Recently, a Spanish group called “Ecologists in Action” asked me to give them a presentation on what kind of financial crisis we should expect. They wanted to know when it would be and how it would take place.
The answer I had for the group is that we should expect financial collapse quite soon–perhaps as soon as the next few months. Our problem is energy related, but not in the way that most Peak Oil groups describe the problem. It is much more related to the election of President Trump and to the Brexit vote.
I have talked about this subject in various forms before, but not since 2016 energy production and consumption data became available. Most of the slides in this presentation use new BP data, through 2016. A copy of the presentation can be found at this link: The Next Financial Crisis.1
Slide 1
Most people don’t understand how interconnected the world economy is. All they understand is the simple connections that economists make in their models.
Slide 2
Energy is essential to the economy, because energy is what makes objects move, and what provides heat for cooking food and for industrial processes. Energy comes in many forms, including sunlight, human energy, animal energy, and fossil fuels. In today’s world, energy in the form of electricity or petroleum makes possible the many things we think of as technology.
In Slide 2, I illustrate the economy as hollow because we keep adding new layers of the economy on top of the old layers. As new layers (including new products, laws, and consumers) are added, old ones are removed. This is why we can’t necessarily use a prior energy approach. For example, if cars can no longer be used, it would be difficult to transition back to horses. This happens partly because there are few horses today. Also, we do not have the facilities in cities to “park” the horses and to handle the manure, if everyone were to commute using horses. We would have a stinky mess!
Slide 3
In the past, many local civilizations have grown for a while, and then collapsed. In general, after a group finds a way to produce more food (for example, cuts down trees so that citizens have more area to farm) or finds another way to otherwise increase productivity (such as adding irrigation), growth at first continues for a number of generations–until the population reaches the new carrying capacity of the land. Often resources start to degrade as well–for example, soil erosion may become a problem.
At this point, growth flattens out, and wage disparity and growing debt become greater problems. Eventually, unless the group can find a way of increasing the amount of food and other needed goods produced each year (such as finding a way to get food and other materials from territories in other parts of the world, or conquering another local civilization and taking their land), the civilization is headed for collapse. We recently have tried globalization, with exports from China, India, and other Asian nations fueling world economic growth.
At some point, the efforts to keep growing the economy to match rising population become unsuccessful, and collapse sets in. One of the reasons for collapse is that the government cannot collect enough taxes. This happens because with growing wage disparity, many of the workers cannot afford to pay much in taxes. Another problem is greater susceptibility to epidemics, because after-tax income of many workers is not sufficient to afford an adequate diet.
Slide 4
A recent partial collapse of a local civilization was the collapse of the Soviet Union in 1991. When this happened, the government of the Soviet Union disappeared, but the governments of the individual states within the Soviet Union remained. The reason I call this a partial collapse is because the rest of the world was still functioning, so nearly all of the population remained, and the cutback in fuel consumption was just partial. Eventually, the individual member countries were able to function on their own.
Notice that after the Soviet Union collapsed, the consumption of coal, oil and gas collapsed at the same time, over a period of years. Oil and coal use have not come back to anywhere near their earlier level. While the Soviet Union had been a major manufacturer and a leader in space technology, it lost those roles and never regained them. Many types of relatively high-paying jobs have been lost, leading to lower energy consumption.
Slide 5
As nearly as I can tell, one of the major contributing factors to the collapse of the Soviet Union was low oil prices. The Soviet Union was an oil exporter. As oil prices fell, the government could not collect sufficient taxes. This was a major contributing factor to collapse. The collapse from low oil prices did not happen immediately–it took several years after the drop in oil prices. There was a 10-year gap between the highest oil price (1981) and collapse (1991), and a 5-year gap after oil prices dropped to the low 1986 price level.
Slide 6
Venezuela is often in the news because of its inability to afford to import enough food for its population. Slide 3 shows that on an inflation-adjusted basis, world oil prices hit a high point first in 2008, and again in 2011. Since 2011, oil prices slid slowly for a while, then began to slide more quickly in 2014. It is now nine years since the 2008 peak. It is six years since the 2011 peak, and about three years since the big drop in prices began.
One of the reasons for Venezuela’s problems is that with low oil prices, the country has been unable to collect sufficient tax revenue. Also, the value of the currency has dropped, making it difficult for Venezuela to afford food and other products on international markets.
Note that in both Slides 4 and 6, I am showing the amount of energy consumed in the countries shown. The amount consumed represents the amount of energy products that individual citizens, plus businesses, plus the government, can afford. This is why, in both Slides 4 and 6, the quantity of all types of energy products tends to decline at the same time. Affordability affects many types of energy products at once.
Slide 7
Oil importing countries can have troubles when oil prices rise, similar to the problems that oil exporting countries have when oil prices fall. Greece’s energy consumption peaked in 2007. One of Greece’s major products is tourism, and the cost of tourism depends on the price of oil. When the price of oil was high, it adversely affected tourism. Exported goods also became expensive in the world market. Once oil prices dropped (as they have done, especially since 2014), tourism tended to rebound and the financial situation became less dire. But total energy consumption has still tended to decline (top “stacked” chart on Slide 7), indicating that the country is not yet doing well.
Slide 8
Spain follows a pattern similar to Greece’s. By the mid-2000s, high oil prices made Spain less competitive in the world market, leading to falling job opportunities and less energy consumption. Since 2014, very low oil prices have allowed tourism to rebound. Oil consumption has also rebounded a bit. But Spain is still far below its peak in energy consumption in 2007 (top chart on Slide 8), indicating that job opportunities and spending by its citizens are still low.
Slide 9
We hear much about rising manufacturing in the Far East. This has been made possible by the availability of both inexpensive coal supplies and inexpensive labor. India is an example of a country where manufacturing has risen in recent years. Slide 9 shows how rapidly energy consumption–especially coal–has risen in India.
Slide 10
China’s energy consumption grew very rapidly after it joined the World Trade Organization in 2001. In 2013, however, China’s coal consumption hit a peak and began to decline. One major contributor was the fact that the cheap-to-consume coal that was available nearby had already been extracted. The severe problems that China has had with pollution from coal may also have played a role.
It might be noted that the charts I am showing (from Mazamascience) do not include renewable energy (including wind and solar, plus burned garbage and other “renewables”) used to produce electricity. (The charts do include ethanol and other biofuels within the “oil” category, however.) The omission of wind and solar does not appear to make a material difference, however. Figure 1 shows a chart I made for China, comparing three totals:
(1) Opt. total (Optimistic total) – Totals on the basis BP computes wind and solar. Intermittent wind and solar electricity is assumed to be equivalent to high quality electricity, available 24/7/365, produced by fossil fuel electricity-generating stations.
(2) Likely totals – Wind and solar are assumed to replace only the fuel that creates high quality electricity. The amount of backup generating capacity required is virtually unchanged. More long distance transmission is needed; other enhancements are also needed to bring the electricity up to grid-quality. The credits given for wind and solar are only 38% as much as those given in the BP methodology.
(3) From chart – Mazamascience totals, omitting renewable sources of electricity, other than hydroelectric.
Figure 1. China energy consumption based on BP Statistical Review of World Energy 2017.
It is clear from Figure 1 that adding electricity from renewables (primarily wind and solar) does not make much difference for China, no matter how wind and solar are counted. If they are counted in a realistic manner, they truly add little to China’s energy use. This is also true for the world in total.
Slide 11
If we look at the major parts of world energy consumption, we see that oil (including biofuels) is the largest. Recently, it seems to be growing slightly more quickly than other energy consumption, perhaps because of the low oil price. World coal consumption has been declining since 2014. If coal is historically the least expensive fuel, this is likely a problem. I have not shown a chart with total world energy consumption. It is still growing, but it is growing less rapidly than world population.
Slide 12 – Note: Energy growth includes all types of energy. This includes wind and solar, using wind and solar counted using the optimistic BP approach.
Economists have given the false idea that amount of energy consumption is unimportant. It is true that individual countries can experience lower consumption of energy products, if they begin outsourcing major manufacturing to other countries as they did after the Kyoto Protocol was signed in 1997. But it doesn’t change the world’s need for growing energy consumption, if the world economy is to grow. The growth in world energy consumption (blue line) tends to be a little lower than the growth in GDP (red line), because of efficiency gains over time.
If we look closely at Slide 12, we can see that drops in energy consumption tend to precede drops in world GDP; rises in energy consumption tend to precede rises in world GDP. This order of events strongly suggests that rising energy consumption is a major cause of world GDP growth.
We don’t have very good evaluations of GDP amounts for 2015 and 2016. For example, recent world GDP estimates seem to accept without question the very high estimates of economic growth given by China, even though their growth in energy consumption is very much lower in 2014 through 2017. Thus, world economic growth may already be lower than reported amounts.
Slide 13
Most people are not aware of the extreme “power” given by energy products. For example, it is possible for a human to deliver a package, by walking and carrying the package in his hands. Another approach would be to deliver the package using a truck, operated by some form of petroleum. One estimate is that a single gallon of gasoline is equivalent to 500 hours of human labor.
“Energy consumption per capita” is calculated as world energy consumption divided by world population. If this amount is growing, an economy is in some sense becoming more capable of producing goods and services, and thus is becoming wealthier. Workers are likely becoming more productive, because the additional energy per capita allows the use of more and larger machines (including computers) to leverage human labor. The additional productivity allows wages to rise.
With higher incomes, workers can afford to buy an increasing amount of goods and services. Businesses can expand to serve the growing population, and the increasingly wealthy customers. Taxes can rise, so it is possible for governments to provide the services that citizens desire, such as healthcare and pensions. When energy consumption per capita turns negative–even slightly so–these abilities start to disappear. This is the problem we are starting to encounter.
Slide 14 – Note: Energy percentage increases include all energy sources shown by BP. Wind and solar are included using BP’s optimistic approach for counting intermittent renewables, so growth rates for recent years are slightly overstated.
We can look back over the years and see when energy consumption rose and fell. The earliest period shown, 1968 to 1972, had the highest annual growth in energy consumption–over 3% per year–back when oil prices were under $20 per barrel, and thus were quite affordable. (See Slide 5 for a history of inflation-adjusted price levels.) Once prices spiked in the 1973-1974 period, much of the world entered recession, and energy consumption per capita barely rose.
A second drop in consumption (and recession) occurred in the late 1970s and early 1980s, when easy-to-adopt changes were made to cut oil usage and increase efficiency. These included
(a) Closing many electricity-generating plants using oil, and replacing them with other generation.
(b) Replacing many home heating systems operating with oil with systems using other fuels, often more efficiently.
(c) Changing many industrial processes to be powered by electricity instead of burning oil.
(d) Making cars smaller and more fuel-efficient.
Another big drop in world per capita energy consumption occurred with the partial collapse of the Soviet Union in 1991. This was a somewhat local drop in energy consumption, allowing the rest of the world to continue to grow in its use of energy.
The Asian Financial Crisis in 1997 was, in some sense, another localized crisis that allowed energy consumption to continue to grow in the rest of the world.
Most people remember the Great Recession in the 2007-2009 period, when world per capita growth in energy consumption briefly became negative. Recent data suggests that we are almost in the same adverse situation now, in terms of growth in world per capita energy consumption, as we were then.
Slide 15
What happens when growth in world per capita energy consumption slows and starts to fall? I have listed some of the problems in Slide 15. We start seeing problems with low wages, particularly for people with low-skilled jobs, and the type of political problems we have been experiencing recently.
