I am putting this post up to give commenters who would like to carry on conversations related to previous posts a place to comment, since comments on my last post have been cut off.
Also, my family and I recently returned from a two-week vacation to Japan. The combination of the time away and jet lag has given me less time to research and write a full article. Here are a few observations, based on my recent trip to Japan:
The scenery is beautiful, but it is clear that the Japanese people and agriculture are squeezed into the small amount of land that is not mountainous and forested.
The amount of land being used for agriculture has been steadily falling. Our tour guide remarked that if an older person wanted to leave agriculture, getting solar panels installed is an alternate way of obtaining income. We did see quite a few solar panels. But does this approach make sense, when the amount of land farmed is relatively small and falling year-by-year? The USDA says, “Based on total calories consumed, Japan imports about 60 percent of its food each year.”
Tokyo-Edo Museum Visit
When we first arrived in Tokyo, before our bus tour began, we visited the Tokyo-Edo museum. This is a photo of one of the exhibits from the museum.
In previous posts, I have talked about economies being dissipative structures–growing for a fairly long period, before collapsing or obtaining an infusion of cheap energy. I thought that it was interesting that the Edo Period lasted 265 years (1603 – 1868). This is about as long as a person might expect an economy to last in its role as a dissipative structure. In the latter part of the Edo Period, there seemed to be increasing wealth disparity and problems with the government collecting enough taxes. These are things that we would expect to happen, as resources per capita start to fall and complexity starts to increase.
Free English Language Guided Tour of Museum
The three of us (my husband, son, and I) received a free three-hour English language guided tour from a volunteer guide at the Tokyo-Edo Museum. The guide told us that he is a 75-year old retired business man. There was no charge for his services; we were also told not to tip people in Japan.
My impression is that the no-tipping policy is a holdover from the gift economy approach that much of the world used before our current capitalist approach took over. Under the gift economy approach, people are expected to offer their services for nothing, with the expectation that others will reciprocate. This system has pluses and minuses. If pensions of some elderly people are inadequate, it makes it harder for them to provide personal services for wages, since others (with more adequate pensions) will do the same thing for free, as unpaid volunteers.
Traveling School Children
Everywhere we traveled, we encountered a large number of school children traveling on school trips. They often stayed at the same hotels as we did and visited the same sites as we did. In fact, in several places they seemed to be the majority of hotel guests.
The group of children shown above had prepared some type of recitation and response to be offered in the Hiroshima Peace Park. The group is lined up for their presentation, even though there was no real audience for their performance, other than a few of us from our tour bus who happened to be walking by. I can’t imagine US children doing this.
Our tour leader told us that only children whose parents can afford to pay for these class trips are allowed to go. As a result, there is a great deal of pressure on parents to save up money for these trips.
Roads in Japan
The roads in Japan impressed me as being incredibly expensive to build and maintain. Everywhere, we saw walls built along the side of the road, presumably to prevent falling rock. In the US, we just put up signs, “Beware of Falling [really fallen] Rock.” Of course, we have more space, so we don’t build our roads quite so close to the road cuts.
The white line near the side of the road is to mark off what I would call a “sidewalk substitute.” It is a low-cost way of giving pedestrians a little space to walk.
We saw other features that make roads expensive. Our tour bus drove through countless tunnels. We also drove on many sections where the road was elevated, so that more roads could be squeezed into less area.
Nearly everywhere, soundproofing panels have been added because roads are so close to buildings. Roads are being made in an earthquake-proof manner, which also adds to costs.
Our bus frequently drove through toll stations. Wikipedia indicates that most expressways were originally financed by debt, and the tolls are being collected to pay off this debt. The Japan Guide indicates to drive the length of Japan, toll payments of 39,000 yen ($349) are required for a private passenger automobile. This is expensive compared to tolls elsewhere.
Man Made Rocks
Something else I noticed in Japan that I hadn’t seen elsewhere was the use of man-made rocks. Here, they are being used to keep the sea from causing erosion under a major road that is very close to the edge of the sea. We saw other shapes of rocks being used for other purposes elsewhere.
