Nine Reasons Why Globalization Can’t Be Permanent

Since the late 1990s, globalization has seemed to be the great hope for the future. Now this great hope seems to be dimming. Globalization sets up conflict in the area of jobs. Countries around the world compete for development and jobs. If there is not enough cheap-to-produce energy to go around, huge wage disparity is likely to result.

We know from physics and history that economies need to grow, or they collapse. The wage disparity that high-wage countries have been experiencing in recent years is evidence that the world economy is already reaching energy limits. There are no longer enough jobs that pay well to go around. Any drop in energy supply is likely to worsen the job situation.

Most observers miss this problem, because they expect high oil prices to signal energy limits. This time, the signal is low wages for a significant group of workers, rather than high oil prices. This situation is possible in a networked economy, but it is not what most people look for.

Unhappy citizens can be expected to react to the wage disparity problem by electing leaders who favor limits to globalization. This can only play out in terms of reduced globalization.

History and physics suggest that economies without adequate energy supply can be expected to collapse. We have several recent examples of partial collapses, including the Great Depression of the 1930s and the collapse of the Soviet Union. Such collapses, or even more extensive collapses, might occur again if we cannot find energy alternatives that can be quickly scaled up to replace oil and coal in the very near term. These replacements need to be cheap-to-produce, non-polluting, and available in huge quantities.

The story that the economy doesn’t really need a growing supply of very cheap-to-produce energy is simply a myth. Let’s look at some of the pieces of this story.

[1] The world economy needs to grow or it collapses. Once all of the nations of the world are included in the world economy, one obvious source of growth (incorporating nations that are not yet industrialized into the world economy) disappears. 

The reason why the world economy needs to grow is because the economy is a self-organized system that operates under the laws of physics. In many ways it is like a two-wheeled bicycle. A bicycle needs to roll quickly enough, or it will fall over. An economy must grow quickly enough, or debt cannot be repaid with interest.

Also, government promises may be a problem with slow growth. Pensions for the elderly are typically paid out of tax revenue collected in that same year. It is easy for a mismatch to take place if the number of younger workers is shrinking or if their wages are lagging behind.

Figure 1. Author’s view of analogies of speeding upright bicycle to speeding economy.

I explain a little more about my bicycle analogy in Will the World Economy Continue to “Roll Along” in 2018?

Economies throughout the ages have collapsed. In some cases, entire civilizations have disappeared. In the past 100 years, partial collapses have included the Great Depression of the 1930s, the collapse of the central government of the Soviet Union in 1991, and the Great Recession of 2008-2009. Economic collapses are analogous to bicycles falling over.

[2] A growing supply of energy products is extraordinarily important for keeping the world economy operating.

We can see in Figure 1 that the energy of the person operating a bicycle is very important in allowing the operation of the bicycle to continue. In the world’s economy, the situation is similar, except that we are facing a problem of a world population that is continually growing. In a sense, the economic situation is more like a rapidly growing army of bicycles with riders. Each member of the economy needs goods and services such as food, homes, clothing, and transportation. The members of the economy can collapse individually (for example, growing suicide rate) or in much larger groups (collapsing government of a country).

Figure 2. World population according to the United Nations 2017 historical estimates and Medium forecast of population growth after 2017.

In an economy, we have a choice regarding how much energy to use. If more energy is used, workers can have many tools (such as trucks and computers) to leverage their productivity. If all goods are made with few energy inputs other than human labor, most workers find themselves working in subsistence agriculture. The total amount of goods and services produced in such an economy tends to be very small.

If supplemental energy is used, many more jobs that pay well can be added, and many more goods and services can be created. Workers will be rich enough that they can pay taxes to support representative government that supports many services. The whole economy will look more like that of a rich nation, rather than the economy of Somalia or Haiti.

Individual nations can grow their economies by using available energy supply to create jobs that pay well. Globalization sets up competition for available jobs.

If a given country has a lot of high paying jobs, this is likely to be reflected in high per capita energy consumption for that country. There are two reasons for this phenomenon: (1) it takes energy for an employer to create jobs, and (2) workers can use their wealth to buy goods and services. This wealth buys more goods and services made with energy products.

[3] One measure of how well the world economy is doing is world energy consumption per capita. On this basis, the world economy is already reaching limits.