Part of the problem is that countries with a high-priced mix of energy products start to find their goods and services uncompetitive in the world marketplace. Thus, demand for goods and services from these countries starts to fall. Greece and Spain are examples of countries using a lot of oil in their energy mix. As a result, they became less competitive in the world market when oil prices rose. China and India were favored because they had a less-expensive energy mix, favoring coal.
Slide 16
Slide 16 shows the kinds of comments we have been hearing in recent years, as prices have recently bounced up and down. It is becoming increasingly clear that no price of oil is now satisfactory for all participants in the economy. Prices are either too high for consumers, or too low for the producers. In fact, prices can be unsatisfactory for both consumers and producers at the same time.
On Slide 16, oil prices show considerable volatility. This happens because it is difficult to keep supply and demand exactly balanced; there are many factors determining needed price level, including both the amount consumers can afford and the costs of producers. The bouncing of prices up and down on Slide 16 is to a significant extent in response to interest rate changes, and resulting changes in currency relativities and debt growth.
We are now reaching a point where no interest rate works for all members of the economy. If interest rates are low, pension plans cannot meet their obligations. If interest rates are high, monthly payments for homes and cars become unaffordable for customers. Also, high interest rates tend to raise needed tax levels for governments.
Slide 17
All of these problems are fairly evident already.
Slide 18
The low level of energy consumption growth is of considerable concern. It is this low growth in energy consumption that we would expect to lead to low wage growth worldwide, especially for the non-elite workers. Our economy needs more rapid growth in energy consumption to provide enough tax revenue for all of our governments and intergovernmental organizations, and to keep the world economy growing quickly enough to prevent large debt defaults.
Slide 19
Economists have confused matters for a long time by their belief that energy prices can and will rise arbitrarily high in inflation-adjusted terms–for example $300 per barrel for oil. If such high prices were really possible, we could extract all of the oil that we have the technical capacity to extract. High-cost renewables would become economically feasible as well.
In fact, affordability is the key issue. When the world economy is stimulated by more debt, only a small part of this additional debt makes its way back to the wages of non-elite workers. With greater global competition in wages, the wages of these workers tend to stay low. The limited demand of these workers tends to keep commodity prices, especially oil prices, from rising very high, for very long.
It is affordability that limits our ability to grow endlessly. While it is possible to argue that more debt might help raise the wages of non-elite workers in a particular country, if one country adds more debt, other currencies around the world can be expected to rebalance. As a result, there would be no real benefit, unless all countries together could add more debt. Even this would be of questionable value, because the whole effort relates to getting oil and other commodity prices to rise to an adequate level for producers; we have already seen that there is no price level that is satisfactory for both producers and consumers.
Slide 20
These symptoms seem to be already beginning to happen.
Note:
[1] This presentation is a little different from the original. The presentation I am showing here is entirely in English. The original presentation included some charts in Spanish from Energy Export Data Browser by Mazama Science. With this database, a person can quickly prepare energy charts for any country in a choice of seven languages. I encourage readers to “look up” their own country, in their preferred language.
In this write-up, I include more discussion than in my original talk. I also added Slides 13 and 14, plus Figure 1.
Stay Classy FSOA! (Cringe)
http://imgur.com/a/BXeFb
Wac(k)o, Texas, y’all
Rents have risen so high in South Florida, an Old Timer converted his old flat bed pickup into a makeshift dwelling on wheels. Used plywood and has a bed, “kitchen”, “compost poddy” with vent pipe, and pretty much maintains a low profile.
We will more of this as to time goes on….few elder aged folks hanging around the airport terminal. Safe and air conditioned with bathroom facilities.
Believe property values jumped like 15% in one year here from already escalated insane values!🐩
So, if rents are so high, who is paying them? That must mean there are jobs, no? “Supply and demand” and all?
Occupancy rate in Vancouver BC is very near 100%, and everyone is whining about the high rent. But consider the alternative: if rents are low, that must mean demand is low, which must mean there aren’t many jobs.
This is similar to what Gail keeps telling us about oil prices. There is no “goldilocks zone” any more. Sign of the times.
Know a social worker here….unbelievable stories of folks struggling to make ends meet.
he average apartment rent in Broward County for November was $1,553, up 8 percent from a year earlier, according to Reinhold P. Wolff Economic Research in Oakland Park. Palm Beach County’s average rent was $1,520, 6 percent higher than a year earlier. Rents in Miami-Dade County rose 5 percent to $1,609.
Bloomquist said South Florida consumers who buy homes will have less expensive monthly payments than those who rent.
“But the problem can be coming up with that down payment,” he said. “As a renter, it’s hard to save for the down payment, and you’re stuck in that cycle where rent in unaffordable.
“That leaves average wage earners out in the cold.”
Electric bills are a big expense..one MUST have A/C here on…bills are very high, along with water, ect
Solution — people can buy a car with no money down … so they should just live in a car.
No wonder SUVs are so popular these days
https://m.youtube.com/watch?v=rWz3ugOHQqo
http://imgur.com/a/GaQ2U
We’ve raised Generation Hopeless: millennials who lack basic life and workplace skills. And it’s a big issue
http://www.news.com.au/finance/business/weve-raised-generation-hopeless-millennials-who-lack-basic-life-and-workplace-skills-and-its-a-big-issue/newsstory/f3256c05c19c356002103eb50e50cee1
I think all of the video games and internet watching has created a real problem. According to the article:
I’ve had some weird encounters recently with people who seem to lack basic social-interaction skills.
Outwardly they don’t look odd, even seem bright, but they seem not to connect in any normal way. Also, rather selfish.
They need a sharp slap on the head to wake them up – in the real world, not the virtual one.
When you do not have, you cannot lose.
This is Cr@zY!
A 2016 study estimated that global fossil fuel subsidies were $5.3 trillion in 2015, which represents 6.5% of global GDP.[3] The study found that “China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion).”[3] The authors estimated that the elimination of “subsidies would have reduced global carbon emissions in 2013 by 21% and fossil fuel air pollution deaths 55%, while raising revenue of 4%, and social welfare by 2.2%, of global GDP.”[3] According to the International Energy Agency, the elimination of fossil fuel subsidies worldwide would be the one of the most effective ways of reducing greenhouse gases and battling global warming.[4] In May 2016, the G7 nations set for the first time a deadline for ending most fossil fuel subsidies; saying government support for coal, oil and gas should end by 2025.
According to the OECD, subsidies supporting fossil fuels, particularly coal and oil, represent greater threats to the environment than subsidies to renewable energy.
Fossil-fuel consumption subsidies were $409 billion in 2010, oil products being half of it. Renewable-energy subsidies were $66 billion in 2010 and will reach $250 billion by 2035, according to IEA
Through a combination of federally funded geologic research beginning in the 1970s, public-private collaboration on demonstration project and R&D priorities, and tax policy support for unconventional technologies, the federal government played a key role in the development of shale gas in the United States.
Just the FACTS, ….DANG….its different than just posting an opinion.
https://en.m.wikipedia.org/wiki/Energy_subsidies
https://2.bp.blogspot.com/-dOvjtIC0nwg/WVp-UuD1LDI/AAAAAAAAwVY/u0a0chvcCLEv_4dHfUY7kPPEnbKZyGC3wCLcBGAs/s640/Screenshot%2B2017-07-03%2Bat%2B7.26.16%2BAM.png
This concentration of people, centralisation of power, and collection of money to fewer and ever larger centres of complexity and duplicity surely presages the end of these times.
The first stage of collapse must be the final desperate cowering of the masses and giving of their last freedoms to their lying gods of money before then realising their folly. The enemy was always in full sight, and was never some series of MSM bogeymen. There is one common denominator/country in all recent conflicts, and it isn’t Russia.
Then comes the decentralisation/collapse of these structures and the diaspora to the deserted and degraded bad-lands. Now the reality of peak population begins. If Gail is correct, and as some commentators here predict, the final diversion and division of the steeple is already being set in motion.
Sheeple 🙂 … tho the steeple has divided plenty in the past!!
That is the whole founding purpose of the senate to represent that interests of the geographies regardless of population. The house represents the interests of the people. Well such as it is….
So what is your point?
How about talking about taxes paid, instead? Fossil fuels are the biggest tax payers. Admittedly, low income people get subsidies for their fuel bills from time to time. Is that so terrible? If fossil fuels paid less taxes, fewer offsets to these taxes (“subsidies”) would be needed. Other subsidies are for things like research on Carbon Capture and Storage.
As far as I am concerned, this is a complete non-issue.
Without fossil fuels, there is no way that renewables could get the subsidies that they get. Renewables pay a lot less taxes, and relative to revenue, their subsidies are much higher.
For what it’s worth, I’ve been banned from steve ludlum’s economic undertow (not too big of a deal, he has been in decline for awhile), as well as other unrelated internet forums, as well as my posts are being removed from reddit collapse. Surprised that I’m still getting through here.
Although I’m not a conservative, I’m begging you liberals to understand that this is not going to be a walk in the park. People are going to start acting nasty, it’s already happening. Your vision of the kumbaya globalized world has already failed! I don’t see what’s so hard about that to understand.
Who are you referring to when you say, “Your vision of the kumbaya globalized world has already failed”?
Dolph, OFW is a distill collection of folks that can imagine all the horrors of the coming events. That some are preparing by farming doesn’t mean they lack insight and imagination.
http://imgur.com/a/fbT5M
That is right that is why we must take action now.
Action?
Yea, like learn how to supply your own food. Learn how to get by with less. Learn to live without “the economy.” Learn how to preserve food. Learn how to heat your house without the grid. Learn how to take control of your health. Learn how to work closely with others, without a hierarchy or a paycheque.
There’s lots to learn. I’ve been working at it for fifteen years, and I’m still learning.
Nah…. why learn all that when you just need to learn how to use one of these…
https://armalite.com/files/2015/03/M15TAC16.png
Then enslave the peasants and create a kingdom?
Uhm… ammunition? Yea, you’ll do fine until the ammo runs out, or until someone bigger and badder decides to come and take all your guns and ammo.
Guns attract guns. Violence attracts violence. Since you’ve announced your preference and your location here, good luck to you!
PS: I have an 1838 flint-lock muzzle-loader over the fireplace. I can melt lead and we have saltpeter and sulphur. Who needs Remington? 🙂
Yes of course —- there is always someone bigger and badder…. that’s why I prefer the car into rock cut solution
I will not till the warlords field — I will not shine his boots — I will not provide women for his pleasure.
As for ammo… that will not run out for quite a long time https://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/#3f512b06624b
I’m kinda going the other way—-
I’m still growing food, gathering mushrooms and berries, catching fish, but have moved off the 20 acres, no more horses, chickens, llamas, donkeys, or mules.
I just can’t push that much through life.
Still backpacking and surfing at 70, but fixing fence, wells, and all the entropy of 20 acres is too much.
But getting simpler–
I hear you.
But there are young people who can do such things, in exchange for your wisdom, and perhaps a formal equity stake or agreement that they can continue to live on and work your property indefinitely.
That’s my “retirement plan.”
An annual vegetable garden, berry bushes, vines, fungi, and some fruit and nut trees. An acre is a lot of space. Gardening for over 50 years and still learning every day. Take care of the garden and the garden takes care of you – great exercise. Elderly parents to assist. No domestic animals, just wildlife to watch and enjoy.
Yea, grayfox!
