We are at Peak Oil now; we need very low-cost energy to fix it

This past week, I gave a presentation to a group interested in a particular type of renewable energy–solar energy that is deployed in space, so it would provide electricity 24 hours per day. Their question was: how low does the production cost of electricity really need to be?

I gave them this two-fold answer:

1. We are hitting something similar to “Peak Oil” right now. The symptoms are the opposite of the ones that most people expected. There is a glut of supply, and prices are far below the cost of production. Many commodities besides oil are affected; these include natural gas, coal, iron ore, many metals, and many types of food. Our concern should be that low prices will bring down production, quite possibly for many commodities simultaneously. Perhaps the problem should be called “Limits to Growth,” rather than “Peak Oil,” because it is a different type of problem than most people expected.

2. The only theoretical solution would be to create a huge supply of renewable energy that would work in today’s devices. It would need to be cheap to produce and be available in the immediate future. Electricity would need to be produced for no more than four cents per kWh, and liquid fuels would need to be produced for less than $20 per barrel of oil equivalent. The low cost would need to be the result of very sparing use of resources, rather than the result of government subsidies.

Of course, we have many other problems associated with a finite world, including rising population, water limits, and climate change. For this reason, even a huge supply of very cheap renewable energy would not be a permanent solution.

This is a link to the presentation: Energy Economics Outlook. I will not attempt to explain the slides in detail.

Slide 1

Slide 1

Slide 2

Slide 2

Some people falsely believe that energy supplies are “only needed for industrial purposes.” Energy supplies are, in fact, needed for many things: cooking our food, keeping our homes warm, and creating the clothing we expect to wear. It would be impossible to feed, house, and clothe 7.3 billion people without supplemental energy of some kind.

Slide 3

Slide 3

Slide 4

Slide 4

Slide 4 suggests that the world economy is heading into recession, because recent growth in the use of energy supplies is very low recently. Another sign that we are headed into recession is that fact that CO2 emissions fell in 2015. They usually don’t fall unless a global crisis exists. Emissions fell when the Soviet Union collapsed in 1991, and they fell during the economic crisis in 2008. Perhaps the world economy is hitting headwinds that are not being picked up well in conventional calculations of GDP growth.

Slide 5

Slide 5

Slide 5 shows a chart I put together, using data from several different sources, showing how growth in energy consumption has compared with growth in GDP. Growth in GDP tends to be somewhat higher than growth in energy consumption.

Economic growth (and growth in energy use) was low prior to 1950. There was a big jump in economic growth immediately after World War II, in the 1950-65 period. There was almost as much growth in the 1965- 75 period. Since 1975, economic growth has generally been slowing.

Slide 6

Slide 6

Between the years 1900 and 1998, the use of electricity rose (black line) as the cost of electricity fell (purple, red, and green lines). Electricity consumption could rise because it was becoming more affordable. Rising electricity consumption allowed the economy to make more goods and services. Workers (with the use of electricity) were becoming more efficient, so wages could rise. With higher wages, workers could afford more products that used electricity, such as electric lights for their homes and radios.

If electricity prices had risen instead of fallen, it seems doubtful that this pattern of rising consumption could have taken place.

Slide 7

Slide 7

The comments in Figure 7 represent my own view. It is based on both theoretical considerations and historical relationships. Many who have studied the economy believe that energy is important for economic growth. In my view, the real need is for cheap-to-produce energy, not just any energy. If cheap energy is not really available, then adding more debt can somewhat make up for the high cost of energy production.

Debt is important because it makes goods affordable that would not otherwise be affordable. For example, having a loan for a house or a car makes a huge difference regarding whether such an item is affordable.

Even when energy products are cheap, debt seems to be needed to get oil or coal out of the ground, or to make a new device such as a wind turbine. Part of the problem is the cost of the capital equipment needed to extract the oil or coal, or the cost of the wind turbines themselves. Another part of the problem is paying for factories to make devices that use the energy product. A third problem is making it possible for users to afford the end products, such as houses and cars. It is much easier to borrow the money for a new tractor, and pay the loan off as the tractor is put to use, than it is to save money in advance, using only the funds earned when farming with simple hand-held tools.

Slide 8

Slide 8

I mentioned the need for $20 per barrel oil on Slide 7. This is a very inexpensive price. Slide 8 shows that the only time when oil prices were that low was prior to the mid-1970s. (Note that the amounts in Slide 8 have already been adjusted for inflation, so my $20 per barrel target is an inflation-adjusted amount.) The cost of oil production is now far above $20 per barrel. The sales price now is about $37 per barrel. This is below the price producers need, but still above my target price level.

Slide 9

Slide 9

Slide 9 explains where I got my $20 per barrel price target. Back prior to 1975–in other words, back when oil prices were generally low, $20 per barrel or less–the increase in debt more or less corresponded to the growth in GDP. Once prices rose above $20 per barrel, the amount of debt needed to produce a given amount of GDP growth rose dramatically.

Slide 10

Slide 10

Slide 10 shows interest rates for US debt with 10-year maturity. These interest rates often underlie mortgage rates. As interest rates fall, homeowners can afford increasingly expensive homes. If shorter-term interest rates fall as well, auto loans become cheaper too.

Slide 11

Slide 11

The value to society of a barrel of oil is determined by how many miles it can make a diesel truck go, or how far it can make an airplane fly. This value to society is more or less fixed. The only change is the small increment each year from efficiency changes, making a barrel of oil “go farther.”

In the 2000-14 period, the cost of new oil production was increasing very rapidly–by more than 10% per year, by some estimates. The rising cost of oil production occurred much more quickly than efficiency changes. The result was a falling difference between the value to society and the cost of production. When oil prices are high, oil-importing nations tend to suffer recession. When oil prices are low, oil-exporting nations find it hard to collect enough taxes to support their many programs.

Slide 12

Slide 12

The fact that we need energy for economic growth means that we somehow must obtain this energy, even if doing so costs more. The big run-up in oil prices is a major reason for the historical run-up in debt levels. China’s big build-out of homes, roads, and factories was also financed by debt.

The higher cost of oil affects many things that we don’t think are related, including the cost of building new homes, the cost of building cars, and the cost of building roads. As consumers are forced to buy increasingly expensive homes and cars, and as governments find that the building of roads is increasingly expensive, more debt is used. The terms of loans are often longer as well, to hold down monthly costs.

If we still had cheap oil, this oil by itself could provide a “lift” to the economy. An increasing amount of debt can “sort of” compensate for the absence of cheap oil.

The problem we encounter is that neither cheap energy nor the continued run-up of debt is sustainable. Cheap energy tends to change to expensive energy, because we use the cheapest sources first. The continued debt run-up becomes more and more difficult to handle, unless interest rates fall lower and lower. At some point, interest rates can’t fall enough, and the whole pile of debt tends to collapse, like a Ponzi scheme.

