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):
Figure 15. Figure from UNEP Global Material Flows and Resource Productivity.
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.
Nichola Stugeon speech at SNP conference
I fancy Nicola may win this one.
Hey Nicola, here’s a suggestion for the National Anthem. Genuine Rabbie Burns!!
Fareweel to a’ our Scottish fame,
Fareweel our ancient glory;
Fareweel ev’n to the Scottish name,
Sae fam’d in martial story.
Now Sark rins over Solway sands,
An’ Tweed rins to the ocean,
To mark where England’s province stands-
Such a parcel of rogues in a nation!
What force or guile could not subdue,
Thro’ many warlike ages,
Is wrought now by a coward few,
For hireling traitor’s wages.
The English stell we could disdain,
Secure in valour’s station;
But English gold has been our bane-
Such a parcel of rogues in a nation!
O would, or I had seen the day
That Treason thus could sell us,
My auld grey head had lien in clay,
Wi’ Bruce and loyal Wallace!
But pith and power, till my last hour,
I’ll mak this declaration;
We’re bought and sold for English gold-
Such a parcel of rogues in a nation!
https://youtu.be/rdlDDMIyWyc
Time to rise up against the oppressor! Throw off the English yoke!
Likewise the Irish —- throw the heathens from the land.
I demand to be entertained…
No yoke-throwing please(!), as I am an Englishman on a Scottish island, planning to make a whisky-sodden stand against our impending ‘phase change’.
Maybe you can change your name to McGibbs?
Aye, perhaps.
whisky galore
I will gladly give up my sovereignty to you next Tuesday for a parcel of helicopter money dropped today!
I am reading Korowicz’s Trade-off paper again and this jumped out at me:
“A related issue is the contraction of trust radii, and a hardening of tribal feeling in times of stress and crisis. A suspicion of ‘outsiders’ and increasing nationalism are common features of an economic crisis.”
It would seem then that we the collapse has already begun, but we have yet, as Korowicz delicately puts it, to experience a phase change. I guess it will come out of nowhere and happen very, very fast.
So far the CBs have distorted every price in the market by:
– CBs buying stock, the Swiss CB has stock in the range of 130 billion $ and growing..
http://www.reuters.com/article/swiss-snb-stocks-idUSL8N1B7383
– gold and silver futures, buying and selling gold and silver on paper, in larger quantities than exist on the planet http://wolfstreet.com/2016/05/16/why-the-gold-and-silver-futures-market-is-like-a-rigged-casino/
– CBs buying debt directly from corporations, in the range of 300 M € each DAY https://www.bloomberg.com/news/articles/2016-07-18/ecb-reveals-corporate-bond-holdings-as-securities-lending-starts
And then we have ZIRP and NIRP that have inflated every housing market everywhere.
What else can CBs do to keep the system intact? Maybe start to buy SHALE company bonds 1 billion each day ??
Dishing out helicopter money for the consumers. Here, take this $1000 each month, just take it, please.
But I’m curious if we’ll see any real CHANGES in the system, before it goes down. Changes like scrapping pensions, health care, moving from publicly traded companies to community owned or coops. Discarding private banks for cooperative banking and money unions?
Because I’m thinking, all this money printing can only prop up this Zombie-economy for so long. At some point the realization has to set in, that even more drastic measures have to be considered. Like actually changing the system.
Yes, the CBs are doing a great job of distorting the markets and, in turn, controlling perception. As long as the CBs and fudged government statistics can obfuscate what is really going on (which is all economics ever was, obfuscation), things will go along.
The whole system depends on the collective expectation of future prosperity (growth). Which is why, I guess the fed is so focused on the stock market. As long as everyone knows the central banks have their backs, there will be little to shake anyone’s faith in the system. Only when it becomes obvious that the central banks have lost control can reality set in. So go go central banks. ZIRP, NIRP whatever it takes. We are way, way past the point of changing course, the central banks may be able to keep things together for quite a bit longer than anyone here expects. We have perhaps not seen all their tricks yet.
And thank god for light right oil. It has given the world the comfortable delusion that growth can continue forever and technology will save us.
(In is interesting how the EIA, always shows rising oil production no matter how far their reports go out, any decline (dose of reality) would unsettle the masses)
After years of QE, there has to be factions within the CBs that want to tighten the policies. These factions have read their economic theory, and don’t have a clue of whats coming.
If I was in the know, but having to deal with the factions that spew theory constantly. I’d probably create a whole lot of ‘mystery buyers of Belgium’ as a back door, to keep everything from imploding. While letting the airbrained, theory spewing colleagues do what the textbook considers right.
But as I raise rates and back away from further QE. I’d have billions, or trillions in the long run, in newly printed, fresh from the printing press, money waiting for european bank bonds, chinese housing bonds, commodity bonds, shale bonds, US treasurues, UK treasuries, Japanese, Chinese, well everybodies treasuries, as a whole lot of ‘mystery buyers of Belgium’
My point is just, that besides moving billions and trillions around, besides buying Tesla stock like crazy, besides investing freshly printed billions in hairbrained, lets go to Mars for some fresh resources, ideas (even more money for Elon). Structural changes could be much more effective than just sloshing around billions in helicopter money, and such.
But I’m afraid the CBs don’t have theory handbooks of alternative societal structures. So all of the really good, how to prolonge BAU-ideas, wont be implemented.. thats just my expectation of the situation
So.. if this pans out.. in this manner.. if you want to become rich. Really, really rich. Start a company with Keith. Start building space solar for Tesla energy, or trucking/ agricultural energy, or other somesuch to save the world nonsense. If BIS theoreticians believe you, they’ll slosh a few trillion your way.. and you’ll get a fleet of private jets and a few harems..
I recall in Hong Kong during the dotcom 1.0 craze…. staid property companies adding an i (internet) in front of their name and claiming they had a ‘strategy’ — share prices lifted off…
Today you just hire a PR company and pump out some ‘save the world’ hopium with and idea – no matter how absurd — and the money will come to you like flies to dung….
And there is a lot of money out there these days — looking for ideas….
Which raises the question….
So long as the CBs are committed to whatever it takes to bail out failing companies and keep the stock market from collapsing …
That means that institutional money will never ‘fight the Fed’
So in theory earnings could drop by half — but the markets could continue their bull run…
Assume the CBs cut deals with companies agreeing to hand them hundreds of billions to keep operating — so long as they keep layoffs to a minimum….
So what causes this to bust up?
Perhaps it is not a financial trigger….
Perhaps we can keep BAU going for as long as there is enough oil being produced to allow it to continue….
Conventional reserves may be the key – ‘80% of all fields are in decline (HSBC)’ — perhaps at some point there is just not enough oil coming out of the ground to allow BAU to continue
CBs can print some oil (see shale) but nowhere near enough to offset massive conventional field losses — see Alaska – North Sea …. at some point we hit a tipping point here….
First I’d create some investment banks for the sole purpose of, all sort of investments in oil and NG companies.
Then I’d create some ‘mystery buyers of Belgium’ to throw in a few trillion in capital in them banks.
And eventually when the shale companies go public, I make the ‘mystery buyers of Belgium’ buy up, and prop up their stock.
If everything goes smoothly, that’d be trillions of freshly printed funny money thrown at the energy companies. And as much as needed coming right up, if the trillions are not enough.
Then just do the same for the chinese housing market and commodity markets.
If done properly it’d be a guessing game what runs out first, oil, NG, food or other raw materials. And is the real date 2020 or 2025, when that game finally ends..
The problem is, that I’m not that convinced the CBs know what they are doing..
The thing is..
We have absolutely no idea what the CBs are doing — they will never tell us….
We see the tip of the iceberg — propping up markets and failing companies…. but who knows what ‘whatever it takes’ really involves.
Do they know what they are doing? In some respects not really — these are uncharted waters…
Are they just flailing away without a clue — certainly not — at least not yet — I am 100% certain that they have top minds working round the clock monitoring the patient — sticking plasters on whenever they see a drop of blood leak out …. they would have more people using super computers to ‘war game’ various scenarios — if we do this what are the implications … what about if try that policy…..
The military and state department would also be involved heavily — when we get unrest over a deteriorating economy how do we respond — what do we do if a nut job like Le Pen gets elected and tries to leave the EU —- I am also certain that they have assassins standing by and would hesitate to take out anyone who threatened to topple BAU….
Everything is at stake here —- no expense would be spared in trying to keep the patient alive.
Yup, on all counts. Agreed.
But my beef is with the theory. Whats in them superduper computers they’ve got. How do you design a war game? What exactly are the best minds money can buy? Who educated those minds?
When I hire somebody to do a job, it first requires me to understand what kind of a position I’m filling. What I want to accomplish by hiring that someone.
I’m just not so sure about the theory. That they got one. Its the right one. Or that they can implement changes to that theory when the time comes.
But since we have zero say in it, its nothing I loose sleep over.
The Elders most certainly understand the nature of this problem — the price of oil needs to be over $100 — but it cannot be — because that means growth ends.
There is of course no solution — those are immutable facts.
So what do you do if you are running the show — do you just sit back and let it play out? If so I reckon we’d have collapsed decades ago — probably when the US peaked.
Things like coming off the gold standard were no accident.
Creating the petro dollar was no accident.
Going to war in Iraq x 2 was not folly.
The Elders have think-tanks thinking through pretty much everything — they don’t just get drunk — come up with ideas — and if they still make sense the next morning – implement them.
They understand that seemingly harmless policies can have massive implications (butterfly flapping wings…) and they would understand that they cannot know the implications — that would be where experts in each area some into play — and the computer modeling …
For instance — if illegal immigration were stopped in the US what are the implications — ah more jobs for Americans – sweet! But nope – Americans don’t want to work those low paying jobs — so wages have to increase —- what are the implications of higher wages…… ah right inflation — then robots — then mass unemployment — ok — let’s not stop illegal immigration ….
I have no idea what the specifics are —- the scale of this would be beyond comprehension — but the resource issue is what has been the driver of foreign policy forever….
So they would always had advisers providing them with analysis of the situation.
Just like Goldman Sachs has thousands of analysts who provide the MD-level people with in depth analysis on anything related to a financial transaction — they turn things inside out trying to understand what is going on – and how to win. They would also have intelligence experts (generally former FBI, CIA etc… who are in the private sector and for hire) gathering info for them.
To think that the Elders are not at least as thorough as Goldman Sachs is hard to imagine … Goldman Sachs is on the board of the Elders… these guys do not mess around…. Goldman Sachs has a 1-5 ranking of all employees every year — and they cull the 1’s no matter what…. that keeps the pressure on…
Seeing as they understand the problem — and would have concluded there is no way to solve it…
Wouldn’t they say to their advisers — how do we delay the inevitable?
The experts on oil production would have presented a case for shale in 2005 as conventional peaked…. the economic experts would have worked out how to get shale out of the ground even though it made no financial sense —- the PR experts would have come up with hype like Drill Baby Drill — and Saudi America…..
Again – shale does not happen by accident. Shale should not happen. But it is happening. Someone had to orchestrate that.
We can also observe what is happening with the CB policies…. when everything was failing a decision was made that nothing TBTF goes down — that did not happen by accident … propping up the stock market is not an accident ….
The scale of the what is happening behind the scenes is immense — we are privy to a speck..
As Norman has pointed out in the past this goes beyond the specific decision making process — this is essentially an organism… a herd —- reacting to a threat to its very existence…
The organism is going to do everything in its power to try to stay alive…. it will scratch and claw and battle to escape the corner…
Humans are different to the proverbial cornered animal in that we have more sophisticated ways of fighting back…. we don’t just lash out like brutes as would a rat…. we have big brains … so are able to keep the beast off us with tricks and delaying tactics….
The end result is of course the same.
“not that convinced the CBs know what they are doing..”
The bigger problem is almost nobody knows what to do. That’s actually an improvement from the early days when the Club of Rome people were actively against any proposed solution to energy. At least the problem is recognized even if the solutions proposed (wind and solar) are useless.
Perhaps the CBs want Le Pen elected? Perhaps they know that the EU needs to be dismantled a this stage of the game? But the EU elites are unwilling to step down gracefully so perhaps the CBs have to approach this problem indirectly? Perhaps they also wanted Trump elected? Perhaps they have some very cunning plans up their sleeves and clever cards that they are holding close to their chest? When the overall organization is as bloated and as ineffectual as a beached whale, that calls for some serious downsizing at the executive, management and administrative levels.
“But I’m curious if we’ll see any real CHANGES in the system, before it goes down. Changes like scrapping pensions, health care, moving from publicly traded companies to community owned or coops. Discarding private banks for cooperative banking and money unions?”
Doesn’t this look like what the Trump administration is leading towards? The pensions and health care parts, at least? If so, giving the increased lack of security for the masses, wouldn’t “community owned or coops.” become more in demand? Maybe an inventory of abandoned factories as ways to experiment with the latter?
I’m afraid we don’t have time for ‘organic’ changes. We would need top down mega structural changes, by law, with big decisions like seizing the pensionfunds etc. etc.
But I doubt theres any such plans readily available anywhere..
When Canada Invaded Russia
http://dissidentvoice.org/2017/03/when-canada-invaded-russia/#more-66376
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Industry Analyst Predicts Grocery Store Closures Across the U.S.
The Atlanta Business Chronicle
https://www.planetizen.com/node/91780/industry-analyst-predicts-grocery-store-closures-across-us
Something to write about inflation and the power of exponential function.
Since 1913, the purchase power of USD drop from 100% to 4% today. The latest annual increase in debts for USA is more than USD1T. Just say that we use USD1T and a drop of value to 1%. We lop off 2 zeros from USD1T. That is still about USD10B. In 1913, the revenue for US government was about 11B. In other words is that if you use the old 1913 standard, USA today is is virtually issuing debts at 100% of revenue.
If you overlap the purchasing power (i.e. inflation), world population, energy consumption from 1913, it overlaps and it is exponential or even parabolic if you extend the timescale even longer.
Moving on to this moment in 2017, the increase of debts of any countries is compounded by
1. Spending to maintain the complexity and improved living comfort(i.e. visit the dwelling of a person living in 1700, 1800, 1900 and 2000 and see that living comfort increase due higher EROEI – wood, FF, etc)
2. Spending to maintain the complexity of bureaucracy (DHS not present before 2011). As people got used to item #1 above, they need systems to maintain it. The first nomadic kings probably live slightly better the life of a normal person at that point of time. Contrast to the life of late Roman emperors like Nero who fiddled while Rome burns (myth?). The US president in 1800s is having slightly better life than the normal people without any Secret Services. Contrast that to the Saudi King, who just because of one person, needs the entire village of people to serve him. All this is accorded by the high EROEI of oil.
3. Higher specialization. In 1913, the US government probably can buy a bunch of screws or nails for probably USD0.05 for 1 pound of nails. Today, you may have special nails or screws with special compounds for special purpose and this complexity is causing a huge increase of cost. A special titanium screw may cause USD100. Again, all these are accorded by high EROEI
4. Higher social expectations. Social security, socialism, welfare. Lately free phones, EBTs and now my perennial favourite/nonsense – trans-gender toilet. Humans has lost its way in terms of understanding that these are all related to high EROEI provided by oil. All these were never present last time
5. Higher expectation from life. Kids are so so so much more pampered as compared to 20, 50, 100 years ago. “child labour” is not present in the vocabulary of those living in 1800s or 1900s. It is part of their duty to help their parents in the work. Again, all these are accorded by high EROEI.
6. Doing things the complex way. For simple things, people do it the long and complex way. Some of them is due to bureaucracy, cronyism, corruption or just for the sake of showing their power. Building a hut in 1800s, 1900s is not a big deal. Get it done and it is yours. Now, you need to get this permit, that license, you need to get approval from this and that. You need to enforce safety this, environment that. People are afraid of being sued and have systems to check the other systems does not fail. Layer upon layer added. All because of high EROEI.
7. Everything is too far removed from source for people to be concerned of its implication, consequences and potential problems. Food is one of them. So far from the farms that we could not understand how energy intensive it is. Our clothing, smartphones, etc from developing countries with sub-standard wage and poor work conditions. Our use of electronics and the mining of rare earth which causes death by the thousands that no one knows. Every single thing is so far off that “anything bad is truly masked off”. Again, accorded by high EROEI
8. Our very short sighted mentality or even total ignorance just because it is not in sight, it is out of mind. Ever hear people say “If gas price goes up, I just cycle to work”. What they don’t see is the entire chain being affected by high gas prices (food, transport, other people’s job, etc). OR I can work remotely and it will save me lots of gas. However, working remotely is not less energy intensive.
One Google search is equal to turning on a 60W light bulb for 17 seconds
http://techland.time.com/2011/09/09/6-things-youd-never-guess-about-googles-energy-use/
http://www.telegraph.co.uk/technology/advice/10865650/How-much-energy-does-a-web-search-use.html
It boggles the mind that everything surround us is because of high EROEI. Waiting at red lights with the engine turned on – tens or even hundreds of millions of cars around the world is doing that every second. The street lights shining on the road at 3am so that it can deter thieves (not that it really helps) – multiple by the millions around the world. People leaving the door open or ajar and the cold/warm air enters causing undue energy bills – multiple that by thousands everywhere in the world. All the electric appliances on stand by mode – billions of it worldwide. People who forgot to switch off something (lighting, heater, computer, etc) – millions of it happening worldwide.
Honestly, I really have no clue on how to cut back so that we live within our EROEI (if given a chance, politically, economically and will power to do it). What will happen to the excess people who are doing all work (i.e. system check, government regulatory, etc) that high EROEI has accorded?
Interesting thoughts for interesting times.
p.s. I use EROEI and not EROI. EROI is not in my vocabulary. Energy is not an investment because money is fake (it is a claim to debts. if printed in large sum, it is meaningless). EROEI is energy returned on energy invested. Money is out of the equation.
Greatly summarized, sometimes we have to stop and look back how we got boxed in position of super elevated complexity, yet very (or none) degree of freedom to act.
‘Man only ever builds himself a cage. A lion – the man of The Way – bursts the bars asunder and sets him free.’
There’s a complexity meditation theme for the weekend! 🙂
Superb post — particularly that google search info….
And then there is the fact that we add nearly another Philippines worth of net new people to the planet each year….
http://cdn3.list25.com/wp-content/uploads/2014/01/169-610×360.jpg
http://www.prospektphoto.net/prospekt-new/wp-content/uploads/2006/08/060801RMAN002.jpg
fast eddie watch the movie logans run population could easily be kept in check if you had to check out at 30 years of age. its a great movie with a great concept of population control if the elders had any foresight they would have arranged an early check-out for all of us.
Death Panels…. I am all for them … until I fail of course
they dont make movies like that anymore
death panels are not always necessary
stupidity can work just as well
http://www.ibtimes.co.uk/man-electrocutes-himself-charging-iphone-bath-1612300
CTG
So true, all of it.
Alienation from physical reality has reached extraordinary levels.
I like to drop comments like ‘Good weather for the harvest’, or the opposite, into conversation and get the funniest looks in return, when it would have been at the forefront of that person’s grandfather’s mind, and even town dwellers two centuries ago.
Weather is still a big consideration on my mind. Right now I’m thinking, “should I plant my potatoes this week to give them a head start, or should I wait until after April Fool’s Day to minimize the risk of them getting attacked by a late frost?”
I am wondering if I should plant any winter crops at all …. as I may not be around to harvest them …
It gives something for you to do, and you get to watch them grow. We don’t understand timing very well.
Plant them as an insurance policy just in case you are still here when they mature, and as a social contribution to help others in the community in the event you aren’t. Even if the fuel ponds go up like fireworks on Chinese New Year, there are bound to be a few mutant zombies crawling around in the brave new world.
“Alienation from physical reality has reached extraordinary levels.”
And this is how you get people like Jeremy Rifkin talking about the “digitization” of energy.
Excellent analysis!
CTG people are just living too long that’s the core problem once that’s fixed a lot of our problems will vanish. if you look at what the elders have done to the food and water supplies you will realize that they have everything under control early check-outs are coming for nearly everyone all the elders need to do now is crash the system to bring in the next phase of their plan.
The Elders are a pretty sprightly bunch. David Rockefeller is still has all his teeth at 101, Henry Kissinger is ballroom dancing at 93, and George Soros, a youthful 86, is running color revolutions and philanthropizing on five continents. I’d love to know what supplements they’re taking.
You can only kill them with a stake through the heart…. very difficult to get close enough though
I’ve also always like EROEI rather than EROI. People just like to shorten everything but in this case 5 letters is better than 4.
EROI cannot mean anything else other than energy invested, the second “E” is redundant, what else could it be but energy. Doesn’t everyone assert that money is energy or more specifically a representation. But any amount of money cannot be a substitute for the energy we use in the real world. If “money” is worthless it can’t buy energy let alone invest in it.
The sun supplied the vast majority of the usable and stored energy (geothermal and tidal excluded) on this planet. Humans accessed and EXPLOITED the stored energy by expending less energy. This is all obvious and so is EROI. The “I” of course representing “investment” if the second “E” is included the word becomes “invested”.
What I ask is “what energy has ever been “returned” by anything else but expending energy of one form or another……..The first law of thermodynamics says so. Similar to any commodity, iron ore, bauxite or diamonds, energy represented by fossil fuels can be invested in but money cannot “return” energy, as in create it or exploit it.
The only way money can return energy is if it’s burned. Money if “invested” can return more money, IF interest rates are high enough, or share prices rise, or house prices rise….this is also obvious and what also should be obvious is that those same “things” and “added value” requires energy, namely high EROI energy.
IMO, referring to ERO-E-I instead of EROI actually encourages the thinking that money makes energy. If there is a difference I’d appreciate it being explained to me.
Money is debt. If debt gets down to the level of people who actually buy significant amounts of goods and services with the money made available to them, then debt helps raise commodity prices. These higher prices tend to encourage more extraction of fossil fuel energy. Growing debt (in the presence of cheap fuels) is what tends to move the economy forward.
The sun provides a lot of solar energy, but it is diffuse and intermittent. Trying to concentrate it and adapt it for our use takes a lot of complexity and cost. EROEI does not do a good job of estimating this cost, in my opinion. EROEI is a fairly limited technique, in my opinion. Among other things, it assumes that the cost of capital is zero.
“The sun provides a lot of solar energy, but it is diffuse and intermittent.”
It amazes me how many people don’t get this. In almost any puff piece about solar energy you’ll hear about the amazing amount of energy that hits the surface of the earth. Perhaps it’s the inability of the human mind to grasp the scale of the earth, as well as the scale of population and human fossil fuel consumption.
“The sun provides a lot of solar energy, but it is diffuse and intermittent.”
That’s the reason you go into space where the sun is easy to concentrate and steady. I am far from the only person thinking about this:
https://www.forbes.com/sites/brucedorminey/2017/03/18/trump-should-make-space-based-solar-power-a-national-priority/#3cbc812e3e69
This is the reason I have been willing to “give space solar a chance.” There are several academic groups looking at the issue. The timing is not good, but it is not good for any proposed solution.
There are far more people thinking about living on Mars…. a quick google search will bring up thousands of references to colonizing Mars …. let’s listen in what this whack-job has to say….
https://www.youtube.com/watch?v=vizCAWXoFhg
Here’s the thing you do not understand Keith — the MSM is a spin machine — it exists to tell you what to think… nothing more
If the Elders determine that the sheeple are getting nervous about the planet — they send orders to the MSM spin masters — convince the sheeple to believe that we can salvage this situation — see solar, wind, thorium, shale etc… —- and also convince them that there is a long term plan —- see mars colonies — see new earth like planets being discovered every six months or so….
You are being played Keith.
“You are being played Keith.”
I am more likely to be a player than played.
This from someone who is both ignorant and incapable of being educated.
You are not even very good at insults.
Keith — you sound like you are on the verge of cracking up…. are the facts and logic breaking you down?
Why don’t you bring out other impossible things that you have in your box… that you are working.
What about immortality? Are you working on that?
“What about immortality? Are you working on that?”
Of course. Going here in April:
La Jolla Aging Meeting: Inaugural Symposium (LJAM)
April 7, 2017, Salk Institute, La Jolla, California
http://www.salk.edu/LJAM2017
Expected to give a poster talk.
Nicotinamide riboside seems to be the first widely accepted anti aging substance. It’s a variation on vitamin B3. Last year Science had an issue with three articles on it, including one where they showed how it pushed out the age of death for mice.
As a bet, FE, you have never been to a scientific meeting. You might try it sometime, you meet some rather interesting people.
Keith, as a niacin junkie myself, I find it interesting that you are interested in nicotinamide riboside.
From what little I’ve seen on the Internet, it has all the hallmarks of a classic snake oil sales pitch. But that doesn’t invalidate the claims made on its behalf. It might be very good snake oil.
Then again, common or garden niacin (nicotinic acid) is very good too, If everyone over 50 to it regularly, the healthcare and pharmaceutical industries would collapse due to lack of demand.
Eureka!!!!
A 7 year old could have figured this out.
