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.

Conclusions

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.
This entry was posted in Financial Implications and tagged , , , , . Bookmark the permalink.

1,647 Responses to Will the World Economy Continue to “Roll Along” in 2018?

    • A Real Black Person says:

      Not every news headline needs to be posted here.
      That said, Walmart is becoming too expensive for most low-income Americans.
      Their customers, I’m told, can be found out at the unkempt dollar stores. Dollar stores have cut costs to the bone, to offer lower prices for products made by large international corporations.

      The company that undercuts the dollar stores will be flea markets.

      flea markets are like pop-up stores but with less overhead.

      • grayfox says:

        Flea markets, second hand stores, and charitable/goodwill organizations all seem to be well positioned. Of course, I wouldn’t really know how well they are doing since I only shop at the finest establishments.

        • Davidin100millionbilliontrillionzillionyears says:

          “charitable/goodwill organizations”…

          perhaps these are some proverbial canaries in coal mines…

          as far as I know, giving to charities has not fallen much lately(?)…

          but if anything hits the (economic) fan, these orgs could swiftly be put out of business, so to speak…

          I hope not.

        • equality ,now. no, right now!! says:

          -gasp- You mean everyone doesn’t have an iPhone and a Mercedes? Oh my… we need to fix this.

      • Fast Eddy says:

        In villages in the third world… they sell stuff like washing detergent in one-load packs….. none of this Costco bulk buying stuff…

        Because nobody has any munnny…. they are lucky if they can pull together some change to buy the one-packs….

        Expect this model in the first world in due course….

      • Tim Groves says:

        There are still plenty of opportunities for savvy retailers to cut overhead to the bone!

    • Ed says:

      Many of their store managers can be replaced by AI managers.

  1. Jason C says:

    Does Al Gore know how much of a hypocrite he is or just plain stupid? He’s not some poor fellow that has to work 14 hours a day to survive with little time for contemplation. Contemplation is what he does.

  2. Baby Doomer says:

    This is a must watch!

    • JH Wyoming says:

      Solar panel gets covered with snow
      Stops converting sunlight to power
      Gets too cold for snow to melt
      More snow falls and the device fails big time.
      Then people come out to shovel the snow off.
      But what happened to not having to use snow plows. or salt or anything else regarding snow removal?
      Epic Fail…Next!

  3. Fast Eddy says:

    Al Gore’s Predictions Of Doom Scramble His Message

    ike many doom-mongers before him, Al Gore’s predictions of impending disaster have fallen somewhat short of the mark — a point to keep in mind as his Inconvenient Sequel hits theatres this summer.

    It’s a good thing he was wrong, too, because I was worried we might not be around in 2017, given the alarms he was sounding in 2006’s An Inconvenient Truth!

    For one thing, I thought sea levels would have risen 20 feet by now thanks to the melting of either West Antarctica or Greenland. Al Gore claimed that this would happen in the “near future,” but thankfully, we’ve been spared so far. In fact, sea levels seem to be rising at maybe three millimetres per year. Twenty feet is over six thousand millimetres, so at this rate, we wouldn’t even be halfway by the year 3017.

    That’s what a High Court judge in the United Kingdom said ten years ago when he ruled that Gore’s film could only be shown in British schools with guidance notes to prevent political indoctrination: “The Armageddon scenario he predicts, insofar as it suggests that sea level rises of seven metres might occur in the immediate future, is not in line with the scientific consensus” and would only happen “after, and over, millennia.”

    http://www.huffingtonpost.ca/jasmin-guenette/al-gores-inconvenient-sequel_b_16669842.html

    More coming….

    • Jason C says:

      Sea level rise is very dependent on Greenland melt. Once/If artic ice disappears Greenland will heat up relatively quickly. I think oil supply is more immediate threat
      Seems like 2020’s is going to be rough decade, but “It’s hard to make predictions, especially about the future”.

      • Fast Eddy says:

        While we were celebrating our Independence Day on July 4th, Summit Station in Greenland may have experienced the coldest July temperature ever recorded in the Northern Hemisphere at -33°C (-27.4°F).

        Much of Greenland has been colder-than-normal for the year so far and has had record or near record levels of accumulated snow and ice since the fall of last year.

        The first week of this month was especially brutal in Greenland resulting in the record low July temperature and it also contributed to an uptick in snow and ice extent – despite the fact that it is now well into their summer season.

        https://www.vencoreweather.com/blog/2017/7/6/115-pm-impressive-cold-in-greenland-and-near-record-accumulations-of-snow-and-ice

        • HideAway says:

          Just for some inconvenient facts….
          https://www.ncdc.noaa.gov/sotc/global/201613

          “Separately, temperatures were record high across land surfaces as well. The global annual land surface temperature for 2016 was 1.43°C (2.57°F) above the 20th century average, surpassing the previous record of 2015 by 0.11°C (0.19°F). Some extremely high monthly land surface temperatures contributed to this warmth. March 2016 saw the highest globally-averaged land surface temperature among all months in the historical record, at 2.35°C (4.23°F) above the 20th century average. February had the second highest all-time monthly temperature, at +2.24°C (+4.03°F) and April had the fifth highest, at +1.85°C (+3.33°F).”