A fossil-fuel problem: I opened the gate to mow a hectare of unruly weeds that were invading the garden. The tractor broke down, and I started working on it. Condensation had rusted the bottom of the fuel tank, and our home-brew biodiesel was very effective at loosening it and clogging the fuel filter. It got late, and I forgot to close the gate. The geese got in and ate a row of young squash and pepper plants.
Now I could have scythed that entire field, raked it into shooks, and fed it to goats all next winter, and the geese would not have gotten in. But because we have this tractor, we have to use it!
http://inspirationboost.com/wp-content/uploads/2012/05/8-Lao-Tzu-Quotes.jpg
(By the way, this Tau Tzu chap probably never existed and was made up by the ancient Chinese as a sort of personification of even more ancient wisdom, but he’s a lot more quotable than most real people are.)
https://4.bp.blogspot.com/-a-WwxJ9pVSs/WVqE62PNsxI/AAAAAAAAwVg/8Oj3Vcx-njc7APpCFn7q1WFrt_xTuQmLwCLcBGAs/s640/160127164121-donald-trump-aug-rally-exlarge-169.jpg
http://www.notable-quotes.com/a/atheism_quote.jpg
my fav quote about religions
Definitely a good one! I also like Mark Twain; “Religion began when the first con man met the first fool”
“By the way, this Tau Tzu chap probably never existed and was made up by the ancient Chinese as a sort of personification of even more ancient wisdom.”
Just like Jesus!
(only without the cosmic Jewish zombie trick)
Personification of ancient wisdom is perfectly fine in my book. It makes little difference if the alleged people lived or not.
We need to be able to pass on wisdom from generation to generation.
just like jesus christ and god
It’s a bit like the sayings, the Hadith, of the Prophet Mohammed, as also those of Ali: it’s generally recognised that they are merely a convenient label for whatever bit of wisdom someone wanted to put around, with the necessary sanction of a revered name.
Certainly, the sayings and the actual career of the Prophet do not align very well!
On the whole, it’s best for religions to keep their ‘prophets’ mysterious and not let too many facts get out!
In the Middle East there is a whole tradition of ‘Sayings’ of Jesus, and stories about him, which would surprise most Christians. No doubt all made up as well. 🙂
But Mohamed is a historical figure.
Jesus is not part of the historical record, and the Romans were good historians.
Duncan, I find Crossan’s books most convincing that there was a historical Jesus.
https://www.johndominiccrossan.com/The%20Historical%20Jesus.htm
A Jesus far different than the biblical Jesus and far more appealing, at least to me.
Crossan paints Jesus message as for the little person and so it was opposed tooth and nail by the owning class, just as it would be today.
There was healing but no super natural happenings rather mental health healing in the context of brutal Roman (owning class) oppression.
Nonsense, a Roman historian recorded his impression on seeing Jesus.
Simple really….when the world economy collapses everything shuts down…the end….were
talking about grids down all over the world and 7.5B people dropping like f*** flies in
short order…the collapse will be absolutely horrible..There is no collapse or horror movie
ever produced that has even come close to imagining what the collapse of BAU might look
like… I’m talking about every corporation and every social program going bankrupt at once.
I’m talking about people eating people. I’m talking about the worst catastrophe to ever
happen in the history of mankind, and WILL ever happen. Nothing has ever, or will ever
come close. (Meadows 1972) (Ehrlich 2013) (Motesharrei 2012)
Get a grip cliff. Tomorrow is another day. The endless fear mongering is just boring and tiresome. Jump in the storage container with FE and give us a call in two months.
We really doing know precisely what will happen. We know that in prior collapses, most people died in epidemics.
They need some massive distraction soon or they will be losing their heads literally. They know that. That is why the war insanity is coming to the surface and is so blatant. Desperation. They know Americans won’t support another war. Scary to consider what they might do to get everyone to fall back in line..
States yanking electric-car incentives and slapping on new fees to pay for infrastructure
http://www.cnbc.com/2017/07/03/states-yank-electric-car-aid-add-new-fees-to-pay-for-infrastructure.html
U.S. auto sales fall for fourth straight month in June
http://www.reuters.com/article/us-autos-sales-usa-idUSKBN19O1PJ?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29
Electric cars use the road. They should pay taxes for that privilege.
85,000 people apply for just 30 banking jobs in Italy
https://www.dailysabah.com/economy/2017/07/04/85000-people-apply-for-just-30-banking-jobs-in-italy
Where my family live in Spain, a car factory (VW) advertised about 40 jobs: 5,000 applicants in only the first day. And that’s a ‘wealthy’ region in the North.
in my country 230,000 thousand people apply for 368 jobs
http://www.hindustantimes.com/india/phd-holders-among-23-lakh-applicants-for-peon-jobs-in-up/story-OqHzHbvo16gUN2DfTkfYlI.html
Yes, you win!
Strange, we always had high unemployment here. Growing up it was over %30. Now, we import people from the Philippines to serve fast food.
23 lakh is 2,300,000 !
Wow! I saw the link in your next comment.
Wow!
Excellent article as usual, Gail. Seeing that chart of India makes me appreciate more FE’s BURN MOAR COAL NOW! philosophy. Does anyone want to volunteer to work for the “wage” we pay gasoline? I think that works out to no more than a penny an hour?! What a steal!
I am afraid you are correct.
Free Stream Movie “The Survivalist” 2015
http://wowmovie.me/watch-the-survivalist2-2015-online-full-free-hd
This is how you beat COLLAPSE! (MUST WATCH)
Thanks for sharing. I especially enjoyed the final words in the clip:
“I just try to be the change I want to see. Instead of waiting for government to make the change, or instead of voting for someone make the change. I try to be the change.”
– Panagiotis Kantas, Co-founder of “Free and Real”
This is what matters most on an individual level. Embodying the change you wish to see also sets you on the path to genuine leadership.
My heart goes out to those Greek people but seeing that mitre saw in action turned me off. For once I would like to see a video of a group like this with no electricity.
I agree. Hand tools are power tools – I even use a hand drill, beautiful to use and teaches patience, which I generally lack !
It’s all a bit of a middle class fantasy, and certainly not ‘sustainable’ but those Greeks are much better than my younger relations in Spain, sitting around whining, playing with their i-gadgets, calling themselves ‘workers’ and saying ‘Capitalism is dead, time for the real Left’, when, of course, after the ‘revolution’ they will get highly-paid state jobs with short days and long holidays (every Spaniards dream) and still be ‘radical.’
Just spongers who want it all done for them.
Free love in a yurt in Greece sounds quite good to me. Concerned we didn’t see any wine though……:)
On Free Love, one of the comments on the clip (in Greek) asks if he can join them for the summer because it must be one big partouza (orgy in Greek) lollllll!
http://s2.quickmeme.com/img/42/4266c634657917c478869b4ad421c378b91162ac16d15aaa901621f201692a7d.jpg
A few articles CONFIRMING the correctness of your views :
https://srsroccoreport.com/warning-the-global-oil-gas-industry-is-cannibalizing-itself-to-stay-alive/ and
https://srsroccoreport.com/dominoes-begin-to-fall-bhp-chairman-says-20-billion-shale-investment-mistake/
https://www.linkedin.com/pulse/american-energy-freedom-through-ssp-mike-snead?trk=mp-reader-card
SPS off world resources for growth.
Continuing president Trump’s program of American energy dominance.
“Let Mike Pence be the reincarnation of Herbert Hoover. This shit is not funny anymore.”
Folks, you don’t understand. You have no idea who runs the world. If you did, heads would have been chopped off 40 years ago.
It’s too late. You have to realize that most people in the world today are primitives, with less real brainpower and capacity than stone age hunters, let alone the denizens of all great civilizations past. And this great dumbing down was actually part of the plan, because it was the only way to get people to accept serfdom as the modern world declined.
In general, people are interested in three things:
1) intercourse
2) food
3) entertainment and sports
That’s all that motivates human beings now. You guys keep waiting for some mad max collapse without realizing that in many ways things have already collapsed. We are already playing out the endgame right now. We already live in a fake world.
So why not join the fun? Throw away all of your charts and graphs. Take your clothes off and take some pics and post them online. And then head down to your local fast food joint and grab some food. And then watch the tv tonight.
Stone age hunters were in fact, quite smart. Figuring out how to obtain food and cook it, as well as keeping track of what food might be available when and where, would take a lot of brain power. I have been told that human brains were physically larger then. So while your statement “less real brainpower and capacity than stone age hunters” sounds inappropriate, it might actually be true for nearly all of us. I would not use the term “primitives” though.
You might be right that the concentration of interest in the three areas you list (plus perhaps drugs) may already represent a kind of collapse.
According to Carl Sagan (Broca’s Brain), Lord Byron had the largest ever brain measured, and it has been steadily declining since.
Some scientists think it has to do with more specialization and less generalization. I agree that hunter-gatherers had to be extreme generalists, whereas someone who sits in a cubicle and writes code for 30 years is a pretty extreme specialist.
I do think small farming for a living is about the most general thing one can do these days. (I’m not talking about “hobby farmers” who grow a little this or that while living off their investments. I’m talking about people who don’t eat if they make the wrong decisions.)
According to Carl Sagan (Broca’s Brain), Lord Byron had the largest ever brain measured, and it has been steadily declining since.
That’s what happens to brains when you keep them in a pickle jar!
I keep looking at these things, thinking to myself about how — when I eventually retire — I will live on substantially less income than I do now. I will also be using substantially less energy than I do now. I think, “is this such a bad thing?” and of course personally it is a good thing.
But then I realize that my productivity will go down by more than half (and THAT assumes I retire into a part-time 1000 hour per year consulting position, which is higher productivity relative to others who retire), and my consumption of consumer goods will go down by more than the difference between my current salary and my pension, because I won’t be buying a lot of stuff (like a new house, or a college education for myself or my kids who will already be done with that stuff by then) to be paid off over the next 30 years, increasing the market for that sort of stuff. I might be spending more money on travel and vacation like stuff (if I’m lucky), but on the whole my personal contribution to economic growth will be sharply negative. Multiply that sort of thing by a lot of people and it would look an awful lot like an economic collapse.
And then I think — is it the case that this modern western idea of retirement and a life beyond economic productivity is predicated upon lots of young people picking up my slack, and perhaps before the whole “peak oil” thing works itself out that something more fundamental like that — i.e. aging demographics — will become more prominent? What if the next 20-50 years of the West follows the last 20+ years of Japan, and for basically the same reasons? Given that your recent posts on how low interest rates have delayed “peak oil” as it was understood a few decades ago, is this really an energy issue (i.e. energy is the cause of economic trends) or is it perhaps more a demographics issue (i.e. aging demographics affect energy consumption and interest rates and is the cause of both energy and economic trends)?
I think retirement requires a growing economy. If growth stops the prospects of retirement also stop. Sounds a bit like the “End Of More”.
In short yes, this has been answered here thousands times already, the core age group is not going to accelerate or stabilize demand, in fact exactly to the contrary, this encompasses most of of the developed and emerging economies (without Africa).
The slump has started in many places, China would enhance it by mid 2020s,
check the econimica.blogspot.com
we will be following in the footsteps of Japan check out this article for what retirement looks like in Japan http://www.cnbc.com/2016/03/27/japans-elderly-turn-to-life-of-crime-to-ease-cost-of-living.html
Committing crimes to get free room, board, and medical care sounds like a perfectly rational approach to me. The other inmates are likely to be folks like yourself.
I understand that something of that sort goes on among the homeless in this country, at least according to a police officer who testified when I was a juror in a trial. If the homeless want to have cover, they can commit some small crime and end up in jail.
This was common during the Irish Famine….
