2017: The Year When the World Economy Starts Coming Apart

Some people would argue that 2016 was the year that the world economy started to come apart, with the passage of Brexit and the election of Donald Trump. Whether or not the “coming apart” process started in 2016, in my opinion we are going to see many more steps in this direction in 2017. Let me explain a few of the things I see.

[1] Many economies have collapsed in the past. The world economy is very close to the turning point where collapse starts in earnest.  

Figure 1

Figure 1

The history of previous civilizations rising and eventually collapsing is well documented.(See, for example, Secular Cycles.)

To start a new cycle, a group of people would find a new way of doing things that allowed more food and energy production (for instance, they might add irrigation, or cut down trees for more land for agriculture). For a while, the economy would expand, but eventually a mismatch would arise between resources and population. Either resources would fall too low (perhaps because of erosion or salt deposits in the soil), or population would rise too high relative to resources, or both.

Even as resources per capita began falling, economies would continue to have overhead expenses, such as the need to pay high-level officials and to fund armies. These overhead costs could not easily be reduced, and might, in fact, grow as the government attempted to work around problems. Collapse occurred because, as resources per capita fell (for example, farms shrank in size), the earnings of workers tended to fall. At the same time, the need for taxes to cover what I am calling overhead expenses tended to grow. Tax rates became too high for workers to earn an adequate living, net of taxes. In some cases, workers succumbed to epidemics because of poor diets. Or governments would collapse, from lack of adequate tax revenue to support them.

Our current economy seems to be following a similar pattern. We first used fossil fuels to allow the population to expand, starting about 1800. Things went fairly well until the 1970s, when oil prices started to spike. Several workarounds (globalization, lower interest rates, and more use of debt) allowed the economy to continue to grow. The period since 1970 might be considered a period of “stagflation.” Now the world economy is growing especially slowly. At the same time, we find ourselves with “overhead” that continues to grow (for example, payments to retirees, and repayment of debt with interest). The pattern of past civilizations suggests that our civilization could also collapse.

Historically, economies have taken many years to collapse; I show a range of 20 to 50 years in Figure 1. We really don’t know if collapse would take that long now. Today, we are dependent on an international financial system, an international trade system, electricity, and the availability of oil to make our vehicles operate. It would seem as if this time collapse could come much more quickly.

With the world economy this close to collapse, some individual countries are even closer to collapse. This is why we can expect to see sharp downturns in the fortunes of some countries. If contagion is not too much of a problem, other countries may continue to do fairly well, even as individual small countries fail.

[2] Figures to be released in 2017 and future years are likely to show that the peak in world coal consumption occurred in 2014. This is important, because it means that countries that depend heavily on coal, such as China and India, can expect to see much slower economic growth, and more financial difficulties.

While reports of international coal production for 2016 are not yet available, news articles and individual country data strongly suggest that world coal production is past its peak. The IEA also reports a substantial drop in coal production for 2016.

Figure 2. World coal consumption. Information through 2015 based on BP 2016 Statistical Review of World Energy data. Estimates for China, US, and India are based on partial year data and news reports. 2016 amount for "other" estimated based on recent trends.

Figure 2. World coal consumption. Information through 2015 based on BP 2016 Statistical Review of World Energy data. Estimates for China, US, and India are based on partial year data and news reports. 2016 amount for “other” estimated based on recent trends.

The reason why coal production is dropping is because of low prices, low profitability for producers, and gluts indicating oversupply. Also, comparisons of coal prices with natural gas prices are inducing switching from coal to natural gas. The problem, as we will see later, is that natural gas prices are also artificially low, compared to the cost of production, So the switch is being made to a different type of fossil fuel, also with an unsustainably low price.

Prices for coal in China have recently risen again, thanks to the closing of a large number of unprofitable coal mines, and a mandatory reduction in hours for other coal mines. Even though prices have risen, production may not rise to match the new prices. One article reports:

. . . coal companies are reportedly reluctant to increase output as a majority of the country’s mines are still losing money and it will take time to recoup losses incurred in recent years.

Also, a person can imagine that it might be difficult to obtain financing, if coal prices have only “sort of” recovered.

I wrote last year about the possibility that coal production was peaking. This is one chart I showed, with data through 2015. Coal is the second most utilized fuel in the world. If its production begins declining, it will be difficult to offset the loss of its use with increased use of other types of fuels.

Figure 3. World per capita energy consumption by fuel, based on BP 2016 SRWE.

Figure 3. World per capita energy consumption by fuel, based on BP 2016 SRWE.

[3] If we assume that coal supplies will continue to shrink, and other production will grow moderately, we can expect total energy consumption to be approximately flat in 2017. 

Figure 5. World energy consumption forecast, based on BP Statistical Review of World Energy data through 2015, and author's estimates for 2016 and 2017.

Figure 4. World energy consumption forecast, based on BP Statistical Review of World Energy data through 2015, and author’s estimates for 2016 and 2017.

In a way, this is an optimistic assessment, because we know that efforts are underway to reduce oil production, in order to prop up prices. We are, in effect, assuming either that (a) oil prices won’t really rise, so that oil consumption will grow at a rate similar to that in the recent past or (b) while oil prices will rise significantly to help producers, consumers won’t cut back on their consumption in response to the higher prices.

[4] Because world population is rising, the forecast in Figure 4 suggests that per capita energy consumption is likely to shrink. Shrinking energy consumption per capita puts the world (or individual countries in the world) at the risk of recession.

Figure 5 shows indicated per capita energy consumption, based on Figure 4. It is clear that energy consumption per capita has already started shrinking, and is expected to shrink further. The last time that happened was in the Great Recession of 2007-2009.

Figure 5. World energy consumption per capita based on energy consumption estimates in Figure 4 and UN 2015 Medium Population Growth Forecast.

Figure 5. World energy consumption per capita based on energy consumption estimates in Figure 4 and UN 2015 Medium Population Growth Forecast.

There tends to be a strong correlation between world economic growth and world energy consumption, because energy is required to transform materials into new forms, and to transport goods from one place to another.

In the recent past, the growth in GDP has tended to be a little higher than the growth in the use of energy products. One reason why GDP growth has been a percentage point or two higher than energy consumption growth is because, as economies become richer, citizens can afford to add more services to the mix of goods and services that they purchase (fancier hair cuts and more piano lessons, for example). Production of services tends to use proportionately less energy than creating goods does; as a result, a shift toward a heavier mix of services tends to lead to GDP growth rates that are somewhat higher than the growth in energy consumption.

A second reason why GDP growth has tended to be a little higher than growth in energy consumption is because devices (such as cars, trucks, air conditioners, furnaces, factory machinery) are becoming more efficient. Growth in efficiency occurs if consumers replace old inefficient devices with new more efficient devices. If consumers become less wealthy, they are likely to replace devices less frequently, leading to slower growth in efficiency. Also, as we will discuss later in this  post, recently there has been a tendency for fossil fuel prices to remain artificially low. With low prices, there is little financial incentive to replace an old inefficient device with a new, more efficient device. As a result, new purchases may be bigger, offsetting the benefit of efficiency gains (purchasing an SUV to replace a car, for example).

Thus, we cannot expect that the past pattern of GDP growing a little faster than energy consumption will continue. In fact, it is even possible that the leveraging effect will start working the “wrong” way, as low fossil fuel prices induce more fuel use, not less. Perhaps the safest assumption we can make is that GDP growth and energy consumption growth will be equal. In other words, if world energy consumption growth is 0% (as in Figure 4), world GDP growth will also be 0%. This is not something that world leaders would like at all.

The situation we are encountering today seems to be very similar to the falling resources per capita problem that seemed to push early economies toward collapse in [1]. Figure 5 above suggests that, on average, the paychecks of workers in 2017 will tend to purchase fewer goods and services than they did in 2016 and 2015. If governments need higher taxes to fund rising retiree costs and rising subsidies for “renewables,” the loss in the after-tax purchasing power of workers will be even greater than Figure 5 suggests.

[5] Because many countries are in this precarious position of falling resources per capita, we should expect to see a rise in protectionism, and the addition of new tariffs.

Clearly, governments do not want the problem of falling wages (or rather, falling goods that wages can buy) impacting their countries. So the new game becomes, “Push the problem elsewhere.”

In economic language, the world economy is becoming a “Zero-sum” game. Any gain in the production of goods and services by one country is a loss to another country. Thus, it is in each country’s interest to look out for itself. This is a major change from the shift toward globalization we have experienced in recent years. China, as a major exporter of goods, can expect to be especially affected by this changing view.