Government Pensions in Japan
The National Pension program in Japan (somewhat equivalent to our Social Security) is based on the assumption that all participants in the program will make equal contributions to the program, regardless of income. In 2017, these contributions amount to 16,490 yen (or $147) per month. To get the maximum pension amount, a person has to contribute at the full level (whatever it is declared to be, each year) for 40 years.
Our bus tour guide told us that because of changing employers and resulting low income, he has been unable to make contributions in recent years. When he retires, he expects that his pension payments will be very low because of this. He seemed to be well educated and hardworking. If he is having pension problems, I expect that many others are also having pension problems. In fact, some may be having pension problems today. We saw quite a few older people working.
Bullet Trains in Japan
One thing we discovered is that Japan’s bullet trains are for people, not luggage. The racks over people’s heads hold a backpack or brief case, but not much more. If people have luggage, they generally send it a day or two ahead of time via a luggage transfer service. There is also no internet service available on these bullet trains.
We chose to take an airplane from Osaka to Tokyo. Airplanes will transfer both people and luggage.
Photo in Kotohira, Japan
This is a photo of my husband, son, and me, after we had climbed 865 steps to a shrine in Kotohira, Japan. We had a good but tiring trip.
At the end of February we first highlighted something extremely troubling for the global “recovery” narrative: according to UBS the global credit impulse – the second derivative of credit growth and arguably the biggest driver behind economic growth and world GDP – had abruptly stalled, as a result of a sudden and unexpected collapse in said impulse.
As UBS’ analyst Arend Kapteyn wrote then, the “global credit impulse (covering 77% of global GDP) has suddenly collapsed” and added that “as the chart below shows the ‘global’ credit impulse over the last 18 months is essentially mainly China (the green shaded bit), which even now is still creating new credit at an annualized rate of around 30pp of (Chinese) GDP.
But the credit impulse is the ‘change in the change’ in credit and even the Chinese banks could not sustain the recent extraordinary pace of credit acceleration. As a result: whereas back in Jan ’16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP (China’s contribution is -0.3% of global GDP).”
As we concluded then, “absent a new, and even more gargantuan credit expansion by Beijing – which is not likely to happen at a time when every single day China warns about cutting back on shadow banking and loan growth – the so-called recovery is now assured of fading. It is just a matter of time.”
Four months later, the so-called “global coordinated recovery” is on its last, shaky legs, because not only has soft data in the form of PMIs, ISMs and various other sentiment surveys peaked and is now declining, as has consumer confidence, but those all important CPI readings from around the world have posted several consecutive months of disappointing prints, and according to some are jeopardizing the Fed’s rate hike intentions (especially if Wednesday’s inflation print is a big dud). US GDP is likewise in “stall” territory.
In short, February’s collapse in the credit impulse, duly noted here, top-ticked the recent peak of the world economy.
So, fast forwarding just over three months later, where are we now? To answer that question, overnight UBS released its much anticipated update on the current state of the global credit impulse, and it’s nothing short of a disaster.
As Kapteyn writes in what may have been the most eagerly awaited report in recent UBS history, “we have been inundated with questions about the chart below, first published in March. Yes, the global credit impulse is still falling. And yes, it matters because the correlation of this global credit impulse with global domestic demand is 0.61.”
But it’s what follows next that should send shivers down the spine of anyone still clutching to the failed “recovery” narrative:
From peak to trough the deceleration in global credit growth is now approaching that during the global financial crisis (-6% of global GDP), even if the dispersion of the decline is much narrower.
Currently 55% of the countries in our sample have experienced a -0.3 standard deviation deterioration in their credit impulse (median over 12 months) compared to 77% of countries in Dec ’09 when the median decline was -1.4 stdev.”
Here is what the stunning collapse in the credit impulse looks like as of today:
As such, what “kickstarts” the next spike in the credit impulse is unclear. What is clear is that if the traditional 3-6 month lag between credit inflection points, i.e. impulse, and economic growth is maintained, the global economy is set for a dramatic collapse some time in the second half.
Ben… Ben…. BEN!!!
