Oops! The economy is like a self-driving car

Back in 1776, Adam Smith talked about the “invisible hand” of the economy. Investopedia explains how the invisible hand works as, “In a free market economy, self-interested individuals operate through a system of mutual interdependence to promote the general benefit of society at large.”

We talk and act today as if governments and economic policy are what make the economy behave as it does. Unfortunately, Adam Smith was right; there is an invisible hand guiding the economy. Today we know that there is a physics reason for why the economy acts as it does: the economy is a dissipative structure–something we will talk more about later.  First, let’s talk about how the economy really operates.

Our Economy Is Like a Self-Driving Car: Wages of Non-Elite Workers Are the Engine

Workers make goods and provide services. Non-elite workers–that is, workers without advanced education or supervisory responsibilities–play a special role, because there are so many of them. The economy can grow (just like a self-driving car can move forward) (1) if workers can make an increasing quantity of goods and services each year, and (2) if non-elite workers can afford to buy the goods that are being produced. If these workers find fewer jobs available, or if they don’t pay sufficiently well, it is as if the engine of the self-driving car is no longer working. The car could just as well fall apart into 1,000 pieces in the driveway.

If the wages of non-elite workers are too low, they cannot afford to pay very much in taxes, so governments are adversely affected. They also cannot afford to buy capital goods such as vehicles and homes. Thus, depressed wages of non-elite workers adversely affect both businesses and governments. If these non-elite workers are getting paid well, the “make/buy loop” is closed: the people whose labor creates fairly ordinary goods and services can also afford to buy those goods and services.

Recurring Needs of Car/Economy

The economy, like a car, has recurring needs, analogous to monthly lease payments, insurance payments, and maintenance costs. These would include payments for a variety of support services, including the following:

  • Government programs, including payments to the elderly and unemployed
  • Higher education programs
  • Healthcare

Needless to say, the above services tend to keep rising in cost, whether or not the wages of non-elite workers keep rising to keep up with these costs.

The economy also needs to purchase a portfolio of goods on a very regular basis (weekly or monthly), or it cannot operate. These include:

  • Fresh water
  • Food of many different types, including vegetables, fruits, and grains
  • Energy products of many types, such as oil, coal, natural gas, and uranium. These needs include many subtypes suited to particular refineries or electric power plants.
  • Minerals of many types, including copper, iron, lithium, and many others

Some of these goods are needed directly by the workers in the economy. Other goods are needed to make and operate the “tools” used by the workers. It is the growing use of tools that allows workers to keep becoming more productive–produce the rising quantity of goods and services that is needed to keep the economy growing. These tools are only possible through the use of energy products and other minerals of many kinds.

I have likened the necessary portfolio of goods the economy needs to ingredients in a recipe, or to chemicals needed for a particular experiment. If one of the “ingredients” is not available–probably because of prices that are too high for consumers or too low for producers–the economy needs to “make a smaller batch.” We saw this happen in the Great Recession of 2007 to 2009. Figure 1 shows that the use of several types of energy products, plus raw steel, shrank back at exactly the same time. In fact, the recent trend in coal and raw steel suggests another contraction may be ahead.

Figure 1. World Product Consumption, indexed to the year 2000, for selected products. Raw Steel based on World USGS data; other amounts based of BP Statistical Review of World Energy 2016 data.

Figure 1. World Product Consumption, indexed to the year 2000, for selected products. Raw Steel based on World USGS data; other amounts based of BP Statistical Review of World Energy 2016 data.

The Economy Re-Optimizes When Things Go Wrong 

If you have a Global Positioning System (GPS) in your car to give you driving directions, you know that whenever you make a wrong turn, it recalculates and gives you new directions to get you back on course. The economy works in much the same way. Let’s look at an example: 

Back in early 2014, I showed this graph from a presentation given by Steve Kopits. It shows that the cost of oil and gas extraction suddenly started on an upward trend, about the year 1999. Instead of costs rising at 0.9% per year, costs suddenly started to rise by an average of 10.9% per year.

Figure 1. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel. CAGR is "Compound Annual Growth Rate."

Figure 2. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel. CAGR is “Compound Annual Growth Rate.”

When costs were rising by only 0.9% per year, it was relatively easy for oil producers to offset the cost increases by efficiency gains. Once costs started rising much more quickly, it was a sign that we had in some sense “run out” of new fields of easy-to-extract oil and gas. Instead, oil companies were forced to start accessing fields with much more expensive-to-produce oil and gas, if they wanted to replace depleting fields with new fields. There would soon be a mismatch between wages (which generally don’t rise very much) and the cost of goods made with oil, such as food grown using oil products.

Did the invisible hand sit idly by and let business as usual continue, despite this big rise in the cost of extraction of oil from new fields? I would argue that it did not. It was clear to business people around the world that there was a large amount of coal in China and India that had been bypassed because these countries had not yet become industrialized. This coal would provide a much cheaper source of energy than the oil, especially if the cost of oil appeared likely to rise. Furthermore, wages in these countries were lower as well.

The economy took the opportunity to re-optimize. Part of this re-optimization can be seen in Figure 1, shown earlier in this post. It shows that world coal supply has grown rapidly since 2000, while oil supply has grown quite slowly.

Figure 3, below, shows a different kind of shift: a shift in the way oil supplies were distributed, after 2000. We see that China, Saudi Arabia, and India are all examples of countries with big increases in oil consumption. At the same time, many of the developed countries found their oil consumption shrinking, rather than growing.

Figure 2. Figure showing oil consumption growth since 2000 for selected countries, based on data from BP Statistical Review of World Energy 2016.

Figure 3. Figure showing oil consumption growth since 2000 for selected countries, based on data from BP Statistical Review of World Energy 2016.

A person might wonder why Saudi Arabia’s use of oil would grow rapidly after the year 2000. The answer is simple: Saudi Arabia’s oil costs are its costs as a producer. Saudi Arabia has a lot of very old wells from which oil extraction is inexpensive–perhaps $15 per barrel. When oil prices are high and the cost of production is low, the government of an  oil-exporting nation collects a huge amount of taxes. Saudi Arabia was in such a situation. As a result, it could afford to use oil for many purposes, including electricity production and increased building of highways. It was not an oil importer, so the high world oil prices did not affect the country negatively.

China’s rapid rise in oil production could take place because, even with added oil consumption, its overall cost of producing goods would remain low because of the large share of coal in its energy mix and its low wages. The huge share of coal in China’s energy mix can be seen in Figure 4, below. Figure 4 also shows the extremely rapid growth in China’s energy consumption that took place once China joined the World Trade Organization in late 2001.

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

Figure 4. China energy consumption by fuel based on BP 2016 Statistical Review of World Energy.

India was in a similar situation to China, because it could also build its economy on cheap coal and cheap labor.

When the economy re-optimizes itself, job patterns are affected as well.  Figure 5 shows the trend in labor force participation rate in the US:

Figure 4. US Civilian labor force participation rate, based on US Bureau of Labor Statistics data, as graphed by fred.stlouisfed.org.

