Will the World Economy Continue to “Roll Along” in 2018?

Once upon a time, we worried about oil and other energy. Now, a song from 1930 seems to be appropriate:

Today, we have a surplus of oil, which we are trying to use up. That never happened before, or did it? Well, actually, it did, back around 1930. As most of us remember, that was not a pleasant time. It was during the Great Depression.

Figure 1. US ending stocks of crude oil, excluding the Strategic Petroleum Reserve. Amounts will include crude oil in pipelines and in “tank farms,” awaiting processing. Businesses normally do not hold more crude oil than they need in the immediate future, because holding this excess inventory has a cost involved. Figure produced by EIA. Amounts through early 2016.

A surplus of a major energy commodity is a sign of economic illness; the economy is not balancing itself correctly. Energy supplies are available for use, but the economy is not adequately utilizing them. It is a sign that something is seriously wrong in the economy–perhaps too much income disparity.

Figure 2. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

If incomes are relatively equal, it is possible for even the poorest citizens of the economy to be able to buy necessary goods and services. Things like food, homes, and transportation become affordable by all. It is easy for “Demand” and “Supply” to balance out, because a very large share of the population has incomes that are adequate to buy the goods and services created by the economy.

It is when we have too much income and wage disparity that we have gluts of oil and food supplies. Food gluts happened in the 1930s and are happening again now. We lose sight of the extent to which the economy can actually absorb rising quantities of commodities of many types, if they are inexpensive, compared to wages. The word “Demand” might better be replaced by the term “Quantity Affordable.” Top wage earners can always afford goods and services for their families; the question is whether earners lower in the wage hierarchy can. In today’s world, some of these low-wage earners are in India and Africa, or have no employment at all.

What is Going Right, As We Enter 2018?

[1] The stock market keeps rising.

The stock market keeps rising, month after month. Volatility is very low. In fact, the growth in the stock market looks rigged. A recent Seeking Alpha article notes that in 2017, the S&P 500 showed positive returns for all 12 months of the year, something that has never happened before in the last 90 years.

Very long runs of rising stock prices are not necessarily a good sign. According to the same article, the S&P 500 rose in 22 of 23 months between April 1935 and February 1937, in response to government spending aimed at jumpstarting the economy. By late 1937, the economy was again back in recession. The market experienced a severe correction that it would not fully recover from until after World War II.

The year 2006 was another notable year for stock market rise, with increases in 11 out of 12 months. According to the article,

Equity markets rallied amidst a volatility void in the lead-up to the Great Recession. Markets would make new all-time highs in late 2007 before collapsing in 2008, marking the worst annual returns (-37%) since the aforementioned infamous 1937 correction.

So while the stock market consistently rising looks like a good sign, it is not necessarily a good sign for market performance 6 to 24 months later. It could simply represent a bubble forming, which will later pop.

[2] Oil and other commodity prices are recently somewhat higher.

Recently, oil prices have been too low for most producers. Now, things are looking up. While prices still aren’t at an adequate level, they are somewhat higher. This gives producers (and lenders) hope that prices will eventually rise sufficiently that oil companies can make an adequate profit, and governments of oil exporters can collect adequate taxes to keep their economies operating.

Figure 3. Monthly average spot Brent oil prices, through December 2017, based on EIA data.

A major reason for the recent upward trend in commodity prices seems to be a shift in currency relativities for Emerging Markets.

Figure 4. Figure from Financial Times showing currency relativities based on the MSCI Emerging Market currency index.

While the currency relativities for emerging markets had fallen quite low when commodity prices first dropped, they have now made up most of their lost ground. This makes commodities more affordable in Emerging Market countries, and allows them to do more manufacturing, thus stimulating the world economy.

Of course, if China runs into debt problems, or if India runs into problems of some sort, or if oil prices rise further than they have to date, the run-up in currency relativities might run right back down again.

[3] US tax cuts create a bubble of wealth for corporations and the 1%.

With low commodity prices, returns have been far too low for many corporations involved with commodity production. “Fixing” the tax law will help these corporations continue to operate, even if commodity prices remain low, because taxes will be lower. These lower tax rates are important in helping commodity producers to avoid collapsing as a result of low commodity prices.

The problem that occurs is that the change in tax law opens up all kinds of opportunities for companies to improve their tax situation, either by changing the form of the corporation, or by merging with another company with a suitable tax situation, allowing the combined taxes to be minimized. See this recent Michael Hudson video for a discussion of some of the issues involved. This link is to a related Hudson video.

Groups evaluating the expected impact of the proposed tax law did their evaluations as if corporate structure would remain unchanged. We know that tax accountants will help companies quickly make changes to maximize the benefit of the new tax law. This is likely to mean that US governmental debt will need to rise much more than most forecasts have predicted.

In a way, this is a “good” impact, because more debt helps keep commodity prices and production to rise, and thus helps keep the economy from collapsing. But it does raise the question of how long, and by how much, governmental debt can rise. Will the addition of all of this new debt raise interest rates even above other planned interest rate increases?

[4] We have been experiencing artificially low oil prices since 2013. This helps the economic growth to be higher than it otherwise would be. 

In February 2014, I published an article documenting that back in 2013, oil prices were too low for oil producers. If a person looks at Figure 3, oil prices were over $100 per barrel that year. Clearly, oil prices have been much too low for producers since that time.

