I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who understand how an economy operates. The combination leads to an awfully lot of false beliefs about the energy needs of an economy.
The primary issue at hand is that, as a dissipative system, every economy has its own energy needs, just as every forest has its own energy needs (in terms of sunlight) and every plant and animal has its own energy needs, in one form or another. A hurricane is another dissipative system. It needs the energy it gets from warm ocean water. If it moves across land, it will soon weaken and die.
There is a fairly narrow range of acceptable energy levels–an animal without enough food weakens and is more likely to be eaten by a predator or to succumb to a disease. A plant without enough sunlight is likely to weaken and die.
In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.
How should we expect an economy to behave over time? The pattern of energy dissipated over the life cycle of a dissipative system will vary, depending on the particular system. In the examples I gave, the pattern seems to somewhat follow what Ugo Bardi calls a Seneca Cliff.
Figure 1. Seneca Cliff by Ugo Bardi
The Seneca Cliff pattern is so-named because long ago, Lucius Seneca wrote:
It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.
The Standard Wrong Belief about the Physics of Energy and the Economy
There is a standard wrong belief about the physics of energy and the economy; it is the belief we can somehow train the economy to get along without much energy.
In this wrong view, the only physics that is truly relevant is the thermodynamics of oil fields and other types of energy deposits. All of these fields deplete if exploited over time. Furthermore, we know that there are a finite number of these fields. Thus, based on the Second Law of Thermodynamics, the amount of free energy we will have available in the future will tend to be less than today. This tendency will especially be true after the date when “peak oil” production is reached.
According to this wrong view of energy and the economy, all we need to do is design an economy that uses less energy. We can supposedly do this by increasing efficiency, and by changing the nature of the economy to use a greater proportion of services. If we also add renewables (even if they are expensive) the economy should be able to get along fine with very much less energy.
These wrong views are amazingly widespread. They seem to underlie the widespread hope that the world can reduce its fossil fuel use by 80% between now and 2050 without badly disturbing the economy. The book 2052: A Forecast for the Next 40 Years by Jorgen Randers seems to reflect these views. Even the “Stabilized World Model” presented in the 1972 book The Limits to Growth by Meadow et al. seems to be based on naive assumptions about how much reduction in energy consumption is possible without causing the economy to collapse.
The Economy as a Dissipative System
If an economy is a dissipative system, it needs sufficient energy flows. Otherwise, it will collapse in a way that is analogous to animals succumbing to a disease or forests succumbing to forest fires.
The primary source of energy flows to the economy seems to come through the leveraging of human labor with supplemental energy products of various types, such as animal labor, fossil fuels, and electricity. For example, a man with a machine (which is made using energy products and operates using energy products) can make more widgets than a man without a machine. A woman operating a computer in a lighted room can make more calculations than a woman who inscribes numbers with a stick on a clay tablet and adds them up in her head, working outside as weather permits.
As long as the quantity of supplemental energy supplies keeps rising rapidly enough, human labor can become increasingly productive. This increased productivity can feed through to higher wages. Because of these growing wages, tax payments can be higher. Consumers can also have ever more funds available to buy goods and services from businesses. Thus, an economy can continue to grow.
Besides inadequate supplemental energy, the other downside risk to continued economic growth is the possibility that diminishing returns will start making the economy less efficient. These are some examples of how this can happen:
- Deeper wells or desalination are needed for water because aquifers deplete and population grows.
- More productivity is needed from each acre of arable land because of growing population (and thus, falling arable land per person).
- Larger mines are required as ores of high mineral concentration are exhausted and we are forced to exploit less productive mines.
- More pollution control devices or higher-cost workarounds (such as “renewables”) are needed as pollution increases.
- Fossil fuels from cheap-to-extract locations are exhausted, so extraction must come from more difficult-to-extract locations.
In theory, even these diminishing returns issues can be overcome, if the leveraging of human labor with supplemental energy is growing quickly enough.
Theoretically, technology might also increase economic growth. The catch with technology is that it is very closely related to energy consumption. Without energy consumption, it is not possible to have metals. Most of today’s technology depends (directly or indirectly) on the use of metals. If technology makes a particular type of product cheaper to make, there is also a good chance that more products of that type will be sold. Thus, in the end, growth in technology tends to allow more energy to be consumed.
Why Economic Collapses Occur
Collapses of economies seem to come from a variety of causes. One of these is inadequate wages of low-ranking workers (those who are not highly educated or of managerial rank). This tends to happen because if there are not enough energy flows to go around, it tends to be the wages of the “bottom-ranking” employees that get squeezed. In some cases, not enough jobs are available; in others, wages are too low. This could be thought of as inadequate return on human labor–a different kind of low Energy Return on Energy Invested (EROEI) than is currently analyzed in most of today’s academic studies.
Another area vulnerable to inadequate energy flows is the price level of commodities. If energy flows are inadequate, prices of commodities will tend to fall below the cost of producing these commodities. This can lead to a cutoff of commodity production. If this happens, debt related to commodity production will also tend to default. Defaulting debt can be a huge problem, because of the adverse impact on financial institutions.
Another way that inadequate energy flows can manifest themselves is through the falling profitability of companies, such as the falling revenue that banks are now experiencing. Still another way that inadequate energy flows can manifest themselves is through falling tax revenue. Governments of commodity exporters are particularly vulnerable when commodity prices are low. Ultimately, these inadequate energy flows can lead to bankrupt companies and collapsing governments.
The closest situation that the US has experienced to collapse is the Depression of the 1930s. The Great Recession of 2007-2009 would represent a slight case of inadequate energy flows–one that could be corrected by a large dose of Quantitative Easing (QE)(leading to the lower cost of borrowing), plus debt stimulus by China. These helped bring oil prices back up again, after they fell in mid-2008.
Figure 2. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Clearly, we are now again beginning to experience the effects of inadequate energy flows. This is worrying, because many economies have collapsed in the past when this situation occurred.
How Energy Flows of an Economy are Regulated
In an economy, the financial system is the regulator of the energy flows of the system. If the price of a product is low, it dictates that a small share of energy flows will be directed toward that product. If it is high, it indicates that a larger share of energy flows will be directed toward that product. Wages follow a similar pattern, with low wages indicating low flows of energy, and high wages indicating higher flows of energy. Energy flows in fact “pay for” all aspects of the system, including more advanced technology and the changes to the system (more education, less time in the workforce) that make advanced technology possible.
One confusing aspect to today’s economy is the use of a “pay you later” approach to paying for energy flows. If the energy flows are inadequate using what we would think of as the natural flows of the system, debt is often used to increase energy flows. Debt has the effect of directing future energy flows in a particular direction, such as paying for a factory, a house, or a car. These flows will be available when the product is already part of the system, and thus are easier to accommodate in the system.
The use of increasing debt allows total “demand” for products of many kinds to be higher, because it directs both future flows and current flows of energy toward a product. Since factories, houses and cars are made using commodities, the use of an increasing amount of debt tends to raise commodity prices. With higher commodity prices, more of the resources of the economy are directed toward producing energy products. This allows for increasing energy consumption. This increased energy consumption tends to help flows of energy to many areas of the economy at the same time: wages, taxes, business profitability, and funds for interest and dividend payments.
The need for debt greatly increases when an economy begins using fossil fuels, because the use of fossil fuels allows a step-up in lifestyle. There is no way that this step-up in lifestyle can be paid for in advance, because the benefits of the new system are so much better than what was available without fossil fuels. For example, a farmer raising crops using only a hoe for a tool will never be able to save up sufficient funds (energy flows) needed to pay for a tractor. While it may seem bizarre that banks loan money into existence, this approach is in fact essential, if adequate energy flows are to be available to compensate for the better lifestyle that the use of fossil fuels makes possible.
Debt needs are low when the cost (really energy cost) of producing energy products is low. Much more debt is needed when the cost of energy extraction is high. The reason more debt is needed is because fossil fuels and other types of energy products tend to leverage human labor, making human labor more productive, as mentioned previously. In order to maintain this leveraging, an adequate quantity of energy products (measured in British Thermal Units or Barrels of Oil Equivalent or some similar unit) is needed.
As the required price for energy-products rises, it takes ever-more debt to finance a similar amount of energy product, plus the higher cost of homes, cars, factories, and roads using the higher-cost energy. In fact, with higher energy costs, capital goods of all kinds will tend to be more expensive. This is a major reason why the ratio of debt to GDP tends to rise as the cost of producing energy products rises. At this point, in the United States it takes approximately $3 of additional debt to increase GDP by $1 (author’s calculation).
Figure 3. Inflation adjusted Brent oil prices (in $2014, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all-inclusive; the other excludes Financial Business debt. Both are based on data from FRED-Federal Reserve of St. Louis.
Clearly one of the risk factors to an economy using fossil fuels is that debt levels will become unacceptably high. A second risk is that debt will stop rising fast enough to keep commodity prices at an acceptably high level. The recent slowdown in the growth of debt (Figure 3) no doubt contributes to current low commodity prices.
A third risk to the system is that the rate of economic growth will slow over time because even with the large amount of debt added to the system, the leveraging of human labor with supplemental energy will not be sufficient to maintain economic growth in the face of diminishing returns. In fact, it is clearly evident that US economic growth has trended downward over time (Figure 4).
Figure 4. US annual growth rates (using “real” or inflation adjusted data from the Bureau of Economic Analysis).
A fourth risk is that the whole system will become unsustainable. When new debt is issued, there is no real matching with future energy flow. For example, will the wages of those taking on debt to pay for college be sufficiently high that the debtors can afford to have families and buy homes? If not, their lack of adequate income will be one of the factors that make it difficult for the prices of commodities to stay high enough to encourage extraction.
One of the issues in today’s economy is that promises of future energy flows extend far beyond what is formally called debt. These promises include shareholder dividends and payments under government programs such as Social Security and Medicare. Reneging on promises such as these is likely to be unpopular with citizens. Stock prices are likely to drop, and private pensions will become unpayable. Governments may be overthrown by disappointed citizens.
Examples of Past Collapses of Economies
Example of the Partial Collapse of the Former Soviet Union
One recent example of a partial collapse was that of the Former Soviet Union (FSU) in December 1991. I call this a partial collapse, because it “only” involved the collapse of the central government that held together the various republics. The governments of the individual republics remained in place, and many of the services they provided, such as public transportation, continued. The amount of manufacturing performed by the FSU dropped precipitously, as did oil extraction. Prior to the collapse, the FSU had serious financial problems. Shortly before its collapse, the world’s leading industrial nations agreed to lend the Soviet Union $1 billion and defer repayment on $3.6 billion more in debt.
A major issue that underlay this collapse was a fall in oil prices to the $30 per barrel range in the 1986 to 2004 period. The Soviet Union was a major oil exporter. The low price had an adverse impact on the economy, a situation similar to that of today.
Figure 5. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.
Russia continued to pump oil even after the price dropped in 1986. In fact, it raised oil production, to compensate for the low price (energy flow it received per barrel). This is similar to the situation today, and what we would expect if oil exporters are very dependent on these energy flows, no matter how small. Oil production didn’t fall below the 1986 level until 1989, most likely from inadequate funds for reinvestment. Oil production rose again, once prices rose.
Figure 6 shows that the FSU’s consumption of energy products started falling precipitously in 1991, the year of the collapse–very much a Seneca Cliff type of decline.
Figure 6. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.
In fact, consumption of all fuels, even nuclear and hydroelectric, fell simultaneously. This is what we would expect if the FSU’s problems were caused by the low prices it was receiving as an oil exporter. With low oil prices, there could be few good-paying jobs. Lack of good-paying jobs–in other words, inadequate return on human labor–is what cuts demand for energy products of all kinds.
A drop in population took place as well, but it didn’t begin until 1996. The decrease in population continued until 2007. Between 1995 and 2007, population dropped by a total of 1.6%, or a little over 0.1% per year. Before the partial collapse, population was rising about 0.9% per year, so the collapse seems to have reduced the population growth rate by about 1.0% per year. Part of the drop in population was caused by excessive alcohol consumption by some men who had lost their jobs (their sources of energy flows) after the fall of the central government.
When commodity prices fall below the cost of oil production, it is as if the economy is cold because of low energy flows. Prof. Francois Roddier describes the point at which collapse sets in as the point of self-organized criticality. According to Roddier (personal correspondence):
Beyond the critical point, wealth condenses into two phases that can be compared to a gas phase and a liquid phase. A small number of rich people form the equivalent of a gas phase, whereas a large number of poor people form what corresponds to a liquid phase. Like gas molecules, rich people monopolize most of the energy and have the freedom to move. Embedded in their liquid phase, poor people have lost access to both energy and freedom. Between the two, the so-called middle class collapses.
I would wonder whether the ones who die would be equivalent to the solid state. They can no longer move at all.
Analysis of Earlier Collapses
A number of studies have been performed analyzing earlier collapses. Turchin and Nefedov in Secular Cycles analyze eight pre-fossil fuel collapses in detail. Figure 7 shows my interpretation of the pattern they found.
Figure 7. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov in Secular Cycles.
Again, the pattern is that of a Seneca Cliff. Some of the issues leading to collapse include the following:
- Rising population relative to farmland. Either farmland was divided up into smaller plots, so each farmer produced less, or new workers received “service” type jobs, at much reduced wages. The result was falling earnings of many non-elite workers.
- Spiking food and energy prices. Prices were high at times due to lack of supply, but held down by low wages of workers.
- Rising need for government to solve problems (for example, fight war to get more land; install irrigation system so get more food from existing land). Led to a need for increased taxes, which impoverished workers could not afford.
- Increased number of nobles and high-level administrators. Result was increased disparity of wages.
- Increased debt, as more people could not afford necessities.
Eventually, the workers who were weakened by low wages and high taxes tended to succumb to epidemics. Some died in wars. Again, we have a situation of low energy flows, and the lower wage workers not getting enough of these flows. Many died–in some cases as many as 95%. These situations were much more extreme than those of the FSU. On the favorable side, the fact that there were few occupations back in pre-industrial days meant that those who did survive could sometimes resettle with other nearby communities and continue to practice their occupations.
Joseph Tainter in The Collapse of Complex Societies talks about the need for increasing complexity, as diminishing returns set in. This would seem to correspond to the need for increased government services and an increased role for businesses. Also included in increased complexity would be increased hierarchical structure. All of these changes would leave a smaller share of the energy flows for the low-ranking workers–a problem mentioned previously.
Dr. Tainter also makes the point that to maintain complexity, “Sustainability may require greater consumption of resources, not less.”
A Few Insights as to the Nature of the Physics Problem
The Second Law of Thermodynamics seems to work in a single direction. It talks about the natural tendency of any “closed” system to degenerate into a more disordered system. With this view, the implication is that the universe will ultimately end in a heat-death, in which everything is at the same temperature.
Dissipative systems work in the other direction; they create order where no order previously existed. Economies get ever-more complex, as businesses grow larger and more hierarchical in form, governments provide more services, and the number of different jobs filled by members of the economy proliferate. How do we explain this additional order?
According to Ulanowicz, the traditional focus of thermodynamics has been on states, rather than on the process of getting from one state to another. What is needed is a theory that is more focused on processes, rather than states. He writes,
. . . the prevailing view of the second law is an oversimplified version of its true nature. Simply put, entropy is not entirely about disorder. Away from equilibrium, there is an obverse and largely unappreciated side to the second law that, in certain circumstances, mandates the creation of order.
We are observing the mandated creation of order. For example, the human body takes chemical energy and transforms it to mechanical energy. There is a dualism to the entropy system that many have not stopped to appreciate. Instead of a trend toward heat death always being the overarching goal, systems have a two-way nature to them. Dissipative systems are able to grow until they reach a point called self-organized criticality or the “critical point”; then they shrink from inadequate energy flows.
In forests, this point of self-organized criticality comes when the growth of the tall trees starts blocking out the light to the shorter plants. As mentioned earlier, at that point the forest starts becoming more susceptible to forest fires. Ulanowicz shows that for ecosystems with more than 12 elements, there is quite a narrow “window of viability.”
Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow “window of viability” of such ecosystems. From Ulanowicz
If we look at world per capita energy consumption, it seems to indicate a very narrow “window of viability” as well.
Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.
When we look at what happened in the world economy alongside the history of world energy consumption, we can see a pattern. Back prior to 1973, when oil was less than $30 per barrel, oil consumption and the economy grew rapidly. A lot of infrastructure (interstate highways, electric transmission lines, and pipelines) was added in this timeframe. The 1973-1974 price shock and related recession briefly brought energy consumption down.
It wasn’t until the restructuring of the economy in the late 1970s and early 1980s that energy consumption really came down. There were many changes made: cars became smaller and more fuel efficient; electricity production was changed from oil to other approaches, often nuclear; regulation of utilities was changed toward greater competition, thus discouraging building infrastructure unless it was absolutely essential.
The drop in energy consumption after 1991 reflects the fall of the Former Soviet Union. The huge ramp-up in energy consumption after 2001 represents the effect of adding China (with all of its jobs and coal consumption) to the World Trade Organization. With this change, energy needs became permanently higher, if China was to have enough jobs for its people. Each small dip seems to represent a recession. Recently energy consumption seems to be down again. If we consider low consumption along with low commodity prices, it makes for a worrying situation. Are we approaching a major recession, or worse?
If we think of the world economy relative to its critical point, the world economy has been near this point since 1981, but various things have pulled us out.
One thing that has helped the economy is the extremely high interest rate (18%) implemented in 1981. This high interest rate pushed down fossil fuel usage at that time. It also gave interest rates a very long way to fall. Falling interest rates have a very favorable impact on the economy. They encourage greater lending and tend to raise the selling prices of stocks. The economy has received a favorable boost from falling interest rates for almost the entire period between 1981 and the present.
Other factors were important as well. The fall of the Soviet Union in 1991 bought the rest of the world a little time (and saved oil extraction for later); the addition of China to the World Trade Organization in 2001 added a great deal of cheap coal to the energy mix, helping to bring down energy costs. These low energy costs, plus all of the debt China was able to add, allowed energy consumption and the world economy to grow again–temporarily pulling the world away from the critical point.
In 2008, oil prices dropped very low. It was only with QE that interest rates could be brought very low, and commodity prices bounced back up to adequate levels. Now we are again faced with low prices. It looks as if we are again at the critical point, and thus the edge of collapse.
Once a dissipative structure is past its critical point, Roddier says that what is likely to bring it down is an avalanche of bifurcations. In the case of an economy, these might be debt defaults.
In a dissipative structure, both communication and stored information are important. Stored information, which is very close to technology, becomes very important when food is hard to find or energy is high cost to extract. When energy is low-cost to extract, practically anyone can find and make use of energy, so technology is less important.
Communication in an economy is done in various ways, including through the use of money and debt. Few people understand the extent to which debt can give false signals about future availability of energy flows. Thus, it is possible for an economy to build up to a very large size, with few realizing that this approach to building an economy is very similar to a Ponzi Scheme. It can continue only as long as energy costs are extremely low, or debt is being rapidly added.
In theory, EROEI calculations (comparing energy produced by a device or energy product to fossil fuel energy consumed increasing this product) should communicate the “value” of a particular energy product. Unfortunately, this calculation is based the common misunderstanding of the nature of the physics problem that I mentioned at the beginning of the article. (This is also true for similar analyses, such as Lifecycle Analyses.) These calculations would communicate valuable information, if our problem were “running out” of fossil fuels, and if the way to mitigate this problem were to use fossil fuels as sparingly as possible. If our problem is rising debt levels, EROEI and similar calculations do nothing to show us how to mitigate the problem.
If the economy collapses, it will collapse down to a lower sustainable level. Much of the world’s infrastructure was built when oil could be extracted for $20 per barrel. That time is long gone. So, it looks like the world will need to collapse back to a level before fossil fuels–perhaps much before fossil fuels.
If it is any consolation, Prof. Roddier says that once new economies begin to form again, the survivors after collapse will tend to be more co-operative. In fact, he offers this graphic.
Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, “The Thermodynamics of Evolution.”
We know that if there are survivors, new economies will be likely. We don’t know precisely what they will be like, except that they will be limited to using resources that are available at that time.
Some References to Francois Roddier’s Work (in French)
THERMODYNAMIQUE DE L’ÉVOLUTION “UN ESSAI DE THERMO-BIO-SOCIOLOGIE” -The Thermodynamics of Evolution – Book, soon to be translated to English. Will at some point be available from the same site in English.
Roddier writes:
This is a talk I gave at the CNAM (Paris) on December 2, 2013. The title is:Thermodynamique et économie ; des sciences exactes aux sciences humaines
In this talk, I show that Per Bak’s neural network model can be used to describe an economic system as a neural network of agents exchanging money. The paper gives a brief explanation on how economies collapse.
The other talk is one I gave in Paris on March 12, 2015, for Jancovici’s Shift Project. The title is:
La thermodynamique des transitions économiques
A video of this talk is available on the web at the following address:
https://www.youtube.com/watch?v=5-qap1cQhGA
In this talk, I describe economy in terms of Gibbs-Duhem potentials (akin to chemical potentials). Money flows measure entropy flows (with opposite sign). The cost of energy plays the role of an inverse temperature. I show that economic cycles are similar to those of a steam engine. They self organize around a critical point.
The Guardian:
Each generation should be better off than their parents? Think again –
http://www.theguardian.com/business/2016/feb/14/economics-viewpoint-baby-boomers-generation-x-generation-rent-gig-economy
Yes, older people like Fast Eddy, who admit to having made a bit of money in their life, will remain better off than the younger generation. Whisper it softly, but FE is probably secretly one of those “Elders” he is always decrying.
I dub thee “fast elder”
I am not denouncing the Elders….
In fact, I am on record ad nauseam as admiring the Elders for their brilliance…. and I have stated that they have been very good rulers…. they gave us this:
http://ourworldindata.org/wp-content/uploads/2013/11/long-term-real-growth-of-gdp-in-the-us-1871-2009-visualizing-economics-645×447.png
They have given us 8 extra years since Lehman…
Someone has to run the world — is it not better to have a ruler who implements a system that allows you the opportunity to live comfortably?
Russia and China are challenging the Elders —- would you like to see them win the battle? Do you think that would improve your standard of living? Do you think that would result in a fairer more just world?
Again – I suspect the reason this topic touches a nerve is because we have been indoctrinated to believe that we live in democratic nations … these revelations turn that belief upside down…
As things begin to unravel …. particularly in the US…. and a populist leader were to emerge who gave the middle finger to the Elders exposing that they are the true power in the US and the world…. if that populist could not be removed or convinced to stop ….. things could get decidedly uncomfortable for the men behind the curtain …
They have used the shield of democracy very effectively to deflect …. but if it were made known that democracy was a sham…. the search light would land on them….
FE, fear not. Trump iis a New Yorker. New York might best be understood by the movie “The Gangs of New York”. The gangs have learned to co-exist. Trump just wants to move up a bit slightly reshuffle the organization of the gangs. He has no desire for gang warfare. As he would say “let’s make a deal”. Yes, it may be a deal you can not refuse but so what.
In my “limited” book I can trace back the workings of entity of “Elders” roughly back to the age of Napoleonic wars and surrounding “global market shenanigans” then – however some might even claim they are in fact of way older or younger pedigree. In any case, they are unlikely to survive the larger (longer) cycle reset intact in terms of today’s global consolidation of power/influence, which is due within next decades (of collapse scenario) anyway.. And from their insider perspective it prolly doesn’t matter anyway, since they must realize how they have had very good run for all those centuries, and going forward might just settle for little regional neofeudal fiefdoms.
Eddy,
“Grow or die. The Elders have done a tremendous job What would you have done better?”
I would have created a Leviathan.
Thomas Hobbes describes an all out war, a war against all. Everybody is fighting everybody. Today it manifests as growth, as fast as possible, destroying everything as fast as possible. A dog eat dog world.
Hobbes prescribed a solution to end such things, having a Leviathan. https://en.wikipedia.org/wiki/Leviathan_(book)
Having a monopoly on the use of force. Everybody who sees themselves as a contender to hold power, must consider the Leviathan.
The sovereign was a Leviathan, the imaginary friend with the beard sitting on top of the cloud was a Leviathan, the state was a Leviathan, MAD in the nuclear age was a Leviathan. Now the military industrial complex of the U.S. and the central banks are the Leviathan. Neocons tried to be the Leviathan. But they are not enough. The bankers don´t fear any of these Leviathans. We don´t have a global united idea that puts everybody in check. We only have growth. If everybody has a Leviathan, then they can´t agree on a common Leviathan that kills all contenders. Everything degenerates in a war against everybody. Humanity destroying the planet.
