Our economic growth system is reaching limits in a strange way

Economic growth never seems to be as high as those making forecasts would like it to be. This is a record of recent forecasts by the International Monetary Fund:

Figure 1. World GDP Forecasts by the International Monetary Fund.

Figure 1. World GDP Forecasts by the International Monetary Fund.

Figure 2 shows world economic growth on  a different basis–a basis that appears to me to be very close to total world GDP, as measured in US dollars, without adjustment for inflation. On this  basis, world GDP (or Gross Planetary Product as the author calls it) does very poorly in 2015, nearly as bad as in 2009.

Figure 2. Gross Planet Product at current prices (trillions of dollars) by Peter A. G. van Bergeijk in Voxeu.

Figure 2. Gross Planet Product at current prices (trillions of dollars) by Peter A. G. van Bergeijk in Voxeu, based on IMF World Economic Outlook Database, October 2015.

The poor 2015 performance in Figure 2 reflects a combination of falling inflation rates, as a result of falling commodity prices, and a rising relativity of the US dollar to other currencies.

Clearly something is wrong, but virtually no one has figured out the problem.

The World Energy System Is Reaching Limits in a Strange Double Way

We are experiencing a world economy that seems to be reaching limits, but the symptoms are not what peak oil groups warned about. Instead of high prices and lack of supply, we are facing indirect problems brought on by our high consumption of energy products. In my view, we have a double pump problem.

Figure 3. Double gasoline pump from Torrence Collection of Auto Memorabilia.

Figure 3. Double gasoline pump from Torrence Collection of Auto Memorabilia.

We don’t just extract fossil fuels. Instead, whether we intend to or not, we get a lot of other things as well: rising debt, rising pollution, and a more complex economy.

The system acts as if whenever one pump dispenses the energy products we want, another pump disperses other products we don’t want. Let’s look at three of the big unwanted “co-products.”

1. Rising debt is an issue because fossil fuels give us things that would never have been possible, in the absence of fossil fuels. For example, thanks to fossil fuels, farmers can have such things as metal plows instead of wooden ones and barbed wire to separate their property from the property of others. Fossil fuels provide many more advanced capabilities as well, including tractors, fertilizer, pesticides, GPS systems to guide tractors, trucks to take food to market, modern roads, and refrigeration.

The benefits of fossil fuels are immense, but can only be experienced once fossil fuels are in use. Because of this, we have adapted our debt system to be a much greater part of the economy than it ever needed to be, prior to the use of fossil fuels. As the cost of fossil fuel extraction rises, ever more debt is required to place these fossil fuels in use. The Bank for International Settlements tells us that worldwide, between 2006 and 2014, the amount of oil and gas company bonds outstanding increased by an average of 15% per year, while syndicated bank loans to oil and gas companies increased by an average of 13% per year. Taken together, about $3 trillion of these types of loans to the oil and gas companies were outstanding at the end of 2014.

As the cost of fossil fuels rises, the cost of everything made using fossil fuels tends to rise as well. Cars, trucks, and homes become more expensive to build, especially if they are intended to be energy efficient. The cost of capital goods purchased by businesses rises as well, since these too are made with fossil fuels. Needless to say, the amount of debt to purchase all of these goods rises as well. Part of the reason for the increased debt is simply because it becomes more difficult for businesses and individuals to purchase needed goods out of cash flow.

As long as fossil fuel prices are rising (not just the cost of extraction), this rising debt doesn’t look like a huge problem. The rising fossil fuel prices push the general inflation rate higher. But once prices stop rising, and in fact start falling, the amount of debt outstanding suddenly seems much more onerous.

2. Rising pollution from fossil fuels is another issue as we use an increasing amount of fossil fuels. If only a tiny amount of fossil fuels is used, pollution tends not to be much of an issue. Air can remain safe for breathing and water can remain safe for drinking. Increasing CO2 pollution is not a significant issue.

Once we start using increasing amounts, pollution becomes a greater issue. Partly this is the case because natural sinks reach their saturation point. Another is the changing nature of technology as we move to more advanced techniques. Techniques such as deep sea drilling, hydraulic fracturing, and arctic drilling have pollution risks that less advanced techniques did not have.

3. A more complex economy is a less obvious co-product of the increasing use of fossil fuels. In a very simple economy, there is little need for big government and big business. If there are businesses, they can be run by a small number of individuals, with little investment in capital goods. A king, together with a handful of appointees, can operate the government if it does not provide much in the way of services such as paved roads, armies, and schools. International trade is not a huge necessity because workers can provide nearly all necessary goods and services with local materials.

The use of increasing amounts of fossil fuels changes the situation materially. Fossil fuels are what allow us to have metals in quantity–without fossil fuels, we need to cut down forests, use the trees to make charcoal, and use the charcoal to make small quantities of metals.

Once fossil fuels are available in quantity, they allow the economy to make modern capital goods, such as machines, oil drilling equipment, hydraulic dump trucks, farming equipment, and airplanes. Businesses need to be much larger to produce and own such equipment. International trade becomes much more important, because a much broader array of materials is needed to make and operate these devices. Education becomes ever more important, as devices become increasingly complex. Governments become larger, to deal with the additional services they now need to provide.

Increasing complexity has a downside. If an increasing share of the output of the economy is funneled into management pay, expenditures for capital goods, and other expenditures associated with an increasingly complex economy (including higher taxes, and more dividend and interest payments), less of the output of the economy is available for “ordinary” laborers–including those without advanced training or supervisory responsibilities.

As a result, pay for these workers is likely to fall relative to the rising cost of living. Some would-be workers may drop out of the labor force, because the benefits of working are too low compared to other costs, such as childcare and transportation costs. Ultimately, the low wages of these workers can be expected to start causing problems for the economic system as a whole, because these workers can no longer afford the output of the system. These workers reduce their purchases of houses and cars, both of which are produced using fossil fuels and other commodities.

Ultimately, the prices of commodities fall below their cost of production. This happens because there are so many of these ordinary laborers, and the lack of good wages for these workers tends to slow the “demand” side of the economic growth loop. This is the problem that we are now experiencing. Figure 4 below shows how the system would work, if increasing complexity were not interfering with economic growth.

Figure 4. How economic growth works, if increased complexity is not interfering.

Figure 4. How economic growth works, if increased complexity is not interfering.

Also see my post, How Economic Growth Fails.

The Two Pumps Are Really Energy and Entropy

Unlike the markings on the pump (gasoline and ethanol), the two pumps of our system are energy consumption and entropy. When we think we are getting energy consumption, we really get various forms of entropy as well.

The first pump, rising energy consumption, seems to be what makes the world economy grow.

Figure 4. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

Figure 5. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

This happens because the use of energy products allows businesses to leverage human labor, so that human labor can be more productive. A farmer with a stick as his only implement cannot produce much food, but a farmer with a tractor, gasoline, modern implements, hybrid seeds, irrigation, and access to modern roads can be very productive. This productivity would not be available without fossil fuels. Figure 4, shown earlier, describes how this increased productivity usually gets back into the system.

The second pump in Figure 3 is Entropy Production. Entropy is a measure of the disorder associated with the extraction and consumption of fossil fuels and other energy products. Entropy can be thought of as a loss of information. Once energy products are burned, we have a portion of GDP in the place of the energy products that have been consumed. This is why there is a high correlation between energy consumption and GDP. As energy products are burned, we also have an increasing pile of debt, increasing pollution (that our sinks become less and less able to handle), and increasing wealth disparity.

Figure 6. Chart by economist Emmanuel Saez based on an analysis IRS data, published in Forbes.

Figure 6. Difference in US income growth patterns of the top 10% versus the bottom 90%. Chart by economist Emmanuel Saez based on an analysis of IRS data, published in Forbes.

Beyond the three types of entropy I have mentioned, there are other related problems. For example, the current immigration problem is at least partly a problem associated with increased complexity and thus increased wealth disparity. Also, low oil prices are a sign of a loss of “information,” and thus also a sign of growing entropy.

Our Energy/Entropy System Operates on an Energy Flow Basis

I think of two different kinds of accounting systems:

  1. Accounting on a cash flow basis
  2. Accounting on an accrual basis, such as GAAP

With respect to energy, we burn fossil fuels in a given year, and we obtain output of renewable energy devices in a given year. We eat food that has generally been grown in the year we eat it. There is virtually no accrual aspect to the way the system works. This is very different from the accrual-basis financial statements prepared by most large companies that allow credit for investments before the benefit is actually in place.

When it comes to promises such as Social Security benefits, we are, in effect, promising retirees a share of energy production in future years. The promise is only worth something if the system continues to work well–in other words, if the financial system has not collapsed, pollution is not too great a problem, and marginalized workers are not revolting.

Governments can print money, but they can’t print resources. It is the resources, particularly energy resources, that we need to run the economy. In fact, we need per capita resources to be at least flat, or perhaps increasing.

Figure 7. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.

Figure 7. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.

Printing money is an attempt to get a larger share of the world’s resources for the population of a given country. Printing money usually doesn’t work very well, because if a country prints a lot of money, the currency of that country is likely to fall relative to currencies of other countries.

What Causes the System to Fail? Too Little Energy, or Too Much Entropy?

In an interconnected system, it is sometimes hard to understand what causes the system to fail. Is it too little production of energy products, or too much entropy associated with these energy products? Astrophysicist Francois Roddier tells me that he thinks it is too much entropy that causes the system to fail, and I tend to agree with him. (See also “Pourquoi les économies stagnant et les civilizations sʼeffondrent”  by Roddier in Économie de l’après-croissance.) The rising amount of debt, pollution, and income inequality tend to bring the system down, long before “running out” of energy products becomes a problem. In fact, the low commodity prices we are now experiencing appear to be part of the entropy problem as well.

Can Renewable Energy Be a Solution?

As far as I can see, renewable energy, unless it is very cheap (like hydroelectric dams were many years ago), absolutely does not work as a solution to our energy problems. The basic issue is that the energy system works on a flow year basis. To match energy-in versus energy-out, we need to analyze each year separately. For example, we need to match energy going into making offshore wind turbines against energy coming out of offshore wind turbines, for each calendar year (say 2016). To keep the net energy flow positive, there needs to be an extremely slow ramp-up of high-cost renewable energy.

In a way, high-cost renewable energy is very close to entropy-only energy. Because of the high front-end energy consumption and the slow speed at which it is paid back, high-priced renewable energy generates very little energy, net of energy going into its production. (In some instances, renewable energy may actually be an energy sink.) Instead, renewable energy generates lots of entropy-related products, including increased debt and increased taxes to pay for subsidies. It also adds to the complexity of the system, because of the variable nature of its output. Perhaps renewable energy is less bad at generating pollution, or maybe the pollution is simply of a different type. Ultimately, it is a problem, just as any other type of supplemental energy is.

One problem with so-called renewable energy is that it can’t be expected to outlast the system as a whole, unless it is part of some off-grid system with backup batteries and an inverter. Even then, the lifetime of the whole system is limited to the lifetime of the shortest-lived necessary component: solar panels, battery backup, inverter, and the device the user is trying to run with the system, such as a water pump.

There are currently many stresses on our economic system. We can’t be certain that the system will last very long. When the system starts collapsing, it is likely to take grid-connected electricity systems with it.

What Is the Connection to Energy Returned on Energy Invested (EROEI)?

If a person believes that energy is a one pump system (the left pump in Figure 3), then a person’s big concern is “running out.” If a person wants to maximize the benefit of energy resources, he will choose energy resources with as high an EROEI as possible. In other words, he will try to get as much energy out per unit of energy in as possible. For example, one estimate gives EROEI of 100 to 1 for hydroelectric, 80 to 1 for coal, and much lower ratios for other fuels. Thus, a mix that is heavy in hydroelectric and coal will stretch energy supplies as far as possible.

Another place where EROEI is important is in determining “net” energy, that is, energy net of the energy going into making it.

As I mentioned above, energy per capita needs to be at least level to keep the economy from collapsing. In fact, net energy per capita probably needs to be slightly increasing to keep the economy growing sufficiently, if “net” energy is adjusted for all of the effects that simultaneously impact the energy needs of the economy, apart from energy used in producing “normal” goods and services. (Most people are not aware of the economy’s growing need for energy supplies. For an explanation regarding why this is true, see my recent post The Physics of Energy and the Economy.)

In theory, EROEI analyses might be helpful in determining how much gross energy is necessary to produce the desired amount of net energy. In practice, there are many pieces that go into determining the total quantity of net energy required to keep the economy expanding, making the calculation difficult to perform. These include:

  1. The extent to which population is rising.
  2. The extent to which globalization is taking place, and with it, access to other, higher EROEI, energy supplies.
  3. The extent to which the economy is getting more efficient in its use of energy.
  4. The extent to which EROEI is falling for various fuels (on a calendar year basis).
  5. The extent to which average EROEI is falling, because the mix of fuel is changing to become less polluting.
  6.  The extent to which it is taking more energy to extract other resources, such as fresh water and metals.
  7. The extent to which it is taking more energy to make pollution-control devices, and workarounds for problems with energy.

Looking at Figure 5, it is not obvious that there is a need for a big adjustment, one way or another, to produce net energy from gross energy. Of course, this may be an artifact of the way GDP is measured. High-priced metals and water are treated as part of GDP, as is the cost of pollution control devices. People’s general standard of living may not be rising, but now they are paying for clean air and water, something they didn’t need to pay for before. It looks like GDP is increasing, but there is little true benefit from the higher GDP.

The one big take-away I have from Figure 7 is simply that if our goal is to get net energy to rise sufficiently, the best way to do this is to make certain that gross energy production rises sufficiently. World leaders were successful in doing this since 2001, through their globalization efforts. Of course, the new energy we got was mostly coal–bad from the points of view of pollution and workers’ wages in developed countries, but good from some other perspectives: low direct debt requirement, low complexity requirement, and high EROEI.

Figure 8. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

Figure 8. China’s energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

One issue with EROEI calculations is that they disregard timing, and thus are not on an energy flow-year basis. Ignoring timing also means the calculations give little information regarding the likely debt build-up associated with an energy product.


If a person doesn’t understand what the problem is, it is easy to come to the wrong conclusion. Part of our problem is that we need a growing amount of net energy, per capita, to keep the economy from collapsing. Part of our problem is that entropy problems such as rising debt, increased pollution, and increasing complexity tend to bring the system down, even when we seem to have plenty of energy supplies. These are the two big problems we are facing that few people recognize.

Another part of our problem is that it is necessary for common laborers to have good-paying jobs, and in fact rising pay, if the economy is to continue to grow. As much as we would like everyone to have advanced training (and training that changes with each new innovation), the productivity of workers does not rise sufficiently to justify the high cost of giving advanced education to a large share of the population. Instead, we must deal with the fact that the world’s economy needs large numbers of workers with relatively little training. In fact, we need rising pay for these workers, because there are so many of them, and they are the ones who keep the “demand” part of the commodity price cycle high enough.

Robots may be very efficient at producing goods and services, but they cannot recycle the earnings of the system. In theory, businesses could pay very high taxes on the output of automated systems, so that governments could create make-work projects to hire all of the unemployed workers. In practice, the idea is impractical–the businesses would simply move to an area with lower taxes.

Growth now is slowing because of all of the entropy issues involved. People in China cannot stand any more pollution. Too many laborers in developed countries are being marginalized by globalization and by competition with ever-more intelligent machines that can replace much of the function of humans. None of this would be a problem, except that we have a huge amount of debt that needs to be repaid with interest, and we need commodity prices to rise high enough to encourage production. If these problems are not fixed, the whole system will collapse, even though there seems to be a surplus of energy products.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,136 Responses to Our economic growth system is reaching limits in a strange way

  1. Don Stewart says:

    Dear Finite Worlders
    Interesting quote…Don Stewart

    ‘The world has hit Peak Oil; which is the point were it goes bankrupt attempting to produce oil that it can no longer afford.’

  2. Van Kent says:

    The situation is clear: the 2008 Crisis was the warm up. The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail. http://www.zerohedge.com/news/2016-03-22/next-crisis-will-be-crisis

    When? Soon..

    “greatest crash of your life is just ahead…” http://www.zerohedge.com/news/2016-03-23/%E2%80%9C-greatest-crash-your-life-just-ahead%E2%80%A6%E2%80%9D-%E2%80%93-harry-dent-warns

    Yup, looking at the stats something is about to happen before the first of May.. I don´t know if the next 40 days will blow up the bonds market (which will be the final step before SHTF collapse, I doubt it) but it looks like something not seen since 1929 is coming our way during the next 40 days.

    • Jan Steinman says:

      What if there is no “big one?” What if we just keep having “near misses” that keep getting worse and worse? What if the “next one” is one that will have the commentators saying, “Well, at least this aspect of it wasn’t as bad as 2008!”

      I’m more worried about “boiling frogs” than I am “the big one.”

      Humanity will go out with a whimper, not a bang.

      • Van Kent says:

        I expect stocks to plummet something like 25-35% by the first of May. And exports and commodities also tanking. But I don´t expect bond markets to be in jeopardy before fall.

        I don´t get it when people say there is going to be a slow burn. Boiling frogs, slow decent, BAU-lite. What we have is a global financial system that has intertwined itself with every bank, every government, every municipality, every insurance and sovereign wealth fund everywhere with derivatives so complicated it is impossible to say who owns what to whom. We can only say, that when the bonds market goes, then the entire global financial system goes. All at once, with one bang, everywhere.

        What will a collapse actually look like? On Monday you have money, currency and banks. On Tuesday cash, gold or silver doesn´t have a value any more, not really. Currencies can not be valued at all. Banks are not there. Everything just stops. Three days later you have a SHTF collapse that will end BAU forever, everywhere. Within a month the grid is down everywhere and will never come back.

        How does a global derivatives market that has intertwined itself everywhere not go down in a bang. Please explain.

        • Jan Steinman says:

          Are you familiar with Dmitry Orlov’s Anatomy of Collapse?

          He describes five stages of collapse. Financial collapse is but the first, followed by commerce, government, and a couple more. Only the last is “Mad Max.” In the other stages, people still manage to eke out an existence. It might not be pretty, and many will suffer, but many of us can do without a global financial system.

          Orlov points out that the Former Soviet Union went down to a Level 3 collapse in 1989.

          If the global finance system collapses, but companies are still willing to offer each other credit, all those already-fracked-but-shut-down wells will start up again, and like an atom that emits a photon by allowing an electron to “collapse” down to a lower energy shell, something will go on.

          This is both troubling and comforting. On the one hand, it’s nice to imagine a situation in which everything doesn’t simply crash all at once. On the other hand, Orlov notes that, as a middle-aged person, he didn’t really understand the effect of a Level-3 collapse until he looked in his high school yearbook, and nearly half the people he went to school with were dead!

          That meant half were still living. No “Mad Max.” Just a tougher, crueler life ahead.

          • Van Kent says:

            Never ever before in the history of our species have we been in a situation where:
            A. The entire global system is dependent on profits, growth, everywhere
            B. The entire global system runs on the limits of a finite planet, all at once, everywhere
            C. Every monetary transaction everywhere is dependent on derivatives that have intertwined every cent, every dollar, every yuan, pound sterling and krona together, everywhere.

            USSR had neighbours that did not collapse.. currently Venezuela have neighbours that have not collapsed.. Every collapsing economy so far in the history of our species have had neighbours not collapsing. This time it´s different. I am well aware of Dmitry stages of collapse, But I don´t see Dmitry writing about global finance as it actually is. A global intertwined web that goes out with one single bang.

            Companies offer each other credit.. Really? How? With what, bags of potatoes? Without a currency, without value, without payrolls, without work, workers, value added to anything, how does a Company offer each other credit? I don´t understand this. Please explain.

            • Stefeun says:

              Van Kent,
              can’t tell for sure, of course, but I’m with you about fast collapse.

              Global finance has soaked every last corner of the economy until our everyday lives, it is so intertwined and thus interdependant, the Risk has been evenly dispatched everywhere it could go,
              that I can’t imagine the collapse being other than sudden, complete and definitive.

              Probably there will be some areas untouched by the financial crash, but they’ll likely be wiped off by the generated overwhelming shock-wave.
              Let’s hope we’re wrong…

            • Fast Eddy says:

              No need for the Abilify Xanax Valium cocktail here…


            • Jan Steinman says:

              Companies offer each other credit.. Really? How?… I don´t understand this.

              I’m sorry, I thought that would be somewhat obvious. Orlov certainly explains it well.

