Why political correctness fails – Why what we know ‘for sure’ is wrong (Ex Religion)

Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows:

There is a right way to think and a right way to talk, and also a right set of things to think and talk about. Secularism is taken for granted. Environmentalism is a sacred cause. Issues of identity—principally the holy trinity of race, gender, and sexuality—occupy the center of concern.

There are other beliefs that go with this religion of success:

  • Wind and solar will save us.
  • Electric cars will make transportation possible indefinitely.
  • Our world leaders are all powerful.
  • Science has all of the answers.

To me, this story is pretty much equivalent to the article, “Earth Is Flat and Infinite, According to Paid Experts,” by Chris Hume in Funny Times. While the story is popular, it is just plain silly.

In this post, I explain why many popular understandings are just plain wrong. I cover several controversial topics, including environmentalism, peer-reviewed literature, and climate change models. This post pretty much excludes religion. It was added for people who find it hard to believe that a scientific article could also touch upon religion. If you want the complete discussion, as the post was originally written, please see this post

Myth 1: If there is a problem with the lack of any resource, including oil, it will manifest itself with high prices.

As we reach limits of oil or any finite resource, the problem we encounter is an allocation problem. 

What happens if economy stops growing

Figure 1. Two views of future economic growth. Created by author.

As long as the quantity of resources we can extract from the ground keeps rising faster than population, there is no problem with limits. The tiny wedge that each person might get from these growing resources represents more of that resource, on average. Citizens can reasonably expect that future pension promises will be paid from the growing resources. They can also expect that, in the future, the shares of stock and the bonds that they own can be redeemed for actual goods and services.

If the quantity of resources starts to shrink, the problem we have is almost a “musical chairs” type of problem.

Figure 2. Circle of chairs arranged for game of musical chairs. Source

In each round of a musical chairs game, one chair is removed from the circle. The players in the game must walk around the outside of the circle. When the music stops, all of the players scramble for the remaining chairs. Someone gets left out.

The players in today’s economic system include

  • High paid (or elite) workers
  • Low paid (or non-elite) workers
  • Businesses
  • Governments
  • Owners of assets (such as stocks, bonds, land, buildings) who want to sell them and exchange them for today’s goods and services

If there is a shortage of a resource, the standard belief is that prices will rise and either more of the resource will be found, or substitution will take place. Substitution only works in some cases: it is hard to think of a substitute for fresh water. It is often possible to substitute one energy product for another. Overall, however, there is no substitute for energy. If we want to heat a substance to produce a chemical reaction, we need energy. If we want to move an object from place to place, we need energy. If we want to desalinate water to produce more fresh water, this also takes energy.

The world economy is a self-organized networked system. The networked system includes businesses, governments, and workers, plus many types of energy, including human energy. Workers play a double role because they are also consumers. The way goods and services are allocated is determined by “market forces.” In fact, the way these market forces act is determined by the laws of physics. These market forces determine which of the players will get squeezed out if there is not enough to go around.

Non-elite workers play a pivotal role in this system because their number is so large. These people are the chief customers for goods, such as homes, food, clothing, and transportation services. They also play a major role in paying taxes, and in receiving government services.

History says that if there are not enough resources to go around, we can expect increasing wage and wealth disparity. This happens because increased use of technology and more specialization are workarounds for many kinds of problems. As an economy increasingly relies on technology, the owners and managers of the technology start receiving higher wages, leaving less for the workers without special skills. The owners and managers also tend to receive income from other sources, such as interest, dividends, capital gains, and rents.

When there are not enough resources to go around, the temptation is to use technology to replace workers, because this reduces costs. Of course, a robot does not need to buy food or a car. Such an approach tends to push commodity prices down, rather than up. This happens because fewer workers are employed; in total they can afford fewer goods. A similar downward push on commodity prices occurs if wages of non-elite workers stagnate or fall.

If wages of non-elite workers are lower, governments find themselves in increasing difficulty because they cannot collect enough taxes for all of the services that they are asked to provide. History shows that governments often collapse in such situations. Major defaults on debt are another likely outcome (Figure 3). Pension holders are another category of recipients who are likely to be “left out” when the game of musical chairs stops.

Figure 3 – Created by Author.

The laws of physics strongly suggest that if we are reaching limits of this type, the economy will collapse. We know that this happened to many early economies. More recently, we have witnessed partial collapses, such as the Depression of the 1930s. The Depression occurred when the price of food dropped because mechanization eliminated a significant share of human hand-labor. While this change reduced the price of food, it also had an adverse impact on the buying-power of those whose jobs were eliminated.

The collapse of the Soviet Union is another example of a partial collapse. This collapse occurred as a follow-on to the low oil prices of the 1980s. The Soviet Union was an oil exporter that was affected by low oil prices. It could continue to produce for a while, but eventually (1991) financial problems caught up with it, and the central government collapsed.

Figure 4. Oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.

Low prices are often a sign of lack of affordability. Today’s oil, coal, and natural gas prices tend to be too low for today’s producers. Low energy prices are deceptive because their initial impact on the economy seems to be favorable. The catch is that after a time, the shortfall in funds for reinvestment catches up, and production collapses. The resulting collapse of the economy may look like a financial collapse or a governmental collapse.

Oil prices have been low since late 2014. We do not know how long low prices can continue before collapse. The length of time since oil prices have collapsed is now three years; we should be concerned.

Myth 2. (Related to Myth 1) If we wait long enough, renewables will become affordable.

