Falling interest rates have huge power. My background is as an actuary, so I am very much aware of the great power of interest rates. But a lot of people are not aware of this power, including, I suspect, some of the people making today’s decisions to raise interest rates. Similar people want to sell securities now being held by the Federal Reserve and by other central banks. This would further ramp up interest rates. With high interest rates, practically nothing that is bought using credit is affordable. This is frightening.
Another group of people who don’t understand the power of interest rates is the group of people who put together the Peak Oil story. In my opinion, the story of finite resources, including oil, is true. But the way the problem manifests itself is quite different from what Peak Oilers have imagined because the economy is far more complex than the Hubbert Model assumes. One big piece that has been left out of the Hubbert Model is the impact of changing interest rates. When interest rates fall, this tends to allow oil prices to rise, and thus allows increased production. This postpones the Peak Oil crisis, but makes the ultimate crisis worse.
The new crisis can be expected to be “Peak Economy” instead of Peak Oil. Peak Economy is likely to have a far different shape than Peak Oil–a much sharper downturn. It is likely to affect many aspects of the economy at once. The financial system will be especially affected. We will have gluts of all energy products, because no energy product will be affordable to consumers at a price that is profitable to producers. Grid electricity is likely to fail at essentially the same time as other parts of the system.
Interest rates are very important in determining when we hit “Peak Economy.” As I will explain in this article, falling interest rates between 1981 and 2014 are one of the things that allowed Peak Oil to be postponed for many years.
Figure 1. 10-year Treasury Interest Rates. Chart prepared by St. Louis Fed.
These falling interest rates allowed oil prices to be much higher than they otherwise would have been, and thus allowed far more oil to be extracted than would otherwise have been the case.
Since mid 2014, the big change that has taken place was the elimination of Quantitative Easing (QE) by the US. This change had the effect of disrupting the “carry trade” in US dollars (borrowing in US dollars and purchasing investments, often debt with a slightly higher yield, in another currency).
Figure 2. At this point, oil prices are both too high for many would-be consumers and too low for producers.
As a result, the US dollar rose, relative to other currencies. This tended to send oil prices to a level that is too low for oil producers to make an adequate profit (Figure 2). In addition, governments of oil exporting countries (such as Venezuela, Nigeria, and Saudi Arabia) cannot collect adequate taxes. This kind of problem does not lead to immediate collapse. Instead, it “sets the wheels in motion,” leading to collapse. This is a major reason why “Peak Economy” seems to be ahead, even if no one attempts to raise interest rates.
The problem is not yet very visible, because oil prices that are too low for producers are favorable for importers of oil, such as the US and Europe. Our economy actually functions better with these low oil prices. Unfortunately, this situation is not sustainable. In fact, rising interest rates are likely to make the situation much worse, quickly.
In this post, I will explain more details relating to these problems.
Low interest rates are extremely beneficial to the economy; high interest rates are a huge problem.
Low interest rates allow consumers to purchase high-priced goods with affordable monthly payments. With low interest rates, consumers can afford to buy more consumer goods (such as homes and cars) than they could otherwise. Thus, low interest rates tend to lead to high demand for commodities of all kinds, thus raising the price of commodities, such as oil.
Low interest rates are also good for businesses and governments. Their borrowing costs are favorable. Because consumers are doing well, business revenues and tax revenues tend to grow at a brisk pace. It becomes easier to afford new factories, roads, and schools.
While low interest rates are good, a reduction in interest rates is even better.
A reduction in interest rates tends to make asset prices rise. The reason this happens is because if someone already owns an asset (examples: a home, factory, a business, shares of stock) and interest rates fall, that asset suddenly becomes more affordable to other people, so the price of that asset rises because of increased demand. For example, if the monthly mortgage payment for a house suddenly drops from $600 per month to $500 per month because of a reduction in interest rates, many more potential homeowners can afford to buy the house. The price of the house may be bid up to a new higher level–perhaps to a price level where the monthly payment is $550 per month–higher than previously, but still below the old payment amount.
Furthermore, if interest rates fall, owners of homes that have risen in value can refinance their mortgages and obtain the new lower interest rate. Often, they can withdraw the “excess equity” and spend it on something else, such as a new car or home improvements. This extra spending tends to stimulate the economy, and thus tends to raise commodity prices. Suddenly, investments in oil fields that previously looked too expensive to extract, and mines with ores of very low grade, start looking profitable. Businesses hire workers to staff the investments that are now profitable, stimulating the economy.
Businesses receive other benefits, as well, when interest rates fall. Their borrowing cost on new loans falls, making new investment more affordable. Demand for their products tends to rise. The additional demand that results from lower interest rates allows economies of scale to work their magic, and thus allows profits to rise.
Companies that have large portfolios of investments, such as insurance companies and pension funds, find that the values of their assets (stocks, bonds, and other investments) rise when interest rates fall. Thus, their balance sheets look better. (Of course, the low interest payments when interest rates are low provide a different problem for these companies. Here, we are talking about the impact of falling interest rates.)
Of course, the reverse of all of these things is also true. It is truly bad news when interest rates rise!
Wages Depend on Interest Rates and Debt Growth
When interest rates fall, debt levels tend to rise. This happens because expensive goods such as homes, cars, and factories become more affordable, so customers can buy more of them. Thus, falling interest rates are very closely associated with rising debt levels.
We find that when we look at debt levels, rising debt levels seem to be highly correlated with rising US per capita wages, (especially up until China joined the World Trade Organization in 2001, and globalization took off). “Per capita wages” are calculated by dividing total wages and salaries by total population. Per capita wages thus reflect the impact of both (a) changes in the wages of individual workers and (b) changes in workforce participation. Using this measure “makes sense,” if we think of the total population as being supported by the wages of the working population, either directly or indirectly (such as through taxes).
Figure 3. Growth in US Wages vs. Growth in Non-Financial Debt. Wages from US Bureau of Economics “Wages and Salaries.” Non-Financial Debt is discontinued series from St. Louis Federal Reserve. (Note chart does not show a value for 2016.) Both sets of numbers have been adjusted for growth in US population and for growth in CPI Urban.
What does oil price depend upon?
Oil price depends upon the amount customers can afford to pay for oil and the finished products it produces. The amount customers can afford, in turn, depends very much on interest rates, since these influence both wages and monthly payments on loans. If the price that a significant share of consumers can afford is below the selling price of oil, we get an oil glut, as we have today.
It is important to note that oil and other energy products are important in determining the cost of finished products, such as cars, homes, and factories. Thus, high prices on energy products tend to ripple through the economy in many different ways. Many people consider only the change in the cost of filling a car’s gasoline tank; this approach gives a misleading impression of the impact of oil prices.
Affordability is also affected by growing wage disparity. Growing wage disparity tends to occur because of growing complexity and specialization. Globalization also contributes to wage disparity. These are other problems we encounter as we approach energy limits. Demand for commodities is to a significant extent determined by the wages of non-elite workers because there are so many of them. High wage workers tend to influence commodity prices less because their purchases are skewed toward a greater share of services, and toward the purchase of financial assets.
Because interest rates, debt, wages, and oil prices (and, in fact, commodity prices of all kinds) are linked, the system is much more complex than what most early modelers assumed was the case.
Hubbert’s Theory Underlies Many Mainstream Energy Beliefs
Today’s mainstream beliefs about our energy problems seem to be strongly influenced by Peak Oil theory. Peak Oil theory, in turn, is based on an analysis by geophysicist M. King Hubbert. This view does not consider interest rates, debt, or prices.
Figure 4. M. King Hubbert’s symmetric curve explaining the way he saw resources depleting from Nuclear Energy and the Fossil Fuels, published in 1956.
In this view, the amount of any exhaustible resource that we can extract depends on the resources in the ground, plus the technology we have to extract these resources. In general, Hubbert expected an approximately symmetric curve of extraction, as illustrated in Figure 4. The peak is expected when about 50% of the resource is extracted. Hubbert believed that improved technology might allow more exhaustible resources to be extracted after peak, making the actual extraction pattern somewhat asymmetric, with a larger share of a resource, such as oil, being extracted after peak.
With this theory, we can expect to extract a considerable amount of resources in the future, even if the energy supply of a particular type starts to fall, because it is “past peak.” With the relatively slow decline rate shown in Figure 4, it should be possible to “stretch” supplies for some years, especially if technology continues to improve.
At some point, the standard view is that we will “run out” of energy supplies if we don’t make substitutions or conserve the use of these nonrenewable resources. Thus, an increase in efficiency is viewed as one part of the solution. Another part of the solution is viewed as substitution, such as with wind and solar energy.
In the mainstream view, the major influence on commodity prices is scarcity, not affordability. The expectation is that scarcity will cause oil prices will rise; as a result, expensive substitutes will become cost competitive. The higher prices will also encourage more conservation and more high-cost technologies. In theory, these can keep the economy operating for a very long time. The very inadequate models that economists have developed have encouraged these views.
The Usual Energy Model Is Overly Simple
Hubbert assumed that the amount of oil extracted would depend only upon the amount of resources available and available technologies. In fact, the amount of oil extracted depends on price, in part because price determines which technologies can be used. It also governs whether oil can be extracted in areas that are inherently expensive–for example, deep under the sea, or heavily polluted with some other material that must be removed at significant cost. Because of this, if oil prices are high, new technologies can be brought into play, and resources that are expensive to reach can be pursued.
If oil prices are lower than really needed, for example in the $40 to $80 per barrel range, the situation is more complex. The problem is that taxes on oil are important, especially for oil exporters. In this range, many producers can continue to produce, but their governments collect inadequate taxes. Their governments find it necessary to borrow money to maintain programs upon which the populations of the countries depend. Governments with inadequate tax revenue tend to get into more conflicts with other countries, such as is happening today with other Middle Eastern countries fighting with Qatar.
The situation of inadequate tax revenue is inherently unstable. It can eventually be expected to lead to the collapse of oil exporting countries.
Factors Underlying the Rise and Fall of Historical Oil Prices
The fundamental problem regarding the cost of resource extraction is that we tend to extract the cheapest-to-extract resources first. Thus, the cost of extracting many types of resources, including oil, tends to rise over time. Wages grow much more slowly.
Figure 5. Average per capita wages computed by dividing total “Wages and Salaries” as reported by US BEA by total US population, and adjusting to 2016 price level using CPI-Urban. Average inflation adjusted oil price is based primarily on Brent oil historical oil price as reported by BP, also adjusted by CPI-urban to 2016 price level.
This mismatch between wages and oil price tends to cause increasing affordability problems over time, even as we switch to cheaper fuels and increased efficiency. Part of the reason why affordability problems get worse has to do with our inability to keep reducing interest rates; at some point, they reach an irreducible minimum. Also, as I mentioned previously, there is a growing wage disparity problem caused by growing complexity and globalization. Those with low wages find themselves increasingly unable to afford goods such as homes and cars that require oil products in their construction and use.
Looking at Figure 5, we see two major price “humps.” The first of these is in the 1970-1998 period, and the second is in the 1999 to present period. In the first of these two periods, we often hear that the run up in oil prices was the result of an oil supply problem. This occurred because the US oil supply peaked in 1970, and the Arabs made the situation worse with an oil embargo.
In fact, I think that at least half of the problem in the 1970-1981 period may have been that wages were growing rapidly during this period. The rapid run up in wages allowed oil prices to increase in response to a fairly small oil shortage. Thus, the run up in prices was caused to a significant extent by greater demand, made possible by greater affordability. Note that timing of wage increases is slightly ahead of the timing of increases in CPI Urban. This suggests that wage growth tends to cause price inflation. It seems likely that globalization reduces the influence of US wages on oil prices, and thus on price inflation, in recent years.
Figure 6. Growth in US wages versus increase in CPI Urban. Wages are total “Wages and Salaries” from US Bureau of Economic Analysis. CPI-Urban is from US Bureau of Labor Statistics.
The large increases in wage payments shown in Figure 6 were made possible by growing total population, by rapidly growing productivity, and by an increasing share of women being added to the workforce. Figure 6 shows that the big increases in wages stopped after interest rates were raised to a very high level in 1981.
Economists hope that rising oil prices will bring about new supply, substitution, and greater efficiency. In the 1970s and 1980s, oil prices did seem to come back down for precisely these reasons. I explain the situation in more detail in the Appendix. Rising inflation rates and interest rates were a problem during this period for insurance companies. One insurance company I worked for went bankrupt; another almost did.
We have not been able to achieve the same new supply–substitution–efficiency result in the 1999 to 2016 period, partly because whatever easy efficiency and substitution changes could inexpensively be made were made earlier, and partly because we are reaching diminishing returns with respect to extracting energy products, especially oil. Also, the wage disparity of workers is growing. Growing wage disparity makes debt growth increasingly ineffective in raising wages. Instead of debt growth funding more wages and more affordable goods for the working poor, the additional debt seems to go to the already rich.
The decreases in interest rates since 1981 have given the economy an almost continuous upward lift. This long-term decrease tends to get overlooked because it has gone on for such a long time. The major exception to the long-term decrease in interest rates since 1981 was the big increase by the Federal Reserve in target interest rates in the 2004-2006 period (shown indirectly in Figure 7).
Figure 7. Three-month treasury rates. Graph prepared by the St. Louis Fed.