Unfortunately, it looks like these artificially low oil prices may be coming to an end, simply because the “glut” of oil that developed is gradually being reduced. Figure 5 shows the timing of the recent glut of oil. It seems to have started early in 2014.

Figure 5. US Stocks of crude oil and petroleum products (including Strategic Petroleum Reserve), based on EIA data.

If we look at the combination of oil prices and amount of oil in storage, a person can make a rough estimate of how this glut of oil might disappear. Quite a bit of it may be gone by the end of 2018 (Figure 6).

Figure 6. Figure showing US oil stocks (crude plus oil products) together with the corresponding oil prices. Rough guess of how balance might disappear and future prices by author.

Of course, one of the big issues is that consumers cannot really afford high-priced oil products. If consumers could not afford $100+ prices back in 2013, how would it be possible for oil prices to rise to something like $97 per barrel by the end of 2018?

I am not certain that oil prices can really rise this high, or that they can stay at this level very long. Certainly, we cannot expect oil prices to rise to the level they did in July 2008, without recession causing oil prices to crash back down.

What the Economy Needs Is Rising Energy Per Capita

I have published energy per capita graphs in the past. Flat spots tend to represent problem periods.

Figure 7. World per Capita Energy Consumption with two circles relating to flat consumption. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

The 1920-1940 flat period came shortly after the United Kingdom reached Peak Coal in 1913.

Figure 8. United Kingdom coal production since 1855, in figure by David Strahan. First published in New Scientist, 17 January 2008.

In fact, the UK invaded Mesopotamia (Iraq) in 1914, to protect its oil interests. The UK wasn’t stupid; it knew that if it didn’t have sufficient coal, it would need oil, instead.

There were many other disturbing events during this period, including World War I, the 1918 flu pandemic, the Great Depression, and World War II. If there are not enough energy resources to go around, many things tend to go wrong: countries tend to fight for available resources; jobs that pay well become less available; deflation becomes more likely; population becomes weakened, and epidemics become more likely. I wrote about the 1920 to 1940 period in a recent post, The Depression of the 1930s Was an Energy Crisis.

The 1980-2000 flat period included the collapse of the Soviet Union, in 1991. The Soviet Union was an oil producer. The Soviet Union collapsed after prices had been low for a long time.

Figure 9. Former Soviet Union oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.

Even many years after the collapse of the Soviet Union, population growth in former Soviet Union countries and its affiliates was much lower than in the rest of the world.

Figure 10. World population growth rates between 2005 and 2010. Source: https://en.wikipedia.org/wiki/List_of_countries_by_population_growth_rate

Lower population (through falling birth rates, rising death rates, or rising emigration) are a major way that economies self-adjust because of falling energy per capita. Economies tend to fix the low-energy per capita problem by adjusting the population downward.

Recently, we have again been hitting flat periods in energy consumption per capita.

Figure 11. World per capita consumption of oil and of total energy, based on BP Statistical Review of World Energy data and UN 2017 population data.

The slowdown in world energy consumption per capita in 2008-2009 was clearly a major problem. Oil, coal and natural gas consumption fell simultaneously. Oil consumption per capita fell more than the overall mix, especially affecting countries heavily dependent on oil (Greece with its tourism, but also the US, Japan, and Europe).

The recent shift in political strategy to more isolationist stances also seems to be the result of flat energy consumption per capita. It is doubtful that Donald Trump would have been elected in the US, if world energy consumption per capita had been growing robustly, and if wage disparity had been less of a problem.

The primary cause of the 2013 to 2016 flat trend in world energy consumption per capita (Figure 11) is falling coal consumption (Figure 12). Many people think coal is unimportant, but it is the world’s second largest source of energy, after oil. We don’t have a good way of getting natural gas production to rise enough, to make up for loss of coal production.

Figure 12

Wind and solar simply do not work for solving our problem of flat or shrinking energy consumption per capita. After spending trillions of dollars on them, they make up only a tiny (1%) share of world energy supply, according to the International Energy Agency. They are part of the little gray “Other” sliver on Figure 13.

Figure 13. Figure prepared by IEA showing Total Primary Energy Supply by type from this IEA document.

Something Has to “Give” When There Is Not Enough Energy Consumption per Capita

The predicament we are facing is that energy consumption per capita seems to be reaching a maximum. This happens because of affordability issues. Over time, the price of energy products needs to rise to keep up with the rising cost of creating these energy products. But if energy prices do rise, workers earning low wages cannot afford to buy goods and services made with high-priced energy products, plus honor all of their other commitments (such as mortgages, auto loans, and student loans). This leads to debt defaults, as it did in the 2008-2009 recession.

At some point, the affordability problem can be expected to hold down energy consumption. This could happen in many ways. Spiking prices and affordability issues could lead to a worse rerun of the 2008-2009 recession. Or if oil prices stay fairly low, oil-exporting countries (such as Venezuela) may collapse because of low prices. Even if oil prices do rise, we may find that higher prices do not lead to sufficient additional supply because investment in new oil fields has been low for many years, because of past low prices.

As long as the world economy is expanding (Figure 14), individual citizens can expect to benefit. Jobs that pay well are likely to be available, and citizens can afford to buy goods with their growing wages. People who sell shares of stock and people who get pension benefits can all receive part of this growing economic output.

Figure 14. Author’s image of an expanding economy.

Once the economy starts to shrink (Figure 15), we start having problems with dividing up the goods and services that are available. How much should retirees get? Governments? Today’s workers? Holders of shares of stocks and bonds? Not all commitments can be honored, simultaneously.