All considerations of peace, trade, industry begins with the concept of having a Leviathan that enforces the law. Now we don´t have anything that enforces global law, we don´t have a global Leviathan. And again Post-BAU day 1, we must consider what that Leviathan is then, that kills all other contesters Leviathans. Only by having such an idea, can peace and trade be had.
With trillions in funding, centuries of time, resources to be marvelled at, I would have created a Leviathan. A institution so big and so all powerfull, so dominant the idea, that all the small fishes who want to buy a new Ferraris to complement their ego, must consider this Leviathan before they cut down the rainforest to do so.
Laws and institutions can be made to do anything, even slow down growth or prevent the worst disasters that come with that growth. And Hobbes prescribed the solution some centuries ago, having the Leviathan. I would have started there.
Van Kent, I have been saying the same thing in different words. The worlds resources need to be owned and the owners needs to protect he/her property. This is what the king did in England when he sent the sheriff against poachers like Robinhood. The king protects biodiversity by killing off the poachers and woodsmen (those who would harvest trees).
No tragedy of the common if there are no commons. Complete enclosure. No place for the poor and homeless. Or one could say a clean and orderly society. I think Germany has not decided yet.
Hobbes was a very clever, highly cultured, and very nervous homosexual, who saw the brutality of the English Civil War of the mid-17th century and was scared to death by it.
He had very little idea of the reality of primitive societies, hence his ‘nasty brutish and short’ take on tribal life.
In old fashioned English, he was a ‘nervous Nelly’. What he loved above all was ease and comfort. Perhaps he had a point……
Interesting post, but we can dry test it on real world hard data/events/history. Perhaps Leviathan was attempted e.g. via UN with some small successes here and there. But how would you account for events like the steroid rise of China on heals of rampant enviro destruction etc. So the options are:
1/ never ever Leviathan
2/ Leviathan attempted and failed
3/ Leviathan attempted and partially failed – but resurrected in the rosy scenario future
from my “Baldric niveau” it seems the preponderance of the evidence is that the third option is a joke, the second and first options share some probabilities..
lol……Not a chance, when FE is permitted to continually promote so called “Elders” as being a legitimate, sentient and functioning entity, then anything goes…….
Freedom of speech, many different views, and all that..
I think Gail sees the merit in crowdsourcing freely from everybody. A wise decision in my opinion, censorship would prevent some good stuff from being shared.
The credit default swap market for key industries is sending up flares. This is where default insurance can be purchased against a company or country – and the place speculators bet on a company’s demise. Billionaire John Paulson famously made billions betting against the housing market via credit default swaps. Now the fastest deteriorating companies in Europe are banks. And the fastest deteriorating companies in North America are insurance companies (a sector that tends to have investments in high yield debt … in this case, exposure to the high yield debt of the oil and gas industry)
http://www.forbes.com/sites/bryanrich/2016/02/08/cheap-oil-edging-us-toward-global-economic-collapse/2/#5dea8a6d1084
Still, while the systemic threat looks similar, the environment is very different than it was in 2008. Central banks are already all-in. On the one hand, that’s a bad thing for the reasons explained above (i.e. the lack the ammunition). On the other hand, it’s a good thing. We know, and they know, where they stand (all-in and willing to do whatever it takes). With QE well underway in Japan and Europe, they have the tools in place to put a floor under oil prices
..https://m.youtube.com/watch?v=c2cq3fK4lq4
Hope you like Gail
I think that in the final analysis, oil is the one thing they can not control. Oil can not be produced by ones and zeros on computer screens. For all their trying, they can not seem to make the value of oil go up. The reckoning approaches, and make no mistake, it approaches for all of us. When the value of oil and the value of the dollar is at zero, the game is over.
Just one more season…that’s all I want….just one more
https://m.youtube.com/watch?v=ZprLkE4gn8A
Yes-I worry about the insurance industry. They have a lot of bonds as assets.
Gail, thank you for taking notice and if you are “worried”, that makes me so too.
It seems we are at a pivotal juncture as you foresaw some time ago.
Thank you for tolerating the discussions regarding BW Hill, or shortonoil. I am enjoying Don’s analysis and some feedback from it from others. Hope they keep it short so it does not cause problems. Hope you had a Happy Valentine’s Day…
1.4 imperial credits for a gallon of unleaded spice at pump today. No disrespect to Gails work intended but the best example of a disapitive structure seems to be the price of petrol.
Hummm, who controls American politics and foreign policy?
“Hummm, who controls American politics and foreign policy?”
And what proof do you have for this? The tail wags the dog, does it? You might as well claim that we British control them, since we have mostly been on the same side. In that case, the sinister Orthodox religionists have always controlled the Russians.
The Russians seem to stumble from one cult of personality to the next. To the great harm of the Russian people and nation there seems to be no group in control. No persistent policy nor direction for Russia.
Sheesh, can we just get some turkey around here — please!
Well, the French fell into Napoleon-worship in quite a big way, not so different to Russia and Putin,or Lenin, Stalin.
But Putin himself is really just the front-man for a power-group within the Russian state and occupies a very difficult position with some very serious enemies (and no, they are not saints either.)
‘Uneasy lies the head that wears the crown.’
On the whole, in respect of relations to the outside world, Russians are a largely homogenous and ultra- patriotic group. Most unwise to engage with them on any but friendly terms. Sanctions just make the Russian bear growl.
Dear Finite Worlders
Gail doesn’t like it when I post something that BW Hill has written. But I will take the censorship risk and post this:
‘We’re working on it; as soon as we know I’ll post it here. The problem is that the extraction cost is just a very small part of the total cost of production. That barrel not only has to power the oil’s production (extraction, processing and distribution) but also the building and maintenance of all the other things needed to produce it; (roads, harbors, military …. etc). At present a barrel of oil can power $1,044 of economic activity. When the total cost of producing it becomes greater than that, the entire society goes broke, not just the producers.’
Here’s the scary thought to me. Some people pay a thousand dollars for a fine meal…say dinner for 4 at a fancy restaurant with fine wine. Some people pay a hundred thousand dollars for a wedding. How can we have structured a society where it costs so much money to eat and to get married? And I don’t think the institutions and people who provide the food and the wedding services are getting very rich. I think that part of the explanation is that the tremendous surplus thrown off by oil up until about the year 2000 enabled the enormous expansion of systemically wasteful practices.
Do you think that it is entirely possible that the cost of a barrel of oil is more than a thousand dollars? If so, then bankruptcy is in the cards. The only way to avoid bankruptcy is to radically reduce the cost of producing the oil. And since ‘the extraction cost is just a very small part of the total cost of production’, then the massive cost reduction has to come out of the non-oil sector. This is Simplicity, but not Voluntary Simplicity.
Don Stewart
Don, it sounds like you are loading oil with social costs like welfare that to me are not properly a cost of oil. It maybe a cost of social peace that may be needed to allow a complex industrial society but it is, IMHO, confusing to assign it directly to oil.
Ed
Oil is the principle source of primary energy for the economy (excluding solar energy, which keeps the planet warm and grows the trees, etc.). All human activities (excluding those powered by the sun) must be powered from the primary sources. If society has decided to pay people not to work, but will nevertheless feed them and clothe them and house them, then all that feeding and clothing and housing consumes primary energy.
BW is talking about two separate but interrelated subjects. The first question is ‘Can oil companies make money producing oil?’. The second question is ‘Can the Net Oil being produced power the Society we actually have?’. There are ancillary questions by the boatload, such as ‘Can Petro States survive the collapse of the oil industry?’ and ‘Will humanity decide to go down in a blaze of thermonuclear holocaust rather than face reality?’ But the first two questions are foundational.
Don Stewart
Fair enough Don.
The answer to the second question is no. The existing system is toast.
The answer to the first question is the industry can produce 40 million barrels per day of affordable oil but not 90 million. This may support a BAU Lite. We have gone through that debate numerous times here. Let’s just say we agree to disagree fast versus slow.
Ed
It is true that there are many people writing here who are in the ‘fast collapse’ camp. But that camp doesn’t necessarily include either Hill or me. While I think everyone agrees that the world could go up in smoke tomorrow, not everyone agrees that it necessarily must. Hill has stated in the discussion at Peak Oil that ‘what we really need are some ideas about how to power down as rationally as possible’. Hill has always said, I think, that continuing to produce from existing wells will become the name of the game. Of course, such a recognition on Wall Street would result in profound changes in the valuation of oil companies, and the disappearance of parts of the industry.
I have also focused my attention on figuring out ways to live reasonably well with a lot less oil.
Don Stewart
“At present a barrel of oil can power $1,044 of economic activity. When the total cost of producing it becomes greater than that, the entire society goes broke, not just the producers.’”
Don S., is there a formula or link for how that figure was arrived at? If it produces that much economic activity but only costs currently 30 bucks a barrel, then what’s the problem? If that were true wouldn’t the economy would be skyrocketing on steroids. Something’s not right there.
I use to try to discuss BW Hill group’s projections with a poster from their site on another peakoiler type website, but the answers were always arrogantly stated like I was stupid and should just know they’re correct. At that point I realized they really couldn’t answer hard questions and lost interest in them as a source of information. Time will tell, however keep in mind that many of the more informed posters on Ron Patterson’s site regard the Hill Group’s projections to be completely inaccurate.
I noted Ron’s site because that is a very technically oriented website in which as you probably know they crunch the numbers.
” If it produces that much economic activity but only costs currently 30 bucks a barrel, then what’s the problem? If that were true wouldn’t the economy would be skyrocketing on steroids. Something’s not right there.”
The economy is on steroids. The big question is, why hasn’t the drop in price stimulated demand, and caused economic growth?
Some of the reasons include that the cost for some of the oil is higher than the price, causing producers to shed jobs and lose profits. People are losing jobs or replacing higher paying full time jobs with lower paying part time jobs. People, companies and governments have too much debt accumulated. In poorer areas of the world, the price of food and water is increasing relative to income, preventing increased demand for oil and its products.
We are not really producing oil at this price; we are producing debt. Investors are mostly taking the losses and many are foreign investors and the investors losing money are not talked about in the mainstream press. They don’t even talk about the junk bond issue and are trying to keep it hush, hush. Every possible thing that they do results in less world wide demand for oil. It hurts the consumer. QE, war, Bailouts, Bail ins, favoritism to the oil companies, it all hurts the consumer. Its becoming clear to me as stated above that we are headed to a world where there is going to be less oil on the market. A part of our economy is going to have to go.That would be you and me the suburban consumer. We are of no value except to drive our cars around and buy stuff. If they had a plan, or I should say, if we had a plan we would keep agriculture on line and we would begin to make decisions about the course of action that we will take. Unfortunately, we are not that smart. Something will have to happen to take out the oil that is not paying for itself and is being used with such abandon. I don’t know what or when that is. I don’t think it will be more than three years off. It could be as simple as the price of oil continues to drop and oil companies will continue to bankrupt. That is what is happening now. That is what B.W. Hill says will happen. I disagree with Fast Eddy by the way. The people running the Fed, investment banks, oil companies and guberment don’t have an answer. If they did they would be fired promptly. Truth can not be spoken in those circles. They are just people doing group think.
>>>I don’t think it will be more than three years off
If you don’t know “what or when that is”, how do you know that “it” – whatever “it” is – is going to happen, and that it’s “probably” going to happen some time between now and three years?
More than the fast/slow collapse debate, I’d like to know what people think about near vs far when it comes to their version of a tipping point, seneca cliff event etc.
Some people here believe things could escalate within a year from now. Others believe that SHTF after another two or three years of BAU. Are there any takers for a longer timeline than that regardless of whether you believe in total collapse or a gradual decline?
What will the trigger be…. difficult to say…. given the central banks will do whatever it takes….
Massive companies collapsing and millions left unemployed when companies that are taking huge loans to buy back shares and stay afloat find that they are unable to do that any longer because they have breached debt covenants?
Re: Fast vs Slow collapse.
Do those in the slow collapse envision a scenario where we just gradually fade into oblivion — or does slow collapse mean the current situation degrades for many more years then just implodes down the road…
Nobody has defined what slow collapse means — but because the term collapse is used it implies at some point that a cliff is involved….
“More than the fast/slow collapse debate, I’d like to know what people think about near vs far when it comes to their version of a tipping point, seneca cliff event etc.”
I think the first shock is another global market decline, with bank runs and/or bank holidays. The financial system seems the most fragile part of the whole.
At some point, I suspect there will be a fuel crisis, and the governments will, just like after Hurricane Sandy, protect people from those evil price gougers by forcing price controls and rationing. This of course prevents the problem from being solved, so you have people standing around waiting to buy a jug of gas.
The collapse point, from my point of view, is the moment we have rolling grid failures, or areas being cut off to spare the main grid.
The real End Of Days happens when people are unable to easily acquire food – whether that is through the grocers, or from government supply checkpoints.
I do believe that the actions of leaders and the mental state of the masses are huge variables, that the collapse is not a purely mechanical chain of events. If the banking crises is managed well by the powers that be, and the masses remain confident in the system, we can limp along until the next crisis.
Regarding the events, it is not clear to me that there will be anything that can be identified as an oil/energy shortage event. I expect bank problems will come first. In the 1930s, there were huge oil inventories, and farmers were dumping food because the prices were too low. I expect that the problem will be surpluses rather than shortages.
If there do happen to be shortages, I expect that government handling of them will be as inept as after the various hurricanes. Since I live in the Atlanta area, we have been in the oil shortage area whenever a hurricane hits the Gulf of Mexico area. The usual response is price controls. This means that a person cannot depend on high price to ration supply. Instead, gasoline stations run out, while some people refill half-empty tanks for fear they might not be able to get gasoline later. Some people ended up staying home from work, because they couldn’t find an open gasoline station.
I expect collapse rates may vary by country. For example, Venezuela may be one of the first.
Many people believe in santa claus and the tooth fairy … many people believe they are intelligent and handsome and still young … many people believe that solar power will save the world… many people believe that we should convert all vehicles to electric believing they are green…. many people believe we should outlaw non-organic farming…. many people believe that the economy will recover… many people believe that fracking will keep us in oil for 100 years…..
Believing is not of much use….
A well-reasoned approach is best — with facts and logic to support an argument.
This is the best analysis I have seen with regard to what collapse will look like…
Trade Off: Financial system supply-chain cross contagion – a study in global systemic collapse
http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/
If you don’t have time to read it all go to page 58 – it explains what is likely to happen when a key pillar of the global economy breaks down – he uses the EU as an example of a trigger….
Strange, I just finished a chapter about Atlanta by James Howard Kunstler. He’s very angry about how this once beautiful city was destroyed by idiots. Anyway, it’s not a typical area for Norwegian-Americans.
Kunstler is a bitter, racist old man…. he writes as if there was another choice here… he is befuddled by the fact that america has degenerated into a society of facebooking tatooed slobs and unemployed minorities….
He is angry with these people ….. resentful….
What did he think was going to happen as BAU wound down? We’d all be dressed in brooks brothers casual attire pecking away in back yard gardens making tools by hand?
He’s lost the plot…. in fact he may as well step in front of a bus if what he sees now is getting him down — because this is as good as it gets….
Putting all those answers together paints a very sobering picture.
I’ll take another look at the study FE, but it is a study of a possible scenario, not the only way things can pan out.
I guess what’s difficult to visualise is how cogs in the global machine can bring the whole thing to a standstill – like a slow motion car wreck – since it hasn’t happened on this scale before.
More than a single organ failing which would be relatively easy to replace or bypass, what’s more worrying is a form of global economic leukemia.
I’m just wondering if there are ways to treat this systemic disease in the same way that we’re attempting to cure the biological version…
Excitement at new cancer treatment
http://www.bbc.com/news/health-35586834
The CBs are in a way already taking this approach. But I suspect that what they’ve been doing since 2008 is more akin to an adrenaline injection because the patient is too far gone for more subtle gene therapy treatments.
The only way I can envisage things “collapsing” is one nation at a time as some of you suggested. But maybe that’s too simplistic.
The same goes for the disaster response scenarios on a much more local scale. We all know how incompetent the authorities are when handling these situations. That’s what makes me sceptical that they would be able to handle any kind of disturbance on a larger scale. At some point, they would realise that attempting to maintain order is futile. They simply don’t have the resources.
Even military bases would fall apart and all govt buildings would be overun. I don’t think that FEMA text book SOP even go that far because it’s inconceivable. There’s nothing you can do in that situation.
If we’re looking at global scale contagion of debt related issues and banks topple fairly rapidly that’s something else entirely. That would be more like the superorganism suffering a cardiac arrest and every part of it is affected simultaneously. Again, it’s very hard to imagine this level of sudden shut down but I understand that this is just as likely if not more probable given the increasingly interconnected world that we live in. Or maybe I’m just seeing it as a singular event when in actual fact it’s still a relatively staggered nation by nation process.
In earlier times, national frontiers and continents acted as buffers and firewalls. Contagion of any kind was virtually impossible on a global scale. Even the great depression looks insignificant on a long enough timeline. Surprisingly, we’ve survived biological contagion scenarios up to now since reaching superorganism status. I think we’ve been lucky so far.
And WW3 appears to be looming. Whether that actually goes full scale or not is still open IMO. At this rate, we could collapse before things reach boiling point.
I think it’s safe to say that collapse as it progresses is made up of all of these elements and it’s probably not so important to isolate a single trigger. There’s probably more than one trigger involved at staggered intervals. The next one in line is set off as the effects from the previous one reach it and so on.
I just wondered why there is such a discrepency between timelines. But now it’s easier to see it as a staggered slow motion train wreck that includes them all…
The driver will die on impact. The frst few carriages will get crushed suddenly and passengers will be thrown around violently. Most will die. The rest of the train will derail and the remaining passengers will survive. These bruised and battered individuals will be wondering around the still smoldering train wreck trying to make sense of what just happened. After the expected rescue crew fails to arrive, some of the stragglers, which are wondering off in random directions, begin to form small groups and begin circling the weaker ones…
But yeah, it could siimply be that the lights go out in your local area sometime in the near future and you’re one of the 99% that doesn’t have a clue what just happened.
Kunstler is the best critic of Modernity ever! Nobody is better in ridiculing the stupidity of our current society. His humour is brilliant!
By the way, Portland went the opposite direction than Atlanta, and is the most successful city of the USA today. This is because Portland attracted hippies and environmentalists in the seventies, while Atlanta attracted idiots like Donald Trump.
I’m sure Kunstler is not a bitter old racist, then he were not a friend of Tverberg. And even he were it would not change his status as a genious. Knut Hamsun was a bitter old man and surely a racist as well. Still he was a genius.
For Kunstler I bow to the ground. He’s simply the Master of words!
‘The cops present at several notorious incidents include black officers; a black female sergeant who was supervising the action on the sidewalk in Staten Island when her colleagues choked Eric Garner. (she did nothing to intervene); the several black policemen in Baltimore who took Freddy Gray on his fatal ride in the paddy wagon. It’s a scene fraught with ambiguity, to be generous’
https://www.youtube.com/watch?v=LfXqYwyzQpM
That pretty much says it all…. I have a very big problem with people who blame minorities — particularly when a minority was enslaved by the majority — and has been treated worse than dogs even after they were freed…. I am actually surprised that the blacks in America don’t set fire to the entire country … why they don’t just pick up guns and randomly start shooting cops….
I understand Mr Kunstler is a bit of a frail, diseased man.(perhaps a bit of hard living early on?)… well those tattooed losers and slobs he is always referring to — and quite probably the cops — will quite probably show up at his door post BAU — and finish him off…. and raid his garden….
His act is getting old — it’s the same old bullshit….
Yes Howard – we know society is falling apart… and we can have a little laugh about the facebooking fools …. but you come across as despising them….
I say again — WTF did you expect?
Just wait till the losers don’t have FB to entertain them … and they turn violent…. you ain’t seen nothin yet….
Amusingly …Howard’s views are actually very much in line with a certain type of person who sports these sorts of tattoos….
https://s-media-cache-ak0.pinimg.com/564x/03/94/04/039404f5e96ff2574bc7ff679ce7d6a5.jpg
He might want to change his name to Jones or Smith….
Thank you Mr. Creedon for one of the best explanations that lit the light in my head.
” If it produces that much economic activity but only costs currently 30 bucks a barrel, then what’s the problem?”
30 usd/b is sales price of barrel of oil, not “total cost of producing it”. Total costs are probably approaching that $1,044 mark, or have passed it in 2012.
Not really. Total costs are nowhere near $1,044.
Stilgar
You can read the whole report and figure out how they arrive at the number. It’s pretty transparent, using publicly available data.
I agree that they have a tendency to be condescending. They seem to think that if you are going to question their work, you need to be an expert in thermodynamic modeling.
What keeps me interested are a couple of things:
*Hill told me that he has had the group’s model reviewed by a few professors, who agreed that it is a reasonable model of the way the world works.
*It does seem to explain the dynamics of what is happening in the economic world right now, and particularly the oil sector. I explained it in my own words to a blogger who was never convinced that oil was a crucial factor, and he told me that ‘this makes clear the underlying dynamics that we are seeing’.
*The Seneca Cliff becomes immediately obvious if you simply look at the graphs. The gap between value and cost shifted radically about the year 2000. As an analogy, most retailers make 3 percent on sales. If it changes to minus 1 percent, bankruptcy follows very quickly. But what the Hill’s model shows is a steeply rising cost (consistent with Douglas Westwood but not at all dependent on D-W data) with a steadily decreasing value. Put those together and you get the situation where the oil companies can’t make money and the economy which uses the oil is grossly malinvested.
*The fact that, as Gail frequently points out about Hubbert’s curve, substitutes for oil in the transport sphere have not materialized. Hill thinks that if oil goes down, so does the whole thing because of the centrality of transport.
To elaborate a little on that last point. I am working (or at least worrying) about local food (a pet project of mine). A friend of mine in Asheville will be here in a month to talk about her analysis which says that regional food hubs which are interconnected (a food network) is the right architecture. Meanwhile, I read 150 strong which recommends very much smaller ‘hubs’ of 150 people. I put several goals together and came to the tentative conclusion that the best architecture is about 3 farms connected directly to 147 families. My suggested architecture is a lot less transport intensive than a hub in Atlanta covering everything east of the Mississippi and south of the Mason-Dixon line.
So what we have is a real problem: how much transport should we anticipate? It is similar to the wind and solar electricity modeling which developed an architecture for the future using linear programming:
http://www.resilience.org/stories/2016-02-12/is-our-future-possible
(Nate Hagens in first half. Wind and solar modeling in the second half.)
It turns out that modeling for the optimum mix of wind and solar arrives at the following:
*No offshore wind
*Lots of onshore wind
*Less solar than wind
*DC long distance transmission
*Not much storage. Use natural gas as backup.
Wind gains an advantage over solar because the wind blows at night. DC transmission because losses shrink dramatically.
To me, if we are going to think about a new food architecture, we MUST consider what I see as the fragile nature of the transport network. A problem, of course, is that right now transport is the least of the worries. As Hill points out, there is currently a massive amount of subsidy flowing from those invested in oil to those using oil. Hill calls it a wealth transfer, but I think it is mostly just wealth destruction. e.g., the financing of shale oil has sucked a lot of money out the pockets of the wealthy, and hasn’t accomplished very much in terms of transport.
As for the focus of the people who participate in Peak Oil on gross barrels and their general refusal to look at the two issues that I identified as Hill’s basic questions. I won’t try to characterize all the responses people have…they have been displayed many times in history. But one fellow denies that thermodynamics has anything to do with oil. It’s just all about money. Hill agrees that its about money (which is why he is trying to answer the first question), but he thinks that you have to look beyond the money to the thermodynamics. I think that going from the physics of the well to the physics of the thermodynamics of the global oil industry is a challenge intellectually and also something that a lot of people just don’t want to do. There is enough evil in the day without worrying about the evil which lurks tomorrow.
As I have said here many times, the Hill’s Group model makes some critical assumptions. For example, it assumes that the economy is pretty rigid. It has a way of operating which isn’t going to change very much and very rapidly. Hill will agree that it is conceivable that the rigidity assumption is flawed, and in fact he would like more discussion about how to bend behavior in recognition of where our current behavior is leading us. But I don’t think there is much of an audience for such messages….just as there wasn’t much of an audience for The Limits to Growth.
Don Stewart
The Hill Model makes a lot of assumptions. I am tired of hearing about it.
Gail
You make all the same assumptions.
Don Stewart
As I understand Gail comes to conclusions — backed up with logic … with facts….