Bruce, you are one of the fortunate ones, with a pension and savings. Travel more, spend more, burn more FF…it is your responsibility.
There is definitely a demographic component to our problem. (Remember, I am an actuary by background, but not a “life insurance and pension” actuary.)
There are really two kinds of pensions:
(1) The allegedly pre-funded ones, in which the actuary puts together assumptions about stock market returns, interest rate returns, retirement patterns, employer contributions, and perhaps a few other things.
(2) Government plans, which are pretty much not pre-funded. The plan is that, in each year, the taxes the young people pay will cover the benefits that the older people receive. If there is ever a problem with too few young people relative to old people, the plan (more or less) is to reduce the benefits for the old people, to what the young people can afford.
The actuaries who put these programs together did not understand that in a finite world, you simply cannot expect that economic growth rates, and interest rates, (and for that matter inflation rates) won’t go on at the same level forever. In a finite world, they all head downward. Eventually, the whole system is likely to collapse. I expect that to some extent the life/pension actuaries depended on the economists, who also never figured out that we could not rely on past patterns, indefinitely. Economists tend to follow the desires of politicians. If they expect to be paid to give economic forecasts, they cannot give forecasts that their bosses would not like.
Now, we have a problem because the Post World War II baby boomers are retiring. This is a big bulge of people who are retiring. The US Social Security actuaries tried to do some pre-funding, because of this known problem, but because the US government budget is on a pay as you go basis, all of these extra funds have already been spent (on wars, etc.). All that is left of the pre-funding is governmental debt, saying that the government will pay part of the cost of some of these benefits, rather than all of the cost coming from “contributions” (they are not called “taxes”) from current workers.
Neither of these programs are working out as planned. The pensions are nearly all badly underfunded. The government programs either require big tax increases, or a cut in benefits. The younger generation is not growing very rapidly, and their wages tend to be low. It becomes difficult to collect enough taxes from them. Rising Social Security (government pension) and Medicare (healthcare for the elderly) costs are part of what makes it had to balance the budget each year. This is one reason I worry that one of the bottlenecks we need to pass through in the US each year is getting a suitable budget (or continuing resolution) passed, as well as the necessary increase in the debt ceiling. If this doesn’t happen, the system would seem to be subject to collapse.
(Of course, other things, such as selling securities bought under QE could cause the system to collapse.)
I think that we would be very lucky to follow the last 20 years in Japan. I was just visiting Japan a few weeks ago. They have been able to keep many of the older people employed. They have also cut back benefits quite a bit, for quite a few people (the ones who could not afford to contribute for the full number of years (30?). The government seems to be using a huge amount of government debt to fund “make work” programs for a lot of citizens, keeping the unemployment rate very low. As long as they can keep the plan going, their plan sort of works. Unfortunately, Japan’s debt is already incredibly high. Somehow, they are able to keep raising debt levels, keeping the system going.
I am afraid that the result will be much more like a Ponzi Scheme collapsing, than the Japan situation.
Oh shucks renewables don’t work in the real world after all. Thank goodness we have Elon’s world to bail us out.
http://euanmearns.com/el-hierro-june-2017-performance-update-gdv-completes-two-years-of-operation/
Elons world—Suddenly I have an idea for a new theme park
Thanks JT…you can share my millions
I am afraid we may have hit peak Tesla:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/07/02/Tesla%20model%20x%20sales_0.jpg
Tesla is squealing something about battery delivery problems. Looks like cobalt production is tapped out.
I wonder if that is just smoke and mirrors and the real problem is demand. Gas is back down under $2 where I’m at. That could indicate a general lack of demand, and/or disincentivize people to “go electric”.
And so many people were buying electric cars that something had to be done about it!!!
Ha ha ha ha ha ha ha ha…. you are kidding right?
Hey, 11,000 vehicles! That’s incredible! 😛
Toyota is scared!
Or perhaps because they have run out of Green Groupie MOREons to buy these ridiculous toxic junk heaps… particularly since governments are cutting subsidies…
They just lie and blame it on lack of batteries.
With Incentives Removed, Electric Car Sales, Including Teslas, Come To Complete Halt In Hong Kong
http://insideevs.com/incentives-removed-electric-car-sales-come-halt-hong-kong/
🤣 And what will I buy with them?
Gail help us out here.
Kidding of course.
Everything is electric, including your food. You just hook straight up to the mains! ⚡️⚡️⚡️
Fascinating!
I am glad we have Euan Mearns publishing these updates. The silly story goes on and on.
I am a complete believer of the general logic and analysis of Gail’s work; ie the growth in available energy is at the heart of our growth culture. What I don’t see is how it is predictive at the level of months versus a few years. That would require another level of discovery which I don’t think we have at this time. I would like to know when this is all going down as much as the next person; I just don’t think we do know.
I know without a doubt that our global financial system will certainly fail. The fundamentals which underpin it are failing now. So, we are essentially running on fumes (or probably momentum only by now). Things are looking a lot like 2007 again. There was never really a recovery except the auto industry and possibly shale oil exploration. And those were fueled by bad debt. The auto sector is in trouble again. The shale producers are regretting investing billions into a black hole. So, once these two “green shoots” go away we are back to 2007. So, how far was it from 2007 to 2008? Not very far. So, it would seem to me that we are mere months away from another crash.
I am concerned now because we seem to be reaching limits on how low interest rates can go, and on oil prices. Also, we are starting to reach the point where oil (and coal and gas companies) cannot keep up the whole charade, for very much longer–but it could go on for a year or two.
More importantly, the central bankers seem to be completely oblivious to what is happening. They want to sell the securities that they bought in QE. This is likely to send long term interest rates up, and the whole world economy into a downward tailspin.
We got into the 2008 crisis when the Federal Reserve raised short term interest rates, and we were already on the edge. It is as if we are approaching a second round of Central Banks completely missing what is going on.
I HATE taxpayers SUBSIDIZING rich OIL companies
JUNE 13, 2017 | RUSS BAKER
CLASSIC WHO: WHAT THEY DON’T TELL YOU ABOUT OIL INDUSTRY TAX BREAKS
https://whowhatwhy.org/2017/06/13/classic-dont-tell-oil-industry-tax-breaks/
Mills wrote, “Aside from capital gains, the most profitable tax loophole is perhaps the ‘depletion allowance’ on oil and gas wells and mineral deposits.” The law essentially treats oil or mineral resources as depreciable capital assets and allows a certain percentage of gross income to be deducted each year based on the resource. There are many related subsidies and tax breaks that benefit the oil and gas industries.
As I discovered in researching the background of the rise of the Bush family for my book Family of Secrets, so much of the unknown origins of political intrigue — from the strenuous lobbying effort to get the freshman Congressman George H.W. Bush appointed to the House Ways and Means Committee as a freshman, to John F. Kennedy’s political problems, to even Watergate — could be ascribed in part to the oil industry’s urgency for protecting tax breaks. Sometimes, the tax breaks have been the most important part of the industry’s profits. The most recent, defeated bill, sought to get rid of a number of loopholes and advantages. You can learn more here.
One of the key provisions in the bill concerned the oil depletion allowance. The allowance permits firms to recover their “capital investment — the costs of discovering, purchasing, and developing the well — over the period the well produces income.” The Senate bill did not propose getting rid of this highly attractive allowance, only modifying it so that the five biggest companies could not use a formula called “percentage depletion,” in which “total deductions could (and often do) exceed the taxpayer’s capital investment.”
So get this: all the Senate Dems were doing in the area of the depletion allowance was trying to keep just the five biggest companies from deducting more than their actual capital investment. They weren’t trying to get rid of this long-controversial depletion allowance, and weren’t trying to prevent any other oil companies from deducting more than they spent. Amazing! And this tepid measure still didn’t pass. (Of course, there were other provisions, including trying to block oil companies from sneakily reclassifying royalties paid abroad as “taxes” so they could deduct them domestically — a tax connivance on par with the depletion allowance in its one-sided benefit for the industry and harm to the greater good.)
The sordid history of just the oil depletion allowance alone reads like a Grisham thriller. Bad things happened to those who seriously threatened the allowance.
Are you psychotic? Be grateful the energy system has lasted this long. The CBs are printing to oblivion to keep it going. When it stops you stop dumby.
To think there is some kind of oil subsidy is the height of insanity. Go have a drink with Elon the subsidy king.
Unbelievable
Unbelievable is your denial!
I agree JT. “Renewables” are the real parasite here – not oil.
Unbelievable for sure. “To think there is some kind of oil subsidy is the height of insanity.”
To think that the government has been other than a subset of the Oil Industry is the height of insanity.
The problem for all Earthlings is not peak oil (I know we’re not supposed to use that term but you know what I mean) and it is not peak credit, and it’s not peak stock market.
It is peak sanity.
Nasa says Earth is losing over 800 billion tons of ice per year and we have posts on OFW that propose that there is no Global Warming. Ships are traveling from Europe to Asia across the Arctic Ocean in summer. https://climate.nasa.gov/interactives/global-ice-viewer/#/
The July issue of National Geographic has a story on ice melt in Antarctica. It states, “Fricker and her team have found that from 1994 to 2012, the amount of ice disappearing from all Antarctic ice shelves, not just the ones in the Amundsen Sea, increased 12-fold, from six cubic miles to 74 cubic miles per year.” https://climate.nasa.gov/interactives/global-ice-viewer/#/.
To think that “Global Warming” and “Climate Change” were ever meant to be the term for the same condition is insane. Global Warming is a term for the increase of heat on Earth. If you have a ton of ice at 32 degrees and you add 286,000 BTUs you will have a ton of water at 32 degrees. That heat does not increase the temperature but it is retained by Earth as latent heat and is part of global warming.
Climate change is an effect of greater energy density on Earth aka Global Warming. No one but the Oil Industry lackeys ever said Climate Change was a new name for Global Warming.
We Humanoids are toast because of mental deficiency. All the peak everything and Global Warming are the symptoms. We have bred a flock of sheeple with no capacity to make an empirical observation. The few that can think have been intoxicated by the millions of tons of chemical that are in the air, water and food.
With this degree of insanity……no global warming…..no oil industry government subsidy, I think Gail is right. The Great Correction is very near.
The “energy surplus” that the energy industry creates is the major reason that we can have a government which is the size it is. If we have an energy industry that produces less energy, we will need to have a government with far fewer workers and far less in the way of programs (unemployment, healthcare, retirement pensions) than we have today. Too many people have not made this connection. Less energy means fewer jobs for workers (Other than subsistence agriculture) and a smaller government structure.
Answer me this, Enoch.
If we didn’t fuel our industrialized society with oil, how of much of a surplus do you think would we be able to collect in order to subsidize the oil industry or any other industry?
Do you realize that while you rant that the oil industry has been bleeding you, it has actually been feeding you for your whole life? You do realize this, don’t you?
Perhaps you think the wealth that allows subsidies grows on trees, or flows freely from wind turbines and solar panels, or is created by the central banks with the wave of a magic wand?
Or perhaps you really, truly think we can go back, way back, way way back, to the times when we walked the pagan streams?
Why didn’t they leave us alone?
Why couldn’t we just be ourselves?
We could dream, and keep bees
And live on honey street
https://youtu.be/LpJqVr3F87U
Aubrey is very deep in delusion …. so deep that if you wake him up …. there is the risk of The Exploding Head…. this is usually fatal
There are oil companies are going bankrupt, right and left. You are worrying about a complete non-issue.
