It is easy for those of us in the West to overlook how important China has become to the world economy, and also the limits it is reaching. The two big areas in which China seems to be reaching limits are energy production and debt. Reaching either of these limits could eventually cause a collapse.
China is reaching energy production limits in a way few would have imagined. As long as coal and oil prices were rising, it made sense to keep drilling. Once fuel prices started dropping in 2014, it made sense to close unprofitable coal mines and oil wells. The thing that is striking is that the drop in prices corresponds to a slowdown in the wage growth of Chinese urban workers. Perhaps rapidly rising Chinese wages have been playing a significant role in maintaining high world “demand” (and thus prices) for energy products. Low Chinese wage growth thus seems to depress energy prices.
(Shown as Figure 5, below). China’s percentage growth in average urban wages. Values for 1999 based on China Statistical Yearbook data regarding the number of urban workers and their total wages. The percentage increase for 2016 was based on a Bloomberg Survey.
The debt situation has arisen because feedback loops in China are quite different from in the US. The economic system is set up in a way that tends to push the economy toward ever more growth in apartment buildings, energy installations, and factories. Feedbacks do indeed come from the centrally planned government, but they are not as immediate as feedbacks in the Western economic system. Thus, there is a tendency for a bubble of over-investment to grow. This bubble could collapse if interest rates rise, or if China reins in growing debt.
China’s Oversized Influence in the World
China plays an oversized role in the world’s economy. It is the world’s largest energy consumer, and the world’s largest energy producer. Recently, it has become the world’s largest importer of both oil and of coal.
In some sense, China is the world’s largest economy. Usually we see China referred to as the world’s second largest economy, based on GDP converted to US dollars. Economists use an approach called GDP (PPP) (where PPP is Purchasing Power Parity) when computing world GDP growth. When this approach is used, China is the world’s largest economy. The United States is second largest, and India is third.
Figure 1. World’s largest economies, based on energy consumption and GDP based on Purchasing Power Parity. Energy Consumption is from BP Statistical Review of World Energy, 2017; GDP on PPP Basis is from the World Bank.
Besides being (in some sense) the world’s largest economy, China is also a country with a very significant amount of debt. The government of China has traditionally somewhat guaranteed the debt of Chinese debtors. There is even a practice of businesses guaranteeing each other’s debt. Thus, it is hard to compare China’s debt to the debt level elsewhere. Some analyses suggest that its debt level is extraordinarily high.
How China’s Growth Spurt Started
Figure 2. China’s energy consumption, based on data from BP Statistical Review of World Energy, 2017.
From Figure 2, it is clear that something very dramatic happened to China’s coal consumption about 2002. China joined the World Trade Organization in December 2001, and immediately afterward, its coal consumption soared.
Countries in the OECD, whether they had signed the 1997 Kyoto Protocol or not, suddenly became interested in reducing their own greenhouse gas emissions. If they could outsource manufacturing to China, they would be able to reduce their reported CO2 emissions.
Besides reducing reported CO2 emissions, outsourcing manufacturing to China had two other benefits:
- The goods being manufactured in China would be cheaper, allowing Americans, Europeans, and Japanese to buy more goods. If more “stuff” makes people happy, citizens should be happier.
- Businesses would suddenly have a new market in China. Perhaps the people of China would start buying goods made elsewhere.
Of course, a major downside of moving jobs to China and other Asian nations was the likelihood of fewer jobs elsewhere.
Figure 3. US Labor Force Participation Rate, as prepared by Federal Reserve Bank of St. Louis.
In the early 2000s, when China started competing actively for jobs, the share of people in the US workforce started shrinking. The drop-off in labor force participation did not level out until mid-2014. This is about when world oil prices began to fall, and, as we will see in the next section, when China’s growth in average wages began to fall.
Another downside to moving jobs to China was more CO2 emissions on a worldwide basis, even if emissions remained somewhat lower locally. CO2 emissions on imported goods were not “counted against” a country in its CO2 calculations.
Figure 4. World carbon dioxide emissions, split between China and Rest of the World, based on BP Statistical Review of World Energy, 2017.
At some point, we should not be surprised if countries elsewhere start pushing back against the globalization that allowed China’s rapid growth. In some sense, China has lived in an artificial growth bubble for many years. When this artificial growth bubble ends, it will be much harder for China’s debtors to repay debt with interest.
China’s Rapid Wage Growth Stopped in 2014
Rising wages are important for making China’s growth possible. With rising wages, workers can increasingly afford the apartments that are being built for them. They can also increasingly afford consumer goods of many kinds, and they can easily repay debts taken out earlier. The catch, however, is that wage growth cannot get ahead of productivity growth, or the price of goods will become too expensive on the world market. If this happens, China will have difficulty selling its goods to others.
China’s wage growth seems to have slowed remarkably, starting in 2014.
Figure 5. China’s percent growth in average urban wages. Values for 1999 based on China Statistical Yearbook data regarding the number of urban workers and their total wages. The percentage increase for 2016 was estimated based on a Bloomberg Survey.
This is when China discovered that its high wage increases were making it uncompetitive with the outside world. Wage growth needed to be reined in. Its growth in productivity was no longer sufficient to support such large wage increases.
China’s Growth in Energy Consumption Also Slowed About 2014
If we look at the annual growth in total energy consumption and electricity consumption, we see that by 2014 to 2016, their growth had slowed remarkably (Figure 6). Their growth pattern was starting to resemble the slow growth pattern of much of the rest of the world. Energy growth allows an economy to increasingly leverage the labor of its workforce with more energy-powered “tools.” With low energy growth, it should not be surprising if productivity growth lags. With low productivity growth, we can expect low wage growth.
Figure 6. China’s growth in consumption of total energy and of electricity based on data from BP Statistical Review of World Energy, 2017.
It is possible that the increased rate of electricity consumption in 2016 is related to China’s program of housing migrant workers in unsalable apartments that took place at that time. The fact that these apartments were otherwise unsalable was no doubt influenced by the slowing growth in wages.
This decrease in energy consumption most likely occurred because the price of China’s energy mix was becoming increasingly expensive. For one thing, the mix included a growing share of oil, and oil was expensive. The proportion of coal in the mix was falling, and the replacements were more expensive than coal. There was also the issue of the general increase in fossil fuel prices.
Lower Wage Growth in China Likely Affected Fossil Fuel Prices
Affordability is the big issue with respect to how high fossil fuel prices can rise. The issue is not just buying the oil or coal or natural gas itself; it is also being able to afford the goods made with these fuels, such as food, clothing, appliances, and apartments. If wages were depressed in the developed countries because of moving production to China, then rising wages in China (and other similar countries, such as India and the Philippines) must somehow offset this problem, if fossil fuel prices are to remain high enough for extraction to continue.
Figures 7 and 8 (below) show that oil, natural gas, and coal prices all started to slide, right about the time China’s urban wages growth began shrinking (shown in Figure 5).
Figure 7. Oil and natural gas prices, based on BP Statistical Review of World Energy data.
Figure 8. Coal prices between 2000 and 2016 from BP Statistical Review of World Energy. Chinese coal is China Qinhuangdao spot price and Japanese coal is Japan Steam import cif price, both per ton.
The lower recent increases made China’s urban wage growth look more like that of the US and Europe. Thus, in 2014 and later, Chinese urban wages present much less of a “push” on the growth of the world economy than they had previously. Without this push of rising wages, it becomes much harder for the world economy to grow very rapidly, and for it to have a very high inflation rate. There is simply not enough buying power to push prices very high.
It might be noted that the average Chinese urban wage increases shown previously in Figure 5 are not inflation adjusted. Thus, in some sense, they include whatever margin is available for inflation in prices as well as the margin that is available for a greater quantity of purchased goods. Because of this, these low wage increases may help explain the recent lack of inflation in much of the world.
Quite likely, there are other issues besides China’s urban wage growth affecting world (and local) energy prices, but this factor is probably more important than most people would expect.
Can low prices bring about “Peak Coal” and “Peak Oil”?
What does a producer do in response to suddenly lower market prices–prices that are too low to encourage more production?
This seems to vary, depending on the situation. In the case of coal production in China, a decision was made to close many of the coal plants that had suddenly become unprofitable, thanks to lower coal prices. No doubt pollution being caused by these plants entered into this decision, as well. So did the availability of other coal elsewhere (but probably at higher prices), if it is ever needed. The result of this voluntary closure of coal plants in response to low prices caused the drop in coal production shown in Figure 8, below.
Figure 8. China’s energy production, based on data from BP Statistical Review of World Energy, 2017.
It is my belief that this is precisely the way we should expect peak coal (or peak oil or peak natural gas) to take place. The issue is not that we “run out” of any of these fuels. It is that the coal mines and oil and gas wells become unprofitable because wages do not rise sufficiently to cover the fossil fuels’ higher cost of extraction.
We should note that China has also cut back on its oil production, in response to low prices. EIA data shows that China’s 2016 oil production dropped about 6.9% compared to 2015. The first seven months of 2017 seems to have dropped by another 4.2%. So China’s oil is also showing what we would consider to be a “peak oil” response. The price is too low to make production profitable, so it has decided that it is more cost-effective to import oil from elsewhere.
In the real world, this is the way energy limits are reached, as far as we can see. Economists have not figured out how the system works. They somehow believe that energy prices can rise ever higher, even if wages do not. The mismatch between prices and wages can be covered for a while by more government spending and by more debt, but eventually, energy prices must fall below the cost of production, at least for some producers. These producers voluntarily give up production; this is what causes “Peak Oil” or “Peak Coal” or “Peak Natural Gas.”
Why China’s Debt System Reaches Limits Differently Than Those in the West
Let me give you my understanding regarding how the Chinese system works. Basically, the system is gradually moving from (1) a system in which the government owns all land and most businesses to (2) a system with considerable individual ownership.
Back in the days when the government owned most businesses and all land, farmers farmed the land to which they were assigned. Businesses often provided housing as part of an individual’s “pay package.” These homes typically had a shared outhouse for a bathroom facility. They may or may not have had electricity. There was relatively little debt to the system, because there was little individual ownership.
In recent years, especially after joining the World Trade Organization in 2001, there has been a shift to more businesses of the types operated in the West, and to more individual home ownership, with mortgages.
The economy acts rather differently than in the West. While the economy is centrally planned in Beijing, quite a bit of the details are left to individual local governments. Local heads of state make decisions that seem to be best based on the issues they are facing. These may or may not match up with what Beijing central planning intended.
Historically, Five-Year Plans have provided GDP growth targets to the various lower-level heads of state. The pay and promotions of these local leaders have depended on their ability to meet (or exceed) their GDP goals. These goals did not have any debt limits attached, so local leaders could choose to use as much debt as they wanted.
A major consideration of these local leaders was that they also had responsibility for jobs for people in their area. This responsibility further pushed them to aim high in the amount of development they sought.
Another related issue is that sales of formerly agricultural land for apartments and other development are a major source of revenue for local governments. Local leaders did not generally have enough tax revenue for programs, without supplementing their tax revenue with funds obtained from selling land for development. This further pushed local leaders to add development, whether it was really needed or not.
The very great power of local heads of state and their administrators made these leaders tempting targets for bribery. Entrepreneur had a chance of getting projects approved for development, with a bribe to the right person. There has been a recent drive to eliminate this practice.
We have often heard the comment, “A rising tide raises all boats.” When the West decided to discourage local industrialization because of CO2 concerns, it gave a huge push to China’s economy. Almost any project could be successful. In such an environment, local rating agencies could be very generous in their ratings of proposed new bond offerings, because practically any project would be likely to succeed.
Furthermore, without many private businesses, there was little history of past defaults. What little experience was available suggested the possibility of few future defaults. Wages had been rising very rapidly, making individual loans easy to repay. What could go wrong?
With the central government perceived to be in control, it seemed to make sense for one governmental organization to guarantee the loans of other governmental organizations. Businesses often guaranteed the loans of other businesses as well.
Why the Chinese System Errs in the Direction of Overdevelopment
In the model of development we are used to in the West, there are feedback loops if too much of anything is built–apartment buildings (sold as condominiums), coal mines, electricity generating capacity, solar panels, steel mills, or whatever else.
In China, these feedback loops don’t work nearly as well. Instead of the financial system automatically “damping out” the overcapacity, the state (or perhaps a corrupt public official) figures out some way around what seems to be a temporary problem. To understand how the situation is different, let’s look at three examples:
Apartments. China has had a well-publicized problem of building way too many apartments. In about 2016, this problem seems to have been mostly fixed by local governments providing subsidies to migrant workers so that they can afford to buy homes. Of course, where the local governments get this money, and for how long they can afford to pay these stipends, are open questions. It is also not clear that this arrangement is leading to a much-reduced supply of new homes, because cities need both the revenue from land sales and the jobs resulting from building more units.
Figure 9 shows one view of the annual increase in Chinese house prices, despite the oversupply problem. If this graph is correct, prices have increased remarkably in 2017, suggesting some type of stimulus has been involved this year to keep the property bubble growing. The size of an apartment a typical worker can now afford is very small, so this endless price run-up must end somewhere.
Figure 9. Chinese house price graph from GlobalPropertyGuide.com.
Coal-Fired Power Plants. With all of the problems that China has with pollution, a person might expect that China would stop building coal-fired power plants. Instead, the solution of local governments has been to build additional power plants that are more efficient and less polluting. The result is significant overcapacity, in total.