Richard Greg wrote and lived in observance of Voluntary Simplicity and he addressed the hinderance in regard to moder in life in this article, first published in 1936. BTW, no surprise that Scott and Helen Nearing provided land to him in Vermont to reside as a neighbor.
The Value of Voluntary Simplicity
Originally published in August, 1936
in the Indian Journal Visva-Bharati Quarterly
By Richard B. Gregg
” Voluntary simplicity of living has been advocated and practiced by the founders
of most of the great religions—Jesus, Buddha, Lao Tse, Moses, and Mohammed—also
by many saints and wise men such as St. Francis, John Woolman, the Hindu rishis, the
Hebrew prophets, the Moslem sufis; by many artists and scientists; and by such great
modern leaders as Lenin and Gandhi.”
The whole article is here
https://simplelivinglife.wordpress.com/2010/12/23/the-value-of-voluntary-simplicity-by-richard-gregg/
Click the download link for the phf file
“Clearly, then, there is or has been some vitally important element in this
observance. But the vast quantities of things given to us by modern mass production and
commerce, the developments of science, and the complexities of existence in modern
industrialized countries have raised widespread doubts as to the validity of this practice
and principle. Our present “mental climate” is not favourable either to a clear
understanding of the value of simplicity or to its practice. Simplicity seems to be a foible
of saints and occasional geniuses, but not something for the rest of us.
What about it?
Before going further, let us get a somewhat clearer idea of what we are
discussing. We are not here considering asceticism in the sense of a suppression of
instincts. What we mean by voluntary simplicity is not so austere and rigid.
…Quantitative measurement and the use of quantitative relationships are among the
most powerful elements in science, technology, and money. Because of this, the
preponderating stimuli exerted by science, technology, and money are on the quantitative
rather than the qualitative aspects of life. The qualitative elements are cramped. But the
essence of man’s social life lies in qualitative rather than quantitative relationships: it is
moral, not technological.”
..Moreover, we continually overlook the fact that our obsession with machinery
spoils our inner poise and sense of values, without which the time spared from
necessitous toil ceases to be leisure and becomes time without meaning, or with sinister
meaning—time to be “killed” by movies, radio, or watching baseball games, or
unemployment with its degradation of morale and personality.”
..The most permanent, most secure, and most satisfying sort of possession of things
other than the materials needed for bodily life, lies not in physical control and power of
exclusion but in intellectual, emotional, and spiritual understanding and appreciation.
…and in closure end here…this is a 16 page article, please read the whole before making a comment
…Simplicity Alone Is Not Enough
However important it may be, simplicity alone is not enough to secure a
thoroughgoing and permanent advance in civilization. The relative failure of the
Franciscan movement seems to be evidence in point. In addition to the changes in consumption which widespread simplicity would bring about, it will be necessary also to develop great changes in the present modes of production. Decentralization of production would be one of these changes. The social effects of that would be far-reaching and profound. Many other great changes will be necessary, including a different control of large-scale production and of land, and changes in distribution and in money as an
instrument and as a symbol.
Since we will be forced into involuntary simplicity it would be helpful to explore this subject further.
Vince the Prince
A neighbor, Bill Dow, died a little over 3 years ago. Bill had some land, of which he farmed a very few acres for 30 years or so. He graduated from Vanderbilt medical school, but never practiced commercial medicine. While in school, he was invited to New York City in 1968 for a conference considering the question as to whether ‘radical’ medical students were going to take over the schools. He was a farm boy from Mississippi, and had never been to NYC, so he accepted. They gave the participants 20K (as a bribe?). He took the money and started a community health project south of Nashville in a rural area with very poor health outcomes. He saw a lot of public health activities which could yield big benefits at little cost. As his small group was beginning to make an impact, they were tipped off that the Sheriff was coming to arrest them. The charge was going to be ‘practicing medicine without a license’. They escaped. The force behind the Sheriff was a father and son ‘pillar of the community doctor team’.
In a misguided attempt to form a household with an old lover, he suggested that they find a place to live that was agreeable to both. She (in Rochester, NY) suggested North Carolina as a good spot. He accepted. They moved here, but pretty quickly discovered that ‘we couldn’t live in the same house’. So she married a fellow and moved to New Mexico. He decided to farm. He had learned enough in medical school to be wary of pesticides and herbicides. So he began to farm organically. He became the first farmer in North Carolina to be ‘certified organic’. He and a few others founded what is now the Carrboro Farmer’s Market, one of the poster children for farmers markets. He also began the practice of selling from farm to restaurant, now a very prestigious practice with celebrity chefs like Dan Barber and Alice Waters practicing it. Bill told me that when the Market was first founded, you could not sell red curly lettuce in Chapel Hill/ Carrboro. ‘Gourmet’ food meant Velveeta and noodles. Now…everything is vastly different…and Bill was there and present.
Quotes:
‘Next week I will be sixty-five. I don’t think farmers ever retire. We just slow down bit by bit….farming is not an occupation, like brick laying or punching a computer. It’s a calling. It is a productive, learning, artistic experience.
I don’t regret being a farmer, far from it. If there’s no agriculture, there’s no civilization. The bubonic plague can sweep through, kill millions, and we can recover from that. If we inadvertently wipe out the ability to grow food, it’s over.
I’m sure I could have done a lot of things differently. Sometimes it’s personality, sometimes it’s fate, and sometimes just plain stupidity. We could have made more money. But you know, money ain’t everything. I would trade money for good health any day. And in general, the farming life is healthy and invigorating. Human beings are not geared to sit in front of a computer. That’s not genetically what got us here. What got us here was our ability to work the soil, to grow things, to attend to business, to attend to life. Modern culture has gotten away from that. There’s somebody to do this for us; there’s somebody to do that for us. They call it the service economy and I don’t much like it.’
I talked to Bill at the Carrboro market the same week that he turned 65. I was surprised that he was so affected by it. Now I learn that his father died of heart disease. And Bill’s heart had been giving him trouble for a while, and until Medicare came along, he had no insurance. I wonder if he saw Medicare as giving him a lifeline, or as a sign of what was to shortly happen to him. He was losing his ability to do arithmetic in his head (which really helps if you are selling at a cash market), and I think he was getting philosophical about it all. He wrote these words not long after, so I think they are musings which are grounded in a life full of forks in the road and choices.
Don Stewart
Don and Vince
Happy -more than happy – the human being who has a Vocation and who can follow it.
And at the other end of the spectrum we have “visionaries” like Peter Diamandis selling us all the idea of “Abundance…”
http://www.diamandis.com/abundance/
>>>Breaking down human needs by category—water, food, energy, healthcare, education, freedom—Diamandis and Kotler introduce us to dozens (and dozens) of innovators and industry captains making tremendous strides in each area: Dean Kamen’s “Slingshot,” a technology which can transform polluted water, salt water or even raw sewage into incredibly high-quality drinking water for less than one cent a liter; the Qualcomm Tricorder X PRIZE which promises a low-cost, handheld medical device that allows anyone to diagnose themselves better than a board certified doctor; Dickson Despommier’s “vertical farms,” which replaces traditional agriculture with a system that uses 80 percent less land, 90 percent less water, 100 percent fewer pesticides and zero transportation costs.
Now, if a neutral observer was to come across Our Finite World and then Diamandis:Abundance, which “truth” do you think that individual would align themselves with?
Now repeat this exercise with the population of US or EU. What do think the split would be?
Are the Peter Diamandis’s of this world to be viewed as 21st century snake oil salesmen or the new techno-messiahs?
I like how his picture for abundance is three people standing in a big open field of wheat. Should be hundreds of people packed into a magenta-lit vertical farm, bent over picking food, and living in rooftop little cages like in Hong Kong.
I know, I know – if we get abundance, people will stop breeding and population will level off, etc etc. Has anyone figured out how to spread this abundance to the poor masses all over the world?
>>>Has anyone figured out how to spread this abundance to the poor masses all over the world?
Nope. The Diamandis crowd wreak of high level conmen that use technology to dazzle their victims. They talk of programs to change the lives of a billion people. While that sounds impressive, it’s more likely to impact the lives of the “top” billion more than the bottom six billion.
(https://en.wikipedia.org/wiki/Desalination#Economics)
Since a cubic meter contains 1000 liters, this gives a cost/liter of at or less than 1/10 of a cent/liter (https://en.wikipedia.org/wiki/Desalination#Economics) , as against the 1 cent per liter Peter Diamandis is bragging about.
I am afraid we know the answers.
In 2014, the price of oil, when multiplied by the number of barrels of oil consumed, came to about 4% of GDP, both for the US and the world. This is based on an average price of $99 per barrel.
I really don’t think the cost of oil can approach its equivalent contribution to GDP. The amount of GDP per barrel of oil equivalent (using gross production, not net of energy consumed in the process) is $720)–but this is mostly the cheap energy of coal or natural gas. I suppose that we could hypothesize that if we adjusted for the energy used in production, the average might come out to $1,044. But there still need to be relativities for different kinds of energy, and how valuable they are. I expect that the price would need to be over $1500.
Of course, if the quantity of oil (or worse yet, energy consumption per capita) starts dropping, then we have a real problem. But the problem is a quantity problem, not a “price higher than GDP” problem.
Dear Gail
I asked BW Hill if I was reading him correctly. His reply:
‘Hi Don,
If you use the Etp Model in 2015 it came out to $1,044. If you use EIA data it comes out to $934. So yes, Duke in its present form is going to be gone. Of course, Universities in the Middle Ages did it with a lot less energy. The three R’s will again become the educational standard.’
I think that a crucial factor is that Hill’s model uses oil as a critical requirement for the functioning of the economy…not just as another source of energy which needs to be ‘properly weighted’. Natural gas and coal are substitutes, but neither substitutes for oil in the near term.
Thinking about the cost of running Duke University. It costs a lot because everyone who works there lives like an American…highly dependent on an economy which must have oil to function. If Duke were located in a very poor country, the staff would be paid vastly lower salaries and would require vastly less money in order to live. There is a guy in Nepal who has performed thousands of cataract surgeries for a charge of about 200 dollars. That would be simply impossible in the US.
This goes back to the foundation of the Etp model. The assumption is that the global economy has evolved over the decades to its current state, which state is resistant to change in the short term. Remove some of the oil and the economy stops functioning well. You would point out that unpaid debts would wreak havoc.
Oil is not ‘just another source of energy’ partly because it is indispensable for much of transportation. And if transportation stops, the economy stops. As a simple example, most of the faculty could not get to Duke by walking.
Another thing to notice is that I imagine the ‘cost’ that Hill is quoting is from his cost curve, which is not the same as the ‘current price’ or even the ‘ability to pay’ curve. His cost curve is what is required to keep the oil industry both solvent and growing.
Don Stewart
At some stage of their training doctors are called residents. I wonder if in the past residents actually resided at the hospital because transport to and from was not practical.
There is certainly no lack of energy, sunlight falling on the Earth is vastly more than humans use. We just don’t have the technology to make efficient use of it. Vastly more misses the Earth entirely. We might have the technology to collect a little of that and use it. Depends on light structures and low cost to orbit.
One of the things which could be contributing to the economic slowdown is saturation with “stuff.”
hkeithhenson, how was your presentation recieved?
Keith can you answer why we haven´t invented a efficient form of photosynthesis? Plants can turn sunlight in to buildingblocks of life, why can´t we do better then solar panels, space solar etc. ? I mean we should have chlorophyll-like nano-paints-or-something covering every new building, providing energy. Why don´t we have such tech?
“I mean we should have chlorophyll-like nano-paints-or-something covering every new building, providing energy. Why don´t we have such tech?”
You are talking about manufacturing at the sub-1nm scale. Semiconductors are currently at around 10nm. If Moore’s Law continues, what you are suggesting may be possible in four halvings – so, call it 8 to 12 years. Taking time to account for R&D and mass roll-out, call it twenty years for wide scale adoption, if it works out. Of course, this requires 20 more years of BAU, which means probably double the energy consumption in order for GDP to double by then.
It´s always 20-25y away, isn´t it? Funny how that´s always the case.
“how was your presentation recieved?”
Which one? Gave one each in Dec, Jan and Feb. Others coming up, one late this month and one in the UK early March.
“why we haven´t invented a efficient form of photosynthesis?”
In some ways we have. If you consider making synthetic oil from biomass vs PV to electric power to hydrogen to synthetic oil, it much more area efficient to use PV. Only thing is that PV doesn’t yet grow from cheap seeds.
As to why we don’t have such tech, we don’t have it *yet*.
On the other hand, getting it might well be the end of the human race, or at least things will be very different after nanotech.
“Which one? Gave one each in Dec, Jan and Feb. Others coming up, one late this month and one in the UK early March.”
Keith, any baby steps forward in your projects?
“Steps”
Yes
Good, what´s next?
It’s being discussed on Power Satellite Economics, a Google group.
I associate Former Energy Secretary Steven Chu with the belief that we can improve on photosynthesis. This article http://ncse.com/blog/2014/06/cosmos-our-solar-future-0015665 quotes Steven Chu with saying, “Photosynthesis is too damn inefficient.”
There are many things we can’t do…. even thought the financial rewards would be immense… for instance… i am working on trying to change lead into gold…. I can’t seen to get it right…
I’d also like to be able to beam myself to other countries so that each weekend I could visit a different city…. some day I’ll get that contraption in the garage to work…
In my spare time I am working on a device that electrocutes weeds while not harming any other plant life… this is not working either….
Then there is the fire log — it is a special log that will burn intensely giving off huge amounts of heat — a single log lasting 100 years….
Don’t give up… your dreams may some day come true … we are humans … we can do anything.
FE, New Zealand is an agricultural economy with little tertiary activity. I am glad to see you are pioneering high tech research in NZ. It is sorely needed. 🙂
I suggest the robot weeder and a nice fail safe liquid fueled nuclear reactor. With liquid fuel there is no cladding to burn.
FE, you should be the minister of energy for New Zealand. (/scar on) Or better yet the minister of sustainable growth. (/scar off)
FE, I’d be happy to head your department of nuclear reactor and synthetic liquid fuels deployment.
I’ll give John Key a ring tomorrow morning and offer him my services…. it would be great if I could get some government funding for my many projects…. a billion dollars could make all the difference!
NZ is all about agriculture I bet you could get money from the national government for a weeding robot. Contact the Honorable Minister Joyce of the Ministry of Science and Innovation.
You can found and direct the NZ center of Excellence in Robotic Farming. Run solely off of hydroelectric power and permaculture soil management techniques. You can recruit Don for the soil management part. I know I am excited about this.
http://www.popsci.com/blog-network/our-modern-plagues/meet-robotic-weeders
If NZ is to stay competitive in the world production of lamb and mutton it must not allow a robot gap.
http://www.theguardian.com/environment/2016/feb/01/japanese-firm-to-open-worlds-first-robot-run-farm
I know from the NZ Immigration Department that skilled farm labor is in short supply in NZ.
FE, I can tell from your solar pump woes that skilled farm labor is in short supply. You will need the national government to implement a H1B visa program for high tech farm labor. Rather than the immigrant having to invest a million dollars the government would give the immigrant 10 hectares and a million dollars for robotic farm equipment. The farm would be in the immigrants hands as long as he or she successfully farms it. If they quit they loose ownership.
What I could do is invite some Woofers i.e. slave labour http://www.wwoof.co.nz/ and get them to haul buckets of water up the hill from the creek in exchange for a place to stay and meals…
Ed, that would be good. Fast Eddy minister of sustainable growth in NZ: “Drop everything and run for the hills! We-are-dead !” Now that would be a political leader I would follow.
Damn that sounds good, where can I vote?
Run? Where to run to?
Running from starvation uses up calories…. even Ben Johnson could not outrun radiation so why bother….
Damn you´re good. Count me in as a volunteer in your election campaign.
Count me in too. FE “change is coming”. FE “big change”.
FE, the Atomic Energy Act of 1945 is a sadly archaic throw back to colonial days with its focus on mining. It is time for NZ to throw off the yoke of oppression and enact a forward looking program of nuclear research and deployment for the betterment of future generations of New Zealanders.
Yes, absolutely, NZ must have a dose of radiation like the east coast of U.S. or France https://www.sciencenews.org/article/map-captures-earth%E2%80%99s-antineutrino-glow
Anything else would be unfair and unjust to the future generations of NZ.
A 1800w electric heater crafted by amish crastspeople gives off much more heat than 1800 w according to the sales literature so anything is possible!
The problem is not in the amount of solar surplus per capita but in the people and their ways to absorb and loose.. There are “unequal” developments how the successive civilization dealt with the potential, for instance the club-med antiquity used advanced surgery tools perhaps only to be reinvented later in the period of late renaissance or rather even much later as in mid 18th century. On the other hand even the middle ages were able to build much bigger castle fortifications, better carriages, accumulative heating etc.
Who knows what future staircase shape collapse would make unavailable for future generations while some “known” things still could evolve or return. In any case don’t bet much on singular collapse, that’s a loosing proposition, future will be hodge podge of various old, older, present and some new..
I think that we have to remember that we have a whole dissipative system to keep operating.
Indeed we do have a lot of diffuse energy available; our challenge is to make various kinds of “ordered” energy from this very diffuse energy at extremely low cost. We really need many different kinds of ordered energy, to maintain our current system. Either these energy forms must be produced directly, or they must be made indirectly with electricity, at very low cost.
As indicated in the figure above, there is a much higher concentration of energy in “society” than there is in plants and animals. In my view, brains need to be subdivided into human brains and all other. Humans are now adapted to eating some cooked food, so that the human body does not have to devote as much energy to chewing and digesting, and can instead devote more energy to brain development. Thus, the human brain needs supplemental energy of some type (for example, burned biomass), but it doesn’t need as concentrated energy as society as a whole. It is this need for concentration, in exactly the correct forms, which provides one of the challenges for keeping either humans alive, or humans plus their societies alive.
If we are to maintain “society”–that is the economy–one of the requirements of a dissipative system seems to be that energy per capita be at least level, otherwise the whole system tends to collapse. (A lower level of energy a different system might be able to maintain some humans, but without the ability to make metals and thus do advanced technology.
We kicked energy consumption per capita up to a new higher level with a rise in the standard of living of China and ti a lesser extent other developing countries. Now, to keep the system from collapsing, we must at least maintain this level–as we transition to using more solar energy, which has been suitably suitable transformed to work in today’s appliances and devices.
The new solar energy system must be sufficiently complete that it can deal with the potential problems at the spring and fall equinoxes, when this solar energy would not be available. Thus, there must be a way that suitable backup power can be kept available so that refineries can com tine to operate 24/7/365, as can server farms and other industry that needs 24/7/365 operations. One option would be that some fossil fuel powered electricity operations continue to operate. If so, these plants will need adequate profits. They will need trained workers, and adequate fund to pay these workers for the entire year. They will need transmission lines to their plants that are adequately maintained. New workers will need to be trained as all. There are other alternatives–big batteries perhaps, or running the system at a higher level apart from the spring and fall equinoxes. You can see the problem, however.
We now have a problem with low commodity prices. This is to a significant extent the indirect effect of too low wages right now, which in turn is related to too low energy per capita right now. This needs to be fixed if we are to go on with any energy solution–whether it is concentrating diffuse solar energy or some other approach.
Do you thnk there is any chance that the energy problem can be fixed?
And if so, do you think that there is any chance that the economy can be fixed i.e. a reset leading to a new paradigm?
I have a hard time seeing how the problem can be fixed. We have been struggling with it for a long time, and pretty much have run out of solutions.
Thanks. Thought so. Had to ask.
Eivind Berge has suggested a 7-steps solution:
“Imagine if humanity realized that collapse was coming and wanted to do something about it. What, if anything, might work? Here is my suggestion.
Step 1: Admit that we have a problem with collapse! (Read Our Finite World.)
Step 2: Form a world government. Declare a summit, form a world alliance and neutralize all resistance immediately. If any major nuclear powers resist, our civilization will probably end right here, but let’s assume they understood the gravity of collapse and went along. Perhaps not all minor countries need to participate — the rest can be left to their own devices as long as they don’t threaten anti-collapse efforts.
Step 3: With intertribal warfare ended, humanity shall declare war on collapse. Realize that collapse is more formidable and destructive than any other foe, so we need to set aside our cultural differences. What we are facing is just as bad as if an asteroid were on a collision course.
Step 4: Conscript people to fight in the anti-collapse army. For example, conscript Gail Tverberg as chief systems theorist and Keith Henson as chief engineer.
Step 5: Anti-collapse forces should control a minimum of all needed ingredients to have an industrial civilization, using violence to enforce operation (but preferably not more than needed). The goal is to allow the system to scale down without losing maximum complexity, so smart people need to figure out what we absolutely need to preserve and leave the rest alone.
Step 6: Free trade can still exist, but the anti-collapse army must be able to commandeer all resources as needed in order to preserve complexity. Pick some companies more or less randomly in every industry and see to it that they don’t fail, and do the same throughout their entire supply lines. The entire oil industry might as well be nationalized immediately since it will never be profitable again anyway. Countries can also keep their laws and customs as long as they don’t interfere with the war on collapse.
Step 7: Adopt more sustainable practices going forward. We need to lower our expectations and tolerate the fact that there will be many losers who will perish. Perhaps only soldiers in the anti-collapse army will have adequate nutrition and a good quality of life, but that’s OK as long as we maintain maximum complexity. Stop population growth! All while keeping technological progress or at least not losing our ability to manufacture any amenity that we have now, the preservation of which is the whole point of the war effort to begin with. Nothing lasts forever, but if collapse is delayed beyond our lifetime, consider this plan successful.
There is no single dictator who can make this plan happen. It doesn’t need happen democratically either, but a lot of important people need to understand collapse and desire to do something about it to put the plan in motion. It is a truism in doomer circles that our economy must grow or die, but I wonder if that is really true if something like this plan were implemented. It might be impossible for social reasons, but I can’t see any thermodynamic reasons for why it can’t work.
One might object that this will be some horrible dystopia comparable to the worst communist regimes in history, but I have my doubts. If collapse is really imminent due to resource depletion, there won’t be enough resources to oppress people for frivolous reasons, so the only way industrial civilization can live on is if it is concerned with self-preservation rather than insane and wasteful projects of oppression. Having a police state micro-manage people’s behavior complete with mass incarceration will be beyond the power of our civilization going forward. There will be exceptions, but I think most people would simply be left to fend for themselves or starve rather than be oppressed by the state, and that is no worse than what would happen during collapse anyway. The question is only if we want to use our remaining resources to preserve our technological capabilities and a good life for at least some people instead of letting collapse happen without a fight.”
– Can industrial civilization be saved?: http://eivindberge.blogspot.no/2016/02/can-industrial-civilization-be-saved.html
Delusistan needs an anthem…. the finalists are:
a) Imagine
https://www.youtube.com/watch?v=yRhq-yO1KN8
b) Koombaya
https://www.youtube.com/watch?v=vo9AH4vG2wA
c) I’d like to teach the world to sing
https://www.youtube.com/watch?v=wlR0KElxxVg
d) Give peace a chance
https://www.youtube.com/watch?v=RkZC7sqImaM
e) We are the world
https://www.youtube.com/watch?v=M9BNoNFKCBI
Cast your vote now!
I appreciate the confidence, but I don’t think it’s likely a command economy will do a bit better at avoiding collapse.
The USSR collapse comes to mind.
Just ran into this:
The Evolution of Everything: How New Ideas Emerge
……………………………..
Author: Matt Ridley
The New York Times bestselling author of The Rational Optimist and Genome returns with a fascinating, brilliant argument for evolution that definitively dispels a dangerous, widespread myth: that we can command and control our world. The Evolution of Everything is about bottom-up order and its enemy, the top-down twitch—the endless fascination human beings have for […]
China’s Subprime Crisis Is Here
http://www.bloomberg.com/gadfly/articles/2016-02-17/china-s-600-billion-subprime-crisis-is-already-here
The solution? Lend even more money …. and attempt to dilute the bad loans….
‘The dynamic is clear. A splurge of new lending can help to dilute existing bad loans, but only at a cost. This is a game that can’t continue forever, particularly if credit is being foisted on to an already over-leveraged and slowing economy. At some point, the music will stop and there will have to be a reckoning.’
Yup.
Without a huge amount of energy use, it is hard for me to believe that we can have a world government.
At most, a small share of humans can survive. If all of us are banded together, the whole system fails together. Otherwise, it is necessary for the world dictator to determine who lives and dies. Not many would want this responsibility. Survival of the best-adapted seems to work best for this kind of thing.
