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. Third World person says:

    where i think about ic this quote gets in into my head
    Their morals, their code, it’s a bad joke. Dropped at the first sign of trouble. They’re only as good as the world allows them to be. You’ll see when the chips are down these civilized people? They’ll eat each other.

    • Cliffhanger says:

      Great quote TWP.

    • Dennis L. says:

      Disagree strongly. Because something happens does not mean it is necessary nor is it sufficient.
      For a community to exist it appears a degree of trust is necessary, Western Civilization for all its faults had that to a degree.
      Those that trust, have requisite skills will survive and prosper, those without trust will most likely end up as have previous civilizations.
      Trust is probably not sufficient, but it appears to be necessary. Also as in so many cases, perfection is the enemy of good which maybe another way of saying something is “sophomoric.”
      Batman is a poor substitute for the archetypes that have arisen and been put to practice over centuries of civilization; in my mind it is a point estimate.

      Dennis L.

      • JMS says:

        To survive a community needs internal cohesion, no doubt. Of course inside the tribe solidarity and mutual aide are crucial.
        The problem is when other internally cohesive communities covet the assets of your community, and launch vicious relentless attacks to kill and loot. It’s called war, have you ever heard of it? History books say it is one of the sports most favoured by men, especially in times of scarcity.

        • Jan Steinman says:

          There were no other extension cords in use at the time, and I take issue with “excessive use of extension cords” in the report.

          Actually, all-out warfare is an artifact of civilization, and anthropologist and archaeologists have little evidence that war has often been practiced among tribe-sized groups of people.

          • JMS says:

            A strict respect for the territoriality allowed to contain conflict between tribes, but according to Jared Diamond the natives of New Guinea lived in a constant state of conflict. If you crossed the border of your territory, even without warlike intentions, the members of the other tribe had almost a moral duty to kill you.
            But I agree that major wars were only possible beteween civilzations, because they can afford longer supply lines. The battles between tribes could hardly be fought at more than a walking day distance from home, and by the same reason they couldn’t last more than a couple of hours. But don’t kid yourself, HG’s societies were quite violent, not internally, but to strangers.

            • Jan Steinman says:

              don’t kid yourself, HG’s societies were quite violent, not internally, but to strangers.

              Yea, that’s why I stress that one of the best way of improving your odds is to get tight with some community.

              Doomsters here like to claim your neighbour is going to come take all your food. But if you’re already supplying your neighbour with food, they’re not going to interrupt A Good Thing.

            • Fast Eddy says:

              Your neighbour… one neighbour? How many neighbours do you have? Can you feed all of them?

              So you pass them a box of extra vegetables…. we do that in our neighbourhood too…. eggs get passed around too… wonderful!

              But when the box is not enough — guess what — they won’t be so wonderful then….

              We have lots of neighbours — many have lifestyle blocks — none would be self-sufficient — none of them save seeds — they all order from King Seeds — some have mentioned they tried to save seeds using King Seed vegetables — but the won’t grow — so they can’t be bothered to find seeds that will grow plants that can provide viable seeds — because it is cheap and easy just to order seeds from King…

              These are multi generation farming families… they know how to farm ….. come the end of BAU — they won’t be passing around food — because they won’t be growing much in the way of food ….

              Did I mention most of them irrigate with electric pumps? It gets mighty dry in some months….

              We also have about 500 neighbours in the small town that I can see from my porch — they have no space to grow anything… well maybe a lemon tree … they know where the lifestyle blocks are — they could walk to our place in about 45 minutes…

              Then there are 6 or 7 thousand more people in the next town — they also know where the lifestyle blocks are …. they could walk to us in less than 2 hours…. they could drive in ten minutes…

              How about you Jan – how many people within a two hour walk/10 minute drive of you?

              Can you feed all of them?

              When I realized that no matter if I planted our entire 5 hectares that there was no way I could feed the neighbours — and there was no way I could keep them from raiding my garden when the shops closed.

              It was then I recognized the futility of what I was doing — and I chose not to waste my time on such a ridiculous project…

              It’s why I will be skiing tomorrow morning.

            • Fast Eddy says:

              Having realized the futility of my endeavour …. to have continued … believing that I could overcome the problem of thousands of hungry neighbours …. would be make me:

              a) Naive
              b) St.upid
              c) Ins.ane
              d) All of the above

              If you said d) all of the above you have won a 5 pound sack filled with 7 pounds of sh.it!

            • Fast Eddy says:

              Have you considered building a castle — and sending your farming misfits to a military training course?