Slide 13

Slide 13

I gave this talk on December 15; the first increase in interest rates took place on December 16. With rising interest rates, we suddenly have “the prop” that was attempting to hold up economic growth taken away.

We need ever expanding debt–that is, debt rising faster than GDP levels–to try to keep the world economy growing, so that the whole pile of debt doesn’t fall over and collapse. If we are to have non-debt growth in the future (because we are reaching limits on debt), it needs to again come from cheap energy alone. We need to get back to something similar to the low-cost energy that fueled the economy before the debt run-up.

Slide 14

Slide 14

Most of us have heard the Peak Oil story, and assume it represents a reasonable view of where we are headed. I think it is close to 180 degrees off course.

Slide 15

Slide 15

M. King Hubbert talked about a very special situation–a situation where another cheap, abundant fuel took over, before fossil fuels began to decline. In this particular situation (and only in this particular situation), it is reasonable to assume that production will follow a symmetric “Hubbert Curve,” with half of the production coming after the peak, and half beforehand. Otherwise, the down slope is likely to be much steeper.

Many peak oilers missed this important point. We certainly are not in a situation today where another very cheap fuel has taken over.

Slide 16

Slide 16

Slide 16 represents what I see as the predominant “Peak Oil” view of the oil limits situation. Some individuals will of course have different opinions.

Slide 17

Slide 17

Peak oilers certainly did get part of the story right–at some point, the cost of oil extraction would rise. What they got wrong was how the whole scenario would play out. It turns out, it plays out pretty much the opposite of what most had supposed–that is, with stagnating wages, loss of buying power, and prices of all commodities falling because of lack of “demand.”

We seem to be hitting energy limits, right now. That is why debt is such a problem, and it is why prices of many commodities, including oil, are far too low compared to the cost of production.

Slide 18

Slide 18

Slide 18 shows the fall of commodity prices up through 2014. The fall in commodity prices has continued in 2015 as well. The story we frequently hear is about low oil prices, but there is also a problem with low natural gas prices. Coal prices are low now too, and, in fact, many coal producers are near bankruptcy. Prices of iron ore, steel, copper, and many other metals are very low, as are prices of many kinds of staple foods traded internationally.

Slide 19

Slide 19

The problem with low commodity prices is that there are many loans that have been taken out to support their production. There is a significant chance of default, if prices remain low. Also, low commodity prices affect asset prices–for example, prices of coalmines, or prices of agricultural land. As the prices of commodities fall, the price of the land used to produce those commodities falls. When this happens, it becomes difficult to repay the loans on the property.

Slide 20

Slide 20

Peak Oilers were right about the cost of production continuing to rise. What they missed was the fact that prices would at some point fall behind the cost of production because of affordability issues. Low prices would then bring the economy down, as it did in the Depression in the 1930s, and in quite a few earlier collapses.

I think of increased demand, provided by debt, as being like a rubber band. Just as a rubber band can stretch for a while, the price of oil can rise for a while, fueled by more and more debt. At some point, debt can’t rise any higher–the rate of return on investments made using debt is too low, and defaults become too frequent. Instead of continuing to rise, commodity prices fall back. Market prices of commodities fall to much lower prices than the costs of production.

In order to get oil prices up higher, the wages of factory workers, restaurant workers, and other non-elite workers need to rise, so that they can afford to buy nice cars and nice homes. Commodities of many types are used both in making homes and cars, and in operating them.

Slide 21

Slide 21

If space solar (or for that matter, any renewable energy) is to be helpful, it needs to be very cheap, so that products made using renewable energy are affordable.

If the replacement energy source is cheap enough, perhaps there will not be a huge run-up in debt to GDP ratios, to finance the new devices used to provide electricity or other energy.

We are encountering problems now, so we need a replacement now, not 20 or 50 years from now.

Slide 22

Slide 22

We cannot expect the cost of electricity production to be more than the current wholesale selling price of electricity. Thus, it needs to be four cents per kWh or less. Ideally, the price of electricity should be falling, as in Slide 6.

Another consideration is that we need to be able to operate our current vehicles using a liquid fuel, made with electricity, because of the time and materials involved in switching over to electric vehicles. This requirement likely reduces the maximum cost of electricity even below four cents per kWh.

Slide 23

Slide 23

It is possible to run into many different kinds of limits, over a period of time. In my view, the first limit we reach is an affordability limit. We can tell we are hitting this limit when high prices reverse to low prices, as they have done since 2011. The fact that prices are continuing to fall is especially worrisome.

Slide 24

Slide 24

There has been a popular myth that it is OK for energy costs to rise. We will just choose the least costly of the high-priced alternatives. This approach doesn’t really work, because wages do not rise at the same time.

Also, we have to compete with other countries. If their energy costs are cheaper, their manufacturing costs are likely to be lower.

Slide 25

Slide 25

If conditions existed that allowed oil prices to rise endlessly (in other words, rising wages of non-elite workers together with debt that could spiral ever higher, as a percentage of GDP), we wouldn’t really have a problem–we could afford increasingly expensive substitutes.  Unfortunately, the story of ever-rising oil prices is simply fiction. It is a pleasant story, but not really true. I explain some of the issues further in “Why ‘supply and demand’ doesn’t work for oil.”

1,585 thoughts on “We are at Peak Oil now; we need very low-cost energy to fix it

  1. Dear Artleads, MG, Van Kent, Chrisiqn

    Thanks for your comments on the notion of ‘complexity’. A few responses from me, which aren’t meant to be particularly argumentative. Just thinking out loud.

    Complex vs. complicated. There is an element of truth here, but I don’t think it is the whole truth. For example, the human genome has around 20,000 genes which code for proteins. But in our bodies we may have 6 million microbial genes which code for proteins. Now it is widely accepted that ‘humans have outsourced digestion to the microbes’. The microbes also take care of much of our immune function. But we still have this nagging suspicion that we are more complex than microbes. Besides just our nature to focus on Number One, what might account for our nagging suspicion? I think it has something to do with degrees of freedom of action. We think that a microbe pretty much does what it is programmed to do. It’s like a computer program with a whole bunch of subroutines….the subroutines reliably and predictably do what they are supposed to do. We think that humans can behave in unpredictable ways.

    This goes back to my point about Daniel Kahneman’s separation between fast thinking and slow thinking. We believe microbes can ONLY engage in fast thinking, reacting to situations in stereotypical ways. We like to think that we ourselves are more thoughtful creatures, able to consider all sides of the issues and make wise decisions. Only pessimists like George Mobus think that homo sapiens have very little sapience. So I think that an important aspect is the degrees of freedom that the actor has. And I will agree that humans have more degrees of freedom than microbes.