Figure 15. Author’s image of declining economy.


One obvious problem in a shrinking economy is that loans become harder to repay. The problem is that there is less left over for other goods and services, after debt plus interest is subtracted, in a shrinking economy.

Figure 16. Figure by author.

Changing interest rates can to some extent help offset problems related to higher energy prices and shrinking supply. The danger is that interest rates can move in the wrong direction and make our problems worse. In the lead-up to the Great Recession of 2008-2009, the US raised short-term interest rates, helping to puncture the sub-prime mortgage debt bubble.

Figure 17. Figure comparing Case-Shiller Seasonally Adjusted Home Price Index and Federal Reserve End of Quarter Target Interest Rates. See Oil Supply Limits and the Continuing Financial Crisis for details.

We now hear a lot of talk about raising interest rates and selling QE securities (which would also tend to raise interest rates). If growth in energy consumption per capita is already flat, these changes could make the problems that the economy is facing even worse.

Our Economy Works Like a Bicycle

Have you ever wondered why a two-wheeled bicycle is able to stay upright? Research shows that a bicycle will stay upright, as long as its speed is greater than 2.3 meters (7.5 feet) per second. This is the result of the physics of the situation. A related academic article states, “This stability typically can occur at forward speeds v near to the square root of (gL), where g is gravity and L is a characteristic length (about 1 m for a modern bicycle).”

Thus, a bicycle will be able to continue in an upright manner, as long as it goes fast enough. If it slows down too much, it will fall down. Our economy is similar.

Gravity plays an important role in determining the speed of a bicycle. If the bicycle is going downhill, gravity gives an important boost to the speed of the bicycle. If the bicycle is going uphill, gravity very much pulls back on the bicycle.

I think of the situation of an economy having rising energy consumption per capita as being very much like riding on a bicycle, speeding down a hill. The person operating the bicycle would not need to provide much extra energy to keep the bicycle going.

If energy consumption per capita is flat, the person riding the bicycle must provide the energy to make it go fast enough, so it doesn’t fall over. This is somewhat of a problem. If energy consumption per capita actually falls, it is a true disaster. The bicyclist himself must provide the energy necessary to push the bicycle and rider uphill.

In fact, there are other ways that a speeding bicycle is analogous to the world economy.

Figure 18. Author’s view of analogies of speeding upright bicycle to speeding economy.

The economy needs a constant flow of outside energy. In the case of the bicycle, the human rider can provide the energy flow. In the case of the economy, the energy flow comes from a mixture of various fuel types, typically dominated by fossil fuels.

Growing debt (front wheel) is important as well. It tends to pull the economy along, because this debt can be used to pay wages and to buy materials to make additional goods and services. Thus, the effect of this increase in debt is indirect; it ultimately works through the bicyclist, the gears, and the back wheel.

In fact, the financial system as a whole is important for the “steering” of the economy. It tells investors which investments are likely to be profitable.

The gearing system of the bicycle plays a modest role in the system. Changing gears allows greater efficiency in the use of the energy that is available, under certain circumstances. But energy efficiency, by itself, cannot operate the system.

If the human rider does not provide sufficient energy for the bicycle to go rapidly enough, the bicycle glides for a while, and then falls over. The world economy seems to be similar. If the world economy does not obtain enough energy per capita, economic growth tends to slow and eventually collapses. The collapse can relate to the whole world economy, or to parts of the economy.

The Problem of Parts of the Economy Not Getting Enough Energy

We can think of the economy as being made up of many bicycles, operated by bicycle riders. At the beginning of the post, I talked about the problem of wage disparity. This issue occurred at the time of the 1930’s Great Depression and is occurring again now.

We might call wage disparity “too low a return on the labor of some workers.” In groups of animals in ecosystems, too low a return on the effort of these animals is what causes ecosystems to collapse. For example, if fish have to swim too far to obtain additional food, their population will collapse. It should not be surprising that economies tend to collapse, when the return on the efforts of part of their workers falls too low.

Wage disparity has to do with how well the operators of bicycles are doing. Are the operators of these bicycles receiving enough calories, so that they can keep pumping their bicycles fast enough so that the speed is high enough to remain upright?

If energy consumption per capita is growing, this greatly helps the operation of the economic system. If there is growing availability of inexpensive energy, machines of various types, including trucks, can be used to increasingly leverage the labor of workers. This increased leveraging helps each worker to become more “productive.” This growing productivity, thanks to growing energy consumption, allows more goods and services to be produced in total. It also allows the wages of the workers to stay high enough that they can afford to buy a reasonable share of the output of the economy. When this happens, “gluts” of unaffordable goods are less of a problem.

If energy consumption per capita is flat (or worse yet, falling), greater “complexity” is needed, to keep output of goods and services rising. Greater complexity involves more specialization and more training of individual members of the economy. Greater complexity leads to larger companies, more government services, and more wage disparity. Unfortunately, there are diminishing returns to complexity, according to Joseph Tainter in “The Collapse of Complex Societies.” Ultimately, increased complexity fails to provide an adequate number of high-paying jobs. Wage disparity becomes a problem that can cause an economy to collapse.

If there is not enough economic output, the physics of the economy tries to “freeze out” workers at the bottom of the hierarchy. Workers with low wages cannot afford homes and families. The incidence of depression rises. Debt levels of disadvantaged groups (such as young people in the US) may rise.