Figure 3. World energy per capita and world oil price in 2016 US$. Energy amounts from BP Statistical Review of World Energy, 2017. Population estimates from UN 2017 Population data and Medium Estimates.

It is clear from Figure 3 that energy consumption tends to move in the same direction as oil price. If “demand” (which is related to wages) is high, both oil price and the amount of energy products sold will tend to be high. If demand is low, both oil price and the amount of energy products sold will tend to be low.

Since 2014, energy consumption has remained quite high, but oil prices have fallen very low. Today’s oil prices (even at $70 per barrel) are too low for oil producers to make adequate investment in the development of new fields and make other needed expenditures. If this situation does not change, the only direction that production of oil can go is down, rather than up. Prices may temporarily spike, prior to the time production falls.

Looking at energy consumption per capita on Figure 3 (above), we notice that this amount has been fairly flat since 2011. Normally, in a growing world economy, a person would expect energy consumption per capita to rise, as it has most of the time since 1820 (Figure 4).

Figure 4. 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 fact that energy consumption per capita has been nearly flat since 2011 is worrying. It is a sign that the world economy may not be growing very rapidly, regardless of what government organizations are reporting to the World Bank. Some subsidized growth should not really be considered economic growth. For example, some Chinese cities have been buying off the country’s housing glut with borrowed money. A better accounting would likely show lower GDP growth for China and the world.

Looking more closely at Figure 3, we note that energy per capita hit a high point in 2013, just before world oil prices began sliding downward. Since then, world energy consumption per capita has been trending downward. This is part of the reason for gluts in supply. Producers had been planning as if normal growth in energy consumption would continue. In fact, something is seriously wrong with demand, so world energy consumption has not been rising as fast as in the past.

The point that is easy to miss is that (a) growing wage disparity plus oil gluts and (b) high oil prices are, in a sense, different ways of reflecting a similar problem, that of an inadequate supply of truly inexpensive-to-produce oil. High-cost-to-produce oil is not acceptable to the economy, because it doesn’t produce enough jobs that pay well, for each barrel produced. If oil prices today truly represented what oil producers (such as Saudi Arabia) need to maintain their production, including adequate tax revenue and funds to develop additional production, oil prices would be well over $100 per barrel.

We are dealing with a situation where no oil price works. Either prices are too high for a large number of consumers or they are too low for a large number of producers. When prices are low, relative to the cost of production, we tend to get wage disparity and gluts.

[4] The reason why energy demand is not growing is related to increased wage disparity. This is a problem for globalization, because globalization acts to increase wage disparity.

In the last section, I mentioned that demand is closely connected to wages. It is really wage disparity that becomes a problem. Goods and services become less affordable for the people most affected by wage disparity: the lower-paid workers. These people cut back on their purchases of goods such as homes and cars. Because there are so many lower-paid workers in the world, demand for energy products, such as oil and coal, fails to grow as rapidly as it otherwise would. This tends to depress prices for these commodities. It doesn’t necessarily reduce production immediately, however, because of the long-term nature of investments and because of the dependence of oil exporters on the revenue from oil.

Figure 5 shows that China and India’s energy consumption per capita has been rising, leaving less for everyone else.

Figure 5. Energy consumption per capita comparison, based on energy data from BP Statistical Review of World Energy 2017, and UN 2017 Population Estimates.

A major way that an economy (through the laws of physics) deals with “not enough goods and services to go around” is increased wage disparity. To some extent, this occurs because newly globalized countries can produce manufactured products more cheaply. Reasons for their advantage are varied, but include lower wages and less concern about pollution.

As a result, some jobs that previously would have been added in developed countries are replaced by jobs in newly globalized countries. It is probably not a coincidence that US labor force participation rates started falling about the time that China joined the World Trade Organization in 2001.

Figure 6. US Labor Force Participation Rate, as prepared by Federal Reserve Bank of St. Louis.

Lower wages for unskilled workers may also occur as the result of immigration, and the resulting greater competition for less skilled jobs. This has been a particular concern in the UK.

[5] Adding China, India, and other countries through globalization temporarily gives a boost to world energy production. This boost disappears as the energy resources of the newly added countries deplete.

Both China and India are primarily coal producers. They rapidly ramped up production since joining the World Trade Organization (in 1995 for India; in 2001 for China). Now China’s coal production is shrinking, falling 11% from 2013 to 2016. Both China and India are major importers of fossil fuels (difference between black line and their own production).

