Why Globalization Reaches Limits

We have been living in a world of rapid globalization, but this is not a condition that we can expect to continue indefinitely.

Figure 1. Ratio of Imported Goods and Services to GDP. Based in FRED data for IMPGS.

Figure 1. Ratio of Imported Goods and Services to GDP. Based in FRED data for IMPGS.

Each time imported goods and services start to surge as a percentage of GDP, these imports seem to be cut back, generally in a recession. The rising cost of the imports seems to have an adverse impact on the economy. (The imports I am showing are gross imports, rather than imports net of exports. I am using gross imports, because US exports tend to be of a different nature than US imports. US imports include many labor-intensive products, while exports tend to be goods such as agricultural goods and movie films that do not require much US labor.)

Recently, US imports seem to be down. Part of this reflects the impact of surging US oil production, and because of this, a declining need for oil imports. Figure 2 shows the impact of removing oil imports from the amounts shown on Figure 1.

Figure 2. Total US Imports of Goods and Services, and this total excluding crude oil imports, both as a ratio to GDP. Crude oil imports from https://www.census.gov/foreign-trade/statistics/historical/petr.pdf

Figure 2. Total US Imports of Goods and Services, and this total excluding crude oil imports, both as a ratio to GDP. Crude oil imports from https://www.census.gov/foreign-trade/statistics/historical/petr.pdf

If we look at the years from 2008 to the present, there was clearly a big dip in imports at the time of the Great Recession. Apart from that dip, US imports have barely kept up with GDP growth since 2008.

Let’s think about the situation from the point of view of developing nations, wanting to increase the amount of goods they sell to the US. As long as US imports were growing rapidly, then the demand for the goods and services these developing nations were trying to sell would be growing rapidly. But once US imports flattened out as a percentage of GDP, then it became much harder for developing nations to “grow” their exports to the US.

I have not done an extensive analysis outside the US, but based on the recent slow economic growth patterns for Japan and Europe, I would expect that import growth for these areas to be slowing as well. In fact, data from the World Trade Organization for Japan, France, Italy, Sweden, Spain, and the United Kingdom seem to show a recent slowdown in imported goods for these countries as well.

If this lack of demand growth by a number of industrialized countries continues, it will tend to seriously slow export growth for developing countries.

Where Does Demand for Imports Come From?

Many of the goods and services we import have an adverse impact on US wages. For example, if we import clothing, toys, and furniture, these imports directly remove US jobs making similar goods here. Similarly, programming jobs and call center jobs outsourced to lower cost nations reduce the number of jobs available in the US. When US oil prices rose in the 1970s, we started importing compact cars from Japan. Substituting Japanese-made cars for American-made cars also led to a loss of US jobs.

Even if a job isn’t directly lost, the competition with low wage nations tends to hold down wages. Over time, US wages have tended to fall as a percentage of GDP.

Figure 3. Ratio of US Wages and Salaries to GDP, based on information of the US Bureau of Economic Analysis.

Figure 3. Ratio of US Wages and Salaries to GDP, based on information of the US Bureau of Economic Analysis.

Another phenomenon that has tended to occur is greater disparity of wages. Partly this disparity represents wage pressure on individuals doing jobs that could easily be outsourced to a lower-wage country. Also, executive salaries tend to rise, as companies become more international in scope. As a result, earnings for the top 10% have tended to increase since 1981, while wages for the bottom 90% have stagnated.

Figure 4. Chart by economist Emmanuel Saez based on an analysis IRS data, published in Forbes.

Figure 4. Chart by economist Emmanuel Saez based on an analysis of IRS data, published in Forbes. “Real income” is inflation-adjusted income.

If wages of most workers are lagging behind, how is it possible to afford increased imports? I would argue that what has happened in practice is greater and greater use of debt. If wages of American workers had been rising rapidly, perhaps these higher wages could have enabled workers to afford the increased quantity of imported goods. With wages lagging behind, growing debt has been used as a way of affording imported goods and services.

Inasmuch as the US dollar was the world’s reserve currency, this increase in debt did not have a seriously adverse impact on the economy. In fact, back when oil prices were higher than they are today, petrodollar recycling helped maintain demand for US Treasuries as the US borrowed increasing amounts of money to purchase oil and other goods. This process helped keep borrowing costs low for the US.

Figure 5. US Increase in Debt as Ratio to GDP and US imports as Ratio to GDP. Both from FRED data: TSMDO and IMPGS.

Figure 5. US Increase in Debt as Ratio to GDP and US imports as Ratio to GDP. Both from FRED data: TSMDO and IMPGS.

The problem, however, is that at some point it becomes impossible to raise the debt level further. The ratio of debt to GDP becomes unmanageable. Consumers, because their wages have been held down by competition with wages around the world, cannot afford to keep adding more debt. Businesses find that slow wage growth in the US holds down demand. Because of this slow growth in the demand, businesses don’t need much additional debt to expand their businesses either.

Commodity Prices Are Extremely Sensitive to Lack of Demand

Commodities, by their nature, are things we use a lot of. It is usually difficult to store very much of these commodities. As a result, it is easy for supply and demand to get out of balance. Because of this, prices swing widely.

Demand is really a measure of affordability. If wages are lagging behind, then an increase in debt (for example, to buy a new house or a new car) can substitute for a lack of savings from wages. Unfortunately, such increases in debt have not been happening recently. We saw in Figure 5, above, that recent growth in US debt is lagging behind. If very many countries find themselves with wages rising slowly, and debt is not rising much either, then it is easy for commodity demand to fall behind supply. In such a case, prices of commodities will tend to fall behind the cost of production–exactly the problem the world has been experiencing recently. The problem started as early as 2012, but has been especially bad in the past year.

The way the governments of several countries have tried to fix stagnating economic growth is through a program called Quantitative Easing (QE). This program produces very low interest rates. Unfortunately, QE doesn’t really work as intended for commodities. QE tends to increase the supply of commodities, but it does not increase the demand for commodities.

The reason QE increases the supply of commodities is because yield-starved investors are willing to pour large amounts of capital into projects, in the hope that commodity prices will rise high enough that investments will be profitable–in other words, that investments in shares of stock will be profitable and also that debt can be repaid with interest. A major example of this push for production after QE started in 2008 is the rapid growth in US “liquids” production, thanks in large part to extraction from shale formations.

Figure 6. US oil and other liquids production, based on EIA data. Available data is through November, but amount shown is estimate of full year.

Figure 6. US oil and other liquids production, based on EIA data. Available data is through November, but amount shown is estimate of full year.

As we saw in Figure 5, the ultra-low interest rates have not been successful in encouraging new debt in general. These low rates also haven’t been successful in increasing US capital expenditures (Figure 7). In fact, even with all of the recent shale investment, capital investment remains low relative to what we would expect based on past investment patterns.

Figure 7. US Fixed Investment (Factories, Equipment, Schools, Roads) Excluding Consumer Durables as Ratio to GDP, based in US Bureau of Economic Analysis data.

Figure 7. US Fixed Investment (Factories, Equipment, Schools, Roads) Excluding Consumer Durables as Ratio to GDP, based on US Bureau of Economic Analysis data.

Instead, the low wages that result from globalization, without huge increases in debt, make it difficult to keep commodity prices up high enough. Workers, with low wages, delay starting their own households, so they have no need for a separate apartment or house. They may also be able to share a vehicle with other family members. Because of the mismatch between supply and demand, commodity prices of many kinds have been falling. Oil prices, shown on Figure 9, have been down, but prices for coal, natural gas, and LNG are also down. Oil supply is up a little on a world basis, but not by an amount that would have been difficult to absorb in the 1960s and 1970s, when prices were much lower.

Figure 9. World oil production and price. Production is based on BP, plus author's estimate for 2016. Historical oil prices are calculated based on a higher than usual recent inflation rate, assuming Shadowstats' view of inflation is correct.

Figure 9. World oil production and price. Production is based on BP, plus author’s estimate for 2016. Historical oil prices are calculated based on a higher than usual recent inflation rate, assuming Shadowstats’ view of inflation is correct.

Developing Countries Are Often Commodity Exporters 

Developing countries can be greatly affected if commodity prices are low, because they are often commodity exporters. One problem is obviously the cutback in wages, if it becomes necessary to reduce commodity production.  A second problem relates to the tax revenue that these exports generate. Without this revenue, it is often necessary to cut back funding for programs such as building roads and schools. This leads to even more job loss elsewhere in the economy. The combination of wage loss and tax loss may make it difficult to repay loans.

Obviously, if low commodity prices persist, this is another limit to globalization.


We have identified two different limits to globalization. One of them has to do with limits on the amount of goods and services that developed countries can absorb before those imports unduly disrupt local economies, either through job loss, or through more need for debt than the developed economies can handle. The other occurs because of the sensitivity of many developing nations to low commodity prices, because they are exporters of these commodities.

Of course, there are other issues as well. China has discovered that if its coal is burned in great quantity, it is very polluting and a problem for this reason. China has begun to reduce its coal consumption, partly because of pollution issues.

Figure 10. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

Figure 10. China’s energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

There are many other limiting factors. Fresh water is a major problem, throughout much of the developing world. Adding more people and more industry makes the situation worse.

One problem with globalization is a long-term tendency to move manufacturing production to countries with ever-lower standards in many ways: ever-lower pollution controls, ever-lower safety standards for workers, and ever-lower wages and benefits for workers. This means that the world becomes an ever-worse place to work and live, and the workers in the system become less and less able to afford the output of the system. The lack of buyers for the output of the system makes it increasingly difficult to keep prices of commodities high enough to support their continued production.

The logical end point, even beyond globalization, is for automation and robots to perform nearly all production. Of course, if that happens, there will be no one to buy the output of the system. Won’t that be a problem?

Adequate wages are critical to making any system work. As the system has tended increasingly toward globalization, politicians have tended to focus more and more on the needs of businesses and governments, and less on the needs of workers. At some point, the lack of buyers for the output of the system will tend to bring the whole system down.

Thus, at some point, the trend toward globalization and automation must stop. We need buyers for the output from the system, and this is precisely the opposite of the direction in which the system is trending. If a way is not found to fix the system, it will ultimately collapse. At a minimum, the trend toward increasing imports will end–if it hasn’t already.



About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Financial Implications and tagged , , , , , , . Bookmark the permalink.

1,263 Responses to Why Globalization Reaches Limits

  1. michael steen says:

    Hi, having followed your site for 8 years now I had the feeling that it was just about peak oil.
    Your latest blog for me has hit the nail on the head. What the world does about this situation
    will be interesting to say the least, is there a solution within the current world order !!

