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.
Up to 200,000 more high street store jobs tipped to be axed by 2020 in retailing APOCALYPSE
https://www.mirror.co.uk/news/uk-news/up-200000-more-high-street-12105936
Bill Gates says it’s ‘a certainty’ that we will have another financial crisis like in 2008
https://amp.businessinsider.com/bill-gates-says-another-financial-crisis-is-coming-2018-2
Iran Bans Use Of US Dollars In Trade
3-01-2018
In what may be a preemptive move against further US sanctions, Tehran announced that going forward, merchant purchase orders that are denominated in US Dollars would no longer be allowed to go through import procedures.
“Considering that the use of the dollar is banned for Iran and traders are literally using alternative currencies in their transactions, there is no longer any reason to proceed with invoices that use the dollar as the base rate,” Kasraeipour added.
As Federico Pieraccini previously noted, until a few decades ago, any idea of straying away from the petrodollar was seen as a direct threat to American global hegemony, requiring of a military response. However, in recent years, it has become clear to many nations opposing Washington that the only way to adequately contain the fallout from US retaliation was to progressively abandon the dollar. This serves to limit Washington’s capacity for military spending by creating the necessary alternative tools in the financial and economic realms that will eliminate Washington’s dominance. This is an essential component in the Russo-Sino-Iranian strategy to unite Eurasia and thereby render the US irrelevant.
De-dollarization for Beijing, Moscow and Tehran has become a strategic priority. Eliminating the unlimited spending capacity of the Fed and the American economy means limiting US imperialist expansion and diminishing global destabilization. Without the usual US military power to strengthen and impose the use of US dollars, China, Russia and Iran have paved the way for important shifts in the global order.
https://www.zerohedge.com/news/2018-03-01/iran-bans-use-us-dollars-trade
De-dollarization is a big deal and will affect the West’s access to the remaining mature oil fields in Eurasia.
If we start adding tariffs and isolating countries that are not doing what we would like, we should not be surprised if they retaliate. The whole situation has a potential to spiral downhill quite quickly.
https://imgur.com/a/4xf94
Every major stock market decline and every recession in the last 100 years was preceded by the Federal Reserve raising short-term interest rates by enough to provide the pin to prick the balloon.
The figure is pretty much Figure 3 of my post. Of course, not everyone made the connection with the interest rate rises. In several (most) of the cases, oil prices rose as well. The reason for raising prices was to get the oil price down. Higher oil prices, by themselves, would have by themselves caused recessions.
How does a higher interest rate lower the price of oil?
A higher interest rate causes recession. People are laid off from work. They buy less goods and services. The lower amount of goods and services they buy reduces “demand” for all energy products, simultaneously, because goods and services are made with energy products, and it is not possible to store up very much, without producing a glut. Prices drop to signal, “Produce less energy products.”
One way of describing the problems that higher interest rates cause lead to less affordability of debt. People cannot afford new cars, because the interest rate is too high. Commercial mortgage holders, and homeowners with adjustable rate mortgages find that their monthly payments quickly move higher. Homeowner need to cut back on other expenses; businesses can afford to hire fewer people. High risk buyers typically get hit by outsized increases in interest rates. It is they buyers especially who cut back.
When I looked at the situation in 2008, I found that the credit problems affected all energy sectors simultaneously. Prices of all energy commodities fell, even uranium. http://www.theoildrum.com/node/4805
Thank you Gail for explaining that. 🙂
Russia’s Lavrov says the US is training Europe to use nuclear weapons against it
https://www.cnbc.com/2018/02/28/russias-lavrov-says-us-breaching-nuclear-arms-agreement-ifax.html
Does anyone really believe we can put the (nuclear) genie back in the bottle?
“think for some time, send into retirement the people stuck in the past and incapable of looking into the future, [and] stop rocking the boat that we all ride in and which is called planet Earth” – Vladimir Putin speaking today on Russia’s defense capabilities. Sounds like he has been reading OFW.
http://www.bbc.com/news/world-us-canada-43249614
25% tariff on imported steel & 10% on aluminum. Hopefully this action will help US steel & aluminum manufacturers but could cost the end consumer more.
Globalization is coming apart. We are seeing a return to isolationism.
https://gailtheactuary.files.wordpress.com/2018/01/total-energy-and-oil-consumption-per-capita-with-notes.png
I’ve been trying to keep connected on Facebook (FB) with three jurisdictions internationally. The technology creates a standard way to communicate, and so it becomes a sort of global connector. That’s one way to look at globalism. Furthermore, all societies have a common way to plan. They all have some version of a General Plan. The fact that they only give lip service to planning is partly due to the lack of public pressure. This is a universal trend that could be corrected. And comprehensive planning across countries would facilitate another version of globalism. You would see better what trade and other exchange arrangements are mutually beneficial. You could protect resources that support tourism (which is itself a global connector).
FB is instead used for nonsense. Members won’t take practical steps to row the boat. But since the technology and institutions’ web presence are so available, you could do a lot of planning internationally. You could promote businesses everywhere by simply looking on a Google map for them and listing them in a directory…anywhere in the wired world. (That in itself wouldn’t be enough, but would be a start.) Millions of people can pitch in and help wherever they are. Yet, what you actually see is apathy and a lack of agency that is shocking. Not pushing for planning on the part of any individual or agency doesn’t help the situation.
I tried FB once…
I posted the most inane things on there… I posed next to my Honda Fit… I talked endlessly about what I did each day …. I mentioned my luncheon with the PM … took photos of food… I video’d my feces going down the toilet bowl to show them what happens when in the southern hemisphere…. basically took the complete pi ss out of the stupid thing…
It did not go over well with my ‘friends’ — they felt I was making a mockery of things (and them) … which I of course was…
Soon after I shut it all down
This is the most important graph to watch. Global energy consumption per capita is the greatest indicator of the direction of civilization. Increased complexity requires increased in energy consumption. Civilization is an expression of complexity. When energy consumption goes down our civilization must simplify. Less organization, fewer institutions, less global cooperation.
Economic growth is history.
2018 the year the rules of our economy will be rewritten. Paper currencies will fail. There is not enough cheap energy to fulfill the promise of future resources. All those trillions of pieces of paper cannot be redeemed for real resources. When will the masses realize they have been lied to? When will people demand real value for their labor? The Fed’s economic Ponzi scheme is coming to an end.
My understanding is the goal is to reduce defense vulnerabilities by shortening or bringing home most of the US military industry & supply lines. So some of these moves are not related to the domestic economy.
I would say “only indirectly related to” rather than “not related to” the domestic economy. Clearly, someone has to look at both implications, before making a decision. In some sense, there is more supply than we need, at this point. Canada would be a preferred supplier over China, but that may not be easy to arrange with tariffs.
I can’t find a link but on TV news tonight there was rumor that Trump changed his mind about the steel & aluminum tariffs. Not too surprising if true. He often tosses stuff up to see what kind of response there is and if it hits enough snags (and the stock market definitely tanked on that news), he chooses not to. So we’ll see.
Tony Blair’s government did that in the UK.
The other thing they did was announcing a ‘policy success’ before anything had even happened: they explained this as being due ‘to sheer excitement at what they knew was going to happen.’!!
Things can only get better, was the giddy mantra when he swept to power in 1997, just as UK oil production was about to reach its peak…
Putin is escalating warnings….
Putin: If Attacked, Russia Will Respond With New “Unstoppable” Nukes
3-1-2018
Putin speaks…………….
“Nobody listened to us. Listen now”.
” Our nuclear doctrine says Russia reserves the right to use nuclear weapons only in response to a nuclear attack or an attack with other weapons of mass destruction against her or her allies, or a conventional attack against us that threatens the very existence of the state.”
“It is my duty to state this: Any use of nuclear weapons against Russia or its allies, be it small-scale, medium-scale or any other scale, will be treated as a nuclear attack on our country. The response will be instant and with all the relevant consequences,” Putin warned.
“Efforts to contain Russia have failed, face it,” Putin said in a nearly two-hour address he illustrated with video clips of the new arms, which included underwater drones, intercontinental missiles and a hypersonic system he said “heads for its target like a meteorite.”
He added that Russia needs to expand “freedom in all spheres” while also establishing a breakthrough in standards of living.
https://www.zerohedge.com/news/2018-03-01/putin-if-attacked-russia-will-respond-new-unstoppable-nukes
I suppose we shouldn’t be surprised. When there isn’t enough to go around, wars are much more likely. Russia still excels in the weapons area. I would worry a lot more about Russia than North Korea.
I am starting to view this Eurasian Union situation as the coming mother of all resource wars. The WW2 german attack with 2.5 million troops was basically a resource war- oil, wheat, metals, industrial plants in Ukraine area, etc.
Hitler intentionally diverted armies to capture the oil fields in southern Russia, thus insuring his ultimate failure to capture Moscow, thus insuring his ultimate defeat. Energy, or the lack of it, will drive ALL strategic decisions from here on out.
I would consider North Korea a proxy between the US and Russia. So, if we attack North Korea with nukes (because NK borders Russia) Russia would attack the US with nukes. How would the US respond if Russia attacked Mexico with nukes? Things are rapidly destabilizing.
Mexico is not threatening to launch nukes at its enemies.