The problem started when Alan Greenspan dropped target interest rates very low in the 2001-2004 period to stimulate the economy, and then raised them in the 2004-2006 period to cut back growth (Figure 7). This seems to have been one of the major causes of the Great Recession. The other major cause of the Great Recession was fact that oil prices rose far more rapidly than wages during the 2003-2008 period. More information is provided in the Appendix.
Where We Are Now
We have many leaders who do not seem to understand what our real problems are, and how successful programs have been to date in keeping the system from crashing. Way too much of their understanding has come from traditional models regarding “land, labor and capital,” “supply and demand,” and “higher prices bring substitution.” These models are not suitable for understanding how the economy, as a self-organized networked system, really works.
These leaders seem to believe that QE worldwide is no longer working well enough, so it should be removed. In addition, securities currently held by central banks should be sold. Also, the growth in debt should be slowed, because it is getting too high. Whether or not debt is too high, this strategy will lead to “Peak Economy.” As I explained in an earlier post, debt is what pulls an economy forward. It is the promise (which may or may not actually be kept) of future goods and services. These goods will be made with energy resources and other resources that we may or may not actually have in the future. Once we pare back our expectations, the system is likely to spiral downward.
It is not entirely clear the extent to which interest rates have already started to influence the economy. Long term interest rates, such as 10 year Treasuries, have not yet changed in yield (Exhibit 1). But short-term interest rates clearly have increased (Figure 7). An increase from 0% to 1% is a huge increase, if someone is using very short-term interest rates to fund highly levered investments.
Worldwide, the International Institute of Finance reported an increase in debt of $70 trillion, to $215 trillion between 2006 and 2016. This sounds like a huge increase, but it only amounts to a 4.0% increase per year during that period. It is doubtful this is enough to support the GDP growth the world needs, plus the increase in commodity prices demanded by diminishing returns.
There is evidence the economy is already headed downward. A recent report indicates that in the US, the smallest increase in consumer credit in 6 years took place in April 2017.
Another worrying area is auto loans. This is an area where interest rates have already begun to increase a bit, making monthly payments on cars higher.
Figure 8. Finance rate on 48-month new car loans through February 2017. Chart by St. Louis Fed.
The average finance rate in February 2017 was 4.52%, compared to an average finance rate of 4.00% in November 2015 (the low point). We don’t yet have information on what the increase would be to May 2017. A person would expect that if finance rates are following the interest rates on short to medium term US government securities, the finance rate would continue to rise. This interest rate rise would be one of the things that discounts provided by auto dealers would act to offset.
Because of the higher cost to the buyer of rising auto financing rates, a person would expect such a rise to adversely affect new auto sales. Higher interest rates would also affect lease prices and auto resale prices. We don’t yet know the extent to which higher interest rates are currently affecting auto sales, but the kinds of changes we are seeing are precisely the kinds of changes we would expect to see from higher interest rates. We have had a long history of falling interest rates (plus longer maturities) helping to prop up auto sales. Simply getting to the end of this cycle could be part of the problem.
Peak Economy is likely not very far away. We do not need to encourage it, by raising interest rates and selling securities held by the Federal Reserve. We badly need more people to understand the connection between interest rates and oil prices, and how important it is that interest rates not rise–in fact, more QE would be better.
Appendix – More Detail on Changes Affecting Oil Prices
(a) Between 1973 and 1981. Our oil problems started when US oil production began to decline in 1970, and Arab countries took advantage of our problems with an oil embargo. We immediately started work on extracting oil from other locations that we knew had oil available (Alaska, North Sea, and Mexico). Also, Japan was already making smaller cars. We started building smaller, more fuel-efficient cars in the US, too. We also began to substitute other fuels for oil in home heating and in the making of electricity.
(b) Between 1981 and 1998. In 1981, Paul Volker decided to force oil prices down by raising target interest rates to a very high level. He knew that such a high interest rate would lead to recession, which would reduce demand and thus prices. Also, earlier efforts at new oil supply and demand reduction approaches began to be effective. The new oil supply was somewhat higher priced than the pre-1970 oil. Falling interest rates made it possible for consumers to tolerate the somewhat higher oil prices required by the new higher priced oil.
(c) Between 1999 and 2008. Oil prices rose rapidly during this period, in large part because of rising demand. Globalization added huge demand for oil. Also, Alan Greenspan reduced target interest rates at about the time of the 2001 recession. (Target interest rates affect 3-month interest rates, shown in Figure 7.) At the same time, banks were encouraged to be more lenient in lending standards, and to offer loans based on the very favorable short-term interest rates available at that time. This combination of factors led to rapidly rising housing debt and much refinancing activity. All of this activity also added to oil demand.
Fortunately, these demand increases coincided with an increase in the cost of oil extraction. The world’s supply of “conventional oil” was becoming limited in supply, and began to decline in 2005. The higher demand raised prices, thus encouraging producers to pursue more expensive unconventional oil production.
(d) The 2008 Crash occurred after the Federal Reserve raised target interest rates in the 2004-2006 period, in an attempt to damp down rising food and energy prices. This interest rate rise made home buying more expensive. Oil prices were also increasing in the 2002-2008 period. The combination of rising interest rates and rising oil prices reduced demand for new homes and cars. Home prices fell, debt levels fell, and oil prices fell. Many people blamed the problems on loose mortgage underwriting standards, but the basic issue was falling affordability of oil, as oil prices rose and as higher interest rates took away the huge boost the economy previously had received. See my article, Oil Supply Limits and the Continuing Financial Crisis.
(e) 2009-2011 ramp up in prices was enabled by QE. This QE brought a broad range of interest rates to very low levels.
(f) 2011-2014. Oil prices gradually slid downward, because there was no longer enough upward “push” created by QE, since interest rates were no longer falling very much.
(g) Mid to late 2014 to Present. The US removed its QE, leading to a sharp reduction in carry trade in US dollars. Many currencies fell relative to the US dollar, making oil products less affordable in these currencies. As a result, oil prices fell to a level far below that needed by oil producers, especially oil exporters.
In my neck of the woods, the most competent people for the early stages of the reset are the local pig hunting fraternity. Skilled outdoorsmen, plenty of dogs, fairly able to use a knife and gun, have a reasonable amount of ammo, and know the terrain! Not much into books and theory, but love the challenge of…? …whatever comes their way.
Of course once the reset evolves into no-set then all skills are moot!
This pig hunting crowd is usually very dependent upon gas for their trucks, four wheelers, etc. they are not really ready for a hard life without oil. I know a hunter who is obese. He will,have a tough time.
Hmmm a lot around here are very dependant on alcohol as well…but that we are all dependant on oil is why OFW has got the clientele it has. I think its not the continuation of pig hunting I am referring to but the ability (relative) to get by…many have small, almost fortified lifestyle blocks, and are often in contact with the law..
That would describe some of my neighbours…. fuel ponds aside… I don’t think any will last very long … food will quickly be the issue — many preserve food so have stocks — but most nearby do not… game will quickly be run off when the bullets fly… and the bullets will run out (I doubt any of them have large stocks of ammo on hand)…. I am not optimistic.
Gail, would you say what you think will happen when this ponzi scheme fails. Do your skills include any analysis of how the breakdown happens, step by step and what it looks like when you are in it – that would be interesting. Perhaps the headless chicken “world order” is what we are watching right now. In my experience of life bad things usually hit you sideways, where you don’t expect it.
From what I have observed Gail will never tell you what she thinks on this … nobody likes a Fast Eddy Ending.
Consider what would happen right this very moment … if the electricity went off… permanently.
That should give you a fairly good starting point
“Consider what would happen right this very moment … if the electricity went off… permanently.” – And that is not far fetched at all. The normalcy bias that people have is simply unreal. The grid is very very new technology built on many layers of dependencies. It is not robust. It is not natural. It decays constantly. If you consider the age of the electric grid on the scale of a human life span (80 years). then the grid is 9 days old. 9 days! So how reliable is a 9 day old infant? The infant is 9 days old and hasn’t had an infection or fever yet. As a parent of this 9 day old, would you expect this 9 day old to never have a fever or infection ever? Of course not because you know 9 days is too short of a time period. But we assume that the electric-grid is robust and will never get sick. It is ludicrous.
Just pay the workers and they will happily maintain the grid. Just as long as they can go home and watch the football game and eat potato chips.
Dolph —- you are an all-star DelusiSTANI… you are so completely out of touch I wonder if you are not trolling us… surely it is not possible to read the comments on FW and still exhibit such comprehensive ignorance and lack of logic
I second that motion
Greg I totally agree.
A huge problem is the grid is designed around the inertia of rotating turbines inverters can’t replace it.
I think the percentage of people who understand that are smaller than OFW.
We dump intermittent renewables on it, and assume that the grid will be there, handling increasing amounts of these intermittent renewables, for at least the next 30 years. How do we keep the grid repaired with intermittent renewables?
I think things do “hit us sideways.” I think the low wages and lack of good jobs that young people are experiencing today are already part of the ultimate downfall. So is the Brexit vote and the election of Trump.
All of the stories we have been reading about restaurant business being down, and major mall stores needed to close because of lack of business, are part of the story too. So are the low commodity prices we have been experiencing since about 2014. And the low interest rates as well.
How does this come unwound further?
1. Today’s interest rate rise, and the selling of previously bought securities is a very unwise move, IMO.
2. In Spain, there has already been one major bank collapse, followed by a bail-in. https://www.investing.com/analysis/the-next-financial-crisis-has-already-arrived-in-europe,-and-people-are-200194732 This is likely to be followed by more, including some in other countries.
3. With this kind of thing happening, Italy seems likely to be the next major country to vote to leave the EU. This ultimately could be the end of the EU.
4. With the higher interest rates, it will be even harder to balance the US government budget. I can imagine a situation where it becomes impossible to reach a budget agreement, and the US government shuts down, perhaps for months.
5. I would not be surprised if we run into problems with even more oil accumulating in storage, despite everything everyone is doing, and prices dropping further, eventually to the $20 per barrel range. Part of the problem is likely to be inadequate growth in consumption by China, as they are forced to cut back.
6. More problems in oil exporting countries, because of low prices.
I am not sure how all of these problems eventually converge into one big problem. It could be collapsing governments, because all elections seem to go the way the election in Britain just did, for Prime Minister Theresa May. It could be huge problems governments run into with collapsing banks and collapsing pension funds that just become unmanageable. It could be some sort of war-like action. It could be too little fuel to operate our cars and trucks, but this could be because too few people have jobs to earn money to buy it.
I expect that a big part of the problem will be lack of jobs. Banks not being open could be another part of the problem. With banks not open, it is hard for any business to operate.
I am in general disagreement …. we have seen that those in control will do whatever it takes … they have done the most ‘absurd’ things including propping up the stock market…
I cannot imagine that something like Brexit or an EU bust up will be the trigger…anything that can be controlled will be controlled. A rogue nation can very easily be controlled — you simply kill the leaders or you unleash the boys from ISIS…
Recall when this guy took over in Greece… he was gonna tell that nasty EU where to shove their austerity….
I guarantee – an Economic Hitman paid him a visit …. and explained to him how it would be not in his interests…. to follow through on those threats…
He got the message loud and clear….
https://upload.wikimedia.org/wikipedia/commons/4/46/Alexis_Tsipras_2015_%28cropped%29.jpg
https://upload.wikimedia.org/wikipedia/commons/4/46/Alexis_Tsipras_2015_%28cropped%29.jpg
I expect the trigger will come when either:
1. ‘whatever it takes’ pushes on a string… something they simply can no longer control with financial gimmicks e.g. collapse of the commercial real estate market
or
2. We hit a physical limit such as an absolute peak in oil — the KSA looks to be in trouble – shale players are desperately trying to increase production — that is ominous
Hard to say which – if I had to choose I’d go with door number 2.
In my opinion the trigger will be war in the Middle East, because of too low oil price. Below 40 usd/b, and they will start fighting each other.
A computer cannot think. It must be programmed. It cannot be programmed to deal with the unlimited number of obstacles that present themselves when driving a car.
Therefore inevitably there will be a circumstance that the computer will not be able to deal with — and you will die.
http://www.cnbc.com/2017/03/26/uber-self-driving-car-arizona-crash-suspended.html
I don’t know about you — but I have never had an accident in my life and I am not about to turn over the wheel to a computer.
You get a few of those incidents described above — and nobody will trust the computer.
And just imagine the insurance rates for one of these death machines!
Here is something a computer can’t deal with.
http://www.cnbc.com/2017/06/13/death-of-the-human-investor-just-10-percent-of-trading-is-regular-stock-picking-jpmorgan-estimates.html
Works well, until the Quants decide they want a different outcome. Or there are big bankruptcies that change things. Or derivative come unwound.
Long Term Capital was heavily reliant on computers and PHD mathematicians….
Hubris….
https://upload.wikimedia.org/wikipedia/commons/thumb/e/ec/LTCM.png/350px-LTCM.png
Right then a hyper event.
Each sentient car will learn new things every week. They will upload their learning to the cloud and it will be shared to the whole fleet. We will have cars with a million years of driving experience. I’ll take the AI car.
Just wait until the horrific head on crashes start….
This is just more bullshit — right up there with the Mars colony … and as usual the MOREons are gobbling it up.
We are awash in a sea of MOREons… lunkheads… donk.eys… fools… idi..ots…
Agreed
Where did the wacko come from?
I can report that not one in a hundred people I talk to will meaningfully discuss collapse.
However, many people can detect that something is wrong, but it’s always the fault of those other people…usually political party, but may also include race, religion, their boss at work, etc.
