The way the world economy is manipulated by world leaders is a little like a giant video game. The object of the game is to keep the world economy growing, without too many adverse consequences to particular members of the world economy. We represent this need for growth of the world economy as being similar to making a jet airplane fly at ever-higher altitudes.
Figure 1. Author’s view of the situation we are facing. World leaders look at their video screens and adjust their controllers to try to make the world economy fly at ever-higher levels.
World leaders look at their video game screens for indications regarding where the world economy is now. They also want to see whether there are specific parts of the economy that are doing badly.
The game controllers that the world leaders have are somewhat limited in the functions they can perform. Typical adjustments they can make include the following:
- Add or remove government programs aimed at providing jobs for would-be workers
- Add or remove government sponsored pension plans and payments to those without jobs
- Add or remove laws regulating efficiencies of new vehicles
- Change who or what is taxed, and the overall level of taxation
- Through the above mechanisms, change government debt levels
- Change interest rates
There are numerous problems with this approach. For one thing, the video game screen doesn’t give a very complete picture of what is happening. For another, the aspects of the economy that can be controlled are rather limited. Furthermore, the situation is very complex–there seem to be several “sides” of the economy that need to “win” at the same time, for the economy to continue to grow: (a) oil importers and oil exporters, (b) businesses and their would-be customers, (c) governments and their would-be taxpayers, and (d) asset holders and the would-be buyers of these assets, such as families needing new homes.
An even bigger problem is a physics problem that is hidden from the view of those operating the control mechanism. Jet airplanes in the real world cannot rise beyond a certain altitude (varying depending upon the plane), because the atmosphere becomes “too thin.” There is a parallel problem in the economic world. The atmosphere that allows an economy to grow is provided by a combination of (a) an increasing supply of cheap-to-produce energy, and (b) increased technology to put this growing energy supply to use. This atmosphere can become too thin for several reasons, including the higher cost of energy production, rising population, and growing wage disparity.
We know that in the real world, a jet airplane cannot rise ever-higher. Instead, at some point, the airplane hits what has been called its “coffin corner.”
Figure 2. Diagram of Coffin Corner by Aleks Udris of Boldmethod. On the chart, Vs is the velocity; MMO is the Maximum Mach Number.
According to Aleks Udris, “The region is deadly. Get too slow, and you’ll stall the jet at high altitude. Get too fast, and you’ll exceed your critical mach number. The air over your wings will go supersonic, you’ll pitch down, the aircraft will accelerate, and your wings will fall off. Also bad.”
What Happens As Coffin Corner Limits Are Reached in the Economic World?
What do world leaders do, as the world economy hits limits? One temptation is for the world leaders in Figure 1 to take their foot off the throttle that is operated by low interest rates and more debt, because they don’t seem to be providing very much benefit anymore. The leaders fear that if more debt is added at low interest rates, it risks creating “asset bubbles” that are easily disturbed if any little bump to the economy occurs. If a big bubble pops, there is a significant risk that the economy could fall down to a much lower level. This is like stalling the jet at high altitude.
World leaders can also use approaches that create situations more like “making the wings come off” the economy. These approaches involve favoring one group over another. For example, a government can give big tax breaks to businesses, but raise taxes on individual citizens. Businesses will ultimately be harmed by this approach, because they depend on individual citizens for their sales. The result is like tearing the wings off the airplane.
Another approach that would tear the wings off the economy involves actions by a different group of world leaders than those shown in Figure 1, namely the leaders from OPEC and Russia. These leaders have different video game screens and different game controllers. They can manipulate the world economy by reducing the supply of oil they provide. With this approach, they hope to increase the price of oil, and thus obtain a larger share of the world’s goods and services through higher tax revenue.
Raising the oil price would benefit oil exporters, but would make goods and services more expensive for oil importing countries. Ultimately, this approach would lead to recession in oil importing nations. The result would likely be worse than the 2008-2009 recession–another way to make the wings come off the economy.
Let’s look in a little more detail at what is happening, and what goes wrong:
[1] Energy plays a huge role in this game, because a growing supply of cheap-to-produce energy allows greater worker productivity.
It takes energy of various types to make the economy grow, because energy is needed whenever we move something, or heat something, or use electricity to operate something. We use energy products to leverage our human labor. For example, we use a truck to deliver a package, rather than walking and carrying the item in our hands. If fresh water is in short supply, we use energy to operate a desalination plant, and thus produce the fresh water we need.
It is generally workers who produce goods and services. If energy supply is inexpensive and readily available, it is easy for governments or businesses to create “tools” to make these workers more productive. These tools include such things as roads, vehicles, machines of all types, and even computers. If the quantity and capability of these tools are increasing, the labor of these workers is increasingly leveraged by the availability of these tools. This is what allows economic growth.
[2] The extent of world economic growth seems to depend primarily on how quickly total energy consumption is growing.
If we look at historical economic growth, we see that the rate of growth of energy consumption seems to play a major role.
Figure 3. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.
The highest rates of world economic growth took place in the 1950-1965 period, and in the 1965-1975 period. These were both periods of very high growth in energy consumption. As we will see below, these were both periods when the price of oil was less than $20 per barrel, for almost the entire period.
If we look at economic growth over shorter periods, we also see a strong correlation between world economic growth and growth in energy consumption:
Figure 4. World growth in energy consumption vs. world GDP growth. Energy consumption from BP Statistical Review of World Energy, 2017. World GDP is GDP in US 2010$, as compiled by World Bank.
[3] On Figure 4 (above), the widening gap between GDP growth and energy consumption since 2013 could either represent (a) Much greater efficiency in using energy or (b) A problem in measuring true economic growth.
We can see true efficiency improvements in the 1975-1985 and the 1985-1995 periods shown on Figure 3. These were the periods when the world was truly trying to “get away from oil,” after a spike of high prices in the 1970s. Governments around the world were encouraging new smaller cars; electricity generation was being changed from oil to nuclear; home heating was being changed from oil to natural gas or electricity. The new furnaces installed were much more efficient than the old ones. Thus, during this period, efficiency/technology improvements were aiding economic growth to a greater extent than usual.
Now, in the period since 2013, much of the “low hanging fruit” has already been picked. We may still be finding some technology gains, but it seems likely that at least part of the problem is an “economic growth counting problem.” GDP looks like it is growing, but it is really very hollow economic growth. Governments invest in projects of essentially no value, and their investment is counted as GDP. For example, they invest in unneeded roads, in apartments that citizens cannot really afford, in educational institutions that do not produce graduates with wages that are sufficiently high to pay for education’s high cost, and in high-priced medical cures that are unaffordable by 99% of the population. Are these things truly contributions to GDP?
We also find businesses that look like they are growing, but in fact are taking on increasing amounts of debt as they sell off assets. This is not a sustainable model! We encounter energy companies that claim to be doing “sort of” alright, but their profits are so low that they need to cut back on new investment, and they need to borrow in order to have funds to pay dividends to shareholders. There is something seriously wrong with this growth!
[4] The economic “atmosphere” becomes thinner and thinner, when oil prices rise above an inflation-adjusted price of $20 per barrel.
Back in the time period prior to 1973, oil prices were generally below $20 per barrel, in inflation adjusted terms. Since then, prices have tended to be above this level.
Figure 5. Historical oil prices are Brent oil prices in 2016$ from BP Statistical Review of World Energy 2017; $20 per barrel is the maximum price level where oil is truly affordable; and $300 per barrel is the maximum price per barrel that the International Energy Agency seems to believe is possible for the world economy.
When oil (and other energy prices) were very low, companies could add tools to make workers more effective with little expenditure. As a result, the United States saw wages growing much more rapidly than inflation prior to 1968 (Figure 6).
Figure 6. Chart comparing income gains by the top 10% to income gains by the bottom 90% by economist Emmanuel Saez. Based on an analysis of IRS data, published in Forbes.
Once prices of oil started rising, prices of tools (broadly defined) rose. Governments and companies needed more debt to buy these tools. It became more of a burden to add capital goods of all kinds. Governments tried to raise GDP by adding debt, but to a significant extent they ended up with higher debt to GDP ratios rather than the rapid growth they were looking for (Figure 7).
Figure 7. Worldwide average inflation-adjusted annual growth rates in debt and GDP, for selected time periods. See post on debt for explanation of methodology.
The changes in the economy that allowed continued growth (more debt and more technology) tended to push the economy toward more wage disparity, in part because more technology required more training for some of the workers, but not for others. This allowed wages of the workers with special training to rise.
Furthermore, the need to repay debt with interest tended to funnel wealth toward the financial sector, and toward those within the economy who could afford to hold financial assets. These changes left less of the output of the economy for non-elite workers.
Economists never really understood what was happening. They had never thought through the important role that energy plays in the economy. Cheap energy is needed to create jobs. It is jobs, and the wages that those jobs pay, that tend to suffer when oil prices are too high (Figure 8). Thus, high-priced oil has a double impact on the economy:
- It makes goods of many kinds more expensive.
- It reduces job availability and wages.
Figure 8. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided by total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.
Logic would suggest that the economy cannot really operate on high-priced oil. Lower wages and higher prices do not peacefully coexist! We should expect high oil prices to be very unstable. Even if prices can reach a high level in response to a specific shortage or stimulus, we cannot expect these high prices to be maintained for a sustained period, without added stimulus. Unstable high prices are not likely to give rise to more oil production; they cannot be depended upon.
Economists have never understood this situation. Instead, they have made pronouncements that at some point in the future, they expect that oil would become scarce. Because of this scarcity, oil prices would rise. In their view, when oil prices rise, high-priced substitutes would suddenly become the best option available; somehow, the economy would become able to operate using these high-priced substitutes. (If energy products were not needed for labor productivity, this view might make some sense. In the real world, it does not.)
It never occurred to organizations such as the International Energy Association (IEA) that high oil prices might be a problem for the economy. The IEA has shown exhibits suggesting that oil prices could theoretically rise to $300 per barrel. Of course, at such an elevated price, there would be an almost unlimited amount of oil available to extract (Exhibit 9).
Figure 9. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels.
[5] The real enemies of continued economic growth are (a) diminishing returns with respect to oil and other energy production, (b) continued population growth, and (c) increasing wage and wealth disparity.
We seem to be playing a video game where the players don’t understand who the real enemies are.
Diminishing returns with respect to oil and other energy production have to do with the cost of energy extraction rising ever-higher, as more resources are extracted. There are a lot of resources that we can “see,” but that we cannot economically extract, unless prices rise to very high levels.
Figure 9. My version of the resource triangle for oil. Note that oil shale is not the same as tight oil, found in shale formations. Oil shale is kerogen that must be processed at very high temperatures in order to produce oil. This is rarely done, because of the high processing cost. Tight oil is not on this chart. Tight oil probably would be above “onshore heavy oil; oil sands.” It still would disappear, if oil prices permanently fell to $20 per barrel or less.
Continued population growth is a problem because it is really “energy per capita” that matters. Each individual needs food, transportation, and housing. All of these things take energy. Many years ago, when most of the workers were farmers, it was necessary to create ever-smaller farms, as population rose. This clearly would lead to lower food production per farmer, unless some sort of technological breakthrough was taking place at the same time. Today, we have a parallel issue.
Increasing wage disparity tends to be associated with the rising use of technology. When most labor is hand labor, workers truly do “pay each other’s wages.” All wages can be fairly equal. With increased technology, some workers have specialized training; others do not. Some workers are supervisors; others are laborers. Unless the overall output of the economy is rising very rapidly, non-elite workers find themselves increasingly unable to afford the output of the economy. It is this falling “demand” (really affordability) that tends to pull an economy downward.
[6] High oil prices can be temporarily tolerated by an economy, if interest rates are lowered to make this arrangement work.
Clearly, lower interest rates make capital goods of all kinds more affordable to both businesses and individual workers. If we look back at the period since 1981, we see a long period of falling interest rates, acting to stimulate the economy.
When oil prices exceeded $20 per barrel, the economy did not collapse immediately. In “normal” times, lowering interest rates was sufficient stimulus to keep the economy growing (Figure 4).
Figure 10. Ten-year treasuries through Nov. 17, 2017. Chart produced by FRED.
When there is a very big drop in oil prices (as in 2008, related to falling debt levels), then Quantitative Easing (QE) has been helpful (Figure 11). The US began its program of QE in late 2008, when oil prices were near their low point. There were three phases of the US’s QE. The US discontinued the third phase in late 2014, just as oil prices started to slide again.
Figure 11. Monthly Brent oil prices with dates of US beginning and ending QE.
[7] It is quite possible for a disconnect to occur between (a) the cost of oil extraction, and (b) the selling price of oil.
Oil that costs more than $20 per barrel is never very affordable by the economy. It really needs continual stimulus to keep prices at an elevated level. Once debt growth falls too low, the balance between the supply and demand for oil is settled in the direction of the amount of goods and services made with oil that non-elite workers can afford. Prices fall below the cost of production. This seems to be what has happened since 2014.
[8] In fact, since 2014, the selling prices of oil, natural gas, and coal have all fallen below the cost of extraction.
Figure 12. Price per ton of oil equivalent, based on comparative prices for oil, natural gas, and coal given in BP Statistical Review of World Energy. Not inflation adjusted.
It is popular to think that the reason why oil prices are too low is because of overproduction by the United States or Saudi Arabia. When a person stops to realize that essentially the same situation arises for all three fossil fuels, a person begins to understand that there likely is an affordability issue underlying the low prices for all three fuels. The affordability issue, of course, arises because energy supply is not rising quickly enough because (at over $20 per barrel), it is too expensive to be truly affordable. The “atmosphere is too thin” at today’s high cost of energy extraction.
9. Coal production seems to have “peaked” because at today’s low prices, few mines find the extraction of coal profitable.
It is popular in “Peak Oil” circles to believe as the economists do: oil and other energy prices can rise endlessly, because of growing “demand.” Economists have never stopped to think that at any given price, there is an affordability issue for customers. If prices drop too low, there is a profitability issue for those operating extraction facilities.
If we look at the situation with coal, we see a situation where peak production seems to have been reached because of low prices. China has closed down mines because falling prices have made mines that were previously profitable, unprofitable (Figure 13). Coal is the lowest-cost fuel; if it cannot be mined profitably, the world economy has a problem.
Figure 13. China’s energy production, based on data from BP Statistical Review of World Energy, 2017.
In fact, it appears as though we have reached peak coal on a worldwide basis, as a result of low prices (Figure 14). It is hard to see any major production area that can grow substantially in the future, without much higher prices.
Figure 14. World coal production, based on BP Statistical Review of World Energy Data. (For 1965-1980, consumption is substituted for production, because only consumption is given, and imports/exports are likely small.
[10] The world economy needs to be able to keep repaying debt with interest. If world economic growth slows too much, this will not be possible.
We may already be reaching a “too slow growth limit.” Below this growth limit, it becomes impossible to repay debt with interest, especially if interest rates rise. We may already be reaching this point, based on the lack of growth in energy consumption per capita shown in Figure 15. (Also, as noted in Item [3], it seems quite possible that recent GDP growth indications are overstated.)
Figure 15. Average energy prices (averaging oil, coal, and natural gas) versus the total quantity of energy products consumed per capita, based on BP energy consumption data and UN population data. (Prices have not been inflation adjusted.)
Figure 15 suggests that affordability and price go together. When the world economy is growing rapidly, energy prices tend to rise (as does energy consumption). When energy consumption per capita falls, it is a sign that the world economy is not doing well.
One of the things that confuses matters is the very different economic growth results for different parts of the world. If oil prices are low, this improves economic growth prospects from the point of oil importers, such as the United States and China. This is what our video game players are looking at, not the results for the world as a whole. It is oil exporters, such as Venezuela and Saudi Arabia, who are having problems.
If we look at world news, Venezuela may collapse because of low oil prices. Saudi Arabia has found it necessary to take on debt, and has undergone regime change, at least partly related to low oil prices. Norway is proposing that its oil and gas fund no longer invest in oil and gas companies, because it expects that there is a significant chance the oil price will not rise high enough to bring companies back to adequate profitability.
[11] The whole “game” has been confused by a lot of not-quite-correct pronouncements from academic circles.
A lot of well-meaning people have tried to solve our energy problems, but haven’t gotten the story right.
Economists have gotten the story pretty much 100% wrong. Energy is very important for the economy. Furthermore, energy prices don’t rise endlessly.
Peak Oilers have confused matters by talking about oil, coal and natural gas being determined by the amount of technically recoverable resources in the ground. This might be true if energy prices could rise endlessly, but clearly they cannot. By following the wrong views of economists, Peak Oilers have led world leaders to believe that far more resources are available to be extracted than really is the case.
