Raising Interest Rates Can’t End Well!

The Federal Reserve would like to raise target interest rates because of inflation concerns and concern that asset bubbles are forming. Part of their concern seems to arise indirectly from the rise in oil prices, relative to their low level in early 2016.

Figure 1. WSJ figure indicating likely reasons for rate hike.

A finite world does not behave the way most modelers expect. Interest rates that worked perfectly well in the past don’t necessarily work well now. Oil prices that worked perfectly well in the past don’t necessarily work well now. It seems to me that raising interest rates at this time is very ill advised. These are a few of the issues I see:

[1] The economy is now incredibly dependent upon rising debt to prop up its spending. The pattern of total debt to GDP for the United States is shown in Figure 2.

Figure 2. United States’ debt to GDP ratios based on Federal Reserve Z1 data and BEA GDP data. The red line represents the increase over the latest three years.

There was a huge increase in debt in the period leading up to the 2008 crash. Every year between 2001 and 2008, the increase in debt was greater than four times the increase in GDP. In fact, for some years in that period, more than $8 of debt were added for every dollar of GDP added.

We now seem to be starting a new run up in debt. In 2015, the amount of debt added was $2.5 trillion ($66.1 trillion minus $63.6 trillion), while the amount of GDP added was only $529 million. This indicates a ratio of over 4.7 for the single year of 2016. (Figure 2 shows only three-year averages, because of the volatility of amounts.)

[2] The vast majority of the debt run-up since 1981 (Figure 2) seems to have been enabled by falling interest rates (Figure 3). Given how dependent we are now on large increases in debt to produce GDP, it would seem to be dangerous for the Federal Reserve to raise interest rates. 

Figure 3. US Federal Bonds 10 year interest rates. Graph produced by FRED (Federal Reserve Economic Data).

With falling interest rates, monthly payments can be lower, even if prices of homes and cars rise. Thus, more people can afford homes and cars, and factories are less expensive to build. The whole economy is boosted by increased “demand” (really increased affordability) for high-priced goods, thanks to the lower monthly payments.

Asset prices, such as home prices and farm prices, can rise because the reduced interest rate for debt makes them more affordable to more buyers. Assets that people already own tend to inflate, making them feel richer. In fact, owners of assets such as homes can borrow part of the increased equity, giving them more spendable income for other things. This is part of what happened leading up to the financial crash of 2008.

The interest rates that the Federal Reserve plans to change are of a different type, called “Effective Federal Funds Rate.” These also hit a peak about 1981.

Figure 4. US Federal Funds target interest rate. Graph produced by FRED (Federal Reserve Economic Data).

[3] The last time Federal Funds target interest rate was raised, the situation ended very badly.

Figure 4 (above) shows that the last time Federal Reserve target interest rate was raised was in the 2004-2005 period. This was another time when the Federal Reserve was concerned about the run-up in food and energy prices, as I mention in my paper Oil Supply Limits and the Continuing Financial Crisis. The higher target interest rate was somewhat slow acting, but it eventually played a role in bursting the debt bubble that had been built up. In 2008, the amount of outstanding mortgage debt and consumer credit started falling, and oil prices fell dramatically.

It is ironic that the US government is again trying to bring down food and energy prices, when they are at a price level similar to the price level when they tried this approach the last time.

Figure 5. Monthly average Brent oil prices, with notes regarding when the Federal Reserve changed its target interest rate.

The Federal Reserve looks at its favorite metrics, PCE inflation and PCE inflation excluding food and energy. From this high-level view, it is likely that they have no real understanding of exactly what energy price problems are causing the strange result. With this high-level view, they do not realize that a big contributor to the rising costs is the increase in oil prices between the January – March 2016 period, when they were under $40 per barrel, and recent prices, which were above $50. (They are now back below $50 per barrel, but this would not be apparent from the metric.)

When this high-level view is used, it is easy to miss how low energy prices are today, relative to the needs of energy producers. Most people who have been following what is happening in the oil industry know that prices are not high, relative to the prices needed for profitability. Even if some US companies claim to be profitable at $50 per barrel, it is clear that, in general, the industry cannot withstand prices as low as they are today. At the current price level, investment is too low.

Part of the problem is that oil exporters need higher prices if they are to obtain adequate tax revenue to fund their programs. For example, Saudi Arabia has found that because of its falling tax revenue, it needs to borrow money to maintain its programs. This is a big change from being able to set aside money in a reserve fund, out of excess tax revenue. This is another place where the shift is toward more debt.

[4] The pattern the Federal Reserve seems to want to follow is the 1981 model, in which temporary high interest rates seemed to force energy prices down for a long time.

If we look at oil prices compared to US wages per capita (dividing total wages by total population), we find that oil “affordability” was at a low point in 1981. We saw previously in Figures 3 and 4 that interest rates were raised to a very high level at that time. The gray stripes in Figures 3 and 4 indicate that a recession followed.

Figure 6. Average barrels of crude oil affordable by US residents, calculated by dividing the average per capita wages (calculated by dividing BEA wages by population), by EIA’s average Brent oil price for each year.

Figure 6 shows that after interest rates fell, affordability rose until 1998. To a significant extent this was the result of falling prices, but it also was the result of a larger share of the population working, and thus contributing to rising wages.

There were many things that allowed this benevolent outcome to happen. One was the fact that we already knew about available oil in the North Sea, Mexico, and Alaska. When this oil came online, oil prices were able to drop back to a much more affordable level. It is very doubtful that shale oil could play a similar role today, especially if it is likely that higher interest rates will drop oil prices from today’s $50 per barrel level.

One thing that helped improve affordability in the post-1981 period was improved gasoline mileage. There were also cutbacks in oil use for home heating and for electricity generation.

Figure 7. Average on-road fuel efficiency by Sivak and Schoettle, “On-Road Fuel Economy of Vehicles in the United States: 1923-2015,” http://www.umich.edu/~umtriswt/

Figure 7 suggests that the earliest changes in fuel economy provided the biggest savings. In fact, overall savings after 1993 are quite modest.

One factor that helped reduce oil consumption both in the 1970s and in the 2008 to 2013 period was high prices. Now that oil prices are lower, we cannot expect as good a result. If oil prices drop back further, there is even less incentive to conserve.

[5] Adjustments made using Quantitative Easing (QE) (a way of producing low interest rates) appear to have had a rapid, significant impact on oil prices.  

In late 2008, after oil prices had crashed, the US Federal Reserve implemented QE. Using QE created very low interest rates, which seem to have had an impact on world oil prices.

Figure 8. Monthly Brent oil prices with dates of US beginning and ending QE.

Clearly, lower interest rates encourage more borrowing, and discontinuing a program that gives very low rates would tend to have the opposite impact. Thus, we would expect the direction of the oil price changes to be similar to those shown on Figure 8.

