Raising Interest Rates Is Like Starting a Fission Chain Reaction

Central bankers seem to think that adjusting interest rates is a nice little tool that they can easily handle. The problem is that higher interest rates affect the economy in many ways simultaneously. The lessons that seem to have been learned from past rate hikes may not be applicable today.

Furthermore, there can be quite a long time lag involved. Thus, by the time a central banker starts seeing an effect, it may be clear that the amount of the interest rate change is far too large.

A recent Zerohedge article seems to suggest that problems can arise with 10-year Treasury interest rates of less than 3%. We may be facing a period of declining acceptable interest rates.

Figure 1. Chart from The Scariest Chart in the Market.

Let’s look at a few of the issues involved:

[1] The standard reason for raising interest rates seems to be concern about inflationary impacts occurring as a result of rising food and energy prices. In practice, the impact of such an interest rate change can be quite severe and quite delayed. 

Figure 2 is an illustration from the Bureau of Labor Statistics website showing one of today’s concerns: rising energy costs. Food prices are not yet rising. Normally, however, if oil prices rise, the cost of producing food will also rise. This happens because modern agricultural methods and transportation to markets both require the use of petroleum products.

Figure 2. Figure created by the US Bureau of Labor Statistics showing percentage change in the Consumer Price Index between January 2017 and January 2018, for selected categories.

In fact, raising short-term interest rates seems to have been associated with trying to bring down rising food and energy costs, as early as the 1970s and early 1980s.

Figure 3. US three-month treasury interest rates. Chart prepared by St. Louis Federal Reserve.

The reason why an increase in short-term interest rates is helpful is because it reliably induces a recession. A person can see the close connection between short-term interest rate increases and recessions (gray bars) in Figure 3. Recessions in turn damp down food and energy prices.

The reason why this damping down effect occurs is because when there is a recession, many people are laid off from work. These people purchase fewer goods and services. With people out of work, “demand” for goods and services falls. (Demand is very closely related to “amount affordable.”) We might think of demand for goods and services as helping to maintain the “production” of new homes, new cars, upscale food products, toys, and even consulting services.

When demand falls, fewer goods of practically every type are made. This indirectly leads to less need for commodities of many types, including oil, natural gas, metals, and food. Commodities have very long production cycles, and only modest storage facilities. When lower demand for a commodity such as oil occurs, prices tend to adjust sharply downward, in order to signal the need for lower production. Figure 4 shows that interest rate spikes corresponded to the 1973-1974 oil price spike, the 1979 oil price spike, the 2004-2008 price run-up, and perhaps to other shorter oil price spikes.

Figure 4. Annual averages of Brent oil prices (in 2016$) and 3-month average interest rates, based on data similar to that shown in Figure 3 from “FRED.”

The annual data in Figure 4 loses the detail of month-to-month variations. Because of this, it makes the impact of the Great Recession look much less severe than it really was. Figure 5, using monthly data for recent periods, shows more clearly the severe fall in oil prices following the run-up in short-term interest rates in the 2004-2007 period.

Figure 5. Three-month US Treasury interest rates and Brent oil prices, both on a monthly average basis. Graph by FRED.

If a person looks at the indirect impacts on the economy as a whole, it becomes clear that the rise in short-term interest rates was one of the proximate causes of the Great Recession of 2008-2009. I talk about this in Oil Supply Limits and the Continuing Financial Crisis. The minutes of the June 2004 Federal Reserve Open Market Committee indicate that the committee decided to start raising interest rates at a rate of 0.25% per quarter for the purpose of stopping the rise in energy and food prices.

The huge financial problems that indirectly resulted did not occur until four years later, in 2008. It is likely that most economists are unaware of the connection between the decision to raise rates back in 2004 and the Great Recession several years later.

[2] Higher energy prices squeeze a person’s “spendable income.” Higher interest rates have the same effect.

Economist James Hamilton showed that ten out of eleven recent recessions were associated with oil price shocks. We would argue that if an economy is subject to higher interest rates in addition to higher oil prices, the economy is doubly likely to go into recession. Figure 6 shows an illustration of the situation.

