China: Is peak coal part of its problem?

The world’s coal resources are clearly huge. How could China, or the world in total, reach peak coal in a timeframe that makes a difference?

If we look at China’s coal production and consumption in BP’s 2016 Statistical Review of World Energy (SRWE), this is what we see:

Figure 1. China's production and consumption of coal based on BP 2016 SRWE.

Figure 1. China’s production and consumption of coal based on BP 2016 SRWE.

Figure 2 shows that the quantities of other fuels are increasing in a pattern similar to past patterns. None of them is large enough to make a real difference in offsetting the loss of coal consumption. Renewables (really “other renewables”) include wind, solar, geothermal, and wood burned to produce electricity. This category is still tiny in comparison to coal.

Figure 2. China's energy consumption by fuel, based on BP 2016 SRWE.

Figure 2. China’s energy consumption by fuel, based on BP 2016 SRWE.

Why would a country selectively decide to slow down the growth of the fuel that has made its current “boom” possible? Coal is generally cheaper than other fuels. The fact that China has a lot of low-cost coal, and can use it together with its cheap labor, has allowed China to manufacture goods very inexpensively, and thus be very competitive in world markets.

In my view, China really had no choice regarding the cutback in coal production–market forces were pushing for less production of goods, and this was playing out as lower commodity prices of many types, including coal, oil, and natural gas, plus many types of metals.

China is mostly self-sufficient in coal production, but it is a major importer of natural gas and oil. Lower oil and natural gas prices made imported fuels of these types more affordable, and thus encouraged more importing of these products. At the same time, lower coal prices made many of China’s mines unprofitable, leading to a need to cut back on production. Thus we see the rather bizarre result: consumption of the cheapest energy product (coal) is falling first. We will discuss this issue more later.

China’s Overall Historical Production of Energy Products

With the pattern of energy consumption shown in Figure 2, growth in China’s total fuel consumption has slowed, as shown in Figure 3.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

Figure 3. China energy consumption by fuel, based on BP 2016 SRWE.

The indicated increases in total fuel consumption in Figure 3 are as follows: 8.1% in 2011; 4.0% in 2012; 3.9% in 2013; 2.3% in 2014; 1.5% in 2015.

Unless there is a huge shift to a service economy, we would expect the rate of growth of China’s GDP to decrease rather rapidly as well, perhaps staying 1% or 2% higher than the growth in fuel consumption. Such a relationship would suggest that China’s reported rate of GDP growth for 2014 and 2015 may be overstated.

The Problem of Low Coal Prices

Most of us don’t pay attention to coal prices around the world, but according to BP data, coal prices have been following a similar pattern to those of oil and natural gas.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Figure 4. Coal prices since 1999 based on BP 2016 SRWE data.

Oil prices tend to cluster more closely than those of coal and natural gas because there is more of a world market for oil than for the other fuels. Coal and natural gas have relatively high delivery costs, making it more expensive to trade these products internationally.

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 5. World oil prices since 1999 for various oil types, based on BP 2016 SRWE. (Prices not adjusted for inflation.)

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

Figure 6. Historical prices for several types of natural gas, from BP 2016 SRWE.

The one place where natural gas prices failed to follow the same pattern as oil and coal prices was in the United States. After 2008, shale producers extracted more natural gas for the US market than it could easily absorb. This overproduction, together with a lack of export capacity, led to falling US prices. By 2014 and 2015, prices were falling everywhere for oil, coal and natural gas.

Why Prices of Fossil Fuels Move Together

The reason why prices of fossil fuels tend to move together is because commodity prices reflect “demand” at a given time. This demand is determined by a combination of wage levels and debt levels. When wage levels are high and debt levels are increasing, consumers can afford more goods, such as new homes and new cars. Building these new homes and cars takes many different kinds of materials, so commodity prices of many kinds tend to rise together, to encourage production of these diverse materials.

Why Fossil Fuel Prices Don’t Necessarily Rise Indefinitely

Rising fossil fuel prices depend on rising demand. Wages are not really rising fast enough to increase fossil fuel prices to the levels shown in Figures 4, 5, and 6, so the world has had to depend on rising debt levels to fill the gap. Unfortunately, there are diminishing returns to adding debt. We can witness the poor impact that Japan’s rising debt level has had on raising its GDP.

Adding more debt is like using an elastic rubber band to increase the world output of goods and services. Adding debt works for a while, as the relatively elastic economy responds to growing debt. At some point, however, the amount of debt required becomes too high relative to the benefit obtained. The system tends to “snap back,” and prices fall for many commodities at the same time. This seems to be what happened recently in late 2008, and what has happened again recently. The challenge is to restore world economic growth, since it is really robust world economic growth that allows commodity prices to rise to high levels.

Some Historical Perspective on Rising Energy Prices and Rising Debt 

In “normal” times, a small increase in demand will increase production of fossil fuels by several percentage points–generally enough to handle the rising demand. Prices can then fall back again and there is no long-term rise in prices. This situation occurred for quite a long time prior to about 1970.

After about 1970, we found that it became more difficult to raise production levels of energy products, without permanently raising prices. US oil production began to decline in 1970. This started an energy crisis that has been simmering beneath the surface for 45 years. Various workarounds for our energy shortage problem were tried, such as adding nuclear, drilling for oil in new areas such as the North Sea, and building more energy efficient cars. Another approach used was reducing interest rates, to make high-priced homes, cars and factories more affordable.

By the late 1990s, even these workarounds were no longer providing the benefit needed. Another idea was tried: encourage more international trade. This would allow the world access to untapped energy sources, including coal, in the less developed parts of the world, such as China and India.

This, too, worked for a while, but resource depletion tended to continue to raise the cost of energy extraction. Also, the competition with low-cost labor in India, China, and other countries tended to hold down the wages of the less-educated workers in the developed countries. Higher prices at the same time that wages for some of the workers were depressed is, of course, a bad mismatch.

One way of “fixing” the problem was with cheaper debt, and more debt, so that consumers could buy homes and cars with lower incomes.  This fix of more debt stopped working in 2008, as repayment on “subprime” debt faltered, and all fossil fuel prices collapsed.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

Figure 7. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.

To “re-inflate” the world economy, world leaders began to try to add even more debt. They did this by fixing interest rates even lower, starting in late 2008, using a program called Quantitative Easing (QE). This program was successful in raising commodity prices again, although its effect seemed to diminish with time. China’s huge growth in debt during this period helped as well.

Energy prices turned downward again in mid-2014, when the United States discontinued its QE program, and China (under new leadership) decided not to continue increasing debt as quickly as before. The result was a second sharp drop in commodity prices, without a corresponding drop in the cost of producing these fossil fuels. This shift was devastating from the point of view of energy supply producers.

Impact of Lower Prices on China’s Coal Producers

China has a lot of coal resources, but not all of these resources can be produced cheaply. Generally, the least expensive resources tend to be produced first. When prices are high, it may look like deeper, thinner seams can be extracted, in addition to the easier and cheaper to extract seams, but this is never certain. At some point, prices may fall and thus issue a “stop mining” instruction.

When coal prices drop, producers are likely to encounter debt problems, as loans related to coal operations become due. The reason why this happens is because loans taken out when coal prices were high are likely to reflect an optimistic view of how much can be extracted. Once prices drop, operators discover that they have committed themselves to paying back more in loans than their coal mines can actually produce. This seems to be happening now.

What Are the Implications for Future World Coal Production?

If we look at a chart showing world consumption of energy products by fuel, we see that world coal production has turned down in a similar manner to the downturn in Chinese coal production.

Figure 8. World energy consumption by fuel, separately by major groupings.

Figure 8. World energy consumption by fuel, separately by major groupings.

There are many large areas of the world that seem to be beyond their peak in coal production, including the United States, the Eurozone, the Former Soviet Union, and Canada. Note that the United States’ coal production “peaked” in 1998. This added to pressures for globalization.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE.

Figure 9. Areas where coal production has peaked, based on BP 2016 SRWE. FSU means “Former Soviet Union.”

If we consider the rest of the world excluding the areas shown separately in Figure 9 as the “Non-Peaking Portion of the World,” we find that China’s current coal production far exceeds that of the Non-Peaking portion of world production.

Figure 9. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10. Coal production in China compared to world production minus production shown in Figure 8.

Figure 10 indicates that even the non-peaking portion of the world is showing a downturn in production in 2015, no doubt relating to current low prices.

Another issue is that India’s coal production now falls far short of its consumption. Thus, India is becoming a major coal importer. In 2015, India’s consumption of coal slightly exceeded that of the United States, making it the second largest consumer of coal after China, and the largest coal importer. If China should decide to increase its coal consumption by adding imports, it would need to compete with India for supplies.

Figure 14. India's production and consumption of coal, based on BP 2016 SRWE.

Figure 11. India’s production and consumption of coal, based on BP 2016 SRWE.

India’s hope for continued economic growth is also tied to coal, even though it doesn’t produce enough itself. India’s use of natural gas is declining, because its own locally produced natural gas supplies are declining, and imports are expensive.

Figure 11. India's energy consumption by fuel based on BP 2016 SRWE.

Figure 12. India’s energy consumption by fuel based on BP 2016 SRWE.

Imported coal is more expensive than locally produced coal, because of the transportation costs involved. Thus, adding an increasing portion of imported coal will eventually make India’s products less price competitive. India started from a lower wage level than China, so perhaps it can temporarily withstand a somewhat higher average coal price. At some point, however, it will reach limits on how much of its mix can be imported, before workers cannot afford its products made with this high-priced coal.

As noted above, India and China will be competing for the same exports, if they both expect to grow using imported coal. We can modify Figure 9 to show what the size pool producing imports might now look like, if the countries needing imports is “China + India,” and the part with perhaps extra coal to export is the Non-Peaking Areas from Figure 9, less India.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

Figure 12. Coal production for China plus India, compared to production from non-peaking group used in Figure 9, minus India. Based on BP 2016 SRWE.

This comparison shows an even worse mismatch between the peaking areas, and the current production of areas that might raise their supply.

Is Future Coal Production a Function of Resources Available, or of Prices?

Future coal production is clearly a function of both the amount of resources available and future prices. If there are no resources available, it is pretty clear that no resources can be extracted.

What most researchers have not understood is that future prices are important as well. We can’t expect that prices will rise indefinitely, because low-paid workers, especially, find themselves in a squeeze. They find homes and cars increasingly unaffordable, unless the government can somehow manipulate interest rates down to never heard of levels. Because of this lack of understanding of the role of prices, most of today’s models don’t consider the possibility that price levels may cut back production, at what seems to be an early date relative to the amount of resources in the ground.

Part of the confusion comes from the view economists have regarding prices, innovation, and substitution. Economists seem to be firmly convinced that prices will always rise to fix the problem of future shortages, but their models do not seem to take into account the major role that energy plays in the economy, and the lack of available substitutes. Certainly, the history of energy prices does not support this claim.

If I am correct in saying that prices cannot rise indefinitely, then all three of the fossil fuels are likely to peak, more or less simultaneously, when prices can no longer stay high enough to enable extraction. The downslope after the peak will be based on financial outcomes, such as the bankruptcies of coal operators, not on the exhaustion of reserves or resources in the ground. This dynamic can be expected to produce a much sharper downturn than modeled by the Hubbert Curve.

If analysts consider the possibility that prices will never again rise very high for very long, they realize such a low-price scenario would be a catastrophe. That is why we hear very little about this possibility.


It appears likely that China’s coal production has “peaked” and has begun to decline. This is especially likely if energy prices stay low, or never rise very high for very long.

If I am correct about energy prices not rising high enough in the future, all fossil fuels may reach peak production more or less simultaneously in the not too distant future. Widespread debt defaults seem likely if this happens.

If we are, in fact, reaching peak coal, even before peak oil, this is disconcerting for those who believe that the Hubbert Model is the only way of viewing the world. Maybe we are expecting too much from the model; maybe we need a model that considers prices, and how prices depend on wages and rising debt. Falling energy prices are especially bad for the system; they seem to lead to debt defaults.

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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1,385 Responses to China: Is peak coal part of its problem?

  1. Stefeun says:

    Peter Turchin has a blog,
    and an opinion about Brexit and the future of Europe: “the EU has now entered the disintegrative phase.” (Written on Jun.23, he also thought Brexit would be rejected…)

    By the way, in the comment section is this link:
    “Distribution of Household Wealth in the U.S.: 2000 to 2011”

    • Fast Eddy says:

      Without a doubt control will at some point be lost …. the EU will disintegrate… the global economy will disintegrate…

      The question is: what is the trigger event?

      • THE WALL says:

        Why do you insist on trying to impose childishly simple explanations?

        Your next fart could be the trigger – perhaps you should nullify the threat?

        • Fast Eddy says:

          Why? For the benefit of people like you … and so that if a slightly above average 7 year old might stumble across this site … she would be able to comprehend the message.

    • Thanks for both of the links.

      One of Germany’s problems would seem to be all of its renewable energy. This makes the cost of electricity very high for consumers. When this is combined with low wages, it can lead to a bad situation.

  2. Yoshua says:

    After the Brexit vote Germany gave East Europe an ultimatum to form a European Superstate.
    They have now responded.

    Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster

    Poland, Hungary, Slovakia and the Czech Republic issued a joint statement “The genuine concerns of our citizens need to be better reflected. National parliaments have to be heard.“
    ◾Poland and the Czech republic want Juncker booted.
    ◾Governments in Warsaw, Budapest, Prague and Bratislava say powers should be repatriated to national capitals to make the EU more democratically accountable.
    ◾“No one believes in the United States of Europe” said Poland’s deputy prime minister Mateusz Morawiecki.
    ◾“Our voice is the voice of reason,” said Morawiecki, “as for many years the British voice was the voice of reason.”
    ◾Czech prime minister Bohuslav Sobotka has said the overall functioning of the EU and the commission should change.
    ◾Robert Fico, the Eurosceptic premier of Slovakia — which takes over the EU’s rotating presidency this week — has offered to host an exceptional summit to discuss the bloc’s future shape. “If somebody thinks we can offer to the European public what we give it now after Brexit, they are mistaken,” said Fico.

    • Ultimatum? You must be kidding..

      In reality, it’s all just posturing for rearranging more tangential scraps from the German table (and direct towards local elite), most of these countries are heavily chained into the German industry supplier nexus. The Reich v4.0 decided they are worth ~1/5 wages of the “genuine people” and they gladly take it, for some illusions of “western style wealth”, which is mostly on credit anyways. Basically, even during WWII occupation the pay was higher in terms of German vs. Occupied territory worker, obviously excluding the unlucky category of slave labor, but this has been now blanded into one category of near slave labor as described above.

      • xabier says:

        Same with the VW factory in Northern Spain. The locals regard those jobs as a great prize, little appreciating how they are just cheap labour to the European industrial hegemon……..

    • TAB says:

      I think we all overestimate ‘The People’ and the majority.

      Look at super educated California, supposedly the richest place on earth.

      What do the majority care about?


      The most respected profession on earth, the physician, has sold more narcotics in the past 10 years than the Medellín Cartel.

      How many people do you know are working on a fusion reactor in their spare time as a hobby?

      A guy in a factory I worked at said to me: “All a person really needs is a beer and a pack of smokes”…

      Collapse is a relative concept.

    • EU is low on energy supplies. This no doubt contributes to its problems.

  3. dolph911 says:

    I’m not sure how you expect the world to look at peak (the moment we are going through now and have been for some time).
    Peak is exactly that…it’s great! It’s euphoric, it’s youth, it’s love, energy, optimism, etc.

    We have had a “sort of” decline for many people but the real decline has yet to come. Being a physician I am among declining people all the time, it’s my job to be their mechanic and keep them going.

    TPTB know that this is all or nothing. Everything is being thrown at the problem, because when this thing unravels it isn’t coming back. Not in 10 years, not in 50, 100, a million years. Never. That’s a long time!

    Where I differ with you is that I think the process is a little slower. On the order of decades. Some people don’t even believe it’s that fast, some people think this will take a century. Now, I don’t subscribe to that view.

    Late 2030s. That’s how long we have. That’s not too long from now, actually.

    • Ed says:

      Yes, it will take some time and be very non-uniform. Brazil pushed down. Venezuela pushed down and bought out.

    • TAB says:

      “Everything is being thrown at the problem…”

      The currency emitters don’t have a problem. What problem do they have?

      • Perversely enough, their problem is how on earth this contraption of global economy has not collapsed already. In fact, they must be chucking all day long kind of insanely, as the system keeps freewheeling on faith vapor even though they openly sanitize the debts via junk bonds, stock buy backs and other schemes to the tune of trillions per year and dozens in aggregate per decade, perhaps reaching even hundreds of trillions of notional debt in next two decades!

        After me the deluge..

    • xabier says:

      ‘Candles burn brightest just before they go out.’ (Ibn Khaldun, 14th c, in his ‘Universal History.’ )

      This is certainly true of London today. But the flame gives no warmth.

  4. Fast Eddy says:

    I read an article earlier blaming tanking retail sales on Hong Kong on Brexit….

    Immediately my spider sense started to tingle …. my antennae stood to attention …my ears did this:

    How in the heck does the Brexit vote cause HK retail sales to drop???? Of course HK retail sales have been dropping for months now….

    With this in mind I began to scan headlines and I was seeing stories about bail outs, banks in serious trouble, BOE QE this summer – there was an article indicating US corporate profits would continue to drop with Brexit to blame……

    All problems are related to Brexit. It’s as if everything was ok — but then suddenly they started to fall off a cliff the day after that fatal vote….

    Being a keen observer of how the men in control operate…. I came to the following conclusion:

    The global economy is definitely worsening dramatically

    To come out and state this would violate the PR Act established by Eddie Bernays (see chapter 14 paragraph 8 sub section 3.1) which can be summarized using a JC Juncker drunken quote ‘when it gets really bad you have to lie’

    The sheep—le cannot be told that the green shoots are dead. They cannot be told or allowed to infer that the trillions and the zirp and the bailouts and all that jazz — have failed…

    No no no no no …. heaven forbid…..

    If I were Don Draper (oh if I only I were Don Draper …. how happy my wife would be!) what I would tell the High Priests is …. gents…. we need to manufacture a crisis….

    We need a catch phrase for this crisis — I have come up with a few but I suggest we use Brexit…

    Next up would be the part about how we spin how the recovery was proceeding as planned but these bloody Brexit bungholios messed everything up…. we run endless stories blaming everything on Brexit….

    I would suggest a new Bond film …. with Brexit as the acronym for the ultra villain ….

    Then we have justification for QE4 and whatever other desperate policies are required to keep the global economy from exploding…

    What do you reckon up there in Alaska…. conspiracy theory … or reality theory?

    • common phenomenon says:

      So, Brexit has a scriptwriter? I thought it looked pretty damn surreal. Latest: Labour leader Jeremy Corbyn has turned into a weredog. He is out on the streets of London, terrorising our citizens. It is believed he is infected with rabies and highly dangerous.

      • Stefeun says:

        I don’t think that Brexit has a scriptwriter.
        Rather, they just take advantage of the event and spin it into diversion, or build some convenient narrative around it, to funnel the opinion towards most controllable direction.
        Crisis management requires some distorsion of the reality.

        • Fast Eddy says:

          Sometimes they just things happen …. like 911… because they want them to happen….

    • Tim Groves says:

      Brexit may have been scripted at some levels and left to play out naturally at others.
      For example, it is not beyond the realms of possibility to fix a referendum result. Suppose everyone was expecting it to be weighted a few percentage points towards Remain, but instead the fixers weighted it a few percentage points towards Leave. Result: Brexit and shocked faces all round.

  5. Ed says:

    The Nordic Alliance from Greenland to Iceland to Norway to UK I love it.

    • UK is way out of its league, in terms of energy use per capita. If we look at EIA data for 2012 together with population data for the same year, this is what we get for various countries, in million Btu per capita:

      United States 301.96
      Greenland 266.22 (I wonder if Greenland’s figures might be low–we are dealing with tiny numbers, for both energy use and population)
      Iceland 640.06
      Norway 387.18
      Saudi Arabia 315.77
      UK 135.72

      In terms of trends and even total quantity, I think the UK is more in line with Japan, Spain and Greece. (Note different units–BP data is more recent, but doesn’t give information for small countries.)

      UK, Japan, Spain and Greece per capita energy consumption

  6. InAlaska says:

    I was in Washington, DC and New York City last week at the very heart of the beast. Both were busy as bee hives, prosperous, energetic and full of youthful people with aspirations. Cars on the roads and restaurants filled with happy diners. Shops were full of middle-class customers. There was no hint of peak oil, resource depletion, climate change, ecological catastrophe, exhausted credit cards or economic/political paralysis. The weather was pleasant. I felt like a ghost walking through an impossible future.

    • Vince the Prince says:

      The “Beast” is running on inertia fumes….

    • Christian says:

      Sure the core looks like that. Perhaps the ghost would have felt differently in poor neighborhoods he didn’t visited -because there is nothing there to do

    • As long as banks can continue to operate, and people’s bank accounts can buy things, the situation can continue to be fine. I saw an article today saying “71% of Americans think the economy is rigged.” It is; that is what is keeping the system together. We should be congratulating central bankers on their fine work.

      • Fast Eddy says:

        71% … interesting …

        I wonder who they think is rigging the economy…. ah of course … the Fed…. the men who own the money supply ….

        The men who make the decisions on things like who gets billions to buy back shares to prop up the stock market…

        The men who decide if the interest rate will be ZIRP or NIRP … or if rates will rise….

        The men with the Plunge Protection Team that steps in if the stock market starts to collapse.

        The men who decide who gets bailed out.

        The men who authorized the pumping to trillions of liquidity into the economy since 2008

        The men on who’s announcements (through their spokesperson Yellen) the world waits holding their collective breaths…. because EVERYTHING apparently hinges on what she has to say.

        Who are these men? Are they elected? Did any of you vote for them?

        Seems to me they have a hell of a lot of power for a group of unelected people…. if one were not living under the delusion of democracy one might say ‘hey – what do the owners of a private company appear to be making all the most important decisions? Why aren’t my elected officials making these decisions?’

        One might even conclude that the tail wags the dog.

        I can understand how most Americans (and most people on the planet) would not reach these – what are to me – very obvious conclusions.

        When from the time you are able to speak you are pounded over the head with the myths of democracy … with the lies that the president is the most powerful man on the planet … that you live in the world’s greatest democracy …. etc etc etc….

        Decades of being hammered over the head with these lies results in them becoming a part of … very much like a basketball player who practices free throws for hours every day … year after year after year…. the act of throwing the ball into the hoop from the foul line becomes second nature — he no longer thinks about the mechanics….

        Anyway — our masters are indeed doing a very good job of managing the situation …

        Can you imagine what would happen if we allowed the elected politicians to do the job?

        • Fast Eddy says:

          Why is Juncker doing this? Apparently to remind the photographer that Farage is a non-person whose image must not be seen in the newspapers.

          Seriously – can you imagine such people being put in charge of anything more than which pot holes get filled first? heheheheh

          • These well documented antics fit his description of seriously ill person (alcoholic relapses), prior to EU Comm used to be a “water boy” in Luxembourg gov for various money laundering and corruption schemes of international scale. He is basically a tool, shady bureaucrat serving his masters.. I guess there are at least three organizational levels up him before you get somewhere closer to the real owners of the system..

            • Fast Eddy says:

              Breaking News: all politicians and bureaucrats are tools… minions… errand boys and girls….

            • Artleads says:

              Earlier today, a superficial thought (I’m used to them) ran through my consciousness: “A politician (within BAU, as if there is some other kind) is either a criminal or a fool.”

              But now I wonder. To be criminal, they’d have to understand finite-ness (especially of oil) while pretending not to. But I see no indication of any politician doing this. Maybe the kind way to regard them is that they are pathological with a healthy dose of foolishness in their makeup?

            • xabier says:

              ‘The real owners’.

              A friend of mine set up a hedge fund. He told me that he was feeling rather disorientated after the initial search for funds, as things went like this: they would meet a Mr X, who said that he represented a Mr Y, who in turn represented a Mr Z.

              Anyway, it’s all nonsense, as we know that none other than Momma Nature (not Merkel) is in charge of this farce and she is not at all happy with us.

              We are due for a spanking any time soon, (she doesn’t believe in all that modern parenting nonsense) and up to bed without our suppers.

              We do take ourselves far too seriously, do we not?

    • Yep, many of us went through such motions at least once and what is worse, this “suspended time effect” feeling-observation tends to return from time to time. I think it’s natural though, people are mostly pre-wired for group think and herd behavior. He who does something differently, such as “thought crime” going against prevailing status quo is basically opting for different survival strategy ala high risk – generally low reward. We are not better, just sensing differently, perhaps it’s just a form “of disease”, which also have to be present among minority part inside given society, as it is demonstrably much enjoyable to live opulently as long as possible and don’t ask question or even allow any doubts..

      • xabier says:

        Another excellent Persian proverb I’ve just discovered which relates to herd behaviour and truth-perceiving, and going with the flow:

        ‘It’s good to know the Truth; but better to know the Truth and just talk about palm trees.’

        • ‘It’s good to know the Truth; but better to know the Truth and just talk about palm trees.’

          This Persian proverb makes sense. People cannot deal with the truth.

    • xabier says:

      In Alaska

      I have similarly been in London recently: I went to visit areas that have boomed due to the easy money policies. I rather enjoy that ghostly sensation of a witness to unreality!

  7. Stefeun says:

    I assume that among those who know how to analyze a trend, a mere glance is enough here, some must have taken good money, since the British bookmakers had offered eighty to one odds against the Brexiters.

    • British bookmakers must not have been thinking very closely about what was happening. I remember hearing that a 2 point lead for staying was a cause for great rejoicing. Given the sampling error in the US, as well as the fact that not everyone votes, it seems like a lot of humility regarding projections would be in order.

      • Gail, the bookmakers issue is a red herring, they are supposedly impartial and see the odds and probabilities as they are, that’s nonsense. Just in this case of Brexit has been reported that the statistically over skewed, i.e. strange happenstance, majority of the small brexit favoring bets were done by real little people, while remain bets were oddly placed large sums of money.

        And something similar has been happening basically throughout all major betting frenzies around political issues for decades, yet still “the media” always go back to betting parlors as the sober judges of the situation. It’s a joke, wake up.

      • Stefeun says:

        Sure, Gail,
        Predictions are difficult (especially when it’s about the future ;-))
        And humility is welcome in any circumstance.

