. Unless we have miracle new energy source that is a direct replacement for #2 diesel our current diesel consumption is unsustainable which I think is the overall gist of your essays. Please remember, Diesel drives our economy not gasoline. What I am advocating for is a change in the economy of how we feed and fuel ourselves. 40 billion gallons of diesel fuel are used every year in the US. If we do away with long haul trucking along w industrial farming and start making and producing our food locally- vegetables, dairy, meat, – then we could use considerably less diesel. At which point, we could grow enough bioenergy crops to supply that demand fairly easily. Let me add, the legalization of industrial hemp farming is a real game changer as well. It requires very little, if any, fertilizer. It helped win WW II.
http://www.technicianonline.com/news/article_b3b64d82-8699-11e5-a32d-77899b081be0.html
I agree that hemp legalisation would be a game changer given enough time. Wasn’t it originally demonised and banned by the Rockefellers because it competed directly with Standard Oil and Big Phama? And didn’t Rockefeller say that competition was a sin? Competition with his monopolies of course.
On another note, doesn’t around 70% of our crop production go towards feeding animals? And isn’t this an incredibly wasteful way to feed humans? Wouldn’t resources be better utilised if humans stopped eating cows and pigs and/or became mostly vegetarian?
I know, about as likely as ancient aliens dropping in to fix our problems, but hey, just a thought.
Rockefeller gave the “American Beauty Rose” speech. A monopoly is like a rose. The threatening weeds, competitors, must be killed to allow the rose to full prosper and be most beautiful.
Dean Price, this is from energyskeptic.com
“There’s not enough plants to make the required amount of biodiesel, which is only 1% of diesel fuel by volume now. It is very energy expensive to deliver because it is too corrosive to travel in oil pipelines, so rail (5 times) and trucks (20 times) more expensive have to deliver it (and ethanol). Adding additional biodiesel dispensers at the 160,000 gas stations can cost $100,000 or more for the new tanks, and 99% of these service stations are owned by Ma & Pa operations who earn more from junk food than fuel. Most importantly, most engine warranties don’t allow for more than B5 to B20, or the warranty is voided, so the essential transportation (rail and trucks) won’t touch it. There is too much more information to put into a comment, I recommend you read my article “Peak Soil: Why Biofuels are Not Sustainable and a Threat to America’s National Security.” http://energyskeptic.com/2015/peaksoil/ “
“I’m not saying that biodiesel can power today’s economy.”
So, what is your point?
And, OK so you have enough fuel to run your tractor. Where do you get your fertilizer? Since you are in Georgia you may not irrigate, but how do you pump the water that you use for processing? How do you light your home, run your other electrical equipment, etc.?
You have all of modern society with which to make this biodiesel. If that was your only energy source, there is no way that there would be enough energy. If you are claiming that you could, and you want me to believe you, please show all the energy inputs and the amount of energy derived from your canola.
Hemp is a major nitrogen user – if you want to have descent production. Where will the fertilizer come from that you use to grow that crop?
Ohhh, wait. You say that you have a farm. You’re talking about how many acres? 5? 10?
Things work differently on a hobby farm than they do on a real one.
Good points…
Also where will you get the specialized fluids that are required to operate the transmission, pistons, gear box, axles, ball joints, etc….
Can’t make those out of bio-diesel….
Interesting article here that I think demonstrates the holes are now starting to turn into floods…Money is trying to move around to find something that returns on the investment; however 0% interest rate and the ongoing deflation are making that very tough. With news like Saudi Arabia will be running a deficit soon I expect default will be the only option in the “race for the bottom”…
http://www.bloomberg.com/news/articles/2015-11-02/money-flooding-out-of-canada-at-fastest-pace-in-developed-world
It is hard to find cheery news, except when looking at US Stock Market Gains. I see the Canadian dollar is sinking against the US dollar. It is hard to see major investment opportunities in Canada, other than perhaps permaculture farms.
https://www.sprottmoney.com/blog/canada-experiences-fastest-cash-outflows-in-history-nathan-mcdonald.html
On Vancouver Island foreign buyers are buying houses the day they show up on the market. In Vancouver the average single family home is well over $2 million, most house listing in Victoria get multiple offers. Money may be leaving because of lack of oil investment opportunities but foreign money is flooding into our real estate. My guess? lots of clean water, 93% of our electricity is sustainable hydro, our governments have balanced budgets, relatively low population and we are in the sweet spot for climate change.