    • Exactly! I come from the financial world, where the whole goal is forecasting accrual basis results based on calendar year flows (and making recommendations for future funding based on models of past flows). It struck me as soon as I read about peak oil that people didn’t really have the problem diagnosed right, since the financial forecasts not would work out as planned, and would bring the system down. It took me until now to put all of the pieces together, including the physics connection.

      This is a link to an article I wrote in 2007, when I first started writing about the problem. https://ourfiniteworld.com/2007/04/22/our-world-is-finite-is-this-a-problem/ It is closely related to an article that I had published in a magazine for actuaries at the same time. http://www.contingencies.org/mayjun07/finite.pdf It was about then I decided I needed to leave my employer if I was going to write about the topic. My employer was a consulting firm making recommendations to clients in a number of areas, including necessary pension contributions and funding needs for captive insurance companies. I felt like I had a conflict of interest.

  2. richard says:

    I’m intrigued by the responses to this article
    “The chart shows how jobs and total business sales are normally on the same wave length. Which is logical. When sales curdle, businesses cut their payrolls. When sales pick up, they hire. But since July 2014, a peculiar trend has set in: employment (red line, right scale) rising and sales (black line, left scale) falling:”
    To cut to the chase, people ignore the importance of productivity. Even when a guest begins to address the subject, the TV presenter cuts off the discussion. Why? Because productivity isn’t entertaining? Maybe – but ERoEI displays much the same causal effects, so the mystery remains.

  3. Christopher says:

    The world economy seems to presently push many margins. How long can the just in time of demand model be challenged before stock-piling becomes a problem:


  4. Anubis says:

    More on Ancient Egypt: it is even wilder than I remembered. This is great stuff!


    Certain grey areas remain in the history of this Egypt that fascinates us so much. How did this civilization begin? Why does the papyrus of Manetho, which provides the chronology of the pharaohs, so upset official Egyptology? Antoine Gigal gives a progress report on recent discoveries.

    The pre-pharaonic past of Egypt remains a very great enigma because the question remains as to what exactly occurred during the mysterious period prior to 3000 BC, date of the appearance of the first official pharaoh known as Menes-Narmer. At that time, in a few decades, without any warning, there suddenly appeared in a surprisingly perfect form, writing, perfect pyramids, erudite astronomy, technical skills and knowledge – everything that goes with a very sophisticated civilization. And it all seems to have arrived very quickly.

    As the English Egyptologist Toby Wilkinson put it so well: “They seem to have no ancestors or periods of development, they seem to have appeared overnight.”

    Mainstream Egyptology avoids talking much about Manetho, because they find some of the details he gives extremely disturbing.

    I’ll say, heeheehee. I think we can safely rule out a Papal endorsement! hoho.

    • You are claiming things that are simply not in evidence.

      “At that time, in a few decades, without any warning, there suddenly appeared in a surprisingly perfect form…. perfect pyramids….”


      There is clear evidence of a development in pyramids over time including one that collapsed shortly after building.

      But don’ let facts get in the way of a pet theory…

      • Anubis says:

        The Giza pyramids are a cut above. Those following were shoddy imitations.

        Here is a counter:


        see PCH and back and forth

        yeah, great argument… however, summerian texts and tablets mention the 3 pyramids long before khufu or sneferu or imhotep.
        carbon dating is irelevant. cannot date the pyramid itself, only some objects related to it.
        the discending inner shaft of the great pyramid, that has been closed for thousands of years, was left unduplicated into the smaller pyramids made by egyptians. why? becouse they didn’t know it was there.

        • “carbon dating is irrelevant” .. because it doesn’t fit with your pet theory.

          the existence of many tombs previous to Giza which developed pyramid building techniques, you ignore, … because they don’t fit your pet theory.


  5. Peabody Energy (coal) may seek bankruptcy protection..
    The share price went down from peak 1320 to sub 3 bucks, he who shorted this specimen must be now richer than the proverbial Jesus.

    The whole bubbly hill range from early 2000s, with two peaks and current slump to be seen here:

    • Vince the Prince says:

      Wow, Peabody Coal! That is big news, and as a former Earth Firster! way back in the good olld days of Dave Foreman and Judi Bari, this would be celebrated around a camp fire with song, drums and whatever. Peabody is an evil corporation and no tear shed by me for those thugs.

      • The accompanying articles claim a/ coal is no longer needed as natgas is the solution and b/ most of the infrastructure i.e. coal burning plants are already beyond their operational lifetime. What about future natgas shortage?, if we allow such a concept at all, perhaps just Koombaya dance-trance will do.

        • Crusty says:

          Believe me, what Peabody Coal has done to the Indian lands out West is on par with worse
          Peabody, the largest coal company in the U.S., operates massive strip mines on Black Mesa, Ariz., ancestral homelands of the Navajo people. Tens of thousands of Navajo families have been forcibly relocated in order to clear the land for Peabody’s strip mines; this constitutes the largest forced relocation of indigenous peoples in the U.S since the Trail of Tears. To this day, Navajo and Hopi people are engaged in resistance to the forced relocation and mining practices threaten the land and livelihood of future generations.

          In nearly 45 years of operation, Peabody’s mines on Black Mesa have been the source of over 325 million tons of carbon dioxide discharged into the atmosphere#. The strip mines have damaged countless graves, sacred sites, and homes. 70 percent of a once-pristine desert aquifer has been drained for coal operations. The remaining groundwater is polluted, causing devastation to a once-flourishing ecosystem.

          “The mine affects lots of ways of life. It’s destroying the places that have names. Everywhere you go here, every place has a name: names I learned from my grandparents, names that have existed for hundreds of years. A lot of those places and knowledge of those places and cultural values are being destroyed by the mine. It’s destroying our way of life,” says Gerold Blackrock, a resident of Black Mesa.

          Peabody’s strip mines harm the health of communities wherever they operate, from Black Mesa to Appalachia. Appalachian miners’ hard-earned healthcare benefits and pensions are threatened by Peabody’s business practices. “Peabody and Arch dumped their obligations to retired miners into Patriot. This was a calculated decision to cheat people out of their pensions,” said retired United Mine Workers of America miner Terry Steele.

          You can count me in around the camp fire singing Koombaya and I don’t care about your BAU…stick it….I rather freeze and starve.

          • Sorry for my insensitive post, frankly the comment was more pointed at the stupidity of these articles. I’m aware of the plight of the first nations.

            • Vince the Prince says:

              Worldofhanumanotg, thanks for explanation,. Just wanted to point out the human cost of cheap strip mined coal that we don’t see, it is hidden. Good to to see the so called “winners” end up as “losers” for a change. I know the top notch execs will still leave very rich, but when BAU ends, they will end up living like those now forced to on the discarded Indian reservation lands.

  6. The Goat says:

    Before European settlement the entire continent of Australia naturally supported about 670 thousand humans. This was in a pristine environment with kangaroos outnumbering humans more than 50 to 1. With rivers, streams and billabongs producing barramundi, Murray and Mary cod in the 50kg range. I remember reading once that when Europeans first arrived in Australia that reeds and blade grass around fresh water billabongs being 10 foot tall and the mighty Murray cod and barramundi breaking set lines consisting of thick rope tied to a gum tree.

    Open main menu

    Watch this page
    Indigenous Australians
    “Australian peoples” redirects here. For other people of Australia, see Australian people.
    Indigenous Australians
    (Aboriginal Australians and Torres Strait Islanders)
    Total population
    669,881 (2011)
    3% of Australia’s population (2011)[1]
    Population distribution by state/territory
    New South Wales 208,476 (2.89%)
    Queensland 188,954 (4.22%)
    Western Australia 88,270 (3.75%)
    Northern Territory 68,850 (29.77%)
    Victoria 47,333 (0.85%)
    South Australia 37,408 (2.28%)
    Tasmania 24,165 (4.72%)
    Australian Capital Territory 6,160 (1.67%)
    Several hundred Indigenous Australian languages (many extinct or nearly so), Australian English, Australian Aboriginal English, Torres Strait Creole, Kriol
    Christianity 73%
    Non-religious 24%
    Traditional Aboriginal religion 1%
    Related ethnic groups
    see List of Indigenous Australian group names
    Indigenous Australians are the Aboriginal and Torres Strait Islander people of Australia, descended from groups that existed in Australia and surrounding islands prior to European colonisation. The earliest definite human remains found in Australia are those of Mungo Man, which have been dated at about 40,000 years old, although the time of arrival of the first Indigenous Australians is a matter of debate among researchers, with estimates dating back as far as 125,000 years.

    There is great diversity among different Indigenous communities and societies in Australia, each with its own mixture of cultures, customs and languages. In present-day Australia these groups are further divided into local communities.[2] At the time of initial European settlement, over 250 languages were spoken; it is currently estimated that 120 to 145 of these remain in use, and all but 13 are considered to be endangered.[3][4] Aboriginal people today mostly speak English, with Aboriginal phrases and words being added to create Australian Aboriginal English (which also has a tangible influence of Indigenous languages in the phonology and grammatical structure). The population of Indigenous Australians at the time of permanent European settlement has been estimated at between 318,000[5] and 1,000,000[6] with the distribution being similar to that of the current Australian population, with the majority living in the south-east, centred along the Murray River.[7]

    Since 1995, the Australian Aboriginal Flag and the Torres Strait Islander Flag have been among the official flags of Australia.

    Indigenous Australia


    Society, language, culture, and technology


    Groups and communities

    Contemporary issues

    Prominent Indigenous Australians

    See also


    Further reading

    External links

    Read in another language
    Last edited 2 days ago by Pol098
    Wikipedia®® MobileDesktop
    Content is available under CC BY-SA 3.0 unless otherwise noted.
    Terms of UsePrivacy

    • The Goat says:

      Wikipedia has the Aboriginal population being 318 thousand at the time of European settlement. There is over 25 million people in Australia today, take away oil that’s a lot of death!.

      • Vince the Prince says:

        Mister Goat, that was very revealing….could you do the same for New Zealand…adopted home for our own Fast Eddy, who has selected it as a place to survive post BAU.
        Perhaps you could find a reason(s) why that is not so, and give Fast Eddy a reason to settle another spot on our planet Earth….maybe near yet far!

        • The Goat says:

          No worries vince I’ll have a go. I should have explained the report a bit better than I did.
          It states that the Aboriginal population of Australia was about the same as it is today at the time of European arrival (about 670 thousand) but could have been as low as 318 thousand or as high as 1 million.