Whew! We still have a few days left until the second half starts.
In Jan 2015 Gail Tverberg anticipated: “Disruptions in oil exporting countries, such as Venezuela, Russia, and Nigeria,” and “continued low oil prices.”
Here we are 2.5 years later:
“In any discussion of the oil market it is all too easy to ignore the real world consequences of the price fall that has occurred over the last three years… That is short-sighted because the structural shift that has taken place is profoundly destabilising and potentially very dangerous.
“A new note from the Energy Information Administration in the US published last month sets out the impact of the fall in prices in recent years. It is worth summarising the data, which are expressed in real 2016 dollars.
“These are big numbers for all the countries involved. Very few have diverse economies that can adjust quickly to the fall in the price of a crucial export commodity. Most have large dependent populations, especially of children and young people. Nigeria, for instance, has some 115m people, amounting to 61 per cent of its population, under the age of 25; Angola 13m — 63 per cent of its population…
The price fall has reduced the revenue of the Opec states by some $750m from the 2012 level — a fall of over 60 per cent. None have fully adapted to that loss of income. Most have assumed that the price change would be temporary and some have even borrowed to cover the shortfall of revenue against current spending — thereby storing up even more problems for the future.
The real pain of enforced austerity is only just beginning and will deepen as governments realise that the price fall is more structural than cyclical. The latest attempt to manage the market by extending the production quota for another nine months has had no positive effect. Prices for Brent crude on Friday were down to about $48 per barrel.
The pain will be profoundly destabilising. At least five Opec states are at risk of very serious political and economic destabilisation, including major economies such as Venezuela and Nigeria. Civil unrest is already evident in Libya and latent in Algeria. Across the whole of the cartel there is a substantial and growing group of restless, unemployed youths aged between 15 and 30. Many of Opec states, again including Nigeria and Venezuela, already have their own political or tribal conflicts. To all that can be added the simmering disputes between the strands of the Islamic religion, and most of the Opec member states are Islamic.
…the structural fall in the oil price is the most destabilising economic event to have hit the world since the financial crash of 2008. In this case, the impact is being felt in slow motion but it is building and feeding on existing conflicts and tensions. And just as the collapse of the subprime housing market in the US shook the global economic system, so the problems of the cartel cannot be contained within the countries themselves. When problems are rapidly globalised through migration, terrorism and even health risks if key public services collapse, the deteriorating situation within Opec is all too likely to become our problem too.
As has been demonstrated it takes time to work through the problem. The first reaction on the price drop is for everyone to increase production if possible. Buy some time and wait. None of the producers can believe that the price hasn’t started rising. It simply can’t everything is contracting. The shale drillers are a good example of the overall problem. They can’t stop because when they do they bring the whole industry down. And Wall Street with it.
Oil is a bubble, stocks are a bubble, housing is a bubble, auto manufacturing is a bubble, shipping is a bubble, what could possibly go wrong?
Humanity is a bubble…
Dummies are in a bubble
You’re right humanity is a bubble and 99.999% are in a bubble…well said DDC
Does the borrowing race between the countries affect the prices, so that they are higher and the deflation is hidden even more?
Well, yes, as borrowing usually mean that the implosion is imminent.
The deflation due to the rising price of the energy has started many years ago, but the borrowing race (i.e. who borrows more, gets the larger share of the output of the system) hides its progress…
Well then go quickly and get the bucket list sorted. I get my yacht this weekend and work will wait for a while as I catch up on some recreation time!
This from The Anarchists Library, Thirty Theses. Probably not new to many here..