Figure 6. Image by author showing recessionary impact of rising energy costs and interest costs.

A wage earner’s pay does not normally increase as energy costs rise, or as interest costs rise. Even if energy and interest costs are well buried (in higher food costs, or in the higher cost of goods transported across the country, or in higher student loan payments) the amount of income that a person has available to spend on discretionary goods and services falls if energy and interest costs rise. Having both energy and interest costs take a bigger share of available income at the same time is especially a problem.

[3] Reduced interest rates can be used to conceal the adverse impact of rising energy prices.

This is another version of what we saw in Figure 6. If interest rates can be reduced, they can offset most of the bad impacts of higher energy prices. For example, if oil prices are higher, it helps if auto loans and mortgage loans are lower in cost.

Figure 7. Image by author showing that artificially low interest rates can mostly offset the impact of rising energy costs.

Of course, central bankers don’t necessarily think this through. To what extent is today’s economy really dependent on very low interest rates?

[4] Falling interest rates have an almost magical impact on the economy. Rising interest rates reverse these magical impacts, and replace them with very negative impacts.

We saw in Figure 6 how falling interest rates could more or less conceal a rise in energy prices. The following are a few of the additional magical things that falling interest rates can do:

(a) Falling interest can raise asset prices of many kinds, including homes, stock prices, resale prices of bonds, and the price of land.

(b) Falling interest rates can raise commodity prices, making it possible to extract more fossil fuels and metals. Resources that previously did not look economic to extract, suddenly become economic to extract. This change occurs because with lower interest rates, more people can afford to purchase goods that use oil, such as cars and motorcycles. This tends to raise demand for oil products, and thus prices.

(c) Because higher-priced energy extraction becomes feasible at lower interest rates, more advanced technology, at higher prices, suddenly becomes feasible. Jobs open up in research areas that would not previously have made sense at lower energy prices.

(d) Falling interest rates can make the balance sheets of companies holding stocks and bonds as assets look better, because of their rising prices.

(e) Rising asset prices “feed back” into spendable income. People with homes that have risen in value can refinance, and use the proceeds to fix up their home (add an additional room or an updated kitchen, for example). Individual citizens and companies can sell shares of stock that have risen in value and use those proceeds to augment other income.

If interest rates rise rather than fall, the impacts can be expected to be extremely recessionary. The stock market may crash. Homes are likely to lose value because of a lack of buyers that can afford them. Energy resources that seemed to be available can suddenly seem not to be feasible because of low prices.

[5] The economy was able to reasonably tolerate the run-up in interest rates in the 1950 – 1980 period because the economy was growing very rapidly. 

A person can see the pattern of short-term interest rates in Figure 3, above. Long-term (10-year) interest rates follow a somewhat similar, but smoother, pattern (Figure 8).

Figure 8. Monthly average 10-year Treasury interest rates, through January 2018, in chart by FRED.

World per capita energy consumption was rising very rapidly in the 1950 to 1970 period. Even in the troubled 1970 to 1980 period, per capita energy consumption continued to rise, although not as quickly (Figure 9).

Figure 9. World per capita energy consumption, with 1950-1980 period of rapid growth highlighted. 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.

When world per capita energy consumption is growing this rapidly, jobs tend to be plentiful and wages tend to rise faster than inflation. According to Figure 10, US wages rose more rapidly than inflation in the 1950 to 1970 period, without wage disparity becoming a problem. Even in the 1970 to 1980 period, when high oil prices were a problem, US wages were able to rise quickly enough to keep up with inflation. Rising wage disparity did not become a problem until after 1980.

Figure 10. Chart comparing income gains by the top 10% to income gains by the bottom 90% by economist Emmanuel Saez. Amounts are inflation adjusted. Based on an analysis of IRS data, published in Forbes.

The share of US citizens in the workforce also rose during the period up to 1980, as an increasing percentage of women joined the workforce (Figure 11).