People who call themselves Biophysical Economists haven’t really gotten the story correct either. The Biophysical Economists realized that there was a need for a measure for diminishing returns. They put together a measure which they called Energy Returned on Energy Invested. The measure, unfortunately, only “sort of” works. It gives a lot of wrong answers. It does not suggest that oil prices above $20 per barrel are a problem. It also does not suggest that substitutes for oil that are priced above $20 per barrel are a problem. It tends to give a lot of “false positives” when it comes to the question of whether renewables can be substituted for fossil fuels. It seems to suggest that a particular ratio is important, when it is really the total quantity of an energy product available at a very low price that is important.
I should not pick on the Biophysical Economists. There are many others with academic credentials who produce metrics that really aren’t very helpful. Energy payback time is not a very helpful metric, especially from the point of view of deciding whether or not to use a particular device. It is not the energy that the economy must pay back; it is the full cost of manufacturing the device that needs to be recovered, including human labor costs and taxes. In some applications, the cost of mitigating intermittency may also need to be considered.
Even the standard Levelized Cost of Energy calculations can give misleading indications, if they are used on intermittent renewables without taking into account the cost of mitigating the intermittency.
Conclusion
With all of these issues, it is not surprising that world leaders have difficulty playing the energy and economy game. In fact, it is hard to see any winning strategy.
One of the issues that makes the game impossible to win is the fact that all sides must win. A solution that cuts out the oil exporters is a problem for an economy dependent on oil. Any solution that cuts out the workers is a problem, partly because businesses need workers as consumers, and partly because governments need workers as taxpayers.
The reason I have not included any discussion of renewables is because at this point in time, we do not have any renewables that are sufficiently inexpensive and sufficiently scalable to represent a solution.
The left and right factions are throbbing with hatred today …. very entertaining….
http://www.zerohedge.com/news/2017-12-01/abc-makes-epic-mistake-retracts-bombshell-flynn-story
Quite a lot of the British aristocracy were in trouble by the late 19th century, as rents from land diminished in the Great Agricultural Depression (caused by globalisation of food supplies).
Many saved themselves by marrying money – usually American, made in industry, railroads, etc.
Same in France, Italy: all those ‘old names’ have lots of non-aristocratic blood now.
The few that kept hold of the big houses and most of their land found their boats floated again as North Sea oil improved Britain’s position, and they could run tourist businesses, open shops, and mend the roof.
Such as Chatsworth: in the 1950’s, the family advisor told the young couple inheriting to knock it all down as not worth trying to maintain.
Now, essentially, our cheap credit fountain keeps them going, as it does the rest of society.
I thought I would hate this but my brother suggested I download it …. https://en.wikipedia.org/wiki/Downton_Abbey
It is a fascinating portrayal of that period as one family marries into US wealth in an attempt to fight change….
Right up there with Mad Men in terms of summarizing changes in a society over a few decades.
Another problem with large surpluses might be theft.
Was the USPS purposefully defunded with the Postal Accountability and Enhancement Act of 2006?
http://www.postal-reporter.com/blog/editorial-the-most-insane-law-by-congress-ever-paea/
Ducka says:
July 7, 2014 at 11:33 am ,
“The reasoning for the 2006 PAEA can be said in one phrase Suckas, “Follow the money”. The Unions lobbied in support of this legislation thinking they would get a piece of the surplus $100 million in the Postal Civil Service/FERs retirement fund. What happened to the money? One congressman was quoted as saying “the post office will never see any of that money”. It paid for other programs and other federal retirement. ”
I’m not sure if the USPS ever had a surplus, but if it did, wouldn’t it be become a target for politicians looking for money to fund their underfunded favored projects?
The allegations surrounding the USPS’ problems remind me of conspiracies theories that claim that a lot of the money from the Social Security Administration was borrowed, after the U.S. went off the Gold Standard, to fund wars, and was replaced with debt. If these conspiracy theories are true, stolen money may have contributed to fiscal problems for the postal service and social security administration but would not be the primary cause of those problems because of the economic and demographic trends negatively affecting both the postal service and social security administration. The allegations seem partisan, with most of them coming from socially progressive(socialist) groups, but they do bring up an interesting question: how much of a problem is theft in government debt in wealthy and developing countries?
Maybe the US will at some point pull a KSA…..
They round up all the billionaires … and force them to turn over assets to the .gov…..
Why not televise the trials …. if a billionaire is found guilt … and they are all of course guilty of something…. the audience is given rotten eggs and tomatoes … and they are instructed to splatter them….
And then school children are invited in to urinate and spit on the caged billionaires … then in a final humiliation the billionaires are paraded through Detroit slums in their cages and poked with sticks…. and just left there on a street corner to be used as target practice.
Imagine how popular the stooge… a hum… I mean president … who was playing the role… errr… in office … at that time … would be…
If a referendum were held today on this — I suspect a very large number of Americans would be game on for this….
Whatever it takes…
http://izquotes.com/quotes-pictures/quote-civilization-a-thin-veneer-over-barbarianism-john-m-shanahan-292904.jpg
I don’t see class resentment fueling anything in today’s political climate in America.
Class is taboo.
I see something happening along the lines of ‘social justice’…
Every man with power has been guilty of sexual harassment at one point or the other, right? With Trump in power and a lot of people worked up about his p-grabing, it would be a great time to conduct a covert purge of old powerful men.
Also, those who thought the rich and famous got guillotines should be aware of the second part that England fought a 25 year war, with a bunch of crowed heads, to reverse that situation and succeeded. There was another Bourbon at Versailles by 1814, and they behaved just like the ancien regime which still retains some power now.
Only an accident of history (the Bourbon heir had no children and didn’t want the throne to pass to a rival branch after his death) in 1871 prevented the Bourbons from becoming kings again. Still, if the Great War went the other way, they would have been back (The wife of the Emperor of Austria Karl I was a granddaughter of the last Bourbon heir’s sister, and Karl wanted to put her brother Sixtus Bourbon, best known for being a took of Karl’s efforts to get Austria out of the war, to the French throne if things went well.)
Those who own land and privilege, the Establishment, TPTB, or wahtever, do not really die.
Let us compare oranges to oranges here.
None of those things that you cite as proof of the resilience of the elite are examples of the nobility surviving and thriving a complete collapse of a civilization. The examples you use are examples of some wealthy people surviving a regime change or a depression. Relatively mild stuff compared to the end of modern industrial civilization.
A good example would be showing descendants of the Aztecs holding elite positions in Mexico.
Your general argument of the elite always doing well is flat-out wrong. There is inequality of outcome regarding how well the elite make out during periods of change. Some of them became poor when the economic and social conditions that made them wealthy changed.
https://www.reddit.com/r/AskHistorians/comments/2fspqv/how_is_it_that_the_british_aristocracy_who_once/
Actually the Aztecs are doing quite well.
https://en.wikipedia.org/wiki/Mexican_nobility
Many people, including Moctezuma’s daughter who had been married to the last ruler Cuautemoc, jumped into the arms of the Spanish conquistadores and procreated, and they are still considered nobles by the Spanish and Mexican governments. They tend to keep lower profiles, but are still quite powerful.
Ditto to the Hawaiian nobility, which will be familiar to anyone who knows anything about Hawaii.
Let us compare oranges to oranges here.
The Atec/indigenous nobility only survived because the colonizing Europeans decided to let them live. They had no inherent use or value to the general public.
This, again, is not an example of elites surviving a collapse of a civilization, it is an example of them surviving a regime change. Elites usually don’t do well after their territory has been conquered by another group. They are often targeted for execution.
https://gkiw.weebly.com/uploads/5/7/2/1/5721059/5679299.jpg?308
Regime change is relatively mild stuff compared to the end of modern industrial civilization. The elites will not survive it because there will be nothing to support them. No surplus=no elites. They may have armed forces on their side, but if those armed forces don’t produce food, water, and protection from the elements, the armed forces will wither away and so will they.
Also, the demise of the British aristocracy has been significantly exaggerated.
http://www.independent.co.uk/voices/comment/how-has-the-british-aristocracy-survived-so-well-9759917.html
They would prefer people to think that they are down and out, so the people would pay less attention on them. However, I sometimes read magazines like Tatler, which shows how well they are living.
The British aristocracy never went away.
The British decided to preserve their nobility
under the terms that the powers and responsibilities of the British nobility be significantly diminished.
Use a better example, “useful eater”.
Right!
Thats why Mexico is run by Mayans.
The governor of New Mexico is Anazasi.
The Governor of the Easter Islands is descended from the original peoples.
Putin is the Great-great grandson of Czar Nicholas.
Oh, no … wait.
The ruling class of England, France , Germany, Austria, Italy, etc are mostly unchanged . There were some minor additions and subtractions but none of them stuck for more than 3 generations, and after everything was said and done the same old clique was back in power.
Maybe, but the source of their wealth and power doesn’t come from taxing local workers working on farms, it comes from the global economy. It comes from fossil fuels.
Dennis L’s word about efficiency is correct. We can do things with much less than before. Forget economy of scale – most of the world’s people are no longer economically relevant.
We were heading toward great things back in 1914, but the actions of a few misguided ‘heroes’ who thought they were helping their country win the war but instead were propping up the Third World, killed 9 million irreplaceable European youths and replaced them with people from Algeria, Vietnam, India and Rhodesia, for example.
As far as civilization is concerned, we can just keep a few enclaves in the Eastern and Western coasts of USA, and perhaps the HongKong-Canton region of China and Singapore, and we can still develop enough tech to reach the space and get space resources.
The rest – those who have the ability to be worth something to the enclaves will be admitted. The rest will have to be swept in the sea of evolution.
If you abandon the old industrial era mindset, and change the views to suit today’s reality, you can find out that things can go far, far longer than you think. If we have to shed 6-7 billion, better to do that when there are more resources remaining to benefit both the survivors and the would-be dead who are doomed anyways.
The elite will try to hang on, with their tech and robots, etc. I expect city states to try to sequester tech and industry to “hang on”. The rest will be made necessary slaves when needed. I don’t hold to the view point they will succeed. There are too many industries needed…in fact hundreds of thousands….too many parts (millions)…too many materials in the chain needed to keep one complex machine going, to keep all of them going. And the sequestered city states of the elite will need tens of thousands of machines, instruments, process facilities…the list becomes long.
It will not work in the long run. Think of it in energy terms…they will be trying to avoid the laws of entropy, without the required expenditure of energy. Thinking they can do this will a few smart robots is hopium.
if you want to shed 6-7 billion people to make bau run
then all over the world the leaders should have mentality of Genghis khan
Trust me. They will. Or be replaced by someone like him.
Nobody had heard the name of Vladimir Putin on January 1999. Remember?
” you abandon the old industrial era mindset, and change the views to suit today’s reality, you can find out that things can go far, far longer than you think.”
No, they can’t. You have not produced one shred of evidence that modern industrial civilization can survive without a global economy. High tech doesn’t make a lot of sense with small populations. High tech is a response to high populations, as is all innovation.
I think you a person engrossed in fantasy.
” we can still develop enough tech to reach the space and get space resources.”
Where is the energy, among other resources, is going to come from to reach space and transport billions of tons of material over astronomical distances within a reasonable time frame? It sure isn’t going to come from Earth.
So say that we “shed 6-7 billion” and “go to space” to mine more stuff so western style consumerism may continue for kulmthestatusquo and 500M useful eaters.
How long will it take until these 6-7 billion people are replaced by new ones? What was the point of it all??
As long as we just pursue material riches we will never evolve beyond hairless apes.
Have not posted for entire month, for a reason.. Some might call it unnecessary even foolish experiment, we all know about most of the aspects at play anyway, so why bother, nevertheless I opted for direct hands on experience.
I simply dived into one of the most physically challenging jobs out there to study several things first hand, most notably the dissipation and energy throughput in terms of bodily functions, energy, and also some social related aspects.
The late night – very early morning shifts are brutal, but hey I’m bordering the age bracket to weather it at least for a while, few years later I’d not be crazy enough (or have the opportunity) to risk it anymore. Working outdoors open to the elements with filth in various forms (liquid, dusty, ..) plus within rather frantic physical pace manner is no joke. The “survivor rate” of rookies is said to be ~ one in ten or worse for the few early days, I’ve experienced several deep desperation moments to run away as well, somehow I soldiered on.
The crew – coworkers is an interesting bunch, the following is not meant as value judgment, more as an observation. Mostly, the bottom line what they seek in this type of job is to gain some tiny leverage over other plenty of “unfortunates” out there – the pay is small, but still in this age (what about in the future?) somewhat slightly kept above lower working class wage.
Now, the primary effects of such job is as to be expected depleting/ruining the bodies faster than otherwise, it’s quite visible on them and appearing on me as well, hence large “substance abuse” not necessarily on the shift but later (tobacco, alcohol, junk food, even various “speeds”). I’m the only “freak” there refreshing on juices, quality cheese, and various mineral and cartilage supplements, quality thermal management textile gear etc. However, all the precaution is not enough, I’m simply taking out too much in very short time to regenerate sensibly. The first weeks where honestly beyond brutal, e.g. very dark urine content signaling both rapid fat burning of body in overdrive but also other induced hard stresses on the human body.
What we can derive from it, nothing spectacular, but it’s interesting to see it unfolding it personally in times of abundance around. Well, in case of systemic disruptions of whatever nature for our IC, incl. OFW effects, you can take it to the bank that large segments of population are destined to be listed out very fast, it’s one way to discuss it theoretically, quite another to live it through it in sort of suspended regime like this experiment.
That was my personal doom challenge, not sure how long I’ll continue with this project. Later, I might add some other snippets probably more about the class structure antagonisms and “infights” within the inner poor/subjected classes for gaining/securing perceived status at least permanently etc.
I know that the life expectancy of the lower class (or less educated or however you define the group) is lower in the US, compared to the higher class. You are no doubt right that brutal working conditions and abuse of the body to try to maintain energy level in impossible circumstances is part of the reason for the shorter life expectancy.
Most of us would have a hard time working outdoors in subsistence level agriculture, without the benefits that fossil fuels give. Our life expectancies would no doubt drop to much lower levels. If nothing else, there would be a lot of diseases we could catch from the animals, and we would be exposed to toxic substances from insects and plants. Also there would be a significant chance of injury, and little to help prevent infection.
If the agriculture you are referring to is working with domestic farm animals: oxen, horses, mules, chickens and other fowl, I suppose there would be some risk of exposure to disease. Also, the hunter/gatherer lifestyle could be somewhat fraught with disease risk from critters. Even in December, you can’t walk for long in a forest around here without picking up several deer ticks which are now a vector for 4 or 5 diseases if the bite goes undetected for a couple days. But you learn and adapt.
Maybe you learn and adapt. But some people die of the tick borne diseases and other diseases.
All large domesticated animals will be quickly killed and eaten.
Wild animals will run as far and as fast as possible to get away from humans post BAU…
I have mentioned in the past — there are a lot of deer in NZ — too many — you can shoot as many as you like any time of the year — you can leave the carcass in the bush – no need to harvest the meat — they are considered pests – like rats…
I asked someone after moving here why you never see deer on the road — in Canada we have far fewer deer but one frequently sees them on the road side…. in the spring…. but come autumn you won’t see them on the road side much because it is hunting season — and they KNOW it is hunting season — so they head deep into the bush…
The person I spoke to explained the year round hunt — so the deer stay away from humans as much as possible…
Doomsy Preppsies think they will be eating wild animals post BAU…. think again … you won’t have an ATV … or a pick up to drive into the bush in search of a kill…. which means you have to walk for miles hoping to find something to shoot… then you have to drag the dead carcass back home …. work out the return on calories if you do that….
You will quickly realize that your pre end of BAU beliefs…. were actually delusions…. as you lay on the floor dizzy from hunger… waiting eagerly for the spent fuel pond emissions to take you away….
https://i.ytimg.com/vi/MJibEPpJZHg/maxresdefault.jpg
“You will quickly realize that your pre end of BAU beliefs…. were actually delusions…. as you lay on the floor dizzy from hunger… waiting eagerly for the spent fuel pond emissions to take you away….”
Funniest thing I’ve read all day. Have you ever considered writing a graphic novel about collapse? Maybe a screenplay for a movie starring reanimated Jack Palance as the cynically optimistic anti-hero?
More along the lines of Hunter S Thompson …. spliced with Kerouac… Vonnegut… and for a dab of darkness… Conrad….