          FE for someone that wants to deny what is happening in the world, why do you post so much about it, instead of ignoring it??

          I certainly agree with you that it is nowhere near as important as peak energy use in our existing BAU system though. Collapse will get us before Geerbal Worming.

          • Fast Eddy says:

            I am sure Tim will have something to say about this. Like how does one measure the global average temperature…. and how is it possible to have record cold temperatures when every year we thicken the c02 blanket that is wrapping the earth.

            All I have to say is Al Gore bought a $9m property that is barely above sea level — when he stated that the oceans were going to swamp us.

            What more do you need?

            • Fast Eddy says:

              Seriously — if I could take a baseball bat to the people who continue to argue this claptrap … and bash their f789ing heads in …. without any punishment.

              I would not hesitate

            • Fast Eddy says:

              Um…. Al Gore is lying … he is the king of ____ ____

              The MSM lies about everything

              Did it not occur to you that what you read about the world boiling — is a lie?????

              As I and Gail and others have pointed out — the masses CANNOT be allowed to get wind of the end of oil — they PTB will do WHATEVER it takes to get them off the trail of that issue….

              So they will unleash every tool in the box including outright lying to achieve that end.

              Think of the tsunami of MSM articles that claim the US is at full employment. That is a gargantuan lie.

              Yet that is what we read day after day after day

            • Tim Groves says:

              My response is being held in moderation at present.
              I must have used a naughty word.

              I share Eddy’s exasperation but before I reach for my cricket bat, I’ll remind myself that we’re drenched so deeply in propaganda concerning this issue that it is no surprise that many people, including some superficially smart ones, will be taken in by it. But for the most part, it has become one of those things that establishment and conformist types simply have to endorse publicly, regardless of what they really think, for fear of being black-balled and no longer invited to parties.

              In the past week there have been icebreakers on the Hudson River in NYC, some very impressive frozen seas off New England, frozen alligators in Florida, up to 20 feet of snow in the French and Italian Alps, 13,000 tourists trapped by heavy snow at the Swiss resort of Zermatt, heavy snowfall in Morocco, record cold in Bangladesh, record snow and 2.5 million without power in China, and, closer to home for me, extremely heavy snow in the Japanese “Snow Country” trapping over 400 vehicles on a highway in Toyama and over 400 passengers in trains stranded overnight for up to 15 hours in Niigata.

              These simultaneous very colder-than-usual conditions across so much of the northern hemisphere simply can’t be explained by the effects of See Oh Two induced globally wobbally. Moreover, if globally warm-ing causes cool-ing, then it must follow that globally cool-ing causes warm-ing.

              http://www.ntv.co.jp/englishnews/society/heavy_snow_strands_trains_for_15_hours_in_niigata/

          • dje says:

            “These simultaneous very colder-than-usual conditions across so much of the northern hemisphere simply can’t be explained by the effects of See Oh Two induced globally wobbally.”

            Correct. But the climate can be explained in the same way as the economy can be: it is also a dissipative structure, but its energy input is various forms of EM radiation from the sun. As long as the sun’s TSI (Total Solar Irradiance) is increasing, the climate can be stable, but when it decreases significantly (as it is now in the cycle) the climate system is less stable as some parts of the complex system rearrange. This system also effects volcanoes and earthquakes via some kind of effect on the earth’s magnetic field, which is why during times like the Dalton Minimum you tend to get large volcanic eruptions like the one that caused the Year Without a Summer in addition to heavy earthquake activity.

    • Lastcall says:

      Wow, so our best bet is to cut down some more trees, pave over paradise and put up a parking lot. Who knew!

      • Fast Eddy says:

        The stooopidy of people never ceases to amaze me…..

        We are marooned on a very small island (FW) surrounded by a sea of raving stuuuupidity and madness… kicking in the teeth the MORE ons who constantly try to overrun the island…

        • Tim Groves says:

          A kindred spirit?

          Gustave Flaubert letter to Ivan Turgenev

          November 13, 1872

          My dear Turgenev,

          Your last letter touched me deeply. Thank you for your exhortations. But alas! My ailment is incurable, I fear. Besides my personal reasons for grief (the death during the last three years of almost everyone I loved), I am appalled by the state of society. Yes, such is the case. Stupid, perhaps, but there it is. The stupidity of the public overwhelms me. Since 1870 I’ve become a patriot. Watching my country die, I feel that I loved her. Prussia may lay down her arms: we can destroy ourselves perfectly well without her help.