Skip this space solar bs — all we need to do is FOCUS the suns rays like kids have been doing for years burning bugs… or starting a piece of paper on fire…
We just take this simple technology — enlarge it — hold it in front of the sun — and focus the suns rays on a point on earth where we use it to boil the water and make the steam to drive the giant turbines.
I’m off to the patent office with this…. might not be posting for a few hours….
https://www.scienceabc.com/wp-content/uploads/2016/04/focused-rays-burn-a-hole.jpg
You know FE the magnifying glass idea is a joke. But, it is where we are headed if we need to keep growth alive on our tiny planet. We will literally cook the planet. It isn’t C02 I am talking about – it is the sheer number of heat engines that will be needed whose waste heat will literally boil us.
Imagine all those rocket launchers that will be needed daily launching more and more solar panels into space. And all those rockets taking trips to Mars to deliver water, food, gas, oil, groceries and goods made in China to all the new Martian inhabitants. All that lovely heat.
” waste heat ”
It’s not hard to bound the waste heat generation. It’s also been done both in SF and in the science literature. Larry Niven’s puppeteers, for example, moved their planet away from its sun for waste heat reasons.
For the Earth, Robert Kennedy (of Oak Ridge, TN) and others have published a proposal in the JBIS to build sunshade structures in the L1 location between the sun and the Earth. Google Dyson Dots to find the article.
If we replaced coal and nuclear plants with power satellite rectennas, we would reduce waste heat from around 100% of the plant output to around 15%. Most of the waste heat rejection from making energy would happen in space and not affect the Earth.
We can doing many things but how muchy cost??? Very muchy.
Even 50 buck oil is too muchy to run BAU…..
Is it possible to purchase beach front land in the arctic?
I can’t find anything… http://www.royallepage.ca/en/nunavut/
As long as something has been done in sci-fi I am confident it will work in the main simulation.
“Larry Niven’s puppeteers, for example, moved their planet away from its sun for waste heat reasons.”
Yep. Nailed it. Keith can’t tell the difference between (science) fact and fiction.
I said it was SF.
If you wonder why Larry Niven writes such good SF, he has a degree in physics.
The point is that waste heat is a well understood topic. If you want to read a story that depends on this, Poul Anderson wrote one of the best about a planet named Satan. Eric Drexler and I reference this story in our paper on radiators for O’Neill’s Space Manufacturing Conference in 1979.
“Doesn’t everyone assert that money is energy or more specifically a representation.”
Everyone? As recently as yesterday I read ‘news’ that we are in the third year of decoupling.
folks can put out whatever feelgood news they like
but it is not possible to decouple real money from energy within the economic system
“I read ‘news’ that we are in the third year of decoupling.” – Maybe they mean that money is decoupling from energy because of the massive run-up in debt. No matter how much money is printed there isn’t enough energy available to run the economy. Then, I agree, money is decoupling from energy.
If money and energy are decoupling they the end is nigh. Without sufficient (and cheap) energy to provide the goods and services that money buys – then what good is money? Money just make it easy to exchange disparate goods and services. By getting money you are promised a future availability of energy to create the stuff you want to buy with it.. It is this promise that is being broken as money decouples from energy.
The “Elders” want you to believe that money (in and of itself) has value but it does not.
Such a great post CTG. This is what I come here for. One has to do a lot of work to break through all the abstraction and obfuscation that makes civilization possible.
The plants growing in your garden, yard and nearby woods are converting and storing solar energy. Seeds and plants are cheap, too.
True, in theory, partially in practice..
Because in this universe, virtual simulation or not, the equation must balance out.
So, in the real world for example wood has quite low energy density for heating, hence lotsa work to prepare it first. Moreover in next steps you have to choose between either dirty, laborious and cheap stove or very clean – efficient but very expensive one (be it in hitec or materials and craftsmanship)..
Similarly with draft animals, true you can feed raw hay (cut, dry, storage – several activities), have to locate your regional trainer-breeder, blacksmith and diy healer (not easy nowadays) and craftsman in the overall gear repair etc.
This is universe of and for “doers only”, nothing is for free in the end.
True. Best to stick to what you have tried yourself. It’s always harder to do it than imagine it. Given all the obstacles you list, seeing what one can do oneself–no animals, unless you can get animal service like manure for free–could be the most realistic way to begin. It helps, too, to think of soil as something you assemble or make. It’s amazing what plants can grow in, and where. Here, the greatest asset is is “abundant” watering.
In terms of batteries, I recall early mid 2000s reading at very very obscure website information about some breakthrough lithium cells from China. The general article/website focus was about lead acid electric scooters or something fanboyz, and all of the possible people they could have interviewed there on the battery was actor/director/activist Steve Seagal, lolz.
Well, in roughly 2-3yrs these brick cells, later globally famous in yellow color, appeared firstly in tiny order batches with mixed reviews on western fan/diy sites, and after initial refinements ~10yrs they took the world over. Nowadays, you can find them in buses, oem and diy solar storage, trucks and cars/boats, and so on.. you can order/buy it everywhere local.
So, the times are obviously a bit more faster today, but any lab and prototype promises will take 5-7yrs at the minimum into some level of decent quality production run which could be deployed.
Obviously, scale-able large capacity format targeted for power utilities, could be a very theoretical game changer, but the timelines of adoption won’t be much shorter anyway.
ps lithium today is already very good enough and affordable to last more than a decade (for realistic small scale application), so I very much doubt anything can realistically undercut them on price in the very near/midterm.. and if so, it would be some sort of giant form factor liquid types of electrolytes for big power utilities only, so as an individual no chance..
Wake me up when it scales.
The thing is… that even if Elon Jesus or anyone could create a storage battery that was cheap …
It would not change the story….
The world runs on cheap to extract oil —- and we are out of gas….
so really the problem is how do we get the world to run on expensive to extract oil the only solution is a major ramp up in debt by the world’s governments after we first burst the bubble or collapse the economy
Of course, if and when your lithium batteries explode and burn the house down, it will be a great consolation to know that the replacements are so cheap!!
https://youtu.be/jTbUP0sGQT8
this is one of the possible outcomes why it’s not a good idea to place your laptop on charge and then leave the house for the day. rare but potentially catastrophic.
The $100/kwh storage has been achieved?
https://www.sciencedaily.com/releases/2017/03/170303091411.htm
Well, again, I must ask: And what about the installation, service costs etc.? Will the workers producing this cheap storage get adequate wages when todays wages are already low? If you want it cheap, usually somebody else gets less…
Moreover, our main problem still seems to be low wages, pollution, accumulating genetic mutations. We must spend more and more energy on controlling them.
The low wages, the pollution and the accumulation of genetic mutations – all of them indicate the contraction. To fight them, we need more energy than many imagine. Not to mention the survival in cold areas…
An abandoned manganese mine in my surroundings: It was abandoned because the mining was uneconomic already in the beginning of the 20th century.
http://www.nadler.estranky.cz/img/mid/1095/11.jpg
Source: http://www.nadler.estranky.cz/fotoalbum/04-bradlove-pasmo/manganove-zrudnenie-na-povazi/
And what countries mine the manganese today?
http://investingnews.com/daily/resource-investing/critical-metals-investing/manganese-investing/op-manganese-producing-countries-south-africa-china-austraia/
More details about this battery here:
http://www.nature.com/articles/ncomms14424
And the source of my info is here in the comments:
http://peakoil.com/enviroment/were-going-to-be-okay-humans-not-destined-for-extinction
The article on the peakoil website sounds like it was written by The Onion…
Mining manganese today is not economical, as the prices are too low:
http://www.crugroup.com/about-cru/cruinsight/south_african_manganese_industry_at_a_crossroads
Some facts about the manganese:
https://pubs.usgs.gov/fs/2014/3087/pdf/fs2014-3087.pdf
“Although there are large resources of manganese-enriched rock in
the United States, mostly in Maine and Minnesota, their manganese content
is substantially below manganese ores readily available from other parts of
the world so they are presently uneconomic to mine.”
Carl, the groundskeeper in caddy shack summed up the importance of manganese quite nicely.
https://video.search.yahoo.com/video/play;_ylt=A2KLqIDqG81YnSAADH9x.9w4;_ylu=X3oDMTByN2RnbHFoBHNlYwNzcgRzbGsDdmlkBHZ0aWQDBGdwb3MDMw–?p=bill+murray+buddies+for+life+caddyshack&vid=168ca289c388934383924662a1c2bafa&turl=https%3A%2F%2Ftse1.mm.bing.net%2Fth%3Fid%3DOVP.5p64B3PHrY2_h3sl4On4NgEsDh%26pid%3D15.1%26h%3D225%26w%3D300%26c%3D7%26rs%3D1&rurl=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DxrcgjMJmvNg&tit=Full+Playing+Through+scene+by+request&c=2&h=225&w=300&l=282&sigr=11buh1ijd&sigt=115ckikf3&sigi=12rihdnr6&age=1190861520&fr2=p%3As%2Cv%3Av&fr=iphone&tt=b
But if we need a LOT of manganese to create bananillion kwhs of batteries shouldnt prices rise?
Not necessarily. Need has to translate into affordability. Look at all of the low commodity prices right now. Not enough non-elite wages; not enough rise in debt. The whole system needs to fix the problem.
I am sure that someone will come up with a cheap substitute. That is what economics claims, after all.
Also, manganese prices seem to follow the same pattern as all of the other commodity prices. http://www.infomine.com/investment/metal-prices/manganese/ How do we get the prices high enough to encourage adequate production?
I hope that they have figured out that summer to winter storage is needed, not just overnight storage. Also, a way to transform huge segments of the economy to electricity. Otherwise, wind and solar are just an expensive add-on to our current system, with or without batteries to reduced the spikes that occur at certain times because of appliances and lights being turned on and off.
Siemens is working on a system to convert electricity into hot air and then back to electricity again. It does sound quite expensive and complex.
“After having been converted to heat in rock fill, excess wind energy is stored and protected with an insulated cover. When there is a need for additional electricity, a steam turbine converts the heat energy back to electricity”
http://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2016/windpower-renewables/pr2016090419wpen.htm&content%5B%5D=WP
” The researchers expect to generate effectiveness of around 25%”
Oops! That means wind farms will need to be 4 times bigger than otherwise.
And batteries billions of tons.
Would probably make the Earth wobble.
If we do not have huge amounts of cheap stored energy, then we have to mine minerals dispersed in the rock and concentrate the energy dispersed in the environment.
Well, that does not sound good, when globalization and long transportation routes of various parts are needed and included.
@ Harry Gibbs
Responding to a small discussion about the deterioration of art/beauty that you and Xabier had a while back. I’d like to try and look at it as mirroring the fossil fuel/industrial/capitalist program of the last 250 years. After the Dutch 17th century landscapes and the escapism of much 18th c. art, the 19th c seemed to have an escalating conflict with the burgeoning industrial world. Most impressionists were celebrating the last dregs of the natural world, and cubism, dada, and the Bauhaus seemed to turn their backs on all that demolished landscape beauty to create art out of completely industrial constructs. Builders and developers later took over (misappropriating Bauhaus simplicity), expanding their squalid realm as oil took off in earnest after WWII. Many say this was the end of art. Architects are probably useless for our current reality. I keep thinking we must now formulate ways to recreate beauty in line with our current energy/economic reality. The ubiquitous wasteland mess you mention can be re-seen and reconfigured, a job for the (conceptual) artist.
So art might not be dead, but so different as to be unrecognizable as art anymore. And what it looks like is more in my imagination than physically manifest. 🙂
Artleads, I guess that begs the question – could humans have created a more beautiful industrial civilization had we been more present and less mind-dominated? I think our biology and the laws of physics were always going to push us into using fossil fuels and that then becomes self-perpetuating but could we have done it better?
Or perhaps the turbo-charged insanity of industrial civilization is just fundamentally inimical to grand flowerings of creative stillness. That seems likely to me.
“… could humans have created a more beautiful industrial civilization…?”
Sweeping (FW-based) suggestion: Everything is based on energy, even thought. I question prioritizing thoughts about what might have been. It’s a logical activity, but of limited utility? Part of the mind trap is thinking that we do or can understand a lot about what got us here. The priority for thought (IMO) is about what’s immediately in front of our noses. The past 250 years of fossil fuels has a certain flow to it–there is a sort of beginning, middle and end, incredibly hazy as even that might be.
I don’t think we know enough about ourselves or anything else to figure out what we might have done differently. John Ruskin was not the only one sounding the alarm about industrial ugliness and what it meant for the broader culture. Two centuries on from his birth, one can feel how late he was even then. The Pre-raphaelites, in their abjuration of ind civ, seemed like the preppers FE talks about, who are more immersed in BAU–the energy flows of a global empire–than they thought.
So I think that how we’re wired, and how a hyper complex, self-organizing civilization may work rules out anything that we could have changed significantly.
But FWIW, I think civilization had to get this bad in order to change. (Which is not to imply that it WILL change and not just die altogether). Civilization now is mind dominated (and male dominated), and I could see the implied hardness softening. I can envision a civilization made entirely out of soft things and modes of behavior. Not dominated by money, economics, large scale (there is absolutely nothing to be done within a global or significantly large scale). Ironically, when people talk about reducing human population by 90%, they’re still thinking in terms of global scale!!!!!!
So, no again, I doubt that there was much of an option for a different outcome for civilization. But we have an INCREDIBLE need and opportunity to do something different now. 🙂
This is a fascinating topic. I’ve long believed that art becomes more experimental and radical when resources are plentiful. I’m not old enough to remember the post-WWII era, but I have collected antiques from that period for almost my entire life. I feel that the art, architecture, and design from the middle of the 20th century reflects an extreme optimism for the future that we have since lost (with good reason). The largest city in the region where I live tore down their entire city center in the 1960s because it was time to look toward the future — “urban renewal.” There are famous photos of preservationists literally chaining themselves to the old buildings to try to save them. But in general, it was fashionable to get rid of all that “old stuff.” The past held nothing particularly interesting; the future was all we really needed. And it was a bright future indeed.
When resources become scarce, on the other hand, the past tends to become more romantic and attractive. During the 70s, there was the oil embargo, and a turn back to more “country” style decor and art that reflected a nostalgia for another age. I’m not sure if this trend is entirely consistent, but I think the tendency is there.
I think mid-century furniture and art holds a certain appeal to me because it reflects that feeling of plenty and optimism that is impossible to recapture in our zeitgeist.
I suspect that the paintings of the Romantic era, which so frequently feature man in tiny scale compared to nature, hold an appeal to us because that is also a forgotten way of thinking that is difficult to recapture.
JMW seems to have become less concerned with figurative painting and classical scenes and more concerned with steam engines and elemental forces as the Industrial Age began to take hold in Britain. His painting of a steam ship in a storm is thought to be an attempt to depict magnetic energy in the clouds and swell. Beautiful.
If Mike Leigh’s Mr Turner is to be believed, he was also very concerned about the invention of the camera obscura. That more than anything has influence art since, I’d suggest.
In our time I think the great art is probably to be found in film. A medium that brings in skills and talent from all creative fields shouldn’t be written off as merely commercial rubbish.
Adolf in his personal places collected and displayed Italian masters depicting the ruins of the Roman world, go figure.. His times of ~1890-1945 were indeed quasi collapsnik boom and bust period (world wars, revolutions, empires rising and falling, millions properties and peoples burned to ground, .. ) study in itself..
May I suggest The Geography of Nowhere?
Geography Of Nowhere
The Rise And Declineof America’S Man-Made Landscape
By James Howard Kunstler
The Geography of Nowhere traces America’s evolution from a nation of Main Streets and coherent communities to a land where every place is like no place in particular, where the cities are dead zones and the countryside is a wasteland of cartoon architecture and parking lots.
In elegant and often hilarious prose, Kunstler depicts our nation’s evolution from the Pilgrim settlements to the modern auto suburb in all its ghastliness. The Geography of Nowhere tallies up the huge economic, social, and spiritual costs that America is paying for its car-crazed lifestyle. It is also a wake-up call for citizens to reinvent the places where we live and work, to build communities that are once again worthy of our affection. Kunstler proposes that by reviving civic art and civic life, we will rediscover public virtue and a new vision of the common good. “The future will require us to build better places,” Kunstler says, “or the future will belong to other people in other societies.”
OK, except that I’m not seeing this future of building much of anything. Modifying everything that’s there now, using scrap and intelligence…that I do see. And the most brilliantly designed shanty town add-on’s ever imagined.
Kunstler = King of Koombaya …
He either thinks:
– we had a choice to stay ‘frozen in time’ in the 1880’s or 1930’s or 50’s or whatever but choice not to … ridiculous
– we can after post BAU return to a more ‘rational’ way of living — doing everything by hand — ridiculous
James – I know you will read this — so what is it – do you really believe this crap — or are you just peddling hopium like Martenson to make a quick buck?
What about you Chris — you must read FW — otherwise where would you get the few good ideas that you post on your site?
Afterall — FW is the Rolls Royce of doomsday blogs — you guys are all reading it.
Agreed, you can’t turn back the clock to a simpler time because everything we have today was made at the hands of oil, cheap to extract oil. In fact the system is so complex because of what we have achieved with oil that you can’t dial it back because oil is in 99.999% of what we need to survive.
also, complexity really does increase. just go to the grocery store, instead of one kind of triscuit snack cracker, the “original flavor”, there must be 20 different kinds now, including light salt, no salt, etc. subcategories. almost any product that seen some success now has about 10 new variants. there must be about 100 or more flavors of ice cream, used to be plain vanilla, chocolate and strawberry. god only knows how many brews of beer, types of toothbrushes and dental floss. even cigarettes, which have practically been outlawed.
i also understand there are a lot more variants of grass than back in the day i was into that stuff.
“FW is the Rolls Royce of doomsday blogs”
I.e., mind numbing nihilism.
I wonder if this is Gail’s intent?
Regardless of her intent ….. that is what it is.
https://www.rolls-roycemotorcars.com/content/dam/rollsroyce-website/social/01_Social_share_image_v3.jpg
BTW — I have a solution for the space radiation…
http://www.fotothing.com/photos/13d/13df589572cd284989f492d7fd534fe7.jpg
https://s-media-cache-ak0.pinimg.com/736x/1c/a8/91/1ca8916439889a5d9080574677862110.jpg
JHK blazed a trail for the ‘doomer’ community and remains one of the brighter stars in its firmament. I think we can forgive him his somewhat romanticised vision of what is possible after our ‘rapid and irreversible loss of socio-economic complexity’, as David Korowicz puts it.
I agree. I learned a great deal from JHK, especially “The Long Emergency.” He didn’t just follow the standard “Peak Oil” narrative.
JHK has to write things that people will buy if he is to support himself. That may affect how he writes.
Nothing wrong with that….
But … there is no such thing as diplomatic immunity on ZH…. everyone is fair game…. head up .. or else….
http://blogimages.thescore.com/nhl/files/2013/03/163051107.jpg
If I recall correctly, Kunstler used a pandemic as a plot device before the beginning of his fiction series. That was a convenient deus ex machina move to create the plot he desired — it decreased competition for resources and eliminated long periods of suffering due to starvation, lack of medical care, etc. I think if he had portrayed that initial period in his books it would have seemed a lot more realistic (and dreary).
His books are, therefore, probably more of a depiction of what might exist years after a collapse rather than in the event itself. It follows that if humans survive this to any significant degree (and yes, FE, I know how you feel about this), we will need some kind of social organization. That that social organization could mimic something from an earlier age isn’t necessarily surprising. I agree that some of the 19th century nostalgia in his books is unrealistic and unconvincing; for example, if millions of people have died off and left their material belongings behind, there won’t be much need to produce anything other than food for a VERY long time. In fact, food production and obtaining clean water and heat will probably become the chief preoccupations of anyone left behind after collapse, and the degree of human labor involved might not leave time for a whole lot of other activities. Feudalism might be a more accurate comparison than the golden years of US expansion westward.
I suspect that each of us who has come to believe that collapse is imminent have done so because we are disillusioned with BAU in some sense, maybe able to see the ugliness underneath in a way that others can’t. We are not so emotionally attached to the status quo that we engage in total denial that it will be gone. But the interesting thing is that we then become emotionally attached to our vision of collapse. One of the reasons that I find this blog more trustworthy is that Gail doesn’t focus on her personal fantasy of what the future will become, and in that sense, I think avoids a lot of bias.
“disillusioned with BAU in some sense”
Definitely. Though every so often I like to marvel at what “BAU” has created, and view things from the perspective someone transported from the 1700’s might. The other day while out on a walk I was staring in awe at the cars barreling down road. How amazing is gasoline? Almost 30,000 calories in one gallon for just two bucks! Enough to power a human for 2 weeks. And the world burns about 10,000 gallons of this stuff every second.
What amazes me is that when I look at a multi lane highway filled with thousands of vehicles … and consider that is happening many thousands of times across the world …. and has been happening for a long time…
Where is all this oil coming from?
Maybe there really are elves in the centre of the earth manufacturing it…. well if that is so … then they must be pretty stressed out — because we are using faster than they can make it!
https://sc01.alicdn.com/kf/HTB1H7JCKVXXXXa2XXXXq6xXFXXXc/Elf.jpg
We know that historically with collapses, there have often been epidemics that have greatly reduced population. Poorer nutrition is one contributing factor. Poorer sanitation may enter into the equation as well. It is a reasonable way to expect things to work out, if population is to be reduced down to a number that is more within the carrying capacity.
Once such a change happens, job opportunities for young people tend to open up. The problem of too many people for resources disappears until population rebuilds.
I don’t see why we have to wait to start living our best scenario for decline-to-collapse. To the contrary, doing much more than is called for immediately would be preferable.
Trying to survive a collapse is not promising, given how our culture works. So, the pivot point, if any, would be to greatly magnify the effort to change the culture now, while cognitive dissonance and BAU are in such command. One small glimmer of possibility for cutting through such “obstacles” is in how much we naked apes love to imitate each other. Someone starts something, and if it looks good, interesting, novel, the other monkeys want to do it too. One big problem with that is, if the thing they copy was meant for a money-less system, they will undoubtedly use it to make money.
Doing something “good” to make money from, however, could have a transitional benefit–nudging the culture in a more survivable direction. Hard to say at this point. If, say, people start finding ways to make money from cardboard boxes, stores might start selling them instead of “allowing” me to pick up a few free ones here and there. And at what stage of decline or near-collapse would hot shots with big machinery start digging up landfills to make money?
So JHK’s decomplexifying scene comes with many questions. If each small community could decomplexify and live within mostly local means, they would still greatly need to trade and cooperate over considerable distances. Life might only be possible if local, non-complex groups could access tools, information and equipment, and if these were systematically available to local groups who couldn’t supply them themselves. Nuclear equipment would have to be safeguarded even with less complexity in local groups.
So what might be required is a lot better organization and system “globally,” and a lot more decomplexification going on locally at the same time. I prefer aspiring to something like that over other scenarios like putting chips into everybody to control them, or killing 90-odd percent of humans, or spreading genocidal diseases. Or wishing on Mars.
Or try to replicate the collapse situation now by taking the Fast Eddy Challenge…
A dry run ….
Identify weaknesses in your plan of action — and rectify them — while Walmart still has prepper stuff on the shelves….
“Disillusioned with BAU”. There is certainly some truth to this – either unhappiness with BAU or with personal circumstances (or both) can expose a chink in the complacent psyche’s armour and allow one to assimilate the reality of our predicament – “The wound is the place where the light enters you” [Mevlana Rumi]. This can hold true both spiritually and intellectually IMO.
I agree that the pandemic wasn’t necessarily unrealistic in and of itself, but the characters in the book did not seem to be suffering from problems like malnutrition or lack of sanitation. I don’t remember those issues being discussed except in passing. The disease was portrayed more like a black swan event. If I am correct in remembering this, the pandemic killed women in particular, leaving him to write almost exclusively about male characters.
His blog comments section tends to attract a lot of far-right commenters, probably because his vision of collapse is very patriarchal and shows a nostalgia for a time in America history that the far right shares. As I said, those who are disillusioned with the current culture in some way become attracted to a particular vision of collapse, and for that demographic, Kunstler’s vision holds a definite appeal.
Let me guess — in these books:
– there are no people with tattoos
– no men with hair below the ears
– no fat people
– everyone is white
Sceadu wrote,
I suspect that each of us who has come to believe that collapse is imminent have done so because we are disillusioned with BAU in some sense, maybe able to see the ugliness underneath in a way that others can’t. We are not so emotionally attached to the status quo that we engage in total denial that it will be gone.
I’ve never seen it said like this before but makes sense to me, at least in my own way of looking at the world around me. I’ve never stood with the herd & have always found everything about IC soul destroying even though I’m well aware I’m born from cheap energy.
I’ve really enjoyed the discussion between you, Artleads, Harry Gibbs & Xabier on this topic.
Thank you,
Brendon.
On one hand we have Paris — and American Idol….