              It might come in handy when the bad guys show up wanting to take your food, rape your women (what’s the 18 yr old look like?) and enslave you….

              I’d also recommend you order one of these asap: http://www.ebay.com/bhp/mens-king-crown Splurge and go for the one with the sparkling tiara…. it will impress your peasants….

            • Fast Eddy says:

              ‘little evidence that war has often been practiced among tribe-sized groups of people’

              INTERTRIBAL WARFARE

              Intertribal warfare was intense throughout the Great Plains during the 1700s and 1800s, and archeological data indicate that warfare was present prior to this time.

              Human skeletons from as early as the Woodland Period (250 B.C. to A.D. 900) show occasional marks of violence, but conflict intensified during and after the thirteenth century, by which time farmers were well established in the Plains.

              After 1250, villages were often destroyed by fire, and human skeletons regularly show marks of violence, scalping, and other mutilations.

              Warfare was most intense along the Missouri River in the present-day Dakotas, where ancestors of the Mandans, Hidatsas, and Arikaras were at war with each other, and towns inhabited by as many as 1,000 people were often fortified with ditch and palisade defenses. Excavations at the Crow Creek site, an ancestral Arikara town dated to 1325, revealed the bodies of 486 people–men, women, and children, essentially the town’s entire population–in a mass grave.

              These individuals had been scalped and dismembered, and their bones showed clear evidence of severe malnutrition, suggesting that violence resulted from competition for food, probably due to local overpopulation and climatic deterioration. Violence among farmers continued from the 1500s through the late 1800s.

              Archeological data on war among the nomadic Plains hunters are few, but some nomads were attacking farmers on the edges of the Plains by at least the 1500s. By the eighteenth century, war was common among the nomads, apparently largely because of conflicts over hunting territories.

              More http://plainshumanities.unl.edu/encyclopedia/doc/egp.war.023

              That kills two birds with one stone….

              1. These tribes were constantly at war…

              2. One of the main reasons for war was —– drum roll please ——– FARMING.

              Yes farming — that totally unnatural unsustainable industry that wiped wiped out wildlife pissing off the hunter gatherers…..

              Farming was the original Mega Mall …. with parking lot….. huge tracts of land would have been slashed and burned by the farmers to make way for …. permaculture….

              I can imagine the hunter gatherers hated the farmers just as much as contemporary farmers hate Walmart…..

              And people think farming is ‘natural’

              Good grief…. it’s about as natural as Central Park….

            • Yes, indeed to land on 5ha only is an exercise in futility. Again, bed of your own making, so don’t complain to us, apart from some leveraged techno agrarian setups or very excellent (rare) ability to utilize intensive permies stuff, that’s not (and never been) enough to feed a family or to trade eventual surplus produce.. You need ~25-50ha at the minimum for still somewhat constrained existence, realistically expecting occasional year’s loss of production in some respect, etc.

            • Fast Eddy says:

              5 – 50 – 500… the more you have …. the bigger the target you become.

            • Fast Eddy says:

            • xabier says:

              In Dark Age England, you had to carry a horn, and blow it regularly when travelling to prove you had no ill-intentions – like sneaking up and raping and pillaging.

              If you did not, anyone had the right to kill you on the spot. Not detain, but kill!

              I’m not sure when that law was repealed, but is is very suggested of the level of violence and mistrust in that society.

              This is why people were grateful for strong kings and queens who chased bandits and hanged ’em high.

            • “5 – 50 – 500… the more you have …. the bigger the target you become.”

              Thanks for providing another confirmation of your peculiar ways..
              So, opted for ~5ha to supposedly blend in, but doing hastily superfluous research as usual, you are now dismayed by the small acreage, which is useless, and relatively close urban settings on top of it.. What a conundrum, why don’t you sell it or move permanently into megalopolis instead?

          • Fast Eddy says:

            Here’s an idea — try googling intertribal warfare _______ fill in the blank with: north america — south america — africa — central asia — asia ….

            You are seriously delusional if you believe that tribes were not at each others throats on a continual basis throughout history…

            Perhaps you have been listening to too much of this and taking way too much LSD?

            • xabier says:

              When thinking about agricultural communities, it shouldn’t be forgotten that deliberate wasting of the fields was a constant strategy.

              Of course, it often back-fired,as the army doing the burning and slaughtering often left itself without much to eat and then had to withdraw – not too bright, our species……..

        • Fast Eddy says:

          There a lot of people who think that slavery was primarily a US phenomenon … some sort of aberration…

          In fact it was a wide spread practice…. when wars were fought it was the NORM for the victor to bring in the slave traders who would bring men women and children to market …

          This was standard operating procedure.