The oil depletion allowance makes sense, because the main asset that the oil company has is the oil in the ground, plus the “capitalized cost” of the effort that is needed to get this oil out. It makes perfect sense to give companies an allowance for these amounts, and to prorate the credits over the life of the wells. You may think that accounting has a sordid history, but it needs to be this way. Oil companies have been one of the biggest payers of taxes, in every country where they operate. With oil companies doing so poorly financially now, they cannot fulfill this role. This is one reason that governments, particularly of oil exporting nations, are having problems.
This know also, that in the last days perilous times shall come. For men shall be lovers of their own selves, covetous, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, without natural affection, trucebreakers, false accusers, incontinent, fierce, despisers of those that are good, traitors, heady, highminded, lovers of pleasures more than lovers of God;
–2 Timothy 3:3
incontinent: wearing adult diapers. The Bible is spot on again.
grayfox
your not talking about Oxford are you?
Debauched Oxford University students fornicate a goat
https://fellowshipoftheminds.com/2017/07/04/debauched-oxford-university-students-fornicate-a-goat/
as it was in the days of Noah so shall it be….
Cliffhanger
wouldn’t a more relevant quote for the end of the Industrial Revolution be this one?
For then there will be great distress, unequaled from the beginning of the world until now—and never to be equaled again.
Matthew 24:21
Atheist here, but that quote is bang on (don’t know what the wider context is, but that sentence on it’s own makes a lot of sense…and it will be unequaled since there will few to no humans left when this thing hits…)
ITEOTWAWKI
one third is what the bible gives, one third of everything living that is not just humans.
In the meantime perhaps Cliffhanger was on to something with Timothy consider…
If this is true and not Internet BS, the US is not a country. It is a cesspool.
http://www.paulcraigroberts.org/2017/07/01/true-not-internet-bs-us-not-country-cesspool/
and did someone really fornicate a goat at Oxford?
https://fellowshipoftheminds.com/2017/07/04/debauched-oxford-university-students-fornicate-a-goat/
http://imgur.com/a/QGbnu
http://imgur.com/a/kQwZP
Saudi GDP falls for first time since financial crisis
http://gulfbusiness.com/saudi-gdp-falls-first-time-since-financial-crisis/
How is this possible? This must have been phony money with $GDP falling several years? Futures?
GDP growth would seem to be affected by (growth or shrinkage in revenue from oil sales) + (increase in debt). Saudi Arabia had a big increase in debt in 2016. https://tradingeconomics.com/saudi-arabia/government-debt-to-gdp That may be what is hurting the comparison–except that there is a big increase in debt ($9 billion) in the first half of 2017 as well. http://money.cnn.com/2017/04/13/news/economy/saudi-arabia-islamic-bond/index.html I don’t know what is making the change, other than the lower output of crude oil.
http://imgur.com/0pkSTz9
Neither side is of overt concern. The federal gov should be taxing for revenue at all. The corporations are the government.
I agree, corporations and their lobbies are the government. The news media is the propaganda outlet for the government and an advertising mouthpiece for corporations. The merger of corporate and state powers has already occurred in the United States.
We have a choice–either government or large corporations get the power. It is hard to get away from the problem.
I prefer the corporations get the power then they can act as medieval walled cities taking acre of their people.
Nice freudian slip.
“Fred, take Joe over to that acre and cut all the wheat for the boss.”
We only harvest the people outside the corporate walls. They burn much better than trees. Good for heating, industrial heat and good eating. No waste.
Humor?
This doesn’t build the trust between people that economic stability seems to require.
Now I remember why I don’t comment on this site. All talk (mostly abuse), and no respect for action.
Y’all enjoy the collapse, now, y’hea? I got plants and animals to take care of.
Simple really….when the world economy collapses everything shuts down…the end….were talking about grids down all over the world and 7.5B people dropping like f*** flies in short order…the collapse will be absolutely horrible..There is no collapse or horror movie ever produced that has even come close to imagining what the collapse of BAU might look like…I’m talking about every corporation and every social program going bankrupt at once.I’m talking about people eating people. I’m talking about the worst catastrophe to ever happen in the history of mankind, and WILL ever happen. Nothing has ever, or will ever come close.
Yep.
All one needs to do is turn off their power for 24 hours — and that will break through the cognitive dissonance defense mechanism….
Just sit there in the dark… and imagine ….
Just a small taste of what’s to come — think of it as an amuse bouche …
It will make World War Two look like a carnival act.
I expect it will be various levels of bad with the big urban centers being the worst. I also expect some remote places might not have any indication other than all contact is lost.
If it is sudden and within a week world wide commerce is over and the grid is gone there is no imagining it. If somehow there is grid power and emergency services some places might be able band together for security and develop a plan to lesson some of the carnage when the grid is gone.
Like you Eddy, the big question on my mind is how far people will go to stay alive? It just might be the people we least expect that will turn out to be the most vicious. Living the good lives we do it is very hard to get your head around that idea.
https://www.reuters.com/article/us-usa-economy-construction-idUSKBN19O1LA
‘U.S. factory activity jumps to near three-year high’
“U.S. factory activity rose sharply in June to its highest level in almost three years suggesting economic growth in the second quarter gained some steam, while construction spending held steady in May.”
Is it a pattern for manuf. to increase just before collapse?
read this zerohedge article http://www.zerohedge.com/news/2017-07-03/us-manufacturing-meets-fake-news-one-these-wrong
This is a link to the Schizophrenic manufacturing data graph, comparing two sets of indicators.
http://www.zerohedge.com/news/2017-07-03/us-manufacturing-schizophrenia-continues-best-ism-aug-2014-worst-pmi-dec-2016
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/02/20170703_pmki2_0.png
I suppose that cheap oil could be acting as a stimulus to the US economy. Of course, oil at a price below the production cost can’t last forever. I noticed that the Case Freight Index is way up too. http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Transportation-Indexes/Cass-Freight-Index.aspx
It will be interesting to see which part of the economy breaks, when. Something that can’t go on forever, won’t.
Please define “enough taxes.” I don’t think that’s a legitimate problem. The real problem is that when “government” doesn’t get what it thinks is “enough” it keeps spending anyway, and sends out armed tax collectors. That’s what kills an economy.
It all seems like one big Ponzi Scheme.
You may be right about the government sending out collectors, to get what it needs–perhaps funds for an army to defeat other nations. The way to succeed as long as possible then would seem to be part of the government collection agency.
Time and again, historical records show the crushing of the lower classes through state regimentation, taxes, forced labour, etc, in times of stress.
Bureaucracies of enforcement and armies expand,and there is no escape except to be an outlaw of some kind.
Being a part of the apparatus of oppression is a good move. Or Pirate King. 🙂
Depends on how cooperative the subjects are….
http://imgur.com/a/SwJlg
By the way, rapid lowering in energy dissipation is the only one hope we still have to avoid a totally catastrophic climate change and to stop mass extinction. So a very hard and long economic crisis is the only one hope humans have to avoid theirs own extinction. Isn’t it?
I am doubtful that we have any control over mass extinction. The earth and its biosphere are a dissipative structure. It heads in the direction of increased energy dissipation, whether or not we try to control it. I suspect that climate gets more and more warm, before the whole system collapses. Eventually, earth reaches the temperature of outer space–in other words, very cold. Humans cannot live in any extreme.
San Onofre – 890,000 Spent Radioactive Fuel Rods
….1,800 Tons Of Death And Nowhere For It To Go
http://www.latimes.com/local/california/la-me-stranded-nuclear-waste-20170702-htmlstory.html
just wait untill yellowstone blows and dump it in there.
Why wait. Find a cavity with flowing molten lava and dump it in there. It will wash it away. LOL.
Cement galoshes and dump it in a deep ocean trench. Done.
I imagine that taking care of all of this spent fuel is part of what makes nuclear electricity as expensive as it is. Of course, this cost will continue, even if the nuclear plants are closed. Who will pay it for the long term?
That’s why already existing (or advanced planned stage) breeder reactors (BN600-800/1200) are taking mixed oxides incl. of previously burned uranium fuel in conventional water cooled reactors..
Here’s How NASA Thinks Society Will Collapse
Too much inequality and too few natural resources could leave the West vulnerable to a Roman Empire-style fall.
https://www.theatlantic.com/politics/archive/2014/03/heres-how-nasa-thinks-society-will-collapse/441375/
There is really no historical reference to know what to expect when the global economy collapses. The scale and complexity of modern society is unprecedented in human history. So, there is no way of knowing how things will fall apart (or how quickly). Logically, one can infer that collapse will be much different than prior collapse due to much larger populations and planetary scale energy and resource extraction on a much larger scale than any in the past.
Correct Greg.
The past isn’t the present measure.
The first hyper-complex civilisation in which basic commodities – and the technologies to transport and process them – are sourced globally, not just the silks and spices, slaves, jewels and porcelain which made up the ‘Silk Roads’ of the past.
As CTG puts it: even your toothbrush comes from thousands of miles away, and no one can make them where you live……
So, yes, completely unprecedented, and therefore no real guide. But the ancient world does show us how complexity can collapse over-night, and as Tainter showed one can reason from the historical record, which is a good starting point.
We can buy locally-made, wooden toothbrushes here. Yes, they are expensive, but the art is not lost.
Toilet paper, on the other hand (let’s hope), is another matter… 🙂
The headline pretty much agrees with what I am saying. Where the report is way off base in what it sees as the way out:
What rate of extraction of non-renewable resources (including metals and uranium, as well as fossil fuels) is sustainable? Recycling is very energy intensive. Carrying capacity without fossil fuels, and using only renewable resources at the level they can be sustained is tiny. We are talking something in the under 5 million population level, I expect. Perhaps as low as 150,000, living as hunter gatherers. As hunter gatherers, we could distribute goods equitably.
So how do we save ourselves? “Collapse can be avoided, and population can reach a steady state at the maximum carrying capacity, if the rate of depletion of nature is reduced to a sustainable level, and if resources are distributed equitably,” reads the report.
I think of this … when I read that….
Their conclusion is very weak indeed.
But such articles always end on that note of a happy, huggy, sustainable world of equality; it’s mandatory!
I agree. Publishers demand a happy ending. I have run into this first hand.
Thank you so much Gail and all the posters who make this site what it is. I look at it daily and feel it helps keep me sane. I very much appreciate the understanding that I’ve gotten over the 4 years or so I’ve followed it. I try to read your articles but many are just too hard for me to get my mind around. Sometimes I can understand but I sure wouldn’t be able to explain much of the article. But that’s OK.I get the idea and appreciate what new parts I do learn. It is fascinating how it all fits together . I learned 15 years ago from Jay Hanson’s Die off site about our impending economic collapse and have adjusted my life accordingly from early on.
I appreciate from your articles knowing that when collapse hits us it will not be the fault of the one percenters, or a bad president or other simple causes. It is indeed baked in the cake of our global financial system And the whole system has all got to work for ANY of it to work. I understand now that debt especially is playing an important part.in financial collapse And it seems to me that debt is all we are living on now, with new debt as much as we can create.
At first I was a prepper . I am a lifelong gardener, do it your selfer and retired RN. I set up a great little survival farm on Vancouver Island, and after doing so realized it was all for naught. Someone would take it away from me. Who was I fooling, I’m no Rambo that could hang on to it when times get tough. I gave up trying to ride the collapse out. I considered where in the world might be the nicest place to live for the rest of the good years available to me, and then I sold out moved to Hawaii and live cheaply sharing a farm on the Big Island.( I am dual US /Can citizen ) and I make no efforts to prep besides a few comfort items. I try to enjoy every day and tell people around me to enjoy these last few years of comfort in whatever ways they can..They make fun of me saying I’ve been saying that for a long time. (I’ve lived in Hawaii 7 years), And I am delighted that I and so many others, have been wrong about the timing . And I have had a great time here too, endless summer and all.