So the situation may not be that the whole world economy fails; it may be that parts of the economy collapse. In fact, we are already seeing evidence that this is taking place. For example, life expectancies for US men have been falling for two years, because of growing problems with drug overdoses.


In 2017, the world economy seemed to be gliding smoothly along because the economy has been able to get the benefit of artificially low energy prices and artificially low interest rates. These artificially low prices and interest rates have given a temporary boost to the world economy. Countries using large amounts of energy products, including the US, especially benefitted.

We cannot expect this temporary condition to continue, however. Low oil prices have already started to disappear, with Brent oil prices at nearly $69 per barrel at this writing. The trends in oil prices and oil stocks in Figure 6 are disturbing. If oil prices begin to rise toward the price needed by oil producers, they are likely to trigger a recession and a drop in world energy consumption, just as spiking prices did in 2008-2009. There is a significant chance of collapse in the next 12 to 24 months. It is hard to know how widespread such a collapse may be; it may primarily affect particular countries and population groups.

To make matters worse, our leaders do not seem to understand the situation. The world economy badly needs rising energy consumption per capita. Plans to raise interest rates and sell QE securities, when the economy is already “at the edge,” are playing with fire. If we are to keep the world economy operating, large quantities of additional energy supplies need to be found at very low cost. It is hard to be optimistic about this happening. High-cost energy supplies are worthless when it comes to operating the economy because they are unaffordable.

Many followers of the oil situation have had great faith in Energy Returned on Energy Invested (EROI) analysis telling us which kinds of energy supplies we should increase. Unfortunately, EROI doesn’t tell us enough. It doesn’t tell us if a particular product is scalable at reasonable cost. Wind and solar are great disappointments, when total costs, including the cost of mitigating intermittency on the grid, are considered. They do not appear to be solutions on any major scale.

Other researchers looking at the energy situation have not understood how “baked into the cake” the need for economic growth, rising per capita energy consumption, and rising debt levels really are. Rising debt is not an error in how the financial system is put together; a bicycle needs a front wheel, or it cannot operate at all (Figure 18). I have written other articles regarding why debt is needed to pull the economic system forward.

This economic growth cannot be “fake growth” either, where a debt Ponzi Scheme seems to allow purchases that real-life consumers cannot afford. Quite a bit of what is reported as world GDP today is of a very “iffy” nature. If China builds a huge number of apartments that citizens cannot afford without subsidies, should these be counted as true GDP growth? How about unneeded roads, built using the rising debt of the Japanese government? Or recycling performed around the world, because it makes people “feel good,” but really requires substantial subsidies?

At this point, it is hard for us to know where we really are, because every government wants to make GDP results look as favorable as possible. It is clear, however, that 2018 and 2019 can be expected to have more challenges than 2017. We have interesting times ahead!

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,782 Responses to Will the World Economy Continue to “Roll Along” in 2018?

  1. JH Wyoming says:


    “Transportation Now Largest Source of U.S. Emissions, While Renewables Surge”

    “Buried under the headlines of tax reform and of course, holiday distractions, came some big news from the U.S. Energy Information Agency (EIA): after years of power generation emitting the most carbon in the U.S., that badge is now worn by the country’s transportation sector. This switch is the first time emissions from power generation were less than those from transport since the late 1970s.

    The trend is unmistakable: more utilities are spurning coal when adding new power generation in favor of solar and wind power – or natural gas, the real trigger of coal’s decline. This shift is also not just happening along the coasts, either; Rust Belt states like Wisconsin are also adding more renewables to their energy portfolios.”

  2. JH Wyoming says:


    WTI up to $64.30 & Brent just 13 pennies short of $70 dollars a barrel at $69.87

  3. psile says:

    2012 still holds the record, but it won’t be long now before we see our first ice free day, then week, then eventually month in the Arctic. I wonder if BAU will even still be around to observe it?

    • Duncan Idaho says:

      Th data comes faster and faster, with even the most dire predictions in the rear view mirror.

      • Fast Eddy says:

        Can you explain why Al Gore bought a house for $9,000,000 — when he knows it will be under water in a few years?

        • The Second Coming says:

          For the record, Al Gore’s “beachfront” mansion in Montecito is about 2 miles (3km) from the ocean and about 200 ft (60m) above sea level.

          • Fast Eddy says:

            It is reported that former Vice President Al Gore just purchased a villa in Montecito, California for $8.875 million. The exact address is not revealed, but Montecito is a relatively narrow strip bordering the Pacific Ocean. So its minimum elevation above sea level is 0 feet, while its overall elevation is variously reported at 50ft and 180ft.

            At the same time, Mr. Gore prominently sponsors a campaign and award-winning movie that warns that, due to ___________, we can expect to see nearby ocean-front locations, such as San Francisco, largely under water. The elevation of San Francisco is variously reported at 52ft up to high of 925ft.

    • JH Wyoming says:

      psile, I’ve wondered for years if both phenoms are dovetailing, at some point coming to a peak disaster at the same time. Of course any major tipping point like a sudden rise in sea level of a foot or so will have enormous economic impacts, so it’s easy to see how the two can be linked. If so, it becomes the ultimate conundrum, stuck between burning more FF and make the envirom. situation worse or facing economic collapse, neither of which is a viable alternative, thus the term conundrum. Painted into a corner by two major crises.