Thus, civilizations must always grow. Failure to grow makes them vulnerable to other civilizations, and all are compelled to continue the self-reinforcing, positive feedback loop of continual growth, or die trying. Civilizations which fail to grow mark themselves for extinction. Constant growth is the only condition under which civilization can persist. It cannot continue in decline; it cannot continue standing still. In Collapse, Jared Diamond notes that a civilization’s collapse very often swiftly follows its peak. In an article for The New York Times (1 January 2005), titled “The Ends of the World as We Know Them,” he remarks:
History warns us that when once-powerful societies collapse, they tend to do so quickly and unexpectedly. That shouldn’t come as much of a surprise: peak power usually means peak population, peak needs, and hence peak vulnerability.
known as the seneca cliff
yes they would be unable to spew out all that garbage they believe in
im just hoping bau will hold together for a few more years so i can go on more vacations to exotic places next trip is a cruise to the south pacific
i dont understand what all those exclamation marks stand for
It = I agree and feel excited to read that comment
If I only agree I would use ++++++
that definitely simplifies messages i will use that from now on
Would be good if FW had a like or not like option for comments….
I can imagine the DelusisTANIS would oppose that though….
In a sign of the times, the Guardian is to go full tabloid as it abandons Berliner presses.
Have they really thought this thing through? They might do better with a comic book format.
The contract will also allow the newspaper to scrap or sell its three Berliner presses, which cost £50m in 2005. It spent a further £30m on printworks in London and Manchester.
The Guardian was the first and only major UK title to adopt the Berliner format, which is taller than tabloid and narrower than a broadsheet.
At the time The Guardian said the investment would give readers “the best of both worlds”, offering “broadsheet values” and the convenience of a smaller newspaper. It said it had decided to “avoid the ‘easy’ short-term tabloid route”.
The presses have spent an increasing proportion of time idle as readers have migrated online, however. The Guardian’s average circulation in April was 154,000, compared with 341,000 in the same month in 2005.A source at the newspaper said: “Despite declining circulations, there is still lots of demand for quality news in print. The current format, however, is only ever going to become more expensive to produce.”
Shutting down the Berliner presses should save millions of pounds per year but could trigger a hefty one-off charge. According to the newspaper’s annual report last year, it still owed Lloyds Bank £33.7m on hire-purchase agreements for the presses.
The Guardian aims to break even within two years, after operating losses of £37.8m for the year to April 2017.
And then they have that teaser at the bottom of all articles asking people to donate… because the Guardian is saving the world with its Greenie articles…
It makes me want to vomit
I used to work in the Guardian advertising department, it was a great money-spinner, the real foundation of the newspaper, and above all the revenue from public bodies and charities, who got a ‘cheap’ rate which was in fact extortionate.
I wish I could see their advertising revenue figures today!
I suspect regular Guardian readers would not be impressed by the fact that when I was there the works party was held at one of the very best hotels in Rome: I particularly enjoyed painting the view of St. Peter’s from my balcony. Thank you, advertisers, for funding that.
So much money sloshing around the Guardian in those days……and now they beg for reader subscriptions.
The oh-so radical journalists, however, did not like sharing the lifts with the commercial staff, above all Polly Toynbee – the elite, even of the Left, never like to know where their pay-cheque comes from! Money, so dirty.
Now that newspapers belonging to the MSM are struggling, I feel it is time for them to be subsidized by governments so that they no longer have to pretend to be independent.
Rule of Thumb:
If anyone you knows subscribes to an MSM publication … or watches the ‘news’ … treat them as you would any MOREon… humour them… speak to them when necessary … be polite…. but recognize that you are dealing with a MOREon…. and act accordingly.
Ignorance is BLISS! At work a young co-worker became a parent to a beautiful baby girl.
Nice Guy, over weight but isn’t just about most now a days. Said he wished to have two more additions to his family…bite my lip and just complemented the baby’s picture.
Later, the topic of oil came up, I suggested that hopefully fracking would continue for the foreseeable future., without it we would be eating grass.
The young new parent got very irate, claiming we did not need fracking. My response, “Just like we don’t need Alberta Tar Sands”. His response, very serious, “Tar Sands is fracking”.
My point, the “Average Joe” is clueless to our plight! Even the folks I have a serious meeting of the minds, just shrug and claim. “They will come up with something, they HAVE TO!”
The final act will be the such a STUNNER…a major paradigm shift of consciousness… Something to behold.
Sorry, I just had to post it! So funny
Humans are very stupid, useless animals.
They are so pathetic that if you left one of them in the forest — it would die very quickly.