A May 2017 article says that because of this overcapacity problem, Beijing is forcing every coal-fired power plant to run at the same utilization rate, which is approximately 47.7 % of total capacity. A Bloomberg New Energy Finance article estimates that at year-end 2016, the “national power oversupply” was 35%, considering all types of generation together. (This is likely an overestimate; the authors did not consider the flexibility of generation.)
Beijing is aware of the overcapacity problem, and is cancelling or delaying a considerable share of coal-fired capacity that is in the pipeline. The plan is to limit total coal-fired capacity to 1,100 gigawatts in 2020. China’s current coal-fired generating capacity seems to be 943 gigawatts, suggesting that as much as a 16% increase could still be added by 2020, even with planned cutbacks.
It is not clear what happens to the loans associated with all of the capacity that has been cancelled or delayed. Do these loans default? If “normal” feedbacks of lower prices had been allowed to play out, it is doubtful that such a large amount of overcapacity would have been added.
If China’s overall growth rate slows to a level more similar to that of other economies, it will have a huge amount of generation that it doesn’t need. This adds a very large debt risk, it would seem.
Wind and Solar. If we believe Darien Ma, author of “The Answer, Comrade, Is Not Blowing in the Wind,” there is less to Beijing’s seeming enthusiasm for renewables than meets the eye.
According to Ma, China’s solar industry was built with the idea of having a product that could be exported. It was only in 2013 when Western countries launched trade suits and levied tariffs that China decided to use a substantial number of these devices itself, saving the country from the embarrassment of having many of these producers go bankrupt. How this came about is not entirely certain, but the administrator in charge of wind and solar additions was later fired for accepting bribes, and responsibility for such decisions moved higher up the chain of authority.
Figure 10. China current view of solar investment risk in China. Chart by Bloomberg New Energy Finance.
Ma also reports, “Officials say that they want ‘healthy, orderly development,’ which is basically code for reining in the excesses in a renewable sector that has become yet another emblem of irrational exuberance.”
According to Ma, the Chinese National Energy Administration has figured out that wind and solar are still about 1.5 and 2.5 times more expensive, respectively, than coal-fired power. This fact dampens their enthusiasm for the use of these types of generation. China plans to phase out subsidies for them by 2020, in light of this issue. Ma expects that there will still be some wind and solar in China’s energy mix, but that natural gas will be the real winner in the search for cleaner electricity production.
Viewed one way, we are looking at yet another way Chinese officials have avoided closing Chinese businesses because the marketplace did not seek their products. Thus, the usual cycle of bankruptcies, with loan defaults, has not taken place. This issue makes China’s total electricity generating capacity even more excessive, and reduces the profitability of the overall system.
Conclusion
We have shown how low wages and low energy prices seem to be connected. When prices are too low, some producers, including China, make a rational decision to cut back on production. This seems to be the true nature of the “Peak Coal” and “Peak Oil” problem. Because China is reacting in a rational way to lower prices, its production is falling. China is already the largest importer of oil and coal. If there is a shortfall elsewhere, China will be affected.
We have also given several examples of how the current system has been able to avoid defaults on loans. The issue is that these problems don’t really go away; they get hidden, and get bigger and bigger. At some point, all of the manipulations by government officials cannot hide the problem of way too many apartments, or of way too much electricity generating capacity, or of way too many factories of all kinds. The postponed debt collapse is likely to be much bigger than if market forces had been allowed to bring about earlier bankruptcies and facility closures.
Chinese officials are now talking about reining in the growth of debt. There is also discussion by heads of Central Banks about raising interest rates and selling QE securities (something which would also tend to raise interest rates). China will be very vulnerable to rising interest rates, because of stresses that have been allowed to build up in the system. For example, many mortgage holders will not be able to afford the new higher monthly payments if rates rise. If interest rates rise, factories will find it even harder to be profitable. Some may reduce staff levels, to try to reach profitability. If this is done, it will tend to push the system toward recession.
We likely now are in the lull before the storm. There are many things that could push China toward an energy or debt crisis. China is so big that the rest of the world is likely to also be affected.
https://imgur.com/5T5yR2i
wow, off a Cliff…
so the mid-point between 2008 and 2050 is the year 2029…
and the graph shows The Collapse after this mid-point…
voila!
just as I have been saying…
in the 2030’s…
no Cliff until then?
IC IC baby!
Where is this chart from? In other words, who put it together?
This makes sense since in the world of perpetual money printing, whose job is simply to bring forward consumption from the future, everything must keep expanding at ~3% p.a., or fall off a cliff. Which is completely impossible given the math and logic of finiteness of the critical resources necessary for the perpetuation of industrial civilisation ad nauseum.
By the time the global societal wellbeing level on this chart nosedives to several levels below ground (c. 2037), we will need to have doubled our energy use (90% of which is dominated by fossil fuels), cut down or paved over three times more of the natural world as present, plus injected nearly double the amount of pollutants into the atmosphere, soil and oceans as now, just to keep everything square. All with a population still growing beyond 9 billion. Not to mention the insane debt levels that would be around about then.
How likely is that?
http://s2.quickmeme.com/img/28/28ef42680e4363e428684f5c703d5cda9f1d4958a37af18a2f466fb128f6f139.jpg
Good points! Do you have references for those amounts, particularly “cut down or paved over three times more of the natural world as present, plus injected nearly double the amount of pollutants into the atmosphere, soil and oceans as now, just to keep everything square”?
http://climateandcapitalism.com/wp-content/uploads/sites/2/2015/05/Update-Great-Acceleration-graphs.jpg
Just extrapolate at roughly three percent p.a. from trends shown in this graph.
Thanks!
https://medium.com/@FeunFooPermaKra/the-collapse-of-global-civilization-has-begun-b527c649754c
The article shows this chart regarding world economic growth:
https://cdn-images-1.medium.com/max/800/1*K_Y5RAKxu82SwVjBq7_AoQ.png
It emphasizes how much weight economists are giving to the reported GDP of China and India. What if they are fibbing? Or if their growth turns negative?
It also shows this chart of global wealth:
https://cdn-images-1.medium.com/max/800/1*8SO3VbLZRUsIFNmPaJDI9w.jpeg
Ouch! Looks like the Monopoly game.
Politicians continue to ensure us that “the best days are yet to come”, yet most of us feel the opposite — it is the worst days that are yet to come.
https://imgur.com/a/VyIxJ
Of course they are lying, otherwise they wouldn’t need to print insane amounts of cash to keep the cement trucks rolling!
I had to walk away after the second sentence… because I can guarantee this will finish up with a call to Koombaya…. about how things will be simpler and better after the die-off….
‘But this doesn’t mean we have to give up hope’
The flipside of hope is a dissatisfaction with the present.
For most humans, survival is not enough.
They have to be working towards some form of immortality whether it’s a career or family.
King Salman officially stepping down next week, it would appear:
“The King of Saudi Arabia plans to step down and announce his son as his successor next week, a source close to the country’s royal family has exclusively told DailyMail.com.
“The move is seen as the final step in 32-year-old Prince Mohammed bin Salman’s power grab, which began earlier this month with the arrests of more than 40 princes and government ministers in a corruption probe.
“The source said King Salman will continue only as a ceremonial figurehead, handing over official leadership of the country to his son – often referred to as MBS.
“‘Unless something dramatic happens, King Salman will announce the appointment of MBS as King of Saudi Arabia next week,’ said the source.”
http://www.dailymail.co.uk/news/article-5089229/Saudi-Arabia-king-set-hand-crown-son.html
Lots of changes! We need to keep our eyes on Saudi Arabia.
KSA is another reason to hold some gold or silver… when the end game approaches there may be a period of wealth confiscation, devaluations or a limit on cash withdrawals….just prior to total collapse…. PMs might be helpful in such situations….
FE you got me thinking what is the best strategy to squeeze in an extra year or two post collapse? When do you go full doomer because let’s face it we on OFW are living in 2 worlds and we now realize it’s best to keep those 2 worlds separate unless you don’t mind being branded a looney! My business interests demand I stay with the delusion until the last few weeks. Then it’s off to the Doomstead. I’m thinking keep a good supply of cash and a shipping container at the ready as you can quickly visit the local warehouse or grocery store and load up. I’m thinking this will be a narrow window for this as cash will quickly become useless and I’m resolved that my meager fortune will just evaporate because you just can’t spend and store goods that quickly ( 1 container full maybe? $100K cash?)
My ultimate goal? survive for at least a year after the great bottleneck and grab an airplane and fly over a couple of burnt out cities and look for signs of nature reclaiming this planet!
my answer:
there’s a decent chance that The Collapse won’t happen until the 2030’s.
but when it does happen:
what is the benefit to “preparing” for the almost total devastation of IC?
and this: do you really think that there will be any airplanes to “grab” after that almost total devastation?
bottom line: humans discount the future.
I suggest that you should discount The Post-Collapse period to zero.
just a reminder: 45 days left in 2017 and…
BAU tonight, baby!
Best to keep such tokens of exchange in the form of trinkets, like earrings, bangles, chains and rings. This would appear more natural to others than a shiny gold or silver coin. Where there’s one coin, there’s bound to be others.
I highly recommend guns and ammo — a 12 gauge shotgun is probably the best bet because it accuracy is not so much of an issue… any fool can shoot to kill with one of these weapons
Saw off half the barrel perhaps? That would help with up close encounters… let’s say a bad guy is coming in through a window… or trying to bash down the door…. just blast away.
A good strong hunting knife or two are also advised… strapped to your calf….
I believe it’s a bit tough getting those things in BAU Australia nowadays, unless you’re a farmer. But guns and ammo will be available aplenty, after the initial collapse. Plus, nothing beats a trenching tool for sheer blunt force, slicing power & portability.
Really? In NZ it is very easy to get a hunting rifle/shotgun…. you show up at the cop shop for a one hour seminar — then you write a short test that even a re-tard-ed DelusiSTANI could pass — then an inspector visits your house and interviews your wife to make sure you are not a beater/madman…
Soon after you get the permit — and you can buy as many rifles as you want — absolutely no limit. And ammo by the case….
Might consider these for the women in the house… especially if they don’t look like TINA….
https://discourse-cdn.global.ssl.fastly.net/boingboing/uploads/default/original/3X/0/b/0b1a2260d6186719d9137c73e751e4e2034d83e5.jpg
i see a career opening as a locksmith
Been thinking about this lately.
I reckon shampoo and tampons would be great trading items.
Did he step down to “spend more time with his family”?
When someone steps down for the stated reason of spending more time with their family, they usually suspect something bad is going to happen.
Yep… emperors do not step down to spend time with their family …. if he as that sort of person .. he would never have become emperor….
The emperor steps down… when he knows something of a very grim nature… and understands that time is too short to be wasted on ruling over something that will no longer exist in the very near future
Right John Key?
So the Norwegian bank has advised their government to drop its sovereign wealth holdings in oil and gas. Apparently they foresee a permanent drop in the price of oil.
I found the link related to this story:
https://www.theguardian.com/business/2017/nov/16/oil-and-gas-shares-dip-as-norways-central-bank-advises-oslo-to-divest
The title is “World’s biggest sovereign wealth fund proposed ditching oil and gas holdings.”
without oil and gas—there are no sovereign wealth funds
The wise thing to do would be to start divesting and handing cash to the people…. so they could go on spending sprees…. spending what will soon be worthless piles of paper…
That would support the economy as well…
what seriously worries me—is that only ofw doomsters appear to be aware of this
and i am not being facetious or joking about it—-everything we exist on hangs on oil
Recently bought and read your book. Good stuff, thank you.
thank you—glad you liked it
We can either laugh or cry, neither will change a thing.
Our local University campus is advocating for the University to dump it’s shares in Exxon and divest itself from shares oil producing companies. You would think if you’re smart enough to get into university you’re smart enough to know the 4 essentials of life : air to breathe, water to drink and food to eat and oil to bring it all together. How utterly stupid can you get? Makes me glad I didn’t waste any time or money there!
maybe should call this green brain disease.
all colleges/universities heat and/or cool their campuses by using fossil fuels.
these campuses would be unlivable for much of the year without FF.
I’m sure most have some solar panels that look mighty nice and provide small amounts of electricity.
bottom line: campuses were built using FF and MUST have FF to continue to operate.
green brain disease must prevent sorta smart persons from understanding this.
long live fossil fuels!
I would like to thank everyone on this blog, Gail, FE, and all others for helping me to realize our utter dependence on despicable fossil fuels. Our despicable fossil fuels have allowed us to build our civilization. Fortunately, due to the dash of realism on this blog, we can learn that there is no doing without FF. We must have them and will always need them. Thank you everyone.. go Fossil Fuels
Non-elite colleges are for dumb people. They go there to ‘learn how to be smart’!
Here’s the press release in english:
https://www.nbim.no/en/transparency/news-list/2017/norges-bank-recommends-the-removal-of-oil-stocks-from-the-benchmark-index-of-the-government-pension-fund-global-gpfg/
In the beginning it says:
“This advice is based exclusively on financial arguments and analyses of the government’s total oil and gas exposure and does not reflect any particular view of future movements in oil and gas prices or the profitability or sustainability of the oil and gas sector,” said Deputy Governor Egil Matsen.
But at the end it says:
“Therefore, it is the Bank’s assessment that the government’s wealth can be made less vulnerable to a permanent drop in oil prices if the GPFG is not invested in oil and gas stocks.”
So they are basically saying “we think we have a permanent drop in oil prices and will no longer invest in this kind of stocks”. Kind of ironic since this sovereign wealth fund was built up solely from oil profits. Maybe they see that stocks is the new oil…
Part of the rationale for the establishment of these funds is to continue prosperity once an oil producer’s oil production declines…
The problem is that when global production declines… the fund will be worth nothing.
