World GDP in current US dollars seems to have peaked; this is a problem

World GDP in current US dollars is in some sense the simplest world GDP calculation that a person might make. It is calculated by taking the GDP for each year for each country in the local currency (for example, yen) and converting these GDP amounts to US dollars using the then-current relativity between the local currency and the US dollar.

To get a world total, all a person needs to do is add together the GDP amounts for all of the individual countries. There is no inflation adjustment, so comparing GDP growth amounts calculated on this basis gives an indication regarding how the world economy is growing, inclusive of inflation. Calculation of GDP on this basis is also inclusive of changes in relativities to the US dollar.

What has been concerning for the last couple of years is that World GDP on this basis is no longer growing robustly. In fact, it may even have started shrinking, with 2014 being the peak year. Figure 1 shows world GDP on a current US dollar basis, in a chart produced by the World Bank.

Figure 1. World GDP in “Current US Dollars,” in chart from World Bank website.

Since the concept of GDP in current US dollars is not a topic that most of us are very familiar with, this post, in part, is an exploration of how GDP and inflation calculations on this basis fit in with other concepts we are more familiar with.

As I look at the data, it becomes clear that the reason for the downturn in Current US$ GDP is very much related to topics that I have been writing about. In particular, it is related to the fall in oil prices since mid-2014 and to the problems that oil producers have been having since that time, earning too little profit on the oil they sell. A similar problem is affecting natural gas and coal, as well as some other commodities. These low prices, and the deflation that they are causing, seem to be flowing through to cause low world GDP in current US dollars.

Figure 2. Average per capita wages computed by dividing total “Wages and Salaries” as reported by US BEA by total US population, and adjusting to 2016 price level using CPI-Urban. Average inflation adjusted oil price is based primarily on Brent oil historical oil price as reported by BP, also adjusted by CPI-urban to 2016 price level.

While energy products seem to be relatively small compared to world GDP, in fact, they play an outsized role. This is the case partly because the use of energy products makes GDP growth possible (energy provides heat and movement needed for industrial processes), and partly because an increase in the price of energy products indirectly causes an increase in the price of other goods and services. This growth in prices makes it possible to use debt to finance goods and services of all types.

A decrease in the price of energy products has both positive and negative impacts. The major favorable effect is that the lower prices allow the GDPs of oil importers, such as the United States, European Union, Japan, and China, to grow more rapidly. This is the effect that has predominated so far.

The negative impacts appear more slowly, so we have seen less of them so far. One such negative impact is the fact that these lower prices tend to produce deflation rather than inflation, making debt harder to repay. Another negative impact is that lower prices (slowly) push companies producing energy products toward bankruptcy, disrupting debt in a different way. A third negative impact is layoffs in affected industries. A fourth negative impact is lower tax revenue, particularly for oil exporting countries. This lower revenue tends to lead to cutbacks in governmental programs and to disruptions similar to those seen in Venezuela.

In this post, I try to connect what I am seeing in the new data (GDP in current US$) with issues I have been writing about in previous posts. It seems to me that there is no way that oil and other energy prices can be brought to an adequate price level because we are reaching an affordability limit with respect to energy products. Thus, world GDP in current dollars can be expected to stay low, and eventually decline to a lower level. Thus, we seem to be encountering peak GDP in current dollars.

Furthermore, in the years ahead the negative impacts of lower oil and other energy prices can be expected to start predominating over the positive impacts. This change can be expected to lead to debt-related financial problems, instability of governments of oil exporters, and falling energy consumption of all kinds.

Peak Per Capita Energy Consumption Is Part of the Problem, Too

One problem that makes our current situation much worse than it might otherwise be is the fact that world per capita energy consumption seems to have hit a maximum in 2013 (Figure 3).

World daily per capita energy consumption

Figure 3. World Daily Per Capita Energy Consumption, based on primary energy consumption from BP Statistical Review of World Energy and 2017 United Nations population estimates.

Surprisingly, this peak in consumption occurred before oil and other energy prices collapsed, starting in mid-2014. At these lower prices, a person would think that consumers could afford to buy more energy goods per person, not fewer.

Per capita energy consumption should be rising with lower prices, unless the reason for the fall in prices is an affordability problem. If the drop in prices reflects an affordability problem (wages of most workers are not high enough to buy the goods and services made with energy products, such as homes and cars), then we would expect the pattern we are seeing today–low oil and other energy prices, together with falling per capita consumption. If the reason for falling per capita energy consumption is an affordability problem, then there is little hope that prices will rise sufficiently to fix our current problem.