Figure 11. Employment as a percentage of the population, aged 25-54. Chart from FRED, using OECD amounts.

The thing that made the 1950-1970 period unusual was the growing availability of inexpensive fossil fuels. With fossil fuels, it was possible to add expressways where they had never been before. This allowed more interstate trade and improved the productivity of truck drivers. Labor saving devices allowed women to join the workforce. Farming continued to become more productive, with all of its labor saving equipment. Even as energy prices rose in the 1970 to 1980 period, citizens were able to continue to buy energy products because their wages were rising enough to keep up with inflation.

The growth in productivity was so great that wages plus government benefits (as measured by “Disposable Personal Income”) rose almost too fast. This added inflationary pressures to the economy. It is my opinion that these inflationary pressures contributed greatly to the oil price run-up in the 1973-1974 and the 1979-1981 periods.

Figure 12. Three-year average growth in Disposable Personal Income compared to inflation as measured by CPI-Urban. DPI from US Bureau of Economic Analysis; CPI from Bureau of Labor Statistics. Per Capita Disposable Personal Income is calculated by dividing DPI by US population, also from the BEA.

The run-up in oil prices also to some extent reflected a scarcity problem; note the two spikes in CPI-Urban in the 1970s in Figure 12, which are higher than would be expected, if the problem were simply a problem caused by the very high per capita Disposable Personal Income growth.

A major problem of the 1970s was a decline in US crude oil production for the area outside Alaska.

Figure 13. US crude oil production by type, based on EIA data.

This scarcity problem was significantly mitigated by the development of oil fields in Alaska, Mexico, and the North Sea in the next few years.

One of the things that substantially helped fix the oil problems of the 1970s was the fact that the US, as well as other developed countries, was able to make changes that substantially reduced their oil consumption. These changes included:

  • Moving to smaller, more fuel-efficient cars
  • Finding fuel substitutes when oil was being burned to create electricity
  • Changing oil-based home heating to approaches that used other fuels

Figure 14. Oil consumption by part of the world. Data from BP Statistical Report of World Energy 2017.

The combination of these approaches brought supply and demand more into balance. There was a small dip in consumption in the 1973-1975 period, and a larger dip in the 1979 to 1984 period. In comparison, the Great Recession of 2008-2009 hardly made a dent.

An indirect impact of these changes was the fact that the US economy needed to become more integrated into the world market. The US started importing smaller, more fuel-efficient vehicles from Japan, since Japan was already making these cars. Japan started making other kinds of goods as well to sell to the US and other markets. The US and other countries built nuclear electric generation to replace some of the oil-fired electricity generation. These plants were capital intensive and required growing debt.

Especially after 1981, changes started to take place in the US economy, reflecting its changed role in the world. US companies grew in size, as they began to add overseas markets to their local markets. Wage disparity became more of an issue, as high tech operations required more specialized high-wage workers and fewer of those with only a general education. Increased competition for jobs with workers from lower-wage countries also tended to hold down wages of those without advanced training.

[6] The situation is very different now, compared to the 1970s. It is doubtful that today’s economy could tolerate a spike in interest rates.

Today, we are not seeing rapid growth in per capita energy consumption, the way we were in the 1950 to 1980 period (Figure 9). In fact, world per capita energy consumption is almost flat (Figure 15), the way it was during the period of the Great Depression of the 1930s, and the way it was at the time of the collapse of the former Soviet Union in the 1990s (Figure 9).

Figure 15. 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.

There are other similarities to the 1930s period. Short-term interest rates are back to the low level they were in the 1930s (Figure 3). Growth in Disposable Personal Income per capita is persistently low (Figure 12). Wage disparity is at the high level experienced back in the 1930s (Figure 16).

Figure 16. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.

It is probably because of this renewed wage disparity that we are having difficulty with oil gluts. Oil gluts were also experienced in the 1930s. People with inadequate wages cannot afford goods made with oil products. These gluts occur because of affordability problems–inadequate wages for part of the workforce.