        BTW, it seems to be a general trend, polls are becoming more and more inaccurate, see for example:

        One can blame this or that, people are also more versatile, but IMHO the core problem comes from the question side. For one, the questions are so “spinned” and “adjusted” in the hope of obtaining the desired outcome, that it no longer reflects the reality, and on the other hand people realize that it doesn’t matter wether their answer is yes or no, it won’t change anything since they don’t have any control on the events. Democracy was an illusion, decisions are taken by unelected people, everybody knows it now ; the Greece/Syriza episode was the most blatant demonstration of that state of fact.
        Opinion poll’s utility seems to be reduced to determine who’s the cutest puppet on the block.

        • Stefeun says:

          This Brexit story has decidedly many parallels with the French referendum of 2005 in France (and The Netherlands) about the European Constitution.
          People voted NO despite huge propaganda, but a few years later the Lisbon treaty, which was the same text, was adopted by a vote of the deputees and senators. Talk about representative democracy…

        • In the United States, part of the issue is that pollsters aren’t supposed to call cell phones–I think that this is a hold over from when incoming calls added to charges on cell phones.

          Quite a few people, especially of the younger generation, have only cell phones. Those who do have “regular” phones are not much interested in answering them, because so many of the calls are polls (Are you voting for candidate X or Y for county judge? or something else that no one cares much about) or solicitations for donations from tiny charities.

  8. Nick George says:

    A sign of optimism from Romania. Please see the documentary in the link to see how no longer than 50 years ago people were living a simple life being healthy and happy. Regards from Romania

  9. Yoshua says:

    Royal Dutch Shell predicted long time ago that Peak Oil would lead to:

    A: Cooperation between nations to deal with the situation.
    B: Chaos, anarchy and war.

    Needless to say that they believed that it would lead to option B.

    • Fast Eddy says:

      Now all we have to do is imagine that sort of situation spreading to all oil producers – and it will — and we can see how oil production goes to nil.

      Imagine there’s no oil,
      It’s easy if you try.

      • Yoshua says:

        It’s a dog eat dog world.
        But it wouldn’t be nothing without a cat or two.

        Well… now they are gone too… and so are the pigeons. Soon Caracas maracas will be teeming with bugs and rats. That’s when they switch to a new menu.

      • Ed says:

        Just a roll over. They go bankrupt and the FED pays its friends to buy up the under valued assets. Get that oil under US/Israeli ownership.

        • Fast Eddy says:

          How would that change anything?

          The break even remains over $100.

          The economy cannot function on oil anywhere near $100.

          Why would anyone want to own an asset that is going to lose money on every barrel of oil pumped out of the ground?

          Perhaps they can adopt the Tesla model to oil — you take a business that is guaranteed to lose money on every unit produced then subsidize it to allow it to maybe make a ‘profit’

          We are saved — hallelujah — we are saved!

          Subsidized — it’s music to many people’s ears — it has connotations of endless free stuff 🙂

    • Tim Groves says:

      Nothing but empty gas tanks
      From Dallas to Dubai
      Imagine all the people
      Trying to get by……

      • If people’s bank accounts are closed, it won’t matter whether the gas stations are open or closed.

        • ejhr2015 says:

          That will happen if the grid is seriously interrupted, such as with an EMP event, another Carrington flare. Apparently that was serious enough to ruin a new undersea cable set thousands of metres underwater.

    • Tim Groves says:

      You may say I’m a doomer
      But I’m not the only one……

    • My favorite quote,

      Output is falling largely because oil-services companies aren’t being paid, according to the International Energy Agency.

      There are an awfully lot of people who believe that the only reason why oil supply can decline is because of geological conditions–in other words, that pressure drops, and because of this, it takes more pumping to get out the same amount of oil. (The oil/water mixture that is pumped out is increasingly water in the mix.) I expect that not being paid is a big reason why production will stop. I saw some articles about refinery strikes in France. This is another way of ending the production of oil products.

  10. Stefeun says:

    oil, interest rates and debt
    by Rune Likvern

    “This article has also been about how the oil companies responded to a higher oil price and how their growth in debt (stimulated by the decline in interest rates) was used to grow CAPEX in a bid to grow supplies of costlier oil for an expected growth in consumption that could sustain a high oil price.

    The other side of the equation is the demand (consumption) as lower interest rates also allowed consumers to expand their balance sheets (take on more debt) to afford higher oil prices and grow consumption.

    The recent lower oil price predictably stimulates more consumption, but as more consumers will continue to struggle with their balance sheets, they are now more sensitive to considerable increases in the oil price.

    This creates for an interesting situation; the price a growing number of consumers find affordable may be lower than what the oil companies need to go after the costlier oil and retire their debts in an orderly way.”

    • Exactly. An important point Rune Likvern makes is,

      “A combination of lasting, low oil price and declining production makes it harder to access more and/or roll over debt.”

    • This is fantastic article (and discussion bellow) on many levels..

      I’ve been struck by his notion (not further developed in the article) of possibly higher interest rates in the future. To jump start such a shift, that would mean complete overhaul of current financial (and social) system and likely only feasible after very deep reset, I guess this would entail pretty nasty components like world war, the last final blood transfusion from the rest of middle class, return of openly command style economies or more precisely remaining entire sectors of economy moving under command style control etc.

  11. Stefeun says:

    Brexit as a symptom of a new step in class-struggle:

    “To paraphrase the old Marx, every materialist must first handle the dialectic. According to this method, the “Brexit” indicates, in fact, that a significant fraction of the Anglo-Saxon middle-class can no longer find its account in its alliance with the financial micro-layer. The internal contradiction in the bourgeoisie is becoming so blatant that it challenges the power set up in European institutions.

    The deal being broken, we can expect an accelerated decomposition of the European institution in the months and years ahead. The class alliance is broken. Because the recession has been there for ten years already: after the popular and intermediate layers, the small-middle bourgeoisie also began to suffer, particularly because of the erosion of income from its savings and its income, and this in all European countries. Liquidity injections (QE), negative rates, are vital to save the financial and banking system, but it causes a devaluation of assets at the expense of classical bourgeois class. In short, financial micro-layer bleeds the annuitant!”

    Global finance has sucked up dry the working class, then the middle class, and now the rentier class.
    Makes sense. But it can only last for so long.

    • common phenomenon says:

      George Monbiot is optimisitic as a result, but then he always is:

      Brexit is a disaster, but we can build on the ruins

      • Stefeun says:

        Thanks for the link,
        Yes, too much optimism works against credibility.

        I like this one: “Man was born free, and he is everywhere in chainstores.”

        • ejhr2015 says:

          That remark stood out for me as well.
          George in an earlier blog recommended Remain. His reason was the neo-liberalism in Britain was not as toxic as in the EU.

    • Great post.
      Agree, in reality and knowing history, “small-middle bourgeoisie” would always hold their nose as long as their little piece of the meal is offered y/y, pogroms, segregation, clubbing desperate poor, you name it, all jolly fine, as long as their little rent is somehow kept intact.. That’s why unless we go through first a stage this and class above them (still not the true top) gets crushed enough, nothing changes.

    • dolph911 says:

      Britain is where our system began. It’s not surprising to see it’s the same place where our system will end.

      Rome —> Pagan Roman Empire —> Seat of Roman Catholic Church.

      • InAlaska says:

        Yes, there is a certain attractive symmetry to the idea that the old, rotted heart of original industrialization (Britain) would be the first place to go under. On the other hand, common wisdom would have us understand that it is the periphery (Greece) where the end begins and chaos works its way inward. I truly wonder which way it will be. Both Britain and Rome were at the seat of world-spanning empires, and both Britain and Italy are still participating in the riches of a global empire and so perhaps they never really were unseated…

    • This is the way UK’s per capita energy consumption looks:

      UK compared to Japan, Spain, and Greece in per capita energy

      Their poor condition shows in UK energy consumption per capita dropping dramatically starting in 2006.

  12. The conservative claim of ~300 EROEI for high alt kite generators is spreading, so with Google and Gates backing is that another “fusion around the corner” dead end?

    On the other hand the irony, this civilization being massively can kicked by such silly contraption, could make one a believer..

    • TAB says:

      EU: “Hey Italy, go fly a Kite!”
      Italy: “We are we are”

      This smacks so badly of desperation that I think I will go off and cry now.

    • Ert says:

      The issue may be scale-ability.

      I remember a Paper that said that the (land based) Wind potential was 1TWh. Kite Power could extend that. The problem I think with kite power is that you had to check for places with no buildings, high-power transmission lines and the like around for the length of the “cable” where the kite is connected.

      I think that would limit the “deployability” of kite-power very much in lot of areas for central-europe. But for population-sparse areas I may be a solution with a high potential…. depending on the lifetime of the kites and the potential for full automation.

    • Euan Mearns talks about the intermittency as not being reflected in the high numbers. I don’t think this is proven technology at this point. I expect that the same brand of factory will need to be around to make replacement parts. If it is bankrupt, that is a problem. Without some kind of storage, you can’t power a large share of your economy on kite generators.

  13. common phenomenon says:

    Here in the UK, my antennae are twitching. I’m seeing increasing polarisation and escalation in the country over recent years. That is currently being joined by political paralysis. This all adds up to a dangerous cocktail.

    1] 2013: Nigel Farage flees barrage of abuse from Edinburgh protesters – Party leader takes shelter in police riot van as demonstrators chant: ‘Ukip scum off our streets’

    2] 2014: Scottish independence referendum: 45% in favour, 55% against. This polarisation split families and friendships.

    3] 2015: Anti-austerity protest: Ukip MP Douglas Carswell mobbed by demonstrators in London
    ‘It was like a lynch mob, I have never seen such hatred’

    4] June 16 2016: Pro-EU Labour MP Jo Cox murdered by man shouting “Britain First!”

    Also, Google Nigel Farage’s “Breaking point” poster, published on June 16

    5] June 24 2016: Boris Johnson jeered by pro-EU street mob

    6] June 28 2016: MP Pat Glass to stand down after ‘bruising’ EU campaign

    A Labour MP, who revealed she stayed away from her local referendum count after receiving death threats, has said she will not stand for re-election.


    The UK voted 52% in favour of leaving the EU. As things stand, England and Wales voted to leave the EU but Scotland and Northern Ireland voted to stay. The whole country is split down the middle. Once again, friend and families have been polarised and there is a lot of bitterness. The EU has just told the SNP leader that they cannot deal separately with Scotland, as it is part of the UK. Cameron says the overall leave result binds the whole UK.

    However, nobody is certain when the UK will trigger Article 50 (which starts the “leave” process), how long it will take, and whether both Houses of Parliament will even pass the necessary legislation, since the referendum result is not binding. It could take years, and meanwhile the pound and the markets are at risk, and companies and the City are already planning to move base from the UK to EU countries.

    Also, most of the Labour Party leader’s cabinet has resigned and have asked him to stand down as leader. He has refused, as he was elected mainly by the grass roots, not his MPs. So, there is a stand-off. Labour Leader Corbyn is very left-wing, and he has hard left supporters in the Socialist Worker Party and a group called Momentum, which has been accused of intimidating regular Labour Party staff.

    Thousands attend pro-EU demo outside Scottish Parliament


    I’m sure you know there have already been pro-EU demos outside Westminster and elsewhere in London. The Guardian editor has called this the worst political crisis he has known in the UK since the Second World War, because nobody can see an end to it or a solution to it. Just over a year ago, Cameron was the triumphantly re-elected prime minister. Now the country is politically polarised and semi-paralysed. The Conservatives are organising a leadership contest, and the Leader of the Opposition has lost the confidence of his party. All in all, this is a hugely dangerous situation in the UK.

    Not only that, the post-referendum situation has caused ructions over the past couple of days in the off-topic section of one of our hobby forums. Some posts have been locked or deleted, and I believe two, maybe three, members have left in protest.

    • common phenomenon says:

      “companies and the City are already planning to move base from the UK to EU countries”.

      Correction: *some* City companies

    • Tim Groves says:

      It sounds like a “color referendum” is on the cards in the UK.
      How are they going to spin this one? My guess is:
      “Freedom outside the EU is slavery. Slavery inside the EU is freedom.”

      When we look at the referendum figures, the only ones that officially count are the numbers of votes counted, with 52% voting Leave and 48% voting Remain. But the turnout was only 72.2%, so we can also say that well over a quarter of voters were not sufficiently interested in the issue to bother voting, so that the electorate was split 37.6% Leave, 34.7% Remain and 27.7% No Comment.

      In Scotland, where the SNP is claiming a mandate for Remain, the turnout was 67.2% and so the electorate was split 25.5% Leave, 41.7% Remain and 32.8% No Comment.

      Even in England, the Leave vote was 39%, Remain was 34% and No Comment was 27%.

      So, no “overwhelming mandates” for anything, anywhere. But the UK employs a first-past-the-post voting system and and this was an IN/OUT referendum, so the ordinary, decent and sensible British people should be able to come to an agreement that the result was fair and should be accepted.

      I’ve never seen so much attempted manipulation of the public mind as is being attempted by the pro-Remain forces (especially from the Guardian) since the result went against them. There are very desperate people working hard to reverse the Leave decision, or absent that, to save what they can from the wreckage of their plans. I wouldn’t be at all surprised if these Remain demonstrations were being orchestrated by George Soros, or if the next step was for Victoria Nuland to be photographed handing out buns and cookies to protesters in Trafalgar Square.

      • common phenomenon says:

        I suppose such visible splits just encourage people to fight to make their own group top dog. A colour referendum – interesting, and you make it sound ominous too. Probably the Tories will privatise Scotland, before the Scots get a chance to become independent, and sell to Trump, who will turn it into the world’s biggest golf course and force the mainland population to live on Orkney or Shetland (neither of whom would wish to go independent with Scotland, I have read).