The Canadians have it right — they just spend the cash as fast as it comes in …. and then some.
Exactly. You can’t “save” energy. The ponzi depends on there being more people who are more productive in the future. Regardless of how many money-tokens you create to represent energy, a given society can only support people with surplus energy in the present. If at any point you represent more energy than can flow through the system…
If a large percent of their income is from oil maybe it is a good idea not have their savings in oil also.
Working from the assumption there is a future, which you must do if you bother with a wealth fund.
They can easily replace those funds with their shares in Green energy companies. The green energy companies are doing very well, they just need the general public to get over their fear of the unknown.
Experts say US economy not seeing ‘Trump bump’
“The U-M economists are projecting that overall economic output growth, will rise from an average of 1.5 percent last year to 2.2 percent during 2017. Then growth goes to 2.5 percent in 2018 and 2.1 percent in 2019.”
http://www.mlive.com/business/index.ssf/2017/11/experts_say_us_economy_not_see.html
Also remember, UBS Makes A Striking Discovery: Ex-Energy, US GDP Growth Is The Slowest Since 2010.
This is the chart UBS shows:
https://gailtheactuary.files.wordpress.com/2017/11/ubs-us-economic-growth-with-and-without-energy.png
Thus, the rise in US GDP seems to be because of the commodity price rise in 2017. This is a temporary phenomenon, brought about by China’s recent stimulus–probably more debt.
https://imgur.com/a/HU3XC
Bwahaha: “When I think of a desert city built hundreds of miles from a reliable water source, I think smart.” https://www.theonion.com/bill-gates-invests-80-million-in-arizona-smart-city-1820502138
Sounds like a good “Onion” story! How true!
Trump makes it easier for police to get military equipment – NBC News
https://www.nbcnews.com/politics/white-house/trump-makes-it-easier-police-get-military-equipment-n815766
These will supply the local warlords of the future.
It should go well with all those hollow point bullets homeland security purchased a few years ago.
In one the largest studies of Human Inequality ever done. Scientists from 14 institutions conclude:
“Every society has a tipping point. And Revolution is in store for United States.”
https://www.nature.com/articles/nature24646
https://www.inverse.com/article/38457-inequality-study-nature-revolution
The economy is a dissipative structure. As energy supplies get more and more stretched, the physics of the situation says that greater wage disparity occurs. Part of the reason for this growing disparity is growing technology, and growing “complexity.” We import goods and services from low wage parts of the world. We make goods using higher tech approaches. The people with the technical backgrounds tend to get higher wages. There is less and less need for the low wage workers. Some of them may even drop out of the system. Ultimately, collapse is a way of fixing this wage disparity.
The Only Thing, Historically, That’s Curbed Inequality: Catastrophe
https://www.theatlantic.com/business/archive/2017/02/scheidel-great-leveler-inequality-violence/517164/
I am convinced the whole of what we call “complex societies” is like the game of Monopoly. It starts out equal enough with everyone doing well. But, a tipping point is reached where all the resources end up in the hands of one person and the game is over.
That is a very good analogy. For those not familiar with the game “Monopoly,” this is a Wikipedia link. It tends to end up with one person holding all of the wealth, and everyone else broke.
Soon Greg, it all goes back in the box
Monopoly the game is designed to favor the creation of a monopoly by allowing the positive feedback of wealth generating more wealth through the collection of rent to operate unhindered. By implementing progressive taxation, it’s possible to delay or prevent the formation of a monopoly. On the board, if players were subjected to taxation on their earnings or property every time they passed GO, the game could be made to go on indefinitely. But in the process it would become painful to pass GO as it is in real life to file your tax return with the IRS, so Monopoly players would turn to Cluedo, Risk, Diplomacy, or Scrabble instead.
“There is less and less need for the low wage workers.” Growing unemployment of people who aren’t engineer, might also be a way to limit demand.
Wages for technical worker is not rising either but they are more productive. The emphasis on STEM workers is a way of doing more with less. The focus on STEM workers is not a signal of accelerating returns on technology or technological workers.
I know that at least in some areas wages have not been rising, at least very quickly. Petroleum engineers are in less demand now. Programmers and tech support people now have to compete with China and India.
I don’t think the central banks want high or low demand. They want demand to remain within a narrow range for most things. That is why they have targets for growth. Like
Goldilocks, they want it JUST RIGHT.
Unlike the old days, revolutions can be quashed by mass slaughter, since the masses have no way of striking back.
I would rather say no one would risk their lives rioting while they have pizza and Netflix and iToy.
Rioting is also very hard work.
http://www.cnn.com/2017/11/15/health/first-in-body-edit-dna/index.html
Wow, a gene therapy was delivered via an IV to a patient with Hunters disease. 2-3 hours on the IV and that’s it, cured. The alteration to the patient’s genes is permanent. But if that is true, then couldn’t it be used to improve cognition? Take a patient from low IQ to high IQ in an afternoon? Remember the movie, ‘Flowers for Algernon’? Could it be used to take a very slow witted person to a particle physicist? Food for thought. Of course TPTB wouldn’t like it because too many voters would gain critical/independent thinking and that’s not good for herding the masses, but if that could be gotten around, then why not move people in the direction of higher IQ’s?
It seems like children would not be affected by the gene fix, even if the parent is affected by Hunters disease, or some other hereditary disease.
Thus, it seems like fixing people in this way would add more and more poorly adapted people to the gene pool–not really the situation that the economy would want.
Funny thing… most people believe we are physically and mentally superior to the aboriginal peoples that we wiped out…
In spite of the fact that we have kept weak and defective people in our gene pool by way of modern medicine … whereas in ancient times such people would have been eliminated…
Too much meddling. There are more natural ways to do what needs doing, but they require thinking.
A lot of hassle. Just replace everyones genes with Elons.
“Just replace everyone’s genes with Elon’s” – A lot of generic looking people.
But everyone would be in love with each other.
World Peace!
Elon is busy.
Wonderful though gene therapy may be, let’s not get too carried away by it’s potential to improve people’s cognitivie abilities.
https://i.pinimg.com/736x/22/7f/aa/227faacfabc793eb1746f5ded600f6ca–cant-fix-stupid-quotes-just-go.jpg
Supposedly there is a now a solid state battery for EV’s that charges in one minute:
http://www.zerohedge.com/news/2017-11-16/tesla-killer
If the capacity is 75Kwh like the Tesla battery, then it would be impossible to charge with 240V in anything near one minute. So, to get these charge rates would require a visit to a charging station (which is logical enough). But, each car would need a power line with about a 12,000V and 375A capacity. Or, a bit more than the power output of a 3MW wind turbine. Or, the power output of 45,000 100W solar panels. Or, about 1500 (3000W) home central A/C units running at the same time. That’s a lot of current. No way your pulling that off the grid. The power for this would have to be generated at the charging stations.
Don’t worry about Elon because of this, “… battery technology using graphene-based hybrid material …”
These vapor batteries are “graphene-based”, and graphene costs ~$250/lb ( https://www.alibaba.com/product-detail/High-quality-graphene-sheet_1734325754.html?spm=a2700.7735675.30.9.77fc180fiVxdeX&s=p )
so, if the battery weighs 1000 pounds the car would cost at least $250000. Of course, that simple calculation assumes that 1000 pounds of graphene could be gathered – from around the world – into one spot, which is doubtful.
I am sure that there is a lot less than 1,000 pounds of graphene in a graphene battery, but you make a good point.
Perhaps all the people in the world can get jobs making graphene batteries.
Yes we can spend our entire time making batteries so we can drive to the store to get food made with battery power. LOL!
That is a very good point Pintada. And this is precisely the problem that techo-fantasist have. The “solution” works in the laboratory so they assume it is a panacea. But, it does not scale up to work in the real world. To make matters worse, more often than not these new techo-fantasies require fossil fuels to produce them. Bottom line is fossil fuels are so much cheaper, more convenient, more energy dense and easier to obtain than these exotic and complex means of capturing and storing electricity (which does not replace fossil fuels) . “Renewable energy” is like having a bicycle and carrying it around with you when you could simply just ride the bicycle. With “renewables” your Just doing a bunch of extra work trying to capture energy and storing it and still burning fossil fuels anyway. It is pointless.
“With “renewables” your Just doing a bunch of extra work trying to capture energy and storing it and still burning fossil fuels anyway. It is pointless.”
Well said!
This is precisely the problem that makes such batteries not feasible.
They haven’t released details but if they had a battery that could charge in 1 minute they wouldn’t need 300mi of range and wouldn’t need very many stations at each location. That said there are a hundred other problems you didn’t mention like the cost of purchasing that kind of energy on demand from a utility or a consumer operating equipment with such tremendous arc potential or the tremendous cooling needs of the EVSE, car and battery.
As for at home, you could do multiple plugs & sockets (like Tesla used to offer) or a home battery EVSE for higher voltages (pull 240-480V from house service and another 480V from a battery). But charging overnight is usually sufficient.
There are limitations to what we – the great humans – can achieve…
One of them is we cannot make battery storage work…
Another is … we cannot predict when BAU goes down (although the CBs likely have a reasonably good idea because they would know when the oil bottleneck tightens up…)
Listen to Greg. You can’t really operate the charging stations for such batteries. Too much current draw.
The Everything Bubble
In the wake of the 2008 GFC, the World’s Central Banks have today created countless financial bubbles through unconventional and unproven monetary policies.
Algebris Investments have put together a list of the world’s fourteen largest bubbles in existence today. These have been ranked by risk based on their size, duration, appreciation, valuation and evidence of irrational behaviour. The latter of which there is aplenty.
So what are the biggest financial bubbles today?
According to Algebris, property bubbles take the top three places, as they are likely to inflict the most damage, since everyone needs shelter.
Australia’s Property market is currently the world’s largest bubble having appreciated 510 per cent over 29 years. The London and Hong Kong Property Bubbles come in at second and third.
BitCoin is the fifth largest bubble, followed by the FAANGS stocks – Facebook, Apple, Amazon, Netflix, and Alphabet’s Google. But where’s Tesla?
https://media.algebris.com/wp-content/uploads/2017/09/current-bubbles1.png
The fallout from the biggest and probably the final economic crash of modern times will truly be epic. I think most of us know that few will come out unscathed. Got your blast suit?
Actually, if you look at the article, they have more bubbles than these. “When everything is a bubble, we need a different name for it.”
Eyes in the sky raise questions over Saudi oil storage
Orbital’s analysis of satellite imagery suggests that Saudi Arabia’s above-ground tanks — whose floating roofs allow them to see when oil inventories are rising or falling by measuring shadows cast across the top of the tanks — have seen no real change in the past 18 months…While Saudi Arabia has reported to Jodi that its oil stocks have declined by about 70m barrels since early 2016, the Orbital analysis suggests the above-ground tanks have actually seen inventories rise marginally over the same period.”
https://www.ft.com/content/3a1626f2-c47a-11e7-b2bb-322b2cb39656
Strange!
https://imgur.com/a/Ngb1U
Mom dies cleaning up following son’s fatal overdose
https://nypost.com/2017/11/15/mom-dies-cleaning-up-following-sons-fatal-overdose/amp/
Plummer became short of breath after cleaning up her son’s overdose and was taken to Conemaugh Memorial Medical Center, which is where her son was rushed just a day earlier. He died one day after his mother.
“This is caution for safety for anyone coming into contact with any type of powder substance,” Jeff Lees, Cambria County coroner, said,
Lil Peep, a fast-rising rapper whose emotional tracks charted depression and drug use, has died aged 21. His UK representative confirmed the news to the Guardian.
Gustav Åhr, who grew up in Long Beach, New York, was reportedly taken to hospital following an overdose, according to music manager Adam Grandmaison. In a video Åhr posted online hours before his death, he said he had taken prescription drugs and other substances, saying: “I’m good, I’m not sick”.
The World of people
That is the most disturbing illustration of a statistical trend I’ve ever seen. What sick mind came up with that?
New York Times? I almost deleted it.
It seems like right time to address the idea that a country with no functioning government is worse than that has one. People often bring up Somalia, a country known for not having a central government, when attempting to discredit Libertarianism.
Libertarianism seems to work for a society that does not need a central government, meaning a non-industrialized society and one that is not based around civilization.
Civilization/central governments tend to empower one group at the expense of another group.
Gail attributes this to the dissippative structures of civilization, where wealth and power tends to concentrate among high status people.
“Somalia during anarchic period compared very favorably to both Somalia before said anarchic period (under dictatorial Barre’s regime) as well as to other countries in area with similar GDP per capita. For one, there was no mass state-sponsored genocide the likes of which the Congo or Darfur or Rwanda witnessed. ”
https://www.reddit.com/r/Anarcho_Capitalism/comments/l9ldy/why_isnt_somalia_a_libertarian_paradise/
In poor countries, politicians seem to be predatory because there is no surplus to support them, so they steal directly from the people the claim to serve, or they are supported by wealthy foreign governments.
It works best when you have no resources to steal….
https://en.wikipedia.org/wiki/Island_(Huxley_novel)
I like that third option. Admirable thoughts on Huxley’s part.
However, these societies are tribal, hierarchical, and ruled by tradition and strong religious customs – this provides a framework for a kind of stability, in the absence of central direction. So I wouldn’t really call them ‘libertarian’ in any meaningful sense.
They can descend into anarchy very quickly once the various leaders decide to make their bids for supreme power, just as in the various periods of anarchy in medieval Europe, or the Roman and Mughal empires.
When Charlemagne’s empire fell apart, life was much like the worst parts of Africa today.