But on the other we have nice beds… nespresso coffee capsules…. cars trains and planes… pizza delivery …. air con — fire places…
If I had to tally things up — I’d say the ++++ of BAU massively outweigh the negatives.
BAU forever — even if it means that all that is on the teevee is reality programming …. we can always just :
http://blog.massscheduler.com/wp-content/uploads/2014/09/p803769086-4.jpg
“Or try to replicate the collapse situation now by taking the Fast Eddy Challenge…”
But based on what I’m hearing, no one can survive collapse. The FE challenge scenario is too rosy? It assumes that *individuals* have a shot at survival if there is nothing to replace Walmart and if they can somehow live with no fossil fuel products or chains. That strikes me as impossible for many reasons, nuclear catastrophe not the least.
I’m seeing two kinds of challenge. One that falls just short of the FE challenge for the individual, and the other to find a way to maintain a local (simultaneously with an indispensably-global) form of basic industrial production chain (outside of BAU).
My rural community has been facing a rash of recent robberies, and in short order citizens have come together to form a neighborhood watch. All using Facebook as the means to organize. I saw today that someone is offering a class to teach locals how to use guns. I think it’s best that communities start doing such things now, even without being robbed. If they don’t set up alternative programs while Walmart and FB are here, then a sudden crash might cause all sorts of unpleasant (and fatal) feedback loops before anyone can think what to do.
The thing is…
I am convinced that if we had not harnessed the power of coal in the 1800’s we would have collapsed into a very primitive existence…. because research shows (I won’t bother posting all that again) the world was facing a massive deforestation problem.
Trees were what powered the agricultural revolution — we used them to build stuff — to make tools and weapons — to keep warm etc…
The BAU Kunstler references was no more sustainable than the oil fired BAU we have now — it would have ended in total collapse without coal.
I am not clear as to how we could ever return to that point in time — and expect a different outcome?
7.5 billion people will hammer the forests when BAU ends — and if anyone survives — we’ll quickly be back on the path to total deforestation …. because this time — king coal will not save the day
I read The Geography of Nowhere a few years back. The one thing about it that I found particularly insightful is how Kunstler talks about how we transitioned from buildings created for posterity, as a sort of legacy, to “purpose built” buildings that exist only for the benefit of one company. For example, not far from where I grew up, there is an abandoned Burger King. No one wants to occupy it — it’s a building with such an obvious connection to a brand that it can never really become something else. The building wasn’t open very long, but now it’s essentially a waste of resources. Contrast this with merchants who built a downtown building with their family name on the cornerstone, knowing it would survive and serve its purpose for generations. Our financial system has made obsolete any pursuit other than sheer greed and blinded us to any real sense of posterity.
This goes as well for our houses. One sees TV programs on Grand Designs where the project is designed to uniquely be suited to the clients and indulgently as well. Selling such houses becomes a matter of hoping someone comes along with very similar wants, or the house gets massacred to make way for the new owners own agenda. Very wasteful, but as we are now in the Decadence stage of our civilization, its to be expected. Look around at all the vanity projects, like museums and stadiums and shopping malls and holiday resorts, that’s where money goes today. Tomorrow they will be stranded assets.
I really hate the “greed” word.
What you call greed is the fact that our economy needs exponential growth to stay stable.
RE-PURPOSING, AND REPAIRING ITEMS INSTEAD OF MAKING NEW ONES NEGATIVELY IMPACTS GROWTH. It’s possible ,at this time, for industrial civilization tomake a service out of repurposing and repairing defunct items but it remains to be seen how it would be any difficult from recycling Recycling may have been practical in the early twenteith century but not with today more sophisticated products, which use trace amounts of minerals that cannot be recycled. Many components of smartphones cannot be recycled.
I suspect a repairing industry would present similar problems to recycling. More repairing could increases costs or makes meeting growth requirements (to pay out dividends, service debt, provide more services to a growing population) more difficult.
Totally agree — greed needs to be removed from the dictionary…
Or perhaps redefined as ‘the innate driver that allowed us to not have to live in a cave without a nespresso coffee machine’
Every animal has this innate driver…. my dog always wants more …. the difference between me and him is that he does not know how to open the fridge door.
For those who question whether or not ‘greed’ is innate — tell me that if I had USD20M to give to you — that all I need is your bank info and I will make the transfer today — that you don’t want it.
It’s not ‘greed’ that is the problem — it is the fact that we worked out how to build a fridge and open the door.
Some might argue we would be better off if we did not evolve to be able to think….
https://notallowedto.com/wp-content/uploads/2015/09/human-dog-hybrid.jpg
Defining “greed”; it is not merely the exponential growth we need to keep the economy afloat. Greed means overdoing it etc.
As to repairing stuff, it can only negatively impair growth if you define it out of the picture. Repurposing our houses would come into GDP calculations. Maintenance expenses can be tax deductible in investment properties. Repairing your toaster would save on a new purchase but it may be more economic for you to do the repair.
I think that greed is distinct from ambition. I see greed as more of an “I got mine, so screw you” sort of impulse. Desire for a better life need not include a sociopathic disregard for how this affects everyone and everything else. It is that second part that I find troubling. Humans are social animals — language is one of the main features that separates us from the rest of nature. We did not arrive where we are by completely disregarding the welfare of other members of our species. Our current situation allows us to imagine that we don’t need other humans to survive, ignoring the large supply chains that contribute to our survival and only paying attention to our solitary trip to the grocery store. Individual greed, in its purest form, is a hindrance to human progress and welfare, not its underlying motivation.
ejhr2015
“As to repairing stuff, it can only negatively impair growth if you define it out of the picture.”
What do you mean by this? That you don’t see it for its economic function?
“Repurposing our houses would come into GDP calculations. Maintenance expenses can be tax deductible in investment properties. Repairing your toaster would save on a new purchase but it may be more economic for you to do the repair.”
Economic as in enabling you to do other things with your economic resources? I’ve never heard it explained how individual thrift benefits the broader economy, although I’ve always had the impression that it does. Then again, given our current world, waste seems to end very badly for the broad system. Despite so many benefits lower down in the system, benefits that are correlated to a vicious cycle–more growth, more benefits, more waste, more Ponzi–till the end.
See if I can be clearer. By saying repairing stuff, like a toaster, I mean it is likely to be work you undertake yourself without payment. So it doesn’t appear in statistics. Home renovations have laws and regulations requiring signed contracts. They will appear in Stats. This doesn’t cover every possibility, but should generally be right.
Lots of things don’t figure in official economic calculations. Housework takes a lot of time. It benefits the economy, but as it’s unpaid mostly, it doesn’t get mentioned. That should be remedied. A UBI will allow housework etc to be included in economic calculations. In fact it would be a wise move as a UBI needs to be approximately revenue neutral. In so doing it would not push inflation into a danger zone. The federal government can fund this w/o borrowing or taxing so it’s eminently do-able, and should be.
I thought the point of UBI is that it wouldn’t be revenue neutral–simply more debt, that you attempt to get back to individuals.
We badly need inflation to get prices up to what producers require. Getting rid of inflation is a non-starter.
You are right about that–although we have a lot of restaurants in old Pizza Huts, and I know of a currency exchange in an old Burger King. I see people selling used cars in what was the parking lot of another fast food place.
I also see Burger King rebuilding their old building, simply to have more glitzy styling.
Sceadu writes
” I see greed as more of an “I got mine, so
screw you” sort of impulse. ”
What you are describing doesn’t really exist. Humans are social animals, which means groups of people go have an impulse similar to
“Our group has ours.
We don’t want to weaken our group or diminish our wealth by sharing with you.
We are doing better because we are better than you.
You are doing worse because you are inferior to us.”
This not distinct from ambition, which is an “ardent desire for rank, fame, or power” Ambition is not distinct from competition . Competition not distinct from greed.
They are similar impulses that create a world of winners and losers.
Humans have an innate need to compete because that is from what we derive our a large portion of our self-worth and how we, an other animals deal with scarcity. We glorify winners and shun losers. No attempts at “human progress” have eliminated our desire for status. When we aren’t declaring war on each other, we are declaring war on the natural world and we call it “civilization”.
How the Golden State went green.
…Today, California can claim first place in just about every renewable-energy category: It is home to the nation’s largest wind farm and the world’s largest solar thermal plant. It has the largest operating photovoltaic solar installation on Earth and more rooftop solar than any other state. (It helps to have a lot of roofs.) This new industry has been an economic boon as well. Solar companies now employ an estimated 64,000 people in the state, surpassing the number of people working for all the major utilities. California has attracted more venture capital investment for clean-energy technologies than the European Union and China combined. Even the state’s manufacturing base is experiencing a boost; one of California’s largest factories is Tesla Motors’ sprawling electric-vehicle assembly plant in the Bay Area.
All of these advances have undercut a fundamental tenet of economics: that more growth equals more emissions. Between 2003 and 2013 (the most recent data), the Golden State decreased its greenhouse gas emissions by 5.5 percent while increasing its gross domestic product by 17 percent — and it did so under the thumb of the nation’s most stringent energy regulations.
It also significantly increased its imports of energy from outside of the state. You have seen my California electricity graph, no doubt.
California ranks 8th highest in electricity price in the nation. It seems to be becoming more dependent on its neighbors, because its locally-produced electricity is so expensive.
California Oil production also declines year after year. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpca1&f=a
I was surprised to see this cartoon on The Spectator website
https://spectator.imgix.net/content/uploads/2017/03/53_18.03_SA.png
For those who follow Gerald Celente, here is his latest report. He is a trend forecaster recently snubbed by the MSM due to his non conformist approach. I enjoyed his reports and updates and anything is better than the typical talking heads. Unfortunately Gerald was hot on gold for too long, expecting it to go to $2500 or higher. He was on the mark about trends like buying local and buying organics for example.
In this youtube report he has the big issues all sorted out. There’s a glut of oil, Alaska is awash in oil, there’s too much demand etc. Looks like Gerald has not been reading Gail’s FW.
Not seeing Alaska “awash in oil”, in fact I’d presume the numbers may be suspect because throughput<350k per day means shutdown, which is approaching regardless.
It's discouraging when all data becomes dubious.
http://alyeska-pipeline.com/TAPS/PipelineOperations/Throughput
I just have to say I’ll miss Glenn he’s been a good proxy for the average man a true believer. Reality is often too much to handle. Just like Cervantes man in the mirrors forcing one to face reality can break them. Windmills are Dragons Glenn don’t believe FE.
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Lists that deal in this subject matter naturally tend to attract all sorts of unstable posters like Glenn. Having been on Jay Hanson’s many lists over the years I know that it makes for a more enjoyable experience for everyone if you keep such individuals off the list.
It is strange. I often call myself “stupid” when I do something idiotic. Does this mean I can sue myself?
++++++++++++++
We come here to avoid people like that….
Gail, the y axis of figure 13 is off. The highest value 3500 KWHr at 0.25$/KWHr give income of $875 per year. That is using a highly loaded end residential end user rate.
the elders know what must be done to save BAU crash the financial system to bring such goodies as bail=ins, digital currency and negative interest rates this new world order will provide the command economy the fed have been dreaming about say bye bye to the middle class and say hello to a level playing field for all consumers.the elders know that the middle class will not go down without a fight that’s why they are preparing for that too. option 3 gets my vote CTG
Gail has brought up adequate income for workers to maintain ourveconomic system
Gwynne Dyer penned this article that brings the same to us with a twist… Automation…
Unemployed citizens make angry voters…as Trump recognized and took a victory for himself.
If you are a politician, it’s better to blame globalisation because you can do something about that. You can build walls, impose tariffs, make all sorts of impressive gestures to stop the free trade that is allegedly destroying the good jobs. Or more precisely, you can win political power by claiming that you will do those things and thereby solve the problem.
Whereas nobody will believe you if you say automation is what is really changing the economy, and so you are going to stop the automation. That’s Luddism, and everybody (or at least, everybody at Davos) knows that doesn’t work. So the rich and the powerful are way out ahead of the pack in accepting that growing automation really is going to destroy large numbers of jobs.
A recent Citibank research note forecasts that automation will eliminate 57 per cent of all existing jobs in the developed countries within the next 20 years. In China, 77 per cent of manufacturing jobs are at risk over the same period. And the notion that the economy will create other, better jobs to replace them is just a comforting myth. Most of the new jobs being created are MacJobs.
If more than half the workforce ends up unemployed — and therefore humiliated and broke — their anger will be so great it could sweep away the comfortable world of the ultra-rich. Which is why there are sessions at Davos this year considering radical ideas like a “Universal Basic Income”.
Universal Basic Income in the United States is likely to happen as ,” Making America Great Again”,
The Investor class will continue to amass concentrated wealth, while the average worker gets there shaft….loom at the current proposed Trump Federal Budget…any doubt which direction we are headed. The rich are worried…that’s why they are arming to the teeth.
Call it “universal basic income” or “unemployment benefits” or “social benefits” – it is still the same: the money for the wokers that are not needed, as they are too costly, i. e. their output is too low for maintaining the growth.
UBI is a simpler system than the current with unemployment, sick insurance, government pension, company pension, social benefit etc.
Everyone gets the same no matter what (saves a lot in administration) and when this is not affordable just lower the level without triangulating voters.
When the UBI level gets too low the riots begin.
Somehow, this just doesn’t work. The owners of the robots don’t pay enough taxes to provide wages (or UBI) for all of the unemployed. There are limits to what debt can do. We seem to be running past them.
Could laws be changed so that AI using machines could be classified as wage earners? Income tax for robots.
4 It might help the tax base but the unintended consequences of treating a robot like a person would be huge. Just consider what happened when we started allowing corporations to have the status of persons. They are the only persons who have a shot at everlasting life.
But if you were a robot would you be willing to do all the work — while the stupid humans just lounged around and watching reality teevee (starring human like robots)… eating twinkies and drinking cola?
Revolt of the robots!
Manufacturers move to countries where the taxation is different, if tax rates are raised in one countries. Humans have a lot less flexibility. This is a big reason why corporations (except for energy corporations) have been able to reduce their tax rates. Energy companies can’t move very well.
That is what one world government is for.
Could laws be changed so that AI using machines could be classified as wage earners? Income tax for robots.
It might help the tax base but the unintended consequences of treating a robot like a person would be huge. Just consider what happened when we started allowing corporations to have the status of persons. They are the only persons who have a shot at everlasting life.
Where to draw the line between AI robot and stupid robot?
How do you count number of AI robots?
Best is to tax profits and/or revenues, as Gail says the companies will try to move to another country.
As long as UBI is sufficient for the masses to eat, have a roof and some amount of entertainment, they won’t revolt. Make sure they have something to lose.
The world was fine when most people were poor and only the elites lived well. The World Wars created too many consumers, which created this mess.
Sorry. A massive reduction of standard of living for those who are not qualified will save civilization.
If it were only so simple
Fed Raises Interest Rate a Quarter Point – Nothing Changes…
https://theconservativetreehouse.com/2017/03/15/fed-raises-interest-rate-a-quarter-point-nothing-changes/
Here’s a fun article about China’s economy and energy consumption with some good charts:
He concludes:
“Simply put, China of ’85-’00 grew on population and demographic trends. China of ’00-’15 grew despite decelerating population growth but on accelerating debt growth…this growth in China kept global growth alive. China of ’15-’30 will not grow, will not drive the global economy and absent Chinese growth…the world economy is set to begin an indefinite period of secular contraction.”
http://seekingalpha.com/article/4046536-global-growth-energy-consumption-economic-growth-china
Going back to the earlier thread on the Fed rate ‘hike’. If you watched any of Yellen’s answers to questions you will see a very deeply nervous (may I say fearful) set of verbage constructions with the usual void of content. Focus on the psychological state.
The market’s response reminds me of what happens when you call your neighbor because their party is too loud and it just gets notched up a level. You really don’t want to kill the party and ruin your relationship with the neighbor. What’s next? Let it die down as you sit idly by or call the cops? For right now the market didn’t get it. The euphoria of the moment is out of hand. We are in the KA phase of the biggest KA-BOOM in the world’s history and Yellen knows it, yet her job is to answer inane questions with non answers. I don’t think they are clueless at the FED, I think they know they now know they can act helpless or be blamed for ending the biggest 250 year long party in this planet’s existence, excluding the dinosaurs of course.
The last 200 years (or probably more realistically the last 50 years) will likely be the peak of intelligent life on planet Earth. Imagine that for a moment. If It took 5 billion years to get to this point and the peak lasted only 50 years. Wow, it is no small wonder SETI found nothing out there.. And we are alive to see it! How incredibly rare. The nearest star is about 25 trillion miles away. The nearest star with a “habitable” planet is nearly 75 trillion miles away. If one could even travel the speed of light one would spend a lifetime and travel trillions of miles in trillions of directions and not find another example of where we are right now on planet Earth. That just blows my mind.
Intelligent human life. I think A.I. will surpass us. Of course, we might not make it to the point where it can.
Actually if you traveled near the speed of light a trip that took many years as observed on Earth would take a very short time for the passenger on the ship due to relativistic time dilation. (See https://en.wikipedia.org/wiki/Twin_paradox ). There are a number reasons such speeds are not achievable, but it’s an interesting thought experiment.
Well pointed out. If we could travel on a beam of light at the speed of light in a vacuum, we would find that due to the wonders of time dilation we could go from any point in the universe to any other point in zero time. But one problem would remain: what would we do when we got there?
Thanks for the link! Very interesting article, and many good charts. I agree with the part you quote, except, perhaps “the world economy is set to begin an indefinite period of secular contraction”. How can a period of secular contraction go on indefinitely in a world powered by debt?
Here’s an article in The Conversation relevant to the discussion today, the US electric grid needs a lot of work!;
https://theconversation.com/the-old-dirty-creaky-us-electric-grid-would-cost-5-trillion-to-replace-where-should-infrastructure-spending-go-68290?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20March%2016%202017%20-%2069885232&utm_content=Latest%20from%20The%20Conversation%20for%20March%2016%202017%20-%2069885232+Version+B+CID_46c1cbcd69a29fb12dacd06becd6d183&utm_source=campaign_monitor_us&utm_term=The%20old%20dirty%20creaky%20US%20electric%20grid%20would%20cost%205%20trillion%20to%20replace%20Where%20should%20infrastructure%20spending%20go
The communications lines, electric grid, all the water, sewer and gas pipelines contain a lot of embedded energy. And we need these for modern buildings to function. All of this infrastructure degrades with time and needs replacing. The more I think about this the more it seems to me that the industrial revolution is a one time event never to be repeated again. It simply uses too many concentrated resources then scatters these resources across the globe. This process uses fossil fuels which then go from highly energy dense fuels to C02 in the atmosphere. It is like discharging a battery. It then takes a lot of energy to re-concentrate the resources once again to make new stuff. I am not even sure we have the capacity to keep maintaining what we have.
I agree. It was fortunate that we were able to build our grid when we could–when oil was generally under $20 per barrel. Now we have trouble maintaining it, and adding upgrades to try to handle wind and solar.
This is an interesting article. A shorter link is this one. https://theconversation.com/the-old-dirty-creaky-us-electric-grid-would-cost-5-trillion-to-replace-where-should-infrastructure-spending-go-68290
A group working at the University of Texas is trying to figure out how much the whole system costs, and how various changes might work. The have been modeling Texas on a county by county basis. One point they missed is the fact the the falling wholesale electricity prices represent a “bug in the pricing system.” Wind and solar drive down rates for other electricity generation. It is not really possible to operate the system with lower rates; it just squeezes other operators that must operate with reduced funding. Some states use capacity payments to fix the problem. Texas seems to be playing a giant game of chicken. https://www.greentechmedia.com/articles/read/texas-regulators-save-customers-billions
Send them a comment Gail That’s what TC is for. They are seeking advice.
Funny how the link was so long winded. But that’s what happened when I transferred it to your site.
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Musings
As I perambulate through the park, quiet back streets, and busy city streets, I often wish I could see a natural world undisturbed by man. I then realize that from the beginning of the dinosaurs until the emergence of humans 250 million years elapsed. Our fossil fueled technological age will last about 250 years.
This means I have a one-in-a million privilege of seeing this age. On top of that I am benefiting from adequate food, shelter and modern medical care.
I then accept the artificiality and sometimes ugliness I see with this thought.
Robert M. Pirsig, Zen and the Art of Motorcycle Maintenance:
Of course — what happens next!!
less food, fewer people
I thought ‘Zen and the Art of Motorcycle Maintenance’ and Pirsig’s follow-up effort, ‘Lila’ were both wonderful. The Buddha, the Godhead – or we might call it The Universal Intelligence (a nice, baggage-free term IMO) – does indeed reside in all things. In truth it *is* all things and all ‘no-things’ – both the world of form and the formless dimension that cradles it.
This Universal Intelligence apparently has a limitless appetite for novelty and seems to love manifesting new things independently and through us. Humans create beauty and can marry beauty and functionality when they achieve a state of stillness and allow that intelligence to work through them. This is inspiration in its original sense –
“Inspiration has an unusual history in that its figurative sense appears to predate its literal one. It comes from the Latin inspiratus (the past participle of inspirare, “to breathe into, inspire”)… However, before inspiration was used to refer to breath it had a distinctly theological meaning in English, referring to a divine influence upon a person.” [Marriam-Webster].
However when human creation is derived from the small and ultimately illusory personal self – the voice in the head that lives in constant fear of loss and mortality – the results will be ill-favoured:
“Because we live in such a mind-dominated culture, most modern art, architecture, music, and literature are devoid of beauty, of inner essence, with very few exceptions. The reason is that the people who create those things cannot — even for a moment – free themselves from their mind. So they are never in touch with that place within where true creativity and beauty arise. The mind left to itself creates monstrosities, and not only in art galleries. Look at our urban landscapes and industrial wastelands. No civilization has ever produced so much ugliness.” [Eckhart Tolle – ‘The Power of Now’].
So, although the Buddha is all things and is in all things and perhaps is comfortable in all things, some man-made creations are a truer or clearer expression of Buddha’s nature than others.
It’s noticeable, flicking through a catalogue survey of art, or walking through a museum with a wide range of artefacts, how painting, sculpture, (and one might possibly add architecture -although I rather like high-class Modernist buildings) have largely died in the 20th century, being – as you so rightly say – the rather feeble product of unaided human intellect and inventiveness, which doesn’t go very far.
The great Japanese, Chinese, French, Dutch and English schools of landscape painting, for instance, are so lovely and varied because closer to Nature than the Modernist schools which followed them: study of nature and seizing the moment of beauty constantly rejuvenated them. The same for the Ancient Greeks: although masters of geometry, they produced work of exquisite delicacy and naturalness that puts us to shame.
If anyone is finding things too stressful, do try to grow at least one beautiful plant,graceful and with an interesting life cycle of buds and flowering, and study the changes of the sky. Every day is wasted in which you have not watched the dawn.
Here dawn is at 11AM in the winter and doesn’t happen at all in mid summer.
My favorite time year is spring. The light changes and looks different, and there are few things more enjoyable to me than watching the trees come to life. Growing plant is an excellent suggestion for anyone who has not yet tried.
Joebanana
Agreed! Spring is intoxicating, one thing the damn bankers and politicians can’t ruin completely, although here we are about to be concreted over by ‘development’, but my favourite old wood looks set to be safe for the time being.
The light changes and looks different, and there are few things more enjoyable to me than watching the trees come to life.
So wonderfully put Joebanna
Harry Gibbs,
Thank you for posting this. I like what you’ve written here.
Thanks Brendon.
What I took away from Zen & .. is that we need to keep BAU in as good a working order as Robert M. Pirsig did his motorcycle. We shouldn’t wait for things to konk out and then expect the man from the garage to fix it for us.
This was a brilliant post by Ron Patterson, on his blog Peakoildrum.
Point of clarification about carrying capacity.
All animals produce far more offspring than can possibly survive. Putting it another way, all animals live and reproduce to the very limit of their existence. Of course that includes insects. They are all part of the animal kingdom.
Life exploded into an almost empty world during the Cambrian period. Of course that was a watery world only as soil was something not yet found on the rocky terra firma. But soon life crawled upon land and since that time every habitable niche of land has been occupied by some type of plant and animal life.
Every plant and animal competes for territory and resources. It is literally a struggle for survival. The fittest survive and the less fit die out because there is no niche for them to occupy. That should tell you everything about carrying capacity of plant and animal life on Earth. Since the Cambrian Explosion it has ALWAYS been at 100%. That is the Earth was always carrying 100% of the life it could possibly support.
Competition for every available niche has always kept populations in balance. If one type of plant became too abundant then some type of parasite or disease would evolve to thin its numbers. In the Amazon Jungle, for instance, no one type of plant or tree dominates any landscape. They are spaced so any type of parasite or disease kills a plant off. It does not easily spread to another plant of the same type because of the spacing between them.
In the animal kingdom if one animal becomes too abundant then the predators multiply due to the abundance of prey animals. Then the prey animals die back causing the predators to die back as well. There was an invisible limit to the numbers of all plants and animals. But they always lived to the very limit of their existence. Therefore the Earth always carried 100% of the plant and animal life it could possibly support.