Hi Don Stewart,
We are seeing that we have passed the point where it makes economic sense to use expensive refining processes. Richard Heinberg suggests that single digit returns on energy invested (“energetic sense”) is not enough to sustain society. The party is over on two counts then, both occurring at nearly the same time, dollar costs and net energy returns. This can’t end well.
Don B
Net energy seems to be an attempt to measure real costs; it just doesn’t produce very comparable numbers from fuel to fuel, because it strips out too much of importance–time being an important variable; the needed cost of government and infrastructure (such as transmission lines and related computer regulation of these lines) being another important missing variable. If you view the problem as “running out,” the EROEI model perhaps has enough variables in it. Probably not otherwise.
Is Our Monetary Structure a Systemic Cause
for Financial Instability?
Evidence and Remedies from Nature
http://www.lietaer.com/images/Journal_Future_Studies_final.pdf
Complementary stuff to the theme of Gails great article!
Here is a metaphor. You are given a car without brakes and with an unreliable steering
wheel. And you are sent across the Alps or the Rockies. When you crash, you are told
that you are a bad driver; or that your road maps are out of date. And everybody is
endeavouring to get that same car back on the road, with as little change as
possible…predictably until the next crash. Indeed, such a car is not fit for driving; it has
structural problems which, if not fixed, will predictably cause other crashes. Extending
the metaphor, and assuming that only structural solutions can genuinely address structural
problems, a helpful starting point would be to identify the nature of the structural
problem that is plaguing our financial and monetary system
Ulavowicz (whose article I quoted) is one of the authors of the article you are quoting (Is our monetary structure a systemic cause for financial instability?) The solution proposed is multiple currencies operating at the same time. Roddier also backs this solution.
I have hard time supporting this solution. Don’t you need governments to back the various currencies? Doesn’t adding different currencies for different kinds of transactions just make the system more complex? Doesn’t the system effectively require a country to ban cash transactions? How is an all-computer system sustainable?
I see an example in this article–it seems to be another way to add debt to the system, without government backing. Thus, it would seem to be quite prone to failure. This is the description:
Dear Finite Worlders
Jeffrey Brown has taken on the question of:
If there is so much crude oil in storage in the US, why are refiners importing more crude?
http://oilpro.com/post/22276/estimates-post-2005-us-opec-global-condensate-production-vs-actua
And the answer he comes up with is that the storage is disproportionately condensate, which cannot be sold as ‘crude oil’ in the markets, but is counted as ‘crude oil’ by various statistical organizations.
Looking at historical data, he finds that real crude oil production in the world has not increased at all since 2005, despite massive CAPEX invested upstream.
Don Stewart
Addendum
Search on ‘splitter oil refinery’ and you will get lots of information about relatively simple and cheap ‘refineries’ which do simple things with higher API products. Here is one example of what you will find:
http://www.ogfj.com/articles/2012/10/fifty-shades.html
And it’s not about kinky sex.
Please remember that I am certainly no expert on oil refineries. I have read discussions between experts which leave me confused. There is no doubt that some naphtha is a good thing, in that we can make petrochemicals out of it. But what oil is really, truly mostly used for is transportation. And grades of crude such as Brent and West Texas Intermediate are more useful for transportation than condensates or Light Tight Oil. Furthermore, I believe that a mixture of a very light grade with a very heavy grade to get an ‘average’ which approximates WTI is probably just a mirage. When you break the mixture down in a refinery, you re-separate it into something contains both ‘too light’ and ‘too heavy’, with no soup which is ‘just right’. Very light products are useful if you are trying to make tar sands products go through a pipeline, but the mixture should not be confused with WTI.
Where does this leave us. Jeffrey Brown’s evidence leads me to believe that oil as we have known it is dying. It no longer makes energetic sense to use very expensive refineries and pump a lot of water to the surface in order to get a small amount of oil and the other practices which make oil production expensive. Can splitters and other simple technology give us hydrocarbon products which are useful? I am sure they can, otherwise people wouldn’t be investing in them. Can the output from splitters take care of global transportation requirements? I doubt it.
If there are any experts out there who would like to set me straight, please do so.
Don Stewart
Don
Excellent points on the so-called glut. I am also of the opinion that most of the excess is mostly unusable short-chain molecule crude and condensate. Short chain molecules are mostly useless to American refineries as they cannot easily be combined into longer chain molecule distillates. In other words, the refiners don’t want them. Bakken crude is mostly Coleman fuel (naptha), pentane, butane, benzenes and assorted NGLs. Long chains are the good stuff like diesel and fuel oils and high octane gasoline.
All that ZIRP money for lighter fluid for our Zippos and Bics… lol
This would seem to be a good question. Things are not as simple as the breakdowns provided in reports. Every refinery is optimized to handle particular types of oil products. Every factory in place needs particular types of hydrocarbon inputs. Raisin the total doesn’t necessarily give what we need for our system today, especially transportation fuels.
The emerging markets consume half of the global oil production. After years of QE and ZIRP that has been used to ramp up the global oil production, we have today an oil glut which has crashed the oil price below the production cost. The emerging markets are today in recession with $9 trillion in dollar denominated debt and are now consuming less oil, goods and services.
The advanced economies have after years of QE and ZIRP built up massive industrial and service sector over-capacity. Today with trillions of dollars in non-performing loans on their balance sheets, they cannot grow anymore.
So what will the central banks do now ?
Try to bail out everyone they can, except the depositors?
Are there Elders? What plans does TPTB have in mind for us?
When Eddy talks about Elders, I don´t see them. The plan Eddy sees, for me it´s just reactions from dozens of smart independent nodes, no plan, no elders. When others here talk about TPTB, they seem to think the global leaders have it all figured out. All is a part of some big elaborate plan. I would like to argue, that there is no plan, leaders don´t know what is going on, not fully, not any of them.
Argument 1.
Jorma Ollila the chairman at royal dutch shell. Former CEO of Nokia, regular at the Bilderberg group meetings. If he isn´t privy to the big plan, nobody in Finland is. Jorma keeps on talking about the need to reform the job labour market negotiation laws to make work done in small and middle sized businesses in Finland more competetive in the global markets. Does that sound like somebody who knows about a plan? And if you think thats just a charade, well, the chairman of shell only has a limited amounts of hours in his life, and he has consulted the PM extensibly on this particular subjectmatter during the last few months.
Argument 2.
The Pope. When the AMEG (Arctic Methane Emergency Group) Nissen and Beckwith if I remember correctly, had been to the Vatican to talk about the Arctic melting. It took the pope only couple of months and after that he came out in a big way to throw support to the climate change issue. The Vatican has a lot of political and financial clout to throw around. The Vatican can draw upon resources most PMs can only have wet dreams about. The current Pope isn´t afraid of going against the grain. If he believes in something, he will make a stand for it. Have you heard any considerations from the Pope about the global financial systems imminent collapse? Which will leave billions of good catholics starving. I haven´t.
I argue that even though some people have a small glimpse of the big picture. Those people are not our leaders, there are no elders, there is no plan. Those in the know, those few that understand the issues at play, they are not in power in any way. So far, keeping BAU intact has been an “instinct” from the financial leaders. People have been trying to avoid financial apocalypse since Lehmans. And next that will require NIRP (negative interest rate policy), UBI helicoptermoney and some way of saving deutsche bank without alarming the public. And even if we have a few more months of BAU, that doesn´t change the fact that Apocalypse, Collapse, SHTF will come nontheless.
I submit to your consideration that our leaders are happily ignorant that once BAU crumbles it will never come back again. They may see a financial tsunami brewing, but they do not see how the world will change forever on day 1 in Post-BAU.
Indeed. Those few people who do understand the true picture, talk openly about it, or naively attempt to reform the situation are in a tiny, tiny minority, with no power whatsoever to effect meaningful change.
The overwhelming majority (99.99% of the population) are simply in favour of more. More growth, more industrialism, more people. More, more, more…and that’s why we’re f#cked and will be completely blindsided by collapse, like a careless pedestrian stepping in front of an oncoming truck, when the time comes.
Since a million years our species has believed in spirits, Gods and all those sort of invisible things. Now amazingly we have a breed of humans who can manipulate global happenings, who are like Gods themselves.
First time ever, our belief in a higher plan, higher force, higher intelligence is not merely our imaginations running wild, now they really do exist. Screw you ancestors, every religion in the world, ancient aliens and UFO believer, for the first time ever anywhere, now we have proof the invisible does exist.
Now what are the chances of that?
They are actually not invisible — it is just that you are blind.
They have just made you believe that your elected leaders are the ones running the world…. in spite of overwhelming evidence to the contrary you refuse to see them.
I would like to hook up electrodes to your brain and observe what happens when you read the following….. I suspect that there would be an intense firing of neurons indicating that cognitive dissonance has been summonsed …..
“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
You will note that the Elders are huge proponents of democratic institutions…. as you can see democracy is an outstanding screen for someone wanting to remain behind the curtain
Indoctrination begins at a very early age — and to a great extent we do have democracy at least when it comes to issues that do not involve power —– so I can understand your reluctance and inability to accept what I am explaining
It is difficult to remove what has been pounded into a person’s head for many decades…
Not really convincing. A list of old quotes. Generally quotes are usually falsely associated to a person. For instance there is a huge number of quotes assoiated to Einstein. Very few of these are real Einstein quotes. It’s easy to put names of dead people on quotes.
One word: horseshit.
The quotes are real – until you demonstrate they are not.
Can you tell me why every single US politician kisses the ass of AIPEC and Israel?
Open your eyes
Thank you for this.
Whenever I engage in a debate and the opponent resorts to insults —- that is victory.
You are weak… you are feeble.
Let me take my victory lap…. Hail Fast Eddy! Hail Fast Eddy!
https://upload.wikimedia.org/wikipedia/commons/4/42/Apollo_11_ticker_tape_parade_1.jpg
“You will note that the Elders are huge proponents of democratic institutions…. as you can see democracy is an outstanding screen for someone wanting to remain behind the curtain” Fast Eddy
“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
It seems like Mr super elder Nathan Rothschild just had the curtain opened as he was dancing can-can nude.
“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
Did he realize this just after he signed? That’s a bad luck.
Some of your quotes may be correct, but what do they actually prove? They prove that there were a bunch of power hungry and greedy bankers in the US during the 20ies. They don’t prove the presence of any elders pulling the strings A.D 2016. That’s what your fantasy conjures up. It would be exciting if you were right, I agree. But I am to boring to believe. Excitement and drama is not large enough parts of my personality to make me into a believer. You shouldn’t under estimate the degree personality inteferes with reason.
I mean if George Soros knocked on my door wanting to speak out about his fiends “the elders”, I would change my (boring) mind.
Who Owns The Federal Reserve?
The Fed is privately owned. Its shareholders are private banks
http://www.globalresearch.ca/who-owns-the-federal-reserve/10489
Can you explain to me why one of the most important functions in the most powerful country on earth — was handed to a private company?
That’s wrong and Global Research is wrong as well. They say the BoE is privately owned and that’s definitely not true. What actually occurs is that the board in the Fed is made up of private bankers, so there is influence there.
http://www.federalreserve.gov/faqs/about_14986.htm
Oh right – thanks for providing info on who owns the Fed — from the Fed’s website….
What were you expecting to find there?
Did you also think that the Elders were going to post on that website the Protocol regarding about how it is crucial to control the reserve currency of the world because when you control that you control everything.
The Fed IS a PRIVATE company. It is owned by the large investment banks.
Who control those investment banks? The Elders.
Round round we go with the imbecile brigade….
Do I need to post this 500,000 x before you get it? What if I were to take a large hammer and pound this into your heads? Would that work?
“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.
Sorry, I misspelled, fiends should be friends.
I mean if George Soros knocked on my door wanting to speak out about his friends “the elders”, I would change my (boring) mind.
Wilson had an affair with a fellow professors’ wife while at Yale. This was used to blackmail him into signing. He knew before he signed how bad it was. He sold out his country to save his career.
“Wilson had an affair with a fellow professors’ wife while at Yale. This was used to blackmail him into signing. He knew before he signed how bad it was. He sold out his country to save his career.”
That’s cheap. Then the unwittingly in “I have unwittingly ruined my country” seems to be wrong. I guess he had to continue to lie.
Still, that’s not a proof of any elders active today. That’s a proof of dishonest bankers in the 20ies. I guess that dishonesty is a pretty common trait among this group of people so in that respect nothing is changed compared with today. I am still waiting for George Soros or some other among the prime suspects will mistakenly reveal himself. Until I get a decent proof I will concider “the elders” as a fairy tale.
Fast Eddy,
“Who Owns The Federal Reserve?
The Fed is privately owned. Its shareholders are private banks”
I am aware of this fact. Obviously, bankers are a greedy bunch of people.That was the case in the 20ies as well as today. Apparantly the banksters managed to fool Woodrow Wilson, if Ed is correct by blackmailing him. This is not a proof for the existence of the elders. Alltogether you only have very, very circumstantial evidence. It’s much more likely that “the elders” are a modern fairy tale. It’s like the witches and wizards people were convinced existed during the 17th century. They even used to burn the poor bastards.
I am waiting on you to explain why the US government gives a private company the right to print the USD and loan it out at interest?
I’d love to have the right to do that — because that would make me all powerful.
Where do I apply?
We have declared ourselves and our leaders (J. Yellen, previously B. Bernanke) to be gods. Technology will solve all problems. The universe is a closed system, caused by a one-time fluke. We have no need for a god, because we have all the answers ourselves–except maybe we don’t really have all of the answers. So we need to think again about an outside answer.
What can and what can´t our leaders see? I believe they have a fundamental problem of seeing all banks going bye-bye. Banks are like a force of nature to them. Constant, fundamental and forever there. It is unimaginable for them not to have banks.
This same problem I believe we can see as a microcosmos in the comment section here on Gails blog. Some people can see that the financial system will collapse, and that means banks will collapse. There´s nothing we can do to prevent a global collapse of banks. And once the banks are belly up, we wont have such financial institutions ever again.
What is and what isn´t possible in a world without banks. Why can´t banks be saved? What sort of institutions should take their place? What will Post-BAU look like, because we don´t have banks. I believe those are the questions that I would like to see our leaders make. But, nope, haven´t seen such questions in any contingency plans. Therefore our leaders don´t have a plan, or if they have one, it´s the wrong plan they´ve got.
The elite or elders must be as numb-skulled as the economists that rubber stamp their program of lending and growth to infinity and beyond. Their only control seems to be whether the cancer grows at 2% per year or 10% and that’s not the kind of control that results in stability and survival. It ends in collapse.
What about us?
Everything we have ever done in our lives, having an education, buying a home, buying a car, voting in elections, having children, everything has been dependent on infinite growth on a finite planet. Because there are 7.5 billion of us on a planet that shouldn’t have more then a billion, even our very lives, being born to this world has been dependent on this illusion.
Can´t much blame the elites or elders being wrong, if me being even born depends on the same lunacy..
I think there is a severe case of cognitive fallacy, our brains are not calibrated to reality, but calibrated to other humans. When the large majority believes that pensions will be paid and growth can continue ad infinitum on a finite planet, then everybody believes that. It´s a symptom of our species, of our brains, we don´t need reality, but we need other humans. We are living historical times right now, maybe twice before has the physical reality made itself evident on the global human culture (Toba eruption and Ice Age trubilations) and once again the few who survive will be reduced to hunter gatherers living in ignorance, without memory of the times that came before.
But there to be a plan, to be Elders with a plan, the true leaders scheming behind the curtain. Nope, don´t understand what sort of plan that would be? Hurray, let´s destroy every possible niche of biodiversity and only then collapse this beast so that maybe a few hundered at the most can survive the coming bottleneck.. Nope, zero, zip, zilch, nada on the plan front..
Grow or die. Those are the choices.
Well actually there never was a choice….
If you want to test that out try telling someone you are cutting their salary by 20%.
You can also try to find someone who would say no if offered: unlimited use of a private jet, 5 mega mansions in any cities of their choice with a Ferrari at each…. 25 millions dollars per year tax free inflation adjusted until death do we part….
Good luck with that….
We want to live large. It’s in our DNA. There is no choice in the matter.
“Grow or die. Those are the choices.” More like: Growth AND die. One leads to the other.
Very well put! It’s the unsustainable growth that inevitably leads to death.
It ends in… transformation… if you want to get all metaphysical about it.
We may not like what we transform into, but I don’t think we have as much choice in the matter as people like to believe.
I also don’t believe that the elite and their hired brains are stupid or ignorant about such things. I would say that the higher up the ranks you go, the more gatekeepers grant you access to the higher knowledge. Having greater access to higher knowledge and to the deep secrets of the inner circle does not equate to ignorance or stupidity.
I think that we’re essentially at the behest of nature and as lowly creatures crawling around on the surface of the planet are entirely at the whim of her ebb and flow.
The elite members of our species and the competing factions within their ilk are subject to these forces along with the rest of us. It is of no matter that they may have risen to positions of power in the global community because of traits that other humans find immoral or unfair. It matters not that the percentage of psychopathy may be higher among their ranks than in common society. In the end, they are simply another example of adaptation, selective pressure, and nature’s ability to disguise ruthless behaviour in the support of a tendency towards order.
When the Rothchilds set up their banking empire there was a cold, calculated precision involved rivaling the most elaborate military operation. Urgency and patience applied in equal measure as and when required. Layers upon layers of contingency plans waiting in the wings ready for all eventualities. This is not the labor of simple minded folk.
And the central banks were only ever a means to an end. We are nearing the end game now. All the cards will be revealed.
Once the dynastic families had aquired much of the wealth and power that they saught, they turned to philanthropy to don the appearance of benevolent beings and to stave off the inevitable uprisings that they knew would be their downfall.
It also wasn’t a bad idea to protect wealth in tax free foundations and to buy up as much land and resources as possible. But for this endeavor to be truly profitable, the real source of wealth and power had to be expanded – the population.
There’s not much fun to be had as the ruler of 150 people – much better if the pool is a few billion. But things can get out of hand threatening the collapse of the pyramid and that’s why you hear elite talking heads prattling on about overpopulation as the no.1 threat to humanity. And when they mention humanity, they’re talking about their exclusive little club.
The thing is, humans, being humans, are suceptible to delusions of all kinds. Our imagination served us well until it began to undermine our actions. More than any other trait, it is this delusionary behaviour that has governed our trajectory. The elite may suffer from the most severe delusions of all. Much of their ilk believe that we were fashioned in the image of an extraterrestrial “creator” species. Others belonging to christian factions are pushing as hard as they can to initiate WWIII. Why? Because the sooner they create the conditions for the apocalypse the sooner their lord and savior jesus christ will return to wipe out all the unbelievers and rapture the faithfull to heavenly glory.
Yet other factions are paving the way for lucifer. And on it goes. Again, it matters not if a sizeable and rational portion of humanity raises their eyebrows at all this. What matters is that sufficient numbers of the elite class are true believers and they are pulling all the strings while deeply embedded in these severe delusions.
With all that being said, the biggest delusion of all may be that they believe that they are the captains of destiny, that they are deliberately orchestrating the near collapse of human civilisation to then triumphantly resurrect it… in their image.
Some of the most important imagery held up by the occult uber elite factions is that of the phoenix rising from the ashes. Much of this symbolism is reflected in the deliberate destruction carried out by the MIC as a sacrificial offering to the god of war to then rebuild civilisation to please other deities… or pockets.
The ultimate truth may be that this self important and arrogant species knows very little and is of little importance in the grand scheme of things. Of course, as individuals and as a species we’re always going to see things from our perspective. We all feel like we’re the centre of the universe.
In reality, we may be no more exceptional than bacteria or a fungal growth. And our collective behavior – when viewed from afar – would appear no different.
The behaviour of the IMF, the World Bank, or the BIS and the elite families that run them are merely subsets of the behaviour of the whole organism. They would not exist without the rest of us, and we probably would not have progressed as much as we have without the elite playing the role of antagonist.
Then again, if we really are the only intelligent expression of life in the universe, I would consider that to be noteworthy. And a shame that we blew it.
Rick, many excellent points. Thanks.
Rick, the problem I have with these owners of the central banks, are what could have been done with laws and institutions.
Think about it Rick. You own central banks and get trillions annually, by law: “The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.” http://www.federalreserve.gov/faqs/about_14986.htm With trillions annually you can hire anybody, do marketing, propaganda, anything. Design laws and institutions for.. anything.
On a long enough timeline trillions in propaganda, with buying politicians and thinktanks, you can bring about any law, any institution.
Ok, what have we actually got? A world economy that is trying to grow (implode) as fast as possible. That works as a energy dissipative system. Destroying every niche of biosphere in the process, destroying all possibilities of future generations “easy” survival.
Now, I am completely ok with this being a compromise, an accident, history having it´s way with us. But to really have elders, leaders, owners of central banks, elites that had some choice. I seriously have a problem with that.
Laws and institutions can be made about anything. On a long enough timeline with trillions in funding, anything would have been possible. And this, this, is what they decided was the best of all possible worlds. What kind of inbred drooling i-d-i-o-t-s are we talking about here?
Rick, if you owned the central banks you would have done a better job even if you were a blind, deaf, mute with both hands tied behind your back.
Grow or die. The Elders have done a tremendous job
What would you have done better?
Grow or die: grow and (later) die
What could be done better? Ask the Foundation for Resilient Societies. What difference does it makes to spend a few millions in something like their project instead of in anything else? The point is not only “Elders” but the vast majority of people is so egoistic that they don’t care if their death implies the same fate for half the rest of existing spieces, including all other humans
Ask the bacteria in the petri jar filled with sugar water what could be done better?
Ask the reindeer on the island in the far north what could have been done better?
Nothing could be done better. Otherwise it would have been done better because the force with the better idea would have won the battle.
There is no socialism in the petri jar…
Malthus wasn’t a bacteria, nor was it Meadows nor is it Tverberg. I just can’t really get the information side of thermodynamics (saying that a hurricane has inertial “memory” doesn’t mean very much for me). Wonder if there is something there, I should ask Roddier but I don’t even know how to make the question. And I am not sure he has an answer
We’re actually on the same page. When you pull away from the fray to gain a bird’s eye view I think we can agree that we’re dealing with a superorganism that’s behaving very much like a cancerous growth.
The way I see it, the elite factions throughout history have acted as guiding cells within the organism, pulling us this way and that according to selective pressures favoring survival. Their role is no more “intelligent” or self serving than that of an alpha male silver back gorilla lording it over his “tribe”, sometimes gentle, sometimes resorting to extreme force, but the end result somehow benefits the group.
The gorilla doesn’t decide what works and what doesn’t. And nature isn’t wise. She just wants to survive – at least for a while. Sometimes the paths she goes down in search of that survival, while initially promising, end in failure and even extinction.
Now, as far as I know, there is no evidence for an “intelligence field” in nature – a field effect whereby the lessons learned from one branch of natural selection are shared with all other branches. For if this were to exist, the millions of failed species experiments would not be in vain – the data from each experiment would be invaluable to and used by the whole of “creation” to improve chances of survival across the board.
To some extent, humans have been able to interpret and utilise this data because their ability to observe objectively mimics the effect of an “intelligence field” of sorts. So we’re in a much better position to affect the collective trajectory of the superorganism. But remember, this is no more impressive than components of a cell tweaking levels and flowing towards utility based on preset fundamental directives.
Unfortunately, the members of our species that are equipped with this level of awareness have never been able to overcome the overwhelming impulse of the “guiding cells” – the elite factions – that are driven entirely by short term reward and short-sighted self interest at all cost.
So, even though our species now possesses the ability to analyse our existence and somewhat direct our behaviour towards higher goals, the long acting impulse to consume and grow beyond our means is so embedded in our DNA that no amount of rational redirection at this point is likely to stop this train from derailing.
The elite factions comprise one subset of cells that got us this far. Every decision, every fork along the road, got us to where we are now. All the religious belief birthed from astrotheology, milenia of myth-making, all of the wars, all of the insane, bloodthirsty autocrats – all of it was nature’s way of getting us farther along this path to nowhere.
You see, I’m of the belief that nature has no purpose, no goals… Everything that human beings do in their seemingly purposeful lives amounts to autonomous micro utility funtions branching outwards this way and that with most of the branches drying up and rotting until nothing is left. A tiny minority of branches survive for one reason or another no matter the properties involved. I mean we have the duck billed platypus for heavens sake!
What was achieved? Nothing, because nature – the guiding force behind everything that we see and cannot see – is not looking to achieve anything. Remember, she has no goals. Certain processes emerged and led to “stuff” hanging around longer than other “stuff”. And that’s all there is to it.