I connect with young people a lot ( I am 59) and encourage them to forget about their student loans, and to travel or otherwise really enjoy themselves, It is too late for any personal 10 year plan, or even 5 year plan,I tell them. Some of them already feel a change coming in our world although most are very naive about the possible benefits of so-called renewable energy. I would say my area here is not the capital of Delusistan which I guess would be in California, but it is a strong outpost . I try to educate the odd one saying stuff like Solar electric and electric cars are unimportant, Oil and coal and nuclear is the LIFEBLOOD of our economic system. If they can understand that I might try to explain further.
I appreciate very much Fast Eddy’s comments and responses and am encouraged to be more outspoken in my own life. It feels good to.We don’t have to let ignorance go unchallenged. And we don’t don’t have to be polite to insanity that passes itself off as reality The time is late. I believe collapse has already started in Venezuela soon to be in Cuba, Mexico and so many others. We should recognize the hardship that is already in the world and soon to be in the US Canada and everywhere.
It breaks my heart to see family members and friends who could retire, cash out and really have a great time. but are instead plugging away for another X number of years to good retirement benefits they think.
I tried to tell them.
many thanks again, sincerely
Randy
Please don’t tell them that! Unless you mean financial plan. They can plan to grow food, to produce energy, to be opportunists who can get by on whatever is handed them.
But if by “10 year plan,” you mean get a good job and invest wisely, then I totally agree. I’m trying desperately to talk a promising recent high school graduate to ditch her plans to take out $18,000 student loans to go to school to learn “outdoor leadership.” She can learn that right here, while we feed and house her! I even arranged apprenticeships for her with two outdoor experience companies — for free!
But I guess the young have to make their own mistakes. She’ll be a wage slave for many years after taking out an $18,000 loan.
Randy, I share many of your sentiments and I read your comment with pleasure. Like you, I guess I’m naturally modest and would prefer not to be too outspoken, but needs must, as the Victorians used to say. And as a role model, Eddy is a shining example to us all.
Jan, I understand you have this young lady’s best interests at heart and would like her to avoid making a big mistake and taking on a debt that may be difficult to repay. Likewise, I understand Randy’s heartbreak at how relatives and friends are plugged in and plugging away inside a system that isn’t going to be repaying them. At the same time, however, we should recognize several important facts.
First, despite our considerable expertise and insight, we don’t actually know how things are going to play out on the macro level, let alone on the individual level. Almost 30 years ago, at the peak of the Japanese housing bubble, I strongly advised a friend not to buy a not-so-nice pre-fab house in the country as a second home for 30 million yen. He insisted that if he waited another year the cost would be 35 or 40 million. It turned out that he was wrong, prices crashed and the economy went south, and he place turned out to have access problems, etc., etc. So about five years later he sold it for 7.5 million yen. When he told me about this, I felt genuinely sorry for him,so I commiserated as best I could, and I was very careful not to tell him “I told you so!” On that occasion my concerns were borne out, BUT I could just as easily been wrong about the timing of the end of that bubble.
These days, the younger generation around here are getting into the housing chain, and brand new condominiums (or mansions, as the Japanese real estate marketers call them) are selling like hot cakes for 30, 40 or 50 million yen a unit. I am totally resisting the urge to tell the young people I know that they are taking on a considerable risk as well as a big burden in signing up for a 30, 40 or 50 year mortgage in order to have a place to live. But what do I know? For all I know they may be acting rationally and I may be the crazy one. Nowadays my first thought is “What gives me the right to burst their bubble?”
Second, other people RARELY take advice, especially when unsolicited, and they often resent hearing it, Moreover, if it turns out to have been good advice, they will actually HATE the smartypants who gave them the lecture.
As Joko Beck advised her Zen students:
Occasionally people will ask us for help. If they are sincere in asking, it’s fine to respond. But we can be too quick to jump in and give advice. Many of us are fixers. An old Zen rule of thumb is not to answer until one has been asked three times. If people really want your opinion, they’ll insist on having it. But we are quick to give our opinion when nobody wants it. I know; I’ve done it.
You are right. People don’t really want to hear the right advice.
People have to hear the advise, so that when they are ready to look at the offer, they know where they can get (or remember) the info. I agree it is not a way for a noble reputation.
My advise is this: if it becomes risky to maintain our technological culture the biggest problem will be our nuclear facilities. If car industry declines e.g. it will affect steel prices and thus containment costs. If our civilisation really suffers a hard crash, radioactivity might pollute wide areas and it is not even possible to detect them. If cancer rates increase people might die in their twenties which might endanger reproduction rates. Thus we should clean up this rubbish as long as we can.
In Eastern Europe many people survive the recession making some additional subsistence farming inherited from their grandparents. I think there is a good chance for villages on the country side to keep their tomatoes even at a hard shock. Cities will be a trap that nobody can leave, if they manage people will end up somewhere with their cars and join those already there. The rest will suffer illness or insecure refugee camps or forced labor. Larger food resources will be seized for the military for sure.
I hope still for a mild transition, we will see in September, if the French oppose Macron’s idea to feed all assets to the rich. That opposition could lead to paternal societies as described by Polanyi and his Great Transformation. It could also stimulate national demand. Of course shrinking national economies are sustainable – we just should not expect liberal democracy to survive and neither unlimited rapacity. Stable states with shrinking economies could provide the time needed for a bigger transition. If you look to Europe it will be more likely to install legitimate parliaments or autocrats than large companies. If taxes break down, they will confiscate property, which companies can’t do. If we shut down private transport there should be enough energy for fertilization. I am more worried about the passivity and psychological repression of the masses. It is not a good basis for rational decisions. The demagoges will have their time.
At first I was a prepper . I am a lifelong gardener, do it your selfer and retired RN. I set up a great little survival farm on Vancouver Island, and after doing so realized it was all for naught. Someone would take it away from me. Who was I fooling, I’m no Rambo that could hang on to it when times get tough. I gave up trying to ride the collapse out. I considered where in the world might be the nicest place to live for the rest of the good years available to me, and then I sold out moved to Hawaii and live cheaply sharing a farm on the Big Island.( I am dual US /Can citizen ) and I make no efforts to prep besides a few comfort items.
+++++++++++++++++++
energy consumption growth: almost all non-OECD:
non-OECD growth detail:
Whoops! Attempt to html/img-src code it failed. here’s the two links:
https://www.eia.gov/outlooks/ieo/images/figure_1-1.png
https://www.eia.gov/outlooks/ieo/images/figure_1-4.png
It is easy to forget that world energy consumption cannot rise endlessly in a finite world. If an analyst misses this point, it is ready to assume that non-OECD can rise endlessly.
New Jersey governor Chris Christie lounges on beach that he shut to public
https://www.theguardian.com/us-news/2017/jul/03/new-jersey-beach-shut-for-everyone-bar-chris-christie-and-family
That’s going to inflame the Jersey Shore crowd. I.e. Springsteen BonJovi types. Bad move. NJ is very split between white and blue collar lines.
Christie is a product of Peck as are many privileged elite. He has no common sense and may have crossed a line in this one.
The Fat Boy does seem clueless.
Probably a feature rather than a bug with our repug friends these days (or the Dims for that matter)
The image of Chris Christie lounging on the beach is a perfect fit to where we are today as a society. We are all becoming so engrossed in self gratification that we assume we are apart from society, that we are independent of others. We as a society have lost the concept that we are all interconnected and have to cooperate to survive. If enough people act like Christie the system will fall apart. The same can be said for replacing human workers with robots. At some point a minimum amount of cooperation is lost that allows society to continue. Then,society will fail. Or, perhaps Christie knows what is coming and is fulfilling his bucket list of a private beach walk.
correct greg but i also think guys like Christie know nothing will happen
to them till collapse of bau after that no body saving them
This know also, that in the last days perilous times shall come. For men shall be lovers of their own selves, covetous, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, without natural affection, trucebreakers, false accusers, incontinent, fierce, despisers of those that are good, traitors, heady, highminded, lovers of pleasures more than lovers of God;
–2 Timothy 3:3
http://media.peakprosperity.com/images/Oil-discovereies-decline-2017-06-29.jpg
This is what low prices do. Give us $300 per barrel oil, and we will see a lot of discoveries.
Only two things keep these banks alive: “a State willing to support them and a regulator that does not declare them insolvent.”
http://wolfstreet.com/2017/07/01/many-european-banks-would-collapse-without-regulators-help-fitch/
Th Silly Con Valley is getting a bit dicey:
http://wolfstreet.com/wp-content/uploads/2017/06/Santa-Clara-5.jpg
this is how a bau lite world economy will work once bau collapses through the next financial crisis interest rates will permanently breach the zero lower bound into negative territory for only the too big too fail ventures for example shale oil people like you and me will have no access to negative interest rates therefore a dual world economy will be the norm . Select governments will have access to the ‘free money’ since they will be on these ‘negative interest rates’. Renewable energy will have acess to this free money , You can now see the world we are heading into massive debt levels are coming with higher energy prices people like you and me will be competing with each other to feed ourselves and our loved ones.The easy oil will be substituted with hard oil and renewable energy and that is why negative interest rates is the only solution to our predicament.Gail thinks $300 oil is ridiculous I think it will soon be our reality and then all boats will be raised
I oil is $300 no one will have a job and the economy would drag to a halt. All businesses would go bankrupt. In a short period of time feedback loops would cause the entire global financial system to fail followed shortly by grid failure.
oil has no real value until it is burned or otherwise used
$300 oil (if it ever got that high) would sieze up the economy, and destroy sufficient employment make oil use non viable
that would crash virtually all jobs, and end bau
money is just an energy token
easy money is a direct derivative of easy oil.
hard money derives from hard to extract oil.
There is no third way I’m afraid.
easy oilmoney means there’s plenty to share around. Hard money means that the oilwelsl use too much money to extract the oil itself.
You cannot produce hard oil (except in the very short term) by throwing easy money down oilwells—it just doesn’t work. It provides employment for drillers, but doesn’t leave enough for the rest of us to share out and spend on crap we didn’t need in the first place.—but which created employment for everyone.
Employment for everyone: like the ‘Harry Potter’ shop at Kings Cross station in London.
Always huge lines of happy shoppers, and lots of staff selling plastic stuff from, suppose, China.
Situated in one of the great remnants of the coal and steel age…….newly (and very well) refurbished with funny money!
Who can afford to buy goods made with $300 per barrel oil? The whole economy will collapse first, because it is not possible to use a large enough quantity of $300 per barrel oil to keep the economy going. Cars and houses would be much more expensive: food would be much more expensive. The thing that wouldn’t be much larger is paychecks. This would be a problem.
Who can afford to buy goods made with $300 per barrel oil? With negative interest rates governments can buy these goods and decide who gets what in the form of digital currency redistributed to its citizens in an equitable manner . Paychecks will definitely not keep up with the expected higher prices $300 per barrel oil will lead to so expect people to be spending all their money on food as for cars say goodbye to private car ownership driver-less cars will be the new normal one car will service 100 people houses will get smaller and more efficient the end of cheap oil spells the end of a privileged lifestyle for the middle class of the developed countries.
I think you are dreaming.