The fact that wage disparity grows as we approach limits means that prices can’t be expected to rise as we approach limits. Instead, prices tend to fall as an increasing number of would-be buyers are frozen out of the market. If in fact energy prices could rise much higher, there would be huge amounts of oil, coal and gas that could be extracted.

Figure 5. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels, according to IEA models.

There seems to be a maximum affordable price for any commodity. This maximum affordable price depends to a significant extent on the wages of non-elite workers. If the wages of non-elite workers fall (for example, because of mechanization or globalization), the maximum affordable price may even fall.

Myth 3. (Related to Myths 1 and 2) A glut of oil indicates that oil limits are far away. 

A glut of oil means that too many people around the world are being “frozen out” of buying goods and services that depend on oil, because of low wages or a lack of job. It is a physics problem, related to ice being formed when the temperature is too cold. We know that this kind of thing regularly happens in collapses and partial collapses. During the Depression of the 1930s, food was being destroyed for lack of buyers. It is not an indication that limits are far away; it is an indication that limits are close at hand. The system can no longer balance itself correctly.

Myth 4: Wind and solar can save us.

The amount of energy (other than direct food intake) that humans require is vastly higher than most people suppose. Other animals and plants can live on the food that they eat or the energy that they produce using sunlight and water. Humans deviated from this simple pattern long ago–over 1 million years ago.

Unfortunately, our bodies are now adapted to the use of supplemental energy in addition to food. The use of fire allowed humans to develop differently than other primates. Using fire to cook some of our food helped in many ways. It freed up time that would otherwise be spent chewing, providing time that could be used for tool making and other crafts. It allowed teeth, jaws and digestive systems to be smaller. The reduced energy needed for maintaining the digestive system allowed the brain to become bigger. It allowed humans to live in parts of the world where they are not physically adapted to living.

In fact, back at the time of hunter-gatherers, humans already seemed to need three times as much energy total as a correspondingly sized primate, if we count burned biomass in addition to direct food energy.

Figure 6 – Created by author.

“Watts per Capita” is a measure of the rate at which energy is consumed. Even back in hunter-gatherer days, humans behaved differently than similar-sized primates would be expected to behave. Without considering supplemental energy, an animal-like human is like an always-on 100-watt bulb. With the use of supplemental energy from burned biomass and other sources, even in hunter-gatherer times, the energy used was equivalent to that of an always-on 300-watt bulb.

How does the amount of energy produced by today’s wind turbines and solar panels compare to the energy used by hunter-gatherers? Let’s compare today’s wind and solar output to the 200 watts of supplemental energy needed to maintain our human existence back in hunter-gatherer times (difference between 300 watts per capita and 100 watts per capita). This assumes that if we were to go back to hunting and gathering, we could somehow collect food for everyone, to cover the first 100 watts per capita. All we would need to do is provide enough supplemental energy for cooking, heating, and other very basic needs, so we would not have to deforest the land.

Conveniently, BP gives the production of wind and solar in “terawatt hours.” If we take today’s world population of 7.5 billion, and multiply it by 24 hours a day, 365.25 days per year, and 200 watts, we come to needed energy of 13,149 terawatt hours per year. In 2016, the output of wind was 959.5 terawatt hours; the output of solar was 333.1 terawatt hours, or a total of 1,293 terawatt hours. Comparing the actual provided energy (1,293 tWh) to the required energy of 13,149 tWh, today’s wind and solar would provide only 9.8% of the supplemental energy needed to maintain a hunter-gatherer level of existence for today’s population. 

Of course, this is without considering how we would continue to create wind and solar electricity as hunter-gatherers, and how we would distribute such electricity. Needless to say, we would be nowhere near reproducing an agricultural level of existence for any large number of people, using only wind and solar. Even adding water power, the amount comes to only 40.4% of the added energy required for existence as hunter gatherers for today’s population.

Many people believe that wind and solar are ramping up rapidly. Starting from a base of zero, the annual percentage increases do appear to be large. But relative to the end point required to maintain any reasonable level of population, we are very far away. A recent lecture by Energy Professor Vaclav Smil is titled, “The Energy Revolution? More Like a Crawl.”

Myth 5. Evaluation methods such as “Energy Returned on Energy Invested” (EROI) and “Life Cycle Analyses (LCA)” indicate that wind and solar should be acceptable solutions. 

These approaches are concerned about how the energy used in creating a given device compares to the output of the device. The problem with these analyses is that, while we can measure “energy out” fairly well, we have a hard time determining total “energy in.” A large share of energy use comes from indirect sources, such as roads that are shared by many different users.

A particular problem occurs with intermittent resources, such as wind and solar. The EROI analyses available for wind and solar are based on analyses of these devices as stand-alone units (perhaps powering a desalination plant, on an intermittent basis). On this basis, they appear to be reasonably good choices as transition devices away from fossil fuels.

EROI analyses don’t handle the situation well when there is a need to add expensive infrastructure to compensate for the intermittency of wind and solar. This situation tends to happen when electricity is added to the grid in more than small quantities. One workaround for intermittency is adding batteries; another is overbuilding the intermittent devices, and using only the portion of intermittent electricity that comes at the time of day and time of year when it is needed. Another approach involves paying fossil fuel providers for maintaining extra capacity (needed both for rapid ramping and for the times of year when intermittent resources are inadequate).