I’m going to have to disagree. Tribal societies are a lot less hierarchical than non-tribal ones. The inequality that exists in tribal societies seem to be fair to those in them.
I also don’t remember Libertarians endorsing no means of social control, they just favor forms of social control that don’t come from a central government.
Virtually no popular political philosophy is in favor of people doing whatever they want, whenever they want. Libertarianism was never in favor of that when it was popular….that was over a decade ago.
Libertarianism is no longer a popular philosophy.
Custom and tradition can be the worst tyrants.
As for fairness; if you don’t like it and are at the bottom, you don’t get to argue (just as with us, of course): the sheikhs eating all the juicy goat meat in the top tent, you by a twig fire, waiting for the bones and rice……..
I admit, this can be softened by patriarchal paternalism – and therefore much nicer in a way than, for example, the welfare system in Britain which is quite cruel and indifferent to suffering, where a woman of 38 just froze to death after having her payments stopped, leaving four children.
Hierarchy is especially used in “complex” societies, such as ones with a lot of technology, and much specialization. I will have to agree; I wouldn’t expect tribal societies to be very hierarchical. But I would expect them to essentially enforce roles assigned to various members of the economy by cultural means.
https://imgur.com/a/EMZRf
Trusted Wood Mac thinks Permian will peak in three years. That would be peak shale and peak global.
https://oilprice.com/Energy/Crude-Oil/Is-Peak-Permian-Only-3-Years-Away.html
Thanks! Of course, their analysis is saying diminishing returns are setting in. It is costing more and more to produce a barrel of oil. If somehow, consumers could suddenly become wealthier, and could afford to pay more for a barrel of oil, then it would make sense to continue drilling, and even raise the effort, despite diminishing returns. This is why so many people are confused. They think prices can rise forever, allowing production to rise forever.
Great place again without the “junk posts”. Read through all the post and great comments and discussions. We are way past the point of no return when we substituted real energy with debt in the 1970s. Even if we have discovered another 10 Saudi Arabias, the extra oil will only crash the economy because we are too stretched. Many delusionals still think that if we have a access to cheap energy now, we are saved. No, we are not. Fiat, debt, energy and supply chain are all interlinked. If one is taken down, the rest are taken down.
Great work Gail ! Sorry for disappearing for 6 months
Glad to have you back! I now have the controls set so that I have to approve a somewhat larger share of comments, including all brand new commenters.
The situation is looking more and more worrying. We have China with its problems. This is a recent article by Jim Rickards about China’s problems called Warnings from the “China Beige Book.” He says
We now have Saudi Arabia acting very strangely as well, and mentions in the press about interest rates on certain types of debt spiking. And we have Venezuela defaulting.
It is as if a storm is coming, and we can see the winds blowing, already.
“Base metals slid sharply on Wednesday as data from China stoked fears of a slowdown in the world’s top commodities consumer, with falls in oil and global stocks indicating broad-based risk aversion amongst investors.
“World stocks were set for their longest losing streak in more than six months, oil prices slipped for a fourth day in a row and the dollar hit its lowest levels in three weeks versus the euro
“Data on Tuesday showed China’s economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution.
“”There’s definitely a move out of riskier assets which typically has a negative impact on commodities but there’s fundamental reasons why commodities are selling off. China is slowing and yesterday’s data exemplified it,” said Caroline Bain, senior commodities economist at Capital Economics.””
http://uk.businessinsider.com/r-metals-base-metals-slide-as-china-data-hints-at-slowdown-2017-11
“China’s central government has ordered a small city in Inner Mongolia to halt construction of a Rmb30.5bn ($4.6bn) subway project, signalling Beijing’s willingness to sacrifice growth to rein in financial risks.
“The city of Baotou had intended to fund 60 per cent of the project’s cost from bank loans and held a groundbreaking ceremony in May, which was attended by Baotou’s top two officials.
“Over the past decade, local governments have relied on debt-funded investment projects to bolster their economies. In August the IMF warned that China’s non-financial sector debt would exceed 290 per cent of gross domestic product by 2022, compared with 235 per cent last year.
“But at a Chinese Communist party congress last month, President Xi Jinping departed from precedent by not mentioning the government’s official economic growth targets, signalling his administration’s higher tolerance for slower growth…”
https://www.ft.com/content/8a4ae6de-c9d5-11e7-ab18-7a9fb7d6163e
Thanks! China has figured out, as we have, that public transportation projects can be very expensive with limited payback.
I expect the higher commodity prices in the first part of this year reflect the fact that China’s central government wasn’t doing much of this. Of course, we benefit from the bubble effect too, when China does add more debt, because indirectly, their debt tends to somewhat stimulate the whole economy. It is part of what keeps oil prices higher now, compared to the $30 per barrel range we saw during January and February of 2016.
https://gailtheactuary.files.wordpress.com/2017/11/chinese-house-price-graph-from-globalpropertyguide.png
When I look at the housing price changes in China, it seems like the low oil prices were probably about the same time China’s housing price changes were low. Once China can recreate a bubble, it helps the whole world economy.
Thanks! If China’s economy is slowing, this is important for the rest of the world.
Deflationary Death Spiral edges ahead of Peak Cheap Oil … it’s Deflationary Death spiral on the final turn … Deflationary Death Spiral and Peak Cheap Oil as they head for the cliff …. in the End of BAU Derby….
https://image.shutterstock.com/z/stock-photo-neck-and-neck-horse-race-10834456.jpg
The instability seems to be more prominent in the social and political areas.
Remember how far removed from peak oil, discussions in the media about the Arab Springs were…?
The recent spat of news about sexual harassment is not happening because of social progress but it may be happening because the people in positions of power in Hollywood are become slowly less wealthy, and less able to pay people to stay quiet.
I suspect that there has always been quite a bit of sexual harassment. No one thought much about it before–it sort of went with some jobs. The line regarding what is sexual harassment is a fuzzy one. What is considered terrible in one part of the world might be more acceptable in some other countries. This is one of the issues with recent immigration.
Peak Sand
http://meconstructionnews.com/wp-content/uploads/2016/07/dubai-construction.gif
Dubai, which sits on sand, has to import 50% of its sand because the desert sands are too smooth for construction purposes and there’s a crisis coming, as global shortages appear imminent.
…over-exploitation of global supplies of sand is damaging the environment, endangering communities, causing shortages and promoting violent conflict.
Skyrocketing demand, combined with unfettered mining to meet it, is creating the perfect recipe for shortages. Plentiful evidence strongly suggests that sand is becoming increasingly scarce in many regions. For example, in Vietnam domestic demand for sand exceeds the country’s total reserves. If this mismatch continues, the country may run out of construction sand by 2020, according to recent statements from the country’s Ministry of Construction.
Enter sandman
https://m.youtube.com/watch?v=CD-E-LDc384
And we used that sand up in order to create such Beauty……….
Breaking News:
Bloomberg: New Research Proves 1+1=4
FT.com: Mathematics Turned on Its Head by Revelation 1+1=4
CNN: Amazing Discovery 1+1=4
BBC: Scientists and Mathematicians Agree 1+1=4
Etc…
And what would be the discussion over the dinner table this week – if people were to actually eat dinner at a table and have discussions….
Did you hear — 1+1= 4. Isn’t that incredible.
Coming up next – how a circle became a square
You could add, “Sustainable growth” and “Steady State Economy.” These are myths from other areas.
Populism and immigration pose major threat to global democracy, study says
https://www.theguardian.com/global-development/2017/nov/15/populism-immigration-major-threat-global-democracy-study-international-idea?utm_term=Autofeed&CMP=twt_b-gdnnews#link_time=1510766220
“The situation is looking more and more worrying.”
It’s worrying that a major cheerleader of the status quo is now coming around to the realization that immigration is a threat to democracy.
The Guardian is a major liberal, pro open-borders news outlet. The author has been allowed to agree with Trump about immigration in the article. How did this article make it past the censors, I mean, the editors?
A “Real” black person…I get it it’s a misnomer…
https://imgur.com/a/EMZRf
Amazon Gets Desperate
http://www.dailytechynews.com/?tsid=&s1=tv2int_ustest1&trackid=&clickStatus=7785211311360292790995745×tamp=1510778521&citystate=Rio+Rancho%2C+NM&keyword=news&ipaddress=75.161.19.201&fullReferrerlink=https%3A%2F%2Fwww.aol.com%2F&rootDomainReferrer=https%3A%2F%2Faol.com%2F&convid=xqz9d5c3d8b31e4cce567c6c4d14b9&tsid=CDAABvW&s1=tv2int_ustest1&trackid=ABi2CtVLdOjHAvmXnAAGFiKZHuHABCDAZ&ekxzez=ODI1ODc3MDE1MTdhMDk4ZjA1ZDExYTQzYTBhNTkzNzM1NmExNjE0ZTQyZTI2YmRhZDM3ZDc4ZGJlZWE5YTg3MDEwN2UzNDkxNWM2WMj4M1TI
More like “Retailers Get Desperate” trying to keep up with Amazon. Wow. Perhaps the “luxury” brands are no more costly to produce than the $5.00 brand is. Designer handbags and watches for $5.00. Just in time for the holidays.
update:
Amazon is not “desperate”…
this looks and smells like a scam…
good luck getting your “free” stuff…
I’m not going to try…
but hey…
post your results here, please.
But you’re not saying that the system could work with those low prices all over? Wouldn’t it be nice for consumers if it could? 😉
That would be deflation. Everyone would be out of work unable to afford the low prices.
i live on the margins, somewhat by choice and natural inclination. On the rare occasions when I sell artwork that is of fair quality and took time, I sell it for peanuts that make the buyers uncomfortable. I break even or slightly ahead. It’s like gravy over a poor lifestyle. I don’t live on it, but it greases rusty parts. I’ve always felt that prices need to come down like that all over. If manufactures can endure squeaking by like me and still manufacture, prices can come down without deflation. Everyone will be squeaking by, but some sort of system would still prevail.
as a fellow artist—i sympathise.
but everything boils down to the cost of food clothing and housing
as long as 7.5bn are trying to extract the basics of the above from a planet designed for 1 0r 2 bn, and a few can grab excess—following ”market forces” then things will remain as they are—and worsen of course
“as long as 7.5bn are trying to extract the basics of the above from a planet designed for 1 0r 2 bn, and a few can grab excess—following ”market forces” then things will remain as they are—and worsen of course”
This may be true and just not consistent with my mental wiring’s ability to grasp. I want and need a lot of things, but I can do without a heck of a lot too. The one thing I don’t want or (strictly) need is housing. If i had a couple dedicated people to help me, I could build (without any fanciness or special polish) a very solid house. I would build it out of cardboard boxes. I’ve had similar boxes exposed to the elements for 1.5 years about, and they are still there, deteriorating slowly, but predictably according to the laws of physics. Following those same laws of physics, they could be made to endure the elements indefinitely. (BTW, the cardboard boxes I want and use are otherwise destined for the dump, serving no known energy or economic purpose)
Food is a much different matter. Clothing falls in between, since I hardlyt buy clothes but wouldn’t wish to make them either.
As a rational matter, I would ask society to use most of its resources to produce affordable food. Clothing would be so so, with maybe one or two styles with no bright colors. And very cheap. I would ask the society not to spend any resources on houses. So I suppose rationality requires rationing of resources, spending them to get me what I don’t have the means or interest in getting myself. And I would like to be supported in doing for myself what I would. Get me the cardboard. Divert means–like what is spent on most schools–to get me help to make my cardboard houses. Change planning rules that inhibit my using those houses in spatially innovative ways, for homeless and poor, wherever they can fit. Take Gail’s suggestion to separate housing from building houses. So people move back in with mom, but preferably carve out some private space in the basement of the attic, all without building anything new. I would also ask for a tax rebate for people who can prove they are growing a minimum of the society’s food. I would ensure that just outside the limits of urban clusters, there be greenhouse and other food businesses. I’d leave it to TPTB to figure out how to get indispensable cheap things from China, since I have no clue how to do it. The point is, however, that I could do a lot more for myself and others given a change in society’s priorities and rationalizations.
It is very much a matter of nuance for me. I simply don’t understand these sweeping statements about what can and can’t be done. Making the effort to be more rational is worth it if you only make .01% progress in what you think should be done. There are still endless opportunities to make that .01% bit of progress. I can’t see why that is not clear to everyone.
unless you are a career naturist, or are a member of an uncontacted amazonian tribe, clothing is essential, particularly if you live with chilly winters.
it doesn’t matter if you actually buy them, clothes are a collective need for the society in which we live.—we have embellished clothes to the point where there are symbols of wealth/sexuality or whatever.
you cannot expect people to revert to the tunic styles of chairman mao—even though this might be economically sensible.
clothes are part of our economic system–if our clothes were identical, you could have robotic clothes factories turning them out.–but that would mean a despot running our lives.
ask yourself if you can accept that.
houses much the same…the majority do not want to live in cardboard boxes, we expect a house to last a lifetime at least.
my comments on this thread are collective, never individually personal.
you and i may do/wish/want/ vote for/ certain things, but humankind is like a tide—unstoppable until a greater force stops it.
https://www.youtube.com/watch?v=8i3riKvCYkM
Fascinating!
The problem is they can’t. You don’t understand this. You can’t possibly encourage lower and lower demand and expect many producers to remain in business. People who strive to live “at the margins” are unusual people and are a statistical minority since it leads to fewer children. People who want to have children tend to have some level of ambition–they want to live as comfortably as possible. No one aspires to go to bed hungry. Even the Amish don’t aspire to live “at the margins”, just simply. Their farming lifestyle is slightly less sustainable than the industrial lifestyle that everyone else is engaged in, including people in third world countries, the majority of whom are not self-sufficient farmers.