Joebanana
I agree: the farmers here go mental if you so much as breath over their land and they have terrible quarrels. There was recently a case of a mother and five children in Spain who were murdered in the Civil War and throw down a ravine for stealing food to survive, the bones have just been recovered.
Neglected public land is the interesting thing…. 🙂
Why investors should brace for a devastating oil shock ahead
http://www.marketwatch.com/story/why-investors-should-brace-for-a-devastating-oil-shock-ahead-2017-07-03
The devastating oil shock could take different forms. In theory, there could be less oil on the market than consumers want, leading to high prices. But I would not count on this. It might look more like a financial shock, and a bigger glut of energy products than in the past.
‘Far-right extremist’ is arrested for plotting to shoot French President Emmanuel Macron in front of Donald Trump on Bastille Day
http://www.dailymail.co.uk/news/article-4660886/Far-right-extremist-arrested-plot-shoot-Macron.html
We may therefore give thanks to God that he was spared, in order to announce the ‘New French Renaissance’ at Versailles.
Trump promises near – infinite energy, Macron heralds a Renaissance – how can we be so negative here?
All much more exciting, grander, than those tatty old things, ‘green shoots’…… 🙂
Hollywood is already working on a script for a movie about this incident.
The tentative title is Day of the Jackasses.
https://youtu.be/ch3WRjcFjr8
The other night we were watching a fairy extensive documentary on the 20’s leading up to the Great Depression with right up till the moment the crash finally hit each and every newsreel and radio commentary sounding like I was listening to todays news what with : Overly optimistic investing in companies losing money [ TESLA being a prime example today ] – 80% of all purchases both goods and investments being made on credit – Personal and Financial debt at an all time high – All the auto manufactures having a glut of unsold stock – More goods being produced than being sold – Stock Markets across the globe gone stark raving mad with nothing of substance justifying the prices – et al – ad nauseam . With the only question remaining in my mind being … when ( not if ) does the next one come crashing down upon our greed addled little heads
Carney at the Bank of England has just joined Yellen in declaring this ship unsinkable – oh, the hubris!
https://www.theguardian.com/business/2017/jul/03/financial-crisis-mark-carney-fsb-bank-of-england-g20
Or the despair (knowing BAU is about to fail) to the point of just saying to themselves:
“F.ck it let’s just tell them all is rosy in order to let them enjoy the last few months/years on this planet” 🙂
Variability goes to zero when the whole system is controlled. That is why there is so little variability now. But we are reaching limits of the system. The controls cannot work forever. Everything has to break, more or less all at once. That is why the situation is so frightening.
It is interesting how unaware these leaders are of the whole situation. Somehow, they feel that they understand everything, and everything is under their control.
Funny they would say this — considering they are at the top of the pyramid….
I am in Hong Kong — and speaking to mid-level people I know in the financial community here — they all believe they are on the Titanic — they are just waiting for the ice berg…
I have lunch with one of them in an hour – a recent email he sent me was ‘we are f789ed — you were right — what do you think the trigger will be?’
When the CBs say everything is fine — they obviously do not believe that — but they have to say that…
A retarded donkey could be made to understand that the stock markets could collapse in a millisecond if the CBs pulled back their buying….
A retarded donkey could be made to understand that the CBs cannot support the stock markets forever….
Yet these people in charge talk about selling the securities now held by the Federal Reserve and the EU central bank. What are they possibly thinking of?
Watch what they do — not what they say…
And whatever actions they take — if they appear to be not in the interest of the continuation of BAU — assume that we do not know the whole picture…
As has been pointed out — interest rates have risen in the US ever so slightly — not enough to collapse BAU — but perhaps enough to tamp down some very dangerous asset bubbles… Goldilocks…
Two years ago in Bali — a minister blurted out that he wanted to drive out foreign ownership — nothing every came of it — but it whacked the massive property bubble…..
A senior civil servant in England said that what made him feel everything was under control in the dark days of the 1970’s , when everything was going wrong and in some ways the country was becoming ungovernable due to Left agitation, was the daily routine of sending out the red leather boxes containing state documents – it meant that they were still somehow in control of things……
I should have mentioned the Great Depression being another example of a partial collapse.
Actually, the crash itself didn’t necessarily lead to the Great Depression. It was the Federal Government’s response. That’s the lesson we need to remember!
The Great Depression really ended when we ramped up debt and entered World War II. Are you suggesting that the US should have started WWII earlier? We have had to keep debt growth going since then to keep away from depression again.
The underlying cause of the Depression was increasing wage disparity and lack of buying power by farmers, as the work that farmers had done in the past was being taken over by horses and by mechanization. The situation is much like workers today finding that their jobs are being taken over by computers and robots. There are jobs available, but they don’t pay enough. The problem is a lack of buying power for the 90%. “Papering over” the problem with debt does indeed hide the problem for a while, but it doesn’t fix it. There are other parts of the problem that need to be fixed as well.
Gail,
Have you heard of “Guaranteed Basic Income”? If implemented would it buy more time for BAU?
money is a token of energy
with a guaranteed basic income, you would be printing money to enable people to buy goods produced by energy input, using those tokens
this cannot be done, goods of any description require oil coal and gas to produce them (ie heat). Energy tokens (money) must have real energy to back it up.
In a declining BAU, major sources of productive heat will also be in steep decline, so no matter how much money you print, the goods available to spend it on will also be in steep decline.
The result will be hyperinflation beyond anything we have experienced.
We might think of our industrial system as a man staggering under a weight he can’t carry. He is forced to run forward with the weight to prevent himself dropping it, because forward motion appears to lighten the load.
Eventually of course he has to stop, when he does, the load falls.
Oops.
Ok. I agree with this: “The result will be hyperinflation beyond anything we have experienced.”
But right now deflation is the issue (low commodity prices!). Would GBI not balance demand and supply better (right now)?
True, even if it did work, it would temporary. Temporary could be months or a couple of years. if GBI adds time to BAU then we should try it.
it would likely work short term, because people believe that coloured bits of paper and plastic have actual value
but inflationary economies go downhill very quickly
how long depends on the national temperament and many other factors—all different between nations.
I’d guess that ultimate collapse comes when supermarkets and petrol stations are empty.
Until then, the majority won’t believe it.
After then it will be civil chaos, martial law and dictatorship.
Norm – I understand this & agree given its an energy dynamic underlying the problem.
But im still wondering given aggregate demand is failing whether a GBI could kick the can a little further … ie create the facade that we can still afford “unaffordable” heat sources.?
But underneath it I realise a GBI is an open admission that capitalism is bust.
GBI will work only so long as the money you recieve can buy you enough food for each day (energy) and keep you clothed and housed (energy)
As moneyprinting is infinite, and energy is finite, you can figure out the endgame. Governments will go on printing money, while asserting that energy is also infinite. The Don is doing that right now.
We then all become Zimbabwean billionaires
(Mugabe destroyed his own (energy producing) economy for political gain, and went on printing money in self delusion)
Has not Japan gotten away with printing money for almost two decades without inflation?
Agreed. At a global scale two decades of BAU is very, very unlikely.
How and why Japan got away with it?
to quote from my previous response:
……how long depends on the national temperament and many other factors—all different between nations……
The Japanese have a different prudent mindset—it will affect when, but not the ultimate result.
The rest of the world was not in their position and was buying a lot of made in Japan stuff…
Now the entire world is Turning Japanese…. literally
Norman said
“it will affect when, but not the ultimate result.”
Also, big part of the answer is that the rest of world continued to buy and still continues to buy Japanese debt.
I understand that quite a bit of Japanese debt is bought by the Japanese people.
According to WIlliam Grimes writing in 2011, “Around 70% of Japanese government bonds are purchased by the Bank of Japan, and much of the remainder is purchased by Japanese banks and trust funds, which largely insulates the prices and yields of such bonds from the effects of the global bond market and reduces their sensitivity to credit rating changes.”
I have heard of Guaranteed Basic Income.
I expect it would require a huge run up in debt to implement, practically anywhere. Japan is the only country that comes close, with its program of make work jobs, so that pretty much anyone who wants a job can get one. It has a huge debt problem to go with this.
If the Guaranteed Basic Income is not connected to jobs, then a person has to deal with a dis-incentive to work, besides a huge debt increase. The debt increase is likely to change a currency’s relativity to other currencies, making imported goods (often energy products) relatively more expensive. The only way it would seem to work is if the country, can, on its own, without much in the way of imported goods, ramp up production of goods for its people.
but ”goods” can only be a product of employment by the use of energy
in an isolated nation, this has to mean indigenous energy.
if there isn’t any, production will cease, and there will be no employment
Tainter mentions that, during its prolonged fall, Rome provided a guaranteed to its citizens, which started out as primarily upper-classes of the capital city. To keep potential revolts in check, this was extended to more and more people, until by the third century AD, all residents of Rome had such an income. It was then extended to Cairo, and finally, anyone living in any conquered territory. This was accompanied by debasement of currency and wild inflation.
So if the past is any clue about the future, it seems a guaranteed basic income is likely to make things worse, not better.
I had forgotten this, or not thought about it in this way. Thanks!
The preferred option is a Job Guarantee. A basic income is just a mopping up operation for those who fall through the cracks. It’s NOT an expensive operation for a nation to implement.
It’s already happening in the UK;
https://www.theguardian.com/commentisfree/2017/jul/03/stop-exploiting-people-cut-unemployment-job-guarantee-underwritten
And;
https://medium.com/modern-money-matters/smart-people-talk-about-government-buying-f805c18c4d31
The arithmetic is such as to be roughly revenue neutral. The spending itself boosts the economy.
How about the drop in the currency making imported goods more expensive? Doesn’t that offset some/all of the benefit. How helpful has Venezuela’s increased debt been?
I don’t have the link that led me to that conclusion, but there was about a two year lag between black Thursday and the depression. The government refused to aid the poor people and so it all quickly spiralled down into a depression. What WW2 did was pump prime the economy and so with more money in circulation, the economy was able to get to its feet. Deficit spending is key!
I agree that deficit spending is key, but a country has to (1) have an excuse for deficit spending and (2) have at least some theoretical ability to make the necessary payments, including interest payments, from tax revenue. A big war is ideal for this purpose.
I believe in deficit spending too. The problem is that it has limits, which we are quickly reaching.
Thanks, Gail. You already know more than most mainstream economists!! They say budgets have to balance, i.e., be in surplus. Surplus simply means surplus of tax received compared to government spending. Because the annual accounts have to balance the surplus is the public deficit. This deficit reduces non government spending and thus it ends up causing a recession.
Deficit spending injects money into the economy and so it grows. You grow the economy by spending, by buying debt such as pensions, the military etc.
The government can never go bankrupt [the Federal one] except deliberately , but there are practical limits. The government runs out of things it wants at prices it is prepared to pay. So as we all well know on OFW, that is resources.
Right now that limit is $trillions off in the distance [output gap] so the government can easily afford to pay everyone to work, along with free education and healthcare. Mainstream ideology is so damaging to the economy because all these goodies are denied. Criminal.
Yes we will collapse, but lets get the economy working while it can!
Ah, let me tell you about Castanea dentata some day… I have my own theory about the cause of the Great Depression, and it involves the loss of a major source of trophic energy, which caused mass rural-urban migration and even continental climate change.
Castanea dentata? Not that old chestnut?
If they time the shale ponzi just right they’re going to crater exactly when Saudi Arabia implodes, pulling much of the region’s conventional oil output into the hole with them. And as Matthew Simmons said “As goes Saudi Arabia goes the world”.