Any of these workarounds is expensive and becomes more expensive, the larger the percentage of intermittent electricity that is added. Euan Mearns recently estimated that for a particular offshore wind farm, the cost would be six times as high, if battery backup sufficient to even out wind fluctuations in a single month were added. If the goal were to even out longer term fluctuations, the cost would no doubt be higher. It is difficult to model what workarounds would be needed for a truly 100% renewable system. The cost would no doubt be astronomical.

When an analysis such as EROI is prepared, there is a tendency to leave out any cost that varies with the application, because such a cost is difficult to estimate. My background is in actuarial work. In such a setting, the emphasis is always on completeness because after the fact, it will become very clear if the analyst left out any important insurance-related cost. In EROI and similar analyses, there is much less of a tieback to the real world, so an omission may never be noticed. In theory, EROIs are for multiple purposes, including ones where intermittency is not a problem. The EROI modeler is not expected to consider all cases.

Another way of viewing the issue is as a “quality” issue. EROI theory generally treats all types of energy as equivalent (including coal, oil, natural gas, intermittent electricity, and grid-quality electricity). From this perspective, there is no need to correct for differences in types of energy output. Thus, it makes perfect sense to publish EROI and LCA analyses that seem to indicate that wind and solar are great solutions, without any explanation regarding the likely high real-world cost associated with using them on the electric grid.

Myth 6. Peer reviewed articles give correct findings.

The real story is that peer reviewed articles need to be reviewed carefully by those who use them. There is a very significant chance that errors may have crept in. This can happen because of misinterpretation of prior peer reviewed articles, or because prior peer reviewed articles were based on “thinking of the day,” which was not quite correct, given what has been learned since the article was written. Or, as indicated by the example in Myth 5, the results of peer reviewed articles may be confusing to those who read them, in part because they are not written for any particular audience.

The way university research is divided up, researchers usually have a high level of specialized knowledge about one particular subject area. The real world situation with the world economy, as I mentioned in my discussion of Myth 1, is that the economy is a self-organized networked system. Everything affects everything else. The researcher, with his narrow background, doesn’t understand these interconnections. For example, energy researchers don’t generally understand economic feedback loops, so they tend to leave them out. Peer reviewers, who are looking for errors within the paper itself, are likely to miss important feedback loops as well.

To make matters worse, the publication process tends to favor results that suggest that there is no energy problem ahead. This bias can come through the peer review process. One author explained to me that he left out a certain point from a paper because he expected that some of his peer reviewers would come from the Green Community; he didn’t want to say anything that might offend such a reviewer.

This bias can also come directly from the publisher of academic books and articles. The publisher is in the business of selling books and journal articles; it does not want to upset potential buyers of its products. One publisher made it clear to me that its organization did not want any mention of problems that seem to be without a solution. The reader should be left with the impression that while there may be issues ahead, solutions are likely to be found.

In my opinion, any published research needs to be looked at very carefully. It is very difficult for an author to move much beyond the general level of understanding of his audience and of likely reviewers. There are financial incentives for authors to produce PC reports, and for publishers to publish them. In many cases, articles from blogs may be better resources than academic articles because blog authors are under less pressure to write PC reports.

Myth 7. Climate models give a good estimate of what we can expect in the future.

There is no doubt that climate is changing. But is all of the hysteria about climate change really the correct story?

Our economy, and in fact the Earth and all of its ecosystems, are self-organized networked systems. We are reaching limits in many areas at once, including energy, fresh water, the number of fish that can be extracted each year from oceans, and metal ore extraction. Physical limits are likely to lead to financial problems, as indicated in Figure 3. The climate change modelers have chosen to leave all of these issues out of their models, instead assuming that the economy can continue to grow as usual until 2100. Leaving out these other issues clearly can be expected to overstate the impact of climate change.

The International Energy Agency is very influential with respect to which energy issues are considered. Between 1998 and 2000, it did a major flip-flop in the importance of energy limits. The IEA’s 1998 World Energy Outlook devotes many pages to discussing the possibility of inadequate oil supplies in the future. In fact, near the beginning, the report says,

Our analysis of the current evidence suggests that world oil production from conventional sources could peak during the period 2010 to 2020.

The same report also mentions Climate Change considerations, but devotes many fewer pages to these concerns. The Kyoto Conference had taken place in 1997, and the topic was becoming more widely discussed.

In 1999, the IEA did not publish World Energy Outlook. When the IEA published the World Energy Outlook for 2000, the report suddenly focused only on Climate Change, with no mention of Peak Oil. The USGS World Petroleum Assessment 2000 had recently been published. It could be used to justify at least somewhat higher future oil production.

I will be the first to admit that the “Peak Oil” story is not really right. It is a halfway story, based on a partial understanding of the role physics plays in energy limits. Oil supply does not “run out.” Peak Oilers also did not understand that physics governs how markets work–whether prices rise or fall, or oscillate. If there is not enough to go around, some of the would-be buyers will be frozen out. But Climate Change, as our sole problem, or even as our major problem, is not the right story, either. It is another halfway story.

One point that both Peak Oilers and the IEA missed is that the world economy doesn’t really have the ability to cut back on the use of fossil fuels significantly, without the world economy collapsing. Thus, the IEA’s recommendations regarding moving away from fossil fuels cannot work. (Shifting energy use among countries is fairly easy, however, making individual country CO2 reductions appear more beneficial than they really are.) The IEA would be better off talking about non-fuel changes that might reduce CO2, such as eating vegetarian food, eliminating flooded rice paddies, and having smaller families. Of course, these are not really issues that the International Energy Association is concerned about.