Also, I can report that nobody, and I mean nobody, will ever place any blame on the billionaire oligarchs. After all, they all want to be one. Based on this observation alone, one can conclude that the oligarchs are completely safe – they have captured the peasants.
Take that, Marx!
I know plenty who think the financial system is going to collapse — but they refuse to accept the energy situation as the cause — and they expect a reset
But then a dumb and dear MOREon could see that the financial system is going to collapse
> Take that, Marx!
Not so sure about that; when the going get a tad tougher the axes etc comes out like they did before and it’s “the end” for the super rich.
I think the early stages will see people look to their ‘betters’ for a way out; I believe people stood back and let the upper deck passengers take priority on the Titanic. Of course at that stage they probably didn’t realise there was no help on the way and that the upper deck couldn’t care less about those of the lower decks.
Now I see that once the realisation spreads that’s ‘we has been duped’, then well ‘the Hamptons are not a defendable position’…
Venezuela seems to be ghettoising and is at an early pre-collapse (still a Govt and minions) and will give food for thought.
Th Chinese are installing a large heavy oil refinery in Venezuela that possibly could be a game changer for a while:
https://en.wikipedia.org/wiki/Oil_reserves_in_Venezuela
Would reduce US dependence on markets and supply its domestic concerns.
We shall see, but Venezuela is not going back to US Client State status.
VE Oil is mud.
The EROEI is catastrophic. The Chinese are late to the game. US was first in let’s go back to pyramid scheme 101.
Alberta also has huge amounts of oil …..
Economics. Alberta’s oil sands has the third largest oil reserves in the world, after Venezuela and Saudi Arabia.
And it will still have the third largest reserves in a thousand years….
Indeed, it is a myth that humans panic in crisis. Many (most?) freeze and look to authority figures. Read about a few famous disasters and you will see that this is true. People often wait until it is too late to change their fates. This is why the mass chaos that some predict after collapse may, in reality, just fizzle into eerie silence . . .
Even the bewildered herd knows something is wrong.
They think heuristically, and have simple stories as to what that is.
I agree that people in general do know something is fundamentally wrong right now. But, they are misled into believing it is political or, bankers are causing it or,, the fed is causing it etc. The plebs think there is a fix for this. They do not realize it is a physical phenomenon that is out of our control (namely diminishing returns of finite planetary scale resources). Bottom line is energy per capita is falling. Without adequate amounts of energy per capita we starve and fight like cats in a sack over basic essentials.
I stopped discussing these issues with people I know unless they ask me to talk about it. There is two people I know who believe God will come and fix it all. One other believes technology will find a fix. My mom is more like me and thinks we are facing a horrible grinding future but prefers to not discuss it.
+1
Although I think a lot more than we think fall in the category of ” thinks we are facing a horrible grinding future but prefers to not discuss it.”
Ironically, that may be wiser than pursuing it.
Unless brought up in conservation, like you, I don’t initiate it.
I grew up with 40 years of ‘conservation’, discovered Tim Garrett’s heat engine model of fossil fuel civilisation and then Gail’s explanation of debt as the promise of energy futures. I have transcended despair, in much the same way as I was able to claw back to some ontology after its catastrophic loss during an LSD trip in 1970, but am now unable to share OFW insights, as the Core knows, because there are those who read OFW at my behest yet do not know…..
That is perhaps the most encouraging thing: that despair can be transcended.
Mental training and various contemplation techniques can help with that.
And for my part the beauty of natural things – some still left here, thankfully!
I think people know that “something” is wrong because it is becoming increasingly apparent that moving forward with technological innovation has many drawbacks and that we are beginning to act against our own best interests as a species. Compare this with the zeitgeist of the 50s and 60s, when the future was going to be simply amazing. For as much as Elon Musk is derided on this website because of his followers, there are many people, especially young people, who no longer see technological advancement as bringing about a utopian future.
In other words, people know that we are headed into a dark place but we can’t turn around.
In Hong Kong I seldom hear anyone celebrating new property price records…. I think they now finally understand that these gains are ephemeral — completed based on stimulus from the CBs…. and that the gains will vapourize at some point.
They don’t realize that they will also vapourize….
Rickards is saying a drop of 3% is necessary to escape a recession…
If that is true then we can’t have another recession – ever
https://www.rt.com/on-air/
“If that is true then we can’t have another recession – ever”
That’s pretty much my analysis as well.
People looking to make a few bargain finds after the next (not that it will ever happen) hypothetical ‘crash’ probably would have, much, much more pressing issues than scoring a house and a car on the cheap.
It will be a slow and steady grind towards despair for the pretentious people, rich and poor of the industrialized civilization(s).That is us, we, who’s not a part of the über elite for whom money lack significance, since they can create and destroy it at a whim.
It’s soon over folks. Let us all thank TPTB for sharing a nice run of this FF’ed human bonanza – for what it’s worth.
https://s-media-cache-ak0.pinimg.com/736x/3e/79/21/3e7921a04bebf12a5cadc6d2f74aeb19.jpg
If you see Buddha by the side of the road, kill him.
Just saying!
🤣
Dune is such a masterpiece.
Did you know that the fictional Duncan heroically sacrifices himself to save Paul and… that’s it…
Imagine OFW:s “Duncan Idaho” selflessly throwing himself in front of a bullet aimed for our OFW “buddha” F.E. aka, ‘Paul’.
https://media.tenor.com/images/9e382900d4d30d26bdc1747cb3abf823/tenor.gif
…and if there are only 4-5 people in NZ on OFW then wow…I am one in a million!! Awesomeness!
I wonder what the odds are on winning a big lottery prize…. I’d take the lottery win over knowing 🙂
Hmm same situation here; and I like that she refuses to engage past the point of us setting up our 20 ha block as a refuge. No point explaining past that point and so we push forward and I don’t plan very far ahead and I work a bit less, spend on things I never would have. Bit of a juggling act but we have started doing ‘things for memories’ not ‘things for reimbursement’. She is studying for a management degree sigh… but it doesn’t distract too much! All a bit sad really!!
Every time I hear of someone studying for a degree I cringe at the colossal waste of time. People are trained like circus animals to play into culture of institutions and rules that no longer apply.
Like the generals planning for the previous war, we educate using the rear vision mirror as our window. So I hear ‘moving forward, future proofing yada had yada..’ and I know that the person using those words floats around using nothing more than a bubble of hot-air.
Its my theory of the ‘hot-air ballon economy’. Take away the hot-air from some of these jobs and all you have left is an empty bag-of-sheet!
Higher Education what a misnomer.
Your right. Fortunately I escaped that trap. At this point I can decimate any business grad. I’ve taken on several Hedge Fund owners they are clueless cogs in the system.
Unfortunately or perhaps not my conscience refuses to let me profit from my knowledge of the system.
Instead I have dirty hands and a clean heart.
One in a million is not so bad. As i am apparently the only portuguese here, in my case is one in 10 million… Collapse awareness is clearly the most solitary job in the world.
Like you, i know no one who has the courage to face the full picture. Every person I talked to on the subject preferred to believe the situation can’t be so bad (otherwise it would be on the news!)
Cheers!
I find it best if I consider myself as a pilot flying a bunch of partygoers to some fun destination. I know the aircraft has a serious fatal flaw that means we’ll never arrive in one piece so I just fly the plane and let them party on. Now if I could just figure out a strategy to deal with the nightmares!
The plane is about to crash, stop wasting your time piloting ASAP and join the party-goers in the back and patayyyyyyyyyyyyyyyyyyyy like there’s no tomorrow (since there is (almost) literally no tomorrow)!!!!! 😉
Lastcall — how big of a harem do you reckon we could fit onto the yacht? Is there an ice making machine?
Several will fit, and we can tow the rest behind and rotate them through. No ice maker, but a solar panel or two and a 12v cooler…its ON! Just plot a course around a few islands and scatter a few of the harem on each and no matter what you won’t be on a deserted island!
…but I haven’t told Mis Last yet…shhh
…Hey you are either Fast or you’re Last …mmmm dodgy!
Repopulate the world island by island using the harem… a noble ambition! Madame Last surely can see the Big Picture and permit this.
Always wonder, does anyone here have someone else in their near circle that is on-board with whats happening, or are you like me, only able to find like minds on OFW?
Nobody.
Madame Fast has a good understanding of the situation — but is not aware of my extinction theory…. I have encouraged her in the direction of a BAU Lite scenario…. to prevent her from falling into depression… not sure if she believes that — I think she just refuses to think about this.
She certainly does not want to discuss these issues. She is aware of my regular participation on FW but does not read the blog.
My one brother understands the oil story — but he falls back on the techno fix…. he has children
Same situation with my wife FE. She knows things are bad, and actively works with me on “prep” things like food and water storage, building our concrete bunker, stocking up on firearms and ammo, etc. But I always take an optimistic approach with her, that we’re preparing ourselves and our kids for a transition to a different/ more agrarian way of living. I don’t talk with her about the possibility of real mass casualties, real suffering, and certainly not extinction. There’s just no point in putting that on her.
I don’t know anyone in person who understands… although there are a few people I know professionally who may harbor similar beliefs but like me understand it’s absolutely taboo to let on. In my industry we all have to support the techno-futurist green Utopian fantasy, so if there are others who think like me they keep their mouths shut. Perhaps as collapse proceeds, there will be a few who come out of the closet.
Only my former heroin-addict poet cousin gets it, but then he takes a rather tragic view of life anyway!
Everyone else thinks ‘they’ will think of something.
So I keep my mouth shut on this topic.
I’ve a heroin addict cousin too….. I am told she shoots through her feet because her other veins are shot… haven’t seen her in years… so not sure if she ‘knows’ — I doubt it
My oldest boy gets it pretty well. When he was told he was getting the valedictorian award he wrote a speech which was reviewed by his teachers. They thought it was good and asked him if he was satisfied with it.
He said he had to be honest with them and told them he does not think the future is bright at all. One of them told him he sounded liker her husband talking;-)
I don’t get into the extinction talk with him either.
Nobody – concerning the unconvenient truth, my extended family prescribed ban of speaking to me.
They believe me to be a nutcase, and want to live in love, peace and harmony.
Some of them have saved large amounts of money to retire and feel entiteld to live big when they are old.
They think, they are the smart ones, but they are the nutcases. But I like most them!
I am living (more ore less) big now.
OFW is my place oft refuge.
Saludos
el mar
We’ve never hit peak schadenfreude… that’s for sure!
“They think, they are the smart ones, but they are the nutcases.”
Haha el mar, so true!!! It reminds me of this quote, that I have posted a few times here on OFW:
“It’s no measure of health to be well adjusted to a profoundly sick society.”
-Jiddu Krishnamurti
We are possibly the world’s most exclusive club of nutcases. 🙂
https://media.giphy.com/media/3o6MbjnqJHTKWsWrIY/giphy.gif
“They believe me to be a nutcase, and want to live in love, peace and harmony.”
Sounds familiar. But I’m kind of learning to shock then back off. I also believe I can’win’ this one. Just take today’s senator shooting event and the MSM preoccupation with it. At some point, they must (I believe) conclude that there is no remote possibility for this global crap system to work.
I moved into a new farming community 8 years ago and was quite vocal about our predicament. Suffice to say, it did’nt go down too well. Now I’m known as the loonie in the valley. The biggest problem was I made all sorts of predictions, which never came true. Now I have egg on my face. ‘For now’. Never put a timeline on something.
This is perhaps why ‘prophets aren’t honoured’: all those damned predictions……..
And even worse ….. when the SHTF …. those philistine neighbours will be over the fence tearing out your cabbages and killing your cows…. because they ignored your pleadings to prepare for the end of the world….
http://www.telegraph.co.uk/news/2017/03/03/jacob-zuma-calls-confiscation-white-land-without-compensation/
Bad place to be during The Horror….
i have a few friends who understand but they all believe collapse will happen decades down the road and it will be BAU lite.i am only 30 so still very young. Its very hard for people my age to accept the realities of the situation. Most of my friends are just settling in to their first houses and have children just starting school.
I too have a friend who just had a kid and they want another one. I told him that he should wait to have another kid. He asked why – adding (in a laughing manner) that: “oh that’s right I shouldn’t have kids because we are running out of oil and the world will be ending soon”. I didn’t reply. Later he said he would have to save $300,000 for each kid to go to college in 18 years from now so he was going to setup a fund to reach $600,000 in 18 years for both kids. I bit my tongue and did not reply. He is just delusional. Some folks are just too far gone to reason with.
My wife ‘gets it’ or at least has a deep intuitive understanding of how fleeting and vulnerable the ‘operational fabric’, as David Korowicz would have it, that underpins our hyper-privileged, modern way of life is. She doesn’t want to hear me prattle on about oil and commodities and debt though or dwell on the nastier possibilities of a fast collapse scenario, and I have some sympathy with that. We have young kids after all.
I also have a lawyer pal in London who ‘gets it’. I do think that people who have had some huge loss or trauma tend to be more able to assimilate the mortality of our civilization. Either that or they are so weary of the greed and the stupidity and so upset by the damage that we are doing to the biosphere that they latch onto collapse as a possible panacea. And then you have a few who are so single-minded in their need to understand how the system really works that it overwhelms their innate human optimism.
“I do think that people who have had some huge loss or trauma tend to be more able to assimilate the mortality of our civilization. Either that or they are so weary of the greed and the stupidity and so upset by the damage that we are doing to the biosphere that they latch onto collapse as a possible panacea.”