Figure 5. US Civilian labor force participation rate, based on US Bureau of Labor Statistics data, as graphed by fred.stlouisfed.org.

Was it simply a coincidence that the US labor force participation rate started falling about the year 2000? I don’t think so. The shift in energy consumption to countries such as China and India, as oil costs rose, could be expected to reduce job availability in the US. I know several people who were laid off from the company I worked for, as their jobs (in computer technical support) were shifted overseas. These folks were not alone in seeing their jobs shipped overseas.

The World Economy Is Like a Car that Cannot Make Sharp Turns 

The world economy cannot make very sharp turns, because there is a very long lead-time in making any change. New factories need to be built. For these factories to be used sufficiently to make economic sense, they need to be used over a long period.

At the same time, the products we desire to make more energy efficient, for example, automobiles, homes, and electricity generating plants, aren’t replaced very often. Because of the short life-time of incandescent light bulbs, it is possible to force a fairly rapid shift to more efficient types. But it is much more difficult to encourage a rapid change in high-cost items, which are typically used for many years. If a car owner has a big loan outstanding, the owner doesn’t want to hear that his car no longer has any value. How could he afford a new car, or pay back his loan?

A major limit on making any change is the amount of resources of a given type, available in a given year. These amounts tend to change relatively slowly, from year to year. (See Figure 1.) If more lithium, copper, oil, or any other type of resource is needed, new mines are needed. There needs to be an indication to producers that the price of these commodities will stay high enough, for a long enough period, to make this investment worthwhile. Low prices are a problem for many commodities today. In fact, production of many commodities may very well fall in the near future, because of continued low prices. This would collapse the economy.

The World Economy Can’t Go Very Far Backward, Without Collapsing

The 2007-2009 recession is an example of an attempt of the economy to shrink backward. (See Figure 1.) It didn’t go very far backward, and even the small amount of shrinkage that did occur was a huge problem. Many people lost their jobs, or were forced to take pay cuts. One of the big problems in going backward is the large amount of debt outstanding. This debt becomes impossible to repay, when the economy tries to shrink. Asset prices tend to fall as well.

Furthermore, while previous approaches, such as using horses instead of cars, may be appealing, they are extremely difficult to implement in practice. There are far fewer horses now, and there would not be places to “park” the horses in cities. Cleaning up after horses would be a problem, without businesses specializing in handling this problem.

What World Leaders Can Do to (Sort of) Fix the Economy

There are basically two things that governments can do, to try to make the economy (or car) go faster:

  1. They can encourage more debt. This is done in many ways, including lowering interest rates, reducing bank regulation, encouraging lower underwriting standards or longer term loans, taking out greater debt themselves, guaranteeing debt of non-creditworthy entities, and finding new markets for “recycled debt.”
  2. They can increase complexity levels. This means increasing output of goods and services through the use of more and better machines and through more training and specialization of workers. More complex businesses are likely to lead to more international businesses and longer supply chains.

Both of these actions work like turbocharging a car. They have the possibility of making the economy run faster, but they have the downside of extra cost. In the case of debt, the cost is the interest that needs to be paid; also the risk of “blow-up” if the economy slows. There is a limit on how low interest rates can go, as well. Ultimately, part of the output of the economy must go to debt holders, leaving less for workers.

In the case of complexity, the problem is that there gets to be increasing wage disparity, when some employees have wages based on special training, while others do not. Also, with capital goods, some individuals are owners of capital goods, while others are not. The arrangement creates wealth disparity, besides wage disparity.

In theory, both debt and increased complexity can help the economy grow faster. However, as I noted at the beginning, it is the wages of the non-elite workers that are especially important in allowing the economy to continue to move forward. The greater the proportion of the revenue that goes to high paid employees and to bond holders, the less that is available to non-elite workers. Also, there are diminishing returns to adding debt and complexity. At some point, the cost of each of these types of turbo-charging exceeds the benefit of the process.

Why the Economy Works Like a Self-Driving Car

The reason why the economy acts like a self-driving car is because the economy is, in physics terms, a dissipative structure. It grows and changes “on its own,” using energy sources available to it. The result is exactly the same effect that Adam Smith was observing. What makes the economy behave in this way is the fact that flows of energy are available to the economy. This happens because an economy is an open system, meaning its borders are permeable to energy flows.

When there is an abundance of energy available for use (from the sun, or from burning fossil fuels, or even from food), a variety of dissipative structures self-organize. One example is hurricanes, which self-organize over warm oceans. Another example is plants and animals, which self-organize and grow from small beginnings, if they have adequate food energy, plus other necessities of life. Another example is ecosystems, consisting of a number of different kinds of plants and animals, which interact together for the common good. Even stars, including our sun, are dissipative structures.

The economy is yet another type of a dissipative structure. This is why Adam Smith noticed the effect of the invisible hand of the economy. The energy that sustains the economy comes from a variety of sources. Humans have been able to obtain energy by burning biomass for over one million years. Other long-term energy sources include solar energy that provides heat and light for gardens, and wind energy that powers sail boats. More recently, other types of energy have been added, including fossil fuels energy.

When energy supplies are very cheap and easy to obtain, it is easy to ramp up their use. With growing supplies of energy, it is possible to keep adding more and better tools for people to work with. I use the term “tools” broadly. Besides machines to enable greater production, I include things like roads and advanced education, which also are helpful in making workers more effective. The use of growing energy supplies allows growing use of tools, and this growing use of tools increasingly leverages human labor. This is why we see growing productivity; we can expect to see falling human productivity if energy supplies should start to decline. Falling productivity will tend to push the economy toward collapse.

One problem for economies is diminishing returns of resource extraction. Diminishing returns cause the economy to become less and less efficient. Once energy extraction starts to have a significant problem with diminishing returns (such as in Figure 2), it is like losing energy resources into a sinkhole. More work is necessary, without greater output in terms of goods and services. Indirectly, economic growth must suffer. This seems to be the problem that the economy has been encountering in recent years. From the invisible hand’s point of view, $100 per barrel oil is very different from $20 per barrel oil.

One characteristic of dissipative structures is that they keep re-optimizing for the overall benefit of the dissipative structure. We saw in Figures 3 and 4 how fuel use and jobs rebalance around the world. Another example of rebalancing is the way the economy uses every part of a barrel of oil. If, for example, our only goal were to maximize the number of miles driven for automobiles, it would make sense to operate cars using diesel fuel, rather than gasoline. In fact, the energy mix available to the economy includes quite a bit of gasoline and natural gas liquids. If we need to use what is available, it makes sense to use gasoline in private passenger cars, and save diesel for commercial use.

Another characteristic of dissipative structures is that they are not permanent. They grow for a while, and then collapse. Later, new similar dissipative structures may develop and indirectly replace the ones that have collapsed. In this way, the overall system is able to evolve in a way that adapts to changing conditions.