THEN THERE EVOLVED THE SUPER PREDATOR. An omnivore predator that could survive in almost any conditions. Any niche that could support any life could support this super predator. And this predator had no competition other than other members of its own species.
So now this super predator is taking over the world. It is taking territory and resources from all other species of animals as well as plants. And as it takes over more and more territory the former plant and animal occupants of that territory must die off.
Make no mistake, this super predator will continue to take territory and resources from all other species. It will take and take until they are all gone. Then I have no idea what will happen.
I cannot write an end to this story because I have no idea how it will end. But I am fairly sure it will not have a happy ending.
Right! What humans did is learn to control fire. We learned to burn biomass, a very long time ago. With it, we could keep ourselves warm and we could cook food. Our bodies are now adapted to eating some cooked foods. While perhaps a few people could survive on raw food, to maintain the current population, we need the miracles of fire in some form to continue.
We also learned the secret of using “complexity” to solve problems. We break a particular problem down into pieces, and have specialists assigned to different parts. We also use specialized materials. (Many insects do some of this same thing.) Complexity unfortunately has limits, because it can lead to too low wages for those at the less skilled end of the organization.
Super article.
We have been cheating …. by using fire.
It likely ends with the joke being on us. But we won’t be around the laugh … or cry …
LGBT Community Freaks After Restaurant Warns: “No Transgender Bathrooms…Don’t Get Caught In The Wrong One”
http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/03/16/2017.03.16%20-%20Steak%20%26%20Catfish_0.JPG
http://www.zerohedge.com/news/2017-03-16/lbgt-community-freaks-after-restaurant-warns-no-transgender-bathroomsdont-get-caught
I have an idea — if you have a dick but long hair and make up — you go in the men’s toilet…
If you look like a man but don’t have a dick you go in the women’s toilet.
And if you try to pull a fast one you get treated like I would if I put on a wig and makeup and tried to take a piss in the women’s toilet…
Or how about we just collapse tomorrow and nobody will care?
And if you’ere still in the hopey changey business re gender, the only right that should matter is that to a safe and legal abortion.
The world leader in abortions: Mother Nature 🙂 She is a killer!
saps know better: protect the weak!
snowflakes ‘everyone deserves a chance’
In the most draconian collapse scenarios we hear about, the suggestion is to prepare to kill oneself and one’s dependents. Why bring children into the world just so as to kill them soon thereafter?
Talking about transgender toilet.
http://www.zerohedge.com/news/2017-03-16/lbgt-community-freaks-after-restaurant-warns-no-transgender-bathroomsdont-get-caught
Fossil fuel really do wonders to our gene pool. We should be fighting for our survival in the wild. I have mentioned before in my comments in previous articles which Xabier said that his grandmother could not care less about the toilets but rather making sure there is enough hay to last through winter.
My experience with transgenders is limited to being in Bangkok some years ago — walking out of a bar with a mate — being set upon by 6 or 7 of these banshees — having my mobile phone snatched —- grabbing the snatcher by its spindly arm and informing it that if the phone was not returned that the arm would be snapped…
Another banshee then attacked me with a bottle and I responded with a karate style kick to its head knocking it flying…. and informing it that if it hit me with the bottle it better kill me because the fuse would be lit…
Anyway — the phone had been passed down the line and it was impossible to recover.
So forgive me if I don’t support separate toilets for these freaks.
And yes I know — they are all messed up because they didn’t want to be born with or without a dick…. well — that’s life. Deal with it. And just choose the appropriate washroom from the two on offer.
CTG
The is a folk song tradition where my grandmother was born – still very much alive as a tradition – in which a man and woman sing about the ‘capacity’ each has, with appropriate gestures, pointing and skirt and shirt lifting, etc.
It can be remarkably crude. They end, however, arm in arm, saying that despite the deep disappointments, they are’ together forever.’ A fair summary of the human situation!
I look forward to the first LGBT performances…… 🙂
Like this tradition?
https://youtu.be/4qLW0z5B8iU
Diminishing returns in discrimination mitigation. I mean how large part of the population have this gender confusion? 0.001%?
I demand to have my own private toilet in every public washroom in the world.
It disgusts me to have to make use of public public toilets.
It is not fair – to me!
I deserve better.
Thanks for some interesting discussion which has certainly stimulated my mind today, but has
not eased my nerves!
On the question of interest rates, I wholly agree that first the Fed must raise rates in order to lower them later…rinse and repeat, a pattern in place for several decades but now occurring on the micro scale.
On the question of fascism, let’s understand that all the elements for fascism are in place in America right now, it’s just a question of turning the key, pushing the button. Is Trump going to do it? If necessary, he will. But, I am still looking at the 2020s/2030s so Trump may be long gone before then.
Raising rates now so that we can reduce it later is really a farce (in my opinion). It is like loaning me $10 so that I can return it to you later. The damage is already done when the rates are raised.
Your logic is infallible.
Why trigger a recession by raising rates — just so you can drop them again to try to stop the recession.
My house is not on fire — but I will light it on fire — so I can put it out…. but it might just get out of hand… and burn to the ground.
I am still going with 2. — the beast’s head came out from behind the curtain — the Fed saw it — said holy shit that is a really mean looking beast…. and they tossed a snack of higher rates to the beast … and he went back behind the curtain to munch
why trigger a recession by raising rates-just so you can drop them again to try to stop the recession ? YOU only do that when you know a depression is immanent and want the world to think that the fed is clueless and not aware of the coming depression , when the world’s investors lose a bucketload of money they will be looking for people to blame the fed will simply say we done our best
I am not following….
I’m with you on this FE. Debt must generate income through yield. The whole system is based on debt, when those billions don’t generate profits, billions will flow to other markets blowing bubbles into the extreme. Creating mean looking beasts everywhere.
Central banks have access to ‘big data’ in finance through commercial banks and the Swift system. Raising rates during recession is abnormal. Lower them again in a low rates environment won’t help to avoid a crisis, so it must be something else. But what?
I’d say they need to monetize more, faster. A crisis should give them a few reasons.
Draghi ran out of European bonds to monetize under current rules, stockmarkets are already overbought. But its probably worse than we think.
CTG the fed is playing a public relations game they cant just rush into negative interest rates they have to pretend that things are going great because once negative interest rates are permanently in place there will be many angry losers.
But things are not going great — and raising rates will only bring it to the attention of the public that things are not going great — because raising rates will crash the economy — like that did in 2008….
Again, my opinion is actually 180° of what FE’s viewpoint (surprise! I am not always in agreement with him). The Elites/Elders/TPTB or whatever you call them are not smart. Over the decades of complacency, “in-breeding”, “I am all too powerful in the world”, “nothing bad can happen to me”, “normalcy bias”, etc, they become dumb. They are not knowledgeable. They do not understand many things and even if they have good advisors, they may just as well shoot the messenger.
So, my point is, they will make up and do whatever it takes to stop it from imploding but it will be on a ad-hoc basis, no proper planning or knowledge.
Like many of us here, one needs to be familiar with physics, economics, psychology and a host of other knowledge and skills before you have the “aha…” moment. When you are so rich, you buy a place in Ivy League universities, you never ever had a fall and bruised a knee, you never know the suffering of the normal people, you may not even know that cars needs to be serviced (regular maintenance). They may not even know what economic theories are. Now, if the father is like this type of person, you can expect the son to be worse and the grandson to be even worse. So, if you start from 1970s, you will have the third generation now. They will more than likely to enjoy the parties, have all the girls around, jet set lifestyle and could not care less if the dad finds out he just drank a $1000-bottle wine.
If they know a lot and very smart, they would not have let Fukushima happen. They would have tried their best to mitigate the issue because it is an ELE (extinction level event). If I am that rich, I want to have a good life and I want my kids and grandkids to have the good life. So, I will ensure that earth is still habitable for my grand kids. Is it happening in Japan? No. The rich are still frolicking in California and even Tokyo. Kind of crazy to do that if there is radiation nearby.
So, no, I felt the elites/elders/etc are dumb and do not know what they are doing. In the corporate world, if an email is sent to 5 people and it starts with “Guys, need to get this done…”, no one will reply and it will not be done because everyone will think someone else will do it. In the end, no one will do it.
‘So, my point is, they will make up and do whatever it takes to stop it from imploding but it will be on a ad-hoc basis, no proper planning or knowledge.’
Not stop – delay… what more can we hope for? A solution?
The way I see it … they have done an incredible job of buying me 9 years of life since 2008… by all rights we should be dead by now….
I have no doubt they have the best minds on the planet — the fastest computers — gaming this … how do we squeeze another year.. month… day… second.. out of this.. what happens if we do this… ok so what about if we go in this direction … what is the PR spin for day… how do we keep the con going… the best of the best are on this … after all … everything is at stake
Bravo Ben and Janet…. encore!!! 9 more year please!!!
For those who criticize —- what should they have done – what should they do? What are they doing wrong? What would you do?
Dear Fast Eddie;
“For those who criticize —- what should they have done – what should they do? What are they doing wrong? What would you do?”
“What are they doing wrong?” – they killed us, and themselves in the process. If they are so smart, so intelligent, and actually exist as an organized group, why did they not:
1. control population in the 1950’s?
2. eliminate all nuclear power plants – or if you do not have a phobia for all things nuclear – build breeder reactors
3. Keep Johnny down on the farm even after he had seen gay Paris.
4. etc. Since these mythical “elders” are so smart, they would have seen 100 (10000) other ways to prevent the current predicament.
There is no-one in control,
Pintada
1. control population in the 1950’s?
– reducing or stablizing global population would lead to collapse of BAU — BAU needs to grow – increasing population is responsible for a third of all growth’
2. eliminate all nuclear power plants – or if you do not have a phobia for all things nuclear – build breeder reactors
– agree on nuclear — if breeder were feasible I am sure they would do it
3. Keep Johnny down on the farm even after he had seen gay Paris.
– no idea what this means
4. etc. Since these mythical “elders” are so smart, they would have seen 100 (10000) other ways to prevent the current predicament.
– the life you live — even though you appear not to understand this — is predicated on eternal growth of BAU — there are no other options — the economy grows — and you live a wonderful life — or it does not grow – and it collapses — and you suffer and die
The Elders have done a marvelous job of keeping growth on track. Unfortunately due to the end of cheap oil — they are about to fail — they are doing everything they can to try to delay the end game
When I was asking for suggestions I was asking for ideas that keep BAU going longer — i.e. how do we keep the economy growing — what could the Elders do that they have not done — what could they have done better in this respect?
” they will make up and do whatever it takes to stop it from imploding but it will be on a ad-hoc basis, no proper planning or knowledge.”
Yes. Not planned since 1800s, just made up as they go.
Corporate insiders apparently know the gig is about to be up:
“Company “insiders”, i.e. senior managers and directors of large corporations, must file a public disclosure every time they buy and sell shares of their companies.
“It’s usually a good sign when the CEO of a major company is buying shares; s/he is an insider and knows what’s going on, so their confidence is a positive sign.
“Well, according to public data filed with the Securities and Exchange Commission, insider buying is at its LOWEST level in THREE DECADES.
“In other words, the people at the top of the corporate food chain who have privileged information about their businesses are NOT buying.”
https://www.sovereignman.com/trends/what-do-these-ceos-know-that-we-dont-21188/
Too high price, compared to future earnings.
CTG> well and my opinions are 90° of FE’s / yours .. lol..
1970s? The major issue with TPTB/Elders is that their top core is truly multi-centennial, they go at least to 17th century, some even past that. They have seen it all, in terms of running the human farm, revolutions, political realignments, onset of disruptive technologies etc.
Not clamming they are omnipotent and 100% efficient, but good enough for what they do. For example, perhaps one of the ~recent very critical points for them was the “divine intervention” which due to long term bad weather delayed the French/Low countries bound invasion by several months, which in turn cascaded into the next year delaying the Eastern front campaign and forcing not desirable winter effort. And Adolf acknowledged it himself that he more or less lost the war (not achieved main goals) because of this timing issue early on.
So, should it went as they hoped, the Soviets would quite likely lost completely or at least buckled up so heavily loosing the Caspian and (the future) West Siberian gas/oilfields, plus axis already had control over Romanian and Norwegian oil, the future natgas there as well.
Therefore by 1941-2 with most of the Eastern front under control, Adolf could have easily refocused the airforce and smashed the UK naval blockade and taken most of the Commonwealth potential. Some sort of fascist lite protectorate would be self-installed in the UK.
Now, capturing two key nodes under the thumb of the Elders, western Europe and UK, plus various colonies and territories in Russia and ME.. would change the history quite a bit. The fall of UK also changes the situation on the Asian theater, supplying Japan etc.
So, what’s the US to do? Isolationism, total war, cold war, nuclear war by late 1940s/1950s? Who knows. There almost could have been a promising movie about it all staring Rutger Hauer (US – Germania Empire presidential summit in the 1950s-60s) but unfortunately it went sideways on the main plot what was going on, so only few sec of the movie are good..
Personally I believe no one can remember what my father or grandfather did. Mistakes repeat. That is why we have The Fourth Turning. It is my believe that every person who is “aware” knows what The Fourth Turning is and may have read the book.
I have heard that Ben Bernanke required an accelerated course on derivatives, managed by hedge fund managers in August 2007 to understand what was happening.
If that is true … I fear the worst: they are not as smart as they seem.
Misunderstandings and neglect create more confusion in the world than deception and evil. In any case, the latter two are much less frequent.
And as always, you have to apply Hanlon’s knife:
«Never attribute to evil what can be explained by stupidity»
We are in Wonderland – is that a talking rabbit racing past looking at his watch?
I believe I read somewhere that such tiny rate increases are – temporarily – beneficial for the major banks?
They may also help to destroy the smaller banks in Europe which Draghi has recently stated to be ‘too many’ and due for the chop in the interests of the system. I am sure that many share this view of his.
After all, they will only drive the marginal to the wall, – banks, consumers and businesses, – and such small fry do not count for anything at all in the calculations of those pulling the strings.
Bankrupt small fry can always go to live in their cars or on the floors of relations.
Recent experience shows that no significant threat of public disorder will arise in the short term from such distress, in the advanced economies, and the short term is all that counts in financial circles,and for politicians in the election cycle.
Look at how the Greeks have been pitilessly screwed without revolution – their feeble attempt against the bail-out terms was crushed.
Greeks are living beyond their means by several factors! in comparison to Portugal/Spain/Italy etc.
Should they truly fall (even not meaning global doom scenario) on the real bottom, their living standard would be somewhere between the worst Balkan and Ukraine levels..
In reality, the ongoing allowance for Greece is still very high for the following reasons:
– keeps the EU and DE debt structure living another day
– geo strategic location, it’s openly acknowledged in diplomatic and higher econ cycles, that Greece has been on the support line just to host the nuclear and naval stations for the TPTB/Elders (e.g. Lavrov made good jokes about it)
– but we have to observe small yet true factor – logistically they are on the longish thread, many segments should be expensive there for obvious reasons of remote location
That’s a good point — we all expect the masses to rise up — but as the Greeks situation demonstrates —- it takes a whole lot to get people angry enough to try to tip over the cart…
Just look at that Egyptians – they got angry enough — but then the authorities opened fire with live ammo killing hundreds…. and they quickly righted the cart and got on with their miserable lives….
the greeks number 11m in a small country with no indigenous resources, they are collectively unarmed and the drachma doesn’t/didnt act as the global currency prop.
they couldnt do much about getting screwed
You have to imagine what will happen when the greek problem hits the USA—and it will
https://collapseofindustrialcivilization.com/2015/07/29/and-you-thought-greece-had-a-problem/
Our modal forecast remains for a total of three hikes this year, with remaining moves at the meetings in June and September, followed by four hikes each in 2018 and 2019. We see a 60% subjective probability that the next hike occurs at the June 2017 meeting, 10% for July, and 20% for September. We also expect an announcement of gradual balance sheet rundown in December; if this does not occur, the likelihood of a fourth 2017 hike would increase.
http://www.zerohedge.com/news/2017-03-16/not-reaction-fed-wanted-goldman-warns-yellen-has-lost-control-market
‘model’ is this a model airplane? One that you build then toss it off the side of a building and is smashes to bits on the pavement below?
Remember Goldman predicting $300 oil http://seekingalpha.com/article/257016-300-oil-by-2020-scary-but-unlikely
Of course the squid doesn’t believe any of this — they talk their book — saying one thing — but doing the exact opposite…..
The thing you have to remind yourself of whenever you read analysis from Goldman is that they’d sell their mothers and sisters to a whore house if the price was right
Never forget that.
@ FE.
Over and over again you have presented two recurring themes.
1:Homeland security is militarized to harm the citizens of the USA.
2;You FE hate citizens of the USA.
Given those two recurring themes it would seem self evident that the militarization of police in the USA pleases you as you believe it will cause harm to those you hate. Correct?
Here in the USA we are doing the best we can. The sheriffs department are not all that bad as cops go. They live in the same community as us poor folk and generally are pretty easy going.
If they are going to shoot me there is not a lot I can do about it, I will go to my death knowing I did the best I could. I have always been true to my word in my community and have tried to help those who need help. There are worst ways to go.
A very small percentage of the people in the world posses the resources you do to flit about as a ex patriot and even if we did would it change anything?
In my experience the vitriol you express is sourced from self loathing.
I would like to offer some advice. This advice comes from having appreciated your writings over the years and compassion for the pain that is expressed in those writings,
Seek help.
Help can often come from unknown places if you honestly seek it.
It clear to me that your rants online and your tampering with your brain chemistry bring only temporary relief from your pain. I would recommend that you get a small herd of goats and learn to appreciate them as therapy and spend less time online but what works for me may not work for you.
Seek help.
Ha ha ha…. that is one of the more amusing posts I have ever read on FW….
I have a two word response – you can interpret as you like:
Paris Hilton
http://celebmafia.com/wp-content/uploads/2014/07/15-come-alive-paris-hilton.jpg
FE, i’m sure g69jl3dc is a sock puppet for your buddy Glenn.
6789… has left the building.
http://www.agadvance.com/media/47449/p60a.jpg
Let me get my leotards on .. Madame Fast can you get me that sausage from the fridge… ah… that’s better…. crazy!
“It clear to me that your rants online and your tampering with your brain chemistry bring only temporary relief from your pain.”
You nailed FE, g69jl3dc, defining him and his activity perfectly! It’s obvious he’s on something, whether it’s one form of substance abuse or another. From observation of human behavior from a few different people here and there a good guess is way too much alcohol. He drinks and types and probably passes out, then starts the whole sad spectacle over again, when he should be asking for admission into AA or admitting himself into rehab. Amy Winehouse’s song Rehab is probably a song he should sing but instead of the lyrics, “No, no, no.” FE should sing, “Yes, yes, yes.”
Acchualleeee…. you would be wrong …. and you need to stop looking for excuses for me….
What you get here is what I call just plain normal – there are no enhancements….
I imbibe very minimal amounts of alcohol…. usually limited to splitting a bottle of wine with Madame Fast on Friday evenings. I am somewhat of a fitness fanatic and I find booze does not mesh so well with my other activities.
But if imagining me drinking … furiously typing … passing out … then starting over again … brings you pleasant thoughts…. feel free to continue imagining….
I’m now friends with a guy who wrote some very funny posts on a hifi-forum I frequented regularly. He had the wildest imagination, and had a lot of insight as well. But I got a bit disappointed when I met him in person, since he was just a plain insurance salesman, who was a lot more normal in person. But he was also a well functioning alcoholic, which explained his rants and the reason he sometimes offended people in writing.
One day he wrote that a local manufacturer of hi-fi-equipment was lying about their specifications. Which they were, but almost everybody does it(just think of cars mileage). They took him to court, but had to settle and they had to pay all the costs in the end.
So I just wanted to say that I find this subject to be utterly depressing, but Fast Eddies rants makes OFW worthwhile to read, and I highly appreciate his no-BS approach, even though it may be to strong to stomach for some!
Gail, by publishing Fast Eddy’s vicious attacks on other people, also leaves herself wide open to defamation, slander, and libel suits. She, as publisher of this forum, is complicit in all of his unhinged personal attacks on other people.
And this is especailly true of someone like myself, who is a petroleum engineer with many years of experience in the oil and gas business and who makes his living in the business.
To dispute facts, theories and predictions is one thing. That is fair game. But Fast Eddy doesn’t attack facts, theories and predictions. He attacks people. For instance, he has called me “stupid” and many other pejoratives on this forum, all in order to defame me. This defamation, and on a public forum, is especially damaging when it is against someone like myself who is an oil and gas professional who relies on his reputation to make his living in the oil and gas business.
If I should decide to sue Gail and Fast Eddy for defamation, slander and libel, I would not only do so in the United States, where I have oil and gas interests, but in Mexico as well, where I have lived for the past 16 years and have permanent residence status. The slander and defamation laws in Mexico are far more strict than they are in the United States. In Mexico, to do what Fast Eddy and Gail do is not just a civil affair, it is a criminal offense.
So a word to the wise, Gail. If you don’t want to find yourself in a world of legal problems, you might want to consider cleaning up your act on this blog.
What a ridiculous and disingenuous post.
Firstly, why on earth wouldn’t you comment under a pseudonym if you are so concerned about maintaining your pristine and no doubt fabulously valuable reputation? Clearly people are going to take umbrage if you take a contrarian position ad nauseam as you have done on Gail’s blog.
Secondly, if FE’s attacks are unhinged, as you say, then his opinions are those of a mad person, which means that a.) He is not responsible for his conduct and b.) His words have no credibility and therefore no defamatory potential.
Thirdly, Gail churns out these articles for free on a regular basis and spends an inordinate amount of time carefully responding to people’s comments. THIS IS A NICE THING TO DO. To threaten her with legal action because you are too thin-skinned to cope with someone calling you stupid is not acceptable.
Harry Gibbs,
Are you a lawyer?
How much do you actually know about slander, defamation and libel law, especially when it crosses international borders, as is the case with the internet?
Glenn, what is your understanding of being legally defamed?
Poor Glenn Stehle;
Mr. Stehle chose to troll a doom site with BS predictions of infinite oil, and now he is butt hurt because someone called him a bad bad name.
I think Mr. Stehle should be given time in a safe space where a psychiatrist could build his ego by agreeing with everything he says, and by showing him charts from magazines that exist to promote the oil industry regardless of the facts. After all, his opinion is just as valuable, and true as the actual truth even when those two things do not at all match up. He is just expressing alternative facts – being presidential if you will.
Ms Tverberg, to protect yourself from incipient legal action, and to protect poor Glenn’s feelings, perhaps you should do him the favor of a permanent ban.
Protect Glens feelings,
Pintada
Or perhaps a disclaimer might be wise to deter litigious swine. Btw, Glenn, if CTG is correct and you’re getting paid for each response you provoke then that’s some nice trolling – have a drink on me. 😉
Harry Gibbs,
Are you a lawyer?
How much do you actually know about slander, defamation and libel law, especially when it crosses international borders, as is the case with the internet?
Mr Stehle, i think you are being paid to mistify the truth. Oil engineers don’t post hundreds of replies on a website, period. And i see you have invited your nephew because you won’t make it alone. Your arguments are weak at best. I suggest you start your own blog to promote the status quo. For as long as it lasts.
I see .gov trolls popping up on several websites, i can even smell them.
“Mr Stehle, i think you are being paid to mistify the truth.”
That seems very unlikely. On the other hand, if you have an idea of who might pay, please send them my name.
LOL!
Pintada,
Are you a lawyer?
How much do you actually know about slander, defamation and libel law, especially when it crosses international borders, as is the case with the internet?
Dear Glenn Stehle;
I am not an attorney, but I am capable of spotting an a$$hole, and someone who is really, really s-tu-pid across international or other borders.
Grow up,
Pintada
http://cdn.pcwallart.com/images/real-snowflake-under-microscope-wallpaper-2.jpg
Gail,
Regardless of what Harry Gibbs and Pintada say, consider this a shot across the bow.
Before you decide how to respond, you might want to consult an attorney, someone who actually knows something about the law, instead of relying on the legal advice of those like Harry Gibbs and Pintada.
Glenn — FYI: my brother recently won a case for libel — someone set up a fake social media account and was using it to try to ruin him.
His lawyer indicated that is generally very difficult to win a libel case — this was one of the few instances that it was worth the bother — because the account IP could be traced to a person whom he was already suing on another matter…
The other issue with libel is even if you can prove it if you want to get any sort of settlement you have to demonstrate damages
He won – he had a big legal bill — but he could not collect any cash.
Why do you stay – you add nothing — you are not respected — you are not even funny. You don’t dance when we tell you. You don’t bring us cold beer. I fail to see your purpose. You are not even qualified to be the jester.
There are a lot of one time commenters who come on OFW, to pass their judgement how things really are, how the world is, how people are, and what things really are like. Never caring to discuss why their reasons are as such.
But never in the history of OFW have I seen a post like the one above from our professional troll Glenn.