I have two or three friends who fit in this description, but when they realized that the collapse will not be a panacea, but simply the end, they stepped back and now they are placing their hopes on degrowth and permaculture.
Well, better a false hope than despair, i guess, if you can not bear the idea that not only we as individuals but also civilizations are mortal.
Luckily I managed to convince my sister not to have a second child, telling her: Look at the mess the world is in, with the environmental collapse, the economic “crisis” (I didn’t use the word “collapse” here, too strong), the political corruption, etc.
It’s useless to reveal to people truths they are not prepared to accept. If we want to convince them of something, we must speak in a language they can understand.
Surprise your Sister did not respond…BUT there is MUCH GOOD in the world!
They usually go on to say, ..”can afford a brother or sister for little…..”We are doing our part by recycling and growing a garden, trying not to pollute, ect…
Or…go talk to those that have FIVE or more children!!!
Usually, I get …know deep down you are right BUT we are going with it anyways…so there!
Try to stop us!
I think what really convinced her was not so much the high probability of economic downturn but this video about methane emissions in the Arctic:
Boy, is she HOT, man will she be willing to have my child!?
Agree. I even suspect the melting of permafrost is in part her fault. 🙂
As if being an only child would cause little jonnie grow up to be a famous serial killer.
I grew up in a house full of boys — with a father who was seldom on the scene — and a mother who had to deal with a war zone on a daily basis….
Oh to have been an only child… the bliss… the peace… the safety!!!!
A fund that will hit 600k in 18 years…. hmmm…. so he is going to drop $3,000,000 into it now….
Not KNOWING … does have some serious downside….
It is a very strange story. Doesn’t make sense until you sit down and look at it.
My children and their spouses get it as does one of their friends.
https://s-media-cache-ak0.pinimg.com/736x/bf/3c/ff/bf3cff12e75208b1b73f9d62a0703cfe–quote-books-writing-quotes.jpg
Yes my wife is fully on board. She completely understands and has done the research herself.
When I first found out about these issues I was too vocal. It drew the ire of family and close friends. I never mention it now, except to occasionally comment on the economy or “global warming”. The rare occasions that it gets brought up, I say I believe shale fixed everything, and no longer think there is a problem. Most of my friends and family surely think it was just a weird “phase” I went through 3 or 4 years ago. I continue to quietly prepare, which my wife tolerates as a strange hobby. Additionally, because I am a hopeless delusistani, I don’t want a lot of hungry mouths showing up at my door in the event this turns out to be a major die-off and not an extinction.
Karl-
I was too vocal as well and it alienated some people a bit. I’ve since learned to keep my mouth shut. Outside of my family, I have one good friend who gets it. It is good to be able to speak freely to someone about it from time to time.
I think most of us are in the same boat. I’ve stopped talking about it, even to the missus – it just depresses her. Luckily I have a cousin who lives close by totally gets it and we were discussing the subject again just last night. We must be one a handful of people in Sydney that do.
My best friend gets it. Both he and his wife get it. My neighbor gets it. When needed, we will be back to back.
My wife thinks it’s a bunch of bunk.
Storm of Shit
This is what a meltdown looks like. Sears Canada operates 95 department stores, 29 Sears Home stores, 71 Hometown stores, 16 Outlet stores, 69 Sears Travel offices, and 32 Corbeil appliance stores.
“It’s going to be quite a show if this ends up in a bankruptcy,” Alan Marcovitz, president of mall landlord Westcliff Group, told the Globe and Mail. The firm sits on seven Sears leases.
http://wolfstreet.com/2017/06/13/sears-canada-hires-bankruptcy-advisor-brick-mortar-retail-meltdown/
SEARS would be an anchor tenant in those malls…. quite a show indeed…..
I wonder how much energy has been invested into a typical shopping mall (embedded in the building material, its construction and to power it) over its lifetime? And all that energy was devoted to sell stuff, much of which is now in a landfill.
For the life of me I can not think of any thing that SEARS sells that I can not buy cheaper with less hassle
As the first charts below show, the permissive factor that allowed the world to “emerge” from the financial crisis and the global recession, was a surge in debt, which on a consolidated basis is above 360% of GDP in all five select developed regions.
The chart on the right shows that while private sector releveraging has been slow, it has been drowned out by a historic surge in public sector debt.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/04/citi%20lor%201.jpg
What made this coordinated global releveraging possible? Central banks of course, who have bought over $10 trillion in public (and recently private) sector debt in the past decade, and between the world’s six largest central banks they now collectively own securities amounting to 40% of the world’s GDP.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/06/04/citi%20lor%202_0.jpg
http://www.zerohedge.com/news/2017-06-13/scariest-chart-central-banks
http://www.wowenglish.com/media/img/logo-wow.png
BRAIN DAMAGE & INSANITY Have Taken Root In America\
Unfortunately, many Americans are now suffering from increased levels of insanity and brain damage… and it’s only getting worse. That being said, I really can’t blame them. Everyday most Americans, from sunup to sundown, receive a constant flow of Mainstream media advertising and propaganda. And it’s even more damaging for the little tots and kids.
From infancy to adolescence, kids receive a tremendous amount of brainwashing via the TV, I-phone and internet. When a tiny tot is sitting in front of a TV all day watching someone named Sparky the clown telling the child to eat sugar loaded with a smattering of cereal, this is the first step in turning that infant into an attention-deficit hyper-active kid that will not only drive his-her mother and father completely insane, but also all the teachers and public that has to deal with this wonderful child in the future.
As the child grows up, it now needs a lot of sugar or the screaming starts. I know of this first hand when I travel on the road and stop at one of the newer Mega-Travel-Stops on the interstate. Maybe some of you have been into one of these new Mega-Travel-Stops that have RV & Big Truck fuel pumps along with 100 gas pumps for regular cars and trucks.
On a busy travel weekend, I would recommend anyone who hasn’t visited one of these fine establishments, to take a bit of time out of your day… to do so. When you get in there, it can be complete CHAOS. Of course, there are many fully wired adults and lots of screaming kids looking for their junk food fix. I have seen some kids grab bags of chips, take them to their parents standing in line at the checkout counter… and when the parent said no, the kid took the bag and threw it back on the wrong place on the shelf. Many times the bag fell on the floor, and the parent did the RIGHT THING… and ignored it… LOL.
I gather if you apart of the mass exodus of families out of the suburbs on the weekend get-a-way, this may seem normal… the CHAOS, ya know. Basically, these Mega-Travel-Stops are frogs boiling in the water and no one seems to notice, and no one seems to care.
Anyhow… after Americans spend top dollar just to live in a McMansion or some other shoddy built suburban home, with all the bells and whistles, they have to spend even more money to GET AWAY FROM IT ALL during the weekend. Of course, this makes perfect sense when we have gone completely insane.
Think about this for a minute. Many Americans spend 40-60 hours during the week to afford the dream home with white picket fence in the suburbs, located six feet from their neighbor, but as soon as Friday rolls around, they grab the kids, the RV and get out of there AS FAST AS POSSIBLE.
So, this is our new economy. Americans working jobs they hate, to buy a house they can’t wait to leave just as soon as the weekend arrives. And all of this is being propped up by massive amount of debt and Central bank asset purchases.
That’s the insanity. Now, let’s discuss the brain damage.
Brain damage impacts Americans in different ways. However, the majority who have the illness, don’t realize they are inflected. So, they continue on their marry life, not realizing the brain damage is getting even worse.
So, what do I mean by brain damage? It’s quite simple. A person who suffers from brain damage, actually believes a new Credit Card in the mail is a like winning a small lottery. Thus, they are able to go out and buy more garbage and crap to fill up an already stuffed house or rental storage facility. Brain damaged Americans no longer understand THRIFT, FRUGALITY or PRUDENCE.
Rather, Americans are racing 70 mph down the interstate, spending money they don’t have on lots of screaming kids, just to get away from it all. And it gets even worse. No, I am not kidding.
In the past, I have tried to share some of what I know about the economic and financial insanity to family and friends, but the response was normally the same, THAT I WAS LOSING MY MIND, and… “Don’t worry… Everything is Fine.” You see, when someone has severe brain damage, they believe BAD is GOOD, WRONG is RIGHT, DEBTS are ASSETS and so on and so forth.
http://www.zerohedge.com/news/2017-06-13/are-massive-central-bank-purchases-last-ditch-attempt-save-economy-cap-gold-price
That’s the first thing you’ve said that made any sense 🙂
Fast Eddy 1 – Richarda 0
I have a cousin in Spain who lives just the same way: high debt, both personal and business, show house, flash car, children at private schools, always going off at weekends. He is not terribly bright and will drive his business into the ground.
The holidays he takes are irrational, as where he lives it is only 30 mins in a car before you can walk in the woods beside a beautiful lake, or in the mountains – truly lovely countryside to be enjoyed for next to no expense.
He May be on to something cos having fun is fun
Or, in the words of the great peruvian poet César Vallejo:
“You’re all dead.
What a strange way of being dead. Anyone would say you aren’t.
But, truly, you’re all dead.”
And this for ‘..the pitifully small number..” on OFW. Someone tried to work out ‘the deaf ears of the people syndrome’….it couldn’t have been any other way is something he hasn’t thought about..methinks.
‘As stated at the beginning, my impetus for all the Do the Math work was to lay out a rational, quantitative foundation for why we should not take future growth/wealth/happiness for granted. We could really blow this thing. Our best hope, as I saw it, was to get people to acknowledge and accept the threat and thereby endeavor to make it go away. As with any 12-step program, admitting that there is a problem is step one….
…But as a cerebral type, it gives me some satisfaction to have insight into how and why we may fail. If the world falls apart before I die, at least I’ll have some inkling as to what’s going on, and won’t be as psychologically shattered by the affair. But I’ll be one of a pitifully small number, I’m afraid.’
https://dothemath.ucsd.edu/2015/04/programmed-to-ignore/#more-1516
One of the more interesting posts today. I too am INTJ by the way.
We probably have a very much disproportionate share of INTJs commenting on this site. I suppose I am an INTJ too.
INTP here. I dearly hope it’s the second best result after INTJ!
Anyway, i can’t help it.
Not much can be done; this statement is pretty much it for me!
‘In the past, I have tried to share some of what I know about the economic and financial insanity to family and friends, but the response was normally the same, THAT I WAS LOSING MY MIND, and… “Don’t worry… Everything is Fine.” You see, when someone has severe brain damage, they believe BAD is GOOD, WRONG is RIGHT, DEBTS are ASSETS and so on and so forth.’
..cont’d
This massive increase in Central bank asset purchases is a last ditch effort to prop up the market and cap the gold price. While they may have more propping up to do, they will likely have to increase their level of buying even more. As it goes exponential… then we know the END IS NEAR.
https://srsroccoreport.com/massive-central-bank-asset-purchases-last-ditch-effort-to-save-economy-cap-gold-price/
It really is an interesting race; what will be th “emperor has no clothes moment” ?
I pick up my little boat 25ft yacht..this weekend (Picton NZ) and hope to have a decent summer of it … thats my asset purchase to help the system…but it didn’t involve debt…so does it count? Will I get to enjoy it with full service in place or will it be my deck chair as the world goes crazy?
Last .. call…for ..alcohol
99.6% Chance of FedPlosion
http://ponziworld.blogspot.ca/2017/06/996-chance-of-fedplosion.html
Now it’s India: (A lot like what is planned near Beijing and in Lagos. Jobs program as Gail suggests maybe.)
https://www.planetizen.com/node/93222/india-looks-build-11-million-person-city-empty-farm-land
Stimulate the economy!
“You are going to live and die as a working peon in the global industrial system”. LOL, LOFL………what would we be doing if we didn’t “die as a working peon”. Everyone is a slave to the system in one form or another. Better go back and dream up another ridiculable, wise Dolphinism.
It is amusing when one hears people complain about being slaves in this system.
If this is what slavery is then it sure is good. Even someone who works at the GAP is doing rather well — compared to those who are not fortunate enough to be slaves to the corporations
Let’s take a look at what freedom looks like:
http://news.xinhuanet.com/english/photo/2013-04/05/132285378_31n.jpg
Any billionaires reading this want to come out of the closet? I thought not.
This is how much the people who run this system care about you: zero. This is how important you are to the system: zero.
You are going to live and die as a working peon in the global industrial system. But hate me, right? Go ahead, bite the hand that informs you. Keep on believing you are oh so important scientists and engineers whose discussions of these things are meaningful.
http://media.peppypals.com/2016/07/Calm-down_Emotions.png
Now write yourself a prescription for:
https://img.rt.com/files/news/31/f1/30/00/abilify.jpg
Dolph has that advantage on us, a least: self-prescription!………
Dolph … I will agree with everything you say … but I need you to write me a few prescriptions first… I’ll have a kg of MDMA to start…. for the end of the world party ….
That would be a good start……..gotta finish with pure morphine though……
Snorp: So FE, what are you going to do when BAU ends?
FE: “I’m going to F789 anythings that moves, what about you Snorp?
Snorp: I’m going to remain perfectly still….