Figure 17. US ending stock of crude oil, excluding the strategic petroleum reserve. Figure produced by EIA. Figure by EIA.

Despite the spike in oil prices that central bankers are concerned about, oil prices are currently too low for producers. Oil exporting countries, such as Venezuela, Saudi Arabia, and Nigeria, depend on high oil prices so that they can collect high tax revenue. These countries are especially hurt by today’s low oil prices.

An increase in interest rates could very easily create a recession and drop oil prices even lower than they are today. Of course, that is precisely the intent of the central bankers. Our problem is that the economy cannot operate without energy products, particularly oil. The cost of producing oil is rising because of diminishing returns. It simply is not possible to drop its price as low as oil-importing countries would like it to be.

[7] Economists and central bankers think that they have good models of how the economy operates, but they really do not. 

The economy is a self-organized system that is able to create goods and services using energy products. In fact, it cannot continue its existence, without continued very substantial energy consumption. The economy gradually builds itself up, with new businesses, new consumers, newly invented products, and with transportation and financial systems. I envision the economy as looking something like a child’s toy that is built from many pieces. If one or more pieces are removed, the system could collapse.

Figure 18. Dome constructed using Leonardo Sticks

The economy has been built based on the laws of physics. It requires sufficient energy. It is in many ways like a hurricane that loses power if it is forced to go over land for any distance. A hurricane gets extra strength if it is able to pass over very warm water, which provides the energy it needs. Right now, the world economy is showing signs that it does not have sufficient energy; the standard of living of young people around the world is falling. The return on energy investment is far too low.

While it may be true that the US economy looks like it is at full employment, based on the number of people looking for jobs, the percentage of people aged 25-54 with jobs tells a different story (Figure 11). This percentage has fallen since 2000, at least partly because of globalization.

Unfortunately, the approach that economists are taking to model the economy cannot provide a good representation of how the economy really works. A self-organized system has many feedback loops that are difficult to understand and model. One change leads to other changes that are hard to see in advance. The problem with current models is that they are likely to produce misleading indications.

[8] Conclusion

We have heard the saying, “That which does not kill you makes you stronger.” The theory behind raising interest rates seems to follow a similar line of reasoning. If central bankers can raise interest rates, economies will be stronger.

The catch is that we are too close to the “edge” to be testing an increase in interest rates. Economies, below a certain “stall speed,” cannot repay debt with interest, and cannot hope to provide entrepreneurs with an adequate return on investment. Our low rate of growth is already close to this stall speed.

Given where we are today, it would be quite possible to accidentally “kill” the economy with rising interest rates. This would be especially the case if short-term and longer-term interest rates rise at the same time. A budget with large deficits could cause longer-term interest rates to rise. So could selling large amounts of QE debt.

Also, feedbacks don’t come quickly enough to make necessary course corrections. This makes raising interest rates way too much like playing with physics reactions we don’t fully understand. Interest rate increases (like fission reactions) start chain reactions. In an open environment such as the world economy, we have limited understanding of the outcome of these chain reactions.

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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2,489 Responses to Raising Interest Rates Is Like Starting a Fission Chain Reaction

  1. Pingback: Our Latest Oil Predicament – Enjeux énergies et environnement

  2. Pingback: Our Latest Oil Predicament | Our Finite World

  3. Will US shale give the refining industry indigestion?


  4. Harry Gibbs says:

    “The Federal Reserve is now attempting to increase interest rates and take away that liquidity and asset-price-inflating punchbowl without any major disruptions. The European Central Bank may join in here soon too as all are concerning that this post-financial crisis party may shift into inflation-mode, which no one wants. This too is wholly unprecedented in human history. While the mainstream financial media is all about the Goldilocks outcome, we remain skeptical and wary of highly-leveraged assets or those whose risks are significantly underpriced.”


    • Hard to see how higher interest rates could come out well.

