Economists have given us a model of how prices and quantities of goods are supposed to interact.
Figure 1. From Wikipedia: The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
Unfortunately, this model is woefully inadequate. It sort of works, until it doesn’t. If there is too little of a product, higher prices and substitutions are supposed to fix the problem. If there is too much, prices are supposed to fall, causing the higher-priced producers to drop out of the system.
This model doesn’t work with oil. If prices drop, as they have done since mid-2014, businesses don’t drop out. They often try to pump more. The plan is to try to make up for inadequate prices by increasing the volume of extraction. Of course, this doesn’t fix the problem. The hidden assumption is, of course, that eventually oil prices will again rise. When this happens, the expectation is that oil businesses will be able to make adequate profits. It is hoped that the system can again continue as in the past, perhaps at a lower volume of oil extraction, but with higher oil prices.
I doubt that this is what really will happen. Let me explain some of the issues involved.
[1] The economy is really a much more interlinked system than Figure 1 makes it appear.
Supply and demand for oil, and for many other products, are interlinked. If there is too little oil, the theory is that oil prices should rise, to encourage more production. But if there is too little oil, some would-be workers will be without jobs. For example, truck drivers may be without jobs if there is no fuel for the vehicles they drive. Furthermore, some goods will not be delivered to their desired locations, leading to a loss of even more jobs (both at the manufacturing end of the goods, and at the sales end).
Ultimately, a lack of oil can be expected to reduce the availability of jobs that pay well. Digging in the ground with a stick to grow food is a job that is always around, with or without supplemental energy, but it doesn’t pay well!
Thus, the lack of oil really has a two-way pull:
(a) Higher prices, because of the shortage of oil and the desired products it produces.
(b) Lower prices, because of a shortage of jobs that pay adequate wages and the “demand” (really affordability) that these jobs produce.
[2] There are other ways that the two-way pull on prices can be seen:
(a) Prices need to be high enough for oil producers, or they will eventually stop extracting and refining the oil, and,
(b) Prices cannot be too high for consumers, or they will stop buying products made with oil.
If we think about it, the prices of basic commodities, such as food and fuel, cannot rise too high relative to the wages of ordinary (also called “non-elite”) workers, or the system will grind to a halt. For example, if non-elite workers are at one point spending half of their income on food, the price of food cannot double. If it does, these workers will have no money left to pay for housing, or for clothing and taxes.
[3] The upward pull on oil prices comes from a combination of three factors.
(a) Rising cost of production, because the cheapest-to-produce oil tends to be extracted first, leaving the more expensive-to-extract oil for later. (This pattern is also true for other types of resources.)
(b) If workers are becoming more productive, this growing productivity of workers is often reflected in higher wages for the workers. With these higher wages, workers can afford more goods made with oil, and that use oil in their operation. Thus, these higher wages lead to higher “demand” (really affordability) for oil.
Recently, worker productivity has not been growing. One reason this is not surprising is because energy consumption per capita hit a peak in 2013. With less energy consumption per capita, it is likely that, on average, workers are not being given bigger and better “tools” (such as trucks, earth-moving equipment, and other machines) with which to leverage their labor. Such tools require the use of energy products, both when they are manufactured and when they are operated.
Figure 2. World Daily Per Capita Energy Consumption, based on primary energy consumption from BP Statistical Review of World Energy and 2017 United Nations population estimates.
(c) Another “pull” on demand comes from increased investment. This investment can be debt-based or can reflect equity investment. It is these financial assets that allow new mines to be opened, and new factories to be built. Thus, wages of non-elite workers can grow. McKinsey Global Institute reports that growth in total “financial assets” has slowed since 2007.
Figure 3. Figure by McKinsey Global Institute showing that growth in debt in financial instruments (both debt and equity) has slowed significantly since 2007. Source
More recent data by McKinsey Global Institute shows that cross-border investment, in particular, has slowed since 2007.
Figure 4. Figure by McKinsey Global Institute showing that global cross-border capital flows (combined debt and equity) have declined by 65% since the 2007 peak. Download from this page.
This cross-border investment is especially helpful in encouraging exports, because it often puts into place new facilities that encourage extraction of minerals. Some minerals are available in only a few places in the world; these minerals are often traded internationally.
[4] The downward pull on oil and other commodity prices comes from several sources.
(a) Oil exports are often essential to the countries where they are extracted because of the tax revenue and jobs that they produce. The actual cost of extraction may be quite low, making extraction feasible, even at very low prices. Because of the need for tax revenue and jobs, governments will often encourage production regardless of price, so that the country can maintain its place in the world export market until prices again rise.
(b) Everyone “knows” that oil and other commodities will be needed in the years ahead. Because of this, there is no point in stopping production altogether. In fact, the cost of production is likely to keep rising, putting an upward push on commodity prices. This belief encourages businesses to stay in the market, regardless of the economics.
(c) There is a long lead-time for developing new extraction capabilities. Decisions made today may affect extraction ten years from now. No one knows what the oil price will be when the new production is brought online. At the same time, new production is coming on-line today, based on analyses when prices were much higher than they are today. Furthermore, once all of the development costs have been put in place, there is no point in simply walking away from the investment.
(d) Storage capacity is limited. Production and needed supply must balance exactly. If there is more than a tiny amount of oversupply, prices tend to plunge.
(e) The necessary price varies greatly, depending where geographically the extraction is being done, and depending on what is included in the calculation. Costs are much lower if the calculation is done excluding investment to date, or excluding taxes paid to governments, or excluding necessary investments needed for pollution control. It is often easy to justify accepting a low price, because there is usually some cost basis upon which such a low price is acceptable.
(f) Over time, there really are efficiency gains, but it is difficult to measure how well they are working. Do these “efficiency gains” simply speed up production a bit, or do they allow more oil in total to be extracted? Also, cost cuts by contractors tend to look like efficiency gains. In fact, they may simply be temporary prices cuts, reflecting the desire of suppliers to maintain some market share in a time when prices are too low for everyone.
(g) Literally, every economy in the world wants to grow. If every economy tries to grow at the same time and the market is already saturated (given the spending power of non-elite workers), a very likely outcome is plunging prices.
[5] As we look around the world, the prices of many commodities, including oil, have fallen in recent years.
Figures 3 and 4 show that investment spending spiked in 2007. Oil prices spiked not long after that–in the first half of 2008.
Figure 5. Monthly Brent oil prices with dates of US beginning and ending QE.
Quantitative Easing (QE) is a way of encouraging investment through artificially low interest rates. US QE began right about when oil prices were lowest. We can see that the big 2008 spike and drop in prices corresponds roughly to the rise and drop in investment in Figures 3 and 4, above, as well.
If we look at commodities other than oil, we often see a major downslide in prices in recent years. The timing of this downslide varies. In the US, natural gas prices fell as soon as gas from fracking became available, and there started to be a gas oversupply problem.
I expect that at least part of gas’s low price problem also comes from subsidized prices for wind and solar. These subsidies lead to artificially low prices for wholesale electricity. Since electricity is a major use for natural gas, low wholesale prices for electricity indirectly tend to pull natural gas prices down.
Figure 6. Natural gas prices in the US and Canada, indexed to the 2008 price, based on annual price data provided in BP Statistical Review of World Energy, 2017.
Many people assume that fracking can be done so inexpensively that the type of downslide in prices shown in Figure 6 makes sense. In fact, the low prices available for natural gas are part of what have been pushing North American “oil and gas” companies toward bankruptcy.
For a while, it looked like high natural gas prices in Europe and Asia might allow the US to export natural gas as LNG, and end its oversupply problem. Unfortunately, overseas prices of natural gas have slid since 2013, making the profitability of such exports doubtful (Figure 7).
Figure 7. Prices of natural gas imports to Europe and Asia, indexed to 2008 levels, based on annual average prices provided by BP Statistical Review of World Energy, 2017.
Coal prices have followed a downward slope of a different shape since 2008. Note that the 2016 prices range from 32% to 59% below the 2008 level. They are even lower, relative to 2011 prices.
Figure 8. Prices of several types of coal, indexed to 2008 levels, based on annual average prices provided by BP Statistical Review of World Energy, 2017.
Figure 9 shows the price path for several metals and minerals. These seem to follow a downward path as well. I did not find a price index for rare earth minerals that went back to 2008. Recent data suggested that the prices of these minerals have been falling as well.
Figure 9. Prices of various metals and minerals, indexed to 2008, based on USGS analyses found using this link: https://minerals.usgs.gov/minerals/pubs/mcs/
Figure 9 shows that several major metals are down between 24% and 35% since 2008. The drop is even greater, relative to 2011 price levels.
Internationally traded foods have also fallen in price since 2008.
Figure 10. Food prices, indexed to 2008 levels, based on data from the United Nations’ Food and Agricultural Organization.
In Item [4] above, I listed several factors that would tend to make oil prices fall. These same issues could be expected to cause the prices of these other commodities to drop. In addition, energy products are used in the production of metals and minerals and of foods. A drop in the price of energy products would tend to flow through to lower extraction prices for minerals, and lower costs for growing agricultural products and bringing products to market.
One surprising place where prices are dropping is in the auction prices for the output of onshore wind turbines. This is a chart shown by Roger Andrews, in a recent article on Energy Matters. The cost of making wind turbines doesn’t seem to be dropping dramatically, except from the fall in the prices of commodities used to make the turbines. Yet auction prices seem to be dropping by 20% or more per year.
Figure 11. Figure by Roger Andrews, showing trend in auction prices of onshore wind energy from Energy Matters.
Thus, wind energy purchased through auctions seems to be succumbing to the same deflationary market forces as oil, natural gas, coal, many metals, and food.
[6] It is very hard to see how oil prices can rise significantly, without the prices of many other commodities also rising.
What seems to be happening is a basic mismatch between (a) the amount of goods and services countries want to sell, and (b) the amount of goods and services that are truly affordable by consumers, especially those who are non-elite workers. Somehow, we need to fix this supply/demand (affordability) imbalance.
One way of raising demand is through productivity growth. As mentioned previously, such a rise in productivity growth hasn’t been happening in recent years. Given the falling energy per capita amounts in Figure 2, it seems unlikely that productivity will be growing in the near future, because the adoption of improved technology requires energy consumption.
Another way of raising demand is through wage increases, over and above what would be indicated by productivity growth. With globalization, the trend has been to lower and less stable wages, especially for less educated workers. This is precisely the opposite direction of the change we need, if demand for goods and services is to rise high enough to prevent deflation in commodity prices. There are very many of these non-elite workers. If their wages are low, this tends to reduce demand for homes, cars, motorcycles, and the many other goods that depend on wages of workers in the world. It is the manufacturing and use of these goods that influences demand for commodities.
Another way of increasing demand is through rising investment. This can eventually filter back to higher wages, as well. But this isn’t happening either. In fact, Figures 3 and 4 show that the last big surge in investment was in 2007. Furthermore, the amount of debt growth required to increase GDP by one percentage point has increased dramatically in recent years, both in the United States and China, making this approach to economic growth increasingly less effective. Recent discussions seem to be in the direction of stabilizing or lowering debt levels, rather than raising them. Such changes would tend to lower new investment, not raise it.
[7] In many countries, falling export revenue is adversely affecting demand for imported goods and services.
It is not too surprising that the export revenue of Saudi Arabia has fallen, with the drop in oil prices.
Figure 12. Saudi Arabia exports and imports of goods and services based on World Bank data.
Because of the drop in exports, Saudi Arabia is now buying fewer imported goods and services. A person would expect other oil exporters also to be making cutbacks on their purchases of imported goods and services. (Exports in current US$ means exports measured year-by-year in US$, without any inflation adjustment.)
It is somewhat more surprising that China’s exports and imports are falling, as measured in US$. Figure 13 shows that, in US dollar terms, China’s exports of goods and services fell in both 2015 and 2016. The imports that China bought also fell, in both of these years.