CNN and the rest of the MSM tells us over and over again that NK is planning to launch nukes any day now… not today though… I guess tomorrow…
I have also heard that NK has nukes that can ‘reach Washington’
https://nataliaantonova.files.wordpress.com/2013/12/cannot-handle-the-hysterical-laughter.gif
The MSM would not lie to us would they?
WMD was a one off right… they have learned a lesson from that … right?
The MSM creates the reality … for most people…. they could easily convince you that Mexico was planning to launch nukes at America…
War is Peace
Cold is Hot
1+1=3
Seems like a pretty rational response to the insanity traveling around the American and Western European media and political spheres painting Russia as the big baddie causing everything from election results they don’t like to someone stealing candy from a baby.
It is an extremely sane response to missile systems being placed on their borders in eastern Europe by the US. Plus the threatening wars of chaos in Ukraine and Syria fomented by the same. The doctrine of chaos, destabilizing countries is meant to approach the borders of Russia. They are not dumb. They will respond.
Good point, this too. The current insanity was hardly the start of this thing.
The Russia State originated in the Ukraine when Moscow was only a hunting camp:
(Novgorod around the year AD 862)
https://en.wikipedia.org/wiki/Rurik_dynasty
I’ve just finished a chapter on the development of the Russian state stretching back many hundreds of years….
It mentions that the main city of Russia, Kiev, was overrun and occupied by Mongol hordes for 250 years….
Go figure!
Kiev was actually the second state—
But they were overrun.
they invaded for the chicken?
Putin should fire off a tactical strike on some shithole… Buffalo NY perhaps? — to show that he is serious
Exactly. I’m astonished that anyone swallows the puerile anti-Russia propaganda for one moment, but millions seem to disagree……
We are a net importer of oil and energy products from Russia, something like 375,000 barrels per day. It seems like we should be a little nicer to those whom we depend on for energy supplies.
Or we could wipe out the leaders — install a puppet regime — and basically take their energy….
The US has been trying to do this for the last decade. It is not going well.
People think… whatever the MSM tells them to think…
This must indicate that Moscow suspects that a first-strike or limited tactical use of nuclear weapons doctrine is gaining ground among the nutters at the Pentagon, (the great destabiliser) weakening the certainty of assured mutual destruction.
Most preoccupying if this is truly the case. One certainly sees little rationality in the US, EU and UK these days in respect of geostrategic affairs and Russia…….. .
According to Russia’s General Staff deputy head of operations Gen. Viktor Poznikhir,
“(t)he presence of American ABM sites in Europe and ABM-capable ships in the seas and oceans close to Russia’s territory creates a powerful clandestine potential for delivering a surprise nuclear missile strike against Russia.”
“The presence of the global ABM system lowers the threshold for the use of nuclear weapons, because it gives the US the illusion of impunity for using strategic offensive weapons from under the protection of the ABM ‘umbrella.’”
“The ABM shield is a symbol of the build-up of rocket forces in the world and a trigger for a new arms race.”
https://www.globalresearch.ca/dangerous-crossroads-russia-fears-a-us-preemptive-nuclear-attack/5582309
Russia is probably getting concerned now they have decided to interfere with our elections and hack other countries like Germany.
https://abcnews.go.com/Technology/wireStory/report-russian-group-hacked-german-government-network-53415065
“Dpa cited unidentified security sources saying the group APT28 hacked into Germany’s foreign and defense ministries and managed to steal data.”
This is the face of modern warfare; cyber attacks. The West should do some of their own hacking into Russia. Let’s find out how they like it.
Russia spends a few hundred thousands on social media…if you choose to believe the desperate lies you swallow whole…and Soro’ s spends 25 million. What, are you cra..zee.
Which is the tail wagging you sorry believers?
Not cra zzeee… just f789ing stoooopid and delusional… JH wakes up and sings the anthem…
” Moscow suspects that a first-strike or limited tactical use of nuclear weapons doctrine is gaining ground among the nutters at the Pentagon,”
US society is getting crazy on every level- including aggressive driving on our roads.
“He added that Russia needs to expand “freedom in all spheres” while also establishing a breakthrough in standards of living.”
Freedom?! Is that what they call killing leaders of opposition parties?
Breakthrough in standards of livings is the ability for Russian citizens to be able to better afford goods made with energy products.
I am afraid I am not into politics.
Yea, Russia has a AG sector that is up 600% (and is exporting)–
Second to Oil——-
I presume AG is agriculture. Russia certainly has a lot of land.
Politics is for those who are feeble of mind
Those who consider themselves above politics find themselves ruled by their inferiors.
Plato
Political advice from the first architect of a totalitarian state. Top notch.
I am ruled by the El ders. As are the politicians.
I don’t mind though…. they share the wealth
No comparison to meddling in other countries via drone ass.assin.ation, invasion and war crime level activity methinks. You provide a real insight into the madness of our hege.mon huh.
If I was Putin I would have my finger on the Nuclear button….No bluffs…He knows the world is coming to an end soon….Live free or die!
I am afraid, that when world economy collapses, there will be a nuclear war.
I am afraid that when the world collapses that we are not going to be put out of our misery by a nuclear war
++++++++ 🙂
And ditto:
“Politics is for those who are feeble of mind”
Although i wouldn’t tell this to politicians.
People can ignore politics all they want, but that’s where the big decisions are made. When and where to go to war, how much to tax, questions regarding social security and other entitlements, immigration and so on. It’s a fascinating subject that ebbs and flows daily. It’s one of the more fascinating subjects because it never remains static. There are always surprises around the corner, like electing a carnival barker as president.
Clearly politics is not irrelevant but it is for the most part a secondary driver for change, which tends to be reactive to underlying economic realities. If people feel that their economic prospects are constrained or threatened they will vote accordingly, as we have been seeing.
What is tiresome is when individuals rigidly argue for a fixed point on the political spectrum and delude themselves that they hold the moral high ground for doing so. Unfortunately we will see more of this sort of zealotry and polarised thinking moving forwards, precisely because of the issues Gail writes about, so I am grateful for a largely apolitical comments-section.
https://en.wikipedia.org/wiki/The_State_(2017_TV_series)
Let the games begin!
Can we wait until late September though… I’d like to get a full season in on the slopes… I am after all buying a season pass… and I want to get my money’s worth
One thing I noticed in the WSJ today is an article claiming that Russia tried to encourage protests against pipeline construction in the US. I can’t find the article now; I wonder if they took it down, figuring it was false information. This is another article from the “Daily Signal.”
http://dailysignal.com/2018/03/01/russia-uses-facebook-to-undermine-dakota-access-pipeline-other-us-energy-projects/
Russia Uses Facebook to Undermine Dakota Access Pipeline, Other US Energy Projects
The article links to this report. https://science.house.gov/sites/republicans.science.house.gov/files/documents/SST%20Staff%20Report%20-%20Russian%20Attempts%20to%20Influence%20U.S.%20Domestic%20Energy%20Markets%20by%20Exploiting%20Social%20Media%2003.01.18.pdf
I can understand why Russia would want to keep Canadian imports out of the US. That would help to keep the price of oil higher, because it is more difficult to ship it overseas. They do not have a good facilities set up for handling it, and shipping costs would be higher.
The National Bank of Slovakia, based on the steeply rising debts of the Slovak households, considers introducing the debt ceiling for private persons, as regards how much the can borrow from the bank.
https://ekonomika.sme.sk/c/20770695/ziskat-uver-moze-byt-este-tazsie-narodna-banka-zvazuje-strop-na-dlhy.html
Apparently, the bank is concerned about people becoming overextended if interest rates should rise. Sounds like a reasonable worry.
I was about to call it a night … but then I saw this
Big Freeze Stretches U.K. Gas Supplies as More Snow Forecast
The freezing weather entrenched across northern Europe will stretch Britain’s supply of natural gas on Thursday as fresh snowfall was forecast for much of the country.
https://www.bloomberg.com/news/articles/2018-03-01/big-freeze-stretches-u-k-gas-supplies-as-more-snow-forecast
Arctic freeze: Britain set for blizzards and travel disruption
https://www.theguardian.com/uk-news/2018/feb/25/prepare-for-seriously-cold-weather-this-week-britons-told-uk-snow
I just thought I would post these articles… to bring comfort to the YYY YYYers who were worrying that the oceans were about to boil….
That would be comforting, FE, if this weren’t Siberian air displaced by fractured jet streams, the corollary of which has been temperatures above freezing at the North Pole in February.
Enough reality for this blog—-
Physical realities are not welcome.
We know the climate is changing. Move your discussion of this issue elsewhere.
I suggest deleting such posts immediately, Gail. It’s mostly FE that posts his opinions on the subject which causes others, including myself to respond because we don’t want it sit there without a counter argument.
Cognitive Dissonance has kicked in …. did someone say something? It’s as if it never happened.
The only issue I see in this post that is worth discussing is the gas issue.
https://www.bloomberg.com/news/articles/2018-03-01/big-freeze-stretches-u-k-gas-supplies-as-more-snow-forecast
The title on the article is actually,
Big Freeze Stretches UK Gas Supplies as Prices Skyrocket
I thought when I saw this first that there was a link to this article. I had read it earlier. It says,
Italian election this weekend:
“…the Eurozone is threatened. [It] would likely not be able to weather a full-blown Italian economic and fiscal crisis that forced it to default on its public debt mountain. Italy currently has the world’s third-largest sovereign bond market with public debt worth $2.2trn, behind only the UK ($2.6tn) and the US ($9.5tn). Much of this debt is held by European banks, which amplifies the risk that an Italian sovereign debt default could shake the global financial system to its core.”
https://themarketmogul.com/italy-economic-recovery/
Thanks! I agree that Italy is a problem area that we all should be more aware of. I had not noticed that there was an election this week-end.