What Are the Likely Events that Would Cause the Economy to Collapse?

I modeled the system as being like a self-driving car. The thing that keeps the system operating is the continued growth of inflation-adjusted wages of non-elite workers. This analogy was chosen because in ecosystems in general, the energy return on the labor of an animal is very important. The collapse of a population of fish, or of some other animal, tends to happen when the return on the labor of that animal falls too low.

In the case of the fish, the return on the labor of the fish falls too low when nearby supplies of food disappear, and the fish must swim too far to obtain new supplies of food. The return on human labor would seem to be the inflation-adjusted wages of non-elite workers. We know that wages for many workers have been falling in recent years, because of competition from globalization, and because of replacement of human labor by advanced machines, such as computers and robots.

Figure 6. Bottom 50% income share, from recent Piketty analysis.

Figure 6. Bottom 50% income share, from recent Piketty analysis.

Besides the problem of falling wages of non-elite workers, earlier in this post I mentioned a number of other issues that make the wages of these workers go less far. These include growing government spending, and the growing costs of education and healthcare. I also mentioned the problem of rising debt, and the increased concentration of wealth, as we try to add complexity to solve problems. All of these issues make it hard for “demand”–which might also be called “affordability”–to be sufficiently great to allow commodity prices to rise to the level producers need for profitability.

Prices Play a Very Important Role in the Economy

The pricing system is the communication system of the economy, as a dissipative structure. One use of energy is to create “information.” Prices are a high level form of information.

One big area where prices come up is with respect to the whole portfolio of products needed on a regular basis, which I mentioned earlier (water, food, energy products, and mineral products). In order for the system to continue working, the prices need to be both:

  • Affordable by consumers
  • High enough for producers to cover their costs, including a margin for taxes and reinvestment

Now, in 2017, prices are “sort of” affordable for consumers, but they are not high enough for producersOil companies will go out of business if these low prices persist.

Back in 2007 and 2008, we had the reverse problem. Prices were high enough for producers, but too high for consumers (especially non-elite workers). This is a big part of what pushed the economy into recession.

We noticed back in Figure 1 that quantities of energy products/goods tend to move up and down together. A similar phenomenon holds true for prices: commodity prices tend to rise and fall together (Figure 7).  The reason this happens is because when the world economy is moving swiftly forward (higher wages, more building activity, more debt), demand tends to be high for many different types of materials at the same time. When the economy slows, prices of all of these commodities tend to fall at the same time. Inflation tends to fall as well.

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

If prices cannot rise high enough for producers, it is likely a sign that wages of non-elite workers are already too low. The affordability loop mentioned earlier is not being closed, so prices cannot stay up at a high enough level to maintain production.

Most Modelers Overlook the Fact that the Economy Is an Open System

Most energy models are based on one of two views of the world: (1) fossil fuel energy supply will eventually run short, so we must use it as sparingly as possible; or (2) we want to reduce the use of fossil fuels as quickly as possible, because of climate change. Because of these issues, we want to leverage the fossil fuel energy we have, to as great an extent as possible, with energy that we can somehow capture from renewable sources, such as the solar energy or wind. With this view of the situation, our major objective is to create “renewables” that use fossil fuel energy as efficiently as possible. The hope is that these renewables, together with the actions of governments, will allow the economy to gradually shrink back to a level that is somehow more sustainable.

Implicit is this model is the view that the economy, and the world in general, is a closed system. Our current government and business leaders are in charge; they can make the changes they would prefer, without the invisible hand causing an unforeseen problem. Very few have realized that the economy cannot really shrink back very much; past history, as well as the nature of dissipative structures, shows that economies tend to collapse. The only economies that have at least temporarily avoided that fate have shifted toward less complexity–for example, eliminating huge government programs, such as armies–rather than yielding to the temptation to add ever more complexity, such as wind turbines and solar panels.

The real situation is that we have a here-and-now problem of too low wages for non-elite workers. Commodity prices are also too low. Intermittent renewables such as wind and solar are thought to be solutions, but it is well-known that intermittent renewables cause too-low prices for other types of electricity generation, when added to the electric grid. Thus, they are likely part of the low-price problem, not part of the solution. Temporary solutions, if there are any, are likely in the direction of cutting back on government expenditures and reducing regulation of banks. In fact, with the election of Trump and the passage of Brexit, the economy seems to again be re-optimizing.

We also know that dissipative structures do not shrink back well, at all. They tend to collapse, instead. For example, you, as a human being, are a dissipative structure. If your food intake were cut back to, say, 500 calories per day, how well would you do? If you could not get along on a very low calorie diet, how would you expect the economy to shrink back to a renewables-only level? Renewables that can be used in a shrunken economy are scarce; we don’t have a huge number of trees to cut down. We cannot maintain the electric grid without fossil fuels.

The assumption that the economy is a closed system is pretty much standard when modeling our current energy situation. This occurs because, until recently, we did not understand that the self-organizing properties of inanimate systems were as important as they are. Also, modeling of the economy as a closed system, rather than an open system, makes modeling much easier. The problem is that closed system modeling doesn’t really tell the right story. For a discussion of some of the issues associated with this mis-modeling, see the recent academic paper, Is the increased use of biofuels the road to sustainability? Consequences of the methodological approach.

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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2,573 Responses to Oops! The economy is like a self-driving car

  1. Fast Eddy says:

    Fake Company:


    Should be an obvious short — should not exist — should have already collapsed.

    Analysts should be screaming ‘SELL SELL SELL – this is a piece of shit!!!!’

    But nope….. Strong Buy gets the nod hahahaha…. http://www.nasdaq.com/symbol/clr/recommendations

    And it’s business as usual http://www.marketwatch.com/investing/stock/clr

    Glenn – in light of the above I suggest you stop posting financial ‘analysis’ of shale companies.

    That is even more fake than CNN.

  2. psile says:

    Financial markets are now betting against the future of the planet. This won’t end well

    “…the markets are betting against substantive government action, whether in America or anywhere else in the world, to curb climate change. And they are also betting, indirectly, against the habitable future of the planet”

    But of course. Greedy little monkeys!

    • Fast Eddy says:

      Funny how these stories always end without the punchline…. which is of course — there are no options — we either burn baby burn — and collapse at some point down the road — or we stop or slow burning now — and collapse immediately.

      They always leave that part out…..

      • Volvo740 says:

        I heard they will electrify everything. That would be great for the battery makers when shit lasts best case 5 years.

        • Fast Eddy says:

          Unfortunately that is not possible…. perhaps that’s why they never connect the two lies…. compartmentalize them … that way they just leave it to people to make the assumption … keep it airy fairy … koombaya… dance around the campfire …

          • Volvo740 says:

            Ya.. I was in Roatan, Honduras just last week. Tons of US money flowing in. Still – people begging. Cars are patched together until the end. Try that with a Leaf. There are no Leaf’s there… Same with outboards. Saw no electric ones. Every bit of income revolved around moving something using fuel. Either a tourist, or the food or the water. (No pipes for drinking water). This non-fossil fuel story blows. Big time. Google should start in the third world with their bullshit self driving car. The wheels look small, and that piece of junk will ram into a pothole and take out the steering on day 1.