[6] China can no longer be expected to pull the world economy forward.

China’s economic growth rate is likely to be lower, for many reasons. One reason is the financial problems of coal mines, and the tendency of coal production to continue to shrink, once it starts shrinking. This happens for many reasons, one of them being the difficulty in obtaining loans for expansion, when prices still seem to be somewhat low, and the outlook for the further increases does not appear to be very good.

Another reason why China’s economic growth rate can be expected to fall is the current overbuilt situation with respect to apartment buildings, shopping malls, factories, and coal mines. As a result, there seems to be little need for new buildings and operations of these types. Another reason for slower economic growth is the growing protectionist stance of trade partners. A fourth reason is the fact that many potential buyers of the goods that China is producing are not doing very well economically (with the US being a major exception). These buyers cannot afford to increase their purchases of imports from China.

With these growing headwinds, it is quite possible that China’s total energy consumption in 2017 will shrink. If this happens, there will be downward pressure on world fossil fuel prices. Oil prices may fall, despite production cuts by OPEC and other countries.

China’s slowing economic growth is likely to make its debt problem harder to solve. We should not be too surprised if debt defaults become a more significant problem, or if the yuan falls relative to other currencies.

India, with its recent recall of high denomination currency, as well as its problems with low coal demand, is not likely to be a great deal of help aiding the world economy to grow, either. India is also a much smaller economy than China.

[7] While Item [2] talked about peak coal, there is a very significant chance that we will be hitting peak oil and peak natural gas in 2017 or 2018, as well.  

If we look at historical prices, we see that the prices of oil, coal and natural gas tend to rise and fall together.

Figure 6. Prices of oil, call and natural gas tend to rise and fall together. Prices based on 2016 Statistical Review of World Energy data.

Figure 6. Prices of oil, coal and natural gas tend to rise and fall together. Prices based on 2016 Statistical Review of World Energy data.

The reason that fossil fuel prices tend to rise and fall together is because these prices are tied to “demand” for goods and services in general, such as for new homes, cars, and factories. If wages are rising rapidly, and debt is rising rapidly, it becomes easier for consumers to buy goods such as homes and cars. When this happens, there is more “demand” for the commodities used to make and operate homes and cars. Prices for commodities of many types, including fossil fuels, tend to rise, to enable more production of these items.

Of course, the reverse happens as well. If workers become poorer, or debt levels shrink, it becomes harder to buy homes and cars. In this case, commodity prices, including fossil fuel prices, tend to fall.  Thus, the problem we saw above in [2] for coal would be likely to happen for oil and natural gas, as well, because the prices of all of the fossil fuels tend to move together. In fact, we know that current oil prices are too low for oil producers. This is the reason why OPEC and other oil producers have cut back on production. Thus, the problem with overproduction for oil seems to be similar to the overproduction problem for coal, just a bit delayed in timing.

In fact, we also know that US natural gas prices have been very low for several years, suggesting another similar problem. The United States is the single largest producer of natural gas in the world. Its natural gas production hit a peak in mid 2015, and production has since begun to decline. The decline comes as a response to chronically low prices, which make it unprofitable to extract natural gas. This response sounds similar to China’s attempted solution to low coal prices.

Figure 7. US Natural Gas production based on EIA data.

Figure 7. US Natural Gas production based on EIA data.

The problem is fundamentally the fact that consumers cannot afford goods made using fossil fuels of any type, if prices actually rise to the level producers need, which tends to be at least five times the 1999 price level. (Note peak price levels compared to 1999 level on Figure 6.) Wages have not risen by a factor of five since 1999, so paying the prices that fossil fuel producers need for profitability and growing production is out of the question. No amount of added debt can hide this problem. (While this reference is to 1999 prices, the issue really goes back much farther, to prices before the price spikes of the 1970s.)

US natural gas producers also have plans to export natural gas to Europe and elsewhere, as liquefied natural gas (LNG). The hope, of course, is that a large amount of exports will raise US natural gas prices. Also, the hope is that Europeans will be able to afford the high-priced natural gas shipped to them. Unless someone can raise the wages of both Europeans and Americans, I would not count on LNG prices actually rising to the level needed for profitability, and staying at such a high level. Instead, they are likely to bounce up, and quickly drop back again.

[8] Unless oil prices rise very substantially, oil exporters will find themselves exhausting their financial reserves in a very short time (perhaps a year or two). Unfortunately, oil importers cannot withstand higher prices, without going into recession. 

We have a no win situation, no matter what happens. This is true with all fossil fuels, but especially with oil, because of its high cost and thus necessarily high price. If oil prices stay at the same level or go down, oil exporters cannot get enough tax revenue, and oil companies in general cannot obtain enough funds to finance the development of new wells and payment of dividends to shareholders. If oil prices do rise by a very large amount for very long, we are likely headed into another major recession, with many debt defaults.

[9] US interest rates are likely to rise in the next year or two, whether or not this result is intended by the Federal reserve.

This issue here is somewhat obscure. The issue has to do with whether the United States can find foreign buyers for its debt, often called US Treasuries, and the interest rates that the US needs to pay on this debt. If buyers are very plentiful, the interest rates paid by he US government can be quite low; if few buyers are available, interest rates must be higher.

Back when Saudi Arabia and other oil exporters were doing well financially, they often bought US Treasuries, as a way to retain the benefit of their new-found wealth, which they did not want to spend immediately. Similarly, when China was doing well as an exporter, it often bought US Treasuries, as a way retaining the wealth it gained from exports, but didn’t yet need for purchases.

When these countries bought US Treasuries, there were several beneficial results:

  • Interest rates on US Treasuries tended to stay artificially low, because there was a ready market for its debt.
  • The US could afford to import high-priced oil, because the additional debt needed to buy the oil could easily be sold (to Saudi Arabia and other oil producing nations, no less).
  • The US dollar tended to stay lower relative to other currencies, making oil more affordable to other countries than it otherwise might be.
  • Investment in countries outside the US was encouraged, because debt issued by these other countries tended to bear higher interest rates than US debt. Also, relatively low oil prices in these countries (because of the low level of the dollar) tended to make investment profitable in these countries.

The effect of these changes was somewhat similar to the US having its own special Quantitative Easing (QE) program, paid for by some of the counties with trade surpluses, instead of by its central bank. This QE substitute tended to encourage world economic growth, for the reasons mentioned above.

Once the fortunes of the countries that used to buy US Treasuries changes, the pattern of buying of US Treasuries tends to change to selling of US Treasuries. Even not purchasing the same quantity of US Treasuries as in the past becomes an adverse change, if the US has a need to keep issuing US Treasuries as in the past, or if it wants to keep rates low.

Unfortunately, losing this QE substitute tends to reverse the favorable effects noted above. One effect is that the dollar tends to ride higher relative to other currencies, making the US look richer, and other countries poorer. The “catch” is that as the other countries become poorer, it becomes harder for them to repay the debt that they took out earlier, which was denominated in US dollars.

Another problem, as this strange type of QE disappears, is that the interest rates that the US government needs to pay in order to issue new debt start rising. These higher rates tend to affect other rates as well, such as mortgage rates. These higher interest rates act as a drag on the economy, tending to push it toward recession.

Higher interest rates also tend to decrease the value of assets, such as homes, farms, outstanding bonds, and shares of stock. This occurs because fewer buyers can afford to buy these goods, with the new higher interest rates. As a result, stock prices can be expected to fall. Prices of homes and of commercial buildings can also be expected to fall. The value of bonds held by insurance companies and banks becomes lower, if they choose to sell these securities before maturity.

Of course, as interest rates fell after 1981, we received the benefit of falling interest rates, in the form of rising asset prices. No one ever stopped to think about how much of the gains in share prices and property values came from falling interest rates.

Figure 8. Ten year treasury interest rates, based on St. Louis Fed data.

Figure 8. Ten year treasury interest rates, based on St. Louis Fed data.

Now, as interest rates rise, we can expect asset prices of many types to start falling, because of lower affordability when monthly payments are based on higher interest rates. This situation presents another “drag” on the economy.

In Conclusion

The situation is indeed very concerning. Many things could set off a crisis:

  • Rising energy prices of any kind (hurting energy importers), or energy prices that don’t rise (leading to financial problems or collapse of exporters)
  • Rising interest rates.
  • Defaulting debt, indirectly the result of slow/negative economic growth and rising interest rates.
  • International organizations with less and less influence, or that fall apart completely.
  • Fast changes in relativities of currencies, leading to defaults on derivatives.
  • Collapsing banks, as debt defaults rise.
  • Falling asset prices (homes, farms, commercial buildings, stocks and bonds) as interest rates rise, leading to many debt defaults.