          The bourgeoisie is so bewildered that is has lost all instinct to defend itself; and what will succeed it will be worse. I’m filled with the sadness that afflicted the Roman patricians of the fourth century: I feel irredeemable barbarism rising from the bowels of the earth. I hope to be gone before it carries everything away. But meanwhile it’s not very gay. Never have things of the spirit counted for so little. Never has hatred for everything great been so manifest – disdain for Beauty, execration of literature.

          I have always tried to live in an ivory tower, but a tide of sh*t is beating at its walls, threatening to undermine it. It’s not a question of politics but of the mental state of France. Have you seen [Jules] Simon’s circular, with its plan for the reform of public education? [Simon was at this time the Minister of Public Instruction.] The paragraph about physical training is longer than the one about French literature. There’s a significant little symptom!

          In short, my dear friend, if you weren’t living in Paris I’d promptly surrender my flat to my landlord. The hope of seeing you there occasionally is my only reason for keeping it on.

          I can no longer talk with anyone at all without becoming furious, and everything I read by my contemporaries makes me quiver with indignation. A fine state to be in! Not that it’s preventing me from preparing a book in which I’ll try to spew out my bile. I’d like to talk with you about it. So, as you see, I’m not letting myself be disheartened. If I didn’t work, my only course would be to jump in the river with a stone around my neck. 1870 drove many insane, made imbeciles of others, and left others in a permanent state of rage. I’m in the last category. It’s the right one.

          Meanwhile, take care of your gout, my poor friend, and know full well that I love you.

          Gustave

          • Artleads says:

            “If I didn’t work, my only course would be to jump in the river with a stone around my neck. ”

            Thanks Tim. I had a thoroughly good laugh at this. What a letter!

          • Fast Eddy says:

            Mass stuuuupidity … is about to be … exterminated.

            Gustave would be pleased.

      • JH Wyoming says:

        Maybe you didn’t even bother to go to the link. It shows a house that gets solar on its roof and that’s equivalent to acres of new growth forest. Get it? Geez you guys are all hung over.

        • Lastcall says:

          I went there. When solar panels can make solar panels from their production I will change my mind.
          What are the life-cycle returns re- net CO2 benefit. This site seems to indicate solar panels have a very small carbon footprint. Other sites say the lifetime return barely justifies the use of resources to produce said solar panels.
          Disclaimer; I use solar power for my small woodlot (50 acres with workshop), boat and container house, but I don’t see them as providing a net benefit to IC.

          • Energy^2 says:

            No device can generate energy in excess of the total energy put into constructing it.

            • nope.avi says:

              Not true. Intermittency is solar’s main problem not it’s considerable embodied energy. We can’t really use intermittent electricity to run industrial civilization.

            • Energy^2 says:

              Solar or other types of energy generating devices. Read this Experiment, and then keep saying ‘Not true’!

            • Ed says:

              There is a difference between generate and collect. Solar pane collect energy from the sun they in fact make zero energy. The energy emitted by the sun is in turn from converting nuclear potential energy into light via fusion of hydrogen.

            • Energy^2 says:

              Internal combustion engines convert kinetic energy in fossil fuels to mechanical energy. Solar cells convert photovoltaic energy they receive from the Sun to electrical energy.
              Hydro convert kinetic energy to electromagnetic energy.
              Nuclear convert kinetic energy in atoms to heat and radiation.
              And so on…
              The forces that have created our Sun are far greater than the total energy the Sun will ever produce.

              What the “difference between generate and collect”?

      • psile says:

        Indeed. There it was, hiding under our very noses. The solution to human stupidity. More stupidity!

    • grayfox says:

      Eh, I’ll take door number 2 and the small mature forest.

    • I am sorry, but this is a bunch of propaganda. The big issue is that the solar panels are damaging to the electric grid, because of the intermittent nature of the electricity they produce. They cannot operate by themselves, without other power plants subsidizing their operation, basically by being on call to provide electricity when they cannot. This system cannot operate without huge subsidies, because the other power plants cannot sit around (and their workers cannot sit around) and not be paid. Furthermore, pricing systems are often badly distorted by the intermittency, causing rates to fall too low for other providers.

      The only the way the system “works” is if a whole lot of battery or some other kind of backup is added, so that the solar can be “dispatchable” like other electricity. But adding anywhere nearly enough backup capability wrecks the supposed CO2 savings of the system. It is not clear that we would have enough materials to do this either.

      It is only as systems are being installed around the world that we are discovering how badly solar when added to the electric grid works in practice. The first few percentage added to the grid can be accommodated all right, but more and more adjustments are needed as bigger percentages are added. From the perspective of the customers, the problem of too low rates for electrical prices for backup providers can seem like a benefit. Over the long term, however, artificially low prices will cause bankruptcies of needed electrical backup, bring down the electrical grid.