The elite factions play out their role in the way they do because it works for them in the same way that laying eggs “works” for the mammalian platypus. And their behaviour – for better or worse – has dragged a few billion other humans along with them down this path. The intelligence, cunning, and lust for power that they undeniably possess, has doomed us to run the train off the tracks at full speed, but was probably just as responsible for our yeast-like expansion.
The other permutations – had we been guided by alternative “guiding cells” – don’t get a look in, especially at this stage in the game. All the cells in the superorganism are forced to suffer the same fate due to the inertia in the system.
And this is the real kicker… what we may believe to have been a better path to go down – had the existing elite not been formed – may actually have resulted in a dead end for our species much sooner, because of variables beyond our control.
It’s impossible to know with any certainty, but think of it this way… what if the human race had decided to go 100% down the pacifist route a decade of two ago, international agreements signed and every nuke and other weapon on the planet destroyed for the good of all. Yippee! Followed by the longest party ever. Then a hostile alien species shows up staking a claim to their ancient stomping grounds. Oops. Caught with our pants down.
You can substitute this scenario endlessly, every branch leading to alternative realities until you’re blue in the face. And I’ll wager that every single one will not be to your liking – there’s always some feature that’s not quite right. No matter which way we interpret the actions of the elite or our species as a whole – as either good or bad, constructive or destructive forces – it makes little difference to the direction we take or our chances of survival when compared to other species.
There are too many factors involved when attempting to predict our fate. The intelligence or lack of it among the elite “cells” is merely a surface reflection of the underlying natural forces at work. Nothing more, nothing less. They are no more in control of things than anyone else.
Of course, some animals play dead when threatened. Deception remains one of natures most useful “talents” – at least among the local inhabitants. So I wouldn’t rule out the possibility that there is a grand deception at play beyond the usual shenanigans… I live in hope.
‘Unfortunately, the members of our species that are equipped with this level of awareness have never been able to overcome the overwhelming impulse of the “guiding cells” – the elite factions – that are driven entirely by short term reward and short-sighted self interest at all cost’
I put out a different Fast Eddy Challenge particularly targeting the Koombaya Krowd some months ago – but everyone can play:
Can you find anyone – including yourself – who would not accept the following:
– houses worth USD5M each in any destination around the world
– a private jet with with all costs covered for the rest of your life
– USD20M per year tax free inflation adjusted for the rest of your life
The search for someone who would turn that down goes on …
I believe that we are all hard coded the same as the elites who guide us…. it’s just that for whatever reason (more intense drive, luck, intelligence) certain individuals end up leading the way…
But if we were to say kill off the 50,000 most powerful people in the world — another 50,000 would step up and do the same things they are doing…
As a kid I would have loved to play in the NHL — but I was not good enough. But lets say most of the best hockey players were killed off leaving someone of my middling ability as one of the best remaining players on the planet …
Believe you me I would have been in their smashing and crashing and battling just as fiercely as the elite players that I was replacing….
Rick Grimes
One of the chief ways we ‘learn’ is through genes. Genes know how to make proteins which are useful. We inherit a third of our genes from bacteria, besides the living bacteria we harbor in our bodies. You would have to say that our ‘learning’ goes back to the first microbes who learned how to make useful proteins.
Don Stewart
Economists tell us the purpose in life is to spend–spend–spend. This is not too different from dissipative structures being formed to make use of the energy gradient that is available.
But if we look at the situation closely, there are at least two sides to every story. Ying and yang. Open and closed systems. Order and disorder. Excesses of any kind are never good. Having a vast quantity of goods doesn’t really make us happy; instead favorable relationships with others, and with the ecosystem in which we are placed, are very important too. Through the years, the people in many countries have put together various “scriptures” giving insight as to how life should be lived. By no stretch of the imagination is this material all “correct,” but this material, plus various traditions around it, give a different option for a focus to life. There seem to a number of common threads–treating others as we would want to be treated; giving thanks for good harvests and other benefits; following traditional patterns (which vary) of raising a family and interacting with others.
We have now decided we don’t need this. We have convinced ourselves that all of our academic studies are 100% correct. Professors should spend a substantial share of their time adding to academic literature, so that we can save ourselves by our superior knowledge. The problem is, a rather large share of these academic papers are not right either. They were written with too narrow focus, or they put together a model a model based on an incomplete understanding of the situation, or the picked up some earlier paper’s false conclusions. Now we can see that these studies will not save us, collapse is “baked into the cake.” In fact, our academic papers have as many deficiencies as the scriptures of old.
Maybe relationships really are what are important, and not the “state” of being rich. We will not be saved by many stored up goods and services, or by academic papers either. Maybe we need a balance in our lives, like many people in the past had.
Don,
Agreed. Bacteria rule the world! I wonder if they have problems with their elites too?
This essence of “learning” is what AI specialists are attempting to imbue their creations with. Given more time, biomimicry utilising our species as a conduit would have led to some interesting life forms.
I bet they even make jokes about their elites…. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8943027/Top-ten-banker-jokes.html
FE,
Come on man, everyone knows Luke Skywalker turned down WAY more than what you’re offering. Rule the Galaxy as Sith Lord. Now that’s a deal worth considering.
Oh, and there was that carpenter guy… from Nazareth, I think. Walking around the desert. Probably lost a sandal or something. Anyway, story goes that he was offered the position of King of the Elders by some other Sith Lord type. AAALLL the earthly power you could possibly want. Riches beyond you wildest dreams. What did the fella do? Flatly refused. Said he’d rather be poor. Must of been the heat…
I’ve never seen any of the Star Wars movies.
But everyone has their price…. if it wasn’t the Fast Eddy Living Massive Package…. they could be tempted by something else …. that involved BAU as the provider…
Rick,
“Then again, if we really are the only intelligent expression of life in the universe, I would consider that to be noteworthy. And a shame that we blew it.”
I’m not sure we “blew it” really because there may never have been an alternative outcome. Many people have called intelligence a Lethal Mutation. As soon as any creature becomes sentient and then intelligent, it begins to live outside of the natural world, which always leads inexorably to overshoot, ecosystem collapse, extinction.
I do often wonder, though, if our planet were bigger to begin with, say, as large as Jupiter perhaps. Then we would have had enough time to develop a vaster more advanced technology before our planetary resources were squandered. Perhaps then we would have had a chance. However, with Fermi’s Paradox it seems unlikely that we would not be detecting some evidence in the universe of advanced civilizations. But we hear and see nothing. Who knows. Perhaps Eddy’s Elders know.
Perhaps!
But here’s why I think that we really haven’t found anything… I don’t know if you’ve heard of the Disclosure Project led by Dr. Steven Greer but it appears to be a Rockefeller funded operation that attempts to convince us that we’ve already made contact.
>>>The Disclosure Project is a research project working to fully disclose the facts about UFOs, extraterrestrial intelligence, and classified advanced energy and propulsion systems. We have over 500 government, military, and intelligence community witnesses testifying to their direct, personal, first hand experience with UFOs, ETs, ET technology, and the cover-up that keeps this information secret.
http://www.disclosureproject.org/
At first glance, it looks like an impressive line up of very credible witnesses until you realise most of them are ex CIA. You have to ask yourself why the elite would go to such lengths to convince as many people as possible – gullible or just curious – that aliens exist and that we’ve been working alongside them for many decades.
Some people believe that we’re being prepared through hollywood, popular culture, NASA, and the Disclosure Project for some kind of “event” that would make all of humanity rally round the flag of a global goverment. It doesn’t appear to be going very well so far. It’s all a bit of a joke.
The way I see it, the universe is either teeming with life or we’re the only planet to have gone through this “miraculous” process.
Either option is mind-blowing. I believe the first to be more likely and very similar to our oceans in the way that they harbour copious amounts of life which can appear absent unless viewed from a certain perspective.
In space, it may be that the time intervals between evidence of activity are so great that we’re peering into the gaps hoping to see something. And even if we found “others”, there would be no way of contacting them since the senders would be long gone or the distances too great to overcome.
Also, the “others” may be so different to us that we’re looking for the wrong things in the wrong places.
If we’re alone, I would have to conclude that there is something more going on here than meets the eye…
But hey, at least this has happened…
Gravitational Waves Detected, Confirming Einstein’s Theory
http://www.nytimes.com/2016/02/12/science/ligo-gravitational-waves-black-holes-einstein.html?_r=0
We can detect two black holes colliding a billion years ago but no ETs?
If there is no energy there can only be a primitive economy — in primitive economies the role of banks is very minimal because there are no significant surpluses….
The root cellar becomes the bank.
People prefer to store whatever they save as something they can see, like cattle. They may have the right idea.
I think the plan now is to save the banks. It is the depositors who will find their funds missing. That is only slightly better. How are employees to be paid, if the employer’s bank account is lacking funds?
Eddy, your Elders.. they are international bankers, aren´t they?
If the Vatican (bank) or a guy who constantly rubbs shoulders with international bankers don´t know anything about a plan, what is that plan?
Banks will fall. Are the Elders are planning for their own fall?
I must be too stupid to see the genius behind this, please help us mere mortals out here Eddy..
I didn´t understand the long-term plan Eddy.
You own the central banks, make trillions by law. Then you try to extend BAU as long as possible. Ok, I understand that part. What then?
Screw up the biosphere, completely, and then let everything burn?
Long term plan?
There was never a choice therefore no real plan….
We grow or we collapse. That is an immutable law.
Since the day we learned how to use fire we guaranteed that we were going to extinct the species…
And century after century we have done nothing more than kick the can down the road battling against the collapse of BAU
Note that BAU is always in flux — BAU in 10,000 BC was very different from BAU today of course.. but nevertheless it has to continue to expand — to innovate — because if it did not then the system would have collapsed (as it did on many occasions)
When it did collapse we were able to rebuild it — because the low hanging fruit was available….
The Elders are simply another phase in this continuum of BAU…..
The farmers of the past wiped out the hunter gatherers…. just as strong companies wipe out weak companies… just as strong animals wipe out weak animals….. just as aristocrats the world over lost power to those who embraced industry….
The Elders are the strongest, most clever entity of our time — they are the farmers, the industrialists…. they have risen to the top because they offer the most effective and the most efficient means to delivering growth …..
Let’s say communism was a superior system of delivering growth — the Elders and their system would have been replaced… just as the industrialists replaced the farmers…. the strong always win…. always….
This time is different.
The Elders and their system (our current BAU) will collapse. There will be no reset as there has when collapses occurred in the past — because there will be no significant sources of energy post collapse.
If we are not extincted — then we are heading back to a very primitive state of being…. and we will remain in that state — we’ll no doubt start over again with the fire gig…. but that will end badly in a relatively short time …. for obvious reasons
Hey Van, have you ever read this articleEnergy and Human Evolutionby David Price? It was a real eye-opener for me and still resonates even 30 years after publication. Extremely powerful thinking. Check it out if you haven’t already.
Great article, I agree.
The chinese had a one child policy. The EU was formed of independant nations. Legally nazis were prosecuted by the universal law against war.
Just saying, there are possibilities of making laws and institutions that give more time.
I haven´t seen such things by the Elders. If there are Elders, they only gave us a few measly years after Lehmans, when decades could have been planned (some decades ago).
Bad, bad, planning. F minus, course flunked..
The Elders are responsible for BAU as you know it.
They are the reason you are able to live large – the reason you have food on your plate every meal — a warm/cool home — a car — air travel — hundreds of energy slaves working for you round the clock…
Here’s the track record of the Elders:
http://ourworldindata.org/wp-content/uploads/2013/11/long-term-real-growth-of-gdp-in-the-us-1871-2009-visualizing-economics-645×447.png
Bravo Elders! Bravo! Brilliant job. Superb!
Psile, yup, David Price had it nailed. http://dieoff.org/page137.htm
Now I wonder. Three decades of time to make plans and all the Elders could muster was this we have.
I-am-disappointed.
FE, I have to disagree. The elders are leaches. They are the reason I am not 10% richer. The worlds wealth comes from the hard work of 200 million in the US and 4 billion around the planet. The elders seek to maximize their ownership not the “common good”. They in fact will damage the “common good” for an extra two cents.
The Elders have created enormous amounts of wealth over the past 100+ years.
Compare the wealth in the world today with that of the earlier centuries. Hundreds of millions of people live like kings….
The wealth they have created is been available to everyone — how many millionaires are there on the planet?
But the Elders do not just give the wealth away — you have to get with the programme — you have to have a combination of intelligence, drive, and a great deal of luck to get that extra 20% or 20000% better lifestyle….
Think of it this way.
There are under 1000 players in the NHL – from all over the world. They are the best of the best – they were lucky to be born with the physical skills — size, speed, strength, game intelligence… and they had the drive to make it to the top…
BAU under the Elders is a similar system — you have to compete…. that’s likely why the Elder’s system has been so successful… it mimics nature….
Communism was a competing system — it failed. It does not mimic nature. The wolf does not help the wounded moose — it eats it.
The wealth is out there — nobody is just going to hand it to you — if you want to live large you need to compete…
You cannot blame the Elders.
In fact you should thank them — if you had been born in the 1800’s you’d have lived a far less comfortable life.
“They are the reason I am not 10% richer.”
10% of their money. Their credits with their symbolism printed upon them. It is their money that brings you their wealth. Without it you would have nothing. You suck on their teat and complain you have to take a breath.
Van Kent, you have it right. There are no Elders. There never were. World leaders, major industrialists, TPTB, The Deep State…all of that is fantasy and delusion by people who simply cannot except the randomness and disorder. There are no answers, and no one in charge has the faintest idea of what to do. It is evolution, the mutation of intelligence and Entropy crossing lines and causing our extinction.
And God Bless America — right?
Sheeple…. Clueless…
Oh, yeah, I also forgot to say, “Happy Valentines Day!”
InAlaska, yup “Happy Valentine’s Day!”
Citi: World economy seems trapped in ‘death spiral’
The global economy seems trapped in a “death spiral” that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned.
Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
Say it isn’t so, little Joe!
http://40.media.tumblr.com/2d293b317f6249ab37ff4bd462cf6e60/tumblr_n1qjsxSGIH1rfq5q9o1_1280.jpg
“The global economy seems trapped in a “death spiral”…”
In this case, CITI gets it – they see the death spiral. That’s interesting in and of itself, that a banking institution as large as CITI would not only notice it but acknowledge it. We must be getting close to some kind of financial dislocation for that to be occurring.
I think a lot more people are starting to understand that we’ve been in the eye of the storm for 8 years….
Even the MSM is dropping the ‘green shoots’ spin because it is becoming impossible to paper over reality….
This is different than 2008 — this time a lot of people are expecting something wicked.
That said – a lot of them are thinking this is a great opportunity — they are putting their ‘Big Shorts’ in place and getting ready to reap the rewards of crisis — because the central banks will always fix things and make sure the casino pays out when they win…
Imagine getting your short right and returning 10,000x your 100k bet —– you’ve got visions of yachts and private jets and Ferraris dancing in your head…..
And you find the cashier counter at the casino is boarded up ….. with rats scurrying around the empty casino….
Instead of the yacht you end up chasing after the rats so that you can have something to eat for dinner….
Cognitive dissonance. If you listen to the end of the interview CITI concludes that there will be a way out of the death spiral and stable market conditions will be reestablished.
I didn’t listen. Because I already know the outcome. I do not require a banker to explain to me what is going to happen
There must be a happy ending! It’s human nature…
This is How Financial Chaos Begins
It’s not contained.
There are over $1.8 trillion of US junk bonds outstanding. It’s the lifeblood of over-indebted corporate America. When yields began to soar over a year ago, and liquidity began to dry up at the bottom of the scale, it was “contained.”
Yet contagion has spread from energy, metals, and mining to other industries and up the scale. According to UBS, about $1 trillion of these junk bonds are now “stressed” or “distressed.” And the entire corporate bond market, which is far larger than the stock market, is getting antsy.
The average yield of CCC or lower-rated junk bonds hit the 20% mark a week ago. The last time yields had jumped to that level was on September 20, 2008, in the panic after the Lehman bankruptcy, as we pointed out. Today, that average yield is nearly 22%!
Today even the average yield spread between those bonds and US Treasuries has breached the 20% mark. Last time this happened was on October 6, 2008, during the post-Lehman panic:
http://wolfstreet.com/wp-content/uploads/2016/02/US-Junk-bond-spreads-CCC-2008_2016-02-11.png
More http://wolfstreet.com/2016/02/12/how-financial-chaos-begins/
A company that cannot afford to borrow is pretty much out of business.
We are very close…. I can smell death in the air….
We’re all going to kill each other.
You know this is true. You know that every single war/insurrection/conflict from this point forward is going to be met by an opposing reaction, in a never ending cycle all the way down.
This must be correct, if you think about it. Every conflict in times past has seen the winners emerge with more resources and energy, and they sometimes used these to rebuild or help the defeated.
Because we face terminal resource decline, there is no emerging from any conflict as a genuine winner, and there will be no resources to rebuild. WW3, 4, 5, 6, you name it. And after each one, more and more infrastructure will be destroyed, more people will be lost, etc., that can never be fully replaced.
9/11 already set in place this spiral.
Capitalism requires expanding markets and access to them. Usually, that is what is fought over and the resources needed to maintain the growth. The PTB was will mask over the real reason so the people believe it is for a noble cause, like defending our way of life.
Without copious resources, stable governments, etc. how will all of these wars you speak of be conducted? I certainly agree that war will most likely be the last globally coordinated activity that happens, but it won’t last long.
It could be as fast as a push of a button…nukes
A nuclear war does not benefit TPTB so there will be no nuclear war.
Really? Have you read the writings of Thomas Merton? Afraid these seemingly sane and rational “Elders” will fall in the trap of justifying self destruction. Remember, there have been a number of close calls that were avoided by luck and quick wit (ie President John Kennedy. NOT listening to his expert military brass urging for a first strike. He wisely called the Kremlin and made a deal to save face over Cuba).
Neither did WWI, benefit the PTB, but we had it.
Here is a clip of Wiz Kid Robert McNamara in the docudrama “Fogs of War” that exposes the limited view of decision making
https://m.youtube.com/watch?v=SfPwR00HXM0
But maybe they did benefit….
Or maybe Hitler was planning to exterminate the Elders (who he understood to have stabbed Germany in the back in the previous war) …. and they were left with no choice but to go to war….
Putin appears to be taking on the Elders right at this moment ….. no doubt he sees their empire as weak…. an Elder backed into a corner is a dangerous beast….
Certainly the Soviets were not part of the Elders, Fast Eddy. Speaking of the fogs of war this can happen during planning and execution of operations. The German High Command was informed the Soviets had an estimate division level of between 150 to 170, the actual was 300! Second, what appeared as paved roads on maps were just dirt paths, not passable during Spring rains. Third, the Russian train tracks were a different gauge rail and hence had to be dug up and reset, a monumental task that hindered supplies. Also, unlike the planned invasion of France, the German forces fanned outwards as they advanced in Russia, weakening their strike effectiveness. Needless to say, there are more “oversights” and miscalculations, such as, “General Winter”.
As far as “stabbed in the back”, that was just a myth and there was no measurable lack of financing to Imperial Germany during WWI. No doubt that Hitler desired to be the CEO Elder. Anyway, a lot more can be written on this, but what of it?
Naturally, the British naval blockade that resulted in famine like conditions in Germany did not matter, nor the enter by the United States, nor the new tank weapon introduced did not cause the PTB of Germany to throw in the towel.
Wars by definition are conflicts over territory and resources. They start once peacetime expansion has reached overshoot. Wars themselves don’t require huge industrial weapons. They can involve them, to be sure, but knives/rifles/horses will do the trick just as well as machine guns, tanks, and bombers.
You see, every war in the past ends when a party wins, and that party gains access to more territory and resources. But since we have used up everything, there’s not that much to gain this time around.
Now, I know what your next thought is…you are thinking, that means there will be less war, and more peace, because we are entering a permanent decline. This is wrong because of basic human psychology. Psychology dictates that we always think that there are territory/resources to be gained, even if there aren’t. This is true by our evolution alone, it’s in our genes.
So instead of war for more resources, this time we will have war for less resources. But war nonetheless, because that will be the only means to acquire whatever scraps are left.
Something like this
https://m.youtube.com/watch?v=fL8WU60StWU
Cute
i am afraid that international trade is needed to make current armaments. Without international trade, the level of fighting will go downhill quickly.
Over at the Doomstead Diner there is a graph of petroleum distillate demand year on year % change. It shows that at the start of each recession it goes to about -20%. We are currently at -20%. Yahoo! Can’t wait for next months number.
Ed
I saw that on Zero Hedge yesterday. Also the report about ConocoPhillips dumping some product in Cushing. If I understood the story, Conoco paid somebody to take some of it. Yet today the rise in WTI powers a general stock market recovery. A story which I don’t understand about an ETF liquidation affecting WTI.
Meanwhile, Ron Patterson reports that the Arlington, TX General Motors plant is running 24 hours a day turning out big SUVs.
In times like this, it helps to have your mind firmly made up, so these conflicting bits of information, rumors, misinterpretations, and lies don’t confuse you.
Don Stewart
I have the impression that there is a hiring frenzy in high tech companies.
The markets are highly distorted for any number of reasons, not the least of which is there is so much notional money sloshing around from one market to another trying to find a place they will lose money less quickly. So you get weird effects like Tesla Motors rising in equity value while they lose more money. Far as more SUVs being sold, my guess is there is a lot of channel stuffing going on with that. I live in one of the least hard hit areas so far, but by no means do I see a lot of new SUVs on the road.
Overall though, the system is winding down pretty rapidly, even without a real catastrophic lockup in liquidity. 2016 will see a lot of turbulence,
RE
– Markets in the next system: http://thenextsystem.org/markets-in-the-next-system/
If we manage to get up a new system markets will be quite different!
Øyvind, I guess it depends a lot on what sort of people are still alive, what attitudes they have.
If all the survivors are ex-bankers, I think I wouldn´t want to trade anything with them. I would be too afraid for my own life to be around them. But if they were ordinary rural people with ordinary worldviews, engineers, farmers, actually anything but bankers and corporate directors, no problem, bartering is a part of everyday human lives. But so are work parties and such, because houses and barns when they are built, the entire village is needed, because everybody needs to help everbody else (except the ex-bankers and directors, psychopaths and all that..). I think long distance trade will need to start with people who know each other and can trust each other. It´s worth my while to take a sailing boat to Norway to bring Øyvind what he needs, and Øyvind has a wonderful beer to take to friends in France etc.
I think the very best bear is even a little further north than here I live, made from barley grown under the midnight sun. This 24-hours sunlight gives the grain an extraordinary taste.
The same thing with strawberries, the sun gives them a richer flavour. But these you can’t bring back to France. Maybe cloudberries, as they have natural preservatives.
If there are enough resources per capita, then a central market system would seem to be ideal. Capitalism seems to be a way around inadequate resources per capita.
Debt is absolutely critical to today’s markets, and was a feature even in ancient times. This article doesn’t mention debt at all.
Gail, what a great article in which you describe the entire correlations between energy and money !!! Thanks !!!
What do you think how much time we have until the whole edifice of lies?
We get here in Germany just a foretaste of the coming upheavals.
It looks to me as if steps downward are at most months away. We have any number of banks on the edge of bankruptcy, especially in Europe. Low commodity prices are pressuring all kinds of producers. Oil companies are reported to be maxing out their credit lines. The next re-evaluation of credit lines comes with the March 31, 2016, financial statements. Venezuela and some other exporter are having real problems. Stock prices seem to be terribly over-valued.
The question is how all of the many bad situations play out. Will things sort of hang together for a little while longer–maybe even two or three years? We can’t tell for sure.
Here’s what it’s like in Venezuela right now:
http://rielpolitik.com/2016/02/14/voodoo-economics-venezuela-is-out-of-food-heres-what-an-economic-collapse-really-looks-like/
This is going to look like paradise when the implosion comes….
Power black outs… food shortages…. well at least there is food and sometimes there is power….
Soon there will be neither.
Dear Finite Worlders
For any of you planning to watch Marjorie Wildcrafts webinar which includes Tarahumara agriculture and cooking explanations, here are two scholarly articles about their agriculture. You may find it interesting. ‘Shifting agriculture’ is probably some version of the Milpa system used by the Maya, The more vegetated land which they occupied before the Spanish conquest would have had more carbon in the soil, so moving to a higher carbon area every few years and letting the old plots re-accumulate carbon would have made sense.