The unfortunate truth is that on any difficult, interdisciplinary subject, we really don’t have a way of making a leap from lack of knowledge of a subject, to full knowledge of a subject, without a number of separate, partially wrong, steps. The IPCC climate studies and EROI analyses both fall in this category, as do Peak Oil reports.

The progress I have made on figuring out the energy limits story would not have been possible without the work of many other people, including those doing work on studying Peak Oil and those studying EROI. I have also received a lot of “tips” from readers of OurFiniteWorld.com regarding additional topics I should investigate. Even with all of this help, I am sure that my version of the truth is not quite right. We all keep learning as we go along.

There may indeed be details of this particular climate model that are not correct, although this is out of my area of expertise. For example, the historical temperatures used by researchers seem to need a lot of adjustment to be usable. Some people argue that the historical record has been adjusted to make the historical record fit the particular model used.

There is also the issue of truing up the indications to where we are now. I mentioned the problem earlier of EROI indications not having any real world tie; climate model indications are not quite as bad, but they also seem not to be well tied to what is actually happening.

Myth 8. Our leaders are all knowing and all powerful.

We are fighting a battle against the laws of physics. Expecting our leaders to win in the battle against the laws of physics is expecting a huge amount. Some of the actions of our leaders seem extraordinarily stupid. For example, if falling interest rates have postponed peak oil, then proposing to raise interest rates, when we have not fixed the underlying oil depletion problem, seems very ill-advised.

It is the Laws of Physics that govern the world economy. The Laws of Physics affect the world economy in many ways. The economy is a dissipative structure. Energy inputs allow the economy to remain in an “out of equilibrium state” (that is, in a growing state), for a very long period.

Eventually the ability of any economy to grow must come to an end. The problem is that it requires increasing amounts of energy to fight the growing “entropy” (higher energy cost of extraction, need for growing debt, and rising pollution levels) of the system. The economy must come to an end, just as the lives of individual plants and animals (which are also dissipative structures) must come to an end.

Conclusion

We are facing a battle against the laws of physics which we are unlikely to win. Our leaders would like us to think that it can be won quite easily, but it cannot be.  Climate change is presented as our only and most important problem, but this is not really the case. Our problem is that the financial system and energy systems are tightly connected. We are likely to have serious financial problems as we hit limits of many kinds, at more or less the same time.

Our leaders are not really as powerful as we would like. Even our scientific findings practically never come in perfect form. Our knowledge generally comes in a series of steps, which includes revisions to early ideas. At this time, it doesn’t look as though we have figured out a way to work around our rising need for energy and the problem with rising entropy.

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,605 Responses to Why political correctness fails – Why what we know ‘for sure’ is wrong (Ex Religion)

    • Davidin100millionbilliontrillionzillionyears says:

      speaking of “the cars” and “driving”…

      https://www.bloomberg.com/news/articles/2017-10-02/puerto-rico-s-very-american-love-of-cars-is-jamming-its-recovery

      the whole island seems to depend greatly on cars.

      • Davidin100millionbilliontrillionzillionyears says:

        below is a picture of that Gina Rinehart.

        now, I want to avoid fat shaming here, but I do see an obvious question.

        would bigger/heavier persons have a survival advantage in The Collapse?

        I mean, they would be able to survive longer without food.

        anyone know the data for this, like how many extra days they could survive without food?

        and this begs the question:

        should persons gain a lot of weight if they are convinced that The Collapse is imminent?

        • DJ says:

          “should persons gain a lot of weight if they are convinced that The Collapse is imminent?”
          Depends on if you believe running or walking is part of surviving the hordes (or being part of the horde).

        • name says:

          “anyone know the data for this, like how many extra days they could survive without food?”

          1 kg of fat is 7000 kcal, so about 3 days worth of energy, but human body can’t burn fat as fast as it uses energy. Fat can provide about half the energy needed by human. So if you have 10 kilos extra, then you can eat half of your energetic needs for 2 months.

          • xabier says:

            So, a slim advantage in times of famine.

          • Tim Groves says:

            How about possessing a “thrifty” gene? In times of famine, Samoans will thrive while the rest of us struggle to survive.

            The thrifty gene hypothesis, or Gianfranco’s hypothesis[citation needed] is an attempt by geneticist James V. Neel to explain why certain populations and subpopulations in the modern day are prone to diabetes mellitus type 2. He proposed the hypothesis in 1962 to resolve a fundamental problem: diabetes is clearly a very harmful medical condition, yet it is quite common, and it was already evident to Neel that it likely had a strong genetic basis. The problem is to understand how disease with a likely genetic component and with such negative effects may have been favoured by the process of natural selection. Neel suggested the resolution to this problem is that genes which predispose to diabetes (called ‘thrifty genes’) were historically advantageous, but they became detrimental in the modern world. In his words they were “rendered detrimental by ‘progress'”. Neel’s primary interest was in diabetes, but the idea was soon expanded to encompass obesity as well. Thrifty genes are genes which enable individuals to efficiently collect and process food to deposit fat during periods of food abundance in order to provide for periods of food shortage (feast and famine).
            According to the hypothesis, the ‘thrifty’ genotype would have been advantageous for hunter-gatherer populations, especially child-bearing women, because it would allow them to fatten more quickly during times of abundance. Fatter individuals carrying the thrifty genes would thus better survive times of food scarcity. However, in modern societies with a constant abundance of food, this genotype efficiently prepares individuals for a famine that never comes. The result of this mismatch between the environment in which the brain evolved and the environment of today is widespread chronic obesity and related health problems like diabetes.
            The hypothesis has received various criticisms and several modified or alternative hypotheses have been proposed.