Fast Eddy is quite busy trying to use up the little time that remains engaging in frequently frivolous activities… so regretfully will not be available to write more than short blasts of shock prose primarily on FW…
However… if anyone knows anyone at a major publishing house who is willing to offer a 5 million dollar advance…. Fast Eddy might be convinced to sign on the dotted line…. buyer beware….
In organic agriculture, there is small risk of picking up a disease from animals. Only our modern factory food agriculture has introduced large scale disease into animals. Animals, if raised and cared for in a healthy manner, ie, not caged, not stuck into a feedlot, with adequate forage and water, will be naturally healthy…the way God designed it.
For example, Salmonella is part of the natural flora of chickens. All of them have it, but all of them naturally have resistance to it and it is not a problem. It only becomes a problem with factory food practices which are inherently unhealthy.
Sheep are giving chemicals to kill parasites … if they are not given these chemicals I understand that they will weaken and die… https://teara.govt.nz/en/photograph/16927/drenching-sheep
Our food supply system is a Frankenstein monster … it is completely utterly reliant on BAU…
Yep, maggots that eat them alive, foot-rot….
Even the sheep are in an illusory fossil-fuelled bubble of good health and comfort.
Glad you are well: excellent experiment to undertake.
I suspect we all tend over-estimate ourselves: I recall reading about how, in the British Army, men over 40 were regarded as next to useless in the trenches on the Western Front – however well-fed and fit, they just lacked the endurance.
What exactly is the job you are performing …. it sounds like you have an apprenticeship in hell…. stoking the furnace?
You have been missed! You mentioned a crew, have you enlisted on a fishing boat?
“Even a small glut normally produces a big fall in the price of a commodity, which eventually leads to increases in demand.”
Gail writes: They really need to the revenue to keep the oil companies going. If they have to fire their employees, they have no chance of extracting the oil later. Other producers also need to keep at least some staff,
Nehemiah: I think some governments will recognize that this is such a critical issue that they will, if need be, subsidize the retention of skilled workers in the industry; not sure about the US. We might let our private oil companies go under if they can no longer pay their bills. That is what we have always done in the past. But if they were banks or car makers…
Gail: so they will keep producing.
Nehemiah: Agreed. However, they will *not* keep exploring or drilling. They will just keep pumping the wells where the costs are mostly sunk and the cost of each marginal barrel produced is low. Just as consumers cannot afford to consume more when their wages are falling and unemployment is rising, neither can the industry afford to keep drilling when demand is low. They don’t have enough money to keep drilling, especially with remaining oil so much harder to get to. Maintaining production from extant wells, not so expensive.
If demand does not revive, or even falls further, some demand will still exist, some of those extant wells will get so depleted that they have to be capped as they become money losers, and production will fall. Eventually, falling production will catch up (or catch “down”) with demand. If at this time the producers have a severe shortage of skilled workers, then it will take that much longer to drill more wells, and so production will continue to fall and prices will rise as much as possible to destroy unfillable demand. If Congress wants a war, they will have to outbid the private sector, the state highway patrols, and local police foreces for a good bit of the remaining oil, unless they want to impose price controls and ration it. But in a free market, falling production will force prices up as long as there remain some users who can pay the higher price. It is not just about what the average driver on the street can afford.
Gail: On the “demand” side, the energy “mix” of the economy is pretty well fixed. Businesses generally cannot switch among types of energy used on short notices,
Nehemiah: This is an interesting point, and I am sure it must be right. When oil prices were spiking in 2008, the price of all energy sources started soaring. This was blamed on “energy switching” in the industrial sector. If that was correct, then the ability to boost the supply of other energy sources even a little bit but be extremely limited, at least in the short term. Less slack in the energy system means more fragility.
Gail: Instead, the US and Europe add more bartenders and more people teaching singing lessons (and maybe an astrologer or two). These people don’t add a whole lot of oil demand.
Nehemiah: Right, but falling production will eventually create the same price shock as rising demand.
Gail: So “eventually” is likely a very long time in the future, for demand growth.
Nehemiah: I agree that at some point demand growth will be extremely anemic.
Gail: “When production falls to a level that is inadequate to meet whatever level of demand remains, prices will spike until they reach a level where the industry concludes that more production will be profitable.”
Gail: This is a faith-based statement. Remember, high oil prices cause wages to fall. You need wages for demand.
Nehemiah: Certainly if wages fall enough, they will reduce demand even further, but wages do not go to zero. Notice that the argument you are making is just a variant of the argument used by “progressive” economists and politicians (including Herbert Hoover, who as not nearly so conservative as his former boss Calvin Coolidge, who said near the end of his (Coolidge’s) second term–his first term was only a partial term because he took over after Warren Harding died in office–“That man has offered me unsolicited advice for six years–all of it bad!” But starting with Hoover, FDR, and Keynes, the thinking as been that unless central banks and national governments intervene dramatically, that the economy will spiral ever downward with falling production leading to falling wages leading to falling production in an endless cycle. Of course, this ignores the fact that every recession or depression prior to the 1930’s was characterized by falling wages, falling prices, cuts in government spending, and sometimes (as in the severe post-war recession of 1921) interest rate hikes (!) by the early Federal Reserve. Yet everyone of those recessions/depressions found a bottom. And the Great Depression that everyone ever since has feared a repeat of, well, it was the first recession in US history wherein people who retained their jobs (as most people did) saw their wages *rise*. Probably due to the spread of unionization, wages in the thirties were “sticky,” and by the thinking of neo-classical (that is, non-Keynesian economists) it was this failure of wages to fall sharply as in previous downturns that explained the persistence of high unemployment and sluggish average growth (1.3% for the decade of the thirties, the same annual average as during Pres. Obama’s eight years). But my point is that falling wages have never prevented a recovery of demand in the past. A bottom was always reached, usually fairly quickly. Our worst recession/depression so far was the first one in which overall wages failed to fall. So I don’t see why falling wages per se would prevent a recovery of demand for oil if the price of labor and the price of energy both fall during a depression. If so, it would be the first time that falling wages ever prevented a recovery of demand, and that is not a statement of faith but of the historical record. When theory doesn’t match experience, I prefer to bet on experience.
Gail: Also remember that there is a long lead-up time to higher production. Five years would be a reasonable expectation.
Nehemiah: Totally agree, and that means prices might remain elevated for a long time even in a scenario with depressed economic conditions due to scarce and expensive energy. Of course, that would require that production fall quite a ways first, but that would eventually happen as extant wells depleted. (I remember when oil was trading as low as sub-$10 a barrel in the late 1990’s, a lot of marginal wells had to be capped, and industry spokesmen said it would never be worth the cost to restart them even when prices recovered.)
Gail: There is a big difference between a spike to $100 per barrel for a short time, and prices held up for a long enough, to a high enough level, that those making an investment will be convinced that they will go out and make a major long-term investment. If prices rise to say, $120 per barrel for five years, there will be a major drop in wages, and “demand” will dry up before the new production comes on line.
Nehemiah: Sure, and falling production during depressions create (in a true free market for labor, which we still had a hundred years ago) falling wages, which reduce demand for the products of industry even further. Absolutely the same process you are describing, yet the vicious circle was never endless. Wages and prices always found a bottom and demand recovered, and falling wages were in fact considered to be the “standard cure” for recessions until they failed to fall in the 1930’s.
Gail: Inflation in general has tended to follow wages in the US:
Nehemiah: Sure, they should move together, barring something unusual. A wage is just the price of labor. In a generalized inflation, you normally expect the prices of all goods to rise (some faster than others), and labor is one of those goods, if you need to hire someone. Many economists take the view that rising wages *cause* inflation, and I can certainly see how they might even if the base money supply were to remain stable, if consumer optimism led to an increase in bank lending to consumers (for purchases) and firms (to ramp up production to meet consumer demand). But that is a self-limiting inflation, because the increased money supply created by bank lending gets cancelled out when the loan is repaid. More worrisome is when inflation starts with a rampant increase in the money supply by the Treasury Dept. or, nowadays, by the Federal Reserve when the latter buys a huge quantity of Federal bonds, with the money to be spent into circulation more or less immediately, that cannot plausibly be repaid.
Gail: Note that the increases in wages preceded the increases in inflation. Of course, commodity prices were the big source of inflation.
Nehemiah: Commodity prices get blamed for “cost-push” inflation–an phenomenon that was first recognized in the 1970’s, but their is clearly some more fundamental monetary chicanery behind cost-push. If the supply and velocity of money do not fluctuate wildly upward, then spending more money on commodities should just leave less money for other things, not drive a generalized price inflation. People will just be able to afford less stuff, and buy less stuff, unless there is something kind of “helicopter money” seeping into the economy.
Gail: The one exception to wage increases triggering inflation was in the mid 2000s, when a lot of funds were added to the economy by lowering interest rates, and encouraging even unqualified buyers to buy homes. Price of homes appreciated substantially. Homeowners took these funds and bought other items, such as cars. Needless to say, all of this money also was available to run up (indirectly) oil prices.
Nehemiah: That is part of the story. Another part is the gentleman’s agreement after the elder Bush drove Saddam out of Kuwait. SA was still the swing producer then and the Kingdom promised to keep prices low for the next ten years as their way of paying for the favor. Then conventional crude and condensate really did peak about 2004 or 2005, supplies were unusually tight, tight enough to be worrisome, at the same time as rumors circulated about war with Iran, and Goldman Sachs began hyping fears of an oil shortage to investors. So there were multiple factors affecting oil prices then. But notice there was not enough money circulating to create an across-the-board takeoff in price levels. It was confined mainly to speculative investments.
Gail: Unless in the future we have some way to run up oil prices (say, lots more government debt at negative interest rates) it is hard to see future oil prices run up by very much, for very long. There is simply not enough “benefit” being returned to the economy from high-priced oil for it to stimulate the economy much.
Nehemiah: There doesn’t have to be. Think about the big run up in gold a few years ago. How much benefit was gold returning to the economy? It is probably the world’s least useful metal. I understand that oil does not rise for the same reasons as gold, but my point is that all you need is perceived benefit to the buyers. There will be people who want oil for decades to come (including the US armed forces, who consume well over 100 million barrels a year and cannot function without it and are relatively price-insensitive) and who will value it enough to pay a premium for it. People who don’t want to freeze to death in the winter will pay through the nose for heating oil. Truckers can pass the cost of diesel on to consumers who don’t want to watch their children starve to death. The asphalt roads will still have to be repaired for the trucks to drive on, even if the price goes to hundreds of dollars per barrel. People will still buy a length of pvc pipe to repair that busted water pipe under the house, and plastic will continue to be cheaper than wood or metals for many applications even if oil goes vastly higher.
Think of it this way: there are already hundreds of millions, maybe even a few billion, people in the world who earn so little money that they contribute very little to the demand for oil, but their presence in this world has never stopped prices from spiking in the past. Even if their numbers increase in the future, their will still be enough total demand from other buyers to spike prices. Or, put another way, how much would global demand have to fall before it got to the level of global demand at the time when oil prices first doubled in the early 1970’s? Or when they doubled again in 1980? both those spikes triggered a “worst recession since the Great Depression,” but the world was still paying those higher prices, in spite of total global demand that was *far* lower than it is today. Adjusted for inflation, those prices were much higher than $50 is today, at a time when world demand was much lower than today.
Nehemiah: “Low demand does not permanently kill prices if surplus supplies continue to be drawn down and new production cannot be brought instantly online before prices rise substantially.”
Gail; We are dealing with an economy that needs to keep growing. Low prices don’t permanently kill, but look at Venezuela.
Nehemiah: Well, Venezuela has more problems than just low oil prices.
Gail: Look at any of the oil exporters, such as Saudi Arabia. Look at any of the US companies that have been investing an inadequate amount to keep future production up. These energy producers will collapse from low prices, over a period of time.
Nehemiah: Oh, certainly some of them will. And that will bring the day when prices revive that much closer.This is an old story in the commodities business.
Gail: If a debt bubble is pricked by raising interest rates, it is quite possible that demand will fall further, and the glut will get worse rather than better. We know that China has reached the limits on apartment buildings that it can build and sell in Beijing, for example. It is also reaching a limit on the amount of steel and aluminum it can export overseas. It is highly leveraged. Defaults on debt are likely to lead more stringent lending standards, and less use of commodities going forward. This could bring prices down further, and add to the glut.
Nehemiah: Completely agree. But this is just a timing issue. Timing is hard, if not impossible.
Nehemiah: (The alternative to supply and demand is rationing, which the US govt. resorted to in the 1970’s, creating those long gas lines that made people so furious.)
Gail: Our problem now is not too much demand; it is too little demand.
Nehemiah: there are ways of dealing with that. One is to subsidize oil prices. Another is for the USG to go on a buying spree and store it for use at a future date, or to sell back into the market if prices start to go higher than needed to stimulate exploration and drilling.. It would not take a huge increase in demand to soak up the current glut. Or you could just wait a few years while production in the Bakken falls. That might soak up the glut all by itself, leaving demand high relative to supply.
But these arguments that it is a lack of aggregate demand that prevent the recovery of prices are just recycled guesswork from the Great Depression. The problem with the argument then as now is that low demand had never before been a sticking point. Demand stops falling at some point and prices begin to recover from that point. In the case of oil, one of these days I expect that it will not be demand that bottoms, but supply that bottoms, but a bottoming of supply has the same effect on the supply and demand curves.
Gail: Our problem is too many people with wages that are too low to buy a home or car. It is caused by too many young people living at home with their parents indefinitely, and by older men dropping out of the workforce, perhaps with an addiction problem.
Nehemiah: Well, the addiction problem I view as a symptom of cultural degradation, like the crack “epidemic” in the 1980’s. Better regulation of drug marketing could help, but, really, the dangers of opium addiction have been publicized repeatedly since well back in the 19th century. I don’t know why people are not way more cautious about using opioids. Life was tough in the ’30’s too, and without nearly as many relief programs as today, yet we didn’t have an epidemic of addiction sweeping the country. I don’t blame this on the economy.
Housing is unaffordable because of the Fed’s bubble-blowing policies (ZIRP). Ditto for those sub-prime auto loans. A lot of people are taking out 6 year loans for new cars who should be buying used cars for much less. Bad judgment by lender and borrower alike. Pre-Keynes, no one would have dreamed of ZIRP policies, and even Keynes was afraid of QE, since he was a life-long inflation hawk.
If you are uncomfortable, just take pill, maybe several. Low interest loan? Snap it up, never mind if you are paying, all costs considered, out of proportion to your income. And if you are a lender, don’t hesitate about extended loans to underqualified borrowers. Just bundle those loans up (home or auto) and off load them onto some sucker. Is the economy burdened by too much debt? Well just blow up some more credit bubbles if you are a central banker, and run bigger deficits if you are the USG. Austerity is unpopular, and even if it is inevitable, kick the can down the road and hopefully one of your successors will have to deal with it and not you. Everyone is a short term thinker these days, and people are encouraged to take the easy way out of temporary pain or inconvenience. Even cheap energy cannot solve some problems.
Now underemployment and the dismally low labor force participation rate is another matter. Right now I think that is mainly because of debt service doesn’t leave enough money for consumption. The solution to this problem is not ever more debt, but debt reduction, which cases austerity, and takes a long time. May the USG could hire young people to rake leaves or something. I don’t see a painless way out. “Buy now, pay later.” We are in the “pay later” phase.
Adjusted for inflation, oil prices for the last few years are lower than they were during the recovery that followed the recession that bottomed in 1982, so I don’t think that is the primary problem we have right now.
As for the eighty-odd year old theory that low aggregate demand keep prices low which keeps profits and investment low which keeps employment, wages, and demand low, well, it was never convincing in the past, it never prevented turnarounds back in the days when the government’s invariable response was to cut spending and, in countries with a central bank, hike interest rates–the opposite of the recommendations in the post-Keynes era–and I see no reason to think that low demand this time will prevent a recovery of prices and profits in the oil industry. If anything, low supply will eventually restore pricing power. I just can’t tell you whether that will be next year or a decade from now. It all depends. If we plunge into a depression before prices recover, then it could be a lot longer. Or, the economy may surprise us all next year, begin to boom, and prices might spike higher than 2008. Of course, that would be followed by another bust, but, no matter how low demand falls, supply will eventually catch “down” to it. Thus, imagine a world where oil was so costly that only the rich could afford gasoline or diesel. There would be a much smaller market, but that small market could afford to pay a great deal indeed for their liquid fuels. However, there are quite a few intermediate levels that must be priced out of the market before it gets that small.