Since most people have not a clue that the world is about to end …. I doubt those factors are coming into consideration when they buy Vancouver property …. If they saw what many of us see here — they’d would not be buying anything in any city…
I suspect most of that is simply people wanting to own hard assets rather than being in cash, stocks or bonds… many people believe a cataclysm is coming … but they believe there will be a recovery …. property seldom goes to 0.
” 93% of our electricity is sustainable hydro” — there will be no hydro once BAU collapses — no spare parts, no way to maintain the grid….
Long term with respect to sustainability might be 6 months or a year–then too much breaks.
I agree Gail, I think our biggest threat is a break down of our banking system which will take our hydro electric system down with it. When I mentioned we are in the sweet spot of climate change I was thinking of the firs trees I brought down this year. What used to take a fir tree 200 years of growth is now happening in 42 years! The trees now grow continually now with no dormant season and maybe the extra co2 in the atmosphere helps as well. All good for a wood powered future.
How’s things in the tar sands business these days Jarvis?
My guess is things will really get ugly in 2016 if prices don’t get into the $60 -$70 level. Remember the brent crude price is for the good stuff – bitumen is kinda like taking the road in front of your house and turning it into fuel. It takes a lot of natural gas to hydrogenate it and then you wind up with mostly jet fuel or diesel. I have two family members working the oil patch, one’s a fracker and one works at a SAG – d site. Both use expensive extraction methods and the product they produce pays around 30% less per barrel than the sweet crude. Needless to say they are way under their cost of production. I’m sure the XL pipeline is DOA as is the pipeline through BC to the Asian market but now it’s Energy East! Maybe this is a good thing as we’ll have some tar oozing out of the river banks so we can patch our canoes as we paddle by in a few years!
“It is hard to see major investment opportunities in Canada, other than perhaps permaculture farms.”
Ha! That is the best vote of confidence I’ve had in weeks. A permaculture-ish farm is the most important of three income-earning endeavours that I am moving to. (Why three? Because I don’t ever want all of my eggs in one basket again.)
Putting up some defense for Canada: We have a generally well-educated population. There is potential for some interesting innovations when the innovators are freed from the resource economy. In what sector these innovations will come, I’m not really sure.
Dear Gail, Long time no see! Hope you are well. Just read your piece! Excellent. My only question is whether the ongoing technology revolution around us – solar, new batteries, digital, bio, nano etc – will not be able to give us the productivity increase needed?! I agree with you that redistribution of income is a tough issue – experiencing as we do that many of the new inventions are made by startups and benefitting a few people, while wages are suppressed. So my bet – or let us call it hope – would be that technology opens up opportunities that are quite unique. If that is right the main issue seems to be one of income distribution. Not an easy one, I agree. But easier to deal with than absolute limits. Warm regards Anders
3 nov 2015 kl. 21:13 skrev Our Finite World :
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Dear Anders,
It is good to hear from you. It has been a while since I visited you in Sweden.
I am doubtful that the ongoing technical revolution will be able to give us the productivity increase needed. For one thing, we are pretty much out of time. For another thing, solutions such as these tend to have heavy debt requirements and significant requirements for materials available only through international trade. Thus, they tend to exacerbate our debt problems and they are not very resilient if there are interruptions in international trade.