            • psile says:

              Lol! Awesome real world feedback.

            • Duncan Idaho says:

              Without outboard motors and monofiliment fishing line, they would collapse.

            • Justin Time says:

              I was wondering how much third world population relies of BAU.

              Even a subsistence lifestyle (if you can call it that) in todays world – basic farming and fishing – is probably a lot more dependent on BAU than people realise.

              As Duncan Idahoe pointed out even the simplest of activities require equipment Made in BAU. Without those inputs…

              On the google car… it’s pretty obvious it’s not an all terain vehicle. It’s a study for low speed shuttle in controlled environments.

              We have autonomous rio tinto trucks if you’re looking for something a little more rugged. And autonomous audi racing cars if you want speed.

              Beyond controlled environments autonomous cars will indeed have difficulty navigating pot holes. Even if the pothole’s location is known after the first instance these cars will be faced with the decision of veering away from it – towards the side lane or into the oncoming traffic lane. The same for other obstacles that present themselves suddenly – cats or dogs crossing the road. A plastic bag blowing across the cars trajectory or debris on the road. Staight line breaking may be the safest option but the car will still need to proceed somehow. Progress on this is pretty good but still… would you want to take the risk?

              There’s another thing that’s rarely mentioned and that is our ability to judge a situation that may be a kilometre or two in the distance using common sense – say, a truck or tractor about to pull out of junction. As soon as it’s on our radar we’re planning for it, making adjustments. These cars have limited range radars. I’m not sure about the range on the cameras and the prediction ability of the software.

              We also gain vast common sense knowledge of routes and what to expect from experience. Human drivers communicate with each other in ways that cars cannot. Unless all vehicles were connected in some kind of closed system which seems like overkill.

              The plans for self-driving trucks baffles me. They must be talking about planned routes from A to B from warehouse to local hubs. Surely they can’t mean door to door for supermarket delivery. You only have to see the kinds of locations that trucks have to reach for this to be laughable.

              The talk of replacing cabbies in cities also only goes so far. Cabbie service needs to remain flexible. Most people are able bodied and do not require special assistance. But everyone else benefits from the extra help a cabbie can offer. Getting in and out of car, loading unloading luggage, help into hospital, waiting, changing plans etc etc.

              So the question is, since help is needed a fair amount of trips is it worth making any of the vehicles autonomous? Maybe a mix?

              The same goes for parcel delivery. Instead of going with the obvious optimal solution which is to employ a driver / delivery agent companies are looking at ways to solve the last mile problem. The only way I can see them doing this without overly complicating things is to deliver to local post office drop off points and for cutomers to pick up the goods. There are way too many common sense problems to solve with finding locations, suitable parking, verifying parcel delivery to customer etc etc. You might as well employ the driver.

              If any of this did reach even partial potential we’d have the mother of all unemployment problems on our hands even without the end of BAU. More and more unemployable people being put out to pasture or… something else?

            • Volvo740 says:

              on cabs: Most cab drivers I talk to say they clean out puke at least once every Fri, Sat evening. How does that work in the self driving scenario? Smell Sensor? Automatic cleaning station?

    • Kurt says:

      Betting the opposite way just won’t make you any money.

  3. bluevelvet says:

    Le Pen stripped of parliamentary immunity. They want to send her to prison for posting three videos of ISIL beheading people. Making people aware of ISILs actions is a hate crime. The real agenda is that the election is two months out and a le pen election means the end of the EU.
    Letting the french people make up there own minds is not a option. Desperation after Trump and Brexit is wearing the velvet glove on the iron fist thin.


    • psile says:

      Entrenched clowns everywhere are trying to plug the dyke with all fingers, toes and dicks.

    • xabier says:

      The Le Pen tactic is just a step away from the manner in which the Chinese deal with dissent, and two hops and a skip from the Soviet Union or Germany in the 1930’s.

      The concerted effort to deny the validity of the Trump presidency and to ‘Resist’, the new meme one finds everywhere now, is also deeply disconcerting.

      Denial of the validity of elections is typical of Africa and Latin America, not a properly-functioning republic: it is part of the step down to polarisation and, ultimately, civil war – when parties and their sectarian followers do not wish to enter into any dialogue.

      ‘Hate crime’ laws should be abolished: they are so vague and undefined that they act as a perfect tool for political ends. Rather like ‘intent to sabotage’ in the Soviet Union when the crop failed due to bad weather…..

      Everything is growing much darker, more rapidly than even this pessimist had anticipated.

      • Harry Gibbs says:

        “Everything is growing much darker, more rapidly than even this pessimist had anticipated.”

        I agree, Xabier. Financially, economically, socially, politically, ecologically, climatically – everything appears to be building up to some hellish crescendo.

      • There seems to be “new level of quality” in the French politics in recent days.
        Basically, the Fillon character threatens to call mass demonstrations (well few thousands fans?) for support, blaming the media and judiciary for his character-candidacy assassination, his major sin probably more related to his lite nationalistic/shallow globalist persuasions than the media blitz about usual bit of corruption among the nomenclatura. While the sitting lame duck president urges him not to dare to do that on the grounds calling into question core institutions of the state..

        Feels like the system is seriously shaking, imploding.
        The next months and years both in Italy and France will be significant.

        Should as a result the EU loose even the last bits of the coherent pull, the void will be immediately filled by Russia and China, meanwhile the US considers options how to attempt some sort of withdrawal from the global, yet not loose any advantage by such maneuvers..

        => interesting times

        • Fast Eddy says:

          But those numbers are dwarfed by the amount required to fix Italy’s problems system-wide. There are €360 billion in impaired loans in the Italian banking system, compared to €225 billion in equity on their books. Obviously this is a problem. The FT summed it up nicely in a report last week.

          “There are €360bn of impaired loans in the system, according to the Bank of Italy; €200bn of these are of the worst sort, the non-performing sofferenze. This is a huge number given that there is €225bn in equity on the books of the banking system. And this may understate the rot. Banks close to being bust have reason to mark the value of their assets generously.”


          How Italy’s economy does not just implode is beyond me….

      • I saw a proposal in the paper today, which no one expected to really to be implemented, requiring visas where none had been required before. My impression was that it was for US visitors to Europe, but it could have been the other way around. The proposal was to implement the change in 60 days.

  4. psile says:

    Scientists categorize Earth as a ‘toxic planet’

    “Humans emit more than 250 billion tonnes of chemical substances a year, in a toxic avalanche that is harming people and life everywhere on the planet.
    “Earth, and all life on it, are being saturated with man-made chemicals in an event unlike anything in the planet’s entire history,” says Julian Cribb, author of ‘Surviving the 21st Century’ (Springer International 2017).
    “Every moment of our lives we are exposed to thousands of these substances. They enter our bodies with each breath, meal or drink we take, the clothes and cosmetics we wear, the things we encounter every day in our homes, workplaces and travel.”

