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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912 Responses to Will China Bring an Energy-Debt Crisis?

  1. Fast Eddy says:

    The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.

    It took several discreet follow-up meetings to iron out all the details, Parsky said. But at the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the country’s Treasury purchases stay “strictly secret,” according to a diplomatic cable obtained by Bloomberg from the National Archives database.

    “Buying bonds and all that was a strategy to recycle petrodollars back into the U.S.,” said David Ottaway, a Middle East fellow at the Woodrow Wilson International Center in Washington. But politically, “it’s always been an ambiguous, constrained relationship.”

    This is the sort of thing Bin Laden was pissed off about …. the House of Saud sold out to America…

    But what choice did they have? As we know — there is no Koombaya — someone was going to get that oil…. the KSA is a tiny country with no way to defend itself from the global powers…

    They had to tie up with one of the big dawgs…. and they chose America…

    • Ed Kitto says:

      better clip:

      • I don’t remember seeing this before. It is very good.

        I was surprised when I rubbed shoulders with a few people from China that were somewhat in the decision-making stream. They seemed to be reading exactly the same things that were being read in the West. For example, they assumed that there would be plenty of natural gas for everyone.

        They were, of course, looking at the world as one of businesses that need to make profits. That is why oil and coal production have been cut back, in response to low prices.

    • Right. And now they are seeking to tie up with someone different.

  2. Baby Doomer says:

    DEMOCRACY CANNOT SURVIVE OVERPOPULATION

    Albert A. Bartlett
    Professor Emeritus
    Department of Physics
    University of Colorado at Boulder,

    Article I of the Constitution of the United States, (1790) describes the House of Representatives, and says that “Thenumber of Representatives shall not exceed one for every thirty thousand…” In the year 2000 there are over 600,000 persons per member of the U.S. House of Representatives. Thus in 210 years we have seen democracy at the national level being diluted by a factor of approximately 600,000 / 30,000 = 20. (Bartlett, 2000)

    https://rewilding.org/rewildit/images/DemocracyOverpopulation.pdf

    • Interesting observations on overpopulation. One example:

      LOSS OF FREEDOM BY BOTH TECHNOLOGY AND POPULATION GROWTH
      The loss of freedom that follows gun control is a hotly debated issue. We can see that both technology and population growth play roles in this loss of freedom.

      Two hundred years ago one could have had an artillery piece at the site that is now downtown Boulder, Colorado, and one could have fired it in any direction at any time as often as one wished. The range of the gun was so small, the time required to reload it was so long, and the population density here was then so low, that there was little chance that random repeated firings of the gun in any direction would hurt anyone.

      But now technology has given us guns with greater range, which can be reloaded and refired automatically in a fraction of a second. The population density in Boulder is now so high that there are always lots of people within the range of a gun. Consequently we have to have regulations to the effect that it is illegal for individuals to fire artillery in Boulder. Another freedom has fallen victim to population growth and to advances in technology.

      • Artleads says:

        The same principle seems to apply with work. Since we have so many gadgets to do work for us, less physically fit, or strong, people can do work they couldn’t do before.

    • i’ve been saying as much for years

      overpopulation will bring clashes between people, and diminishing living standards.

      the reaction will be outright denial, with violence used to justify that denial—that will bring about martial law to keep order, and the suspension of any democratic rights

      i’ve tried to explain it more fully here
      View story at Medium.com

      • Fast Eddy says:

        Good article Norman.

        Mr Jones and Mr Smith are neighbours … they greet each other over the fence as they do their weekend gardening….

        Mr Jones cares for his veggie plot…. Mr Smith is more an ornamental guy…. he doesn’t grow any food.

        But then one day the electricity goes out — forever — the shops empty …. Mr Smith peers over the fence at Mr Jones who is tenderly harvesting tomatoes and lettuce…. Mr Smith does not smile …. he does not say hello Bob how’s your day going ….

        His stomach is growling ominously now…. his wife and two children are weeping with hunger inside the house…. he slips over the fence with a shovel …. he approaches Mr Jones from behind….

        And does this

  3. Fast Eddy says:

    I am seriously beginning to wonder if what we are observing globally is an attack on the El ders…

    – Is the KSA purging US-centric individuals in a move to throw the eld ers under the bus and shift to the Russia/China sphere?

    – Is the eld ers controlled MSM attacking Putin – and Trump – because they are also part of the team that seeks to kill off the eld ers?