              Orlov claims that 2008 was very near a Level-1 collapse. And yet, if it hadn’t been for the radio and Internet, I would not have even known. My plants and animals kept growing. I could still purchase goat feed. On the other hand, I knew people who depended on self-directed retirement plans who were apoplectic with fear.

              In a global financial melt-down, those who absolutely depend on their financial investments will hurt the most. Those without financial investments, but who depend on others with financial investments will hurt, as well — the gardener or maid of the financier. Those who are largely independent of the financial system will also get hurt, but not nearly so bad.

              I guess my point is that not everyone totally depends on the global financial system. I agree that a global Level-1 collapse will be somewhat painful for almost everyone, and extremely painful for many, but not for all. I know that’s hard for city folk to understand.

            • Van Kent says:

              My farm buys diesel, electricity, tractors, trucks and spare parts.

              Why would I give away something valuable, like food, to somebody who does not have diesel, electricity, tractors, trucks or spare parts to give in return? Only something called “Company credit”. What exactly is that to me? How can I get diesel, electricity, tractors, trucks and spare parts with something called “Company credit”?

              Most farms nearby make their poultry feed with a protein mix from Brazil or Argentina. I make it myself. But say the nearby farms want to continue buying from Brazil or Argentina. How do they do that, buy something and transport it from Brazil and Argentina with something called “Company credit”?

          • Vince the Prince says:

            Jan, I just visited Orlov’s site and he presented his new book.
            For those interested, here is the link

            What I found interesting is his take on the Unabomber!
            The first person who first nailed the technosphere for what it is was Ted Kaczynski, a.k.a. The Unabomber, who is serving out eight consecutive life sentences in the Florence, Colorado, Supermax Penitentiary. In his most recent profile update, which he submitted to the Harvard alumni association a few years back, he lists his eight life sentences as his achievements and his current occupation as “prisoner.” If you want to send him a postcard for his birthday (he is turning 74 on May 22) his address is “No. 04475-046, US Penitentiary—Max, P.O. Box 8500, Florence, CO 81226-8500.”
            Denial is easier to explain. People who are well and fully trapped within the technosphere and cannot imagine life outside of it are not likely to be receptive to the idea of it going away. It may be possible to convince them, using rational argument, that the technosphere’s days are numbered, and that they need to get themselves clear of it if they wish the human experiment to continue. But even when convinced on a purely intellectual level, without the emotional resilience or the physical stamina to transform their personalities and to drastically alter their habits all they can do is sit there and blink. As to why that is, see the previous paragraph.
            . He was victimized by the bit of the technosphere that is by far the nastiest: the part that seeks to make humans one hundred percent controllable, as if they were robots, by breaking down everything about them that makes them human. I am certain that he caught a glimpse of what it is: a single, unified, global, controlling, growing, destructive entity, existing beyond human reason or morality, which must be stopped no matter the cost.
            As I see it, I don’t think there is any controlled or planned way in which we can dismantle the industrial system. I think that the only way we will get rid of it is if it breaks down and collapses.

            The way he chose to live his life was not the path of the intellectual who is able to completely ignore the problem in his daily life while timidly scribbling about it in some dusty corner. He quit his position at Berkeley, built his cabin in Montana and moved in. He lived there without telephone, electricity or running water, on very little money, and studied tracking, edible plant identification and primitive skills. He chose to not be part of the problem; if everyone lived like Ted, then there would be no technosphere for me to write about
            Barak Obama, who destroyed four entire countries (Libya, Syria, Yemen and the Ukraine) would perhaps have put it, “We had to kill some folks.” (His predecessor, Bush Jr., only destroyed 1.5 countries—Iraq and the remaining half of Afghanistan; I wonder if this qualifies as “progress.”) Yes, Ted broke the commandment that “Thou shalt not kill,” but perhaps you’ve noticed that it was changed to “Thou shalt not kill unless so ordered” quite a long time ago. Ted’s crime is not that he killed some folks (lots of people get medals, promotions and pensions for committing acts of murder) but that he didn’t kill as a servant of the technosphere.he most severe criticism that can be leveled at Ted is that his methods were unsound: there are other, more efficient ways of achieving notoriety.
            I haven’t been as thorough in repudiating technology as Ted, but I am no pure intellectual either. In fact, I haven’t repudiated technology at all; I have merely become very careful in selecting it. I do own a cell phone, a laptop, a bicycle and a few other bits of carefully selected technology. Nor am I any fan of gaining notoriety by killing and maiming and other such unsound methods; merely typing on a laptop is working just fine for me. And I didn’t move to a cabin in Montana; instead, I sold the house and the car, quit the job and went sailing.

            I rearranged the essay and recommend visiting to read it. May prove to be a valuable book for Fast Eddy to contemplate

          • DJ says:

            He must have gone to Chernobyl High. Soviet population -85 277M, -90 290M.
            If that is the kind of apokalypse we’re waiting on I’m not so worried.

            • Fast Eddy says:

              The Soviet Union collapse is again not a useful yard stick

              They still had oil and electricity and police and government and running water and a supply chain.

              If you want to look at collapse Haiti is the best example — but still nowhere near what happens post BAU…

              Haiti still has electricity and food and water and aid agencies …. the situation is dire… but it is not a collapse

              Collapse is when the electricity goes off – forever… when the grocery stores are looted and not refilled… when the petrol stations are emptied -forever…

              That is what post BAU looks like

            • Interesting!

            • Jan Steinman says:

              He must have gone to Chernobyl High… I’m not so worried.

              Given the word of a Russian who lived through it and that of a Google DJ, I’ll take the word of the Russian every time. (See also Vince The Prince’s recent posting.)

              The point is that things can get very bad indeed, and yet not be a total “Mad Max” disaster.

              I imagine things may be similar even now, with Russia’s big “cash cow” being fossil sunlight, and oil still unde $40. And yet, Putin can still take over large sections of neighbouring countries — not something you’d expect in a “Mad Max” sort of crash.

              My bet: the world will not end in 40 days. But “baby boomers” will be the first generation in 200 years to not live as long as their parents, on average.

              Humanity will go out with a whimper, not with a bang.

            • DJ says:

              I never questioned that half his class is dead. Sometimes a school bus collides.

              You implied that every other russian died during the Level 3 collapse.

            • Jan Steinman says:

              You implied that every other russian died during the Level 3 collapse.

              I didn’t “imply” that — Orlov (a real Russian who lived through it) did.

              I’m just reporting what Orlov wrote. You got an issue wid dat, take it up with Orlov! Or at least be conversant with his writings.

            • Vince the Prince says:

              The average lifespan age fell to 52 years old post Soviet Union in men
              In a nutshell, people who survived that time and didn’t turn to drink or ruin themselves in other ways are quite resistant to many miseries of life. Things like personal bankruptcy, losing one’s home or job sound like a small adventure to people who lived through 90’s in the post-Soviet states.

              That was Dimitry implied regarding his High School class of 62.

            • DJ says:

              Vince, I’m certain russia then, and to a lesser extent now, was/is horrible. A far shot from Eddys no more christmas turkey ever.

              Class of -62 would have been less than 50 by 1990.

              Jan, I’m sorry I got you so wound up. My first, no my second thougt, was – he must have had bad luck if halv his class are dead by middle age.

              Sorry if I trust Google more (as valid for the worlds largest country) than a single persons story. Slightly increasing population, fertility rate below replacement and average life span dipping below 58.

              Look at this way: if human life on earth is to survive we need something much worse than a collages like USSR, otherwise we will be 9 billion by 2030.

            • DJ says:

              … bur I suppose a fertility rate of 1.3 and average life span of 40 or so would quickly correct global population.

          • Fast Eddy says:

            Jan – have you tried the Fast Eddy Challenge — unplugging from BAU for a week?

          • I don’t think I had read the whole Valeant Pharmaceuticals story until now. A few excerpts:

            If you need evidence that Wall Street is a financial time bomb waiting for ignition look no further than the recent meltdown of Valeant Pharmaceuticals (VRX) [a formerly huge company, with market valuation of as much as $90 billion].

            In essence, Pearson and Schiller claimed that the rest of the industry was infinitely stupid, and that tens of billions of market cap could be created instantly by the simple expedient of buying companies with seasoned drugs and then jacking up prices, often by orders of magnitude.

            Pearson and Schiller slashed staff and chopped down R&D spending to a comically low 3% of sales. That compares to an industry norm of 12% to 18%.

            Finally, this Wall Street witches brew was stirred together in pro forma financials that assumed these predatory price hikes would be permanent and that these back-of-the-envelope cost savings would be immediately realized in full.

            So why did Valeant’s market cap soar from $1.2 billion, when Pearson arrived in 2008, to the recent peak of $90 billion during a period when the company has generated hardly a dime of profits?

            It was just another case of Wall Street financial engineering and speculative hype at work. The entire story has been based on pro forma, ex-items forward looking Wall Street hockey sticks, and not the least those published by Goldman Sachs.

            • richard says:

              It may be worse than that story implies. Take any illiquid asset, eg a house, or shares in a high-tech industry, or famously shares the Anglo Irish Bank :
              “Taoiseach Brian Cowen denied claims that he was protecting a “Golden Circle” of wealthy financiers from being identified. This mysterious group of ten businessmen is said[by whom?] to have received loans from Anglo Irish Bank in return for buying shares, in a move designed to keep the bank afloat.”
              When you _know_ the shares will eventually become worthless, the only thing to be done is to exchange them for assets that may be slightly less risky. Pretend and extend. The longer it continues, the bigger the bubble.

        • Fast Eddy says:

          It is impossible to refute what you are saying….

          But what you are asking will not compute with a Fader — they ‘believe’ — they ‘have faith’ — no matter what facts you put in front of them they will never alter their position.

          It’s just like saying to someone ‘are you not concerned about peak oil’

          And they respond ‘no – not at all – I understand what it implies — but THEY would never allow that to happen – THEY will fix it’

          You may as well try to have these conversations with mules.

          • Van Kent says:

            Fast Eddy,
            What strikes me as odd, is why the argument is: “has always collapsed this-or that-or whatever way”.. As if there is a certain pattern that a global collapse of the entire financial infrastructure should have? This never ever before seen situation should follow some plan or pattern that every other collapse has followed? Like saying ok, every day several meteorites hit earth. Several tons worth of rocks. OK, then that Manhattan island sized asteroid that is approaching, is just like every other meteorite that has hit earth every day. It will follow the the same path, same pattern, same structure of impact that every meteorite that ever hit earth before it. Then the Manhattan island sized asteroid bangs in, and the entire surface of the earth is changed forever.. Not exactly the same pattern..

            The closest historical reference I can find to what is soon about to happen is 1200BCE collapse of civilization is ME, when the Sea Peoples began immigrating. And all the super powers of their time collapsed entirely, except Egypt. And even that 1200BCE collapse of civlization will not even come close to the calamity we are headed towards.

            Are we not being clear enough that the entire global financial structure is something that has never ever been in existence before. Something like this has never ever collapsed before. And when this sucker goes down, it´s something none of us has seen ever before. And our species is not likely to witness such an event ever again. This is epic..

            BTW Eddy, in your calculations about the ponds.. Have you considered that the coriolis effect keeps most toxins produced in the northern hemisphere inside the northern hemisphere. Sea- and atmospheric currents mostly circulate inside their respective hemispheres..

            • “Have you considered that the coriolis effect keeps most toxins produced in the northern hemisphere inside the northern hemisphere. Sea- and atmospheric currents mostly circulate inside their respective hemispheres..”

              You are mostly describing the surface of the ocean. There are certainly fewer reactors in the southern hemisphere:

              However, radiation in the Northern Hemisphere may migrate to the southern in as little as six months: (this is an interesting looking blog)


            • Van Kent says:

              Thanx Matthew, good stuff.

            • Fast Eddy says:

              56 million Hiroshimas. It don’t matter where you are on the earth – everything dies.

              Gail – since you have made it clear you are in the Fast camp on this issue — perhaps an article dedicated to why the collapse will be a collapse – and not a Fade

              And can those who do not believe in collapse please not continue to use the phrase slow collapse.

              You are aware that when you do that its like saying I ran very fast — but slowly.

          • Jan Steinman says:

            they ‘believe’ — they ‘have faith’ — no matter what facts you put in front of them they will never alter their position.

            Pot –> Kettle : Black

      • Pintada says:

        Dear Jan Steinman;

        I have tried to say the same thing in the past, and it never gets any traction here. We are all hard wired to throw out the details, and the facts that do not support our thesis, and jump to a simple, easily understood crash/collapse/implosion.

        It certainly doesn’t need to play out in a simple way.

        Van Kent, I’ve read many of your posts and know you to be a smart guy, but you made a huge mistake this time. “… it looks like something not seen since 1929 is coming our way during the next 40 days.” “I expect stocks to plummet something like 25-35% by the first of May.” 🙂 40 days! I will be here, and I will call you on it. I wish that you are correct!

        Oh, yeah, this sucker is going down!! In the next 40 to 80 years. Historians will look back, write up papers, and no one will believe them, because no-one alive then will understand how great we have it. Then, it will just keep getting worse, and worse so that 160 years hence there will be no historians – the “crash” will have happened.

        I wish that you are correct!,

        • Van Kent says:

          I just look at the stats and something is arriving in the next 40 days. Because we have all these automated trading algorithms, derivatives to hedge both sides of the bets, a total crash of the stocks don´t seem likely before the bond market goes. But something seems about to crack, too much pressure building..

          Pintada, would you entertain this thought for just one moment? Never ever before has everything been intertwined together like we have during the last few years. How is it possible to undo everything we have done, every monetary contract made, every bond issued, every derivative made, and how is it possible to exponentially grow for decades, globally, everywhere, on a finite planet that is already full?

          Pintada, I would very much like to understand how you see things held together for decades. How does a global JIT economy work without money, currency, banks, governments and payrolls??

          • Pintada says:

            Dear Van Kent;

            There is a difference between thinking that everything is fine, and believing in an instacrash. I wish all the things that you point out would in fact cause the global “civilization” to just go poof and disappear. As I’ve said before, it is the only way any large mammal will exist by the end of the century.

            The problem is this: For you to be correct, the end must happen within 40 days. I was just looking at Orlov’s most recent post where he has already moved the timeline by his estimation to next year. Like a Cubs fan (is that the right team? I don’t watch sports. 🙂 )
            its always “just wait till next year!” Have you seen “The Daily Impact”? He went out on a limb last spring and announced the crash of 2015. Then he wrote a post, “Why the crash of 2015 will happen in 2016”. You put yourself in the same box.

            Meanwhile, the longer crash is actually the worse, more painful and more final situation. Since the result will be much worse if the crash happens over time, I assume that it will take a long time. It’s just my worldview, and I have been well served by it.

            I saved some of the salient points from your post, and i set an alarm on the computer. We will review this on May 1. 🙂

            I actually have some logical reasons to anticipate a long crash (none of which will impress you):

            1. There is the matter of our current state of affairs – population is going up, world GDP is going up, Chinas GDP up, CO2 levels up (an up at an increasing rate and though I have not seen any data, I bet the increasing rate of increase is also increasing).

            2. Momentum – There are 7.5 billion of us all wanting to buy the next new thing, do the next thing, have a baby, etc. Will they all just stop?

            3. Government – the helicopter drops have just begun, how long before that all plays out? Years, i think. Decades I fear.

            4. Resources – Yup, we are running out. Not out. Running out.


            Of course, you could be correct, but the odds are overwhelmingly against you.

            Yours in anticipation,

            • “The problem is this: For you to be correct, the end must happen within 40 days.”

              Holy crap, how did we get from “a major market shock within 40 days” to “the end within 40 days”?

            • imie says:

              Energy consumption rate is now probably in decline. If this continues couple more quarters, it’s over. CBs can print even more currency, but it doesn’t matter.

            • It is energy that creates “stuff,” not money. Money and debt of all kinds spreads the stuff around.

            • Fast Eddy says:

              ‘Will they all just stop?’

              The fade camp seems to think that the 7.4 billion people have a choice in this …. this is a symptom of Delusistan.

              It is not different than one of the sheeple saying ‘THEY will do something. THEY will fix it’

              It is total nonsense.

              THEY will not fix it — just like it does not matter than 7.4B people do not want things to collapse.

              This is Delusistan thinking. This is simply another way that the mind helps people who cannot handle the truth cope.

              The sheeple put their faith in THEY. The faders — who understand the implications of fast collapse simply deny it can happen — they cannot support this position — they will not listen to fact based arguments. In fact you may as well argue with a brick wall.

              The Faders cannot handle the truth — so they make up their own truth — they invent their own Matrix.

        • Jan Steinman says:

          I have tried to say the same thing in the past, and it never gets any traction here. We are all hard wired to throw out the details, and the facts that do not support our thesis, and jump to a simple, easily understood crash/collapse/implosion.

          Yes, that’s why I stay away. I’m beginning to regret clicking the “Notify me of new comments” box…

          I’m too busy working toward the coming Good Times to worry too much about those who can only focus on the dreaded Bad Times.

      • Fast Eddy says:

        Globally, corporate profits are dropping – trade is dropping — growth is stagnant and worsening… commodity producers are insolvent (although not yet bankrupt) with prices at the current levels… prices cannot rise without further crushing growth…

        The last time any of this happened we got 2008. We were on the verge of total collapse

        QE and ZIRP were deployed and total collapse was beaten back.

        But now – the stimulus policies are not working.

        Another 2008 moment approaches — this time there are thousands of ‘Lehmans’

        If your position is that this can go on for decades – that there will not be another Lehman moment …

        Then the onus is on you to explain what exactly THEY can do to stop this.

    • Kurt says:

      So, a thought experiment. Suppose robotics reaches a point where the robots can pretty much take care of the production of oil, supervision of nuclear power plants etc. Also, assume an 80% die off of the population (not sure how). Could techno utopia be achieved? I think it could and I believe it might happen in around 15 years. Getting there will be tricky. I think that is why we are seeing so much DARPA money going towards this scenario. The military will be heavily involved as we go through this transition.

      • Van Kent says:

        We would need an AI, singularity, something many times better then a human brain, or brains, could ever achieve, to build a real 99% circular economy. I say circular economy, because even an AI can not magically produce resources on a finite planet. Only Quantum Mechanics combined with nanotech can do that.

        Nope, I think most of the U.S. military funding today is just plain fraud. Stealing. Cleaning out the treasury before the barbarians arrive. Nothing to do with actually making anything useful.

        • Stefeun says:

          One cannot produce microchips according to circular economy,
          so how can you imagine AI as capable to acheive circular economy?

          In my view, a real circular economy is NO TECH, ie entirely recyclable by natural processes, ie Nature itself.

      • Pintada says:

        Dear Kurt;

        Robots do not grow on trees. Even if they did, the robot tree forest would be on fire ( http://robertscribbler.com/2016/03/24/hot-winds-fan-massive-unprecedented-march-wildfire-burning-40-mile-swath-through-kansas-and-oklahoma/ ). So, your thought experiment falls apart simply because the resources do not exist to build all the robots needed (never mind the expense, and the fact that robots of that sophistication do not exist). The part where you say, “Suppose robotics reaches a point where …”, should have been your first clue.

        A more interesting question is:
        What if someone directs Big Blue (or something much more powerful given that Big Blue has been around long enough to be obsolete already) to the question of planning. They ask it, “Look at all the published peer reviewed papers on climate, resources (including energy), farm productivity, fresh water, etc.. and give us your recommendations.”

        What would the computer say?

        1. Gail’s right. Goodbye.
        2. ??

        I suspect that the question will be asked. If the people doing the asking just turns the AI loose to get its own data things could get very interesting. The Singularitarians asked the question, and tried to figure it out by hand recently. Their study only looked at techno-utopian predictions, and other gibberish, and so the result was just more techno-utopian gibberish.


    • MM says:

      Nope! A crash means “eceryone is cashing in on assets at the same time”.
      We are not in 1929. The big compynies do not need to cash in on their assets. There is unlimited credit. There exist at least 5 Billion people that want to live like the americans. If we need to give helicopter money to them all, we will do it. The recovery is just around the corner.
      What is happening is a slow burn down of everything. That can last some 10 years or more.

      • Van Kent says:

        You said this once before. You´re saying that the really big investors and the really big companies are so well diversified and hedged, that they don´t sell tanking assets. I still don´t understand this. Why do we have a stock market, or a market in general, if the big players don´t have to sell (then nobody buys) anymore?