      • psile says:

        JH, these are but symptoms of the same root cause – population overshoot. We are busily consuming today, the resources required for the happiness of future generations, in order to stave off immediate collapse. This ensures that the eventual crash will be incalculable, and probably total.

      • Fast Eddy says:

        Al Gore should sell his beach front house – before it’s too late!!!

    • Pintada says:

      psile says, “I wonder if BAU will even still be around to observe it?”

      Hopefully not. And, even if my plans work, I won’t know about it if BAU is over by that time. Of course, there will be many other interesting things to think about.

    • Davidin100millionbilliontrillionzillionyears says:

      “2012 still holds the record, but it won’t be long now before we see our first ice free day, then week, then eventually month in the Arctic.”

      oh, brother…

      so an ongoing trend must continue?

      no trend can ever reverse?

      oh, wait…

      soon we will have our first ice free year in the Arctic!

      then what will we do? shed tears?

      • Tim Groves says:

        I expect we’ll see our first polar bear family migrating to the Hudson River before we see our first ice free year in the Arctic.

        On the other hand, the indefatigable Professor Wadhams keeps predicting an ice free summer up north, and shiver mi timbers, they certainly dine well aboard Wadham’s ship.

      • psile says:

        No, humans are supremely indifferent at all the unfolding disasters headed our way, which is why we are doomed.

        E.g. Playing the back nine, whilst the Eagle Creek WA fire rages in the background. 4/9/17.

    • Fast Eddy says:

      What was Al thinking when he bought this????

      He could have got this lovely stretch on Baffin Island for a fraction of the $9m.

      • psile says:

        But it’s too far away from the cocktail circuit.

      • Tim Groves says:

        Looks a lot like the frozen ocean off Massachusetts.

        • Tim Groves says:

          This one’s even cooler! It’s amazing how a (relatively) few extra CO2 molecules can freeze the ocean!!

        • Fast Eddy says:

          Ah ha moment!

          Al knows that burning MORE COAL…. causes record low temperatures (as much of the world is experiencing)….. and he knows that it is impossible to burn less coal without collapsing BAU…

          So he knows that the oceans are going to freeze in the next 10 years. And he wants to have a skating rink in his front yard.

      • Niko B says:

        Probably bought t because he has more money than he knows what to do with it.
        Who cares what he does? Pretty much everyone who believes in cli m ate cha n ge will not do what is required to avert the dangers they perceive will occur – which is reduce all energy use to 10% of their current lifestyle. Of course that would collapse the system of BAU and then a worse situation is created. I agree with Gail, there is nothing we can or are willing to do about it so having these childish spats back and forth as to whether it is real is just a distraction. But if that is what floats your boat go right ahead – I control nothing.

  4. psile says:

    A great paper on the limits to Germany’s energy revolution in the European Economic Review.


    And this article provides a good summary of the findings, Major Blow: Top German Economist Shows ‘Energiewende’ Can Never Work!

    Germany’s once highly promoted “Energiewende” (transition to green energies) and the country’s feed-in act have been given a grade of “F” by one of the country’s top economists, Prof. Dr. Dr. h.c. mult. Hans-Werner Sinn.

    • psile says:

      Something went wrong with the post sohere is the link to the paper again.

    • Christiana says:

      Hans-Werner Sinn is a very old man with old opinions. He wants everything to stay as it is.

      • Tim Groves says:

        What’s the gist of your criticism of Hans-Werner Sinn, Christiana?

        Is it that he’s very old,
        or that he’s a man,
        or that he wants everything to stay as it is?

        Or did you just make that comment as an attempt at character assassination in order to disregard anything he says that you don’t want to have to address?

        Have you considered that you might be guilty of the sin of using an ad hominem against Professor Sinn?

        Ad hominem, short for argumentum ad hominem, is an argumentative strategy whereby an argument is rebutted by attacking the character, motive, or other attribute of the person making the argument, or persons associated with the argument, rather than attacking the substance of the argument itself.

      • psile says:

        So this is your argument? That he’s an old fart? Are you an SJW?

      • Christiana says:

        I have to think a bit, my englisch doesn’t seem to be sufficient to make my point. Hans-Werner Sinn is very well known in Germany for his positions to defend employers positions. He is stuck in his world of the 60ies, when everything was growing and prospering, when he was young actually.
        He doesn’t understand limits to growth, he doesn’t understand people willimng to work together.
        By the way, I don’t mind him beeing a man. 🙂

        • MG says:

          “The people willing to work together” can not replace cheap external energy that is crucial for the existence of the higher civilization systems.

        • Tim Groves says:

          Thanks for clearing that up, Christiana! And by the way, I think your English is fine.

          Back in the nineties, I had a girlfriend who complained with some justification that I was stuck in the seventies—progressive rock rather than disco— so I know the feeling well.

          Old farts like HWS and I have no right to comment on 21st century society, period. Our decades of experience at living in the past are a hindrance to living in the present or discerning the future. Our accumulated wisdom is folly. We are irrelevant, outdated, redundant, fossilized, out of date, affected by creeping senility and suffering from rigor mortis of the mind. I’ll bet Hans doesn’t even have a smartphone. We should simply retire from the world and leave the youngsters to get on with the task of making everything better.

      • Fast Eddy says:

        So will you — when you see what comes next

    • Jan says:

      Hans Werner Sinn is famous for his warnings of the target2 debts in the Euro system. His point of view is rejected by a lot of economists who stress that target2 does not at all reflect debts. Secondly Sinn is famous for demanding wage levels like in Bangladesh for Germany as a consequence of globalization. He made a lot of money with his alarming books. He is an interesting voice but not an authority.

