The Next Financial Crisis Is Not Far Away

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.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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3,812 Responses to The Next Financial Crisis Is Not Far Away

  1. Cliffhanger says:

    Oil rises as robust Chinese demand seen helping drain glut. China just passed the US as the largest oil importer, up 13-odd% year over year. Decline of legacy domestic fields cited as a driver.

    http://www.reuters.com/article/us-global-oil-idUSKBN19Y04I?il=0

    • China is a country with a lot of unconventional oil that is non-economic at current prices. They have cut back on this production, rather than continue to produce oil that makes no economic sense. I suppose it is the fact that the oil wells themselves that are expensive that led them to this decision. If what they were primarily concerned about was fairly cheap oil that was normally heavily taxed, like Saudi Arabia, they might have made the opposite decision.

  2. Cliffhanger says:
  3. Bergen Johnson says:

    ‘US Charges 412, Including Doctors, in $1.3 Billion Health Fraud’

    Please don’t tell me the closer to collapse the more corrupt it becomes, because, if so, then we’re all in a heap of trouble. The gloves got taken off at some point and a relatively civil business atmosphere turned into a no holds barred, take em for what you can mentality. It’s like we’re all falling and people that can are taking what they can grab on the way down to try and get enough momentum i.e. big enough bucks to fly up and away to safety.

    • Tim Groves says:

      Human nature hasn’t changed, but the Medicare/Medicaid supervisors seem have been far too lax for far to long. With all the QE money floating around over the past decade, these fraudsters probably thought their scam was too small to notice.

    • The system is fraud prone, partly because it is such a big bureaucracy. It allows such and such amount for various things–transport devices if a person can’t walk, for example. If a person is prone to falls, the system seems to allow for the purchase and ongoing monitoring of a device (perhaps worn on a chain around the neck) to call for medical help. I don’t know what all the Medicare system allows. I would guess that if a person complains of pain, a prescription for pain medications pass the screen pretty quickly. If a person complains about anxiety, a prescription for anxiety medications would go through very easily.

      Once doctors figure these things out, they can use these known protocols to their advantage, to bilk the system. They can convince people that additional medications would be helpful. And companies can set up calling systems that automatically call people (who might possibly be eligible for Medicare) in their homes, letting them know, “You may be eligible for ___________ provided by Medicare.” If there is a way to make money off the system, people will find it.

      • Greg Machala says:

        “The system is fraud prone, partly because it is such a big bureaucracy” – I agree 100%. Folks think the system is so big that if me and my buddies make a few hundred no one will notice. And, it won’t hurt anything. But, then everyone does it and the hundreds become billions. And the billions become trillions. The dumber than yeast thing again.

  4. Fast Eddy says:

    Wow … a good comment for once on Wolf site…

    carlos leiro
    Jul 13, 2017 at 9:29 pm
    The problem is the ENERGY, at 46 dollars / barrell the oil is expensive and moves the world.
    The cheap power time is over.
    The force that gives the productivity is the ENERGY, the world has worked with the oil of 20 dollars (adjusted to inflation). The only way to continue with this equation is to lower wages (except for strategic jobs)

    There is no shale gas, no thigt oil, no carbon or anything, plugging renewable energies, that make back to times of cheap energy.

    What happens then … we enter a crazed spiral of recession produced by expensive oil that causes the price of oil to fall and makes the energy companies do not invest and barely reach prices without investment or profits .. so and so .. Injected with money that will make things look like a Ponzi scheme

    Sorry by my bad english, best regards

    http://wolfstreet.com/2017/07/13/what-will-the-fed-do-jobs-productivity-inflation-qe-tighten/

    • ITEOTWAWKI says:

      Yep, right on the money…nothing will ever replace cheap oil…sorry scratch that..total and utter collapse of our IC will replace it!

  5. Fast Eddy says:

    Foot traffic at chain restaurants fell 3% in June year-over-year. Same-store sales fell 1%, the sixteenth month in a row of year-over-year declines, completing the sixth quarter in a row of sales declines, the longest downturn since 2009.

