Will China Bring an Energy-Debt Crisis?

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.

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.

 

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,825 Responses to Will China Bring an Energy-Debt Crisis?

  1. Mark says:

    So I googled ‘blast furnace’ and started learning. Never realized FF’s were used more than 2000 years BC. (coal/coke) In the beginning of the iron age. Stumbled across this, though it had a good point. (presuming we don’t go extinct)
    https://www.masterresource.org/coal-derived-coke/a-forgotten-case-of-fossil-fuel-dependence-the-iron-age-requires-carbon-based-energy-like-it-or-not/

    • Mark says:

      Edit: Well, the 2000 BC and origins are debatable, but it was in use in the 4th century.

    • the critical factor as the industrial revolution kicked off was that the steam engine allowed deep mining, a—to winch the coal up from extreme depths, but more importantly maybe, b—to pump water out of the mines

      without those inputs, sufficient coal could not have been mined to create our industrial society.

      • xabier says:

        Exactly, and I would add,

        c/ Even if exceptionally far-sighted people had realized where all of this would end – 21st- century Death by Fossil Fuels – there was no option of simply declining to pursue the new coal-based technology, as any state failing to do so would only be conquered by its European neighbours.

        France would certainly have taken Britain for its resources of coal and iron, and absorbed the British Empire, as the Germans later sought to take over Eastern Europe and the Mid-East as a resource base in the 1940’s.

        No possibility of putting the genie back in his bottle, or, even better, leaving him in there in the first place: ‘Let me out, and I’ll do whatever you want!’

        • as ive said many times—if rockefeller had printed OIL KILLS PLANETS on every tanker and fuel pump—we would still have burned it as fast as possible

          • Mark says:

            Thanks for the comments, I sent my brother one of your articles a few months ago with that reference as a follow up to a conversation that had turned doomish. He seemed to agree with it. But we’re not that close.
            Now if you will excuse me, I have some priceless vases to smash. 🙂

  2. MG says:

    Slovakia suffers a big shortage of truck and bus drivers. Where are the solutions of the autonomous driving. Too late?

    https://spravy.pravda.sk/ekonomika/clanok/449171-nedostatok-vodicov-autobusov-sa-prehlbil/

    USA has got the same problem:

    http://time.com/money/4070028/american-truck-driver-shortage/

    • JH Wyoming says:

      Passenger car drivers have gotten far more aggressive over recent decades (video game experts) making travel on roads at times very stressful. Truckers always complain about drivers cutting in front of them just as traffic slows on freeways as they require a certain distance to stop. It’s even stressful to drive a passenger car let alone a big rig in heavy traffic. So I’m not surprised.

      It also makes me wonder if when big rigs are autonomously driven if passenger cars will take advantage of that by constantly cutting them off, knowing the computer will give way.

    • you only need truck drivers as long as there is bau

    • xabier says:

      I have observed that there is no lack of and bankers, hairdressers and coffee servers.

  3. interguru says:

    I’ll leave the commentary to FE

    Yet today, less than a decade later, as we argue in the new book that we co-edited, “Infinite Suburbia,” the periphery remains the dominant, and fastest growing, part of the American landscape.

    —————————–

    More important still, the suburban areas have continued to grow faster than the more inner-city areas. Since 2010, the urban core has accounted for .8 percent of all population growth and the entire inner ring roughly 10 percent; all other growth has occurred in suburban and exurban areas. Much of this has been driven by migration patterns. In 2016, core counties lost roughly over 300,000 net domestic migrants while outlying areas gained roughly 250,000. Increasingly, millennials seek out single-family homes; rather than the predicted glut of such homes, there’s a severe shortage. Geographer Ali Modarres notes that minorities, the primary drivers of American population growth in the new century, now live in suburbs. The immigrant-rich San Gabriel Valley, the Inland Empire, Orange County and their analogues elsewhere, Modarres suggests, now represents “the quintessential urban form” for the 21st century.

    http://www.ocregister.com/2017/11/18/the-future-of-americas-suburbs-looks-infinite/

  4. Baby Doomer says:

    Thanksgiving help for the homeless: ‘We haven’t seen numbers like this since the Great Depression’
    http://www.latimes.com/local/lanow/la-me-homeless-thanksgiving-20171123-story.html

    • Our local university has programs to try to help all of the homeless college students. This is getting to be quite a big group. Some live in tents, in the woods on the edge of campus. Others try to sleep in lounges in buildings, if they are allowed to. Churches have been asked to contribute food to help these young people.

      • DavidinXyearswhoisa50somethingshorttermOptimist says:

        a story was on TV news recently…
        about a homeless college professor.

        it’s a largely unknown fact that colleges/universities are moving more and more away from tenured positions to mostly adjunct professors…
        thus many impoverished profs.

        • I have run into several people who are trying to make a living, teaching as adjunct faculty for several different universities at a time. They run themselves ragged, and hardly have time to prepare material for their classes. I guess I had heard about them being homeless. They generally have some other source of income, besides teaching classes for a single school (such as retirement pension, or working a “day job,” or teaching online classes for some university).

    • Fast Eddy says:

      United States of America/Population (1929)
      121.8 million (1929)

  5. MG says:

    The connection of the energy poor regions to the energy rich regions always happens in the direction from the energy rich regions.

    That way the latest railway connection between the Czech Republic and Slovakia was opened shortly before the WW2, in 1937, connecting the Slovak railways to the Czech railways in the district town of Puchov, Slovakia (at that time, the district town of my village) wellcomed by the masses of the Lutheran-Catholic valley, through which the railway passed:

    https://www.youtube.com/watch?v=l6ZBFPRHRyU

    Shortly thereafter, in 1939, before the start of the WW2, Czechoslovakia broke up (https://en.wikipedia.org/wiki/Slovak_Republic_(1939%E2%80%931945)). The same way, as it broke up later, in 1993, due to the energy reasons when the energy richer Czech republic and the energy poorer Slovakia separated…

  6. Fast Eddy says:

    Anyone who thinks this slow degradation of the economy can float like a feather down to zero… rather than collapse all at once at some point… may want to read this:

    Why will the Fed not allow even a small correction in the markets? DiMartino Booth says,

    “Look back to last year when Deutsche Bank took the markets to DEFCON 1. Maybe you were paying attention and maybe you weren’t, but it certainly got the German government’s attention. They said the checkbook is open, and we will do whatever we need to do because we can’t quantify what will happen when a major bank gets into a distressed situation.

    I think what central banks worldwide fear is that there has been such a magnificent re-blowing of the credit bubble since 2007 and 2008 that they can’t tell you where the contagion is going to be.

    So, they have this great fear of a 2% or 3% or 10 % (correction) and do not know what the daisy chain is going to look like and where the contagion is going to land. It could be the Chinese bond market. It could be Italian insolvent banks or it might be Deutsche Bank, or whether it might be small or midsize U.S. commercial lenders. They can’t tell you where the systemic risk lies, and that’s where their fear is. This credit bubble is of their making.”

    In short, the Fed does not know what is going to happen, and according to DiMartino Booth, nobody does. DiMartino Booth contends,

    “I don’t think any of us know what the implications are for a $50 trillion debt build since the great financial crisis (of 2008).

    It is impossible to say. We have never dealt with anything of this magnitude.”

    https://usawatchdog.com/fed-fears-new-record-high-credit-bubble-danielle-dimartino-booth/

    Then refresh with this:

    Skip to page 55 : This study by David Korowicz explores the implications of a major financial crisis for the supply-chains that feed us, keep production running and maintain our critical infrastructure. He uses a scenario involving the collapse of the Eurozone to show that increasing socio-economic complexity could rapidly spread irretrievable supply-chain failure across the world. http://www.feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf

    • Fast Eddy says:

      Then recall the legend of Mr Dumpty…

      https://michelleatplay.files.wordpress.com/2013/05/humpty.jpg

    • psile says:

      Of course most of us on OFW understand the ramifications of this enormous “everything bubble” popping. We have no choice but to keep pumping it up higher and harder, with all its bizarro consequences. But with each passing day, the point when it all blows sky high, gets closer and closer.

      • DavidinXyearswhoisa50somethingshorttermOptimist says:

        yes…
        closer and closer…
        but there are many other causes of death besides The Collapse…
        so it’s a race…

        does old age and/or disease get me first?
        or The Collapse?
        should be fun to see!
        bring on 2018!

        38 more days and 2017 will be in the books as Full BAU…
        then we’ll see about those next 365.

        • jupiviv says:

          It isn’t really a race, because from an eternal point of view all logically conceivable births and deaths are occurring at every moment. On the other hand if repeatedly proclaiming the existence of BAU for x amount of time in this blog wets your whistle, more power to you bruh.

          • DavidinXyearswhoisa50somethingshorttermOptimist says:

            and if commenting on my comment wets your proverbial whistle, then do whatever.

            “… because from an eternal point of view all logically conceivable births and deaths are occurring at every moment.”

            and if believing that statement wets your whistle, who am I to mock it?

            I’m aging, and we could ask an actuary about the chances for various causes of death.

            “it’s a race” is a metaphor, if you need clarity.

            The Collapse could be the indirect cause for many.

            or not.

    • It would seem who understands how interest rate affect borrowing would figure out that the combination of very low (even negative) interest rates together with easy lending policies is almost certain to lead to a big asset price bubble.

    • It must have taken some creativity to come up with this scheme and the methodology to carry this scheme off, week after week. I would worry somewhat about attempted retribution after the fact.

  7. Fast Eddy says:

    Look what we did to Libya!

    Bush was the Devil — Obama the Saint…. isn’t that incredible.

    A migrant looks out of a barred door at a detention centre in Gharyan, Libya, Oct. 12, 2017. Hundreds more like him are being kept in smuggler-owned Libyan warehouses, where they are sometimes beaten, ransomed or sold into slavery. Image source: Reuters via CBC Radio

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/libya%20slave1_0.jpg

    http://www.zerohedge.com/news/2017-11-23/libyan-slave-markets-create-diplomatic-storm-africa-un-security-council-meet

    • Tim Groves says:

      Let’s not forget that the Democrats were the party of slavery.

      • The Second Coming says:

        Misleading…
        https://en.m.wikipedia.org/wiki/History_of_the_United_States_Democratic_Party
        North and South pull apart Edit
        The crisis for the Democratic Party came in the late 1850s, as Northern Democrats increasingly rejected national policies demanded by the Southern Democrats. The demands were to support slavery outside the South. Southerners insisted that full equality for their region required the government to acknowledge the legitimacy of slavery outside the South. The Southern demands included a fugitive slave law to recapture runaway slaves; opening Kansas to slavery; forcing a pro-slavery constitution on Kansas; acquire Cuba (where slavery already existed); accepting the Dred Scott decision of the Supreme Court; and adopting a federal slave code to protect slavery in the territories. President Buchanan went along with these demands, but Douglas refused and proved a much better politician than Buchanan, though the bitter battle lasted for years and permanently alienated the Northern and Southern wings.[21]

        When the new Republican Party formed in 1854 on the basis of refusing to tolerate the expansion of slavery into the territories, many northern Democrats (especially Free Soilers from 1848) joined it. The Republicans in 1854 now had a majority in most, but not all of the Northern states and it had practically no support South of the Mason–Dixon line. The formation of the new short-lived Know-Nothing Party allowed the Democrats to win the presidential election of 1856.[20] Buchanan, a Northern “Doughface” (his base of support was in the pro-slavery South), split the party on the issue of slavery in Kansas when he attempted to pass a federal slave code as demanded by the South. Most Democrats in the North rallied to Senator Douglas, who preached “Popular Sovereignty” and believed that a Federal slave code would be undemocratic.[22]

        More of a cultural region divide.

        • Tim Groves says:

          True, but I couldn’t resist a partisan cheap shot. 🙂

          I suppose the same argument holds as a rebuttal to “the Democrats were the party of Jim Crow”?

          • The Second Coming says:

            Of course, Tim. You have a habit of doing it with other topics as well.

            • Tim Groves says:

              It’s just my conversation style. Everybody’s got one, apparently. And I know that admitting to having faults is only asking to be metaphorically hung upside down and beaten on the soles of one’s feet in many online fora. But when I think of how many nasty arguments I’ve avoided by resorting to a bit of self-depreciating humor rather than mounting my high horse and jousting every time I come across something disagreeable, I think it’s a price worth paying.