  5. Tim says:

    I often wonder what the mean population of earth is, for say, the last 20,000 years. That is a number we will surely revisit.

    • Davidin100millionbilliontrillionzillionyears says:

      I would say half nice and half mean…

      oh, you’re saying the “average”?

      • Tim says:

        Yes, the average.

        • Davidin100millionbilliontrillionzillionyears says:

          the mode or the median?

          • Davidin100millionbilliontrillionzillionyears says:

            World population milestones in billions
            Year 1804………..1927…….1960…..1974….1987…1999…2011

            so for the first 19,000 of your 20,000 years the population is rounded to zero…

            the last 1,000 years = yearly average way less than a billion…

            let’s guess 200 million…

            so 200,000,000 divided by 20 millennia =

            10 million…

            wild guesstimate.

            • Davidin100millionbilliontrillionzillionyears says:

              other wild guesstimate:

              I’ve seen data that says there have been 100 billion humans total…

              almost all of us have lived in the past 20,000 years…

              100 billion divided by 20,000 =


              but that doesn’t account for each human living for 20 or so years…

              5 million x 20 = 100 million?

              but I don’t think that’s the mean.

    • Ed says:

      Looks like about 0.5 million people in the years -20,000 to -10,000. I hope with luck we will bottom out this time at not less than 4 million people.

  6. Kurt says:

    I’m just not feeling the energy tonight on ofw. Could someone go on a rant or at least rip on Elon.

    Patiently waiting?


    • December Sales Are In: General Motors’ Chevy Bolt EV Outsold Tesla Model 3 By 3:1

      In fact, the Bolt outsold all Tesla models combined, month after month.

      • JH Wyoming says:

        The manuf. of autos is a complex huge endeavor and it only makes sense a corp. that’s been doing it a lot longer would be able to outperform a newcomer. The future of EV’s does not rest with Elon.

        • HideAway says:

          Over the next couple of years, VW and Mercedes will be coming out with a variety of EVs. That will certainly test the EV market and the other manufacturers.

          IMO the EV market will get a kick along when/as the crude price rises, but when the whole economy goes into recession with the next crash these higher prices bring, that will be the real test of any future for EVs.
          Firstly, after the next step down along the road of collapse, people will not have the money to buy EVs, and secondly, after the crash and oil prices also crash, the EV option will not look as cheap compared to when oil prices are rising.

          Mind you, we don’t know what ‘tricks’ the Govts/CBs will try after the next oil price spike/economy crash. They may introduce much larger subsidies for EVs to keep that new industry going, while also reducing the use of oil as the years go by, all with higher debt.

          I think it will be anything and everything to kick the can (full collapse) down the road a bit further.
          The more EVs are on the roads (even with only a 10 year battery life) ASAP, then more time has been bought, and it becomes the next Politician/Central Bankers problem.

          Eventually though it will be not just a problem of oil depletion, but also copper, nickel, cobalt etc that are already in diminishing grades on average, that thwarts the EV revolution.
          There is still 430 Billion tonnes of lignite to burn in the state of Victoria here in Australia, so we have the ability to produce a lot of cheap electricity, just not the desire. Most is only 10-20m under cover.

          • Davidin100millionbilliontrillionzillionyears says:

            “There is still 430 Billion tonnes of lignite to burn in the state of Victoria here in Australia, so we have the ability to produce a lot of cheap electricity, just not the desire. Most is only 10-20m under cover.”


            Burn More Coal…

            BMC tonight, baby!

          • Tim Groves says:

            BLM! Burning Lignite Matters!
            Or anthracite!

            Meanwhile, that bastion of Progressive Utopian Utilitarianism, the Big Apple, is going to sue Big Oil and Big Gas for infrastructure damage from ciime ate change. Which is a bit rich since without Big Oil and Big Gas, the Big Apple would not exist in anything like its present form and last week it would have been frozen to the core and it population would have died from hyperthermia!

            “Defendants are collectively responsible, through their production, marketing and sale of fossil fuels, for over 11 percent of all the carbon and methane pollution from industrial sources that has accumulated in the atmosphere since the dawn of the Industrial Revolution,” lawyers for the city said in the complaint. “Defendants are also responsible for leading the public relations strategy for the entire fossil fuel industry, downplaying the risks of climate change and promoting fossil fuel use despite the risks.”


            The issue being such a serious one, does the City of New York have any plans to strictly regulate the sale and use of FFs, as is done with such dangerous substances as VX gas, asbestos or cocaine?

            Not at all. Perish the thought. The plaintiffs are nothing if not rational. The intention behind their lawsuit is to secure an additional revenue stream from the producers of these essential energy products. Big Oil, Big Gas, and eventually Big Coal will be manipulated into coughing up even more for the public coffers to help pay for all the Big Spending Big Government likes to do with other people’s money.

            • Fast Eddy says:

              They should sue themselves then… since last I looked …. every single person in that state is complicit.

          • JH Wyoming says:

            “IMO the EV market will get a kick along when/as the crude price rises, but when the whole economy goes into recession with the next crash these higher prices bring, that will be the real test of any future for EVs.
            Firstly, after the next step down along the road of collapse, people will not have the money to buy EVs, and secondly, after the crash and oil prices also crash, the EV option will not look as cheap compared to when oil prices are rising.”