Figure 7. China’s total energy consumption compared to its energy production by type, based on BP Statistical Review of World Energy, 2017.

Figure 8. India’s total energy consumption compared to its energy production by type, based on BP Statistical Review of World Energy, 2017.

China and India’s big surge in coal production has had a major impact on world coal production. The fact that both countries have needed substantial imports has also added to the growth in coal production in the “Other” category in Figure 9.

Figure 9 also shows that with China’s coal production down since 2013, total world coal production is falling.

Figure 9. World coal production by part of the world, based on BP Statistical Review of World Energy, 2017.

Figure 10 shows that world GDP and world energy supply tend to rise and fall together. In fact, energy growth tends to precede GDP growth, strongly suggesting that energy growth is a cause of GDP growth.

Figure 10. World three-year average GDP growth compared to world three-year average energy consumption growth. GDP data is from the World Bank, based on 2010 US$ weights of GDP by country; energy consumption is from BP Statistical Review of World Energy, 2017.

If a growth in energy consumption is indeed a primary cause of world economic growth, the drop in world coal production shown in Figure 9 is worrying. Coal makes up a large share of world energy supply (28.1% according to Figure 12). If its supply shrinks, it seems likely to cause a decline in world GDP.

Figure 11 shows energy consumption growth on a basis comparable to the energy consumption growth shown on Figure 10, except for different groupings: for the world in total, the world excluding China, and for the combination of the US, EU, and Japan. We can see from Figure 11 that the addition of China and Japan has greatly propped up growth in world energy consumption since 2001, when China joined the World Trade Organization.

Figure 11. Three-year average growth in energy consumption, for the world total; the world less China and India; and for the sum of the United States, the European Union, and Japan. Energy data from BP Statistical Review of World Energy, 2017.

The amount of the “benefit” was greatest in the 2003-2007 period. If we look at Exhibit 10, we see that world economic growth was around 4% per year during that period. This was a recent record high. Now the benefit is rapidly disappearing, reducing the possibility that the world energy consumption can grow as rapidly as in the past.

If we want world energy consumption per capita to rise again, we need a new large rapidly growing source of cheap energy to replace the benefit we received from China and India’s rapidly growing coal extraction. We don’t have any candidates for a suitable replacement. Intermittent renewables (wind and solar) are not candidates at all. According to the IEA, they comprised only 1% of world energy supply in 2015, despite huge investment. They are part of the gray “Other” slice in Figure 11.

Figure 12. Figure prepared by IEA showing Total Primary Energy Supply by type from this IEA document

Academic studies regarding wind and solar have tended to focus on what they “might” do, without considering the cost of grid integration. They have also overlooked the fact that any energy solution, to be a true energy solution, needs to be a huge energy solution. It has been more pleasant to give people the impression that they can somehow operate a huge number of electric cars on a small amount of subsidized intermittent electricity.

[6] On a world basis, energy consumption per capita seems to need to be rising to maintain a healthy economy. 

When energy consumption is growing on a per capita basis, the situation is similar to one in which the average worker has more and more “tools” (such as trucks) available at his/her disposal, and sufficient fuel to operate these tools. It is easy to imagine how such a pattern of growing energy consumption per capita might lead to greater productivity and therefore economic growth.

If we look at historical periods when energy consumption has been approximately flat, we see a world economy with major problems.

Figure 13. 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 flat period of 1920-1940 seems to have been caused by limits reached on coal production, particularly in the United Kingdom, but also elsewhere. World War I , the Great Depression of the 1930s, and World War II all took place around this time period. Charles Hall and Kent Klitgaard in Energy and the Wealth of Nations argue that resource shortages are frequently the underlying cause for wars, including World Wars I and II.

The Great Depression seems to have been a partial economic collapse, indirectly related to great wage disparity at that time. Farmers, in particular, had a difficult time earning adequate wages.

The major event that took place in the 1990 to 2000 period was the collapse of the Soviet Union in 1991. The central government collapsed, leaving the individual republics to operate independently. The Soviet Union also had strong trade relationships with a number of “satellite” countries, including Cuba, North Korea, and several Eastern European countries. In the next section, we will see that this collapse had a serious long-term impact on both the republics making up the Soviet Union and the satellite countries operating more independently.