    Food sales were down, alcohol sales were down. The only thing that was up was prices, but it wasn’t enough to make up for the decline in guest count: the average amount per check rose just 2% in June.

    http://wolfstreet.com/2017/07/14/reasons-for-worst-chain-restaurant-slump-since-2009/

  6. Fast Eddy says:

    Good interview:

    • Art is a good speaker. He has figured out a big piece of our problem. The title of his talk is Oil Business in a Deflationary Spiral. I didn’t have time to listen to his whole talk right now, but this essentially our problem. The economy is imploding from low demand and low prices.

      Of course, raising interest rates and selling bonds purchased under QE are great ways to make our problems worse. There are other good ways of adding to our problems as well: (a) Insisting that countries get operate on a balanced budget or closer to one and (2) Regulating banking and shadow banking, to keep debt to within certain prescribed ratios to equity amounts. For example, Basel regulations. I understand another accord on regulating international debt was signed at the G-20 conference. Trump seems to have signed it, without understanding what he was signing. These approaches sound benign, but are what push the economy toward a downward spiral. https://www.wsj.com/articles/has-trump-flipped-on-financial-regulation-1499987710 Search under “Has Trump Flipped on Financial Regulation? Let’s hope that G-20 communiqué he signed was a mistake.”

      • Duncan Idaho says:

        Meanwhile:
        “In the background of all this are even more disturbing quandaries and prospects: population overshoot, mass migration from regions that can’t support these numbers of people, extinctions of animal species, the death of the oceans, climate instability. The practical problems of economy approach an event horizon of energy scarcity, runaway debt from trying to mitigate it, and eventual collapse of our day-to-day hyper-complex economic arrangements. These things are so scary that the thinking classes — except for a minority of nerdy scientists — can’t even bear to think about them.”

        • Greg Machala says:

          Yep Duncan, that is a good summary of the situation.

        • Tim Groves says:

          Nerdy or not, scientist or not, it is far from easy to find a member of the thinking classes who is prepared to think and talk seriously about the implications of Gail’s contention that the entire world has an appointment with economic collapse and it may only be a matter of month’s away.

          When I try to raise the subject among academics and nerds of my acquaintance and receive smiles, frowns and blank looks in return, I feel like Lot searching through Sodom and Gomorrah for ten good men. Mostly they assure me of their faith that if things were really that serious, the people in charge would be doing something to prevent it from happening.

          • Fast Eddy says:

            One might think that it would occur to them that printing tens of trillions of dollars and driving interest rates to 0 … could be considered doing something … about some really dire problem…

            But nope — they cannot connect the dots — think that all these measures are related to corruption and ineptitude… the rich trying to get richer — and if you point out that the end result of these policies leads to total collapse — which means the wealth vapourizes — they give you the blank stare — much like a donkey would if you asked it for directions.

            The problem is that most humans are stewpid.

    • i1 says:

      Frackers are business to get money, not make money. Lol.

    • Greg Machala says:

      Yep! I agree with Art’s prognosis. The same death spiral awaits everything else too.

  7. Wages will fall, and tenements and unsanitary conditions, well out of sight from the rich people’s mansions, like 1910 will be the norm. That is what happens during times of lower energy.

    Again, it is impossible to calculate how much Chuck Fitzclarence f’ked up the world. Without him, the Old Order would still have existed, there would be at least 5 billion less people now using not much energy since most people would be poor (colonials don’t get to spent much energy, sorry), and we would have at least 300 more years of BAU.

    • BSWKWG says:

      This is the thing: it was not a mistake – it was deliberate,

      i.e. taking on stupendous debt to breed as many humans as possible

      • This is the way the economy continues, however.

        • BSWKWG says:

          Quite so. But the money masters are not so blinded by short term gain as to extinguish themselves.

          They knew this would happen, but accelerated it. Blind greed?

          It doesn’t add up. They may be amoral but not stupid.

          So why?