            You make some good points there. When oil prices have risen high enough to really push fuel prices to that point that cracks people’s monthly budgets, they will back off of discresionary purchases like restaurants, which always hurt the worse in the early parts of a recession. Remember all the one’s that went under in 09? That is going to happen, then I think it’s really going to be the scariest period when those pulling the strings at the FED are going to be shifting into panic mode as to how to get things moving before all hell breaks loose. Whatever the plan is, this I’ve gotta see!!!

            • DJ says:

              Is really what the fuel costs really that important? I doubt the fuel is even one third of the cost of owning a car. And even then cost of fuel is mostly tax which could be lowered if to big a problem.

              And if oil price doubled, how much would that indirect effect costs of building, maintaining and charging EVs?

            • The cost of building and maintaining roads is a big indirect cost of owning a car. To some extent these costs are included in gasoline costs. They definitely are not included in electricity costs. If fewer people use the roads, the costs will not go down proportionately. Freezing and thawing will still take their toll. Someone will have to pay these costs.

          • jupiviv says:

            “There is still 430 Billion tonnes of lignite to burn in the state of Victoria here in Australia, so we have the ability to produce a lot of cheap electricity”

            Probably not worth the effort though, since as you say there is no desire. In a way, the renewables drive is a way of rationalising a vague realisation of finiteness/limits – on an individual and collective scale.

            The grapes are sour but I can pluck them if I want to = remaining fossil fuels are unethical but we can burn them if we want to.

            • Tim Groves says:

              So you’re a philosopher in your spare time too, lecturing us on what is unethical?
              Or perhaps you fancy yourself as a preacher? Either way, you have the pulpit. The podium’s yours. Join the long long queue. One more armchair moralist pontificating to the rest of us on what’s right and wrong behavior can’t do much harm.

              But before you start, let me bring to your attention Tony Hancock’s summing up speech in Twelve Angry Men.

              Ladies and gentlemen, we are gathered here today to sit in judgement of a fellow human being, but before we have the temerity – nay! audacity – to take it upon ourselves to judge another, surely we must first judge ourselves!

              Are there any of us so pure in our own personal wives – lives – that we can dispassionately – nay! objectively – nay! ….. dispassionately – judge another, and therefore I submit …..

              JURY MEMBER:
              Oh, get on with it.

            • jupiviv says:

              How ironic that this impassioned panegyric on objectivity has nothing to do with the comment it’s responding to.

            • Tim Groves says:

              Perhaps you are simply conveying something too subtle for me to grasp. After all, I am only a simple peasant farmer. But I read from your comment the implication that you thought burning the remaining fossil fuels was unethical. If that implication was unintended, I can only beg your indulgence and ask that in future, while not wishing to cramp your style, that you bear in mind that simple straightforward language conveys ideas more clearly, especially when you aren’t communicating exclusively with your own “IN” crowd.

            • jupiviv says:

              “Perhaps you are simply conveying something too subtle for me to grasp.”

              Or perhaps you didn’t even read my comment, and just responded to the first thing you thought you could pick on. Either way, it’s all in good fun and nothing personal.

            • Tim Groves says:

              Well, I always try reading things before replying to them. But I don’t always grasp the long words correctly, and I’ve been known to read things into other people’s words that, on deeper reflection, I could see were not there. In any case, you are right; it is all in good fun and nothing personal.

              Changing the subject just a little, there seems to be a great chasm between the HR Clinton/B Obama position that burning more coal is unethical and the D. Trump position that not burning more coal is unethical. Who would have thought that the great ideological schism of the age would concern not whether or not God is in the form of a Holy Trinity, or whether the earth moves around the sun, or how many angels can dance on the head of a pin, or whether mankind/humankind/peoplekind got her via creation or evolution, or whether capitalism or communism is a more virtuous economic system, or whether abortion was a sin or a right or a sacrament, or even whether Geoff Hurst’s controversial goal in the 1966 World Cup Final actually crossed the goal line or not, but on whether burning coal is a vice or a virtue?

            • Tango Oscar says:

              In a world this far separated from balance or nature there is no longer such a thing as ethics. Any attempt to justify or rationalize anything will lead to the loss of one’s own sanity or the erecting of belief constructs.

            • Ed says:

              Tim Groves the simple peasant farmer, now that is funny. I am pretty sure you can listen to a William Buckley speech and no have too loo up any of the words.

          • Yes, it’s about sequencing and stage/time period evaluation in hazy weather conditions..

            The very next crash (slow down) could be such threshold one by its nature, for instance meaning even for core countries demanding to phase in very visible command economy practices for “energy segregation and prioritization”, e.g. limiting personal car and other frivolous consumption behavior etc.

            Or next crash could be the real brake neck chaotic event, or not at all, just another version of some print fest with its negative consequence put under the rug for another round/decade of muddling through..

            • Slow Paul says:

              Next time the stock markets crash… it will be blood in the streets and bankers jumping through windows. And a great time to buy in!

        • Jan says:

          A new economic crash will show an impact on infrastructure. Electricity driven cars are depend on a complicated electric infrastructure. If more cars want to load their batteries there is need of much larger electric lines than currently exist. Gasoline is much easier to acquire in times of infrastructure failure. Maybe they have a chance close to where the electric energy is generated, close to water or wind generators that couldn’t sell their energy otherwise.

          • DJ says:

            “is need of much larger electric lines than currently exist.”
            Yes, and maybe transformator stations, and other infrastructure. But there is no way to prevent anyone from plugging in their EV.