Hmmm… how long has this been burning now…
http://i.dailymail.co.uk/i/pix/2017/06/14/03/4167570500000578-4601902-image-a-209_1497408027876.jpg
When is it going to do this?
http://www.sharpprintinginc.com/911/images/pagemaster/911_HighQualityPhotos305_we.jpg
FIRE FIRE INNA BABYLON
Oh dont play with FIRE because FIRE will burn you
It was for I and I
Here it is
This one is unbeatable!
https://youtu.be/FaHEusBG20c
Bettter…
Dubai Skyscraper Engulfed in Flames, Does Not Collapse
A high-rise building catches fire in a major city. All of its occupants are evacuated as fire crews arrive to put out the blaze. After a few hours, the flames spread across dozens of floors … and in the end, the building remains standing.
That was the story last month in Dubai, the most populous city in the United Arab Emirates (UAE), as the Tamweel Building was added to the long list of skyscrapers that have withstood major fires.
This stark contrast to the Twin Towers and WTC Building 7, the only steel framed skyscrapers in history, whose… complete collapses have been officially blamed on fire, is causing more people to question the official 9/11 story.
http://www1.ae911truth.org/faqs/688-dubai-skyscraper-engulfed-in-flames-does-not-collapse.html
Even though the massive fire charred large portions of the Tamweel Building, the skyscraper still stands today:
http://www1.ae911truth.org/images/infoitems/tamweel-building-after-fire.png
The Dubai Tower was hit with a 600km/k jet fuel filled plane?
Bwahahaha. Jet fuel. You’re an idiot.
Conspiracy nuts……..anti vaxxers, global warming deniers, right to life advocates, the list goes on. How they have the brain power to breathe is beyond me.
10 Crazy Conspiracy Theories That Became Conspiracy Facts
http://www.zerohedge.com/news/2017-05-20/10-crazy-conspiracy-theories-became-conspiracy-facts
The trick is trying to work out which theories are real and which are bullshit….
https://www.youtube.com/watch?v=MMoG8bssZf8
http://www.disclose.tv/news/pentagon_attack_on_911_was_a_cruise_type_missile__anonymous/131978
Anyone who after watching those two videos still thinks 911 was not a false flag…
….is brain dead.
Bomb… explosion .. bomb… explosion … bomb…..
https://www.youtube.com/watch?v=NLlMXkWW_LM
Good example of people who are staring directly at the truth and reject it. Happens everyday FE. People believe what they want to believe. Right?
“When is it going to do this?”
When transcontinental jet hits it.
Fire is fire…. in fact this place has been burning for far longer than the towers… and still standing…
I suggest you watch this — it is a presentation from a mathematician who worked for the government body that was tasked with investigating 911 — he states — and backs it up with physics — that the report that came out — is bullshit
https://www.youtube.com/watch?v=MMoG8bssZf8
Or don’t watch it and remain in ignorance and delusion
The most enjoyable part is when the head of NIST starts off his presentation with ‘I’d like to put to bed the theories that explosions took down the buildings — if that were the case there would have been reports of explosions’
Then a number of clips are introduced — in one of them there is a firefighter speaking to someone on a phone — and BANG! — he cringes…. as an explosion occurs in one of the buildings….
In another massive girders are shown being thrown horizontally from the building — as the physics professor states — things fall down — they do not fly out to the sides… UNLESS…. there was a very powerful force involved that flung them horizontally — like a bomb….
911 was so obviously a false flag.
I have no idea what happen but I am sure that the story they pontificate BS
It does not matter, the building fell at free fall acceleration. This is impossible without explosives.
It does not matter, the building fell at free fall acceleration – into its own footprint. This is impossible without explosives. It should have fell sideways not straight down at free fall. And all three buildings fell this way.
And Building 7 must have been constructed of cheerios, or something, they way it pancaked in on itself. Totally ludicrous, but people still buy the official story, despite all the lies that have been spun since.
and NYC fire code and suppression is is massively underrated if a small office fire can cause freefall……nah, we don’t need to question anything…………..
Cheerios! That’s a ridiculous theory! Everybody knows it was made of Lego.
http://www.brickshelf.com/gallery/srezkall/skyscrapers/wtc/7wtc/img_2586.jpg
Lol
People are conditioned to believe America stands for good — right In Alaska?
So it is very difficult for them to believe that the American leadership would do something like this.
Even if they read this — an acknowledgement that terrorist acts against American citizens was approved at the highest levels…… they will still refuse to believe 911 was a false flag
https://en.wikipedia.org/wiki/Operation_Northwoods
sadly for the sane and logical, even a building made of Cheerios would not free-fall into its own footprint. the solid oat flour would present a resistance to gravity, and the building debris, although powderly like the blast-pulverized concrete of Building 7, it would probably fall to one side. can Americans be mor.on stoo.pid?
Right this isn’t rocket science. BTW rocket science isn’t rocket science either the Russian designed the impossible with there engines way ahead of US.
Proves one point access to energy is everything.
What is amazing is they don’t even have to be very sophisticated… and the humans are fooled…
Shira Rubin, a reporter at Vocativ, noted on Wednesday that images of atrocities in Aleppo are proliferating wildly on social media. However, Rubin added, “A large portion of those images are fake, sparking an uproar among those who argue the false posts diminish the reality of those suffering and fighting on the ground.”
Syrian geopolitical analyst Mimi Al Laham took to Twitter on Dec. 14 to point out that images purporting to show a terrorist attack came from music videos and an unrelated bombing in Pakistan:
http://www.mintpressnews.com/fake-aleppo-genocide-pics-spread-amid-new-calls-for-war-on-syria/223306/
They are banking on the humans being Stooooopid. They assume right.
Now this is a masterpiece…. one might be forgiven for hoping that this little monster spends her last dime on cancer meds ….
When I look at the videos of the Twin Towers collapsing, the collapse starts at the top and falls floor by floor from the top. This is in contrast to demolition with explosives, where the bottom of the building is blown out and the building sinks floor by floor into the bottom. So, I am not convinced by the explosives argument.
What does the US government have to gain by an inside job? Seems to me that the US does whatever it wants around the world with only the flimsiest of excuses anyway, whereas if truth of involvement in 911 came out then all credibility in the authorities is lost. So, a lot to lose and little to gain.
Almost certainly the US agencies were aware an attack was going to go down and determined to let it happen without interference (hence no fighter jets were scrambled to intercept), but that, whilst bad enough, was as far as the complicity went.
What I see is a collapse in stages… just like a controlled demolition… and people reporting ‘pop pop pop’ of explosions… just like one would hear in a controlled demolition.
This is the definitive video — involving an inside from NIST:
Final Reports from the NIST World Trade Center Disaster Investigation
https://www.nist.gov/engineering-laboratory/final-reports-nist-world-trade-center-disaster-investigation
https://www.youtube.com/watch?v=MMoG8bssZf8
What did they have to gain? Are you serious?
Do you not recall how they used this to colonize Afghanistan? Do you not recall how they used this to justify destroying Iraq? How they use this to justify violating the constitution to collect all communications on all of us all of the time?
This video clip describes Paul Wolfowitz’s involvement in shaping the U.S. Neoconservative foreign policy implemented after the attacks of September 11, 2001, including his role in the creation of the PNAC document ”Rebuilding America’s Defenses” during the year 2000 which suggested a need for a ”catastrophic and catalyzing event— like a new Pearl Harbor.”
Following is a transcript of a video describing Paul Wolfowitz’s involvement in shaping neoconservative foreign policy which was implemented after the attacks of September 11, 2001.
http://www.newsofinterest.tv/video_pages_flash/politics/misc_neocon_globalist/wolfowitz_pnac_nph.php
Maybe it was a fundie?
As Geena Davis’s character says in the 1997 movie The Long Kiss Goodnight.
https://youtu.be/oDuma1M09B0
I immediately thought the same thing. The twin towers and the 47 story building 7 that collapsed were made to do so with explosives. I have zero doubt. Like peeling a banana on towers 1 and 2 … classic controlled demo on building 7. Even a cursory look into the evidence tells you to look for explosives, yet NIST never even considered explosives at all. What a crock. Hardly any of the protocols for investigating a fire were followed. All the evidence should have been treated like an archaeological dig site with brushes and fine tools. But, instead was handled with haste and shipped off on a slow boat to China for recycling. What a joke. Consider that airline crash debris is recovered from the sea floor and the plane reassembled to determine how a plane crashed. Yet, the most severe structural collapse in history, three building on the same day in supposedly the same way killing 3000+ people is not worthy of reconstruction to determine the mode of collapse. Just ridiculous.
And where was the wreckage from the plane that “flew” into the Pentagon? Nothing, not a wingtip, engine, trace of fuel – nada. Seems to me more likely a cruise missile hit it. Or the one that crashed in Pennsylvania (UA93)? The debris field looked like someone just dug a big hole and lit a bonfire. No fuselage, engines, body parts – nothing. Only little pieces of what seemed like aluminium foil. Whereas a similar sized aircraft, MH17, that came down in the Donbass back in 2014, left a path of wreckage and bodies over 6 kms long.
See the video — that is DEFINITELY a missile
http://www.disclose.tv/news/pentagon_attack_on_911_was_a_cruise_type_missile__anonymous/131978
Yeah, looks very fishy. Plus what else could fly in so low with such stability? Even a first rate pilot would be hard pressed to angle a 757 at such speed and height.
Yes – it could not be more ridiculous…..
But if you mention this outside of FW … most people will think you are nuts… or worse — they will call you unpatriotic …. you might even invite violence if you pushed it too far.
Crazy.
It’s so embarassing when this happen. But hey there was no planes envolved in this one, so people can always argue the situation is not exactly the same. lol.
What needed to be done was an operative needed to be dispatched to the building to secretly plant some explosive charges — to ensure the building pancaked just like the TTs….
Then they could point to this and say – see! – that’s what happens when a large building catches fire and burns….
But nah…. why bother…. almost all people looking at this will not make a connection with the TTs…. because they are St0000000pid.
easy peasy answer: one is a prolonged fire, the other is a controlled demolition.
Check this out … another angle of one of the Towers going down…
WHAT? That’s not the Twin Tower?? It looks remarkably like one of them falling…. WHAT!!! That’s a controlled demolition? Where have we seen that before x2?
https://www.youtube.com/watch?v=hdqWRHe4AKs
It is just amazing how gullible the average person is ….
Look up Mike Dice on YouTube you’ll stop being amazed.
lol, I saw the one where he asked questions about the civil war. I think the only guy that got a question right was a Canadian.
We’re the best!!!! 😉
Except of course when your name is Naomi Clueless Klein 🙂
Haha yes JMS…on top of it she’s a native of my city….
but, but FE, feigning innocent, that would mean a group had to have time to plant all those explosives, and it could take months. why, something that planned could have started before the fall, 2000 election, during the, gasp, Clinton administration! Clinton-Bush, one in the same? and if these buildings were set to denote, then the planes flying around with high.jack.ers must have been a ruse, a pasty, like Lee Harvey Ost.wald… someone co-opted their plans, or used them as a cover. and if a missile hit the Pentagon (likely) what happened to the commercial flight and its passengers? landed someplace and all the passengers-crew killed? this is starting to sound tre-a-son-ous. and if so, the trai-tors are still out there, living large on their ranches, at least some of them. what do do?
Why would it take months? I am not an explosives expert… but I would imagine that a team of demolition experts could set charges on key supports in a building over the course of a few hours.
As for the planes that hit the towers…. the CIA loosely controls ISIS … as they controlled Bin Laden in Afghanistan when they teamed up to fight the Russians….. as we know there are factions within the Islamic world who hate each other…. so it is not difficult to imagine one side being willing to saddle up with the CIA in exchange for support…..
And with respect to the Pentagon …. no idea what happened to that other plane… but feel free to show me the bodies… the seats… the engines…. the tail section …. of he plane that supposedly hit the pentagon….
OPERATION NORTHWOODS
Operation Northwoods was a proposed false flag operation against the Cuban government, that originated within the U.S. Department of Defense (DoD) and the Joint Chiefs of Staff (JCS) of the United States government in 1962. The proposals called for the Central Intelligence Agency (CIA) or other U.S. government operatives to commit acts of terrorism against American civilians and military targets, blaming it on the Cuban government, and using it to justify a war against Cuba.
The plans detailed in the document included the possible assassination of Cuban émigrés, sinking boats of Cuban refugees on the high seas, hijacking planes, blowing up a U.S. ship, and orchestrating violent terrorism in U.S. cities.[2] The proposals were rejected by the Kennedy administration.[3]
At the time of the proposal, communists led by Fidel Castro had recently taken power in Cuba. The operation proposed creating public support for a war against Cuba by blaming it for terrorist acts that would actually be perpetrated by the U.S. Government.[4] To this end, Operation Northwoods proposals recommended hijackings and bombings followed by the introduction of phony evidence that would implicate the Cuban government. It stated:
The desired resultant from the execution of this plan would be to place the United States in the apparent position of suffering defensible grievances from a rash and irresponsible government of Cuba and to develop an international image of a Cuban threat to peace in the Western Hemisphere.
Several other proposals were included within Operation Northwoods, including real or simulated actions against various U.S. military and civilian targets. The operation recommended developing a “Communist Cuban terror campaign in the Miami area, in other Florida cities and even in Washington”.
The plan was drafted by the Joint Chiefs of Staff, signed by Chairman Lyman Lemnitzer and sent to the Secretary of Defense. Although part of the U.S. government’s anti-communist Cuban Project, Operation Northwoods was never officially accepted; it was authorized by the Joint Chiefs of Staff, but then rejected by President John F. Kennedy.