          • Physics. The laws of physics demand that money masters act in this way. We need to complain to the Maker of the system.

            • BSWKWG says:

              The word that smashes into my consciousness is INGRATE!!

              The gifts are fantastic and yet, no matter what blind alleys the stoopid human goes down
              it is because of flawed design.

              Maybe the the gods didn’t anticipate that humans would be so utterly derelict.

            • Greg Machala says:

              It is an addiction like any other. Even if the people that have the authority to set interest rates and create money know the system is going to fail, they are as addicted to modern life just as anyone else. They can’t stop the crack habit and neither will we until it all disappears. ANYTHING will be done to keep BAU rolling along. If a policy fails, a new one will be tried and tried again until BAU comes back to life.

          • Fast Eddy says:

            Because steady state economy would mean they would be scratching in the dirt with sticks…

      • Without him, most nations in Third World would not exist today (i.e. British India, Belgian Congo, French Indochina still here and now) and the losers from Europe would have supplanted the natives. Along with all the tech progresses by those who were killed, maimed and demoralized in our time would have made, there would be much, much less people from the colonies =Third World, who in our time consumed most of the energy which led us to where we are now. Of course, no oil sheiks (propped up by Lawrence of Arabia), as well.

  8. BSWKWG says:

    Something wicked this way comes.

  9. A Real Black Person says:

    No survival community that is more than a bunch of poseurs would find it in their best interest be welcoming everyone. It’s easy to be welcoming when what you participate in is a little more than a part-time hobby for bored wealthy people. You already know anyone who will join your lifeboat community, at this time, come from the same socioeconomic strata, low stakes and have identical beliefs so there is no need to be discriminating.

    Jan Steinman says: Get the chip off your shoulder, and you’ll have an easier time of it. We’re completely colour-blind, but we do select for the ability to get along well with others.
    You’ve concluded that I’m already not a “good fit” because I suspect that your lifeboat community is cultivating very few skills that will be useful in a world after industrial civilization collapses. If you’re reading this, you most likely have either a job, or you’re wealthy, and you are most likely using computers and industrial machines to peruse your pastoral hobby. Cutting wood is easy when one is using a chainsaw. Get back to me when you are doing that with tools made with local materials that could have been used during the Stone Age. Until then, don’t attempt mislead me about what you’re doing. The “nasty temperament ” is a manifestation of distrust. You’ve given me plenty of reasons to believe you are delusional about the level of preparation your lifeboat community is attempting to achieve. Do it if it makes you happy but don’t try to sell it as some kind of solution to me.

    • BSWKWG says:

      Why don’t you reply to Jan?

      It is a well known noise technique to post filler after that which is desired to be distracted from.

      Look it up.

    • Jesse James says:

      It will be hard to establish relationships with true trust after BAU goes down. Then, desperate people will say anything.

    • Jan Steinman says:

      You’ve concluded that I’m already not a “good fit” because I suspect that your lifeboat community is cultivating very few skills that will be useful in a world after industrial civilization collapses.

      You pretty much got me there! Right on!

      Anyone who “disses” someone else on-line without bothering to get to know them better, getting to meet them, or at least look at their website seems to be inviting suspicion.

      One nit: why is it I have “concluded,” but you have “suspected?” I haven’t “concluded” anything. But I suspect you are unwilling to really try to find a sustainable agrarian community you could fit into. Prove me wrong! C’mon out and volunteer for a couple weeks! If, after that, you don’t feel you’ve “cultivated” any useful skills, we’ll give you your money back. 🙂

      If you’re reading this, you most likely have either a job, or you’re wealthy, and you are most likely using computers and industrial machines to peruse your pastoral hobby.

      Sorry, you’re zero for three there.

      Wealthy? Well, short of. I did save up money to invest in this venture, but I doubt many would consider my net worth as being “wealthy.” Someone with a Vancouver condo, mortgaged to the hilt, has more paper wealth than I do. And my financial “wealth” is paper-only, all into this venture, which has declined in value 18% since purchase. So I cannot even claim to be financially saavy! (I do have about $2,500 in the bank, which I realize makes me “wealthy” to some people.)