Reading about the new housing bubble in China….
Here’s the thing…
There are a lot of people who can see how this all ends — in terms of the gargantuan financial bubble… many are aware that this is 2008 on steroids — as we have seen many of these people are planning for the worst buying bolt holes in New Zealand…
I know a few people who resemble this — they continue to dance while the music plays piling on millions on top of their millions — continuing to fight like rabid dogs….
Knowing that it’s all going to blow up in their faces….
When I ask them why they bother knowing they are going to take massive losses (I don’t tell them they are going to be eating rat…) …. what is the point of going through all the hassles and headaches … and wasting time on making more money — acquiring more assets — when it will all vapourize….
Why not just come off the gas — take cash off the table — dump some into gold because that will be the last man standing … take some massive trips … spend more time with their families… whatever…
I may as well as suggest they join the communist party and donate their cash to fund the next Michael Moore movie….
Absolutely epic stupidity.
Fools – who will soon be eating rat.
Most people don’t understand the seriousness of what occurred in 2008, it was dealt with too swiftly – if you didn’t lose your job, it was nothing, just a blip.
Similarly, our civilisation functions too well, and delivers the goods, literally, every hour of the day. It has done for so as long as living memory now.
The possibility that it might cease to do so is beyond grasping, unless one has studied the matter with care and a lot of time.
My closest friends are in new baby mode at the moment, and I keep my mouth firmly shut on this topic of finite resources, why spoil their party? It wouldn’t be accepted anyway.
Imagine what they would say if you suggested their child was likely to end up on a bbq in the near future…. or that it was going to starve an die…
They’d think there was something wrong with you.
Unfortunately those are some of the consequences of ignorance…. and ignorance is not going to be bliss after all…. rather it is going to deliver horrific suffering … that did not have to be
FE people likely think that statement is extreme. But they fail to realize it has happened in the past. The thought is that society is “more sophisticated” now.
When stressed by starvation there is nothing sophisticated. The ancient civilizations were educated and organized and they ate their own children.
As they were warned they would.
Even the most delicate and sensitive man among you will have no pity on his brother or his cherished wife or his sons who remain, 55 and he will not share with them any of the flesh of his sons that he will eat, because he has nothing else on account of the severity of the siege and the distress your enemy inflicts on your cities. 56 And the delicate and sensitive woman among you who would not even think of putting the sole of her foot on the ground because she is so delicate will show no pity to her cherished husband or her son or her daughter
I have come to feel that the Old Testament is, in fact, an early example of Black Humour.
Sex and violence on endless loop. Oh, and deranged prophets screaming about whatever.
Such a pity that they didn’t have an advanced civilisation.
Even if it is all true, I shall be having a quiet word with my Maker when I get to the other side, about this monumental screw up we are stuck in. 🙂
Think of the Old Testament as documentation of how a self-organizing system actually operated in an earlier period, when it was optimizing for a different set of conditions (current population and growth level, energy levels, etc.). There was a need for rules and order, and a way of passing on what populations had learned to their children. This worked through a combination of culture, political history, and religion. Very often, what is documented is oral history of what people told their children. Thus, to make matters more confusing, stories can be exaggerated to make them of greater interest to those expected to pass the oral history on. If you think of the Old Testament as a direct guidebook for today’s life, you have hopelessly missed the point. We can compare the writings to archeological evidence and to stories other cultures were passing on. We can find a few overarching truths (some of which JT Roberts has quoted), but there is no reason to believe that teachings on any particular subject (such as not combining two different fibers when creating cloth, or on homosexuality) have any applicability to today’s life.
Our DNA is a history of where we have been as humans. In a similar manner, writings of the various religions of the world are documentation of where we have been. Our DNA may tell use that we are in fact, part Neanderthal. This in no manner means that should today act like Neanderthals. The way a self-organizing system works is by constantly adding new, and deleting old, to keep the system up to date. There are admittedly religions that have come to the conclusion that the Bible is “literally true.” But this is certainly not true of all religions. Your objection should be to particular religions, and how they operate. The idea that what was optimal thousands of years ago is also optimal today makes no sense.