According to currently released documentation, none of the operations became active under the auspices of the Operation Northwoods proposals.
More https://en.wikipedia.org/wiki/Operation_Northwoods
So this is the stuff they admit
Towering inferno: Screaming residents build ropes from sheets and lean out windows as huge fire at West London tower block engulfs the 27-storey building with 200 firefighters struggling to control the blaze
http://www.dailymail.co.uk/news/article-4601902/Huge-inferno-West-London-tower-block.html
This wouldn’t be the work of …. The Terrorists?
Imagine a couple of dozen of these all happening at the same time….
http://i.dailymail.co.uk/i/pix/2017/06/14/03/4167333800000578-4601902-image-a-157_1497405632424.jpg
In big cities all over the Far East, they are building “residential towers” 50 or 60 storeys high and squeeze them into townscapes alongside all the other glass, steel and concrete structures so that from the air they resemble components plugged in a huge circuit board.
For the privilege of owning a unit in one of these brand-new towers in central Tokyo, a friend’s daughter and her husband have just negotiated a 35-year mortgage for a 50 million yen loan.
Apart from the financial implications, one shudders to think what will happen when the big one strikes.
http://l450v.alamy.com/450v/e4jw8t/tokyo-japan-dense-city-skyline-e4jw8t.jpg
Zombie holocaust
A dozen such fires occurring simultaneously in a city would be a sign of ……..NATO humanitarian intervention. 🙂
If you are going to survive then you have to be discreet about it.
Was that a discreet comment?
This is quite hilarious because a lot of this debt was added when the price of oil was over $100 from 2011 to mid 2014. So, these companies actually believe they can be sustainable at $30 or $40 a barrel? This is pure nonsense. Again… most energy analysts are just looking at how a company could producing a barrel of oil that year, without regard of all other external costs and debts.
Moreover, in order to acquire all this debt, to give the ILLUSION that shale oil and gas production a commercially viable enterprise, these energy companies have to pay its bond (debt) holders dearly. How much? I will show that in a minute, however, this is called their DEBT FINANCING. Some of us may be familiar with this concept when we have maxed out our credit cards and are paying a minimum interest payment just to keep the bankers happy. And happy they are as they are making a monthly income on money that we created out of thin air… LOL.
https://srsroccoreport.com/warning-the-global-oil-gas-industry-is-cannibalizing-itself-to-stay-alive/
What blows my mind is that these shale companies are allowed to blatantly lie to investors. Where is the SEC in all this?
Oh of course — they have orders to stand down. To look the other way…
Shale is TBTF
According to the EIA and these 68 public energy companies, they are now spending 75% of their operating cash flow to service their debt compared to 25% just a few years ago:
We must remember, debt financing does not mean PAYING DOWN DEBT, it just means the companies are now spending 75% of their operating cash flow (as of Q3 2016) just to pay the interest on the debt. I would imagine as the oil price increased in the fourth quarter of 2016 and first quarter of 2017, this 75% debt servicing ratio has declined a bit.
However, people who believe the Fed will raise interest rates, do not realize that this would totally destroy the economic and financial system that NEEDS SUPER-LOW INTEREST RATES just to service the massive amount of debt they have on the balance sheets.
https://srsroccoreport.com/warning-the-global-oil-gas-industry-is-cannibalizing-itself-to-stay-alive/
https://dj0s31cxqi9ot.cloudfront.net/wp-content/uploads/2017/06/Debt-Service-Top-Global-Oil-Gas-Companies-2016-768×437.png?x65756
G…. l….enn. That groan is for you.
I kinda miss the g-man.
Wow!
where is the SEC?
http://www.nytimes.com/interactive/us/natural-gas-drilling-down-documents 4.html#document/p3/a22775
It is easy to make models of future production and future oil prices that seem to justify investments.
Let’s do a check on interest rates in past History
Interestingly, rates aren’t just low within the context of American history.
They also happen to be at the lowest levels in the 5,000 years of civilization.
http://www.businessinsider.com/chart-5000-years-of-interest-rates-2015-9
Mesopotamia, c 3000 BC: 20%
Babylon, Code of Hammurabi, 1772 BC: codified earlier Sumerian custom of 20%.
Persian conquest (King Cyrus takes Babylon), 539 BC: rates of 40+%.
Greece, Temple at Delos, c. 500 BC: 10%
Rome, Twelve Tables, 443 BC: 8.33%
Athens/Rome: circa the first two Punic Wars, 300-200 BC: 8%
Rome: 1 AD: 4%
Rome, under Diocletian, 300 AD: 15% (estimated)
Byzantine Empire, under Constantine, 325 AD: limit 12.5%
Byzantine Empire, Code of Justinian, 528 AD: limit 8%
Italian cities, c. 1150: 20%
Venice, 1430s: 20%
Venice, (Leonardo da Vinci paints “The Last Supper in Milan), 1490s: 6.25%
Holland, beginning of the Eighty Years’ War, 1570s: 8.13%
England, 1700s: 9.92%
US, West Florida annexed by the US, 1810s: 7.64%
US, circa World War II, 1940s: 1.85%
US, Reagan administration, 1980s: 15.84%
US, Fed does not hike rates in September, 2015: 0-0.25%u
In fact, according to another new report, this one from the Bank of Montreal, interest rates have fallen so far that some governments can actually make money by borrowing it — essentially destroying any argument for spending cuts.
“In this bizarre circumstance, let’s just say that the argument for spending restraint — let alone austerity — pretty much collapses,” Bank of Montreal chief economist Doug Porter wrote in a report Friday. “Public sector borrowing becomes a revenue-generating activity.”
Bill Gross, a legendary billionaire money manager, is using a stronger analogy than “storm.” Noting that some $10 trillion in debt around the world today has a negative yield on it (i.e., it’s so expensive it doesn’t make any money for the debt owner), Gross described the debt market as a “supernova that will explode one day.”
http://www.huffingtonpost.ca/2016/06/20/interest-rates-negative-yields-debt-supernova_n_10532462.bro
Thanks! It is hard to see why a person would want to lend at very low interest rates. The only reason for accepting them would seem to be that there were not better uses for the money.
Hi Gail.
Thanks again for your efforts.
Peak oil is not a theory, it is an observation.
I think is a mistake to use currencies which, can be created a will and interest rates with oil production that can not. Currencies are ultimately a proxy for energy and as the latter depletes, more of the former is required.
Even at zero interest rates, the servicing of debts is only going to become harder and harder.
“interest rates CANNOT RISE, and will likely continue to fall or the entire financial system would collapse.”
https://srsroccoreport.com/warning-the-global-oil-gas-industry-is-cannibalizing-itself-to-stay-alive/
Cheers.
I am also saying that interest rates cannot rise, without the system collapsing.
I equate peak oil with a particular theory about what symptoms we would see as we approach limits, and how much oil that will be produced after the decline begins. I agree that oil is limited. The problem is that the symptoms, and how much oil will be later produced, are not right according to “peak oil theory.”
Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse
http://www.zerohedge.com/news/2017-06-13/oil-prices-suffer-first-death-cross-2014-collapse
I see Fed lifts interest rates this afternoon. We also have supply glut that doesn’t get better, and OPEC that seems to be pumping a little more each month. And China with debt problems.
Crude dropping below 45 bucks….
Look, it’s a mistake to think that contraction is somehow going to break the system. The system actually needs contraction!
The system desperately needs all of these sick people and useless eaters to die. So, if you understand this, how exactly do you go about it? Well, you have to ration healthcare without telling people that you are doing it. Just make them pay higher prices and wait longer. Some of them will give up and off themselves at home. Mission accomplished.
The next thing you need to do is keep the money spigots wide open, so any decline in the physical economy can be papered over with numbers generated from the inflating currency.
And finally, you need to keep the sports and entertainment going, at all costs. Eventually, much of this will be recycled, but you still need a certain number of movies and sports leagues operating every single year to keep the populace distracted.
You people continue to insist that humans being are rational. Not true! Humans are motivated by food, intercourse, and entertainment.
And get the races to hate each other, get the nations fighting wars, and you have accomplished the breakdown which is needed to transition to the next system.
If we accept your premise that the system needs to contract—or that the people in charge have decided that the system needs to contract—then what you are saying makes a lot of sense. Population reduction, by surreptitious means if possible, then becomes the order of the day.
However, there are an awful lot of rackets going on, with the people in charge of the system taking their cut of the profits, and many of those rackets require population to be maintained or expanded. It’s a fairly complex socioeconomic ecosystem with lots of relationships between rulers and ruled, predators and prey, farmers and cattle, so it is by no means clear that the idea that “the system needs to contract” is firmly established as a consensus among the elite.
Furthermore, we see plenty of evidence that the operators of the system are paddling away like mad to avoid the system contracting; they are fighting against gravity, entropy, friction and net energy decline in order to maintain at least the appearance that the system is evolving, improving and growing.
Lack of healthcare may be less of an issue in keeping adults alive that might be assumed. From the hospital it’s only a short step to the morgue. And quite often this happens because of medical mishaps such as surgical errors, mistakes in drug prescription or administration, hospital infections, or nutrient starvation due to those properly balanced hospital diets. I always remember that George Washington was killed by his doctors, who literally bled him to death, despite the fact that Harvey had demonstrated that the blood circulates and so we don’t get ill as a result of producing too much of it almost two centuries earlier.
I agree with you that humans are fundamentally not rational. Also, they don’t need much prompting to hate those of other races. Simply throw large numbers of ordinary people of different race and/or ethnic, religious or social class together under anything other than economic boom conditions and you won’t have to wait long for strife to appear.
Contraction means “Economies of scale” turn into “diseconomies of lack of scale.” Debt can’t be repaid with interest. What is there to like about this?
Is the Chain-Restaurant Recession Becoming Structural?
A 15-month downturn, longest since 2009, and no end in sight.
There’s simply no respite for chain restaurants. Industry-wide, same-store sales fell again in May. The last time, same-store sales actually rose year-over-year was in February 2016. On that basis, the chain-restaurant recession is now in its 15th month, the longest downturn since the Financial Crisis.
In May, same store sales fell 1.1% year-over-year. Same-store foot traffic fell 3.0%. Food sales were down, and alcohol sales were down, according to TDn2K’s Restaurant Industry Snapshot, tracking sales at 27,000 restaurant units from 155 brands, generating about $67 billion in annual revenue. But the average amount of the check per person increased by 2%, and not because they ordered more food and booze, but because prices rose.
http://wolfstreet.com/2017/06/12/chain-restaurant-recession-structural/
Could there be any connection with this? It’s put me right off the chicken chow mein!
BEIJING — In China, it is legal to eat cats and dogs. Even so, ordinary people reacted with alarm this week as news broke of a Chinese man caught with 500 cats, crowded into tiny cages, which he intended to sell to restaurants.
The man had used sparrows and caged birds to lure both stray cats and domestic ones in the city of Jiujiang in southern Jiangsu province, the 163.com and news.ifeng.com websites reported.
Many of the cats were found in cages in the back of a small truck, some near death and mewing faintly in the heat, while others were recovered in a hut near a highway, cooled only by a ceiling fan. The man usually sold the cats for about 30 yuan ($4.40) each, the report said, citing a local policeman.
https://www.washingtonpost.com/news/worldviews/wp/2017/06/13/chinese-man-caught-with-500-imprisoned-cats-destined-for-restaurants/?utm_term=.5d826a856b82
If it is true it sure is going to perpetuate a stereotype around here. OTH, if we are going to be eating creatures like this soon it might be prudent to learn how to do so now…;-)
A friend of mine was looking to set up a high-end restaurant, and he enlightened me as to the cost of good ingredients even for the trade, above all meat, but even vegetables.
He gave up on his idea, after having found a superb Italian chef and head waiter, as the profit margin was just too small (and the insane competition for a good location in London these days ).
Ever since, I have looked askance at most restaurants. People praising dirt-cheap Thai and Chinese places make me shudder – they just don’t think about what must be the input costs in those places in order to arrive at those prices.
All too often, a person visits these restaurants and they are close to empty.
Except for Dolph and his mates on FW…. every restaurant they go to is busy…. every Mall is full…
I was at a mall today…That is were I get my blood work done lots of people NO bags
A symptom of a dying beast…
Fewer people are eating at restaurants – because they are broke — and they are looking for the absolute cheapest options when shopping for food…
Yet they are told there is full employment and there is no economic depression….
http://wolfstreet.com/2017/06/12/albertsons-reveals-supermarket-meltdown-aldi-lidl-deep-discounters-promise-price-war-in-stagnating-u-s-market/
We seem to have everyone trying to get what little tiny bit of profit might be available.
I am reminded of my earlier post https://ourfiniteworld.com/2015/05/06/why-we-have-an-oversupply-of-almost-everything-oil-labor-capital-etc/
The system is reacting as expected…. the competition for the shrinking pie is heating up ….margins are razor thin…
When one visits the poorer areas of the planet we can see that in action … when pennies count … … people are forced to ignore the brand messages and buy the lowest cost option.
I was at a highly rated restaurant in Toronto and revived for my 50 dollars a four ounce stake and 3 Brussels sprouts and a potato that was smaller than an egg…The person that doped it off Had blue and pink highlights and more metal in its face than a 57 Chevy
Said nothing an walked out.