Things don’t look too bad right now, but the underlying problems are sufficiently severe that we seem to be headed for a crisis far worse than 2008. The timing is not clear. Things could start falling apart badly in 2017, or alternatively, major problems may be delayed until 2018 or 2019. I hope political leaders can find ways to keep problems away as long as possible, perhaps with more rounds of QE. Our fundamental problem is the fact that neither high nor low energy prices are now able to keep the world economy operating as we would like it to operate. Increased debt can’t seem to fix the problem either.

The laws of physics seem to be behind economic growth. From a physics point of view, our economy is a dissipative structure. Such structures form in “open systems.” In such systems, flows of energy allow structures to temporarily self-organize and grow. Other examples of dissipative structures include ecosystems, all plants and animals, stars, and hurricanes. All of these structures constantly “dissipate” energy. They have finite life spans, before they eventually collapse. Often, new dissipative systems form, to replace previous ones that have collapsed.

The one thing that gives me hope is the fact that there seems to be some type of a guiding supernatural force behind the whole system that allows so much growth. Some would say that this supernatural force is “only” the laws of physics (and biology and chemistry). To me, the fact that so many structures can self-organize and grow is miraculous, and perhaps evidence of a guiding force behind the whole universe.

I don’t know precisely what is next, but it seems quite possible that there is a longer-term plan for humans that we are not aware of. Some of the religions of the world may have insights on what this plan might be. It is even possible that there may be divine intervention of some type that allows a change in the path that we seem to be on today.

About Gail Tverberg

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

1,607 Responses to 2017: The Year When the World Economy Starts Coming Apart

  1. michaelrynn says:

    When does the human ultra-social, cooperative extraction of planetary resources back off and decline enough, so that the biosphere of nature has a chance for regrowth? Where are the biospheric status indicators? Should not we monitor biosphere health as assiduously as the prime indicators of economic “health” and show these graphs as well? I hope for the global economic collapse sooner rather than later, because of the growing dire straits of biosphere collapse. It is too bad that since I am older, retired and dependent on the old economic systems, I will not be able to adapt to rapid decline. No one, anywhere, can adapt to biosphere collapse.

    • bandits101 says:

      It’s way, way, way too late for collapse to prevent let alone mitigate the calamity that’s upon us. Maybe even sixty years ago was too late. Best to party like there’s no tomorrow Mike, there’s no escaping the reaper for humankind and pitifully, we are taking everything bigger than a rat with us.

    • Look at the period roughly 1880-1940s, that was time of largely animal powered agriculture, yet this renewable power was mildly leveraged with some relatively simple metal machines, implements and tools. Although apart from direct farming the wider distribution network was obviously coal/oil powered (trains and first light trucks) by that time.

      A lot of the nutrients/trace elements were recycled back through hay feeding/pasture, manure spreading, but overall one can summarize there was still continuous drain on the topsoil, deforestation, biosphere pushed to the corner.

      The post WWII/1970’s as the very recent “re-wilding” event – the return of wolf, bear, buffaloes etc. that’s only because of the oil/natgas/coal/uranium advantage as people can afford the luxury set aside some productive land.

      Now, we have the knowledge to return to ~1880-1940s era of decent low environmental impact mechanization with even more gentle soil-biosphere stewardship methods, how to keep the topsoil for longer, perhaps even build it up again slowly. But in that model that’s surely not including anymore the huge drains like today’s giant cities in every respect, and the overall complexity infrastructure of contemporary civilization, not mentioning the population levels.

      Hence the worry, in case of collapse proper we might instead fall back to even much lower origins ala middle ages or worse.. meaning for the most part manual labor – drudgery, oxen power only for the affluent, rudimentary (un precise – low leverage) tools and technology.

      • problem with that , it is not possible to regress selectively.

        folks want what they have now, all the good stuff, even though they realise what the bad stuff is.

        do you want to regress back past the advent of antibiotics for instance—of course not, but it is our industrial system that provides antibiotics.

        it isnt possible to backtrack knowledge.
        we know what we know, and want what we have—and more.
        that is human nature, and collectively we will move ”forward” until stopped or diverted to another path.

        there is a consensus of opinion that our current burst of ”progress” kicked off around 1930, and will last 100 years. That represents not our ‘industrial society’ but our ‘debt society’. The point at which we came to believe that today’s goods could be bought with tomorrow’s money. (Forever)
        By doing that we kept one another in employment. (Wars helped with that too) But we were /are effectively borrowing money to pay each other’s wages.

        Problem was/is that money is tokenised energy, so that was only possible if we could find increasing amounts of fuel to turn into money to fund our progress. In 1930 the effort to do that was easy—there was lots of hydrocarbon fuel to be had—but over the last 90 years we’ve had to put in more and more effort in finding the necessary energy to turn into money.

        (We deluded ourselves into thinking it was all due to technical innovation)

        as 2030 approaches, we see the endgame, when no matter how much effort we put in, our efforts are not enough to make any real ‘money’—we can’t afford to ‘buy’ the energy to support next year.
        This is why the majority haven’t had a ‘real’ payrise since 1970.
        That was the year the USA went from oil production surplus into oil deficit.—less and less money became available to fuel the future, so payrises effectively stopped, except for the very rich who creamed off more and more.

        • Yes, as I wrote, it’s an information a modeled approach, which could work, might be at best attempted at the fringes (actually it is as we speak), but most likely not acted upon on time by the majority nor even propelled to spotlight by influential mass of first adopters to make it evolution contender..

          In terms of antibiotics, on one hand we have to admit, they were over abused recently, and not that much “needed” in less polluted (unbalanced) environment. That being said, rural life of the past, i.e. 8x children in total, 4x dying young age, 2x lost in war/work accident, ~2x perhaps keep enduring as adults is a completely different culture and world structure in comparison with contemporary thinking.

          • that loss of children was what kept the world in balance—that and old people dying conveniently in their allotted span.

            Ive just got back from visiting an elderly friend in hospital.
            100 years ago she would be dead—along with everyone else there—instead of just been kept alive by brilliant medical staff-x 000s across the country.
            It’s unaffordable yet what can be done about it?

            • gerryhiles says:

              I am certainly quite near death and “should” have died around 2006, according to the surgeon who removed my cancerous lung in December 2000, or the other who removed my cancerous prostate gland a year earlier, but for sundry other reasons too which, in sum, resulted in me entering an aged care facility (not quite a “home”) four years ago when I was 69.
              Lately – well increasingly over the last couple of years – I have noticed an accelerating decline, both physically and mentally, though I do not know exactly when this will terminate in death of course, just as I do not know when the external “world” of this iteration of civilisation will terminate, as it surely will. I have the peculiar privilege(?) of being able to say, “As within, so without.” And this informed by such luminaries as Plato/Socrates, Rene Descartes, David Hume, Immanuel Kant, Isaac Newton and Carl Jung … none of whom I will try to explain to anyone any more, so just suffice to say that my terminal understandings derive from many sources, including many technological ones which directly relate to resource depletion and the impending failure of technology to “keep things going”.
              My current existence in an aged care facility is essentially unaffordable in every way and is, therefore, a microcosm of an entire civilisation on the verge of terminal crisis. All it would take to terminate the existence of myself, 60 other residents and multiples of that by way of staff and their multiplier effects on the macro economy (taking account of thousands of other similar facilities, including hospitals) would be 1-4 weeks of disrupted power and food supplies – which is not unthinkable by a long shot.
              Note that by “civilisation” I precisely mean “living in cities”. The definition of the word basically has NOTHING to do with “being polite, fair and knowledgeable”. On the contrary: cities and civilisation are the end result of conquest and wars. And if you want to find the very worst that our species is capable of, then look no further than areas within cities and at those in government. And look no further than the chaos now enveloping the Middle East since the latest invasions by the Washington-based Empire of Chaos … in fact by design of the neocon-dominated governments in the Capital and satrap governments throughout Europe. It cannot be long before the blow back comes to “Western” centres of civilisation and, if I am still alive, I may well be amongst the first to die, because there will be no way to provide for millions of old people and others with disabilities.
              I have no religion whatsoever – no dogmatic belief system – but, somewhat like Gail(?) I believe in a “something” which accounts everything, that’s all-pervasive and an “organising principle” (say), but none of this necessarily means a special interest in humanity. If the emergence of consciousness is, somehow, the purpose of the Universe, then it would not matter one iota if the “experiment” leads to failure on this Planet now. Infinite other possibilities may exist. Only very ego centric people have a very geo centric belief system.