    All thought is harmful. It’s hard to argue with that. There is a long Eastern tradition of meditation which emphasizes just experiencing what is happening, not trying to hold onto it. Not grieving when it is gone. I can see some benefits to such practice, but I continually behave as if there really is a tomorrow. Which leads me to notions of using some of today to build structures which will be useful tomorrow.

    Processing information. I like this, but don’t necessarily think it captures everything. For example, consider the mitochondria and the cell proper. The mitochondria can be damaged by antibacterials, so there is probably truth to Lynn Margulis theory that mitochondria are captured bacteria which are now symbiotic with the cell proper. The mitochondria can make usable energy out of raw materials. Nothing else in our body can do that (to my knowledge). I am sure there is information processing, but the physical capabilities are probably also important. When a man and a dog hunt, the dog brings some physical gifts that humans don’t have, such as acute smell. Similarly, a falcon and a man bring different physical gifts to hunting. By the way, did you see the recent scientific study on the ‘sense of self’ of dogs. When you put a mirror in front of a dog, it tends not to recognize itself. A few creatures such as dolphins do recognize themselves. So theorists come up with elaborate theories about ‘sense of self’ and build castles in the air based on that. But it turns out that if, instead of a mirror, you present the dog with smells, it can and does recognize its own smells. Which just proves that dogs are like humans….they just use different senses. You can buy a book called What Plants Know, which explores the sensory world of plants. So perhaps it is better to say that a complex system involves many component parts which are able to accomplish a variety of physical and information processing feats that no individual component could perform.

    Tainter’s definition: ‘ number and distinctiveness of its parts’. If we adopt Tainter’s approach of counting roles, the microbes win hands down. Yet if we think that complexity has something to do with resilience, then the theory falls apart. Microbes have been around for billions of years, and may have come from outer space. A cubic meter of soil is an extraordinarily diverse community, and has great resilience, as attested by its survival over such a long time period. BUT, humans with heavy equipment can easily compact the soil and do grievous damage to the community. Or the humans can flood the soil with synthetic fertilizers and fungicides and poisons of various kinds and do grievous damage. IF a definition of complexity implies something about vulnerability, we would have to admit that the microbial community in the soil is vulnerable to humans commanding fossil fuels.

    I don’t know if this makes any more sense. I’m certainly not about to try to give a comprehensive definition of Complexity.

    Don Stewart

    • Don,
      Complexity is indeed a very complex topic (yes!) but I’ll nevertheless try to throw my 2 cents, hopefully understandable.

      One cannot talk about compexity without defining the perimeter of the entity considered.
      If we define an entity as a number of cooperating parts and sub-parts on the one hand,
      and on the other hand suppose that cooperation takes place only when the total energy dissipated by ‘the group’ is superior to the sum of the energy dissipated by separate parts,
      then it makes sense that increased complexity goes along with increased dissipated energy.

      According to the MEP law, the dissipative structures are always trying to dissipate as much energy as possible. Not surprising then that they try to increase their complexity, which in fact means they try to encompass as many parts as possible, that cooperate together.

      That’s why human society dissipates, by unit of weight, roughly one order of magnitude more than a single individual, which itself dissipates more than a single cell, etc…
      If you remember the chart by Eric Chaisson:

      • Stefeun
        Thanks for the reminder.

        Lets consider waste heat. The article at Resilience complained about burning natural gas, which can heat materials to very high temperatures, for warming water for showers. The entropy produced is proportional to the difference between the heat of the burning gas and the temperature of the water we want to use (I think). So it’s like using a sledgehammer to drive a tack.

        The way Nature usually works is to set up a chain of consumption where intermediate waste is used as the input into the next step in the chain which ultimately uses a high percentage of the original exergy. So the calories go into the stomach and microbes disassemble the fiber that humans can’t digest and leave some residue which is used for essential human needs such as short chain fatty acids. If the humans then make humanure, even the residual is used again and more energy is extracted.

        So if we look at the Circular Economy project of the Ellen MacArthur foundation, that would be a step up in complexity from the ‘once through and throw away’ model which dominates industrial society today. (Whether we can actually design and run such an enterprise is an open question.)

        So it seems that in addition to measuring entropy, we would also need to sort the entropy at each stage into what is lost as waste heat and what is used as part of a next stage in production.

        Don Stewart

        • Don,
          I don’t believe in circular economy because I don’t think that our thermo-industrial civilization can be nearly as efficient as Nature itself, that uses mostly chemical processes. We cannot duplicate Nature, we’d better try to re-inset ourselves into it (ie HG lifestyle).

          Secondly, re-use of a part of the waste of a previous process would require a totally different way of accounting, as in our current system the energy input is paid for at the first step level, only. I don’t think that, where we are today, we can change anything in the accounting rules.

          • Stefeun
            There ARE examples of the intelligent reuse of waste heat. But I agree that most waste heat is lost forever. But IF we were able to use more of the exergy to do useful work, then we would have built a more complex society, I think.

            Let’s look at the production of a calorie to fuel humans. I’ll be using some data and ideas from The Hidden Half of Nature. In 1997 Americans ate 500 grams of carbohydrates per day. In 1909 we ate 500 grams of carbohydrates per day. In 1909 Americans had few chronic diseases. By 1997 most adult Americans had a chronic disease. At the present time, half of the Americans who live to the age of 85 have Alzheimers. In 1909 infectious diseases were a major cause of death. By 1997 infectious diseases were uncommon. In 1909 obesity was uncommon. By 1997 most adult Americans were overweight or obese.

            In 1909 Americans ate a lot of fiber….so we had a high carbohydrate/ high fiber diet. In 1997 we had a high carbohydrate/ low fiber diet. Taking the fiber out of our food and using the nutrient stripped residual to make industrial food greatly increased the consumption of energy in the food system and greatly increased the GDP associated with food production. It also, obviously, resulted in bad health which powered the health care industry, which greatly increased GDP until now medical care is one fifth of our economy.

            David Montgomery recounts what happened to him and his wife:
            ‘When Anne decided to change her diet, I wasn’t thrilled….Cancer lent gravity to her argument….I now see that my normal diet included way too many simple carbohydrates—plenty of bread, crackers, beer, and wine…

            Putting in our first vegetable beds set us on the path to change our diet. Initially, we weren’t thinking of cancer or cholesterol or anything like that. Awash in homegrown produce, however, we began eating a lot more vegetables as main courses. And because we ate more things from the garden, we ate less meat, cheese, and bread, and hardly any boxed things from the cupboard. And after a while, by changing what I ate and deciding to walk the two and a half mile roundtrip to work each day, my health dramatically improved.’