Figure 13. China’s exports and imports of goods and services on a current US$ basis, based on World Bank data.
Similarly, both the exports and imports of India are down as well. In fact, India’s imports have fallen more than its exports, and for a longer period–since 2012.
Figure 14. India’s exports and imports of goods and services in current dollars, based on World Bank data.
The imports of goods and services for the United States also fell in 2015 and 2016. The US is both an exporter of commodities (particularly food and refined petroleum products) and an importer of crude oil, so this is not surprising.
Figure 15. US exports and imports of goods and services in US dollars, based on World Bank data.
In fact, on a world basis, exports and imports of goods and services both fell, in 2015 and 2016 as measured in US dollars.
Figure 16. World exports and imports in current US dollars, based on World Bank data.
[8] Once export (and import) revenues are down, it becomes increasingly difficult to raise prices again.
If a country is not selling much of its own exports, it becomes very difficult to buy much of anyone else’s exports. This impetus, by itself, tends to keep prices of commodities, including oil, down.
Furthermore, it becomes more difficult to repay debt, especially debt that is in a currency that has appreciated. This means that borrowing additional debt becomes less and less feasible, as well. Thus, new investment becomes more difficult. This further tends to keep prices down. In fact, it tends to make prices fall, since new investment is needed to keep prices level.
[9] World financial leaders in developed countries do not understand what is happening, because they have written off commodities as “unimportant” and “something that lesser-developed countries deal with.”
In the US, few consumers are concerned about the price of corn. Instead, they are interested in the price of a box of corn flakes, or the price of corn tortillas in a restaurant.
The US, Europe and Japan specialize in high “value added” goods and services. For example, in the case of a box of corn flakes, manufacturers are involved in many steps such as (a) making corn flakes from corn, (b) boxing corn flakes in attractive boxes, (c) delivering those boxes to grocers’ shelves, and (d) advertising those corn flakes to prospective consumers. These costs generally do not decrease, as commodity prices decrease. One article from 2009 says, “With the record seven-dollar corn this summer, the cost of the corn in an 18-ounce box of corn flakes was only 14 cents.”
Because of the small role that commodity prices seem to play in producing the goods and services of developed countries, it is easy for financial leaders to overlook price indications at the commodity level. (Data is available at this level of detail; the question is how closely it is examined by decision-makers.)
Figure 17. Various indices within US CPI Urban, displayed on a basis similar to that used in Figure 7 through 11. In other words, index values for later periods are compared to the average 2008 index value. CPI statistics are from US Bureau of Labor Statistics.
Figure 17 shows some components of the Consumer Price Index (CPI) on a basis similar to the trends in commodity prices shown in Figures 7 through 11. The category “Household furnishings and operations” was chosen because it has furniture in it, and I know that furniture prices have fallen because of the growing use of cheap imported furniture from China. This category shows a slight downslope in prices. The other categories all show small increases over time. If commodity prices had not decreased, prices of the other categories would likely have increased to a greater extent than they did during the period shown.
[10] Conclusion. We are likely kidding ourselves, if we think that oil prices can rise in the future, for very long, by a very large amount.
It is quite possible that oil prices will bounce back up to $80 or even $100 per barrel, for a short time. But if they rise very high, for very long, there will be adverse impacts on other segments of the economy. We can’t expect that wages will go up at the same time, so increases in oil prices are likely to lead to a decrease in the purchase of discretionary products such as meals eaten in restaurants, charitable contributions, and vacation travel. These cutbacks, in turn, can be expected to lead to layoffs in discretionary sectors. Laid off workers are likely to have difficulty repaying their loans. As a result, we are likely to head back into a recession.
As we have seen above, it is not only oil prices that need to rise; it is many other prices that need to rise as well. Making a change of this magnitude is almost certainly impossible, without “crashing” the economy.
Economists put together a simplified view of how they thought supply and demand works. This simple model seems to work, at least reasonably well, when we are away from limits. What economists did not realize is that the limits we are facing are really affordability limits, and that growing affordability depends upon productivity growth. Productivity growth in turn depends on a growing quantity of cheap-to-produce energy supplies. The term “demand,” and the two-dimensional supply-demand model, hide these issues.
The whole issue of limits has not been well understood. Peak Oil enthusiasts assumed that we were “running out” of an essential energy product. When this view was combined with the economist’s view of supply and demand, the conclusion was, “Of course, oil prices will rise, to fix the situation.”
Few stopped to realize that there is a second way of viewing the situation. What is falling is the resources that people need to have in order to have jobs that pay well. When this happens, we should expect prices to fall, rather than to rise, because workers are increasingly unable to buy the output of the economy.
If we look back at what happened historically, there have been many situations in which economies have collapsed. In fact, this is probably what we should expect as we approach limits, rather than expecting high oil prices. If collapse should take place, we should expect widespread debt defaults and major problems with the financial system. Governments are likely to have trouble collecting enough taxes, and may ultimately fail. Non-elite workers have historically come out badly in collapses. With low wages and high taxes, they have often succumbed to epidemics. We have our own epidemic now–the opioid epidemic.
According to Forbes the top ten best countries for Business are socialist. According to the scientist’s world happiness report. The top ten happiest countries are socialist. And according to the world health organization the top ten countries with the best healthcare systems are socialist.
Capitalism = Fail
With the proviso that the meaning of the word – classification “socialist gov” always means in reality very different things towards US to European – or European to RestofWorld related discourse context..
Norway is number one in happiness…
and has vast fossil fuel resources that provide much of the wealth for the citizens.
their capitalism is sure good for their socialism.
BAU!
Happiness is like intelligence — I really do not give a sh it about overall country happiness… I care about how happy I am…. I could be living in Norway and miserable….
Or I could be living in NZ…. and joyful.
Norway + Sovereign ‘Wealth’ Fund = Greatest Fool’s Paradise ever seen.
Wealth buys comfort, but perfect comfort tends to make you very soft.
One of the worst things for the human animal is access 24/7 to warmth without effort. I would say food, too. And transportation without any use of one’s muscles.
We know where that leads… you end up with parents who were brother and sister… and weighing 400kg…riddled with diabetes and other diseases.. and an IQ in the high single digits….
Disgraceful!
http://www.qatarliving.com/forum/politics/posts/deformities-newborns-blamed-inbreeding
http://www.dailymail.co.uk/news/article-2129799/Qatar-named-fattest-nation-earth-HALF-adults-obese.html
to repeat myself
democracy and prosperity go hand in hand
Exactly, this is the US meaning of ‘socialist’, ie things that people do in other countries that we don’t want you poor saps to know or think about, so let’s demonise them.
Link?
Forbes best countries for business.
https://www.forbes.com/best-countries-for-business/list/
World happiness Report
http://worldhappiness.report/
National Geographic top ten happiest countries
http://www.nationalgeographic.com/travel/top-10/2016-worlds-happiest-countries/
World Health Organization Healthcare Systems Ranking
https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000
Is scandinavia, netherland and Switzerland socialist?
Has The EIA Been Overestimating Oil Production?
http://oilprice.com/Latest-Energy-News/World-News/Has-The-EIA-Been-Overestimating-Oil-Production.html
I found a good article in this month’s edition of Funny Times. https://funnytimes.com/funny-times-october-2017-issue/
The author, Chris Hume, writes at theantinews.com but the article is not available there.
Earth is Flat and Infinite, According to Paid Experts
Get ready for a cosmic game-changer: According to a recent study by a consortium of paid experts, Earth is actually flat and infinite. The newly discovered fact totally debunks the long-held theory that Earth is “ball-shaped” and only has a fragile, limited amount of resources.
. . .
The newly revised truth that Earth is flat as well as limitless has ended the whole annoying debate about whether we have to worry about our precious resources. “Now that we all know the real facts, life will be so much easier,” said suburban mother Kendra Slothburg.
Drilling, fracking, strip mining, and logging are all the rage since Earth was officially declared flat and infinite. Oceans can be fished out to their limits, because, well, there is no limit. Recycling is now considered treasonous, because trash can be dumped anywhere in an infinitely flat world.
Overpaid super expert Jimmy Jiffypop tells it like it is, “This isn’t your parents’ Earth anymore. Got a problem with that? Just drive further out onto God’s infinitely flat Earth, and dump it somewhere else.”
Even if not intellectually, most people believe this emotionally–the belief that counts. (Sorry. Posted this in the wrong place below.)
That is the problem! No one dares speak the truth.
Wouldn’t it be pleasant to find out that we were as wrong as the flat earth people.. and that cheap resources are infinite!
Mattis: Use of tactical nuclear weapons discussed with South Korea
https://www.defensenews.com/news/your-military/2017/09/18/mattis-use-of-tactical-nuclear-weapons-discussed-with-south-korea/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+defense-news/home+(Defense+News+-+Arc+RSS+-+Home)
Sub-$50 Oil Could Kill Shale
http://oilprice.com/Energy/Energy-General/Sub-50-Oil-Could-Kill-Shale.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+oilpricecom+(Oil+Price.com+Daily+News+Update)
not today!
https://www.cnbc.com/2017/09/19/oil-rises-after-iraq-signals-possible-opec-cut-extension.html
$50.41
BAU!
Ford to cut production at five North American vehicle plants
http://www.reuters.com/article/us-ford-motor-production/ford-to-cut-production-at-five-north-american-vehicle-plants-idUSKCN1BU2PS?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+reuters/businessNews+(Business+News)
I noticed stories about the Ford production cut.
Job growth is a lagging indicator on recessions. It takes a while for low profits and low sales to feed through to actual reductions in work hours.
Broaden your horizons
:
Terrific article with some eye-opening charts:
“Summary
*Central bankers around the world have made an epic bet on unprecedented monetary actions over the last 10 years.
*In Chasing the Dragon we compare post-financial crisis growth of central bank balance sheets with the past going back to the 1700s.
*This retrospective illustrates how radically different current circumstances are from anything observable in the historical record.
“On numerous occasions, we have detailed the reasons the United States and many foreign nations are mired in economic stagnation. At the top of our list, is the over-reliance on debt and the burden that decades of debt-driven-consumption policies have inflicted upon economic activity. To not only accommodate existing debt, but promote more debt, Keynesian schooled central bankers have presided over extremely easy monetary policy for years. Policy has been administered through a combination of low-interest rates and more recently, as desperation escalates to keep the economic engine from sputtering, money printing…
“There is clearly something wrong when a central bank prints money in rapidly growing amounts. Such a departure from prior trends enables other undesirable events to transpire. The Fed, Wall Street, and the media serve up complicated economic explanations for why this time is not different from the past. The evidence provided in these charts argue something is very different…
“Like a drug addict chasing the proverbial dragon, the world’s central bankers are faced with the painful choice of rehab to break the grip of easy money or an on-going downward spiral toward economic demise.”
https://seekingalpha.com/article/4108057-chasing-dragon
I see what you mean: shock, horror…who’d a thunk it?
Thanks! The only problem is that we really need the drug. Rehab is not really an option, unless we find cheap replacements for all of our energy sources, quickly.
Oh, yes, it’s a conundrum all right. In fact, the CB’s are at a point now they have to keep the stock markets puffed up, interest rates low (even though lip service is paid to pretend they can raise interest rates), the printed money coming, silver and gold prices kept low and all propaganda generated economic indicators must be held in check or the alternative is a fall the likes of which we’ve never seen before globally. Do not look behind the curtain – do not side with more conservative economic policies – keep your parachute on – load up on freeze dried food, water, solar assist systems, silver & gold coins and other essentials – stay frosty my friend. This period of extend and pretend via phony money is brought to us by ‘faith’ in currency no matter how much is printed behind the curtain. But when faith falters, oh my, look out, the fall will be precipitous…
Just print and buy! We are Zimbabwe baby!