        • The Goat says:

          I guess the only advantage Australia and NZ have is the distance between them and the 400 odd nuclear reactors in the northen hemisphere.

          Things don’t look any better for NZ as they do for Australia for survival. Upon European contact the New Zealand’s Maori numbers were estermated to be in the 120 thousand range, but unlike the Australian Aboriginal who inhabited Australian for a estermated minimum of 40 thousand years the New Zealand Moari had only been in NZ for about 800 years before Europeans arrived.
          The Maori’s quest for survival was not easy and came at the cost of many bird species including the worlds largest known bird. The Moa bird being 12 foot tall, 230kg and layed eggs the size of footballs had numbers estermated at 60 thousand strong, but were extinct within 100 years of the Maori’s arrival, with no land dwelling predators the Maori could just walk up to the Moa bird and drive a spear through its chest and have chicken dinner for a week!.
          Most carbon dated bones of the Maori people show a early death in the early 30’s with signs of many diseases including TB.

          So with the natural carrying capacity of hunter gathers in NZ being about 120 thousand and today’s population being 4.6 million with probably another 1 million in Australia who will all go home once the mining industry collapses there, things don’t look real good!.

          • Vince the Prince says:

            Thank you so much, Mister Goat, so the odds of Fast Eddy surviving the bottleneck is as good as Bernie Sanders being elected to President of the United States.
            Koombaya Fast Eddy!

      • Fast Eddy says:

        Throw in a pile of radiation and you have an extinction event

  7. interguru says:

    A few years ago, the historian William McNeill enunciated the law of Conservation of Catastrophe. The law states that solutions to one crisis lead the way for some equal or greater disaster in the future. Before explaining what this has to do with the Global economy, I will give some examples of the law.

    Forest Fires.

    For over a hundred years the US Forest Service has aggressively doused any forest fire as quickly as it could. Small forest fires, usually ignited by lightning, which used to be very common are now rare. This allowed a century’s worth of debris to accumulate on the forest floor — making them into tinderboxes. Now we are seeing large uncontrollable fires feed by this debris.


    Flood control levees along our rivers have reduced the floods that were common every springtime. The former flood plains are now covered with homes and businesses. The levees have another effect, by confining the rivers raise the level of the rivers during flood season. When there is a very wet season, the confined rivers go high enough to flood over even the best levees, leading to widespread flooding of areas that were not originally in the floodplain.

    The electric grid.

    For the past 50 years we have been linking our once separate local electric grids together to allow them to swap energy and avoid blackouts when a power plant fails. It works, blackouts are rare. However when they do happen, they cover not just a city or a state, but a whole region for long times.


    Someone (I cannot recall who) quipped that the main purpose of civilization is to prevent men from killing each and raping women. Stone age men killed each other at a rate now only seen in our worst neighborhood. Now almost all of us can walk outside in relative safety. Then then there is the another other effect of civilization — large scale war with widespread killing and rape.

    The Global Economy

    After the great depression, the US and the world implemented a set of financial reforms designed the prevent a repetition. These worked, for the past 70 years there has been no widespread economic collapse until 2008. Local collapses, such as the Asian economic crises, were contained within their region. Here comes the big question. Do we, in saving the banks, have an economic version of Conservation of Catastrophe in the future?

    • Stefeun says:

      Very true, interguru,
      and good examples.

      Reminds me of Per Bak’s sand-pile analogy : the more you prevent small avalanches, the more you guarantee a big one in the future.

      It’s the general frequency law, 1/f, that has very wide applications. If you don’t frequently release the small tensions (aka pockets of potential energy, aka financial risks, etc..) in a structure, they all become interconnected, thus increasing the chance of putting down the whole structure when next accident strikes (even if it’s a small one).

    • Fast Eddy says:


      Someone (I cannot recall who) quipped that the main purpose of civilization is to prevent men from killing each and raping women. Stone age men killed each other at a rate now only seen in our worst neighborhood. Now almost all of us can walk outside in relative safety. Then then there is the another other effect of civilization — large scale war with widespread killing and rape.

      And some people on this blog believe we’ll all just get along when civilization blows up …. they’ll just join hands and sing ‘Imagine’ (while they starve peacefully)

      Ha ha x 1,000,000,000

  8. Rodster says:

    “At The Moment, It’s Carnage” – The Startling Truth About China’s ‘Strong Consumer’
    Problems continue to grow in China:
    “China’s consumer is neither strong, nor resilient, and is in fact getting weaker, and more angry by the day as China’s labor conditions continue to deteriorate: just yesterday we reported that “Enormous Crowds” Of Unemployed Chinese Miners Take To The Streets, Clash With Riot Police. Granted this is taking place in China’s industrial region, where massive overcapacity has led many local companies to the verge of bankruptcy, however the weakness has clearly spilled across to all other parts of the country.

    An overnight report confirms as much: according to Reuters, “retailers in China are shedding staff, slowing expansion plans and seeing stocks pile up in warehouses as shoppers tighten their belts – a major headache for a country that has pinned its hopes on consumers to drive economic growth.”

  9. Yoshua says:

    About 40 oil and gas producers across the globe have filed for bankruptcy since oil prices began to decline in late 2014, and up to a third of all energy companies may fail unless prices recover, consulting firm Deloitte said last month.


  10. Yoshua says:

    Half Of Current U.S. Oil Production Is From Fracing: EIA

    In 2000, about 23,000 hydraulically fractured wells produced 102,000 bpd of oil in the U.S. – less than 2% of the national total. But by 2015, the number of fracced wells increased to an estimated 300,000. Production from those wells had increased to more than 4.3 M/bpd, comprising around 50% of total U.S. oil output.

    If those numbers are correct then a fracked well produces 14 barrels a day in average.

  11. Crusty says:

    What I said is that corporate media talks about all kinds of issues except the most important issues. OK? And time after time I’m being asked to criticize Hillary Clinton. That’s the sport that you guys like. The reason this campaign is doing well? Because we’re talking about the issues that impact the American people. I’ve known Hillary Clinton for 25 years. I like her. I respect her. I disagree with her on a number of issues. No great secret,” Sanders told reporters at a campaign stop in Dubuque, Iowa.
    But this is what I worry about. In terms of campaign coverage … there is more coverage about the political gossip of a campaign, about raising money, about polling, about somebody saying something dumb, or some kid [who] works for a campaign sends out something stupid on Facebook, right? We can expect that to be a major story,” Sanders said in an interview on CNN. “But what your job is, what the media’s job is, is to say, look, these are the major issues facing the country. We’re a democracy. People have different points of view. Let’s argue it.
    “Are you and the media prepared to allow us to engage in that serious debate, or do I have to make media attention by simply making reckless attacks on Hillary Clinton or anybody else? I don’t believe in that,” Sanders said on CNN’s “State of the Union.”
    One thing that has disturbed me is how the media treats campaigns,” Sanders told a crowd in Salem, New Hampshire, recalling how Sen. Marco Rubio accidentally hit a child in the face with a football and “that will get more coverage than Marco Rubio’s position on Social Security.”
    “When the media worries about what Hillary’s hair looks like or what my hair looks like, that’s a real problem,” Sanders said in an interview with the New York Times Magazine. “We have millions of people who are struggling to keep their heads above water, who want to know what candidates can do to improve their lives, and the media will very often spend more time worrying about hair than the fact that we’re the only major country on earth that doesn’t guarantee health care to all people.”
    Watch the Bernie Sanders speech the networks wouldn’t show you

    Censorship? By the Elders? Kindergarten media coverage of the candidates?
    Whatever it takes!

    • Fast Eddy says:

      Why do you waste what little time that is remaining bleating on about something that is utterly irrelevant?

      You may as well argue about which brand of cereal tastes best.

  12. Kanghi says:

    This statement reminds me of Gail`s picture some posts back about global economy being a network builded upon each other. Powerful image and no one wants to be the one who sets the whole tower tumbling down.
    “Prosperity is like a Jenga tower. Take one piece out and the whole thing can fall.”
    “That’s a direct quote from John Williams, the President of the San Francisco Federal Reserve Bank in a speech he gave a few weeks ago.”


  13. dolph911 says:

    Do not overestimate the U.S. military. Yes, it’s big and powerful, but it’s incredibly bureaucratic and not particularly well managed these days.

    I have spent time as a physician to veterans, they are thoroughly demoralized even though they do what they consider to be their patriotic duty. I have even spent time as a physician on a military base and broadly speaking I was not impressed. The people were generally good and sometimes great; the system was completely messed up.

    You want to see impressive? Check out a Russian or Chinese military parade.

    Believe me, I know the empire will last a long time, but the cracks are there.

    • Rodster says:

      “I know the empire will last a long time, but the cracks are there.”

      Catherine Austin Fitts likes to refer to it as “the slow burn”.

    • Kanghi says:

      I remember reading that the US military is so drained by wars in Iraq and Afghanistan, that they cannot really go for longer wars, before new generation as so many people are having PTSD etc. Anyways, Empire is collapsing and it cannot affort to upkeep so huge machine long anymore.

      • A military complex has only two ways by which it can sustain itself
        A—by absorbing a proportion of the gross energy production of its home nation
        or B, by invading weaker nations and looting sufficient resources in order to maintain its military structure.
        In WW2, Germany and Japan built colossal armies. They then had to thrust outwards constantly looting other weaker nations in order to sustain those armies in sufficient resources to maintain functionality.
        Effectively, they ran military Ponzi schemes. (Plan B)
        We can be certain that if Germany and Japan had won WW2, eventually they would have had to fight each other over access to resources in order to sustain their military machines
        The Roman army did the same thing, as did every army in history—except one.
        In WW2, the USA had sufficient indigenous resources to only need plan A
        They could ship oil 3000 miles to battlefields, together with all the food, men and materiel necessary to defeat 3 other empires simultaneously in a little over 3 years.
        The USA victory in WW2 kicked off a global frenzy of seemingly endless prosperity. Germany and japan were rebuilt, not out of altruism, but to sustain global commerce. everybody spent money like crazy.
        Except that they weren’t spending money, they were consuming hydrocarbons, which America controlled by virtue of being the dominant producer.
        It was never going to end.
        But it did. Why? Because in the mid 60s, discoveries of new oilfields peaked, and in 1970, USA (conventional) oil production peaked. (shale oil and Athabasca had been known about since the 50s).
        Since then oil production has gradually got tighter and tighter. We are in a closing vice between the demands of our accustomed lifestyle, and the availability of energy to sustain it. That is where our collective disbelief comes in, and when our politicos make promises of infinite growth, this is the killer equation they conveniently ignore.
        The military complex makes greater and greater demands on its host nation, at a time when the available energy is rapidly declining. Politicians whose jobs depend on defence workers votes insist that warfactories are kept running and those workers employed, irrespective of the fact that their products must be either scrapped or destroyed.
        So, without a war to justify itself, the military must continue to consume the resources of its home nation.
        The endgame?
        When the nation collapses and the military cannot be paid, it will go self employed. In the case of the USA, this will involve secession into 5 or 6 autonomous nations. The central government in DC will not be able to prevent it.