            • @gerry
              I hope you didnt consider me flippant or uncaring in my summing up of life. i’ve been very lucky in that respect, and have no idea why

              the friend i saw in hospital is someone Ive known all my life, and her parents/gparents back down both sets of families.

              Here in the UK our health service is near breaking point, with insistence we ‘spend more’ on it—but effictively that is calling for more ‘energy’ to be used, but that of course is what’s failing the system.
              when our nhs was started in 1948, the theory was that everyone would be made well—and the need for it would diminish.
              the demand now is of course that every last breath of life should be fought over—which is a good thing maybe if its your breath
              but less so if the taxation system is having to pay for it 0000s of times over.

              we all know that diseases can be treated so we demand that they are irrespective of logic and reality
              the result is we now have an unfair system–last year i needed a knee fixed.
              i had a choice of waiting for months to use our nhs—or next week if i paid.

              so i paid to be rid of the pain of it, and to choose the top man for the job because i wasn’t prepared to risk a ‘junior’ practising on me.

              self-survival i agree.

            • gerryhiles says:

              Not flippant at all. I was born in England and spent the first 28 years of my life there before coming to Australia, where the “sickness” care system is very similar and, in my view, better than that in the USA. But without going into details, I’m in agreement with you.

        • Right! Furthermore, now the world has to borrow more and more to add $1 of GDP. This is evidence that adding debt is no longer working to keep the economy growing.

          • mansoor h khan says:


            Helicopter cash drop does not have to require debt to increase. The United States Treasury can simply print the needed money.

            GDP can be increased in this way. Yes, there is question of inflation. How much can be easily tolerated without impacting commerce too much? Helicopter drops (QE) will help the financial system survive a little longer.

            Direct QE to energy companies may keep energy supplies flowing a little longer.

            In the end entropy will win, of course.


            • money is a function of energy
              energy is not a function of money

              using printed money without the relevant increase in raw energy supply doe not increase gdp

              if it did, we could all repair each other’s shoes and take in each other’s washing, pay each other with helicopter money as much as we wanted and all become billionaires. this is obviously ridiculous to i use it to illustrate my point, that the vast majority of people do not understand why money cannot simply be printed as required.
              there is a complete absence of awareness of the link between energy and money-flow.

              paying energy companies by the same means to drill for more oil uses the same money-theory, and is equally nonsensical

            • What you and I call debt are probably not the same thing. Even if the securities remain on the Federal Reserve’s balance sheet, they are still debt in my opinion.

              We have been attempting to use more and more debt to try to increase GDP for a very long time. It is becoming less and less effective for this purpose. To a significant extent, rising debt (or artificially low interest rates) can be expected to lead to changes in relativities among currencies. Low interest rates and rising debt lead to falling currencies, and difficulty in affording goods sold on the international market (like oil).

              I believe the EU has been using their QE to buy debt of some energy companies already.

    • Stefeun says:

      It’s too late for both economic and biospheric collapse, we can’t do anything to avoid them.
      Note that for us, the economic collapse is sufficient, since we’re “eating petrol” (all we eat requires BAU and fossil fuels).
      As for the biospheric collapse, there are plenty of indicators, you can have a look at fig.5 page 6 of this paper (Schramski, Discharge of the Earth battery, chart about evolution of available phytomass):

    • gerryhiles says:

      Very succinctly and aptly put. I too am old (73). I was born in England (in Australia since 1971) and had the dubious privilege of witnessing peak easy coal and the temporary rescue of North Sea oil and gas, with a similar story – in a variety of contexts including environmental – playing out in Australia.
      I too will be brief. For one thing I have never found any significant reason to disagree with Gail. For another: I have a very extensive and varied practical background. Therefore I can informedly say that we, globally, are on the cusp of a civilizational repeat of the demise of the Roman Empire especially.

      • ejhr2015 says:

        Yes, except the Roman Empire was a slow crash. We will suffer it much faster.

        • gerryhiles says:

          I agree. I too think that, compared with the relatively slow demise of the Roman Empire, the demise of this Empire of Chaos (as it has become this last 30-40 years) will be fast. Future historians, if there are any, might well interpret it as “instant” … after all 50 (say) years is close to zero compared with even just the 5-8,000 years since the first civilisations emerged.

    • Tango Oscar says:

      It’s much to late to fix the biosphere. Mother Nature will take care of that after humans are gone. There is absolutely nothing we can do to reverse the 6th great extinction or slow down climate change. In fact, as another poster mentioned earlier, due to global dimming if we cease or try to reverse economic activity it will hasten climate change rapidly. In effect, we’re on borrowed time already. I would wager there are gigantic methane burps coming out of the Arctic right now in order to fuel these increasing bursts of +55 F above average temperatures we’re seeing.

    • I do not think that we really have control on when the biosphere regrows. We are very close to collapse. Moving collapse up a few days or months cannot make much difference in the whole scheme of things. Monitoring is not going to be of any assistance–it will simply use more resources.

      You say, “No one, anywhere, can adapt to biosphere collapse.” Right, but there is not much we can do about the situation. There is the possibility that we may be one of many species that become extinct.

  2. seems others have arrived at the same thinking for 2017

    If Saudi implodes it will destabilise not only the immediate region but the rest of the industrial world

  3. Edward Park says:

    Yes, I was surprised by the conclusion to this article. I believe in God, but not from a religious point of view. God is not religious. Neither are interest rates and bad debt. I’ve been reading Gail’s posts for about 5 years, and it seems that I sink into a consistent funk of how does this work out? My conclusion seems to always devolve to a reality that we are heading back to 1900.

    What is written here is not in conflict with such an end, but maybe it is faster than I otherwise understood. Surely, there is no way out from a consistent decline. I come from a background in the electricity industry, and I know that electricity as an industry is in peril, just a few tokes behind big oil. It may be that single family dwellings were a mistake all along, and the adaptation from single family homes will be troublesome.

    Many savants are predicting trouble in 2017, from many different perspectives. I think Gail is basically right, it will work out, but we’ll see an enormous transition from the ‘stuff’ of modern life.

    • gerryhiles says:

      In brief. There is no “transition” from readily available electricity to even fairly infrequent shortages, as you’ll know by reference to maintaining the grid I suppose. (Also the matter of feeding in to atomic power stations.)
      I’ll just note that all modern shopping complexes lack windows and natural ventilation, therefore within only a few days things will fall apart, even without considering the absence of refrigeration and the “just in time” method of supplies. From order to chaos in seven days????? Figuratively or actual??
      I too have been reading Gail’s articles for about five years and, what with many other inputs too, I think that the only question in context is the definition of “collapse” … obviously not as rapid as the controlled demolition of the WTC buildings, but probably faster than the demise of the Roman Empire, with a probably similar outcome of great fragmentation for many centuries (assuming no global nuclear war).

      • Edward Park says:

        That’s why I stick to calling it decline. Collapse is not the right word as we proceed through it. We see so much in decline, and really big parts of the economic system. Bad debt, pension collapse (collapse is safe to say in terms of pensions), empty abandoned homes, lots of roads is acute disrepair, and massive retail space seemingly abandoned. I don’t see how town mayors can keep a straight face. I don’t believe the too-big-to-fail banks have a positive net worth; it is only through fraud they are able to keep the doors open. All regional banks are underwater, and with the decline in home values….something is going to give way with a big bang. When I visit my own bank, you sense immediately the emptiness of the building space.

        • Given the excess and challenges, heading back to at least ~1900 would be a paradise, relatively speaking. Specific regions might cascade through the downward slipping collapse process/trend with dissimilar speed and profile. Depending on endowment of resources, propensity/successes projecting power over others (and defending home turf), upkeep of legacy infrastructure, skills of people and rulers etc.

          Therefore as I mentioned some time ago one can envision a quasi replay of the fall of Rome, where someone takes over the role of Byzantium and runs with the civilization baton for few more centuries, albeit on rather transformed ground and scale.

      • we are 9 meals from anarchy

        in 2001 the uk had a fuel delivery drivers strike

        the government was informed than there was 3 days of food in the pipeline before supermarkets begin to empty
        we operate a ”warehouse on wheels” system now—which everyone should find scary.

        come shtf time—those trucks wont run for a few days, they will stop instantly, and news media will make sure everybody knows those trucks have stopped.

        i don’t need to elaborate on what will happen next.