Monologues are a fine and interesting thing, when the presenter is somewhat in the know. But the comment sections are by definition dialogues, meant for varying opinions and wide arrays of thought. But to take things to a level of legal threat against Gail. One might wonder, is it in turn illegal to threaten to sue fine bloggers. A charge of harassement? In some of the countries the commenters of OFW are from, that case against Glenn could be made with ease.
But all in all, I just find Glenns post an all time low. Really bad form, deserving an immediate apology.
Van Kent,
Are you a lawyer?
How much do you actually know about slander, defamation and libel law, especially when it crosses international borders, as is the case with the internet?
Though Norm is a lot better answering comments that really would’t deserve an answer, some points for Glenn..
Harassment is a lot easier to discern, than points of slander. Of the two, harassment is easily proven, of the two, it ‘wins’ every time.
No, I’m not a lawyer, I just run an international business that deals in international lawsuits all the time. I have my team of lawyers and consultants to do the papers for me.
Sorry, Glenn, you can’t threaten or harass OFW commenters to.. hmm.. hmm.. I still don’t know what Glenns actuall agenda is.. anyone have a clue ??
“Sorry, Glenn, you can’t threaten or harass OFW commenters to.. hmm.. hmm.. I still don’t know what Glenns actuall agenda is.. anyone have a clue ??”
Well, he isn’t a paid troll. Paid trolls have a brain.
He isn’t an attorney. Attorneys generally have a clue about the law.
He isn’t a big thinker. People who think, don’t post the pointless drivel as if they actually believe it.
Its pretty obvious what Glenn is.
Grow up Glenn,
Pintada
Van Kent,
Harassment. Yes, there’s that too. To be honest, I hadn’t thought of that, so thanks for the heads up.
I wonder what the company that hosts Gail’s blog would have to say about Fast Eddy’s — and the others like you, Harry Gibbs and Pintada who join in the piling on — would have to say about harassment.
In the United States, harrassment can even rise to the level where it involves criminal charges as well as civil action, and the laws are getting tougher by the day.
Harassed? Since when is demonstrating that someone is wrong harassment?
If anything we should be suing you for harassing us by posting endless lies and rubbish on FW.
Regurgitating MSM spin on FW is a criminal offence — do I need to call 911 and have them take you away in handcuffs? Is that what you want Glenn?
What’s next — are you going to demand a special toilet for people from DelusiSTAN?
Here’s a tip — don’t join the golf club if you hate golfing —- if I were you I would consider joining the Club of Delusional thinking — otherwise known as Peak Prosperity —- you will have so much fun over there!!! I just know you will Glenn. Chris and all the others will be very kind and you will quickly feel like one of the boys….
Troll.
Well … it does not look like FE is going to apologize or going to have a truce with Glenn … hehehe.
Every tried a law suit across borders? I hope you have a LOT of money .. lawyers love money… it’s so tasty….
https://lh4.googleusercontent.com/-nqtg_sokHYs/TWj6nKVjMfI/AAAAAAAAAGg/eprZ34FjCPw/s1600/greedy+lawyer.jpg
Glenn Glenn Glenn… I think you and Chris Martenson could be a great team….
It was so nice without you here yesterday — what were you up to?
What is this glenn you are talking about?
Glenn,
You are a dickhead! Now sue me
https://cdn.meme.am/instances/60232115.jpg
Hi Glenn,
I am from Spain and I do not know English, and I use the translator to communicate with you, and I can never be sure of the result. Since you live in Mexico, you may know Spanish and for that reason I publish it in both languages. I would like to ask you an oil question, since you work in the industry and maybe you can help me.
In a Spanish digital newspaper, Mr. Brufau (director of the company Repsol) has said that 60% of the oil is used for energy uses, and that the remaining 40% is for petrochemical and industrial uses.
That means that our energy dependence on oil is 40% less than is usually claimed in the peak oil community.
My question is: can you get 100% of the hydrocarbons from a barrel of oil for non-energy derivatives? I have always thought that it is not possible, but the truth is that I am not sure.
Thanks in advance.
I would also like to take the opportunity to cool down the atmosphere and ask you not to blame Mrs. Tverberg for the idiocy that sometimes we can make commentators.
FE owes you an apology and I’m sure he’s going to do it for Gail.
………………………………………
Hola Glenn,
soy de España y no sé inglés, y utilizo el traductor para comunicarme con usted, y nunca puedo estar seguro del resultado. Dado que usted vive en Mejico, quizá sepa español y por ese motivo lo publico en ambos idiomas. Me gustaría hacerle una pregunta relacionada con el petróleo, dado que usted trabaja en la industria y tal vez me pueda ayudar.
En un periódico digital español, el Señor Brufau (director de la empresa Repsol) ha dicho que el 60% del petróleo se usa para usos energéticos, y que el 40% restante se destina para usos petroquímicos e industriales.
Eso significa que nuestra dependencia energética del petroleo es de un 40% menos de lo que se suele afirmar en la comunidad del pico del petróleo.
Mi pregunta es: ¿se puede conseguir aprovechar el 100% de los hidrocarburos de un barril de petróleo para derivados no energéticos? Siempre he pensado que no es posible, pero la verdad es que no estoy seguro.
Gracias por adelantado.
También me gustaría aprovechar para enfriar el ambiente y le pido por favor que no responsabilice a la señora Tverberg de la idioteces que a veces podemos hacer los comentaristas.
FE te debe una disculpa y estoy seguro que lo va a hacer por Gail.
Hi Glenn,
I am from Spain and I do not know English, and I use the translator to communicate with you, and I can never be sure of the result. Since you live in Mexico, you may know Spanish and for that reason I publish it in both languages. I would like to ask you an oil question, since you work in the industry and maybe you can help me.
In a Spanish digital newspaper, Mr. Brufau (director of the company Repsol) has said that 60% of the oil is used for energy uses, and that the remaining 40% is for petrochemical and industrial uses.
That means that our energy dependence on oil is 40% less than is usually claimed in the peak oil community.
My question is: can you get 100% of the hydrocarbons from a barrel of oil for non-energy derivatives? I have always thought that it is not possible, but the truth is that I am not sure.
Thanks in advance.
I would also like to take the opportunity to cool down the atmosphere and ask you not to blame Mrs. Tverberg for the crap that Fast Eddy sometimes makes.
FAITH owes you an apology and I’m sure he’s going to do it for Gail.
Un saludo.
……………………………………………………
Hola Glenn,
Soy de España y no sé inglés, y uso el traductor para comunicarme contigo, y nunca puedo estar seguro del resultado. Puesto que usted vive en México, usted puede saber español y por eso lo publico en ambos idiomas. Me gustaría hacerle una pregunta de aceite, ya que usted trabaja en la industria y tal vez usted puede ayudarme.
En un periódico digital español, el Sr. Brufau (director de la empresa Repsol) ha dicho que el 60% del petróleo se utiliza para usos energéticos y que el 40% restante corresponde a usos petroquímicos e industriales.
Eso significa que nuestra dependencia energética del petróleo es un 40% menos de lo que se suele reclamar en la comunidad pico del petróleo.
Mi pregunta es: ¿se puede obtener el 100% de los hidrocarburos de un barril de petróleo para derivados no energéticos? Siempre he pensado que no es posible, pero la verdad es que no estoy seguro.
Gracias por adelantado.
También me gustaría aprovechar la oportunidad para enfriar el ambiente y pedirle que no culpe a la Sra. Tverberg por la basura que Fast Eddy a veces hace.
FÉ te debe una disculpa y estoy seguro de que va a hacerlo por Gail.
I am sorry you are upset.
I hope you have noticed that I am offering this site as a free service. I don’t even have ads on the site. I don’t have a staff of people working for me, who can moderate comments. I have a filter that I use to cut out some of the problem comments, but it doesn’t cut out all of them. My site is considered a non-commercial personal blog. I do not accept donations on my site. I do not have a 501(c) corporation. I am living on retirement income.
I don’t know what Mexico’s laws are, but it is pretty clear you would get nowhere in the US. Most lawyers would consider the suit a complete waste of time.
I make it a point to treat commenters appropriately. I hope you do not think I have treated you unfairly. I appreciate having people with different perspectives, which is why I have not cut off your comments. I have, over the years, cut off commenting privileges of quite a few commenters.
Fast Eddy has been commenting, on and off, for about three years. Some people like him; some get very upset with him. When he has been gone, I have gotten quite a few negative comments. You have attracted his wrath more than other commenters, perhaps because you are more persistent.
I would hope that you two can come to a truce. We don’t need to have commenters getting upset.
Nice reply Gail. Any involvement in this site is voluntary so if someone is offended he should leave. I for one appreciate the fact that it’s open for personal expression. That’s how the world was 100 years ago. Now people have skin so thin they bleed before you can even take a swing. We used to be able to discuss government and religion. Now we discuss bathroom assignments. The capacity of the human mind is far above that level but no one talks about ideas any more. It’s all about feelings. For someone to threaten a frivolous lawsuit because their feelings were hurt is simply ludicrous. Fear is the motive and fear only exists in the absence of true knowledge.
I worked in insurance a very long time. I discovered that money attracts lawsuits. Keeping as far away from money as possible saves a lot of grief.
Also, I can’t imagine anyone can really saying to a lawyer, “Someone on a personal blog called me stupid. I have no idea what his real name is, but I want to sue him. He lives in New Zealand. Also, I want to sue the lady whose blog this occurred on. As far as I know, she doesn’t have any particular income or assets, except retirement income.”
HA HA that is hilarious Gail !!!! I needed a good laugh. The lawyer would probably laugh out loud too upon hearing the complaint.
I have to admit, the comments section of OFW is more fun with FE in it.
‘Most lawyers would consider the suit a complete waste of time’ — but they’d be happy to run up some hours on his tab 🙂
Gail,
“It is pretty clear you would get nowhere in the US”?
Well, we will see about that.
The thing is…
If it is true then it is not libel.
So you have oil interests in the US…. which shale plays have you bought shares in Glenn?
You get quite agitated when this info gets posted — you feel the need to attack the author https://srsroccoreport.com/continental-resources-example-of-what-is-horribly-wrong-with-the-u-s-shale-oil-industry/
Me is wonderin if you is having some shares in that company Glenn.
It’s call coming together now …. it is your life calling to seek out sites that expose the Shale Ponze — and try to defend the industry by posting endless lies — ignoring facts….
You are truly delusional Glenn…. you take delusion to another level.
You are a fool.
I can see this is starting to get to you — are you going to crack up on us Glenn? That might help your libel case — your honour — as you can see I am in a very sorry state — I pee my pants… I slobber — I need to be restrained otherwise I might hurt myself…
And you see it all started with this Fast Eddy character…. I trolled him and he launched a jihad against me — vicious jihad — I tried to call Homeland Security to report him as a terrorist and they hung up the phone every single time….
And so now I want him to be arrested and put in the jail – he is the bad bad man. Please your honour — it’s all his fault…. you need to do something — can’t you see — he did this to me — he needs to pay for this — I will get him!!! I will get him!!!!
Judge: can I have some security people here — lock this guy up and throw away the key —- and get him some shock treatment asap — he’s cracking up.
And how dare he threaten Fast Eddy — does he not understand that The Core have diplomatic immunity????
https://wikdpedia.wikispaces.com/file/view/straightjacket.jpg/221204834/318×192/straightjacket.jpg
Hahaha!
I was bored to tears with Glenn’s snake oil hype. But this made it all worthwhile, sue people for name calling on internet forums?? LOL it would be a trillion dollar business!
I didn’t pay much attention to Glen. His arguments were not that interesting since anyone who has come here knows they have been done to death.
It is astonishing that he would try and shut the conversation down though. He did not
strick me as the type…something seems wrong.
I think he has been body snatched by aliens from Tabbys star.
Glenn, I prefer nit to engage you in any meaningful debate. I am trained as an engineer with academic background in physics and an MBA from top schools in UK. I have met many petroleum engineers, geophysicist, well engineers, etc. Engineers are data driven, no nonsense and very detailed oriented (unless you are a lousy failed engineer). I have observed that your postings are not engineering oriented but a rehashed marketing and PR sprewed by companies and government. Engineers are trained to be observant and be mindful on the data presented especially on data that marketing people would use. I have serious doubt’s of you being an engineer. Engineers don’t do what you do and in fact if you are in the construction line, I would be very afraid of your constructions.
Glenn is obviously very upset. The issues we are dealing with are ones are difficult for a lot of people, including a lot of our own immediate relatives. It is not easy to accept the idea that the world is changing in ways that make standard evaluations techniques no longer applicable. An engineer works in standard evaluation techniques of a different sort. It is not a big leap to assume that standard evaluation techniques outside of geology work as well as those in geology–even if there is increasing evidence that they don’t really.
We need to be respectful of other people’s feelings.
“Glenn is obviously very upset. The issues we are dealing with are ones are difficult for a lot of people”
Fast Eddy has attacked me more than Glenn. I find it impossible to take him seriously, partly because I have been attacked by people who are actually dangerous (the Scientology cult) and partly because his is astonishingly ignorant. One example is FE’s insistence that land farmed with “petrochemicals” will not produced anything if they are no longer available. This s nonsense. The main fertilizers, fixed nitrogen, phosphorous and potassium are not petrochemicals. Also simple observation of long used but fallow fields will show an amazing crop of weeds. It is true that yields will fall if the elements are not replaced, but it’s going to take a while, not FE’s instant doom.
I also can’t take someone seriously when they are certain about the future. We could get hit with an asteroid. More likely would be a big volcanic eruption that would mess up the weather and starve most of the population. I agree with Gail that the current path is not long term viable, but who knows what will happen? What effect will smarter than human AIs have? We could upload and completely detach from the biosphere. We could put 90% of the population in cryonic suspension. Or governments (like Syria) could decide to dispose of their population as unneeded.
In the best of worlds, we solve energy and get off the planet.
Thanks for your thoughts. I agree that some humility is helpful. We really don’t know what will happen.
Getting off of the planet I am pretty skeptical of. But I won’t make fun of people with different views than my own.
“Getting off of the planet I am pretty skeptical of. But I won’t make fun of people with different views than my own.”
Indeed you don’t. In fact, you sponsored two of my early power satellite articles on “The Oil Drum.” But why skeptical? People have been living in the ISS for a along time now.
Keith — for your viewing displeasure:
How long can humans live in space and what is the worst case scenario for someone who lives too long in space?
BULLET POINT LIST OF EFFECTS
Here is a list of some of the known issues of zero g:
bone loss, lose 1 or 2% of your bone mass every month in load bearing parts of your skeleton such as feet. (Your skull and other parts that don’t bear weight are unaffected by this – see Robert Frost’s answer).
eye problems (many astronauts have short term issues after their flight, and there’s been one case of irreversible damage to sight as a result of zero g),
thinner blood (reduction in blood cell count can be as much as 15% after two weeks in space),
more blood in the upper body,
increased resting heart rate,
greatly increased levels of adrenaline,
reduced digestion leading to malnutrition
issues in liver and kidney function,
changes in function of immune system,
reduced thirst leading to dehydration,
increased core temperatures,
can only get rid of heat by sweating, not by convection so increased sweating
The sweating leads to magnesium deficiency,
increased iron,
can’t take most medicines orally, only subcutaneously because of the stomach, liver and kidney issues,
William Rowe has also turned up possible evidence of a risk of sudden heart failure after
moderate exercise such as a space walk, due partly to adapatation to zero g conditions.
Because of all these issues, pregnant women are not permitted in the ISS – it would be unethical to find out what happens to a human fetus in zero g.
https://www.quora.com/How-long-can-humans-live-in-space-and-what-is-the-worst-case-scenario-for-someone-who-lives-too-long-in-space
The Human Body in Space
Beware, what you’re about to read can be scary:
4. Space Radiation
Space Radiation. The most dangerous aspect of traveling to Mars is space radiation. On the space station, astronauts receive over ten times the radiation than what’s naturally occurring on Earth. Our planet’s magnetic field and atmosphere protect us from harsh cosmic radiation, but without that, you are more exposed to the treacherous radiation. Above Earth’s protective shielding, radiation exposure may increase your cancer risk. It can damage your central nervous system, with both acute effects and later consequences, manifesting itself as altered cognitive function, reduced motor function, and behavioral changes. Space radiation can also cause radiation sickness that results in nausea, vomiting, anorexia, and fatigue. You could develop degenerative tissue diseases such as cataracts, cardiac, and circulatory diseases. The food you eat and the medicine you take must be safe and retain their nutrient and pharmaceutical value, even while being bombarded with space radiation. A vehicle traveling to Mars and a habitat on Mars will need significant protective shielding, which is nonetheless futile against some types of space radiation.
Radiation Icon
The Key: The space station sits just within Earth’s protective magnetic field, so while our astronauts are exposed to ten times higher the radiation than on Earth, it’s still much less than the radiation a mission to Mars will encounter, and of a different type. Shielding, monitoring, and operational procedures control the radiation risks to acceptable levels to keep you safe. To learn what happens above low Earth orbit, NASA has extensively used ground research facilities to study how radiation affects biological systems, and more importantly, how to protect them. They are developing unique ways to monitor and measure how radiation affects you while living in space, and to identify biological countermeasures. Finally, methods to optimize shielding are being studied to help protect us on a journey to Mars.
More https://www.nasa.gov/hrp/bodyinspace
“Space Radiation”
Another example of FE’s ignorance and using a cheap copy and paste.
This is a topic which has been well understood since the Apollo program. The solution is the same that protects us on Earth, massive shielding. Because it is less effective in stopping high energy cosmic rays, it takes around 11 meters of lunar or Mares dirt to shield to Earth sea level. Because hydrogen is more effective, 6 meters of water or polyethylene will do the same job.
However, going to Mars is a hard problem because you have to move all the shielding, or just accept the radiation damage. Considering all the other ways people could die trying oi get to Mars, radiation is way down the list.
Power satellite construction workers who would stay in orbit for decades are a different problem.
There are over 50 posts on a thread in power satellite economics “biology of human space settlement: good news, bad and some questions” https://groups.google.com/forum/#!topic/power-satellite-economics/A9oMK3-SHQ8
To function properly, we need gravity. Without it, the environment is less demanding on the human body in several ways, and this shows upon the return to Earth. Remember the sight of weakened astronauts emerging after the Apollo missions? That is as nothing compared with what would happen to astronauts returning from Mars.
One of the first things to be affected is the heart, which shrinks by as much as a quarter after just one week in orbit (The New England Journal of Medicine, vol 358, p 1370). Heart atrophy leads to decreases in blood pressure and the amount of blood pushed out by the heart. In this way heart atrophy leads to reduced exercise capacity. Astronauts returning to Earth after several months in the International Space Station experience dizziness and blackouts because blood does not reach their brains in sufficient quantities.
Six weeks in bed leads to about as much atrophy of the heart as one week in space, suggesting that the atrophy is caused by both weightlessness and the concomitant reduction in exercise.
Other muscle tissue suffers too. The effects of weightlessness on the muscles of the limbs are easy to verify experimentally. Because they bear the body’s weight, the “anti-gravity” muscles of the thighs and calves degenerate significantly when they are made redundant during space flight.
Despite the best attempts to give replacement exercise to crew members on the International Space Station, after six months they had still lost 13 per cent of their calf muscle volume and 32 per cent of the maximum power that their leg muscles could deliver (Journal of Applied Physiology, vol 106, p 1159).
Various metabolic changes also occur, including a decreased capacity for fat oxidation, which can lead to the build-up of fat in atrophied muscle. Space travellers also suffer deterioration of immune function both during and after their missions (Aviation, Space, and Environmental Medicine, vol 79, p 835).
Arguably the most fearsome effect on bodies is bone loss (The Lancet, vol 355, p 1569). Although the hardness and strength of bone, and the relative ease with which it fossilises, give it an appearance of permanence, bone is actually a living and remarkably flexible tissue. In the late 19th century, the German anatomist Julius Wolff discovered that bones adjust to the loads that they are placed under. A decrease in load leads to the loss of bone material, while an increase leads to thicker bone.
It is no surprise, then, that in the microgravity of space bones demineralise, especially those which normally bear the greatest load. Cosmonauts who spent half a year in space lost up to a quarter of the material in their shin bones, despite intensive exercise (The Lancet, vol 355, p 1607). Although experiments on chicken embryos on the International Space Station have established that bone formation does continue in microgravity, formation rates are overtaken by bone loss.
What is of greatest concern here is that, unlike muscle loss which levels off with time, bone loss seems to continue at a steady rate of 1 to 2 per cent for every month of weightlessness. During a three-year mission to Mars, space travellers could lose around 50 per cent of their bone material, which would make it extremely difficult to return to Earth and its gravitational forces. Bone loss during space travel certainly brings home the maxim “use it or lose it”.
The impossibility of an escape to space is just one of many examples of how our bodies, and those of our fellow organisms, are inseparable from the environments in which we live. In our futuristic ambitions we should not forget that our minds and bodies are connected to Earth as by an umbilical cord.
More https://www.newscientist.com/article/mg20827860-100-why-space-is-the-impossible-frontier/
Now Keith — is this going to be like Space Solar — you know — where it is impossible — not feasible — illogical …
Yet in spite of all of that you will just continue to pound your insanity drum and insist that a breakthrough is imminent — that you are working on it yourself (in your basement).
Think about Keith — if you do that it would be insane. It would be madness…
If you post anything more about living in space — whenever I see ‘Keith’ on a post on FW — I will immediately picture this …. you do not want to become this guy Keith — try to retain some dignity….
https://s-media-cache-ak0.pinimg.com/564x/fc/35/0f/fc350f67ad90a98b7fb7f81db539112c.jpg
“To function properly, we need gravity.”
That’s been assumed in all space settlement designs. Using spin for gravity is a very old idea.
‘The main fertilizers, fixed nitrogen, phosphorous and potassium are not petrochemicals. Also simple observation of long used but fallow fields will show an amazing crop of weeds. It is true that yields will fall if the elements are not replaced, but it’s going to take a while, not FE’s instant doom.’
Funny – that’s not what the women who works for the BC Organics Institute told me when I paid her to assess land I was buying in BC — she strongly advised me when shortlisting sites for her evaluation to ‘tell the owners that they need to disclose if urea has been used on the land because we will be testing for that — and nothing will grow if the soil is damaged with these chemical fertilizers without long term repairs involving intensive organic fertilizers’
And then there was the commercial grower who helped set me up here — we were discussing these fertilizers and I specifically ask him about this issue (because it was challenged on FW) – he is a consultant to the NZ government re organic farming —- and he said basically the same thing as the BC Organics lady — in fact as we looked out over the endless commercial farms in the valley below he said — see all those orchards and other farms down there — the soil is dead — it is nothing more than a sponge to hold these fertilizers — and something to hold up the plants — remove the fertilizers and that entire valley will be devoid of crops’
Keith – based on your record on everything else — including Space Solar and Living in Space…
Who do you think I am going to listen to on this issue?
“need to disclose if urea has been used on the land because we will be testing for that — and nothing will grow if the soil is damaged with these chemical fertilizers without long term repairs”
FE, you ware talking to a religious fanatic. Did you take chemistry and biology in high school? Urea is made from carbon dioxide and ammonia. It is a major and valuable part of manure. Mammals make it to get rid of toxic ammonia from breaking down protein. The excrete it in urine, and there is no possibility of a chemical test being able to distinguish between urea in soil that years ago came from manure or from urea out of a sack. (Actually soil bacteria take it up from both sources.)
If “nothing will grow” you can kill weeds by pissing on them. Try it.
“Who do you think I am going to listen to on this issue?”
Why listen to anyone? Investigate it yourself. BTW, Google can’t find “BC Organics Institute.”
http://www.ofibc.org/
Neither of these people struck me as fanatics… I’d say they were more like the Nearings…
Another anecdote for you — a mate of mine’s family has a massive industrial farming in operation in Australia — he is a big fan of all the chemicals — lovers Monstanto — understands that is the only way to feed 7.5 billion people
He chuckles at my efforts to grow without spray ….
Anyway — some years ago they decided to go healthy and reserved some space in the paddock to grown organic veg…. the space had previously been farmed industrially … they mixed in compost — put the seedlings — they died…
They tried again the next year — died…
They kept trying for a number of years and eventually gave up.
His comment to me was — yep — that shit really does a number on the soil…. kills it dead.
What else are you going to be wrong about Keith? What else do you know nothing about?
So far we have:
– space solar
– living in space
– farming
Really like this article about money as a proxy for energy (and some good rebuttals to those who’s would beg to differ in the comments).
http://fromfilmerstofarmers.com/blog/2015/march/money-the-peoples-proxy/
Tell that to an economist and they’ll laugh in your face. Tell that to anyone else and they’ll probably just give you a blank stare. I guess for most people easily acquired external energy is like what water is to a fish.