    Is the timing of this release not interesting …. http://www.zerohedge.com/news/2017-11-12/outrage-follows-jaw-droppingly-shocking-1986-prince-charles-letter-blaming-mid-east-

    Are the eld ers increasingly feeling like cornered rats there in the Fed building?

    Well… no empire lasts for ever… and if this one is overturned the next one will be the shortest
    lived empire in the history of the world

    • I suppose thatI have not been reading enough MSM to recognize MSM attacking Putin and Trump. Putin and Trump are certainly not on the team to maintain what the elders have been doing.

      Is part of the problem not enough to go around?

      KSA cannot cozy up to both USA and China. There is the bonus of getting the wealth of the high ranking officials that are being eliminated.

    • Mark says:

      Kunstler was pretty good today
      http://kunstler.com/

  4. Fast Eddy says:

    JT posted this on Tim Morgan’s site

    http://www.artberman.com/u-s-supply-oil-ending/

    Hmmm… maybe HSBC will be correct with the 2018 prediction

  5. jupiviv says:

    http://ponziworld.blogspot.in/2017/11/crypto-massacre.html?m=1

    – Reading between the bullshit, as Bitcoin became overvalued this past month, insider speculators jumped over to Bitcoin Cash which was a dividend currency created during the August hard fork. By sheer coincidence, the developers and miners who were in charge of the “2x” scalability fork on November 8th, had already moved over to the more scalable Bitcoin Cash ahead of time. Why fork Bitcoin when you’re in a more scalable currency already? It’s much better to force $100 billion in dumb money to move over to the currency you already own. In the event, they cleaved Bitcoin original of a (more) scalable path forward, which would have benefited the masses who already owned Bitcoin. In other words, the rats left the masses stranded on a sinking ship. Bitcoin has been straight down since the cancelled fork, because it’s “a dead currency” now. It has lost the sponsorship of the mining community because it’s a mature currency with very few coins left to be mined at ever- rising cost. A “feature” that’s built into every crypto-currency. Transaction costs and times will only increase exponentially from this point forward.

    ^Some analogies to the collapse or how it will unfold.

  6. The Second Coming says:

    “Al Gore: ‘I tried my best’ but Trump can’t be educated on climate change
    I haven’t had any conversations with [Trump] since his speech to withdraw from Paris. I tried my best and thought he’d come to his senses but I’ve been proven wrong,” Gore, who met with Trump during the transition to try to influence his thinking, told the Guardian. “I don’t feel I have the ability to change his mind. He’s surrounded himself with the absolute worst of climate deniers who seem to have captured his mind on the issue.”
    Trump has aligned with Scott Pruitt, the head of the US Environmental Protection Agency who is a vocal critic of the Paris deal. Pruitt has cast doubt on whether carbon dioxide drives global warming, and claimed there is “tremendous disagreement” among scientists over climate change.
    Brother All Gore, I feel the same…
    https://www.theguardian.com
    “Ultimately we won’t have a denier in the White House forever. We are engaged in a great political struggle between the deniers who want to turn the world over to fossil fuel interests and scientists and concerned activists who want to see decarbonization.

    • Fast Eddy says:

      They didn’t feel it was appropriate to ask Gore why he lives in a mega mansion that uses 30x the energy of an average house… and why he makes use of private jets to fly to – among other things — cl i mmmate chnnnage gigs?

      Funny that…. well not really…. it’s actually all pretty f789ing stuuuupid …. this entire narrative is ridiculous…. the fact that anyone even listens to Gore… is just …. well…. humans as we know are stupppid beasts… easily convinced of anything….

      • The Second Coming says:

        The richest 10% of people produce half of Earth’s climate-harming fossil-fuel emissions, while the poorest half contribute a mere 10%, British charity Oxfam
        The report said that an average person among the richest one percent emits 175 times more carbon than his or her counterpart among the bottom 10%.
        Gore’s source of wealth:
        Inheritance – rich father
        Sale of Current TV – $70,000,000
        Apple stocks – $45,000,000
        Google stocks – $30 – 40 million
        Everything you use your iPhone or “Google it” you add to his wealth

        • Tim Groves says:

          As Tony Heller said last Sunday, “A mass superstition has risen about CO2, and people on the left now view every weather event as a sign of the coming apocalypse. They ridicule Christians for their belief in a global flood, while clinging to their own ridiculous, baseless flood myths.”

          https://realclimatescience.com/2017/11/rising-sea-level-to-bypass-the-san-francisco-bay-and-flood-sacramento/

          I used to think Heller was unnecessarily rude, but over the years I’ve come to see that ridicule and sarcasm can be a reasonable and appropriate response to smug, supercilious charlatans like Gore and their more obnoxious useful idiots who are bent on selling “decarbonization” for the masses as a solution to their make-believe climate problems.