And theres no getting out of school early; the Catalan situation seems to be warming up again.
It is similar in NZ where some smaller locales wished to exit the new ‘Super-City’ Auckland Council. The protestations were taken, via the correct channels, all the way to the top. No release.
Finally, at an individual level, it is best not to question the be.ast, but instead know the truth and stick to talk about the weather.
‘load up on freeze dried food, water, solar assist systems, silver & gold coins and other essentials’
This implies there will be a reset…. or that this is survivable….
It is neither – it is an extinction event.
Your gold will be worthless. Your solar system will get you nowhere. You will starve to death. If you linger you will be put out of your misery by the radiation from the 4000 spent fuel ponds….
The smart move is to Live Large Now. LLN.
There is no future.
Food and water stocks, gold, silver, etc, are only useful for dealing with minor economic perturbations such as a currency crisis, hyper-inflation,war, sudden loss of employment, and so on. It would be foolish not to prepare for such eventualities, if one can.
Going forward to the evidently inevitable Bottle Neck for our species, not at all.
Carpe Diem.
20 Foot Container filled with food booze guns ammo. Live a little longer…
The person who wrote the analysis …. fails to understand why the CBs are doing what they are doing … if they did they would understand that there is no withdrawing…. no rehab…
Withdrawal = instant death….
The addict needs to be urged to load up another syringe…
https://previews.123rf.com/images/arskabb/arskabb1210/arskabb121000055/16101803-Drug-syringe-and-cooked-heroin-on-spoon-Stock-Photo-drugs.jpg
How ironic… the opiate crisis in America…
Donald Londo Trump
ok back…
http://www.zerohedge.com/news/2017-09-19/norway-wealth-fund-assets-surge-over-1-trillion-massive-70-allocation-equities
The wise thing to do with this would be to distribute it to the people of Norway … and have a giant party …. have them blow it on hookers and blow and booze… then waste the rest…
Because that trillion … will end up 0…. in the not too distant future
I expect what you are seeing here is happening around the world.
If we look at world totals, there is a great deal more of debt than equity (value of shares of stock). Worldwide, amount of debt is roughly $217 trillion dollars. The amount of stock (at vastly inflated prices ) is $77.5 trillion dollars. Pension funds around the world, as well as investment funds like those in Norway have to deal with the combination of (1) high targets for annual yield, and (2) incredibly low returns on bonds. Given the low returns on bonds, every fund makes the decision to raise its allocation to the stock market. Guess what happens to stock prices? They rise even more. At least that is my theory. It has nothing to do with actual returns of the businesses associated with these shares of stock. It has to do with lack of high yielding assets, otherwise.
Another consideration is that if interest rates rise, the value (that is, selling price) of bond holdings falls. This is especially true of long term bonds. So no one wants to be caught with big holdings of long term bonds on their balance sheets when interest rates rise. This is a further impetus toward buying stocks rather than bonds.
People are almost completely ignoring a looming crisis for oil -Business Insider
http://www.businessinsider.com/the-future-of-oil-supply-and-demand-2016-9
Ignoring it is best for everyone. Just carry on folks.
Remember the movie with Natalie Wood, West Side Story? Her name in it was Maria and all those girls including Maria were from Puerto Rico. Well, hurricane Maria is set to hit Puerto Rico and it just happens to be the strongest hurricane ever expected to make landfall on that island. Just coincidence but still interesting.
By ‘ever’, I mean since records have been kept.
yes, JH…
I swear I was thinking about that at least a few times today.
that and the word “irony”.
I won’t look it up, but I bet the most common female name there is still Maria.
further irony that the name is due to reverence for the so-called Virgin Mary.
I need to watch my schadenfreude.
so many women and children there may suffer greatly from this.
Yes, irony indeed Davidinalotofyears, and many people there will suffer. In fact, tonight on Rachel Maddow (her own weather guy was on as needed for big events), was saying he thinks the damage to Puerto Rico will be historic (in a bad way). Since that telecast the wind speed has increased to 175 (cat. 5) and it is still on a direct path to San Juan, the largest city on that island. Another topic on the program was that many islands used by people fleeing islands damaged by Irma are now on islands in the path of hurricane Maria. For those people that must seem like a bad sci-fi plot, but it’s a reality for many people down there. St. Croix is a tiny island getting blasted by Maria as we speak before it moves on to Puerto Rico.
What’s also interesting is after Maria blasted the island of Dominica it was down graded to a cat. 4, then in just 4 hours intensified back up to a cat. 5. They didn’t expect that to happen – it was projected to remain a 4 then reduce to a 3. But the water temps are so high it is jacking these hurricanes up to higher intensities super fast!
Water temps are also elevated well beneath the surface – the deeper the available warm water, the more energy for the hurricane.
What happened to the YAY everybody is going to die crowd?
Could it be faced with the reality of DEATH, the real deal, the faux doomer
crowd break out:
There are actually some of us who like Kumbaya.
If you can abide that, then you can certainly abide this.
https://youtu.be/9bqrRNowf1Q
Earth Abides….great sci fi novel
Nice!
So long as I confine my activities to social service and the blind, they compliment me extravagantly, calling me ‘arch priestess of the sightless,’ ‘wonder woman,’ and a ‘modern miracle.’ But when it comes to a discussion of poverty, and I maintain that it is the result of wrong economics — that the industrial system under which we live is at the root of much of the physical deafness and blindness in the world — that is a different matter! It is laudable to give aid to the handicapped. Superficial charities make smooth the way of the prosperous; but to advocate that all human beings should have leisure and comfort, the decencies and refinements of life, is a Utopian dream, and one who seriously contemplates its realization indeed must be deaf, dumb, and blind.
— Helen Keller
She DID have a point! Except it isn’t people that matter most, but the ground they walk on. If the industrial system had a sensible way to treat it, it would have to have a similar way to treat people. No getting around it.
‘Leisure and comfort, the decencies and refinements of life’ came right out of a barrel of oil: she is deluded. She is trying to issue invitations to a party that will be cancelled.
True. This unprecedented boon. But the way the boon was produced unnecessarily destroyed its natural life support system. The way we operate would have made that unavoidable for the macro system, but the question remains whether industrial society can still hang on, finally facing its limits, run more sensibly, yielding some of Ms. Keller’s ideals.
i keep trying to drive home the reality:
that democracy and prosperity (for a substantial number of us, not all) has existing only in parallel with the tangible wealth produced by fuel-consuming industry.
when there is nothing left to burn those niceties of life will vanish.
Hi Norm,
I much appreciate what you drive home repeatedly. But given that once this fuel-consuming industry collapses, we all die, shouldn’t we be trying to look for ways to keep it going? That strikes me less as a rational decision than human (or animal) nature.
While we often hear that human nature is such and such and we are all sure to behave like the automatons we really are, there is room to question this assumption.
1) Human kind has never had industrial civilization before
2) No group before ever knew how to use coal industrially, or frac, or make diesel fuel. There are people living today who know. There are countless publications on the subject.
3) From what I understand, it isn’t that fossil fuels are no longer available; it’s that the economic system can’t deploy them for profit.
4) There is no physical law that says fossil fuels can’t be employed other than the exact way it is done now.
5) If we know that fossil fuels are indispensable for supporting 7 billion people, AND that the way in which it is used is destroying the very ability of fossil fuels to do work, we might well try to figure a way to keep using fossil fuels without destroying its ability to work.
6) Industrial society operates through various systems, one being financial. Another involves building and design (while there are others). I don’t know how the financial system could be modified so as to last longer, but I’m totally sure that the building and design system can be run much better.
7) I don’t see a crisis of physical limits so much as of psychological and cultural limitations, including flawed psychological and cultural programming.
Hi Artleads
In the sense of using tools to convert one form of energy into another, there’s a case to be made for us having had an industrial society for millenia.
Use Grimes graves as an example:
http://www.english-heritage.org.uk/visit/places/grimes-graves-prehistoric-flint-mine/
here in uk, was a flintmine complex, producing flints of the highest quality which were traded for other goods. They had to invest the energy in digging 30ft down to reach the flint bed,
With a sharp flint you can kill an animal, cut down a tree or harvest corn. All forms of energy conversion to make human life more comfortable, by the use of tools.
The drawback of course is that the energy invested didnt deliver sufficient return to provide a ”higher” level of civilisation and growth. Though it was certainly a form of industry
Hence my take on what EROEI actually means.
with a flint level of tool, you don’t need fire to help with ”basic living”
The problem starts when you want to make metals and pottery—the two critical products for any form of ”civilisation” that seeks to advance itself.
To make metals and pottery, heat is critical. Without heat, you cannot advance much beyond the higher primate.
So we had maybe 3000 years of making iron, then somebody lit a fire under a steam engine. That gave us deep coalmines and oilwells. the EROEI rocketed.
What it didnt do was give us a new energy resource, it merely allowed access to existing energy resources (ie fossilised plant/animal life)—which is exactly what we did when we used flint tools.
Back then we killed live things. Now our lives depend on dead things
Very few can accept that link. Most are convinced that we are constantly finding ”new” energy resources. We are not.
Instead of the 1:1 EROEI of a flintmine, we have the multi- EROEI of an oilwell.
The effect on our ability to survive and thrive is exactly the same, other than by degree. That is the way industrial society works, it has nothing to do with finance.
The flintminers flourished without finance.
flint tools provided the means to work (hunting etc) to provide sustenance.
We are in the same situation. Oil provides the necessary means by which we ”work” to sustain ourselves. Oil is useless (like flint) unless it is employed in energy conversion for our collective benefit.
All animals must ”work” to sustain their chosen existence. We are just tool users.
we have 7.5bn people demanding heat-dependent sustenance. You cannot send them back to the flint mines
Interesting conundrum isn’t it?
Our problem is that oil has allowed us to to choose an existence that cannot continue to exist. Our political leaders and flat earthers say it can—we shall see.
This is why politics cannot be separated from whatever else is going on—most people try to.
I am afraid I don’t quite agree with you. Either that, or I don’t understand you.
I thought that the big use of flint was to make the starting of fires easier. This would represent a time savings in starting fires of biomass. It also can be used as an arrow head, for killing animals, and as a tool.
I get tired of the idea that EROEI is the number one tool in measuring anything. It is a poorly defined metric that sort of measures (energy out)/(energy in). I expect that the energy return was far greater than 1:1, or the mine wouldn’t have made sense. The problem is that in many modern calculations, human energy isn’t counted, so we end up with a ratio in which the denominator is zero. This clearly makes no sense. The mine certainly represented a way of leveraging human labor, and that is what we needed, both then and now. Ultimately, the mine led to a way of saving human labor, or the mine would have made no sense. Also, the heat that was made possible by the fire could be used for cooking food and for heat-treating tools so that a sharper edge could be made. We don’t have a good way now of measuring the return, but it certainly was there.
Every tool doesn’t have to represent a huge leap forward. But building a flint mine, back in hunter-gatherer days, represented a huge accomplishment.
Modern EROEI calculations have to do with (Fossil Fuel Out)/(Fossil Fuel In). You can do this with an oil well, but you can’t with a flint mine. That is a deficiency of the method of calculation, not a deficiency of the mine.
The Grimes Graves flint mines were on such a large scale (400 shafts) that production was for far more that lighting fires. The population then was less than a million, they were obviously consuming flints at a rapid rate for many purposes
4k years ago, the flint was the most efficient way of extracting/converting energy from the environment—ie…a spearhead to kill an animal to eat, or cutting down trees to make boats or huts. (and so on) A properly made flint tool is glass sharp, and needs no heat input,
.
It was muscle power in, and the body-energy of another (hunted) animal out. Maybe 100miles away, but still the EROEI of mining flints.
A flint mine is just a 30ft deep hole, needing no technology .