              Also, there’s a lot to be said for flippancy and levity as an antidote to the smug and pompous certainty with which quite a few people habitually present their views. I’m sure I speak unanimously on behalf of all of us in declaring that we wouldn’t want OFW to become as stuffy and stuck-up as the comments section of the Guardian.

            • The Second Coming says:

              Just a habit? Nope, its more than just a conservational style…

            • Tim Groves says:

              So it’s a habit, you say. And at the same time it’s more than a habit, you insinuate. Is it really? Feel free to psychoanalyze it all you like. We might learn something from your wisdom.

        • Tim Groves says:

          When the new Republican Party formed in 1854 on the basis of refusing to tolerate the expansion of slavery into the territories, many northern Democrats (especially Free Soilers from 1848) joined it. The Republicans in 1854 now had a majority in most, but not all of the Northern states and it had practically no support South of the Mason–Dixon line. The formation of the new short-lived Know-Nothing Party allowed the Democrats to win the presidential election of 1856.

          Does this mean that when the anti-slavery expansion Republican Party was formed in 1854, many of the Democrats who opposed the expansion of slavery left that party and joined the Republicans, leaving the remaining Democratic Party more strongly committed to expanding slavery than before? And after losing the Civil War, this same Democratic Party

          This is all very confusing. I don’t understand why the Democratic Party still exists given its racist and pro-slavery history.

          The Washington Post tried to “whitewash” (get it!) the Dem’s responsibility for implementing Jim Crow and for creating and sustaining the KKK in a very long and convoluted article with lots of graphs. But it fails convince, just at the Wikipedia “whitewash” The Second Coming linked to fails to convince, because the simple fact is that most of the people supporting Jim Crow for all those decades and most of the people who were in the Klan for all those decades were Democratic voters and often Democratic Party members, officials and representatives.

          “Blaming the Klan on modern Democrats is like blaming the Unabomber on the Montana Territory” says the Post. Not really—it would be like blaming him on the Green Party as he shared many of their views apparently. And one could add that it is like blaming Hit-ler on the modern Na-zi Party. Which would be a stupid thing to do, but it doesn’t mean that the modern Na-zi Party should be tolerated by decent people or that it’s members should be on our Christmas Card lists. (And for people who think Godwin’s Law invalidates such comparisons, we could substitute Stalin, Mussolini or Idi Amin.)

          https://www.washingtonpost.com/news/politics/wp/2017/03/01/blaming-the-klan-on-modern-democrats-is-like-blaming-the-unabomber-on-the-montana-territory/?utm_term=.d65e784f6fcf

    • Jesse James says:

      FE don’t disturb the mellinials. Reality clashes with what Facebook tells them they should be concerned about. So they “hate” Trump for how he treats wannabe immigrants. But let’s not have then get upset for a sovereign, citizen wealthy Muslim nation gets bombed into the dark,age and tens of thousand of people killed by US led forces.
      I have one friend who is an NPR idiot who insists that France and NATO destroyed Libya, and the US had little to do with it!
      The propaganda Reich is doing their job very well.

      • Tim Groves says:

        But Gaddafi spoilt his own people! That’s worse than gassing them in some people’s books. He was a guy who really spread the oil wealth, in stark contrast to the monarchies on the Arabian peninsula, where the real wealth stays in the extended ruling family and the poor make do with the crumbs and dregs through the miracle of trickle down economics.

    • Fast Eddy says:

      Funny.

      “We read this as a sign that financial deleveraging will be a multi-year theme and that deepening financial reforms are underway,” Nomura analysts said in last week’s note, adding that the market is pricing in maintenance of a prudent monetary policy stance.

    • Davidin100millionbilliontrillionzillionyears says:

      “China has been pumping a lot of cash into its system to lift market sentiment, as the world’s second-largest economy walks a thin line between curbing debt and keeping everything running smoothly.”

      also funny: “walks a thin line”…

      more like walks a tightrope across a canyon…

      this is the circus trick for 2018…

      cut back too much on debt and who knows?

    • The video seems to say that money supply probably continues to grow at 10%+, although the rate of growth is tapering.

      The country can continue to add infrastructure (whether needed or not) to increase its GDP. If an apartment cannot be sold, that is obvious to everyone. But little used roads and other unnecessary infrastructure are less obvious, and can keep GDP growing. Reminds a person of Japan.

      • JH Wyoming says:

        This whole bit of borrowing to spend to generate economic activity + growth has me fascinated from the standpoint of not having a clue as to where this money comes from. I mean is it all created out of thin air? Printed as they say? If so, is there a limit? Is this all possible because people are very good actors, i.e. acting like it makes sense when in reality its a form of cheating, especially when it seems to have no end…

        • xabier says:

          There’s a – partial – parallel process in the Contemporary Art market. The supply of old masterpieces is of course very limited, and many are in museums and will not come on the market unless revolution occurs (or be burnt when the mobs riot). – –

          In the Contemporary market, however, dealers, and those who try to rig the market (museum directors, critics, curators, etc) have the advantage of commissioning living artists to create new works which then become tokens in a speculative game – say, three large paintings to be offered at $1.3 m each at a big art fair, for which they were created to order.

          They call the artist a ‘rising star’, point to a historical rising trajectory in their prices, and see what happens.

          The price is simply plucked out of the air and has no foundation in real value, except that the purchaser is willing to play the art investment game with them.

          The perceived value is based, of course, on the assumption that no great economic crisis will occur, and at some stage that purchase can be redeemed at a profit, or will lose less than other possible investments.

          The painting itself produces nothing, and is very vulnerable to decay or damage – like a new real estate development that sits empty. In the meantime, commission is made on the transaction. The investor may have an asset to leverage in other ventures.

          All from something created from nothing, some wood, linen and pigments costing next to nothing, using the labour of an artist who is usually incapable of doing anything else.

          Is this honest or dishonest, or just human delusion and self-deception?

          • art is like gold—or classic car.

            valued according to rarity, and what people collectively agree their value is. There is a pleasure in owning such things, even though they are ultimately pointless.

            Which is why people pay $25m for a Ferrari that cost maybe $5k 40 years ago (representing the labour that went into making it)—the value holds only as long as other people have spare cash to ”invest” in the hope that such value will keep rising year on year. (when BAU ceases, then a 25m Ferrari wont buy you a loaf of bread.)

            It is a form of self deception, which we participate in

            • Mark says:

              What do you mean WE? 😉

            • all my comments are made in the context of collective humankind

              we are what we are–it is not possible to single out individuals as ”exceptions” to human behaviour.

              If you found a rare ming vase in a junkshop, and bought it for pennies then found it was worth millions—you would not look at it as just another piece of moulded clay—you would join the collective deception—either sell it or keep it, but to you it would be still worth a fortune because of its rarity.

              you might donate it to a charitable cause of course—but it would still retain its value.
              that would be your personal choice

            • Tim Groves says:

              I’m glad you cleared that little ambiguity up, Norman.

              There was I thinking you were an aristocrat of some considerable stature, sir.

            • well, i am

              but i rarely mention it in case my serfs rise up and become even more revolting than usual

          • Artleads says:

            Xabier, I have a blog that no one reads and that I use only to store information I find potentially “useful” and that almost certainly will not be retrieved, for a variety of reasons. All very hopeless really. But this explanation of the art world,for which I never had the stomach will be a valued part of my “hopeless” collection.

          • Tim Groves says:

            Last month, Paul Newman’s ‘Paul Newman’ 1968 Rolex Daytona sold for $17.8 Million, a record for a wristwatch at auction. Beforehand, the experts speculated that it might go for anything from $3.5 million to “8 figures”.

            The NYT adds:
            Although a modern Rolex Cosmograph Daytona costs $12,400 today, the models of the ’60s and ’70s cost about $250, and were little more than timekeepers for gear heads, featuring a built-in stopwatch for timing laps and a tachymeter for calculating speed.

            Newman’s 1968 model was a gift from Joanne Woodward, his wife of 50 years, when the actor became consumed with auto racing. The back was engraved, “Drive Carefully Me.”

            Newman apparently thought so little of this horological treasure that he gave his away on a whim. In a story that is quickly becoming a watch nerd’s version of Genesis, Newman casually handed over the watch to James Cox, Nell’s college boyfriend at the time, one muggy summer afternoon in 1984.

            “As far as he was concerned, it was a tool,” Ms. Newman said. “He definitely didn’t have a strong attachment to things.”

            In an interview, Mr. Cox said he was helping repair a treehouse on the Newman property when the blue-eyed actor approached and asked the time. “I said, you know, ‘a hair past a freckle,’ or some comment meaning ‘I don’t have a watch,’” Mr. Cox, now 52, said. “To which he replied: ‘Well, here, here’s this watch. If you remember to wind it, it tells pretty good time.’”

            https://static01.nyt.com/images/2017/09/03/fashion/02ROLEX3/02ROLEX3-master675.jpg

            The moral of this story: If you want to maximize the sale value of an object, tell a good story in which the object becomes unique and acquires emotional overtones, such as through association with a well liked or well known person or though an anecdote of some kind. Otherwise you merely have the object’s age, rarity, quality and current condition as sales points and those criteria alone aren’t nearly enough to take a 1968 Rolex Daytona to 7 or 8 figures at auction.

        • Think of “borrowing” as a promise to provide future goods and services made with energy. Promises come from optimism about the future. At some point, those promises cannot be fulfilled. There generally is no backing at all for the promises. Selling shares of stock in a new company is very similar to debt — has the same effect. A company issuing bonds to build a new factory is making a promise about the future; this is also true if the company goes to the bank to get the loan.

          Musk can promise to fly us to the moon, and to make cars that do marvelous things. This is a similar kind of promise.

          Governments can make promises of pensions for all of its old people, even as the number of old people increases and the number of young people (and the kind of jobs they have) decreases. We tend to believe these promises, because in a period of growth they were true. They cannot be true in a period of contraction.

        • Slow Paul says:

          Yes. It is all a trick to make the wheels go around. We, as a economic system, have an overarching goal of trying to dissipate all of earth’s resources. Money/debt is just numbers flying around trying to pin a relative value of stuff. A means for all this dissipation.

          A good while ago we had less debt since there existed more resources per capita. Things were plentiful and cheap. As we grow in population and resources get extracted things become scarcer and more expensive relative to most people’s money supply.

          There is less to go around, so we create more debt than ever with the illusion of growth, that we will have a more prosperous and brighter tomorrow, but the truth is that we collectively become poorer by the day.

  8. Davidin100millionbilliontrillionzillionyears says:

    WTI oil $58.37

    https://www.cnbc.com/quotes/?symbol=%40CL.1

    it can’t keep on rising.

    but powerful entities throughout the world want it to rise.

    of course, other powerful entities want it to fall.

    • Pintada says:

      Dear David;

      You said, “but powerful entities throughout the world want it to rise.
      of course, other powerful entities want it to fall.”

      You haven’t been paying attention. FE says that there is a committee of Jewish people in complete control of the world, and so you should have said, “but powerful entities throughout the world want it to rise, or fall – they can’t decide.”

      But you probably knew that,
      Pintada

      • Fast Eddy says:

        Actually … Zi onists… not j ew ish…

        “I care not what puppet is placed on the throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire. And I control the money supply.” Nathan Rothschild

        “Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. … Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.” — Mackenzie King, Canadian Prime Minister 1935-1948.

        “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” – Woodrow Wilson, after signing the Federal Reserve into existence

        “Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive that they had better not speak above their breath when they speak in condemnation of it.” ― Woodrow Wilson

  9. Volvo740 says:

    Happy Thanksgiving you all!

    Downsized to a Chicken this year.. Beer can grill/smoked recipe. Hope it turns out and is enough for 6 people…

    Good points Gail on the errors of the peak oilers. I agree that we can’t see the peak in the production curves yet. But I don’t think we can see the peak clearly until 5-10 years post the peak, and that’s only if they are honest with their production numbers!

    If we can’t have a functioning system with -10% oil, then that implies that we’ll go from 90% to some very low number fast. That must be the fast collapse scenario. Now, we’re well past peak energy per capita and that didn’t lead to fast collapse – yet.

    Personally I think the most interesting insights you have brought to the fore front is that the system can’t run in reverse. I.e. the 4 grand parents problem. It’s much less clear that we can’t have a steady state economy that that oil will peak. It will, or maybe it peaked yesterday?

    In some sense I think this is truly a fascinating time to be alive. I might see the beginning of the end of humanity! The odds that I’m the last man standing is 0 however, so I won’t see the end. My parents generation must be the luckiest ones – but some of them are still a bit grumpy about their meager pensions!!