        • Stefeun says:

          Thanks Norman,
          very good post.

        • Artleads says:

          X 2.

          ” In the case of the USA, this will involve secession into 5 or 6 autonomous nations. ”

          You mean that regional bases will hold on the equipment they have and be the military for that region? If they can’t be paid by central government, how will they be paid by regional (newly balkanized) governments?

          • they won’t be paid
            they will act as a protection service for the devolved regions.
            How that will pan out is anybody’s guess, but seceded regions, as I see it, will have no choice but to try and defend their actions in some way (don’t ask me for details )
            I accept that I could be talking utter nonsense of course.
            But the USA is too big a land area to hold together without constantly available cheap energy.
            To get a handle on it try to visualise what the USA would be right now had the country not been stitched together by railways and the roads (then air transport)—- I would guess the separation would be West coast, the South West, South east, North east and Alaska, with the centre divided somehow between them.
            I’d be happy to be shown to be wrong, but if hydrocarbon energy builds a nation, it seems to stand to reason that without it, that nation will fall apart.
            There will of course be conflict to prevent it happening, but when armies run out of gas—they stop running.
            Thus a century from now at most, possibly a lot sooner, the USA is likely to no longer exist as a single entity.

            • apologies—i keep getting my response boxes mixed up
              Norman Pagett

            • PeterEV says:

              There is a book called the “Nine Nations of North America” by Joel Garreau in which he divides North America up into nine countries based on a variety of ethic, geological, agricultural, and economic criteria. It was copyrighted in 1981. You might be able to find it through a used book store.

              The nations are: New England, The Foundry (Rust Belt), Dixie, The Islands (Caribean), MexAmerica, Ecotopia (Pacific NW coastal area), The Empty Quarter (Rocky Mountains), The Breadbasket (American Midwest and Great Plains), and Quebec. This goes along with your thoughts of how you divided the USA up into similar areas.

            • more less fits in with my thinking—the usa is just too big to hold together as single nation once the source of its creation has been removed

          • Christian says:

            They won’t be paid by anyone, they will be the government. They can just distribute surrounding land to some choosen people (arguably their own relatives) and catch king’s 20% part.

    • Dmitry orlov has posted an interesting article along these lines this week:


  14. Fast Eddy says:



    A coup against the Elders in the works?

    As with all systems of rule — the people will go along — AS LONG AS THE RULERS DELIVER PROSPERITY.

    The minions of the Elders are happy to go along so long as they prosper.

    Could it be that the writing is on the wall and the pitchforks are coming out — lead as usual by elements in the military?

    Even if this is true — it won’t matter at all — the Elders are not the problem — the lack of cheap to produce oil is…. and nobody has a fix for that.

    • Jeremy says:

      Remember when the Rockefellers were said to rule the roost? Where would you place them now, and who would you cite as the most powerful backroom boys these days?

    • Jeremy says:

      @FE, which books or documentaries would you recommend to learn about the full scope of MKUltra?

    • Kurt says:

      As I keep saying, the U.S. Military will not go quietly into the night. The entire history of the human race boils down to, “we are going to kill you and take your stuff.” Ain’t no different now and the U.S. Military is the most powerful force ever to exist on the planet. They will prevail.

      • Christian says:

        Kurt, I am not sure you understood what US military are saying.

        FE: congrats, it seems you got the biggest news of the year. But the military has just started distributing food in Argentina’s poorer province, so only a minor correction:

        As with all systems of rule — the people will go along — AS LONG AS THE RULERS DELIVER FOOD

      • Crusty says:

        Exactly, the WSJ had an article that showed the US military power was 80% in the world (this was a decade ago), combined with its “allies”, well….you get the picture.
        Perhaps with the military adventures over the last decade this has diminished.
        1) United States
        Budget: $601 billion
        Active frontline personnel: 1,400,000
        Tanks: 8,848
        Total aircraft: 13,892
        Submarines: 72

        Despite sequestration and other spending cuts, the United States spends more money — $601 billion — on defense than the next nine countries on Credit Suisse’s index combined.

        America’s biggest conventional military advantage is its fleet of 10 aircraft carriers. In comparison India, which is constructing its third carrier, has the second-most carriers in the world.

        The US also has by far the most aircraft of any country, cutting-edge technology like the Navy’s new rail gun, a large and well-trained human force — and that’s not even counting the world’s largest nuclear arsenal.
        When the military goes, so does the American Empire…just like the Roman Empire.
        Until then…

        • Christian says:

          I think US military understand they are reaching diminishing returns. Ask Gail about the dinner she shared at an Admiral’s home several years ago. That was before shale boom, and now they know they will end up distributing food in ND

        • Christian says:

          Too many weapons, too many costs. Military wages will be saved instead

      • Fast Eddy says:

        The Roman army was unbeatable… as were the Mongol hordes…. the Ottomans… the Brits…

        Until they were beaten.

    • Good points.
      For instance the top German opposition block AfD (Alternative for Germany) is supported and also co-chaired with “traditionalist” like former nobility persons, family businesses and so on. Simply for certain demoted factions of the local establishment “the globalization” went too far, they can think in practical multi generational perspective (as back and forth on a timeline), which is quite different from the “mix it up in global pot, stir it, and cash out to ride into the sunset” dominant narrative of past decades. As they know very well it’s always better try to position to be part of the post crash/reset environment, how realistic is this proposition this time “in the cycle” is another question though.

  15. bandits101 says:

    Yes Don what you say or quoted is exactly how it stands. I’ve said it before, if the economy crashed completely tomorrow and there were still lakes of oil and mountains of coal and gas, a new economy would arise to process the energy. Without excess and easy energy, that cannot happen, especially for the population number that is supported now.

    • Rodster says:

      bandits101 says:
      March 15, 2016 at 2:41 pm

      I’ve said it before, if the economy crashed completely tomorrow and there were still lakes of oil and mountains of coal and gas, a new economy would arise to process the energy. Without excess and easy energy, that cannot happen, especially for the population number that is supported now.
      Energy concerns is the least of our problems going forward. What we have done to Earth’s ecosystem and biosphere will pay us back 10 fold for decades if not centuries to come. We are already pushing the oceans to the brink. That doesn’t even factor in Fukushima and all the radiation it continues to dump in the Pacific Ocean. I recently read that Fukushima, Japan Govt officials and Nuclear scientists are actually considering burying the damaged fuel rods in the ocean floor.

      • Rodster says:

        That was supposed to be TEPCO, Japanese Govt officials and nuclear scientists

      • bandits101 says:

        Absolutely agree with that. We have taken the Earth to the brink with the FF’s burnt already, we certainly cannot realistically afford to continue the burn.

        • Rodster says:

          But it’s much more about than FF’s. We dump over 8 million tons of plastics each year in the ocean. That doesn’t even factor the 180 million tons of toxic waste we dump in our oceans, rivers and lakes each year. And the billions of tons of garbage we have dumped in the oceans as well. Back in the 1970’s it was common knowledge that NYC was dumping garbage in the ocean because the landfills couldn’t keep up.

          There are ocean dead zones from all the pollutants, toxic chemicals and trash that’s been dumped in the oceans. Hell, back when they thought the spotted that missing Malaysian Airliner off the coast of Australia turns out it wasn’t floating debris from the accident, it was “GARBAGE”.

          Fossil fuels just piles on but is small in comparison to what has been going on for decades of ocean dumping. Out of sight out of mind. It’s like when Little Johnny is told to clean up his room and he trows all his toys under his bed.

          • bandits101 says:

            Fossil fuels enabled 6 billion extra humans. If you think ff’s are not responsible you are dreaming.

            • Rodster says:

              We blame too much on fossil fuels so that’s where we disagree on. Humans are the ones ocean dumping. If our oceans turned to crap without humans turning the oceans, rivers and lakes into large scale trash cans, then sure i’d say FF’s is the only reason the oceans and marine life are in trouble. It’s like Johnny blaming his toys as to why he threw them under his bed.

            • Fast Eddy says:

              Without fossil fuels Thomas Malthus would have been right many decades ago.

              Fossil fuels have made possible enormous short-term increases in food production — which resulted in a population of 7.4 billion — the short term increases are about to bite back — because we killed our soil with petrochemicals.

              And instead of collapse only being a catastrophe (if it would have occurred before the green revolution) it will now be an extinction event.

            • pre oil/coal/gas–the planet had about 1 billion people
              now there’s 7.4 billion.

              Saudi is even more stark and horrific

              in 1900 they had 1 million people
              now they have 30 million.
              And that in a country that has a bare subsistence level of food production for the original 1 million

  16. Don Stewart says:

    Dear Finite Worlders
    Another clarifying post on Peak Oil:

    Question:“Are we talking a purely physical breakdown of society (net energy) or an artificial one (economic system, payments of debt)?”

    Answer: The two are just opposite sides of the same coin. Without deliverable energy there is no monetary/ financial system, and without a monetary system the deliverable energy doesn’t get produced. The only difference is that if the monetary system collapses a new one can be created. When the energy is gone, it’s gone.!

    Nature appears to have given humans an infinite imagination, She didn’t give them infinite resources with which to back it up

    Back to me. I believe the answer pretty succinctly states the reality position in the ‘money vs. energy’ dispute. If oil goes away, then money will become meaningless…or 90 percent or more of the money will become meaningless. If the money goes away, but we have plenty of energy, we may well raise up a new society with new monetary systems which utilize the energy…much as Germany recovered from the hyperinflation of the 1920s.

    We might be able to rebuild a society which users a whole lot less energy, which would have its own, different monetary system. For example, it might be mostly a home economy, operating without money. However, that society would be a lot poorer and probably a lot smaller.