        • theblondbeast says:

          Alice Friedman had a good review of a book on N Korean famine survivors on her site. First the children, then the elderly, then men who have low body fat and are athletic (high metabolism). Good study on her site of Cuba and N Korea after the oil stopped: http://energyskeptic.com/2014/book-review-of-nothing-to-envy-ordinary-lives-in-north-korea/

          • Mark says:

            Thanks for the link, good discussion

          • One thing that surprises me is that UN population estimates show North Korea’s population increasing during the entire period that Alice writes about. According to the UN, there was a decline in population in the period 1950 to 1955, but not since then. I suppose the UN could be wrong.

            In fact, between 1990 and 2015, Cuba’s population increased by 8% while North Korea’s increased by 24%. Cuba held down population by building a limited number of homes, among other things. (That was my impression, visiting there.) I think that population control was a major piece of Cuba’s success story. One reason that North Korea is having so much trouble feeding itself is its ever-rising population.

            Haiti is another country with a huge population explosion. Haiti’s population increased by 51% between 1990 and 2015, based on UN data. In fact, its population was rising rapidly before 1990 as well. No wonder Haiti has trouble feeding itself!

            • theblondbeast says:

              That’s a surprising point. Seems like population control is something we’ve never managed to accomplish well, or barely even talk about. My guess with the NK famines is that it went up and down wildly with the various famine years – perhaps still showing the upward trend despite downward years.

            • The whole world is on an upward population trend.

              Even when Europe has recently managed to keep its own population fairly level, it decided to import young people from elsewhere, so that in total population would rise, and someone could support the old people.

              Each time there is a crisis, refugees move to a new country, to alleviate local population pressures and to allow world population to continue to rise.

              No one wants to talk about the population issue. It is much more pleasant to think nice thoughts about wind and solar.

  1. Rob Bell says:

    “Billionaire Gina Rinehart”, The richest woman on earth just said:

    “Western Labor costs are too high. Thanks to global capital movements and free trade, Globalization is so amazing. Learn to work for African wages if you want a job.”

    • And think of all of the goods you will be able to buy in the world market at African wages!

      • xabier says:

        A British politician (personally rich) went even further:

        ‘Even if you are low-paid, you will have the dignity of work!

        He also recommended that the Brits ‘learn to be like the Chinese.’

        All deeply insulting to those whose families once worked in the mines and factories now closed) for long hours and not much pay. 🙂

        • A Real Black Person says:

          THE THREAT OF THE RESET

          Back on the days when I followed mainstream economics, I thought the transition to lower wages would be a matter of psychological adjustment but after becoming a regular reader here, I realized that the transition to lower wages would require defaults on almost all U.S. debt, and that the global financial system would be able to survive all these defaults.

          In Australia’s case, perhaps the global economy can afford to lose all the money it has invested in Australia and that a “Reset” can occur there.

          • ejhr2015 says:

            RBP, Australia can pay any debt it has simply by the government writing a cheque to cover it. If it’s not in our dollars then the other currency can be bought in the spot market as needed. All pretty straight forward.

          • A Real Black Person says:

            * the global financial system would have to be able to survive all these defaults

            • ejhr2015 says:

              Yes indeed. Good thing it’s all fiat. Maybe a mass debt Jubilee will be the way to go. David Graeber in his book “Debt, the first 5000 years” recommends one as a last resort. Steve Keen also thinks we will need one although in his version the banks get reimbursed.

          • Everything is very interconnected. It is not possible for anything very large to default, without repercussions around the world. Also, the same issues that cause problems in Australia are likely to cause problems in other countries that are somewhat similar, for example South Africa (thinking of a resource exporter).

      • Greg Machala says:

        It is incredible how oblivious the “elate” seem to be. They do not realize that their position is supported only by the ability of others to purchase the goods that are made by economies of scale. Once economies of scale disappear due to lack of affordability, the luxury life so many are accustomed to will also disappear.

    • Tim Groves says:

      Gina’s helping keeping BAU up and running in all sorts of ways. For instance, in 2016 she agreed to invest in a phosphate mine in Yorkshire that will help sustain the world’s unsustainable agricultural system a bit longer.

      Sirius Minerals, which hopes to open a fertiliser mine under the North York Moors, has landed a $300m (£245m) investment from Hancock Prospecting, the company controlled by Australian mining billionaire Gina Rinehart.

      The deal is a major boost for Sirius, which is looking to raise $1.1bn for the first stage of building its polyhalite mine, which has a potential life span of 100 years and could produce 20 million tonnes a year. Polyhalite is a form of potash that can be used as a fertiliser.

      Under the deal, Hancock will pay $250m for a 5pc royalty on the first 13 million tonnes of polyhalite shipped, and 1pc thereafter. It will also buy $50m in Sirius shares – though it has not said at what price it will acquire the equity….