One consideration supporting the hypothesis that we are really facing an affordability problem is the fact that in recent years, energy prices have been too low for companies producing oil and other energy products. Since 2015, hundreds of oil, natural gas, and coal companies have gone bankrupt. Saudi Arabia has had to borrow large amounts of money to fund its budget, because at current prices, tax revenues are too low to fund it. In the United States, investors are cutting back on their support for oil investment, because of the continued financial losses of the companies and evidence that approaches for mitigating these losses are not really working.

Which Countries Are Suffering Falling GDP in Current US Dollars?

With lower oil prices, Saudi Arabia is one of the countries with falling GDP in Current US$.

Figure 4. Increase in GDP since 1990 for Saudi Arabia in current US dollars, based on World Bank Data.

Saudi Arabia pegs its currency to the dollar, so its lower GDP is not because its currency has fallen relative to the US dollar; instead, it reflects a situation in which fewer goods and services of all kinds are being produced, as measured in US dollars. GDP calculations do not consider debt, so Figure 4 indicates that even with all of Saudi Arabia’s borrowing to offset falling oil revenue, the quantity of goods and services it was able to produce fell in both 2015 and 2016.

Other oil-producing countries are clearly having problems as well, but data is often missing from the World Bank database for these countries. For example, Venezuela is clearly having problems with low oil prices, but GDP amounts for the country are missing for 2014, 2015, and 2016. (Somehow, world totals seem to include estimates of the total omitted amounts, however.)

Figure 5 shows similar ratios to Figure 4 for a number of other commodity producing countries.

Figure 5. GDP patterns, in US current dollars, for selected resource exporting countries, based on World Bank data.

A comparison of Figures 4 and 5 shows that the GDP patterns for these countries are similar to that of Saudi Arabia. Because resources (including oil) do not account for as large a share of GDP for these countries as for Saudi Arabia, the peak as a percentage of 1990 GDP isn’t quite as high as for Saudi Arabia. But the trend is still downward, with 2014 typically the peak year.

We can also look at similar information for the historically big consumers of oil, coal and natural gas, namely the United States, the European Union, and Japan.

Figure 6. Increase in GDP since 1990 for the United States, the European Union, and Japan, in current US dollars, based on World Bank data.

Here, we find the growth trend is much more subdued than for the countries shown in the previous two charts. I have purposely put the upper limit of the scale of this chart at 6 times the 1990 GDP level. This limit is similar to the upper limit on earlier charts, to emphasize how much more slowly these countries have been growing, compared to the countries shown in Figures 4 and 5.

In fact, for the European Union and Japan, GDP in current US$ is now lower than it has been in recent years. Figure 6 is telling us that the goods and services produced in these countries are now lower in US dollar value than they were a few years ago. Since part of the cost of goods and services is used to pay wages, this lower relativity indirectly implies that the wages of workers in the EU and Japan are falling, relative to the cost of buying goods and services priced in US dollars. Thus, even apart from taxes added by these countries, consumers in the EU and Japan have been falling behind in their ability to buy energy products priced in US dollars.

Figure 6 indicates that the United States has been doing relatively better than the European Union and Japan, in terms of the value of goods and services produced each year continuing to grow. If we look back at Figure 2, however, we see that even in the US, wage growth has lagged far behind oil price increases. Thus, the US was also likely headed toward an affordability problem relating to goods and services made with oil.

The Asian exporting nations have been doing relatively better in keeping their economies growing, despite the downward pressure on energy prices.

Figure 7. Increase in GDP since 1990 for selected rapidly growing Asian exporting countries in current US dollars, based on World Bank data.

The two most rapidly growing countries are China and Vietnam. There seems to be a recent slowing of their growth rates, but no actual downturn.

India, Pakistan, and the Philippines are growing less rapidly. They do not seem to be experiencing any downturn at all.

Considering the indications of Figure 4 through 7, it appears that only a relatively small share of countries have experienced rising GDP in current US dollars. Although we have not looked at all possible groupings, the countries that seem to be doing best in terms of rising current US$ GDP are countries that are exporters of manufactured goods, including the Asian countries shown. Countries that derive significant GDP from producing energy products and other commodities seem to be experiencing falling GDP in current US dollars.

To fix the problems shown here, we would need to get prices of oil and other energy products back up again. This would indirectly raise prices of many other products as well, including food, new vehicles, and new homes. With lagging wages in many countries, this would seem to be virtually impossible to accomplish.

The Wide Range of GDP Indications We See 

In this post, I am talking about GDP of various countries, converted to a US$ basis. This is not quite the same as the GDP that we normally read about. It is not until a person starts working with world data that a person appreciates how different the various GDP and inflation calculations are.

GDP in US dollars is very important because energy products, including oil, are generally priced in US$. This seems to be true, whether or not the currency used in the actual transaction is US$. See Appendix A for charts showing the close connection between these two items.