    • JT Roberts says:

      “I come from a background in the electricity industry, and I know that electricity as an industry is in peril, just a few tokes behind big oil.”

      Is it possible you could elaborate on this? Any industry articles?

      • Edward Park says:

        Like with oil, the customers of electricity are seeing their purchasing power decline. We’ve had a real unemployment of 23% since the days of Bush 2, and this rate includes a lot of people working part time, and working for wages for many that the travel time back and forth negates the pittance of an hourly rate. So many citizens sit rather than try to find a job. Meanwhile, the inflation rate has been in the 7.5% range for several years in a row (I follow Shadow Government Statistics, and quote their 1990 calculation of inflation). So real incomes, if deflated by an appropriate cost of living calculation, have been in decline since about 1976. This decline has been steady. In the end, the public has been savaged by these ugly effects.

        So what happens to retail business, it shrivels by the same amount of what citizens loose to degradation in earnings. Electricity is retail consumption. As with many of Gail’s graphs, they show a decline in business activity. With electricity, it gets hit by everything that declines. Everyone is connected to the grid. Also, many old coal plants, those generating facilities at the bottom of the rate stack – most economical (technically) have been taken out of service. The replacement, beyond decline is sales, is newer gas fired combined cycle plants. The coal plants coming out of the stack were built in the 1950’s, and the capital cost of those facilities, plus the lower cost per BTU of coal itself, have increased the total stack cost.

        Notice that I’ve said nothing about nuclear plants. Most nuclear units operating across the country are present horror stories, and are now more than 40 years old. It may be the decision to re-license the plants was not the best. Older nuclear plants are a nightmare for the utilities operating them, with costs escalating rapidly. Everyone knows the issues with plant after plant, and now we are seeing re-licensed plants being scheduled for shut down. Understand, nuclear is not cheap, and with age and hard NRC inspections, many utilities are backing off. This does not apply to all, but the rising cost apply to all. Nuclear is the top of the stack cost wise, but still base loaded. I expect more nuclear plants will come out of service for more gas combined cycle – if it can continue to be funded in the future.

        In summary, the purchasing public is under duress financially, at the same time the utilities face unexpected costs and unexpected problems. Keep reading what Gail writes, this is going to be a big deal. She has said the oil industry – in effect – is going to collapse, globally. I agree. Electricity is next. The economics just aren’t there, same as the oil model. The public, or not enough of the public, can lift it back up.

        • Drciber says:

          Yes, and as electricity collapses it will become increasingly difficult and finally impossible to maintain the grid power required to prevent the overheating and meltdown of nearly 500 nuclear reactor cores and the attendant several thousand spent fuel cooling tanks, most of which are in the northern hemisphere, and only needed six sigma levels of maintenance and process control for the next 20,000 years or so to prevent an extinction level catastrophe. How’s that bit of hubris workin’ out for us? Decades into the future, many of those reactor cores will be directly inundated by seawater as ocean levels rise, since they were built on the beach a la Fukushima, thereby administering a coup de grace to those marine species still unfortunate enough to require an aquatic environment. The steam explosions produced as that takes place will ensure wide atmospheric distribution of reactor isotopes, but personally I think all of us will already be gone by then.

          So if there is some “guiding supernatural force” in the background with a “plan” for humanity enabling all this growth – really Gail I can’t believe you actually put that in a post! Good thing those last paragraphs didn’t get included over at Zero Hedge, the ZH’ers would have drawn and quartered you – it sure is one hell of a plan by my lowly naked ape standards /sarc. Or possibly, on the other hand, there’s nothing really exceptional or supernatural going on here. Just a species finding itself with slightly more cleverness (by whatever means and in its own opinion) than its fellow travelers on the planet taking the only path open to it, self-destruction.

          • I know that other sites will take these paragraphs off. That is OK with me.

            I didn’t say that the plan for humans is on this earth. In fact, it cannot be. It is not likely to even be in this universe.

        • Interesting to hear what you say about the nuclear plants. I know that there has been talk about shutting a lot of them down. I wasn’t aware how much their costs had been going up–how much renovation was needed, for example. I know that they are getting old.

          There is admittedly quite a lot of natural gas available, if the price is quite a bit higher. Recent gas prices have been a problem for gas producers. The thing I wonder about is whether prices can really rise to the high level that would be needed to encourage quite a bit more natural gas production. I know that natural gas electricity generating plants are cheap to put in. The problem is that getting the natural gas itself probably is not. It certainly can not be extracted at today’s natural gas prices.

    • Glad to have someone from the electricity industry!

      I am not convinced that oil is in more peril than electricity. Oil is in many ways simpler to keep operating than keeping the electric grid operating. I have heard that on some US farms, gasoline powered washing machines were used before electricity was widely available.

      Also, I don’t think we can go back to 1900s technology. We would have to reconstruct a new economy, with what we have now in terms of skills and resources. We don’t have the skills to do things as we did things back in the 1900s and resources are much more depleted. Without oil and electricity, I think what we could do would be severely restricted.

  4. John Drake says:

    Dear Gail,

    As the average EROEI of the world’s energy sources falls down the net energy cliff, the amount of energy and money that needs to be spent to extract the same amount of energy rises exponentially. These resources dedicated to energy production necessarily need to be taken out from some place else within the economy. Hence, many “less essential” sectors are increasingly rapidly being drained. At some point, the entire edifice risks collapse.

    Hence the importance of assessing precicely where we collectively stand on the net energy curve.

    The “miracle” that you are now apparently seeking, if it happens, will likely come in the form of a new high EROIE cheap energy source that can readily be used – as a heat source – to replace the fossil fuels (coal, oil, gas) that are burrently burned in electricity producing power plants.

    This “miracle” could be the compact fusion reactor that has now been in development for several years by Lockheed Martin’s Skunk Works team.

    You wil appreciate that, even of this technical miracle took place, the challenge of manufacturing thousands of such fusion power plants and to install them within a few decades would be considerable in the present world financial environment. Furthermore, one would need – in parallel – to replace oil by electricity as the main fuel to feed the vital transportation sector.

    Let us hope that the coming year will bring us such good news.

    Best wishes for 2017 !


    • Justin Time says:

      On that note…

      Have you seen this…

      Breakthrough in Nuclear Fusion? – Prof. Dennis Whyte

      Commercial Fusion within ten years

      Game-changer or hopium?

      I know, I know… it would only lead to more unsustainable growth because, of course, humanity is bound by the same rules as yeast growing in a petri dish. It’s still interesting to imagine the impact a discovery of this kind would have on the global economy even if just on the level of confidence in the game of extend and pretend.

    • Maybe; maybe not.

      EROEI is only one piece of our problem. It is a terribly simplified model that doesn’t work at all well for intermittent renewables. We can spend more time fixing the model than we really learn from it.

  5. JT Roberts says:

    I was reading the other day of the latest Hubble deep field research and how they now feel the universe has 2 Trillion galaxies. It really boggles the mind when we view the scale of the universe, and it seems the more we learn the more improbable the existence of it becomes. Fascinatingly Fractal Geometric patterns are seen in the spiral arms, and in the arrangement of stars. The same are seen here in the natural living things on this earth. When studying complexity we find that the most prosperous systems, or life forms, are ones that are highly complex but live on the lowest entropic order of energy, or least complex energy we might say. This leads us to conclude that the first order, and most efficient order of life here on earth are plants, who can convert sunlight into growth with the surplus capacity of energy storage in an abundance of forms. Interestingly there is little benefit to a plant or tree in its production of fruit, and though we may conclude it benefits its propagation, this still does not explain the infinite variety, or the storability. However it does provide for the next order of life here on this earth from the fish in the sea to the land mammals all the way up to the most intelligent which is man. The probabilities of these things having come into existence by chance are simply not reasonable to consider. Where there is design there is purpose. Many try to argue that if there is an intelligent creator then why are conditions the way they are on earth, because many live meaningless or purposeless lives?
    Well it has to do in away with the core subject of this site. Will man recognize and respect his limits or will he not? Only the Bible answers these questions satisfactorily. Rev 12:9 reveals that the spirit creature named Satan is misleading the entire inhabited earth. What is the core deceptive teaching he has propagated? Simply this man has no limits. In Eden he approached Eve at Gen 3:4,5 and told her she could become like God, able to determine Good and Bad. This simply isn’t true. We have free will, but free will is the ability to choose right or wrong, not the ability to determine right from wrong. For example we can choose to jump off the rim of the Grand Canyon, but the result of that choice is predetermined. We can’t determine the result, it is bound by physical laws. If we consider that in a greater context it isn’t hard to see that the problems facing humanity are not physical. To the contrary the physical laws are behaving quite predictably, exactly as they were designed to do. So then the problem is a moral issue. We don’t have to look too far to see this is true. In 1972 Limits to Growth was written, and for the most part with little deviation, it has modeled the collapse of society as we are presently seeing. Why? Simply this you can’t solve moral issues with physical solutions. Society didn’t have the moral integrity then to act anymore than it does now. You can’t treat the symptom, physical collapse, without dealing with the cause, moral deviation.
    Where does this leave us? Or we might say “We’ve learned our lesson now what?” Once again we have to consider that Satan would like us to believe there is no solution. This simply isn’t true. Notice

    (Isaiah 45:18) 18 For this is what Jehovah says, The Creator of the heavens, the true God, The One who formed the earth, its Maker who firmly established it, Who did not create it simply for nothing, but formed it to be inhabited: “I am Jehovah, and there is no one else.