            Now I pose the question: Did Montgomery and Bikle simplify their life, or make it more complex? My answer would be that they traded one kind of complexity (industrial food and industrial health care) for another kind of complexity (biological complexity with microbes playing a major role). It’s clear that the old lifestyle burned a lot more fossil fuels, and so is higher on a scale which equates complexity with entropy production. But the facts scream to us that the old way was insanity.

            So, as a practical matter, I don’t think simply measuring entropy produced is very helpful. If we say, ‘first, the actions have to be sane’, then a lot of entropy and GDP producing activities need to undergo some serious changes.

            Don Stewart

            • Thanks for that very eloquent post on “trading complexities” – that’s why I think people in very different setting might have future beyond the fossilrush version of todays civilization.

        • And of course, it went to the wrong place – I was specifically referring to Stefeun’s post.

          • Thanks Pintada,
            (your comment went in the right place)
            this was not my own thinking, rather a trial to see how Tainter’s statement could be explained by basic principles as set out by Roddier.

        • Thanks El Mar,
          already seen it, and also gave the link I think.
          It’s one of the very seldom articles by Roddier in English language (excl. those about astronomy).

    • Dear Don Stewart,

      “microbial community in the soil is vulnerable to humans commanding fossil fuels” is a very interesting observation. In my opinion, the fossil fuel energy is required by the weaker part of the population in order to survive, i.e. the weaker part of the population uses the temporary energy to suppress the naturally strong part of the population – this way the democracy originated. Once the weaker majority of the population loses the advantage of the cheap energy, the democracy can not continue to exist and various forms of slavery or serfdom prevail, where genetically superior individuals regain on importance.

      • The United States was founded even before the use of fossil fuel energy. The US did have abundant land, and that gave more wealth to a wider range of individuals. This allowed the development of a representative democracy. In general, it does seem as though a relatively high level of energy is required for a democracy. Governments exist only because of the surpluses of an economy. This is why taxes can be collected. If a large amount of taxes can be collected, a fairly elaborate economy can be supported, including many representatives.

        I would not call the outcome of natural selection, “genetically superior individuals.” I would call the individuals “better adapted to current conditions.” These conditions keep changing. If we lose the use of fossil fuels, we will need more strong individuals–probably men. We will also need people adapted to the amount of sunlight available in the particular part of the world. I expect that we will have lost these characteristics in selection, during our brief use of fossil fuels. Going forward, selection will be in the direction of what traits are needed at that time.

      • Can you help?

        I really want to see the videos of these 1000+ rabid dogs attacking women…. there must be some great punch ups when the men rush out to defend their ladies…..

        I am standing by…..

        • FE, renown Instadoomer and in love with migrant invasion, what a combination..
          It took few days, but today the German victims were allowed on the TV networks for the first time, also today Makrel-Merkel finally backed away from standing immigration policy, likely on increased pressure from regional / Bavarian PM and these events in Cologne and other DE cities.

          • Perhaps the real and biggest factor of them all was the announced Nordic immigration shutdown, which is going to push Germany into even much difficult spot. What comes around goes around, Germans had it too good for too long on the shoulders of others..

          • I am 100% nihilist when it comes to refugees… like I said … you ain’t seen nothin yet…

            Oh so they are on TV talking about this — remember this little darlin who appeared on teevee before the gulf war?

            Then watch this — she was a complete set up job…. (Don Draper…) https://www.youtube.com/watch?v=yaR1YBR5g6U

            So 1000 rabid refugees attacking women — and not a single video …… in an era when people upload videos of their restaurant meal…

            Strange eh….

            • The statistics are somewhat like these, and getting worse: in 2007 35% of crimes in Italy were committed by immigrants (immigrants make up 8.2% of the Italian population). https://en.wikipedia.org/wiki/Immigration_and_crime

              If the stats keep on rising like this, they suggest eventually 1 in 4 Norwegian, Swedish, Finnish etc. European women will be raped.

            • Still waiting for the videos …. just asked my assistant and he says there is still nothing on this on the interweb…

              Yoo hoo —- 1000 rapists are on the loose — surely someone has a clip?

              Surely the men of Germany have massed to thwart these perverts…. where are all the twerking jack asses who upload their daily bowel movements but can’t seem to be bothered to deliver a clip of this mass rape to the yootoob.

              I want to see rapists! I want to see rapists!

              Howling screaming crazed rapists with brown and black skins….

              Show me the rapists Jerry!!!!

            • @Fast Eddy

              Sorry for the slow reply. I had to go to work.

              The headline on zerohedge was misleading, but it’s you that likes to post links to that site. To me, it’s a malware infected piece of crap.

              You asked for videos showing migrant attacks in Germany and I posted a video showing migrants throwing fireworks at people. Constitutes an attack in my book.

              The zerohedge article only mentioned one rape. If this occurred I doubt it would have been in public. Very remiss of the victim not to capture it on her cellphone, I know.

              Many women reported being sexually assaulted i.e. being touched up. This would happen in seconds and would be tricky to catch on camera.

              If you think bored, resentful young male migrants with no prospects of a job, money or getting laid are going to behave well you are guilty of the koombaya you (rightly) keep accusing others of.

            • Zero Hedge – piece of crap… really? It’s one of the few sources of information worth looking at…

              Where do you get your info — if you have better sources please let us know….

              Still waiting on the videos — I am currently in Salzburg — now imagine if I were a dark skinned man — and I raced into the street and started grabbing the asses of the very fashionable women I see walking the streets (I sometimes do have the urge…. but my wife pulls me by the leash to stop me)

              How do you think the men on the street would react to that?

              Might the smirk and say ‘oh those silly dirty Arabs — look at that fellow grabbing my wife’s ass — jolly good fun – ho ho ho — hey Omar — go grab that girl over there — she’s a hottie — ho ho ho — those Arabs’

              Or do you think that I might rather quickly be in a battle for my life fleeing down the small streets with a horde of Austrians chasing me intent on beating me senseless?

              If that were to happen do you not think at least one person might pull out an iphone and video this?

              I don’t even think I’d have to be dark-skinned to get the shit kicked out of myself — my Aryan looks would not be carte blanche to perve even a single woman.

              Now perhaps a couple of dark skinned men grabbed a women’s ass and fled before anyone could react and beat them… but 100’s — or 1000’s…… really?

              Show me the money ….. no money no honey…. no money no talk… no money no believe 1000 refugees were racing through the streets of Germany this week touching up women..

  2. I present classic examples of inbred royal with the donkey shaped head…. this is what happens when a number of generations are married off to first cousins….

    As we can see from this photo — the donkey look is a dominant gene that manifests in generation after generation….