      …The construction would involve sinking a shaft to a depth of 1,500m, while a 23-mile underground tunnel would transport the polyhalite via conveyor belt for processing on Teeside.

      http://www.telegraph.co.uk/business/2016/10/25/north-yorks-miner-sirius-minerals-bags-investment-from-australia/

    • grayfox says:

      Only when the last tree has died and the last river has been poisoned and the last fish has been caught will we realise that we can not eat money.
      Chief Seattle

      • Joel says:

        Black Elk (1863–1950); medicine man, Oglala Lakota:
        “I did not know then how much was ended. When I look back now from this high hill of my old age, I can still see the butchered women and children lying heaped and scattered all along the crooked gulch as plain as when I saw them with eyes young. And I can see that something else died there in the bloody mud, and was buried in the blizzard. A people’s dream died there. It was a beautiful dream … the nation’s hoop is broken and scattered. There is no center any longer, and the sacred tree is dead.”

        In the years leading up to the conflict, the U.S. government had continued to seize Lakota lands. The once-large bison herds (an indigenous peoples’ Great Plains staple) had been hunted to near-extinction by European settlers. Treaty promises to protect reservation lands from encroachment by settlers and gold miners were not implemented as agreed.
        https://en.wikipedia.org/wiki/Wounded_Knee_Massacre

      • Ann says:

        Snopes.com

        “Rather than issuing from the very real Chief Seattle in 1854, those moving words were written by a screenwriter in 1971.”

        http://www.snopes.com/quotes/seattle.asp

        • grayfox says:

          Only when the last tree has died and the last river has been poisoned and the last fish has been caught will we realise that we can not eat money.
          Ted Perry, scriptwriter

    • J. H. Wyoming says:

      Me thinks the Super Wealthy are getting cocky!

      • And showing their true colors. The super wealth will simply drive everyone else from where they live, and claim all the wealth for themselves.

        And there is no karma, as proven by Greg Clark who showed social darwinism was real by showing how those with property (the aristocrat was too few enough to matter) had more children, driving out the children of poor from competition – and existence.

      • Greg Machala says:

        Yes the “Super Wealthy” that have no critical thinking skills are certainly getting cocky. They do not realize that everything they have is dependent on economies of scale. And economies of scale only work if you have millions buying the output of the economy.

    • adonis says:

      Then the kings of the earth, the important people, the generals, the rich, the powerful, and all the slaves and free people hid themselves in caves and among the rocks in the mountains. 16They said to the mountains and rocks, “Fall on us, and hide us from the face of the one who sits on the throne and from the anger of the lamb, 17because the frightening day of their anger has come, and who is able to endure it?” it wont matter who you are the 1% ‘ s or the 99%’s when BAU ends you will certainly see if you are able to endure it I’m pretty sure people like Gina won’t last long that’s if she can escape the lynch mob that will form once BAU ends and will be looking for someone to blame who better than the 1% ‘s.

      • jazIntico says:

        “that’s if she can escape the lynch mob”

        Yes, SCHADENFREUDE to that! I’d laugh at her downfall and gloat like a goat. “Hubris” is the correct word for her behaviour.

    • She is right. That is how most of the world will be paid.

      And, the world worked quite well back in 1913, when only 4% of everyone held maybe 90% of the world’s assets.

    • Fast Eddy says:

      Said the bloated pig (6 years ago) who inherited every penny she has from daddy.

      It will be a good day when this pig is squatting below an overpass eating boiled rat.

  2. Rob Bell says:

    Oh we have to militarize our local police departments now. Look what happened in Vegas will be the excuse.

  3. JT Roberts says:

    Wow full crazy here now. City of confusion. Look it up.

    BTW here you go FE https://weather.com/storms/winter/news/rockies-snow-montana-colorado-wyoming-early-october-2017

    Put in your anti box.

    • The Second Coming says:

      Wow, the devil is the details…
      A new study, to be published in the journal Bulletin of the American Meteorological Society, found that a weakening polar vortex, potentially set in motion by the rapidly warming and melting Arctic, has become more common during the past four decades. This results in colder winters across large regions of Europe and Russia, but also occasionally in the U.S. as well.

      The study is the first to show that changes in winds in the stratosphere substantially contributed to a mysterious winter cooling trend in northern Europe and Asia, including a region already known for being frigid: Siberia.

      • Fast Eddy says:

        First we had Glllloballll Waaaaarming…… but when that did not pan out we had Kkkkkklimateee CCChhhhaaannge… you know like when in some places it gets warmer and some places it gets colder… as it always has…

        And now after 20 years of no wwwwwwarrming …. it looks like things are actually going to get colder…..

        So …. the next tag line will be….

        GGGGGlooooballll Cooooollling…..

        You really couldn’t make this up if you wanted to…. what a joke

      • J. H. Wyoming says:

        True enough second coming, but if you use the term ‘cooling trend’ to a denialist they will miss the part where warmer air is also going into the Arctic. It’s too nuanced for them to understand its not just a warmer or cooler all the time, everywhere, type of situation.

        A denialist is a mammal but is missing or unconnected to the 3rd brain layer most people take for granted, so you have to coddle them like you would a billy goat banging its head against a brick wall. “It’s gonna be all right. We understand – there, there now.”

        • Fast Eddy says:

          This really is Twilight Zone material….

        • jazIntico says:

          Gail did an ex-religion version of this post. Maybe she should do an ex-gloebbels warmongering version too.

          • I sort of agree, if it weren’t too confusing.

            Climate change does seem to be the new proposed religion, intended to take the place Christianity and other religions. It is not really correct to take out the discussion of religion and leave in the climate discussion. There are a huge number of people who believe that climate change is occurring because of a moral failing on our part. All we have to so do is subsidize renewables, and our problem will be solved. This is, of course, utter and complete nonsense.