“I sell it for peanuts that make the buyers uncomfortable.” Many artists sell their art for peanuts because no one wants what they are selling. They have no choice but to sell their artwork for very little money. The term “starving artist” doesn’t exist because artists, in general, are so anti-materialistic and concerned for the natural world that that they voluntarily accept low prices for their work. The term “starving artist” exists because artists are often producing something that few people want,
Many businesses, particularly retail, operate on very thin profit margins. The small increase minimum wages in various U.S. markets is already eating into their profit margins. Low profit margins often have negative social effects such as bad working conditions, and less resources available for the elderly and sick.
Affordable food would just turn into more humans which would increase competition for
limited natural resources. Nothing rational about growing more food.
Industrial civilization is not very flexible at this moment. Increasing demand and lowering it causes problems.
Norm/arbp,
What you say about living in cardboard boxes is fallacious. I never mentioned living in cardboard boxes. I mentioned building houses from cardboard boxes, often reconfigured. You have no way of knowing how they could look or function, You don’t know what it’s all about, so it helps us to think better if we face the fact that we don’t know things we have never experienced.
I’m not concerned with what other people like. I merely please myself while aligning that self-serving mission with what I suspect are survivable values on a universal scale. If I don’t like doing it, it ain’t getting done, whatever the broader implications. Strange as it might seem, I’m not on a mission to save the world. Artists, if they ARE artists, don’t follow fashion. They do things that have never been done before.
I’ve been told, correctly or not, that I could get my work into galleries and make a respectable living from that. But, no credit due, I don’t like the anxiety or competitiveness that would produce. As much as society allows me to, I do things my own way. I’ve arrived at a respectable age despite doing so; it can’t be all bad. Don’t mix your values with mine. I’m not complaining to you or anyone else. I’m simply sharing what I do and aspire toward, take it or leave it.
It’s totally clear to me that I need clothes, and that everyone within civilization does. That’s why I mentioned TPTB and expressed the hope that they can keep clothes coming by some means that I’m not able to fathom. I’m suggesting that they try being rational, that’s all. Maybe it’s rational to have billions of models of everything–endless variety of every product. But I’ve heard many complaints about that from customers, so I’m not the only one who wouldn’t mind if there were only six or seven brands of toothpaste, not a hundred. And six or seven styles of clothing. If they are well and selectively made, I think they could be quite stylish. (Orthodox religions seem to get by with a very limited choice of clothing styles, while still using computers and I-phones.) In a less centralized industrial civilization, there’s no telling how diversity could work. We can’t be guided onward by looking in the rear view mirror.
Thank you for this brief glimpse into DelusiSTAN…. If I ever run out of cool places to bucket list… I will consider signing up for the group tour….
“Thank you for this brief glimpse into DelusiSTAN…. If I ever run out of cool places to bucket list… I will consider signing up for the group tour….”
I haven’t been seriously wrong for a longer time than you’ve been around. So I’m not seriously fazed by your childish perspective.
A peace offering …
Post the address of your cardboard house… and I will send you some card board appliances and a bed… as house warming gifts…
https://littleredwindow.com/wp-content/uploads/2014/11/IMG_2226.jpg
https://i.pinimg.com/736x/54/c3/97/54c397c7091bddb66c193fb38f753eec–box-bed-toy-house.jpg
Once I finish the car I will post that to you as well
http://1.bp.blogspot.com/-MdaOhuMIi2I/UU8aYekI3bI/AAAAAAAABH0/DKgWMMw6HMY/s1600/034.JPG
It is not your imagination. Here’s a great analysis of exactly that:
https://dothemath.ucsd.edu/2015/09/you-call-this-progress/
Oops. Didn’t mean to post that here, was supposed to be in response to Greg.
I was thinking about truly disruptive technologies that actually replaced an existing technology. For example, when I was a kid slide rules were used to do mathematical calculations. Today, calculators have completely replaced the slide rule. The car has replaced the horse. Things of this nature seem to be the exception though. Most of our technology today seems to be additive not displacing.
When speaking of energy, none of our energy supplies over the last 50 years have been replaced or displaced at all. This, despite the discovery of nuclear energy. Transportation has gone largely unchanged in 75 years or more. Still largely the same old internal combustion engine technology. Yes there are more bells and whistles, but the underlying technology is still the same.
Medicine has made advances. However, the costs are astronomical and benefits questionable at times.
It seems to me we are just tweaking and adding to what has already been discovered/invented. We are not really displacing/replacing much of any existing technology. Does anyone else see this trend? Or, is it my imagination?
It is not your imagination. Here’s a great analysis of exactly that:
https://dothemath.ucsd.edu/2015/09/you-call-this-progress/
Interesting find. I’ll give it a read.
“Try convincing someone in 1965 that the U.S. would not have a human space launch capability 50 years later, or that we would retreat from far-flung human exploration after 1972 and they would think you to be stark-raving mad” – This is a good point in the dothemath article.
It seems to me that for progress and inventions to continue to increase at the same pace as the did from 1885 to 1950 two things would have to happen:
1) We would need more of every element on the periodic table
2) We would need a lot more elements on the periodic table
And 3) We would need another fuel bonanza many times more potent than the fossil fuels that drove development during that period.
energy and fuel just moves levers.
what we have done over the past 250 years is find fresh ways to move levers more efficiently, in order to move things and make things
there doesnt seem to be any new ways that levers can be moved for our benefit.
i might have missed something though
I think you have found the key.
Tum Murphy teaches physics at University of California San Diego. A while back, he wrote a number of very good posts. This is one of them. I agree; we don’t have nearly as many breakthroughs now as we did then.
Yes I have also noticed this and I use this argument sometimes when discussing with my cornucopian friends. We are more or less using the same technology as we did 50 years ago, just refined or evolved from that point. That’s why we will never go to Mars or create a techno-utopia etc, we just have too much baggage, both mentally and infrastructure-wise. Oh, and the lack of cheap fuels.
The greatest labour saving device ever invented was the washing machine. It’s been downhill from there ever since.
https://imgc.allpostersimages.com/img/print/posters/george-marks-woman-using-wash-board_a-G-8005185-14258389.jpg
+++++
Part of the Fast Eddy Challenge involves hand washing clothes… add up the number of hours per day to accomplish that …. make sure to include the hours required to chop the wood by hand to heat the water used…..
I have long said that; much to peoples surprise when I do. It just shows how the mundane has been buried and forgotten. You just don’t know what you got til’ its gone huh.
I see you’re using and older model. The newer ones have some very attractive features.
https://i.pinimg.com/736x/3d/30/b3/3d30b38eeda55c1a11346fc23042c95b–pin-ups-hot-rod.jpg
https://i.ytimg.com/vi/sajVsP6yR9M/maxresdefault.jpg
Is this the LG model as in ‘Life’ Good’?
Fingernail polish looks remarkably intact!
People are not impressed they can leave their jobs unattended for a couple of weeks to travel through air inside a metal object to the other side of the planet.
No, they are impressed they can book this over internet and pay without using cash.
Touché! And they are even more impressed when they get free miles in the metal tube.
So a question – what about Iceland? They have approached energy independence with their genuinely viable hydro and geothermal. How will collapse screw it all up for them?
Supply chains and spent fuel ponds. And starvation.
You’re forgetting they have an endless supply of bananas growing in geothermally heated greenhouses and frozen fish fingers. And Bjork! They have Bjork!
Try operating this
https://www.youtube.com/watch?v=4VGXV7YAGRI
Without the mines that supply the ores that are smelted in smelters and formed into spare parts in the factories and put on ships and delivered from China and Germany and other countries… to Iceland…
Iceland will be just as f789ed as every other place on earth post BAU
+++++++
++++++++
+++++++
The only part missing is that it’s also impossible for Iceland to switch over and produce all of this domestically (ignoring any case where this may be impossible such as domestically unavailable rare-earths) because that would collapse their wages system (which has been propped up by labor arbitrage – the raison d’être of globalization) and therefore, collapse their economy.
No problem! Just turn that power plant into another greenhouse for growing bananas. Sorted!
According to Fatih Birol of the IEA, the USA is to become a net oil exporter within the next ten years:
https://www.theguardian.com/business/2017/nov/14/us-net-oil-exporter-iea-international-energy-agency
Which is odd, given Birol’s past warnings about future oil supply. Does he not see the unsustainability of tight oil extraction from shale plays?
This story has been bouncing around everywhere and is making the hopium addicts sleepy… very sleepy…
Net exporter of low EROI, high cost fuels from a nearly bankrupt industry, that due to decline rates would last a few years at best (if it’s even a remote possibility, which I doubt).
We Promise an Oil Independent America
IEA is totally wrong. The idea that US shale oil production can increase year after year after year is silly….
Robert Mugabe is 93 years old. I expect that he should have retired a long time ago.
Zimbabwe is right on the edge of the countries being hit by plague. I expect it is next in line to be impacted.
Zimbabwe’s per capita GDP was $1,009 per person in 2016, or less than $3 per person per day. (And GDP includes more than wages.)
Zimbabwe’s top exports are gold, raw tobacco and nickel ore. Its top imports are refined petroleum, telephones, packaged medicines, corn, rice, wheat, and soybeans.
A little background: In Rhodesia under Ian Smith’s government, the streets of Salisbury were clean, tidy and orderly, and Ian himself boasted that the whites had “created a high standard of civilization here. We have actually given our black people more than, for example, the British gave any black people in countries to the north of us that they colonized.”
But the Ndebele ZAPU leader Joshua Nkomo—who by the way sounds more British to my ears in this 1976 interview than most Britons I meet today— was not impressed one bit. “No, no, we’re not talking about race here. We’re talking about a people getting the right to decide their future. And to say that it (independence) should come slowly, it would mean that people believe that the Africans are not as human or equal human beings as the white people. So why does it come slowly? We are saying the population of this country, not just blacks, the population of this country together, must make decisions.”
A few years after Independence, Nkomo was forced to flee the country when he was accused of plotting a coup d’état after South African double agents in Zimbabwe’s Central Intelligence Organization, attempting to cause distrust between ZAPU and ZANU, planted arms on ZAPU owned farms and then tipped Mugabe off to their existence.
In exile, he stated that “nothing in my life had prepared me for persecution at the hands of a government led by black Africans.”
From WIkipedia: After the Gukurahundi massacres, in 1987 Nkomo consented to the absorption of ZAPU into ZANU, resulting in a unified party called ZANU-PF, leaving Zimbabwe as effectively a one-party state and leading some Ndebeles to accuse Nkomo of selling out. These Ndebele individuals were in such a minority that they did not constitute a meaningful power base within the cross-section of ZAPU. In a powerless post and with his health failing, his influence declined.
When asked late in his life why he allowed this to happen, he told historian Eliakim Sibanda that he did it to stop the murder of the Ndebele (who supported his party) and of the ZAPU politicians and organizers who had been targeted by Zimbabwe’s security forces since 1982. “Mugabe and his Shona henchmen have always sought the extermination of the Ndebele,” he said.
Rhodesia. How long ago that all seems now.
https://youtu.be/0S2NKlMW0vc
I was on a ship in the Arctic some years ago … there was a panel of experts taking questions on the ship … two were Inuit — one was a female lawyer…
When assaulted by one of the wealthy prick white man from Toronto who accused her as follows ‘we have done everything for you but you have messed it up’
She replied ‘we were doing much better before you did everything for us – thanks’
I think Gandhi mentioned something along these lines as well… cant locate the quote
Speaking of major events, there are now reports of a coup that is not a coup against President Robert Mugabe in Zimbabwe:
“Although it doesn’t look like a coup, it is a coup,” Zimbabwe analyst Alex Magaisa, a senior Zimbabwe legal analyst based in the UK, told The Telegraph.
http://www.telegraph.co.uk/news/2017/11/14/tanks-seen-heading-towards-zimbabwe-capital-harare/
That place made its bed…it was a bread basket and now it is a basket case…NO sympathy.
here another elon musk type of actor
https://youtu.be/hmPHBhYaCR4
this guy saying he clean up Great Pacific garbage patch in 2022
through his technology
after watching this i have also idea of cheap energy to vc
https://media.npr.org/assets/img/2016/01/04/img_1369-edit_custom-49062773c1d1b13f5041a2c761599fedcf4789a0-s900-c85.jpg
cow dung will power the world
TWP
My theory too: back to cattle-herding and burning dung and wild thorn bushes.
I would agree that a passive approach to cleanup would make a lot more sense then an approach based on burning a lot of oil directly. But it is likely any of our pollution issues–easy to put off. Even a passive approach uses energy and materials of various kinds.
Why not burn the plastic to generate electricity …. what could possibly go wrong?
This is actually being done:
https://www.eia.gov/energyexplained/?page=biomass_waste_to_energy
Waste-to-energy plants make steam and electricity
https://www.pri.org/stories/2012-06-26/sweden-imports-waste-european-neighbors-fuel-waste-energy-program
I don’t know how much plastic burning is actually being done, but my impression is that much more of this is being done in Europe than in the US.
Does a change in price of fuel affect GDP growth? An examination of the US data from 1950-2013 (Hall, & Aucott, 2014)
Studies have suggested that in the USA if the amount of national income spent on energy exceeds 5.5% the economy crashes.
https://www.researchgate.net/publication/270904271_Does_a_Change_in_Price_of_Fuel_Affect_GDP_Growth_An_Examination_of_the_US_Data_from_1950-2013
Right! High oil price is a problem for consumers.