        The whole situation is a disaster. Cameron clearly hadn’t done his homework about what to do if “leave” won, because he quite simply thought it wouldn’t. That’s the shallowness of the elective dictatorship for you. A coalition government would have been forced to do its homework. As it is, two leave campaigners were asked by a TV interviewer after the referendum what their plan was. The reply: “We haven’t got one”. The interviewer looked on in disbelief. I’d have made them turn their pockets out on the spot. “I’m sure Nigel gave you one”, I’d have told them. “Don’t tell me you’ve lost it already?!” Really, you couldn’t make it up. It reminds me of that joke, “I woke up this morning to discover that burglars had replaced all my furniture with exact replicas”. The current stand off in the Labour Party is surreal. I’m really beginning to wonder whether I’m actually still asleep and dreaming and haven’t woken up. 🙁 From stability, of a sort, to chaos, all in a few days. It reminds me of the time Vince Cable accused Gordon Brown (in the House of Common, when he was prime minister) of being Mr Bean and turning order into chaos:

        • Tim Groves says:

          With the current atmosphere, I’m not surprised Boris has decided to drop out of the PM race. There are five candidates now, and I’m putting my 10p on Teresa May. When the going gets tough, the British Tories instinctively cry for nanny, as their earlier choice of Margret Thatcher showed. Like Maggie and Mary Poppins, Teresa is a mature and matronly figure with a no-nonsense attitude who will make the country take its medicine, say its prayers, and get to bed by 9pm.

          • common phenomenon says:

            An atmosphere Boris helped create by backing Leave, so now he’s being slagged off mightily by fellow Tories. I don’t actually believe in the old man in a nightie, but we’re going to need our prayers in the UK after this disaster. After all, Cameron went into this on a wing and a prayer, with no plan for what happened if he lost. We’ve stuck 2 fingers up to the EU, an organisation we’ve been embedded in since the early 1970s. Now what? It will decimate the City, which votes Tory almost to a man, and a Tory prime minster has done this to them. “Poundland” is big business here with the less well off, but what will a pound buy you in two years’ time? It’ll have to close down or else rename itself.

            Cameron had it all – he unexpectedly won an election with a majority little more than a year ago, and he was called the Teflon prime minister. He was boasting he would see out his term without leaving in the ignominy that former Tory PMs did. How wrong he was, and it’s all his own fault. He obviously thought, well, if those bolshy Scots fell into line in their referendum, the country as a whole will be a walkover. In fact, his referendum exposed a country split every which way. I’ll be surprised if we still have a UK by 2020.

            Two nights ago I dreamed my house was on fire and woke up in a panic. It’s not hard to interpret that dream: Britain is my house. It was an anxiety dream.

            “When you walk through a storm”, indeed.

  14. Christian says:

    It’s very hard to imagine a whole world on zirp, but perhaps Orlov is wrong when he supposes that the destruction of deposits leading people to spend the money would hurt the banks. In fact there is general complain that money velocity is low. The banking system would only be hurt if money goes physical, so it will not be able to score it in any account anymore.

    I suppose if banks can lend each other on zirp mode, the only formal requirement to avoid bankrupcy is to maintain a positive balance account, regardless of wheter it is going up or down

    Do I am wrong?

    What would happen to money creation? Would it stop? Would money be destructed, as Orlov suggests as well? Would we be witnessing the jubilee?

    • Christian says:

      I mean nirp, not zirp, of course

    • You are correct, as long as the people could be corralled into the world of make believe, every pre-crash situation is manageable by the owners-operators of the system. The problem is at this point we can’t discount the enormous potential for further expansion of silliness. For instance, many experts believe now is the high time for switching from monetary to down to the earth fiscal stimulus, which would sort of substitute for a traditional jubilee.

      It could be anything from mandatory curtailing work hours/weeks, i.e. more non frivolous leisure and less work in terms of burning energy. Alternatively, sort of global psy-op could not be discounted, where all the leading big players invited to the project (incl. China, Russia, India, ..) suddenly announce mortal danger to the Earth imminent, either as of ecologic (poles melting, super bug) or universe impact (asteroid, rays, ..) nature. So in effect, little people would be corralled in controlled fashion into very frugal existence with little opposition as possible. Before you lough that off, think it through, there have been at least half a dozen very big international events in the past ~50yrs about which USSR/Russia (and others) kept very quiet or “indifferent”, although it would present them with massive boost in propaganda war to say the least, evidently the silence had to be compensated and or balanced out somehow, so we know these schemes are possible to maintain at least in time scale of decades.

      • Christian says:

        I don’t mean a traditional jubilee, which is rather instantaneous. It’s a metaphor -or not so- for a gradual disparition of money. What is it meant by down to the earth stimulus?

        It is not a question of believing, people won’t pull out of the system because there is nothing outside where to go. Investment in the system is guaranteed, until, as you say, people stop eating or something like that

        Korovicz’s description is somewhat expected to be the last picture, but he does not pay much attention to nirp nor to social unrest, or strikes. Perhaps he consciously avoided some topics

        • Stefeun says:

          Korowicz does take into account the risk of “socio-political instability”, see,
          but it actually doesn’t seem to be at the top of his list.

          • Christian says:

            That’s what I am saying. It’s also true it doesn’t seem easy to model, perhaps there is no sgnificant antecedents as with volcanos or such. He do takes a british strike in the fuel distribution field, I think, but he does it to highlight JIT timing. Strikes are not really to be feared, Unions wont push a strike so far as to hit a systemic tipping point. Not within so obviously important fields as banking, fuel, tansport or police

            The question remains: what about nirp possibilities?

            • Stefeun says:

              As for NIRP, I think it could work, but only if the whole system is based on it. Will never happen.
              IMO the “plugs” we’re currently seeing are just giving some more time to BAU by helping hide some issues, but it’ll be short-lived. We can’t run both systems together.

              Some links perhaps you didn’t see here:

            • The thing to remember is that we have a system based on rising debt. That debt is nearly all at positive interest rates. Certainly the interest on credit cards, student loans, and home loans are at positive interest rates. Any program that tends to reduce the money in people’s bank accounts is going to make that debt harder to pay back, rather than easier to pay back. It will cut down on the money that people have to spend on other things, so it will tend to pull the economy toward lower growth.

              I talked about debt, and increasing debt, being what pumps up demand, and thus commodity prices. Bankers believe that negative interest rates will increase debt, but my belief is that negative interest rates will not. They will tend to have the opposite effect. In fact, the evidence to date is that negative interest rates don’t really increase spending. People concerned about retiring in a few years tend to hoard their money even more, believing that by doing so, they will be able to save for retirement.

            • Christian says:

              Thanks Stef, haven’t seen. It seems nobody can imagine very much such a kind of world -while Dimitry truly seems to be wrong about that point, as the Feasta guy reg. money velocity and “buying what we need, not what advertising sells to us”, because such a distinction does not really exists

              As Gail says, in an important sense we do live in a money world, but it is not totally obvious what this means. I don’t get the 1/i argument, but it is to expect that assets would loose value if money disappears. It is obviously the case for stocks, perhaps not so much for houses, specially bank owned houses: who tells the banks how much are worth that kind of assets, given there is no centralized market for them?

  15. Fast Eddy says:

    Brexit…. much ado about nothing… tempest in a tea cup….

    Global stocks gain as Brexit nerves settle

    • InAlaska says:

      For all of the conspiracy-minded people out there who haunt this site (FE), the Brexit vote is proof positive that there is no secret shadow government or cabal of elite illuminati working in concert to control the world. No elite would have voted for Brexit. None of the supposed “fat men with cigars in backrooms” would have allowed London to stray from Europe. They are not in control of everything. You’all need to take off your tinfoil hats, you’ve been unmasked.

    • InAlaska says:

      There is no Deep State controlling world affairs (FE). If such a thing were true the supposed Deep State would never have ‘allowed’ Brexit to happen. This is proof positive that tin-foil hats don’t work. The concept of supposed Illuminati of Elites who are ‘in charge’ has been thoroughly debunked by the common-sensed minded British voters. No elite would ever have allowed London to slip away from Europe. Take off your hat. Wake up!

      • Fast Eddy says:

        Perhaps that is what they wanted to happen.

        Or better still – perhaps they see it as irrelevant.

        The world didn’t end did it.

        Now raise your flag and sing God Bless America — and be proud to be a citizen of the chosen country!

      • “There is no Deep State controlling world affairs (FE). If such a thing were true the supposed Deep State would never have ‘allowed’ Brexit to happen. ”

        A strong Europe, particularly one that is aligned with Russia, is contrary to America’s interests. If it is not some master plan, it is at least the ideology of the neo-cons, who are obsessed with beating the Russians.

        • Fast Eddy says:

          Of course Putin is currently in a battle to the death with the Deep State (Elders) — with China currently aligned.

          As we have seen they have thrown the petro dollar under the bus…

          He is trying to pry Europe from the US sphere….

          No empire lasts forever. There are always would-be usurpers….

          The ultimate usurper is of course The Finite World

          • InAlaska says:

            A strong, united EU (with Britain as part) is part and parcel of Globalization–a major goal of the supposed “Elders.” If they were so “in charge” of world events, they wouldn’t allow something like Brexit to occur, so counter to their interests. I’m not saying that the Elites don’t exist, but I am saying that they are not as all-powerful and in-charge as many on this site give them credit for. Of course, a strong Europe with united markets is perfectly aligned with American interests (as evidenced in the stock market decline after Brexit). Globalization is often heralded here as evidence of the forces of the Deep State so that Capital and seek cheap Labor. So either Globalization is good for the Elders or it is not (Brexit) and they wouldn’t have allowed it to happen, but you can’t have it both ways, FE. Pick one and stick to it.

            • Fast Eddy says:

              a major goal of the supposed “Elders.”

              I was not aware that the Elders were in the business of publishing their intentions…

              Of course there was the leak ‘The Protocols of the Elders of Zion’ which created quite a stir…. I am sure some hands were slapped over that …. it took a lot of effort to discredit it… so one could imagine that they hold their cards very close every since…

              Let’s apply some common sense to this theory of one world government….

              On one hand there is this assumption that there are these Elders — who supposedly run the world (with Russia and China not reluctant passengers)

              And on the other hand these assumed Elders desire a global government.

              If you already run the world — why pray tell do you need a one-world government?


            • Fast Eddy says:

              a major goal of the supposed “Eld…ers.”

              I was not aware that the Elders were in the business of publishing their intentions…

              Of course there was the leak ‘The Prot—ocols of the Eld—ers of Zi—on’ which created quite a stir…. I am sure some hands were slapped over that …. it took a lot of effort to discredit it… so one could imagine that they hold their cards very close every since…

              Let’s apply some common sense to this theory of one world government….

              On one hand there is this assumption that there are these El,,,ders — who supposedly run the world (with Russia and China not reluctant passengers)

              And on the other hand these assumed E…lders desire a global government.

              If you already run the world — why pray tell do you need a one-world government?


          • bandits101 says:

            “The Elders” are similar to gods. You can’t see them, they don’t announce any intentions, if it happens “The Elders” willed it, if it didn’t happen “The Elders” willed it. Maybe we should all be praying to “The Elders”. On the other hand, the world is going to hades in a hand basket……..who is in charge of that?

            • Fast Eddy says:

              Gods? Perhaps they believe they are… (Putin doesn’t believe so)

              Just as the Greek elites did… and the Persians… and the Spanish… and the British …

              I read a book about the great Khan … apparently he had a team of advisors select the very hottest of hotties to participate in his daily sexual escapades…

              I suppose he thought of himself as a god as well…

              The wrench in the works of all this is that true gods are surely immortal … their kingdoms are forever…

              The El—-ders are not forever…. the earth is not forever….

  16. Ert says:

    G. Shilling still bets on 10$ oil in the near future:

    World economy / China slowing and Iran pushing for more exports are only two reasons he lists. The next years will be interesting indeed. Oil going again below 30$ would really wreck havoc. If prices would go to 10$ it would be devastating.. not only for the produces, but for the exporting countries and fate future supply, too.

    • Rodster says:

      You know it’s bad when Saudi Arabia and Russia are looking to sell off their oil companies. Not even all the instability around the world including the Brexit and the Venezuelan collapse have done much to push the price of oil higher.

      • Stilgar Wilcox says:

        ERT, don’t think oil price will go down to $10, because the price momentum has been going up from a low of about 28 to 50. Brexit caused oil to drop about 3 bucks, but has regained what was lost just like stock markets bouncing back. Guaranteed, given time with less exploration, oil price will rise into the $60-80 dollar a barrel range (my pre-thanksgiving 2015 prediction) in the latter half of this year, 2016. Well, we’re in the latter half now, so all it needs to do is go up about $10 bucks.

        • Stilgar Wilcox says:

          Brent just went above $50 a barrel.

        • Ert says:


          Don’t see $10 realistically myself and for sure not in 2016. But if the world-economy would deteriorate in 2017/18 we may see lows below $30 for (short) periods again.

          But as long as we see rising automobile & SUV sales in China & the US everything is BAU…

          • Stilgar Wilcox says:

            “But if the world-economy would deteriorate in 2017/18 we may see lows below $30 for (short) periods again.”

            True enough, Ert. Any kind of financial dislocation/recession and price will drop.