            • Fast Eddy says:

              ++++++++++++++++

            • JT Roberts says:

              No offense Gail but I could use the very same argument you just used against this very sight. Would you agree that noise isn’t relevant? There are as many counter argument over peak energy as there are for it. However willful ignorance allow some to remain blind to the reality. The same is true with KLIMATE.

              From a purely objective view human activity has exponentially increased the use of energy which all ends up as heat, and has to be either radiated off the planet or absorbed by it. So it would be the height of ignorance to believe that the change in one constant will have no effect on the others. Either the heat is being radiated at ever faster rates or the planet will warm. So what are the mechanisms? Dissipative systems? Thermal sinks?

              So is religion involve? Yes it is. Because Religion is a system of belief it can either be objective and rational, or emotional and irrational. Considering that Religion has been and still is the cause of all the wars that have ever been waged. ( remember nationalism is religious it is a regional cult ). Then I would say emotional irrational thinking is prevailing on both sides of KLIMATE debate.

              A few stupid Music Videos will make everyone feel better. Or maybe some suffering dog pics. That’s rational for sure.

            • “Considering that Religion has been and still is the cause of all the wars that have ever been waged.”

              I think that the quest for more cheap-to-exploit energy supplies has been the underlying cause of all of the wars that have ever been waged. This situation often arises when population has risen beyond the carrying capacity of land. Or, in the case of World War I, when coal which is easy to extract and cheap to transport starts declining in availability becomes a problem. World War II was a petroleum based war.

              Political leaders have to have an acceptable reason to “sell” to the members of their group. Religious reasons are often the tool that is used to sell the need for invasion. In some recent years, we have supposedly had a need to spread democracy (a different religion than what is being pushed today). So religion becomes a tool of politicians. Given that church and state have been very close together historically, this is very easy to do.

              There is a need to keep the population of any plant or animal from becoming too high, relative to the biological resources in an area. In fact, in the biological world, there is the idea of many species being territorial. Typically, the male member of the species marks off a very wide territory for himself and his “clan.” This territory is sufficient large that the amount of prey is far more than sufficient for the clan. There will be no problem with overusing renewable resources, if the clan is left to the territory. To some extent, I think that different religions serve this purpose as well. We think we are different from animals, but some mechanisms have been put in place that are hard for us to overcome.

            • Fast Eddy says:

              I agree… religion is not the cause …. wars are fought over resources…

              Religion – and Nationalism — are tools to rally the troops….

            • Fast Eddy says:

              Either the heat is being radiated at ever faster rates or the planet will warm. So what are the mechanisms? Dissipative systems? Thermal sinks?

              None of the above … it seems…..

              NASA satellite data from the years 2000 through 2011 show the Earth’s atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing.

              The study indicates far less future gl obal warm ing will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dio xide trap far less heat than alarmists have claimed.

              http://www.mdpi.com/2072-4292/3/8/1603

        • Tim Groves says:

          A denialist is a description of a normal person applied as a pejorative by a political or religious zealot or fanatic. I welcome the use of the label as it’s usually a good indication that the person doing the labeling has a very poor sense of proportion about the matter at hand.

          One man’s nuance is another man’s incoherence. And the subtle explanations of warmistas for why each and every change of weather supports their claim that the world is warming due to our sins do often come across as causistry, evangelism, snake oil sales talk or special pleading to those of us whose gullibility and credulity quotients are low. True believers are so very trusting, don’t you find? They have an unshakeable faith in their authorities. I would expect true believers in warmista propaganda to also be more likely than skeptics to fall for cold calling scams and internet phishing emails, wouldn’t you?

          http://images.dailykos.com/images/219141/story_image/834457.png?1457109976

          • Fast Eddy says:

            I prefer the term rejectionist… as in I reject the MSM propaganda and lies about Gggggwwwww…. I reject morronism….

    • Fast Eddy says:

      OH right … when things did not get war… mer …. the Don Draper changed the tag line to kkklimate Ccchange….

      Nicely done Don!

      Btw – I do believe a snow storm is a weather related event….

      • Fast Eddy says:

        And meanwhile everywhere else in America the weather (or Klimate as some call it) was ‘normal’ for this time of year….

        Therefore this is evidence that kkkklimate cccchange is a hoax.

        Logic… can be a real bitch

        • Ummm… that’s not ‘logic’. That’s a logical fallacy called inference-observation confusion. Time you studied up on logical strategies as your ritual claim to using it while doing such a bad job of implementing it is making you look foolish.

          • Fast Eddy says:

            It’s certainly better logic than that behind the statement ‘it snowed in October somewhere therefore man is wrecking the kkkklimate by burning fossssil fuels’

            In fact … I see zero logic to that statement. There is absolutely 0 proof that such an event is an indication of anything — other than that it snowed in October —- there certainly is no proof that our burning of coal and oil caused it to snow in October.

            But then if one gets one’s logic from reading the MSM… this is all very understandable

  4. Rob Bell says:

    Won’t someone please think of the poor business owner???… 😦

  5. Joe Bloggs says:

    Here is a poem I found about Gina Rinehart from a an article called “ecosqueak”
    No one is meaner
    Than corpulent Gina
    Who won’t hesitate at all to sue
    Non-entities like me and you
    To tighten Rinehart’s corporate reign.

    Saviour of Fairfax
    Much better than anthrax
    Her good intent let’s not deny
    She’ll make us think that pigs may fly!
    (In truth, she gets around by plane)

    • Fast Eddy says:

      I wish only bad things happen to Gina…. she deserves a bit of suffering in her life

      • She will never suffer, and her dynasty, like that of Rockefeller or Kidman (Nicole Kidman’s family owns a lot of land in Australia), her clan will do well for a long, long time.