One thing I noticed in the article is
A major way that collapse occurs is when taxes fall too low to fund needed programs. It seems to me that cutting taxes is a good way to get into that predicament. The US just cut tax rates. I expect that the UK will be pressured to cut tax rates too, with all of its problems.
The underlying issue is not enough cheap energy per capita. Productivity tends not to grow, without the addition of energy-powered tools. Wage disparity tends to grow, and high unemployment rates remain a problem. No political party can manufacture cheap energy.
It is my understanding that the majority of medical costs are incurred in the last years of life, Medicare is under water; a simple review of a number of medical procedures with a sufficiently lengthily review process would lead lead to fewer end of life procedures which would lead to less SS benefits which leads to less borrowing by the Federal government as both entitlements are now cash flow negative which leads to a decrease in captia which leads to increases in per captia. Not pleasant thoughts for us old farts. Those under 62 are sources of tax income, those of us older are costs. Costs tend to be cut in tight times, we produce nothing to speak of, millennials are in the ascendancy; maybe all will be well depending on where one is on the age scale.
. It is not an issue unique to the US and someone somewhere is looking at solutions. To me these are not opinions, they are scenarios.
Quite a lot of those very expensive ‘end of life’ medical treatments are really just a form of protracted torture (I remember my lovely great-aunt begging to be killed and not treated!) and not a real blessing.
In many ways, they wouldn’t be missed if withdrawn universally, and we could just square up to living until 60-70.
This is a US issue. I thought we were talking about Italy in this thread.
I agree that costs in the last year of life tend to be ridiculous. Without government taking a strong hand, I don’t see that that is easy to fix.
Let me give you an example. My son has an elderly cat. We have been going though this issue with the cat. How much should a person spend on taking care of an elderly cat–one that is pretty clearly in the last year of its life? Veterinarians have treatments for cats who won’t eat near the end of their lives. In fact, there are veterinarians who will operate on cats, to correct problems. I am sure the same thing is true for dogs.
As long as people are attached to other people (or even would like to stick around themselves) and someone else is offering to pay the costs, they will have no end of treatment. As long as physicians and hospitals can make money from giving this treatment, they will continue to recommend it. In fact, they may make relatives feel like they are not doing their duty, if these relatives do not “take advantage” of available treatments. When my husband’s parents were in an Assisted Living center, we would get calls telling us that we needed to take them to a hospital emergency room, even though they were clearly not going to live very long under any circumstance.
Problem is perhaps that once people are indebted to a certain degree, any tax cuts will largely go into paying down all that dangerous debt, (if people are acting rationally) and so not get fed into more consumption.
Hong Kong has cut the corporate tax rate in half for the first USD300k in profits… targeting SMEs as this is irrelevant to major companies….
“I expect that the UK will be pressured to cut tax rates too, with all of its problems.”
Gail, you are prescient here:
“Britain has finally swung back into the black on day-to-day spending thanks to a jump in the tax take and years of austerity.
“The current budget – which includes expenditure such as running hospitals, but not one-off capital costs such as major building projects – ended last year with a £3.8billion surplus, its first since 2001.
“It is a major milestone on the road to rebalancing the nation’s books after costs surged and receipts dwindled in the Great Recession following years of tax-and-spend policies under Labour.
“The figures are likely to pile pressure on Chancellor Philip Hammond to loosen the purse strings and offer tax breaks and other sweeteners in his Spring Statement later this month.”
http://www.dailymail.co.uk/news/article-5452575/The-UK-finally-black.html
They are also pissed off paying for the boat people…It is not like they are in need of low skilled people. If I am not mistaken Italy has the highest IQ in the euro zone kinda hard to pull the bait and switch on them.
“…consumers are back to borrowing like it’s 2006. November was a credit card orgy and December was about twice the year ago level.And has there ever been a case of a country’s house prices tripling in a decade without causing a crisis? That kind of data doesn’t seem to be available, but it’s a safe bet that the answer is either “rarely” or “never.””
https://seekingalpha.com/article/4151600-consumers-surprising-places-borrowing-like-crazy
How do they pay the monthly bills on these cards????? Thats what I would like to understand
If the US is anything like the UK then payday loans at exorbitant rates, moving debt from card to card and taking advantage of temporary 0 or low % offers, remortgaging the house, visiting food banks to tide themselves over. Desperate stuff.
“Statistics from food banks across England show a frightening rise in the number of people using their services, meaning that more and more people don’t have enough money to feed themselves. Between 1 April 2016 and 31 March 2017, the Trussell Trust provided 1,182,954 three-day emergency food packages – up 73,645 from the previous year.”
http://www.independent.co.uk/life-style/food-and-drink/food-banks-areas-most-needed-mapped-uk-food-poverty-mental-health-a8199391.html
Or the ladies can save money by renting a room in exchange for favours. 🙁
http://www.bbc.co.uk/bbcthree/article/d6ad2e6d-2c72-4a35-9281-daaeedf029ee
Sadly I know some people that are doing nefarious deeds to make ends meet.
A taste of 3rd world living….
The Sleazy Man’s harem….
I tried to volunteer to work at the local food bank, to see just what is going on, but unfortunately all the jobs were taken.
There seem to be huge problems in the welfare system, leaving people who are legitimate claimants with no money for many weeks while claims are processed; this is probably part of the story.
What is needed is a Xanax bank….
I don’t really think people can afford the payments on all of their bills anymore. Once a person considers income tax, property tax, insurance, fuel costs, food costs and healthcare costs adding on top of that an auto loan, home loan, student loans and then credit card debt it seems that we are facing peak debt .
Then consider that wages stagnant of falling! What I don’t understand is how we made it this far! Amazing how governments and banks think they can keep raising interest rates and taxes. Where is all the money going to come from?
The consumer and debt = donkey and a thistle. Donkeys like thistles, but if it doesn’t want to eat, you can’t force it to do so.
CB’s want people to borrow without rational limit: but they can not lose their homes, unlike the masses, when default occurs.
No wonder people are turning to opiates… the stress must be monumental….
Actually, they are raising interest rates and cutting taxes.
Governments fail when they are not able to collect enough taxes. Alternatively, when they are not able to buy enough from their neighbors with their currency.
It seems to me that cutting taxes, when they really need to raised, is a step on the way to collapse. Interest rates will rise. While things will look better for a little while, a crisis down the road is certain.
It can be done I have a friend that was thinking about it. I think it is called Kiting spelling my be wrong but it is a thing.
She got a payout on life insurance instead…Like you no kids what do you need that for.
The article says,
The fact that household debt can be increased in the short term helps to cushion the impact of rising energy prices, at least for a while. But if energy prices keep increasing, the problem gets worse.
The same thing happens with other problems, such as higher interest rates and more competition from globalization for jobs. Those affected borrow for a while, but then things fall apart completely.
“Borrowing on credit cards in the UK jumped in January to its second-highest level since before the financial crisis, reviving concerns about the sustainability of unsecured borrowing given recent declines in real household incomes.
“Consumers borrowed an additional £746m on credit cards over the month, when adjusted for seasonal affects, the largest monthly increase since January 2005, according to data released by the Bank of England on Thursday.
“Over the previous 12 months, borrowing increased by 9.6 per cent, the second-highest year on year rate since 2005.”
https://www.ft.com/content/c52465f4-1d32-11e8-956a-43db76e69936
Short term fix; long term a major problem.
“The last global economic crisis hit when hundreds of billions of dollars of mortgage debt went bad on bank balance sheets, and governments bailed out the banks to save the financial system—effectively underwriting and nationalizing the debt. The next crisis might start with a loss of confidence in governments’ practice of printing money to service their own debt—a process gaining momentum as foreign government buyers of U.S. Treasuries shift to purchasing their own sovereign debt…
“Buckle up, because there’s even more debt in the global system than there was at the start of the 2008 financial crisis—only this time it’s corporates and sovereign governments that own it. Who will be left to bail them out when the bill comes due?”
http://fortune.com/2018/02/28/debt-crisis-jerome-powell-federal-reserve-testimony/
“Rapidly mounting debt in the U.S. may be the trigger that bursts the bond bubble, one private equity investor told CNBC on Wednesday, echoing concerns of financial veterans Alan Greenspan and Paul Tudor Jones… Several Wall Street observers have warned that a collapse in the debt market could be particularly nasty because current debt levels are so massive.”
https://www.cnbc.com/2018/02/28/us-aggressive-debt-issuance-may-be-what-bursts-the-bond-bubble.html
https://www.bloomberg.com/news/articles/2018-02-28/swedish-spotify-duo-could-be-worth-2-4-billion-after-listing
Now if I were those guys….. I would be cashing out the whole lot…. and I would embark on a spree to end all sprees…. I’d be tipping cab drivers a thousand dollars…. eating lobster and drinking champagne for breakfast… my only worry would be that I might have to much of the loot left … when BAU comes to an end … that I didn’t waste it fast enough….