Don Stewart
The Tarahumara are one of the most isolated and intact indigenous groups in Mexico. Their agriculture has traditionally been practiced within the steep canyons and uplands of the Sierra Madre Occidental in southwestern Chihuahua. Adapting to these rugged conditions, the Tarahumara developed a variety of agricultural techniques that allowed them to be self-sufficient in food production and independent of external inputs. As varied and ingenious as their techniques are, they share one main objective — to overcome the lack of organic matter in the stony mountain soils. Since the arrival of the Spaniards, the addition of organic matter has involved large amounts of animal manure to increase organic matter in the soil and maintain fertility. The focus of this study is to investigate new agricultural techniques that the Tarahumara are adopting due to the pressures of globalization and alleged climate change. These new technologies may still include many traditional agricultural methods, but they are increasingly using commercially available fertilizers and other modern agricultural additions, thereby losing self-sufficiency. This study includes in depth interviews with 28 Tarahumara farmers to better understand the modern agricultural techniques, their motivations, and overall sustainability. Soil samples determined the viability of Tarahumara agricultural techniques on soil fertility by examining the visual description, organic matter content, soil texture, and a chemical analysis. The analyses showed that traditional Tarahumara agricultural practices are efficient and sustainable, while modern additions are often ill-suited for their environment and are disruptive to Tarahumara culture.
At the time of the Spanish conquest, the Tarahumara were hunter‑gatherer‑cultivators, collecting what they could from local trees and plants, and using a version of shifting agriculture to produce crops of corn (maize), beans and squash. Their methods of farming were probably well‑ adjusted to the then-prevailing environmental conditions in the Copper Canyon region and caused little soil degradation.
With the arrival of the Spanish, the Tarahumara were forced to occupy progressively more marginal land where their traditional methods were unable to supply enough food for their numbers. However, the Spanish introduced them to new crops, new animals (goats, cows, sheep) and new techniques, principally the plow. Adopting these innovations enabled them to survive despite being deprived of their best land.
A reduction in the arable area available prevented them from continuing to grow crops by shifting cultivation. On the other hand, their newly acquired animals afforded them the possibility of adding manure to their farming plots on a regular basis, keeping them under cultivation more continuously than was previously possible.
For manuring purposes, herds of 15‑50 goats are penned into square enclosures (6 m x 6 m in size) each night for four nights. The pen is then moved. The method is slow but effective. Plots of land fertilized by this method give good yields for between 4 and 6 years. Cattle (5‑15 at a time) are also used to supply fertilizer but have to be kept on the same area for 15 nights, for an effect which lasts about three years.
In wintertime, stock is usually confined to caves or covered enclosures. The manure deposited is collected and transported in sacks to the farming plots in spring. A simple rotation system is used with about 25% of available land left uncultivated in any one year. Animals may be loaned out to other families for the purposes of land fertilization, or pooled together to ensure effective results.
The Tarahumara tilled their plots using a simple digging‑stick, which could be used with minimal risk on tiny plots of land, even on steep slopes. Following the adoption of the plow, it was much easier to cultivate larger fields on lower angle slopes, rather than smaller, steeper plots, principally because the plow disturbed the soil far more “efficiently” and to greater depth than the digging‑stick. On the other hand, the vegetation of the steep hillsides was subsequently left undisturbed.
Given the terrain, pasture is hard to find. Near the smaller settlements (ranchos), natural pasture exists only for a very short time during the rainy season. At other times the herds have to be taken ever greater distances in search of richer pickings. This has traditionally been done by the children, leaving the adults free for other tasks. Trips to find suitable pasture may last two or three days at a time.
Despite the difficulties of providing livestock with sufficient food, the animals provide a hedge against starvation, and are a measure of Tarahumara wealth. The balance between crops and livestock is critical to the Indians’ well‑being. This was not the case before the mestizos moved in and pushed the Tarahumara onto more marginal land, but it is today.
The yearly farming cycle
The Tarahumara agricultural calendar lasts about seven months, beginning with planting, at the end of April or in early May, and ending with harvesting, during late October, early November.
The planting date is determined by the phase of the moon, rumors of rain, offers of help, and by personal tradition. For a good maize crop, the plants should be about 30 cm high when the first heavy rains fall. The timing and duration of the rainy season is crucial to the success of the crop. Climatic uncertainty is compounded by the effects of pests and diseases. Many plants are damaged by a kind of worm but the Tarahumara believe they should be left alone since otherwise the entire crop will be lost. Immediately before the rains, many families are down to their last reserves of food, and many animals have to be slaughtered both for survival and to placate the Gods.
The young plants need a lot of vigilance to prevent animals from destroying them. This responsibility is shared among family members since the individual plots of land belonging to one family are so widely scattered. The adults will occupy themselves with mending and craft‑making while keeping an eye on the crops.
Towards the end of July, the young corn is weeded in a communal work effort, amidst general merriment, a sign of relief that next year’s food supply is well on its way. Beans are planted in early August. Harvesting takes place in late October, early November. When about half of the maize has been harvested, corn beer (tesgüino) is prepared, the rest of the harvest becoming a communal or cooperative effort.
Some Tarahumara practice transhumance, moving down to the canyon floors in winter for better shelter and access to pasture. However, many Tarahumara, especially the more Mexicanized, stay in one place all year, lighting fires and wearing warmer clothes as their protection against the cold. The winter time is when men make musical instruments (guitars, violins and mouth harps), and the family collects firewood, tends the goats and make baskets and other items, some of which will be sold to tourists.
https://www.google.com/?gws_rd=ssl#q=dow
Wow, the Dow went right back up close to 16,000, up 300+ today. Oil also went up. Either that’s plunge protection or optimistic Friday is skewing investor’s viewpoint, because this is not a market to dive back into.
Dear Finite Worlders
Worried about collapse? May be worth your while to take a look here:
http://growyourowngroceries.org/3-types-of-tarahumara-indian-corn-and-how-they-are-used/
These ‘ultra-athletes’ with low disease rates live in the back of beyond and grow and cook their own food. You can sign up for a webinar where you will learn about corn (their staple) and how they cook it. (The same tribe living in Arizona is famously riddled with disease.)
Full disclosure: taking a corn grinder into the apocalypse with you will be really useful. Also some pots and pans.
Don Stewart
Post BAU I’ll be happy with GMO corn…GMO soya … wheat sprayed to high hell… pigs fed on toxic waste… grass stew… dog meat… boiled rats….
Of course I’d love to shop at Whole Foods… but when one is starving beggars can’t be choosers… a steamed leather shoe will do….
God leaves enough evidence for the wise man to find his way! Very little wisdom in any of this, except from Don Stewart
Right!
The implosion brings various social groups against each other. The retired people do not support strking teachers or health workers, they fight for themselves and their pensions. Such situation can be seen in the Slovak parliament also today and is a part of the Slovak culture since the fall of the communist regime in 1989. See the video in this article:
http://tv.hnonline.sk/aktualne-videa-141/vsetko-bolo-zadarmo-vy-len-beriete-uplatky-utocili-na-ucitela-v-parlamente-1055251
Obviously neither of those groups understands the situation.
Basic problem–not enough for everyone.
Dear Finite Worlders
I heartily recommend this articled for anyone who gives a damn.
http://peakoil.com/consumption/how-far-can-we-get-without-flying
‘My wife and I drive 2,000 veggie oil miles to Illinois each year to visit our parents. Along the way, we sleep under the stars in the Utah wilderness. This is adventure travel, the opposite of fast travel, and it has deepened my relationship with my parents. After such a journey, I more easily see how precious my time with them is.’
I want to comment a little on what I see as the very profound quote above. One of the people here is constantly criticizing one blogger who puts things behind pay walls. Besides the fact that bloggers need to eat, there is a deeper psychological issue at work. Humans tend not to value anything which is ‘easy’. If we don’t work for it or pay for it and we aren’t expected to be nice in return, then we put very little value on it. A hundred year old woman recently died in my home town. She had written part of her obituary. She remarked that her father had to ride his horse through a blizzard to fetch the midwife when she was born, and he never let her forget it. How far did he ride the horse? Probably not more than 5 miles. But they were tough miles. So they are memorable.
Who can remember, with anything except pain, an airplane trip to visit a relative? Would you write about it in your obituary?
To change the subject a little. Thoreau said he had traveled widely in Concord. I believe that is the new frontier. Instead of flying off to the beaches of Rio and pretending you are on vacation, visit someone in your town who lives very differently than you do, in some important respects. That may REALLY take you out of your rut.
It is instructive to think about Marjorie Wildcraft’s trip to visit the Tarahumara in Mexico. Now Marjorie is very much into survival and making do with what you have and so her trip will likely pay big dividends for her and for those of us who read her writings. But who wants to see yet more pictures of the couple down the street in luxury hotels in Aruba?
Don Stewart
She remarked that her father had to ride his horse through a blizzard to fetch the midwife when she was born, and he never let her forget it.
Why did he never let her forget it? Did she ask him to fetch the midwife? Did she ask to be born? I would suggest he did it for his own selfish reasons or, as the blogger you refer to would put it, Mr DNA made him do it. So why should she be made to feel grateful?
Parents who choose to have children owe it to those children to do everything possible to make their lives happy. The children don’t owe their parents anything.
‘Parents who choose to have children owe it to those children to do everything possible to make their lives happy’
I’ll take issue with that statement.
This attitude has permeated the education system — oooh little Johnny can never be given a failing mark…. that would be bad for his self-image….
Well guess what happens to little Johnny if he goes through his life coddled thinking his shit doesn’t smell —- this breeds mediocrity — or worse — incompetence…. but little Johnny thinks he is a superstar…
Johnny comes to work for Fast Eddy — Fast Eddy will not coddle little Johnny when he puts in a half-assed effort…. Fast Eddy rips little Johnny a new asshole the first time he does that… (and little Johnny walks away befuddled …. with absolutely not a clue as to why the hammer has slammed down on him…. mediocrity has always been excellence — laziness has always meant a good result)
And when little Johnny is unwilling or incapable of improving Fast Eddy kicks his ass out the door
He wanders back to the happy place — where he can have a cry with mommy complaining how mean that Fast Eddy is and mommy tells little Johnny how special he is and that he deserves to be earning 100k per year – at least! Don’t mind Fast Eddy – he is an asshole. All bosses are assholes.
And then after spending months in mommy’s basement surfing porn, gaming, and uploading photos of himself butt chugging cheap whiskey …. Johnny finally has an epiphany …. he gets his life together — and lands a job that he is truly qualified for….
http://img2-2.timeinc.net/people/i/2015/news/150209/pizza-police-800.jpg
Parents who choose to have children owe it to those children to do everything possible to make they are capable, independent, educated and responsible – and yes happy. Rather than giving them everything — they should be taught to earn what they get.
At least that is my take on things.
‘One of the people here is constantly criticizing one blogger who puts things behind pay walls.’
That would be me.
I don’t mind paywalls – if Gail put a paywall on FW I would happily pay to read the articles.
What I object to is pretending that there are solutions to the problem we are facing — then forcing people to pay for the opportunity to taste the snake oil.
I remember some years ago being in a hotel room in Macau…. there was this thing on the wall that I am not familiar with — I think it is called a tee vee….
I looked at it… touched it… pushed a button an blooooey — it turned on! I pushed more buttons and I ended up on the god channel …. yes the GOD channel…
And what did I see? Two fellows – one a skinny chap with bad teeth who looked as if he had just smoked a pipe of meth … he was humping away on an organ providing back up music for the front man … a greasy haired scum bag type who was urging people to CALL NOW!!!
Pledge $30 and we’ll put your name on a card and bless it offering you salvation…. more eerie organ music wafted over the scene….
Hot damn — I pulled out my card and got on that phone right there and CALLED NOW!!! I pledged my $30 and they read my name out on the tee vee…. and I was so goddamn happy…
I opened the window and shouted I am saved! I am saved!
Now – I am not really completely confident that I am saved and will go to heaven — so maybe it’s better that I try to work out how I can extend my time in this dimension….
Chris Martenson can help me NOW. So perhaps I should take out the card and hedge myself a little by purchasing access to the ‘solution’ to the end of the world.
I am afraid you will be disappointed. He advises hunkering down, working on your relationships with other local people, having 3 months worth of food, some cash, some gold and silver, and tend your garden.
See….I have saved you money.
Don Stewart
Always good advice regardless of the world economy.
Ed
If I stand back 10 yards and look at the issue, I tend to come to the conclusion that that’s the way I want to live my life anyway….collapse or no collapse.
BTW…I left out ‘get out of debt’.
Don Stewart
How much does he charge for access to that priceless info?
And did you really put down your credit card to get such brilliant insights? (SARC)
Fast Eddy
If you email him and plead poverty, or merely interest, he is likely to email you right back with the study…no charge.
SARC is the last refuge of those who don’t know anything which is actually useful.
Don Stewart
I wonder – how would you feel if Gail were to add a sentence at the end of every article asking you to pay money to get access to her post BAU solution…..
I’d be more than happy to go into a JV with Gail and write up the ‘solution’ — we go 50/50 on the revenue 🙂
Fast Eddy
If Gail wrote a book titled ‘How To Survive the End of Civilization’ (title already claimed by Toby Hemenway, but that’s a minor point), then I would probably buy it.
Don Stewart
Which proves the axioms … there’s a sucker born every day … and a fool is soon parted with his money….
Why not just puff the hopium pipe — it’s free…
Fast Eddy
Gail has, to my way of thinking, been a doomer. IF she wrote a book about saving humanity, but not civilization, THEN I would see that as intriguing. I have enough respect for her intelligence that I would be curious. I would make a point of going to the bookstore and leafing through her book.
If it looked promising, and I had some money, I would buy it.
Don Stewart
PS Such a book would likely bear some resemblance to Moses persuading the Children of Israel to leave the relative security of Egypt to find the Promised Land. That’s a good way to think about Toby Hemenway’s talk at Duke. So far, the Children of Israel are mostly not budging.
Martenson is selling a survival course… for something that is not survivable … that is very different. Snake oil comes to mind ….
And why does he have to sell it? Just give the hopium away…. it is after all – worthless puff….
And don’t feed me nonsense about how if you give it away nobody values it.
FW articles are free — do you not value them?
If someone gave you a brand new Toyota 4×4 would you not value that?
Martenson blew his credibility when I called him out on allowing the thorium clown onto his podcast as an advertorial…. he first deleted my comments about how thorium is a joke…. and I really caught him out when I outted the clown as being behind a thorium start-up … which he did not disclose…
I wonder how much money Peak Prosperity charges for a 30 minute podcast advertorial session with a guaranteed friendly comments section to follow?
I might want to hype my Jules Verne project with him at some point.
Fast Eddy
While they were in college, Chris and his wife built a house, pretty much by hand, that a friend of mine now lives in. My understanding is that they have been instrumental in organizing some neighbors in the Pioneer Valley in terms of resilience in the face of adversity.
Chris and his wife and the neighbors may be around long after you are gone.
Don Stewart
Congratulations to Chris. He built a house by hand.
Does that mean I should sign up to pay for his snake oil?
Doomsday capitalists are a dime a dozen…. they’ll sell you salvation …. they’ll sell you a post collapse financial plan … you name they’re flogging it….
I suppose they all have to eat — they’ve found their niche — but it does not mean I will respect them… the snake oil salesman would have had a family needing feeding as well….
‘A 2012 Congressional Research Service report published exactly one month before the Sandy Hook school shooting put the number of civilian firearms at 242 million in 1996, 259 million in 2000, and 310 million as of 2009’
Spent fuel ponds aside…. I’d suggest you put your money on Fast Eddy over Chris….
I’m told titles can not be copyrighted.
Interesting thing about all those shows is that God is always a three syllable word. As in go- o-od.
“Statistically speaking, I can expect biking to add a year to my life through reduced risk of cardiovascular disease.”
Great! That means you’d get to have one more year of consuming energy and emitting CO2. Peter Kalmus, the author, has already put 83 years of emissions behind him.
“Hour for hour, there’s no better way to warm the planet than to fly in a plane.”
https://en.wikipedia.org/wiki/Peter_Kalmus
“Kalmus has one son and one daughter, and one grandchild.”
Sorry, Pete. having kids is the best way to warm the planet. BY FAR.
Mike Crews
He’s got his emission down to just a little over 1, while the global average is 5. I expect the 1 can be easily offset with carbon farming, since optimists about carbon farming think it can not only offset the 5, but also sequester carbon already in the air. If his children grow up using as little carbon as he is now, it doesn’t look like any insurmountable problem.
Don Stewart
‘Sorry, Pete. having kids is the best way to warm the planet. BY FAR.’
Exactly!
This is the best rant ever on the topic of the environmentally destructive act of having children… from the series Utopia…
Absolutely brilliant….
Maybe Gail should put just the comments behind a pay wall so the people who use a lot of bandwidth and have a personal agenda pay. Seem fair?
Or perhaps those who contribute useful comments to FW get paid by the word…. subsidized by the government of Delusistan.
Oil Crashes To 12-Year Lows, Biggest Drop “Since Lehman”
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/11/20160211_WTI_0.jpg
The last time front-month crude oil traded at these levels ($26.12) was May 2003 as WTI Crude has collapsed over 22% in the last 2 weeks – the biggest drop since Lehman in 2008. Goldman’s “teens” are getting closer…
Encourage everyone to read “Earth Space Battery” recent research paper that’s floating out there amongst the scientific lit. This paper absolutely nails our final coffin.
Ω is the No of years at current rates of consumption that ‘global phytomass storage’ could feed the human race.
It’s crashed from 67,000 to 1,029 years. So that means in just 2,000 years our species has reduced Earth’s Ω by a civilization busting 98.5%. The global biosphere, human population, (and guess what? The economy) will obviously crash long before Ω = 1 year.
There is ‘uncertainty’ in how the biosphere will function as Ω decreases from the present 1,029 year into an uncharted thermodynamic operating region. (Let me guess, WW3, disease, famine, drought, all the stuff we’re not big fans of)
Conclusion: Lights out modern world as we know it.
“If H. sapiens does not go extinct, the human population will decline drastically as we will be
forced to return to making a living as huntergatherers or simple horticulturalists. Also, the earth after the collapse of human civilization will be a very different place than the biosphere that supported the rise of civilization.”
“There will be a long-lasting legacy of altered climate, landscapes, and biogeochemical
cycles, depleted and dispersed stocks of fossil fuels, metals, and nuclear ores, and diminished
biodiversity. The most powerful species in the 3.5-billion-year history of life has transformed
the earth and left a mark that will endure long after its passing.”
Can’t wait for this future. Those hunters are going to be hunting the horticulturalists.
http://www.bbc.com/news/business-35557072
Japan’s markets traded sharply lower on Friday, following global markets, and as a stronger yen against the dollar hurt the country’s big exporters.
In early trade, the benchmark Nikkei 225 had shed 5.4% to 14,865.77 – below the psychologically important level of 15,000 points.
The index closed down 4.85% to 14,952.61 points – its lowest close since October 2014.
Friday’s losses end what has been a turbulent week of trade for Japan.
The index has shed more than 11% over the trading week, which was short because of a public holiday on Thursday.
Uh, did you catch that last sentence? -11% in 4 trading days! What is this; Godzilla and the tsunami that led to the ongoing disaster at Fukushima all wrapped up in a toxic economic sushi roll?
http://www.zerohedge.com/news/2016-02-11/biggest-crisis-history
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/11/20150128_DB2.png
The rising need for stimulating the demand is present in the system: earning money is harder, so the stimulation of money spending must be more and more sophisticated. Today, it is not only about the marketing of products, it is about the invention of shopping seasons that did not exist before: we have not only Christmas shopping season, but recently, the Valentine’s Day has become another important shopping season, too.
Yeah, MG, I mean these holidays are no longer optional, as everybody has accepted them hook, line and sinker, figuring out how much should be spent per person, per holiday much like figuring out a tip at a restaurant. If you miss something people make note of it and it influences their view of you.
Somebody should set up a service in which you log in all your relatives, their birthdays, xmas, etc. then just set the dollar amount range for each person for each holiday, then it automatically sends them either a card (with a phony baloney signature) or a card and gift in the right price range pre-selected, and emails you to let you know it’s been taken care of with the cost. Then the service provides an end year accounting. It even suggests based on the number of people on your list the expected annual outlay so you are perfectly aligned with current sociological monetary expectations.
One of the things that makes collapse interesting this time around is that the dominant country, the United States, doesn’t really have any experience with collapse and can’t imagine the possibility. Americans aren’t bad people per say, not anymore than any other people on this planet, but they are teenagers at heart. Americans are optimists and futurists. To them, the future is the frontier: endless space, infinite resources, endless expansion of population, of speed, size, and power.
It’s possible Americans might do the wrong thing, and drag the entire world down with them rather than accept a gentle decline.
Good post, dolph. There is a sense of expectation in the US. A very angry sense from people when things are not going as expected. Like right now, and as we can see Trump is promising a return to a great America and Bernie will give away college tuition if elected. The voters hold out until the gifts are equal to their wants, completely unaware of our impending slide down the right side of the Seneca cliff. They do not understand that most of history was filled with time periods of minimal net energy.
You are wondering if they will bring down the rest of the world with them when shtf? Look no further than 9/11. My impression was there was not enough satisfaction from carpet bombing Afghanistan to equal their distaste of that event, so Iraq was cooked up to fill the angry void. ‘Support the troops’ was a manipulation to distract from the real intent of vengeance. I imagine some country or region will get blamed for our impending economic malaise and then look out as the vaunted US military acts on their behalf to even the score.
To be fair, while it is customary in some circles to castigate Americans for being members of an immature culture and the disturbers of the world, it is difficult when reviewing the history of the 20th c to see that Europeans, Asians, Turks, Arabs, Persians, etc, have in any way demonstrated the superiority of their ‘ancient’ cultures. Delusion and greed are everywhere universal.
The anger, the ignorance of history and substitution by a flattering myth, the false promise of a return to past greatness and wealth is at the heart of all the nationalisms – we can see it now in Turkey and China as much as Europe: Scottish nationalism is a classic example to study, if rather pathetic.
xabier, good points all. It is also popular to blame America for a metastasized materialistic capitalism that is ruining the Earth, and yet the rest of the world didn’t have to follow us over the cliff…but they did.
I didn’t paste in the link because the automatic earth posts so much stuff, so just pasted the following:
“This will most likely go down as the year of the Great Energy Debt Crisis, a spiral that exacerbated an economic funk that roiled the world. Companies are starting to go bankrupt. Banks are preparing for losses tied to oil and gas loans. And bond markets have all but closed to energy companies, especially the lowest-ranked ones. Borrowing costs for U.S. junk-rated energy companies have soared to records, with yields on their bonds surging past 20% for the first time, exceeding the past peak of about 17% in 2008, Bank of America Merrill Lynch index data show. Moody’s expects the U.S. default rate to reach the highest in six years in 2016, and a growing pool of investment-grade energy debt will most likely be downgraded to junk in the near future.”
I read this article after it had been republished on Zero Hedge:
http://www.zerohedge.com/news/2016-02-10/physics-energy-economy
The Physics Of Energy & The Economy
I posted my long comments upon that article there, under the username Radical Marijuana.
Weighing in at 6994 words, more of a manifesto than three comments, really.
If it all is a system of fraud backed by violence, how can you know if your alternate view is real? I mean, if I were in charge, I’d certainly have layers to the lies. In which case, can you ever certainly know the truth?
What if the violence and lies are an inherent trait in some or all humans? It seems likely to me that any new system you create would quickly be corrupted and controlled by groups with the genetics / culture of violence and fraud.
Finally, if (barring a miraculous and timely new energy source) we are going to have a sudden massive decline in energy density available to us, what does the social, financial and political systems matter? They will most likely be completely shredded by the sudden change in our physical system. All the violence and fraud and hypocrisy in the world cannot alter what happens if we rapidly lose >90% of our available energy. Unless you are saying that the physical limits we perceive are themselves lies?
The beast’s hair is falling out
The Shipping Industry Is Suffering From China’s Trade Slowdown
So many boats, so little cargo as Chinese exports and imports drop.
http://www.bloomberg.com/news/articles/2016-02-11/shipping-industry-suffering-from-china-s-trade-slowdown
Dear Finite Worlders
I would like to build a little on localunatics post of this article from 1994:
http://www.sciencedirect.com/science/article/pii/0895717794901880
I’d also like to refresh your memory about a book I haven’t discussed in more than a year. Mobus and Kalton’s Principles of Systems Science. Mobus and Kalton take a broader view than thermodynamics, including hot topics such as information flows. We are, after all, more than two decades on from the 1994 article.