The type of GDP is generally reported is inflation-adjusted (also called “real”) GDP. The assumption is made that no one will care (very much) about inflation rates. In general, inflation-adjusted GDP figures are much more stable than those in Current US$. This can be seen by comparing world GDP in Figure 8 with that shown in Figure 1.

Figure 8. GDP in 2010 US dollars, for the world and for the United States, based on World Bank data.

Using inflation-adjusted world GDP data, there doesn’t seem to be any kind of crisis ahead. The last major problem was in the 2008-2009 period. Even the impact of this crisis appears to be fairly small. The 2008-2009 crisis shows up more distinctly in the Current US$ amounts plotted in Figure 1.

World GDP growth figures that are published by the World Bank and others combine country by country data using some type of weighting approach. Economists tend to use an approach called Purchasing Power Parity (PPP). This approach gives a great deal more weight to developing nations than the US dollar weighted approach used elsewhere in this post. For example, under the PPP approach, China seems to get a weighting of about 1.9 times its GDP in US$; India seems to get a weighting of about 3.8 times its GDP in US$. The United States gets a weight of 1.0 times its GDP in US$, and the weights for developed nations tend to be fairly close to 1.0 times their GDP in US$. The world GDP we see published regularly should be called “inflation-adjusted world GDP, calculated with PPP weights.”

The relationship among the three types of GDP can be seen in Figure 9. It is clear that GDP growth in Current US$ is far more variable than the inflation-adjusted growth rate (in 2010 US$). PPP inflation-adjusted GDP growth is consistently higher than GDP growth with US dollar weighting.

Figure 9. World GDP Growth in three alternative measures: Current dollars, Inflation-adjusted GDP is in 2010 US$ and adjusted to purchasing power parity (PPP).

It is also clear from Figure 9 that there is also a big “Whoops” in the most recent years. Economic growth is at a record low level, as calculated in Current US$.

World “Inflation” Indications

The typical way of calculating inflation is by looking at prices of a basket of goods in a particular currency, such as the yen, and seeing how the prices change over a period of time. To get an inflation rate for a group of countries (such as the G-20), inflation rates of various countries are weighted together using some set of weights. My guess is that these weights might be the PPP weights used in calculating world GDP.

In Figure 10, I calculate implied world inflation using a different approach. Since the World Bank publishes World GDP both in 2010 US$ and in Current US$, I calculate the implied world inflation rate by comparing these two sets of values. (Some people might call what I am calculating the implicit price deflator for GDP, rather than an inflation rate.) I use three-year averages to smooth out year-to-year variability in these amounts.

Figure 10. World inflation rate calculated by comparing reported World GDP in Current US$ to reported World GDP in 2010 US$. Both of these amounts are available at the World Bank website.

The implied world inflation rates using this approach are fairly different from published inflation rates. In part, this is because the calculations take into account changing relativities of currencies. There may be other factors as well, such as the inclusion of countries that would not normally be included in aggregations. Inflation rates tend to be high when demand for energy products is high, and low when demand for energy products is low.

Figure 10 shows that, on a world basis, there have been negative inflation rates three times since 1963–in approximately 1983-1984; in the late 1990s to early 2000s; and since about 2014. If we compare these dates to the oil price and energy consumption data on Figures 2 and 3, we see that these time periods are ones that are marked by falling per capita energy consumption and by low oil prices. In some sense, these are the time periods when the economy is/was trying to stall, for lack of adequate demand for oil.

The workaround used to “fix” the lack of demand in the late 1990s to early 2000s seems to have been an increased focus on globalization. China’s growth in particular was very important, because it added both a rapidly growing supply of cheap energy from coal and a great deal of demand for energy products. The addition of coal effectively lowered the average price of energy products so that they were again affordable by a large share of the world population. The availability of debt to pull the Chinese and other Asian economies forward was no doubt of importance as well.

The United States has been fairly protected from much of what has happened because its currency, the US Dollar, is the world’s reserve currency. If we look at the inflation rate of the United States using data of the US Bureau of Economic Analysis, the last time the United States had a substantial period of contracting prices was in the US Depression of the 1930s. It is quite possible that such a situation existed worldwide, but I do not have world data for that period.

Figure 11. US inflation rate (really “GDP Deflator”) obtained by comparing US GDP in 2009 US$ to GDP in Current US $, based on US Bureau of Economic Analysis data.

It was during the Depression of the 1930s that debt defaults became widespread. It was only through deficit spending, including the significant debt-based funding for World War II, that the problem of inadequate demand for goods and services was completely eliminated.

How Do We Solve Our World Deflation Crisis This Time 

There seem to be three ways of creating demand for goods and services.