Anyone seen plan B lying around?
Plan B is for the federal governments to start subsidising the energy industry. After all it’s so cheap to do! Everybody benefits and nobody is out of pocket. All thanks to the Constitution.
How does the US subsidize Saudi Arabia, so it doesn’t collapse? How does the US subsidize Venezuela so it doesn’t collapse? How does the US subsidize Libya so it doesn’t collapse? How does the US subsidize Nigeria so it doesn’t collapse? Are you suggest that the US government buy up debt of these countries, to help them out?
Or are you claiming that these countries can bail themselves out, by issuing more debt? I think Venezuela has already tried this approach, with little success.
I am sick and tired of hearing the nonsense you spout. The US cannot live on its own energy alone. It needs the whole world to continue producing energy products. The problem is that countries that export oil and other commodities are not in any shape to bail themselves out by issuing debt. They cannot raise oil prices and other commodity prices that are too low on a worldwide basis. In fact, neither can the US. If every country in the world raised debt levels greatly, perhaps demand could temporarily be ramped up, and thus oil and other commodity prices could be raised. But there would be a continued cash flow problem afterward, as debt needs to be repaid with interest. I know that you will claim that all the many countries of the world need to do is issue more and more debt. The paper industry, to keep up the issuance of all of this debt will keep the economies going–or some such thing.
Feel free to recycle this as necessary….
http://www.azquotes.com/picture-quotes/quote-to-argue-with-a-person-who-has-renounced-the-use-of-reason-is-like-administering-medicine-thomas-paine-50-53-28.jpg
The elders need some massive distraction soon or they will be losing their heads literally. They know that. That is why the war insanity is coming to the surface and is so blatant. Desperation.
War would give the El-ders some helpful cover if they plan to initiate a controlled economic collapse and financial armageddon, but a real major war would be overkill. (Pardon the pun!) Nobody would control it and nobody could guarantee to emerge victorious in it.
A pandemic fatal to half the population and which attacked the elderly with particular virulence would save the pension funds while bankrupting the life insurance companies. Members of the elite would be offered preventive vaccinations, of course. There would definitely be a lot of imponderables, but the idea is doable in principle and may seem attractive to those in power if the only alternative is collapse.
Someone in the 21st century should perhaps be as wary of the state offering them a vaccination as peasants were suspicious of potatoes in the 18th because they knew the upper class wanted to get them………
Swine flu vaccination was a success in my country.
I suspect that the “Elders” are feuding as well. I am sure that if the economy is global the “Elders” are global as well. And I don’t think they are in agreement on a way forward.
it is a difficult concept to grasp, but all employment is dependent on availability of surplus energy.
thus if i am a hunter, stalking an antelope or whatever, the result of my ”labour” must be the energy contained within the animal being converted to my needs, and that of those dependent upon my hunting skills.
Eating meat and using animal skin for clothing converts energy directly and specifically through the ”employment” of hunting.
If i am an unsuccessful hunter, I starve to death, unless better hunters share what they have, in which case I am a burden on society.
Effectively fossil fuels have enabled us all to become a burden on our own society, because oil supports us without having to work to survive.
Thus the less work we do, the less work we feel we should be doing (leisure entitlement). This is where to robot-automation fantasy kicks in, with the concept that in our fantasy future, we will only have to work 20 hours a week, maybe less, and robots will take care of all our needs.
Where does this nonsense come from?
The collective consciousness of the past 50–maybe 100 years, when ”economic advancement” saw cashflow increase for everyone, where ”stuff” got cheaper and cheaper in ”work” terms. We reached the point where sufficient food for a week could be bought with a hour’s wages—(or minutes in many cases) leaving the rest of wages to be spend on ”stuff” —-purchases that provided employment for 000s of other people in the wages circle.
But of course ”economic advancement” had nothing to do with human ingenuity and ”technology”. and everything to do with speed and volume of fuelburning.
We all became stokers for the furnace of human progress—the more fuel we burned, the higher our “GDP”, the faster we burned it, the more % growth we had.
And we had to burn more and more, because 80m people show up each year, demanding their share of our prosperity pie.
So we are forced to scrabble around deeper in the earth, looking for more stuff to burn, to give ourselves employment, while denying that the business of obtaining energy itself is consuming more and more of our collective effort. leaving less and less to keep the wheels of commerce spinning.
Nations with plenty of indigenous fuel to burn, are still prospering (Australia for example) while those with none, are collapsing (Spain, Greece etc) Venezueala is collapsing through fiscal ineptitude, while Saudi survives in the short term by pumping oil like crazy to support a top heavy population to whom physical work is anathema.
I can’t see anything your post to disagree with, Norman.
I’ve seen that here in Japan, “a nation poor in indigenous energy and natural resources but rich in wa!”, we strive to conserve precious energy by allowing our salarymen to remove their neckties in the summer months! It’s all part of the ingenious Cool Biz strategy.
The Cool Biz campaign is a Japanese campaign initiated by the Japanese Ministry of the Environment from summer 2005 as a means to help reduce Japanese electricity consumption by limiting the use of air conditioning. This was enabled by changing the standard office air conditioner temperature to 28 °C (or about 82 °F) and introducing a liberal summer dress code in the bureaucracy of the Japanese government so staff could work in the warmer temperature. The campaign then spread to the private sector.
This idea was proposed by the then-Minister Yuriko Koike under the cabinet of Prime Minister Junichirō Koizumi. Initially the campaign was from June to September, but from 2011, when there were electricity shortages after the 2011 Tōhoku earthquake and tsunami it was lengthened. It now runs from May to October.
If you are an old-style Inuit hunter you always had the option of stabbing the successful hunter to death, from the back, for having embarrassed you by showing greater prowess and ‘shaming’ him – even though that was neither intended nor implied.
Just like sudden violence from an urban thug for showing ‘disrespect’.
Ah, human nature…….
My mother was taught all that crap about a leisure, automated, economy back in the early 1950’s……
If humans had a 500 year lifespan we would see things a lot differently.
yes we would be walking around very slowly with a shell on our backs
Nice post Norman, and thanks Gail et al
financial collapse may be coming in a few months but the elites already have a plan B in place so BAU LITE will be our new reality and for those that have not prepared which is the vast majority they will enter a life of austerity as the middle class is made redundant. I’m afraid OFW has misled us in saying that this is the end what we are witnessing is a ‘staircase collapse’ that will play out over many decades.
I guess painting it as “..OFW misled us..” is a bit on the harsh side, as Gail’s work is not force fed to anybody here, take it or leave it, discuss it. Many of us here have been into general theme of resource limits ideas since early 2000s, some lurked into it even much earlier than that by decades..
The hard lessons learned are simply, don’t trust any messiah or truth teller or analyst out there, the better the analysis the more effort must be place on the proof reading and validation if one is not to become a simple fanboy of some particular dogmatic approach of gauging the reality around us..
There is no BAU lite. The system runs at full efficiency and capacity or ceases to exist. The elites can’t alter that reality. The economy of scale once lost can’t be restored.
That’s possibly true general observation from macro zoomed out perspective of decades or even longer cycle chunks. But such approach gets very tricky on the detailed human scale level and “slow time” perspective, which we must endure as sapient beings throughout these developments.
Specifically, before there is no national grid, the grid will be likely fractured to regional islands of priority, typically carved for zones of some enduring mil-industrial complex, agriculture, factions of remnant gov and elites hubs etc. So, in the same vein, one must expect other regions to be abandoned, corralled off, stripped of spare parts for “BAU lite” etc.
I guess the sheer blindness to these often repeated historical patterns is caused simply by the fact that tiny global minority (typical north/western) frequenting this site has avoided for such long stretch of time (~150+ yrs) any severe harm or crisis, with some exceptions of limited regions inside Germany, Japan and UK during WWII..
Yes, worldof
Morals:
1/Live in a core region of a core, more or less efficient, state; a region of prime economic/governmental/agricultural status where every effort will be made to preserve continuity and infrastructure.
2/Sort out private sources of supplementary water, fuel, compost, and extra high-quality nutrition beyond that which basic state rations or ultra- expensive utilities might offer.
This includes options to quietly harvest public and private land, etc, eg. for firewood. As gypsies know, you don’t have to own it to use it. 🙂
3/Don’t have a property so large and pretty it might be confiscated or attract envy.
4/Don’t blow your savings just yet because the end is nigh -this might well drag on, and for now at least cash is best.
5/ Steer clear of race and religion flashpoints.
I wonder what would happen if more than a minority would harvest public (and why not private) land?
Firewood, berries, weeds, nuts, mushrooms, fish, small animals, large animals. To do that remotely sustainable you have to live outside the core of the core.
I wasn’t thinking sustainable, just very short-term survival of impacts, supplements to state- issued rations, etc.
In the rural back of beyond, though, such things would probably get you killed and disposed of quite quickly…….
xabier-
I would say you are most likely right. I know around here, when somebody from another area starts hunting on someone else’s turf, the blood pressure rises pretty fast.
If it is like this during good times, I have no doubt during times people are simply trying to survive, there will be many hunting “accidents”.
With no threat of jail, people will revert to something they never thought possible very quickly.
Not too many square meters should give plenty of vitamins and minerals and taste, supplement with gathered berries/fruits/mushrooms.
To complement government flour, sugar, rice.
I take for granted this is happening in Venezuela.
Ha ha ya… the place where the desperate are eating cats and dogs already….
I agree with JT. There is no energy or resource supplies without economies of scale. It has become increasingly difficult to access energy and resources that have been very much depleted over the course of the last century.
Agreed!
OFW misled us? Really? What about the news media, politicians and government?
There is no plan A B or C. It is grasping at straws now. Throwing crap and seeing if it sticks. The desperation, fraud, manipulation is everywhere and much of it in plain sight. Cash for clunkers, historically low interest rates, bank bailouts, Obama Care, Middle-East atrocities, fake news, made up GDP and on an on and on.
We will see. It is hard to keep very much functioning after banks close, or after the electric grid goes down.
great article by Gail but i have one thing to ask to people of ofw
Gail say world economy gonna collapse in months so are you ready stare at your death
after collapse of bau because i can not live without bau so i am ready for my death
http://www.azquotes.com/picture-quotes/quote-i-do-not-fear-death-i-had-been-dead-for-billions-and-billions-of-years-before-i-was-mark-twain-35-8-0825.jpg
What will it be like after we die – probably a lot like it was before we were born.
http://img.picturequotes.com/2/589/588055/lao-tzu-quote-6-picture-quote-1.jpg
Well, when you’re dead, you save a lot of money on groceries. 🙂
“Life is cheap, but death is free. Die, die, die, come die with me.”
One thing I quickly discovered in insurance was the when it comes to liability, death claims tend to be fairly cheap; permanent injury claims are horribly expensive. Part of the difference is the dead person not needing groceries any more. The other issue is medical care no longer being needed. If a doctor accidentally injures a patient, the amount of the settlement is likely to be lower if the patient dies than if the patient needs care for the rest of his life.
Nice Snorp
Very class act. Any other profound insights you’d like to express?
Sorry, your right, I get carried away………..
but for the record, GG Allin represented anti class act to the core. (someone else can post the Budd Dwyer video, many would consider him a class act)
Please delete if it’s too offensive
I did find it rather offensive.
I talk about the Financial Crisis perhaps beginning within months. It doesn’t necessarily lead to a huge amount of deaths immediately.
In some sense, none of us know how long we have left to live. I have gone to way too many funerals of people who are younger than myself. Many of my friends are widows.