    • And the moral of the “story” suppose to be … ?
      In fact authoritarian feudal regime balanced with powerful yet engaging local nobility and merchant class has been the best system humanity can offer, unfortunately I’m too old to be around when its rehashed version starts to return.

      • The moral of the story? Are you gonna make me do this? Surely it is obvious….

        Don’t have bang your cousin …. no matter how attractive she is and how much she desires you…. but if you can’t control yourself … and it results in a pregnancy …. make sure you get an abortion before she gives birth to a donkey headed human….

          • Somewhere in the family trees of Lagarde is a dark secret… perhaps papa kept a camel a as a mistress and they birthed an illegitimate abomination…

  3. Xabier, the irrational arguments you describe are essentially the very definition of induced cognitive dissonance. Since the PTB control the entire media spectrum, they are able to define the terms of any narrative and set boundaries for “reasonable” discourse. Like debate 101, it doesn’t matter which side is argued, as long as time honored rules are followed ie anything that is a negative can be reversed and represented as a positive, and vice versa.

    The true indicator is whatever narrative is currently being forwarded is dedicated to supporting the .2%. Throughout all history, this is the time honored test of truth. The 99.8% simply possess neither the native intelligence, resources, organization or skill sets to understand what is occurring, much less mount effective opposition to superior power.

    As I keep saying, it not only makes no sense to get emotionally tied to any of these events, it also provides a reveal that one doesn’t completely understand that macro perspective. The key to this game is to win; in order to win, you need to understand both who is playing and what the rules happen to be.

    The PTB are all about power & control – they long ago satisfied Maslow’s basic needs and no longer have any remote concept of desire for necessities like food, shelter, clothing, security, etc that the 99.8% dream about and aspire to fulfill. Rather, their days are filled with intrigue on the great chessboard called global politics.

    They know full well about our “predicament”; Gail doesn’t have to tell them which way the wind blows. That means everything we see in play today, including ongoing war in the MENA and induced migration into Europe, is part of a plan to maintain rule & order as we begin to ski down the peak oil slope.

    That’s why I advocate ignoring daily political posturing and current events – focus on the big picture. There are only TWO possible outcomes to our situation:
    – fast collapse
    – slow collapse

    As everyone knows, I’m in the slow collapse camp, not for any reasons related to wishful thinking, but careful observance of what is occurring. The PTB are going to devalue, they are going to impose price controls, they are going to effect rationing, and they are going to clamp down on association/travel.

    I’m fully committed to this position and see no reason why order cannot be effectively maintained. That’s because not only do the 99.8% lack the essential ability to control their destiny, but they are very easily satisfied. As we already see, extremely low energy devices can be utilized to keep people entertained. As long as they are fed and adequately sheltered, I fail to see where social disruption would occur,

    • Over time, I’ve gained more appreciation for the French & Italians, while becoming more disdainful towards the British & Germans. It’s sort of ironic, because I was/am an SS poster boy, being 6’1″, blonde/blue eyed and 50/50 English/German descent.

      Perhaps the Brits & Germans had more gonads prior to WWI wiping out their best, but they are truly pathetic specimens these days. They retain all the servile, earnest desire to please their superiors that has long been noted, yet seemingly have no clue that both are vassal states of the USA. As such, it really doesn’t matter a whit what they say or think – they are going to have demographic change shoved down their throats to satisfy higher goals.

      The French are a weird case, because Algeria was actually part of the French Republic up until 1962:

      Italians are benefiting from the their lack of overseas empire (except for Ethiopia) by seemingly have the least amount of immigrants – at least from what I can tell. IOW, Germany gives me the creeps – it’s almost all Turks/MENA in many cities. Paris has them contained in the ‘burbs, leaving the center for Euros. London/UK is on a whole different level.

      Anyway, the point remains that complaining never does anyone any good. The key is to understand not only what is occurring, but WHY it is occurring. Once you know the why, then you can deduce the motivation. Once you understand the motivation, then you can predict future moves. Hence, slow collapse, and the associated tactical steps being introduced to assure victory for COG.

    • I am wondering very much about this fact:
      7.500.000.000 human beings are living on earth.
      This blog is one of the rare outstanding platforms to discuss energy and financial themes.
      The most important questions for our survival.
      Approximately 50 user are discussing at the moment.
      Where are the other 7.500.000.950 humans?

        • As BAU continues only 1 in 10.000 takes whats coming seriously. That still leaves a few million. They don´t have internet connections, are busy, have chosen different arenas to visit regularly, or have understood the general situation and are concentrating on hunckering down. Considering.. 50 or so active commentators and not just lurkers, that´s still pretty good, good job Gail!

      • “Where are the other 7.500.000.950 humans?”
        Spawning and consuming.
        Humans adopt any philosophy that allows maximum opportunity for spawning and consuming.
        This is not a very popular blog.
        Now if Gail was just to lie her ass off and support a cheery non solution it would be very popular blog.

        • “Spawning and consuming.
          Humans adopt any philosophy that allows maximum opportunity for spawning and consuming.”

          That’s not entirely true. Most relatively well off humans reproduce at or below the replacement rate. That’s most of Western Europe, Japan and China. I think it was EO Wilson who commented on this saying that humanity is just lucky that we have this odd response to plenty.

          “This is not a very popular blog.
          Now if Gail was just to lie her ass off and support a cheery non solution it would be very popular blog.”

          How about a cheery solution? There is at least one or two that would kick the BAU can down the road for a century or two.

          That should be plenty for our collective fates to get us.

          If you want to see what I suspect is in store for the race, Google “Clinic Seed.”

          • The upper class have as many offspring as they want. They divorce a lot as well. The middle class in certain circumstances have fewer children for selfish economical reasons only. The early years are spent in education so families are put off to the later years so careers can be pursued. Consumerism…..

            The fossil fuel age enabled the the western middle classes and they took advantage of the lower infant mortality rates facilitated by technical advances in medicine and surgery. They go hand in hand with fertility rates. As the fossil fuel age ends, mortality rates will rise along with fertility rates. The rising fertility will not be able to offset mortality rates, overshoot will see to that.

            • Upper class has many offspring.
              Lower class has many offspring.
              Middle class has few offspring.

              The middle class is the only whose economy is affected by number of offspring.

              So we need western middle class living standard globalt.

            • Pre-Fossil Fuel Age the aristocracy married very young in order to produce heirs for their land and titles as soon as possible, with spares. In the Middle Ages a noble girl might start producing at 16.

              The labouring masses just reproduced without thought for the future and followed their natural inclinations, with the result that even those on decent wages were driven into despair and poverty and their children malnourished. It was said an owner of serfs was never in fear of poverty, because the source of wealth just kept on multiplying…..

              The middle classes generally waited until they had financial security before marriage and reproduction: a man of 30 to 35 would marry a woman of 18 to 21, ideally.