            For now though, the curiosity is to find out at what threshold does the limit of consumer affordability act as a brake against rising price? We’re in a time period now when it’s interesting to see what happens to producers when price drops below costs to produce or what happens to the economy when price rises above consumer affordability. That’s the dance of peak oil.

            • I don’t think that there is any price that works. We need prices of $100+ (probably $120 +) for the producers. Producers are temporarily getting a “good deal” from contractors, but this good deal will quickly disappear, as prices go up. Also, governments of oil exporters need $100+ oil.

              Consumers really need oil prices below $50 per barrel. There are some countries that can get along with $50 per barrel oil, but Japan cannot, for example.
              Japan's energy consumption by fuel

              Note that Japan’s oil consumption continued to drop in 201, despite the low prices. In fact, Japan’s oil consumption began to drop in 1997. Its consumption was practically flat in 1995 and 1996. BP puts the inflation adjusted price of oil at that time period at about $30 per barrel (1995-$26.46; 1996 – $31.22; 1997 – $28.19). I expect that there are island nations around the world that cannot withstand more than $30 per barrel oil. If Japan collapses, that would be at least as big a problem as Brexit.

      • I agree!

  17. Vince the Prince says:

    For the Koombya crowd that looks worthwhile to read and sign up for

    Interested in rebuilding the household economy? David Holmgren’s upcoming book RetroSuburbia highlights the ongoing and incremental changes we can make to our built, biological and behavioural landscapes.

    Focused on his home territory; Melbourne, Victorian regional towns and more generally southern Australia, the suburban retrofit concepts have national and global application. Due for publication late 2016.

    If you haven’t read David Holmgren’s new essay ‘A History from the Future’ you can download the eBook for free when you join the mail list on RetroSuburbia

  18. psile says:

    Germany Runs Up Against Limits of Renewables

    Even with lots of wind/solar power, it’s carbon emissions are still rising.

    • Fast Eddy says:

      And still these Green Donkeys don’t give up …. they are like religious fanatics…

      They can see that ‘renewable’ energy cannot generate power round the clock — which means they MUST continue to operate coal-fired plants — which drives electricity costs through the roof….

      That there is no way around that ….

      They conveniently forget that solar panels do no grow on trees — massive amounts of coal are burned in manufacturing them…

      Yet they pound the idiot drum louder and louder and louder…

      I need to reconsider the statement above — perhaps they cannot see…. perhaps they are really just that stupid….

      Which would mean that Idiocracy has arrived! It is the final stage in the ‘evolution’ of humans — before extinction

      • Stefeun says:

        As for “idiocracy as the last stage”, that’s very possible, actually.
        F.Roddier says that the worst the situation, the more people stick to their own opinion and don’t want to hear about others’. Of course, this can only worsen the overall malaise and lead to collapse.
        I should be back soon with more details about that (have to dig a bit into theory first).

  19. psile says:

    Venezuelans storming supermarkets, attacking trucks as food supplies dwindle

    The fight for food has begun in Venezuela. On any day, in cities across this increasingly desperate nation, crowds form to sack supermarkets. Protesters take to the streets to decry the skyrocketing prices and dwindling supplies of basic goods. The wealthy improvise, some shopping online for food that arrives from Miami. Middle-class families make do with less: coffee without milk, sardines instead of beef, two daily meals instead of three. The poor are stripping mangoes off the trees and struggling to survive.

    There is no crisis says the government…lol

  20. Yoshua says:

    The Middle East and North Africa are collapsing due to over-population fueled by oil wealth.
    Today the oil production has collapsed due to depletion in Syria, Yemen, Egypt and Tunisia. The Arab Spring was about poverty and hunger. Syria and Yemen has been ripped apart by civil war. Egypt might have been saved by the Nile and natural gas. Tunisia is on the verge of collapse.

    On top of this the west went in and destroyed Afghanistan, Iraq and Libya.

    Great Britain decided to close its borders. The price was the loss of the European market.
    Germany is dependent on the European market and can therefor not close its borders.

    Millions more migrants are coming. Some 30 million people in the region are starving today.
    Soon the larger oil producers in the region start to face bankruptcy due to rising production costs and falling oil prices due to global economic recession since the easy oil is gone.

    • Rodster says:

      People think it’s all about who has the worlds reserve currency or whether it’s back by gold. It’s really all about who has the resources and when you look all around the world they are in sharp decline due to mankind squandering them. Water is the most precious resource besides air and China has destroyed 80% of its drinking water from industrialization.

  21. Vince the Prince says:

    Shortonoil at the website Peak oil expressed it best

    Shortonoil on Tue, 28th Jun 2016 8:36 am

    “Considering the weapons development that has occurred over the last century, and the fact that deteriorating economic conditions often result in war, the end for humanity is much more likely to come about from direct human action than climate change.
    A mushroom cloud over Houston is going to have much more immediate impact than a flood, or unusual heat wave. The degradation of the world’s fossil fuel resources are leading to a high probably that humans will engage in one last battle. Concern over global warming will be incidental after we have converted the planet into a smoking ruin!”

    And a follow up reply by a Dustin Hoffman quoting Admiral Rickover

    “AD RICKOVER: Well I think we’ll probably destroy ourselves. So what difference will it make? Some new species will come up that might be wiser than we are. I do not believe in divine intercession. In the eyes of the Lord, we are not the most important thing in the universe”

    So why worry about prepping, global warming, overpopulation, ect?

    • Rodster says:

      Wasn’t it Albert Einstein who coined the phrase “I know not with what weapons World War III will be fought but WW IV will be fought with sticks and stones”.

    • Tim Groves says:

      I don’t want to ruin anyone’s breakfast, but It’s even worse than we thought.

      One modest nuke detonated 30 miles up over the center or the east of the continental US could create an EMP that would kill 9 out of 10 Americans within a year.

      Testimony of Dr. Peter Vincent Pry at the U.S. House of Representatives Serial No. 114-42 on May 13, 2015. The EMP Threat: the state of preparedness against the threat of an electromagnetic pulse (EMP) event. House of Representatives. 94 pages.

      “The EMP Commission estimates that a nationwide blackout lasting one year could kill up to 9 of 10 Americans through starvation, disease, and societal collapse”

      A natural electromagnetic pulse (EMP) from a geomagnetic super-storm, like the 1859 Carrington Event or 1921 Railroad Storm, or nuclear EMP attack could cause a year-long blackout, and collapse all the other critical infrastructures–communications, transportation, banking and finance, food and water–necessary to sustain modern society and the lives of 310 million Americans.

      Seven days after the commencement of blackout, emergency generators at nuclear reactors would run out of fuel. The reactors and nuclear fuel rods in cooling ponds would meltdown and catch fire, as happened in the nuclear disaster at Fukushima, Japan. The 104 U.S. nuclear reactors, located mostly among the populous eastern half of the United States, could cover vast swaths of the nation with dangerous plumes of radioactivity (see Richard Stone’s May 24, 2016 Science article: “Spent fuel fire on U.S. soil could dwarf impact of Fukushima” ).

      Nuclear EMP is like super-lightning. The electromagnetic shockwave unique to nuclear weapons, called E1 EMP, travels at the speed of light, potentially injecting into electrical systems thousands of volts in a nanosecond–literally a million times faster than lightning, and much more powerful. Russian open source military writings describe their Super-EMP Warhead as generating 200,000 volts/meter, which means that the target receives 200,000 volts for every meter of its length. So, for example, if the cord on a PC is two meters long, it receives 400,000 volts. An automobile 4 meters long could receive 800,000 volts (unless it is parked underground).

      No other threat can cause such broad and deep damage to all the critical infrastructures as a nuclear EMP attack. A nuclear EMP attack would collapse the electric grid, blackout and directly damage transportation systems, industry and manufacturing, satellite navigation, telecommunications systems and computers, banking and finance, and the infrastructures for food and water. Jetliners carry about 500,000 passengers on over 1,000 aircraft in the skies over the U.S. at any given moment. Many, most or virtually all of these would crash, depending upon the strength of the EMP field.

      Cars, trucks, trains and traffic control systems would be damaged. In the best case, even if only a few percent of ground transportation vehicles are rendered inoperable, massive traffic jams would result. In the worst case, virtually all vehicles of all kinds would be rendered inoperable. In any case, all vehicles would stop operating when they run out of gasoline. The blackout would render gas stations inoperable and paralyze the infrastructure for synthesizing and delivering petroleum products and fuels of all kinds.

      Industry and manufacturing would be paralyzed by collapse of the electric grid. Damage to SCADAS and safety control systems would likely result in widespread industrial accidents, including gas line explosions, chemical spills, fires at refineries and chemical plants producing toxic clouds.

      Cell phones, personal computers, the internet, and the modern electronic economy that supports personal and big business cash, credit, debit, stock market and other transactions and record keeping would cease operations. The Congressional EMP Commission warns that society could revert to a barter economy.

      Worst of all, about 72 hours after the commencement of blackout, when emergency generators at the big regional food warehouses cease to operate, the nation’s food supply will begin to spoil. Supermarkets are resupplied by these large regional food warehouses that are, in effect, the national larder, collectively having enough food to sustain the lives of 310 million Americans for about one month, at normal rates of consumption. The Congressional EMP Commission warns that as a consequence of the collapse of the electric grid and other critical infrastructures, “It is possible for the functional outages to become mutually reinforcing until at some point the degradation of infrastructure could have irreversible effects on the country’s ability to support its population.”

  22. psile says:

    MERKEL’S WORST NIGHTMARE: Germany calls for Referendum as ‘people want to be free of EU

    BELEAGUERED Angela Merkel is facing calls for a referendum to free German people of “EU slavery” in the wake of Britain’s sensational decision to cut ties with Brussels.

    Far right figures in Alternative for Germany have promised to call their own vote if they clutch power in country’s general election in autumn next year.

    A party spokesman branded Brussels a “bureaucracy monster”, before adding: “Next year the AfD will enter the German parliament and Dexit will be top on our agenda”.

    They called the vote a Dexit as it stands for a Deutschland exit from the EU.

  23. Fast Eddy says:

    More from Nigel… damp rag!!!

  24. Fast Eddy says:

    Very very cool!

    Here we have geniuses buying up debt of as many insolvent chinese companies as possible — debt that nobody will touch — and big bucks are to be made….

    Then you bank on the fact that the PBOC will not allow defaults – they will bail these suckers out….

    And if the PBOC loses control of the situation and it explodes in your face — SO WHAT! — the entire global economy explodes too!!!

    This is absolutely brilliant reasoning. These guys deserve the Nobel prize for Economics…. but that is not enough … let’s give them the prize for peace and literature and physics and math …. throw in a Pulitzer …. and make the one fellow President of the USA….

    The world is not enough!

  25. Fast Eddy says:

    Shall we watch Nigel Farage rub hot chili peppers into the eyeballs of the EU dictators … slitting them open and slathering on salt…

    Yes – why not…

  26. Fast Eddy says:

    Let’s play a game — I call the game Connect the Dots:

    Erdogan apologizes to Putin over death of Russian pilot, calls Russia ‘friend & strategic partner’

    Istanbul Ataturk airport attack: At least 36 dead and dozens injured

    Operation Northwoods was a proposed false flag operation against the Cuban government, that originated within the Department of Defense (DoD) and the Joint Chiefs of Staff (JCS) of the United States government in 1962. The proposals called for the Central Intelligence Agency (CIA) or other U.S. government operatives to commit acts of terrorism against American civilians and military targets, blaming it on the Cuban government, and using it to justify a war against Cuba. The proposals were rejected by the Kennedy administration.[2]

    Operation Gladio (Italian: Operazione Gladio) is the codename for a clandestine North Atlantic Treaty Organisation (NATO) “stay-behind” operation in Italy during the Cold War. Its purpose was to prepare for, and implement, armed resistance in the event of a Warsaw Pact invasion and conquest. Although Gladio specifically refers to the Italian branch of the NATO stay-behind organizations, “Operation Gladio” is used as an informal name for all of them. The name Gladio is the Italian form of gladius, a type of Roman shortsword. Stay-behind operations were prepared in many NATO member countries, and some neutral countries.[1]

    The role of the Central Intelligence Agency (CIA) in Gladio and the extent of its activities during the Cold War era, and any relationship to terrorist attacks perpetrated in Italy during the “Years of Lead” (late 1960s to early 1980s) is the subject of debate. Switzerland and Belgium have had parliamentary inquiries into the matter.[2]

  27. Yoshua says:

    Cameron made it clear in a speech that U.K doesn’t want to be part of a European State.
    Poland has been an ally to U.K in reigning in Germany. So it was perhaps no surprize that Poland leaked the document in which Germany now tries to push for a European State now that U.K is out.

    Cameron has now decided not to sign article 50. This is making Germany furious and causing uncertainties on the markets and division among European nations about Europe’s future.

    U.K has perhaps only one option left now after the vote and that is to bring down the European Union or be left out side of a European State and its market.

    The U.S has also been depending on U.K to control Europe and has now lost that control.

    There is one thing that the U.S would go to war over to stop and that is a Eurasian Union. A political, economic and military union between Europe and Russia.

    • Stilgar Wilcox says:

      European state, eh? Up the ante from EU as the UK falls away. There are a few really strong countries in the EU and to lose one of those, the UK, is a big blow to the EU whether the remaining powers to be are willing to publically acknowledge that or not.

      • Yoshua says:

        It’s almost like the resurrection of the Third Reich. Funny that the Hitlermobile (Volks Wagen) is under attack in the U.S at this same time.