One hypothesis regarding the rapid impact of QE was that it encouraged borrowing in US dollars, in order to purchase bonds in other currencies with higher interest rates (“carry trade”). When QE ended, the carry trade was cut off, reducing investment in countries with higher interest rates. Instead, there was more interest in investing in the US. These changes led to the US dollar rising relative to many other currencies. Since oil is priced in US dollars, these shifting relativities made oil more expensive in non-US dollar currencies.  Thus, the affordability of oil declined for buyers outside the US. It was this decline in affordability outside the US that brought down oil prices. Figure 9 shows the shift in currency levels when the US discontinued QE in 2014.

Figure 9. US Dollar vs. Major Trade Weighted Currencies. Chart created by FRED (Federal Reserve Economic Data).

Increasing Federal Reserve target interest rates would seem to have the effect of further raising how high the US dollar floats compared to other currencies. If this happens, we would expect lower oil prices, and more problems with excessive supply.

[6] The way increased lending seems to move the economy along is by using time shifting to provide a “layer” of future goods and services that can be used as incentives for businesses to invest in making goods and services now.

The problem when making goods of any kind is that resources need to be purchased and workers need to be paid, before the finished product is available for sale.

Figure 10. Image created by author showing how goods and services are created. It also needs a “government services sector,” but it didn’t fit easily on the slide.

As a result, at the time goods and services are produced, there aren’t enough already-created goods and services to pay all of those who have contributed to the effort of making the goods and services. To work around this problem, debt or a product similar to debt is needed to pay some of those contributing to the process of creating future goods and services.

One way of thinking about the situation is that an increase in debt during a time period adds a layer of future goods and services that can be distributed to those contributing to the effort of making the goods and services (Figure 11). This significantly increases the amount of goods and services to be distributed above the level that would be available on a barter basis, based on goods that have already been produced.

Figure 11. Figure by author showing how the “increase in debt” effectively adds another layer of goods and services that can be distributed. (As with Figure 10, this chart should include a category for government services as well.)

[7] The spending ability of US citizens has been lagging behind, even with the huge amount of debt being added to the economy. If the Federal Reserve raises interest rates, it will tend to make the situation worse.

The biggest expenditure for most households is housing costs, either for an apartment or a new home. As with oil, we can compare affordability by comparing prices to per capita wages (total US wages/total population). On Figure 12, one amount shown is the median rent for unfurnished apartments in the US, based on US Census Bureau data; the other is The People History’s estimate of “new home” prices over the years. In general, affordability has been falling. Figure 12 shows that the fall in affordability of apartment rent is a relatively recent phenomenon. The fall in affordability of home prices is a long-term phenomenon, no doubt enabled by falling interest rates since 1981.

Figure 12. Comparison of new home prices from The People History and median non-subsidized rental asking prices based on US Census bureau data. These are divided by (total US wages/ US population) from the US BEA. The indexes are different for home and apartments, chosen so that two would show separately on the chart. If amounts shown are falling over time, housing is becoming less affordable.

Another product whose affordability is of interest is electricity. Electricity is an energy product whose affordability is important, because it is used in residential, commercial, and industrial locations. The affordability of electricity tends to be less volatile in pricing than oil, whose affordability was shown in Figure 6. Because the pricing of electricity is more stable, I have shown the affordability of electricity at three different spending levels:

  • Per Capita Wages – Total US wages divided by total US population.
  • Per Capita DPI – Total Disposable Personal Income (DPI) divided by total US population. Disposable Personal Income includes government transfer payments (such as Social Security and unemployment payments), in addition to wages. It also includes “proprietors’ income,”which is a relatively smaller amount.
  • Per capita DPI+Debt – Total Disposable Personal Income, plus the increase in Household Debt during the year, divided by population.

Figure 13. Quantity of electricity that an average worker could afford to buy, using three different definitions of income. (Average wages are based on BEA total salaries and wages, divided by BEA total population, and Disposable Personal Income is defined similarly, using BEA data. DPI plus debt includes the change in Household Debt, from the Federal Reserve’s Z1 report, in addition to DPI in the numerator.)

Based on Figure 13, electricity was becoming more affordable until 2001 on a wages-only basis. Since then, its cost has been relatively flat.

On a DPI basis, electricity was considerably more affordable until 2004, after which it declined, and then rose again.

On a DPI + Debt basis, there was a much bigger jump in affordability. This big increase in debt corresponds to the housing bubble of the early to mid 2000s. Interest rates were lower and underwriting standards lessened, so that almost anyone could buy a home. This allowed a run-up in home prices. Homeowners could borrow this equity and use it for whatever purpose they chose–for example, fixing up their home, buying a new car, or going on a vacation. The big increase in DPI+Debt, relative to DPI, gives an indication of the extent to which the housing-related debt bubble in the early 2000s affected spendable income.

Which of these scenarios is really correct? It depends on the segment of the economy a person is looking at. For people of modest income, in other words, those who rent apartments, the wage-only scenario is probably the most representative. For people who have high incomes and own a home, the DPI plus Debt scenario is probably more representative.

[8] All income seems to ultimately derive in part from rising debt, and in part from energy consumption. If interest rates are too high, the required interest payment exceeds the benefit of time shifting.

We can see from Figure 13 that debt is very helpful in producing income for workers. Some of this comes from the government transfer payments, funded by debt. Some of this comes from the wages paid by businesses, funded in part by shares of stock, which are debt-like in nature. The currency with which workers are paid is, in fact, debt. A person can see the connection, by thinking of currency as being similar to “gift cards,” issued by a business. The business would need to record the value of these gift cards as a liability on its balance sheet.

The underlying problem giving rise to the need for debt is “complexity,” and the need to obtain the services of many trained people and of many types of tools, before goods and services can actually be created. All of this builds extra expense and delays into the system, in the manner described in Figures 10 and 11. Somehow, there must be interest payments to compensate for the time shifting that is necessary: the whole string of events that must lead up to producing the products that are needed. Tools must be made far in advance of when they are needed. In fact, there is a whole string of “tools to make tools” that takes place. Factory buildings need to be built, and roads need to be built. Workers must be trained. In order for the people and businesses involved in these processes to be compensated for their effort, and induced to delay their own consumption of goods and services, there need to be interest payments made for the time-delay involved.

Debt (together with shares of stock, which are debt-like) cannot operate the economy alone. Energy products are also needed to provide the physical transformations required. These include heat and transportation, and electricity to operate devices that use electricity. Of course, human workers are needed as well. The major pieces of the system, and the way they operate together, are shown in Figures 10 and 11.

It would appear that an economy can start “from scratch,” using only debt, plus available resources (including energy resources, such as biomass for burning), and some sort of government (perhaps a self-declared king). If the king sees a productive project that might be undertaken–perhaps building a bridge, or cutting down more trees for farmland–the king can impose a tax on the citizens, and use the tax to hire a group of laborers to use the available resources. Once the tax is imposed, it is a debt of the citizens. It can be used to pay the laborers who do the work.