[7] The example of the Soviet Union shows that collapses can and do happen in the real world. The effects can be long lasting, and can affect trade partners as well as republics making up the original organization.

In Figure 14, the flat period of the 1980-2000 period seems to be related to intentional efforts of the United States, Europe, and other developed countries to conserve oil, after the oil price spikes of the 1970s. For example, smaller, more fuel conserving vehicles were produced, and oil-based electricity generation was converted to other types of generation. Unfortunately, there was still a “backfire” effect related to the intentional cutback in oil consumption. Oil prices fell very low, for an extended period.

The Soviet Union was an oil exporter. The government of the Soviet Union collapsed in 1991, indirectly because with these low oil prices, the government could not support adequate new investment in oil and gas extraction. Businesses closed; people lost their jobs. None of the countries shown on the Figures 14 and 15 have as high energy consumption per capita in 2016 as they did back when the Soviet Union collapsed.

Figure 14. Per capita energy consumption for the Soviet Union and three of its satellite countries. Energy data from BP Statistical Review of World Energy, 2017. Population data from UN 2017 Population data and Middle Estimates.

The three satellite countries shown on Figure 14 (Bulgaria, Hungary, and Poland) seem to be almost as much affected as the republics that had been part of the Soviet Union (Figure 15). This suggests that loss of established trading patterns was very important in this collapse.

Figure 15. Per capita energy consumption for the three largest (by population) republics that made up the Soviet Union. Energy data from BP Statistical Review of World Energy, 2017. Population data from UN 2017 Population data and Middle Estimates.

Russia’s per capita energy consumption dropped 29% between peak and trough. It had significant fossil fuel resources, so when prices rose again, it was again able to invest in new oil fields.

Ukraine was a major industrial center. It was significantly impacted by the loss of oil and gas imports. It has never recovered.

The country that seemed to fare best was Uzbekistan. It had little industry before the collapse, so was less dependent on energy imports than most. Of all of the countries shown on Figures 14 and 15, Uzbekistan is the only one that did not lose population.

[8] Today, there seem to be many countries that are not far from collapse. Some of these countries are energy exporters; some are energy importers.

Many of us have read about the problems that Venezuela has been having recently. Ironically, Venezuela has the largest oil reserves in the world. Its problem is that at today’s prices, it cannot afford to develop those reserves. The Wikipedia article linked above is labeled 2014-2018 Venezuelan protests. Oil prices dropped to a level much lower than they had been in 2014. It should not be surprising that civil unrest and protests came at the same time.

Figure 16. Monthly average spot Brent oil prices, through December 2017, based on EIA data.

Other oil producers are struggling as well. Saudi Arabia has recently changed leaders, and it is in the process of trying to sell part of its oil company, Saudi Aramco, to investors. The new leader, Mohamed bin Salman, has been trying to get money from wealthy individuals within the country, using an approach that looks to outsiders like a shake-down. These things seem like very strange behaviors, suggesting that the country is experiencing serious financial difficulties. This is not surprising, given the low price of oil since 2014.

On the oil-importer side, Greece seems to frequently need support from the EU. The lower oil prices since 2014 have somewhat helped the country, but the basic shape of the energy consumption per capita chart makes it look like it is struggling to avoid collapse.

Figure 17. Greece energy per capita. Energy data from BP Statistical Review of World Energy, 2017; population estimates from UN 2017 Population data and Medium projections.

There are many other countries struggling with falling energy consumption per capita. Figure 18 shows a chart with four such countries.

Figure 18. Energy consumption per capita for Japan, UK, Italy, and Spain. Energy consumption from BP Statistical Review of World Energy; population from UN 2017 Population data and Medium Estimates.

In a sense, even though oil prices have been lower since 2014, prices haven’t been low enough to fix the economic problems these countries have been having.

China is in a different kind of situation that could also lead to its collapse. It built its economy on coal production and rapidly growing debt. Now its coal production is down, and it is difficult for imports and substitution of other fuels to completely compensate. If slowing growth in fuel consumption slows economic growth, debt will become much harder to repay. Major debt defaults could theoretically lead to collapse. If China were to collapse, it would seriously affect the rest of the world because of its extensive trading relationships.