    • Yep, the stall and delay tactics on the trigger point of invoking actual exit procedures is brilliant, give it few more weeks and months, and the continental eurogroupies will be beyond steam hot furious, hah. Good stuff!

  28. dolph911 says:

    I see the comments coming fast and furious.
    Let me remind you once again in relation to the food issue…you don’t need to feed somebody “forever”. There is no forever for the individual human being. You just need to feed him or her in infancy, childhood, and enough of adulthood to get some useful work done. In America, for the time being, this is still easily done with industrially processed foodstuffs which contain just the right amount of nutrients to keep the body going. I’m not saying this is the same everywhere.

    So what is likely to happen is not widespread starvation (at least not initially). What is likely to happen is increased mortality from any number of diseases, particularly among already fragile individuals in their 60s and up. So, failure of the healthcare system first, because of cost overrun. Later comes the starvation.

  29. MG says:

    The volunteering is another lie of our era of hitting the limits of the finite world. It is another name for slavery, too. We can say that all the useless university education of those who never get the appropriate job is the slavery, too. Many people die simply because of exhaustion: they are sucked out of the energy by the shrinking system.

    The system looks o.k. thanks to to fact that it purposefuly hides the truth about the real fate of the human race – i.e. the extinction.

    • dolph911 says:

      “Voluntary slavery” is a good way to describe our system. And it works!

      • MG says:

        Yes, it can function for a while, as long as there are means to support it, i.e. health care, food production, clothes, shelter can be subsidized.

        It worked in the past:

        But it will not work when the current system collapses.

        The reason for many psychological disorders of today is the hitting the limits of the finite world, when billions of individuals “fall overboard” of the system that is shrinking.

        • I can believe that people who otherwise would be homeless and without enough food would sell themselves into slavery. It would be sort of like a low-paying job.

          • doomphd says:

            Karl Marx apparently said “One of the best ways to keep a slave happy, is to convince him that he is an employee.” Presently unable to find the exact quote.

          • MG says:

            When the Bible uses the same word for servant and slave, than, in fact we do not have the service economy, but the slave economy. It is logical that the energy rich industrial era is followed by an era that suffers from energy deficits – i.e. the economy needs slaves/servants.

    • Stefeun says:

      Or ‘inverted totalitarianism’. This is a system to transform citizens with rights into consumers with needs.

      • MG says:

        The more and more aggresive marketing is the means to support the sale of more and more useless things…

        • Stefeun says:

          Yes MG,
          But that’s what holds the system together.
          It doesn’t really matter wether the output of production is “useful” or not ; what matters is the total volume of production, which must continually -and exponentialy- increase, or the whole Ponzi-pyramid falls apart; what we’re witnessing today.

          • Exactly! The total volume of production is what is important. That is why we have governments building bridges to nowhere, and very fancy roads that are expected to service only a few people. Also, medical techniques that no one can pay for, and academic degrees that don’t contribute to the ability to get a job that pays well.

        • Stefeun says:

          Feasta’s Brian Davey recently posted a good article about excessive marketing etc (also cross-posted by RE on Doomstead Diner)

          “This chapter about the power elite on display and the economics of Thorsten Veblen covers topics like conspicuous consumption and the consumer society, branding and the manufacture of wants. The role of advertisers is explored as well as the way that attention grabbing has become an economic sector that affects the quality of life radically and for the worse.”

          • MG says:

            Dear Stefeun,

            yes, let’s try to imagine the world without the marketing. Just numbers and scientific names of the ingredients in black letters and numbers on white paper. Only a small minority of the people could understand it.

            The pictures make the difference: the bigger they are, the less important is the text. The more they are unclear, the more attention and curiousness they attract. That is why the tabloid press LIKES the blurred, unclear pictures.

            The letters come from pictures (e.g. Japanese), or, even more distantly, represent only the historical sounds (e.g. English).

  30. Fast Eddy says:

    The death of the middle class…. the concentration of wealth among the relatively few…

    Reversion to the past …. as the fossil pie shrinks what is left ends up in the hands of the increasingly few… a small number of kings and aristocrats … the billions of peasants….

    But since there is no going back… the increasingly few become the none…. and everyone is at some point fighting over a few cans of beans….

  31. Fast Eddy says:

    Brexit Anthem:

  32. Fast Eddy says:

    Did I not read the other day that Erdogan Fedexed and olive branch to Putin…. I am sure I did…

    Aha – I am not delusional… it really did happen….

    The timing of this is impeccable

    Now if I were a CIA agent…. and I had a sense of humour…. I would ask the NSA to anonymously send this to Erdogan’s private email this morning … with a big happy face 🙂

    • Fast Eddy says:

      Indeed excellent…. however I’d suggest he should have stopped after delivering the punchline:

      As I said, it is a question of diminishing energy returns. We call this the “Limits to Growth.”

    • Ugo’s summary is very good. Thanks!

  33. Stefeun says:

    New post by Jacopo Simonetta, on Ugo Bardi’s blog:
    Social Equity and the Destruction of the Planet

    Note by Ugo:
    “In this post, Jacopo Simonetta asks a fundamental (and politically incorrect) question: are we sure that social equality would be good for the environment? The answer turns out to be not politically very correct. (U.B.)”

    Note by the Saker Francophone (who translated the post into French (not me) ; I made slight corrections on the auto-translation of the note into English):
    ” This analysis can be considered as neo-Malthusian or simply realistic, but that’s where Ugo’s site deserves its name of Cassandra . Both for CO2, and I doubt even more that it’s our friends sociopaths who are promoting it, as much for the distribution of wealth, we can not say better. If you read the last post by Gail Tverberg , she explains that without an increase in middle-class wages to consume, the financial system will collapse and with it, our ability to extract additional fossil resources. A negative feedback loop is put in place, with the corollary of the sharp drop in population, especially where populations have defied nature, Saudi Arabia, Las Vegas, Canada, etc …

    The few countries that seem able to escape this phenomenon, mastering the basic infrastructure and production line having a geographical depth where to spread in times of hardship, are Russia and Brazil, each with weaknesses but they have margins. If we take into account another factor is political stability, there is only Russia, where probably the pressure it is currently undergoing. If one puts forward an ability of the state to keep its population, including violently, it could be that China could also resist. In the West, especially in old Europe, cities were built in strategic locations in ancient times when energy was counted, and that may be what will save us.

    For Russia, our friend Dmitry Orlov has just published a book that explains the trajectory of collapse of the USSR and the USA. I bet that Russia, having gained experience in the field, is ready.

    There is also another scenario that would alleviate the impossibility of raising the wage level and therefore consumption: to increase the cultural level. But we do not really take that way.”

    • Throughout ages there were several highlight points at which it was very advantageous for a westerner to relocate into Russia, in few generations they usually settled at the top of the society as native organic element. There is good Swiss TV docu on ytube about a Swiss small scale farmer (not particularly young) moving to Russia, from a dozen hectares of haphazardly scattered plots in CH to thousands hectares at one place, while still maintaining down to earth attitudes, rising kids and family..

  34. Yoshua says:

    New EU ‘superstate plan’ by France, Germany: report,New-%e2%80%98EU-superstate-plan%e2%80%99-causes-alarm

    The document in which the proposals appear is to be presented to Visegrad Group countries meeting in Prague on Monday by German Foreign Minister Frank-Walter Steinmeier, TVP Info said, adding that the document was an “ultimatum”.

    • The sad reality is that the “Visegrad Group’s” most likely won’t take this great opportunity of momentous instability and push for some favorable reforms or at least scoring points on the opposing turf, meaning by forming closely cooperating inner “V4 block of countries”. For one thing, their weak elites are very much compromised in multitude of past “incoming EU money” laundering schemes and scandals, so it’s a children’s play for Germany to twist arms and club their heads into submission again, as numerous time before that throughout history.. in short even very stupid German ruler knows how to deal with his colonies..

      Also, there is clear distinctive difference among these countries, for instance Hungary is basically Russian capital enclave, while the Poles are paranoid about Russia. And Czechs have been for thousand years oscillating between status of another German quasi state and “independence seeking” western Slavic brand enclave aspirations.
      Lastly, Slovakia is just enjoying the role of being host for industrial overcapacity foreign investment boom (good workers for pocket change salaries), while it lasts, so they won’t rock the boat.

      So, it will be long and nasty process of EU core trying to forge integrated superstate at all costs and more or less unsuccessful semi/periphery attempts seeking ways out in very timid ways. As always the scope and length of these events will be decided only on the slopes of depletion curves and demographics, which we can only speculate about the former. I’ll just repeat my estimate there is likely enough resources to play these games perhaps into 2025-2040.

      • Yoshua says:

        This is the final conclusion of the European project. This is what they have been dreaming of: A European State. Everybody is now addicted to the European market. If the European Union collapses now, then everybody’s economy would crash with it.

        I believe that this is also what U.K in the end rejected and voted against.

  35. Yoshua says:

    In Case of Emergency

    The U.S has the Patriotic Act, Fema camps and police armed to the teeth.
    Russia is ruled by the KGB and has their Terrorist Laws.
    Communist China just brings the tanks out into the streets, normal procedure.

    Europe is ruled by the European Court of Human Rights. Say what ?

    Russia started a war and shoot down one of our passenger jets.
    We called Putin a naughty man and slapped him with sanctions.

    Terrorists massacred us in Paris.
    Our politicians took to the streets and walked hand in hand in solidarity.

    Hallo ! No, there is no one at home.

    The room was filled with smoke. The Britons saw the exit sign and started to run !

    Fascists and communists are fighting in the streets, strikes, riots, hooliganism and burning tires.
    Well… at least they get some exercise.

    • Fast Eddy says:

      And we thought cornered rats were vicious….

      • Yoshua says:

        Every action has an equal opposite reaction. Newton

        Europe is a Humanitarian Super Power today.
        Lets see what kind of a monsters we will turn in to tomorrow.

    • psile says:

      Russia started a what? Exactly?

      • Stefeun says:

        Yoshua might want to read D.Orlov or P.C.Roberts or..? for a slight opening of the blinders.

      • Stefeun says:

        Or the Saker !
        Note there’s an interview of V. Putin:

        • Yoshua says:

          I have read Orlov, PCR and the Saker.

          Russian troops are in Ukraine.
          Russia said that Ukraine was a red line… and held their word.

          • Fast Eddy says:

            Ukraine is essentially Russian — they have maintained a huge naval base in the Crimea for centuries so it is no surprise that Russia has troops in Ukraine – they always have with the permission of the Ukraine govt — also half the country voted in a referendum to join Russia – as expected since they are essentially Russians….,_2014

            Now do I support the CIA who are trying install a pro US puppet in the country — even it if means siding with skin head thugs?

            I really don’t care about the right and wrong … because there is not right or wrong

            There are only interests — and my interests line up with those of the US

            • Yoshua says:

              America doesn’t have permanent friends or enemies… only interests. Kissinger

            • Fast Eddy says:

              I used to think Kissinger was the devil…. and if he had met me back then …. he would have probably asked if my favourite song was Koombaya….

            • Yoshua says:


            • doomphd says:

              After his stint as Sec of State under Nixon and Ford, Henry K. got an honorary position at Princeton U. He made this observation about academic politics: “academic politics are particularly vicious, because the stakes are so low.”

  36. Stilgar Wilcox says:

    First was Brexit yes vote, the Dow dumped 900 pts. in two days of trading, then an 80 Billion Euro bail out of British banks, and now according to the above article a 40 billion dollar bailout of Italian banks. Anybody getting nervous? What’s the next shoe to fall?

    • Fast Eddy says:

      Build up the Fear Factor — then use that to introduce the sheeple to the Next Big Can Kick?

      Speaking of this tee vee show…. I saw it once… I think the people were eating bugs… or ramming their heads into a bucket of bugs… the winner got something like 10 grand…

      I remember thinking… how far would people go for munny….. what if the bucket was filled with a mixture of vomit and human faeces?

      Or how about asking someone to cut a finger off?

      Fighting lions? Fighting each other to the death? Jousting with real spears?

      Would it just be a matter of the amount of price money made available?

      • Stilgar Wilcox says:

        Yes, enough money would seal the deal. They could have a program called,
        “Life & 5 million or death & shame.” Take a deserted island and set up two teams of 8-10 people to fight it out to the death. Once one team has been eliminated the survivors of the remaining team all get 5 million each. How many people barely scraping by would seize that opportunity? They’d be lined up around the block and down the street.

        Qualifications: Desperate for money, healthy and fit, psychotic and relentless.

        There could even be PCP day. “All right folks it’s been very measured so far, but today each contestant will get a double dose of PCP to insure all players achieve psychotic behavior. May the most blood thirsty, greedy team win!”

      • The one challenge no one was anywhere close to winning, was escaping from being handcuffed inside a plastic bag inside a swimming pool. Everyone panics and gives up in seconds.

        • Fast Eddy says:

          I only saw part of that one episode… it reminded me of why I don’t own a teevee….

    • ejhr2015 says:

      in the EU, the central banking authority is not permitted to bail out any member nation’s debts. This was a neo-liberal policy designed to punish the southern states, those near the Mediterranean sea.
      So only loans are allowed. Such loans as we have seen for Greece impoverish the state and barter away the nation’s wealth. It’s like internal colonialism, an asset stripping practice.
      Another ground for the EU failing. It was never equitable.