    Cheers!
    Dinner time!

  10. Kurt says:

    Well, FE said it wouldn’t happen but here I am, sitting down to a nice turkey dinner.

    Happy Thanksgiving to Gail and everyone at ofw.

    Kurt

    • Happy Thanksgiving to all the folks in the US who are celebrating Thanksgiving. I cooked dinner for my husband, two sons and myself.

      • Ed says:

        Happy Thanksgiving Gail and family, my wife has after 36 years adopted a very relaxed approached to thanksgiving. I am having a great day hope you and yours are too.

      • JH Wyoming says:

        Enjoy the day my friends.

        • Fast Eddy says:

          Where can I find an native American? Are there any left?

          To celebrate I was planning to get a couple of these critters and drag them behind my pick up… along the interstate. Then I was gonna put on the football game and drink some Bud.

          Happy holidays!

          Has anyone noticed that the entire world now has Black Friday – the radio in the pick up keeps exhorting me to BUY MORE – everything is half price…

          I don’t celebrate Christmas but I seem to recall the massive sales happened on the day AFTER Christmas — boxing day…

          Another sign of how grim the situation must be for retailers

          • Yorchichan says:

            The number of people in the USA who currently identify as native American is far larger than the number of people living in the land that became the USA before Europeans arrived. So, the genocide was an abject failure (or some people are deluding themselves).

            • psile says:

              But there are far more canine Americans (78m) than Indians (5.2m). Oops, sorry. Native Americans).

            • A Real Black Person says:

              The Native Americans knew how to live in North America without fossil fuels. From what I heard, traditionally, this time of year, they were facing starvation because local food sources were scarce this time of year (I can’t remember the source.)

              Early European settlers did very poorly until Native Americans showed them how to survive during North American winters.

            • Fast Eddy says:

              I’m filling up the nearly two tonne 4 ba 4 pick up truck and heading to a mountain lake to go fishing tomorrow….

              Just two days… but it’s like AC DC going on tour…. buying this at one shop … and that at another shop… can’t forget the ice…. food… lighter… water… etc etc etc….

              I reckon I’d have no problem surviving when BAU blows out…. I have the organization skills and experience to coast through even the toughest times….

            • Jesse James says:

              I am supposed to,be 1/8 Cherokee. I happen to think like what I would like to think some native Americans once thought…that we are stewards of the land, that nature gives us and sustains life. That nature is meant to sustain us, rather than be depleted. We are temporary caretakers. Perhaps they thought that way. perhaps they didn’t. Or perhaps I am romanticizing how they thought and they were instead just struggling to survive. I think life has always been, and will,always be struggle.

            • Yorchichan says:

              Did the Europeans do some terrible things to the Native Americans? Sure they did (and still do by refusing to honour treaties). Mostly they stole their land and destroyed their way of life.

              The European diseases ravaged the Native American population when Europeans first arrived. I think these diseases killed 90% of the native peoples, who lacked the immunity to fight them. This meant Europeans found sparsely populated lands when they expanded across the continent. But there wasn’t a deliberate act of mass murder by the invaders that could be classed as genocide.

              I am supposed to be 1/8 Cherokee.

              I suspect none of the people who identify themselves as Native Americans now are pure blood. In that respect, the number of Native Americans has been drastically reduced.

            • Ed Kitto says:

              “The European diseases ravaged the Native American population when Europeans first arrived. I think these diseases killed 90% of the native peoples, who lacked the immunity to fight them.”

              Nobody cares what you think – how about some convincing evidence?

              You do know what Dirty Harry said about opinions?

            • it was a convenient coincidence of geology, geography politics and climate that provided the Anglo Saxon races with the means to dominate the world from about 1750 to 1950

              The industrial revolution was the ultimate driving force.

              If the industrial revolution had kicked off in China, or Australia,or Peru, then those people would have inflicted their culture/diseases on the rest of us. But that didn’t happen—so the dominant culture, for the time being is the one we have now, with English as the prime language—(very useful for doomsters too—imagine having to put all this over in Mandarin)

              we had iron ships and cannon—the rest of the world did not. It really is that simple. But look what happened in Japan—a medieval society until 1860, then with access to modern industry became a world power within 50 years

              But as I understand it, there was a period when Native peoples were shot on sight—whether in the USA or elsewhere. That seems like genocide to me

            • Fast Eddy says:

              Would it be acceptable to shoot DelusiSTANIS on site? Would that be genocide? I don’t think we can classify them as humans so this would be classified as extinction would it not? And we are very good at extincting non-human species.

              Which leads to the question of — if DelusiSTANIS are not humans — would it be ok to keep them in pens — and use them to make pet food? We could remove the rocks from their heads and sell them to garden supply shops….

              And is there anything wrong with holding events in the Rose Bowl involving feeding DelusiSTANIS to grizzly bears and tigers?

              Personally…. I would like to see DelusiSTANIS (post BAU) shackled to Tesla’s like pack animals… pulling war lords around … 1200lb batteries removed of course….

            • Yorchichan says:

              You require evidence that European diseases ravaged Native American populations? You are either stupid or a troll.

            • DJ says:

              Depends on which source for precolumbian pop you use. And how diluted todays NA are.

            • Yorchichan says:

              https://en.wikipedia.org/wiki/Population_history_of_indigenous_peoples_of_the_Americas

              The scope of the epidemics over the years was tremendous, killing millions of people—possibly in excess of 90% of the population in the hardest hit areas—and creating one of “the greatest human catastrophe in history, far exceeding even the disaster of the Black Death of medieval Europe”

              Best I can do at short notice.

            • Yorchichan says:

              If the industrial revolution had kicked off in China, or Australia or Peru, then those people would have inflicted their culture/diseases on the rest of us. But that didn’t happen—so the dominant culture, for the time being is the one we have now, with English as the prime language—(very useful for doomsters too—imagine having to put all this over in Mandarin)

              China possibly, but Australia and Peru definitely not. The diseases only work one way (cf Guns, Germs and Steel by Jared Diamond for an explanation as to why) and would have stopped any invasion of Eurasia by Australia or Peru dead in its tracks.

            • i really meant if those countries had developed as a fully functioning overcrowded society as europe was in the 17th c

              don’t forget the plague originated somewhere in the east, not the west

          • DJ says:

            We have had black Friday for a week.

          • another humbugger obviously

      • psile says:

        Wonderful. I hope it was a relaxing day with the fam.

    • Fast Eddy says:

      Kurt – that was metaphorical … kinda like how the bible says the earth is 6000 years old…

      • If you take myths as if they are intended to be read literally, then the bible says the world is 6000 years old. Otherwise, it doesn’t say anything about the Earth’s age.

  11. Fast Eddy says:

    http://www.zerohedge.com/news/2017-11-23/nfl-ratings-slump-worsens-espn-forced-slash-80-million-salary-costs

    In addition to people having no jobs… or low paying jobs… I wonder if the rabid dog passion for sports simply gives way to apathy in people who have fallen out of the middle class….

    Not only are they not paying to attend matches — they are not even bothering to watch on the tee vee….

    Who gives a shit if Washington or Dallas wins… . when you are fighting to put food on the table and make that car payment….

    Perhaps this is a symptom of mass depression and despair playing out across America …

    Rather than turning to pro sports for escape… one drops an Oxycontin….

    I can feel death now…. the beast is rattling the gate…. a bar is coming loose….

  12. Fast Eddy says:

    ‘American mercenaries are torturing’ Saudi elite rounded up by new crown prince – and billionaire Prince Alwaleed was hung upside down ‘just to send a message’

    Source in Saudi Arabia says American private security contractors are carrying out’interrogations’ on princes and billionaires arrested in crackdown

    Detained members of Saudi elite have been hung by their feet and beaten by interrogates, source says

    Among those hung upside down are Prince Alwaleed bin Talal, an investor worth at least $7 billion who is being held at Riyadh’s Ritz Carlton

    Arrests were ordered three weeks ago by Crown Prince Mohammed bin Salman

    Source claims mercenaries are from ‘Blackwater’, a claim also made by Lebanese president

    But its successor firm denies it has any operations in Saudi Arabia whatsoever and says its staff abide by U.S. law

    Americans who commit torture abroad can be jailed for up to 20 years

    http://www.dailymail.co.uk/news/article-5108651/American-mercenaries-torturing-Saudi-princes.html

    • Fast Eddy says:

      In Bahrain they use Pakistani mercenaries to put down protests…. can’t risk using the domestic military as they might refuse to kill their fellow citizens

    • Tim Groves says:

      The Washington Post on the Clinton Foundation in 2015:

      Of the Foundation’s 39 largest donors, who have given at least $5 million over time to the organization, 13 have made new donations in 2015. Those include the Bill & Melinda Gates Foundation, Canadian mining magnate Frank Giustra and major Democratic donor and longtime Clinton backer Haim Saban and his wife Cheryl.

      The April rules, instituted to guide the foundation while Clinton runs for office, dictated that the organization would take no new donations from foreign governments for the duration of her campaign.

      However, foreign individuals and companies have continued to donate.

      For instance, the organization is not currently accepting new donations from the Kingdom of Saudi Arabia, which has donated between $10 million and $25 million to the foundation in the past. However, a charitable foundation started by Saudi Prince Alwaleed bin Talal donated this year.

      Launched in 1997 to raise money to build former President Bill Clinton’s presidential library, the Clinton Foundation has grown into a $2 billion global philanthropy that works to combat climate change, alleviate poverty and bring low-cost drugs to the developing world. It hosts the Clinton Global Initiative, an annual conference in New York where private business executives, world leaders and non-profits gather to discuss how to solve global problems.

      https://www.washingtonpost.com/news/post-politics/wp/2015/07/30/amid-presidential-campaign-launch-clinton-foundation-reports-rising-donations/?utm_term=.3776be8501ce

      • Sort of ironic how the foundation works to “combat climate change” at the same time it “brings low-cost drugs to the developing world.” Hasn’t the foundation figured a connection between population and climate change? Alleviating poverty would work in the direction of increasing climate change also.

  13. Mark says:

    Every Thanksgiving, we all sit down, carve up a turkey,
    and celebrate the genocide and near extinction of an entire
    indigenous people. Pass the squash.-Morris Berman
    http://www.owscorvallis.com/mainstreet/wp-content/uploads/2012/10/Berman2.pdf

    • Fast Eddy says:

      Good ol Morris – is he still living in a shack in Mexico?

      To commemorate the day…. why not reenact the handing over of the resources of the North American continent … with exhibitions in town squares across the country of natives being shot/hung/scalped…. spit on …. then thrown into a ditch

      Celebrate victory with some blood!

      After all…

      • Fast Eddy says:

        Where are the snowflake Libtards today? Are they out on the streets protesting Genocide Day?

        What are they doing about the slave market in Libya — oh right — their idol Mr Obama with help from HRC are behind that…. so silence is the order of the day … cognitive dissonance reigns…

        F789ing idiots.

        All libtards should be presented with blankets soaked in small pox

  14. The Second Coming says:

    Just got to develop the waterfront properties

    — It’s no secret that South Jersey’s largest city is plagued by poverty, joblessness, and the blight and crime that comes with it.

    Quite simply, it’s not a place that many well-to-do people choose to live.

    But look out over Camden’s Delaware River waterfront and you’ll see a red brick building with a tower that continues to draw people who want to live in luxury to the state’s poorest city.
    The Victor has been between 93 and 100 percent rented ever since, Dranoff said.
    “It’s been a linchpin of the comeback of the waterfront. I’m very proud,” he said.

    He admitted it’s taken longer than he thought it would, but the waterfront area is now busy with construction crews building a headquarters for American Water. Next door, there are plans for an 18-story tower and a luxury hotel. Down the bank a little ways is the Philadelphia 76ers’ new training facility.

    So what is it about The Victor that draws middle- and upper-class people to live in Camden? Some could be paying a mortgage on a small house in the suburbs for the price of their rent at The Victor.

    A studio starts at $995. One bedrooms cost between $1,095 and $1,795 depending on the floor, the view from the windows, and other features. Two bedrooms start at $1,650 and three bedrooms can cost up to $1,995

    Asked why The Victor continues to draw and keep tenants, despite the city’s rough reputation, Dranoff numbered his answers as he listed them off.

    First is the beautiful view, then there’s the building’s historic character. Third is the “amazing floorplans” and the sheer volume of the apartments
    Fourth is the accessibility of transportation, including ferries, buses and trains, plus major highways and Philadelphia International Airport.