    Who’s got my money?

    • Duncan Idaho says:

      Each generation of industrial humans has a mind populated with the images and experiences extant in the environment beginning at birth until death. They may not see as unusual the advancement of the growing pathology which has been occurring in the environment throughout their lives but are rather preoccupied with obtaining the most rewards possible within the paradigm of cancerous growth. Where in the brain will anti-growth, anti-consumption sentiment come from when the very basis of life is the acquisition of energy and resources and reproduction. Can abstractions about the future residing within the neocortex control the primitive desires emanating from the reptilian brain when the neocortex evolved to serve the passions? Even the conformity demanded by the medial prefrontal cortex in social situations, adhering to social taboos, may be inadequate to curb the basic appetites of the reptilian brain. Arranging a culture that condemns being rich and consuming a lot may be impossible since these activities seem to release a lot of dopamine and opioid at the reward centers.

      • Fast Eddy says:

        End of the year — we are not much different from the bacteria in the cup of yeast….

        This is good evidence that we do not choose — we just think we choose…. we are not free….

        Nobody turns down the $20 mil and the private jet…. a few might say no — but deep down they would be burning to get their hands on the loot and live large….

        • Justin Time says:

          So some of us can overide natural urges.

          Is that what you’re saying?

          • jeremy890 says:

            Japanese proverb: “The Gods only laugh wen men pray for wealth!”
            The true meaning of wealth comes from “well being”, and a lot of so called rich are not in that state. Fast Eddy can promote his warped sense of desire…there are those that are the wiser. What is the old fable…a sailor found a stash of gold treasure on a deserted island and was overcome, placed it all in the dingy, weighing it danderously. In a rush to get back he ignored the weather approaching and was caught in a storm, capsizing his vessel. He strapped the chest of gold around his waist and couldn’t untie it….as he sunk downward to the sea floor..did he own the gold or did the gold own him?

            Most likely from John Ruskin…he wrote many and Fast Eddy should pick up a copy of his pondering.

            There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest numbers of noble and happy human beings; that man is richest, who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others”

            Many others “It’s unwise to pay too much, but it’s worse to pay too little.”

            A little thought and a little kindness are often worth more than a great deal of money.


            John Ruskin (8 February 1819 – 20 January 1900) was the leading English art critic of the Victorian era, as well as an art patron, draughtsman, watercolourist, a prominent social thinker and philanthropist. He wrote on subjects as varied as geology, architecture, myth, ornithology, literature, education, botany and political economy. His writing styles and literary forms were equally varied. Ruskin also penned essays and treatises, poetry and lectures, travel guides and manuals, letters and even a fairy tale. The elaborate style that characterised his earliest writing on art was later superseded by a preference for plainer language designed to communicate his ideas more effectively. In all of his writing, he emphasised the connections between nature, art and society. He also made detailed sketches and paintings of rocks, plants, birds, landscapes, and architectural structures and ornamentation.

            • Fast Eddy says:

              I am not saying that money guarantees happiness…..

              What I am saying is that if Bill Gates approached 100 people randomly and offered each of them 20M …. I have $1000 that says every single one of them takes the money.

              In fact if you approached 1000 people … all are saying yes.

              Whether the 20M makes any of them happier is another issue

              Oh … and if you could go back in time and offer a hunter gathered a rifle and 10,000 bullets and showed him how he could take down a deer with it — I have another $1000 that says every single hunter gathered you made the offer to — would take it…

              No different than the bacteria in the cup of yeast….

          • Fast Eddy says:

            I have beaten Mr DNA – I refused to breed — I also informed him that I intend to end him (and me) by running the vessel into a rock cut when the time comes…. he was very unhappy about that when I informed him

            Mr DNA has given up on me — it’s why I am like I am — I suppose…

            Very few are able to beat Mr DNA. He is very powerful. I have smashed him in the face with a hard right — and broken his arm. He knows who the boss is.

            • jeremy890 says:

              We all die, some determine when and where….
              I see Fast Eddie biting the dust this way

            • Volvo740 says:

              Still have to give away all your money to defeat DNA completely. Just let us know when you’ve completed th final task.

            • Fast Eddy says:

              Mr DNA survives — even if I give everything away — in fact that would just make him more difficult to deal with ….. because if he saw a bare cupboard he’d emerge from the complacency of living large —- and take the lash to me….

  5. Fast Eddy says:

    Sentier Research reported today that household incomes rose, but not as fast as inflation: and so real median household income (adjusted for inflation) edged down in January to $58,056 from $58,189 in December and from $58,635 in January 2016.

    That’s a drop of 1% year-over-year.


  6. Kanghi says:

    Wagon fast collapse seems to be getting more and more supporting elit members. It feels like we are on a roller coaster hill and on the down is the shark pool.


    • psile says:

      I love the obligatory hopium at the end,

      But it’s not all bad news, Turchin says. Awareness of our problems could help us stop them before they pitch us over the edge.

      “The descent is not inevitable,” he writes. Perhaps “we can avoid the worst — perhaps by switching to a less harrowing track, perhaps by redesigning the rollercoaster altogether.”

      We’ve known about these problems, actually predicaments, for decades know, but chose to stick our heads in the sand. Now, who’s got my money?

      • Fast Eddy says:

        Is it not amazing how great minds can’t take the heat in the kitchen…..

        • psile says:

          Biologically we’re just not wired for it…


          • Harry Gibbs says:

            Voltaire – “The human brain is a complex organ with the wonderful power of enabling man to find reasons for continuing to believe whatever it is that he wants to believe.”

          • Tim Groves says:

            Flaubert – “To be stupid, selfish, and have good health are three requirements for happiness, though if stupidity is lacking, all is lost.”

  7. Harry Gibbs says:

    Saudi and Russia not sticking to their quotas, it would appear. Colour me astounded.

    “According to Clipper data available via oilprice.com the Saudis are looking to supplement the lost revenues due to this production cuts by increasing shipments of finished products. In December, Saudi Arabia’s refinery output reached 2.96 million barrels per day, the highest level in almost 15 years. Saudi Arabia’s exports of products in January this year was 300,000 barrels more than it was in 2015 and about 100,000 barrels more compared to the same month of 2016. The gap has widened further in February.

    “Similar trends are likely to get seen in other countries within the OPEC cartel.”


    “Oil prices fell more than 2 percent on Thursday after Russian crude production remained unchanged in February, showing weak compliance with a global deal to curb supply to tighten the oversupplied market.

    “Russia’s February oil output was unchanged from January at 11.11 million barrels per day (bpd), energy ministry data showed, with cuts remaining at 100,000 bpd or just a third of the levels pledged by Moscow under the agreement with the Organization of the Petroleum Exporting Countries.”