    Don Stewart

    • interesting take on the relative usage of money and energy
      The ancient egyptians didn’t use money, they paid workers a stipend of food,
      The Egyptian economy had two main threads, tomb building, (pointless) and agriculture (essential).
      With a perfect food growing climate, the agriculture supported the tomb building in an endless ultimately destructive round of activity.
      There was no money. The Pharoah literally owned the country, and thus the products of it. The tomb builders were paid in grain, slightly in excess of that which was needed to eat and live. Your grain issue increased according to rank, thus creating divisions between rich and poor. The Pharoah had the biggest slice of the pie, so he had the biggest tomb. This enabled a barter society, where your excess grain might be used to buy a pair of shoes, or a necklace for the missis,—or whatever.

      It was the perfect barter society.

      The less grain you got, the smaller the tomb and mummification services you could afford.
      It was effectively the direct purchase of human muscle energy to hack away at rock over 000s of years, then use it to build colossal monuments for the purpose of gaining eternal life. We just pay insurance premiums.

      It was an insane energy consuming system, lives dedicated to death, but it gave a purpose to Egyptian society as a whole. At least on their terms. The climate provided fast, cheap and easy food (energy) production. Their excess manpower provided by ample food needed additional employment.
      It was a system that worked fine until the Nile failed to deliver sufficient water, then the economy crashed and people starved to death. In other words, their energy source collapsed. (no international food aid there.)

      Trouble is, it’s being repeated in our own time.
      We in the north don’t have a fast and easy food growing climate, but we do have a fast growing population needing employment, and, up to now, colossal amounts of cheap energy.
      So what do we do?
      We suck that energy out of the ground, convert in via heat engines into food and rotary motion, then use that mechanical motion to build and build an build, upwards and underground, just like the Egyptians did. But on a vastly bigger scale.
      A pyramid is simply a sink of human muscle energy, filled with ‘stuff’ produced by people eager to keep the ‘belief system’ going.
      City towers are just pyramids of a different shape—they are still absolute energy sinks, providing employment while they are being constructed, then also filled with ‘stuff’ to keep the current belief system going. This is why “downsizers” are absolutely convinced that ’employment’ will always be available. (commuting by Tesla cars).
      They have no awareness of what sustains employment in the first place.

      Just like the Egyptians, when their energy system crashed, their society crashed and the pyramids got looted.
      When our energy system goes down, our pyramids will fall apart (far more rapidly of course) and will also get looted.

      Don’t tell me I have a mummy fixation

      • I think it’s worth mentioning the ancient Egypt described above was not just on linear shot, but it had its own partial up and downs, perhaps could be even called as semi-collapses and revivals within the larger cycle. Comparatively we are also nearing the major point of exhaustion of the dominant socioeconomic arrangement, but don’t bet your house on it yet, there might be some last salvage operation attempts going on till ~2030-40..

        • Oh I agree—I didn’t go into all that simply because it would have made my comment far too long.
          The Egyptians had Nileometers. (a vertical water marker) If at flood time the water didn’t reach and pass a certain level, they knew they wouldn’t have enough to sustain required crop production. They could cope with one or two years like that, but three meant starvation, and there was nothing they could do about it.
          All due to the rains failing in Central Africa of course.

          There was still plenty of water in the river, but it was effectively out of reach on the scale they needed it. Their EROEI didn’t pay off. You can water a garden with a bucket, but not an entire country.
          We are in the same situation.
          Oil will always be there, but if the energy needed to extract it is greater than the energy extracted from it….we’re just as dead as the Egyptians.
          We used to have a return on oil of 100:1, now the best conventional wells are down to 20:1
          fracking is about 5:1, Biofuels are little better than 1:1 (depending on whose information you believe)
          our entire infrastructure is a construct of hydrocarbon, windfarms and solar panels cannot replace that.

          It is widely accepted that our civilised existence cannot function on less than an energy return of around 12:1—so it becomes obvious that our remaining 20:1 oilwells are effectively supporting all those oil enterprises supplying at the 5:1 rate, as well as keeping all our other energy using functions afloat.
          When Trump screams that he’s going to make America great again, (the dominant socio-economic arrangement if you like) those figures explain why it can’t happen, irrespective of who is in office.
          Which is why I called my book The End of More.
          Salvage operations won’t work for very long, because we exist in a metal-usage-heat system.

          You can have a scrap metal mountain, but unless you have colossal amounts of heat, that metal will just sit there and corrode to an unusable nothing.
          A blacksmith?—fine—but blacksmiths make things one at a time, using charcoal.

      • Anubis says:

        There is no rational explanation for the the sudden civilisation of Egypt. They went from mudhuts to advanced mathematics and engineering within a generation.

        • I don’t think it’s possible to define their works to happening “within a generation”

          Stonehenge was constructed around the same time as the Pyramids. we don’t know if there was an exchange of knowledge between peoples—but my guess is that it would have been likely.
          The people who built Stonehenge, had the knowledge to cut stones and move them 200 miles to the stonehenge site, over land and water. Moving 30 ton blocks needs knowledge of complex leverage systems and so on. Stonehenge was also an observatory.
          Such knowledge is not acquired suddenly

          • Anubis says:

            It was rapid.

            Where did those math geniuses come from?

            That is the point – Egyptian civilization literally sprang up.

            SH is not comparable.

            • Maths and engineering don’t literally “spring up”
              If they did, you wouldn’t have a million year gap between firemaking and the steam engine and powered flight and the moon landings.
              (they are all derivatives of the same process, chemical combustion)
              The Aztecs used rubber to make primitive shoes—but they never made a wheel or a tyre, even though they built pyramids and shifted enormous rocks.
              The Egyptian civilisation came into being because as the Sahara region dried out as the last ice age ended, the tribes who lived there had no option but to move to the Nile valley.
              The climate was conducive to large scale food (energy) production, leaving free time to develop the cult of tomb building. This itself derived from the fact that the ultra dry desert atmosphere preserved bodies. The Egyptian belief system was firmly based on the “afterlife”, tombs were meant to help you get there more easily.
              Knowledge is a gradual buildup, one idea on another.
              Da Vinci had much of our modern engineering figured out 500 years ago—he just didn’t have an engine. even his genuis couldn’t figure out how to do that.

            • Anubis says:

              We have not maintained the same rate of progress.

            • erm—powered flight 1903

              moon landing 1969?

  17. Western NGOs, activists, and media implicated in cross border illegal smuggling of migrants from Greece (EU) to Macedonia (FYRM). Interestingly enough, the German public opinion is slowly starting to turn as well, sample comments bellow the article available..

  18. Don Stewart says:

    Dear Finite Worlders
    Some interesting numbers in this post from Peak Oil:

    Modern civilization will not fail for a lack of gross energy; it will fail for a lack of net energy. That simple differentiation seems to be ignored by most of the so called pundits. Net energy production (what we refer to as Deliverable Energy to avoid confusion) is falling much faster than gross energy. Deliverable Energy is what powers the non energy goods producing sector of the economy. That is the sector that pays for the production of energy.
    That differentiation is demonstrated by what has happened to petroleum between the years of 2010 and 2015. Gross Energy from petroleum production rose by an average of 1.16% per year over that period. Deliverable Energy fell by an average of 2.3% per year. The consumer side of the economy is being starved for energy (to produce gross energy) and it is starting to show in a declining world economy.
    World trade has slowed to a crawl, monetary systems are under continual stress as Central Banks try every route for reprieve from ZIRP, to QE ad infinitum, to NIRP to stimulate a declining economy. Production is declining, and accumulated world debt continues to spiral into the stratosphere.
    When Deliverable Energy declines to a specific threshold level maintenance of existing infrastructure no longer becomes possible. That threshold level comes many years before actual gross energy production begins to decline. The number of tons of coal mined, or barrels of oil pumped is not the deciding factor on the health of the global economy. It is the amount of energy that is provided to the rest of the economy from those sources. The malaise that the world is now experiencing is resulting not from the inability to produce energy, but from the inability to deliver what it produces.

    Back to me. The numbers are global. The distribution of the pain may very well be the most severe in those parts of the world who are most disadvantaged by the dominant financial system. A small country which is dependent on debts and exports to a dollar monetary economy (or perhaps the EU or Japan) may do very poorly as the central banks in the dominant countries use various mechanisms to suck resources their way. Eventually, of course, the entire global economy collapses.

    Don Stewart

    • bandits101 says:


    • Stilgar Wilcox says:

      “Modern civilization will not fail for a lack of gross energy; it will fail for a lack of net energy. That simple differentiation seems to be ignored by most of the so called pundits.”

      Exactly, precisely accurate. All most people can see is the gross tonnage and they are awed by the glut, the sheer volume. But that is a mirage if one does not calculate net energy. It costs a certain amount not only to bring that product to market but the consumer must be capable of affording that product. Right now the consumer can afford it, but the producer is not making enough to put up sufficient funds to secure future supply. The scales have tipped against exploration, against certain types of non-conventional sources. We are in a predicament at peak.

      • Stefeun says:

        “Modern civilization will not fail for a lack of gross energy; it will fail for a lack of net energy.”

        And for its inability to evacuate the generated Entropy.
        Might even be the most important point.

    • Thanks for this Don.

      I’ve sent this onto my family over in NZ.(I live in Australia).
      I’m the back sheep doomer that’s obsessed by energy depletion in their eyes. However it’s so simple to see how this is playing out without the blinders of cultural disconnection & alienation from reality.
      What you posted couldn’t be any more simply put & if they don’t understand this their even more deluded than I thought……………………………………

      Of course I’m expecting to met by a stony silence from them all & that doesn’t bother me.
      My sister & brother in-law grow flowers for export from New Zealand so.I guess they have a psychologically vested interest in burying their heads in the sand………………………………………………………

  19. Rodster says:

    Excellent article by Charles Hugh Smith: ‘Why Our Financial System Is Like the Titanic’

    “Our financial system is like the Titanic: technologies such as high-frequency trading (HFT) and innovations such as securitization and complex derivatives have enabled major players to construct an enormous, fast-moving financial system that creates the illusion of low risk because the risks are not visible until disaster strikes.”

  20. Ed says:

    New Zealand considers universal income. Way to go Eddy.

    • another nutter who believes we live in a money economy

      but at least he looks the part

      • Fast Eddy says:

      • DJ says:

        I’m not saying UBI would help, but in a lot of countries you already get money for nothing.

        • that’s the big mistake
          you don’t get money for nothing, you get money from mortgaging your kids future.
          eg—Saudi is blowing their oil assets on freebies for everyone, but oil is a once only freak of nature.
          Roughly like finding buried treasure in your garden, then spending the lot on fast women and slow horses—-you appear rich till it’s gone, then your kids are paupers again.
          To maintain the value of money—you must have a constant input of fresh raw energy.