Petrodollar anyone?
http://wolfstreet.com/2017/03/16/inflation-eurozone-ecb-trapped-in-doom-loop/
in answer to some of the fellow posters of why the fed has raised rates jim rickards posted his reasons for the rate hike and i think this is real reason why rates are now being hiked ” Now, we’re at a very delicate point, because the Fed missed the opportunity to raise rates five years ago. They’re trying to play catch-up.
The reason is that economic research shows that in a recession, they have to cut interest rates 300 basis points or more, or 3%, to lift the economy out of recession. I’m not saying we are in a recession now, although we’re probably close.
But if a recession arrives a few months or even a year from now, how is the Fed going to cut rates 3% if they’re only at 1%?
The answer is, they can’t.
So the Fed’s desperately trying to raise interest rates up to 300 basis points, or 3%, before the next recession, so they have room to start cutting again. In other words, they are raising rates so they can cut them”.
Well, they can always go to negative rates, I think, like the ECB did.
negative rates is probably the only way forward for BAU to survive but first we must have global financial crisis part 2 that will be triggered by rising interest rates the elders have thought of everything
This … should not exist….
Tesla Inc. clearly understands the best appetizers leave you hungry for more.After months of playing coy about whether or not it would raise more money, Elon Musk’s electric-vehicle-cum-renewable-energy company announced late on Wednesday it was seeking up to $1.15 billion in new money, three quarters of it from a convertible bond and the rest from selling new stock.
Tesla’s shares opened on Thursday up 2.6 percent.Bit of a head-scratcher, that reaction. But this is Tesla, so the normal concerns about dilution don’t necessarily apply.
And this wasn’t the biggest shock in the world. For all the innuendo on Tesla’s earnings calls, its financials and investment plans made it abundantly clear the company had to raise more money.Moreover, given Tesla’s already stratospheric valuation — 158 times 2018 earnings, if you’re interested — $1.15 billion equates to less than 3 percent of its market capitalization. And most of it will come in the form of a convertible bond Tesla will hedge in order to limit potential dilution further.
Net result: Tesla bulls digest it as a mere billion dollars and shorts scramble to cover their positions. The meal isn’t over yet, though.
https://www.bloomberg.com/gadfly/articles/2017-03-16/tesla-raises-1-15-billion-just-an-appetizer
‘normal concerns about dilution don’t apply’ — nope – just the opposite — the share price increases.
What a great business model – the more you lose – the higher your share price goes!
The Shalies are not stupid….
There is so much “malinvestment” going on. It’s insane. But boy has Musk cultivated quite the cult following! Maybe next – solar powered rockets! ugh.
“BBC radio began broadcasting faked news accounts designed to embarrass the Iranian government, claiming that Foreign Minister Esfandiari had agreed to humiliating concessions to British Foreign Minister Ernest Bevin for amending Iran’s constitution
…..In British eyes, Iran had committed the unforgivable sin. It had effectively acted to assert national interest over British interests.”
A Century of War
William Engdahl
Newer Technology but…it has always been this way!
I read that Esfandiari has a predilection for golden showers with prostitutes… and rumours are swirling that he is part of a global pedo ring supplying homeless Iranian children – for a price.
This was reported by the BBC, CNN, NYT, Washington Post and CNBs – therefore is MUST be true!
WARREN COUNTY, N.Y. – Armored vehicles that protected American forces in places like Iraq having a second life here at home.
Since 1995, the Pentagon has given $4 billion worth of military equipment to local police forces, everything from tactical gear to weapons to those mine resistant, ambush protected vehicles known as MRAPs.
Warren County, N.Y. – population 65,000 and home to Lake George – is a wintertime postcard, peaceful, picturesque and well-protected.
“I would be remiss at doing my job if I didn’t prepare for the worst,” said Bud York, the Warren County sheriff. “I’m tasked with protecting the public and protecting my people. That accomplishes both of those goals at no taxpayer money.”
The $650,000, 5-mile-to-the-gallon MRAP, and this armored Humvee, came free of charge through a defense department program that transfers surplus equipment to state and local police departments.
Nearly 200 law enforcement agencies added armored vehicles to their fleets in 2013.
http://www.cbsnews.com/news/not-your-typical-police-car-military-vehicles-put-to-new-use-back-in-the-us/
Just what you need in a picture post card peaceful small town!
http://cbsnews1.cbsistatic.com/hub/i/r/2014/01/19/10147e77-c1ee-4e65-80cf-21d3506eb7ac/resize/620x/c1ee45c36b7cbb7314d45727b32c4645/armored-vehicle-two.jpg
The Denver Post, on February 15th, ran an Associated Press article entitled Homeland Security aims to buy 1.6b rounds of ammo, so far to little notice. It confirmed that the Department of Homeland Security has issued an open purchase order for 1.6 billion rounds of ammunition.
As reported elsewhere, some of this purchase order is for hollow-point rounds, forbidden by international law for use in war, along with a frightening amount specialized for snipers. Also reported elsewhere, at the height of the Iraq War the Army was expending less than 6 million rounds a month.
Therefore 1.6 billion rounds would be enough to sustain a hot war for 20+ years. In America.
Add to this perplexing outré purchase of ammo, DHS now is showing off its acquisition of heavily armored personnel carriers, repatriated from the Iraqi and Afghani theaters of operation. As observed by “paramilblogger” Ken Jorgustin last September:
[T]he Department of Homeland Security is apparently taking delivery (apparently through the Marine Corps Systems Command, Quantico VA, via the manufacturer – Navistar Defense LLC) of an undetermined number of the recently retrofitted 2,717 ‘Mine Resistant Protected’ MaxxPro MRAP vehicles for service on the streets of the United States.”
These MRAP’s ARE BEING SEEN ON U.S. STREETS all across America by verified observers with photos, videos, and descriptions.”
Regardless of the exact number of MRAP’s being delivered to DHS (and evidently some to POLICE via DHS, as has been observed), why would they need such over-the-top vehicles on U.S. streets to withstand IEDs, mine blasts, and 50 caliber hits to bullet-proof glass? In a war zone… yes, definitely. Let’s protect our men and women. On the streets of America… ?”
“They all have gun ports… Gun Ports? In the theater of war, yes. On the streets of America…?
Seriously, why would DHS need such a vehicle on our streets?”
https://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/#1a4aeaea624b
The key take-away:
As reported elsewhere, some of this purchase order is for hollow-point rounds, forbidden by international law for use in war, along with a frightening amount specialized for snipers.
Also reported elsewhere, at the height of the Iraq War the Army was expending less than 6 million rounds a month.
Therefore 1.6 billion rounds would be enough to sustain a hot war for 20+ years. In America.
The thing is …. this is not about saving money by buying in bulk — this amount of ammo — assuming America does not go to war with itself — would last over a century — so you put out all this cash to buy that much ammo then let it sit in a warehouse…
That would be like building warehouses and buying up a century’s worth of widgets — they will likely be obsolete before they get used — and think of the opportunity cost on that cash that you sunk into inventory that is not needed — that is the entire point of the JIT supply chain…
These bullets are Plan B — along with the armoured cars —- Plan B is shoot to kill protesters when BAU unravels.
‘Hollow point sniper bullets’
http://www.vetscars.com/wp-content/uploads/2016/06/e629ac874ffd622d1a0292f36660bf6d.jpeg
Strange!
fast eddie good post obviously they are expecting trouble when the economy goes pear shaped again just like it did in 2008 and bail-ins cyprus-style are brought in but for how long 20 years did you say well you just never know
If we look at anomalies surrounding us they’re everywhere. Record market growth record debt growth. Of course those two are self reinforcing they have a feed back loop. But nonlinear geometrical growth occurs in nature as well. If we have baked bread or made beer we understand this effect in nature. What’s funny is only when people are forced to acknowledge that linear forecasts are fantasy will they abandon them. A good example is global warming. Fundamentally the science has been linearly forecasting the rate of warming with very few non linearities. This however flies in the face of proven science. Warming is a form of growth and it has a huge exponential feed back mechanism.
In the artic the sea ice acts as a giant thermal flywheel. The latent heat of ice is 80 times the thermal storage of water. It the winter it gives off its heat by absorbing cold there by moderating winter low temperatures drifting down over the Asian and North American continents. In the summer it absorbs the heat of the oceans and helps to moderate the temperatures of the same continents. It also reflects the summertime radiation reducing solar gain in the arctic oceans by 90%.
The present sea ice extent is at all time historic lows this year. In December in total darkness the ice was still melting because of the record warm temperatures. The point is the effects of warming have been delayed by this thermal system which has been attempting to regulate the planet, but it looks like we have reached a tipping point.
http://nsidc.org/arcticseaicenews/
This link is real time ice levels in the arctic and as you’ll note it’s off the charts low for this season. Now we can say “so what”. But that’s to ignore some very basic facts. First of all food production needs fairly predictable weather or it declines dramatically. Already this year the U.K. has been rationing vegetables because of crop failures do to cold weather in Spain. For the first time in recorded history the Cherry Blossoms in DC have failed because of unusual weather patterns. It was unusually warm in February and now a cold snap 30deg below normal.
If the sea ice completely recedes this summer as it appears to be on track to do. The solar gain to the Arctic Ocean will be tremendous possibly preventing reformation next winter. The affected of that would be a further weakening of the jet stream which already is looking like a staggering drunk. That will create unpredictable weather patterns around the globe.
Some will immediately say it’s science fiction to think rapid climate change could happen. “You’ve been watching too much of The Day After Tomorrow “. Like Bob said in What About Bob “If I can fake I don’t have it” right?
This fact seems to escape their notice that Mastodon’s have been found flash frozen in Siberia. Some with green vegetation in the mouths.
https://www.google.com/amp/www.foxnews.com/science/2013/05/29/wooly-mammoth-blood-recovered-from-frozen-carcass-russian-scientists-say.amp.html
If we understand anything about Latent heat in the phase change of ice we know that even Greenland has the potential for a rapid melt not a linear decline. If Greenland were to melt entirely the sea levels would rise 20′.
The greatest immediate threat is food production the next threat will be flooding of large amounts of coastline.
Yes, the Blue Ocean Event WILL happen. Its just a question of when.
Food production certainly. But also sudden draughts that then last for decades. Chaotic Jet streams that make weather truly insane..
Some decade, soon, we’ll have our first Category 6 hurricane..
Sea levels will rise. Its already baked in. Its a warmer planet, the warming alone will make the water ‘expand’.
But the biggies are ocean circulation and arctic methane, from the Siberian permafrost and also the seafloor. If these, or when, these go off. Then its truly dire straits for our species.
Like Eddy said. However we look at the big picture, its Game Over.
I think the feed backs will bring it much sooner then being anticipated. Keep an eye on this summer.
http://www.gdunlimited.net/forums/uploads/gallery/category_6/gallery_25428_6_11909.jpg
Apparently the tough macho multiyear Arctic ice (so much more resilient and harder to melt in the summer than thin flabby rotten single-year ice) is up enormously over the last few years, and presently accounts for over half the Arctic sea ice.
Anyone with an interest in arctic ice (including multiyear ice) can have hours of fun searching the Ocean and Sea Ice Satellite Application Facility (OSI SAF) database here:
http://osisaf.met.no/p/osisaf_hlprod_qlook.php?year=2017&month=03&day=13&prod=Ice-Type&area=NH&size=25%25
The Arctic Ocean is heated (or not as the case may be) mostly by warm water from the Atlantic. That’s why the boundary of the ocean ice cap is usually much further north on the Atlantic side. The sun is low in the sky over the Arctic (it never rises higher than about 23º above the horizon at the North Pole and most of the time it is much lower) and by the time the summer melt is extensive we are in August and September, when the Sun well on its way south for the winter. The low altitude sunlight that bathes the Arctic during the few months when there is significant ice melt is heavily blocked by the atmosphere and what reaches the surface tends to be reflected much more from the ocean surface than medium or high altitude sunlight does, so its impact is limited in the Arctic. This paper (Albedo of the Sea Surface by Payne, 1972) provides a general introduction to how sea surface albedo is affected by the altitude of the sun:
http://journals.ametsoc.org/doi/pdf/10.1175/1520-0469(1972)029%3C0959%3AAOTSS%3E2.0.CO%3B2
Then we shouldn’t ignore the fact that open water radiates heat into the atmosphere and into space much more strongly than an ice covered ocean does. Hence an open water Arctic in the autumn and early winter months would tend to cool the planet more than an ice-covered Arctic would, which makes an open water Arctic a strong negative feedback that would act as a break on rather than an accelerator to global warming until the point when the ice formed again.
“Then we shouldn’t ignore the fact that open water radiates heat into the atmosphere and into space much more strongly than an ice covered ocean does.”
That’s true, as ice reflects more visible light than the ocean, hence it radiates less heat. However, the visible light the ice reflects is not inhibited by greenhouse gases (those gases which are opaque in the infrared spectrum), but the heat radiated by the ocean is. Thus, less ice, more heat absorbed, positive feedback loop unfortunately (for whoever is left after the collapse).
“Then we shouldn’t ignore the fact that open water radiates heat into the atmosphere and into space much more strongly than an ice covered ocean does.”
That’s true, as ice reflects more visible light than the ocean, hence it radiates less heat.
The point I am trying to make is about open water radiating more heat from the ocean into the air than ice-covered ocean does, because the ice acts a lid keeping the ocean heat in, just like the lid on a cup of hot coffee does. So an ice-free Arctic would mean warmer atmospheric conditions but colder ocean conditions.
I haven’t seen a detailed modeling of the entire system, but since the Arctic gets almost all its heat energy in the form of warm water and warm air transported from further south and very little from direct sunshine, my understanding is that it probably makes little difference to the earth’s overall heat balance whether the ocean is ice covered or not. I don’t see a positive feedback loop in play there.
However, you may be correct that a positive feedback is in play, and if that’s so, we should see “blue ocean” conditions in the summer a few years from now as Prof. Wadhams and a number of other luminaries have been predicting.
My prediction is that we will never see much less summer ice than we saw in 2012. And my further prediction is that even if we do see that, it will not affect the climate beyond the Arctic; it will not result in New York getting the climate of Miami or London the climate of Madrid, for example. And it will not mean the end of snow or skiing in the Alps.
Moreover, if we are in a positive feedback leading to less and less Arctic ice, then after the 2012 minimum, we should have seen less ice in the 2013, 2014, 2015 and 2016 minimums than we saw in 2012, and we haven’t seen this, so the loss of Arctic ice leading to progressively greater loss of Arctic ice with each successive year doesn’t seem to be the dominant factor.
By the way, I’m not denying there is a lot less Arctic sea ice these days than there was 20, 30 or 40 years ago. I just don’t take it as gospel that this indicates a “death spiral”. Another explanation is that this that we are at a low period in a 60+ year cycle, so I’m going to keep observing this curious phenomenon for as long as I can.
http://greatwhitecon.info/wp-content/uploads/2016/04/piomas-death-spiral-201603.jpg
The point I keep making in other contexts is, “Overly simple models give misleading results.” A few years ago, I heard someone speak on how having an open ocean at the North Pole would affect climate. An additional issue he raise was the significant amount of “lake effect” snow likely to occur, and its albedo. It seems like this particular person’s concern was the likely impact in Russia. It sounded as if there was not a lot of snow cover in northern areas, IIRC.
Is there somewhere readily available bullet point summary of the major contributing factors to climate stability through past millennia, namely:
– celestial bodies mechanics and physics (Sun output cycles, Earth wobbles, ..)
– surface and ocean volcanic activity
– humanoid contribution “phase I” past ~1M years of terraforming the planet through altering the biomass and animal layers on the planet
– humanoid contribution “phase II” past ~5-10k yrs of large scale deforestation and agriculture practices
– humanoid contribution “phase III” past ~150yrs of industrial age
Sorry, unless this is modeled, counted and explained, I can’t cast a vote.
So I have to default to my standard scenario, which is warming (existing or not) is mostly hijacked as “a theme” for future deployment of austerity policies on the human farm, i.e. plebs can’t have their diesel carz anymore, but nomenclature can happily continue burn xy tons of jet fuel per trip in their “important meetings” and on yacht holidays.
http://www.igbp.net/globalchange/greatacceleration.4.1b8ae20512db692f2a680001630.html
‘The domino effect
Human impacts on the Earth system do not operate in separate, simple cause-effect responses. A single type of human-driven change triggers a large number of responses in the Earth system, which themselves cascade through the system, often merging with patterns of natural variability.
The responses seldom follow linear chains, but more often interact with each other, sometimes damping the effects of the original human forcing and at other times amplifying them. Responses become feedbacks, which in turn can lead to further forcings that can alter the functioning of the Earth system.
The nature of the Earth system’s responses to the increasing anthropogenic forcing is more complex than simple cause-effect relationships, such as greenhouse gas emissions causing global warming.
Fossil-fuel combustion produces a range of gases that have a large number of cascading effects. For example, carbon dioxide not only affects climate but directly affects how vegetation grows. It changes the carbonate chemistry in the ocean – the oceans are becoming more acidic, which in turn affects marine organisms. Changing carbonate chemistry is a factor in the widespread decline of coral reefs around the world.
Fossil-fuel combustion also produces oxidising gases such as nitric oxide and sulphur dioxide that have well-known effects such as acidification and eutrophication of ecosystems.
However, these gases can eventually contribute to changes in fundamental Earth system functioning because of their indirect effects on the radiative properties of the atmosphere, and hence climate. The mechanisms are through reactions with other gases plus their impacts on the ability of the atmosphere to cleanse itself through oxidation and other processes.
Aerosols produced by fossil-fuel combustion can fertilise or reduce plant growth, depending on the circumstances, and directly affect human health. They also lead to large-scale direct or indirect modifications of climate.
We can trace even more subtle effects back to fossil-fuel combustion. Increasing carbon dioxide levels affect the stomatal opening of terrestrial vegetation, reducing water vapour loss through the stomates. This results in higher water-use efficiency. This effect is especially pronounced in semi-arid vegetation, and can lead to increased productivity through enhanced soil moisture.
More generally, no two species react in an identical way to elevated atmospheric carbon dioxide concentration. This leads to changes in the competitive abilities of plants and hence to changes in species abundances and community composition. Fossil-fuel combustion cascades through the Earth system to become even a biodiversity issue.
Like fossil-fuel combustion, land-cover and land-use change also trigger widespread cascading effects at local, regional and global scales. We can show a few ways local effects of land-use change cascade through regional to global scales.
Multiple, interacting stresses
Global change does not operate in isolation but rather interacts with an almost bewildering array of natural variability modes and also with other human-driven effects at many scales. Especially important are those cases where interacting stresses cause a threshold to be crossed and a rapid change in state or functioning to occur.
More = https://www.slideshare.net/mobile/IGBPSecretariat/great-acceleration-2015
Yeah that’s what I’m talking about. 😎
Thanks, but articles like these with catch phrases such as distinction between linear and cascading effects are plentiful already, not offering much of substance.
I’d like to see a study, because it is possible in other fields of natural science, saying cumulative effect of past humanoid activity of ~10k years could have offset the balance of pre-existing ecosystems in a way resulting in: ocean acidification +/- [xyz], warming of the oceans +/- [xyz], increasing the vol in jetstream/gulf stream +/- [xyz] … etc…
Otherwise it’s all just policy talk (for good or bad).
How many studies do you want?
http://cdiac.ornl.gov/trends/co2/ice_core_co2.html
https://www.ncdc.noaa.gov/global-warming
https://climate.nasa.gov/vital-signs/global-temperature/
And who do you want it from? Is NOAA ok for you? Is NASA? Are there any preferences in Universities? US, European, Asian?
Its the same story everywhere, at least everwhere there is any sort of science involved.. there is NO debate in science whats going on.. just the normal scientific method of the things mentioned in the post above.
I’m all for debate in the sciences even when, indeed especially when, there are claims that the science is settled. As Karl Popper pointed out, scientific hypotheses must be open to challenge; they must be falsifiable in principle. They have to make predictions that are testable, and if they fail the test, they must be modified or abandoned. This is why contemporary CAGW is such a fun theory. It’s proponents keep predicting (or projecting) future events based on their settled science 97% consensus, and then Mother Nature keeps making a mockery of their predictions.
Prof. Wadhams is a case in point. He’s literally made a career out of predicting the end of Arctic sea ice, sticking a date on the prediction, and then finding the ice is not melting as predicted. It’s reached the point now where wiser allies have told him “No more dates, Peter, please!” as each failed prediction only emboldens “the deniers”.
Anybody making climate predictions should bear in mind the wise words of the IPCC’s AR4 Working Group 1:
The climate system is a coupled non-linear chaotic system, and therefore the long-term prediction of future climate states is not possible.
https://www.ipcc.ch/ipccreports/tar/wg1/501.htm
This statement is as close to settled science in the climate field as can be. And yet amazingly, a lot of people both inside and outside the field who talk as if they know about climate are unaware of it or of its implications. The biggest implication is that the climate is going to behave chaotically (in the context of Lorenz’s chaos theory) regardless of any forcing or feedbacks we may think we’ve identified. Chaotic doesn’t mean random, but it does mean unpredictable.
Our economy seems to be fairly similar.
Pension news if anyone cares, somewhat related to interest. Might be a big deal some day, unless bigger events mask this issue.
http://www.zerohedge.com/news/2017-03-16/collapsing-pensions-are-about-bring-hell-america
“Because it’s based on a future promise to pay, it has long been a benefit dangled to solve strikes and union disputes – because, in the end, it is just more debt, whether private or public.
With tens of trillions in unfunded liabilities, the weight of an avalanche remains dangling over our heads. An aging population is cashing in on needed retirement benefits while the younger generations must support multiples that are unsustainable financially.
Somewhere between the retiree that needs clothing, food and lodging, and the bankruptcy of cities and state governments is the makings of the next economic crisis.
California’s Calpers public retriree system is notoriously underfunded and doomed to implode. Chicago, Detroit and other urban wastelands are sagging under abysmal debt. Dallas, Texas pensions went insolvent.”
I’ve been screaming about the pensions bomb since I’ve been blogging on this subject
it’s just being ignored.
money is a token of energy, therefore a promise of future money is entirely dependent on future energy…when there won’t be any.
it follows then that pensions will be unpayable, because without energy backup, nations will go broke
What can’t be paid will not be paid, promises not kept, pensions really a 20th century thing or heading that way.
Anything that can be consumed will be consumed. Money is no longer a store of value. The government has been printing to the moon and back and the economy is contracting. They just need to have a debt jubilee final send off.
Money is a token for value/energy.
Money has not been a store of value since the gold standard.
My definition of store of value is ultimately energy. The value of gold is the energy required to get it. If it were plentiful as sand it would have no value. Interestingly BitCoin is an energy play as well. BitCoin mining is ment to mimic gold mining. The calculations become more and more difficult with time like a depleted gold mine. More energy is required increasing the cost and value. But without convertibility back to energy (including food which is an energy storage device) money of all forms is useless.
I’m thinking that Bitcoin is one of the few nonFiat currencies. It is of a limited supply.. therefore..
How does a country trade for oil, food or other essentials when banks are insolvent, currencies inflate like in the Weimar Republic, nobody wants to give up gold, silver is too difficult for international trade..
My bet would be, that Bitcoin, or another currency like it, or a basket of cryptocurrencies, will become the new international trade currency. As the international banks start to fall, in that short timeperiod Bitcoin should go to x10 values from today.
But then of course the JIT economy starts to crumble. Therefore the grid eventually comes down. And then the internet goes bye-bye, and at that point Bitcoin of course goes to zero value forever.
But for a short while, when everything else goes down, Bitcoin should go up like crazy.
Bitcoin may be finite, but the possible cryptocurrencies are infinite.
Electricity goes off, and bitcoin goes away.
“Electricity goes off, and bitcoin goes away.”
Which is one of many reasons people will put out a maximum effort into keeping the power on.
So when BAU goes — should I push the light switch harder — will that make the lights come back on?
Maybe I can scream at it — ‘this is not happening — this cannot be — electricity is a god given right — now turn back on — I command thee — let there be LIGHT!’
no currency can sustain its value beyond the energy that exists within the (national/economic) system in which it circulates
This applies to any currency, irrespective of what name you give it, or what form of hardware it takes
If you use barter, then the goods bartered require energy to be created and sustained.
Therefore you cannot have a chain of bartered goods where the chain itself gives a diminishing return with each ‘exchange’ down the line.
There must always be an ‘upward’ barter. And if you have an upward barter, you must have constantly increasing energy at the start and in subsequent exchanges.
Right! You also need growing debt to get the gold out, so that people can buy enough stuff to keep the price up.
BitCoin is just another ponzi scheme. And it is fiat-like in the sense that people have to believe that it is real for it to have any value. In a declining world/economy, as electric power generation grows scarce with blackouts on a regular basis, I doubt people will put their faith in digital “electrical” money.
It’ll be the End. No electricity, no fiat money. Then when the back ups die there’ll be no record that you ever had any money. Now we see the PTB want to kill off cash. What a good idea! So, no fiat money and no – or little, cash. And there’s no plan about what can be done, so the result will be a tsunami of chaos. Welcome to the future!