[9] Leaders of countries with increasing wage disparity and unhappy electorates can be expected to make decisions that will move away from globalization. 

Unhappy workers are likely to elect at least some leaders who recognize that globalization is at least a small part of their problems. This is what has happened in the US, with the election of President Trump.

The hope, of course, is that even though the rest of the world is becoming poorer and poorer (essentially because of inadequate growth of cheap-to-produce energy supplies), somehow a particular economy can “wall itself off” from this problem. President Donald Trump is trying to remake trading arrangements, based on this view. The UK Brexit vote was in a sense similar. These are the kinds of actions that can be expected to scale back globalization.

Conclusion

Having enough cheap energy for the world’s population has been a problem for a very long time. When there is enough cheap-to-produce energy to go around, the obvious choice is to co-operate. Thus the trend toward globalization makes sense. When there is not enough cheap-to-produce energy to go around, the obvious choice is to try reduce the effects of globalization and immigration. This is the major reason why globalization can’t last.

We now have problems with both coal and oil. With the decline in China’s coal supplies, we are reaching the point where there are no longer enough cheap energy supplies to go around. At first glance, it looks like there is enough, or perhaps even a superabundance. The problem is that no price works. Producers around the world need higher oil prices, to be compensated for their total cost, including the cost of extraction, developing new fields, and the tax levels governments of exporting countries need. Consumers around the world are already having trouble trying to afford $70 per barrel oil. This is what leads to gluts.

We have been told that adding wind and solar to the electric grid can solve our problems, but this solution is simply absurd. If the world is to go forward as before, it somehow needs a new very large, very cheap supply of energy, to offset our problems with both coal and oil. This new energy supply should not be polluting, either.

At this point, it is hard to see any solution to the energy problems that we are facing. The best we can try to do is “kick the can” down the road a little farther. Perhaps “globalization light” is the way to go.

We live in interesting times!

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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2,343 Responses to Nine Reasons Why Globalization Can’t Be Permanent

  1. Not all malls are dying. Malls for the very rich are doing quite well.

    https://www.bloomberg.com/news/features/2018-02-08/this-mall-is-only-for-the-rich-and-it-s-doing-fine

    The Santa Anita mall in Arcadia is also doing great. It looks like it is in Taiwan, full of Chinese and other Asian stores and restaurants. And the Chinese make sure the ‘youths’ are kept out.

  2. Dennis L says:

    Is it my mistake or wasn’t there a thread about this not being possible?
    https://www.zerohedge.com/news/2018-02-18/waymos-uber-killer-robo-taxi-set-arizona-rollout
    If it works, trucks are next which implies capital costs go down for trucks(assuming solo drivers) as the truck can run 24/7 with no rest breaks.
    It is a great time to be alive, so much progress.

    • jupiviv says:

      I’m not American, but I’m guessing Arizona isn’t a heavily populated area with lots of traffic.

      “In November, the company said a portion of its cars in the Phoenix area were operating in fully autonomous mode, what’s known in industry parlance as level four autonomy.”

      What that ‘portion’ actually is and in which traffic scenarios it is implemented will tell you whether this will work and be adopted elsewhere. Fun fact – level 4 autonomy is effectively intended for scenarios where 100% of other vehicles are operating with level 4 autonomy.

    • greg machala says:

      That chart looks like a giant sucking sound of jobs leaving America.

    • Dennis L says:

      My parents survived the depression living in a tent doing surveying work for the Coast and Geodetic survey. My grandmother lived with us until her late nineties due to her husband being killed working on the railroad. They kept a house and did so through the depression and what followed, and they did it without a cellphone.
      The only thing that makes a difference in my life is what I can do with what I have. I am an old fart who is damn lucky to have excellent health, but I accept that things change, conditions change. I adapt. We can’t change the debt, etc., we can adapt, be happy and go forward.
      If has been done, it can be done.