Much of the article discusses ecosystem productivity. I’ll note that, in 1994, the microbes were poorly understood. If you read the article, you might be forgiven for thinking that a tropical rainforest consists of trees. But the title to Bikle and Montgomery’s book gives us a clue about current science:
The Hidden Half of Nature.
Microbes are half the biomass weight on the planet, so trees can’t be the whole story.
The article shows that mature ecosystems are efficient harvesters of solar energy. We know that because they significantly reduce the temperature. The Sahara desert reflects much of the solar energy that strikes it, but the rainforest absorbs the energy and emits water vapor, an energy hog process. Since the energy is absorbed and dissipated, the temperature in and above a forest is cooler than the air in a desert or on a freeway.
Elaine Ingham says that ‘if you get an increase in crop yields when you add fertilizer, you have done something wrong’. Let’s see if we can parse that. There are three competing theories of using solar energy. The first is the mature ecosystem, which is the champion in terms of producing biomass and cooling the air. The second is the industrial system which consists of applying poisons to kill much of the ecosystem and then supplying synthetic materials made with and from fossil fuels to enable the plant of choice to grow, and using the sun to provide photosynthesis and to pump water. Leaving aside the energy spent mobilizing the fossil fuels, even if we simply look at biomass and temperature, the industrial system will not produce the biomass and temperature reduction of the mature ecosystem. The third system is various forms of biological farming: from Milpa to Permaculture and Natural Farming. The third system generally cooperates with Nature to grow a lot of biomass, but selects or plants the biomass which is particularly favorable to humans. An untouched rainforest will have a lot of biomass, but much of it won’t be of any direct use to humans. In a Milpa system, such as is described in the Maya Food Forest book, the main things the humans do is select which plants will grow to maturity. Thus, we see the Maya farmer with his trusty machete. The Maya farmer also plants corn, beans, and squash in a field freshly and expertly burned, before allowing the field to revert back to the forest. So we might generalize that Nature is doing 90 percent of the work in a Milpa, while the farmer is doing 10 percent. Permaculture tries to use succession to migrate to, ideally, perennial plants laid out in clever patterns so that production is maximized. Permaculture doesn’t have the mature social patterning that Milpa has, but we might guess that in Permaculture, Nature is doing 50 to 75 percent of the work, while the human does the rest. I won’t cover all the myriad themes and variations…you get the idea.
If the biological farming methods are so good, why did anyone ever do anything else? And the answer is partly ignorance: even in 1994 the scientists really did not understand everything that was going on, particularly in The Hidden Half. Justus von Liebig thought he had proven beyond doubt that humus had nothing to do with soil fertility…it was all about chemicals. His message resonated with governments, because manufacturing nitrates kept a military explosives industry healthy. Liebig only realized very late in his life his tragic mistake. But industrial agriculture was off and running, with the usual suspects leading the way.
Another factor was that fossil fuels coupled with engineering can greatly increase human ability to produce non-biological stuff. And the world had an enormous appetite for all that stuff. If humans were going to be involved in making the stuff, we had to get most of the people doing agriculture into the factories. And along with the factories came ‘inside work’… (after a horrible beginning) not too hot, not too cold, little muscle exertion unless you paid for it in the gym, clean clothing, etc. Impressing a girl came to have more to do with being clean and shaven and neatly dressed than producing a great crop of pumpkins.
Ignorance included the tradition of plowing. Plowing destroys the fungi, which are the key to the productivity of the mature forest. And plowing produced soil compaction, which prevents plants from developing healthy root systems and encourages disease, drought intolerance, insect infestations, and low nutrient content which flows through to human disease.
At the present time, the meme is that ‘half the nitrogen in human bodies was made synthetically’…as if it has to be that way. It does not have to be that way. But the choice before us illustrates a real fork in the road. It is not easy to undo the soil compaction which plagues the most desirable arable land. We would have to have a lot more farmers. We would have to relearn forgotten skills.
And that’s all about production on the farm. If distribution is threatened by Peak Oil or general Societal Collapse, then people need to move back to the land. I have remarked about the potential for social isolation and the dire effects that has on humans. And you can forget about most processed foods from grocery stores. I can’t envision a politician running on such a platform.
On the positive side, perhaps girls will inspect the quality of a boy’s garden before falling into lust with him.
Don Stewart
It’s like this Don: without food you die,
Dear Don
As to personal attractiveness in a rural milieu, it’s on record that the merry maids of Saxon England ditched the scruffy local lads in favour of the Viking settlers, who it seems took a bath every week, and combed their hair nicely. Which of course implies the leisure and wealth to indulge in such niceities. (Geneticists tell us the Vikings had limited impact – on such evidence I beg to differ as they probably didn’t stop at holding hands….)
On soil compaction, while ploughing with ox and horse teams for centuries did cause that, the modern tractor took it to another level of soil destruction, and very quickly.
What is perhaps not fully appreciated is that those who tried to go back to using horses in the prime cereal region of East Anglia in the 1960’s and 70s found that after only a decade or two of machine farming, the soil was already so compacted that horses were not strong enough to pull the ploughs through the soil, it was a non-starter.
For those interested in the old ways of farming in Britain, I recommend G E Evans, ‘Horse Power and Horse Magic’, and indeed all of his books about the people who got their hands dirty and little reward for it except knowing their own skill.
PS Those were very heavy clay soils to start with.
Actually, these are light loamy soils. The Iowa of England.
Credit Suisse is doing a swan dive into the dumpster truck of history! Stock is at 27 year lows!
https://2.bp.blogspot.com/-57rvXYxLVLY/Vrz3BpopyJI/AAAAAAAAuss/r_8ln9bPh-o/s640/CS.png
Was someone saying the banks don’t matter? I seem to recall that….
The banks are the glue that hold BAU together…. and they are coming unstuck
There’ll be bail-ins fo’ sho’. Everyone with money in the bank above say 100k should prepare to be thrown under the bus to protect bankster bonuses! Lol…
Are people starting to panic?!
http://www.zerohedge.com/news/2016-02-11/lines-around-block-buy-gold-london-banks-placing-unusually-large-orders-physical
This is the best quarterly performance for Gold in 30 years…
“It’s been crazy – it’s been the best week since 2012. We’ve had people queuing round the block,” said Michael Cooper of ATS Bullion in the UK.
“The bullion market has been building with interest since the end of last year but this morning things have gone bananas,” said Mr Halliday-Stein. “Some London banks are placing unusually large orders for physical gold.”
The timing of this is interesting. I was just talking with a contractor from LA and he said things have been going crazy down there with construction with wealthy people remodeling and building new. He said it concerned him because it was exactly what was happening just before the 08/09 mortgage meltdown. Is the last of the QE stimulus via the top .01% playing out? Is this the transition phase to recession? I’m thinking of getting some physical silver. This may be the beginning of a big run up in precious metal prices. Just a hunch.
Stilgar,
When you make the decision, let me recommend APMEX if you should decide on physical metal. Good people to work with. I got in too early, but I’m glad I did.
Don B
Thanks for the tip, Don B. I just made a note of it in my address book. I’m old school when it comes to information. Computers can get a virus and lose info., but an address book – well it’s physical, just like the silver we may get.
I also use APMEX, and they are great to work with. Reliable, fast, easy to use.
https://www.google.com/?gws_rd=ssl#q=dow
Dow dumped -254 pts. today to 15,660.
The reason for posting this is the Dow had fluctuated plus or minus 16,000 for a couple of weeks. It looked like it had stabilized, but between yesterday and today it’s made a move down. Will be interesting to see what happens tomorrow, Friday, which is usually the most optimistic trading day of the week. If it goes down tomorrow, it could go sub-14,000 next week. Without QE4 and reduced corporate buy-backs this puppy has no legs.
“The GDP report will show Japan’s economy is in a very dire situation,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. “There is no driving force for the economy and that’s unlikely to stop this quarter.” Shinke, who ranked as the top Japan forecaster for the latest Bloomberg GDP survey, predicts a big contraction of 3 percent in the fourth quarter.
http://www.bloomberg.com/news/articles/2016-02-11/japan-s-economic-roller-coaster-is-headed-for-another-dip
QE eventually fails…..’no driving force’
For the hyperinflationistas out there….. if that is going to be the outcome … with Japan as the test case….
It better happen very soon … because the Japanese economy is soon not going to exist….
DiEM25 is a new party in Europe calling for democracy in Europe. I like it.
http://diem25.org/
I figured you may appreciate this simple self-organizing system…
1) Take a 24″ piece of kite string, twine or thin rope.
2) Hold the ends apart and twist one end of the string N times.
You’ve created an energy gradient.
3) Now let the system consume the gradient by bringing the ends of the string together, slowly, until they’re touching.
You should see some self-organization.
4) Now pull the ends of the string apart again, slowly, until the limits are reached.
5) Finally add or subtract a few twists and go back to step 3.
Try 5 twists.
Try 15.
Try adding/removing a twist while the system is constructing its self.
Gail, doesn’t improving technology help to offset net declining EROEI? For example, the Internet has nearly killed off the postal service, and is doing permanent damage to the pulp/paper and ink businesses. This is a positive net energy gain, no? (Ie no longer need to make energy intensive trips just to deliver a letter).
Also, coal companies are failing because of initiatives such as COP21 and China’s move to gas-fired, rather than coal- fired, power following the “airpocalypses” of recent years. The oil price is a contributing factor, but not the entire factor, I believe …
Lastly, there is a good bit of gas out there, and yes, it can’t fully substitute for oil, but it is relatively price competitive at these levels due to its abundance (see comments on LNG/CNG usage in this thread). Can increased usage of and transition toward gas while we use up the cheap conventional oil stave off the collapse for at least a while longer?
Thanks, Gail!
http://www.internetlivestats.com/ In the lower part of this site there’s a live meter how much electricity is consumed by the internet. Not to mention whole semiconductor industry that is needed the make the internet happen. New technologies can increase our efficiency, but they also increase the complexity of the system, which requires more energy just to sustain.
While the internet structure use a lot of energy, it saves it too. There has been a decrease in miles driven in the US. Teenagers no longer drive to the mall to hang out with their friends, they hang out on various social apps. Many people now shop online rather than driving to the store.
I have no idea how the increased energy use on the net compared with the decreased energy use driving. Does anyone have any idea?
“Many people now shop online rather than driving to the store.”
And then their purchases are flown in on a jet plane and delivered to their doorstep by a five-tonne cube van.
🙂
Yeah, but that cube van is delivering to hundreds of people that otherwise would be out driving two-ton ice’s. So it is more efficient, however the drawback is waste in this case was good for fuel consumption which means more oil consumption (higher oil price) and it ‘was’, as in past tense, good for retailers. Now retailers are struggling to make a decent profit. It’s a situation in which we have to be careful what we wish for – more efficiency means less consumption, better conservation, less pollution but the downside is retail profits are more concentrated with fewer corporations as well as fewer people and lower oil consumption which keeps oil prices lower. It’s a conundrum.
Clearly one is electricity, the other is oil. Neither of them is trending upward by much. Oil consumption was trending upward through August, but has been decreasing starting in September. Electricity is down. This is partly related to the low demand problem. Also, gradual shift away from CRTs to flatscreen monitors and TVs, more recently to smaller devices all together. Also changes in light bulbs.
Gas is mostly a local energy option …. it is difficult and expensive to transport it to where it is needed….
This SHTF sideshow is picking up speed !
“Oil Is the Cheap Date From Hell”
http://www.bloomberg.com/news/articles/2016-02-11/oil-is-the-cheap-date-from-hell
“Opinion: Falling oil prices will bankrupt the likes of Russia, Saudi Arabia”
http://www.marketwatch.com/story/falling-oil-prices-will-bankrupt-the-likes-of-russia-saudi-arabia-2016-02-10?link=MW_popular
“No Respite for S&P 500 as U.S. Stock Futures Join Global Selloff”
http://www.bloomberg.com/news/articles/2016-02-11/no-respite-for-s-p-500-as-u-s-stock-futures-join-global-selloff
I must be missing something, but I keep reading that Saudi Arabia is burning through its currency reserves and will soon be bankrupt – and that, it seems, is the end of Saudi Arabia. Most countries would love to have any sort of currency reserves, but they are deep in debt. Why is the situation different with Saudi Arabia? Are they not allowed to go into debt?
From what I have read is that Saudi Arabia doles out the entitlements like candy to it’s people to keep them from revolting. The more they go into debt the more it puts a dent on entitlements. With oil prices so low, they have used high oil prices to fund their government entitlements.
Trevor, yes of course the KSA can pre-sell its oil. That is use its oil as collateral for loans. We the oil buyer would love to pre-buy 100 billion barrels at $30/bl. I could see the US, EU and China each buying a trillion dollars worth.
Saudi Arabia has had lots of oil to sell. It needs to import practically everything. While oil exports were high and oil prices were high, Saudi Arabia ended up with excess funds it could store away, for a rainy day. So did some other exporters, including Russia and Norway. Now that prices are low, Saudi Arabia really needs revenue for its government programs. It has started drawing down reserves, and recently has begun borrowing money as well.
The sheeple definitely can see that something is up….. you’d need rose coloured glasses the thickness of bullet proof glass not to see that the ship is foundering badly…
This is very unlike 2008 when nobody had the slightest clue that a massive crash was coming….
I’ll be off shortly to do some last minute end of the world shopping — I really hate queues.. riots … and looting … when I am trying to get the shopping done….
Money is about to become worthless…. so might as well put it to use….
Geez, how many times have we been through this hysterical drill on this site? “The sky is falling!” Nope. Slow collapse. Incremental down shifts. Gradual descent. Impoverishment but not the Hollywood ending that you are hoping for.
How many times do we have to have people use the word collapse and slow in the same sentence while ignoring that by definition collapse is a fast phenomenon.
How about coming up with another word to describe your vision of what is going to happen. The fact that you use the word collapse at all means at some point we fall off a cliff.
And how many times do we have to read about this gradual decline without even the slightest bit of rational supporting this – no facts – no logic – just Koombaya over and over and over.
“And how many times do we have to read about this gradual decline without even the slightest bit of rational supporting this – no facts – no logic – just Koombaya over and over and over.”
I think the analogy of the hurricane is a good visual; whether it is accurate or not, I guess we’ll see.
So humanity starts off as a little tropical depression off the coast of Africa, with the discovery of fire. Slowly moving along, we hit some warmer water – agriculture and pastoral herding, and increase to a tropical storm. A long time passes, and we hit the Caribbean – peat and coal, and become a hurricane. A short while later we hit the much warmer waters near the Gulf of Mexico, and become a monster hurricane. Now, we either make landfall or roll out into the Mid Atlantic, where the water is cooler.
The two big differences with humans are debt and violence. The debt system makes it so we may collapse, rather than slowly losing power like the hurricane when it rolls into lower energy waters. On the other hand, we have systems of violence to try to force the system to continue by any means necessary.
Maybe some of these sites will figure out the problem.
Tim Morgan, is on your side Gail;
https://surplusenergyeconomics.wordpress.com/2016/02/12/68-the-ponzi-economy-part-4/
He is only “sort of” on my side. He really believes the common fallacy that I referred to at the beginning of the article–the belief that all we have to do is adapt to a lower energy supply. He ends his article with,
I don’t think we can. if we rebuild, it will be at a much lower level. If we still behave as humans, I don’t expect it to be sustainable.
Or he’s just following the formula of throwing out a puff of hopium at the end so as to keep his readers coming back….
How does ‘negative interest’ figure into the scheme of economies and energy?
[from Bloomberg news today]
Sweden’s central bank lowered its key interest rate even further below zero and said it’s prepared to use its full toolbox of measures as it battles to revive inflation and keep the krona from appreciating.
The repo rate was reduced to minus 0.50 percent from minus 0.35 percent, the Stockholm-based bank said.
Compound principal+interest requires compound economic growth ie surplus. If the debt cannot be serviced, the debtors’ collateral is seized; if the value of the assets used as collateral are insufficient to cover the short-fall, the lending institution (creditor) becomes insolvent.
This is standard econ 101 – the hitch comes when countries tied to the reserve currency use that system in which to fund their respective national projects. In this case, Sweden rides the tiger to enjoy a social welfare state, whereas the USA uses the proceeds to finance its military & global dominance.
In the current instance, when countries are so inextricably tied to the global central banking model, rather than allow them to collapse into insolvency, an alternative is used: debase the currency so that the nominal value of the debt overhang is reduced. First lower interest rates, then a zero interest rate policy (ZIRP) was implemented towards this effort.
But as we can all see, the end of economically available fossil fuels necessary to drive the standard industrial economy, that has been in effect for 300+- years, is severely impacting traditional growth & the resulting surplus necessary to service the debt.
So, global leaders have two choices:
– allow the collapse to occur in a (hyper) deflationary vacuum, thereby destroying their own personal wealth, power & prestige; or
– further debase the underlying currency through negative interest rate policy (NIRP), in conjunction with targeted devaluation, thereby maintaining their own personal wealth, power & prestige.
There are two prevailing schools of thought on this outcome @ OFW:
– fast collapse, where the international financial & trade system gets quickly out of control, thereby overrunning the best efforts of the PTB to maintain rule & order;
– slow collapse, where the PTB utilize standard tried & true techniques (proven effective over thousands of years) to keep the sheep from rioting.
Yes, we’re talking good old bread & circuses. GMO foodstuffs are sufficient to keep people well fed to the point of debilitating obesity, while astute observers don’t have to look very far to see the vast multitudes of brain-dead iDevice users following the most recent celebrity antics. Add an all pervasive, full-spectrum security state apparatus, and one can see how the long collapse is going to eventually morph into neo-feudalism.
Those in the slow collapse camp – such as myself – therefore are completely long in all asset classes, especially real estate. The key is to possess real assets that will (dramatically) appreciate as cash and fixed debt are sequentially reduced in value by up to 90%.
Real property is also key from a personal security standpoint, as we can expect some social disruption from subsequent wage/price controls, rationing ans speech/assembly & travel restrictions that will become necessary in order to maintain order. Existing war powers, sedition & national security measures already in effect (some dating from WWI) will be utilized to both neutralize and frighten populations into acquiescence as the full realization of what is discussed here becomes common knowledge.
Long real estate…
Farmland?
Penthouse 5th Avenue?
Beach front property?
B9, I believe that your vision is closest to what will really happen once the slow collapse really gets underway. The PTB will do anything to manage the decline in order to maximize their own advantage. We are already seeing it.
I can see that this makes you guys feel better. So go with it.
Everything is collapsing. Use of negative interest rates helps make everyone poorer, in recognition that we really are poorer.
Soon banks will be keeping more and more of what we thought we put in them. It is just the beginning of a pattern.
There are ways around this, albeit in small numbers.
https://www.youtube.com/watch?v=n6CTppZKgsE
RE
Fast Eddy,
You mentioned David Korowitz in an earlier post. I’ve just finished reading some of his work and agree that collapse could take place in a matter of hours to a few days – all very sobering. There doesn’t seem to be any way to avoid catastrophe that I can see.
For OFW readers who might want to read up on this:
http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/
Don B
We did a podcast with DK back in 2013. One of my favorites.
https://soundcloud.com/doomstead-diner/david-korowicz-part-1-lock-in
https://soundcloud.com/doomstead-diner/david-korowicz-part-2
https://soundcloud.com/doomstead-diner/david-korowicz-part-3
RE
Gail, how do you see the “standard graph” from 1972 book” Limits to Growth” differing from what is drawn there in light of your latest thought s here? It’s still a collapse scenario and I assume yours is as well.
I think the standard graph is fine. It is based on measured relationships. The problem comes when the Meadows group hypothesizes that the economy can really run with far less use of energy than it has used in the past. This was written back in the day when it was believed that nuclear energy would be “too cheap to meter” and would be available in huge quantity without much use of fossil fuels. This may have played a role in their thinking.
Gail–then you mean “with far less use of *fossil fuel* energy than is has used in the past.” We continue to use more energy over time, like the collapse-prone dissipative structure you are presenting here as model for the global economy.
Great post, BTW. Really scary to read the headlines in light of your OFW posts!
Gail, I do not think Meadows believed each model I think they were done 1) as sensitivity analysis and 2) as teaching examples, as in, see even if we make impossibly optimistic assumptions we still crash the system.
I have talked to Dennis Meadows enough to know that he and Donella were deeply invested in the “Stabilized World Model.” The were shocked when the whole world did not say, “We have the potential of a terrible calamity coming, and these folks have found a solution. We will drop everything to adopt the solution.”
This was Dennis Meadows first assignment after finishing his PhD. He received his BA in 1964. The book was published in 1972. I believe he and Donella lived in a commune at the time, and had spent the year before they started the project bicycling around, staying in hostels. They were very idealistic.
“The were shocked when the whole world did not say, “We have the potential of a terrible calamity coming, and these folks have found a solution. We will drop everything to adopt the solution.” ”
I think that feeling of confusion is something everyone here has experienced.
Once I had written the “plan” to reform the welfare state and everything ended in global collapse because of the impossibility of infinite growth (how to pay for the welfare state in the long-long run) on a finite planet. I tried to communicate this wee bit of a problem. It is somewhat confusing when trying to communicate these things, we´re just talking about the potential survival of, well, everything, and the reaction is like we are trying to steal a candy from a baby. Shocking, confusing, disappointment in fellow human beings, I guess those are common feelings we all here have experienced.
When a person looks at the output of a model, the result seems so obvious–why wouldn’t everyone see a problem?
In the sustainability model, population would be kept level by allowing only as many births in the world each year as estimated deaths in that year. How easy would this be to implement? This model also planned for huge step ups in efficiency of industry. Furthermore, goods would be made to last much longer as well. The model is always of physical substances only. It was beyond those doing the modeling to consider the need for debt, and the ability to repay debt with interest.
Gail, excellent blog and analysis and thank you very much for posting it. You are one of the few prescient ones who correctly predicted the current oil price drop well in advance (back in 2012-2013, I believe).
Just one question- you mention that a primary cause of stagflation/ crisis periods is that energy costs become too expensive. Specifically, you point to the rising production cost of crude as an example (i.e. high break-evens for unconventionals, tar sands, heavy oil, etc.).
However, do we take into account the fact that outside of crude, there is still plenty of cheap energy available in this world, which could last centuries? Natural gas? Coal? Societies (such as China) are increasingly switching over to natural gas; as you probably know, in Sichuan, all of the taxis run on CNG. There is also still plenty of cheap coal in this world which is just waiting to be used,
Therefore, if we accelerate the shift to these cheaper sources of energy, can we stave off for collapse for awhile longer? I agree with you that our debt situation is out of control and needs to be reset, but do the cheap energy sources outside of crude give us more breathing room to last us a while longer?
Thanks Gail.
‘breathing room’
http://s1.ibtimes.com/sites/www.ibtimes.com/files/styles/v2_article_large/public/2015/12/06/beijing-smog-alert.jpg
A partial list of products made from Petroleum (144 of 6000 items)
One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like: http://www.ranken-energy.com/products%20from%20petroleum.htm
Most oil is not burned….
It is not really true that most oil is not burned.
First, you have to decide what you are starting with as a base. Are you starting with “crude oil”? This has a quite a bit narrower definition than “petroleum products.” According to the EIA, http://www.eia.gov/energyexplained/index.cfm?page=oil_home
So petroleum products include all kinds of things, including propane, butane, and ethanol.
The same EIA webpage shows how a barrel of crude oil breaks out. This figure shows that 19 out of 42 gallons of crude oil end up as gasoline.
It doesn’t show how much isn’t burned The number I recall is about 10% (probably of petroleum products) is not burned.
Asphalt and lubricating oils are made from very long hydrocarbon chains–the heaviest part of crude oil. I know that ethane (a short hydrocarbon, not in crude oil) is used to make plastics.
Thanks for writing. The problem is that the rising investments required cause the system to fail. In a sense, an EROEI drop from 100:1 to 99:1 is just as damaging as an EROEI drop from 10:1 to 9:1. There is also the problem that all of the economy is a networked system, so rising investments in oil adversely affects the overall system, not just oil. Of course, I am thinking of the rising investments in terms of human labor as fossil fuels. What is happening is the system as a whole is becoming increasingly inefficient.
I was surprised when I found that coal companies were failing as fast, or faster, than oil companies unless the coal companies are operating in a “utility” type structure that allows prices to rise with rising costs. What I found when I looked at some coal company financial statements is that they were being affected by the overall drop in commodity prices (just like metals and many kinds of food are being affected). Back when revenue streams had been higher, the various players had locked in an approach to dividing up revenue flows. Fees for using the land for mining were based on the price structure available in the past; debt payments for new mining equipment and for upgrades to port export facilities were based on cash flow projections when prices were higher; taxes (which are not based on profits!) were set based on how much the government thought it could take, and still leave the company with enough for its other expenses and dividends. Since 100% of the former energy flows had been contractually locked in, a drop in price fell entirely back to the owners!