We could broaden up the discussion of store of value into the ~environment itself.
It would not surprise me one Bit (no pun intended), that affluent Chinese “on the rub” would one the occasion of larger crash, suddenly and very willingly offer to pay today’s equivalent of entire large-ish factory (in Asia) to get a nice family farm in the Alps.
But nobody will be selling, not mentioning lot of fat cats in that part of the world being active as well and driving the demand/value up..
It has been pointed out by smarter individuals than me on the collapsnik-doomerism scene on several occasions, that failing pension schemes will result into tightly knit multi generational families again. It makes sense on most levels, educational, energy, stress-happiness, entropy fight, ..
On the other side, that equals tax revenue, real estate, carz, various fluff services,.. carnage.
I know Sweden is extreme, but I think there is much more crowding families in smaller homes, singles in miniature apartments/hotels, before bringing mother inlaw under the same roof.
Yes, cultural and path dependency trends are hard to overcome.
I was more commenting on the future prospects though, the situation you describe is also partly (or mostly some places) allowed by the debt – easy money pushers, i.e. mortgage yoke on everybody’s neck becoming the norm.
Economic distress is more likely to result in living smaller than taking care (why? What could that person contribute with?) of a parent you’ve barely seen since you were three.
It could become VERY bad being old when pensions, sick care and everything ends at the same time. But at least you are old.
I think that jobs end at the same time. This is a problem. I expect those who cannot contribute will not be well taken care of. They may be thrown out.
Fat chance.
The younger generation knows the older generations f99ed them up. Do you think they will be happy to take care of those who f99ed them up? Fat chance.
Abandoning of the old will be the norm.
I’m not disputing the reality, there is a large part of pathological, socially dysfunctional people and fractured families around, especially in some very special parts of the world, ehm. That doesn’t mean though the functional ones would not rather band together on the grounds of pooling resources and sort of weathering the storm.
People band together only when it is more beneficial to band.
Long ago, older people had the respect of communities and some skills to offer.
Nowdays, such older people are very hard to find – they spent their youth in drug and sex, spent their middle ages having fun and bling, and they just grew old and sick without any useful skills. Do you think the struggling younger family members will just take in a time bomb in their houses so they could die together?
http://4.bp.blogspot.com/–EbLZrR3NRE/UAdzjqfQ-jI/AAAAAAAAFv0/grzfH6RJTss/s1600/Old-Hippie.jpg
Funny you should mention this. Me and my wife (plus two small children) are in the process of moving together with mother-in-law for exactly these reasons. Plus we have both grown up in more or less fractured families and want to reverse this trend.
There seems to be a great deal of family fracturing going on these days as well, especially with young parents. I can’t help but thinking it may have something to do with the ongoing decline/collapse, people have to work more to buy a big enough home, maybe both parents work full time, lots of commuting, lots of stress and little time to nurture relationships.
Rainydays, I’m sure you’re right. Rising complexity and the technology that accompanies it, combined with worsening energy and resource constraints, are sapping us non-elites of time and energy, forcing us to work harder for the same return and in tighter niches, to be more flexible about how and where we work, and in many cases to spend ever more time engaging with machines than humans. Common sense would suggest that this is not great for interpersonal relationships.
All of these pension plans have big problems. (So do government sponsored plans, such as Social Security, but for different reasons. They are pay as you go, so depend on tax revenue each year, more or less.) The private pension plans are in addition to Social Security, so if Social Security hangs on (a big if), these people are doing as well as the rest of the population who was not fortunate enough to get a private pension.
Sorry, there is no such thing as Unfunded Liabilities for a federal government. Just as it never saved up to pay for todays pensions etc, it never will have to save for a future debt. The federal government has no need to borrow or save its OWN MONEY. Absurd idea, but the mainstream encourages us to believe the government gets its revenue by borrowing from the banks and from taxes. Nothing could be further from the truth.
The whole world, including the government, is depending on future flows of cheap energy to allow business as usual to continue. Somehow, the economy also has to keep growing, to keep up with all of the necessary interest payments as well. (This is also unfortunately true, whether the borrower is a government or not.) “Funding” any kind of future promise is not possible. (Also true for the government.) In the days when cheap energy supplies were rising, it looked like we could continue to grow cheap energy supplies, but this is becoming a problem.
We are all dead in the end. In the meantime we have deflation and we have gross inequality. Are you saying we do nothing now, because we are all dead in the end?
I agree that more debt is helpful before reaching the end, but I don’t see that deficit spending by governments necessarily has a special role in this. Currencies float among each other. There are consequences to countries raising debt levels. Countries depend heavily on their imports. If they can no longer afford them, this is a big problem. I also find the MMT explanations unhelpful.
Apart from Trade, which has its own issues, long term unhelpful, an economy needs a budget deficit to grow. I doubt very much you understand MMT. Don’t forget MMT is macroeconomic reality. It’s not some hypothesis that is subject to proving. It just explains what is going on in the real economy.
Forget mainstream ideas, they fail every time. Fortunately that realisation is dawning as the public sees the errors now abound. Neo-liberal policies depend on the mainstream and this has led to a huge increase in inequality as the rentier parasite class has benefited disproportionally from the world of finance. This is where the growth since 1980 has really gone.
Do you understand a budget deficit? Do you understand that a budget surplus almost always leads to recessions? Do you understand the obsession with balanced budgets is a household analogy? A complete misunderstanding of a federal government’s economic reality, but convenient so the politicians can strip wealth and benefits off the middle class? Only understanding MMT will explain all these false policies.
On our way down we should pay everyone a UBI. What with the rise in joblessness through automation and robots etc, jobs are not necessary for everyone to make the economy grow. It’s not growing through wealth production. Most people have service and wealth spending jobs. Farmers are 2% of the workforce, mechanisation does the rest, burning oil so we can eat. The UBI will pay for itself through the increase in GDP from spending by the public into the everyday economy. This is a free hit for the economy. The government can deficit spend for free K-16 education and universal healthcare. Even if it’s not entirely revenue neutral it’s got plenty of fiscal gap to burn before anything like a run away inflation takes hold. In 2012 The White House thought the fiscal gap was nearly $2 Trillion. It will be much bigger today.
And so on.
Excellent report as usual. Just one clarification:
The Fed rates are determined by the market 10-year treasury rates in order for the Fed to stay competitive. Everything else is either a side issue or, usually, smoke-and-mirrors jawboning. Most interest rates worldwide follow the marketed treasuries. You may enjoy doing a correlation study on the two: one goes up, then the other. Have fun with it! It makes Fed rate predictions soooo much easier. I’ll look forward to your assessment.
Any references? I know that they often move together. I thought that in the early 2000s, the Federal Reserve target interest rates were moved down below the 10-year interest rates as part of the attempt by Greenspan and others to push the economy along. It looks to me as though the Federal Reserve target interest rates have a lot more variability than the 10-year treasury rates. You are talking about prices for treasuries in the aftermarket, though, I presume.
??? The 10 year rate is affected by expectations of future interest rates. The Fed Funds rate is set by the Fed. They can control the yield curve by buying and selling securities.
https://upload.wikimedia.org/wikipedia/commons/c/c0/US_Treasuries_to_Federal_Funds_Rate.png
Just commenting on the 15th March 0.25% rate hike by Yellen. I just could not believe that she was that irresponsible to raise the rate by 25bp. There can be only 3 possibilities – 1)She is totally clueless, 2)She saw something that is very bad 3) They want to crash the system. From the chart below,
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/05/20170308_march.jpg
I feel that it is #2. Personally, I felt the Feds saw something and they did not want to tell. That is why it was “peaceful” all along until sometime late February 2017 it went vertical. Something really big must have happened or they realise something may happen in future. I suspect it is a very bad inflation, much worse than anyone could imagine. What I write below is what I know and what theorize. I am more than happy if there are people who can dispute it.
Inflation is a killer and it really destroys any economic growth. Imagine paying extra 10-15% extra for the same item. The same 10-15% could be spent on other items that may boost the economy. I live in Malaysia (not Singapore as what many suspected) and the basic necessity is really getting more expensive. The populace thinks that the local leader is not capable but not many people know the big picture where inflation is rampant everywhere. A lot of money is “lost” through inflation as families has to spent a lot more for the same quantity purchased. Of course this curbed other purchases that is deemed “not necessary” like perhaps junk food. It is perhaps interesting to note that the number of people that is directly related to producing, transporting, selling basic necessity (i.e. employment) is very less in our present day complex economy. Look around your friends, who are really working in fields related to basic “necessities”? I have engineers producing phones, a few interior designers, builders, computer scientists, cosmetic sales person, etc. All these people will be hugely impacted by “lack of spending” as people cut down.
Inflation, to me, is a slow burner. I think there is a threshold. It may lay dormant and suddenly raise its head. It may take years to build up and when it passes the threshold, it explodes. Just like a u-shaped rail with a marble. you can slightly drop the marble higher and higher and at one point, the marble just goes off the rail on the other side of the u-rail. For the last 9 years, the CBs have been doing a lot of digital money creation. It has no immediate impact. It is indeed very different from the olden days where you need paper. Now, just add a few zeros. It is so easy and no one felt the impact.
When the Chinese printed, it was literally given away to those who are “connected”. Money was freely distributed and it flowed out of China. China was exporting inflation big time. Many countries are the beneficiary of this money when the Chinese brought properties with free money. It was “pure money” in the sense that no goods were exported out and the money stayed in the country. Millions or even billions poured in. The money eventually, over time leaked into the market.
Just like CO2 in the atmosphere, there is a lag between the increase and its effects. I know my local situation in Malaysia and from what I read in blogs, comments and posts, it is similar for all countries. Do you guys realize that the last 5-6 months, inflation became really really bad? You know the service size shrunk, the cost increase and the service sucks? It is not slow boil anymore but everyone can feel it. Instead of taking a bowl of noddle, you need to take two now. It was not like that before 1-2 years ago.
As for oil, if there is an inflation, technically, the cost of oil should go up as well if you factor in inflation. The cost of machine maintenance, raw materials, consumables (grease, oil, fluids, etc) goes up and the actual cost of extracting the oil goes up. However, the price of oil did not go up. In fact, there is a high chance it goes down. If you do an inflation adjustment, the price of oil is probably a few dollars lower than what we have in the market now. (adjust down since the price of oil has not risen, therefore, the “actual value” is lower)
This does not bode well for everyone. If you just look at inflation, it is rising in all the countries and the number of unemployed is high, wages are stagnating and many other statistics are very bad. Some of the statistics are so bad that the government cannot cover or plaster over it anymore.
Eurozone, Japan and USA are talking about tapering or hiking. Hiking rates now is actually suicidal. A huge chunk of derivatives are tied to interest rates. LIBOR is creeping higher, ARMs, student loans, CLO, CDO and a host other derived, double-derived financial engineering products will eventually have some issues.
This is basically a positive-feedback loop with negative consequences, a big negative consequence loop that is self propagating, self-perpetuating and possible, self-destruct.
From the rate-hike odds chart, I sincerely think the Feds saw something and hiking rates is a lesser evil than maintaining rates.
Any comments welcomed !
Incidentally we need high EROEI sources to support way too many “non essential jobs” (not related to food production). This is a good way to explain to layman on the need for high EROEI. 70 farmers, 20 Shepard, 2 blacksmith, 2 weavers, 1 shaman and 5 soldiers and not 3 farmers and 97 managers
Suppose that is why Peter Bane, Permaculturist and author, has stated we need 50 to 60 million more Garden Farmers here in the United States alone! That would help absorb the idle and shiftless. Unfortunately, that would also mean a major cultural/paradigm change, not only an economic one. Judging from the support from the Department of Agriculture and Universities, the garden farmers will continue to raise lawn grass.
70+20 farmers per 2 blacksmiths, those were the dayz..
Nowadays, the ration is like several thousands inhabitants per single blacksmith with some real hands on experience on draft animals, crazy..
In terms of inflation and digital money turned real purchasing power pouring from Asia to lock down hard assets everywhere, whatever craziness investment idea it could be (e.g. city center historical villas post crash anybody lolz?) you are correct, it’s starting to be noticeable in day to day living expenses. However, lets not limit the options, we can get some sort of wobble action effect, where rapid successions of stagflation are interchanged with deflationary shocks.
oops sorry, couple of typos, meant “ratio” and “hundred thousands people per single blacksmith” ..
I will give this part a shot:
” This does not bode well for everyone. If you just look at inflation, it is rising in all the countries and the number of unemployed is high, wages are stagnating and many other statistics are very bad. Some of the statistics are so bad that the government cannot cover or plaster over it anymore. ”
I feel she is behind the curve and should have raised long ago, as you say just look at inflation. Agree that growth is not there, but is 0.25% either way really change the situation much. We may have past the point where the control mechanism is gone or at least different now?
I expect that the situation in Malaysia is a little different from what it is in the US, especially with respect to inflation. The Malaysian Ringgit has fallen relative to the US dollar recently. This is what is making inflation high in Malaysia. Raising the interest rate for the US will tend to make the US dollar rise higher, and thus make the situation worse.
Thanks, I did not look at it from a Malaysian perspective, well said.
Gail, interestingly when I met up with my American and EUropean clients and friends, they say the same thing about inflation there. By right if your currency is strong, you should have less inflation. It does seem “this time is different”.
http://wolfstreet.com/2017/03/16/inflation-eurozone-ecb-trapped-in-doom-loop/
Any interesting opinion or takes?
CTG
12 years ago I almost went bust due to a sudden and prolonged loss of orders and nearly ended up’ on the street’ as it were (of course, it would have been a family sofa!)
So I paid very close attention to prices of food: there has been at least a 100% inflation in price for good-quality (? one hopes) foodstuffs since then in the UK.
In the meantime the cost of food, wine and clothing in Spain seems to have remained stable or actually fallen, which has compensated for high unemployment and poor pay post 2008. This is how families have survived on grandfather’s pension, and well-paid middle class people have not suffered one bit.
In Japan the Pringles have shrunk. The tubes were 8cm in diameter but are now 7cm. They come from a factory in Malaysia apparently. Also, butter went up by almost 50% over the course of a few years, the reason given was to give higher prices to aging farmers to keep them in the business. On the other hand in Japan, beer has been getting cheaper, and this trend is set to continue as the beer tax is going to be reduced. More than anything, this comes down to falling demand caused by the aging population of beer drinkers, who no longer feel the urge to down five pints in an evening and are content with a single 350ml can.
Overall, while prices have been going up slightly over the past quarter following a seven-month stretch last year during which they declined, inflation has been kept in check by low consumer demand. Sellers are afraid to raise prices for fear of losing even more market share. So they look for ways of cutting costs by lowering the quality of ingredients or packaging, or by physically shrinking the goods.
An end to the tradition of those poor Japanese office workers getting hammered after work seems rather sad: who can be happy with just one can?!!
I think I saw that their wives are starting to divorce them when they retire in greater numbers too: not a very good deal in return for lifetime slavery!
I think it’s just a matter of Yellen needing to maintain the “economic recovery” narrative. Everyone can see the stock market rising so we must be in recovery right? It’s absolutely necessary that they maintain confidence in this narrative. As soon as people lose confidence in the system all hell will break loose rapidly. They are betting that another 1/4% hike won’t upset the apple cart. It’s all a confidence game at this point. Hard to say what will trigger the collapse. Supposedly the US is sending Navy Seals into South Korea in preparation for a ‘regime change’ in NK. That might do it.
CTG,
Fed saw something and raising rates was the lesser of two evils..
ZIRP and NIRP damages banks and pensions.. thats why ZIRP and NIRP cant go on forever.
Banks are collapsing
https://global.handelsblatt.com/finance/banker-one-third-of-europes-banks-likely-to-disappear-724411
Pensions are collapsing
http://www.zerohedge.com/news/2017-03-16/collapsing-pensions-are-about-bring-hell-america
Now its a tightrope walk of exuberant amounts of debts to keep the GDP grpwing while banks and pensions are collapsing.. as Eddy has said numerous times, you can only push the string so much..
BTW I’ve mentioned co-operative banks a few times.. heres something interesting about cooperatives and credit unions https://global.handelsblatt.com/finance/flush-with-cash-and-influence-727163
Inflation is desirable, Excess inflation is dangerous. You don’t separate the two. A 1913 $us1 is today 4 cents, but it’s how inflation gets us the civilization we have today. Excess inflation is when the money supply exceeds the economic capacity of the time. Right now we are skirting deflation because the financial economy is absorbing most of the wealth. In other words the parasite class is sucking the life out of the economy. The only way for the economy to get some inflation and grow for the 99% is to deficit spend by government [federal] on neglected aspects that are suffering now. The ordinary non 0.1% citizens don’t have money to spend, so called aggregate demand is low as debt repayments leave little to spare. The middle class is being decimated and that is most of us. Now with the added effect of loss of work opportunities, both wilful and not, future jobs are in doubt. The government will be forced into actions many of us will not like, such as paying a UBI so that spending into the economy can resume, and even a debt jubilee might have to be enacted, to help wean us off the debt bandwagon we need to get off. It’s all temporary of course as we cannot save ourselves now.
Excellent insights. I agree – it’s 2.
Keep in mind the inflation rates that are published are fake — we never get the real numbers partly because things like pensions are indexed to the CPI…. companies do not want to be increasing their contributions to keep place with real inflation.
The question is — is this a 2007 moment — and we are just waiting for the impacts of these rate rises to hit….. with the understanding being that the CBs will be powerless this time around…
The fact that John Key walked away from his job a few months ago — when he was extremely popular — when the NZ economy was (and is) relatively strong …. is in the back of my mind…
Now why would he do that — he’s only 55 years old….
I pretty sure he left because NZers had got bored of having selfies taken with him … and he had few other skills ….
Someone offer this summary of his legacy; he came, he saw, he dithered, he left
New Zealand’s popular Prime Minister John Key has unexpectedly announced his resignation, saying he was never a “career politician” and it was the “right time” to go after eight years in the job.
Key had been widely expected to contest his fourth general election next year.
But he said he wanted to ensure he did not make the mistake that some other world leaders have done, and instead wanted to leave while he was on top of his game.
The former Merrill Lynch currency trader called it “the hardest decision I’ve ever made”, with no plans on what to do next other than spend more time with his family.
http://www.aljazeera.com/news/2016/12/zealand-pm-john-key-resigns-161205031834417.html
‘Top of his game’ Does he want us to think he was a pro athlete or something? What is that?
I suppose it sounds better than ‘the world is about to end — and rather than waste my time as the PM of NZ shuffling papers and giving speeches — I am going to take Gail Tverberg’s advice and spend as much time as possible with my family and friends — before we all die’
.
He may well find, like so many retirees, that his family were seeing quite enough of Daddy as it was!
The truth is probably somewhere in between him being a OFW regular and family issues (e.g. wife wanting divorce, teenage kids, maybe illness in the family).
My comment is that I don’t see inflation now or in the future.
You cannot simply see higher prices and declare inflation. During the Great Depression there was demand for clothing and people were cold and dying from it, yet warehouses were full. Farmers let their fruit and crops rot and poured milk down drains (the shale oil advocates like to call it a glut). The reason this occured was because employment was low, along with wages. High employment and wages create demand and inflation. Presently there is no lasting means to create employment, especially without a cheap plentiful energy supply.
At the moment we are in a death spiral of deflation, higher prices simply shrink the market but maintain demand by the employed. Company stock buybacks are an example of a shrinking market and maintained demand, (but of course this is not an infinite solution). As those that cannot afford price increases drop from the system, they are discarded and increasingly get deliberately and maliciously omitted from unemployment, welfare and other statistics.
ZH news link, profits at $40, is it too good to be true ?
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/15/20170316_shale1.jpg
” The U.S. shale cowboys are back on their horses and leading a strong recovery in the oil patch that is not expected to falter even as WTI prices dropped last week below $50 per barrel for the first time in more than two months. ……
At the same time, reduced breakeven prices in many shale plays and forward locking-in of production is allowing the companies currently drilling in the U.S. to turn in profits even at a price of oil at $40 a barrel.”
http://www.zerohedge.com/news/2017-03-16/has-opec-underestimated-us-shale-once-again
The US knows that the world cannot live without oil. It also has a huge number of unemployed oil workers. It needs to keep as many of these people employed as possible, if it is to have any chance of being continuing in the future. It used the OPEC promise to cut production as a reason to bump up capabilities, where production could easily be added, whether or not there was real certainty that prices would rise very high.
Because the value of oil is greater than its face value (which economists do not understand) not only is the US willing to fight Trillion Dollars wars. They are willing the exhaust the balance of the economy and ecology to keep it flowing. They know shale is a Ponzi that is propped up by money printing which it consuming all store of wealth (energy) but it doesn’t matter. So the point is we’re already far into the crisis much of it is behind us the average shmoe just doesn’t know it.
+++++
We are at the Whatever it Takes point…. all the rules get thrown in the garbage… if it buys us another year Just Do It…. the is desperation on steroids
And meanwhile Zero Hedge and Stockman and Roberts and Wolfstreet and everyone else continues to scream STOP — this is madness!!!
It’s not madness at all — it is what one would expect from a cornered beast — it is completely logical — if one understands the true nature of the problem.
the value of oil is greater than its face value
++++++++++
The value of oil is potentially many times greater than its face value. And this in turn may make it very worthwhile for governments to subsidize its procurement, even to the extent of going to war over it.
Many of us see examples of this in daily life. Say down on the farm I use 10 liters of gasoline with some simple machines and 2 man-days of labor to plant and harvest a ton of rice. Without the gasoline the same job would have taken roughly 22 man-days. So the value of each liter of gasoline was 4 man-days of labor. The cost of the gasoline was about 120 yen per liter while the minimum wage for laboring would be 8,000 yen per 10-hour day. So by using 1,200 yen worth of gas and the related machinery, I have saved 176,000 yen in labor costs.
On the other hand, I could simply use the 10 liters of gasoline to drive around the countryside and enjoy the view. In which the gas is worth whatever I judge it to be worth.
My 10 liters doesn’t add up to a hill of beans, but the world economy’s need for the juice is great enough to make it an invaluable resource for as long as we can afford to keep purchasing it.
The value is higher than its face value, when it sells for $20 per barrel. This becomes less and less the case, as the cost of extraction rises higher. The market price gives somewhat of an evaluation of what the worth of a barrel of oil (or unit of natural gas or coal) is worth, given what non-elite wages it generates, and other parameters of the system. The market evaluation is now coming in quite low for a variety of commodities.
Just to back up some previous comments the Iraq war was a resource war. It was all about oil security not just profitably for E&P majors. What it means is the powers in play recognize the value of oil is greater than its face value. That is why the US was in essence willing to subsidize oil from Iraq with a Trillion dollar war. All wars are resource wars the US military is just an arm of corporate capitalism. By establishing 700 bases around the world they keep the world safe for exploitation. The big prize has been Russia but as usual ever since the central banks botched the Bolshevik Revolution corporate control has been elusive. Almost got it in 1991 but Putin caught on to the play. That’s why there is so much pressure now to vilify and demonize the Russian Federation just like the run up to Iraq. Ask a very simple question would the present tensions remain if Russia’s resources were dominated by western investors? Only one answer to that question.
Here’s a good article on Iraq.
https://www.google.com/amp/s/amp.theguardian.com/environment/earth-insight/2014/mar/20/iraq-war-oil-resources-energy-peak-scarcity-economy
Smedley spoke of that some time ago:
https://www.goodreads.com/author/quotes/115545.Smedley_D_Butler
“Smedley D. Butler quotes (showing 1-23 of 23)
“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”
― Smedley D. Butler, War is a Racket: The Antiwar Classic by America’s Most Decorated Soldier”
The Russian Federation sort of slipped out the noose so to speak.
That’s why American industrialists backed the Nazis. They wanted to bring Russia back into the fold. Oops that didn’t work well. Hate it when my dog bites me.
With that lens on let’s look at some other wars. I think I see a trend here!
Moreover, the US public helped even elect twice (thrice) presidents directly spawn from such circles, Grandpa Bush (father of the first POTUS) was investigated – sanctioned under the Trading with the enemy act during WWII.. Not mentioning the later career of his “intelligence” son dealing with “ex” nazis throughout the 1950-60-70s.. Links to 1963 and 2001 threshold events notwithstanding.
This is the true nature of the human farm as sheeplez (bother to) know nothing about such basics.
I am a sheep.
There is grass in my paddock.
There is an abattoir over the hill – its a ugly business.
I am a happy sheep because i choose not to ponder such things.
Smedley knew a thing or two but as usual no one listens.
I am afraid that there is some truth to this.
“The Russian Federation sort of slipped out the noose so to speak.”
While likely meant in positive sense, this is an understatement.
It took very special and unique (extraordinary) conditions to put Russia back on the map. Large part of it is of cultural and historical nature. For example, during the lowest points of despair during early-mid 1990s, it wasn’t uncommon event for the staffers at top labs of the Russian space-mil industries not to be paid in cash, so provisions of food, heating for homes and schools for children were at least semi regularly patched together. And during such conditions some scientific projects basically went on, and endured as hobbies at glacial pace. Imagine that. Very few societies would not completely disintegrate into far less complexity of those years.