          Not only are the hobby farms going to be easy targets for bad guys looking for immediate food — they are also going to provide knowledgeable labour to ensure a continued supply of food….

          Any women on these hobby farms are most certainly going to be raped.

          Permies live in a Koombaya world of delusion — so they do not believe this is what will happen.

          I guarantee this is what is going to happen — because this is what men have always done ‘in times of scarcity’

          • xabier says:

            Prisoners from the English Civil wars of the 17th century, and the wars in Ireland, were enslaved and sent to the West Indies.

          • Again your limited knowledge shines through every single post.

            There is a Slave and slave, in some societies “Slaves” were promoted to very high office, while ordinary guys of the master race/class could be slowly rotting in the dungeon or rapidly eliminated, not a rule but possibility based on meritocracy. Similarly, chances present themselves for knowledgeable guys, for example like Jan to navigate through new power structure to be.

            • Fast Eddy says:

              Jan doesn’t seem to be the type who gets along with anyone …. I don’t see him being promoted.

            • Fast Eddy says:

              ,,,

            • That’s exactly correct, because with such attitudes, you are likely not going to do much “seeing” about other’s promotions anyways by that time.. That will be likely onto guys with much more bearing on true reality and opportunities of the newly defined era.

            • xabier says:

              Slaves acquired by the Ottoman Turks in the Balkans and the Caucasus as payment of taxes were immediately given good clean clothes and regular food. Goodbye, peasant rags, lice and semi-starvation!

              As peasants, they had no real value, to their parents they were a burden but could be used to pay taxes, but to the new owner they were Property, and had to be taken care of.

              But let’s not mention the castration which awaited some, with 25 to 75% mortality rate. Even that was a profit to the Orthodox monks who specialised in doing the job…… 😦

    • Fast Eddy says:

      Civilization — made possible by cheap energy …. is about to end

  2. Cliffhanger says:

    Globalism is dying also as it is destroying the antique/obsolete financial system it is built on. When the SHTF, it too will die. Debt is all that is keeping it alive. As the available energy per capita continues to shrink, so shrinks the world economy and the ability to have globalism. The end of the party, so to speak.

    • xabier says:

      Given the propensity of complexity to deliver the most just before it all collapses, we could say ‘The End is always a Party.’

  3. Jan Steinman says:

    As Tainter asserts, excess complexity is killing us:

    The parliament of Australia’s New South Wales, entertaining a recent citizen petition to cut societal “waste,” admitted that the petition’s required 107,000 signatures (already on a USB stick) would, by law, have to be submitted in hard copy (4,000 pages), even though the pages would immediately be electronically scanned into a format for data storage.

    — from Chuck Shepherd’s News of the Weird.

    Humanity will go out with a whimper, not with a bang. In triplicate. With the approval of thirteen layers of bureaucrats.

    • Artleads says:

      — from Chuck Shepherd’s News of the Weird.

      I love lists, and think we need a great deal more of them.

  4. sindreweb says:

    can someone go here and teach the idiots::
    https://blog.jim.com/economics/peak-oil/

    • ITEOTWAWKI says:

      What a depressing life…

      • Joebanana says:

        ITEOTWAWKI-
        Still, that mommy in the green shorts looks pretty fine. Hope you avoided a hangover today;-)

        • ITEOTWAWKI says:

          She’s nice Jb, it’s the life these women (and men) aspire too that I find depressing…I was never a fan of the “Keeping up with the Joneses” lifestyle even before finding out about our insoluble predicament…always this more, more, more, bigger, bigger, bigger (although happy these people exist as they contribute to BAU)…it’s never enough!

          As for my night, I suffered all day today, but it was well worth it! 🙂

        • xabier says:

          I think she needs to follow the exercise routine taught me by Lt Col Sands, British Army (Retir’d): with me as Personal Instructor. 🙂

    • Well, not a problem, sooner or later, that bag and phone is sold to some kid on Asian ebay, the car is replaced by $8k nissan-renault econobox (~1000kg @ few dozen horses), which have to last at least 15yrs. The house is either sold, disassembled for material, or depending on location subdivided not for 5beds but 5 entire family units.. And that was almost the most positive scenario related to future upper middle class conditions only..

  5. Cliffhanger says:

    Musk America’s great comedian

    • psile says:

      Is this the mother of all stupidity?

    • Davidinatrillionyears says:

      of course, the real joke is on whoever invests in this Hyperloop madness.

      if there is government investment, then the joke is on the taxpayers.