Oh to be young… and a billionaire….
What’s the point?
http://static6.businessinsider.com/image/524b48aceab8ea696940fdb0/george-soros-europes-nightmare-is-getting-worse-and-only-germany-can-make-it-stop.jpg
Scott
Feb 28, 2018 at 4:56 pm
I believe those are January numbers, and living in Boston, I can tell you that January was brutally cold. It had the longest extended cold snap that I can recall.
https://wolfstreet.com/2018/02/28/mortgage-rates-blamed-for-3-year-low-in-pending-home-sales/
What happened to the YYY YYYing? This is impossible…. he is lying… Boston was surely boiling hot in January…
Fake News???
A cold snap like this has hit Boston only once before — a century ago
Forecasters are predicting that for the next week — from Wednesday through Tuesday, Jan. 2 — temperatures in Boston won’t crack 20 degrees.
Only once before has the city endured seven straight days of such frigid temperatures.
It happened 100 years ago. For a seven-day stretch ending on Jan. 4, 1918, the mercury in Boston never climbed above 20 degrees.
https://www.bostonglobe.com/metro/2017/12/27/cold-snap-like-this-has-only-hit-boston-once-before-century-ago/0buZxvcNmkYhN7ghClLuaK/story.html
Dance… I said DANCE … I command you to DANCE…. NOW!
More chalice. More chalice. And cowbell
Sing along
They know what is what
But they don’t know what is what
They just strut
What the fukc
Container Party
Ice at all time low?
http://neven1.typepad.com/.a/6a0133f03a1e37970b01b7c95297c9970b
The second post is amended therefore the one that should be approved by the gatekeeper
Sure Gail, don’t put mine up, but post FE …hmmm…censorship?
Can’t face the complete story, I see.
If you can show a connection to energy supplies–cold is causing a problem with natural gas supplies, for example, I will let you post your articles.
Also, some articles go up without my ever seeing them.
How Tesla’s Elon Musk became the master of fake business
Musk’s genius is primarily in the subsidy-seeking realm. By 2015, U.S. governments alone had given his companies US$5 billion through direct grants, tax breaks, cut-rate loans, tax credits and rebates
http://business.financialpost.com/opinion/lawrence-solomon-how-teslas-elon-musk-became-the-master-of-fake-business
We have more and more fake businessman, as there are more and more subsidized businesses, like those made with the EU subsidies etc. Such businesses look like money laundering machines, namely laundering the EU money into your money: you use the EU subsidies for some construction works, build some useless resort, organize some training courses or similar thing and siphon off some money out of these transactions…
Shell forecasts global Natural Gas supply shortage in mid-2020s -NBC NEWS
https://www.cnbc.com/2018/02/26/shell-warns-of-lng-shortage-as-demand-for-liquefied-natural-gas-booms.html
https://imgur.com/a/WPicR
LNG is horribly expensive to ship. As the really cheap-to-extract supplies nearby deplete, it is necessary to use harder to extract gas supplies and ship them longer distances. The price exporters need for the finished product rises, but the ability of buyers to afford the high-priced product does not rise. As a result, LNG demand soon maxes out, because of affordability issues. The demand forecasts are likely high. Also, total energy per capita starts falling too low, and whole system tends to collapse.
Out of gas…
https://www.reuters.com/article/us-china-pollution-gas/chinas-domestic-lng-plants-reopen-after-shutdowns-as-heating-crisis-eases-idUSKCN1GC1A4
This article appeared on http://www.iceagenow.info.
“UK running short of gas”
“Here in the UK we are running short of gas,” says reader John Calvert. “Demand is greater than supply.”
“Companies are being paid not to use power as gas available is 14% lower than demand.
“Note that production from gas (CCGT) is way down on what it could be, as we run short.
“I have a source in the energy supply industry and he tells me the big danger tomorrow is that we expect Storm Emma . If the winds get too high then we turn off the wind turbines to prevent damage, and things get really serious.
“So we are on a wing and a prayer at the moment.”
The Telegraph is calling it “a gas crisis.”
Gas prices on Wednesday jumped to 12-year-highs on the freezing temperatures.
From the article, a very useful website on total UK energy production.
http://www.gridwatch.templar.co.uk/index.php
You can see on this site that they are maxed out on coal production already, having closed coal plants. When they run out of natural gas, and they will eventually, and the wind dies down, their grid will fail.
I know, at TheOilDrum.com we used to watch the issue of the amount of natural gas in storage quite closely, because the UK operates so close to limits. But recently, the the UK was persuaded to close down its largest natural gas storage facility. (Why not fix it? Can’t afford to?)
This puts them even closer to the edge than they were previously. Perhaps rolling blackouts is the only way to explain to people what the problem is.
The US Northeast operates close to the edge as well. Its regulatory authority is warning of the possibility of rolling blackouts there eventually. https://www.iso-ne.com/static-assets/documents/2018/01/20180117_pr_fuel-security_report_release.pdf
Yet they insist on importing more people…yea that is the answer
China ran into a similar problem in the new year… they reverted to burning coal… which flooded Hong Kong with smog…
Shell forecasts global Natural Gas supply shortage in mid-2020s
https://energy.economictimes.indiatimes.com/news/oil-and-gas/oil-and-gas-major-shell-forecasts-global-lng-supply-shortage-in-mid-2020s/63089603
Chinese giant HNA to axe 100,000 jobs, quarter of its workforce, says report
http://www.scmp.com/business/china-business/article/2135164/chinese-giant-hna-axe-100000-jobs-quarter-its-workforce-says?utm_content=bufferd4893&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
This sounds a lot like Anbang Insurance Companies problems. A whole lot of attempted asset selling around the world will tend to push prices of affected real estate down as well. This will make debt repayment problems worse for the whole industry.
Why The U.S. Economy (GDP) Hasn’t Really Increased Since 2000
https://srsroccoreport.com/u-s-gdp-hasnt-really-increased-since-2000/#comment-59410
Excellent article and one of Gail’s charts included!
“U.S. GDP increased by $9 trillion over the past seventeen years by adding $15 trillion worth of debt.”
That’s the crux of it right there. It’s easy to claim an increase in GDP, but the lack of energy usage increasing during that time period let’s us know it was all about doing it on the back of borrowed money, a call on future energy, which looks dubious at best to be available to pay the loans back. Another indicator we’re running towards a Seneca cliff without a viable plan, purely on BAU-forever-hope-juice.
Like the medieval pilgrimage song:
‘We’re all running together, Ave Maria!, rich and poor, great and small, we’re all running towards……the Seneca Cliff!’ 🙂
Picking pennies in front of a steamroller. Humanities have much more problems with everything else than to worry about this https://www.bloomberg.com/news/articles/2018-02-28/-booth-babes-banished-as-carmakers-opt-for-less-flesh-in-geneva
Talk about extreme PC or “snowflaking”
“Swiss auto show to feature fewer scantily-clad women at stands”
On this same website is a post about Macy’s downscaling their approach to sales and now fewer foxes making the autos look even better. Now I know things are getting worse.
Oh, but our society will be so morally perfect,and everyone will feel safe and happy and repsected……just before it crashes. Utopia and Armageddon together! 🙂
Utopageddon.
A search brings up
This is how you beat collapse!
This sounds like a lot of other “Transition Groups.” They can sort of work for a while, if they somehow have funding for the taxes that need to be paid, and payments for the land. They often sell classes, and make the majority of their revenue from the classes they sell. I noticed a power saw, netting over the crops, and several other things that could not be made without industrial civilization.
The same thing seems to be true in the YouTube machining community, the capital comes from YouTube, the work is more or less a hobby.
Your constant predictions of collapse make me think finishing my solar installation is not such a bad idea, something is better than nothing; but, dance is better both in reality and metaphorically. I have gone from, “If it has been done, it can be done,” to , “You make my head hurt.”
Thanks.
Transition groups are a joke: I looked into a few here – deluded, but all the same nice people. No harm in it. No future either. Playing at being peasants: no better or worse than any other role playing game.
Totally ridiculous… recruiting new members to their ‘sustainable communities’ on social media using iphones… a close relative to doomie preppers who use chainsaws and washing machines… and pretend they are roughing it
Pick some berries, light a wood fire, have a sing song, live in a eco-friendly tiny house (TM), get laid with the cool permaculture teacher, etc.
Where can I sign up?
Strip out all the BAU i am seeing there… and see how sustainable that is…
‘The group takes price in being self sufficient’ as the guy lowers table saw to cut a plank of wood….
Id iot s… no … f789ing id i ots….
When Trudeau gets tossed … he can move there…. he can be the leader.
The hound is a howlin!!! Next I will teach her to sing opera
When she starts to address you in articulate sentences, it’s time to worry…..
Fast Eddy is just the medium…. the dog tells him what to type….
https://thenypost.files.wordpress.com/2014/12/david2.jpg
For those who are not familiar with this chap….