    The name Jehovah means “He Causes to Become” very fitting for the maker of the universe. Clearly this scripture exposes another Satanic lie, that the earth will be destroyed. Once again simply not true. It is true that time was needed to settle the moral issue of who has the right to determine what is right or wrong, the creator or the creation. But that has not changed Jehovah’s purpose toward this earth, which was, and still is, to have the entire earth transformed into a garden, filled with the offspring of Adam and Eve. To accomplish this Jehovah sent his son Jesus whose name means “Jehovah is Salvation”. His death paved the way to repurchase the human family to himself. 1Cor 15:45 With that out of the way it became time for him to act in the capacity of King of God’s Kingdom, a Kingdom that has the Moral integrity, and authority to act for the benefit of mankind. Jesus did not spare even his own life for the benefit of others, proving his rightfulness as ruler.

    How will this take place? Like any change of Political systems it requires war. Against who? Really it is against any who refuse to respect the moral authority of the great statute giver Jehovah God. So in Rev 16:16 we find the expression Armageddon. But Psalms expresses it this way referring to Jesus.

    (Psalm 2:12) 12 Honor the son, or God will become indignant And you will perish from the way, For His anger flares up quickly. Happy are all those taking refuge in Him.

    But notice the warm appeal to those who will act on the provision.

    (2 Peter 3:8, 9) . . .. 9 Jehovah is not slow concerning his promise, as some people consider slowness, but he is patient with you because he does not desire anyone to be destroyed but desires all to attain to repentance.

    How is this repentance leading to salvation achieved? It’s more than a change of life style it requires disowning a self determined way of life, and submitting to the moral authority of the King and the Kingdom. Simply put by doing so we express our desire to be citizens of that new world as the Bible describes.

    (2 Peter 3:12, 13) . . .! 13 But there are new heavens and a new earth that we are awaiting according to his promise, and in these righteousness is to dwell.

    Jesus himself warned of the Great Tribulation we see on the horizon Matt 24:21 but he also foretold this development preceding it.

    (Matthew 24:13, 14) . . .. 14 And this good news of the Kingdom will be preached in all the inhabited earth for a witness to all the nations, and then the end will come.

    Presently there are 8,000,000 volunteers in every nation on earth publishing this very fact, that God’s Kingdom is soon to take control of this earth’s affairs, in over 830 languages. The fact is this system is going to collapse and it will happen very quickly, and very soon. But it is not an indiscriminate die off rather a controlled demolition for the preservation of life. The creation is not greater than the creator, Jehovah’s purpose has not changed for this very reason. We can take comfort and warning from that thought, because for the new world to come the old must go.

    (Isaiah 33:22) 22 For Jehovah is our Judge, Jehovah is our Lawgiver, Jehovah is our King; He is the One who will save us. . .

    For More information Visit http://www.jw.org

    • sorry i ignored your knock on my door last sunday morning—-i was busy morally deviating.—-you know how it is with we unsaved.—

      That said, i had a jw uncle—long since gone to the great publishing house in the sky btw, and he and i wasted many a mutual hour in pointless argument. Him trying to save me from my sinful ways, not realising he was inoculating me from incursion by future saviours in the years to come.
      I never close the door on doorsteppers, once they realise I cannot accept dogma verbatim, and unquestioningly, they make excuses and leave..

      Entertaining though, especially as he was a young earth creationist. Apparently JWs don’t do that anymore, which is a pity. Lots of room for awkward questions there though—not that i got any answers. Especially when I went through the various doomdates previously stated by his overseers. Or the basic geology of stratification etc.
      Anything not in scripture was a blank space that somehow didn’t exist, which i found most odd.
      But he was family, and one is stuck with family.

      Having said that JTR, I have read a lot of your technical input into this forum, and it offers a deal deal of insight and common sense in our impending problems, and contributed a great deal to active subjects. I have had a great deal of respect for stuff you’ve said.

      However, pronouncing ultimate “truth” as set down by desert nomads 3000 years ago is likely to swing our pendulum of intellect so far in the opposite direction that it’s likely to go over full circle and deliver a kick of realism from a direction you don’t expect.

      Biblical truth is proven by the words in the bible
      But how do we know it is truth?
      Because it says so in the bible
      but who wrote the words down?
      Desert Nomads 3000 years ago
      Who told them to?
      God did
      How do we know he did?
      Because it says so in the bible

      • Duncan Idaho says:

        “Ye shall know the truth, and the truth shall make you mad.”
        -Dave Denison

      • JT Roberts says:

        Here’s one Norm. Do you think desert nomads understood the world was round? Mapping the universe looks like fine gauze? Gravity or Entropy?

        Isa 22:22 There is One who dwells above the circle of the earth,And its inhabitants are like grasshoppers. He is stretching out the heavens like a fine gauze,And he spreads them out like a tent to dwell in.

        Job 26:7 He stretches out the northern sky over empty space,Suspending the earth upon nothing;

        Ps 102:25 Long ago you laid the foundations of the earth,And the heavens are the work of your hands. 26 They will perish, but you will remain;Just like a garment they will all wear out. Just like clothing you will replace them

        There is only one uncreated God who holds the power over entropy as stated above in poetic prose.

        This is just a few examples but if we think a few desert nomads had this kind of knowledge far before we recently have discovered it then we’re not as advanced as we think. Or it has been the word of God all along.

        In any event most will agree that the universe had a beginning so was the first cause a person or thing. If we say thing then what was the catalyst. At some point there has to have been a thought, an intended action.

        Isa 40:Lift up your eyes to heaven and see.Who has created these things?It is the One who brings out their army by number;He calls them all by name. Because of his vast dynamic energy and his awe-inspiring power,Not one of them is missing.

        Did the nomads know matter was energy?

        • we can never know precisely what they knew in terms that we would judge to be scientific

          but they certainly figured out the earth was round with two sticks of known distance apart and measuring the sun’s shadow at a fixed time.

          with all the divine wisdom imparted to them—they still only knew of the planets visible to the naked eye.
          i would have thought god might have mentioned the others.
          and seeing the milky way where the air is totally clear of pollution is truly awesome—the only description that fits is ”fine gauze” They didnt know of any other physical means by which that could be.
          Northern sky=== Northern lights

          as to entropy—there is only one common element that entropy doesn’t work on, and that’s gold—which is why it became so valuable.
          Nothing so far seems to have stopped entropy elsewhere—dust to dust etc etc

          One thing i do grant, and that is the ancients had seers, like we do.
          hence their vision of the future was simply the awareness of billions of people everywhere, Their only interpretation was that the dead had all risen from their graves.
          All very simple provided you use logic not religious dogma.

          • JT Roberts says:

            The Great Minds of their day were in Egypt where they were treating infections with excrement. And yet the Mosaic Law required the burial of it. Why? What about quarantine? A leper was quarantined and his house and garments sanitized or destroyed. If we’re honest the beliefs the ancients held in common at the time of the Bible writings were counter to the Bible record. To say it was their powers of observation would be speculative at best since these are various writers at different times and places. It would be more reasonable to believe they would have held the common belief that existed in the world around them.

            Acts17:26 And he made out of one man every nation of men to dwell on the entire surface of the earth, and he decreed the appointed times and the set limits of where men would dwell, 27 so that they would seek God, if they might grope for him and really find him, although, in fact, he is not far off from each one of us.