[1] A growing supply of cheap-to-produce energy products is really the basic way of increasing demand through economic growth.

If there are cheap-to-produce energy products available, a growing supply of these energy products can be used to increasingly leverage human labor, through the use of more and better “tools” for the workers. When workers become increasingly more productive, their wages naturally rise. It is this growing productivity of human labor that generally produces the rising demand needed to maintain the economic growth cycle.

As growth in energy consumption slows and then declines (Figure 3), this productivity growth tends to disappear. This seems to be part of today’s problem.

[2] Increasing the amount of debt outstanding can work to make the energy extraction system work more effectively, by raising the price that consumers can afford to pay for high-priced goods.

This increasing ability to pay for high-priced goods seems to come in two ways:

(a) The debt itself can be used to pay for goods, making these goods more affordable on a month-to-month or year-to-year basis.

(b) Increased debt can lead to increased wages for wage earners, because some of the increased debt ultimately goes to create new jobs and to pay workers. Figure 12 shows the positive association that increasing debt seems to have with inflation-adjusted wages in the United States.

Figure 12. Growth in US Wages vs. Growth in Non-Financial Debt. Wages from US Bureau of Economics “Wages and Salaries.” Non-Financial Debt is discontinued series from St. Louis Federal Reserve. (Note chart does not show a value for 2016.) Both sets of numbers have been adjusted for growth in US population and for growth in CPI Urban.

Debt is, in effect, the promise of future goods and services made with energy products. These promises are often helpful in allowing an economy to expand. For example, businesses can issue bonds to provide funds to expand their operations. Selling shares of stock acts in a manner similar to adding debt, with repayment coming from future operations. In both cases, the payback can occur, if energy consumption is in fact growing, allowing the output of the business to expand as planned.

Once world leaders decide that debt levels are too high, or need to be controlled better, we are likely headed for trouble, because debt can be very helpful in “pulling the economy forward.” This is especially the case if productivity growth is low because per capita energy consumption is falling.

[3] Rebalancing of currency relativities to the US dollar.

Rebalancing currencies to different levels relative to the dollar seems to play a major role in determining the “inflation rate” calculated in Figure 10. Currency rebalancing also plays a major role in determining the shape of the GDP graph in current US$, as shown in Figure 1. In general, the higher the average relativity of other currencies to the US$, the higher the demand for goods and services of all kinds, and thus the higher the demand for energy products.

One problem in recent years is that, in some sense, the average relativity of other currencies to the US dollar has fallen too low. The fall in relativities took place when the US discontinued its use of Quantitative Easing in late 2014.

Figure 13. Monthly Brent oil prices with dates of US beginning and ending QE.

The price of oil and of other energy products dropped steeply at that time. In fact, in inflation-adjusted terms, oil prices had been falling even prior to the end of QE. (See Figure 2, above.) The shift in the currency relativities made oil and other energy products more expensive for citizens of the European Union, Japan, and most of the commodity producing countries shown in Figures 4 and 5.

The ultimate problem underlying this fall in average relativities to the US dollar is that there is now a disparity between the prices that consumers around the world can afford to pay for energy products, and the prices that businesses producing energy products really need. I have written about this problem in the past, for example in Why Energy-Economy Models Produce Overly Optimistic Indications.

At this point, none of the three approaches for solving the world’s deflation problem seem to be working:

[1] Increasing the supply of oil and other energy products is not working well, because diminishing returns has led to a situation where if prices are high enough for producers, they are too high for consumers to afford the finished goods made with the energy products.

[2] World leaders have decided that we have too much debt and, indeed, debt levels are very high. In fact, if energy prices continue to be low, a significant amount of debt currently outstanding will probably be defaulted on.

[3] Countries generally don’t want to raise the exchange rates of their currencies to the dollar, because lower exchange rates tend to encourage exports. If the United States raises its interest rates, either directly or by selling its QE bonds, the level of the US dollar can be expected to rise relative to other currencies. Thus, other currencies are likely to fall even lower than they are today, relative to the US dollar. This will tend to make the problem with low oil prices (and other energy prices) even worse than today.

Thus, there seems to be no way out of our current predicament.

Conclusion

The world economy is in a very precarious situation. Many of the world’s economies have found that, measured in current US$, the goods and services they are producing are less valuable than they were in 2013 and 2014. In particular, all of the oil exporting nations have this problem. Many other countries that are producing commodities have the same problem.

Governments around the world do not seem to understand the situation we are facing. In large part, this is happening because economists have built models based on their view of how the world works. Their models tend to leave out the important role energy plays. GDP growth and inflation estimates based on PPP calculations give a misleading view of how the economy is actually operating.