At some point I expect the world will have vast numbers of installed stripper wells pumping the last remaining oil from the earth at a rate of one to a few barrels per day per well, but there will be a lot of those wells, they will not be super expensive to operate, but because total production will be much lower than today, the market will be much smaller by then, and prices much higher. Profit margins will presumably be fat, but with a greatly reduced volume of total production, total profits may be smaller than today.
That looks like the oil industry endgame, but before we get there I expect us to go “off the cliff”, with production plummeting from today’s levels and the world in crisis. And when that happens, I will be shocked if oil is still selling for $50 a barrel.
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=imgres&cd=&cad=rja&uact=8&ved=0ahUKEwjVuenPhuvXAhVY92MKHajtD1cQjRwIBw&url=https%3A%2F%2Finflationdata.com%2Farticles%2Fcharts%2Finflation-adjusted-oil-prices-chart%2F&psig=AOvVaw2fPL_Py4mOaZKi_6SfLT4F&ust=1512294622673857
Our whole system is dependent on the financial system working as before. Even stripper wells cannot operate without some way of sending out checks to the operators of the stopper wells.
I see a fairly short “path” to financial collapse, resulting from stresses to the system–either falling oil production or high prices. It is financial collapse that brings everything down at once. Governments are likely to collapse as well, with the financial collapse. You have way too much faith in our current system.
‘I see a fairly short “path” to financial collapse, resulting from stresses to the system–either falling oil production or high prices. It is financial collapse that brings everything down at once. Governments are likely to collapse as well, with the financial collapse. You have way too much faith in our current system.’
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‘This is not a drill’: Foreign politics expert warns US is slipping into fascism
https://www.rawstory.com/2017/11/this-is-not-a-drill-foreign-policy-expert-warns-us-is-slipping-into-fascism/
Trump is checking off all the boxes of the “Warning signs of Fascism” sign at the Holocaust Museum in DC. Especially the last one “Rigged Elections”…At least that is what the exit polls showed.
Funny, I thought the DNC rigged the elections.
The facism I see is the left.
You could have a totalitarian left.
However, fascism Is the”binding” of the State, Corporation, and the Church, always a rightwing undertaking.
You are full of it Idaho. Hitler was a leftist…a socialist. Socialism is leftwing. Always has been, always will be. I know you have been brainwashed that Nazi fascists were rightwing, But they were leftwing. Lets see…what did they call themselves. The National Socialists.
Their basic promise was jobs and food: for the German army, for the workers. The cross-over from Socialism to Fascism is very easy and in everyday terms the distinction, although real, gets blurred.
I once met a man who played in one of their bands at a rally – he did it in order to eat, having been half-starved in the early 1930’s. Uniform, food, a purpose – who wouldn’t jump at it?
National Socialism (German: Nationalsozialismus), more commonly known as Nazism (/ˈnɑːtsi.ɪzəm, ˈnæt-/),[1] is the ideology and set of practices associated with the 20th-century German Nazi Party, Nazi Germany and other far-right groups.
The Nazis were strongly influenced by the post–World War I far-right in Germany, which held common beliefs such as anti-Marxism, anti-liberalism and antisemitism, along with nationalism. A major inspiration for the Nazis were the far-right nationalist Freikorps, paramilitary organizations that engaged in political violence after World War I.
https://en.wikipedia.org/wiki/Nazism
Exit polls are the gold standard everywhere in the world.
https://imgur.com/a/lokoG
What we need to remember is that exit polls represent samples of exiting voters.
It is quite possible to choose those samples badly. For example, in the Trump-Clinton election, I expect that it very much makes a different which polling places are sampled. The polling places where Trump is likely to do well are likely farther from urban centers than those where Clinton does well. It is no doubt cheaper to send pollers to close-by locations. This may have biased the results.
I suppose that there is also some bias that is built in from the time-of-day when samples are done. I would assume that exit polls are conducted relatively early in the day, since who wants to find out results, long after polls close. This adds a different kind of bias to the outcome.
A third kind of bias has to do with the omission of the large number of voters who vote early, some by mail and some at specially designated places. I would expect that omission of these voters adds another type of bias.
The net result is that exit polls might not be right.
That’s pretty funny … considering the US is run by the E l Ders…. and nobody elected them…
Kinda like a sophomore in college adding material at 4 AM to a term paper?
https://pbs.twimg.com/media/DP_2PLaXkAA8WfL.jpg
Must of took it out of the playbook Paulson had regrading the government bailouts President Bush was given…three written pages
Beavis and Butt-Head episode – it was basically Paulson saying, “Can you, like, give me some money?” Sen. Sherrod Brown, a Democrat from Ohio, remembers a call with Paulson and Federal Reserve chairman Ben Bernanke. “We need $700 billion,” they told Brown, “and we need it in three days.” What’s more, the plan stipulated, Paulson could spend the money however he pleased, without review “by any court of law or any administrative agency
http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104
What’s 700B when 27 trillion has been conjured up since…. and nary a vote was taken.
Funny that…. 27 trillion dollars… and counting… and the politicians were not even asked to comment let alone vote… and the MSM makes zero mention of this
Now that is POWER!
Carmageddon for Tesla (Chevy Bolt is now outselling Tesla)
https://wolfstreet.com/2017/12/01/carmageddon-for-tesla/
Telsa has too much competition, and its getting better every new model year
2018 Nissan Leaf: Turning Over Anew
Nissan’s pioneering EV seeks wider acceptance with greater range, not-as-weird styling, and a lower price.
Would you give the Leaf—Nissan’s gawky, fully electric five-passenger hatchback—greater consideration if it looked like a conventionally styled small car, offered 150 miles of range, and started at $30,875? That’s what Nissan is betting on with the newly revealed, all-new 2018 Leaf, which arrives early next year at dealerships in all 50 states. By giving the Leaf a revamped design, perkier performance, a longer range, and more emphasis on tech, the company is hoping a lot more people will consider going electric.
The 2018 Nissan Leaf packs a 40.0-kWh battery pack, a big upgrade over last year’s 29.9-kWh unit (and the 23.8-kWh pack offered prior to 2016). That allows the Leaf to leapfrog past other low-priced EV rivals such as the Volkswagen e-Golf, the Hyundai Ioniq Electric, the Honda Clarity Electric, and the Ford Focus Electric. Although the Leaf still falls short of the 238-mile range and 60.0-kWh capacity of the Chevrolet Bolt EV, Nissan will take on that model with a 60.0-kWh version, badged Leaf e+, due later next year as a 2019 model.
https://www.caranddriver.com/news/2018-nissan-leaf-photos-and-information-news
I looker over one of these at a Nissan Dealership, nice and at the time the government rebate made it an even more attractive purchase. Too bad I don’t drive much!
Starting at $30k…. so with a few bells and whistles maybe 35k … or 40k…
For a car with a 150 mile range… that will plummet in value much faster than an ICE car….
Or…
https://www.autobytel.com/car-buying-guides/features/10-of-the-best-luxury-cars-under-40-000-128735/
But The federal government and a number of states offer financial incentives, including tax credits, for lowering the up-front costs of plug-in electric vehicles (also known as electric cars or EVs). The federal Internal Revenue Service (IRS) tax credit is for $2,500 to $7,500 per new EV purchased for use in the U.S.
Electric Vehicles: Tax Credits and Other Incentives | Department of …
Department of Energy (.gov) › eere › ele…
Also, the savings at the pump has to be factored in, and believe the car company was backing the battery pak.
For some, it makes financial sense, maybe in a lease.
No doubt, I agree these in no way help the environment.
There’s so much involved in auto production that it doesn’t surprise me that established auto makers can outperform Tesla.
If Tesla goes down before BAU goes down …. then I am betting that the major auto companies roll back or even kill their electric auto lines…
They lose significant cash on every EV sold …. and they only make EVs because they are forced to — and because you need to be seen to have a plan for the future when there are no ICE cars…
Big Auto knows this is total bull sh it …. so they will do the bare minimum required to make it appear that they believe.
Doesn’t gov mandate the sale of some 0 emission vehicles? At least in CA?
From “Pecking Order,”
“You’ll be pleased to know that Janet Yellen, with a reported net worth of about $15 million, is ‘greatly concerned’ about growing inequality, but regrets that the Fed has no purview on this terrible problem. Perhaps Congress should do something, she suggests, like ‘making college more affordable’ — by which she means extending even more debt financing — or ‘supporting early childhood education’ — by which she means publicly funded daycare so that both parents can work in support of the Nudging State and the Nudging Oligarchy.
This is Step Two of the Pecking Order Lie — the provision of massive debt financing to the non-rich, preferably for non-appreciating experiences like going to college or quickly depreciating things like cars and smartphones.
Why? So that the non-rich will FEEL RICH even as they BECOME POORER.”
http://www.epsilontheory.com/pecking-order/
Book Reviews
Less Globalization, More Growth
FINANCE & DEVELOPMENT, December 2017, Vol. 54, No. 4
PDF version
Dani Rodrik
Straight Talk on Trade
Princeton University Press, Princeton, NJ, 2017, 336 pp., $29.95
Straight Talk on Trade is the latest book in Dani Rodrik’s globalization series. The first—Has Globalization Gone Too Far?—raised concerns about social cohesion when large groups of people are left behind by trade and technology. He took his thesis further in challenging the global order in his 2011 book The Global Paradox. The first book was highly controversial when it was published two decades ago, and many economists dismissed it as stoking protectionism.
But time has proved Rodrik right, at least as a political prognosticator. The blowback he warned about has come true. The Brexit vote and the election of Donald Trump set the stage for this powerful and provocative sequel exploring the survival of democracy and globalization as nationalism rises.
Rodrik stresses ideas in shaping policy and accuses economists of overreaching when translating economic models into policy, especially on trade. Theory implies that unskilled labor will lose from open trade policies in advanced economies. But when economists talk publicly about trade, it is always the aggregate gains they emphasize.
Rodrik does not endorse protectionism or embrace deeper economic integration. Instead, he thinks domestic policy space is needed to manage existing globalization. Developing economies need scope to pursue industrial policies, while advanced economies should protect workers from unfair trade practices, he contends. These goals can be achieved without pitting the global poor against low-skilled workers in advanced economies he says.
The stick of trade remedies is better equipped to manage globalization than the carrot of trade agreements, says Rodrik, and countries that protect workers’ rights should be entitled to restrict imports from countries that don’t. The alternate strategy of using trade agreements to prod developing economies into adopting higher social standards is ineffective and gives corporations too much influence over public policy and development, Rodrik argues.
While Rodrik is right about tensions in the global system, blaming economists for the backlash against trade seems excessive. Technology, trade, and demand shifts all reduced the need for low-skilled workers in advanced economies, while deregulation reduced workers’ bargaining power. The current globalization backlash may have more to do with the need for a villain than with trade’s actual role in the process, a point Rodrik concedes. Even so, he continues, deeper integration is a policy choice feeding workers’ anger, which not only puts globalization at risk but stokes nationalism and endangers democracy.
Whereas most economists advocate redistribution and investment in education to manage change, Rodrik argues that it is too late for redistribution and that returns to education take years to materialize. Instead, less globalization and more growth are needed. He proposes green industrial policies and public investment to spur growth. The most novel idea is an “innovation fund,” a public venture fund for new technologies whose profits would be returned to citizens as an income supplement. If successful, it would improve income distribution, but it could also speed the pace of job loss to technology. Rodrik acknowledges that carefully designed institutions would be needed to ensure that industrial policy and state-managed investment aren’t themselves captured. But he does not provide details.
The book offers far-reaching insights on political economy, democracy, and development. A reader expecting a narrative focusing on trade, however, may be disappointed. What is noticeably absent is a delineation of the many benefits of international trade, not to mention a discussion of the long period of global prosperity, poverty reduction, and peace that rising global integration supported.
Caroline Freund, senior fellow, Peterson Institute for International Economics
No suprise, but not a word about energy.
I expect a little more education or technology can fix our problems, if we believe these writers.
Maybe the best way to think of this denial about the role of energy is a sort of assimilation by anthropromorphism – attributing a sense of human ego expansiveness to energy resources.
Educate people to expect a middle-class lifestyle, and disappoint them on graduation, and you will have a worse problem than before……
I agree. The unfortunate people who take a few courses and drop out are worse off than if they had never wasted the money on the courses. Even those who finish the course work are often not really ahead.
https://splinternews.com/2018-will-be-the-bad-year-1820845988
It’s come to this? Elon Musk was on “Young Sheldon” last night….
So, exactly how does Commander Ham’s rocket land perfectly on a barge? Easy, just run the video in reverse.
That looks like Elon’s hair – fake
MIT Study Suggests the U.S. Is Vastly Overstating Its Oil Output Forecasts
https://www.bloomberg.com/news/articles/2017-12-01/mit-study-suggests-u-s-vastly-overstates-oil-output-forecasts
The US Shale Business is “not profitable” and can’t fund itself whether oil is at 100 or 50 dollars a barrel
https://imgur.com/a/t7ulB
MIT Technology Review: Shale Oil Will Boost U.S. Production, But It Won’t Bring Energy Independence
https://www.technologyreview.com/s/507446/shale-oil-will-boost-us-production-but-it-wont-bring-energy-independence/
The world’s largest oil trader Vitol says US oil production will peak in 2018
https://www.reuters.com/article/us-commodities-summit-vitol/u-s-oil-output-may-be-set-for-last-spike-in-2018-vitol-idUSKBN1CF1MZ?rpc=401&
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
Saudi Aramco CEO believes oil shortage coming despite U.S. shale boom
http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html
The study seems to say that the forecast is assuming too much technology improvement in the future. (10% per year).
Yes, it will be a big surprise for many, when the technology improvement stalls… before it falls…
There’s a new method of oil extraction being developed, called VacuTyne in which a hole is drilled down to an optimal depth for oil extraction, then turned vertically, then split off in many different directions. The drilling equipment is removed, a VacuTyne seal is driven into the top surface of the ground over the drill site, a set of super powerful electric suction devices create super negative pressure that over time pulls all liquids and gasses up and into a VacuTyne separator that sends the gasses down a pipe for processing into propane, butane, etc. and other pipes receive different viscosities of liquids, from water to light crude oil to heavy crude. From there they are transported to refining plants to produce products.
The first test took place in Titusville, Pennsylvania just last month and the VacuTyne was hailed a huge success that continues to make big bucks on what was previously considered pockets already tapped out over a century ago. VacuTyne is a subsidiary of Haliburton Services, is expected to have a 99.9% recovery rate and has been certified a massive game changer. For a prospectus on VacuTyne, contact Cloud9.net or Wishful-Thinking.com.
Even if this technique worked, there is a problem that the oil from shale is too light relative to the types of oil that the world wants. This is what we have been reading in the past week or so. Getting more of it out isn’t helpful, unless we can get rid of (flare?) the unwanted portions.
Also, liquid oil can be transported overseas, but it is hard to economically transport natural gas overseas. We can’t get natural gas to Europe for a price that Europeans are willing to pay, even if we can get it out very cheaply.
Oil Basics & The Limits to Economic Growth -Art Berman
http://www.artberman.com/oil-basics-the-limits-to-economic-growth/
Energy is the economy and oil is the master energy resource. • The global economy requires massive surplus energy to extract natural resources, move them to be
manufactured into products and transport them to be sold around the world. • That global economy developed when oil prices averaged $34 per barrel. • When oil prices increased to more than $85 per barrel after 2005, economic growth could not continue. • No business can withstand a 2.5-fold increase in underlying cost and make a profit. • Although oil prices are lower since the price collapse in 2014, they are still 40% higher than in the 1990s. • The average break-even price for OPEC, tight oil, oil sands and deep-water plays is $82 per barrel. That means that production costs have not decreased and that oil is being produced well below its replacement cost. • Economic growth is unlikely at these underlying energy costs
That is a pretty good presentation. I disagree with a couple of his conclusions, but he does a nice job talking about oil and where it comes from. He doesn’t understand that our problem is more than oil; all of the energy products have the same problem.
here is the quote that describe prefect of 7.5 billion humans
The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment
Adam Smith, Wealth Of Nations
https://imgur.com/a/nBgmj
“More than at any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.
I speak, by the way, not with any sense of futility, but with a panicky conviction of the absolute meaninglessness of existence which could easily be misinterpreted as pessimism.”
– Woody Allen
Nihilism postulates reasons for the lack of any reason why things shouldn’t exist. For that reason alone, nihilism is invalid as a philosophy. Snake, tail etc.
“… nihilism is invalid as a philosophy.”
so?
philosophy is trivial… like all human endeavors.