              By 35 a successful tradesman or professional could expect to have a secure business and income, savings, and probably to have inherited some property and cash from parents dying in their 40’s and 50’s.

              Even by the late 19th century, half of all children had lost at least one parent by the age of 9. Average length of marriage, 9 years, due to decease not divorce.

              It was only yesterday, but rather hard to imagine for those born in the Age of Antibiotics.

              I once repaired a family Bible belonging to one of the great noble families of Scotland, and the list of infant deaths written by the head of the family on the first blank pages was quite appalling – even the rich suffered dreadfully from infectious diseases (and perhaps the efforts of their doctors).

              The death cycle was this: half of all children died as babies or infants; half the rest died by 30.

              One had a much better chance of reaching 30, or even 50, if living in a rich agricultural area with a decent diet,etc, far from any doctor. I’ve read dozens of medical pamphlets from the 18th century they are hair-raising!

            • xabier, you might find Gregory Clark’s work interesting, for example http://faculty.econ.ucdavis.edu/faculty/gclark/papers/Capitalism%20Genes.pdf.

              “Before 1800 all societies, including England, were Malthusian.
              The average man or woman had 2 surviving children. Such
              societies were also Darwinian. Some reproductively successful
              groups produced more than 2 surviving children, increasing their
              share of the population, while other groups produced less, so that
              their share declined. But unusually in England, this selection for
              men was based on economic success from at least 1250, not
              success in violence as in some other pre-industrial societies. The
              richest male testators left twice as many children as the poorest.
              Consequently the modern population of the English is largely
              descended from the economic upper classes of the middle ages.
              At the same time, from 1150 to 1800 in England there are clear
              signs of changes in average economic preferences towards more
              “capitalist” attitudes. The highly capitalistic nature of English
              society by 1800 – individualism, low time preference rates, long
              work hours, high levels of human capital – may thus stem from
              the nature of the Darwinian struggle in a very stable agrarian
              society in the long run up to the Industrial Revolution. The
              triumph of capitalism in the modern world thus may lie as much
              in our genes as in ideology or rationality.

            • Thanks! Interesting! I have read that the practice of allowing up to four wives tends to increase population (Secular Cycles–Turchin and Nefedof), because it allows an even higher growth rate of the upper class population. The number of children, of course, depends on the number of wives. Poor men, who can’t really afford wives or children are “squeezed out” of having a family, but this doesn’t really reduce the overall population.

            • ” because it allows an even higher growth rate of the upper class population.”

              In a steady state situation, the upper class population can’t grow. For example, if you define it as the upper ten percent of the population. What happens as Dr. Clark found is “downward mobility” where the the social status and wealth of the offspring of the higher reproducing class tend to be less wealthy than their parents.

              “Malthusian” populations are static mainly due to food limitations. Of course in those days malnutrition due to periodic famines hugely increased the risk of dying from one of the infectious diseases so common at the time.

              Speaking of multiple wives, it was common before the modern era for a well off man to go through several wives. Childbirth got many of them. I don’t know exactly when monogamy became the norm in the UK, but it was the norm though out the time of Clark’s study.

              Clark’s work, particularly on interest rates, may help to understand how they come about. You can trace interest rates and their precursors clear back to hunter-gather times.

            • I agree that in a steady state situation, the upper class population can’t grow. But the population in a later period can represent more of the offspring of the wealthier people and fewer of the offspring of the less wealthy.

              Thanks for the tip on Clark’s work on interest rates. This is a link to Gregory Clark’s research. http://faculty.econ.ucdavis.edu/faculty/gclark/research.html

              This is a link to another page called Data on the History of the English Economy 1150 – 1914. http://faculty.econ.ucdavis.edu/faculty/gclark/data.html

              This is a link to an article called Debt, Deficits and Crowding Out: England, 1727 – 1840. http://faculty.econ.ucdavis.edu/faculty/gclark/papers/debt_deficits_&_crowding_out.pdf

              Page 22 seems to suggest an average bond interest rate of about 5%. I know that Michael Hudson talks about similar interest rates much earlier, in Killing the Host.

            • “I agree that in a steady state situation, the upper class population can’t grow. But the population in a later period can represent more of the offspring of the wealthier people and fewer of the offspring of the less wealthy.”

              There is this fragment from Secular Cycles – Turchin & Nefedov:
              The pattern of the replacement rate curve shown in figure 2.4 has interesting
              implications for the dynamics of the lord-peasant ratio during the
              fourteenth century. As previously noted, it is generally agreed that general
              population started declining soon after 1300. The numbers of the landed
              elites, on the other hand, continued to increase for another fifty years.
              We can estimate the magnitude of this increase by calculating the relative
              population of elites, starting with one in 1240 and then using the replacement
              rate to project the population change one step forward. The calculated
              relative population increases by 40 percent between 1300 and 1350.
              Naturally, we cannot conclude that the elite numbers increased by the same
              amount, because elite dynamics are governed not only by the biological
              reproductive rate but also by upward and downward social mobility. Nevertheless,
              it seems likely that during the first half of the fourteenth century
              elite numbers continued to increase while commoner numbers declined.
              As a result of both these processes, the lord-peasant ratio must have grown
              substantially on the eve of the Black Death.

              One of the thesis of this book is that during later stages of secular cycle the ratio of elite to non-elite citizens increases, initiating social tensions and triggering revolutions and wars. The same was observed in other places and historical periods (Russia XIX century, Ancient Rome, France before Revolution). We watch exactly the same process globally.

            • I talk about some of the issues that might cause the proportion of elites to grow in the post https://ourfiniteworld.com/2015/12/08/economic-growth-how-it-works-how-it-fails-why-wealth-disparity-occurs/

              I am not sure if I mentioned increased technology in that post. If I didn’t, the extra education that only part of the workers receive also tends to increase wealth disparity. It also keeps those receiving higher education out of the work force longer, adding more “$0” earnings of those not really participating in the labor force.

            • Now that you have mentioned Michael Hudson’s book” Killing the Host” let me suggest you look at the final chapter where the “Nonsense” you described MMT to me recently is explained.
              Maybe Mr Hudson’s more erudite description will change your mind to the sense it embodies? As I have done, he suggests debts have to be written out of existence, The How is subject to debate. The Why is resolved as he explains it.

            • Unfortunately, these debts are what hold up our banks, insurance companies, and pension funds. There is no way that they can be written off in the world today. And we have the same problem going forward, with more debt.

              What Michael Hudson says could be written instead as, “The Ponzi Scheme we have constructed has to collapse. There is no way it can be maintained.” How many businesses do you know that would be able to get along without banks to pay suppliers and to pay employees? This is what we would be missing! This is a huge problem.