  37. Vince the Prince says:

    Maybe we should follow the advice presented in this movie scene regarding this Britex matter.
    The car representing Great Britain.

    See…all is good.

    • Stilgar Wilcox says:

      Truly one of the best movies ever. I like it when those two frat guys are playing golf. One hits the ball but it doesn’t go where he wanted it to. The other guy explains a better way of hitting the ball – it hits a horses’ ass and causes bedlam. “Ya see you just have to have good follow through.” Well, that’s what the Brits had, good follow through with the Brexit vote setting off bedlam.

  38. psile says:

    “the E.U. is a fascist, racist organization, a pro-war alliance and a massive corporate lobby. The EU’s own propaganda spells out its xenophobic worldview very clearly. The following advert from 2012 shows a white woman dressed similarly to the violent protagonist in Tarantino’s movie, Kill Bill, walking into a deserted warehouse where she is threatened by 3 insulting stereotypes: an Asian martial arts expert, a sword-yielding, flying man in a turban, and a half-naked black man threatening her with his capoeira moves. She replicates herself all around them so they are surrounded by 12 of her, thus ‘civilising the violent barbarians’ who then sit down to negotiate before they disappear, encircled by the 12 stars of the European Union (watch it here if you don’t believe me:”


    • Stefeun says:

      Thanks Psile, interesting reading.

      Another excerpt: “I couldn’t sleep on the night of the vote. As I don’t usually follow mainstream media, I was very sceptical. I didn’t expect victory against the monumental force of moneyed interests: one after the other, we had the entirety of the political establishment (Barrack Obama, Trade Unions, the Governor of the Bank of England, the IMF and a great many more) all speaking in unison: “If you don’t do what we want, there will be consequences”.”

      You can do it your own way
      If it’s done just how I say
      (Metallica, in Master of Puppets)

    • Pintada says:

      Dear psile;

      Thanks for that,

  39. This may seem off topic on the china/coal thing, but we cannot separate politics (especially the current loonytoon variety) from the looming energy crisis

    in 2011, in the run up to the 2012 election I wrote the following—(you’ll have to take my word for it)
    ——–“Now look ahead to 2016 or 2020. We’ve already seen whack-job candidates up for election as president, luckily they were laughed out of court. In 4 or 8 years time when the economy has really collapsed, some real godnuts will surface and voters will be ready to grasp at any form of insanity if it promises restoration of ‘the American Dream”.——-

    Now the exact same thing is being written today:

    • Fast Eddy says:

      There was another chap who was a joke — but then was taken very seriously when a certain economy went into the ditch….,_Beim_Einmarsch_deutscher_Truppen_in_Eger.jpg

      • he was pretty much who i had in mind

        • Stefeun says:

          If you look at almost any other despotic leader, from Napoléon to Benito to Sarzooky to Kim, etc..,
          they all present one or several hilarious traits, prone to mockery and caricature, which maybe helped them being accepted..?

      • Christian says:

        Hey, Adolph did had a vision, while Donald is just trying to get a piece of the cake…

        Reg. nukes, it’s remarkable that the SPF entry in wikipedia only exists in five languages

        • MM says:

          Donald Trump wants to become the biggest and most effective insider trader in the world

    • Stefeun says:

      you were right, and still are, but with a cartoonesque fragrance on top of it.

      One common thing I found among all current popular movements across the world, is that people, especially the older part, want things “back as they used to be” in a more or less distant past.

      This is a clearly irrealistic and romantic claim, as well as a mark of disdain towards the youngster crowd, in that it’s likely to render things even more difficult for them.

      Unfortunately, such a short-term vision has some success, at least in OECD, because the elder-class gathers bigger numbers.
      I used to know a grandma who used to say: “After me, the flies”.

      • Stilgar Wilcox says:

        “One common thing I found among all current popular movements across the world, is that people, especially the older part, want things “back as they used to be” in a more or less distant past.”

        Every ageing generation does the same thing – harken back to the old days. Somehow hardship gets romanticized after enough decades pass. The WWII generation parents didn’t understand us baby boomers anymore than the baby boomers understand the millennials.

    • You are right. All are right. The same thing is happening in many places. Any candidate who can promise a better tomorrow gets votes.

    • Christian says:

      Does Trump use the words Growth, Developpment and Recovery? I think his slogan “make America great again” is not exactly this

      Perhaps he learned somewhat from Putin, who seems not to use those concepts. He’s doing badly in recent polls anyway

  40. while we’re all in a brexit frenzy—this makes interesting reading

    you need to click on the copy to magnify it

  41. Pingback: China: Is peak coal part of its problem? - Deflation Market

  42. Veggie says:

    “ECB Blows €400bn on “Brexit Black Friday” Bank Bailouts”

    So…that was their Lehman moment !
    Instead of waiting for panic among the Banks, they did a pre-emptive strike and bailed out the banks early. Seems they learned something from the 2008 debacle.
    They also created an instant devaluation of the Euro…..but that’s better than an economic collapse and a banking system freeze-up.
    So how will the banks pay back this bailout when economic growth is not int he cards.?

  43. Vince the Prince says:

    Thought for the day by someone posting on Facebook

    “The West African Black Rhino has officially been declared extinct.. Thats right, somehow we managed to kill them all.. There isn’t even any in captivity.. How do we always manage to fck sht up so badly.. Humans are the most putrid disgusting creatures ever to walk the earth.. Religion.. Politics.. Greed.. We consume and destroy everything.. The only hope nature has, is to somehow make humans extinct.. Destroy us, before we destroy her.. Sorry for the doom and gloom.. But this sht makes me sad.”

    • Tango Oscar says:

      All megafauna are going extinct so this really shouldn’t surprise anyone.

    • Artleads says:

      This is an issue I considered among the top three….African megafauna extinction. Glad somebody is taking note. And I would blame it less on human nature than on money and capitalism. Beyond that, to civilization itself. Of course how anything comes to pass is a mystery beyond me. One thing I know for certain is that I have no need to possess rhino horn or elephant tusks. And damn anyone to hell who tries to convince me that I do.

    • Yoshua says:

      General Petr Pavel, chairman of the NATO Military Committee:

      “It is not the aim of NATO to create a military barrier against broad-scale Russian aggression, because such aggression is not on the agenda and no intelligence assessment suggests such a thing.”

    • Yoshua says:

      NATO Commanders Gen. Craig Breedlove and Gen. Curtis Scaparroti, NATO General Secretary Jens Stoltenberg, and President Obama have claimed that threatened “Russian aggression against the Baltic States and Poland” justified escalating with massive exercises to the borders of Russia and otherwise generating a situation which could break into war between nuclear superpowers. Stoltenberg today inaugurated yet a fifth simultaneous exercise, “Dynamic Mongoose,” a Norwegian Sea/North Sea exercise against Russian submarines based near there.

      Since June 15 Der Spiegel in Germany and then Foreign Minister Steinmeier have warned the exercises were going too far, risking a rapid mutual escalation to war for an “aggression” threat which did not exist.

      • Vince the Prince says:

        Of course we will see military action now that the world resource pie is shrinking as those that grab for a piece gets more desperate….
        Scene from the Pentagons “War Room”….

        There is opportunity in keeping the arm forces in the news….need to maintain funding for the military national budget. Having 80% of the fire power in the world is certainly not enough. (Sarcasm)

      • Christian says:

        Two possibilities:

        1- Exercises are just a show for the masses (both sides)

        2- There really are plans for (conventional) war. Not sure what for, given war harms the economy (a shift towards command economy?) and, which is very important, in the present context you can’t replace the weapons you loose. But we hadn’t much wars here and I’m not sure how this works

      • Stilgar Wilcox says:

        Saber rattling. It’s an old game played often and over many years to enforce boundaries.

  44. Tim Groves says:

    Peak Oil in Asia and oil import trends (part 2)

    This contains more colorful charts that show current trends and extend them into the future using BP’s data.

    Asia’s consumption of oil has doubled since 1993, rising much faster than the region’s production, resulting in a growing “gap” that is currently sucking into the region over a quarter of world production.

    The figures for 2015 are:
    Production 8.3 mbpd
    Consumption 32.4 mbpd
    Gap 24.1 mbpd

    The projections show that if current trends continue, competition between nations and regions for Middle East oil will intensify substantially over the next decade. One underlying assumption is that the economic system doesn’t collapse in the meantime, which I’m sure most readers here and the modelers themselves would consider wildly optimistic.

    • It doesn’t quite work that way. There will be more and more who are dropping out of the system. Greece, Venezuela, jobless of China, jobless of many other countries. Their consumption will drop. Consumption will also drop of countries who are now oil exporters.

      Oil prices may spike up and down, but I don’t think that they will rise long enough to get investment in production to rise up again to past levels and beyond–this would take a lot of debt. Instead, I expect that financial problems will start hitting demand in many more countries–Italy, perhaps China, Spain, Japan. These financial problems will eventually cause the system to fail, but it may take some time. The financial problems will eventually cause the system to fail, IMO

      These dropou

      • Tim Groves says:

        Gail, I share your opinion that the system will fail and I think it will happen through a combination of declining consumer demand, lack of financial “lubrication” and excessive debt, all of which are interrelated. Although I lack your depth of knowledge and grasp of the overall situation, your scenario looks scarily plausible to me.

        The only sliver of hope I hold onto is that there may be some alternative cheap-to-produce and convenient-to-use energy sources that are ready to roll out, because, as you are always telling us, cheap-to-produce energy is the lifeblood of the system. But realistically, if such sources were available to us, they would need to be rolling right now, before the world starts plunging down Ugo’s Seneca cliff. So I would have to bet against it.

        Meanwhile the UN and its agencies, national governments and much of the mass media are constantly alerting the public to a range of what they see as clear and present dangers, in line with Mencken’s of-quoted observation that “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” However, regarding the clearest and most serious danger of all—total economic collapse—these organizations remain eerily silent.

        From this we can speculate that, like the pilots of an airplane in trouble, they have decided there is no point panicking the passengers when there’s nothing the passengers can do to help and that any advance panic would in any case be counterproductive.

        • new, cheap-to-produce energy sources constitute wish science.

          we are perhaps all guilty of that, some more than others.

          cheap energy has sustained us for a century or so—that is now at an end.

          here in the uk, we are staring into the abyss, brexit has only hastened things along
          the uk energy policy is bau at any price.

          right now, the uk imports about a third of its food, the other two thirds entirely dependent on oil/gas input.

          forget organic, that’s miniscul and irrelevant.

          as oil availability drains away, the uk will begin to starve, because there will be no surplus food anywhere to donate to us.

          when that kicks in, the uk population will coalesce into ethnic groups for survival.

          readers here can use their imaginations to visualise what happens next.

          No schadenfreuder please—it will happen to all oil dependent industrialsed nations, while politicos are in a state of denial that it is happening

        • “From this we can speculate that, like the pilots of an airplane in trouble, they have decided there is no point panicking the passengers when there’s nothing the passengers can do to help and that any advance panic would in any case be counterproductive.”

          I think that this is the issue. Smart folks would have figured out that there is a problem when interest rates are turning negative and prices are below the cost of production for a fairly wide range of commodities.

          By the way, my talk today went pretty well today. I got extra time so I could give a longer talk than is usual at an academic conference. The session was well attended (quite a few more people than there were chairs). There was a fair amount of discussion afterward. I still need to attend sessions and moderate a panel tomorrow before I return home on Wednesday.

      • Stilgar Wilcox says:

        “There will be more and more who are dropping out of the system.”

        Yes, that’s it, Gail, and I think once another recession hits we will see a lot of people in the US drop out of the system at least to a much lower level of consumption than before, similar to what happened in 08. The reason is because as net energy declines rising expenses to keep BAU going get passed on to the consumer and with so many people stretched to the financial breaking point, a recession will knock many into bankruptcy.

        It is a whittling process of taking people down a road of incrementally lower standards of living, but also that process shifts the burden of keeping BAU going to those consumers remaining at a high level of consumption. But that game can only go on for so long.

        • Rural says:

          That depiction of collapse is important, and IMHO, the likely course of events. On a large scale, it is more of a downward ratcheting than a fast slide. On the scale of smaller geographic areas, the ratcheting is more stark. On a personal level, if one suddenly finds themselves out of work in an area that is already suffering from financial depression, ‘collapse’ is a fair descriptor, but the process takes decades on the macro level.

          Then again, if an event scared investors so badly that lending was cut off, as has been the case in the Canadian oil industry, things could move more quickly.

          • its not possible to ”drop out” of eating

            but things might come to that.

          • Merrifield says:

            FE, that’s pretty damn funny–in a sick way, of course.

          • Tim Groves says:

            The process of decline needn’t always be take place in comfortably small steps, and it needn’t take decades to occur. If enough downward ratcheting occurs, it could tip the process into a fast slide at any time. If we take the analogy of driving a car; we can cruise along at high speed and then slow down gently and come to a stop, or we can pile on the breaks and go into a skid, or we can crash into a wall, a tree or another vehicle. It’s called a crash because it involves a sudden stop due to colliding with an object massive enough to stop when moving at a speed fast enough to do damage. Economies can do that too.

            The IEA in 2014 were warning that with crude oil at US$80 per barrel, the price was too low to stimulate sufficient investment in finding and developing new oil resources. Much lower prices today have exacerbated that problem enormously. Prices remain low, demand remains sluggish, and new resources are not being developed. To me, this looks like a recipe for significant oil supply problems ahead, because maintaining current output levels without sufficient ongoing investment will not be possible. This potential future drop in supply can be thought of as an obstacle that the global economy risks crashing into if we don’t notice it looming ahead and take steps to avoid it.