  8. Kurt says:

    I predicted last year that India would be the next large periphery country to collapse and here they go


    Not even felt here in the core. Not so sure about how “connected” the world is.
    I’m thinking Mexico goes next.

    • There is very high probability, this “demonetization scheme” has been advice to them by ever friendly expertly entities like WB/IMF/BIS .. What a nice Frankenstein experiment of them yet again..

    • Duncan Idaho says:

      I was thinking Pakistan first.
      I’m currently living in Mexico— we shall see.

    • Bergen Johnson says:

      I think the problem is the world is over extending on money generated by CB’s to keep economies growing, and they can see the writing on the wall, that cash is too physical, meaning it conveys a sense of monetary value that digitized funds do not, presenting a greater risk of inflation. If they can get rid of cash it serves three purposes; 1) With all money going to digital, people will not be so aware of the mountains of money being added to the economy via QE to push growth, 2) If and when inflation skyrockets there won’t be a run on the banks, and 3) Greatly reduces black market activity because substitute forms of barter are more difficult to agree on. So it’s easy to see how there is a push to get rid of cash. Give it another 5-10 years and no one will be asking for spare change, because there won’t be any in circulation because banks won’t accept it.

    • Glenn Stehle says:


      Mexicans have suffered far more under NAFTA than have los Estadounidenses.

      While US workers have lost perhaps 10% of their purchasing power since NAFTA was implemented, Mexican workers have lost over 50%.

      Mexico’s Wage Gap Charts

      Mexican workers now have some of the cheapest wages in the world.

      One of the things that has allowed the Mexican ruling class to suppress the disent caused by the falling wages, and to stay in power (there are various), is the high level of murder, torture, and repression of political dissent practiced in Mexico. This is all backed to the hilt, of course, by the US deep state (CIA, DEA, etc.) which works hand-in-glove with not only Mexico’s criminal formal state, but also Mexico’s burgeoning nominal criminal underworld (e.g., drug lords).

      One of the main instruments that the U.S. has used to promote murder, torture and political oppression in Mexico is the Merida Initiative, explained in the following two articles. As the articles explain, the Plan Merida is nothing more than a way for the United States to intervene militarily into the internal political affairs of Mexico — spreading murder, fear and terror as a form of social and political control — under the guise of the “War on Drugs.” And as Laura Carlsen explains, Hillary Clinton was all in favor of this.

      Un Plan Colombia para México


      SOAW Delegation Calls for Suspension of Plan Merida

      As the latter article linked above points out, Peña Nieto sacrificed any moral high ground Mexico might have when he agreed to implement the Programa Frontera Sur, which did the dirty work of the United States in stemming the flow of immigrants (remember the humanitarian crisis the flood of children arriving from Central America caused the US back in 2014?) from the south towards the United States.

      Remember this?

      This was the response of the Obama administration:

      United States Embassy Statement

      And here is how it has played out in Mexico:

      Cifra récord de migrantes detenidos en México; casi 200 mil al cierre de 2015: SG

      • Glenn Stehle says:

        For a heart wrenching portrayal of the crueilty, violence and brutality that the United States, working hand-in-glove with Peña Nieto, unleashed against the children of Central America trying to make their way to the United States, you might want to try to get a copy of this movie.

        The mistreatment of Central American immigrants crossing Mexico has been a national scandal of major proportions in Mexico. The Mexican people, led by the more liberal factions of the Catholic Church, are not at all in favor of this.

        La Jaula De Oro – Official Trailer


        Película no recomendada a menores de 12 años.
        Narra de forma realista la historia de tres jóvenes guatemaltecos, menores de edad que, como miles de personas, abandonan su aldea para intentar atravesar la frontera mexicana en tren y buscar un futuro mejor lejos de sus raíces en Estados Unidos. Obligados a emigrar, emprenderán un peligroso viaje, del que se conoce su origen, pero no su destino. Por el camino, además, conocen al indio Chauk, el cual no habla español pero que se une a ellos en su travesía.

        El camino está lleno de nuevas experiencias, amistades, solidaridad, miedo, dolor y muchas injusticias. El principal objetivo de los protagonistas es encontrar un hueco en los Estados Unidos y hacerse con el deseado sueño americano que muchos, antes que ellos, han buscado. Los jóvenes muy pronto se verán obligados a enfrentarse a la dura realidad y a centrarse en un único objetivo: seguir adelante.

        Película dirigida por Diego Quemada-Díez, que se estrena con este largometraje como director de cine.


        • The fundamental problem everywhere is providing enough resources for everyone. As I understand it, Central Americans have been even poorer than Mexicans. If more poor Central Americans are added to the Mexican population, I am sure that some fear the standard of living will be brought down (or low wage jobs will be taken by the foreigners). We seem to see this story play out everywhere. Keeping the immigrants out would seem to be better, at least from some Mexican perspectives.

          The issue is basically one of too many people for resources. The Catholic Church has not been helpful on birth control, either.

        • Joel says:


          “The Mexican people, led by the more liberal factions of the Catholic Church, are not at all in favor of this.”
          IMO the Church will have no problem getting over this, they have outstanding resilience and sort of a blindness to collateral damage on their part. Have researched the history of the organization quite well years ago as well the development of the book.

          I did see we have a copy of the movie in the library system, will keep it in mind. Thought of your comment when browsing news on RT and saw some recent news related to the church. https://www.rt.com/news/379365-mass-infant-grave-ireland-catholic/
          “‘Mother and Baby’ facilities housed women who became pregnant outside of marriage and were ostracized by Catholic society as a result. The sites were infamously cruel environments, where mothers worked tough manual labor jobs for little or no pay and only permitted to see their children for a few hours each week.”

          Anyway I guess we must just keep on fracking to hold that price down, they just don’t drill em like they used to.
          We need a chart on pipe laid per year for the last 5 decades to spot where the trend is heading.

          Best Regards,

          • Glenn Stehle says:


            The Catholic Church has a big tent, so you get everything from defenders of Central American immigrants like Father Solalinde and defenders of human rights like Miguel Concha to the defenders of pedophiles and Mexico’s criminal formal state like Cardinal Norberto Rivera, the archbishop of Mexico City.

            En México exterminamos a los migrantes, es una ruta forense: Solalinde

            Iglesia católica elabora plan de trabajo para la protección de migrantes / Vianey Esquinca

            Norberto Rivera, el MAYOR PEDERASTA en México

            But before you do a blanket condemnation of the Catholic Church, you might want to consider what the Protestant theologian Reinhold Niebuhr wrote avout the Church in the twilight years of his life:

            I still remain uncertain whether the relaxation of the polemical attitudes of my youthful zest for varioius causes represents the wisdom of old age, the disengagement of a spectator, or an increasing awareness of the strange mixture of good and evil in all the causes and purposes that once had prompted me to carry the banners of…Protestantism against Catholicism.

            I now hope that the unpolemical attitudes of my old age and dependence may have had their roots in experience, rather than in the irresponsiblity of weakness and lack of engagement.