      • Harry Gibbs says:

        Canada and Australia have chickened out of putting up rates and here in the UK it seems we may not see much more tightening, in spite of what the BoE has been saying:

        “Megan Greene, chief economist at Manulife Asset Management, said UK government bond markets had “too much priced in” and warned that economic indicators were beginning to turn away from conditions that supported a higher base interest rate.”


        You wonder what will happen if the £ weakens and inflation worsens, perhaps if our local elections prove disastrous for Theresa May and a Labour government get in and start offering everyone free ice-cream. Surely rates would *have* to go up at some point?

        • I expect that what would make rates go up is too much debt issuance without QE. But governments have now learned the trick. All they have to do is have the central bank buy back the newly issued debt.

          Something causes the system to crash, though. Perhaps this will have to do with cross border debt that cannot be paid, or to failing derivatives as currencies become unstable.

  5. Fast Eddy says:


    What we’re talking about here is the armature of our culture and economy that people hang their lives on. And that armature is crumbling. There are fewer things that people can hang a life on in a meaningful way, or a way that even ensures that they can have a little bit of security looking into even a short-term future.

    For example, I had a day yesterday that felt like national Murphy’s Law Day. I got a screw in a tire. The screw was in a place where, under New York State law, they’re not allowed to fix the tire if the screw is near the outside of tread. So I had to buy a brand-new tire. And then I was going to take the trash to the dump in my old pickup truck, which I keep around for that purpose. But the battery was dead. So I had to go down to the auto parts store and buy a new battery, and bring it home and put it in.

    Now, I’m among the lucky people in this land who can actually buy a new tire and buy a car battery. But probably some enormous percentage of the population, like 78% or 84% — I’m not quite sure what it is — they don’t have enough money to buy a new car battery if their car dies on some god forsaken freeway shoulder 38 miles from home. Imagine how crazy-making that is. I can easily, because I was a truly starving bohemia until well into my 40s, struggling just to pay the light bill while writing book after book. So I know what it’s like to live day after day in that kind of financial anxiety.

    I imagine that the financial anxiety out there right now is just so extreme that there’s a whole mass of people who are being pushed to the limits of their sanity.

    Hence http://thehill.com/homenews/state-watch/377414-new-data-shows-opioid-crisis-is-just-getting-worse

    • A few years back, both of my sons took temporary jobs having to do with the installation and testing voting machines for the State of Georgia. (That was an eye-opener.) The people who were hired were either looking for summer jobs (my sons’ situation) or were down on their luck, but had at least some programming/computer knowledge, and were looking for another temporary job to tide them over until they could look for another more permanent jobs in the computer field.

      Anyhow, one of the workers was about 55 years old. He developed a tooth abscess. He had a terrible time trying to find a dentist who would help him, if he didn’t have money to pay. My sons had not considered that this could be a problem for those living paycheck to paycheck, without credit cards to fall back on in emergencies.

  6. Baby Doomer says:

    Russian military says it has conducted a successful test of nuclear-capable hypersonic missile


  7. Daniel says:

    I read these comments always trying to glean some new insight or information but then I kick myself for wasting time of reading them! Fast Eddy and a few others do the talking for everyone! Gail’s writing and papers are so insightful and well thought of that it is a shame to have the “noise” of others on here babble like someone in complete shock and fear…. Yes fast eddy we can tell you are trying to work some things out…but please unless you have some intelligent thing to say can you refrain from your endless diatribe and let others comment on here?

  8. Baby Doomer says:

    David Stockman says the market is “whistling past the graveyard” and there’s no way out


    • Davidin100millionbilliontrillionzillionyears says:

      ” “We’re heading into a massive monetary fiscal collision that will cause a yield shock that will turn the market upside down,” he added.
      He’s referring to the after-effects of quantitative easing. The Federal Reserve is in the beginning stages of unwinding a $14 trillion financial crisis-era trade.”

      the Fed will never unwind their QE…

      they will never advance beyond those “beginning stages”…

      unless they have some financial magic trick?

      no, the Fed will not harm the economy by unwinding…

      if anything, they will go back to QE next year…

      as others have said… they ain’t stu pid.