Of course, low oil prices is a problem for producers. Can’t win.
Goldilocks is losing size!
Gail, what percentage of US income are we currently spending on energy?
There is more than one way of calculating this.–are they retail costs, or wholesale, for example.
The EIA gives its calculation at this location:
https://www.eia.gov/totalenergy/data/browser/?tbl=T01.07#/?f=A&start=1949&end=2016&charted=2-7
This is the chart:
https://gailtheactuary.files.wordpress.com/2017/11/eia-us-energy-expenditures-as-a-pct-of-gdp-through-2015.png
For the year 2015, energy expenditures as a percentage of GDP are 6.2%. This is almost a record low. The three years that were lower than this were
—1998 and 1999, both with energy expenditures of 5.8% of GDP
—2002, when energy expenditures amounted to 6.0% of GDP
The record high was 13.3% of GDP in 1981. You will remember that was the time with the highest interest rates.
In 2008, expenditures amounted to 9.6% of GDP. This was a “local maximum.” There was another local maximum in 2011, at 9.0% of GDP. The percentage drifted down from there: 8.4% in 2012; 8.3% in 2013; 8.0% in 2014; and then 6.2% in 2015.
Here is the Hamilton paper he cites several time that links high oil prices to recession.
Causes and Consequences of the Oil Shock of 2007-08 (Hamilton, 2009)
https://www.brookings.edu/bpea-articles/causes-and-consequences-of-the-oil-shock-of-2007-08/
Pingback: Mideast Turmoil: Follow the Oil, Follow the Money - You-Blog.Club
https://www.engadget.com/2017/11/13/bill-gates-firm-puts-80-million-behind-smart-city-in-arizona/
This looks interesting. Technology…the more complex the better, right? In for a penny in for a pound.
Are you a believer?
$80 million is peanuts…
well, not to me, but certainly to him.
I wonder…
how will this “smart city” survive in the AZ desert when there is no more A/C because of the depletion of fossil fuels?
Bill, oh Bill, I can’t hear you!
2 KW of solar per 1000 sq. ft. of dwelling is more than enough to keep it cool if built right. Az. has some sun.
I so want to believe….
I want to believe too. But the reality is solar PV doesn’t scale, it is intermittent and expensive (even more so with batteries that have to be replaced every 5 to 7 years).
Industrial Civilisation is having everything thrown at it to keep it alive. In the same way the elderly and infirm consume the most expensive/exotic and extravagant medical procedures in the latter stages, so too is our way of life being maintained via extraordinary interventions.
Hallucinations by the patient, as per this article, are par for the course.
2007 GFC was our defibrillation moment, QE was the shot of adrenaline, negative interest rates the intravenous drip and Tesla is an attempt at chelation therapy to purge those nasty toxins, the FF. Plenty of money being made by the inner circles as the patient more and more resembles the walking de.ad.
Get the popcorn and the toilet pan; going to get messy!
Interesting analogies!
It seems that the side effect of each treatment requires ever more adventurous interventions. We seem to be at the point where the ‘masters’ will never see the root cause because they have long ago forgotten what a healthy economy looks like. Instead time reveals ever more bizarre side effects which take so much time to untangle that a return to basics is too far back to see in their rear view mirror.
Its akin to someone being born today being told there was once a heavy covering of trees through the middle east. Doesn’t one country have a cypress tree on its flag?
‘Smart cities’ is the idea behind Europe’s Project Stardust.
Guess what: not only will the cities be smart, surrounded by wind turbines and covered in panels, with ‘intelligent lighting’ (?) they’ll ‘create lots of new economy jobs’.
Look up at the skies: they are shining with hope, brilliant with stardust!
Anyone seen more news about the solar-powered road’ which was opened in France a while bacK?
It’s probably fully lit… when the sun is shining!
Its running alongside the yellow brick road, last I heard…
France opens world’s first solar panel road, but it sure ain’t cheap
But the technology comes with a mighty price tag: The stretch of road cost 5 million Euros (US$5.2 million) to build, leaving some experts questioning the project’s value.
“It’s without doubt a technical advance, but in order to develop renewables there are other priorities than a gadget of which we are more certain that it’s very expensive than the fact it works,” Marc Jedliczka, vice-president of Network for Energetic Transition (CLER), told Le Monde.
http://progressnothingless.com/france-opens-worlds-first-solar-panel-road-but-it-sure-aint-cheap/
Thanks! People don’t understand that we need very cheap electricity that is easily available around the clock.
According to the article, “Officials will see if the technology, called Wattway, can provide enough energy to power street lighting in the town of 3,400 residents over the next two years, according to The Guardian.”
If they plan to use the electricity to power street lights, they need to add batteries to the already high cost.
Oh… he gout around to checking under the cushions in the couch. Lets just hope he can find some water.
It seems like water is an issue for any city in Arizona as well. Besides all of the food needing being trucked in from a distance, using oil.
Auto-Loan Subprime Blows Up Lehman-Moment-Like
by Wolf Richter • Nov 14, 2017 • 2 Comments
But there is no Financial Crisis. These are the boom times.
Given Americans’ ceaseless urge to borrow and spend, household debt in the third quarter surged by $610 billion, or 5%, from the third quarter last year, to a new record of $13 trillion, according to the New York Fed. If the word “surged” appears a lot, it’s because that’s the kind of debt environment we now have:
Mortgage debt surged 4.2% to $9.19 trillion, still shy of the all-time record of $10 trillion in 2008 before it all collapsed.
Student loans surged by 6.25% year-over-year to a record of $1.36 trillion.
Credit card debt surged 8% to $810 billion.
“Other” surged 5.4% to $390 billion.
And auto loans surged 6.1% to a record $1.21 trillion.
And given how the US economy depends on consumer borrowing for life support, that’s all good.
However, there are some big ugly flies in that ointment: Delinquencies – not everywhere, but in credit cards, and particularly in subprime auto loans, where serious delinquencies have reached Lehman Moment proportions.
Of the $1.2 trillion in auto loans outstanding, $282 billion (24%) were granted to borrowers with a subprime credit score (below 620).
https://wolfstreet.com/2017/11/14/auto-loan-subprime-blows-up-lehman-moment-like/
I am certain that oil prices being a little higher now enter into the picture as well. The subprime borrowers are likely to be the borrowers who are “closest to the edge.” I small increase in the price of gasoline could upset the financial picture of these borrowers, especially if combined with some other phenomenon, like fewer hours working because of a hurricane.
Try to imagine one day the TV signal cuts out. “Standby”. Gunshots go off in the distance. You go to buy some groceries and some of the shelves are empty, then half of the shelves, then most of the shelves. Feeling hungry, desperately trying to grow a garden in the backyard at the last minute. Worrying about security constantly. You see an abandoned police car. People with guns riding by on bicycles hauling supplies in cart covered with tarp. You see a dead body on my way to look for food out in town. Eventually far right groups fill the social and political vacuum, then far left groups react. Then violence. Everyone has something to say and they’re shouting it on the unkempt street corners getting into fights.Can’t get on Reddit, can’t get on Google search – the mighty internet has fallen…
It is hard to imagine … normalcy bias gets in the way….
If anyone wants to imagine what this looks like I strongly suggest a quick visit to a place where this has happened – at least to some degree…
I’ve seen a Lite version of this in Jakarta during the financial crisis in 1998 — utter utter desperation – no vehicles on the highway – you kept the windows closed when you had to stop the car….
Then a taste in Haiti post quake — you definitely would not want to be wandering those streets after dark…
A sniff of this in Bahrain — locked down by the military with choppers buzzing and men with guns everywhere…
Bits and pieces here and there in various ghettos in Asia….
Finally Egypt during the riots — thousands of opposing forces hurling rocks at each other…. people being run down and having the sh..it kicked out of them…
Just one of those experiences will shatter normalcy bias… this stuff happens… it will happen .. and FAR worse when BAU goes down …. there will be no police – no military — nobody will help you when the bad guys show up …. humanity (don’t ya just love that ambiguous term … ) ….will no exist.
We won’t miss the internet or tee vee when this goes down … the news will be happening right outside you front doors.
try to imagine…
after The Collapse…
we all die and enter the nothingness of eternal death…
a few years or centuries or millennia later…
the extinction of the human race…
and a few billion years later…
the sun has grown into a red giant and annihilates the Earth.
so…
in that Reality…
what’s the big deal about The Collapse?
IC IC baby!
BAU tonight, again!
Dust to dust….
Humans can not live without illusions. For the men and woman of today, an irrational faith in progress may be the only antidote to nihilism. Without the hope that the future will be better than the past they could not go on.
-John N Gray
Honest nothing happen in my city
Try to imagine one day…that you’ve been so convinced of imminent collapse that you failed to plan for the future, initiating personal collapse. Instead of a dead TV, it’s chalk full of ads and programs, news, but suddenly the signal is lost because you failed to pay the satellite bill. So you go out to the store with the little bit of change you’ve got left and buy a newspaper. In it is a story about a baseball card that just auctioned for 34.5 million. It sold for that much because the rich just keep getting richer and competition between them is fierce for rare, special cards. You sit back on the couch which is about to be repossessed at any time and wonder how in the heck the world went on without you. A poignant, yet sad realization that so much life could have been had, only if you’d forgotten about things out of your control and instead simply went on about your business of living life to the fullest. Meanwhile the clock is still ticking so get in the game and score yourself a touchdown.
That is why one should continue dancing while the music plays…. but make sure to take regular breaks to smash back some good single malt whiskey… or a bottle of wine… or whatever…
Don’t worry about missing a few songs in the dance….
Interesting point.
Part of the reason my travels around the world have been possible is because I have realized that there is no point in saving what funds I have saved up from working as an insurance actuary indefinitely. It is either use them now, or don’t use them at all. If I am going to take a vacation, I make certain that we plan it for someplace where I might be able to learn something useful. And of course, some of my trips are paid for by groups who want me to come and talk.
I also don’t spend money on long term care insurance. I have figured that it won’t be there if I need it, anyhow. My husband and I are both in very good health now. What is the point? I don’t really want to live in a nursing home, anyhow.
Short-seller Jim Chanos adds to Tesla bet, predicts Elon Musk will step down – Reuters
http://www.reuters.com/article/us-investment-summit-chanos-tesla/short-seller-chanos-adds-to-tesla-bet-predicts-ceo-will-leave-idUSKBN1DE2NI
Good point Chanos makes!
chance to make big bucks shorting Tesla!!!!!!!!!!!!!!!!!
https://www.cnbc.com/2017/11/14/chanos-says-tesla-ticks-all-the-boxes-for-being-the-perfect-stock-to-bet-against.html
or just some good free entertainment, watching the train wreck.
Schadenfreude lives!
and…
47 days left in 2017 so…
BAU tonight, baby!
I see:
I especially like the statement, ” CEO with a questionable relationship with the truth.” It sounds a lot better than liar.
Dick’s Sporting Goods Inc. seems a little too eager to get the Black Friday party started.As far back as November 5, the chain was sending email blasts declaring “Black Friday NOW!” and promising up to 50 percent off certain purchases.
In a press release earlier this month, Dick’s trumpeted it would bring “the excitement and savings of Black Friday to customers earlier than ever this year.”In the current shopping environment, such a promotional strategy should only be seen as one thing: an act of desperation.
The earnings report Dick’s released on Tuesday made clear why it’s running scared. The retailer said same-store sales fell 0.9 percent compared to a year earlier, only the third such decline in eight years.
https://www.bloomberg.com/gadfly/articles/2017-11-14/dick-s-sporting-goods-earnings-shot-blown
Another retailer than looks to be going down.
DIcks might want to reinstate the sale of semi auto rifles. It might up their sales a bit.
I honestly don’t see how the local Dicks here in town stays open. No one in it…very pricey space…
Ours has recently expanded, and added “Field and Stream” to its logo. I haven’t been inside to see the changes needed. It didn’t make much sense, because Cabella’s opened a year or so ago, not too far away.
Gail, this guy cites you a couple of times.
: https://www.scribd.com/book/364164648
Thanks! This is the same report that Baby Doomer mentioned a day or two ago. It is, Peak Industrial Output and the Limits to Growth as a Consequence of Depleting Natural Resources by: Dr Simon Michaux (2017).
This is a report Simon Michaux put together for a company that burns trash to make electricity, I believe in Germany. The client had been hoping that fossil fuel prices would go up, making the operation more competitive financially; when prices went down instead, the client wanted to know if they should just forget the burning trash for electricity. (Or perhaps it is some other type of recycling, but it is definitely trash that they are using.) The report brings together a lot of things written by a lot of different people (including me) on related subjects. He is saying, in effect, we still have a major problem. It just doesn’t look like it right now. Don’t give up now. Keep on with your operation of burning trash.
I have corresponded with Michaux a little; I have never met him in person. He brings some insights from a slightly different direction; in particular, he has been involved with mining and depletion of minerals. The report has quite a few interesting things in it.
The food pantry I help with once a month gets a lot of donated food from stores. This food is not expired. I expect the stores giving the donations include Walmart. With these give-away programs to the poor, it is hard to see why this happens.
This was on reddit, and is a bit out of context. As I understand it, a tornado caused a power outage. Long story short, they’re afraid to give it away for fear of being sued.
Over half the food in the US goes in the garbage. Supermarket dumpsters are highly secure in my area. They have steel chutes attached to secure areas of the buildings, and are locked behind high walls and barb wire fences.