This is why it was the only pre ‘heat- driven industry’ commercial system. Flints were traded for other commodities–some necessary, some not.
If your tribe had access to a flint mine, you did well because everyone needed your product.
No doubt they were fought over.
The flint correlates with oil, because oil is the most efficient way of converting one form of energy into another in our own era. Flint tools didn’t so much save human labour, as provide extra human labour/consumers for the ‘stone age’ economy. (By extracting energy from the environment) Anyone producing the basic commodity for economic survival always fed well, and thus reared more offspring.
And in our own time, if you own oilwells, everyone needs your product and you get wealthy. Flints would be traded for ‘stuff’ just like oil is traded for ‘stuff’ (most of it pointless of course)
Energy was expended digging shafts, making the tool, hunting etc, but ultimately the EROEI balanced out, because it was a system that matched one biological form against another, thus my 1:1 equation for EROEI.
When muscle chases muscle, checks and balances are inevitable in the long run. (ie if you kill all the animals, your flintmine has no purpose)
Again, in our own era we are reaching that stage with oil use. We are destroying the environment which gave oil its purpose in the first place, hence oil usage is declining.
Take things a stage further, to metal superseding flint, and iron usage begins to decimate the environment that gives it purpose, ie the middle east turned to desert with over-cultivation
——–
The above is just an exercise in logic, I dont pretend to be an expert in prehistoric society or economics
++++++++
Going forward dragonglass is going to be the new flint…. because it is the only thing that can kill zombies….
http://gameofthrones.wikia.com/wiki/Dragonstone_(island)
Doomsday preppers MUST secure as much of this as they can afford NOW!
And I am here to help — you can trade your physical gold on this site for = weight in dragonglass
http://www.fasteddyenteprisesdragonglassexchange.com
Hunter-gatherers were using fire before the time of the Grimes Graves Flint mine. They were using fire to cook their food, for example. This allowed people to get more calories from the food they ate, and allowed people not to have to chew their food as much. The combination gave people the energy they needed for building a mine. So while the energy was not directly used in building the mine, the mine could not have been built without the adaptation to the use of fire.
Because humans have had the use of supplemental energy for so long (1,000,000 years +), I do not see the point about “but ultimately the EROEI balanced out, because it was a system that matched one biological form against another”. Animals did not have the use of fire; humans did. Humans were winning out (except for some bad luck), even before agriculture. People who don’t understand that the reason humans are different is their use of fire assume that hunter-gatherers had to work within an EROEI of 1:1, but this is simply not the case. This is a link to a post I wrote on a funny combination of topics back in 2011. https://ourfiniteworld.com/2011/09/12/european-debt-crisis-and-sustainability/ The fact that humans are different from animals, particularly in their use of fire gives humans dominance over animals, and has done so for a long time. (I think some of the research from this article needs a little updating, but the general idea is right.)
It should be clearer than ever before that there is nowhere else to run to on this planet.
In keeping with the “ultimate,” relatively recent understanding of the seamlessness of the planet–as through the visceral connection to the photographed image of Earth viewed from space, or through the physical mapping, photographing and monitoring of all the planet’s territory from satellites–there is now an unprecedented need for a human global breakthrough that matches the new “understanding” of limits, of the end of more.
hooray for the end of more—with suitable modest blushes of course
This is koombaya/gibberish.
“This is koombaya/gibberish.”
I thought it would get slammed, even though it’s watered down something that would blow many fuses and put me in the OFW doghouse for a long time. But if the watered down version gets slammed, there isn’t much to lose by posting the 100% kumbaya version:
Women Are Natural Gobalists
Women have been subjugated since the dawn of civilization, as have blacks. I suspect that they have been subjected for somewhat related reasons, having to do with power and control dynamics of civilization. Women, however, span all tribal, ethnic, racial, class, cultural or national groups, making them a uniquely global species of subjugation. Women, therefore, might be the quintessential globalists.
In keeping with the “ultimate,” relatively recent understanding of the seamlessness of the planet–as through the visceral connection to the photographed image of Earth viewed from space, or through the physical mapping, photographing and monitoring of all the planet’s territory from satellites–there is now an unprecedented need for a human global category that matches the new understanding of wholeness and indivisibility of the planet. I propose that this category, comprising the majority of earth’s humans, is women.
In the spirit of making lemonades out of lemons, it seems that it is the subjugation and bias against women that renders them uniquely powerful as a sort of global species unified by universal civilizational oppression of their sex.
(So I guess I’m saying that if the world is to be saved, it would have to be women doing the saving.)
Without fossil fuels, women have to be mothers and the caretakers of the home and garden. Besides the need to be at home with several children (so that an average of two will live to maturity), there is also the fact that they are not physically as strong as men. Without fossil fuels, physical strength is much more important in the mix of abilities.
Blacks were doing better, back when physical strength was valued. Apparently, they are also better adapted to working in heat also. So their lot may improve, with the loss of fossil fuels.
“Without fossil fuels, women have to be mothers and the caretakers of the home and garden. ”
I assume that there is no viable life without fossil fuels, given the noted danger of thousands of fuel ponds needing sophisticated, eternal monitoring. So I’m not sure why we even talk about life after collapse.
The doomosphere talks (understandably) about our predicament that, by definition, cannot be resolved. So I’ve come to think that what we have is not a predicament but a crisis. Some people believe that our reality is governed by thermodynamic forces that led us here unavoidably. I think this is a partial explanation, but that we have the mental ability to see where the flow of energy is misdirecting us, enabling us to change strategy and evolve. I have made godawful mistakes all my life, correcting many with time, and see no reason why the entire species hasn’t done the same. The brain we evolved with makes us prone to mistakes and worship of false “gods.” But we are creatures of evolution too, and that means getting past dysfunctional behavior. We would have died out long ago, otherwise.
Civilization developed in the face of errors perhaps, attempts to solve problems of shortages perhaps. It functioned like a treadmill, where it had to grow or collapse. The main thing is that it happened, leading to luxury and comfort for many, including relative near-equality for women of the west.
Since civilization also had to be defended, male strength was valued and had to be supported by women’s servitude. Since civilization led to escalating complexity, compartmentalization and specialization, it relied on male mental proclivities for compartmentalization and specialization as well. Meanwhile, female brains that were better adapted to synthesis became devalued. Well, as it turns out, compartmentalization and aggression have limited efficacy past a certain point of complexity. And we are at that point. The competitive and divergent model of civilization would be better replaced with a cooperative convergent one. While men might resist such a change, it is by far the best alternative if they wish to survive.
With industrial technology at it’s present unimaginable height, there are no tasks that rule out women. It isn’t even clear that women need to be reproducing in large numbers in the near future. Overpopulation density is said (correctly of not) to be one of the world’s greatest problems.
But the industrial civilization we have now is indispensable for keeping us alive. Simultaneously, it is sure to kill us in a none too distant future. So damned if you do, damned if you don’t. I argue that there is a third choice, which is to embrace but change industrial civilization so that it doesn’t destroy itself prematurely or needlessly. A major change would be to bring women into the leadership circle. If women, by virtue of history, are a de facto global species, they should be able to effect some degree of change to nation state competition. The arguments against this are based on the norms of patriarchal competition. But you can’t rely on norms and have change at the same time.
“I argue that there is a third choice, which is to embrace but change industrial civilization so that it doesn’t destroy itself prematurely or needlessly”
Hark…. is that BAU Lite I hear?
It cannot be — for that is impossible. Grow or Die.
There is no third option
Historically, white heterosexual non-handicapped non-Jewish conservative adult males have been the single most oppressed segment of humanity. It’s just that we’re a stoic and uncomplaining race. Half the world hates us, and the other half is civilized because of us. If it wasn’t for our pasty complexions, our over-fondness for drinking alcohol to excess, and our partiality to developing a paunch and male pattern baldness, we’d have something to be really proud of. 🙂
“Historically, white heterosexual non-handicapped non-Jewish conservative adult males have been the single most oppressed segment of humanity. ”
Ah, but the white heterosexual non-handicapped non-Jewish conservative adult females shall set you free!
—————–
Why changing civilization and growing it are incompatible continues to escape me.
More globalization is not the solution to our problems.
The influence of women in politics is profound.
The modern welfare state and education are areas where women have quite a bit of influence.
Making efforts to give women more power over men in the misguided hope, that they might be able to keep an unsustainable system together longer is only going to make things worse.
“More globalization is not the solution to our problems.”
What is (if anything)? And why? We have globalism now, and I’m trying to understand better what it means in the broadest possible sense. I would have thought that women are subjugated everywhere on earth. If so, what does it mean for globalism? I’m more interested in understanding than in prescribing. So here is a little point to illustrate what might be bigger realities: When rich countries give aid to poor countries–I understand this (or had it confirmed) from my daughter who teaches international studies–the huge bias of the donor is to give it to the men. The men routinely spend it on carousing, but if it had been given to the women they would have used it to nourish and educate the children.
.
“The influence of women in politics is profound.”
No doubt. Women influence everything–human existence itself. But, small “point” again: how many women are there in the US congress compared with men? How many African nations have women heads of state? The answer might illustrate a global tendency.
“The modern welfare state and education are areas where women have quite a bit of influence.”
Yes. You could add K-12 education as well, or nursing. But again, figuring out the whys and wherefores of female dominance in some areas and not in others can’t be shrugged off.
“Making efforts to give women more power over men in the misguided hope, that they might be able to keep an unsustainable system together longer is only going to make things worse.”
Although it might turn out that women get more power over men, that wasn’t my intended project. Likewise, the uplift of black people wouldn’t be intended or envisioned as giving blacks “more power” over whites. I’m specifically looking at power dynamics themselves. What does power mean in the discussion? Do women have a different approach to it than men? Power over their bodies would be one thing to look at, among many. I wouldn’t assume that power has to mean domination and control of others. That certainly has been the male attitude to power, however.
Helen Keller was just as much of a hoax as Stephen Hawking, Santa Claus, Osama Bin Laden and Alex Jones!!!!!
https://youtu.be/1wFmbda-ZX4
UK’s oil industry entering final decade of production -The Telegraph
http://www.telegraph.co.uk/news/2017/09/19/uks-oil-industry-entering-final-decade-production/
sooner rather than later, the UK could find itself on the periphery of the core first world countries.
my oh my, how the empire has fallen
And still people move here thinking it’s a honey pot. Comparatively, it is, of course. But all those Muslims and Somalis living on welfare are going to have quite a shock anytime now.
The situation with regard to natural resources in general is equally as bad in the UK: and since WW2 industrial agriculture has destroyed the soil, ruined the hedgerows (very valuable in the past for fuel and timber), poisoned the water, driven small mixed farms to the wall in huge numbers (hardly viable these days) forestry is a mess, etc.
Still, for 70 years of living on borrowed time since WW2 it hasn’t been all that bad for the average town-dweller – quite a good run!
Commonwealth countries should be thinking what to do with the spoils, but they are instead blissfully complacent.
IEA: Oil Shortage & Price Spike Coming In 2020 -OILPRICE
http://oilprice.com/Energy/Energy-General/IEA-Price-Spike-Coming-in-2020.html
IF deflation isn’t a permanent part of the world’s economy in the 2020’s…
then an oil production spike could follow by 2025.
not a prediction, but a price spike certainly could spur production higher.
potentially putting peak oil into the mid 2020’s.
I think the peak might be this year, but who knows yet?
What you can see, if you read to the end of the article, is the conflict between the industry’s beliefs and what others are seeing. At the end of the article it says:
———–
A Scottish Government spokesman said the offshore oil and gas industry “has a bright future, and, with the right regulatory and fiscal environment, the basin has up to 20 billion barrels of oil equivalent remaining – and this year has seen one of the biggest new discoveries of untapped oil in recent times.”