        I understand the unlimited credit part. And I understand the disbelief the general public has for a major collapse. I understand the helicopter money. And I also understand a “slow burn of everything” so to speak. BUT all we need is a small, teeny, weeny, tiny, crack in the bond market and then unlimited crdit is no longer there, helicopter money is impossible and a slow burn just got rocket fuel poured into it.

        The only real question in my mind is, when will we see that first small, teeny, weeny, tiny, crack in the bond market?

          • I was looking at the CNBC article. One of issues is that the government seems to frequently revise their methodology. For example, at some point after the Great Recession, the government decided to use a different inflation adjustment, which changed a lot of results, going back many quarters. IIRC, the change even retrospectively seemed to change the date when the Great Recession started (but of course, that was not changed).

            In general, the revisions are big, compared to the reported GDP growth. It makes a person wonder whether it is possible to trust the reported GDP numbers for the US or any other country.

            • richard says:

              We throw around terms like GDP, growth, inflation, real, nominal, employment, and productivity as if these are defined to the second decimal place. We then look to forecast the future from what ought to be rounding errors. I’m drawing attention to this because GDP_growth = population_growth(1-unemployment)x(productivity+inflation).
              And from that equation it is possible to see that productivity (ie real weath generation) cannot be determined without knowing fairly precisely how much inflation is in the system. When these figures are used for purposes other than as originally intended, outcomes, and forecasts, cannot be depended upon.

            • Van Kent says:

              Originally when the pension systems were built around the world everything was calculated on the premises that GDP growth would continue forever.. All national government spendings are calculated on the premises that a strong vibrant growth will continue forever on a finite planet..

              We are using the wrong assumptions to calculate everything. So, actually, everything we calculate in economics is wrong..

              What Gail is trying to do is a kin to what Adam Smith, John Maynard Keynes and John Kenneth Galbraith tried to do in their time. When the current way of understanding things doesn´t work, one needs new up to date models to explain things.

              Richard, if you look at what Gail actually predicts, those prdictions only rely on one certainty; a finite planet. We can be fairly sure that is a fact and not an assumption.

              Inflation, well, if we have ZIRP or NIRP we can be fairly certain all assets are inflated.

            • I agree. Too much weight was given to a temporary growth period, which cannot continue. No one really separated growth from inflation either, so the growth looked really good for a while.

            • Don Stewart says:

              Dear Gail
              I spent quite a bit of time in the 1960s making forecasts, some of them long term out to the year 2000. Any way you looked at the statistics between the end of WWII and 1970, growth was the name of the game. While I had been concerned about oil early in the 1960s, the discoveries in the North Sea and Alaska and other places put ‘peak oil’ on the back burner. Admiral Rickover was worried about ‘strategic materials’ in the late 1950s, but the 1960s came and went and no shortage of strategic materials ever materialized. If the growth rate of that period had continued to the present, real incomes in the US would be roughly twice as high as they actually are today.

              What went wrong? For a start, take a look at this article and charts which show that housing plus medical expenses account for 4 trillion dollars per year of expenditures. Spending on housing and medical stuff does not generate the income needed to pay pensions to people who are not working. Neither does our other great growth industry…eating out. The medical expenses DO keep people alive, although not very comfortable and happy, for longer…which makes the pension problems worse.


              I still remember the debates in the company I worked for. We were dependent on housing construction, but I argued that housing was a tertiary activity and didn’t actually mean that the economy was healthy. The majority just counted the money and said ‘so long as housing is healthy, the economy is healthy’. The Federal Reserve today looks at things in much the same way.

              I think that it is necessary to separate out those activities which enable a society to expand its production in the future from those activities which are simply ends in themselves. Thus, building a machine or restoring the fertility of farmland or educating the young or curing an infection can all be seen as ‘production enhancing’. But the chronic disease treatment we engage in today and the building of elaborate houses do not enhance our ability to produce in the future. If we couple the evident mal-investment with Limits to Growth Thinking or even just Peak Oil, we have to be pessimistic about pensions.

              Don Stewart

            • I came along somewhat later than you, but can relate to the same kind of experiences. Actuaries look at historical data to forecast the future. Somehow, they assumed that everything would continue as in the past–both inflation and growth. Oops!

              The medical situation is especially bad, because it relates to the worsening health of the American public, and they eat food that is increasingly unhealthy (over processed, too much sugar, too large servings, too much antibiotics and other pollutants in the food). At the same time, the American health system is incredibly inefficient with its dollars. I overheard someone yesterday saying that over $1 million had been spent on keeping her elderly parent alive for three months in intensive care. Good grief! Growth in this industry is more sad than helpful.

            • Fast Eddy says:

              Did I imagine this or did the US recently decide to include hookers and blow sales in GDP?

            • It is Britain that includes prostitution and illegal drug profits in its CPI. The US doesn’t.

            • richard says:

              @Van Kent “So, actually, everything we calculate in economics is wrong..”
              I’ll take the opposing view: We know by definition that certain things are true, ie that assets == liabilities, and savings==investment, so we know how we should calculate GDP. Except that this results in a kind of Heisenberg uncertainty where either the calculation is correct but we are uncertain what is measured, or the calculation needs correction when the item under measurement changes.

            • ejhr2015 says:

              Take a middle road. A great deal of mainstream economics is wrong, but there are fundamentals which apply and on which all economists agree as book keeping would be impossible if there was no agreement. There are choices such as cash or accrual accounting but these are not in dispute.
              What is disputed is a large part of macroeconomics, monetary and fiscal policies etc.
              Mainstream economics, based in the universities, like the Austrian or Chicago schools, are dependent on models and the assumptions these work on are far from scientific. The big issue is that these schools rule the field, yet are always failing, requiring new models to supplant them. They are like a belief system, characterised as such by Paul Samuelson, among others.
              They are criminally dangerous to society and its economic well being.

            • Van Kent says:

              In economics we calculate humans doing work, using energy, to transform resources to satisfy human needs. What is not an human need/ want, is not inside our economic concerns.

              Where we actually live is a world/ universe that does not care about what humans need and want. Water gets polluted, droughts happen, fish stocks diminish, soil gets ruined, despite human wants and needs. Even if humans would “want” our world to not have limits, it still has them.

              This, not calculating the right things, makes every single calculation in our economic calculations wrong. Assets and liabilities are not calculated right, savings and investments are not calculated right. Inflation, production, efficiency and GDP is not calculated right.

              GDP, inflation, savings, investments, assets and liabilities, has a problem of having wrong values, wrong measurements and wrong assumptions.

              Nothing else can explain how a “science” keeps on insisting the world is more affluent then anytime in the history of our species. When the very opposite is true. I do not consider losing everything, everybody losing everything, being affluence of any kind..

        • Stefeun says:

          “The only real question in my mind is, when will we see that first small, teeny, weeny, tiny, crack in the bond market?”

          I think we won’t see anything before it’s too late, Van Kent.
          There are major cracks every day and the figures have gone mad, wether for the bond market or anywhere you look at.
          The tiny crack will happen among a thousand other events, and will remain buried and unnoticed until someone realizes this sucker, coming from unexpected region and therefore under loose scrutiny, has triggered an avalanche that has already taken pace and is now too late to stop or even mitigate.
          Then it’ll be sheer panic.

          • Fast Eddy says:

            One day everything appears normal. Then suddenly — chaos, panic.

            Remember Lehman.

        • Fast Eddy says:

          ‘There is unlimited credit’

          Not true. The more a company borrows to prop up share price — with profits declining — the closer it comes to being junked… which means interest rates on its debt blast off.

          ‘really big investors and the really big companies are so well diversified and hedged, that they don´t sell tanking assets’

          Utter nonsense.

          Anglo American mistimed mine asset sales http://www.ft.com/intl/cms/s/0/8575378c-d19c-11e5-92a1-c5e23ef99c77.html#axzz43v32Y8OC

          Glencore Expands Asset Sales to Copper in Battle to Cut Debt

          Vale May Consider Asset Sales After Worst Loss In Nearly 20 Years

        • I think the “small teeny weeny tiny crack in the bond market” has already come. There are really two parts of it. One is the rising interest rates (and falling prices) on junk bonds. There have been articles on this subject recently.

          The other is less leniency in evaluating debt held by banks. The WSJ this morning had an article today titled, “Coming to the Oil Patch: Bad Loans to Outnumber the Good.” It says,

          The labeling of more loans as troubled started late last year with a push by the Office of the Comptroller of the Currency to get banks to be tougher in evaluating which oil and gas loans are likely to pay out.

          Earlier this month, the OCC published an updated manual for energy lending that establishes stricter guidelines for loans tied to future oil-and-gas production. One guideline banks use to classify loans as “substandard and worse” is if the creditor has debt generally more than four times greater than operating income, before depreciation and amortization expense.

          That high a ratio was rare when crude prices began to plunge in 2014 but will be the average across the sector by the end of the year, estimates energy investment bank Tudor, Pickering, Holt & Co.

          The updated manual follows a series of calls in recent weeks between the OCC and banks around energy lending guidelines, people familiar with the calls said.The labeling of more loans as troubled started late last year with a push by the Office of the Comptroller of the Currency to get banks to be tougher in evaluating which oil and gas loans are likely to pay out.

          Earlier this month, the OCC published an updated manual for energy lending that establishes stricter guidelines for loans tied to future oil-and-gas production. One guideline banks use to classify loans as “substandard and worse” is if the creditor has debt generally more than four times greater than operating income, before depreciation and amortization expense.

          That high a ratio was rare when crude prices began to plunge in 2014 but will be the average across the sector by the end of the year, estimates energy investment bank Tudor, Pickering, Holt & Co.

          The updated manual follows a series of calls in recent weeks between the OCC and banks around energy lending guidelines, people familiar with the calls said.

          Of course, these are bank loans, rather than bonds, but it seems like there would be some carry-over to the rating of bonds, and of securities made up of those bonds.

          • richard says:

            Equity prices tend to gradually decline because much of their value depends on expectations for the future of the entire economy. Debt prices decline suddenly because debt is supposedly protected, or was, and once the rush for the debt exits begins, buyers are hard to find.

          • Van Kent says:

            When somebody buys a bond they expect to get their money back, some day. When it becomes clear that money invested in bonds is not coming back. Or, that thought is in serious contemplation, then all hell breaks loose.

            European banks are not in good shape. While banking profits during the boom were private, Ireland banking losses were socialized on September 30, 2008. There is Greece, then there is Portugal and Ireland, but the problems are actually Spain and Italy. UK banks, Deutsche bank, and most banks in Spain and Italy are in dreadfull shape, because they have these sovereign bonds.

            As we speak, there is a European bank stress test underway. The results of this stress test will be published in early Q3 2016. http://www.eba.europa.eu/-/eba-launches-2016-eu-wide-stress-test-exercise

            When it becomes clear to the other banks in Europe, UK and U.S. that European sovereign bonds are not money any more. Because the European banks are going belly up. Then the bond market will freeze, and then the big players will start NIRP everywhere and the FED goes QE4 and stocks rally again for a while.

            But once the genie is out of the bottle, it will not go back in there. When money invested in bonds becomes uncertain, then helicopter money becomes impossible, “unlimited” credit freezes, austerity on steroids begins, everything accelerates to a new level of cluster-uck.

            • I agree that the debt market going belly up would be a big problem. Banks, insurance companies, pensions, 501K’s, would be affected. Future borrowing would become a problem for governments and businesses. International trade depends on financial guarantees, and these would likely be lost.

    • Pintada says:

      Dear Van Kent;

      You’ve made a bold prediction, ” … it looks like something not seen since 1929 is coming our way during the next 40 days.”

      I will be waiting … I hope you do not loose your shorts to a bunch of ill timed short sales!! 🙂


  3. Fast Eddy says:

    “We don’t need a rich country, we just need somewhere safe,” Beko said, declining to give his last name. “We don’t need Germany even. If Greece can give me a room or something, a future, somewhere safe, we’ll stay here”


    Blow em up … destroy their lives…. then put them in prisons until we can work out how to discard them…

    Here’s an idea — why not just open fire on their boats and sink them….. ah – I guess we need to save our ammo for blasting away at their countries…

    I think I’ll order another truck of coal and set it alight to throw more gasoline on the extinction event – it really cannot come soon enough for sick aberration we refer to as humanity.

    Humane — humanity — terms that should be re-defined….

    • Jeremy says:

      Beware, P’a’u’l’u’s The W’o’o’d’g’n’o’m’e’ – the system doesn’t understand irony these days – you could end up in p’r’i’s’o’n for h’a’t’e language, you i”d’i’o’t.

  4. imie says:

    Last week US coal production minus 39% year over year. http://www.eia.gov/coal/production/weekly/tables/weekly_production.cfm

  5. Jeremy says:

    Well, I’ve asked Fast-Eddy a couple of times about the Rockefellers: where are they now, and who has replaced them these days as behind-the-scenes string-pullers (the E’L’D’E’R’S, as he calls them), but he was too afraid to answer. Anyway, the Rockefellers ARE still around:


      • MM says:

        Not having read this, from the last 150 years of history you can asume that a “new world order” is not possible. There exists no complete global “solution” to our clusterf*ck.
        If you look at the chinese having used more concrete in 3 years than the us in 100 years you see that they “do their own thing”. There exists something like a global market but not all players play to the rules (see the oil price…)

      • Jeremy says:

        Thanks, ejhr2015. So a Rockefeller is still alive at 100 – while looking undead enough to please David Icke. I’ll just be bones at 100, so I won’t even look that good at that age. I’m not surprised by the old man’s spin, tho. Similarly, when accused of being totalitarian, Mussolini cheerfully agreed, saying that fascism provided for the totality of man’s needs, including his spiritual ones.

        And the second piece – how the Illuminati live, eh? They make the Mafia look like pussycats.

        • ejhr2015 says:

          Good one. eh!? Fun. I put these articles up to show we don’t need no TV. The internet has all the truth and lies and distortions one could ever wish for. But that’s great isn’t it! If it was down to journals and print medium, how many of us would ever have heard of Gail and her work? Now we can all know where we are headed.

        • richard says:

          If I remember correctly, he is on his sixth heart transplant. I guess the “tinman” theory didn’t work out, but he’s till trying.

          • Jeremy says:

            “he is on his sixth heart transplant”

            Just Googled it – that was an internet spoof. But has anybody had more than one, I wonder? A BBC documentary of the 1990s showed receivers of transplants, post-op. Some had developed new interests, like writing rhymes (appalling stuff, really!) or riding motorbikes. In fact, one had regular dreams about riding motorbikes. He eventually tracked down the donor’s family, with permission – they told him the donor had died in a motorbike accident – he’d been heavily into motorbikes. The reasons why this was happening weren’t known back then, but now scientists have their suspicions. It used to be thought that a large part of human DNA was “junk”. Well, scientists now believe the “junk” part is our personal bar-coding, and that our memories are not just stored in our brains but distributed holographically, right thru our bodies. Each one of us has billions of miles of DNA in our body. Perhaps this explains how some near-death-experiencers have reported being immersed in a 3D virtual reality, as they experience their whole life again in a “life review”, in dilated time. So probably I’ll get to relive that time as a boy when I zipped up a kitten in a cushion cover and watched the cushion roll and jump all over the floor, only this time I will also experience the panic of the kitten inside.

  6. I rashly entered a collapsist discussion today:

    Me: The coming economic collapse just around the corner might be so severe there’s a very real possibility of a massive nuclear disaster that will arise from unmanaged spent nuclear fuels. We’re probably all toast.

    Him: Don’t you think THEY have a plan for that?

    Me: Who’s THEY?

    Him: Umm.. the SCIENTISTS. How can you think that they would let the world end? Surely you must be smarter than that…

    Me: You overestimate their smarts and mine…

    Him: (Silence) Did you see the weather report for tomorrow?

    Me: Oh yes… [and just like that the sense of impending calamity leaves the room]

    • Van Kent says:

      Yup, been there, done that.

      Scientists don´t look at the BIG picture. You know environment AND economics AND finance AND energy AND available tech AND politics AND geopolitics. There is not one single job, education, professor or line of study that looks at ALL the risks. Certainly there are future studies, but I haven´t seen any of them having any actually realitic studies of the future.. Just wild ramplings of green cities, circular economy and the like, you know sci- fi.

      It´s funny how braindead people are. “Don´t worry; THEY will take care of everything. Everything will be just fine.” But when push comes to shove how do we make strategies, plans and have a possibility to implement them if NOBODY understands the big picture.

      I just hope the U.S. martial law government would be wise enough to take Gail as a consultant, so that they would have at least somebody who knows and understands the big picture.

      • Stefeun says:

        Van Kent,
        unfortunately systems thinking isn’t the norm.
        It should be.

        Maybe you know the joke about the scientist and the philosopher: the scientist focuses on a small part of knowledge and knows many details about it, while the philosopher tries to get the big picture and general ideas.
        Ultimately, the former knows everything about nothing, and the latter know nothing about everything.

        It’s wrong for both, with nevertheless a bit of truth in it…

        • Van Kent says:

          I think that the failure to see the big picture, systems thinking, boils down to the formation of the national school systems. And why and how it was built. Once factories started to become the norm, they needed an system that would educate kids to be factory workers. Take them of the field, so to speak. Teach them strict hours and to be in one place, doing the work assigned to them quietly and without a fuss.

          I´ve been wondering how to transfer vital knowledge as fast and as accurately as possible, and I come across the Italian Renaissance workshops and Chinese first emperor artisans workshops. There is one master craftsman who knows and does a lot of different things.. Leonardo da Vinci learned to paint, sculpt, and was exposed to both theoretical training and a vast range of technical skills including drafting, chemistry, metallurgy, metal working, plaster casting, leather working, mechanics and carpentry as well as the artistic skills of drawing, painting, sculpting and modelling in Verrocchio’s workshop. That same type of system was present in first Emperor China era, I think. There are a number of pupils that actually do all the heavy lifting. But by doing it yourself, the pupils learn the ropes pretty fast, in all the different fields of artistry.

          DIY or copying how a master does it is a pretty good way to learn things. Fast, efficient and accurate.

          Now, how to learn systems thinking? Well by following and commenting on Gails blog of course..

          • Froggman says:

            You’re right, it begins with the school system, and carries over into the professional associations. I was in a room literally full of city planners the other day talking about a big upcoming update to the community plan. This is the document to guide development of the city for the next 5-20 years. We spent 2 full hours talking about solar powered self driving cars, the sharing economy, delivery by drone, utility and energy systems managed by artificial intelligence, geothermal district heating…

            These are supposed to be the systems thinkers making forecasts about the future, but all we’re doing is parroting the sci-fi nonsense peddled in our professional association’s monthly magazine. It’s techno utopian drivel with no thought to the actual limits of the natural world.

            And the more we talk, the more the excitement of group-think builds. By the time we left the room, everyone was practically glowing with optimism about the great and glorious future. Except for me. I felt ill to my stomach…

            • Fast Eddy says:

              They are immersed in The Matrix! It is their reality … The Matrix is the operating system for Delusistan.

              The greatness and durability of The Matrix is that it can take whatever form you choose — whether it be a techgroupie…. a ‘renewable’ energy acolyte… a scott nearing worshiper …. and so on….

              The Matrix can turn even the most ridiculous ideas into reality.

            • Van Kent says:

              Yup, the feeling when the discussion turns to future issues, with people that are supposed to be knowledgeable.. systems thinkers.. leaders.. whatever.. And you just sit in your chair dumbfounded by their naivety and ignorance thinking “WTF is wrong with these people..”

              Yup, somewhat nauseating. And I´m not sure if we are supposed to get used to that level of naivety or not..

            • Vince the Prince says:

              But Fast Eddy, Scott Nearing did live OUTSIDE of the Matrix….
              In many regards you have taken up the Scott Nearing ‘Living the Good Life”
              I’m gonna nominate you as a lifetime honorary member of the Society of Helen and Scott Nearing Supporters”
              I am very serious…you proclaim many of his positions and outlooks…just recently TV,
              Capitalism, Military Establishment, food systems
              …..yes you are the next Scott Nearing! Imagine that, life is strange.
              Now remember Scott Nearing was expelled from the Communists Party for unorthodox view counter to the Party doctrine. Yes, if Scott Nearing were alive today you would be one of the same….good old Fast Eddy.