      • djerek says:

        More accurately, they may be stu pid, but they aren’t quite THAT stu pid.

      • Volvo740 says:

        Yeah, seriously just because they say it… the only game in town is to continue to extent credit at 0%. The best situation is to have everybody think you’re not printing only to be printing.

    • JH Wyoming says:

      “They passed this ridiculous tax cut that no one can really afford. I think the die is cast. We are drifting to – if you don’t want to call it an ‘iceberg’ – call it a ‘debtberg.’ That’s what we have in front of us,” Stockman said.

      Hard over to port!

      • Fast Eddy says:

        Stockman is clueless.

        • Fast Eddy says:

          Alternatively.. and more likely …. his purpose is to deflect people from the reasons why the CBs are implementing seemingly insane policies…

          He rallies the troops and leads the cry ‘what the f789 are you guys doing!!!!’

          And the donkeys hand on his every word about how these clowns at the CBs are destroying the world…

          And NEVER… I repeat NEVER … will he ever suggest that the CBs have no choice… they are doing what needs to be done to delay our extinction ….

          That is not his job – he is just another part of the team … with Elon .. and Leo .. and Al… and Krugman… and Yergin … and the many others who are tasked with creating a matrix that keeps the sheeple calm… and hopeful…..

      • Economies collapse when they aren’t able to collect enough taxes. It looks like the US economy is headed this way, and probably quite a few others.

  9. Davidin100millionbilliontrillionzillionyears says:

    this gem from today’s blog post by JHK at kunstler.com:

    “I call the future a World Made By Hand because it is going to be entirely unlike the sci-fi robotic fantasy that currently preoccupies the thought-leaders in this culture. A lot of what will be required in this time-to-come will be physical labor and small-scale skilled work in traditional crafts. There never were that many job openings for astronauts, not even in the 1960s, but in the decades ahead there will be none — notwithstanding Elon Musk’s wish to colonize Mars.”

    lots of physical labor?

    no colony on Mars?

    what ever happened to Progress?

    • Volvo740 says:

      Fake news!

      • Fast Eddy says:

        More fake news …eh


        That’s the thing about weather… and kkkkklimate… they are ALWAYS changing… always have been.

        F789ing MORE ons

        • Fast Eddy says:

          And btw — the people we bought the house from were explaining about the Rayburn heating system…. and they said:

          We had a really cold winter last year — unlike any in recent memory — 3 weeks with night temperatures of – 10….

          And I said — I am ripping that f789ing Rayburn out… Al and Leo told me next winter there will be no snow .. due to kkk kkkking….

          They looked at me as if I was r e ta rded

          • doomphd says:

            you were kidding, of course. best to keep the Rayburn, FE.

          • Curt Kurschus says:

            If Global Warming is not happening, then we will need to rethink our understanding of the way the universe works. Global Warming is the logical outcome of numerous factors, as well as the logical explanation for many observations that have been made over the years.

            We know, on the basis of evidence from experiments carried out long ago, that carbon dioxide and some other gases trap heat. We know, on the basis of satellite observations in recent decades, that there is an energy imbalance in the Earth system, with more heat coming in than going out. We know that sea levels have been rising. We know that fish have been migrating from warmer seas to cooler seas. We know that every time anything or anybody does anything at all, energy is transformed from one form to another with a portion of the original energy being transformed into chaotic waste heat. We know that this heat moves from the system of greater heat density to the adjacent system of lesser heat density until both systems are in a state of energy density equilibrium.

            We know that a warmer atmosphere has a greater capacity for holding water vapour. We know that even that greater capacity is finite and that eventually the point is reached where a particular volume of air cannot hold any more water and what is there must precipitate. We know that as air rises it cools, the water vapour condenses and precipitates out. Whether the precipitation is in the form of rain, snow, hail, or sleet is dependent on a number of factors, one of which is temperature. We know that there has been a measurable increase in precipitation in its various forms over the last thirty years, as well as an increase in evaporation, in line with what we would expect in a global warming world.