          • DJ says:

            With money for nothing I mean money without offering work or goods in return. But you knew that.

            And many times they’re not mortgaging their kids future, but others kids futures.

          • Saudis are trying to build more refineries hoping to get revenue from added value products, not sure about the scale and time, most likely they continue burn more of their money reserves y/y at least for the moment..

          • daddio7 says:

            The people who are pushing UBI think they know how much wealth is owned by the rich and corporations and how much more of the profits they can skim off every year. If you factor in the money the poor already receive along with the vast overhead in administering all our social programs a flat UBI would cost little more. Also if the poor have more money to spend the economy does better and tax receipts go up.

            That is the argument. What would actually happen is anyone’s guess.

            • DJ says:

              Some of UBIs proponents aren’t idiots. They think the total payout of UBI shouldn’t exceed the current welfare payouts.

              So there wouldn’t be a (larger) distribution from the productive to the unproductive.

              You would make an army of administrators umemployed and you would remove threshold effects that could hinder umemployed from taking on work because that would mean cut benifits.

              But anyway, it won’t happen. UBI would mean money for nothing, not money for being old, or handicapped or …

              And if/when it happens it won’t kick the can far.

            • DJ says:

              You can’t tax the rich. They will just move their money.
              You can’t tax corporations profits. They will send the costs to the customers.
              You can tax the middle class, but maybe not much more.

            • daddio7 says:

              You people have no imagination. The 1% pay 37% of personal income tax. That means they are still here. Are they going to leave if they have to pay 10% more? Apple has over $200 billion cash on hand. If that had been paid as taxes the customers wouldn’t know the difference. Most corporations already charge as much as their customers will pay, they can’t raise prices. Higher taxes will lower their profits but tax is paid on a percent of profit so no one goes bankrupt, they just squeal like they are.

              Corporations can try fancy legal tricks to avoid taxes but a nimble tax authority can stay one step ahead of them and close each loop hole. You want to keep your gold laying goose alive but you have to make sure it isn’t holding out on you.

        • Fast Eddy says:

          We are so fortunate to have Norm commenting here.

          • lol—you can catch me not saying much on the doomstead diner show occasionally with a few other doomers

            • Stefeun says:

              See you on DD,
              Hear you on OFW,
              noticed that, lol

            • Hi Norman,

              I just listened to you on the doomstead diner & it was a great interview/conversation.
              You write & speak in a way that the average person in the street can understand without getting into complicated maths & graphs.
              Sadly the average person in the street (as you mentioned in the interview) doesn’t want to hear it.
              However, I appreciate the effort you put into your work along with the other commentators here.
              I’ve learnt a lot from this site.


            • Thanks Brendon, always good to know my head banging is doing more than just damaging the wall

  21. richard says:

    Coming to a pension fund near you. I have to admit, though, there is a certain elegance, and old-world style, to the way these things are done:
    “Earlier today we reminded readers about the circular (and why note fraudulent conveyance) scheme hatched by JPMorgan to reduce its secured loan exposure to Weatherford, when just two weeks ago none other than JPM underwrote an WFT equity offering in which it sold equity in the company, and which proceeds were promptly used by the company to repay the JPMorgan revolver. “

  22. Whiplash says:

    Report from the Heartland!
    Went to inspect a stretch from Minneapolis, Minnesota all the down to Decorah, Iowa. Have not done this trip for two decades and wished to see how my memory had hold up in this time.
    The greater Minneapolis region has exploded in urban growth up to the city of Hastings, Mn.
    Afterward, we are in industrial agriculturally country, featuring the giants of ADM and Cargill.
    Nameplate logos abound as well as the rolling landmass of cleared fields with mechanized sprayers ready for action in the planting season. Without BAU, these would be deserted and perhaps just blow away. Very few actual humans visiable. Cities of Red Wing, Winona, and Decorah from my memory serves me are pretty much the same. The Luthern College in Decorah has sprouted a solar panel farm with one massive windmill in the background. Proudly they boast of promoting alternative energy. Gail, went to the world Norwegian folk museum there and must write it is indeed a must see if in the area. Interesting exhibits and preserved building of past immigrants from the old country. The institution also has classes in folk crafts of Norway, such as, rosemaling and chip carving. These cities seems to be thriving. Asked about the winter and it was very mild for these parts, just reaching zero and not the usual -25 below.
    People look well fed and content, lots of families about with little children.
    It is incredible to drive long distances and just see miles and miles of barren fields. In the backdrop are the usual herd of Cows.
    Just a passing note, Seeds Savers is also located outside of Decorak, IA., as well as, the Laura Ingalls homesite (one of a few…Little House on the Prairie). Also, the Pottery Museum in Red Wing and the Polish Museum in Winona are worth a visit. Bye

    • I am well familiar with the area. My parents lived not far from Decorah, IA for many years (after I left home), and I have siblings who graduated from the Lutheran college there. One sister even taught there briefly.

  23. Rodster says:

    Gotta love this quote from Former NBA Star Sir Charles Barkley:

    “All politics is rich people screwing poor people. Poor people are too stupid to know they are just chess pieces in a game. All the poor white people, all the poor black people and all the Hispanics, they’re all in the same boat.”

  24. Yoshua says:

    The offshore producers seems to be the ones that are hurting the most in this oil price collapse.

    Offshore Drillers: Do Not Throw in the Towel

    Exclusive: Petrobras to cut five-year investment plan one-fifth to $80 billion – sources

    • Thanks! No one can imagine a world without oil (also without people). They keep pumping,regardless of the indications.

      Future investments are something else. If the money isn’t there, they have to be cut.

  25. Veggie says:

    More on Saudi’s shift to becoming a major refiner…

  26. it just occurred to me— how will Finite Worldsters be able to have a reunion dinner post collapse?

    • Crusty says:

      No doubt, Fast Eddy, will host and welcome us all with open arms. He will insist we can stay for as long as we care and consume as much as we can hold. After all, it is all on the credit card and pre BAU. The only problem…how do we get there?

    • jarvis says:

      maybe by shortwave radio? should we agree on a frequency now?

    • We don’t know for sure. Maybe there is a heaven, and we can reconnect there.

      • Stilgar Wilcox says:

        Elanor Roosevelt said, “It’s just as likely we live multiple lives as it is only one life.”

        That bodes well for a reconnection in the 5th dimension before embarking on the next climb up after collapse in the 3rd dimension. If we keep repeating the same civilizational ascent cycle we may eventually learn enough to smooth out the usual stages so there doesn’t have to be collapse? Or maybe that’s just a natural eventual outcome to the action of growth.

      • Ed says:


        • doomphd says:

          Gail noted above that there’s some underlying math and physics (or is it physics and then math?) to explain such behavior, but the resets are usually so deep that the same mistakes get made over and over again. Like that Drew Barrymore movie where she has permanent amnesia. Collectively, we’re no better than a herd of your favorite barnyard animal, with iPhones.

      • Fast Eddy says:

        I wonder if they’ll let me in 🙂

  27. richard says:

    About that 6.5% – 7% Chinese GDP growth forecast :
    “Total power generation in China fell for the first time in decades last year, exposing a huge nationwide capacity surplus, especially in the coal-dominated thermal power segment.”
    Maybe some MWh got lost in translation …

    • doomphd says:

      Thanks Brendon, FE, et al. It sounds like China is key and we have at most 12 months or so left of BAU. Not a lot of time, but at the rate we are chewing through the planet, perhaps long enough. The destruction is simply apalling.

      I quote a human population-over-time graph made by William Stanton a lot in my lectures (hat tip to Nate Hagens). He has human population peaking at about 7.5 Billion in about 2020. It was just an educated guess, but perhaps he’s right on target. The sharp population drop happens in about 20-30 years and he has a level off at 500 million in about 2100, but zero could also be in the cards. It’s a dashed line with queston marks.

      • richard says:

        @doomphd – Despite all the potential problems, I do not place China in the “spinning plate” sector just yet, because I think it is too much inbuilt resilience.
        The end of BAU is hard to forecast because of the interaction between three components: the declining returns of the real world; the complex world of the economy and its desire for growth; and the changing web and complexity of interactions between FIRE agents.
        I *think* the key event in the near medium term is the end of Gahawar, the steepness of its decline, and whether the financial system anticipates its collapse. My guess for that is 2020.

        • Veggie says:

          “I *think* the key event in the near medium term is the end of Gahawar, the steepness of its decline, and whether the financial system anticipates its collapse.”

          You may be right.
          Water cut at Ghawar has been increasing steadily. Saudi Aramco is currently building two mega refineries to produce finished product instead of selling raw crude.
          An interesting strategy if production capacity is truly falling.
          This would allow the kingdom to produce less oil, but still receive high revenues by selling the higher priced refined goods such ad diesel fuel and gasoline.
          Maintaining income as crude output falls.
          Here I speculate…
          The current strategy of gaining as much market share as possible prior to a decline in production would give them maximum possible income near the end of sustainable production at these levels. Production could then start falling as the big refineries come on stream with the higher profit margins from lower crude production rates.

          As the late Matt Simmons used to say…
          When Ghawar goes into decline, so does the whole world”.


        • When Gahawar declines depends on price, as much as anything. If oil price is below $20 per barrel, it may decline pretty quickly. There won’t be enough tax money to keep the population from revolting.

          • richard says:

            I was, to some extent, using Gahwar as a placeholder for all the old, giant oil fields currently on life-support. IIRC, Gahawar has produced at a steady 5mm bpd, with production facilities and recovery efforts ramped up to manage the flow.
            Sooner or later the irriesistible force of money meets the immovable rock of depletion, and things become unaffordable.

            • Saudi is running out of oil and water simultaneously:


              those figures above might be off by a few years either way, but the general consensus is within 15 years from now. But that timespan doesn’t give the right picture. Oil and water won’t suddenly stop. Instead supplies will get tighter and tighter. There will be a dawning awareness that gold taps do not guarantee constant water flow, and that vanity towers 500 ft high can only remain viable if water can be pumped up them, and sufficient power can be generated to power the lifts. Sounds so obvious, but I’m guessing that those who ordered their construction assumed that energy availability was going to be infinite. Right now, Saudi is the most profligate user of water anywhere in the world, simply because they have the available energy to pump the stuff out of the ground, or desalinate it. They also have to use a third of all the oil they produce just to sustain the viability of the nation itself.
              They have no other asset base by which they can continue to exist.
              Energy availability and water availability are inextricably linked, but the vast majority of Saudis fail to grasp that.