It almost seems as divine intervention, firstly getting the right person/s for the gov spot in the late 1990s stopping the crash, then energy spike (revenues) wrestled out of foreign hands and also putting domestic oligarchs on tighter leash, step by step rebuilding the country.
Fully agree, “almost seems as divine intervention”, thank you for your additional insight. A tough and resilient people to make it through the worst years.
Which will be replaced by Muslims within a generation.
I’ve watched many a speech given by Putin and he strikes me as one of the saner leaders on the world stage these days.
It would have been better for Russia would have collapsed so the rest of the world would have a smogarsboard of its resources.
Figure 6 is quite interesting. According to our theory of cost share (http://link.springer.com/article/10.1007%2Fs41247-016-0016-6), a rising cost in a growing economy indicates lack of importance while a shrinking cost share in a growing economy indicates importance. Thus Figure 6 suggests that since the price collapse, oil has not contributed to economic growth, on the contrary it has been a drain on economic growth. One explanation would be that investors are financing oil wells that don’t pay out.
Just stop funding oil and watch what happens to the economy. Your suggesting it will grow? I suggest it will collapse. This a net energy trade from none oil energy resources. This is a coordinated last ditch desperate act to keep BAU in play. Everyone’s retirement just got spent in North Dakota and Texas and Alberta. If you didn’t take a trip somewhere last year that’s too bad at least you could have enjoyed some of it.
Currently investment in oil is completely dysfunctional and many people will lose money. I would say 10-15% of oil extraction is not profitable. This represents maybe 20-25% of oil investment. LTO extraction can ramp up quickly but declines rapidly. Offshore extraction takes 5 to 10 years of investment to come online, but does not decline as rapidly. Given decline rates, if the financial industry was functional, investment in short term extraction, that is LTO, would have pulled back much sooner and been kept very low, with investments in long term projects maintained to be brought online once production declines in a higher price environment. LTO extraction should be kept available to mollify sudden supply shocks. The opposite is occurring. Investment in LTO is rising in a low price environment and investment offshore is slumping. This is setting us up for a supply shortage beginning in 2020. See https://www.forbes.com/sites/gurufocus/2017/03/07/iea-forecasts-oil-shortages-and-sharp-price-rise-by-2020/#35a9f9485a14
.
I am not sure if “profitable” is necessarily the right measure. The issue is whether the price includes an adequate margin for necessary reinvestment, dividends, and taxes. On that basis, it would seem like a large share of the world’s oil production is not profitable.
Gail, question, if the costs of extraction are roughly the same as the price of oil on the market, is that any indicator of net energy or EROEI? Would it be incorrect to say that if it costs $40 dollars to get a barrel of oil out of the ground and the economy can’t afford a price of say, more than $50 a barrel, that the EROEI is close to 1:1 and net energy close to 0? Similarly, if shale plays are losing money could that be an indicator that the net energy is negative? The shale boom has led to an over 50% increase in US oil production in just 5 years, one would think that such a rapid increase in energy production would fuel a robust economic boom, as it did in the 50’s and 60’s, but instead our economy is stagnant. So I question if the EROEI of shale is even above unity.
You have to be very careful when talking about EROEI, because it doesn’t actually mean what you probably think that it means. It is traditionally calculated “at the wellhead” (not “as delivered’) and adds together dissimilar stuff–coal products used years ago to make metal parts and oil used to day, for example. Natural gas which would normally be burned as “waste” is often included in the calculation. The amount that is calculated as “net energy” doesn’t really give you anything that approximates “net” in the sense that you and I would mean net, when the word net is used elsewhere. You have an idea of what you mean by “EROEI of shale is even above unity,” but this likely to be quite different from what the actual calculation would give you.
In general, the amount of taxes governments are able to collect on an energy product give an idea regarding how much energy they are able to add to the government sector–one of the areas needing the biggest support. So it does give an indication that there is a problem. An energy product that needs a subsidy has huge problem. It isn’t supporting the economy at all.
Applying my model for bringing down the costs of energy production to oil…
If you are correct (and you may be) — then the solution here is to allow all the oil producers to go into Chapter 11 — write off all their debt (CBs can dump that into some sort of black hole and make it disappear… or maybe just saddle the Greeks with it… that camel’s back can handle a few hundred billion more…. )
Then they can start afresh — zero budgets for R&D — zero budgets for exploration — zero budget for drilling any new wells — just turn on the pumps on the existing wells…. and just pump away….
I agree. The market price for oil used to exceed the extraction cost by such a large margin that oil companies could pay good wages and share their profits not only with investors but mineral rights owners and governments in the form of taxes. I should have qualified my gesstimate on profitability as a WAG. What is indisputable is that the financial conditions of oil companies is deteriorating and with it their ability to quickly ramp up production even in the event of higher prices.
Thanks very much for giving a link to your new article. You gave us a link to your working paper earlier. By the way, my favorite quote is,
Regarding the price collapse, and the experience since then, the problem is that all energy prices have been in collapse, not just oil. Even uranium has been in collapse. Food prices have tended to follow the same path.
To me, the shrinking cost share indicates that we have a coming crisis on our hands. The economy is headed in the direction of collapse from low prices. Cost shares for education and healthcare are rising, at a time that the population cannot possibly afford such high costs. Adding intermittent renewable energy has tended to push total energy costs up, with only a tiny increment to supply. All of these stresses on the economy are more than it can handle.
Also, China’s coal consumption has been falling, in response to low coal prices. This is putting downward pressure on total energy consumption. Coal is reaching diminishing returns as well. Since the early 2000s, its growth was propping up the world economy.
Stagflation … the worst of all worlds…
http://www.zerohedge.com/news/2017-03-15/paul-brodsky-stagflation-horizon
How to solve stagflation?
It is not easy. For example, the Central Bank could use Monetary policy to try and reduce inflation. Higher Interest rates increase the cost of borrowing and this will reduce AD. This will be effective for reducing inflation, but, it will cause a bigger fall in GDP. Therefore, the Central Bank may be reluctant to target inflation when growth is already low.
In 2008/09, The Bank of England tolerated cost-push inflation of 5% because they were concerned about UK economic growth.
If the MPC cut interest rates to try and increase GDP, they could make inflation worse. Therefore demand side policies cannot solve stagflation they can only solve one particular aspect.
More http://www.economicshelp.org/blog/429/inflation/solution-to-stagflation/
Not a particularly good article FE. Inflation comes from excess spending power but stagflation requires raising the spending power, so that punters have more pocket money. This will get spent into the economy and raised interest rates are then affordable. Unlike now.
I’m working from memory, which is never a good idea, but you work with what you have. I seem to recall that in the early 1960’s people budgeted 16% of their income on food. I *think* today that is closer to 6%, but obviously the wealthier you are, the smaller the percentage. That ten percent of income enables the present lifestyle choices, if you are lucky enough to have the means. Hence, once margins get squeezed, there is no room for manoevure.
Right. Also, there used to be quite a few more 2, 3, and 4 income families than there are today. When there are multiple incomes, then the rest can get along on the income of the others. Now, young people find it harder to find a job that pays enough for them to get to and from work and buy uniforms. One of the partners has often dropped out of the labor force. This is a chart I made, that I didn’t have room for in any post to date.
Americans are rich. According to first source swedes spent 52% 60 years ago, 19% today. Sounds reasonable.
I think it went a LOT of effort into keeping costs down to 52% compared to mostly mindless shopping today.
I see this as about 20% of population is involved with putting food on the tables, even if just 0.2% is working on a farm. (1% of food production is farm work, rest is complexity)
Food is one of the energy products that we have been getting more and more efficient at producing. As you point out, the spending in the USA on food has been dropping. In fact, this has been happening everywhere. The USA can produce all of this food with only 2% of the population being farmers. The others workers can produce other goods and services.
The catch, of course, is that big machinery operated by oil products has been substituted for the human labor. If the cost of the fuel and making machines (and perhaps interest costs for financing) goes up, the price of food goes up, and poor people are especially squeezed. They cut back on discretionary products (such as going out to eat in restaurants), and a recession starts.
“Thus Figure 6 suggests that since the price collapse, oil has not contributed to economic growth, on the contrary it has been a drain on economic growth.”
Wow! If your analysis is correct it shows what I’ve suspected all along, that the recent gains in the rate of oil production are somewhat, or even mostly, illusory. I suspect that wind and solar are a drain as well and represent maleinvestments. Germany had their Energiewende, and now they have expensive electricity and increased carbon emissions! So the shale oil boom, all it’s doing really is hiding what should be in plain sight, as you ended your paper with “…the contraction period in oil extraction has begun and … policy makers should be making contingency plans” (13). I sure hope they are, but I don’t see any signs that any of the “higher-ups” have any clue.
‘should be making contingency plans’
But they are…. they are…. https://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/#207723ba624b
http://truthaboutguns-zippykid.netdna-ssl.com/wp-content/uploads/2014/09/PIMA-County-SWAT-courtesy-outsidethebeltway.com_.jpg
The police state is locked and loaded….
Sorry I still don’t buy into that sort of conspiracy theorist junk. It doesn’t get any truer if you post it more. What it was was a quote (one of many as part of a competitive bidding process), for an amount of bullets they could buy at a steep discount over several years, i.e. “We, a bullet manufacturer, are willing to sell this many bullets at such and such price over so many years”. So, unfortunately, still no evidence that anyone is planning.
Didn’t see the picture in my WordPress app. I would certainly concede that the police are oddly over-militarized for peacetime. However in Hillsborough (which is just south of the county pictured) I have not seen that sort of “militarization”. Just standard SWAT team stuff. TPD might be different. I don’t know. My point being it’s not a consistent militarization across agencies.
I’ve spent time making a plea for a UBI [universal basic income] Here’s an idea. The government makes EVERYBODY a policeman! Then the UBI can be just a wage. It’s already getting close to being a police state, and we have the NRA wanting everyone to be armed. The 2nd amendment mentions a militia. so in the US the militia is 300 million strong, all armed and ready to fight. What could go wrong?
Just standard SWAT team stuff
All we have in my part of the world are these well-trained guys
http://www.worldfolksong.com/songbook/japan/img/photo/7396.jpg
That cat looks suspect. Like he’s slowly walkIng away from the scene of a crime. Which reminds me, my neighbor’s cat brought me a bird the other day. He might come in handy post apocalypse. 🤓
You did notice that the rounds are illegal hollow points. These are used by snipers in wars…
Is that a conspiracy?
Can you point me to a reference that details how buying a 100 years+ worth of bullets — and storing them in warehouses for that period — is more economical than just buy what you need on an annual basis.
A hollow-point bullet is an expanding bullet that has a pit or hollowed out shape in its tip often intended to cause the bullet to expand upon entering a target in order to decrease penetration and disrupt more tissue as it travels through the target.
Hollow points are designed to increase in diameter once within the target, thus maximizing tissue damage and blood loss or shock, and to remain inside the target, thereby transferring all of the kinetic energy to the target (whereas some fraction would remain in the bullet if it passed through instead). Both of these goals are meant to maximize stopping power.
Jacketed hollow points (JHPs) or plated hollow points are covered in a coating of harder metal (usually a copper alloy or copper coated steel) to increase bullet strength and to prevent fouling the barrel with lead stripped from the bullet. The term hollow-cavity bullet is used to describe a hollow point where the hollow is unusually large, sometimes dominating the volume of the bullet, and causes extreme expansion or fragmentation on impact.[1]
The United States is one of few major powers that did not agree to IV,3 of the Hague Convention of 1899, and thus is able to use this kind of ammunition in warfare, but US ratified the second (1907) Hague Convention IV-23, which says “To employ arms, projectiles, or material calculated to cause unnecessary suffering”, similar to IV-3 of the first Convention. For years the US military respected this Convention and refrained from the use of expanding ammunition, even made special FMJ .22LR ammunition for use in High Standard pistols that were issued to the OSS agents. The US Army has mentioned that it has been considering using the ammunition for sidearms, with a possible start date of 2018.[9]
The state of New Jersey bans possession of hollow point bullets by civilians except for ammunition possessed at one’s own dwellings, premises, or other lands owned or possessed, or for, while and traveling to and from hunting with a hunting license if otherwise legal for the particular game. The law also requires all hollow point ammunition to be transported directly from the place of purchase to one’s home or premises, or hunting area, or by members of a rifle or pistol club directly to a place of target practice, or directly to an authorized target range from the place of purchase or one’s home or premises.[10]
Oh I see… perhaps they are stockpiling these because they are useful and legal when hunting big game…. the Homeland boys are going to use these post BAU to shoot deer and moose to feed their familiies
It all makes sense now!
Have you guys and gals seen this new Marvel movie “Logan”? Besides from being really good it gave me a lot of “doomer vibe” where the main character’s life/world in many ways have collapsed.
It seems like hollywood is catching on to the doomsday-scenario, and this films popularity might be a sign of collapse awareness growing in the general public imo.
Checked out the Trailer, that little girl looks pretty mean, highly rated show on IMDB http://www.imdb.com/title/tt3315342/ . Seems to be a lot of Super Warrior young women on many shows these days. Will wait til it comes out on DVD.
What’s a DVD???
http://protect-your-privacy.net/?a_aid=2367&data1=tpbdirect_pop_ship&utm_source=tpbdirect&utm_medium=pop&utm_camapign=ship
I’m excited to see it: probably getting a babysitter this weekend so Mrs. Frogg and I can watch it at the fancy dinner-theater with beers and burgers.
Hmmmm, some interesting facts:
The story takes place in 2029.
In 2029, if I’m still alive, I’ll be 49.
Hugh Jackman is 49.
I plan on looking about like this at his age… perhaps minus the blades. Or not.
http://cdn3.darkhorizons.com/wp-content/uploads/2016/10/more-logan-story-details-paint-a-grim-future.jpg
Small yield, when less is better, so you think more players will get into this game? No shortage of weapons on earth, creative minds at work. Sometimes you just have to step away from the news and enjoy nature.
Has Defense ever been cut? Bet it doesn’t stay skinny long.
http://www.zerohedge.com/news/2017-03-16/trump-releases-his-first-budget-blueprint-here-are-winners-and-losers
” Today at 7am, Trump released his “skinny budget ”
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/06/budget%20winners.jpg
Making nuclear war the coolest thing again?
This has been linked in recent ZH article on some EU faction advocating its own nuclear deterrent, which in turn threatens to unravel standing non proliferation treaties, so resulting roughly ~60 state entities getting easily the bomb in few yrs time (think Gulfies, Japan, Poland, and other freaks, ..).
Now for the link inside, basically, the new hot trend is to have precision guided bunker busting missile capability in order to substantially lower the kt yield per missile head even bellow 1.0kt ! So, all those doomerish MT strong bombs of cold war era will not be in the vogue anymore. Planners will redraw the strategies and tactics towards using the small kt yield nuclear weapons to cripple nodes of infrastructure instead in much easier and practical fashion ! So, if simplifying it a bit, in not so distant future we could be in a new reality of low yield kt nuclear weapons to be used as today depleted uranium, i.e. all the time when events don’t work as cunningly planned.
https://fas.org/blogs/security/2016/01/b61-12_earth-penetration/
ps so, in that light all the NZ bound “strategic relocation” makes sense after-all as big nukes won’t be used ..supposedly..
The meaningless debt
When I was visiting one of my friends during the last year, there was a cute, girl coming to him in the afternoons (wearing a delicate cross on the subtle chain, simply dressed. You would say what a nice, good young woman! I knew they were spending a lot of time together…
Recently, I have heard the background story from him: this nice, cute Christina girl was a wife of somebody else. She lived with her mother, married and she and her husband built a house on the neighbouring plot to the house of her mother.
Here comes the point: The house was built using a horrible mortgage, which requires monthly payments that consume her whole monthly wages, while her husband earns only twice the amount as she earns. There was no problem for this woman to commit infidelity. She liked my friend more as her husband.
The answer is simple: The meaningless debt constitutes burden of additional stuff without the corresponding energy. She is forced to work and pay for the dead stuff and additional rising energy prices with terribly low wages for many years to come. What would you do? Would you like your stupid husband who accepted such idiotic idea or would you choose to spend time with a poor guy who has no such burden?
The answer is simple…
Obviously, I have made a mistake, “Christina” should by correctly “Christian”.
Does your friend pay her?
Are you crazy? He is poor. But knows the human species other species in the living world. He has no car. She was using her husbands car for going to him during the whole half of the year.
Tesla Announces $250MM Common Stock, $750MM Convertible Offering, Musk Buying $25MM; Stock Surges
In what will hardly come as a surprise, Tesla – which burned half a billion dollars in the fourth quarter – just announced it is raising capital in the form of a $250 million common stock and $750 million convertible offering. In addition, Tesla has granted the underwriters a 30-day option to purchase up to an additional 15% of each offering. Elon Musk will participate by purchasing $25 million of common stock. According to the press release, the aggregate gross proceeds of the offerings, including the options granted to the underwriters, is expected to be approximately $1.15 billion.
http://www.zerohedge.com/news/2017-03-15/tesla-announces-250mm-common-stock-750mm-convertible-offering-musk-buying-25mm-stock
I’ve got it all wrong …. I need to start a business that LOSES billions of dollars each year … a business based on hype and fraud and lies — a business with no possible path to profitability — a business that a government will back with subsidies (but that still loses money)
And then – and ONLY then…. can I realize THIS:
https://s-media-cache-ak0.pinimg.com/originals/a9/81/de/a981de1b143d8c54526b52905e1ebdb0.jpg
I know — Space Solar — Keith can you give me a ring…. +641212121212… ext 6578 make sure you mention the private jet …. otherwise my various gate keepers will not put you through (I am EXTREMELY busy and they are told not to interrupt me unless it is VERY important)
When Buffalo, New York couple Akram Shibly and Kelly McCormick returned to the U.S. from a trip to Toronto on Jan. 1, 2017, U.S. Customs & Border Protection officers held them for two hours, took their cellphones and demanded their passwords.
“It just felt like a gross violation of our rights,” said Shibly, a 23-year-old filmmaker born and raised in New York. But he and McCormick complied, and their phones were searched.
Three days later, they returned from another trip to Canada and were stopped again by CBP.
“One of the officers calls out to me and says, ‘Hey, give me your phone,'” recalled Shibly. “And I said, ‘No, because I already went through this.'”
The officer asked a second time..
Within seconds, he was surrounded: one man held his legs, another squeezed his throat from behind. A third reached into his pocket, pulling out his phone. McCormick watched her boyfriend’s face turn red as the officer’s chokehold tightened.
Then they asked McCormick for her phone.
“I was not about to get tackled,” she said. She handed it over.
Shibly and McCormick’s experience is not unique. In 25 cases examined by NBC News, American citizens said that CBP officers at airports and border crossings demanded that they hand over their phones and their passwords, or unlock them.
http://www.nbcnews.com/news/us-news/traveling-while-brown-u-s-border-agents-can-search-your-n732746
This reinforces my policy of absolutely NEVER stepping foot into America under any circumstances – EVER.
Did I tell you the one about a buddy who went to San Fran for a tech conference a few years ago — he arrived on a very early flight and the immigration queue was empty — so he just walked under the cattle herder rather than wind through it — and the Gestaop yelled at him ‘WHAT ARE YOU DOING! YOU CANNOT DO THAT!!!’
‘I was just…’ NO – YOU CANNOT DO THAT!!!
F789 You America. I cannot think of a more disgusting country…. how can Trump drain the swamp — the entire country is a swamp …
No — that’s insulting the swamp — it’s a open sewer
https://kickasshistory.files.wordpress.com/2014/08/23cholera2-articlelarge.jpg
That picture is in Africa, stupid, not the US.
Really? No way? Thanks for telling me. I hate to insult the people of Africa like that.
Apologies to the wonderful people of Africa for depicting the American sewer with a photo of your continent.
Let’s type filthy washroom in America into Google… I cannot guarantee this is an American washroom…. but it is a metaphor (you know what that is right?) for what I think of America.
http://barfblog.com/wp-content/uploads/2013/07/DSC05623.jpg
Hmm… let’s try this one
http://img10.deviantart.net/2236/i/2013/071/9/a/filthy_bathroom_by_stone1980-d5xudjo.jpg
YEEEEEeeeeesss…. apparently it all got blocked up when I tried to flush an American flag down the hole… sorry about that…. naaaaht
Looks like an apartment I had to rehab when the artist/gamer couple hauled ass to portlandia. On the bright side, an exotic dancer moved in when I was done.
They might want my cell phone. But since I drove over it and cracked the screen and no menu is available, and since I never had a password, and since it’s 10 years old and the kind you flip open…well good luck to them with that.
Elizabeth Warren: ‘Your Muslim ban is now 0-2 vs the Constitution’
http://www.businessinsider.com/elizabeth-warren-your-muslim-ban-is-now-0-2-vs-the-constitution-2017-3
When Liz is finished bitching about the flea in her crotch …. maybe she could scream about this massive constitutional violation:
Federal judge says NSA program appears to violate Constitution. A federal judge ruled Monday that the National Security Agency’s gathering of data on all telephone calls made in the United States appears to violate the Constitution’s protection against unreasonable searches.Dec 16, 2013
Come on Righteous Lizzy — surely that’s got to make your blood boil????
https://s-media-cache-ak0.pinimg.com/236x/77/07/64/770764ed8cfed391ab7ad85ff8b8f2bb.jpg
America = Diseased Sewer. Avoid at all costs.
Fast Eddie, are you drunk???
Oh no, have you started the End Of The World Party without me?
That is just my life in a nutshell! It is the end of the world as we know it, and I miss it. Damn.
Not at all. I am in training for my MMA debut …. no booze
It’s usual to call that sort of thing ‘fascist’: in fact, the US may very well turn into a version of the old Soviet totalitarian state.
It is not what states choose to call themselves, but how they act which matters.
Consider:
Imprisonment without fair trial on trumped up charges.
Torture in distant locations.
No freedom of association or protest.
No privacy of communication.
Crappified goods, growing pollution, little real choice.
Privileged and untouchable officials.
Constant propaganda as to the perfection of ‘our’ system.
Exhortations to be on guard against an external enemy bent on ‘destroying our freedoms.’
News media which are almost solely a medium for lies.
And the upper class and upper middle class have no trouble with that if these measures keep them safe and secure.
Even during the Soviet rule, except in the height of Stalin’s purges, higher-ranking people had little to fear.
From the Moscow Times (English Edition), November 10, 2001, by Chris Floyd:
“Fascism in America won’t come with jackboots, book burnings, mass rallies, and fevered harangues; nor will it come with black helicopters or tanks on the street. It won’t come like a storm, but as a break in the weather, that sudden change of season you might feel when the wind shifts on an October evening: Everything is the same, but everything has changed. Something has gone, departed from the world, and a new reality will have taken its place. All the old forms will still be there: legislatures, elections, campaigns, plenty of bread and circuses. But “consent of the governed” will no longer apply; actual control of the state will have passed to a small and privileged group who rule for the benefit of their wealthy peers and corporate patrons.
To be sure, there will be factional conflicts among the elite, and a degree of debate will be permitted; but no one outside the privileged circle will be allowed to influence state policy. Dissidents will be marginalized: usually by “the people” themselves. Deprived of historical knowledge by a thoroughly impoverished educational system designed to produce complacent consumers, left ignorant of current events by a corporate media devoted solely to profit, many will internalize the force-fed values of the ruling elite, and act accordingly. There will be little need for overt methods of control.
The rulers will act in secret, for reasons of “national security,” and the people will not be permitted to know what goes on in their name. Actions once unthinkable will be accepted as routine: government by executive fiat, state murder of “enemies” selected by the leader, undeclared wars, torture, mass detentions without charge, the looting of the national treasury, the creation of huge new “security structures” targeted at the populace. In time, this will be seen as “normal,” as the chill of autumn feels normal when summer is gone. It will all seem normal. “
The Police State… hath arrived.
NSA! NSA! NSA!
Funny how the snowflakes are ready to protest for the rights of house flies — but they don’t mind that Big Brother is watching and recording their every move…
Nothing new really. Western societies have been brainwashed for quite some time. We’ve been taught to see ourselves as “consumers” among other things. We may have “Freedom of speech”, but say something controversial publicly and you get the boot. Power and control never went away with democracy, it just went “underground”.
Those sound like good chapter names for a book.
Shall we call it 2017? 1984 has a nice ring … but it’s already taken
Waterfront homes are at premium in most area’s, location, location.
Your account of the officer’s behavior is indeed unfortunate, sounds like your in the right place to avoid them. The swat team behavior is also appalling as well…
FE, your furious diatribe deserves a (equally furious) musical accompaniment!
Le’t go with Vagner…
I find it odd that people do not know this my company gives us burner phones and forbids us to travel with personal phones or a pc…Not a big deal because they are paying but some people complain.