    Number five is its proximity to the hospitals and universities that call Camden home, and six is the beautiful waterfront, including walking trails
    http://www.nj.com/camden/index.ssf/2017/07/see_what_luxury_living_in_camden_looks_like.html

    The rich will always fine a nice nest to feather.

    • A Real Black Turkey says:

      The leadership in many organizations is staffed with them or those who identify as them. Many laws and policies, the most popular of which are those that encourage real estate bubbles, in their favor.
      Making money off land is one of the oldest ways of making money.

    • Third World person says:

      at one time it was greatest city in usa
      https://youtu.be/EEJLhcfaT4A

      • Jesse James says:

        In my community I see successful immigrants working hard, being productive and building a business. One Mexican family operated a tire business, living out back in a small trailor camper. Now they have leased the building next door, offering inspection and small repair services in addition to the tire business. I use them as a vendor. I respect their productivity, frugality and hard work and sacrifice, leading to future wealth. Notice that these values are the opposite of what our country has become.
        It is passe’ to State that this is something special because “this is what America” is all about. But immigrants accomplish the same in other countries also….Poland, the U.K. I would like to submit an alternate theory…that the successful immigrant in the current US is representative of a failing state. There are millions of people who refuse to work, indeed, even publicly state it in a number of ways. Working immigrants are not needed due to an expanding economy, but because many of the native people do not work. This is representative of failure as a nation rather than success.
        The harvest of what we have sown will soon come to fruition.
        Welcome to the productive immigrants. You will,have a failed State to rebuild one day….without cheap energy.

        • A Real Black Person says:

          “leading to future wealth” I wonder how they will react when their children don’t get the posh jobs they’ve spent money and time persuing with lengthy educations…

          “. Working immigrants are not needed due to an expanding economy, but because many of the native people do not work. ” The majority of people who don’t work aren’t suitable for work…and yes, many native workers won’t work for the wages immigrants will…because they won’t be respected by other native workers. The low wages that immigrants work for won’t lead to family formation for many native workers. Women, in particular will not settle for a low wage earning man. The wife of a low-wage earning immigrant in the U.S. will most likely see herself as middle-class because her standards are the standards of the poor country she escaped from.

          An immigrant who is productive, frugal, and earns a low wage is lionized
          whereas a native worker who does that,
          is seen as “a loser”…who cannot get a six-figure professional class job.

          From what I see, native workers, particularly if they are educated, cringe at stories of success that involve a lot of sacrifice. Success is suppose to leave you room to be well-rounded, and that means partaking in the many leisurely activities related to affluence; vacation trips, nice clothes, etc. Native workers like hard work but not hard work that involves deep sacrifice because it sacrifice suggests a lot of personal shortcomings, like coming from a bad family. At many elite firms, employers specifically screen out applicants who don’t seem to come from the right class.
          http://behavioralscientist.org/challenges-working-class-students-dont-end-commencement/

          Expectations and cultural standards account for a lot for different attitudes towards work.

        • Fast Eddy says:

          The inevitable outcome of ‘democracy’?

          The politicians who offer free lunches consistently get elected….

          • A Real Black Person says:

            “The politicians who offer free lunches consistently get elected”

            I think the founding fathers of the American Constitution foresaw that in advance and is why they limited democracy to people with property to “a stake in society”. Before them, the Romans sensibly did not extend democracy to slaves and women, who would undeniably vote for wealth redistribution policies no matter how unrealistic they are.

            Gail has made the insight that democracy is an expensive form of political organization…and that explanation explains why it has been a failure in poor countries. Without large surpluses, “democracy” and related things like “the right to arms” “empowers” different groups of people to fight each other, This is not good for social stability. In most places, before democracy and other wonders of modernism were introduced, warring factions were often evenly matched or there was a social order where everyone had a role and stuck to that role, even if that role carried with it a low status, because it was recognized that most people cannot be high status and therefore “live large”–and that purpose was more important than anything. There was nothing worse than a man without purpose. Gail has referred to this as “meaningful work.”

            • Fast Eddy says:

              Paris and Kim have a role in all of this…. when the masses see their role models making loads of money for doing essentially nothing (well… they did make porn…) … studying to become an engineer just seems so …. bookish… (and difficult)

              And nobody wants to appear bookish …. when the going gets difficult … the snowflakes melt… and ask mom and dad to bail them out….

            • Jesse James says:

              Imagine the staggering expense of our complex legal system. It certainly cannot be supported without cheap abundant energy. It will be back to “hang em high”

      • Mark says:

  15. Fast Eddy says:

    While in Baltimore City, Maryland, death and despair are a few things that are plentiful as the region descends into chaos. Deindustrialization coupled with depopulation started in the 1960s stripping the city of economic wealth. Many don’t want to admit, the city is shrinking as their looking glass is clouded with Kevin Plank’s gentrification narrative.

    Wealth inequality in the area is some of the widest in the United States with more than 100,000 African Americans with zero dollars to their name, according to JPM. Baltimore is a skeleton of what it once was many decades ago when it had its industries.

    Now, 46,800 homes are vacant– almost 16% of the housing stock as citizens are either leaving the area or being pushed into multi-family complexes by the city. Neighborhoods are rotting away as the local economy crumbles giving way to a surge in homicides. Baltimore is on track for the worse year ever with a homicide rate the highest in the United States.

    Baltimore is home to about 615,000 people, but the city has more homicides than New York or Los Angeles, both of which have far larger populations. Earlier this year, Mayor Catherine Pugh called in the Federal Government in hopes to restore order. She was even quoted, “violence in the city is out of control”…

    http://www.zerohedge.com/news/2017-11-22/out-control-genicide-baltimore-residents-support-martial-law

    https://orig00.deviantart.net/2297/f/2010/278/8/1/__get_wild_get_crazy___schrift_by_ephoras-d30572i.png

    Can we get some 24/7 live footage of this … I demand to be enterained

    • Yorchichan says:

      • I can’t help but think about the parallels to the Watts race riots of 1965. At that time, energy supplies per capita were surging. The standard of living of white people was rising rapidly. There was more and more awareness of the fact that the standard of living of black people had always been lower than that of whites. We seemed to have the capability to change the situation at that time, with all of our new-found wealth. This seemed to lead to the riots.

        Now, we have discord for the opposite reason. It is increasingly difficult to have enough goods and resources to satisfy the needs of the entire population. Jobs are sort of available, but they don’t pay enough to support a family on. They don’t pay enough to allow the holder of the job to afford a reasonable place to live, reasonable transportation to work, adequate nutrition, and healthcare. The systems that seemed to work in the past don’t seem to work any more. People (who are sometimes working three part-time jobs, and failing to adequately supervise their children) are becoming more disrespectful of police officers, regardless of their race. We again end up with race conflict, because current systems don’t seem to be working.

        • Yorchichan says:

          It does seem to me over my side of the pond that wage disparity is far greater over in the USA than in the UK. For a sole breadwinner in the UK with two children, any earnings over £13K are effectively taxed at 70% once loss of benefits is taken into account, resulting in reasonably equal net income for all but the highest earners.

          There is a story today on the BBC website about average earnings being forecast lower in 2022 than in 2008. This certainly ties in with my experience. Meanwhile true inflation is rampant. Even without the much predicted discontinuity, it won’t be many more years before the majority in the UK are choosing whether they want to heat their homes in winter or eat.

          • A Real Black Person says:

            UK , like many socialist countries, taxes heavily, but I really think the reason is that UK look less unequal than the U.S. is because it is borrowing heavily to provide more generous social safety net programs for its poorest residents.

            As it’s the case with the U.S.’ high corporate rate and revenue, I doubt that wealthy people in the UK pay the full amount of taxes they owe. I’m almost certain there is quite a bit of tax evasion, I remember reading about income inequality, which translates into social inequality , in Britain being a problem among the immigrant neighborhoods.despite Britain’s welfare system.

            I think UK’s situation is similar to the U.S., but admittedly, I can’t find a whole lot of information online to back me up.

            Articles like this don’t help.
            http://www.thisismoney.co.uk/money/news/article-4110482/How-rich-Work-income-wealth-sits-UK.html
            Of course, inequality decreases during a long recession, and of course, inequality will decrease when the largest growing portion of the population of a country are low wage earners who are recent immigrants.

            Maybe the lack of information means that all is well…or at least better than the U.S.

            Oh, wait, I found this. I almost forgot about it.

            https://en.wikipedia.org/wiki/2011_England_riots

            • Yorchichan says:

              Most benefits in the UK have been frozen for some time and even back in 1983 when I was able to get benefits over the University summer vacation they were a pittance. The amount a single unemployed person gets these days is totally inadequate at £72.40 per week to cover everything apart from rent. £10 per day would barely cover food from a cheap supermarket. For the unemployed, the signing on regime is also designed to be maximally degrading. Evidence of a certain number of jobs being applied for every week must be produced even if no suitable jobs are available, otherwise benefits will be stopped.

              25 years ago I lived on the edge of a black ghetto in the UK where there had been riots. I never felt threatened when walking through the area to get to work, although sometimes I was approached and asked what I was doing there (maybe because it was assumed I wanted to buy drugs). However, from what I have read and viewed, black on white crime in the USA is out of control and there are areas where I would not get out alive if I were foolish enough to enter.

            • Fast Eddy says:

              This is the sort of thing I am looking forward to — far more entertaining that NFL football… this is serious violence … burning looting smashing killing …

              Ever been in the middle of a full scale riot? The adrenaline pumps so hard it leaves you shaking afterwards … it also leaves you wanting more…. I can see why people become war junkies

              The thing is… we will only get to see the warm-up riots — the ones before BAU goes… once BAU collapses we of course will have no CNN… no internet …. so we won’t have a clue as to what is happening… except for the riots nearby…

              That said — I doubt when the rioting gets serious … the MSM will cover it…. they barely covered the UK riots …

              I suspect the end of BAU is going to be a colossal disappointment…. it will be more terror than excitement….

        • Fast Eddy says:

          This sums up the situation at the time:

          • A Real Black Person says:

            Ah…the politics of envy.

            • A Real Black Person says:

              Yorchichan says:
              November 23, 2017 at 4:59 pm “However, from what I have read and viewed, black on white crime on white crime in the USA is out of control ” It’s deliberately not reported or underreported for fear of offending people.

            • Yorchichan says:

              It’s deliberately not reported or underreported for fear of offending people.

              Yes, and it doesn’t fit the narrative that black people are victims of white racism when, in reality, the reverse is far more likely to be true.

            • Ed Kitto says:

              You could write for The Onion.

            • Yorchichan says:

              You couldn’t.

    • xabier says:

      Interesting: a dense population of stressed mammals leads to violence and suicidal impulses.

      Like the shrinking and then collapsing Roman towns: if only we could go back and observe them as they decayed.

    • Ed says:

      The lower order killing it self what more can we ask for. Go Baltimore.

      • Fast Eddy says:

        I could ask that they take this mayhem to Wall St during lunch hour…. now that would be exciting!

  16. Baby Doomer says:

    It really doesn’t matter if Shale oil reserves get exploited or not. Peak oil has passed. And this puts tremendous pressure on the entire system.

    -Scientist Dennis Meadows

    • Where is this from? You need a link.

      I would expect Dennis Meadows would qualify the statement somehow. For example, “Peak conventional oil has passed.”

      • Baby Doomer says:

        Whether or not new shale oil and gas reserves are exploited, peak oil and peak gas are past. This means tremendous pressure on the entire system.
        http://churchandstate.org.uk/2013/04/dennis-meadows-there-is-nothing-that-we-can-do/

        • Thanks!

          There are some things that I take for granted, for example, that “everyone” knows that oil and natural gas production have not peaked. But I haven’t shown many charts showing this directly. This is one showing the path of production of the three fossil fuels.

          https://gailtheactuary.files.wordpress.com/2017/11/historical-oil-natural-gas-and-coal-production-to-2016.png

          The general story of “peak oil” discussions is that M. King Hubbert forecast that oil production would turn down about the turn of the century (2000), but it persistently has not turned down. Peak oilers have said that the result would be scarcity and high prices. These things have not happened, so the group has increasingly been laughed at in recent years. The EROEI group and Dennis Meadows have to some extent been affiliated with the Peak Oilers. The EROEI group says that production will turn down when EROEI falls to low, and prices rise too high. This also doesn’t seem to be happening. The calculations of the EROEI group are to some extent behind the belief that wind and solar can save us.