            • as i said—when i used to present my jw uncle with obvious logic—he invariably skipped off in another direction to ‘prove’ some other vague point, fed to him by the cartel of elders in NYC
              Doorsteppers today use the same technique.
              When I drag them back on course, they always leave and abandon me to hellfire and eternal damnation.
              for which i am truly thankful

              I mentioned the fact that god failed to mention any planets beyond the visible ones, and that the Egyptians figured out the size of the earth with 2 sticks and the sun’s shadow

              as to treating wounds—many ancient civilisations had sophisticated techniques—including trepanning.
              Skeletons clearly show well set and healed fractures from 000s of years ago. The Romans had sets of surgical instruments that mirrored the ones we use today. We just make them better now but they have the same purpose.

          • Yorchichan says:


            You may be able to easily dismiss the ancient tribes of Israel knowing the earth was spherical and being aware of the laws of thermodynamics. However, how do you explain the Book Of Genesis giving precise details of The Big Bang, the coalescing of the stars and galaxies and the evolution of life? How could they have known this if God had not spoken to them?

            • evangelical fundies take the bible literally, word for word
              they are certain of it’s truth which other people laugh at
              Ken Ham for instance—raving mad yet millions believe him. To him and his ilk, evolution simply didnt happen. This mentality seems to afflict numerous members of the US government, which is where we get onto dangerous territory.

              I sometimes watch US religious TV rants—just to reassure myself of my own sanity. (always in doubt)
              Their take on Genesis is—well—their own.
              Whether it explains the big bang, evolution of life and so on is just the interpretation groups of people put on the words set down. Any “unknown” aspect of anything has to be the work of “god” (disease was always the work of god unlike we found it wasn’t)

              Disputing those words, even today, can get you killed. Yet it is the stuff of nonsense once the “god” thing is added to it. Every part of the bible has been extracted from other previous faiths, and reworked.
              Obviously faith was necessary to explain natural phenomena—birth in particular, that the act of giving birth—taken back through history, had to start “somewhere”—hence virgin birth stories evolved.
              “The flood” obviously occurred—but in separate places at different times, it has been coalesced into a single event.
              The flood that occurred in the middle east was almost certainly the Black sea at the end of the ice age. A look at the map tells you that, (the narrow opening of the Bosphorus) and certainly within historical record times, as sea levels rose. (oral history etc)

              There are thousands of shades of Judeo-Christian-muslim religion.
              Each has its own take on the subject.
              As to the laws of Thermodynamics, using the products of those laws, (the fixed physics) is different to actually setting them out in readable format I would have thought.
              All primitive peoples used the same physical laws we use today, and very cleverly. They didnt have the means to set them out, they just “knew” they worked thats all, through evolution of trial and error

              I understand that 46% of Americans believe the Earth is under 10k years old (gallup poll)—no wonder Trump emerged.
              What has Trump got to do with all this?

              When our (global) industrial economy tanks, (not if) the result will be military intervention to restore control the face of civil disorder. In the USA Trump will be impeached and got rid of. Then you will have Pence, or somebody like him who is an evangelical fundie. It only requires a few senior military figures to be similarly infected (or opportunistically to say they are) and a theo-military takeover of the USA becomes a certainty.
              That puts in place a theo-fascist dictatorship. The seeds of it are already sown. And the right conditions for it to flourish are becoming apparent right now.

        • bandits101 says:

          Just another religion predicting the past. Passages in the bible or koran to interpret future events or future knowledge. Of course “the future” in the predictions are ALWAYS in the past of our current lives. The religious zealots of course can’t actually predict the future, it has never been done. Why do so many fall for the religious BS? It’s rhetorical of course, nobody knows the answer to that, but someone might be able to adapt a passage in the bible to explain it.

          • I am not in the slightest way religious, but I have to disagree on future prediction.

            There were undoubtedly “seers” in the ancient world, just as there are today—not a common gift but it does exist. How I don’t know.—but I have experienced it on a personal level
            Crazies make religion out of it—that’s the nonsense part

            The bible clearly states:
            “And Israel shall be built in a day”—crazy huh?
            Then Israel came into being on the 1st January 1948, by the stroke of a pen on a legal document.
            How weird is that.

            Then the final battle before capturing palestine was at Megiddo in 1918— Which used to be called Armageddon

            Religious nutters have transmuted this into “Armageddon” (as yet to happen)

            Seers make predictions that are very oblique and don’t make sense until after they happen. That’s the odd part
            When somebody “saw” Israel being “built in a day” he could have had no knowledge of how it might come about—the same was true just about until the time when it did happen.

            But—please—there really is no skyfairy making stuff happen—honest.

            • Tim Groves says:

              How do we know that the Israel built in a day in 1948 is the fulfillment of the Biblical prophesy? A group of newcomers to Palestine took over the country, and taking inspiration from the Bible, renamed their new state Israel, and Bingo! Prophecy fulfilled.

              I will be a lot more impressed with Biblical prophecy when dem dry bones stand up and start dancing around all on their own.

              People in various religious traditions have a record of constructing or manufacturing events or occurrences and declaring them to be the fulfillment of past prophesies in order to lend legitimacy to the acts and tie them into the religious tradition. The tying in ofJesus’s birth and life as fulfilling previous Judaistic prophecies is a case in point. Then we have the Mormons and the Bahai in modern times declaring their founders were made manifest to the world by the same God who features in the Bible and the Koran.

              On and on it goes, complying with ancient scriptures as a claim to legitimacy and announcing a new compact with God for the the new era. Let the JWs argue with the SJWs. I’ll retire to my meditation cushion!

    • Mike Roberts says:

      “The probabilities of these things having come into existence by chance are simply not reasonable to consider.”

      And I don’t think anyone does consider that. However, the likelihood of these things coming into existence by filtered evolution is virtually certain (since evolution has been observed and can be traced back and, in many cases can be seen to have occurred many times). Probably off topic but perhaps prompted by Gail’s odd closing para.

      • There is a very long history of increased complexity and increased concentration of energy. Humans and our civilization are at the top of this pyramid. It is all very strange.

        Chaisson - Trend toward increased energy concentration

        • Harry Gibbs says:

          It is very strange, given that the overall trend is towards entropy. Personally I find the very fact of my own existence on this spinning rock in an unimaginably vast universe to be so bizarre that I remain entirely open-minded about the possibility of some sort of metaphysical conclusion to the human story.

          • It the system were really closed, the trend would be towards entropy. The continual flow of energy seems to allow growth somewhere, even if this part of the system is being overtaken by entropy.

        • Mike Roberts says:

          Some species can always be said to be “at the top”. Currently, that appears to be our species but that doesn’t make us special; it isn’t a special situation (other than the complete mess we’re making of everything, showing that being at the top of some notional pyramid doesn’t equate with intelligence, at all).

          • I was thinking in terms of higher energy density. Humans don’t hold a special place on our own; birds, for example are higher. But apparently the energy density of our civilization is very high, as is the energy density of human brains.

            Chaisson - Trend is toward greater complexity

    • Tango Oscar says:

      LOL! I LOVE how you conveniently miss all of the old testament verses where the Lord commands people to multiple and tells them that all of the animals and oceans are for their personal use. And look what happened because of it. Don’t start blaming some imaginary deity that doesn’t exist for man’s follies. I’m afraid the bible is nothing more than a heaping pile of contradictions almost entirely fabricated by men who were afraid of the bogey man and lightning. This is why they did things like smear blood from sacrificed animals all over their doorways.

    • I think that your statement, ” . . .Jehovah’s purpose toward this earth, which was, and still is, to have the entire earth transformed into a garden, filled with the offspring of Adam and Eve,” is subject to debate. In a dissipative structure, the tendency of the earth is not toward being a garden; it is toward being filled with stuff made from what we call “resources,” but which will quickly degrade to dust.

  6. Shawn says:


    Regarding the discussion of possibly rising interest rates.

    If we are entering a period of even greater deflation (assuming, hoping, collapse is a few more years off…), would interest rates rise?

    True, buyers of Treasuries are disappearing, and perception of risk might be rising, but the U.S. might be perceived as the safest haven, at least for a few more years. We could see interest rates rise in the near term, only to fall again towards zero or negative? And then the big (financial) bang….new currencies issued, etc.