            • “even the rich suffered dreadfully from infectious diseases (and perhaps the efforts of their doctors).”

              Remember, doctors did not believe their dirty hands were the cause of disease. If not malnourished, I bet peasants had a better rate of survival. Better physical conditioning, and delivery by someone experienced in delivering livestock instead of a doctor.

              If there are survivors, and they continue to do basic things like wash their hands when delivering infants, survival rates could be pretty good.

              If you survive birth and early childhood, the next big killer is probably wisdom teeth.

      • I see this question come up in various comment sections, whether I’m reading AGW doomerism, the arch druid, something David Stockman-ish, a radical christian site, the angry arab news service, etc..

        The answer is always the same. “We are the only ones who see the TRUTH staring us in the face!”

        Van Kent’s answer is generally typical.

        There is another answer, and it is certainly true on some of the other sites that I read.

        The answer never spoken is, “Very few people get it because, we are: totally. completely. wrong.”


    • Mark Twain — ‘If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re mis-informed.’

      The MSM is an amusement … like watching a parallel universe…. if you understand that is what it is…

      Then the door to understanding the world begins to swing open….

      I am amazed that so few people get this…. even if you explain it to them….

    • Subscribing to “slow” collapse camp chiefly for historical reasons (~precedents) and the very twisted sense of time-space humanoids are capable (too fast vs too slow comprehension of concepts), while political-social changes necessarily take time, it’s almost as another wave like structure given and revealed by the universe.

      Now, inside the realm of the “slow camp/faction” many issues come forward, e.g. are we going to experience certain period of more distributed global power aka makeshift can kicking system arrangement or is there going to be rather abrupt shift towards new hegemons perhaps even with blocks of sphere structure and/or nasty rapid sub regional fragmentation? That’s one of the tough ones, which will largely decide the suitability-success of any individual strategy taken to deal with the near term future.

      • Since I’m also in slow version camp, I would like to add my two cents on this.

        As I see it the alliences are set so far on historical basis (post-WWII order):
        US + EU + minor other NATO/OECD countries – US signed the TPP (Trans-Pacific Partnership) with countries like Canada, Mexico, Australia and Japan. It gives this block a lot of advantage. They all have most of the share of world GDP.

        On the other side of the ring are China obviously, and Russia, India. These countries are only challengers so far. China is closing ties with Russia recently and trying to build Asian Development Bank – counter part to western IMF. Some countries joined the circus (like UK), which made waves on the other side of the Atlantic. Considering China debt trap and economy forecasts, I wouldn’t bet on them. Too separated and isolated, too weak at the moment.

        Both sides are interested in controlling MENA resources. So far West is trying to limit the losses and keep diplomatic control. Recent move to start bombing without land operations is next stage. Soon it will require another invasion/war on terror. This is my guess. As long as West is controling the MENA all other are vassals. It might change one day, though.

        • If Russia has the rumored satellite blinding, radar jamming, communications ending thingy http://www.dailymail.co.uk/sciencetech/article-3151339/Russia-claims-developed-superweapon-capable-switching-foreign-satellites-enemy-weapons.html then they can win 10 out of 10 with the U.S.

          But still Russia is negotiating.. Funny thing, really.

          If neocons had that thingy, they wouldn´t negotiate, it would just be wham bam thankyou mam.

          Just makes one wonder why Putin is still having talks with Kerry. What is Kerry promising Putin?

          • They are most likely negotiating spheres of global influence, timing of “managed retreat” in various questions of global economy order etc., for instance it took past ~5yrs to allow Chinese enter inside the big honcho money club, but obviously they want and are working towards even larger share of the pie, and are hedging with their separate version of SWIFT and other systems. That’s why it is important what happens in the next say 20-30yrs, if we get local COG hermit-ism and openly antagonistic global blocs structure, you can largely kiss most of possible individual hedges of little people goodbye, you will be simply rationed, taxed, imprisoned, expropriated, chain-ganged into GMO farm, .. away. On the other hand some form interim global re-order gives more “freedom” possibilities to function.

          • I don’t believe in any such announcements. The only reliable source for this kind of information is military intelligence and they don’t share this type of information with media, unless they have special interest in doing so – either indoctrinate your own population or this is political pressure for budget.
            In either case this cannot be a real threat.

            • Oh you mean you need US Defense Secretary Ash Carter to announce it.

              Ok, US Defense Secretary Ash Carter: “New … innovation in technologies like the electromagnetic railgun, lasers and new systems for electronic warfare, space and cyberspace, including a few surprising ones I really can’t describe here” https://www.rt.com/usa/321194-carter-russia-threat-world-order/

              With such capabilities, its 10 wins to russia, out of 10 different war scenarios..

              Here is some video on the basic priciples they now seem to have mastered on a higher level https://www.youtube.com/watch?v=ZIaRACGX1KQ

            • “With such capabilities, its 10 wins to russia, out of 10 different war scenarios..”

              I’d like to see how that system performs if the first volley is chaff. A nice big cloud of little bits of aluminized mylar. Maybe it cannot see the next volley, or maybe its own laser or microwaves reflect back at it.

            • I reckon those were on the real battlefield test objectives, when Russia went in to action in Syria.

              Anybodys guess how the tests went, though. Except of course the fact that U.S. now feels threatened, that tells a lot how the tests went..

            • I still don’t believe that almost 20 times smaller economy (if you count US + EU) is capable of creating such revolutionary technology. Pentagon with their budget does nothing in the meantime?… not likely.

            • “Pentagon with their budget does nothing in the meantime?”

              Well, the F-35 will be a trillion+ programme if it is ever completed. The Pentagon also has to maintain all those overseas bases all over the world, while Russia has far fewer. The USA has also been invading a lot of countries, while the Russians have mostly stayed out of foreign engagements for the last ~25 years. A lot more overhead, plus a small number of massive programs, reduces the amount of available resources for other R&D.

              DARPA does have a lot of neat weapons and systems on the go. Autonomous four-legged robots, exoskeleton suits, bullets that compensate for crosswinds.

            • Regarding the overhead costs – true, but well, at least they have a training ground for testing their operations and hardware. US military presence gives much more flexibility and control.

              Do you believe that Russian military machine is so efficient? Well, you haven’t worked with these guys obviously.

              Sorry, I still don’t buy these stories about Russian military dominance. This is pure fear mongering for the sheeple.

            • Talk about “Free Money” The pentagon certainly thinks it has a perpetual money machine, and it does. The US can never run out of its own dollars. If you don’t believe me just look at the US military. They can’t even account for a lot of it, but why worry? The spigot is always on.

            • Pentagon budget, or do you mean contractors who became billionaires, and trillions that go mysteriously missing every now and then?