          • The Second Coming says:

            Taylor’s journey from climate skeptic to climate change believer. “From that point forward, I began to do the due diligence,” Taylor said. When he reviewed the studies by climate skeptics, he found that the story would often play out the same way. “Either the studies were misrepresentative, or they were cherry-picking data,” he said, “or they were just not very good.”
            Taylor got to the point where he was uncomfortable arguing about the climate science but believed that the argument about the unacceptable economic costs of climate action still held. Upon closer scrutiny, that argument fell apart as well. “I got to the point where I could not find a credentialed economist who would argue against climate action,” he said. “Not a single one.”
            What happens when a climate skeptic switches teams? For Taylor, coming forward to say that climate change is real and not “a conspiracy cooked up by leftists who want to destroy capitalism” was “a strong cup of tea” for his old friends to drink. Taylor left the Cato Institute in 2014 and is now president of the Niskanen Center, where he promotes climate change action through market solutions and tries to turn deniers to believers. His brother, James Taylor, works at the Koch brothers-funded Heartland Institute, a conservative think thank leading the charge on global warming denial. The brothers agree to disagree on climate change and don’t discuss it.
            Taylor is the only known paid skeptic to change his tune. “Most people aren’t in the business of looking skeptically at things they already agree with,” he said. “I wish I had done the due diligence with the arguments I was trafficking earlier in my career; I do regret that. I feel I have a lot to make up for.”
            http://www.motherjones.com/environment/2017/11/i-was-a-professional-climate-denier-i-was-wrong/

          • Tim Groves says:

            If you like your current climate, you can keep your current climate. Nobody’s going to force you change your climate!

            And if you already have lots of wealth, you can keep your lots of wealth. If you fly a private plane, and you like your private plane, you can keep your private plane.

            Better still, with the right decarbonization package, you can choose the climate that’s best for you.

            I’ve never heard of this Taylor guy but his position as an unpaid or paid skeptic or an unpaid or paid alarmist is irrelevant. If we all became passionate climate crusaders tomorrow, it would make no difference to the climate (although it would make Gore, Clinton and the rest of the Globalists very happy). Since nothing we can do will allow us to control the various climates we experience here on earth, which is the implied claim of “decarbonization” advocates, and since “climate” doesn’t have a control knob (such as the CO2 level) that we can adjust in order to affect the changes we wish to see or to prevent those that we wish to avoid, then nothing we say or do or think or believe makes an iota of difference to the climatic conditions we are going to experience.

            • The Second Coming says:

              Brown, attending climate events in Europe, says that when talking with scientists even he feels on the edge of despair. He said while there is nothing happening that gives him grounds for optimism, he remains excited about doing something to avert disaster, offering that there’s “real horror in store” if leaders don’t act.

              “But it’s so large, and people don’t like to think in catastrophic terms, that most people would prefer to minimize, or trivialize, or talk about something else,” Brown conceded. “Monday Night Football, for millions of people, is a lot bigger than climate change.
              http://www.thenewstribune.com/news/local/article184578618.html

            • The only detail is that it is a real horror story, if the leaders do act. The things that they come up are not even slightly helpful. The plan of keeping emissions low locally simply sends them to higher emissions countries. Even the carbon taxes are not helpful, because imported goods made with coal are not subject to them.

              The plan to use more renewables ends up with greater and greater cutting down of trees. The whole concept of the scientists fixing thing is wrong. All they fix is their own salaries. They also get lots of chances to vacation in nice places around the world as they attend meetings.

              We need to rewrite the story to point out that while climate is changing, it is the result of the laws of physics, and we cannot change these laws. It is unfortunate, yes, but global warming is not the “fault” of humans, except perhaps to the extent that the climate meetings have tended to make the situation worse, rather than better.

            • i’ve noticed that ”climate change summits” are a travel business in themselves

            • I have mostly missed out on those. All I would need to do is come up with a supposed solution, and I could get funding to go to those.