      • JH Wyoming says:

        Yeah, Dennis, but wasn’t that with a whole lot of cheap FF still to be extracted? Now we just have the more expensive stuff. I’m not saying people can’t find ways, but the next depression may be permanent, with only a downside from there. One possibility is if the population squeezed through a small enough bottleneck, those emerging on the other side might live relatively well because of a lack of competition for what good remaining stuff is left over. But that’s going to be a rather dystopian existence compared to full on FF super charged BAU we’ve been used to. I want my teeth cleaned every six months, sonicare replacement toothbrushes, carrot juice, Drambuie, Swiss chocolate, propane for heating, new white sox every now and then, grid electrical supply, water-sewer, European bock beer, an XLT Ford truck, 65″ ultra high definition Samsung with a DVR connected to a satellite dish, 4 quad mini-split AC/heat, full array of organic produce, all that stuff will be forgotten like tears in rain.

        • Dennis L says:

          WWII was a bitch for my father, swimming up on beaches to make way for Marines even though it was the sunny Pacific. I am not sure about he last part of your comment, I think it is sarcastic. All that stuff really is a burden, more than most people know.
          My parents’ home had a 30 amp per leg electrical supply, the whole family lived into their nineties without all that stuff. We were happy, it was all good. For me, we are trying to purchase who we are, it is within us; but, I have been very lucky and I am grateful for that.

          If it has been done, it can be done.
          Dennis L.

        • Baby Doomer says:

          Next depression?

          We have been in a depression for the last 11 years already…Depression means “Depressed Economic Growth” as in low…What we are headed for is an economic collapse soon..

          The Great Depression 1929-1940 US Economic Growth GDP (1%)
          https://en.wikipedia.org/wiki/Great_Depression

          The Great Recession 2006-2017 US Economic Growth GDP (1.5%)
          https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/

          OECD Economic Growth GDP Per Capita

      • DJ says:

        “has been done, it can be done.”

        It was done with half the population, twice the resources and a fraction of the complexity.

  3. Lastcall says:

    At the moment in NZ we are waiting for the remnants of a tropical cyclone to hit us; a weather bomb according to the hyped-upped met office we have here. Its a weird time, with strange calmness mixed with preparations for a few bad days of weather.

    We seem to be the same in the western world; so many people know there is something over the horizon – some believe its a colony on Mars, some believe its a generational change, some see an end to life-as-we-know it. So all around we see so many different expectations of what the future will bring that the clash of ideas and prescriptions are bewildering. Insecurity is the one common theme.

    • Dennis L says:

      Waiting for Godot. It is going to change, we can’t change it, we can adapt, we can smile, be happy for life; it is not all bad. Insecurity is common, live with it, carpe diem.

      Dennis L.

      • xabier says:

        ‘What’s the use of worrying? It never was worth while, so pack up your troubles in your old kit bag and smile, smile, smile!’

    • JH Wyoming says:

      “a weather bomb according to the hyped-upped met office we have here.”

      I saw a NOVA special on hurricanes in the area Puerto Rico got hit and from evidence they were able to put together, there was a monster storm that raked through something like 150 years ago. If another one like that hits in this day and age, the damage will be off the charts. Our species just keeps pushing and where we stop nobody knows, but it’s bound to be a wild ride.

    • Fast Eddy says:

      I find myself waking up at strange hours… as if something ominous was about to strike….

  4. Lastcall says:

    Actually, thats what it is. Depending on your place-status-location on the planet, groups are preparing for completely different futures. You can justify your belief in the direction the world is taking by googling exactly that future. …we here at OFW do just that, as do others who are packing ready for Mars. Anything is possible via google!

    ……the centre cannot hold…comes to mind.

    • Davidin100millionbilliontrillionzillionyears says:

      confirmation bias… we see it here at OFW and everywhere else…

      “… googling exactly that future…”

      try googling “Mars Generation”…

      but, just because naive people THINK they have a dreamy future, doesn’t mean it will be so…

      FF is the one true primary source of wealth and progress, and the decline of FF will be the hammer that shatters those naive dreams.

    • Sven Røgeberg says:

      I liked this your comment. I hope i’m allowed to paraphrase it in my next article;)
      We are all riding on our elephants of emotions and intiutions, and trying to figure out reasons why we are moving in this or that direction. We need to meet other elephants with different inclinations to get a bigger picture and broaden our mind.

    • JH Wyoming says:

      Could it be that fewer people have the time to play guitar and other instruments? That’s just a guess but my wife and I watched ‘The Birds’ last evening, and one woman said, “We have plenty of time out here.”, meaning in Bodega Bay, CA in 1963. It was like that back then too. The cost of living was very low, so people had lots of time to do other things like learn a musical instrument and if you look at how much music was produced in the 50′-70’s it’s a good indicator of the free time people had.