Reality sends us all to the nothingness of eternal death.
ps: don’t shoot the messenger.
and, almost goes without saying:
BAU tonight, baby!
“philosophy is trivial… like all human endeavors.”
This statement contradicts itself because it is philosophical in nature.
On the other hand, it does explain the mentality behind repeated affirmations of BAU.
“This statement contradicts itself because it is philosophical in nature.”
no… it’s a trivial statement, like all philosophy.
you’re trying too hard.
much of what I “say” here is philosophical in nature.
so?
I’m engaging in trivial exchanges. (fun, too!)
no offense to Gail, whose hard work and intelligent blogging is the basis for these exchanges.
anyway…
we are in an age of facts…
2 trillion galaxies in the 13.7 billion year old universe…
facts which make philosophizing an outdated practice.
just think of all the presumptuous philosophy created before these facts became known.
again, I’m actually philosophizing here, but so what?
it’s all trivia.
so is:
BAU tonight, baby!
https://www.npr.org/sections/thetwo-way/2017/12/01/567710447/worlds-largest-battery-is-turned-on-in-australia-as-tesla-ties-into-power-grid
The argument against renewables due to intermittency has in part been countered by the world’s largest battery; Tesla batteries installed in South Australia, to help stabilize the system and ease the power load during peak demand — key goals in South Australia, where the entire state endured a blackout in September 2016.
According to the article, “”South Australian taxpayers will be subsidizing its operation with up to $50 million over the next 10 years,” ABC reports.”
Guess I’ll post this again.
Off the cuff analysis of the costs involved with Tesla’s big battery in South Australia. I’m sure I made some glaringly obvious mistakes but I think the general thrust of the analysis holds well.
From Fortune.com:
“Tesla won a bid in July to build a 129 megawatt hour (MWh) battery and the state is counting on it to be ready by the start of the southern summer in December when electricity demand begins to peak.”
Source: http://fortune.com/2017/09/28/tesla-battery-australia-elon-musk/
While the number 129 MWh sounds impressive, and in fact is impressive compared to previous battery accomplishments, I wanted to do some analysis and figure out some issues related to scalability of the technology. First, how much does this battery cost? From the same Fortune article linked above:
“Analysts have estimated the battery, which will be tied to a wind farm run by France’s Neoen, should cost around $750 to $950 per kilowatt, or up to $95 million. Musk said in July the cost to Tesla would be “$50 million or more” if it failed to deliver the project on time.”
So let’s give Ole Musky the benefit of the doubt and use his numbers: $50 million for the battery.
The point of this battery is ostensibly to “smooth out” variations in Australian wind generation. It is in fact getting connected to a single wind power station, the Hornsdale Wind Farm, so this assumption of it’s purpose isn’t far off.
I wanted to analyze a few facets of this problem:
1. Will the battery provide enough energy to be of significant benefit to the Hornsdale Wind Farm?
2. What about the cost to scaling this up to ALL of Australia?
Aneroid Energy provides a wonderful tool with monthly breakdowns of wind generation from all of Australia’s wind farms, with the ability to remove or add specific farms to the total generation at will, data for the month of September 2017 located here: http://anero.id/energy/wind-energy/2017/september.
The Hornsdale Wind Farm is planned to be 99 turbines in total, connected in 3 substations. Prior to the South Australian blackout of 2016 it was reported to be producing at 86 MW. Total production capacity is planned to be 315 MW. Two of three planned substations are measured, presumably because the third substation only completed main construction in August: (https://hornsdalewindfarm.com.au/stage-3-august-2017-construction-update/) and the Aneroid site has not yet updated.
Output for Hornsdale seems to vary widely between a bottom at 0 MW and a high at 200 MW. This fits well with the planned/(completed but not displayed) third substation and the total planned capacity of 315 MW. Note that at times output is high for a sustained period of around 5 days, contrasted with low output in the 2-3 day range. So just hook up those batteries and it’s smooth sailing, right?
Consider the amount of time in this month (which we assume to be average for this analysis but which of course might not be) that the Hornsdale is not producing at all. That is 2-3 days of losing 200 MW production basically down to, let’s be generous and say 30 MW. Let’s assume the low end estimate of 2 days. For a 48 hour period there is a loss of 8160 MWh. In fact, Musk’s battery, with it’s 129MWh storage capacity, cannot supply lost generation from the Hornsdale for even a single hour. It would require 63 batteries, at a cost of 50 million each, to “smooth out” the Hornsdale’s output for 2 days. And we are only considering 2/3 of Hornsdale’s total output.
So what are they thinking? Is the company that owns Hornsdale Wind Farm really willing to shell out 50 million for less than an hour of storage capacity? Of course not:
“SA wanted expressions of interest from the private sector to build and operate a big battery. Taxpayers would contribute and the Government would have the right to take energy from the battery when demands dictated.
The state got 91 expressions of interest from around the world. Neoen and Tesla’s bid was assessed as the best.”
Souce: http://www.abc.net.au/news/2017-07-07/what-is-tesla-big-sa-battery-and-how-will-it-work/8688992
So the taxpayers are footing significant portions of the bill for this useless thing.
Ever since running these numbers I’ve been pretty flabbergasted that this project could go through at all. I then noticed a paragraph in the Fortune article that I had somehow missed:
“The battery has been designed to help cover temporary dips in wind power, say for 15 minutes, or help control frequency on the grid at times when gas-fired plants are unable to help balance generation and power demand.
‘What they’re trying to do is buy a little bit of time for other systems to respond to fluctuations,’ said Bikal Pokharel, an analyst with energy consultants Wood Mackenzie in Singapore.”
Well there you have it. The people involved are well aware that this battery is next to useless, and are going ahead with building it anyway. It’s clear that this is a wonderful publicity stunt for both the Australian politicians involved and for Elon Musk, who took a big risk with his bet that “It will be finished in 100 days or I’ll foot the bill”(paraphrased). But with headlines like the following, it seems like that bet has paid off big time:
“Elon Musk’s big battery brings reality crashing into a post-truth world”
Source: https://www.theguardian.com/commentisfree/2017/jul/07/elon-musks-big-battery-brings-reality-crashing-into-a-post-truth-world.
“Tesla’s big battery races to keep South Australia’s lights on”
https://www.reuters.com/article/us-australia-power-tesla/teslas-big-battery-races-to-keep-south-australias-lights-on-idUSKCN1C40DD
“Tesla’s big battery will change power and politics”
https://www.treehugger.com/energy-policy/teslas-big-battery-will-change-power-and-politics.html
With headlines like these driving the sale of Tesla’s stock it seems obvious why the battery is being built.
So, as a fun little experiment, what would be the cost, in terms of these batteries, to smooth out all of Australia’s wind generation intermittency for say, 12 hours?
We see a variation between 3 GW and 500 MW. To the system’s credit, periods with no or low wind are smaller, indicating the benefits of having wind stations spread over a wide geographic area. However, since at least one period lasts about 2 days, knowing the cost to store that spare capacity in a lithium battery for 12 hours should be instructive. Output varies about 2.5 GW. So for 12 hours at 2.5 GW of capacity we need 30 GWh of storage capacity. That means we need a whopping 232 of Tesla’s Big Batteries!
Total cost for all of Australia for 12 hours of intermittency relief(Of whatever percentage of their grid is run on wind): 11.6 billion.
Total cost for 2 days of intermittency relief: 46.4 big B’s
CBs can finance that at zirp…. and repayment terms are interest only 🙂
Have the government pay for it as well. Keeps electricity prices from rising too high. Government debt can be 100 year debt with zirp as well.
I am waiting for personal loans to be offered… pay the interest only for 100 years…. interest rate 0%
That will signal peak desperation
Sign me up!
on a side note all the leader in modern times
remind of great song
https://youtu.be/29Mg6Gfh9Co
I think I have a song that’s opposite to this.
The most troubling part of that unsettling movie.
I’m starting to get that Déjà vu feeling, unfortunately.
reminds me of the irrelevance of the universe…
https://www.youtube.com/watch?v=w0shWISKpNA
enjoy the journey!
or not.
Well now…is this a surprise?
Victorian logging could trigger ecosystem collapse, researchers say
Decades of unsustainable logging has created an “extinction debt” in Victoria’s central highlands that will trigger an ecosystem-wide collapse within 50 years without urgent intervention from the state government, ecologists have warned.
Modelling says there is a 92% chance mountain ash forests will not be able to support current ecosystem by 2067 of unsustainable logging has created an “extinction debt” in Victoria’s central highlands that will trigger an ecosystem-wide collapse within 50 years without urgent intervention from the state government, ecologists have warned.
If current logging practices continue, or if the forests experience another Black Saturday level bushfire, the likelihood of collapse approaches 100%
Can’t we just add if BAU continues the likelihood of collapse approaches 100%….for everthing
https://www.theguardian.com/australia-news/2017/dec/01/victorian-logging-could-trigger-ecosystem-collapse-researchers-say
Nothing can save us. We are mortal beings and everyone is going to take a dirt nap sooner or later. However, we can have some compassion for those that come after us and will have to deal with the earth that we have left behind after we are gone, which is still not a completely unlivable place.
I doubt anyone survives…
But even if a few remote tribes have a chance and making it through…. I would prefer the CBs do whatever it takes to delay the explosion … by a month.. or a year… even if it results in a death sentence for those tribes…
… actually… even if it does not buy us time … I would want the CBs to do everything in their power to ensure all humans are wiped off the face of the earth…
We are cancer. Irradiate every last one of us.
Isn’t it ironic that we are going to do exactly that to ourselves…. we are going to exterminate every single one us just as an oncologist would attempt to do with a patient who has cancer.
Get on your knees and worship the spent fuel pond…
https://ladygeekgirl.files.wordpress.com/2016/10/planet-of-the-apes-bomb-service.jpg
I mostly agree, but a world without those tribes, contingent on a world without wild animals–a world of cockroaches, pigeons and rats–would be a good exit point instead.
This guy is a deputy for the green party in Norway. Climate psychologi and storytelling will save us!
https://www.ted.com/talks/per_espen_stoknes_how_to_transform_apocalypse_fatigue_into_action_on_global_warming/up-next#t-888030
Taking CO2 out of the atmosphere and storing it underground. I don’t think that the “Storing it underground” part will work. Who wants to live near a reinjection site? The CO2 could smother you if it got out. The cost of trying to store it would be unreasonable. The liability issues would be huge.
I don’t understand this …. why do we need to store carbon?
We still have a half a trillion tonne budget to burn through before it becomes a problem — at least that is what the gggg wwww scientists are saying…
And they are usually wrong — so assume we have double … or even triple this left to burn
https://www.theguardian.com/environment/2009/apr/29/fossil-fuels-trillion-tonnes-burned
I’ve heard elsewhere that if we improved our use of agricultural land by 2% we could totally offset all annual discharged carbon. That part is actually easy. Of course we won’t do that because changing agriculture would collapse the global economy, mass starvation, fuel ponds, yadda yadda.
Why does everyone think the only way to change something is to do it all at once?
Because nobody wants to be the only one making sacrifices ? Also, due to the way to political ecosystem was reconstructed in recent decades (identity politics), sacrifices forced on one group would often be perceived as enemy action from another rival group.
Hey, I just arrived here, greetings to all and specially to our host.
Mr. Musk finished its megabattery, so, maybe, some more Tesla Models 3s will be produced:
http://money.cnn.com/2017/12/01/technology/tesla-battery-south-australia/index.html
100 MW = 1 hour for 30 000 households…
“100 MW = 1 hour for 30 000 households…” – Yes. Crazy power usage.
Expecting our aging electric grid (which already struggles in peak months) to also power transportation is being very unrealistic. That would be a huge additional load. And then to further expect electric rates to stay the same is even more delusional.
“100 MW = 1 hour for 30 000 households…”
That’s with no other source than the battery system, but what it’s intended to do is reduce fluctuations in power delivery due to intermittency of renewables. You know, smooth things out. Let’s not pass judgment on it before it’s even been up and running for a few months.
When I read a statement that 100 MW = 1 hour for 30 000 households, I stop and think, “We don’t really provide electricity for households, separately from electricity for commercial (stores and offices) and industrial.” In fact, residential is something like one third of the total. So perhaps the article should say, the battery provides electricity for 10 000 households and associated businesses for 1 hour.
How long coverage is provided also depends greatly on whether it is a high demand time or low demand time. The peaks are in summer, when air conditioning is on. The secondary peaks are in winter, when electric heat is on.
Exactly, no industrial usage is mentioned – as if it did not exist…
And with the LED lighting and other energy saving home appliances that are more and more used by the energy starved people, that share of energy consumption of the houses must be sinking, but the share of the industry use must be rising, due to the more and more sophisticated products for energy saving purposes of the homes…
I think the writer just wanted to give readers some way to wrap their minds around how much power 100MW is. People have no idea how much is used by businesses (whose usage is highly variable) but people can understand 30,000 households. That doesn’t mean that all of it will go to households. Perhaps the writer should have made that clearer.
This was my view from the backyard …. well… there was no smoke back then
It’s lucky you aren’t living there now as the natives might get the idea of sacrificing you to appease the anger of the deities. A friend of mine who has spent some time in Bali tells me that the locals tend to build their temples and their houses with the back of the structure oriented toward the mountain. So I checked on line and found this at Wikepedia.
The principle of Balinese architecture — such as the proper size, location, and alignment of building types — is written in the Asta Kosala Kosali. The Asta Kosala Kosali are eight guidelines for architectural designs originally inscribed in ancient Javanese on a lontar (palm-leaf manuscript). According to the Asta Kosala Kosali, the universe is divided in three: buhr (underworld, realm of the demons), buwah (human realm), and swah (heaven, realm of the gods). This cosmic division is reflected in the geography of Bali: the central mountainous area (especially Mount Agung) is seen as the abode of the gods, while the sea is associated with malevolent spirits; the in between coastal plains and foothills represent the human realm.
This hierarchy of realm is reflected in the Balinese cardinal direction. There are two main cardinal directions of Balinese universe: kaja and kelod. Kaja means “to the mountain” (Mount Agung) and refers to anything that is higher or sacred. Kelod means “to the sea” (abode of the demons) and indicates low and profane places. As most of Bali’s population live to the south of Mount Agung, the main cardinal direction corresponds to a north-south axis running between the central mountain range (Mount Agung in particular) and the sea; however this can be different with the northern Bali Aga. The secondary directions of Balinese cardinal direction are kangin (where the sun rises, East) and kauh (where the sun sets, West), in this instance kangin is associated with life, and therefore sacred, while the kauh is identified with death and is considered profane. Thus the northeast (kaja kangin) is regarded as the most auspicious direction where family shrines are built, while the southwest (kelod kauh) is the most impure. This cardinal direction concept plays important roles in organizing many aspect of Balinese culture including a Balinese house layout.
Bali is one massive DelusiSTANI province… there is the religious aspect… but then there are the foreigners who show up believing the BS that the Balinese are somehow different than the rest of us — gentle — kind — humane
What a total load of horse sh it.
Here are just a few incidents that I am personally aware of
1. Jungle Track Turned into a Motor Cross Raceway to Extort Money
The owners of one secluded, quiet villa one day returned from overseas to find that the owner of the adjacent land had allowed a path down to the river to be turned into a race track for motor bikes. Every day, at 4pm, the engines began to roar as locals raced back and forth through the jungle. Weekends were worse as they ran all day Saturday and Sunday. This only ended when a USD10,000 fee was paid to the neighbouring village.
2. Neighbour Plants Trees to Block Views to Extort Money
This is one of the most common strategies used by Balinese to force foreigners to pay them money. When the know that a foreigner has bought a property they will immediately plant fast-growing trees or bamboo with the intention of blocking the view. Within a few years these trees become a problem and the foreigner is left with two options: pay a ridiculous prices for the land where the trees are planted or pay the neighbour to cut the trees down. Of course he will wait awhile then plant more trees!
3. Burning Plastic Rubbish to Extort Money
The way this works is that the Balinese will build a fire and feed it with plastic bags and other rubbish. The toxic smoke inevitably drifts across to your property. Quite often the neigbhour will require that you hire a member of his family to work for you in order for this to stop. Obviously if you do agree your new staff understands the terms of hire and does little or no work. Villages employ this strategy to force hotels to hire additional staff from the village.
4. Flashing Mirrors in Guests Eyes to Extort Money
A major luxury chain had a big problem with this. People in the adjacent village would take mirrors and reflect the sun into the faces of guests who were relaxing poolside. Again, the purpose is to try to force the hotel to hire more people from their village. There is usually a cash option paid to the village in order to stop this from happening.