We seem to be sleepwalking into an even worse version of the Depression of the 1930s. Even if economists were able to figure out what is happening, it is not clear that there would be a good way out. Higher energy prices would aid energy producers, but would push energy importing nations into recession. We seem to be facing a predicament with no solution.

Appendix 

Growing Inflation-Adjusted GDP Comes From Growing Energy Consumption

We often hear that GDP no longer depends on energy consumption, but this simply is not true. Energy consumption is needed for practically every industrial process, because energy causes the physical transformations that are need (including heat, light, and movement). Even services that only require a lighted, air-conditioned office and the use of computers require energy consumption of some type.

An industrialized country can outsource manufacturing of many of its goods to other countries, but the need for energy products goes with this outsourcing. The transfer of manufacturing to lesser developed countries tends to stimulate building in these countries. As a result, on a world basis, the amount of energy consumed tends to remain close to unchanged.

Using data for 1965 through 2016, we find the following relationship between inflation-adjusted world GDP and world energy consumption:

Figure A1. World growth in energy consumption vs. world GDP growth. Energy consumption from BP Statistical Review of World Energy, 2017. World GDP is GDP in US 2010$, as compiled by World Bank.

Another way of displaying the same data is as an X, Y graph. A very high long-term correlation can be observed on this basis.

Figure A2. X-Y graph of world energy consumption (from BP Statistical Review of World Energy, 2017) versus world GDP in 2010 US$, from World Bank.

This high level of correlation can be seen for other groupings as well. For example, for the grouping Middle East and North Africa, there is a high level of correlation between energy consumption and GDP.

Figure A3. X-Y graph showing correlation between energy consumption and GDP in the Middle East and North Africa.

If a person calculates the implications of this fitted line, energy consumption for these oil-producing countries is actually growing faster than inflation-adjusted GDP for these countries. This type of trend is to be expected if oil-producing countries are in some sense becoming less efficient in producing oil. This could happen for a number of reasons. One is that the easiest to extract oil is extracted first, leaving the more expensive to extract oil to be extracted later. Another possible reason for this trend is rising human populations in oil producing countries. These people drive cars and live in air conditioned buildings, driving up energy consumption for these countries. Whatever the cause, this loss of efficiency in oil production can be expected to at least partially offset growing efficiencies elsewhere in the system.

 

 

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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2,988 Responses to World GDP in current US dollars seems to have peaked; this is a problem

    • Cliffhanger says:

      Every major monthly US government economic report – employment, GDP, inflation – is little more than a fraudulent propaganda tool used to distort reality for the dual purpose of supporting the political and monetary system – both of which are collapsing – and attempting to convince the public that the economy is in good shape. This is exactly what the Soviet Union did before they collapsed as well.

      • Davidin100trillionyears says:

        wow, I think I agree with your entire paragraph.

        “the public” may not even get it when oil production peaks in the mid 2020’s.

        the SOON coming recession will most likely not change perceptions.

        “Oh, no, we’ve had many recessions before. No big deal, we’ll recover.”

        it will take the Great Depression 2.0 to convince “the public”.

        likely about the year 2030.

        for now, BAU!

        • Cliffhanger says:

          “the public” may not even get it when oil production peaks in the mid 2020’s

          Source?

          • Davidin100trillionyears says:

            Dennis Coyne, eh, Mastermind?

            he doesn’t claim perfection, but he gives high and low scenarios.

            actual oil production in the recent past has been within the range of his high and low projections.

            I’m very impressed by his adeptness with world oil data.

            He projects the oil peak about 2025.

            but plus or minus 5 years.

            that’s a modest prediction.

            • Cliffhanger says:

              So you are going to ignore all the claims made by the IEA,Saudi’s,UAE,HSBC,UBS based on reason. And believe Dennis’s claims based on faith. LOL Ill have to leave you with your certainties then. LOL

            • Cliffhanger says:

              Here you go David.. A peer reviewed science paper from the Journal of Fuel. That matches what you WANT to believe. Peak oil 2025. Now you have an actual reason.

              http://www.sciencedirect.com/science/article/pii/S0016236114010254

            • JT Bilkshire says:

              Dennis Coyne is a good source of oil data information. He took over peakoilbarrel from Ron Patterson, and does a good job of putting together the latest information. He’s not hyping or non-hyping info., so I would say good for you David that you are using that as a good source of information.

            • Jesse James says:

              My guess is that the 2025 predictions and the science direct article are assuming consumers will pay whatever price of oil that develops, due to supply and demand. I subscribe to Gail’s theory that we cannot afford higher priced oil, therefore Mr Davidintrillion yrs is likely wrong in repeating those predictions.

            • i1 says:

              Perhaps the Federal Government will at some point declare electronic benefits valid for fuel purchases.