            We know that changes have been observed in the world’s ocean currents. Also changes in the northern hemisphere jet stream, and that these are as would be expected in a warming world. With the important observation that everything seems to be happening more rapidly than some past models had predicted would be the case by this time.

            There remain many unknowns and uncertainties. It would be very rare for there to be no unknowns or uncertainties, nothing left to learn, in the world of Science. However, there is enough evidence to say that Global Warming is real, it is happening, and it is yet another issue that makes it clear that the world as we know it is coming to an end.

            The danger, however, is that people will fail to look at the complete picture or be sufficiently aware of all that is happening. By focusing so intently upon the burning of fossil fuels as the cause of Global Warming, people are being lulled into feelings of hope and optimism regarding so-called “renewable energy” options and electric vehicles. As we all know here, neither of these has any chance of solving our problems. In addition to that, however, they further contribute both to Global Warming and the various resource issues that we have.

            • I am not sure anyone is saying that climate change is not happening. A finite system keeps changing, and this is what is happening here on earth.

              The issue is instead all of the nonsense that is being promulgated, saying that we can move away from fossil fuels, and that renewables will save us. If people would talk about climate change in different terms (such as how we can adapt to it, how we can encourage smaller families and lower meat intake, or why we should expect habitable land to be smaller in the future).

          • hey—i used to work for rayburn—

            i live within sight of the factory, don’t be putting the lads out of work

        • name says:

          Record low temperatures i Europe? LOL. Record low in Poland was -40C back in 1940. This year, the lowest was -26C. Record low, hahha!
          Worldwide, 2017 was the warmest on record without El Nino.

  10. Baby Doomer says:

    Inside doomsday bunker complex the size of a city that could save 10,000 people


  11. Baby Doomer says:

    “I hesitate to say this, but, Antifa is winning.” -Richard Spencer

  12. Third World person says:

    here is most stupid comment i have see on internet

    Since the entire population of Earth could fit easily into an area smaller than Texas we have a long way to go

  13. Yoshua says:

    World War III

    Nations who’s military forces are engaged in war within or outside of their borders.

    Saudi Arabia

    The war has already started. Next someone big collapses and in the end we go nuclear.

    • Greg Machala says:

      I see a lot of current and former oil exporters on that list. Many with oil as their primary export income.

      • Davidin100millionbilliontrillionzillionyears says:

        and what about a country like Mexico?

        with their drug cartels, it’s almost like they are in a state of civil war…

        and their FF production is plunging…

        let’s repeat…

        this will not end well.

    • Third World person says:

      you did not add Niger

    • Davidin100millionbilliontrillionzillionyears says:

      “The war has already started. Next someone big collapses and in the end we go nuclear.”

      WW3 and/or nuclear war are not inevitable…

      the decimation of all countries, due to the nearly total depletion of FF in the coming decades, is absolutely certain…

      I’m not sure which one is worse…


  14. Kurt says:

    Finally, my flying car has arrived. Now, if I could just have a personal robot, my life would be complete.


  15. Third World person says:

    here some more example of stupid humans on this planet

    now i think were our past ancestors had better intelligence than us

  16. Third World person says:

    here is the Tracker for how many Tesla model 3 are getting made every week

    anybody remember mars man say that he gonna produce 5000 cars every week in this year

  17. Harry Gibbs says:

    “In November, the Saudi government locked up hundreds of influential businessmen — many of them members of the royal family — in the Riyadh Ritz-Carlton in what it called an anti-corruption campaign.

    “Most have since been released but they are hardly free. Instead, this large sector of Saudi Arabia’s movers and shakers are living in fear and uncertainty.

    “During months of captivity, many were subject to coercion and physical abuse, witnesses said. In the early days of the crackdown, at least 17 detainees were hospitalized for physical abuse and one later died in custody with a neck that appeared twisted, a badly swollen body and other signs of abuse, according to a person who saw the body.