            • Fast Eddy says:

              Actually he was knee deep in the Matrix (but would no doubt have adamantly refused to accept)

              … and I am nothing like Nearing…. I am the self-proclaimed king of Realitystan…. (and I spent my life battling against the makers of the Matrix — who are after my soul and mind… hence the no Tee Vee rule…)

              Nearing´s criticisms of American capitalism targeted “the philosophy of life which has gripped a part of the American population—the philosophy: ‘Be rich and you will be happy.’” In his 1913 book Social Sanity: A Preface to the Book of Social Progress, he writes, “If wants are limitless, and increasing faster than income, which is limited, and if the difference between wants and income measures the extent of dissatisfaction, or misery, then, so long as men seek their satisfaction in material things, relying upon goods for happiness, they are pursuing a will-o’-the-wisp which flies from them faster than they can ever pursue.”

              What Nearing failed to understand is that in order to enjoy the ‘good life’ we need eternal economic growth.

              If growth stopped then his good life would have crashed into the bad life… a life of deprivation and endless suffering….

              Stopping growth would mean no more cement… no more electricity.. no more steel tools… no more pick up truck … no more medicines… no more roads… no more vacations in Florida … no more airplanes…. and so on …

              I am in agreement with Nearing on one thing only — that the end result of the need for endless growth is distasteful… when I look at the epicentre of this – America — I am disgusted.

              But where we part ways is that I recognize that there was never any other path.

              In fact his suggestion that we return to living ‘the good life’ is nonsense — because farming is simply one step along the ladder to where we are now — in fact it is one of the key steps right up there with harnessing fire … farming got us to 7.4 Billion people….

              But in Nearing’s version of the Matrix farming is the solution.

              He is no different than someone harking back to the simple times of the 1950’s … when we didn’t have Facebook and mobile phones and all derivatives trading and CDO’s and all this modern new-fangled nonsense…

              As if the 1950’s did not have technology …

              And in the case of Nearing…. as if farming was not simply another form of progress…

            • “In many regards you have taken up the Scott Nearing ‘Living the Good Life””

              The thing is that people claim that the Nearings were independent of BAU, or somehow contributing less to global warming, oil consumption, economic growth, etc. Fast Eddy is a self-professed hedonist doomer, who enjoys the benefits of imperialism and fossil fuels and has no plans to live without them.

            • Vince the Prince says:

              Fast Eddy, you are a MODERN 21st century Scott Nearing… that I am certain of without reserve. I have read just about all that the Nearings wrote or was written about of them by others. I think I am better to judge than yourself, pardon for saying so. I do not wish to go on a rigorous debate with you, because in truth, it really holds no concern or value to those at large. Please keep espousing your ideals and perpetuate the ideals of “Living the Good Life…21st Century twilight BAU”.

            • Fast Eddy says:

              I guess I am — I fly around in aircraft — I drive a pick up truck — I use cement — I go to the dentist and use modern medicine etc…

              Just like the Nearings were business people (selling books) so too am I engaged in business.

              In fact based on what I know of the Nearings I am like a Hyper-Scott Nearing … I am using exponentially greater amounts of what BAU has to offer…

              So yes the main difference is one of degree — I use more.

              But there is a key difference — I understand that using more is good — we all must use more — because the moment we stop growing consumption of stuff (i.e. resources)

              Is the day that we collapse into a primitive state — and the suffering and death begins.

              I do not think the Nearings understood that.

            • richard says:

              Reminds me of one project I was asked to do – provide a wind generator to reduce electricity costs. They wen’t happy when I recommended that a) it wasn’t cost effective for their site, and b) if they really wanted wind generation to demonstrate how it worked then a bottom-of-the range unit was all they needed.
              I seem to remember a bigger wind generator got installed later. Maybe they dropped the “cost-effective” requirement.

            • Artleads says:

              A lot of us here are having that kind of experience. I’m working on a grant application, but I feel I must not paint too dire a picture of what the grant seeks to address. I fear that would anger and alienate the funders. I doubt that you have to go against your principles (although I could be wrong), you just have to word things carefully. But there must also be a plan B. How to do the project without the grant money.

            • Vince the Prince says:

              Yes, Fast Eddy you are certainly a Scott Nearing on Steroids! You and Scott would make a great team together. Have so much in common. They certainly saw collapse coming due to the finite world. Helen even avoid bringing children in the world, like you and Mrs. Eddy,
              for that reason, considering it a “social service”. She claimed to have many children under her wing in Sundance and example.
              Fast Eddy, I am so proud of you. Taking up the torch of “Living the Good Life”.
              It would be interesting if Scott were here today and how he would adjust to the FW of today.

          • xabier says:

            Van Kent

            Having learnt in a workshop setting and also having had quite a bit of experience teaching all kinds of amateurs to varying levels of attainment, I can conform that it is a very effective method.

            Above all, in addition to, and beyond, technical knowledge, the master imparts a certain attitude and approach, and what for want of a better word one might call an ‘atmosphere.’

            Having said that, craftsmen, even very good ones, can be quiet as stupid, materialistic and short-sighted as anyone else, although on the whole I have found the better the worker the better the character and philosopher….

          • You need a different system than our current academic system to encourage systems thinking.

            When I became a Casualty Actuary, the education was entirely outside of the university education system. Other actuaries would make up the syllabuses and write the tests (and grade the tests). There are no pre-requisites to studying for and taking the exams. I know one actuary without an undergraduate degree (although he did have math and other relevant course work. He was unusual, though.) A lot of people beginning the exams have MS degrees. Some have degrees in fields such as engineering or physics, rather than math.

            Apart from the tests, the tasks a person is asked to do are all business (or legislation) related. No one cares if a person cites a dozen peer-reviewed references. They would much rather have solid data and a good understanding of the situation. The concern is seeing the big picture and putting together an accurate forecast. Peer reviewed papers play only a small role in the field, unlike academic fields. Of course, no one gets a Ph. D., but that is not what employers are looking for.

        • ejhr2015 says:

          The version I know is;
          Expert: one who knows more and more about one thing until he knows everything about nothing.

      • I think it was George Mobus (questioneverything.typepad.com) who pointed out that any one who can claim status as a scientist has spent a good portion of their lives devoting themselves to the pursuit of a limited range of knowledge. You don’t get a PHD and maintain a career in your chosen field by spending your valuable time and energy on more than you need to know.

        Even the supposed ‘big picture people’ fail to put all the pieces together and I think it’s that the always skew their perspectives according to the their pet theories or motivations. I’m thinking of Kunstler and Greer. Each have a point to prove. They think about how things SHOULD go according to their particular visions of what human society SHOULD be. The titles of their fictional works speak to this. Kunstler wants a ‘world made by hand’ where craftsmanship and smalltown chumliness create order out of chaos. Greer wants his ‘Retrotopia’ to take everything that is ‘good’ about our civilisation to ‘magically’ create sustainability out of the inherently unsustainable.

        I prefer to read how things HAVE gone, ARE going and are LIKELY to go uncoloured by utopian nonsense.

        • Van Kent says:

          “I prefer to read how things HAVE gone, ARE going and are LIKELY to go uncoloured by utopian nonsense.”

          Yup, but where can one find such uncoloured facts, knowledge, information and wisdom?

          I like what Johan Rockström does in the Stockholms Resilience Center http://www.slideshare.net/michaelnewbold980/rockstrom but that is not the entire picture, economics, finance etc. are still missing, I haven´t seen anywhere anything like what Gail and this blogs commentators are producing..

          • megacancer james says:

            To see what we are and what we are doing you must understand the sudden transition of humans to an old role (RNA) within a new technological/cellular, growing system at the human scale. Since it is a rehash of something that has happened before with cells, the outcomes can be predicted. If Darwinian evolution were not enough to challenge religious orthodoxy, this understanding of systemic organization and man’s place within it certainly goes a step further. And since human brains are essentially elaborate reward seeking and acquiring organs (afterlife included) then that is what humans will do even as the poisons accumulate and the diminishing rewards result in a competitive melee.

            Most humans are only psychologically adapted to look on the brighter side of life with the potential for many future rewards. Instead, as Dr. Mobus has suggested, we may be on a course to validate Fermi’s Paradox.

            • Stefeun says:

              Good point James,
              and well said.
              Incredible at what point it can be difficult to announce bad news to people who don’t want to hear about. The bling-bling winners wear blinkers (I guess the blinkers are by Cartier or Dolce Banana)

        • Fast Eddy says:

          ++++ x 678.987

        • xabier says:

          Very true, and an important factor is that both Greer and Kunstler have futuristic books to sell, so they have to come up with an essentially comforting narrative. Greer is also intolerant of dissent, and likes to speak ex cathedra to his assembled accolytes.

          Both have gardens though, and are not mere intellectuals, for which they must be respected. If only Greer weren’t so pompous……

        • It is hard to sell book if they don’t provide a rosy view of the future. Many publishers won’t publish books with disturbing endings. I know that Springer won’t, for example. Their model is to sell lots of books over many years that won’t disturb faculty or students.

        • Kunstler is the BEST man describing how things have gone and are going, while Tverberg is the best one describing how things are likely to go.

          “So it is clear that if the industrial system were once thoroughly broken down, refrigeration technology would quickly be lost. The same is true of other organization-dependent technology. And once this technology had been lost for a generation or so it would take centuries to rebuild it, just as it took centuries to build it the first time around. Surviving technical books would be few and scattered. An industrial society, if built from scratch without outside help, can only be built in a series of stages: You need tools to make tools to make tools to make tools…. A long process of economic development and progress in social organization is required. And, even in the absence of an ideology opposed to technology, there is no reason to believe that anyone would be interested in rebuilding industrial society. The enthusiasm for “progress” is a phenomenon peculiar to the modern form of society, and it seems not to have existed prior to the 17th century or thereabouts.” – Kaczynski (2010)

          “It has often been said that, if the human species fails to make a go of it here on Earth, some other species will take over the running. In the sense of developing high intelligence this is not correct. We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance, and one chance only.” – Fred Hoyle (1964)


          I’ve decided to support Kunstler with one cup of coffee a month, roughly 5 dollars I guess. He deserves that!

          By the way, here’s an update from our Easter Holidays: http://permaliv.blogspot.no/2016/03/paske-ved-herr-fossemllens-yensten.html

          • richard says:

            If there are thoughts about rebuilding from scratch, there’s more to it than the effects of resource depletion and preserving knowledge:
            “There are two reasons the site was so useful to the early industrialists. The raw materials, coal, iron ore, limestone and clay, for the manufacture of iron, tiles and porcelain are exposed or easily mined in the gorge. The deep and wide river allowed easy transport of products to the sea.”
            The technologies needed for the industrial revolution were known almost since the bronze age, but until there was an opportunity to exploit these on an industrial scale, there was an inability to expand.
            “Our” best hope is that the population shrinks quickly enough to make mining the cities worthwhile.

          • DJ says:

            Is that from technological slavery?

          • Fast Eddy says:

            Kunstler is a racist bitter old man with little to add to the end of the world conversation ..

            Yes people are fat – yes they are stupid – yes they are jobless – yes they ride around on motorized carts – yes they have tattoos — yes black people commit crime …

            What did Howard expect society to look like as it concludes?

            Oh – and it’s not going to look like what he thinks its going to look like based on my reading of the summary of a World Made By Hand.

            I understand that Delusistan is considering making that book its bible.

            Howard – if you are reading this:


      • Ed says:

        There is one trouble making profession that looks at all the risks actuaries!

      • doomphd says:

        Nuclear faciltities are not run by scientists, they are run by trained technicians and engineers. Most scientists I know are very absorbed in pursuing their particular chosen fields of study. There are few generalists, as the academic system pushes for highly specialized careers. It’s very easy for them to focus on their specialty, as the rewards for doing so are research grants and career advancement. Some of them know the bigger game, but most are willfully ignorant of topics discussed here, i.e., in denial, especially so among the younger ones and the students that need decades to develop their careers. Most like climate change topics, because they believe the worst effects are out in the decades range or longer, and some are getting government and private sector grants to study these problems, but not to fix them.

    • richard says:

      You should have agreed with him.
      Of course they have a plan – it’s called Martial Law.

    • MM says:

      I had a similar discussion in stuttgart germany where they manufacture mercedes cars.
      I told a lady that oil is running out and there will be no more jobs in the factory.
      She said: “Yes but THEY know it and will figure something out”
      Daimler Benz is currently spewing out messages about electrified traffic and autonomous cars (was on the “der Spiegel” title page recently….
      We will see how this turns out. The growth numbers for electric cars (in Germany) are even less than the groth numbers for renewables……………………..

  7. Fast Eddy says:

    Japan follows Canada with helicopter money…

    Japan Goes Full Krugman: Plans Un-Depositable, Non-Cash “Gift-Certificate” Money Drop To Young People

    The Swiss, the Finns, and the Ontarians may get their ‘Universal Basic Income’ but the Japanese are about to turn the Spinal Tap amplifier of extreme monetary experimentation to 11. Sankei reports, with no sourcing, that the Japanese government plans to unleash “vouchers” or “gift certificates” to low-income young people to stimulate the “conspicuous decline” in consumption among young people. The handouts may not be deposited, thus combining helicopter money (inflationary) and fully electronic currency (implicit capital controls and tracking of spending).


    • Stefeun says:

      When they give money to banks and corporations,no follow-up is required, they can use it for seminars in Cancun or weekends at Gstaad.

      If the money (much less money, that is) is given to plebeians, especially to young ones, they want to control the very last cent. People are soooo irresponsible and spendthrift.

      • xabier says:

        A year or two ago in Britain a politician said it was important to target money -tax cuts, allowances – on the poor, ‘as they will be sure to spend all of it.’

        Even more delightfully, a conservative think-tank recommended cutting pensions and allowances to the retired (ie help with heating costs in winter) as ‘by the time the next election comes, many of them will be dead or will have forgotten which party made the cuts, or even that they happened’!

  8. Vince the Prince says:

    Talk about defaults!
    Twenty percent of all federal loan borrowers have defaulted on their loans, according to new data released by the federal government last week. That translates into $121 billion of loans in default. That same data show 40% of all borrowers are not making any payments, and are in some sort of forbearance, delinquency or default.
    Default — the worst category — occurs when a borrower hasn’t made a payment in more than 270 days.
    “This is a slow-moving disaster,” Jason Delisle, director of the Federal Education Budget Project at New America, told the Free Press. “Why no hearings on Capitol Hill? Why isn’t the administration talking about it more
    The federal Department of Education put out a news release with the data, but used it to trumpet the number of people enrolling in income-based repayment plans. Those plans tie borrowers’ monthly payment to how much money they make.
    As of December 2015, nearly 4.6 million borrowers were enrolled in income-based repayment plans, a 48% increase from December 2014 and a 140% increase from December 2013, the department said in its release
    “Basically, many more people realized their income wasn’t high enough to support their loans,” he said

  9. William dunn says:

    For F_E- you likely remember ABENGOA – one of Spain’s most adulated Sol*r subsidy pits – In this article- they’ve went bankrupt – 24000 out of work, and output less than 5% of supposed output – $30BN siphoned away
    This article is pretty good, because it makes it quite clear solar is a money pit, not an energy source

    • I think that the Spanish Abengoa is still on the edge of bankruptcy. http://www.reuters.com/article/abengoa-bankruptcy-idUSE8N15G009 The US subsidiary filed for bankruptcy on Feb. 24. http://www.ethanolproducer.com/articles/13082/abengoa-files-for-chapter-11-bankruptcy-in-us

      The Spanish Government would like to avoid bankruptcy, if at all possible. Look the other way, if it would help.

      • xabier says:

        Well, Gail, the Spanish government, when confronted with the evidence of young people and the better-qualified leaving Spain in large numbers due to the lack of work since 2008, stated that they were ‘simply adventurous souls seeking new life experiences’! Nothing to do with average 25% youth unemployment (50% in the south) and salaries of less than 1,000 euros monthly for graduates with insecure contracts…….

        Lots of propaganda about recovery now in Spain, but anyone involved in retail and services, and any student contemplating their prospects of employment on graduating, knows what nonsense that is.

        Construction is still totally dead in the water and all the industries that used to feed it: a terrible situation for those without other qualifications. Mittal steel just closing their plants in the Basque Country, too.

        Pretty much a big jolt and fall in 2008, and stagnation since then. If they can, young people stay in the university system for as long as possible, to put off the fatal day of job-seeking and in the hope that a further masters will make the difference, and those with families start courses so as to support themselves on the grants and feed their children. I read this about Italy, too.

        • As I talk to my relatives, I see a similar picture of young people always wanting one more degree, in the hope that the new degree will provide a job that will pay well and be something they like.

          As people get older and hit the minimum retirement age of 62 (with reduced benefits) they give up and quit, especially if their old skill is no longer needed (COBOL Programmer, for example). They may quit even earlier if they have some other means of support–working spouse or disability that they can claim. With so many overweight, it is easy for some to claim disability. The combination of many in school and many retiring early leads to low labor force participation rates. These people aren’t considered unemployed, just “not working.”

          • Fast Eddy says:

            I’m seeing lots of kids of friends and relatives finishing up uni here in Canada and not being able to find jobs — if they do find jobs they are low-paying services jobs… that are completely unrelated to their fields of study.

            All attributed to the downturn part of the cycle we are in … things will pick up shortly… this is no different than the many other cycles we’ve lived through.

            I’d like to tell them that this is as good as it is going to get — but what would that accomplish

          • MM says:

            Dear gail, I am working in the field of programming and I can tell you that Cobol programming is a very good skill that is getting out of fashion but can make you a good living.
            Check out this Website:
            “The software for the Therac-25 medical linear particle accelerator also ran on a 32K PDP 11/23.[35] In 2013, it was reported that PDP-11 programmers would be needed to control nuclear power plants through 2050.[36]”
            This actually is not COBOL but many companies have so called “legacy systems” that run a huge amount of old COBOL programms on Mainframes and to rewrite the code in modern languages is quite risky, if you have a system that was running fine for 40 years….

            • I am sure there are some jobs. I happen to know one COBOL programmer who got laid off and ended up working in a fast food restaurant. I presume she looked for and couldn’t find another job in COBOL programming. At one point, there were a lot of COBOL programmers.

    • Fast Eddy says:

      And here I sit in Canada which has just released a new budget and there’s plenty of talk on the Tee Vee about the solar subsidies and green energy initiatives…

      Anyone who does not believe in the matrix just needs to listen to this horse shit…. these rat bastards jabber on and on about how great this is … how we need MORE…. and they really truly believe it!!!

      And the sheeple who watch the Tee Vee believe it too.

      I am starting to think that humans are more easily manipulated than rats or dogs…. we are truly stupid beasts.

      Tee Vee is the purveyor of all evil.


      • Mark Sharkey says:

        I agree with you on TV. Marx would likely say, if he could, that it is the new Opium of the People. Got rid of ours about 40 years ago and have never missed it.

      • durangodan01 says:

        At No. 3 in the list of the great evils is TeeVee. It absolutely props up #1 (Belief in the Validity of Authority) and #2 (faith in our debt based monetary system). TeeVee watchers will never escape the matrix unless they kill their TeeVees and undergo reprogramming. We evolved to trust our audio/visual senses and you simply can’t watch it without succumbing to the propaganda. You just can’t do it!

        • I know that when JM Greer talks to groups, he usually says, “Throw your TV out.” I would agree. It is one of the worst for giving a wrong view of the world, and for blocking out real thinking. We haven’t had a TV for years.

          • MM says:

            JMG predicts a “green energy bubble” to show up next for this year….

            • ejhr2015 says:

              Hang on a minute. Why ever would you expect TV to give you genuine information? It has no mandate for that [just ask FOX] and it’s entirely about entertainment. You can enjoy it for its entertainment value, but if you are prone to think you can do without it then you are vaccinated already against its lies.

        • Fast Eddy says:

          The thing is…

          Once you recognize that you are being manipulated …. and who is doing the manipulation … (the Elders are so kind to have put it all down on paper for you)

          You get the antidote to the Tee Vee and the MSM…. the addiction is broken … a disdain develops… you question everything … you look for agendas … you assume virtually everything you are told is a lie… a half-truth….

          It becomes very difficult for anyone to manipulate your thoughts….

          On the down side… rejection of all versions of the Matrix can potentially lead to profound unhappiness… it can leave you a lonely observer wandering through the zoo…. it can also — if you attempt to explain the Matrix to the caged animals — ostracized… ridiculed…

          • B9K9 says:

            Why does it make you unhappy? Actually, I find the reverse to be true – once you understand the game being played, it makes one eager to join. I sometimes kick myself that I wasn’t bright enough to figure the system out earlier. But, better late than never.