        • xabier says:

          Very true: my Argentinian relations didn’t grasp the magnitude and significance of what happened in 2008, as 1/ the true and fundamental nature of the crisis was misrepresented by the media, and the effects stifled by swiftly-introduced QE, etc, and 2/ they have become so used to economic turbulence in Argentina that it all merely seemed to be just another blip of the same kind.

          Generally I have noticed that if people haven’t suffered directly through a loss of employment, savings, and so on, they tend to remain blissfully indifferent to what is happening, unless they have an ideological agenda which sensitizes them to certain events. Human nature.

          Perception filters as well as general level of intelligence are always at work. One can see the evolutionary benefit of this.

          • Tim Groves says:

            Very true indeed: We are like the people who watch the tide go out a mile and rush down to the beach to marvel at the phenomenon, unaware that within a few minutes they will be engulfed by a tsunami. Smart in such a situation people run for the hills. But what is an equivalent place of safety in our situation? According to Eddy, there is no safe place, and I fear he may be correct. So should we keep saving for our pensions, or hoard gold and silver, or binge everything away now and max out those credit cards?

            • xabier says:

              I suggest as a motto and guide for the Last Days, the song from ‘My Fair Lady’:

              ‘A bit of what you fancy does you good’!

              One can go mad fretting over savings, pensions, investments, prepping, location…..

              But it’s quite straightforward to keep one’s spirits up,and those of other people.

              Prepping is good if it makes you feel better (and food, fuel and water stocks are surely wise, even considering a mere temporary cyber attack on infrastructure rather than The End) ) but if it becomes a neurotic addiction or source of stress, just drop it. If your wife hints at divorce because of it and starts to think you are a nut-job, not so good.

              Seeing some things around the world rather than saving everything one can seems quite rational, and it will probably keep wifey happy but if it becomes a neurotic desire to fit everything in at the expense of sensible precautions and leads into debt, not so good.

              And so on.

              The place of safety is a sane mind.

            • timl2k11 says:

              “The place of safety is a sane mind.”

              Very good!!

            • grayfox says:

              In addition to what has been said already, I would add that its best to focus on things that are in your control. Focusing on your overall personal health and fitness can bring positive results. Also having skills that make you valuable to your community is a good thing too – could be considered real wealth.

            • Artleads says:

              “Prepping is good if it makes you feel better (and food, fuel and water stocks are surely wise, even considering a mere temporary cyber attack on infrastructure rather than The End) ) but if it becomes a neurotic addiction or source of stress, just drop it. If your wife hints at divorce because of it and starts to think you are a nut-job, not so good.”

              Ditto to that. It’s no one’s job to save the world (unless they get their jollies that way). The world has to save itself…if it cares to.

            • Fast Eddy says:

              I vote for the Binge Strategy — with limits… because this could go on for longer than you can remain solvent…

      • Lastcall says:

        Which is why i think the population will become tribal before the financial system collapses. It would appear that workers/consumers/investors are no longer needed, just modelling and the stockmarket.
        Incidents such as in Spain will fracture the image, and the trust horizon will be localised. Globalism and all it requires will be shown to be a facade.

        • Cliffhanger says:

          Back in 2006 the Corporate leaders of the world were seen as the people who ruled the world. Now they are seen as the people who ruined the world. No company in their right mind would name themselves global anything anymore.

          • xabier says:

            Yes, that’s a significant turning-point in perceptions.

            It is truly becoming a dirty word, negative connotations out-weighing those which were once deemed positive.

            Unfortunately, it is accompanied by the return and accentuation of class and racial/religious hatreds: back to the 1920’s and 30’s, full-speed.

      • Fast Eddy says:

        +++++++

    • JT Bilkshire says:

      Regarding the govt. retail sales report; they probably don’t do anything more than add small percentages to the numbers they are given. It probably takes all of 15 minutes to complete.

    • A person becomes a little cynical.

  1. Cliffhanger says:

    INSANE: I just watched a TV commercial for Citi Bank were they are promoting off shore wind power.

    • timl2k11 says:

      Ah yes the Block Island wind farm. The project they financed was insane as well. 5 freaking turbines for an obscene amount of money, 300 million dollars. The electricity is 25¢/kWH and goes up 3% per annum. Wind is a parasite in so many ways. The turbines themselves are made with cheap coal and natural gas energy. No one in there right mind would base a manufacturing outfit on electricity as expensive as a quarter a kWh. So it never really pays for itself.

      • alfredmelbourne says:

        Here is Australia, wind is at this moment providing 0.25% of the electric demand in Queensland, New South Wales and Victoria (where most people live). We also have the highest electricity prices in the world – 2.5 times those in the USA. Check it out:

        • Fast Eddy says:

          Imagine what you’d be paying if ‘renewable’ energy was say 20% of the mix….