    “To leave the Ritz, many of the detainees not only surrendered huge sums of money, but also signed over to the government control of precious real estate and shares of their companies — all outside any clear legal process.

    “The government has yet to actually seize many of the assets, leaving the former detainees and their families in limbo.

    “One former detainee, forced to wear a tracking device, has sunk into depression as his business collapses. “We signed away everything,” a relative of his said. “Even the house I am in, I am not sure if it is still mine.””


    • Greg Machala says:

      I wouldn’t want to be visibly rich (or a politician representing the rich) in the times that lie ahead. Folks like Soros, Bezos, Oprah, Blankfein, Clintons, Pelosi, Zuckerberg and such should take a lesson from what happened to Martin Shkreli. I think the folks that are visibly rich in the US would do well to sink out of the spotlight.

    • xabier says:

      Despotic government, seizing assets at will and torturing, is the oldest established pattern in much of the world – it was always dangerous to become rich as the ruler’s greedy eye would fall on you.

      It was only in states which allowed the wealthy to enjoy some degree of security, not just from the poor but also rulers, that they were enabled to think in the longer term and invest.

      The delicious irony is that all of this is meant to be part of the ‘modernisation’ and ‘opening’ of Saudi.

      • yup

        henry 8th in uk did much the same thing

        nothing changes

      • Harry Gibbs says:

        Right, Xabier – and Saudi is hoping to ramp up its tourist industry as part of its diversification drive! I can’t imagine that stories like this will help entice sight-seers to visit.

        • public executions always were a spectator sport

          so where’s the problem

          • Harry Gibbs says:

            A friend of mine at school was the son of a diplomat and so lived for a while in Jeddah. He saw a public beheading there. Didn’t seem to do him any harm, I must say.

  18. Harry Gibbs says:

    “The [sovereign] fund itself warned last week that a crash could wipe away more than 40 per cent of its value, particularly if the Norwegian krone became a safe haven currency and strengthened. That has many experts worried that one of the few sovereign wealth funds located in a democracy could be drained rapidly in a real market crisis.”


    • These folks believed that paper assets have permanent value??? Perhaps they should read OFW.

      • Greg Machala says:

        I suppose folks with money could exchange the money and feel rich and powerful. Hmmm, kinda seems like what is going on right now.

  19. Harry Gibbs says:

    “Another risk is an Italian fiscal overshoot. This is a very probable scenario… The fiscal overshoot could fuel debate about a parallel currency as a soft alternative to a euro exit. There is a lot of excitement among some Italian economists about “fiscal money”, as it is also known. The idea is to use the tricks of modern finance to create something that performs functions resembling those of money, but that remains outside the control of the central bank.”


    • DJ says:

      Figueres is imagining shrinking populations through ”female empowerment” and education.

      • DJ says:

        The poorest 2/3 doesn’t consume much, so even if they could lower fertility rate from 4-5-whatever to below 2.5 for these countries, it wouldn’t make much difference on resource use, especially not energy products.

        • Actually, quite a bit of energy use is for basic infrastructure–things like roads, schools, pipelines, electricity transmission lines. These are needed, whether these people are poor or not.

          Resource usage slows because governments are too poor to provide basic services.

          • You are right though. People in poor countries don’t use much resources. They tend to be warm countries, so they don’t heat or cool their homes. They don’t drive cars. When they come to rich countries, the countries want to provide basic services for them, just as the countries do for everyone else. This is when resource use soars.

          • this is what the renewable energisers dont understand

          • Artleads says:

            In the Tropics, you could keep school under a tree. Much of what they build schools to do now are not things which need doing. Dirt roads are more picturesque than paved roads, and that doesn’t hinder tourism. Since governments have no idea what they are doing, and since the public are paralyzed, societies are a mess, turning out a large underground economy where people don’t pay taxes. There is also smuggling and slavery, drug wars, etc., all on account of governments not knowing what they’re doing and the people being paralyzed (and mystified). So we can only expect the results we have.

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