            Once you’re completely free, TV transitions from waste to value. Once you understand the programming, then it forms the basis for excellent mind exercises. You can test yourself in identifying the target audience(s), the technique/style being utilized, the newest shooting angles, editing/cutting, etc all formed to trigger rapid emotional responses that are primed for the message being delivered.

            Being free is incredibly liberating – it’s how people begin to make really big money. I don’t mean just comfortable eg like early retirement in my case. No, I mean seeing it all laid out crystal clear. A poster above mentioned two big lies: (a) authority & (b) debt money. But why waste your time trying to explain the situation to the sheep? Why not be part of the system that promulgates the lies?

            • Fast Eddy says:

              It doesn’t make me personally unhappy ….. but for many — if they stepped out of the Matrix into Realitystan…. that could cause extreme distress… the Matrix is their foundation … it gives them comfort…

              Like Jack says… some people don’t want the truth — because they can’t handle the truth:

  10. Jan Steinman says:

    In an interconnected system, it is sometimes hard to understand what causes the system to fail. Is it too little production of energy products, or too much entropy associated with these energy products? Astrophysicist Francois Roddier tells me that he thinks it is too much entropy that causes the system to fail

    This fits in well with Joseph Tainter’s thoughts, as well. Tainter (The Collapse of Complex Societies) (full download available) says that the complexity of civilizations tend to increase faster than their resource base, until most of their resources goes into maintaining complexity, rather than providing goods and services to its citizens.

    This also fits in well with Panarchy Theory, which states that all things, from subatomic particles to galaxy clusters, go through a cycle of increasing resource use and interconnectedness, until they collapse and disassemble.

  11. Jan Steinman says:

    Governments can print money, but they can’t print resources.

    Another pithy phrase goes into my database of my favourite 8,000 or so quotes… 🙂

  12. durangodan01 says:

    Finite Worlders: I’ve been a long time admirer of Gail’s analyses. They are simply top notch; even better than Chris Martenson, and he’s very good. Today is my first day of participation in the dialogue here. Let me give you my conclusions stemming from thousands of hours of viewing and reading alternative media. This is what is required to create peace and prosperity on the planet and even assuming that this is done the transitional period will be hell to say the least.

    1. Stop believing in the validity of authority. Psychopaths strive to rule. They run the best campaigns because they lie so convincingly and you vote for them. Then you grant them powers that you don’t even possess. See the contradiction here? They have authority that came from where? For clarity on this topic I suggest all things by Larkin Rose, starting with the YouTube “The Tiny Dot”.

    2. We must put an end to the criminal fractional reserve debt based monetary system and go back to 100% gold and silver backed money. The debt based monetary system is what drives the exponential consumption that has created the monstrosity that is our current economy which as you all know is now on the verge of total collapse.

    That is all. Just two fatal flaws. Fix them and the world is a much better place.

    • MM says:

      We can not end the fractional banking system because we need someone to print the energy

    • bandits101 says:

      You are the epitome of a psychopath. The world didn’t leave the gold standard to be evil. The human population had tripled from the turn of the century, resources to facilitate that kind of growth had to be exploited. Debt was required. You want to blame someone/something, blame your damn self.

      • durangodan01 says:

        You express the sentiment that resource exploitation is good, but fossil fuel burning is bad. I see a contradiction here or am I confused? By the way, I am an INTJ and INTJs are very rarely psychopaths, if ever. Analytical? Yes!

        • “You express the sentiment that resource exploitation is good”

          I think you are reading positive and negative feelings about things where they are not intended by the original poster. All the previous poster said is that population grew and consumed more resources, so they used debt instead of gold coins. An observation of what happened, not a value judgement.

    • Actually, we really need a system that is not tied to gold or silver if the economy truly is going to grow.

      If the economy is going to shrink (which I think is going to happen), then we have a different group of problems. The big problem is debt defaults. The more debt outstanding, the more shrinkage is likely to occur.

      • durangodan01 says:

        It is a foregone conclusion that the current system will implode. The root cause that allowed for exponential unsustainable growth was the final removal of the golden handcuffs that until 1971 prevented full-blown runaway consumptive debt. Switching to unbacked fiat currency allowed the financialization of the planet with its parasitic expansion of government and the financial sector. Post collapse we need to return to honest money or the cycle will just begin again. Of course we will be faced with much lower energy inputs since we blew through what should have been 1000 years of fossil fuels in less than 100 years. How stupid!

    • DJ says:

      What would a honest (maybe none) Government and an honest currency solve at this point?

      And how could it happen when 99% believe in democracy and development?

    • richard says:

      The fractional reserve system ended the moment banking went off the gold standard. Indeed it could be said that this was the entire purpose of the change.
      Want to try for two out of three?

      • durangodan01 says:

        I must agree. Leaving the gold standard put us on a purely fiat standard with no reserve requirements. Now when you charge to your credit card, the newly created “money” springs into existence straight out of the thin air. The bank pays no depositor interest, not even 0.25% and receives what … 12% and maybe more. What a racket. Spot on Richard. Thanks for the correction.

    • Pintada says:

      Dear durangodan01;

      “Stop believing in the validity of authority. Psychopaths strive to rule.”
      This from a man who is a card carrying AGW denier! LOL



      Yours in Delusion,

      • durangodan01 says:

        Pintada, When the MSM puts as much effort into keeping the climate scam going it should be pretty obvious to most on this site that the truth is about 180 degrees from the story line. AGW is now a multi 100 $billion per year industry paid for by your stolen tax dollars. All complete nonsense. What a waste!

      • Pintada says:

        Dear durango;

        I didn’t know that the Attorney General for New York was part of the MSM. Sorry, my mistake.

        You deny AGW because the masters of the GOP told you to on FoxNews.


        • durangodan01 says:

          As Will Rogers put it “the problem isn’t what they don’t know; it’s what they know that just ain’t so”. So long as you continue to listen to governments and the MSM you will remain ignorant of the truth. Truth seeking begins only after killing your TeeVees. It’s a joyful liberation. The real world lies outside the Matrix and I must admit it is indeed strange.

          • Pintada says:

            Dear durangodan01;

            the theory of knowledge, especially with regard to its methods, validity, and scope. Epistemology is the investigation of what distinguishes justified belief from opinion.

            Again, why are you correct? Have you ever considered your sources, and why you believe them?

            Can you find a reference that you think that I might grok? Why not?


            • durangodan01 says:

              Pintada, If you read “The Shattered Greenhouse” and fail to conclude that AGW is fraud, I’m afraid there isn’t much I can do to change your mind. For me, the money shot was somewhat buried in the article. Here it is “… Fourier’s Law, and only Fourier’s Law, can describe the transfer of heat between bodies in thermal contact. Thus the distribution of heat between the atmosphere and the surface of the earth, with which it has thermal contact, cannot be correctly calculated using the radiative transfer equations derived from Boltzmann (1884) because the thermal contact of these bodies makes this a question of Fourier’s Law.” The bait and switch tactic used by the climate fraudsters in making believe that “radiant energy” from the earth’s surface (rather than thermal conduction and convection) can make a round trip from surface to atmosphere and back to surface, thus making the atmosphere an additional energy source is nothing short of lunacy. Yet the sheeple believe. Programming at its finest.

            • Please explain why the jar with the higher carbon dioxide concentration is hotter:

              I have not setup my own test, and I cannot verify whether the atmospheric pressure inside both jars is identical. It appears there is a small opening at the top of the jar where the carbon dioxide is being added, so they should both be at ambient pressure.

            • Jan Steinman says:

              If you read “The Shattered Greenhouse” and fail to conclude that AGW is fraud, I’m afraid there isn’t much I can do to change your mind.

              Based on the passage you cited, I would say rather that The Shattered Greenhouse is the fraud, perhaps based on wilful disunderstanding of the mechanisms behind the so-called “greenhouse effect.”

              The sun is shining. I just went out to the greenhouse. It was 40°C in there, but only 12°C outside. The polyurethane greenhouse is transparent to high-frequency energy, which comes through and is absorbed by the dark earth inside, which re-radiates it as low-frequency energy (IR), to which the polyurethane is opaque. Boltzmann wins.

              I opened the sides, and the temperature went down to 30°C, due to convection. Fourier wins. But unfortunately, the CO2, CH4, and other human-generated greenhouse gasses don’t have side vents like our greenhouse does. Boltzmann wins again.

              The forecast is for 800°C on Perelandra today — much warmer than it should be, given it’s distance from the sun. Boltzmann wins again.

              What is the problem here? Why is that so difficult for “deniers” to understand? Why do they have to indulge in pseudo-scientific gobbldy-gook about Fourier and Boltzmann to try to hoodwink the scientifically-illiterate? (Why does @durangodan01 willingly include himself among the latter?)

              Two years in a row, our pear trees are blooming a month early. I record first and last frost every year, which is usually mid-October and mid-March. The past two years has been mid-November and mid-Februrary. It is measurably warmer.

              Yea, I’ve heard the arguments. There is no global warming. But if there is, we’re not causing it. And if we are, we will adapt. And if we don’t, technology will solve things. And if it doesn’t… ad infinitum.

              Personally, I don’t think we need worry too much about it, because we’ll soon run out of the source of the problem. But that’s no reason to deny the sound science behind it. And it’s certainly no reason for aware people to not do what they can to get off the fossil sunlight economy.

          • durangodan01 says:

            Right in front of you the lights are flashing, the sirens are wailing and the bullhorns are shouting “The End is Near, Fossil Fuels are Killing our Planet”. Meanwhile behind the curtain the banksters are trying to continue the pyramid of debt that has allowed us to consume 1000 years of fossil fuels in my lifetime. In the past 8 years alone we’ve pulled about 20 years of future demand into the present. Focus on the real problem not the diversion.

            • Fast Eddy says:

              They are focused on the immediate problem – keeping civilization alive…. and to accomplish that they need to pull the future to the present….

              There is no alternative

          • Pintada says:

            And you are the one to tell me what is real and what is not? Hilarious.

            You know I have a better science resume than the denier geologist that you posted. Why is he some sort of genius, and I am so pathetic that I should be taking advice from you? You said that you have some analytical skills, why do they not show?

  13. Fast Eddy says:

    After howling and roaring in pain the beast is lying in the corner … bleeding out …

    In One Year The US Mining Industry Lost More Money Than It Made In The Prior Eight

    For anyone still looking for context to the biggest ever collapse in commodity prices in history, one far sharper and now longer than that in the deflationary aftermath of the Lehman failure, look no further than the chart below: as the WSJ notes, the U.S. mining industry, a sector which includes oil drillers, lost more money last year than it made in the previous eight.

    Mining corporations with assets of $50 million or more recorded a collective $227 billion after-tax loss last year, according to Commerce Department data released Monday. That one year loss wipes out all the profits the industry had made since 2007, or almost a full decade worth of profits, gone in 12 months.


    It wasn’t just shale drillers: other types of mining operations were stung by falling commodity prices tied to weak demand from China and other parts of the globe. Mining revenues also fell sharply, down 38% in the fourth quarter from a year earlier.

    The faltering global economy also stung the manufacturing sector: as the WSJ notes, manufacturing revenue declined 7.8% in the fourth quarter from a year earlier, meaning dropping global demand for U.S.-made goods, which is nowhere more obvious than in Caterpillar’s impploding retail sales.


    Finally, the WSJ hedges by saying that the declines come despite steady, if unspectacular, demand on the part of U.S. consumers. “Retailers’ revenue grew 1.5% in the fourth quarter from a year earlier. Annual revenue growth was between 1.5% and 2% all of last year. Retail sales tend to match up with other measures of consumer demand.”


    One wonders how much longer the retail sector can sustain the headwinds from the manufacturing collapse if oil fails to rebound strongly back to where it needs to be for profitability to return to the mining sector, somewhere well north of $50.


    • Yoshua says:

      A price collapse in commodities leads to a collapse of the entire economy ?

      The price collapse in commodities (oil, minerals, food), leads to commodity producers collapse, which leads to machine producing manufacturer’s collapse, which leads to financial institutions collapse.

      I guess that since the cost of commodity production is so extremely high today the economy has become extremely volatile. A collapse in commodity prices will destroy the entire economic base that everything is built on and when the fundament crumbles then everything comes down ?

      • A collapse in commodity prices reflects the fact that an awfully lot of people are not earning enough to purchase the output of the system. We need a system where workers can afford to buy cars and homes. Otherwise the system comes down.

        Those producing commodities need to earn a reasonable profit for the system to continue. Once this doesn’t happen, the system falls down.

    • Thanks for the links! I am sure mining includes coal as well, and it no doubt includes natural gas. All of these industries are doing miserably. There might be a little metals in there too–I’m not sure how much we mine any more.

  14. Don Stewart says:

    Dear Gail and Finite Worlders

    A few notes triggered by morning coffee, Andreas Weber’s The Biology of Wonder, Ugo Bardi’s current post about how language has backfired on us, and posting themes on this blog.

    Beginning on page 238 of the English translation of Weber, we read:
    ‘Nature inside of us does not impede us because it is raw and untamed and we are not. Nature is as ambivalent as we are…nature’s heritage is not a perfect arrangement of useful qualities but a host of many options….Every degree of freedom that is added introduces a greater potential of creation and thus of suffering.’

    So of course Bardi can find evidence that language is a double edged sword. The same can be said of gunpowder or nuclear reactors or plows or the domestication of animals. All these extensions of human power are likely to yield ambivalent results in actual practice. And if you read George Mobus’ current post (which I linked to recently), you will find that he still can’t find the sapience in homo.

    Continuing on page 242: ‘Today, complexity researchers have discovered a host of biological processes that are not controlled by genes and thus are not able to be selected as ‘fit’ or to be discarded as ‘unsuitable’. The tiny pores that a plant uses for respiration on its leaves’ surfaces, for instance, are not distributed according to the greatest efficiency brought about by selective pressure. The pore patterns rather self-organizes in each growing sprout in a very simple but highly regular fashion…’self organization’ is the key word for a process that does not know a specific direction but nonetheless always arrives at its destination.’…shape is not won on the battlefield. It comes as a gift. Is is ‘order for free’.’

    I suggest that Adrian Bejan’s Constructal Law is relevant. The form of a tree or river basin or the pores in a plant leaf or the organization of a corporation all follow the Constructal Law. Bejan resists attempts to reduce the constructal process to some more elementary process, claiming that it is simply a Law of Nature.

    On page 244, Weber begins a section titled The Fourth Law of the Thermodynamics of Life: Diversity Shall Be!
    ‘Darwinian evolution might be a special case of a vastly more comprehensive scenario of self-organization. ‘Self-organizing systems can only be influenced to a certain degree by selection.’

    And here, I think, we have one possible answer to George Mobus’ irritation that homo are not sapient. Back on page 243, Weber quotes the biologists Maturana and Varela : ‘Evolution is somewhat like a sculptor with wanderlust: he goes through the wood collecting a thread here, a hunk of tin there, a piece of wood here and he combines them in a way that their structure and circumstance allow, with no other reason than that he is ABLE to combine them’.

    Humans, stumbling around in the woods, found fossil fuels. And using fossil fuels triggered some neurotransmitters and hormones by way of complex mechanisms which became more and more powerful thanks to the Constructal Law. While it is theoretically possible that homo might have been sapient enough to keep the fossil fuels in the ground, or to strictly ration the daily consumption of fossil fuels…there is precious little evidence that anyone should have expected such an outcome.

    And on to the Second Law: ‘For a long time it seemed quite enigmatic that organisms do seem to win, at least for the limited time of their individual lifespan. Living beings obviously are able to steer clear of dissolving into inert matter. Instead, they multiply, create ever more complicated ecosystems and obviously swim against the tide of physics.

    Brooks and Wiley ‘stress that living systems are open, not closed as machines are, but they still overlook that this openness introduces the factor of selfhood into the world. This factor is nothing material. It is the overall sphere of meaning generated by living systems—the diversity of structures, forms, and behaviors, as well as the diversity of experiences.’

    And so…Weber brings us back to his overall insight that living creatures want to experience the feeling of flourishing. ‘The feeling of flourishing’ will fit awkwardly into a thermodynamics textbook…but I don’t think we can understand what is happening in the world and take actions which are right for us without making that connection.

    On page 245, Weber introduces this notion: ‘Stuart Kauffman even proposes a Fourth Law, which he half-earnestly states as ‘The game becomes more and more complicated and new rules are emerging constantly.’…the world explores ever more structures….they cannot be reduced to any scientific boundary conditions; they have to be lived. The game of life has to be played in order for its full depth to be explored. And by playing it, meaning inevitably increases.’

    ‘Erich Schneider claims that like many spectacular physical phenomena that are difficult to compute—for instance, turbulence between two distinct layers of air or water currents—life is a phenomenon that unfolds in relation to a concentration gradient. And within this gradient between chaos and order it does not behave fundamentally differently from all other physical systems, which are provoked by such interfaces to form complex self-organizing patterns. Their beauty then, in truth, is nothing other than an inevitable structure formed by the system during a process, which as a whole can be described without contradicting the Second Law.’

    Some speculation on my part. There are many posts here which try to ascribe our current environment to innate human nature…usually that humans are a nasty piece of work. Yet the facts are that the world has never been more peaceful. I suspect that what we have been experiencing in recent decades is the fact that fossil fuels have been abundant and the Constructal Law has worked to promote structures which have facilitated the flow of the energy contained in those fuels. We can summarize the structures with the words ‘global capitalism’. When nation states were dominant, as in the Roman Empire and the Spanish Empire and the British Empire, the world was a lot more violent as competing nation-states fought each other. But global capitalism is the world where corporations are far more powerful (in day-to-day matters) than any nation state. And corporations as a whole are not in favor of war. The arms manufacturers want a constant threat of war to generate more business for themselves, but I don’t think even arms manufacturers want a global nuclear exchange.

    More speculation. We may very well be at the end of the age of Oil, and thus of global capitalism. If so, then I expect that there will be a lot of suffering as the current system collapses. We can also imagine more positive outcomes. For example, the extreme variance between available solar energy and fossil fuel energy currently generates a lot of the turbulence that is damaging the ecosystems which supports us. We have not succeeded in getting a stable gradient between ‘chaos and order’. For example, in natural systems, everything is recycled. Recycling in a fossil fuel powered system is usually not very helpful and just generates more waste. We might be on the road to the re-establishment of a stable gradient. Like a river which tumbles out of the mountains and onto a broad plain, the flow may become much more orderly.

    So…what can individuals do about all this? My suggestion is to ‘create meaning’ by creating structures which harness solar power in such a way that one’s neurotransmitters and hormones are tickled in a pleasing manner.

    What individuals cannot do, in my opinion, is to keep the world from changing. And with change will come some inevitable suffering.

    Don Stewart

  15. Vince the Prince says:

    Hate to be a wet blanket but…..Global Warming’s Terrifying New Chemistry
    Our leaders thought fracking would save our climate. They were wrong. Very wrong.
    By Bill McKibben
    Global warming is, in the end, not about the noisy political battles here on the planet’s surface. It actually happens in constant, silent interactions in the atmosphere, where the molecular structure of certain gases traps heat that would otherwise radiate back out to space. If you get the chemistry wrong, it doesn’t matter how many landmark climate agreements you sign or how many speeches you give. And it appears the United States may have gotten the chemistry wrong. Really wrong
    …In February, Harvard researchers published an explosive paper in Geophysical Research Letters. Using satellite data and ground observations, they concluded that the nation as a whole is leaking methane in massive quantities. Between 2002 and 2014, the data showed that US methane emissions increased by more than 30 percent, accounting for 30 to 60 percent of an enormous spike in methane in the entire planet’s atmosphere.
    …..These leaks are big enough to wipe out a large share of the gains from the Obama administration’s work on climate change—all those closed coal mines and fuel-efficient cars. In fact, it’s even possible that America’s contribution to global warming increased during the Obama years. The methane story is utterly at odds with what we’ve been telling ourselves, not to mention what we’ve been telling the rest of the planet. It undercuts the promises we made at the climate talks in Paris. It’s a disaster—and one that seems set to spread

    It gets worse…Howarth and Ingraffea began producing a series of papers claiming that if even a small percentage of the methane leaked—maybe as little as 3 percent—then fracked gas would do more climate damage than coal. And their preliminary data showed that leak rates could be at least that high: that somewhere between 3.6 and 7.9 percent of methane gas from shale-drilling operations actually escapes into the atmosphere.