  5. adonis says:

    Posted by Citizens Electoral Council of Australia on Thursday, February 15, 2018

    • Davidin100millionbilliontrillionzillionyears says:

      so is this part of the plan that will unfold on June 1st?

      • adonis says:

        yes it is part of the plan it is now too much of a coincidence that this bill has come in at this time you still have time to stock up on dark chocolate.

        • Davidin100millionbilliontrillionzillionyears says:

          yes!

          I knew it! part of the plan!

          and good idea on the dark chocolate…

          lately, I have not noticed any inflation on the brands that I prefer…

          tomorrow is a holiday here in the USA, so I might just do some bulk shopping.

  6. Pingback: Why the Reindustrialization of SE Wisconsin Will Fail – Concerned Racine County Residents Just Say NO To Foxconn

  7. adonis says:

    looks like the turnbull government is getting us ready for the planned june the1st restructuring of the economy by sneaking in the bail-in bill this is what I think is coming after the next GFC 2 hits world-wide bail-ins will confiscate all our money we will be broke and the banks will have all the money from there the entire world will be on permanent negative interest rates and only digital currency will exist we will all be given a universal basic income and we will be charged interest to keep the money in the bank.Only by going cahless can negative interest rates be brought in and the can kicked down the road once more.

    • Davidin100millionbilliontrillionzillionyears says:

      “… we will all be given a universal basic income…”

      will anyone have to work?

      if so, why would anyone work hard?

      that would be quite the trick…

      we all get UBI, but no one has to work (hard)…

      I’m sure food will remain plentiful [sarc]…

      and all essential services will continue [ditto]…

      so how will UBI be administered?

      • DJ says:

        This is what you don’t understand regarding UBI. In the developed world governments are since a long time responsible for citizens sustainance, might not apply to the US.

        So UBI should just replace unemployment benefit, child benefit, guaranteed pension, sick benefits, and hundreds of other systems.

        It would not be a bigger cost than the current, in fact lower administration. Just pay out to everyone with a tax account and/or social security number.

        The amount will be so low that you will work if you are allowed.

        But …

        Of course this is politically impossible. Most of what politicians do is taking money from one group and giving to another.

        UBI would be admitting full employment is impossible. So why full education? And why immigration, with UBI it would be obvious we just give money for nothing to foreigners.

        So UBI will unfortunately not happen.

    • DJ says:

      Why should the banks confiscate the money? With negative interest isn’t it
      better to have the money at the clients?

      • HideAway says:

        I don’t see any great issue with the bail-in type legislation. In the Cyprus case a few years ago, there was no ‘Bail-in’ legislation, but the government just closed the banks over a weekend, then limited withdrawals after a week or so of no banking.

        In other words governments can do a bail-in anytime they want when the situation gets rough enough. Cyprus was using the Euro as currency (outside control) so the govt had no choice, as they had to repay Euros, not a local currency.

        In the US in the GFC, the Fed Reserve with permission from the Whitehouse, just printed out an extra $700b pretty much overnight.

        In today’s world of huge deficits, lots of money printing etc, it will only be those that don’t control their own currency that will bail-in funds, the rest are likely to just keep the printing presses running.

        • DJ says:

          Adonis is talking about a global bail in at june 1st, not a few banks in a small country being under the water.

          I don’t see the connection between Cyprus and a new planned global monetary system.

          • NikoB says:

            this at least gets the paper work in order before hand rather than afterwards and then trying to negotiate deals. Stock up on assets.

      • adonis says:

        then why have bail-in laws been passed obviously to take all the money when crisis hits that way people will be desperate and open to any thing such as elimination of the vast majority of paper currency imagine an india style declaration on the whole world making all notes above 5 dollars obsolete. Janet Yellen said an interesting comment a while back something to the effect of “We must bring in a command economy’ so I think a digital currency with negative interest rates will cause growth as people would not leave their money in the bank as it will be taxed through negative interest rates money is energy so think of all our money being bailed in as energy that will not be available to you the banks will have full control of the money/energy

        • DJ says:

          Removing physical cash is not the same as confiscating peoples money.

          I don’t believe it is necessary to remove physical cash for negative interest, until deep negative, but that is another matter.

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