I would think that in Sweden, your best renewable options might be the use of wood and the use of cogeneration using wood to provide combined heat and power. Hopefully, these options will continue to be available in the future, as well. It is easy to think that the “grass is greener on the other side of the fence.” New solutions as still expensive–Sweden is not a good location for solar energy, for example. Tried and true solutions are the ones that are likely to be around longer, and are more likely to be available with local resources.
Gail, Sweden is not good for PV but it is good for stored solar thermal for winter heating. Those looong summer days are prefect to heat a big chunk of dirt/rock with some insulation around it for use in the winter. If I were Swedish I would be investing cheap current day energy into building such systems as they will last basically forever, so I have them when energy for heating is unavailable.
@Ed
I’ve never heard of anyone using this kind of energy. Do you have an example on where it is used comersially.
It’s pretty common to have geothermal heating in Sweden. Since the rock on a depth of 100 m is approximately of the same temperature as the yearly average of the air temperature you can use a reversed heat engine to get cheaper heating. This is of course far from as effective as the geothermal heating they have on Iceland where they use the heat from volcanic activity.
@ Anders Wijkman
I think wood is the best way to use the sun in Sweden. You get stored solar energy. Solar cells + batteries are simply to expensive. You get on average 10% real effect from the installed solar cell effect. Furthermore, the effect we receive coincides in time with the period of least power use. We use 50% more electric power during the winter than in the summer. Batteries can’t store energy very well for a longer period and I fear that cheap batteries are only an Elon Musk hype. These technologies can never improve productivity. Maybe they are necessary but in that case for other reasons than productivity.
How much does a solar system with batteries cost for a house?
Let’s say USD30,000 (in places where governments don’t take people’s tax money to subsidize the ‘Green’ brigade so they can pretend to be saving the world)
I buy 8 cubic of dry split gum for USD300.
A good wetback stove costs about USD3000.
For food storage — you can build a root cellar for small money.
For light you can do what most people did pre industrial revolution and go to bed early — because you will be up early to work — or you can take USD1000 and go to Wally’s World and buy a massive amount of batteries and a few LED lanterns and flashlights… and that will last at least as long as the batteries in a solar system.
Solar systems are high tech — if one part goes post BAU the whole thing is rendered useless.
The system I have described above is low tech — and far less costly.
Screw you Solar Jesus… you are a fraud in so many ways.
You probably get the best low tech heating from a masonry heater. The bigger the more efficient. If they are big one fire per day is enough to keep it warm. This is also a good quality heat since it spreads by radiation. The standard central heating systems with radiators are actually based on convection and not radiation. This doesn’t give the same comfort.
Christopher, here is an interesting reference it talks about the Netherlands and thermal storage.
http://www.districtenergy.org/assets/pdfs/2010AnnualConference/PROCEEDINGS/TUESDAY-TRACK-B/4B2Worthington-Seasonal-Storage-IDEA-Presentation.pdf
Thanks! Looks interesting.
and the flip side works too
http://www.utilitydive.com/news/ice-ice-energy-the-hot-market-for-cooled-liquid-energy-storage/408356/
Margins are good for the two dominant providers of cooled liquid storage, which uses low-priced nighttime electricity to freeze or cool a liquid and then utilizes the chilled liquid to help offset electric air conditioning loads when power prices peak during the day.
If I was Sweden Ed I would be closing the door to mass immigration first and foremost.
I can’t believe that stored solar thermal for winter heating would be all that helpful for Sweden. I can see it for a place with hot days and cold nights, but heat dissipates over a period of months. The stored heat won’t really be there when people need it.
Also (if it weren’t for the current influx of immigrants), Sweden would have little reason to be building a lot of new housing. It would be hard to retrofit big pieces of stored solar thermal into homes that are already built, I expect.
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Thanks for the new article!
Great article Gail, as always
Yes, thanks Gail.
I enjoyed (maybe not the correct word) this post very much. Not so much for any new insights but for the professional and intuitive way our economic predicament is brought together in an (for those who choose to understand) easy to comprehend way.