Saudi Arabia Cuts U.S. Oil Exports to Work Down Global Supply Glut
Kingdom is slashing exports to a near three-decade low for this time of the year; move could reinforce OPEC’s production cuts
Saudi Arabia is slashing its U.S. oil exports to a near three-decade low for this time of the year, intensifying its efforts to reduce a global supply glut that has been pummeling crude prices.
https://www.wsj.com/articles/saudi-arabia-cuts-u-s-oil-exports-to-work-down-global-supply-glut-1497346203
Shale Output Set To Hit All Time High Next Month
http://oilprice.com/Energy/Energy-General/Shale-Output-Set-To-Hit-All-Time-High-Next-Month.html
More evidence of the stewpidity of normal humans. They’ll be gobbling this up without a second thought… the obvious will not occur to them….
shale oil guys will be saying
i am hot tonight
https://youtu.be/GOp1UgX8KTE
before shale oil become scam to whole world
I don’t understand what you are saying? Please explain further? i dont get your point?
I think what I am saying is that KSA is f789ed….
Do you really think they would be reducing exports— with the goal being to drive up the price of oil — and watch as shale oil production ramped up … replacing KSA production cuts.
KSA is surely cutting exports because they have peaked… their production is declining …. i.e. they are f789ed….
Ergo we are f789ed.
Drill Baby Drill — it would appear that all that is between us and death — is shale oil.
Yes and the IMF has the Saudi’s scheduled to be bankrupt by 2020. They can not literally afford to be cutting back on production.
good point
You have seen this chart, through 2015:
Saudi Arabia’s exports have been flat for years. They need to keep raising production, to keep exports flat. If prices are low, they really need to increase exports to get enough revenue.
U.S. shale firms more exposed to falling oil prices as hedges expire
http://www.reuters.com/article/us-usa-oil-hedges-idUSKBN1940IL?il=0
I see at least part of the problem: ” Prices are too low now for producers to lock in large volumes of future production.” It is hard to hedge at a high prices, when prices are already low.
THE BP BIBLE FOR 2016 IS OUT
http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html
Here are the important points:
1) Global oil consumption increased as it has relentlessly, now 96.6 mbpd
2) Global oil production 92.2 mbpd — that’s less than consumption, and Yes, price is down?
3) China’s oil consumption continued its relentless rise — now 12.4 mbpd
4) KSA is neck and neck with Japan for #4 consumer of oil at about 4 mbpd, didn’t quite catch up.
5) India’s consumption continues its relentless rise now at 4.5 mbpd, #3 in the world and surging.
6) US consumption also continued its rise now at 19.6 mbpd. US production lists a decline to 12.3 mbpd. (this is all liquids, remember). So consumption up, production down, price down.
7) Iran (18%) and Iraq (10%) both list strong increases in production
Thanks for posting this info.
So consumption up, production down, price down.
It is counterintuitive to people brought up on Adam Smith. But we are well into the post free-market era these days.
One thing I don’t understand as a layman is how consumption can be 4.4 mbpd higher than production and yet industry is running out of places to store the black gold. I mean, if these figures are correct, shouldn’t there be shortages?
The definition “oil” used for consumption includes a whole lot of things not included in production. Two big differences are “Natural gas liquids” and “Biofuels.” I made another comment elsewhere on this. Look at BP footnotes.
Be careful–BP uses different definitions for “oil” for production and consumption, so the numbers aren’t directly comparable. The footnote on oil production says:
* Includes crude oil, shale oil, oil sands and NGLs (natural gas liquids – the liquid content of natural gas where this is recovered separately).
Excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas.
Consumption does include all of those things shown in the footnote. The big differences are Natural Gas Liquids and Biofuels, but there are other things too.
Worldwide, the International Institute of Finance reported an increase in debt of $70 trillion, to $215 trillion between 2006 and 2016. This sounds like a huge increase, but it only amounts to a 4.0% increase per year during that period.
Are you sure is 4.0% per year? My calculation shows that it’s about { 11.8% (215/70)^(1/10)-1 }.
Try subtracting $70 trillion from $215 trillion, getting a 2006 value of $145 trillion. Another commenter made the same mistake.
You have to remember GDP and debt are compounding annual rates of growth. So 4% to the average listener seems perfectly acceptable. Until you compare it to GDP growth at 2% or less. Debt is growing twice as fast as GDP. Now we see 4% is a huge problem.
Here’s are a few charts.
http://www.mybudget360.com/global-debt-total-amount-of-debt-world-gdp-to-debt-ratios/
The global debt reckoning – Total global debt at $230 trillion. Total world debt over 300 percent annual GDP. There is no escape from a reckoning with debt markets.
I read this quite a few years ago but I seem to recall the authors claiming that sovereign debt of 90%+ was the death knell…. default was guaranteed https://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640
Time for another book — This Time is Different 2.0…. in this book they could explain that the CBs defy gravity — debt can easily triple the 90% mark — and nobody defaults… because when everyone is insolvent it is in nobody’s interest to allow a default….
Yep — this time…. is very different — never in the history of the world have we experienced such a situation.
Perhaps the authors could explain how this is not a perpetual motion machine and tell us how and when it ends?
Back some ten years ago, I realized ‘growth’ was the A No. 1 Plan, and there was no plan B.
It became clear to me, that growth would be pursued at any and all costs. Growth was the only Modus Operandi of this global socio/ economic/ political system, so at the final stages everybody would be in debt. And the debts would be just huge.. growth would be pursued at any and all costs globally
At the start of the fossil fuel supernova era, we didnt have railways, roads, trucks and ships crisscrossing the world with goods, raw materials, spares and resources. So economic growth was a good thing. Tropical fruits started to come, where none had been before. Hospitals, schools, malls, factories and sports arenas were built, where none had been before. Economic growth was a blessing.
Then one can ask, what happens when the world is full? What happens when the 7% growth rate makes the world full in a couple of decades. What happens when railways, roads, trucks, ships, hospitals, schools and sporting arenas are already everywhere? Why keep on growing, if everything is already filled, with everything?
I tried to see a way out of the growth Modus Operandi, but couldnt find any ways. Guess there still are Green Growth people, steady state people, that still try to find a way out it. But to me it became clear that growth would be pursued untill the very end. Growth at any and all costs. Untill Game Over.
Because we have passed the threshold in to the Twilight Zone, passed the point of no return, now growth will be pursued with a fervor and just utter BS cooking of the books, never seen before. What once was 90 % debt of GDP, might as well become 600%.. because we know what will happen when this jig is up, and the fat lady starts to sing
Yes Van Kent, all true, and I can see it all here in the middle of one of the few British ‘growth hubs’.
It is the only game in town.
Very good post, Van Kent. We are seeing diminishing returns on economic activity. People (in the first world) have access to all this infrastructure and communications. Everything we need for a comfortable living arrangement has already been built. People have bought all the crap they need. Everybody have enough flat screens and cars.
The potential for real economic growth is diminishing. So money gets slushed around more or less just to keep the wheels spinning a bit longer. Shale oil and renewables are good examples of investment opportunities that might give some return on some level in the ponzi scheme, but is a drag on the economy as a whole.
In physics, the virial theorem dictates that a system collapses when the negative potential energy (the mature debt) is twice the positive actual energy (the GDP, or, which is the same, the immature debt).
So, the world economy will collapse when the total MATURE world debt is over 200 percent annual GDP.
The above comment is erroneous. Here is a corrected version:
In physics, the virial theorem dictates that a system collapses when the negative potential energy (the total debt) is twice the positive actual energy (the GDP, or, which is the same, the immature debt).
So, the world economy will collapse when the total MATURE world debt is over 100 percent annual GDP.
This is indeed a very fine chart. It shows that the rate of growth in total US debt dropped way back, starting starting in the late 1980s. It has been especially low since the Great Recession. It hasn’t gotten up to 4% per year for any sustained timeperiod.
In case readers have not noticed, BP now has issued its annual update of world energy production, consumption, and reserves. The report is the 2017 version, with data through 2016. They have both a PDF version and an Excel spreadsheet version. This is a link to the page. http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html
I looked briefly at total energy consumption. World energy consumption grew by 1.0%. World population growth is generally given as about 1.1%. So energy per capita has taken a small step downward. It is hard to get much world economic growth with shrinking per capita energy consumption.
Countries with big negatives on energy consumption (not per capita) are the following:
Mexico -1.5%
Brazil -1.8%
Trinidad & Tobago -10.7%
Venezuela -5.5%
Bulgaria -5.2%
France -1.7%
Greece -2.2%
Russia -1.4%
Sweden -1.7%
Switzerland -5.5%
UK -1.7%
Qatar -2.3%
BP does not show information for small countries, such as Syria, instead listing them in groupings such as “Other Middle East.”
What’s going on in Swizterland?? It’s drop is in line with Venezuela!!
Less electronic international banking needing less electricity? 😉
I wonder on these small countries if the numbers are exactly right. Electricity is particularly difficult to assign to one country or another, because BP only looks at production, not true consumption. A drought could reduce production, but not consumption. A shutdown in nuclear plants make have the same impact. Nuclear is shown as -8.7%. Hydroelectric is also shown as -8.7%. Oil consumption fell by -5.6%. Natural gas usage is up a bit.
They switched to LED lights.
It also notes that, “Energy consumption in China grew by just 1.3% in 2016. Growth during 2015 and 2016 was the lowest over a two-year period since 1997-98.” It is hard to square this with an alleged growth rate in GDP of 6.7% in 2016 and 6.9% in 2015.
Very suspicious
I think China’s alleged economic growth rates are inflated.
Swedens population +1.5%, so energy per capita -3.1%.
The consumption includes efficiency loses. As EROEI declines what is the real decline in energy delivered per capita. I bet it’s much worse than.1%.
True. But there are a few details that make figuring anything out problematic.
First, the economy automatically rebalances away from low EROEI to high EROEI energy. That is why coal consumption increased so much between 2001 and about 2014. So the overall effect tends to be less than a person might expect.
Second, to be comparable to the growth in consumption, we need to be using “calendar year” statistics. For nuclear, nearly all of our energy costs took place years ago, but nuclear power plants continue to produce electricity. Thus, based on what happened in 2016, the calendar EROEI is extremely high. The same is true for hydroelectric. For wind and solar, energy used in 2016 for making solar and wind should be compared to all output from solar and wind during 2016. We don’t know what those amounts are. The EROEI ratio would be far lower than the model hoped-for future EROEIs we see published.
By the way, I discovered one mistake in the BP report. The report showed World energy consumption growing by 1.0%, but when I divided the 2016 amount in the report by the 2015 amount in the report, I calculated a 1.3% increase. This leads me to be suspicious that other numbers may not be correct–or may not be calculated the way I thought they might be.
My first guess is that some last minute change got into the numbers, but not into the percentage calculation. This can happen if “recalculation” is required to get the percentage amounts.
BP has been known to send out corrected reports, after it notices errors. If it is just a reported percentage that is wrong, I don’t think they would bother to correct it.
Coal production rate dropped 6.2%, but consumption only by 1.7%. Carbon Dioxide emissions flat for 3rd year, but still not dropping. So belief that CO2 emissions could drop, without economy’s collapse is still just a theory.
If we release less carbon — the economy will collapse… that is fact. Growth requires increasing burning of fossil fuels… there is no way around that.
The fact that we are flat on carbon emissions indicates that the ‘growth’ we are seeing is CB-fueled… and that the numbers are faked…
Try sticking a mouse in a jar of water… watch him struggle … as he tires watch him gasp for air… that is about where we are right now …. we know how it ends.
https://gailtheactuary.files.wordpress.com/2011/11/world-total-energy-and-real-gdp.png
It is hard to believe that coal production rate dropped 6.2%, but consumption only by 1.7%. I have read that coal stockpiles have increased, but that works in the wrong direction. Where in the world would be ever store enough coal for such a difference to occur.
I am guessing there is something wrong in BP’s numbers.
Some stats
https://www.google.fi/url?sa=t&source=web&rct=j&url=https://www.newyorkfed.org/medialibrary/media/smallbusiness/2015/Report-SBCS-2015-Nonemployer-Firms.pdf&ved=0ahUKEwiejtbejLvUAhXQbZoKHRSPCIwQFggcMAA&usg=AFQjCNGKscVkBtFDgyZImB7KKp1sMvrJNw
A whopping 72% of all US businesses are NOT profitable.
US credit card debt passed a record $1 trillion, and total US consumer credit hit a record $3.8 trillion last month.
66% of the largest companies in the US that have given estimates of their earnings for next quarter have issued “negative guidance”
Good article Gail, Thanks
So, lower interest rates may have stalled peak oil.
Fracking of shale may have stalled peak oil.
Nitrogen and water injection may have stalled peak oil.
… and the big fields are still in decline with little in the way of new discoveries.
… and decline rates exceed the amount of new oil coming on stream.
We are running out of things which delay peak oil.
Hmmmmm……
Does not look good..
Peak energy is the real issue, in my opinion. A decline in coal has about the same effect as a decline in oil consumption.
Low interest rates are the equivalent of printing money. The banks can get money from the Fed window and invest it in treasury bills at a profit ( am I currently correct? ). This bails out the banks with no political flashback. The losers are those who depend on interest income such as retirees and insurance companies.
I think this is especially true if Treasury bills are paying some interest, as they are now.
Otherwise banks need an interest rate spread, so that they can lend long and obtain funds using short term interest rates.
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This is the Zero Hedge article we should ignore.
http://www.zerohedge.com/news/2017-06-12/shale-production-will-hit-all-time-high-next-month-and-thats-just-beginning
Or should we? Interestingly shale is hitting a new all time peak. But US crude production is down 500,000bpd.