Berkowitz was interrogated for about thirty minutes in the early morning of August 11, 1977. He quickly confessed to the shootings and expressed an interest in pleading guilty. During questioning, Berkowitz claimed that his neighbor’s dog was one of the reasons that he killed, stating that the dog demanded the blood of pretty young girls. He said that the “Sam” mentioned in the first letter was his former neighbor Sam Carr. Berkowitz claimed that Carr’s black labrador retriever Harvey was possessed by an ancient demon and that it issued irresistible commands that Berkowitz must kill people.[20]
https://en.wikipedia.org/wiki/David_Berkowitz#Confession
The Daughter of Madame Fast is behind all this
Meanwhile… let’s check in on what the wanker/snowflake otherwise known as the PM of Canada is up to….
http://www.dailymail.co.uk/news/article-5421779/Justin-Trudeau-ridiculed-Indians-fake-outfits.html
And then he joined hands with some poor slum dwellers and sang Koombaya, followed by Imagine…
Looks like a Grade 3 teacher on holiday! (he is .. he is…!!!)
http://cfjctoday.com/sites/default/files/styles/cp_main_image/public/cp-photos/CPT141444908.jpg
http://media2.intoday.in/indiatoday/images/stories/justin-story_647_022617090558.jpg
help find a cure Fast Eddy, HELP FIND A CURE!!!!!!!!!
https://youtu.be/q1dP7p2dqUI
but but but…
if he is cured, then we would lose his entertainment value.
if he can’t handle raw onions, he should not be ordering his hamburgers with them included. good grief, what a spectable.
spectacle.
If the grade 3 teacher was really in charge of Canada…. within 3 years Canada would resemble
http://cdn.c.photoshelter.com/img-get/I0000N8f8juylV4k/s/750/750/Somaliand-Hargeisa-State-House-IDP-Camp-2876.jpg
But with snow
‘He’s a MORE on’
I like … no … I love it!!!
https://www.youtube.com/watch?v=uVCzUKXA96Q
One more chalice then it’s time for Howlin Dog….
Hey, isn’t Trudeau committing ‘cultural appropriation’? Isn’t that a major crime in Canada these days?
I suspect the women in the background were thinking: ‘We thought it might be good to emigrate to Canada, but clearly not!’
I wonder if Indians feel that he is ridiculing them … by dressing like that….
plus he promoted sikh separatism from india which if happen India economy will be
collapse because most of the food come for Punjab[state in india] which sikh wants as there country
This is what happens when you give a grade 3 teacher a real job…..
I’d choose Trump over that… any day….
plus main reason Trudeau gone to india for trade talk which was about
india putting tariff on lentils which canada produces in huge quantity
which in that he failed
GE’s losing streak reaches 12 months with $135 billion wiped out
http://www.orlandosentinel.com/business/ct-biz-ge-losing-money-20180228-story.html
“GE is ground zero for one of the most spectacular destructions of wealth in corporate history; the troubled conglomerate has lost a staggering $445 billion in market cap since 2000.”
“The current market cap for General Electric (GE) as of February 23, 2018 is $125.81B.”
at the 2017 rate, they will be just about zero by December.
Macy’s just confirmed the end of department stores as we know them
http://www.businessinsider.com/macys-is-copying-tj-maxx-and-nordstrom-rack-2018-2
The section they talk about is a little section off at the side. I have a hard time calling this, “The end of department stores as we know them.”
Department store sales have been declining since 2000. The same year med house house hold income peaked.
When the perfume and make-up department of the big store here closes, I’ll know the end has come. It was refurbished recently and now takes up half the ground floor: next floor up, female clothes; and the next, cafe. Perfect day for the bored housewife.
If women ever stopped spending on ‘wasteful non-essentials’ that store would go bust. It’s our economic paradigm in miniature.
Xabier – how about Nail Bars as I believe they’re called? We had none in our short London suburban High Street 5 years ago now we’ve at least three. They are usually busy and seem to charge so I’ve been told about £25 to trim and polish nails. Have we suddenly become so cack-handed we can’t even trim our own nails. I suppose they go with the £5 pints in local pubs and £15 men’s haircuts in the newly opened hipsterish hairdresser (you know the ones with an old motorcycle in the window next to an antique shaving set). Although knowing what business rates are around here I’m surprised any are still open.
I like this Jane Austen quote which seems to me to sum up much of what goes on these days
“For what do we live, but to make sport for our neighbors, and laugh at them in our turn?”
Actually, I found a nail place helpful when I broke my wrist a few years ago. I couldn’t trim my own nails. The place I went to cost only $7 though. There seem to be nail places in every strip mall around here. A lot of women have their toes and fingernails done on a regular basis, especially when they run around with bare feet in sandals in summer.
My insurance pays for nails 12 times a year and covers all 20. Also 12 hours of RMT a year.
Sometimes it is good to be pampered.
One article I thought was interesting in the WSJ is Why International Investors Aren’t Buying Our Debt.
The article agues that interest rates will have to be much higher than they are today, to be attractive to most foreign buyers. A major issue is that these foreign buyers usually buy derivatives to hedge for the possibility of a change in currency relativities undoing the higher interest rate benefit that they seem to be getting. The cost of buying these derivatives is now higher–enough to undo the benefit of what seems to be a higher interest rate.
One issue is that the derivatives, in the way they are usually purchased, make allowance for the full expected increase in interest rates, not just the amount that has been credited to date. Another issue is that the Basel Rules, intended to prevent insolvency of banks, make banks more reluctant to lend dollars in the short term, making derivatives more expensive. Also, “Adding to this, the Fed is now sucking dollars out of the financial system as it rolls back its monetary stimulus, making the currency even scarcer.”
The same problem is expected to affect foreign buyers of US corporate bonds. They too need higher interest rates.
Gail, further to this, see Stockman in an article today in Market Watch. The coming fiscal year will see 1.8T in new treasury issuance, he doesn’t see how the market will absorb it unless they are enticed with much higher rates, possibly 4 – 5%
http://wallstreetonparade.com/2018/02/stockman-1-8-trillion-in-new-treasury-debt-will-hit-bond-pits-like-a-tornado/
I can easily believe this. Interest rates have to rise, but the economy cannot withstand rising interest rates + high (er) oil prices. We have a major clash coming.
Sounds like we’re headed into a time period of unfortunate consequences.
From that linked article, Tagio is this:
“The Fed’s $600 billion combined with the $1.2 trillion from the government means that $1.8 trillion in Treasuries “will be looking for a home” in Fiscal 2019 said Stockman. This leads Stockman to believe that the market simply can’t clear all of this debt at anywhere near the 2.90 percent interest rate at which the 10-year U.S. Treasury has been trading. He says there is going to be a “monumental yield shock” that will take 10-year Treasury yields to 3 to 4 percent “and probably overshoot beyond that.”
“At the same time says Stockman, the Federal Reserve has pivoted to Quantitative Tightening (QT)…”
so then, the Fed will have to reverse this and go back to QE…
the new normal may be periods of QE every few years…
I will be surprised if they don’t go back to QE soon…
or some program with a different name that will essentially be QE.
More QE soon is the only policy that makes sense!
Military takeover in Rio de Janeiro sparks fears of police brutality
https://apnews.com/04bc31349e4847409435d74ba13bbb19?utm_campaign=SocialFlow&utm_source=Twitter&utm_medium=AP
by the way our ic can ended through other reasons like big asteroid come destroyed the earth
we means extinction of human species just like dinosaurs
or solar storm which if happened it will collapse our infrastructure pretty much for lifetime
btw here some trailer what asteroid can do
https://youtu.be/dpmXyJrs7iU
If you ever see one come down, rush in that direction and try to find it. They’re worth a fortune.
https://i.imgur.com/LFm9UrM.jpg
I wonder if this is a photoshopped photo. A lot of this kind of thing is “false news,” put together by someone.
no gail this is real
https://www.reddit.com/r/pics/comments/639obo/an_interesting_interaction_during_the_flowertown/
A New Cunning Plan to Allay Banking Jitters is Hatched in Spain
http://www.ignacio-acosta-sorge.com/wp-content/uploads/2016/07/Playa-en-la-Costa-del-Sol.jpg
The Spanish Government has a brand new cunning plan to fortify the country’s banking system, which was rocked last year by the collapse of the sixth biggest bank, Banco Popular. It wants the country’s Deposit Guarantee Fund (DGF) to insure the entire bank deposits of large companies, even if those deposits exceed the current limit of €100,000, so that if a bank begins to wobble, its corporate customers don’t take their money out en masse…
But there’s a problem with the plan
Spain’s Deposit Guarantee Fund (DGF) doesn’t have nearly enough funds in its coffers to cover large institutional deposits. Like many other EU countries, Spain has not put enough into the fund to provide genuine coverage for bank deposits…
I would expect that no country has put aside enough to fund large defaults.
In Belgium they aspire to reach a cover ratio of 0.8% by 2024.
I recently tried to work out what the law actually has to say in case the “available” funds are not enough. As far as i understood, the guarantee fund takes over the position of “claimer” from you versus the bank (there is even a word for it: “subrogate”), so in essence it pays you “in advance” so to speak from the funds it has.
The legalise is a hurdle for me, but it appears that the guarantee fund subsequently tries to claim back the money from the very bank that it was guaranteeing (Yeah that will work out great for them ??!!!, might be misunderstanding this part). Two other issues struck me when reading the text:
The actual funds do not appear to be held in a separate account; they are transferred to the Treasury ?!! (again not sure if i even read it right never mind interpreting it).
If the amount is insufficient they can raise extra contributions from the other associated banks / insurances, but appears to be capped. The last i found worrying, because it suggests that ultimately the Guarantee Fund is not really on the hook for every sub-100.000 deposit, but just for what it has on the books (plus some capped emergency contribution )?