              So as lack of those vital commodities tightens the screw of austerity on the ordinary Saudi citizen, there will be civil unrest, then violent revolution as the structure of the nation goes into meltdown.
              The endgame of course, is that the Saudis return whence they came, to become goat herders and camel traders. This is not a pleasing prospect. 30% of Saudis are under 30, and the unemployment rate for that group is around 30%. They survive only through oil supported state handouts. They are the population group that will kick off the unrest and revolution when those handouts stop. As bad as that sounds, with the entire economy based on oil production, the employment of almost everyone can only function as long as the oil continues to flow.

              A nation less than a century old, having a population of 1 or 2 million before oil was discovered, now with a population of nearly 30 million, virtually all of whom are unemployable in any sense that we understand employment.

              They have an expectation of a gold plated lifestyle going on into infinity, because their god put an infinite quantity of oil under their desert patch.
              If I was a Saudi, and allowed to think for myself, I would be seriously frightened.

            • Stefeun says:

              “supplies won’t suddenly stop”
              “availabilities inextricably linked”

              Excellent points, Norman.
              Tipping-points are to be guesstimated from there.

        • Stilgar Wilcox says:

          “Despite all the potential problems, I do not place China in the “spinning plate” sector just yet, because I think it is too much inbuilt resilience.”

          Maybe, maybe not, as freshly laid off miners clash with police in China:


    • I see, “Crude production [for China] fell 0.6 percent in January and February to 34.11 million tones, or 4.15 million bpd.” Perhaps the low price message is starting to get around.

  28. Stilgar,

    So very well put………………….

    I do hope it’s financial ruin first & soon as this culture is BS & I’m over the hollowness, the falseness, the shallowness & the individualistic selfishness of the whole rotten castle of arrogance that this ignorant load of buffoons believes is the only way to live, if they think at all & I sincerely doubt they do……………………………

    This Leaning Tower of Pisa culture of delusion is desperately in need of an out of control D9 to run into it…………………………………………………….

    • Stilgar Wilcox says:

      I’m right there with you on that one, Brendon. The sooner the better and looking forward to seeing that delusional, smug look vacate the premises. Time to wake up people…

  29. dolph911 says:

    You actually don’t need huge amounts of energy for BAU. You need some, true.

    What you need is:
    1) food production and distribution
    2) make work
    3) propaganda
    4) pricing mechanisms to keep the hoi polloi away from desirable real estate, healthcare, etc.

    All in place in America already. But, it does get tiring. I for one, like food, but I don’t care for propaganda, which makes living in America so frustrating, and explains so much of the anger.

    • Fast Eddy says:

      What you describe is ‘BAU Lite’ — as has been pointed out many times on FW — that is not possible.

      If BAU is not constantly growing — it collapses — and what is left is a very primitive state…. one where the only fuel source available in abundance — at least for a short period — is wood.

      Gail – if there is an article in the archives that deals with this it would be useful to post a link to it

      • doomphd says:

        FE, isn’t the timing of the collapse more important than what happens when it does? I’m convinced it will be bad, but how much longer can BAU last? Any guesses, ideas? Can we get some handle on it?

        • Doomphd

          I believe it depends on what you perceive happening in the world, how you filter it & what your own optimistic/doomer setting is at.
          I see here at OFW the opinions vary from the next couple of years to decades down the track, a fast or slow collapse.
          From my own perspective I’m inclined toward the rapid collapse only because everything is now totally connected via complicated technology & cheap energy.
          By rapid collapse I’m thinking by 2030 BAU will be pretty much spluttering or over.

          These are my feelings & thoughts only & i’d never get into a discussion with folk on this site about the intricacies of it all as I simply don’t understand the mechanics of economies, climate change etc…….

          It’s a gut feeling, an intuition & I feel safe in my assumptions knowing humanity is but one species in billions that lends me my belief that we will soon be gone & I’m sure the rest of nature will heave a collective sigh of relief once humanities egotistical alienation has run its course.

          I guess if it takes 5 years or 200 years it’s really but a blip in geological time & goes to show just what a twisted, perverted, miserable, insane & destructive ape we really are to have decimated a beautiful planet in such a short space of time. ……………………

          • Stilgar Wilcox says:

            “I guess if it takes 5 years or 200 years it’s really but a blip in geological time & goes to show just what a twisted, perverted, miserable, insane & destructive ape we really are to have decimated a beautiful planet in such a short space of time. ……………………”

            Get your giant trucks and SUV’s here. After market mufflers available to make any vehicle sound like a big rig. Fill up with supreme and get some junk food. Watch the latest transformers movie, drink some beer go out and kill a rare animal to stuff and put on the wall of shame. Go out late at night and drive over nocturnal creatures. Popcorn, peanuts, ammo, megaphones, iphones, apps, dvd’s, corn syrup sweetened everything to induce type II diabetes. Ignore your sore kidneys – drink lots of soda. Ignore your arteries – eat lots of pork. Ignore your hearing loss – pump up the volume. Laugh at people that are different and generally be obnoxious. Earth here, have lots of fun while ignoring important environmental effects from destructive behavior. This is a time limited offer (until financial ruin or environmental or both).

        • Fast Eddy says:

          The economy must grow or it will collapse …

          If the US is the cleanest shirt in the laundry …. then the global economy is definitely not growing…

          Japan, the EU and the US are pushing on strings… difficult to say if stimulus in China is having any impact…

          I would be pleasantly surprised if we made it to the end of the year….

          For Stocks, a Reality Too Ugly to Behold?

          The simple fact is that corporate earnings data is out there for everyone to see, but no one wants to see it. Instead, everyone wants to see and believe the sweet fairy tale that Wall Street and Corporate America spin with such skill just for us, because if everyone believes that everyone believes in this fairy tale, even knowing that it is a fairy tale, it will somehow lead to ever higher stock prices.

          This is part of a phenomenon we’ve come to call “Consensual Hallucination.”

          But that fairy tale got spun to new fanciful extremes in 2015.

          Revenues of the S&P 500 companies fell 4.0% in the fourth quarter and 3.6% for the year, according to FactSet, with most of the companies having by now reported their earnings. And these earnings declined 3.4% in Q4, dragging earnings “growth” for the entire year into the negative, so a decline in earnings of 1.1%.

          More http://wolfstreet.com/2016/03/13/consensual-hallucination-stocks-reality-too-ugly-to-behold/#comment-34376

          • “This is part of a phenomenon we’ve come to call “Consensual Hallucination.”

            And the zombies will all pat each other on the back when they buy a new boat or SUV & slobber like deranged imbeciles (which in fact they are) into their Cafe Latte’s……………

          • Rodster says:

            “The economy must grow or it will collapse….”

            I would insert the word “Global” because everything is now so interconnected that if one leg of the global economy is doing badly, it has a drag on the rest of the world.

            • Stefeun says:

              Yes Rodster,
              Global, and globally bonded by debt/finance.

            • Stefeun says:

              Which also means that the risk (one form of entropy) is “distributed” as widely as possible.

              As it isn’t evacuated fast enough, it eventually drowns the whole system.

          • How about this article:


            It sounds like debt-financed stock-buybacks are what are financing the rally.

            • Stilgar Wilcox says:

              “It sounds like debt-financed stock-buybacks are what are financing the rally.”

              I’m not surprised. They set up a situation in which the CEO’s got bonuses for corporation stock increases. Once one corp. did it, the others followed suit. The incentive was placed directly in the path of stock buybacks – the stocks got bought back – the stock price shot up – the CEO’s got their golden goose bonuses – but then once the stocks had risen to the peak of what the stock market could muster, then they realized a problem – how to keep the stock value high? Now those same buyback corp’s have to keep buying back stock to keep the price up where it is. Live by the buyback – die by failure to buyback, so they are stuck having to buyback their own stock or risk losing stock valuation. At some point they will collectively realize the folly of their strategy, stop buying back and down goes the stock market into major correction territory.

            • Fast Eddy says:

              ‘whatever it takes’

        • Stefeun says:

          Timing is tricky because, of course, there are so many parts in the system,
          but OTOH, since we’re riding exponential curves, in all logic we should have exploded years ago.

          It looks like there are inbuilt brakes in most phenomena, sort of negative feedback loops that try to draw values back to nominal, thus delaying the effects.
          In physics it’s known as the sigmoid curve (S-shaped), aka “logistic function”.

          Moreover, as shown in the paper by Ulanowicz (see previous Gail’s article), this effect could very well have an important role in the adaptation of the structures to their changeing environments, such as reduction in energy inputs.

          In our case the drop will be too sudden and important for the system to adapt, anyhow, but in the meantime this may partly explain why we’re still alive, surprisingly.

          • The players seem to have found ways around the natural, “Oil price goes down a little, oil production goes down a little.” So we reach, “Oil price goes down a lot, oil production goes down a lot–eventually.”

            If the system can’t adapt to the changed conditions, eventually the result will be clear to all.

      • Stefeun says:

        Yep, try & type “steady state” (or else) in OFW search engine top of the page.

    • Actually, you need a whole lot more than that. In order to have food production and distribution, you have to have road system maintenance, fuel and spare parts for vehicles, and an operating electrical grid system. In order to have the operating electrical grid system, you need quite a few industries operating, including computers, Internet, portable phones, quite a few metals, and glass. The pricing mechanism only works if there is enough energy in the system, to keep the “balloon inflated.” If not, would-be laborers don’t have jobs. This is the problem we have now.

      • despite all the evidence to the contrary, the myth persists that BAU will continue with a few minor difficulties.
        “We will need food production and distribution” is this back to horse and cart again.???