      • DJ says:

        “Over the long term, however, artificially low prices will cause bankruptcies of needed electrical backup, bring down the electrical grid.”
        I think costs like that is pushed over to the consumer, making him bankrupt or at least poor.

        • JH Wyoming says:

          Good point, DJ. We’ll take it on the chin long before the utilities.

        • Energy^2 says:

          Cost is set by the ‘sociopolitical’ system ruling, like setting up the artificial price of Cement in the old Soviet Union, say.
          As long as that sociopolitical system is able to endure, prices can be kept artificial.
          The only game-changer will be the availability of fossil fuel energy to make the ‘Cement’ or the solar panel, in our example.
          That’s why the World cannot leave the Middle East alone, and conflicts in the Middle East never end! 🙂

    • DJ says:

      How many watts are your panels?
      How many kwh storage?

      • Pintada says:

        I have 7000watts of panels, and right now, I have no storage. Well, actually, I have my storage in storage.

        The reason that my batteries are not installed is that, (hurray (small h) ), its BAU.

        So, I am on the grid. In the summer, I run the meter backward because there is no need for heat. In the winter, the meter runs forward, but only enough to reach zero (with a minor reserve for contingencies).

        After BAU ends – as defined here as the day the power goes off – I will install the backup and do a number of other things:

        1. I will install the wood stove that I have in storage – who heats with electricity?!?!!?!?
        2. I will stop raising Turmeric. My tropical green house will need to be managed so that the crops finish in the fall.
        3. And so on … you get the idea.

  4. adonis says:

    maybe the elders plan b needs to fail before it can succeed

  5. adonis says:

    The United Nations Conference on the Human Environment,

    Having met at Stockholm from 5 to 16 June 1972,
    Having considered the need for a common outlook and
    for common principles to inspire and guide the peoples
    of the world in the preservation and enhancement of the
    human environment,
    I
    Proclaims that:
    1. Man is both creature and moulder of his environw
    ment, which gives him physical sustenance and affords
    him the opportunity for intellectual, moral, social and
    spiritual growth. In the long and tortuous evolution of
    the human race on this planet a stage has been reached
    when, through the rapid acceleration of science and
    technology, man has acquired the power to transform his
    environment in countless ways and on an unprecedented
    scale. Both aspects of man’s environment, the natural
    and the manwmade, are essential to his well-being and
    to the enjoyment of basic human rights-even the right
    to life itself.
    evidence of a plan B ?

  6. JH Wyoming says:

    http://www.bbc.com/news/world

    This is hilarious! In Hawaii this morning there was a false alarm inbound missile alert. Someone accidentally hit the button that set off the missile alert system, including sirens and people started panicking heading for shelters. Seriously, a must read.

    • HideAway says:

      Here in Australia, the reaction to such a ‘threat announcement’ would be mostly ho hum.

      Every year we get warnings of the worst bushfire season in ‘x’ years, and every 10-20 years there is the big one, but people tend to just go about their daily lives.

      A few years ago we were in a museum in Melbourne when the fire alarm sounded. There was no smoke, and everyone carried on looking at the exhibitions as if nothing was wrong.
      As no-one paid any attention to it, soon staff started telling people to please make their way to the exits. Everyone just strolled around and eventually went to the exits, just very calmly.
      We have the most poisonous snakes and spiders in the world here, yet people still live and walk etc through the bush. We have the most dangerous sharks, sea-snakes, octopus etc, yet people still go swimming, surfing etc in the sea.

      If I received a ‘ballistic missile’ warning on my phone, I’d ignore it, just like everyone else around these parts.

      If people really took to heart all the warnings we receive, and acted according to the official guidelines, food production would crash in this area/state, as people would have left their farms about 80 days/year.

      In the last 25000 days, how many missiles, bombs etc have attacked Hawaii (excluding locals)?? Answer Zero, none, nada!!

      The real things to worry about seem to only get mentioned on blogs like this, never officially!!

      • adonis says:

        that is true hideaway i am from australia and people only react to the real thing not warnings i guess it is our laid back nature

    • adonis says:

      panic the ultimate motivator

    • i1 says:

      What’s funny is that you believe someone accidentally pushed a button.

    • doomphd says:

      what’s interesting is the ‘Fo Real’ button was pushed, not the Test button. then the operator was prompted to confirm the action, and he/she pushed/clicked on yes. might be a new job opportunity opening for Hawaii Civil Defense.

  7. Kurt says:

    Sheesh. Al and Elon walk into a sex party. The bartender says,”what’ll ya have?”

  8. psile says:

    All my recent posts are held for moderation. Why?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s