Deirdre Michie, chief executive of industry body Oil & Gas UK, said: “There are up to 20 billion barrels of oil and gas resources still to be recovered on the UK Continental Shelf, based on production forecasts provided by the Oil and Gas Authority. Production has increased over the last two years and we expect that to continue to rise.”
———–
I think what this really means is, “If oil prices go back up and taxes are very low, the industry thinks that it can profitably pump a lot more oil.” Of course, the problem is that prices aren’t really going up. Also, the UK more than ever needs the taxes on the oil industry; it can’t roll them back. The drop in employment mentioned earlier in the article represents a better clue as to what is really happening.
does anybody remember 1 year ago deutsche bank was about be collapse when
stock came almost in single digit
I do.
One has to wonder if the CBs stepped in secretly and bailed them out.
oh, no need to wonder.
how do you translate “Too Big To Fail” into German?
“Deutsche Bank ‘Beyond Repair’ as Trading Drops, Autonomous Says”
https://www.bloomberg.com/news/articles/2017-09-19/deutsche-bank-beyond-repair-as-trading-drops-autonomous-says
This article is dated September 19, 2017. The problem likely hasn’t really gone away.
And here we have the latest episode of ‘As the World Collapses – Whatever it Takes’
In today’s episode the PBOC having financed ghosts cities and huge swathes of apartments across China that are sitting empty and threatening to bankrupt the owners…. and setting off a massive financial crisis….
Steps in to buy up these empty apartments — and GIVE them to various riff raff from the slums.
Whatever it takes … means…. whatever it takes!
China’s backdoor real-estate bailout
Chinese property data out Monday showed housing prices weakening across the board in August. Usually this would be a good point to exit China growth plays.
But another 2015-style collapse in Chinese commodity demand remains unlikely. The reason?
Slum clearance.
Local governments are directly buying up large quantities of houses developers haven’t been able to sell and filling them with citizens relocated from what they call “slums”–old, sometimes dilapidated neighborhoods.
That helps explain why the drop in unsold inventories of apartments (https://www.wsj.com/articles/chinas-ghost-cities- keep-up-property-market-spirits-1497863775) over the past year has been so sharp–down 22% on the year in August. That has helped prop up the market, especially in China’s smaller cities, despite more restrictions on housing purchases and slowing official figures on sales growth.
The scale of the program is large, accounting for 18% of floor space sold in 2016, according to Rosealea Yao, senior analyst at Gavekal Dragonomics, and is being partly funded by state policy banks like China Development Bank. That fits with Beijing’s broader strategy to head off a debt crisis by helping overextended property and industrial companies shift their debts and bad assets onto the government (https://www.wsj.com/articles/china-gets-bailed-out-by-its- consumers-1492393707).
Part of that is through a massive expansion of municipal debt (https://www.wsj.com/articles/ where-the-china-credit-crunch-could-really-bite-1495705560) and by getting consumers to carry more of the load through cheap mortgages. China Development Bank’s slum-redevelopment lending hit nearly one trillion yuan ($152.6 billion) last year, more than half of which went to purchasing existing commercial housing.
As a result, real-estate investment has held up reasonably well this year and inventories continue to fall: Vacant residential floor space was down another 10 million square meters in August, even though traditional sales have been lukewarm for months.
More https://eresearch.fidelity.com/eresearch/markets_sectors/news/global_story.jhtml?storyid=201709180643MRKTWTCHNEWS_SVC000057&provider=MRKTWTCH&product=NEWS_SVC&category=AsiaPacific%2CCN&searchTopic=AsiaPacific
Sensible policy to defuse any domestic discontent in China: those people would be the rioters. Now, they are direct clients of the Party.
Break open the champagne at Communist Party HQ!
Very interesting! I hadn’t read about this before.
In China, before all of these big new concrete high-rise buildings were built, most people in China lived in low-rise buildings that were provided by employers, as part of a worker’s wages. These low rise buildings usually had a shared outhouse as bathroom facilities. They might not have electricity; they certainly didn’t in early years.
When China started their building boom, they were making a bet that workers would be able, out of their new (somewhat higher) wages thanks to industrialization, afford to pay for these much more energy intensive homes. Thus, all of these new homes are really condominiums, purchased with mortgages. These homes feature bathrooms for each apartment and electricity. As I understand it, up to about 11 stories, they do not have elevators; residents walk up, so lower floor apartments are preferred. Residents can add air conditioning if they like, but it is not generally provided. Quite a bit of heat is provided by “combined heat and power,” coming from heating ducts from coal fired power plants, located (conveniently) right in the middle of cities. This arrangement allows power plant employees to walk to work.
Now they are in the process of giving/selling the unneeded extra apartments to workers whom I would guess are lower-paid. They will be even less able to pay for these homes than current workers are. It is the appreciation of the homes that has seemed to make the purchases possible.
There are at least two problems I see:
(1) China’s economy is built on building new roads and new apartments, and pulling all of the resources out of the ground to do this. It can’t really stop building more new apartments. Unless it really can ramp up exports (but it has no buyers who can afford much more), it cannot stop the process of building more, even though it has run out of qualified buyers.
(2) China has figured out that building coal combined heat and power in the middle of cities is horribly polluting. It really needs to use power plants built away from the middle of cities. But to do this is more expensive. Individual homeowners need to buy electricity-powered heat pumps, and electricity needs to be sent to the cities. This approach is significantly more expensive for home owners than the direct piped hot-air.
As I understand it, even fairly well-off homeowners are struggling with the high cost of condos in China. They have a hard time affording more than one child, because the combined income of both parents is really needed to pay for mortgages. When a person adds to this the suddenly higher cost of heating apartments, condo owners are even more stressed. Adding low income homeowners to the combination sounds like a major source of future problems.
I’ve noticed quite a few horror stories relating to lax building standards in China. It seems that corruption and the drive to maximise profits within ever tighter time-frames are not conducive to high quality construction:
“In a crowded Chinese neighborhood, she suffered the loneliest of deaths.
She was trapped and forgotten in a broken elevator of her apartment building for more than a month before her body was discovered last week. She had a hand pressed against the door, some accounts said.”
https://www.nytimes.com/2016/03/08/world/asia/china-woman-elevator-death.html
“An escalator that killed a mother at a Chinese mall yesterday was known to be broken before the fatal accident took place, it has been revealed.
“Xiang Liujuan, 30, was killed when the footplate at the top of the escalator collapsed beneath her, as she shopped with her two-year-old son in Hubei province.
“Before being dragged into the machinery, however, the heroic mother was able to throw her toddler to safety…”
http://www.dailymail.co.uk/news/article-3177000/Staff-Chinese-shopping-mall-knew-escalator-swallowed-mother-broken-five-minutes-horrific-accident-killed-didn-t-switch-off.html
“A sand scandal is brewing in China, with concerns that low-quality concrete has been used in the construction of many of the country’s largest buildings — putting them at risk of collapse…”
http://www.wired.co.uk/article/china-concrete-sand-quality-scandal
I can believe these things. Morality is somewhat different in China. It seems to be related to “what you can get away with.” The government doesn’t try to oversee as many things, so there is more room for fudging things.
You ain’t seen nothin yet. Come to India ….
Funny how one’s morals change when one does not have enough…
I have seen this happen in business… previously ‘moral’ people … when faced with a failing business… will do things that they would never have considered doing .. when the business was doing well…
I spoke with an engineer in Sydney in January (he used to be a building inspector) …. he said that most of the recently constructed residential high rises in the city were of terrible quality and that a lot of them will experience leaking in the coming years…
Not sure how these properties are getting council consents…. no doubt corruption is involved
The ultimate hit job or searing indictment, if you prefer, on the Chinese was performed by Ralph Tonwsend in 1933 in his book Ways That are Dark. A PDF is available online.
The following is from Wikipedia:
In his introduction, Townsend describes the book as “an honest attempt to present the facts as they are, however unpleasant” and a counterbalance to the “maudlin sentiment” and “misinformation” of other writers on China who have made “fatuous attempts to sprinkle bright hopes over dark facts.” He argues that existing literature available in the West is skewed in favor of China because of the demands for “political correctness” on the part of publishers and the vested interests of the three major categories of foreigners in China, the missionaries, businesspeople and government officials. He notes that while China’s virtues will speak for themselves, “in appraising a stranger with whom we are to deal, it is important to know his shortcomings”.
A 1928 photograph of the Bund of Shanghai where Townsend starts his story
In the first two chapters he describes the atrocious conditions he witnessed in China. Shanghai is depicted as a squalid, noisy, and polluted den of crime, poverty, and disease, and yet still comparatively wealthy compared to the rest of the country. The interior of the country is difficult to access due to lack of infrastructure, is mostly unsafe for travel, and is wracked constantly by famine and starvation.
Townsend had asserted in chapter one that the cause of China’s present misery lies in the fundamental defects that exist in the ethnic characteristics of the Chinese people and in chapters three and four he explains what he believes these defects are. Townsend states that dishonesty is “the most prominent characteristic in the Chinese mentality as opposed to our own”.
Townsend gives many examples of him being lied to by Chinese employees, coolies, shopkeepers, and government officials, and notes that many other consuls were driven out of the service by this relentless and “aimless lying, with each lie merely a pretext for another”. The other highly salient trait of the Chinese is their “indifference to fellow suffering”. Through a large number of personal and second-hand anecdotes, Townsend argues that the Chinese may be the only people in the world who are completely unable to comprehend the basic human impulses of sympathy or gratitude toward other people.
Because the Chinese feel no empathy toward others, they behave in an unbelievably sadistic and cruel fashion toward one another, and they view altruistic foreigners as targets to be mercilessly taken advantage of. Other traits Townsend identifies as being typically Chinese are cowardice, lust for money, lack of a sense of personal hygiene, lack of critical thinking skills, insincerity, and obsession with hollow rites.Townsend believes that these traits are as notable among China’s leaders and educated strata as much as they are in the poor masses, and his analysis of historical documents leads him to believe that they are not a recent product of the present chaos, but rather are deeply ingrained traits of China’s national character. He concludes that the “outstanding characteristics” of the Chinese people “neither enable other peoples to deal satisfactorily with them, nor enable the Chinese to deal satisfactorily with themselves.”
https://upload.wikimedia.org/wikipedia/en/c/c2/Ways_That_Are_Dark_Cover.jpg
I don’t know how fair an analysis this is. China clearly has had a population problem for a very long time. The traditional greeting of, “Have you eaten?” gives a clue to the extent that overpopulation/inadequate food supply has shaped the culture.
We know that all cultures are self-organized. China is really a mixture of many cultures. It has done amazingly well in trying to bring these cultures together through a common written language.
The Chinese, like all other groups, have had to learn to adapt under difficult circumstances. What Townsend describes is his understanding of how they have adapted. Someone from within the Chinese culture would probably describe the adaptations differently. I know that very recently, bribery of officials was extremely common. Cheating on financial reports was/(is?) very common. There seemed to be a culture of, “If you can get away with it, it is OK.”
When there is clearly not enough to go around, some group has to be squeezed out, by the way the society works. This tends to be the poor and suffering; hence, the indifference to suffering. When there is little in total, children in schools need to be very well behaved, so teachers can teach more in the same class room. Students who deviate from culturally expected patterns will be treated badly/discriminated against. This tends to produce classes of children who all “think alike.” A recent newspaper article gave an example of a Chinese teacher teaching the children that all rain drops must be drawn as round, and falling straight down from the sky. Any child that deviated from the required approach was singled out. This approach does not lead to critical thinking, but it is needed in an economy with basically does not have enough extracted energy resources per capita.
I imagine this as a Chinese version of the Beverly Hillbillies… sans the oil riches… these peasants pack up their jalopies with their pigs and chickens…. and roll into the cities… where they are handed the keys to these modern apartments….
I am not sure exactly what happens next … since there is unlikely to be work for them…
Perhaps the PBOC will provide a monthly stipend… and they can hang out playing majhong….