For those who continually scream that the printing presses will solve everything, they need to visit or revisit Chris Martinson’s “Crash Course”. Relearn not so much how money is created though that is important but how money is destroyed. How it leaves the system.
Governments are but pawns in a Frankenstein they created since the era of cheap energy and rampant growth, led to overpopulation, uncontrollable consumerism and beasts of banking systems and stock markets.
Governments have but one roll now in the economic system and that is to maintain the trust of the minions. They do that with outright lies and manipulation of statistics. While they maintain “trust” they can assume the debt of insolvent businesses to keep the boat afloat. When the trust begins to evaporate so will the world as we now know it.
The Social Credit Party of Alberta in the 1930s argued that if wages were too low to provide sufficient consumption demand, the state could make up the difference by credits to consumers. What’s the mathematical or technical problem with this solution?
Wages are not too low at the elite worker level. Also wealthy capitalists have never had it so good. Governments have further rewarded them with huge subsidies, tax credits and laws that extract wealth from the bottom 90% through gotcha add on fees. While prime interest rates are vey low, how can you justify usury rates on credit cards that are needed by non-elite workers to get by because of their low wages?- how can you justify telecom fees, subscription media and workers tools such as software subscriptions and increasing transportation costs to travel to and from work?
What we have now is the end result of decades of stacking the deck by those empowered. The solution is new deal level taxes on those who have been doing the deck stacking along with credits as you suggest to the rest.
If we have intact factories, oil fields, educated work force and just need to get them all moving then deficit spending or social credit work. If all of those are missing and there is no hope of finding nice new oil fields. Then debt or credit have nothing to act on.
I think the problem with the government making up the difference with credits to consumers, when demand is too low, has to do with the wealth of the government, and its ability to do this. If it simply prints more currency, the value of its currency is likely to drop relative to other currencies, making it more difficult for everyone, including those with the newly printed currency, to buy goods from abroad. If it taxes other workers to provide the funds to the consumers with low income, the gain in purchase with low incomes will at least partly be offset by reduction in purchases by those with high income. There will be some benefit, however.
If the economy is truly independent, and produces all of the goods it uses, the government could theoretically redistribute the use of these goods. Redistribution would tend to take away the incentive for hard work, since without redistribution, those who work hardest, and receive the highest wages, would get most.
The hard work is an energy issue: one can not recieve low compensation for hard work for very long. The system finally implodes because we have less and less energy to solve the problems that accumulate with the rising complexity.
When more and more energy must be invested into protection of the property and getting the proceeds (lawsuits, debt collection etc.), the given production activity becomes less and less profitable even more. The too low prices mean that there are no reserves for the abovementioned protection and enforcement measures. The nature of the implosion is that the parties of the cotracts are becoming more and more distant one to another.
The legal system is one of the kinds of the overhead of the system, not too different from healthcare.
I agree. And the hierarchical system is in some ways a way to get around the lack of adequate energy in total. If there is plenty of land and other resources, everyone can have enough for their needs, and the situation is close to equality. Once there is not enough to go around, the ones with the land and with the accumulated buildings/equipment made with fossil fuels have an advantage over those with less. Even education accumulated through the use of energy has been helpful in the past. Now it is less helpful, for many reasons.
This chart comes from Charles Hugh Smith and it shows the debt to GDP ratio levels of many of the major eCONomies and they look real bad. China has a whopping debt to GDP ration of 282% vs the USA which is 269%.
http://www.oftwominds.com/photos2015/china-debt-GDP.png
Actually, the chart comes from this McKinsey study. http://www.mckinsey.com/insights/economic_studies/debt_and_not_much_deleveraging The US number has subsequently been revised upward by 20 points, based on this article. http://www.zerohedge.com/news/2015-10-11/fed-revises-definition-total-credit-unexpectedly-discovers-another-27-trillion-debt
Your point is correct, though, about China’s debt level being very high. It was not long ago that “developing” countries had low debt levels.
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