The debt-based system seems to build upon itself. As more wages are available, these wages allow workers to take out loans, and allow businesses to create new goods and services that can be purchased using these loans. These loans are promises that can be exchanged for future goods and services. Since energy is used in creating all goods and services, these loans are more or less guarantees that the economy, and its use of energy products, will continue in the future.

The thing that connects debt to the rest of the system is the interest payments required for time shifting. When the system is relatively efficient, the return on investment is high, so interest payments can be high. As diminishing returns set in, interest rates need to be lower. We are now encountering diminishing returns in many areas: extracting fossil fuels, extracting minerals, producing enough fresh water for a rising population, creating an adequate supply of food from a fixed amount of arable land, creating new antibiotics as bacteria become drug resistant, and the cost of finding new drugs to treat diseases that affect an ever-smaller share of the population.

[9] It is relatively easy to make economic growth occur when energy products are becoming more affordable, relative to spendable income. When energy products are becoming less affordable, it becomes virtually impossible for economic growth to occur.

We know that historically, the cost of energy products has tended to fall over time. This has been described in more than one academic paper.

Figure 14. Figure by Carey King from “Comparing World Economic and Net Energy Metrics Part 3: Macroeconomic Historical and Future Perspectives,” published in Energies in Nov. 2015.

A United Nation’s report also shows the same pattern (the bottom two categories are energy related):

The only way that energy costs can fall relative to GDP, at the same time that energy use is rising, is if energy products are becoming less expensive over time, compared to the incomes of the citizens. This falling price level allows more energy products to be purchased. As energy prices drop, it is possible for the economy to afford the increasing quantity of energy products required to produce even more goods and services.

There are many ways that energy products can become less expensive. For example, the mix can shift among different energy products, shifting to the less expensive products. Or new techniques can be found that make extraction less expensive. Finding more efficient ways to make use of energy products, such as the increasing miles per gallon shown in Figure 7, also contributes to the falling relative cost to workers. Of course, “falling EROEI” tends to work in the opposite direction.

Unfortunately, we are now running out of ways to truly make energy use cheaper over time. The ways we seem to be down to now are (a) paying energy companies less than their cost of extraction, and (b) reducing interest rates to practically zero.

We can see from Figure 6 that oil was becoming more affordable relative to wages between 1981 and 1998. Falling interest rates and rising debt seemed to play a role in this, as well as success in drilling for oil in places such as the North Sea, Mexico and Alaska. Since then, the only way that oil affordability could rise was by oil prices falling below the cost of extraction, starting in mid 2014.

The situation for electricity is shown in Figure 13. Electricity was becoming more affordable on a “wages-only” basis, until 2000. Since then it has plateaued. The economic push that would have come from falling electricity prices must come from elsewhere–presumably from adding more debt.

Affordability of electricity on a “DPI plus debt” basis rose considerably more, with a peak in 2004. Thus, adding more debt, in the form of transfer payments and rising debt for homes and vehicles, added considerable spendable income. But it has not been possible to regain the affordability of the 2004 period in recent years.

We are now reaching limits because we no longer are truly seeing a reduction in energy costs. Instead, we are seeing very low interest rates and oil prices lower than the cost of production. These seem to be signs that we now are reaching limits. Energy prices really need to drop for the economy to grow; the economy will make them drop, whether or not producers can profitably extract oil at the low cost that is affordable by the citizens.

[10] China seems to be cutting back on growth in debt now, at the same time the US is talking about increasing interest rates. Energy products, especially oil, are sold to a world market. If China cuts back on debt at the same time as the US raises interest rates, energy prices could drop dramatically. 

Figure 16. UBS Total Credit Impulse. The Credit Impulse is the “Change in the Change” in debt formation.

UBS calculates a global “credit impulse,” showing the extent to which there is a trend toward increasing use of debt. According to their calculations, since 2014, it is China that has been keeping the Global Credit Impulse up. If China is cutting back, and the US is cutting back as well, the situation starts looking like the 2008-2009 period, except starting from greater problems with diminishing returns.

Observations and Conclusions

The economy looks to me like a type of Ponzi Scheme. It depends on both rising energy consumption and rising debt. Judging from the problems we are having now, it seems to be reaching its limit in the near term. Raising interest rates will tend to push it even further toward its limit, or over the limit.

Debt is used to pay participants in the economy using a promise for future goods and services. This allows the economy to appear to distribute more goods and services than are actually available. In a way, adding debt is like being able to manufacture future energy supplies that can be used to pay those who participate in making the goods and services we produce today. When energy products are high-cost to produce, and delayed in timing (such as wind and solar PV), the need for debt especially rises.

Part of our problem today is the extent of specialization of those analyzing our current problems with energy and the economy. This means that virtually no one understands the full problem. Bankers seem to think that debt, and interest rates on debt, can solve all problems. Energy analysts think that energy resources in the ground are all-important. They both create incorrect analyses of the overall problem. Rising debt is needed, if energy products that have been created are to be absorbed by the world economy. The energy gluts we are seeing are signs of inadequate wage growth. A major function of growing debt is to add wages. Unwinding debt leads to the kinds of problems that we encountered in 2008.

It is tempting for world financial leaders to think that they can find a solution to today’s problems by using higher target interest rates to slightly scale back economic growth. I don’t think that this is really a good option. The world economy is operating at too close to “stall speed.” The financial system is too fragile. If any solution can be expected to work, it would seem to need to be in the direction of re-starting QE. Even if it produces asset bubbles, it may keep the world economy operating for a bit longer.

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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2,229 Responses to Raising Interest Rates Can’t End Well!

  1. grayfox says:

    For those of you too young to remember there was a lot of end of the world/doomsday stuff swirling around in the 70’s. I know these are different times, but it still a good idea to recall the cults and their bad behavior from that era. Here’s one of the stand-outs: https://www.britannica.com/topic/Peoples-Temple

    • ITEOTWAWKI says:

      But like you said grayfox “these are different times”….people joining cults are at a point in their lives where they are vulnerable….while those of us here who believe in the end of the world soon (end of BAU) are very sound of mind thank you very much…we have literally spent hundreds of hours (to not say thousands) studying the predicament were in for many years and have come to that conclusion gradually as we went deeper into the rabbit hole…moreover each of us who think the end is near are not depressed, we enjoy every single day BAU is in place…we are not following any leader…..we are not cultish, we are simply realists…in fact I would bet that the people that frequent this site would be amongst the least liable to join a cult because of their strong analytical minds!

      • theuaob says:

        Also in the 1970s awareness was relatively more widespread of environmental concerns, perhaps due to the Damocles Sword of Nuclear Armageddon sharping peoples minds and opening up the possibility of civilisation ending catastrophe.

        The population bomb and Limits to Growth were popular features in the culture of the day, even as it opened some of the more vulnerable to manipulation by charismatic false prophets. Perhaps some things don’t change?