    Ouch…bye, bye Fast Eddy…be careful what you wish for

    a methane molecule lasts only a couple of decades in the air, compared with centuries for CO2. That’s good news, in that methane’s effects are transient—and very bad news because that transient but intense effect happens right now, when we’re breaking the back of the planet’s climate. The EPA’s old chemistry and 100-year time frame assigned methane a heating value of 28 to 36 times that of carbon dioxide; a more accurate figure, says Howarth, is between 86 and 105 times the potency of CO2 over the next decade or two.
    …….a very long article…concluding.
    The global-warming fight can’t just be about carbon dioxide any longer. Those local environmentalists, from New York State to Tasmania, who have managed to enforce fracking bans are doing as much for the climate as they are for their own clean water. That’s because fossil fuels are the problem in global warming—and fossil fuels don’t come in good and bad flavors. Coal and oil and natural gas have to be left in the ground. All of them.

    Well, perhaps Mr McKibben will get his wish after all if Gail is correct….we can only hope!

    • Vince the Prince says:

      Here is the link to Bill McKibbens full article posted in “The Nation”
      New Chemistry
      Our leaders thought fracking would save our climate. They were wrong. Very wrong.
      By Bill McKibben

      • Fast Eddy says:

        Nobody thought fracking would save our climate — what they saw was peak oil had hit — oil was $147 and destroying the economy ….

        And the decision was made to ‘drill baby drill’ — and that has contributed to us being alive for another 8 years.

        Nothing more. (although that is quite an accomplishment)

        Hail Fracking. Hail Shale Oil.

        • Vince the Prince says:

          Again, you are comprehending what is pointed put in the article regarding methane.
          There ain’t going to be a tomorrow with it or without it….capisce?
          Folks always believe climate change is something to the distant future….its gonna happen when I’m dead and gone….nope, Fast Eddy…its hitting hard and right at you with a 4 by 4 across the …

          PS the devil is in the details….now go pull some twich grass.

          • Fast Eddy says:

            Nah… the twitch is half a world away… and going dormant as the cold weather begins…

            Instead I am heading out the the arena for some pick up hockey…. then I’ll come back and celebrate this tremendous news with a glass of champagne (well… actually it will be beer … it’s bubbly too of course)

            Then I will see if I can find a coal dealer and order in a giant truck load and set it alight in the backyard just for the fun of it — every good misanthropist needs to do his/her part.

    • Fast Eddy says:

      ‘Ouch…bye, bye Fast Eddy…be careful what you wish for’

      Wishes do come true! So now we have the ponds – the dead soil – and methane release…

      The Dream Team of Extinction!

      This truly makes my day!



      • Vince the Prince says:

        See Fast Eddy, just wanted to add to the list of extinction pile of things we did not even think of that you spoke of in a previous post. What will do us all in first?
        My pick is a massive worldwide crop failure…due to all of the above!

        • Fast Eddy says:

          My money is also on the apocalyptic horse named Starvation.

          In fact if this were a casino I’d bet everything I own and my life on there being virtually no food post BAU.

          Nearly 100% of all food is grown using petrochemicals — so when those chemicals are not longer available you may as well try to grow food on a patio stone — and most organic farms rely on outside inputs including pumped water for irrigation.

          Throw in the fact that 7.4B people will kill everything that is edible and tear every bit of food from the ground in an effort to stay alive … and you’ve got yourself a very comprehensive extinction event.

          There is no way around this.

          • Kurt says:

            Hey, wait a minute! I tried to bet you that things will be pretty much the same in 5 years and you chickened out (or turkeyed out). Now you want to bet your life? I agree, it’s going to get hotter and there are going to be a lot less people – but not anytime soon.

          • Pintada says:

            Well, Fast Eddy;

            When you get it right, you get it right.

            There is no way around this,

      • Van Kent says:

        Russian Roulette:
        ponds – the dead soil – and methane release – virulent strains – famine, with five bullets in the chamber..

        I don´t think that many people will enjoy playing this game in the long-long run..

        • Fast Eddy says:


          I’ll reiterate this:

          If anyone survives the end of BAU — they will wish they had not.

    • durangodan01 says:

      Please read Tim Casey’s paper: “The Shattered Greenhouse”. Here’s the link: http://greenhouse.geologist-1011.net/ Then realize that the atmospheric “Greenhouse Effect” in addition to being a complete misnomer is itself a disproven theory. Yet it is the entire foundation of the global warming swindle. Try to find the magical properties of CO2 and CH4 which enable them to “trap” heat described in any university level physics text book. Such books don’t exist because the magical properties don’t exist. Anthropogenic Global Warming is one of the greatest scams of all time. Don’t fret over it and don’t waste time reviewing the anecdotal data. Data can be manipulated to show anything. The weather is constantly changing and records are being set somewhere every day. The falsity of the “greenhouse effect” is all you need to know to understand it is fraud.

      • Fast Eddy says:


        So shall we get back to the real extinction threats. Spent Fuel Ponds. And total starvation that will occur when the petro chemicals are no longer available and the soil cannot support crops.

      • Vince the Prince says:

        Well, let us take a look at the author Tom Casey from his own website

        Professional Summary
        For the past ten years, I’ve worked my way up in the petroleum industry, from chip-logging (“mud-logging”) to well-site geologist and drilling supervisor (“company man”) often consulting in a project management capacity. In addition to my honours degree majoring in geology, I have a BOP ticket and 4×4 accreditation. I also have excellent problem solving abilities as shown by this web-site, which combines fixed branding, dropdown menus, Triple-A rated accessibility for visually impaired, standards compliance, compatibility with all browsers, and functionality under all security settings. As solving these complex web design problems is not strictly within my field, I believe I can go much further working within my field for your company.

        Looks like Tim has direct ties with the fossil fuel industry….Well well imagine that coincidence!

      • Vince the Prince says:

        Just try living without the greenhouse effect, durangdo!

        • durangodan01 says:

          Shoot the messenger if you must but consider the message. I’m part physicist, part engineer and I depend on the fossil fuel industry for my paycheck and creature comforts. I can’t refute Tim Casey’s physics. That’s your challenge! By the way, all mass can store heat, even the atmosphere especially when surrounded by the vacuum of space. In other words, no greenhouse effect required for life on earth. Water, the magnificent molecule plays a key role with phase change and all that. And CO2, the building block of life. Love it.

          • Vince the Prince says:

            Maybe YOU can’t refute older Tom, but the IPCC and all major scientific organizations and Universities certainly have, Durango.
            Many science academies such as the National Academies of Science and the Royal Society have very strong statements about climate change.

            Name just one that supports his…..

            • bandits101 says:

              Yes Vince, without the greenhouse effect the Earth would be frozen.

            • durangodan01 says:

              Vince, Just consider for one moment that these agencies may be dependent on the funding that AGW brings them by the boatloads, including NASA and NOAA. As has been said, a man whose livelihood is dependent on him maintaining his ignorance will continue to do so. What I find so interesting about the AGW believers is that somehow all of the climate change must be bad. In most things that change there are winners and losers. Personally I prefer 72 over 32. I’ll enjoy the weather one day at a time rain or shine. I’m just glad I’m not in Denver today.

          • Vince the Prince says:

            Like you state Durango, you and Tom depend on the fossil fuel industry and as you state you will deny any harm from it. Not one science based world body or university.
            Please, you expect to accept your own Physics?
            I’ve been down this road before and all you do is Twist and in the facts.

      • Veggie says:

        While the argument may discredit Anthropogenic Global Warming, I wonder if the severe threat of Anthropogenic Global “Atmospheric Polluting” still remains ?
        As an example, does current data not support the acidifying of oceans which are absorbing great amounts of C02?
        There still seem to be consequences to non-natural production of C02 and Methane.

      • durangodan01 says:

        Bandit, The Great Evil is our debt based monetary system which requires exponential growth as Gail has so eloquently explained time and again. Don’t be diverted from the true evil doers, be they financial oligarchs or their corporate and political underlings. Divide and rule is key ingredient of their game plan. I’m not your enemy. Again, if you or anyone else have the competence, check Casey’s physics and report back.

        • Fast Eddy says:

          ‘great evil’ — really?

          Without this system we would have collapsed back into the stone age centuries ago….

          Shall I explain?

          • durangodan01 says:

            Fast Eddy, Actually the DBMS is just number 2 on my list of evils. Belief in authority clearly wins the big prize with 100s of millions murdered. At number 2, the debt based monetary system is just a weapon of enslavement not execution. Still pretty evil by any measure. I should clarify that I’m speaking of consumptive debt not the useful self-liquidating debt that has been used to grow economies and develop technology. Thanks for letting me clarify.

        • bandits101 says:

          You are a damn liar nothing less, and your ilk have been the enemy of the earth for decades. Attempting to refute the PROVEN science of the greenhouse affect, is akin the religious denial of evolution.

          • Fast Eddy says:

            I am thinking of having some t-shirts made:


            On the back will be the graph showing the 1:1 correlation between GDP and fossil fuel consumption

        • It is not the debt based monetary system that is evil; it is that fact that we cannot save up enough in advance to pay for fossil fuels goods, because they are such a step-up in our life style. We have to have debt to use fossil fuels, and the debt-based monetary system is what has allowed this to happen. It has even allowed prices (and debt) go rise to ridiculous levels. But like stretching a rubber band, this cannot go on. The issue isn’t the debt-based monetary system, though.

        • “The Great Evil is our debt based monetary system which requires exponential growth as Gail has so eloquently explained time and again”

          I think you’ve missed the point. Civilization requires exponential growth. Whether you use digits or pieces of paper or gold coins is irrelevant. The energy is what matters.

      • Fast Eddy says:

        I wonder which would be considered worse — denial — or apathy

        • Vince the Prince says:

          Knowing, yet not knowing….believe the Germans during the WWII had a word for it.

      • You can test it yourself to see that carbon dioxide reflects infrared waves, causing the temperature to rise. It is a simple test you can do to prove it for yourself:

        Just stop watching when he starts proposing solutions and mentions “unlimited energy”.

  16. Fast Eddy says:

    Credit Suisse Blames “Worst January Ever” On Rogue Traders; Fires 2,000

    When last we checked in on Credit Suisse, things weren’t going so well.

    The bank had just reported a $6 billion loss – in the fourth quarter. The red ink for 2015 totaled some $3 billion, representing the firm’s first annual loss since the financial crisis. Shares promptly plunged 13% to their lowest level in nearly a quarter century.

    That was the first time the market got a look at a report issued under CEO Tidjane Thiam’s new structure which aims to increase the bank’s focus on wealth management while scaling back investment banking where revenues fell 17% last year thanks to market “volatility.” Fixed income revenue plunged by two-thirds.



    • The banks are doing miserably, especially in Europe!

      • richard says:

        Miserably? Maybe worse to come:
        “Central banks can ignore the CDS market, but they cannot imagine away the losses coming through the system. They cannot save the banks now, without creating a recession, with all the consequences that has for bad loans and falls in GNP. The fall in productivity is already encouraging companies to eschew capital spending in favour of buy backs, which compounds the problem of credit growing faster than the economy. Profit margins are naturally falling as wages rise faster than prices and overcapacity rules out pricing power. No wonder that central banks feel that they are nearly out of ammunition. There is not a good choice to be made”
        “However, several years of watching central banks responding to ever falling productivity numbers by reducing interest rates have shown that they can effect asset prices with their actions, but that not only do they have almost no effect on economic activity, but they positively damage it.”
        “And this is where it gets interesting, because these losses are undermining the loans that these industries have. As bonds due for redemption trade below par, companies are drawing down credit lines, which would usually be the signal that bankruptcies would follow. However, because of the very weak profitability of the banking sector, these banks are not able to absorb these losses. As they wait, their loan becomes the cash to pay back the bonds and their losses expand. Banks now need rights issues but the central banks’ attention remains on trying to lower rates to reflect falling productivity. There is thus no story to attach to a rights issue for a bank. The only way that the banks would be a buy is if interest rates were to go up, repricing assets relative to deposits, but that can never be because down that route lies recession. And strangely recessions are no longer permitted. However, negative productivity rates are already telling the central banks that any growth in nominal GNP is the equivalent of eating your capital.”

        • Thanks!

          He also says

          Despite this strong rally, there is, aside from a pickup in government spending in China, little to support growth in the world economy. Everything from rising default rates in the booming auto financing industry to new lows in LNG, dry bulk shipping prices, points to slowdown everywhere.

          For equity markets, a world without credit is for now a deflationary world. The underperformance of the banking, insurance and asset management industry warn that this is when equities can de-rate as the Japanese stock market did between ’96 and ’98.

  17. Stilgar Wilcox says:

    Great article about oil affordability and how that limits the reserves we can tap. You need to go to the article to see the graph they are referencing.


    ‘It’s Not Peak Oil, It’s Peak Affordable Oil’

    What is ‘affordable’ depends a lot on the health of the economy and on the incremental cost of extracting each harder-to-get barrel of oil. For most of the last half century, what was affordable was somewhere between $30-60/barrel. When oil prices have soared to the $100/barrel level, the economy has almost immediately started to tank.

    ‘Business as usual’ over the last 50 years is shown by the supply/demand curves labeled S0 and D0, intersecting at around $60/barrel. This is a price that historically has been high enough to allow continued exploration but is low enough that consumers and industry can afford it and still make a profit (and not go into unrepayable debt).When OPEC (or political events) have conspired to constrain supply, the supply curve has shifted over to the S2 curve, and demand has necessarily been reduced to the D2 curve, leading to a $100/barrel price (where S2 and D2 intersect). This has proven to be an unsustainable price, and political pressures (i.e. wars, and threats to OPEC partners) have always been applied when the price has reached this level to get suppliers to pump more oil and move the curves back to the S0/D0 $60/barrel level.

    But it’s a difficult balancing act. As cheap (inexpensive to extract) OPEC oil rapidly diminishes, and as the remaining oil becomes more expensive to extract (e.g. tar sands, fracking), the point is reached where $60/barrel is no longer enough to warrant continued exploration. And, as we saw in 2008, whenever our teetering, debt-laden (and cheap oil dependent) economy falters, and demand falls even slightly, the price can plummet to the point where even more traditional exploration and extraction become uneconomic. At this price the economies of many OPEC countries also start to unravel, many of which are politically unstable to begin with.

    On top of this, the disastrous economic policies of the last 50 years, trying to squeeze out a few more years of ‘growth’ in the industrial economy by artificially lowering interest rates to approximately zero, to get consumers to buy even more by going even deeper into debt, have reached the end of the line. They have not and do not appear capable of working any more. We have reached the point at which the ‘real’ cost of oil, needed to power GDP ‘growth’ and enable the globalized industrial economy to continue, is now higher than the exhausted, debt-ridden, artificially stimulated global economy can afford to pay.

    What this will mean is that in future, in a whipsaw fashion, we are going to see a combination of spikes and collapses in oil price, in a cycle that will end in both global economic collapse and the end of large-scale oil production and hence our oil-fuelled industrial culture.

    • Thanks! I agree. I tried to figure out who Dave Pollard is. He links to my site on the side of his blog, so clearly he is a reader. He is also on some of the same distribution lists as I am on, with respect to the academic aspects of our predicament. Don Stewart has given links to quite a few of his posts in the comments. His posts are published at Resilience.org. It has the following to say about him:

      Dave Pollard retired from paid work in 2010, after 35 years as an advisor to small enterprises, with a focus on sustainability, innovation, and understanding complexity. He is a long-time student of our culture and its systems, of history and of how the world really works, and has authored the blog How to Save the World for over twelve years. His book Finding the Sweet Spot: The Natural Entrepreneur’s Guide to Responsible, Sustainable, Joyful Work, was published by Chelsea Green in 2008. He is one of the authors of Group Works: A Pattern Language for Bringing Life to Meetings and Other Gatherings, published in 2012. He is a member of the international Transition movement, the Communities movement and the Sharing Economy movement, and is a regular writer for the deep ecology magazine Shift. He is working on a collection of short stories about the world two millennia from now. He lives on Bowen Island, Canada.

      • Stilgar Wilcox says:

        Sounds like an interesting, well informed person. As the article goes, I like the simplicity of what he wrote. So much conjecture occurs regarding reserves and the long term ideas of how long we may be able to tap into those reserves, but only occasional efforts like Pollard’s to explain that we can only tap into reserves within an economically feasible, fairly narrow price range (which of course you’ve also written about, Gail). As we understand here on this blog, it’s going to be a lot less.

        • I see the situation as a whole system that collapses, so there are a few things that I would differ with Dave Pollard on. For example, Pollard says, “Our GDP growth correlates precisely with the consumption of oil, and has essentially nothing to do with innovation, technological ingenuity, economies of scale or ‘doing more with less’.” Actually, GDP growth correlates a lot better with total energy consumption, and it does have some things to do with the other items listed.

          He has the general idea right, but he tends to somewhat overstate what is true.

    • richard says:

      Thanks for the link.
      I’ll not go into the details here, but the article makes more sense if you approach the facts presented with productivity in mind. Then you understand that this is not just about oil, and that the probability of an event enabling continuity of BAU is somewhere between six and nine sigma, thus greater than the age of the universe, (just a guess). Some more on productivity and its effects:
      “So where do we begin this detective story? With the engine of all real prosperity, productivity. This chart reveals that wages stopped rising with productivity around 1980.”
      “Cause #1: declining productivity, which means the pie of real wealth is no longer expanding.”

  18. interguru says:

    Not to be a wet blanket, but crime of all types is much lower than 1980,

    • Vince the Prince says:

      Boy, that’s a relief! I can rest easy now….hmmmm. Perhaps folks are just not reporting or paying attention to all types of crimes now a days. Thanks for the comment…I did chuckle

      • Stefeun says:

        Good point Vince!

        It’s a reporting issue.
        (flawed figures, as usual ; same everywhere)

    • dolph911 says:

      If the whole system is fraudulent, then nothing is a crime.

      Where we stand today.

  19. Ed says:

    Marc Faber suggests “they” are going to helicopter money to you and me. I hope it iiss a big check. 🙂

  20. psile says:

    Central banks are already doing the unthinkable – you just don’t know it

    The lords of finance are losing their touch.

    Institutions which dragged the world from its worst depression since the early 20th century are finally seeing their magic desert them, if conventional wisdom is to be believed.

    Eight years on the from the Great Recession, voices as authoritative as the International Monetary Fund and the Bank of International Settlements – dubbed the ‘central bank of central banks’ – have called time on the era of extraordinary monetary policy.

    Thinking the unthinkable

    Faced with political intransigence, central bankers are openly talking about the previously unthinkable: “helicopter money”.


  21. Yoshua says:

    Schlumberger CEO: Oil Service Sector Faces Survival Threat As The Downturn Deepens Into A Full Scale Cash Crisis [7 Slides]

    “The fact remains that the industry’s technical and financial performance was already challenged with oil prices at $100 per barrel as seen by the fading cash flow and profitability of both the IOCs and independents in recent years. Over the past decade, our industry has simply not progressed sufficiently in terms of total system performance to enable cost-effective development of increasingly complex hydrocarbon resources. This can be seen by the escalating industry cost per barrel.”

    • Stilgar Wilcox says:

      The last sentence in the quote is really a good indirect explanation of what happens to profit when scraping the bottom. As we dig into the junkier stuff it takes more energy to produce, thus there is less profit and much less incentive for exploration. If the consumer could afford oil over a $100 again, then it would be off to the races to scrape some more. Now we are depleting the stuff that was fairly cheap to get in the first place. Can anyone in the MSM follow the bouncing ball to its conclusion? We are just this side of a massive energy squeeze.

    • Very interesting presentation! Thanks!

      Another quote:

      The unsustainable financial situation of the service industry together with the massive capacity reductions mean that the cost savings from lower service pricing should largely be reversed when activity levels start picking up.

      In other words, the savings in drilling costs that companies have been experiencing recently are temporary. If the price of oil goes us, service operators will need higher prices.

  22. Fast Eddy says:

    Interesting….. this could never happen post BAU…. we are far more civilized now….

    Although when resources are very scarce…. and there are 7.4 billion of us….

    Let’s take a look at what policing looked like in the middle ages… shall we….

    The tortures and punishments of civil justice customarily cut off hands and ears, racked, burned, flayed, and pulled apart people’s bodies. In everyday life, passers-by saw some criminal flogged with a knotted rope or chained upright in an iron collar. They passed corpses hanging on the gibbet and decapitated heads and quartered bodies impaled on stakes on the city walls.