            My early polemical attitude toward the Catholic Church had been modified when, in the days of the New Deal social revolution, the Catholic Church revealed that it was much more aware of the social substance of human nature, and of the discriminate standards of justice needed in the collective relations of a technical culture, than was our individualistic Protestantism. But my view from the sidelines of illness made me more fully aware of the impressive history of the Catholic faith, and of its sources of grace and justice, which even our Reformation polemics cannot obscure.

            — REINHOLD NIEBUHR, A View of Life from the Sidelines

            • Joel says:


              Thanks for the feed back, I did not intend a blanket condemnation of the big tent.

              There are good and bad under many tents. I was indoctrinated in an offshoot tent, though gave up on it as they could not answer questions to my satisfaction. Many good people from there as well. Just had a hard time with the fact that the founder of this sect burned one of his pen pals at the stake over a disagrement of his views 18 years earlier. He really could hold a grudge I guess.

              Some wiki stuff on the early years:
              The founder dude https://en.wikipedia.org/wiki/John_Calvin
              “Following his return, Calvin introduced new forms of church government and liturgy, despite opposition from several powerful families in the city who tried to curb his authority. During this period, Michael Servetus, a Spaniard regarded by both Roman Catholics and Protestants as having a heretical view of the Trinity, arrived in Geneva. He was denounced by Calvin and burned at the stake for heresy by the city council.”

              This guy was a doctor https://en.wikipedia.org/wiki/Michael_Servetus
              “Calvin sent a copy of his own book as his reply. Servetus promptly returned it, thoroughly annotated with critical observations. Calvin wrote to Servetus, “I neither hate you nor despise you; nor do I wish to persecute you; but I would be as hard as iron when I behold you insulting sound doctrine with so great audacity.” In time their correspondence grew more heated until Calvin ended it.[21] Servetus sent Calvin several more letters, to which Calvin took offense.[22] Thus, Calvin’s antagonism against Servetus seems to have been based not simply on his views but also on Servetus’s tone, which he considered inappropriate. Calvin revealed the intentions of his offended pride when writing to his friend William Farel on 13 February 1546:

              “Servetus has just sent me a long volume of his ravings. If I consent he will come here, but I will not give my word; for if he comes here, if my authority is worth anything, I will never permit him to depart alive ”

              I did notice we are heading up to Fracking 3.0 now and will look forward to more details.

            • Fast Eddy says:

              Fracking 3.0 — Breaking News: It was announced this morning that Chesapeake oil has secured the rights to a Shale Dowsing Stick. It was reported that this stick can find huge deposits of shale and when placed over a play the oil just shoots to the surface all by itself.

              All conventional Oil Majors have announced that they are effective immediately shuttering all operations. In a joint statement the CEO’s said: We are obsolete. This new technology will deliver trillions of barrels of very cheap oil to global markets and keep the world ticking along for well into the next century.

              I know it sounds too good to be true…. but believe it….

        • It is the destiny of Latin America to suffer so USA can grow richer and enjoy a higher standard of civilization.

          • Fast Eddy says:

            You got that right. Let us revisit ‘The Way the World Works’

            – The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will

            – Resources are finite and therefore ownership is a zero sum game

            – The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status

            – Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources

            – Competition always exists (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations

            – Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources

            – Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.

            – One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)

            – As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)

            – And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.

            – Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.

            – Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.

            – But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.

            – But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.

            – Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.

            – So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.

            – They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)

            – Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.

            – Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I

            – In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.

            – Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….

            – Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….

            – As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them

            – Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!

            Whatever it Takes = Whatever it Takes —- killing babies is BAU…

            It’s good that we invented spent fuel ponds — no?

            We are very difficult to exterminate but this just might do it…. then the planet can be rid of the cancer … heal… then start over

          • Glenn Stehle says:

            Fast Eddy,

            That sounds like a screed right straight out of the New Atheist manifesto.

            Man, however, does not live by egoism alone, even though of course some men do. We have a word for these people. We call them psychopaths.

            For a far differnt point of view, there’s Peter Turchin’s excellent book, War and Peace and War.

            The chapter titled “The Myth of Self Interest” is especially germane in debunking your highly reductionist, simplistic view of mankind and the human condition.

            • Fast Eddy says:

              Now here is a really amusing story …

              Back in the day when I was trapped in the matrix (like you are) — I used to read the New York Times — I thought it was the cats ass. I was vehemently against US foreign policy — their wars on democracy blah blah blah … I was such a wonderful well-informed LibTARD.

              I used to engage in heated debates with friends – many of whom are highly educated intelligent conservatives — who believe that the that the world is a nasty place and that although the US does bad things (like Abuh Graib) but for the most part the country is a force for good in the world…

              But then one day after The Facts intruded — I changed course — and I wrote my Manifesto.

              And I recently was engaged on geopolitics by one of my ‘conservative’ friends — and we got to chatting …

              And I said you know what — I really don’t care about any of this — I am not interested in the bullshit rationale that we are fed about why we are in Ukraine — and Syria — and Libya….

              What it comes down to is they have what we need — and if they will not give it to us — we need to kill them. We need to destroy them. If that means dirty tricks like blowing up airliners or hurling poison gas amongst women and children — then we MUST do it.

              Because the meanest dog wins. And the meanest dog does not play by the rules. Rules are for losers.

              I want to be on the winning team — so I am good with whatever our leaders do to make sure I live large.

              To put it mildly … he was shocked by my comments.

              He should not be – we are in the same camp — the only difference is he needs moral rationale to justify what our dog does.

              He no doubt believes in good and evil.

              I believe in interests.

              And I am a big fan of Henry Kissinger (I used to think him the devil on earth)

              Here’s a tip — you know you are right in an argument when you once held the same position as the person you are arguing with — but later realized you were wrong.

              As you come out of the matrix this happens frequently — but as you refine your positions — the incidents of being wrong become fewer and fewer.

      • Glenn Stehle says:

        And of course all this brutal US intervention into the Mexico’s internal politics is inextricably intertwined with the US’s desire to appropriate Mexico’s vast fossil energy resources, as this recent article in one of Mexico City’s daily explains:

        El patrioterismo reaccionario y las ZEE

        The hidden hand — the deus absconditas — behind all of this was none other than Hillary Clinton and the Obama administration. Needless to say, the United States is the greatest empire to ever grace the face of the earth, and empires do what empires do, that is until they collapse.

        Estados Unidos es co-autor de la Reforma Energética de EPN


        Hillary Clinton, ex Secretaria del Departamento de Estado y precandidata a la Presidencia de Estados Unidos, encabezó desde Washington un amplio equipo que ayudó al gobierno de México a mentir públicamente durante un tiempo mientras preparaba la Reforma Energética para abrir este sector estratégico a las grandes compañías internacionales, reveló hoy DeSmogBlog, uno de los sitios de información especializada más importantes del mundo.