          My views have been different from peak oilers. I have said that the problem is affordability, because of increased wage disparity. The problem is low prices that bring about falling production. This changes the shape of the curve dramatically, to be much steeper than peak oilers have assumed. It seems to me that coal production has peaked, but oil and natural gas production have not.

          You can see from the chart above the oil and natural gas production have not “peaked,” and certainly had not peaked when Dennis Meadows was quoted as saying that they had, back in 2012. So the statement is very strange. No one who had looked at the data would say this. While Dennis Meadows is not currently doing research, it strikes me very strange that he would say something that is so obviously false.

          I am fairly sure that what Dennis Meadows meant was, “Whether or not new shale oil and gas reserves, peak oil and peak gas are ‘baked into the system.” They will eventually happen.” Later in the article, he says, “Oil production will be reduced approximately by half in the next 20 years, even with the exploitation of oil sands or shale oil. It just happens too fast.” This is the statement a “Peak oiler” would make. I don’t think this is the way production falls. He also talks about high prices–another peak oil fallacy.

          I suspect that the problem is that this is the written version of an interview. We don’t have the words that Dennis Meadows actually spoke. I strongly suspect that “writer” Rainer Himmelfreundpointner did not really understand what Dennis Meadows was saying, and simplified what he was saying to a statement that was simply false. Meadows probably did not review the written version of the interview closely.

          • Fast Eddy says:

            Maybe he meant we have peaked on cheap to produce fossil fuels….

            FORMAT: cancer as a metaphor for uncontrolled growth?

            Meadows: Yeah. Healthy cells at a certain point stop growing. Cancer cells proliferate until they kill the organism. Population or economic growth behave exactly the same. There are only two ways to reduce the growth of humanity: reduction in the birth rate or increase the death rate. Which would you prefer?

            I prefer the uncontrolled cancer option …. all roads lead to collapse, starvation and spent fuel ponds…

            I prefer the longer road….

            • Niko says:

              Gail your methods walk in step with the ETP model and Tim Morgan’s ECoE SEEDS model. Both predict falling prices as the net energy or surplus energy going into the economies of the world gets less and less. The same can be said for wages being less and less.

          • bandits101 says:

            If you don’t think EROI is a thing, then you must assume that the increasing production gets to be fully utilized by the consumer economy.
            Heavy oil, shale oil, off shore, deep off shore, tar sands and arctic oil are NOT cheap, easy versions of oil production. Conventional depletion is real and is being replaced by much costlier versions. They are costlier because they require more energy to produce them….declining EROI. Energy is not free no matter what the version.

            The Moon might be made of oil but the energy consumed (a cost) to get it to market, would be more than whatever could be charged for the Moon oil.

            Simply declaring oil production is increasing does not tell the real story. A good example is ethanol or bio-fuels, which are included in all liquids. All they manage to do is add liquids to production but the energy, including oil that is required to get the liquids to market, appear to be ignored because you don’t think EROI is a thing.

            • There are some uses for EROEI that are sort of helpful–as a teaching tool, especially. I do agree that offshore oil has been more expensive to extract. But when you get to tight oil from shale, such as the Bakken and the Permian, the calculations show that it has quite a high EROEI. https://ideas.repec.org/a/eee/energy/v93y2015ip2p2191-2198.html There have been a number of incorrect statements about the EROEI of tight oil, based on the EROEIs of “shale oil.” Confusingly, shale oil is a totally different product, produced by heating kerogen at high temperature for long periods. This has a low EROEI. http://www.mdpi.com/2071-1050/3/11/2307

              It is very easy to think that a person knows more than they do, if they know EROEI. It is a model, but it is a very simple model. A simple model can be misleading at times.

            • Think of EROEI as being like a medical test that gives a lot of false positives. It sort of works, but a lot of times it gives the wrong result.

              Or think of EROEI as like measuring tops of icebergs, when the various kinds of icebergs you are looking at are floating at different levels, relative to the surface. You think you know a great deal more about the size of the icebergs than you really do.

              EROEI is a convenient calculation that keeps graduate students busy and allows a lot of academic papers to be published. I personally would rather know the full cost of the system in question, with all parts of the system included (including the taxes that the government requires to keep the system operating, for example).

            • Fast Eddy says:

              Case in point … KSA should be doing ok with oil at $60…. but when one looks below the surface and sees the entire iceberg… a different picture emerges….

              Council on Foreign Relations: Saudi Arabia’s Break-Even on Oil is Approaching $120 per barrel
              http://www.cfr.org/oil/fiscal-breakeven-oil-prices-uses-abuses-opportunities-improvement/p37275?cid=ex-cgs-oil_breakeven_discussion-levi_use-113015
              http://i.cfr.org/content/Breakeven_figure_Saudi_Arabia.jpg

            • Right. EROEI calculation only look at the energy involved in lifting oil to the surface of the well.

          • JH Wyoming says:

            “My views have been different from peak oilers. I have said that the problem is affordability, because of increased wage disparity. The problem is low prices that bring about falling production. This changes the shape of the curve dramatically, to be much steeper than peak oilers have assumed. It seems to me that coal production has peaked, but oil and natural gas production have not.”

            Yes, but hasn’t increased wage disparity taken place in part due to declining EROEI?

            • This is a link to an article I wrote back in 2010, talking about the likelihood of low prices. (I might be able to find earlier ones, if I look.) How Limited Oil Supplies May Affect Climate Change Policies. I talk about oscillating prices, with the high prices not staying high for long enough to encourage adequate production. Much of the time there may be low prices and a glut of oil supply.

              One reason for increased wage disparity is the fact that jobs leave countries with high energy costs (low EROEI) and go to countries with low energy costs (high EROEI). Think of US jobs going to China, because coal is high EROEI. So I suppose you might call this wage disparity taking place in part due to declining EROEI. Also, more technology is added to work around high costs, and this leads to wage disparity.

              I doubt that people who spend their time calculating EROEI of this and that would come to this conclusion, however. They don’t think of wages as having to do with anything, because it is “only money.” According to them, the “real” economy is energy, and (in their view) all we need to do is lump together all kinds of energy, over whatever time-period, and compared output to input. I think that much of the time the comparison is too “fuzzy” to say much at all. It sort of says something, but it is very easy to draw wrong conclusions.

              I would rather people talk about return on human labor, and how this is changing. (In other words, inflation adjusted wages of workers.) This depends on how much supplemental energy workers have at their disposal. Growing wage disparity also plays a role. This makes more sense to me.

          • Baby Doomer says:

            What he means is that conventional supplies peaked back in 2006 as predicted. And that shale oil won’t be able to make up for the depletion of our conventional supplies. And four years later that is exactly what the HSBC study said. And what the Saudi CEO is now saying as well.

            http://www.nature.com/nature/journal/v481/n7382/full/481433a.html
            https://www.research.hsbc.com/R/24/vzchQwb
            http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html

          • JH Wyoming says:

            “Meadows probably did not review the written version of the interview closely.”

            That’s a major problem these days as newer generations have to a great extent lost the ability to pay attention for long enough to closely analyze a complete written version. Everything is scanned for important parts vs. reading every word. They want watered down versions but the problem with that approach is it misses key words that change the meaning, sometimes 180 degrees.

            • Judging from the interviewer’s long name, and the fact that the interview was in Vienna, my guess that the first language of the interviewer was German. He may not have understood the fine points of what was being said. The story isn’t an easy one.

            • Rosenkohl says:

              Rainer Himmelfreundpointner is an experienced journalist, writing for magazines Profil and Trend. I guess the interview was done in english, perhaps Meadows didn’t read the german version before it was published. Anyway, Meadows seems to talk at Vienna regularly, in 2011 invited by Austrian minister for agriculture Nikolaus Berlakovich http://derstandard.at/1315005800815/Weltbestseller-Autor-Dennis-Meadows-Lebensstandard-wird-drastisch-sinken. According Meadows in 2011, Peak Oil was reached 2006 already. He said that oil price won’t grow beyond 200 Dollar and infinitely further: “I rather see a scenario like in war times – where not the market regulates the price, but the state regulates availability. So oil will be reduced, one can nolonger stroll with the car.” Similar will happen to natural gas, Russia will stop to deliver to western Europe. Meadows recommends heating with wood: “Take the catholic church. Monasteries have a century long experience in relatively autarkic economy, they have experience with forestry and think in longer periods than economists and politicians.”

  17. Ed Kitto says:

    Well, future microbe food: Morgan Stanley predicts the collapse Q4 2018 to Q2 2019.

    Not long to wait.

    It could be sooner as the US is in desperation mode as the Syrian adventure has unravelled. The US is doubling down by moving more materiel in.

    The US is strategically lost and appears to be going the Hail Mary route.

    • Tom says:

      ‘Morgan Stanley predicts the collapse Q4 2018 to Q2 2019.’
      Link?

      • Ed Kitto says:

        It was second-hand, original poster modified his position but I don’t think scaling down works as has been discussed here at length.

        https://www.reddit.com/r/collapse/comments/7egdnh/niall_ferguson_the_reasons_another_global/

        • JH Wyoming says:

          I think the fundamental reason for why 2007/08/09 happened has been addressed by the knowledge gained that relaxing qualification for loans leads to disaster. I don’t foresee the banks or any other lenders to go down that same road again.

          That said, there is the situation with too money being borrowed by countries to remain vital. I actually think what is happening will just continue to progress, and that is the wealth divide. In Venezuela the elite take boat rides and dance through the night while riots and unrest takes place in the cities. Why shouldn’t that same scenario play out all over the world? Look at what happened in the Depression – Some people did great and most did not, but it all kept going. That’s the nature of man – to keep going no matter what. It’s just going to be a very hard road for the masses.

          I use to think the masses would rise in the US like they recently have in Venezuela, but my thinking now is the masses in the US are too tame and out of shape to put up much of a fuss. They’ll take what they can and make it work, like they always do. Incremental changes over time are like the changing scenes of a dream, we just accept what comes next without questioning it.

          • The problems of 2007 to 2009 came from high oil prices, and rising interest rates intended to “fix” the high oil prices. These rising interest rates took down the “subprime” loans first. Adding many unqualified borrowers for homes was the approach that had been used in the early 2000s to try to keep the economy growing, despite rising oil prices. (In fact, it reminds me of China building lots of apartment complexes, and giving them to unqualified owners, now that it has been having problems.) https://ourfiniteworld.com/oil-supply-limits-and-the-continuing-financial-crisis/

            The wealth divide results from the physics of the situation. When there is not enough to go around, what is available in concentrated in a relative few. These people can’t really spend very much of their wealth, because they can only eat the same number of meals as everyone else, and can only sleep in one bed at a time. But they do have enough to live lavishly, compared to the many poor. (The sum of what the poor spend remains quite low–similar to the affordable resources that are actually available.)

            • Fast Eddy says:

              If I could be granted entry into this ‘few’ — I would promise to spend endlessly …. I would regularly drive through slums in a limo throwing millions of dollars out the window…. or better still… I would hire a chopper and sprinkle the cash from above….

          • Fast Eddy says:

            I know some elites from Venezuela … one of the guys used to go to the family business in an armoured car …. they have left the country — as have many of their friends….

  18. Fast Eddy says:

    Can we get some serious entertainment here… like Bill and HRC swinging from scaffolding with ropes around their necks? Let’s go pay per view with this — and bring in that ‘ready to rumble’ chap for the big show….

    http://www.zerohedge.com/news/2017-11-22/unsealed-fusion-gps-bank-records-reveal-523k-payment-russian-money-launderer

  19. There is a new Credit Swiss Research Report out called Global Wealth Report 2017. I was able to download it from this link.
    http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=DA9BD63F-A6D0-6CF2-95A732487B7D1E21

    I thought that the extreme differences among wealth by country were interesting. Look at Wealth per Adult in Column 5 of this table.
    https://gailtheactuary.files.wordpress.com/2017/11/household-wealth-by-region-credit-suisse.png

    There is also an an article called “Millennials are set to be the most unequal generation yet,” focusing on one aspect of the report. https://qz.com/1130126/millennials-will-face-worse-income-inequality-than-previous-generations-according-to-credit-suisse/

    • Mark says:

      This was from 8 years ago, if you havn’t seen it. It’s kind of like that chart illustrated.

      • Interesting!

        I think the missionaries of the world started the, “Let’s help people where they live,” movement, back over a century ago. That didn’t entirely work. The missionaries (and later people who followed in their footsteps) worked on sanitation and basic medicine, such as antibiotics. This helped population increase. They should have included birth control in the mix of services they offered.