        • Financial Times articles are behind a paywall for me, but someone sent me an article called, “The Nuclear Fallout from Brexit: When Britons voted to leave the EU, few realized the implications for its nuclear industry.

          Perched on a remote stretch of coastline in north-west England is Europe’s most dangerous building. Inside the innocuous-sounding Product Finishing and Storage Facility at the Sellafield (http://next.ft.com/content /fea51c40-7385-11e6-bf48-b372cdb1043a) nuclear plant is enough plutonium for about 20,000 nuclear bombs.

          It is the world’s largest stockpile of civilian plutonium — one of the most toxic substances on the planet — accumulated from decades of reprocessing nuclear fuel from power stations not only in the UK (https://www.ft.com/topics/themes/UK_energy) but also Germany, France, Sweden and other countries.

          . . .

          Britain’s plutonium stockpile is overseen by inspectors from Euratom (https://ec.europa.eu/programmes/horizon2020/en/h2020-section /euratom), the pan-European body that regulates the use of nuclear energy. The organisation has a permanent presence at Sellafield and owns the cameras, seals and testing laboratory used to monitor Europe’s largest nuclear facility.

          . . .

          All trading and transportation of nuclear materials by EU countries, from fuel for reactors to isotopes used in cancer treatments (http://next.ft.com /content/185175e4-f9cd-11e6-9516-2d969e0d3b65), is governed by Euratom. The UK now faces a scramble to assemble a new regulatory regime to uphold safety standards, while negotiating dozens of international agreements needed to maintain access to nuclear technology.

          Rupert Cowen, a nuclear specialist at Prospect Law, a London law firm, told a parliamentary hearing this week that the UK was “sleepwalking” to disaster. “If we do not get this right, business stops,” he said. “If we cannot arrive at safeguards and other principles which allow compliance [with international standards] no nuclear trade will be able to continue.”

      • adonis says:

        this is definitely not a cult more like a philosophy club And what is philosophy here is one translation Philosophy (from Greek φιλοσοφία, philosophia, literally “love of wisdom”) is the study of general and fundamental problems concerning matters such as existence, knowledge, values, reason, mind, and language

      • Greg Machala says:

        “while those of us here who believe in the end of the world soon (end of BAU) are very sound of mind thank you very much…we have literally spent hundreds of hours (to not say thousands) studying the predicament were in for many years and have come to that conclusion gradually” – That is pretty much me as well. I quit putting off things I wanted to do after retirement (which would be at least 10 years off) and doing them now. I am very confident in what I have learned that there will not be a functioning economy in 10 years time to allow me to retire. I am in genera -l a truth seeker. I want to know the truth and not be fed a bunch of lies and propaganda. I am a big boy I can handle the truth.

        • Joebanana says:

          Greg-
          I’m doing the same. It is somewhat liberating not worrying about pensions and savings. Why just today I spent almost $500 for an axe! If somebody told me I would do such a thing 10 years ago I would have said they are crazy.

          • ITEOTWAWKI says:

            In December 2015, I bought myself a PS4 even though I had barely used my PS3 over the 7 years that I had it…thought that maybe I would use this one….sure enough 15 months later I have only used it a couple of times and now its gathering dust…in normal times I would have been pissed off at myself on spending 400$ on something I am not using…but in today’s world ask me if I care…could not care less…not even bothering on putting it up for sale…

          • Tim Groves says:

            I’ve been using a perfectly good $70 axe for the past 20-something years and have been thinking of retiring it in favor of a deluxe Scandinavian model I saw in the hardware store last year. But the price tag of about $250 has been putting me off. What do you get for $500? Does it come with a gold handle or does it also function as a tin opener and corkscrew?

            • gkl675 says:

              Uh id like be finding a hydraulic splitter for that dough. Guess I need a go fund me page.

            • Joebanana says:

              Tim-
              It is a Gransfors Bruks 1900 broad axe. They are about $340US so with my Canadian pesos, taxes, and shipping I’m around $500CAD. I normally go for vintage axes and have a nice collection but I could not find a broad axe I liked as much as these. I have another broad axe but I just really love axes.

              I’ve got a little timber framing project on the go. I felled some logs this winter and plan on hewing them soon. I also bought some really nice chisels and a friend forged up a beautiful slick for me.

              Is wood burning something that is common in Japan? Do you buy wood and split it for heat or get it on your property? It just not a place I ever associated with that sort of thing.

            • DJ says:

              But the axe will last you a life time. How nice isnt that when BAU ends and everything collapses in three days due to lack of spare parts?

              Interestingly the axes are done with 100 year old machines, that probably need very specific spare parts.

      • Fast Eddy says:

        The Core is the intellectual equivalent of this

    • Greg Machala says:

      “there was a lot of end of the world/doomsday stuff swirling around in the 70’s” – There is a difference between end of the world and end of industrial civilization. Whereas I believe industrial civilization will end shortly, I do not think the Earth will “end” any time soon.

      If you consider much of what we call industrial civilization (cars, electricity, sewer, plumbing, heating , cooling, high rise building, airplanes, etc) then industrial civilization isn’t really all that old. Yet many folks think that something so short lived and unproven is permanent and sustainable. Common sense tells me otherwise.

  2. Artleads says:

    Alternative Facts:

    • Tim Groves says:

      No, not alternative facts; just facts. Personally, I think this song is brilliant, and very professionally made.

      And will go viral, although not because it will shame the climate deniers, but because almost every line of it rings true, so it works as a summation of all the inconvenient facts that the alarmists are attempting to deny.

      This is yet another serious own goal for the Climate Industrial Complex.

      It even beats this:

      And this:

    • If we are not here, how much does it matter to us?

  3. Van Kent says:

    Come to think about it, there might be a way how both Eddy and Pintada are both right about the ‘Elders’..

    The greatest show of power, is to have somebody doing the thing you want, by just having them doing it, because they ‘think’ you want it..
    You dont mention it.
    You dont give any hint at it.
    Yet they start doing what they ‘think’ you would want.
    Now that is true POWER

    Could it be that the Elders both do exist, and dont exist, at the same time?

    If one lookes at the power structure of the world. We have the CIA and NSA and the u.s empire expanding. Taking care of american business interests.. whatever it takes.. ruthlessly and criminally.. But who does the big businesses follow? Its going to be the big international banks and their intrests, is it not. The ‘Elders’.

    Now.. the CIA and NSA doesn’t need orders from the business elite on what to do, because they will do the things automatically. Its something that is expected of them. Something that they expect from themselves. The same goes for the business elite. And the same goes for the international bankers.

    The question of, if the Elders exist or not, is irrelevant. Whether they exist or not, everybody behaves the way they ‘should’ behave. As if the ‘Elders’ did exist. But even if Elders would really exist, the most powerfull tool for them would be to have people doing what they ‘think’ the Elders would want. Therefore actually not having to give any orders whatsoever. Therefore the outcome and the structure of the global system is the same, in both cases, whether they exist or not, they would exist, and not.