        Auxiliado por la Embajada de EU en México, el Departamento de Estado impulsó primero que Petróleos Mexicanos (Pemex) se abriera a las compañías internacionales de petróleo y gas mediante el acuerdo transfronterizo del Golfo de México, con Felipe Calderón. Y luego trabajó para la Reforma Energética del Presidente Enrique Peña Nieto.

        Así lo revelan los correos electrónicos de Clinton desclasificados hace apenas una semana y recuperados por DeSmogBlog.

        “Correos electrónicos publicados el 31 de julio por el Departamento de Estado revelan más sobre el origen de los esfuerzos para la Reforma Energética en México […]. Confirman que el Departamento de Estado de Clinton ayudó a abrir a la empresa estatal Pemex, que monopolizaba la industria petrolera y del gas en México, a las compañías internacionales del petróleo y el gas. Dos de los coordinadores que ayudaron a hacer que esto sucediera, ambos empleados directamente por Clinton, ahora trabajan en el sector privado y pueden beneficiarse económicamente de la Reforma Energética que ayudaron a crear”, publica una exclusiva del periodista Steve Horn.

        Menciona que estos correos ofrecen la oportunidad de contar la historia más profunda del papel que tuvo el Departamento de Estado liderado por Clinton y otros poderosos actores en la apertura de México para los negocios internacionales en el sector energético mexicano….

        Los correos electrónicos hechos públicos revelan cómo el Departamento de Estados Unidos ayudó al gobierno mexicano a ir tejiendo una cadena de simulaciones para facilitar la llegada de empresas extranjeras.

        • Who benefits from oil under the ground is a good question. Mexico needed the revenue from Pemex badly. It left Pemex with so little revenue that it could not itself even maintain its refineries properly, much less take on major new E&P projects. If someone was going to extract the oil, it would almost certainly have to be outsiders. I can very well imagine that Hillary Clinton was involved in getting this set up, so that the US could have a piece of the “action.” Of course, with prices where they are now, there are no profits for anyone. So dividing them up is not a question. I expect profits all depend on the iffy prospect of oil prices going a fair amount higher.

          These stories have many sides to them. If prices stay where they are, or go lower, I expect the oil will stay in the ground, regardless of what provisions Hillary put in place.

      • I don’t know that I have a good answer for the problem. China used a whole lot of debt to build a whole lot of efficient new factories. These, plus workers willing to work for fairly low wages, have been a pull on the market as well. Also, China had cheap coal to operate its electricity system, and workers used coal, keeping their income needs low.

        The reason that Mexico’s currency has been falling no doubt relates to its problems with oil and gas extraction. It depends almost entirely on oil and gas. Charts from here. http://mazamascience.com/OilExport/

        Mexico Oil

        Mexico has seen its oil exports falling. This had been a major source of tax revenue. In the past few years, oil prices have been low as well, making the situation worse. It no doubt would like to increase internal use of oil, but this leaves less for exports, and thus for taxes.

        With respect to natural gas, Mexico has been ramping up its use of natural gas, but this comes as an import.

        Mexico Natural Gas

        If we see total energy consumption, we see it has been flat to falling. Depending so heavily on oil, this almost has to be the case. It is too expensive an energy mix to sell well on the world market.

        Mexico energy consumption

        Apparently, industrial electricity prices have been higher than in the United States. One of the issues is who pays the high cost of transmission. According to the EIA http://www.eia.gov/todayinenergy/detail.php?id=26932

        One of the main drivers of the recent reforms is the large difference between the costs of producing electricity and the rates retail customers pay. Mexico heavily subsidizes its retail electricity rates; by some estimates, the cost of supplying residential customers in Mexico is more than double the price that CFE charges them. Officials hope that restructuring the power industry will reduce the costs of producing electricity, lowering or eliminating the government subsidies that maintain low retail rates.

        If retail rates are artificially low, no doubt industrial rates are high. High electricity prices makes it harder to produce output efficiently, and thus less to pay workers.

        I wonder if the world market sees Mexico as a dead end. It has a limited supply of oil and gas production, which seems to be falling. My impression has been that the Trump wall is being built, out of concern that these problems will eventually lead to a lot of people needing to leave Mexico to move elsewhere. Mexico has to raise the oil price it charges citizens, which it has subsidized for a long time. This is part of what has allowed reasonable living conditions for a low price. But this subsidy can’t last. I don’t know if this subsidy has indirectly affected the industrial energy prices. If it has, this would be another reason why it is hard to get wages to compete with world levels.

        • Glenn Stehle says:

          The Mexican government just implemented massive increases in gasoline prices. Mexicans now pay about $1 usd per gallon more than what people in the U.S. pay.

          This is what is popularly known in Mexico as the Gasolinazo.

          The move has been met with pervasive public oppositon, protests and marches across the country, some of them violent.

          The military was called in to quash the protests and demonstrations. This should make George Bush and Hillary Clinton very happy, because the militarization of Mexico is what they pushed for so aggressively.

          Video: Campesinos protestan en Reforma contra gasolinazo

          Crecen las protestas contra el gasolinazo

          Apoyan soldados protestas contra el gasolinazo

    • I agree that India is now a worry. See also the charts on Mexico that I posted in response to another comment.

    • The only countries which do matter are USA, China, Japan and some Western European nations. The rest of the world can go to hell but no one will even blink.

  9. dolph says:

    If everything is fake and is supposed to crash, then why do the markets keep rising?

    If your answer is, people are delusional, that might be correct, but delusion is a powerful force, correct? So even if it is delusion, it results in actual behavioral changes, and thereby changes in valuations – what we believe something is worth.

    Which goes right back to the problem of the individual human being, vs social consensus. It simply doesn’t matter what you believe. It does matter what the herd believes, and it matters what they do.

    • psile says:

      The herd is right, until it’s not.

    • The print fest of the FED/BoJ/ECB/BoE/China/.. sloshed around, some part out of the aggregate stream was redirected towards stock markets. So no surprises there.
      And as always the retail mania is the latest proverbial drop rushing in just before the correction/crash, when the insiders are already out.

      Some people are better than others at sniffing these trails, e.g. the housing bubble has been called, similarly the reflation of markets post 2009 was predicted as good opportunity, recall the short squeeze on TSLA was it ~700% up afterwards?, then came the “triangle of doom” and the oil price massacre again predicted by some, ..

      Simply, if you score at least once or twice per such cycle (some could perform even better) and do it for few generational cycles, accumulation, you are suddenly sitting on a mega billionaire chair, .. It’s not a mystery.

    • Fast Eddy says:

      Ayn Rand — ‘We can ignore reality, but we cannot ignore the consequences of ignoring reality.’

      Now Dolph – the stock market is up 87% since 2011 — but corporate profits are flat…

      The delusional can claim that is completely normal…. what cannot go on forever … will stop though.

      Delusional people may think this can go on forever… they may truly believe it… but it cannot.

      It will stop. Reality wins. Physics win. Math wins. Logic wins. Facts win

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