            • I agree. Brexit may push the process along. There are likely to be other breaks as well, some of the caused by weather related problems, and some caused by other problems. I expecting bank failures in Europe are going to be part of the problem pretty soon.

            • Stefeun says:

              Tim, you say
              “This potential future drop in supply can be thought of as an obstacle that the global economy risks crashing into if we don’t notice it looming ahead and take steps to avoid it.”

              What kind of “steps” would you recommend?

            • Stefeun says:

              Additional question re. “steps”:
              What kind of goal do you think could be reached?

              And: what next? (steady state?)

            • Tim Groves says:

              Stefeun, I was afraid somebody was going to ask me that. I’m not very good at offering solutions. All in all, I’d prefer a sports question.

              My car analogy was not very accurate. The global economy is more like an airplane in flight. If it can’t maintain sufficient cruising speed, it will stall and crash. Some people think things are worse than that as in, it needs to continuously increase its cruising speed to stay aloft. But in any case, I can’t see any way of gliding it down to a soft landing. And yet finding a way to achieve some kind of half-powered, half-glided descent is what we have to try to do.

              I’m just an economy class passenger, not a qualified pilot. But if I was going to take the controls in an emergency, and I only had time to do three things: over the short and medium term, I’d try to raise the price paid to oil producers in order to stimulate more exploration and development. I’d stop the wars in the Middle East so that there was less chaos and loss of production there. And I’d stop the demonization of fossil fuels generally so that their use could be decided upon rationally without regard to future climate change considerations.

              Continued use of oil, coal and natural gas are vital to the world economy. We are going to have to wean ourselves off them because they are eventually going to become too expensive to obtain. But if we wean too fast we get into collapse territory very quickly.

              Now, could someone just show me which button to press to stop the wars in the Middle East? Or else explain why letting them fester is good for the world economy?

            • Fast Eddy says:

              This is where we are about now on the flight path…


              The mountain is dead ahead.

            • Fast Eddy says:

              ‘Now, could someone just show me which button to press to stop the wars in the Middle East? Or else explain why letting them fester is good for the world economy?’

              We can’t have that… we need to continue to divide and conquer and pillage their oil…. we need to create hatred between sects so that they are in constant turmoil so that they don’t join forces and determine who gets their oil and at what price…

              Remember what happened when those silly Arabs tried to actually run their own show in the 70’s? They had the temerity to actually use oil as a political tool!!!

              How dare they.

              That oil is OURS. It just happens to be under their lands…

              We need it badly.

              Therefore the wars must continue…. the terror must continue… the suffering must continue… families must be bombed… dissenters must be tortured and killed…

              Whatever it takes.

            • Stefeun says:

              I know, Tim,
              My question was cheeky.

              I think there’s no “solution” anyway, just a succession of punctuated equilibria.
              Moreover, given what we know about auto-adaptive complex systems, it’s impossible to anticipate. The sub-systems have to adapt (or die) depending on what’s available to them step by step.
              That said, a global view can still indicate the most probable direction of the next move. Given the multiple overshoots in which we actually are, what we can say is that the odds really are not with us.

            • Christian says:

              How to stop the wars in ME?

              1- Putin and the Fed should agree to build both pipelines from North Field/South Pars

              2- UN should acknowledge the division of former Irak in three different countries: Kurd, Chia and Sunni.

              3 – Ideologists should find a different alien monster to blame, not Russia/The West, or reinvent it in order to allow 1 & 2

              As far we can see, there is some reason they don’t do that

            • Fast Eddy says:

              There is a very good reason for that —- it’s a finite world — and every country is competing for a piece of the resource pie (call it meat)…. there is never enough to go around — and even if there were it is not in our nature to share — we want more — always more…. we want to stuff ourselves like pigs….

              So if we followed those suggestions all that would happen is that one of the other big dogs (China… Russia) would snatch that meat away from those we were trying to help by distributing the meat more equitably…

              The big dog that got more of the meat would grow bigger and stronger…. our dog (who fights our battles for meat so that we get to live large) would weaken and shrink…. and the other dogs would quickly set upon him taking all of his (our) meat….

              And we would be living like Somalians…

              For the life of me …. why was this not taught to me in Grade 6? How many decades was I singing that wretched Koombaya song … dancing around the campfire drinking GMO-free beer (although the fit hippy chicks were not so bad…)

              When I should have been tuning into

            • Christian says:

              Well it’s not Koombaya, but if we are looking to eat the least apple and we have a knife each one, you and me, would you find better to try to cut me or to cut the apple, so you’ll surely have something real to show to your people? We wouldnt be talking about brexit, not yet at least; better truly dividing Iraq, not Europe. But nope

              And the low hanging fruit is still there

            • Fast Eddy says:

              I don’t see any low hanging fruit:


              No producer is breaking even with oil at the current price….

            • Christian says:

              Of course, I mean fields that are not being produced: north field/south pars gas and central Iraq’s oil. Remember ISIS is selling oil very cheaply, because their costs are very low (but it’s illegal and a small amount, so it’s not in the charts)

              And btw, I don’t trust very much all those fiscal breakeven price studies. According to what I remember from 2013 studies many countries should already have disappeared. It’s not that the concept itself is wrong, but what could it mean that Lybia “needs” a 180 bareel? Bareel never went to 180, and some way or another Libya still exists

            • Fast Eddy says:

              Libya is however a failed state… Venezuela is nearly a failed state…

              But I do see your point — countries can adjust to a certain extent and keep functioning…. they can stop investing – as big oil is doing — and bring down their break even…

              However they do need a certain amount of revenue to operate – particularly when their main income is oil…

              Saudi Arabia is borrowing billions … it would seem that $50 oil doesn’t work for them…. so they fill the hole in their budget with bond sales.

              I can imagine quite a few oil producing countries are doing the same…

    • Stilgar Wilcox says:

      Wow, when I first saw that consumption number for China’s oil I thought there must be a mistake because I remember when it was so much lower (which it was not many years ago). But the chart in the article bears out that consumption level, which is going skyward into an absurd height and trajectory of increase. That’s completely unsustainable in the long haul. Talk about push a system to the breaking point without consideration for what may go wrong in the future. Why does everything have to be the mentality of pedal to the metal acceleration?

      • Stilgar Wilcox says:

        One quick microcosmic example of always pushing the outside of the envelope is our small community’s patrol cars; They use to be these boring looking cheap to run vehicles, they later justified replacing with Prius’ for fuel consumption advantage. Now they’ve gotten rid of those and did the whole expense thing over again with giant SUV’s that are all painted out with our community’s logo. Well, guess where that added expense gets transferred to – us the one’s paying the homeowner dues. I’m sure it won’t be long before they decide to replace the SUV’s with Tesla’s.

        • wratfink says:

          Yes, this is worrisome.

          Everyone believes their piece of the pie is sacred . Unfortunately, you can only tax the property owners so much before they default. Then, those giant SUVs you helped pay for will be parked in front of your house…putting you out into the street.

          I can see how government gets into problems funding these public pensions. The municipality where I formerly lived just had to raise the millage on property tax to fund the pension of ONE retired officer. He hasn’t worked there in years.

          Saw a Tesla patrol car on Jay Leno’s Garage teevee show the other day. With their torque and acceleration rate, they make an awesome pursuit vehicle for shorter distances.

          • Fast Eddy says:

            They would have plenty of time to recharge at the donut shops — between strangling and gunning down Americans just for the sheer joy of the power trip.

            I heard that Dunkin Donuts is adding charge stations at all outlets.

  45. Fast Eddy says:

    ECB Blows €400bn on “Brexit Black Friday” Bank Bailouts

    With bank stocks collapsing on Brexit Black Friday, the frazzled folks at the ECB decided it was high time to start bailing out the banks – and not dabble at the margins, but pull out the whatever-it-takes money-printing machine, and do so under the cover of Brexit chaos when no one was supposed to pay attention.

    On Friday, the ECB pulled a huge magic trick, larger than TARP. Under one of its alphabet-soup programs – long-term refinancing operations (LTRO) – it handed teetering banks $399.3 billion, or $444 billion.

    €399.3 billion – like a used car is advertised for €19,999.99 – because €400 billion might have been too much of a sticker shock. So let’s round it to €400 billion.

    And as central banks do, it didn’t ask legislators for permission. It just did it. Here’s a screenshot of the ECB’s disclosure, with my annotations:

    Those Elder—s are just like magicians!

    • Vince the Prince says:

      Better to stock up on a fresh supply of Roundup, Fast Eddy, the end is near.

      • doomphd says:

        Doesn’t Roundup have a shelf life? The stuff is apparently carcinogenic, also. Best to wear gloves and a mask, and try to not get it on exposed skin.

        • Vince the Prince says:

          Exactly my point, doomphd, that’s why Fast Eddy best buy a fresh stash now before the read deal final act of BAU comes. As far as the other concerns, the other choice is facing starvation! Just want to help Fast Eddy make it through the bottleneck. It would be a terrible shame if all the prepping and effort him and the Mrs. should all be for not.
          After all Fast Eddy deserves to be a survivor, being one that “knows all about world affairs”, or so him claims. Pour another round of Roundup…..goes down nice a smooth!

    • Tab says:

      Why didn’t they just make it a cool 1 trillion? Does anyone even give a shit?

  46. Downunder says:

    Every time that I have some doubts about civilisation ending I do some simple maths and see that it has to end some time soon. I thought that I might do a little maths on the problem of food without fossil fuels. If we look at the staff of life for Western populations – wheat and trace through what is required to produce a loaf of bread or a bowl of pasta then it becomes impossible without FF. Most mainstream commercially viable farms growing wheat today are in the 1000 to 100000 acre size range. I saw an article on a No-till Seeder recently that was 20 m wide and travelled at 20kmph. This means that in the right conditions it would cover 20 * 20000 = 400000 square metres or 40 hectates which is 100 acres every hour . It took a little research to find that the area of an acre describes the area that a man could traditionally plough in a day – this of course would vary on the soil type the size of the team and other variables. I think that it got to be as high as 5-7 with a large team of specially bred work horses. Of course while the farmer and his animals are resting up after a hard days work of preparing one acre there has been a change of driver and the tractor refuelled and off they go for another 100 acres every hour through the night. So without FF it would be pointless the farmer having much more than 50 to 100 acres (area would be needed for pasture for the work animals as they cannot be turned off with a key when finished). So if every 1000 acres had 10 to 20 farms on them with area for house, pasture, veggie garden, orchard etc , then there was no artificial fertiliser to double the yield and all those extra people had to be fed then the amount of grain going to feed the cities would be a fraction of what it is today – no wonder that there wasn’t 7billion people around before fossil fuels

    • Fast Eddy says:

      Virtually all food produced is done so with petrochemical fertilizers (and pesticides)

      When such fertilizers are added to the soil they essentially sterilize it. If the chemicals are no longer available — and you try to grow a plant in that soil you would fail.

      It takes multiple years of intensive organic inputs to revitalize soil damaged by petrochemical fertilizers.

      So — when BAU ends — and oil is no longer available — the petrochemicals required to grow food will quickly run out.

      And 7.3 billion people are going to starve to death.

      There is no way around that outcome.

      • Tim Groves says:

        Agreed, a visit from all four horsemen is on the cards and radiation from spent nuclear fuel awaits the survivors. Also, there are unlikely to be enough horses to plough all those acres or enough horse manure to fertilize them. But in the meantime, we can eat, drink and remember what a jolly affair old-fashioned ploughing used to be.

        It was early one morning at the break of the day
        The farmer came to us, and this he did say,
        Come rise up my fellows with the best of good will,
        Your horses need something their bellies to fill

        When four o’colock comes, me boys, it’s up we do rise
        And off to the stables we merrily flies.
        With a-rubbin’ and scrubbin’ our horses we’ll go
        For we’re all jollly fellows that follows the plough.

        When six o’ clock comes, me boys, at breakfast we’ll meet,
        And cold beef and pork we’ll heartily eat.
        With a piece in our pockets, to the fields we do go
        For we’re all jolly fellows that follows the plough.

        The farmer and this he did say,
        What have you been doing this long summer’s day?
        You’ve not ploughed your acre, I’ll swear and I’ll vow,
        You are all lazy fellows that follows the plough!

        Then up spoke our carter and this he did cry,
        We have all ploughed our acre you tell us a lie.
        We’ve all ploughed our acre, I’ll swear and I’ll vow,
        We are all jolly fellows that follows the plough

        Then up spoke the farmer and laughed at the joke,
        Oh it’s gone half past two boys it’s time to unyoke,
        Unharness your horses and rub them down well,
        And I’ll give you a jug of my very best ale.

        So come all you young ploughboys,
        where e’re you may be.
        Come take this advice and be ruled by me
        Never fear any master where e’re you may go,
        For we’re all jolly fellows that follows the plough.

        For we’re all jolly fellows that follows the plough.
        (Repeat x 3)

    • Good point. It is impossible to go backward. The houses and fences have been taken down. The depth of the top soil is less, and its quality is lower.

    • Historically, around 90 percent of the population was agrarian, with less than 10 percent urban. Without fossil fuels, barring pandemic, nuclear apocalypse, etc, I would expect a similar outcome.

      Of course, we also lack the work horses so productivity would be much lower. So even without irradiation, runaway climate change, etc, an undershoot down into the hundreds of millions seems likely.

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