        • Jesse James says:

          California Gas-Fired Power Plant Files for Bankruptcy

          By Institute for Energy Research — Global Warming-Energy-Environment
          The La Paloma natural gas plant in California filed for bankruptcy last December because it was not getting enough operating time to cover its costs due to solar and other renewable energy receiving preference.
          The plant, which serves as back-up to the state’s renewable generating technologies, was also denied a reliability charge by the state that would have allowed it to continue to operate. The owners project an annual loss of $39 million without a reliability contract or other support. In its bankruptcy filing, the plant owners listed assets of between $100 million and $500 million and liabilities of $500 million to $1 billion. La Paloma is a 1200-megawatt merchant plant located 110 miles northwest of Los Angeles and is able to serve both the San Francisco and Los Angeles markets.

      • xabier says:

        Speak no evil of Good Power! Counter-Revolutionary Negativism will be stamped out! 🙂

  2. Cliffhanger says:

    Why the Technological System Will Destroy Itself –
    Written by the UnaBomber from Prison 2011
    https://theanarchistlibrary.org/library/ted-kaczynski-why-the-technological-system-will-destroy-itself

    • xabier says:

      Wonderful link, thanks!

      I’ve just been reading the Journal made by Malthus when he toured Norway in 1799 – and noting the ecological and technological restrictions under which the Norwegians lived at that time.

      A very hard life, with the springs and summers spent recovering from the preceding winter, and preparing for the next one, haunted by the possibility of famine.

      One can see why Scandinavians tried so hard to settle in kinder places like England, Italy and France during the Viking Age. It also explains their move to North America in the 19th century.

      But a very resilient society. The contrast with our techno-nightmare today could not be greater.

      • Watch Synnove Solbaken, 1919, which should be somewhere in youtube based upon a 1860 book by a Nobel prize winner whose name no one remembers. (That book is not available in English for whatever reason – I read it, out of all languages, in Japanese.)

    • Nope.avi says:

      Oh, please. The Unabomber did not go mad from figuring out what we know now.
      He’s not more rational than the average person…he was just another serial killer with autistic traits.

      He admits that his whole crusade against “industrial society” was a cover for him to take revenge on people who wronged him. Ironically, he is just like a member of the Leftism movement he spent quite a bit of time in his manifesto critiquing. He latched onto a popular movement, environmentalism, and used to overcome his feelings of low self esteem and social inferiority.

      Industrial Society and his Future ” is nothing more than a very profound attempt at self-deception, to intellectualize his very emotional and personal reasons for killing as”Technology’s fault”. The funny thing about his attempt at self-deception, is that some people thought he was genuinely interested in human nature or the environment, despite the fact that his journal entries suggest that that was a lie.

      Don’t you mind me, folks. Go on and keep glorifying this serial killer as some kind of hero. Just keep in mind that’s exactly what he wants.

      • Nope.avi says:

        *human nature
        should be

        “human happiness”

      • Mark says:

        I don’t know why you think there is a glorifying of a serial killer going on. Seems like an ultracrepidarian response.How do you know these things?
        I don’t follow this blog, but it was used as a reference to related subject matter. The content seems to make much more sense than your post. (Bates understands OFW)
        http://peaksurfer.blogspot.com/2013/06/the-unibomber-in-age-of-limited-options.html

        • Nope.avi says:

          “I don’t know why you think there is a glorifying of a serial killer going on. Seems like an ultracrepidarian response.How do you know these things?”

          The information is freely available on the internet. I didn’t come to those conclusions on my own. Although I saw the out-of-place and plagiarized rant about Leftists in his manifesto as a red flag that he was not someone with a singular motivation.

          “He claimed to be campaigning against technology but entries from his diaries and journals revealed different motives for his deadly bombings.”
          http://news.bbc.co.uk/2/hi/special_report/unabomber/87789.stm

          “But a glimpse of Kaczynski’s thinking came in a prosecution memo excerpting the journal and filed in federal court. In the journal, the memo said, Kaczynski wrote in 1971, seven years before he began his deadly rampage, “my motive for doing what I am going to do is simply personal revenge.”
          http://edition.cnn.com/2010/US/12/04/montana.unabomber.property/

          “I believe in nothing,” Kaczynski wrote. “I don’t even believe in the cult of nature-worshipers or wilderness-worshipers. (I am perfectly ready to litter in parts of the woods that are of no use to me — I often throw cans in logged-over areas.)”
          http://edition.cnn.com/2010/US/12/04/montana.unabomber.property/

          What I’m saying makes sense. It fits in with motivations of other serial killers. The reason why this is not widely circulated

          (aside from environmentalists who want to believe he was leading a crusade against industrial society and was a prophet of some sort
          “Today many of Ted Kaczynski’s predictions have come to pass and he has not yet been shown wrong. “http://peaksurfer.blogspot.com/2013/06/the-unibomber-in-age-of-limited-options.html).

          is because it was not admitted as evidence in the court. He pleaded guilty before it could.