    • Bergen Johnson says:

      It will only take a few weeks more of underground hyperloop tunneling and a person will be able to go from SF to Hong Kong in 35 minutes – Rome to Moscow in 20 minutes – Manila to Madrid in 70 minutes. Musk is springing the news on us that they have secretly been tunneling to connect every city on the planet. It’s gonna be a revolution in transportation and the knock on effect of such quick and easy transport will ignite the world economy into double digit growth for decades to come.

      All right, now I need a nap.

      • Fast Eddy says:

        Holy shit — Elon is stealing my idea!!!!

        I am sure there are FWers who recall my posts from a couple of years back suggesting that the CBs hire millions of workers and have them dig tunnels by hand connecting major cities — and paying them 50 bucks per hour.

        Son of a bitch — I knew I should have patented that perpetual economic motion concept.

        Now I have nothing … no recognition … no commission … no profit…. no equity … no private jet…. sweet f789 all….

        Where’s the bloody Abilify …. and the vodka….

  6. jerry says:

    A great business model, somebodies thinking properly …

    Montreal IGA Says It’s 1st Supermarket In Canada To Sell Produce Grown On Roof

    http://www.huffingtonpost.ca/2017/07/20/montreal-area-iga-the-first-supermarket-to-sell-produce-grown-on_a_23039954/?utm_hp_ref=ca-homepage

    • Artleads says:

      Comment

      “Peter SchellLeaderTodd Crawford
      The infrastructure, and the plants themselves, still place a load on the roof that a conventional roof is not designed to support. As this is Canada the fact it is designed for heavy snow loads likely gives it a safety factor, but that still means it’s going to carry a heavier load in the winter than an unencumbered roof. For one thing you’re likely to get heavy drifting due to the planters acting as wind breaks.

      For another thing just walking on a tar roof frequently, especially on very warm days, is enough to break down it’s integrity over time and cause leaks.

      Understand me. I’m all for this idea. Rooftop gardens on every building in the city would do wonderful things for the environment and air quality. I just question the practicality of doing it on a roof that was not designed to hold such a load.

      I’d certainly want to consult with an engineer before trying it myself.”

      I think some large stores are subdivided inside, with resulting weight-bearing walls under the roof. I’ve always thought it would work (where feasible) to build a boardwalk on the roof with the contact points resting immediately over the weight bearing walls. Then all the gardening paraphernalia would rest on the boardwalk. As to snow accumulation, i’m not sure if a mesh over the plants would help. Heating the roof might not work next to boardwalk, and would add energy costs.

    • Davidinatrillionyears says:

      okay, so it’s on the roof… no big deal…
      I’m looking at the photo and across the street I see a big open field!
      Just being wasted growing grass!

      it’s an all too familiar question: what’s wrong with this picture?

      • Artleads says:

        The store is growing food on the roof to serve its own business needs. It already owns the building, but it doesn’t own the land across the street. What drives the roof growing development is businesses, not some requirement to grow food wherever it’s possible to grow it.

    • psile says:

      So after the financial system collapses and their customers have no money, just for starters (I won’t even go into the whole break down in logistics/supply/control), how great of a business model will it remain?

      This “model” only works whilst BAU still does.

      • Fast Eddy says:

        Some have suggested roof top gardening post BAU ….

        I am not quite sure why anyone would do that …. you would have to haul the soil up to the roof — you’d have to haul your compost up there…. and you’d have to haul water up to the roof…

        That would expend more calories than would be produced no doubt…

        Maybe these same people think they will use the elevator… and that water will come out of the tap?

        Or maybe they have just not thought this through….

        • People tend to hauling compost (and other stuff) in many sort of impossible terrains.
          That’s the nature of the beast, but according to your own words you rather prefer Netflix, for “quality” entertainment and industrially produced lemonade. And of course can’t miss the BAU pleasures of visiting restaurants, which are usually filthy places as many studies clearly demonstrated even about their top level: various resistant microbes in the kitchen/fridge, personal purposely not washing hands after toilet business (as “payback” to patrons and owner), reusing of fat oils etc. Simply, fool’s paradise… as usual..

    • Davidinatrillionyears says:

      the conclusion “Physical resources are effectively infinite, in that physical limits to growth are unlikely to be a significant problem in the reasonably foreseeable future. The problem is social decay.”

      so he obviously doesn’t understand data and that the key resource is oil.
      looking at the “foreseeable future”, the latest data shows that there will be adequate oil supplies through the 2020’s with perhaps a slight decline.
      But then there will be a severe decline in the 2030’s.

      And correlation is not causation, but surely it will follow that economic contraction caused by oil shortages in the 2030’s will certainly then cause “social decay”.