        If the poor of the world are going to live like the West, they really need to ramp up their fossil fuel usage. I don’t see anyone proposing that solution. Another non-solution would be to cut down more trees, and burn them, to provide fuel for more industry for these people. We are running short of fixes.

        • Artleads says:

          Abortion facilities and putting women at least on par with men would have helped. People don’t have to live like the West. (The West doesn’t have to live like the West.) For instance, you can greatly expand urban settlement without paving roads and depending over much on cars. Beside, third world people are predominantly working class–good at working with the hands–and able to make things locally. The rest are used to growing food. The norms of the West are not really the only way to do industrial civilization..

          • We are faced with total resources per capita that are not growing. The only way undeveloped areas can grow is if developed areas become “less developed” — for example, fail to keep some of their roads paved; stop educating their children as much; accept more wages disparity, so a lower share of the population can afford what have come to be known as basic necessities. In fact, we are experiencing some of those problems already, and it makes the people whose standards of living fall, very unhappy.

            If energy resources were a lot cheaper, and for that reason a lot more affordable, then we could talk about your ideas as working.

            Edit: Regarding abortions, it is not clear to me that there is a strong understanding that limiting population is a reasonable goal. They know that having children can to some extent help the family income (if the children can be put to work), and will help protect the parents in their old age. Unless governments can put together (phony) systems that claim to give benefits in retirement, the “pension” benefit of children is very important.

            • Artleads says:

              Thanks. i see your point about abortion in the third world. That clarifies things.

              I’m not so clear I’m on the same page regarding a “less developed” first world.

              — “for example, fail to keep some of their roads paved;”

              I hear of it being done in parts of the US (you might have posted that) to save money, and not necessarily in location or at scales to cause widespread disaffection. I see it as a gradualist program, implemented slowly and according to where it works best at the time.

              — “stop educating their children as much;”

              It’s not the quantity but the type of education that I see as key. Having teaching credentials and taught for years, I know that curricula is incredibly foolish, pointless and wasteful. Just as a small example: children need to learn how to grow food, repair buildings and machinery, use hand tools and primitive makeshift ones. They need to learn good design. They need to read, let’s say, a half dozen great classics, as well as be familiar with a few classics among the arts. The kids I know of would be fairly well motivated, given such a curriculum. Nothing fancy or expensive, using ordinary skill/knowledge providers beyond the classroom.

              — accept more wages disparity, so a lower share of the population can afford what have come to be known as basic necessities”

              You mean that the haves have to accept less in order that the have nots can have more? The haves have been becoming have nots at a very rapid rate, so some of the equalizing transition is happening organically, not through a deliberate government policy. People seem able to accept this kind of transition better. A lot of it seems “cool” to the younger set, who (for example) are attracted to the slum scene. A LOT more could be done through culture to ease this kind of transition.

              — “In fact, we are experiencing some of those problems already”

              That’s consistent with my points.

            • My point is that if one uses more, the others must us less. This is why people are so upset about immigrants. If they come in and get jobs, the people who were already in the country get upset. They don’t get jobs.

              The same problem exists, even if people are in different countries. Once energy supply is no longer growing on a per capita basis, (and it no long is growing on a per capita basis), then if one uses more, others must use less. I was trying to give some examples of how others might need to use less. We now have a “zero sum” game.

            • Artleads says:

              I don’t know if it’s possible to underplay abortion availability at women’s clinics. Never talk about it, but it’s there when required. I do think, that among the extreme range of third world women, there are many who want to live their own lives and not be stuck with unwanted children.

    • Ed Kitto says:

      From wikipedia:

      The content of Palahniuk’s works has earned him a reputation as a nihilist. Palahniuk has rejected this label, stating that he is a romantic, and that his works are mistakenly seen as nihilistic because they express ideas that others do not believe in.[36]

      Laura Miller of Salon.com wrote a scathing review of Diary, saying that Palahniuk’s books “traffic in the half-baked nihilism of a stoned high school student who has just discovered Nietzsche and Nine Inch Nails” and that “everything even remotely clever in them has been done before and better by someone else.”[37] In response, Palahniuk (who had never responded to a review before) sent an angry e-mail to Salon’s Letters section. Palahniuk observed “Until you can create something that captivates people, I’d invite you to just shut up. It’s easy to attack and destroy an act of creation. It’s a lot more difficult to perform one.”[38]

      In Tasha Robinson’s review of Haunted in The A.V. Club, Robinson wrote that gruesome scenes are “piled up to such extremes that it seems like Palahniuk is just double-daring himself to top each new vile degradation with something worse.”[39]

    • xabier says:

      ‘Out of Darkness comes Light.’

      The Dark Night of the Soul is only a transitional stage.

    • This should fit in well with the “supply and demand” model used by economists. Based on similar principles.

      • Kanghi says:

        Ugo shared this, 65% decline in oil production likely by 2040. https://drive.google.com/file/d/1LHJA7HM4sFWBeXsmYy7420IpURQTpucB/view

        • Baby Doomer says:

          This world will burn….

        • an interesting link—thanks

          but the info on it seems to be concerned only with production, not with discovery of new oil (remember Athabasca and Bakken etc have been known about for 50 years–they are not “new” oil.)

          The chaos in the Middle east right now is a combination of climate change and oil depletion. Syria and Yemen used to produce oil for use and export, now they don’t.

          this will be our future problem, as oil depletion really begins to bite. The depletion will not occur everywhere at the same time—one oil producer will have oil while another will not.
          This will be dressed up in all kinds of religious and political nonsense, but essentially it will be struggle for resources in order to stay alive.

          One nation has oil—another does not, hence conflict;— bearing in mind that all wars are about resources.
          this will make the 2040 date a nonsense, because fighting in different areas will affect all the others as it increases in intensity—particularly as the truth dawns on the majority that the oilparty really is over. that conflict is happening now, it will engulf everyone long before 2040.
          Ugo puts it over as some kind of benign decline. But imagine when Canada (a cold country) realises that their oil and gas is in decline too—they won’t continue to sell it to the USA.

          What then? The USA demands BAU, but that can go on only so long as Canada and Mexico lets it.

          It won’t be like that at all, collective panic will see to that. And in this comment I haven’t touched on the effects of overpopulation or what climate change will really do to us. Ugo ignores that, or treats them as separate issues

          • xabier says:

            Make nations, and their governments desperate, and desperate measures will be taken.

          • Jesse James says:

            Climate is always changing.

            • it’s important to get that into perspective

              when the world had a few million people, and the climate changed over 000s of years—nobody noticed

              our situation right now is somewhat different

            • Tim Groves says:

              Norman, this is an answer I can sympathize with. A drastic change to hotter or colder or dryer or wetter or more erratic weather would do a a lot of damage to our complex society with its high population dependent on huge inputs of energy, food and materials and products of all kinds from all around the world.

              But a collapse of the world financial system is going to wreck our complex society regardless of whether the weather is clement or not, and my guess is that’s a “when” not an “if”.

              Personally, I would rather face a rougher climate armed with full BAU than face a benign climate while a systemic collapse is playing out, because BAU can ameliorate a lot of issues that would otherwise be fatal. Indeed, that’s a big reason why there are so many people these days. For instance, millions died due to the droughts in the Horn of Africa during the 1980s and 90s, but tens of millions were saved due to international aid. But after BAU, international aid will not be on the menu any more. The starving will have no recourse to to the UN agencies or the court of public opinion. They can’t expect the governments of their countries to buy food and ship it to where it’s needed. Basically, in time of famine, help from over the horizon will not be available.

          • Greg Machala says:

            “One oil producer will have oil while another will not.
            This will be dressed up in all kinds of religious and political nonsense, but essentially it will be struggle for resources in order to stay alive.”

            I agree. That is about what has been happening in earnest since about 2000. We are deep into distress now. Ugo speaks as if resource troubles will occur slowly over the 2020-2040 time-frame. What he doesn’t seem to understand is the resource wars began in earnest around 2000 and our predicament will stretch across the 2000-2020 time-frame.

            • i agree except for the dates

              ww2 was a resource war—japan and germany had to thrust outward to grab oil, or face certain defeat

              the usa had more oil so defeat was inevitable

              the usa is now in the same predicament, running short of oil

            • I think Ugo must have compartments in his brain. He doesn’t seem to see important connections between the pieces. How about the Seneca Cliff?

        • Ugo doesn’t understand the financial problems that would arise very quickly from a sharp decline in energy production.

          He (and many Peak Oilers), seem to imagine that prices will rise, the whole system will stay together, and we can get the last little bit of oil out. All we need to do is make do with a little bit less.

          • Greg Machala says:

            Ugh == Ugo must be a Freudian slip. LOL.

          • Volvo740... says:

            Peak Oilers may have been wrong on some aspects of “the system”, but I think they should be given credit for bringing attention to this critical resource. Money and finance are artificial constructs that you can’t eat or won’t warm a house. I think the intersection between the real world and the financial world is what’s most interesting and what attracts me to this blog.

            I hope that I get to live another 20-30 years in reasonable conditions and with some freedom of movement, but there are no guarantees. I guess I’m hopeful that even with 40% less fuel there is something for me, but I don’t know.

            But this world is already coming apart. Irak used to be a place with Universities and you could visit. No more. Even though I haven’t been there most of ME is off limits for me.
            CCCllliiimmmaaattttee: I’m loosing interest in it. (But not the scams.) I think it’s unsolvable. It may lead (is it already?) to a world wide hunger and starvation, but I don’t think there is anything we can do. Not even “collapse now” would alter the trajectory IMO. I think all world leaders understand this.

          • xabier says:

            Ugo Bardi is very human – he simply doesn’t want to look int the darkness, hence his weaving of PV transition fantasies.

            No doubt he wishes to think cheerfully of the lives of his children and grandchildren, that’s very understandable.

            • Fast Eddy says:

              A lot of people who understand the problem …. fail to understand the implications… or do not want to understand the implications…. understanding and acknowledging takes one to a very dark place… most people do not want to go there… cannot go there… without potentially dire consequences to their mental health

            • Volvo740 says:

              Great idea to bring some doom conversations to the table this holiday!

              Help some of your family members out by reminding them how f**ed we are.

            • i too have grandchildren, so far 3 out of 7 have made the national press with their creative successes and i feel immensely proud—how can i say they are just helping people to burn finite energy to pointless end.

              they see their lives racing on to even better things, and grandad as writing his ravings into endless nothings while they make money at what they do

          • yet Ugo is undoubtedly a brilliant man—this is maybe more troubling than if his mind was of the ordinary variety—it clearly is not

            With stupid people you can just shrug and say ”stupid” with Bardi you can’t do that

        • psile says:

          We’ll never get that far without cracking up. A mere 4-6% decline should be more than enough to cook our goose.

  20. Fast Eddy says:

    Here are his 15 bullet points that show why in 2017 we may have seen the biggest bubble ever (and why we can’t wait to see what 2018 reveals).

    Da Vinci’s “Salvator Mundi” sold for staggering record $450mn
    Bitcoin soared 677% from $952 to $7890
    BoJ and ECB were bull catalysts, buying $2.0tn of financial assets
    Number of global interest rate cuts since Lehman hit: 702
    Global debt rose to a record $226tn, record 324% of global GDP
    US corporates issued record $1.75tn of bonds
    Yield of European HY bonds fell below yield of US Treasuries
    Argentina (8 debt defaults in past 200 years) issued 100-year bond
    Global stock market cap jumped1 $15.5tn to $85.6tn, record 113% of GDP
    S&P500 volatility sank to 50-year low; US Treasury volatility to 30-year low
    Market cap of FAANG+BAT grew $1.5tn, more than entire German market cap
    7855 ETFs accounted for 70% of global daily equity volume
    The first AI/robot-managed ETF was launched (it’s underperforming)
    Big performance winners: ACWI, EM equities, China, Tech, European HY, euro
    Big performance losers: US$, Russia, Telecoms, UST 2-year, Turkish lira
    As Hartnett summarizes, “2017 was a perfect encapsulation of an 8-year QE-led bull market”

    http://www.zerohedge.com/news/2017-11-21/biggest-bubble-ever-2017-recapped-15-stunning-bullet-points

  21. Fast Eddy says:

    Grid-Scale Storage of Renewable Energy: The Impossible Dream

    Summary

    Wind + solar RE utopia often includes the concept of storing surplus supply for use at time of scarcity. It is an appealing concept. However, few politicians or their advisors appear to be aware of the scale and cost of infrastructure required.