    Tools of all varieties – especially knives and agricultural implements – were ever at hand should an argument flare into violence. In her study of violence in East Anglia during the period 1422-42, Philippa Maddern (1992) has calculated that over a quarter of murder cases involved such tools. Two examples illustrate the point: in 1428, while John Wysbeche was working alongside John Colley clearing out a drain, Wsybeche struck down and killed Colley with his turf shovel; a trial from 1434 examined the death of Richard Tarcel, killed by Elesius Tomesson wielding a hedge stake. More obvious weapons were sometimes used for less than obvious injuries: in early fourteenth-century Lincolnshire, Ralph Tokel broke both arms and three ribs of Hugh Swanson before using his sword to cut away the soles of his victim’s feet.

    Even court cases might offer theatres of violence. These came in the form of ordeal by water or iron, extant from Anglo-Saxon times, and trial by battle, the former being the standard test for women, the latter for men. Ordeal by iron was the more traumatic of the two. The accused was made to carry a burning rod for a defined distance before having their hand bound for three days; if the hand was infected by the time of the bandage’s removal the person was deemed guilty.

    Clemency meant commuting the death penalty to mutilation: eyes, noses, ears, hands, feet and testicles were the most frequent payments for life; in many cases, mutilation was the standard, mandatory sentence. Leniency could serve a purpose: the survivors were a living testament to the harsh justice meted out to wrongdoers.

    In England in 1221, Thomas of Eldersfield was reprieved from hanging at the last moment; in a show of mercy, he was blinded and castrated instead. Robert Bartlett describes the scene: ‘the eyes were thrown to the ground, the testicles used as footballs, the local lads kicking them playfully at the girls’. Crowd participation was very much part of the punitive process and spectacle. Corpses of executed criminals often became playthings, especially for youths, who would often drag the bodies around, kick and beat them, and sever parts from them, sometimes as souvenirs.

    See more at: http://www.historytoday.com/sean-mcglynn/violence-and-law-medieval-england#sthash.Ud7Z1coK.dpuf

    • “Thomas of Eldersfield was reprieved from hanging at the last moment; in a show of mercy, he was blinded and castrated instead. ”

      That’s an interesting idea of “mercy”. I think the real purpose is that a person serves as a deterrent more effectively and longer if you have to pass by him begging in the street every day, then if you just kill and bury him.

  23. Fast Eddy says:

    Oh those naughty Elders…. http://www.zerohedge.com/news/2016-03-22/western-tuesday-begins-republicans-bet-house-utah-stop-trump

    Paint Trump as the anti-establishment candidate who ‘must be stopped’ — making him even more appealing to the slobbering mobs and slobs …. who will elect him expecting him to right the ship of despair they are riding on ….

    Then disappoint them again when he is elected and does exactly as he is told … exactly as expected….

    Didn’t we see this formula somewhere before … something about hope and change…

    The sheeple are so easily herded…. first it’s the liberals who were pissed off at the torture and the wars…. this time it’s Joe Six Pack who is promised a job (at the Apple factory coming to a town near him when Trump gets elected….

    Pavlov would love it!

    • Jeremy says:

      Back in the day, your backroom E~l-d*e-rs of note were the Rockefellers. Let’s hear you name and “fame” who you think are the current less-visible ones, F-a#s-t E-d-d*y?

    • xabier says:

      Trump is promising both jobs and increased and more severe torture, quite an interesting development in US democracy!

  24. tagio says:

    Ponzi World has an interstnig observation today about psychodynamics which, if true, will make it more difficult for people as a whole to recognize and deal with our predicaments. “When the society itself is collapsing at the same rate as everything around it, then collapse becomes imperceptible…” http://ponziworld.blogspot.com/2016/03/collapse-as-usual.html
    He also notes that Goldman Sachs has finally figured out that the sotck market is 97% correlated to oil, and that “everything is an oil trade.” http://ponziworld.blogspot.com/2016/03/crude-awakening.html

    • Stilgar Wilcox says:

      “When the society itself is collapsing at the same rate as everything around it, then collapse becomes imperceptible…”

      I think that’s true, tagio. That’s the macro example – on the micro scale each of us as individuals incrementally age but we don’t notice it much until we run across photos of yesteryear. Then we realize how time & pressure have changed us, hopefully aging gracefully.

      What amazes me is how easily people have accepted near zero return on savings. Some complain but the masses as a whole never put up much of a fuss. That’s probably due to the rates declining over time.

      We baby boomers have seen things transition from people, even total strangers exchanging long stories on buses, trains, pubs, cafes to more recent generations having less and less casual conversation. If something is said it’s very short and to the point, then back to an E gadget to stare at and ignore everybody else.

      Kid’s use to spend most of the days off from school going far and wide. We use to go to SF as early as 13 years of age in a group of 3 or 4 of us – to baseball games, movie theatres, Playland (which was an old amusement park, now gone). The we’d bicycle 20 miles home or catch the bus for 50 cents. Now it’s too dangerous to go very far so kid’s stay close to home. My Mother use to kick me out of the house and tell me not to come back until dinner, but she never asked where we went. She has no idea what we got up to. Sometimes we would just start at one point on a street and start climbing fences going through properties in one direction to see what street it came out on. Of course we almost got mauled by Doberman pinchers on some rich guy’s property, but that was life. Crazy, wild, anything goes and yes we got into lots of trouble diving into other people’s swimming pools then jumping the fence when someone protested our trespass. When we did get caught the police would warn us and off we’d go, get bored and do something crazy and daring again. But we weren’t destructive. No tagging, no property damage, no tattoos, no piercings and we didn’t even swear much. So I guess we were good kids by today’s standards.

      Everybody was thin except for the rare person that was overweight by 10-20 lbs. Watch a movie from other time periods and you’ll see weights rise over the decades. People just got out and moved about more. There was only one heavy kid in our whole high school of about 1400. That was 1970-1974. The girls all had hot bodies but some were prettier than others. They wore mini-skirts. The stewardesses were hot too, especially Pan Am. It was like the hooters of airlines. Now obese people drive electric scooters around in Walmart phoning someone else in the store and asking, “Where you at?”

      One person could work part time and pay all the bills for a family of four. One person working full time could pay all the bills, save some and have money left over for a two week vacation each year. I heard some guy in Home Depot yesterday say to some other guy he needed to look for a 4th job to pay all the bills, not just some of the bills with 3 jobs.

      People use to have so much time they talked, hung out, worked some but not at a fast, stressful pace. It was slower and happier. Now people run their tails off to break even or fall farther behind.

      It’s like Carly Simon sang, You don’t know what you’ve got until it’s gone. But if it disappears over decades people just accept it because it occurs incrementally like aging.

    • Link to Zerohedge Goldman article:http://www.zerohedge.com/news/2016-03-22/goldman-says-sell-risk-assets-go-cash-ahead-expected-elevated-volatility

      “Correlations across assets and with oil prices have been high this year to date. The oil price recovery since February 11 (due in large part to China relief and the dovish March FOMC meeting) has come with a broad relief rally across assets.”
      Goldman asset correlation image

      • MM says:

        May I propose that you take the time to view the presentation by Jean-Marc Jancovici posted here earlier. He says, the price of oil has NOTHING to do with GDP growth. He claims the AMOUNT of oil extracted is relevant. the price is only RENTS.
        Would be nice to have the presentation…

        • MM says:

          btw yes I think this presentation is awesome. More exactly the rise of FF extracted is directly attached to the rise of GDP. The price is only rents (repeated three times 🙂 )

        • “May I propose that you take the time to view the presentation by Jean-Marc Jancovici posted here earlier. He says, the price of oil has NOTHING to do with GDP growth. He claims the AMOUNT of oil extracted is relevant. the price is only RENTS.”

          It seems to me he was referring only to the impact on GDP as a whole. If oil prices drop below the cost of production, if the price of assets plummet, it will most certainly have an impact on society.

          I think the price of energy – assuming it is being produced at a profit – only matters as a relative comparative advantage/disadvantage against other economies with cheaper or more expensive energy production. The total volume is what moves GDP up – or down, particularly at the global scale.

        • Stefeun says:

          I assume there is a presentation,
          but you’ll get more complete info by digging into his website:

          • MM says:

            Thank you for the link. On his website he seems to be more relaxed than at his speech in the video. I bet he does not want to stirr up the masses. Anyway, some good (and sobering) data.

            • Stefeun says:

              Yes MM,
              In the video “Janco” is a little bit nervous because the presentation was made in a Commission of the Assemblée Nationale, i.e. to elected deputees. It means there were other speakers as well, talking about same topics, a final report was issued and then forgotten, as all others.
              I’m sarcastic here, but afaik there wasn’t any decision taken in the aftermath of this awakening speech. Either the deputees didn’t understand, or each one of them was loking for some take away relative to their own circonscription (area of election) and let superior financial interests play the game and take real decisions off-the-record, as usual.

        • Right! It is the quantity of oil that matters. This is precisely what my this article I wrote recently says: https://ourfiniteworld.com/2016/02/08/the-physics-of-energy-and-the-economy/

  25. Don Stewart says:

    Dear Finite Worlders

    For those of you trying to make sense of the ‘glut’ and ‘rebalancing’ of the oil market. Take a look at this exchange at Peak Oil:

    “Global demand and supply will balance very quickly because we’re seeing extended decline from producing fields.”

    ‘This is where we think they are overlooking a key factor in the supply/ demand relationship by ignoring the energy contribution of petroleum. It takes energy to produce oil, and for petroleum to act as an energy source (which is the primary reason why it is used) that energy must come from the petroleum itself. When production declines so also will the demand for oil by an amount equal to the energy required to produce it. The Etp Model tells us that is now about half. The balancing of the market will therefore take much longer than generally expected. The industry will have long since gone bankrupt before that occurs; and the rest of the economy will have followed it.’

    There are a couple of key points. The first is that when the energy required to produce a barrel of oil is equal to half the energy content of a barrel of oil, it is no longer possible to increase production of oil using the energy produced by the oil. The second is that if we are currently at that 50 percent level, when oil production falls by 10 percent, demand will fall by 5 percent (the energy required to produce the 10 percent which went away). Consequently, the dog is chasing its tail. While mathematics would indicate an eventual resolution, the leveraged nature of the oil business tells us that most firms will be bankrupt before resolution happens.

    Does it really require half the energy in a barrel of oil to produce oil products at the pump? I recently saw an estimate of 28 percent (I can’t remember where). But my understanding of the ETP model is that it includes other costs not generally counted by the bean counters. For example, military forces. (I am not an expert on this issue.)

    Don Stewart

  26. Yoshua says:

    There is a theory that the Roman Empire, which was a Mediterranean trade empire, imploded into thousands of self sustained aristocratic counties before the Roman Empire collapsed. The Roman aristocracy had invested their plundered wealth into farmland, controlling large areas, until they controlled small “kingdoms” which where entirely self sustained in water, food, vine, raw materials… farmers (slaves), tool makers… and since they no longer needed to trade with the cities, except for some luxury items, the trade and the cities collapsed and with that the money economy disappeared as well… and this lead to the medieval world.

    So the collapse, or the contraction of the (western) Roman Empire had already taken place before the Germanic tribes put a symbolic end to it by taking Rome.

    Today the American global “empire” is a trade empire as well. If the Medieval world was called the Dark Ages…

    • Artleads says:

      I hear it often said, that if the economy slows down or stops growing, it crashes. But with so much downturn ongoing–like stores closing, etc.–how come the larger economic system still works? I’m sure everybody understands this, so I’d appreciate someone’s patience in giving me some concrete examples of why it still works. More debt, I’m sure. Negative interest rates, whatever.

      For one thing, I know people who are trying to be self-sufficient. But if that leads to trade and money crashing (which could be close to a solution toward a level of sustainability) it’s pretty clear that the great masses of people are nowhere near prepared to pick up the slack after a macro collapse. So I naively wonder how to have BAU lite so as to give the world time to adapt. I hear over and over and over that it can’t be done, but the explanation as to why could do with a simpler and more patient explanation.

      A simpler way of life, with everyone taking less, could extend BAU? What if everybody lived on the tiny income I’m grateful to live on?

      • It is hard to see how much “overhead” the system really has. While you may use less, and your neighbor may use less, the electrical system still needs to be maintained, or it will stop working. Maintaining the water system probably takes more resources, rather than less. Somehow, we need to keep the whole international trade system to keep operating, in order to have computers to run all of the factories (and other things) that depend on computers.

        At the same time, there have been a huge number of promises made to the elderly and disabled, and people have changed their lives based on the promises made. Governments don’t really have the ability to fund all of these retirement programs as more and more people retire, and private pension plans don’t have enough money in them either. If they are to remain, these programs would need to be funded by higher taxes–making the income you are counting on even lower.

        • Artleads says:

          “While you may use less, and your neighbor may use less, the electrical system still needs to be maintained, or it will stop working. Maintaining the water system probably takes more resources, rather than less. ”

          I’m on the local water board. They talk about progress and keeping up with the modern world. They are dedicated in the extreme, and our system is as good as could be despite “mining” the town well. They think it’s quite normal to think about the 40 year plan the state (or fed) expects them to complete. I’m wondering what 40 years they are talking about, but I can’t even get a word in edgewise about that. I tell them that I grew up with a handpump to get the water from a ground-located cement tank to elevated metal drums. I did nearly all the pumping when I was home on holidays, and gave it no thought. It was great exercise. I tell the board that I would be happy to volunteer time to hand pump water…if there was an emergency and the grid went down, but I don’t think they heard me. One of those cognitive dissonance moments. I think you can say that a lot of problems have to do with unrealistic expectations and the stunning lack of leadership.

      • Fast Eddy says:

        It still continues because we have no hit the tipping point – yet.

        Keep in mind we have been growing until recently…. stagnation has now set in … collapse comes next

      • MM says:

        The game is called “extend and pretend”
        What we see as crashes historically is when many people try to cash in on their “Assets” and the prices of these assets fall all at once because there is no one to buy.
        Today we have a different situation: first not everybody “needs” to cash in all his assets when they fall because the assets are diversified. Second when there is a need for money you can still extend your credit instead of selling an asset.
        A crash in old fashioned terms is thus very unliekely. That also leads the investors to the conclusion that prices can only go up and that makes a crash even more unlikely.
        We will see a continuous depreciation of “value”because of resource problems and maintenance costs of inventories but in todays finance you can also make a fortune betting on a loss.That is another modern feature: “hedging both sides”
        You buy shares of a company and bet that the company goes bankrupt together in one bet. You can make a derivatives arrangement that you win in both cases. Of course this is not available for John Doe.

        • Van Kent says:



          You see stocks propped up for years to come, because nobody really has a need to sell them, everybody get enough credit just by owning junk assets? Is that true for a big Chinese investors as well?

          If nobody has a need to sell tanking assets, anywhere, that would mean that the first limits on growth are sovereign debts, not abysmal stock earnings. The wild ride would begin only after Greece, Italy and Spain etc. begin to fail in their bond issuing..

        • Fast Eddy says:

          This makes no sense.

          The reason assets are being sold is because companies – particularly those in the resource space — will collapse into insolvency if they cannot sell and bring down their debt loads.

          The absolutely MUST sell. Otherwise they will be junked and they will no longer exist.

          Problem is – who’s going to buy?

        • Of douse, all of these arrangements work only in theory. Whether or not they work in practice is more debatable. It is possible that the derivatives essentially crash the financial system first–or that the derivatives lead to large “haircuts” to people’s bank balances.

          • Van Kent says:

            Yup, I would like MM to tell us more about what he had in mind. I understand that you can take credit on stock assets, and I understand dervatives to hedge both sides of the bets. But what I don´t understand is how a truly tanking asset can not be sold??

            Say you have Sun Edison stocks, you bought 100.000 pcs at price 31.56. Of course you can get credit on the 3+ mil of assets you have. And of course you can hedge with derivatives. But next Sun Edison is only worth 1.28. Now instead of 3+ mil you only have 128.000 bucks in assets, what to do if your derivatives didn´t cover the credit? You made losses of 3 mil, and you have your credit to pay up. How on earth do you pay your credit with money you don´t have? And how does this lead to you not selling the tanking Sun Edison stocks?

            To me this sounds like a last ditch effort to make a final buck before the market collapses. A Goldman Sachs broker has a new line that he uses to get a few mil in bonuses before the crash. Taking credit on stocks, hedging with derivatives for stock declines. All of that sounds so like 1929..

    • Yes, thanks, this is important and often overlooked component of the fall of Roman Empire. However, I’d still see it as a mere consequence, a reaction to the primary causes such as imperial over reach as they could not hold and expand anymore, depletion of soil in breadbasket North African provinces, etc. The emerging regional proto feudal aristocracies of that time filled the void of the contracting central authority and in a way the looting of the state coffers by the nobility took place for centuries.

      In similar vein, what is in store for us, look at Ukraine, after waves of revolutions, weak and nonexistent central authority, oligarchs – militarized gangs and warlords controlling specific regions. International commerce broken (e.g. natgas pipeline, industrial output falling) no real grantees for trade. But it will be very differentiated world, some state entities might stay “intact” for longer time, than others, e.g. Russia, perhaps France relatively speaking to its neighbors as well.

    • Van Kent says:

      I remember reading from Joseph Tainter that Rome came in to being by plundering their neighbours the Etruscans. After taking the gold from the Etruscans, Romans plundered the Macedonian treasury. Gold. Then the Carthage treasury. Gold. Pompey the great plundered the Spanish gold. Then Caesar went in to Gaul and plundered them throughly and sold a million people in to slavery. Gold. And finally Octavian/ Augustus plundered the biggest treasury of the ancient world the Egyptian treasury. Gold.

      Gold is the same thing as energy for the Roman timeperiod. Every time somebody does something, energy is needed. Rome build legions with the energy they had available to them.

      But after those large inputs of energy (gold) the empire didn´t get any such large inputs of energy again. And finally it collapsed.

      • Slaves were very important, as Jancovici enumerated, individual human is able to produce with his own body roughly 100kWh of work output per year (no tool leverage yet), and in the pre-industrial age transformed ~ 1500kWh “free energy” per capita yearly from the environment for heating, eating and tools. Now, multiply it by millions of slaves and subjects, and you are in aggregate talking some real transformation power flows eventually realized as cities, roads, bureaucracies, navies, arts, .. and also deforestation, soil erosion, .. etc.

        • I thought that they had at least some animal labor back then, too. The problem with slaves is that they have human needs too–food, water, reasonable temperature, clothing. Quite a bit of the slaves output went simply to cover his own needs.

      • DJ says:

        I understand what you’re saying, but back then the gold could be first dispersed on the soliders and then concentrated (by taxes and trade) and then … war … everything done again over and over.

      • Rome gives us our lesson from history, that expansion is finite in whatever form it takes.
        Every expansionist empire has no option but to loot such territory as it can access, and it has been going on for millennia.
        Essentially looting gold enabled the military machine to be funded in order that more gold could be looted—-supposedly ad infinitum. Gold bought energy which from the point of view of the Roman citizen was effectively free.
        But as we all know (finite worldsters that is) there’s no such thing as a free lunch.
        After several generations of free lunches, the Romans forgot how to earn their food.
        It had mysteriously arrived from “elsewhere”, and so always would. This is how Rome grew to have a million inhabitants. And why it collapsed when the lunches stopped arriving.

        We are in the same situation. We have had 5 or even 10 generations (depending on circumstances) where we have had free lunches, and have lost the ability to sustain ourselves. (I speak collectively here—not individually). As is pointed out in the article above, nobody wants to “labour” anymore, only to train for employment higher up the ladder of social success. It is conveniently ignored that our employment, no matter how exalted, depends on someone, somewhere back down the line producing food as our fundamental energy source. We all want to live like feudal lords, while denouncing the concept of the serfdom that made it possible.

        Post BAU, despite delusions to the contrary, all those “jobs” that we all trained for (mine included) are going to become redundant, because their existence depends on our industrial infrastructure, as does the complexity of current society. Then our prime employment will be food production again.

        • Van Kent says:

          In Post-BAU, from May to September I will need about 50 – 100 people working in the field (this is without diesel) full time to produce food for about 200 people year round. If ethanol is available I think the bakery and the mill can run on about five people year round to feed about 200 people. If ethanol is not available I will need a lot more people in food processing year round..

          From October until April I guess there would be time to spare. But only if root cellars were available for everybody, compost and water transport problems were solved, biochar made, small manure-biogas plants ready, everybody has chicken and rabbit coops and at least some have mealworm farms (protein mix) for the poultry feed mix.