    • Lastcall says:

      The one thing we learn from history is that we don’t learn from history…..or some such thing! And this guy seems to epitomise this.

      ‘Something really drastic must have happened to the ancient Maya at the end of the Classic Period in the 9th Century. Within a short period of time, this advanced civilization in Central America went from flourishing to collapsing – the population dwindling rapidly and monumental stone structures, like the ones built at Yucatán, were no longer being constructed. The reason for this demise remains the subject of debate even today.

      Now, researchers at the Vienna University of Technology (TU Wien) may have found the explanation: the irrigation technology that served the Mayans well during periods of drought may have actually made their society more vulnerable to major catastrophes, according to a new study published in Water Resources Research, a journal of the American Geophysical Union’.

      http://energyskeptic.com/page/2/

    • Bergen Johnson says:

      Maybe ‘Jim’ should learn about EROEI. It’s been declining for a long time.

  7. Davidinatrillionyears says:

    hackers steal digital currency…
    http://www.breitbart.com/tech/2017/07/21/hackers-steal-millions-worth-of-ethereum-in-week-of-crypto-heists/
    it would be funnier if some of the hackers weren’t going to give it back.

    so how do you steal something that is actually nothing?

  8. I am sorry. It will probably be a day or two until I get a new post up. I have been involved with some family things including the funeral of a close relative.

    • Bergen Johnson says:

      I think a good post, at some time or another could be; ‘Why collapse doesn’t happen even with all the factors outlined and discussed on OFW’. I mean there’s got to be a reason or reasons why BAU, in the parlance of the 70’s, just keeps on trucking.

      • psile says:

        A better topic for discussion might be why trolls keep raising the same things over and over again, when they’ve already been explained by the blog owner and others, ad nauseum.

        • Fast Eddy says:

          !!!!!!!!!

          I can understand the desire to have new participants on FW — but when they endlessly ignore logic and facts and just post the same rubbish over and over again —- they should be shown the door.

          I prefer not to spend the little remaining time left in the company of MOREons.

      • JT Roberts says:

        How about “Why some people need to go back to school to learn the difference between the 9th and 15th century’s”
        Or maybe “Why The Dunning-Kruger effect proves that ignorance is more prolific than intelligence. “

    • Davidinatrillionyears says:

      sorry about your loss.

      blogs are minor compared to real life.

    • xabier says:

      My condolences, Gail.

    • Do hope things are ok for you Gail.

      I lost a close lady friend recently and did a lot of thinking (more so than usual as my brain never shuts up).

      I do find that the folk here give me a great deal of peace & a deep sense of reality that I can’t find elsewhere. The information & links are well worth reading & the comments are great. I have kept so many comments to re read when this world closes it’s mindset around me & I gasp for fresh air.

      Xabier’s comments have a deep meaning to me………………..the post he wrote on the man who went to live in the cave as god turned the world mad to punish them & who subsequently wanted to join them due to his loneliness at being sane struck a cord with me as did his comment:

      Human beings really are rather creepy animals,
      the urge to get away from them is an indication of sanity, often.

      As was ITEOTWAWKI’s quote, It’s no measure of health to be well adjusted in a profoundly sick society.

      It’s the reality of the situation, the deep understanding of the predicament we are in that keeps me here. I feel every morning I wake up a deep sense of dread in my heart as the world round me wallows in the depravity that is this warped, deeply sick & alienated culture that I too am stuck in.

      My eyes glaze over & my heart feels like lead when I read the comments by deluded foaming at the mouth techno wet dreamers…………………..Are they so wrapped up in the misery this culture has already caused to lie awake dreaming of Elon Musk & solar panels………………………Do they have no empathy for creatures other than themselves?

      I fear their self righteousness is but a veiled expression of selfishness & the all encompassing yearning of human progress & superiority that holds this culture to it’s dream…………………

      I too used to be a town crier for renewable’s. I’ve been to every “doomer” blog/site but really will go no further than here, this feels like home, this place feels right.
      So many different characters here, all with different personalities but all united by a reality that there is little chance any of us here will get out of what is coming……………………..

      Anyway thanks FE, psile ITEO for your forthright comments & Greg Marchala & JT for the clear & easy to understand posts on energy etc (& yet the idiots still argue with you here!!) Joebanana, you have been a source of stability & decency here.

      But especially I want to say thanks to Xabier & Artleads. I often have to re read your comments again as there is so much to absorb in them.

      Thanks all for your time & Gail I truly hope you find some peace & solace at this time.

      Brendon

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