I visited a friend today an expat New Zealander who works in the autobody business and he showed me around the shop at the numerous vehicles undergoing extensive work. There was one 50’s pickup truck almost completely through a full restoration and was told it cost the owner 100,000 dollars. Wow, I thought too myself and Rob knows my thoughts about oil and our lack of it and we have often talked about this website so he understands and when I mentioned to him wow 100,000 dollars for what is probably going to become either a boat anchor or a very expensive livingroom decoration we both just glanced at each other with the look of disbelief. I said to Rob can you imagine this man learning that he may never get to drive this beautiful truck?
This however, brings up an interesting issue though because boys and their toys love, truly love, their classic cars. It is a huge business and when I hear people discuss how hard it is to teach people the truths of this website just imagine if you will Gail having a booth at lets say the SEMA show in Las Vegas https://www.semashow.com/ with a big banner that reads DO WE HAVE AN OIL PROBELM OR SOMETHING TO THAT EFFECT. What a shock that would be. The very audacity of anyone doing that at a car show? Can you imagine just the mere mention of the threat to that car culture of ours would set people on fire. They would go insane, most wouldn’t couldn’t even process the thought that their beloved machines would be nothing more than art to a bygone era.. Of course it would all begin with ah bull^%$ but none of them would ever be able to get behind the wheel of their classics without Gail’s words ringing through their ears. They I’m sure would have ears to hear whenever a news article came up discussing oil and would want to know more.
According to an article in Seeking Alpha, the Tesla is the most energy inefficient and most carbon-producing mass produced car in the USA.
Based on the estimated 577g of CO2 emitted for every delivered kWh of electricity, when we total the power consumed by a Tesla Model S while driving, as well as charging losses and idle losses, we calculate that an average Model S sedan effectively emits 394g of CO2 per mile driven (.684 X 577). This is more than a BMW 535 (374g per mile) or a Porsche 911 Carrera (384g of CO2 per mile drive).
Adding in our estimated charging and idle losses, the 85 kWh Model S sedan consumes .684 kWh of electricity per mile driven, effectively generating 956mg of sulfur per mile driven (.684 X 1,397) – 688X the effective EPA Tier 2 sulfur content limit. The size of these emissions are staggering: If 20,000 Model S sedans are sold each year, they will effectively release as much SO2 as 13.76 mln new gasoline-powered vehicles – nearly every automobile sold in the United States each year.
When the CO2 emitted during the production of the battery pack are incorporated, we believe the total effective CO2 emissions of an 85 kWh Model S sedan are 547g per mile – considerably more than a large SUV, such as a Jeep Grand Cherokee, which emits 443g per mile!
According to the latest data from the European Automobile Manufacturers Association (ACEA), sales of Electrically Chargeable Vehicles (which include plug-in hybrids) in Q1 of 2017 were brisk across much of Europe: they rose by 80% Y/Y in eco-friendly Sweden, 78% in Germany, just over 40% in Belgium and grew by roughly 30% across the European Union…
But not in Denmark: here sales cratered by over 60% for one simple reason: the government phased out taxpayer subsidies.
As has been pointed out many times in the past on FW….
If it were not for subsidies… the only electric vehicles that would exist … would be golf buggies.
Hell, if not for government subsidies the US and the rest of the world would currently be in the mother of all Depressions.
Not just golf buggies. In the old country, this little EV was pulling its weight in 1954.
I was betting that FE will post this Tesla thing.. haha… guess this is an easy bet… 😉 He did post almost immediately
I am forever having to bite my tongue when people bring up Tesla and the whole EV thing…. people resent any negative comments….
As you can imagine — I will explode with delight when Tesla collapses.
I want to beat you to post it here but then I decided to let you take the honour….
The next one is yours CTG…. you shouldn’t have to wait long….
Well, sane person would “welcome” just a few more yrs of TSLA mass production, at least there will be more scrap parts available laying around, especially batt packs..
whats going on with the qatar alledged bank runs any news ?
Check the original link