      “Have a job? “Well, short of. I do “have a job.” I am a substitute librarian in the public school system. I also do some odd jobs and handyman work for friends and neighbours on a “gift economy” basis. Sometimes, they give me some cash. Sometimes, I get a jar of tomatoes. Sometimes, I get a humble “thanks” and a promise to “pay it forward.” Last year, my taxable income was about C$2,200.

      Industrial? Well, short of. We make minimal use of “industrial machines,” but it is about 90% hand labour. We try to leverage older technology to get the most bang for the buck. Precision stuff like weeding is all done by hand. We do a lot of scything, but share-crop our hay out to a neighbouring farmer who has $15,000 worth (used value) of hay equipment. Hay making is pretty highly specialized. I maintained an acre of hay by hand a few years ago as a pilot project, scything the grass, raking up windrows, and forming it into “shooks” that shed most of the rain. You lose about 20% of your animal feed that way, but we use it for mulching. We could do it all by hand if we had to.

      Get back to me when you are doing that with tools made with local materials that could have been used during the Stone Age.

      People who insist on such things are such boors, almost as much as those who plan to survive entirely off of dead people’s stuff after the crash. We can visit the local dump and pound scrap metal into scythe blades — why should we go back to “The Stone Age?” Are you crazy?

      No one has a perfect crystal ball, but our strategy is to avoid technology that requires today’s level of energy, and selectively use older technology that has a hope of functioning in a reduced-energy world, while experimenting with even simpler ways that may be required.

      It is just as unrealistic to insist on “Stone Age” living as it is to assume smart phones will be around forever. I prefer a middle ground. But this drives the “we’re all gonna die” crowd nuts. They don’t seem to have enough imagination to envision a middle road. Fine. Let them die in their bunkers, surrounded by emergency food wrappers. I’d rather go down while at least doing something.

      I’m taking some time and effort to answer you openly and honestly, when I should be out prepping the site for a new/re-used glass and aluminum greenhouse that should last 60-100 years if properly cared for. I don’t like plastic greenhouses that need to be “re-skinned” every 5-10 years. Middle ground approach. When all the glass is broken and the aluminum comes apart, some future generation will have to figure out how to descend from there.

      If you can’t see any purpose in our approach, and are going to continue to be derisive and dismissive, then you’ll be joining several others in my “instant delete” list.

      But if you’re serious about dialogue about pros and cons of various coping strategies, we can continue.

      • Fast Eddy says:

        Koombaya Kult.

      • A Real Black Person says:

        Thanks for confirming my suspicions. The minute I saw you mention building a greenhouse in Canada as part of a short term solution to the collapse of industrial civilization, I realized what you are. Consider yourself dismissed, once again.

        At least the person who was enthusiastic about power satellites could see the severity of the situation.

        • Fast Eddy says:

          Koombaya Kult in Kanada

        • Jan Steinman says:

          I saw you mention building a greenhouse in Canada as part of a short term solution

          “Short term solution?” No, I consider it a long-term coping strategy.

          And you seem to have missed the part where we salvaged a glass and aluminum greenhouse, which has a lifetime of at least 60 more years, which means we won’t be dependent on the plastics industry for maintenance of a “normal” greenhouse every few years.

          How many different crops are you growing? Are you doing it without a greenhouse? Where?

          You have my sincere congratulations if you are getting by without one in the northern US or Canada. But with a glass and aluminum greenhouse, we can have greens all winter long, without any additional energy.

          • Fast Eddy says:

            Joke of the Day:

            A man visits his psychiatrist and says doc — I am really anxious — we’ve peaked on cheap oil and I feel like the human race is teetering on the edge of a cliff… I feel like the grim reaper is hovering over me night and day — I have visions of starvation — I can’t sleep — help me doc!

            And the doc says — have you thought about starting a hobby farm? Give that a try — if it doesn’t work come back and I will give you a prescription for extra strength Xanax.

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