Meanwhile the poor who migrate to places where this *is* work can struggle to find homes when they get there:
“Hundreds of people have been found living in an underground warren of windowless rooms under a luxury Beijing apartment complex.
“The hidden space had been subdivided into workers’ dormitories complete with kitchens, single bedrooms and even a smoking room.
“The tenants were migrant workers who had come to the city looking for low paid work, Chinese state radio reported.
“At least 400 people are thought to have been living in the space, in stark contrast to the wealthy elites living in the spacious Julong Gardens above. …”
http://www.independent.co.uk/news/world/asia/china-underground-home-discovery-400-people-below-apartment-complex-basement-cellar-a7799496.html
there *is* work not this…
Mexico City earthquake: Violent 7.4 magnitude tremors hit Mexican capital
http://www.independent.co.uk/news/world/americas/mexico-earthquake-today-city-latest-updates-today-magnitude-damage-a7956251.html
https://gfycat.com/dapperpointedjay
The Collapse is hitting hard in Mexico.
Literally.
http://www.lowtechmagazine.com/2017/09/how-to-run-modern-society-on-solar-and-wind-powe.html
“How (not) to run modern society on solar and wind power alone”
ofw readers wont be surprise, but still its worth sharing it, lots of references too
waiting for the next article
I love these kinds of statements: “there’s enough wind and solar power available to meet the energy needs of modern civilization many times over.” What this statement fails to mention is that there isn’t enough fossil fuel (and necessary resources) to build and maintain all the energy capture devices.
yes, right…
Which reminds me… I didn’t hear back from the Post Carbon people …. I will poke the MORE on again….
https://i.ytimg.com/vi/zxmz1-MvmrM/hqdefault.jpg
Article not all bad tho…
‘Consequently, if renewable power capacity is calculated based on the annual averages of solar and wind energy production and in tune with the average power demand, there would be huge electricity shortages for most of the time. To ensure that electricity supply always meets electricity demand, additional measures need to be taken.’
…..
‘As we shall see, all of these strategies are self-defeating on a large enough scale, even when they’re combined. If the energy used for building and maintaining the extra infrastructure is accounted for in a life cycle analysis of a renewable power grid, it would be just as CO2-intensive as the present-day power grid. ‘
Kris De Decker makes some good points, but he misses some other points. One thing he doesn’t point out is that if fossil fuels need to back up intermittent power, this process is, in fact, quite expensive for the fossil fuel plants. They need subsidies, that have to come from somewhere.
Another point he misses is that adapting to intermittency would have huge costs associated with it. People could only work when enough wind and solar was available. Thus, it would become impossible to schedule shifts in advance. Likely, there would not be enough energy, either, for much of a transportation system. So everyone would have to live very close to where they worked, so that they could come over, whenever enough wind or solar energy seemed to be available. This would imply a world of very small businesses, with nearby housing. We don’t have the resources to rebuild in this way.
thanks for your feedback
I have two words to describe how I feel about this guy:
More ON.
“People could only work when enough wind and solar was available. ”
This is the last paragraph of the article:
“Before the Industrial Revolution, both industry and transportation were largely dependent on intermittent renewable energy sources. The variability in the supply was almost entirely solved by adjusting energy demand. For example, windmills and sailing boats only operated when the wind was blowing. In the next article, I will explain how this historical approach could be successfully applied to modern industry and cargo transportation.”
So I don’t think it’s fair to accuse him of missing that point…
I will explain how this historical approach could be successfully applied to modern industry and cargo transportation.”
MORONic comment of the year. Anyone who cannot understand why …. has the opportunity to see a MORE on up close…. just look in the mirror
https://www.washingtonpost.com/news/the-fix/wp/2017/09/19/why-trumps-threat-to-totally-destroy-north-korea-is-extraordinary-even-for-him/?utm_term=.7fcb832a0c86
Well, peak oil compatriots, waiting for a peak oil economically induced collapse may get supplanted by a big war. Trump at the UN today threatened to totally destroy NK!
Meanwhile today China & Russia are having joint military exercises close to NK!
http://www.independent.co.uk/news/world/asia/north-korea-latest-russia-china-military-drills-us-trump-close-border-a7953506.html
But also, and here’s the kicker, China will defend NK if the US initiates a first strike!
https://www.washingtonpost.com/world/china-warns-north-korea-youre-on-your-own-if-you-go-after-the-us/2017/08/11/a01a4396-7e68-11e7-9026-4a0a64977c92_story.html?utm_term=.0e5571f8ef7a
“BEIJING — China won’t come to North Korea’s aid if it launches missiles threatening U.S. soil and there is retaliation, a state-owned newspaper warned Friday — but it would intervene if Washington strikes first.”
Japan, who are a US ally and will enter into war against NK if that gets started, have a frosty relation with China.
http://thediplomat.com/2016/08/the-most-dangerous-problem-in-asia-china-japan-relations/
‘The Most Dangerous Problem in Asia: China-Japan Relations’
“China and Japan have a thousand year history of fighting each other. What if that pattern repeats itself?”
So here’s the summary:
1. NK develops H-bomb & ICBM’s in spite of sanctions
2. US via Trump threatens to totally destroy NK
3. China will defend NK if US launches 1st strike
4. Japan, a US ally will fight NK
5. China will strike Japan if #4 occurs
6. SK is a US ally & will be in any Korea war
7. Russia & China have joint military exercises close to NK
8. Tillerson says diplomacy time ran out – war only option
9. World borrowing & printing $ on unprecedented scale
10. World production profit & tax revenue no longer exceeds expenses
11. Wealth inequality at all time high globally
Is this the war the banks need to achieve a reset? Even if that war may cause an unprecedented reset with billions of less people?
I mean think about it; financially this situation globally cannot go on for very much longer, so how many choices do the power elite have? It’s a chess game that has reached end game and the only way to move forward is for some kind of major reset to wipe the board clean and start the pieces at the beginning again, even if what happens in between is a massive die off and assets reset.
That nutter Cathal from Beforethecollapse.com said recently . “The reset has begun, final preps now”
Assuming the El deeers understand that an extinction event is imminent — they surely recognize that when BAU goes there will be no food in short order — they will also have in depth research on the impact of leaving 4000 spent fuel ponds offline ….
Assuming that the El ddeers have decided that there is no point in locking themselves in underground bunkers (jail cells….) waiting for their food and water to run out…. forcing them to emerge into a poisoned world….
Why would the El ders not look at this situation as one might look at one’s old and suffering dog….
Might they not just preempt our collective misery ….. with a massive launch?
One big fat global cremation! With North Korea as the false flag trigger.
Not such a bad way to go 🙂
Not such a bad way to go
There are certainly better ways to go than being shot or starved to death or drowning in a pool of desintery. An event as personal as that of our death should not be left to others, especially when those others come as hordes of violent mean marauders
I’ll much prefer, if possible, to take the job in my own hands,and do it with a double shot of weed and pneumonia, flavoured with a little booze, just for sprightliness. IOW, a galloping stoned pneumonic, à la romantic poet. Now this is a way to go!
Incineration by atomic bomb… or OD on opiates would be my top choices….
“China and Japan have a thousand year history of fighting each other. What if that pattern repeats itself?”
That assertion, at least, is incorrect. For most of the past thousand years, China and Japan have enjoyed peaceful relations or else managed to ignore each other. To tell the truth, for most of that time, neither had the means to attack the other. They were too busy with problems closer to home.
Each recent financial ‘reveal’ has resulted in a diversion (faux fla.g) and the destruction of evidence; I believe WT.c had documents relating to the Savings and loans debacle and the area of the Five.agon that was destroyed was concerned with the missing billions of D spending. As we get nearer to the ‘big reveal’ for the latest set of dirty laundry it is only natural that a new diversion is being readied. just my opinion/observation.
It seems like when there are a lot of problems at home, wars are a good way of diverting attention from them. They may even provide employment, if there is a growing number of unemployed or overly indebted workers. They also provide an excuse for more debt, so as to keep the local economy more or less booming.
Trump has turned into a raging neocon globalist at the UN. North Korea, Syria, Iran, Venezuela are all on his hit list…
Quite notable at the UN was also yesterday’s clownish-bombastic hand shake of Boris Johnson with Poroshenko, what a joke, two failed countries, so much grandeur and lofty plans for the future, which is not there for them..
Such an embarrassment.
One of Boris Johnson’s mistresses was a work colleague: I was amazed at her very poor taste in men.
Maybe he made her laugh. A lot.
“I was amazed at her very poor taste in men.”
How would you rate your own taste in men?
Was she/he/it a transgender unit?
I can imagine Boris being into that
She was very, very thin, pale, and schoolgirl- ish. 1920’s type of Flapper – no figure at all. Fat old Boris and her…….
My mouth is filling with vomit…. hang on ,… I will be right back
Here’s Charlton Heston in 1999 talking about cultural marxism and some advice for dealing with it.
IN 1999, I probably thought Charlton was a silly old fool. Nowadays, not so much.
https://youtu.be/yk2mXhnSxEg
Strange you exhibit another McCarthyism against Marxism, Tim. He was a philosopher, not a terrorist. As Charlton suggests, peddling ideas has its risks – both MLK and Trotsky ended up with metal in the head. You think Harvard youth are there for the truth?
Whatever Marx may have been under the bushy beard—and there are lots of conflicting opinions on that, can we agree on one thing? That contemporary organized cultural Marxism has about as much to with Karl Marx as contemporary organized Christianity has to do with Jesus Christ?
Jeremy, I think you’ve picked on the overgeneralization “Marxism” and traced that back to Marx and thrown another overgeneralization “McCarthyism” into the mix and the overall message that conveys to me is one of confusion. I don’t get your point, and it’s because you haven’t spelled out your point clearly enough for me to understand. Perhaps I’m just too old or too dumb a bunny to get it.
After Charlton took over as president of the NRA, he was branded a gun nut and a senile old fool in the media and Michael Moore came over to give him a close encounter of the turd kind in form of an interview-style hit job designed to destroy the man’s reputation. And I for one basically bought that at the time. I consented to be brainwashed by the media on this topic. But in this video, we see that Charlton was no more-on. And we see that he was about a lot more than gun rights. And I found him surprisingly reasonable and level headed.
I like the bit where he talked about being branded racist, sexist, homophobic, and anti-Semitic for not observing the dictates of political correctness. The cartoonish pretentious sorry excuse of the progressive left has no real solutions to society’s problems any more than the conservatives and/or the deplorables do. But everyone has become highly adept at labeling the opposition as a means of avoiding having to actually talk and think about real issues.
I collect these nicknames as if they were medals. McCarthyists Against Marxism: what a great name for a grunge rock band!
About Marx vs cultural Marxism: Marx had a lot of interesting things to say about the problems of capitalism, such as overproduction and the tendency toward zero profits and the need for growth. JMG had an interesting theory that nobody talks about the Long Depression of the late 19th century for two contemporary reasons – First, the overproduction problem makes both Austrians and Keynesians not want to talk about it. Second, a contemporary factor was a strong gold standard – which makes the topic tough for gold bugs.
Truth is inconvenient and are there are no easy solutions.
No Toys R Us for Christmas
You’re a mean one, Mr Collapse
https://media.giphy.com/media/tnkPqf1LQkA80/giphy.gif
https://media.giphy.com/media/tnkPqf1LQkA80/giphy.gif
Actually, it is the bondholders that lose out. Toys Are Us plans to continue, much as before. It is using debt that is available because it is in bankruptcy, to buy toys for Christmas. After Christmas, it will close some underperforming stores. At least this is what I understood from the WSJ article.
Isn’t toys R us on a cash basis with suppliers, so that’s a pretty short leash even for the few outlets that remain open.
It may very well be on a cash basis with a lot of suppliers already.