    An analysis of wind + solar data for the UK spanning the whole of 2016 shows that 26 GW of installed capacity may be reduced to 4.6 GW of firm uniform capacity using 1.8 TWh of storage. The cheapest, though wholly impractical option, is pumped hydro energy storage, which would add at least £48 billion in costs. The 60 usable large PHES sites that would be required for this low level of RE penetration do not exist in the UK.

    Renewable energy storage is an impossible dream and will remain so until there is a major technology breakthrough.

    http://euanmearns.com/grid-scale-storage-of-renewable-energy-the-impossible-dream/

      • Fast Eddy says:

        I am laughing … and crying…. all at that same time ….. after reading that….

        You could force feed that information to a Green Groopy and he STILL would not get it.

        The typical response would be – ok there is not nearly enough raw materials to completely transition … so we just operate a greatly scaled down economy using what we have available…

        Trying to explain how that is not possible would be right up there with trying to explain astrophysics to a 3 year old…. you’d get a look of wonder and amazement then — where’s my mommy… I want my mommy — bwwwwaaaaahhhhh!

        • I think that they believe that there will be a great die-off in the first few days, perhaps due to not enough clean water. They seem to believe that the remaining few well-prepared people will be able to prosper, even if resources available are reduced. They also have faith that the financial system can be quickly fixed, and that high prices will insure that resource extraction will continue indefinitely.

          • Greg Machala says:

            This is the same kind of thinking that people use to explain why they don’t need a seat belt. When they crash they will brace themselves and be fine. LOL.

            • doomphd says:

              my father used to say that seat belts were unnecessary, because in the event of an accident, you want to be “thrown clear”. even as a kid, i used to wonder where and what i’d be thrown clear into.

          • doomphd says:

            the immediate aftermath will be the Scavenger Stage of Thompson’s “Twilight of the Mondern World”. that will last until the goods wear out.

          • Fast Eddy says:

            Yep – I know someone who believes EXACTLY that …. there are too many people — billions will die-off —- then those who remain will be living in a world of plenty … with no plastic bags … recycling… everyone will eat organic food … and so on …

            He truly believes there will still be iphones…. he read that in a book that predicted all of this…

            On the bright side… believing all of this keeps him sane… if I hint that this is not possible he goes silent — because he thinks I am insane… and negative

            • Greg Machala says:

              http://www.independent.co.uk/news/world/middle-east/morocco-food-aid-stampede-people-crushed-to-death-killed-sidi-boulaalam-essouria-a8065921.html

              “Fifteen women have died and at least five more taken to hospital with injuries after a stampede broke out during food aid distribution in the Moroccan village of Sidi ” This in a city of 8000 people. And, they were aparently not that hungry yet. Imagine what would happen if this were a city of millions of starving people!

            • i keep ranting on that these places are our dress rehearsal

            • Fast Eddy says:

              The sliver lining is that they ended up with 15 less mouths to feed…

            • Fast Eddy says:

              Doomy Prepppers…. I suggest you re-read Greg’s excellent point 5x…. then take an ice cold shower… and come back and read it 5 more times…

              Let it sink it… let it percolate…

              There is still time to enjoy what time is left and not spend it pulling weeds and spending all your spare cash on extra shovels and wheelbarrows…

              You can have that epiphany that reveals to you the futility of your project.

              You could then re-direct your doomsday funds towards living large while there is still life….

              You are wasting your time

              You are wasting your time

              You are wasting your time

              You are wasting your time

              AHHHHHH…. doesn’t that feel good to read that?

            • psile says:

              Yeah FE, you should try to be more positive, by expressing to people like him how positively f#7ed we are.

        • SymbolikGirl says:

          I think the Keener Greeners(TM) have a lack of imagination, especially of just how big the scale of the problem is. I work with one right now and he constantly sends me articles on solar and wind (and yet he works on the same projects as me trying to clean up poorly installed solar farms so he sees how they are a disaster without constant maintenance). I finally said to him last week ‘yes you can have your off grid DC-light-bulb and low energy fridge utopia for yourself and your family, but what about the other 7.5 BILLION human beings on earth? Where are the hundreds of thousands of Megawatts going to come from to run the Aluminum mills, steel mills, foundries, chemical plants and all of the other trappings required to build your green utopia?’ So far that’s shut him up.

          This is the problem we face in educating people on finite world issues, they only see their small slice of the world and since we as Westerners have become so detached from the production chain for the very necessities of life they have become some sort of taken-for-granted background magic that ‘just works’. People don’t seem to understand the energy required to mine the rare-earths and then process them and then move them to a factory full of near-slave laborers in China to build the components that go into their new smart phone (plus all of the waste produced in the process), they just see smart phones on the shelf at Best Buy (you know, the one with the three solar panels on the roof so it is ‘green’). Even food production has become mysterious for many, the number of people I have encountered who don’t know what a field of soy looks like or that most of the corn in those fields on the side of highway isn’t the same stuff you get at the roadside stand (I have some great pictures of people biting into feed corn!) is depressingly large, heck 99% of people don’t understand just how much land area, topsoil, petro-chemical fertilizer or diesel go into feeding just them for a year.

          • Very true!

            Having grown up in the Midwest years ago (and having seen some of the differences now), I understand the things you are talking about. Also, having read a lot of TheOIlDrum.com articles, in years past. But a lot of children now are raised in the city. They go to daycare, and hardly see anything outside beyond the playground. Schools focus on mandatory curriculum, which is not terribly helpful.

          • xabier says:

            Quite apart from not grasping the scale and complexity of global industrial (including food) production and transport, and the crucial role of fossil fuels,people quite regularly come out with nonsense like ‘Human needs are so simple, just food, shelter, clothing. If we’re less greedy, we can arrange that.’

            Take every historic pre-fossil fuel society, and they too had very complex arrangements -not just technology but also customs and laws – to ensure survival and provision of those so-basic needs. And they all lived on the edge of famine.

            The disconnect is just too great, not only from the present, but the past too.

            Better education would help, I suppose, but imagine how grim the classes would be…..

          • T.Y. says:

            This kind of disconnect happens far more often than anybody cares to admit, so it must be ‘baked into’ human psyche.

            I’m currently involved in preparing a quotation for a large scale infrastructure project that has such a “keener greener” as senior environmental advisor/manager. Whilst i’m an relatively young environmental advisor & biologist myself; the proposals that we are essentially force-fed to quote for are having an impact that is driving the price factor 3-4 higher than what would be required to simply do the job without much environmental controls. I’m not advocating no controls, but even i think this is losing sense of perspective. Even worse, some of the measures – whilst they look good & reasonable on paper – are practically impossible to implement because they have been inspired on small-scale pilot projects and are now being scaled up factor 50 or so. Whenever i try to qualify or exclude some aspects, it is flat-out rejected. So the only option left is to quote a sky-high price and pray to God that we get rejected. But just imagine that we are the only ones left for them to talk to, imagine they say “yes go ahead and do it for this price”. This is insane.

        • Volvo740 says:

          I miss his posts! Love the simple ways he lays it out.

          “Running a 2 TW electrified country for 7 days requires 336 billion kWh of storage”

          yeah baby.

      • I had forgotten about that post by Tom Murphy. He is great! Jacobson and Delucchi should be forced to read his paper.

        This is an excerpt, talking about the impossibility of even scaling up the cheapest known technology to provide seven days of battery storage for an all-renewables system:

        Putting the pieces together, our national battery occupies a volume of 4.4 billion cubic meters, equivalent to a cube 1.6 km (one mile) on a side. The size in itself is not a problem: we’d naturally break up the battery and distribute it around the country. This battery would demand 5 trillion kg (5 billion tons) of lead.

        Get the Lead Out!

        A USGS report from 2011 reports 80 million tons (Mt) of lead in known reserves worldwide, with 7 Mt in the U.S. A note in the report indicates that the recent demonstration of lead associated with zinc, silver, and copper deposits places the estimated (undiscovered) lead resources of the world at 1.5 billion tons. That’s still not enough to build the battery for the U.S. alone. We could chose to be optimistic and assume that more lead will be identified over time. But let’s not ignore completely the fact that at this moment in time time, no one can point to a map of the world and tell you where even 2% of the necessary lead would come from to build a lead-acid battery big enough for the U.S. And even the undiscovered, but suspected lead falls short.

        What about cost? At today’s price for lead, $2.50/kg, the national battery would cost $13 trillion in lead alone, and perhaps double this to fashion the raw materials into a battery (today’s deep cycle batteries retail for four times the cost of the lead within them). But I guarantee that if we really want to use more lead than we presently estimate to exist in deposits, we’re not dealing with today’s prices. Leaving this caveat aside, the naïve $25 trillion price tag is more than the annual U.S. GDP. Recall that lead-acid is currently the cheapest battery technology. Even if we sacrificed 5% of our GDP to build this battery (would be viewed as a huge sacrifice; nearly a trillion bucks a year), the project would take decades to complete.

        But even then, we aren’t done: batteries are good for only so many cycles (roughly 1000, depending on depth of discharge), so the national battery would require a rotating service schedule to recycle each part once every 5 years or so. This servicing would be a massive, expensive, and never-ending undertaking.

        • Greg Machala says:

          People just don’t understand the sheer scale of (and number of) problems we face!

          • Greg Machala says:

            I showed this article to a solar PV proponent I know. And he said that solar PV will continue to produce more and more energy every year until they can build themselves without fossil fuels. There is no reasoning with the unreasonable.

            • Tim Groves says:

              I think it’s worth seconding that with the full-length Tom Paine quotation.

              To argue with a man who has renounced the use and authority of reason, and whose philosophy consists in holding humanity in contempt, is like administering medicine to the dead, or endeavoring to convert an atheist by scripture.

            • Fast Eddy says:

              Or convincing a true believer in Geebel weeebel — who have been mesmorized by the MSM and swallowed the hook…. that this is a hoax aimed at misdirection from peak cheap oil.

              Hook…. trout… mountain … almost two days without internet…. Madame Fast has declined the opportunity to join … she is not keen to sleep in the open back of the 4 ba 4 on a foam mattress…

              What good will she be when we go Full Hunter Gatherer?

        • Tango Oscar says:

          Something like these would work for small scale storage and there is no shortage of sodium. That said, they are expensive and a house would require charge controllers, inverters, solar panels and a generator too. But we could run short elsewhere like copper, silver, or something else I haven’t discovered yet. http://aquionenergy.com/technology/deep-cycle-battery/

          I have 2 batteries on steel pallets for 2 houses at 56.8 kilowatts of storage; we can run both houses like idiots all day on a cycle or try and conserve to make it 2. When the other house is vacant we can run 3 days on a charge with zero sun. That’s all the modern things except strong power tools which I use a hand generator for. Furthermore we run these batteries down to 20% whereas our previous lead acid ones could only go down to 50%. Salt water batteries last twice as long too at 10-20 years.

  22. Fast Eddy says:

    The insanity grows…. and the moment of truth approaches….

    The Founders Series Roadster will cost buyers a $250,000 down payment even though it’s not coming for more than two years. Orders of those cars are capped at 1,000, meaning they alone could generate $250 million. Tesla is charging a total of $50,000 for reservations of the regular Roadster. Companies can also pre-order electric Semi trucks for $5,000, though they don’t go into production until 2019.

    “Whether they can last another 10 months or a year, he needs money, and quickly,” said Kevin Tynan, senior analyst with Bloomberg Intelligence, who estimates Tesla will be required to raise at least $2 billion in fresh capital by mid-2018.

    https://www.bloomberg.com/news/articles/2017-11-21/tesla-is-blowing-through-8-000-every-minute-amid-model-3-woes

  23. JH Wyoming says:

    https://www.washingtonpost.com/news/speaking-of-science/wp/2017/11/21/this-man-is-about-to-launch-himself-in-his-homemade-rocket-to-prove-the-earth-is-flat/?utm_term=.d0736f80e091

    Ok, we all need a good laugh from time to time and this one should have you rolling in stitches. This limo driver built a rocket he’s going to fly high in to get a view of Earth to prove it’s FLAT. I’ll let you read more if you like, but look at the trajectory of the rocket – looks like it won’t get very high.

  24. Here’s a fun little exercise for astute readers…

    Identify the following in the ‘logical’ arguments described below:
    1) What is A?
    2) Which specific OFW people would be likely to argue these syllogisms?