    • Fast Eddy says:

      ‘Now.. the CIA and NSA doesn’t need orders from the business elite on what to do, because they will do the things automatically. Its something that is expected of them

      As do the politicians…

      As do the business elite.

      The el.ders are people but they are more ‘a system’ — they do not need to micro-manage… all the players understand that if they work with the system they thrive…

      The eld.ers seldom have to slap anyone in the head… because nobody gets out of line…. for the most part they are just overseers — giving general directions ….

      End of the day the money is the power — they control the money — therefore they control the players….

      The formula is widely used — want to control a country — just make sure your chosen elites (e.g. House of Saud) get paid very well — if they are getting paid they will do your bidding…

      If they refuse — then they get replaced — if they try to fight you — they get a bullet in the head.

      It is a very effective formula…. it works with just about everyone … because at the end of the day who will choose to fight when they are given the option of living large?

      Only fools fight the Fed.

    • Sceadu says:

      I don’t believe in vast conspiracies. Humans are not nearly loyal enough to make that work for long — among other reasons. But I do believe in a system that essentially benefits the fortunate few, and that they are loathe to give up this power. I just don’t think even they are all on the same page. I also think that they aren’t necessarily free of delusions of technological salvation.

      • Fast Eddy says:

        There is no conspiracy…. it’s completely out in the open

        A private company is permitted to print unlimited amounts of the world’s reserve currency.

        Think about that.

        Why in the F789 would any government give a private company that right?

        Why does the US govt need to outsource the printing of its currency?

        Why do they allow that private company to collect interest on that money when they lend it out?

        Why don’t they just print it themselves?

        Ah yes…. they tried to print their own money – wasn’t it Lincoln who did that — that didnt work out so well for him

  4. Third World person says:

    perfect example of bau-lite

    • Artleads says:

      Seriously screwed up. Over the past couple decades, Venezuela had been subsidizing oil supply to Cuba and the Caribbean. What’s the status of that arrangement?

      • Fast Eddy says:

        That is far from BAU Lite… it’s just another 3rd world F789ed up 3rd world country….

        And as for having the largest oil reserves…. Canada is right up there as well — the problem is the oil is too expensive to extract — and unlike other countries that are essentially bankrupt unless oil is 120 … nobody will help Venezuela because they don’t like their politics.

      • Cuba has been “making nice” to the US, because it could see the end of this arrangement. There have also been cutbacks – don’t have time now to look for links.

  5. Fast Eddy says:

    Today, March 23rd 2017, WikiLeaks releases Vault 7 “Dark Matter”, which contains documentation for several CIA projects that infect Apple Mac Computer firmware (meaning the infection persists even if the operating system is re-installed) developed by the CIA’s Embedded Development Branch (EDB). These documents explain the techniques used by CIA to gain ‘persistence’ on Apple Mac devices, including Macs and iPhones and demonstrate their use of EFI/UEFI and firmware malware.

    Among others, these documents reveal the “Sonic Screwdriver” project which, as explained by the CIA, is a “mechanism for executing code on peripheral devices while a Mac laptop or desktop is booting” allowing an attacker to boot its attack software for example from a USB stick “even when a firmware password is enabled”. The CIA’s “Sonic Screwdriver” infector is stored on the modified firmware of an Apple Thunderbolt-to-Ethernet adapter.

    “DarkSeaSkies” is “an implant that persists in the EFI firmware of an Apple MacBook Air computer” and consists of “DarkMatter”, “SeaPea” and “NightSkies”, respectively EFI, kernel-space and user-space implants.

    Documents on the “Triton” MacOSX malware, its infector “Dark Mallet” and its EFI-persistent version “DerStake” are also included in this release. While the DerStake1.4 manual released today dates to 2013, other Vault 7 documents show that as of 2016 the CIA continues to rely on and update these systems and is working on the production of DerStarke2.0.

    Also included in this release is the manual for the CIA’s “NightSkies 1.2” a “beacon/loader/implant tool” for the Apple iPhone. Noteworthy is that NightSkies had reached 1.2 by 2008, and is expressly designed to be physically installed onto factory fresh iPhones. i.e the CIA has been infecting the iPhone supply chain of its targets since at least 2008.

    While CIA assets are sometimes used to physically infect systems in the custody of a target it is likely that many CIA physical access attacks have infected the targeted organization’s supply chain including by interdicting mail orders and other shipments (opening, infecting, and resending) leaving the United States or otherwise.

    And the precious snowflakes are more concerned about the polite term for this

    Amusingly … many (most?) people still feel this is all necessary to capture The Terrorists….

    And … it does not occur to them that The Terrorists would have been aware long ago that it was not a good idea to communicate using such devices?

    I know people who have been using cheap burner phones for years to order a pack of weed or coke from ‘the guy’ because they know the authorities are listening to everything… but apparently the bad guys are not so wise ….

    Was someone saying something about how humans are really quite stupid animals????

    • xabier says:

      There is no little irony in our fretting about vulnerable global supply chains, while the security services of all the major players are very busy quite deliberately undermining them, to be triggered in event of war or some crisis when blackmail -or a faked casus belli – is required…

  6. Fast Eddy says:

    Sears Enters Death Spiral: Vendors Halt Shipments, Insurers Bail

    http://www.reuters.com/article/us-sears-restructuring-vendors-idUSKBN16T31S

    • Kurt says:

      There are no elders. Wrap your head around it. There are different, very powerful groups vying for power because, hey, guess what, it’s 2017, not 1917. Good grief.

      • A Real Black Person says:

        How does your post refute what Eddy has been saying?
        “hey, guess what, it’s 2017, not 1917. Good grief.” is not an argument or evidence.

        • Fast Eddy says:

          There are always usurpers standing by watching for weakness in the Empire … in every Empire… just as their are young wolves considering a challenge for the leadership of the pack…

          If they do not feel they can win the challenge…. they do not challenge … and wait their turn for the scraps…

          The same private company that printed the world’s reserve currency 100+ years ago (the font of all power) … continues to print reserve currency…

          Nothing has changed.

          Although it does look as if they may have a few teeth missing… and it looks like they are walking with a slight limp…

          Coming soon?

        • Kurt says:

          Well, let’s see FE start naming names. Who are these elders? How powerful are they? More powerful than the MIC? No way. The MIC can have them eliminated overnight. There was no MIC in 1917 and no Silicon Valley, and no Chinese industrialists. They all want a piece of the pie. But hey, you go on living in your Delusistan conspiracy world from 100 years ago if it makes you feel good.

          • Tim Groves says:

            There is no MIC. Wrap your head around it. There are different, very powerful groups vying for power because, hey, guess what, it’s 2017, not 1960. Good grief.

            P.S. See how I did that?

          • Greg Machala says:

            Someone was the brainchild that created the CIA.