The new debt would not be erased by (this) bankruptcy, as I understand it. But it may not be enough to persuade suppliers to ship toys to the company. I imagine it has been slow to pay in the past, and has outstanding bills that it has not paid.
The Federal Reserve is setting America up for economic disaster – The Hill
http://thehill.com/opinion/finance/351153-the-federal-reserve-is-setting-america-up-for-economic-disaster
“The great project to rescue the American economy by the Fed has hit an obvious wall. The debt it used to goose the economy is now gumming up the system and constraining real growth”
The Fed is not trying to rescue anything. The Fed is trying to delay the collapse of BAU.
The debt is not constraining real growth — expensive to extract oil is constraining real growth.
They got one thing right though — economic disaster is imminent.
The end of BAU is imminent.
I’m wondering about the near time sequencing of events though..
Some claim we are only ~1 1/2 – 4yrs from visible shale depletion, i.e. crash on that front, that would likely immediately (weeks/months) produce at least three things for starters:
– highlight the mismatch available refinery capacities for different types of oil within several important countries
– highlight the big3: incurred debt/future liabilities/trade deficit of the petrodollar
– highlight the real (or mirage) spare production capacity from traditional producers trying to offset this fall, namely in Gulfies+NAfrica, Russia, and few other spots..
Meanwhile … conventional fields are in decline…. how long can shale offset those declines….
We will of course never know when the peak is reached… it could be any day now …. or it could be a number of years off…
The el ders would have a fairly good idea.
Or it could have been 2016….
Armstrong Williams (@ARightSide) is author of the brand new book, “Reawakening Virtues.” He served as an adviser and spokesman for Dr. Ben Carson’s 2016 presidential campaign
Fail.
Well said
The U.S. Will Act on North Korea Missiles That Pose a Threat, Mattis Says
https://www.bloomberg.com/news/articles/2017-09-19/u-s-to-act-on-north-korea-rockets-that-pose-threat-mattis-says?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social
Wages Rising Just A$3 a Year Has Aussies Snared In Debt Trap
https://www.bloomberg.com/news/articles/2017-09-18/wages-rising-just-a-3-a-year-leaves-aussies-snared-in-debt-trap
It doesn’t matter whether wage gains are from “real” growth or from inflation. Either helps with debt payback. Deflation is a huge problem.
Just for the fun of it I sent the google findings on renewable energy to Peak Prosperity…
Thanks for getting in touch. At PCI, we believe in making the transition to renewable energy sources, but there has to be a simultaneous societal overhaul — we’ve got to get away from the overconsumption and overpopulation. There’s no way to power the “business-as-usual”, growth-obsessed economy on renewable sources of energy. We’ll keep on spreading the word (see ourrenewablefuture.org, as well as our Think Resilience course at https://education.resilience.org/). We’ll also continue to work on developing community resilience as a positive way to deal with the converging crises of the 21st century.
Thanks again and best wishes.
Just for the fun of it… I sent this guy a short summary of how his vision would lead to a deflationary collapse of BAU … resulting in global starvation …. along with a link to Norman’s You Won’t Like Downsizing….
Stay tuned for more ridiculous comments on StewpidHumans.com
i keep saying things over on Resilience that contradict their infinite utopia message
just got back from USA/Canada—hence post-shortage on here
Comment to sum up my trip—crossing into USa from Canada with my bro
USA border moron looks at both our passports together–carrying the same name
Says: Where did you guys meet and How long have you known each other?
i think that might sum up part of the problem there
Pretty funny! Glad to have you back.
Gay married brothers… happens all the time….
Nothing would surprise me. My 18 yo nephew recently came out as a pansexual and has a trans man partner now. True story.
Yep, it all seems to shape as some cultures-nascent generations will make the coming depop wave that much quicker and deeper..
Oh dear. ‘Pansexual’ sounds very exciting. 🙂
I maybe we can call what is happening these days ‘Fiddling with Identitiy while Rome burns’?
pansexual sounds like a gay cookery programme
I initially thought it referred to one who has a sexual fetish for pans…
https://i.ytimg.com/vi/Bv5k9w6Hpi4/maxresdefault.jpg
http://i0.kym-cdn.com/photos/images/newsfeed/001/010/949/335.jpg
looks like the one Mrs Fast uses to assert her authority in the kitchen
and elsewhere
I was flying TWA before it went bankrupt.
A security person asked”
“Can you spell that?”
Norman. If you were twins – I assume not – what a reply you might have made!
I think your comment needs a little adjustment. This isn’t the response from Peak Prosperity (Chris Martenson’s site). It is the response from Post Carbon Institute (PCI). PCI is the owner of Resilience.org and the employer of Richard Heinberg.
I find I get along much better with Chris Martenson than with PCI.
Ah yes…. the other Koombaya Krew…. so many tribes in DelusiSTAN one gets confused
I have taunted this fool again …. he is either busy burying his head in the sand…. puffing Koombaya weed to block out reality …. or has fallen into deep despair and is swinging by the neck from a tree in his back yard.
https://imgur.com/a/lpphA
the giant irony here is that B.F. was a man and he was making a thoughtful statement.
so B.F., were you thinking when you made this statement?
problem?
what problem?
I don’t see no stinkin’ problem.
Maybe B.F. wasn’t thinking? Perhaps the thoughts just bubbled up into his awareness from the Land of Thoughts and he just entertained them with a cup of tea and then wrote them down?
Toys ‘R’ Us reportedly preparing for bankruptcy before Christmas
https://uk.finance.yahoo.com/news/toys-r-us-preparing-bankruptcy-christmas-133733772.html
No toys? No movies? This looks like a job for Elon!!! Will there be toys and movies on mars? That’s what I want to know.
Actually Elon was in the Telegraph a few months ago talking about the colonies he wants to build on Mars by 2050. And he did say he wanted movie theaters their. No joke.
SpaceX is actually a giant toy company…
yes, they make giant toys for one person – Elon, of course.
the trick is that he gets the US government to pay for his toy rockets.
Getting the government pay is the important outcome. Works for all kinds of things today.
Videogames are probably more realistic than what a person hears on the news.
even Hollywood having its box office decline
the summer box office dropped below $4 billion in revenue for the first time in over 10 years
The analytics company predicts domestic revenue for the box office will reach roughly $3.87 billion, which represents a 15.7-percent decline since last year
It will also be the first time since 2006 that the summer box office season didn’t reach $4 billion in revenue.
http://www.businessinsider.in/The-summer-box-office-dropped-below-4-billion-in-revenue-for-the-first-time-in-over-10-years/articleshow/60326756.cms
there was time when hollywood use to make great movies in 80s and 70s
like taxi driver the godfather apocalypse now dirty harry
I can explain why my wife and I stopped going to the movies but I can’t speak for others. We got a 65 inch diagonal ultra high definition TV and with blue ray movies it’s like being at the theatre but without the cost of going there, the cost of getting in, the outrageously loud volume and the inconvenience of people hacking up their lungs spreading who knows what. People never settle down nowadays – they just keep moving around, walking, talking, leaving, coming back, over and over again ad infinitum. It’s a movie for goodness sakes – sit down and watch it! Anyway a big screen TV is the winner over a theatre in our opinion.
Britain’s debt timebomb: FCA urges action over £200bn crisis
“Andrew Bailey, chief executive of the Financial Conduct Authority, told the Guardian – at the start of a series examining the £200bn of debt amassed by households in Britain – that he was concerned about the sheer number of people who needs loans to make ends meet. He pinpointed gig economy workers, who do not have guaranteed hours, as in special need of credit to smooth their incomes.
“StepChange highlighted young people and renters as increasingly vulnerable, with many needing to borrow to cover the most basic everyday bills.”
https://www.theguardian.com/business/2017/sep/18/britain-debt-timebomb-fca-chief-crisis
Not good news! This article says “Bank lending to British businesses still 20 per cent below pre-financial crisis levels as emerging market borrowing surges.”
http://www.cityam.com/272189/bank-lending-british-businesses-still-20-per-cent-below-pre
I expect that if British companies had seen opportunities for investment, they would have borrowed a whole lot more money. Without investment, job opportunities lag. Jobs that are available pay too little.
Another short “Black Mirror” piece, showing how our obsession with technology could feed into our decadence. Fictional, but you could almost imagine it happening.
(Malyshkina 2010) Concludes: it would take 131 more years to transition away from oil. And world oil production is likely to peak within the next decade.
http://pubs.acs.org/doi/abs/10.1021/es100730q
http://www.businessinsider.com/131-years-to-replace-oil-2010-11
Hillary Clinton says she made a mistake when she gave speeches on Wall Street after leaving government. Taking money from banks, she writes in her new memoir, created the impression she was in their pocket.
Her old boss doesn’t seem to share her concern.
Last month, just before her book “What Happened” was published, Barack Obama spoke in New York to clients of Northern Trust Corp. for about $400,000, a person familiar with his appearance said. Last week, he reminisced about the White House for Carlyle Group LP, one of the world’s biggest private equity firms, according to two people who were there. Next week, he’ll give a keynote speech at investment bank Cantor Fitzgerald LP’s health-care conference.
https://www.bloomberg.com/news/articles/2017-09-18/obama-goes-from-white-house-to-wall-street-in-less-than-one-year
And here we see how the El ders buy loyalty…. they simply ‘suggest’ that their minions pay Obama 400k a pop for giving a pointless speech…..
Why would anyone oppose their power?
You would have to be a very stewwpid person indeed…. play along — and the rewards are enormous…
Where do I sign up for this gig?
Even if you got paid nothing for being president, the follow-on effects would be sufficient to make the job worth it.
China has had a big problem with bribery. So do many under-developed countries. It is good that we don’t have that problem here.
the squeal to the big short is here
Market bets against retail at highest level since Lehman Brothers collapse
Investor fear of retail has turned to despair, with bets against the sector reaching the highest level since the collapse of Lehman Brothers.
Short interest — a measure of how many shares are being sold short compared with the total “float,” or shares outstanding — has reached a post-financial crisis peak of 15.6 percent, according to Bespoke Investment Group. The larger set of consumer discretionary stocks has a short interest level of 11.7 percent, the highest since March 2009, around the time of the crisis lows for the stock market.
Both figures are as of the end of August and were released Tuesday. Short-sellers borrow shares to sell for a period of time, hoping to pocket the difference when they buy them back
https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/charts/2017/09/1505403731_retail.PNG
https://www.cnbc.com/2017/09/14/market-bets-against-retail-at-highest-since-lehman-brothers-collapse.html
sequel
While oil shorts are very slowly gaining speed (big energy not much yet),
REITs are still completely moribund:
https://finance.yahoo.com/quote/SRS?p=SRS
Timing is always the big question. Right before Christmas, companies are going to try to continue operations for at least the next three months, unless things are truly desperate.
The petroleum industry is in the business of selling energy. When it requires more of their energy to produce it than what they have to sell they are a dying industry. Bartenders who drink more booze than they sell have the same problem.
We hear this over and over from EROI folks, but I don’t think it is a good statement of the problem. The amount of energy available is very flexible, depending on how high prices can rise. The problem is really a wage problem–we can’t get wages high enough to allow prices to rise to the level needed for those doing the energy extraction to stay in business. Energy is of course what is required for high wages.
The EROI folks have a very narrow idea of how the world works. They also have a very limited way of counting the Energy In compared to Energy Out. This limited way of counting misses much of the energy that is truly part of the “Energy In” used in the denominator of (Energy Out/Energy In). So there is really no good way of counting “Net Energy.” Thus, their calculation method does not give much information on whether bartenders are drinking more booze than they sell. This is especially true of wind and solar.
http://www.abc.net.au/news/2017-09-18/verrender-what-are-the-odds-of-us-stock-market-crash/8954966?section=business
Reversing all this will be no simple task. In fact, it may be impossible. Perhaps the only way out is to write off the debts, to simply nuke them and start again.