That’s the whole point. Shale can’t keep up with conventional decline rates.
Someone needs to call the SPCA… that’s not fair!
Worth while reading. The oil patch is on fire and no one is talking about it.
http://www.postpeakliving.com/files/shared/Hook-GOF_decline_Article.pdf
In conclusion, this analysis shows that the average decline rate of the giant oil fields have
been increasing with time, reflecting the fact that more and more fields enter the decline phase
and fewer and fewer new giant fields are being found. The increase is in part due to new
technologies that have been able to temporarily maintain production at the expense of subsequent more rapid decline
The low to no to negative interest rates have effectively crushed the fixed income segment of the economy. These are our modern rent seekers. In order for this segment to continue they have been rolled into the equity markets. The speculative returns have replaced earnings. The CBs know that they have to maintain values by buying excess inventory. If they don’t they destroy their own balance sheet. It’s a perfect storm of delusional thinking.
In the mean time some idiots want to force the fed to audit their books. Obviously they don’t understand the whole economy is a fraud. If it wasn’t for the QE, which is a shell game, the bus would have driven off the cliff long ago.
Asset managers are pushing shale and energy because these industries can hid there debt equity ratios with creative resource equations. So they look less speculative then Tesla they’re all the same. There is too much money with no place to go. There is no real value any more.
Another one is the auto industry. They’ve produced millions of cars depreciating in inventory. That’s not productive use.
When you step back and look at all the components something is going to crack very quickly.
just don’t forget that every dose of lower interest rates is, as you allude when you mention that the majority of the boost happens _when rates are lowered_, is a _one-time_ jolt. To get the sam buzz again one has to lower rates yet again. While there have been in recent years even some surrealistic excursion into negative interest rates, that breaks much bigger parts of the economy where once negative rates got below the ‘friction level’ of transactional overhead, entities can borrow infinite sums in a very short time and ocmpletely destroy the meaning of money and its role in the economy.
Money is the neurotransmitter in the organism of the economy. Like injecting doses of stimulants or depressants, the nervous and neural activity of the patient can be jolted or suppressed temporarily by messing with interest rates, but too much of the drug and the real signal is lost- the patient’s nervous system stops functioning in a meaningful (i.e. operating the organism to support life) and the patient is killed.
The same happens in an economy where the interest rates and generally the money is messed with too much. All these financial games are _responses_ to actual resource limits, as various sectors of the economy game the greater system to transfer resources. Sometimes this is useful: a boost of adrenaline will divert calories an dmetabolism in your body away from less-important things like knitting or poetry or mathematics, and into important things like running away from the tiger or putting out the flames of the burning house, thereby saving your life- but you cannot get the same ‘benefit’ again and again by dosing on such a drug. Likewise the economy can avoid a specific crisis (like 2008) with a dose of the drug but repeated dosing just makes the whole organism and economy sicker. in the end that too is symptomatic of resource limits and decline. On the way up there’s both no need to play such games and, even if some entities in the economy did play such games (which in the earlier phases of the rapid growth of the industrial age were properly called ‘fraud’) the rest of the organism was going strong on the fundamentals and just kept on trucking. now, the fundamentals are running out of gas and we’re turning more and more to drugs to get any kind of boost.
Agreed that without those drugs the patient would have laid down and stopped running sooner, but one must acknowledge that the drug doesnt make the patient _healthy_, it merely whips him out of bed to walk a bit, wearing him out even faster!
Great insight!
There seems to be two aspects of our economy. The ideal and the real.
The ideal is represented by money and all the financial slight of hand tricks and illusions that the high priests of the central banks can conjure up. Your comparison to drugs is so appropriate. Sorcerers use potions and drugs to create illusions. The fiat currencies that are circulated around the world are illusions of wealth. That illusion must be maintained at all costs. New spells must be created to manipulate the perception of reality. Just think how difficult it is to convince people that pieces of paper that are promises of a claim on wealth that does not exist are just as valuable as true wealth. That takes strong drugs and magic to keep the illusion from dissipating. Ideals, and I’m speaking in The platonic sense of the word, can be expanded infinitely. All you have to do is add another zero to The spreadsheet.
The real world exits within the context of the physical universe and the laws that govern it. Products are made using real natural resources. Food is grown in real soil, sun and water. Real work is accomplished using real sources of energy. The laws of physics apply to all these processes. Seven billion hungry people need to eat every day. The real world occupies finite space with finite resources.
How long will we continue to believe in the false religion of money? What new spells will the high priests of finance cast upon our feeble minds? What will they require of us? After all, we only exist to worship them.
However the reality is that because of CB polices… I live in a decent house… I have cars… I take vacations… I eat food from all around the world….
This is not an illusion – wealth is not an illusion (unless of course we are just avatars in a computer game)
I suspect these guys would agree
http://i2.cdn.cnn.com/cnnnext/dam/assets/121022042213-08-philippines-charcoal-horizontal-large-gallery.jpg
Anon, agreed. I do like these corporeal analogies for the global economy. We are certainly doing the equivalent of trying to treat a nutritional deficit by chemical means – not a recipe for long-term success.
The Nazis discovered that by giving near-starving inmates at Sachsenhausen concentration camp D-IX – a type of methamphetamine – they were temporarily rendered capable of marching in a circle for up to 90 kilometers per day without rest while carrying a 20 kilogram backpack. One suspects this didn’t do much for their longer-term chances of survival.
Peak economy concepts are putting a crimp in my vintage baseball collectibles future scope of intentionality.
http://www.zerohedge.com/news/2017-06-12/shale-production-will-hit-all-time-high-next-month-and-thats-just-beginning
Ignore the article… Let’s connect dots…
http://www.zerohedge.com/news/2017-05-27/saudi-arabia-trim-oil-exports-us-force-inventories-lower
Saudi exports are falling — only a MORE-on would believe that they are dropping because the KSA is trying to drive the price up…
Duh — they are just gonna sit tight and cut production — and watch the Shale Ponzi drive thousands of more holes into the ground and take advantage of the KSA reductions.
I don’t think so.
Let’s interpret this:
The KSA is dropping production because they surely have peaked.
The El.ders have issued a red alert — all hands on deck — drill baby drill on steroids i underway in the shale patch….
That can offset the KSA decline (and north sea decline… and other declines) for awhile …. but shale reservoirs deplete within a couple of years — and faster when you pin-cushion them….
Say your prayers varmints. And get ready to die.
HSBC: Brace for the oil, food and financial crash of 2018
80% of the world’s oil has peaked, and the resulting oil crunch will flatten the economy
https://medium.com/insurge-intelligence/brace-for-the-financial-crash-of-2018-b2f81f85686b#.z9uwvj2gd
Aging giant fields produce more than half of global oil supply and are already declining as group, Cobb writes. Research suggests that their annual production decline rates are likely to accelerate.
http://www.csmonitor.com/Environment/Energy-Voices/2013/0412/The-decline-of-the-world-s-major-oil-fields
Art Berman calls shale a retirement party….
I prefer to call it the point where we check into the hospice — just before we get shipped to the morgue.
Can we get another shot of morphine? The pain is unbearable….
Methane clathrates will save us!
Shale production may soon hit a wal
http://www.foxbusiness.com/markets/2017/06/09/shale-production-may-soon-hit-wall.html
Saudi to cut June oil supply to Asia as local demand rises:
http://www.reuters.com/article/us-aramco-oil-idUSKBN1851ZK
So they have cut the us exports and Asia as well
Saudis ‘may run out of oil to export by 2030’
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9523903/Saudis-may-run-out-of-oil-to-export-by-2030.html
That’s the broadside argument FE. Few understand that the giants and super giants accelerate decline rates as the reach their productive end. I think your right the Saudis have a problem. Why would they announce this cut in export as they enter their peak consumption period? It seems clear they can’t cover their domestic demand and maintain exports. I’m sure they saw this coming in 2000-2001 when Iraq stopped exporting to the US.
Saudi is the new Indonesia.
According to the export land model created by Jeffrey Brown the Saudi’s have decreased exports by 1.4% yearly between 2005-2015. And there was this email
https://thinkprogress.org/wikileaks-peak-oil-bombshell-saudi-arabian-reserves-overstated-by-40-global-production-plateau-3b4c68676247
FE would you stop with the elders s**t. No one is in control. There is no planned demolition, there is only reaction current developments. Can kicking will go further than you expect so don’t burn all your capital too soon.
Nobody is control?
Can you explain how interest rates ended up at record lows?
Can you explain how money has magically appeared out of nowhere to buy stocks and drive the market to record highs?
We are talking about tens of trillions of dollars.
Did you vote on any of this? I certainly didn’t.
Ah right — it’s magic – it just happened… I get it now! (not)
Of course the owners of the Fed are pulling the levers on all of this — aka the Eld.ers …. they very obviously have a plan — for instance — if they didn’t then fracking would not be happening and we would be dead long ago…
They are also reacting — that is also part of the plan — whenever they see a crack in the dam — they rush in to fill it with money …. the plan is very obviously – anything deemed to big to fail — will not be allowed to fail. They even gave us a name for it TBTF.
Remember Don’t Fight the Fed — again they told us their plan — they indicated they were going to hose down the world with money —- anyone with half a brain (and some cash) would have been loading up on assets – property – stocks — bonds — sheeeit even gold went nearly triple soon after that phrase was first spoken (wonder who came up with that at Edelman…)
But the El.ders are not gods — their plan will fail.
But in the meantime — thank them for delivering you 10 years of BAU — and LLL every single day with the knowledge that the El.ders understand the plan will fail — it was never a plan for success… it was always a plan aimed at delaying extinction.
Remember these guys? Remember those globes covered in pink depicting the British Empire?
Well they used to run the world — but then they were replaced by the El.ders…..
http://i.dailymail.co.uk/i/pix/2014/04/08/article-2599639-1CECC0B900000578-987_964x800.jpg
USA is the most successful Crown colony.HK probably #2 if you consider wtf happened in mainland China over the last 100years. Mind boggling.
The coke snorting who–re — masters who run KSA have pretty much have admitted they have peaked… and that they need to transition to a new economy…
https://cdn.shutterstock.com/shutterstock/videos/629839/thumb/1.jpg
Saudis are conducting a bait and switch with their cuts. Their IPO, borrowing, and cutting handouts to the restless populace means cutting their revenue stream would be suicidal(sorry ISIS.) The only retort you can believe from the Wahabi lobby is “Death to America.”
China’s monthly vehicle sales post first back-to-back drop since 2015
The world’s biggest auto market got a shot in the arm in 2016, growing at its fastest pace in three years, after Beijing halved the purchase tax on smaller-engined vehicles. But buyers have shied away since taxes climbed to 7.5 percent, from 5 percent, at the start of this year.
http://www.reuters.com/article/us-china-autos-sales-idUSKBN1930IM?il=0
At one time real rates were about 10% and those who thought they could gain in excess of 10% borrowed.
Now probably the real rates are negative so you you need no growth to borrow.
The decline of the world’s IQ
http://www.sciencedirect.com/science/article/pii/S0160289607000463
“It is possible that “the new eugenics” of biotechnology may evolve to counteract dysgenic fertility.”
All bad news must have a happy ending.
“It is possible that “the new joogenics” of biotechnology may evolve to counteract dysgenic fertility.”
Elon!
The Fed is only raising rates in order to lower them later…possibly into negative territory.
Can they do this? Absolutely! Global interest rates will turn negative before this is all over.
The bankers have complete control. You have to understand, the average American is a sports obsessed, celebrity worshiping idiot. Why would you possibly join them? Go your own way if you must, but never join the mob.
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‘These leaders seem to believe that QE worldwide is no longer working well enough, so it should be removed.’
Japan has been QE’ing for 30 years now …. I see no indication that they plan to stop…
The ECB continues to pound out $200 billion per year….
The US continues to recycle trillions of dollars of previous QE… who knows what else they are doing….
We need to take what the Fed chair and the franchisees say publicly with a grain of salt… they may insist QE needs to stop for various reasons…. they will never tell us what they are thinking.
But behind the scenes they will be discussing the consequences of stopping QE — i.e. interest rate rises — and they will know that a significant rise will blow up the global economy.
It is simply not possible for rates to rise by much — car sales will collapse — governments would collapse — the housing market would blow to pieces. BAU grows only because of low interest rates.
QE will continue – it must continue — but at some point it will push on a string — and it will be like gunning an engine that has burned off all it’s lubricating oil —- hoping to keep the car moving forward….
The car will stop — the engine will smoke and roar — and then it will go to pieces.
Like I have been saying at one point the laws of the physical world will over take our human conceived shenanigans…there is not enough resources to grow the system, and the system needs growth or it collapses..so it will collapse..not because we have zero resources left…you don’t need to get to that point..you only need to get to the point where there is not enough resources to grow the system and we are nearing that point (if not already reached…)
And the CBs are trying to get us as close to that edge as possible — while not falling into the abyss…. but of course at some point their balancing act fails… and we tumble and smash on the rocks below
Or in my case on the pavement in front of my hand-picked building 😉
Yeah, the frbny is gonna run out of ink, paper, and electronic digits. Please.
This guy has an interesting take
https://www.blackagendareport.com/oil_and_global_capitalist_crisis
Utter rubbish
Was there a point to it?
http://big.assets.huffingtonpost.com/50shades-giphy-9.gif