      • I don’t think it is good for anyone’s mental state to wish suffering on anyone else.

        We need to be building a thought process that we can live with. It needs a lot more positives than negatives. We need to stay away from the Gina Rineharts of the world.

        It seems like the fact that a lot of people wish harm on other people that leads to a few crazy people acting out on some of those thoughts. Or governments (like North Korea) acting out on those thoughts to get attention.

        • Fast Eddy says:

          Is it ok to say that one hopes she spends her fortune on medicine?

          That’s what my buddy The Big Man would say (RIP Big Man….)

    • Tim Groves says:

      Gina is a globular globalist who understands she has to GROW or DIE.
      So she’s living LARGE and burning more coal.
      What more can we ask of her?

  6. Fast Eddy says:

    And here’s something from cra..zy steve…

    Why Precious Metals Are The Better LONG-TERM Store Of Value Over Bitcoin
    https://srsroccoreport.com/why-precious-metals-are-the-better-long-term-store-of-value-over-bitcoin/

    • Davidin100millionbilliontrillionzillionyears says:

      but Bitcoin is back up to $4,300 today!

      and, by the way…

      Bitcoin is essentially a precious metal…

      after all…

      all coins are made out of metal…

      Bitcoins are made of Hopium.

      everybody knows that.

  7. J. H. Wyoming says:

    https://wolfstreet.com/2017/10/02/an-accountant-smells-a-rat-in-our-global-credit-bubble/

    ‘An Accountant Smells a Rat in Our Global Credit Bubble’

    “We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland.

    A report by the International Institute of Finance released in June estimated that global government, business and personal debts totaled $217 trillion earlier this year. That’s more than three times (327%) higher than global economic output.

    Noland’s warnings come during a time of exceptional public trust in governments, central banks, regulators and other institutions. Market volatility is trending at near record lows. In June, Federal Reserve Chair Janet Yellen spoke for many when she said that she did not see a financial crisis occurring “in our lifetimes.”

    Got a problem? Finance it!

    • xabier says:

      Entertaining headline in the Guardian, to this effect: ‘UK govt. warned of danger in using consumer credit to fuel growth’.

      Well, yes, but at this stage,what is left?

      George Monbiot also advises readers that with artificial meat now perfected, there is ‘no argument’ in favour of having real food animals.

      Now, George, let me explain a few things about physical reality on this planet for species like us……

      Oh, and lead story is that renewable power is just storming ahead (not a turbine pun). 🙂

      • xabier says:

        Ah, I see it now! How clever and far-sighted of George! Of course we don’t need to keep food animals: we’ll just have to get very good indeed at catching those FE rats…..

    • Early “peakers” had it simply wrong.
      Saying on this forum for years that the trend of ~300->600% debts to GDP and beyond are the new normal.. Impossible to say when and why it might eventually start to matter again, at 5000% ? Most likely only at crossing some serious physical threshold or some power factions moving on the chessboards, and there is no hurry apparently. Russia (China) alliance scored some little points recently, winning Turkey, Syria, partly new regimes in Iraq-Iran (possibly +Qatar), Libya, Egypt, offloading imploded Ukraine onto EU-US etc. But that’s just very first wave of skirmishes of decades long war effort over the scraps of energy, pipelines, vassal status (reserve currency system) etc..

  8. Fast Eddy says:

    Attention Doomsday Preppers!!!!

    Attention Attention Attention

    Watch this:

    The Twilight Zone -The Shelter

    Then play a mind game — swap out the shelter for a small organic farm….

    You won’t be able to slam the door in the face of your desperate neighbours – and others who show up demanding food when BAU ends….

    • The Second Coming says:

      Perhaps…..
      , Oct. 4 (CNA) A 42-year-old unemployed woman was recently found dead, apparently of starvation, in an apartment in Tainan after her mother — her main source of financial support — died in June and her younger sister refused to support her, according to police.
      The woman, surnamed Hsieh, who was once a fashion designer, lost her job about 10 years ago and became financially dependent on her mother, who worked as a domestic helper, according to a Sept. 30 Apple Daily report.
      Hsieh was found dead by police when they tracked her to her home to arrest her for failing to appear in court after she got caught shoplifting in late July and early August, according to the report.
      When police reached her home on the sixth floor of an old apartment building, they broke in and found Hsieh, dead and reduced to an emaciated state.
      When questioned by police, Hsieh’s sister, who lives on the fifth floor of the same building and showed indifference toward her death, said that Hsieh might have died of starvation.
      An autopsy will be carried out later this week to determine the cause of death and an investigation will be conducted to find out whether Hsieh’s sister committed the crime of abandonment, according to the report.
      The Hsieh sisters lived with their mother in an apartment, with the elder Hsieh living in a rooftop addition, police said.
      Earlier this year, their mother quit her job due to illness and the younger Hsieh, 40, became the breadwinner of the family. However, after their mother died in June, the elder sister began showing strange behavior, shunning contact with others.
      The younger Hsieh, who makes a living doing odd jobs, also lost her jobs recently and said she had encouraged her sister to receive medical treatment, advice that was rejected.
      She said she decided to leave her alone after repeatedly offering her advice to no effect.

      http://focustaiwan.tw/news/asoc/201710040005.aspx

      So, stop already with the constant repeat.

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