  30. Artleads says:

    DENVER POST (Today or yesterday)
    Page 1K, 5K
    RIGS GO QUIET IN D-J BASIN – Inactive Production
    Producers Plan To Cut Investment In Capital Spending By Half
    (Charts): Grinding To A Halt – Nine of the most active petroleum producers in Colorado’s Denver-Julesburg Basin expect to cut their capital spending by half in 2016: Anadarko Petroleum, Noble Energy, Encana, Bonanza Creek, PDC Energy, Bill Barrett, Whiting, Synergy, Carizzo
    (Graphs): Colorado’s Endangered Rigs – The number of rigs drilling for oil and gas in Colorado is down by more than three-quarters since oil prices began their steep descent in the fall of 2014.
    (look online for this article or see hardcopy — this article was too extensive to type)

  31. jarvis says:

    Here’s some housing information that viewed with knowledge gained from reading Finite World you will have a far deeper understanding of what is really going on. Here on the west coast of Canada our real estate has gone from a sellers market to a buyers market to a totally insane market in the course of 3 years. Here’s what I mean: a house in Vancouver that would fetch $300K in most places of north American lists for $7 million, pretty insane right? It sells for over $8 million. Over in Victoria on Vancouver Island 75 miles away from this craziness a 100 year old house that I happen to be familiar with because an uncle lived there lists for $1.2 million and goes for $1.3 but the newspaper also reported who the contending buyers were. Usually they are all from China but they were from France, Germany, California and a few locals. With Vancouver have the biggest year over year increase of 26% in housing prices in the world I think it’s obvious what’s going on – people are looking for a safe place to park their wealth and the vast majority are coming from China. The thing is I doubt it will be any safer here than in Hong Kong but we do have certain things going for us: we are in the sweet spot in North America for climate change, our governments have balanced budgets, our populations are relatively low ( about to get a lot lower) and we get 93% of our electric power from renewable hydro electric and our economy is growing at 2.5% Fast eddy picked New Zeeland I chose Vancouver Island. I can say that now because unless you have many millions you can’t afford it here.

    • Fast Eddy says:

      I have read that this is related to money laundering and getting capital out of china at any cost…

    • Crusty says:

      Well, Jarvis, now you have no worries concerning any bank note you are holding or interest increase payments….lucky you….

      • jarvis says:

        On the contrary I know I will lose big time! My source of income is from mortgage lending so I’m prepared to tear up my mortgage agreements when TSHTF and say good luck . Really what choice do I have?

    • Interesting. Some folks have picked out Canada to move to.

      • Crusty says:

        Question is when will Fast Eddy move again? If BAU last more than two more years I see him finding some reason to pull up stakes and relocating. Perhaps we all should start a friendly pool to wager?

  32. Fast Eddy says:



    Does anyone really think that when things start to get really bad — people are just going to sit tight and wait to die…

    I don’t think so.

    They are going to be pissed off – and they are going to go looking for people to blame (and there will be no lack of leadership pointing them at minorities…) — and they are going to go looking for food.

    And they are going to tear your head off if you have what they want and you don’t give it to them.

    You’ll be amazed at how the pleasant Sunday market atmosphere that you are used to in your country town quickly turns into Rwanda — when people are hungry and there is no security.

    Even Mr Jones who is immaculate in his summer collection outfit from Brooks Brothers will turn into a wild animal when his wife and children are not fed…

    Koombaya only works in the land of plenty … in the land of oil and gas and coal and BAU.

    When that vapourizes — well… that signals a whole new ball game.

    Civility is quickly replaced by barbarism.

    As Joseph Conrad observed… civilization is but a thin veneer covering our savage nature…

    And I will add…. the veneer is oil-based….

    • Yoshua says:

      Germany evolved from Goethe, Bach and Kant… to Himmler, Goebbels and Hitler… this only proves one thing… Darwin was wrong !

      • Fast Eddy says:

        Perhaps if Germany was not brought to its knees by reparations after WW1… Hitler would have been an artist … Goebbels a German Don Draper…. Himmler chief of police of Berlin…

        As circumstances change so do individuals…

        I expect that the Koombaya Krowd here who insist that we will get along — will turn into killers at some point …. the eyes will open — the gloves will come off — and the knives and bullets will fly…

        • Yoshua says:

          Yes, I’m afraid that you are right.

          The prime minister of Finland almost got beaten up today by an angry “mob” after budget cuts on education. People are a bit nervous here, it’s almost as if they “know”.

          Great news ! From 2020 Finland will only build zero energy homes ! I guess that that can only mean zero homes ?

      • xabier says:


        What the German tragedy in the 20th century perhaps proved was that High Culture, like Religion, usually has no transformative power: only a true spiritual path has such value – the slow and painful transformation of the individual soul.

        • The USA is also a civilised nation—but in the baying mobs that fill the halls of Trump, you hear the recruiting anthems that filled the ranks of the SS.
          Maybe not Trump this time—but when things get really bad?

        • Christian says:


          Slow and painful, but not individual

    • True, but you are as usual a little bit premature.

      I’m afraid you are deficient on hands on experience in transforming regimes.There is enough coal and natgas – condensates to run somewhat totalitarian-re-distributive style societies for decades, including agriculture, transport, basic healthcare etc. Yes, the shops will be most of the time semi-empty, gadgets mania will be replaced by the same universal products, life expectancy and health care availability will go down, but the human farm would soldier on. Simply more of the Cuban or DDR “experience” for the westerners for a change as well… , lolz.

      I’ll begin to seriously worry only if either ready to lunch nuclear weapon system hastily start to shift to new locations/closer around borders of those various top dogs and/or fossil energy depletion gets really serious, i.e. ~20-30% fall in a decade for the whole spectrum (not only oil). And this is most likely decades away.

      For the meantime enjoy the overflowing food freezers and shelfs at your local supermarkets, marvel at the optimism and cockiness of your neighbors flipping new BMWs after 3.5years of lease for the next great must have model and so on. Life is great, banksters are now buying not only bonds, but equity, .. and when they really monetize everything, that’s not the end at all! The system will just go into fully crony-nationalized economy mode, problem solved. Yes, along the process there will be wars, revolutions and uprising of various intensities, but nothing major to derail the above described general trend, as always your mileage may vary.

      Sensible people do what they can, namely educate children and grandchildren about their future, easy the pain. That’s all she wrote, cheers.

      • Christian says:

        Yes, FE is Canadian. In many ways Canada is a wonderful country, but it lacks very much of “real” history

      • Fast Eddy says:

        In order to continue to produce the energy you speak of we will require BAU to remain in play.

        You can’t just put a gun to BAU’s head and say ‘produce energy’

        This has explained a thousand times previously on FW so all I am going to tell you is you are wrong – if you want to find out why read the archives.

      • xabier says:


        A view which is likely correct, unless we are crushed on a planetary scale by climate change.

        We can find examples everywhere of societies – today and historically – which no sane person would wish to live in: with an appalling quality of physical and cultural life, steeped in corruption, civil disorder, injustice, hunger, short life-expectancy and endless propaganda, which are just going on and will do for so long as very basic energy requirements are met.

      • “There is enough coal and natgas – condensates to run somewhat totalitarian-re-distributive style societies for decades, including agriculture, transport, basic healthcare etc”

        Your childish view of the world beggars belief. How is there to a ‘redistribution’ when there is no surplus to redistribute? How can there be a totalitarian state when there is no ‘state’ to oppress?

        • I guess you have a serious problem with the redistribution concept in wider historical perspective, which I tried to stress here on numerous occasions. The Cuban/DDR examples were used clearly as a shortcut – relatively recent examples without going into complexities of much older historical periods.

          Specifically, war-like conditions, sanction regimes-blockades, post revolutionary chaos etc. have had forced redistribution numerous time during history. It’s not about “surplus” it’s simply dividing up the total sum of resources (private, state, church, foreign investments, ..) at given time according to the will and priorities of the ruler. So, in simplistic terms it could be for example divided as 9/10 resources going to the oppressive state apparatus and 1/10 to the peasants barely hanging on till the next day. Is it destructive for most of the aspects (market, culture, freedoms,..) we deemed “as civilized life” yes, but nevertheless it always goes down to it in the worst of times.

          Perhaps you are not up to the task to spot the nuances here, but basically “instadoomers” faction on this forum believe in rapid snap into post civilized chaotic, perhaps anarcho-tribal conditions, while for me as a student of history and with “advanced point of age hard learned lessons” I see some intermediate steps going first, most notably such an interlude of openly oppressive governments, incorrectly called BAU-lite, which is not all, it’s “managed descent” and desperate attempt at keeping “vanishing old world” complexities at its worst.

      • ” Simply more of the Cuban or DDR “experience”

        You can’t name a functioning state that wasn’t dependent on surpluses of foreign energy or capital. Cuba was dependent on foreign aid and in coming to terms with the withdrawal of it has had to open up ( to tourism for example). East Germany relied on cheap Russian oil and foreign aid.

        Your whole premise of ‘locked-down’ elite control defies the reality the modern states never exist completely independent of one another. Or are you presupposing some worldwide authoritarianism? If so you are denying the nationalist roots that underpin the machinations of authoritarianism and are arguing for a completely new development in human politics and as such are on very shaky ground.

    • Rodster says:

      Yoshua says: “Strikes and workers’ protests multiply in China, testing party authority”

      Hmm, I came across a Zero Hedge article regarding Hybrid Wars. I wonder if the US is actually “HAPPY” that China is slowing down and civil unrest is on the rise?


      • Yep, it’s the same stuff of hyping “internal dissent” they tried notably in 1980s inside Soviet satellites and Russia as well, and on other instances globally before/after that with various degree of success. There is global armada of “NGOs, dissidents, artistic personalities, ..”, all lonely voices leveraged up by megaphones of “unbiased western media” – the budgets on these essentially propaganda projects are certainly well into billions yearly. With pretty good return on that if look 30yrs back (and longer) of spreading western finance. Are the Chinese stupid enough to fall for it at this junction or not advised by contemporary Russians how to deal with it, I doubt it very much. After all China did swallow Hong Kong not the other way around, or was there something of “blood contagion” going on as China enlisted the arena of top global financial players afterwards?

        That being said, there is surely a genuine potential for civil unrest as the relocation of peasants into factories-dormitories was done or gargantuan scale and without growth, it’s all a powder keg. I think they are trying a lot of things to counter it, including shutting down the most horrible industrial places, setting up pan-Asian trade block coordination (SCO) and independent bank money wire system, hastily exchanging piled up USD for FDIs around the globe etc. Is it going to be enough and fast enough, most likely not, but should China blow up into pieces and chaos for any reason before the western core, that might present some can kicking time allowance for some of the old war players.

        Perhaps we are going to witness some of these milestones and direction confirmation in relatively near future.

        • Your posts are cringeworthy.

          I feel embarrassed to have read them. Like I should wash my eyes afterwards…

          If quality of writing is a standard to base quality of thinking then your thoughts are random unfounded drivel not worthy of attention.

          • Thanks for your eloquent and above all so factual response.

            And by the way aren’t you or your circles by any chance fitting the very description of “..NGOs, dissidents, artistic personalities, .” on someone’s paycheck doing those deeds against the well being of given societies ?

    • Glad I am not over in China this year!

Comments are closed.