Folks, this ain’t normal-Joel Salatin
Food in the garbage presumably eventually goes to other creatures.
Countries without refrigeration lose more food than we do to “pests.” We really don’t have the right to eat 100% of it. Quite a bit of it (more than 50%) should go to other creatures. But we have convinced us that if we have planted it, and used weed killers to keep other plants away, we would have the right to eat it. If nature’s original way were followed, we would only get the little bit that we “hunted and gathered.”
Dumpster Diving is apparently going to be an exhibition sport at the next summer Olympics… if there is a next summer Olympics…
http://robgreenfield.tv/wp-content/uploads/Rob-Greenfields-Guide-to-Dumpster-Diving-9.jpeg
Pretty sure that they will be in the fuel pool known as Japan
I always enjoy the idea of the original human hunters finding a predator nibbling on its victim, and then hanging around until it had eaten enough and didn’t want to fight over it, and then chasing it off and taking what was left.
That’s our proper place in the scheme of things, eating Nature’s left-overs.
Soon, however, we may all end up as Nature’s main meal.
“Food in the garbage presumably eventually goes to other creatures. ”
I don’t think so, but know very little about it. The land fill is lined with very heavy plastic, and they put pipes in for the off gassing. Micro organisms decompose the food waste, and some birds would pick at it. There’s a lot of salt in that stuff, but otherwise it would make great top soil. Problem is that it’s a soup of all the other stuff in the landfill, so I presume that most of the energy in that food is dissipated to the atmosphere in the off gassing. That’s the way I see it.
Some microorganisms can live, at least for a while.
I suppose that the extent to which animals can use it varies a lot. We always see pictures of people in poor countries, picking through landfills to find food and things they could sell. I am sure that animals could get some as well.
In other countries, it depends on how sophisticated the installation is. If it is “just landfill,” then animals could get to it. If the owners want to collect the gas from it, then it loses something. In some parts of the world (Europe, particularly) as much trash as possible seems to be burned. The purpose of this is to produce electricity, in some cases. The IEA calls one of its groupings, “Renewables plus trash.”
You and your global thinking 🙂
I have stopped giving to the food bank…They do not want pork and beans Spam is a NO NO I give everything to seniors housing it is a one stop drop and they say thank you.
Pingback: Mideast Turmoil: Observe the Oil, Observe the Cash | CENSORED.TODAY
SRSrocco about american shale oil, optimistic as usual :
https://srsroccoreport.com/u-s-shale-oil-production-update-financial-carnage-continues-to-gut-industry/
Selling off assets to offset operating losses doesn’t work as a long range plan.
Thank you Gail. That will be my go-to phrase when talking to anyone who insists that the
UK is doing well. That is a perfect description of the way the country has been run for many years. Although I suppose when asset values collapse it may not have been so stupid- we gained a few more years of good living or at least some of us did.
Pingback: China 2015 |
U.S. SHALE OIL PRODUCTION UPDATE: Financial Carnage Continues To Gut Industry
https://srsroccoreport.com/u-s-shale-oil-production-update-financial-carnage-continues-to-gut-industry/#comment-53012
Right! Lots of people have been writing about the problems ahead.
Pingback: Mideast Turmoil: Follow The Oil, Follow The Money – VisionShare
I suppose below has been mentioned here already : About recent “moves” in KSA and possible realtionship with oil :
http://www.zerohedge.com/news/2017-11-14/mideast-turmoil-follow-oil-follow-money#comment-10652814
or direct source :
http://charleshughsmith.blogspot.de/2017/11/mideast-turmoil-follow-oil-follow-money.html
This article may well be right, and if it is, what would be quite Ironic is that MBS (the son of current king and actual ruler), has a “modern” image in Saudi Arabia (allowing women to drive, giving jobs back to saudis, “great” projects like new eco cities NEOM etc), and if the article is right, it means he will be the one slashing welfare and subsidies (on gas, even electricity is almost free today in KSA, as well as water even if 75% of it is desalinized using oil/gas energy for the process)…
Thanks! So Charles Hugh Smith is coming to a similar conclusion about the takeover, as I suggested was the answer to the Saudi announced cutback in oil production–they really have no option; their production is declining. It may be that this whole puzzle fits together. Selling off part of Saudi Aramco only makes sense if they can make more money by selling it than by keeping it.
It was nice of Charles Hugh Smith to mention me and to link to my latest post, in the original version of the article.
5. The only way out is to grab the power now that will be needed to slash domestic welfare and domestic consumption of oil/gas, i.e. the power to overcome resistance within the royal family to severe reductions in royal/central state budgets.
I am not buying that…
I am buying the theory that pro American elements in the KSA are being purged as the country recognizes there is no value in remaining under the protection of America (and the el ders) and pivots towards Russia and China…
Either way it does not matter — when you are running out of oil you are running out of oil… it’s all just rearranging the deck chairs…
Don’t think so, the USA/KSA alliance is too strong for that, maybe an “anti trump” purge somehow, for some of them, and Iran remains the focal point for the Souds anyway.
(plus 90% of KSA weaponry is still American anyway)
I suspect Trump is either an actor (as are all presidents)… or he is the front man for a faction that has teamed up with the Russians and Chinese (and now perhaps KSA) to kill the el ders….
Or one faction among the El-ders is gearing up to eliminate a rival faction. There seems to be a lot of stuff going down right now. Harvey, Kevin and the Hollywood set suddenly being called to account for some of their perversions, Netanyahu and wife under investigation by Israeli prosecutors for being naughty, Mr. Soros wanted by the criminal prosecution authorities in Israel and Hungary, the defeat of ISIS and the virtual victory of the Syrian Government in that country’s civil war, the twilight of Iraqi-Kurdish leader Barzani’s grip on power and of the Kurd’s most recent bid for statehood, the huge trade deal between the US and China, the public outing by Donna Brazille of the Clinton campaign’s stealing of the Democratic nomination from Sanders, this night of the long knives in KSA that has removed some of the Neocon’s favorite princes from the Grand Chessboard, and new Editors-in-Chief for both Vanity Fair and British Vogue!!
Some of these things are connected and others coincidental, obviously, but how many of them are being rolled out in concert?
Reminds me about what Turchin and Nefedof talked about in Secular Cycles. When resources got too tight, suddenly there was a lot of infighting among the ruling class. There didn’t seem to be enough to go around among this group either.
I too think there is a lot of infighting amongst the ruling class. Fighting over the scraps of what once was plenty. Part of the problem for the ruling classes may be that they have money but, they cannot buy what they want with it.
Good point!
I’ve heard talk from a conspiracy-theory type friend of how there’s a deeply planned shift of power, some wonderful force (possibly having to do with outer space…or somewhere, and something about Atlantis) is on the verge of displacing “the cabal”–Clintons, Soros, et al– that has ruled for however long. I don’t argue, thinking there is possibly a grain of truth as to the plan and the displacement. A better world is promised, which is certainly necessary, whatever bizarre trappings come with it. 🙂
Pingback: Mideast Turmoil: Follow The Oil, Follow The Money - Alternative Report
The US Shale Business is NOT PROFITABLE and can’t fund itself whether oil is at 100 or 50 dollars a barrel
https://imgur.com/a/Ash9T
I thought Permian Shale was doing better that the others. Maybe it is Permian conventional that I am thinking of.
I see oil prices are down over 2% today, after the IEA issued a report lowering its demand forecast for 2017 and 2018.
The Wall Street Journal reports, Oil Prices Slide Amid Clashing Demand Outlooks IEA lowers its forecast; OPEC raises its price.
There is another article specifically on the IEA report. https://www.wsj.com/articles/oil-price-recovery-threatened-by-weak-demand-says-iea-1510650001
Brent is at $61.48. So much for “heading for $70 per barrel.”
http://www.nasdaq.com/markets/crude-oil-brent.aspx
Weak demand raises its ugly head again.
It makes me happy whenever I read an article that identifies the role of “demand” in our finite energy predicament. It’s a big step forward for most people to realize that a healthy market only exists between the competing forces of supply and demand. Often supply grabs all the attention; while demand is unrecognized. But even when both sides of the supply and demand model are recognized the model leaves a lot to be desired.
Before being a loyal reader of Our Finite World, I did not understand the critical role of affordability in economics. Like many I believed that prices would always increase as supplies decreased. But what happens when people can no longer afford higher prices? This simple question reveals the weakness of infinite resource supply-demand models.
Models are supposed to be a mental construct that can accurately predict future outcomes. Our current models are failing to recognize the role of affordability to finite resources. That’s why so many recent predictions have been wrong about energy and the economy.
I would like to replace supply and demand with production and consumption. Supply and demand models assume an infinite ability to increase both supply and demand. Infinite growth cannot exist on a finite world. We can’t increase supply beyond the limits of the resource base by snapping our fingers or drawing charts where supply growth just miraculously rises off the top of the paper. We can’t increase demand by simply declaring that we deserve more or by having an emotional tantrum when our needs are not met. Production and consumption exist in the real world of finite resources. Both are just as limited as the underlying resource they depend on.
Also, I would like to insert the word affordable in front of production and consumption. Affordability effects both.
Production can’t be sustained unless it’s affordable. If a business doesn’t make profits it afford to stay in business. If a country doesn’t raise enough in taxes it can’t afford to remain a country. Affordable production is necessary for a healthy market.
Affordable consumption is the other half of a healthy market. Goods and services can only be bought by those who can afford them. People will always want more. But people will not always be able to afford more. Without rising wages you can’t have rising sustainable consumption.
As we approach resource limits the market contracts to the size of the resources that can be affordably produced and affordably consumed. No amount of market manipulation can change this. Attempts to alter this by increasing free and easy money supply only delay the inevitable and increase the destructive consequences.
Love to know what you think Gail, What would you add or subtract from my statements?
The place I would tend to disagree with you is at the very end. “Attempts to alter this by increasing free and easy money supply only delay the inevitable and increase the destructive consequences.”
The only thing we can possibly do is possibly delay the inevitable a bit. Free and easy money supply is part of this. “Increasing the destructive consequences” is not really for us to judge. If we are dead, we are dead; we are not “more dead.” Other species have been affected by our rapid growth rate for many, many years. If it is to be that some humans will survive, that will happen, one way or another. If not, the Earth and the Universe will rebalance without us. We are not the guardians of the rest of the Universe.
Thanks Gail, I will take my cape and Guardian of the Universe badge off now. Lol
Good post, Theo!
I grapple quite a bit with these issues of supply and demand, production, consumption and affordability, and I remain rather confused about their relationship to each other. I also tend to get mixed up about ohms, watts, amps and volts. So I would probably benefit from some refresher courses in economics and electrical engineering.
Regarding demand, at present I am demanding a lot of stuff, but to no avail as I can’t afford it psychologically. In other words, I suffer from the miser’s dilemma: I’d rather sit on my pile of pennies than spend them all on the things I want to have. Silly really, as the value of my hoard of may well plummet to zero before I get a chance to spend them. But visions of me sitting begging on the streets if I let them go keep me holding onto them.
My demand for a private jet is verging on resembling one of those petulant child in the grocery store take out who demands a chocolate bar and his mother refuses to fulfill.
I am beside myself with rage… at times I throw things… I scream… I cry … I sit in the corner rocking back and forth mumbling private jet… private jet… the neighbours have called the police twice know thinking I am beating Madame Fast…
Mental health professionals have knocked on the door as well with strait jacket in hand…..
I explain wide-eyed to them the huge hassle of having to fly from Nelson to Auckland… then onwards to wherever I am going … say Hong Kong… then another flight from there … sometimes two….
Am I unreasonable???? Well – am I!!!! How would you feel if you were trying to bucket list and time was short and the world was ending and you were held up in airport after airport waiting for connecting flights when you could be living f789ing large at your final destination????
They look at each other with that look … you know the look… that look that says this guys is f789ing nuts but not really truly nuts… then they tell me there is nothing they can do to help but could I please close the windows if I feel the need to throw another tantrum…
Oh I am sure they go back to the nut house and live off that story for weeks…. bloody buggers… swap spots with Fast Eddy and see how they feel!!!! Fast Eddy is misunderstood. Not respected even….
So as you can see my demand could not be more virulent …..my yearning could not be more intense… yet….. nothing….
Dear Mr FE,
Although I am only an amateur psycholigist, and an aspiring gynecologist, and have difficulty determining fantasy from reality myself, I believe I have a modern solution to your private jet fixation. Had I studied Freud I would have jumped to the conclusion that the private jet was a subconscious manifestation of unrealized desire for performance of a certain private body part of yours. Which will remain unmentioned.
No, fortunately we live in a time where we are not constrained by the miserly laws of reality and physics. Our great leader has shown us the photovoltaic light. I refer to none other than Mr. Musk himself. A man who’s immense ego cannot be contained in just one world. We must follow the green path he has revealed by the magnificents of his boundless imagination.
Every time our exalted leader runs into that pesky obstacle known collectively as reality, he simply dreams of greater grandiose visions. For example, when he fails to run a profitable company, he doesn’t bother to fix it. No, that would be to common for him. Instead he diverts himself, and his loyal worshippers, by promising even greater exploits. How about revolutionizing transportation itself by promising to transport people a thousand miles an hour in vacuum tube, or saving an entire country’s electric grid by providing renewable power, that is intermittent and many times more expensive than those boring, cheap and dependable fossil fuel grids. When those plans don’t work does he admit defeat? NEVER! Our glorious messiah simply promises life in another world. One where pizzas are delivered to millenials, who have never worked a day in their life, via hyperloop across a vast Martian landscape. Can you see the vision my brother?