              As I think about it, there were two different climate-related conferences I have been asked to give talks at. One was at MIT in Boston. This is a link to a write-up of the talk I gave in 2010. It was called, “How limited global oil supply may affect climate change policies.” These are a few slides from the presentation. My message seems to stay the same.

            • Fast Eddy says:

              You can’t blame them…. at least Monday Night Football is real… there are real men … throwing and kicking real balls… and smashing into each other….

              There is common ground for the pro and anti gooobel wooobel …. here name is TINA.

          • Tim Groves says:

            So here we have a political activist whose profession is to influence elite opinion. For decades at the Kato Institute, he was presumably paid to influence them toward climate skepticism. Then he changed backers and now he’s presumably paid to influence them against it. Of course, he isn’t doing it for the money, but because he very sincerely believes he’s doing the right thing for humanity.

            The conversions sounds like a regular St. Paul job—after all that time doing evil, he’s now a good guy fighting against the very evil he was previously promoting—although we must ask whether this profound change of heart was prompted by him being blinded by the light of reason or whether it was prompted to switch by financial considerations? After all, there is a lot of money in lobbying and someone who can be passionately against a given policy for decades and then passionately in favor of the same policy… Well, it beats selling life insurance door to door.

            Taylor’s current firm has two dozen immaculately suited an coiffed doubtless well paid staff over a dozen adjunct fellows and around two dozen advisers. This kind of operation dozen come cheap. Lots of high maintenance swamp creatures have their snouts in this particular trough. And we must note, all the funding is ultimately derived from the goodies produced by the fossil fuel based industrial economy. The DC swamp is not an ecologically balanced environment.

            Established in 2014, the Niskanen Center is a 501(c)(3) think tank that works to change public policy through direct engagement in the policymaking process: developing and promoting proposals to legislative and executive branch policymakers, building coalitions to facilitate joint action, and marshaling the most convincing arguments in support of our agenda. The Center’s main audience is the Washington insiders – policy-oriented legislators, presidential appointees, career civil servants in planning, evaluation and budget offices, congressional committee staff, engaged academics, and interest group analysts – who together decide the pace and direction of policy change.

            https://niskanencenter.org/about/

            • Taylor works for whoever pays him, sounds like the story.

              Insurance regulators generally come from the insurance industry. Financial regulators regularly come from the banking industry.

              Armies hire mercenaries. What is so new about the situation? I truly doubt he understands all of the pieces of the story. If he did, he would at least understand that there is absolutely nothing we can do to stop the situation, which does not end our civilization at the same time. Certainly ending fossil fuel use is not a solution.

        • The laws of physics to a significant extent determine how wealth is distributed.

          https://arxiv.org/abs/cond-mat/0412004

          This is a link to a discussion of Power laws, Pareto Distributions and Zipf’s Law.

          We can complain about the laws of physics, but we have a very hard time repealing them.

  7. Baby Doomer says:

    GE cuts dividend in half for the second time since Great Depression – CNN

    http://money.cnn.com/2017/11/13/investing/ge-dividend-cut/

    • So far, GE’s stock has fallen only a little, and the stock market as a whole has not been affected.

      Already priced in, or the market doesn’t care at all?

      • Fast Eddy says:

        Edict 20998.99988 (viiii b) from the Ministry of Truth:

        ‘The stock markets shall only go in one direction from here and to eternity – up’

        Eternity…. it does sound like such a long time….

    • Fast Eddy says:

      But apparently the global economy is growing stronger…. so says CNN etc….

  8. Baby Doomer says:

    US GDP Growth is only 1% (Ex Energy). The Slowest Since 2010 -UBS Global Economic Outlook

    • That chart is a good find.

      This is where it is from. http://www.zerohedge.com/news/2017-11-13/ubs-makes-striking-discovery-ex-energy-us-gdp-growth-slowest-2010

      UBS Makes A Striking Discovery: Ex-Energy, US GDP Growth Is The Slowest Since 2010

      Message 1: The 2017 global growth acceleration was largely (70%) a commodity bounce. This applies even to the US which was 20% of the global growth improvement but, as the 1st chart below shows, it was entirely energy investment. Once you strip that out ‘underlying’ growth is only 1% or so (ex inventories) – the slowest since 2010.

      My suspicion is that the commodity bounce ultimately comes from an increased debt bubble from China. Once China reins in the debt bubble, everything is over.

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