            Once enough people get EVs the grid operators HAVE to build out the infrastructure, and spread the costs over the customers.

            This could be considered another subsidy EVs get.

          • I very much agree. I know that petroleum products were often available quite a few years before electricity in rural areas and in less-developed countries. I expect that the electric grid will be one of the first things to “go.”

          • Not universally applicable this time around anymore, unfortunately.

            As both the gasoline and diesel products are filled with additives these days (for “enviro” or tax reasons), which severely degrade the longevity of such product, it can’t be stored for yrs.. Obviously you can still get the traditional “pure” blends if you ask around, but it’s not easily available everywhere, especially not in Europe..

          • Fast Eddy says:

            We have discussed a thousand time already — so once again — how do you keep these operating without BAU to provide parts?

            Where do you get the chemicals involved in converting oil to gasoline?

            Why do we have to keep pointing out the id iocy of these suggestions????

            They are just f789ing duuuumb… something a 7 year old might come up with.

    • Davidin100millionbilliontrillionzillionyears says:

      Elon destroys billion dollar satellite:



      but he’s inspiring the Mars Generation:


      that’s right…

      millions of children now are dreaming of being among the first humans to visit Mars!

      woo hoo!

      go, Elon, go!

      inspire us!

      show the kids how to dream big!

      so what if their dreams will be shattered by the coming economic storms?

      let’s build up those fragile egos with some undeserved affirmations!

      Elon, make them some flying cars (all electric, of course) so they can travel around the Earth with ease…

      the Mars Generation deserves the best!

      because they are the best!

      go, Elon, go!

    • Fast Eddy says:

      The ___ ___ ers have been deflated…..

      Fast Eddy has taken away their meaning of life.

      In a way I feel empty too … the battle to break cognitive dissonance has been long … and frustrating… but when finally climbs the mountain …. and achieves Total Victory …. one is left this feeling of …. what’s next …

      ___ ___ was a big part of Fast Eddy’s life too… just in a different way.

  7. Davidin100millionbilliontrillionzillionyears says:

    Cryptocurrencies: 1427

    Market Cap: $734,261,036,116


    42 more cryptocurrencies than last week…

    just what the world needs!

  8. Davidin100millionbilliontrillionzillionyears says:

    Adam Smith says:

    no society can be rich and happy when most of its members are poor and unhappy.

    just let that sink in!

  9. Fast Eddy says:

    New Survey Reveals Staggering Number Of People Are Buying BitCoin On Their Credit Cards


    • The Second Coming says:

      Many years ago a local TV station in metro Boston had an investigating segment on various delinquent student loans. They singled out seemingly wealthy professional individuals in upscale residental neighborhoods, Physicians, Lawyers, that were not paying back their student loans. Most declined to comment.


      $100 million in defaulted student loans, the U.S. Department of Education has resorted to public shaming – releasing a list of 846 doctors and dentists from across the country who are delinquent with the now defunct Health Education Assistance Loan Program.

      According to ABC, the delinquent medical professionals are named on the public list, alongside their medical discipline, city of residence and the amount they owe. One doctor listed owes more than $900,000.

      The HEAL program was discontinued in 1998 because of its high default rate. The loans were federally guaranteed, so taxpayers are left with a huge unpaid bill. ABC reported:

      “Physicians have a higher calling in the community. They have a higher responsibility,” Tom Schatz of Citizens Against Government Waste told ABC News’ “20/20.” “The Hippocratic Oath says, ‘Do no harm.’ Why should they be doing harm to taxpayers?”

      Although they are delinquent on their student loan payments, “many of the doctors appear to be living lives of luxury and operate practices in high-rent places, including Malibu, Calif., or Key Biscayne, Fla.,” ABC said.

      In addition to trying to shame the doctors into paying their loans, the government has also attempted to collect unpaid loan debt by seizing doctors’ tax refunds, filing lawsuits, revoking Medicare access and garnishing their bank accounts, ABC said.

      The list seems to work. Thousands of dollars have been paid since the government began issuing the list after ending the program. It was last updated in September.

      Looks like some folks rationalize in not paying back.

      • Ed says:

        If there is no jail time and no fines why would any rational person pay back the money?

      • Tim Groves says:

        I knew an American here in Japan about 25 years ago who used to gloat about having taken out a student loan 15 years before that and having no intention of repaying it. I found his attitude despicable but, as Ed says, it was rational in the circumstances as he had nothing to loose but his self respect.

        Simply put, whether or not one pays back what one has agreed to pay back if one can avoid it without being subject to coercion or penalty is purely a matter of honour. And in our time, honour is going down the plughole and around the U-bend just like a lot of the things that made Western civilization at least marginally civilized—particularly in America where they spell it “h-o-n-o-r”!

    • JH Wyoming says:

      Along the lines of student loans, I’m still really shocked by the Republicans original plan to eliminate student loan interest as a tax deduction. That seems really out of touch and brutally cruel, especially with the massive cost of a college education these days and the obvious concerns about the student loan default crisis. Fact is though there is no way out of student loans. Sure a person can go delinquent but the interest and late payment penalties just keep piling up, so it doesn’t really do any good to try and get out of them by not paying the monthly fees.

      I saw a YouTube video about young people living in vans and one of them said she was able to pay down her student loans quite quickly living cheaply and of course working a good paying job. Really not a bad strategy these days.

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