    Liberals believe in ‘A’
    Everything liberals believe is wrong
    ‘A’ is not true

    The MSM promulgates ‘A’
    Everything the MSM promulgates is a lie
    ‘A’ is all lies

    Ph.D scientists claim to have proven the existence of ‘A’
    Ph.D scientists are incapable of proving anything
    ‘A’ is unproven

    • i1 says:

      Corrupt data giga

    • jupiviv says:

      The ones who don’t understand that logic applies equally to everything, not just those things we choose to apply it. For example, it applies equally to both what liberals and conservatives say. Oh, and also those who don’t understand that ultimately we can only trust our own judgments about truth and reality, not what someone else says.

      • Jesse James says:

        Strange, but I didn’t realize energy had a political bias. Is oil conservative or liberal. Come on geniuses. Tell me.

        • Fast Eddy says:

          I support the party that demonstrates that it is willing to burn more fossil fuels – faster than the other party…

  25. Sven Røgeberg says:

    Hey Gail,
    My friend have installed Solar panels on his roof and is convinced that’s just a matter of time before renewables will rule the world. He regulary sends me news that shall make us believe that the energytransition is on it’s way. He asked me to ask you what you think about stuff like this: https://thinkprogress.org/solar-wind-keep-getting-cheaper-33c38350fb95/
    https://electrek.co/2017/11/16/cheapest-electricity-on-the-planet-mexican-solar-power/amp/
    https://www.theguardian.com/commentisfree/2017/nov/17/economic-prize-climate-change-action

    • The problem with these analyses is that they look at the cost of simply getting the variable renewable electricity from the solar panels. Our electricity system doesn’t work on variable renewable electricity. It needs a lot of adjustments, to make these solar panels work on the grid. The additional costs involved in adding this stuff to the grid are not included in any of the estimates you see. That is why these estimates are not really relevant for deciding whether solar electricity is helpful for the electric grid.

      If you want to use solar panels for something else, like desalinating water, they might be a good idea. You could set up your own desalination plant using solar panels, especially if you live in Saudi Arabia, or some other place that gets a lot of sunshine and very little rain.

      The solar panels might even be OK for adding a little electricity to places in India and Africa that are not on the grid. The people can have a few light bulbs, and charge their phones, using solar panels (assuming batteries are used as well).

      The studies that have been done have not considered the difference between using solar panels on the grid, and using them elsewhere. They add costs and complexity to the grid. They certainly don’t make the grid last any longer. People get confused, and think that the studies say more than the really do.

    • Fast Eddy says:

      Congratulate him on his DelusiSTANI passport. It gets him visa free access into all countries of the world.

  26. Baby Doomer says:

  27. SymbolikGirl says:

    Hey Gail, great article, easily one of my favorite in recent memory. I personally see 2018-2019 as being the time troubles for China and the Middle East. The US war-hawks are losing traction in the Middle East to Russia and Iran on a seemingly daily basis and the easily-manipulated Trump could very simply be steered into one final huzzah against the Shi’ite’s, especially when oil supply shortages rear their ugly head next year. I don’t care what the MSM says, I see the Capex spend in the shale and oil sands regions almost daily with my company and there has been no increase in investment at all in the last 30 months and our projects in the area are still 60-70% below what they were in 2014 so the idea that they could meet any shortfall at a moments notice next year is insane, there just isn’t the infrastructure in place on-site to facilitate that and in my experience the companies there need 18-24 months to even begin ratcheting up production by an appreciable margin. I feel that this will focus attention when the shortfall hits squarely on the Middle East with a faltering China, resurgent Russia and flailing US all converging to try and take all of the energy pie that they can and we could easily see open war there next year. Where that could go, well no-one knows but I suggest everyone stock up on emergency Whiskey just in case.

  28. Baby Doomer says:

    The Oil Situation: Some Alarming Aspects – (Trainer, 2017)
    http://thesimplerway.info/OilSituation.htm

    Gail is sited in this…

    • I am not sure that he quoted me correctly, however. Always interesting to see what people thought you said.

      Peer reviewed literature is sort of like the game “telephone”–each person passing along what that person thought the previous person had said. Reviewers generally don’t know the sources well enough to know what is true and what is not.

    • Greg Machala says:

      We are well past the alarm stage with respect to oil. We passed that in 1970.

  29. MG says:

    The oldest sugar factory in Europe was founded 150 years ago (1854) in Surany, Slovakia and at that time it paid the largest amount of the taxes into the Habsburgs monarchy treasury. The sugar beet was transported on the 100-km-long network of the first private railway in the Habsburgs monarchy.

    https://www.youtube.com/watch?v=LpNDI_feiAw

    (According to the article and video here: http://style.hnonline.sk/cestovanie/1066438-najstarsi-cukrovar-europy-stal-na-slovensku)

  30. JH Wyoming says:

    https://www.washingtonpost.com/world/national-security/trump-administration-to-end-provisional-residency-protection-for-50000-haitians/2017/11/20/fa3fdd86-ce4a-11e7-9d3a-bcbe2af58c3a_story.html

    Well you know things must be getting tough in the US when earthquake refugees that have been in the country for 7 years are handed red cards. 18 months for 60,000 Haitians to exit stage left back to whence they came, out on their duffs. Why not kick out the Portuguese that were Volcano refugees from Fayal in the Azores in 1957/58. A lot of those people would have died of old age by now, but what about the young one’s? They’re in their 60’s now and many of them have kids that could be sent back. What about Nixon’s Laotian people that came to the US just after the Vietnam war to escape persecution from the communists? The lists are long and go back many years.

    It’s probably very likely this will not be the one and only mass of people expunged. Many more to come I’m sure. I have a theory about Trump; that he’s always in a rage, whether it’s just under some kind of temporary control or full blown outwardly directed rage. I think when he’s in a rage he makes decisions like the one in that article. That’s probably why so many people are concerned Trump could take the Football and the Biscuit and dial in Nuclear launch codes at any time, especially if Mueller gets around to serving him with indictments. This prez of our’s is a raging maniac predisposed for some really outrageous behavior. I hope the W.H. day care people are close by to take control.

  31. “Solar thermal power is about to get red hot.
    “Earlier this year, we reported that the government plans to invest $62 million to advance concentrated solar power. Now, we’ve spoken to teams racing to win that cash. Their mission: to focus the Sun’s rays and create temperatures over 700 °C.”

    https://www.technologyreview.com/s/609509/a-path-to-competitive-solar-thermal-power/?utm_source=newsletters&utm_medium=email&utm_content=11-21-2017&utm_campaign=the_download&utm_source=MIT+Technology+Review&utm_campaign=6aa485a4f7-The_Download&utm_medium=email&utm_term=0_997ed6f472-6aa485a4f7-153961373

    Once again, only government would finance something like this.

    • JH Wyoming says:

      Too bad an article came out about doing something like that for energy because if Trump finds out he’ll can it and transfer the funds to coal extraction.

    • Think of the research jobs it will create. And the stories that can be published about the “next big thing.”

    • Fast Eddy says:

      Wow – 62 million dollars!!!

    • timl2k11 says:

      62 million. Not much really. The article mentions “The $2.2 billion, 170,000-mirror Ivanpah plant in California’s Mojave Desert, owned by BrightSource, NRG, and Google, is just the latest black eye for the sector. Since coming online in 2014, the project has been plagued by high costs, low production, a fire, and utility commission threats to shut it down.”

  32. Pingback: MIDEAST TURMOIL: FOLLOW THE OIL, FOLLOW THE MONEY – MATASII

    • Just the depreciation on these vehicles will be a big cost, I expect. Are they really expecting these cars to operate for, say, 20 years? If they change their minds after 3 years, how much are these vehicles going to sell for? Who would really want to finance this deal?

      One former Uber driver I talked to said that the amounts that Uber is now paying drivers are not adequate to cover a combination of (1) normal depreciation on vehicle, (2) extra maintenance on vehicle, (3) extra insurance on vehicle, and (4) reasonable hourly compensation for driver. So at least some drivers feel that they are now subsidizing the system. But the reason people drive for Uber is because t is a way to get a little temporary cash flow, when a person is between jobs, basically by increasing their automobile’s depreciation.

      There was a WSJ article recently saying that Uber had tried an experiment, in which they increased/decreased fees for their services. In the end, no combination increased the amount available for drivers. The cost of the rides seems to be quite price sensitive; they found that many riders would take public transportation instead, or not go at all, if the cost were much higher.

      • Fast Eddy says:

        ‘There was a WSJ article recently saying that Uber had tried an experiment, in which they increased/decreased fees for their services. In the end, no combination increased the amount available for drivers. The cost of the rides seems to be quite price sensitive; they found that many riders would take public transportation instead, or not go at all, if the cost were much higher.’

        Another sign of just how squeezed the consumer is…. throw that into symptoms along with half empty stadiums… falling restaurant, retail and autos…

      • Greg Machala says:

        The world is running out of good and bad ideas to run into the ground.

  33. Fast Eddy says:

    Censors have blocked the copy paste… if you want to be entertained… (I am!!!) click here

    http://www.zerohedge.com/news/2017-11-20/charlie-rose-accused-8-women-nudity-groping-and-lewd-phone-calls

    • Fast Eddy says:

      “It has taken 10 years and a fierce moment of cultural reckoning for me to understand these moments for what they were,” she told The Post. “He was a sexxxxxxual predator, and I was his victim.”

      • Fast Eddy says:

        “It has taken 10 years and a fierce moment of cultural reckoning for me to understand these moments for what they were,” she told The Post. “He was a seeeeexxxxxxuaaaaaal predddddddator, and I was his vicccccctim.”

        • Fast Eddy says:

          Another accuser, Kyle Godfrey-Ryan, was Rose’s former assistant and detailed “at least a dozen instances where Rose walked nuuude in front of her while she worked in one of his New York City homes.” She claims the CBS and PBS star also “repeatedly called” her “at night or early in the morning to describe his fantasies of her swimming naked.”

          • Nope.avi says:

            “what is astonishing to me is that these “rich and powerful” figures are actually quite pathetic in both their planning and success rates.”

            From the Zerohedge comments section.

            How can some of these ‘successful’ men in media have very little “game” as they call it? Why are they just so flat-out bad at the art of seduction that they resort to aggressive behavior?

            • Fast Eddy says:

              They like to pick the low hanging fruit…. and there is a lot of low hanging perky fruit when you have the power to make some famous…. a lot of fruit will do whatever it takes to make it

            • Greg Machala says:

              Yes, how these “rich and powerful” seem little more than trailer trash with money. I guess it is true – money can’t buy you.class.

            • Theophilus says:

              For every one that said no there were ten that said yes. That’s why they do it. When your successful most of the time you keep going. The real entertaining part of these sick stories would be all the women who said yes, telling their stories. Oh wait, that doesn’t fit the MSM narrative that women are victimized by men.

              The women who said no were victimized also by all the women that said yes. But, let’s not talk about that.

    • Nope.avi says:

      Vice-President Mike Pence’s refusal to be alone with a woman is making more and more sense…

      http://www.americanpol.com/index.php?/topic/448-mike-pence-refuses-to-be-alone-with-women/

      If men can’t control themselves around women…then maybe they should just be separated from them. Companies would not have to spend a bunch of money on sensitivity training and other nonsense to manage the increased social complexity of co-ed work places.

      Remember, it’s okay when a women do it to each other…no woman wants to appear homophobic, do they?

      https://trendsandbenefits.files.wordpress.com/2013/02/ellen-degeneres-peeps-katy-perrys-boobs-at-the-grammys-2013-460×367.jpg

      However, if Kate Perry’s platonic relationship with Ellen takes a bad turn, she could use this vindictively against her…Hollywood is a cutthroat place. I could set it happen.

      https://www.huffingtonpost.com/entry/ellen-degeneres-breast-katy-perry-photo-tweet_us_59f2fbd5e4b07fdc5fbd5a2f

    • Nope.avi says:

      He’s this decade’s
      https://i0.wp.com/media.npr.org/assets/artslife/arts/2010/11/pee-wee-herman/pee-wee-herman.jpg
      Pee Wee Herman.

      It seems like every moralistic person in a position of power is guilty of some kind of “Sexual misconduct.” It seems like most can’t refuse the temptation.

      What’s the point of having status or power if one can’t abuse it just a little…?
      I think that is the way a lot of people who are ambitious, think. Double standards, cronyism, those are the benefits for the effort of seeking and maintaining power, beyond the money. It is called “influence”.