That will cause mayhem on currency and bond markets. But it may be the only way out.
It would cause more than mayhem…. it would collapse BAU…. so debts will not be nuked… they will be ignored
When all the players say it doesn’t matter — then debt really does not matter….
Look at Japan… they are way way beyond the threshold that would normally result in economic collapse…
But nobody wants them to collapse —- so they are allowed to keep piling on debt….
So — countries continue to pile on debt exceeding the ‘This Time is Different’ limits of debt to GDP that should result in dire consequences.
Because there is no choice now… this is the only way global GDP grows…. so the CBs hold their collective noses … and allow the game to continue…
Based on what I am seeing …. it is the hard limits that are more likely to signal the end game i.e. the peaking of the supply of oil…
Rather than a crisis triggered by a financial issue.
The CBs will simply hose down any financial calamity before it gets started… we have seen that time and time again ….
it is the hard limits that are more likely to signal the end game i.e. the peaking of the supply of oil
Bingo! I think the Elders understand this as well..
It’s like playing a weird new game of poker – every nation wants to win, but can’t afford anybody else to drop out. The game must go on! Even, let’s say, China wants to supplant the petro dollar – I find it hard to believe they would be willing and able to face the consequences of this. Maybe I’m wrong – but I tend to think everyone is painted into a corner. Then again – in times past nations were delusional about their chance of military victory and were willing to die for it. Now are we just delusional about our chances for economic victory?
States have often gone to war not so much because they were delusional about victory, but manged to convince themselves that time for action was running out, and if they didn’t take the chance they would be over-whelmed by their enemies in the next few years. Hence aggression is often a product of weakness -real or anticipated. Not very hopeful to contemplate!
“I tend to think everyone is painted into a corner.”
BINGO!
I think the title is The Game BLOCK.
https://search.aol.com/aol/video?q=scratch+perry+++the+game+block&s_it=video-ans&sfVid=true&videoId=775B58A95D032BB6AFCA775B58A95D032BB6AFCA&v_t=webmail-hawaii1-basicaol
“I feel like a Texas jackass caught in a hailstorm. You can’t run, you can’t hide, and you can’t make it stop.”
Pres Lyndon Johnson (on the quandary of Viet Nam)
Meanwhile in Norway: After a formidable rise over the last 10 years the house prices have plateaued and are showing signs of a downturn.
Jarle B
Any doomer homesteaders in Norway?
xabier,
not many I’m afraid – most (by far) just see a small bump in the road …
Peak Ideas: Stanford scholars say big ideas are getting harder to find
http://news.stanford.edu/2017/09/14/stanford-scholars-says-big-ideas-getting-harder-find/
Joseph Tainter has some interesting statistics about the diminishing returns on research. Basically we’ve gone from solo naturalists (Darwin, Curie) to gigantic research teams with huge grants in a few generations – producing less knowledge which impacts real lives.
Don’t forget the great solo naturalist of the Megacancer and the many lesser RNA that toil daily in their technological cells. Big ideas still exist, you just have to turn off your cognitive biases and filters and your predisposition to sweet things and happy endings to appreciate them.
I have a bunch of big ideas. These crusty gatekeepers just don’t want to hear them.
Yeah, there’s some of that. But his points come from changes in patent filings, also the general decline of first mechanical engineering, then chemical engineering – those fields that really produced changes which effected peoples lives immensely.
A friend is a transplant surgeon. He has to make about 4-5 grant applications a year, in the hope that one will come good. Such a waste of his time. His last project was to raise enough money to pay someone to make the applications for him….. 🙂
Let me guess – hospital connected to a research university?
Yes, and he is a teaching fellow at the university, too. Busy man.
The bar was much, much lower in the past. New inventions could have large impacts, simply because the pond was smaller and economies of scale were not yet a thing.
For example, today an airline that achieves a 2% fuel efficiency improvement is massive but an early steam engine with 2% improvement would go completely unnoticed. Electricity was huge when introduced, improvements in generation, application and devices that use it are still occurring but improvements are only slightly incremental.
I’m sure everyone could think of examples.
Unable to pay its bills, Pennsylvania is broke
“We’ve never been in the position where not even the Great Depression where we, the state, could not pay its bills,” Stier said.
http://fox43.com/2017/09/15/unable-to-pay-its-bills-pennsylvania-is-broke/
Historically, a major way governments have collapsed is when governments cannot pay their bills. Wage disparity becomes too great. It becomes too hard to collect enough taxes from the “average citizen.” We seem to be headed that direction. Illinois was having similar problems recently, I remember. And the US Federal Government really hasn’t gotten its funding problems fixed.
So much for those Marcellus Shale deposits in Penn. It went boom, bust and now clean-up.
Today’s situation when US Congress/Senate people are seriously discussing the option of putting China under wide trade sanctions (piggybacking on the NKorea situation), specifically incl. kicking them out of SWIFT and other financial systems, it’s clear we have two major options how to look at the world:
1/ unparalleled peak stupidity and hubris
2/ owners of the system are actively setting up a trap in which they could flush the period of US serving as host nation of the global empire for good, using gullible and not very bride enablers to finalize (and take blame) in this process by such actions in relatively short order (years)
My, estimate is roughly 30% on the former and 70% on the latter option, but everybody see the world and “evidence” in different light, so who knows..
bride/bright you will get the picture.. lolz..
They could just issue their own crypto currency, Quakercoin.
https://medium.com/@caityjohnstone/never-forget-the-us-government-has-a-known-history-of-using-false-flags-1e08d6543d0c
I’m sure the populace will be *thrilled*:
“Saudi Arabia is considering a plan to cut subsidies for gasoline and jet fuel in November at the latest, as the world’s biggest oil exporter pushes a program to curtail public spending after a global slump in prices.
“The government would boost gasoline to parity with varying international prices under the plan, according to a person with knowledge of the matter. At current levels, this could result in a hike of about 80 percent for octane-91 grade gasoline to about 1.35 riyals per liter (0.36 cents), the person said on condition of anonymity. The government plans to delay increases in other energy prices until early 2018, the person said…”
https://www.bloomberg.com/news/articles/2017-09-18/saudis-said-to-weigh-raising-gasoline-prices-by-end-of-november?fref=gc&dti=623305194398609
The Arab mentality won’t cope well with that: for them, as for all primitive people,wealth = doing nothing, enjoying the fruits of success.
They lack the appreciation of the value and virtue of hard work and foresight that, say, the Dutch and other Northern Europeans used to have – hard work to conquer and make fruitful..
Arabs have just loved war, slaving and banditry as preferred occupations, anything else being rather ‘ignoble’. Ask the poor Africans who were traded by them well into the 20th century.
When they had established their empire, they quite quickly handed defence over to the Turks, who eventually deposed rulers or used them as puppets.
In Spain, they gave the worst land to the Berbers, the best to themselves, and farmed it with slaves while they enjoyed little boys and female slaves in the shade.
Gosh, what a shock awaits these people!
These actions act to reduce the growth in world demand for oil. They act in the direction of keeping prices down. Also, of course, the can lead to uprisings.
https://imgur.com/a/7TDed
All you need is one nuke and you get a spot at the big boys table. It used to mean influence and “respect” but now with cake eating fat boy…it’s just dangerous. The other countries of the cold war era knew the consequences.
Conventional war is obsolete and Nuclear war can’t exist. The wars we have now, that are going on now, are proxy wars, currency wars, economic wars and the latest “hybrid warfare”. Less messy.
“… but now with cake eating fat boy…it’s just dangerous.”
what the world needs now… is love, sweet love…
or perhaps better: one brave NK citizen to rid the country of its so-called “leader”.
you never know.
Getting rid of Kim Jong Un won’t solve anything. North Korea has been at war with South Korea and the USA for over sixty years now. Both sides feel the need to keep sizeable military forces at the ready. For North Korea, this had led to the military becoming very powerful and influential. They can’t be happy about the regular military exercises that the South Koreans and Americans have just across the border. A peace treaty would be more effective than a leadership change at this point.
I’m sorry but I just can’t take the Kim Jong-un threat seriously when I see pictures like this:
https://www.thesun.co.uk/wp-content/uploads/2016/06/nintchdbpict000246929403.jpg?w=960
https://static.euronews.com/articles/361004/1000x563_361004.jpg
https://www.thesun.co.uk/wp-content/uploads/2017/07/nintchdbpict000336515164-e1499237065202.jpg?strip=all&w=553
And what’s with the hidden hand symbolism in the first picture? He reminds me of these guys:
https://4.bp.blogspot.com/-14Bgo6pUpWw/T8Lj-NVZvnI/AAAAAAAACDY/zvsXBMcDBGQ/w1200-h630-p-k-no-nu/masons.jpg
Were all of them actors as well?
Those are probably not genuine emotional responses to NK’s leader, but instead what they feel they need to act like to bolster his ego so they aren’t sent out to be shot by anti aircraft weapons like the dozens that have been so far.
Not too different than politicians treading carefully not to irritate Trump, because they know the result will initiate him becoming vindictive in his public language towards them, which causes embarrassment. No one wants to be embarrassed.
If someone is a mega star like Elvis the people around him stop giving him the usual feedback we all get from other people and his behavior degenerates in personally destructive ways. But if someone is very powerful the people around that person will not only stop providing behavior feedback but start acting like that person is a God and then really bad things can happen to many people.
Sign language interpreter used gibberish, warned of bears, monsters during Hurricane Irma
http://www.al.com/news/index.ssf/2017/09/sign_language_interpreter_used.html
Irma was a monster storm that was hard to bear.
I would hope this isn’t the price of maintaining BAU awhile. They bandy the word sustainable around quite liberally, sad to say. And this is after untold destruction to build their memory-lacking suburban utopias. But it now wouldn’t surprise me if this vision is significantly in our near term future. I might gleefully accept annihilation instead, just the same.
https://www.planetizen.com/node/94838/how-millennials-prefer-their-suburbs
https://wolfstreet.com/2017/09/13/can-you-shut-down-nuclear-power-plant-before-hurricane/
https://news.google.com/news/video/iMktK1mIuTA/dCbjlp1h4Aku2rMZfmJeSyXEJ7QCM?hl=en
Trump claims our options to handle NK are overwhelming. Well, maybe the list of options are but nothing has actually been done to stop NK from continuing to develop their nuclear arsenal. Which confirms the old adage; ‘talk is cheap’. I just can’t get over how much this guy blows hot air thinking a bunch of bluster means something when it actually means nothing. In fact all this talk is having the opposite effect of strengthening NK’s resolve to continue to develop nukes.
how many Obama years do you count for “… nothing has actually been done to stop NK from continuing to develop their nuclear arsenal.”
please answer in a round number from 1 to 8.
thanks.
The US sold NK their nuclear reactors under a defense contractor ran by Donald Rumsfeld back in 2000. Then two years later under Bush the US declared them a terrorist state because of the reactors they sold them.
the year 2000 would have been under Bill Clinton.
solid, informative answer, Cliff.
now where’s the response to my post above?
hint: from 1 to 8.
It wasn’t the US government that sold it to him in 2000. It was a defense contractor that Donald Rumsfeld was head of.
‘In September 2015, allegations were published that David Cameron, who at the time was British Prime Minister had, as a student, placed a “private part” into the mouth of a dead pig as part of an initiation rite.’
In December 2011, this episode of ‘Black Mirror’ appeared on British TV.
http://www.dailymotion.com/video/x3cw203
https://en.wikipedia.org/wiki/The_National_Anthem_(Black_Mirror)
That’s very much probable, however, you don’t want to even know about such initiation rites at 2-3 layers above the level of such mere PM actor..
But have you never heard that we Brits are actually jolly decent fellows and gentlemen to boot? Why, we only got our Empire by being nice to people.