5. Planting Drugs on Foreigners
There have been incidents where powerful Indonesians tried to force foreigners to sell their properties. If they refused, all sorts of criminal strategies may be deployed to ruin the property owner’s life. The most well-known incident involved a long-term elderly resident of the island who had drugs planted in her car during a dispute over the property she owned.
Gentle and kind my as.s
Utop ia … my a ss
No different than anywhere else
Just tricks and extortion today, but machetes when the real problems start….
Well… we used to have a cat and a dog… then the neighbour had secretly tapped into our water line …. we kept hearing the pump go on at night and wondered what was going on … a search of the property turned up the tap…. we informed him that if he was short of water and asked that we would accommodate…. but that we did not want him just taking….
Not long after… our cat ended up with his head hacked off …. and someone busted our dog’s back with a large rock… he failed to return after dark and I found him suffering in a gutter unable to move his hind legs…
Now that I am gone I am tempted to make a donation to laskar to give that little monster a few smacks in the head…. but there are other foreigners nearby and that would not help their village relationships….
And the kicker… when we moved there we paid $2000 to have a mobile eye clinic come in and check all 500 people in the village + remove cataracts on 6 blind people…. kindness is over-rated.
My charity efforts since then have been restricted exclusively to assisting family members who need some help with tuition… f789 the third world… f789 the losers in the first world who were unfortunate enough to be born to loser parents and who, in spite of free govt education programmes… insist on perpetuating the cycle of loser-dom. Pravda NZ drones on about how I need to contribute such and such to help families who cannot afford Christmas gifts…. I’ve got a niece and nephew showing up in a couple of weeks …. they get one book each … and their parents give them one gift each (and it ain’t an i-phone…)
http://fineartofdecalsimages.s3.amazonaws.com/RantModeOff.jpg
I am forever amused when I meet people who have just moved to Bali gasp in wonder about how gentle and kind the people are….. just give it a couple of years is what I am thinking…. and they will either leave — or they will start making excuses for them….
The veneer is ultra thin in places where people barely have enough….
https://thewest.com.au/business/renewable-energy/pilbara-solar-and-wind-plant-bigger-than-greater-perth-to-power-south-east-asia-ng-b88676837z
Can i have a “lol” ?
http://www.straitstimes.com/asia/east-asia/why-parts-of-beijing-look-like-a-devastated-war-zone
Might just be a building that has been demolished to make way for a new structure.
I posted something related to this a day or two ago from the WSJ. It made the situation look sort of benign. I think this is a much better description of the problem.
China has been trying to raise the standard of living of its people, gradually. It has been doing this, by gradually moving people to cities, and giving the people nicer homes and access to jobs. I presume it has been doing some mechanization of agriculture, so that fewer farmers are needed.
With China’s coal consumption peaking, the wages on the jobs in the city aren’t growing as much, as I mentioned in my last post.
The so-called migrant workers (from outlying Chinese areas, but without papers allowing them to be permanent residents in Beijing) have been taking some of the lower paid jobs. They don’t have access to schools or hospitals. Apparently China has decided that the city is just too crowded. If cannot really afford the services needed for all of the people. The people at the bottom are being sent back to the villages where they came from.
I agree with you. This looks grim. With a totalitarian government, it is possible to fix situations quickly. But it leaves a lot of people more or less homeless in cold weather.
Don’t know what to make of this, but sure looks grim:
I watched the NBC nightly news the other night. And they said the unemployment rate had just gone down. Then Lester Holt says but economists say that the number went down due to workers dropping out of the labor pool..So the number is going down not because people are finding work but because the government is not counting all of the unemployed. The unemployment number also has been fiddled with going back all the way to the JFK administration. I get the Indianapolis Star newspaper on my twitter feed. And one day this year they wrote a story saying that Indy’s homeless population increased by 10 percent from the year before. Then two days later they wrote a story saying their states unemployment rate was at the lowest level in 15 years…You see why the unemployment numbers are going down now?
good point, Doomer.
just think…
the Great Depression had high unemployment, but those persons had 70 years of cheap oil ahead of them, to create the good jobs of the post-war era.
now, almost all of that job-creating cheap energy is in the past.
ps: “_ _ _” tonight, baby!
You should have seen the skeptical comments people were saying on the story about Indy’s low unemployment rate..People are starting to wake up, which makes sense because you can’t fool people forever!
Yeah, BD, the govt. does not count people out of the system. People given up on finding employment, living on the streets, in their cars, in their parents house. Out of sight, out of govt. stats. There are who knows how many people that are not counted and the numbers are growing. Stats are manufactured to help those still in the system ‘think & feel’ like things are good. But they can get worse; when the next recession hits, look out because there are millions on a razor’s financial edge.
It’s behind a pay wall, but the headline is scary enough:
‘Bank of England warning over debt: borrowing puts UK at risk of Venezuela-style collapse, official warns’
http://www.telegraph.co.uk/business/2017/11/30/huge-government-debts-put-uk-stability-risk-warns-bank-england/
‘WORSE THAN 2007’: Top Central Banker warns of looming wave of worldwide bankruptcies
http://www.telegraph.co.uk/finance/financetopics/davos/12108569/World-faces-wave-of-epic-debt-defaults-fears-central-bank-veteran.html
The world is drowning in debt, warns Goldman Sachs
http://www.telegraph.co.uk/finance/economics/11625406/The-world-is-drowning-in-debt-warns-Goldman-Sachs.html
Debt is everywhere. The debt has exploded since 2008. Unless some cheap liquid fuels are discovered soon the debt will lead to worldwide bankruptcy.
“Absurd doesn’t do this situation justice. We are mind-bogglingly leveraged. And consider [that] many individuals and businesses carry no debt at all, or certainly less than 350% leverage. That means many others must be leveraged far higher. While lending has been a very lucrative business in recent decades, it’s hard to believe it can last. At some point we must experience a great deleveraging. When that happens, it won’t be fun.”
http://www.marketoracle.co.uk/Article60890.html
It seems like the banks don’t care about the risk. Just type money into accounts and collect the interest. What’s the worst thing that could happen?
Same here over the pond
enate tax bill stumbles on deficit-focused ‘trigger’
Susan Cornwell and Amanda Becker
Demonstrators gather outside the U.S. Capitol to protest the Republican tax plan as it works through the Senate in Washington November 30, 2017.
REUTERS/JAMES LAWLER DUGGAN
U.S. Senate Majority Leader Mitch McConnell (R-KY) walks from the Senate floor to his office during votes on the Republican tax plan in Washington November 30, 2017.
REUTERS/JAMES LAWLER DUGGAN
(Reuters) – A Republican tax overhaul stalled on a procedural issue in the U.S. Senate on Thursday, forcing lawmakers to weigh new options to an amendment sought by a leading fiscal hawk to address the bill’s projected large expansion of the federal deficit.
Senator Bob Corker wanted to add a provision that would trigger automatic tax increases in years ahead if tax cuts in the bill failed to boost the economy and generate revenues sufficient to offset the estimated deficit expansion
http://mobile.reuters.com/article/amp/idUSKBN1DU1DS
Corker’s “trigger” amendment was needed to win his vote for the bill, as well as the votes of other Republican senators worried about the deficit. Those worries were raised after congressional analysts said the bill would not boost the economy enough to offset the estimated deficit expansion, as the Trump administration had said it would
then any G20 country with “huge” debt is at risk for collapse…
OFW hashed this out awhile ago, when the consensus seemed to be that weaker peripheral countries (eg Venezuela) were more apt to collapse earlier…
the “bigger faster stronger” more central countries are likely to survive longer, and these countries actually may be trying to “export” financial problems to these lesser countries.
so, what’s the rub?
is the UK a stronger central country or a weaker peripheral one?
I’m not sure if this answers your question, but the UK seems to have more poor areas than the other countries in Northern Europe. So I’d judge it as a weaker central country that may be heading for peripheral status.
https://static.independent.co.uk/s3fs-public/styles/story_medium/public/indy100/eJ0axHCqmx/18477-6rv6cn.jpg
I think the decline in the UK’s oil production has made it very much weaker. These are a couple of free pre-made graphs from mazamascience. http://mazamascience.com/OilExport/
Back prior to the mid-1970s, the UK was an oil importer, but oil was much cheaper back then. When the North Sea oil began production, the UK was an oil exporter for a time, and was quite prosperous. Once the oil began to decline, the UK’s prosperity ebbed. You can see that the UK is again an oil importer.
Equally important is total energy consumed. That is the top graph on the following chart:
You can see that for a while, natural gas consumption ramped up, to offset the loss of coal consumption. Oil consumption stayed relatively level. But after about 2006, total energy consumption began to decline. This is not a good sign at all. Total energy consumption tends to correlate with material prosperity. The economy can be “hollowed out” and still appear to produce GDP, but the jobs that pay well, that depend on energy supplies, are missing.
Household debt in OECD countries is through the roof… and CBs are issuing warnings…
Nearly 100M Americans are not working …. and reals wages are declining …. the situation is surely similar across the world….
http://www.zerohedge.com/news/2017-11-03/people-not-labor-force-soar-record-954-million-968000-drop-out-one-month
http://www.zerohedge.com/news/2017-11-15/americans-real-wage-growth-contracts-3rd-straight-month-first-time-2012
What I do not understand is that in spite of all of this …. we do not get a deflationary death spiral…
We get some weak numbers from time to time …the consumer teeters but we never hit a tipping point…. how is this possible?
Are we witnessing a miracle every day?
But the real economy is still doing ok, while CB print enough money to keep the “growth” going.
It’s true. With so many having dropped out of the workforce permanently, may of whom that must have mortgages, why aren’t we seeing massive numbers of defaults and price falls? Instead, house prices seem to be on a tear everywhere nowadays.
What are we missing here?
Don’t matter if you sell your house or refinance, we get lot of credit to consume and most consume more than ever.
The rich is rich on paper. If they tried to realize their fortune into stuff they would unleash the deflationary death spiral.
Sure, I get that bit. But if people are forced to sell, because they can’t the make payment on the house and have the bank breathing down their necks about it, surely that would affect the perceived value of their neighbours properties also.
Very low interest rates make payments for homes relatively affordable. Also, the 1% (and even the 10%) are doing reasonably well. They see a house as a “store of value” and will spend on one, even if the price is very high.
In Australia, home prices are often very high indeed, because of Chinese who are trying to store value/ move away from China. I understand in Australia, there are quite a few interest only loans. To some extent, purchases of homes by foreigners is an issue in the US as well.
Energy prices are very low for oil, coal, and natural gas. I think that this is a symptom of the low wages.
Saw this on the UK…there is such a thing as living too LONG..
Gail, afraid you are correct, not enough surplus to care for the old folks
Care home sector ‘on the verge of collapse’ unless it fills £1 billion funding gap
Read more at: https://inews.co.uk/essentials/news/health/care-homes-crisis-funding-shortfall-collapse/
The care home sector is on the verge of collapse leaving hundreds of thousands of elderly people at risk of being forced out of their residential homes, the competition watchdog has warned in a “devastating” report. The Competition and Markets Authority (CMA) said resident fees paid by councils failed to meet care home costs, causing an an unsustainable £1 billion a year shortfall and ramping up prices for those paying for private care. Private care home residents are being charged 40 per cent higher on average than the amount paid by councils – the equivalent of £12,000 a year – as care homes desperately try to prop up their finances, the watchdog found. As part of its year-long investigation, the CMA said it was taking a number of care homes to court in a clampdown on those charging families for “extended periods” after a resident has died, or demanding unfair upfront fees. CMA chief executive Andrea Coscelli said: “Care homes provide a vital service to some of the most vulnerable people in society. However, the simple truth is that the system cannot continue to provide the essential care people need with the current level of funding
Bummer, just when I’m ready to collect…its all outta cash
To which one might add that the private patients pay their fees from the sale of their houses in the bubble real estate market.
If the housing market plunges, etc, those fees will not be met by them either.
And this is, really, very early days in the elderly care crisis in Britain, and throughout the ageing economies.
Maybe the Russian Death by Vodka at 55 plan is the best one – it solves many problems? And leaves the women in peace: they prefer cats at that age anyway.
I have suggested to people that they not buy long term care insurance, unless their health is so bad that they think they will need it quite soon. Trying to keep this whole system operating is terribly expensive. Insurance companies selling the insurance have been struggling.
We are doing way too good a job of keeping the elderly who are in poor condition alive. I know a woman whose mother-in-law lived with their family for about three years, occupying the family dining room on a hospital bed. The mother-in-law was sufficiently senile that she did not know her own name. Yet the daughter-in-law faithfully made sure that she took all the meds available for other conditions, and that she got all of the immunizations available. At least she kept the mother-in-law at home, except when she had a medical problem, when she was rushed to the hospital (for what purpose?). I am afraid if it had been my mother-in-law, she would not have been treated as well. Of course, once a person gets trapped in the health care system, in the US they make certain that they do everything they can to keep the person alive.
At some point I think the culture of sympathy represents a decreased ability to deal with mortality in a reasonable way. A predicament, really. Our technology has given us possibilities that we really can’t afford. Having new possibilities changes peoples sense of what is ethical. I’m not sure we were made to have to make these kinds of decisions. At some point in history making magic tea, praying for our loved ones, or some other cultural act helped people face death without undue guilt and denial. I think now that someone has to make the decision it is too easy to make no decision, which wouldn’t be so bad if it didn’t mean that (A) a particular industry was profiting off of it, and (b) at best we have passed on the consequences of our use of medical resources to the future. I think people are very brave who make it clear they don’t want such steps taken. My grandmother recently passed away at the age of 96 and refused life extending treatment as part of her wishes after a stroke. She was always a dignified lady and had told us she already had a rich long life.
“Hospital thrown into panic by unconscious patient’s ‘do not resuscitate’ tattoo”:
http://www.dailymail.co.uk/health/article-5134609/Hospital-panic-patients-not-resuscitate-tattoo.html
The article says that in Florida (and I am sure in other states) the Do Not Resuscitate Order has to meet certain criteria, including being written on yellow paper.
It is frustrating that the system is so complex.
Also, people have strong feelings. I know that my mother-in-law wanted my father-in-law to have brain surgery at age 90, even though he had not been doing all that well mentally earlier. In fact, based on her wishes, he did have brain surgery, and lived a few more years (but was terribly confused in his later years). Her reasoning was that she absolutely did not want to die first. Being a widow would have been just terrible for her.
In NZ… it is my understanding that if you are older… and particularly if you are in poor health…. you drop down the waiting list for surgery ….
Of course the national health plan people – and the doctors — will not acknowledge that this is a ‘death panel’ at work….. however it most obviously is.
And it makes a lot of sense …. put them low enough on the list and they will die from something else while waiting.
We seem to have enough doctors that no one has to wait.
My mother-in-law did not seem to stop and think, “If I marry someone several years older than I am, there is significant change that he may die first. I can’t expect the healthcare system to keep him alive so I can be the first one to die.”
I’ve got a contact for someone in Europe who can ‘organize’ dying first …. she’s kinda like an Event Planner… touch base if needed. There are no fees – she has more cash than she knows what to do with as it is…. this is her hobby.
Indeed, I heard on the radio last week the end of a program that discussed how the majority of doctors are adamant about refusing treatment for themselves in these situations..
Here’s the whole program, but from 43 mins on,it’s worth listening to.
http://www.radiolab.org/story/dead-reckoning/
One important departure from your analogy, Gail, is that in a video game, when you lose, you can just restart at the beginning again! Here in the real world, we aren’t going to be so lucky since it will be a very different beginning.
I am afraid you are right. Unless the people who believe in heaven are correct. Then there is a “start over” somewhere else option.
I loves me some record highs!!! Put another quarter in the machine and let’s have some more fun!!!!!!!!
the stock markets are all Whiskey Tango Foxtrot…
Kurt, can you confirm?
over.
Uh, roger that.
https://www.cnbc.com/2017/11/30/us-stocks-dow-record-high-tax-reform-senate.html
The Have’s are pre-celebrating the tax code change assisting the Have’s with a huge day on Wall Street! Dow up over 300 points. No collapse yet.
Celebrating. Yes. Meanwhile, here is one of many problems we are not celebrating:
More than 60% of U.S. fuel pipelines were built before 1970, according to federal figures. Recent fires and disruptions on the Colonial Pipeline fuel delivery cause problems for the East Coast. The Colonial Pipeline was fully operational in 1964. It delivers a daily average of 100,000,000 US gallons of gasoline, home heating oil, aviation fuel and other refined petroleum products to communities and businesses throughout the South and Eastern United States.