              The sad truth about U.S. military spending is this http://uk.businessinsider.com/why-navy-uss-milwaukee-broke-down-2015-12?r=US&IR=T

              The new bomber, if it flyes at all http://www.popularmechanics.com/military/research/a18130/will-long-range-strike-bomber-succeed/ the Russians new thingy made it useless already..

              The Russians build ugly, but working machines.

      • “Slow for historical reasons”……..what precedent historically is similar to what we have now?

        • We are walking on thin ice because of the economies of scales. Substantial degrowth is not possible. The fix inputs have to be covered. Grow or die. Degrowth is not avoidable as soon as cheap oil will be extracted in declining quantities because the global economie is a dissipative structure, like a hurricane.
          Landfall: http://megacancer.com/2015/11/07/landfall/

          A self-energizing deflation spiral will take place: Fast collapse! Aprrox. 70 % of all jobs are gimmicks of a so called “service society”. They will disappear very fast. Mass unimployment like in Greece all over the world, than, very soon! And nobody available to help or bail out. Besides mars!

          Fuses are burning at every corner now. It is unpossible to predict what finally will be the trigger. For sure we are in a later stage of this crazy dekadent cycle.

          Enjoy the finale month, like FE does.


          el mar

          • ‘Fuses are burning at every corner now’


            China crashing again…..

            Always have a fallback plan if things go to pieces…..

            How about this:

            – stop at the shop and buy cases of fine wine, champagne, caviar, and other fine foods (on plastic)

            – find the best hotel in town and pre-pay a 3month stay (plastic)

            – run up the room service until that is no longer available (plastic)

            – buy a bag of assorted pills (for when the food and champagne run out) – also book a high floor in case the pills down work….

            It is important to have a Plan B….

  4. http://www.maxkeiser.com/
    I’ve seen Max apparently juiced before but never this loopy. Sometime between 4-5 minutes into the latest video, he starts gargling water with his head facing up, saying a bunch of stuff and spilling water out of his mouth on to his suit. Maybe time for him to ck. into rehab.

    • max is a funny guy — he is like others good at identifying the symptoms… but never discusses the disease…

      • Yeah, I wonder if he gets so worked up because he thinks things are out of sync because of corruption by TPTB, not realizing TPTB are always corrupt but in this case it is more that they are trying to keep BAU going because of diminishing returns from energy. Him and Stacy only rarely talk about oil and when they do it is not in the context of what is discussed by peak oilers. Someone in the know needs to give them a tutorial. Unfortunately I could not find an email link.

        • I do have Max Keiser and Stacy’s e-mails, because I have been on their show two or three times. I could send them a link to my current article.

          • Does Max buy into the end of cheap to extract oil disease?

            I used to watch him — as I used to read guys like Paul Craig Roberts — great at identifying symptoms but to them the disease is corruption and stupidity….

            I wonder if someone like Max understands what the disease is but does not go there because it’s bad for ratings to discuss a problem of this nature that has no solution….

  5. Wolf Richter Jan.07, 2016

    As for inventories, what’s up next?

    “Note how declines are common this time of the year, but how last year at this time inventories began to skyrocket. It is unlikely that inventories will skyrocket to the same extent this year. If they do, it’s going to get ugly beyond comprehension. It’s more likely that inventories will rise at a pace closer to normal seasonal increases. Even those increases will inflate inventories – if there’s even enough storage capacity available – to dizzying heights by the time driving season begins.”

    “closer to normal”, sure of that? And let’s keep in mind that global consumption is on a downtrend, seasonal so far, but…

        • BREAKING NEWS!!!!

          1000+ sex attackers who escaped from Germany are reported to have shut down the Strait of Hormuz….

          Source say they have blow up 37 oil tankers effectively blocking all shipping in and out of the key oil terminal.

          There is no video evidence of this …. but trust me…. it happened…

          Stay tuned for more BREAKING NEWS….

        • READ ALL ABOUT IT!

          This just in ….

          1000+ sex attackers are now at Bucking Ham Palace and have climbed the wall and are in the Queen’s Bedroom. We don’t know what is going on in there but they are in there… all of them…

          They are crazy fellows those brown skinned men…. who knows what they might do to the queen…

          We have no video but we do have this photo of Liz as she peered out of the window of the palace bedroom…..

  6. Within the last decade, the currency war has transformed into a global trend and the rising of new major powers, like China, has challenged the hegemony of the US. This includes the competition to acquire financial dominance among the international community. In recent years, China’s Yuan has been introduced in many countries as an alternative payment for both debt and investment – See more at: http://www.thejakartapost.com/news/2016/01/07/facing-greatest-currency-war-21st-century-yuan-vs-dollar.html#sthash.2NNXcwiY.dpuf

    In the near future, the currency war, particularly, the competition between Yuan and US dollar is likely to become extremely harsh and unbearable. It seems that this beneficial strategy will be exercised by the Chinese government in the long run so as to take dominance over US dollar in the international market.

    Who will win the war and become the ultimate champion? At present, this remains unpredictable. There are still many factors that may impinge on the competition. –

    However, currency wars itself have been occurring for many years and since it is related to national interest, direct government intervention is an essential element in such a war.

    When it comes to national interest, a country will do anything to survive. This is reflected in the idea of the “struggle for survival” as interpreted by Nicholas J. Spykman, an American geostrategist, acknowledged as one of the founders of the classical realist school in American foreign policy –

    Chin Poo Yang of Cina Central Bank overheard at Mikkie Dees Duck Dive that
    “We eat anything with legs, as long not chair sitting on”

    • What has supported the current global regime “surprisingly” for several decades more than acceptable by plain logic was also the contributing fact of local/regional elites simply not working in the interest of their country/people but helping and juicing the capital out and up into the utmost global capital layer. It is both a natural process, namely aggressive greed but also organized scheme by the owners of the system. In this fashion local governments were made powerless to launch any meaningful counter strategy given the election cycle, constant media/ngo propaganda etc., some exceptions apply like Russia, Iran, China, also some Europeans hedging their bets.. but even all those countries were parted with significant portion of their wealth on several occasions, moreover the prevailing global structure was just much bigger in volume of activity and number of players.

      To resolve this situation takes extra decades, so the old ~approximate rule of international economic system tweaking (changing is larger/longer cycle) in roughly 40yrs cycles is no longer valid, or more precisely it is stretched further into the future. Also as mentioned previously China and other powerful countries have unfinished modernization projects in terms of core infrastructure, military and so on, therefore the incentive is take the abuse from the system as a necessary temporary additional taxation taking resources and time. This whole process drags on and eventually ends on a pinpoint, threshold, where the system snaps into different arrangement in unrecoverable fashion, my guesstimate based on the performance of the key players, it’s 5-15yrs away.

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