        • bandits101 says:

          Why does Kurt have to provide facts, when the conspiracy theorists present zero facts themselves? He is simply fighting beliefs, ideas and opinions and we all know the futility of debunking them. It’s an impossible Whack-A-Mole exercise.

          • Fast Eddy says:

            If you are referring to the false flag that is referred to as 911 — the facts were laid out by an analyst who formerly worked for the agency responsible for investigating the incident

            You can also visit re think 911 — engineers (including one who built the towers), architects, and demolition experts present comprehensive evidence that indicate the towers were taken down by explosive charges

            • bandits101 says:

              What!!
              Did they put the charges in after the planes hit. Those things would have set them off. How come they knew exactly where the planes would hit. Why weren’t unexploded charges found, you know the ones above the impact sites. Could go on forever but beliefs are much more powerful than facts.

            • bandits101 says:

              The main thing that I learned about conspiracy theory, is that conspiracy theorists believe in a conspiracy because that is more comforting. The truth of the world is that it is actually chaotic. The truth is that it is not The Iluminati, or The Jewish Banking Conspiracy, or the Gray Alien Theory. The truth is far more frightening – Nobody is in control. The world is rudderless…..Alan Moore

              The popularity of conspiracy theories is explained by people’s desire to believe that there is – some group of folks who know what they’re doing……..Damon Knight

              I really wish there was some big brother conspiracy theory. I just think it’s the ignorance of trying to make a dollar. That’s what the networks have done and will continue to do. If anyone doesn’t think that this is about making money, then they’re crazy…..Montel Williams

              The great thing about facts is that YOU MAY choose NOT to believe them but they still remain facts

            • The thing that I found amazing when I spoke at a workshop given in China in 2011 is that the leaders there were reading and believing the same junk articles, being written in business journals in the US, as people in the rest of the world. There were several leaders from business/government invited to hear me speak. The questions they asked and the comments they made (in Chinese, someone had to translate) indicated to me that they were following the same “group-think” pattern as the rest of the world. If someone writes, “Black = White” in peer reviewed literature, there are going to be quite a number of people who think this is true. Business magazines, and other journals, are pretty similar.

              What we think of as conspiracy seems to be more people following the same appealing ideas that have been put forth in widely circulated media. It is easy to put together wrong models. All people need to do is to follow them.

              This approach has a lot of self-organization aspects to it. If an idea seems appealing, it tends to spread. No one is in charge. There is no conspiracy, just people attempting to look after their own self-interests.

            • theuaob says:

              I think this is far too simplistic. The idea that each individual only looks out for their own self-interest isn’t really compatible with history or how people and populations form systems, groups, organisations, Nations… It stems, I believe, from the strong sense of individualism ingrained in US culture, and it even affects those like yourself who actually know better, after all, it’s what you write about here! It can be very difficult to separate ideas and beliefs culturally derived from those you’ve realised or synthesised yourself from what you understand of the world. Of course, both could be totally divorced from objective reality, if only we could perceive it!

            • Fast Eddy says:

              You are competing on an individual level every single day of your life — whether it is trying to get a spot in a university — or trying to get the job as the local garbage man.

            • theuaob says:

              You are the product of your genes, for their own continuation, whether that be though you, or your close relatives. This is why people volunteer to give their lives for those they feel are kin. There are many examples in both nature and human history of individuals disregarding their own competitive self-interest for the hive, herd, or tribe. I suggest reading about slime moulds…

            • Fast Eddy says:

              Help me with this ..

              Why does a private company have the right to print the world’s reserve currency – the USD?

            • Ed says:

              FE, because the owners of the private company have a stronger will to power than all others.

            • Fast Eddy says:

              Yep — if power is your game — the pinnacle would be owning the company that has the right to print unlimited amounts of the world reserve currency.

              That would be the holy grail…. supreme power

          • richarda says:

            “Black Eagle Trust Fund: Powerfully revealing information on the Black Eagle Trust Fund and its connection to the 9/11 attacks. Brilliant, well-documented essay!”
            http://www.wanttoknow.info/911/Collateral-Damage-911-black_eagle_fund_trust.pdf

    • Not good at all. There seems to be a “Sears” in every shopping mall around here. Malls have a hard time finding any kind of tenants. Anchors are especially difficult. Grocery stores? Close for good?

      • Sceadu says:

        The mall in my hometown just “de-malled,” i.e. turned into an outdoor shopping center. They have tried everything to save it — we’ll see if this new plan works. The JC Penney in the new shopping center was just slated for closure. Lately it seems like every store I used to enjoy shopping at is going belly up, whole national chains, many of which had been around for decades.

        • Fast Eddy says:

          One wonders if this is not subprime all over again …..

          How do you service commercial property debt when you have no fewer tenants?

          And btw — when anchor tenants leave the other smaller tenants usually have clauses that call for reduced rents – or the option to terminate leases…

          CBs are doing everything in their power to fend off the next bust — so will almost certainly be unable to do anything when the next shoe drops…

          Wonder what John Key is up to this weekend….

        • Greg Machala says:

          “many of which had been around for decades.” – That is the problem with human thinking. We think on too short of a time scale. Decades is nothing and means nothing. If it were millenniums then maybe the persistence would have weight. But a decade is just noise on the graph of time.

          • Sceadu says:

            Decades may be nothing in the whole scheme of things, but the point is that I’m not talking about little mom and pop stores that started out with an ill-advised business plan and failed. These are stores with recognized brand names and reputations. Most of them had significant online sales. Last I checked, no stores have been in business for millennia, so I don’t see how that’s a relevant argument. When very established chains like Sears and JC Penney are having trouble staying afloat, that’s a sign that something is very wrong. The media can chalk it up to changing times as much as they want, but it still gives one a sort of sickening feeling.

        • I think that there is a cycle going on. Chains cut back on stores with lower sales, and particular items with smaller numbers of sales.

          People living in areas where malls close are increasingly forced to use Amazon and other online services. Also potential buyers of goods that normally have a narrow sales base, such as extended sizes of clothing.

          These changes lead to further erosion of the number of people going to malls and chain stores to buy goods, leading to more closures.

          Diseconomies of lack of scale1

          • Sceadu says:

            What I see happening in my region is that one increasingly has to go into the Big City to go shopping — going back to what it was like when I was a kid. The malls in the largest city in the region are doing just fine. The periphery is suffering.

            • A Real Black Person says:

              The successful malls cater to the rich.
              Even though they have fewer customers because of their prices, they seem to be able to make a decent profit.

              The strip malls are for the working class. The discount stores that populate there, the dollar stores in particular but places like K-Mart fit the bill, are far more dirtier and unkempt then I remember them being twenty five years ago. The prices may be low but the products are terrible and like I said the stores are an ugly sight. If the poor don’t have to shop at these places, they don’t. No one goes fo to strip malls for recreational shopping to, and socialize because it’s of their inherent stigma as a place for society’s losers.