    • Greg Machala says:

      This just sounds like living in the Matrix. Treasuries, interest rates, finance, currency is just all a human contrivance. They aren’t really “real” things. Yet we speak of them as if they are laws of nature. I have only recently began to think about what modern finance and the economy really is. The reality of what finance is really boils down to borrowing energy from the future. Finance and thus the economy will work as long as there is abundant energy available in the future. Since energy cannot be printed, it appears the Central Banks will manipulate the financial tokens that they control (interest rates and currency). Going forward I don’t think there will by a rhyme or reason why the Central Banks raise or lower interest rates. It is just throwing ideas on the wall and see what sticks at this point.

    • This is a good question: “If we are entering a period of even greater deflation, would interest rates rise?”

      Deflation would mostly be tied to falling fossil fuel prices, defaults on debts, and wages that are not raising very fast, because of inflation.

      What I said in the post is “[9] US interest rates are likely to rise in the next year or two, whether or not this result is intended by the Federal reserve.” Note that I am taking about the US.

      The US is in some sense different from many places in the world, because falling fossil fuel prices would tend to help it (until the system falls apart). Its energy costs would be low, allowing returns on investment to be higher. The dollar would tend to ride higher relative to other currencies, making the cost of imports cheaper, too. (Of course, exports would be a problem.) Borrowing needs for the US would continue to rise, partly for investment purposes given the low fossil fuel prices and partly because the government needs to borrow, primarily because we are entering a period where payments for Social Security and Medicare will be rising a lot.

      If seemed to me that this would result in the US, at least, ending up with higher interest rates. This would partly be because investments seem to earn more, so businesses will be willing to pay higher interest rates to borrow money, and partly be because of a shortage of buyers of treasuries, if China, Saudi Arabia, and others are out of the market for bonds.

      In this crazy topsy turvy world, it is not as clear what would happen elsewhere. In many places, expected returns may be very low, especially in Saudi Arabia and other countries depending on commodity prices. But interest rates could be much higher because of the increased default risk.

      If the default risk is not higher, it would seem like interest rates could go stay quite low, for countries experiencing deflation. Thus, European nations that are not near default might still have low interest rates.

      So what we might have is a shift in interest rates among countries.

      Alternatively, over the long run at least, the whole world will have a problem with failing banks because of the defaults. In such a situation, there will be few remaining lenders, and the lenders who are willing to give loans will only do so at high interest rates, because of the default risk. So everyone will have high interest rates.

  7. Brad says:

    Fantastic post as usual Gail. I especially appreciate your final comments. Ultimately life itself is a miracle, and as you say, that gives me hope.
    But unfortunately that doesn’t mean that things might not become worse in the short to medium term. I will stick to focusing on improving the things around me that I have an influence over.

  8. Gail is right about 2017 being the end of everything

    Your president elect has started tweeting in caps!!!!!

  9. Yoshua says:

    Thanks Gail !

    The hydrogen atom is the simplest of atoms, but still has an extremely complex design, perhaps it contains the design of the entire universe.

    It is hard to argue that the design of the atom hasn’t been created… or that the dark space isn’t a magnificent creation.

    • Stefeun says:

      The Universe in a Single Atom: The Convergence of Science and Spirituality
      By the Dalai Lama

      “After forty years of study with some of the greatest scientific minds, as well as a lifetime of meditative, spiritual, and philosophic study, the Dalai Lama presents a brilliant analysis of why all avenues of inquiry—scientific as well as spiritual—must be pursued in order to arrive at a complete picture of the truth. Through an examination of Darwinism and karma, quantum mechanics and philosophical insight into the nature of reality, neurobiology and the study of consciousness, the Dalai Lama draws significant parallels between contemplative and scientific examinations of reality.”

      • I suppose the Dalai Lama’s view is not too different from mine. I don’t rule out anything, until I have had a chance to examine it.

        • Stefeun says:

          Of course we shouldn’t rule out anything without a serious motive.
          They had really interesting arguments and views, and I think they didn’t succeed because they weren’t frantic energy burners.
          On the other hand, if they had unlimited amounts of energy at hand, maybe they’d also have forgotten most of their philosophy.

  10. It is not a civilisation that is collapsing, its “just” western capitalism and I resent the notion that capitalism equals civilsation. I also have to argue against the religious footnote here. Dont look to faith in collapse, the “Great Ghost Dance” is a vivid example that it will not help.

    This collapse of capitalism has been coming for a long time and there is no “divine plan” behind it, but only an age old conflict between the haves and the have-nots, and the “haves” have been winning it. In the global scope of things, it is only in their name that the global ressources, our climate, our oceans, our countries, our well being and our values have been ravaged. 10% of the worlds population use 80% of its ressources. This is the only problem we have to solve.

    This collapse is a collapse of our delusion. If you are living in the USA or europe, you will be a part of the problem. Despite your humanitarian, democratic, liberal, western, religious or ethical values, you and your wealth are the problem and this is very frightening. Those who have been the instrument of the haves until now, the neoliberal centre of politics in western democracies lied to you to take away your fears. They said you could keep both, your values and your wealth, but they are obviously failing to successfully lie any longer because in reality there are only three viable ways out of our current dilemma:

    Plan A get rid of your wealth, but keep your values.
    Plan B keep your wealth and get rid of your values.
    Plan C Get rid of both.

    As a “civilisation” that already has collapsed a good example can be found in Syria.
    The Kurdish people in Syria have moved a good way beyond capitalism to a radical new secular, socialist, anarchist, tolerant and ecologically mindful society, that could well serve as a global model for Plan A.

    But in the name of “global economic interests” they will very probably be crushed by Syrian Dectator Assad or Turkish president Erdogan (who is well on his way to becoming a fascist dictator himself), thereby implementing Plan B with help and by proxy of the USA, Europe or Russia.

    All parties in Syriaare cought up in a war with an example of those that instrumentalise the rise of “faith” in times of collapse in the most vicious way, the islamic state, a good example for “Plan C”,

    So there we have three examples of post-capitalist systems in one region where “civilisation” has collapsed already. Plan C The return to barbarism (IS), Plan B totalitarian fascism and imperialism (Erdogan, Assad) or Plan A socialist anarchism (Kurds).

    The have-nots should have an easy time picking the right solution for themselfs (and in Syria many do) but to do so they depend on those that are the problem, those who live in europe or the USA, and it looks like they lean heavily to Plan B.

    This plan B is “collapse for everybody else but us” by getting rid of the last remnants of democracy, freedom and enlightenment to install a new totalitarian, imperialist regime of the very rich that will prolong the further exploitation of this planet and its people by force. This is what we see happening today. and as things get worse, this war of the rich against the poor will escalate. Every fascism had the same steps of such escalation in the past. Its steps are Identification (i.e. make a muslim registry), exclusion (i.e. build a wall), concentration (i.e. lock them up in prisons/concentration camps) and finally extermination (not necessarily kill them in gas chambers, making them drown in the mediterrenean sea or deporting them back into crisis regions has just the same result)

    So there might not be a “devine plan” for the future, but a “devilish” one, but there is also the simple and tested idea of building a peaceful society where we govern ourselves and stop letting greed ruin our society and our planet. But we can only do that by stopping the accumulation of wealth in the hands of the few.

    • Assuming the “peaking” depletion models are broadly correct, since we are not well informed parts of the upper elite circles, the Middle East has very little to offer in terms of energy exports both in crude and natgas into the mid term future, say past ~2025-2040.

      Therefore, the current conflict in Syria and northern Iraq, has been sadly fought over some scraps on the table, it’s basically a turf war of super powers (US, China, Russia, EU) + local affiliates. Specifically, the issue on the table is relative balance of power among those top god players just for the transition period into the next system, whatever that be. The oil/natgas wars today are not about the longer term future in them as both Russia and China are committed into scaling up nuclear program with high degree of spent fuel recycling, basically in the end cooking/transforming the ores and lesser grade unfinished oils that way and leaving very little dangerous waste around, apart from moving people and cargo on electrified high speed rail both in cities and continental wide.

      On the other hand the “western” approach is clearly an insane attempt to live for another day in affluent ways of the past, sacrificing everything like a proper drug addict, since they lack the coherent organizational capacity to focus on such multi decade development project on their own.

      • “Assuming depletion models are true” is a big leap of faith. They omit the need to keep the rest of the economy functioning, so they really aren’t right.

    • I think it is collapse for everyone except the most remote hunter gatherers. Everyone else has been affected by our approach to globalization.

      I don’t think the problem is greed. It is the fact that we require supplemental energy, and in fact a growing supply of supplemental energy. We are programmed to be dissipative structures.

Comments are closed.