Would be very interested to hear your view on this topic
I am certain each fund has its own rules. The Iceland financial crisis (2008-2011) related to precisely this issue. Deposits were supposedly guaranteed, but there was little money actually available to pay the amounts. According to Wikipedia, https://en.wikipedia.org/wiki/2008–2011_Icelandic_financial_crisis
Having this happen everywhere would not be much fun!
What would it mean in energy terms for a government to have put aside enough to cover defaults? Would this require them to have been operating “beneath their means” or consuming less resources and energy than they had the capacity to?
Money is just a form of debt. There is not much point in storing it up in advance. If a government wants to create money/debt (and drop its currency relative to other currencies because of this debt), it can do it any time it wants to. There is no point in adding a huge amount of unneeded debt, allocated to this particular purpose, in advance.
If a country really wanted to store up energy to fund the debt, it would need to store up food, oil, natural gas, and perhaps coal. Of course, no one does this either.
Pension plans try to store up the debt obligations of government and businesses, as well as shares of stock (which are really equivalent to debt). The big problem with this approach is that there really aren’t enough bonds and shares of stock to be stored up to do more than fund the pension plans that currently exists (sort of, but not enough). Furthermore, these stocks and bonds don’t have value if there really isn’t energy resources. They are in many ways like the government debt referred to above, which could be issued at any time.
We really use the resources that are available each year. There is no way we can store them up. All we can store up is debt promising future resources.
Thank you for the response, your last paragraph aligns with my thinking. I’m questioning if it is really possible to “save for the future” on a national scale – as in should this activity be viewed as a kind of illusion or superstition, dependent upon growth and resources available, and not as any kind of “scientific” activity. It of course changes the whole conversation of “fiscal responsibility” as you have mentioned before.
This is why government programs for the elderly are always paid out of tax dollars collected (from young people) in the year when benefits are paid. There is really no other way to do it.
Of course, when people sell their shares of stock, the things that they buy will have to be made with the resources available in that year (approximately). If there really aren’t enough resources available, it will be a problem. My guess is that the people who grow the food will be first in like to get the food. Others can also get some, if there is enough left over.
“…sales activity in the London property market is near historic lows.”
http://www.independent.co.uk/news/business/news/foxtons-profit-slump-latest-results-london-housing-market-sales-lettings-historic-lows-a8232051.html
“China’s official gauge of manufacturing activity for February suffered its largest drop since 2011, an unexpectedly sharp slowdown that left it near the zero-growth level.
“The manufacturing purchasing managers’ index published by China’s National Bureau of Statistics fell to 50.3, down a point from January and the largest fall in more than six years. The fall marked the gauge’s nearest brush with the 50-point mark that separates growth from contraction since August 2016.
“A median forecast from economists polled by Reuters had predicted only a fractional slowdown: none of the 28 forecasts for February had pencilled in a reading below 51 for the gauge, which is based on a survey of larger and predominantly state-run companies.”
https://www.ft.com/content/a016463a-1c36-11e8-aaca-4574d7dabfb6
I saw a different article on the same subject. The rising yuan, making the price of exports more expensive to foreign buyers, is evidently an issue. (I haven’t read the FT article. It may say that as well.)
“Mexico’s trade deficit widened to the most on record in January and was wider than forecast by any economist surveyed by Bloomberg.”
https://www.bloomberg.com/news/articles/2018-02-27/mexico-s-trade-deficit-widened-to-worst-on-record-in-january
That is a no-brainer. Mexico is a basket case. As its oil fields continue their decline, Mexico will be Venezuela and Venezuela will be hell on Earth.
Mexico Oil Reserves Gone in 9 Years Without New Finds
https://www.bloomberg.com/news/articles/2017-03-31/down-10-mexico-oil-reserves-gone-in-9-years-without-new-finds
the don had better get his wall built pdq
We already are already a net oil exporter to Mexico. I think the possibility that Mexico will become the next Venezuela is the concern behind the planned US wall.
The article manages to avoid talking about declining oil exports as being an issue.
I’ve just spent the last 20 minutes running various dog videos to see how my dog reacts… (Madame Fast has departed for a month — and there is no harem… so I must occupy myself)
This actually works — she howls — fascinating stuff….
probably howling because its Madame Fast who feeds her
Didn’t work here FE: the look he gave me seemed to say ‘I’m supposed to react to that, am I? Can’t you ever do anything intelligent and useful?’
It’s quite a low point to be patronised by one’s dog……
it sorta worked on our dog. she gave us a look like “quit iffn with me”. no howls. that’s because she’s not a wienner dog, they even howl at passing sirens.
It’s the siren in the video that causes the dogs to howl. Can you hear it in there at the beginning? It didn’t make my hound dog howl, but a real siren going by our place makes her howl every time.
She’s a wiener dog, a standard wire-haired dachshund, 20 lbs, and the best damn ratter and mouser I ever had. I’ll need her because she catches the rats and doesn’t eat them, so I will. She eats the mice, though.
And marmots, she goes down holes and kills marmots but doesn’t eat them. The first time she saw a marmot, as a puppy, a lightbulb went off over her head and the DNA kicked in. Marmots are pretty close to badgers, which are here, but pretty rare. I only saw one once. I understand that in Tibet, marmot roasted on a stick over an open fire is a great treat. Must try it someday, but right now, my dog has cleared the place of marmots, so she’s going after squirrels and chipmunks. Those she can’t catch, for some reason. I’ve eaten squirrel in Arkansas and it was good.
“I’ll need her because she catches the rats and doesn’t eat them, so I will. She eats the mice, though.”
what’s the best way to cook and serve rats?
not that I’ll ever try it…
but, the Doomie Preppers may want to know.
King Rat is good I only ate tree rat once it was OK
“Going all-in on renewables is a bad idea.
“Infrastructure required to reach 100 percent wind and solar power isn’t affordable.
The problem: Sun doesn’t always shine. Wind doesn’t always blow. To guarantee supply with renewables, battery storage or long-distance power lines are needed.
But: A new study says that isn’t feasible. Providing just 80 percent of power reliably with wind and solar in America would need storage costing more than $2.5 trillion.
Why it matters: Some US cities and states hope to go 100 percent renewable. But nuclear and fossil-fuel with carbon-capture may still be needed as a complement.”
https://www.technologyreview.com/s/610366/relying-on-renewables-alone-would-significantly-raise-the-cost-of-overhauling-the-energy/?utm_source=newsletters&utm_medium=email&utm_content=2018-02-27&utm_campaign=the_download
Then, there’s the current reality: no AC power grid comes close to getting even half its energy from IRE (intermittent renewable energy).
As these more and more of these articles get out, and as countries have more and more cost problems trying to integrate intermittent renewables, the story about wind and solar will have to disappear.
Central bankers can do whatever they want. They control the world’s money.
You, on the other hand, are limited to working for money and posting your thoughts on an obscure blog on the internet.
What, did you guys think you were rich, powerful, and important? If so please reveal yourselves! I’m very interested!
But Fast Eddy is the World Champion….. didnt you get the message?
Who is rich, who is powerful, who is important… in the world where the wealth and power goes bust?
Rich? Hardly. The definition of rich is about to take a U-turn.
Allahu Akbar, dear Dolph, Allahu Akbar – anything else is vanity and pride. 🙂
“What, did you guys think you were rich, powerful, and important?”
By virtue of posting, you put yourself in the same boat, so why don’t you answer your own question?
I know my position. I think that’s the first step in collapse understanding. Self knowledge.
The thing about we doomers is that we analyze things without being in a position to change them. And if we were in a position to change them, we wouldn’t be doomers.
But no one is in a position to really change anything major about collapse. Perhaps some are in a position to help delay it a bit, at most.
Or you could of bought Bit coin at a buck and be short GE
It was the heaviest snowfall to hit Rome in six years. Ill-equipped to handle such storms, the Mediterranean city’s authorities asked the army for help clearing the roads, and called on other areas to send in snowplows, Reuters reports.
The unexpected Winter Wonderland was chalked up to a Siberian weather system dubbed “the Beast from the East” which has plunged much of the continent into dangerous, sub-zero temperatures.
http://time.com/5176977/rome-snowfall-snow-video-drone/
Funny how if we get an abnormal heat wave… it is attributed to XXX XXX
But when we get the opposite there is no suggestion that this is evidence that XXX XXX is a ho ax.
You know what!!!
If we had a rapid period of cooling — and the glaciers were to rush forward from the north at say 50km per year….
The XXX XXXers…. would STILL … not admit that… XXXX XXXX is a ho oooax.
How about that for delusion !!!!
And by the way, I have a graduate degree in geography, which includes physical geography (which included climatology). I”m not an expert, but the topic is complex and the feedback loops are scary. Call me deluded all you want, but I do have some background here and I can certainly read scientific journals and be alarmed. Don’t bother arguing this has all been debunked.
No problem. We know the climate is changing. We also know that there is nothing we can do to fix the problem. You can be alarmed, but you need to think about how we adapt, not how we do something different with energy products.
Thanks for regurgitating all that horse sh it that you read about in the MSM.