              In contrast, every Apple store I come across is always crowded and the upscale malls with luxury brands have plenty of traffic, they’re clean, and the people there seem happier and healthier. I have reason to believe that there are plenty of poor people who lurk in upscale malls, (in America, the land where anyone can own several credit cards, one can hide one’s socioeconomic status by borrowing money to dress up. ) because they don’t want to associate themselves with desperation and poverty.

            • There was an article in our local paper talking about the fact that the malls in urban centers are doing better, and what effect that is having on tax revenue. The mall near me is doing well, because people from outlying areas drive to it to shop. There is a sales tax in the county where I live, to help the public schools. The article said that this tax is helping schools in the relatively urban area where I live. It tends to hurt those who are need to drive from an outlying area to the mall to shop, since they are paying taxes for someone else’s schools.

  7. Nikhil says:

    Gail,

    You have interesting articles that really make the reader think deeply about a topic and question what he really knows.

    I wonder though, with the picture you paint, what are sustainable solutions to reforming the world economy and sending it on a future path of stable growth and prosperity? How do we close Pandora’s box? I would like to here some real long-term solutions based on all the deep subject matter you’ve analyzed.

    Regards.

    • I am afraid I don’t really see sustainable solutions that we humans can undertake. If there were sustainable solutions, they would include (1) humans should only eat raw food, which they pick themselves with their hands, (2) humans should not wear clothing, (3) humans should make no controlled use of fire any more (we have used it for over 1 million years.) If humans build homes, they should be made with simple local materials that can be gathered in a day or two. With those rules, I expect that human population would be down by more than 99%, very quickly.

      There might be a small number of people who could survive with raw fish, and raw fruits, but for the most part, our brains and metabolism are adapted to eating at least some cooked food. A large share of the world’s population needs clothing to keep warm, or to protect their skin from too much sun exposure.

      Even with this approach, I doubt that the small number of remaining humans would live in a sustainable manner. Our brains would give us too much of an advantage over other animals. Also, individual species come and go. Humans would seem to follow the pattern of other species. We cannot expect to be a long-lived as, say, cock roaches.

      There is a great deal of order underlying the way the universe seems to be put together. In fact, there seem tone an amazing number of coincidences that allow humans to even live on the world today. It would seem to be possible that the creator of the universe has further plans for humans. I do not know how this would work out precisely. It likely would not be on this earth. I expect various religions may have some insight on this. There are many things we really don’t know.

      • Fast Eddy says:

        In the harem complex we will only eat grapes that the eunuchs pluck from the vineyard … clothing is not an issue… keeping warm will also not be an issue…

        Sustainable living at it’s finest.

        I would be extremely optimistic about my chances if it were not for the darned fuel ponds.

        Alas… there could be worse ways to go….

        • you should get rid of this harem complex Eddy—-Mrs Fast is bound to find out about it sooner or later—then there will be one more eunuch on the payroll

          • Fast Eddy says:

            I spend my every waking moment trying to work out how I can convince her not to John Bobbitt me over this …. I need to get the pitch right because I’ll only get the one chance to get her on board….

      • Sceadu says:

        Lately I’ve been reading about how studies on quantum physics reveal interesting questions and insights about consciousness. The authors discuss the apparent underlying order of the universe and why it may be there. It has been interesting trying to reconcile a finite world with these theories of consciousness. No one really knows the answers to these questions, but it shows that our human perception definitely limits what we can see or even think about. It really does make me wonder what is out there, beyond our material existence.

      • Froggman says:

        Gail, of all your writing I like these types of comments the best.

        It’s clear that you’re such an expert, such an authority with so much deep understanding of our issues. And to the question “well what do we do to fix it all” your simple answer is there’s probably nothing we can do, save reverting to naked wild animals like our primate cousins.

        To newcomers this answer must feel like a bucket of ice water over the head. Even reading it for the hundredth time in different words and contexts, I still enjoy the chill it gives me. A refreshing blast of truth, a matter-of-fact slap in the face.

        Thank you for what you do.

    • Tim Groves says:

      I wouldn’t want to second-guess the Creator(s) of the Universe. He/She/It/They may have big plans for humans, or we may be part of the some totally purposeless and unplanned process that characterizes the Universe.

      We are organisms that form part of the earth’s biota. Why should our lives or our existence be any more or any less purposeful or important than the lives of all the birds, bees, flowers, trees and the trillions of yoghurt bacteria I grow in a vat of milk in the kitchen? The existence of a creator or the purpose of a creator of the Universe are purely conjectural questions, or, to add to Rumsfeld’s categorization, “unknowable unknowns”. So for me, the far more interesting question is “why do we ask such questions?”

      • Fast Eddy says:

        So for me, the far more interesting question is “why do we ask such questions?”

        ++++++++++++++++

      • Crates says:

        If it all started with the Big Bang … what did the Big Bang create?
        If God created everything … how did God begin? In this approach is sensed an absurd. It seems obvious that it is not even within our reach to pose the question properly.
        On the other hand, when Gail suspects that something or someone may be behind the flows energy , that is no guarantee that we can access that information … either in life or in death.
        Things that will probably remain unresolved for us.
        Sad.

        • doomphd says:

          As I contemplate the deeper meaning and purpose of our lives in the cosmic firmament, the sad, nagging thought I have is: where am I supposed to get my tools, major appliances, and underwear when Sears and JC Penny are gone?

          • A Real Black Person says:

            JCPenny and Sears, as someone has aptly noted seem to serve a 1990 economy that no longer exists. If they want to survive in today’s physical retail environment, then they have to follow the general trend of economic polarization and choose to either serve the rich or serve the poor.

            Sears must make a choice…

            or

            There are exceptions, like Target and Amazon but they are exceptions to the trend.

            • Ed says:

              Our local Sears is down to 50% of the on hand stock it used to have. It has almost zero customers regardless of day or hour.

            • I ordered a small garment from JC Penney’s yesterday. Since its cost was well under $100, I had to pay the shipping charges. The lowest charge (for 7 day delivery) was $8.00, which I chose. I didn’t see ratings of the product on line.

              I next went to Amazon, and ordered something similar, because fit was likely to be an issue, and because I needed more than one. There, I could see ratings. Shipping would be much faster, and included in the price, since I have an “Amazon Prime” membership. If I had gone to Amazon first, I doubt I would have ordered anything from Penney’s.

            • I ordered a small garment from JC Penney’s yesterday. Since its cost was well under $100, I had to pay the shipping charges. The lowest charge (for 7 day delivery) was $8.00, which I chose. I didn’t see ratings of the product on line.

              I next went to Amazon, and ordered something similar, because fit was likely to be an issue, and because I needed more than one. There, I could see ratings. Shipping would be much faster, and included in the price, since I have an “Amazon Prime” membership. If I had gone to Amazon first, I doubt I would have ordered anything from Penney’s.