          And sure, some mechanics and machinerists would be nice, to have at least some effort to at least try to make spare parts to ethanol run generators and other life supporting machinery.

          But I know that during June – July almost everybody is required for weed pulling. That´s a huge bottleneck of weed pulling.

          Yup, Norman you are right, the problem is manual labour. It will take a lot of manual labour to get everything done. People are not used to manual labour. They don´t have the physical or mental capacity to work a full day, every day, in the field, in the sunshine, for weeks and months. But if that work is not done, then somebody will starve during the winter. So, no freeloaders. Well, actually, as few freeloaders as possible, shall we say..

          • Fast Eddy says:

            Are many of the other 100-150 people you intend to feed heavily armed soldiers?

            They should be ….

            The problem with that of course… is that their leader… will be the king of the village… kings don’t take orders from farmers….

            • Van Kent says:

              I don´t think I´ll have to worry about heavily armed soldiers. There will be some virulent strains that get me first.

              But if in some strange and befuddling reason I live to a see a warparty come in and take everything, then that will be some interesting times to live through. When all bets are off, when no more rules, a lawless land, that means the strongest, who can bestow the worst shock and awe get it all. Does it not?

            • As you probably should have known from history, usually in the upper societal crust there is a power sharing or mutual co-dependency between rulers/diplomats/statesman/merchant/banksters on one hand and warrior class on the other, sometimes a person excels in several of those gifts at once. But in general the idea that everything must be under the thumb of brutes with gun is not correct or valid only for short time frame during societal shifts/ brake downs.

              I think in the relative not distant future you should be more worried about “gov commissars” nationalizing your personal resources, the war/insurgency/marauding gangs comes way after that.

            • Van Kent says:

              I watched some documentary about the Venezuelan collapse and if “gov commissars” come nationalizing personal resources, on the example of what has happened in Venezuela, that will truly be catastrophic..

              Farming is extremely vulnerable to people who sit at a desk somewhere and simply “know better”. If personal property is taken.. Why would farmers continue to do 20h workdays when needed. It is no longer their land they are taking care of. When nobody is in charge, nobody has the final say, nobody plans the coming year on site, a catastrophe will surely ensue.

              I just hope “gov commissars” will not come nationalizing personal resources..

            • We should be watching what happens in Venezuela. It may give us a clue as to what happens elsewhere.

            • Fast Eddy says:

              Or just take a look at Haiti — then imagine what it would be like if the aid organizations left and the electricity was shut off – shops and petrol stations emptied …. and that would give you a fairly good idea of what post BAU will look like

          • what you describe in your personal (future) location is the situation of a minor aristo in medeival Europe around 1400. you may not care for the idea–but that is what you would have there.
            you own the source of energy that a group of people rely on for subsistence, so that makes you a feudal lord—in the nicest possible way of course. (we hope).
            the only difference being that the people who would be working your land would free to leave—but then would have to find work elsewhere at a similar level.
            Work to eat will be the means of existence.
            I recall only 50 years ago—farmers used to recruit “beet hoers” to get rid of weeds. It was an accepted summer holiday job.
            I think it’s also vital to stress that in 15th c Europe, land was ultimately held by right of conquest.
            An aristo might think of himself as landed gentry, (to use the English term), but invariably he would have an ancestor who had taken that land by force of arms. He was also beholden to others higher up the food chain.
            as others have pointed out on this forum, it would be a mistake to ignore that fact.
            As you say—no freeloaders unless others are willing to work to feed them.

      • “But after those large inputs of energy (gold) the empire didn´t get any such large inputs of energy again. And finally it collapsed.”

        I think the real energy of Rome was wheat – Campania, Sicily, Spain, Egypt, perhaps North Africa to some extent. Of course, like all empires, constant growth or death, especially once you start having soldiers serving for 25 years with a guaranteed pension.

        • It is really energy per capita that is important. If population is rising and energy supply is flat, that is a problem.

          • Veggie says:

            That’s a good point Gail.
            In fact it may be the ultimate ratio by which everything else follows.
            We have already determined that the carrying capacity of the planet has been passed.
            Growth requires energy.
            So, when energy per capita goes neutral or negative, growth must reverse and standards of living must fall.
            Exception: if efficiencies increase drastically, then the world can operate on a lower EPC. But that has diminishing returns because efficiency can only be improved so far and then a wall is reached.
            I suggest that the wall has now been reached and the EPC is turning negative.

  27. Don Stewart says:

    Dear Finite Worlders
    George Mobus Spring Equinox message of despair:

    Don Stewart

  28. Fast Eddy says:

    This is the biggest load of shit I’ve read in a long time:


    ‘America is built on decency’ hahahahaha x 559,987,009,876,987.01 x 998769.98

    America is built on pillaging the resources of the weak. Why can’t Lizzy acknowledge that and rejoice in the fact that we have the biggest baddest dog on our side?

    Did she mention something about accountability for Wall St… affordable health care…

    Like I said — the biggest load of shit spewed out of one person’s mouth hole in a very long time.

    Fast Eddy endorsed The Donald for President. Sarah Palin for VP. CNBC’s Cramer to replace Yellen.

    • ejhr2015 says:

      Trump is vile, for sure, but as has been pointed out, he is the RESULT of what America stands for today. He is not a cause. He is – perhaps unthinkingly – calling it out. So in that sense he has my vote.

      • Fast Eddy says:

        I’d choose to dive into septic tank filled with decaying feces than step foot in America.

        It is a truly vile place. The fact that Trump has a good shot at winning the presidency is evidence of fetid swamp that is America

        But it goes beyond that — the sickening garbage that pollutes the airwaves … the ‘me me me’ culture — the arrogance … the chest thumping …. the materialism… the celebration of idiocy… I could go on (and on and on)

        The country is essentially a poster cesspool of everything that is wrong with the world as we circle the drain…

        Every time I visit this part of the world I find myself feeling extremely negative… the crassness has deeply infected Canada as well…

        Oh and wtf is with the $200+ ice hockey sticks????

        • the Trump thing seems to be a manifestation of panic.
          The majority of people realise there’s something ‘wrong’—that the economy is tanking and jobs are vanishing , climate is changing etc etc.
          but the collective thinking on this problem is that it is political.
          That somehow prosperity can be voted into office.
          and that’s where El Trumpo comes in.

          If Trump says climate change is a hoax—then “he gets my vote”
          If he says he’s going to make America great again—then that’s what folks want to hear, and so he gets their vote.
          If he says Mexicans are the cause of all the problems, then that’s worth votes too.
          All utter nonsense of course, but it allows the nonthinkers to think the unthinkable.
          That somehow Trump will become the saviour of the “American Dream” instead of the nightmare it is becoming as Trump transforms himself into a world class laughing stock.

          we can only hope the electorate don’t make themselves a laughing stock as well

          • Fast Eddy says:

            His latest promise is to nuke ISIS…. that should get him quite a few votes…

            I’m not sure how you would nuke ISIS — do you drop bombs in Belgium… and France… and the UK…. and Syria … and Iraq… and Libya….. And even if that could happen would that not mean that the CIA would have to find another group of wild dogs to kill Assad?

            Collective insanity washes over the planet as extinction approaches… Although panic has not set in I do think that a lot of people now understand that something is profoundly wrong…. that there is not going to be a recovery…. I reckon we are in the ‘deer in the headlights’ phase of collapse….


            I wonder how the reindeer on the far north island reacted when their food source peaked… what do yeast in a beaker of sugar do when down to the last few granules….

    • Vince the Prince says:

      Fast Eddy, my fantasy would be an alternative History that would show our world today if All Gore was appointed President.
      As far as Trump, if Ronald Reagan could be elected, he sure can be!
      Actually, it is obvious to me the Establishment wants him. All this is reverse Psychology on the Public. If Trump is President, they will be secure in BAU.

      • Stilgar Wilcox says:

        Not sure about the establishment GOP wanting Trump, Vince. Trump is backed by Tea Party voters. The GOP have already had the House taken over by Tea Party members and there are some in the senate, but if a tea party prez gets in, then it goes from the establishment GOP to a Tea Party majority.

        The appointed delegates that go to the convention to cast their state’s delegates for a candidate are in fact not required to cast them in the same percentages as the vote in the primary/caucus. They can switch to another candidate and so far from what I’ve heard is the establishment GOP plans to nominate some other candidate, even if they have to bring in a new candidate. That’s why Trump has been pushing the idea his followers would riot if such a move takes place. The GOP nomination convention may turn violent.

        Rachel Maddow did a whole segment on skirmishes that took place in state delegate conventions in 2012. They weren’t shown much in the MSM, but they were raucous. Splintering factions faced off in a power struggle. So this has been building up and will most likely play out at that convention. Might make for some fun entertainment.

        • Fast Eddy says:

          If Trump is elected just show him this


          Although that might not be effective if he has the backing of the military who perhaps are turning against the Elders because they see the Elders as losing control of things…

          End of the day the Elders control is based on delivering prosperity and sharing it with those who kiss the ring…

          So long as they delivered they were acceptable – someone has to run the show – and the Elders have been fantastic leaders – they have delivered immense wealth since they came to power 100+ years ago.

          If this structure is seen as unraveling — the ring will no longer be kisses and the Elders will be elbowed aside.

      • daddio7 says:

        Living in Florida the 2000 election was more personal. Legally Bush won but many people in Palm Beach county tried to vote for Gore but inadvertently voted for Buchanan so by a small margin Gore should have been president. As a Republican I could have wished nothing better then to have the steaming pile of 9/11 on Gore’s head. He probably would have stayed out of Iraq and Saddam would still be there thumbing his nose at our no fly zone. We would hopefully had a strong Republican president defeat Gore in the 2004 election and today be thinking of 16 years of Republican administrations. Is that alternative enough for you?

        • Fast Eddy says:

          Bullshit. Humpty Dumpty could have won that election and the US was still going into Eye-Rack.

          When are you people going to get it through your thick skulls that the president does not make the big decisions — your elected officials do not determine if there is war — or bail outs — or QE — or ZIRP

          The men who own the Fed make these decisions. Anyone recall a vote on QE or ZIRP?

          And they SHOULD make these decisions.

          Because the average person is too stupid and/or too easily swayed to be trusted to do the right thing.

          Imagine you run for president against me.

          I promise prosperity – I guarantee lower taxes — I offer a minimum family income of $75,000

          You promise that the country will live within it’s means.

          Guess who would win that election?

          Democracy would be the end of America.

          The Elders have delivered prosperity for over a century now. They have done the things that required doing to ensure we have lived large.

          This talk of presidential elections and who would do what is just plain ridiculous.

          Obama has not deviated one bit from Obama – in fact Bush would be considered Obama Lite based on what Obama has done since he took office.

          And if Trump wins – you’ll get more of the same —- and if Clinton wins you’ll get more of the same

          Over and over and over…..

          The sheer idiocy of the world is breathtaking … you clowns are being punked — it’s right in front of your eyes and you can’t even see it.

          And that is a bloody good thing — because people who can’t even see beyond their noses need to be lead around with rings through them


          Isn’t amusing that the Protocols repeatedly refer to the goyim as ‘cattle’ — a more appropriate term there never has been.

  29. Francois Roddier is looking for someone to help with translating his articles from French to English, ideally a native English speaker. If anyone is interested, let me or Stefeun know.

    • Stefeun says:

      Thank you very much Gail, for this call on your own blog.
      Roddier’s writings deserve an English version, definitely.

      We’re talking of this blog: http://www.francois-roddier.fr
      I’m pretty sure that many Anglophone people would enjoy his fascinating insights and easy-to-read articles.

      The proposed task, here, is much much lighter than the translation of a whole book. The specific purpose is to get the articles translated one at a time, and then transferred onto an English version of the blog (that already exists, but is empty).

      The plan is to start with the newest post, and then go backwards in time. The articles are labelled with numbers (e.g. latest is #88) that would remain unchanged in the English version.

      There’s no emergency, no special agenda, no deadlines. It’s quite a big amount of work in total (ca 80 articles, some # are mere announcements), but since it will be made step by step, at own chosen pace, it looks feasible, and why not enjoyable?

      We’ll support the person as much as we can, so that he/she can concentrate on producing pleasant texts for English readers.
      The person should of course have some interest for physics, as well as basic knowledge of French language.

  30. Don Stewart says:

    Stefeun and Others
    A little more expansion on the Adrian Bejan core question: ‘What is flowing?’

    This is from Andreas Weber’s The Biology of Wonder. On page 178 and following (of the English translation) he talks extensively about human development.

    ‘The infant’s core self is the translation device, which mediates between inside and outside and between self and other…The deep existential identity of the senses is even more radical. It includes not only experiences that the baby’s own body is subject to, but also those of other individuals. This capacity does not need to be learned, but comes from having a meaningful body in the first place. The newborn can read the same emotional valences in another person’s gestures as he experiences through his own feeling….it is clear that the different sensory channels and the areas of self and other are not put together in hindsight. They are identical from the beginning. We can metaphorically say that the perception of others and of self speak the same language from birth on; there is no need to ‘associate’ them later.

    These in the end boil down to the signification of felt existential impacts, which have values but not yet forms. They are pure poetic space. To the common idiom of subjective existence, therefore, inside or outside, self or other, gestures and words and material impacts are the same. All these neither need to have the same form, nor do they need to consist of the same material, but they still have an identical effect by the way they make the ongoing existence more or less possible.’

    My summary to this point. The infant comes through the birth canal with a full emotional apparatus. Infants still wet with amniotic fluid can demonstrate pleasure interacting with others. But the forms which the infant and the society they are born into are malleable. In Bejan’s terms, what is flowing is the juice of emotional life, while the forms will evolve over the life of the child. The forms which will be common in the life of a hunter-gatherer will be quite different from the forms of the child of a rich Manhattan couple, but the internal effects will be identical. ‘Feeling comes before form’.

    ‘For newborns to have a self is coupled to the presence of others.’ In Bejan’s language, what is flowing is nothing other than the mirroring which is essential to the healthy development of an independent self. Whether the material means involve very simple stuff such as being held or talked to or very expensive toys in a child-care center are not the critical questions. In fact, the very simple means are frequently far more effective than the expensive means.

    ‘On the level of metabolism, but also on the level of personhood, self can only exist as self-in-growth by continuously remaking and recreating itself.’

    Very similar to Bejan’s statement about forms ‘living’ by continually adapting to facilitate flows.

    ‘By now many scientists suspect that not even self-identity is granted; rather, it has to be constantly achieved. They have started to glimpse that this constant manner of self-realization and self-assurance that searches for the self in the eyes of the other could make up the feeling core of consciousness….In order to learn his own identity, the infant must be surrounded by other living beings; no other pieces of matter reflect inwardness through their outer shape.’

    Is it possible that the epidemic of clinical depression is related to our attempts to substitute machines for humans?

    ‘Through the mirror system the core self translates the existential experiences of the other, which are perceived on its outside, directly into its own feelings…It is possible that mirror behavior simply is the way a brain connects inside and outside. That would mean that every living being automatically, by being alive and having a body, is hardwired for empathy.’

    So…what empathy do we experience at a boxing match? My guess is that we experience both the pleasure of beating someone else to a bloody pulp, but also the pain of being beaten to a bloody pulp. ‘Empathy’ does not imply that the world is all ‘nice’. Annie Dillard, the author, relates an experience in a village on the upper Amazon. The village dogs had cornered a deer. The villages captured the deer with a rope, and tied it up. They intended to kill the deer and eat it for supper. The deer does physical damage to itself trying to get away, and is clearly suffering. The villagers look on passively, as does Annie Dillard. But her three traveling companions, from rich urban lives, are upset. What is happening here in terms of empathy. To the villagers and Annie Dillard, the suffering of the deer is just the way life is. The villagers can’t kill the deer before they are ready to cook it, because it would begin to attract insects and the meat would spoil because there is no refrigeration. But the rich urbanites are not used to confronting this sort of reality, and cling to the idea that ‘someone should do something’.

    In short the infant needs to develop the emotional apparatus to deal with all of life. ‘All of life’ for a pampered child in a rich city will not be the the same as ‘all of life’ in a hunter gatherer village on the Amazon. Here is a link to some similar thinking at a kindergarten in Japan.


    In summary. I really like Bejan’s basic question: ‘what is flowing?’. Whether Bejan would apply his question to the questions which interest me is not clear. He usually ends up with a ‘three cheers for the Western way’ speech. As an engineer, he wants to connect the red wire to the green wire. As something of a doomer, I want to figure out how to live with fewer wires.

    Don Stewart

    • Jeremy says:

      Before the deer died, I emailed Mr T#r#u#m#p on her behalf. He responded, promising that he would have very deer-friendly policies if elected, and not only that, he would ban the food chain and make entropy history.

    • Ed says:

      Don, see also Sudbury Valley Schools in the U.S..

  31. Stilgar Wilcox says:

    “I think it would actually require in excess of 120 dollar oil prices for the shale industry to be able to drill wells off net cash flow, in other words, to live within its means and not borrow money it can’t pay back. As far as I am concerned the hundreds of billions of dollars it has already borrowed…we’ll never see that. It’s gone.”

    That’s a quote from an oil producer posting on Ron Patterson’s oil blog.

    • Vince the Prince says:

      Those Trillions of published debt by the United States that is growing will also never be paid back….at least with currency which has any value. It is obvious to many, we are all hoping it can be held together.

  32. jdwheeler42 says:

    I think the question of renewable energy could be looked at as a reverse Goldilocks problem. If we build up our renewable energy capacity too quickly, such that more energy is spent on it than is generated by it, it becomes a net drain on our nonrenewable energy supplies and causes us to run out of them faster. But if we build up too slowly, we will not have enough to replace dwindling supplies. And while there likely was a point when there was an optimal rate that satisfied both conditions, it is likely we would have needed to have started 20 years sooner to have that. Now it may not be possible to transition fast enough.

    • “And while there likely was a point when there was an optimal rate that satisfied both conditions, it is likely we would have needed to have started 20 years sooner to have that. Now it may not be possible to transition fast enough.”

      The first hurdle is that our economies must grow exponentially, or they collapse. Government debt, social security, pensions, all require growth or entitlements have to be cut, leading to civil unrest.

      Tied to this hurdle is the observation that as a whole, worldwide GDP is very tightly correlated to increased energy consumption.

      Personally, my opinion is that renewables could be used, but drastic reductions in energy consumption would go a lot further than trying to roll out quite so much new infrastructure and power production.

      Now, for sure the financial and political situation, and possibly the environmental side, are all entering some new phases that probably make any solutions useless.

      • Stilgar Wilcox says:

        “…it is likely we would have needed to have started 20 years sooner to have that. Now it may not be possible to transition fast enough.”

        I think it’s more likely that based on Jevon’s Paradox renewables get added to the overall energy mix, suggesting it won’t necessarily replace FF. Maybe some percentage in some cases, but it’s highly unlikely that in twenty years we will have moved away from FF. Like Matt writes, the economy has to grow exponentially and energy usage must rise along with that growth. The other question to ask is if it was cheap energy that got us here, then how are more expensive energy sources going to keep the global economy growing? We’ve committed ourselves in a direction of relying on the cheapest forms of energy available to maximize profit to support growth. Otherwise it’s caput. One perfect example of this was the massive amount of cheap coal China used to spur their historical growth. Now their coal usage is leveling off, their growth is slowing. Cause and effect.

    • Stefeun says:

      what you describe is the cannibalistic effect:
      in order for a technology to remain an energy producer, or “energy-positive” in case of insulation matérialiste for instance, its growth rate should not exceed the inverse of the number of years of payback.

      For example (imaginary), if a kind of solar panel takes 20 years to reimburse/payback the total amount of front-end investment,
      then the annual growth-rate of this technology should not exceed 1/20 = 5%.
      Beyond 5% annual growth, the technology becomes an energy sink.

      This is described in this paper by Benoît Thévard:
      based on works by JM Pearce (I let you google, many docs available).

    • Fast Eddy says:

      Replacement of oil by alternative sources

      While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source. The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

      Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

      4 Three Gorges Dams,[14] developed each year for 50 years, or
      52 nuclear power plants,[15] developed each year for 50 years, or
      104 coal-fired power plants,[16] developed each year for 50 years, or
      32,850 wind turbines,[17][18] developed each year for 50 years, or
      91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years



      A partial list of products made from Petroleum (144 of 6000 items)

      One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like:


      Renewable energy ‘simply won’t work’: Top Google engineers

      Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.

      Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.

      Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.

      All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.

      In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).