          • Mark says:

            Interesting, thanks, (plus I got to use that cool word 😉 )
            I don’t know much about him. Seems what he wrote was ahead of it’s time, but he just doesn’t give a sh#t about much of anything.

  3. Fast Eddy says:

    So…

    Today I met someone who works for the UN and is involved in the cl im at cha nge fight…

    Now imagine if I had come out and said – it’s a hoax…. which it is of course…

    Instead I said — that must be frustrating — we have summits and promises made about cutting back — and then the promises are broken immediately and we burn record amounts of fossil fuels…

    Yes… it is very frustrating said she….

    The fight goes on … and as long as it does … she gets paid….

    • timl2k11 says:

      “it’s a hoax”
      source? I read that article you keep posting and it doesn’t really support your claim.

      • Fast Eddy says:

        If it were not a hoax then why would the g w scientists have to fake their numbers?

        • Fast Eddy says:

          Damn — I should have asked her that!!!

        • timl2k11 says:

          Which numbers are fake? Again, source? The article you keep linking to says the data was not properly vetted, but nothing about it being fake. It also stated that the data in question is being corrected. Also is not the article you reference from the MSM? Or is it “fringe” journalism? I do agree the AGW is over hyped to an extreme degree and I didn’t think that just a few months ago. However a hoax? That’s a.bridge too far.

          • Fast Eddy says:

            Exposed: How world leaders were duped into investing billions over manipulated glo bal war
            ming data

            The Mail on Sunday can reveal a landmark paper exaggerated glo bal wa rming

            It was rushed through and timed to influence the Paris agreement on cli m ate c han ge

            America’s National Oceanic and Atmospheric Administration broke its own rules

            The report claimed the pause in gl obal wa rmin g never existed, but it was based on misleading, ‘unverified’ data

            http://www.dailymail.co.uk/sciencetech/article-4192182/World-leaders-duped-manipulated-glob$$$$$al-war$$$$$ming-data.html

          • Fast Eddy says:

            Cli m ate models were wrong and being updated to better reflect the results of sat ellite temp
            erature measureme nts that confirmed a slowdown in te mpe rature rises over the past two decades, a group of leading cl im ate sci en tists has said.

            The admission is contained in a new paper published in Nature Geoscience, which says natural factors and unforeseen events were responsible for models overestimating the tem perature rise in the troposphere.

            Natural variability included El Nino and La Nina we ather patterns and long cycle movements in the Pacific and Atlantic Oceans.

            http://www.theaustralian.com.au/news/health-science/cli mate-models-overestimated-temperature-rises-scientists/news-story/3df40de24758698cba22d98743d4e4c5

            So ‘natural variability’ impact the cl i m ate —- who would have thought that!!!

            • Fast Eddy says:

              In other words — they are admitting that they haven’t got the slightest clue what is going on with respect to the cl ima te —- because the cli ma te is a very complex system — it is impossible to measure it accurately because it ALWAYS changes…

              And they have no idea which naturally occurring phenomenon impact cl im ate and even if they do – how much.

              Think of an earthquake — compared to global cl i mate — this is a much simpler occurrence…

              Yet we are unable to predict when and where the next quake will happen.

              And yet scientists believe they understand the glob al cl im ate story?

              Give me a break!!!

          • Stone Guide says:

            FE has insectoid up nether regions re GW

  4. Yoshua says:

    The economic growth engine.
    Federal debt. Total public debt.
    $19.8 Trillion

    https://fred.stlouisfed.org/series/GFDEBTN

  5. Cliffhanger says:

    If I was a minority or Jewish in America I would be trying to move ASAP. Einstein who was a Jew fled Germany right after the Nazi party took control of power. And it saved him from the gas chambers. It doesn’t take a genus to see a train wreck coming a mile away. (Check your history)

  6. Cliffhanger says:

    First comes the Nazi’s! Then comes the Zombies!

  7. Cliffhanger says:

    (Mother Of All Black Swans) is coming soon! So keep your ears pricked for the sounds of wings flapping!

  8. Cliffhanger says:

    A world no longer powered by fossil fuels, no matter what incarnation, is almost inconceivable and for many to terrifying to even imagine. It is indeed traumatic for what it might (probably) means not just for us but also for our love ones, children, grandchildren. Our hearts break.

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