Regarding the changeover to natural gas, I doubt that there is enough of it for a complete changeover. In the meantime, the whole system will collapse from low prices. It is certainly not possible to add natural gas, if the price level needs to be kept close to coal. If the price of natural gas is higher, wages of workers will also need to be higher. Products will become increasingly uncompetitive in world markets.
I remember riding in nat gas powered taxis in Spain and knew that it was popular in South America, so I thought I’d take another look…
“Natural Gas Vehicles
Natural gas powers about 150,000 vehicles in the United States and roughly 15.2 million vehicles worldwide. Natural gas vehicles (NGVs), which can run on compressed natural gas (CNG), are good choices for high-mileage, centrally fueled fleets that operate within a limited area. For vehicles needing to travel long distances, liquefied natural gas (LNG) is a good choice. The advantages of natural gas as a transportation fuel include its domestic availability, widespread distribution infrastructure, low cost, and inherently clean-burning qualities.
CNG and LNG are considered alternative fuels under the Energy Policy Act of 1992. The horsepower, acceleration, and cruise speed of NGVs are comparable with those of equivalent conventional vehicles. Also, compared with conventional diesel and gasoline vehicles, NGVs can produce some emissions benefits.
There are many heavy-duty natural gas vehicles—as well as a growing number of light-duty NGVs—available from original equipment manufacturers. Qualified system retrofitters can also economically, safely, and reliably convert many vehicles for natural gas operation.”
http://www.afdc.energy.gov/vehicles/natural_gas.html
So why don’t we have more CNG powered vehicles?
Limited options: Only one all-natural-gas-vehicle model, the Honda Civic Natural Gas, is available in the U.S. although Ford, General Motors and Ram have recently announced new 2013 pickup truck models that are bi-fuel. That is, they run on gasoline and natural gas.
More expensive: The NGV Honda is about $5,000 more than its gasoline-powered cousin.
Limited driving range: The NGV Honda can only go 220 miles without refueling. That’s 130 miles less than a gasoline-powered Civic.
Limited fueling stations: There are about 1,000 natural gas fueling stations across the U.S., but only 536 are available for public use, according to the U.S. Department of Energy’s Alternative Fuel Data Center website — and the majority are clustered around major metropolitan hubs.
Home refueling is expensive: A refueling device costs from $2,000 to $5,000, plus installation. And, it takes overnight to refuel.
Natural gas is a nonrenewable fossil fuel: The U.S. Energy Information Administration projects that there’s enough natural gas to last us about 90 years. But it is not an inexhaustible supply, although NGVAmerica’s Kolodziej says the industry has the technology to make biomethane — chemically identical to natural gas — from renewable sources such as agricultural waste.
http://www.bankrate.com/finance/auto/natural-gas-vehicles.aspx
We’re certainly burning more of the stuff to make electricity…
“Natural gas use for power generation higher this winter
So far this winter, natural gas consumption in the electric power sector (gas burn) has been higher than in any previous winter. According to Bentek Energy, gas burn in the electric power sector has averaged 25.0 billion cubic feet per day (Bcf/d) so far this winter (November 1 through February 8), up 17% from last year’s average of 21.4 Bcf/d during the same period and significantly higher than the 18.8 Bcf/d average of the past five years. Low natural gas prices have been the primary driver of increasing natural gas use for power generation, although reductions in coal capacity and the availability of efficient gas-fired generating units have also played a role.”
https://www.eia.gov/todayinenergy/detail.cfm?id=24892
Rick understanding we can’t just switch from one finite energy source and expect the alternative to last as long as predicted. Switching from oil to gas would limit the gas resource dramatically. The same applies if liquefying and/or gasifying coal was adopted in earnest. Gail has also explained the interconnectedness of the energy systems, trying to isolate one or the other has very limited if any advantages.
A switch from oil to gas would also collapse the oil industry…. it would put further downwards pressure on oil
And burning nat gas still generates emissions that contribute to AGW just not as quickly. As T. Boone Pickens has said, it can only be a bridge fuel to whatever must come next.
I didn’t say any of that. And I certainly wasn’t implying it.
I also understand the interconnectedness of the energy systems and the way new technologies piggyback of the more traditional systems.
I was just curious to see where things are at with gas powered vehicles and found it interesting so I shared it.
In no way do I believe nat gas will power the world.
Happy?
I believe the company that was selling the home refueling stations went bankrupt.
Natural gas has a very low price too, relative to production costs. Companies are going bankrupt–Chesapeake Energy is primarily natural gas, for example. US natural gas production is headed slightly downward since July 2015. http://www.eia.gov/dnav/ng/hist/n9050us2m.htm
I am not sure that natural gas puts you any farther ahead than any other fuel. They all have fairly similar problems.
New York State is pinning its whole energy future on natural gas. I agree it has the same problems every other FF has. I recall Gail was at a conference where natural gas companies were selling electric generators on the virtue of natural gas. Gail ask since you are not making money what will you do? The reply by natural gas company guy we are planning to raise prices. New York will need thousands of miles of new natural gas pipeline to fulfill the dream of using only natural gas. Every community is fighting tooth and nail to stop new pipelines. They all believe in PV and wind. Oh what a tangled web we weave when first we practice to deceive.
Meanwhile all the natural gas companies are going bankrupt. If the electricity prices were high enough to support the high natural gas prices needed, plus all the pipelines, it would be a lot less attractive fuel.
The beast is roaring in agony as this salt coated dagger slashes into its back — nearly severing the spinal cord…
http://www.zerohedge.com/news/2016-02-10/growth-myth-over-amazon-authorizes-5-billion-stock-buyback
This well and truly signals the end of growth — Amazon is now forced to do what other companies are doing to support their share price — when growth ends — buy back shares….
It was only good while the Chinese could still ship over cheap plastic doodads…
Bizarre! But should help reported growth in earning per share!
In case you are wondering why Gail’s description of the physics is so fuzzy, it is not her fault. The physics, non-equilibrium thermodynamics, itself is fuzzy.
Bolding mine
https://en.wikipedia.org/wiki/Non-equilibrium_thermodynamics
Good points!
I am also still intrigued by the fact that some dissipative structures, like animals that have reached adulthood or stars in their main sequence phase, more or less plateau in size and energy consumption for meaningful periods of time. Obviously the global economy and the hurricane example you give are ‘greedier’ entities whose nature is to hoover up ever more energy. I wonder why the difference? Or perhaps that is a meaningless question.
Terrific article btw. I find a thermodynamic interpretation of our human endeavours oddly comforting. From this perspective, we are just unwitting pawns of the laws of physics and the universe’s apparently ceaseless appetite for novelty.
Harry
I agree, it is oddly comforting. There is no bucking Reality after all, and so one can only be reconciled to it.
As the Sumerian Gods said to the hero-king Gilgamesh when he tried to rescue his friend Enkidu from the regions of the Dead:
‘Good try, and well done, but mortality is universal, there is no coming back however much you want it’
Some natural systems do appear to come close to a steady state existence before entropy takes its toll. The oldest tree has lived for four thousand years in a relatively steady state. After its birth, the Sun continued to exist in a relatively steady state for billions of years. Even if local changes happen over time, the overall state of the organism remains fairly constant.
Could the human race emulate the reasonably steady state existence of a forest? It’s inconceivable because as individual components of the superorganism we would find it very difficult to mimic the efficient lifestyle of the trees in the forest. Only as a limited number of hunter gatherers would this be possible or as an advanced culture that radically mimics the contstraints of these hyper-efficient systems. Neither of which present very desirable options to existing humans.
I too believe “we are just unwitting pawns of the laws of physics.” So while it’s possible for certain physical systems to maintain an apparent steady state existence over long periods of time by restricting input/ouput flows, it’s not the case with humans. We have this untamable thing called desire.
Rick Grimes
You may be too pessimistic. I was showing a 30ish young woman around my garden yesterday. She put her hands into the soil, picked some up, put it to her nose and said ‘I smell life’.
If you read the adventures of Marjorie this week, you saw the Tarahumara farmer proudly showing off his goat manure (goat shit to the oversensitive).
Prince Charles regularly examines manure.
Now the Homeowners Association idiots I have to deal with think that manure is something that nice people don’t talk about, certainly never think about, and some immigrants take it ‘away’ with the trash.
My point is that humans CAN learn to appreciate closed loop systems (excluding the non-humans who serve as HOA officers). As described in good detail in 150 Strong, both capitalism and communism spring from a totally different mindset, and that mindset has become entrenched in our culture. But our culture is dying before our eyes. The culture which follows will more closely resemble the young woman examining my soil and the Tarahumara farmer and Prince Charles in his farmerly role. These systems are, in principle, just as thermodynamically stable as a 4000 year old tree.
Don Stewart
What an old romantic you are, Don!
In principle… anything is possible. It’s possible for Prince Charles to run vast organic produce operations while living parasitically off of the hard labor and taxes provided by millions of serfs. Serfs that are responsible for keeping BAU running smoothly.
It’s also possible that Prince Charles sees it as his duty to impose bathing and heating and travel limits on the masses while he lives a life of grandeur – all in the name of saving the planet, of course.
It’s possible that groups of 150 people can survive utilising the farming methods you outline here. It’s all very interesting… in theory.
But I have to ask how many of the millions of people currently dependent on industrial agriculture are aware of these things and would be prepared to embark on a journey of rediscovery beyond smelling a bit of goat shit stained earth and acknowledging that it does indeed have a certain memorable odour?
Most Populous Cities of the World
Rank City* Population 2014
1 Tokyo, Japan 37,833,000
2 Delhi, India 24,953,000
3 Shanghai, China 22,991,000
4 Mexico City, Mexico 20,843,000
And on it goes. As you can see, your merry little band of 150ers has their work cut out to spread the word before BAU goes belly up. To be honest, if any of this collapse business turns out to be true and BAU does go belly up as many here predict, then I would say that the most rational response is a pesimistic one. Anything else falls into the category of wishful thinking. You can join the queue of millions waiting for the return of a magical saviour or you can align your fate with the evidence.
I do wish our species the best of luck on the way down the other side of the rollercoaster – we’re going to need it. It’s not our fault that we turned out to be a rabidly successful species – just the end result of a series of selective processes played out while conditions allowed.
For these reasons, I don’t harbor hatred towards our species. As a collective, we acted in our best interests even at the expense of our surroundings and our own ability to continue along that path. Cooperation formed a part of this equation. But so did brutish violence against other members of our species – especially other tribes that competed for the available resources.
Our reptilian brains are responsible for much of the behaviour that is now deemed undesirable by modern “tribes.” Colorful and exuberant ritualistic displays to attract a mate or fend off a rival, as well as territorialism are alive and well – especially in our monarchies. And for good reason.
Imagine that a complete stranger wielding an AK47 is sitting in your kitchen when you return home from a hard day at work. What would you do?
What if a group of young men turns up at your village of 150 horticulturalists? It’s the middle of the night and they’re carrying weapons. How will you feel? What will be going through your reptilian brain?
On the topic of adaptability, I’ve come to the conclusion that milenials are actually far more capable of adaptability under pressure than first impressions would suggest. They get a lot of flack for being hopelessly inept and embedded in the system that dictates their every move. On closer inspection, many of this “subspecies” would have a high rate of adaptability to sudden changes in their living conditions. I even held the belief, for a brief moment, that they would be capable of accepting life without electronic media and even find value in the kind of processes that you talk about, Don.
But that’s only one side of the story. After the starter pistol gets fired and people all over the world begin to realise that they should have been learning to farm instead of managing their facebook feeds, then groups of 150 will quite naturally start to form in every city and every rural community.
The thing is, not all the groups will have prepared a farming strategy through extensive research on soil bacteria and compost. I would wager a bet that most of the other millions of 150ers will rapidly develop a whole other set of strategies that will not be compatible with yours.
While your long term strategies involve billions of neurons firing in your prefrontal cortex, the strategies of the other 150ers will rely on the base instincts of the reptilian complex. It’s these base instincts that I suspect will be reactivated in the unprepared – even the dopey milenials.
I wish you good luck with your seeds and manure.
But nature favors another strategy when chaos comes to town. Even if the rewards are short lived.
That’s a magnificent post…. well done … bravo…. bravo … superb….
When one comes down from the ivory tower of Delusistan post collapse…. Realitystan is going to be shocker….
Prepper Tip for Sunday Feb 14: The best deals on shotgun shells are to be had when buying large blocks of 250 shells…. buckshot is a very nice choice…. good for taking down wild pigs…. could also take a deer and some other large animals from close range….
I suspect a steady state for humans is possible…. but it would involve living in conditions similar to that of a chimpanzee…. the minute our big brains kick in and demand that we Live Large…. we head for collapse…
I was in the garden yesterday doing some thinking as I harvested vegetables and got ready for the winter plantings….
Imagine a hunter gatherer was squatting in the forest next to our high security prison/garden observing me …. watching me use a pitchfork made of metal to pull weeds (have the spray but have holding it in reserve for when I won’t care if what I eat is no longer pure)….. watching me with the wheelbarrow made of plastic and aluminum….. checking out our fence that is rabbit and sheep proof….
Surely he would amazed at all the gear that I have to grow food…. he’d be amazed at the amount of food that is organized so nicely in the raised beds….
I was wondering — would he look at me and think similar thoughts to what someone like Scott Nearing would think when he looks at Jamie Dimon …
FE, you must of missed the comment regarding Hunters/Gatherers. No matter, there were only a population level of approximately 10 million worldwide in their day. Years ago I was fortunate to listen to wild foods expert, Jim Duke, and he made that point to use all as we walked through the forest trail…
Anyhoot, Jim Duke, now in his 80’s, is still active, and if you want an answer to your question view the video here
http://www.greenpharmacy.com
Dr. Jim Duke also has a website of his own that is interested in this topic named the “medicine hunter”
http://www.medicinehunter.com/dr-jim-duke/
Good observation. Kinda spooky. Would be useful to see things from the other guy’s perspective.
If you could see “you” through the eyes of the hunter/gatherer you might give your position away for belly laughing. You and your hunter/gatherer buddies might indulge in a good old session of ridicule, mocking the actions of the other “you” trapped in your artificial world behind the fence.
I wouldn’t want to see the world through Jamie Dimon’s eyes…
But there do exist very serious proposals to “bottle” the essence of humanity and run the software on a hyper efficient and hyper resilient substrate. This bottled version of us could theoreticallly continue its existence on a platform orbiting the sun providing continuous energy.
The matrix movie came close to describing something along these lines complete with the idea that human bodies would be the source of energy! Quite a stretch, but the idea of humans maintained in pods, fed a soylent green like nutrient slop, while having a pseudo reality pumped into their minds serves as a metaphor and launching pad for radical proposals among the futurist community.
Instead of human bodies in pods, humans would upload copies of their brains to resilient structures that could house trillions of these synthetic minds. The size of the overall structure could be reduced as far as physical constraints allow, but lets say the size of a server farm on a space bound platform.
The individual artificial human components of this pseudo community living out their roles in an open world simulation would be unaware that they were actually in a simulation. They would play out their roles as if every little decision mattered a great deal.
To spice things up a little and avoid the problem of stagnation, the space bound community could be introduced to their maker – the AI that’s responsible for the station maintenance…
The AI could get things going by appearing as a burning tree before the odd pseudo world inhabitant here and there. The voice of the Creator would be heard directly by a few fortunate seers and prophets. Non believers would pride themselves in giving the true believers a really hard time…
What’s to say we’re not in such a simulation already?
‘The individual artificial human components of this pseudo community living out their roles in an open world simulation would be unaware that they were actually in a simulation. They would play out their roles as if every little decision mattered a great deal.’
Kinda like this https://www.zynga.com/games/farmville people actually pay real money for pretend cows and chickens … or so I am told….
Good remark, Harry.
You’re talking about homeostasis: https://en.m.wikipedia.org/wiki/Homeostasis
Homeostasis doesn’t seem to be very well understood, but it’s a matter of fact that, from some point, quite a few structures don’t act according to self-organized criticality (that pushes them to grow until collapse), but according to a regulation mechanism that triggers negative feedback processes when needed, in order to bring back some value within its optimal range.
We can imagine this optimal value allows the process to run in best possible conditions, thus leading it to be chosen by natural selection.
Homeostasis acts at different levels (the cell, the organ, the organism, even the super-organism) and on different parameters (the temperature, the size, the pH, the blood-pressure, the glucose level and other chemical concentrations, etc..).
Why does it apply to some structures and not to others is still unclear. Roddier thinks it’s connected to the level of cooperation, which has to be sufficiently high so that the group can be considered as a single entity.
It works for example in the case of a swarm of bees, whose optimal metabolism (energy consumption per unit of time) is proportional to the power 3/4 of its mass (as for almost all living organisms, according to the empirical law found by Kleiber). If the swarm gets too small, the bees have hard time to maintain an optimal temperature in its center ; if the swarm gets too big, the productivity of each bee decreases and it becomes increasingly difficult for them to maintain a sufficient stock of food. There’s therefore an optimal size for the swarm, which has been selected by evolution (and probably embedded in the genes).
This would mean for us humans and our civilization that to reach homeostasis, we would have to behave as a super-organism.
Ahem, did anyone see the required negative feedback mechanisms?… Sh!t! it’s far too late for that, we’re already in mega-overshoot at all levels. Next time, maybe?
Stefeun
I’ll just add on that current leading edge theories of weight control in humans find that the natural homeostasis which should keep our weight appropriate can get broken. It is possible to reset it, but it requires a shock to the system. So, for example, one cannot merely cut down on high glycemic load foods, one has to totally stop them for a period of about 2 weeks.
After 2 weeks, one can resume eating small amounts of high glycemic load foods without gaining weight.
Don Stewart
The most interesting part of this topic for me is the self-organization that happens in the presence of large energy gradients.
A dissipative system organizes its self due to the large energy gradient waiting to be dispersed. The system isn’t the driver. The large thermodynamic gradient is the driver.
The hurricane is a system that self-organizes to equalize the gradient between the amount of energy in the water and the amount of energy in the air.
The most interesting part is that the level and complexity of the self-organization that occurs depends upon the size of the gradient being dispersed.
That is why we get bigger hurricanes when the difference between the air and water is greater.
As the complexity of the system increases, the amount of energy it can disperse increases.
So to recap, the bigger the gradient, the more complex the system will be. The more complex the system is the better it is at dissipating the energy moving through the system.
If the economy is a dissipative system then it limits its own size as the energy gradient (energy consumption per-capita) increases.
It is, so it does.
Proves that even with infinite supplies of energy, the size of the economy would still have limits.
The stability of such complex, self-organizing, adaptive, dissipative systems has been underestimated by some and overestimated by others.
https://www.youtube.com/watch?v=VgrU3tzgxXo
GREAT post.
Here’s a good one.
http://www.sciencedirect.com/science/article/pii/0895717794901880
Thanks! Good find!
“The stability of such complex, self-organizing, adaptive, dissipative systems has been underestimated by some and overestimated by others.”
How stable is the dissipative system when the energy gradient declines 90 percent?
In the case of human society, the dissipative system itself is partially responsible for the size of the gradient, in that the system extracts the fossil fuels to power itself. As the system loses a bit of energy, does that reduce the system’s ability to further extract more energy, thus continually reducing the energy gradient until all that remains is the energy difference between day and night?
“How stable is the dissipative system when the energy gradient declines 90 percent?”
Pretty horrible 🙂
A hurricane also extracts energy from the ocean.
What happens to a hurricane when it moves over land and cannot extract energy? It collapses. 🙂
“A hurricane also extracts energy from the ocean.
What happens to a hurricane when it moves over land and cannot extract energy? It collapses. :)”
I think this is a good representation. If the hurricane moves over cooler waters, it cannot simply extract energy from a larger volume of water to make up for the decline in energy density.
It seems we are the hurricane, and we are about to make landfall. There is a chance we hit cooler waters first. Very little chance of hitting warmer waters, though most people hope for it.
I’ve also wondered about the flow rate of energy in dissipative conduits related to degree of complexity and the elimination of waste heat before it has a detrimental effect on metabolism and structures (humans 98.6 F). Overall it seems that human brains have evolved to process as much energy possible (rewards) and resist any impediment in doing so. That humans should adopt the information, intermediate, protein pattern (DNA-RNA-tool) isn’t too surprising considering the forces at work. The technological/fossil fuel conduits are having a rather detrimental effect upon the previously stable ecosystem. The lower brain structures will not accept reason from the more recently evolved frontal cortex. Planning on an individual and collective basis is not for a stable state but rather for continued exponential expansion of rewards.
My goodness, what a fascinating corner of the internet this is. Thank you all for your thoughtful comments. Perhaps Gail is right and the order she sees in the cosmos is indeed indicative of a higher intelligence. Certainly it is highly fortuitous that things are arranged so that stars release their vast bounty of energy over a prolonged period of time rather than flaming out in an instant, just as time itself appears to exist in order to prevent everything from happening at once. Here’s hoping there really is some sort of divine plan and our species isn’t about to be plunged into the physical and metaphysical abyss!
Amen! We have had a very long run of “good luck” so far.
Everyone thinks that better and better days are ahead, since we are in charge, and we know (almost) everything.
Good point! Way too many people have completely missed the existence of dissipative systems. Others have assumed that since we have made them, they are permanent structures.
The basic issue is that we as humans have evolved to eat cooked food. This allows our teeth, jaws, and digestive system to become smaller, and our brain to grow larger. There are various exhibits about concentration of energy, mostly in French (type words into Google translate). The issue with humans’ big brains is that we are forced to either use renewable energy sources in an unsustainable way, or use non-renewable energy resources. We cannot get enough concentrated energy resources just from using renewable resources in a renewable way. This is why economies collapse, over and over again.
This is an exhibit showing how we have evolved toward ever-more concentrated energy use.
I can see how Jantsch was trying to arrive at a theory of self-organization in the universe. I haven’t read his book but it would be worthwhile I’m sure. I’m trying to think of a gradient at the cosmological scale that would result in the information-intermediate-tool pattern that results in the complexity of both ecosystems and the technological system but can’t imagine it. I think it requires just exactly what we have here on earth, a steady flow of energy and a water planet just the right distance from the sun. Our civilizations are not the final stage in some cosmological unfolding, but rather a peculiar sideshow.
Rgarding Jantsch’s life Wikipedia had this to say:
“For the last few years of his life, Jantsch was without a job and lived in an “apartment in Berkeley: dark and depressing room, with massage parlors above and below; a typewriter, a plant, and scattered copies of his favorite newspaper, Neue Zurcher Zeitung”.[3] It was here that he finished his last book, The Self-Organizing Universe. He made a living and supported his mother “by giving lectures ail over the world, through writing, and by relying on a few friends”.[3]
Jantsch died on December 12, 1980 in Berkeley, California “after a short but painful illness.”[6] He had been “alone and lonely, abandoned by friends, misunderstood by colleagues”.[3] His ashes were scattered over the Pacific Ocean.”
Amazing how great ideas are so valued by our hedonist civilization that is about to be flushed down the cosmic toilet.
I noticed when talking about the Gaia hypothesis, Jantsch says, “Life to a significant extent creates its own conditions.” I thought this was a good way of describing the situation.
Dear Finite Worlders
A very blunt spoken OECD economist speaks:
http://www.zerohedge.com/news/2016-02-10/negative-rates-are-dangerous-oecd-chair-warns-our-entire-system-unstable
Don Stewart
It is really hard to believe that reducing the amount in people’s accounts will get them to spend more. In fact, Mr White bents this issue.
It will be interesting to see what happens — but if whatever cash I have on account is losing money every month — I’ll be looking to park it somewhere where I can generate a return of anything 0 or above…
The problem will be that many people will be looking for the same thing ….
Perhaps gold is the answer….
Exactly Gail, it illustrates the defective and estranged mentality of these people, the bankers and their pet economists: forced – almost compulsory – consumption for the masses through negative interest rates and electronic money is truly the counsel of despair.
Let’s compare that coercive plan to the 1950’s and 60’s when people happily purchased gods cars, fridges, etc because they had the money and it seemed to promise a better future.
It shows how close to the edge this system is, and that no real solutions are on the table.
In some ways it reminds me of the late Roman emperors legislating to force people to follow the trades of their fathers, when those trades had ceased to be viable due to heavy taxes and economic and social decline.
I am drunk on comments…. so many comments….