Clearly you have no common sense… let me try to pound some into your head:
1. We have been burning carbon for over a century now
2. Every year we burn more than the last
3. We are told that this carbon is trapped in the atmosphere preventing heat from escaping – kinda of like putting a carbon blanket around the planet
4. If this is correct then the planet should be seeing RECORD temperatures on a regular basis because the blanket gets thicker every year
5. We are not seeing record temperatures – in fact in many places the record hottest temperatures were registered many decades ago
6. Also – we should NOT be seeing any extreme cold temperatures – yet we are seeing extremely cold temperatures in the Northern hemisphere this winter — how can that be – when the blanket gets thicker every year
I do not give a f789 what your degree is …. I have a PHf789ingD in common sense — and I am the World F789ing Champion.
And I say XXX XXX is a f789ing HO aX.
Let’s take a look at Leo’s island… the one that will be underwater in a few years… the one where he is investing millions in the CONCRETE eco-hotel….
http://www.urbasm.com/wp-content/uploads/2014/03/leonardo-di-caprio-island.jpg
Thanks for regurgitating all that horse sh it that you read about in the MSM.
Clearly you have no common sense… let me try to pound some into your head:
1. We have been burning carbon for over a century now
2. Every year we burn more than the last
3. We are told that this carbon is trapped in the atmosphere preventing heat from escaping – kinda of like putting a carbon blanket around the planet
4. If this is correct then the planet should be seeing RECORD temperatures on a regular basis because the blanket gets thicker every year
5. We are not seeing record temperatures – in fact in many places the record hottest temperatures were registered many decades ago
6. Also – we should NOT be seeing any extreme cold temperatures – yet we are seeing extremely cold temperatures in the Northern hemisphere this winter — how can that be – when the blanket gets thicker every year
I do not give a f789 what your degree is …. I have a PHf789ingD in common sense — and I am the World F789ing Champion.
And I say XXX XXX is a f789ing HO aX.
Let’s take a look at Leo’s island… the one that will be underwater in a few years… the one where he is investing millions in the CONCRETE eco-hotel….
http://www.urbasm.com/wp-content/uploads/2014/03/leonardo-di-caprio-island.jpg
http://www.urbasm.com/wp-content/uploads/2014/03/leonardo-di-caprio-island.jpg
We will have a rapid period of cooling, leading to an ice age…some day relatively soon. It is a mathematical certainty.
Self-exterminating ….
Maybe we should bottle this idea and sell it as rat poison….
Anecdotally … I just wanted to mention that I put a fire on today … its only about 20 but very damp and chilly … very London-esque weather…
For those of you who are not aware — our seasons are reverse of those in the northern hemisphere… so we are in the middle of summer….
XXXXXX XXXXX is a HO AX.
Snow in Rome as well.
That would be like lightening a fire August 28th? That is insane! Must be climate change.
Shell : Beware Natural Gas Shortage Coming
Shell says that they expect LNG demand to grow by a explossive 500M metric tons/year by 2030. Supplies on the other hand will fall by 300M tons/year due to a lack of new projects and natural declines in existing production.
https://www.investing.com/analysis/beware-natural-gas-shortage-200294607
Now we have oil and gas shortages coming in the next decade!
I’m sure we can go without heat, light, and motion! /s
Thermal underwear.
There’s no such thing as the Collpase of Civilization: only inappropriate clothing.
Dow falls 299 points after Powell signals Fed will keep raising rates to contain inflation
https://www.cnbc.com/2018/02/27/us-stock-futures-dow-data-earnings-and-politics-on-the-agenda.html?__source=sharebar|facebook&par=sharebar
I really miss Janet Yellen…
and Keith… I really miss him more…
but we still have Kurt.
Thank you very much! Janet, Keith and Fast Eddy walk into a bar …
Thank you, I’ll be here all week in The Resource Room.
Powell doesn’t seem to be guaranteeing anything…
just hinting at a few 2018 rate hikes…
or bluffing… we shall see.
Fed chair Powell hints at a few 2018 rate hikes to tame inflation?
https://www.cnbc.com/2018/02/27/bonds-and-fixed-income-data-fed-speeches-on-the-agenda-for-investors.html
US 10 year is now up to 2.90%…
I’m not worried…
just wondering if this is smoke and/or mirrors, or if they really are seeing/admitting higher inflation?
Yeah, but the Fed has a habit of saying they may have to increase rates but only rarely doing so. What have we gotten so far since hitting rock bottom int. rate? 2 upward hikes of .25 x 2 = 1/2%? It’s kind of a fascinating thing to act like they can raise rates, but in reality we all know would be very risky. They’re risk averse so I doubt it. Every CB from here to the Rock of Gibraltar is walking a tightrope.
10 year 3.10+ start to worry, big time—-
The horses are neck and neck….
End of Oil vs Interest Rate Implosion ….
I will laugh in the face of 3.10%…
but 3.20%, uh oh, then the knees may be trembling.
They can control the interest rates. They can’t control the end of oil…
The FED can control the interest rates – they cannot control diminishing returns.
This is exactly the problem. Raising interest rates to try to control diminishing returns makes the situation worse, not better.
Look at the stocks, bonds and other financial markets. The performance is dismal. If there is a lot of money printing, manipulations and if they are still doing all out, then I would say the that we are at the of the rope. As Zappa said, the curtains will drawn to show the wall when the show is too expensive to maintain
The stock markets are performing very well … other than the slight dip earlier this month
not rising as fast as I would expect.
Companies need to buy back more stock faster@@@@@
Did you see this article, showing in graphs how stock buybacks are supporting the current high stock prices? https://seekingalpha.com/article/4151534-markets-debt-orgy-reaching-climax
I see artificially low interest rates as being one of the prime drivers of these buybacks. These are some charts:
https://gailtheactuary.files.wordpress.com/2018/02/buyback-increase-when-stocks-are-priciest-seeking-alpha.jpg
https://gailtheactuary.files.wordpress.com/2018/02/buy-high-sell-low-and-with-debt-seking-alpha.jpg
The third chart (below) is described as follows:
https://gailtheactuary.files.wordpress.com/2018/02/buybacks-propping-the-bull-market.png
Back in the day this used to be called ramping the shares…. and it was illegal.
https://en.wikipedia.org/wiki/Market_manipulation
Here are the fault lines the USA could break into after the collapse
https://imgur.com/a/j2Hm5
This implies that regional governments would be set up. Where would the funds come to do this? Why wouldn’t the US fall apart into individual states, each with their own currency? In fact, why would Northern California and Southern California be together? Why would the Eastern and Western parts of the state of Washington be together?
I bet the “I told you so” doomers will be thrown into FEMA camps!
There will be Total Chaos
I agree…TOTAL CHAOS! No one will care about states anymore. FEMA camps LOL. Yeah right. People will shoot to kill and leave the corpse behind. No need to FEMA camps. All the money being made off the “preppers” is helping extend BAU. So, let’s hope more folks start “prepping”.
after The Collapse?
I don’t see how there could be any remaining federal or state governments…
I would have my doubts even about local governments…
but, that chart is interesting…
part way down the Seneca cliff, we might just see something like that.
The only thing certain is death and taxes. I’ll bet on taxes somewhere, somehow. You guys are making my head hurt.
Taxes disappeared in many areas after the fall of western Rome as many areas went to entirely land based feudal economy.
yes…
after The Collapse:
“only two things are certain in life: death and… hey, Rocko, what was that other thing?”
“The only two certainties in life are death and warlords”
And disease… and famine… and spent fuel ponds…. the various horsemen….
“The only two certainties in life are death and OFW”
Assets and liabilities. What boggles the mind are those that consider the latter the former.
“Assets and liabilities. What boggles the mind are those that consider the latter the former.”
That’s just the magic of double entry bookkeeping.
I agree…taxes will disappear. If you have anything of value and can guard it, you will be a winner. If not, it will be taken from you. If your of able body you will be enslaved. If not, you will be killed. No one wants this to happen. So, spend the money, get loans, make BAU continue a little longer. After many years things may reorganize (if there is sufficient energy to do so) and taxes will return. But, I don’t think taxes will be coming back after things fall apart and population levels drop way down.
https://www.nbr.co.nz/article/us-senate-votes-slash-corporate-tax-rate-ck-210706
Vapourizing … right before our eyes….
Taxes are the hardest thing to keep up. Inadequate tax revenue is a major reason why governments fail. Obviously, with inadequate tax revenue, major government services, like keeping up roads and paying pensions to the elderly disappear. A government can issue more of its own currency, but it is hard to buy imported goods and services with that currency. Supply chains disappear.
It is hard to see how a new government could come into place and provide very much of the services that the former government provided. The US recent tax cuts look to me like a step in the direction of collapse.
all nations, of whatever size are constructs of the indigenous energy within them, supplemented by what they can steal from elsewhere.
when that energy resource is no longer available then nations collapse and break up into smaller regions that are self supporting
the borders wlll be fluid, because none will accept them, and will try to appropriate resources from other regions
Yes, I agree Norm. No one will be very mobile either.
Present borders and ‘nationalities’ reflect past patterns of energy-appropriation.
Coca-Cola announces more layoffs
http://www.cbs46.com/story/37599428/coca-cola-announces-more-layoffs
State of the world causing a boom in doomsday prep industry
https://nypost.com/2017/08/17/state-of-the-world-causing-a-boom-in-doomsday-prep-industry/
In other news, Doomsday Prepping has now been designated as an official religion. All expenses related to prepping are now 100% tax deductible.