Source:https://www.wsj.com/articles/aging-pipelines-raise-concerns-1478128942
Source:https://en.wikipedia.org/wiki/Colonial_Pipeline
There is the issue, too, that it doesn’t make sense economically to replace a pipeline until it completely falls apart. In theory, anything major like a pipeline you would want to replace some portion of it each year (Say 2% on pipeline with a 50 year lifespan). But this isn’t easy to do. Once it is buried underground, it is out of sight; out of mind. The companies send “pigs” to evaluate a pipeline from inside, but eventually the whole thing likely needs to be replaced.
The analysis of the nonpartisan Congressional Budget Office found that people making less than $100,000 a year (approximately 80 percent of American households) will have their taxes increased under the republican plan while the millionaires and billionaires will make off like bandits.
https://imgur.com/a/vtLHN
It’s a Y in the road and the R’s have chosen the Have’s. They’re abandoning the masses, although they will continue to convince them it’s the right thing to do to vote for them because of social issues, but economic issues are just for their base.
In light of the abundance of negative and irrelevant comments why don’t more folks share what they’re spending their money or time on these days? If everyone agrees we’re all going to die soon why waste time? I’ll start.
I walked away from my job last month and declared myself retired in my 30’s. I decided to spend more time with my kids because money is no concern. This summer I grew a pot plant (legally) and smoked it out of cigars like some kind of monster. I bought a new car last month and plan on installing a sound system with tint. My therapist died last week from cancer and I currently suffer from an abundance of mental health problems.
Come in tango alpha foxtrot. Come in please. Identify yourself. This is command, please identify. We have you a Zulu Zulu tango. Please confirm.
In legal states cops have better things to do. Heck I don’t even see meth houses getting bothered anymore.
“In legal states cops have better things to do.”
I had a Sherriff tell me they no longer investigate property damage.
Pretty much police now are just clean up crews. They come in ‘afterwards’ and tie tape around things, write a report, remove the tape, leave and file the report with no follow up.
Nice to hear it is like that everywhere.
Totally. I watched this sheriff show up 3 hours after I call him only to take 2 drunk thugs and refuse to issue a dwi after they were trespassing and got their truck stuck.
For me work is part time, I have no kids, I paint, I cook from scratch, I live frugally, I try to see the best in people. I try to avoid stress and I like to have a bit of a laugh.
Whiskey Tango Foxtrot Oscar…
breaking news: the Universe contains 2 trillion galaxies and is 13.7 billion years old.
what was that about irrelevant?
maybe this will cheer you…
BAU tonight, baby!
Kurt…
can you confirm?
over.
Roger that.
I worked part time before throwing in the towel. In the end it just wasn’t enough time to do the things I want. I cook some from scratch as well.
‘This summer I grew a pot plant (legally) and smoked it out of cigars like some kind of monster.’
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I want to like pot … I have this romantic vision of swaying back and forth on a hammock and smoking dube after dube…. but sadly it doesn’t do it for me…. most unfortunate considering how readily available it is in NZ 🙁
What am I pissing money away on? Nothing much really… I am content to spend a great deal of my time on the coast listening to the ocean and running on the beach with my dog and Madame Fast…
I have reduced my resistance to paying more than 20 bucks for a bottle of wine … and now go for the good stuff only… 40+ bucks… I am borderline aristocratic …. but what the hell… I will be dead soon .. and I don’t drink enough to cause insolvency… or cirrhosis…
Madame Fast is forever laughing at me and telling me that I am mentally unbalanced… and my dog looks at me sideways most of the time… but I feel that I am perfectly abnormal… which is a noble goal…. after all… who would want to be ‘normal’ …
Let us know what ails you … we are here to help – no charge (I do hope that is not Fast Eddy that is throwing you out of kilter…)
The glow of a good vintage in the glass is better than rubies or gold. The gods gave us wine to make life bearable.
We were finally able to start making wine just recently. It usually is not very good, but that odd decent batch is getting more common. Cant really sell it, so …
You need to find some worthwhile things to do with your time. Figure out some job you might enjoy, and then do what it takes to get that kind of job (or part time job). Find some places where you can make friends–probably not talking about the end of the world. Enjoy the things you have, while you have them. Look for the good things in that happen every day.
There aren’t too many people for whom money is no concern. But having a purpose in life is necessary for everyone.
I relocated my family from SE England to the Hebrides, having thoroughly studied Gail’s work and fully digested the ramifications of David Korowicz’s ‘Trade Off’ paper – probably a futile enterprise from a survival standpoint, as FE will no doubt point out, but I’ve had such a laugh doing it.
One day we just packed everything we could into the car and into a newly acquired caravan and headed north. It was simultaneously terrifying and liberating. And now our children are settled and our new house is built – I do my office-work with stunning views all the way to Ireland over 20 miles away. There are huge flocks of migrating geese at this time of year, too. Now I need to sort out the garden… I digress but my point is that if you are toying with the idea of doing something similarly eccentric, my advice would be to throw caution to the winds and do it. Prepping can be an end in itself and whatever happens the current paradigm is clearly on its way out.
I agree that prepping can be a way of life. But I would suggest that before someone dives in head first, the person should visit a few preppers in the area where he plans to live. Or if there are websites, look at them too.
I did a little looking several years ago when I got started with TheOilDrum.com, mostly to educate myself. I could see several models that clearly wouldn’t work. I eventually just started a garden. I figured out that even a garden is quite a bit of work for what you get out of it.
If I knew what I know now … 6 years ago … I would have saved a lot of time and money…
What people who are just now realizing the nature of the problems we are facing need to understand – is that prepping will not result in their surviving. It is a waste of time.
Then they can make up their minds as to what actions they want to take going forward. If they want to prep because they find it an enjoyable activity … then why not….
One should be making major decisions like this with full info.
Particularly is one has had enough of being plugged into a city … stuck in a box at home and at work…. and has the option in terms of work flexibility or cash to unplug
I am perched on a balcony overlooking the sea listening to the gulls while writing this … I woke up and rode 20km on my bike on a farm road and not a single car passed by….. I cannot imagine being trapped in Central Hong Kong breathing pollution waiting for the end….
I don’t bother much with the garden any longer…. I am doing other things with the time saved
Maybe take up video gaming…. I have a nephew who is addicted to this purpose in life….
In fact I spoke to him briefly this morning and he had misplaced his controller and was fit to be tied…. I suggested he sacrifice a dog or a cat to appease the gaming gods and get his thing back…
Keep your eye on the news for a story about a 14 year old kid killing the neighbour’s pet because he thought it would get him back in the game.
Then there are those whose purpose in life is watching online p orn…. it does seem a bit sad… but at the end of the day it harms no one… and it can fend off depression …
As always… I am here to help…. if I come up with any other suggestions I will be sure to post
“Then there are those whose purpose in life is watching online p orn…. it does seem a bit sad… but at the end of the day it harms no one… ”
No “humans” are hurt.
I think the reason why things like this exist
https://derpicdn.net/img/download/2012/11/24/161058.jpg
is because we have an increasing number of people who aren’t
http://www.cbc.ca/22minutes/content/images/episodes/22min2207_ThePickUpArtist.jpg
or
https://i.pinimg.com/736x/c8/33/95/c83395d800b131433339d49e0cc958b9.jpg
We have a record number of unattractive/unfit people of childbearing age.
I lost my job in the oil business so I am now studying to become a nurse. Simultaneously we sold our house in the city and rented a bigger house in a nearby village, so we could live off the money we got from the house. Also I think it’s better for our two children to grow up in a more rural area.
Today is the best day of our lives, tomorrow can only get worse.
officially unemployed since yesterday,
in a few months gonna start a two or three years bike tour,
wwoofing here and there
The horror! The horror!
Cats are sadistic with live bait, yet cuddly most the time with people. It’s called ‘power over’, and people also do sadistic things to other people when they have ‘power over’ them.
If the cat was not fed regularly by its human owner…. I doubt it would only play with the mouse….
This is meant to follow the comment that is currently in purgatory:
‘
OPEC extends production cuts until mid 2018.
The question is what price can oil go to before it becomes too expensive for western consumers, triggering a renewed recession?
Or what price do OPEC countries find too irresistible, break unity and begin pumping again?
“what price do OPEC countries find too irresistible”
Over a hundred. Should be quite entertaining to see how society responds to oil priced that high.
When the centre cannot hold.. the markets will hit record highs….
http://www.zerohedge.com/news/2017-11-30/wtf-equity-markets-go-full-bitcoin
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/28/20171130_rip_0.jpg
It looks like someone is manipulating markets.
I agree.
http://www.zerohedge.com/news/2017-11-30/us-household-debt-rising-60-faster-wages-and-one-rating-agency-worried
The auto and student loans are a major reason why young people are not getting married and having families.
I was pointed to a new series a year or so back… can’t recall the name…. it featured two millennial female college grads…. in the pilot they were living in NY city … and struggling to get by … they responded to an ad for some rich old codger who wanted to hire young women to clean his pad while dressed in skimpy outfits… the two gals jumped on the opportunity because they were so hard up for cash …. one step away from hoar-dom….
I thought that this really took the pulse of the millennial generation … it went off track from there and I did not continue
We have been in a depression since 08. Economic growth was 1.3% the last ten years. The exact same as it was from 1930-1940..The only difference now is that we have fake news that keeps pumping fake employment data and hyping the fake central bank induced stock market bubble….
I don’t even think we’ve had growth. It might even be untrue to claim we’re at the same level. It’s more likely we’ve slid back but the govt. is great at putting lipstick on a pig.
We have growth … but it is not healthy growth … it is more like cancerous growth… not ideal.
http://english.cmbchina.com/Personal/Loan/
I wonder how many of those Chinese migrant workers who have been evicted will pay back the loans they owe? I expect that they would have only small loans, but they would affect one part of the system.
But this crash will NEVER see a recovery
PostEverything Perspective
I’m a Depression historian. The GOP tax bill is straight out of 1929.
Republicans are again sprinting toward an economic cliff.
By Robert S. McElvaine November 30 at 9:17 AM
Historian Robert S. McElvaine teaches at Millsaps College. He is the author of “The Great Depression: America, 1929-1941” and currently at work on a novel.
collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).
Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed. The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us. The party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.
https://www.washingtonpost.com/news/posteverything/wp/2017/11/30/im-a-depression-historian-the-gop-tax-bill-is-straight-out-of-1929/?tid=hybrid_collaborative_3_na-amp&utm_term=.c28aeb6ff6e3
They have given up working for the people. Even NPR says that the middle class can expect a raise…
This tax legislation seems bizarre to me. When companies have money, they use it to buy back their stock shares.
“The GOP tax bill is straight out of 1929.
Republicans are again sprinting toward an economic cliff.”
Good post, second coming. I’m bewildered. It makes no sense whatsoever to put through this massive giveaway to those that have benefitted the most from taxation policy, when so many people are living paycheck to paycheck and deficits will balloon larger than they already are. I mean talk about the term doubling down, well what is this quadrupling down or some such multiplier of a policy that has not worked. Giving the hyper rich money stays with them, none of it trickles down. They are the hyper rich because they are so good at holding on to it by parlaying it, investing to make even bigger bucks. But those investments do not translate into more money for the middle class or lower income people. The only way to put more money into the hands of those who need it is to set policies that insure a high income so they can live a fruitful life. Some kind of indirect trickle down method is a crock. The R’s are just pacifying their base, the one’s they want to be associated with, to give them the campaign funds they want to get re-elected to quintuple down on trickle down.
We have been on a roll since 2008. The official stats say no recession in almost 10 years now. That is unusual. I don’t think we have ever gone 10 years without a recession. It is odd that every real stat says depression though and the official word is no recession. Everything, every trick, every resource, every fake stat and every fake news distraction is being thrown at this economic malaise and we are just barely hanging on to growth. There has to be a reason such a herculean effort is being expended by the central banks of the world. I think that reason is there is no recovering from the coming crash.
Still.. few ask the question : Why are the CBs doing this? Why are they forcing Humpty higher?
Surely they saw what nearly happened to Humpty in 2008 when he fell from that wall.
And the response has been to perch him on a wall many times higher – using similar methods that lead to the 2008 fiasco.
Some people believe that the CBs are doing this because they got onto the treadmill to hell and now they have no choice but to continue.
Never – no matter what evidence you present — will they consider that this is a response to the end of cheap to produce oil.
They refuse to go there. They dismiss that as absurd and rant on about shale and renewable energy….
I’m a Depression historian. The GOP tax bill is straight out of 1929.
https://www.washingtonpost.com/news/posteverything/wp/2017/11/30/im-a-depression-historian-the-gop-tax-bill-is-straight-out-of-1929/?utm_term=.b79cce76f52d
I agree Doomer. We have been in a depression since 2008. Only the fake stats say we are not. The urban decay says otherwise.
Good article Gail, although your obvious and understandable ignorance of video games means that the video game analogies are a bit forced.
I don’t know whether anyone has mentioned the game Civilization 4 yet, but imho it is the greatest video game ever developed. It was so awesome that you could actually develop the game within itself and receive 100 research as a reward! Anyway, basically you took over a civilisation in a preset or player-customised ‘map’ and had to manage almost every aspect of it from 3000 BC to 2000 AD.
A lot of collapse situations occurred in the late stages of the game’s campaigns, especially on multiplayer. For example, the larger your economy and research capacity becomes, the more your cities have to grow. Thus, it is commensurately harder to keep the cities well fed and happy. You can starve them down to where you had just enough population to run the farms, mines and lumber/windmills, but this is a doomed strategy. Why? Because when you starve them they get unhappy and refuse to work for several turns.
Besides, only a fraction of the population actually produces labour and research. The rest just produce gold. As the civilisation progresses through the various eras, there is also an increase in the limit of the population in a given city in surplus of which citizens can be employed to run farms or towns or mines, or produce research, tanks, factories and universities. If you don’t have enough people in your cities, you’ll be sitting around doing nothing, and then sooner or later some other player will invade or nuke you, or barring that the ‘global warming’ event will reduce the food produced by your farms and you will starve to death.
Too bad the game didn’t have peak oil or copper etc. events, but nevertheless it taught me a thing or two about collapse. I can say now with no more than a pardonable exaggeration that all the hundreds of hours I spent playing this game in my tweens were totally worth it.
Never got started with video games. Can someone tell me if Civilization 4 (or others like it) take into account biological/ecological ramifications in the game-playing?
There are plague events in the game as well as “global warming”, and as I said above the latter reduces food and depletes resources. The “global warming” event in Civ 4 basically represents any and all ecological ramifications that might descend upon a civilisation. Besides that there might be mods that deal with those things in even greater detail, but I don’t recall any.
Also, a far more recent game called Crusader kings 2 has plague and epidemic events. It’s a sort of medieval European and Middle Eastern statecraft simulator cum quasi-fantasy RPG. You can play as Hamlet the mad gay syphilitic monarch of Denmark.
I suspect if a video game was made that included debt, energy, resource prices and resource reserve constraints, the results of playing this “game” would probably be so eerily similar to our present problems that people would start to freak out playing the game. Because no matter what they do they cannot salvage the civilization.
No future for me in sponsoring a video game, then! Even a book on the subject becomes distressing.
There is the big divide. Those that think you learn from a video game that is something that some one thought up. And those that think you learn by observing the worlds around us. The Grand Canyon, the Pacific Ocean, the polar ice cap are not things that someone dreamed up. The collapse is the weight of the great delusion on those of us that grow food and keep the water in the pipes and the smoke in the wires and fix the wore out everything of today. Eat your video game. Take a video game shower. Warm your house with a video game.
Peak energy is big but peak sanity is bigger.
I don’t recall saying anything contrary to what you express here. A game can be a source of knowledge and insight like everything else in nature.
Based on the MSM content .. peak insanity is close
How about a video game called – Spent Fuel Ponds Erupt
Everyone dies
A lot of comments here are about how a small number of “well-off” people will continue to live comfortable lives despite increasing numbers of people become poorer. It is easy to forget how we live in an economy of scale. And it is the sheer size of the (now global) economy that makes things affordable and available. Like silicone chips for computers or smartphones. In order for anyone or any number of people to “live large,” the critical (and mostly hidden) infrastructure of our modern world needs to remain in place. I am talking about things like sewer lines, gas pipelines, water lines, bridges, roads, telecommunications and the electric grid and such. These things are all ageing. Many are being pushed passed there use-by date already. This infrastructure was almost all built with cheap energy and resources. Imagine building the entire interstate highway system today. These things age. They have to eventually be completely replaced. The evidence is very clear that we can’t even maintain what we have now (Detroit, Chicago, Birmingham, Baltimore, SF, LA etc). I don’t think we can maintain a society where only a few are “well-off”. We will reach a point where critical infrastructure starts to break down. Then that is it. No living large for anyone.