        • Tim Groves says:

          Difficult questions!

          For the underwear, have you tried Victoria’s Secret?

          • Joebanana says:

            Guys, if you haven’t been going “commando” at this late stage you are just not taking this serious enough!

          • xabier says:

            In case, Victoria’s Secret doesn’t go too well with the beard. It’s all rather perplexing isn’t it?

        • At least in this lifetime.

  8. Fast Eddy says:

    Pemex faces one of the most difficult situations in its history, but there is no question of it being allowed to go bankrupt, despite the increasing burden it represents to the state. That said, if the government cannot turn its fortunes round, Pemex could end up dragging the Mexican economy down with it.

    The last sentence in the quote above is the likely outcome for Mexico’s state run oil company. That is, Pemex will likely drag the Mexican economy down with it. I believe it’s just a matter of time.

    https://srsroccoreport.com/pemex-mexicos-state-oil-company-on-the-verge-of-bankruptcy-collapse/

    The CB policy has been flood the world with cash and drive interest rates down — and all bloats are floated….

    The problem is that when some of the big boats start to sink – in spite of deluge of stimulus…

    What do you do then?

    You end up with a situation where you are faced with too many holes in the dam and too few fingers… at some point the CBs are just overwhelmed with sinking boats…

    • My impression is that the Mexican government has been trying to use Pemex’s tax revenue as a major pillar for keeping the economy going. With the price of oil down since 2014, that is not working. Mexico also needs financial help in exploiting the deeper water oil resources that seem to be available. I am doubtful that this situation can be worked out. There is no longer enough revenue for the government to live off of.

      • Greg Machala says:

        It won’t be long before we have a Zimbabwe south of us. That would be a refugee crisis here that would rival the European refugee crisis.

      • ejhr2015 says:

        Mexico is Monetary Sovereign, therefore it can fund its debts . In this particular case the question has been allowed to morph into a question of governance. Is Mexico competently governed? It seems to many the answer is No. This threatens the viability of the country’s currency, thus rendering the governments ability to monetise its debts as difficult. It should not have been allowed to degenerate into this parlous situation. As usual the nations politicians are economic illiterates, but like the rest of the world, that’s normal.

        • Venezuela a Monetary Sovereign, just like Mexico. By your reasoning, it can fund its debts as well. What you are saying is a false belief, which you keep reposting.

          All countries depend on their ability to make goods and services, with the resources (human, raw materials, energy resources) available to them. If [(goods and services created) / population] is falling, the country is in tough shape. Deficit spending with their sovereign currency does not do much. If they can get away with deficit spending, or printing money, or signing contracts for more debt, perhaps their citizens can get a bit more on world markets. But I would not count on this as being a strategy that saves the world.

      • Pintada says:

        Greg Machala said, “It won’t be long before we have a Zimbabwe south of us. That would be a refugee crisis here that would rival the European refugee crisis.”

        Actually, if you include Brazil (that is loosing the forest that makes its water), Venezuela, Chile (which has in the past year lost a significant part of its forest to a AGW caused drought followed by an AGW caused flood which took out much of the infrastructure), and soon Mexico the refugee crisis is bake in already. The only question is will Trump build a wall, or will the refugees overrun the country.

        Interesting that the problem in Venezuela, and Mexico is caused by peak oil, something the Trump administration denies while the other problems are caused by AGW, also something they deny. If there is a wall, it will be built for the wrong reasons.

        • A Real Black Person says:

          ” “It won’t be long before we have a Zimbabwe south of us.”
          A dozen or to Zimbabwes, actually.

          The refugee problem in Latin America has been very under-reported. Trump doesn’t seem to know where they are coming from but he may be one of the few politicians who acknowledge that the problem may get worse and the U.S. economy’s ability to absorb more workers or dependents is limited.

          It doesn’t matter if Trump acknowledges whether AGW exists, there is NOTHING that can be done about it. More attention should be focused on what Trump can do something about, like water use.

  9. jerry says:

    You all got to see this. Did a Jamacain find the solution to all of our problems.
    Amazing, engines running on water. If this is true this man is a genius a true genuine genius.

    • adonis says:

      imagine an economy based on water not fossil fuels imagine the population growth this would cause just take a trip to bangladesh to experience a water based economy

      • Artleads says:

        Yes. People talk about the virtues of cheap energy. I don’t get the point. In this video, they talk about making millions from Mark’s invention. I still don’t get the point. However, there needs to be affordable energy to take care of nuclear materials for ever and ever. So TPTB should hire this guy to figure that out.

    • doomphd says:

      If you know some chemistry, you will know that water cannot be a fuel. It can be a nuclear fuel, especially the deuterium (D) component of heavy water, HDO, D2O, but not a chemical fuel.

      • Artleads says:

        Even when mixed with other materials to produce hydrogen? Not something I would know.

        • doomphd says:

          It takes more energy to dissociate the hydrogen in water than you can ever get from burning it or making a fuel cell work. Water is usually a product of chemical reactions, such as the oxidation of hydrocarbons (CH2O + O2) to make CO2 + H2O plus motive power as in internal combustion engine vehicles. Note the water dripping out of the tailpipe of your car, a condensation of some of the hot, invisible water vapor from the engine. CO2 is almost always an invisible gas.

        • Tim Groves says:

          To produce hydrogen from water, we need to supply energy to “fuel” the process. Electricity or sunlight can be used to fuel the electrolysis of water, which is the splitting of water molecules into hydrogen and oxygen. The reaction is endothermic which means it absorbs heat or converts thermal into potential energy in the form of chemical bonds.

          Once you’ve got your hydrogen, it can be used to fuel an exothermic reaction, combining with oxygen and converting the stored potential energy to thermal energy, thereby releasing heat, which can be made to do the mechanical work of moving the car.

          So to run your car on water, you would also need some kind of power source to split the water and a system for collecting and then burning the hydrogen as needed.

        • Artleads says:

          @ doomphd and Tim Groves

          Thanks for the explanation.

    • Bergen Johnson says:

      http://cdrivers.com/blog/2014/12/16/harlo-mayne-h2-flex/

      I did a quick google search and what I could find was from Dec. 2014. So why hasn’t there been an update about this new tech. since then? In the video he never answered the question of how much the aluminum cartridge was that needed to be replaced every 300 miles. He also said it depends on the size of the vehicle and driving conditions. So how many cartridges would it take to drive a large truck 300 miles in mountainous terrain? We really need to know the cost of the cartridge and comparisons between different driving conditions to have any idea if this is a good idea. Aluminum is not cheap energy-wise to manufacture and depending on the size of the cartridge could potentially be quite expensive.

  10. jerry says:

    Here’s a good article about traffic woes and imagine 10’s of millions of cars running on water? lol
    https://www.strongtowns.org/journal/2017/3/16/everyone-knows-we-have-a-traffic-problem

Comments are closed.