Your demands for a private jet are reasonable and modest by Muskonian standards. All you must do now is conjure an even greater vision for your future. Possibly one that would include an Intergalactic Space Port with millions of private space jets transporting at light speed, the hottest women in the Universe to you Galactic Space Harem.
No Sir, you are not crazy. You have the potential of unlimited genius.
This first consultation is free. Future consultation will cost 100 Tesla shares of Two Bitcoins, whichever is greater. Best Wishes.
The thing is…
You are reading too much into my desire…. I assure you … it has everything to do with convenience…
As for Musk… he is not a real entity … well he is real in that he is flesh and bones… but he is no more than the front man for Tesla — he is not running the company — not so different than how George Clooney is the front man for Omega watches….
I can’t resist quoting some dialogue from the Mel Brooks directed movie, Dracula: Dead and Loving It:
Dr. Seward: Allow me to introduce Professor Abraham Van Helsing. He’s a doctor of rare diseases as well as a man of theology and philosophy.
Van Helsing: And gynecology.
Dr. Seward: Oh, I didn’t know you have your hand in that, too.
Lol
Electric cars’ green image blackens beneath the bonnet
Au contraire …………..
Read the whole thing
https://www.ft.com/content/a22ff86e-ba37-11e7-9bfb-4a9c83ffa852
“As more renewable energy from the likes of wind and solar displace coal in the electricity grid, the reductions will become greater.” – That is wishful thinking.. Just look at Germany for an example of what really happens. The reality is that solar PV and wind do not displace fossil fuels. For every new PV and wind turbine, more dispatachable fossil fuel power plants must be built to offset the indeterminacy. Thus, increasing the cost of consumer electricity. And if you want to add batteries to tame indeterminacy then that is another beast of fossil fuel consumption as well. There is no free lunch.
We are (fast?) approaching the stage when whether the lunch is free or not will not be the question.
What will be, is;
‘Is there any lunch today?’
In fact… because you end up with two power generating systems — solar and wind (which do not grow on trees) and coal or maybe nuclear to back them up … you end up with MORE pollution and much HIGHER costs…
But then a 7 year old could be made to understand this …
The FT is just doing its job — it is telling people what to think…. it is keeping them calm….
Just like Bloomberg is doing its job with the shale revolution discussion….
Everything is fine… we are transitioning to the a clean eternally prosperous world… don’t worry about your children’s future.. Elon has it all worked out…
Look away … NOW
https://qzprod.files.wordpress.com/2017/09/famine.jpg
Its amazing how the analysis stops at the mention of solar panels and windmills; its as if these things fall off trees.
The carbon-life cycle of these is lurking in the shadows behind the green facade. Take a deeper/wider look.
Solar panels… and EVs…. that’s a great formula!
The FT is on it! I am feeling more positive after reading that!!!
How the American dream turned into greed and inequality – World Economic Forum
https://www.weforum.org/agenda/2017/11/the-pursuit-of-happiness-how-the-american-dream-turned-into-greed-and-inequality/
This is a physics problem. If there is not enough energy to go around, greater wage disparity occurs. As a practical matter, this happens through technology and greater specialization.
I know that energy can be used a lot more wisely, but am told that this doesn’t matter, or that it works at the expense of something else, etc. But nothing that isn’t in pursuit of the beautiful can work for long anyway. . .
If you truly figure out a way to use energy more efficiently, the product will be cheap, so many can afford it. It will raise demand, and the total amount to energy consumed will be higher.
William Stanley Jevons
https://media1.britannica.com/eb-media/55/10655-004-71335B7F.jpg
Dear Mr. Jevons;
Correlation is not causation.
Please make a note of it,
Pintada
WS Jevons was also a proponent of the sunspot theory of economic cycles, for which he is still taken to task for by lesser minds. He shared this interest with British astronomer William Herschel, who had suggested a link between sunspots and wheat prices in 1801.
Jevons’s romance with statistical investigations unfortunately carried him to the most fanciful and, unfortunately, the most ridiculed idea of his life, the explanation of commercial crises on the basis of the periodic alteration of spots on the sun. The “sunspot theory” integrated Jevons’s earlier work on prices with his lifelong interest in astronomical and meteorological phenomena. In “The Solar Period and the Price of Corn” (1875), he put the matter succinctly:
“If the planets govern the sun, and the sun governs the vintages and harvests, and thus the prices of food and raw materials and the state of the money market, it follows that the configurations of the planets may prove to be the remote causes of the greatest commercial disasters.” (Investigations, p. 185)
Jevons’s meteorological research had convinced him that the sunspot period was 11.11 years in length. Parts of James E. Thorold Rogers’s great work, A History of Agriculture and Prices in England, had begun to appear, giving Jevons a source of raw data. But in 1875, Jevons did not believe that the information he had in hand justified a firm belief in a causal relation between sunspots and commercial activity. Still, in noting that the electric telegraph was a favorite dream of sixteenth- and seventeenth-century physicists, Jevons pointed out:
“It would be equally curious if the pseudo-science of astrology should, in like manner, foreshadow the triumphs which precise and methodical investigations may yet disclose, as to the obscure periodic causes affecting our welfare when we are least aware of it.” (Investigations, p. 186)
In 1878 Jevons returned to the subject of sunspots with renewed vigor, first in a paper to the British Association (“The Periodicity of Commercial Crises and Its Physical Explanation”) and then in an article in Nature (“Commercial Crises and Sun-Spots”). Jevons was convinced by new evidence that the duration of the sunspot cycle was 10.44 years instead of 11.11, a dating that more closely correlated with the commercial cycle of crises. The coincidence was just too much for Jevons, and he lunged to a conclusion:
“I can see no reason why the human mind, in its own spontaneous action, should select a period of just 10.44 years to vary in. Surely we must go beyond the mind to its industrial environment. Merchants and bankers are continually influenced in their dealings by accounts of the success of harvests, the comparative abundance or scarcity of goods; and when we know that there is a cause, the variation of the solar activity, which is just of the nature to affect the produce of agriculture, and which does vary in the same period, it becomes almost certain that the two series of phenomena, credit cycles and solar variations, are connected as effect and cause.” (Investigations, p. 196)
http://www.economictheories.org/2008/08/jevons-sunspots-and-commercial-activity.html
Jevons got some things right; other things, not so much.
Modern research into the link during medieval/early modern times times has lent support to Herschel’s and Jevons’s claims.
Two researchers in Israel have found a statistical link between the activity of the Sun and the price of wheat in seventeenth-century England. At the point in the solar cycle when sunspots were least likely, wheat prices tended to be high, report Lev Pustilnik of Tel Aviv University and Gregory Yom Din of the Golan Research Institute in Kazrin.
For a medieval peasant, this could mean the difference between life and death: bad harvests and famine were common; high grain prices sometimes triggered riots in Europe.
So, what’s changed since the Middle Ages? One big thing is that nowadays we have a globalized food supply and international markets, which means we don’t have to rely nearly as much on farmers in the local region getting good harvests. We also have insecticides, herbicides, fungicides, mechanized harvesting, artificial drying, refrigerated/air-conditioned food storage, etc. So we can handle the capriciousness of the weather a lot more successfully than the medieval peasants ever could.
The researchers suppose that in medieval England, high cloudiness – and therefore harsh winters and lots of rain – posed more risk than low cloudiness, as drought was rare. So they expect to see unstable wheat prices during periods of low solar activity. They looked at grain price records and at the amount of beryllium-10 in Greenland ice sheets. This isotope is produced by cosmic rays in the atmosphere and so is a record of solar activity.
For all ten solar cycles between 1600 and 1700, high wheat prices coincided with low activity, and vice versa. The probability of this happening by chance is less than 1 in 500, the researchers say.
Globalization of international food markets probably eliminates this effect in most of the modern world. But countries where agricultural production remains precarious and which cannot afford to import food in times of shortage could still be at risk of such a solar influence.
http://www.nature.com/news/2003/031222/full/news031215-12.html
And of course is we leave our time of globalization, this is one of the kind of cycles that we will need to become aware of again. Farmers somehow need to plan ahead, and grow sufficient grain in good years to have some stored up for bad years. They also have to prevent animals and insects from eating it before we need it.
I don’t envision using energy efficiently. I only consider using it rationally. I’m familiar with third world conditions that are very simple while growing more complex due to population growth due to a religion of progress. Third world people have a memory of the simple despite growing addiction to the complex.
Why did they grow in population? You have explained how providing a certain kind of housing could contribute to greater or less growth. I didn’t understand that before but I’ve been sure the planning of the built environment was an essential factor. So you have improved my understanding in a way that is consistent with what I had been thinking before. So the religion of modernism in its numerous characteristics–housing, lifestyle, efficiency, etc. had a role in increasing population. When missionaries go to Africa and insist on civilizing remote tribal people, they infect them with all the attributes of civilization that increase population. I know the prevailing ideology attributes that to the inevitable result of human psychology. Very well, let western people think so if they wish. Third world people might find it easier to think a different way.
To me, this religion of modernism and progress was due to cultural misunderstanding. I keep saying this like a broken record. The west has hit limits due to its religion of progress that the third world hasn’t hit in the same way. It seems like a cultural decision not to apportion the pittance of technology that could make third world ‘simple’ acceptable again. It’s like changing the religion of progress for something else. Maybe it’s because I didn’t grow up in the first world why I can’t understand why this is supposed to be impossible. The third world is the new standard for life style. If people prefer to die instead of adapting, that’s their choice.
I agree with you that we should be using the energy at our disposal rationally. And all around me I see all kinds of examples where this isn’t happening in my opinion. But in the industrialized world we’ve developed this economic system in which the rules of the game imply that any activity that involves the movement of money legitimately between individuals or organizations is good for the economy, regardless of whether it is of any tangible benefit to society as a whole. So consuming lots of alcohol, tobacco and junk food, gambling and commuting along congested highways in a two-ton SUV five hours a day are all considered good for the economy. And in a sense they are because those various activities help to support a lot of industries and provide a lot of other people with paid work. They are all vital sticks in the Leonardo dome we’re living in.
What the West did was greatly extend life expectancies, even in Africa. They did this by bringing better sanitation, and by bringing antibiotics, and perhaps a few other simple treatments.
The pattern women (and society) had learned in the past, of having five to seven children, so that two would live to maturity, no longer made sense. But the people did not understand this, and no one taught them this simultaneously. There might have been some chance that this pattern would have been taught, if more organized leadership were available, such as has been the case in China, and such as was the case when colonial rule was in place. But once this rule was gone, the West’s main concern was, “How can be make money from Africa, India, and all of the other “underdeveloped” countries?” More population was better. Telling the new rulers to stop having so many children was not politically correct. So no one explained to people that too much population would be a big problem.
They also didn’t explain to the people that importing nearly all of their country’s food is not a winning strategy. Certainly, it is cheaper. But it leaves most of the population without jobs. So the governments really cannot do much for their people. Africa, in general, does not have a cheap source of energy products. Adding solar is sort of a joke, unless the country’s highest expectation is having TVs in every home. It doesn’t bring jobs, as far as I can see, except for those who make solar panels and batteries. They tend to live in China and other industrial nations.
that summary fits neatly with the current chaos in Yemen
Currently they have to import 80% of their food, and that’s irrespective of their current war with saudi.
they cannot possibly buy it, because they produce nothing to buy it with, so like Syria, Yemen is also a dress rehearsal for our future.
Tim Groves,
I think I’ve already grasped what you’re saying…to a significant degree anyway. I hope the following makes a valid point to the effect that you can have your cake and eat it too. I have a problem with looking at the money system in a simple, isolated way. There are many other considerations that the money argument tends to ignore. Those, like energy that no one considers, ultimately affect the money system too. So I look at a typical mega hotel beach design, and comment about it (one with similar design issues) beneath.
https://www.google.com/imgres?imgurl=http%3A%2F%2Fres.cloudinary.com%2Flastminute%2Fimage%2Fupload%2Fc_scale%2Cw_470%2Fv1485868813%2Fnbu52q0o0tzcsxvvnlna.jpg&imgrefurl=http%3A%2F%2Fwww.lastminute.com%2Fholidays%2Fcyprus%2Fpaphos&docid=hMFRfn4N6l5A7M&tbnid=nxiVlLi6Rnv1TM%3A&vet=10ahUKEwi1-eCT_8DXAhUH0WMKHXSLDw04yAEQMwgvKCswKw..i&w=470&h=314&bih=666&biw=1280&q=nmega%20hotel%20beach%20scenes&ved=0ahUKEwi1-eCT_8DXAhUH0WMKHXSLDw04yAEQMwgvKCswKw&iact=mrc&uact=8
Depriving the beach of natural vegetation seems to be a cultural decision and not an economic one. You could argue that this bare-beach style is popular around the world, and is what tourists expect. I would argue that there are (admittedly fewer) examples of tourists enjoying beaches with their original natural vegetation. I could argue that this would be better for the wildlife and aesthetics, and that there are tourists who would like that too. I could also conclude that the mass culture mentality–treat people like cattle and cater to their basest instincts–is not a winning strategy over all, and can successfully be opposed. So no, thumbs down on this beach.
I was pointing to it as an insensitive design–huge environmental destruction, loss of local nature and beauty–not having anything to do with making money. I argue that you can train tourists to fit in with a more natural setting. I find that being sensitive means you consider more things, including innovative ways to cater to a diversity of income levels.
Pingback: Mideast Turmoil: Follow The Oil, Follow The Money – Wall Street Karma
Pingback: Mideast Turmoil: Follow The Oil, Follow The Money | Investing Daily News