A bit too much hand waving for me. Why do we need people to consume? If their job can be done by a robot with less energy, where does that put the economy? Why is economy of scale necessary in today’s world? Think WWII and bombing Europe. How many planes are necessary to do the job today? Far fewer, all the industry to produce all the old style bombers is superfluous. This time it seems different and using old paradigms to evaluate today’s problems might be an issue.
The 1% are living large and probably consume far less in resources than the other 99%. In the gulags the 1% survived, the 99% perished. Things are not always as they seem nor as we wish.
Dennis L.
The 1% can consume a proportionately high amount of resources because of the economies of scale provided by the consumption of the 99%. Robots consume proportionately less energy than humans because of the economies of scale provided by the consumption of humans.
If we had a war today where destruction on the scale of WW2 was required for victory without resorting to nuclear bombs, the production of planes, missiles and so on would be ramped up to a similar level. For precisely that reason, a war like that would most likely go nuclear, and for precisely that reason it is very unlikely to happen.
“Why is economy of scale necessary in today’s world? ” – You need economies of scale to build robots!
“The 1% are living large and probably consume far less in resources than the other 99%”
There is a very wealthy part of town where I live. Perhaps 25 or so one million dollar plus mansions give or take. This is surrounded by thousands of 50K-100K dollar homes. Now when the water lines break (happens a lot) all the homes loose water. The lines are old and need replacing. The sewer system needs replacing too. Gas mains leak a lot too. They are old. If those 25 homes had to foot the bill to keep the basic services (gas, water, sewer) flowing then they would go broke really fast. The only reason the 25 mansions have basic city services is because the other 100,000 homes pay for it.
We have heard the story that the only reason the Internet gets adequate funding is because of all of the video game players and movie watchers. If funding for the Internet were left to only a few high-need users, the price would be astronomical.
“A bit too much hand waving for me” – What is hand waving? How is it hand waving that Detroit, Chicago, Birmingham, Baltimore can no longer afford to maintain their infrastructure? How is it hand waving that our infrastructure is aging and needs constant maintenance and replacing?
The 1% do not have their own infrastructure, do not have l water resources, food resources, or automated factories near their homes that can churn out any product they want with very few humans needed.
Some people need to stop reading science fiction and start referencing to facts in the real world.
A lot of things would not exist on a small economy of scale. Planes will not exist in a world with 10,00 people alive. They would not have the resources and technology that we have now. What we have now requires a global effort–the materials for today’s military airplanes are sourced from all over the world and requires cooperation among people who speak different languages. These people are the 99%. The 99% do all the work. The 1% do not work or know how to build and maintain most of modern technology. If a significant number of the 99% perish, the 1% are finished. They will have to pay much higher wages and do a lot of the work they used to have servants do, themselves and it will be exhausting, at best. Farming is still hard work with cutting edge modern technology. The 1% doing all their work will not make them rich anymore.
I have seen references where actually 5% of any given organization does more than say 90% of the work, what happens if the 95% are gone? The 5% figure also applied to WWII fighter pilots, so were the other 95% functioning as bait? . Statement, “Planes would not exist in a world with 10,000 people alive.” Why? How many people would be required? Why when the 99% perished in the gulag did not the 1% perish?
Farming is becoming robotic, drivers are almost superfluous.
These seem to be views based on history, the future will be different. How?
Dennis L.
I could believe an 80% – 20% split better than a 95% – 5% split. I can see wide differences if there are a mix of tiny farms and big farms, and you are comparing them. But it would seem like an organization would have a need for a fairly high share of its workers. Even those doing mundane work are needed, for the overall whole to function. The person who sweeps the floor is in some sense as important as the person in charge.
Dennis, I currently work at a company that specializes in very high quality, low volume parts. They are VERY expensive. Now look at a company that produces hundreds of thousands of parts. They are cheap, due to economies of scales, etc. THis is why the .01% elite need the rest of us. They would have nothing without all those people.
A hypothesis is that large volumes of material with embedded energy and need to skim off the resources for the high value products. Has this changed? If I understand the argument the 99.9% are needed to do the work to allow the .01% to function with essentially a skim. Overall, the materials/resources are greater this way than building small batches. If the knowledge has been commodified, then much of the population is no longer required. E.g. Modern CNC machine tools with CAD/CAM design.One offs are now possible which previously required rooms of draftsmen, engineers, and associated machinists. AM has allowed GE if I understand it correctly to produce fuel injectors for jet engines that previously required close to 30 separate machining steps. This seems to reduce the need for a great many people and make economy of scale less important.
If multiple times the material and labor are required to get economies of scale, then embedded knowledge should make the over all cost to a group less with small batches, not greater. Make up the difference with debt?
Is is possible that the large population of consumers is no longer necessary for the system to work? The current system does not seem to work, but the rich so the saying goes are with us always and with remarkable staying power as noted previously.
Dennis L.
The owner NEEDS a ceo and a few engineers. They has to get paid so there has to be economists and HR. And a cleaner.
These have to live somewhere, get to work somehow, eat, someone has to take care of their children.
And all those people needs the same thing.
What you could do is pay those who don’t work much less, but democracy seems to be an obstacle. Those people vote.
Dennis, let me introduce you to the concept of overhead. The cost of a facility, the land, the rent, the taxes, the management, the whatever is paid for by the production.This is why economies of scale are needed.
“then embedded knowledge should make the over all cost to a group less with small batches”. You are assuming that the “embedded knowledge” can eliminate the overhead. It can’t. This is like saying, “the solar power” can eliminate the need for the grid. It can’t.
“One offs are now possible which previously required rooms of draftsmen, engineers, and associated machinists.” I have not seen this yet. We have a 3D printer. All I have ever seen them used for are prototypes, to build “quickly” just to experiment with fit and form. I have yet to see a 3D printer that can print metal that will withstand stress. Try printing something and building a plane out of it.
Someone once told me that 3D printers were going to change the world…. that was about 6 years ago….
He said that you could print the parts to complex machines and assemble them at home…
I was wondering … how would this be possible — how would you print a metal part for say a bicycle? These parts are made using molds and massive presses…. maybe high tech computerized lathes?
Yet no problem – we will just hit print and all the parts of a bike drop out the front of the printer…
Just like we are going to have self-driving cars and move to Mars ‘next year’
If we were willing to dispense with useless eaters somehow Dennis Elysium could work.
Eliminate those and their need for housing, food and government services disappear.
That would create a new batch of useless eaters to dispense with.
But as long as we have a surplus we will probably have democracy and as a consequence keep the useless eaters living in decent standard.
Yes sure. But how do you identify the 5%/20%? If it was possible any rational company would can the 95% and hire more 5%ers.
I agree!
Under Jack Welch employees were ranked under a “vitality curve” and the bottom 10% were then fired each year after a review. Has a certain similarity to a herd of say buffalo in Africa, the slower ones are lunch for the lions. It is that warm fuzzy ecology stuff. What happens to the least capable investors in a non growth society where some make even 5% returns, it must come from somewhere.
Dennis L.
Dennis.. dont be silly
Hoosier Pattern is printing sand patterns for casting metal. It seems to m that at the base of economics is the use of embedded energy in raw materials and fossil fuels to produce stuff. Those who are good at it get a skim(profit) to buy more desirable stuff or in some cases entertainment. If one offs are possible, then there is less need for all the mass production as the skim is not necessary. Essentially some of these processes collapse the overall sequence of processes and rewrite many of the existing rules.
Again WWII. The USAF did a study where a few hundred planes with guided munitions could have done the same job as waves of bombers and the associate tons of metals, fuel, etc or economy of scale. It is a counter example which in math generally disproves the hypothesis.
Think long and hard about this Dennis …
It is about as difficult as understanding 1+1=2…. if you don’t get it … feel free to ask some questions.
We are here to help — even those with double digit IQs will not be ridiculed… unless they persist in posting total nonsense.
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
OIL PRODUCERS NEED $100+ OIL
Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html
If a technology can’t function outside an economy where economies of scale exist, it doesn’t matter if it is individually independent of economies of scale in certain respects. In order to truly become independent of them, all the other resources and tech it depends on must also become likewise independent.
If you make a car that can run on 50% of the fuel consumed by the most efficient ICEs of today, it can only circumvent the fossil fuel economies of scale if they allow 50% more efficient extraction. A very crude example but you get the point I’m sure.
To take the plane example – for a fewer number of modern planes to cause as much damage as a larger number of WW2 planes, the enemy must have WW2 era air force and air defenses.
From what FW teaches, it would take too much energy to create a livable world without population (and business) being pretty much as it is now. No telling what energy supports that, but the alternative seems less feasible.
Your post puts me in mind of my road project. Filling potholes in front of my house with paper pulp/latex paint mix. The cars drive over it and flatten it down, and it is thence impermeable and strong. Nowhere as effective as asphalt gravel in terms of efficiency, but my example is to see how it would work in theory if every property owner did the same,
So I struggle over eons to fill a few dings, and stand and wonder when and how I’ll ever do the rest. Then one day I hear a truck stop and activity in the road. Seems the Dep of Transp, after 6 years not seeing them do this, sent a couple men to dump asphalt gravel in the two largest potholes. My vanity tells me that they saw my lame struggle and bemusedly pitched in to help. One of the men was whistling a little tune…
https://www.washingtonpost.com/national/health-science/expanding-dnas-alphabet-lets-cells-produce-novel-proteins/2017/11/29/46634918-d536-11e7-9ad9-ca0619edfa05_story.html?utm_term=.e9e71e10d8a5
Synthetic biology. What could possibly go wrong?
Perhaps something like the bowls of wrath described in Revelations? I expect a “newly created” bug to get out one day that will destroy us all.
Synthetic is the wrong word. Imaginary is the correct word. It is all imaginary – the economy, the recovery,Bitcoin, jobs, money, renewable energy, electric airplanes, flying cars, colonies on Mars. Hell why not imaginary biology too.
There are jobs, it’s just that the number of them that pay a living wage have been exaggerated.
Money exists it just cannot buy what it used to.
Everything else mentioned are imaginary products or products that don’t work.
I’d call them vaporware
Fools walk in where angels fear to tread.
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What If Autonomous Cars Just Never Happen?
https://jalopnik.com/what-if-autonomous-cars-just-never-happen-1820778692
I was thinking again, I know I should stop that non-sense. IF ( a big IF) transportation is everything and IF (another big IF) all that is needed for BAU to continue is mobility then, how would a self-driving car/truck help? Lets examine the ways:
1. Truckers would loose jobs – not helping
2. How do you insure for liability of a self-driving car/truck? – not helping
3. Society is falling apart the way it is in its current state how is increasing the complexity of travel helping – not helping
4. Autonomous cars/trucks still need road and bridges – not helping
5. Autonomous cars likely need GPS and internet to function. More complexity – not helping
5. They still consume fuel – not helping
6. They still kill wildlife – not helping
7. Many people buy cars for a symbol of status and prestige. They buy them to drive (BMW the ultimate driving machine) and been seen in them. – not helping
I just don’t see what is the benefit of self-driving cars/trucks. Way too many downsides. A break through technology has to show improvements across the board to be adopted. And to what end? It seems like a road to nowhere. And this is all assuming transportation is everything. It assumes we will have worthy destinations!!!
It is the modern religion, technology for technology’s sake. Remember, there is a big industry around technology that pushes towards more “improvements”. Educational institutions, media, technical publications, consulting, speakers at conventions, politicians. Everyone wants to “stay ahead of the game”, or make money of these trends.
I understand that quite a few of today’s semi trucks are owned by their drivers. (Not generally a good deal for the drivers, however.) If we have self driving trucks, some big organization is going to need to own all of them–can’t push ownership down to the poor drivers themselves.
This sounds like nirvana … as an owner you sit at home and watch tv and drink beer… and the truck does all the work…
Time for a song….
Agree – we are constantly being told that SD cars are a game changer …. I have friends who say this to me….
I ask them what they mean by that… what are the positives of self driving cars? What game does it change… If you don’t want to drive can’t you just take a bus… or a taxi…
They have no answer… the MSM told them it was a game changer… therefore like parrots they repeat ‘Self Driving cars are a game changer …. Self Driving cars are a game changer …. Self Driving cars are a game changer …. Self Driving cars are a game changer …. ‘ (best to stuff their mouths with crackers at this point to shut them up)
A millennial was telling me that one of the great things about self driving cars was that nobody would need a car, and since the self driving cars were all shared, there would not be as many cars needed, resulting in huge savings. I mentioned a slight problem of what happens at rush hr when everyone wants to get to work. There will not be enough self driving cars for everyone. He had not thought of that of course, and of course, his mental brain fixing tool, npr and Facebook had not mentioned this slight problem either.
And there is the issue of cost… if there were so few cars … they would need to cost a fortune….
The solutions are very simple — if one does not think about them in depth.
But then nobody thinks — they just reference the MSM
And someone would need to own all of these cars. And buy them with debt.
Priceless!
I think about when we were told that Segways would be game changers.
https://claytontheobvious.files.wordpress.com/2014/10/378197_3750753922341_1488074915_n.jpg
http://cdn.images.dailystar.co.uk/dynamic/23/photos/967000/620x/Hoverboard-fire-487571.jpg
The game changers went up in flames.
Yeah, unbelievable the b.s. surrounding this thing when it was first announced.
Digital Bread and Circus?
https://www.bloomberg.com/news/articles/2017-11-29/wild-bitcoin-ride-erases-2-200-in-five-hours-after-record-rally
you ain’t seen nothing yet… it’s a very volatile world…
https://www.cnbc.com/2017/11/29/bitcoin-plunges-18-percent-after-topping-11000-in-extremely-volatile-trading.html
B-B-B-Bitcoin plunges 18 percent…
n-n-n-now that’s volatility!
Don’t worry about Bitcoin, it’s just another game in the finance casino. Numbers on a screen.
Excellent music btw!
You know, speaking of Bitcoin, I am visualising Gail’s chart of the “Coffin Corner” at the top of her post. Bitcoin seems to be right there at the peak of the “Coffin Corner” diagram. It seems to overspeed and stall a lot.
Too little volatility in the stock market? Try bitcoin!
the 2020’s are looking like the decade of decline…
https://www.youtube.com/watch?v=cFRk0FfaQi0
but for n-n-n-now…
B-B-B-BAU tonight, b-b-b-baby!
BLACK FRIDAY BIKE DEALS
Even though the madness that was Black Friday, has now been & gone for another year, that doesn’t mean you’ve missed the boat. We’ve still got hundreds of products from all the top brands at Black Friday prices – so take a look through the offers below, from clothing, tools and accessories to wheels, tyres, components…and much more as we’re sure you can still pick up that bargain
https://www.probikekit.co.nz/offers/black-Friday.list?utm_source=29112017-pbk-nz-black-friday-top-picks&utm_medium=email&utm_campaign=29112017-pbk-nz-black-friday-top-picks&affil=thgemail&ecrmcid=RmAdVY8wyoBPrWezPOB3GOKJz71knWle&sendTime=1511989200&widget_id=837822
It’s Black Friday every Friday!
We are entering the ‘Garage Sale’ end of an era (error?) bonanza as money escapes from inventory and heads to where its better treated; the ether such as shares, derivatives, bitcoins and pieces.
“It’s Black Friday every Friday!”
World Shoe Production-
China- 12600 Millions of pairs
India 2100
Brazil 895
Vietnam 760
Indonesia 1000
Pakistan 295
Thailand
Shoe production contintued-
Thailand 150 Millions of Pairs
Mexico 245
Italy 205
Turkey 175
Note that the US is not on the list of world shoe manufacturers- tho we do have production from Mexico & Brazil in our hemisphere. Shoes are critical but are just one of many areas of US vulnerability to loss of imports- ie clothing, Iphones, computer parts, car parts, medical equipment, drugs, military electronics, etc
It’s a good bet that the US Ruling Class under Trumpster blunders into a big shoot out with the Eurasian Union folks. Whether by warlike meddling, deliberate attack, or by collapse of the dollar, stocks, bond market etc until those container ships from Asia may not be very reliable in our future.
I got a nearly identical thing from Nosler.
I didn’t notice whether they had repair kits. Every person who thinks they can replace a car with a bike has to keep in mind making repairs to that bike.