A government spokesman also indicated that a decision was pending on a bill to offer 500,000 billion dollars in subsidies to Preppers in line with what has been provided to other new religions including Tesla and Solar and Wind.
Leader of the opposition Facts and Logic Party the right (and always right) awesome and honourable omnipotent Fast Eddy heckled the spokesman calling him a f789ing a rse ho le and accused him of kowtowing to the DelusiSTANI lobby…
in related news…
the newly updated DSM-5 now lists Doomsday Prepping as a mental disorder:
https://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=dsm+5+5th+edition&rh=i%3Aaps%2Ck%3Adsm+5+5th+edition
when asked to comment, Fast Eddy said:
“the Delusi STANI Manual is a valuable reference”…
It is a mental condition brought on by impulses of extreme panic as a result of realizing BAU is about to end.
Symptoms include delusional thoughts that setting up a small farm in a rural area will somehow protect one from starvation, hordes, disease, armed killers, and radiation from spent fuel ponds.
There is no treatment for this condition – as there is no cure for stuuupidity
Actually…. there has only been one instance of a person being cured of this severe mental problem…..
So harebrained nihilists like you and FE are now referencing psychiatric classifications…vanity of vanities!
Seriously … this is now an official mental disorder
Doomsday Delusional Disorder: Overview, Diagnosis, Epidemiology
Doomsday delusional disorder is an illness characterized by at least 1 month of delusions but no other psychotic symptoms, according to the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5).
Read More https://emedicine.medscape.com/article/292991-overview
It’s becoming an epidemic…. we’ve even got Tee Vee shows that cater to these whack jobs…
http://channel.nationalgeographic.com/doomsday-preppers/
Now children … what did we learn about the MSM?
Yeeeessss… that’s it…. the MSM exists to control what we think.
Very good children. You are learning.
Now why would the MSM have teevee shows about how awesome doomsday prepping can be?
What’s that? Of course! This appeals to those who are anxious about the future…. and has any good psychologist knows…. when the vermin human is stressed — the best advice is — do not stew in your own juice —- TAKE ACTION to address the cause of the stress.
What better way than to return to a simple way of life — make believe you can stay alive without BAU….
So we get tee vee shows that present a bucolic Little House on the Prairie story … no hordes… no grinding horrific poverty… no disease… no ex-military men gunning down farmers while they sow their oats…. and NEVER mention the issue of keeping spent fuel ponds cooled in the utopian no electricity no shopping wonder world….. nah….. no negative thoughts allowed!
Just like when Elon was recently asked how people on the Mars colony would survive cosmic radiation — what did he do — he ignore that question!!!
Pleasant thoughts…. wonderful thoughts…. organic carrots and pumpkins… and home made peanut butter…. and much singing of Koombaya….
It is working VERY well – as we can see from the commentary on FW….
Plenty of you have embraced this stinking heap of dung…. you are smearing it on your faces…. throwing clumps of it at each other as you giggle and fart…. you have swallowed the kool aid (organic)….
Prepping will not save you — any more than Elon will save you …
Ya’ll are just like a bunch of cattle or pigs or sheep….. being loaded onto trucks to be taken to the slaughterhouse…. you are oblivious to what is happening…. you think you are headed to a brave new and better world…..
When in fact you are about to be introduced to hell on earth….
Just wait till the gates open… and the Horror begins…..
LOL Fast, i love how you keep honing your arguments. Can you tell us a bit about your new diggs?
When one has captured a DelusiSTANI…. one must not be complacent… the screws must be continuously turned until their eyeballs pop from the head…. otherwise the slimy buggers will escape….
As we can see… I have a few of them in my pen at the moment…. I do enjoy poking them with sharp sticks (between cups of wine)…. they get very very upset and rattle the cage and spit ….
I am considering purchasing one of Elon’s flame throwers…. I will teach them not to spit…
As for the new digs… all I can say is that it is near to some of the best vineyards in NZ…. therefore … when the end comes….. there will be one hell of a party
Lol…hope you aren’t this dense irl.
Rate your prep!
“As everyone is keenly focused on stocks, yields and the dollar, the real action is taking place in the dollar funding market.”
https://www.zerohedge.com/news/2018-02-27/libor-ois-blows-out-libor-rises-above-2-first-time-10-years
LIBOR USD highest since 2008.
https://www.zerohedge.com/news/2018-02-26/peak-us-shale-could-be-less-4-years-away
This is coinciding with the feds raising interest rates. Interesting to see how it plays out.
Thoughts?
More plates will come off their sticks. They cannot keep turning them all, forever. More hands per stick though in the near future.
it always seemed to be chines guys doing that spinning plate act as i recall
I can understand the fed wanting to raise rates to tamp down inflation like they are claiming, however I believe they along with all the other CB’s have painted themselves into a corner that is piled high and deep with debt (aka future energy). They will have to go back to ZIRP and quite possibly more QE.
The question is when the shale plays are tapping out and on the backside of production will ZIRP be enough to lure investment to keep the pumps going or will the curtain be pulled back far enough for enough people to see that the illusion is over and we’re trapped?
“I believe they along with all the other CB’s have painted themselves into a corner that is piled high and deep with debt (aka future energy). They will have to go back to ZIRP and quite possibly more QE.”
I agree. If this situation can be equated with chess, CB’s are playing an end game. The only thing we don’t know is the point in time when it’s a stalemate.
or do you mean checkmate?
Will anybody believe that the illusion is over, or even that it was an illusion?
even the committed doomsters in here are certain it will go on ”a few more years”
illusion?
as a full participant in IC, I must insist that it is very real…
if that’s what you mean… and yet…
when IC crashes, most people may never realize that it was the magnificence of FF that enabled the heights of our wealth…
not just brains or ingenuity or technology.
“or do you mean checkmate?”
I mean stalemate, because that’s the point in end game when one player has forced the other player into no other move than to move it’s king into check, which it can’t and the person that can’t move calls a stalemate. If the CB’s can no longer make a move because the gambit has run out, then that’s the end of the game. Stalemate, checkmate, who cares exactly how the analogy is depicted, it’s the end. That is probably what will happen to, but think about that, it will happen all of a sudden.
For the youngsters
“start declining on a steady downward trend by 2050, when tight oil production is expected to be at 4.42 million bpd.” – Yeah right. I don’t believe that. Tight oil wells deplete faster than conventional by the nature of the source rock. That graph they show slopes off much too slowly post peak. IMO the whole of what was the USA will be non-existent by 2050.
agreed…
this is just a model of future production…
I have to think that there’s some serious flaw in that model.
“Thoughts?”
I doubt the fed board members ever discuss oil production…
anyone here ever read their minutes?
not me…
I would guess that they might think that something like oil production isn’t worthy of their intellects.
The Fed sends the military out to destroy any country that attempts to inhibit or control their supply of oil….
You bet your bottom dollar this is discussed — without oil there is no Fed.
These are not babbling id iots we are talking about — you do not get to lead a very complex world if you are a babbler.
The Beginning of the End
JUNE 13, 2003 – There is increasing evidence that massive economic stimulus — monetary, courtesy of the Federal Reserve, and fiscal, thanks to the president and supply-side minded lawmakers — is taking hold.
The magnitude of the policy turnaround, which caps a constructive, multi-year reflation process, should overwhelm the economic negatives — including the drag from expensive oil and poor finances at the state- and local-government levels.
Expensive oil and its impact on other energy costs remains a concern.
The current level of U.S. monetary stimulus is massive. Real interest rates have fallen 5.2 percent from December 2000 to March 2003, reaching -1.2 percent. A swing of this magnitude may be historical.
Read more at: http://www.nationalreview.com/article/207227/reversal-fortune-david-malpass
you could be right.
No, worst probably not over yet for S&P 500, these analysts say
Should U.S. stocks keep going at the pace of the past two days, they’ll hit a record before the weekend. But a few Wall Street analysts say pain in equities probably isn’t over yet.
For one, look at history. From 1992 through January, there were four instances when convulsions like this month’s pushed the 10-week rate of change in volatility to an extreme level, according to Canaccord Genuity’s Tony Dwyer. The S&P 500 Index gained on average 5.6 percent after the instances, according to the firm’s data that exclude the market jitters of 2008. Each time, stocks caved in again after the rebound.
The S&P 500 is up 4.9 per cent since a 116-per-cent spike in volatility pushed the rate of volatility’s change to 125 on Canaccord’s rating scale, in the extreme territory.
“The comfort of the rebound should soon fade, either from fear of the Fed, disappointing data, or some combination of the two,” Mr. Dwyer said on Monday. “Last week did very little to change our expectation for a potential retest of the ‘shock drop’ low, followed by a very choppy few months that should set the stage for a second-half ramp.”
https://www.theglobeandmail.com/globe-investor/investment-ideas/no-worst-probably-not-over-yet-for-sp-500-these-analysts-say/article38125335/?cmpid=rss&click=sf_globe
March could be better for the markets!
https://www.cnbc.com/2018/02/27/why-march-could-be-a-better-month-for-stocks-but-there-is-a-warning.html
“The party can still go on, but the later it gets, the sloppier it gets.”
sure…
let’s party like it’s (when we had cheap FF in) 1999.